Multiple CEOs of major energy and resources companies are veering away from investing capital into Australia as the nation’s poor competitiveness makes it a comparatively less suitable market.
This follows the CEO of Chevron, the world’s third largest energy company, telling Business Weekend he has ruled out any additional investment in Australia as the nation struggles to compete globally.
Woodside’s chief executive Meg O’Neill similarly expressed doubts about Australia’s competitiveness as the energy giant looks overseas for future investments.
“The last US$30b in material investments we’ve made have been elsewhere and it’s a shame it’s really a lost opportunity,” Ms O’Neill told Business Weekend.
Asked whether Woodside could have made these investments in Australia, Ms O’Neill replied: “Absolutely”.
BHP’s CEO Mike Henry also voiced concerns about Australia’s competitiveness as the nation faces economic headwinds.
He said the shift comes from the changing mix of commodities the world will need over the coming 20-30 years.
“That’s going to have an impact on Australian exports and we all need to lean in together to try to stimulate new industries, new investment opportunities and resources but in different commodities,” Mr Henry said on Business Weekend.
“But we have to be able to do so in competition with other countries around the world.”
He stressed there were many countries moving aggressively to foster business development and bring in capital investment, pushing Australia to keep pace.
“In Australia we have to at minimum keep pace with that because if we don’t and we get behind the curve then what we’re going to find is we won’t be able to offset these economic headwinds and every Australian will be poorer for that,” Mr Henry said.
Major Australian manufacturers have faced hurdles in recent times as soaring energy costs have forced some to reach out to various state and federal governments for assistance.
Mr Henry said BHP was looking to expand its copper smelting operations in South Australia but stressed the company was competing against smelters where labour and energy costs were significantly lower.
Alongside this, uncertainty remains about the smelter’s future operations amid ongoing energy woes plaguing Australian manufacturers.
“We’re doing everything we can to make sure that we can refine those plans to make sure that were able to build something as cost-competitively as possible to get it done quickly,” Mr Henry said.
“But we are then reliant upon a forward view as to what’s going to be happening with energy costs.
“Will energy be reliable? Will it be low cost? And of course, the economic settings in Australia are going to have a big bearing on the project.”
While the chief executives of Australian companies have voiced concerns about investing locally, Chevron Energy’s chairman and CEO Mike Wirth said the company would not invest further in Australia outside its current projects.
“We’re not looking at anything on the East Coast,” he said.
“In fact, our plans for the foreseeable future would not include expansion of our facilities in Western Australia either.”