This regulation sets how petroleum and gas royalties are calculated, reported and paid. It classifies produced petroleum (domestic, supply, project gas or liquid petroleum), prescribes formulae and benchmark fallbacks for average sales prices, timing and instalments for payments, and enforcement (fees, penalties, information requests). It affects petroleum producers, resellers and LNG‑project members because it determines who pays, when, and what records and notices must be provided to the revenue commissioner.
This regulation prescribes how petroleum royalty under the Petroleum and Gas (Royalty) Act is to be calculated, reported and paid. Mechanically it implements (for s 590(2) of the Act) three things identified in the Act: the time for payment, the calculation method and the rates payable (s 4). Key structural features set by the regulation are:
Definitions and units: the regulation defines domestic gas, supply gas, project gas, liquid petroleum (oil) and LNG (s 5; ss 6-9), and fixes volume bases (gigajoules for gas and LNG; barrels for oil) and the relevant period used in benchmark calculations (s 14).
Price measurement and pricing rules: for each category (domestic gas, supply gas, project gas, liquid petroleum), the regulation sets an average sales price (ASP) formula and a benchmark price (BP) where relevant (div 3: ss 16-32). The ASP for each commodity class is ASP = (AR + DS) / (AV + DV), i.e. actual revenue from sales to independent buyers plus a deemed sales value for sales to non-independent buyers, divided by corresponding volumes (ss 17, 21, 26, 31). The deemed sales value for non-independent sales is BP × DV (ss 17(2), 21(2), 26(2), 31(2)). Benchmarks for gas categories and LNG link to Brent (Europe Brent Spot Price FOB) converted to AUD using the average hedge settlement rate, while benchmark for domestic gas uses the Wallumbilla End of Day benchmark averaged across the relevant period (ss 15, 22, 27, 29).
Rate schedules: the rate of royalty payable is tiered by the ASP ranges for each category. For example, domestic gas royalty rates are set at a piecewise schedule in s 16 depending on whether ASP is ≤ $3/GJ, between $3 and $8/GJ, or above $8/GJ. Equivalent tiered formulas govern supply gas (s 20), project gas (s 25) and liquid petroleum (s 30).
LNG project determinations and membership: the revenue commissioner may determine that a petroleum venture is an LNG project and must determine project members; notices are required to be given (s 10). Procedures exist for reassessment following such determinations (s 11). Persons who are members who purchase gas must notify non-member producers or resellers of their member status (s 12), and producers must notify the revenue commissioner when project membership changes (s 13).
Current sections
Direct links to the current provisions in Petroleum and Gas (Royalty) Regulation 2021.
111
pt.1
Preliminary
Preliminary
sec.1
Short title
sec.1 Short title
This regulation may be cited as the Petroleum and Gas (Royalty) Regulation 2021 .
sec.2
Commencement
sec.2 Commencement
This regulation commences on 1 September 2021.
sec.3
Dictionary
sec.3 Dictionary
The dictionary in schedule 1 defines particular words used in this regulation.
pt.2
Petroleum royalty
Petroleum royalty
pt.2-div.1
Preliminary
Preliminary
sec.4
Purpose of part
sec.4 Purpose of part
This part prescribes—
for section 590 (2) (a) of the Act , the time on or before which petroleum royalty must be paid; and
for section 590 (2) (b) of the Act , the way in which petroleum royalty is calculated; and
for section 590 (2) (c) of the Act , the rate at which petroleum royalty is payable.
(a) for section 590 (2) (a) of the Act , the time on or before which petroleum royalty must be paid; and
(b) for section 590 (2) (b) of the Act , the way in which petroleum royalty is calculated; and
(c) for section 590 (2) (c) of the Act , the rate at which petroleum royalty is payable.
sec.5
Definitions for part
sec.5 Definitions for part
In this part—
average hedge settlement rate , for a royalty return period, means the average, worked out for the royalty return period, of the hedge settlement rates for each day in the royalty return period.
domestic gas see section 6 .
gas means petroleum in a gaseous state at standard temperature and pressure.
hedge settlement rate , for a day, means the WM/Reuters Australian Fix 10.00a.m. rate on the day.
independent buyer , in relation to a petroleum producer or a reseller for the producer, means a person who is not a relevant entity for the producer.
liquid petroleum see section 9 .
LNG means liquefied natural gas.
LNG project means an LNG project under a determination of the revenue commissioner under section 10 .
LNG project buyer , in relation to a petroleum producer or a reseller for the producer, means a person who the producer or reseller knows is a member of an LNG project because—
the person has, under section 12 (2) , given the producer or the reseller a notice stating that the person is a member of the LNG project; or
the revenue commissioner has, under section 12 (4) , told the producer or the reseller that the person is a member of the LNG project.
member , of an LNG project, means a member of an LNG project under a determination of the revenue commissioner under section 10 .
oil means petroleum in a liquid state.
project gas see section 8 .
standard temperature and pressure means an absolute pressure of 101.325kPa at a temperature of 15ºC.
supply gas see section 7 .
To remove any doubt, it is declared that, for this part, a reference to a petroleum producer includes a participant in a joint venture, or other arrangement, involving the production of petroleum who is taken to be a petroleum producer under section 590 (4) of the Act .
(sec.5-ssec.1) In this part— average hedge settlement rate , for a royalty return period, means the average, worked out for the royalty return period, of the hedge settlement rates for each day in the royalty return period. domestic gas see section 6 . gas means petroleum in a gaseous state at standard temperature and pressure. hedge settlement rate , for a day, means the WM/Reuters Australian Fix 10.00a.m. rate on the day. independent buyer , in relation to a petroleum producer or a reseller for the producer, means a person who is not a relevant entity for the producer. liquid petroleum see section 9 . LNG means liquefied natural gas. LNG project means an LNG project under a determination of the revenue commissioner under section 10 . LNG project buyer , in relation to a petroleum producer or a reseller for the producer, means a person who the producer or reseller knows is a member of an LNG project because— the person has, under section 12 (2) , given the producer or the reseller a notice stating that the person is a member of the LNG project; or the revenue commissioner has, under section 12 (4) , told the producer or the reseller that the person is a member of the LNG project. member , of an LNG project, means a member of an LNG project under a determination of the revenue commissioner under section 10 . oil means petroleum in a liquid state. project gas see section 8 . standard temperature and pressure means an absolute pressure of 101.325kPa at a temperature of 15ºC. supply gas see section 7 .
(sec.5-ssec.2) To remove any doubt, it is declared that, for this part, a reference to a petroleum producer includes a participant in a joint venture, or other arrangement, involving the production of petroleum who is taken to be a petroleum producer under section 590 (4) of the Act .
(a) the person has, under section 12 (2) , given the producer or the reseller a notice stating that the person is a member of the LNG project; or
(b) the revenue commissioner has, under section 12 (4) , told the producer or the reseller that the person is a member of the LNG project.
sec.6
What is domestic gas
sec.6 What is domestic gas
Petroleum produced by a petroleum producer in a royalty return period is domestic gas if—
the petroleum is gas; and
during the royalty return period, the petroleum is—
sold or otherwise transferred, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person who is not an LNG project buyer; or
flared, used or vented; or
if the producer is not a member of an LNG project—stored by, or kept in the possession of, the producer or 1 or more resellers for the producer; and
the petroleum is not supply gas.
In this section—
use , petroleum, does not include convert the petroleum into LNG.
(sec.6-ssec.1) Petroleum produced by a petroleum producer in a royalty return period is domestic gas if— the petroleum is gas; and during the royalty return period, the petroleum is— sold or otherwise transferred, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person who is not an LNG project buyer; or flared, used or vented; or if the producer is not a member of an LNG project—stored by, or kept in the possession of, the producer or 1 or more resellers for the producer; and the petroleum is not supply gas.
(sec.6-ssec.2) In this section— use , petroleum, does not include convert the petroleum into LNG.
(a) the petroleum is gas; and
(b) during the royalty return period, the petroleum is— (i) sold or otherwise transferred, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person who is not an LNG project buyer; or (ii) flared, used or vented; or (iii) if the producer is not a member of an LNG project—stored by, or kept in the possession of, the producer or 1 or more resellers for the producer; and
(i) sold or otherwise transferred, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person who is not an LNG project buyer; or
(ii) flared, used or vented; or
(iii) if the producer is not a member of an LNG project—stored by, or kept in the possession of, the producer or 1 or more resellers for the producer; and
(c) the petroleum is not supply gas.
(i) sold or otherwise transferred, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person who is not an LNG project buyer; or
(ii) flared, used or vented; or
(iii) if the producer is not a member of an LNG project—stored by, or kept in the possession of, the producer or 1 or more resellers for the producer; and
sec.7
What is supply gas
sec.7 What is supply gas
Petroleum produced by a petroleum producer in a royalty return period is supply gas if—
the petroleum is gas; and
the petroleum is not produced by the producer as a member of an LNG project; and
during the royalty return period, the petroleum is sold or otherwise transferred, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person who is an LNG project buyer.
(a) the petroleum is gas; and
(b) the petroleum is not produced by the producer as a member of an LNG project; and
(c) during the royalty return period, the petroleum is sold or otherwise transferred, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person who is an LNG project buyer.
sec.8
What is project gas
sec.8 What is project gas
Petroleum produced by a petroleum producer in a royalty return period is project gas if—
the petroleum is gas; and
the petroleum is produced by the petroleum producer as a member of an LNG project; and
the petroleum is not domestic gas.
(a) the petroleum is gas; and
(b) the petroleum is produced by the petroleum producer as a member of an LNG project; and
(c) the petroleum is not domestic gas.
sec.9
What is liquid petroleum
sec.9 What is liquid petroleum
Petroleum produced by a petroleum producer in a royalty return period is liquid petroleum if the petroleum is oil.
pt.2-div.2
LNG projects
LNG projects
sec.10
Revenue commissioner may make determination that petroleum venture is LNG project
sec.10 Revenue commissioner may make determination that petroleum venture is LNG project
This section applies if the revenue commissioner believes a petroleum venture exists between—
1 or more petroleum producers; and
1 or more other persons each of whom is a relevant entity for a petroleum producer mentioned in paragraph (a) .
The revenue commissioner may make a determination that the petroleum venture is an LNG project.
If the revenue commissioner makes a determination under subsection (2) , the revenue commissioner must also make a determination of who are the members of the LNG project.
The revenue commissioner must give each person who is a member of the LNG project notice of the determinations under subsections (2) and (3) .
The notice must include the following information—
a description of the petroleum venture that constitutes the LNG project;
the names of the members of the LNG project;
the names of the petroleum producers who are members of the LNG project;
the petroleum tenures under which petroleum is produced for the LNG project.
A determination under subsection (2) or (3) takes effect on the day stated in the notice.
The revenue commissioner may amend or revoke a determination made under subsection (2) or (3) by notice given to each person who is, or was before the amendment or revocation, a member of the LNG project.
An amendment or revocation under subsection (7) takes effect on the day stated in the notice.
For subsections (6) and (8) , the day stated in the notice may be a day before the day on which the revenue commissioner makes, amends or revokes the determination.
In this section—
petroleum venture means a joint venture or other arrangement involving—
the production of gas for the purpose of converting the gas into LNG; and
the processing, transportation, storage, conversion, sale or purchase of the gas or LNG mentioned in paragraph (a) .
(sec.10-ssec.1) This section applies if the revenue commissioner believes a petroleum venture exists between— 1 or more petroleum producers; and 1 or more other persons each of whom is a relevant entity for a petroleum producer mentioned in paragraph (a) .
(sec.10-ssec.2) The revenue commissioner may make a determination that the petroleum venture is an LNG project.
(sec.10-ssec.3) If the revenue commissioner makes a determination under subsection (2) , the revenue commissioner must also make a determination of who are the members of the LNG project.
(sec.10-ssec.4) The revenue commissioner must give each person who is a member of the LNG project notice of the determinations under subsections (2) and (3) .
(sec.10-ssec.5) The notice must include the following information— a description of the petroleum venture that constitutes the LNG project; the names of the members of the LNG project; the names of the petroleum producers who are members of the LNG project; the petroleum tenures under which petroleum is produced for the LNG project.
(sec.10-ssec.6) A determination under subsection (2) or (3) takes effect on the day stated in the notice.
(sec.10-ssec.7) The revenue commissioner may amend or revoke a determination made under subsection (2) or (3) by notice given to each person who is, or was before the amendment or revocation, a member of the LNG project.
(sec.10-ssec.8) An amendment or revocation under subsection (7) takes effect on the day stated in the notice.
(sec.10-ssec.9) For subsections (6) and (8) , the day stated in the notice may be a day before the day on which the revenue commissioner makes, amends or revokes the determination.
(sec.10-ssec.10) In this section— petroleum venture means a joint venture or other arrangement involving— the production of gas for the purpose of converting the gas into LNG; and the processing, transportation, storage, conversion, sale or purchase of the gas or LNG mentioned in paragraph (a) .
(a) 1 or more petroleum producers; and
(b) 1 or more other persons each of whom is a relevant entity for a petroleum producer mentioned in paragraph (a) .
(a) a description of the petroleum venture that constitutes the LNG project;
(b) the names of the members of the LNG project;
(c) the names of the petroleum producers who are members of the LNG project;
(d) the petroleum tenures under which petroleum is produced for the LNG project.
(a) the production of gas for the purpose of converting the gas into LNG; and
(b) the processing, transportation, storage, conversion, sale or purchase of the gas or LNG mentioned in paragraph (a) .
sec.11
Revenue commissioner must reassess amount of royalty payable if particular determinations made
sec.11 Revenue commissioner must reassess amount of royalty payable if particular determinations made
This section applies if the revenue commissioner—
has made, amended or revoked a determination under section 10 (each a new decision ); and
has made an assessment under the Taxation Administration Act 2001 of the amount of petroleum royalty payable by a petroleum producer for a royalty return period without having regard to the new decision.
The revenue commissioner must reassess, under the Taxation Administration Act 2001 , the amount of petroleum royalty payable by the petroleum producer for the royalty return period having regard to the new decision.
See the Taxation Administration Act 2001 , part 4 for the revenue commissioner’s obligation to refund any excess amount on the making of the reassessment.
Subsection (4) applies if, on the reassessment, the petroleum producer is liable for penalty tax, unpaid tax interest or a civil penalty (each a relevant liability ).
The revenue commissioner must remit the relevant liability to the extent it is payable only because of the operation of subsection (2) .
(sec.11-ssec.1) This section applies if the revenue commissioner— has made, amended or revoked a determination under section 10 (each a new decision ); and has made an assessment under the Taxation Administration Act 2001 of the amount of petroleum royalty payable by a petroleum producer for a royalty return period without having regard to the new decision.
(sec.11-ssec.2) The revenue commissioner must reassess, under the Taxation Administration Act 2001 , the amount of petroleum royalty payable by the petroleum producer for the royalty return period having regard to the new decision. See the Taxation Administration Act 2001 , part 4 for the revenue commissioner’s obligation to refund any excess amount on the making of the reassessment.
(sec.11-ssec.3) Subsection (4) applies if, on the reassessment, the petroleum producer is liable for penalty tax, unpaid tax interest or a civil penalty (each a relevant liability ).
(sec.11-ssec.4) The revenue commissioner must remit the relevant liability to the extent it is payable only because of the operation of subsection (2) .
(a) has made, amended or revoked a determination under section 10 (each a new decision ); and
(b) has made an assessment under the Taxation Administration Act 2001 of the amount of petroleum royalty payable by a petroleum producer for a royalty return period without having regard to the new decision.
sec.12
Notification of status when petroleum producer, or reseller for producer, sells to member of LNG project
sec.12 Notification of status when petroleum producer, or reseller for producer, sells to member of LNG project
This section applies if a person—
is a member of an LNG project; and
purchases gas from a petroleum producer, or a reseller for the producer, who is not a member of the LNG project mentioned in paragraph (a) .
The person must, as soon as reasonably practicable after the purchase, give the petroleum producer, or the reseller for the producer, a notice stating that the person is a member of the LNG project.
Maximum penalty—100 penalty units.
However, subsection (2) does not apply if the person has already given the petroleum producer, or the reseller for the producer, a notice stating that the person is a member of the LNG project.
The revenue commissioner may tell the petroleum producer, or the reseller for the producer, that the person is a member of the LNG project.
(sec.12-ssec.1) This section applies if a person— is a member of an LNG project; and purchases gas from a petroleum producer, or a reseller for the producer, who is not a member of the LNG project mentioned in paragraph (a) .
(sec.12-ssec.2) The person must, as soon as reasonably practicable after the purchase, give the petroleum producer, or the reseller for the producer, a notice stating that the person is a member of the LNG project. Maximum penalty—100 penalty units.
(sec.12-ssec.3) However, subsection (2) does not apply if the person has already given the petroleum producer, or the reseller for the producer, a notice stating that the person is a member of the LNG project.
(sec.12-ssec.4) The revenue commissioner may tell the petroleum producer, or the reseller for the producer, that the person is a member of the LNG project.
(a) is a member of an LNG project; and
(b) purchases gas from a petroleum producer, or a reseller for the producer, who is not a member of the LNG project mentioned in paragraph (a) .
sec.13
Notification of revenue commissioner when persons involved in petroleum venture change
sec.13 Notification of revenue commissioner when persons involved in petroleum venture change
Subsection (2) applies if a person who is a member of an LNG project (the departing member ) stops being involved in the petroleum venture that constitutes the LNG project.
Each petroleum producer who continues to be involved in the petroleum venture must, within 30 days after the departing member stops being involved in the venture, give the revenue commissioner a notice stating that the departing member has stopped being involved in the venture.
Maximum penalty—100 penalty units.
Subsection (4) applies if a person (the new participant ) starts being involved in a petroleum venture that constitutes an LNG project.
Each petroleum producer, including the new participant if the new participant is a petroleum producer, who is involved in the petroleum venture must, within 30 days after the new participant starts being involved in the venture, give the revenue commissioner a notice stating that the new participant has started being involved in the venture.
Maximum penalty—100 penalty units.
A petroleum producer may give a notice under subsection (2) or (4) jointly with another petroleum producer.
The revenue commissioner must, after receiving a notice under subsection (2) or (4) , make a decision about whether to amend or revoke—
the determination of the LNG project; or
the determination of the members of the LNG project.
(sec.13-ssec.1) Subsection (2) applies if a person who is a member of an LNG project (the departing member ) stops being involved in the petroleum venture that constitutes the LNG project.
(sec.13-ssec.2) Each petroleum producer who continues to be involved in the petroleum venture must, within 30 days after the departing member stops being involved in the venture, give the revenue commissioner a notice stating that the departing member has stopped being involved in the venture. Maximum penalty—100 penalty units.
(sec.13-ssec.3) Subsection (4) applies if a person (the new participant ) starts being involved in a petroleum venture that constitutes an LNG project.
(sec.13-ssec.4) Each petroleum producer, including the new participant if the new participant is a petroleum producer, who is involved in the petroleum venture must, within 30 days after the new participant starts being involved in the venture, give the revenue commissioner a notice stating that the new participant has started being involved in the venture. Maximum penalty—100 penalty units.
(sec.13-ssec.5) A petroleum producer may give a notice under subsection (2) or (4) jointly with another petroleum producer.
(sec.13-ssec.6) The revenue commissioner must, after receiving a notice under subsection (2) or (4) , make a decision about whether to amend or revoke— the determination of the LNG project; or the determination of the members of the LNG project.
(a) the determination of the LNG project; or
(b) the determination of the members of the LNG project.
pt.2-div.3
Royalty rates
Royalty rates
sec.14
Definitions for division
sec.14 Definitions for division
In this division—
relevant period , for a royalty return period, means—
if the royalty return period is a calendar quarter—the 3-month period starting on the day that is 4 months immediately before the start of the royalty return period; or
if the royalty return period is a financial year—the 12-month period starting on the day that is 4 months immediately before the start of the royalty return period.
volume , of petroleum, means—
for domestic gas, supply gas, project gas, gas or LNG—the volume converted to gigajoules; or
for liquid petroleum or oil—the volume measured in barrels.
(a) if the royalty return period is a calendar quarter—the 3-month period starting on the day that is 4 months immediately before the start of the royalty return period; or
(b) if the royalty return period is a financial year—the 12-month period starting on the day that is 4 months immediately before the start of the royalty return period.
