Minister for Resources and Energy, Senator Peter Walsh
EMBARGOED UNTIL 10,30 AM, WEDNESDAY, 7 NOVEMBER 1984
ADDRESS BY THE MINISTER FOR RESOURCES AND ENERGY,
SENATOR PETER WALSH, AT THE OPENING OF THE
13TH ANNUAL BUREAU OF MINERAL RESOURCES ( BMR) SYMPOSIUM,
CANBERRA, WEDNESDAY, 7 NOVEMBER
THE MAJOR FOCUS OF THIS SYMPOSIUM AND ITS ASSOCIATED ACTIVITIES
IS ON THE FORMATION AND DISCOVERY OF HYDROCARBON RESERVES.
IN RECENT YEARS AND CONTRARY TO EXPECTATIONS FORMED IN THE LATE
1970S, NOMINAL AND REAL OIL PRICES HAVE FALLEN SUBSTANTIALLY.
THAT TREND AT LEAST IN REAL TERMS SEEMS LIKELY TO CONTINUE FOR
SOME TIME.
AGAINST THAT BACKGROUND THE GOVERNMENT NOTES WITH SOME
SATISFACTION THAT OVERALL DRILLING ACTIVITY IN 1984 IS SET TO
ESTABLISH A NEW RECORD. IF THE RATE ESTABLISHED IN THE FIRST
THREE QUARTERS OF THIS YEAR IS MAINTAINED, 242 EXPLORATION WELLS
AND 484,500 METRES WILL BE DRILLED AN INCREASE OF 9.5% AND 7.1%
RESPECTIVELY ON THE PREVIOUS RECORD, -1-
THERE WILL BE A MAJOR INCREASE IN ONSHORE ACTIVITY, OFFSHORE
EFFORT IS SET TO EQUAL THE RECORD LEVEL OF 1983,
NEITHER THE EXCISE ON NEW OIL ONSHORE NOR THE OFFSHORE
GREENFIELDS RESOURCE RENT TAX POLICY HAVE INDUCED THE EXPLORATION
DECLINE WHICH SOME HAD ASSERTED THEY WOULD,
IN JANUARY 1983 IT WAS PREDICTED THAT EXPLORATION ACTIVITY WOULD
DECLINE SUBSTANTIALLY IN 1983 AND IN SUCCEEDING YEARS, IT WAS
ALSO ASSERTED THAT THE DECLINE WOULD ACCELERATE IF ANY CHANGES
WERE MADE TO COMMONWEALTH TAX POLICY, THE PREDICTION AND
ASSERTION HAVE BEEN SHOWN TO BE QUITE WRONG, THE GOVERNMENT'S
JUDGEMENT THAT THE NEW TAX ARRANGEMENTS ARE EFFICIENT AND
REASONABLE AND INDEED ABOUT WHAT THOUGHTFUL EXPLORERS HAD
ALWAYS EXPECTED HAS BEEN CONFIRMED BY EVENTS,
SOME, WHO HAVE SEEN THEIR PROPHECIES REFJTED, HAVE: ARGUED THAT
ONLY PERMIT OBLIGATIONS, ESPECIALLY IN OFFSHORE AREAS, HAVE
SUSTAINED ACTIVITY, THIS IGNORES THE FACT THAT COMPANIES WOULD
SURRENDER PERMITS IF THEY BELIEVED, ALL THINGS COTSIDERED, THAT
FURTHER INVESTMENT WAS NOT WARRANTED,
IN THE LAST THREE YEARS VERY LITTLE NEW OFFSHORE ACREAGE HAS BEEN
ALLOCATED, THIS COULD AFFECT ACTIVITY IN FUTURE YEARS, BUT PLANS
ARE ON HAND TO AWARD NEW PERMIT AREAS EARLY NEXT YEAR,
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CLEARLY THE ASSERTION THAT THE GOVERNMENT'S TAXATION POLICIES FOR
NEW OIL HAVE DETERRED EXPLORATION CANNOT BE SUSTAINED,
IN REGARD TO OLD OIL, THE OLD OIL EXCISE SYSTEM PRECLUDED THE
DEVELOPMENT OF SEVERAL MINOR FIELDS IN BASS STRAIT,
I AM PLEASED THAT, FOLLOWING CONSULTATIONS WITH THE PERMIT
HOLDERS, A CONCESSIONAL EXCISE SYSTEM HAS BEEN DETERMINED AND WAS
ANNOUNCED BY ME LAST MONTH,
THIS WILL RESULT IN A NEW MULTI-BILLION DOLLAR DEVELOPMENT
PROGRAM IN BASS STRAIT, WITH A FURTHER BOOST TO OIL
SELF-SUFFICIENCY OVER THE NEXT FEW YEARS, MORE THAN 1,000 JOBS
WILL BE CREATED BY THE INVESTMENT PROGRAM,
THE BMR's PRIMARY ROLE DURING THE NEAR FORTY YEARS IT HAS EXISTED
HAS BEEN TO PROVIDE THE FRAMEWORK OF KNOWLEDGE AND THE BROAD
GEOLOGICAL ASSESSMENT WITHIN WHICH MORE SPECIFIC EXPLORATION
TARGETS CAN BE IDENTIFIED AND TESTED, USUALLY BY THE PRIVATE
SECTOR,
