By Andrew Hobbs

THE PETROLEUM industries have been a major focus of the 2014-2015 state budget for South Australia, with the government dedicating over $44 million in new funding to projects that will support the sector.

Chief among the measures is a move to defer royalty payments for shale and tight gas projects for five years from the start of sales, with the royalties to then be repaid interest-free over five years.

South Australia expects its 2013–2014 royalty revenue to be $18.4 million higher than the original budget mainly due to increased sales of crude oil, with additional oil fields commencing production during the year.

There are currently no royalties from unconventional gas projects within South Australia’s forward estimates, meaning the policy change would have no impact on current figures.

This move was welcomed by the Australian Petroleum Production and Exploration Association, which said the deferral should help accelerate investment and job creation.

Also among the policy changes is an additional $4 million for the expansion of the state’s Plan for Accelerated Exploration (PACE) scheme – a grants scheme for cooperative petroleum or geothermal exploration drilling projects.

Treasurer and Mineral Resources Development Minister Tom Koutsantonis said the funding, which follows a recent $10.2 million expansion funding for the program, would strengthen its role in bringing forward new mineral and energy discoveries – leading to more investment in the state.

“Our investment in our home-grown PACE initiative has already provided an increase in state mining production of $2.4 billion since 2004 and positioned SA as a leader in stimulating exploration,” he said.

The Budget also saw funding allocated for the development of a resources precinct at Tonsley Park with a new $32.2 million State Drill Core Reference Library as well as an Onshore Petroleum Centre of Excellence training facility.

APPEA spokesman Stedman Ellis said the South Australian budget would enhance the State’s attractiveness for onshore oil and gas investment.

“The new Onshore Petroleum Centre of Excellence training facility at Tonsley is strongly supported by industry and will help develop and maintain the skilled workforce required here in South Australia and elsewhere,” he said.

The government will also invest a further $4 million in developing its Mining and Petroleum Services Centre of Excellence, first announced in 2013, bringing the total funding over the forward estimates to $10 million.

South Australia will also allocate a further $4 million for the construction of an air strip at Innamincka in conjunction, saying it would work with industry to better service oil and gas exploration in the far north of the state