WESTERN Australia may have surged up the rankings of the world’s most attractive locations for oil and gas investment, but it remains just the fourth most attractive investment location within Australia.
WESTERN Australia may have surged up the rankings of the world’s most attractive locations for oil and gas investment, but it remains just the fourth most attractive investment location within Australia.
And the state is one of the least appealing locations to oil and gas producers on the basis of uncertainty related to land disputes and protected areas.
In its annual global petroleum survey, Canada’s Fraser Institute ranked WA 21st of 133 jurisdictions around the world as an attractive location for oil and gas investment in 2010.
The ranking represents a huge improvement on the previous year, when WA ranked just 56th of 143 global jurisdictions rated by the Canadian resources think-tank.
The survey is based on the responses of 645 senior oil and gas executives from around the world, whose companies accounted for 60 per cent of upstream investment globally last year.
Their responses reflect industry views on a range of potential investment hurdles such as geopolitical risk, taxation, environmental regulation, labour and infrastructure availability and security of tenure.
Locations were ranked according to the percentage of negative responses received.
Overall, only 19.1 per cent of respondents believed WA’s performance on the 17 measured factors posed at least a “mild deterrent” to investment.
In comparison, all who responded believed conditions in Bolivia – the worst performing jurisdiction – were a deterrent to investment.
At the other end of the scale, just 8.8 per cent of respondents view conditions in the US state of South Dakota – the number one ranked location – as deterring investment.
North American jurisdictions – seven from the US and two from Canada – accounted for nine of the top 10 locations, with fifth-ranked Austria the only other region represented in the top 10.
The 10 least attractive locations were Bolivia, Venezuela, Russia, Ukraine, Iran, Turkmenistan, Ecuador, Nigeria, Iraq, and Kazakhstan.
Respondents overall rated all Australian jurisdictions positively for their well-established, transparent and stable fiscal and regulatory frameworks.
Interestingly, Australia’s offshore petroleum resource rent tax regime was lauded as an “optimum arrangement” that encouraged investment.
Drilling into the figures, South Australia ranked way ahead of WA at 14, followed by the Northern Territory at 16, and Victoria at 20. Within Australia, only Tasmania (23), Queensland (34) and New South Wales (40) were ranked below WA.
WA also ranked among the world’s worst performers on the basis of uncertainty related to disputed land claims and protected areas.
Half of all respondents rated disputed land claims as a mild disincentive to investing in WA, pushing the state into the bottom 21 jurisdictions worldwide.
WA also ranked 92nd for uncertainty about the classification of protected areas, with 44 per cent of respondents seeing it as a deterrent to investment.
The finding comes as conservation groups call for a massive expansion of marine reserves in the Kimberley and South West following last year’s Montara oil spill in the Timor Sea.
The World Wildlife Fund wants 30 per cent of Australian waters to be declared marine parks, versus 5 per cent now.