(a) for domestic gas, supply gas, project gas, gas or LNG—the volume converted to gigajoules; or
(b) for liquid petroleum or oil—the volume measured in barrels.
sec.15
Definitions for subdivision
sec.15 Definitions for subdivision
In this subdivision—
average sales price , for domestic gas for a petroleum producer for a royalty return period, see sections 17 and 18 .
benchmark price , for domestic gas for a royalty return period, means the firm End of Day Wallumbilla Benchmark Price averaged over the period.
sec.16
Petroleum royalty for domestic gas
sec.16 Petroleum royalty for domestic gas
If petroleum produced by a petroleum producer in a royalty return period is domestic gas, the producer must pay petroleum royalty for the period on the volume of domestic gas produced in the period at the following rate—
if the average sales price for domestic gas for the producer for the period is not more than $3 per gigajoule—0.02 cents per gigajoule for each 1 cent per gigajoule more than $0 per gigajoule;
if the average sales price for domestic gas for the producer for the period is more than $3, but not more than $8, per gigajoule—6 cents per gigajoule plus 0.08 cents per gigajoule for each 1 cent per gigajoule more than $3 per gigajoule;
if the average sales price for domestic gas for the producer for the period is more than $8 per gigajoule—46 cents per gigajoule plus 0.10 cents per gigajoule for each 1 cent per gigajoule more than $8 per gigajoule.
(a) if the average sales price for domestic gas for the producer for the period is not more than $3 per gigajoule—0.02 cents per gigajoule for each 1 cent per gigajoule more than $0 per gigajoule;
(b) if the average sales price for domestic gas for the producer for the period is more than $3, but not more than $8, per gigajoule—6 cents per gigajoule plus 0.08 cents per gigajoule for each 1 cent per gigajoule more than $3 per gigajoule;
(c) if the average sales price for domestic gas for the producer for the period is more than $8 per gigajoule—46 cents per gigajoule plus 0.10 cents per gigajoule for each 1 cent per gigajoule more than $8 per gigajoule.
sec.17
What is the average sales price for domestic gas
sec.17 What is the average sales price for domestic gas
The average sales price for domestic gas for a petroleum producer for a royalty return period is worked out using the following formula—
where—
ASP is the average sales price.
AR is the total revenue from all gas sold in the royalty return period, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person who—
is not an LNG project buyer; and
is an independent buyer.
AV is the total volume of all gas sold in the royalty return period, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person who—
is not an LNG project buyer; and
is an independent buyer.
DS is the deemed sales value of all gas sold in the royalty return period, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person who—
is not an LNG project buyer; and
is not an independent buyer.
DV is the total volume of all gas sold in the royalty return period, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person who—
is not an LNG project buyer; and
is not an independent buyer.
For subsection (1) , the deemed sales value of all gas sold in the royalty return period, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person who is not an LNG project buyer and is not an independent buyer is worked out using the following formula—
where—
DS is the deemed sales value.
BP is the benchmark price for domestic gas for the royalty return period.
DV is the total volume of all gas sold in the royalty return period, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person who—
is not an LNG project buyer; and
is not an independent buyer.
(sec.17-ssec.1) The average sales price for domestic gas for a petroleum producer for a royalty return period is worked out using the following formula— where— ASP is the average sales price. AR is the total revenue from all gas sold in the royalty return period, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person who— is not an LNG project buyer; and is an independent buyer. AV is the total volume of all gas sold in the royalty return period, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person who— is not an LNG project buyer; and is an independent buyer. DS is the deemed sales value of all gas sold in the royalty return period, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person who— is not an LNG project buyer; and is not an independent buyer. DV is the total volume of all gas sold in the royalty return period, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person who— is not an LNG project buyer; and is not an independent buyer.
(sec.17-ssec.2) For subsection (1) , the deemed sales value of all gas sold in the royalty return period, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person who is not an LNG project buyer and is not an independent buyer is worked out using the following formula— where— DS is the deemed sales value. BP is the benchmark price for domestic gas for the royalty return period. DV is the total volume of all gas sold in the royalty return period, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person who— is not an LNG project buyer; and is not an independent buyer.
(a) is not an LNG project buyer; and
(b) is an independent buyer.
(a) is not an LNG project buyer; and
(b) is an independent buyer.
(a) is not an LNG project buyer; and
(b) is not an independent buyer.
(a) is not an LNG project buyer; and
(b) is not an independent buyer.
(a) is not an LNG project buyer; and
(b) is not an independent buyer.
sec.18
When average sales price is the benchmark price
sec.18 When average sales price is the benchmark price
This section applies in relation to domestic gas produced by a petroleum producer in a royalty return period if—
an election made by the producer under subsection (3) is in effect; or
the producer does not provide, for an assessment, the information required to work out, under section 17 , the average sales price for domestic gas for the producer for the period; or
no gas is sold in the period, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person who—
is not an LNG project buyer; and
is an independent buyer; or
the revenue commissioner decides it is appropriate for the protection of the public revenue for subsection (2) to apply.
Despite section 17 , the average sales price for domestic gas for the petroleum producer for the royalty return period is the benchmark price for domestic gas for the period.
A petroleum producer may make an election in a royalty return lodged by the producer for subsection (2) to apply.
An election made by a petroleum producer under subsection (3) —
starts on the first day of the royalty return period for the royalty return in which the election is made; and
continues in effect for each royalty return period after the royalty return period mentioned in paragraph (a) unless the revenue commissioner ends the election under subsection (6) .
A petroleum producer may apply to the revenue commissioner in the approved form to end an election made under subsection (3) .
The revenue commissioner may decide to end the election only if the revenue commissioner considers ending the election is appropriate having regard to all of the circumstances, including, for example, the protection of the public revenue.
The revenue commissioner must give the petroleum producer notice of a decision under subsection (6) .
The election ends on the day stated in the notice.
For subsection (8) , the day stated in the notice may be a day before the day on which the petroleum producer made the application under subsection (5) to end the election.
In making a decision under subsection (1) (d) , the revenue commissioner may have regard to any of the following matters—
any arrangements existing between the petroleum producer, or 1 or more resellers for the producer, and a person who purchases domestic gas from the producer or reseller;
the number of sales in the royalty return period of domestic gas produced by the petroleum producer;
the volume of domestic gas produced by the petroleum producer in the royalty return period that is sold to an independent buyer;
the volume of domestic gas produced by the petroleum producer in the royalty return period that is sold to a person other than an independent buyer;
any other matter the revenue commissioner considers relevant.
The revenue commissioner must give a petroleum producer notice of a decision under subsection (1) (d) .
The decision takes effect on the day stated in the notice.
For subsection (12) , the day stated in the notice may be a day before the day on which the revenue commissioner makes the decision.
(sec.18-ssec.1) This section applies in relation to domestic gas produced by a petroleum producer in a royalty return period if— an election made by the producer under subsection (3) is in effect; or the producer does not provide, for an assessment, the information required to work out, under section 17 , the average sales price for domestic gas for the producer for the period; or no gas is sold in the period, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person who— is not an LNG project buyer; and is an independent buyer; or the revenue commissioner decides it is appropriate for the protection of the public revenue for subsection (2) to apply.
(sec.18-ssec.2) Despite section 17 , the average sales price for domestic gas for the petroleum producer for the royalty return period is the benchmark price for domestic gas for the period.
(sec.18-ssec.3) A petroleum producer may make an election in a royalty return lodged by the producer for subsection (2) to apply.
(sec.18-ssec.4) An election made by a petroleum producer under subsection (3) — starts on the first day of the royalty return period for the royalty return in which the election is made; and continues in effect for each royalty return period after the royalty return period mentioned in paragraph (a) unless the revenue commissioner ends the election under subsection (6) .
(sec.18-ssec.5) A petroleum producer may apply to the revenue commissioner in the approved form to end an election made under subsection (3) .
(sec.18-ssec.6) The revenue commissioner may decide to end the election only if the revenue commissioner considers ending the election is appropriate having regard to all of the circumstances, including, for example, the protection of the public revenue.
(sec.18-ssec.7) The revenue commissioner must give the petroleum producer notice of a decision under subsection (6) .
(sec.18-ssec.8) The election ends on the day stated in the notice.
(sec.18-ssec.9) For subsection (8) , the day stated in the notice may be a day before the day on which the petroleum producer made the application under subsection (5) to end the election.
(sec.18-ssec.10) In making a decision under subsection (1) (d) , the revenue commissioner may have regard to any of the following matters— any arrangements existing between the petroleum producer, or 1 or more resellers for the producer, and a person who purchases domestic gas from the producer or reseller; the number of sales in the royalty return period of domestic gas produced by the petroleum producer; the volume of domestic gas produced by the petroleum producer in the royalty return period that is sold to an independent buyer; the volume of domestic gas produced by the petroleum producer in the royalty return period that is sold to a person other than an independent buyer; any other matter the revenue commissioner considers relevant.
(sec.18-ssec.11) The revenue commissioner must give a petroleum producer notice of a decision under subsection (1) (d) .
(sec.18-ssec.12) The decision takes effect on the day stated in the notice.
(sec.18-ssec.13) For subsection (12) , the day stated in the notice may be a day before the day on which the revenue commissioner makes the decision.
(a) an election made by the producer under subsection (3) is in effect; or
(b) the producer does not provide, for an assessment, the information required to work out, under section 17 , the average sales price for domestic gas for the producer for the period; or
(c) no gas is sold in the period, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person who— (i) is not an LNG project buyer; and (ii) is an independent buyer; or
(i) is not an LNG project buyer; and
(ii) is an independent buyer; or
(d) the revenue commissioner decides it is appropriate for the protection of the public revenue for subsection (2) to apply.
(i) is not an LNG project buyer; and
(ii) is an independent buyer; or
(a) starts on the first day of the royalty return period for the royalty return in which the election is made; and
(b) continues in effect for each royalty return period after the royalty return period mentioned in paragraph (a) unless the revenue commissioner ends the election under subsection (6) .
(a) any arrangements existing between the petroleum producer, or 1 or more resellers for the producer, and a person who purchases domestic gas from the producer or reseller;
(b) the number of sales in the royalty return period of domestic gas produced by the petroleum producer;
(c) the volume of domestic gas produced by the petroleum producer in the royalty return period that is sold to an independent buyer;
(d) the volume of domestic gas produced by the petroleum producer in the royalty return period that is sold to a person other than an independent buyer;
(e) any other matter the revenue commissioner considers relevant.
sec.19
Definitions for subdivision
sec.19 Definitions for subdivision
In this subdivision—
average sales price , for supply gas for a petroleum producer for a royalty return period, see sections 21 and 23 .
benchmark price , for supply gas for a royalty return period, see section 22 .
sec.20
Petroleum royalty for supply gas
sec.20 Petroleum royalty for supply gas
If petroleum produced by a petroleum producer in a royalty return period is supply gas, the producer must pay petroleum royalty for the period on the volume of supply gas produced in the period at the following rate—
if the average sales price for supply gas for the producer for the period is not more than $3 per gigajoule—0.05 cents per gigajoule for each 1 cent per gigajoule more than $0 per gigajoule;
if the average sales price for supply gas for the producer for the period is more than $3, but not more than $8, per gigajoule—15 cents per gigajoule plus 0.10 cents per gigajoule for each 1 cent per gigajoule more than $3 per gigajoule;
if the average sales price for supply gas for the producer for the period is more than $8 per gigajoule—65 cents per gigajoule plus 0.125 cents per gigajoule for each 1 cent per gigajoule more than $8 per gigajoule.
(a) if the average sales price for supply gas for the producer for the period is not more than $3 per gigajoule—0.05 cents per gigajoule for each 1 cent per gigajoule more than $0 per gigajoule;
(b) if the average sales price for supply gas for the producer for the period is more than $3, but not more than $8, per gigajoule—15 cents per gigajoule plus 0.10 cents per gigajoule for each 1 cent per gigajoule more than $3 per gigajoule;
(c) if the average sales price for supply gas for the producer for the period is more than $8 per gigajoule—65 cents per gigajoule plus 0.125 cents per gigajoule for each 1 cent per gigajoule more than $8 per gigajoule.
sec.21
What is the average sales price for supply gas
sec.21 What is the average sales price for supply gas
The average sales price for supply gas for a petroleum producer for a royalty return period is worked out using the following formula—
where—
ASP is the average sales price.
AR is the total revenue from all gas sold in the royalty return period, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person who—
is an LNG project buyer; and
is an independent buyer.
AV is the total volume of all gas sold in the royalty return period, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person who—
is an LNG project buyer; and
is an independent buyer.
DS is the deemed sales value of all gas sold in the royalty return period, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person who—
is an LNG project buyer; and
is not an independent buyer.
DV is the total volume of all gas sold in the royalty return period, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person who—
is an LNG project buyer; and
is not an independent buyer.
For subsection (1) , the deemed sales value of all gas sold in the royalty return period, either directly by the petroleum producer or indirectly by the producer through 1 or more resellers for the producer, to a person who is an LNG project buyer and is not an independent buyer is worked out using the following formula—
where—
DS is the deemed sales value.
BP is the benchmark price for supply gas for the royalty return period.
DV is the total volume of all gas sold in the royalty return period, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person who—
is an LNG project buyer; and
is not an independent buyer.
(sec.21-ssec.1) The average sales price for supply gas for a petroleum producer for a royalty return period is worked out using the following formula— where— ASP is the average sales price. AR is the total revenue from all gas sold in the royalty return period, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person who— is an LNG project buyer; and is an independent buyer. AV is the total volume of all gas sold in the royalty return period, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person who— is an LNG project buyer; and is an independent buyer. DS is the deemed sales value of all gas sold in the royalty return period, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person who— is an LNG project buyer; and is not an independent buyer. DV is the total volume of all gas sold in the royalty return period, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person who— is an LNG project buyer; and is not an independent buyer.
(sec.21-ssec.2) For subsection (1) , the deemed sales value of all gas sold in the royalty return period, either directly by the petroleum producer or indirectly by the producer through 1 or more resellers for the producer, to a person who is an LNG project buyer and is not an independent buyer is worked out using the following formula— where— DS is the deemed sales value. BP is the benchmark price for supply gas for the royalty return period. DV is the total volume of all gas sold in the royalty return period, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person who— is an LNG project buyer; and is not an independent buyer.
(a) is an LNG project buyer; and
(b) is an independent buyer.
(a) is an LNG project buyer; and
(b) is an independent buyer.
(a) is an LNG project buyer; and
(b) is not an independent buyer.
(a) is an LNG project buyer; and
(b) is not an independent buyer.
(a) is an LNG project buyer; and
(b) is not an independent buyer.
sec.22
What is the benchmark price for supply gas
sec.22 What is the benchmark price for supply gas
The benchmark price for supply gas for a royalty return period is the price worked out using the following formula—
where—
BP is the benchmark price for supply gas.
SP is the average, for the relevant period for the royalty return period, of the daily Europe Brent Spot Price FOB (Dollars per Barrel) converted into Australian dollars at the average hedge settlement rate for the royalty return period.
sec.23
When average sales price is the benchmark price
sec.23 When average sales price is the benchmark price
This section applies in relation to supply gas produced by a petroleum producer in a royalty return period if—
an election made by the producer under subsection (3) is in effect; or
the producer does not provide, for an assessment, the information required to work out, under section 21 , the average sales price for supply gas for the producer for the period; or
no gas is sold in the period, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person who—
is an LNG project buyer; and
is an independent buyer; or
the revenue commissioner decides it is appropriate for the protection of the public revenue for subsection (2) to apply.
Despite section 21 , the average sales price for supply gas for the petroleum producer for the royalty return period is the benchmark price for supply gas for the period.
A petroleum producer may make an election in a royalty return lodged by the producer for subsection (2) to apply.
An election made by a petroleum producer under subsection (3) —
starts on the first day of the royalty return period for the royalty return in which the election is made; and
continues in effect for each royalty return period after the royalty return period mentioned in paragraph (a) unless the revenue commissioner ends the election under subsection (6) .
A petroleum producer may apply to the revenue commissioner in the approved form to end an election made under subsection (3) .
The revenue commissioner may decide to end the election only if the revenue commissioner considers ending the election is appropriate having regard to all of the circumstances, including, for example, the protection of the public revenue.
The revenue commissioner must give the petroleum producer notice of a decision under subsection (6) .
The election ends on the day stated in the notice.
For subsection (8) , the day stated in the notice may be a day before the day on which the petroleum producer made the application under subsection (5) to end the election.
In making a decision under subsection (1) (d) , the revenue commissioner may have regard to any of the following matters—
any arrangements existing between the petroleum producer, or 1 or more resellers for the producer, and a person who purchases supply gas from the producer or reseller;
the number of sales in the royalty return period of supply gas produced by the petroleum producer;
the volume of supply gas produced by the petroleum producer in the royalty return period that is sold to an independent buyer;
the volume of supply gas produced by the petroleum producer in the royalty return period that is sold to a person other than an independent buyer;
any other matter the revenue commissioner considers relevant.
The revenue commissioner must give a petroleum producer notice of a decision under subsection (1) (d) .
The decision takes effect on the day stated in the notice.
For subsection (12) , the day stated in the notice may be a day before the day on which the revenue commissioner makes the decision.
(sec.23-ssec.1) This section applies in relation to supply gas produced by a petroleum producer in a royalty return period if— an election made by the producer under subsection (3) is in effect; or the producer does not provide, for an assessment, the information required to work out, under section 21 , the average sales price for supply gas for the producer for the period; or no gas is sold in the period, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person who— is an LNG project buyer; and is an independent buyer; or the revenue commissioner decides it is appropriate for the protection of the public revenue for subsection (2) to apply.
(sec.23-ssec.2) Despite section 21 , the average sales price for supply gas for the petroleum producer for the royalty return period is the benchmark price for supply gas for the period.
(sec.23-ssec.3) A petroleum producer may make an election in a royalty return lodged by the producer for subsection (2) to apply.
(sec.23-ssec.4) An election made by a petroleum producer under subsection (3) — starts on the first day of the royalty return period for the royalty return in which the election is made; and continues in effect for each royalty return period after the royalty return period mentioned in paragraph (a) unless the revenue commissioner ends the election under subsection (6) .
(sec.23-ssec.5) A petroleum producer may apply to the revenue commissioner in the approved form to end an election made under subsection (3) .
(sec.23-ssec.6) The revenue commissioner may decide to end the election only if the revenue commissioner considers ending the election is appropriate having regard to all of the circumstances, including, for example, the protection of the public revenue.
(sec.23-ssec.7) The revenue commissioner must give the petroleum producer notice of a decision under subsection (6) .
(sec.23-ssec.8) The election ends on the day stated in the notice.
(sec.23-ssec.9) For subsection (8) , the day stated in the notice may be a day before the day on which the petroleum producer made the application under subsection (5) to end the election.
(sec.23-ssec.10) In making a decision under subsection (1) (d) , the revenue commissioner may have regard to any of the following matters— any arrangements existing between the petroleum producer, or 1 or more resellers for the producer, and a person who purchases supply gas from the producer or reseller; the number of sales in the royalty return period of supply gas produced by the petroleum producer; the volume of supply gas produced by the petroleum producer in the royalty return period that is sold to an independent buyer; the volume of supply gas produced by the petroleum producer in the royalty return period that is sold to a person other than an independent buyer; any other matter the revenue commissioner considers relevant.
(sec.23-ssec.11) The revenue commissioner must give a petroleum producer notice of a decision under subsection (1) (d) .
(sec.23-ssec.12) The decision takes effect on the day stated in the notice.
(sec.23-ssec.13) For subsection (12) , the day stated in the notice may be a day before the day on which the revenue commissioner makes the decision.
(a) an election made by the producer under subsection (3) is in effect; or
(b) the producer does not provide, for an assessment, the information required to work out, under section 21 , the average sales price for supply gas for the producer for the period; or
(c) no gas is sold in the period, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person who— (i) is an LNG project buyer; and (ii) is an independent buyer; or
(i) is an LNG project buyer; and
(ii) is an independent buyer; or
(d) the revenue commissioner decides it is appropriate for the protection of the public revenue for subsection (2) to apply.
(i) is an LNG project buyer; and
(ii) is an independent buyer; or
(a) starts on the first day of the royalty return period for the royalty return in which the election is made; and
(b) continues in effect for each royalty return period after the royalty return period mentioned in paragraph (a) unless the revenue commissioner ends the election under subsection (6) .
(a) any arrangements existing between the petroleum producer, or 1 or more resellers for the producer, and a person who purchases supply gas from the producer or reseller;
(b) the number of sales in the royalty return period of supply gas produced by the petroleum producer;
(c) the volume of supply gas produced by the petroleum producer in the royalty return period that is sold to an independent buyer;
(d) the volume of supply gas produced by the petroleum producer in the royalty return period that is sold to a person other than an independent buyer;
(e) any other matter the revenue commissioner considers relevant.
sec.24
Definitions for subdivision
sec.24 Definitions for subdivision
In this subdivision—
average sales price , for project gas for a petroleum producer for a royalty return period, see sections 26 and 28 .
benchmark price , for project gas for a royalty return period, see section 27 .
sec.25
Petroleum royalty for project gas
sec.25 Petroleum royalty for project gas
If petroleum produced by a petroleum producer in a royalty return period is project gas, the producer must pay petroleum royalty for the period on the volume of project gas produced in the period at the following rate—
if the average sales price for project gas for the producer for the period is not more than $9 per gigajoule—0.03 cents per gigajoule for each 1 cent per gigajoule more than $0 per gigajoule;
if the average sales price for project gas for the producer for the period is more than $9, but not more than $14, per gigajoule—27 cents per gigajoule plus 0.09 cents per gigajoule for each 1 cent per gigajoule more than $9 per gigajoule;
if the average sales price for project gas for the producer for the period is more than $14 per gigajoule—72 cents per gigajoule plus 0.125 cents per gigajoule for each 1 cent per gigajoule more than $14 per gigajoule.
