In a statement this morning, the Norwegian energy giant said the exploration project was “not commercially competitive compared with other exploration opportunities in the company”.
Equinor is the latest company to abandon plans to drill the Bight, following BP in 2016 and Chevron in 2017.
In December, the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) granted Equinor environmental approval to go ahead with oil exploration, beginning late this year.
Environmental groups have bitterly opposed Equinor’s bid to explore the Bight, arguing at it threatens a catastrophic oil spill there.
The Wilderness Society launched legal action against NOPSEMA to challenge the approval last month.
“The (NOPSEMA) approval of the Stromlo-1 exploration well environment plan confirmed our ability to safely operate in the Bight,” said Equinor’s country manager for Australia, Jone Stangeland.
“However, Equinor has decided to discontinue its plans to drill the Stromlo-1 exploration well, as the opportunity is not commercially competitive.”
South Australian Minister for Energy and Mining Dan van Holst Pellekaan said: “whilst this announcement is disappointing, we respect the decision of Equinor not to proceed with the approved exploration on economic grounds.”
Federal Resources Minister Keith Pitt said the company would “continue to be part of the Australian oil and gas industry”.
“I know many will find Equinor’s decision not to proceed with this oil exploration project in the Great Australian Bight extremely disappointing, and it is particularly hard for South Australia,” said Pitt.
“The Liberals and Nationals Government remains committed to encouraging the safe development of Australia’s offshore petroleum resources, which is overseen by a world-class independent regulator in (NOPSEMA).”
Pitt said the Bight “remains one of Australia’s frontier basins and any proposals for new oil and gas fields in this area will be assessed fairly and independently”.
“I want to highlight that Equinor worked within the rigorous approval processes in place for this project and the company’s environmental plan had been accepted by NOPSEMA.
“Since Equinor was first granted the exploration permit in 2011, the company has undertaken a rigorous and very public process of consultation and approvals process.”
Pitt said Equinor continued to have an interest in oil and gas exploration in Australia, including an exploration permit offshore Western Australia.
The South Australian Chamber of Mines and Energy (SACOME) expressed disappointment in Equinor’s decision.
“Sadly, this is a lost economic opportunity for South Australia during a period where the State is pursuing an ambitious 3% growth target,” said CEO Rebecca Knol.
“The public campaign waged against Equinor deliberately overstated risk and ignored the significant benefits of the project at a time where Australia’s oil production has fallen significantly over the last decade and we now import over 80 per cent of the oil we use.
“SACOME commends Equinor for its transparency, public engagement and commitment to meeting regulatory and environmental obligations throughout this process.”
CEO of Greenpeace Australia Pacific David Ritter described the decision as “an incredible win for people power and nature, after years of relentless campaigning by coastal communities, Indigenous traditional owners, surfers, the seafood industry, tourism operators and other local businesses”.
“Never doubt the power and determination of the Australian people,” he said, adding that other oil companies still had plans to drill the Bight.
“Extreme oil projects like this have no place in Australia’s waters, and Greenpeace will continue to fight to protect Australia’s wild whale sanctuary.”
“The Australian government should now impose a permanent moratorium on oil drilling in this precious marine wonderland.”
Centre Alliance Environment spokesperson Senator Rex Patrick said Equinor’s decision was “welcome news”.
“This is a project that would have delivered very little economic benefit to Australians but would’ve brought significant risk to the environment and our fishing and tourism industries.”
Greens Environment spokesperson Sarah Hanson-Young said the decision demonstrated there was “no social licence for an international oil giant to drill in our waters, and that people power can win”.
“South Australians love our gorgeous Bight and we want it protected for future generations and the rest of the world to come and experience.
“What we need now is World Heritage protection.”
CEO of independent Australian energy consultancy EnergyQuest Dr Graeme Bethune said the decision to end exploration was likely driven by the company’s carbon reduction targets.
“In our view, the decision is likely to have been driven by stronger carbon reduction targets of the European oil companies,” said Bethune.
“Earlier this month, Equinor announced it would include Scope 3 in its emission reduction target – (a) 50 cut in net carbon intensity by 2050.
“Carbon costs are starting to bite and the European companies appear to be setting higher hurdles for oil projects … than gas (ones).”
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