PetroChina Withdraws Bid for Australian Gas Producer

PetroChina Co., China's largest natural-gas producer, confirmed Tuesday that it withdrew a bid for an Australian coal-bed methane gas producer but said it would continue to invest in other Australia projects because of their commercial value and importance for energy security.

"We have completed a number of mergers and acquisitions in Australia and will make further investments in those projects," the company said in an email. "These projects are of strong operational and strategic significance and will [supplement PetroChina's reserves] in the future, secure needs for sustainable overseas development and bring economic returns for the company."

WestSide Corp., which has coal-bed methane gas prospects in Queensland state, said earlier Tuesday that PetroChina withdrew its 185.1 million Australian dollar (US $184.7 million) offer for the company. WestSide's shares fell 11% to 25 cents a share Tuesday on the Australian Securities Exchange.

The decision comes as labor shortages and cost pressures have squeezed energy projects in Australia.

PetroChina made the bid for WestSide in November but withdrew almost six months later "because the general situation in Australia has changed so much," WestSide said, without elaborating.

WestSide, which produces natural gas extracted from coal deposits, said it was still in talks with other parties that could invest in the company either through a gas-sales agreement, joint venture or takeover.

PetroChina's decision comes about one month after Australia's Woodside Petroleum Ltd. and its partners, including Royal Dutch Shell PLC, shelved plans for a liquefied natural gas terminal that was forecast to cost more $40 billion.

China has been on an international quest to secure multiple sources of natural gas to help it meet targets to more than double the cleaner burning fuel's contribution to its energy mix to 10% by 2020 from less than 5% now.

Piped gas imports from Myanmar are expected to start later this year, complementing pipelined supplies already coming in from Turkmenistan. China and Russia are in advanced talks for another pipeline to supply Siberian gas. LNG imports are expected to ramp up from Australia and Qatar, and China has also spent the past few years trying to jump-start development of unconventional resources such as shale gas.

WestSide's gas would have supported a small LNG project in Queensland state planned by PetroChina and a smaller Australian partner, Liquefied Natural Gas Ltd. That project was slated to produce up to 3 million metric tons of LNG a year.

PetroChina bought another small Queensland gas producer, Molopo Energy Ltd., last year for A$43.4 million, and is also is a partner with Shell in a much larger joint-venture project with Arrow Energy, also in Queensland.

The Arrow partners are still considering whether to go ahead and build a multi-billion dollar LNG plant. They face mounting cost pressures and the possibility that competing LNG supplies to Asia could emerge from North America and East Africa, making it harder to find customers.Yvonne Lee in Hong Kong contributed to this story.

Copyright (c) 2013 Dow Jones & Company, Inc.

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Contractors Feast on Australian Projects

Australia's major resources services contractors targeting the local oil and gas sector are taking advantage of the rapid growth being experienced in the industry.

Major new developments around the country continue to provide a wide range of opportunities for contractors such as Monadelphous, Leighton Contractors, Clough Ltd. and Laing O'Rourke.

Chevron's Gorgon and Wheatstone LNG projects, the Woodside Petroleum Ltd.-operated North West Shelf project, the Browse LNG project joint venture and Royal Dutch Shell plc's Floating LNG project have created a surge in demand in Western Australia for high-scale contracting services.

In Queensland, developments include QGC Pty. Ltd.'s Curtis LNG project, Arrow Energy Ltd.'s LNG plant project, the Australian Pacific LNG joint venture and Santos Ltd.'s Gladstone LNG project, while in the Northern Territory, Inpex Corp. has started development on the Ichthys project.

Monadelphous has experienced a strong run of contract wins on both sides of Australia around these developments, helping the company deliver record revenue and profits.

The Perth-based company has already won almost $1.04 billion (AUD 1 billion) in new contracts or contract extensions this Australian financial year, with a large percentage of those awards in the oil and gas sector.

In particular, Monadelphous has added strength to its positioning as a leading maintenance services provider in the oil and gas market, where it has recently secured two significant LNG contracts.

"With the award of these new contracts Monadelphous is providing long-term maintenance services to all of Australia's existing on-shore LNG plants," Rob Velletri, Monadelphous managing director, said in a conference call.

"The new long-term maintenance and shut-down services contract with Woodside at the Karratha gas plant in WA, the largest onshore LNG plant in Australia, is a strategic milestone for the company.

"Monadelphous also entered into its first long-term LNG maintenance services contract with QGC for its new LNG plant."

