Norwegian oil company Equinor is planning exploratory drilling for oil and gas in the Great Australian Bight beginning in late 2020, after it received two offshore leases from its partner BP in 2017. BP abandoned plans to drill itself, although it still holds two offshore leases which remain “prospects”.
Modelling commissioned by the oil and gas lobby shows that South Australia is unlikely to receive any noticeable benefit from tax payments as a result of oil and gas production in the Great Australian Bight. What benefits exist will go mostly to the Commonwealth, but even those benefits are small relative to the total Commonwealth budget, would take decades to materialise and are based on “preliminary” modelling.
The modelling shows that oil production plateaus from the early 2030s, but no Petroleum Resource Rent Tax payments are expected until 2047. In the late 2040s, total tax payments are predicted to peak at about $4.5 billion before quickly falling again. That includes indirect taxes. Taxes paid just by those drilling exceed $4 billion in only one year. Assuming even modest growth in the Australian economy (and Commonwealth budget) of 2 percent per year, total payments as a result of drilling the Great Australian Bight would never exceed even half a percent of Commonwealth revenues in a given year.