Revenue from the NWS venture between July 2014 and December 2015 was $19.7 billion, from which $1.9 billion was collected in royalties.
The ANAO has labelled the royalties collected not “sufficiently efficient or effective” while also claiming there are “significant shortcomings in the framework for collecting NWS royalties”.
The ANAO says the consolidated Royalty Schedule, which governs the calculations, has not been updated in ten years.
Furthermore, the reports says the companies involved are being permitted to claim significant deductions in operating costs and the depreciation of capital assets, which in turn is reducing the amount of royalties paid.
The report finds that “there has been limited scrutiny of the claimed deductions” and “some errors in claiming the deductions have been identified, but the available evidence indicates the problems are much greater than has yet been quantified.”
The NWS royalty scheme was designed decades ago and sees the commonwealth claim one third of royalties with Western Australia claiming the other two.
The Western Australian Department of Mines and Petroleum is in charge of calculating the royalties, while the federal government’s Department of Industry, Innovation and Science collects them.
The North West Shelf (NWS) Project is owned by the NWS Joint Venture, comprising BHP Billiton Petroleum (North West Shelf), BP Developments Australia, Chevron Australia, Japan Australia LNG (MIMI), Shell Development (Australia) and operator Woodside Energy.
You can read the ANAO’s Collection of North West Shelf Royalty Revenue report here.
