Change of direction

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THERE'S some irony in the fact that Keith Spence, a former top Woodside and Shell executive, did his first-class honours degree in geophysics in Tasmania, a state not overly blessed with oil or gas resources.

"At the time, in the early 1970s, it was a university famous for its hard-rock geology," Spence says. "And I studied under Professor Sam Carey, who was a truly inspirational figure in the industry, and he would frequently perform magic tricks during lectures."

After completing his undergraduate degree, Spence began a PhD using seismic events to map the earth's deep crust under Tasmania. But, after receiving job offers from his first two applications, he joined Woodside as a geophysicist in 1978.

"I was always more interested in oil and gas and a lot of my peers at university ended up working in the West Australian oil and gas sector, like me."

It was a good time to have that interest, with the North West Shelf starting to reveal its promise as the largest producer of gas in WA, the result of aggressive exploration by Woodside. "I spent three years at Woodside before joining Shell, where I led a production geology team in The Netherlands before returning to Melbourne as head of operations."

In 1994, Shell posted Spence back to WA and Woodside. "I started as the exploration manager for the North West Shelf Venture on April Fool's Day. The company was in a bit of strife at the time and was bringing in secondees like me to help out."

Woodside had decided against doing further exploration, but Spence had different ideas. "We persuaded the company and the North West Shelf joint venturers to allow us to continue exploring with the new technology available to us, and made seven discoveries in a row - an unheard-of hit rate. To put that in perspective, it's usually more like one in 20 that bears fruit in Australia."

The momentum, he says, swung from merely "milking the cow" [i.e. the North West Shelf] to adding more discoveries - effectively reinvigorating Woodside's exploration policy and growth outlook.

One find was especially exciting. "The Perseus discovery was about the same size as the North Rankin field. It underpinned the development of [liquefied natural gas] trains 4 and 5 on the North West Shelf, more than doubling LNG production.

"Perseus was such an unusual setting. Gas is usually found in structural highs, like an upturned tea-cup setting. But Perseus was in a structurally low setting, a place you wouldn't normally look."

The North Rankin A platform now produces gas and condensate from the Perseus and North Rankin fields, with a daily capacity of up to 1815 million standard cubic feet of gas.

He credits this amazing record of exploration success to the team he led at the time. "They were a pretty switched-on unit, with access to technology that had been tried and tested around the world."

Spence left Shell and joined Woodside in 1998. He moved away from hands-on exploration and became director of the company's northern business unit and then its oil business unit, before standing in as acting CEO between John Akehurst's departure in 2003 and Don Voelte's arrival in 2004.

"It was a job I loved. There was a real sense of community and team at Woodside, and we did well, too, raising the share price from about $12 to $18."

It was in 2005, however, that Spence recorded his proudest achievement to date - approval of the Enfield oil development, off the coast of Exmouth in WA and, more importantly, just 50 kilometres from Ningaloo Reef. "I remember sitting on the beach at Turquoise Bay, near Exmouth, with my wife and seeing a drilling rig in the distance. We had made a couple of discoveries and were nervous due to its proximity to the reef. But I felt confident because we had done 460 community consultations to get the development approved."

Spence went to great lengths to ensure the Enfield development would proceed with as little risk to the environment as possible. "I still go up there every year, to make sure that we've followed up on our commitments to the community."

After Voelte joined, Spence became the chief operating officer and began to develop a retirement plan. "I had always planned to retire from full-time work at 53 and I left Woodside in 2008, aged 54."

But Spence's version of retirement is a long way from the pipe-and-slippers approach. A member of 11 organisations, including the National Carbon Capture and Storage Council, he chairs the National Offshore Petroleum Safety Authority advisory board and is a board member of Skills Australia.

"My areas of interest are energy, training and education," says Spence, who is a keen chorister in his spare time, as well as a member of the Western Australian Academy of Performing Arts board. "The economics of carbon capture and storage are quite challenging. But we have identified the best places in Australia to inject carbon dioxide into rocks for storage and by 2020 we will have several large-scale demonstrations of the technology for carbon dioxide capture, transport and storage at work."