Petroleum Excise (Prices) Amendment (Tidepole Production Area) Regulations 2022

Administered by Department of the Treasury

Legislation au F2022L00530 Regulations Not in force Legislative Instrument

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EXPLANATORY STATEMENT

Issued by authority of the Assistant Treasurer, Minister for Housing and Minister for Homelessness, Social and Community Housing

Petroleum Excise (Prices) Act 1987

Petroleum Excise (Prices) Amendment (Tidepole Production Area) Regulations 2022

The Petroleum Excise (Prices) Act 1987 (the Petroleum Excise Act) establishes prices in relation to excise duty that is to be imposed on certain crude petroleum oil and condensate. Section 14 of the Petroleum Excise Act provides that the Governor‑General may make regulations prescribing matters required or permitted by that Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to that Act.

The Petroleum Excise (Prices) Regulations 2018 (the Petroleum Regulations) sets out the mechanics and the prescribed information used to calculate the Volume Weighted Average Realised (VOLWARE) prices for stabilised crude petroleum oil and condensate.

The purpose of the Petroleum Excise (Prices) Amendment (Tidepole Production Area) Regulations 2022 (the Regulations) is to specify the VOLWARE commencement date for excisable condensate that is obtained from the Tidepole field. Tidepole is an offshore field situated off the coast of Western Australia in the Carnarvon Basin.

The Excise Tariff Act 1921 (the Excise Tariff Act) outlines excise duty on a variety of goods. Section 6CA of the Excise Tariff Act specifies the requirements and excise duty calculations for a prescribed condensate production area.

Section 6AB of the Excise Tariff Act specifies that the price used to determine excise duties payable on stabilised crude petroleum oil and condensate is the final VOLWARE price or, if not yet determined, the interim VOLWARE price in respect of production obtained from production areas that are prescribed production areas under by-laws.

The Commissioner of Taxation must make by-laws that prescribe exempt offshore fields, production areas and any conditions where the production of condensate is free of excise. For the purposes of subsection 3(1) of the Excise Tariff Act, the Commissioner of Taxation has prescribed Tidepole as an exempt offshore field through Excise By‑law No. 114.

In addition, Tidepole is a prescribed condensate production area in the Excise (Prescribed Condensate Production Area) By‑Law 2022. These two by-laws enable production of condensate of up to 4,767.3 megalitres from Tidpeole to be exempt from excise duty and is consistent with the Resources Minister’s decision in July 2020 that expressed satisfaction that Tidepole is an independent production area. The by-laws do not specify a specific VOLWARE commencement date which is necessary to calculate the excise duty.

The table at subsection 7(6) of the Petroleum Regulations sets out the VOLWARE commencement dates for production areas of oil producing regions.

To ensure that excise is payable on productions of condensate that exceed the excise‑free threshold of 4,767.3 megalitres, a VOLWARE commencement date must be specified in the Petroleum Regulations.

Subsection 7(6) of the Petroleum Regulations is amended to add Tidpole as a production area in the oil producing region of the North West Shelf project area. The VOLWARE commencement date for excisable condensate obtained from Tidepole is the date from which Tidepole exceeds the excise free threshold of 4,767.3 megalitres.

To avoid doubt, item 2 includes a note that specifies production levels that surpass 4,767.3 megalitres are subject to excise duty. The amendments support the
by-laws and ensures complete application of the excise duty on condensate produced from Tidepole.

The Regulations prescribe that excisable condensate from Tidepole commences on the date that production exceeds the excise-free threshold. These amendments support the implementation of enforcing duties of excise on condensate obtained from Tidepole.

Public consultation was not undertaken on the Regulations as the amendments only impact one production license holder. The production license holder is aware of these amendments from the Resources Minister’s decision in July 2020 and was consulted on the Regulations. The Australian Taxation Office and the Department of Industry, Science, Energy and Resources have been consulted throughout the development of this measure.

The Office of Best Practice Regulation has been consulted and advised the amendments are estimated to have a minor impact on compliance costs. Therefore, the preparation of a Regulation Impact Statement is not required (OBPR ID OBPR22‑01879).

The Petroleum Excise Act does not specify any conditions that need to be met before the power to make the Regulations may be exercised.

The Regulations are a legislative instrument for the purposes of the Legislation
Act 2003. As an amending instrument, the Regulations are subject to the automatic repeal provisions of section 48A of the Legislation Act 2003.

The Regulations commence on 1 July 2022.

A statement of Compatibility with Human Rights is in the Attachment.


