Australia's Once in a Generation Energy Opportunity

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Even if you cleared the Strait
tomorrow, the risk factoring in

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this region has to shift Japan
straight to Hormuz, 90% of its

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oil imports, Taiwan totally
reliant on imported gas LNG that

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travels through the Strait, and
China are 40% of their oil

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imports through the straight to
Hormuz.

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JD this is Take Two of an energy
master class.

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I say Take 2 not because there
was a prequel, but because this

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is the sequel to one that we
didn't click record on and we

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had a marvellous conversation.
We joined by fan favorite Rusty

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Russell Deroy of Nero resource
Fund.

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Rusty is a recurring guest and
an absolute treat to have here.

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Nero 26% per annum compounded
for the last 12 years.

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It's absolutely staggering and
alongside and we've got Will

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Barker who's kind of been at the
forefront of some of the you

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know, the energy developments
especially familiar with W

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Australia 25 years a a geologist
in the sector he's he's worked

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in for 25 years.
He's currently the MD of Equus

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and on the Board of Strike.
There might be some conflicts

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we've got to disclose upfront
before we go any deeper.

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Striking Carnarvon.
So on the board of Carnarvon

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with Rusty, which has been fun.
It's a bit of a connection here

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and those conflicts upfront.
Let's get to the good stuff,

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which is talking about the
energy landscape.

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Rusty the Straight is still
closed.

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Yeah, thanks very much for the
kind intro.

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And I'll be even more nasal than
usual today because of my cold,

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so apologies to everybody out
there.

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And yeah, I mean, yeah, we did
record a couple of weeks ago.

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And you know, fascinatingly
since then I think markets have

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all rebounded pretty violently.
And and yet, yeah, the straight

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is still shut.
It's sort of different shut now

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than it was before.
It looked like it was sort of

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shut by by one group or
controlled, if you like, by one

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group.
Now it's sort of negative

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control by two groups and, and,
and it's a full stalemate.

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So like in terms of like ship
movements that, you know,

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there's no real material change.
I think the most they got to was

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maybe 20 in a day, but it's
generally sub 10.

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It's usually running like 80 to
100, something like that.

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So you know, it's not, it's
certainly not functional in any

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material sense.
And, and the interesting part as

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well as like the, the lag
effect, you know, I think the

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last ship that left Hummers pre
the, the beginning of the war

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only hit port like a week ago.
So we haven't really seen the

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impacts yet.
We sort of, you know, we

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obviously all failed to it's
been in the headlines.

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We've seen fuel shortages at at
fuel stations that I think in

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some fairness to the government,
there was truth to a pull

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forward in demand.
You know, people did sort of

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panic and and go out and react
and that sort of quoted a bit

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now, but the actual supply shock
is only really just sort of

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arriving.
So, you know, there's, there's

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massive implications into Asia,
absolutely massive and, and by

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by sort of derivative of that
then into into Oz and, and, and

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I think that's well sort of
discussed in public.

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And our only negotiating tool,
you know, to to to bring in our

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liquids at that moment is the is
the energy that we export.

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So, so, yeah, so that's the sort
of the status quo.

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I, I don't, you know, sort of
for us as a fund at the minute,

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we don't, we don't have a
particularly like Clearview on

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what is the like time frame to,
to really unblocking the

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straight it.
It feels like both parties hold

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cards and, and like who's going
to buckle first is the big

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query.
Problematically, both can kind

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of keep going right?
Like for the US, they're energy

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independent.
So you know, if, if you try and

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rationalize everything, and I
think you kind of should in a

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macro sense, everything is a, is
a subset of the big geostrategic

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thing, which is US versus China.
If you think about that, then if

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the US says, well, this
blockage, OK, maybe this pulls

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global growth back, OK, maybe
maybe even the US suffers a bit,

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but we're energy independent.
And so on a net net basis, if my

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measure of success in a race,
because races can go forwards

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and backwards, right?
Everyone thinks of them as just

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like who's moving faster
forward.

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But if your competitor, if you
go backwards and your competitor

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goes backwards 3 or 4X the
amount you did, well, you're

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still winning that race, right?
So it's a race of relativity.

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And so I think the US is not as
motivated to end this as, you

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know, the rest of us might like.
And then I think for Iran, you

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know, it's quite existential
still.

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And so like, you know, how they,
how motivated are they?

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And there are some pressure
points that are coming.

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You know, the, the flow of Wales
is, is going to be impacted

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soon.
I think they're calling this

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tank topping sort of, you know,
pretty imminent in in Iran.

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So that that's going to it's
going to be fascinating to see

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who, who, who breaks first.
At the moment, we just don't

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have a clear line and there's
some narratives out there that

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like the tank topping, you know,
that'll have big impacts on

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wells.
Maybe you can do it's better

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than me will, but sort of
research we have done is like it

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has some impact, but it's, you
know, Iran's dialed down

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production previously as well.
So they can come back.

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It's like a cost and time
function to bring it back on,

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but it can be done.
It's not like fatal, you know,

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It doesn't completely bugger the
reservoirs or anything.

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No, it doesn't affect the
reservoirs overly, but what it

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does do is you know, we've not
only first got to open the

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straight, you then have to clear
the storage volumes that are

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already at tank tops before you
then can start up the fields.

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So it's that flow on effect that
can take months throughout the

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system.
And you know, the LNG space,

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which is in my area of, of
knowledge is one that it does

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have bigger impacts for.
You've had 20% of entire global

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production restricted from
market.

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You've then had the damage to
the facilities with the bombing

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in Qatar, you that will take
years to replace that

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infrastructure.
So we've seen the effect that

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has in, in Asia, prices have
doubled, supplies constrained

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it, it destroys market, you know
it, it does.

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We saw it through the Ukrainian
process as well, where because

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of the cost become so elevated
that demand destruction in Asia

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occurs instantly.
They move away from LNG, they

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turn to coal.
The big buyers in Europe who can

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afford to pay, you know, the
astronomical prices for for LNG,

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mop it up.
Their economies can take it, but

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the Asian customers are
Southeast Asian users can't, and

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they revert to coal.
Yeah, I think, I think it's a

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really interesting point and a
good analogy like what's going

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on with Ukraine and and you
know, the changes like say to

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Europe as a as a sort of key
sort of customer that previously

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of like Russian product.
I, I think it's not, it's not

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the same here.
It's obviously nuance and

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difference, but I think we'll
see like structural changes as a

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result.
Even if you cleared the straight

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tomorrow, like the risk
factoring, you know, in, in this

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region has to shift.
And, and for Asia, you know,

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just, you know, I'll run through
some sort of dependency sort of

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stats here.
Like South Korea, it's 10%

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energy self-sufficient, 9 days
of mandatory LNG stockpiles and

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Australia's already the number
one supplier.

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They were 30% of imports,
sources 81% of energy from

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fossil fuel imports.
Japan straight of Hormuz, 90% of

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its oil imports sources 87% of
energy from fossil fuel imports.

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Taiwan 50% power Gen. from gas
entirely reliant on imported

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gas, 1/3 of it's from LNG that
travels through the Strait.

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No nuclear, no pipeline, no
domestic supply, limited

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storage.
India more than half of its LNG

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imports are Gulf linked.
About 60% oil imports come from

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the Middle East and China.
Around 30% of their LNG imports

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come from Qatar in the UAE and
40% of their oil imports through

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the Strait of Hormuz.
That doesn't even include

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Pakistan, Bangladesh, India,
Thailand, the Philippines, all

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of these countries significantly
dependent upon this region.

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And I just don't see any
universe in which there aren't

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structural changes.
It doesn't mean like, you know,

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it's not certainly be as
extremists say, Russia and

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Ukraine where you're like
turning the tap almost off,

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although Europe doesn't talk
about they have left the tap a

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bit open.
But, but I think without doubt

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you are going to have to see.
And, and as we've said, we've

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already seen them react with
like shift to coal initially,

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but I think there's a lot of
preference for, for LNG.

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They're going to have to look
elsewhere basically for LNG

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cargoes and, and oil supplies
and, and just diversify out that

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risk, you know, no matter what.
And, and so I think, you know,

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we're going to see a lot more of
those customers coming down to

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Australia.
They already exist here.

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They've had a very difficult
time of it down here the last

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few years.
So yeah, I think they're going

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to be knocking on the door and
and hopefully the government's a

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lot more intelligent about how
they deal with them.

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Maybe there's a lot more
awareness now.

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What what's amazing is the
countries you just mentioned at

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the tail end, the the handful of
countries make up maybe 30% of

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the world's population, like
India, Pakistan, Bangladesh,

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Like it's yeah, it's, it's wild
to kind of think about what have

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you guys made of the, the price
reactions.

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If we look at the LNG and and
and Brent are going into

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specifics if you want.
Yeah, it's been somewhat muted

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compared to the the scale of the
the loss of of supply into the

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market.
So your LNG prices have have

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dramatically responded, but
nothing like what occurred

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during the Ukraine invasion.
So it's been much more muted

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than than that.
And that's where I feel the

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impact is going to be much more
long term.

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It was Rusty was saying the
price reaction right now is

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impactful, but it's about those
supply chains and where do

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people want to be sourcing
especially their LNG from long

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term.
So those big Asian buyers, you

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know, Japan, 40% of their LNG
imports are Australian.

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You know, they're still relying
then on, you know, on Qatar for

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a majority of the rest of it.
So where do they want to source

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their their LNG from?
There are four major producers

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globally that account for 73% of
the entire market.

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So the USA is now #125%.
Qatar was second with 20%,

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Australia is sitting there at
18%, and Russia at 10.

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So you're 75% effectively global
supply for countries, all of

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them apart from Australia have
massive issues with either being

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bombed and and the shutting
trade restrictions, sanctions,

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Trump out of the US, issues
around Panama Canal and

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inability to access the the
Asian market and then Russia.

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So here is that opportunity for
us.

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So yes, price is a great short
term groups like Woodside have

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been able to respond to it,
accelerate cargoes, get into

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that spot market and get
brilliant pricing out of it.

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But the long term effect is what
I'm looking at of those Asian

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customers are then going to sit
there and go, do I want to

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invest more in Qatar?
So, you know, with what they've

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seen with the the crisis, with
bombing of infrastructure, do

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they want to go invest long term
contracts, you know, 20 year

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plus contracts, 10's and 10s of
billions of dollars in

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infrastructure in a location
that is that surrounded by by a

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crisis.
So that's where Australia has

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that opportunity to step up.
We need to avoid the issues that

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we've gone through historically.
Yeah, we're doing it.

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Again, though, you're looking at
super profits tax levies on the

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industry right at the time when
we need to be working, you know,

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bilaterally with those
customers, you know, get them

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encouraged, get the capital out
here.

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We saw it post Ukraine,
especially with the Japanese

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moving back into the Australian
market, taking very material

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interests in projects.
Scarborough's a great example.

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You know, historically the
Japanese would take 1% of Gorgon

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or 1% of a of a Pluto project.
So they had a seat at the table.

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They would then take large
equity volumes to be able to

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take that large equity off take
volumes.

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So they could take that back to
to home in Scarborough post

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Ukraine, they took 25% equity
upstream, giving them 25% of the

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00:13:06,160 --> 00:13:10,320
off take directly pure hedge on
the the gas price for them.

222
00:13:10,720 --> 00:13:13,360
So that's where I feel we're
going to see those changes

223
00:13:13,840 --> 00:13:17,480
around right price is great.
Let's milk it while we can get

224
00:13:17,480 --> 00:13:21,080
cargoes out, but how do we
attract that capital in?

225
00:13:21,360 --> 00:13:24,360
Because right now Australians
are backwards in terms of LNG

226
00:13:24,360 --> 00:13:26,320
production.
Yeah, no, I couldn't, couldn't

227
00:13:26,480 --> 00:13:28,280
agree, Miller.
And and interestingly, like I

228
00:13:28,280 --> 00:13:33,120
think yet I, I would fully echo
Will's comments on, on the, the

229
00:13:33,560 --> 00:13:35,920
price response being quite muted
so far.

230
00:13:36,200 --> 00:13:38,400
I think there's been like a lot
of management in that, like

231
00:13:38,560 --> 00:13:41,400
there's a lot of rabbit holes
you can draw like jump down on

232
00:13:41,680 --> 00:13:44,400
who's doing what in those
markets and, and why clearly,

233
00:13:44,600 --> 00:13:47,080
you know, US midterms and like
there's a lot of reasons for

234
00:13:47,400 --> 00:13:51,160
governments to try and keep
things as sort of quelled as

235
00:13:51,160 --> 00:13:55,000
possible.
I think at the moment globally,

236
00:13:55,160 --> 00:13:57,800
what we're doing is we're like
eating into, you know,

237
00:13:58,040 --> 00:14:01,520
redundancy.
So we have not in Australia

238
00:14:01,520 --> 00:14:03,840
because we're not capable of
that sort of foresight.

239
00:14:03,840 --> 00:14:07,360
But in other other jurisdictions
we actually have, you know, they

240
00:14:07,360 --> 00:14:10,560
have reserves, you know, China
and Japan I think up towards a

241
00:14:10,560 --> 00:14:13,920
year's worth of sort of storage.
So we're eating into that

242
00:14:13,920 --> 00:14:18,640
storage at the moment, those
reserves, strategic reserves and

243
00:14:18,640 --> 00:14:21,640
again to like Australia's like
the the madness and this goes to

244
00:14:21,640 --> 00:14:24,480
both sides of politics, like,
you know, our strategic reserve

245
00:14:24,840 --> 00:14:29,000
sitting in the US.
So, but bottom line is sort of

246
00:14:29,000 --> 00:14:33,520
globally, you know, the pricing
has it's good, but it could be a

247
00:14:33,520 --> 00:14:35,440
lot worse.
I think the real question is

248
00:14:35,440 --> 00:14:38,200
like, there's going to be a lot
more duration here than than

249
00:14:38,200 --> 00:14:41,200
people I think are assuming.
And what has surprised me is

250
00:14:41,200 --> 00:14:43,120
like the curve.
So if you look like the oil

251
00:14:43,120 --> 00:14:46,280
curve, you know, up until maybe
last few days, it had this

252
00:14:46,360 --> 00:14:49,400
dramatic sort of drop back, you
know, December contracts sort of

253
00:14:49,400 --> 00:14:51,840
sub 80 bucks.
And you know, this assumption

254
00:14:51,840 --> 00:14:53,320
that everything gets normal real
quick.

255
00:14:53,840 --> 00:14:57,520
I think just replenishing the,
the tanks, you know, the, the,

256
00:14:57,760 --> 00:15:00,640
the redundancy that we've been
chewing on, just replenishing

257
00:15:00,640 --> 00:15:03,960
that is going to take time and
add excess demand to an

258
00:15:03,960 --> 00:15:06,440
otherwise sort of normalized
daily demand environment.

259
00:15:06,800 --> 00:15:09,200
And on top of that, you've got
countries like Australia who

260
00:15:09,520 --> 00:15:12,080
hopefully wake up and be like,
well, if we're not going to

261
00:15:12,080 --> 00:15:14,160
refine this stuff, then for
fuck's sake, we better store

262
00:15:14,160 --> 00:15:17,480
some of it.
And so it won't even just be

263
00:15:17,480 --> 00:15:19,880
replenishing what we've chewed
up.

264
00:15:20,400 --> 00:15:22,360
It'll actually be a whole bunch
of countries going, no, you

265
00:15:22,360 --> 00:15:25,520
know, we need more inventory.
And I think that that is a

266
00:15:25,520 --> 00:15:28,960
bigger picture again, to this
sort of China US dynamic, this

267
00:15:28,960 --> 00:15:35,360
landscape of no longer just in
time, you know, it's just in

268
00:15:35,360 --> 00:15:37,600
case.
And so we're going to see a lot

269
00:15:37,600 --> 00:15:41,280
more sort of stockpiling
inventories across, you know,

270
00:15:41,280 --> 00:15:45,480
global commodities and, and, and
particularly in in energy, you

271
00:15:45,480 --> 00:15:48,840
know, as you guys know so well
around AI, we've now got this

272
00:15:48,840 --> 00:15:54,280
dual energy demand dynamic where
you got still a billion plus

273
00:15:54,280 --> 00:15:57,200
people out of Southeast Asia to
pull out of abject poverty.

274
00:15:57,640 --> 00:16:01,600
You still got Latin America, you
still got Africa, all of that

275
00:16:01,600 --> 00:16:05,320
sort of third world, you know,
demand to come.

276
00:16:05,760 --> 00:16:08,920
And then next to that, the first
world with all these assumptions

277
00:16:08,920 --> 00:16:12,440
that the IEA and all of these
guys used to run that like we'd

278
00:16:12,440 --> 00:16:14,920
use less of everything.
It's just it's madness.

279
00:16:15,360 --> 00:16:18,840
Like we are going to use a heap
more energy in the first world

280
00:16:18,840 --> 00:16:21,840
and we're going to consume a
heap more products as as AI

281
00:16:21,840 --> 00:16:24,840
brings down the cost of, you
know, pretty much everything.

282
00:16:25,560 --> 00:16:27,760
What's the natural responses?
We're going to consume more of

283
00:16:27,760 --> 00:16:29,840
them.
So I think we're going to see,

284
00:16:29,920 --> 00:16:35,360
yeah, duration to this sort of
issue and we're going to see

285
00:16:35,360 --> 00:16:38,600
impacts as, as Will said in
like, you know, Australia's got

286
00:16:38,600 --> 00:16:40,200
a real opportunity here.
And, and I think there's an

287
00:16:40,200 --> 00:16:42,960
awareness now at a political
level, you know, the guy on the

288
00:16:42,960 --> 00:16:46,200
street and the and the Prime
Minister are just as aware now

289
00:16:46,200 --> 00:16:51,440
just in this moment of crisis.
Our only negotiating peace was

290
00:16:51,440 --> 00:16:54,560
our coal and our gas, right?
And that's something I hope Dave

291
00:16:54,560 --> 00:16:58,200
Pocock and punter politics are
are really actually looking at

292
00:16:58,200 --> 00:17:01,440
and like understanding like
these are key critical raw

293
00:17:01,440 --> 00:17:03,320
materials.
Hydrocarbons have pulled

294
00:17:03,320 --> 00:17:04,839
billions of people out of
poverty.

295
00:17:04,839 --> 00:17:07,880
That is a fact.
And they are required to do the

296
00:17:07,880 --> 00:17:10,280
job to pull billions more out of
poverty.

297
00:17:10,560 --> 00:17:12,880
So, you know, they're absolutely
essential products.

298
00:17:12,880 --> 00:17:15,560
We have plenty of them.
But you know, as an example, I

299
00:17:15,560 --> 00:17:20,240
think over the last 10 years,
Australia went from 25% of

300
00:17:20,359 --> 00:17:23,960
global LNG investment to three,
you know, with 3% of global

301
00:17:23,960 --> 00:17:26,839
energy investment.
Now that is that is woeful if

302
00:17:26,839 --> 00:17:29,680
you if you think, you know,
again, part of politics and Dave

303
00:17:29,680 --> 00:17:32,760
Pogart wanna say how rosy it is
and how much cream these guys

304
00:17:32,760 --> 00:17:34,560
are making.
Where's all the investment?

305
00:17:34,560 --> 00:17:38,840
If it's so good to operate here,
why has investment absolutely

306
00:17:38,840 --> 00:17:40,520
collapsed?
You always tell me, Rusty, that

307
00:17:40,520 --> 00:17:43,640
capital goes where it's welcome.
It does go, yeah, it always goes

308
00:17:43,640 --> 00:17:45,320
where it's welcome.
And, and, you know, Australia's

309
00:17:45,320 --> 00:17:48,400
been very unwelcoming.
And I think guys like those that

310
00:17:48,400 --> 00:17:52,160
their agenda is to actually, you
know, through sort of economic

311
00:17:52,160 --> 00:17:54,520
asphyxiation, destroy the
sector.

312
00:17:54,720 --> 00:17:57,920
They, they claim it's for, you
know, the benefit of the public

313
00:17:57,920 --> 00:18:00,560
and, and all this just absolute
bullshit.

314
00:18:01,120 --> 00:18:03,960
And the real agenda is they,
they really want to tear the

315
00:18:03,960 --> 00:18:07,920
sector apart.
And that would be so cataclysmic

316
00:18:08,280 --> 00:18:11,600
for Australia's economy and its
relationships through the

317
00:18:11,600 --> 00:18:12,840
region.
You know, they're, they're

318
00:18:12,960 --> 00:18:17,280
absolutely, it's fundamental
what we supply in commodities to

319
00:18:17,280 --> 00:18:19,360
our regional partners.
Absolutely fundamental.

320
00:18:19,960 --> 00:18:24,160
And you know again, petroleum
exploration is at a 21 year low

321
00:18:24,400 --> 00:18:29,640
in FY23 and offshore exploration
wells in 2010 there was 50.

322
00:18:30,000 --> 00:18:36,280
In 2023 we did 3.
So government policy settings

323
00:18:36,680 --> 00:18:43,720
and actions by NGOs and, and you
know, the Edo, you know, Barossa

324
00:18:43,720 --> 00:18:46,760
and I think Barossa cost
something like all up that that

325
00:18:46,760 --> 00:18:51,840
whole process was like a $800
million hit to accompany just

326
00:18:51,840 --> 00:18:56,040
through, you know, lawfare.
These things are, are really

327
00:18:56,040 --> 00:18:59,920
damaging and, and the, the
country now the Prime Minister,

328
00:19:00,360 --> 00:19:02,520
ministers, they really, you
know, the Labour Party has a

329
00:19:02,520 --> 00:19:05,680
really good opportunity here to,
to have it's sort of John Howard

330
00:19:05,680 --> 00:19:07,320
moment.
You know, when Johnny Howard

331
00:19:07,320 --> 00:19:10,560
stood out there with the
bulletproof vest on and said to

332
00:19:10,560 --> 00:19:14,560
the people that, you know,
generally voted for him, Hey,

333
00:19:14,960 --> 00:19:17,240
enough with these guns, right?
We need to do better.

334
00:19:17,560 --> 00:19:19,320
I think.
I think the same moment here is

335
00:19:19,320 --> 00:19:21,200
for, for Anthony Albanese.
You know, he's a real

336
00:19:21,200 --> 00:19:25,440
opportunity to stand up to the
lunatics on the, the hard left,

337
00:19:25,640 --> 00:19:29,880
absolute lunatics and say, hey,
there's ideal and then there's

338
00:19:29,880 --> 00:19:33,040
real.
So let's all be real about, you

339
00:19:33,040 --> 00:19:36,320
know, this sector, its
importance, hydrocarbons, how

340
00:19:36,320 --> 00:19:39,200
quickly we really can
decarbonize.

341
00:19:39,360 --> 00:19:41,720
Like it's a lovely objective,
but it's going to take a long

342
00:19:41,720 --> 00:19:44,680
time.
And right here, right now, you

343
00:19:44,720 --> 00:19:48,200
know, I think Australia's like
total energy needs 85%

344
00:19:48,200 --> 00:19:52,120
hydrocarbons.
So that's just the real world,

345
00:19:52,120 --> 00:19:54,640
right?
Stop living in fantasy worlds

346
00:19:54,640 --> 00:19:57,760
that don't exist.
Stop advocating economic suicide

347
00:19:58,120 --> 00:20:01,800
and not only that, strategic
suicide whereby you know, we

348
00:20:01,800 --> 00:20:05,400
would completely deliver any any
sort of.

349
00:20:06,520 --> 00:20:11,440
Power or or or or like relevance
in the region if we were to fuck

350
00:20:11,440 --> 00:20:14,440
these industries up any further
than we already tried to.

351
00:20:14,640 --> 00:20:17,720
Just quickly Trev, Australia
might not be nailing it

352
00:20:17,720 --> 00:20:19,600
completely when it comes to
energy policy and there all

353
00:20:19,600 --> 00:20:23,160
these things as rusty and we'll
elaborating here, but there is

354
00:20:23,160 --> 00:20:26,080
one sector where Australia never
ceases to amaze.

355
00:20:26,080 --> 00:20:27,960
Do you know what that is?
For better or for worse mate, I

356
00:20:27,960 --> 00:20:29,200
do know what you're talking
about.

357
00:20:29,640 --> 00:20:32,880
It's the property market.
No matter rain, wind, hail,

358
00:20:32,960 --> 00:20:36,400
sunshine, the property sector
just continues to deliver the

359
00:20:36,400 --> 00:20:37,760
goods.
And that's why we need to

360
00:20:37,760 --> 00:20:39,800
mention our good mates at Exceed
Capital.

361
00:20:39,880 --> 00:20:42,240
We're talking about commercial
property here and we're talking

362
00:20:42,240 --> 00:20:44,040
specifically about their
collective.

363
00:20:44,120 --> 00:20:47,880
A group of assets bundled
together saves you the drama of

364
00:20:47,880 --> 00:20:50,200
going out and buying a second
property, dealing with property

365
00:20:50,200 --> 00:20:52,960
managers, signing up new debt
and all these sorts of things.

366
00:20:52,960 --> 00:20:56,320
They make your life easy so you
can get exposure to the great

367
00:20:56,440 --> 00:20:59,080
sector in Australia.
The stability of those sorts of

368
00:20:59,080 --> 00:21:02,880
tenants, it's an absolute no
brainer to outsource it to a

369
00:21:03,200 --> 00:21:06,480
property group like Exceed
Capital, who have a flagship

370
00:21:06,480 --> 00:21:08,640
fund with five different
commercial property assets in it

371
00:21:08,640 --> 00:21:10,360
right now.
As well as that, a commercial

372
00:21:10,360 --> 00:21:13,240
property fund that is managed by
a group of individuals who are

373
00:21:13,240 --> 00:21:17,280
invested alongside you and who
have structured their incentives

374
00:21:17,520 --> 00:21:19,200
to be aligned with the
investors.

375
00:21:19,200 --> 00:21:21,200
Something like where big fans of
here at Money of mine check it

376
00:21:21,200 --> 00:21:22,840
out today.
Let's be quite specific because

377
00:21:22,840 --> 00:21:24,520
you mentioned the couple names
there.

378
00:21:24,520 --> 00:21:27,960
And the big take putting the
environmentalist component to it

379
00:21:28,120 --> 00:21:31,480
aside for a moment is that these
companies don't pay their share.

380
00:21:31,880 --> 00:21:34,280
Now we've seen that obviously
reflected in the settings you

381
00:21:34,280 --> 00:21:37,000
spoke through those numbers, but
I think it'd be good to talk

382
00:21:37,000 --> 00:21:40,520
through what these companies do
pay and how that's structured in

383
00:21:40,840 --> 00:21:42,800
in Australia.
I, I can do the headlines and

384
00:21:42,800 --> 00:21:46,160
then I'll let maybe we'll jump
into the, the, the details

385
00:21:46,160 --> 00:21:48,280
again.
It's not, you know, I, I, I'm

386
00:21:48,280 --> 00:21:51,080
always good at sort of the maybe
the high level stuff as you guys

387
00:21:51,080 --> 00:21:53,680
know, and then in the weeds, I
try and find that out.

388
00:21:53,680 --> 00:21:56,560
But yeah, so it's at a headline
level, right?

389
00:21:56,560 --> 00:22:01,920
For FY25, the sector, oil and
gas sector paid around about 22

390
00:22:01,920 --> 00:22:04,520
billion in taxes and royalties
to all levels of government.

391
00:22:04,640 --> 00:22:08,520
That was a record, right. 22
billion dollars, 14 billion in

392
00:22:08,520 --> 00:22:14,200
company tax, 1.35 in PRRT, 6.6
billion in royalties, excise and

393
00:22:14,200 --> 00:22:18,440
fees, another 500 million in
other costs are, you know,

394
00:22:18,840 --> 00:22:21,840
government.
So second highest corporate

395
00:22:21,840 --> 00:22:24,080
taxpayer in Australia is the oil
and gas sector.

396
00:22:24,200 --> 00:22:29,480
Second highest one in 10
corporate tax dollars paid 10%

397
00:22:29,800 --> 00:22:31,160
is out of the oil and gas
sector.

398
00:22:31,440 --> 00:22:34,320
And yet they get demonized as
somehow not paying, you know,

399
00:22:34,320 --> 00:22:36,120
their fair share or or or
whatever.

400
00:22:36,360 --> 00:22:40,320
It's 3.7% of GDP.
It's 105 billion to the national

401
00:22:40,320 --> 00:22:42,240
economy.
You know, they have metrics for

402
00:22:42,240 --> 00:22:46,480
working on multiplier effects
and, and and the like 200 and

403
00:22:47,080 --> 00:22:49,760
15,000 jobs.
It's the most productive sector

404
00:22:49,880 --> 00:22:55,080
per worker on on a GVA metric.
And Commonwealth taxes grew

405
00:22:55,080 --> 00:22:57,720
tenfold from 2021.
There were about 1 1/2 billion,

406
00:22:57,720 --> 00:23:02,600
about 18 billion now.
So like they are paying enormous

407
00:23:02,600 --> 00:23:05,640
amounts of tax, you know, and,
and that is before you even

408
00:23:05,640 --> 00:23:09,080
start going into personal income
tax.

409
00:23:09,360 --> 00:23:14,040
So all the employees and the
taxes that they pay, payroll

410
00:23:14,040 --> 00:23:18,400
tax, superannuation, you know.
Let's not talk about the

411
00:23:18,400 --> 00:23:21,040
industries that come alive
because like you know, prices

412
00:23:21,040 --> 00:23:23,480
are marginally lower enough to,
to, to warrant them.

413
00:23:23,720 --> 00:23:27,880
Or on the other flip side, the
the the industrial industrial

414
00:23:27,880 --> 00:23:30,360
opportunity that is foregone
when when energy prices are too

415
00:23:30,360 --> 00:23:33,760
high.
I think that everyone focuses in

416
00:23:33,760 --> 00:23:37,680
on the PRRT and that's what your
Pocox and others have.

417
00:23:37,800 --> 00:23:43,320
You've gotten done ridiculous
comparisons to to beer taxes

418
00:23:43,360 --> 00:23:48,360
versus PRRT.
And I think what people fail to

419
00:23:48,360 --> 00:23:51,080
understand is that it's actually
a super profits tax.

420
00:23:51,480 --> 00:23:55,000
So people talk about, oh, we
need to put super profits tax on

421
00:23:55,000 --> 00:23:57,000
the industry.
We've already got one, it's

422
00:23:57,000 --> 00:23:59,440
called PRRT.
So the way it's structured is

423
00:23:59,440 --> 00:24:03,640
you pay your corporate, your 30%
corporate tax, Any profit above

424
00:24:03,640 --> 00:24:08,200
that is taxed at a 40% tax rate
by PRRT.

425
00:24:08,560 --> 00:24:12,600
So times like now where they're
making great profits on spot

426
00:24:12,600 --> 00:24:16,560
cargoes, you know, into the
Asian market, that's when PRRT

427
00:24:16,560 --> 00:24:19,360
kicks in.
But as Rusty pointed out, it's

428
00:24:19,360 --> 00:24:21,680
all the underlying taxes that
are the base.

429
00:24:21,880 --> 00:24:25,640
This is the Super profits tax.
Yes, it could have been done

430
00:24:25,640 --> 00:24:28,520
better.
You know it it did encourage

431
00:24:28,640 --> 00:24:34,120
some poor behaviour within the
industry whereby being able to

432
00:24:34,960 --> 00:24:38,880
deploy capital use that as write
offs going forward and it had

433
00:24:38,880 --> 00:24:42,560
very large uplifts on holding
that capital whether it was

434
00:24:42,560 --> 00:24:45,360
exploration or development.
Effectively incentivize like

435
00:24:45,400 --> 00:24:47,360
overbuilding of of
infrastructure, right?

436
00:24:47,480 --> 00:24:51,000
Which was crazy.
And it's an industry that didn't

437
00:24:51,000 --> 00:24:55,840
need encouragement to do that
from the egos involved in the

438
00:24:55,840 --> 00:24:57,880
industry.
They're pretty severe, right?

439
00:24:57,880 --> 00:24:58,960
And.
Duplication.

440
00:24:59,360 --> 00:25:01,080
Of duplication of
infrastructure.

441
00:25:01,480 --> 00:25:03,920
Just crazy.
Yeah.

442
00:25:04,680 --> 00:25:07,320
And it is big egos.
You've got guys, you know,

443
00:25:07,320 --> 00:25:10,880
woodsides, Chevron shells of
this world.

444
00:25:11,160 --> 00:25:14,280
They want to be the operator.
They want to control where the

445
00:25:14,280 --> 00:25:16,560
molecules are going.
Who's getting to market it?

446
00:25:16,960 --> 00:25:18,760
And so we do have crazy
situations.

447
00:25:18,760 --> 00:25:23,040
Northwest Shelf, we have the
Pluto discovery right next door,

448
00:25:23,200 --> 00:25:25,800
you know, Woodside Discovery
right next door to Wheatstone.

449
00:25:26,080 --> 00:25:31,160
Chevron Discovery just off the
tip of the the Burrup Peninsula

450
00:25:31,600 --> 00:25:34,280
could have been brought in
together, developed as a 10

451
00:25:34,280 --> 00:25:37,320
million ton LNG export facility.
You beauty.

452
00:25:37,520 --> 00:25:40,960
What do we end up with?
Two pipelines that cross each

453
00:25:40,960 --> 00:25:44,840
other and go 200 kilometres in
different directions to two

454
00:25:44,840 --> 00:25:48,240
separate LNG plants.
Build a brand new deep water

455
00:25:48,240 --> 00:25:50,760
port.
All of that infrastructure then

456
00:25:50,760 --> 00:25:55,440
becomes a write off and
postpones any payment of PRRT.

457
00:25:55,800 --> 00:25:58,520
So that's where government
though needs to step in.

458
00:25:58,520 --> 00:26:02,280
You don't need to tax them, you
need to regulate the process by

459
00:26:02,280 --> 00:26:04,360
which our resources are
developed.

460
00:26:04,600 --> 00:26:10,560
Same thing in QLD. 3 pipelines,
3 LNG plants on an island in the

461
00:26:11,040 --> 00:26:14,680
Curtis Island in Gladstone.
Waste of infrastructure, never

462
00:26:14,680 --> 00:26:18,040
reached nameplate capacity.
Still run at 85%.

463
00:26:18,240 --> 00:26:20,840
Because they don't have the
resources to underwrite all of

464
00:26:20,840 --> 00:26:23,440
that infrastructure.
That's where government got

465
00:26:23,440 --> 00:26:25,960
greedy.
Loved the jobs, loved the

466
00:26:25,960 --> 00:26:29,480
investment.
Rather than being sensible about

467
00:26:29,480 --> 00:26:33,320
how our resources developed.
How are they support the

468
00:26:33,320 --> 00:26:36,040
domestic market as well as the
export market?

