CANBERRA, Australia -- The Australian Government is extending its offshore exploration incentive in the petroleum resource rent tax (PRRT) by one year.
This allows an immediate 150% uplift on PRRT deductions for exploration expenditure incurred in designated offshore frontier areas (DFAs). It has applied to the annual offshore acreage releases for 2004 to 2008.
The extension will enable the incentive to apply to the 2009 annual offshore acreage release, which will be announced at the Australian Petroleum Production and Exploration Association annual conference on June 1.
DFAs must be more than 100 km (62 mi) from an existing commercialized oil discovery, and must not be adjacent to an area designated in the previous year's acreage volume. DFAs may constitute up to 20% of exploration permits issued in a year.
The offshore exploration incentive lowers the cost of petroleum exploration in frontier areas, stimulating exploration activity in Australia's remote offshore areas and increasing the probability of discovering a new oil province, according to the government.
Any assistance provided beyond this year will be considered in light of the final report of the Australia's Future Tax System review and the Energy White Paper, which are both scheduled to be completed by the end of the year.