A coordinated effort between oil & gas suppliers, operators, governments and research organisations can triple the growth of Australia’s oil & gas supply chain over the next decade and add an extra $7 billion to the national economy by 2030, according to a new report released today.
The key findings are delivered in the Growing Australia’s Oil & Gas Supply Chain Report, commissioned by NERA (National Energy Resources Australia — the country’s Industry Growth Centre for energy resources), and released on the first day of the Australasian Oil & Gas Conference (AOG) in Perth this morning.
The Report is the first time the size and composition of Australia’s oil & gas supply chain has been analysed to determine its economic potential and opportunities for growth.
It reveals that, while the local supply chain is a vital contributor to the Australian economy (at $38 billion Gross Value Add), is approximately 1.2 times the size of the building construction sector and generates almost 2 percent of the nation’s Gross Domestic Product, it is not yet meeting its full potential.
To realise this potential and overcome barriers to future growth, the Report identifies three key opportunities to strengthen local supplier capabilities that can build a more mature, resilient and competitive domestic supply chain, generating up to $49 billion GVA in 2030 — a 20-30% increase on its GVA in 2016-17. These opportunities include:
- Suppliers should deepen areas of strength to develop more advanced offerings and improve global competitiveness, particularly in predictive maintenance, remote operations, and safety-enhanced tools and services;
- Operators, large contractors, government and research organisations should support and encourage local innovation to lower costs and improve productivity; and
- SMEs should improve their understanding of buyers’ priorities, while buyers should mitigate procurement barriers, for example by setting up alternative procurement pathways for SMEs.
Releasing the findings to a national and international audience at AOG, NERA CEO Miranda Taylor said the Report recommendations are a clear signal to all parts of the value chain that breaking down industry silos and finding new ways to support Australian energy innovation are the chief architects to creating value and jobs for the nation.
“Australia’s domestic supply chain has developed unmatched capabilities to operate in our uniquely harsh environments, but to remain globally competitive we must build on these world-leading capabilities in remote operations, AI, automation and digitisation to move our technological capabilities and solutions up the value chain,” Ms Taylor said.
“Collaborative action across the supply chain can help us unlock this value and assist our local product and solution providers develop deeper and more sophisticated capabilities, creating new job opportunities here at home and helping increase the export of Australian-developed goods and services to the world.”
NERA’s latest research joins the Staying Ahead of the Game Report released by NERA and METS Ignited in 2019, which found that successfully adopting digital automation technologies across the mining and oil and gas industries has the potential to add $74 billion in value to the national economy by 2030 and create more than 80,000 new jobs.
To read and download the Growing Australia’s Oil & Gas Supply Chain Report, and for more information about NERA’s national activities, visit nera.org.au.