1 00:00:03,440 --> 00:00:06,470 Sean Aylmer: Welcome to the Fear and Greed Daily Interview. I'm Sean Aylmer. 2 00:00:06,940 --> 00:00:09,670 Sean Aylmer: There are some huge moves in the energy space at 3 00:00:09,670 --> 00:00:14,040 Sean Aylmer: the moment. Santos and Oil Search are merging, BHP's combining its 4 00:00:14,040 --> 00:00:17,550 Sean Aylmer: oil and gas business with Woodside, prices are high, very 5 00:00:17,550 --> 00:00:23,070 Sean Aylmer: high, and the industry's under intense pressure to convert to renewables. So, 6 00:00:23,370 --> 00:00:26,750 Sean Aylmer: where are the investing opportunities in energy right now? My 7 00:00:26,750 --> 00:00:32,680 Sean Aylmer: guest now is Romano Sala-Tenna, portfolio manager at Katana Asset Management. Romano, 8 00:00:32,800 --> 00:00:33,820 Sean Aylmer: welcome to Fear and Greed. 9 00:00:34,090 --> 00:00:34,930 Romano Sala-Tenna: Nice to be here. 10 00:00:35,170 --> 00:00:38,190 Sean Aylmer: Where do you start when you're thinking about investing in 11 00:00:38,190 --> 00:00:40,760 Sean Aylmer: energy? Wow, there's a lot going on in that sector. 12 00:00:41,260 --> 00:00:43,920 Romano Sala-Tenna: Yeah, look, there certainly is. I think it really to a large 13 00:00:43,920 --> 00:00:47,610 Romano Sala-Tenna: degree comes back to time frames. Where you'd invest for the 14 00:00:47,610 --> 00:00:49,930 Romano Sala-Tenna: shorter term is not where you'd invest the longer term. 15 00:00:50,350 --> 00:00:52,850 Romano Sala-Tenna: I think shorter term, for example, there are clear opportunities 16 00:00:52,850 --> 00:00:55,840 Romano Sala-Tenna: right here, right now in the LNG (Liquefied Natural Gas) space. We're seeing 17 00:00:56,010 --> 00:01:02,930 Romano Sala-Tenna: spot markets blow out from $7 an MMBtu (Metric Million British Thermal Unit), as high as $27-$29 an MMBtu. Now, 18 00:01:02,930 --> 00:01:05,650 Romano Sala-Tenna: that's going to have an impact on all of the LNG players, 19 00:01:05,680 --> 00:01:09,620 Romano Sala-Tenna: Oil Search, Santos, Woodside, Origin, and even Beach in the 20 00:01:09,620 --> 00:01:13,090 Romano Sala-Tenna: coming year or two. But of course only about 10-15% 21 00:01:13,090 --> 00:01:15,940 Romano Sala-Tenna: of their volumes are sold into the spot market. The bigger 22 00:01:16,190 --> 00:01:19,100 Romano Sala-Tenna: amount is sold on a slope to the oil price, 23 00:01:19,350 --> 00:01:22,180 Romano Sala-Tenna: but short term there's definitely some opportunities in the LNG players. 24 00:01:22,180 --> 00:01:23,700 Romano Sala-Tenna: I think the market's just starting to get a bit 25 00:01:23,700 --> 00:01:24,360 Romano Sala-Tenna: of a whiff of that. 26 00:01:24,780 --> 00:01:27,990 Sean Aylmer: Okay. If we look at some of the LNG, we'll 27 00:01:27,990 --> 00:01:31,360 Sean Aylmer: take that in gas prices, why are they so high 28 00:01:31,360 --> 00:01:31,990 Sean Aylmer: at the moment? 29 00:01:32,360 --> 00:01:34,650 Romano Sala-Tenna: Yeah look, a few people are trying to work that out. 30 00:01:34,650 --> 00:01:37,300 Romano Sala-Tenna: There seems to be a number of specific factors that 31 00:01:37,300 --> 00:01:39,819 Romano Sala-Tenna: are coming together at the same time to have that impact. 