In 2018–19, NOPSEMA’s financial result was a deficit of $1.4 million.
The forecast for the reporting period was for NOPSEMA to be in deficit by more than
$1 million. The actual result shows levies $0.3M lower than was originally budgeted, impacted by lower levels of activity within the offshore oil and gas sector for 2018–19. Lower industry activity results in decreased levy revenue for NOPSEMA.
Expenditure, specifically employee expense, was also lower than budgeted.
In relation to expenditure, 76 per cent of NOPSEMA’s total expenses relate to employees including the associated recruitment and training of those employees. NOPSEMA is carefully managing staffing levels to ensure it continued to effectively perform its regulatory functions. In addition, NOPSEMA increased activities related to stakeholder and community engagement.
NOPSEMA is forecasting a budget deficit for 2019–20 as a result of increased costs required to fulfil its regulatory functions. This strategy is in accordance with the Australian Government Cost Recovery Guidelines requiring entities to manage cumulative surplus.
NOPSEMA had a new CRIS approved, effective from 1 January 2019. The new fee structure contains a 10 per cent increase to all levies to assist in the adequate cost recovery. This was the first fee increase NOPSEMA had in five years.
NOPSEMA remains financially viable with sufficient cash balances to meet future commitments.