CANBERRA: International oil giant Chevron has revealed it is facing a second, separate audit from the Australian Taxation Office over its financial affairs. Under questioning at a Senate hearing into corporate tax avoidance in Perth yesterday, Chevron Australia managing director Nigel Hearne and tax manager Michael Fenner revealed the group was in talks with the ATO over the deductibility of some of the tens of billions of dollars it has invested in its Australian liquefied natural gas projects.
The revelation overshadowed the group’s efforts to restore the reputational damage it has suffered since last week’s decision by the Federal Court that Chevron could be liable for more than $300 million in unpaid taxes related to its contentious inter-company loans. Mr Hearne revealed to the hearing that the group expected to pay between $60 billion and $140bn in petroleum resource rent tax over the life of its huge Gorgon and Wheatstone LNG plants, although he said those payments were unlikely to kick in until 2029 at the earliest. The PRRT will only start to apply once Chevron has recouped the estimated $80bn it has spent building Gorgon and Wheatstone. Under questioning from Greens senator Peter Whish-Wilson, Mr Fenner said the company was working through a second audit from the ATO, separate to the inter-companies loan issue. “The other matter is around the treatment of some of the costs we incurred during the construction phase and how that should be treated for tax. That’s still currently in audit,” Mr Fenner said. While he did not reveal the amount of money under dispute, even a small percentage of the $80bn spent on construction by Chevron in recent years would run into the hundreds of millions — or even billions — of dollars.
