PRESS DIGEST-Australian Business News - April 11 06:48, Monday, 11 April 2005
(Compiled for Reuters by Media Monitors)
THE AUSTRALIAN FINANCIAL REVIEW (www.afr.com)
The Australian Petroleum Production and Exploration Association (APPEA) has warned that high global oil prices are making it difficult for the Australian petroleum industry to secure policy reforms necessary to stimulate new exploration and more rapid development of known oil and gas fields. APPEA chairman, Reg Nelson, said rising retail petrol prices had generated 'negative perceptions' of oil and gas companies and made it hard for the industry to gain support for exploration and development incentives. Page 11.
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Virgin Blue has awarded its A$100 million heavy maintenance contract to Air New Zealand , dashing expectations it would establish a 500 employee-strong base in Australia. Virgin Blue is understood to have signed a three-year deal with AirNZ for all major maintenance work, including its regular 18-month C checks and the more intensive five-year D checks, which cost approximately A$1 million per plane. Page 11.
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A parliamentary inquiry in the United Kingdom (UK) has criticised the structure of Macquarie Infrastructure Group's UK toll road investment and dampened expectations for another privately owned and operated road. The House of Commons' transport committee raised concerns about the lack of control the British Government had over the pricing of the M6 Toll. The committee findings echoed the concerns of Canada's Ontario provincial government, which unsuccessfully pursued MIG through the Canadian court system in a bid to gain the right to dictate tolls on Highway 407. Page 12.
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The Fonterra board will meet tomorrow to finalise the strategy for its takeover battle with San Miguel Corp. for National Foods . Fonterra is expected to announce an extension of its bid today to give itself more time to consider whether to try and beat San Miguel's A$6.40-a-share cash offer. National Foods chairman, David Crawford, announced on Friday that all of the directors of the company intended to accept the San Miguel offer in the absence of a superior proposal. Page 12.
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Hancock Prospecting, the private company of Australia's richest woman, Gina Rinehart, is believed to be in negotiations with China's largest steel maker, Baosteel <600019.SS>, to gain its support for the A$2 billion Hope Downs iron ore project in Western Australia. Baosteel is understood to be acting as lead negotiator in the discussion on behalf of a number of Chinese steel mills and trading houses. Page 13.
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THE AUSTRALIAN (www.theaustralian.news.com.au)
The mining industry has outlined a A$3.2 billion proposal for improving infrastructure at the coal port of Dalrymple Bay, Queensland, in order to increase exports from the port by 60 per cent. Macarthur Coal managing director, Ken Talbot, said about 50 ships were currently waiting out at sea in Dalrymple Bay due to blockages at the port. Mr Talbot said most miners were convinced there would be long-term demand for Australian coal and that prices would remain at current high levels. Page 25.
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Federal Resources Minister, Ian Macfarlane, will this week meet his West Australian counterpart, Alan Carpenter, to resolve a dispute between Korean woodchip exporter, Hansol PI, and the WA Government over coal shipments from Bunbury Port. A spokeswoman for Mr Macfarlane said the Federal Government had been forced to intervene in the dispute because it was putting in doubt elements of Australia's trade relationships with South Korea. Page 25.
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Westpac Bank chief executive, David Morgan, has revealed a shake-up in the retail side of the bank following a fall-off in home loans. Mr Morgan said Westpac had instituted 'some management changes and some restructuring in retail' to gain a better focus on its mortgages businesses. Mr Morgan also indicated Westpac intended to largely avoid the riskier low-documentation loan market. Page 26.
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Ray Williams and Rodney Adler could become the first directors of HIH Insurance to go to jail this week, with both facing sentencing decisions in the New South Wales Supreme Court. Mr Adler will receive his sentence on Thursday, with Mr Williams to be sentenced on Friday. Former senior HIH executive, William Howard, received a three-year jail term in 2003 on two counts of criminal misconduct, but had his sentence suspended after agreeing to assist the investigation into the collapse of HIH. Page 27.
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THE SYDNEY MORNING HERALD (www.smh.com.au)
There is increasing speculation Coles Myer is building a stake in Foodland Associated in readiness for an attempt to take over the Perth-based supermarket chain's New Zealand business. Analysts said UBS, which has assisted Coles Myer in previous acquisitions, has been accumulating stock in Foodland for a number of weeks. FW Holst retail analyst, David Spry, said Foodland controlled around 40 per cent of the New Zealand market and would be a strategic acquisition for Coles Myer or rival retailer, Woolworths. Page 32.
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AMP Capital Investors chief economist, Shane Oliver, yesterday predicted the Australian sharemarket would continue to move higher after the correction in March, with the valuation of Australian stocks remaining favourable and the grossed-up dividend yield attractive compared with other investment alternatives. Dr Oliver said the rise would be slower than last year, but 'the China story supporting our resources shares is not going to go away.' Page 33.
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Hardman Resources chief executive, Simon Potter, yesterday announced the company had initiated legal action against its Mauritania offshore oil joint venture partner, Woodside Petroleum, in relation to the recovery of costs. Mr Potter said Hardman had taken the action 'reluctantly' to 'break a deadlock,' but that the action was 'a one-off situation' that would not affect the 'good' working relationship Hardman 'will continue to enjoy' with Woodside. Page 34.
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Organisation of Petroleum Exporting Countries (OPEC) acting general secretary, Adnan Shihab-Eldin, yesterday told the Australian Broadcasting Corporation's Inside Business program that OPEC believed a 'fear factor' was driving up the price of oil, with prices set to reach up to US$105-a-barrel. Mr Shihab-Eldin said OPEC was increasing its spare production capacity and wanted to bring prices down 'to a moderate level.' Page 34.
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THE AGE (www.theage.com.au)
Hardman Resources has launched legal action against its partner Woodside Petroleum in the West Australian Supreme Court over costs in their Mauritania offshore oil venture. Hardman said its subsidiary, Hardman Chinguetti Production, had not been able to reach agreement with Woodside Mauritania despite 'considerable discussion and correspondence' since late 2003. Hardman is seeking A$23.5 million in a dispute over how costs relating to the Mauritania venture should be recovered. Page 10.
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A Victorian Government study has found up to A$300 million was stripped from the state's automotive parts industry in 2003-04 due to pressure from carmakers to reduce prices, free trade agreements and the strong Australian dollar. The amount is equal to five per cent of the industry's A$6 billion revenue, with the study indicating the figure will rise to 8.4 per cent next year. Page 10.
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Australian biotechnology companies are experiencing falling shareprices as investors reduce their exposure to risky stocks amid concerns about the nation's economic outlook. eG Capital said Australian biotech companies had well underperformed on the Australian Stock Exchange's Small Ordinaries Index in the past six months. Australian Cancer Technology saw its shareprice fall 45 per cent in the first quarter, with Occupational Medical Innovations' shareprice down 44 per cent and Clover Corporation's stock down 40 per cent. Page 11.
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The video game industry is expected to overtake the CD music industry in Australia this year, with video game turnover predicted to be worth A$850 million. Electronic Arts Australia general manager, Ryan Jones, said the gaming market was starting to mature, with women now accounting for 55 per cent of all game buyers and the average consumer age reaching the 25-28 years bracket. Page 11. --
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