In October 2012, the company was awarded the maintenance contract, worth about $156 million (AUD 150 million), at the Karratha gas plant.

The contract, which started in January for an initial term of three years with the option of two one-year extensions, involves the provision of maintenance and shutdown services.

Monadelphous's contract with coal seam gas company QGC at the Curtis LNG plant, worth $83 million (AUD 80 million), started in January for an initial 6.5-year term.

The company will provide multidisciplinary core maintenance and shutdown services to support the operations phase of the plant, currently under construction at Curtis Island.

Monadelphous has also consolidated its relationship with Chevron Australia after signing a one-year extension to its facilities management services contract at the Gorgon project.

Worth about $135 million (AUD 130 million), the contract is for the operation and maintenance of construction facilities and utilities on Barrow Island.

Leighton Contractors' involvement with Australia's major developments has grown through a series of related contracts won at INPEX's Ichthys project.

In January, Leighton, which holds an oil and gas contract portfolio worth in excess of $4.68 billion (AUD 4.5 billion), was awarded a $960 million (AUD 923 million) contract to undertake Ichthys' onshore LNG facilities main civil works.

The project involves delivering the main civil infrastructure required for the LNG facilities, including piling, foundations, trenching for pipes, cable, sewers and drainage, roads, paving, electrical and instrumentation cabling.

This win added to Leighton Contractors' services division being awarded a four-year, $291 million (AUD 280 million) operations and maintenance contract by JKC Australia for the Ichthys temporary site facilities.

In October 2012, Leighton Contractors was also awarded a $131-million (AUD 126-million) engineering, procurement and construction (EPC) contract by JKC for one of the building packages at Ichthys.

At the Chevron Corp.-operated Gorgon project, the value of Leighton Contractors' contract to deliver the civil and underground works package was increased by $1 billion (AUD 975 million) to an estimated value of $1.86 billion (AUD 1.789 billion).

Leighton said the new estimated value reflected an increased and amended scope of works to provide better flexibility to deliver the package in a more efficient and timely way.

Perth-based Clough has grown its portfolio of oil and gas contracts to more than 20 this financial year.

Clough's energy portfolio across Australia features Chevron's Gorgon and Wheatstone projects, INPEX's Ichthys, Santos' Gladstone and QGC's Curtis.

The company's contract wins include an extension worth more than $20.8 million (AUD 20 million) for its Clough AMEC joint venture for the provision of engineering services to Chevron's oil facilities off the north-west of Australia, and a contract for its joint venture with Transfield Services for construction work as part of QGC's Curtis project.

Kevin Gallagher, Clough chief executive officer and managing director, said the company's outlook had never been stronger with a record order book and strong tender pipeline.

He explained that Clough's oil and gas clients were searching for contractors that could provide enhanced productivity.

"Clough is responding with a number of productivity initiatives," Gallagher said in a conference call.

"Our aim is to set the benchmark for productivity - we aim to do this by establishing the metrics and systems to provide real-time reporting on productivity performance and enable early detection and intervention where we have productivity issues."

Laing O'Rourke, a Perth-based privately-own engineering company, secured a major structural engineering and civil works contract with Bechtel Corp. on the Chevron-operated Wheatstone project.

The company said it would provide more than $520 million (AUD 500 million) in civil structural engineering and construction with the contract.

Wheatstone, situated 7.5 miles (12 kilometers) west of Onslow in the Pilbara region, will consist of two LNG trains with a combined capacity of 8.9 million tonnes per annum and a domestic gas plant.

David Stewart, Laing O'Rourke chief executive officer, said the company was "engaged on almost every one of Australia's major oil and gas projects – and can provide self delivered, construction and engineering services at each link of the gas export chain".

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

View the original article here

Contractors Feast on Australian Projects

Australia's major resources services contractors targeting the local oil and gas sector are taking advantage of the rapid growth being experienced in the industry.

Major new developments around the country continue to provide a wide range of opportunities for contractors such as Monadelphous, Leighton Contractors, Clough Ltd. and Laing O'Rourke.

Chevron's Gorgon and Wheatstone LNG projects, the Woodside Petroleum Ltd.-operated North West Shelf project, the Browse LNG project joint venture and Royal Dutch Shell plc's Floating LNG project have created a surge in demand in Western Australia for high-scale contracting services.

In Queensland, developments include QGC Pty. Ltd.'s Curtis LNG project, Arrow Energy Ltd.'s LNG plant project, the Australian Pacific LNG joint venture and Santos Ltd.'s Gladstone LNG project, while in the Northern Territory, Inpex Corp. has started development on the Ichthys project.

