TAXATION CONSIDERATIONS FOR AN AUSTRALIAN COMPANY CARRYING ON PETROLEUM EXPLORATION AND DEVELOPMENT IN PAPUA NEW GUINEA

1987 ◽  
Vol 27 (1) ◽  
pp. 35
Author(s):  
Peter A. Wilson
Keyword(s):  
Papua New Guinea ◽  
New Guinea ◽  
Petroleum Exploration ◽  
Credit System ◽  
Tax Assessment ◽  
Full Credit ◽  
Financial Benefits ◽  
The Many ◽  
Full Consideration ◽  
Australian Company

The Australian Income Tax Assessment Act, 19S6 (the Act) has recently been amended by the inclusion of a full foreign tax credit system (FTCS) to replace the partial and exempt system previously existing. In view of this change, and the increase in Australian participation in Papua New Guinea (PNG), petroleum exploration re-consideration of conventional corporate structuring into PNG is warranted.In considering the form of a tax effective structuring, it will be necessary to consider matters such as the following:obtaining an appropriate mix of debt and equity with the debt provided in a form so that the service fee will not qualify as interest for FTCS purposes;structuring the PNG operations through a subsidiary incorporated out of Australia, e.g. PNG;ensuring that the shareholding in the company is appropriate to enable a full credit for 'underlying taxes'; andobtain any 'tax sparing relief available due to the PNG treatment of interest and dividends.These aspects and the many other relevant planning points require consideration of complex legislation. In the absence of direct legal precedent, proper and full consideration is warranted if all intended financial benefits are to be obtained.

A REVIEW OF THE PETROLEUM SEARCH SUBSIDY ACTS

1974 ◽  
Vol 14 (2) ◽  
pp. 17
Author(s):  
L. W. Williams
Keyword(s):  
Papua New Guinea ◽  
Western Australia ◽  
Significant Contribution ◽  
Unit Cost ◽  
New Guinea ◽  
Petroleum Exploration ◽  
Minimum Standard ◽  
Level Of Activity ◽  
High Level ◽  
Performance Payments

THE FIRST of the Petroleum Search Subsidy Acts was introduced in 1957, when the level of petroleum exploration in Australia was very low. The types of operation eligible for subsidy, and the subsidy rates, have been altered from time to time in recognition of changing circumstances. The present Act is not to be extended and only covers operations which will be completed by 30 June 1974.The activity in various areas in Australia and Papua New Guinea has fluctuated during the period that the Acts have been in force. The early, relatively high, level of activity in Queensland was not maintained, and other areas, such as Western Australia, received increased attention. The percentage of subsidy funds going to operations in offshore areas has changed markedly. The Acts have provided assistance to petroleum exploration in Australia in several ways. In the early days of the Act, when little expertise on petroleum exploration was available in Australia, standards were set for the field operations and reporting, and the operations were closely supervised, ensuring a reasonable minimum standard of performance. Payments under the Act have assisted companies, particularly those with limited funds, to engage in exploration and have also encouraged all companies to explore in Australia by reducing the effective unit cost of exploration. The information which has become available through the operation of the Act has assisted exploration by enabling exploration decisions to be based on the results of most of the exploration which has been carried out in Australia.The Petroleum Search Subsidy Acts, which will cost a total of some 7150 million, have made a very useful and significant contribution to petroleum exploration in Australia and Papua New Guinea over a period of 17 years.

Local and global benefits of subsidizing tropical forest conservation

2002 ◽  
Vol 7 (2) ◽  
pp. 325-340 ◽  
Author(s):  
Colin Hunt
Keyword(s):  
Tropical Forest ◽  
Papua New Guinea ◽  
Forest Conservation ◽  
New Guinea ◽  
Economic Benefits ◽  
Environmental Benefits ◽  
Small Scale ◽  
Economic Modelling ◽  
Tropical Forest Conservation ◽  
Financial Benefits

The article describes and quantifies the financial benefits of small-scale community forestry, conducted on an ecologically sustainable basis—‘eco-forestry’, by customary landowners in Papua New Guinea. Through economic modelling the article also attempts to quantify the global benefits generated. Eco-forestry is subsidized by donors directly and through NGOs in its setting up and certification. Financial modelling suggests that, with a subsidy, eco-forestry is capable of generating a return to landowners that is comparable to industrial logging. While the return to logging followed by conversion to agriculture is much more attractive than eco-forestry, agriculture is an option available only in some locations. Economic modelling finds that the external economic benefits emanating from tropical forest conservation that replaces logging in Papua New Guinea are far greater in scale than the financial benefits to landowners. However, the lack of reliable data on the environmental benefits of forest conservation means that economic analysis is somewhat inconclusive. The need for further research to quantify environmental benefits is thus highlighted. The subsidization of forest conservation directly, instead of indirectly through small-scale forestry, is investigated and found to generate a similar level of economic benefits to eco-forestry. However, the cost of direct subsidization is greater. Moreover, mechanisms for direct subsidy are undeveloped in Papua New Guinea. Donors may prefer to continue to subsidize small-scale forestry where it replaces logging because of its apparent conservation and side benefits and because it is operational, while at the same time exploring and extending cost-effective models of direct conservation that have the advantage over eco-forestry of being applicable in more remote areas. Compared with industrial logging, eco-forestry contributes little to consolidated revenue. Therefore it is to be expected that eco-forestry will meet government resistance if it makes significant inroads into the allocation of logging concessions.

