LNP promises Qld royalty freeze

THE Queensland Liberal National Coalition opposition has formally answered state Labor’s budget of Tuesday, promising a ten year royalties freeze on all commodities after the government unexpectedly increased the petroleum royalty by 25%, from 10% to 12.5% in a blindside to the gas industry.
LNP promises Qld royalty freeze LNP promises Qld royalty freeze LNP promises Qld royalty freeze LNP promises Qld royalty freeze LNP promises Qld royalty freeze

 Leader Deb Frecklington said the state was stagnating.

"Investment has collapsed and so has confidence," she said. She also promised to open up the Galilee Basin to more coal exploration.

"The Galilee Basin will deliver tens of thousands of high-paying jobs as well as billions of dollars in royalties," she said

"Every cent of its royalties will go into a new Queensland infrastructure fund.

"The fund will be used exclusively to pay for schools, hospitals, roads and bridges right across Queensland."

APPEA CEO Andrew McConville welcomed the move, suggesting that "predictable and stable regulation is the foundation for strong investment in the new gas supplies which are urgently needed in the east coast gas market". 

He said the commitment from the LNP of yesterday would help secure east coast gas supply.

"Queensland's gas industry is a modern day success story founded on bipartisan support."

The move of earlier this week took industry by surprise and angered many thanks to its lack of consultation. While seemingly aimed at the LNG export industry smaller, domestic gas players were also caught unawares and left unsure as to whether they'd be hit too by a government that hitherto had shown high levels of support.

There are also questions over what will happen to Armour Energy's huge Surat Gas Project, which holds an estimated 5 trillion cubic feet of gas across many fields.

Armour is a joint venture between Shell and PetroChina that has already seen large losses and is yet to take final investment decision. A tight lipped statement yesterday suggested an initial cost estimate of $1 billion from the royalty rise.

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