EnergyNewsBulletin.

net - Battlelines drawn over local content in WA

Page 1 of 2

HOME

ABOUT US

ADVERTISE

PREMIUM

SUBSCRIBE

JOBS BOARD

HELP

CONTACT

Tuesday 20 September 2011

RELATED LINKS
[SECTION] - General News

Make PNN my HomePage

Battlelines drawn over local content in WA

Wednesday, 16 March 2011 James McGrath

[REGION] - Australia [RELATED STORY] - Barnett calls for more local content - WA push for more local content - CCIWA proposes local content strategy [OTHER] - Printable Version

THE stoush over local content in resources contracts in Western Australia continued yesterday, with the alliance between workers unions and the Steel Institute of WA confronting the premier.
Steel fabricators in the state are angry about increasingly empty workshops and much of the fabrication work going offshore. Earlier this month, Chevron Australia explained the alleged snub to local industry players by saying they needed to lift their game in order to compete. Gorgon manager Colin Beckett said he hoped WA fabricators had learnt some lessons after they put forward highly uncompetitive bids to supply 25,000 tonnes of pre-assembled units to the Gorgon LNG project. The contracts, believed to be worth up to $300 million, were awarded to overseas companies. There was a huge amount of daylight between the overseas bids and the local bids, he said. We are very, very hopeful that they would have really considered the reasons why they were less competitive and we'll get some keen bids from those groups. Suffice to say, the industry didnt exactly see eye to eye with Chevron. A 5000-strong union crowd, with PetroleumNews among them, marched in Perth to confront Premier Colin Barnett, who the unions see as not doing enough to ensure fabrication work is being done in the state. On reaching Parliament House, the crowd called for Barnett to face them, and that he did, albeit flanked by heavy security.
Unions marching through the streets of Perth earlier this year Unions on the steps of Parliament House

- Send to a Friend

Barnett flocked by media as he addresses rally

Company Search Company Name Company Description

Story Search Type Text Here Section Commodity Region Feature

Advanced Search Site search sponsor

Amid the jeering and vitriolic abuse, the premier said his first priority was to get the projects up and running. Whatever you might think of me, whatever you might think of this government the first job is to actually get all these projects up and running and that is not easy. Let me remind you of a couple of things: these projects do not just walk in the door, they dont, he said. My first job as premier is to get the project to happen. Barnett said he had recently highlighted the problem by taking the heads of Rio Tinto, BHP Billiton, Chevron and Woodside on a tour of fabrication businesses in the Kwinana area south of Perth. But he added that the companies were not to blame for the situation, because they had given contracts to Australian lead contractors on the understanding the work would be carried out in Australia. They had later found out the subcontractors had sent large components of the work offshore. He assured the crowd that the companies had given him assurances they were looking into the contracts to make sure more work was delivered locally. Unions hit back by saying that ignorance is never an excuse and that government should play a larger role in making sure local work is secured. Barnett agreed that government did need to play a significant role to ensure local companies were kept in work, but stopped short of promising direct government

USED EQUIPMENT
Cameron G2 Spool Tree

View Full Used Equipment list

UPCOMING EVENTS
Oil & Gas Investor Summit Asia 2011

Energetic Women

SEAAOC 2011 Australian Gas Markets Fundamentals - A Technical & Commercial Bridging Course

Australia Gas 2011 Asset Maintenance in Resources

http://www.petroleumnews.net/storyview.asp?storyid=2383235&sectionsource=s90&... 20/09/2011

EnergyNewsBulletin.net - Battlelines drawn over local content in WA

Page 2 of 2

intervention or the implementation of a quota for mandatory local content in fear of discouraging international investment. His sentiments were echoed by the states chamber of commerce, which said that a blank cheque approach, in which project proponents are forced to source goods and services from local suppliers, was not the answer. It added that Chevrons Gorgon project had delivered 4000 jobs to Australian industry, with the promise of more to come. James England, the state manager for the Steel Institute, told PetroleumNews that he wondered where these mysterious 4000 jobs were going, because they sure werent in WAs steel fabrication sector. He said that if the steel fabricators of the state could work to full capacity, they could potentially produce 200,000 tonnes of steel, but added that much of the damage had already been done. The whole point is that the level of investment that has been made already is significant. Probably 500 million dollars invested in steel fabrication workshops alone. So theres huge potential there, but now weve spent all that money, weve realised that were not getting support from the government and the major companies are doing as they please, he said. We can see the trend away from investing in Australia. The big companies arent investing in Australia anymore and thats when we get very fearful about the future. England took particular aim at Chevron, saying that its concern wasnt with supplying locals with work. They [Chevron] hold all the cards. They could have done a heck of a lot more to get our companies into the process. They made the packages to suit their own needs and I guess you can expect that, he said. As you can see from the results from today is that they dont look good by doing these sorts of things. They could have kept this industry working and done so much more. But they let that one go through to the keeper and elected to look after themselves. The state opposition is set to cash in on the perceived failures of the Barnett government by introducing legislation to ensure greater transparency in how and where service contracts are employed. Opposition leader Eric Ripper, who was cheered on by the crowd in stark contrast with Barnetts eventful appearance, said more government intervention was needed to ensure local content was delivered. Yesterdays confrontational scenes at Parliament House are only the beginning of a larger campaign set to be launched by union groups in the coming weeks. With local businesses rallying against large multinational companies and the business-friendly state government set to take a battering from workers groups, things just got a little bit hotter for the oil and gas industry in the west. Click here to read the rest of today's news stories.

View all events

LATEST NEWS
LNG bulls stampede Advent investigating shales China CTL emerges from cold freeze Industry welcomes skills funding Oil and gas pay packets get heavier Greenpeace, Maoris face off against Petrobras Butlers-4 adds to PEL 92 success Rialto upgrades African resource Methanex keen on restarting second Motunui train US update

Disclaimer | Copyright Aspermont Ltd | Privacy Policy | Terms and Conditions | Sitemap

http://www.petroleumnews.net/storyview.asp?storyid=2383235&sectionsource=s90&... 20/09/2011