Monadelphous has experienced a strong run of contract wins on both sides of Australia around these developments, helping the company deliver record revenue and profits.

The Perth-based company has already won almost $1.04 billion (AUD 1 billion) in new contracts or contract extensions this Australian financial year, with a large percentage of those awards in the oil and gas sector.

In particular, Monadelphous has added strength to its positioning as a leading maintenance services provider in the oil and gas market, where it has recently secured two significant LNG contracts.

"With the award of these new contracts Monadelphous is providing long-term maintenance services to all of Australia's existing on-shore LNG plants," Rob Velletri, Monadelphous managing director, said in a conference call.

"The new long-term maintenance and shut-down services contract with Woodside at the Karratha gas plant in WA, the largest onshore LNG plant in Australia, is a strategic milestone for the company.

"Monadelphous also entered into its first long-term LNG maintenance services contract with QGC for its new LNG plant."

In October 2012, the company was awarded the maintenance contract, worth about $156 million (AUD 150 million), at the Karratha gas plant.

The contract, which started in January for an initial term of three years with the option of two one-year extensions, involves the provision of maintenance and shutdown services.

Monadelphous's contract with coal seam gas company QGC at the Curtis LNG plant, worth $83 million (AUD 80 million), started in January for an initial 6.5-year term.

The company will provide multidisciplinary core maintenance and shutdown services to support the operations phase of the plant, currently under construction at Curtis Island.

Monadelphous has also consolidated its relationship with Chevron Australia after signing a one-year extension to its facilities management services contract at the Gorgon project.

Worth about $135 million (AUD 130 million), the contract is for the operation and maintenance of construction facilities and utilities on Barrow Island.

Leighton Contractors' involvement with Australia's major developments has grown through a series of related contracts won at INPEX's Ichthys project.

In January, Leighton, which holds an oil and gas contract portfolio worth in excess of $4.68 billion (AUD 4.5 billion), was awarded a $960 million (AUD 923 million) contract to undertake Ichthys' onshore LNG facilities main civil works.

The project involves delivering the main civil infrastructure required for the LNG facilities, including piling, foundations, trenching for pipes, cable, sewers and drainage, roads, paving, electrical and instrumentation cabling.

This win added to Leighton Contractors' services division being awarded a four-year, $291 million (AUD 280 million) operations and maintenance contract by JKC Australia for the Ichthys temporary site facilities.

In October 2012, Leighton Contractors was also awarded a $131-million (AUD 126-million) engineering, procurement and construction (EPC) contract by JKC for one of the building packages at Ichthys.

At the Chevron Corp.-operated Gorgon project, the value of Leighton Contractors' contract to deliver the civil and underground works package was increased by $1 billion (AUD 975 million) to an estimated value of $1.86 billion (AUD 1.789 billion).

Leighton said the new estimated value reflected an increased and amended scope of works to provide better flexibility to deliver the package in a more efficient and timely way.

Perth-based Clough has grown its portfolio of oil and gas contracts to more than 20 this financial year.

Clough's energy portfolio across Australia features Chevron's Gorgon and Wheatstone projects, INPEX's Ichthys, Santos' Gladstone and QGC's Curtis.

The company's contract wins include an extension worth more than $20.8 million (AUD 20 million) for its Clough AMEC joint venture for the provision of engineering services to Chevron's oil facilities off the north-west of Australia, and a contract for its joint venture with Transfield Services for construction work as part of QGC's Curtis project.

Kevin Gallagher, Clough chief executive officer and managing director, said the company's outlook had never been stronger with a record order book and strong tender pipeline.

He explained that Clough's oil and gas clients were searching for contractors that could provide enhanced productivity.

"Clough is responding with a number of productivity initiatives," Gallagher said in a conference call.

"Our aim is to set the benchmark for productivity - we aim to do this by establishing the metrics and systems to provide real-time reporting on productivity performance and enable early detection and intervention where we have productivity issues."

Laing O'Rourke, a Perth-based privately-own engineering company, secured a major structural engineering and civil works contract with Bechtel Corp. on the Chevron-operated Wheatstone project.

The company said it would provide more than $520 million (AUD 500 million) in civil structural engineering and construction with the contract.

Wheatstone, situated 7.5 miles (12 kilometers) west of Onslow in the Pilbara region, will consist of two LNG trains with a combined capacity of 8.9 million tonnes per annum and a domestic gas plant.

