Oil and gas giants will be forced to pay billions more in tax under changes to the Petroleum Resources Rent Tax that could also deliver the Turnbull government a shock victory on its stalled company tax cuts.

It is understood next month's budget will tackle longstanding concerns about the way energy companies are taxed by curbing "uplift concessions", which determine tax deductions associated with exploration and construction. But in a concession expected to win industry support, the changes will exempt existing projects.

Treasurer Scott Morrison ordered a review into the system in 2016. Credit:Alex Ellinghausen

Former Treasury official Michael Callaghan recommended changing the uplift concessions last year in a review of the PRRT aimed at ensuring big Australian and multi-national energy companies were paying an appropriate amount of tax in Australia.

With Australia poised to overtake Qatar as the largest exporter of liquified natural gas in the world by 2020, critics of the PRRT note Canberra is forecast to receive a much smaller tax take than the Middle Eastern country.