ConocoPhillips’ Australian head has warned domestic gas reservation policies and anti-industry activism could threaten the development of a viable market in Western Australia.
The state’s potential for unconventional gas – including tight and shale gas – is estimated to be much larger than the offshore gas projects already being developed by global majors.
That potential prompted ConocoPhillips to partner with New Standard Energy in exploring in the Canning Basin.
But the company’s President Australia – West, Todd Creeger, says that potential will not be realised if significant challenges were not overcome.
Of the challenges, Mr Creeger said discussions around implementing significant domestic gas reservation policies were of particular concern.
“In evaluating the business rationale to develop a resource, investors look for stable fiscal settings, access to markets and predictable regulations,” Mr Creeger said.
“In this regard, conversations about domestic gas reservation policies are unsettling.
“Policy makers must take a long term global view in understanding the commercial implications of protectionist measures that create unnecessary risk to a project’s viability.”
Operators are currently required to allocate 15 per cent of gas produced from WA projects to the domestic market.
Mr Creeger also said a lack of understanding, which had led to anti-industry protests and activism, could also inhibit the establishment of a lucrative market for unconventional gas.
“The coordinated and assertive spreading of misinformation has hampered progress in Eastern Australia and in the United States,” he said.
“Well funded and organised anti-development activism may impact WA’s ability to realise its potential.”
Mr Creeger said, in a bid to pacify activists, ConcoPhillips was committed to ongoing dialogue with key stakeholders.
“We need to listen to stakeholders and respond with appropriate action.
“This includes encouraging the sharing of scientific, accurate and transparent information about technologies, processes, safeguards and responding quickly to stop the spread of misinformation.”
Mr Creeger has also urged the government to focus on investing in infrastructure which would enable development.