CHAPTER 6
Wearing a snazzy bow tie and with his second wife Anne on his arm, petroleum geologist Lewis George Weeks touched down at Sydney’s Mascot airport on Sunday, 6 March 1960. He had come out of retirement to make Australia, which he called ‘the Cinderella continent’ in terms of oil reserves, self-sufficient in petroleum products – and to get rich in the process. Weeks’s life had been one long adventure, yet its most dramatic and rewarding passage had only just begun.
‘Lewis Weeks was a thorough gentleman – a true, conservative East Coast American and one of the great oil finders,’ says Russell ‘Russ’ Fynmore, who became head of BHP’s oil-and-gas division (later BHP Petroleum). 1
Born on a farm near Chilton, Wisconsin, on 22 May 1893 and brought up in a Christian family of ‘frugal means’, Weeks attended a one-room country school and worked his way through the University of Wisconsin to graduate in geology in 1917. In the years ahead, he searched for oil – usually successfully – in South America, Burma, France, Turkey, Saudi Arabia and Canada, played polo with British officers and shot wild boar in India, climbed the Himalayas, sailed up the Amazon and became a legend at John D. Rockefeller’s Standard Oil of New Jersey before his retirement in 1958.
In his memoir, Weeks says he received a phone call in late 1959 from John Norgard, who was visiting the United States, asking him to come to Australia to advise the company on where to drill for oil in the Sydney Basin. Weeks replied he wouldn’t think of wasting the company’s money on such a venture and suggested that Norgard consult other geologists. A few days later, Norgard rang back and asked whether he could visit Weeks to discuss the matter further. Weeks agreed and when Norgard arrived at his house on Bluewater Hill, Westport, Connecticut, 2 Weeks led him to a large map and told him the Sydney Basin would never produce ‘more than a dab of natural gas’.
‘You’re in the wrong area,’ Weeks said. ‘You’ve got to go down to the water and get your feet wet. The oil-bearing rocks in Australia are the younger rocks, down to the south and out in the water.’ 3
When Norgard returned to Australia, he recommended that Weeks be hired as a consultant geologist. Keith A. Rowell, BHP’s general manager for raw materials and exploration, agreed to a two-week contract at the rate of US$250 per day, plus travel expenses. 4 Following his arrival in Sydney, Weeks was taken on a tour of the Sydney Basin, where he was introduced to Dave McGarry, future managing director of Australian Oil & Gas. ‘We had held the northern blocks of the Sydney Basin under licence for two years,’ McGarry says, ‘and had drilled several wells using percussion drills. We’d found a little gas but no oil. I was looking after our wells as a young geologist when Lewis Weeks turned up. BHP’s licence covered the coal areas to the south of us, and Weeks wanted to drill a well in our block to see what was there. But he gave the Sydney Basin away before the hole was drilled, and I eventually got Shell to drill it.’ 5
Weeks returned to Sydney, where he had afternoon tea at the Australia Hotel with Murray Lonie, BHP’s assistant general manager for raw materials and exploration, and chief geologist Frank Canavan. His view was unchanged. The company’s Petroleum Exploration Licence 25 was worthless. ‘Weeks said there was no oil in the Sydney Basin and he was dead right,’ Dave McGarry says.
The geologists were downcast, but only until Weeks replaced his teacup and asked, ‘Is your company really interested in finding oil?’
Lonie brightened. ‘You have some prospect in mind?’
Weeks allowed himself an enigmatic smile. For all his Christian humility, money was paramount. He had a new wife – the widow of his best friend Fred Sutton – and he had never earned more than US$30,000 a year in his life. ‘One thing oil geologists learn from sad experience is that even in the best of company you can pour out your ideas and be greeted with disinterest approaching disdain,’ Weeks later philosophised in his memoir. ‘Then later you find that somebody else has taken them and run with them, often scoring a touchdown. After this happens a time or two, you learn to reserve your ideas for some top decision-maker who trusts you and whom you trust to treat you fairly. In a consulting situation, it is even more necessary to be careful not to divulge too much too soon.’ 6
Lonie and Canavan took Weeks back to his hotel, and Lonie telephoned his boss, Keith Rowell. ‘I think Weeks is on to something,’ he said. They knew from John Norgard’s report that the American had indicated southern Australia as the most promising oil-bearing region, but he had given no clue as to where BHP should start looking. The two men agreed he should be invited to Melbourne the following day instead of returning to the United States. On Friday, 18 March 1960, Weeks met Rowell in Melbourne and told him he knew where oil would be found but that he would speak with nobody but Ian McLennan.
