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Mineral and Petroleum Exploration, Australia methodology

Reference period
March 2020
Released
2/06/2020

Explanatory notes

Introduction

1 The private sector exploration statistics appearing in this publication have been collected and compiled from the Mineral Exploration and Petroleum Exploration quarterly censuses conducted by the Australian Bureau of Statistics. This publication contains actual and expected exploration expenditure.

Scope and coverage

2 The Mineral Exploration and Petroleum Exploration censuses cover private enterprises known to be engaged in exploration in Australia, and in Australian waters.

3 A new Maritime Boundary Treaty between Australia and Timor-Leste came in to force on 30 August 2019. The new treaty provides exclusive jurisdiction of the former Joint Petroleum Development Area excluding Greater Sunrise in the Timor Sea to Democratic Republic of Timor-Leste. From this publication (8412.0) will reflect the new maritime boundary.

4 The tenements in the Ashmore and Cartier Islands are administered by the Northern Territory Department of Mines and Energy. Therefore all petroleum exploration expenditure in this area has been included with the Northern Territory data.

Seasonal adjustment

5 Seasonal adjustment is a means of removing the estimated effects of normal seasonal variation from the series so that the effects of other influences can be more clearly recognised. Seasonal adjustment does not aim to remove the irregular or non-seasonal influences which may be present in any particular series.

6 These irregular influences that are volatile or unsystematic can make it difficult to interpret the movement of the series even after adjustment for seasonal variation. This means that quarter-to-quarter movements of seasonally adjusted estimates may not be reliable indicators of trend behaviour.

7 In this publication, the seasonally adjusted estimates are produced by the concurrent seasonal adjustment method which takes account of the latest available original estimates. This method improves the estimation of seasonal factors, and therefore, the seasonally adjusted and trend estimates for the current and previous quarters. As a result of this improvement, revisions to the seasonally adjusted and trend estimates will be observed for recent periods. A more detailed review is conducted on an annual basis.

8 The revision properties of the seasonally adjusted and trend estimates can be improved by the use of autoregressive integrated moving average (ARIMA) modelling. ARIMA modelling relies on the characteristics of the series being analysed to project future period data. The projected values are temporary, intermediate values, that are only used internally to improve the estimation of the seasonal factors. The projected data do not affect the original estimates and are discarded at the end of the seasonal adjustment process. The Mineral Exploration collection uses ARIMA modelling where appropriate for individual time series. The ARIMA model is assessed as part of the annual review. For more information on the details of ARIMA modelling see the feature article: Use of ARIMA modelling to reduce revisions in the October 2004 issue of Australian Economic Indicators (cat. no. 1350.0).

9 In using the seasonally adjusted series for petroleum exploration offshore drilling and petroleum exploration in Western Australia, care should be exercised because of the difficulties associated with reliably estimating the seasonal pattern.

Trend estimates

10 The smoothing of seasonally adjusted series to create trend estimates reduces the impact of the irregular component of the seasonally adjusted series.

11 The trend estimates are derived by applying a 7-term Henderson moving average to the seasonally adjusted series. The 7-term Henderson average is symmetric but, as the end of a time series is approached, asymmetric forms of the average are applied. Unlike the weights of the standard 7-term Henderson moving average, the weights employed here have been tailored to suit particular characteristics of the individual series. While the asymmetric weights enable trend estimates for recent quarters to be produced, it does result in revisions to the estimates for the most recent three quarters as additional observations become available. There may also be revisions because of changes in the original data and as a result of the re-estimation of the seasonal factors.

12 There may also be revisions because of changes in the original estimates. As a result of these revisions, the seasonally adjusted and trend estimates will also be revised. For further information, see Information Paper: A Guide to Interpreting Time Series, Monitoring Trends, an Overview (cat. no. 1349.0).

Expected exploration expenditure

13 Expected expenditure is collected in June and December quarter each year. Businesses are asked to report their expected expenditure for the next six months.

14 From the June quarter 2000 publication, the basis for the Expected Mineral Exploration Expenditure series changed. Prior to June 2000, the expected estimates released were simple aggregates of data compiled through the quarterly Mineral Exploration collection. However, these aggregates underestimated actual expenditure to a fairly consistent degree. The consistency with which the published data underestimated actual expenditure suggested that adjustments to improve the accuracy and usefulness of the estimates of expected expenditure would be possible.

15 In the period since June 2000, such adjustments have been made to reported expected exploration data resulting in estimates which better predict actual expenditure for the same period. For more information regarding the adjustments made to the Expected Mineral Exploration Expenditure series, see the feature article in the June quarter 2000 and the appendix in the December quarter 2002 issue of this publication. Since the June quarter 2003 issue, both unadjusted and adjusted expectations data have been presented in this publication.

16 The Expected Adjusted series was intended to produce a more reliable indicator of expected expenditure, but subsequent improvements to editing and imputation procedures have made the Expected Adjusted series unecessary. As such, the Expected Adjusted series was discontinued and removed as of the June quarter 2016 publication.

Acknowledgement

17 ABS publications draw extensively on information provided freely by individuals, businesses, government and other organisations. Their continued cooperation is appreciated: without it a wide range of statistics published by the ABS would not be available. Information received by the ABS is treated in strict confidence as required by the Census and Statistics Act 1905.

