Australia Country Commercial Guide
Learn about the market conditions, opportunities, regulations, and business conditions in australia, prepared by at U.S. Embassies worldwide by Commerce Department, State Department and other U.S. agencies’ professionals
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Oil and Gas
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Overview

In 2026, the Australian oil and gas industry remains critical to the Australian economy. The Australian oil and gas extraction market contributes approximately US$64 billion (AU$100.3 billion) and generates a record US$14.45 billion in taxes and royalties. The sector continues to provide vital energy security by supporting over 215,000 jobs across the supply chain, many of them in regional areas, and maintaining Australia’s position as a premier global LNG exporter with forecast earnings of US$42.9 billion (2024-25). Australia is a leading producer of oil and natural gas in the Asia-Pacific region with infrastructure heavily concentrated on the West Coast, where most of the nation’s crude oil and condensate are produced. The East Coast of Australia relies on gas sourced from the Bass Strait and Queensland. 

The United States consistently ranks in the top ten markets for Australian imports in the oil and gas sector. Other significant markets that Australia imports from in this sector include South Korea, Malaysia, Singapore, Brunei and Taiwan. The oil and gas sector in Australia is dominated by major international energy companies including Chevron, ExxonMobil, Santos, Woodside Energy and Royal Dutch Shell, as well as prominent domestic firms. These players are involved in exploration, extraction, refining and distribution activities across the country’s vast resource base. 

Australia’s crude oil production has been declining for over a decade due to the depletion of its large conventional reserves. In 2025, Australia’s oil production was approximately 398,000 barrels per day (bpd), down from a peak of 800,000 bpd in the early 2000s. Australia is however increasingly exploring its unconventional gas resources, particularly shale gas in regions like the Beetaloo Basin in the Northern Territory. Exploration activities are ongoing however the commercial development of these reserves remains uncertain due to environmental and regulatory concerns. 

Leading Sub-sectors

The oil and gas industry in Australia is a broad sector with several key subsectors that contribute substantially to the economy. The subsectors are diverse, covering everything from exploration and resource identification to production, refining, and distribution. 

Upstream

The upstream subsector is the foundation of Australia’s oil and gas industry, focusing on the identification, drilling, and production of crude oil and natural gas. This subsector is largely dominated by offshore projects, which remains the primary source of volume, particularly for the LNG export market. Australia’s offshore oil and gas reserves are significant, with the North West Shelf, Browse Basin, Bass Strait, and Carnavon Basin being key production areas. These offshore fields are critical to the country’s oil and gas output, particularly for natural gas and condensate production. 
While offshore provides the volume, onshore regions are the focus of intense exploration and political debate regarding domestic supply and shale potential. Onshore exploration occurs in regions like the Cooper Basin (South Australia/Queensland) and the Beetaloo Basin (Northern Territory), with onshore unconventional oil and gas production (such as shale gas) becoming increasingly important. 

Liquified Natural Gas (LNG) Production has become a powerhouse subsector in recent years, with Australia becoming one of the world’s largest LNG Exporters. Major LNG projects include Gorgon, Wheatstone, and the Northwest Shelf Project, which are located offshore in Western Australia. Companies like Woodside, Chevron, and Santos dominate this space.

Midstream

The midstream subsector is the critical “connective tissue” of the Australian energy industry. It includes the transportation and storage of oil and gas from production sites to refineries, storage facilities, and export terminals. In Australia, the midstream landscape is defined by vast distances and a distinct separation between the highly interconnected East Coast market and the isolated West Coast and Northern Territory systems. Opportunities in this sector include pipeline infrastructure and export facility technologies.

Downstream

The downstream subsector is the final stage of the oil and gas value chain, involving the refining of crude oil and the distribution of refined products to domestic markets and export terminals. It also includes the manufacture of petrochemicals and other refined products. Refining capacity has been declining in Australia due to lower profitability, labor shortages, and competition from international markets. The Australian Government had to step in with the Fuel Security Act (2021) to subsidize and protect the last two remaining refineries (Lytton and Geelong) from closing down. 