Ushered into the chief executive’s office at Essington Lewis House, the new company headquarters at 500 Bourke Street, Weeks began cagily. Nothing was a hundred per cent certain in the oil-exploration business, but McLennan would be wise to abandon all hope of a strike in the current BHP leases. ‘That’s good,’ McLennan replied. ‘It will save us some money.’
Weeks then said he knew of a more promising area that was accessible to 90 per cent of world markets. ‘I’ve been aware of it since 1931,’ he said, ‘and have twice mentioned it in publications in the 1940s.’
So ... the unasked question hung between them: if not the Sydney Basin, then where? Weeks prepared the ground. First, he’d need to do a proper magnetometer survey at a cost of £350,000. McLennan nodded. That would not be a problem. Then a further £1 million would be required for seismic surveys. BHP’s net profit for 1959–60 was just £9.4 million, and these were enormous amounts, but McLennan kept his nerve. He accepted that figure, too.
Then there was the matter of Weeks’s fee. How much would he require in the way of commission? Weeks had rehearsed his answer. His work had made billions for Standard Oil and other petroleum leviathans; now was his chance for a big pay day. Calmly, he said, ‘There is a standard royalty payment throughout the world for introducing new oil-and-gas areas.’
He had thought of asking for five per cent but decided to settle for half that amount. He told McLennan he wanted a royalty of 2.5 per cent. McLennan looked him in the eye. ‘Will you rely on me to do the fair thing?’ he asked.
Weeks took a moment to size up the man. At 51, McLennan had maintained his athletic build, and the years of command had added depth and gravitas to his natural warmth of personality. ‘Yes,’ the American said. ‘I will rely on you.’
So, the location...
‘Come to your window,’ Weeks beckoned. ‘It lies out there in Bass Strait, and most particularly off the Gippsland coast.’ 7 For a moment, McLennan was speechless. Bass Strait was notorious for wild weather and roaring winds. Its depth was greater than any offshore mining so far attempted. The costs could be horrendous. They would be operating at the very limits of technological advance. Yet, if they could pull it off, the benefits to the company – and to Australia – would be massive. McLennan offered his hand. Weeks took it. McLennan would be as good as his word: when the massive Bass Strait field was discovered, Weeks would make many millions from his 2.5 per cent royalty.
The episode is a powerful legend within BHP. Weeks is romanticised almost as much as Charles Rasp. However, the behind-the-scenes reality is even more engaging and is revealed here for the first time. It involves an eminent Australian professor of geology, Samuel Warren Carey, who until now has been overlooked in the history of BHP. Yet without Carey’s input, it is at best highly unlikely that the American would have been able to lead BHP to the vast oil reservoirs beneath Bass Strait.
There is no doubt whatever about the importance that Weeks attached to Professor Carey’s work. Even before he had set foot in Australia, Weeks travelled the short distance between his Westport home and New Haven, Connecticut, to visit the Australian, who was then resident at Yale University, to sound him out on oil exploration in Bass Strait.
