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23/4/2001...Treasurer Costello formally rejects Shell bid for Woodside "in the national interest"

Monday, April 23, 2001

The Treasurer's press release

Foreign Investment Proposal Shell Australia Investments Limited's (Shell) Acquisition Of Woodside Petroleum Limited (Woodside)

After long and careful deliberations I have today made orders under the Foreign Acquisition & Takeovers Act 1975 ("the Act") prohibiting Shell acquiring a substantial shareholding in Woodside which would result in a change of control of Woodside.

The Government's policy is, and will continue to be, to welcome foreign investment into this country. Australia operates a liberal foreign investment regime. The Act allows a proposal to be prohibited on national interest grounds. This occurs very rarely. On this occasion, however, I have decided that the Shell proposal is contrary to the national interest.

I have taken into account that Woodside is a joint venturer with Shell in the North West Shelf ("NWS") project, Australia's largest developed energy resource. Woodside is the operator of the project and it is in the national interest of Australia that the project be developed to its full capacity and that Australia's export sales from the NWS are maximised.

In assessing the national interest, I have the responsibility to make a decision that must as far as possible withstand circumstances which might change after my decision has been made. Such circumstances can involve changes in the corporate strategies of the parties involved in a decision, new or evolving corporate strategies by other companies with respect to the NWS project and changing world demand and supply conditions.

It is in the national interest for the operator of this project to develop the response to its maximum and for sales from the NWS to be promoted in preference to competing sales from projects in other parts of the world.Whilst there have been positive discussions with Shell on steps to secure the independence of the operator and marketing functions I have not been able to see that enduring conditions which are fully enforceable could be put in place in advance, as such conditions would require action after the approval and require the consent of joint venturers which cannot be guaranteed.

The NWS is a world class gas resource which Australians through Woodside have pioneered and developed with the assistance of overseas capital. Overseas capital will continue to benefit the development of the NWS.
The orders I have made under the Foreign Acquisitions and Takeovers Act 1975 will be published in the Commonwealth Gazette of 27 April 2001.

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Canberra
23 April 2001

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