Related publications

18 Users may also wish to refer to the following publications which are available from the ABS web site:

  • Private New Capital Expenditure and Expected Expenditure, Australia (cat. no. 5625.0)
  • Australian Mining Industry (cat. no. 8414.0)
  • Mining Operations, Australia (cat. no. 8415.0)
     

ABS data available electronically

19 Current publications and other products released by the ABS are available from the Statistics View. The ABS also issues a daily Release Advice on the web site which details products to be released in the week ahead.

20 Details of wells and metres drilled in petroleum exploration are available from Geoscience Australia's Oil and Gas Resources of Australia available at www.ga.gov.au.

Effects of rounding

21 Where figures have been rounded discrepancies may occur between the sums of the component items and their totals.

Glossary

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Development

Phase usually following exploration where a prospective discovery (e.g. proven oil or gas field or concentrate of ore) is brought into production or for extending the life of a current mine or well. Activities may include preparing the ground by the removal of overburden, constructing shafts, drives and winzes; or by drilling and completing wells. All activities are for the purposes of commencing extraction/mining or extending production.

Exploration

Activity involves searching for concentrations of naturally occurring solid, liquid or gaseous materials and includes new field wildcat and stratigraphical and extension/appraisal wells and mineral appraisals intended to delineate or greatly extend the limits of known deposits by geological, geophysical, geochemical, drilling or other methods. This includes drilling of boreholes, construction of shafts and adits primarily for exploration purposes but excludes activity of a developmental or production nature. Exploration for water is excluded.

Exploration expenditure

Covers all expenditure (capitalised and non-capitalised) during the exploratory or evaluation stages in Australia and Australian waters. Costs include cost of exploration, determination of recoverable reserves, engineering and economic feasibility studies, procurement of finance, gaining access to reserves, construction of pilot plants and all technical and administrative overheads directly associated with these functions. Examples are costs of satellite imagery, airborne and seismic surveys, use of geophysical and other instruments, geochemical surveys and map preparation; licence fees, land access and legal costs; geologist inspections, chemical analysis and payments to employees and contractors. Cash bids for offshore petroleum exploration permits are also included.

Exploration licence/permit

Is designed to cover the exploration phase of a project and confers exclusive rights to the exploration for and recovery of samples from the area designated. These rights are granted by relevant Commonwealth, State or Territory Governments.

Minerals

Are a naturally occurring inorganic element or compound having an orderly internal structure and characteristic chemical composition, crystal form, and physical properties. These, for example, comprise of metallic minerals, such as copper, silver, lead-zinc, nickel, cobalt, gold, iron ore, mineral sands, uranium and non-metallic minerals such as coal, diamonds and other precious and semi-precious stones and construction materials (e.g. gravel and sand).

Mining licence/lease

Covers the commercial mining phase of a project for the licenced area. This licence authorises both full recovery and further exploration to occur.

Offshore

Commences from the low water mark to three nautical miles out (referred to as coastal waters) under State and Northern Territory legislation and extends to those areas beyond coastal waters governed by the Commonwealth under the Petroleum (Submerged Lands) Act 1967.

Onshore

Includes all Australian territorial lands to the low water mark.

Petroleum

Is a naturally occurring hydrocarbon or mixture of hydrocarbons. As oil or gas in solution (e.g. Liquid Petroleum Gas), it is widespread in Australian sedimentary rocks.

Retention licence

Is an intermediate form of tenure between the exploration licence and mining licence allowing the holder of the exploration licence to retain title to the area for a limited time. It is designed to ensure the retention of rights pending the transition of a project from the exploration phase to the commercial mining phase.

Selected base metals

Are made up of the following minerals: copper, silver, lead-zinc, nickel and cobalt.

Type of deposit

Classification used:

Existing deposits - Exploration that is delineating or proving up an existing deposit, including extensions and infill, which has been classified as an Inferred Mineral Resource or higher.

New deposits - Exploration on previously unknown mineralisations or known mineralisations yet to be classified as an Inferred Mineral Resource or higher. They include:

  • Exploration resulting in finding mineralisation that was previously unknown.
  • Exploration on previously known mineralisation that has not been subjected to modern exploration.
  • Exploration within an existing mining tenement for the purpose of finding new sources of mineralisation that have not already been classified as at least an Inferred Mineral Resource.
     

Type of expenditure

Classification used:

Drilling expenditure - includes wages and salaries paid to employees; purchase, rental, hiring as well as operation and maintenance of drilling equipment together with activities associated with accessing the areas where drilling is to occur (e.g. road creation, vessel/transport hiring, site preparation and restoration). Also includes expenditure on drilling done by contractors.

Other expenditure - includes all other exploration costs, other than those associated with drilling expenditure. This expenditure includes purchase of capital and non-capital items, rental or hiring fees, service fees relating to surveying and analysis, administrative and legal fees associated with obtaining licences/permits, land access, map preparation, feasibility studies, environmental impacts studies and restoration costs.

Type of lease

Classifications used:

Production lease - is an area on which development to extract coal, minerals, liquids or gaseous materials is underway or where extraction/mining of these substances is already occurring. See also mining licence/lease.

All other areas - are those areas outside the Production lease. These include areas under exploration licence/permit or retention licence, as well as non-licenced areas being assessed for exploration, e.g. through airborne surveys.

Abbreviations

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ABSAustralian Bureau of Statistics
GSTgoods and services tax
JPDAJoint Petroleum Development Area
UNTAETUnited Nations Transitional Administration in East Timor
WSTwholesale sales tax
ZOCZone of Cooperation