Australia's exploration decline: a structural shift we're not talking about enough

For nearly 30 years I've watched exploration rise and fall with the oil price. It was predictable: price up, exploration up; price down, exploration down.

Today, that relationship is breaking.

Higher prices no longer bring optimism. Sentiment feels heavier, and activity isn't responding the way it used to. So I dug into the data (inflation-adjusted exploration spend, historic oil price and exploration intensity over time), and the results were hard to ignore.

Australian petroleum exploration spend (AU$M, nominal: total, onshore and offshore) and oil price (US$, inflation adjusted to 2024 dollars), 1974–2024. Sources: APPEA; World Bank; US Bureau of Labor Statistics. Open full size

Exploration spend is at multi-decade lows

Offshore activity, once booming during the LNG megaproject era, collapsed after 2015 and has barely recovered. Onshore exploration is steadier, but dominated by appraisal and development rather than genuine frontier drilling.

Exploration intensity tells the same story

Exploration intensity fell back to 1970s levels in 2022 and remains far below the 1980s boom and dramatically below the LNG era. Even when oil prices surged, intensity stayed flat. Australia simply isn't responding to price signals anymore.

Exploration intensity: Australian petroleum exploration expenditure (AU$M) per US$ per barrel, inflation adjusted, 1975–2025. Open full size

Why?

The drivers look structural:

basin maturity
tougher regulatory pathways
capital shifting to shorter-cycle jurisdictions
LNG overbuild
energy-transition uncertainty
restrictions on unconventional gas

Together, they point to a long-term reset, not a temporary dip.

From discovery to optimisation

Across all the datasets, the conclusion is clear: Australia's exploration decline is structural. Offshore exploration is effectively over. Onshore is incremental. Spend no longer aligns with the oil price. The sector has quietly shifted from discovery to optimisation, with real implications for future supply, LNG competitiveness and energy security.

Australia's upstream industry has entered a new era: less exploration, more stewardship, and a tougher path ahead without regulatory and policy clarity.

For the full analysis, including sources, see my PESA Gazette article, Australia's exploration disconnect.

Your take

Has Australia accepted declining exploration as the "new normal", or is there still a realistic path to revival?