Tax Relief Proposed for Junior Petro Co's.According to the South Australian Chamber of Mines and Energy (SACOME), Australia’s Petroleum Resources Rent Tax (PRRT) needs urgent attention and is currently leaving the state disadvantaged.
SACOME believes that since the inclusion of onshore operations to PRRT regulations designed for offshore projects, the lack of a high profit threshold tax is imposing heavily on the state’s junior companies.
The industry group is calling for oil and gas companies with profits below $50 million to be exempt from paying the PRRT, as is the case with the equivalent tax for the mining industry, the Mineral Resources Rent Tax (MRRT).
“Such a mechanism is currently provided to ensure vulnerable junior miners with low profits are protected from the effects of the MRRT, so it only seems fair that this mechanism be introduced for junior petroleum companies, where the cost per well can range between $10 to $14 million per well for unconventional projects,” SACOME chief executive Jason Kuchel said.
“In the Cooper Basin as well as other key onshore basins in South Australia, large oil and gas companies operate alongside junior companies, and the importance of the junior sector is critical to the further development of our oil and gas sector.”