Australia offshore sector slams A$0.48/b decommissioning levy  

Quantum Commodity Intelligence - Australia's offshore oil industry lobby has slammed government plans to  impose a levy on all of the country's offshore oil producers to cover the cost of decommissioning an offshore field, describing the move as "over the top" and "extreme", according to Australian media reports Tuesday.

"To slug an entire industry with (Australian) $0.48 per barrel (USD $0.38/b) and not put an end date on it is over the top," said Andrew McConville, chief executive of the Australian Petroleum Production and Exploration Association (APPEA).

The levy was announced in May, catching the industry by surprise but the details on the per barrel charge were not announced.

However, a discussion paper posted on the Department of Industry's web site on June 24 said a charge of A$0.48/b would be imposed.

The levy, to apply from July 1, is being imposed to cover the cost of removing facilities and rehabilitating the Laminaria-Corallina oil fields in the Timor Sea after the fields' owner, Northern Oil & Gas Australia (NOGA) collapsed in 2019.

"Any levy is unreasonable in any form, but one being so extreme will be a major disincentive for investment at a time when policy stability and certainty is critical," said McConville.

"This is a terrible precedent and could have serious repercussions to Australia's economy, to jobs and to our attractiveness as an investment destination when, as the global economy recovers, competition for investment capital will intensify.

Australia's offshore oil producers include Chevron Corp, Exxon Mobil Corp, Royal Dutch Shell, Inpex Corp, Eni, TotalEnergies, BHP Group, Woodside Petroleum and Santos.