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The Auditor-General responded on 10 September 2021 to correspondence from Ms Madeleine King MP and Senator the Hon Kristina Keneally dated 26 August 2021, requesting that the Auditor-General conduct an investigation to examine the Beetaloo Cooperative Drilling Program because of probity concerns.
10 September 2021
Ms Madelaine King MP
Shadow Minister for Trade
Shadow Minister for Resources
Federal Member for Brand
Senator the Hon. Kristina Keneally
Deputy Leader of the Opposition in the Senate
Shadow Minister for Government Accountability
Senator for New South Wales
By email: Madelaine.King.MP@aph.gov.au ; Senator.Keneally@aph.gov.au
Dear Ms King and Senator Keneally
Management of the Beetaloo Cooperative Drilling Program
I am writing in response to your letter of 26 August 2021 requesting that I undertake an investigation into the management of the Beetaloo Cooperative Drilling (BCD) Program, administered by the Department of Industry, Science, Energy and Resources.
I have considered your request in in the context of other priorities for audit coverage across the public sector. I have decided that the matter you referred should not replace other areas of audit focus recently identified in the Australian National Audit Office’s Annual Audit Work Program (AAWP) 2021–22.
As you are aware, the Senate Standing Committee on Environment and Communications is currently conducting an inquiry into oil and gas exploration and production in the Beetaloo Basin and has only recently issued an interim report. This report includes several recommendations to Government in relation to the management of the BCD Program and I note that the final report for the Committee’s on-going inquiry is due in March 2022.
While I have decided not to commence an audit at this time, I will however consider the matters you raised in the development of audit topics for inclusion in the 2022–23 AAWP.
Yours sincerely
Grant Hehir
Mr Grant Hehir
Auditor-General for Australia
GPO Box 707
CANBERRA ACT 2601
By email: grant.hehir@anao.gov.au
Dear Mr Hehir
RE: BEETALOO COOPERATIVE DRILLING PROGRAM
Serious probity concerns have been raised in relation to the Morrison-Joyce Government's administration of the two-year $50 million Beetaloo Cooperative Drilling Program.
On this basis, we request you consider conducting an audit of the program.
On 7 July 2021 the Minister for Resources, the Hon. Keith Pitt MP, announced the award of three grants to Imperial Oil and Gas under the program, valued up to $21 million. Imperial Oil and Gas is a 100 percent-owned subsidiary of Empire Energy.
The chair of Empire Energy is Mr Paul Espie AO. Mr Espie is also a Liberal Party donor and the chair of the Liberal Party-affiliated Menzies Research Centre. He has been described by a current minister in the Morrison Government as a "doyen" of the Liberal Party.
On 17 October 2020, the Minister for Energy and Emissions Reduction, the Hon. Angus Taylor MP, enjoyed sponsored travel and hospitality from Empire Energy in connection with a visit to a company well in the Beetaloo Basin.
It has recently been revealed that Mr Taylor was accompanied on the flight by (a) a Liberal Party fundraiser from his home state of New South Wales and (b) the executive director of the Menzies Research Centre. Mr Taylor's ministerial visit coincided with a Country Liberal Party fundraiser, which was attended by Empire Energy.
Documents released under Freedom of Information laws show the company had discussions about the Beetaloo grant program with Mr Taylor and/or his office in 2020, and followed up those discussions this year.
While individuals and companies are entitled to apply for merit-based discretionary grants regardless of their political affiliations, where those affiliations exist care must be taken to demonstrate funding decisions are made in the public interest and not in the interest of the governing party.
Regrettably, the Government's responses to parliamentary questions, and even a Senate order for the production of documents, have been reluctant and partial.
In our view, an audit of the administration of the Beetaloo Cooperative Drilling Program at this time would help restore confidence in the program and deal with unresolved concerns about the interweaving political and financial relationship between the Liberal Party and a grant recipient.
Thank you for your consideration of our request.
Madeleine King MP
Shadow Minister for Resources
Federal Member for Brand
Senator the Hon. Kristina Keneally
Deputy Leader of the Opposition in the Senate
Shadow Minister for Government Accountability
Senator for New South Wales
25 August 2021