The Australian state of Victoria has launched its first petroleum exploration tenders since 2018 in response to looming gas supply risks caused by declining production in existing fields.
The tender applications have been invited for two areas: Area VIC/25-1 – offshore the Otway Basin (Victorian waters) and Area VIC/25-2 – onshore the Gippsland Basin.
Tender applications can be submitted until 11 February 2026.
According to the petroleum industry, these areas have “the most interest for exploration”.
Bloomberg reported that the new exploration projects are intended to supply the domestic market and are not aimed at supporting exports.
This move is part of a broader strategy to address increasing electricity demand in New South Wales (NSW), Victoria and South Australia, according to the report.
The Australian Energy Market Operator forecast earlier this year that demand for gas on the east coast is expected to outpace supply from 2028.
This projection has led to calls to compel liquefied natural gas exporters to redirect non-contracted supplies to the domestic market to address the shortfall.
Environmental organisations opposed the government’s decision on new gas exploration tenders due to the potential impact on the climate.
Environment Victoria stated that the projects can have “grave environmental impacts from seismic blasting, marine ecosystem damage and groundwater drawdown”.
Environment Victoria senior climate and energy advisor Kat Lucas-Healey said: “The government has completely ignored community concerns about seismic blasting and risks to Gippsland’s groundwater in opening up these tenders. These are serious, lasting impacts and for what? For the last dregs of Victorian gas.
“Gas use in Victorian homes and businesses is plummeting as people switch to much cheaper and more efficient electric alternatives.
“Opening up new exploration of a rapidly diminishing resource only cultivates uncertainty, which costs households and businesses.”
In June, the Australian Financial Review reported that indigenous landowners mounted legal challenges against Santos’ A$3.6bn ($2.39bn) Narrabri gas project in NSW.
In September, the Australian Government announced a 2035 target to reduce emissions by 62–70% below 2005 levels.
Australian Energy Producers has welcomed the Victorian Government’s decision to invite tender applications for petroleum 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 that the government is taking steps to address future energy challenges.”