David Stewart, Laing O'Rourke chief executive officer, said the company was "engaged on almost every one of Australia's major oil and gas projects – and can provide self delivered, construction and engineering services at each link of the gas export chain".

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

View the original article here

New Energy Minister Faces Australian Cost Challenge

Gary Gray, a former Woodside Petroleum Ltd. corporate affairs chief, has been named Australia's new Minister for Resources and Energy following a cabinet reshuffle of the country's governing Labor Party.

The West Australian replaces Martin Ferguson in the role.

Industry bodies have welcomed Gray to the position, but warned he would be challenged by Australia's ongoing issue of the rising cost of doing business in the country.

The Australian Petroleum Production and Exploration Association (APPEA) believed Gray's appointment, while a positive move for the industry, came at a crucial time in its history.

David Byers, APPEA chief executive, said the industry was presently investing $208 billion (AUD $200 billion) in new projects, including seven major liquefied natural gas (LNG) ventures.

He added the industry was at a turning point, with numerous new projects on the drawing board, but not yet committed.

"Australian oil and gas project costs are among the highest in the world and there are several critical policy areas that require genuine reform if hurdles that currently hinder the local industry's ability to compete internationally are to be removed," he said.

"Most important of these is the need for a stable, predictable and competitive taxation regime that encourages exploration and development investments.

"The oil and gas industry's long-term projects need long-term stability. Yet over the past five years the industry has been confronted with a range of disruptive changes to the taxation regime, affecting the company and resources taxation settings."

The Chamber of Minerals and Energy of Western Australia (CME) also applauded Gray's appointment to the portfolio.

Reg Howard-Smith, CME chief executive officer, said it was good news the important portfolio had been given to a Western Australian, given the state's resources sector accounted for 46 percent of Australia's export income.

"Policy initiatives that focus on reducing costs, duplication and red tape will deliver ongoing economic benefits to all Western Australians," Howard-Smith said.

"Unfortunately we are becoming a less attractive place to develop resources projects when compared with global resource rich nations and investment may be driven to other lower cost regions because of additional layers of taxation and charges, which are continuing to drive up cost for doing business."

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View the original article here

New Energy Minister Faces Australian Cost Challenge

Gary Gray, a former Woodside Petroleum Ltd. corporate affairs chief, has been named Australia's new Minister for Resources and Energy following a cabinet reshuffle of the country's governing Labor Party.

The West Australian replaces Martin Ferguson in the role.

Industry bodies have welcomed Gray to the position, but warned he would be challenged by Australia's ongoing issue of the rising cost of doing business in the country.

The Australian Petroleum Production and Exploration Association (APPEA) believed Gray's appointment, while a positive move for the industry, came at a crucial time in its history.

David Byers, APPEA chief executive, said the industry was presently investing $208 billion (AUD $200 billion) in new projects, including seven major liquefied natural gas (LNG) ventures.

He added the industry was at a turning point, with numerous new projects on the drawing board, but not yet committed.

"Australian oil and gas project costs are among the highest in the world and there are several critical policy areas that require genuine reform if hurdles that currently hinder the local industry's ability to compete internationally are to be removed," he said.

"Most important of these is the need for a stable, predictable and competitive taxation regime that encourages exploration and development investments.

"The oil and gas industry's long-term projects need long-term stability. Yet over the past five years the industry has been confronted with a range of disruptive changes to the taxation regime, affecting the company and resources taxation settings."

The Chamber of Minerals and Energy of Western Australia (CME) also applauded Gray's appointment to the portfolio.

Reg Howard-Smith, CME chief executive officer, said it was good news the important portfolio had been given to a Western Australian, given the state's resources sector accounted for 46 percent of Australia's export income.

"Policy initiatives that focus on reducing costs, duplication and red tape will deliver ongoing economic benefits to all Western Australians," Howard-Smith said.

"Unfortunately we are becoming a less attractive place to develop resources projects when compared with global resource rich nations and investment may be driven to other lower cost regions because of additional layers of taxation and charges, which are continuing to drive up cost for doing business."

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

View the original article here

Local Participation Push for Major Australian Developments

Leaders of Australia's oil and gas industry are working together in an effort to develop methods towards increasing the amount of local content on major developments.

Locally based suppliers servicing the growing liquefied natural gas sector in Western Australia (WA) have expressed concern in recent years about being overlooked for development contracts.

Developers have cited the high Australian dollar, high labor costs and rising energy costs as reasons for opting to award contracts to competing foreign companies, often from Asia.

