Cyclones hit Woodside production

energy

WOODSIDE Petroleum's production for the first three months of the year fell 5 per cent compared to the previous quarter because of cyclones, but it remained focused on progressing huge liquefied natural gas development projects to ensure future production growth.
Australia's largest independent oil and gas company produced 18 million barrels of oil equivalent in the March quarter. That gave it $900 million in revenue, down from $1.1 billion in the December quarter, when sales prices and volumes were higher.
Most of Woodside's sales and production came from the North-West Shelf project it operates off the West Australian coast.
The company has built or is constructing oil projects in Australia, West Africa and the Gulf of Mexico to supplement its production. But it expects most of its growth over the next decade to come from three giant LNG projects - Pluto, Browse and Sunrise.
Woodside's board is expected to give final approval to the wholly owned Pluto development in the middle of the year. The company has already booked the gas as reserves and is ordering long lead-time items.
But the timeline for its Browse and Sunrise projects - which Woodside operates but does not wholly own - is more uncertain.
In a presentation at the Australian Petroleum Production and Exploration Association conference in Adelaide this week, Woodside development director Paul Moore said the company hoped to make a final investment decision on Browse by 2009.
He said Woodside was leaning towards the construction of an offshore LNG plant on the Scott Reef, rather than an onshore plant in the Kimberley in an effort to save "several billion dollars" of costs.
Some analysts have estimated Browse could cost $17 billion, topping the $15 billion estimate for the Gorgon LNG project operated by Chevron.
But Woodside is already facing opposition to its plan. World Wildlife Fund Australia chief executive Greg Bourne - the former head of BP Australasia - yesterday said his organisation would oppose the development of a plant on Scott Reef.
"I still believe we can do LNG in the Browse Basin," Mr Bourne said. "I am absolutely confident of that." But he added there was no need to risk damaging the reef just because the option was "cheap and easy".
He said his organisation wanted to work with Woodside, its other joint venture partners and the Federal Government to come up with a more sensible solution as quickly as possible.
Robert Pritchard, the head of Sydney consultancy ResourcesLaw International, noted that no new LNG projects had been approved worldwide in 2006 or so far this year.
"The development of LNG projects in Australia is in danger of faltering because their scale, their escalating cost [and] their technical complexity … make them easy prey for a wide range of opportunists, opponents and perfectionists," he said.