PERTH (miningweekly.com) – The Australian Petroleum Production and Exploration Association (Appea) has come out in defence of the owners of the North West Shelf project following a report from the Australian National Audit Office (ANAO), which shows that they claimed more than A$5-billion in royalty deductions over an 18-month period.

The ANAO report suggested that government departments take steps to tighten royalty collection from North West Shelf.

However, Appea said on Tuesday that the ANAO report made no findings or recommendations suggesting the project's participants had any intention to falsely claim deductions.

“Any attempt to suggest otherwise is either a misreading of the report or a deliberate misrepresentation of the facts,” said Appea CEO Dr Malcolm Roberts.

“Indeed, the report highlights instances where deductions have been under-claimed.

“The audit’s focus was to assess whether the Department of Industry, Innovation and Science has effectively and efficiently administered the collection of North West Shelf royalty revenue.

“These collections are undertaken on its behalf by the Western Australian Department of Mines and Petroleum (DMP), with the state receiving a significant share of royalty income from the project,” Roberts said.

He said that it was also clear in the state's response to the report that the DMP was concerned that it was not adequately consulted in the preparation of the report, and that it considered its royalty revenue verification processes to be robust and adequate.

“It is important that all tax collections – whether at the national, state or local government level – be undertaken on a transparent and efficient basis, reflecting the risks associated with the relevant activity.  The industry will continue to work with all governments to achieve that outcome,” Roberts said.

The North West Shelf reported revenues of some A$19.7-billion between July 2014 and December 2015, on which A$1.9-billion in royalties were paid. A$600-million of this went to the federal government, with the remaining A$1.3-billion going to the Western Australian government.