CSG tax deal close
EXPECTATIONS are rife that the federal government may be close to a deal with Australia’s burgeoning coal seam gas sector on a resources super tax compromise.
According to the Australian Financial Review, Prime Minister Julia Gillard could announce a deal to allow CSG projects to be taxed under an adapted version of the petroleum resource rent tax (PRRT) as early as today.
The PRRT, which has governed Australia’s offshore oil and gas projects since the 1980s, carries the same 40% tax rate as the proposed RSPT, but has concessions including a reduction on the impact of the tax on existing projects, an increase in the level where the tax would apply and an immediate write-off on new capital expenditure.
Macquarie Research analyst Adrian Wood told the paper a PRRT for the CSG sector made “complete sense” as it was well understood not just by oil and gas companies but also by existing and potential customers.
“It’s definitely a workable compromise,” Wood said. “Buyers understand and know the PRRT; it’s an established regime so you don’t have to wait for the dust to settle and iron out the details.”
Meanwhile the Australian reported Woodside’s North West Shelf gas venture would be included in the CSG deal.
The NWS is not subject to the PRRT and currently works under a 12.5% royalty regime and 30% excise tax.
The news of a deal comes as Gillard races against the clock to reach an agreement with the resources industry on the RSPT before miners restart a punishing advertising campaign on Friday.
Wednesday, 30 June 2010
PetroleumNews.net
http://www.petroleumnews.net/StoryView.asp?StoryID=1137308
