Bill Shorten (Maribyrnong, Australian Labor Party, Parliamentary Secretary for Disabilities and Children's Services) Share this | Hansard source

The purpose of the Offshore Petroleum Amendment (Datum) Bill 2008 is to make a minor technical amendment to the datum provisions included in the Offshore Petroleum Act 2006. The amendments in schedule 1 of this bill have retrospective effect from 1 July 2008 to provide benefits to industry, including the removal of uncertainty about title boundaries for petroleum titles, ensuring alignment between existing and future titles, and facilitating the award of new exploration permits and the release of new exploration acreage. There will be no adverse effects on industry due to the retrospectivity.

Drilling or digging for oil has occurred in one way or another for hundreds of years. The Chinese, for instance, invented a bamboo rig to obtain oil and gas for lighting and cooking. But only in the last 40 to 50 years has humanity been able to efficiently extract petroleum from beneath the seas, an achievement that I believe ranks with the 20th century’s mightiest technological triumphs.

I had the honour of representing workers in the offshore oil and gas industry in my previous occupation and I got to know many of them very well. It is a very hard and difficult job working in the offshore industry. I found the helicopter rides hard enough! In particular, I would like to acknowledge the contributions of a number of proud offshore workers who I had the pleasure of working with: John Clarence, who spent 30 years as a caterer in Bass Strait; Tony McDonald, who has spent 30 years as an Esso operator and is on Kingfish A at the moment—indeed, as I talk to the Committee; Colin Fisher, who worked as a caterer for 25 years on Western Australian drilling rigs; Dale Bond, who has spent 20-plus years with Esso, is a health and safety representative working right across the fields and is currently at Kingfish West; Paul Flood, who has worked with Schlumberger in Bass Strait for 10 years; Bruce Pendlebury Nabors, who spent 10 years as a driller; Ross Ritter, who worked for 20 years as an electrician with Esso; Vinnie Heaton-Harris, who worked for 15 years at Esso offshore; Scott Mckenzie, who is currently at Cossack Pioneer Woodside and has worked in the industry for the last 12 years; and Damien Beaumont, who has spent the last five years drilling in Western Australia. The list of people who work in this fine industry is almost infinite.

According to the Australian Petroleum Production and Exploration Association, or APPEA, over 15,000 people are employed directly in the Australian petroleum industry, from rig tender workers, divers and seismic vessel workers to workers on mobile offshore drilling units, pipe-laying vessels, construction vessels and floating production and storage off-take facilities. It is also estimated that more than 30,000 additional jobs are created in this most important industry through suppliers and contracting and support companies.

Given that the offshore petroleum industry accounts for about 90 per cent of the total Australian industry in this field, producing nearly 30,000 megalitres in 2006-07, the offshore industry would also be expected to account for 90 per cent of the employment in this field—or about 13,500 direct jobs and 27,000 indirect jobs. Australian exports of refined and unrefined petroleum products were valued at over $10 billion in the 2006-07 financial year.

Australian petroleum production has been declining slowly since a peak in 2000. However, the Australian Bureau of Agricultural and Resource Economics, or ABARE, projects that production will increase from now over the medium term before declining to below 500,000 barrels a day by 2029-30. This increased production will likely be met from new offshore reserves. The number of onshore exploration wells has been declining over the past two decades, while the number of offshore wells drilled has remained approximately constant. In contrast to onshore activity, offshore exploration expenditure has been increasing significantly.

Despite the difficulties of the procedure and the nature of the work, we have been forced to look well beyond our shores for such a precious resource. Locating an oil and gas ‘trap’, as it is known, and extracting the oil and gas is difficult enough on land. But offshore, in deep and often stormy waters, it can be an awesome undertaking. Potential traps are identified by analysing seismic survey data, but whether they contain oil or gas will not be known until a drill bit penetrates the structure. Directing the drill bit to a precise location, perhaps several kilometres away, requires sophisticated computer technology. A navigation device installed above the drill bit feeds back information which enables the exact position of the well to be measured and monitored.

In Australia up to 100 offshore wells per year are drilled. About a quarter of these are development wells to produce oil or gas found by previous drilling. Before a well can be drilled, government approval must be obtained. Drilling must then conform to statutory conditions, and further operations are covered by industry codes of practice.

In Australia’s medium to large fields, fixed production platforms are commonly used. These platforms house all the processing equipment and can accommodate up to 80 workers, who typically work a 12-hour day, one week on and one week off, or sometimes on longer cycles of two weeks on, two weeks off. There are also concrete structures which are big enough to store oil; gravity holds them on the seabed. The world’s biggest platforms are larger than a football field and rise above the water as high as a 25-storey office tower. The largest platforms in the world can be home to up to 500 workers.

There are still some issues which workers in the industry inform me need addressing in the future—issues which, of course, this legislation cannot deal with. These include ensuring that there are specific offshore national licensing procedures and that accredited certificates of competency are required for high-risk work—the cranes, the rigging and the scaffolding, for example; improving and standardising accommodation standards across the offshore industry to ensure that the men who work in their shifts have reasonable accommodation when they are not working; addressing the skills shortage—the use of visa workers in drilling and servicing companies is becoming more common through a lack of genuine training in past years by the industry; and ensuring that the regulatory body, NOPSA, has proper enforcement powers to make sure that standards and guidelines work throughout the offshore industry.

This legislation provides certainty to the industry. It is important that, when oil companies are developing the fields of Bass Strait and other resources, they look to source much of the work from Australian contracting companies, as opposed to perhaps bringing in companies from overseas who may have alliances with the oil companies drilling in Australia but who may be more expensive in the Australian operation. The foreign companies receive favouritism because of arrangements in other oilfields, to the disadvantage of Australian producers.

The offshore oil industry is an important industry for Australia. The workers employed in that industry, the unions that represent them and management do a great job to try to secure our energy supplies for the future. I commend the bill to the Committee.

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