2017/18 annual report - nera.org.au

2017/18 ANNUAL REPORT

Statement of Activities

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Contents

Introduction .............................................................................................................................. 3

2017/18 Report on progress made against activities, milestones and targets ........................ 4

1. Work skills for the future ................................................................................................... 4

2. Enabling effective collaboration ....................................................................................... 6

3. Understanding Australia’s resource base ........................................................................ 7

4. Social licence to operate .................................................................................................. 8

5. Unlock future resources ................................................................................................... 9

6. New markets, technologies and business models ......................................................... 10

7. Commercialisation of Research and Development ........................................................ 12

8. Efficient operations and maintenance ............................................................................ 13

9. Regulatory Framework optimisation ............................................................................... 14

Project Funding Commitments .............................................................................................. 16

NERA’s Projects across Australia .......................................................................................... 17

2017/18 Key Performance Indicators .................................................................................... 18

Sector Sentiment Survey ....................................................................................................... 21

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Introduction Australia has one of the strongest energy resources industries in the world, built on world-

leading innovation and creating and sustaining over 85,000 direct jobs. Ten times that

number of jobs are created in the rest of the economy as a direct result of investment in

energy resources – highlighting the sector’s high value and huge opportunity and threat that

will arise from the growth or decline in further investment in the sector.

Over the next decade, major sector challenges will transform the product and technology mix

of successful energy resources companies globally. NERA has already made an impact in

creating the collaboration and innovation connections essential to ensure Australia’s energy

resources sector achieves this transformation.

Reflecting our sector’s ambitions to deliver clean energy resources to Australia and the

world, NERA’s strategic vision was reset in 2018 to:

‘Australia as a global energy powerhouse, a sought-after destination for

investment and the leading source of knowledge and solutions’

As the only industry-led research and knowledge organisation for Australia’s energy

resources industries, NERA is uniquely positioned to support sector-wide transformation and

unlock +$10 billion of new value for the Australian economy. Our Sector Competitiveness

Plan (SCP) provides the strategic roadmap to unlock that value for the Australian economy.

With the majority of NERA’s project fund committed in

2017/18, and those projects directly linked to achieving

SCP knowledge priorities, NERA is gaining momentum in

achieving the growth centre outcomes. At 30 June 2018,

NERA had 32 approved projects, supporting more than

100 industry partners and had committed a total of

$12.231 million of funding matched by industry by

$18.246 million.

That equates to $30.477 million of total investment in the energy resources sector.

https://www.nera.org.au/SCP

https://www.nera.org.au/SCP

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2017/18 Report on progress made against

activities, milestones and targets Knowledge priorities were identified during preparation of the 2017 SCP and are the areas

where additional work is required to understand the sector’s current challenges. The

knowledge priorities were updated in the 2018 SCP Update. For the purposes of the annual

report requirements set out in the Commonwealth Funding Agreement and Growth Centre

principles, this Report aligns with the 2017/18 Business Plan and 2017 SCP.

1. Work skills for the future

NERA’s 2017/18 Annual Business Plan set out a plan for work skills activities including

understanding workforce capabilities, developing standard competencies and targeted

training programs relating to the next major phase of industry activity and establishment of

a national safety training framework.

During 2017/18 our focus changed from developing standardised competencies and

training frameworks to identifying future sector skills and business capabilities with

initiatives that assisted industry recognise and access to talent, skills and capabilities

required to support automation and digitisation.

Key achievements and milestones

• Subsea Technician Framework - A subsea technician framework was developed in

2017/18; however, at this stage of the offshore industry business cycle a business case

to progress the proposed development of an Engineers Australia National Engineering

Register was not recommended to progress until offshore industry business conditions

improved.

• Northern Territory Capability Study - In June 2017, NERA and the Northern Territory

(NT) Government entered into an agreement to map the training providers servicing the

oil and gas industry in the NT, identify the industry’s future skills requirements and the

gap between the two, including recommendations to address these. The Report

contains useful background material and identifies some critical factors for reform.

While some of these will be important in the longer term, there are others that will

require more immediate action to ensure the energy resources sector in the NT has the

necessary skills and training capability in the short to medium term.

• Future Oil and Gas Workforce Skills Report and Online Tool - The Preparing

Australia's future oil and gas workforce report provides a common expectation about

the potential future direction of the workforce in the oil and gas industry. Analysis used

in the report shows Australia’s energy resources sector remains one of the country’s

most high-value employers with each direct job in the oil and gas workforce supporting

another 10 jobs across the wider economy – generating five times more indirect

employment than an average worker in other industries.

However, the industry’s ability to respond to future workforce changes remains

uncertain and heavily dependent on external factors that are difficult to predict,

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including the oil price, global supply and demand and government policy.

Recognising this, the report uses specific scenario analysis to identify what Australia’s

oil and gas workforce might look like by 2030. The report estimates the potential

direction of industry growth and employment so that companies, workers and

policymakers can make informed decisions and prepare for future skill requirements.

Together with the release of the report, NERA developed a free and interactive online

tool to forecast how different occupations have changed over time and how they could

evolve in future. This will help workers in the industry to better manage their own

careers and allow industry stakeholders to manage their workforces.

• Smart Australia Program - NERA's international engagement program initiated in

2018 is designed to identify pathways to global commerce for Australian small to

medium enterprises (SMEs) and work with individual business representatives to

ensure they are equipped and supported to optimise their experience in an international

context. Smart Australia delivered a customised workshop and bespoke mentoring

experience that enabled participants to identify in-market opportunities, scope relevant

commercial and financial strategies and equip participants with the skills, language and

tools required to translate these into tangible commercial outcomes. It is designed to

help open doors and make introductions, providing Australian entrepreneurs and

innovative companies with the opportunity to identify, access and accelerate

international growth prospects.

• Work skills components in NERA supported projects – The great majority of NERA

supported projects described elsewhere in this report also incorporate a substantial

work skills component, this includes the development of digital and machine learning

skills through projects such as the virtual work environment, development of work

leading flow assurance via the managing hydrate risk in subsea jumpers (HyJump)

project and the development of the full spectrum of operations and maintenance skills

that will be facilitated through the LNG Future Fuels facility.

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2. Enabling effective collaboration

NERA’s 2017/18 Annual Business Plan described the key steps NERA would take to

support increasing sector collaboration. These included promoting collaboration between

industry and research, including by supporting innovation clusters and providing funding for

industry collaborative projects.


• Subsea Innovation Cluster - NERA supported establishment of Australia’s first

Subsea oil and gas cluster, Subsea Innovation Cluster Australia (SICA) with the

appointment of a Cluster Manager, the creation of SICA’s structure, formalisation of

governance processes, and growth of membership (including partners) to 32.

The initial membership drive targeted those businesses that had shown interest at

NERA funded workshops held in 2017, along with a campaign to attract companies

across the breadth of the industry, including operators, multinational businesses,

SMEs, classification societies and universities. SICA’s momentum is building with

several major oil and gas operators (SICA Partners) now coming forward with technical

and operational challenges for solutions from SICA members. In the longer term SICA

aims to increase membership, work on tangible solutions and secure export hub

funding.

The SICA cluster is seen and frequently mentioned by ministers from the WA

government as an exemplar of how the industry is coming together to scale and offer

its strong local capability to the world.

• Virtual Marine Energy Cluster - In early June 2018, NERA’s Board approved

development of a business plan for the establishment of a Virtual Marine Energy

Cluster to strengthen collaboration and accelerate innovation and market expansion of

Australia’s marine energy sector. The cluster will accelerate the addition of marine

energy to Australia’s energy resource mix and provide low carbon solutions to differing

industries. This new enterprise will accomplish this by utilising the latest techniques to

connect, collaborate and solve problems in ways that are not currently available to the

marine energy industry.

The synergies between Australia’s offshore oil and gas sector and the emerging ocean

industries, including renewable energy, will allow for the efficient transfer of knowledge

of working in the difficult Australian marine environment so that the members of the

cluster are able to de-risk their technology quicker and offer a more robust solution to

their clients. This is evident in the growing partnership between ocean and oil and gas

industries in other mature offshore oil and gas sectors e.g. Norway’s international trade

marketing body for oil and gas has expanded to include wind, hydro power, solar and

energy systems.

• Core Innovation Hub - The CORE coworking community includes 41 organisations -

32 established and 9 new partners including tech startups, SMEs, industry bodies and

corporate operators and service providers from across the resources and energy

sector.

In 2017/18, NERA supported the CORE Start Award with the inaugural winner Flicq

(IoT platform) taking up a NERA funded three-month residency in the space. At the

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conclusion of its three-month tenure Flicq decided to undertake a permanent paid co-

working membership. In addition, the CORE Start recipient will receive support from

CORE and NERA to grow their business. This support is tailored to the recipient and

can include introductions to business networks, access to workshops and business

advice, profiling and promoting of the company. The award opportunity will be

continued for other companies into the future, ensuring inflow of advanced capability to

the hub.

• Nureka – Open Collaboration Platform - Nureka is a Joint Venture between NERA

and Eureka Platform Pty Ltd with the aim to create an online collaboration ecosystem

for the oil and gas sector.

Launched at the Australian Oil and Gas Conference in March 2018, the Platform went

live in June 2018. NERA has played a key role in promoting and marketing Nureka to

the rest of the world by providing introductions to major operators and opening doors

for early business engagement opportunities locally, nationally and globally. Nureka

currently has four subscribed organisations and a number of innovators posting

solutions.

• Regional Operator Forum – A new Regional Oil and Gas Operator Cluster focussed

on research and innovation has been formed and facilitated by NERA. Shell, Quadrant,

Woodside, ConocoPhillips, Inpex and Chevron all have senior representatives

attending the forum and all are open to work together.

There is keen interest to work through NERA on a large impact area such as reduced

opex and predictive maintenance, addressing issues with operating in challenging

environments and enablers to the future expansion and productivity of the Australian oil

and gas sector such as reduced visibility at the seafloor, long tiebacks and low cost

pipelines and carbon abatement. This initiative points to NERA’s emerging reputation

for connecting players in industry and providing a neutral space for productivity

discussions to occur.

• CRC-P support - As NERA reduces our focus on direct project funding, we have been

working even more closely with the CRC-P program to direct and assist stakeholders

who we identify as having a project that would benefit from funding through a CRC-P.

