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Overview of Australia's Oil, Gas and Energy Industry


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Overview of Australia’s Oil, Gas and Energy Industry

Australia is a member of the Organisation for Economic Cooperation and Development (OECD) group which promote policies to improve the economic and social well-being of people around the world. Australia is one of only three net hydrocarbon exporting nations in the OECD and is the largest net exporter of coal. Australia also exports natural gas but is a net importer of oil.

Australia supplies energy resources both internationally and domestically as it has large resources in coal, uranium and natural gas. The oil, gas and energy industries are major contributors to the Australian economy. KPMG Econtech’s economic modelling stated that “the petroleum industry contributed $6.2 billion per annum to the GDP. This is two-thirds the contribution of the textiles, clothing and footwear industries and twice the forestry and fishing industries.”

Australia has invested heavily in the oil, gas and energy industries and with continued population growth and the ever-increasing need for energy, future economic growth is a definite. Not all areas of the country have been fully explored or exploited for oil and gas reserves. Australia has a strong growth potential in expanding productions and increasing exportations.

Foreign investments contribute significantly to the economic growth of Australia. Its safe, stable and conscientious political and governmental policies and procedures make Australia an attractive investment opportunity. Coal Seam Gas alone has received $31 billion in investments within four months of production in 2010 whereas other countries have had to wait years for investors to contribute towards projects.

Australia has shown to be a reliable and competitive player in the oil, gas and energy industries and is a supporter of corporate responsibility programs, environmental conservation and restoration projects and community development programs. Australia also has ethical and regulated trading agreements concerning the exportation and use of uranium and will only supply it to countries who have signed bilateral safeguards agreements with Australia, complying with regulations that it may only be used for electricity generation and may not be used in weaponry or warfare creation.


Australia is the world’s largest exporter of coal with 60% of the annual coal production being exported. Japan is the largest importer of Australian coal. According to, Australia is the fourth largest world producer of coal. Production has grown by 34% over two decades and is continuing to grow.

Black coal deposits are found in New South Wales and Queensland and are used for power generation and exportation. Brown coal deposits are found in Victoria, South Australia, Western Australia and Tasmania and are used for domestic electricity generation.


Oil production has been declining over the years as mature oil fields reach exhaustion; approximately only one decade of known oil resources are remaining at today's production rates within Australia. Most oil exploration has occurred offshore with onshore reserves remaining unexplored. This could potentially be seen in a positive light as many regions could possibly have hydrocarbons to sustain future growth.

The majority of oil reserves are located off the coast of Western Australia, in the Northern Territory, Victoria, South Australia and Queensland. Oil is used mainly to produce petrol, diesel and kerosene but is also used in the production of plastics, synthetic fibres like vinyl, nylon, acrylic and polyesters as well as in lubrication oils, synthetic rubber, fertilizers, asphalt, makeup and pharmaceuticals.

Natural Gas

Australia has large natural gas reserves; the largest in the Asia-Pacific region with production continuing to increase. Currently production is outlasting consumption with new reserves being discovered and more exploration yet to be done. Western Australia has the largest producing basin in the country. Other producing states are Victoria, Northern Territory (serving local usage only) and Central Australia.

Coal Seam Methane (CSM) or otherwise known as Coal Seam Gas (CSG) has increased significantly over the years and has recently received a huge $31 billion dollar investment in 2010. CSG is only produced in New South Wales and Queensland and is becoming an important domestic energy source.

Due to Australia’s location in relation to other countries, conventional gas pipelines cannot be used in the transportation of gas and therefore gas is mostly transported as liquid natural gas.

Liquid Natural Gas

Liquid Natural Gas (LNG) is the fastest growing energy sector and the outlook is for continued growth. Australia is the world’s fifth largest LNG exporter. Japan is the primary importer followed by China, Taiwan, South Korea and India.

According to APPEA:

“Australia is a world leader in LNG innovation. The world’s first coal seam gas-to-LNG projects are being developed in Queensland. Australia also seems likely to become the first country in the world to host a floating LNG project.”
Australia currently has two LNG productions; one is the North West Shelf Venture (NWSV) and the other is the Darwin-LNG. New projects are being constructed in Queensland and in Western Australia.

LNG can be used as transportation fuel for heavy vehicles like trucks otherwise it is normally warmed to make natural gas to be used in electricity generation and in heating and cooking as well as in other industrial uses.

Nuclear Energy

Currently Australia has no nuclear power facilities although it is the world’s second largest producer of uranium – only Canada mines more. Australia has approximately 23-27% of the world’s uranium deposits. Both Queensland and Tasmania have banned nuclear power development in their states. To date, no plans for nuclear power plants are being developed in any of the other states.

According to the World Nuclear Association:

“The value of Australia's uranium oxide concentrate exports has been rising steadily and in 2008-09 they reached a value of over A$ 1 billion.”
The largest importers of Australian mined uranium are Europe, Japan and America but other countries import smaller quantities as well.

Uranium is mined in the Northern Territory and South Australia with future developments planned for Western Australia and Queensland.


Australia has a rich haven of resources in the oil, gas and energy industries. With a stable and growing economy, regulatory practices and community and environmental conscientiousness, Australia offers fantastic investment opportunities for foreign investors.

While oil production is in a slow decline there are, however, unexplored plains that could very well produce more exploitation options. The gas industry is experiencing an exponentially fast growth pattern. The future of Australia’s gas industry is set to shine.

Visit our Oil, Gas and Energy page for more information about the Oil and Gas industry.

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