Shell says it does not expect to pay Australia resource tax on gas drawn from its Gorgon offshore project.

Shell included a projection about taxes on the gas in its latest annual report.

It includes details for Gorgon – a project off the WA coast that is expected to provide 15.6 million tonnes of gas a year – and the smaller Prelude project, another floating gas facility off WA.

Australian law puts the mining of petrol products, including gas, under a special tax called the petroleum resource rent tax (PRRT).

The tax only applies to fields in their production phase, and historically has failed to produce significant government income despite billions of dollars in profit made on oil and gas fields.

Shell predicts that it will never pay any PRRT, saying it has AU$51.7 billion in “unrecognised losses for Petroleum Resource Rent Tax (PRRT) in Australia”, which it does not expect to have to pay. 

“Based on business forecasts at existing commodity price levels, and the annual augmentation of the unused PRRT losses, this amount is expected to increase in the near future,” it said.

Increasing that amount means not having to pay the tax for longer than expected.

However, the company notes that an increase in the gas price may make its Australian projects more profitable, and bring the attention of those that collect the tax.

“To the extent assumptions regarding future profitability change, there can be an increase or decrease in the amounts recognised in respect of deferred tax assets as well as in the amounts recognised in income in the period in which the change occurs,” it said.

Chevron has raised its unused tax benefit from PRRT from AU$6.3 billion to AU$8.3 billion, suggesting the point at which it starts paying the tax is now further into the future.

Both companies say they are complying with their legal and taxation obligations.