Currently, applicants for a CRC-P seek advice from NERA to assist them with directing

research into areas of industry priority and to also connect researchers with industry

partners and commercialisation pathways.

3. Understanding Australia’s resource base

Understanding the nation’s natural resources and geology is critical to identifying the future

supply that will underpin the sector’s operational sustainability. During 2017/18 NERA

committed to collaborative projects that explore some of this potential.


• Resetting our understanding the Great Artesian Basin - The Great Artesian Basin

(GAB), is the largest and deepest artesian basin in the world underlying 22 per cent of

Australia including Queensland, Northern Territory, South Australia and New South

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Wales. The basin provides the only source of fresh water through much of inland

Australia.

This project involves production of a collation (book) of peer-reviewed documents that

provide an up-to-date evidence base on the GAB aquifers. The research aims to

reduce uncertainties about potential impacts on the GAB related to opening up new

coal and gas resources; and therefore, support timelier planning and permitting

decisions for proposed projects.

• Understanding the Toolebuc Formation - Located within the Eromanga Basin of

southwest Queensland, the Toolebuc Formation (shale) has the potential to be a long-

term key contributor to the east coast energy market.

NERA is supporting a project to integrate existing and modern analytical methods and

technologies which have not previously been utilised for evaluating the formation. The

key deliverables for the project are to establish new analytical data sets and develop a

regional basin and petroleum systems model in an industry standard software package.

A report on the thermal heat flow and source rock maturity study will be completed as

well as comprehensive, quality-controlled well and seismic data sets. Regional contour

maps of source rock and reservoir properties will also be completed as part of this

project.

4. Social licence to operate

The energy resources sector social licence to operate is under increasing scrutiny and

challenge, largely due to its perceived negative environmental impact. In 2017/18, NERA

aimed to gauge societies level of understanding of the energy environment.


• National Energy Literacy Framework - NERA progressed funding for a study by the

University of Queensland to build a better understanding of barriers to establishing

deeper levels of energy literacy in Australian society. The study will be published in

early 2019 with early indications that society conceptualises energy literacy in the

context of Australia’s electricity system, citing the high cost of electricity in Australia, the

complexity of choices facing consumers in a deregulated electricity market and the

essentiality of electricity in modern society.

The following projects were approved for project funding in 2017/18:

• Identifying Different Sources of Methane in Groundwater - Methane is often detected

in groundwater and monitoring bore samples and there are many potential sources from

which the methane could be derived. This is especially, but not uniquely, an issue in the

CSG sector. This project focuses on developing a definitive ‘fingerprinting’ methodology

that can be used to identify the specific component mix found in methane in the

environment.

• Radiological Risk Assessment Tool - This project will assess the radiological impacts

at Olympic Dam and Beverly mines in South Australia by analysing the radioactivity of

flora, fauna and soil. The results will generate data towards a national database, which

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will enable companies required to undertake environmental risk assessments to compare

to baseline Australian soil values.

• Baseline Characterisation – Northern Perth Basin was approved 6 March 2017;

however, the funding opportunity was revoked due to consortium partners not fully

committed to the project.

5. Unlock future resources


The Australian energy resources sector needs to improve its ability to identify, appraise and

develop marginal resources in a cost effective and sustainable way. During 2017/18, NERA

completed funding of the uranium research projects and approved new projects with potential

to unlock future resources.

• Unlocking uranium marginal resources - High ore processing costs are a major

barrier to the development of carbonate-hosted uranium deposits accounting for

approximately 65% of the total production costs, predominately due to the high

consumption of reagents. NERA supported a research program with Toro Energy,

Cameco Australia, Separation Engineering, Australian Nuclear Science Technology

Organisation (ANSTO) and Strategic Metallurgy to significantly reduce the processing

costs associated with carbonate-hosted deposits. The research program was

undertaken in two major parts.

Part 1 - ANSTO Minerals, who have world-leading expertise in uranium ore processing

and flowsheet design, undertook a study on Yeelirrie ore to optimise the metallurgical

flowsheet, including investigating the potential of nanofiltration. The research

investigated ways to increase uranium recovery and reduce costly reagent consumption.

Part 2 - A beneficiation study was undertaken on different ore types from the Wiluna

Uranium Project. The aim of the research was to further develop the beneficiation

process and confirm its applicability for the different ore types. The high-level results of

the project were presented to the wider industry at the AusIMM International Uranium

Conference in Adelaide in June 2018 and at the IAEA URAM Conference in Vienna in

June 2018.

Since completion of the project, both Toro and Cameco have continued to progress

feasibility studies to further understand the cost saving potential (implications) of the

results.


• New Geostatistical Technique for predicting CSG production - An innovative, new

“Research code” has already been developed by the University of Queensland Centre

for Coal Seam Gas consortium. However, to make this useable for industry purposes, it

needs to be integrated with the most common modelling package (Petrel). The project

will develop trial uses and demonstration data sets and build a new tool (Petrel-plug in)

to make non-linear geostatistics (spatial copulas) available to the CSG industry.

http://uranium.ausimm.com/

http://uranium.ausimm.com/

https://www.iaea.org/events/uram-2018

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• Converting Tight Contingent CSG Resources - In the presence of tight coal reserves

with low permeability, traditional resource extraction methods often deliver inefficient

results. Recognising this issue, this project will create a methodology for the use of a

new resource recovery method utilising graded particle injection (GPI).

• Managing Hydrate Risk in Subsea Jumpers - This project is assisting energy

producers in unlocking deep water gas and oil resources by delivering the first predictive

model to assess hydrate risk and reduce operating margins in subsea jumpers. This

project has secured the participation of many global oil and gas operators, in some

instances representing their first investment in such research outside of their home

nation and has the potential to save the industry tens to hundreds of millions of dollars in

lost production and maintenance.

• Machine Learning Based Sub-Surface Asset Model - This project aims to develop a

machine learning-based sub-surface coal seam asset model to better understand and

predict the configuration of subsurface resources. The project uses data science to

combine existing sub surface data collected over a number of years to provide new

insights into potential future resources.

• Distributed Acoustic Sensing for Coal Resource Exploration – This project aims to

introduce innovative Distributed Acoustic Sensing (DAS) technology to the Australian

coal exploration industry that will enable deciphering full geological information content

using borehole seismic surveys in an efficient and inexpensive way. This project will

demonstrate the potential of the DAS technology to help provide greater level of detail of

complex, hard to interpret geological formations, allowing coal operators to make more

informed decisions on future mining plans.

6. New markets, technologies and business models


For the sector to plan effectively for the future there is a strong and immediate need to look

to new markets, consolidate and expand the sector’s presence in existing markets, and

exploit the use of new technologies.

• 2018 Australasian Oil and Gas Conference - NERA was a principal sponsor of the

2018 Australasian Oil and Gas Conference held 14 to 16 March 2018. Showcasing how

the oil and gas industry is collaborating to innovate rather than competing was the key

element that made the 37th Australasian Oil & Gas (AOG) 2018 Expo a success.

The AOG Expo attracted more than 8000 visitors and 265 exhibitors from 14 countries,

further underlining Perth as a key global destination for industry to come together and

address current challenges and future opportunities.

• The SME ConnectER was created by NERA as a facilitated networking opportunity at

AOG 2018 that connected established SMEs with innovative products to champions from

LNG operators and contractors. The event hosted 23 selected SMEs who pitched their

innovation and value proposition directly to nine operators/contractors from the oil and

gas sector, guided by independent facilitators.

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• The Technology & Skills Hub: Created specifically for AOG 2018, ‘The Hub’ provided a

dynamic, interactive space that showcased 30 unique technology demonstrations, skills

insights and presentations from thought leaders and practitioners. The theme of this

dynamic and interactive forum was At the Digital Crossroads: how collaboration and

action can steer Australia towards a prosperous new tech future and featured

eminent commentators and practitioners coordinated by NERA. The Hub also provided a

forum for a range of innovative businesses to demonstrate their technologies in the fields

of data and digitisation, automation and robotics, artificial intelligence and machine

learning.

• The Collaboration Forum: Delivered by NERA at AOG 2018, Woodside, Chevron,

Shell, Deloitte and the Western Australia Department of Jobs, Tourism, Science and

Innovation, this three-day discussion series focused on how new collaborations between

operators, contractors, researchers, SMEs and entrepreneurs can build trust and enable

innovation and efficiency, creating value and providing access to new opportunities. The

Forum was also the site chosen by WA Premier Mark McGowan to announce a new LNG

Taskforce to establish Western Australia as a LNG hub, with both industry and

government working collaboratively to maximise the benefits that flow from the local LNG

industry.


In 2017/18, NERA sought out demonstration projects on clean technology solutions that integrate with and improve efficiency and competitiveness for the energy resources sector.

• Solar Hybrid Wellsite Power Generation - This project is integrating solar, battery

storage and gas generation technologies to create a reliable, low carbon and economical

alternative power supply for CSG wellsites. The technology is being built in Adelaide to

be deployed in remote Queensland and once proven is likely to lead to ongoing orders

for the developer providing increased employment in South Australia and to offer

reduced operating costs and increased reliability and productivity for the gas operators

utilising the technology.

• Zero Emissions Coal Technology - This project aims to provide Australian

underground coal mines with a technically viable method to drastically reduce fugitive

greenhouse gas emissions during their operations.

• CSG Brine Treatment and Integration of Solar Power into a Wellhead Platform were

two projects approved for project funding 4 October 2017. However, due to lack of

commitment from operators, the project funding approval was revoked, and the projects

did not proceed.

3D Metal Printing – This project is supporting the development of a new high-speed, low-

cost metal 3D printing technology specifically for the oil and gas industry. The technology can

operate around 1,000 times the speed of conventional metal 3D printing at a fraction of the

cost and has the potential to revolutionise industrial activities in remote areas by allowing

onsite metal part production and removing the costly delays involved with sourcing materials

from far afield. Halting operations for a single day can cost tens of millions of dollars or more,

So SPEE3D’s technology has got industry talking about its potential to save the sector

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millions in lost production time, meaning increased exports and revenue for Australia’s

economy

7. Commercialisation of Research and Development

Australia currently faces challenges in capitalising on the nation’s significant research and

development capability. Identifying industry requirements to better focus both academic and

industry research and ensure uptake and commercialisation will be key to increase supply

chain capability and commercialisation of research in the sector.


