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6 Oil & Gas Journal
Apr. 3, 2017
GENERAL INTEREST QUICK TAKES
Aramco president welcomes tax-rate cut
Saudi Aramco Pres. and Chief Executive Officer Amin H. Nasser welcomed a Mar. 27 tax cut that he said would bring his
company’s tax burden “in line with international benchmarks.”
The 50% rate applies to companies with capital investments
in Saudi Arabia exceeding $100 billion. Rates of 65-85% apply
to smaller investors.
In a follow-up statement, Finance Minister Mohammed bin
Abdullah Al-Jadaan said the rate cuts won’t hurt the government’s ability to fund public services. He said revenue declines
from the tax cut would be offset by dividends from state-owned
companies and other investment income.
Canadian budget nips drilling preferences
Current-year deductibility of exploratory drilling costs succumbs to what the Canadian government describes as a campaign against “inefficient fossil-fuel subsidies” in a federal budget proposed Mar. 22.
The budget treats costs of successful exploration as those of
development wells now are treated: written down over time on
a declining-balance basis.
Costs of unsuccessful exploratory wells still could be
charged to expense in the year of occurrence.
The budget also ends the current ability of small producers to expense costs of development drilling as they’re incurred
when the timing preference benefits flow-through investors.
“The government has a strong plan to invest in clean
growth that will help create middle-class jobs and get the
country on the path to a low-carbon economy,” said the in-
troduction to the changes in a budget document. “Consistent
with this plan, Canada has made a commitment with its part-
ners in the G20 and Asia-Pacific Economic Cooperation to
phase out inefficient fossil-fuel subsidies. Such subsidies can
encourage wasteful consumption, impede investment in clean
energy sources, and undermine efforts to combat the threat of
Keep eastern gulf closed to leasing, Fla. lawmakers say
US Sen. Bill Nelson (D-Fla.) and 16 members of the US House
of Representatives from the Sunshine State urged US Sec. of the
Interior Ryan Zinke to keep the eastern Gulf of Mexico closed
to oil and gas activity if he decides to develop a new 2017-22 US
Outer Continental Shelf management plan.
“Drilling in this area threatens Florida’s multibillion-dollar,
tourism-driven economy and is incompatible with the military
training and weapons testing that occurs there,” they said in a
Mar. 24 letter to the secretary. “If you do choose to draft a new
plan, we strongly urge you to keep the eastern gulf off-limits.”
When Congress passed the 2006 Gulf of Mexico Energy Security Act, it closed most of the eastern gulf to oil and gas activity, including all areas east of the Military Mission Line, Nelson
and the other members of Florida’s congressional delegation
said in their letter.
“In 2015, the Department of Defense reiterated its opposition to offshore drilling activities in this vital training area,” the
federal lawmakers said.
EXPLORATION & DEVELOPMENT QUICK TAKES
New Zealand opens 2017 exploration permit round
The New Zealand government is hoping for a more positive industry response to its latest exploration permit round than it
received in 2016.
Energy and Resources Minister Judith Collins announced
the new round of eight blocks this week, calling for tenders to
five offshore areas, two onshore areas, and one area a combination of both.
The offshore blocks include:
• One 150,566-sq-km area surrounding existing permits