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 24/04/01

Transcript No. 2001/044

Transcript
of
Hon Peter Costello MP
Treasurer

Interview with Paul Murray, 6PR
Tuesday, 24 April 2001
10.50am

E&OE

SUBJECTS: Shell/Woodside

MURRAY:

Good morning Treasurer.

TREASURER:

Good morning Paul.

MURRAY:

Good to talk to you. Treasurer, does it matter how the foreign markets react to your decision?

TREASURER:

Look, Australia operates a welcoming climate for foreign investment. That is the first point I would make and we encourage it where it develops Australias economy and creates jobs, and it is very rare that we reject an application to the Foreign Investment Review Board. This was one of those rare occasions and the reason I took the decision that I did is I am not thinking about tomorrow or the next day, I am thinking about Australias largest energy resource for the next decade, two decades and three decades, and I believe it is in the national interest of Australia that the operator, manager and marketer of our largest resource develops it to its full and sells LNG in preference to exports from any other area in the world and to those large Asian markets. I think that is in the national interest of Australia and that is why I took the decision that I did.

MURRAY:

(inaudible) Shell has an inherent conflict here (inaudible) holding a (inaudible)...

TREASURER:

You have got to remember that when large Chinese, or Japanese, or Korean energy users are looking at taking the supply of LNG they can take that from the North West Shelf, or they can take it from the Middle East, or they can take it elsewhere in Asia, and I want them to take it from Australia because I want to boost Australias export income and that is in our national interest, and I will always take the decisions that I think are right to support Australias export interests.

MURRAY:

(inaudible) for that gas terminal in China. Shell actually (inaudible) consortium against Woodside. Shell I think (inaudible) at that stage (inaudible) Indonesia. Was this a matter that you looked to in making your decision?

TREASURER:

Well, when you speak to people who are involved in the marketing of Australias LNG they will tell you that they go up there and they compete with other areas and in some of those other areas Shell has an interest. Now, Shell has an interest in the North West Shelf, but the critical thing to my mind is who is going to operate, manage and market the North West Shelf? And I want the North West Shelf to have every opportunity of beating foreign bids. That is good for Australia, it is good for Western Australia and I think it is in the national interest.

MURRAY:

Treasurer, Shell, in its statement yesterday, said it had offered you significant undertakings and it thought that the joint venture partners, (inaudible), would ensure the optimum development of the North West Shelf. It includes the (inaudible) independent marketing company owned and resourced by all the joint venture (inaudible). Why wasnt that a factor for you?

TREASURER:

Shell, when I raised concerns, Shell did offer a number of conditions and I said yesterday I think that Shell approached this matter in a very positive way. What concerned me, however, was I only have the power to give the approval or prohibit it. If I were to give the approval on certain conditions and those conditions were not subsequently met I cant take the approval back, it is gone, it is finished. And what concerned me was, in relation to a number of those conditions, notwithstanding the fact that Shell would use its best endeavors, it would have to get the agreement of the other joint venturers, there could be intervening developments elsewhere in the world, there could be different views amongst the shareholders and my approval would have been given but the enduring conditions could not be guaranteed. And I thought if the subsequent conditions could not be guaranteed on an enduring basis that was one of the things that made a conditional approval risky.

 MURRAY:

Treasurer, in the last 5 years there has been (inaudible) and relocated in London. You have seen AXA take over National Mutual, but their Asian operations arent (inaudible) out of Australia. Were you disappointed with those outcomes?

TREASURER:

Neither of those outcomes were approved by me, they were under the previous government, but obviously I followed those outcomes. In both of those outcomes an approval was given subject to subsequent conditions and I think in both of those situations it illustrates some of the difficulties about insisting on conditions to be undertaken subsequent to the bid. And we were always in this position where the bid had gone through, it had been approved. There wasnt much you could do about it after it had gone through. If you really want to ensure that the conditions are met it is better to have them met before the approval goes through or at least be sure that they can be guaranteed. And that is something, and I did take into account previous experience, it was something that was weighing on my mind.

MURRAY:

And finally, Mr Costello, Alan Wood, writing in The Australian today, suggests that there might be the fingerprints of Hanson on this?

TREASURER:

Paul, anyone who knows me knows how I believe One Nation and its economic prescriptions would do a lot of damage to Australia, and anyone who knows me knows that I would not be influenced in the slightest by her or her political movement. I had one obligation here, and one obligation only, I had to decide in the end what was in the national interest. You may agree with me, you may not agree with me, people are entitled to their own opinions, but somebody had to decide this and it was my responsibility and I did it to the best of my ability based on what I think is best for Australia and that is the only thing I considered.

MURRAY:

Okay, thank you.

TREASURER:

Thanks very much Paul.