Commonwealth of Australia Explanatory Memoranda

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CUSTOMS TARIFF AMENDMENT (GREATER SUNRISE) BILL 2007

CUSTOMS TARIFF AMENDMENT (GREATER SUNRISE) BILL 2007


GENERAL OUTLINE

This Bill makes consequential amendments to the Customs Tariff Act 1995 necessary for Australia
to meet its obligations arising under the Agreement between Australia and the Democratic Republic
of Timor-Leste relating to the unitisation of the Greater Sunrise petroleum resource, when the
Offshore Petroleum Act 2006 comes into force. The Agreement, known as the Greater Sunrise
International Unitisation Agreement (IUA), was signed by Australia and Timor-Leste in Dili on
6 March 2003.

The Greater Sunrise petroleum unitisation area ("the unitisation area") straddles Australia's
boundary and the Joint Petroleum Development Area, which is jointly administered by Australia
and Timor-Leste by virtue of the Timor Sea Treaty between the two countries that was legislated in
Australia by the Petroleum (Timor Sea Treaty) Act 2003. The IUA allows for the development of
petroleum resources of the Greater Sunrise field, which comprises the Sunrise and Troubadour
petroleum reservoirs.

In particular, Article 22 of the IUA agrees to the duty-free entry of any goods and equipment
entering the unitisation area for the purposes of petroleum activities. To give effect to this Article,
the Customs Tariff Amendment (Greater Sunrise) Act 2004 added item 22A to Schedule 4 of
the Customs Tariff Act 1995 to provide for the duty free entry of goods, as prescribed by by-law, for
use in petroleum related activities in the Eastern Greater Sunrise area.



FINANCIAL IMPACT STATEMENT

The development of the Greater Sunrise petroleum resource is expected to yield Australia around
$10 billion in upstream revenue over the life of the project.
CUSTOMS TARIFF AMENDMENT (GREATER SUNRISE) BILL 2007

NOTES ON CLAUSES

Clause 1 - Short title

This clause provides the title of the Act.

Clause 2 - Commencement

This clause provides that sections 1, 2 and 3 of this amendment Act will commence
on Royal Assent.

Further, this clause prescribes that Schedule 1 of this amendment Act will commence
at the same time as the Offshore Petroleum Amendment (Greater Sunrise) Act 2007
commences.

Clause 3 - Schedule(s)

This clause prescribes the various Acts being amended or repealed by this Act, which
are specified in the Schedules to the Act.


Schedule 1 - Amendment of the Customs Tariff Act 1995

Item 1 - Subsection 3(1) (paragraph (e) of the definition of petroleum activity)

This item makes a consequential amendment to subsection 3(1); where the Petroleum
(Submerged Lands) Act 1967 is mentioned, this is omitted and replaced with the
Offshore Petroleum Act 2006.

Item 2 - Schedule 4 (item 22A, the description of goods in column 2)

This item makes a consequential amendment to concessional item 22A of Schedule 4
to the Tariff. Where the term "Eastern Greater Sunrise area, within the meaning
Petroleum (Submerged Lands) Act 1967" is mentioned, this is omitted and replaced
with "Eastern Greater Sunrise offshore area, within the meaning of the Offshore
Petroleum Act 2006".