Australia's Woodside Petroleum Ltd (ASX:WPL) chief executive Don Voelte says its Pluto liquefied natural gas (LNG) project would not have been viable had the government's proposed resources super profits tax been applied.
"We will tell you right now that management wouldn't have been able to take that project to the board of directors, it wouldn't fly under the new taxes," Mr Voelte told reporters after a business lunch in Sydney on Friday.
"Pluto would still be in the ground."
Mr Voelte said about 45 Woodside staff worked on economic models comparing the company's various projects under its current petroleum rent resources tax with what would happen under the proposed new tax on resource super prfoits.
The outcome of the study was that the Pluto project in Western Australia, which involves a A$13 billion (US$10.8 billion) investment for phase 1, would not have proceeded.
The proposed tax has received an almost universally frosty response from mining companies.
Mr Voelte said that although Woodside would be hardly touched by the proposed tax, the poor reception to the proposal among offshore markets had "huge implications", particularly on how the company would be able to secure funds from overseas investors.
He said the company relied on foreign investors to provide funding for its projects.
"We have to be seen as a sovereign, risk-free country, in other words a very stable country," Mr Voelte told an American Chamber of Commerce in Australia lunch.
"If this government starts to be seen as willy-nilly changing tax any time they want to on these things, this will be viewed very negatively by the investing world for Australia."
On the broader economy, Mr Voelte said Australia was still "extremely fragile" coming out of the global financial crisis and blamed the proposed tax for the recent slide seen on local equity markets.
"To throw this on the Australian companies, it doesn't surprise me that the ASX is underperforming every other stock exchange in the world these days."
Meanwhile, Mr Voelte described the company's relationship with East Timor government as "decent", but conceded the company was "struggling a little bit with the prime minister's office".
According to reports, officials from East Timor's independent national petroleum authority had recently refused to accept the development plan for a floating LNG platform, with a security guard throwing the documents into a car as two Woodside officials left the prime minister's office.
But Mr Voelte said the plans had since been lodged.
The decision to use a floating LNG plant, rather than pipe LNG back to Dili or Darwin, has been met with disappointment among some in East Timor.
Mr Voelte said under the requirements of the treaty signed by East Timor and Australia, the company was obligated to pick the best commercial option.
"The Timor option was a very expensive option and didn't provide the maximum amount of money to the governments of Timor Leste and Australia," Mr Voelte said in response to a question.
Woodside closed down 21 cents at A$41.38.
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