469
00:26:36,440 --> 00:26:39,360
So don't just tax it, regulate
it properly.

470
00:26:39,400 --> 00:26:41,880
Yeah, I think, I think the
bottom line here is one that

471
00:26:41,880 --> 00:26:46,600
they pay heaps of tax.
So please, punter, please David,

472
00:26:46,600 --> 00:26:49,880
stop lying.
Stop selling fear and envy right

473
00:26:49,880 --> 00:26:53,160
as it as you trademark it's it's
it's fucking woeful.

474
00:26:53,440 --> 00:26:55,600
And I'd I'd love to get either
of them on on the show.

475
00:26:55,600 --> 00:26:59,360
By the way, I would very happily
come in and have a a really open

476
00:26:59,360 --> 00:27:02,480
dialogue and equally very happy
to jump on on their shows if, if

477
00:27:02,480 --> 00:27:05,080
that's if they prefer the
homecourt advantage or however

478
00:27:05,080 --> 00:27:06,320
they want to go about it, it
can.

479
00:27:06,400 --> 00:27:07,800
Be a neutral venue.
Here, neutral.

480
00:27:07,840 --> 00:27:10,200
Yeah, neutral.
I would love to just chat

481
00:27:10,200 --> 00:27:11,680
through actual facts and
figures.

482
00:27:11,720 --> 00:27:13,120
I think they know the facts and.
Figures.

483
00:27:13,120 --> 00:27:15,000
They know them, they just choose
not to use them.

484
00:27:15,000 --> 00:27:17,240
Or they they.
It's convenient.

485
00:27:17,280 --> 00:27:18,960
It's convenient.
Yeah, and they're selling it

486
00:27:18,960 --> 00:27:20,880
well, right.
Like it's, you know, I think 70%

487
00:27:20,880 --> 00:27:24,040
of Australians support their,
their, their absolutely woeful

488
00:27:24,040 --> 00:27:27,520
ideas.
And, and, and to the point like

489
00:27:27,520 --> 00:27:30,480
the PRT is a super profits tax
and it just shouldn't even be

490
00:27:30,480 --> 00:27:33,160
there, to be honest.
It's it's, it's all it's done is

491
00:27:33,160 --> 00:27:37,520
incentivize, as Will said, crazy
decision making over building of

492
00:27:37,520 --> 00:27:39,920
infrastructure because of the
way that you can, you know,

493
00:27:39,920 --> 00:27:43,400
depreciate things.
And and then it's like it's

494
00:27:43,400 --> 00:27:45,080
madness.
And and in general, Australia

495
00:27:45,080 --> 00:27:47,640
has like, you know, way too
complex tax system as it is.

496
00:27:47,720 --> 00:27:50,760
Bottom line for the sector
though, is it pays a lot of tax.

497
00:27:50,800 --> 00:27:55,040
And and these guys that use like
Norway as an example, it's like,

498
00:27:55,120 --> 00:27:59,880
OK, yeah.
And Norway Co invest my brother,

499
00:28:00,160 --> 00:28:03,960
right?
So they pay for the CapEx, pay

500
00:28:03,960 --> 00:28:07,360
for the OpEx, take the
geological risk on, right.

501
00:28:07,920 --> 00:28:10,840
They, they invest, they're,
they, they've been putting

502
00:28:10,840 --> 00:28:14,240
capital to work.
That's why they have such a big

503
00:28:14,280 --> 00:28:16,800
take, right?
And then they point to the UK

504
00:28:16,800 --> 00:28:18,880
and say, oh, but the UK is at
this.

505
00:28:19,040 --> 00:28:21,960
What is it crazy number 80% or
something?

506
00:28:22,200 --> 00:28:26,200
The UK is moribund.
The sector is completely dead.

507
00:28:26,440 --> 00:28:29,520
They which is actually the
agenda here, right?

508
00:28:29,680 --> 00:28:32,400
They want the sector dead.
And the UK has been highly

509
00:28:32,400 --> 00:28:36,560
successful completely killing
it's, it's sort of North Sea

510
00:28:37,200 --> 00:28:39,840
hydrocarbon sector.
And so yes, if you want to kill

511
00:28:39,840 --> 00:28:43,320
it, go right ahead, tax it, tax
it further.

512
00:28:43,320 --> 00:28:46,200
But the, the reality is the
truth is the sector pays a low

513
00:28:46,200 --> 00:28:48,520
tax.
It's incredibly important and

514
00:28:49,120 --> 00:28:51,560
and yes, it can do better.
I think to Will's point as well,

515
00:28:51,800 --> 00:28:53,720
you know, there's there's heaps
of room for improvement, but

516
00:28:53,920 --> 00:28:56,800
it's certainly not more taxes.
It that ain't going to help that

517
00:28:56,800 --> 00:28:59,720
it's better regulation.
It's actually like procedural

518
00:28:59,720 --> 00:29:02,960
certainty.
So if you look at Barossa, you

519
00:29:02,960 --> 00:29:06,960
know, this ability for these,
these activist groups who again,

520
00:29:06,960 --> 00:29:10,360
you know, just like, like
Pocock, like, like punter, sell

521
00:29:11,000 --> 00:29:14,640
envy, sell fear, sell, sell
victimisation, sell bullshit,

522
00:29:14,640 --> 00:29:17,920
basically in order to feather
their own careers and their own

523
00:29:18,200 --> 00:29:21,680
own brands.
You know, they, they go to work

524
00:29:21,680 --> 00:29:24,880
legally and, and it costs the
company so $800 million a drill

525
00:29:24,880 --> 00:29:28,360
rig parked up. $1,000,000 a day.
1,000,000 bucks a day, right?

526
00:29:28,600 --> 00:29:31,160
Purely because these guys and
these they waited, so they

527
00:29:31,160 --> 00:29:35,360
waited to launch the legal case
until the rig was it like it was

528
00:29:35,360 --> 00:29:38,680
all very, very deliberate.
And, and where the government

529
00:29:38,680 --> 00:29:41,600
can and, and, you know,
absolutely should do things is,

530
00:29:41,600 --> 00:29:44,280
is to give that procedural
certainty.

531
00:29:44,280 --> 00:29:50,440
You know, we all want genuine
native title being properly

532
00:29:50,440 --> 00:29:52,600
reviewed and and like dealt with
properly.

533
00:29:52,600 --> 00:29:56,240
Like we all want that.
Nobody wants caves being blown

534
00:29:56,240 --> 00:29:57,440
up.
Nobody wants any of that.

535
00:29:57,440 --> 00:29:59,600
So if there is genuine native
title, we want that.

536
00:29:59,880 --> 00:30:02,920
But it needs to be clear, like
here's the time frame, here's

537
00:30:02,920 --> 00:30:05,440
the landing.
If it's done, it's done right,

538
00:30:05,480 --> 00:30:09,760
it's settled.
No sneaky backdoor legal

539
00:30:09,760 --> 00:30:11,960
processes to then come and
challenge something.

540
00:30:11,960 --> 00:30:16,200
We've, you know, I mean, I'll
let anybody else out there go

541
00:30:16,200 --> 00:30:19,360
and read the findings of, of, of
the, the sort of the, the court

542
00:30:19,360 --> 00:30:21,760
process that followed.
Long term capital needs

543
00:30:21,760 --> 00:30:23,160
stability.
It needs stability.

544
00:30:23,160 --> 00:30:24,440
Exactly.
Everybody's happy to work

545
00:30:24,440 --> 00:30:26,800
through a process as long as
it's clear what it is and that

546
00:30:26,800 --> 00:30:28,600
the rules are, are clear and
fair.

547
00:30:28,960 --> 00:30:32,440
You know, and, and, and I think
as we discussed earlier, the,

548
00:30:32,680 --> 00:30:37,000
the regulatory setting has
clearly, clearly really

549
00:30:37,000 --> 00:30:38,920
dissuaded capital from coming to
Australia.

550
00:30:38,920 --> 00:30:41,400
I think they interviewed the
sector and I think the, the

551
00:30:41,400 --> 00:30:44,880
sector response was like 95%
said Australia is a far worse

552
00:30:44,880 --> 00:30:46,920
place to invest than it was 10
years ago.

553
00:30:46,920 --> 00:30:49,200
So yeah, it's had a big impact
already.

554
00:30:49,200 --> 00:30:52,800
And, and the government now
there's no excuse.

555
00:30:52,920 --> 00:30:55,880
There's no like, oh, we're not,
you know, the Prime Minister is

556
00:30:55,880 --> 00:30:57,280
a busy guy.
I'll give him that.

557
00:30:57,280 --> 00:30:58,800
It's very hard to be across a
lot of topics.

558
00:30:59,000 --> 00:31:02,880
He's fucking across this now,
like he knows the leverage that

559
00:31:02,880 --> 00:31:05,480
coal and gas provide to us in
this moment of crisis.

560
00:31:05,520 --> 00:31:08,040
Can't just sit there saying
hydrocarbons are bad.

561
00:31:08,040 --> 00:31:10,320
Yeah, this, this exactly.
You can't run this.

562
00:31:10,320 --> 00:31:13,840
Hydrocarbons are evil garbage
anymore, right?

563
00:31:13,840 --> 00:31:16,200
There's a real world that we
exist in and and there's no

564
00:31:16,200 --> 00:31:18,360
excuse for the for the politics
anymore.

565
00:31:18,560 --> 00:31:21,000
And I'm not here to advocate,
you know, the Liberal Party

566
00:31:21,000 --> 00:31:24,320
haven't done a great job either.
You know, they oversaw the

567
00:31:24,320 --> 00:31:28,400
reduction in in our processing
capacity and at the same time,

568
00:31:28,400 --> 00:31:32,040
you know, offshore strategic
reserves, which is just a

569
00:31:32,480 --> 00:31:35,360
laughable outcome.
So everybody's got to own, own

570
00:31:35,360 --> 00:31:37,520
their shit here.
No side of politics has been

571
00:31:37,520 --> 00:31:40,200
good.
The sector itself, like the,

572
00:31:40,200 --> 00:31:43,320
the, you know, the participants,
I would argue, haven't done

573
00:31:43,640 --> 00:31:46,120
themselves any favours with
infrastructure, also haven't

574
00:31:46,120 --> 00:31:48,880
done themselves any favours in
talking about these issues.

575
00:31:48,880 --> 00:31:53,120
And I think we've all really let
groups like like these NGOs and

576
00:31:53,560 --> 00:31:57,440
these special interest groups,
Pococks, Teals, punter get away

577
00:31:57,440 --> 00:31:59,040
with it.
You know, they've really gotten

578
00:31:59,040 --> 00:32:01,120
away with the narrative.
So and.

579
00:32:01,800 --> 00:32:05,840
The industry got too scared to
defend itself and yeah, hit off

580
00:32:05,840 --> 00:32:09,040
in its whole thought it could
just do its production, take the

581
00:32:09,040 --> 00:32:12,480
cash flow.
But you know, I think the the

582
00:32:12,480 --> 00:32:16,480
current times have highlighted
the by doing that, the focus has

583
00:32:16,480 --> 00:32:20,680
turned to them and their taxes
where you need to look more

584
00:32:20,680 --> 00:32:24,280
broadly at what is that gas
doing in our economy.

585
00:32:24,480 --> 00:32:25,760
If you're tobacco, you can do
that.

586
00:32:26,760 --> 00:32:29,200
If you're energy, guess what?
We all fucking need it.

587
00:32:29,440 --> 00:32:30,960
Yeah.
I mean, what are the sectors

588
00:32:30,960 --> 00:32:32,840
really, you know, this space
really well.

589
00:32:32,840 --> 00:32:35,720
There's sectors that depend on
on on gas Australia.

590
00:32:35,920 --> 00:32:39,560
Look at WI, you look at our
economy, yeah, reason we're all

591
00:32:39,560 --> 00:32:42,840
sitting around this table is
based on our resource industry.

592
00:32:43,240 --> 00:32:47,440
And so the LNG sector, you know,
it's been demonized, it hasn't

593
00:32:47,440 --> 00:32:50,880
defend itself, it's done all the
the the mistakes that we've

594
00:32:50,880 --> 00:32:56,080
spoken about, but it supports,
it's our local domestic gas

595
00:32:56,080 --> 00:32:58,480
market as well.
So we've got a very large

596
00:32:58,480 --> 00:33:03,440
domestic gas market here in WA.
So 1000 terajoules a day of

597
00:33:03,440 --> 00:33:08,440
local gas supply that virtually
you know 80 plus percent of it

598
00:33:08,440 --> 00:33:13,440
comes from big LNG projects that
you know have been developed for

599
00:33:13,440 --> 00:33:17,480
the export market.
Have we have our 15% domestic

600
00:33:17,480 --> 00:33:21,720
gas obligation that has worked
well to add additional volume

601
00:33:21,720 --> 00:33:24,040
into the market?
So those those facilities when

602
00:33:24,040 --> 00:33:26,560
they came online, they had to
make a commitment that that 15%

603
00:33:26,560 --> 00:33:29,760
of their production is reserved
for WA domestic gas purposes.

604
00:33:30,080 --> 00:33:32,160
Yep.
So Alan Carpenter, very good of

605
00:33:32,160 --> 00:33:33,600
him.
He got that in place.

606
00:33:33,640 --> 00:33:38,480
It's, it's stand the test of
time, but what it relies on, and

607
00:33:38,480 --> 00:33:42,320
this is part of the challenge
with it in WA is it's relied on

608
00:33:42,320 --> 00:33:45,640
mega projects.
So it's, you know, originally

609
00:33:45,640 --> 00:33:49,600
the Northwest Shelf development,
you're provided a huge amount of

610
00:33:49,600 --> 00:33:53,600
gas that built new industries
in, in Australia, in WA.

611
00:33:53,880 --> 00:33:56,680
So a brilliant example is you
have Northwest Shelf

612
00:33:56,680 --> 00:34:00,640
development, it was it was
Charlie Court back in the day

613
00:34:01,000 --> 00:34:05,640
got the government behind it.
They underwrote the damped A

614
00:34:05,640 --> 00:34:09,440
Bunbury pipeline, the government
underwrote the toll charges on

615
00:34:09,440 --> 00:34:13,639
it to enable the investment to
take place 1500 kilometer

616
00:34:13,639 --> 00:34:16,719
pipeline.
What the way they did that was

617
00:34:16,719 --> 00:34:20,679
putting Alcoa at the southern
end of it, building an entire

618
00:34:20,679 --> 00:34:24,440
new aluminium industry, the
jobs, the export, the industry

619
00:34:24,440 --> 00:34:27,719
that that's created by using
that domestic gas.

620
00:34:28,639 --> 00:34:32,719
But it took the the you know,
the vision of someone like a a

621
00:34:32,719 --> 00:34:35,760
Charlie court to put the
government balance sheet behind

622
00:34:35,760 --> 00:34:40,000
it to enable your 2040 fifty
year horizon investment to take

623
00:34:40,000 --> 00:34:43,239
place as then in supported in
supported the entire industry

624
00:34:43,239 --> 00:34:47,520
offshore.
But I, I think WA hypes itself

625
00:34:47,520 --> 00:34:51,800
up on the domestic gas policy,
but it only works if you're

626
00:34:51,800 --> 00:34:53,800
bringing on new LNG
developments.

627
00:34:54,280 --> 00:34:58,320
So you need those mega projects
and you know, everyone's

628
00:34:58,320 --> 00:35:01,400
memories are short.
You know, the big new projects

629
00:35:02,040 --> 00:35:05,880
occurred, you know, around the
2015, two, 1017 that were

630
00:35:05,880 --> 00:35:10,160
delivered with Wheatstone and
and Gorgon.

631
00:35:10,680 --> 00:35:13,800
Prior to that, there hadn't been
that ongoing to vet regular

632
00:35:13,800 --> 00:35:16,280
development.
So they put a lot of gas into

633
00:35:16,280 --> 00:35:19,320
the market and we can sit back
now and say, oh, we got

634
00:35:19,320 --> 00:35:23,200
comfortable low, low cost gas,
especially compared to the East

635
00:35:23,200 --> 00:35:25,400
Coast.
But you only have to look just

636
00:35:25,400 --> 00:35:28,680
before those projects were
delivered, domestic gas prices

637
00:35:28,680 --> 00:35:36,360
were $10 to $13 gigajoule.
Here in WA, the Cytic Cyano iron

638
00:35:36,360 --> 00:35:40,400
project paid nearly $13 a
gigajoule for long term gas

639
00:35:40,400 --> 00:35:43,720
supply.
So hindsight, people forget it,

640
00:35:43,840 --> 00:35:47,920
it's it's cyclical, large
investment deliver volumes, but

641
00:35:47,920 --> 00:35:49,560
we need to have them more
regularly.

642
00:35:49,840 --> 00:35:53,400
This is such a great point.
I think, yeah, we all live in a

643
00:35:53,400 --> 00:35:55,400
lag.
It's really, really hard to, to

644
00:35:55,400 --> 00:35:59,880
stay aware of that, that lag and
you know, the, the, the nation

645
00:36:00,120 --> 00:36:04,560
itself lives in the lag.
You know, a lot of our, our

646
00:36:04,560 --> 00:36:07,840
income is built off, you know,
investment decisions,

647
00:36:07,840 --> 00:36:10,440
particularly in our exports.
You know, whether that's, you

648
00:36:11,360 --> 00:36:14,480
know, food and grain or, you
know, the AG sector or the, the

649
00:36:14,480 --> 00:36:17,840
metals, mining and energy
sectors, they're off, you know,

650
00:36:17,840 --> 00:36:24,040
the revenues today that underpin
our federal revenues to the

651
00:36:24,040 --> 00:36:27,520
government, they are all off
decisions that were made ten

652
00:36:27,520 --> 00:36:30,440
years ago.
Plus, you know, they, it takes

653
00:36:30,440 --> 00:36:33,160
so long for a lot of these
things to flow through.

