Ten years ago ...
ABC Stateline 3 April 2009
AIRLIE WARD, PRESENTER: Mining and minerals have again become a huge part of Tasmania's economy in recent years. But one thing that's never been found here is oil.
The company Great South Land Minerals arrived more than a decade ago with black gold and big riches on its mind. Since then, it's built a loyal band of local and overseas investors, but hasn't produced any oil or gas.
Great South Land's oil rig arrived in Tasmania's central highlands three months ago. Rowan Dix took a look at this enigmatic operation.
ROWAN DIX, REPORTER: It's a symbol of boundless wealth, the driver of modern industry, the stuff overnight fortunes are made of and more recently, condemned for putting the planet in peril. But a viable source of oil's never been found in Tasmania.
CLIVE BURRETT, CHIEF GEOLOGIST: I have confidence. That's why I left the university to pursue this.
ROWAN DIX: Clive Burrett is a former geology lecturer and fervent believer in Tasmanian oil stocks, but he's not the main face of Great South Land Minerals.
We're looking for structures within the basin. We've found about 15 of these dome structures.
ROWAN DIX: In the late 1970s, the founder Malcolm Bendall studied under Dr Burrett at the University of Tasmania. The born again Christian said he had a vision from God about finding oil here.
MALCOLM BENDALL, CHIEF EXECUTIVE, GREAT SOUTH LAND: I believe personally we have 10 billion barrels in oil in Tasmania. It's my belief and I've followed through on that belief with my own money and time for 32 years.
ROWAN DIX: Since then, his company claims to have spent $40 million on seismic surface testing. Along the way, it's published optimistic reports and attracted more than 1,600 investors.
CLIVE BURRETT: But, of course, it's a virgin basin and until you've actually drilled those seismically defined structures and perhaps drilled maybe 10 or more of them, that's not a valid test of a basin until you've done all the drilling work.
ROWAN DIX: In other words, you can't prove there's oil until you've drilled, but there's no point drilling until you've done surface testing to get a basic look. It's a catch 22 that's taken years of patience.
CLIVE BURRETT: We are very optimistic that we will be drilling soon. This has been a long process, as you point out, but it's been a very expensive process and it all started in the back of Malcolm Bendall's Land Rover 30 years ago.
ROWAN DIX: Great South Land's 10 year exploration licence expires in September and can't be renewed. However, it can apply for a fully fledged mining lease if there's enough evidence of commercial oil or gas deposits. After years of waiting and with the deadline looming, local shareholders were recently given their first look at something tangible. The company says its Bellevue site in the Central Highlands is now ready for drilling and Tasmania's first onshore oil rig was delivered three months ago.
CLIVE BURRETT: There's been some scepticism that it actually exists. But here is proof that it's here and the company's going ahead.
MIKE PACE, INVESTOR (Feb. 15): Oh, it's great. The rig's up and there'll be drilling in a week or so, so we'll just have to wait and see.
ROWAN DIX: But six weeks on, there's still no drilling. Great South Land blames a Chinese investor for withholding money, but says it's refinancing and should drill very soon.
CLIVE BURRETT: I share their frustration, but at the moment, it's very difficult to raise money. There is a global financial crisis going on. And the fact that we are optimistic at the moment, I think, is an indication that people do think that this basin in Tasmania is worth exploring.
MALCOLM BENDALL: I can absolutely guarantee you we will have oil and gas in the hole. What we don't know at the moment is whether it's gonna be in commercial quantities, but we believe that, you know, it will be.
CHRIS SHARPLES, GEOLOGIST: There's a plausible story, but the problem is, there doesn't seem to be any actual evidence that there actually is any oil.
ROWAN DIX: Chris Sharples went to university with Malcolm Bendall and was also taught by Clive Burrett. He's now an academic and a firm sceptic.
CHRIS SHARPLES: If there really was large commercial quantities of oil in onshore oil reservoirs in Tasmania, given the amount of geologically recent tertiary faulting that we have in Tasmania, you'd expect there to be oil seeps everywhere. You'd expect little oil seeps all over the place. There aren't.