• 2017 Innovation Vouchers – A pilot Innovation Voucher program provided nine vouchers

worth $20,000 each and was aimed at assisting SMEs to deliver an innovative solution to

a technical challenge in the energy resources sector by encouraging them to work with a

potential client or end user. Partnering early in the development phase provides SMEs

and entrepreneurs with a clearer pathway to adoption as the end-users have been

engaged in the process and can help ensure the innovation or technology solves a

genuine problem and therefore has increased likelihood of being adopted by industry.

A total of 9 vouchers were formally awarded and contracted to 8 SMEs covering a diverse

range of technologies from across Australia. NERA continues to have a relationship with

some of these SMEs attending the Smart Australia Program and other NERA funded

events and workshops.

• Industry Mentoring Network in STEM (IMNIS) Program - The Industry Mentoring

Network in STEM (IMNIS) provides PhD researcher mentees the opportunity to increase

their understanding of the industry sector, strengthen their skills to be successful within

any part of the science, technology, engineering and mathematics (STEM), including

health and medicine sector, and extend their professional network. Along with other growth

centres, NERA continues to support this valuable program by providing funding and has

two NERA employees providing mentorship to three energy resources researchers.

Currently there are 21 paired mentor and mentees within the energy resources sector.


• Micro LNG Living Lab Facility - To position Australia as leaders in LNG research and

technology, NERA is working with UWA, and industry partners Chevron, Shell and

Hyundai Heavy Industries (HHI) to develop the LNG Futures Facility – a world-first,

purpose-built small-scale LNG facility to help Australian innovators test their innovative

digital, automation and robotics and technologies in real operating gas plant conditions.

The facility will include a test lab for open process control software to support Industry 4.0

technologies.

The facility will allow the rapid deployment and adoption of innovative solutions throughout

Australia’s LNG industry, boosting industry-wide collaboration and dramatically shortening

the runway to developing world leading technology.

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In addition to the research capacity of the facility it will, in conjunction with the South

Metropolitan TAFE ACEPT campus, provide an integrated training facility to develop the

future skills required for SMART assets (digital, automation and robotics).

• Marine Growth Living Lab Subsea Test Structure - To find Australian solutions to

Australian challenges, the Transforming Australia Subsea Equipment Reliability (TASER)

project is creating and installing a unique subsea test structure in the warm waters off

north west Australia. The first subsea test structure was successfully locally engineered,

fabricated and deployed in February 2018 in the Chevron operated Gorgon field, situated

on the North West Shelf of Western Australia. Seven subsea equipment vendors and over

100 potential game changing technologies were deployed in the ‘living laboratory’.

Following the success of the initial TASER Phase 1 project, NERA confirmed further

funding in June 2018 to build a network of ‘living laboratories’; three additional subsea test

structures will be deployed in different geographical locations and water depths across

various Australian waters, providing comprehensive results for test variables.

Once the data from the constellation of test structures is collected and analysed a

recommended practice for selection and use of technologies in Australian waters will be

produced, this will be the first such openly available guideline and will share the insights of

the project across the entire Australian offshore sector.

8. Efficient operations and maintenance


Australia’s reputation as a high cost jurisdiction to develop, execute and operate projects

means that improving efficiency of operations and maintenance is critical to maintaining and

enhancing our competitive advantage. In 2017/18 NERA supported initiatives and projects

that could significantly improve operations across the energy resources sector.

• Australian Automation and Robotics Initiative

NERA and METs Ignited led a pilot exploration of the potential for collaboration to build

the research infrastructure, supply chain capabilities and capacity and future workforce

skills - he Australian Automation and Robotics Initiative (AARI). A key outcome from the

pilot phase was an economic study of the impact of adoption of advanced automation,

including robotics, in the mining and oil and gas sectors in Australia. The economic study

was used to inform the development of possible models for collaboration. document and

NERA is currently focused on delivering an Industry 4.0 agenda for the oil and gas sector

through the Future LNG Facility as a key input into AARI as it develops into a broader

Industry Growth Centre collaboration.

• Tropical Cyclone project

The project commenced in 2016 and aimed to re analyse tropical cyclone data in

Australia since 1981 to incorporate recent advances in algorithms that extract key

information from geostationary satellite data.

Operators who do not have access to information that can predict what the worst

weather events can be, will need to apply a safety factor which can result in costly over-

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engineering. With this data guiding the design of infrastructure, the accuracy of this

weather information is not only critical to creating safe working environments, it can also

affect the industry’s ability to operate efficiently.

The analysis has provided confirmation of the Bureau of Meteorology (BOM) cyclone

forecast algorithm and Woodside is now working with BOM to develop a predictive model

of cyclones for the Scarborough gas project to inform engineering design specifications

for the infrastructure. This has provided a positive validation of the outcome of the

project.

9. Regulatory Framework optimisation

Harmonising regulations across the states, territories and Commonwealth and between

Commonwealth regulations, together with the establishment of outcomes-based

regulatory frameworks, would remove duplication, inconsistencies and inefficient

complexity. NERA continued to work on reducing regulatory burden in 2017/18 through

working alongside organisations such as Standards Australia, regulators and industry

bodies.


• Australian Standards Harmonisation - Australia will help guide the development of

international standards for use across the oil and gas sector through collaboration

between two of the country's pre-eminent industry bodies.

Standards Australia has approved a proposal from NERA to establish a new

Australian Technical Committee to mirror the International Organisation for

Standardisation (ISO) Technical Committee ISO TC 67. ISO TC 67 is the international

standards development committee responsible for materials, equipment and offshore

structures for the petroleum, petrochemical and natural gas industries.

The World Economic Forum has identified a prize of $60 billion for the global oil and gas industry from collaboration and standardisation. Recognising this, NERA, Woodside Energy and Standards Australia have come together to co-host a four-day series of industry events to showcase Australia’s role in securing this prize.

Focussed on transforming the competitiveness of the global industry, the International

Association of Oil and Gas Producers (IOGP) and the International Standards

Organisation (ISO) Oil and Gas Technical Committee (ISO/TC67) will hold their

Annual Plenary Meetings in Perth from 19–22 November 2018. IOGP indicates

between 10 % and 20% capital saving on new projects through equipment

standardisation. Chevron is already seeing the benefit on subsea equipment

standardisation on Gorgon phase two with costs savings of the order of 5% for

replication and up to 15% cost savings and 6 to 12-month schedule savings on next

generation subsea equipment. This is huge for Australian offshore sector and will

deliver long term productivity and competitiveness gains for the next round of capital

projects.

• Bioremediation of Contaminated Sites - A key milestone for this project was the

development of a draft technical measurement guidance document which is a

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practical guide for measuring natural source zone depletion (SNZD) in Australia. This

research has garnered strong international interest.

Estimated savings are based on the amount spent by the Kwinana facility each year

on mechanical remediation. It is estimated that this costs $1 million per annum per

facility. With 200 facilities requiring remediation, the saving could be $200 million per

annum in perpetuity. The key measure of success for this project is when regulators

start talking about natural degradation as an option and it is openly presented at

conferences. Success also relates to having the SNZD measurement guide

integrated into the suite of guidelines already managed and produced by CRC CARE.

• Environmental Reference Cases - The National Offshore Petroleum Safety and

Environmental Management Authority (NOPSEMA) published the first environmental

reference case in December 2017, which was developed in conjunction with NERA.

NOPSEMA transitioned this work to NERA as project lead in early 2018. NERA’s

focus has been on delivering environmental approvals for seismic activities. The

project seeks to reduce the assessment burden on seismic companies in terms of

cost, timeframes, and uncertainty. It will do this through the preparation and

submission of reference case Environment Plans (EPs) to NOPSEMA. Once

approved, seismic companies would competitively bid for work with the knowledge

that an approval is in place for them to be able to complete their activities within the

parameters specified in the EP. If successful, the project is scalable across the whole

of Australia and onshore.

• National Decommissioning Research Initiative – NERA approved funding in June

2018, to establish a purposely designed national decommissioning research entity that

will deliver research outcomes on behalf of the offshore oil and gas industry. NERA will

administer independent processes to commission, review, and publish, impartial and

credible research findings that answer questions identified by industry, and informed by

stakeholders, to better understand the acceptability of environmental impacts from the

use of offshore infrastructure. The initiative is still in setup phase and NERA has

secured matched funding from the Australian Petroleum Production & Exploration

Association (APPEA).

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Project Funding Commitments As at 30 June 2018, NERA had approved 32 projects for a total project value of $12.231

million matched by industry funding of $18.246 million with total value of $30.477 million.

Twenty-seven projects had signed contracts and five were in progress for signing.

NERA Industry Total

Date approved Contract status ($000) ($000) ($000)

1. Workskills

Smart Australia Program 04-Oct-17 signed 200 200 400

2. Enabling effective collaboration

Subsea Innovation Cluster Australia 05-Dec-17 signed 137 137 274

Virtual Marine Energy Cluster 06-Jun-18 signed 328 328 656

CORE Innovation Hub 05-Oct-16 signed 375 500 875

Nureka - Open Collaboration Platform 04-Oct-17 signed 750 750 1,500

3. Understanding Australia's resource base

Resetting our understanding of the Great Artesian Basin 06-Mar-18 signed 145 178 323

Understanding the Toolebuc Formation 05-Dec-17 signed 273 273 546

4. Social licence to operate

Identifying Different Sources of Methane in Groundw ater 05-Dec-17 signed 285 285 570

Radiological Risk Assessment Tool 04-Oct-17 signed 209 209 418

5. Unlock future resources

Unlocking uranium marginal resources 28-Jun-16 signed 170 197 367

New Geostatistical Technique for predicting CSG production 05-Dec-17 signed 134 388 522

Converting Tight Contingent CSG Resources 05-Dec-17 signed 181 181 362

Managing Hydrate Risk in Subsea Jumpers 06-Mar-18 signed 283 368 651

Machine Learning Based Sub-Surface Asset Model 06-Mar-18 signed 189 189 378

Distributed Acoustic Sensing for coal resource exploration 06-Jun-18 in progress 770 2,200 2,970

