Falling prices for liquefied natural gas and oil have prompted investment firms to cut profit forecasts for some of Australia’s largest energy producers. RBC analyst Gordon Ramsay identified Woodside as the producer with the biggest impact on price changes due to its large spot LNG exposure, followed by Santos.
The drop in commodity prices comes as Woodside and other East Coast oil and gas producers come under increasing pressure from a series of government measures to curb soaring energy costs, including mandating that domestic Natural gas sales were capped at $12 per gigajoule for 12 months, and reforms enabled the government to more regularly divert exports to the domestic market to prevent potential shortages.
Earlier this week, the Albanese government said Weighing whether to tax soaring gas industry profits Pass reform of the $2 billion annual Petroleum Resource Rent Tax (PRRT).
In a speech at the National Press Club on Wednesday, O’Neill said “overstretching” on tax reform could hurt future revenues.
“We urge the government to take the long term and preserve Australia’s ability to attract the next generation of investment, jobs and energy supply when making any changes to the tax framework,” she said.
The PRRT is levied on offshore oil or gas projects at a rate of 40% on their taxable profits – but this is applied after a substantial deduction for capital investment, prompting comparisons between the amount of revenue raised and the likes of Woodside, Gas giants including Chevron and Santos.
While the government has yet to finalize its position, Chalmers announced that the jury is still out on whether the scheme is delivering the revenue the community expects.
“We’ve said for some time that we want to make sure that the PRRT arrangements are in order,” he said.