Despite these obstacles, developers have been urged to do more to increase local participation in projects.

Local suppliers are also being encouraged to develop a better understanding of the criteria to help them win contracts.

The issue was a key topic at the Australasian Oil & Gas Conference in Perth recently where industry groups, government representatives, and oil and gas companies discussed how more local participation could take place.

Paul Johnson, the Australian Government's Energy Resources Supplier Advocate, spoke at the conference and believes oil and gas developers need to take into account the capability and capacity of Australian suppliers if they want to boost the level of local content on their projects.

Johnson, who was appointed to this position in August of last year, said there was much good work happening in the sector to raise the capability of Australian firms to win work, but more could be done by both developers and suppliers.

"Project developers should take into account the limitations faced by Australian suppliers in undertaking large procurement packages, accessing the necessary finance and obtaining sufficient numbers of skilled workers," Johnson said.

"Small adjustments to the way projects are designed, engineered and procured can make a big difference to local suppliers.

"Early consideration of what can be done here should inform the design and engineering approach and basing some of the procurement team in Australia will lead to better engagement with local suppliers."

While major developers have been questioned for the amount of local content on their projects, Chevron reinforced its commitment to local suppliers through its conference presentation.

Colin Beckett, Chevron's general manager at the Gorgon LNG development, explained that the project had so far awarded $18.7 billion (AUD $18 billion) in contracts to local suppliers and created 9.000 jobs in the country.

However, he conceded that many Australian companies had not met the pre-conditions for tendering for work, with reasons including a lack of experience or capacity.

To assist in preparing local firms to win work, Australia's Department of Industry, Innovation, Science, Research and Tertiary Education last year engaged economic advisory firm, Development Impacts, to undertake a project examining best practices by companies successfully supplying into the sector to determine how they meet the needs of project proponents.

Pia Turcinov, Development Impacts director, explained to Rigzone that it found there was more to the issue than obstacles such as a high Australian dollar, a lack of financial profile and Australia's skills shortage.

"They are huge hurdles for Australian companies, but there are other issues surrounding what the benchmarks are that local companies need to meet before they are considered… even in the tender stage," Turcinov, who also addressed the conference, said.

"Our work on this project identified 22 key factors companies need to focus on.

"Yes, price was a major factor, but other key factors were about quality, flexibility, design capabilities, QA systems, technical expertise, after sale service, and financial capabilities and risk profile.

"We looked at factors such as these and how the better performing companies compare and where they are outperforming against expectations."

Turcinov explained that suppliers needed to establish a clear capability beyond just a normal website and marketing brochure, and it was advisable for them to look at forming alliances with other local companies to build profile and capability.

In an election year, both at a federal and state level in WA, political parties in Australia have been prioritizing this issue.

WA's governing Liberal Party regularly produces an industry participation framework aimed at ensuring the local industry receives opportunity to participate in major resource projects.

The opposing Labor Party in WA has also shown its commitment by releasing a discussion paper outlining its openness to the issue.

At a federal level, the governing Labor Party is focusing on strengthening opportunities for the local industry through a proposed plan administering the issue.

Under the plan, major projects worth $519 million (AUD $500) million or more will be required to have an Australian industry participation plan identifying opportunities for local firms.

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

View the original article here

Local Participation Push for Major Australian Developments

Leaders of Australia's oil and gas industry are working together in an effort to develop methods towards increasing the amount of local content on major developments.

Locally based suppliers servicing the growing liquefied natural gas sector in Western Australia (WA) have expressed concern in recent years about being overlooked for development contracts.

Developers have cited the high Australian dollar, high labor costs and rising energy costs as reasons for opting to award contracts to competing foreign companies, often from Asia.

Despite these obstacles, developers have been urged to do more to increase local participation in projects.

Local suppliers are also being encouraged to develop a better understanding of the criteria to help them win contracts.

The issue was a key topic at the Australasian Oil & Gas Conference in Perth recently where industry groups, government representatives, and oil and gas companies discussed how more local participation could take place.

Paul Johnson, the Australian Government's Energy Resources Supplier Advocate, spoke at the conference and believes oil and gas developers need to take into account the capability and capacity of Australian suppliers if they want to boost the level of local content on their projects.

Johnson, who was appointed to this position in August of last year, said there was much good work happening in the sector to raise the capability of Australian firms to win work, but more could be done by both developers and suppliers.

"Project developers should take into account the limitations faced by Australian suppliers in undertaking large procurement packages, accessing the necessary finance and obtaining sufficient numbers of skilled workers," Johnson said.

