Welcome to Western AustraliaWestern Australia’sOil and Gas Sector

THE BASICS (1)• Landmass of 2.5m square kilometres; Coastline of 12,900 kms

• Population of 2.5m (10% of Australia)

• Economic growth of 6.7% in 2011-12; Unemployment rate of 5%

• Business investment of $75b (or 28% of Australia’s total)

• Resource projects UC or committed is $177b (53% of Australian total)

• Merchandise exports: A$117b (47% of Australia’s total)

• Minerals and energy exports: 57% of Australia’s total

THE BASICS (2)• Home to 41% (896) of total listings (2,200) on ASX

• Home to 68% of resource companies (997) listed on ASX

• >50% of small / mid-cap resource companies on ASX are based in WA

• On the same time zone (+/- 2 hours) as 60% of world’s population

• Perth is 2.5 hours ahead of Mumbai

• Small population = major exporter of commodities

• Perth is one of the world’s most liveable cities (EIU)

• Multicultural population from over 200 countries

LNG PROJECTS (2)PROJECTED GLOBAL PRODUCTION 2020

• Qatar 2012: 78mtpa 2020: 78mtpa • Australia 2012: 18mtpa 2020: 92mtpa• (WA 2012: 18mtpa 2020: 55mtpa) • AU$3 billion per year for exploration

• Top finance deals for all sectors: Ichthys 1st, Australia Pacific 2nd, Wheatstone 9th (TR)

• 149 live titles onshore and within State Waters

• Geoscience Australia: estimate reserves of 103 Tcf conventional & 33 Tcf CBM

• 92% of conventional reserves are in Carnarvon, Browse, Bonaparte basins

SHALE & TIGHT GAS – WESTERN AUSTRALIA (1) • USEIA: 437Tcf technically recoverable shale gas reserves in Australia (2012)

• Ranks Australia 6th behind China, USA, Argentina, Mexico, South Africa

• Estimated resource in Canning Basin is 229 Tcf in Goldwyer formation

o Twice the size of known Western Australia offshore resourceso Mitsubishi; ConocoPhillips; Hess; PetroChina; Alcoao Canning Basin State Agreement

• Perth Basin has an anticipated 71 Tcf

o Arrowsmith 2: AWE 44%, Norwest Energy 28%, Bharat 28%

• Total 280Tcf sufficient to supply WA gas needs for 500 years

SHALE & TIGHT GAS – WESTERN AUSTRALIA (2)

• ACLA: up to 27 Tcm in Canning basin (> entire Australian gas resource)

• Early exploration or proof of concept phase – production 5-10 years away

• “Fraccing” has been used for 780 wells since 1958 – no incidents

• Exploration Incentive Scheme – up to $400,000 for shale/tight gas

• Most IOC’s and Oilfield Service companies active in UCG are found in Perth

DEPARTMENT OF MINES & PETROLEUM (1)Exploration Permit• Initial 6 year permit term• 2 subsequent 5 year renewals then terminated• 50% relinquishment at end of each term Production Licence• Based on continued production• Run for the life of the field plus 5 years• Must seek permission to cease production Royalties• State - Royalty

o ~10 -12.5% of wellhead value of petroleum produced• Federal - Petroleum Resource Rent Tax (PRRT)

o 40% of taxable profit of a given project o Deductible against income tax o A number of deductible costs for both of above

DEPARTMENT OF MINES & PETROLEUM (2)Significant Taxes• Based on continued production• 30 % company tax rate • 10% goods and service tax (GST) Timelines• From Close of Bids to Grant (including Native Title process)

o 2 years for an onshore EPo 6 months for State Waters EP

Farm-in to Existing Titles• Ownership changes via equity placements: www.dmp.wa.gov.au/WABS Company Takeover• Subject to Foreign Investment Review Board (FIRB) review

Geoscientific Data & Mapping• Readily accessible & inexpensive

AVERAGE NATURAL GAS PRICES

OIL & GAS INDUSTRY – WESTERN AUSTRALIA (1)

• 6 of top 7 global IOC’s have national HQ in Perth

• > 320 international companies service WA’s O&G sector• > 50 operating fields (50% in Commonwealth waters)

• Perth: 11th for global energy company presence (Platt’s Top 100)• Perth: foundation member of World Energy Cities Partnership (WECP)