(a) if the average sales price for project gas for the producer for the period is not more than $9 per gigajoule—0.03 cents per gigajoule for each 1 cent per gigajoule more than $0 per gigajoule;
(b) if the average sales price for project gas for the producer for the period is more than $9, but not more than $14, per gigajoule—27 cents per gigajoule plus 0.09 cents per gigajoule for each 1 cent per gigajoule more than $9 per gigajoule;
(c) if the average sales price for project gas for the producer for the period is more than $14 per gigajoule—72 cents per gigajoule plus 0.125 cents per gigajoule for each 1 cent per gigajoule more than $14 per gigajoule.
sec.26
What is the average sales price for project gas
sec.26 What is the average sales price for project gas
The average sales price for project gas for a petroleum producer for a royalty return period is worked out using the following formula—
where—
ASP is the average sales price.
AR is the total revenue from all LNG sold in the royalty return period, by each member of the LNG project of which the producer is a member, to a person who is neither a member of the LNG project nor a relevant entity for a member of the LNG project.
AV is the total volume of all LNG sold in the royalty return period, by each member of the LNG project of which the producer is a member, to a person who is neither a member of the LNG project nor a relevant entity for a member of the LNG project.
DS is the deemed sales value of all LNG sold in the royalty return period, by each member of the LNG project of which the producer is a member, to a person who is either a member of the LNG project or a relevant entity for a member of the LNG project.
DV is the total volume of all LNG sold in the royalty return period, by each member of the LNG project of which the producer is a member, to a person who is either a member of the LNG project or a relevant entity for a member of the LNG project.
For subsection (1) , the deemed sales value of all LNG sold in the royalty return period, by each member of the LNG project of which the petroleum producer is a member, to a person who is either a member of the LNG project or a relevant entity for a member of the LNG project is worked out using the following formula—
where—
DS is the deemed sales value.
BP is the benchmark price for project gas for the royalty return period.
DV is the total volume of all LNG sold in the royalty return period, by each member of the LNG project of which the producer is a member, to a person who is either a member of the LNG project or a relevant entity for a member of the LNG project.
(sec.26-ssec.1) The average sales price for project gas for a petroleum producer for a royalty return period is worked out using the following formula— where— ASP is the average sales price. AR is the total revenue from all LNG sold in the royalty return period, by each member of the LNG project of which the producer is a member, to a person who is neither a member of the LNG project nor a relevant entity for a member of the LNG project. AV is the total volume of all LNG sold in the royalty return period, by each member of the LNG project of which the producer is a member, to a person who is neither a member of the LNG project nor a relevant entity for a member of the LNG project. DS is the deemed sales value of all LNG sold in the royalty return period, by each member of the LNG project of which the producer is a member, to a person who is either a member of the LNG project or a relevant entity for a member of the LNG project. DV is the total volume of all LNG sold in the royalty return period, by each member of the LNG project of which the producer is a member, to a person who is either a member of the LNG project or a relevant entity for a member of the LNG project.
(sec.26-ssec.2) For subsection (1) , the deemed sales value of all LNG sold in the royalty return period, by each member of the LNG project of which the petroleum producer is a member, to a person who is either a member of the LNG project or a relevant entity for a member of the LNG project is worked out using the following formula— where— DS is the deemed sales value. BP is the benchmark price for project gas for the royalty return period. DV is the total volume of all LNG sold in the royalty return period, by each member of the LNG project of which the producer is a member, to a person who is either a member of the LNG project or a relevant entity for a member of the LNG project.
sec.27
What is the benchmark price for project gas
sec.27 What is the benchmark price for project gas
The benchmark price for project gas for a royalty return period is the price worked out using the following formula—
where—
BP is the benchmark price for project gas.
SP is the average, for the relevant period for the royalty return period, of the daily Europe Brent Spot Price FOB (Dollars per Barrel) converted into Australian dollars at the average hedge settlement rate for the royalty return period.
sec.28
When average sales price is the benchmark price
sec.28 When average sales price is the benchmark price
This section applies in relation to project gas produced by a petroleum producer in a royalty return period if—
an election made by the producer under subsection (3) is in effect; or
the producer does not provide, for an assessment, the information required to work out, under section 26 , the average sales price for project gas for the producer for the period; or
no LNG is sold in the period, by a member of the LNG project of which the producer is a member, to a person who is neither a member of the LNG project nor a relevant entity for a member of the LNG project; or
the revenue commissioner decides it is appropriate for the protection of the public revenue for subsection (2) to apply.
Despite section 26 , the average sales price for project gas for the petroleum producer for the royalty return period is the benchmark price for project gas for the period.
A petroleum producer may make an election in a royalty return lodged by the producer for subsection (2) to apply.
An election made by a petroleum producer under subsection (3) —
starts on the first day of the royalty return period for the royalty return in which the election is made; and
continues in effect for each royalty return period after the royalty return period mentioned in paragraph (a) unless the revenue commissioner ends the election under subsection (6) .
A petroleum producer may apply to the revenue commissioner in the approved form to end an election made under subsection (3) .
The revenue commissioner may decide to end the election only if the revenue commissioner considers ending the election is appropriate having regard to all of the circumstances, including, for example, the protection of the public revenue.
The revenue commissioner must give the petroleum producer notice of a decision under subsection (6) .
The election ends on the day stated in the notice.
For subsection (8) , the day stated in the notice may be a day before the day on which the petroleum producer made the application under subsection (5) to end the election.
In making a decision under subsection (1) (d) , the revenue commissioner may have regard to any of the following matters—
any arrangements existing between a member of the LNG project of which the petroleum producer is a member and a person who purchases LNG from a member of the LNG project;
the number of sales of LNG in the royalty return period by all members of the LNG project of which the petroleum producer is a member;
the volume of LNG sold in the royalty return period by all members of the LNG project of which the petroleum producer is a member to a person who is neither a member of the LNG project nor a relevant entity for a member of the LNG project;
the volume of LNG sold in the royalty return period by all members of the LNG project of which the petroleum producer is a member to a person who is a member of the LNG project or a relevant entity for a member of the LNG project;
any other matter the revenue commissioner considers relevant.
The revenue commissioner must give a petroleum producer notice of a decision under subsection (1) (d) .
The decision takes effect on the day stated in the notice.
For subsection (12) , the day stated in the notice may be a day before the day on which the revenue commissioner makes the decision.
(sec.28-ssec.1) This section applies in relation to project gas produced by a petroleum producer in a royalty return period if— an election made by the producer under subsection (3) is in effect; or the producer does not provide, for an assessment, the information required to work out, under section 26 , the average sales price for project gas for the producer for the period; or no LNG is sold in the period, by a member of the LNG project of which the producer is a member, to a person who is neither a member of the LNG project nor a relevant entity for a member of the LNG project; or the revenue commissioner decides it is appropriate for the protection of the public revenue for subsection (2) to apply.
(sec.28-ssec.2) Despite section 26 , the average sales price for project gas for the petroleum producer for the royalty return period is the benchmark price for project gas for the period.
(sec.28-ssec.3) A petroleum producer may make an election in a royalty return lodged by the producer for subsection (2) to apply.
(sec.28-ssec.4) An election made by a petroleum producer under subsection (3) — starts on the first day of the royalty return period for the royalty return in which the election is made; and continues in effect for each royalty return period after the royalty return period mentioned in paragraph (a) unless the revenue commissioner ends the election under subsection (6) .
(sec.28-ssec.5) A petroleum producer may apply to the revenue commissioner in the approved form to end an election made under subsection (3) .
(sec.28-ssec.6) The revenue commissioner may decide to end the election only if the revenue commissioner considers ending the election is appropriate having regard to all of the circumstances, including, for example, the protection of the public revenue.
(sec.28-ssec.7) The revenue commissioner must give the petroleum producer notice of a decision under subsection (6) .
(sec.28-ssec.8) The election ends on the day stated in the notice.
(sec.28-ssec.9) For subsection (8) , the day stated in the notice may be a day before the day on which the petroleum producer made the application under subsection (5) to end the election.
(sec.28-ssec.10) In making a decision under subsection (1) (d) , the revenue commissioner may have regard to any of the following matters— any arrangements existing between a member of the LNG project of which the petroleum producer is a member and a person who purchases LNG from a member of the LNG project; the number of sales of LNG in the royalty return period by all members of the LNG project of which the petroleum producer is a member; the volume of LNG sold in the royalty return period by all members of the LNG project of which the petroleum producer is a member to a person who is neither a member of the LNG project nor a relevant entity for a member of the LNG project; the volume of LNG sold in the royalty return period by all members of the LNG project of which the petroleum producer is a member to a person who is a member of the LNG project or a relevant entity for a member of the LNG project; any other matter the revenue commissioner considers relevant.
(sec.28-ssec.11) The revenue commissioner must give a petroleum producer notice of a decision under subsection (1) (d) .
(sec.28-ssec.12) The decision takes effect on the day stated in the notice.
(sec.28-ssec.13) For subsection (12) , the day stated in the notice may be a day before the day on which the revenue commissioner makes the decision.
(a) an election made by the producer under subsection (3) is in effect; or
(b) the producer does not provide, for an assessment, the information required to work out, under section 26 , the average sales price for project gas for the producer for the period; or
(c) no LNG is sold in the period, by a member of the LNG project of which the producer is a member, to a person who is neither a member of the LNG project nor a relevant entity for a member of the LNG project; or
(d) the revenue commissioner decides it is appropriate for the protection of the public revenue for subsection (2) to apply.
(a) starts on the first day of the royalty return period for the royalty return in which the election is made; and
(b) continues in effect for each royalty return period after the royalty return period mentioned in paragraph (a) unless the revenue commissioner ends the election under subsection (6) .
(a) any arrangements existing between a member of the LNG project of which the petroleum producer is a member and a person who purchases LNG from a member of the LNG project;
(b) the number of sales of LNG in the royalty return period by all members of the LNG project of which the petroleum producer is a member;
(c) the volume of LNG sold in the royalty return period by all members of the LNG project of which the petroleum producer is a member to a person who is neither a member of the LNG project nor a relevant entity for a member of the LNG project;
(d) the volume of LNG sold in the royalty return period by all members of the LNG project of which the petroleum producer is a member to a person who is a member of the LNG project or a relevant entity for a member of the LNG project;
(e) any other matter the revenue commissioner considers relevant.
sec.29
Definitions for subdivision
sec.29 Definitions for subdivision
In this subdivision—
average sales price , for liquid petroleum for a petroleum producer for a royalty return period, see sections 31 and 32 .
benchmark price , for liquid petroleum for a royalty return period, is the average, for the royalty return period, of the daily Europe Brent Spot Price FOB (Dollars per Barrel) converted into Australian dollars at the average hedge settlement rate for the royalty return period.
sec.30
Petroleum royalty for liquid petroleum
sec.30 Petroleum royalty for liquid petroleum
If petroleum produced by a petroleum producer in a royalty return period is liquid petroleum, the producer must pay petroleum royalty for the period on the volume of liquid petroleum produced in the period at the following rate—
if the average sales price for liquid petroleum for the producer for the period is not more than $50 per barrel—0.03 cents per barrel for each 1 cent per barrel more than $0 per barrel;
if the average sales price for liquid petroleum for the producer for the period is more than $50, but not more than $100, per barrel—$1.50 per barrel plus 0.115 cents per barrel for each 1 cent per barrel more than $50 per barrel;
if the average sales price for liquid petroleum for the producer for the period is more than $100 per barrel—$7.25 per barrel plus 0.125 cents per barrel for each 1 cent per barrel more than $100 per barrel.
(a) if the average sales price for liquid petroleum for the producer for the period is not more than $50 per barrel—0.03 cents per barrel for each 1 cent per barrel more than $0 per barrel;
(b) if the average sales price for liquid petroleum for the producer for the period is more than $50, but not more than $100, per barrel—$1.50 per barrel plus 0.115 cents per barrel for each 1 cent per barrel more than $50 per barrel;
(c) if the average sales price for liquid petroleum for the producer for the period is more than $100 per barrel—$7.25 per barrel plus 0.125 cents per barrel for each 1 cent per barrel more than $100 per barrel.
sec.31
What is the average sales price for liquid petroleum
sec.31 What is the average sales price for liquid petroleum
The average sales price for liquid petroleum for a petroleum producer for a royalty return period is worked out using the following formula—
where—
ASP is the average sales price.
AR is the total revenue from all oil sold in the royalty return period, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to an independent buyer.
AV is the total volume of all oil sold in the royalty return period, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to an independent buyer.
DS is the deemed sales value of all oil sold in the royalty return period, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person other than an independent buyer.
DV is the total volume of all oil sold in the royalty return period, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person other than an independent buyer.
For subsection (1) , the deemed sales value of all oil sold in the royalty return period, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person other than an independent buyer is worked out using the following formula—
where—
DS is the deemed sales value.
BP is the benchmark price for liquid petroleum for the royalty return period.
DV is the total volume of all oil sold in the royalty return period, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person other than an independent buyer.
(sec.31-ssec.1) The average sales price for liquid petroleum for a petroleum producer for a royalty return period is worked out using the following formula— where— ASP is the average sales price. AR is the total revenue from all oil sold in the royalty return period, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to an independent buyer. AV is the total volume of all oil sold in the royalty return period, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to an independent buyer. DS is the deemed sales value of all oil sold in the royalty return period, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person other than an independent buyer. DV is the total volume of all oil sold in the royalty return period, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person other than an independent buyer.
(sec.31-ssec.2) For subsection (1) , the deemed sales value of all oil sold in the royalty return period, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person other than an independent buyer is worked out using the following formula— where— DS is the deemed sales value. BP is the benchmark price for liquid petroleum for the royalty return period. DV is the total volume of all oil sold in the royalty return period, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person other than an independent buyer.
sec.32
When average sales price is the benchmark price
sec.32 When average sales price is the benchmark price
This section applies in relation to liquid petroleum produced by a petroleum producer in a royalty return period if—
an election made by the producer under subsection (3) is in effect; or
the producer does not provide, for an assessment, the information required to work out, under section 31 , the average sales price for liquid petroleum for the producer for the period; or
no oil is sold in the period, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to an independent buyer; or
the revenue commissioner decides it is appropriate for the protection of the public revenue for subsection (2) to apply.
Despite section 31 , the average sales price for liquid petroleum for the petroleum producer for the royalty return period is the benchmark price for liquid petroleum for the period.
A petroleum producer may make an election in a royalty return lodged by the producer for subsection (2) to apply.
An election made by a petroleum producer under subsection (3) —
starts on the first day of the royalty return period for the royalty return in which the election is made; and
continues in effect for each royalty return period after the royalty return period mentioned in paragraph (a) unless the revenue commissioner ends the election under subsection (6) .
A petroleum producer may apply to the revenue commissioner in the approved form to end an election made under subsection (3) .
The revenue commissioner may decide to end the election only if the revenue commissioner considers ending the election is appropriate having regard to all of the circumstances, including, for example, the protection of the public revenue.
The revenue commissioner must give the petroleum producer notice of a decision under subsection (6) .
The election ends on the day stated in the notice.
For subsection (8) , the day stated in the notice may be a day before the day on which the petroleum producer made the application under subsection (5) to end the election.
In making a decision under subsection (1) (d) , the revenue commissioner may have regard to any of the following matters—
any arrangements existing between the petroleum producer, or 1 or more resellers for the producer, and a person who purchases liquid petroleum from the producer or reseller;
the number of sales in the royalty return period of liquid petroleum produced by the petroleum producer;
the volume of liquid petroleum produced by the petroleum producer in the royalty return period that is sold to an independent buyer;
the volume of liquid petroleum produced by the petroleum producer in the royalty return period that is sold to a person other than an independent buyer;
any other matter the revenue commissioner considers relevant.
The revenue commissioner must give a petroleum producer notice of a decision under subsection (1) (d) .
The decision takes effect on the day stated in the notice.
For subsection (12) , the day stated in the notice may be a day before the day on which the revenue commissioner makes the decision.
(sec.32-ssec.1) This section applies in relation to liquid petroleum produced by a petroleum producer in a royalty return period if— an election made by the producer under subsection (3) is in effect; or the producer does not provide, for an assessment, the information required to work out, under section 31 , the average sales price for liquid petroleum for the producer for the period; or no oil is sold in the period, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to an independent buyer; or the revenue commissioner decides it is appropriate for the protection of the public revenue for subsection (2) to apply.
(sec.32-ssec.2) Despite section 31 , the average sales price for liquid petroleum for the petroleum producer for the royalty return period is the benchmark price for liquid petroleum for the period.
(sec.32-ssec.3) A petroleum producer may make an election in a royalty return lodged by the producer for subsection (2) to apply.
(sec.32-ssec.4) An election made by a petroleum producer under subsection (3) — starts on the first day of the royalty return period for the royalty return in which the election is made; and continues in effect for each royalty return period after the royalty return period mentioned in paragraph (a) unless the revenue commissioner ends the election under subsection (6) .
(sec.32-ssec.5) A petroleum producer may apply to the revenue commissioner in the approved form to end an election made under subsection (3) .
(sec.32-ssec.6) The revenue commissioner may decide to end the election only if the revenue commissioner considers ending the election is appropriate having regard to all of the circumstances, including, for example, the protection of the public revenue.
(sec.32-ssec.7) The revenue commissioner must give the petroleum producer notice of a decision under subsection (6) .
(sec.32-ssec.8) The election ends on the day stated in the notice.
(sec.32-ssec.9) For subsection (8) , the day stated in the notice may be a day before the day on which the petroleum producer made the application under subsection (5) to end the election.
(sec.32-ssec.10) In making a decision under subsection (1) (d) , the revenue commissioner may have regard to any of the following matters— any arrangements existing between the petroleum producer, or 1 or more resellers for the producer, and a person who purchases liquid petroleum from the producer or reseller; the number of sales in the royalty return period of liquid petroleum produced by the petroleum producer; the volume of liquid petroleum produced by the petroleum producer in the royalty return period that is sold to an independent buyer; the volume of liquid petroleum produced by the petroleum producer in the royalty return period that is sold to a person other than an independent buyer; any other matter the revenue commissioner considers relevant.
(sec.32-ssec.11) The revenue commissioner must give a petroleum producer notice of a decision under subsection (1) (d) .
(sec.32-ssec.12) The decision takes effect on the day stated in the notice.
(sec.32-ssec.13) For subsection (12) , the day stated in the notice may be a day before the day on which the revenue commissioner makes the decision.
(a) an election made by the producer under subsection (3) is in effect; or
(b) the producer does not provide, for an assessment, the information required to work out, under section 31 , the average sales price for liquid petroleum for the producer for the period; or
(c) no oil is sold in the period, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to an independent buyer; or
(d) the revenue commissioner decides it is appropriate for the protection of the public revenue for subsection (2) to apply.
(a) starts on the first day of the royalty return period for the royalty return in which the election is made; and
(b) continues in effect for each royalty return period after the royalty return period mentioned in paragraph (a) unless the revenue commissioner ends the election under subsection (6) .
(a) any arrangements existing between the petroleum producer, or 1 or more resellers for the producer, and a person who purchases liquid petroleum from the producer or reseller;
(b) the number of sales in the royalty return period of liquid petroleum produced by the petroleum producer;
(c) the volume of liquid petroleum produced by the petroleum producer in the royalty return period that is sold to an independent buyer;
(d) the volume of liquid petroleum produced by the petroleum producer in the royalty return period that is sold to a person other than an independent buyer;
(e) any other matter the revenue commissioner considers relevant.
pt.2-div.4
Royalty returns
Royalty returns
sec.33
Purpose of division
sec.33 Purpose of division
For section 592A of the Act , this division prescribes the requirements for royalty returns lodged under the Act .
sec.34
Lodgement with revenue commissioner
sec.34 Lodgement with revenue commissioner
A royalty return must be lodged with the revenue commissioner.
sec.35
Form of royalty returns
sec.35 Form of royalty returns
A royalty return lodged under the Act must be in the approved form.
sec.36
Period to which royalty return must relate
sec.36 Period to which royalty return must relate
A royalty return required under the Act to be lodged by a petroleum producer must relate to a period of—
if the petroleum producer holds a petroleum lease or a 1923 Act lease—a calendar quarter; or
otherwise—a financial year.