At 66, Weeks was Carey’s senior by some 18 years and balding rapidly, while Carey’s mane of curly silver hair remained firmly intact. But both were extroverts who enjoyed the limelight – indeed, Carey’s lectures at Yale were so controversial that he was labelled ‘a completely wild man’, and his theories on continental drift and the expanding Earth caused some orthodox academics to shake their heads in disbelief and walk out of the lecture hall. ‘Every lecture was a performance,’ says Professor Pat Quilty, who worked with Professor Carey at the University of Tasmania and researched his life for a memorial for the Academy of Science. ‘He believed the imparting of knowledge should be done in a memorable way.’ 8
Both Weeks and Carey had had a tough, rural upbringing. S. Warren Carey, as he preferred to be known, was born on a small farm on the Georges River near Campbelltown, 45 kilometres south-west of Sydney, on 1 November 1911, one of the six children of Tasman George Carey and his wife Hannah Elspeth. ‘When I started school,’ he said, ‘I had to walk three and a half miles to get there and then walk back again – right from the age of five.’ 9
After attending Canterbury High School, Carey won a scholarship in 1929 to the University of Sydney, where he studied science, taking geology as a fourth subject to chemistry, physics and mathematics. He came under the influence of the Welsh-born geologist, Emeritus Professor Sir Edgeworth David, one of the team who had located the magnetic South Pole as a member of Shackleton’s expedition to Antarctica in 1908–09. David had retired as professor of geology in 1924 but he so inspired Carey that by the end of his first year the young man had no doubts he was going to be a geologist, ‘a rock-hopper’ in geology parlance.
Money was tight and he had to work his way through college: he literally conjured up cash by giving magic shows at children’s parties as ‘the Great Mystic S. Warren Carey’. When he graduated in geology with first-class honours in 1933, his plan was to study for his master’s and then go to Cambridge, but first he signed on with Oil Search Limited, one of Australia’s original exploration companies, to do fieldwork in Papua New Guinea. As an undergraduate, Carey had become aware of Wegener’s ideas on continental drift, 10 a concept he pursued and developed for the rest of his life. It provided the basis of his doctoral thesis in 1938–39 on the tectonic evolution of New Guinea and Melanesia.
Then came the Second World War, and Carey was recruited to the Anglo-Australian special-forces outfit, Z Special Unit, and devised commando raids behind the Japanese lines in Papua New Guinea and South East Asia. His approach was suitably unconventional. On one occasion, he severely embarrassed the Australian and American navies in a practice exercise by planting limpet mines surreptitiously on the hulls of most of the warships in Townsville Harbour, an escapade that earned him official censure but huge kudos among the rank and file.
In 1944, Carey returned to Melbourne, where his wife Austral and young family had been living after being evacuated from New Guinea. ‘I resigned from the army to become chief government geologist in Tasmania,’ he says. He retained his government position until 1946, when he was appointed foundation professor of geology at the University of Tasmania. 11
One of the delegates at a continental-drift symposium organised by Carey in Hobart in 1956 was Chester Longwell of Yale University, who suggested that Carey should come to Yale as a visiting professor during his sabbatical year of 1959–60. Sam and Austral packed their bags and took their four children – Tegwen, Harley, Robin and David – to the USA. In that same year, Lewis Weeks had been elected president of the prestigious American Association of Petroleum Geologists (AAPG).
One of the AAPG members was another Australian geologist, Eric Rudd, whom Weeks had first met in the 1930s after Rudd had been awarded his master’s at Harvard, then the leading geoscience school in the world. After graduating from the University of Adelaide, Rudd had used his savings from working for Oil Search in the Pilbara and Kimberley regions of Western Australia, Gippsland in Victoria and the Roma district of Queensland to pay for his tuition in America. 12 Returning to Adelaide in 1936, he had joined BHP as a geologist. He remembers walking up to the Top Cottage, the company headquarters in Whyalla, and handing his boss a pamphlet he had written on why BHP ought to get into the oil-search business. 13
