Introduction to Oil & Gas in Australia, January 2014
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This document provides an overview of the Australian gas market and considerations for UK businesses looking to do business in Australia. It discusses Australia's stable economy, similarities to the UK, major gas projects and operators, and the process for project approval and tendering. It also outlines practical issues for setting up a business in Australia such as establishing a subsidiary or branch, registering with relevant authorities, tax rates and requirements, and employer obligations. UKTI and its representatives are available to assist UK businesses with market information, introductions and promoting opportunities in Australia.
Introduction to Oil & Gas in Australia, January 2014
- 1. 29 January 2014 Introduction to Australian Gas Market Linda Miles, Trade Development Manager, UKTI Perth Colleen Handy, Tax Manager, UHY Haines Norton
- 2. 2 Australia A Comparison in Geography
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- 4. 4 Why should you do business in Australia? Strong and stable economy AAA credit rating Good current and future growth prospects Anglo-Australian bonds Common language and customs High regard in Australia for UK products as High Quality Low Cost Similar business, legal and regulatory framework Strong Australian Dollar making UK goods and services more affordable Strong IP protection Strong presence of British businesses in Australia already
- 5. 5 Why should you do business in Australia? Gateway to Asia Easy access to a region with the greatest potential growth in the world Educated, multilingual, and skilled workforce Quality of life Five Australasian cities listed in the worlds Top Ten most liveable cities (The Economist) Strong, stable economy 22 years without a recession GDP per capita in worlds top ten Average growth rate of 2.5% Similar to UK More British people in Australia than any other foreign country Similar business culture, tax, legal regulations
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- 7. 7 OPERATO R UK BHP Billiton* BP* Shell* Europe GDF Suez* (France) Maersk Oil* (Denmark) Total* (France) Australia Arrow Energy Origin Santos Woodside America Apache# Chevron* ConocoPhillips* ExxonMobil* Hess* Asia Inpex* (Japan) PetroChina* (China) Sinopec* (China) *Companies with a UK office #Company with presence in UK North Sea
- 8. Established market in Australia
- 9. 9 Northern Territory Projects Bonaparte LNG Caldita Barossa Cash Maple Evans Shoal Heron Ichthys
- 11. 11 Queensland Projects CSG to LNG Unconventional Gas
- 12. 12 Western Australia Projects Browse Crown Crux Equus Gorgon Laverda Macedon Olympus Pluto Poseidon Prelude Scarborough Wheatstone Zola
- 14. 14 Project Opportunities State Company Project Status NT ConocoPhillips Caldita Barossa Feasibility NT Eni Heron Feasibility NT GDF Suez Bonaparte LNG Pre-feed NT Inpex Ichthys Construction NT PTTEP Cash Maple Feasibility NT Shell Evans Shoal Feasibility NT Woodside Sunrise Feasibility NT ConocoPhillips Darwin LNG Operation State Company Project Status VIC ExxonMobil Bass Strait Operation
- 15. 15 State Company Project Status WA Apache Olympus Feasibility WA Apache Zola Feasibility WA BHP Billiton Macedon Operation WA Chevron Gorgon Construction WA Chevron Wheatstone Construction WA ConocoPhillips Poseidon Feasibility WA ExxonMobil Scarborough Feasibility WA Hess Equus Feed WA Santos Crown Feasibility WA Shell Crux Feasibility WA Shell Prelude Construction WA Woodside Browse Feasibility WA Woodside Laverda Feasibility WA Woodside Pluto Operation
- 16. 16 Process of Tender Approval Up to $50mn $50mn to $300mn $300mn to $1bn More than $1bn P R E / F E E D E P C / M Even if you are supplying into a Tier 5 provider, it is probable that you will require Approved Supplier Status from Tiers 4, 3, and 2, as well as the Operator. This is unless you are only supplying component parts.
- 17. 17 *While an existing relationship or past experience with a company may assist in proving your track record etc, do not expect it to enable side-stepping or skipping parts of the above process.
