Can you point me out a single company that forward sells contingent reserves without clauses subject to FID? WPL doesn't forward sell at all, they have supply contracts, but these are usually tied to a facility, one or two of the LNG contracts are portfolio based, but oil it's better to sell on spot than on a portfolio basis unless you have highly simular chemical properties for the oil.
WPL has long term LNG contracts, mid term and short term to cover about 90% of LNG production, it sells the rest as spot cargoes to manage risk / production fluctuations. Supply contracts for SNE oil are only ever going to get signed / finalised at or after FID.
Woodside has no oil production that is chemically compatible for refining with SNE oil so they also cannot switch out volumes from other contracts. Not all oil is equal and most refineries are very specific in what they take (API / sulphur / other contaminants etc.) most of WPLs liquids sell at a premium to Brent due to their chemistry, and is refined in Asia, SNE will IMO most likely go to Europe and be at a $1-2 discount to Brent.
FAR Price at posting:
5.6¢ Sentiment: None Disclosure: Not Held
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