last paragraph especially interesting for oil investors.
Oil giants told: use fields or lose them
Matthew Franklin, Chief political correspondent June 13, 2009 Article from: The Australian
MULTINATIONAL oil giants face being stripped of their leases to develop Australian oil and gas fields if they delay development under a toughened use-it-or-lose-it regime aimed at boosting jobs.
Resources Minister Martin Ferguson said yesterday he would no longer tolerate companies "stranding" Australian assets by sitting on leases for years for their commercial convenience.
In future, he said, he would seize undeveloped leases and offer them to companies prepared to develop them for production, creating jobs and generating government revenue to help return the national budget to surplus.
Mr Ferguson yesterday released a discussion paper floating proposals for reform of the retention lease system, under which companies that discover oil and gas fields are granted renewable five-year leases, allowing them to delay production until they deem the projects viable.
With 46 such leases in existence, the paper proposes strict conditions under which leaseholders must demonstrate attempts to develop resources or at least find markets.
Arguing that the current system does not pay enough heed to the national interest, Mr Ferguson said: "I've decided to send a message that in the discussion paper the government is serious about use-it-or-lose-it."
He would "no longer tolerate oil companies sitting on assets" that were commercially viable.
"We will not accept that our natural assets are stranded while oil and gas is developed elsewhere in the world," Mr Ferguson said.
He expected a mixed industry response. Big international leaseholders would probably be concerned, but middle-sized players keen to develop business could be supportive.
He would create a process to enable companies to meet conditions for development.
"If they don't, then I put it back on the market," he said.
Retention leases were introduced in 1985 for explorers that found an oil and gas deposit that was not, at the time, commercially viable.
Fifty-eight such leases have been granted and 46 are currently in place, mostly off Western Australia.
In 1990, less than 4 per cent of offshore gas titles were held under retention leases, but by 2000, the figure had grown to 29 per cent.
Australian Petroleum Production and Exploration Association chief executive Belinda Robinson said the retention lease framework was "of critical importance" because, as the government had acknowledged, it took account of commercial imperatives and the need to efficiently develop resources.
"The industry does not see these as mutually exclusive and looks forward to addressing the issues raised, and proposals made, in the discussion paper," Ms Robinson said.
Australian Pipeline Industry Association chief executive Cheryl Cartwright said her organisation welcomed any move to increase the use of natural gas. "This is going to be increasingly important as we move to a carbon-constrained future."
Mr Ferguson said many international companies failed to develop leases, because they saw Australia as a safe haven with no sovereign risk, meaning they could develop resources in riskier nations and save their leases in Australia.
The government had to act in the national interest, particularly because the oil and gas sector was destined to be the major driver of economic growth during recovery from the recession, he said.
My comments;
This from Cougars latest' "Low cost supplier of syngas for electricity and petrochemicals production".
I know we don`t mention GTL alot, but it would make sense that Cougar be more agressive in this field.
Cheers
CXY Price at posting:
11.5¢ Sentiment: LT Buy Disclosure: Held
