Woodside Boosts Spending for Next Leg of Growth

Thursday, January 17, 2019

Australia's Woodside Petroleum Ltd on Thursday flagged higher-than-expected investment spending for 2019 as it steps up early work on the two big natural gas developments that will drive its growth in the next decade.

Australia's largest independent gas and oil producer plans to spend between $1.6 billion and $1.7 billion in 2019 on projects, significantly higher than an estimate from UBS of $1.2 billion.

At the same time it is roughly halving exploration spending from $273 million last year.

"The cut in exploration spend is really us looking forward now that we've got growing confidence in the projects -- in Browse, Scarborough, Pluto, also in Senegal," Chief Financial Officer Sherry Duhe told Reuters in an interview.

Perth-based Woodside aims to lead the next leg of liquefied natural gas (LNG) investments in Australia with its Scarborough and Browse projects and an expansion of Pluto, aiming to make final investment decisions in 2020.

Woodside is currently holding talks with its partner BHP Group over the tolling fee that will be charged for gas from Scarborough, an offshore field, to be processed at a new facility at the existing Pluto LNG plant, before BHP signs off on early work for the project, Duhe said.

BHP has an option to increase its 25 percent stake in Scarborough when it signs off on the initial engineering and design work.

Browse is the biggest undeveloped offshore gas field off Western Australia, and will also send gas for processing into LNG onshore. Woodside expects to reach a final agreement "certainly in the first half of this year" to be the anchor supplier into the existing North West Shelf LNG plant, Duhe said.

Woodside on Thursday beat market forecasts, posting a 43 percent jump in quarterly revenue on rising output at the Wheatstone LNG project, run by Chevron Corp, and higher prices.

Revenue rose to $1.42 billion for the quarter ended Dec. 31, 2018, compared to $990 million a year ago. UBS had estimated quarterly revenue of $1.35 billion.

Spot LNG prices have fallen for January and February because of a surplus of LNG cargoes due to a relatively warm winter in North Asia, RBC analyst Ben Wilson said in a note.

As a result, Woodside might book lower prices in the first quarter, but Duhe said a volatile oil market made it hard to predict what will happen.

Woodside's total production in the fourth quarter rose to 24.1 million barrels of oil equivalent (boe) from 21.9 million boe a year earlier. That led to an 8.3 percent rise in annual output to 91.4 million boe, topping Woodside's own forecast.

It expects annual output in 2019 of between 88 million boe and 94 million boe.


(Reporting by Sonali Paul, Aditya Soni and Nikhil Kurian Nainan; editing by Grant McCool and Christian Schmollinger)

Categories: Finance LNG Engineering Industry News Natural Gas Australia/NZ

Related Stories

MDL Secures Cable Laying Job in Asia Pacific

POSH Set to Tow Nguya FLNG from China to Eni’s Congo Field

Technip Energies Gets FEED Job for Inpex’ Abadi LNG Project in Indonesia

Seatrium Signs FLNG Vessel Upgrade Deal for Golar LNG

ADNOC Signs Long-Term LNG Deal with Hindustan Petroleum Corporation

CNOOC Brings New Offshore Gas Field On Stream

China Starts Production at Major Oil Field in Bohai Sea

CNOOC Finds Oil and Gas in South China Sea

Thailand's PTT to Buy LNG from Glenfarne's Alaska LNG Project

Woodside Agrees Long-Term LNG Supply with Petronas Unit

Current News

Shell’s Brazil-Bound FPSO Starts Taking Shape

Ventura Offshore’s Semi-Sub Rig to Keep Drilling for Eni in Asia

SBM Offshore, SLB to Optimize FPSO Performance Using AI

MODEC Ramps Up Hammerhead FPSO Work After ExxonMobil's Go-Ahead

Aesen, DOC JV Targets Subsea Cable Logistics

Timor Gap Boosts Stake in Finder Energy’s Timor-Leste Oil Fields

SBM Offshore Starts Construction of FSO for Trion Oil Field off Mexico

Russia Targets 2028 for Sakhalin-3 Gas Project Start Up

Seatrium Secures ABS Backing for Deepwater FPSO Design

MDL Secures Cable Laying Job in Asia Pacific

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com