François Romanet – National President; Brian Lorigan – Queensland President, French Australian Chamber of Commerce and Industry (FACCI), Australia
François Romanet (FR) and Brian Lorigan (BL) of the French Australian Chamber of Commerce and Industry (FACCI) highlight the importance of trade relations between the two nations, the factors that make Australia such a favorable investment destination, and the value that French companies are providing across the oil and gas sector.
There’s clearly been a longstanding relationship between France and Australia, especially considering that the FACCI was established well over a century ago. Where do trade relations between the two countries stand today, and how does Australia stand out among the other French chambers located around the world?
FR: Set up in 1899, we are one of the oldest French chambers in the world, allowing us to develop a rather unique perspective on the way the market works and operates in this country. Approximately 600 French companies have established a presence in Australia -creating 70,000 direct jobs and generating USD 14.5 billion in 2014. Within France’s largest companies quoted on the stock exchange, the CAC40, 37 out of 40 companies have operations in Australia, which alone demonstrates the level of interest that France has in the country.
The role of the chamber is to help French companies understand the Australian market, and vice-versa. Oil and gas has been one of the biggest areas of development between the two nations up until now, and into the future. That’s also the same for Australian companies looking to discover the French market – it’s a two-way street. French companies are part of the full oil and gas ecosystem – spanning E&P, midstream, downstream, freight, verification, and engineering. They have the added value and expertise to offer a full range of services.
The Chamber is part of a recently established initiative called Team France, a collective hub that comprises services of the French embassy, Business France (French trade commission), FACCI, and the French Trade Advisors (CCEF). This initiative represents the capacity of the French to collaborate and introduce every single component that France has to offer – we are more effective, more efficient, and appeal to a much broader range of companies as a result. Of course, FACCI is rather unique in this initiative, as we have a federal board of high profile companies and advisors that give us an opinion and insights into the market. We also have offices in Western Australia, Queensland, Canberra, Sydney, and Melbourne, and as such, have the capacity to represent French companies all across Australia.
From your perspective, what makes Australia such an ideal investment destination for French companies?
FR: Australia is perceived as one of the most profitable markets for French companies, once the dynamics are properly understood. We don’t know any French company that has performed the necessary due diligence to set up operations in Australia and ended up unsuccessful. Many of the CEOs that come here often ask why they didn’t come sooner – which is rather unusual given that the international spotlight is focused on emerging markets like China or India. Although the Australian market is relatively small in scale, it’s still ripe with opportunities – especially in the oil and gas industry. We’ve seen the sheer amount of investment that has poured into this sector over the last decade, and the sector will continue to see ongoing investment moving forward.
The Australian economy is also quite liberal in nature. As stated by the prime minister a few years ago, “Australia is always open for business.” It’s easy to set up a company, acquire financing, and recruit skilled labor with superior levels of technical expertise. Australia is also the only country in the world to have 25 years of uninterrupted economic growth. Essentially, Australia’s progressive business climate makes it a fantastic place to invest – ranking as the 10th most favorable country worldwide to start a business.
Additionally, one of the country’s most valuable characteristics is its proximity to Asia. Australia has signed several free trade agreements with countries such as China, Japan, Korea, and India – acting as an effective springboard to penetrate key Asian markets.
Furthermore, the Australian government has identified five priority sectors: advanced manufacturing, agribusiness, pharmaceuticals, mining, and natural resources. Any company working in any of those five sectors has access to valuable information, budgets, grants, and subsidies that help give even more appeal to the Australian market.
Furthermore, France and Australia have never been in such a honeymoon period. The two nations can actually relate to each other in many respects – sharing many common values and ideas. This has, over time, created a mutually supportive and understanding relationship between France and Australia, which will likely continue into the future.
On the flipside, perhaps you can touch upon some of the barriers and challenges in terms of local business?
FR: We don’t see any difficulties in entering the Australian market. The key question is one of whether or not companies understand the Australia picture before entering the country; such as the way the market functions, how investments are made, planning, and cultural practices. If you have the right product, there should be no issue in generating the first contract – as evidenced by the growth and success that French companies have had here so far.
What services or areas of the oil and gas sector do you see French companies getting most actively involved in?
FR: From my perspective, Australia has massively invested in capacity over the last 10 to 15 years all over the country. So, now we’re moving from the construction phase and into production and utilization of those capital assets – enabling the nation’s ambitions of becoming the number one LNG exporter by 2020. Based on my discussions with many French companies, the cyclical dynamics of the industry will soon come into play – yielding another phase of investment, and subsequently production.
