The latest Western Australia Resources and Economics Report shows that exploration spending in the West Australian oil and gas sector dropped markedly in the September quarter. The report, compiled by the West Australian Chamber of Minerals and Energy and accounting firm KPMG, says that: "The decline in total exploration spend is driven by the decrease in petroleum exploration which fell by 10.6 per cent from the previous June quarter to A$752 million [US$671 million]." It found capital expenditure on exploration projects in the West Australian mining and oil and gas sectors fell for most of 2013 as the construction phase moved to production, with gas being a case in point. This marked decline in spending has come at a time when cost overruns continue to dog the offshore sector, and therefore it is not surprising to see a mix of optimism and caution creep into industry reports. For example, a new research report Challenging Climates: The Outlook for the Oil and Gas Industry in 2014, published by DNV GL, gives a positive outlook for the industry in 2014 but forecasts tighter monitoring of capital expenditure this year.
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