Aussie energy minister proposes retention lease system reforms
Australian Resources and Energy Minister Martin Ferguson released a discussion paper on his proposals to reform the country’s retention lease system.
MELBOURNE, June 16 -- Australian Resources and Energy Minister Martin Ferguson released a discussion paper on his proposals to reform the country’s retention lease system.
One of the proposals includes strengthening the “use-it-or-lose-it” provisions, where the government will no longer tolerate companies “stranding” Australian discoveries by branding them subcommercial while they turn their resources and attention to developing fields overseas.
Ferguson says he and his department are determined to rigorously apply the commerciality test to ensure gas fields in particular are developed at the earliest possible time.
“Australia’s political stability can mean our resources are put to the back of the queue in terms of development planning,” Ferguson said. “Companies chose to get in and out of nations with greater sovereign risk, knowing that their Australian titles can be warehoused and kept for a rainy day. However, our economic strength and political stability should not be allowed to continue to work to Australia’s detriment,” he said.
The retention lease program was first introduced in 1985. There are now 40% of Australian titles held as retention leases. This amounts to 46 5-year retention leases, 32 of them off the coast of Western Australia.