The Woodside Energy Group Ltd (ASX: WDS) share price is down 1% in afternoon trade on Thursday.
Shares in the S&P/ASX 200 Index (ASX: XJO) oil and gas stock closed yesterday trading for $33.86. At the time of writing, shares are trading for $33.51.
The dip in the Woodside share price is being mirrored by its competitors, likely driven by a 1% fall in crude oil prices. Brent crude is currently trading for US$82.53 per barrel.
But it's not the price of oil that has Woodside CEO Meg O'Neill concerned. But rather potential changes to the petroleum resource rent tax (PRRT) being considered by federal treasurer Jim Chalmers.
What's going on with the PRRT?
As The Motley Fool reported earlier this week:
The PRRT allows concessions on expenses relating to exploring and developing gas fields. Under the current system, these can be carried forward and deducted as tax credits against future liabilities. But the Greens want the government to eliminate $284 billion of accumulated credits that enable gas companies to reduce their tax liability.
The suggestion is to remove all of these tax credits, which would mean gas companies start paying from 1 July, and for the government to apply a 10% royalty to all offshore projects subject to the tax.
Should the Greens' plan prevail, that could see the Woodside share price fall by 2% to 5%, according to analysts at Macquarie.
Understandably, Woodside's O'Neill doesn't believe the Greens have a solid grasp of the bigger picture here.
Addressing the National Press Club yesterday, O'Neill noted that last year Woodside's Australian all-in effective tax rate was 46%. The ASX 200 energy stock paid $2.7 billion dollars in Australian taxes and royalties in FY22.
"Our shareholders also benefit. And our shareholder base is majority Australian. We are an Australian company, and we pay our way," she said.
O'Neill cautioned the government that amending the PRRT could cause serious unwanted fallout.
"We urge the government, in any changes to the tax framework, to consider the long-term and preserve Australia's ability to attract the next generation of investment, jobs and energy supply," she said.
O'Neill added:
Overreaching now could risk undermining future revenue.
In terms of regulatory certainty, agreement on clear processes and response times for project approvals is essential to unlocking reliable supply. Otherwise, energy investment will find another home, taking jobs and opportunities with it.
Woodside's CEO stressed that the government shouldn't rush through changes to increase its short-term tax take, saying longer-term it would be a backfire.
"The risk that we run is to try to do something in the near-term that's a bit of a Band-Aid, but it's going to cause long-term harm," she said.
Woodside share price snapshot
As you can see on the chart below, the Woodside share price remains up 3% over the past 12 months, despite a significant retrace from November's recent highs.