32 00:01:40,250 --> 00:01:43,300 Romano Sala-Tenna: First of all, we had an unusual season just gone 33 00:01:43,300 --> 00:01:46,360 Romano Sala-Tenna: by where you'd normally have the gas reservoirs built up ahead 34 00:01:46,360 --> 00:01:50,380 Romano Sala-Tenna: of the Northern Hemisphere winter. That hasn't happened, so you've 35 00:01:50,380 --> 00:01:53,490 Romano Sala-Tenna: got a lot of the big energy players from China, Japan, 36 00:01:53,490 --> 00:01:57,430 Romano Sala-Tenna: right through Europe, scrambling for LNG cargos at a time 37 00:01:57,430 --> 00:02:00,620 Romano Sala-Tenna: where they'd normally be flush with gas. Now, why exactly 38 00:02:00,620 --> 00:02:03,200 Romano Sala-Tenna: that's happened? There's been a few factors. There's certainly talk 39 00:02:03,200 --> 00:02:06,020 Romano Sala-Tenna: about Russia and the pressure that's putting on Europe in 40 00:02:06,020 --> 00:02:08,820 Romano Sala-Tenna: terms of trying to get funding for a second pipeline there, 41 00:02:08,820 --> 00:02:11,080 Romano Sala-Tenna: and they've been restricting cargos into Europe, which has flowed 42 00:02:11,080 --> 00:02:14,179 Romano Sala-Tenna: right through to our part of the world. There's also 43 00:02:14,180 --> 00:02:16,619 Romano Sala-Tenna: been what's happening in China there, in terms of their 44 00:02:16,620 --> 00:02:20,410 Romano Sala-Tenna: push towards a higher LNG or gas mix ahead of 45 00:02:20,410 --> 00:02:23,080 Romano Sala-Tenna: the winter Olympics, trying to clean out air quality, et cetera. 46 00:02:23,860 --> 00:02:26,060 Romano Sala-Tenna: There's a whole lot of factors there, and throw into 47 00:02:26,060 --> 00:02:29,570 Romano Sala-Tenna: the mix of course, recovery from COVID-19, and we're starting 48 00:02:29,570 --> 00:02:33,169 Romano Sala-Tenna: to see high levels of economic activity, despite the sensational headlines, 49 00:02:33,169 --> 00:02:35,560 Romano Sala-Tenna: and the world's suddenly finding it's a bit short of 50 00:02:35,560 --> 00:02:36,750 Romano Sala-Tenna: energy in the short term. 51 00:02:36,930 --> 00:02:39,710 Sean Aylmer: Yeah, okay. And oil prices are, as we speak at 52 00:02:39,710 --> 00:02:42,190 Sean Aylmer: the moment, are at near three year highs. 53 00:02:42,540 --> 00:02:45,230 Romano Sala-Tenna: Yeah, that's right. And look, again, part of that, there's 54 00:02:45,230 --> 00:02:48,460 Romano Sala-Tenna: some specific reasons, for example, Cyclone Ida in the Gulf 55 00:02:48,460 --> 00:02:50,850 Romano Sala-Tenna: of Mexico took out about two million barrels of oil 56 00:02:50,850 --> 00:02:53,940 Romano Sala-Tenna: per day, at a time when the markets were already tight. 57 00:02:53,940 --> 00:02:57,510 Romano Sala-Tenna: And notwithstanding that OPEC's agreed to put an extra 400,000 barrels a day 58 00:02:57,510 --> 00:03:00,420 Romano Sala-Tenna: into the market and increasing that on a regular basis. 59 00:03:00,930 --> 00:03:05,220 Romano Sala-Tenna: We're finding that the market is very tight, the economies globally are 60 00:03:05,430 --> 00:03:09,590 Romano Sala-Tenna: opening up. We have had a substantial draw down in reserves, 61 00:03:10,320 --> 00:03:12,720 Romano Sala-Tenna: and people are suddenly realising that they're not going to 62 00:03:12,720 --> 00:03:14,890 Romano Sala-Tenna: have the stockpiles they thought they'd otherwise have. 63 00:03:15,120 --> 00:03:17,410 Sean Aylmer: Coal's the other big one, and of course we export 64 00:03:17,410 --> 00:03:20,609 Sean Aylmer: a lot of coal in Australia. And that's not that 65 00:03:20,610 --> 00:03:23,240 Sean Aylmer: far off 2008 levels which was the peak for thermal 66 00:03:23,240 --> 00:03:23,960 Sean Aylmer: coal, at least. 