Malcolm Turnbull likely hasn't heard of Central Petroleum. But Macquarie Bank sure has.
The millionaire factory liked lending money to Central so much that it wants to buy the company. And, as of Friday, the driller quite likes the idea with Macquarie's $87 million takeover pitch being recommended to shareholders by the Central board.
So why should this cash-strapped, opportunity-rich Macquarie-targeted Northern Territory gas driller also be on the PM's radar?
Well, because Central, like so many others not on the prime ministerial gas crisis guest list, should have been invited to the executive gathering later this week that will see Turnbull and his energy spokesman, Josh Frydenberg, attempt to find answers to the nation's present and future gas "crisis".
Of course, finding answers might not necessarily be the ambition of that meeting. The decision to limit the gathering to a cohort of the most senior international and domestic gas drillers and sellers risks being an exercise in buck-passing.
But having called the crisis at The Australian Financial Review Business Summit last Thursday morning, the PM took the risk of owning the problem in revealing that big gas was to be called in to be quizzed on how they intend to deal with the problem.
Australia's energy crisis has two distinct wings. There are the issues that have de-stabilised the electricity business and a different set of issues that mean the Australians are paying historically unprecedented prices for gas.
There is an understandable focus on the problems of the power sector, given that we all like the lights to come on when we flick the switch. But, for a variety of reasons, including the unavoidable fact of greenhouse emissions targets, you can't fix the national power failure without first making sure there is enough gas.
The executives that will front the PM this week run the big three gas exporters whose new demand has so altered gas supply patterns on the east coast. The big suppliers are now driving gas to export plants that were supposed to be sustained by their owners' own resources to fill the original east coast gap.
Neither the LNG project managers, GLNG, APLNG and QCLNG, or their local owners and gas suppliers, Santos and Origin Energy, can solve the PM's problems. The projects have spent $70 billion on their machines and they simply cannot afford not to fill them with gas to chill and export. And the demands of those machines have already outstripped the capacity of at least one local operator, Santos, to supply the apparatus it helped build.
Santos has not been able to deliver the volume of gas it expected to when its project was sanctioned by board and government back in 2010. As a result the two trains at GLNG rely on others for gas. So it has hoovered up loose gas from a variety of sources including drillers like Origin and traders like AGL Energy.
Once upon a time AGL had aspirations to be a gas producer like Origin, but one freed from the capital and market risk of owning the export gateways. But the strategy to tap coal seam gas wealth in NSW did not survive executive succession. Current CEO Andy Vesey had no appetite for the public affairs challenges of an unconventional gas life.
In February last year Vesey walked away from natural gas production and exploration, adding $640 million to the $435 million impairment taken on the upstream business in 2015.
Looked at through one lens, Vesey got that decision right. A NSW Liberal government has, in all but one case, utterly shirked its responsibility to lead debate on unconventional gas. It has reacquired the licences of coal seam gas explorers in preference to embracing and marketing its own chief scientist's sensibly qualified endorsement of the extraction technologies.
But studied through a more commercial lens, Vesey seems to have robbed his shareholders of considerable upside while exposing AGL to equally considerable downside risk. Vesey has been left to complain at the lack of contractable gas while being unable to supply its own gas into a price-inflated market.
But, just to take one step back here, we need to recall that as recently as 2014 a review of coal seam gas by the NSW chief scientist, Mary O'Kane, found that unconventional gas posed a conventional, limited and manageable set of risks.
NSW is not alone in apparently ignoring O'Kane's report. Neither side of the Victorian parliament seems to have read the thing. Both have endorsed a forever ban on hydraulic fracturing and a moratorium on more traditional extraction technologies.
Why this hysteria?
Well, because Labor is fearful of the Greens and the anti-carbon causes they so successfully promote while the conservative Coalition is even more petrified of pastoralists that don't like what they don't understand and will not actively benefit from.
No state outside of Queensland has been prepared to promote the environmental integrity or the economic necessity of unconventional gas. Instead a collection of regional fleas are wagging the national dog. And there, folks, is the rub.
Everyone but the folk from battery-land at Telsa reckon the fix for our power problems lies in a complex of interwoven initiatives. But gas is a very different story. Sure, there are a wealth of little things that need to be done. But thematically the answer is simple. It is all about supply. Gladstone's LNG plants consume annually the equivalent of three times the national domestic gas market. And, so far at least, the supply-side response to their introduction has been managed essentially by those who aim to fill those machines.
Energy Australia managing director Catherine Tanna hit the nail on the head at Thursday's Summit. The gas problem will not go away until there is more onshore supply. End of story.
Turnbull cannot be criticised for calling the gas producers to some sort of account this week. But if he wants all the answers he needed to broaden his eyeballing.
He needed to call in, too, the pipeliners, the big gas users and the Premiers of the no-fracking states.
And he needed to find himself a wrangler to force them to make informed, targeted commitments. My suggestion would be competition regulator Rod Sims. His people ran a creative and predictive inquiry into the east coast gas markets and few people are as across what is a surprisingly schismatic and consensus-challenged industry.
Oh, and Macquarie Bank's move to take ownership of Central Petroleum says that it too might be a welcome guest at a prime ministerial gas showdown.
Macquarie has played a hand that says it is a true believer in the remunerative potential of this gas shortage. It is plainly now looking to play a role in creating a more liquid spot and forward market and, in a market structural under-supplied, the only way to do with any level of acceptable risk is to own gas.
Central's potential is obvious. It has legacy gas fields that once supplied 30 petajoules daily of gas but now only have customers enough for 10pj. The demand side of that will change when Jemena completes a new pipeline that will link the NT infrastructure to the east coast market through Mt Isa.
Central has the resources but nothing like the capital to make that gas available by the time the pipeline is ready in late 2018. Given the public markets currently do not know how to value stranded gas like Central's, access to new equity was going to be hideously expensive. So it has been obvious for sometime that private equity was where Central's fate would eventually lie.
There are many who now claim to be lone voices in predicting the gas crisis that is now upon us. We have been channelling warnings of market disequilibrium by 2016-17 for five years. Our original informants were ex-Origin boss Grant King, ex-Santos east coast gas boss James Baulderstone, ex-BHP Billiton boss Marius Kloppers and the man who sold BG Group the coal seam gas territories that inspired the first of Gladstone's three liquid natural gas projects, Richard Cottee.
These days Cottee steers Central Petroleum. And, while those who know him might wonder how it will work, it seems Cottee might well stick around once the Macquarie deal is done.
"Macquarie certainly said they would love me in the morning," Cottee said on Friday with very typical irreverence. "So, let's just say we are still dating. But, there have been no definitive discussions about the future. That comes next. And because there is no offer, yes, I was asked to vote on the approach and it was endorsed unanimously, so obviously I supported it."
Cottee is classic petroleum industry maverick. And Macquarie is, well, Macquarie. So the potential of cultural difference lies very real. But Cottee appears as driven to stay should Macquarie secure the business.
"I have a missionary zeal about this one," he told me on Friday. "I am keen to bring this gas to market, I am keen to see a solution to the problem [the supply crisis] and I am arrogant enough to think I could be relevant to the solution."
This could be an awful lot of fun to watch.
