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Queensland unveils new gas royalty model

POLICY AUSTRALIA’S Queensland State has unveiled a The model comes at the recommendation
new natural gas royalty model that will adopt a of a working group that was independently
volume-based approach to calculating payments chaired by former South Australian Premier
rather being index-based. Jay Weatherill. The group examined differ-
The volume-based model will see royalties ent royalty models and concluded that the
calculated on the volume of gas produced and current royalty regime was not suitable for
will include a sliding rate scale and produc- the existing configuration of the Queens-
ers’ sales revenue. The new mechanism will be land gas industry.
locked in place for five years, though industry The Queensland Resources Council (QRC) has
has already called for the Labor government to welcomed the shift to using “actual sales rather than
match the election pledge of a 10-year lock-in by an index for calculating gas royalties” and has hailed
the Liberal-National Party opposition. the fact that the model would offer lower rates for
Treasurer and Minister for Infrastructure and domestic production. However, while it “noted” the
Planning Cameron Dick said on June 8 that the new five-year royalty freeze, it said more could be done
volume-based model would support affordable sup- to ensure sector stability.
ply for domestic customers, appropriate returns for “The government has recognised that sta-
Queenslanders and fairness for gas producers. ble royalties provide greater investment and
“Queensland’s gas industry continues to do employment certainty for the resources industry.
the heavy lifting in supplying the gas for domes- The LNP promised 12 months ago, if elected, it
tic markets in Eastern states, while also meeting would stabilise royalties for 10 years,” QRC chief
the needs of international customers,” he said. executive Ian Macfarlane said.
“This review has been crucial in ensuring that The Australian Petroleum Production and
oil and gas companies are treated fairly, and that Exploration Association’s (APPEA) head,
Queenslanders receive their fair share of royal- Andrew McConville, said clarity on the gov-
ties from this important industry. The model is ernment’s policy position was important for the
transparent, equitable, administratively simpler upstream industry as it planned its next round
and locked in for five years.” of investment.™

Senex wraps up Surat drilling programme

PROJECTS & AUSTRALIAN independent Senex Energy has Commenting on the update, managing
COMPANIES announced the completion of its drilling pro- director and CEO Ian Davies said: “In October
gramme at its Surat Basin natural gas projects. 2018, Senex reached its final investment decision
The company, which wholly owns the Roma [FID] for this AUD400mn [$274.9mn] capital
North and Project Atlas developments, said on programme. Less than two years later, Roma
June 10 that it had completed its 80 well drilling North and Atlas have been successfully delivered
campaign. It noted that this was down from the – an industry leading achievement and a credit
company’s original plan of drilling around 110 to all involved.”
wells across both projects, owing to continued He added: “With proved and probable (2P)
production outperformance. natural gas reserves in excess of 600 PJ [15.63bn
Senex did not say how the wells had been split cubic metres] across our Surat Basin acre-
up, but a company state on March 11 highlighted age, Senex will be delivering natural gas to the
that the company had been able to achieve an ini- domestic market for decades to come.”
tial production capacity of 16 terajoules (417,000 The company said Roma North had been
cubic metres) per day at Roma North with just 35 consistently producing above nameplate
wells, instead of the 50 wells anticipated. Senex capacity at around 18 TJ (469,000 cubic
said at the time the results had encouraged it metres) per day. Atlas production, meanwhile,
to reduce its Atlas drilling programme from 60 was said to have exceeded 15 TJ (391,000
wells to 50 wells. As such, it appears the company cubic metres) per day and was ramping up
was able to pare back the Atlas drilling campaign to its nameplate capacity of 32 TJ (834,000
to just 45 wells. cubic metres) per day, with an additional 8
Senex said that, in conjunction with infra- TJ (208,000 cubic metres) per day of installed
structure partner Jemena, it had successfully capacity available.
built and commissioned natural gas facilities Senex added that initial water treatment facil-
at Roma North and Atlas with more than 20 ities at Atlas had also been commissioned, with
petajoules (520.97mn cubic metres) per year of final construction completion expected in the
greenfield gas processing capacity. second half of this year.™

P10 www. NEWSBASE .com Week 23 11•June•2020