PERTH - Australia's Queensland state said on Wednesday it will urge the federal government to streamline environmental approvals for what it says could be Australia’s first new oilfield in decades, arguing faster development is needed to bolster fuel security.

The Taroom Trough is considered a frontier basin with potentially large unconventional gas resources, but may also contain significant oil after Australian junior Omega Oil and Gas unexpectedly struck oil in 2025.

Oil major Shell is also operating in the field and has started producing small amounts of oil, said David Crisafulli, the premier of Australia's third-largest state.

“Unlocking the Taroom Trough is critical to locking in future national fuel security,” Crisafulli said in a statement.

Australia has faced fuel security concerns since Iran all but closed off the Strait of Hormuz after being attacked by the US and Israel. The most recent government figures show Australia had just 29 days of diesel stocks.

Development at Taroom is at an early stage and explorers “still have to fully establish the nature of the reservoir,” Rick Wilson, the CEO of consultancy Energy Quest, said on Wednesday.

Shell, which operates the Queensland Curtis LNG plant in Gladstone supplied by local coal seam gas, began producing about 200 barrels a day of liquid condensate from an appraisal well seven weeks ago, Shell QGC Vice President Krishna Venkatesan said. Crisafulli said the output was being sent to a local refinery for conversion into diesel.

Queensland awarded three oil acreage parcels in February and said it would accelerate roads and trunk infrastructure under a new Taroom Trough Development Plan. It has also awarded a series of gas acreage packages.

“This is about streamlining the process and coordinating infrastructure needed to get it out of the ground sooner," Crisafulli said, arguing that approvals for oil and gas projects should be fast-tracked under environmental reforms introduced last year.

Environment Minister Murray Watt said the federal government had not received any proposal from Queensland about Taroom.

"We’re open to any good idea that’s being put forward to build our sovereign capability, as long as they stack up economically and environmentally," he said.

Australia is a major LNG exporter but imports most of its crude oil and refined fuels owing to low refinery capacity and a general lack of oil resources compared to its bountiful gas.