FOR PRESS P. M. No. 127 / 66
DEVELOPMENT OF GAS AND OIL DISCOVERIES IN BASS STRAIT
STATEMENT BY THE PRIME MINISTER MR. HAROLD HOLT
The Commonwealth has reached an agreement with the
Victorian Government designed to allow production of gas and oil from the
Barracouta and Marlin fields of the BHP/ Esso Companies to be achieved
at the earliest possible date.
This agreement provides that production leases will be
granted immediately to the companies under Victorian law, and
subsequently replaced by tit les granted by the State and the Commonwealth
under the proposed joint legislation.
From its discussions with the State and on the advice
available to it from its own authorities, the Commonwealth has concluded
that in the national interest the development of these two fields both the
production of natural gas to meet requirements in Victoria and
exploitation of the very substantial oil find in the Marlin field should
proceed without delay. This development will involve a very large
investment of the order of $ 150 m. The availability of natural gas on
a large scale to industries and households in Melbourne and surrounding
areas represents a major innovation which will bring great benefits.
The effect upon Australia's balance of payments will also be substantial
because of savings of foreign exchange through the use of oil and gas
produced from an Australian field for the Australian market.
The Commo~ awealth has over a period been working out
with the States a common code for the exploitation of off -shore oil and
gas. Commonwealth Ministers have recently been discussing with
State Ministers the possibility of additional provisions within the common
code which would offer to a company making a discovery an alternative
to the requirement that it would have to relinquish part of its area.
These alternative arrangements would allow a company to retain the
whole of a location in return for the payment of an additional royalty
( known as an override royalty' over and above the standard ten per cent
royalty previously agreed between the Commonwealth and the States.
The arrangements which have now been agreed with the
Victorian Government will give effect to this type of alternative in the
case of the BHP/ Esso discoveries at Barracouta and Marlin. An override
royalty of one per cent has been imposed by Victoria and is payable to the
State. The Commonwealth has also accepted as part of the
arrangements covering these BEP/ Esso discoveries that the standard ten
per cent royalty should be divided on the basis that Victoria would receive
six per cent and the Commonwealth four per cent instead of the equal
division as previously agreed between the Commonwealth and the States.
The Premiers of the other States have been informed of the
agreement entered into with Victoria in rce spect of these BHP/ Essa discoveries.
The Commonwealth wil be continuing its discussions with the States
in order to reach finality on the provisions of the common code on a basis
which will allow the most effective development of Australia' s off -shore
resources of oil and gas.
CANBERRA
29th December 1966.