BP, Chevron agree to pay $60m after dumping Bight drilling plans
BP and Chevron may have dumped their plans to search for resources in the Great Australian Bight but they’re still going to have to pour millions of dollars into the state.
SA News
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BP and Chevron have agreed to spend almost $60 million exploring for oil and gas in South Australia as a penalty for pulling out of plans to drill in the Great Australian Bight.
Federal Resources Minister Matt Canavan will today announce that the companies have agreed to spend $116.5 million nationally on exploration to make good on a Good Standing Agreement with the Federal Government. At least half of that money must be spent in SA.
BP and Chevron separately backed out of plans to drill for oil and gas in The Bight in 2016 and 2017 respectively, with the plans worth up to $1.4 billion and $500 million.
BP’s joint venture partner, Equinor, has since remained committed to its plans to drill at least one well in The Bight.
But under the exploration agreements with the Federal Government, the other two must make amends for their failure to follow through with their proposed exploration plans.
Mr Canavan said the new commitments were a good outcome.
“BP and Chevron ceased their programs of exploration in the Great Australian Bight in 2017 and 2018 respectively,’’ he said.
“Australia’s offshore oil and gas policy ensures that companies which commit to a program of exploration deliver on that commitment under the Government’s Good Standing Agreement policy.
In rare cases where commitments are not met, companies are encouraged to redirect exploration investment within Australia.
“This is an important policy that maintains the exploration investment pipeline in Australia, supporting new petroleum discoveries and our future energy security and I welcome these commitments from BP and Chevron.”
There are no details as yet about where the exploration funds earmarked for SA will be spent.
State Energy Minister Dan van Holst Pellekaan said it was pleasing that the Federal Government had heard his request for the Good Standing funds to be directed towards SA.
“It is excellent news for the South Australian resources sector that almost $60 million will be invested in our state as a result of the Good Standing Agreement,” Minister van Holst Pellekaan said.
“This investment will help tap the immense promise of South Australia’s resources sector driving job creation, investment and royalties in South Australia.’’
Opposition energy spokesman Tom Koutsantonis has previously called for the funds to be spent here, amid fears the money would be redirected towards projects in other states.
Both companies now have three years to deliver on their investments, with BP set to invest $40.6 million by October 2022 and Chevron $75.9 million by September 2022.
