The standing of crude oil on the beaches of southern Australia was first recorded approximately 150 years ago. This material, known locally as coastal bitumen, was used by the early maritime visitors and settlers to caulk their vessels and is the first recorded commercial use of crude oil in Australia. Historical records indicate that the greatest amount of coastal bitumen has stranded and presumably continues to strand along the coasts of South Australia and western Victoria. The Otway Basin, which straddles part of this shoreline, is one of a series of basins located along the southern passive margin of the Australian continent. These basins formed during the Late Jurassic-Early Cretaceous period in response to the plate tectonic rifting and final breakup of eastern Gondwanaland 95 million years ago. The circumstantial evidence of coastal bitumen, and the more recent discovery of offshore gas seeps, have been used to promote petroleum exploration in the Otway Basin. As a result, several small but commercial gas fields and numerous oils shows have been discovered. The moderate success of exploration in the Otway Basin may not be a true indication of its ultimate reserves, given that Australia's most prolific petroleum province, the Gippsland Basin, lies immediately to the east. The aims of this study were twofold: to appraise the hydrocarbon potential of the western Otway Basin, and to identify the origin(s) of the coastal bitumen. Source rocks were identified using an interdisciplinary approach which included wireline log interpretation, lithological descriptions, organic petrology (viz. maceral analysis, vitrinite reflectance) and organic geochemical analysis (viz. TOC and Rock-Eval pyrolysis). Oil-source rock and oil-oil correlations were attempted using carbon isotope mass spectrometry, gas chromatography and gas chromatography-mass spectrometry. In the western Otway Basin the most important hydrocarbon plays occur within the Early Cretaceous Otway Group (Crayfish Subgroup and Eumeralla Formation). Terrigenous source rocks with the potential to generate both oil and gas were identified in the lower Eumeralla Formation. The waxy paraffinic-naphthenic crude oils recovered from Windermere 1 and 2, Lindon 1 and Port Campbell 4 have biomarker signatures that are indicative of a terrestrial source to which conifer resins made a significant contribution. These oils have been correlated with coaly facies of the lower Eumeralla Formation. In the Crayfish Subgroup, lacustrine mudstones in the Pretty Hill Sandstone contain kerogen derived from a mixture of algal and biodegraded plant remains which appears to have generated significant volumes of gas (Katnook and Ladbroke Grove Gas Fields; Troas 1 discovery) and minor quantities of oil (Sawpit 1 discovery). Reservoir bitumens occur in the Pretty Hill Sandstone at Crayfish-A 1 and Zema 1. These bitumens are unlike any other oil found within the Otway Basin. Their distinctive biomarker assemblage indicates that they were derived from algal and bacterial remains preserved in carbonate-evaporite sediments. Although no such source rocks have yet been penetrated by any exploration well, it is believed that they may be located within either the lower Crayfish Subgroup or the Casterton beds. These inferred source rocks are likely to be overmature in most areas of the western Otway Basin, precluding any significant future hydrocarbon generation. However, their required presence indicates that hydrocarbons were generated very early in the history of the basin. A bimonthly survey documenting the stranding of coastal bitumen between Kangaroo Island, South Australia and Cape Otway, Victoria was carried out from September 1990 to September 1991. The physical characteristics of the coastal bitumens collected during this period enabled three categories of beached petroleum to be identified: waxy bitumen, asphaltite and oil slicks. Elemental, isotopic and biomarker analyses of representative samples confirmed that these three categories of petroleum are not geochemically related. Of extreme significance is the fact that they bear no resemblance to oil discoveries in the Otway Basin. Waxy bitumens, which account for 90% of the total beached petroleum, appear to originate from oil seeps within the Indonesian region. Thus the stranding of coastal bitumen along the southern margin of Australia can be attributed to both natural and anthropogenic causes but not, as first suspected, to oil seepage from the offshore sector of the Otway Basin.