It’s not just in the U.S. where the early stages of an oil and gas revival can be seen, something similar is happening in Australia, led by the country’s richest person, the iron ore billionaire Gina Rinehart.
Armed with a fortune which Forbes estimates at $30 billion, Rinehart is building a new division of her Hancock Prospecting, snapping up assets in the creation of a nationally significant natural gas producer trading as Hancock Energy.
Named after her later father, the mining pioneer Lang Hancock, the mining and gas interests of Rinehart include a 50% stake in east coast focused Senex Energy, with Korea’s big steel maker Posco holding the other half, and a rapidly expanding west coast business.
A series of corporate deals over the last two years has seen Rinehart leverage her position into effective leadership of an historic gas producing region, the Perth Basin, which is being revitalized using modern exploration and production technology.
Her first move was the takeover two years ago of Warrego Energy which is half owner of a significant gas discovery called West Erregulla beating another Australian billionaire, Kerry Stokes, who controls Beach Energy, to the prize.
Rinehart is now in the hunt for the owner of the other half of West Erregulla, Strike Energy, with a move expected to sooner rather than later with Strike’s long-term chief executive Stuart Nicholls announcing his resignation last week.
In between takeovers, Rinehart paid $750 million for the Perth Basin gas interests of financially stretched Mineral Resources.
If Rinehart buys Strike, she will be in a position to dominate a region with a 50-year gas production history which is starting to reveal reservoirs at depths which were beyond the original explorers.
Asian Corporate Partners
But in the same way she has teamed up with a major Asian company in Posco for her east coast gas business the west coast move could see her build a relationship with one of Japan’s biggest companies, Mitsui & Co.
The seeds of a deal with Mitsui can be seen in its existing status as a partner with Stokes in the Waitsia project which abuts Rinehart’s growing interests and her close relationship with the chairman of Mitsui’s Australian business, Sam Walsh.
It was Walsh who 20 years ago, when head of the iron ore division of Anglo/Australian miner Rio Tinto, convinced Rinehart to strike a 50/50 deal to clear the way for the development of her first iron ore mine, Hope Downs.
History could be repeating because Rinehart and Walsh have deep ties. Rinehart prefers joint ventures and the West Erregulla partners (Beach and Mitsui) have the right to export part of their output into a higher-priced international market.
Gas tap with pipeline system at natural gas station. Industry
The next steps in the evolution of Hancock Energy as a significant Australian oil and gas company are likely to start with a move on Strike which appears to be in the early stages of a sales process.
As well as the departure of Nicholls the board has announced a strategic review aimed at boosting the returns for Strike shareholders who have watched the share price of their company drop from A50 cents a year ago to last sales at A23c, valuing the business at a lowly A$645 million ($400 million).
While a bid for Strike is likely to be Rinehart’s next Australian move, the acquisition of oil and gas assets in the U.S. could be an international step.
A delegation of Hancock Prospecting executives, including the head of Hancock Energy, Stuart Johnson, is in the U.S. this week hunting investment opportunities while Rinehart has been attending events associated with the inauguration of the President, Donald Trump.
Non-Left, Non-Woke
Rinehart earlier today told The Australian newspaper that Trump had started a great “non-left, non-woke” movement.
“We see the U.S. will become under President Trump’s leadership an outstanding investment opportunity made possible by a focus on decreasing bureaucracy and government red tape and regulations,” she told the newspaper.
“President Trump has started the greatest non-left, non-wok movement which is sweeping the world. Hopefully, Australia will not miss out.
“Like many other, we have already invested and are waiting to invest more billions in the U.S.”
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