Gulf Oil and Gas accountACCOUNT

North West Shelf Gas JV Underpaying Royalties

Source: Reuters 11/28/2016, Location: Not categorized

The North West Shelf joint venture, Australia's biggest oil and gas operation, cut royalties it owed by claiming more than A$5 billion ($3.7 billion) in deductions, some of which weren't valid, over the 18 months to December 2015, a government watchdog said.

The Australian National Audit Office (ANAO) said government departments need to take steps to tighten their collection of royalties from the North West Shelf, which accounts for about one-third of the country's oil and gas output. The finding comes at a time when oil and gas producers have been hammered by a slump in prices.

"The Royalty Schedule does not permit all the deductions currently being claimed," the audit office said in a report released on Monday. It said the joint venture reduced the royalty payable by taking more than A$5 billion in deductions, including operating costs, depreciation, cost of capital, crude oil and condensate excise, processing tariffs and joint venture participant costs.

Revenue reported from North West Shelf petroleum sales between July 2014 and December 2015 was A$19.7 billion on which A$1.9 billion in royalties were due. Of that, about a third went to the federal government and the rest to the state of Western Australia.

The audit office questioned the eligibility of deductions claimed for the cost of debt and equity funded capital and the excise paid on crude and condensate.

Australia's Department of Industry agreed with the audit office's recommendations for improving royalty collection.

Western Australia's department of mines and petroleum, however, considered its processes robust and said "the Commonwealth and State governments can be confident that royalties are being accurately assessed and collected."

The North West Shelf joint venture is operated by Woodside Petroleum. Its partners are BHP Billiton , BP, Chevron Corp, Japan's Mitsubishi Corp and Mitsui & Co, and Royal Dutch Shell. Woodside had no immediate comment on the report. ($1 = 1.3385 Australian dollars)

Financials and Investment News in Australia >>

Brazil >>  4/17/2019 - Petrobras has received correspondence from Caixa Economica Federal ("Caixa") informing that it is studying the possibility of selling shares that they...
Botswana >>  4/16/2019 - Tlou Energy Limited is pleased to confirm that it has successfully completed an equity placement to Sophisticated Investors totalling BWP21.8 million ...

Egypt >>  4/16/2019 - A finance ministry report on Egypt’s new budget (2019/20) showed that fuel subsidies will be reduced by EGP 36.112 billion (40 percent) in the new fis...
Ecuador >>  4/15/2019 - The Supreme Court of the Netherlands has ruled in favor of Chevron Corporation, rejecting the Republic of Ecuador’s attempts to annul decisions of an ...

United Kingdom >>  4/15/2019 - MX Oil plc, an oil and gas investing company quoted on AIM, announces the following corporate update: ...
Australia >>  4/12/2019 - Japan Oil, Gas and Metals National Corporation (JOGMEC) announced that it will provide equity financing to INPEX Offshore Timor-Leste, Ltd. (INPEX Off...

Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Australia Oil & Gas 1 >>  2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20 |

More News

Related Links

Gulf Oil and Gas
Copyright © Universal Solutions All rights reserved. - Terms of Service - Privacy Policy.