• Perth hosts:o Chevron Global Technology Centre; GE Oil & Gas Technical Training Centreo IBM Petroleum Solution Centre; Shell FLNG Training & Research Centre

o Australian Resources Research Centre (ARRC)o CSIRO Petroleum Divisiono CRC’s for Deep Exploration Technologies & Integrated Hydrometallurgy

OIL & GAS INDUSTRY – WESTERN AUSTRALIA (2)

• University of Western Australia & Curtin University of Technology• Courses include petroleum geology, geophysics & engineering

• Western Australia is THE global resource centre of excellence:o Mining innovation and technology leadero Operational HQ for BHP Billiton and Rio Tintoo Alcoa, Newmont, Barrick, IBM, First Quantum, Cristal, BASF, Tronox, Iluka, Cliffs,

Mitsui, FMG o Produce global market share of >12 commoditieso >50 minerals; >500 commercial projects; 999 operating mines

• In 2011 O&G services contributed $4.3bn to Australia’s economy

• MOU: India's DG of Hydrocarbons and WA's Industry and Resources (DOIR) re cooperation and understanding on oil- and gas-related issues (2008)

• Perth: host triennial LNG series - LNG 18 – in April 2016

DOWNSTREAM INVESTMENT OPPORTUNITIES (1)• Subsea & Marine

o Geotechnical / geophysical surveyingo Expanded ROV operator capacityo Deep sea engineering and processingo Baseline marine systemso Subsea flexible pipe technologyo Offshore supply, operation and maintenance vessels

• Unconventional Gaso Front End Engineering & Design (FEED)o Onshore pipeline developmento Horizontal drill rig expertise and maintenanceo Micro-seismic monitoringo Water management consultancies

• Operations & Maintenance (30-50 years)o Services to LNG projectso Inspection serviceso Management and production functionso On-location 24/7 support serviceso Specialised inspection and auditing serviceso Production allocation expertise for sharing LNG facilities

DOWNSTREAM INVESTMENT OPPORTUNITIES (2)• Engineering, Design and Fabrication

o Brownfield engineeringo Specialist engineering (process control, process safety, safeguarding)o Front End Engineering & Design (FEED)o Centre of Excellence in LNG Design for region

• Transport & Logistics o WA leads the nation in rotary aviation but lacks training and facilitieso FIFO research/facility hub to expand WA’s global pre-eminence o Debottlenecking of public infrastructureo LNG conversion to land-based vehicles

• Laboratory & Testing Serviceso Specialist common use facility (wave dynamics or water quality steam)o Geoscience reserve certification expertise

• Emergency Response & Safetyo Competency-based training, and high end workshopso Safety, risk analysis and assurance expertise o Industry specific onsite emergency support and medivac expertise

• Research and Innovationo Mini/micro LNG facilitieso Floating LNG o Hydraulic fracturingo Intelligent operations (automation; command/control)

DOWNSTREAM INVESTMENT OPPORTUNITIES (2)• Engineering, Design and Fabrication

o Brownfield engineeringo Specialist engineering (process control, process safety, safeguarding)o Front End Engineering & Design (FEED)o Centre of Excellence in LNG Design for region

• Transport & Logistics o WA leads the nation in rotary aviation but lacks training and facilitieso FIFO research/facility hub to expand WA’s global pre-eminence o Debottlenecking of public infrastructureo LNG conversion to land-based vehicles

• Laboratory & Testing Serviceso Specialist common use facility (wave dynamics or water quality steam)o Geoscience reserve certification expertise

• Emergency Response & Safetyo Competency-based training, and high end workshopso Safety, risk analysis and assurance expertise o Industry specific onsite emergency support and medivac expertise

• Research and Innovationo Mini/micro LNG facilitieso Floating LNG o Hydraulic fracturingo Intelligent operations (automation; command/control)

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India — MumbaiBhanu Rahoni – ManagerGovt. of Western AustraliaTrade & Investment Office93 Jolly Maker Chambers No 2Nariman PointMumbai - 400 021, India

Tel: +91 22 6630 3973 E Mail: bhanu.rahoni@dsd.wa.gov.auWebsite: www.watoindia.in

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WESTERN AUSTRALIA TRADE AND INVESTMENT OFFICE