Paul Scarr (Queensland, Liberal Party) Share this | Hansard source

I wish to rise and speak in favour of these bills, the Offshore Petroleum and Greenhouse Gas Storage Amendment (Titles Administration and Other Measures) Bill 2021 and the Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Amendment Bill 2021. I want to really pay a compliment to Minister Pitt in relation to how he's managed a very difficult issue in relation to Northern Endeavour.

Senator Whish-Wilson is correct insofar as this was an old piece of infrastructure that was sold by Woodside to a purchaser. Woodside had made the decision—and I am saying this as a Woodside shareholder, and that's on my register of interests—that it didn't want to extend the production life of that asset. It made that decision and then it went out to the market to sell that asset. I have a firm view, as someone who was worked in the mining industry and been involved in transactions in the mining industry, that if you own and operate mining assets or oil and gas assets you have a very strong obligation arising out of legal requirements but also your social licence to operate, when you transfer that to someone else, to ensure the person you transfer it to has both the financial and the technical capability to discharge their legal obligations. That did not occur in this case. Northern Endeavour went under.

Instead of all the Australian taxpayers having to meet that huge liability—there are hundreds of millions of dollars associated with decommissioning that platform—it is fit and proper that the oil and gas industry bear the lion's share of meeting that cost. It's right that the oil and gas industry should look towards Woodside and ask Woodside's senior executive team: 'How did it come to this? How did it come to this, that you've sold this ageing piece of infrastructure to a company that didn't have the technical or financial capacity to meet its obligations and, in that context, you have now caused a levy to be imposed upon the whole industry?' Woodside needs to reflect on that very, very carefully.

The second point I want to make is this. There was a gaping hole before this legislation that would allow someone to be the subject of an upstream takeover where someone acquired the shares in a holding company and didn't have to necessarily meet the technical and financial capability obligations of the actual tenement holder. When oil and gas companies set up special purpose vehicles to hold oil and gas tenements, you can't just look at the special purpose vehicle; you have to look up the corporate tree. So it is fit and proper that an obligation be added in a takeover context for the ultimate holding company to prove that it has the financial and technical wherewithal to discharge its obligations. We have $52 billion of these contingent liabilities on the horizon and we must make sure that the commercial operators who are legally and morally responsible, as part of their legal requirements but also their social licence to operate, do exactly all that they need to do so that these facilities are safely decommissioned for the benefit of all the Australian people and for the environment.