PETROLEUM EXPLORATION OUTLOOK FOR 1968

1968 ◽  
Vol 8 (2) ◽  
pp. 22
Author(s):  
L. W. Williams
Keyword(s):  
Papua New Guinea ◽  
New Guinea ◽  
Petroleum Exploration ◽  
Offshore Drilling ◽  
Seismic Surveys

To change is expected in the trend which has developed over the last few years towards increasing interest in offshore areas, and in Papua-New Guinea.The overall expenditure on petroleum exploration in Australia and Papua-New Guinea during 1968 will be approximately the same as in 1967.Because of the greater expense which will be incurred through the increased use of offshore drilling vessels, a reduction in other exploration activities is expected. This reduction will occur mainly in geophysical operations and the biggest reduction will be in seismic surveys on land.

The rebirth of Papua New Guinea

2016 ◽  
Vol 56 (2) ◽  
pp. 578
Author(s):  
John Warburton ◽  
Keiran Wulff
Keyword(s):  
Papua New Guinea ◽  
Large Scale ◽  
New Guinea ◽  
Petroleum Exploration ◽  
Size Distributions ◽  
Regional Study ◽  
Risk Ranking ◽  
Development Data ◽  
Recoverable Resources ◽  
Giant Fields

Gas was first discovered by drilling activity in Papua New Guinea in 1956. Nevertheless it was almost 60 years later when the Exxon-operated PNG LNG Project became the first large-scale commercialisation of the country’s prolific gas resources, with export of the first LNG shipment in May 2014. The proven fluvial-deltaic Late Jurassic, early Cretaceous and Tertiary carbonate reservoirs are prolific petroleum producers. When combined with the high-quality liquid-rich nature of the gas and the onshore location, this has resulted in PNG’s LNG projects being some of the lowest cost and most profitable LNG projects globally. The success of the PNG LNG Project along with the substantial identified existing and yet-to-find gas resources has resulted in a recent resurgence of exploration interest in PNG as companies look to expand and capitalise on the country’s developing position as a globally significant LNG supplier. In 2015 Oil Search undertook a whole of country review using its extensive database and in-country knowledge. This study incorporated all well, seismic, surface, remote sensing, production and development data, and has resulted in a detailed understanding of the play distribution and risk ranking, and importantly delineated a number of potentially material new play types in the country. Approximately 4.8 billion barrels of oil equivalent recoverable resources (2P and 2C) have been discovered in PNG to date, of which approximately 85% is gas. The countrywide regional study and common risk segment analysis by Oil Search (2015) established that PNG potentially contains an additional seven billion barrels of oil equivalent resource still to be discovered. The majority of this volume is expected to be gas, estimated to be in the order of 40 trillion cubic feet and 550 million barrels of undiscovered prospective resources. Oil Search has been active in all of PNG’s known petroleum basins since 1929 and built a substantial database. Pool-size distributions and a countrywide prospects and leads inventory suggest discovery of new giant fields is likely and of sufficient scale to support future LNG projects. Six sub-basins contain proven petroleum plays that are predicted to extend into under-explored areas. These areas represent the future petroleum exploration frontier in PNG.

scholarly journals Analysis of Mechanisms for Sustainable Land Taxation in Lae City, Papua New Guinea

2020 ◽  
Vol 3 (3) ◽  
pp. p38
Author(s):  
Jeffrey Petrus ◽  
Jacob A. Babarinde ◽  
Lepani Karigawa
Keyword(s):  
Papua New Guinea ◽  
New Guinea ◽  
P Value ◽  
Foreseeable Future ◽  
Chi Square ◽  
Land Taxation ◽  
Tax Assessment ◽  
Chi Square Test ◽  
Taxation System

Following severe criticisms against perceived inefficiency and unfairness of land taxation system in Papua New Guinea, this paper appraises four mechanisms used for land tax assessment and tax collection in the country. The mechanisms investigated as part of a larger study are validity of previous valuation roll, determination of unimproved land value, professional acceptability of the valuation methods used, and whether planning approval had been secured for the improvements on land. The study is based on a questionnaire survey of 150 respondents, including state land leaseholders and officials of the Lands Department at Lae Municipality and the City’s Internal Revenue Commission. The hypothesis tested yields a Chi-Square Test value of 8.872 and a Probability Value (P Value) of 0.75 (75%), which is statistically significant at 0.01 level. These findings indicate that the Lae City Municipality has 75% chances of becoming sustainable in the foreseeable future, particularly if the recommendations made are thoughtfully implemented.

