Australia Upstream Fiscal and Regulatory Guide - 2024

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

Reasons to Buy

• 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.