Shell quashes Woodside bid talk
Anglo-Dutch supermajor Shell today denied talk it was preparing a second takeover bid for Woodside Petroleum, and warned that Australia's "gas renaissance" may be short-lived if "above-ground risks", including tax changes, changed the country's investment climate.
Shell's warning came as the Australian Labor Party sealed a deal with two independent MPs, effectively giving it a majority in the country's federal parliament.
"We are not getting ready to buy (Woodside) again," Ann Pickard, vice president of the Upstream Australia unit of Shell told a business briefing in Perth, Australian Associated Press reported.
Shell, which has a 34% stake in Woodside, failed to gain full control of the company in 2001 after the Australian government blocked the move, citing national interest concerns.
Media reports had suggested that Shell had teamed up with Australian mining giant BHP Billiton and were preparing to launch a joint bid for Woodside.
Meanwhile, Pickard said Shell expects to make a decision on whether to proceed with its Prelude floating liquefied natural gas project off Western Australia within months.
The Prelude field, which lies 475 kilometres north-north-east of Broome, is set to be the world’s first floating LNG development when it begins production in 2016.
Pickard also said Shell would look to non-traditional sources for labour for Prelude, amid expectations Chevron’s massive Gorgon LNG project will hog skilled workers.
Gorgon, which is 25% cent held by Shell, is expected to start production in 2014 and create 10,000 direct and indirect employment opportunities at peak construction.
‘‘I see Roy (Krzywosinski, managing director of Chevron Australia) and my good friends from Chevron were at one of our refineries the other day recruiting for Gorgon,’’ she joked during the presentation.
‘‘Gorgon is running a couple of years ahead of us, so I think they’ll get a (processing) train up and we’ll get them back.
‘‘While we’re competitors, we’re also colleagues ... and I think that is a really good challenge.
‘‘We will be going into Australia to non-traditional (sources), say the mines and refining industries and the other trades, to look for operators.’’
She said Shell would over the next five years send 200 people to LNG plants around the world, along with deep-water plants and marine institutions to gain the necessary skills.
Pickard added Australia was poised to take the lead with new generation oil and gas developments, but warned that the country was not as stable a jurisdiction as perceived by some.
‘‘The stars may have aligned for Australia,’’ she said. ‘‘The gas was discovered decades ago but the combination of one, the technology and two, the market being available, have come together to provide the opportunity for Australia to move into the forefront.’’
But Australia’s gas renaissance may not happen if ‘‘above-ground risks’’ such as tax regime changes scare off the industry.
Pickard said Nigeria, one of Shell’s prime investment destinations, tried to introduce a new tax code and lost about $100 billion worth of oil and gas investment over the past five years.
She said ‘‘above-ground risks’’ in WA included petroleum retention licence issues, unions and changing fiscal regimes.
However, customers would queue up for Australian gas to diversify their gas sources from the other two majors suppliers, the Middle East and Russia.
‘‘They like to not have all their eggs in one basket,’’ she added.
Pickard also played down the potential for mergers to occur between rival liquefied natural gas projects being built in Queensland.
She said that co-operation between the four rival projects on some infrastructure and construction activities, such as river crossings and dredging, should occur but "consolidation is less needed and it may or may not happen".
Acknowledging that her predecessor Russell Caplan was very clear that he thought consolidation should occur, Pickard said: "I think at this point in time, what will drive consolidation is probably more the market than the actual activities (of the ventures)."
Pickard assumed her role from Caplan on 1 August.
"I don't have a driver to (merge) because I've got my LNG sold," she said.
Shell is developing a project with partner PetroChina, which has agreed to buy some LNG from the development. Rival projects are being built by BG Group, a joint venture between Santos and Petronas, and a joint venture between Origin Energy and ConocoPhillips.
Tuesday 7 September 2010
Upstream
http://www.upstreamonline.com/live/article228684.ece