CAPITAL GAINS TAX — ASPECTS OF CERTAIN FINANCING TRANSACTIONS

1988 ◽  
Vol 28 (1) ◽  
pp. 382
Author(s):  
Peter A. Wilson
Keyword(s):  
Income Tax ◽  
Capital Gains ◽  
Petroleum Exploration ◽  
Capital Gains Tax ◽  
Additional Information ◽  
Tax Assessment ◽  
Net Profit ◽  
Petroleum Companies ◽  
Petroleum Company ◽  
Full Consideration

The Australian Income Tax Assessment Act, 1936 (the Act) has recently been amended by the inclusion of a full capital gains tax system.This system is particularly applicable to various aspects of financing transactions into which petroleum exploration and development companies may enter.In the light of recent changes to the means by which petroleum companies can access the capital markets, it becomes necessary to consider these issues. This paper is designed to provide petroleum company executives with additional information on the capital gains tax aspects of:creating royalty, net profit interests and production payments;conventional security management matters;bankruptcy/liquidation matters;allotment of ordinary and preference share issues;allotment of convertible notes;drawing down of conventional loans; andgroup reorganisations.The paper also sets out some recommendations for amendments to the Act designed to correct capital gains driven financing problems.These aspects and many other relevant planning points require consideration of complex legislation. In the absence of direct legal precedent, proper and full consideration is warranted if all intended financial problems are to be firstly, recognised and secondly, to the extent possible, overcome.

New Tectonic Reconstructions of New Guinea Derived from Biostratigraphy and Geochronology

2020 ◽  
Author(s):  
D., P. Gold
Keyword(s):  
Papua New Guinea ◽  
New Caledonia ◽  
New Guinea ◽  
Petroleum Exploration ◽  
Rift System ◽  
Zircon Age ◽  
Eastern Australia ◽  
North Eastern ◽  
West Papua ◽  
Tectonic Reconstructions

Biostratigraphic data from exploration wells in Papua, West Papua of Indonesia, Papua New Guinea and Australia were reviewed, revised and updated using modern stratigraphic interpretations. Revised stratigraphic interpretations were combined with zircon U-Pb geochronologic data to produce new tectonic reconstructions of the Indonesian provinces of West Papua and Papua. Zircon U-Pb geochronologic data used in this study include new results from the Papuan Peninsula, combined with existing datasets from West Papua, Papua New Guinea, eastern Australia and New Caledonia. Supplementary geochronologic data were used to provide independent validation of the biostratigraphic data. Findings from a compilation of biostratigraphic and zircon age data provide a framework to produce new tectonic models for the origin of New Guinea’s terranes. Two hypotheses are presented to explain observations from the biostratigraphic and geochronologic data. The ‘Allochthonous Terrane’ Model suggests that many of the terranes are allochthonous in nature and may have been derived from eastern Australia. The ‘Extended Rift’ Model suggests that the New Guinea Terranes may have been separated from north-eastern Australia by an elongate rift system far more extensive than previously described. These new tectonic models are essential for our geological understanding of the regional and can be used to drive successful petroleum exploration in this frontier area.

PETROLEUM EXPLORATION ACTIVITY IN AUSTRALIA AND PAPUA NEW GUINEA 1972-1973

1973 ◽  
Vol 13 (2) ◽  
pp. 17
Author(s):  
E. R. Smith
Keyword(s):  
Natural Gas ◽  
Papua New Guinea ◽  
New Guinea ◽  
Oil Field ◽  
Petroleum Exploration ◽  
Gas Fields ◽  
Increased Activity ◽  
Exploration Activity ◽  
Cooper Basin

A highlight of 1972 has been the continued success on the Northwest Shelf where it has become apparent that the reserves of natural gas are very large. There have also been two promising oil discoveries in this area.Significant new gas fields were discovered in the Cooper Basin, which have finally assured sufficient reserves for the Sydney market. However the development of the Tirrawarra oil field has been disappointing.Petroleum exploration activity in Australia and Papua New Guinea improved slightly during 1972, mainly because of increased activity in offshore areas. It is likely that this trend will continue through 1973.

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