654
00:36:33,560 --> 00:36:37,400
And so I think what we don't
recognise is, yeah, if you if

655
00:36:37,400 --> 00:36:40,280
you make the landscape difficult
for a period of time, eventually

656
00:36:40,280 --> 00:36:44,080
that's going to show up.
And if you want a case study in

657
00:36:44,080 --> 00:36:48,920
that, just go look at Victoria.
What a fucking basket case that

658
00:36:49,080 --> 00:36:51,880
joint is.
Like what an absolute shamozzle.

659
00:36:51,880 --> 00:36:55,800
You know, the rest of us are all
subsidizing that state purely

660
00:36:55,800 --> 00:36:58,640
because of its woeful decision
making, you know, banning

661
00:36:58,640 --> 00:37:03,240
onshore gas developments
effectively that it's not for

662
00:37:03,240 --> 00:37:05,600
lack of resource.
It's not because the geology is

663
00:37:05,600 --> 00:37:08,560
no good in Victoria.
You know, soft rocks or hard

664
00:37:08,560 --> 00:37:09,520
rocks.
There's plenty of both.

665
00:37:09,520 --> 00:37:12,040
In fact, you know, one of the
best gold mines in Australia is

666
00:37:12,040 --> 00:37:14,320
in Victoria.
But they're, you know, these are

667
00:37:14,320 --> 00:37:18,880
all old developments.
And and so the the impacts of

668
00:37:18,880 --> 00:37:21,520
these terrible decisions that
that were made, you know,

669
00:37:21,840 --> 00:37:26,080
populist, socialist type
decision making, they only show

670
00:37:26,080 --> 00:37:28,080
up now and then.
You look at Victoria now and

671
00:37:28,640 --> 00:37:30,600
it's a disaster.
And if, if we want the whole

672
00:37:30,600 --> 00:37:33,520
country to go the same way,
well, you know, keep listening

673
00:37:33,520 --> 00:37:37,680
to yeah, Dave Pocock and punt to
politics and well, we can all be

674
00:37:37,680 --> 00:37:40,760
in a massive black hole.
We're we're still in one still

675
00:37:40,760 --> 00:37:43,920
running deficits.
Well, effectively, we've had a

676
00:37:43,920 --> 00:37:46,640
couple of, couple of neat years,
but yeah, it's all been on the

677
00:37:46,640 --> 00:37:49,760
back of, of, of effectively the,
the export sector.

678
00:37:49,960 --> 00:37:53,000
And, and that's, you know,
metals and mining, energy and

679
00:37:53,000 --> 00:37:55,840
AG.
And if we don't really get

680
00:37:55,840 --> 00:37:58,840
behind those sectors, if, if
people that live in, in cities

681
00:37:58,840 --> 00:38:02,720
and, and, and, you know, work
at, you know, advertising

682
00:38:02,720 --> 00:38:06,240
agencies or whatever, and they
feel a bit disconnected from all

683
00:38:06,240 --> 00:38:07,640
of that.
And I understand why, but, but

684
00:38:07,640 --> 00:38:10,280
they need to do their homework
and there's no excuse anymore.

685
00:38:10,440 --> 00:38:12,000
Everyone's got AI in their
pocket.

686
00:38:12,520 --> 00:38:16,440
Whenever you hear a claim that's
made, a statement that's made

687
00:38:16,720 --> 00:38:19,240
before you go on, like
emotionally invest in that

688
00:38:19,240 --> 00:38:22,640
because you think it marries
your, your ideology, just, you

689
00:38:22,640 --> 00:38:26,320
know, jump it into your, your
clot or your open AI or whatever

690
00:38:26,320 --> 00:38:29,640
and just say, Hey, objectively,
can you please analyse this for

691
00:38:29,640 --> 00:38:33,800
me and, and give me the, the
true facts and figures and, and

692
00:38:34,080 --> 00:38:35,560
yeah, no one's got an excuse
anymore.

693
00:38:36,440 --> 00:38:39,720
You know, please stop buying
into social media narratives and

694
00:38:39,720 --> 00:38:41,960
bullshit and and just check
things.

695
00:38:42,680 --> 00:38:45,440
Will, how do you think about the
Domcast situation over E that's

696
00:38:45,440 --> 00:38:47,960
been far more publicized, more
people live on that part of

697
00:38:47,960 --> 00:38:49,640
Australia.
I'd love to hear your thoughts.

698
00:38:50,280 --> 00:38:53,600
Yeah, it gets all the media
attention, you know, the Dom gas

699
00:38:53,600 --> 00:38:58,760
situation on the East Coast, the
shortfalls that are at risk of

700
00:38:58,760 --> 00:39:00,920
hitting that sector.
And you know, as Rusty was

701
00:39:00,920 --> 00:39:03,920
saying, they've, they've done
themselves 0 favours in in

702
00:39:03,920 --> 00:39:07,080
southern East Coast.
You know, the entire industries

703
00:39:07,080 --> 00:39:11,640
in Victoria and NSW have
effectively been been shut down.

704
00:39:12,800 --> 00:39:18,160
So it gets a lot of attention.
You know, Queensland then has to

705
00:39:18,160 --> 00:39:20,320
support it.
You know, they're providing that

706
00:39:20,320 --> 00:39:24,840
gas to back up the shortages
that occur especially seasonally

707
00:39:24,840 --> 00:39:28,280
in Victoria.
So Victoria has a very seasonal

708
00:39:28,280 --> 00:39:33,040
domestic gas market eventually
double s during during winter

709
00:39:33,440 --> 00:39:36,560
and very Peaky during the the
day as well.

710
00:39:37,000 --> 00:39:40,880
So and you Queensland has
stepped up to help provide that

711
00:39:40,880 --> 00:39:45,800
gas, but you know, it hasn't got
the support from from from NSW

712
00:39:45,800 --> 00:39:48,600
and Victoria.
The shortfalls there are pretty

713
00:39:48,600 --> 00:39:52,600
small though their market is
much smaller than the WA market.

714
00:39:53,000 --> 00:39:58,200
You know, I think you're talking
you kind of up to 100 terajoules

715
00:39:58,200 --> 00:40:02,440
a day of shortfall that they're
facing and.

716
00:40:02,840 --> 00:40:04,880
WA something.
Else WA look.

717
00:40:04,920 --> 00:40:08,640
At you look at the ammo like
forecast out and I mean I mean

718
00:40:08,640 --> 00:40:11,440
things get dire even with their
rosy assumptions of new supply

719
00:40:11,440 --> 00:40:13,880
that comes online which which
there's a lot of question marks

720
00:40:13,920 --> 00:40:15,560
over as well it's.
Yeah.

721
00:40:15,640 --> 00:40:18,880
And that's demand stepping down
because the alumina refineries

722
00:40:18,880 --> 00:40:22,600
are have you know to your point
being opened in the 60s, they're

723
00:40:22,600 --> 00:40:25,960
shutting down one of three
alcohol last year curtailed the

724
00:40:25,960 --> 00:40:28,280
year before.
So that's with that step down

725
00:40:28,640 --> 00:40:30,440
in.
Demand and so to put some of the

726
00:40:30,440 --> 00:40:34,760
markets into to scale.
So yeah, WA domestic market, I

727
00:40:34,760 --> 00:40:39,760
mentioned 1000 terajoules of gas
a day that is more than NSW and

728
00:40:39,760 --> 00:40:43,440
Victoria combined.
So this is a big market here.

729
00:40:43,800 --> 00:40:46,880
And it comes back to the points
around, you know, the gas

730
00:40:46,880 --> 00:40:49,280
industry gets a lot of this
attention and negative

731
00:40:49,280 --> 00:40:52,080
attention, right?
But what is it supporting

732
00:40:52,080 --> 00:40:55,960
throughout our economy?
WA is a brilliant example of it.

733
00:40:56,360 --> 00:41:00,840
So thousand terajoules a day
into the domestic market, 80% of

734
00:41:00,840 --> 00:41:05,440
that goes to 8 customers.
So Alcoa's 20% of the market,

735
00:41:05,720 --> 00:41:09,160
they use over 200 terajoules a
day.

736
00:41:09,160 --> 00:41:14,440
NSW, 290 terajoules a day.
So you got 1 customer, nearly as

737
00:41:14,440 --> 00:41:18,280
big as the entire most populous
state in the nation in their

738
00:41:18,280 --> 00:41:20,360
consumption.
But you look at what that

739
00:41:20,360 --> 00:41:24,400
supports throughout our economy.
So the other major buyers, you

740
00:41:24,400 --> 00:41:29,200
know, W farmers 7% Yara
producing our Petro chemicals

741
00:41:29,200 --> 00:41:35,160
and our explosives for and and
fertilizers for for farmers S 32

742
00:41:35,160 --> 00:41:40,080
again, alumina BHP, these are
these are the industries that

743
00:41:40,080 --> 00:41:44,440
drive our economy.
So without that, we don't have

744
00:41:45,160 --> 00:41:48,400
power generation on our iron ore
mines, we don't have power

745
00:41:48,400 --> 00:41:53,200
generation on our gold mines.
We don't have our petrochemical

746
00:41:53,400 --> 00:41:56,200
industry supporting the
explosives we need.

747
00:41:56,200 --> 00:41:59,040
We don't have the fertilizer we
need locally for our

748
00:41:59,040 --> 00:42:02,880
agriculture.
So from those LNG facilities and

749
00:42:02,880 --> 00:42:06,600
that little bit of PRRT tax that
they pay, ignoring all the rest

750
00:42:06,600 --> 00:42:10,640
of it comes our economy.
So that thousand terajoules a

751
00:42:10,640 --> 00:42:16,640
day from some great Asil Allen
work that supports over you know

752
00:42:16,680 --> 00:42:21,520
370 billion of local economic
product.

753
00:42:22,000 --> 00:42:25,880
So mining industry churning out
nearly 200 billion a year of

754
00:42:25,880 --> 00:42:30,960
mining, of mining productivity,
mineral processing $20 billion a

755
00:42:30,960 --> 00:42:36,320
year, your utilities 12 billion,
transport and logistics 27

756
00:42:36,320 --> 00:42:39,480
billion, construction 64
billion.

757
00:42:39,800 --> 00:42:43,760
So the work that I saw Allen did
showed that there was over

758
00:42:44,040 --> 00:42:49,920
400,000 full time equivalent
jobs supported in WA from that

759
00:42:50,120 --> 00:42:53,160
energy supply into the market.
Yeah, and there's some.

760
00:42:53,560 --> 00:42:58,200
Like some amusing lunacy again
in you know from the left on

761
00:42:58,200 --> 00:43:01,200
this.
Like the one thing that can

762
00:43:01,200 --> 00:43:05,800
actually make renewables semi
decent, semi decent, and I say

763
00:43:05,800 --> 00:43:11,360
that carefully, is gas, right?
Batteries can do a piece of it,

764
00:43:11,520 --> 00:43:14,720
but ultimately you need the gas
for the firming and they rail

765
00:43:14,720 --> 00:43:17,360
against it.
Gas by the way, emits 0

766
00:43:17,360 --> 00:43:20,400
particulates, so I can
understand an argument against

767
00:43:20,400 --> 00:43:23,000
coal.
You can believe or not the

768
00:43:23,000 --> 00:43:24,880
fatalism around carbon in the
atmosphere.

769
00:43:24,880 --> 00:43:28,200
I, I, I don't, I don't believe
we have any tipping edge.

770
00:43:28,880 --> 00:43:30,520
Plants use carbon.
That's food.

771
00:43:30,520 --> 00:43:32,320
That's that's how you create
wood.

772
00:43:33,000 --> 00:43:38,320
But anyway, even if you did, the
the reality is that gas is just

773
00:43:38,320 --> 00:43:40,760
so much better result than than
say coal.

774
00:43:40,760 --> 00:43:42,640
You're not emitting any
particular matter.

775
00:43:42,640 --> 00:43:45,560
So there's no smog that goes out
with a, with, with gas power

776
00:43:45,560 --> 00:43:47,440
Gen.
It is absolutely critical.

777
00:43:47,440 --> 00:43:49,760
You can turn it on and off
really easy, unlike coal.

778
00:43:49,800 --> 00:43:52,880
You know, those, those you can't
sort of switch them on and off.

779
00:43:52,880 --> 00:43:58,040
So it's perfect for peaking.
So to even realize what I

780
00:43:58,040 --> 00:44:01,320
believe is it's just a
fundamentally idiotic green

781
00:44:01,320 --> 00:44:04,640
dream even to realize it.
They won't get past their own

782
00:44:04,640 --> 00:44:09,160
ideology to accept gas, which is
just fundamental to making it

783
00:44:09,200 --> 00:44:12,880
remotely workable because, you
know, economic output is just

784
00:44:12,880 --> 00:44:16,000
energy converted.
So you need cheap and reliable

785
00:44:16,000 --> 00:44:19,000
energy to drive any form of
economic output.

786
00:44:19,000 --> 00:44:20,440
That is just a statement of
fact.

787
00:44:21,040 --> 00:44:23,800
And the minute you destabilize
that, you become far less

788
00:44:24,840 --> 00:44:26,800
productive and we all live
worse.

789
00:44:26,960 --> 00:44:28,480
And that's effectively what's
happening.

790
00:44:28,480 --> 00:44:31,520
And if you don't believe what
I'm saying, you know, go on

791
00:44:31,720 --> 00:44:33,920
again, jump on your AI, run case
studies in Europe.

792
00:44:34,120 --> 00:44:36,680
Look at the de industrialization
of Europe.

793
00:44:36,680 --> 00:44:39,960
That's going on purely as a
result of this sort of obsession

794
00:44:39,960 --> 00:44:43,720
with green dreams around carbon
when, you know, there's so many

795
00:44:43,720 --> 00:44:46,240
more real environmental issues
that actually need to be

796
00:44:46,240 --> 00:44:48,400
addressed in my mind before
carbon.

797
00:44:48,400 --> 00:44:53,240
And so, yeah, I just find the,
the, the the narratives from

798
00:44:53,240 --> 00:44:56,040
from from these sort of
environmental evangelists.

799
00:44:56,520 --> 00:45:01,040
It's so incredibly sort of
hilarious in some ways.

800
00:45:01,560 --> 00:45:05,320
And and again, like even if you
look at Germany, you know, again

801
00:45:05,320 --> 00:45:07,720
they get caught their heads so
far up their own asses in

802
00:45:07,720 --> 00:45:14,080
ideology is like the one produce
sort of centre of production of

803
00:45:14,080 --> 00:45:17,040
0 carbon energy in Germany was
the nuclear industry.

804
00:45:17,720 --> 00:45:21,200
But because the green movement
was founded in the 70s opposing

805
00:45:21,200 --> 00:45:24,680
nuclear energy, it was their
like reason for being they

806
00:45:24,680 --> 00:45:29,120
couldn't get past it.
So they shut off their own

807
00:45:29,120 --> 00:45:32,240
nuclear industry that was
producing 0 carbon even as they

808
00:45:32,240 --> 00:45:35,880
sold their new ideology which
was carbon is the, you know,

809
00:45:35,920 --> 00:45:40,520
fatalist, you know, greatest
challenge of humanity, sort of

810
00:45:40,560 --> 00:45:43,200
sort of thematic.
Even as they sold that, they

811
00:45:43,240 --> 00:45:46,360
turned off their one power Gen.
sector that was zero.

812
00:45:47,560 --> 00:45:49,840
What?
Rusty, you've got to release a

813
00:45:50,120 --> 00:45:53,120
documentary, I think called The
Ironic Inconvenient Truth and

814
00:45:53,840 --> 00:45:56,920
present those facts.
Yeah, I mean, you know, I'm all

815
00:45:56,920 --> 00:45:59,720
for like direction to travel
around doing things better, but

816
00:45:59,720 --> 00:46:01,840
but let's be objective about
what better really is.

817
00:46:02,280 --> 00:46:05,440
And and let's also be objective
about like how long, you know, a

818
00:46:05,440 --> 00:46:08,280
time frame these things take.
You know, this capital gets

819
00:46:08,280 --> 00:46:10,680
invested in these pieces of
infrastructure.

820
00:46:11,160 --> 00:46:13,680
They they're incredibly
expensive and they take an

821
00:46:13,680 --> 00:46:15,560
incredibly long time to get a
return on capital.

822
00:46:15,880 --> 00:46:18,680
So like just turning, you know,
just turning shit on and off

823
00:46:18,960 --> 00:46:22,960
because you you've decided one
day you woke up and and you

824
00:46:22,960 --> 00:46:25,200
know, you had to save the planet
in your own.

825
00:46:25,320 --> 00:46:28,520
Like it's not that simple.
It's the real world.

826
00:46:28,720 --> 00:46:33,040
As I said, billions and billions
of people, all of us are out of

827
00:46:33,040 --> 00:46:35,960
poverty because of our use of
hydrocarbons.

828
00:46:36,480 --> 00:46:40,320
So like, you know, OK, so.
It's the only mechanism like

829
00:46:40,320 --> 00:46:42,840
that we've ever seen throughout
history of of going from poverty

830
00:46:42,840 --> 00:46:46,720
to development is utilizing.
Yeah, yes, it's an objective

831
00:46:46,720 --> 00:46:50,320
fact.
So let's you know, and, and the,

832
00:46:50,400 --> 00:46:54,520
the, the, the dramatisation, the
fatalism around, you know, how

833
00:46:54,520 --> 00:46:57,000
long this has, how quickly this
has to change.

