PESA 2014 business review

2015 ◽  
Vol 55 (1) ◽  
pp. 189
Author(s):  
Jonathon Peacock
Keyword(s):  
Petroleum Industry ◽  
Global Market ◽  
Export Market ◽  
Market Forces ◽  
Capital Projects ◽  
Resource Rent ◽  
Business Context ◽  
Petroleum Resource ◽  
Export Policies ◽  
Gas Supply

This review looks back at 2014 from a business context and considers where the Australian petroleum industry will be placed in 2015. Globally, there were a number of major developments in 2014. These included new supply sources (e.g. PNG LNG), exploration successes (e.g. Brazil), and evolving energy export policies that have been set to change the market (e.g. US, OPEC). Russia agreed to a major gas supply agreement with China, and access to talent remained an issue. In Australia, there were a number of developments that shaped the business agenda, including: Capital projects—Prelude, QCLNG, and many others—achieved major milestones such as first LNG production. There were ongoing cost increases in capital projects. From a tax perspective, the Petroleum Resource Rent Tax (PRRT) was not renounced, and a decision was made on Browse royalties. Operators were busy with commissioning teams and preparing to operate new assets. Boards debated capital management, notably the AU$200 billion of projects in pre-FID and asset divestments. Exploration, notably for onshore east coast regulations in NSW and Victoria. The opening of the Wallumbilla gas supply hub in Queensland, in March 2014. 2015 will be an important period for the industry in Australia. For instance, the price of oil will be under pressure due to the changing global market forces for energy. Operators will have to work hard in 2015 as they commission large new facilities, reduce costs, and improve plant reliability. Also, the regulatory agenda will be focused on exploration, and balancing domestic and export market forces.

Getting the message across—taxation contribution of the petroleum industry in Australia

2015 ◽  
Vol 55 (2) ◽  
pp. 432
Author(s):  
Carlo Franchina ◽  
Rod Henderson ◽  
Praneel Nand
Keyword(s):  
Common Ground ◽  
Oil And Gas ◽  
Petroleum Industry ◽  
Oecd Country ◽  
Life Cycles ◽  
Income Taxes ◽  
Resource Rent ◽  
Petroleum Resource ◽  
The Common ◽  
Oil And Gas Companies

With the global move towards tax transparency reporting measures, resource companies face challenges in ensuring that reporting captures the full extent of revenues contributed by resource companies and also correctly reports the project and profitability life cycles of resource companies. This extended abstract focuses on the global tax transparency debate and highlights the challenges for large Australian and global oil and gas businesses in demonstrating their payment of their fair share of tax and contributing to the communities in which they operate. Issues to be covered include: A summary of the revenue contribution of oil and gas companies in Australia through the layers of taxation, such as state royalties, the Petroleum Resource Rent Tax (PRRT) and corporate income taxes. Highlighting the types and rates of taxes paid by Australian oil and gas companies compared to other selected countries. A comparison of the concessions granted to Australian oil and gas companies to other countries. A historical summary of taxes paid by Australian oil and gas companies. A summary of existing and developing transparency reporting, such as the Australian Taxation Office (ATO) reporting of taxpayers with revenues more than A$100 million, the Extractive Industries Transparency Initiative, Dodd Frank rules, OECD country-by-country reporting, and BEPS developments. Recommendations to get the message across; that is, what should be the common ground on reporting the actual overall global tax liability including income tax, resource taxes, employment taxes and indirect taxes.

