Letter Published in Financial Review Monday 24 August

By: AUSBUY

It is great news for Australia that Gorgon has been given the green light (presuming Minister Garrett gives his blessing), however I find it irksome to say the least to see an agitated Wilson Tuckey lead his entourage out of the house in protest against Rudd's beaming announcements on Gorgon and the Labor role in the project development.

Our company has tracked Gorgon for over two decades, and tendered for over 100 million dollars of equipment. Our credentials as the only major Australian owned company in our particular field of expertise ensured that we were given the privilege 12 months ago to tender the project.  It is an open secret that most of equipment and modules will be supplied in packages of up to 7000 tonnes and will be purchased from and manufactured by Korean companies.

The GFC has ensured that Korean Won has depreciated considerably,  and that workshops  (as is the case here in Australia) are screaming for work.   Gorgon's project price at a guesstimate is 20 to 30% lower than the same period last year when the commodities were at an all time high. Chevron, Shell and Exxon with ready cash reserves and Australia have had an lucky break.  Currencies are low and suppliers are very hungry.

So what irks me?
It is certainly not that our company will not be awarded the $100 million tender. Today, we live in a world of competitive tendering, and know and understand the rules. I am irked that the Government funded "Industry Capability Network" together with Chevron and partners with road shows in most major Australian cities presented the many great opportunities for local Australian industry.

The facts are that the concept of major module manufacture was determined very early in 2008 at or before the road shows ensuring that Australian tenders were in for a joy ride. There is precious little manufacture coming to Australian companies from Gorgon and certainly no recompense for expensive tendering that spanned at least 12 months.

Far more importantly, all of the engineering has been shuffled offshore to London. Woodside LNG trains one to five have all been managed and engineered from Perth, so why not Pluto and Gorgon? The engineering expertise that is so vital to developing the smarts of Australia has gone offshore and getting that expertise back again is difficult.

Rudd with support from Tuckey should ensure that the new LNG plants at gestation such as the next phases of Woodside's Pluto, Chevron's Wheatsone and others are managed and engineered here in Australia.

We work in many major oil and gas locations including the sub-continent, South East and North Asia and the Middle East and I am very sure that Exxon, Chevron and Shell strongly urged to support local engineering and manufacture.

So I ask of Tuckey and Rudd, "what exactly are the Federal and State Governments, past and present laying claim to on Gorgon?"

They can hardly gloat over allowing the big Oil majors to ignore Australian industry and needs.

Tuckey should lay low for it was during the Coalition watch that Chevron and partners were given carte blanche to take Australian's engineering future and metal trades industry offshore.

Where are you Mr Rudd?

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