834
00:46:57,000 --> 00:46:59,480
And it's, it's, it's just
objectively bullshit.

835
00:46:59,880 --> 00:47:04,320
And and even even then, like you
can't do it unless there's

836
00:47:04,320 --> 00:47:07,080
global agreement.
So if you do it stand alone like

837
00:47:07,080 --> 00:47:10,880
Europe does, because it's so
high and mighty, it it means so

838
00:47:10,880 --> 00:47:14,600
much to extol virtue to
Europeans that they will commit

839
00:47:14,600 --> 00:47:18,720
economic Harry carry like full
blown economic suicide in order

840
00:47:18,720 --> 00:47:23,160
to say, you know, we led by
example and China just turns

841
00:47:23,160 --> 00:47:26,040
around, goes fucking no worries,
good for you.

842
00:47:26,600 --> 00:47:28,520
Here's a car that you don't
produce anymore.

843
00:47:28,520 --> 00:47:31,200
You want to buy it from me?
Like that's that's where it's

844
00:47:31,200 --> 00:47:34,440
all going.
You know, and and I think I

845
00:47:34,440 --> 00:47:37,800
think we just got to talk facts
and and and no more slogans, no

846
00:47:37,800 --> 00:47:41,040
more, no more simplifying sort
of complex issues.

847
00:47:41,760 --> 00:47:45,680
We all want to do things cleaner
better over time, But let's be

848
00:47:45,680 --> 00:47:48,960
objective about how long that
takes, what cleaner actually is.

849
00:47:49,360 --> 00:47:51,760
And, and, and you know, to gas,
gas is clean.

850
00:47:52,040 --> 00:47:55,080
It is genuinely clean.
We should be pulling as much of

851
00:47:55,080 --> 00:47:56,600
that stuff out of the ground as
we can.

852
00:47:57,000 --> 00:48:01,240
We, we we have great all bodies
here in English.

853
00:48:01,240 --> 00:48:03,200
I don't know if all bodies right
reservoirs.

854
00:48:03,360 --> 00:48:04,600
Perhaps.
Yep, reservoirs will.

855
00:48:04,760 --> 00:48:08,120
Do better, better term
technically and and you know,

856
00:48:08,160 --> 00:48:10,480
we, we should be encouraging the
sector and fostering the sector.

857
00:48:10,480 --> 00:48:12,760
It's a great sector.
We should get right behind it.

858
00:48:12,760 --> 00:48:16,520
There are, you know, there are
some bigger companies still here

859
00:48:16,520 --> 00:48:18,480
in Australia, Not many, you
know, not many left

860
00:48:18,480 --> 00:48:20,920
unfortunately.
And, and then a smattering of

861
00:48:20,920 --> 00:48:25,520
juniors.
And yeah, I, I will say even

862
00:48:25,520 --> 00:48:27,600
then it's, it's like it's, it's
hard, you know, for an

863
00:48:27,600 --> 00:48:29,320
investment point of view.
I, I tried, I was at a

864
00:48:29,320 --> 00:48:31,800
conference, tried to speak to
like 5 different fund managers

865
00:48:31,800 --> 00:48:34,240
about energy stocks.
Never want to have fucking have

866
00:48:34,240 --> 00:48:35,480
a conversation.
They're like, go away.

867
00:48:36,000 --> 00:48:37,680
Where's gold?
We don't, yeah, just tell me

868
00:48:37,680 --> 00:48:40,560
about your gold picks.
Or like it's, it's bizarre, you

869
00:48:40,560 --> 00:48:43,560
know, the government's done such
a good job of just, I think just

870
00:48:43,560 --> 00:48:46,880
destroying any interest in, in
the sector, both governments

871
00:48:46,880 --> 00:48:50,280
again, left and right that, you
know, we're in this absolute

872
00:48:50,280 --> 00:48:53,160
moribund state.
And, and, and at the same time,

873
00:48:53,720 --> 00:48:56,520
you know, the Asian market is
going to come here.

874
00:48:56,640 --> 00:49:01,440
We are going to need more gas
domestically, AI infrastructure,

875
00:49:01,440 --> 00:49:03,720
all the rest of it.
We are going to need more gas

876
00:49:03,720 --> 00:49:05,480
domestically and we're going to
need to export more gas.

877
00:49:05,480 --> 00:49:07,240
So let's get the fuck on with
it.

878
00:49:08,200 --> 00:49:11,120
And it plays a trap to what you
asked about before of when you

879
00:49:11,120 --> 00:49:15,040
look at that AEMO forecast from
the WA gas statement of

880
00:49:15,040 --> 00:49:20,280
opportunity, it is downhill,
it's dire, dire and that's even

881
00:49:20,280 --> 00:49:22,480
when to the way they structure
it is they have.

882
00:49:23,360 --> 00:49:25,320
It was a demand forecast.
I'd I'd tell you with a grain of

883
00:49:25,320 --> 00:49:27,480
salt because no one can predict
that, but this is supply.

884
00:49:27,480 --> 00:49:30,840
Like with known depletion rates,
it is like utterly alarming when

885
00:49:30,840 --> 00:49:32,680
you just like go out for about
5-10 years.

886
00:49:32,720 --> 00:49:34,720
Yeah.
And, and this is, and you see

887
00:49:34,720 --> 00:49:37,680
what happened in market dynamics
to your point Jodie around the

888
00:49:37,680 --> 00:49:41,080
East Coast and gas shortages
there and the elevated prices we

889
00:49:41,080 --> 00:49:44,000
see in the East Coast market.
You know, they're paying near on

890
00:49:44,000 --> 00:49:49,680
net back LNG not prior to prior
to, to Hormuz, but you know

891
00:49:49,680 --> 00:49:53,880
they're paying around $13 a giga
Joule right now for, for gas on

892
00:49:53,880 --> 00:50:00,880
the East Coast right now WA
we're about 7 dollars $7.50 giga

893
00:50:00,880 --> 00:50:03,400
Joule.
So Mark difference and that's

894
00:50:03,400 --> 00:50:06,920
because we, the dynamics that
have hit the East Coast were

895
00:50:06,920 --> 00:50:11,640
that there was a, an overbuild
of LNG export capacity.

896
00:50:11,760 --> 00:50:15,160
As we mentioned there was only
ever hit kind of 85% capacity of

897
00:50:15,160 --> 00:50:18,760
their their exports.
Then you had a shutting down of

898
00:50:18,760 --> 00:50:21,520
an entire industry in the
southern East Coast.

899
00:50:21,520 --> 00:50:26,760
So you know industry shut down
in in Victoria just on natural

900
00:50:27,160 --> 00:50:30,640
upstream then on to natural
decline of their production.

901
00:50:30,960 --> 00:50:34,040
And so as soon as you get that
market hit where you've got an

902
00:50:34,040 --> 00:50:37,280
overcapacity of export
infrastructure and under supply

903
00:50:37,280 --> 00:50:40,800
into the domestic market, you
just suck that price point in

904
00:50:40,800 --> 00:50:45,320
for for net back pricing.
WA is running full steam ahead

905
00:50:45,320 --> 00:50:49,240
into the the same situation, but
exacerbated, you know,

906
00:50:49,280 --> 00:50:52,880
absolutely on heat because we
have larger markets, larger

907
00:50:52,880 --> 00:50:55,040
infrastructure that are running
out of gas.

908
00:50:55,520 --> 00:50:59,360
So last year we shut in the
first train at the Northwest

909
00:50:59,360 --> 00:51:02,520
shelf.
Woodside did so 17,000,000 ton

910
00:51:02,520 --> 00:51:05,160
facility.
They've shut in a 2 million ton

911
00:51:05,160 --> 00:51:08,920
train because they don't have
the feedstock, you know that set

912
00:51:08,920 --> 00:51:11,920
that's coastline there.
Between Karratha and Onslow,

913
00:51:12,360 --> 00:51:15,400
there's 50 million tons of LNG
export.

914
00:51:15,720 --> 00:51:20,200
It's 12 1/2% of the entire
global supply straight into

915
00:51:20,200 --> 00:51:22,920
Asia.
So very, very important for our

916
00:51:22,920 --> 00:51:26,760
trading partners, very important
for global supply, but we're

917
00:51:26,760 --> 00:51:29,280
going backwards.
We're shutting in infrastructure

918
00:51:29,280 --> 00:51:32,360
while we're leaving reserves in
the ground.

919
00:51:32,920 --> 00:51:37,760
So that has flow on effect not
only from our exports, but by

920
00:51:37,760 --> 00:51:41,440
not developing our projects
offshore, we restrict access of

921
00:51:41,440 --> 00:51:45,400
gas into the domestic market.
The flow on effect that for that

922
00:51:45,400 --> 00:51:49,600
is dire for WA.
Where are we going to get the,

923
00:51:49,720 --> 00:51:53,640
you can't replace the gas needed
Alcoa for their aluminum

924
00:51:53,640 --> 00:51:56,240
production.
You can't replace the gas needed

925
00:51:56,240 --> 00:51:59,920
for the power generation
throughout the gold fields and

926
00:51:59,920 --> 00:52:03,440
the iron ore operations.
You can't replace it for our

927
00:52:03,440 --> 00:52:06,000
explosives or our petrochemical
facilities.

928
00:52:06,480 --> 00:52:11,200
So we are facing a situation
here where got global upheaval

929
00:52:11,360 --> 00:52:15,720
where people are desperate to
find new supplies of, you know,

930
00:52:15,960 --> 00:52:19,640
supply chains to meet their
energy security into Asia.

931
00:52:20,080 --> 00:52:22,840
What are we doing?
We're shutting in LNG trains.

932
00:52:23,360 --> 00:52:26,960
So that's where the opportunity
sits and that's what we need to

933
00:52:26,960 --> 00:52:29,720
take advantage of.
We need government support.

934
00:52:29,720 --> 00:52:33,600
We need industry to support to
get the capital to go after it.

935
00:52:33,880 --> 00:52:37,240
We've got proven reserves in
these basins.

936
00:52:37,600 --> 00:52:42,400
We now need to focus on how we
take advantage of all of that

937
00:52:42,400 --> 00:52:44,840
infrastructure.
So you've got offshore

938
00:52:44,840 --> 00:52:49,640
platforms, offshore pipelines,
LNG facilities, onshore domestic

939
00:52:49,640 --> 00:52:53,320
gas market needing supply.
So we've got all of the

940
00:52:53,320 --> 00:52:55,920
components, reserves,
infrastructure market.

941
00:52:56,360 --> 00:53:00,280
It's now bring it together and
take advantage of it.

942
00:53:00,640 --> 00:53:04,680
You know, make the taxes for the
state, make the the royalties

943
00:53:04,680 --> 00:53:08,360
for the for the feds.
That's that's get that gas into

944
00:53:08,400 --> 00:53:10,160
into supply.
Yeah, it's, it's, it's

945
00:53:10,240 --> 00:53:13,560
absolutely critical.
It's so fundamental and and, you

946
00:53:13,560 --> 00:53:15,840
know, no amount of renewables
are going to solve the kind of

947
00:53:16,240 --> 00:53:18,160
the needs that we have.
They're just not they're

948
00:53:18,160 --> 00:53:21,160
fundamentally not.
So yeah, we we need to like this

949
00:53:21,160 --> 00:53:23,280
is urgent.
And in many ways, like if you,

950
00:53:23,800 --> 00:53:25,880
you know, if you wanted to take
so silver lining out of a very

951
00:53:25,880 --> 00:53:31,200
horrible situation in in hummus.
I think it is this sort of this

952
00:53:31,280 --> 00:53:33,920
point of awareness.
You know, luckily we're very

953
00:53:33,920 --> 00:53:36,360
fortunate that we've been
brought to this point of

954
00:53:36,360 --> 00:53:39,440
awareness of just how insecure
we are with our energy here,

955
00:53:39,560 --> 00:53:43,680
particularly in our refined
liquids and how vital our

956
00:53:43,840 --> 00:53:46,040
relationships with our trading
partners are through the energy

957
00:53:46,040 --> 00:53:49,240
that we export.
And, and you know, I think thank

958
00:53:49,240 --> 00:53:52,280
God it's happened in some ways
like now rather than, you know,

959
00:53:52,320 --> 00:53:53,640
three years or four years
because you've seen those

960
00:53:53,640 --> 00:53:56,120
forecasts.
I get bad pretty quick, and

961
00:53:56,440 --> 00:53:59,640
waking up late won't fix it if
there's a lag.

962
00:53:59,640 --> 00:54:02,520
Again, like deployment of
capital, bringing these things

963
00:54:02,920 --> 00:54:05,680
together, they take time.
So yeah, the government's going

964
00:54:05,720 --> 00:54:09,880
to do a much, much better job of
of fostering and encouraging the

965
00:54:09,880 --> 00:54:11,720
sector.
It's going to give regulatory

966
00:54:11,720 --> 00:54:13,960
certainty.
It's got to give, you know,

967
00:54:13,960 --> 00:54:16,760
legal certainty so that there
aren't, you can't have another

968
00:54:16,760 --> 00:54:18,320
process.
You can't blow up nearly a

969
00:54:18,320 --> 00:54:23,280
billion dollars on just absolute
NGO driven war like lawfare.

970
00:54:23,520 --> 00:54:26,040
That is psycho.
You you can't.

971
00:54:26,040 --> 00:54:28,560
So yeah, government's definitely
got a job to do.

972
00:54:28,800 --> 00:54:30,840
Sectors got a job to do selling
itself better.

973
00:54:32,480 --> 00:54:34,000
I think that's that's clear as
well.

974
00:54:34,400 --> 00:54:37,920
And and you know, investment
sector has a job to do too.

975
00:54:37,920 --> 00:54:40,960
You know, guys like cars like us
and and you know, we put our

976
00:54:40,960 --> 00:54:43,400
capital to work in this space.
It's been hard.

977
00:54:43,400 --> 00:54:46,280
It remains hard.
It's like hard to get guys

978
00:54:46,280 --> 00:54:50,440
interested, but you know, all of
us have a role to play coming

979
00:54:50,440 --> 00:54:53,960
out advocating just how
important the sector is and and,

980
00:54:54,040 --> 00:54:57,120
you know, trying to get
government to do all those

981
00:54:57,120 --> 00:54:59,280
things that I just discussed and
then and then provide the

982
00:54:59,280 --> 00:55:02,520
investment landscape that we all
need to get behind these these

983
00:55:02,520 --> 00:55:05,080
projects.
They're just like super

984
00:55:05,080 --> 00:55:07,680
critical, hyper critical.
Can we talk about the, we'll

985
00:55:08,720 --> 00:55:11,000
start with the West Australian
market, the ones that we're,

986
00:55:11,000 --> 00:55:13,680
we're probably all collectively
a bit more familiar with, but

987
00:55:13,680 --> 00:55:17,480
the, the actual projects that
move, move the dial to address,

988
00:55:17,680 --> 00:55:20,960
you know, some of these clear
supply issues.

989
00:55:21,280 --> 00:55:23,640
Looking at the future, what
what's left in the Northwest

990
00:55:23,640 --> 00:55:25,160
Shelf?
What's like, what's, what about

991
00:55:25,160 --> 00:55:27,480
the Perth Basin?
Like what, like realistically,

992
00:55:27,840 --> 00:55:31,760
you know, and what are the
players who, who have these?

993
00:55:31,760 --> 00:55:33,360
Like what's the appetite to
invest?

994
00:55:33,400 --> 00:55:36,440
And overlaying on that, what's
the government going to do about

995
00:55:36,440 --> 00:55:38,360
the people who don't have the
appetite to invest?

996
00:55:39,960 --> 00:55:43,800
Yeah, extremely good question.
Yeah, I'll touch on a couple of

997
00:55:43,800 --> 00:55:45,800
points, but jump in anytime,
Rusty.

998
00:55:45,800 --> 00:55:50,160
But the Perth Basin great
discoveries, so perfect for the

999
00:55:50,160 --> 00:55:53,840
domestic market, you know, right
on the pipeline right here where

1000
00:55:53,840 --> 00:55:58,040
the market is there of
meaningful scale.

1001
00:55:58,320 --> 00:56:01,960
You, you've you know, again
conflict of interest on the

1002
00:56:01,960 --> 00:56:05,360
board of of strike.
We've got great discovery, you

1003
00:56:05,360 --> 00:56:09,800
know, with, with Hancock Energy
at West Aragalla, that is about

1004
00:56:09,800 --> 00:56:14,920
half atcf of of gas.
So 500 billion cubic feet of gas

1005
00:56:15,240 --> 00:56:18,880
right next to the pipeline.
Perfect opportunity to get new

1006
00:56:18,880 --> 00:56:21,960
supply in to underwrite long
term production.

1007
00:56:22,200 --> 00:56:26,720
It could do around say 8090
terajoules a day.

1008
00:56:26,920 --> 00:56:30,080
It's around that 8-9 percent of
the the domestic market and it

1009
00:56:30,080 --> 00:56:32,720
could do it for 15, you know,
plus years.

1010
00:56:33,000 --> 00:56:36,800
So great opportunity to help
support that.

1011
00:56:36,800 --> 00:56:40,720
You know, that ugly curve that
we see in the the AEMO reports,

1012
00:56:42,120 --> 00:56:45,560
you know, there's a number a lot
of more exploration that can

1013
00:56:45,560 --> 00:56:47,360
take place throughout the Perth
Basin.

