Australia’s new leader plans to unshackle the country’s oil and gas industry after a decade of falling production and rising imports.
Conservative-leaning Tony Abbott was elected Saturday after campaigning on a promise to end the controversial carbon tax.
That plan helped his Liberal Party sweep into office over the Labor Party for the first time since 2007.
The carbon tax has been a drag on Australia’s oil and gas industry. In April, local producer Santos Ltd. suffered an earnings hit after it paid US$32.6 million in carbon-related costs for the half-year period as part of a total tax bill of US$173.8 million.
Instead of the carbon tax, Abbott has proposed a ‘Direct Action Plan’ — funding that will go directly to companies to help them lower emissions.
Australia produced 484,000 barrels of crude or equivalents per day (bbl/d) in 2012, of which half was crude oil and a quarter was condensates, followed by liquified petroleum gas.
Production peaked in 2000 at 828,000 bbl/d and has declined since then, due mainly to maturation of the fields.
Australia’s biggest home-grown producers are Santos and Woodside Petroleum.
Chevron is the largest foreign oil producer at about 100,000 barrels per day.
Shell, ExxonMobil, ConocoPhillips, Japex, Total and Apache are also there.
New production coming on line before 2020 isn’t expected to offset declines overall.
Australia’s energy demand outstrips its production. In 2012, net crude imports were 234,000 bbl/d and net product imports were 294,000 bbl/d.
Abbott has also said his government will cut so-called green tape on approvals for coal seam gas projects.
He wants to reduce bureaucratic duplication through a single-window environmental approval process ‘that sets high standards, makes swift decisions and delivers certain outcomes.’
Oil and gas groups have said the 1,500 state and federal regulations for approving new projects are blocking investment.
In June, a new federal law went into effect giving the government the right to impose conditions on coal seam gas projects based on possible impact on water resources.