Despite millions being allocated to energy in the 2018-19 Budget, the oil and gas industry has been left hanging with no certainty around changes to the Petroleum Resource Rent Tax (PRRT).
It was widely reported that Treasurer Scott Morrison would announce changes to the PRRT when he delivered his budget speech on Tuesday night.
However, with nothing mentioned on the PRRT, more than $50 billion worth of proposed projects are now in limbo, according to the Australian Financial Review (AFR).
While any changes to the PRRT were unlikely to affect existing projects, new and proposed projects such as Woodside’s Browse and Scarborough developments and ConocoPhillips’ Barossa project could be subject to the changed tax.
“We look forward to the conclusion of the PRRT review, which was announced in November 2016, as ongoing uncertainty jeopardises investment in our Australian projects,” said Woodside CEO Peter Coleman.
“Woodside paid $797 million in state and federal taxes in 2017, and has plans to make new investment decisions worth more than US$30 billion (AU$40.2 billion) over the next few years.
“As an Australian company with Australian growth prospects, we will continue to advocate the need for a competitive and stable regime.”
A spokesperson for the Treasurer said the government is still considering changes to the PRRT.
The budget papers revealed revenue from the PRRT will grow by 18.5 per cent in FY18 to $1.1 billion, jumping a further 22.7 per cent in FY19 to $1.35 billion, after which it is expected to plateau until 2021-22, adding $1 billion over four years.