It was a routine disclosure to the corporate watchdog, although the details were anything but ordinary.
Chevron, the US energy behemoth, had revealed the results of a bumper year in which it posted record profits from its Australian operations.
Earnings tripled to $US8.1 billion — or more than $12 billion — in the 12 months to the end of December.
Surging prices on the back of Russia's invasion of Ukraine propelled revenue from Chevron's giant Australian liquefied natural gas plants from $13 billion in 2021 to more than $24 billion in 2022.
For Chevron, which has its roots in the Standard Oil petroleum empire built up by John D Rockefeller in the late 19th and early 20th centuries, the results were a vindication.
The firm had been dealing for years with cost blowouts and operational problems at its $81 billion Gorgon and $51 billion Wheatstone LNG projects off Western Australia's north-west coast.
It had endured the stomach-churning lows of the gas market in 2020, when the outbreak of COVID-19 sent prices tumbling to unprecedented depths.
And now, its big Australian bets are finally paying off as Chevron reaps the benefits of sky-high prices.
In spite of the numbers, it was a comment accompanying the results that caught the eye of industry and government insiders.
"Chevron is on track to become one of Australia's largest taxpayers," its Australian boss Mark Chatfield declared.
'Australia should make out like a bandit'
Indeed, Chevron last year paid a hefty corporate tax bill of $4 billion.
But that it felt the need to lean into the issue of tax in Australia was revealing.
For months now, the issue of how much — or how little — tax gas producers pay in Australia has been steadily rising up the political agenda.
At issue is not so much the corporate tax that gas producers, like every other company in Australia, must pay on the profits they earn.
The real issue is the return Australians get from the natural resources they own — in this case gas — and which the producers are given the right to tap and export.
It is a return that is supposed to be provided through what is known as the Petroleum Resource Rent Tax (PRRT).
Economist Chris Richardson says the purpose of the tax is simple — to capture a share of any excess profits generated by oil and gas projects operating in Australia, typically in Commonwealth waters.
But he says there is just one problem — the PRRT does not really work.
"We're talking about natural resources," Mr Richardson says.
"It's a one-off.
"The world will move on to other energy sources … but in the meantime, we happen to have this gift.
"And so Australia should make out like a bandit.
"As it turns out, the companies are making out like bandits and we're the chumps."
Last week, the political heat over the PRRT reached boiling point when Treasurer Jim Chalmers confirmed he had received a report recommending an overhaul of its settings.
Instead of keeping his own counsel, Dr Chalmers signalled the government was open to changes.
"We've said for some time now that we want to make sure that the PRRT arrangements are up to scratch," Dr Chalmers said.
'World-leading' for its complexity
The PRRT was introduced by the Hawke government in 1987 when Mr Richardson says it was seen as a "world-leading" way of taxing natural resources.
According to him, the tax was designed to ensure companies were only liable to pay it after they had recouped the up-front costs of exploring for and developing petroleum projects.
Once this point had been reached, their profits would be taxed at a rate of 40 per cent.
But while the intent of the tax was simple enough, experts suggest its application in practice has become anything but straightforward.
In a landmark 2017 review, former treasury official Mike Callaghan found the tax was arcane.
For starters, he said the way companies were able to write down their costs was complex and open to misclassification yet had a huge bearing on when — or even if — they would have to pay the tax.
To ensure legitimate costs were not eroded by time and inflation, he said they were given a so-called uplift or indexation rate — which increased their value — every year until they were deducted.
Under the original PRRT design, this was calculated at the long-term bond rate — what it costs the Commonwealth to borrow money — plus 15 per cent, a level described by Mr Richardson as "way too generous".
Changes made in 1991 cut this uplift rate for general project spending to the long-term bond rate plus 5 per cent.
At the same time, another change enabled exploration costs to be transferred between projects within the same company.
In his review, Mr Callaghan suggested this was a boon for producers.
It allowed companies to ensure exploration expenditure on dud wells would not languish and have to be written off.
Tax shields and lavish 'generosity'
In fact, those costs could be transferred from unproductive fields to productive projects where they would offset positive cashflows.
Despite this reduced risk, Mr Callaghan noted exploration spending incurred from July 1990 was still allowed to be carried forward at the higher, original rate.
"[This] allows exploration deductions to almost double every four years, which means that a moderate amount of exploration expenditure can grow into a large tax shield," Mr Callaghan wrote.
