Coalition promises “use it or lose it” offshore lease policy

The Federal Opposition disclosed a variety of resources and energy policies yesterday, including pushing gas and oil companies to “use it or lose it” to hang on to offshore leases.

Opposition resources spokesman Ian Macfarlane said he intends to convene with the resources companies and call on them to justify why they should hold on to their offshore oil and gas field leases.

“If the resource has been discovered and is not planned to supply a set of gas trains 10 or 20 years out, then we will want to know why the lease shouldn’t be handed back in and someone else be given the opportunity to develop it,” he said.

“I won’t name the leases because I don’t want to start the hares running but the companies that have them will know.”

He added he had anecdotal proof certain companies had leases but no development proposals. He intends to get his department to compile a report on retention licenses, which needs to be re-examined over the next three years.

The licence will not be renewed if they find no proposals to develop the fields, The Australian reported.

“I want to see every project that can be developed be developed,” he said.

“I’ll be removing red tape, green tape, carbon tax, mining tax and it will be worth nothing if companies sit on leases and say we will think about that next time around.”

The Abbott government would also drive the expansion of NSW’s coal seam gas sector. Macfarlane would make the NSW domestic gas matter one of his top three concerns, The Australian reported.

Macfarlane has already set a Christmas deadline to resolve the issue, saying it may already be three months overdue.

He labelled the condition urgent “beyond belief”.

“It’s a massive problem and it’s going to cost jobs from Newcastle to Wollongong if we don’t get it sorted,” he said.

“The only situation short-term is to get the CSG industry going well enough to supply the domestic demand, which is going to start to exceed supply in 2015 and 2016 when they start turning on the LNG trains in Gladstone.

The Coalition government and Macfarlane also promised to bring in an exploration development incentive.

Under the scheme, junior mining companies with no taxable income can pass eligible exploration expenses on to their shareholders.

A Minerals Council of Australia spokesman said the pledge showed the Coalition understood the importance of exploration.

“The MCA has regularly highlighted the tax asymmetry in the treatment of exploration expenses for companies with no taxable income.”

The Australian Tax Office will decide on a part of the costs that investors can claim as tax credits.

It is aimed at junior mining companies with no taxable income and will be capped at $100 million over the forward estimates.

Association of Mining and Exploration Companies head Simon Bennison recently told Australian Mining juniors are operating without support and said if this continues, the future of the industry is in jeopardy.

The Queensland government recently allocated $30 million for the Future Resources Program over three years.

Queensland Exploration Council chairman Dr Geoff Dickie said the funding indicates the government recognises that exploration needs a boost in Queensland.

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