At Woodside’s 2020 Annual General Meeting, held on 30 April, Chairman Richard Goyder and CEO Peter Coleman spoke about Woodside’s project plans and what can be expected in the near future. Mr Coleman said the recent confluence of events is the worst situation he has seen for the sector during his 36 years in the industry.
Mr Goyder said plans of higher capital expenditure have been adapted due to the new circumstances that the industry is now operation under.
Woodside recently announced it would delay major growth projects in Western Australia, and therefore reducing the forecast expenditure for this year.
Mr Coleman said the decisions to delay proposed projects and non-essential activities, will contribute to a halving of forecast spending this year, to approximately $2.4 billion.
Woodside has delayed a target final investment decision on developing the Scarborough gas field and expanding the Pluto LNG facility until 2021. The company has also deferred a decision on developing the Browse resource.
Mr Goyder said it is fortunate final investment decisions have not yet been made and the projects have not yet been sanctioned.
“This gives us flexibility,” he said.
“Delaying these projects was the right decision, but when the timing is right, we will be ready to proceed,” he said. “The economy will certainly be in dire need of projects that involve investment and jobs.”
Despite the delays, Mr Coleman said good progress has been made on the Burrup Hub – which is still continuing despite deferrals.
At the start of April, Woodside achieved an important regulatory milestone for Scarborough. The offshore regulator, NOPSEMA, accepted the Scarborough Offshore Project Proposal (OPP), after assessing the potential environmental impacts over the life of the project.
Mr Coleman said Woodside is also aiming to start construction this year of the pipeline component of the Pluto-Karratha Gas Plant Interconnector, which is a crucial part to creating an integrated production hub.
“Our near-term growth is continuing, with a final investment decision reached early this year on the North West Shelf’s Greater Western Flank Phase 3 and significant progress on executing the Pyxis Hub and Julimar-Brunello Phase 2.”
Woodside’s international plans have also progressed. Work started early this year on the Sangomar Phase 1 development in Senegal.
“We are working with contractors, the Government of Senegal and our joint venture partners to evaluate options to reduce total cost and near-term spend whilst protecting the overall value of the investment,” Mr Coleman said.
He notes however that in the cyclical nature of the industry, a number of projects that were proposed globally and are reliant on project financing will likely not proceed and that, in turn, will support LNG prices.
“I am confident that our proposed projects are cost-competitive – and we are now working towards a final investment decision on Scarborough next year.”
