Royal Dutch Shell Plc, Europe’s largest oil company, urged Australia to prioritize education to boost skilled worker numbers and encourage technological developments to counter the threat of high costs.
Australia’s natural gas industry, which faces increasing competition from energy producers in North America, Asia and East Africa, needs “the right regulatory and tax policies to drive innovation and investment,” Shell Chief Executive Officer Peter Voser said today in notes for a speech in Brisbane, where he’s attending an industry conference.
“Rising costs have become a significant challenge for companies doing business here,” Voser said. “There is also the inevitable challenge of accommodating different land uses and land users. All these issues must be resolved in a fair and practical way if Australia is to move forward.”
Shell plans to invest $30 billion in Australia over five years, Voser reiterated today. The Hague-based company is a partner in Chevron Corp.’s Gorgon liquefied natural gas project and Woodside Petroleum Ltd.’s proposed Browse LNG venture. It’s also developing the Prelude floating LNG project.
Prelude will add an estimated A$45 billion ($43 billion) to Australia’s gross domestic product and more than A$12 billion to tax revenue, Voser said. The company also plans a large-scale project to supply LNG for the transportation industry along Australia’s biggest trucking route, Voser said.
Voser, who was appointed CEO in July 2009, announced earlier this month that he will retire in the first half of 2014. Voser has been cutting costs and expanding projects to add production. Shell will invest about $100 billion through 2014 after selling at least $21 billion in assets.
Shell’s Arrow Energy Ltd. venture in Australia with PetroChina Co. is in talks to cooperate with competitors building LNG plants in the state of Queensland, Chief Financial Officer Simon Henry told reporters on a call this month.
Shell deliberately delayed a decision to go ahead with its proposed LNG project on Australia’s east coast amid cost inflation in the country, Henry said at the time. BG Group Plc, ConocoPhillips and Santos Ltd. are building three projects on Queensland’s Curtis Island at a cost of more than $60 billion.
One of the better options for Shell’s Arrow venture is to supply gas to one of the existing projects or to the domestic market, Mark Wiseman and Anthony Ta, Sydney-based analysts at Goldman Sachs Australia Pty, wrote in a May 23 report.
Shell said in November it may delay until 2014 a decision on whether to go ahead with the Arrow venture.