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It estimates Australia's earnings for 2019-20 wil be around $50 billion,and says they are $38 billion for the nine months ending March 31, but after this the fall in oil prices will hit earnings properly and destroy value by up to $20 billion.
EQ said this will have longer term national economic implications.
"At the time of the GFC in 2009 Australia was just starting an LNG development boom. Between 2009 and 2015 the oil and gas industry spent $273 billion on development projects, mostly LNG. This was instrumental in Australia avoiding the worst of the GFC."
At this point all the major projects slated for sanction this year have been deferred, either into next year or with no clear timeline.
Though the federal government has promised $200 billion in stimulus "this time there is no accompanying surge in oil and gas investment and there is unlikely to be until oil prices improve," EQ said.
Separately yesterday the International Energy Agency's April oil market report found that "global capital expenditure by exploration and production companies in 2020 is forecast to drop by about 32% versus 2019 to $335 billion, the lowest level for 13 years".
Most of Australia's LNG contracts are oil-linked with an average price slope of 12% and a three month lag, meaning the steep price fall that began in early March after OPEC and Russia removed all production cuts as oil demand began contracting thanks to COVID-19 restrictions won't truly bite for some months yet.
Woodside Petroleum, which released its quarterly results this morning, is yet to record serious revenue falls, though has already seen a steep fall in the price of condensate.
The IEA suggested "Black April" will be the worst month for oil demand in history.
In the shorter term Australia's projects will survive, if not thrive as many of the major exporters have breakeven prices between US$25/bbl-$32/bbl, around where Brent has been trading.
"Australian projects can continue to operate at current low oil prices. At a JCC of US$30/bbl, the LNG price would be US$3.60/MMBtu at a slope of 12%. Australian projects have been selling spot cargoes at these prices and lower," the Adelaide consultancy said this morning.
"The long-term problem is not being able to afford the gas field development necessary to keep LNG plants full."
The fields which feed the five-train, six-party North West Shelf development are set to begin decline soon and development of the three Browse fields for backfill has been pushed back to an unknown date by operator Woodside.
Fellow Oz major Santos today signed a letter of intent to farm down a stake of Barossa fields to JERA, but sanction for the Timor Sea fields designated as backfill for Darwin LNG has also been pushed back to an unknown date.
The Bayu-Undan field that feeds DLNG will soon be depleted.
However for now Australia's production is soaring, with "significantly" more cargoes sent through March than in February with the total on an annualised basis equating to over 80 million tonnes per annum, or 6.8MMt in the month.
It estimates that Australian LNG export revenue "increased significantly" in March to $4.88 billion, up on $4.13 billion in February.
As yet force majeur called by two Gorgon LNG offtakers in PetroChina and India's Petronet elsewhere in the world have had "no obvious impact" on the Chevron Corporation-operated LNG plant in Western Australia.
However, globally a rise in LNG spot cargoes, already a problem in the first two months of the year, is leading to "fresh price problems".
"LNG suppliers are flooding the market with excess spot cargoes, generating new price pressures, and pushing LNG prices to unprecedented lows," the report said.
"Given the uncertainty, LNG buyers in North Asia have opted for a "downward quantity tolerance" (DQT) when negotiating their annual delivery program.
"Some buyers are exercising the clause that allows them to cut volumes by up to 10%, leading to more sell tenders and a flood of spot cargoes on the market."
At the same time there could be more Australian cargoes on the market as operators push back scheduled maintenance programs to save costs, thereby avoiding planned shut-ins.