BHP paid little attention: instead of commissioning Rudd to explore for oil, it put him to work estimating its iron-ore and coal reserves. Even after he had become chief geologist in 1948, replacing Lockhart Jack, he had little success in persuading BHP to join the oil explorers. 14 But after he had resigned from BHP to become professor of economic geology at Adelaide University, Rudd had given a lecture attended by Ian McLennan in 1951. At question time, McLennan asked him, ‘If you were to seek oil in Australia, where would you search?’ Rudd replied, ‘The north- west of Western Australia, Gippsland and the Roma district.’ Two years later, AMPOL Exploration struck oil at Rough Range in the north-west; Australia’s first commercial oilfield, at Moonie in the Surat Basin near Roma, was announced in 1960; and in 1966 BHP began its successful exploitation of the oil-and-gas deposits in Bass Strait off Gippsland. 15
So Ian McLennan was nothing like the novice in oil matters that Lewis Weeks makes out in his memoir. Weeks had never visited Australia but he claims to have studied the geology of southern Australia as early as 1931 after what he describes as ‘a chance conversation’ in downtown Manhattan with an old-time prospector, who had advised him that Bass Strait was the place to look for oil. Dr Max Banks, Professor Sam Carey’s associate at the University of Tasmania – ‘lieutenant to Carey’s captain’, as he puts it – was dismissive about such an eventuality. ‘I haven’t got a suitable salt cellar here to take a pinch of salt,’ he said. ‘I know Carey did talk to Lewis Weeks about Bass Strait, but what they discussed I don’t know, nor do I remember precisely when it was – but he did: there’s no two ways about that.’ 16
In a 1996 letter in the authors’ possession, Carey told his son, Dr Harley Carey, ‘When I was at Yale, [Weeks] visited me many times to discuss the structure of Bass Strait.’ 17 The issue clearly disturbed him. Before his death on 20 March 2002 at the age of 90, Carey left the following account of his meetings with Lewis Weeks, not just at Yale but in no fewer than four other locations: Copenhagen, New York, Westport and Hobart:
One of Professor Carey’s postgraduate students, Dr Andy Kugler of Austin, Texas, recalls a lecture in which Carey discussed oil potential in Australia, particularly in Bass Strait. ‘Just prior to that, he had been contacted by Lewis Weeks with respect to where they should be looking for oil in Australia; that was what Sam Carey actually told us in the lecture,’ Kugler says.
‘“Prof” had suggested there was a big fault zone between Australia and Tasmania and there were maybe up to a hundred miles of horizontal offset between the structure of Tasmania and the structure of Australia. In the zone between, which is Bass Strait, there had developed a basin which as far as could be told from onshore was getting into the Cretaceous period of the Mesozoic age, which is responsible for a lot of the world’s oil, so on that basis he directed Lewis Weeks to Bass Strait as a place that BHP should be looking for oil.
‘As far as I know, that’s the only reason Lewis Weeks suggested they look there. It was a fairly straightforward lecture that “Prof” gave and there was no reason to believe he was embellishing anything. He was saying, “Okay, Lewis, if you want to find oil in Australia this is the place you want to go.” “Prof” did not get any payment for his input but I never heard him bitch about it.’ 19
The Geological Society of Australia states unequivocally, ‘Lewis Weeks, based on his knowledge of the Lakes Entrance Oil Shaft and Carey’s sketch map of anticlines extending into the offshore Gippsland Basin, led BHP to take up exploration acreage.’ Professor Quilty adds, ‘Sam’s ideas on the evolution of the Gippsland Basin were critical, absolutely critical to the exploration of Bass Strait.’ 20 21
Ian McLennan was unaware of Sam Carey’s input when confronted with the decision whether or not to proceed with the oil project in Bass Strait. Once again, the government became BHP’s ace in the hole. The Menzies – McEwen Cabinet agreed to put up half the cost of the exploratory work. Chairman Syme said later, ‘It was like putting your money on a rank outsider. Had the government incentives not been there, we would not have taken it on.’ 22
Serendipity also helped in establishing the organisational framework for the project. Once the early surveys showed that an oil find was possible, BHP needed a partner with expertise in the field. That could only come from one of the major companies, and when the Australians distributed tender documents to them there was a deafening silence.
‘The managing director of Shell Australia visited me in my office,’ McLennan said. ‘He told me he thought we’d be left lamenting and no one would tender. Well, he was wrong.’ 23 The Weeks connection proved valuable. By then, his professional alma mater, Standard Oil, was trading in Australia as Esso Standard Oil (Australia) Limited. 24 McLennan said, ‘I think they had enough faith in Lewis Weeks to say to themselves, “Well, if Lewis thinks this is good, it’s got a fair chance of being good.”’ After extensive surveys in 1962 and further work two years later, negotiations were finally concluded for a 50–50 partnership with Esso in May 1964.
