Global oil company scraps Great Australian Bight drill bid
Equinor has scrapped its $200 million plan to drill for oil in the Great Australian Bight, saying the project is not commercially viable.
It is the second time in under five years that plans to drill this particular prospect in The Bight have been ditched, with BP dropping its plan to drill The Bight, in collaboration with Equinor, in 2016.
Norway-based Equinor said the project did not stack up commercially against other drilling projects in its portfolio - the same argument BP used four years earlier.
"Following a holistic review of its exploration portfolio, Equinor has concluded that the project's potential is not commercially competitive compared with other exploration opportunities in the company,'' the company said in a statement.
"The approval of the Stromlo-1 exploration well Environment Plan confirmed our ability to safely operate in The Bight. However, Equinor has decided to discontinue its plans to drill the Stromlo-1 exploration well, as the opportunity is not commercially competitive," said Jone Stangeland, Equinor's country manager for Australia.
Equinor said it had informed federal, South Australian and local authorities about its decision. The company entered the licences in the Ceduna sub-basin as a partner in 2013 and took over as operator with a 100 per cent equity share in 2017.
"We will engage with the federal and state authorities regarding our decision to discontinue the exploration program. We hold an exploration permit offshore Western Australia and will maintain other ongoing interests and activities in Australia," Mr Stangeland said.
The project, which was projected to create $1.7 billion in state and federal taxes each year and create more than 1300 jobs in South Australia during construction, was expected to start drilling as soon as the coming summer.
Drilling would have taken 30-60 days, in waters about 2.5km deep.
Equinor's exploration plans have been the subject of protests across Australia and even internationally, with world champion surfer Mick Fanning leading protest at Bondi Beach in Sydney in November, saying "we have to act before we ruin this country".
The Norwegian company received its most crucial approval in December, when the Federal regulator NOPSEMA signed off on the environmental plan for the drilling.
The project was targeting billions of dollars worth of oil, but was strongly opposed by environmental groups who said that drilling in the deep waters of the Great Australian Bight could never be done safely.
Opposition spokesman Tom Koutsantonis, who is a strong advocate for the oil and gas industry, said there needed to be repercussions for Equinor walking away from the process at this late stage.
He said large international oil companies should not be able to effectively lock up exploration areas for, in this case, more than a decade with no outcome.
"Regardless of whether you support exploration or not the idea that the company can be issued an exploration licence and put opponents and supporters through this level of anxiety and then walk away, without penalty, really dents people's confidence in foreign investment.
"The entire process in issuing licences on should be reviewed or just stopped altogether.
"The regulator NOPSEMA and the Australian government have a lot to answer for.''
The company's environment plan was first submitted in April this year, then resubmitted twice after NOPSEMA asked for changes.
A public consultation process, which the company initiated despite not being required to under law, attracted more than 30,000 submissions.
Australian Petroleum Production and Exploration Association director South Australia Matthew Doman said the decision to pull out was disappointing.
Mr Doman said Equinor's plans were "subject to an extreme campaign of false and exaggerated claims that deliberately overstated the risks and ignored the potential benefits.
"Of course, any exploration and development have to be done in an environmentally safe manner. We have to make sure there's no negative impact on existing industries or coastal communities - and the industry remains committed to that.
"The Great Australian Bight remains an area of high prospectivity for oil and gas development.''
Wilderness Society South Australian Director Peter Owen welcomed the decision after the environmental group last month started a legal challenge in the Federal Court of Australia over Equinor's environmental approval.
"It's been a while coming, but the right decision is the right decision and we have no doubt that the hundreds of thousands of people that have supported the campaign to Fight for the Bight will be both delighted and relieved to hear this news", Mr Owen said.
"Four major oil companies have now left the Bight since the Fight for the Bight began.
"It is clear that drilling the Bight is not a sensible proposition.
"Opening up a new high-risk frontier oil field when we are hurtling towards catastrophic climate change is madness."
Mr Owen called for a permanent ban of drilling in the Bight.
Centre Alliance MPs whose opposition to drilling in the Bight was a key part of their Federal Election campaign also welcomed Equinor's decision.
The Australia Institute SA Director Noah Schultz-Byard said it's time for the State and Federal Governments "to step up" and give the Great Australian Bight World Heritage protection.
"South Australia has been left in limbo, with the threat of drilling in the Great Australian Bight hanging over the state for far too long," he said.
"Establishing the Bight as a World Heritage icon would protect the economic, cultural and environmental interests of South Australia."
Streaky Bay-based former pro surfer and fisherman Heath Joske has been at the forefront of the protests, even speaking at the Equinor AGM and leading a mass paddle out of surfers in the oil company's home country of Norway .
Mr Joske said it was "an incredible feeling" to hear that the company had abandoned plans to drill for oil in the Bight.
"I'm completely overjoyed - there is no other way to describe it," he said.
"Finally, some common sense has prevailed. It's been years of fighting against Equinor coming to drill in the Bight - even longer if you consider BP before that.
"It's the end of summer now, and I'm already thinking about my children going to play at the beach next summer without worrying about this and thinking, 'what if something goes wrong?'."
Mr Joske said he was proud of the surfing community around Australia and the world for the way it banded together to protest the potential drilling.