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Chevron ditches plans to drill off Australia's south coast

From Reuters - October 12, 2017

MELBOURNE (Reuters) - U.S. oil major Chevron Corp has abandoned plans to explore the deep water off Australias south coast, long seen as a promising prospect, as weak oil prices are making the work hard to justify, the company said on Friday.

Chevrons move follows a decision by BP Plc a year ago to walk away from the waters known as the Great Australian Bight, which industry consultants Wood Mackenzie have estimated could hold 1.9 billion barrels of oil equivalent.

While the Great Australian Bight is one of Australias most prospective frontier hydrocarbon regions, in the current low oil price environment it was not able to compete for capital in Chevrons global portfolio, Chevron said in a statement.

The decision came a week after Chevron acquired more exploration acreage off Western Australia, where it said it plans to focus its efforts, having already invested billions of dollars in two huge liquefied natural gas projects there.

Australias top oil and gas industry group said Chevrons decision reflected the tough conditions in the oil market which has led oil companies to slash spending. Exploration in the country, both onshore and offshore, has dropped to 30-year lows.

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