For a number of years prior to 2021, Chevron Australia incurred negligible or no income tax liability. That’s because, together with our joint venture partners, we spent more than $80 billion from 2009-2018 constructing the Gorgon and Wheatstone natural gas projects. The significant capital costs relating to the construction of these projects are tax deductible and, as a result, Chevron Australia operated in a tax loss until 2021.

It’s common for businesses of all kinds to operate in losses for several years while they are starting up. This is because large capital costs may be incurred to purchase or build assets, which will be used in future operations over a long period, and these costs can be offset against revenue, resulting in a tax loss. The losses are able to be carried forward and offset against revenue in future years. These accounting and tax principles apply to any business, regardless of their size or revenue.

During the period in which Chevron Australia did not pay income tax, we still paid billions in other corporate taxes, such as payroll tax, fringe benefits tax, withholding taxes, excise and royalties.

The figure shown below explains the life cycle of major oil and gas projects like Gorgon and Wheatstone and the different taxes paid at each stage.

Yes. Now that our Gorgon and Wheatstone natural gas facilities are past the initial start-up phase and in full production, we expect we will continue to make profits and pay significant income tax for decades to come.

Like most businesses, we can’t predict the exact amount of income tax we will pay in the future as it depends on a number of unknowns such as our profit, which is driven by factors like oil and gas prices, foreign exchange rates and production volumes, and can change on a regular basis.

Yes. In 2025 we continue to pay royalties in relation to our one-sixth interest in the North West Shelf Project. Prior to moving into the decommissioning phase of the project life cycle, our WA Oil asset on Barrow Island also paid significant royalties. Royalty payments from both of these projects are shared by the Western Australian and Australian governments.

Whether a project is subject to a royalty regime or Petroleum Resource Rent Tax is generally based on the location of the relevant gas fields. The Gorgon and Wheatstone natural gas facilities are supplied by gas fields located in Commonwealth waters, so production revenues from these projects are subject to the Petroleum Resource Rent Tax instead of royalties.

Yes. Chevron Australia commenced paying PRRT in 2025.

The Petroleum Resource Rent Tax, or PRRT, is a super-profits tax, which means it is not payable until a project has recovered all of its costs and achieved a defined economic return. By design, PRRT is not payable until well after income tax is payable, and later in a project’s life.

We always expected to pay PRRT once we recovered our initial investments in Gorgon and Wheatstone.

In 2024, the Australian Government made changes to the tax law to introduce a 90 percent cap on PRRT deductions. The changes mean that 10 percent of PRRT revenue is subject to 40 percent tax, effective 1 July 2024. As a result, our PRRT liability has been brought forward and payments commenced in 2025.