Australia Upstream Fiscal and Regulatory Guide

Pages: 31 Published: November 30, 2019 Report Code: GDGE0165UFR

Although the Commonwealth government has recently altered the PRRT with the reduction in the uplift rates for certain categories of expenditures in the oil and gas projects, further changes may follow. The Treasury is reviewing gas transfer pricing regulations, with its report expected by April 2020. In addition, as a result of the limited revenues generated by the PRRT to date, there has also been pressure to make broader changes to the upstream fiscal regime. Domestic gas requirements may pressure the Commonwealth government to introduce a domestic market obligation forcing gas producers to reserve some of the produced gas for the domestic market. Australia is presently the world’s second liquefied gas exporter, but it has high gas prices for households and manufacturers and a tight gas supply in eastern Australia, which in few years could experience gas shortages.

“Australia Upstream Fiscal and Regulatory Guide”, presents the essential information relating to the terms which govern investment into Australia’s upstream oil and gas sector. The report sets out in detail the contractual framework under which firms must operate in the industry, clearly defining factors affecting profitability and quantifying the state’s take from hydrocarbon production. Considering political, economic and industry specific variables, the report also analyses future trends for Australia’s upstream oil and gas investment climate.


Overview of current fiscal terms governing upstream oil and gas operations in Australia

Assessment of the current fiscal regime’s state take and attractiveness to investors

Charts illustrating the regime structure, and legal and institutional frameworks

Detail on legal framework and governing bodies administering the industry

Levels of upfront payments and taxation applicable to oil and gas production

Information on application of fiscal and regulatory terms to specific licenses

Outlook on future of fiscal and regulatory terms in Australia

Reasons to Buy

Understand the complex regulations and contractual requirements applicable to Australia’s upstream oil and gas sector

Evaluate factors determining profit levels in the industry

Identify potential regulatory issues facing investors in the country’s upstream sector

Utilize considered insight on future trends to inform decision-making

Table of Contents

1. Table of Contents

1.1. List of Tables

1.2. List of Figures

2. Regime Overview

2.1. Regime Overview ─ Royalty and Tax Agreements

2.2. Timeline

3. State Take Assessment

4. Key Fiscal Terms

4.1. Royalties, Bonuses, and Fees

4.1.1. Royalties (Onshore, Coastal Waters and North West Shelf Only)

4.1.2. Annual Rental Fees

4.2. Crude Oil Excise (Onshore, Coastal Waters, and North West Shelf Project Only)

4.3. Petroleum Resource Rent Tax

4.3.1. Rate and Application

4.3.2. Gas Transfer Price Methodology

4.3.3. Deductible Expenditure

4.4. Resource Rent Royalty (Barrow Island)

4.5. Direct Taxation

4.5.1. Company Tax

4.5.2. Deductions and Depreciation

4.5.3. Withholding Tax

4.6. Indirect Taxation

4.6.1. Goods and Services Tax

4.6.2. Customs Duties

4.7. License Terms

4.7.1. Duration and Relinquishments

4.7.2. Work Obligation

5. Regulation and Licensing

5.1. Legal Framework

5.1.1. Governing Law

5.1.2. Contract Type

5.1.3. Title to Hydrocarbons

5.2. Institutional Framework

5.2.1. Licensing Authority

5.2.2. Regulatory Agency

5.3. Licensing Process

5.3.1. Offshore Areas

5.3.2. Onshore Areas and Coastal Waters

5.3.3. Native Title

5.3.4. Application Fees

5.4. Foreign Investment Screening

5.5. Restrictions on Hydraulic Fracturing

6. Appendix

6.1. References

6.2. Contact Us

6.3. Disclaimer

List of Tables

1.1. List of Tables

Table 1: Regime Overview

Table 2: Australia, Key Events Since Year 2000

Table 3: Australia, Onshore, Coastal Waters and North West Shelf, Royalty Rates (%)

Table 4: Australia, Annual Rental Fees (AUD)

Table 5: Australia – Onshore, Coastal Waters and North West Shelf, Crude Oil Excise Rates (%)

Table 6: Australia, Petroleum Resource Rent Tax Expenditure Classes and Uplift Rates

Table 7: Australia, Reduced CIT for Small and Medium Businesses (%), 2018

Table 8: Australia, Statutory Effective Life Caps – Petroleum Sector (years)

Table 9: Australia, Withholding Tax Rates (%)

Table 10: Australia – Onshore and Coastal Waters, Maximum Initial Term Duration for Petroleum Licenses (years)

Table 11: Australia, Governing Law by State/Territory

Table 12: Australia, State/Territory Licensing Authorities

Table 13: References

List of Figures

1.2. List of Figures

Figure 1: Regime Flow Chart

Figure 2: Australia, Indicative NPV10/boe, IRR and State Take Comparison, Regional

Figure 3: Australia, Legal Framework

Figure 4: Australia, Institutional Framework


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