Australia Oil and Gas Market Size, Share, Industry Analysis, Outlook Report 2034

Australia Oil and Gas Market Outlook

The Australia oil and gas market size which reached a volume of 157.61 thousand barrels in 2024, is projected to grow at a compound annual growth rate (CAGR) of 1.3% from 2025 to 2034, reaching a volume of 177.74 thousand barrels by 2034. This gradual growth is driven by steady demand for energy resources, both domestically and internationally, as well as technological advancements in the oil and gas extraction and transportation processes. Despite the global shift towards renewable energy sources, oil and gas continue to be integral components of Australia's energy landscape.

Australia is a major exporter of liquefied natural gas (LNG), with a substantial presence in the global market, particularly in Asia. The domestic market benefits from these exports, as oil and gas remain crucial to meeting Australia's energy needs. The development of new oil and gas fields, coupled with advances in extraction technologies, is expected to support long-term growth in the market.

In the coming years, the market is likely to be influenced by factors such as environmental regulations, fluctuating global oil prices, and the transition to cleaner energy. However, with strong domestic consumption and the ongoing importance of oil and gas for various industries, the Australian oil and gas market is set to continue its steady growth trajectory.

Australia Oil and Gas Market Trends

Several key trends are shaping the Australian oil and gas market, driven by technological advancements, evolving consumer preferences, and policy changes.

Transition to Cleaner Energy: While oil and gas remain dominant in the Australian energy mix, there is a growing emphasis on transitioning to cleaner energy sources. This trend is influenced by both environmental concerns and global pressure to reduce carbon emissions. Although oil and gas will continue to play a critical role in Australia's energy supply, there is increasing investment in cleaner energy technologies, such as natural gas, which is seen as a "bridge fuel" to renewable energy.
Technological Advancements in Extraction and Transportation: Advances in drilling technology, particularly hydraulic fracturing (fracking) and horizontal drilling, have revolutionized oil and gas extraction, allowing for increased production from both conventional and unconventional sources. Additionally, innovations in transportation infrastructure, such as pipeline expansions and LNG export terminals, are enhancing Australia's ability to meet domestic and international demand more efficiently.
Focus on Energy Security: Australia is increasingly focusing on energy security, particularly in light of global geopolitical tensions and the ongoing transition to renewable energy. To ensure a stable energy supply, the government is supporting investments in domestic oil and gas production and infrastructure, while also encouraging the diversification of energy sources. Energy security initiatives are likely to be a significant driver of growth in the market.

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Australia Oil and Gas Market Growth

The Australian oil and gas market is set to experience modest growth, underpinned by both domestic demand and international exports.

Steady Domestic Demand: Despite the ongoing transition to cleaner energy sources, demand for oil and gas remains robust in Australia. The residential, commercial, and industrial sectors continue to rely on oil and gas for heating, electricity generation, and transportation. With a growing population and expanding urbanization, the demand for energy will continue to support market growth in the long term.
International LNG Exports: Australia has become one of the world’s largest exporters of LNG, with growing demand from countries like China, Japan, and South Korea. LNG exports are expected to remain a key driver of the oil and gas market’s growth, as Asia continues to shift from coal to natural gas for power generation. Australia’s position as a global LNG supplier is likely to strengthen further, contributing to overall market expansion.
Development of New Oil and Gas Fields: New exploration projects, both onshore and offshore, are expected to bolster Australia’s oil and gas production capacity. These projects are essential for meeting future energy demand, both domestically and internationally. The discovery of new oil and gas fields and the development of existing fields will support continued growth in production levels and market volumes.
Increased Government Support for Oil and Gas Infrastructure: The Australian government has been actively supporting the development of energy infrastructure, including pipelines, refineries, and LNG terminals, to boost the domestic oil and gas sector. These investments in infrastructure are essential for ensuring a stable energy supply and improving the efficiency of the oil and gas supply chain, thus driving market growth.
Focus on Diversification: The oil and gas market is increasingly diversifying to include renewable energy solutions, such as biofuels and green hydrogen, alongside traditional oil and gas production. This diversification strategy helps oil and gas companies adapt to changing consumer preferences and regulations, ensuring long-term sustainability and market resilience.

Market Segmentation

The Australian oil and gas market can be segmented based on type, drilling type, application, and region. These segments provide insight into the specific areas driving demand and market dynamics.

