Wednesday 24 November 2004
Mr FINCH (Question) - Mr President, would the Leader reveal what, if any, plans the Government has for the future of Great South Land's oil and gas exploration lease, SEL 13/98, which covers the eastern half of Tasmania?
As the Leader will be aware the Australian Financial Review reported on Friday that SEL 13/98 has just been renewed for a further five years, effectively tying up half of Tasmania for oil and gas exploration to an unlisted company whose chairman has stated that he is inspired by visions.
As the conditions of the lease require a reported exploration expenditure of $21 million, and Great South Land is reported to have capital of less than $13 000, how soon can the State Government ensure more effective exploration of lease SEL 13/98?
Mr Harriss - That would be on Mr Rattray's property, wouldn't it?
Mrs Rattray-Wagner - I will pass that on.
Mr AIRD - I thought you were going to make a land tax comment.
Mr President, I thank the honourable member for his question. The State Government is aware of Pierpont's article in last Friday's, that is 19 November 2004, Australian Financial Review but has no comment to make on the journalist's assessment on how a company is run.
From the Government's position, Great South Land Minerals Ltd - GSLM - was granted a special exploration licence for oil and gas exploration over 30 356 square kilometres of mainland Tasmania for five years from 18 May 1999. GSLM applied for an extension of this special exploration licence over a reduced area on 6 May 2004. For the renewal the licence has been reduced to 15 035 square kilometres, approximately 50 per cent of the original area granted.
Renewal of exploration licences can be made provided the applicant demonstrates that they have the technical ability to carry out the proposed work program and the funds to undertake the agreed work program. As part of their renewal application, GSLM presented the Government with a letter from GEM Global Yield Fund - GGYF - London, which stated that GGYF had entered into an equity line of credit with GSLM to provide up to £150 million to finance exploration for oil and gas in the Tasmanian basin.
The renewal was granted on the basis that the licensee intends to spend $21.5 million on exploration during the renewal period to define or disprove commercial quantities of oil or gas. As a condition of renewal, GSLM have agreed to meet additional licence conditions that will ensure that the community gets a fair return from allocation of such a large area. These conditions are as follows:
· GLSM has provided a staged expenditure budget of
$21.5 million over five years.
· The Government requires GLSM to meet 80 per cent of cumulative expenditure
commitment at the end of each year of the licence. Failure to meet this critical
condition will result in revocation of the licence.
· Expenditure claimed under the licence must be consistent with industry
charges current at the time of the claim.
· Expenses significantly higher than industry standards will not be
accepted.
· Copies of all receipts shall be provided for consulting fees claimed
as expenditure.
· MRT will be provided with copies of reports or advice from consultants
to substantiate such claims.
GSLM shall provide a review of exploration activities to Mineral Resources Tasmania - MRT - on 1 April and 1 October in each year and GSLM shall provide a full interpretation report for the seismic work carried out between January 2001 and June 2001. This report must be provided to MRT by 1 December 2004.
The Minister for Infrastructure, Energy and Resources has already publicly announced a renewal of the Great South Land licence in a media release on Friday 29 October. The media release also included details of various licence conditions, as previously mentioned.