If Norwegian company Equinor is given permission to drill for oil in the Great Australian Bight, it will likely pay the Norwegian Government more than it will pay in Australian Government taxes and up to 27 times more than they will pay to the South Australian Government, a new report from The Australia Institute has revealed.
Modelling based on industry projections of basin wide oil reserves has shown the Norwegian Government would receive estimated profits (in net present terms) of $8.1 billion if Equinor were to develop the base case scenario. The South Australian Government would receive just $0.3 billion across the 40 years of the project in the same scenario, and the Australian Government would receive $7.4 billion (around $700m less than the Norwegian Government).
“Australia, and especially South Australia, is getting a dud deal when it comes to drilling in the Bight,” said Noah Schultz-Byard, Director of The Australia Institute, South Australia.
“The tax that the South Australian Government would receive from drilling in the Bight is a mere pittance, at one tenth of one per cent of its total tax revenue. In return South Australians are being asked to put some of their most important environmental and economic assets at risk for the next 40 years.
“No matter how you cut it, this project just doesn’t stack up for Australia. Foreign owned oil companies are lining up to come into our precious marine environment, put it at risk and then make off with the vast majority of the financial gains.
“Areas of such extraordinary ecological and environmental significance as the Great Australian Bight are priceless, but for some reason our Governments are trying to give them away to foreign oil companies almost for free.
“It is also concerning to see that the miniscule amount of tax that might actually be paid in Australia will take many decades to materialise, with company taxes not being payed until 2033 and petroleum taxes until sometime in the 2040s.
“Drilling for oil in the Great Australian Bight is undoubtedly a risky proposition. Perhaps the only safe bet is the fact that the Australian public will receive very little benefit from the project.”
The full report, written by Rod Campbell and Tony Shields, is available here