Australia is a major petroleum producer and importer, with a number of petroleum companies involved in upstream and downstream operations. Western Australia is the largest contributor to Australia's production of most petroleum products.

Historical context

Kerosene was used extensively in the mid-nineteenth century and early twentieth century as a fuel for lighting homes and streets. With the advent of the motor car, crude oil came into demand as a fuel. By 1911 petrol surpassed kerosene in sales as the fuel for most vehicles.[1][2]: 48 

Between the 1920s and 1950s, the Shell Company of Australia and Vacuum Oil Company Australia Pty Ltd were selling petrol through single-brand service stations while Golden Fleece, Independent Oil Industry and Commonwealth Oil Refineries Ltd operated through multiple-brand stations.[3] In 1936, Sir William Gaston Walkley founded the Australian Motorists Petrol Company Limited (later Ampol) in response to Australians' concerns about perceived inequitable petrol pricing, and allegations of transfer pricing by foreign oil companies to limit their tax liabilities in Australia.[3]

The first oil discovery in Australia was made near Lakes Entrance, Victoria in 1924.[4] The West Australian Petroleum Pty Ltd (WAPET) joint venture discovered Australia's first flowing oil in November 1953, at Rough Range on the North West Cape.[5] WAPET later discovered in 1964 the first commercial natural gas field in Western Australia, at Dongara in the Perth Basin.[6]

In 1998, the federal government discontinued fuel price regulation in 1998. However, the Victorian and Western Australian state governments passed their own price control legislations in 2000.[7]

Upstream

Upstream activities typically include the exploration and appraisal, development and construction, and production of oil and gas. The sector in Australia is dominated by international companies including Apache, BHP, Chevron, ConocoPhillips, ExxonMobil, Santos, Shell and Woodside. Out of these, Apache, ConocoPhillips, Chevron and ExxonMobil have parent companies in the US, while BP and Shell have parent companies in Europe.[8] Santos and Woodside are based in Australia and are listed on the Australian Securities Exchange (ASX).

Most onshore and offshore production licences are also issued to multiple parties such as joint ventures. For example, the North West Shelf Venture comprises BHP, BP, Chevron, Shell, Woodside Petroleum and a 50:50 joint venture between Mitsubishi and Mitsui & Co, with each holding an equal one-sixth shareholding.[8][9]

According to a 2009 report by the Australian Government's Productivity Commission, joint ventures are important in the petroleum industry, as they "facilitate risk sharing, and allow businesses to specialise and still accomplish the maximum development of a given field." Joint ventures also allow "smaller businesses to be involved in production without raising the large quantities of capital required to develop a field alone."[8]

Reserves

Over 80 per cent of Australia’s gas reserves and over 95 per cent of oil reserves are offshore, with reserves concentrated in the Bonaparte, Browse, Carnarvon and Gippsland basins.[8]

Downstream

After upstream activities, petroleum products are sold to downstream customers, such as oil refineries, gas retailers, and overseas markets.[8]

Refineries

Treated crude oil cannot be used as fuel but must be refined.[8]

Until the 2000s, there were seven oil refineries:[10]

Refinery Location Owner Capacity (ML pa) (as of 2007)
Kwinana Oil Refinery Perth, WA BP 7960
Kurnell Refinery Sydney, NSW Caltex Australia (now known as Ampol) 7540
Geelong Oil Refinery Geelong, Vic Shell Australia (later sold to Viva Energy) 6380
Lytton Oil Refinery Brisbane, Qld Caltex Australia (now known as Ampol) 6270
Bulwer Island Refinery Brisbane, Qld BP 5110
Clyde Refinery Sydney, NSW Shell Australia 4930
Altona Refinery Melbourne, Vic ExxonMobil Australia 4530

There was also an eighth refinery, the Port Stanvac Refinery, which was mothballed by ExxonMobil Australia in 2003 and permanently closed in 2009. The main reason for the closure was that it was "one of the smallest refineries in the Asia–Pacific region", and "could not compete against larger regional refineries".[10]

By December 2020, three of the above seven refineries had already closed, with the Altona (ExxonMobil), Geelong (Viva), Kwinana (BP) and Lytton (Ampol) refineries remaining operational.[11] The Kurnell Refinery was closed in 2014 and was converted into a fuel import terminal.[12][13][14]

The Kwinana refinery closed in 2021, while the Altona refinery is in the final stages of closing down as of October 2022, with both refineries also being converted to fuel import terminals.[15][16][17][18] This meant that from 2023, only the Geelong and Lytton refineries remain.

