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Woodside Looks To Next Major Projects

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The newly enlarged Woodside Energy has been admitted to trading on the New York and London Stock Exchanges and is focused on gaining a full understanding of the assets it has inherited in its all-share acquisition of BHP’s petroleum business.

The acquisition was completed on June 1, 2022 and elevates Woodside to being a top 10 global independent energy company based on hydrocarbon production of 193 million barrels of oil equivalent production in 2021.

Major projects under construction including Mad Dog 2, Sangomar, Shenzi North and Scarborough will supplement that production rate.

Graham Tiver, Woodside’s chief financial officer, told Upstream that BHP’s oil assets in the Gulf of Mexico will underpin Woodside’s growth opportunities, while large long-term LNG and pipeline gas projects, and new energy opportunities will compete for capital.

“We have a capital allocation framework which has the desired rates of return from our three business pillars – oil, LNG and gas, and new energies. It’s a clear framework in terms of how we look at our different business opportunities.”

Beyond the projects that are currently in execution, there are “a suite” of BHP heritage and Woodside heritage field developments “to flesh out in the coming years”.

With the acquisition now completed, “we are without constraints so we can look under the hood and have a good look at those projects. Each one is attractive in their own right but we need to understand them further and deeper,” said Tiver.

Two such opportunities are Trion in the Gulf of Mexico and Calypso in Trinidad and Tobago, both inherited from BHP.

“Trion is a large oil opportunity, it’s at a high level from what we’ve seen so far, the reservoir looks good, long life, quick returns, it will fit into our capital allocation framework but what we need to understand is the above-ground risk being the understanding of relationships with Pemex and the government.”

Calypso is a gas opportunity at an early stage. It could provide a source of gas that could be processed through the Trinidad and Tobago LNG facility operated by BP which has ullage. Importantly, it provides exposure to the Atlantic LNG market, added Tiver.

Woodside’s portfolio offers the very large Browse gas opportunity, “but a lot of work is required before we move to the execution stage” including environmental approvals from the state and federal governments, agreements with the owners of the North West Shelf LNG project, and a carbon capture and storage solution.

Asked if renewable energy sits low on the investment priority list, Tivers said: “No it’s actually quite the opposite, it’s near the top. It’s not a business we can turn on tomorrow, but we feel that working with our customers and building out these products will enable us to work through the energy transition.”

Woodside has a US$5 billion target for investment in new energy products and lower-carbon services by 2030.

The company is working with its customers, particularly in Asia, who “are wanting to generate and source alternative energy, and for us it’s all about ammonia and liquid hydrogen” whereby Woodside can leverage off its huge gas resources and LNG expertise.

Meanwhile, the entire issued share capital of Woodside was yesterday admitted to trading on the main market for listed securities of the London Stock Exchange under the ticker WDS.
This follows on from admission to trading on the New York exchange on June 2.

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