The word profit is key here. Samantha Hepburn, a law professor specialising in energy governance at Deakin University, said gas companies do not pay PRRT until they have deducted their capital costs \u2014 a feature aimed at encouraging investment.\u00a0<\/p>\n
Chevron’s Gorgon LNG project off the coast of WA, for example, cost around $70 billion to build and began production in 2016. The company made its first PRRT payment in 2025.\u00a0<\/p>\n
![\"An](\"https:\/\/www.europesays.com\/australia\/wp-content\/uploads\/2026\/04\/eb79fb13ebb36253a7cc8add044f23d1.jpeg\")
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Chevron, which owns the Gorgon LNG project, made its first PRRT payment last year.\u00a0 (Supplied: Chevron)<\/p>\n
“The uplift provisions have allowed significant capital and infrastructure deductions to be offset against profit,” Ms Hepburn said.\u00a0<\/p>\n
“That means many offshore companies haven’t paid much of that tax for quite a few years.”<\/p>\n
The PRRT raised about $1.3 billion in 2024-25, a year when LNG export revenues exceeded $65 billion.\u00a0<\/p>\n
The gas industry, however, argues the PRRT is only one part of its broader tax and economic contribution.\u00a0<\/p>\n
It also backs the idea of not having to pay PRRT until a project has recovered all of its costs, due to the high-risk and costly nature of developing gas fields.\u00a0<\/p>\n
This financial year, the PRRT is forecast to raise about $2 billion.<\/p>\n
Corporate tax<\/p>\n
Gas companies also pay corporate tax, just like every other corporation in Australia.\u00a0<\/p>\n
The peak body representing oil and gas companies, Australian Energy Producers (AEP), estimated the industry paid about $13.5 billion in corporate tax in 2024-25.\u00a0<\/p>\n
Woodside tells inquiry no projects ‘would survive’ with additional tax<\/a><\/p>\n Oil and gas giant Woodside denies its business model is “weak” while arguing that paying a proposed flat tax on gas exports would kill the company’s projects.<\/p>\n Sometimes, gas companies can avoid or reduce the amount of corporate tax they pay through various accounting strategies, such as carrying forward losses or claiming capital deductions.\u00a0<\/p>\n Drilling for gas is a very expensive, high-risk investment, and sometimes a company’s deductions are so large that they can cancel out profits for years.<\/p>\n For example, gas giant Santos and the Darwin-based Ichthys LNG project paid zero corporate tax in the 2023-24 financial year, according to data from the Australian Taxation Office.\u00a0<\/p>\n Royalties<\/p>\n Another form of revenue comes via royalties imposed by state and territory governments on onshore gas projects.\u00a0<\/p>\n Royalties are not a tax.<\/p>\n They are a sum paid to the government for the right to extract a public resource.\u00a0<\/p>\n Typically, royalties are levied at a rate of about 5 to 10 per cent per well head value (the market value calculated at the point of production), but it varies across each jurisdiction.\u00a0<\/p>\n In 2022-23, petroleum and gas royalties in Queensland and Western Australia alone were worth an estimated $3.7 billion.<\/p>\n That same year, producers made an estimated $36 billion exporting LNG from Queensland, and about $56 billion from WA, according to modelling from the Australia Institute think tank.\u00a0<\/p>\n Like all other employers, gas companies must also pay payroll tax to state and territory governments.<\/p>\n Gas industry claims it pays enough tax<\/p>\n AEP has long argued the industry pays its fair share of tax, estimating the oil and gas industry contributed nearly $22 billion in taxes and royalties in 2024-25.<\/p>\n That includes $13.5 billion in corporate tax, $1.3 billion in PRRT, $6.6 billion in royalties and $492 million in other taxes.\u00a0<\/p>\n Corporate tax is owed by every company in Australia and is not an extra levy imposed for extracting a public resource.\u00a0<\/p>\n Samantha McCulloch says higher taxes on gas will make Australia “uninvestable”.\u00a0 (ABC News: Cason Ho)<\/p>\n Gas tax advocates often compare Australia’s export revenue to other major LNG exporters, such as Norway and Qatar, which rake in tens of billions of dollars every year.\u00a0<\/p>\n But AEP argues that it is not a fair comparison, as Norway and Qatar have very different tax regimes and they both publicly own a large share of their gas resources, unlike Australia, which relies more heavily on private investment.\u00a0<\/p>\n Chief executive Samantha McCulloch said assertions that Australia’s gas industry was not paying its fair share were “demonstrably wrong”.<\/p>\n “In contrast, higher taxes will make Australia uninvestable for new oil and gas projects, putting our future energy security at risk,” she said in a statement.\u00a0<\/p>\n The ABC revealed last week that, after much speculation, the prime minister had killed off moves to increase taxes on gas exporters<\/a> in next month’s budget, with timing among the key issues.\u00a0<\/p>\n Will hiking taxes on gas exports deter foreign investment?\u00a0<\/p>\n That all depends on how the tax is designed, according to experts.<\/p>\n The gas industry, federal government and the opposition have all raised concerns that increasing taxation \u2014 during a global energy crisis \u2014 could hurt Australia’s reputation as a reliable trading partner.\u00a0<\/p>\n They say a windfall profits tax would upset key customers, and investors, such as Japan, Malaysia and South Korea \u2014 the very countries now prioritising liquid fuel supplies to Australia.\u00a0<\/p>\n![\"Samantha](\"https:\/\/www.europesays.com\/australia\/wp-content\/uploads\/2026\/04\/e87c7575884fc9fd604e452c6d85c0ca.jpeg\")
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