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Wednesday, 5 March 1980
Page: 540


Senator WALSH (WESTERN AUSTRALIA) - My question is directed to the Minister for National Development and Energy. Yesterday, in answer to a question about impending cuts in Bass Strait oil production, he said:

The Age report about a backlog in maintenance due over the next three months is totally erroneous.

He further stated:

Bass Strait output is currently running at near full capacity and is limited only by shipping availability.

Has he seen the further report in today's Age which quotes spokesmen from the Esso, Caltex and Shell companies as saying that production cuts of up to 1 10,000 barrels a day- that is 25 per cent of production- caused mainly by a series of statutory inspections of production equipment, will occur over the next three months? Will the Minister stake his position in the Ministry on the accuracy of his answer yesterday, or does he wish to amend it while he still has time?


Senator CARRICK - My statement yesterday was based on advice given to me, advice checked within the industry. In the light of the Age newspaper headlines of yesterday and the inference of those headlines, I will not vary from what I said. But I will clarify the matter so that we can be absolutely precise. This information once again comes from both departmental and industry sources. I said that the report about a backlog in maintenance in Bass Strait facilities due in the next three months was totally erroneous and that no requests had been made to defer statutory maintenance. That last remark referred, of course, to the coming period of three months. It is true, as the Age article implies, that permission was granted to defer some maintenance due last year. However, that maintenance was deferred to February-March, having been timed to coincide with the scheduled closure of British Petroleum 's Westernport refinery and the drydocking of the coastal vessel Arthur Phillip. I also said that, concurrent with the low level of output from Bass Strait in February, the producers were able to complete routine maintenance scheduled for March. I did not intend to convey that all maintenance scheduled for March had been completed but rather that maintenance work is running ahead of schedule. Esso has advised me that maintenance work scheduled for March is about 33 per cent ahead of schedule.

I also said yesterday that Bass Strait output is currently running at near full capacity and is limited only by shipping availability. The producers estimate that production for the current months will average 348,000 barrels a day. This of course is below the total capacity. It is below that for two reasons: Firstly, refinery demand in March is far below normal because a crude processing unit at Geelong, which was severely damaged by fire in December, is still being repaired, and BP's Westernport refinery requires no transfer of Bass Strait crude until 22 March. Secondly, coastal shipping capacity is inadequate to move to interstate refineries the crude oil that is normally delivered by pipeline. As I said yesterday, output is currently limited by shipping availability and not, as the Age suggested, by a backlog of deferred maintenance. Esso has confirmed to me today that its latest estimate of Bass Strait output for the second quarter of 1980 is 420,000 barrels a day. That is virtually the ceiling output. This improved outlook reflects the reopening of the BP refinery and the arrival in April of a fifth crude oil tanker to work on the Australian coast. At the level estimated, output will exceed the average production rate for the whole of last year, which was 410,000 barrels a day.


Senator WALSH - Mr President,I wish to ask a supplementary question. Now that Senator Carrick has amended the answer he gave yesterday, can he tell the Senate whether the answer he has given today should be accorded the same degree of reliability as his answer yesterday?


Senator CARRICK - I have not amended my answer at all; I have simply added to it on the basis that since yesterday I have been able to check both with my Department and with Esso. Yesterday's information was given to me after being checked with the industry. So the information came from reliable sources in both cases.







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