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Woodside pays massive tax on record year

Totals US$2.22B across global operations

Woodside pays massive tax on record year

In total, Woodside paid US$2.22 billion (A$3.35 billion) in royalties, petroleum resource rent tax, corporate taxes and other contributions to governments around the world where it operates.

Australia was the biggest beneficiary with $1.42 billion paid to the Australian Taxation Office. It paid a further $366 million to the federal government Department of Industry, Science and Resources in royalties.

The biggest contributing field is Woodside's assets on the North West Shelf venture at $637 million in royalties and taxes. Fields in the Bass Strait were worth $386 million, while Pluto fields contributed $325.5 million.

Elsewhere, Woodside paid Mexican authorities $2.6 million, Timor-Leste $300,000, and Trinidad and Tobago $217.6 million.

US authorities were paid $205 million for the financial year for Woodside's operating assets in the Gulf of Mexico.

The massive tax and royalty payments followed a record year in profits of US$6.5 billion.

Woodside chief financial officer Graham Tiver said in a statement the company was one of Australia's largest taxpayers.

"We are also part of the Australian Tax Office's Justified Trust Program, which is designed to assure that companies are paying the right amount of tax," he noted.

"We comply with the tax laws and regulations applicable to our business and engage with tax policy setters and administrators in an open and constructive way.

"[Woodside] are proud of the contributions we make to the communities where we live and work, and look forward to continuing to support them into the future."

The staggering payments fly in the face of previous media reports which allege Woodside pay no tax.

A report from The Guardian published in November last year claimed Woodside paid no corporate income tax over 2020-2021.

However, Woodside's subsidiaries did pay corporate income tax over that year, to the tune of $390 million.

PRRT change 

In May, Australia's government made changes to the Petroleum Resource Rent Tax. 

Labor introduced a new 90% cap on deductions that can be offset from the beginning of the new financial year. It was based on a historical agreement for the NWS venture struck many decades ago. 

This leaves 10% open to be taxed. Typically Australia's large-scale LNG projects do not pay much tax until the vast capital spends to build facilities have been earned back by companies. 
 
Offshore gas projects will be hit with an additional 4% tax, save the Woodside Energy Group-operated North West Shelf, which is so old it operates under a separate revenue regime. 
 
The changes to the PRRT could add up to an additional $2.4 billion over the next four years; it was reportedly the one of three options with the least financial impact. 
 
Canberra can take 40% of profits from all projects eight years or older, but gas is essentially taxed from the wellhead and not sales, somewhat complicating matters. 
 
Complaints have been muted compared to changes to the Safeguard Mechanism, the Code of Conduct, the Australian Domestic Gas Security Mechanism and the $12 per gigajoule price cap imposed at the end of December. 

A growing series of reports, each focused on a key discussion point for the energy sector, brought to you by the Energy News Bulletin Intelligence team.

A growing series of reports, each focused on a key discussion point for the energy sector, brought to you by the Energy News Bulletin Intelligence team.

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