• 3 minutes "Biden Is Running U.S. Energy Security Into The Ground" by Irina Slav
  • 6 minutes How Far Have We Really Gotten With Alternative Energy
  • 9 minutes "How to Calculate Your Individual ESG Score to ensure that your Digital ID 'benefits' and money are accessible"
  • 22 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 10 days 87,000 new IRS agents, higher taxes, and a massive green energy slush fund... "Here Are The Winners And Losers In The 'Inflation Reduction Act'"-ZeroHedge
  • 46 mins Energy Armageddon
  • 19 hours "Natural Gas Price Fundamental Daily Forecast – Grinding Toward Summer Highs Despite Huge Short Interest" by James Hyerczyk & REUTERS on NatGas
  • 3 hours Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 5 days "The Global Digital ID Prison" by James Corbett of CorbettReport.com
  • 4 days "Forget Oil, The Real Crisis Is Diesel Inventories: The US Has Just 25 Days Left" by Zero Hedge - 5 Stars *****
  • 4 days "Europe’s Energy Crisis Has Ended Its Era Of Abundance" by Irina Slav
  • 5 days The Federal Reserve and Money...Aspects which are not widely known
  • 2 days Is Europe heading for winter of discontent with extensive gas shortages?
  • 6 days Goldman Betting on Cryptocurrencies
  • 9 days Сryptocurrency predictions
  • 14 days Putin and Xi Bet on the Global South

Breaking News:

Oil Prices Jump On Major Crude Draw

Oil Prices Bounce Back As Sentiment Shifts

Oil Prices Bounce Back As Sentiment Shifts

Oil prices rebounded on Tuesday…

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

Premium Content

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





Leave a comment

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News