Energy & Resources

The importance of energy and resources to the economy and Australia’s competitiveness in Asia has increased with the latest resources boom. The sector will continue to be a key engine of growth over the next decade and beyond. Demand for Australia’s mineral wealth to drive growth in emerging economies like China and India is one significant source of activity with cross-border energy and resources transactions in key commodities such as iron ore, coal and LNG/CSG inevitably a focus.

The implications for economic activity are profound with an unprecedented number of multi-billion dollar projects (including linking infrastructure) planned or proposed.

Project sponsors are seeking a wider variety of financing (beyond equity) including syndicated debt involving foreign banks and secondary listings on international bourses to support higher project costs (in part driven by wage pressures and proposed Federal mining and carbon taxes) and aggressive production schedules.

A trend towards higher value long term sales contracts reflects anticipated scarcity of assets (raw materials and fuel), consequential inflation and users’ need to shore up supplies including through equity or off-take arrangements.

The climate change debate will continue to polarise views resulting in a greater focus on water security and renewable power (including through waste to energy), both of which have already spawned a raft of projects.

As lawyers, we work with our clients to optimise their commercial outcomes (through the development of appropriate structures to attract funding) and to mitigate risks (in relation to disputes and the impact of resource rent and carbon taxes). The size, complexity and efficacy of projects and cross-border transactions require these world class technical and commercial skills.