Fed: Woodside stays in local hands

AAP General News (Australia)
04-23-2001
Fed: Woodside stays in local hands

By James Grubel, Chief Political Correspondent

CANBERRA, April 23 AAP - The coalition demonstrated it was serious about trying to
win the next election today when it knocked back the hostile foreign takeover of resources
giant Woodside Petroleum.

Treasurer Peter Costello today announced he had rejected the $10 billion bid from Royal
Dutch/Shell - a decision he said was squarely in the public interest.

What he didn't say was that the decision was also solidly in the government's political
interests.

The financial markets marked down the Australian dollar when the decision was announced,
clearly anxious that the government had turned its back on foreign investment.

But the decision is likely to be welcomed by voters in marginal seats, as well as dozens
of Liberal MPs who will be fighting for survival at the next election.

Mr Costello said he had little choice but to knock back the takeover, because he could
not impose enforceable conditions on the new owners.

He had little political choice either.

Woodside operates the giant North West Shelf oil and gas project, a project Mr Costello
today hailed as one of Australia's great resources.

A hostile foreign takeover would have become a powerful image for political opponents
such as Pauline Hanson, who would have tapped into the nationalistic sentiment surrounding
Woodside.

And more than a dozen Liberal MPs had lobbied hard against the takeover and any move
which could be interpreted as selling off the farm.

They had warned Mr Costello that voters would not take kindly to more of Australia's
great resources being sold to foreign investors.

Mr Costello played down the political significance of the decision today, and said
even the Foreign Investment Review Board could not make a firm decision on the takeover.

But he also move to appease the financial markets by saying Australia still welcomed
foreign investment.

The Woodside decision was based only on the Shell bid, he said, and all other foreign
investment decisions would be taken on merit.

That leaves some hope for other major takeovers still in the pipeline, including the
SingTel offer for phone company Cable and Wireless Optus.

But the finance markets are yet to be convinced.

The Australian dollar lost 1.3 US cents after the Woodside decision, while the stock
market's all ordinaries index fell 12.7 points shortly after Mr Costello's announcement.

AAP jg/mo

KEYWORD: WOODSIDE (ANALYSIS)

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