As part of Australia’s commitment to reducing carbon emissions and embracing cleaner energy, the integration of renewable energy sources with traditional oil and gas infrastructure is becoming an important subsector. Gas-fired power plants and oil and gas companies are investing in energy storage technologies to stabilize power generation when renewable sources are intermittent. Australia is investing in large-scale carbon capture storage (CCS) projects to capture and store carbon emissions from oil and gas production. The Gorgon CCS project (off the coast of Western Australia) is the largest carbon capture and storage project of its kind in the world, designed to capture and store CO2 produced during LNG production.
As aging oil and gas infrastructure is decommissioned, especially in offshore fields, the decommissioning subsector has grown from an operational afterthought into a massive standalone industry. This involves safely shutting down production facilities and restoring the environment at previous production sites. The regulatory body (NOPSEMA) is strictly enforcing removal timelines, creating an estimated US$39.6 billion backlog of work for waste management, offshore marine contractors, and environmental remediation firms over the coming decades. 

Opportunities

Energy security is a key concern for the Australian federal and state governments. With its substantial resources and growing demand for energy transition technologies, the Australian market presents opportunities for U.S. firms specializing in the following areas:

LNG Export and Infrastructure Development

Australia’s status as a premier global energy supplier makes its LNG infrastructure a high-priority area for U.S. firms. As existing facilities age and new “backfill” projects are required to maintain export volumes, the demand for American innovation is growing. 

Unconventional Oil and Gas Development

While Australia’s conventional reserves mature, the development of unconventional gas—particularly shale—is still in its early stages. This frontier presents highly lucrative opportunities for U.S. companies that have already mastered shale exploration and production domestically. Major exploration hubs like the Beetaloo Basin (Northern Territory) and the Cooper Basin (South Australia/Queensland) are currently the focal points for this expansion. 

Offshore Oil and Gas 

Australia hosts some of the world’s most significant offshore energy provinces. The sheer scale of these operations, combined with the harsh subsea environments, creates a high-barrier-to-entry market where American technical superiority is highly valued.

Energy Transition Technologies

As Australia accelerates its trajectory toward “Net Zero” emissions, the traditional oil and gas sector is undergoing a massive transformation. This shift creates a rapidly growing market for U.S. companies that can bridge the gap between fossil fuel production and clean energy mandates.

Natural Gas Supply for Domestic Market

While Australia exports massive quantities of LNG, its domestic natural gas market requires highly efficient management to ensure a reliable ongoing supply. The vast distances between remote onshore gas basins and major population centers on the East Coast create complex logistical challenges that American energy companies are well-equipped to solve. 

Joint Ventures

The Australian oil and gas landscape is defined by massive, high-capital projects that carry significant financial and operational complexity. Engaging in Joint Ventures (JVs) is the most common and effective route for American companies to gain a foothold in the market, allowing for the sharing of both risk and technical expertise.

Workforce and Skills Development

Australia’s oil and gas sector operates in some of the most remote and harsh environments globally. This geographical reality, combined with a highly competitive labor market, drives an intense need for specialized technical training and advanced automation technologies to ensure safety and operational efficiency. U.S. firms that develop digital platforms, remote sensing technology, and automation systems for monitoring, control, and safety in oil and gas operations can capitalize on Australia’s growing need for innovation in these areas. 

Key Trade Shows

  • EXA | Energy Exchange Australia | Perth | 2-4 March, 2027
  • ADGO | Australian Domestic Gas Outlook | Sydney | 22 March-25 March, 2026
  • AEP | Australian Energy Producers Conference | Brisbane | TBC (likely May 2027)

Resources

  • Australian Energy Producers
  • BP Statistical Review of World Energy
  • International Energy Agency 
  • Geoscience Australia
  • Global Trade Atlas

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