BP has abandoned plans to drill for oil in the commonwealth marine park the Great Australian Bight (GAB), offshore South Australia.
The oil major said the decision not to proceed with the exploration drilling programme followed a review of its upstream strategy and that the GAB project will not be able to compete for capital investment or other upstream opportunities for the "foreseeable future".
"We have looked long an hard at our exploration plans for the Great Australian Bight but, in the current external environment, we will only pursue frontier exploration opportunities if they are competitive and aligned to our strategic goals," said Claire Fitzpatrick, BP's managing director for exploration and production in Australia.
"After extensive and careful consideration, this has proven not to be the case for our project to explore in the Bight."
BP has informed federal and state governments, as well as its joint venture partner Statoil, of the decision.
The oil group previously said the GAB area had the potential to be as big an oil field as the Gulf of Mexico. It was awarded exploration licences for four blocks in the Ceduna area of the GAB in early 2011.
Statoil acquired a 30 per cent interest in the licences in 2013, though BP remained the operator with 70 per cent interest.
BP and Statoil planned to drill for oil in the southern section of the Bight in 2016 or 2017.
Last month, the Wilderness Society attacked the project's plans for not giving a clear indication of how it would contain a major oil spill in the area.
BP's chief executive Bob Dudley said the global oil market is "pretty much in balance" yesterday at the World Energy Conference in Istanbul.