Woodside Sees Reserve Base Tripling

By Sonali Paul and Jonathan Barrett
Tuesday, November 19, 2019

Australia's Woodside Petroleum on Tuesday laid out plans to triple its gas and oil reserve base as it pursues projects worth over $36 billion in Australia, Senegal and Myanmar.

Success in those projects would result in its reserve base reaching 3.7 billion barrels over the next seven years and help Woodside expand production by 6% a year over the next decade, it said.

"We believe we now have a compelling growth story," Woodside Chief Executive Peter Coleman told an analysts briefing in Sydney.

Coleman's comments highlight Woodside's bullish view as crunch time approaches on major projects. Woodside and its partners are due to make decisions on whether to go ahead with the Sangomar oil project off Senegal by the end of this year, the Scarborough gas project off Western Australia in early 2020 and the massive Browse gas project in the first half of 2021.

The Scarborough project took a big step forward this week, with Woodside and partner BHP Group agreeing on a tolling price for processing gas from the field through Woodside's Pluto LNG plant.

With the tolling agreement and contractor terms largely locked in, Coleman said the main challenge for the $11.4 billion Scarborough project is lining up contracts to sell liquefied natural gas (LNG).

"The biggest risk for us now is market risk and understanding what the LNG price will be," he said.

Spot LNG prices in Asia are around half the price they were a year ago due to an influx of new supply from the United States and Australia. Coleman said he expects the glut to turn to undersupply as early as 2024.

To help fund Woodside's huge spending plans, the company plans to sell a 50% stake in the new 5 million tonnes a year processing unit it will be adding at the Pluto plant.

At the same time, Woodside intends to sell down its 75% stake in Scarborough, but Coleman said the company would not rush, looking to make sure it gets the best value after recently increasing its reserve estimate by 52%.

He said Woodside "could very well" retain more than a 50% stake in the field, which is roughly the size of Singapore.

"When you are in a world class asset you don't sell down willingly," he told reporters after the investor briefing.

Several international companies expressed interest in a stake this year, but their offers were highly conditional. With the toll and construction costs more certain now, Coleman said Woodside would reopen talks with potential partners.

BHP said in emailed comments that it plans to maintain its stake at 25%, having given up an option to increase it to 35%.

Woodside confirmed that costs on the Sangomar project, previously called SNE, in Senegal had increased by 40% to $4.2 billion, as reported by its minority partner FAR Ltd, adding that they are nearing a final investment decision for the oil development.

Woodside said it remains on track to produce 100 million barrels of oil equivalent in 2020.


(Reporting by Sonali Paul and Jonathan Barrett; Additional reporting by Shriya Ramakrishnan; Edting by Jane Wardell and Edwina Gibbs)

Categories: LNG Oil Asia Natural Gas Australia/NZ

Related Stories

India Stretches Bids Deadline for 13 Offshore Deep-Sea Mineral Blocks

Op-Ed: Kazakhstan’s National O&G Firm Positioning Itself as Global Energy Player

EnerMech Names APAC Regional Chief

Woodside Inks Long-Term LNG Supply Deal with China Resources

ADNOC Signs 15-Year LNG Supply Deal with Osaka Gas for Ruwais Project

Malaysia's Petronas Plans Job Cuts

China's CNOOC Aims for Record Oil and Gas Production in 2025

EnQuest to Acquire Harbour Energy's Vietnamese Assets

CNOOC Boosts Dongfang Gas Fields Output with New Platform Coming Online

Saipem’s Castorone Vessel on Its Way to Türkiye’s Largest Gas Field

Current News

MODEC, Sumitomo Partner Up for Delivery of Gato do Mato FPSO

Chuditch Gas Field Up for Summer Drilling Ops as Sunda Reshapes Ownership Structure

EnQuest Bags Two Production Sharing Contracts off Indonesia

Hanwha Drilling’s Tidal Action Drillship En Route to Petrobras’ Roncador Field

China's ENN, Zhenhua Oil Ink LNG Supply Deals with ADNOC

MODEC Wins ExxonMobil Guyana’s Hammerhead FPSO Contract

India Stretches Bids Deadline for 13 Offshore Deep-Sea Mineral Blocks

Indonesia Awards Oil and Gas Blocks to Boost Reserves

Sapura Energy Nets $22.6M in Offshore Support Vessel Contracts

CNOOC Puts Into Production New Oil Field in South China Sea

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