- 27May
Red tape limits oil and gas industry productivity
A report released today reveals productivity in Australia's oil and gas industry is being limited by red tape, lengthy approvals processes and the high Australian dollar.A report released today reveals productivity in Australia's oil and gas industry is being limited by red tape, lengthy approvals processes and the high Australian dollar.Ernst and Young produced the report with the University of Queensland to identify how productive the industry is and what is holding it back.It found that, if conditions for the industry's climate do not improve, Australian projects will no longer be competitive and money will be invested in other countries.Queensland University Associate Professor, John Steen, suggests more could be done to boost productivity in the sector."Is there a local industry really being developed around this and are Australian businesses really developing a skill base that they can build a new export industry in oil and gas services that will be competitive internationally?" he asked.He says it is a global industry and red tape has stopped projects going ahead."You can see it happening with the decision to defer the Browse project and other projects are being shelved around the country," he said."I think companies that are investing just aren't seeing the returns and it's due to the cost of doing business, due to some of the constraints around regulations."The returns just have to be there otherwise businesses will invest somewhere else in the world."Mr Steen says there are discussions happening about the issue."I think there's dialogue going on now with Governments about trying to improve the investment environment, creating a bit more regulatory certainty," he said."There are some things that are happening which are fortuitous; it looks like the Australian dollar is falling, there seems to be a downward path there and that will improve the economics of a lot of these investments."Productivity isn't everything but it's almost everything."If we don't have a competitive, efficient industry, money goes elsewhere."Ernst and Young's Bradley Farrell says he would like policy makers to consider a number of changes."Reducing the time it takes to achieve approvals on projects, remove excessive, misaligned or duplicated regulations and red tape," he said."And, make sure that there's appropriate certainty around environmental regulations."The report mentions the strongest driver of productivity is innovation and suggests companies need to do more in that area.
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Red tape limits oil and gas industry productivity