67 00:03:23,980 --> 00:03:26,950 Romano Sala-Tenna: Yeah. It's certainly right. We're actually focused, one of the opportunities we 68 00:03:26,950 --> 00:03:29,610 Romano Sala-Tenna: see right here right now is in met-coal (Metallurgical coal), which 69 00:03:29,610 --> 00:03:31,730 Romano Sala-Tenna: obviously can be used for energy but is more used 70 00:03:31,730 --> 00:03:34,470 Romano Sala-Tenna: in the steel making industries. Met-coal at the moment- 71 00:03:34,710 --> 00:03:36,350 Sean Aylmer: Sorry. I'm jumping in. Metallurgical coal, met-coal? 72 00:03:36,730 --> 00:03:41,210 Romano Sala-Tenna: Yes. Correct. That's right. Yep. That's jumped from about US$120 a ton, 73 00:03:41,210 --> 00:03:44,820 Romano Sala-Tenna: hit US$390 a ton just recently, in the space of 74 00:03:44,820 --> 00:03:48,910 Romano Sala-Tenna: five months. So, stocks like Coronado at the moment literally 75 00:03:48,910 --> 00:03:51,440 Romano Sala-Tenna: printing cash. They're going to be paying down their debt 76 00:03:51,440 --> 00:03:53,550 Romano Sala-Tenna: at a rate of knots and will start to look 77 00:03:53,550 --> 00:03:57,370 Romano Sala-Tenna: at capital management initiatives. That's a big change where they were 78 00:03:57,370 --> 00:03:58,870 Romano Sala-Tenna: even just three or four months ago. 79 00:03:59,410 --> 00:04:02,110 Sean Aylmer: I mean, Whitehaven Coal's another good example of that where 80 00:04:02,170 --> 00:04:04,650 Sean Aylmer: its debt levels 18 months ago were huge and people 81 00:04:04,650 --> 00:04:07,240 Sean Aylmer: were wondering if it was going to survive. And it's up, I 82 00:04:07,240 --> 00:04:08,850 Sean Aylmer: think it's almost 100% this year. 83 00:04:09,150 --> 00:04:11,740 Romano Sala-Tenna: Certainly is. They paid off $200 million in the space of 84 00:04:11,740 --> 00:04:15,890 Romano Sala-Tenna: two months. Thermal coal prices jumped from US$50 a ton, 85 00:04:16,089 --> 00:04:17,990 Romano Sala-Tenna: knocking the door of US$200, and just gone through on 86 00:04:17,990 --> 00:04:23,130 Romano Sala-Tenna: some spot cargos. Now, these are extraordinary rises. Now, these are unsustainable, 87 00:04:23,330 --> 00:04:27,540 Romano Sala-Tenna: they're unsustainable as coal at US$50 US a ton was, but 88 00:04:27,540 --> 00:04:29,920 Romano Sala-Tenna: every day the coal price is here is a very good day for 89 00:04:30,320 --> 00:04:32,760 Romano Sala-Tenna: these producers, and I think what it does show is 90 00:04:32,760 --> 00:04:36,980 Romano Sala-Tenna: that when it does finally settle and rebase, it'll rebase 91 00:04:36,990 --> 00:04:39,529 Romano Sala-Tenna: at a higher price than most analysts were expecting. 92 00:04:39,970 --> 00:04:42,250 Sean Aylmer: Okay. I just want to go through some of the big mergers 93 00:04:42,350 --> 00:04:45,380 Sean Aylmer: that we're talking about, but then I want to bring in the whole climate debate 94 00:04:45,540 --> 00:04:48,230 Sean Aylmer: over the top of it. The Santos/ Oil Search merger, 95 00:04:48,230 --> 00:04:49,650 Sean Aylmer: what's that mean for investors? 