The Turnbull government plans to overhaul the petroleum resource rent tax in the face of a significant fall in revenues.
Revenues from the 40 per cent PRRT levied on profits generated from petroleum commodities had halved since 2012/13, while crude oil excise revenues had more than halved.
Treasurer Scott Morrison has commissioned a review to ensure the taxes are still operating as they were originally intended and determine why there has been rapid decline in revenue.
It will be led by former Treasury official Michael Callaghan and report back by April, which would allow for an official response in next year's May budget.
The treasurer said the issue was about the integrity of the tax system, and the measured and sober approach the government was taking to ensure it doesn't drive oil companies out of Australia.
"My interest in this issue is to ensure the system works well," Mr Morrison told reporters in Canberra on Wednesday.
"I wouldn't want to create the expectation that in the short-term, certainly when it comes to the PRRT, that this would lead to any significant change in revenues in the budget or forward estimates."
It would be separate from an inquiry into rent taxes and royalties being pursued by Labor and the Greens.
"The Greens want to drive the industry out of the country - off the offshore," Mr Morrison said
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