In­ter­ven­tion sends the wrong mes­sage

Pilbara News - - News - Peter Wil­liams

Chevron’s Aus­tralia boss says pres­sure on gov­ern­ments to in­ter­vene in the oil and gas in­dus­try is send­ing a bad sig­nal to in­vestors.

Last week Nigel Hearne said the high cost of do­ing busi­ness in Aus­tralia and higher com­pany taxes al­ready pre­sented a chal­lenge.

“Pres­sure be­ing placed on gov­ern­ments for pol­icy in­ter­ven­tions such as the petroleum re­sources rent tax, bans on oil and gas drilling and man­dated lo­cal con­tent quo­tas send the wrong sig­nal to in­vestors,” Mr Hearne told a Com­mit­tee for Eco­nomic Devel­op­ment of Aus­tralia break­fast in Perth last week.

He said pol­icy change should en­cour­age in­vest­ment, not ret­ro­spec­tively af­fect project eco­nom­ics nor com­pro­mise Aus­tralia's in­ter­na­tional com­pet­i­tive­ness.

“New LNG projects — wher­ever they are — won’t get past the plan­ning stage un­less they’re eco­nom­i­cally com­pet­i­tive for buy­ers and sell­ers, while pro­vid­ing ben­e­fits to host com­mu­ni­ties and gov­ern­ments,” Mr Hearne said.

The Fed­eral Gov­ern­ment is con­duct­ing a re­view of the PRRT amid claims big oil and gas com­pa­nies are us­ing its de­duc­tions to avoid tax.

On Aus­tralia’s east coast en­ergy short­age, the Chevron Aus­trala­sia man­ag­ing di­rec­tor said pol­icy mak­ers should look to the US shale gas in­dus­try, which turned that coun­try from a net gas im­porter to a net gas ex­porter.

“The con­di­tions were right for the US shale revo­lu­tion: the ge­ol­ogy was well un­der­stood, the ex­per­tise and sup­port­ing in­fra­struc­ture was in place and prop­erty own­ers stood to gain roy­alty rev­enue,” he said.

“But crit­i­cally, the reg­u­la­tory sys­tem was con­ducive and there was suf­fi­cient sup­port from lo­cal com­mu­ni­ties and prop­erty own­ers to get projects up.

“There’s no rea­son why this can’t be repli­cated on Aus­tralian soil, and very quickly if we look at the US ex­am­ple.”

Mr Hearne said com­mu­ni­ties, in­dus­try, man­u­fac­tur­ing and the en­vi­ron­ment would ben­e­fit from un­lock­ing un­de­vel­oped gas re­sources.

Pic­ture: Chevron Aus­tralia

The Gor­gon Project com­mis­sion­ing cargo.

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