Woodside warns Australian gas plans at risk by delays to North West Shelf approvals

Federal government delays in approving an extension permit for Woodside’s operations in WA could deter it from drilling for domestic gas, the chief executive has warned.

Woodside Energy CEO Meg O'Neill. Picture: NCA NewsWire / Nikki Short

The federal Labor government’s delay in approving an extension permit for Woodside’s operations in north-west Western Australia threatens to deter the company from drilling for much needed domestic gas, the chief executive of the oil and gas giant has warned.

The comments underscore the souring of ties between Woodside – one of Australia’s largest companies – and the federal government.

Woodside last year secured WA state approval to extend its operations in the state’s remote north west, a decision that took more than six years.

The state approval though requires approval from federal Environment Minister Tanya Plibersek but that decision has now been pushed back until after the election.

Woodside chief executive Meg O’Neill said she was “beyond frustrated” with the six-year delay considering the company had no plans to extend beyond its current boundaries and had been operating in the region for 40 years.

Escalating her criticism, Ms O’Neill said the delay risked tightening domestic supplies and prolonging the use of coal.

“We have decisions that have to make to allow us to bring develop new gas resources in the North West Shelf to support the domestic market in WA, which [the Australian Energy Market Operator] says will be short by 2028, she said.

“To keep jobs going in Karratha and to keep jobs going for all of our customers that use our gas, we do not see any reason for a delay.

“The outcome of further delays is more coal in the system for longer. If you are serious about the environment, you would approve this.”

Invoking the threat to domestic gas supplies, Ms O’Neill’s comments escalate the simmering tensions between Woodside.

Woodside Energy’s Scarborough Energy Project located in the Carnarvon Basin. Picture: Supplied

In a bid to encourage more drilling, the WA state Labor government tweaked its onshore rules to allow would-be developers to sell more shipments via lucrative export markets, though Woodside remains one of the state’s dominant suppliers.

The Australian Energy Market Operator, which is tasked with ensuring grid stability, has said the country’s east coast is poised to have a material gas shortage by 2028 and the region could be forced to import LNG cargoes.

Woodside is a partner with Viva Energy for a potential LNG project in Victoria.

Ms O’Neill’s comments came as the company revealed record production of oil and gas in 2024.

As a result profits more than doubled, the company said.

However, underlying results, which are a key indicator of a company’s corporate performance, fell about 13 per cent, amid weaker commodity prices.

The result is the delivery of Ms Neill’s vision to rapidly expand production to “thrive through the energy transition” which has put it in the cross hairs of environmentalists.

Woodside said production during 2024 totalled 193.9 million barrels of oil equivalent (MMBoe) after the company delivered a new project in Senegal. The buoyant production meant Woodside posted net profit after tax of $US3.573bn, up 115 per cent from $US1.66bn reported one year earlier.

But with the result inflated by the increased production, Woodside said underlying profits totalled $2.88bn which was down 13 per cent on the $US3.22bn reported one year earlier. Woodside will issue a final dividend of US53c per share, down from no last year.

Still, the result surpassed market forecasts and shares in the company have risen about 3 per cent in morning trade.

Ms O’Neill said the result illustrated the strong financial position that the company was now in and showed it was set to become a highly cash-generative business.

“Our proven track record of operational excellence, disciplined investment decisions and world-class project execution is delivering near-term rewards for our shareholders while laying the foundations for a new chapter of value creation,” she said.

While investors will likely cheer, the rapid growth of Woodside will fuel criticism from proponents of less fossil fuel production.

Next year Woodside will finish work on its $US12.5bn ($18.7bn) Scarborough development that has been earmarked as the next major driver of growth, while its Mexican project will begin delivering oil in 2028.

Woodside is also expected to confirm its intention to proceed with its recently acquired Louisiana LNG project.

Senior analyst and campaigner with investor advocacy group Market Forces Brett Morgan said Woodside’s shareholders should oppose Woodside’s growth agenda.

“Sanctioning the Louisiana LNG facility will see Woodside’s emissions skyrocket and major investors including AustralianSuper, HESTA and Australian Retirement Trust must push for an end to the company’s gas expansion plans,” the investor advocacy group said Mr Morgan.

Woodside insists bolstering LNG particularly will allow countries that traditionally rely on coal - which contains more pollutants to switch - but environmentalists accuse the company of delaying action on reducing emissions.

Originally published as Woodside warns Australian gas plans at risk by delays to North West Shelf approvals