SEAAOC day one rundown

Paul Bloxham, chief economist for Australia and New Zealand at HSBC

Paul Bloxham, chief economist for Australia and New Zealand at HSBC

Day one of SEAAOC kicked off with a mix of sobering forecasts for the industry from Platts, HSBC and Wood Mackenzie, and was followed up by project updates from a handful of the biggest operators in the country.

Paul Bloxham, chief economist for Australia and New Zealand at HSBC opened with an optimistic outlook for the Australian economy after a sustained global recovery from the 2008 global financial crisis and the deteriorating resources boom.

He said despite the concerns over China’s slowing economy, the Asian superpower’s now 7 per cent annual growth rate is appropriate for the economy’s size, and “Australia will need to simply shift in terms of its growth sources.”

With regard to Australia’s LNG future, he said pressure from the continued low oil price will keep new projects at a minimum, however bolster the exports trade over the short to medium term.

“As a lot of those projects come on stream, we are starting to see a ramping up of exports in coal, iron ore and in particular, LNG is just about to really happen,” he said.

“LNG is going to be a very large contributor to GDP growth this year, but in particular in 2016 and 2017. And not only that, but then the maintenance and the service industries that come along with such an industry will create jobs.”

Dr Keith Suter, foreign and international affairs editor and foreign policy analyst at Sky TV, continued the global outlook theme for the day, outlining the geopolitical implications of the United States’ “shale revolution”, OPEC’s decision to maintain supply levels during the oil price glut, Iran petroleum production implications on the Middle East, and the role of Russia and Australia in the scheme of things.

He concluded that while the low oil price is a consequence of OPEC’s decision to maintain supply in the face of a resurging US energy production market in the shale revolution, the global slump may in fact help Australia in the long run.

“Australia and the region are export reliant economies. They need a flourishing global economy to ensure their own guaranteed, long-term survival,” he said.

“Now, the lower oil price is actually a good thing in that it is helping China transition into its consumer based economy, and helping Australia to trade with them on other levels such as tourism and education.”

Some of Australia’s biggest LNG producers and explorers followed up the global outlook.

Frank Krieger, Vice President Exploration & Development, ConocoPhillips allayed suspicions that the company had entered pre-FEED stages at its Poseidon Field in the Browse basin or at its Caldita-Barossa assets within the Bonaparte Basin.

“Speculation we are at pre-FEED at these projects is premature,” he said.

According to Mr Krieger, the company is currently still at the appraisal drilling stage for both projects.

Hitoshi Okawa, Director Corporate Coordination at INPEX told SEAAOC delegates that community engagement during the Ichthys LNG project development has been one of the key lessons learned.

“What would you do different?” he said.

“We have to be proactive in telling the community what is going on and what will happen. Then there are no surprises.”

Martin Riley, GM of exploration new resources for Origin called for progressive state government policy to help the industry evolve.

“We have a progressive and supportive government here in the Northernt Territory,” he said.

“Going down the NSW path has all but put the industry back at least a decade, if not dead forever. We must as an industry pull together and win the hearts and minds of the people. We should dispel the myths about onshore.””

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