Oil and gas leviathan Exxon Mobil has managed to pay zero tax in Australia for two years, despite making $18 billion in sales.
Exxon is BHP’s partner in the Bass Strait offshore oil and gas fields and a big beneficiary of rising gas prices. While East Coast commercial and industrial gas customers have been getting slugged astronomical prices of $12-$15 a gigajoule for long-term supply contracts, Exxon shareholders have been pocketing record dividends.
The best known of these is Donald Trump’s Secretary of State Rex Tillerson who struck business deals with Russian President Vladimir Putin. Until last year, Tillerson was chief executive of Exxon until last year and holds $2.5 million Exxon shares which last traded at $US82.07 a share.
If you are asking how a multinational oil company which straps on $18 billion in revenue over two years can get away with paying no tax in Australia, it is a good question, and one we shall be exploring.
Exxon paid a dividend in 2014, one of the years it paid no tax in Australia, of $14.9 billion.
Australia’s gas cartel comprises six players: Santos, BHP, Exxon, Origin, Arrow Energy and Shell. However, as BHP and Exxon enjoy joint marketing arrangements and Shell acquired Arrow Energy, it is really more like a cartel of four.
These companies are not required by government to disclose the extent of their resources, nor the prices at which they contract to export their gas. And that is a large part of the reason why Australians, the owners of the resources, have to pay among the world’s highest prices even though this country has enormous reserves and is headed to become the world’s largest exporter.
Michael West established Michael West Media in 2016 to focus on journalism of high public interest, particularly the rising power of corporations over democracy. West was formerly a journalist and editor with Fairfax newspapers, a columnist for News Corp and even, once, a stockbroker.