NEWS ARCHIVE

Voelte comes out punching

THERES a fine line between brave and foolish, and right now Slugcatcher reckons hes watching two ...

The two chaps in mind are the man who runs Telstra, Australia’s biggest telephone company, and the man who runs Woodside, the biggest oil and gas company.

Sol Trujillo is the telephone king. Don Voelte wears the petroleum crown.

Trujillo, with the aid of a few offsiders, has declared war on the Federal Government over the national broadband system. Voelte, all on his own, has declared war on the Western Australian Government over a controversial domestic gas retention policy.

Given that in both cases the governments being targeted make many of the rules by which Telstra and Woodside do business, it would seem to be a courageous thing to accuse them of incompetence or in Voelte’s case, telling the WA Government that it has a policy which is an “absolute joke”.

Two thoughts occurred to The Slug when he heard those comments from Voelte, either he’s dead right (but really ought not to have said it), or he’s dead right (and really doesn’t care that he’s saying it).

Of those possibilities, there seems little doubt that we are in “don’t care” territory, with the only question left being: why is this so?

As ever, The Slug has an answer. In both cases we are dealing with “fire-proof” executives who have decided to adopt a classic “crash, or crash through” management approach – because they have no intention of hanging around for much longer, and they’re going to call it the way they see it.

Setting Trujillo aside because telephones and broadband internet are really not half as interesting as petroleum, it is worth focusing on the game being played by Voelte because it goes to the heart of future gas development along Australia’s west coast.

What’s happened so far is that Voelte has been desperately keen to grow Woodside. After all, it’s what he’s paid to do.

But as fate would have it, he’s encountered a series of issues which have slowed, but not stopped, growth. Promised oil reserves in recent discoveries have shrunk, costs have blown out, exploration has become more expensive, and LNG development proposals have been hit by all sorts of objections ranging from Aboriginal rock art to environmental protests.

The best illustration of the problems of the past few years is that if Woodside had not “booked” gas reserves in its Pluto gas field thanks to an early (too early?) development decision, total reserves of oil as gas might have fallen last year.

With so much pressure being felt in so many places, including problems in the executive suite, the last thing Voelte needed was a WA Government policy which effectively said, “You must sell at least 15% of your gas at a discount to local customers”.

With reserves dangerously close to declining, projects in trouble, and people in adjoining offices giving him the heebie-jeebies, the last thing Voelte needed was a government dictating his gas prices.

At some point Voelte decided enough was enough. He’s on a contract, getting paid to do a job. He doesn’t care if the contract is renewed and will do his job even if that means declaring war on the WA Government.

Which is precisely what he’s done.

So far the WA Premier Alan Carpenter hasn’t replied to the Voelte’s caustic assessment of his gas retention policy – which is hardly a surprise, as he has his hands full given allegations of high levels of corruption and incompetence in his government.

If Carpenter did hit back, it would simply mean having to fight on another front – against a man who is “fire-proof”.

Unless The Slug is badly mistaken, Voelte’s declaration of war on government, plus his announcement that Woodside’s asset portfolio is to be streamlined, and that he’s determined to develop the Pluto and Browse Basin LNG fields, makes for an extremely interesting year ahead at Woodside.

Perhaps it will be Voelte’s last hurrah – but what a hurrah it will be!

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