Beetaloo Basin fracking plan: gas companies linked to tax secrecy havens and Liberal party, inquiry told

·5-min read
<span>Photograph: Loren Elliott/Reuters</span>
Photograph: Loren Elliott/Reuters

The gas companies seeking to frack the Beetaloo Basin have been accused of sharing links to tax secrecy jurisdictions, the Liberal party and Russian plutocrats, a Senate inquiry has heard.

Opening up the Northern Territory to fracking is a key part of the Morrison government’s “gas-led recovery”, and the commonwealth is incentivising exploration through the $50m Beetaloo cooperative drilling program.

Earlier this month, the first three grants from that program were given to a subsidiary of Empire Energy, a company chaired by frequent Liberal donor Paul Espie. Espie is the also chair of the Liberal-aligned Menzies Research Centre and has been described by Liberal senator Jane Hume as a doyen of the party.

A Senate inquiry into fracking in the Beetaloo Basin on Wednesday heard that Empire Energy was given the grants, worth $21m, to drill at three sites in the Beetaloo, despite still waiting on the necessary environmental approvals from the Northern Territory government.

Related: Coalition granted $21m to Liberal party donor to frack Beetaloo Basin

The inquiry also heard that Empire executives met with the federal energy minister, Angus Taylor, on 10 March, prior to the announcement of the grant guidelines later that month.

“From memory, I may have told the minister that I believed it was a good policy and that it might incentivise an acceleration of activity,” Empire’s managing director, Alex Underwood, said. “But I can assure you there was no mention of seeking any kind of influence over the process.”

Asked by Greens senator Sarah Hanson-Young whether he believed Espie’s connections with the Liberal party helped the company obtain the grants, Underwood responded: “No, I do not. They played no role whatsoever in our applications for these grants. We follow due and proper process at all times.”

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In October last year, the company invited Taylor to visit its first Beetaloo well, paying for a charter flight and a dinner. Espie was on the charter flight, the inquiry heard.

Empire was also asked about one of its larger shareholders, a company named Global Energy and Resources Development. The company was registered in the Caribbean and associated with (Michael) Tang Yan Tian, who the inquiry heard is the subject of an arrest warrant in Hong Kong relating to alleged insider trading.

Underwood said Empire, which is publicly-listed, did not have a good relationship with Global Energy and Resources Development.

“I have no control over whether or not that entity chooses to hold shares in our company,” he said.

Earlier, the inquiry heard about two other companies that are seeking to exploit the Beetaloo Basin: Sweetpea Petroleum and Falcon Oil and Gas Australia.

Both companies have been investigated by the not-for-profit group Publish What You Pay Australia.

It found that a Russian plutocrat and ally of Vladimir Putin, Viktor Vekselberg, held a 16% stake in Falcon’s parent company. One of its subsidiaries is registered in Delaware, a known tax secrecy jurisdiction.

The group’s spokesman, Clancy Moore, told the inquiry: “I would strongly urge the commonwealth not to be giving public money to companies with opaque ownership and worrying concerns around the ultimate owners, such as Falcon Oil and Gas.”

Related: ‘The living heart of Australia’: fracking plans threaten fragile channel country

Sweetpea Petroleum, the inquiry heard, appeared to be owned by a US investment firm that had recently created a shell company, Longview Petroleum LLC, in Delaware.

Parts of the corporate structure were registered to a two-story yellow brick building in downtown Wilmington, which is home to more than 285,000 companies, the inquiry heard.

Moore told the inquiry that Sweetpea’s parent company appeared not to have paid a small tax bill in Delaware.

“I would take the view that a company whose parent company appears not able to pay the few hundreds of dollars of tax to remain of good standing in Delaware should not be receiving valuable government revenue under the program at this stage,” he said.

Former Darwin lord mayor and Protect Country Alliance spokesman Graeme Sawyer told the inquiry that the industry had effectively captured the territory government.

“A former NT chief minister is now a consultant for the oil and gas industry, key government senior staff are people from the industry, and key people from the bureaucracy and advisory positions leave to work in the industry,” he said. “The revolving door is in full operation in the NT.”

Sawyer also said there was no informed consent from traditional owners in the area.

“There is no informed consent about fracking and the family groups that I have spoken to at length have recently reinforced their opposition at a meeting in Darwin in June. There was about 45 traditional owners there and I’d really encourage you to talk to them in detail about that notion of informed consent.”

Empire said it went to great lengths to ensure informed consent was obtained from traditional owners. It also said its projects would deliver significant economic benefits to the local region.

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