96 00:04:49,950 --> 00:04:53,200 Romano Sala-Tenna: Look, that one's perhaps a little bit more surprising. It's 97 00:04:53,200 --> 00:04:55,130 Romano Sala-Tenna: not a bad move. I mean, I think it comes 98 00:04:55,130 --> 00:04:58,599 Romano Sala-Tenna: about because we're finding two things. One is that the 99 00:04:58,600 --> 00:05:02,910 Romano Sala-Tenna: replacement exploration costs are substantially more than inorganic growth. So, 100 00:05:03,210 --> 00:05:05,750 Romano Sala-Tenna: M&As (Mergers and Acquisitions) makes a lot of sense when companies are 101 00:05:05,750 --> 00:05:08,600 Romano Sala-Tenna: so cheap to actually purchase. You take out all the 102 00:05:08,600 --> 00:05:12,080 Romano Sala-Tenna: exploration risk, you take out development time frames and costs, 103 00:05:12,390 --> 00:05:14,900 Romano Sala-Tenna: and so for a company to grow, it makes a 104 00:05:14,900 --> 00:05:18,150 Romano Sala-Tenna: lot of sense to actually make acquisitions to grow. I 105 00:05:18,150 --> 00:05:21,450 Romano Sala-Tenna: think the second thing driving it of course is that companies realise 106 00:05:21,450 --> 00:05:24,630 Romano Sala-Tenna: that the cost of capital now in this ESG (Environmental Social Governance) conscious environment 107 00:05:25,089 --> 00:05:28,920 Romano Sala-Tenna: is going to be sustainably higher. The weighted average cost 108 00:05:28,960 --> 00:05:31,010 Romano Sala-Tenna: of capital are going through quite a lot to fund projects. You're going to 109 00:05:31,010 --> 00:05:34,460 Romano Sala-Tenna: need to get big to be able to fund a 110 00:05:34,460 --> 00:05:37,500 Romano Sala-Tenna: lot more internally, but also to then use your size 111 00:05:37,500 --> 00:05:41,440 Romano Sala-Tenna: and economies of scale and leverage to try and maximise 112 00:05:41,440 --> 00:05:44,120 Romano Sala-Tenna: your borrowing power. This is going to be a theme 113 00:05:44,120 --> 00:05:45,520 Romano Sala-Tenna: I think we're going to see, not just here but 114 00:05:45,520 --> 00:05:49,050 Romano Sala-Tenna: also globally, where we're going to see companies get large 115 00:05:49,420 --> 00:05:52,670 Romano Sala-Tenna: to maximise their capacity to fund projects. 116 00:05:52,839 --> 00:05:55,050 Sean Aylmer: Okay. Romano, stay with me, we'll be back in a 117 00:05:55,050 --> 00:05:55,390 Sean Aylmer: minute. 118 00:06:00,470 --> 00:06:05,280 Sean Aylmer: I'm speaking to Romano Sala-Tenna, portfolio manager at Katana Asset Management. 119 00:06:05,470 --> 00:06:09,190 Sean Aylmer: What about Woodside and BHP? It seems to me that what 120 00:06:09,190 --> 00:06:12,430 Sean Aylmer: you've just discussed sounds like a lot of sense for Woodside, 121 00:06:12,800 --> 00:06:15,720 Sean Aylmer: but then BHP's oil and gas business merging with Woodside, 122 00:06:15,820 --> 00:06:19,300 Sean Aylmer: that's not necessarily the same incentive or the same reason 123 00:06:19,450 --> 00:06:20,490 Sean Aylmer: that BHP had. 124 00:06:20,700 --> 00:06:24,620 Romano Sala-Tenna: No. Look, I mean even 12-15 15 nths ago, the concept of BHP 125 00:06:24,620 --> 00:06:27,409 Romano Sala-Tenna: selling off its second largest and best performing pillar, it 126 00:06:27,410 --> 00:06:30,750 Romano Sala-Tenna: would have been unthinkable. What we're seeing here really is 127 00:06:30,750 --> 00:06:33,050 Romano Sala-Tenna: a paradigm shift and it really has taken place very 128 00:06:33,050 --> 00:06:36,190 Romano Sala-Tenna: rapidly on the back of the ESG, Environmental, Social, and 129 00:06:36,240 --> 00:06:40,510 Romano Sala-Tenna: Governance thematic. BHP's made a decision to pivot into new 130 00:06:40,510 --> 00:06:45,190 Romano Sala-Tenna: world metals, to pivot out of old world commodities. Now, it's one 131 00:06:45,190 --> 00:06:48,250 