Andrew Forrest’s Squadron Energy is abandoning its plans for gas exploration in Western Australia’s Canning Basin because the project does not align with the company’s climate policy.
The company has confirmed it is exiting from its permit 499 in the Kimberley, which it acquired last year in partnership with Goshawk Energy.
Squadron and Goshawk had planned seismic surveys and two wells over a six-year period.
“Squadron Energy continuously reviews its investment portfolio to ensure our projects are aligned with our climate policy and actively support the transition to a low carbon economy,” a Squadron spokesman said on Tuesday.
“As part of this ongoing review, Squadron Energy has made the strategic decision to exit from our limited Canning Basin permits. This process is in advanced stages.”
It is unclear if Goshawk, which held a 20% share, will continue with its exploration plans.
Squadron’s decision, which was first reported in the energy publication Boiling Cold, has been welcomed by environment groups.
Martin Pritchard, the director of the Broome-based conservation group Environs Kimberley, said the decision was a recognition that the “Kimberley is way too important environmentally and culturally to be fracked and industrialised”.
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“To have oil and gas fracking fields like you have in Texas would be a disaster for the $500m tourism industry and would threaten our reputation for vast intact landscapes which the Kimberley is known the world over for,” he said.
“Andrew also knows that in an increasingly carbon-constrained world the shale oil and gas in the Kimberley’s Canning Basin has become a stranded asset.”
Forrest announced in November 2020 that his Fortescue Metals Group would aggressively support zero-emissions energy through its new green arm, Fortescue Future Industries.
Last month, he criticised multibillion-dollar investments in gas projects in Australia and singled out Santos and Woodside for their contribution to global greenhouse gas emissions.
Pritchard said Forrest’s exit followed the withdrawal by other companies from the Kimberley, including ConocoPhillips, PetroChina and Mitsubishi.
He called on Origin Energy, which recently invested $35m to join Buru Energy in exploring for oil and gas, to follow.
“Origin Energy and their investors like Australian Super need to take a close look at Andrew Forrest’s withdrawal from the Kimberley to make sure they’re not going to make the same mistakes and waste millions on exploration before realising its never going to work,” he said.
Origin Energy declined to comment.
Comment was also sought from Goshawk.