6. New markets, technology and business models

Solar Hybrid Wellsite Pow er Generation 04-Oct-17 signed 150 150 300

Zero Emissions Coal Technology 04-Oct-17 signed 770 1,500 2,270

3D Metal Printing Technology 06-Mar-18 signed 457 509 966

7. Commercialisation of research and development

Innovation Vouchers – Leap Fund 05-Oct-16 signed 420 420 840

Micro LNG Living Lab Facility 04-Oct-17 signed 1,700 1,700 3,400

Marine Grow th Living Lab Subsea Test Structure 04-Oct-17 signed 509 2,146 2,655

8.Enhance efficiency in operations and maintenance

Data Analysis of Tropical Cyclones 05-Oct-16 signed 294 450 744

Exmouth Integrated Artif icial Reef 04-Oct-17 signed 507 507 1,014

Scheduling System for Coal Export Terminals 05-Dec-17 signed 120 120 240

Image recognition tech for in-w ater hull cleaning 05-Dec-17 signed 500 550 1,050

Automating groundw ater compliance monitoring 04-Oct-17 signed 170 180 350

Virtual Operating Environment 06-Mar-18 signed 270 500 770

Enhancing Well Deliverabilty 06-Jun-18 in progress 196 196 392

CSG Wellhead Compression 06-Jun-18 in progress 470 500 970

9. Optimise the regulatory framework

Bioremediation of contaminated sites 08-Mar-17 signed 639 1,125 1,764

Decommissioning 06-Jun-18 in progress 270 950 1,220

Centralised Environmental Plans for seismic activities 06-Mar-18 in progress 360 360 720

Total projects 12,231 18,246 30,477

Project Fund balance

Opening balance NERA Industry Total

Commonw ealth - Funding 15,600 21,615 37,215

Projects approved and committed 12,231 18,246 30,477

Balance to be allocated 3,369 3,369 6,738

Total closing balance 15,600 21,615 37,216

17

NERA’s Projects across Australia

1. Tropical Cyclone Reanalysis

2. Exmouth Integrated Artificial Reef

3. LNG Futures Facility

4. Beneficiation & Optimisation of the Metallurgical Flowsheet

5. Hydrate Risk in Subsea

6. Integration of Image Recognition Technology into water hull cleaning tool

7. Subsea Innovation Cluster Australia

8. Core Innovation Hub

9. Virtual Operating Environment -

South Australia

Multi-State

Western Australia Northern Territory

19. Metal 3D Printing for the Supply Chain

20. Automating Groundwater Compliance Monitoring

21. Radiological Risk Assessment Tools

23. Solar Hybrid CSG Wellsite Power - Industry: Oil & Gas

24. Unlocking the Toolebuc Formation - Industry: Oil & Gas

25. New Geostatistical Technique (Petrel plug-in) - ndustry: Oil & Gas

26. Identifying Different Sources of Methane in Groundwater - Industry: Oil & Gas

27. Converting Tight Contingent CSG Resources - Industry: Oil & Gas

28. Diagnostic Acoustic Sensing for coal resource exploration: Coal

29. CSG Wellhead Compression: Industry: Oil & Gas 30. Enhancing Well Deliverability: Industry: Oil & Gas

Industry: Coal 32. Scheduling system for coal export terminals – Industry:

Coal

10. Bioremediation of Contaminated Sites -

11. Centralised Environmental Plans for Seismic Operations

12. SME Innovation Vouchers

13. SMART Australia

14. Decommissioning Initiative

15. Open Innovation Platform

16. Virtual marine cluster

17. Resetting our understanding of the Great Artesian Basin

18. Living Lab Subsea Test Structure

Queensland

22. Zero Emissions Coal Technology 23. Solar Hybrid CSG Wellsite Power 24. Unlocking the Toolebuc

Formation 25. New Geostatistical Technique

(Petrel plug-in) 26. Identifying Different Sources of

Methane in Groundwater 27. Converting Tight Contingent CSG

Resources 28. Diagnostic Acoustic Sensing for

coal resource exploration 29. CSG Wellhead Compression 30. Enhancing Well Deliverability

New South Wales

31. Machine learning-based sub-surface geological model

32. Scheduling system for coal export terminals

18

2017/18 Key Performance Indicators NERA’s Annual Business Plan sets out 2017/18 KPIs as follows:

Governance and

Risk

Target Comment

Commonwealth

Funding Agreement

Indicators

All milestones

achieved as outlined in

the Commonwealth

Funding Agreement

All milestones were achieved although

there was late deliverability against

some milestones.

Project Funding

Agreements in place

for all Board approved

projects

All projects have funding agreements in

place and have been approved through

the appropriate governance authorities

Risk Management

indicators

Risk controls actioned

within agreed

timeframes

All risk controls actioned within

timeframes

Annual audit achieved

with no significant

issues reported

Annual audit completed and achieved

Communications

and stakeholder Comment

Number of Network

Associates

During 2017/18 NERA implemented a new customer relationship

management system (Salesforce) with all of the memberconnex

network associates converted to key contacts. Currently NERA

has approximately 4,800 key contacts listed in salesforce.

Social media

• Social media continues to be a key communications tool for

NERA, with activity concentrated to LinkedIn and Twitter.

• Twitter followers – 800

• Twitter impressions – average 26,000 per month

• LinkedIn followers – 943

Number and rate of

growth of stakeholders

engaged

2100 key contacts were included in NERA’s customer database

(CRM) as at 1 July 2017 increasing to 4,800 current key contacts

resulting in a growth rate of 56%

2.764 organisations are registered in NERA’s CRM

Number of times CEO NERA’s CEO is constantly sought out to represent the Growth

19

is sought as a

spokesperson

Centre on various forums, conferences, working groups and key

stakeholder meetings.

Level of inclusion of

key messages in

media articles

Volume of media

coverage and growth

in media coverage

over time - volume of

NERA was mentioned 23 times in the media – nearly twice per

month

1. NERA report seeks to prepare Australia’s oil and gas sector for uptake of automation, 30 July 2018. Read the article.

2. One oil and gas worker sustains 10 other jobs: industry, 29 July 2018. Read the article.

3. NERA release new report into Australia’s future energy workforce, July 2018. Read the article.

4. NERA celebrates the official installation of the Exmouth Integrated Artificial Reef. Read the article.

5. Graduates and staff recognised in Queen's Birthday Honours, 11 June 2018. Read the article.

6. NERA Artificial Reef project location Announced, 16 May 2018. Read the article.

7. NERA 3D printer project takes close to a million in funding, 30 April 2018. Read the article.

8. NERA project lead Carnegie wins grant to power offshore gas platform with solar, 19 March 2018. Read the article.

9. NERA announces funding for subsea equipment reliability project, 15 February 2018. Read the article.

10. NERA leads transformation of Australia's energy resources sector, 15 February 2018. Read the article.

11. $4.8m for projects to boost innovation and sustainability, Get Industry, 30 November 2017. Read the article.

12. NERA approves eight new energy projects, World Coal, 29 November 2017. Read the article.

13. WA projects secure NERA funding, Business News, 29 November 2017. Read the article.

14. Subsea cluster takes shape, Energy News Bulletin, 10 November 2017. Read the article.

15. Energy innovation in age of enviro-awareness, Australia's Mining Monthly, 6 November 2017. Read the article.

16. The great digital awakening, Energy News Bulletin, 27 October 2017. Read the article.

17. Top Australian scientific body shifts focus to future, Xinhua Net, 6 October 2017. Read the article.

18. CSIRO sets out oil and gas evolution, Manufacturers' Monthly, 5 October 2017. Read the article.

19. NERA unveils oil and gas roadmap, The Australian Pipeliner,

https://www.hydrocarbonengineering.com/special-reports/30072018/nera-report-seeks-to-prepare-australias-oil-and-gas-sector-for-uptake-of-automation/

https://www.afr.com/business/one-oil-and-gas-worker-sustains-10-other-jobs-industry-20180728-h139t3

https://www.afr.com/business/one-oil-and-gas-worker-sustains-10-other-jobs-industry-20180728-h139t3

https://thewest.com.au/news/pilbara-news/artificial-reef-installed-in-exmouth-gulf-ng-b88897750z

http://www.news.uwa.edu.au/2018061110690/alumni/graduates-and-staff-recognised

https://recfishwest.org.au/news/location-of-exmouth-artificial-reef-announced/

http://www.cdu.edu.au/enews/stories/NERA-funding

https://reneweconomy.com.au/carnegie-wins-grant-power-offshore-gas-platform-solar-30565/

http://www.worldoil.com/news/2018/2/15/nera-announces-funding-for-subsea-equipment-reliability-project

https://www.lngindustry.com/liquefaction/15022018/nera-leads-transformation-of-australias-energy-resources-sector/

http://getindustry.com.au/2017/11/30/4-8m-projects-boost-innovation-sustainability/

https://www.worldcoal.com/power/29112017/nera-approves-eight-new-energy-projects/?utm_content=bufferee6f5&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

https://www.businessnews.com.au/article/WA-projects-secure-48m-in-clean-energy-funding

http://www.energynewsbulletin.net/on-the-record/news/1265276/subsea-cluster-takes-shape

http://www.miningmonthly.com/management/water-environment/energy-innovation-in-age-of-enviro-awareness/?adfesuccess=0

http://www.energynewsbulletin.net/on-the-record/news/1264759/digital-awakening

https://12259-console.memberconnex.com/Attachment?Action=Download&Attachment_id=160


20

5 October 2017. Read the article.

20. Cutting energy demand 30pc 'easily doable': Meridian, Australian Financial Review, 20 September 2017. Read the article.

21. NERA offers $15m for energy resources projects, Australian Mining, 2 August 2017. Read the article.

22. Australian coal, gas miners seek renewable energy projects, Renew Economy, 19 July 2017. Read the article.

23. Clean Tech Search Starts, Energy News Bulletin, 19 July 2017. Read the article.

Stakeholder indicators

NERA sector

sentiment survey

Results from the survey were used to help inform NERA’s

activities with relevant excerpts included in the 2018 SCP Update.


http://www.afr.com/technology/cutting-energy-demand-30pc-easily-doable-meridian-20170918-gyjqh7

http://www.afr.com/technology/cutting-energy-demand-30pc-easily-doable-meridian-20170918-gyjqh7




21

Sector Sentiment Survey In late 2017 NERA undertook a sentiment survey to collate the views of individuals working

across the Australian energy resources sector. The sentiment survey focussed on key

issues identified through consultation across the sector. The major themes in the survey

were in the areas of work skills, digitisation, intra and inter industry collaboration, support

and adoption of research, and new technology and export activities. The survey comprised a

number of qualitative questions designed to gauge the sentiment of respondents around

these issues, allowing for both a scaled response and, where appropriate, additional text

input.

