On Tuesday, Australia’s Woodside Petroleum said that it has plans to triple its gas and oil reserve base as the company is pursuing projects in Australia, Senegal, and Myanmar with a combined value of USD36 billion.
If the projects progress successfully, Woodside’s reserve base could reach 3.7 billion barrels over the upcoming seven years. They would also expand the company’s production by 6% a year over the next decade.
Woodside is under deadlines for its projects including the Sangomar oil project in Senegal by the end of this year, Scarborough in Western Australia by early 2020, and Browse gas project in Australia in the first half of 2021.
Woodside and partner BHP Group had agreed on a tolling price for processing gas from the Scarborough field to Woodside’s Pluto LNG plant at USD11.4 billion. The project is now lining up contracts to sell liquefied natural gas (LNG) which is considered to be a big risk since spot LNG prices in Asia are around half the price they were a year ago because of an influx of new supply from the United States and Australia.
The company plans to sell down its 75% stake in Scarborough and is assessing the possibility to sell a 50% stake in the Pluto plant to help fund its huge spending plans.
Woodside would reopen talks with potential partners regarding Scarborough as offers from several international companies were highly conditional among the toll and construction costs’ uncertainty.
BHP has given up its option to increase its share in Scarborough to 35% and will maintain its 25% stake.
Meanwhile, the costs on the Sangomar project had plummeted by 40% to USD4.2 billion. The project is nearing a final investment decision (FID).
Woodside maintains its target to produce 100 million boe in 2020.
