**Check against delivery
Ladies and gentlemen, it is a pleasure to be here today.
The Darwin Convention Centre is a state-of-the-art venue in a city coming of age as a major port and industrial centre.
It is also the gateway to some of Australia's best tourism experiences, incorporating both natural wonders and Indigenous cultures.
I note your conference program offered the opportunity to visit the spectacular Litchfield National Park over the weekend.
It's good to see the resources and energy sector playing an important role in Australian tourism through business events such as the APPEA conference.
Let me also say it is good to see this very important conference receive such a high level of support in the face of the global downturn.
It is a tribute to the resilience of the oil and gas industry and I suspect - Belinda's persistence.
In times like these it is more important than ever for the industry - and governments - to work together and pave the way for economic recovery.
The Australian Government's plan is to support jobs today by building the essential infrastructure Australia needs for tomorrow.
Nearly 70 per cent of our economic stimulus is for nation building infrastructure - the biggest school modernisation program in Australia's history, investments in roads, rail and ports, hospitals, broadband and major Carbon Capture and Storage (CCS) and solar energy projects.
We will also continue to drive forward with relevant micro-economic reform.
We are all in this together and by working together we are going to build our economic recovery.
Developing Australia's gas resources for LNG - underpinned by long-term supply contracts into Japan, China, Korea and Taiwan - is one of our most prospective opportunities to buffer the economy in the near-term and kick-start a new boom in the medium to long-term.
It is my top priority to bring the many LNG proposals you have on the table to fruition.
Before I come to that, however, I want to deal with two issues that are top of mind for all of us.
First, safety.
I am pleased to announce the release of the inaugural Offshore Health and Safety Performance Report for 2007-08.
This is an important initiative of the National Offshore Petroleum Safety Authority.
Last year we had a major incident on Varanus Island and thankfully no one was hurt.
The family and friends of the worker who died on the Karratha Spirit on Christmas Eve were not so fortunate.
Although the safety record of Australia's offshore petroleum industry is reasonable compared to other industries, it has been overshadowed by these events.
Strong leadership is required to lift safety performance to the next level.
I know APPEA is committed to that and I assure you - so am I.
While the safety of people comes first, the integrity of facilities is also vital to the security of energy supplies for business and the community.
For the safety of people and the security of our energy supplies, it is vital that we learn the lessons of major incidents and importantly, act to prevent them in the future.
That is why Minister Moore and myself established an inquiry panel to consider the performance of our safety regulators and the regulatory regime following the Varanus Island incident and the incidents on the Karratha Spirit and the Castoro Otto.
Whilst I have not seen the report of the inquiry panel, it is clear to me that the regulatory regime needs to provide for no-blame independent safety investigations across all jurisdictions.
This is a matter I intend to place on the agenda for the Ministerial Council on Minerals and Petroleum Resources in July.
In addition to the incidents referred to above, the NOPSA statistics have indicated increasing numbers of gas releases and a plateauing of personal injury rates, both of which serve as potential indicators for more severe events.
I note also that the safety inspection of the Bayu-Undan field within the Joint Petroleum Development Area between Australia and East Timor did not occur for over two years.
We must all make greater endeavours to prevent such oversights in the future.
In summary, NOPSA's report indicates that the industry needs to improve leadership, better manage ageing facilities, address skills shortages and minimise gas releases.
Let me turn to climate change policies.
The introduction of emissions trading has been an area of agreement between business and all major political parties since well before the last election.
But the devil is always in the detail - and that is where we have found ourselves for the last year.
In that context, let me say the Government remains committed to getting this scheme right and we will continue to work with you to achieve that objective.
Let me also say that just as technology created this problem, technology will be the solution.
While emissions trading is part of the solution, only an energy technology transformation will deliver the real reductions in greenhouse gas emissions needed to meet our targets.
That is why, in this year's Budget, we invested $4.5 billion in the Clean Energy Initiative to deploy industrial scale low emissions coal and solar power generation projects, and advance other innovative renewable and clean energy technologies.
Gas is equally important.
It is a rarely quoted statistic that LNG has improved its energy and process efficiency to enable a one third reduction in carbon emissions per tonne of LNG produced over the last 15 years.
Those efficiency gains will continue because the truth is that industry will adopt emissions-saving technologies as fast as it can because it makes good business sense.
While the Australian Government remains committed to implementing a sound Carbon Pollution Reduction Scheme by 1st July 2011, the best thing you can do is what you do best - implement the technology to reduce emissions anyway.
Since I addressed you last year, the Australian Government has introduced the world's first regulatory framework for offshore greenhouse gas storage.
I would like to take this opportunity to thank the industry for its cooperation in helping us to establish that framework in a way that properly balances the rights of existing petroleum resource owners with future rights for greenhouse gas storage.
Let me talk now about exploration.
We must not forget that the long term outlook for oil and gas is one of enormous demand growth and investment in exploration - and production - must continue through this downturn.
Otherwise we will quickly find ourselves in the volatile situation that led to Saudi Arabia's extraordinary decision to call the Jeddah Energy Meeting less than a year ago - on 22nd June 2008 - when oil prices were around US$150 a barrel compared with US$63 today.
When it comes to exploration, we went to the election with a commitment to a flow through shares scheme and I will work hard to deliver that commitment in this Parliament - as the Prime Minister said when he addressed the Minerals Council last year.
It is appropriately the subject of consideration through the Henry Review, along with other exploration incentives.
In the meantime, as announced in the Budget, the Government will extend the offshore exploration Designated Frontier Areas incentive in the petroleum resource rent tax (PRRT) by one year.
Six Designated Frontier Areas are included in the 2009 Offshore Acreage Release.
