To journalists the sight of a busy lawyer is always a bad omen, but for oil and gas company executives it can be an indicator of good times ahead.
Geoff Simpson, partner at the Perth office of giant Australian law firm Clayton Utz, recently visited London-based clients that had lately picked up petroleum assets in Australia.
While in town, Simpson told OGJ the company's minerals and resources business had picked up after the recent oil price blight and that signs for the petroleum sector were positive.
"In Australia," said Simpson, "the mergers and acquisitions business has not gone berserk. We are regularly tendering for jobs and visiting data rooms as clients consider projects. While lots of this doesn't translate into activity, I get the impression that it is going to soon."
Simpson said that the current weakness of the Australian dollar against the US dollar makes this a good time to buy Australian assets: "We already have one US client wanting to buy a company with a Perth office."
Perth preferred
A number of petroleum companies and drilling contractors have recently moved their headquarters or regional offices to Perth from Singapore.
Simpson attributes this largely to Perth being a cheaper place to run a business than Singapore and reckons that the recent influx has created enough critical mass to continue the trend.
"Australian legislation generally is in favor of the energy industry," said Simpson, "but there is a strong environmental voice that acts as a counterbalance. Increasingly, the government is interested in renewables." Simpson cites a recent example of the Aussie energy debate, when a storm broke out over a planned power station in the town of Derby on the northern coast of Western Australia.
"The need for a power station was accepted," said Simpson. "A tidal power scheme was one of the proposed options, and the whole town got behind this as the preferred source. However, it looks as though the government has gone for gas-fired rather than tidal, so the people of Derby are kicking up."
Nickel promise
Less controversial is a proposal to deliver gas from the North West Shelf fields to new nickel mines planned in the center of Western Australia.
Simpson said the conventional way to produce nickel is by processing nickel sulfide ore, but a number of the region's mining companies are planning to build an entire regional industry around a new process.
The new technique uses lateritic nickel as the feedstock. There have been six massive laterite finds in Western Australia; if developed, these would be "enough to flood the world nickel market."
Simpson said that the largest and most advanced is Anaconda, which is producing small amounts of nickel now in a bid to prove the new process with a view to full-scale development within 12 months.
"These projects would typically require about $1 billion to develop," said Simpson. "If nickel can be produced economically by this process, the energy required could be generated from gas delivered through an extension of the area's Gold Fields gas pipeline. This would be a boon for the North West Shelf."
