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Ellice-Flint unloads on activists

FORMER Santos boss John Ellice-Flint, who is trying to develop an east coast gas play with CSG co...

Ellice-Flint unloads on activists

Santos drilled the Amrit-1 deepwater duster along the southern margin under Ellice-Flint's watch in 2004, albeit in the Otway Basin with far less interest from the general public than BP did with its twice-rejected proposals to drill the first wells in the Bight for a decade.

Echoing the words those who want to unlock the vast coal deposits in the Galilee Basin of Queensland, Ellice-Flint said Australia's resources industry and economic prosperity are "being held to ransom by a few".

"We are simply way out of line with the rest of the world in the way our governments rely on resources industry companies to obtain the social licence to operate, at the same time generating widespread international belief that Australia is just not open for business," he said.

Ellice-Flint said sovereign risk was now a major risk factor for anyone looking at investing down under.

"We all need to be more aware that these resource companies have a global choice of where they employ their skills and money and, where they are adjudged to spend more time on social issues in obtaining the right to drill in Country A, they will most definitely shift their focus to Country B," he said.

The recent loss of a potential $1 billion investment by BP in the Great Australian Bight was blamed on BP's shifting priorities, although activists claim they put pressure on the oiler to quit the area.

Ellice-Flint said it was easier for the British oiler to undertake work in USA and Egypt than in South Australia, and BP's last minute decision to leave was not only a major blow to the Australian resources sector, to say nothing of a setback for assessment of an exciting new exploration province.

He called on the Commonwealth government to ensure resource companies can do their work unencumbered "without interruption by the loud voices of minority groups", such as green activists or being wrapped in complex native title issues.

"Regulatory problems in Australia include use of a legal loophole enabling the submission of applications at the 11th hour of the review process so as to intentionally re-start approval review processes," he said.

"The result of this so-called strategy is creating up to a one year delay in final reports being submitted or negating the validity of the proposed one year study into a project. This approach causes a huge waste of taxpayers' time and money."

He said state and federal governments should set strict deadlines for all submissions.

"They can then get on with the uninterrupted job of evaluating all submissions within six months and then give an opinion," he said.

"Changing the system with a more strict process would shut the door on the current anomaly which provides a last minute opportunity for the examining body to accept last minute applications from dis-consenting parties.

"It has pushed Australia into an extremely high cost operating environment where we are no longer competitive internationally."

He also wants to change the process so that weighting is given to the location of submissions based on their distance from a project.

"Why should someone from Sydney protesting against a development in Townsville have equal weighting as a local submission? That is all quite clear in the USA where submissions made from outside of the state where a project is located are actually disqualified," he said.

He said BP made it clear it still liked the Great Australian Bight geologically, inferring that it did not understand Australia's economic conditions and regulatory uncertainties.

"BP is one of only a few companies globally with an investment portfolio based on basins it understands geologically and economically," Ellice-Flint said.

"It truly has the expertise to operate safely in the stringent environmental conditions of the Great Australian Bight, with a purpose built, evaluation program to suit our local conditions and to minimize the operational and safety risks."

Despite the blemish of the fatal Deepwater Horizon disaster on its record, Ellice-Flint said BP's plan for a four well program over the next two years was one of the world's leading examples of how to operate a deepwater program with the latest technology.

"BPs exit is a loss to Australia in so many ways - from evaluating the Earth's crust to all the

local BP social programs, supporting local and national contractors, and in education, specifically the associated university programs," he said.

"This was an immense skill and learning opportunity, as well as a potential economic opportunity that has gone begging."

Australia will now lose out on the potential royalties for crucial new infrastructure, health, roads, education, and law and order, he said.

Statoil retains its interest in BP's former blocks, and has the option of continuing with the exploration, but will not spud the Stromlo-1 well without partners.

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