The industry's growth will be based on higher prices and soaring gas output
Melbourne, Australia (PRWEB) May 18, 2012
Australia's oil production is wavering but gas output, including coal seam methane, is growing strongly. The Oil and Gas Production industry's revenue is expected to grow at an annualised 2.7% over the five years through 2011-12, to reach $38.8 billion. According to IBISWorld industry analyst Kate Convey, “Industry revenue is forecast to increase 3.8% in 2011-12 as higher prices and increased natural gas output more than offset a fall in crude oil production”. Oil prices are expected to increase strongly in 2011-12 in US and Australian dollars. Revenue gains in 2010-11 and 2011-12 are expected to more than reverse the ground lost over the previous two years, when prices in US and Australian dollars slumped in response to the global financial crisis. The industry’s high levels of output reflect new fields and expanded production at existing fields. Flooding in Queensland in late 2010 and early 2011 had only a limited effect on coal seam methane production in the state, although drilling was disrupted. As a result, the floods are expected to cause some delays in development work for liquefied natural gas facilities based on coal seam methane production in Queensland.
Industry performance is expected to improve dramatically over the next five years in response to rising production (especially of natural gas) and higher prices for oil and gas. The number of operating export oriented liquefied natural gas projects is expected to increase, as is industry revenue over the next five years. Profit is expected to expand as rising output offsets continued cost pressures. Convey adds, “The industry will also be affected by changes to the Petroleum Resource Rent Tax and the implementation of a carbon tax from 1 July 2012”.
Market share concentration in the Oil and Gas Production industry is moderate. The five largest firms are BHP Billiton, Woodside Petroleum, Shell Energy Holdings Australia, Santos, and ExxonMobil Australia. The industry is the province of large firms, most of which operate across the globe. The large size of the industry's major players and the level of industry concentration indicate the substantial economies of scale available in the industry as well as the large working capital required to sustain operations.
For more information, visit IBISWorld’s Oil and Gas Production report in Australia industry page.
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IBISWorld industry Report Key Topics
Firms in this industry produce crude oil, natural gas or condensate. They may also treat these products on site to produce liquefied or purified forms of oil and gas.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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