Exxon: $740m hit ample
EXXONMOBIL has rejected calls for a super profits tax, saying its $740m in petroleum resource rent payments showed Australia already had a windfall tax in place for the nation’s oil and gas industry.
The US energy major also said it had paid corporate tax for the first time in nearly a decade after high oil and gas prices this year inflated the industry’s balance sheets and produced huge profits.
Exxon’s Australian arm said it had paid $740m in petroleum resource rent tax for the year ending June 2022, including $260m for the last quarter, compared with $423m for the 2021 financial year.
The $740m sum “is almost as much as paid for the entire 2020 tax year when oil prices turned negative during the height of the pandemic and the company experienced significant losses”, Exxon said in a statement.
Several of Australia’s big energy companies including Exxon and Chevron have been touting their tax payments amid calls from unions and the Greens for a super-profits tax to reflect surging earnings for the local industry from skyhigh LNG prices.
Producers consider a super profits tax on oil and gas companies possible but unlikely, given it would discourage bringing new supply into the market.
The PRRT applies to profits from petroleum projects but allows companies to deduct their exploration costs and expenses before they hit production, meaning many large producers can carry over concessions from year to year.
Exxon said it was working as intended.
“This PRRT uplift in response to changing market conditions demonstrates that Australia’s long-standing petroleum windfall tax – the PRRT – is working and meeting its objective as a super profits tax,” Exxon said.
The energy company in May declared it would resume paying corporate tax for the first time in nearly a decade due to booming commodity prices. It says it will pay $750m in corporate tax for the year ending December 31, 2022.
Its 2022 results will be filed in early 2023 as it operates on a calendar year. It posted a $1.57bn profit after tax for the 2021 financial year after its earnings were hammered the year before from a massive Covid-19 sparked crash in oil and gas markets, which saw it scrape a slim $69m profit.
The company has been among energy majors criticised for paying little or no corporate tax given they have been able to claim deductions for exploration and major investments in Australia.
Exxon remains one of eastern Australia’s biggest gas players with Woodside its new partner in Victoria’s Bass Strait following the WA producer’s merger deal with existing partner BHP Petroleum.
Exxon in March pulled the trigger on a $400m investment in expanding gas development in the Gippsland Basin in a move aimed at shoring up supplies for Australia’s southern states and plans to develop a major carbon capture and storage project offshore Victoria’s Gippsland Basin, the latest push by the oil and gas industry to boost green credentials.