The value of Western Australia's resources industry has plunged almost 20 per cent in the past year as iron ore and oil prices slumped.
Sales in the state’s all-important minerals and petroleum industry fell by $22.5 billion, or 19 per cent, to $99.5 billion in 2014/15 after reaching a record $122 billion in 2013/14, statistics released by the West Australian Department of Mines and Petroleum (DMP) show.
And while the state has an estimated $171 billion worth of resources projects under construction or committed to development, the DMP has foreshadowed investment could fall sharply next year as the massive $54 billion Gorgon liquefied natural gas (LNG) project and the $10 billion Roy Hill iron ore project come online.
“The outlook for major projects will decline sharply during the next 18 months as several major projects are completed,” the DMP said in a statement.
Construction of Gorgon and Roy Hill is expected to be finished later this year, resulting in almost $80 billion dropping out of the major project figures.
Over the past year West Australian iron ore export volumes grew by 95 million tonnes to 719 million tonnes as the big mining companies boosted production.
But sales of the nation’s most valuable export fell 27 per cent to $53 billion, down from $74 billion the previous year due to steep price falls.
LNG sales also declined, fetching $13.8 billion in the year from $14.4 billion the previous year, despite increased volumes.
Still, the weakening Australian dollar helped offset falling commodity prices following a period of investment growth in recent years, the DMP said.
The release of the figures comes as BHP Billiton’s plans to drill for oil and gas in an unexplored area off Western Australia have been touted by that state’s government.
BHP’s Petroleum president Tim Cutt told investors this week that four survey leads from the Beagle sub-basin north of Dampier each had a potential recovery of more than 400 million barrels of oil.
West Australian mines and Petroleum Minister Bill Marmion said the company’s planned drilling in the area in 2018 provided an insight into Western Australia’s oil and gas exploration potential.
“It showcases to international investors that WA is one of the few accessible places left in the world for large discoveries,” Mr Marmion said in a statement.
Western Australia wants the oil and gas sector to expand after the government went into the red for the first time in 15 years, booking a deficit of $1.3 billion for 2014/15, following a dramatic plunge in iron ore prices and a record low GST share.