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

Contact Exploration Announces Participation in New Acreage and Well

Contact Exploration said Wednesday that it will be participating in a new non-operated Montney well, immediately adjacent to its existing 25 percent working interest Kakwa acreage. The operator advises that drilling of this well is expected to start in mid-February. Contact is to pay 23.75 percent of the costs of drilling and casing this well to earn an average 23.75 percent working interest in the Montney Formation in 2.25 gross sections of lands contiguous to Contact's existing Kakwa acreage position, subject to a 5 percent non-convertible gross overriding royalty on the production from the well. Once earned, Contact will hold 27 gross (12.75 net) sections of Montney acreage at Kakwa.

The first Contact-operated horizontal Montney well has been on production since Dec.1, 2012. Various capacity bottlenecks associated with downstream processing restricted December 2012 production from this well. Upon introducing additional condensate handling equipment at the well site on Jan. 4, 2013, Contact has maintained stable gross production averaging 3.8 million cubic feet per day (mmcfd) and 575 barrels per day (bbld) well head condensate. Contact has a 37.5 percent working interest in the 13-17 well, before payout. 

Contact's second operated Montney well has been successfully tied into downstream processing facilities. In January 2013, the 14-30 well was flowed for only a brief period, due to the third party gas plant not having capacity for the extremely high levels of free flowing condensate from the well.

Contact's third operated Montney well is being drilled from the same surface location as the 14-30 well, with drilling scheduled to be finished in mid-February 2013, and completion operations anticipated to be finished by mid-March 2013. Once completion operations on the 3-19 well are finished, Contact will equip the 14-30 and 3-19 wells in a similar fashion to the 13-17 well, such that condensate can be separated at location, allowing for flow of natural gas from these wells to the third party facility and for condensate to be trucked directly to the sales point. Contact has a 25 percent interest in both the 14-30 and 3-19 Wells. 

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