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Oil production at new low

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Australia has slumped to its lowest annual production of oil in more than 40 years.

The industry’s latest report card, by energy economics group, EnergyQuest, shows the country’s oil output for calendar 2013 was the lowest since 1970, plummeting 18.6 per cent to 71.9 million barrels compared with the previous year.

While Australia churned out a record volume of gas in 2013, up 3.1 per cent to 2,214 petajoules (PJ), oil’s poor showing dragged down the overall total petroleum production sector’s performance.

On the flipside, 2013 was a record year for development spending on Australian-based oil and gas projects.

The spend peaked at $60 billion, driven largely by the country’s investment in multiple and now well advanced LNG infrastructure.

The figure is a 29 per cent jump on the then record 2012 development expenditure of $46.4 billion.

In its just released Energy Quarterly Report reviewing the sector’s performance in  2013, EnergyQuest also notes that it was a poor year nationally for the replacement of petroleum reserves – the gap between the amount of oil, gas and condensate produced, and the estimated volumes contained in new discoveries.

Only 41 per cent of gas produced was replaced with new gas reserves while the oil and liquids reserves replacement ratio crashed to -16 per cent.

Since Australia’s investment in west and east coast LNG facilities commenced early in 2010, the projects have spent  more than $155 billion – of a committed US$194 billion spend – a size equivalent to the post GFC bailouts of Ireland and Portugal.

The report card suggests the oil and gas development spend peaked last year and will now start to come off as the LNG projects move into commissioning.

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