00:00We just heard some remarks from Liz Westcott who we were speaking to a short time ago about
00:05supply contracts, a preference for many consumers now for longer term contracts.
00:09Is this a trend that you're seeing as well?
00:11Yes, certainly this has been part of the discussions we've been having here at the conference.
00:15I think what we've seen in terms of the global energy market upheaval in the recent weeks
00:21and months has really put a spotlight on the importance of Australia's oil and gas industry
00:27and the opportunity Australia has really to demonstrate that we're a reliable, trusted trading partner
00:33but also investment destination for LNG and we can see that our trading partners are really looking to Australia
00:40to be able to diversify their supplies, boost their energy security and I think the industry has been very conscious
00:46and it's been again a consistent theme of the conference about the strategic role we play in the region
00:53in terms of energy security and regional stability.
00:56Longer term, do you feel like the market is still tilted to oversupply or can Australia pretty much guarantee
01:02that Asian customers are going to want everything that we can provide?
01:05I think what's clear is the demand is there.
01:07I mean, under some projections you're seeing almost a doubling of LNG demand with most of that growth in our
01:12region.
01:13There are so many opportunities for Australian LNG to play a role in terms of the,
01:18not just energy security and energy supply in the region,
01:21but helping economies shift to cleaner fuels away from coal and other higher emitting fuels.
01:27So, you know, we're confident that demand will be there.
01:30Certainly the interest that our members and companies are seeing from trading partners and customers
01:36in the region and around the world is testament to that.
01:39And is the regulatory framework in Australia at the moment set up adequately to assist this?
01:44Well, look, Australia's advantages are really around having a stable regulatory framework
01:49and having that close proximity to Asian markets as well, of course, as our, you know,
01:54our abundant natural gas and other resources.
01:58Now is really an important moment for Australia to demonstrate that stability.
02:02We've had a lot of, can we say, flux in terms of energy markets and the regulatory environment,
02:11particularly as it applies to oil and gas in Australia.
02:13That has raised concerns with our trading partners and with investment.
02:17And so really having stability around fiscal settings, around regulatory settings,
02:22that includes now, you know, discussions around a gas reservation policy.
02:27Getting certainty around that is going to be key to driving the very large investments
02:31that are needed to develop, you know, the next wave of oil and gas resources.
02:36I do sense you being very diplomatic.
02:38Yeah, we should get there.
02:39The 20% gas reservation policy containing 20% of exports for domestic use,
02:45is this even feasible?
02:46Look, as an industry, we would support a prospective reservation policy for the East Coast
02:52that, you know, encourages new supply and is linked to new supply.
02:56What we don't want to see is these retrospective interventions
02:59that are impacting these investments that were made in good faith
03:03and under, you know, entirely different rules.
03:05We think there's a pathway to have a reservation on the East Coast
03:09that would work for producers, for users and promote competition and more investment.
03:15And frankly, would be better than the patchwork of interventions and reforms
03:18that we currently have on the East Coast.
03:21What we've seen announced from the government,
03:23the fact is there's more questions than answers.
03:26There's a lot of questions and issues that still need to be resolved.
03:30It's been almost two weeks now.
03:31We haven't had, you know, more detail since the press conference and press release.
03:36But we are concerned with some of the design of the reservation.
03:40You've heard that from a number of sources over the last couple of days.
03:45I mean, at 20%, if you were looking at the East Coast market,
03:48that's 60% of the domestic market.
03:50So what's that going to do to competition and the smaller domestic-only producers?
03:55Well, I want to get to the question of the petroleum resource rent tax as well,
03:58the potential for some changes there.
04:00I mean, you've outlined some scenarios under which a company like Woodside
04:03could see 80% of its profits consumed.
04:06That does seem extreme.
04:08Would a system such as Norway has in place be transposable to Australia or something else?
04:14Well, we need to be careful in making these comparisons.
04:16As you'd be aware, the Norwegian system is very, very different.
04:19There's a high degree of direct government investment and ownership in the oil and gas industry,
04:25which is not the case in Australia, where we rely on private investment.
04:29Now, the facts are that the oil and gas industry in Australia is the second largest taxpayer,
04:35and we paid $21.9 billion in taxes and royalties last year alone.
04:41We have already had changes to the petroleum resource rent tax just in the last two years.
04:46It's been reviewed six or seven times in the last decade or so.
04:50What the industry is looking for now is stability in these policy settings,
04:55and that's going to be particularly important if we are to play our role in terms of not just Australia's
05:00future energy supply,
05:02but in playing that role in terms of supporting our trading partners with LNG
05:06and reliable and affordable energy well into the future.
05:09Previously, we've seen industry bodies such as yours embark on public education and public information campaigns,
05:16advertising campaigns as well to defend their position.
05:19Is there something you're considering with these policies?
05:21We're already doing it.
05:22So, you know, there's a lot of misinformation out there,
05:26and certainly the campaign calling for higher taxes on the industry.
05:30And as you rightly point out, these taxes that are being proposed would lead to an effective tax rate
05:35for some projects of more than 80%,
05:38and it would make future projects uninvestable,
05:41which frankly is what some of these campaigners want to achieve in the end.
05:46So what we're promoting is the facts, the industry's actual tax contribution and how that tax system works.
05:54You know, we need to be out there and, you know, putting the facts on the table.
05:58I think Australians deserve that.
05:59We need to have an informed debate about, you know, our energy policy and our economic future,
06:05and we're happy to play a role in that.
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