A REVIEW OF THE PETROLEUM SEARCH SUBSIDY ACTS

Abstract

THE FIRST of the Petroleum Search Subsidy Acts was introduced in 1957, when the level of petroleum exploration in Australia was very low. The types of operation eligible for subsidy, and the subsidy rates, have been altered from time to time in recognition of changing circumstances. The present Act is not to be extended and only covers operations which will be completed by 30 June 1974.

The activity in various areas in Australia and Papua New Guinea has fluctuated during the period that the Acts have been in force. The early, relatively high, level of activity in Queensland was not maintained, and other areas, such as Western Australia, received increased attention. The percentage of subsidy funds going to operations in offshore areas has changed markedly.

The Acts have provided assistance to petroleum exploration in Australia in several ways. In the early days of the Act, when little expertise on petroleum exploration was available in Australia, standards were set for the field operations and reporting, and the operations were closely supervised, ensuring a reasonable minimum standard of performance. Payments under the Act have assisted companies, particularly those with limited funds, to engage in exploration and have also encouraged all companies to explore in Australia by reducing the effective unit cost of exploration. The information which has become available through the operation of the Act has assisted exploration by enabling exploration decisions to be based on the results of most of the exploration which has been carried out in Australia.

The Petroleum Search Subsidy Acts, which will cost a total of some 7150 million, have made a very useful and significant contribution to petroleum exploration in Australia and Papua New Guinea over a period of 17 years.