Woodside Holding Off on $11B Scarborough Project FID until Prices Improve

Sonali Paul
Thursday, April 30, 2020

Woodside Petroleum's final investment decision on the $11 billion Scarborough gas project will require stable oil prices and credit ratings, the company's CEO said on Thursday.

The company in March deferred a final investment decision on the project off the coast of Western Australia until 2021 to help rein in capital spending to weather the oil price crash.

It will be "investment ready" by the third quarter of 2020 but Woodside, which co-owns the project with BHP Group , does not expect to sign a decision until oil prices improve, CEO Peter Coleman told shareholders in a virtual annual meeting on Thursday.

The project includes an expansion of Woodside's Pluto LNG plant, which Scarborough will feed.

A final investment decision will require "a period of sustained pricing stability and then also a trajectory through pricing growth. What's limiting us at this point in time is, of course, ratings agencies," Coleman said.

"We just definitely don't want to get to a point where we're worried about whether we're investment grade or not."

Ratings agencies Moody's and S&P have slashed their oil price forecasts and put oil and gas producers' ratings on negative watch, and Coleman said he does not expect the agencies to revise their pricing outlooks until next year.

Woodside's planning assumes oil prices, which plunged to 20-year lows last week, will remain weak into next year although it expects a gradual recovery starting later this year.

"Hopefully by 2022 we'll be back to as normal as we can be in the pricing area," Coleman told shareholders.

(Reporting by Sonali Paul; editing by David Evans and Jason Neely)


Categories: Energy Industry News Activity Australia/NZ

Related Stories

Sapura Energy Rebrands to Vantris Energy

Yinson, PTSC Get $600M Contract for Vietnam-Bound FSO

Sapura Scoops Over $118M for Chevron, PTTEP Subsea Ops off Thailand

SBM Offshore’s Jaguar FPSO Enters Drydock in Singapore (Video)

EnQuest Picks Up Offshore Oil and Gas Block in Brunei

EnQuest Acquires Harbour Energy’s Vietnamese Assets

PTTEP Hires Energy Drilling’s Rig for Southeast Asia Offshore Job

Four Jack-Up Drilling Rig Deals Set to Bring In $129M for Borr Drilling

PTTEP Hires Velesto’s Jack-Up Rig for Drilling Campaign off Malaysia

Scarborough FPU's Topsides and Hull Come Together in Major Engineering Feat (Video)

Current News

Sapura Energy Rebrands to Vantris Energy

BP, ONGC, Reliance Industries Ink Deal for Offshore Exploration in India

Allseas-Boskalis Consortium Bags $1.4B Offshore Gas Pipeline Job in Taiwan

CNOOC Brings New Offshore Gas Field On Stream

Yinson, PTSC Get $600M Contract for Vietnam-Bound FSO

PTTEP Buys Chevron's Hess Unit Share of Southeast Asia’s Offshore Block for $450M

Valeura Energy, PTTEP Partner Up on Gulf of Thailand Blocks

Sapura Scoops Over $118M for Chevron, PTTEP Subsea Ops off Thailand

Pandion Energy Divests Interests in Three Norwegian Assets to Inpex

China Starts Production at Major Oil Field in Bohai 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