Australians Now Get To Pay $100s Of Millions To Chevron To Clean Up Mess The Company Made Under 40-Year-Old Contract

The Australian government faces having to pay hundreds of millions of dollars to the American oil and gas company Chevron to help it clean up oil wells on Barrow Island, in Western Australia, under a deal made in the 1980s. The Western Australian government also faces a hefty bill – estimated to be $129m – to help repair an offshore nature reserve where about 900 wells have been drilled over the past six decades.

Chevron says it has paid more than $1bn in royalties – about $3 a barrel – for oil and gas extracted from beneath the island, which is about 70km off the state’s north-west coast. Under state legislation written especially for the project, federal and state taxpayers will have to pay them back about nearly half that amount to help cover remediation costs.

A WA government minute obtained by independent news site Boiling Cold under freedom-of-information laws suggests it will cost Chevron and its venture partners more than $2.3bn to fix the site, which has produced 335m barrels of oil.

The legislation stipulates that the company would pay 40% of the difference between Chevron’s sales revenue and operational costs, with 75% of the payment going to the federal government and 25% to WA. The legislation stated that once production ended at the site, the calculation would operate in reverse. Chevron and its partners, ExxonMobil and Santos, would be refunded 40% of what they spent on decommissioning the oilfield infrastructure for the following three years, with the federal and state governments again splitting what they paid back 75%-25%.

EDIT

https://www.theguardian.com/business/2025/jul/23/barrow-island-western-australia-taxpayers-chevron-oil-wells