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Oil chief says customers will pay for tax

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Oil chief says customers will pay for tax

By Elizabeth Fry in Sydney

Published: August 28 2008 03:00 | Last updated: August 28 2008 03:00

The head of Woodside Petroleum, Australia’s second largest oil and gas producer, yesterday described a decision by the federal government to remove a 30-year-old tax exemption on a natural gas product as a “serious threat”.

Don Voelte, chief executive, said his company would pass the entire cost to its Western Australian customers.

The tax exemption for condensate, which is extracted from natural gas, has been of benefit to the North West Shelf development, operated by Woodside.

Scrapping the exemption will raise A$2.5bn ($2.1bn) for the Canberra government over four years.

Mr Voelte said: “We provide domestic and industrial customers with long-term, stable gas supply from the North West Shelf venture at very competitive prices and to think we can absorb this extra cost into our business is unrealistic.”

He also warned that Woodside might cut its spending on its Browse Basin liquefied natural gas project in offshore Western Australia if a proposed emissions trading scheme went ahead. Mr Voelte has said the scheme, planned for 2010, would put an unfair burden on low greenhouse gas emitters – such as Woodside – rather than heavy emitters such as coal-burning power stations.

Woodside reported a sharp rise in interim profits.

The energy group, which is 34 per cent-owned by Royal Dutch Shell, said net profits rose 67 per cent to A$1.02bn as it was bolstered by high oil prices. Under lying profit rose 86 per cent to A$1.01bn on revenue up 45 per cent at A$2.6bn.

The company said it was on track to achieve its 2008 production target of 80m to 86m barrels of oil equivalent.

The company declared an interim dividend of 80 cents a share, up from 49 cents a year earlier

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