By Ben Sharples
July 2 (Bloomberg) — Royal Dutch Shell Plc, among companies planning more than $40 billion of investment in Queensland gas projects, said Australias revised resources tax offers the appropriate benefits for the public and companies.
Prime Minister Julia Gillard, 48, reached a pact with mining companies on the tax proposals, ending a dispute that cost her predecessor Kevin Rudd his job. As part of the change, the 26-year-old Petroleum Resource Rent Tax will be extended to cover onshore as well as offshore oil and gas projects.
The petroleum tax is a regime under which the oil and gas industry has been operating since the 1980s, Ann Pickard, Shell Australia chairman and executive vice president for oil and gas exploration and production, said in an e-mailed statement. It strikes a balance between returns on natural resources for Australians and for companies that develop them.
BG Group Plc and Santos Ltd. are due this year to make final decisions on whether to build projects in Queensland that will convert gas extracted from coal seams into liquefied natural gas. The change keeps a 2010 development decision on- track for its gas project, BG said in a separate statement.
Fiscal certainty will allow BG and Santos to proceed with final development decisions on their projects, Nik Burns, an analyst at RBS Morgans in Melbourne, said in an e-mailed response to questions. There are still a number of issues we await clarity on, such as the payment of state royalties and transitional arrangements for existing projects.
Treated Equally
Santos, which has declined 13 percent since the start of the year, dropped 14 cents, or 1.1 percent, to A$12.22 in Sydney. That compares with a 0.3 percent increase in the benchmark S&P/ASX 200 Index. Origin, which plans an LNG venture with ConocoPhillips, rose 1.4 percent to A$14.83.
Weve argued since the start that all oil and gas companies, whether they are onshore or offshore, needed to be treated equally, Santos spokesman Matt Doman said by phone from Adelaide. Thats been achieved, so we welcome that.
The tax reforms will apply from July 1, 2012, Gillard said in a joint statement with Treasurer Wayne Swan and Resources Minister Martin Ferguson.
The government exempted most commodities, raised the threshold and cut the tax to 30 percent on coal and iron ore earnings, compared with a previous plan to collect 40 percent of all resource profits.
Under the petroleum tax, levied at 40 percent, money spent on exploration, development and production is deductible and the scheme doesnt take effect until revenue exceeds costs.
Full-Steam Ahead
This is great news for Queensland and the Queensland economy, the states, Premier Anna Bligh, said in an e-mailed statement. The LNG projects proposed for development at the port of Gladstone can now move full steam ahead, she said.
Coal-seam gas is mostly methane found on the surface of coal. The gas can be extracted when pressure on the seams is reduced, usually by removing water. LNG is natural gas chilled to liquid form for transport by ship to destinations not connected by pipeline.
While the change is an improvement on the original proposal, Australian Petroleum Production and Exploration Association Chief Executive Belinda Robinson said its not clear how smaller businesses will be affected.
Australias oil and gas sector, however, goes beyond large companies and includes many small explorers and producers who will be struggling to see how this reform will not lead to them being worse off, Robinson said in a statement posted on the lobby groups website.
More than A$50 billion ($42 billion) of spending is planned for the Queensland coal-seam gas industry, which is expected to generate 20,000 jobs, Santos Chairman Peter Coates said May 6.
Deutsche Bank AG estimates the development by Santos with partner Petroliam Nasional Bhd. of two processing plants with a capacity to export 7.2 million metric tons of LNG per year will cost A$16.4 billion. The partners are yet to update an initial capital cost of A$7.7 billion.
–Editors: John Viljoen, Peter Langan.
To contact the reporter on this story: Ben Sharples in Melbourne at [email protected]
To contact the editor responsible for this story: Clyde Russell in Singapore at [email protected]
This website and sisters royaldutchshellplc.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, and shellnews.net, are owned by John Donovan. There is also a Wikipedia segment.
Royal Dutch Shell conspired directly with Hitler, financed the Nazi Party, was anti-Semitic and sold out its own Dutch Jewish employees to the Nazis. Shell had a close relationship with the Nazis during and after the reign of Sir Henri Deterding, an ardent Nazi, and the founder and decades long leader of the Royal Dutch Shell Group. His burial ceremony, which had all the trappings of a state funeral, was held at his private estate in Mecklenburg, Germany. The spectacle (photographs below) included a funeral procession led by a horse drawn funeral hearse with senior Nazis officials and senior Royal Dutch Shell directors in attendance, Nazi salutes at the graveside, swastika banners on display and wreaths and personal tributes from Adolf Hitler and Reichsmarschall, Hermann Goring. Deterding was an honored associate and supporter of Hitler and a personal friend of Goring.
Deterding was the guest of Hitler during a four day summit meeting at Berchtesgaden. Sir Henri and Hitler both had ambitions on Russian oil fields. Only an honored personal guest would be rewarded with a private four day meeting at Hitler’s mountain top retreat.
IN JULY 2007, MR BILL CAMPBELL (ABOVE, A RETIRED GROUP AUDITOR OF SHELL INTERNATIONAL SENT AN EMAIL TO EVERY UK MP AND MEMBER OF THE HOUSE OF LORDS: 
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A head-cut image of Alfred Donovan (now deceased) appears courtesy of The Wall Street Journal.