1014
00:56:48,480 --> 00:56:50,840
So we need to see that
investment.

1015
00:56:51,400 --> 00:56:55,800
You've got groups like Beach and
Mitsui been been leading the way

1016
00:56:56,040 --> 00:56:58,800
somewhat delayed, unfortunately,
with their their waits here

1017
00:56:58,800 --> 00:57:02,120
project.
And that's, you know,

1018
00:57:02,120 --> 00:57:06,280
established now into production,
putting out good cash flow for

1019
00:57:06,280 --> 00:57:08,400
them.
So we'd love to see that that

1020
00:57:08,400 --> 00:57:11,440
capital reinvest in more
exploration in the Perth Basin,

1021
00:57:12,160 --> 00:57:15,080
but you're always playing at the
edges with those, you know, the

1022
00:57:15,720 --> 00:57:18,880
projects that can do 5%, you
know.

1023
00:57:19,640 --> 00:57:20,880
They're handy, but they're not.
They're not.

1024
00:57:20,920 --> 00:57:24,800
They're not game changing,
they're not the big, big LNG

1025
00:57:24,800 --> 00:57:27,960
projects and a big 15% chunk
into the market.

1026
00:57:28,360 --> 00:57:32,320
The reality is the the reserves
in the Perth Basin are

1027
00:57:32,320 --> 00:57:35,240
insignificant compared to the
scale of the big offshore

1028
00:57:35,240 --> 00:57:41,320
projects on the Northwest Shelf.
And now in the Bidoo Basin where

1029
00:57:41,440 --> 00:57:44,280
another company that we're
associated with in Caernarfon is

1030
00:57:44,280 --> 00:57:47,280
located.
And then up in the the Browse

1031
00:57:47,280 --> 00:57:51,680
Basin where you know the Browse
gas fields controlled by

1032
00:57:51,680 --> 00:57:55,800
Woodside.
BP now has taken a very large

1033
00:57:55,800 --> 00:58:01,960
interest in that and Japanese
customers looking to to buy in.

1034
00:58:02,640 --> 00:58:06,760
So there's their projects that
can bring very large scale

1035
00:58:07,360 --> 00:58:12,480
resources to market that can
contribute, you know, 200

1036
00:58:12,480 --> 00:58:16,160
terajoules a day, 20% of the
market for 20 years into it.

1037
00:58:17,640 --> 00:58:22,560
So yeah, interesting mix of
assets that we need investment

1038
00:58:22,560 --> 00:58:25,120
across all of them.
The big thing in though, though,

1039
00:58:25,120 --> 00:58:31,000
is that we have this great
combination where we, we, the

1040
00:58:31,000 --> 00:58:34,440
Northwest Shelf is the original
Northwest Shelf joint venture.

1041
00:58:34,480 --> 00:58:38,200
You know, the woodsides, shells,
chevrons, all of the world who

1042
00:58:38,200 --> 00:58:42,960
are all in that, that runs out
of gas by around 2032.

1043
00:58:43,480 --> 00:58:47,800
So it's going from, you know,
17,000,000 tons per annum of

1044
00:58:47,800 --> 00:58:52,160
production to nothing.
They need brows to come on board

1045
00:58:52,560 --> 00:58:55,200
by the that early twenty 30s
period.

1046
00:58:55,600 --> 00:58:58,520
And even brows coming on board
can only replace about 10

1047
00:58:58,520 --> 00:59:01,280
million tons of production in
that facility.

1048
00:59:01,560 --> 00:59:04,680
So you've got your 5 to 7
million tons of idle

1049
00:59:04,680 --> 00:59:08,880
infrastructure.
The Pluto field will run out of

1050
00:59:08,880 --> 00:59:12,160
gas in the early twenty 30s as
well.

1051
00:59:12,440 --> 00:59:15,720
Scarborough replaces some of
that production, but there's 2

1052
00:59:15,720 --> 00:59:18,320
million tons of spare capacity
in that facility.

1053
00:59:18,840 --> 00:59:21,920
When you look at the volume of
gas needed to, to meet that

1054
00:59:21,920 --> 00:59:26,480
shortfall, it's around 2000
terajoules a day of gas supply,

1055
00:59:26,800 --> 00:59:32,560
so double the entire domestic
market in WA and you know around

1056
00:59:32,560 --> 00:59:36,600
2 1/2 times the NSW and
Victorian markets combined.

1057
00:59:37,160 --> 00:59:40,240
So you just think about what
impact that's going to have on

1058
00:59:40,240 --> 00:59:45,160
local supply of gas into the
market here domestically as well

1059
00:59:45,480 --> 00:59:49,160
when you've got idle LNG
infrastructure that that needs

1060
00:59:49,440 --> 00:59:52,720
to be full.
So opportunity is how do you

1061
00:59:52,720 --> 00:59:55,800
leverage that infrastructure?
How do you get those next tier

1062
00:59:55,800 --> 01:00:00,960
of projects into production,
tying in smaller production but

1063
01:00:00,960 --> 01:00:03,480
you can extend for another 20-30
years?

1064
01:00:04,280 --> 01:00:06,800
By completing the known
discoveries that we have.

1065
01:00:07,080 --> 01:00:09,280
Yeah.
And again, to sort of like lag

1066
01:00:09,280 --> 01:00:13,080
effects, even with that sort of
base of known discoveries,

1067
01:00:13,280 --> 01:00:15,000
there's there's a quality mix in
there, right.

1068
01:00:15,480 --> 01:00:19,000
And and what's happened that I
think when we started the show,

1069
01:00:19,000 --> 01:00:21,240
we talked about that, that start
of like 10 years ago, there were

1070
01:00:21,240 --> 01:00:26,160
5050 exploration wells and now
that in 2023 there's like 3.

1071
01:00:26,680 --> 01:00:29,800
So because we haven't been doing
the exploring as well for a

1072
01:00:29,800 --> 01:00:33,480
decade, not probably, we've
really had a real black dearth

1073
01:00:33,480 --> 01:00:35,680
of discoveries.
You know, Perth Basin is great,

1074
01:00:35,680 --> 01:00:39,240
it's a fantastic basin, but it's
it's handy in the context of the

1075
01:00:39,240 --> 01:00:41,120
numbers that we'll just sort of
covered.

1076
01:00:41,480 --> 01:00:44,320
It's helpful, but it isn't going
to solve the big picture.

1077
01:00:44,320 --> 01:00:47,560
And because we're not drilling,
because we've really dissuaded

1078
01:00:47,560 --> 01:00:50,200
investment.
You know, there's only a certain

1079
01:00:50,200 --> 01:00:52,560
number of sort of fields there
that are to be brought on.

1080
01:00:52,800 --> 01:00:54,800
And, you know, some of them
have, you know, high CO2

1081
01:00:54,800 --> 01:00:58,720
contents or high, you know,
things that you would ideally

1082
01:00:59,200 --> 01:01:01,640
preference something else to be
developed before.

1083
01:01:02,320 --> 01:01:04,120
We're not going to have that
luxury anymore.

1084
01:01:04,160 --> 01:01:06,960
We're going to have to.
It's a bit like it's, it's

1085
01:01:06,960 --> 01:01:10,240
almost the same as this
situation of like, oh, let's

1086
01:01:10,240 --> 01:01:12,280
turn off Australian coal
exports.

1087
01:01:12,760 --> 01:01:14,920
Yeah, OK, great.
Then fucking what?

1088
01:01:15,520 --> 01:01:19,960
All of those Asian clients go
down to Indonesia and buy way

1089
01:01:19,960 --> 01:01:23,560
worse coal and run it through
those same plants that still

1090
01:01:23,560 --> 01:01:26,920
require it.
So all you end up doing is

1091
01:01:26,920 --> 01:01:30,560
actually emitting more carbon
per unit of energy produced.

1092
01:01:30,560 --> 01:01:32,320
And it's kind of the same here
in the gas because we've

1093
01:01:32,320 --> 01:01:36,040
dissuaded the industry, you
know, in a, in a, in a proper

1094
01:01:36,040 --> 01:01:38,720
dynamic, you'd have lots of
ongoing drilling, lots of

1095
01:01:38,960 --> 01:01:42,440
ongoing investment and you could
prioritize what you develop.

1096
01:01:42,440 --> 01:01:43,560
Well, we're not going to have
that luxury.

1097
01:01:43,560 --> 01:01:46,480
We're going to end up having to
develop some of the the the

1098
01:01:46,480 --> 01:01:47,880
resources out there that are
just.

1099
01:01:47,880 --> 01:01:50,960
Yeah, absolutely dirtier Browse
is a a good example of it.

1100
01:01:50,960 --> 01:01:54,720
It runs at Pi CO2, it's 16 plus
percent CO2.

1101
01:01:54,720 --> 01:02:00,880
So it's dirty, but it's it's
vital to extending the life of

1102
01:02:00,880 --> 01:02:02,520
that infrastructure.
So let's look at the

1103
01:02:02,520 --> 01:02:06,560
sequestration opportunities.
How do we address the CO2?

1104
01:02:06,560 --> 01:02:10,400
We've got the infrastructure we
can look to to sequester that

1105
01:02:10,400 --> 01:02:13,160
appropriately and develop the
resource at the same time.

1106
01:02:13,640 --> 01:02:17,560
Your frustrating ones that you
might have alluded to there were

1107
01:02:17,840 --> 01:02:21,080
you're like Canarvan and
Santos's asset in the Badoo

1108
01:02:21,080 --> 01:02:25,400
Basin.
Dorado Discovery. 250 million

1109
01:02:25,400 --> 01:02:29,840
barrels of light sweet crude
sitting in 90 meters of water,

1110
01:02:30,200 --> 01:02:33,240
180 KS off the coast of Port
Hedland.

1111
01:02:33,240 --> 01:02:34,240
Best.
Discovery in 30.

1112
01:02:34,280 --> 01:02:38,200
Years it is amazing.
The IRR on the asset is

1113
01:02:38,480 --> 01:02:41,960
brilliant.
You know pay off period is year

1114
01:02:41,960 --> 01:02:44,920
and a bit.
You know it is a screamer of an

1115
01:02:44,920 --> 01:02:48,040
asset hasn't got into production
yet.

1116
01:02:48,160 --> 01:02:52,120
You know, Santos, we've just
limited the amount of operators

1117
01:02:52,120 --> 01:02:55,480
in country, right?
We've got Woodside, Santos

1118
01:02:55,760 --> 01:03:00,440
Beach, Amplitude, that's it,
right.

1119
01:03:00,440 --> 01:03:03,920
So we don't have that mid cap
sector out there.

1120
01:03:03,920 --> 01:03:07,200
We don't have the great
explorers like the Apaches that

1121
01:03:07,200 --> 01:03:11,320
were here, you know, with the
the 2000s and 10s just pumping

1122
01:03:11,320 --> 01:03:14,480
out exploration wells, making
discoveries and getting them

1123
01:03:14,480 --> 01:03:16,560
into production.
It's straight away, yeah.

1124
01:03:16,560 --> 01:03:18,520
And it's that foreign capital
that's got right.

1125
01:03:18,520 --> 01:03:21,160
The whole sector's been sort of
hollowed out domestically, and

1126
01:03:21,160 --> 01:03:23,040
then that foreign capital just
disappeared.

1127
01:03:23,400 --> 01:03:25,320
And.
And so, you know, you look at

1128
01:03:25,320 --> 01:03:28,280
like a situation with Dorado
that, you know, just

1129
01:03:28,320 --> 01:03:29,840
abstensively should be
developed.

1130
01:03:30,600 --> 01:03:32,080
You know, Santos have their own
issues, right?

1131
01:03:32,080 --> 01:03:33,880
They're not, they're not immune
to all of this.

1132
01:03:33,920 --> 01:03:37,200
Barossa goes and costs them $800
million because of the the

1133
01:03:37,200 --> 01:03:39,120
lawfare that goes on.
That hurts, right?

1134
01:03:39,120 --> 01:03:40,680
And so that impacts their
balance sheet.

1135
01:03:41,080 --> 01:03:44,440
They then in order to get things
into production, they need to

1136
01:03:44,440 --> 01:03:47,640
sell down other assets.
They have been trying to do that

1137
01:03:48,560 --> 01:03:51,520
and they want to get paid proper
prices for them, but because

1138
01:03:51,600 --> 01:03:55,000
there isn't that pool of buyers
to come and do it like because

1139
01:03:55,000 --> 01:03:57,600
it, all of these offshore guys
are saying I don't want to come

1140
01:03:57,600 --> 01:03:59,320
to Australia anymore.
It's way too fucking hard.

1141
01:03:59,600 --> 01:04:01,680
Like I don't know what the rules
are going to be next year or the

1142
01:04:01,680 --> 01:04:04,560
year after or, you know, how
much law fair I'm going to have

1143
01:04:04,560 --> 01:04:07,240
to deal with once I get the
drill rig out to, to actually

1144
01:04:07,240 --> 01:04:09,360
develop the thing on, you know,
and it's on site.

1145
01:04:09,360 --> 01:04:15,440
So you know, it's, you know,
Santos, I've, you know, we've

1146
01:04:15,520 --> 01:04:16,840
had Full disclosure.
We've been buying it.

1147
01:04:16,840 --> 01:04:18,880
So, you know, put that out there
as well.

1148
01:04:19,200 --> 01:04:21,720
They have kind of been a bit
optionality obsessed, but also

1149
01:04:21,720 --> 01:04:24,800
optionality constrained like
because they they refused to

1150
01:04:24,800 --> 01:04:27,960
sell assets below what they felt
they were worth and there there

1151
01:04:27,960 --> 01:04:30,480
just wasn't the market to buy
them because everybody was so

1152
01:04:30,520 --> 01:04:31,920
petrified of coming to
Australia.

1153
01:04:31,920 --> 01:04:37,200
So that just has to change.
You know, Dorado absolutely has

1154
01:04:37,400 --> 01:04:40,920
like just has to be developed
and not only is it, you know,

1155
01:04:40,920 --> 01:04:43,760
all the characteristics that
we'll just described the

1156
01:04:43,760 --> 01:04:45,840
opportunity to have, you know,
if you're going to put refining

1157
01:04:45,840 --> 01:04:49,000
somewhere, put it right where
we're using all the products.

1158
01:04:49,200 --> 01:04:53,600
So to bring that into, say, a
Port Hedland or Karratha, yeah.

1159
01:04:53,760 --> 01:04:58,920
So yeah, it's unbelievable
opportunity and the right now in

1160
01:04:59,000 --> 01:05:03,640
in Port Hedland, you know, the
iron ore sector imports 1.6

1161
01:05:03,760 --> 01:05:07,360
billion litres of diesel a year
just for their own operations,

1162
01:05:07,840 --> 01:05:14,120
you know, mega importers.
And there's a project like

1163
01:05:14,120 --> 01:05:20,520
Dorado sitting there 180 KS away
that could do so 1.6 billion

1164
01:05:20,520 --> 01:05:25,520
litres a year, 10 million
barrels of of oil, well of

1165
01:05:25,520 --> 01:05:28,840
diesel.
But Dorado can produce 20

1166
01:05:28,840 --> 01:05:32,840
million barrels of oil a year
for a 10 year plus period.

1167
01:05:32,960 --> 01:05:36,360
Before you even look at all the
satellite opportunities, yes,

1168
01:05:36,360 --> 01:05:39,280
you've got to look at the
refining capacities and how much

1169
01:05:39,280 --> 01:05:42,800
it chucks out.
But right next door to Port

1170
01:05:42,800 --> 01:05:46,440
Hedland you've got Carratha.
Carratha still produces from

1171
01:05:46,440 --> 01:05:52,040
the, the LNG projects, still
pumping out 200,000 barrels of

1172
01:05:52,040 --> 01:05:56,800
crude and condensate a day.
These are huge volumes.

1173
01:05:57,080 --> 01:06:01,320
We then export all of that up
through Asia, Singapore, Korea

1174
01:06:01,680 --> 01:06:05,280
and then bring back the refined
product, some of those products

1175
01:06:05,280 --> 01:06:08,560
out of the, the Northwest shelf
actually traded a discount to

1176
01:06:08,560 --> 01:06:12,560
Brent, you know, up to A10
dollar, $13 discount to Brents

1177
01:06:12,880 --> 01:06:17,520
there you they're the margins
you can get by refinery locally

1178
01:06:17,520 --> 01:06:19,600
and being able to meet your
market needs.

1179
01:06:19,760 --> 01:06:21,480
So we could easily, you know,
we're not going to meet the

1180
01:06:21,480 --> 01:06:25,160
nation's needs, but if we could
meet some of those really

1181
01:06:25,160 --> 01:06:29,160
important supply chains like our
iron ore industry with local

1182
01:06:29,160 --> 01:06:33,080
product, that's great, you know,
outcomes for, for the state and

1183
01:06:33,080 --> 01:06:35,160
for the for the nation.
Yeah, there's certainly no lack

1184
01:06:35,160 --> 01:06:37,640
of inputs, right.
If we get Dorado going and we're

1185
01:06:37,640 --> 01:06:40,480
and we're using, you know,
existing sort of liquids that

1186
01:06:40,480 --> 01:06:42,760
are coming out of those gas
fields, then there's no lack of

1187
01:06:42,760 --> 01:06:45,320
inputs.
There is a question of

1188
01:06:45,320 --> 01:06:47,800
economics.
So, you know, these things

1189
01:06:47,800 --> 01:06:49,720
require work.
They also require governments to

1190
01:06:49,720 --> 01:06:52,200
get behind them.
But economics is 1 issue.