- 19. Colleen Handy January 2014 Establishing your business in Australia practical issues In partnership with:
- 20. 20 Setting up business Practical issues Expanding your business to Australia is a big step! Planning your expansion is key ! Speak to others who have made the move, local representatives, accountants, lawyers, Business Development Networks etc Dont assume the laws and regulations will be the same as the UK Implementing a tax efficient structure is key to ensuring the commercial success of your expansion to Australia In partnership with:
- 21. 21 Setting up business Branch vs Subsidiary Tax payable by a PE/branch or a subsidiary is the same Currently rate of tax is 30% on net profits Business assets owned by a non-resident and part of a PE/Branch operations in Australia remain within scope of Capital Gains Tax (CGT) In contrast, the disposal of shares in a subsidiary company by a non-resident will be outside the scope of CGT, unless that subsidiarys value is more than 50% attributable to real property Advantages of subsidiary company: limited liability, lower level of disclosure compared to a branch, generally quicker to set up In partnership with:
- 22. 22 Setting up business Subsidiary It can take 1-2 days to register a subsidiary in Australia Registering involves lodging an application with ASIC (equivalent of the UKs Companies House) Once registered the company is provided with an ACN (Australian Company Number) which must be shown on letterheads and other business documents The company is also required to register with the Australian Taxation Office (ATO) for its ABN (Australian Business Number), GST (similar to VAT), PAYG (similar to PAYE) In partnership with:
- 23. 23 Registering as a foreign Company A foreign company or similar entity is able to carry on a business on its own account (branch or subsidiary) provided it has registered in Australia. Appointing and authorising at least one local agent or director to act on its behalf Maintaining a registered office in Australia Lodging specific company documents and financial statements with ASIC Identifying the business as a foreign company in written contracts and correspondence In partnership with:
- 24. 24 Setting up business Branch It can take a long time to register a branch in Australia Registering involves lodging an application with ASIC (equivalent of the UKs Companies House) and original or certified copies of various documents are required The branch is also required to register with the Australian Taxation Office (ATO) for its ABN (Australian Business Number), GST (similar to VAT), PAYG (similar to PAYE) In partnership with:
- 25. 25 Setting up business ATO requirements Subsidiaries and branches prepare accounts and file tax returns reporting income and deductions to 30 June each year With ATO approval a different accounting period ending on another date may be adopted Deductions are similar to those permitted in the UK and include R&D incentives Transfer pricing policies may be needed even for SMEs In partnership with:
- 26. 26 Setting up business Employer requirements As an employer you must: Meet minimum wage regulations, EBAs, Union requirements, visa requirements Pay superannuation on Ordinary Times Earnings Pay a State Payroll Tax (the rate differs depending on the State the employees are based in) Have adequate workers compensation insurance (compulsory) Research the working hours, holiday pay, long leave and other employment law requirements Comply with Health and Safety Requirements In partnership with:
- 27. 27 Setting up business Tax rates Rates of tax in Australia for residents to 30 June 2014: In partnership with: Threshold Tax rate % $0- $18,200 0 $18,201 - $37,000 19 $37,001 - $80,000 32.5 $80,001 - $180,000 37 $180,001 + 45
- 28. 28 Setting up business Superannuation Superannuation is a specially designed long term investment for retirement savings Employers are obliged to pay a minimum superannuation amount for each employee into a recognised superannuation fund Currently this is 9.25%, set to rise to 12% by 30 June 2020, of ordinary times earnings In partnership with:
- 29. 29 What can UKTI Australia do for you? Introduction services: Orchestration of meetings with prospective business partners, distributors, suppliers, and Australian Government bodies Local knowledge: Tailored, experienced, and impartial advice about how to maximise your chances of success in Australia Market reports: Provision of up-to-date information about the industry and market, relevant to your business case Market testing: Opportunities to reduce the cost, risk, and time of establishing your business in Australia, by working in one of our business centres
- 30. 30 What can UKTI Australia do for you? Online enlightenment: Provision of industry-specific web-seminars (webinars), accessible from your own homes and businesses in the UK Product launch: Access to one of our boardrooms, for use in marketing your business (available in most Australian state capitals) Promotion: PR services through local media, UKTI e-newsletters, e-marketing, and social media campaigns
- 31. 31 Whats next? Feel free to ask questions after this presentation Follow the conversation on LinkedIn Follow the UKTI twitter account: @uktiaustralia Keep yourself updated on the latest Australian business opportunities Attend UKTIs industry-specific webinars Visit our website: gov.uk/world/australia
- 32. 32 Questions? Linda Miles Trade Development Manager Email: linda.miles@fco.gov.uk Chris Egan Trade Development Officer Email: chris.egan@fco.gov.uk Colleen Handy Tax Manager, UHY Haines Norton Email: chandy@uhyhn.com.au Information and images courtesy of: Arkay Career Services, Western Australian Department of State Development, Queensland Government, Invest Queensland, The Economist Intelligence Units Liveability Ranking and Overview, 2013 Francis Norman, Xodus Group, PESA News, PESA News Resources Online, The Sydney Morning Herald, UK Trade & Investment, Vividus