PETROLEUM RESOURCE RENT TAX AND THE NEW FRONTIERS

1996 ◽  
Vol 36 (2) ◽  
pp. 133
Author(s):  
C.A. Harne ◽  
J.A. Vinet ◽  
A.H. Baird
Keyword(s):  
Oil And Gas ◽  
Petroleum Industry ◽  
Oil Prices ◽  
Export Markets ◽  
Resource Rent ◽  
Petroleum Resource

The Resource Rent Tax in (RRT) Australia evolved in the late 1970s in a climate of scarcity of world oil and perception of rising oil prices for the next decade and beyond. In the 1990s, where countries are fiercely competing for export markets, many of the fundamental assumptions which underscored the evolution of the tax in Australia are no longer appropriate. The petroleum industry has consistently tendered reasons for the inappropriateness of the tax in certain circumstances. It is essential for Government to reconsider fundamental assumptions underlying the RRT if Australian producers are to remain competitive exporters of oil and gas.

scholarly journals Ethics, resource rent, environment and petroleum policy: the case of a small open economy

2021 ◽  
Vol 12 (1) ◽  
pp. 76-89
Author(s):  
Ola Honningdal Grytten ◽  
John Arngrim Hunnes
Keyword(s):  
Open Economy ◽  
Ethical Issues ◽  
Small Open Economy ◽  
The State ◽  
Resource Rent ◽  
The People ◽  
Petroleum Resource ◽  
Net Profit ◽  
Important Argument ◽  
Renewable Natural Resource

This paper contributes to the understanding of how the environment, ethics, values, and historical contingencies shape public policy. It explains the accomplishment of petroleum resource management in the small open economy of Norway. The study is conducted by mapping policy decisions and the arguments behind them regarding environmental and ethical issues. This is done by studying available governmental and parliamentary papers along with statements from politicians and central governmental officials. The paper also seeks to illuminate some of the decisions by quantitative measures. The paper firstly describes a model of Ricardian resource rent. Secondly, it investigates the set of values that were in place before the petroleum production started in the 1970s, as described in public documents. An important argument was to build a “qualitatively better society” for the benefit of the people. Thirdly, it traces the historical roots of these values by examining historical sources.The main findings are that success lies in understanding the ethics behind the environmental resource rent harvesting of this non-renewable natural resource. The paper concludes that the focus on the natural environment and resource rent management can be attributed to popular values built on historical traditions. According to them, the state and the trust between the state and its citizens played key roles in shaping the policy. The careful policy can be illustrated by the fact that Norway has managed to build one of the largest sovereign funds in the world worth USD 1,200 billion for use by future generations. Only 3% of its value, significantly less than its historical net profit, should be used annually.

Market Power Politics

2021 ◽  
Author(s):  
Stephen E. Gent ◽  
Mark J.C. Crescenzi
Keyword(s):  
Natural Gas ◽  
Market Power ◽  
Global Market ◽  
Export Market ◽  
Power Politics ◽  
Territorial Aggression ◽  
Oil Export ◽  
Potential Benefits ◽  
Gas Market ◽  
Political Leverage

This book explores how market power competition between states can create disruptions in the global political economy and potentially lead to territorial aggression and war. When a state’s firms have the ability to set prices in a key commodity market like oil or natural gas, state leaders can benefit from increased revenue, stability, and political leverage. Given these potential benefits, states may be motivated to expand their territorial reach in order to gain or maintain such market power. This market power motivation can sometimes lead to war. However, when states are economically interdependent, they may be constrained from using force to achieve their market power goals. This can open up an opportunity for institutional settlements. However, in some cases, institutional rules and procedures can preclude states from reaching a settlement in line with their market power ambitions. When this happens, states may opt for strategic delay and try to gradually accumulate market power over time through salami tactics. To explore how these dynamics play out empirically, the authors examine three cases of market power competition in hard commodity markets: Iraq’s invasion and occupation of Kuwait to seize market power in the oil export market, Russia’s territorial encroachment into Georgia and Ukraine to preserve and expand its market power in the natural gas market, and China’s ongoing use of strategic delay and gray zone tactics in the South and East China Seas to maintain its dominant position in the global market for rare earth elements.