CLIVE BURRETT: The problem with oil, of course, when it comes to the surface is that it's a pretty yummy product. It's organic material. And so where you do have oil coming out, it's immediately eaten by bacteria and fungi and moss, and so it's covered up very quickly.
ROWAN DIX: The State Government's latest review of Tasmania's onshore oil potential was compiled nine years ago and was also highly sceptical. It records almost 140 reported sightings, then dismisses them as fakes. The report says some rocks contain tiny amounts of petroleum hydrocarbons, but: “To date, none of the analysed occurrences of such phenomena constitute a petroleum seep as would be recognised by the petroleum industry.” And, “There are also innumerable examples of false seeps … which have, upon inspection, been shown to be unconnected to accumulation of petroleum hydrocarbons.”
CHRIS SHARPLES: All the other reports were misinterpretations of things like organic debris decaying in ponds forming oily scums, you know, biogenic methane produced by rotting plant material.
ROWAN DIX: Great South Land says the Government review was overly sceptical and incomplete because it didn't apply more recent technology like seismic ultrasound. Malcolm Bendall says his company's research inspired Tasmania's oil and gas pipeline across Bass Strait.
MALCOLM BENDALL: Tasmania has a pipeline and can thank Great South Land Minerals for that pipeline, because Duke Energy wouldn't have built it if they didn't believe there was oil and gas onshore.
ROWAN DIX: A former Duke Energy executive has told Stateline the company did its own research which did not involve Great South Land Minerals.
Clive Burrett and Malcolm Bendall have been close friends for a long time, but he doesn't share his long time boss's religious convictions.
CLIVE BURRETT: No, I'm an atheist.
ROWAN DIX: Great South Lands' American parent company Empire Energy has links to evangelical churches, the partnership first developed after Malcolm Bendall's apparent "vision from God". Clive Burrett says very little church money goes into the company, and Mr Bendal has a professional approach.
CLIVE BURRETT: Whenever I talk to him, he knows better than to start talking about religion. So, he only talks to me about geophysics and geology and geochemistry and science.
ROWAN DIX: Despite seemingly endless delays, and requests for more money, many shareholders seem optimistic.
EDDIE FISHER, INVESTOR (Feb. 15): I bought shares about five years ago, and I just bought some more recently, and - 'cause we're getting so close now, I really believe, you know, we're about to get it, you know.
NOEL YOUNG, INVESTOR (Feb. 15): You've gotta take the gamble. They're gambling and there's no good investing in it if you’re not, you know, confident that they'll find it, and I think they will.
ROWAN DIX: But some with inside knowledge are less positive.
LEN SWAN, FMR OPERATIONS OFFICER: They're trying to get more money out of them. This is what this is for, taking these people up there on these bus tours. I would not be putting a cent into it.
ROWAN DIX: Len Swan was Great South Land's operations officer in Hobart for two years. He says he was sacked two months ago after what he calls “disagreements”.
LEN SWAN: The company itself hasn't gone forward at all. Malcolm Bendall's been living in other countries around the world - high life, back and forwards, London, America. Some of the places he stays in cost over $1,000 a night. If that's drilling for oil? Phone calls the bills have been $20,000 a month.
MALCOLM BENDALL: The story's a lie. Last year, I had 58 international flights, which means and I was 24 hours in the air, which means I was perpetually jet lagged. I spent all of 10 days in Monaco last year and I hardly call that, you know, a high life.
ROWAN DIX: Malcolm Bendall says he's staying at a humble Holiday Inn and has mortgaged his house to raise money.
CLIVE BURRETT: Malcolm has put his own money into the company and has taken very little from it. I think any allegations that he's been living high on the hog are ridiculous.
EDDIE FISHER (Feb. 15): I believe he's putting millions of dollars into this of his own money. That's what I've just been told just recently, so …
ROWAN DIX: That gives you confidence?
EDDIE FISHER: It does, it does, help me along, yes.
ROWAN DIX: Len Swan claims the company owes millions of dollars and hasn't paid superannuation since the middle of last year. Clive Burrett insists everyone's received their entitlements and the workforce is actually growing.
