Equinor has announced its decision to abandon its drilling plan for the Great Australian Bight.
The company said on Tuesday it would discontinue its exploration drilling plan in the Stromlo-1 exploration well, located 400 kilometres south-west of Ceduna.
Equinor had received environmental approval in December from the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) to proceed with its plan, with the company projecting it was to begin work later this year.
A statement said that following a review of its exploration portfolio, Equinor had concluded the project's potential was not commercially competitive compared with the company's other exploration opportunities.
"The approval of the Stromlo-1 exploration well environment plan confirmed our ability to safely operate in the Bight," Equinor's country manager for Australia Jone Stangeland said.
"However, Equinor has decided to discontinue its plans to drill the Stromlo-1 exploration well, as the opportunity is not commercially competitive."
Equinor said it had informed federal, state and local authorities of its decision.
"We will engage with the federal and state authorities regarding our decision to discontinue the exploration program," Mr Stangeland said.
"We hold an exploration permit offshore Western Australia and will maintain other ongoing interests and activities in Australia."
The Ceduna District Council was working with Equinor as the Ceduna Airport was to be used as a base of operations by the company.
Ceduna mayor Perry Will said he was "disappointed" with the decision from Equinor.
Streaky Bay District Council mayor Travis Barber acknowledged those who had fought to stop drilling plans from proceeding.
"At the District Council of Streaky Bay we took a neutral stance on this matter, but in my personal opinion I am happy for those who are passionately against drilling in the Bight and for all the hard work they have put in to protect our pristine environment and the area we live in," he said.
"This will be a great announcement for them."
Penong's Catrina Spitzkowsky has long protested against drilling in the Great Australian Bight and said she was "ecstatic" about the decision.
"I'm over the moon and lost for words," she said.
"It is amazing and it shows that when people stick together and we really believe in something, we can make it happen."
Resources Minister Keith Pitt said Equinor's decision to discontinue its program was "disappointing".
"I know many will find Equinor's decision not to proceed with this oil exploration project in the Great Australian Bight extremely disappointing, and it is particularly hard for South Australia," he said.
"The Liberals and Nationals Government remains committed to encouraging the safe development of Australia's offshore petroleum resources, which is overseen by a world-class independent regulator in the National Offshore Petroleum Safety and Environmental Management Authority.
"I want to highlight that Equinor worked within the rigorous approval processes in place for this project and the company's environmental plan had been accepted by NOPSEMA."
The Wilderness Society said it welcomed the announcement of Equinor becoming the fourth company to withdraw from the Bight in recent years, after BP, Chevron and Karoon Gas.
"It's been a while coming, but the right decision is the right decision and we have no doubt that the hundreds of thousands of people that have supported the campaign to Fight for the Bight will be both delighted and relieved to hear this news," Wilderness Society South Australian director Peter Owen said.
"We've worked tirelessly alongside the community to ensure that the Bight can be protected from irresponsible fossil fuel exploitation.
"It's clear that drilling the Bight is not a sensible proposition. Opening up a new high-risk frontier oil field when we are hurtling towards catastrophic climate change is madness."
Mr Owen said the Wilderness Society was calling on the federal government to "listen to the people and permanently protect the unique waters of the Great Australian Bight from drilling for good".
Greenpeace Australia Pacific chief executive officer David Ritter called the announcement "an incredible win" for coastal communities, Indigenous traditional owners, surfers, the seafood industry, tourism operators and other local businesses after "years of relentless campaigning".
The South Australian Chamber of Mines and Energy chief executive officer Rebecca Knol said it was a lost opportunity.
"The resource potential of the Bight continues to offer vast untapped economic opportunity for South Australia," she said.
"Sadly, this is a lost economic opportunity for South Australia during a period where the state is pursuing an ambitious three per cent growth target.
"The public campaign waged against Equinor deliberately overstated risk and ignored the significant benefits of the project at a time where Australia's oil production has fallen significantly over the last decade and we now import over 80 per cent of the oil we use."