Introduction

Reg Nelson initially studied to be an electrical engineer at the University of Adelaide but, after completion in 1967 thought, ''I don't want to do this for the rest of my life.'' This was around the time of the big nickel boom, so he did a degree with geology, mathematics and physics as majors and became a geophysicist. ''Initially, I worked in the minerals industry and then fairly quickly ended up running seismic crews up in the Northern Territory and South Australia. I've actually probably spent 2/3 of my career in the oil and gas industry and about 1/3 in the minerals industry'', he explained. ''It's probably the survival instinct, when oil and gas has been down and minerals has been up you jump onto the next ice-berg and keep walking.''

Career

Although Reg didn't get involved with Beach until 1992, he knew the company's founder well. ''Reg Sprigg and I were close friends, we worked on many things during the years'', he said. ''I suppose I have had a lot of involvement with Beach, but initially not directly, mainly through my association with Reg Sprigg.''

In the early part of his career Reg worked as a consultant for several different companies, including Mount Isa Mines, Shell, Getty Oil and Delhi Minerals. In the early 1980s he became Chief Geophysicist for the Mines Department in Adelaide – a position he occupied for most of the 1980s. ''I went out again in private consultancy in 1989 and then I was offered a contract as Director of Mineral Development in the Government here'', he recalled, adding that he worked there until he joined Beach Petroleum in 1992.

''I've been primarily with Beach ever since, but I have also been able to be involved in a number of other companies as a director.'' One of these companies is Ramelius Resources Limited, ''which started as a spin-off of some of the mineral interests that Beach had.'' According to Reg, this company's now making very good progress and should have its first gold mine operating soon. ''I've kept an interest in a very wide variety of things, from minerals and petroleum to advanced fuels technologies'', he said.

Reg became a Director at Beach in 1992, the year after the Independent Resources Ltd fraud was uncovered. ''[As a Director of the company] I acted as an ‘anchorman' during the fraud trial and attended court every day of the trial, reviewed its progress with our lawyers and reported back to the board'', he explained. ''Subsequently, I was heavily involved in unravelling the complex web of cross-company shareholdings and debts in the companies that Beach gained control of following its successful judgement.'' Reg was then asked to become Chief Executive Officer in 1995, the same year the company moved back to Adelaide.

APPEA

Reg Nelson was elected Councillor of APPEA in 2000 and became Chairman in October 2004.

Reg, who has been involved in both PESA and ASEG, and the US-based SEG (which awarded him life membership in 1989), believes these organisations ''are probably the prime technical associations that bind our industry together'', but that APPEA is equally as important because it brings together all the technical, commercial, legal and corporate aspects of the industry. ''I think APPEA covers the broader spectrum and then brings all these things together'', he said. ''I think APPEA provides an overall blending of those, and that's why it's important for the APPEA Conference every year to bring people from all those disciplines together. We're all in this together. Energy is the crucial element of this century and perhaps this millennium, and unless we understand that we're not going to work it out.''

Despite a common perception that APPEA is dominated by larger companies and could represent smaller companies better, Reg believes there is a strong recognition in APPEA of the importance of smaller companies for the future. ''Now it's very easy for some of the smaller companies to say: APPEA doesn't represent us. I think APPEA is paying a lot of attention to them; I think the fact that I'm there as Chairman gives a good indication of that'', he said. He explained that it's not easy dealing with all interests across the spectrum of large international companies and smaller explorers. ''But there are some fundamental interests that are common to all – and we are working hard to come up with outcomes that will benefit the smaller explorers.'' One of the main issues in the last few years has been the tax system, which he soon hopes will ''get more detailed consideration by Government.'' He said that many of the successful capital raisings (in Australia) in the last year have tended more and more to be by companies exploring outside Australia. ''Australia is by and large gas prone; that is, there's a higher probability of finding gas rather than oil.''

''You're more likely to find large amounts of gas quite a distance away from markets and from pipelines, and therefore many such discoveries can remain undeveloped for years and are uneconomic. So the issues for Australia are the prospectivity, the commodities, the dwindling reserves of liquid fuels … and the difference then comes down to the fiscal regimes'', he explained. Australia's fiscal regime is ''middle of the road'' compared to, for example, Indonesia and Malaysia, but there are other countries more prospective than Australia and which offer overall better fiscal returns. Reg said these are issues the Australian Government needs to deal with, especially when it comes to giving incentives to the smaller, native Australian companies. ''Do you want people to have jobs in Australia and to build up our national skills, or do you want them to disappear overseas?'', he asked. ''That is a very real issue. It's something that goes beyond the immediate crisis, it's building skills for the future.''

Skills shortage

“The skills shortage affects the industry, but the real skills shortage is emerging in government – certainly in the Commonwealth Government, but much more so in the State Governments. They are losing good people with experience, mostly through retirements”, explained Reg. “What we have enjoyed in Australia for the past 40 years is good people in government with a lot of skills, a lot of experience and a depth of understanding of the petroleum industry. They have always been the anchor for the industry. Certainly that’s been true for the Commonwealth and organisations such as Geoscience Australia, but among the States none better so than in South Australia.”

