Barrow Island State Agreement

8 Apr

In 1967, Commonwealth and state officials agreed on a constitutional regime at sea. The agreement includes a 60:40 agreement for the sharing of the revenue-sharing agreement with 10% royalty price of the value of the well head value. All royalties of more than 10% go entirely to the state. By mutual agreement between the Commonwealth and governments, the state retains full responsibility for the administration of the regime. All EEA fee payments must be made within the time frame set by the legislation applicable to the account of the relevant department. These accounts are: deductible costs can vary up to a limit of 50% of the gross value of production for oil projects or 90% of the gross value of production for gas projects for each licence period. The choice of the deduction limit is determined by the “predominant” nature of the project and may change when a project moves from a primarily oily project to a primarily gas-based project. All expenses not deducted will be carried forward to the next month. It is necessary that your paying reference code be included in your EFT transaction so that the department can assign your payment to the right payer/project. Oil licences are levied on onshore oil production, in coastal waters and in the North West Shelf Project.

The licence rate is normally set at 10% of the value of the drilling for a primary production licence and 12.5% of the value of production for a secondary production licence. Due to changes to its royalty management system, DMIRS regional offices are no longer able to accept royalties. The only acceptable means of payment is by cheque or EFT, as described above. The gross value is the value of the oil recovered. It includes the value of arms length sales (actual commercial transactions between unrelated participants) and changes in oil product inventories. Opening and closing shares are valued based on last month`s weighted average unit price of revenue. New oil projects that land at the outer border of the coastal sea are subject to either the Petroleum (Submerged Lands) Act 1982 or the Petroleum and Geothermal Energy Resources Act 1967. There are five laws that apply to oil projects in Western Australia. The Barrow Island Royalty Agreement Act of 1985 was agreed between the producer and the state and Commonwealth governments to encourage further conservation of the Barrow Island wells to ensure optimal oil recovery. The RRR replaced the previously applied well and excise licensing system.

This is a royalty based on a percentage of net cash flows. An additional amount must be paid if the royalties are not paid on the due date. The mineral oil tax is managed and collected by the Australian Taxation Office. Costs that can be deducted from the gross value to determine the value of the wavy head include: For more information on resource taxation, visit the Commonwealth website.