Australia: tax break makes offshore exploration more attractive

THE GOVERNMENT has introduced a new tax incentive to encourage exploration in some remote offshore areas. Companies will now be able to offset 150% of exploration costs in designated frontier areas against the petroleum-resource rent tax due on their income. The measure was welcomed by Australian oil producers, which have been calling for more tax breaks on exploration. Up to 20% of the annual offshore acreage releases from 2004 to 2008 will be designated as frontier areas. This includes six of the 31 areas released in March under the latest bidding rounds; T04-5, in the Sorell basin off west Tasmania; W04-2 and W04-4, in the deep-water Exmouth plateau, off Western Australia; W04-15 and W04-