Wood­side raises $2.5 billion

The Australian Energy Review - - NEWS - CAMERON DRUM­MOND

WOOD­SIDE Petroleum is rais­ing $2.5 billion to ac­quire an ad­di­tional stake in WA’S Scar­bor­ough gas field and progress the de­vel­op­ment of its Browse LNG project to a fi­nal in­vest­ment de­ci­sion (FID). Wood­side will ac­quire Exxonmo­bil’s 50 per cent stake in Scar­bor­ough for an ini­tial $US444 mil­lion, plus an ad­di­tional pay­ment of $US300M upon an FID to de­velop the field. This will give Wood­side a 75 per cent con­trol­ling stake in the project af­ter it bought out BHP’S share in 2016. The cap­i­tal raise will also pro­vide fund­ing for a sec­ond pro­duc­tion unit at its Pluto LNG plant and first-stage de­vel­op­ment of the SNE dis­cov­ery off the coast of Sene­gal. Wood­side chief ex­ec­u­tive Peter Cole­man said th­ese projects were a con­tin­u­a­tion of the com­pany’s pre­vi­ously an­nounced strat­egy of unlocking the Bur­rup Hub and de­vel­op­ing oil in West Africa. “The ac­qui­si­tion of the ad­di­tional in­ter­est in Scar­bor­ough pro­vides greater align­ment, con­trol and cer­tainty over a low-cost, high value op­por­tu­nity ahead of a global LNG sup­ply gap,” Mr Cole­man said. “It will al­low us to de­velop new sup­ply that we ex­pect to be ma­te­ri­ally value ac­cre­tive.” “There is great ex­pected LNG mar­ket de­mand growth and now we have a project that we're con­fi­dent will go to FID in 2020, and can be built at a lower point in the in­vest­ment cy­cle and which can pro­duce in 2025 to de­liver value to Wood­side and its share­hold­ers.” Royal Bank of Canada (RBC) an­a­lyst Ben Wil­son said the equity rais­ing of $2.5bn ap­peared to be de­signed to head off fu­ture pos­si­ble equity over­hang to fund SNE in Sene­gal, Browse FEED to FID, and Scar­bor­ough FEED to FID. “The Scar­bor­ough play is clearly de­signed to lever­age brown­field syn­er­gies through Wood­side’s 90 per cent in­ter­est in Pluto and 17 per cent in­ter­est in the North West Shelf,” Mr Wil­son said. “We have not at­trib­uted value for Scar­bor­ough post the BHP ac­qui­si­tion, as it broadly has the four less de­sir­able “D’s” of gas: deep, dis­tant, dirty, and dry. “The field is about 400km from the on­shore Pluto/nws and about 250km to the off­shore Pluto plat­form. “We are, how­ever, with Wood­side in the ro­bust out­look for the LNG mar­ket driven by China and In­dia.”

“There is great ex­pected LNG mar­ket de­mand growth and now we have a project that we're con­fi­dent will go to FID in 2020.”

Im­age: Wood­side.

Part of the cap­i­tal raise will go to­ward Wood­side’s Pluto LNG plant.

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