New Budget Suits Oil and Gas Industry

Date posted: July 28, 2014

The oil and gas industry responded positively to the Federal budget, which promises a better future for oil and gas companies, including pipeline contractors like Reay Services Group. The Australian oil and gas industry recognises the positive impact that the budget bodes for the economy, which will definitely translate to more business opportunities for oil and gas companies and contractors.

The industry considers the decision on the budget as recognition of important pipeline construction Aus as a major contributor to the country’s economy. It is expected that the industry will grow some more in the coming years as there are new projects that recently came on line. The Federal budget includes appropriation of $A100 million to the Exploration Development Incentive. This will target junior exploration companies looking for new mineral deposits.

Recognising Challenges

Despite the growth forecasts, the Federal institution recognises the challenges being faced by the LNG industry. The LNG industry is facing supply issues as exports are expected to double by 2015 or 2016. As a result of the rapid growth in the industry, Australia is poised to replace Qatar as the global leader in LNG exports.

Industry Position

Reay Services Group and the rest of the pipeline industry are looking forward to a more robust national economy, which they believe will boost business activities in pipeline construction. The Australian Pipeline Industry Association (APIA) stands firm that they do not depend on monetary assistance from the government, so it is a welcomed development for the private sector to improve economically. This will mean increased demand for energy, which will be good for companies in the oil and gas industry.

The APIA expressed disappointments in some portions of the budget, but it also recognises that the overall aim is to bolster the economy, which will be highly beneficial to the industry as a whole.

The Australian Petroleum Production and Exploration Association believes that the budget is well proportioned to cover all sectors of the Australian economy. This is deemed beneficial as it ensures that new avenues of economic growth are covered. The association expressed that the oil and gas industry’s role is in investments in the next phase of projects that are currently being reviewed.

The Australian Mines and Metals Association insists that reforms are needed to support the budget measures. In particular, reforms are needed in new project agreements, unions and strike action as well as law implementation in the construction industry. The industry association expressed that reforms are needed in order for the industry to capture all the opportunities to accelerate economic growth.