Oil giant BP has dropped plans to drill exploration wells in the Great Australian Bight.
BP says the decision follows a review of its future global opportunities, with the Bight project not delivering enough reward on investment.
"In the current external environment, we will only pursue frontier exploration opportunities if they are competitive and aligned to our strategic goals," managing director for exploration and production Claire Fitzpatrick said in a statement on Tuesday.
"After extensive and careful consideration, this has proven not to be the case for our project to explore in the Bight."
BP had planned to drill two wells in the Bight in a move that attracted widespread opposition from environmental groups.
The company won a federal government tender to explore the area offshore of South Australia.
SA Treasurer Tom Koutsantonis said the decision was "bitterly disappointing" for the state and the country.
"I think every Australian has a right to feel disappointed by BP," he told reporters in Adelaide.
"They made a promise to spend nearly $1.4 billion on exploration in the Great Australian Bight."
But the Wilderness Society said it was the right decision and called on the federal government to rescind all future drilling leases in the Bight.
"The Great Australian Bight is an utterly inappropriate place to be turning into an oil field," the society's SA director Peter Owen told AAP.
"We can't afford to put at risk this pristine wilderness area, home to one of the world's biggest southern right whale nurseries, our fishing and tourism industries and our coastal way of life."
Fellow environmental group Sea Shepherd, whose Steve Irwin boat campaigned in the Bight, said it was a "joyous day".
"For the whales and the sharks and the seals and the dolphins and the penguins and all the incredible marine life that call the Great Australian Bight home," Sea Shepherd's managing director Jeff Hansen said.
"It's just a very joyous day and the right result."
