• 3 minutes Oil Price Could Fall To $30 If Global Deal Not Extended
  • 8 minutes Why Is America (Texas) Burning Millions of Dollars Per Day Of Natural Gas?
  • 11 minutes Is $60/Bbl WTI still considered a break even for Shale Oil
  • 15 minutes CNN:America's oil boom will break more records this year. OPEC is stuck in retreat
  • 4 hours The Pope: "Climate change ... doomsday predictions can no longer be met with irony or disdain."
  • 1 day Hormuz and surrounding waters: Energy Threats to the World: Oil, LNG, shipping markets digest new risks after Strait of Hormuz attack
  • 1 hour Greenpeace claims one oil rig is "pushing the world closer to a climate catastrophe"
  • 28 mins Middle East on brink: Oil tankers attacked off Oman
  • 9 hours The Latest: Iranian FM Says US Cannot Expect To ‘Stay Safe’
  • 22 hours Russia removes special military forces from Venezuela . . . . Maduro gone by September ? . . . Oil starts to flow ? Think so . .
  • 2 days Never Knew Gasoline Prices were this important!
  • 1 day Plants are Dying
  • 8 hours Emmissions up, renewables nowhere
  • 1 day The Magic and Wonders of US Shale Supply: Keeping energy price shock minimised: US oil supply keeping lid on prices despite global risks: IEA chief
  • 1 day We Are Better Than This
  • 2 days (Un)expectedly: UK Court Sets Assange U.S. Extradition Hearing For February 2020
  • 1 min Britain makes it almost 12 days with NO COAL
Alt Text

Escalating Trade War Signals More Pain For Oil

The quick resolution of the…

Alt Text

Tanker Attacks Could Have A Lasting Effect On Oil Prices

After the tanker sabotage attempts…

Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

More Info

Trending Discussions

Rebels And Tax Avoidance: Chevron’s Problems Pile Up

Surviving the oil price crisis is tough enough on its own, but some oil industry players have had particularly bad luck, and some, such as Chevron, may very well have caused some of this bad luck themselves.

As if posting a second consecutive quarterly loss for January to March 2016 was not enough, Chevron is grappling with rebel attacks on its production and transport assets in Nigeria, and has come under suspicion from the local Senate for allegedly inflating the cost of a gas project. On top of this, it’s facing growing hostility from Australian tax authorities over multiple issues.

Rebel Attacks

The Niger Delta Avengers have so far caused four explosions at Chevron oil and gas transport infrastructure sites in the Niger Delta, and the group is not stopping, despite attempts by the government to initiate peace negotiations. Chevron has not commented on the attacks, adhering to a long-standing policy in this respect, so the amount of damage done remains unclear. The attacks, however, have forced it to shut down its Escravos gas-to-liquid production and export terminal—the very project that has put it in the crosshairs of the local Senate.

Nigeria Authorities

The Senate Committee on Gas earlier this month started an investigation into the Escravos project, claiming that Chevron inflated the cost of the project by a hefty $7.4 billion to a total $10.3 billion with no good reason and without consulting its JV partner, the National Nigerian Petroleum Corporation, thus violating its JV contract.

The Committee is also asking why the JV is split 75 percent-25 percent in favor of Chevron, unlike all other joint ventures between the U.S. major and the NNPC. This is not the first investigation into the Escravos project, just the latest. The NNPC has defended its partner, but given its reputation as a hothouse for graft practices, it’s only to be expected that the senators won’t take its word for granted. Related: Solar To See Twice As Much Investment As Fossil Fuels By 2040

Australian Senate

Chevron’s problems don’t stop at its subsidiary Chevron Nigeria Limited. The Australian Senate has referred to Chevron as “the worst tax avoider” after an inquiry into Chevron corporate tax avoidance. The company has already been saddled with a bill of $300 million after it lost a case to the Australian Tax Office (ATO) for using a variety of debt mechanisms—including intercompany loans—to reduce its Australian tax bill by US$189 million.

Chevron is appealing the ruling by the Federal Court.

More Aussie Woes

Now, the ATO is investigating another possible breach of local tax law: a $42-billion loan that Chevron took from a shell company called Chevron Australia Petroleum, which is registered in Delaware, to fund the gigantic Gorgon offshore gas project. Related: Can Trump Change The Direction Of U.S. Energy?

Of course, Chevron has argued that Chevron Australia Petroleum is a legitimate company, but it is apparently a company with no business of its own, according to Australian media covering the investigation.

Chevron Outlook

In the wake of all its troubles, past and present, things are not looking too good for Chevron right now. It has invested billions in Gorgon and another LNG project in Australia, Wheatstone, which has just been delayed by local regulators due to environmental concerns.

Another offshore project, in Indonesia, is also facing a delay as the local government has asked the company to update its investment calculations, basing them this time on a more realistic oil price. At home, in the shale patch, producers started adding rigs, and as many warned, prices immediately started moving downwards.

There isn’t a lot Chevron could do about influencing the trends in global production, but it might want to rethink its corporate culture.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage

Trending Discussions


Leave a comment

Leave a comment





Oilprice - The No. 1 Source for Oil & Energy News