Export Finance and Insurance Corporation may back project, with Woodside hoping to start drilling by mid-2020

This article is more than 1 year old

This article is more than 1 year old

The resources giant Woodside Petroleum has sought Australian taxpayer funds to build an oil and gas field off the coast of Senegal in west Africa.

The Export Finance and Insurance Corporation (Efic) is considering backing the project, with Woodside hoping to start drilling by mid-2020.

Woodside believes it could produce 75,000 to 125,000 barrels of oil a day, and predicts production could last about 20 years.

Woodside paid no corporate income tax in the 2016-17 financial year. Its head company paid no because of franking credits. However, it paid paid $243m in petroleum resource rent tax and $509m in tax for its consolidated companies. Woodside’s net profit at the end of 2018 rose 27.6% to $1.92bn.

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Earlier this month the company successfully lobbied the Western Australian government to dump the state’s environmental protection agency guidelines recommending large new and expanding projects should have to buy carbon credits to offset their emissions. The Labor premier, Mark McGowan, has said he would not endorse the guidelines.

Woodside’s environmental assessment report notes the endangered hawksbill, vulnerable leatherback and vulnerable loggerhead turtles may live in the deep waters of the Senegal development area.

Critically endangered Atlantic humpback dolphins, three species of endangered whale (blue, fin and sei whale) and the vulnerable sperm whale are also found in the Senegalese waters. Short-finned pilot whales and bottlenose and spinner dolphins are found around the proposed site.

The assessment notes concerns that discharges may affect fisheries and the thousands of households in the Senegalese capital, Dakar, that depend on fishing.

The assessment says carbon dioxide emissions from the proposed development for the life of field are estimated to be 8.9m tonnes. Annual emissions would amount to 5% of the total carbon emissions for Senegal in 2014. Woodside insists it will have mitigations and controls in place to reduce emissions.

A bill to expand the powers of Efic is before the Senate and is expected to pass parliament next week. The changes are linked to the Morrison government’s plan to set up a Pacific infrastructure bank.

The progressive thinktank the Australia Institute is concerned the Efic changes will open the door to more fossil fuel investments overseas undermining action on climate change.

“Contrary to such best practice, Efic has repeatedly refused to provide any information about how it considers climate change,” the Australia Institute said. “Indeed, Efic has argued that the Paris agreement does not apply to its lending, because it is not a government.”

A Senate committee held a six-week inquiry into the bill, without conducting a single public hearing.

In its report, released on Tuesday, Liberal senators urged the bill to be passed without amendment, while Labor called for an 18-month review and acknowledged some potential unintended consequences.

“The committee notes that some submissions expressed concern that the focus on Australian benefits may not allow for sufficient consideration of the interests of recipient countries,” the report said.

“The committee was assured by [the Department of Foreign Affairs and Trade] that the interests of recipient countries will be considered, including the appropriateness of the infrastructure, the way it is procured and its impact on the local community.”

Dissenting reports from the Greens and the independent senator Tim Storer also raised concerns about Efic making fossil fuel investments.

“This government has repeatedly shown they will attempt to use every cog in the machinery of government to spend taxpayer money on coal,” the Greens said.

Efic has a chequered history of overseas investments. Its largest-ever loan of $500m to ExxonMobil, OilSearch, Santos and the Papua New Guinea government in 2009 failed to deliver a promised economic boom to the country and has sparked tribal violence.