APPEA predicts oil and gas to drive economic recovery

A report released today at the Australian Petroleum Production and Exploration Association (APPEA) conference in Darwin reports that oil and gas could drive Australia's economic recovery if governments take the steps needed to get billions of dollars of existing projects off the ground.

There is currently more than $200 billion worth of oil and gas projects on the drawing board nationwide, says the State of the Industry 2009 report.

"In seeking ways to stimulate economic recovery, governments should note that few other industry sectors have so many prospective major projects at such an advanced stage of planning," the report says. It found each of these projects was capable of attracting "billions of dollars in investment" and supporting thousands of construction jobs.

"Further progress in a number of key areas could see Australia's oil and gas industry potentially drive Australia's economic recovery," said APPEA chairman Eric Streitberg. If all the current projects are realised, Streitberg said it would result in the creation of 50,000 jobs and deliver $10 billion in annual government revenue.

About 180 million tonnes of global greenhouse gas emissions would be avoided each year, and the LNG industry could help lead the nation's return to economic prosperity, he said.

"We provide 9% of global supply and if we get the policy settings right we have the potential to grow to 20%," he said.

The report also set aspirational targets for the oil and gas sector and identified regulatory reform, an emissions trading scheme design and achieving a globally competitive fiscal regime as the main challenges to growth.

"Governments have the opportunity to put in place a policy framework that will trigger the step-change increase in oil and gas exploration and development activity," the report says.

"The benefits to be gained in the form of increased employment and wealth creation for Australians and the secure supply of clean energy at home and abroad are very substantial."

Also singled out in the report is the need for national tax review in order for Australia to deliver an internationally competitive investment framework.

APPEA's Chief Executive, Belinda Robinson, said the regulatory burden on Australia's oil and gas industry had a "paralysing effect", particularly on small to mid-sized explorers and producers.

Robinson described a 50% reduction in approval times for projects as a "reasonable objective".

"An across the board, one-year reduction in total approval time for major projects could generate future national income gains in the billions of dollars each year," she said.

Source: AAP NewsWire