Photo by: Bloomberg
PERTH (miningweekly.com) – The Australian Petroleum Production and Exploration Association (Appea) has warned that a new A$0.48-a-barrel levy on all offshore oil producers was "over the top" and "extreme".
The Department of Industry, Science, Energy and Resources in May this year announced a possible temporary levy on offshore petroleum production, aimed at recovering the costs of the Australian government decommissioning and remediating the Laminaria and Corallina oilfields and associated infrastructure.
The measure was announced as part of the government’s 2021/22 Budget.
The federal government said at the time that the levy would ensure that taxpayers were not left to pay for the decommissioning and remediation of production facilities and associated infrastructure in the oilfields.
Appea CEO Andrew McConville on Tuesday said the proposed Laminaria-Corallina oil fields and associated infrastructure levy would see a number of offshore oil and gas companies footing a massive bill for a project they have never been involved in, never benefitted from and up to 3 500 km away from their operations.
“To slug an entire industry A$0.48 per barrel and not put an end date on it is over the top,” McConville said.
“Any levy is unreasonable in any form but one being so extreme will be a major disincentive for investment at a time when policy stability and certainty is critical.
“This is a terrible precedent and could have serious repercussions to Australia’s economy, to jobs and to our attractiveness as an investment destination when, as the global economy recovers, competition for investment capital will intensify.”
McConville said that the government should systematically consider alternatives to reduce the costs of its own current management of the project, overall decommissioning costs and look at alternative decommissioning and cost recovery measures.
“The government should not be washing its hands of this through a blunt instrument like a levy, but working constructively and collaboratively with industry to minimise costs and explore all options being put on the table to get the best and most economically efficient outcome for the environment, the industry and the community.”
“More broadly, the industry remains committed to working with the government on the sensible development of a new decommissioning policy framework.”