Equinor Abandons $200 Million Plan Citing Lack of Commercial Viability
Norweigan oil company Equinor has announced it will abandon its controversial plan to drill for oil in the Great Australian Bight, stating that the plan didn’t make sense commercially.
In late 2019, Equinor was given formal environmental approval to drill 372 kilometers off the Nullarbor coastline, but has now given up on the plan. The Norweigan government is a majority stakeholder of the company, with a 67% share.
Jone Stangeland, Equinor’s country manager has released a statement stating that “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.”
Equinor’s exit from the Bight mirrors that of BP and Chevron who each abandoned plans to drill for oil in the Great Australian Bight in 2016 and 2017 respectively.
“We have received bids for the drilling rig, the helicopters, the supply base- the cost for these activities is too high and too expensive to go ahead and drill the well,” Stangeland added.
According to The Guardian, “Equinor’s announcement comes shortly after the proposed Stromlo-1 well site, in water more than 2.2km deep and nearly 400km off the South Australian coast, was granted environmental approval by the federal offshore petroleum regulator. The Wilderness Society launched legal action challenging the decision last month, arguing opponents had not been properly consulted.”
Stangeland said in his statement that “the approval of the Stromlo-1 exploration well Environmental 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.”
South Australian director for the Wilderness Society, Peter Owen was pleased to hear of Equinor’s plan to “responsibly withdraw” the project.
“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,” he said.
Federal Resources Minister, Keith Pitt has signalled his disappointment over Equinor’s decision, expressing his support for future projects. “Equinor has made it clear this was a commercial decision,” he said, adding that “I know many will find Equinor’s decision not to process with this oil exploration project in the Great Australian Bight extremely disappointing, and it is particularly hard for South Australia.”
“The Liberals and Nationals Government remains committed to encouraging the safe development of Australia’s offshore petroleum resources… The Bight Basin remains one of Australia’s frontier basins and any proposals for new oil and gas fields in this area will assessed fairly and independently,” Pitt concluded.
Stangeland said that the company “will engage with federal and state authorities regarding our decision to discontinue the exploration programme. We hold an exploration permit offshore Western Australia and will maintain ongoing interests and activities in Australia,” he concluded.