The Story of John Galt’s Scottish Novels

2020 ◽  
pp. 149-184
Author(s):  
Gerard Lee McKeever
Keyword(s):  
Rapid Change ◽  
Global Market ◽  
Unintended Consequences ◽  
Volatile Substance ◽  
Market Forces ◽  
National Cultures ◽  
The Law ◽  
Cultural Forms ◽  
Scottish History

This chapter unearths a sweeping account of the Age of Improvement in John Galt’s brand of non-fictional fiction (‘theoretical history’). It finds Galt exploring the capacity of a modernising society to cope with localised, historically rooted and distinctive cultural forms. His narrative of improvement draws on the first Statistical Account of Scotland in both formal and thematic terms. In Annals of the Parish (1821) and The Entail (1823), local and national cultures can function as cohesive agents that remedy the destabilising effects of rapid change, yet they can also be perverted into a dark influence working to misdirect the effect of global market forces. Galt presents history as a contest over the volatile substance of ‘story’, which his novels rhetorically disavow. His analysis of the law of unintended consequences is permeated by a dry sense of humour. Yet by The Entail, Scottish history has become a catalogue of tragic failures, as the changes wrought by improvement fracture the nation into incompatible alternatives.

Greenhouse Gas Emissions from the Petroleum Industry

2017 ◽  
pp. 213-241
Author(s):  
Lidia Hrnčević
Keyword(s):  
Greenhouse Gas ◽  
Global Climate ◽  
Petroleum Industry ◽  
Ghg Emissions ◽  
High Energy ◽  
Global Market ◽  
Special Focus ◽  
Global Industry ◽  
High Emission ◽  
The Impact

Greenhouse Gas (GHG) emissions occur, more or less, in all aspects of the petroleum industry's activities. Besides the direct emissions of some GHG, the petroleum industry is also characterised with high energy intensity usually followed by emissions of adverse gases, especially at old facilities, and also the products with high emission potential. Being the global industry and one of the major players on global market, the petroleum industry is also subjected to global regulatory provisions regarding GHG emissions. In this chapter, the impact of global climate change on the petroleum industry is discussed. The emissions from the petroleum industry are analysed with a special focus on greenhouse gases that occur in petroleum industry activities and types and sources of emissions from the petroleum industry activities. In addition, recommendations for estimation, monitoring, and reductions of GHG emissions from the petroleum industry are given.

AUSTRALIAN GTL CLEAN DIESEL: A STRATEGIC OPPORTUNITY FOR AUSTRALIA’S STRANDED GAS RESERVES

2002 ◽  
Vol 42 (2) ◽  
pp. 121
Author(s):  
W.G. Higgs ◽  
P.E. Prass
Keyword(s):  
Crude Oil ◽  
Petroleum Industry ◽  
Economic Benefits ◽  
Oil Refining ◽  
Clean Diesel ◽  
Market Opportunities ◽  
Gas Markets ◽  
Gas To Liquids ◽  
Gas Supply ◽  
Stranded Gas

Australia’s lack of gas supply infrastructure and market opportunities means that in the northwest of our nation more than 100 trillion cubic feet of gas remains uncommitted to customer contracts.Because of Western Australia’s relatively small domestic gas markets and the long transport distances to larger markets, the belief has been that only the LNG industry has the scale to monetise the large volumes of gas required to underpin greenfield developments and expansion of gas supply infrastructure.Changing fuel specifications around the world, combined with the limited opportunities for new LNG contracts, has renewed interest in gas-to-liquids (GTL) technology as an alternative to crude oil refining for a source of clean and efficient transport fuels. GTL is an exciting new market opportunity for Australian gas.Exploration interest in Australia appears to be waning. Declining opportunities for oil discoveries and the lack of markets for natural gas make investments in Australia’s upstream sector unattractive compared to other locations around the world.In addition, Australia has dwindling crude oil supplies and faces the prospect of increasing reliance on imported crude oil and refined products. An Australian GTL Clean Diesel industry can help overcome these hurdles by creating a designer blendstock and a valuable new GTL Clean Diesel export industry.A GTL Clean Diesel industry would not only help resolve many of Australia’s current upstream and downstream problems in the petroleum industry, but would also provide massive economic benefits to Australia.This paper will look not only at the making but also the marketing of this fuel of the future.

