Peter Coleman
Photo by: Bloomberg
PERTH (miningweekly.com) – Oil and gas major Woodside on Friday called on emerging African resource nations to carefully consider implementing any policy changes that could scare away foreign investment.
Speaking at the second day of the East Africa Oil and Gas conference, Woodside CEO Peter Coleman said that there were several global examples of governments changing policy in haste, resulting in resource projects being delayed.
“The first thing we need to do is discover those resources, and my only council for those that are at the pointy end of writing legislation and advising government, is to please not scare us away before we have actually found something.”
Coleman noted that resource investors were often hesitant to invest in nations where solid policies were not abundant, resulting in initial discoveries lying dormant for several years.
“Industry and government will need to work together to make sure that there are stable investment frameworks to enable long-term capital investment. Capital is a coward, and it will go where it is welcome,” he added.
Coleman also urged African leaders to reward companies which committed to expenditure in the country.
“If those discoveries prove profitable, reward those who took the risk and then share in those rewards over time.”
Meanwhile, Coleman also advised the representatives of the African nations attending the conference in Perth, Western Australia, that expectations around resource exploitation should be mitigated.
He noted that bringing a resource deposit to production could take a significant amount of time, pointing to some of Woodside’s own significant discoveries, which had been undeveloped for the past 40 years.
“We know from our own experience that it can be al ong road before oil and gas revenues translate into development production and revenue… So, finding gas does not mean it will get developed.”
Coleman also called on the industry participants moving into Africa to offer transparency to the countries in which they could potentially operate, and not to over promise and under deliver.
“As investors, we have a social contract and responsibility to give what we write down. We need to ensure that standards remain consistent globally,” he added.
Woodside has been moving to increase its international foothold since 2012, with the miner announcing earlier this year the formation of a joint venture with fellow-listed Beach Energy over the Lake Tanganyika project, in western Tanzania.
The oil and gas major had also signed up for farm-in agreements offshore Morocco and in Gabon.