Woodside Expects Rise in LNG Production This Year
January 17 2018 - 6:33PM
Dow Jones News
By Robb M. Stewart
MELBOURNE, Australia--Woodside Petroleum Ltd. (WPL.AU) flagged a
strong pick-up in annual liquefied natural gas production this year
as it braces for stronger oil prices to flow through to the revenue
it gets for exporting natural gas.
The Australian oil-and-gas producer on Thursday forecast an
improvement in volumes across its operations in 2018, as a jump in
LNG output with the recent start up of Chevron Corp.'s (CVX)
Wheatstone venture in Western Australia offsetting weaker output of
liquids and gas piped to the domestic market.
The guidance follows a quarter-on-quarter increase in production
and sales revenue in the final three months of 2017, although
declines against the same quarter the year before that left annual
output at the lower end of guidance narrowed by the company in
October after a delay in first LNG from the Wheatstone project.
Woodside said it expects production in 2018 to rise to between
85 million and 90 million barrels of oil equivalent, after falling
11% last year to 84.4 million. That is set to be driven by a rise
in LNG output to 69 million-71 million barrels from 61.7 million in
2017, the company said.
Woodside's production was expected to recover over the coming
years as new projects begin operating. Chevron's US$34 billion
Wheatstone venture began producing in October, after previously
targeting a mid-year start, and delivered its first cargo to
Japanese buyers in November.
The performance in the final quarter of last year was
underscored by the launch of Wheatstone as well as record
production and 100% reliability at the Pluto LNG operation, Chief
Executive Peter Coleman said. Stronger oil prices in the latest
quarter are likely to flow through to higher realized LNG prices
this quarter, he added.
Fourth-quarter output reached 21.9 million barrels, up 7.9% on
the previous quarter but down from 23.8 million a year earlier.
Revenue for the quarter rose 2.7% versus the prior three months but
was down 6.9% on-year at US$939 million despite stronger
prices.
Woodside said the second production line at the Wheatstone
venture is set to produce its first LNG in the second quarter, and
domestic gas production during the current half.
In Western Australia, Woodside has stakes in the North West
Shelf LNG project, which has been operating since 1984, and the
Pluto LNG plant that began producing in 2012. It closed a US$2.8
billion deal in 2015 with Apache Corp. (APA) that included a 13%
stake in the Wheatstone project, and in 2016 agreed to buy BHP
Billiton Ltd.'s (BHP.AU) Scarborough natural-gas assets in the
Carnarvon Basin far off Western Australia state for as much as
US$350 million.
In mid-November, Royal Dutch Shell PLC (RDSA) sold its final 13%
stake in Woodside for about US$2.7 billion, removing what analysts
had viewed as a share overhang. Shell became a shareholder in the
1960s when it partnered with the Australian company on the North
West Shelf project, but had been steadily reducing its investment
for years.
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
January 17, 2018 18:18 ET (23:18 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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