Marketing and distribution

The retail downstream business is dominated by Ampol, which has 1,900 stores across the country as of October 2022.[19] This also includes 540 stations which are co-branded and operated by EG Australia.[20]

Downstream petroleum retail companies
Company Locations Number of locations (as of October 2022) Brands
Ampol Nationwide 1,900[lower-alpha 1][19] Ampol
EG Ampol
BP Nationwide 1,400[21] BP
Viva Energy Nationwide 1,334[lower-alpha 2][23] Shell[lower-alpha 3]
Liberty Oil
Westside
7-Eleven[lower-alpha 4] 561 (as of 2020)[24][25] 7-Eleven
United Petroleum Nationwide 500+[26] United
Astron
Chevron 340[lower-alpha 5] Caltex
Puma (phasing out)
ExxonMobil All states and territories except Tasmania and Northern Territory 229[29] Mobil
Metro Petroleum NSW, Victoria and Queensland[30] 232 (as of 2020)[24] Metro Petroleum
Peregrine South Australian and Victoria 160[31] OTR
  1. ↑ Including 540 EG Ampol co-branded stations.
  2. ↑ Including 710 Coles Express co-branded stations, 284 Liberty stations and about 50 Westside stations.[22]
  3. ↑ Under a trademark license agreement.
  4. ↑ Sells Mobil fuel.
  5. ↑ Including 320 Puma and 20 Caltex stations.[27][28]

References

  1. ↑ "Cootamundra World War II Fuel Depot Site (former No.3 AIFD)". New South Wales State Heritage Register. Department of Planning & Environment. H01943. Retrieved 18 February 2020. Text is licensed by State of New South Wales (Department of Planning and Environment) under CC-BY 4.0 licence.
  2. ↑ Rappoport Pty Ltd (2011). Conservation Management Plan No.3 Inland Aircraft Fuel Depot, Cootamundra NSW (PDF). Retrieved 19 November 2022.
  3. 1 2 Arnold, Ken (2000). History of the Australian petrol companies, Vol.2.
  4. ↑ "History of Petroleum Exploration in Victoria". Department of Primary Industries, Victoria. Archived from the original on 4 October 2007. Retrieved 19 June 2008.
  5. ↑ Murray, Robert (1991). From the Edge of a Timeless Land: A History of the North West Shelf Gas Project. Allen & Unwin, Sydney. ISBN 0-04-442295-4.
  6. ↑ Clements, Kenneth W., Q, Ye., Greig Robert A. (2002). The Great Energy Debate: Energy Costs, Minerals and the future of the Western Australian Economy. University of WA Press. ISBN 1-876268-74-3.{{cite book}}: CS1 maint: multiple names: authors list (link)
  7. ↑ "Caltex Annual Review 2000" (PDF). Caltex Australia. p. 5. Archived from the original (PDF) on 16 May 2006.
  8. 1 2 3 4 5 6 "Review of Regulatory Burden on the Upstream Petroleum (Oil and Gas) Sector - Productivity Commission Research Report" (PDF). Australian Government - Productivity Commission. April 2009. Retrieved 1 November 2022. Text was copied from this source, which is available under a Creative Commons Attribution 4.0 International License.
  9. ↑ "Participants". North West Shelf Gas. Retrieved 1 November 2022.
  10. 1 2 "Downstream Petroleum 2007" (PDF). Australian Institute of Petroleum. 2007. Archived from the original (PDF) on 1 October 2008.
  11. ↑ Laidlaw, Hunter (17 December 2020). "Australian oil refineries and fuel security". Parliament of Australia. Retrieved 14 October 2022.
  12. ↑ Caltex axes hundreds of jobs (ABC News, 26 July 2012)
  13. ↑ Chris Zappone (26 July 2012). "Caltex axes up to 630 jobs with refinery closure". The Age. Retrieved 26 July 2012.
  14. ↑ Kurnell Site Conversion Caltex Retrieved 22/12/2014
  15. ↑ "BP to cease production at Kwinana Refinery and convert to fuel import terminal" (Press release). BP. 30 October 2020. Retrieved 8 March 2021.
  16. ↑ Macmillan, Jade (30 October 2020). "BP shuts down Kwinana refinery with 600 jobs expected to go, Commonwealth says no impact on fuel security]". ABC News.
  17. ↑ "ExxonMobil to Convert Altona Refinery to Import Terminal". ExxonMobil (Press release). Retrieved 13 March 2021.
  18. ↑ "Workers devastated as ExxonMobil closes Melbourne refinery". ABC News. 10 February 2021. Retrieved 10 February 2021.
  19. 1 2 "Frequently asked questions". Ampol. Retrieved 12 October 2022.
  20. ↑ "Who we are". EG Australia. Retrieved 14 October 2022.
  21. ↑ "Selling". BP Australia. Retrieved 14 October 2022.
  22. ↑ "Contact Us". Liberty Oil. Retrieved 14 October 2022.
  23. ↑ "Fuel Finder". Viva Energy. Retrieved 14 October 2022.
  24. 1 2 "7-Eleven Stores Pty Limited — Application for Interim and Final Authorisation" (PDF). Australian Competition and Consumer Commission. King & Wood Mallesons. 24 March 2021. p. 26. Retrieved 1 November 2022.
  25. ↑ "ExxonMobil sells 295 service stations to 7-Eleven". Australian Financial Review. 27 May 2010. Retrieved 14 October 2022.
  26. ↑ "United". United Petroleum. Retrieved 14 October 2022.
  27. ↑ "Company Profile". Puma Energy Australia. Retrieved 14 October 2022.
  28. ↑ "Find a station". Caltex. Retrieved 14 October 2022.
  29. ↑ "Find a petrol station near you". Mobil Australia. Retrieved 14 October 2022.
  30. ↑ "Our Company". Metro Petroleum. Retrieved 1 November 2022.
  31. ↑ "OTR Locations - Find your nearest store". OTR. Retrieved 14 October 2022.


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