Tuesday, 12 May 2020
Offshore Petroleum and Greenhouse Gas Storage Amendment (Cross-boundary Greenhouse Gas Titles and Other Measures) Bill 2019, Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Amendment (Miscellaneous Measures) Bill 2019; Second Reading
Basically, it's time to end the uncertainty, in the Great Australian Bight, in relation to oil and gas exploration. This is a bill that Centre Alliance will support, but we want to bring some certainty to the fishing industry and the tourism industry in South Australia. For decades, those industries have had to operate in the shadows of exploration, including seismic testing and the prospect of drilling in the Great Australian Bight. The uncertainty has stifled investment.
Offshore gas and oil exploration in the Great Australian Bight has occurred in three major phases: in the late 1960s and early 1970s, the early 1990s and from 2000 through to current exploration. More than 40 oil and gas exploration permits have been granted in the Great Australian Bight, and 13 exploration wells were drilled between 1972 and 2003. Since that time, only seismic testing has been conducted. We've seen BP come and go, we've seen Chevron come and go, we've seen Karoon Gas come and go and we've seen Equinor come and go.
These large companies all pulled out because, quite simply, drilling for oil in the bight is not economically viable. Meanwhile, the presence of the remaining oil companies and the ongoing prospect of drilling has adversely affected investment in the fishing and tourism industry. The fishing industry on the Eyre Peninsula alone is worth $500 million, and $400 million of that goes to export. Eyre Peninsula tourism is worth more than $300 million. Combined, both of those industries, directly and indirectly, employ some 5,000 South Australians. And these smaller industries pay tax, which is in great contrast to the oil and gas industry.
I've looked at the tax transparency data that the tax office now releases for companies that have a revenue of greater than $100 million. We can see that Chevron Australia Holdings Pty Ltd earned, over the last five tax transparency years, $15.7 billion. To the minister: do you know how much corporate tax they paid on that $15.7 billion of revenue? Absolutely zero. But if you think that's bad, let's go to ExxonMobil: $42 billion of revenue over five years and not a brass razoo paid in corporate tax. Kufpec Australia is another one: $1.2 billion of revenue; zero tax paid. Kuwait Petroleum Aviation (Australia) Pty Limited: $1.4 billion of revenue; zero tax paid. PTTEP Australia Perth: $2 billion; zero corporate tax paid. Tokyo Gas Australia: $1.7 billion; zero corporate tax paid. So we've got a contrast. We've got the tourism industry in South Australia, we've got the fishing industry in South Australia, hardworking mums and dads, varying sized companies, all paying tax, and they're unfortunately overshadowed by the oil and gas companies who are, basically, dithering around in the Great Australian Bight.
Let's look at one of those companies: Chevron. I'm grateful to the ATO. The ATO has done a fantastic job here. I'm not always complimentary of them, but they pursued Chevron. Chevron borrowed money from its corporate parent at nine per cent. Its corporate parent got it at one per cent. And they got caught out. Do you know how much the tax office got back? $866 million. That was in a lawsuit that the tax office won. Anyone who's in business knows that you have to have arm's-length transactions. You have to have proper accounting between a daughter company and a parent company. It's not rocket science. It's basic business. Yet Chevron didn't know this, somehow. I say they did, and I say that they stole from the tax office. That means they stole from the Australian public.
We've got a lot of companies running around right now looking for handouts, for help, and I don't mind giving people help. But, please, I hope none of these oil companies come to us for help, because they haven't paid any tax. They'll say, 'But we paid PRRT.' Firstly, that has been shown to be totally inadequate. We also need to understand that that is a separate tax that is provided to the Australian public because they take our oil and gas from underneath the sea.
I will be moving an amendment to this bill that will limit exploration leases in the Great Australian Bight to 10 years. Bight Petroleum is in the Great Australian Bight, as an example. They have sought and received six exploration permit extensions since 2011 for each of their permits, for both of them, EPP 41 and 42. These permit areas are close to Port Lincoln and Kangaroo Island. We're not trying to say to these companies, 'Stop immediately. You've lost your investment.' We're just saying, 'You need to commit or leave.' 'Use it or lose it' is the common term.
What these companies do is hold onto the asset, and, under the lease conditions that NOPTA impose upon them, they're not required to develop any particular resource if it's not commercially viable. But 'commercially viable' to them might mean that, in order to drill, they have to go and get an asset that's actually being used productively somewhere else, so therefore it's not commercially suitable. They use this system to just keep renewing and renewing and renewing, and we let them do that. In the meantime, that oil and gas that could have been extracted to assist us here in Australia is not extracted. In the case of the Great Australian Bight, we all recall Equinor. They would have simply extracted that oil and exported it, again without tax being paid.
So we've got to stop this. We've got to give certainty to South Australian industries, to the fisheries industry, to the tourism industry on the Eyre Peninsula, across to Victor Harbor, all the way down to Mount Gambier. We've got to give certainty so that they can make investments and know what lies ahead in terms of their future. After the vote on the second reading, I will be moving an amendment in the committee stage.