Energy majors attack Australia’s proposed LNG windfall tax
Energy majors, including Shell and Chevron, have warned Australia against introducing a windfall tax on LNG exporters.
They claimed it would deter investment and undermine energy security, as LNG prices surge amid disruption caused by the Iran war, according to a Reuters report.
Australia became the world's second-largest LNG supplier after Iranian strikes forced Qatar to halt production, while its export revenue is set to surge, due to the supply disruptions caused by the conflict.
Canberra is weighing options to capitalise on the higher prices, with Prime Minister, Anthony Albanese asking the Treasury Department to model a tax on LNG exports and suggest reforms to the Petroleum Resources Rent Tax (PRRT).
A suggested windfall tax could exceed 25%.
Cecile Wake, Shell Australia chair, which exports gas from the Queensland Curtis LNG project and operates the FLNG ‘Prelude’ off northern Australia, warned against "short-term fixes" in response to the energy crisis.
"At times like this, there is increased risk that strong and stable policy settings are sidelined by short‑term measures or populist rhetoric," she told the Australian Domestic Gas Outlook conference.
The proposed policies would "erode project values and render many of Australia's future growth opportunities uneconomic and uncompetitive compared to global alternatives," Wake said.
She added that high commodity prices "already flow through to Australians through higher corporate income tax and PRRT receipts."
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