By Andrew Hobbs
WESTERN Australia has found more money for resources exploration into the future even as the state faces a record budget deficit of $3.9 billion in the coming financial year.
The state government will continue its exploration incentive scheme (EIS) by allocating another $10 million every year for the next three years – funding the scheme through to 2020.
A further $10 million had already been granted to the scheme until the end of June 2017 under the previous year’s budget – with funding totalling $130.27 million having been committed to the scheme since its inception in 2009.
The co-funded program refunds up to 50 per cent of direct drilling costs, with caps of $150,000 for a multi-hole project, $200,000 for a single deep hole and $30,000 for a prospecting project
Payments are made to successful applicants after completion of drilling and submission of reports which are made available to the public on the Department of Mines and Petroleum’s WAMEX database after a six-month confidentiality period.
Since 2009 the scheme has offered funding to more than 590 projects, resulting in more than 430,000 metres of drilling across the state.
The EIS also supports high level programs in 3D prospectivity mapping, having previously funded unconventional energy studies and reports on shale and tight gas reservoirs.
Sales from Western Australia’s mining and petroleum sector reached just over $91 billion in 2015, with decreased global demand and surplus supply creating downwards pressure on the price of commodities.
This was felt heavily in petroleum products sales, the value of which fell to $19.9 billion in 2015, down 28 per cent on the record achievement of $27.5 billion the previous year.
“Significant decreases in the value of all petroleum products, except natural gas, were seen following the drop in the oil prices,” the budget said.
“The value of crude oil and condensate fell 33% and 37% respectively, while the value of Liquefied Natural Gas (LNG) was down 26% from $15.6 billion in 2014 to $11.5 billion in 2015.”
Predicted state petroleum royalties are forecast to fall from an estimated $6.1 million in 2015-2016 to a 2016-2017 budget estimate of $416,000.
Mineral and petroleum exports contributed around 90% of the state’s total merchandise exports in 2015, with China as the state’s leading export market – accounting for almost 53% of the state’s total merchandise exports.
Japan was the state’s second largest export market, with 16% of the total, while the Republic of Korea was in third place with 7%.
Another $3 million will be spent this year on the Minerals Research Institute of Western Australia – with the government budgeting another $3 million through to 2019.
The state will spend about $4.3 million on an expansion of the Perth Core Library, improving the lifts, storage and viewing areas of the building.
A further $1.9 million will be spent on upgrades to the façade of Mineral House, which the budget papers said had become a safety issue after experiencing noticeable deterioration.