“South Australia has for many years had a very good department. It still has and, even though apart from the Cooper/Eromanga, South Australia may not be perceived to be as prospective as some of the other states, it leads many of them by a country mile in terms of being proactive”, he stated, citing Native Title issues as a prime example. He said government has to realise that it is losing good people and that it needs to have a better geoscientific base. “From that base what we need to do is to get a relationship between government and industry where you work together. You come from different sides, but you’re working for mutual benefit, a mutual benefit that will create national wealth”, stated Reg, and called for an industry-government cooperation including all branches of government – Commonwealth and State – including environmental and fiscal sides.

Reg sees the skills shortage as a long term issue that has to be addressed now. “We need to work on various levels. We need to encourage more apprenticeships, because the skills shortage goes across the full spectrum: trades, skilled labour, professionals in the geoscientific and engineering areas”, he suggested. “I think the paramount problem in the 21st century is going to be energy. Not just oil and gas, although that’s the most crucial thing at the moment, but overall energy requirements – it is therefore important for Governments to start focusing on these issues at a national and global level.”

Reg sees the rather negative image of the industry in the general community as one of the issues affecting the skills shortage, but he said the industry is doing its best to change that. “You have to contend with the entrenched perceptions about fossil fuels and how bad they are perceived to be for the environment. I think the industry has a tremendous track record in terms of environmental management”, he stated. “I can honestly say I have myself been at the forefront of that and the founder of this company, Reg Sprigg, was probably one of the greatest environmentalists of his era.” Reg Nelson feels a lot of the people who have entered the industry have done so because they like the outdoors and nature: “You can combine scientific activities with nature.”

“There is a lot of negative attitude out there and my particular concern is that it’s not founded on science, it’s founded on emotion and distorted allegations”, he stressed. “How we can reverse that I don’t know. Certainly not until the community at large starts to get back to saying: ‘Let’s look at facts, let’s look at scientific principles.’” Reg said that media coverage can also be unfair at times, adding to the bad image. “I think that one of the prime problems is that comments are taken totally out of context”, he said. “And unless there is better understanding in the media, I’m not sure how you overcome that.”

Government initiatives

Referring to John Begg’s suggestion at this year’s APPEA Conference that all areas outside producing ones should be considered frontier, Reg said, “I think John Begg has some good points. I do think the frontier initiative is a very good one, but it’s only the first step”. According to Reg, the fact that it only applies to offshore waters, which are usually a lot more expensive than small companies can afford, must be addressed: “Somehow you need to deal with this in a national context; national meaning that you need to deal with the onshore aspects as well.” That is why he advocates closer cooperation with both the Commonwealth and the States, and a process that will lead to “good and imaginative thinking from everyone – for the good of everyone.”

Reg explained that he doesn’t necessarily criticise the PRRT and thinks it has been a pretty good system, but that it needs to be put into context – citing Beach as a prime example, where its good discoveries onshore Australia have enabled the company to move offshore.

Conclusion

“Where do we go next? What we have to balance is the prospect of being in Australia [versus elsewhere]: the fact that Australia is more gas prone than oil prone, and that gas prices are low in Australia; although it has a moderate fiscal regime. Then we look elsewhere and say: Well, the fiscal regime in that country is quite similar, but the prospectivity is greater. Where would we go? We’re a business, we have to make money for our shareholders”, he stated. “And that is what the government has to address. That is why I keep urging everyone to get together, because if we all understand the problems we can come up with the right solutions … It’s plain common sense.”

The Managing Director hopes Beach Petroleum can grow larger without becoming too impersonal. “I think the big challenge is to become bigger, but not to become bureaucratic. If we can keep the great group of people we have, or at least the culture that we have here, where everyone is happy … The greatest achievement from my point of view would be growing without destroying that”, said Reg. “It’s what makes work fun!”

On A Personal Note

Reg was born on the border of Scotland and England but left the UK at the age of three. He has lived most of his life in Adelaide, but grew up in a small village north of Kuala Lumpur in Malaysia where his dad was a lecturer in a school called Malay College. “It was a wonderful time. My sister and I were the only European kids in the place, so we grew up with Indians, Chinese and Malays – a very cosmopolitan upbringing”, he recalled. “Then when our parents decided I had to go to a formal school, when I was probably 12 or 13, we moved down to Australia and I went through university in Adelaide.”

“I’ve been involved in farming for most of my life”, Reg said, when asked about interests outside work. For at least 20 years he ran a farm in Strathalbyn, 50 km out of Adelaide. “I suppose one of the reasons I remained in Adelaide, as a base, is the fact that the farm was not too far from town. I would drive in, work and go back to the farm – at least when not on assignment somewhere else.” His career has, however, encompassed working in the USA, the Middle East, China and even North Korea. He met his wife through their interest in horses and the couple now have two sons aged 31 and 33. Reg’s other hobbies and interests include music, reading and “getting outdoors as much as possible.”