23

Accessing skills

Having a skilled and appropriately sized workforce is critical to the immediate productivity

and long-term sustainability of the energy resources sector. With the recent major changes

in activity in the sector as a result of large swings in commodity prices and production

capacity expansions, it is important to understand the views of industry toward the nature

and availability of skilled personnel. At the summary level there was a general belief that

accessing maintenance skills was not a major challenge for the sector.

While the same respondents believed it would be somewhat more difficult to access skills to

meet digital and automation requirements.

This belief was consistent across the industries but strongest in the coal and coal seam gas

industries.

24

STEM skills

There was strong agreement across the respondents that STEM skills will be in demand for

future jobs in the sector.

Need to update skills

There was also a strong belief in the need to learn new skills to meet future demands with

almost three quarters of all respondents agreeing with this view.

Developing new technology

A large proportion of respondents believed that the Australian energy resources sector is

good at developing new technology. This belief was strongest in the coal and oil and gas

industries, while those working in uranium and CSG had a more neutral view.

25

When viewed by organisation type there was a very strong belief that Australia is effective in

developing new technology from those working in engineering, equipment supply,

technology, government and construction, while those in operational roles had a more

balanced view.

Government assistance

There was a mixed belief that government assistance was helping the sector in developing

new technology. Those in the coal sector most strongly supported the belief that assistance

was beneficial, with the oil and gas industry also feeling relatively positive. Uranium and

CSG personnel were neutral on this question.

When viewed by role there was a very marked set of differences in responses. Over 50

percent of respondents in operational roles disagreed that government assistance was

helping the development of new technology, while those in maintenance services, equipment

supply, technology and research all felt that government assistance was helping.

Exporting new technologies

Across the respondents there was a very mixed view on their company’s current technology

export activity. However, when viewed by role in the industry the picture becomes much

clearer, with those in engineering, equipment supply, technology and research reporting that

they were exporting technology while those in operations roles did not believe their

organisation was involved.

While a greater proportion of respondents believed their company could export new

technology to international markets. This view was consistently strong across all roles within

the survey, with even those in operational roles expressing a strong belief that their

organisation could export new technologies.

26

Automation

The great majority of respondents believed their company is ready to apply new automation

and tools. This was a view that was strongly supported by all four industries involved in the

survey. This view was also consistently reflected by all different roles in the survey, showing

a strong appetite across the sector for automation.

Collaboration

Cooperation and collaboration with the energy resources sector value chain provides

opportunities for smaller companies to gather together and scale to offer competitive

services to their clients. Consequently, understanding the depth of collaboration and its

direction enables the sector to better perceive how actively it is pursuing these opportunities.

INDUSTRY COLLABORATION

Collaboration readiness

There was a strong belief across all industries that they had the required skills to collaborate

with other industries (inter-industry) and an even stronger belief that they were ready to

collaborate within their industry (intra-industry).

27

Active collaboration

While many organisations, in all industries, were actively engaged in collaborative projects

inside their industry, a much smaller proportion were currently undertaking collaborative

projects outside of their industry.

RESEARCH COLLABORATION

A substantial proportion of participants responded positively when asked about the level of

collaboration between their organisation and researchers to develop new products and

business practices. These views were most strongly expressed by those working in

equipment supply, technology and maintenance, followed by those in operations, with

28

engineering companies reporting a more neutral level of cooperation with the research

community. In collaboration with research on the development of new business processes

the strongest agreement was from engineering personnel followed by operations with

virtually all other roles reporting a neutral to negative position. These results would suggest

that the sector as a whole is relatively active in developing new technologies but is doing

little in the area of research to improve its processes and practices.

Productivity

There was a marked difference in the beliefs around productivity, with the majority of

participants believing their industry productivity was low when compared internationally but

that their organisation performed well when compared against their international competition.

These views were consistent across the four industries surveyed.

29

Regulatory environment

The energy resources sector operates in a closely regulated environment. Many regulations

define the operational and safety parameters required for the sector to meet its community

expectations and provide its products in a safe and sustainable manner. However, it is also

important to ensure the overall level of regulations is appropriate to meet changing societal

needs and accommodate emerging technology without adding unnecessary cost and

complexity to the sector. There was a belief that the current regulatory environment

noticeably impacts the operations of organisations, this view was strongest among oil and

gas personnel.

Similarly, there was a noticeable belief from respondents that their industry was over

regulated. This view was strongest within CSG personnel with over 50 percent of personnel

expressing agreement.

Impact of recent changes

Respondents indicated that recent changes in the energy industry such as the transition

toward renewables, fluctuations in energy prices and changes in the supply and demand of

energy have had an impact on their organisation.

30

Energy literacy

There was a very strong view from respondents that the broad Australian public has a poor

understanding of the role of the energy sector, with a consistent two thirds majority agreeing

on the question. This view was also strongly picked up through all the different roles in the

survey.

ANNUAL REPORT

Directors’ Report and Annual Financial Report for the year ended

30 June 2018

2

Contents

Directors’ Report .................................................................................................................. 3

Auditor’s Independence Declaration ..................................................................................... 8

Auditors Independence Declarations .................................................................................... 8

to the Directors of Australian Energy Resources Growth Centre Limited ............................. 8

Consolidated Statement of Profit or Loss and Other Comprehensive Income...................... 9

Consolidated Statement of Financial Position .................................................................... 10

Consolidated Statement of Changes in Equity ................................................................... 11

Consolidated Statement of Cash Flows.............................................................................. 12

Notes to the Consolidated .................................................................................................. 13

Financial Statements .......................................................................................................... 13

1 General information and statement of compliance .................................................. 13

2 Changes in accounting policies ............................................................................... 13

3 Summary of accounting policies .............................................................................. 14

4 Revenue .................................................................................................................. 18

5 Cash and cash equivalents ..................................................................................... 18

6 Trade and other receivables .................................................................................... 18

7 Financial assets and liabilities ................................................................................. 19

8 Property, plant and equipment ................................................................................ 19

9 Other assets ............................................................................................................ 20

10 Trade and other payables ....................................................................................... 20

11 Employee remuneration .......................................................................................... 20

12 Other liabilities ......................................................................................................... 21

13 Interest in joint venture ............................................................................................ 21

14 Post-reporting date events ...................................................................................... 22

15 Subsequent event requiring disclosure ................................................................... 22

Directors’ Declaration ......................................................................................................... 23

Independent Auditor’s Report ............................................................................................. 24

3

Directors’ Report The Directors of the Australian Energy Resources Growth Centre Ltd, trading as National Energy

Resources Australia (NERA), present their report together with the financial statements of the consolidated

entity, being NERA (‘the Company’) for the year ended 30 June 2018, and the Independent Audit Report

thereon.

Director details

The following persons were Directors of NERA either during, or since, the end of the financial year:

Mr Ken Fitzpatrick

B.E. Chem. Eng, MBA, MAICD

Board Chairman and Independent Non-Executive Director since 27 November 2015

Member of the Risk and Audit Committee

Member of the Program Development Committee

Member of the Nominations and Remuneration Committee

Professor Andrew Garnett

MSc, MBA

Independent Non-Executive Director since 27 November 2015

Ms Erica Smyth AC

BSc (Hons), Hon.Dlitt, MSc(App), FTSE, FAICD

Independent Non-Executive Director Chair of the Risk and Audit Committee Director since 27 November 2015

Ms Pia Turcinov

LLB, BA, GAICD

Independent Non-Executive Director since 27 November 2015


Member of the Nominations and Remuneration Committee

Mr Tony Nunan,

LLB, B.Land.Res.Sc

Independent Non-Executive Director since 29 December 2015

Mr Bruce Denney

BE (Hons), MBA, MAICD

Independent Non-Executive Director since 24 April 2016


Mr Keith Spence

BSc (Hons)

Appointed Independent Non-Executive Director on 27 November 2015 resigned 4 April 2018

Chair of the Nomination and Remuneration Committee resigned 4 April 2018

Member of the Risk and Audit Committee resigned 4 April 2018

Company Secretary

Ms Polly Whakaari

BMS

Company Secretary since 1 July 2017

4

Principal activities

NERA has worked hard to build trust with our industry, and we are increasingly seen as a unique national, independent and credible source of information. Since the launch of our Sector Competitiveness Plan (SCP) in 2017 NERA has over 35 projects, 100 industry partners, $12.391m matched by funding of $18.396m from industry, researchers and innovative SMEs, and covering a broad national, sector and SCP knowledge priority scope. All NERA projects contribute to the Industry Growth Centre objectives of increasing collaboration and commercialisation, improving international opportunities and market access, enhancing management and workforce skills and identifying opportunities for regulatory reform.

There have been no significant changes in the nature of these activities during the year.

Strategic Framework

Programme Objectives

The overarching objective of the Growth Centres Programme is to improve the productivity and competitiveness of sectors of competitive strength and strategic priority in the Australian economy. It will take a national sector approach to structural reform and address barriers to productivity, competitiveness and innovative capacity at the sector level where economic growth can be maximised. The Programme will achieve this objective through:

• Identifying regulations that are unnecessary or over-burdensome for the six sectors and impede their ability

to grow, and suggesting possible reforms;

• Improving engagement between research and industry, and within industry, to achieve stronger coordination

and collaboration of research and stronger commercialisation outcomes in the six sectors;

• Improving the capability of the key sectors to engage with international markets and access global supply

chains; and

• Improving the management and workforce skills of the six sectors. The Programme will also facilitate

connections between the six sectors and enable capabilities and services, such as information and

communications technology.

5

Programme Outcomes

To fulfil the Programme objectives, the Programme will aim to achieve the following outcomes in the energy resources sector:

• A reduction in the cost of doing business through regulatory reform;

• Increased Research and Development coordination and collaboration leading to improved

commercialisation outcomes;

• More businesses, including small and medium enterprises, integrated into domestic and global supply

chains and markets leading to increased export income;

• Improved management and workforce skills of businesses; and

• Improved employment opportunities and contribution to the creation of high-skilled jobs.

