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Australia's oil & gas industry enters an extraordinary new decade



Despite once having a world-renowned pipeline of LNG projects lined up ready for FID over the next couple of years, Australia is now enduring a stagnant period of delayed investment and job cuts due to the COVID-19 pandemic and the plummeting price of oil and gas, globally.  Oil prices have slightly recovered during the month of June, and are expected to increase further as the world begins to utilise greater amounts of energy, especially as it unlocks itself to increased local and international travel, retail and leisure activities, and construction rates.

Australia’s smaller upstream companies are highly threatened by recent market conditions, particularly those with a considerable value of projects in the pipeline.  Larger firms choosing to make FID will likely only have delayed the decision until 2021, which gives hope that the new year will bring with it some great benefits to the local and global economy of Australia, and the global oil and gas markets.

According to EICDatastream, there are 121 Upstream, Midstream and Downstream projects still in the pipeline, at varying stages, and with varying statuses, including those which have been placed on-hold as a result of recent market fluctuations.  These projects are valued at more than $130 billion, and are aimed at starting up over the next 8 years.

Not all these projects will continue to progress, though there is a strong possibility that long-term investment from companies such as Chevron, Woodside and Santos will drive the industry’s recovery, with a combined $65 billion worth of active and potential future projects in Australia.  Close to half of the total offshore and onshore pipeline value is focused in Western Australia, and over two-thirds of projects in the pipeline are predicted to start-up between 2023 and 2025.

As the global oil and gas industry now faces increasingly fierce competition from the power and renewable energy sectors, we are now seeing an energy transition fuelling a drive for further efficiencies within the global energy market.  Emerging technologies, big data and intelligent digital solutions are all critical pieces of the required enterprise transformations which will help form the future of lower-cost, highly efficient oil and gas exploration, production, refining and supply in Australia.

Top projects to watch through 2020 and beyond

The table below shows the largest 10 projects in Australia's Oil & Gas project pipeline, by project value:

Project name Operator Industry sector Start-up year Project value ($m) 
 Browse Upstream Development (Torosa, Brecknock & Calliance fields) Woodside Petroleum  Upstream  2024  15,000 
 Greater Gorgon Gas Project Expansion (Chandon, Geryon) Chevron Upstream  2025  10,000 
 Browse Basin Satellite Fields (WA-314-P and WA-315-P) - Poseidon, Kronos and Boreas discoveries ConocoPhillips  Upstream  2025  10,400 
 Surat Gas Project Arrow Energy  Upstream  2021  7,150 
 Scarborough Gas Field Woodside Petroleum Upstream  2023  5,300 
 Gorgon LNG Train 4 Chevron  Midstream  2023  5,100 
 Greater Sunrise Gas and Condensate Fields (Sunrise, Troubadour, Sunset and Loxton) Timor Gap (East Timor's National Oil Company)  Upstream  2026  5,000 
 Pluto LNG Train 2 Woodside Petroleum  Midstream  2024  5,000 
 West-East Gas Pipeline Government of Australia  Midstream  2024  5,000 
 Wickham Point LNG Train (Darwin LNG) - Second Train Darwin LNG  Midstream  2023  5,000 

The following tables identify 10 key projects to watch in Upstream and Midstream as well as 5 key Downstream projects to watch in Australia's Oil & Gas industry, as selected by Fircroft.




A wealth of contract awards across all sectors

A vast supply chain of EPCs, OEMs and Subcontractors exists within Australia, including 93 Australian direct suppliers, who serve sectors within Oil & Gas.  Operators in Australia also utilise their global positioning and reach to access engineering and professional service providers, and talent from around the world, to help deliver projects to the highest standards.  So far in 2020, there have been 24 significant contract awards on Australia’s Upstream, Midstream and Downstream projects, across the entire lifecycle.  Halliburton were awarded 7 of the 24 contracts, on INPEX’s Ichthys-Brewster Gas & Condensate Development Phase 2 project, for a variety of services including drilling, completions, surface data logging and cementing, up until 2023.  Other major awards include Bechtel’s EPC for Woodside’s Pluto LNG Train 2, and TechnipFMC’s EPC on North West Shelf Venture’s Greater Western Flank Phase 3 project.

Pipelines of oil and gas operators across Australia

There are 67 Operators in Australia with projects at various stages of their lifecycle, within Upstream, Midstream and Downstream.  The focus on this investment is in North and Western Australia. 

The top 5 Operators, based on their total project pipeline, account for 59% of the Australia’s entire spend on active and future potential projects, and 40 of the country’s 121 projects nationally:

Insights into oil & gas employment, jobs and outlook for 2020-2021

In states such as Western Australia and Queensland, the Energy, Mining and Resources workforces have been classified as essential, which means they have been able to continue working under strict health, safety and wellbeing regulations and guidance.  This means Operators, EPCs and Subcontractors must meet new, higher standards of HSE and delivery, which in turn has created a temporary requirement for specialist skillsets.  However, the sector has not escaped unscathed from the early economic fallout of the pandemic.

