FED:Shell dismisses Woodside takeover talk
561 words
7 September 2010
Australian Associated Press Financial News Wire
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(c) 2010 Australian Associated Press Pty Ltd. All Rights Reserved
SHELL By Rebecca Le May
PERTH, Sept 7 AAP - Royal Dutch Shell says it's not preparing to take over Woodside Petroleum Ltd.
It also expects a decision on whether to proceed with its Prelude floating liquefied natural gas (LNG) project off Western Australia will be made within months.
Shell executive vice-president of Upstream Australia, Ann Pickard, says the energy giant isn't in the hunt for LNG-focused Woodside, which is 34 per cent held by the Dutch company.
"We are not getting ready to buy it again," Ms Pickard told a business briefing in Perth on Tuesday.
Shell failed to gain control of Woodside in 2001 when the Australian government blocked the move, citing national interest issues.
Recent media reports speculated Shell and BHP Billiton Ltd were preparing a joint bid for Woodside last year.
Ms Pickard told the briefing Shell expected to make a final investment decision to proceed with Prelude in the next few months.
The Prelude field, some 475 kilometres north-northeast of Broome, is set to be the world's first floating LNG development when it begins production in 2016.
Ms Pickard also said Shell would look to non-traditional sources for labour for Prelude, amid expectations Chevron's massive Gorgon LNG project will hog skilled workers.
Gorgon, which is 25 per cent held by Shell, is expected to start production in 2014 and create 10,000 direct and indirect employment opportunities at peak construction.
"I see Roy (Krzywosinski, managing director of Chevron Australia) and my good friends from Chevron were at one of our refineries the other day recruiting for Gorgon," she joked during the presentation.
"Gorgon is running a couple of years ahead of us, so I think they'll get a (processing) train up and we'll get them back.
"While we're competitors, we're also colleagues ... and I think that is a really good challenge.
"We will be going into Australia to non-traditional (sources), say the mines and refining industries and the other trades, to look for operators."
She said Shell would over the next five years send 200 people to LNG plants around the world, along with deepwater plants and marine institutions to gain the necessary skills.
Ms Pickard said Australia was poised to take the lead with new generation oil and gas developments, but it wasn't as stable a jurisdiction as perceived by some.
"The stars may have aligned for Australia," she said.
"The gas was discovered decades ago but the combination of one, the technology and two, the market being available, have come together to provide the opportunity for Australia to move into the forefront."
But Australia's gas renaissance may not happen if "above-ground risks" such as tax regime changes scare off the industry.
Ms Pickard said Nigeria, one of Shell's prime investment destinations, tried to introduce a new tax code and lost about $100 billion worth of oil and gas investment over the past five years.
She said "above-ground risks" in WA included petroleum retention licence issues, unions and changing fiscal regimes.
However, customers would queue up for Australian gas to diversify their gas sources from the other two majors suppliers, the Middle East and Russia.
"They like to not have all their eggs in one basket," Ms Pickard said.