The petroleum and gas industry’s direct expenditure during FY20 included $3.8 billion spent on local goods and services, benefiting 2,883 local businesses and 250 community organisations across Queensland.
Actively targeting investments from the petroleum and gas industry can help small businesses and regional communities create new job opportunities, retain their youth population and deliver long-term outcomes that will ensure regional Queensland remains a vibrant place to live.
The Queensland Government also returns a portion of the royalties generated from the onshore gas industry to the regional communities from which the gas is produced.
The Queensland Government remains committed to supporting regional communities through a regional infrastructure funding program called Building our Regions.
Since its inception, Building our Regions has allocated funding towards 264 construction projects and seven planning projects across 67 local government areas in regional Queensland – supporting an estimated 2,770 jobs and attracting additional investment of over $539 million from local councils and other organisations.
Onshore gas industry community sustainability funds
Community sustainability funds have been established by some of the major onshore gas proponents in Queensland to benefit local community organisations and facilities:
- Australia Pacific LNG (APLNG) project, a joint venture between Origin Energy, ConocoPhillips and Sinopec – Community Investment
- Shell’s QGC business, one of Australia’s largest natural gas producers – QGC Communities Fund
- Arrow Energy, a joint venture between Shell and PetroChina – Brighter Futures Program.
These onshore gas projects have provided these community sustainability funds in addition to measures identified as part of their social impact assessment process.
Local content checklist for business
‘Local content’ refers to opportunities made available to small businesses based in regional Queensland communities to provide goods and services to the onshore gas industry. Many gas companies have clear “buy local” policies in place that have been very beneficial to local business.
To win these contracts small businesses should carefully research the needs of individual gas projects, their prequalification requirements and companies procurement processes before bidding for the work.
The below ‘Local content tips for business’ checklist is published as a general guide for what small businesses in regional Queensland should consider when engaging with the onshore gas industry.
1. Find out about projects and the local market
Local chambers of commerce and economic development organisations, local and state government agencies are likely to have some information on projects and some idea of the local market. These organisations can also provide valuable business networks.
2. Know rules of engagement for your tier level
It is vital for local businesses to clearly understand the level or tier they fit into the industry supply chain and the supplier requirements of the different onshore gas projects in Queensland. There are a range of private and government based business improvement programs and services aimed at enhancing business competitiveness and productivity. For assistance in identifying tier levels, refer to the Tier Barometer (QLD) powered by ICN Gateway.
3. Understand how work packages will be advertised and awarded
The gas companies use a variety of means to advertise and award work, including: company websites; ICN; Achilles; word of mouth; regional development organisations; local newspaper or a combination of these. Source the relevant procurement contacts for the gas companies and their major suppliers to learn more about how, where and when work packages are advertised.
4. Work with others
A joint venture or partnership might present an opportunity for those businesses that cannot complete all aspects of the work. It is important to consider any relevant prior experience in this type of organisation and the likelihood of success this type of approach.
5. Promote your businesses capabilities
A well written capability statement or web profile allows small businesses to introduce themselves in an easily digestible, concise and accessible manner. It should outline the key competencies of your business, such as: core competencies; accreditations; qualifications; and importantly your track record of supply/product/services.
6. Be ready to adapt to changes in the industry
Like every industry there are swings and roundabouts. Regionally based small businesses need to manage cash-flow carefully. For example, with volatile commodity prices, companies can quickly and, with little notice, reduce expected work packages. Actively look for ways to: improve safety; create better value for money/be competitive; and build a track record. Every project is looking at ways to reduce costs. Positive partnerships with lead contractors or companies are important. Be prepared!
7. Be prepared for contractual negotiations
When presented with a contract, seek legal, financial, and other appropriate advice. This may include guidance on how to manage your contracts and documentation, how to position your business legally and the most appropriate financial structure for the business to utilise.
- Queensland Resources Council – ‘Local content’ code of practice to encourage major resource and energy projects to engage local suppliers
- Tier Barometer (QLD) powered by ICN Gateway
- Achilles FPS – a prequalification management system for suppliers to the onshore gas industry sector
- Gas Companies websites for specific procurement information
- Queensland Government: