Hey PNG, you want a piece of this?Shell Woodside JV is reportedly considering a $15 Billion FLNG over the land based plant. Big Oil can whine about inefficiencies, Gov't regulation and taxation in Aussie all day long but the simple fact is the world needs LNG and even these marginal gone crappy ROI projects will be built. Shell/CVX don't operate in a vacuum.
Speaking at the In the Zone conference in Perth, Chevron Australia managing director Roy Krzywosinski cited a study that found projects in Australia were 40 per cent more expensive than the US and the local workforce was 60 per cent less productive than its American counterpart.
Chevron, which is building the $43 billion Gorgon liquefied natural gas project and $29bn Wheatstone LNG project in the Pilbara, is the biggest foreign investor in Australia.
But the company is widely expected to confirm in the next three weeks that the cost of building Gorgon on Barrow Island, off the Pilbara coast, has blown out significantly. (Huh, didn't they just do that??)
Mr Krzywosinski attacked the Gillard government's carbon tax and other fiscal measures.
"Industry confidence in making major capital investments is being affected by the current fiscal environment," Mr Krzywosinski said at the University of Western Australia.
"This increases business costs, erodes international competitiveness and diminishes investor confidence. The recent introduction of a carbon tax has imposed another additional cost not borne by overseas competitors.
"These costs add to the growing list of disincentives to invest here. "Most industry and political observers suspect further tax imposts on the industry.
"This should worry anyone who is interested in Australia securing long-term investment, jobs and economic growth."
Mr Krzywosinski said Australia was "at a crossroads" in its attempts to attract resources investment, adding that $100bn of investment was in doubt.
"Governments must follow through on commitments to reform regulatory inefficiencies and put an end to federal-state duplication," he said.
"Policies must support and encourage investments and workforce productivity improvements."
Rio Tinto's managing director for China, Ian Bauert, told the conference that Australia had become the most expensive place to do business for Rio after being considered the cheapest place to do business five years ago.
"Unless the focus of future debate is on addressing such issues, my feeling is Australia is likely to fall behind and seriously underachieve our potential in the Asian Century," he said.
Woodside Petroluem and National Australia Bank chairman Michael Chaney said Australia would only achieve an acceptable level of economic growth through improved productivity.
"I'm concerned that if we don't manage to lift our productivity, we are going to find it very difficult to achieve any real economic growth," Mr Chaney said.
He added that Australia had achieved acceptable levels of growth due to high terms of trade, high levels of investment and strong population and workforce growth.
But he stressed that capital productivity had been poorer than it should be because of over-regulation and inefficient project management.
"One of the reasons for that is that the current industrial relations legislation works against productivity growth," he said.