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Exploration on downhill slide, ABS reveals

MINERAL and offshore petroleum exploration is continuing to taper off in the resource industry with exploration now 16.7% lower than a year ago, according to latest data from the Australian Bureau of Statistics.

Nationally, $3 billion was spent on all exploration activities in the second half of 2014, reflecting a $400 million decrease from the 12 months before that.

Mineral exploration in Queensland contributed the largest decline to the national data, with trend estimates revealing state investment in exploration fell by $3.6m in the last quarter to now sit at $87.6m.

Petroleum exploration also fell by 3.2%, reaching just over $1bn in capital investment across the country. Exploration expenditure on production leases dropped by $50.1m, or 18.6%, but exploration expenditure in all other fields increased by an average of 2.4%.

The offshore petroleum exploration sector experienced one of the most significant declines of 6.8%, or $50m, to now sit at $680.2m annually.

Onshore exploration for petroleum, however, experienced a surprising increase of 6.7% in the December 2014 quarter to $329.8m, while drilling also increased by $9.2 million or 4.9% to reach $195.6m.

Employers reduce exploration spending

The latest data from the ABS comes in the days following the release of a report from SNL Metals and Mining, which revealed that resource employers in Western Australia had reduced funds allocated to exploration by more than $1 billion in 2013.

Surveying 250 resource industry employers, the report indicated that funding allocated to exploration now collectively stands at just $630 million.

Chief economist for HSBC Paul Bloxham told ABC News the statistic was concerning.

“Exploration has been falling, it’s down about 30 per cent year on year,” he said.

“It’s at its lowest level since 2006 and this all makes sense given commodity prices have fallen, given we’ve seen the peak of the mining investment boom, so it’s a tough environment to be in.”

For more information about exploration in Australia, click here.

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