I agree with the sentiment of the heading of this post. WDS, while being beholden to the POO and the POG, is in a very advantageous position. Why do I say this?
1. POG will remain high for some time. Russia has not restarted NORDSTREAM 1.
https://www.theguardian.com/business/2022/sep/02/nord-stream-1-gazprom-announces-indefinite-shutdown-of-pipelineThe implication of this is that gas is in short supply. It is a pity that Scarborough is 4 years away and not 4 months away.
2. As the gas fields that feed the NWS decline, Browse is the obvious next contender to fill the trains. WDS already is doing work on that proposal.
https://www.upstreamonline.com/lng/woodside-back-in-business-on-mighty-browse-and-sunrise-lng-projects/2-1-1287612Why is this advantageous to WDS? The cost of bringing Browse online when you have the processing facility there ready and waiting is much less than other proposals.
3. WDS has a pipeline of Brownfield expansion options that are much cheaper than greenfield production. Why? The incremental CAPEX of brownfield is low and the delivery is short, when compared to greenfield.
4. They have a pristine balance sheet and have the cash flow to fund the expansion. I know that a lot of HC posters were disappointed with the dividend just declared, but if WDS do not need to raise capital or borrow too much money and can use FCF to build the new facilities, then the sp will follow and capital gain will more than offset the smaller dividend
HT1
WDS nevertheless has SANGOMAR with first oil production targeted in 2023!
(20min delay)