1191
01:06:52,400 --> 01:06:55,920
National security is another.
You know, if, if, you know, we

1192
01:06:55,920 --> 01:07:00,480
do have actors in our region who
do have ambitions, stated

1193
01:07:00,480 --> 01:07:03,960
ambitions, you know, we're,
we're in a, a landscape now of,

1194
01:07:04,240 --> 01:07:07,440
of multipolar world.
We're seeing that play out these

1195
01:07:07,440 --> 01:07:09,800
supply lines that they're not
secure.

1196
01:07:10,040 --> 01:07:12,480
So you know, some level of
domestic security, even if it

1197
01:07:12,480 --> 01:07:15,800
comes at, you know, at a, at a
maybe a high cost.

1198
01:07:15,800 --> 01:07:18,240
I think we have to think about
those things and and you know,

1199
01:07:18,240 --> 01:07:20,800
be a bit more proactive,
definitely have to have more

1200
01:07:20,800 --> 01:07:24,480
storage and even look at like
more innovative sort of swap

1201
01:07:24,480 --> 01:07:26,320
arrangements.
So if we are sending these

1202
01:07:26,320 --> 01:07:28,840
products up to Singapore, you
know, let's encourage them to

1203
01:07:28,840 --> 01:07:31,360
come, let's encourage Asia to
come down here and invest and

1204
01:07:31,360 --> 01:07:35,840
then let's you know, say a
Dorado for as an example and I'm

1205
01:07:35,840 --> 01:07:39,440
not speaking with my CVN hat on
here, where 10% Santos make all

1206
01:07:39,440 --> 01:07:41,840
the decisions.
Remind us of that because I

1207
01:07:41,840 --> 01:07:44,200
think, I think the context of
Dorado is important here.

1208
01:07:44,200 --> 01:07:48,000
So CVN 10% CPC, CPC the
Taiwanese 10.

1209
01:07:48,000 --> 01:07:50,080
Percent great partner to have.
Yeah, and.

1210
01:07:50,080 --> 01:07:52,320
Then Santos, 80. 80% and
controlling.

1211
01:07:52,320 --> 01:07:54,800
A natural 80, right?
Usually they like to control it.

1212
01:07:54,800 --> 01:07:57,760
Go to say 50.
They, you know, OK, as I

1213
01:07:57,760 --> 01:08:00,760
understand it, I think I'd like
to sell probably 30% and they

1214
01:08:00,760 --> 01:08:03,640
want a fair price for that.
But but you know, encourage Asia

1215
01:08:03,640 --> 01:08:06,720
to come down here, remove the
regulatory risks and the

1216
01:08:06,720 --> 01:08:08,760
lawfare.
And then let's be innovative.

1217
01:08:08,800 --> 01:08:11,880
Like, let's make it such that,
OK, why don't we have a swap

1218
01:08:11,880 --> 01:08:16,080
arrangement?
So every molecule of, of, of oil

1219
01:08:16,080 --> 01:08:18,479
that we're sending up through
Singapore, let's make sure we

1220
01:08:18,479 --> 01:08:22,960
get a back-to-back option, like
a right to that refined molecule

1221
01:08:22,960 --> 01:08:25,399
coming back here.
You know, those sorts of things.

1222
01:08:25,399 --> 01:08:27,800
We can get a lot more innovative
and creative.

1223
01:08:27,800 --> 01:08:30,760
But we do need government to
work with the private sector.

1224
01:08:31,000 --> 01:08:33,680
And we've got to stop demonizing
again, to this sort of point.

1225
01:08:33,880 --> 01:08:36,319
Stop demonizing the sector.
Get the fuck behind it.

1226
01:08:36,720 --> 01:08:42,479
Let's get busy, let's get
proactive and, and, you know, to

1227
01:08:42,479 --> 01:08:44,960
the benefit of all of us and our
neighbors, you know, neighbors

1228
01:08:44,960 --> 01:08:47,600
need it too.
That's I, I feel like this

1229
01:08:47,600 --> 01:08:49,680
conversation often gets so, so
selfish as well.

1230
01:08:49,680 --> 01:08:52,920
Like, oh, you know, we've got to
reduce our, our carbon emissions

1231
01:08:52,920 --> 01:08:54,800
and, and it's so vile.
It's like, yeah.

1232
01:08:54,800 --> 01:08:56,840
And there's a, there's billions
of people out there who don't

1233
01:08:56,840 --> 01:09:01,640
even have electricity and
they've got no form of energy in

1234
01:09:01,640 --> 01:09:05,560
their daily lives.
So, yeah, let's also, you know,

1235
01:09:05,560 --> 01:09:07,880
let us acknowledge the
complexity of these issues and,

1236
01:09:07,880 --> 01:09:11,479
and, and, and the reality is
Australia's got such a vital

1237
01:09:11,479 --> 01:09:15,000
role to play in, in helping Asia
pull more, you know, hundreds of

1238
01:09:15,000 --> 01:09:17,399
millions, if not a billion plus
people out of poverty.

1239
01:09:17,760 --> 01:09:20,800
And, and you know, hydrocarbons
are a key point part of that.

1240
01:09:20,800 --> 01:09:24,520
And and and we have them and and
we should have a lot more of

1241
01:09:24,520 --> 01:09:25,240
them too.
Yeah.

1242
01:09:25,240 --> 01:09:29,920
And you can see those, those
bilateral relationships

1243
01:09:29,920 --> 01:09:31,800
building.
You know, you had the the trade

1244
01:09:31,800 --> 01:09:35,200
minister from Japan down here a
few weeks ago meeting with

1245
01:09:35,200 --> 01:09:38,279
Madeleine King, the resource
minister, requesting that we

1246
01:09:38,680 --> 01:09:42,960
increase or at least meet our
LNG exports out of the nation to

1247
01:09:43,000 --> 01:09:46,040
to Japan.
We we're then importing the the

1248
01:09:46,040 --> 01:09:50,479
crude, the refined products back
from Japan and Korea and Taiwan.

1249
01:09:50,840 --> 01:09:55,360
So, yeah, I think that's what we
are going to see emerge those,

1250
01:09:55,840 --> 01:09:59,040
you know, those groupings of
like minded nations who are

1251
01:09:59,040 --> 01:10:02,320
willing to support each other,
help each other with product and

1252
01:10:02,320 --> 01:10:05,760
supply chains and we should be
leveraging ours.

1253
01:10:05,760 --> 01:10:09,880
And your Dorado's a brilliant
one that, you know, just has to

1254
01:10:09,880 --> 01:10:12,920
be developed.
And the right now you've got the

1255
01:10:12,920 --> 01:10:15,760
right environment, your
political environment for an oil

1256
01:10:15,760 --> 01:10:18,960
project, you know, four or five
years ago would have been really

1257
01:10:18,960 --> 01:10:21,880
challenging.
Here's an opportunity to get it

1258
01:10:21,880 --> 01:10:26,560
across the line and get it
moving fast and you'll be able

1259
01:10:26,560 --> 01:10:28,600
to have all the flow on benefits
that it has.

1260
01:10:29,000 --> 01:10:34,560
And Dorado is your 1 discovery
in an entire basin that has had

1261
01:10:34,560 --> 01:10:37,560
virtually no exploration in it
historically.

1262
01:10:37,840 --> 01:10:41,160
So it's, it's just north of what
we refer to as the historic

1263
01:10:41,160 --> 01:10:43,320
Northwest Shelf.
So you've got the Caernarvon

1264
01:10:43,320 --> 01:10:50,480
Basin, then goes into the Badoo
Basin, you know, Canarvan Energy

1265
01:10:50,480 --> 01:10:53,640
and it's partners wedding and
and found the Dorado field,

1266
01:10:54,000 --> 01:10:58,600
found the Paavo field.
They found Phoenix S discovery.

1267
01:10:58,840 --> 01:11:00,720
So a whole series of
discoveries, but they have an

1268
01:11:00,720 --> 01:11:05,760
entire basin ready to be
explored and it's the scale of

1269
01:11:05,760 --> 01:11:08,160
the entire northwest shelf.
Again, it just hasn't had the

1270
01:11:08,320 --> 01:11:11,280
the work done on it.
So we need to get after it.

1271
01:11:12,360 --> 01:11:15,240
You know the.
Impediment here is a willingness

1272
01:11:15,240 --> 01:11:16,880
of of Santos's controlling
joint.

1273
01:11:17,120 --> 01:11:20,200
I mean you could have the
perfect political settings and

1274
01:11:20,200 --> 01:11:23,560
if you're controlling joint
venture like you know interest

1275
01:11:23,560 --> 01:11:25,960
partner does not have an
appetite to deploy capital then

1276
01:11:25,960 --> 01:11:27,440
you can't do anything.
It's yeah, it's.

1277
01:11:27,800 --> 01:11:30,560
That is very true.
It is a kind of a, it's an

1278
01:11:30,720 --> 01:11:32,680
interesting function though,
like how it works.

1279
01:11:32,680 --> 01:11:37,200
So because the government hasn't
gotten behind these projects,

1280
01:11:37,200 --> 01:11:39,640
hasn't backed up and said,
here's a regulatory clarity,

1281
01:11:39,640 --> 01:11:42,920
right?
Because of that, the offshore

1282
01:11:42,920 --> 01:11:46,360
investors have all pulled back.
Because the offshore investors

1283
01:11:46,360 --> 01:11:49,000
have all pulled back.
The pool of eyes is therefore

1284
01:11:49,000 --> 01:11:51,560
small.
So the act, so when Santos goes

1285
01:11:51,560 --> 01:11:54,360
to try and sell it down, they
can't get the price they want.

1286
01:11:54,760 --> 01:11:57,760
And so they sit on it, right?
And that's a shit outcome for

1287
01:11:57,760 --> 01:12:02,880
everybody, especially for CVN,
which I live in pre and, and,

1288
01:12:02,960 --> 01:12:06,280
and for the nation, right?
And and you know, you can, I

1289
01:12:06,280 --> 01:12:09,240
think you can very rightly sort
of throw rocks at Santos on it

1290
01:12:09,400 --> 01:12:12,880
like they should get on with it.
But at the same time, you know,

1291
01:12:12,880 --> 01:12:15,200
they lived and breathed the
Barossa thing that was

1292
01:12:15,200 --> 01:12:18,960
incredibly painful.
And and it has had direct impact

1293
01:12:18,960 --> 01:12:21,520
on them being able to sell down
at a fair price, which they

1294
01:12:21,520 --> 01:12:23,400
should get, they've invested in
it.

1295
01:12:23,800 --> 01:12:26,000
They they deserve to get a fair
price for their asset.

1296
01:12:26,000 --> 01:12:29,240
It's a world class asset.
And to Will's point, the base in

1297
01:12:29,240 --> 01:12:32,720
itself, it, there will be 20
years of exploration to be done

1298
01:12:32,720 --> 01:12:35,600
out there.
Like geologically this thing,

1299
01:12:35,600 --> 01:12:37,800
it's criminal.
There hasn't been more wells put

1300
01:12:37,800 --> 01:12:39,640
into it.
But I, you know, I'm very

1301
01:12:39,640 --> 01:12:43,520
frustrated, as you know, as a CV
investor and a director.

1302
01:12:43,520 --> 01:12:47,080
And at the same time, I'm also
sympathetic to Santos.

1303
01:12:47,440 --> 01:12:51,400
So the government could, and I
think Kevin came out recently

1304
01:12:51,400 --> 01:12:55,040
and sort of requested this, the
government could come in, say

1305
01:12:55,080 --> 01:12:57,880
we're going to clarify the
regulatory environment here.

1306
01:12:58,400 --> 01:13:00,560
We're going to make sure that
absolutely under no

1307
01:13:00,560 --> 01:13:04,240
circumstances can a rig turn up
to develop this asset and then

1308
01:13:04,240 --> 01:13:08,240
be law fed and parked and
costing $1,000,000 a day while

1309
01:13:08,240 --> 01:13:09,920
everyone waits and, and all the
rest of it.

1310
01:13:09,920 --> 01:13:14,320
So if the government got behind
that and did that, I think we

1311
01:13:14,320 --> 01:13:16,000
would then see a bigger pool of
ours.

1312
01:13:16,120 --> 01:13:18,800
Santos would get on with it.
And, and not only that, the

1313
01:13:18,800 --> 01:13:21,160
government could, you know, like
I said, be innovative with, with

1314
01:13:21,160 --> 01:13:23,920
swap arrangements and say, you
know, and in return, we want to

1315
01:13:23,920 --> 01:13:26,920
make sure that wherever these
molecules go, they can come back

1316
01:13:26,920 --> 01:13:28,280
to us, you know, and refine
products.

1317
01:13:28,760 --> 01:13:31,640
Actually, I understand a whole
lot better why why they've been

1318
01:13:31,640 --> 01:13:33,920
so slow and why they've dragged
their feet after this, this

1319
01:13:33,920 --> 01:13:38,240
conversation, like the position
from the whole structure in

1320
01:13:38,240 --> 01:13:41,320
which they're operating.
But the whole time you guys were

1321
01:13:41,320 --> 01:13:42,880
just sort of riffing on the
ideas there.

1322
01:13:42,960 --> 01:13:47,080
You just the opportunity that
Australia has is fantastic.

1323
01:13:47,240 --> 01:13:49,560
It is like I wouldn't swap what
we've got.

1324
01:13:50,040 --> 01:13:52,320
You know, I'd swa the the
settings, but I wouldn't swap

1325
01:13:52,320 --> 01:13:55,400
the opportunity we've got for
many other hands out there.

1326
01:13:55,480 --> 01:13:58,000
No, I mean, obviously saying
that the, the late was it the

1327
01:13:58,000 --> 01:14:00,360
Late Show that that segment that
they, it was probably before

1328
01:14:00,360 --> 01:14:01,960
your time.
They've got 2 blokes smoking

1329
01:14:01,960 --> 01:14:04,280
dairies at the back of a car and
they're like this country's

1330
01:14:04,320 --> 01:14:07,280
stuffed, This country's stuffed
and at the end they're the best

1331
01:14:07,280 --> 01:14:09,880
country in the world.
Wouldn't go anywhere else.

1332
01:14:09,880 --> 01:14:13,960
So good.
But the to your point around

1333
01:14:14,160 --> 01:14:19,320
the, the capital availability to
actually drive these projects,

1334
01:14:19,600 --> 01:14:22,080
it is there and it's building
right now.

1335
01:14:22,360 --> 01:14:25,360
So we've seen a lot of new
entrants trying to get access

1336
01:14:25,360 --> 01:14:28,280
into this market.
So for instance, you had the

1337
01:14:28,280 --> 01:14:33,000
takeover bids on on Santos, so
you had Abu Dhabi National Oil

1338
01:14:33,000 --> 01:14:36,720
Company, you had Carlyle, so
massive private equity fund

1339
01:14:37,080 --> 01:14:40,320
trying to buy in because they
see the opportunity.

1340
01:14:40,600 --> 01:14:43,080
So you've got capital
constrained companies like a

1341
01:14:43,120 --> 01:14:47,520
like a Santos who have a
portfolio of assets that need

1342
01:14:47,520 --> 01:14:51,440
that capital to drive them.
So Carlyle's trying to get into

1343
01:14:51,440 --> 01:14:54,400
the country and has been for,
you know, four or five years

1344
01:14:54,400 --> 01:14:57,360
now.
There's been asset sales like

1345
01:14:57,360 --> 01:15:02,200
the, the Macedon domestic gas
facility that Woodside put on

1346
01:15:02,200 --> 01:15:05,280
the market when they inherited
it from BHP.

1347
01:15:05,560 --> 01:15:08,160
But they then pulled the the
sale because they were under

1348
01:15:08,160 --> 01:15:12,200
political pressure around the
domestic gas production that

1349
01:15:12,200 --> 01:15:14,040
they have put in from from
Pluto.

1350
01:15:14,520 --> 01:15:16,640
So there's been a couple of
entry points that they've

1351
01:15:16,640 --> 01:15:20,520
tripped up on, but there is a
lot of groups actively trying to

1352
01:15:20,520 --> 01:15:23,120
get into the market.
Your Japanese customers, your

1353
01:15:23,120 --> 01:15:27,120
Mitsui's gone on that growth
with building now local

1354
01:15:27,120 --> 01:15:31,880
operating capability in WA to
develop gas projects.

1355
01:15:31,880 --> 01:15:36,080
That's really encouraging to see
Japanese willing to take that

1356
01:15:36,080 --> 01:15:38,160
risk to build the operating
capability.

1357
01:15:38,760 --> 01:15:42,200
And then there's all the new
capital, infrastructure capital

1358
01:15:42,320 --> 01:15:46,240
and it's great to see how this
is coming together to fund new

1359
01:15:46,240 --> 01:15:49,000
projects and it what it's what
we need to be encouraging.

1360
01:15:49,800 --> 01:15:53,160
Woodside did it really well at
Scarborough.

1361
01:15:53,480 --> 01:15:56,880
So Global Infrastructure
Partners now owned by by

1362
01:15:56,880 --> 01:16:03,520
BlackRock, they put up 3.6
billion to buy 4.949% of Pluto

1363
01:16:03,520 --> 01:16:07,280
train too.
So they provided the capital

1364
01:16:07,280 --> 01:16:11,200
that funded the majority of the
the costs for the LNG facility

1365
01:16:11,600 --> 01:16:15,880
and Woodside pay a toll on it.
Woodside then brought in JIRA

1366
01:16:16,480 --> 01:16:22,120
for 15%, so Japanese largest LNG
buyer and LNG Japan for another

1367
01:16:22,120 --> 01:16:24,920
10%.
They paid a couple of couple of

1368
01:16:24,920 --> 01:16:28,480
billion dollars for their 25%
interest upstream.