Commonwealth Funding Agreement

The Funding Agreement between the Commonwealth of Australia as represented by the Department of

Industry, Innovation and Science (DIIS) and NERA, was ratified on 9 February 2016. Funding is provided to

NERA to take a national approach to improve the competitiveness, productivity and sustainability of the energy

resources sector in Australia, and to address knowledge gaps and priorities at the sector level where economic

value can be maximised.

Government Funding

Funding 2015/16 $’000

2016/17 $’000

2017/18 $’000

2018/19 $’000

2019/20 $’000

Total $’000

Commonwealth - milestone funding 2,042 3,500 3,500 3,500 1,458 14,000

Commonwealth - project funds 1,400 3,200 8,000 3,000 - 15,600

Commonwealth - sector Informed grant 390 354 255 - - 999

Commonwealth – regulatory grant 125 - 81 - - 206

State – Western Australia - 80 90 348 - 518

State – Northern Territory - - 40 - - 40

Commonwealth funding – funding is received through the Department of Industry Innovation and Science for achievement against reporting milestones stipulated in the Commonwealth Funding Agreement. NERA has also received additional funding from the Commonwealth through the regulatory grants and sector informed grants process. Western Australia state funding – The Western Australia Department of Commerce has provided NERA funding for specific Western Australian based activities focused on stakeholder engagement. Northern Territory state funding – The Northern Territory Department of Trade, Business and Innovation provided NERA funding for a report on the capability gap of the Northern Territory oil and gas training and skills environment.

Subsequent event requiring disclosure

The May 2018 Federal budget provided additional $5 million per annum for a further two years beyond NERA’s current funding agreement. The Federal Government has called for NERA to submit a business case by 31 October 2018 for funding from 2020 to 2022. On meeting its milestone outlined in the Commonwealth Funding Agreement, the Company received $875k of Program Funds and $3 million in Project Funds. The Company also received $348k in July 2018 from the Western Australian Energy Research Alliance as part of the Western Australian Government’s commitment to support NERA programs focused on small to medium business engagement.

6

Directors’ meetings

The number of meetings of the Board and Board Committees held during the year and the number of meetings attended by each Non-Executive Director are as follows:

Board Meetings* Program Development Committee**

Risk and Audit Committee#

Nominations and Remuneration Committee##

A H A H A H A H

Ken Fitzpatrick (a) 4 4 5 7 2 2 1 1

Andrew Garnett (b) 4 4 7 7 (h) (h) (h) (h)

Keith Spence (c) 3 4 (h) (h) 2 2 1 1

Erica Smyth (d) 4 4 (h) (h) 2 2 (h) (h)

Pia Turcinov (e) 4 4 7 7 (h) (h) 1 1

Tony Nunan (f) 3 4 (h) (h) (h) (h) (h) (h)

Bruce Denney (g) 3 4 6 7 (h) (h) (h) (h)

* Board meetings were held on 4 October 2017, 5 December 2017, 7 March 2018 and 6 June 2018.**The Program Development Committee meetings were held on 17 August 2017, 4 September 2017, 29 September 2017, 16 November 2017, 23 November 2017, 14 February 2018 and 28 May 2018.#The Risk and Audit Committee meetings were held on 26 September 2017 and 20 February 2018.##The Nominations and Remuneration Committee meeting was held on 1 February 2018.

A Number of meetings attended. H Number of meetings held during the time the Non-Executive Director held office. (a) Ken Fitzpatrick was Chair of the Board and a member of all Committees.(b) Andrew Garnett was Chair of the Program Development Committee.(c) Keith Spence was Chair of the Nominations and Remuneration Committee and member of the

Risk and Audit Committee. Mr Spence resigned on 4 April 2018 from the NERA Board and allCommittees.

(d) Erica Smyth was Chair of the Risk and Audit Committee.(e) Pia Turcinov was a member of the Program Development Committee and the Nominations and

Remuneration Committee.(f) Tony Nunan is a Non-Executive member of the Board.(g) Bruce Denney was a member of the Program Development Committee.(h) Director is not a member of this Committee.

Contribution in winding up

The Company is incorporated under the Corporations Act 2001 and is a Company limited by guarantee. If the

Company is wound up, the constitution states that each member is required to contribute a maximum of $10

each towards meeting any outstanding obligations of the entity. At 30 June 2018 the total amount that members

of the Company are liable to contribute if the Company wound up is $70 (2017: $70).

Rounding of amounts

NERA is a type of Company referred to in ASIC Corporations (Rounding in Financial / Directors’ Reports)

Instrument 2016/191 and therefore the amounts contained in this report and in the financial report have been

rounded to the nearest $1,000, or in certain cases, to the nearest dollar.

7

Auditors Independence Declaration

A copy of the Auditor’s Independence Declaration as required under s.307C of the Corporations Act 2001 is

included in page 8 of this financial report and forms part of the Directors’ Report.

Signed in accordance with a resolution of the Directors.

Ken Fitzpatrick Erica Smyth

Chair Non-Executive Director

31 October 2018 31 October 2018

8

Auditor’s Independence Declaration

Central Park, Level 43 152-158 St Georges Terrace Perth WA 6000 Correspondence to: PO Box 7757 Cloisters Square Perth WA 6850 T +61 8 9480 2000 F +61 8 9480 2050 E [email protected] W www.grantthornton.com.au

Auditors Independence Declarations to the Directors of Australian Energy Resources Growth Centre Limited In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor

for the audit of Australian Energy Resources Growth Centre Limited for the period from 1 July 2017

to 30 June 2018, I declare that, to the best of my knowledge and belief, there have been:

a no contraventions of the auditor independence requirements of the Corporations Act 2001 in

relation to the audit; and

b no contraventions of any applicable code of professional conduct in relation to the audit.

GRANT THORNTON AUDIT PTY LTD Chartered Accountants

P W Warr

Partner - Audit & Assurance

Perth, 31 October 2018

Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389

‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to

one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the

member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not

provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In

the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries

and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.

Liability limited by a scheme approved under Professional Standards Legislation.

mailto:[email protected]

http://www.grantthornton.com.au/

9

Consolidated Statement of Profit or Loss and Other Comprehensive Income

For the year ended 30 June 2018

Notes 2018 $'000 2017 $'000 Revenue 4 6,492 4,019

Other income 4 167 75

Consultancy Expense (234) (300)

Employee benefits expense 11.1 (2,003) (1,622)

Marketing and branding expense (183) (58)

Professional fees expense (188) (195)

Project fees expense (2,790) (740)

Other fees expense 3.4.1 (2,203) (1,178)

Share of loss 13 - -

Surplus / (deficit) before income tax (942) 1

Income tax expense 3.8

- -

Surplus / (deficit) (942) 1

Other comprehensive income - - Total comprehensive (loss)for the period (942) 1

This statement should be read in conjunction with the notes to the financial statements.

10

Consolidated Statement of Financial Position

As at 30 June 2018


Notes

2018

$'000

2017

$'000

Assets

Current

Cash and cash equivalents 5 10,729 6,002

Trade and other receivables 6 115 10

Other assets 9 75 55

Current assets 10,919 6,067

Non-current

Property, plant and equipment 8 78 13

Non-current assets 78 13

Total assets 10,997 6,080

Liabilities

Current

Trade and other payables 10 405 297

Provisions 11.2 54 69

Other liabilities 12 10,200 4,434

Current Liabilities 10,659 4,800

Total Liabilities 10,659 4,800

Net assets 338 1,280

Equity

Retained earnings 338 1,280

Total earnings 338 1,280

11

Consolidated Statement of Changes in Equity


RETAINED EARNINGS $’000

TOTAL EQUITY $’000

Balance at 30 June 2016 1,279 1,279

Surplus for the period 1 1

Other comprehensive income - -

Balance at 30 June 2017 1,280 1,280

Balance at 1 July 2017 1,280 1,280

Surplus for period (942) (942)

Other comprehensive income - -

Total comprehensive (loss) for year (942) (942)

Balance at 30 June 2018 338 338


12

Consolidated Statement of Cash Flows



Notes

2018

$'000

2017

$'000

Operating activities

Receipts from:

Government grants 10,792 7056

Project Funds 2,526 165

Interest income 165 72

Other Income 2 3

Payments to clients, suppliers and employees (8,688) (4,596)

Net cash provided by operating activities 4,797 2,700

Investing activities

Payment of property, plant and equipment (70) (16)

Net cash provided by / (used in) investing activities (70) (16)

Financing activities - -

Net cash from / (used in) financing activities - -

Net change in cash and cash equivalents 5.1 4,727 2,684

Cash and cash equivalents, beginning of period 6,002 3,318

Cash and cash equivalents, end of period 5 10,729 6,002

13

Notes to the Consolidated

Financial Statements

1 General information and statement of compliance

The financial report includes the consolidated financial statements and notes of the Australian Energy Resources

Growth Centre Ltd and Controlled Entities (Consolidated Group or Group).

These financial statements are general purpose financial statements that have been prepared in accordance with

Australian Accounting Standards – Reduced Disclosure Requirements and the Corporations Act 2001. Australian

Energy Resources Growth Centre Ltd is a not-for-profit entity for the purpose of preparing the financial statements.

The consolidated financial statements for the year ended 30 June 2018 were approved and authorised for issue by

the Board of Directors on 31 October 2018.

2 Changes in accounting policies

2.1 New and revised standards that are effective for these financial statements

A number of new and revised standards became effective for the first time to annual periods beginning on or after 1

July 2017. Information on the more significant standard(s) is presented below.

AASB 2016-1 Amendments to Australian Accounting Standards – Recognition of Deferred Tax Assets for Unrealised Losses

AASB 2016-1 amends AASB 112 Income Taxes to clarify how to account for deferred tax assets related to debt

instruments measured at fair value, particularly where changes in the market interest rate decrease the fair value of a

debt instrument below cost.

AASB 2016-1 is applicable to annual reporting periods beginning on or after 1 January 2017.

AASB 2016-2 Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 107

AASB 2016-2 amends AASB 107 Statement of Cash Flows to require entities preparing financial statements in

accordance with Tier 1 reporting requirements to provide disclosures that enable users of financial statements to

evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and

non-cash changes.

AASB 2016-2 is applicable to annual reporting periods beginning on or after 1 January 2017.

