The Australian Petroleum Production and Exploration Association will release the tax package it believes is needed to encourage more oil and gas exploration. The preferred tax package should be ready for release in October. APPEA Executive Director Barry Jones said the Australian government had to introduce tax incentives to promote oil exploration, particularly deepwater oil exploration, in an attempt to deal with Australia's declining oil reserves. "The rate at which expenditure is written down under the petroleum resource rent tax system has to be increased. There has to be a substantial increase for deepwater oil production," Jones said. "And there has got to be recognition of the fact it takes mega-billions of dollars to get a deep water production field off the ground and there's no income for the first few years."
He said the increased gas exports from fields such as Sunrise in the Timor Sea and Greater Gorgon off the coast of Western Australia would not cover the cost of increased petroleum product imports to cover the nation's oil production decline.
According to the Australian Geological Survey Organization, Australian crude oil output will fall away quickly by the end of the decade, declining 33 percent by 2005 and 50 percent by 2010 from last year's average 633,500 barrels per day.
APPEA will make a final decision at its annual general meeting on October 27 on the preferred tax package it wants introduced for the upstream oil and gas industry and will lobby the government to implement it.