Romano Sala-Tenna: thing to do that when iron ore's at US$200 a ton, US, 132 00:06:48,250 --> 00:06:50,820 Romano Sala-Tenna: but through the cycle, this has been their second best 133 00:06:50,820 --> 00:06:55,620 Romano Sala-Tenna: performing pillar and on our numbers, in 2025, they go 134 00:06:55,620 --> 00:06:58,240 Romano Sala-Tenna: from 25 billion down to 12 billion at the EBITDA (Earnings Before Interest Taxation Depreciation and Amortisation) line 135 00:06:58,290 --> 00:07:01,739 Romano Sala-Tenna: without oil and gas there. To sum it up, I think 136 00:07:01,740 --> 00:07:04,250 Romano Sala-Tenna: it's a good move for Woodside. They are tier one assets, 137 00:07:04,250 --> 00:07:06,910 Romano Sala-Tenna: there's lots of synergies, it increases their scale, et cetera. 138 00:07:07,290 --> 00:07:10,640 Romano Sala-Tenna: And helps their funding gap, as well. From a BHP 139 00:07:10,640 --> 00:07:13,640 Romano Sala-Tenna: shareholder point of view, it's a good move. Because BHP 140 00:07:13,640 --> 00:07:17,520 Romano Sala-Tenna: shareholders then can play out their ESG preferences through the shares 141 00:07:17,670 --> 00:07:21,170 Romano Sala-Tenna: that they receive, but from a BHP corporate perspective, I 142 00:07:21,170 --> 00:07:23,940 Romano Sala-Tenna: think it's a brave move. The fullness of time we'll 143 00:07:23,940 --> 00:07:25,720 Romano Sala-Tenna: understand better whether it was a good move, but I 144 00:07:25,720 --> 00:07:28,110 Romano Sala-Tenna: think it's a brave move on their part to be 145 00:07:28,110 --> 00:07:29,910 Romano Sala-Tenna: selling these assets at this time. 146 00:07:30,200 --> 00:07:33,830 Sean Aylmer: Okay. If you take that whole ESG rider, which the 147 00:07:33,830 --> 00:07:36,380 Sean Aylmer: reason that I'm sure some people ... I'm talking retail rather 148 00:07:36,380 --> 00:07:39,720 Sean Aylmer: than institutional here, people don't buy some of these companies, 149 00:07:39,830 --> 00:07:42,990 Sean Aylmer: is that they are worried about the fossil fuel debate, 150 00:07:43,030 --> 00:07:46,700 Sean Aylmer: renewable energy debate. Is that weighing on some of these 151 00:07:46,700 --> 00:07:49,410 Sean Aylmer: share prices, given the commodity cycle at the moment? 152 00:07:49,740 --> 00:07:51,770 Romano Sala-Tenna: Look, it certainly has been. I think it hit the 153 00:07:51,770 --> 00:07:54,760 Romano Sala-Tenna: coal space probably 12-18 months ago and I think the 154 00:07:54,760 --> 00:08:00,679 Romano Sala-Tenna: register reoriented towards investors who are comfortable with ESG preferences 155 00:08:00,680 --> 00:08:04,370 Romano Sala-Tenna: to invest in thermal and coking coal. And so when 156 00:08:04,460 --> 00:08:07,140 Romano Sala-Tenna: the coal price has recovered, as it has now, I 157 00:08:07,140 --> 00:08:10,220 Romano Sala-Tenna: think you saw registers that had rebased and were able to 158 00:08:10,280 --> 00:08:13,770 Romano Sala-Tenna: recover their share price. For example, Whitehaven's gone from 1.20 a 159 00:08:13,770 --> 00:08:17,360 Romano Sala-Tenna: share to 3.20 share. I think that was what we saw. 160 00:08:17,630 --> 00:08:20,739 Romano Sala-Tenna: I think with oil and gas, it's happened more recently, and I 161 00:08:20,740 --> 00:08:23,170 Romano Sala-Tenna: think Woodside had its moment probably in the last couple of months, 162 00:08:23,170 --> 00:08:26,920 Romano Sala-Tenna: coinciding with a BHP announcement