"Small adjustments to the way projects are designed, engineered and procured can make a big difference to local suppliers.

"Early consideration of what can be done here should inform the design and engineering approach and basing some of the procurement team in Australia will lead to better engagement with local suppliers."

While major developers have been questioned for the amount of local content on their projects, Chevron reinforced its commitment to local suppliers through its conference presentation.

Colin Beckett, Chevron's general manager at the Gorgon LNG development, explained that the project had so far awarded $18.7 billion (AUD $18 billion) in contracts to local suppliers and created 9.000 jobs in the country.

However, he conceded that many Australian companies had not met the pre-conditions for tendering for work, with reasons including a lack of experience or capacity.

To assist in preparing local firms to win work, Australia's Department of Industry, Innovation, Science, Research and Tertiary Education last year engaged economic advisory firm, Development Impacts, to undertake a project examining best practices by companies successfully supplying into the sector to determine how they meet the needs of project proponents.

Pia Turcinov, Development Impacts director, explained to Rigzone that it found there was more to the issue than obstacles such as a high Australian dollar, a lack of financial profile and Australia's skills shortage.

"They are huge hurdles for Australian companies, but there are other issues surrounding what the benchmarks are that local companies need to meet before they are considered… even in the tender stage," Turcinov, who also addressed the conference, said.

"Our work on this project identified 22 key factors companies need to focus on.

"Yes, price was a major factor, but other key factors were about quality, flexibility, design capabilities, QA systems, technical expertise, after sale service, and financial capabilities and risk profile.

"We looked at factors such as these and how the better performing companies compare and where they are outperforming against expectations."

Turcinov explained that suppliers needed to establish a clear capability beyond just a normal website and marketing brochure, and it was advisable for them to look at forming alliances with other local companies to build profile and capability.

In an election year, both at a federal and state level in WA, political parties in Australia have been prioritizing this issue.

WA's governing Liberal Party regularly produces an industry participation framework aimed at ensuring the local industry receives opportunity to participate in major resource projects.

The opposing Labor Party in WA has also shown its commitment by releasing a discussion paper outlining its openness to the issue.

At a federal level, the governing Labor Party is focusing on strengthening opportunities for the local industry through a proposed plan administering the issue.

Under the plan, major projects worth $519 million (AUD $500) million or more will be required to have an Australian industry participation plan identifying opportunities for local firms.

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

View the original article here

Local Participation Push for Major Australian Developments

Leaders of Australia's oil and gas industry are working together in an effort to develop methods towards increasing the amount of local content on major developments.

Locally based suppliers servicing the growing liquefied natural gas sector in Western Australia (WA) have expressed concern in recent years about being overlooked for development contracts.

Developers have cited the high Australian dollar, high labor costs and rising energy costs as reasons for opting to award contracts to competing foreign companies, often from Asia.

Despite these obstacles, developers have been urged to do more to increase local participation in projects.

Local suppliers are also being encouraged to develop a better understanding of the criteria to help them win contracts.

The issue was a key topic at the Australasian Oil & Gas Conference in Perth recently where industry groups, government representatives, and oil and gas companies discussed how more local participation could take place.

Paul Johnson, the Australian Government's Energy Resources Supplier Advocate, spoke at the conference and believes oil and gas developers need to take into account the capability and capacity of Australian suppliers if they want to boost the level of local content on their projects.

Johnson, who was appointed to this position in August of last year, said there was much good work happening in the sector to raise the capability of Australian firms to win work, but more could be done by both developers and suppliers.

"Project developers should take into account the limitations faced by Australian suppliers in undertaking large procurement packages, accessing the necessary finance and obtaining sufficient numbers of skilled workers," Johnson said.

"Small adjustments to the way projects are designed, engineered and procured can make a big difference to local suppliers.

"Early consideration of what can be done here should inform the design and engineering approach and basing some of the procurement team in Australia will lead to better engagement with local suppliers."

While major developers have been questioned for the amount of local content on their projects, Chevron reinforced its commitment to local suppliers through its conference presentation.

Colin Beckett, Chevron's general manager at the Gorgon LNG development, explained that the project had so far awarded $18.7 billion (AUD $18 billion) in contracts to local suppliers and created 9.000 jobs in the country.

However, he conceded that many Australian companies had not met the pre-conditions for tendering for work, with reasons including a lack of experience or capacity.