THERE DOES NOT APPEAR TO HAVE BEEN SIGNIFICANT DISSENT FROM THE
BASIC PRESUMPTION THAT BROAD ASSESSMENTS ARE BEST CONDUCTED BY A
GOVERNMENT AGENCY OR AGENCIES, OR THE CONCLUSION THAT THE BMR HAS
DISCHARGED ITS DUTIES WELL,
IT IS ALSO AGREED, I BELIEVE, THAT THE BUREAU MUST CONTINUALLY
REVIEW ITS ACTIVITIES AGAINST A BACKGROUND OF ACCUMULATING
KNOWLEDGE AND CHANGING TECHNOLOGY AND OBJECTIVES,
SUBSTANTIAL CHANGES RECOMMENDED BY THE ASTEC REPORT IN 1979 ARE
BEING IMPLEMENTED,
PROBABLY THE MOST SIGNIFICANT OF THE CHANGES IS THE INCREASING
EMPHASIS ON PETROLEUM ASSESSMENT, IN 1983 THE GOVERNMENT
ENDORSED THE CONTINENTAL MARGINS PROGRAM MORE PRECISELY KNOWN,
I UNDERSTAND, AS FRAMEWORK STUDIES OF AUSTRALIAN OFFSHORE AREAS
A PROJECT CLOSELY RELATED TO THE THEME OF THIS SEMINAR,
THE GEOSCIENCE RESEARCH VESSEL RIG SEISMIC HAS BEEN CHARTERED AND
ARRIVED IN AUSTRALIA LAST MONTH, COMMITMENTS HAVE BEEN MADE TO
PURCHASE THE SCIENTIFIC APPLICATIONS COMPUTER WHICH COMPLEMENTS
THE SEISMIC AND GEOSCIENCE PROGRAM AND THE COMPREHENSIVE
DATABASE, FUNDS HAVE ALSO BEEN SECURED FOR CONTRACT DRILLING AT
CONSIDERABLE DEPTH OF PREVIOUSLY UNTESTED AREAS ONSHORE,
THE NEW PROGRAMS HAVE REQUIRED A VERY LARGE INCREASE IN FUNDS
FROM THE LOW LEVELS TO WHICH FUNDING HAD SUNK IN THE 1978-1982
PERIOD, THIS YEAR $ 31.1 MILLION HAS BEEN APPROPRIATED A 48%
INCREASE ON THE $ 21 MILLION SPENT IN 1982-83,
GIVEN THE FINANCIAL DISCIPLINE TO WHICH THE PRESENT GOVERNMENT
COMMITTED ITSELF FROM THE OUTSET, THERE WAS A PRIMA FACIE CASE
AGAINST EXPENDITURE INCREASES OF THAT MAGNITUDE, INDEED ONE
INFLUENTIAL GOVERNMENT DEPARTMENT OFFERED THE OPINION THAT THE
PROPOSED EXPENDITURE WAS AN EMBARRASSMENT, COMING AS IT DID FROV
A MEMBER OF THE GOVERNMENT'S EXPENDITURE REVIEW COMMITTEE,
NORMALLY I WOULD BE RECEPTIVE TO THAT SORT OF VIEW, BUT BELIEVE
THE GEOSCIENCE AND SEISMIC EXPENDITURES SHOULD BE REGARDED AS
INVESTMENT FOR THE FUTURE, NOT CONSUMPTION IN THE PRESENT, THE
ERC AND CABINET AGREED A TRIBUTE I BELIEVE TO THE COMMONSENSE
OF MY COLLEAGUES, RATHER THAN TO MY UNIQUE SKILLS AS AN ADVOCATES,
THE STRONG' COMMERCIAL INTEREST TOUCHED OFF BY THE BUREAU'S DEEPER
SEISMIC SURVEY OF THE PREVIOUSLY ABANDONED BASS BASIN IS A
SIGNIFICANT EXAMPLE OF THE VALUE OF SUCH WORK,
BEFORE CLOSING I WISH TO MENTION TWO RECENT INITIATIVES INVOLVING
THE BUREAU,
FIRSTLY, THE PROVISION IN THE 1984 BUDGET OF STAFF AND EQUIPMENT
TO MONITOR NUCLEAR EXPLOSIONS AND CONTRIBUTE TO AN INTERNATIONAL
DATA CENTRE,
SECONDLY, PURSUANT TO THE MEMORANDUM OF UNDERSTANDING SIGNED BY
ME LAST YEAR, AN AUSTRALIAN SCIENTIFIC PARTY WILL VISIT CHINA
NEXT YEAR TO SELECT AN AREA FOR A DETAILED JOINT GEOSCIENTIFIC
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STUDY, THIS FURTHER STRENGTHENS THE DEVELOPING RELATIONSHIP WITH
CHINA, PROVIDES OPPORTUNITIES FOR INVOLVEMENT BY AUSTRALIAN FIRMS
IN CHINESE MINERAL DEVELOPMENT, AND REINFORCES AUSTRALIA'S
ALREADY FAVOURABLE POSITION TO PARTICIPATE IN THE INTERNATIONAL
TRADE OPPORTUNITIES ASSOCIATED WITH, CHINA'S ECONOMIC GROWTH,
FINALLY IT IS MY PLEASURE TO DECLARE THIS SYMPOSIUM OPEN.
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