CLIVE BURRETT: We do some money, and we're working very hard. We've paid most of our creditors, at least some, and we've paid our drillers for instance $4 million, and we will be fulfilling our obligations.
ROWAN DIX: Len Swan says he's now sceptical about finding oil in Tasmania.
LEN SWAN: And, of course, the lease running out in September, he needed to get something up and running to prove to people that there were actually drilling.
CLIVE BURRETT: The proof will be when we drill.
ROWAN DIX: The company needs quick progress to secure a full mining licence in six months' time, or disappear from Tasmania altogether.
CLIVE BURRETT: And we will say to the minister, "We want these either as retention licences, or as production leases, and we want other areas to continue our exploration".
MALCOLM BENDALL: Having doubled what we committed to do, we would expect to have a favourable response from the Tasmanian Government in applying for those areas.
ROWAN DIX: A concern over the company's existing licence has already flared in State Parliament, with the Tasmanian Greens producing an undated draft ministerial briefing note.
KIM BOOTH, GREENS MHA (March 15): Minister, can you confirm that since January, 2003, the Government has had serious concerns regarding Great South Land Minerals Limited's ability to comply with its exploration licence?
DAVID LLEWELLYN, RESOURCES MINISTER (March 15): Yeah, Mr Speaker, look, I think that's an outrageous thing to have done under parliamentary privilege in this chamber.
ROWAN DIX: The note shows the former Resources Minister Paul Lennon was advised the company was not meeting its expenditure commitments in searching for oil.
KIM BOOTH: Apparently, Minister Lennon was so concerned that he was about to knock them off.
ROWAN DIX: In a statement, the current Minister David Llewellyn has confirmed there were concerns about non compliance, but says: “Revocation of the licence has previously been considered as an option, but further discussions and negotiation with the company on its work plan have avoided the need to proceed down this path.
MALCOLM BENDALL: In fact, what had happened is that our expenditure hadn't been, you know, properly recognised and our reports were sort of mislaid within the department, and so it was based on misinformation anyway.
ROWAN DIX: Mr Llewellyn says a lack of companies wanting to search for oil has given Great South Land some leeway. “In the spirit of the special exploration licence category, which is to facilitate frontier exploration activities, the Government has sought to be flexible and accommodating where it's appropriate and reasonable to do so.”
KIM BOOTH: I'm very concerned that were it to be extended by some contrivance of the Government that they would have to be absolutely satisfied that persons, particularly mum and dad investors who are unsophisticated often and have been taken perhaps on a bus ride up to Bellevue, haven't put money into a company because of the fact that the Government appears to be underwriting them.
ROWAN DIX: Tasmania's Minerals Council routinely issues a “no comment” on Great South Land Minerals. Other political and industry figures have also declined to speak on the record. Malcolm Bendall says with 10 billion barrels of oil at stake, others are trying to have it to themselves and sabotage his company.
MALCOLM BENDALL: I've had my house broken into, you know, I've had death threats and there's a dirty, very dirty game that's been played with this project and, you know, at the end of the day, those cowards will be shamed.
ROWAN DIX: Malcolm Bendall says his strongest critics will get their comeuppance.
MALCOLM BENDALL: And I intend to use my right of reply in Parliament to expose those people, and also expose the litany of lies and misinformation that’s surrounded this project.
ROWAN DIX: For now, the company's exuding optimism, but Clive Burrett admits time is running out. He says if Great South Land finds nothing worthwhile in its first two drilling missions, it's likely to spell the end for the company and its enduring shareholders.
CLIVE BURRETT: Well, they get nothing. So, investments in an exploratory oil company in a virgin basin is a high risk endeavour and we tell all of our investors that. It's high risk. But it's also very high reward.
PETER JACKMAN, INVESTOR (Feb. 15): There are a lot of sceptics about, but nobody's gonna spend the sort of money and get to this stage if they're not pretty sure that they're gonna strike something.
LEN SWAN: And I feel for them people, because they will never get any return.
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