The minister for resources, Matt Canavan, says he is “bitterly disappointed” by BP’s decision to not proceed with its controversial plan to drill for oil in the commonwealth marine reserve in the Great Australian Bight.
He said the Turnbull government was still confident the region could be developed, and he would be speaking to other oil and gas companies in coming days.
He criticised environmental groups that have campaigned against BP’s project, saying their celebratory response to the decision showed the “ugly side of green activism”.
“We think up to 100 workers will be impacted, and those workers I’m sure went to bed last night a little restless ... but we had other people in this country popping the champagne corks and celebrating that fact,” Canavan said on Wednesday.
BP announced on Tuesday it would scrap its $1.4bn drilling program in the Great Australian Bight, off South Australia, citing commercial reasons.
The announcement was applauded by green groups, coming after repeated requests for more information from the Australian regulator, the National Offshore Petroleum Safety and Environmental Management Authority, and mounting public concerns about the impact the drilling and any potential oil spill would have on the pristine waters of the bight.
BP had previously boasted the bight had the potential to be as big an oilfield as the Gulf of Mexico, where there are now more than 4,000 oil rigs.
Karoon Gas Australia, which announced its plans to explore for oil last week, has said the bight holds “the world’s last underexplored Cretaceous basins”.
Canavan told ABC radio on Wednesday he was bitterly disappointed . He said BP had been allowed to explore for oil in the marine reserve after making almost half a billion dollars worth of commitments to do work in the area, and now it was walking away from them.
He said he now expected BP to “make good” some of those commitments in other ways. “I’ll be very interested in discussing with them in coming days what those plans might be,” he said.
He criticised environmental groups that campaigned against the project. “What does frustrate me is sometimes the workers in these industries, who tend to be fairly quiet, reticent types of people, aren’t the ones on the radio or in the media telling their stories,” he said.
The government still believed the region could produce large amounts of oil and gas, he said. “Obviously there is still a lot of uncertainty about the area, but we remain confident of its long-term prospectivity and I’ll be talking to some of those other companies about their plans in coming days,” he said.
Canavan was also asked about the effectiveness of the petroleum resource rent tax, after reports that just 5% of oil and gas projects operating in Australia are paying the tax.
The Tax Justice Network has warned that Australia is set to blow another resources boom, forgoing billions of dollars in potential tax revenue, because the PRRT is failing to collect adequate revenue from the explosion in liquefied natural gas exports.
“[The PRRT] is a profits-based tax and what happens, of course, is that resource developments take large upfront costs, particularly some of these LNG developments … that take some time before profits are realised,” Canavan said.
“This tax has delivered billions to the federal government over a number of decades, and it has underpinned the development of a massive industry in this country.
“So we’ve got to be very careful about making any changes, particularly to people that make massive investments. We’ve got to attract this investment to our country.”
