Australia Upstream Fiscal and Regulatory Guide - 2024
Summary
Australia's upstream oil and gas sector operates under a multi-layer fiscal and regulatory regime characterized by both federal and state-level regulations. Onshore operations and those within three miles of the shore are managed by state/territory governments, while offshore activities fall under Commonwealth jurisdiction. Key fiscal components include a federal corporate income tax of 30%, royalties ranging from 10% to 12.5% for onshore and certain coastal waters, and the Petroleum Resource Rent Tax (PRRT) at 40% for onshore and integrated LNG projects. Offshore projects benefit from more favorable tax conditions, with significant allowances for cost recovery and capital uplift incentives. The regime is structured to balance encouraging investment with ensuring a fair return to the state, reflected in regime scores that indicate a moderate to high rate of return under various price and cost conditions .
Regulatory oversight is shared among several bodies, including the National Offshore Petroleum Titles Administrator (NOPTA) and the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) for offshore operations. Licensing authority varies by jurisdiction, with state/territory departments responsible for onshore and coastal water areas. The legislative framework is similarly diverse, with the Offshore Petroleum and Greenhouse Gas Storage Act of 2006 governing offshore activities, and various state laws regulating onshore operations. Recent regulatory adjustments have focused on optimizing the PRRT to generate higher and earlier tax revenues from LNG projects, amidst ongoing debates about domestic gas policies and their impact on international investment and local market dynamics.
Scope
- 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
- Gain insights into the regulatory landscape: Get a comprehensive overview of the fiscal and regulatory environment.
- Understand the impact on business operations: Learn how the regulatory burden affects the cost of doing business.
- Assess risks and challenges: Identify the potential risks and challenges associated with operating in the country.
- 1 Executive Summary
- 1.1 Regime Overview - Concession Agreements
- 1.2 Timeline
- 2 State Take Assessment
- 3 Key Fiscal Terms - Concession Agreements
- 3.1 Bonuses and Fees
- 3.2 Royalties and Excises
- 3.3 Petroleum Resource Rent Tax
- 3.4 Direct Taxation
- 3.5 Indirect Taxation
- 4 Regulation and Licensing
- 4.1 Legal Framework
- 4.2 Institutional Framework
- 4.3 License Terms
- 4.4 Licensing process
- 4.5 Foreign Investment Screening
- 4.6 Restrictions on Hydraulic Fracturing
- 5 Appendix
- 5.1 References
- About GlobalData
- Contact Us
- List of Tables
- Table 1: Regime Overview: Concession Agreement
- Table 2: Regime Overview: Concession Agreement
- Table 3: Australia, Key Events Since Year 2000
- Table 4: Australia, Annual Rental Fees (AUD)
- Table 5: Australia, Onshore, Coastal Waters and North West Shelf, Royalty Rates (%)
- Table 6: Australia, Onshore, Coastal Waters and North West Shelf, Crude Oil Excise Rates (%)
- Table 7: Australia, Petroleum Resource Rent Tax Expenditure Classes and Uplift Rates
- Table 8: Australia, Reduced CIT for Small and Medium Businesses (%), 2018
- Table 9: Australia, Statutory Effective Life Caps - Petroleum Sector (years)
- Table 10: Australia, Withholding Tax Rates (%)
- Table 11: Australia, Reduced CIT for Small and Medium Businesses (%), 2018
- Table 12: Australia, Australia, State/Territory Licensing Authorities
- Table 13: Australia, Reduced CIT for Small and Medium Businesses (%), 2018
- Table 14: References
- List of Figures
- Figure 1: Regime Flow Chart - Concession Agreements
- Figure 2: Australia, Indicative NPV10/boe, IRR (%). Project returns by Regime and Resource Type
- Figure 3: Australia, State Take Comparison. State-take by Regime and Resource Type
- Figure 4: Australia, State Take, Price Sensitivity.
- Figure 5: Australia, State Take Cost Sensitivity.
- Figure 6: Regulatory impact on fiscal take and IRR
- Figure 7: Regulatory impact on NPV per boe
- Figure 8: Australia, Legal Framework.
- Figure 9: Australia, Institutional Framework
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