Rex Patrick (SA, Independent) Share this | Hansard source

I rise to speak on the proposed legislation, which amends the Offshore Petroleum and Greenhouse Gas Storage Act. I note that this amending legislation, 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, basically deals with a number of different problems that have been created by the conduct of a number of oil and gas companies.

I want to start by saying that we have a really big problem in this country, and that is that we are having our resources produced, extracted and, in the case of LNG, turned into liquefied form and shipped off overseas and we are getting almost no return. We know that, in 2018-19, $62 billion of oil and gas was exported from this country, and the Australian taxpayer, the owner of the resources, got $1 billion in petroleum resource rent tax in return. Of the $62 billion of taxpayers' resource that was shifted off overseas, the taxpayer got $1 billion—that's it. Now, if people don't recognise that that is a problem, then we are beyond help.

That is the situation with all of our oil and gas wealth. If we were to look at how others, particularly places like Norway and Qatar, have done in relation to the oil and gas that they extract from their economic exclusion zones or their territories, they have done substantially better than us. Norway have over a trillion dollars in their sovereign wealth fund, and most of that has come from the return that they get from the extraction from underneath the North Sea of the resources of the citizens of Norway.

We have done a really poor job. In fact, a committee that's looking into oil and gas and whether or not we're maximising the benefit for Australians found that it's likely that, on the numbers, the return to the taxpayer on our oil and gas is minus 36 per cent. We actually lose money by extracting oil and gas, because we end up subsidising the oil and gas industry through tax write offs and other such support. The oil and gas industry, who are mostly multinationals, then take the resource and send it off overseas. Exxon Mobil, according to its tax transparency data, had $42 billion of revenue over the last five or so years, and they've paid not a cent in corporate tax. If anyone doesn't see that there's a problem with this—and I'm sure the Greens will stand up, quite rightly, and say that as well as not getting any money for it, as well as having to subsidise the industry, of course all of that oil and gas then goes off overseas to be consumed and used and producing carbon emissions. There might be some argument if the Australian population were getting huge benefits from this and had been getting huge benefits from this, but there is basically no reason whatsoever for us to want to, in any way, produce oil and gas in this country because nothing comes back to the taxpayer. It's a fundamental problem.

My understanding of the nature of this bill is it seeks to close off a loophole in relation to stranded assets. A good example of where this has been a problem is in the case of the Northern Endeavour. The NorthernEndeavour was owned by a company related to Woodside, and a few years ago they sold the tenement—in fact, legally correctly, they sold the company that owned the tenement. Had they sought to sell the tenement, that would have invoked a whole range of analysis by NOPTA to make sure that the company that was taking it over was financially sound, but, instead, it was just a change of shareholding at the company level. Low and behold, we ended up with a company called NOGA, Northern Oil & Gas Australia, owning the asset NorthernEndeavour and, indeed, the tenement, and the allegation is that they didn't have the capital to actually operate the field. What we saw happen was, in 2019, NOPSEMA issued a prohibition notice against the company after a component fell onto the deck, so it was a safety issue—and I genuinely understand it was a safety issue—but the company basically then was put in a position where it didn't have any cash flow because it wasn't producing oil and it didn't really have a pathway out of the prohibition notice. For three or four months the company operated, trying to remedy the situation. What happened was the company ended up having to go into administration. The story thus far: Woodside sells an ageing asset to a company at a peppercorn price, that company operates to a point where they get a prohibition notice and that drives them into liquidation. The interesting thing here is I had a conversation with NOPSEMA at estimates back in, I think it was, October of 2019, saying, 'If you don't help this company come out of the prohibition that it's in, if you don't lay out on the table what they need to fix with the platform, then what will happen is the company will go into administration and the taxpayer will end up carrying the can, having to deal with an asset and all of the different structures on the sea bed, and that would cost hundreds of millions of dollars.' And the head of NOPSEMA, Mr Smith, said to me, 'No, that won't happen, Senator.' You know what? A month later it did! It did happen, and the company went into administration, and, of course, we ended up with a situation where the taxpayer has had to take over the operation of the NorthernEndeavour. So, right now, in the Timor Sea, we have a vessel, an FPSO, that is being operated by the Australian taxpayer in lighthouse mode, costing something in the order of $10 million a month—it might be somewhere between $5 million and $10 million. That's an astounding fact. I think, at the last count, it was $80 million of taxpayers' money that had been spent operating a vessel in lighthouse mode, and that does not include the cost to remedy the vessel, to remove the vessel and to return the sea floor back to its original state. That's likely to run into a billion dollars. Of course, the government has announced that it's going to try and claw that back from the industry. But I can tell you that the events that took place with the Northern Endeavour, which are the driving factor behind this bill, were known before the Northern Endeavour situation occurred. So it's quite unexplainable how we got into this mess and how the taxpayer has borne the cost of all this.

Whilst I will be supporting this bill, I can't not mention the total failure of government in terms of dealing with this whole circumstance. I say that this vessel, with a bit of help—far less than the money that had been spent—could have been kept in production, could have kept employing Australians and could have kept contributing to our fuel security situation because of the storage that was on the Northern Endeavour as a vessel. Unfortunately, this has just been a big sink for the Australian taxpayer. It's not a good situation. So, in the end, I'll be supporting this bill, but I foreshadow that, in the committee stage, I will be moving an amendment that looks at transparency. I'll talk to that amendment when the time comes, but, to give you a bit of a tip, it simply deals with things like production data, with requiring a company to basically say: 'This is how much I am producing. This is how much is left in the tenement'—useful information to shareholders and useful information to Australian taxpayers, who actually are the owners of the resource. I know that some on the other side may say, 'Whoa—that's company information.' But you know what? When you come along and you talk to the Australian government and you say, 'I'd like to extract some resource from your EEZ,' there's a cost to that in terms of your transparency with the Australian public. When we get to that point in the committee stage, I'll certainly be drawing out the findings of ACIL Allen in relation to whether or not this information should be held secret.

Anyway, I won't delay the chamber any further. I will be supporting the bill, but I will also be moving amendments to it.