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To report a serious incident to DPC, as required by Section 85(2) of the Petroleum and Geothermal Energy Act 2000, licensees should contact the serious incident report no: (08) 8463 6666.

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Onshore Royalties

All petroleum and other regulated resources (contained onshore) in South Australia are subject to the provisions as specified in the Petroleum and Geothermal Energy Act 2000 (the Act) and the Petroleum and Geothermal Energy Regulations 2013 (the Regulations).

Please refer to Section 43 of the Act for details of your obligations relating to royalty, including the royalty rates, allowable deductions and timing of royalty payments and returns.

Summary of Royalty Provisions

Regulated Substance

Royalty is payable at the rate of 10% of the net post-wellhead sales value (wellhead value) of the regulated substance (e.g. crude oil, propane) recovered at the wellhead.

Wellhead means the casing heads and includes and casing hanger or spool, or tubing hanger, and any flow control equipment up to and including the wing valves.

The wellhead value of the regulated substance recovered is calculated by deducting certain post-wellhead costs from the arms-length gross sales values obtained.

Post-wellhead costs include operating and certain capital expenses directly relating to treating, processing and refining regulated substances after the wellhead, and expenses incurred conveying those regulated substances to the point of delivery to the purchaser.  Pre-wellhead costs such as those incurred in exploration, drilling or recovery activities are not relevant to the calculation of royalty.


Geothermal

Royalty on Geothermal Energy is 2.5% of the wellhead value of the geothermal energy. The value at the wellhead is calculated by subtracting from the sales value, costs reasonably incurred by the producer in getting the energy to the point of delivery to the purchaser (exclusive of GST).

The value at the wellhead of a regulated substance or geothermal energy is to be assessed by the Minister. The Minister may, on application by the producer, or on the Minister's own initiative, review and revise an earlier assessment of the value at the wellhead of a regulated substance or geothermal energy.

Lodgement of Royalties Returns - PReL

Royalty returns are required to be submitted within 30 days after the end of each month in which a regulated substance or geothermal energy is produced.

An online system called Petroleum Returns e-Lodgement (PReL) has been developed to enable the lodgement of petroleum returns required under the Act taking into account the lodgement requirements imposed by the Guidelines for payment of royalty and provision of information (Royalty Guidelines).

Only entities that are required to submit royalty returns (or opt to submit returns on behalf of their joint venture partners) are provided access to PReL. 

PReL captures the monthly return information required under Section 43(4) of the Act, namely:

  • The quantity of the regulated substance or energy produced; and
  • The quantity of any regulated substance or energy sold, and the amount realised on sale; and
  • Any other information necessary to calculate royalty payable for a return period (e.g. deductions and other items covered in the Royalty Guidelines).

Supporting records are required to be attached to each return lodgement, and comments can be added (and in some instances are required) to provide context to returns.

If you experience trouble accessing PReL or are a new producer requiring access, please contact the Resource Royalties Team directly on +61 8 8463 3095 or  DSD.Royalties@sa.gov.au.

A PReL User Guide is available here.

Payment of Royalty

Royalty payments can be made by cheque (made payable to the Department of State Development) or by direct bank transfer to:

Bank:

Commonwealth Bank of Australia
100 King William Street
Adelaide SA 5000
  
BSB:065-266
  
BIC/Swift Code:CTBAAU2S
  
Account Name:Department of State Development - Collections
  
Account Number:1000 0565

Offshore Royalties

Details about royalties for petroleum and other regulated substances recovered from offshore South Australia please refer to the Department of Industry, Innovation and Science website at www.industry.gov.au

Audits

This information is provided to help you understand the audit process and answer some questions you may have. It also provides you with some details of your rights and obligations during an audit.

Audits are selected in a variety of ways:

* Projects designed to target specific problems or issues in legislation
* Industry trend analysis
* Tip offs

* Follow-up of information received from a variety of sources
* Random selection for the routine verification and coverage of the royalty revenue base

The Resource Royalties Team anticipates that all licensees will be audited at least once every 2 years.

In most cases an auditor will:

* Write, telephone or visit you to let you know that an audit will be conducted
* Explain the process and the scope of the audit
* Specify the records to be produced
* Give you a reasonable period to assemble those records for either submission for desk audit or arranging a time and place to interview you or a representative

* Confirm arrangements in writing

The field audits will be conducted by Authorised Officers appointed pursuant to the Petroleum and Geothermal Energy Act 2000

During an audit, the auditor will conduct interviews and make enquiries to establish compliance with the particular legislation and examine and test some of your internal financial records.

You will receive written advice of the outcome of the audit and any proposed action.

You should ensure that the records the investigator has requested are ready for examination. If you require further time to collate the records, please inform the investigator prior to the commencement of the audit.

How long an audit takes depends to a large extent on what type of audit - full audit, interim audit, theme audit or spot check - is undertaken.

If you have any questions about the arrangements for the audit or the processes involved, contact the auditor for assistance.

Investigators have a range of powers. In general, these powers permit the investigator to:

* Gain access to buildings and property and remain there
* Inspect, examine and copy any documents or records
* Require a person to answer questions and provide information
* Require a person to take reasonable steps to obtain information relevant to the investigation and to pass it on to the authorised officer 

If a licensee fails to comply with an investigator's lawful requests, it is possible that penalties such as a fine can be applied.

During an audit, you are obliged to provide:

* The investigator reasonable assistance and facilities
* Complete and honest answers and explanations to questions
* Prompt, full and free access to all relevant information, records, documents, data and systems as required

If an audit is to be conducted, you have the right to:

* Ask for reasonable time to produce your records
* Negotiate the time and place for the investigation with the investigator

* Receive written confirmation of these arrangements

During an audit, you have the right to:

* Sight the investigator's identification and authority
* Expect the investigator to be professional and courteous
* Involve your professional representative in the process
* Ask how long the investigation is likely to take
* Expect your affairs to be treated with strict confidentiality

* Be given the opportunity to explain the reasons for any irregularities, discrepancies, decisions etc

At the end of the audit, you have the right to:

* Receive an explanation of the results or findings
* Ask the investigator how an assessment of royalty payable has been applied
* Ask for advice about the objection and appeal process
* Discuss any aspect of your case with the investigator and/or their manager

If you are dissatisfied with certain decisions or an assessment of the value at the well head of a regulated substance or geothermal energy you are entitled to appeal against the assessment to the Land and Valuation Court.

Information gathered during audit is treated in the strictest confidence and will not be used or divulged except for purposes required by law.

For more information, contact:

Resource Royalties Team
Phone: + 61 8 8429 2426
Email: DSD.Royalty@sa.gov.au