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+--- Thread: Woodside eyeing PNG (/showthread.php?tid=2119)
Woodside eyeing PNG - Palm - 11-27-2012
Woodside looks and likes:
"Woodside Petroleum WPL.AU -0.41% CEO Peter Coleman has shown a liking for pushing the Australian oil producer offshore in recent months–but has contrasting views of two of the world’s energy hotspots.
Papua New Guinea’s potential as an exporter of large volumes of natural gas to Asia means the Southeast Asian country is firmly on the company’s radar for expansion, but East Africa is off limits to Woodside for the time being despite a series of world-class gas discoveries there.
Woodside is scouring the world for opportunities after a large hole opened up in its production profile following the successful start-up of its 14.9 billion Australian dollar (US$15.6 billion) Pluto liquefied natural gas project in Western Australia state. A disappointing exploration campaign nearby has stymied hopes of adding another processing train there.
While it expects to be in a position to decide whether to begin construction of the Browse LNG project in Western Australia by the middle of next year, it would be several years before gas is produced for sale. Analysts think Woodside’s production profile will be virtually flat until at least 2018 unless it makes a big splash offshore through acquisitions or makes a significant oil and gas discovery that can be developed quickly.
So far, Woodside has announced it’s part of a joint venture bidding for offshore exploration blocks near the small Mediterranean nation of Cyprus and expects a decision within weeks. It’s also in the early phase of bidding for a stake in the giant Leviathan field offshore Israel, which is estimated to hold about 17 trillion cubic feet of natural gas and a further 600 million barrels of oil.
The only concrete success in Mr. Coleman’s overseas growth strategy so far has been the acquisition of a 40% stake in an offshore oil and gas exploration block in Myanmar, as the Southeast Asian nation slowly opens up to Western investment following the roll-back of international sanctions.
Mr. Coleman says Papua New Guinea remains part of Woodside’s global screening process, which looks at the size of resources and the ability to add value to existing joint venture owners. Papua New Guinea has an estimated 26 trillion cubic feet of natural gas, which could be developed for export to Asia, while much of the country is lightly explored.
Woodside won’t discuss specific assets in PNG, Mr. Coleman says.
However, at least two companies with discovered natural gas resources in Papua New Guinea are seeking to bring in a new investor by selling assets. Texas-based InterOil said Nov. 16 it expects to agree the sale of part of its interest in two fields and its Gulf LNG project in Papua New Guinea within weeks, while Horizon Oil last week said several large companies in the LNG industry have shown interest in the partial selldown of its natural gas assets there.
Mr. Coleman says Asia and the Mediterranean also feature in its screening of assets. But East Africa isn’t a priority for the company, despite the discovery of 100 trillion cubic feet of natural gas in Mozambique and Tanzania, and estimates by U.K.-based consultancy Wood Mackenzie that as much as 95 trillion cubic feet of gas remains to be found.
“We think East Africa is closed for a while,” Mr. Coleman says.
Woodside watches with interest what is happening in East Africa because of its potential impact on regional LNG sales from 2020, but “the reality is, from an ability to enter into East Africa these days, it is just too expensive,” he says.
Mr. Coleman contrasts competition in East Africa with Woodside’s recent purchase of a stake in an oil and gas exploration block offshore Myanmar.
Woodside sees itself as a first mover in Myanmar where “the rocks are first class”, he says. The country has a mature onshore sector and is looking at opening up offshore in the next couple of years.
“We want to be well positioned to be part of that,” he says. “But you start with the rocks, and the geology there is very interesting to us.”
Turning to the the U.S., Mr. Coleman said the company retains an interest in the “mature” Gulf of Mexico region, despite tighter drilling regulations.
The company is now drilling its first well there since U.S. authorities lifted a moratorium on drilling following the explosion in 2010 of the Deepwater Horizon rig, operated by BP.
“And we’ve got a drilling program that will continue through next year,” he said. “But I think we’re like everybody – we’re continuing to look to see: ‘Can we actually grow in the Gulf of Mexico and, if we do, at what pace? The jury is still out for us on that.”
RE: Woodside eyeing PNG - Tree - 11-27-2012
Most intwesting Duckside. Woodside just may be on the prowl, if not alone, perhaps in a JV with an established partner. You know it's bad in Australia when Woodside JV Browse LNG is considering a Shell 4 Mtpa? FLNG over a land-based 12 Mtpa expanded to 25 Mtpa facility.
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27 November 2012 10:46 GMT
RE: Woodside eyeing PNG - Palm - 11-27-2012
Tree-woodie, have to wonder how happy Woodside is with its equity partner Shell. Remember a couple of years ago when Shell boinked Woodside by selling a huge chunk of its shares after saying it woodn't. Woodn't that be interesting if Woodside made a play for IOC backed by Shell clams?