Barnett aims for more Australian resource contracts

Western Australian Premier Colin Barnett says the country’s major resource companies are increasing the amount of local work on significant projects.

Oil and gas company, Chevron, has hit back at accusations it has sent three quarters of work on the Gorgon liquefied natural gas (LNG) overseas.

Chevron says the $10 million project will be done by Australian companies, with $9 million contracted out to those in WA.

But according to Unions WA, although Chevron has contracted Australian companies for some manufacturing and fabrication work, companies has contracted out the work to be done overseas.

Simone McGurk, secretary of Unions WA told Western Australian media that the majority of the work contracted out to Australian companies was for earth works, site preparation, catering and waste removal.

Barnett has warned against suggestions all works on the heavy modules for Gorgon could be done in Australia, and has admitted there could be some “leakage” of the work overseas.

But as far as he knows, a significant amount of work will flow into Western Australia’s steel fabrication by the beginning of 2012.

"The industry tells me the steel fabrication work will start to flow more heavily into workshops probably in the next six to nine months," he told Fairfax Radio.

"There will be a lot of it and it will last for many years."

Barnett has reported on an “honest and open discussion” during a visit to a fabrication workshop in Kwinana with Woodside managing director Don Voelte, Rio Tinto CEO iron ore division Sam Walsh, managing director of Chevron Australia Roy Krzwosinski and president of BHP Billiton iron ore division Ian Asby.

He said some of the heads of the Australia’s four major resource companies admitted that some work had ended up offshore, after auditing contracts they had been awarded.

"They have picked up on the fact they have awarded contracts on the understanding that work would be done here only now to find out some of it had actually been sent overseas," Barnett said.

"So there will be some corrective measures taken by the companies and it was very big of them to say we have gone back, we have looked and there is a point to this."

Chevron are required to provide quarterly reports to the WA government on the Australian content of each contracted awarded as part of the Gorgon project.

Barnett said he will provide a report to parliament on the levels of local content at major projects, but the reports from the company will not be released dur to commercial in confidence reasons.

Image: The Australian

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