Oil majors, Woodside seek to overturn planned Australian clean-up tax

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MELBOURNE — Woodside Petroleum mentioned on Friday it’s working with different corporations on a plan to switch a proposed Australian authorities levy that may make offshore producers pay for the clear up of an deserted oilfield within the Timor Sea.

The federal government shocked the trade in Could when it mentioned it might impose a levy from July 1 on all offshore oil and gasoline producers to cowl the price – estimated to be as excessive as A$1 billion ($723 million) – of eradicating amenities and cleansing up the realm across the deserted Laminaria-Corallina fields.

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World majors, led by Chevron Corp, Exxon Mobil Corp , and Royal Dutch Shell, voiced opposition to paying to rehabilitate a web site they’ve had nothing to do with and have lobbied the federal government to drop the levy.

Chevron and Shell deferred remark to Woodside on Friday. Exxon didn’t remark.

“Woodside is working with trade companions to current to authorities another proposal for the decommissioning of the Northern Endeavour,” a Woodside spokesperson informed Reuters on Friday, within the firm’s first public touch upon the plan.

The Northern Endeavour is the enormous floating manufacturing storage and offloading (FPSO) vessel on the Laminaria-Corallina oilfields within the Timor Sea that have been deserted when the fields’ proprietor, Northern Oil & Fuel Australia (NOGA), collapsed in 2019.

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Woodside, which additionally opposed the levy, got here beneath stress to take some accountability for the decommissioning as NOGA purchased a stake within the area from Woodside.

Woodside didn’t touch upon whether or not the choice plan would contain it dealing with the decommissioning of the Northern Endeavour, financed by an trade fund.

The trade’s foyer group, the Australian Petroleum Manufacturing and Exploration Affiliation (APPEA), mentioned it had known as on the federal government to discover methods to chop the prices of its present administration of the decommissioning undertaking and take into account different price restoration measures.

“APPEA has lengthy opposed a levy on numerous offshore oil and gasoline corporations for a undertaking they’ve by no means been concerned in, by no means benefitted from and as much as 3,500 kilometers away from their operations as it’s excessive and unreasonable,” APPEA Chief Government Andrew McConville mentioned in emailed feedback.

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The oil trade has been buoyed this yr by a powerful restoration within the oil value following a crash final yr triggered by the affect of the pandemic on gasoline demand.

Nevertheless, it’s nonetheless faces stress from buyers and environmental campaigners demanding a shift away from fossil gasoline power, which may hasten the closure of some oil and gasoline fields and convey on decommissioning prices sooner.

The Treasury Division didn’t touch upon any different proposal, and mentioned it has introduced a short lived levy “to make sure taxpayers aren’t left to pay for the decommissioning.”

The federal government plans to seek the advice of on draft laws earlier than the tip of the yr, a Treasury spokesperson mentioned. (Reporting by Sonali Paul; Enhancing by Tom Hogue, Gerry Doyle and Barbara Lewis)