PERTH (miningweekly.com) – Committed investment in Australia’s resources and energy sector has reached a peak, with investments projected to decline over the next five years, the Bureau of Resources and Energy Economics (BREE) said on Wednesday.

In its latest report, the government research unit predicted that resources investment would revert back to 2007 levels from 2017 onward, as major projects were delayed.

For the first time, BREE made a forward projection of the stock of capital expenditures at the committed stage of development, predicting that in 2014, this amount would decrease by A$8-billion and then by a further A$63-billion by 2015.

“While BREE projects a likely decline in the stock of committed project investment, there remain opportunities for Australia to generate a higher level of committed investment,” said BREE executive director and chief economist Professor Quentin Grafton.

“This will only be realised if many of the projects which BREE currently rates as 'possible' are able to progress through to the committed stage over the next five years.”

The number of projects at the committed stage decreased to 73 in April as a result of 21 projects being completed in the period. Of the 73 projects still under construction, 40 are minerals projects, 18 are gas and petroleum projects, and 15 are infrastructure projects.

“High-value projects continue to be the main driver of the record high levels of committed investment in the resources and energy sectors. Mega projects valued at over A$5-billion account for around 80% of the A$268-billion in committed investment,” said Grafton.

“The decline in the number of committed projects reflects the emerging trend for high value projects at the feasibility stage to be delayed or cancelled, while the value of committed investment has remained close to record high levels due to cost increases to several key projects.”

BREE estimated that around A$150-billion of high value projects had been delayed or cancelled since April 2012, while cost increases to committed projects currently accounted for 11% of the stock of committed investment.

Currently, some A$43-billlion of the capital held in the committed stage was scheduled for the completed stage by the end of 2013, with the largest of these projects being Citic Pacific’s Sino iron project, Rio Tinto’s Cape Lambert expansion, and Woodside’s North West Shelf Venture North Rankin B offshore facility.

Potentially offsetting this expected decrease in committed investment is A$31-billion of projects which had a final investment decision scheduled for 2013, and were assessed as “likely” to progress.