My Department and Geoscience Australia consider them all to be prospective but under-explored.
They include three large deepwater areas on the northern Exmouth Plateau offshore from Western Australia.
The Exmouth Plateau contains major gas fields such as Jansz and Scarborough and three out of six deepwater exploration wells drilled in the area in 2008 were significant gas discoveries.
The other three areas are in the central Great Australian Bight off South Australia in the Ceduna Sub-basin are truly new frontiers, where no permits are currently held.
John Hartwell, Head of the Resources Division of my Department, will provide more details in a session after lunch today.
Exploration leads us to the potential for investment in new production capacity.
The Commonwealth has a greater direct responsibility for development of offshore petroleum than for any other resource.
It's a responsibility I take very seriously, particularly at a time when we are all looking to pull through major investments that can sustain jobs and exports, and provide revenue.
Take Woodside's Pluto LNG project in the Pilbara - Australia's largest ever investment project at around A$12 billion.
Later this year, Chevron, Shell and ExxonMobil expect to make a final investment decision on the Gorgon LNG project, also in the Pilbara.
And the race is also on to develop Inpex's Ichthys project here in Darwin and various coal seam methane-based LNG projects in Queensland.
Recent reports indicate the Gorgon project alone could involve total investment in the order of A$50 billion.
Gorgon in itself is a one project economic stimulus package.
My Department is focussed on issuing the necessary titles for the project in a timely manner - both production licences and retention leases -and resolving final regulatory arrangements relating to the carbon capture and storage (CCS) element of the project.
I am pleased to say I have now seen this technology in operation first hand after visiting the Sleipner project in Norway last week.
While the technology is proven and operating successfully, Australia's Gorgon project will be the biggest CCS project ever undertaken in the world.
The Australian Government is also working with Woodside, the WA Government and the Kimberley Land Council to establish a new regional LNG hub in the Kimberley to develop Browse Basin gas reserves.
We have committed more than $340 million in the West Kimberley over the next four years to close the gap on Indigenous disadvantage.
The Kimberley LNG hub is the next step to secure the future economic and social empowerment of Indigenous communities in the Kimberley.
And I am committed to working with Woodside and the Browse joint venture partners to bring this project to reality as early as possible.
However, we cannot underestimate the difficulty of bringing these highly capital-intensive projects to fruition.
Even though Pluto will increase Australia's LNG exports by 25 per cent, this will simply enable Australia to maintain a global market share of 8-9 per cent.
After 25 years in the LNG business, the question needs to be asked: how can we do better?
Many of our international competitors in the LNG industry have benefited considerably from the direct stakeholdings or investment policies of host governments.
Investment timelines are often driven by national oil and gas companies, who have a stake in some 80 per cent of the world's LNG production.
But the Australian Government recognises that the key driver of our resource development must remain the operation of an efficient and transparent market.
While we currently have less than 10 per cent of the global market, Australia is a very strategic place to invest in LNG, particularly for international oil companies (IOCs) and independent LNG companies.
On an equity basis, these companies own 40 per cent of the world's LNG production capacity and 20 per cent of that is in Australia.
By 2018, on current forecasts, their equity share will grow to more than 55 per cent and nearly 40 per cent of that will be in Australia.
The challenge for the Australian Government is to maximise the growth and competitiveness of our LNG industry, provide the right policy settings to increase our share of investment in it, and unlock the wealth of our gas resources for the benefit of the nation.
This is one of the key issues that will be addressed in the Energy White Paper process currently under way within my Department.
Looking at our fiscal and regulatory framework is a good place to start.
The Henry Review has flagged it will consider a resource charging regime to improve the risk-reward balance for resource developments and remove inefficiencies and inconsistencies.
With industry facing a range of different royalty regimes that are very important to State Government revenues, there is no doubt reform will be an enormous challenge, but that is not a reason to shy away from it.
My Department is working very closely with the Treasury on these issues and will continue to do so throughout 2009.
The Productivity Commission's final report examining the Regulatory Burden on the Upstream Petroleum (Oil and Gas) Sector was released on 30th April.
The Commission identifies the need to expedite approvals processes and reduce unnecessary delays.
The Commission also noted the requirement for State and Commonwealth legislation to be synchronised, and the compelling case to establish a single offshore regulator to coordinate petroleum development approvals.
I also recognise that our regulatory framework was designed in an era of smaller-scale oil and gas projects and less complex markets.
Current title arrangements for retention leases involve five-year reviews of the commerciality of individual gas fields.
On the one hand, this can lead to potential uncertainty of tenure for the sequential fields that may be required for a large LNG project.
On the other, it can lead to the frustration of domestic gas customers or LNG infrastructure owners who require gas and believe individual fields could be commercial earlier or more profitable if developed for other purposes.
Improving the retention lease system is an area where I believe we can make significant reforms and today, my Department will release a discussion paper for consultation over the next two months.
Importantly, we must strike the balance between attracting and protecting investment in exploration while also delivering development outcomes.
While there is a role for Government in planning for orderly and optimal industry development, I believe there is great potential for the industry to do more through commercial negotiation.
For example, to better balance corporate positions across basins and processing hubs and create more synergies and common drivers for investment.
There is also more that could be done to bring third party gas to market in a way that provides commercial value for both infrastructure owners and third party gas holders.
The recent agreement between Shell and BP, which has the effect of bringing BP's share of the Jansz and Io fields to market through Gorgon infrastructure, is a good example of this.
On balance, my objective is the same as yours - to ensure that Australia maintains and grows its market share of global LNG investment and trade - and I want to work cooperatively with you to achieve that.
I wish you every success for the remainder of the conference.
Thank you.