Current gas prices are shown at a Chevron gas station in Encinitas, California October 10, 2014. Oil prices are hovering just above $90 per barrel, a level last seen in June 2012, putting a strong spotlight on OPEC producing countries. They face calls to
Current gas prices are shown at a Chevron gas station in Encinitas, California October 10, 2014. Reuters/Mike Blake

Australia has been urged to focus on natural gas exports to counter its slumping earnings in iron ore. Chevron warned Australia about the risks of missing out on future investments.

Roy Krzywosinski, the Australian managing director of Chevron, said among the problems were too much regulation and inflexible industrial relations systems, high labour costs and the lack of government policies that encourage investments. He also suggested that Australia’s service companies should lift their game to support oil and gas producers, reports SMH.

Chevron believes there was a potential for the LNG industry worth billion associated with economic benefits if the next wave of investment would go to Australia. However, global competition is rising as U.S. LNG projects emerge due to an abundance of gas.

Krzywosinski noted there was a lack of cooperation on logistics between LNG projects to drive down costs as what has been happening in the North Sea and the Gulf of Mexico. “We need to recognise there has not been a final investment decision on an Australian LNG development since 2012,” said Krzywosinski in a conference of the Australian Petroleum and Exploration Association.

He added that the second wave of LNG investment for Australia may not be happening since the country is failing in terms of international competitiveness. Chevron is involved in building two of seven new LNG plants in the next three years. The company’s Gorgon and Wheatstone is expected to contribute to Australia’s GDP at billion and billion respectively.

According to a new report from Accenture, Australia’s LNG industry could become the biggest and most advanced in the world. It has the potential to contribute more than billion to the country’s GDP in 2020. The new report, “Ready or Not? Creating a world-leading oil and gas industry in Australia,” examined the readiness of the LNG industry to pursue opportunities as it moves from construction into production, reports Market Watch.

Accenture has also found that natural gas production will increase in the next five years by more than 90 percent and the number of wells will rise by 400 percent. Australia’s pipeline infrastructure is expected to increase by 45 percent.

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