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exploration bid round, it was also including AUD2.8mn ($1.8mn) in 2020-2021 funding to encourage exploration and upstream techno- logical innovation.
The moves come as Queensland looks to revive economic activity amid concerns over soaring debt levels.
Economic malaise
Queensland Treasurer Jackie Trad said last month that she would have to increase the state’s debt in order to avoid economic disaster, not- ing that the economy had been struggling even before the COVID-19 outbreak.
The state estimates that the pandemic has wiped AUD4bn ($2.58bn) from its revenue while also leading to 130,000 job losses. While debt was forecast in December 2019 to climb to AUD91.8bn ($59.31bn), that is set for further expansion after Trad said the state needed to fol- low the Commonwealth’s example and “look at additional borrowings”.
Queensland’s decision to ease social dis- tancing measures, which will see groups of up to five people allowed to gather, has been sub- tly welcomed by Australian Prime Minister Scott Morrison. He said this week that states needed to tackle the unemployment problem after the significant slowing in the number of new COVID-19 cases.
“We now need to get a million Australians back to work. That is the curve we need to address,” he said. Morrison added: “At the end of the day, every premier, every chief minister has to stand in front of their state and justify the decisions that they’re taking in terms of the extent of the restrictions that are in place – the trade-off that they’re making between people having jobs and the impact on the contain- ment of the coronavirus.”
What next
Queensland needs its oil and gas sector to help reinvigorate the local economy. Months before COVID-19 was even on the radar, the Brisbane government was looking for a greater return from its extractive industries.
The state announced in June 2020 that it would be increasing its natural gas royalties by 2.5 percentage points in 2019-2020, with the hike to 12.5% projected to raise an additional A$476mn ($307.2 mn) in state revenue over a four-year window.
Getting developers back to work exploiting the state’s resources is clearly key to Queensland’s plans for economic recovery this year, with Trad having already warned that the economic down- turn in both the June and September quarters will likely be “particularly bad”.
The Australian Petroleum Production and Exploration Association (APPEA) has wel- comed the government’s efforts to support the exploration sector. APPEA chief executive Andrew McConville said: “Successful explora- tion can deliver revenue for governments, jobs for workers and long-term energy security for Australia.”
It is still unclear, however, how much inter- est there is in the state’s new fields. While Arrow Energy has approved the Surat natural gas pro- ject in Queensland and Santos remains commit- ted to its Narrabri CBM project in New South Wales, other growth projects have felt the pinch of budget cuts.
Woodside Petroleum and Santos have both deferred major gas export projects, while Beach Energy has also cut spending for 2020-2021. There is a reason why the government has unveiled measures to help the upstream weather the storm, a situation that inevitably appears at odds with plans for a new bid round.™
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w w w . N E W S B A S E . c o m Week 18 07•May•2020