A newly completed study of cities focused on the energy sector has ranked Perth high on the list of international destinations, as an increasing number of global oil and gas companies build their presence in Western Australia.
“Perth surprised us; we thought it would be much further down the pecking order, being relatively new to the energy game,” report author Matthew Tonts said.
One of the key findings was that Perth came in at number seven globally, when ranked by the number of offices that global energy companies have here, and the importance of those offices.
“Over the space of a very short period of time, particularly in the energy economy, Perth is occupying a very significant regional position,” Professor Tonts told the Australian Gas Technology conference this week.
“The connections and connectivity up to South-East Asia and in Australia are particularly important.
“It’s by far the most important energy city in Australia, far ahead of Sydney and Melbourne.
“At a global scale, it’s probably regarded as one of the mid-tier cities and certainly moving up the rankings.”
The new study, undertaken during the past six months, was based upon data showing where the world’s top 100 energy companies have their offices.
The ‘Platts 100’ listing includes just one company, Woodside Petroleum, with its global headquarters in Perth.
Professor Tonts’ research team at the University of Western Australia layered extra analysis on the base data to get a more comprehensive picture of global networks.
“For every firm we looked at where every one of their offices was located, and they were in 491 different cities,” Professor Tonts said.
The researchers gave a weighting to each of the offices, depending on whether they were a global headquarters, a regional headquarters, a national headquarters, and so on.
The study also analysed reporting lines, to see how closely each office was connected to the global headquarters.
“If we tally those scores, we find Perth does extraordinarily well in the global network,” Professor Tonts said.
Houston was the number one city on this measure, followed by London and Singapore.
They were followed by Moscow, Jakarta, Dubai, and then Perth.
The key driver behind the research findings is the growing investment in LNG projects in and around WA.
Shell transferred its country chair from Melbourne to Perth three years ago, and has retained that structure after Andrew Smith succeeded Ann Pickard.
Other global heavyweights such as ExxonMobil and BP have retained their country headquarters in Melbourne.
Professor Tonts said the research showed that the global energy network was extremely complex, particularly when companies were involved in different stages of the value chain, such as extraction, refining, distribution and retailing.
Undeterred by the challenge, the UWA team applied mathematical analysis to their task, looking at incoming and outgoing connections.
This means the number of offices that report to your city, and the number of offices that you report to.
“Perth reports fairly well on both measures,” Professor Tonts said.
It was ranked 11 out of 100 for outgoing connections and 18 out of 100 for incoming connections.
“Clearly the two most important cities in all of this are Houston and London.”
As head of UWA’s school of earth and geographical sciences, Professor Tonts has undertaken a series of studies in partnership with the Committee for Perth.
The energy cities report, to be released later this year, followed a major report last year titled ‘Perth as a global mining and energy resources hub’.
It highlighted the diverse commodity base driving the WA economy, in contrast to cities like Houston and Aberdeen, which are focused on the oil and gas sector, or cities such as Denver and Johannesburg, that are mining focused.