[Peakoil-announce] We're running out of oil, says Costello

[Alex P]

THE AGE
http://www.theage.com.au/news/Business/Were-running-out-of-oil-says-
Costello/2005/04/08/1112815725885.html


We're running out of oil, says Costello

By Josh Gordon
Economics correspondent
Canberra
April 9, 2005
Treasurer Peter Costello has delivered a blunt warning that Australia is 
running out of oil as existing fields near the end of their productive 
lives.

In a speech to the Northern Territory Cattlemen's Association, Mr Costello 
said it was little known that Australian exports of fuel had been falling 
for years despite soaring prices.

"The reason why Australia's crude oil exports have fallen over recent years 
- while world demand and prices have increased to record levels and LNG 
exports are booming - is that some of our oilfields are approaching the end 
of their productive lives," he said.

Total production had fallen from about 650,000 barrels a day to less that 
430,000 barrels a day since mid-2002. Some fields - for example the 
Bonaparte field off Western Australia - are now producing only about a 
quarter of 2002 levels.

World oil prices have been driven to record highs, largely by booming 
demand from China and India, but also by tensions in the Middle East and a 
series of supply disruptions.

In Australian-dollar terms, prices have leapt by about a third over the 
past four years.

The Government is hopeful that new projects will cut Australia's reliance 
on imported oil.

Mr Costello said the already completed first stage of the Bayu-Undan 
project, the Exeter/Mutineer oilfield and Enfield project were expected to 
produce around 200,000 barrels of oil a day - still less than the fall in 
production from existing fields since mid-2002.

According to the Australian Petroleum Production and Exploration 
Association, if current trends continue, Australia will be about 78 per 
cent dependent on oil imports in 10 years, compared with the present 30 per 
cent dependence.

The world oil price yesterday was hovering around the $US54 mark, after 
hitting a record $US58.28 earlier in the week, the highest since the 
contract was introduced in 1983. Some analysts now fear prices could rise 
as high as $US100 a barrel. International Monetary Fund senior economist 
Raghuram Rajan said it was possible they could go as high as $US105 a 
barrel.



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