Financing LNG infrastructure using master limited partnerships

2016 ◽  
Vol 56 (2) ◽  
pp. 615
Author(s):  
Kenneth Wee
Keyword(s):  
Price Volatility ◽  
Investment Model ◽  
Key Factors ◽  
Resource Rent ◽  
The North ◽  
Oil Price Volatility ◽  
Petroleum Resource ◽  
Cost Efficient ◽  
Limited Partnerships ◽  
Mlp Model

In recent years, an unprecedented level of capital has been invested in developing Australia’s latest liquefied natural gas (LNG) projects, with several more still in the pipeline. In the wake of ever-increasing oil price volatility, and international competitiveness and uncertainty in the global financial markets, Australian LNG projects that are either under development or are being proposed continually face pressure to be more cost-efficient and value-accretive to their capital providers. The application of cutting-edge technology, such as floating LNG, together with more innovative financing strategies, are among the key factors that could provide more attractive project yields to make investing in new greenfield LNG projects more commercially viable. For many years, master limited partnerships (MLPs) have been used as a tax-effective financing vehicle in the North American energy and resources sector for funding the construction of gas infrastructure assets. This extended abstract explores the feasibility of holding Australian LNG infrastructure assets such as LNG pipelines and processing facilities within a MLP structure, including: how a typical MLP investment model would work in practice in the LNG sector; the fiscal treatment of a MLP and its impact on investor yield; the types of LNG assets that are appropriate for a MLP structure; the suitability of the MLP vehicle in the Australian context; commercial considerations in establishing and maintaining a MLP structure, including transactional costs and Australia’s unique Petroleum Resource Rent Tax regime; and, sustainability of the MLP model in the context of the current Australian and worldwide focus on fiscal accountability.

COMMONWEALTH PERSPECTIVE ON PETROLEUM TAXATION

1999 ◽  
Vol 39 (2) ◽  
pp. 126
Author(s):  
B. Layer
Keyword(s):  
Risk Premium ◽  
Petroleum Industry ◽  
Forward Rate ◽  
Gas Transfer ◽  
Development Activity ◽  
Resource Rent ◽  
Forward Rates ◽  
North West ◽  
Percentage Points

In 1997 the petroleum industry sought modifications to the petroleum resource rent tax (PRRT) regime which applies to all Commonwealth offshore areas except the North West Shelf Project area. Industry argued that the PRRT impeded deepwater exploration and development activity and the exploitation of large stranded gas deposits suitable for conversion to liquids such as LNG. Industry suggested that a more appropriate risk/reward balance in the tax structure could be achieved by providing a volume based PRRT exemption for projects located in water depth greater than 400 m and by increasing the uplift rates for unrealised losses. It was proposed that the risk premium for the general (development) expenditure carry forward rate be increased by five percentage points to the long term bond rate (LTRR) plus 10 percentage points. Another industry recommendation was that exploration expenditures incurred more than five years before the issue of a production license (PL), which currently attract the lower GDP factor rate (the five year rule), be uplifted at the long-term bond rate for the period prior to the five year mark and then rolled forward at LTBR plus 15 percentage points. In addition, industry asked that the reference date for the five year rule should be based on the application date for a PL and not the issue date. For integrated gas to liquid projects, industry requested clarification of the basis for valuing feedstock gas for determining gas liability.In response, the Commonwealth decided to adopt a gas transfer price (GTP) methodology based on a combination of established cost plus and net back formulas to be applied to the up and downstream stages of the project respectively. The difference in the price outcome of the two methods, the residual price, is split 50:50 to obtain the GTP. Details of how the residual price method will be applied are currently being finalised with a view to enacting legislation in 1999-2000. The Commonwealth also responded positively to the industry suggestion that the reference date of the five year rule be applied from the date of application for the PL on the proviso that the appropriate authority receives all information pertaining to a successful application. Recommended changes to the PRRT for deepwater areas and proposed increases to the carry forward rates of undeducted losses were rejected mainly on economic efficiency grounds.

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