PERTH (miningweekly.com) – Oil major BP will not progress to exploration in the Great Australian Bight, offshore South Australia, following a review of the company’s upstream strategy.

BP said in a statement on Tuesday that the Great Australian Bight project would not be able to compete for capital investment with other upstream opportunities in the company’s global portfolio, in the foreseeable future.

“We have looked long and hard at our exploration plans for the Great Australian Bight but, in the current external environment, we will only pursue frontier exploration opportunities if they are competitive and aligned to our strategic goals. After extensive and careful consideration, this has proven not to be the case for our project to explore in the Bight,” said BP MD for exploration and production in Australia Claire Fitzpatrick.

“This decision isn’t a result of a change in our view of the prospectivity of the region, nor of the ongoing regulatory process run by the independent regulator the National Offshore Petroleum Safety and Environmental Management Authority (Nopsema). It is an outcome of our strategy and the relative competitiveness of this project in our portfolio.”

Fitzpatrick said BP had informed federal and state governments of its decision.

“This decision has been incredibly difficult and we acknowledge it will be felt across the South Australia region. We have made significant progress with preparations for drilling in the Bight with the support of communities and federal, state and local governments. We acknowledge our commitments and obligations and our priority now is to work with government and community stakeholders to identify alternative ways of honouring these.”

The Australian Petroleum Production and Exploration Association (Appea) said that the decision by BP not to proceed with exploration drilling was a disappointment to South Australians, who could have benefited from the economic activity the project promised.

“The international environment for the oil and gas industry is challenging and companies are regularly reviewing their investment plans,” said Appea director for South Australia Matthew Doman.

“BP’s decision is a stark reminder that global investment in Australian resource projects cannot be taken for granted.

“But the resource potential of the Great Australian Bight remains significant and the economic and energy benefits of developing those resources will be substantial.”

Doman said that success in the Bight would ease Australia’s reliance on imported oil and deliver South Australia much-needed new investment and jobs.

The Australian Greens party has called for the introduction of legislation to protect the Great Australian Bight Marine National Park from companies wishing to drill for oil and gas.

The political party has also called for Nopsema to delay in making a decision around BP’s latest application for a licence to drill in the Bight.

Several other companies, including Chevron, Murphy Oil and Santos, are proposing exploration in the Bight.

Doman stressed that any industry activity in the Bight would only proceed under the highest environmental standards, and only after appropriate community consultation and intense scrutiny by Nopsema.

“With proper regulatory oversight, there is no reason a safe, sustainable offshore petroleum industry should not be possible for South Australia, as it has been in Victoria and Western Australia for several decades,” he said.

“The oil and gas industry recognises that activist scare campaigns have fuelled concern about exploration activity in the Bight.

“It is important that public discussion about the industry remains anchored in information that is factual, complete and relevant to the environment where the activity will take place. We will continue to work with local stakeholders and the wider community to address their questions and concerns.”