However, if the revenue commissioner considers it appropriate having regard to the amount of the petroleum royalty likely to be payable by the petroleum producer, the revenue commissioner may decide that—
for a petroleum producer to whom subsection (1) (a) applies—a royalty return must relate to a financial year; or
for a petroleum producer to whom subsection (1) (b) applies—a royalty return must relate to a calendar quarter.
A petroleum producer may ask the revenue commissioner to make a decision under subsection (2) (b) .
If the revenue commissioner makes a decision under subsection (2) (a) or (b) —
the revenue commissioner must give notice of the decision to the petroleum producer required to lodge the return; and
the notice must state the day on which the decision is to take effect; and
for subsection (2) (b) —the day stated in the notice must not be earlier than the day the revenue commissioner gives the petroleum producer the notice unless the person agrees otherwise.
The decision takes effect on the day stated in the notice.
(sec.36-ssec.1) A royalty return required under the Act to be lodged by a petroleum producer must relate to a period of— if the petroleum producer holds a petroleum lease or a 1923 Act lease—a calendar quarter; or otherwise—a financial year.
(sec.36-ssec.2) However, if the revenue commissioner considers it appropriate having regard to the amount of the petroleum royalty likely to be payable by the petroleum producer, the revenue commissioner may decide that— for a petroleum producer to whom subsection (1) (a) applies—a royalty return must relate to a financial year; or for a petroleum producer to whom subsection (1) (b) applies—a royalty return must relate to a calendar quarter.
(sec.36-ssec.3) A petroleum producer may ask the revenue commissioner to make a decision under subsection (2) (b) .
(sec.36-ssec.4) If the revenue commissioner makes a decision under subsection (2) (a) or (b) — the revenue commissioner must give notice of the decision to the petroleum producer required to lodge the return; and the notice must state the day on which the decision is to take effect; and for subsection (2) (b) —the day stated in the notice must not be earlier than the day the revenue commissioner gives the petroleum producer the notice unless the person agrees otherwise.
(sec.36-ssec.5) The decision takes effect on the day stated in the notice.
(a) if the petroleum producer holds a petroleum lease or a 1923 Act lease—a calendar quarter; or
(b) otherwise—a financial year.
(a) for a petroleum producer to whom subsection (1) (a) applies—a royalty return must relate to a financial year; or
(b) for a petroleum producer to whom subsection (1) (b) applies—a royalty return must relate to a calendar quarter.
(a) the revenue commissioner must give notice of the decision to the petroleum producer required to lodge the return; and
(b) the notice must state the day on which the decision is to take effect; and
(c) for subsection (2) (b) —the day stated in the notice must not be earlier than the day the revenue commissioner gives the petroleum producer the notice unless the person agrees otherwise.
sec.37
When royalty return must be lodged
sec.37 When royalty return must be lodged
A royalty return required under the Act to be lodged by a petroleum producer that relates to a financial year must be lodged within 3 months after the day the year ends.
A royalty return required under the Act to be lodged by a petroleum producer that relates to a calendar quarter must be lodged on or before the last business day of the month after the day the quarter ends.
This section applies subject to section 38 .
(sec.37-ssec.1) A royalty return required under the Act to be lodged by a petroleum producer that relates to a financial year must be lodged within 3 months after the day the year ends.
(sec.37-ssec.2) A royalty return required under the Act to be lodged by a petroleum producer that relates to a calendar quarter must be lodged on or before the last business day of the month after the day the quarter ends.
(sec.37-ssec.3) This section applies subject to section 38 .
sec.38
Revenue commissioner may require royalty return to be lodged on particular day
sec.38 Revenue commissioner may require royalty return to be lodged on particular day
This section applies if the revenue commissioner considers that, for the protection of the public revenue, a royalty return should be lodged on a day that is earlier than the day mentioned in section 37 (1) or (2) .
The revenue commissioner may, by notice, require the petroleum producer required to lodge the royalty return to lodge it on a stated day that is at least 7 days after the day the revenue commissioner gives the petroleum producer the notice.
(sec.38-ssec.1) This section applies if the revenue commissioner considers that, for the protection of the public revenue, a royalty return should be lodged on a day that is earlier than the day mentioned in section 37 (1) or (2) .
(sec.38-ssec.2) The revenue commissioner may, by notice, require the petroleum producer required to lodge the royalty return to lodge it on a stated day that is at least 7 days after the day the revenue commissioner gives the petroleum producer the notice.
sec.39
Fee for failing to lodge royalty return on time
sec.39 Fee for failing to lodge royalty return on time
If a petroleum producer is required to lodge a royalty return and does not lodge the return by the day it is required to be lodged, the petroleum producer must pay the prescribed fee.
The prescribed fee is 206.70 fee units.
For the Taxation Administration Act 2001 , section 30 (1) (d) , the time by which the prescribed fee is payable is the day the assessment is made of the petroleum royalty payable for the period to which the return relates.
The revenue commissioner may remit the whole or part of the fee.
The remission must be made by assessment under the Taxation Administration Act 2001 .
For working out the amount of the fee expressed in subsection (2) as a number of fee units, for the purpose of the Acts Interpretation Act 1954 , section 48C (3) , the amount is to be rounded down to the nearest multiple of 5 cents.
Subsection (2) provides for a fee of 206.70 fee units. If the value of a fee unit for this regulation were $1.025, the number of dollars obtained by multiplying $1.025 by 206.70 would be $211.8675. After rounding down, the amount of the fee would be $211.85.
s 39 amd 2022 SL No. 53 s 12
(sec.39-ssec.1) If a petroleum producer is required to lodge a royalty return and does not lodge the return by the day it is required to be lodged, the petroleum producer must pay the prescribed fee.
(sec.39-ssec.2) The prescribed fee is 206.70 fee units.
(sec.39-ssec.3) For the Taxation Administration Act 2001 , section 30 (1) (d) , the time by which the prescribed fee is payable is the day the assessment is made of the petroleum royalty payable for the period to which the return relates.
(sec.39-ssec.4) The revenue commissioner may remit the whole or part of the fee.
(sec.39-ssec.5) The remission must be made by assessment under the Taxation Administration Act 2001 .
(sec.39-ssec.6) For working out the amount of the fee expressed in subsection (2) as a number of fee units, for the purpose of the Acts Interpretation Act 1954 , section 48C (3) , the amount is to be rounded down to the nearest multiple of 5 cents. Subsection (2) provides for a fee of 206.70 fee units. If the value of a fee unit for this regulation were $1.025, the number of dollars obtained by multiplying $1.025 by 206.70 would be $211.8675. After rounding down, the amount of the fee would be $211.85.
pt.2-div.5
Payment of petroleum royalty
Payment of petroleum royalty
sec.40
When petroleum royalty payable—yearly return period
sec.40 When petroleum royalty payable—yearly return period
For the Taxation Administration Act 2001 , section 30 (1) , the petroleum royalty payable by a petroleum producer under the Act for a royalty return period that is a financial year is payable on the day the royalty return must be lodged for the royalty return period.
sec.41
When petroleum royalty payable—return period that is calendar quarter
sec.41 When petroleum royalty payable—return period that is calendar quarter
Subject to section 42 , the petroleum royalty payable by a petroleum producer under the Act for a royalty return period that is a calendar quarter is payable as follows—
instalment 1 is payable on the last business day of the second month of the royalty return period;
instalment 2 is payable on the last business day of the third month of the royalty return period;
under the Taxation Administration Act 2001 , section 30 (1) (a) , instalment 3 is payable on the day a royalty return must be lodged for the royalty return period.
A petroleum producer must lodge an approved form for a payment under subsection (1) when the payment is made.
In this section—
instalment 1 , for a royalty return period that is a calendar quarter, means—
the amount payable by the petroleum producer for the first month of the royalty return period worked out under section 43 ; or
if an election under section 45 applies for the first month of the royalty return period—the amount payable by the petroleum producer for the first month worked out under section 45 (5) (a) .
instalment 2 , for a royalty return period that is a calendar quarter, means—
the amount payable by the petroleum producer for the second month of the royalty return period worked out under section 43 ; or
if an election under section 45 applies for the second month of the royalty return period—the amount payable by the petroleum producer for the second month worked out under section 45 (5) (b) .
instalment 3 , for a royalty return period that is a calendar quarter, means—
if the sum of instalment 1 and instalment 2 for the royalty return period is less than the petroleum royalty payable by the petroleum producer under the Act for the royalty return period (the total royalty )—the amount of the total royalty less the sum; or
otherwise—zero.
(sec.41-ssec.1) Subject to section 42 , the petroleum royalty payable by a petroleum producer under the Act for a royalty return period that is a calendar quarter is payable as follows— instalment 1 is payable on the last business day of the second month of the royalty return period; instalment 2 is payable on the last business day of the third month of the royalty return period; under the Taxation Administration Act 2001 , section 30 (1) (a) , instalment 3 is payable on the day a royalty return must be lodged for the royalty return period.
(sec.41-ssec.2) A petroleum producer must lodge an approved form for a payment under subsection (1) when the payment is made.
(sec.41-ssec.3) In this section— instalment 1 , for a royalty return period that is a calendar quarter, means— the amount payable by the petroleum producer for the first month of the royalty return period worked out under section 43 ; or if an election under section 45 applies for the first month of the royalty return period—the amount payable by the petroleum producer for the first month worked out under section 45 (5) (a) . instalment 2 , for a royalty return period that is a calendar quarter, means— the amount payable by the petroleum producer for the second month of the royalty return period worked out under section 43 ; or if an election under section 45 applies for the second month of the royalty return period—the amount payable by the petroleum producer for the second month worked out under section 45 (5) (b) . instalment 3 , for a royalty return period that is a calendar quarter, means— if the sum of instalment 1 and instalment 2 for the royalty return period is less than the petroleum royalty payable by the petroleum producer under the Act for the royalty return period (the total royalty )—the amount of the total royalty less the sum; or otherwise—zero.
(a) instalment 1 is payable on the last business day of the second month of the royalty return period;
(b) instalment 2 is payable on the last business day of the third month of the royalty return period;
(c) under the Taxation Administration Act 2001 , section 30 (1) (a) , instalment 3 is payable on the day a royalty return must be lodged for the royalty return period.
(a) the amount payable by the petroleum producer for the first month of the royalty return period worked out under section 43 ; or
(b) if an election under section 45 applies for the first month of the royalty return period—the amount payable by the petroleum producer for the first month worked out under section 45 (5) (a) .
(a) the amount payable by the petroleum producer for the second month of the royalty return period worked out under section 43 ; or
(b) if an election under section 45 applies for the second month of the royalty return period—the amount payable by the petroleum producer for the second month worked out under section 45 (5) (b) .
(a) if the sum of instalment 1 and instalment 2 for the royalty return period is less than the petroleum royalty payable by the petroleum producer under the Act for the royalty return period (the total royalty )—the amount of the total royalty less the sum; or
(b) otherwise—zero.
sec.42
Quarterly payment notice
sec.42 Quarterly payment notice
If the revenue commissioner considers it appropriate, the revenue commissioner may, by notice (a quarterly payment notice ) given to a petroleum producer, state that the day petroleum royalty is payable by the petroleum producer for a royalty return period that is a calendar quarter is the day the royalty return must be lodged for the period instead of an earlier time under section 41 (1) (a) or (b) .
A quarterly payment notice given to a petroleum producer must state the period for which the notice applies.
If the revenue commissioner considers it appropriate to do so, the revenue commissioner may, by notice, withdraw a quarterly payment notice.
A withdrawal under subsection (3) takes effect from the start of the next royalty return period after the end of the royalty return period in which the notice of the withdrawal is given.
(sec.42-ssec.1) If the revenue commissioner considers it appropriate, the revenue commissioner may, by notice (a quarterly payment notice ) given to a petroleum producer, state that the day petroleum royalty is payable by the petroleum producer for a royalty return period that is a calendar quarter is the day the royalty return must be lodged for the period instead of an earlier time under section 41 (1) (a) or (b) .
(sec.42-ssec.2) A quarterly payment notice given to a petroleum producer must state the period for which the notice applies.
(sec.42-ssec.3) If the revenue commissioner considers it appropriate to do so, the revenue commissioner may, by notice, withdraw a quarterly payment notice.
(sec.42-ssec.4) A withdrawal under subsection (3) takes effect from the start of the next royalty return period after the end of the royalty return period in which the notice of the withdrawal is given.
sec.43
Working out monthly payments for return period that is calendar quarter generally
sec.43 Working out monthly payments for return period that is calendar quarter generally
This section provides, for section 41 (1) , the amounts payable by a petroleum producer for the first and second months of a royalty return period (the current royalty return period ).
See, however, section 45 .
The amount payable by the petroleum producer for each of the first and second months of the current royalty return period is a third of the total amount of the petroleum royalty payable by the petroleum producer under the Act for the previous royalty return period—
taking into account any assessment under the Taxation Administration Act 2001 , for the petroleum royalty payable for the previous royalty return period, made before the earlier of the following events happens—
the amount for the first month of the current royalty return period is paid;
the amount for the first month of the current royalty return period becomes payable; and
disregarding any assessment under the Taxation Administration Act 2001 , for the petroleum royalty payable for the previous royalty return period, made when, or after, the earlier of the events mentioned in paragraph (a) (i) and (ii) happens.
The petroleum royalty paid for the previous royalty return period was $90,000. A reassessment for the previous royalty return period was made by the revenue commissioner under the Taxation Administration Act 2001 to increase the petroleum royalty payable for the previous royalty return period to $120,000. The reassessment was made before the amount payable for the first month of the royalty return period is paid or becomes payable (whichever is the earlier). Accordingly, the amount payable under this section for the first month and second month of the royalty return period is $40,000 (being a third of $120,000).
(sec.43-ssec.1) This section provides, for section 41 (1) , the amounts payable by a petroleum producer for the first and second months of a royalty return period (the current royalty return period ). See, however, section 45 .
(sec.43-ssec.2) The amount payable by the petroleum producer for each of the first and second months of the current royalty return period is a third of the total amount of the petroleum royalty payable by the petroleum producer under the Act for the previous royalty return period— taking into account any assessment under the Taxation Administration Act 2001 , for the petroleum royalty payable for the previous royalty return period, made before the earlier of the following events happens— the amount for the first month of the current royalty return period is paid; the amount for the first month of the current royalty return period becomes payable; and disregarding any assessment under the Taxation Administration Act 2001 , for the petroleum royalty payable for the previous royalty return period, made when, or after, the earlier of the events mentioned in paragraph (a) (i) and (ii) happens. The petroleum royalty paid for the previous royalty return period was $90,000. A reassessment for the previous royalty return period was made by the revenue commissioner under the Taxation Administration Act 2001 to increase the petroleum royalty payable for the previous royalty return period to $120,000. The reassessment was made before the amount payable for the first month of the royalty return period is paid or becomes payable (whichever is the earlier). Accordingly, the amount payable under this section for the first month and second month of the royalty return period is $40,000 (being a third of $120,000).
(a) taking into account any assessment under the Taxation Administration Act 2001 , for the petroleum royalty payable for the previous royalty return period, made before the earlier of the following events happens— (i) the amount for the first month of the current royalty return period is paid; (ii) the amount for the first month of the current royalty return period becomes payable; and
(i) the amount for the first month of the current royalty return period is paid;
(ii) the amount for the first month of the current royalty return period becomes payable; and
(b) disregarding any assessment under the Taxation Administration Act 2001 , for the petroleum royalty payable for the previous royalty return period, made when, or after, the earlier of the events mentioned in paragraph (a) (i) and (ii) happens. Example— The petroleum royalty paid for the previous royalty return period was $90,000. A reassessment for the previous royalty return period was made by the revenue commissioner under the Taxation Administration Act 2001 to increase the petroleum royalty payable for the previous royalty return period to $120,000. The reassessment was made before the amount payable for the first month of the royalty return period is paid or becomes payable (whichever is the earlier). Accordingly, the amount payable under this section for the first month and second month of the royalty return period is $40,000 (being a third of $120,000).
(i) the amount for the first month of the current royalty return period is paid;
(ii) the amount for the first month of the current royalty return period becomes payable; and
sec.44
Working out monthly payments for return period that is calendar quarter in particular circumstances
sec.44 Working out monthly payments for return period that is calendar quarter in particular circumstances
This section applies if—
an amount is payable by a petroleum producer under section 43 (2) for the first and second months of a royalty return period (the current royalty return period ); and
either—
the petroleum producer did not lodge a royalty return for the previous royalty return period, as required under the Act ; or
the previous royalty return period was not a calendar quarter.
For working out the amounts payable by the petroleum producer under section 43 (2) —
the revenue commissioner may—
if subsection (1) (b) (i) applies—estimate the total amount of petroleum royalty payable by the petroleum producer under the Act for the previous royalty return period; or
if subsection (1) (b) (ii) applies—adjust the amount of petroleum royalty payable by the petroleum producer under the Act for the previous royalty return period to estimate an amount representative of the petroleum royalty that would have been payable if the previous royalty return period were a calendar quarter; and
the revenue commissioner must give the petroleum producer a notice stating the amount (the estimated amount ) estimated by the revenue commissioner under paragraph (a) (i) or (ii) ; and
the estimated amount is the total amount of petroleum royalty payable by the petroleum producer under the Act for the previous royalty return period.
In estimating an amount for subsection (2) (a) (i) or (ii) , the revenue commissioner may have regard to—
any other royalty returns lodged by the petroleum producer; and
the volume of petroleum for which the petroleum royalty is payable; and
any other relevant matter.
(sec.44-ssec.1) This section applies if— an amount is payable by a petroleum producer under section 43 (2) for the first and second months of a royalty return period (the current royalty return period ); and either— the petroleum producer did not lodge a royalty return for the previous royalty return period, as required under the Act ; or the previous royalty return period was not a calendar quarter.
(sec.44-ssec.2) For working out the amounts payable by the petroleum producer under section 43 (2) — the revenue commissioner may— if subsection (1) (b) (i) applies—estimate the total amount of petroleum royalty payable by the petroleum producer under the Act for the previous royalty return period; or if subsection (1) (b) (ii) applies—adjust the amount of petroleum royalty payable by the petroleum producer under the Act for the previous royalty return period to estimate an amount representative of the petroleum royalty that would have been payable if the previous royalty return period were a calendar quarter; and the revenue commissioner must give the petroleum producer a notice stating the amount (the estimated amount ) estimated by the revenue commissioner under paragraph (a) (i) or (ii) ; and the estimated amount is the total amount of petroleum royalty payable by the petroleum producer under the Act for the previous royalty return period.
(sec.44-ssec.3) In estimating an amount for subsection (2) (a) (i) or (ii) , the revenue commissioner may have regard to— any other royalty returns lodged by the petroleum producer; and the volume of petroleum for which the petroleum royalty is payable; and any other relevant matter.
(a) an amount is payable by a petroleum producer under section 43 (2) for the first and second months of a royalty return period (the current royalty return period ); and
(b) either— (i) the petroleum producer did not lodge a royalty return for the previous royalty return period, as required under the Act ; or (ii) the previous royalty return period was not a calendar quarter.
(i) the petroleum producer did not lodge a royalty return for the previous royalty return period, as required under the Act ; or
(ii) the previous royalty return period was not a calendar quarter.
(i) the petroleum producer did not lodge a royalty return for the previous royalty return period, as required under the Act ; or
(ii) the previous royalty return period was not a calendar quarter.
(a) the revenue commissioner may— (i) if subsection (1) (b) (i) applies—estimate the total amount of petroleum royalty payable by the petroleum producer under the Act for the previous royalty return period; or (ii) if subsection (1) (b) (ii) applies—adjust the amount of petroleum royalty payable by the petroleum producer under the Act for the previous royalty return period to estimate an amount representative of the petroleum royalty that would have been payable if the previous royalty return period were a calendar quarter; and
(i) if subsection (1) (b) (i) applies—estimate the total amount of petroleum royalty payable by the petroleum producer under the Act for the previous royalty return period; or
(ii) if subsection (1) (b) (ii) applies—adjust the amount of petroleum royalty payable by the petroleum producer under the Act for the previous royalty return period to estimate an amount representative of the petroleum royalty that would have been payable if the previous royalty return period were a calendar quarter; and
(b) the revenue commissioner must give the petroleum producer a notice stating the amount (the estimated amount ) estimated by the revenue commissioner under paragraph (a) (i) or (ii) ; and
(c) the estimated amount is the total amount of petroleum royalty payable by the petroleum producer under the Act for the previous royalty return period.
(i) if subsection (1) (b) (i) applies—estimate the total amount of petroleum royalty payable by the petroleum producer under the Act for the previous royalty return period; or
(ii) if subsection (1) (b) (ii) applies—adjust the amount of petroleum royalty payable by the petroleum producer under the Act for the previous royalty return period to estimate an amount representative of the petroleum royalty that would have been payable if the previous royalty return period were a calendar quarter; and
(a) any other royalty returns lodged by the petroleum producer; and
(b) the volume of petroleum for which the petroleum royalty is payable; and
(c) any other relevant matter.
sec.45
Election to change monthly payments for return period that is calendar quarter
sec.45 Election to change monthly payments for return period that is calendar quarter
This section applies if, at the relevant time—
a petroleum producer reasonably believes the amount of petroleum royalty payable by the producer under the Act for a royalty return period that is a calendar quarter (the current royalty return period ) will be less than the petroleum royalty payable by the producer under the Act for the previous royalty return period; and
the revenue commissioner has not given the petroleum producer a notice under section 46 .
