Q. In your view, what have been the key highlights/successes for the industry in the past 12 months?
The past 12 months have seen a number of exciting developments in the oil and gas industry that all underscore the importance of gas in the regional energy mix, and create great opportunity for Australia in general. We have seen great progress in brownfield LNG developments including Scarborough, Browse and Barossa Caldita driven by the regional demand opportunity. And at home, assuming high rates of penetration and advances in technology of renewables, we still see strong demand for gas. The domestic gas landscape has seen Beach integrate Lattice, Mitsui acquire AWE and Santos acquire Quadrant. And whilst we have seen some progress on advancing the badly needed and politically stranded resources in NSW and NT, there has been much activity to firm the east coast domestic gas supply with LNG import terminals progressing their investment cases. Finally, in the midst of a low exploration spend this country, what little exploration drilling there has been has seen success in the Dorado discovery – the largest oil discovery in Australia for decades.
Q. What do you predict will be the major issues that the oil and gas industry will be dealing with in the coming 12-24 months?
Critical to the success of industry in Australia is that old intangible “perception”. Intangible in nature, it’s hard to define the cost of the current issue and is better considered an opportunity to harness in shaping the nature and extent of future success. The findings of the Hayne Royal Commission into the financial services industry are a stark reminder of this. The findings set out principles for guiding financial services companies on their obligations to customers and the broader community. These principles have broader applicability and it’s worth considering how the findings might apply to all industry including the oil and gas industry. Hayne questioned the fundamental pillars upon which organisations are built. He has called into question what is valued, how organisations are governed, what is produced, how products are sold, and how individuals can be held to account. This thinking on culture and values has also been reflected in the recently released ASX Corporate Governance Council revised guidelines which set out thinking on best practice corporate governance.
To be successful in addressing this challenge we must consider alignment of the levers of culture including the complex interplay between them. This might include the following key questions.
- Do you have a structured, organisation wide view of current culture?
- Is your current culture supporting you to meet your purpose and strategy?
- Are you clear on your desired culture, and has the Board endorsed this target?
- To what degree are you measuring and reporting culture to your leaders?
- To what degree do you perceive cultural tension in your organisation?
Q. As a key contributor to the event, the APPEA Conference is clearly a major strategic conference in EY’s calendar. What do you anticipate APPEA 2019 will deliver to delegates at such a crucial time for the industry?
APPEA 2019 is a chance to celebrate the industry’s crucial position in supplying secure, affordable and sustainable energy to Australia and the region. We can all reflect on the commercial and technological successes and breakthroughs which have made Australia’s oil & gas industry among the most innovative and competitive in the world.
It has long been forecast that commodity price volatility was likely to be sharper and more frequent than in the past couple of decades, and that forecast is holding true. And with a federal election looming, there will be volatility and uncertainty in the media too. Resilience remains a key characteristic of future success. Oil & gas makes a significant contribution to the Australian economy and will continue to do so for the foreseeable future. The APPEA conference provides a connection to robust parts of our economy and offers delegates the opportunities to remain informed, insightful and relevant. Not only can we help the industry remain strong, we can also play a leadership role in the energy future for Australia.
Russell Curtin will be at the EY Collaboration Centre in the APPEA 2019 Exhibition to discuss the hot topic of ‘Reimagining the energy future’ at 1:00pm Tuesday 28 May.