Herald Sun

Off­side on LNG tum­ble

- EVAN SCHWARTEN ENERGY

PLUNG­ING oil and gas prices have al­most halved rev­enue at energy gi­ant Wood­side Petroleum.

Sales rev­enue of $US898 mil­lion ($A1.22 bil­lion) in the three months to June was down 47 per cent from $US1.68 bil­lion a year ago, mainly due to plum­met­ing prices for liq­ue­fied nat­u­ral gas.

The com­pany’s pro­duc­tion of LNG was also lower than a year ago, due to planned out­ages at its Pluto plant off the coast of Western Aus­tralia.

Some of that re­duc­tion was off­set by a lift in vol­ume mostly through new oil pro­duc­tion from the Bal­naves field, also off WA.

Wood­side snapped up Apache Cor­po­ra­tion’s 65 per cent stake in Bal­naves in a $US2.8 bil­lion deal fi­nalised in April.

LNG prices are linked to crude oil prices, which dived sharply in late 2014 due to an over­sup­ply in the mar­ket, driven by US shale oil pro­duc­tion and the Or­gan­i­sa­tion of the Petroleum Ex­port­ing Coun- tries car­tel’s re­fusal to cut sup­ply.

Wood­side said the de­layed slide in prices re­ceived for its LNG was linked to a four­month lag in the Ja­panese crude oil im­port price, on which the com­pany’s con­tracts are based.

Ja­panese crude prices dropped 35 per cent dur­ing the quar­ter to $US64 a bar­rel, the com­pany said. Wood­side pro­duced 20.1 mil­lion bar­rels of oil equiv­a­lent dur­ing the June quar­ter, down nearly 8 per cent on the March quar­ter.

In its pro­duc­tion re­port, Wood­side was also at pains to point out its pro­posed Browse float­ing LNG joint ven­ture off the north WA coast had en­tered front-end en­gi­neer­ing and de­sign dur­ing the quar­ter.

The com­pany’s re­duced sales rev­enue was within mar­ket ex­pec­ta­tions.

Wood­side shares dropped 39c, or 1.1 per cent, to $34.57.

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