Breakup by Type
- Upstream: The upstream segment involves the exploration, drilling, and production of oil and gas. This segment is crucial to the overall market as it supplies raw materials for the downstream and midstream sectors. Investments in offshore and onshore drilling projects are expected to increase in the coming years, driving growth in the upstream segment.
- Midstream: The midstream sector involves the transportation, storage, and distribution of oil and gas. The development of new pipelines, LNG terminals, and storage facilities is key to supporting the growing demand for oil and gas in both domestic and international markets. The midstream sector will play a critical role in ensuring the smooth distribution of oil and gas products.
- Downstream: The downstream segment focuses on refining and processing oil and gas products into finished products such as gasoline, diesel, and petrochemicals. Although the downstream segment faces increasing competition from renewable energy sources, it remains essential to Australia’s oil and gas infrastructure. Refining capacity in Australia will continue to support demand for oil products, especially in the transportation sector.
Breakup by Drilling Type
- Onshore: Onshore drilling remains the dominant method of oil and gas extraction in Australia, particularly in regions like the Cooper Basin and the Surat Basin. Onshore drilling is less expensive and more accessible than offshore drilling, making it a preferred method for many oil and gas producers.
- Offshore: Offshore drilling, particularly in the Bass Strait and the northwest shelf, is becoming increasingly important as Australia seeks to tap into untapped reserves. Offshore fields have vast potential, and the development of offshore drilling operations is expected to support growth in the oil and gas market.
Breakup by Application
- Institutions: Institutions such as universities, research centers, and government agencies are significant consumers of energy, contributing to demand for oil and gas. These institutions rely on energy for heating, electricity, and other operational needs, making them a key part of the market.
- Residential: The residential sector continues to drive demand for oil and gas, particularly for heating, cooking, and transportation. With Australia’s growing population, the demand for residential energy is expected to remain strong.
- Commercial: The commercial sector, including businesses, retail establishments, and industries, is another significant consumer of oil and gas. Commercial buildings require energy for heating, cooling, and operations, and the demand for oil and gas in this sector is expected to rise as economic activity increases.
- Others: Other sectors, including agriculture, transportation, and manufacturing, also contribute to the demand for oil and gas. These industries rely on energy to power machinery, vehicles, and equipment, supporting the overall growth of the market.
Breakup by Region
- New South Wales: New South Wales, particularly Sydney, remains a key region for the oil and gas market. As a major economic and industrial hub, the region contributes significantly to both domestic demand and energy consumption.
- Victoria: Victoria, home to several oil and gas reserves, is another major contributor to the market. The demand for oil and gas in Victoria is driven by its large industrial base and energy requirements for residential heating and transportation.
- Queensland: Queensland is a major player in the Australian oil and gas market, particularly in terms of natural gas production and export. The region is home to significant LNG export facilities, contributing to Australia’s status as one of the world’s largest LNG exporters.
- Australian Capital Territory: The Australian Capital Territory, while smaller in terms of oil and gas production, contributes to demand due to its government institutions and energy consumption requirements.
- Western Australia: Western Australia’s oil and gas sector is booming, with large offshore oil and gas fields off its coast. The state is a key contributor to Australia’s oil and gas production and export capabilities.
- Others: Other regions such as Tasmania and Northern Territory also contribute to the market, with smaller production capacities and energy consumption requirements.

Market Key Players

Several major players dominate the Australian oil and gas market, providing a range of products and services across the upstream, midstream, and downstream sectors.

BP Australia Pty Ltd.: BP is a key player in the Australian oil and gas market, involved in exploration, production, refining, and marketing. BP is also investing in renewable energy sources, aligning with global trends towards sustainability.
Woodside Energy Group Limited: Woodside Energy is one of Australia’s largest independent oil and gas companies, focusing on the exploration, development, and production of oil and gas resources.
Shell Energy Operations Pty Ltd.: Shell is a global leader in the oil and gas industry and has a significant presence in Australia’s energy market. Shell is involved in various segments, including upstream oil and gas exploration, refining, and LNG exports.
Santos Ltd.: Santos is a major Australian oil and gas producer, focused on the exploration, production, and development of oil and gas resources, particularly in the Cooper Basin and offshore fields.
Origin Energy Limited: Origin Energy is one of Australia’s largest integrated energy companies, involved in the exploration and production of oil and gas, as well as electricity and natural gas retailing.
Beach Energy Limited: Beach Energy is a key player in the Australian oil and gas market, focusing on upstream exploration and production, particularly in South Australia and the Cooper Basin.
Cooper Energy Limited: Cooper Energy is an independent Australian oil and gas company focused on exploration and production in offshore and onshore fields.
Chevron Australia Pty Ltd: Chevron is a major global oil and gas company with substantial operations in Australia, particularly in the upstream and LNG sectors.

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