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Enfield puts locals at risk

LOCAL industry is in danger of missing out on major engineering and construction work on Woodside’s $1.5 billion Enfield oil project, casting doubt on its chances of winning work on future big offshore projects such as Gorgon.

Australian engineering companies Thiess and Tenix had been looking to bid for the fabrication of some of the “topside modules” for Enfield.

However, they have been told that Woodside is proposing to call tenders for all of the topside modules as a single package.

Given the scale of the project – it involves fabrication of about 8,000 tonnes of steel – this would effectively rule out local industry participation.

Senior Woodside executive Keith Spence met with Industry Minister Clive Brown on Monday to discuss Enfield, indicating the political sensitivity surrounding local industry involvement.

Mr Brown said he was planning further discussions with Woodside ahead of a final contracting decision in coming weeks.

“My concern is maximising local content,” he said.

“Woodside is very much aware of that.

“I am sure they are very well aware that both government and the business community have an active interest in this matter.”

The importance of Enfield extends beyond the project in its own right.

It is seen as a critical test of local industry’s ability to supply capital equipment for big offshore oil and gas projects.

The project is also the first big test of the recently completed fabrication precinct at Jervoise Bay that taxpayers funded to the tune of $200 million.

The fabrication precinct was built specifically to help local industry win extra work on big projects such as Enfield.

Woodside’s final decision on Enfield will also be seen as a test of the nationalist sentiments it espoused when it successfully lobbied the Federal government to oppose Shell’s takeover bid in 2001.

“While globalisation is part of commercial life today, I believe there is a line to be drawn by the Government at some point with respect to the national interest,” Woodside chairman Charles Goode said at the time.

Woodside’s final decision on the Enfield contract is likely to turn on the extent to which a single package for the topside modules would reduce costs and risks.

The Enfield oil field is located about 40 kilometres north west of Exmouth.

Woodside is planning to use a floating production, storage and offloading (FPSO) facility, similar to the facility it built several years ago for the Laminaria oil field.

It has already contracted Samsung Heavy Industries of South Korea to build the 260-metre long hull for the FPSO facility.

Woodside said Australian companies did not have the capability to build the hull.

The company has traditionally had a strong commitment to maximising local content.

Mr Brown said Woodside had made “quite extraordinary efforts to get to a very good local content level” on the North West Shelf project’s $1.6 billion Train Four expansion, now underway.

Onshore projects such as Train Four typically have a large volume of on-site construction activity, which helps to maximise local content.

In contrast, offshore projects such as Enfield, Santos’ Mutineer project and ChevronTexaco’s much larger Gorgon project typically use modular construction techniques, with most of the work done elsewhere.

Woodside has awarded an engineering, procurement and construction management contract for the Enfield FPSO to a Perth-based Fluor Amec joint venture.

Santos has short-listed Maersk Contractors (of Denmark) and Modec Inc (of Japan) as FPSO contractors for the Mutineer project.

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