Lewis Weeks had brokered the farm-out deal under which Esso would drill for oil and operate the productive wells, while BHP would pay its share of the operational costs and split the profits. Weeks’s former employer offered him ‘quite a few million dollars’ for his royalty interest but he turned them down.
When state governments threatened to challenge federal jurisdiction over the oilfields – and the consequent distribution of royalties between governments – Prime Minister Menzies once again came to the rescue. According to McLennan, ‘Sir Robert Menzies did a very large number of great things for Australia. This is one of the things he did. There could have been an interminable wrangle but Sir Robert Menzies, as soon as he heard about it, said, “Oh well, this might be a good development – let’s not stand in the light.” He virtually gave the states the rights and we had areas in each of those offshore waters of Tasmania, Victoria and South Australia. It was very largely due to the foresight of Sir Robert Menzies. BHP had zero to do with that. It was his own idea.’ 25
So Esso sailed the Glomar III exploration vessel from the Gulf of Mexico to Bass Strait. While it was in transit, Sam Carey had dinner with Dr W.A. Visser, who had been in charge of Shell’s West Pacific exploration, at the International Geological Congress in Delhi on 15 December 1964. ‘I asked him why he had turned down the Bass Strait invitation, as the aeromagnetic coverage followed by detailed ship-borne seismic-reflection surveys had produced exciting results, with every prospect of major production,’ Carey says. ‘He told me that they had been unsuccessful in a similar-looking prospect, and exploration and production in stormy sea regions was still in development stages. I assured him that he would regret that decision.’ 26
Glomar III spudded in Australia’s first significant offshore well, East Gippsland Shelf-1 (later known as Barracouta-1) on 27 December 1964. The drilling site was 24 kilometres off the Gippsland coast in a water depth of 45 metres. Two months later, it hit gas – a spectacular hole-in-one that almost blew the drill-ship out of the water. 27
The following year, BHP–Esso made a second major gas discovery at the Marlin field, and then the partnership hit the jackpot with the discovery of a colossal oilfield at Kingfish-1 in 1966 (1.2 billion barrels recoverable). John Norgard’s daughter Susan Quail recalls, ‘I was at home one night when Lewis called for Dad to say they’d found oil. It was celebrations all round.’ Other fields were found in quick succession, including Halibut, Dolphin, Perch, Flounder, Tuna, Snapper, Mackerel and Bream, as well as more oil at Barracouta and West Kingfish. 28
Royalties for Bass Strait were split seven per cent to Victoria and four per cent to the federal government. Then, John McEwen as trade-and-industry minister set the industry-wide price at US$3.47 a barrel. At the time, the price for Middle East crude was less than US$2. Altogether, it represented an exceptional deal for BHP.
BHP–Esso anticipated a flow of 350,000 barrels a day, and in one bound Australia had discovered enough crude to make it 70 per cent self-sufficient in oil. 29 The share price reflected Ian McLennan’s faith in Lewis Weeks, topping $25 by the end of November 1968. BHP’s former finance director Geoff Heeley says, ‘Bass Strait was a very fortuitous development – a project which showed some foresight and, yes, it created a change in the whole structure of BHP.’ 30
Weeks’s three-page royalty agreement with BHP–Esso had been drawn up by Paul Temple, an American attorney friend who worked with him at Standard Oil. Weeks agreed to give him 20 per cent of any deal. ‘Paul grumbled,’ Russ Fynmore says, ‘because at the time it was before they had discovered anything, but afterwards that became a fortune.’ 31
Weeks himself was soon earning millions a year from the Bass Strait bonanza. His agreement stipulated that the royalty be paid at the ‘gross wellhead value’ of the oil and gas, without the deduction of any costs or taxes – an incredibly generous arrangement. His new financial status was reflected in the house that he and Anne bought at the very top of Bluewater Hill, overlooking Long Island Sound.