1369
01:16:29,000 --> 01:16:31,120
So it is bringing these new
funding models.

1370
01:16:31,120 --> 01:16:35,200
Then you're not going to
commbank anymore or ANZ for for

1371
01:16:35,200 --> 01:16:37,560
oil and gas financing.
You're bringing in

1372
01:16:37,560 --> 01:16:41,160
infrastructure funds, private
equity players, customer

1373
01:16:41,160 --> 01:16:44,720
partners to create the
consortium you need to get these

1374
01:16:44,720 --> 01:16:47,960
projects across the line.
So I'm hopeful that we can get

1375
01:16:47,960 --> 01:16:49,880
new money into the sector.
I think we was, we was an

1376
01:16:49,880 --> 01:16:52,800
eternal optimist and, and, and,
and rightly so, right.

1377
01:16:52,800 --> 01:16:55,280
You've got to be I, I think, I
think, I think that that's all

1378
01:16:55,280 --> 01:16:58,320
good and fair as well.
But but yeah, the reality is in

1379
01:16:58,320 --> 01:17:02,440
general, you know, the size of
the undeveloped, the size of

1380
01:17:02,440 --> 01:17:05,520
the, the things that we could be
doing versus the, the small

1381
01:17:05,520 --> 01:17:08,080
number of things that we've
actually been doing, you know,

1382
01:17:08,200 --> 01:17:11,080
it's dramatic.
So, you know, there's a huge

1383
01:17:11,080 --> 01:17:14,080
amount of untapped potential.
Not only is it potential, it's

1384
01:17:14,080 --> 01:17:17,160
needed like as, as, as you went
through with that, the whole

1385
01:17:17,160 --> 01:17:23,320
forecast of, of domestic demand.
So there are models, there are

1386
01:17:23,320 --> 01:17:25,440
there.
There was already a sort of

1387
01:17:25,440 --> 01:17:31,200
queue of guys in and around the
footy maybe not executing.

1388
01:17:31,200 --> 01:17:33,560
You know, Santos fell over right
for a reason.

1389
01:17:35,000 --> 01:17:37,080
I wonder why.
Once I looked under the hood,

1390
01:17:37,080 --> 01:17:40,520
once I saw all the, the
regulatory stuff, the clean up

1391
01:17:40,520 --> 01:17:43,920
all, all all of the, the, you
know, the hooks in coming to

1392
01:17:43,920 --> 01:17:45,880
Australia.
I think, you know, they, they

1393
01:17:45,880 --> 01:17:48,400
pulled the pin.
So, so let's be real about it.

1394
01:17:48,480 --> 01:17:51,240
It's, it isn't a good investment
climate at the moment.

1395
01:17:51,240 --> 01:17:54,760
It needs to get much better.
There are, as Will said, groups

1396
01:17:54,760 --> 01:17:59,440
there wanting to do it.
They already were there before

1397
01:18:00,120 --> 01:18:03,520
the moose.
That queue of groups is only

1398
01:18:03,520 --> 01:18:06,040
going to get, you know, our view
is dramatically longer.

1399
01:18:06,040 --> 01:18:08,280
Like like as we went through
those stats at the start, right?

1400
01:18:08,280 --> 01:18:14,480
Korea, Japan, China, even India,
Taiwan, you you name it.

1401
01:18:14,480 --> 01:18:18,520
That entire region is so
dependent upon which they are

1402
01:18:18,520 --> 01:18:21,840
all going to be here.
Let's make sure we welcome them

1403
01:18:22,120 --> 01:18:25,560
and let's foster that capital
because it's still, you know,

1404
01:18:25,560 --> 01:18:27,880
it's, it's, it's, it's
roadblocked, you know, and

1405
01:18:27,880 --> 01:18:30,040
Barossa is still front and
centre.

1406
01:18:30,040 --> 01:18:33,080
Everybody offshore knows that.
Everybody, every, you go to a

1407
01:18:33,080 --> 01:18:37,600
conference, you know, oil and
gas related offshore, everybody

1408
01:18:37,600 --> 01:18:40,400
knows it.
It is, you know, our and the

1409
01:18:40,400 --> 01:18:44,800
Japanese ambassador, I think
made comments only six or nine

1410
01:18:44,800 --> 01:18:48,320
months ago around Australia as
an investment destiny.

1411
01:18:48,320 --> 01:18:50,240
He's so rare.
You know, the Japanese, you

1412
01:18:50,240 --> 01:18:52,400
know, the culturally they're so
very rarely come out and say

1413
01:18:52,400 --> 01:18:55,480
these things.
He was so blunt and so direct

1414
01:18:55,800 --> 01:18:59,320
about just how badly our
direction of travel is and how

1415
01:18:59,320 --> 01:19:02,400
much of A concern that was to to
Japan and the Japanese people.

1416
01:19:02,400 --> 01:19:08,360
You know, we are, we are
absolutely fundamental to some

1417
01:19:08,360 --> 01:19:11,320
enormous number of people, some
millions of people just in Tokyo

1418
01:19:11,760 --> 01:19:15,320
being able to move around all
day, get to work all day.

1419
01:19:15,640 --> 01:19:17,480
Like we should be fucking
celebrating that.

1420
01:19:17,640 --> 01:19:21,160
We should be pumped about all
the stuff we do that helps

1421
01:19:21,160 --> 01:19:25,240
millions and millions, hundreds
of millions of people, all our

1422
01:19:25,240 --> 01:19:28,680
brothers and sisters up through
Asia every single fucking day.

1423
01:19:28,840 --> 01:19:31,840
And you know.
Yeah, whether that's iron or

1424
01:19:32,200 --> 01:19:35,360
gas, Yeah, we're providing those
raw materials.

1425
01:19:35,520 --> 01:19:38,480
Let's make the most of it.
Yeah, Coal, Coal.

1426
01:19:39,160 --> 01:19:40,480
Some on the shaft behind you go
coal.

1427
01:19:41,440 --> 01:19:44,840
Yeah, really nice.
So you know, and, and, and, and

1428
01:19:45,360 --> 01:19:48,840
I guess to like, you know what
people probably mostly sort of

1429
01:19:48,840 --> 01:19:51,840
come to to to the party to check
out is, is where are the

1430
01:19:51,840 --> 01:19:56,240
investment opportunities.
There are so many unloved

1431
01:19:56,560 --> 01:19:59,920
juniors, though you shouldn't
say so many.

1432
01:19:59,920 --> 01:20:01,280
It's this, it's not.
It's not as big a pool.

1433
01:20:01,280 --> 01:20:03,640
As it should be, but.
They're they're not for good

1434
01:20:03,680 --> 01:20:06,400
reason because they've yeah, the
the challenges we've talked.

1435
01:20:06,400 --> 01:20:08,520
About yeah, they've been hard,
hard yards.

1436
01:20:08,520 --> 01:20:11,120
And you know, Full disclosure,
we own a bunch of them.

1437
01:20:12,360 --> 01:20:13,760
The ties turn pretty quickly
sometimes.

1438
01:20:14,080 --> 01:20:17,760
Yeah, I mean, I mean like, you
know, let's rather than covering

1439
01:20:17,760 --> 01:20:21,400
a whole bunch of it, maybe just
again to Dorado and CVN, you can

1440
01:20:21,400 --> 01:20:26,120
go buy CVN today in the market
effectively like cash and liquid

1441
01:20:26,120 --> 01:20:29,200
assets backed, you know, the 20%
stake in strike, which you know,

1442
01:20:29,520 --> 01:20:34,280
obviously we view as strategic
and the cash you get Dorado for

1443
01:20:34,280 --> 01:20:37,640
free.
Like I I couldn't even broke it

1444
01:20:37,640 --> 01:20:40,560
to a single guy like reverse
broke it at the conference.

1445
01:20:41,000 --> 01:20:42,840
Like you have the fucking asset
for free, mate.

1446
01:20:43,120 --> 01:20:45,520
Why would you not buy that?
It's like, oh, what's your tone

1447
01:20:45,520 --> 01:20:46,480
rise?
When's it getting developed?

1448
01:20:46,480 --> 01:20:47,400
So I.
Can't tell you.

1449
01:20:47,400 --> 01:20:48,760
Do you want a free option or do
you want a?

1450
01:20:48,880 --> 01:20:50,880
Free option, you know, just sit
on it.

1451
01:20:52,480 --> 01:20:53,840
But yeah.
It's an in the money Opie that's

1452
01:20:53,840 --> 01:20:57,200
just awaiting an an event with
an unknown horizon, but it's in

1453
01:20:57,200 --> 01:20:58,240
the money.
You don't have to wait for a

1454
01:20:58,240 --> 01:21:00,280
different economic situation.
You have to just wait for it.

1455
01:21:00,640 --> 01:21:02,640
Yeah, Yeah.
I don't know what, I don't know

1456
01:21:02,640 --> 01:21:05,160
what you, what type of that is
that some European opie?

1457
01:21:05,200 --> 01:21:08,560
Yeah, it's a polymarket.
Bet that's polymarket.

1458
01:21:09,360 --> 01:21:15,520
A butterfly spread yeah, yeah.
So look at, you know, CBN, the

1459
01:21:15,520 --> 01:21:17,800
great case study in, in like,
you know, where, where you can

1460
01:21:17,800 --> 01:21:22,000
find value as, as an investor
in, in these sort of junior

1461
01:21:22,000 --> 01:21:23,640
players.
And, and it's been really, I

1462
01:21:23,640 --> 01:21:27,200
would say, like really
encouraging the last month or

1463
01:21:27,200 --> 01:21:31,400
two in the Taroom to see, you
know, the government over there,

1464
01:21:31,520 --> 01:21:35,240
you know, the premier there with
the hard hat on and really

1465
01:21:35,240 --> 01:21:37,200
banging the table on table.
We are getting right behind

1466
01:21:37,200 --> 01:21:38,080
this.
You know, I'd love to say the

1467
01:21:38,080 --> 01:21:40,680
same, see the same thing from
our, our state government.

1468
01:21:40,680 --> 01:21:43,400
Even in the offshore waters, I
think, you know, the state still

1469
01:21:43,400 --> 01:21:47,880
has a role to play.
So, you know, state generally

1470
01:21:47,880 --> 01:21:50,880
has done a pretty good job
supporting the sector hasn't.

1471
01:21:51,000 --> 01:21:54,520
But federally, you know, we're
seeing unions back in the sector

1472
01:21:54,520 --> 01:21:56,960
again, again to direction of
travel.

1473
01:21:57,560 --> 01:21:59,440
You know, Prime Minister was
here I think yesterday was it

1474
01:21:59,720 --> 01:22:03,000
talking at the, the energy
conference in the morning ruled

1475
01:22:03,000 --> 01:22:06,560
out additional taxes.
So that's like, that's a, that's

1476
01:22:06,560 --> 01:22:09,800
a good step, not in the wrong
direction.

1477
01:22:10,080 --> 01:22:15,320
Like it's, it's a good, not
worse position, but it needs to

1478
01:22:15,320 --> 01:22:19,280
be a lot fucking better.
Like, you know, and, and so I,

1479
01:22:19,440 --> 01:22:22,200
I, yeah, I really hope that they
all do get, get behind it.

1480
01:22:22,200 --> 01:22:25,320
And then the Taroom is a great
example of what happens when

1481
01:22:25,320 --> 01:22:27,680
you, when you come out
politically show that sort of

1482
01:22:27,680 --> 01:22:29,440
support.
You know, look at the, the

1483
01:22:29,440 --> 01:22:32,720
market capitalisation of those,
those companies that are, that

1484
01:22:32,720 --> 01:22:35,080
have, you know, interests in the
Taroom.

1485
01:22:35,400 --> 01:22:37,440
They've all, they've all ripped.
There's any amount of capital

1486
01:22:37,440 --> 01:22:39,160
for them now.
And if they wanted to go raise

1487
01:22:39,160 --> 01:22:41,880
money, they could go tap.
You know, I think a few of them

1488
01:22:42,200 --> 01:22:43,040
actually have.
They can go tap.

1489
01:22:43,040 --> 01:22:44,480
Yeah.
Yeah, exactly.

1490
01:22:44,480 --> 01:22:46,560
They can go tap that capital.
Now the capital market will

1491
01:22:46,560 --> 01:22:48,840
respond as as you said at the
start, you know it'll go where

1492
01:22:48,840 --> 01:22:51,560
it's where there's some love.
Yeah, that, that's interesting

1493
01:22:51,560 --> 01:22:54,600
because there there yet to be,
you know, commercially proven

1494
01:22:54,600 --> 01:22:57,480
assets, but you had the
government, you know, Queensland

1495
01:22:57,480 --> 01:23:01,720
government jumping behind them
and promoting them like hell.

1496
01:23:01,720 --> 01:23:05,720
So it's great to see we've got
proven assets in ground here in

1497
01:23:05,720 --> 01:23:09,200
WA and I guess we'd I'd love to
see the same out of the yeah,

1498
01:23:09,200 --> 01:23:12,720
out of Roger Cook out there with
get him get like add a little

1499
01:23:12,720 --> 01:23:15,600
vial of condensator oil up to
your shelf here.

1500
01:23:17,080 --> 01:23:19,520
Yeah, I mean, it'd be great to
see, you know, in a perfect

1501
01:23:19,520 --> 01:23:22,120
world, you would love to see
both the Prime Minister and the

1502
01:23:22,120 --> 01:23:27,480
premier together here in WA
getting right behind Dorado.

1503
01:23:27,560 --> 01:23:30,400
You know, even with Kevin
Santos, the, you know, all of

1504
01:23:30,400 --> 01:23:33,680
that dynamic and, and just
saying, hey, we want to see this

1505
01:23:33,680 --> 01:23:36,000
developed.
This is a world class asset.

1506
01:23:36,200 --> 01:23:40,800
We are fundamentally like unable
to sustain ourselves if we don't

1507
01:23:40,800 --> 01:23:44,240
produce enough oil, particularly
for our for our own needs.

1508
01:23:45,080 --> 01:23:47,120
And, you know, get right behind
it.

1509
01:23:47,200 --> 01:23:50,200
Be innovative, maybe with swaps
or, or whatever, or even, you

1510
01:23:50,200 --> 01:23:52,840
know, our own domestic
processing capacity.

1511
01:23:54,560 --> 01:23:59,240
But now, like not later, like
now, now, you know, don't, don't

1512
01:23:59,640 --> 01:24:04,080
waste this moment because, you
know, if it all resolves in

1513
01:24:04,080 --> 01:24:09,720
Hormuz, and I desperately hope
it does, and I would hate to see

1514
01:24:09,720 --> 01:24:12,800
us all just drop back to
complacency, you know, this time

1515
01:24:12,800 --> 01:24:15,640
next year, you know, that could
be such an easy thing to do

1516
01:24:15,640 --> 01:24:18,040
politically.
People's memories are really

1517
01:24:18,040 --> 01:24:20,800
short.
So don't waste this moment.

1518
01:24:20,920 --> 01:24:25,360
Get behind it, the resources
there, let's get it out of the

1519
01:24:25,360 --> 01:24:28,320
ground.
Guys, this has been awesome.

1520
01:24:28,320 --> 01:24:30,280
I've learnt A tremendous amount.
Any other thoughts you want to

1521
01:24:30,440 --> 01:24:32,520
leave people with or do you
think we've we've covered it

1522
01:24:32,520 --> 01:24:34,840
all?
We covered the whole globe, so

1523
01:24:34,840 --> 01:24:37,360
I'm pretty happy with that.
I really appreciate the time

1524
01:24:37,360 --> 01:24:38,080
guys.
Yeah.

1525
01:24:38,080 --> 01:24:40,320
I really appreciate you guys
giving us the opportunity to

1526
01:24:40,320 --> 01:24:42,480
talk about the sector.
It's it's, yeah.

1527
01:24:42,640 --> 01:24:45,640
It's not often that anybody
wants to hear about it, so

1528
01:24:45,640 --> 01:24:48,000
we'll.
We'll send it to punter politics

1529
01:24:48,000 --> 01:24:50,160
directly and just.
Say yeah, yeah, tag him, tag him

1530
01:24:50,160 --> 01:24:52,520
and and hopefully we can have a
good chat.

1531
01:24:52,880 --> 01:24:54,680
Love that conversation going.
Fucking love that.

1532
01:24:55,240 --> 01:24:57,520
Rusty will absolutely pleasure
to have you guys join us and

1533
01:24:57,680 --> 01:24:59,680
thank you so much.
Thank you to Sandvik Ground

1534
01:24:59,680 --> 01:25:03,120
support, focus, the platform by
market tech interlinks, Exceed

1535
01:25:03,120 --> 01:25:05,840
capital and last but not least
Metals Hub for making it all

1536
01:25:05,840 --> 01:25:07,560
possible.
Buddaru money minus.

1537
01:25:07,640 --> 01:25:11,200
Buddaru.
Now remember, I'm an idiot.

1538
01:25:11,440 --> 01:25:13,880
JD is an idiot.
If you thought any of this was

1539
01:25:13,880 --> 01:25:16,440
anything other than
entertainment, you're an idiot

1540
01:25:16,800 --> 01:25:17,920
and you need to read our
disclaimer.