PERTH (miningweekly.com) – Government intervention into the domestic gas sector could have dire consequences, energy producer Senex Energy has warned.
Chairperson Trevor Bourne told shareholders at the company’s annual general meeting on Thursday said that while sensible reforms could improve the efficiency of the gas market and its operation, ‘imprudent interventions’ could have the opposite effect on supply and prices.
“At the end of the day, the entire value chain needs to work together, including producers, infrastructure providers, financiers, customers, governments and local communities.
“All participants in the gas chain would benefit from customers working with upstream producers, infrastructure providers and government and commit to long-term contracts at reasonable prices, to genuinely engage rather than rent seek,” said Bourne.
His comments come as the debate around a federal reservation policy reignited, with the federal government having released a gas reservation issues paper for public consultation.
The paper will explore possible costs and benefits of a gas reservation scheme and strongly encouraged stakeholders to make a submission.
Bourne said on Thursday that the most effective policy response to the concern around domestic supply would be to encourage more gas production in the market.
“Increased supplies rely on a stable regulatory regime and reasonable prices that support capital investment and, indeed, realise an appropriate return on that investment,” he said.
Senex in 2020 increased its production by 73% on the previous financial year, to 2.1-million barrels of oil equivalent, as production from its Roma North project continued to ramp up.
The company is targeting production of 3.6-million to 4.1-million barrels of oil equivalent in 2022.