Woodside ‘in no rush’ for acquisitions after failed Santos talks

Woodside Energy chief executive Meg O’Neill doesn’t believe the group is under pressure to quickly capture another deal after its failed merger talks with Santos.

Handing down a lower full-year profit on Tuesday, Ms O’Neill said that while Woodside was “always going to be looking at ways to profitably grow the business ... we are very comfortable with the portfolio the way it stands”.

Ms O’Neill told analysts Woodside was leaning on WA’s Scarborough gas development, now 55 per cent complete, and its Sangomar and Trion oil projects, in West Africa and the Gulf of Mexico respectively, as well as the $US5b collection of “new energy” projects it sees aiding its transition into cleaner energy.

“Now, as we look further down the track, we are always going to be looking for ways to profitably grow the business,” Ms O’Neill said.

“But there’s no urgency for us to do anything.

“We have assets that are in our portfolio today and teams working on the best way to unlock value from those assets.

“And we’ve been really clear that our strategic priorities are LNG, deepwater oil and new energy, and we will look at a range of other ways to grow in those spaces.”

Lower oil and gas prices and $US1.53 billion ($1.9b) of previously disclosed writedowns on some assets, principally the Shenzi field in the Gulf of Mexico, sent Woodside’s 2023 net profit 74 per cent lower to $US1.66b.

Excluding the impairments, underlying profit was 37 per cent off at $US3.32b.

Directors declared a lower final dividend of US60¢ a share.

Woodside shares were 1.1 per cent higher at $33.30 as at 9.25am.

Perth-based Woodside also used the financial results to announce a new target to approve new projects capable of reducing carbon emissions by five million tonnes by 2030.

However, its latest climate plan progress report underscored the challenges it faces in balancing shareholder and public expectations, showing emissions across its portfolio rose 15 per cent last year, though emissions at the projects it operates were 4 per cent lower.

The group’s production, swelled by the purchase of BHP’s petroleum business nearly two years ago, came in at record 187.2m barrels of oil equivalent.

However, a 30 per cent fall in its average realised sale price to $US68.60 a barrel outweighed the production boost, sending revenue 17 per cent lower to $US13.9b.

Ms O’Neill also disputed the preliminary findings of WA’s domestic gas inquiry that suggested the State’s big LNG exporters were not complying with the spirit of legislation that preserves gas for the local market.

The reservation policy formalised by the Carpenter Government in 2006 requires LNG exporters to set aside 15 per cent of a project reservoir for the local market but the inquiry found “on average” just 8 per cent had been delivered.

Ms O’Neill said “the facts” showed that since starting production in WA 40 years ago, Woodside had provided domestic gas equivalent to more than one-third of its LNG exports.

“We’ve been in a constructive partner in the domestic gas market and we will continue to work with customers in this market,” he said.

Big industrial customers in mainly WA’s southwest claim they cannot get competitively price on long-term contracts.

However, that is disputed by Ms O’Neill, who said the priority should be on ensuring new gas projects are brought on line to fill a forecast supply gap next decade when the State’s coal-fired power generation is wound down.

Woodside is frustrated at what it sees the slow pace of approvals for its next major gas project, Browse, off northern WA.

“I wouldn’t be worried about the short-term (gas market), that will solve itself, but the 2030s could be a real challenge if we don’t get any projects approved.”