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The north west shelf natural gas project: An analysis of critical events

Gardner, Scott (1989) The north west shelf natural gas project: An analysis of critical events. PhD thesis, Murdoch University.

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The thesis which follows is an attempt to examine a complex organisational phenomenon corporate policy within a multinational resource based joint venture. It employs a multidisciplinary conceptual framework which draws on a range of disciplines including Business Policy/Strategy, Organisation Theory and Macroeconomics (see 1.1).

The central concern of the thesis is to "Explain how prevailing political and economic factors have influenced the policy decisions undertaken by the North West Shelf (NWS) joint venturers throughout critical periods or 'events' in the history of Australia's largest capital project." This objective is accommodated within the main body of the thesis along with two other interrelated goals "Production of an original and comprehensive commentary on the history of the North West Shelf project from 1973 to 1986 and the design of a broad conceptual schema to describe the decision making environment of the NWS joint venturers." (see Figure 3). This schema is ultimately developed into a model with general applications for the study of corporate policy and strategy within multinational resource based joint venture projects (see 8.3). Policy, Strategy and Environment are the three keynote terms employed in the theoretical base of the study which attempts to highlight the essential connection between them (see 1.1.3).

The topic of corporate policy and strategy relating to the North. West Shelf joint venture was chosen for a number of reasons, not least the sheer scale and significance of the project for the Australian and Western Australian economies. The NWS project has been given a high media profile since the Woodside joint venture participants (JVP) made their first commercial gas finds off North Western Australia in 1972 (see Introduction)

It has also been the subject of extensive parliamentary debate at Federal and State level, with continuing political controversies over government control and high levels of foreign interest in Australia's premium natural gas fields. Federal and West Australian legislative frameworks and policy instruments relating to large scale petroleum and mineral developments are examined in some detail in the thesis (see Chapter 4). The essential interaction between corporate and public policies (host governments and multinational joint venturers), is also an important focal point of the study.

To date no comprehensive historical commentary has been produced to describe the planning and development of Western Australia's largest resource project: in terms of capital invested ($A12 billion by 1995) (1987 dollars) and revenue from sales of hydrocarbons, piped natural gas and 1iquified natural gas (LNG) to domestic and export markets. The thesis accommodates this goal through the use of published sources and interview material (see 1.1 and 1.2) within a unique theoretical framework.

Interview respondents provided both general background on the NWS venture and a variety of perspectives on a series of 'critical events' in the history of the project. Analysis of these 'events', through comparison of interview responses and information from a range of published sources, provides an essential insight into the policy decisions taken by the NWS joint venturers during critical periods in planning and development of the project.

The central reference point in the thesis is the 'Conceptual Map' which is comprised of a series of schematic diagrams outlining various sectors of the North West Shelf project organisation's internal and external environment. The map and relevant concepts are used to demonstrate how policy outputs from the NWS joint venture influence and are influenced by other organisations or interest groups within the project organisation's internal and external environment.

The NWS project organisation is seen to be linked to a series of other influential organisations and government bodies through an interorganisational network. This follows Odell (1983) who developed the concept of an international petroleum network to highlight essential connections between corporate and governmental bodies operating at each level within the vertically integrated international petroleum industry (see 3.1).

The network concept is usefully employed in the thesis to illustrate the influence which World level (multinational), National and State level interests can hold in relation to corporate policy and strategy within a multinational joint venture project.

The thesis is structured in a form which allows Chapters 3 to 8 to pursue and develop a series of discrete themes relating to the NWS project. These are bound together by the theoretical framework and conceptual schema set out in Chapters 1 and 2. In broad terms the content of the study breaks down as follows: Introduction - (i) Historical background to the NWS project; (ii) the structure of the NWS joint venture, (iii) chronology and overview of key events influencing the planning of the project. Chapters 1 and 2 cover the theoretical structure and methodological basis of the study. The contribution of various writers to the multidisciplinary conceptual framework of the thesis is discussed in detail. Chapter 3 covers the worldwide petroleum network, the structure of the Australian oil and gas industry, the position of the NWS project as an exporter of liquified natural gas (LNG) and the growing international trade in this product. Chapter 4 is primarily concerned with the legislative and public policy framework, which has been developed at Federal and State level to govern the development of large scale petroleum and minerals projects in Australia. Provisions with particular relevance to the NWS project are considered at length. Chapter 5 is a simple but detailed description of the Conceptual Map, highlighting the influence of a series of key external bodies on the corporate policies of the NWS joint venturers over specified periods of time. Chapters 6 and 7 provide a detailed analysis of three 'critical events' identified by interview respondents as having an important impact on the future development of the NWS project.

Each event is set within a wider context of political and economic change within Western Australia and Australia. Major macroeconomic shifts in relevant international markets are also considered.

In the final chapter information presented in Chapters 3, 6 and 7 is updated bringing important themes pursued in these sections through to the end of 1988. A simple model of 'Policy Making Environment' for multinational resource based joint ventures is presented incorporating major features drawn from the conceptual map employed throughout the thesis. Final conclusions are presented in order to draw together both the theoretical and thematic content of the work and identify key areas for future research.

Publication Type: Thesis (PhD)
Supervisor: Davis, Bruce, Harman, Frank and Jadlowkier, Meg
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