For subsection (1) , the petroleum royalty payable by the petroleum producer under the Act for the previous royalty return period is the amount that, under section 43 or 44 , is the petroleum royalty payable by the producer under the Act for the previous royalty return period for section 43 (2) .
The petroleum producer may elect to change the amount payable for the first or second months of the current royalty return period.
The election must—
be in the approved form; and
state the amount of petroleum royalty the petroleum producer reasonably believes will be payable by the petroleum producer under the Act for the current royalty return period; and
unless the revenue commissioner, by notice given to the petroleum producer, approves another day for making the election—be lodged on or before—
for an election for the first month of the current royalty return period—the last business day of the second month of the royalty return period; or
for an election for the second month of the current royalty return period—the last business day of the third month of the royalty return period.
Subject to subsection (6) —
if the petroleum producer makes an election under subsection (3) for the first month of the current royalty return period, the amount payable for that month is a third of the amount mentioned in subsection (4) (b) for the election; or
if the petroleum producer makes an election under subsection (3) for the second month of the current royalty return period, the amount payable for that month is a third of the amount mentioned in subsection (4) (b) for the election.
The amount payable, as changed under subsection (3) for the first or second months of a royalty return period, may be more than the amount payable under subsection (5) (a) or (b) .
In this section—
relevant time , for an election for the first month or the second month of a royalty return period, means when the amount payable for the month becomes payable under section 41 .
(sec.45-ssec.1) This section applies if, at the relevant time— a petroleum producer reasonably believes the amount of petroleum royalty payable by the producer under the Act for a royalty return period that is a calendar quarter (the current royalty return period ) will be less than the petroleum royalty payable by the producer under the Act for the previous royalty return period; and the revenue commissioner has not given the petroleum producer a notice under section 46 .
(sec.45-ssec.2) For subsection (1) , the petroleum royalty payable by the petroleum producer under the Act for the previous royalty return period is the amount that, under section 43 or 44 , is the petroleum royalty payable by the producer under the Act for the previous royalty return period for section 43 (2) .
(sec.45-ssec.3) The petroleum producer may elect to change the amount payable for the first or second months of the current royalty return period.
(sec.45-ssec.4) The election must— be in the approved form; and state the amount of petroleum royalty the petroleum producer reasonably believes will be payable by the petroleum producer under the Act for the current royalty return period; and unless the revenue commissioner, by notice given to the petroleum producer, approves another day for making the election—be lodged on or before— for an election for the first month of the current royalty return period—the last business day of the second month of the royalty return period; or for an election for the second month of the current royalty return period—the last business day of the third month of the royalty return period.
(sec.45-ssec.5) Subject to subsection (6) — if the petroleum producer makes an election under subsection (3) for the first month of the current royalty return period, the amount payable for that month is a third of the amount mentioned in subsection (4) (b) for the election; or if the petroleum producer makes an election under subsection (3) for the second month of the current royalty return period, the amount payable for that month is a third of the amount mentioned in subsection (4) (b) for the election.
(sec.45-ssec.6) The amount payable, as changed under subsection (3) for the first or second months of a royalty return period, may be more than the amount payable under subsection (5) (a) or (b) .
(sec.45-ssec.7) In this section— relevant time , for an election for the first month or the second month of a royalty return period, means when the amount payable for the month becomes payable under section 41 .
(a) a petroleum producer reasonably believes the amount of petroleum royalty payable by the producer under the Act for a royalty return period that is a calendar quarter (the current royalty return period ) will be less than the petroleum royalty payable by the producer under the Act for the previous royalty return period; and
(b) the revenue commissioner has not given the petroleum producer a notice under section 46 .
(a) be in the approved form; and
(b) state the amount of petroleum royalty the petroleum producer reasonably believes will be payable by the petroleum producer under the Act for the current royalty return period; and
(c) unless the revenue commissioner, by notice given to the petroleum producer, approves another day for making the election—be lodged on or before— (i) for an election for the first month of the current royalty return period—the last business day of the second month of the royalty return period; or (ii) for an election for the second month of the current royalty return period—the last business day of the third month of the royalty return period.
(i) for an election for the first month of the current royalty return period—the last business day of the second month of the royalty return period; or
(ii) for an election for the second month of the current royalty return period—the last business day of the third month of the royalty return period.
(i) for an election for the first month of the current royalty return period—the last business day of the second month of the royalty return period; or
(ii) for an election for the second month of the current royalty return period—the last business day of the third month of the royalty return period.
(a) if the petroleum producer makes an election under subsection (3) for the first month of the current royalty return period, the amount payable for that month is a third of the amount mentioned in subsection (4) (b) for the election; or
(b) if the petroleum producer makes an election under subsection (3) for the second month of the current royalty return period, the amount payable for that month is a third of the amount mentioned in subsection (4) (b) for the election.
sec.46
Revenue commissioner may give notice requiring petroleum royalty payable to be worked out under s 43
sec.46 Revenue commissioner may give notice requiring petroleum royalty payable to be worked out under s 43
This section applies if—
a petroleum producer has previously made an election under section 45 (3) ; and
the revenue commissioner considers the petroleum producer did not have a reasonable basis for forming the belief mentioned in section 45 (1) (a) for the election.
The revenue commissioner may give the petroleum producer a notice stating that the amounts payable by the petroleum producer for the first and second months of 1 or more royalty return periods must be worked out under section 43 .
The petroleum producer may not make an election under section 45 (3) for a royalty return period to which the notice relates.
(sec.46-ssec.1) This section applies if— a petroleum producer has previously made an election under section 45 (3) ; and the revenue commissioner considers the petroleum producer did not have a reasonable basis for forming the belief mentioned in section 45 (1) (a) for the election.
(sec.46-ssec.2) The revenue commissioner may give the petroleum producer a notice stating that the amounts payable by the petroleum producer for the first and second months of 1 or more royalty return periods must be worked out under section 43 .
(sec.46-ssec.3) The petroleum producer may not make an election under section 45 (3) for a royalty return period to which the notice relates.
(a) a petroleum producer has previously made an election under section 45 (3) ; and
(b) the revenue commissioner considers the petroleum producer did not have a reasonable basis for forming the belief mentioned in section 45 (1) (a) for the election.
pt.2-div.6
Joint venture tenures
Joint venture tenures
sec.47
Definitions for division
sec.47 Definitions for division
In this division—
amount , of petroleum produced under a joint venture tenure, includes a percentage or proportion of petroleum produced under the tenure.
election period , for a joint venture tenure, means the period for which a non-tenure holder is taken to be a petroleum producer, in relation to an amount of petroleum produced under the joint venture tenure, for a royalty provision.
joint venture tenure see section 48 (1) (b) .
non-tenure holder see section 48 (1) (a) .
tenure holder see section 48 (1) (b) .
sec.48
Non-tenure holder may apply to be treated as petroleum producer for joint venture tenure
sec.48 Non-tenure holder may apply to be treated as petroleum producer for joint venture tenure
This section applies if—
a person (the non-tenure holder ) is a participant in a joint venture, or other arrangement, involving the production of petroleum and does not hold a petroleum tenure under which the petroleum for the joint venture or other arrangement is produced; and
another person (the tenure holder ) holds a petroleum tenure under which the petroleum for the joint venture or other arrangement is produced (the joint venture tenure ).
The non-tenure holder may apply to the revenue commissioner to be taken to be a petroleum producer, in relation to a stated amount of petroleum produced under the joint venture tenure, for a royalty provision.
The application must—
be in the approved form; and
identify the joint venture tenure; and
state the proposed amount of petroleum produced under the joint venture tenure for which the non-tenure holder is to be taken to be a petroleum producer for a royalty provision; and
state the proposed day for the election period for the joint venture tenure to start; and
state either—
the proposed day for the election period for the joint venture tenure to end; or
that the election period for the joint venture tenure is to end under section 49 ; and
be accompanied by the consent to the application of the tenure holder.
The revenue commissioner must decide the application by—
granting the application in the way proposed; or
granting the application in another way, with the written agreement of the non-tenure holder and tenure holder; or
refusing to grant the application.
The revenue commissioner may grant the application only if the revenue commissioner is satisfied the decision would not adversely affect the protection of the public revenue.
The election period must not—
start on a day earlier than the first day of the current royalty return period; or
if a day is stated under subsection (3) (e) (i) —end on a day later than the stated day.
The revenue commissioner must give the non-tenure holder and the tenure holder notice of the decision.
If the decision is to refuse to grant the application, the notice must include reasons for the decision.
If the revenue commissioner decides to grant the application, for the election period for the joint venture tenure—
the non-tenure holder is taken to produce the amount of petroleum produced under the joint venture tenure that is decided by the revenue commissioner; and
the non-tenure holder is taken to be a petroleum producer, in relation to the amount of petroleum mentioned in paragraph (a) , for a royalty provision; and
the non-tenure holder is taken to be a taxpayer under the Taxation Administration Act 2001 in relation to petroleum royalty payable on the amount of petroleum mentioned in paragraph (a) ; and
a provision relating to when a royalty return is required to be lodged is taken to apply to the non-tenure holder as if the non-tenure holder held the joint venture tenure; and
sections 591 and 591A of the Act are taken to apply, in relation to the amount of petroleum mentioned in paragraph (a) , as if the non-tenure holder held the joint venture tenure.
This section does not affect the tenure holder’s liability to pay petroleum royalty on the amount of petroleum mentioned in subsection (9) (a) if the non-tenure holder does not pay the royalty.
In this section—
current royalty return period means the royalty return period applying in relation to the joint venture tenure on the day the application under this section is made.
(sec.48-ssec.1) This section applies if— a person (the non-tenure holder ) is a participant in a joint venture, or other arrangement, involving the production of petroleum and does not hold a petroleum tenure under which the petroleum for the joint venture or other arrangement is produced; and another person (the tenure holder ) holds a petroleum tenure under which the petroleum for the joint venture or other arrangement is produced (the joint venture tenure ).
(sec.48-ssec.2) The non-tenure holder may apply to the revenue commissioner to be taken to be a petroleum producer, in relation to a stated amount of petroleum produced under the joint venture tenure, for a royalty provision.
(sec.48-ssec.3) The application must— be in the approved form; and identify the joint venture tenure; and state the proposed amount of petroleum produced under the joint venture tenure for which the non-tenure holder is to be taken to be a petroleum producer for a royalty provision; and state the proposed day for the election period for the joint venture tenure to start; and state either— the proposed day for the election period for the joint venture tenure to end; or that the election period for the joint venture tenure is to end under section 49 ; and be accompanied by the consent to the application of the tenure holder.
(sec.48-ssec.4) The revenue commissioner must decide the application by— granting the application in the way proposed; or granting the application in another way, with the written agreement of the non-tenure holder and tenure holder; or refusing to grant the application.
(sec.48-ssec.5) The revenue commissioner may grant the application only if the revenue commissioner is satisfied the decision would not adversely affect the protection of the public revenue.
(sec.48-ssec.6) The election period must not— start on a day earlier than the first day of the current royalty return period; or if a day is stated under subsection (3) (e) (i) —end on a day later than the stated day.
(sec.48-ssec.7) The revenue commissioner must give the non-tenure holder and the tenure holder notice of the decision.
(sec.48-ssec.8) If the decision is to refuse to grant the application, the notice must include reasons for the decision.
(sec.48-ssec.9) If the revenue commissioner decides to grant the application, for the election period for the joint venture tenure— the non-tenure holder is taken to produce the amount of petroleum produced under the joint venture tenure that is decided by the revenue commissioner; and the non-tenure holder is taken to be a petroleum producer, in relation to the amount of petroleum mentioned in paragraph (a) , for a royalty provision; and the non-tenure holder is taken to be a taxpayer under the Taxation Administration Act 2001 in relation to petroleum royalty payable on the amount of petroleum mentioned in paragraph (a) ; and a provision relating to when a royalty return is required to be lodged is taken to apply to the non-tenure holder as if the non-tenure holder held the joint venture tenure; and sections 591 and 591A of the Act are taken to apply, in relation to the amount of petroleum mentioned in paragraph (a) , as if the non-tenure holder held the joint venture tenure.
(sec.48-ssec.10) This section does not affect the tenure holder’s liability to pay petroleum royalty on the amount of petroleum mentioned in subsection (9) (a) if the non-tenure holder does not pay the royalty.
(sec.48-ssec.11) In this section— current royalty return period means the royalty return period applying in relation to the joint venture tenure on the day the application under this section is made.
(a) a person (the non-tenure holder ) is a participant in a joint venture, or other arrangement, involving the production of petroleum and does not hold a petroleum tenure under which the petroleum for the joint venture or other arrangement is produced; and
(b) another person (the tenure holder ) holds a petroleum tenure under which the petroleum for the joint venture or other arrangement is produced (the joint venture tenure ).
(a) be in the approved form; and
(b) identify the joint venture tenure; and
(c) state the proposed amount of petroleum produced under the joint venture tenure for which the non-tenure holder is to be taken to be a petroleum producer for a royalty provision; and
(d) state the proposed day for the election period for the joint venture tenure to start; and
(e) state either— (i) the proposed day for the election period for the joint venture tenure to end; or (ii) that the election period for the joint venture tenure is to end under section 49 ; and
(i) the proposed day for the election period for the joint venture tenure to end; or
(ii) that the election period for the joint venture tenure is to end under section 49 ; and
(f) be accompanied by the consent to the application of the tenure holder.
(i) the proposed day for the election period for the joint venture tenure to end; or
(ii) that the election period for the joint venture tenure is to end under section 49 ; and
(a) granting the application in the way proposed; or
(b) granting the application in another way, with the written agreement of the non-tenure holder and tenure holder; or
(c) refusing to grant the application.
(a) start on a day earlier than the first day of the current royalty return period; or
(b) if a day is stated under subsection (3) (e) (i) —end on a day later than the stated day.
(a) the non-tenure holder is taken to produce the amount of petroleum produced under the joint venture tenure that is decided by the revenue commissioner; and
(b) the non-tenure holder is taken to be a petroleum producer, in relation to the amount of petroleum mentioned in paragraph (a) , for a royalty provision; and
(c) the non-tenure holder is taken to be a taxpayer under the Taxation Administration Act 2001 in relation to petroleum royalty payable on the amount of petroleum mentioned in paragraph (a) ; and
(d) a provision relating to when a royalty return is required to be lodged is taken to apply to the non-tenure holder as if the non-tenure holder held the joint venture tenure; and
(e) sections 591 and 591A of the Act are taken to apply, in relation to the amount of petroleum mentioned in paragraph (a) , as if the non-tenure holder held the joint venture tenure.
sec.49
Ending of election period on application or by revenue commissioner
sec.49 Ending of election period on application or by revenue commissioner
This section applies if the revenue commissioner has approved an application in relation to a joint venture tenure under section 48 .
The non-tenure holder or tenure holder for the joint venture tenure may apply to the revenue commissioner to end the election period for the joint venture tenure.
The application must—
be in the approved form; and
state the proposed day for the election period for the joint venture tenure to end; and
if the application is made by the non-tenure holder—be accompanied by evidence that the non-tenure holder has notified the tenure holder of the application; and
if the application is made by the tenure holder—be accompanied by evidence that the tenure holder has notified the non-tenure holder of the application.
The revenue commissioner must decide the application by—
ending the election period on the day proposed; or
ending the election period on another day, with the written agreement of the non-tenure holder and tenure holder; or
refusing to end the election period.
The revenue commissioner must decide to end the election period if the revenue commissioner is satisfied that ending the election period would not adversely affect the protection of the public revenue.
The revenue commissioner may also decide, on the revenue commissioner’s own initiative, to end the election period for the joint venture tenure if the revenue commissioner is satisfied that ending the election period is appropriate for the protection of the public revenue.
The day on which the election period ends must not be earlier than the first day of the current royalty return period.
The revenue commissioner must give the non-tenure holder and the tenure holder notice of a decision under subsection (4) or (6) .
If the decision is under subsection (6) , the notice must include reasons for the decision.
To remove any doubt, it is declared that the ending of the election period for the joint venture tenure does not affect a liability arising before the ending of the period.
In this section—
current royalty return period means—
for an application under subsection (2) —the royalty return period applying in relation to the joint venture tenure on the day the application is made; or
for a decision under subsection (6) —the royalty return period applying in relation to the joint venture tenure on the day the decision is made.
(sec.49-ssec.1) This section applies if the revenue commissioner has approved an application in relation to a joint venture tenure under section 48 .
(sec.49-ssec.2) The non-tenure holder or tenure holder for the joint venture tenure may apply to the revenue commissioner to end the election period for the joint venture tenure.
(sec.49-ssec.3) The application must— be in the approved form; and state the proposed day for the election period for the joint venture tenure to end; and if the application is made by the non-tenure holder—be accompanied by evidence that the non-tenure holder has notified the tenure holder of the application; and if the application is made by the tenure holder—be accompanied by evidence that the tenure holder has notified the non-tenure holder of the application.
(sec.49-ssec.4) The revenue commissioner must decide the application by— ending the election period on the day proposed; or ending the election period on another day, with the written agreement of the non-tenure holder and tenure holder; or refusing to end the election period.
(sec.49-ssec.5) The revenue commissioner must decide to end the election period if the revenue commissioner is satisfied that ending the election period would not adversely affect the protection of the public revenue.
(sec.49-ssec.6) The revenue commissioner may also decide, on the revenue commissioner’s own initiative, to end the election period for the joint venture tenure if the revenue commissioner is satisfied that ending the election period is appropriate for the protection of the public revenue.
(sec.49-ssec.7) The day on which the election period ends must not be earlier than the first day of the current royalty return period.
(sec.49-ssec.8) The revenue commissioner must give the non-tenure holder and the tenure holder notice of a decision under subsection (4) or (6) .
(sec.49-ssec.9) If the decision is under subsection (6) , the notice must include reasons for the decision.
(sec.49-ssec.10) To remove any doubt, it is declared that the ending of the election period for the joint venture tenure does not affect a liability arising before the ending of the period.
(sec.49-ssec.11) In this section— current royalty return period means— for an application under subsection (2) —the royalty return period applying in relation to the joint venture tenure on the day the application is made; or for a decision under subsection (6) —the royalty return period applying in relation to the joint venture tenure on the day the decision is made.
(a) be in the approved form; and
(b) state the proposed day for the election period for the joint venture tenure to end; and
(c) if the application is made by the non-tenure holder—be accompanied by evidence that the non-tenure holder has notified the tenure holder of the application; and
(d) if the application is made by the tenure holder—be accompanied by evidence that the tenure holder has notified the non-tenure holder of the application.
(a) ending the election period on the day proposed; or
(b) ending the election period on another day, with the written agreement of the non-tenure holder and tenure holder; or
(c) refusing to end the election period.
(a) for an application under subsection (2) —the royalty return period applying in relation to the joint venture tenure on the day the application is made; or
(b) for a decision under subsection (6) —the royalty return period applying in relation to the joint venture tenure on the day the decision is made.
pt.2-div.7
Royalty estimate
Royalty estimate
sec.50
Purpose of division
sec.50 Purpose of division
This division prescribes for section 593 (2) of the Act the requirements for royalty estimates.
sec.51
What notice must contain
sec.51 What notice must contain
The notice given by the revenue commissioner to a petroleum producer under section 593 of the Act (a royalty estimate notice ) must include the following—
the period (the estimate period ) for which the petroleum producer is to estimate the royalties payable by the petroleum producer under section 590 of the Act ;
the day by which the petroleum producer must provide the royalty estimate;
the form in which the petroleum producer must provide the royalty estimate;
a description of the information the petroleum producer must provide in the royalty estimate.
For subsection (1) (d) , the information the revenue commissioner may ask a petroleum producer to provide in the royalty estimate includes the following—
a statement of each type of petroleum the producer expects to produce in the estimate period;
for each type of petroleum stated under paragraph (a) , an estimate of the following for the estimate period—
the volume of petroleum the producer expects to produce;
the volume of petroleum the producer expects to be exempt from petroleum royalty under section 591 or 591A of the Act ;
the volume of petroleum the producer expects to be subject to the benchmark price for the petroleum;
the average sales price for the petroleum for the petroleum producer for the estimate period.
Subsection (2) does not limit the information the revenue commissioner may ask to be included in the royalty estimate.
In this section—
type , of petroleum, means—
domestic gas; or
supply gas; or
project gas; or
liquid petroleum.
