SPE APOGCE conference preview – Regulatory Challenges and Opportunities for Optimising Petroleum Resource Stewardship in Offshore Australia
November 17 @ 8:00 am - November 19 @ 5:00 pm
|Paper Title||:||Regulatory Challenges and Opportunities for Optimising Petroleum Resource Stewardship in Offshore Australia|
|Author Block||:||J. Miranda, National Offshore Petroleum Tiles Administrator; R. Hamp, PRM Pty. Ltd.; E. Cocodia and N. Filbay, National Offshore Petroleum Tiles Administrator|
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The challenges and insights presented in this paper provide a unique case study of Australia’s evolving offshore petroleum industry from a regulatory lens. It documents how a regulating agency’s unique perspective can identify opportunities to optimise recovery, contribute towards improvements in good oil practice and ultimately adapt to the changing requirements of industry.
This paper sets out the regulatory landscape, as well as the challenges that exist in managing an innovative, adaptive and evolving offshore petroleum industry. The nature of petroleum development activities in offshore waters have matured significantly in the last 50 years (Table 1), contributing to Australia becoming the world biggest LNG exporter for periods during 2018 and 2019. Consequently, it has been argued that due to this shift towards more mature production, the objectives for effective resource management and stewardship should be reconsidered. For example, as offshore basins mature (i.e. discoveries are made, infrastructure is built, and production ramps up) different drivers for development will evolve which will impact resource stewardship considerations.
This challenges regulators to be increasingly responsive, adaptive, continuously improve practices and be well-informed regarding global trends, such as those affecting mature provinces. Opportunities to exchange ideas, collaborate and incorporate key learnings from other offshore regulatory regimes are considered key enablers towards achieving these goals.
Australia’s mature petroleum areas are impacted by long distances, (relatively) low infrastructure densities and greater water depths; whilst increasingly challenged to integrate smaller, more complex and economically marginal resources. Emerging/recently established production areas are also affected by a changing infrastructure landscape with multiple potential development pathways. In contrast to traditional “title-by-title” approaches (particularly with respect to the use of existing infrastructure), effective resource stewardship requires an increased level of consideration for optimising “area” or “regional” development opportunities. A more responsive and adaptive approach, which fosters collaboration and effective dialogue between the regulator and industry, improves regional understanding and contributes toward optimum resource recovery (via lower life-cycle costs and accelerated production opportunities).
Table 1: Comparison between Australia’s offshore petroleum development characteristics in 1969 (first significant production) and 2020 (current).
|Regulatory Regime||· Petroleum (Submerged Lands) Act 1967 (PSLA) (implementation of)||· Offshore Petroleum and Greenhouse Gas Storage Act 2006 (OPGGSA)|
|Production focus||· Oil
· Gas into nascent (eastern) domestic infrastructure (e.g. pipelines)
|· LNG (and condensate) export
· Domestic gas
|Development priorities||· Greenfield construction
· Vertically integrated developments (upstream and downstream alignment)
· Minimal third-party access considerations
|· Brownfield construction (tiebacks, re-use of existing pipelines, facilities, etc.)
· Predominantly vertically integrated developments
· Third-party access considerations
· Limited shared infrastructure
|Basin (development) characteristics||· Immature basins in the southeast (Gippsland Basin) and the northwest (Northern Carnarvon Basin)||· Mature basins in the southeast (Gippsland Basin) and the northwest (Northern Carnarvon Basin)
· Immature basins in the north (Browse Basin, Bedout sub-basin and northeastern Bonaparte Basin)
|Market characteristics||· Oil export for international markets and into local refineries
· Isolated eastern and (nascent) western domestic gas markets
|· Well-established, relatively isolated eastern and western domestic gas markets
· Domestic gas pricing increasingly linked to international markets
· Decreased local refining capability