voelte puts a rocket... www.thewest.com.au/20060621/business/tw-business-home-sto134473.html
Voelte puts a rocket up Woodside management
JOHN PHACEAS
Woodside Petroleum chief Don Voelte yesterday put his senior executives on notice to shape up, after the energy giant was forced to slash its 2006 production target in the wake of production problems in Australia and overseas.
As foreshadowed, Woodside said it expected to produce 72 million barrels of oil equivalent (boe) this calendar year, still 21 per cent more than in 2005, but 5 per cent lower than its previous target of 76 million boe.
The downgrade was slightly worse than expected, as most analysts had already lowered their 2006 forecasts to between 73 and 74 million barrels earlier this month. Mr Voelte pinned the blame squarely on management.
"The need to revise the production target is disappointing and the accountability lies with our management team," he said. "We are not happy with this result and are extremely focused on improvement."
Those comments were being viewed as an internal warning to buck up and as a promise of improvement to Woodside's joint venture partners.
"They are relatively stern words," Hartleys institutional adviser Rob Brierley said yesterday.
"For someone who likes to get on the front foot, as Mr Voelte does, you are disappointed when your predictions don't come true.
''They have been on the front foot as far as saying what they were going to do, so not meeting those forecasts clearly reflects badly on Mr Voelte and his senior management."
Mr Voelte said problems at the new Chinguetti venture in Mauritania, a bad cyclone season in the North-West and commissioning delays at the Enfield and Otway Basin projects accounted for most of the downgrade.
At Chinguetti, which comes under the responsibility of Middle East-Africa director Ian Fraser, two failed production wells have cut field output 40 per cent since start-up in February.
Meanwhile, cyclone-related damage forced a 30-day shutdown at Cossack Pioneer, while first gas from the $1 billion Otway Basin project off Victoria has been deferred until the fourth quarter.
Woodside had been hoping to offset those shortfalls with an early start-up at the $1.5 billion Enfield project in late May. However, a pre-commissioning mishap has since pushed first oil back until next quarter.
Mr Brierley said the WA problems were mostly due to bad luck. But others were not so easily explained, especially at Chinguetti, where well engineering was "clearly a bit off".
Woodside has already seen big management changes under Mr Voelte, including the departures of finance director Doug Bailey, gas marketing chief David Maxwell and North West Shelf boss Jack Hamilton.
A spokesman yesterday declined to comment on whether more management changes were likely.
"Accountability lies with management, as per the release, and we would prefer not to entertain speculation in this regard," the spokesman said.
HDR
hardman resources limited
