Citi said this would likely be the last change to PRRT
before the legislation expires in April 2026, when it may
require an overhaul.
(Reporting by Sameer Manekar and Harish Sridharan in Bengaluru;
Editing by Rashmi Aich)
(Adds Woodside comment in paragraph 8, details on Scarborough
and Browse in paragraph 7, background on PRRT in paragraphs 4 &
6)
May 8 (Reuters) - Shares of Australian liquefied natural
gas (LNG) producers rose on Monday after the government adopted
more favourable-than-expected changes to petroleum tax, ensuring
the load was shared across the industry and did not impact
growth projects.
Woodside Energy Group Ltd , the country's biggest
independent oil and gas producer, was trading 2.5% higher, while
closest rival Santos Ltd was up 1.5% as at 0249 GMT.
Beach Energy Ltd jumped 2.5%.
Over the weekend, Australia announced plans to change its
Petroleum Resource Rent Tax (PRRT) to increase the tax paid by
the offshore LNG industry, moves that should increase revenue by
A$2.4 billion ($1.6 billion) over the next four fiscal years.
Treasurer Jim Chalmers said reviews found that aspects of
the PRRT were better suited to oil projects than LNG projects,
and the deductions cap and other changes would help address
that.
"The deductions cap seems to have struck a good balance
between sharing the load across industry, earning more cash tax
for government, and not threatening economics of growth
projects," analysts at Citi wrote in a note.
"The deductions cap only starts when a project has been
producing for 7 years, so that the IRR (internal rate of return)
of new projects isn't materially compromised, which is a relief
for Browse and Scarborough."
Woodside's $12 billion Scarborough development is expected
to start producing LNG only in 2026. The Browse project,
estimated to cost $20.5 billion, is Australia's largest untapped
gas resource.
"We will continue to engage constructively with the
government on ways to support a functioning market and a
positive investment climate for industry to deliver the energy
Australians need," a Woodside spokesperson said.
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