there. Woodside's put on 20% in 163 00:08:26,920 --> 00:08:28,510 Romano Sala-Tenna: the space of a couple of weeks, so I think that's 164 00:08:28,510 --> 00:08:32,100 Romano Sala-Tenna: largely now run its course there. I think this is 165 00:08:32,100 --> 00:08:34,840 Romano Sala-Tenna: a natural part where you'll see some investors leave and 166 00:08:34,840 --> 00:08:36,350 Romano Sala-Tenna: this will be an ongoing thematic, but I think a 167 00:08:36,350 --> 00:08:40,069 Romano Sala-Tenna: big chunk of that's now taken place. What I'm hoping 168 00:08:40,090 --> 00:08:44,330 Romano Sala-Tenna: is that the ESG debate will mature and not just look 169 00:08:44,330 --> 00:08:46,929 Romano Sala-Tenna: at things such as gas and LNG, and throw it 170 00:08:46,929 --> 00:08:49,490 Romano Sala-Tenna: in the same basket as coal and oil, et cetera, 171 00:08:49,490 --> 00:08:52,540 Romano Sala-Tenna: because it is a big part of the mix we need. 172 00:08:52,610 --> 00:08:57,180 Romano Sala-Tenna: You can't have the transition and pivot to renewables without gas, right? 173 00:08:57,240 --> 00:08:58,230 Romano Sala-Tenna: It's as simple as that. 174 00:08:58,520 --> 00:09:00,970 Sean Aylmer: It's not a very subtle debate, in a sense. I 175 00:09:01,120 --> 00:09:03,690 Sean Aylmer: mean, what you're bringing out is it's not a case 176 00:09:03,690 --> 00:09:07,670 Sean Aylmer: of black or white here. It's a transition phase and 177 00:09:07,740 --> 00:09:10,390 Sean Aylmer: there are some commodities that are dirtier than other commodities, 178 00:09:10,600 --> 00:09:12,410 Sean Aylmer: but a lot of that seems to be lost with 179 00:09:12,410 --> 00:09:13,590 Sean Aylmer: the climate change debate. 180 00:09:13,900 --> 00:09:16,930 Romano Sala-Tenna: Exactly right. I think we're at the early stage of the ESG thematic in 181 00:09:17,100 --> 00:09:20,030 Romano Sala-Tenna: the mainstream level, so it is clumsy at the moment. 182 00:09:20,320 --> 00:09:23,540 Romano Sala-Tenna: I mean, another example is do you want someone like a Woodside, 183 00:09:23,929 --> 00:09:27,150 Romano Sala-Tenna: as custodian of these assets over the next 10-20 ars, or do 184 00:09:27,150 --> 00:09:29,550 Romano Sala-Tenna: you want some junior offshore company that doesn't have the 185 00:09:29,550 --> 00:09:32,569 Romano Sala-Tenna: same level of governance and responsibility to Australia? 186 00:09:32,850 --> 00:09:33,079 Sean Aylmer: It's a great point. 187 00:09:33,080 --> 00:09:35,020 Romano Sala-Tenna: These are the sorts of things that we need to start 188 00:09:35,020 --> 00:09:37,940 Romano Sala-Tenna: to discuss, and not to penalise Woodside for example, if 189 00:09:37,940 --> 00:09:40,550 Romano Sala-Tenna: it's going to be the custodian of these assets and 190 00:09:40,550 --> 00:09:43,320 Romano Sala-Tenna: run them down a mature way, in a way that's 191 00:09:43,320 --> 00:09:46,660 Romano Sala-Tenna: sensible with high levels of corporate governance. These are the discussions we 192 00:09:46,660 --> 00:09:48,530 Romano Sala-Tenna: need to start having, and this is where ESG does 193 00:09:48,530 --> 00:09:49,360 Romano Sala-Tenna: need to evolve. 