Nuclear in Australia is unlikely, Woodside CEO says as company reports 74pc slide in annual profits

Nuclear will play a vital role in power the world, but unlikely in Australia – the CEO of Woodside has declared.

Nuclear will not play a role in Australia’s energy mix, Woodside Energy said, as the oil and gas giant reported a steep fall in annual profits due to weaker global prices and a hefty writedown.

The role of nuclear as a power source in Australia gained fresh momentum with the Coalition pitching it as an alternative to Labor’s renewable plan, insisting it will cause less social and economic disruption.

But in a blow to the Coalition’s agenda, Woodside chief executive Meg O’Neill said she believed Australia is unlikely to have sufficient time to adopt nuclear.

“I think nuclear is going to be an important energy source globally in the future. As we know it has zero CO2 emissions but obviously has other waste management challenges. In the Australian context, I think it’ll probably struggle for a variety of reasons. First of which is the long lead time associated with permitting and constructing,” Ms O’Neill told The Australian.

It follows mining billionaire Andrew Forrest accusing the fossil fuel industry of pushing nuclear to delay Australia from switching to cheaper renewable energy for 20 years, declaring the “plucked-out-of-thin-air bulldust of nuclear policies” will help no one.

Woodside’s annual net profit after tax fell sharply to $US1.66bn ($2.54bn), a steep decline on the $US6.95bn a year earlier. The decrease in profits was largely driven by weaker gas prices, with Woodside reporting an average sale price fall of 30 per cent compared to one year earlier.

The results include Woodside’s $US1.5bn impairment it announced earlier in February from its Shenzi oil and gas venture in the Gulf of Mexico, acquired when Woodside merged with BHP’s petroleum in June 2022, and its Wheatstone LNG project in Western Australia.

When stripping out accounting losses, Woodside said underlying net profit fell 37 per cent to US$3.3bn for the year ended December 31, 2023, down from US$5.23bn recorded one year earlier.

The decline came despite Woodside posting record annual production of 187.2 million barrels of oil equivalent.

Ms O’Neill has positioned Woodside to capitalise on an expected substantial increase in global demand for LNG, an assumption that drove talks with Santos over a potential merger with Santos. Earlier this month, the two companies said they would not continue merger talks.

Ms O’Neill declined to specify the reasons for talks ending, but said negotiations were triggered by a desire to capture demand.

“We think LNG is a product that will be in high demand and forecasts are suggesting global LNG demand could grow 50 per cent between now and 2033. So Santos was all about growing the LNG business but the parties couldn’t get to a point where we could find a way forward so we mutually agreed to stop discussions.”

Investors in Woodside have cheered the cessation of talks amid concerns about the company overpaying for its smaller rival, but Ms O’Neill has said the company remains interested in other assets — though it will not overpay.

Woodside’s expansion plans have placed it in the crosshairs of environmentalists. Ms O’Neill insists the gas the company produces will allow countries sufficient time to develop zero emission sources while simultaneously weaning off higher carbon dioxide alternatives such as coal and oil.

But in a nod to some activist pressure, Woodside on Tuesday announced it will commit to so-called new energy projects capable of reducing CO₂ emissions by 5 million tonnes per year by 2030.

The pledge will complement Woodside’s existing target to invest $US5bn in green energy projects by 2030.

Environmentalist and activist shareholders, however, rejected the Woodside target as insufficient.

Alex Hillman, lead analyst at the Australasian Centre for Corporate Responsibility (ACCR), said Woodside’s announcement was too little, too late.

“Unsurprisingly given the groundswell of persistent investor concern over the last four years, Woodside has today come to the table saying it is listening and responding to shareholders on climate risk management. However, the small tweaks and change of tone are not what matters, it is the core substance of the company’s strategy that investors care about,” said Mr Hillman.

The ACCR said as a result it will push for rejection of the re-election of Woodside’s chair Richard Goyder.

“It is hard to see how chair Richard Goyder will appease frustrated investors with this climate plan, a high risk choice for a chair facing re-election at the 2024 AGM.” said Mr Hillman.

Woodside shares rose 28c or 0.9 per cent to $30.28.