The oil and gas industry's contribution to the economy

QUESTION

FACT

Data released in February 2026 by Australian Energy Producers (AEP) shows the significant contribution made by the Australian oil and gas industry to the nation's economy, including as¹:

• one of the biggest tax-paying sectors, contributing a record A$21.9 billion in taxes and royalties in 2024–25 to State and Federal governments
• the second-biggest corporate taxpayer, accounting for one in every 10 company tax dollars paid
• a key driver of Australia’s productivity and economic growth, representing 3.7% of Australia’s gross domestic product (GDP).

The data followed a February 2025 data release from AEP, based on a report prepared by KPMG, that highlighted the industry's impact, including the following²:

• A$17.1 billion paid in taxes and royalties in 2023–24.
• A$105 billion contributed to the national economy (A$85 billion directly).
• 215,000 people are employed across the economy (30,000 directly).
  

The gas industry (including both Australian and international producers) makes significant contributions to the broader economy, including supporting Australian employment and businesses. 

In April 2023, data and analytics provider Wood Mackenzie estimated that there was A$100 billion in payments to government due from offshore gas projects over the following two decades.³

The natural gas industry also supports the Australian economy by providing direct employment to Australians. In 2021–22, the natural gas industry directly supported more than 80,000 jobs and contributed A$84 billion to the economy.⁴ Woodside directly employs more than 3,000 people in Australia and its operations will continue to create new construction and ongoing employment for Australians. For example, the development of the Scarborough Energy Project and Pluto Train 2 are expected to generate a peak workforce of 3,200 people during construction while almost 600 direct jobs are expected to be created and sustained during operations.

A report released in August 2023 by consultancy ACIL Allen showed the significant contribution gas made to the Australian economy during the 2021–22 financial year. The analysis pointed to strong growth over the 12-month period, with gas generating A$121.17 billion in domestic economic activity to underpin 5.25% of GDP.⁵ 

What are the main forms of taxation specific to petroleum projects?

• Petroleum resource rent tax (PRRT) is a 40% profits-based resource tax imposed by the Australian Government. It applies to oil and gas projects located offshore in Australia’s Commonwealth waters. Projects become liable to pay PRRT after expenditures (as augmented by an appropriate rate of return) have been recouped. This means that the amount of PRRT payable in any given year will depend on factors such as the stage of a project and commodity prices. However, from 1 July 2023, liquefied natural gas (LNG) projects pay a minimum 10% of PRRT on assessable receipts. This does not apply to LNG projects in their first year of production or the following seven years.
• Commonwealth petroleum royalties, which currently apply only to the North West Shelf (NWS) Project, levied at 10–12.5% on the wellhead value of petroleum produced. The NWS Project remains the only offshore Australian project to be subject to both petroleum royalties and crude oil excise. The Commonwealth petroleum royalties are payable to the Australian Government. However, approximately two-thirds are shared with the Western Australian Government, as prescribed by legislation. While it is not anticipated the NWS Project will pay PRRT, it is already subject to substantial Commonwealth royalties and taxation.
• Crude oil excise is imposed by the Australian Government on eligible crude oil and condensate production from onshore areas (which includes coastal waters within three nautical miles of the Australian coastline) and the NWS Project area in Commonwealth waters. It is an ad valorem tax, levied at up to 30% of the market value of crude oil and condensate produced from a relevant area.