The New Resources Super Profits Tax: Will it Affect Australia's CSG Industry's Attractiveness?

The New Resources Super Profits Tax: Will it Affect Australia's CSG Industry’s Attractiveness?

Summary

Australia, in the recent years, has cultivated a Coal Seam Gas (CSG) industry in Queensland resulting in the development of a few large companies such as Queensland Gas Corporation (QGC) and Arrow Energy. The Australian CSG industry has become an important contributor to the nation’s energy business with ample gas resources and improved drilling techniques. Various major players such as Royal Dutch Shell, PetroChina and ConocoPhillips have been making significant investments in the Australian CSG industry to convert CSG into LNG for export to regions such as India and China, where energy demand has been soaring in recent years. Australia’s Petroleum Resource Rent Tax (PRRT) has been applicable to the CSG industry with positive implications for the players and the investors in the industry. However, the introduction of the new proposed Resources Super-Profit Tax (RSPT) can, to some extent, affect the CSG industry in Australia as compared to its high attractiveness earlier. The investment in the CSG industry can become less attractive with the introduction of the RSPT law.

Scope

• Analyses the impact of the proposed new RSPT law on the growth of the Australian CSG industry
• Discusses the potentiality and attractiveness of the CSG industry in Australia
• Discusses the relativity between the existing PRRT law and the proposed RSPT law
• Discusses the restrain created by the major oil and gas companies operating in the CGS segment in Australia.

Reasons to buy

• Understand the implications od the new RSPT law on the Australian CSG industry
• Gain understanding of the impact of the new law on the E&P investments in the Austrlian CSG industry.
• Gain understanding of the Government's perspective of implementing the new law.