(sec.51-ssec.1) The notice given by the revenue commissioner to a petroleum producer under section 593 of the Act (a royalty estimate notice ) must include the following— the period (the estimate period ) for which the petroleum producer is to estimate the royalties payable by the petroleum producer under section 590 of the Act ; the day by which the petroleum producer must provide the royalty estimate; the form in which the petroleum producer must provide the royalty estimate; a description of the information the petroleum producer must provide in the royalty estimate.
(sec.51-ssec.2) For subsection (1) (d) , the information the revenue commissioner may ask a petroleum producer to provide in the royalty estimate includes the following— a statement of each type of petroleum the producer expects to produce in the estimate period; for each type of petroleum stated under paragraph (a) , an estimate of the following for the estimate period— the volume of petroleum the producer expects to produce; the volume of petroleum the producer expects to be exempt from petroleum royalty under section 591 or 591A of the Act ; the volume of petroleum the producer expects to be subject to the benchmark price for the petroleum; the average sales price for the petroleum for the petroleum producer for the estimate period.
(sec.51-ssec.3) Subsection (2) does not limit the information the revenue commissioner may ask to be included in the royalty estimate.
(sec.51-ssec.4) In this section— type , of petroleum, means— domestic gas; or supply gas; or project gas; or liquid petroleum.
(a) the period (the estimate period ) for which the petroleum producer is to estimate the royalties payable by the petroleum producer under section 590 of the Act ;
(b) the day by which the petroleum producer must provide the royalty estimate;
(c) the form in which the petroleum producer must provide the royalty estimate;
(d) a description of the information the petroleum producer must provide in the royalty estimate.
(a) a statement of each type of petroleum the producer expects to produce in the estimate period;
(b) for each type of petroleum stated under paragraph (a) , an estimate of the following for the estimate period— (i) the volume of petroleum the producer expects to produce; (ii) the volume of petroleum the producer expects to be exempt from petroleum royalty under section 591 or 591A of the Act ; (iii) the volume of petroleum the producer expects to be subject to the benchmark price for the petroleum; (iv) the average sales price for the petroleum for the petroleum producer for the estimate period.
(i) the volume of petroleum the producer expects to produce;
(ii) the volume of petroleum the producer expects to be exempt from petroleum royalty under section 591 or 591A of the Act ;
(iii) the volume of petroleum the producer expects to be subject to the benchmark price for the petroleum;
(iv) the average sales price for the petroleum for the petroleum producer for the estimate period.
(i) the volume of petroleum the producer expects to produce;
(ii) the volume of petroleum the producer expects to be exempt from petroleum royalty under section 591 or 591A of the Act ;
(iii) the volume of petroleum the producer expects to be subject to the benchmark price for the petroleum;
(iv) the average sales price for the petroleum for the petroleum producer for the estimate period.
(a) domestic gas; or
(b) supply gas; or
(c) project gas; or
(d) liquid petroleum.
sec.52
Form of and information to be included in royalty estimate
sec.52 Form of and information to be included in royalty estimate
The royalty estimate must—
be in the form stated in the royalty estimate notice; and
include the information asked for in the royalty estimate notice.
(a) be in the form stated in the royalty estimate notice; and
(b) include the information asked for in the royalty estimate notice.
sec.53
Revenue commissioner may request information to support royalty estimate
sec.53 Revenue commissioner may request information to support royalty estimate
The revenue commissioner may, by notice to a petroleum producer who has lodged a royalty estimate, ask the petroleum producer to give the revenue commissioner, by the day stated in the notice, information to support the matters stated in the royalty estimate.
The revenue commissioner may, by notice to a petroleum producer who must provide a royalty estimate under section 593 (2) of the Act , ask the petroleum producer to give the revenue commissioner, by the day stated in the notice, additional information about the matters that must be included in the royalty estimate.
If the revenue commissioner asks a petroleum producer for information under subsection (1) or (2) , the petroleum producer must provide the information by the day stated in the notice.
(sec.53-ssec.1) The revenue commissioner may, by notice to a petroleum producer who has lodged a royalty estimate, ask the petroleum producer to give the revenue commissioner, by the day stated in the notice, information to support the matters stated in the royalty estimate.
(sec.53-ssec.2) The revenue commissioner may, by notice to a petroleum producer who must provide a royalty estimate under section 593 (2) of the Act , ask the petroleum producer to give the revenue commissioner, by the day stated in the notice, additional information about the matters that must be included in the royalty estimate.
(sec.53-ssec.3) If the revenue commissioner asks a petroleum producer for information under subsection (1) or (2) , the petroleum producer must provide the information by the day stated in the notice.
pt.2-div.8
Miscellaneous
Miscellaneous
sec.54
Application of part to swap arrangements
sec.54 Application of part to swap arrangements
The revenue commissioner may make a determination about how this part applies to swap arrangements.
Without limiting subsection (1) , for petroleum subject to a swap arrangement, a determination may be made about—
how the average sales price for the petroleum is to be worked out for division 3 ; and
if the petroleum is gas—whether the gas is to be classified as domestic gas, supply gas or project gas.
The revenue commissioner must publish a determination made under subsection (1) on the department’s website.
In this section—
swap arrangement means an arrangement entered into between a petroleum producer or a reseller for a petroleum producer and another petroleum producer or a reseller for a petroleum producer, to swap rights or obligations in relation to petroleum produced by the producers to the extent the arrangement relates to exchanging the same volume and quality of petroleum in a particular period.
(sec.54-ssec.1) The revenue commissioner may make a determination about how this part applies to swap arrangements.
(sec.54-ssec.2) Without limiting subsection (1) , for petroleum subject to a swap arrangement, a determination may be made about— how the average sales price for the petroleum is to be worked out for division 3 ; and if the petroleum is gas—whether the gas is to be classified as domestic gas, supply gas or project gas.
(sec.54-ssec.3) The revenue commissioner must publish a determination made under subsection (1) on the department’s website.
(sec.54-ssec.4) In this section— swap arrangement means an arrangement entered into between a petroleum producer or a reseller for a petroleum producer and another petroleum producer or a reseller for a petroleum producer, to swap rights or obligations in relation to petroleum produced by the producers to the extent the arrangement relates to exchanging the same volume and quality of petroleum in a particular period.
(a) how the average sales price for the petroleum is to be worked out for division 3 ; and
(b) if the petroleum is gas—whether the gas is to be classified as domestic gas, supply gas or project gas.
sec.55
Imposition of civil penalty— Act , s 594
sec.55 Imposition of civil penalty— Act , s 594
This section applies if a petroleum producer makes a section 45 election and either—
the petroleum royalty payable for the current royalty return period exceeds the petroleum royalty payable for the previous royalty return period by an amount that is more than 15% of the petroleum royalty payable for the previous royalty return period; or
both of the following apply—
the petroleum royalty payable for the current royalty return period is less than the petroleum royalty payable for the previous royalty return period;
the total of the petroleum royalty payable for the first month and the second month of the current royalty return period is less than 50% of the total petroleum royalty payable for the current royalty return period.
The producer is liable to the State for an amount ( civil penalty ) equal to 25% of the default estimate difference, if any, for each month of the current royalty return period for which the producer makes the section 45 election.
For subsection (2) , the default estimate difference for a month of the current royalty return period is the difference between—
the amount that would have been payable for the month under section 43 if the producer had not made the section 45 election; and
the amount payable for the month under the section 45 election.
However, if the amount mentioned in subsection (3) (a) is less than the amount mentioned in subsection (3) (b) , the default estimate difference for the month is taken to be 0.
Subsection (6) applies if, for petroleum royalty payable for the current royalty return period, an assessment is made under the Taxation Administration Act 2001 .
For subsection (1) , the petroleum royalty payable for the current royalty return period is the amount of petroleum royalty payable taking into account the assessment.
For subsection (1) , a reference to the petroleum royalty payable for the previous royalty return period is a reference to the amount worked out under section 45 (2) .
The revenue commissioner may remit the whole or part of the civil penalty.
The remission must be made by assessment.
In this section—
current royalty return period see section 45 (1) (a) .
section 45 election means an election under section 45 (3) to change the amount payable for the first month or the second month, or both, of the current royalty return period.
(sec.55-ssec.1) This section applies if a petroleum producer makes a section 45 election and either— the petroleum royalty payable for the current royalty return period exceeds the petroleum royalty payable for the previous royalty return period by an amount that is more than 15% of the petroleum royalty payable for the previous royalty return period; or both of the following apply— the petroleum royalty payable for the current royalty return period is less than the petroleum royalty payable for the previous royalty return period; the total of the petroleum royalty payable for the first month and the second month of the current royalty return period is less than 50% of the total petroleum royalty payable for the current royalty return period.
(sec.55-ssec.2) The producer is liable to the State for an amount ( civil penalty ) equal to 25% of the default estimate difference, if any, for each month of the current royalty return period for which the producer makes the section 45 election.
(sec.55-ssec.3) For subsection (2) , the default estimate difference for a month of the current royalty return period is the difference between— the amount that would have been payable for the month under section 43 if the producer had not made the section 45 election; and the amount payable for the month under the section 45 election.
(sec.55-ssec.4) However, if the amount mentioned in subsection (3) (a) is less than the amount mentioned in subsection (3) (b) , the default estimate difference for the month is taken to be 0.
(sec.55-ssec.5) Subsection (6) applies if, for petroleum royalty payable for the current royalty return period, an assessment is made under the Taxation Administration Act 2001 .
(sec.55-ssec.6) For subsection (1) , the petroleum royalty payable for the current royalty return period is the amount of petroleum royalty payable taking into account the assessment.
(sec.55-ssec.7) For subsection (1) , a reference to the petroleum royalty payable for the previous royalty return period is a reference to the amount worked out under section 45 (2) .
(sec.55-ssec.8) The revenue commissioner may remit the whole or part of the civil penalty.
(sec.55-ssec.9) The remission must be made by assessment.
(sec.55-ssec.10) In this section— current royalty return period see section 45 (1) (a) . section 45 election means an election under section 45 (3) to change the amount payable for the first month or the second month, or both, of the current royalty return period.
(a) the petroleum royalty payable for the current royalty return period exceeds the petroleum royalty payable for the previous royalty return period by an amount that is more than 15% of the petroleum royalty payable for the previous royalty return period; or
(b) both of the following apply— (i) the petroleum royalty payable for the current royalty return period is less than the petroleum royalty payable for the previous royalty return period; (ii) the total of the petroleum royalty payable for the first month and the second month of the current royalty return period is less than 50% of the total petroleum royalty payable for the current royalty return period.
(i) the petroleum royalty payable for the current royalty return period is less than the petroleum royalty payable for the previous royalty return period;
(ii) the total of the petroleum royalty payable for the first month and the second month of the current royalty return period is less than 50% of the total petroleum royalty payable for the current royalty return period.
(i) the petroleum royalty payable for the current royalty return period is less than the petroleum royalty payable for the previous royalty return period;
(ii) the total of the petroleum royalty payable for the first month and the second month of the current royalty return period is less than 50% of the total petroleum royalty payable for the current royalty return period.
(a) the amount that would have been payable for the month under section 43 if the producer had not made the section 45 election; and
(b) the amount payable for the month under the section 45 election.
More sections below
Source text: opening excerpt
Sourced from Queensland Legislation (legislation.qld.gov.au), CC BY 4.0.
pt.1 Preliminary
Preliminary
sec.1 Short title
sec.1 Short title
This regulation may be cited as the Petroleum and Gas (Royalty) Regulation 2021 .
sec.2 Commencement
sec.2 Commencement
This regulation commences on 1 September 2021.
sec.3 Dictionary
sec.3 Dictionary
The dictionary in schedule 1 defines particular words used in this regulation.
pt.2 Petroleum royalty
Petroleum royalty
pt.2-div.1 Preliminary
Preliminary
sec.4 Purpose of part
sec.4 Purpose of part
This part prescribes—
for section 590 (2) (a) of the Act , the time on or before which petroleum royalty must be paid; and
for section 590 (2) (b) of the Act , the way in which petroleum royalty is calculated; and
for section 590 (2) (c) of the Act , the rate at which petroleum royalty is payable.
(a) for section 590 (2) (a) of the Act , the time on or before which petroleum royalty must be paid; and
(b) for section 590 (2) (b) of the Act , the way in which petroleum royalty is calculated; and
(c) for section 590 (2) (c) of the Act , the rate at which petroleum royalty is payable.
sec.5 Definitions for part
sec.5 Definitions for part
In this part—
average hedge settlement rate , for a royalty return period, means the average, worked out for the royalty return period, of the hedge settlement rates for each day in the royalty return period.
domestic gas see section 6 .
gas means petroleum in a gaseous state at standard temperature and pressure.
hedge settlement rate , for a day, means the WM/Reuters Australian Fix 10.00a.m. rate on the day.
independent buyer , in relation to a petroleum producer or a reseller for the producer, means a person who is not a relevant entity for the producer.
liquid petroleum see section 9 .
LNG means liquefied natural gas.
LNG project means an LNG project under a determination of the revenue commissioner under section 10 .
LNG project buyer , in relation to a petroleum producer or a reseller for the producer, means a person who the producer or reseller knows is a member of an LNG project because—
the person has, under section 12 (2) , given the producer or the reseller a notice stating that the person is a member of the LNG project; or
the revenue commissioner has, under section 12 (4) , told the producer or the reseller that the person is a member of the LNG project.
member , of an LNG project, means a member of an LNG project under a determination of the revenue commissioner under section 10 .
oil means petroleum in a liquid state.
project gas see section 8 .
standard temperature and pressure means an absolute pressure of 101.325kPa at a temperature of 15ºC.
supply gas see section 7 .
To remove any doubt, it is declared that, for this part, a reference to a petroleum producer includes a participant in a joint venture, or other arrangement, involving the production of petroleum who is taken to be a petroleum producer under section 590 (4) of the Act .
(sec.5-ssec.1) In this part— average hedge settlement rate , for a royalty return period, means the average, worked out for the royalty return period, of the hedge settlement rates for each day in the royalty return period. domestic gas see section 6 . gas means petroleum in a gaseous state at standard temperature and pressure. hedge settlement rate , for a day, means the WM/Reuters Australian Fix 10.00a.m. rate on the day. independent buyer , in relation to a petroleum producer or a reseller for the producer, means a person who is not a relevant entity for the producer. liquid petroleum see section 9 . LNG means liquefied natural gas. LNG project means an LNG project under a determination of the revenue commissioner under section 10 . LNG project buyer , in relation to a petroleum producer or a reseller for the producer, means a person who the producer or reseller knows is a member of an LNG project because— the person has, under section 12 (2) , given the producer or the reseller a notice stating that the person is a member of the LNG project; or the revenue commissioner has, under section 12 (4) , told the producer or the reseller that the person is a member of the LNG project. member , of an LNG project, means a member of an LNG project under a determination of the revenue commissioner under section 10 . oil means petroleum in a liquid state. project gas see section 8 . standard temperature and pressure means an absolute pressure of 101.325kPa at a temperature of 15ºC. supply gas see section 7 .
(sec.5-ssec.2) To remove any doubt, it is declared that, for this part, a reference to a petroleum producer includes a participant in a joint venture, or other arrangement, involving the production of petroleum who is taken to be a petroleum producer under section 590 (4) of the Act .
Returns, timing and instalments: royalty returns must be lodged with the revenue commissioner in the approved form (ss 33-35). The default periodicity is calendar quarter for holders of petroleum leases or historic 1923 Act leases, otherwise a financial year, with scope for the revenue commissioner to change this having regard to likely royalty amounts (s 36). Deadlines are set (s 37), and the regulation specifies quarterly instalment mechanics for calendar-quarter reporters with two interim instalments and a final lodgement-day instalment (s 41), including calculation rules for those instalments (ss 43-45) and administrative powers to alter instalment timing (ss 42, 38).
Compliance tools and enforcement levers: late lodgement attracts a prescribed fee (s 39). There is unpaid tax interest treatment linked to the Taxation Administration Act timelines (s 56). A civil penalty regime targets inaccurate voluntary instalment elections (s 55). The revenue commissioner has wide powers to request supporting information (s 53), to make determinations about swap arrangements (s 54) and to reassess amounts where new LNG-project-related determinations are made (s 11).
Joint ventures and non-tenure producers: non-tenure participants in joint ventures may apply to be treated as the petroleum producer in relation to a stated portion of production for royalty purposes (ss 47-49). The regulation sets application details, consent requirements and the legal effects if granted (s 48).
Transitional treatment: the regulation replaces and maps a range of provisions from the expired 2004 regulation into the new instrument and preserves in-flight notices, elections and determinations (pt 3, ss 57-100). The regulation commenced on 1 September 2021 (s 2).
The practical result is that royalty payable is a function of (a) a producer’s sales mix by buyer type (independent versus not; LNG project buyer or not), (b) the volume sold, (c) benchmark price mechanics that use Brent or Wallumbilla and hedge settlement rates, and (d) election and administrative mechanics that can substitute benchmark prices for computed ASPs when certain conditions or revenue commissioner decisions apply (see ss 17-18, 21-23, 26-28, 31-32). The revenue commissioner is given multiple discretionary levers (determinations, notices, reassessments, remissions, publication duties) that shape when the formulas are applied and when benchmarks substitute for market data (e.g. ss 10-11, 18, 23, 28, 32, 38, 42, 54).
Main concepts
This regulation organises royalty liability around a few legal-technical concepts that determine classification, valuation and timing.
Commodity classification: the regulation divides petroleum into gas (gaseous at standard temperature and pressure) and oil (liquid petroleum) (s 5; s 9). Gas produced in a royalty return period is further classified into domestic gas, supply gas or project gas depending on who buys it, whether the producer is a member of an LNG project, whether it is flared/used/vented or stored, and whether the buyer is an LNG project buyer (ss 6-8). The definitions affect which ASP formula and rate schedule apply (see ss 16, 20, 25).
Buyer types and sales categories: “independent buyer” means a person who is not a relevant entity for the producer (s 5). “LNG project buyer” is defined by notice to the producer or reseller, or notice from the revenue commissioner (s 5; s 12). The ASP formulas separately aggregate revenue/volume from sales to independent buyers (AR/AV) and use deemed values for sales to non-independent buyers (DS/DV) (ss 17, 21, 26, 31). The treatment of resellers is explicit: sales can be direct or indirect through resellers (ss 6(1), 17-18).
ASP and deemed sales value: for each category the ASP is computed as ASP = (AR + DS) / (AV + DV) where AR/AV capture revenue and volume from sales to independent buyers, and DS/DV represent deemed revenue and volumes from non-independent sales. DS is computed as BP × DV, so the benchmark feeds directly into valuations for related-party or intra-project sales (ss 17(1)-(2), 21(1)-(2), 26(1)-(2), 31(1)-(2)).
Benchmarks and currency conversion: for supply and project gas and for liquid petroleum, the benchmark is derived from the average Europe Brent Spot Price FOB (Dollars per Barrel) for the relevant prior “relevant period”, converted to Australian dollars at the average hedge settlement rate for the royalty return period (ss 14, 22, 27, 29). For domestic gas, the benchmark is the firm End of Day Wallumbilla Benchmark Price averaged over the period (s 15). Hedge settlement rate is the WM/Reuters Australian Fix 10.00 a.m. rate (s 5).
Timing windows: “relevant period” for benchmark calculations is fixed as the period starting 4 months before the start of the royalty return period (s 14). This ties the BP for a royalty return period to a pre‑specified historic window and the average hedge settlement rate for the royalty return period (s 22, s 27).
Elections and administrative substitution: producers may elect to have average sales price for a period be the benchmark price for that period rather than computing ASP from transactional data (ss 18, 23, 28, 32). The election mechanism has start and continuing effect rules and the revenue commissioner may end an election or require benchmarks where information is missing or for protection of public revenue (ss 18(3)-(6), 23(3)-(6), 28(3)-(6), 32(3)-(6)).
Instalment mechanics and election to vary prepayments: for calendar-quarter returners, instalment amounts for months 1 and 2 default to one third of the total royalty for the previous period (s 43), but producers may elect to change amounts under s 45 based on reasonable belief, subject to later revenue commissioner correction and potential civil penalty under s 55 if the election produces large discrepancies.
Joint-tenure election: a non-tenure participant in a joint venture can apply to be treated as the petroleum producer in relation to a stated portion of production (ss 47-49). The application is subject to tenure-holder consent and revenue commissioner satisfaction that the public revenue is not prejudiced (s 48).
Swap arrangements: the revenue commissioner may make a determination for swap arrangements, including classification and ASP methodology for swapped volumes (s 54). Determinations must be published (s 54(3)).
These concepts interact: classification affects which ASP formula applies; the ASP formula depends on accurate identification of buyer types and volumes; deemed values convert intra-group or affiliate sales to BP-based values that can materially alter ASP; elections and revenue commissioner decisions can replace transactional ASPs with BP; timing rules and instalments create cash-flow and compliance sequencing obligations. The revenue commissioner’s ability to require benchmark substitution (e.g. s 18(1)(b)-(d)) is a key lever that both substitutes for missing/opaque market data and changes the producer’s arithmetic exposure.
