Transitional arrangements for petroleum royalty

For petroleum produced from 1 October 2020, the volume model is used to calculate petroleum royalty.

To help with the volume model, transitional arrangements are provided in the:

• Petroleum and Gas (Production and Safety) Act 2004
• Petroleum and Gas (Royalty) Regulation 2021.

Under the transitional arrangements:

• the annual return period for petroleum produced before 1 October 2020 ended on 30 September 2020
• the royalty for all liable petroleum produced but not disposed of before 1 October 2020 must be paid at a rate of 12.5% of the wellhead value of petroleum.

Return periods for the transition depend on your circumstances:

• if your annual return period starts on 1 July, then the annual return period is taken to start on 1 July 2020 and end on 30 September 2020
• if your annual return period starts on 1 January, then the annual return period is taken to start on 1 January 2020 and end on 30 September 2020.

This annual return for the period ending 30 September 2020 was due on 31 December 2020. You can lodge this return on QRO Online or by completing the petroleum royalty return (Form R02.1). This is the final annual return that will be lodged under the previous wellhead value model.

Under the transitional arrangements for the new volume model, if you were required to lodge annually the 2020–21 financial year will be taken to start on 1 October 2020 and end on 30 June 2021.

You can still apply for a petroleum royalty decision for petroleum produced before 1 October 2020. Phone 1300 300 734.

As part of these transitional arrangements, so long as you have made a reasonable attempt to comply with the new volume model when completing your first 3 quarterly returns after 1 October 2020, any interest and penalties relating to these return periods (i.e. quarterly returns for the periods ending 31 December 2020, 31 March 2021 and 30 June 2021) will be remitted in full. Contact us to discuss a reassessment.

Also consider…

• Learn about royalty payment due dates.
• Learn about lodging royalty returns.
• Read the petroleum guide for QRO Online.