Royalty hikes to impact gas industry

Arrow Energy, the gas joint venture between oil giants Shell and PetroChina, has warned the Queensland’s government’s proposed royalty hike will cost its Surat Basin gas development an extra $1 billion over the lifespan of the project.

The Australian is reporting Queensland has joined Labor governments in Victoria and WA in hitting the resources sector to plug holes in the state budget, lifting petroleum royalties by 2.5 percentage points to 12.5 per cent from July 1.

The oil and gas giants say the tax slug will hit their $10bn Surat coal-seam gas project, which plans to bring an extra 5000 petajoules of gas to the market over the next 27 years.

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