wpl to double oil/gas output

Woodside forecasts double oil and gas output
By Barry FitzGerald
Resources Editor
November 18, 2004

Woodside Petroleum confirmed its high-growth status at a marathon briefing of analysts in Sydney yesterday, with oil and gas production forecast to more than double by the end of the decade thanks to continued growth of its liquefied natural gas business in Australia and rising oil production from Africa.

But the group all but admitted defeat in its expensive attempt to become a significant player in the Gulf of Mexico, a region in which BHP Billiton is enjoying success with its Mad Dog and Atlantis developments and, more recently, its Shenzi oil discovery.

Woodside told analysts it expected a modest increase in production to about 60 million barrels of oil equivalent in 2005, rising to about 80 million barrels in 2007. But the group's $4 billion investment program in new projects would set it up for a production surge to as much as 140 million barrels in 2010.

Chief executive Don Voelte told analysts the charge to the higher production levels did not take account of any acquisitions the group might make. It has got close to a couple of billion-dollar-plus acquisitions in recent years but baulked at the last moment.

"We have got the capability for acquisitions. We have got the financial (balance) sheet," Mr Voelte told the briefing.

Divestments are also expected to feature, with the group raising questions about the long-term future of its Gulf of Mexico interests, essentially its share in the Neptune oil discovery and some gas interests.

Woodside's strategic planning director, Betsy Donaghey, told analysts that Woodside's global focus was on developing material businesses centred on oil and gas production hubs.

She said that, while Woodside was working hard to make the Gulf of Mexico "work for us", it would have to look at whether it could meet the hub criteria.

Woodside also said development planning for the controversial Sunrise gas project in the Timor Sea was nearing completion. But further work on the $3.7 billion project was in jeopardy because of the dispute between East Timor and Australia on maritime boundaries.

Woodside shares closed 52 ¢, or 2.8 per cent, up yesterday at $19.09. That is down from its recent peak of $20.45 in response to record oil prices but well up on its 52-week low of $13.17.