Government's Beetaloo program referred to Auditor-General

THE federal Labor party has referred the Morrison government’s Beetaloo Cooperative Drilling program to the Auditor-General based on the findings of a Greens-led senate inquiry into the awarding of A$21 million in funds to Empire Energy.

Energy minister Angus Taylor on site at Empire Energy's Carpentaria-1 project in the Beetaloo.

Energy minister Angus Taylor on site at Empire Energy's Carpentaria-1 project in the Beetaloo.

The interim report, which was released earlier this week, alleged a conflict of interest, highlighting the connections between Empire's executive team and the Liberal party. 

The A$50 million Beetaloo Cooperative Drilling program, announced as part of the government's gas-led recovery, offers grants to offset up to 25% of drilling costs and associated works to accelerate the development of the Beetaloo basin.

The program was designed on a first-in-first-served basis, according to the report, and noted Empire had two meetings with energy minister Angus Taylor before the scheme was announced. 

Empire subsidiary Imperial Oil and Gas was the first and only recipient of almost half of the allotted funding in the program to support three new exploration wells in its 100%-owned EP187 the Beetaloo Sub-basin.

Taylor visited the drill site of Empiire's Carpentaria-1 exploration well in October as a guest of Empire. 

The inquiry was told that Empire chairman, Paul Espie, has donated A$400,000 to the Liberal Party, and chairs the Liberal-affiliated Menzies Research Centre. The inquiry also noted Empire's largest shareholder, Dale Elphinstone, has "extensive connections into the Liberal party, including but not limited to political donations".

However, the sole and final decision maker behind the Cooperative Drilling Program is Nationals Party member and resources minister Keith Pitt, who flatly rejected that Empire's political connections helped it receive funding. 

"I have no knowledge of what people do and don't donate to political parties," he told the ABC on Thursday.

"We are trying to bring forward what is an incredibly important resource in the Northern Territory that could deliver up to 6000 jobs - that is the purpose of the program." 

Pitt also denied that Taylor had spoken to him regarding Empire Energy, or the Cooperative Drilling Program. 

Empire Energy managing director Alex Underwood, who appeared before the committee last month, stressed that Empire followed the due process when applying for the funding and said the company made no secret of Espie's political affiliations. 

"We've made that clear in our public disclosures," he said. 

However governmental department officials told the inquiry it did not advise Pitt of any conflict of interest concerns, as no grant applicants or advisory committee members declared any actual or perceived conflicts of interest, despite the policy guidelines containing conflict of interest requirements, according to the report.  

Energy News understands Empire did not flag its executive and shareholder's political affiliations as a real or perceived conflict of interest when applying for the funding, because it does not consider it as such.  

Underwood also noted the company has yet to receive the funding as its drilling program is still under assessment by the Northern Territory government and, if unsuccessful in its assessment, the funding would not be awarded. 

An Empire spokesperson referred Energy News to Underwood's statement to the ASX this morning. 

"Empire's evidence to the inquiry made clear that Empire followed due and proper process at all times in relation to its grant applications," Underwood told the market.

A Labor statement released yesterday said there have been multiple occasions when ministers or other witnesses appear to have given misleading information to the Senate or the Senate Inquiry.

"The government still has questions to answer about these grants and the nature of minister Taylor's involvement in them," Labor senator Kristina Keneally said.  

"These are serious questions involving taxpayer's funds that have been unearthed in this inquiry. They deserve to be taken seriously." 

However in the Senate yesterday Labor blocked a motion that would disallow the Beetaloo Cooperative Drilling program from continuing. 

The report recommends that grant funding awarded to companies should be repaid if they lead to the development of commercial levels of gas. 

The Australian Production and Petroleum Exploration Association said the economic benefits of developing the Beetaloo would flow across the Territory by way of royalty payments. 

An APPEA spokesperson told Energy News the organisation would not comment further until the Auditor-General process is completed. 

A growing series of reports, each focused on a key discussion point for the energy sector, brought to you by the Energy News Bulletin Intelligence team.

A growing series of reports, each focused on a key discussion point for the energy sector, brought to you by the Energy News Bulletin Intelligence team.


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