Regarding the French involvement, we have many companies involved in the oil and gas sector. To name a few: Total for E&P, and most notably their involvement in the Gladstone LNG project; Technip and Schlumberger for engineering; Bureau Veritas for certifications; Alstom for gas turbines; Alcatel Lucent for optical fiber networks; Schneider Electric for energy management and automation; Thales and Safran for transport infrastructure; and SDV for logistics. When you look at what France is bringing to Australia’s oil and gas industry, it’s simply amazing. That’s really the privilege of being French in Australia; you can address all the sectors thanks to French companies.
BL: Starting with the large investments and very large global players, Total is investing over USD 15 billion in Australia over the six years to 2017, primarily in upstream exploration and LNG plants. Its investments in Queensland include GLNG, a joint venture with a local operator and international partners, and in onshore exploration in the South Georgina Basins with four permits across Queensland and the Northern Territory in a joint venture with a Brisbane-based explorer. They are also a 30 percent investor in the Ichthys project in the Northern Territory, which consists of offshore fields with onshore processing, and has interests in a number of exploration permits off the northwest coast of Australia. In addition to Total, Engie, formerly branded as GDF Suez, is working with an Australian operator to develop resources in the Bonaparte Basin through floating LNG and the company already operates a number of gas-fired power stations in Australia.
From a project life cycle point of view, the owners are bringing the investments, technical know-how, and markets, and alongside them are service companies / technical experts such as Technip and Schlumberger—two world renowned French engineering firms. Across the design, construction and operating stages, there are also companies such as Veolia, designing and operating produced water treatment facilities and providing upstream field services, and Spiecapag, which is part of the larger Vinci group, installing gas pipelines in Queensland, Victoria and Western Australia, as well as constructing the export pipeline for Esso’s Papua New Guinea LNG project. Beyond that, there are several joint ventures such as on the Wheatstone LNG project in Western Australia, where EV LNG is delivering LNG storage tanks. These are just examples of some of the bigger players, companies that truly exhibit the scale and strength of French industry, without mentioning the many smaller companies who provide innovative solutions to the industry.
The French are traditionally strong at engineering across a multitude of specialties – French engineering is something that I’ve always admired, and engineering backgrounds are highly respected in most French companies. The innovation that comes from these companies is one of the biggest drivers of French value in Australia. The French have a reputation for looking at the challenges and offering innovative and tailored solutions to optimize financial and production outcomes, while also minimizing risks. Those are the kind of successes that that the industry needs, and those that we need to celebrate with French businesses in the oil and gas industry.
What type of initiatives is the chamber pursuing to advance the interests of its members?
FR: The real role of the chamber is to connect French companies between themselves and local businesses, and also with key government stakeholders, essentially showing the Australian market what value the French can bring to the table. To do that, we’ve been participating in the AOG conference for the last three years. Next year in April, LNG 18, the world’s largest conference and exhibition on LNG, will be taking place in Perth. FACCI will have at least 26 member companies with booths during the event – spanning 450 sq meters of floor space – so all the big players will be there. We will also be organizing seminars and networking events during the three days of the conference, and are expecting to have all the global CEOs of major French companies. As a chamber, we want to create a collective body that’s truly representative of what the French can offer customers in Australia.
In addition, every year we organize a business forum dedicated to specific topics. This year, the theme was “Smart Cities,” which attracted over 200 people and 57 companies. Next year, we’re working on innovation as the underlying theme—which very much overlaps with the needs of the oil and gas sector. This will take place in Sydney on May 19, 2016.
BL: Oil and gas is clearly important for Australia as an important generator of wealth for the country, and not just at the national level, but also for the states. Most of the royalties for resource exploitation goes towards state income – in turn funding crucial programs that bolster the welfare of Australian citizens in each respective state. This is, in part, why we’ve been supporting a growing number of events spanning the large conferences such as LNG 18, AOG and APPEA, and complimenting them with our own, smaller, in-house conference series. These industry conference series allow our members both small and large to meet senior executives, politicians and bureaucrats, and engage with other suppliers or contactors – ultimately opening up new opportunities.
Do you have any final messages for our readers on behalf of the FACCI?
FR: The message is that French companies are bringing an unparalleled level of added value to Australia. We’re not just selling products, but also facilitating professional development and skills and technology transfer – signifying a true, bi-lateral partnership, as opposed to a one-way street. And that’s ingrained into the French DNA. When we invest somewhere, we don’t only see a market of business opportunities, but a destination to enact positive change and provide long-term value – as highlighted by the longstanding presence of French companies in this country.