Western Australia’s resource sector has again proven to be the engine room of the Australian economy, and the petroleum sector continues to play a key role in this.

For the fourth financial year in a row, WA’s resources sector delivered record sales, totalling $231 billion over the 12 months to 30 June 2022.

Helping underpin the 9.5 per cent improvement over the 2021-22 financial year was Western Australia’s petroleum sector, which boasted gas, condensate and oil production sales valued at $52 billion.

This includes condensate production valued at a record $8.6 billion, while crude oil production hit a seven-year high of $3.6 billion and liquefied natural gas production was valued at a record $38 billion.

It also highlights a major recovery for the petroleum sector following the global COVID-19 pandemic, with its share of total mineral and petroleum sales improving to 22 per cent, which is around pre-pandemic levels.

The recovery has been driven by rising demand outpacing supply as the world emerges from COVID-19 and lockdowns that choked global supply chains.

Further accelerating the rise in energy prices has been conflict in Eastern Europe, driving further supply uncertainty, particularly across the European continent.

Price pressures look likely to continue, especially in the wake of the decision by the OPEC+ group of producers to cut as much as 2 million barrels per day from oil production by November 2022.

Growing supply pressures were partly behind the UK’s decision last month to launch its first oil and gas licensing round since 2019 in a bid to boost domestic supplies.

The UK North Sea was once a powerhouse of global oil and gas production, but output has dwindled from a peak of 4.4 million barrels of oil equivalent per day (boepd) in 1999 to about 1.5 million boepd currently.

What is happening in Europe should act as a warning for Australia, which has enjoyed its own oil and gas production boom over the last decade, mostly driven by the liquefied natural gas export sector.

Development of existing discoveries, such as Carnarvon Energy’s Dorado, Pavo and Roc discoveries in the Bedout sub-basin, will be vital to help address growing supply uncertainty.

It also highlights the need for further exploration to ensure additional supplies are uncovered to meet medium-term demand and enhance Australia’s energy security.

Carnarvon has identified more than 100 prospects across its four permits in the Bedout sub-basin, with the top 20 alone estimated to hold more than 1.5 billion boe in gross mean prospective resources, combined.

This adds to the combined 467 million boe of already discovered 2C gross contingent resources at Dorado, Pavo and Roc.

There is significant potential for the Bedout to help secure near-term and medium-term energy supplies for Australia, while also ensuring the sector remains an important part of the country’s economic engine room.

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