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Wood Mackenzie comments on Australia Budget's impact on upstream sector

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Oilfield Technology,

Wood Mackenzie research analyst Shaun Brady has commented on the impact of Australia's Budget announcement on the upstream sector:

“The government has clearly underscored its continued commitment to a gas-fired recovery in this budget, which is good news for onshore players. The budget includes AUS$58.6 million for gas infrastructure projects, and AUS$173.6 million for road upgrades in the Northern Territory which will support exploration and appraisal activity in the frontier Beetaloo basin.

“The temporary decommissioning levy to be imposed on offshore producers to cover decommissioning costs for the Northern Endeavour and Laminaria/Corallina fields will provoke a strong response from the industry. The policy is still light on detail, with the exact costs and terms still to be negotiated between the government and industry. Depending on how the levy is designed, it is likely the bigger Australian producers will bear the brunt.

"What could be more concerning for producers will be the precedent this may set - will Australian producers be held to account in the future if another player encounters financial difficulties and can't meet its commitments?"

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