IAN Macfarlane has lambasted the high cost industry Australia’s oil and gas sector is currently experiencing, attacking the Maritime Union of Australia in its handling of workers’ rights, saying it is damaging the long- term prospects of projects.
The Minister for Industry told media at the sidelines of the APPEA conference in April that high labour costs were hurting the industry and needed to drop significantly to help lower project capital outlays.
Construction costs on some of Australia’s biggest LNG projects have spiralled, including the Gorgon development of WA’s North coast, bringing into question Australia’s ability to continue to attract investment dollars.
“In our view some of the wages that are being paid are eye opening, but the real issue is around the conditions,” he said.
“To pay two thirds of the average Australian wage for someone to share a room with someone they never seen and the room being the common living area not the bedroom or the bathroom.
“You don’t have to be Einstein to work out that that’s driving our costs through the roof.
“If you look at some of the activities of the MUA in terms of disrupting construction of Gorgon- again you don’t have to be Einstein to work that out.
“What can we do?
“I guess in the end market forces will sort this out a lot faster than government.
“And for the people on Gorgon who stand there and watch Prelude arrive. That will be the moment of realisation that they have priced themselves out of the market. And they will be unemployed”
“As these boats come down from Korea and park themselves on our shore there’s all those jobs that could have been but won’t because of union demand, especially [around conditions] are just not comparable to anywhere else in the world.”
Differing slightly from union demands and the implications it is having on the industry, Mr Macfarlane referred to a speech a few years back where he said there wouldn’t be another greenfield LNG development in Australia.
“Well I’m starting to wonder if there will be a brownfield in the next decade.”
With expansions slowed at Gorgon and Arrow Energy’s LNG export plans uncertain, Mr Macfarlane said FLNG would dominate the sector.
However he emphasised that the industry can’t, and shouldn’t, lose opportunities to expand mega projects like Wheatstone, Gorgon and the newest export hub at Gladstone.
Mr Macfarlane, a self-confessed realist and a pragmatist, insisted there can be lucrative long-term employment opportunities for LNG if it was approached realistically, and sensibly.
“In the end, you are better off having a job than earning a future for six months. There can be a long term job in the construction industry in LNG if people are sensible about conditions and the demands about those conditions.”