To assist in preparing local firms to win work, Australia's Department of Industry, Innovation, Science, Research and Tertiary Education last year engaged economic advisory firm, Development Impacts, to undertake a project examining best practices by companies successfully supplying into the sector to determine how they meet the needs of project proponents.

Pia Turcinov, Development Impacts director, explained to Rigzone that it found there was more to the issue than obstacles such as a high Australian dollar, a lack of financial profile and Australia's skills shortage.

"They are huge hurdles for Australian companies, but there are other issues surrounding what the benchmarks are that local companies need to meet before they are considered… even in the tender stage," Turcinov, who also addressed the conference, said.

"Our work on this project identified 22 key factors companies need to focus on.

"Yes, price was a major factor, but other key factors were about quality, flexibility, design capabilities, QA systems, technical expertise, after sale service, and financial capabilities and risk profile.

"We looked at factors such as these and how the better performing companies compare and where they are outperforming against expectations."

Turcinov explained that suppliers needed to establish a clear capability beyond just a normal website and marketing brochure, and it was advisable for them to look at forming alliances with other local companies to build profile and capability.

In an election year, both at a federal and state level in WA, political parties in Australia have been prioritizing this issue.

WA's governing Liberal Party regularly produces an industry participation framework aimed at ensuring the local industry receives opportunity to participate in major resource projects.

The opposing Labor Party in WA has also shown its commitment by releasing a discussion paper outlining its openness to the issue.

At a federal level, the governing Labor Party is focusing on strengthening opportunities for the local industry through a proposed plan administering the issue.

Under the plan, major projects worth $519 million (AUD $500) million or more will be required to have an Australian industry participation plan identifying opportunities for local firms.

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

View the original article here

Further Scrutiny for Australian Coal Seam Gas Projects

SYDNEY - Australian coal seam gas projects or large coal mines that could lower the quality of water resources will now be assessed by federal lawmakers under new laws proposed Tuesday.

It comes as big international oil companies and miners invest billions of dollars developing resources for export to fast-growing Asian economies, while facing opposition from other land users like farmers and horse breeders. The most contentious projects are clustered on the eastern seaboard in Queensland and New South Wales states.

Adding a new layer of approvals is likely to push up costs of projects at a time when returns are coming under increasing pressure. Coal seam gas developments led by BG Group PLC, Origin Energy Ltd. and Santos Ltd. in Queensland have all overrun budgets due to technical challenges and issues ranging from labor shortages to the high Australian dollar.

The impact of coal seam gas and coal mines on water resources is only monitored by state governments at present. Federal lawmakers are able to take account of water issues if they relate to threatened species or internationally significant wetlands.

"The proposed amendments will ensure that coal seam gas and large coal mining developments must be assessed and approved under national environment law, if they are likely to have a significant impact on a water resource," Environment Minister Tony Burke said in a statement.

To comply with the federal approval process, additional information will be required on top of what's needed in the state-based approvals process. Mr. Burke, however, said most of the data would have already been addressed in state-based procedures.

Companies already undergoing an assessment will need to work on providing additional information for the federal approvals process "straight away", Mr. Burke said.

Copyright (c) 2012 Dow Jones & Company, Inc.

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

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Australian Oil, Gas Workers World's Best Paid at $163,600/Year

SYDNEY - Workers in Australia's oil and gas sector are the highest paid in the world and earn 25% more than U.S. counterparts, according to a new survey that lays bare the pressures facing companies like Chevron Corp. as they invest billions of dollars to meet Asia's booming energy demand.

Australian workers pocket an average of $163,600 a year to work on projects that range from platforms drilling for natural gas in deep water off the northern coast to onshore rigs seeking to unlock deposits of unconventional gas in the sweltering heat of the Australian Outback, the survey by recruitment firm Hays found.

The labor market has tightened as more than $160 billion is invested in Australia's natural gas industry, which has to compete with big mining projects for pipe layers, welders and engineers. As a result, Hays said the bulging pay-packets offered Down Under are even higher for imported workers--coming in at $171,00 a year.

A combination of vast natural gas reserves, a stable political environment and proximity to fast-growing Asian economies have put Australia on course to overtake Qatar as the world's biggest exporter of liquefied natural gas, or LNG, by the end of the decade. Around 12 multi-billion LNG projects are either under construction on its coastline or on the drawing board.

With a population of around 23 million people--less than ten times smaller than the U.S.-- Australia lacks a deep labor pool for major projects and large salaries are often required to entice workers to remote corners of the country.