Who it affects
The regulation targets a specific set of commercial actors and allocates obligations accordingly.
Petroleum producers: primary taxpayer and reporting entity. The regulation takes a reference to “petroleum producer” to include participants in joint ventures who are taken to be petroleum producers under the Act (s 5(2)). Producers must lodge royalty returns (s 34), calculate ASPs and royalties for each category (div 3: ss 16-32), provide royalty estimates on request (ss 50-53), respond to revenue commissioner information notices (s 53), and comply with instalment and payment timing (ss 41-43, 56).
Resellers: sales “indirectly by the producer through 1 or more resellers for the producer” are treated as producer sales for many calculation and reporting purposes (ss 6(1), 17(1), 21(1), 26(1), 31(1)). Resellers are therefore an operational extension of producers for allocation and valuation purposes.
LNG project members and buyers: members of LNG projects are both objects of revenue-commissioner determinations under s 10 and actors with duties: an LNG project buyer who purchases gas from a non-member producer must, “as soon as reasonably practicable after the purchase”, notify the producer or reseller of their project status (s 12(2)). Producers and resellers rely on those notices or revenue-commissioner notices to identify LNG project buyers for classification (s 5).
Independent buyers and related entities: identification of independent buyers is fundamental to the ASP calculations (ss 17, 21, 26, 31). The independent buyer concept affects whether actual transactional revenue counts in AR/AV or whether a deemed sales value (BP × DV) is used. Entities that are “relevant entities” for the producer (i.e. related parties) are treated as non-independent buyers.
Non-tenure participants in joint ventures (non-tenure holders): these persons may apply to be treated as the petroleum producer in relation to a specified portion of production (s 48). If the revenue commissioner grants the application, the non-tenure holder acquires the reporting and payment consequences described in s 48(9).
Revenue commissioner (administration): the revenue commissioner decides LNG project determinations (s 10), may reassess (s 11), may require earlier lodgement for public-revenue protection (s 38), may issue quarterly payment notices or withdraw them (s 42), may estimate prior-period royalties where returns are missing (s 44), may make swap determinations (s 54), and may remit fees and penalties (ss 39(4), 55(8)-(9)). The regulation therefore places significant administrative discretion and decision-making responsibility on the revenue commissioner.
Purchasers: a purchaser who is a member of an LNG project and fails to notify will face an offence exposure , maximum 100 penalty units (s 12(2)).
Third parties to LNG projects: persons that are “relevant entities” for petroleum producers function differently under the formulas; the regulation explicitly captures when sales to members or relevant entities are to be treated as at deemed value (ss 17(2), 21(2), 26(2), 31(2)).
Who ultimately pays in money terms is the producer, but the regulation creates information duties that fall on purchasers (s 12), tenure holders and non-tenure holders in joint ventures (ss 48-49), and resellers. The regulatory architecture therefore distributes reporting costs across the production and marketing chain: producers must capture buyer identity and relationship status, resellers must provide sales data appropriate to the producer’s ASP calculations, purchasers who are LNG project members must notify, and the revenue commissioner may require additional information on demand (s 53).
Key duties and rights
The regulation allocates a set of operational duties and corresponding rights affecting producers, resellers, purchasers and the revenue commissioner.
Duties imposed on petroleum producers
Return lodgement and formality: lodge royalty returns with the revenue commissioner in the approved form (ss 33-35). Periodicity is set by default or by decision: calendar quarter for petroleum lease/1923 Act lease holders, otherwise financial year; the revenue commissioner may change this for particular producers (s 36). Returns relating to a financial year must be lodged within three months after year end; calendar-quarter returns must be lodged by the last business day of the month after the quarter ends (s 37).
Payment and instalments: pay petroleum royalty for the period on the volumes produced at rates set for each commodity class (ss 16, 20, 25, 30). For quarter reporters the regulation prescribes two interim instalments and a final instalment on lodgement day (s 41). Producers must also lodge an approved form when making instalment payments (s 41(2)).
Calculation and supporting data: compute average sales prices using the specified ASP formulas per commodity class and the benchmark definitions per s 22/27/29; keep and, on request, provide details supporting AR/AV/DS/DV calculations and volumes (ss 17, 21, 26, 31; s 53).
Notices: provide notifications for royalty-estimate requirements (s 51-52), respond to revenue commissioner requests for supporting information by the stated day (s 53), and give notices when joint-venture participation changes (s 13).
Elections: may elect to use benchmark prices for ASP in a return (ss 18(3), 23(3), 28(3), 32(3)) and may elect to change instalment amounts for quarter periods under s 45, provided requirements for form and timing are met (s 45(3)-(5)). Elections continue until ended by the revenue commissioner unless the producer applies to end them (ss 18(4)-(6), 23(4)-(6), 28(4)-(6), 32(4)-(6)).
Duties imposed on purchasers and other market participants
LNG-member purchasers: if a person who is a member of an LNG project purchases gas from a non-member producer/reseller, they must, as soon as reasonably practicable, give the producer/reseller a notice that they are a member (s 12(2)). Failure is punishable by a maximum of 100 penalty units (s 12(2)).
Resellers: treated as conduits for sales when the producer sells indirectly through resellers; their sales data feed into producer ASP calculations (ss 6, 17, 21, 26, 31).
Revenue commissioner powers and producer rights against administration
Determination and notice powers: may determine LNG projects and members (s 10) and must give notice of determinations including description and tenures (s 10(4)-(6)). May amend or revoke determinations and may set the effective date to be earlier than the decision date (s 10(7)-(9)). May tell producers/resellers that particular persons are LNG project members (s 12(4)).
Reassessment and refund duty: if the revenue commissioner makes or changes an LNG-project determination and previously assessed royalty without regard to the new decision, the revenue commissioner must reassess under the Taxation Administration Act and, where necessary, remit penalty tax, unpaid tax interest or civil penalty to the extent they are attributable only because of the earlier assessment (s 11).
Administrative discretion over benchmarks and elections: may decide that the benchmark price applies (replace computed ASP) for protection of the public revenue in defined circumstances (ss 18(1)(d), 23(1)(d), 28(1)(d), 32(1)(d)). The revenue commissioner may also end producer elections and give notice (ss 18(6)-(8), 23(6)-(8), 28(6)-(8), 32(6)-(8)).
Payment timing authority: may require earlier lodgement for protection of the public revenue (s 38), may issue quarterly payment notices changing instalment timetable (s 42), and may withdraw such notices (s 42(3)).
Estimation and substitution: if previous-period returns are missing or not comparable, the revenue commissioner may estimate the prior period royalty for instalment calculations (s 44).
Information-demand and compliance tools: may ask for information to support royalty estimates (s 53) and may make determinations about swap-arrangement treatment and publish them (s 54(1)-(3)).
Remission rights: may remit late‑lodgement fee (s 39(4)) and civil penalties (s 55(8)-(9)).
Penalties, interest and administrative charges
Late lodgement fee: prescribed fee is 206.70 fee units; remission possible (s 39).
Civil penalty for instalment elections: s 55 creates a civil-penalty exposure equal to 25% of the “default estimate difference” for each month the s 45 election is used in specified circumstances (s 55(2)-(4)).
Statutory interest: unpaid tax interest accrues on unpaid instalments and unpaid balances per mechanisms tied to the Taxation Administration Act (s 56).
Rights to apply and to be heard
Non-tenure holders can apply to be treated as producers for specific amounts under joint-venture tenures (s 48). The revenue commissioner must decide and give notice; a refusal requires reasons in the notice (s 48(4), (7)-(8)). Either tenure or non-tenure holders may apply to end election periods (s 49) and the revenue commissioner must give notice of decisions (s 49(4)-(8)).
Record-keeping and formality rights are implicit in the requirement that returns and estimates be in approved forms and that supporting information be provided on notice (ss 35, 51-53). The regulation thus ties monetary duties to documentary and evidential duties that producers and related market participants must observe.
Penalties and enforcement
The regulation sets out monetary penalties, administrative fees, interest mechanics and enforcement pathways, and it ties them into the Taxation Administration Act 2001 for assessment and remission processes.
Monetary and administrative charges
Late lodgement fee: if a royalty return is not lodged by the required day there is a prescribed fee of 206.70 fee units (s 39(1)-(2)). The regulation gives an express power for the revenue commissioner to remit all or part of the fee and requires remission to be effected by assessment under the Taxation Administration Act 2001 (s 39(4)-(5)). The regulation also prescribes rounding rules for conversion to dollars (s 39(6)).
Civil penalty for instalment elections: s 55 introduces a civil penalty where a producer makes an s 45 election to vary instalment amounts and subsequent outcomes meet specified tests. Two alternative triggering conditions are set out in s 55(1): either (a) the current royalty exceeds the previous royalty by more than 15%, or (b) the current royalty is less than the previous royalty and the sum of the two interim instalments under the election is less than 50% of the total royalty. If triggered, the producer is liable to the State an amount equal to 25% of the default estimate difference for each month of the current royalty return period for which the s 45 election was made (s 55(2)-(3)). The revenue commissioner may remit the whole or part of the civil penalty by assessment (s 55(8)-(9)).
Offence for LNG-project purchaser non-notification: a person who is a member of an LNG project and purchases gas from a non-member producer or reseller must give notice “as soon as reasonably practicable”; failure attracts a maximum penalty of 100 penalty units (s 12(2)-(3)). The revenue commissioner may also notify the producer of LNG project membership (s 12(4)).
Interest on unpaid amounts: unpaid tax interest accrues in line with the Taxation Administration Act s 54 rules as applied here. Section 56 specifies the accrual periods for unpaid instalment amounts and for unpaid balances after the lodgement day. For example, if an interim instalment is unpaid the accrual starts the day after the instalment due date and runs to the earlier of the full payment date or lodgement day; for unpaid balances post-lodgement, interest accrues from the day after lodgement day until full payment (s 56).
Reassessments and refunds: where the revenue commissioner makes, amends or revokes an LNG-project determination after having made a tax assessment without regard to that decision, the revenue commissioner must reassess under the Taxation Administration Act; the commissioner is obliged to refund any excess and must remit any relevant liabilities (penalty tax, unpaid tax interest, civil penalty) to the extent they are payable solely because of the earlier assessment (s 11(2)-(4)).
Enforcement instruments: the Taxation Administration Act framework governs assessment issuance, collection, interest and remission procedures cross-referenced by ss 11, 39 and 56. The revenue commissioner’s notices and decisions carry administrative effect; for example, a quarterly payment notice under s 42 can change when royalty is payable.
Administration and discretion
Wide discretionary powers: the revenue commissioner exercises a broad set of discretionary powers that interact with enforcement: making determinations (s 10), amending/revoking determinations (s 10(7)), requiring earlier lodgement (s 38), estimating prior‑period royalty for instalment purposes (s 44), applying benchmark prices where necessary to protect the public revenue (ss 18(1)(d), 23(1)(d), 28(1)(d), 32(1)(d)), and remitting fees/penalties (ss 39(4), 55(8)-(9)). Each of these discretionary decisions can change the quantum or timing of payment that produces interest/penalty consequences.
Procedural protections: the regulation requires notice to the affected producer of many decisions (s 10(4)-(6); s 11 requires reassessment and references Taxation Administration Act part 4 for refunds; notices are required for ending elections ss 18(6)-(7), 23(6)-(7), 28(6)-(7), 32(6)-(7); s 48 requires reasons on refusal). The revenue commissioner must publish determinations about swap arrangements (s 54(3)). For remissions and reassessments, the Taxation Administration Act procedural framework applies.
Administrative compliance enforcement: information notices under s 53 are mandatory; a producer “must provide” the requested information by the day stated. Failure to provide data will expose the producer to administrative measures, including the revenue commissioner substituting benchmark values or making estimations.
Operational implications
Cash-flow and error risk: s 41 instalment rules create regular cash outflows that, if misestimated, may attract civil penalty under s 55, or unpaid tax interest under s 56. s 55’s formula (25% of the default estimate difference per month) can generate significant additional liability if interim instalments are materially understated.
Data integrity exposure: many enforcement hooks (reassessment under s 11, substitution to BP under ss 18/23/28/32, information notices s 53) are keyed to the availability and quality of transactional and counterparty information. The deeming rules for non-independent sales (DS = BP × DV) mean that failing to demonstrate independence for buyers shifts valuation to BP and can change royalties and therefore interest/penalties.
The regulation therefore combines fixed monetary sanctions (fee, penalty units for a purchaser failure) with variable penalties (civil penalty by calculation, unpaid interest) and administrative reassessments and remissions executed through the Taxation Administration Act framework.
How it interacts with other laws
The regulation is constructed to operate as a subordinate instrument to the Petroleum and Gas (Royalty) Act and to interlink with the Taxation Administration Act 2001 and other statutory machinery. The text explicitly cross‑references and relies upon those statutes for enforcement, assessment and procedural processes.
Primary interactions with the Act
The regulation implements, for the purposes of specific subsections of the Act, the rules for payment timing, calculation and rates under s 590(2) of the Act (s 4). It also prescribes requirements for royalty returns under s 592A and for royalty estimates under s 593 of the Act (s 33; s 50). Sections of this regulation assume and build on tax liabilities and exemptions created by the Act, for example sections 591 and 591A of the Act (s 48(9)(d) references those provisions when treating non‑tenure holders as taxpayers).
Several administrative mechanisms in this regulation flow to or from the Act: s 34 requires lodgement with the revenue commissioner under the Act; s 11 requires reassessment under the Taxation Administration Act where the revenue commissioner’s LNG-project determinations are made after prior assessments of royalty under the Act.
Integration with the Taxation Administration Act 2001
Assessment, refund and remission procedures: s 11 instructs reassessment under the Taxation Administration Act 2001 and points readers to part 4 of that Act for refund obligations. The late-lodgement fee and the manner of remission (s 39(4)-(5)) are effected by assessment under the Taxation Administration Act (s 39(4)-(5)). Civil penalties remitted under s 55 must be remitted by assessment; Taxation Administration Act processes will govern challenges and collection.
Interest and lodgement day definitions: unpaid tax interest accrual for instalments and balances is worked out in accordance with the Taxation Administration Act s 54, as applied by s 56 of this regulation (s 56(1)-(3)). The definition of lodgement day for interest purposes ignores extensions under Taxation Administration Act s 151 (s 56(4)).
Timing of payment: the time by which the prescribed fee is payable is fixed by reference to the making of an assessment under the Taxation Administration Act (s 39(3)).
Acts Interpretation Act 1954 and technical conversion
Fee conversion: s 39(6) references Acts Interpretation Act s 48C(3) for working out the dollar amount of a fee expressed in fee units and requires rounding down to the nearest five cents.
Transitional and savings interactions
The regulation replaces the expired Petroleum and Gas (Royalty) Regulation 2004 and contains a detailed set of transitional provisions (pt 3, ss 57-100) that preserve, translate or save decisions, applications and notices made under the expired regulation. For example, existing LNG-project determinations under the expired regulation are taken to be determinations under s 10 (s 59), former notices to purchasers under the old section are taken to be notices under s 12 (s 61), and a raft of existing elections and revenue-commissioner decisions are carried over (e.g. ss 64-79). Section 100 further provides that references to the expired regulation in existing documents may be read as references to the new regulation unless the context requires otherwise.
Interaction with commercial contracts and market markers
Swap arrangements and market hedges: s 54 allows the revenue commissioner to determine how the part applies to swap arrangements and to publish determinations. Benchmarks for gas and oil reference the Europe Brent Spot Price and Wallumbilla market price and use the WM/Reuters Australian Fix rate for currency conversion (ss 5, 15, 22, 27, 29). This ties royalty outcomes to standard market indices and hedging rates, which will interact with producers’ commercial hedging contracts and swap arrangements. The regulation gives the commissioner discretion to decide appropriate valuation treatment for swaps (s 54).
Joint venture arrangements and tenure law: s 48 disrupts the default mapping from tenure holder to royalty taxpayer by allowing non-tenure participants to elect to be taken as the petroleum producer for specified portions of production. That election interacts with petroleum tenure law and the Act’s allocation of obligations under ss 591 and 591A (s 48(9)(d)-(e)).
Procedural and administrative law implications
The regulation’s many notice and decision requirements embed administrative-law elements (notices of decisions, reasons on refusals s 48(8), publication duties s 54(3)). Reassessment powers and remissions are to be carried out under the Taxation Administration Act, bringing its objection and review mechanisms into play. The revenue commissioner’s discretion to substitute BP for a computed ASP for protection of public revenue (ss 18(1)(d), 23(1)(d), 28(1)(d), 32(1)(d)) is therefore an administrative lever that may be subject to procedural fairness and review considerations under general administrative law, although the regulation does not itself set internal appeal steps for those decisions beyond the central reassessment and notice requirements.
Overall, the regulation is tightly coupled to the Act and to the Taxation Administration Act and uses market indices and hedging rates as valuation inputs, thereby creating a technical interface with producers’ commercial contracts, swaps and hedging arrangements. The transitional provisions preserve continuity with the expired regulation.
Amendment history
The text of the regulation shows a single explicit amendment notation within the document: section 39 was amended by 2022 SL No. 53 s 12 (see s 39 end note). That amendment is recorded inline in the copy provided: “s 39 amd 2022 SL No. 53 s 12.” No other amendment instruments are named in the regulation text provided.
Mechanically the regulation itself replaced the expired Petroleum and Gas (Royalty) Regulation 2004 and contains an extensive transitional part (pt 3, ss 57-100) to carry over determinations, notices, elections and applications in flight at commencement. The transitional schedule enumerates many classes of saved or translated instruments, for example:
Existing revenue-commissioner notices and determinations under the expired regulation are taken to be notices and determinations under corresponding provisions of the new regulation (s 58).
Existing LNG-project determinations under s 139 of the expired regulation are taken to be determinations under s 10 of the new regulation (s 59).
Existing obligations to give notices under the expired regulation remain enforceable if they were in effect immediately before commencement (s 60, s 62).
Existing elections under the expired regulation to apply benchmark prices for domestic gas, supply gas, project gas or liquid petroleum are taken to be elections under the corresponding new sections (s 64, s 68, s 72, s 76).
A variety of pending applications and in-effect revenue-commissioner notices under the expired regulation are treated as having been made or given under corresponding provisions in the new regulation, including royalty-period decisions, instalment notices, joint-venture election applications, and swap determinations (ss 80-97).
Commencement and replacement
The regulation commenced on 1 September 2021 (s 2), replacing the previous 2004 regulation with transitional continuity preserved through pt 3.
Limitations on amendment reporting in this source
The instrument text provided records only one named external amending instrument (the 2022 SL entry against s 39). The regulation’s own content contains detailed transitional mapping to the expired regulation. No other statutory instrument references, roll-call of legislative amendments, or historical versions are included in the source text supplied.
If you need an official amendment chronology beyond the single notation for s 39, check the territory’s legislation register or Gazette for instruments amending this regulation and for the precise text of 2022 SL No. 53 s 12. The regulation itself incorporates continuity by mapping legacy instruments into the new structure (pt 3).
Litigation history
The regulation text supplied contains no references to judicial decisions, litigation or case law. It does not name any cases or report any judicial interpretation or challenge. Consequently, there is no litigation history contained within this instrument to cite.
That absence in the source means two things for a practitioner's analysis:
There are no source-identified precedents or appellate interpretations embedded in the regulation’s text to guide disputes over statutory meaning. Any litigation or tribunal history must therefore be researched outside the regulation text , for example, in court databases, tribunal records or the revenue commissioner's published decisions.
The regulation creates multiple points where disputes are plausibly likely to arise, because it allocates substantial money and considerable administrative discretion. The source contains mechanisms that commonly generate contestation: e.g. membership determinations under s 10, revenue-commissioner substitution of benchmark prices for computed ASPs under ss 18/23/28/32, joint-venture allocation decisions under ss 48-49 and reassessments under s 11. Although no cases are named in the text, these provisions identify the concrete loci where litigation risk is concentrated.
Possible litigation vectors implicit in the text (no case names provided in the source)
Classification disputes: whether particular volumes constitute domestic gas, supply gas or project gas (ss 6-8) as that classification drives rates and valuation methods.
LNG project determinations and membership: reviews of s 10 determinations (who are members; scope of a petroleum venture) and the effective day of determinations where the revenue commissioner may set an effective date earlier than the decision date (s 10(9)).
Benchmarks and ASP substitution: challenges to a revenue-commissioner decision to apply benchmark prices under the “protection of public revenue” test (ss 18(1)(d), 23(1)(d), 28(1)(d), 32(1)(d)); challenges to how BP is calculated (s 22, s 27).