With the declining price of commodities, and the expectation that the decline will not be temporary, major Oil & Gas companies are now under significant stress, and are having to take unprecedented steps to write down the value of their assets in the hopes of riding out the downturn.  This has caused an immediate effect on FID announcements and the viability of future projects, as we are seeing these target dates being pushed into 2021 and beyond.  As a result, the influx of jobs which were to be expected from 2020 will now no longer be seen until next year at the very earliest.  The talent pools for these jobs will be exceptionally saturated due to higher that usual unemployment rates.  Oil & Gas businesses will find that applications to advertised positions and speculative submissions will rise significantly, meaning robust recruitment processes and candidate management systems will be vital to support the identification, interview and onboarding of top talent - nationally, regionally and globally.

There is also now a reinvigoration of calls to invest in clean energy across Australia and Asia-Pacific, to help meet the 2050 zero emissions target.  Many Oil & Gas Operators are now finding they must join (and in many cases) spearhead the transition to clean energy, through both decarbonisation of their existing assets and future projects, and through the innovation of new renewable energy and clean fuel technologies such as Hydrogen and Carbon Capture. There will be a significant number of newly created roles within these new sectors of the Energy industry, and many professionals within the Oil & Gas industry will now begin to make the transition, alongside the Operators and Supply Chain, through utilising their transferrable skills and experience.

With such a dramatic impact on the economy it is expected that whilst things will start to improve in the coming months, it will take a long time before unemployment and the workforce is back to pre-COVID levels.  Western Australia and Queensland are showing signs of modest recovery at present, though each state will have varied timelines for the lifting of COVID restrictions, reopening of businesses, travel borders, and eventual recovery and growth of markets.  Further job losses have been stopped for now, as Australia’s government has extended support measures until March 2021.  This move is expected to have saved the country from further economic decline, and gives workers some level of security until projects begin to receive FID and progress once again.  The news of Shell’s Crux field development plan being given approval in early August 2020 gives confidence that a few more significant developments and awards will come from early in Q3 2020, giving rise to jobs and investment throughout the industry and its supply chain.

Economic outlook & the future of Australia's oil & gas industry

It has been calculated by PwC that COVID-19 will cost the Australian economy $279 billion in national income, and they have forecast that taking no further action could cost the country a further $127 billion.  Companies throughout Australia’s Resources industries are now caught in the middle of a national deliberation - one which many governments around the world will have to answer at some point in future - how the government’s National COVID Coordinated Commission’s (NCCC) should approach rebuilding the economy in a sustainable, systematic and successful way.

The recent reinvigoration of calls to invest in clean energy and decarbonisation, to ensure the country meets its 2050 zero emissions target, is causing controversy with some industry and economic experts as to how this is to be achieved during and after a global pandemic.  According to a report by Beyond Zero Emissions, Australia could create more than 350,000 jobs over the next 5 years, by eliminating its emissions, through investing in key sectors such as Renewable Energy, Clean Buildings, Clean Transport and Manufacturing.  With more than 800,000 jobs lost since the start of the pandemic, and further still expected, these jobs would be a huge boost for Australia’s people, environment and economy. 

Businesses of all kinds must be open to investing in emerging technology in order to transform their organisation, streamline their operations, and deliver cost savings where possible to retain profitability.  Oil & Gas sectors are no exception.  Although the industry has been continuously developing its technologies used over the last few decades, the application of automation, AI and digitalisation is still in its infancy for many Operators, EPCs and Subcontractors, and so those who adopt and utilise these technologies most effectively will be most likely to recover most spectacularly from the pandemic and economic crisis. 

Work with Fircroft's specialist Australia team

Fircroft's specialist recruitment and workforce solutions team are in prime position to secure engineering and technical jobs on major oil & gas projects across Australia. Read more about our services in the region.

Recent Comments
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Sunil David Anand, 12 August 2020
I hope the opportunity in the Oil and Gas sector increase at post pandemic time for Australians, specialilly for the expertise for jobless people above the age of sixties.
Akhter Ali, 13 August 2020
Great update
Debasis Panda , 13 August 2020
Good article , congratulations I though some of the Australian projects were Deepwater ones.. couldn’t see any . am I wrong ? Thanks Luiz
Luiz maia, 14 August 2020
Planning to imigrate to Australia and this article is good news.
Mohammed Salem Ali, 15 August 2020
Interesting article, good work! Thanks for that
Benz, 18 August 2020
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Australia's oil & gas industry enters an extraordinary new decade - Time to read 9 min
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