Knowledge

On 17 November 2014 the Australian Prime Minister, Tony Abbott, and the Chinese President, Xi Jinping, signed a declaration of intent for the China Australia Free Trade Agreement (known as “the ChAFTA”).

The Australian petroleum industry is going through a period of significant change. Small volume refineries – inefficient in world terms – have closed down. Demand for fuel in Australia shows no signs of abating, and our reliance on imported fuel has grown.

Cash flow is crucial to the efficient running of a business. Mounting debt can significantly affect the operations of your company, result in increased interest costs and cause you to be unable to meet your own financial liabilities. If not addressed, debts can reach critical levels and will ultimately lead to insolvency.

Each year 40 billion litres of petrol are sold into the retail and industrial markets of Australia. Petroleum distributors – sandwiched between powerful suppliers and extremely competitive customers – operate in a challenging business environment. Like commodity trading businesses, profits depend on achieving ever higher volumes on ever thinner margins. 

In June 2014 BNP Paribas – the fourth largest bank in the world – agreed to pay the US Government USD8.9 billion (this is not a misprint) as part of a plea agreement for conspiracy to violate US sanctions laws. And don’t be too impressed by the magnitude of that settlement, because the penalties that could have been imposed against BNP had it contested the charges would have been much more than that.

The ACT Government has announced a welcome “stimulus package” for the Canberra property and construction sector.

Australia has a long history of international investment in petroleum exploration and development projects. International investors are a crucial part of the growth and success of Australian petroleum projects and industry. 

The development of China’s coal and seam gas industries is now a key policy goal of the country’s peak economic planning agency, the National Development and Reform Commission (“NDRC”).

While Australia’s refinery industry is suffering – BP is the latest company to announce the closure of an Australian refinery – gas and petroleum exploration has just received a welcome boost.

Australia has a long history of welcoming international investment. Australia’s limited domestic capital, abundant resources and comparatively stable economy has attracted investors from across the world for decades.