Workforce ‘reduction’ as fewer ships call in

The Port of Broome is preparing to reduce its workforce as oil and gas activities in the offshore Browse Basin reduce significantly.

Major players Shell and Inpex are moving from exploration and drilling to production meaning far fewer ships calling to Broome for equipment and supplies.

Kimberley Ports Authority chief executive Kevin Schellack said the number of vessels servicing the industry was expected to slide from an average 1200 per year to about 700 – putting a huge dent in its main revenue stream.

Mr Schellack said port earnings would subsequently drop by about 70 per cent from 2016.

As a result, he said there would be a “steady drop” in the number of casual staff from its total workforce of 70 people.

“With that 70 per cent reduction it is very challenging for the port and yes we are looking to reduce our numbers,” he said.

“The casuals get work when there is sufficient work so our casual numbers will reduce but it is not like making a permanent person redundant, it is reducing the need for casuals.”

Toll Mermaid Logistics in Broome also supports the Browse Basin drilling program and employs about 39 staff.

Base manager Brian Philp said the company was currently assessing its options in relation to potential staff reductions.

Mr Schellack said the port was on track to break even this year but would need to tap into reserves “for its survival” over the next three years because of its reliance on the oil and gas industry.

He predicted a three-year lull until Woodside makes its final investment decision in the second half of 2016 on using Prelude floating liquefied natural gas (FLNG) technology to commercialise substantial resources in the Browse, about 420km north of Broome.

He said it was believed there would be a three-year ramp-up period from 2019 if the oil and gas giant went ahead.

“Woodside is talking about three Preludes so you can imagine the growth potential three to four years out is going to be very, very large,” Mr Schellack said.

“It may even require the extending of the Broome wharf facility if the outcome of feasibility studies shows they need a dedicated facility versus what is there now.”

Mr Schellack said establishing a frequent and direct Broome-Asia containerised shipping link and expanding live cattle exports all year round were important diversification possibilities to “future proof” the port.

He said the abattoir being built by pastoralist Jack Burton between Broome and Derby could provide a regular export/import shipping route overseas.

“It is very important for us to diversify and look at the fact we are going to have half the number of ships than we did this year next financial year and we need to look for the opportunity of growth in areas that have not been explored to their fullest,” he said.

“With the emerging Jack Burton abattoir there is going to be big demand for imported cartons that will be used for the packing of beef and then the export of that product and hopefully his target is overseas.

“If it is overseas then there is a good opportunity to tap into either existing shipping services coming into Australia or at least having the ability to attract a shipping service, whether it is Singapore or Indonesia.”