Article by Perry Williams, courtesy of The Australian
15.08.2025
Global energy giant Chevron has delivered a stinging rebuke directly to Deputy Prime Minister Richard Marles over Australia’s slump as an investment destination under Labor, warning that high costs, onerous taxes and environmental delays meant a historic plan to double its $US80bn ($123bn) Australian LNG business was off the table.
Chevron’s Texas-based chief executive, Mike Wirth, delivered the blunt message to Mr Marles on Friday afternoon in Geelong at a private meeting between the pair, saying he was concerned Australia was now uncompetitive with gas rivals such as the US and Middle East.
“Australia has changed and it has changed pretty significantly over the last few years,” Mr Wirth told The Australian. “Investors need stability, not surprises. Surprises are concerning and the investment environment has become much less attractive than it was previously.”
The Chevron boss blamed Labor’s petroleum resource rent tax reforms, the use of “lawfare” challenges by environmental groups to drag out approval times and “same job, same pay” wage demands that have lifted the company’s costs in Australia.
The edict heaps pressure on the Albanese government ahead of next week’s crunch reform roundtable, where Anthony Albanese and Jim Chalmers will attempt to reverse decades of flatlining productivity and boost the national economy.
Chevron, which operates two of Western Australia’s biggest LNG plants in Gorgon and Wheatstone, said it was important Mr Marles understood his concerns directly.
“I think it’s important that he hears it,” Mr Wirth said. “It doesn’t do us any good to hold these views and not share them with the policy makers that should understand those issues.”
He said he would also caution Labor against the “dangerous” option of creating a retrospective domestic gas-reservation scheme on Australia’s east coast as the Albanese government weighs policy changes to boost supplies and cut costs.
“What I think is dangerous would be any retroactive reservation requirements that would change the basis upon which those projects have been built. I think a go-forward reservation requirement certainly can be evaluated by anybody who’s looking at an investment to be part of that decision-making.”
The Albanese government is considering an east-coast reservation scheme under a sweeping review into the sector’s regulations, with new gas projects to be forced to provide supply to the domestic market.
“We’ve seen time and again around the world that market interventions that cap prices or dictate flows can have unintended consequences,” Mr Wirth said.
“They’re well-intentioned but markets are strong and powerful mechanisms, and so incentives or policies that incentivise more supply are very good.”
Mr Wirth revealed Chevron had at one point considered doubling its LNG footprint in WA to 10 processing trains from the current five units that exported gas from its Gorgon and Wheatstone plants. However, that expansion had now been shelved. “Further expansion investment is off the table,” he said.
“There’s plenty of gas. But the US has become more attractive. The Middle East is more attractive. And Australia, for gas investment, competes with some of those markets.”
Australia’s $100bn LNG industry made it the world’s largest exporter for the past decade, but both the US and Qatar have embarked on massive expansion projects that will relegate the nation to the third-biggest player as its rivals compete to sign up buyers in Asia.
The high cost of labour including a substantial “same job, same pay” claim for a wage hike at its Barrow Island facility in WA had contributed to Chevron’s concerns over future investment in Australia.
“Those are challenges to be overcome,” Mr Wirth said. “And if you were to benchmark those against the Middle East or North America, you see more affordable inputs from a cost standpoint in other parts of the world.”
Labor’s productivity roundtable next week is a timely reality check for the government over how to boost efficiency across Australia, according to the Chevron chief. “I think it’s important that countries assess the conditions that they create for their economy to thrive or to be burdened with in terms of red tape, green tape and higher costs and assess the trade offs. in terms of productivity and competitiveness … things aren’t guaranteed for the future,” Mr Wirth said.
“In strong developed economies, at times, there becomes a belief that we can just add on requirements for businesses to meet and justify them under societal benefits that are presumed to accrue. And at some point, when that becomes so burdensome, what it does is it slows economic growth, it reduces investments and it reduces competitiveness.”
Mr Wirth spent this week touring Chevron’s LNG projects, sitting down with WA Premier Roger Cook and holding a series of meetings with company investors, asset managers and superannuation funds. “I’ve learned more about superannuation funds and how rapidly they’re growing and on a global scale now,” he said. “They’re pretty material in terms of their non-Australian investment appetite.
“The policy environment has continued to evolve and in my briefings with our people, and they’ve been watching this as it’s happened. That has raised some concerns on our part, and I hear it from investors as well.”
Mr With said energy was a topic that “everybody has an opinion” worldwide. “And the changes in the policy environment are probably the thing that’s most noteworthy to me as a company that’s been investing here for 70 years and in large sums over the last couple of decades predicated on the then current policy framework,” he said.
Woodside and Chevron recently agreed to an asset swap as the energy companies move to streamline and simplify ownership of key Australian assets.