This story was originally published in The West Australian on 29 April 2017 with the headline "No tax avoidance at Woodside, tax inquiry told." © Peter Milne.
Woodside Petroleum does not support the use of artificial structures aimed at the avoidance or minimisation of tax, the company’s chief financial officer Anthea McKinnell told a Senate inquiry into the petroleum resources rent tax yesterday.
Ms McKinnell said Woodside funded its operations within Australia so had no opportunity to engage in cross-border financing with related parties.
The transfer prices resource companies use for Australian exports sold through Singapore marketing hubs have been a focus for the Australian Taxation Office in recent years.
Ms McKinnell said Woodside did not apply transfer pricing to Australian production sold through their Singapore marketing office. Fees paid to the office last year were only $1 million.
Chevron taxation manager Michael Fenner told the inquiry Chevron Australia owed related entities $34.5 billion in loan principal and a further $9 billion in interest.
Chevron Australia managing director Nigel Hearne said a Wood Mackenzie analysis of LNG project economics released by oil and gas industry lobby group APPEA was in the same range as Chevron’s analysis.
Wood Mackenzie predicted the Gorgon and Wheatstone projects would achieve 7.7 per cent and 7.8 per cent rates of return respectively at an oil price of $60 a barrel. That was down from 12.6 per cent and 12 per cent expected when the projects were approved.