Woodside upbeat about 2020 gas output
Woodside expects to lift output from its gas projects in 2020, after an improved performance in the December quarter.
Woodside Petroleum says it is in the final stretch in negotiations over two of its key growth projects, with a final investment decision looming for Scarborough within months and a critical tolling agreement for its $30bn Browse project ”very, very close”.
Woodside was hoping to have an agreement in place by the end of 2019 to treat Browse gas through the North West Shelf LNG plant in Karratha, allowing the start of front-end engineering and design work.
But wrangling over a tolling price for Browse has delayed work, with US oil and gas giant Chevron — a partner of Woodside in the North West Shelf processing facilities, but not the gas field — refusing to be hurried on a decision.
The delays have led to frustration at both corporate and government levels, but Woodside chief financial officer Sherry Duhe told The Australian on Thursday she believed the end was within sight.
Ms Duhe would not be drawn on how long it will be before a final agreement is reached, but said senior executives from all of the partners, in Browse and the North West Shelf, were heavily engaged in the process.
“It’s very, very close, and at the same time we want to make sure it’s the right deal,” she said.
“All parties are very engaged at a very senior level. There is no ‘holdout’ in terms of senior engagement and will to get it done.”
Ms Duhe said Woodside is also nearing agreement with BHP Group on the $US11bn ($15.9bn) Scarborough gas project after signing a high-level agreement with its partner in December for a price to treat the gas through its Pluto processing facilities.
She said Woodside expects to make a final investment decision on Scarborough early in the second quarter of the year, and said the company is accelerating planning for construction.
Woodside included about $1bn in capital spending on Scarborough in its 2020 outlook in Thursday’s quarterly production report, along with a $US450m final payment due to BHP and ExxonMobil for the acquisition of its stake in the project.
Woodside Petroleum says it expects to lift output from its gas projects in 2020, after delivering an improved performance from its operations in the December quarter.
Woodside said it delivered production of 25.7 million barrels of oil equivalent (MMboe) in the December period, according Thursday’s fourth-quarter production report, a 3 per cent lift on the September period, saying it is well positioned to lift output in 2020.
The oil and gas major, which this month ticked off on development of the Sangomar field off Senegal, said it produced 89.6 MMboe for the full year 2019, and flagged a lift of 7.5 per cent to 15 per cent lift in 2020, to a range of 97MMboe to 103MMboe.
Woodside’s revenue also rose in the December quarter, lifting 12 per cent to $1.3bn from the September period, with chief executive Peter Coleman attributing the increase to an improved performance from its Greater Enfield project.
Woodside shares closed up 20c to $36 on Thursday.
