When Midnight Oil played a handful of shows at the Sydney Metro and the Melbourne Forum in mid-February, two things were clear. The audience, once mostly sweaty males with one hand wrapped around a beer can and the other clenched fisted in the air as they’d yell "Oiyls! Oiyls! Oiyls!", had more females.

Secondly, without losing their anger or passion, the Oils have streamlined as a more melodic force. This is obvious on songs from the new "Capricornia" album, like the "Golden Age" single, "Too Much Sunshine" and the poignant "Luritja Way". Possibly it’s the realisation of how the older melodic numbers like "Short Memory" and "Dead Heart" have become more powerful through the years. Whatever it is, this comes at a time when the Oils go through another golden period.

Last year, they returned to America after seven years to find that the college audience — whose elder brothers and sisters in 1987 put "Beds Are Burning" in the US Top 20 — was still awaiting them. For much of this year, the Oils will be playing in the northern hemisphere. They’ve got a new US record deal there, Liquid8, run by former Sony executive Nathan Munoz who helped them set up that famous street gig outside the Exxon Corporation offices in New York for their oil spill in North America.

Without meaning to be, "Capricornia" has the same spirit as the classic "Diesel And Dust" album (1987). That came on the heels of the "Blackfellas Whitefellas" tour with the Warumpi Band. Many of the songs came from sitting around the campfire, and being exposed to the ups (the spirituality and strength of the people) and downs (glue sniffing, unbelievable poverty) of the outback.

Before work began on "Capricornia", the Oils made a three-day trek back to the small Aboriginal community of Papunya in the central desert. Sammy Butcher, guitarist with the Warumpi Band, was running the community and the tribal elders were happy to allow these whitefellas to camp there.

It was July 2000. It was just the Oils and their manager, going out to work out some issues without distractions. One of these was whether to accept the invitation to play the closing ceremony of the Olympics a few months later. It was here that the decision was made to wear clothes covered with SORRY. (Rob Hirst laughs loudly when he recalls that right until a few minutes before they went on, some members were still wondering if what they were doing was a good idea!)

They loaded the 4-wheel with beef, emu and buffalo steak, jammed on acoustics ("songs by anyone called Neil...Murray, Finn, Young...") and set up on the red dirt floor of the schoolhouse to play for the locals. Guitarist Jim Moginie suggested the CD title from Xavier Herbert’s 1938 novel about white settlement of the Top End, and their clashes with the First Australians. It was a school text book with vivid writing and marvellous characters. Here the essence of "Luritja Way" (the Luritjas are one of the three major tribes in the region) and "Capricornia" took shape, while Moginie’s earlier written "Under The Overpass" fitted into the mood.

"It was a remarkable three days and nights," says Hirst. "Martin (Rotsey) and I had been to Utopia, northeast of Alice, doing workshops with the kids some months before. But it had been 15 years since the Oils did it together, camping next to the McDonald Ranges."

Q: Would you agree ‘Capricornia’ is the most informal of the Oils albums?

A: "It’s approached similar to ‘Diesel’, another campfire album. It was made with the same producer. Warne (Livesy) always gets myself, Bones (Hillman) and Jim to sing a lot. He likes harmonies, he likes the arrangements neat, and songs to be melodic. We took a few detours in the past — ‘Breathe’ (1996) was more atmospheric, recorded in Sydney and New Orleans, and ‘Redneck Wonderland’ (1998) in Melbourne but very much inspired by One Nation madness — to get back to what the band sounds like when we get in a room and play. You get Jim playing his Gretsch Rickenbacker in the right speaker, Martin playing a Tele on the left, Bones and I barrelling through the middle, and Pete right in the centre."

Q: Is it a case of all if you playing together and at the same time?

A: "Absolutely. ‘Mosquito March’ and ‘Under The Overpass’ were first takes, and the others three or four takes. Not since ‘Diesel’ had the Oils prepared an album so well. Last year we played for seven weeks through North America and did some pubs around Melbourne and Sydney, so by the time we went into Festival Studios, we knew the songs inside out. Festival Studios was a great place where you could record a band looking at each other and playing, but that’s gone, of course, like so many great studios. There are only a few studios today where you get a room large enough for a band to play together and eyeball each other."

Q: People forget that while the Oils are a loud "rawk" band, they were one of the first Australian bands to use samplers and sequencers on "10, 9, 8..."

A: "Some of us had to be dragged kicking and screaming but you can use combination of technology and really old valve amps and mics. This album used valves and old desks, but Pro-Tools for arrangements."

Q: Do you spend any of your spare time reading magazines about instruments or manuals about engineering?

A: "Absolutely not! I’d be the worst person to ask technical questions, with the possible exception of Pete! I’ve remained remarkably dumb in the studio. I prefer the instinctive approach, which is good or I’d be looking over the shoulder of the producer and getting on his nerves. I get cabin fever in the studio, so I prefer to go off on a fishing boat or have a surf."

Q: Having admitted to not being technical minded, this is the time to bring out the questions about your gear.

A: Sure! (laughs gleefully).

Q: Let’s talk about the drum kit you played with on your recent Oz shows.

A: "It’s bunch of old junk, it really is! (louder laughs). I’ve been playing with the (Sydney blues band) Backsliders for the last 18 months since they lost their drummer. They don’t have a bassplayer, so I had to create a drum kit that was quite different to a Midnight Oil drum kit. I had to get a pretty big bass drum, a Downbeat 24" you use in military bands, and which used to belong to a 1950s band called the Metro Gnomes, it had their name on it."

"I’ve been collecting a potpourri of junk pieces from antique shops. But nice sounding junk. I loved the kit so much that it’s morphised into my Midnight Oil kit. Including the cast iron water tank behind me which I found in the desert on the ‘Blackfellas Whitefellas’ tour and which has been around the world a few times."

"I don’t recommend young drummers rush out to a shop and buy something off the shelf. You don’t have to spend a lot of money. Go to makes like Slingerland, Ludgwig, Premier or Gretsch and put something together. My snare is either a ‘90s Piccolo Premier or a cocktail kit for the acoustic set, which has a Leedeys 1940s wooden Piccolo. The toms are a Boosey & Hawkes military drum which I converted and which sound huge. The cymbals are an assortment from the ‘60s, as well as garbage tins and springs from a Peugeot 504 because they’re good to hit. They’re given a good whacking and seldom last more than one tour. The sticks are made by Ozbeat, modelled on the Premier 7A. They’re quite thin, not big ones, because it’s not how hard you hit the drums, it’s when you start pulling up the stroke."

Q: Onstage where do you position the mics?

A: "On the boom on the left."

Q: Any other instruments?

A: "A Martin Triple O-18, and a Gibson J50 guitar which has the most beautiful sound. Also lots of cheesy keyboards and amps that I get at junk shops."

Q: It’s a strange time for "Capricornia" to come out isn’t it, within 12 months we’ve gone from the euphoric nationalism of the Olympics to kicking people in water-logged boats back into the sea.

A: "It’s a different temperament of the time, and I know what I’d prefer. I got right into the Olympics, I loved the spirit of Sydney, and the way Australia was represented internationally. I hate the way Australians are now viewed as mean spirited because of decisions that are coming out of Canberra."