Royal Dutch Shell, Europe’s largest oil company, plans to invest $30 billion in Australia over the next five years, CEO Peter Voser has confirmed.
Shell announced the plan earlier this month, but has delayed
going ahead with the project due to high inflation in the
country.
During his opening remarks at the Australian Petroleum
Production and Exploration Association conference in Brisbane
today, Voser reaffirmed his company’s intention to invest in
Australia, but warned the country needs to adopt friendlier tax
policies.
“Rising costs have become a significant challenge for
companies doing business here,” said Voser, The
Australian reported.
Most importantly Australia must enact “the right regulatory
and tax policies to drive innovation and investment,” he
added.
Voser warned Australia risks losing $100 billion in potential
new investments from Europe, the US, and Africa if it doesn’t find
a way to regularize its tax regime and make itself more business
friendly.
The lion’s share of Shell’s new investment will be in liquefied
natural gas (LNG), which it already has two ongoing projects in
Australia.Royal Dutch Shell is a partner in Chevron Corporations’
LNG project and Woodside Petroleum Limited’s’ LNG venture, and is
also developing their own LNG project in Australia called
Prelude.
Prelude is a $12 billion floating gas rig currently under
construction in South Korea. When it is completed, it is expected
to be the largest offshore floating facility in the world and could
drill eight production wells. It is targeted to begin
drilling in 2013 200 km off the west coast of Australia.
The fields are expected to produce 3.6 million tonnes of LNG a
year, offshoretechnology.com reported. According to Royal Dutch
Shell, global demand in LNG is set to rise as much as five-fold to
500 million tons a year in 2025.
The Prelude project will add about $43 billion ($45 AUD) to
Australia’s gross domestic product and more than $12 AUD billion to
tax revenue, Voser has said. The company also plans to provide LNG
to Australia’s demanding ground transport industry.
Voser, who rebranded the company into a leader in LNG under his
tenure, has announced he will retire in the first half of 2014.
Voser was appointed CEO in July 2009 and has played an active role
in cutting costs and expanding projects.
Shell announced another sudden restructuring strategy in Africa
on Monday.
Royal Dutch Shell’s East African discovery efforts have flopped,
and they are now cancelling plans with Anadarko Petroleum Corp to
explore coastal zones near Mozambique. Instead, Shell plans to deep
water drill off the coast of Benin and Gabon in West Africa,
believing it will drive more shareholder revenue.
Anadarko is trying to sell as much as 10% in stake in Mozambique
territories, which are estimated to hold as much as 1.84 trillion
cubic meters of gas.
This article originally appeared on: RT