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All petroleum and other regulated resources (contained onshore) in South Australia are subject to the provisions as specified in the Petroleum and Geothermal Energy Act 2000 (the Act) and the Petroleum and Geothermal Energy Regulations 2013 (the Regulations). Ownership of all regulated substances remain vested in the Crown until such time as royalty as specified in the Act have been paid to the Crown.
Royalties are calculated as a proportion of the net sales value (excluding GST) at the point of sale to an arms-length purchaser. The value is to exclude allowable expenses in the determination of the wellhead value.
Allowable expenses related to treatment, processing or refining post wellhead, and also include costs associated with conveying the regulated substance to the purchaser. Pre-wellhead costs such as those incurred in exploration, drilling or recovery activities cannot be claimed for the purposes of determining royalty.
Royalty is payable at the rate of 10% of the net post-wellhead sales value (wellhead value) of petroleum recovered at the wellhead.
Wellhead means the casing heads and includes and casing hanger or spool, or tubing hanger, and any flow control equipment up to and including the wing valves.
The wellhead value of petroleum recovered is calculated by deducting from the arms-length gross sales value of petroleum, certain post-wellhead costs.
Post-wellhead costs including operating and depreciation expenses directly relating to treatment, processing and refining post-wellhead, and conveying the petroleum to the point of delivery to the purchaser and may include:
- an allowance for depreciation of post-wellhead capital assets situated within a production unit on a straight line basis over the life of the field or up to a maximum of 10 years, whichever is the lesser.
- an allowance for interest on approved post-wellhead capital assets.
- the net cost of rehabilitation and abandonment of well sites.
Oil & Gas Royalty Return information sheet
Royalty on Geothermal Energy is 2.5% of the wellhead value of the geothermal energy. The value at the wellhead is calculated by subtracting from the sales value, costs reasonably incurred by the producer in getting the energy to the point of delivery to the purchaser (exclusive of GST).
The value at the wellhead of a regulated substance or geothermal energy is to be assessed by the Minister. The Minister may, on application by the producer, or on the Minister's own initiative, review and revise an earlier assessment of the value at the wellhead of a regulated substance or geothermal energy.
Royalty payments can be made by cheque (made payable to the Department of State Development) or by direct bank transfer to:
|Commonwealth Bank of Australia|
100 King William Street
Adelaide SA 5000
|Account Name:||Department of State Development - Collections|
|Account Number:||1000 0565|
Details about royalties for petroleum and other regulated substances recovered from offshore South Australia please refer to the Department of Industry and Science website at www.industry.gov.au
This information is provided to help you understand the audit process and answer some questions you may have. It also provides you with some details of your rights and obligations during an audit.
Audits are selected in a variety of ways:
* Industry trend analysis
* Follow-up of information received from a variety of sources
* Random selection for the routine verification and coverage of the royalty revenue base
The Resource Royalties Team anticipates that all licensees will be audited at least once every 2 years.
In most cases an auditor will:
* Confirm arrangements in writing
During an audit, the auditor will conduct interviews and make enquiries to establish compliance with the particular legislation and examine and test some of your internal financial records.
You will receive written advice of the outcome of the audit and any proposed action.
You should ensure that the records the investigator has requested are ready for examination. If you require further time to collate the records, please inform the investigator prior to the commencement of the audit.
How long an audit takes depends to a large extent on what type of audit - full audit, interim audit, theme audit or spot check - is undertaken.
If you have any questions about the arrangements for the audit or the processes involved, contact the auditor for assistance.
Investigators have a range of powers. In general, these powers permit the investigator to:
* Gain access to buildings and property and remain there
* Inspect, examine and copy any documents or records
* Require a person to answer questions and provide information
* Require a person to take reasonable steps to obtain information relevant to the investigation and to pass it on to the authorised officer
If a licensee fails to comply with an investigator's lawful requests, it is possible that penalties such as a fine can be applied.
During an audit, you are obliged to provide:
If an audit is to be conducted, you have the right to:
* Receive written confirmation of these arrangements
During an audit, you have the right to:
* Be given the opportunity to explain the reasons for any irregularities, discrepancies, decisions etc
At the end of the audit, you have the right to:
If you are dissatisfied with certain decisions or an assessment you are entitled to appeal against the assessment to the Environment, Resources and Development (ERD) Court. After receiving an assessment, you have one month to lodge an appeal to the ERD Court.
Information gathered during audit is treated in the strictest confidence and will not be used or divulged except for purposes required by law.
For more information, contact:
Phone: +61 8 8463 3095