Reassessments and remissions: disputes about recalculation of liability after an LNG-project determination and the scope of the revenue-commissioner’s duty to remit liabilities only to the extent they are payable because of the earlier assessment (s 11).
Joint-venture election outcomes: review of s 48 application refusals or of s 49 decisions to end an election period, including whether the revenue commissioner properly applied the “not adversely affect the protection of the public revenue” standard.
Civil-penalty liability under s 55: quantification and procedural fairness in assessing civil penalties and any remission decisions.
Because the source contains no cases, any practitioner needing precedent must search beyond the instrument , judicial databases, tax and administrative law reports, and revenue-commissioner published decisions. The statutory architecture creates predictable areas of contestation, but the regulation text itself records no litigation history.
Gotchas
The regulation contains a number of technical traps and practical points where misinterpretation or operational failure can have material financial consequences. These “gotchas” are derived from the textual mechanics and the ways definitions and administrative discretions interact.
Unit and currency precision matters
Volume conversions: gas, LNG and domestic/supply/project gas volumes are to be converted to gigajoules; oil is measured in barrels (s 14). Errors in unit conversion between standard industry measures (e.g. MMBtu, therms) and gigajoules will directly affect ASP and royalty quantum.
Pricing units and small decimals: the rates are stated in cents per gigajoule or cents per barrel with fractional cents embedded in the schedules (e.g. “0.02 cents per gigajoule for each 1 cent per gigajoule more than $0” in s 16). When programming calculations, ensure the correct units (cents vs dollars) and decimal placement; a misplaced decimal will miscompute royalties materially.
Buyer classification is determinative
Whether a buyer is an independent buyer (s 5) or an LNG project buyer (s 5; s 12) changes whether AR/AV or DS/DV apply. Producers must track buyer relationships and relevant‑entity status continuously across resellers and through indirect sales, because deemed sales values for non-independent sales are BP × DV (ss 17(2), 21(2), 26(2), 31(2)). A failure to maintain robust counterparty records will trigger BP substitution or revenue-commissioner scrutiny.
Deemed sales value uses benchmark and can be price-dispositive
Sales to related parties or project members may be valued not at transaction price but at BP × volume (ss 17(2), 21(2), 26(2), 31(2)). If the BP differs materially from commercial transfer prices, this can increase or decrease ASP and therefore royalty and tax exposure. Producers must model the impact of deemed valuations and maintain documentation justifying buyer independence to avoid BP application.
Benchmark timing and hedge-rate conversion complexity
Benchmarks for supply/project gas and liquid petroleum use Europe Brent averaged for the “relevant period”, converted at the average hedge settlement rate for the royalty return period (ss 14, 22, 27, 29). That inter-temporal mapping (a window starting four months before the royalty return period) can produce divergences from contemporaneous spot prices; producers that hedge or swap may find the BP does not align with contract economics unless swap arrangements are covered by a revenue-commissioner determination (s 54).
Elections bind unless ended by revenue commissioner
A producer election to use the benchmark price takes effect on the first day of the royalty return period of the return in which the election is made and continues until the revenue commissioner ends it (s 18(3)-(6); see parallel provisions for other commodity classes). The revenue commissioner may end an election only if it considers doing so appropriate, having regard to matters including protection of the public revenue (s 18(6)). Producers must therefore understand that an election is not a short-term convenience; it has continuing effect until ended.
Instalment election risk and civil-penalty formula
Section 45 enables a producer to elect smaller instalments on a reasonable-belief basis. Section 55 imposes a civil penalty if an election is used and eventual outcomes meet particular variance tests (s 55(1)-(3)). The civil penalty equals 25% of the default estimate difference for each month the election applied , a formula that can amplify errors in forecasting. Producers must retain contemporaneous evidence supporting the “reasonable belief” underlying an s 45 election in case the revenue commissioner considers it unsupported (s 46 permits the commissioner to require use of s 43 calculations if belief is considered unreasonable).
Joint-venture non-tenure-holder election can create overlapping liabilities
If the revenue commissioner grants a s 48 application taking a non-tenure holder to be the petroleum producer for a stated amount, s 48(10) explicitly states that nothing in the section affects the tenure holder’s liability to pay royalty on that amount if the non-tenure holder does not pay. That creates potential double-collection risk; the non-tenure holder gains reporting and taxpayer status but the tenure holder remains a contingent payer if the non-tenure holder defaults (s 48(10)). Contracts should therefore allocate payment risk clearly.
Revenue-commissioner discretion is broad and can be applied retroactively
The revenue commissioner may give determinations with effect on a day before the decision is made (s 10(9)), may require earlier lodgement (s 38), may substitute BP where information is missing or for public-revenue protection (ss 18(1)(b), (d); 23(1)(b), (d); 28(1)(b), (d); 32(1)(b), (d)), and may make swap determinations (s 54). These discretions can change liability unexpectedly if producers are not proactive in information supply and in engaging with the revenue commissioner.
Swap arrangements require proactive engagement
The regulation allows the revenue commissioner to determine how swap arrangements are to be treated (s 54). Producers using swaps to match volumes or to manage quality/quantity mismatches should seek a determination or at least be ready to explain swap economics to the revenue commissioner, because swap volumes may otherwise be reclassified for ASP purposes.
Form and notice technicalities carry sanctions
Many duties require using the “approved form” (ss 35, 45(4), 48(3), 49(3), 51-53). Failure to use the approved form, to lodge by the specified date (s 37; s 38 notices can shorten timeframes), or to supply supporting information on notice (s 53) can expose a producer to late fees, interest and substitution of BP for transactional ASP.
Transitional mapping can carry legacy obligations forward
The transitional part carries many in-flight obligations from the expired 2004 regulation into the new regime (pt 3). Practitioners should review prior notices, elections and pending applications under the expired regulation for any continuing effect under the new instrument (see ss 58-97).
Fee conversion rounding quirk
s 39(6) requires rounding down to the nearest 5 cents when converting fee units to dollars under the Acts Interpretation Act. The numerical example in s 39(6) shows that the final dollar amount is rounded down, not rounded to nearest. Small rounding differences may matter at scale or in automated billing systems.
For each “gotcha” above, the relevant statutory cross-references are provided so the practitioner can verify the exact text: ss 5-9, 14, 15, 17-18, 21-23, 26-28, 29-32, 33-45, 48-49, 54, 55, 56, 39(6), pt 3 (ss 57-100).
How to comply
Compliance requires an integrated operational, accounting and legal control regime that captures sales and counterparty data, implements the ASP formulas accurately, monitors election and instalment rights, and responds promptly to revenue-commissioner notices. Below is a practical checklist mapped to statutory obligations.
Establish robust data capture and classification systems
Capture for every sale (direct and via resellers): buyer identity, buyer relationship status (independent buyer vs relevant entity for producer), whether buyer is an LNG project buyer, sale volume (convert to GJ for gas/LNG, barrels for oil), revenue received, date of sale, and whether gas was flared/used/vented or stored (ss 5-9; ss 17, 21, 26, 31).
Maintain a register of LNG project members and buyers, including copies of notices received under s 12 and any communications from the revenue commissioner under s 12(4).
Track resellers’ sales streams and ensure resellers provide timely breakdowns to the producer of volumes and revenues attributable to the producer (s 17(1), s 21(1), s 26(1), s 31(1)).
Implement ASP, BP and DS automation with audit trails
Program the ASP formula ASP = (AR + DS) / (AV + DV) for each category (ss 17, 21, 26, 31). Ensure AR/AV and DS/DV are aggregated exactly as defined (sales to independent buyers vs not; LNG project buyers vs not).
Automate BP calculations: for supply/project gas and liquid petroleum the BP is the average Europe Brent Spot Price FOB over the relevant period converted to AUD at the average hedge settlement rate; for domestic gas the benchmark is the firm End of Day Wallumbilla Benchmark Price averaged over the period (s 15; ss 22, 27, 29). The regulation fixes the hedge settlement rate as the WM/Reuters Australian Fix 10.00 a.m. rate (s 5).
Retain source-market data and conversion computations for audit: daily Brent series, daily Wallumbilla prices, daily WM/Reuters Australian Fix rates, and the averaging calculations for the relevant period (s 14).
Election management and decision support
If considering elections under ss 18, 23, 28 or 32 to apply the benchmark rather than computed ASP, document the commercial rationale and the expected impact on royalty payable; elections take effect from the first day of the royalty return period for the return where the election is lodged and continue until the revenue commissioner ends them (s 18(3)-(4); parallel provisions at ss 23, 28, 32). Keep written records to support any future challenges by the revenue commissioner under the “protection of the public revenue” standard.
For s 45 instalment elections, retain contemporaneous evidence supporting the “reasonable belief” that total royalty in the current period will be less than the prior period; maintain copies of the approved form election lodged and the timing (s 45(3)-(5)). Be aware of s 55 civil penalty exposure and model downside scenarios.
Instalment and payment calendar controls
For calendar-quarter reporters, programme instalment dates: instalment 1 on the last business day of month 2 of the quarter, instalment 2 on the last business day of month 3, and instalment 3 on the lodgement day (s 41(1)). Ensure the approved payment form is lodged when each payment is made (s 41(2)).
Monitor for revenue-commissioner notices changing timing: the revenue commissioner may issue a quarterly payment notice to consolidate to a single lodgement-day payment (s 42) or require earlier lodgement (s 38). Track notices to ensure calendar updates are applied.
Royalty return and estimate processes
Prepare royalty returns in the approved form and lodge with the revenue commissioner (ss 34-35). Ensure returns relate to the correct period per s 36 and meet lodgement deadlines (s 37).
When issued a royalty estimate notice under s 593 of the Act, comply with the notice contents as prescribed in s 51 and lodge the royalty estimate in the form stated and containing the information stated (s 52). If asked for supporting information under s 53, provide it by the day stated.
Joint-venture and non‑tenure-holder processes
If a non-tenure participant seeks to be treated as a petroleum producer for part of production, prepare an application in the approved form including the tenure identification, proposed amount, start and end dates, and the consent of the tenure holder (s 48(3)). If the application is granted, implement the reporting and tax registration changes required by s 48(9) and ensure the tenure holder’s residual liability implications are managed contractually (s 48(10)).
If seeking to end an election period as a non-tenure or tenure holder, lodge an application under s 49 with the required evidence of notification to the other party and proposed end date (s 49(3)-(5)).
Swap and hedge arrangements
For swap arrangements, seek an early determination under s 54 from the revenue commissioner about how the part applies, especially where swaps change volumes, qualities or counterparties. Publish or retain the revenue-commissioner determination for audit purposes (s 54(3)).
Maintain records of hedging contracts and WM/Reuters fix computations as they feed into the BP conversion method (s 22(1), s 27(1)).
Documentation and audit readiness
Keep complete supporting documentation for AR, AV, DS, DV components, including contracts, invoices, affiliate relationship evidence and evidence of independence (s 17-31). The revenue commissioner may ask for supporting information (s 53).
Keep contemporaneous decision logs for any elections, instalment elections, s 48 joint-venture elections and any internal modelling for reasonable-belief assertions under s 45.
Responding to revenue-commissioner actions
If the revenue commissioner makes a determination that affects prior assessments (s 11), expect a reassessment under the Taxation Administration Act and track refund/remission obligations and potential remittances of penalty tax, interest or civil penalties if attributable only to earlier assessments (s 11(2)-(4)).
If given a notice under s 46 requiring amounts to be worked out under s 43, do not make s 45 elections for the period to which the notice applies (s 46(2)-(3)).
Financial controls and cash forecasting
Model royalty liabilities under both ASP and benchmark scenarios and the effect of s 55 exposure on interim instalments. Maintain liquidity to meet potential shortfalls and to avoid unpaid tax interest under s 56.
Implement approval thresholds and a clearance process for s 45 elections because of the civil-penalty risk; require legal sign‑off and supporting forecasts.
Compliance training and inter‑departmental coordination
Ensure legal, tax and commercial teams are coordinated: accounting must produce AR/AV records, commercial must manage buyer relationships and notices, legal must manage elections, and tax must handle returns and payments. The regulation’s many procedural requirements require cross-functional workflows.
Review legacy notices and transitional items
Examine any pre‑commencement decisions or elections preserved under pt 3 (ss 57-100) to identify ongoing obligations that carry into the current regime (e.g. elections to use benchmark prices, pending s 48 applications). Ensure these legacy items are copied into current compliance registers.
If you want, I can produce a detailed compliance workbook template (data fields, calculation formulas with example numbers, workflow timeline for quarterly reporters, checklist for s 45 election evidence, and a template s 48 application) mapped precisely to the statutory line-items above.
(a) the person has, under section 12 (2) , given the producer or the reseller a notice stating that the person is a member of the LNG project; or
(b) the revenue commissioner has, under section 12 (4) , told the producer or the reseller that the person is a member of the LNG project.
sec.6 What is domestic gas
sec.6 What is domestic gas
Petroleum produced by a petroleum producer in a royalty return period is domestic gas if—
the petroleum is gas; and
during the royalty return period, the petroleum is—
sold or otherwise transferred, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person who is not an LNG project buyer; or
flared, used or vented; or
if the producer is not a member of an LNG project—stored by, or kept in the possession of, the producer or 1 or more resellers for the producer; and
the petroleum is not supply gas.
In this section—
use , petroleum, does not include convert the petroleum into LNG.
(sec.6-ssec.1) Petroleum produced by a petroleum producer in a royalty return period is domestic gas if— the petroleum is gas; and during the royalty return period, the petroleum is— sold or otherwise transferred, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person who is not an LNG project buyer; or flared, used or vented; or if the producer is not a member of an LNG project—stored by, or kept in the possession of, the producer or 1 or more resellers for the producer; and the petroleum is not supply gas.
(sec.6-ssec.2) In this section— use , petroleum, does not include convert the petroleum into LNG.
(a) the petroleum is gas; and
(b) during the royalty return period, the petroleum is— (i) sold or otherwise transferred, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person who is not an LNG project buyer; or (ii) flared, used or vented; or (iii) if the producer is not a member of an LNG project—stored by, or kept in the possession of, the producer or 1 or more resellers for the producer; and
(i) sold or otherwise transferred, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person who is not an LNG project buyer; or
(ii) flared, used or vented; or
(iii) if the producer is not a member of an LNG project—stored by, or kept in the possession of, the producer or 1 or more resellers for the producer; and
(c) the petroleum is not supply gas.
(i) sold or otherwise transferred, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person who is not an LNG project buyer; or
(ii) flared, used or vented; or
(iii) if the producer is not a member of an LNG project—stored by, or kept in the possession of, the producer or 1 or more resellers for the producer; and
sec.7 What is supply gas
sec.7 What is supply gas
Petroleum produced by a petroleum producer in a royalty return period is supply gas if—
the petroleum is gas; and
the petroleum is not produced by the producer as a member of an LNG project; and
during the royalty return period, the petroleum is sold or otherwise transferred, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person who is an LNG project buyer.
(a) the petroleum is gas; and
(b) the petroleum is not produced by the producer as a member of an LNG project; and
(c) during the royalty return period, the petroleum is sold or otherwise transferred, either directly by the producer or indirectly by the producer through 1 or more resellers for the producer, to a person who is an LNG project buyer.
sec.8 What is project gas
sec.8 What is project gas
Petroleum produced by a petroleum producer in a royalty return period is project gas if—
the petroleum is gas; and
the petroleum is produced by the petroleum producer as a member of an LNG project; and
the petroleum is not domestic gas.
(a) the petroleum is gas; and
(b) the petroleum is produced by the petroleum producer as a member of an LNG project; and
(c) the petroleum is not domestic gas.
sec.9 What is liquid petroleum
sec.9 What is liquid petroleum
Petroleum produced by a petroleum producer in a royalty return period is liquid petroleum if the petroleum is oil.
pt.2-div.2 LNG projects
LNG projects
sec.10 Revenue commissioner may make determination that petroleum venture is LNG project
sec.10 Revenue commissioner may make determination that petroleum venture is LNG project
This section applies if the revenue commissioner believes a petroleum venture exists between—
1 or more petroleum producers; and
1 or more other persons each of whom is a relevant entity for a petroleum producer mentioned in paragraph (a) .
The revenue commissioner may make a determination that the petroleum venture is an LNG project.
If the revenue commissioner makes a determination under subsection (2) , the revenue commissioner must also make a determination of who are the members of the LNG project.
The revenue commissioner must give each person who is a member of the LNG project notice of the determinations under subsections (2) and (3) .
The notice must include the following information—
a description of the petroleum venture that constitutes the LNG project;
the names of the members of the LNG project;
the names of the petroleum producers who are members of the LNG project;
the petroleum tenures under which petroleum is produced for the LNG project.
A determination under subsection (2) or (3) takes effect on the day stated in the notice.
The revenue commissioner may amend or revoke a determination made under subsection (2) or (3) by notice given to each person who is, or was before the amendment or revocation, a member of the LNG project.
An amendment or revocation under subsection (7) takes effect on the day stated in the notice.
For subsections (6) and (8) , the day stated in the notice may be a day before the day on which the revenue commissioner makes, amends or revokes the determination.
In this section—
petroleum venture means a joint venture or other arrangement involving—
the production of gas for the purpose of converting the gas into LNG; and
the processing, transportation, storage, conversion, sale or purchase of the gas or LNG mentioned in paragraph (a) .
(sec.10-ssec.1) This section applies if the revenue commissioner believes a petroleum venture exists between— 1 or more petroleum producers; and 1 or more other persons each of whom is a relevant entity for a petroleum producer mentioned in paragraph (a) .
(sec.10-ssec.2) The revenue commissioner may make a determination that the petroleum venture is an LNG project.
(sec.10-ssec.3) If the revenue commissioner makes a determination under subsection (2) , the revenue commissioner must also make a determination of who are the members of the LNG project.
(sec.10-ssec.4) The revenue commissioner must give each person who is a member of the LNG project notice of the determinations under subsections (2) and (3) .
(sec.10-ssec.5) The notice must include the following information— a description of the petroleum venture that constitutes the LNG project; the names of the members of the LNG project; the names of the petroleum producers who are members of the LNG project; the petroleum tenures under which petroleum is produced for the LNG project.
(sec.10-ssec.6) A determination under subsection (2) or (3) takes effect on the day stated in the notice.
(sec.10-ssec.7) The revenue commissioner may amend or revoke a determination made under subsection (2) or (3) by notice given to each person who is, or was before the amendment or revocation, a member of the LNG project.
(sec.10-ssec.8) An amendment or revocation under subsection (7) takes effect on the day stated in the notice.
(sec.10-ssec.9) For subsections (6) and (8) , the day stated in the notice may be a day before the day on which the revenue commissioner makes, amends or revokes the determination.
(sec.10-ssec.10) In this section— petroleum venture means a joint venture or other arrangement involving— the production of gas for the purpose of converting the gas into LNG; and the processing, transportation, storage, conversion, sale or purchase of the gas or LNG mentioned in paragraph (a) .
(a) 1 or more petroleum producers; and
(b) 1 or more other persons each of whom is a relevant entity for a petroleum producer mentioned in paragraph (a) .
(a) a description of the petroleum venture that constitutes the LNG project;
(b) the names of the members of the LNG project;
(c) the names of the petroleum producers who are members of the LNG project;
(d) the petroleum tenures under which petroleum is produced for the LNG project.
(a) the production of gas for the purpose of converting the gas into LNG; and
(b) the processing, transportation, storage, conversion, sale or purchase of the gas or LNG mentioned in paragraph (a) .
sec.11 Revenue commissioner must reassess amount of royalty payable if particular determinations made
sec.11 Revenue commissioner must reassess amount of royalty payable if particular determinations made
This section applies if the revenue commissioner—
has made, amended or revoked a determination under section 10 (each a new decision ); and
has made an assessment under the Taxation Administration Act 2001 of the amount of petroleum royalty payable by a petroleum producer for a royalty return period without having regard to the new decision.
The revenue commissioner must reassess, under the Taxation Administration Act 2001 , the amount of petroleum royalty payable by the petroleum producer for the royalty return period having regard to the new decision.
See the Taxation Administration Act 2001 , part 4 for the revenue commissioner’s obligation to refund any excess amount on the making of the reassessment.
Subsection (4) applies if, on the reassessment, the petroleum producer is liable for penalty tax, unpaid tax interest or a civil penalty (each a relevant liability ).
The revenue commissioner must remit the relevant liability to the extent it is payable only because of the operation of subsection (2) .
(sec.11-ssec.1) This section applies if the revenue commissioner— has made, amended or revoked a determination under section 10 (each a new decision ); and has made an assessment under the Taxation Administration Act 2001 of the amount of petroleum royalty payable by a petroleum producer for a royalty return period without having regard to the new decision.
(sec.11-ssec.2) The revenue commissioner must reassess, under the Taxation Administration Act 2001 , the amount of petroleum royalty payable by the petroleum producer for the royalty return period having regard to the new decision. See the Taxation Administration Act
This is an opening excerpt, not the complete document.