AASB 2016-4 Amendments to Australian Accounting Standards – Recoverable Amount of Non-Cash- Generating Specialised Assets of Not-for-Profit Entities

This Standard amends AASB 136 Impairment of Assets to:

• remove references to depreciated replacement cost as a measure of value in use for not-for-profit

entities; and

• clarify that the recoverable amount of primarily non-cash-generating assets of not-for-profit entities, which are

typically specialised in nature and held for continuing use of their service capacity, is expected to be materially the

same as fair value determined under AASB 13 Fair Value Measurement, with the consequence that:

AASB 136 does not apply to such assets that are regularly revalued to fair value under the revaluation model in

AASB 116 Property, Plant and Equipment and AASB 138 Intangible Assets; and

AASB 136 applies to such assets accounted for under the cost model in AASB 116 and AASB 138 AASB 2016-4 is applicable to annual reporting periods beginning on or after 1 January 2017. The adoption of these standards has not had a material impact on the Group.

2.2 Accounting standards issued but not yet effective and not been adopted early by the Group

14

Refer to the latest Grant Thornton TA Alert on accounting standards issued but not yet effective, available on

our website: http://www.grantthornton.com.au/en/insights/technical-publications--ifrs/local-technical-and-

financial- reporting-alerts/

3 Summary of accounting policies

3.1 Overall considerations

The significant accounting policies that have been used in the preparation of these consolidated financial

statements are summarised below.

The consolidated financial statements have been prepared using the measurement bases specified by

Australian Accounting Standards for each type of asset, liability, income and expense. The measurement bases

are more fully described in the accounting policies below.

3.2 Basis of consolidation

The Group financial statements consolidate those of the parent company and all of its subsidiaries as of 30

June 2018. The parent controls a subsidiary if it is exposed, or has rights, to variable returns from its

involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary.

All subsidiaries have a reporting date of 30 June.

All transactions and balances between Group companies are eliminated on consolidation, including unrealised

gains and losses on transactions between Group companies. Where unrealised losses on intra-group asset

sales are reversed on consolidation, the underlying asset is also tested for impairment from a group

perspective.

Amounts reported in the financial statements of subsidiaries have been adjusted where necessary to ensure

consistency with the accounting policies adopted by the Group.

Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are

recognised from the effective date of acquisition, or up to the effective date of disposal, as applicable.

Non-controlling interests, presented as part of equity, represent the portion of a subsidiary’s profit or loss and

net assets that is not held by the Group. The Group attributes total comprehensive income or loss of

subsidiaries between the owners of the parent and the non-controlling interests based on their respective

ownership interests.

3.3 Revenue

Revenue comprises revenue from the sale of goods, government grants, fundraising activities and client

contributions. Revenue from major products and services is shown in Note 5.

Revenue is measured by reference to the fair value of consideration received or receivable by the Group for

goods supplied and services provided, excluding sales taxes, rebates, and trade discounts.

Revenue is recognised when the amount of revenue can be measured reliably, collection is probable, the costs

incurred or to be incurred can be measured reliably, and when the criteria for each of the Group’s different

activities have been met. Details of the activity-specific recognition criteria are described below.

Government grants

A number of the Group’s programs are supported by grants received from the Federal and State Governments.

If conditions are attached to a grant which must be satisfied before the Group is eligible to receive the

contribution, recognition of the grant as revenue is deferred until those conditions are satisfied.

Where a grant is received on the condition that specified services are delivered to the grantor, this is considered

a reciprocal transaction. Revenue is recognised as services are performed and at year end a liability is

recognised until the service is delivered.

Revenue from a non-reciprocal grant that is not subject to conditions is recognised when the Group obtains

control of the funds, economic benefits are probable and the amount can be measured reliably. Where a grant

may be required to be repaid if certain conditions are not satisfied, a liability is recognised at year end to the

extent that conditions remain unsatisfied.

http://www.grantthornton.com.au/en/insights/technical-publications--ifrs/local-technical-and-financial-reporting-alerts/



15

Where the Group receives a non-reciprocal contribution of an asset from a government or other party for no or

nominal consideration, the asset is recognised at fair value and a corresponding amount of revenue is

recognised.

Client contributions

Fees charged for care or services provided to clients are recognised when the service is provided.

Interest and dividend income

Interest income is recognised on an accrual basis using the effective interest method. Dividend income are

recognised at the time the right to receive payment is established.

Project Funds

The project funds are a portion of the Company’s annual grant funds allocated to industry-led collaborative

projects to improve the productivity, competitiveness and innovative capacity of the energy resources sector.

The company must obtain industry cash contributions for projects that are at least equal to the value of any

projects funds provided by the Commonwealth Government

3.4 Operating expenses

Operating expenses are recognised in profit or loss upon utilisation of the service or at the date of their origin.

3.4.1 Other expenses

Other expenses includes travel and accommodation, program expenses, conferences and seminars, catering and entertainment, and IT services.

3.5 Property, plant and equipment

Property, plant and other equipment (comprising fittings and furniture) are initially recognised at acquisition cost

or manufacturing cost, including any costs directly attributable to bringing the assets to the location and

condition necessary for it to be capable of operating in the manner intended by the Group’s management.

Property, plant and other equipment are subsequently measured using the cost model, cost less subsequent

depreciation and impairment losses.

Depreciation is recognised on a straight-line basis to write down the cost less estimated residual value of

buildings, plant and other equipment. The following useful lives are applied:

• computer hardware: 3 - 7 years

• office equipment: 3 - 10 years

In the case of leasehold property, expected useful lives are determined by reference to comparable owned

assets or over the term of the lease, if shorter.

Material residual value estimates and estimates of useful life are updated as required, but at least annually.

Gains or losses arising on the disposal of property, plant and equipment are determined as the difference

between the disposal proceeds and the carrying amount of the assets and are recognised in profit or loss within

other income or other expenses.

3.6 Leases

Operating leases

Where the Group is a lessee, payments on operating lease agreements are recognised as an expense on a

straight-line basis over the lease term. Associated costs, such as maintenance and insurance, are expensed as

incurred.

3.7 Financial instruments

Other receivables

16

Individually significant receivables are considered for impairment when they are past due or when

other objective evidence is received that a specific counterparty will default. Receivables that are not

considered to be individually impaired are reviewed for impairment in groups, which are determined

by reference to the industry and region of a counterparty and other shared credit risk characteristics.

The impairment loss estimate is then based on recent historical counterparty default rates for each

identified group.

3.8 Income taxes

No provision for income tax has been raised as the Group is exempt from income tax under Division 50 of the Income Tax Assessment Act 1997.

3.9 Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, together with other

short-term, highly liquid investments that are readily convertible into known amounts of cash and

which are subject to an insignificant risk of changes in value.

3.10 Employee benefits

Short-term employee benefits

Short-term employee benefits are benefits, other than termination benefits, that are expected to be

settled wholly within 12 months after the end of the period in which the employees render the related

service. Examples of such benefits include wages and salaries, non-monetary benefits and

accumulating sick leave. Short-term employee benefits are measured at the undiscounted amounts

expected to be paid when the liabilities are settled.

Other long-term employee benefits

The Group’s liabilities for annual leave and long service leave are included in other long-term

benefits as they are not expected to be settled wholly within 12 months after the end of the period in

which the employees render the related service. They are measured at the present value of the

expected future payments to be made to employees. The expected future payments incorporate

anticipated future wage and salary levels, experience of employee departures and periods of

service, and are discounted at rates determined by reference to market yields at the end of the

reporting period on high quality corporate bonds that have maturity dates that approximate the

timing of the estimated future cash outflows. Any re-measurements arising from experience

adjustments and changes in assumptions are recognised in profit or loss in the periods in which the

changes occur.

The Group presents employee benefit obligations as current liabilities in the statement of financial

position if the Group does not have an unconditional right to defer settlement for at least 12 months

after the reporting period, irrespective of when the actual settlement is expected to take place.

Defined contribution plans

The Group pays fixed contributions into independent entities in relation to several state plans and

insurance for individual employees. The Group has no legal or constructive obligations to pay

contributions in addition to its fixed contributions, which are recognised as an expense in the

period that relevant employee services are received.

3.11 Provisions, contingent liabilities and contingent assets

Provisions are measured at the estimated expenditure required to settle the present obligation,

based on the most reliable evidence available at the reporting date, including the risks and

uncertainties associated with the present obligation. Where there are a number of similar

obligations, the likelihood that an outflow will be required in settlement is determined by considering

the class of obligations as a whole. Provisions are discounted to their present values, where the

time value of money is material.

17

Any reimbursement that the Group can be virtually certain to collect from a third party with

respect to the obligation is recognised as a separate asset. However, this asset may not

exceed the amount of the related provision.

No liability is recognised if an outflow of economic resources as a result of present obligation is not

probable. Such situations are disclosed as contingent liabilities, unless the outflow of resources is

remote in which case no liability is recognised.

3.12 Deferred income

The liability for deferred income is the unutilised amounts of grants received on the condition

that specified services are delivered or conditions are fulfilled. The services are usually provided

or the conditions usually fulfilled within 12 months of receipt of the grant. Where the amount

received is in respect of services to be provided over a period that exceeds 12 months after the

reporting date or the conditions will only be satisfied more than 12 months after the reporting

date, the liability is discounted and presented as non-current.

Section 26.4 (a) (i) of the Commonwealth Funding Agreement sets out the rights or remedies of

the Commonwealth on termination of the Agreement. The Commonwealth is not obliged to pay

to the growth centre any outstanding amount of the funds, except to the extent that those

monies have been legally committed for expenditure. As at 30 June 2018, NERA had legal

commitments of $10.659 million, which it would have been able to fund through a cash balance

of $10.729 million.

3.13 Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the

amount of GST incurred is not recoverable from the Australian Taxation Office. In these

circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an

item of the expense. Receivables and payables in the statement of financial position are shown

inclusive of GST.

Cash flows are presented in the statement of cash flows on a gross basis, except for the GST

components of investing and financing activities, which are disclosed as operating cash flows.

3.14 Economic dependence

The Group is dependent upon the ongoing receipt of Federal and State Government grants to

ensure the ongoing continuance of its programs. At the date of this report, management has no

reason to believe that this financial support will not continue.

3.15 Significant management judgement in applying accounting policies

When preparing the financial statements, management undertakes a number of judgements,

estimates and assumptions about the recognition and measurement of assets, liabilities,

income and expenses.

Estimation uncertainty

Information about estimates and assumptions that have the most significant effect on recognition

and measurement of assets, liabilities, income and expenses is provided below. Actual results

may be substantially different.