194 00:09:50,630 --> 00:09:51,979 Sean Aylmer: Okay. If we look overseas now, and I'm thinking of 195 00:09:51,980 --> 00:09:56,679 Sean Aylmer: Total in France, they seem to be evolving their businesses 196 00:09:56,679 --> 00:10:00,050 Sean Aylmer: and ExxonMobil, Shell, some of those guys are at least 197 00:10:00,050 --> 00:10:03,400 Sean Aylmer: at the edges, doing the same, shifting towards renewables or 198 00:10:03,400 --> 00:10:07,530 Sean Aylmer: at least less non-sustainable fuels. Will they all go that 199 00:10:07,530 --> 00:10:10,660 Sean Aylmer: way eventually? Is it all about funding a future which 200 00:10:10,660 --> 00:10:11,720 Sean Aylmer: is about renewables? 201 00:10:12,050 --> 00:10:14,370 Romano Sala-Tenna: Look, they won't all go that way. Because as I said, 202 00:10:14,559 --> 00:10:16,900 Romano Sala-Tenna: the next three, four, five decades, we need fossil fuels 203 00:10:17,010 --> 00:10:19,010 Romano Sala-Tenna: as part of the mix. So what I think you'll 204 00:10:19,010 --> 00:10:22,000 Romano Sala-Tenna: see is you'll see like BHP, like some of the 205 00:10:22,000 --> 00:10:24,590 Romano Sala-Tenna: big American players, you'll see them decide which way they're 206 00:10:24,590 --> 00:10:27,189 Romano Sala-Tenna: going to pivot. Woodside's put a line in the sand 207 00:10:27,190 --> 00:10:30,520 Romano Sala-Tenna: and said, "Look, we see ourselves as being a very reliable, 208 00:10:30,520 --> 00:10:34,340 Romano Sala-Tenna: long term, good custodian of LNG assets." I think that's 209 00:10:34,340 --> 00:10:36,640 Romano Sala-Tenna: where you'll see them continue to look for opportunities and 210 00:10:36,640 --> 00:10:40,199 Romano Sala-Tenna: grow there, with some opportunities to explore hydrogen in the 211 00:10:40,200 --> 00:10:43,130 Romano Sala-Tenna: longer term and the like. Others have said, "No, we 212 00:10:43,130 --> 00:10:46,390 Romano Sala-Tenna: don't see ourselves as being fossil fuel players anymore. We're 213 00:10:46,390 --> 00:10:48,260 Romano Sala-Tenna: going to use the cash flows we have to very 214 00:10:48,260 --> 00:10:51,710 Romano Sala-Tenna: clearly pivot into solar, wind, hydro." I think you're going 215 00:10:51,820 --> 00:10:53,700 Romano Sala-Tenna: to see a dichotomy. You're going to see players move 216 00:10:53,700 --> 00:10:55,010 Romano Sala-Tenna: in one of two directions. 217 00:10:55,260 --> 00:10:57,520 Sean Aylmer: It's going to be an incredibly interesting decade for you, Romano. 218 00:10:58,130 --> 00:10:59,410 Romano Sala-Tenna: Oh look, I think the last six months have been 219 00:10:59,510 --> 00:11:01,970 Romano Sala-Tenna: incredibly interesting. As I said, if someone said to me 220 00:11:02,000 --> 00:11:04,010 Romano Sala-Tenna: 12 months ago that Woodside would be selling off or 221 00:11:04,110 --> 00:11:08,069 Romano Sala-Tenna: divesting their second best suite of assets, I would have 222 00:11:08,650 --> 00:11:11,880 Romano Sala-Tenna: been dumbfounded. Yet here we are, well and truly advanced 223 00:11:12,070 --> 00:11:12,960 Romano Sala-Tenna: in that process. 224 00:11:13,240 --> 00:11:15,050 Sean Aylmer: Romano, thank you for talking to Fear and Greed. 225 00:11:15,190 --> 00:11:15,780 Romano Sala-Tenna: Thank you. 226 00:11:15,890 --> 00:11:20,410 Sean Aylmer: That was Romano Sala-Tenna , portfolio manager at Katana Asset Management. 227 00:11:20,770 --> 00:11:22,860 Sean Aylmer: This is the Fear and Greed Daily Interview. Join me 228 00:11:22,860 --> 00:11:25,570 Sean Aylmer: every morning for the full Fear and Greed Podcast, with all 229 00:11:25,800 --> 00:11:28,310 Sean Aylmer: the business news you need to know. I'm Sean Aylmer. 230 00:11:28,540 --> 00:11:29,189 Sean Aylmer: Enjoy your day.