ATTACHMENT

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Petroleum Excise (Prices) Amendment (Tidepole Production Area)
Regulations 2022

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

The purpose of the Petroleum Excise (Prices) Amendment (Tidepole Production Area) Regulations 2022 (the Regulations) is to specify the Volume Weighted Average Realised (VOLWARE) commencement date for excisable condensate that is obtained from the Tidepole field. Tidepole is an offshore field situated off the coast of Western Australia in the Carnarvon Basin.

To ensure that excise is payable on productions of condensate that exceed the excise free threshold of 4,767.3 megalitres, a VOLWARE commencement date must be specified in the Petroleum Excise (Prices) Regulations 2018. The Regulations prescribe that excisable condensate from Tidepole commences on the date that production exceeds the excise-free threshold. These amendments support the implementation of enforcing duties of excise on condensate obtained from Tidepole.

Human rights implications

This Legislative Instrument does not apply to individuals and only relates to corporations and therefore does not engage any of the applicable rights or freedoms.

Conclusion

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.

 

Overview

The Petroleum Excise (Prices) Amendment (Tidepole Production Area) Regulations 2022 were introduced to address a specific regulatory gap concerning the imposition of excise duty on condensate produced from the Tidepole offshore field off the coast of Western Australia. Enacted by the Australian Government, these Regulations amend the Petroleum Excise (Prices) Regulations 2018 to specify the Volume Weighted Average Realised (VOLWARE) commencement date for excisable condensate obtained from Tidepole. This measure is necessary to ensure that excise duty is correctly applied once production exceeds the excise-free threshold of 4,767.3 megalitres. The policy objective is to enforce excise duties on condensate from Tidepole in a manner consistent with the broader legislative framework, including the Excise Tariff Act 1921 and associated by-laws that exempt certain production levels from excise.

Scope and Application

The Petroleum Excise (Prices) Amendment (Tidepole Production Area) Regulations 2022 applies specifically to the production and taxation of excisable condensate obtained from the Tidepole field, an offshore oil field located off the coast of Western Australia in the Carnarvon Basin. The Regulations aim to specify the Volume Weighted Average Realised (VOLWARE) commencement date for excisable condensate, ensuring that excise duty is applied to condensate production that exceeds the specified threshold of 4,767.3 megalitres. The Act pertains to entities involved in the production and sale of excisable petroleum products within the defined geographical scope of the Tidepole production area. It operates within the jurisdictional framework of the Commonwealth of Australia, as outlined in the Petroleum Excise (Prices) Act 1987 and the Excise Tariff Act 1921. The Regulations are an amendment to the existing Petroleum Excise (Prices) Regulations 2018, designed to align with the specific conditions and thresholds set by the Excise By-law No. 114 and the Excise (Prescribed Condensate Production Area) By-Law 2022. These by-laws exempt the Tidepole field from excise duty up to a certain production level, necessitating the specification of a VOLWARE commencement date for amounts exceeding this threshold. The Regulations commenced on 1 July 2022, and they do not apply to individuals but rather to corporate entities involved in the production and sale of condensate within the stipulated conditions.

Key Provisions

The Petroleum Excise (Prices) Amendment (Tidepole Production Area) Regulations 2022 (Regulations) amend the Petroleum Excise (Prices) Regulations 2018 to specify the Volume Weighted Average Realised (VOLWARE) commencement date for excisable condensate from the Tidepole field (section 2(1)). The VOLWARE commencement date is the date from which production exceeds the excise-free threshold of 4,767.3 megalitres (section 2(1)). These Regulations support the implementation of excise duties on condensate obtained from Tidepole, ensuring that excise is payable on productions that surpass the specified threshold (section 2(1)). The Regulations impose specific obligations on the relevant entities, primarily the production license holder for the Tidepole field. These entities are required to ensure that the VOLWARE commencement date is accurately determined and that any production exceeding the excise-free threshold is subject to applicable excise duties (section 2(1)). This involves monitoring production levels and ensuring compliance with the specified VOLWARE commencement date for excisable condensate. The Regulations ensure that the production license holder is aware of the amendments and has been consulted, as indicated by the Resources Minister’s decision in July 2020 (subsection 7(6)). Failure to comply with the provisions of the Regulations may result in civil or criminal consequences. While specific penalties are not outlined in the Regulations, non-compliance with excise duty requirements can lead to penalties under the Excise Tariff Act 1921 and the Petroleum Excise Act 1987. These penalties can include fines and other legal actions for non-compliance, with the exact penalties determined by the relevant Acts. The Regulations support the implementation of enforcing duties of excise on condensate obtained from Tidepole and ensure that appropriate measures are taken to manage and regulate the production of condensate in this area (section 2(1)).

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.