'Uncertainty' in gas project
Chevron, the operator of the $52 billion Gorgon natural gas venture in Western Australia, says some "uncertainties" remain in the construction of the project after its budget last year jumped 21 per cent.
Some areas of construction "still need to improve" after Gorgon costs surged on gains in the Australian dollar, higher labour expenses and weather delays, Chevron chief financial officer Pat Yarrington said late on Friday.
Labour productivity at Gorgon, located on Barrow Island off north-western Australia, had increased, she said.
Chevron, the second-largest US oil producer by market value, was completing its budget for the year and would inform investors of any potential cost changes, she said.
Royal Dutch Shell and ExxonMobil are partners in Gorgon, which Ms Yarrington said was more than 70 per cent complete.
"Productivity, I would say, is improving on all fronts, but there are still some areas that still need to improve," she said. "We are moving into a critical phase from a schedule standpoint on the project."
Gorgon is one of seven liquefied natural gas projects being built in Australia to meet rising Asian demand for the commodity. Chevron said it would weigh an expansion of Gorgon against competing investment proposals as costs in the country put Australia's competitiveness at risk.
"There are still uncertainties that exist with a project of our size," Ms Yarrington said. "Our challenge every day is to mitigate the risks as they arrive."