Long service leave

The liability for long service leave is recognised and measured at the present value of the

estimated cash flows to be made in respect of all employees at the reporting date. In determining

the present value of the liability, estimates of attrition rates and pay increases through promotion

and inflation have been taken into account.

18

4 Revenue

The Company’s revenue is presented as follows for each major product and service category:

5 Cash and cash equivalents

Cash and cash equivalents consist the following:

5.1 Reconciliation of Cash:

Cash at the end of the financial year as shown in the statement of cash flows is reconciled in the statement of financial position as follows:

6 Trade and other receivables

Trade and other receivables recognised consist of the following:

2018

$'000

2017

$'000

Revenue

Government grants 3,966 3,854

Project funds 2,526 165

Total revenue 6,492 4,019

Other income

Interest income 165 72

Reimbursement income 2 3

Total other income 167 75

2018

$'000

2017

$'000

Cash at Bank 10,729 6,002

Cash and Cash equivalents 10,729 6,002

Notes2018

$'000

2017

$'000

Surplus / (deficit) (942) 1

Increase in deferred income 12 5,766 3035

Change in assets and liabilities

Increase in trade and other receivables 6 (105) (10)

Increase in other current assets 9 (20) (55)

Increase in fixed assets 8 (65) (13)

Increase in trade and other payables 10 108 (324)

Decrease in other current liabilities 11.2 (15) 50

Net change in cash and cash equivalents 4,727 2,684

19

7 Financial assets and liabilities

7.1 Categories of financial assets and liabilities

The carrying amounts presented in the statement of financial position relate to the following categories of

assets and liabilities:

8 Property, plant and equipment

Details of the Group’s property, plant and equipment and their carrying amount are as follows:

All depreciation and impairment charges (or reversals if any) are included within ‘depreciation and amortisation’ and ‘impairment of non-financial assets’

2018

$'000

2017

$'000

Current

Trade receivables 115 10

Total trade and other receivables 115 10

Notes2018

$'000

2017

$'000

Financial assets

cash and cash equivalents 5 10,729 6,002

Total financial assets 10,729 6,002

Financial liabilities

Financial liabilities measured at amortised cost

Current

Trade and other payables 10 405 297

Total financial liabilities 405 297

PLANT &

EQUIPMENT

$'000 Total $'000

Gross carrying amount

Balance 1 July 2017 16 16

Additions 76 76

Disposals - -

Transfer - -

Revaluation increase - -

Balance 30 June 2018 92 92

Depreciation and impairment

Balance 1 July 2017 3 3

Disposals - -

Depreciation and impairment 11 11

Balance 30 June 2018 14 14

Carrying amount 30 June 2018 78 78

20

9 Other assets

Other assets consist the following:

The prepayment was made for insurance paid in advance as at 30 June 2018

10 Trade and other payables

Trade and other payables recognised consist of the following:

11 Employee remuneration

11.1 Employee benefits expense

Expenses recognised for employee benefits are analysed below:

11.2 Employee benefits

The liabilities recognised for employee benefits consist of the following amounts:

2018

$'000

2017

$'000

Current

Prepayments 3 55

Deposits 72 -

Total other assets 75 55

2018

$'000

2017

$'000

Current

Trade payables 170 43

Other creditors and accruals 216 244

Credit Cards 19 10

Total Trade and other payables 405 297

Notes2018

$'000

2017

$'000

Wages, salaries 1,808 1,411

Workers compensation insurance 15 16

Superannuation 184 134

Employee benefit 11.2 (15) 50

Staff training 11 11

Employee benefits expense 2,003 1,622

2018

$'000

2017

$'000

Current

Annual Leave 54 69

Total Employee benefits 54 69

21

12 Other liabilities

Other liabilities can be summarised as follows:

Deferred income consists of government grants received in advance for services to be rendered by the company. Deferred income is expended as project commitments are met.

13 Interest in joint venture

The consolidated entity has 50% interest in Nureka Pty Ltd which is a for-profit joint venture. As the entity is a jointly controlled entity it has been treated as a joint venture under AASB 128 Investments in Associates and Joint Ventures, with the consolidated entity’s investment in Nureka Pty Ltd accounted for using the equity method in the consolidated financial statements. Nureka is a joint venture, formed between NERA and Eureka Platform Pty Ltd, for the purpose of providing the oil and gas industry with an innovation and collaboration platform. Nureka’s objective is to provide the industry with an open source platform, delivering both innovation and collaboration capability within a single platform structure, for users across the entire oil and gas ecosystem. Summarised statement of financial position of Nureka Pty Ltd:

Summarised statement of profit or loss and other comprehensive income of Nureka Pty Ltd:

The above loss has not been recognised. The original investment by NERA’s 50% share in Nureka Pty Ltd was 1 ordinary share at cost of $1. As a result of impairment in the 2018 financial year this cost base has been fully impaired in accordance with AASB 128 Investments in Associates and Joint Ventures.

2018

$'000

2017

$'000

Deferred income 10,086 4,434

Accrued Interest (8) -

Industry Project Funds 122 -

Total other liabilities 10,200 4,434

2018

$'000

Cash and cash equivalents 69

Trade and other receivables 82

Trade and other payables (136)

Loans to related parties (80)

Net assets/equity (65)

NERA's 50% share of Nureka Pty Ltd's net assets (33)

NERA's carrying amount of the investment in Nureka Pty Ltd -

NERA's unimpaired share of Nureka's loss for period (33)

2018

$'000

Revenue 187

Employee benefits expense (14)

Marketing and branding expense (26)

Professional fees expense (7)

Other fees expense (206)

Surplus / (deficit) before income tax (65)

Income tax expense -

Surplus / (deficit) (65)

Other comprehensive income -

Total comprehensive income for the period (65)

NERA's 50% share of Nureka Pty Ltd's surplus/(deficit) for the period (33)

22

14 Post-reporting date events

No adjusting or significant non-adjusting events have occurred between the reporting date and the date of

authorisation.

15 Subsequent event requiring disclosure

The May 2018 Federal budget provided additional $5 million per annum for a further two years beyond NERA’s

current funding agreement. The Federal Government has called for NERA to submit a business case by 31

October 2018 for funding from 2020 to 2022.

On meeting its milestone outlined in the Commonwealth Funding Agreement, the Company received $875,000 of

Program Funds and $3 million in Project Funds. The Company also received $348,000 in July 2018 from the

Western Australian Energy Research Alliance as part of the Western Australian Government’s commitment to

support NERA programs focused on small to medium business engagement.

23

Directors’ Declaration

In the opinion of the Directors of the Australian Energy Resources Growth Centre Ltd:

a The consolidated financial statements and notes of the Australian Energy Resources Growth Centre Ltd

are in accordance with the Corporations Act 2001, including:

i Giving a true and fair view of its financial position as at 30 June 2018 and of its performance for the

financial year ended on that date; and

ii Complying with Australian Accounting Standards – Reduced Disclosure Requirements (including the

Australian Accounting Interpretations) and the Corporations Regulations 2001; and

b There are reasonable grounds to believe that the Australian Energy Resources Growth Centre Ltd will be

able to pay its debts as and when they become due and payable.

Signed in accordance with a resolution of the Directors.

Ken Fitzpatrick

Chair

31 October 2018

Erica Smyth

Non-Executive Director

31 October 2018

24

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152-158 St Georges Terrace

Perth WA 6000

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E [email protected]

W www.grantthornton.com.au

Independent Auditor’s Report to the Members of Australian Energy Resources Growth Centre Limited

Auditor’s Opinion

We have audited the financial report of Australian Energy Resources Growth Centre Limited (the

Company) and its subsidiaries (the Group), which comprises the consolidated statement of

financial position as at 30 June 2018, the consolidated statement of profit or loss and other

comprehensive income, consolidated statement of changes in equity and consolidated statement

of cash flows for the year then ended, and notes to the financial statements, including a summary

of significant accounting policies, and the directors’ declaration.

In our opinion, the accompanying financial report of Australian Energy Resources Growth Centre

Limited is in accordance with the Corporations Act 2001, including:

a giving a true and fair view of the Group’s financial position as at 30 June 2018 and of its

performance for the year ended on that date; and

b complying with Australian Accounting Standards and the Corporations Regulations 2001.

Basis for Opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities

under those standards are further described in the Auditor’s Responsibilities for the Audit of the

Financial Report section of our report. We are independent of the Company in accordance with

the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical

Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are

relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical

responsibilities in accordance with the Code.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a

basis for our opinion.

Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389

‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the

context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm

is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and

are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its

Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.

Liability limited by a scheme approved under Professional Standards Legislation.

mailto:[email protected]

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Information other than the Financial Report and Auditor's Report

The Directors are responsible for the other information. The other information comprises the

information included in Group’s Annual report for the year ended 30 June 2018, but does not include

the financial report and our auditor’s report thereon.

Our opinion on the financial report does not cover the other information and accordingly we do not

express any form of assurance conclusion thereon.

In connection with our audit of the financial report, our responsibility is to read the other information and, in

doing so, consider whether the other information is materially inconsistent with the financial report or our

knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other

information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Directors for the Financial Report

The Directors of the Company are responsible for the preparation of the financial report that gives a true

and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001. The

Directors responsibility also includes such internal control as the Directors determine is necessary to

enable the preparation of the financial report that gives a true and fair view and is free from material

misstatement, whether due to fraud or error.

In preparing the financial report, the Directors are responsible for assessing the Company’s ability to

continue as a going concern, disclosing, as applicable, matters related to going concern and using the

going concern basis of accounting unless management either intends to liquidate the Company or to

cease operations, or has no realistic alternative but to do so.

Auditor’s Responsibilities for the Audit of the Financial Report

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free

from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes

our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit

conducted in accordance with the Australian Auditing Standards will always detect a material

misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,

individually or in the aggregate, they could reasonably be expected to influence the economic decisions of

users taken on the basis of this financial report.

A further description of our responsibilities for the audit of the financial report is located at the Auditing and

Assurance Standards Board website at: http://www.auasb.gov.au/auditors_files/ar3.pdf . This description

forms part of our auditor’s report.

GRANT THORNTON AUDIT PTY LTD Chartered Accountants

P W Warr

Partner - Audit & Assurance Perth,

31 October 2018

25

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2017/18 annual report - nera.org.au

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