Norwegian oil exploration company Equinor has become the third major fossil fuel producer to abandon plans to drill for oil in the Great Australian Bight.
The company said it had concluded that its exploration drilling plan was “not commercially competitive” compared with other exploration opportunities.
In December, Equinor was granted environmental approval to drill 372 kilometres south of the Nullarbor coastline, despite protests from environmentalists.
BP abandoned plans to drill the bight in 2016, with Chevron following suit in 2017.
Equinor, which had planned to drill at a depth of 2.5 kilometres, said it made its decision after a “holistic review of its exploration portfolio”.
ABC News reports Equinor Australia company manager Jone Stangeland said the venture was simply too expensive.
“We have received bids for the drilling rig, the helicopters, the supply base, the cost for these activities is just too high and too expensive to go ahead and drill the well,” he said.
He said the company would “engage with the federal and state authorities regarding our decision to discontinue the exploration program”.
“We hold an exploration permit offshore off Western Australia and will maintain other ongoing interests and activities in Australia,” Mr Stangeland told ABC News.
Last month, the Wilderness Society launched legal action against the national regulator, the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA), after it granted conditional environmental approval to the project.
The environmental approval would have allowed the company to drill 24 hours a day for about 60 days between November and April in either 2020–21 or 2021–22.
Drilling in the bight has been fiercely opposed by environmental groups concerned about the threat of a catastrophic oil spill, and both Greenpeace and the Wilderness Society have welcomed the development.
“It’s been obvious for a long time now that the people of Australia are very concerned about proposals for deep-sea drilling in the bight,” Wilderness Society director Peter Owen said.
“This is fantastic, it’s great to see Equinor following the responsible lead of BP, Chevron and withdrawing from proposals to drill in the bight.”
Greenpeace described it as an “incredible win” for “coastal communities, Indigenous traditional owners, surfers, the seafood industry, tourism operators and other local businesses”.
“The only way to protect coastal communities and the Great Australian Bight’s unique marine life is to rule out drilling permanently,” Greenpeace Australia Pacific chief executive officer, David Ritter, said.
Equinor’s own modelling showed that a worse-case scenario oil spill in the Bight would see oil stretching as far as Albany in Western Australia, to Port Macquarie in New South Wales.
Federal Resources Minister Keith Pitt said the company’s decision to withdraw was “disappointing”, but expressed support for future exploration in the bight.
“Equinor has made it clear this was a commercial decision,” he said in a statement.
“I know many will find Equinor’s decision not to proceed 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 Norwegian Government has a 67 per cent majority stake in Equinor, formerly known as Statoil.
The Australian Petroleum Production and Exploration Association said it was not yet clear if another company would take up the mantle.
Australian Greens Party senator Sarah Hanson-Young said South Australians “overwhelmingly did not want this to go ahead”.
The bight is internationally recognised because of its pristine ocean wilderness and as a breeding ground for whales.
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