One of his advisers (and a close personal friend) was Sir Howard Beale, former Australian ambassador to the United States. ‘Most of what Lewis Weeks knew about Australia – apart from the geological side of it – he learned from Howard Beale,’ Russ Fynmore says. ‘He really was a very good adviser to Lewis Weeks, including taxation arrangements with the Australian Government.’ 32
For tax purposes in the United States, he invested 1.378 per cent of the royalty in a company called Weeks Natural Resources (later Weeks Petroleum) to engage in oil exploration with the larger oil companies. He also employed James Daniel, a retired Reader’s Digest editor, to compile his memoir from taped interviews. Weeks died on 4 March 1977 before the job had been completed, but his widow, Anne, published it the following year. There is no mention of Professor Carey anywhere in the work, and although many millions were paid in royalties from the Bass Strait oil-and-gas discoveries, he never received a cent.
In the last years of his remarkable life, Weeks was a generous benefactor. He built a new earth-sciences hall at the University of Wisconsin, a new YMCA pavilion at Westport and a new headquarters for the AAPG at Tulsa, Oklahoma. In Australia, he endowed the Lewis G. Weeks Gold Medal, presented each year by the Australian Petroleum Production and Exploration Association to commemorate ‘the contribution to the Australian petroleum industry of Dr Lewis Weeks, who epitomised the purpose of the medal by his pioneering work in Bass Strait’. Its recipients include Professor Eric Rudd (1984), Dave McGarry (1986) – and, ironically, Professor S. Warren Carey (1996).
The early operational work in Bass Strait was difficult and dangerous. Divers laying the pipelines spent seven hours in a decompression chamber for every two on the ocean bed. The huge offshore drilling platforms were built in sections, assembled and hauled into position, where they were supported by 20,000-ton ‘legs’ driven 60 metres into the ocean floor.
The miners lived on the great platforms for weeks at a stretch and were helicoptered back to the mainland on leave. Accidents were commonplace, but in 1968 the country was shocked by a tragedy that took the lives of three visiting journalists. They were swept by a hail of flying metal when a helicopter suddenly dropped on to the platform and its broken rotor blade slashed into them. Hugh Curnow of the Sydney Telegraph was killed instantly; Peter Bourke of the Melbourne Sun News-Pictorial fell 40 metres into the sea after being knocked to the edge of the platform; Noel Buckley, a company PR officer, died later of injuries. Nevertheless, the pioneering work of the BHP–Esso consortium enjoyed wide public and political support.
The Menzies era had ended in 1966, and though McEwen could be relied upon to fly the BHP flag in Cabinet, he too resigned in January 1971. The prime minister of the day, John Gorton, brought a new and somewhat unnerving unpredictability to his dealings with the company. Tradition gave way to personal wilfulness and, at times, caprice. When teamed with Lenox Hewitt as his top adviser, Gorton became a knotty problem for McLennan and his team. Hewitt, a mordant character with the habitual expression of an angry parrot, had begun his career working in BHP’s commercial department many years previously. The experience, it seems, was not recalled with unalloyed pleasure by either party.
McLennan, who had become BHP chairman in 1971, approached Gorton with one of the more remarkable proposals in Australia’s industrial history: to reduce the oil price by a dollar from the McEwen figure to US$2.47, thus cutting directly into BHP’s profits. McLennan’s reasoning was that the McEwen price was designed to make the relatively small Australian producers – such as Moonie and Roma in Queensland – viable entities. It was not designed for the massive flows from Bass Strait. At the time, imported oil was US$2.10 a barrel.
According to McLennan, ‘[Gorton] was most enthusiastic. “That’s the most statesman-like thing I’ve ever heard of,” he said.’ 33 At the end of the discussion, McLennan went to America, only to receive an emergency telephone call from Chairman Colin Syme to say the issue had ‘blown up’ and he’d better return immediately.
‘I found that Mr Gorton had repudiated this arrangement and he wished to have further negotiations. We saw him – and Hewitt – at The Lodge, 34 because Mr Gorton had some fear of leakage taking place. This was a most difficult period indeed. We obviously adopted the attitude that we thought we’d done jolly well in reducing the price by a dollar. Well, it finished up we got virtually import parity for the oil.’
