— Woodside says production totaled 84.9 million BOE in 2012
— Sticks with guidance for 2013, reflecting higher volumes from Pluto
— Woodside and Japanese partners actively talking to customers for Browse LNG
SYDNEY–Woodside Petroleum Ltd. Thursday said its oil and natural gas output rose 31% last year, as the performance of its flagship Pluto liquefied natural gas plant offshore Western Australia state exceeded expectations since coming online in April.
Annual output of 84.9 million barrels of oil equivalent was broadly in the middle of the guidance that Woodside–Australia’s second-largest oil producer after BHP Billiton Ltd. (BHP) — made in October.
Woodside said its outlook for production this year of 88 million to 94 million barrels of oil equivalent is unchanged, with the increase reflecting higher volumes from Pluto.
Woodside is placing a series of bold bets on natural gas, as major economies including in Asia move to limit the use of crude oil and coal in favor of cleaner-burning fuels. In recent months, the Perth-based company has acquired exploration acreage in Myanmar and bought a 30% stake in the large Leviathan natural gas discovery offshore Israel.
This shift away from crude oil was further underscored Thursday by the proposed sale of its 8.2% interest in the Mutineer-Exeter oil field in Australia to operator Santos Ltd. (STO.AU), a deal which is due to complete before the end of March.
Woodside is stepping up its search for new investments that can boost its production after telling shareholders in August that a drilling campaign to expand its 14.9 billion Australian dollar (US$15.7 billion) Pluto project hadn’t found enough gas.
Under an agreement with the Western Australian state government, Woodside and joint venture partners including BP PLC (BP) and Royal Dutch Shell PLC (RDSB) need to decide whether to start construction of another new Australian LNG project–Browse–on land at James Price Point in the environmentally sensitive Kimberley region.
In a sign that the multibillion dollar project is moving forward, Woodside said Thursday it has started to engage actively with customers as part of a joint marketing agreement signed last year with Mitsubishi Corp. and Mitsui & Co. .
Woodside added that it’s continuing to weigh tender bids for building the offshore and onshore infrastructure at Browse.
Due to be built in a place marked with one of the world’s longest chain of dinosaur footprints, the Browse development is facing opposition from green groups and has angered some traditional land owners. However, Western Australia’s environmental minister approved the project in November on condition that the Woodside-led venture protects the footprints and sea life such as whales and dolphins.
Still, the venture has to overcome several big challenges. The gas not only has a high carbon dioxide content and will be technically challenging to extract, but it is also far offshore, requiring a long pipeline to be built to processing facilities on the coast.
-Write to David Winning at email@example.com