Spiralling labor costs have already contributed to a series of budget overruns at Australian gas-export projects operated by Chevron, BG Group PLC and Australia's Santos Ltd. In the largest example, Chevron said higher labor costs were partly to blame for a 21% increase in the cost of building the Gorgon liquefied natural gas development to 52 billion Australian dollars ($53.5 billion).

But in a mild positive for developers, the average Australian salary in the oil and gas sector fell 0.7% in 2012 compared to 2011.

Norway is the second most expensive country to hire local workers, with an average annual salary of $152,600 needed for recruitment, Hays said. New Zealand ranks third with a median pay packet of $127,600.

The survey was based on the responses of 25,000 people working across 53 countries. The U.S. ranked fifth with $121,400 for local workers, while Sudan brought up the rear with $31,100.

"The guide does reveal signs of a slowdown in salary growth for both imported and local labour in Australia, which may be a sign that the market has passed its peak in terms of demand for specialist oil and gas skills," said Matt Underhill, managing director of Hays Oil & Gas.

Copyright (c) 2012 Dow Jones & Company, Inc.

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

View the original article here

Australian Oil, Gas Workers World's Best Paid at $163,600/Year

SYDNEY - Workers in Australia's oil and gas sector are the highest paid in the world and earn 25% more than U.S. counterparts, according to a new survey that lays bare the pressures facing companies like Chevron Corp. as they invest billions of dollars to meet Asia's booming energy demand.

Australian workers pocket an average of $163,600 a year to work on projects that range from platforms drilling for natural gas in deep water off the northern coast to onshore rigs seeking to unlock deposits of unconventional gas in the sweltering heat of the Australian Outback, the survey by recruitment firm Hays found.

The labor market has tightened as more than $160 billion is invested in Australia's natural gas industry, which has to compete with big mining projects for pipe layers, welders and engineers. As a result, Hays said the bulging pay-packets offered Down Under are even higher for imported workers--coming in at $171,00 a year.

A combination of vast natural gas reserves, a stable political environment and proximity to fast-growing Asian economies have put Australia on course to overtake Qatar as the world's biggest exporter of liquefied natural gas, or LNG, by the end of the decade. Around 12 multi-billion LNG projects are either under construction on its coastline or on the drawing board.

With a population of around 23 million people--less than ten times smaller than the U.S.-- Australia lacks a deep labor pool for major projects and large salaries are often required to entice workers to remote corners of the country.

Spiralling labor costs have already contributed to a series of budget overruns at Australian gas-export projects operated by Chevron, BG Group PLC and Australia's Santos Ltd. In the largest example, Chevron said higher labor costs were partly to blame for a 21% increase in the cost of building the Gorgon liquefied natural gas development to 52 billion Australian dollars ($53.5 billion).

But in a mild positive for developers, the average Australian salary in the oil and gas sector fell 0.7% in 2012 compared to 2011.

Norway is the second most expensive country to hire local workers, with an average annual salary of $152,600 needed for recruitment, Hays said. New Zealand ranks third with a median pay packet of $127,600.

The survey was based on the responses of 25,000 people working across 53 countries. The U.S. ranked fifth with $121,400 for local workers, while Sudan brought up the rear with $31,100.

"The guide does reveal signs of a slowdown in salary growth for both imported and local labour in Australia, which may be a sign that the market has passed its peak in terms of demand for specialist oil and gas skills," said Matt Underhill, managing director of Hays Oil & Gas.

Copyright (c) 2012 Dow Jones & Company, Inc.

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

View the original article here

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Tweet Posted on Dec 22, 2012 Wikimedia Commons

A slab of rock overhanging an underwater canyon near the northeast border of Australia threatens to generate a tsunami when it eventually breaks off, researchers warned Friday.

Marine geologists from Australia’s James Cook University came across the one cubic kilometer chunk of seafloor perched on the continental shelf within the Great Barrier Reef.

Researchers don’t know when the shelf will collapse, but are certain that “it is slowly giving way … is absolutely going to collapse and when it does fall it will fall one kilometre into the adjacent basin.” The result would be a “localized tsunami that will affect the Queensland coastline” of Australia, around 40 miles away.

—Posted by Alexander Reed Kelly.

Agence France-Presse via The Raw Story:

“Undersea landslides are a well understood geological process but we didn’t know there were any on the Barrier Reef,” geologist Robin Beaman told AFP.

“We found this one large block that stood out. It is sitting on top of a sub-marine canyon, cutting into the slopes and it is in the preliminary stage of collapse.”

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TAGS: australia great barrier reef james cook university marine geology natural disaster queensland underwater landslide



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