The Australian state of Victoria launched its first oil exploration tenders since 2018 in response to looming gas supply risks caused by declining production at existing fields.
Tender applications have been called for two areas: Area VIC/25-1 – off the coast of the Otway Basin (Victorian waters) and Area VIC/25-2 – off the coast of the Gippsland Basin.
Tender requests may be submitted until February 11, 2026.
According to the oil industry, these areas are “those of greatest interest for exploration.”
Bloomberg He reported that the new exploration projects aim to supply the domestic market and do not aim to support exports.
The move is part of a broader strategy to address growing electricity demand in New South Wales (NSW), Victoria and South Australia, the report said.
The Australian Energy Market Operator forecast earlier this year that gas demand on the east coast is expected to exceed supply from 2028.
This projection has led to calls to force liquefied natural gas exporters to redirect uncontracted supplies to the domestic market to address the shortfall.
Environmental organizations opposed the government’s decision to call for new tenders for gas exploration due to the potential impact on the climate.
Environment Victoria said the projects could have “serious environmental impacts due to seismic explosions, damage to marine ecosystems and groundwater reduction”.
Kat Lucas-Healey, senior climate and energy adviser at Environment Victoria, said: “The government has completely ignored community concerns about seismic explosions and the risks to Gippsland’s groundwater by opening these tenders. These are serious and long-lasting impacts, and for what? For the last remnants of Victorian gas.”
“Gas use in Victorian homes and businesses is plummeting as people switch to much cheaper and more efficient electric alternatives.
“Opening new exploration into a rapidly dwindling resource only creates uncertainty, which costs households and businesses.”
In June, the Australian Financial Review reported that indigenous landowners have launched legal challenges against Santos’ A$3.6 billion ($2.39 billion) Narrabri gas project in New South Wales.
In September, the Australian government announced a 2035 target to reduce emissions by 62% to 70% below 2005 levels.
Australian energy producers have welcomed the Victorian government’s decision to invite tenders for oil exploration permits in the Otway and Gippsland basins.
Australian Energy Producers Victoria director Peter Kos said: “Today’s announcement is an essential first step in unlocking new domestic natural gas resources and demonstrates the government is taking action to address future energy challenges.”