Kristen Sobeck, from the Australian National University's Tax and Transfer Policy Institute, said the evolution of the country's oil and gas industry also loomed large.
Since the tax came into effect 35 years ago, she says the industry has transformed from one centred on oil production to one totally dominated by massive, long-lived LNG projects.
Whereas an oil project typically took a lot less time and money to develop and hence could end up paying the PRRT within a few years, Ms Sobeck says LNG projects are much costlier and take longer to build.
As such, she says the value of costs that could be used to offset future cashflows can grow to monumental sizes.
"So, as a result of that, these very, very large uplift rates end up compounding for a much, much longer period than anticipated originally," Ms Sobeck says.
A final complication was the process of determining gas prices to calculate how much money a project made.
This calculation was crucial for working out how soon a project would pay off its costs and therefore become liable for the PRRT.
But Mr Callaghan said it was made much more difficult by the prevalence of integrated LNG projects, which technically processed gas in huge plants so it could be stored as a liquid on ships and transported.
Mr Callaghan noted the tax was only applied to the unprocessed gas used to make LNG and not the value-added product.
Opaque gas pricing 'raises issues'
However, Mr Callaghan said there was "no observable arm's length price" struck between the part of an LNG project that pumped it out of the ground to the part that processed it.
In the absence of that, he said there was an extraordinarily detailed 14-step process that allowed project costs to be deducted according to a specified order.
And it was here that he said major questions arose, outlining how exploration costs that could have been accruing generous uplift rates for years were allowed to be deducted after other, more recent expenditure indexed at much lower rates.
"The [pricing] method under the [gas transfer] arrangements is complex, opaque and raises issues as to whether the outcome ensures the Australian community is receiving an equitable share from the gas used in LNG projects," Mr Callaghan concluded.
The Australian Petroleum Production and Exploration Association (APPEA) is pushing back against calls for an overhaul of the PRRT, saying the tax is working well and as intended.
In a statement last week, APPEA's chief Samantha McCulloch said payments from Australia's oil and gas industry to governments were set to almost triple to $16 billion this year.
Among these would be almost $9 billion of corporate tax, $5 billion of royalties and excise, and almost $2 billion in PRRT.
Ms McCulloch warned that hitting the industry with any further tax increases would risk investment in much-needed new gas supplies and the jobs this created.
"This $16 billion will help governments fund policies like disability support and paid parental leave as well as important infrastructure like roads, schools, and hospitals," Ms McCulloch said.
Woodside warns against tax 'overreach'
Meg O'Neill, the boss of listed Australian gas giant Woodside, has also gone on the front foot, telling the National Press Club last week that changes to the PRRT could risk future investment.
Stressing Woodside is "an Australian company and we pay our way", Ms O'Neill said the producer already faced an "all-in effective tax rate of 46 per cent".
"Overreaching now could risk undermining future revenue," Ms O'Neill said.
Ms Sobeck noted the previous Coalition government started work to tighten the PRRT.
In response to the Callaghan review, former treasurer Josh Frydenberg slashed the uplift rate for exploration costs from the long-term bond rate plus 15 per cent to the bond rate plus 5 per cent.
But Ms Sobeck pointed out those changes were not retrospective, shielding the glut of recent LNG development costs — and their uplift rates — from any effect.
For his part, Mr Callaghan modelled just what sort of money was at stake.
He found the PRRT was forecast to raise $48 billion between 2018 and 2050 under the current settings based on an oil price of $US65 a barrel.
Yet this could rise to $105 billion by tightening the rules governing how deductible exploration expenditure was treated within a company.
It would jump again — to $169 billion of revenue — if the same changes were made at an average oil price of $US80 a barrel, roughly where they are today.
Current settings untenable: economist
Mr Richardson says he has mixed feelings about overhauling the PRRT.
On the one hand, he says poor design and structural changes in the local petroleum industry had exposed massive weaknesses in the tax that was Australia's own fault.
And he says it is unfair to accuse the gas producers of taking advantage of a poorly designed tax, arguing they are acting legally and rationally.
Nevertheless, he says it was untenable for the country to miss out on receiving a better return from a finite resource it, ultimately, owns.
"We went from this world-leading tax system to something that is collecting beer nuts, and there are big projects that will never pay any tax," Mr Richardson says.
"I will heartily admit that Australia screwed up … but it doesn't change the fact that the deal needs to change.
"Australia not getting something out of a big pie is a problem.
"Australia not getting something out of an enormous pie is an even bigger problem."
