
TY  - JOUR
A1  - Brown, Albert W. 
T1  - ECONOMIC PROSPECTS RELATING TO PETROLEUM EXPLORATION IN AUSTRALIA&#x2014;WITH SPECIAL REFERENCE TO COOPER BASIN EXPERIENCE
JF  - The APPEA Journal
JO  - The APPEA Journal
Y1  - 1971
VL  - 11
IS  - 1
SP  - 49
EP  - 52
KW  - 
UR  - https://doi.org/10.1071/AJ70008 
N2  - Petroleum exploration even in favourable environments is financially hazardous. By Australian standards large investments are required for exploration which, if successful, must be followed by further large investments for field development, production facilities and pipelines.The very nature of exploration demands that high risks be taken. But even after commercial discoveries are made, the financial risks can remain high. Quite often long periods elapse before revenue from a project begins to provide a return on investment. In the Moomba-Gidgealpa fields, a total of $32.8 million was spent on exploration, development and production facilities over a period of about eleven years.The long term perspective requires that the time value of money be considered when investment decisions are taken. Discounted cash flow is generally the technique employed for this purpose. When the investment in the Cooper basin is examined on this basis, the anticipated rate of return is 5% if only the revenue from firm sales of gas to the Adelaide market is considered. The rate of return on the investment in the Cooper basin will be improved by developing additional markets for gas and liquids.Present industry trends are disconcerting, as examination of the footage drilled, drilling rig activity and funds applied for exploration all suggest exploration activities are not increasing. For Australia to maintain a 70% self-sufficiency, annual exploration expenditure will have to be increased from the present level of about $76 million to approximately $180 million.The various government incentives are examined and it is argued that in the national interest, exploration incentives ought to be increased. 
ER  -

