Woodside Unveils Ambitious Plan To Triple Reserves

By Glenn Dyer | More Articles by Glenn Dyer

Ambitious plans revealed yesterday by Woodside Petroleum for the next seven years at an investor day presentation.

Australia’s biggest independent oil and gas group reckons it can triple its gas and oil reserve base in the next seven years by investing in projects in Australia, Senegal and Myanmar valued at more than $US36 billion.

The key projects for that growth will depend on decisions to go ahead with the Sangomar oil project off Senegal by the end of this year, the huge Scarborough gas project off Western Australia in early 2020 and the even larger Browse gas project in the first half of 2021.

Woodside said it would triple its reserve base to 3.7 billion barrels over the next seven years, if the green light is given to the Scarborough and Browse projects off Western Australia, Sangomar in Senegal and the A-6 project in Myanmar.

Those projects all together will help Woodside expand its production by 6% a year over the next decade, CEO Peter Coleman told yesterday’s briefing in Sydney.

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

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

At the same time, Woodside plans to sell down its 75% stake in Scarborough.

Chief Financial Officer Sherry Duhe said the company would not rush into a sale, looking to make sure it gets the best value.

BHP will maintain its 25% stake, having given up an option to increase its stake to 35%.

Woodside also confirmed that costs on the Sangomar project in Senegal had increased by 40% to $US4.2 billion, as previously reported by its minority partner FAR Ltd, adding that the two companies are nearing a final investment decision for the project.

Woodside also trimmed its 2019 output guidance to 89 million to 91 million barrels of oil equivalent.

It had previously forecast output at the lower end of 88 million to 94 million barrels of oil equivalent.

Woodside shares closed up half a percent at $34.43.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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