McLennan and Esso’s Norton Belnap did secure an agreement that all the Australian refineries had to use Australian crude; only the finished product could be imported. But it proved to be of little advantage. ‘After the OPEC countries started to put up the price of oil [in 1973], everybody wanted [the lower-priced] Australian crude.’ 35
By then, BHP was having to deal with an entirely new phenomenon at the national level: the Labor Government of Gough Whitlam, which still carried within its ranks hard men wielding the barely concealed baton of nationalisation. Most prominent among them was the long-time member for the Wollongong area, R.F.X. ‘Rex’ Connor, who not only secured the ministry of minerals and energy but Lenox Hewitt as his department’s permanent head.
McLennan was aghast. He had dealt congenially and profitably with state Labor governments over the decades. But Connor quickly became BHP’s bête noire. ‘He never once achieved ministerial status in the state parliament where he was a member for many years,’ McLennan said. In Canberra, however, his formidable bulk, conspiratorial reasoning and uncompromising delivery disarmed Whitlam, who promoted him to high Cabinet office. Indeed, on one occasion when both Whitlam and Deputy Prime Minister Jim Cairns were out of the country, he briefly became acting prime minister.
‘He was, so he said, a great one for Australia developing its own resources,’ McLennan said. ‘I think the real fact of the matter was he was a great one for socialising resources.’ 36
Happily for BHP, Connor’s career crashed in flames when, in pursuit of his ‘socialising’ agenda, he attempted to borrow $400 million in petro-dollars using a shady Pakistani go-between, Tirath Khemlani, after Whitlam had revoked his authority to do so. Hewitt’s public-service career effectively flamed out at the same time.
Moreover, the changing of the guard in the Labor Party would usher in a somewhat surprising champion of the company’s cause in Paul John Keating, who succeeded Connor in opposition as the party’s spokesman for minerals and energy. ‘Primarily the business I’m in, and have always been in, is the nation-building business,’ Keating says.
He is sitting at a beautifully polished antique table in his Potts Point, Sydney, office in 2008. He is dressed in olive corduroys, an open-necked shirt and casual jacket with patched leather elbows. ‘I was always sympathetic to BHP,’ he says, ‘if only because anyone who can build something that large – any group – its interests require consideration. And they always had consideration from me.’
He recalls his first interaction with the company: ‘I had a call one Saturday morning from Ian McLennan – it must have been about 1977 or ’78 – saying that BHP had had an approach from the Burmah Oil company [for BHP] to take over their concessions on the North-West Shelf ... it used to be called Woodside Burma or Burma Woodside ... and what attitude would I take, because he said to get the project up it would take the life of a number of governments; so, representing the Australian Labor Party, what attitude would I take to BHP acquiring an interest?
‘I said, “Well, I would encourage you to acquire it.”
‘He said, “I didn’t expect that answer.”
‘I said, “I would encourage you to acquire it because I think this is the last of the Mohicans.” He asked me what I meant by that, and I said, “Well, the increases in oil prices to US$60–US$70 a barrel in ’73–’74, the OPEC-induced increases, lifted the price of all hydrocarbons. Therefore, if we could get the Japanese interested to take contracts, then we should take it. Because if it’s a cartel holding up the prices, then inevitably the price will fall and then the chances of us being able to pick up a contract that large – six million tonnes, three trains of gas at two million tonnes each – would be slim.”
‘So I said, “You can say that this project would have the support of the opposition.” So then, that gave him a fair degree of comfort and I think the kind of encouragement to go ahead and take the Burma interest.’
When they met shortly afterwards, Keating offered to take the matter further. ‘I said, “If you like – because this is a really long project – I will put support for it in the Labor Party platform.”’ Keating says. ‘So at the next meeting of the national conference of the Labor Party, either 1977 or 1979, I put an express provision in that we would support the development of the North-West Shelf gas field. So that meant we had a policy rather than a wink from some shadow spokesman’s eye.’ 37
From the perspective of 1979, McLennan said, ‘There are three major dates in the history of the company. The first was when Broken Hill was found; the second was when the decision was made to start in steel; and the third was when it decided to go into the oil business. The entry into oil and gas had a most major effect on the company. It’s made it possible to develop in all sorts of other ways. It’s kept it as the largest company in Australia.’ 38