The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Peter Costello

Peter Costello

Treasurer

11 March 1996 - 3 December 2007

Transcript of 23/04/01

Transcript No. 2001/043

Transcript
of
Hon Peter Costello MP
Treasurer

Interview with Howard Sattler, 2SM
Tuesday, 24 April 2001
9.25 am

E&OE

SUBJECTS: Shell/Woodside, Peter Nugent

SATTLER:

Are you there Treasurer?

TREASURER:

Good morning, how are you Howard?

SATTLER:

Okay, well this is a big, is this the biggest decision you have had to make while you have been Treasurer?

TREASURER:

One of the toughest decisions I have had to make. It was something that we had submissions from all of the parties. It was, there were arguments both ways and I had to make the decision in the end and I knew that people would disagree with the decision whichever way I went. So, it was a tough decision.

SATTLER:

Yes, but how does it sit with your advocacy of globalisation. You are an advocate of that arent you, you and the Prime Minister?

TREASURER:

Well, I am in favour of foreign investment which develops Australia and creates economic growth and jobs.

SATTLER:

Wouldnt this have done that?

TREASURER:

Well, when you are looking at the North West Shelf you are dealing with Australias largest energy resource and Shell Australia already has an interest in it, as do some other foreign companies, but the question here was the manager and operator and marketer. And the manager, operator, and marketer is Woodside, and the question was whether we should approve Shell getting majority of shares in the operator and manager. Now, I think it is in Australias national interest for that resource to be developed to its full potential, for the LNG exports coming out of the North West Shelf to be pushed for sale in foreign markets in preference to LNG from any other field in the world.

SATTLER:

But you have almost indicated that you did not either trust Shell or did not have the absolute water tight guarantee that they would promote North West Shelf gas ahead of all others. You have virtually said that havent you?

TREASURER:

What I have...

SATTLER:

Because of their other competing interests?

TREASURER:

What I had to do, is I had to decide where the national interest of Australia lay. And I think the national interest of Australia lay in keeping an arrangement where you have got an independent operator, manager and marketer, and the reason I think that is that this is such an important resource for Australia. The export earnings of this project dwarf nearly all our other export industries, and we very much need that to be developed to its full capacity and when people are selling LNG up in China or Japan, I want Australian LNG to be put first.

SATTLER:

Now, why wouldnt Shell do that if 76 per cent of all the resources of natural gas that they are involved with are in the North West of Western Australia?

TREASURER:

I am not casting any aspersions on Shell. Shell has been an investor in Australia for 100 years, but, Howard I was faced with the decision, do I think the national interest would be defended if you changed the current arrangements? I thought that the current arrangements, where you do have the independent operator, manager and marketer ensure that that resource is being developed to its maximum and I have to make sure that it is.

SATTLER:

You keep talking about the national interest but what about the Liberal Partys interests in retaining seats in Western Australia, because that is what some of the members over there were telling you. They said if you do this, if you let them buy this up, we will lose seats?

TREASURER:

No, the only thing...

SATTLER:

Well, they did say that to you, I know they did.

TREASURER:

Well, nobody put anything to me in those terms at all. I had thousands of people putting views to me. Members of the public, Members of Parliament, Shell, Woodside, the other joint venturers, BP, BHP, everbodys putting views, but at the end of the day the law is that these bids have to be tested against the national interest and that is the only thing that I can have regard to. And that is, I obey the law and that is what I did.

SATTLER:

Would you entertain another bid by Shell?

TREASURER:

If Shell were to put forward another proposal it will be considered on its merits. Yes it will.

SATTLER:

You havent shut the door on it?

TREASURER:

I am required to make a decision on a particular proposal, I made a decision on this proposal, anybody is entitled to make a new application. It will be considered on its merits.

SATTLER:

Would you like to see BHP become a suitor for Woodside? You know, the big Australian?

TREASURER:

If BHP wants to put up a proposal that would be considered on its merits, but I am not sitting there re-designing the company arrangements on the North West Shelf. That is not my job. The only job I have in this is where there is a foreign action I have to look at the national interest and when I looked at it on this specific proposal, and Howard, these are the most complicated things imaginable, they are really complicated...

SATTLER:

I am appreciating that...

TREASURER:

...the legal, the corporate structures, the submissions, and all you can do is just focus on the deal thats in front of you. It took me hours, days, weeks, to go through all of that and at the end of the day someone had to make the decision, Howard, and it was me and that is the decision I have made, for better or for worse. I think it is the right decision.

SATTLER:

And do you want Shell to stay in Australia?

TREASURER:

Yes, we very much want Shell to stay in Australia. And Shell today owns what Shell yesterday owned which is one-sixth of the North West Shelf, nothing has happened, Shell hasnt lost any of the interest that it had. This is a question as to what would happen to the share structure of the operator and manager.

SATTLER:

Pauline Hanson has told me on the programme this morning she thinks we should not allow any foreign takeovers here until the Australian dollar is worth the equivalent 60 cents to the US dollar. What do you think of that?

TREASURER:

I think she is probably just engaging in opportunism.

SATTLER:

It is a victory for her politics today, isnt it?

TREASURER:

Rubbish. Pauline Hanson had (inaudible) this decision, and the truth of the matter is at the end of the day foreign investment is a good thing for Australia. If we had not have had foreign investment then we most probably would not have developed the North West Shelf in the way we have. This is a question as to who was going to manage and operate that resource and I took a decision on that and I was obliged to do so in the national interest.

SATTLER:

Okay, just before you go, totally unrelated. I know you want to pay a tribute. You have lost a good political colleague and a friend today.

TREASURER:

Yes...

SATTLER:

Peter Nugent.

TREASURER:

Yes, this morning, one of my colleagues, Peter Nugent, the Member for the federal electorate of Aston in Melbourne, suffered a massive heart attack and died. It is a terrible loss. He was a friend of mine. We had come into the Parliament together in 1990. My heart goes out to his widow, Carol, and his family and he will be sorely missed by all of his colleagues.

SATTLER:

I do appreciate your time today. I know it is a down day for that reason alone. Thank you very much for joining us.

TREASURER:

Thanks very much.

SATTLER:

Good.