CHART 3.4 GLOBAL AVERAGE BENCHMARK LNG PRICES AND QUEENSLAND PETROLEUM EXPLORATION SPEND 2002-25 Source: FRED; OCE; ABS 8412.0 Note: Petroleum exploration expenditure includes appraisal activities but excludes developmental and production activities.
30
800
700
25
600
20
500
15
400
300
10
200
5
100
0
0
Asia LNG price ($US/MMbtu) (LHS)
Queensland petroleum exploration (A$m) (RHS)
In 2024-25, Queensland petroleum exploration expenditure declined by 12%, reversing the growth seen in the previous year. This came despite a rise in global LNG benchmark prices and domestic gas spot prices, which look to be stabilising after the volatility of the early 2020’s years. The softer exploration response suggests that factors beyond pricing continue to weigh on investment decisions. In addition, elevated exploration costs mean that expenditure levels may understate the degree of caution shown by investors in committing to new activity. While attractive prices and ready access to a gas market ordinarily support exploration, investors appear cautious about committing capital in the current environment. Notably, Australia’s recent domestic gas price cap of AU$12 per gigajoule (around US$7.9 per MMBtu), which is well below global spot benchmarks, highlights how policy interventions can shape market conditions and undermine local investment signals. Anticipated domestic gas supply shortfalls and policy discussions around energy security may provide future impetus, but in 2024-25 these signals were not enough to offset broader concerns. As a result, Queensland’s petroleum exploration activity remains subdued compared to historic peaks, even as LNG maintains a crucial role in export markets and gas in the state’s energy mix.
EXPLORATION SCORECARD 2025
15
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