AUSTRALIAN oil and gas service companies will get the “best treatment China has offered” under any of its free trade agreements, following the November signing of the landmark deal between the two countries.
As part of the deal, China will allow Australian services suppliers an opportunity unique among non-Chinese companies to provide technical consulting and field services in coal bed methane and shale gas extraction.
“China has also guaranteed access for Australian suppliers to provide a range of services related to exploiting oil and gas, iron, copper and manganese resources in cooperation with Chinese partners,” a Department of Foreign Affairs and Trade (DFAT) spokesman said.
The deal will also “lock-in” the zero-tariffs for crude oil and LNG currently enjoyed by Australian exporters.
“China is Australia’s largest resources and energy market, with exports worth over $83 billion in 2013,” the spokesman said.
“A number of Australia’s resource and energy products already enter China duty free, including crude petroleum oils and liquefied natural gas.
“[The Free Trade Agreement] will provide greater certainty for our exporters as they consider current and future market opportunities in China.”
DFAT said the deal would also eliminate Australian tariffs on Chinese resources, energy and manufactured goods, which would lower input costs for the oil and gas industry.
Benefits are expected to flow for the manufacturing, resources and services sectors, with the deal to also provide growth in two-way investment between the countries.
Negotiations are continuing with Indian authorities to forge the Australia-India Comprehensive Economic Cooperation Agreement, which is expected to deliver similar benefits to the Australian economy.