Australian upstream rejects politicians’ call for A$4 gas

Producers insist the costs of producing gas domestically—as well as prevailing spot prices—significantly exceed the historic benchmark price level

The Australian upstream industry is pushing back against the popular notion that currently depressed domestic natural gas prices are here to stay. While prices have collapsed over the past two years, the industry argues the days of cheap gas are gone and expectations that prices will not climb in line with the international market are unrealistic. The Australian Petroleum Production and Exploration Association (Appea) has pointed to an International Gas Union (IGU) survey of wholesale gas prices as showing that Australia’s average rates are among the lowest in the Asia-Pacific region. Majors ExxonMobil and Shell, meanwhile, have dismissed a recent recommendation to the government that gas pr