Capital constraints and project deferrals on Australia's east coast
Two of eastern Australia's biggest upstream players, Santos and Origin Energy, have struggled to balance the financial stretch of developing CSG-LNG projects, service significant debts and maintain credit ratings while oil prices are low and volatile. This has not only forced these companies to change strategy and consider selling upstream assets, but will also delay investment in key Australian east coast domestic gas developments. We have reduced our forecast of production from assets owned by Santos and Origin Energy by over 200 mmcfd by 2020. This raises questions about which sources of gas will be developed to meet forecast demand. It also represents an opportunity for competing and aspiring producers to fill the gap.