Beach willing to pay royalty for gas access
Despite hitting out at the opposition shown by hobby farmers and vineyard owners to the onshore oil and gas industry, managing director Reg Nelson said he would be "amenable" to such a royalty if it were demanded by former workplace minister Peter Reith in his report for the Victorian government.
Mr Reith has been reviewing the industry and how it could affect farmland and groundwater systems in Victoria.
He is expected to recommend the advancement of the industry so long as there are controls and royalties for landowners.
The policy is similar to the situation in US states such as Texas, where landowners can strike lucrative deals with oil and gas companies that work on their land.
Speaking at the Melbourne Mining Club, Mr Nelson said royalty payments would be acceptable so long as they were not prohibitively high. "I'm amenable to any solution that the government thinks can facilitate things," he said.
"The main thing is to not impose a royalty that is punitive because that will discourage people from investing if they have better opportunities elsewhere."
The comments came after the NSW government earmarked 2.8 million hectares of land, including vineyards and horse studs, for special protection under new protocols for onshore oil and gas development. The situation is even more restricted in Victoria, where a ban prevents any unconventional oil and gas production until the government receives and digests Mr Reith's report.
While Gippsland is expected to become a battleground for the onshore oil and gas debate, Mr Nelson said the deep gas in the state's south-west near Warrnambool and Port Campbell could be a "much bigger prize".
While studies are still embryonic, Mr Nelson said the region could be as lucrative as South Australia's Cooper Basin, which dominates the gas supply for Australia's east coast. "These are areas where potentially good ground is really locked away and, I think, for no good reason," he said.
BG Group chairwoman Catherine Tanna also weighed into the debate yesterday, saying the gas was there if people were willing to pay enough for it.
On the international stage, Mr Nelson played down the threat that the US shale boom could pose to Australia's LNG export market in Asia, saying that any excess gas in the US was likely to flow to Mexico.
Mr Nelson said offshore Africa and Canada posed a bigger threat to Australian producers.
Frequently Asked Questions about this Article…
Beach Energy’s managing director Reg Nelson said the company would be amenable to paying a royalty to Australian landowners if the government required it as part of an industry review — but only if the royalty wasn’t prohibitively high and wouldn’t discourage investment.
Former workplace minister Peter Reith is reviewing how the industry could affect farmland and groundwater in Victoria. He is expected to recommend advancing the industry provided there are controls in place and royalty arrangements for landowners.
The policy being discussed is similar to US states like Texas, where landowners can strike lucrative deals with oil and gas companies working on their land. Beach Energy supports a royalty approach in principle, as long as it’s not punitive.
The NSW government has earmarked about 2.8 million hectares — including vineyards and horse studs — for special protection under new onshore oil and gas protocols. In Victoria there is a ban on unconventional oil and gas production until the government receives and considers Peter Reith’s report.
Yes. Reg Nelson flagged Gippsland and the deep gas potential near Warrnambool and Port Campbell in southwest Victoria as possibly a 'much bigger prize.' He suggested the area could be as lucrative as South Australia’s Cooper Basin, although studies are still embryonic.
Beach Energy’s Reg Nelson played down that threat, saying excess US gas is likely to flow to Mexico rather than displace Australian LNG in Asia. He suggested that offshore resources in places like Africa and Canada pose a bigger international competitive threat.
BG Group chairwoman Catherine Tanna commented that the gas is there — but you need to be willing to pay enough for it, implying price and investment appetite matter for development.
According to Reg Nelson, royalties are acceptable if reasonable. However, punitive or prohibitively high royalties could discourage investment because companies may choose other opportunities if returns are weakened by excessive charges.
Call 1300 880 160
Start a chat
Schedule a call
