PERTH (miningweekly.com) – Energy major Woodside on Thursday reported record annual production of 100.3-million barrels of oil equivalent for the 12 months ended December, despite a 2% fall in the December quarter production.

Annual production in 2020 was 12% higher than that achieved in 2019.

Production during the three months to December reached 24.9-million barrels of oil equivalent, with sales revenue for the period up by 32% on the September quarter, to A$920-million, on the back of a 9% increase in sales volumes, of 29.1-million barrels of oil equivalent, and higher prices.

“Our teams delivered significant progress on our growth projects during the fourth quarter. Production licences were awarded for the processing of Scarborough gas through an expanded Pluto facility and we remain on track for a targeted final investment decision on the development in the second half of this year,” said Woodside CEO Peter Coleman on Thursday.

“In another sign of market support for Scarborough, we have recently doubled the volume of gas to be supplied to Uniper from 2021 under our existing binding long-term sale agreement.”

Woodside previously said that first production from the Scarborough gasfield has been targeted for 2026. The company at the start of last year reported a 52% increase in the resource volume at the Scarborough field, from 7.3-trillion cubic feet to 11.1-trillion cubic feet.

“Oil and gas prices have strengthened considerably heading into the first quarter of 2021. We agreed to our highest ever spot liquefied natural gas (LNG) price for delivery in the coming quarter, surpassing our previous record set in 2012.

“Similarly, Vincent crude and Wheatstone condensate are also being priced at all-time record premiums to Brent, compounding the impact of the sharp increases in crude pricing and reflecting continued improving economic conditions in much of Asia,” said Coleman.

He noted that in Senegal, Woodside completed the acquisition of Cairn’s interest in the Sangomar offshore oil development and a contract was awarded for the operations and maintenance of the floating production storage and offloading facility, which is targeted for delivery and first oil in 2023.

Earlier this week, Woodside inked a sales and purchase agreement with fellow listed FAR over its rights over the Rufisque offshore, Sangomar offshore and Sangomar deep offshore (RSSD) contract area, after exercising its pre-emptive rights to FAR’s interest and matching a $45-million offer from ONGC Videsh Vankorneft.

FAR shareholders are expected to meet on February 18 to vote on the Woodside transaction.

Coleman also pointed out that the North West Shelf project participants executed fully termed agreements to process third-party gas from Pluto and Waitsia, marking the first step towards securing the long-term future of Australia’s first and largest LNG plant as a tolling facility.

Looking ahead at 2021, Woodside has set a production guidance of between 90-million to 95-million barrels of oil equivalent, while its capital expenditure guidance has been set at between $2.9-billion and $3.2-billion.

Meanwhile, Woodside on Thursday also reported that it had inked a memorandum of understanding (MoU) with the state government of Tasmania that outlines the Tasmanian government’s support for the proposed H2TAS project, a renewable hydrogen production facility at Bell Bay that capitalises on the state’s advantage in green energy.

The proposed H2TAS project is a renewable hydrogen project located in Tasmania’s Bell Bay advanced manufacturing zone, a heavy industrial precinct north of Launceston.

The proposal involves a 10 MW pilot project producing 4.5 t/d of hydrogen for domestic use, targeting the transportation sector.

In parallel with the MoU, Woodside has executed a non-binding term sheet with Tasmanian natural gas retailer Tas Gas to develop a framework for blending and for the potential associated sale of green hydrogen into the Tasmanian gas network.

Coleman said the agreement highlighted the Tasmanian government’s commitment to becoming a leader in large-scale renewable hydrogen production, decarbonising the challenging sectors in the state’s economy and supporting local jobs, training and investment.

“Woodside shares the Tasmanian government’s net-zero aspiration and welcomes the government’s leadership in supporting the growth of a domestic hydrogen industry. The government has taken concrete actions such as creating the Tasmanian Renewable Hydrogen Action Plan, establishing the Tasmanian Renewable Hydrogen Fund and signing this MoU.

“Woodside is focused on moving beyond feasibility studies and is targeting hydrogen production at H2TAS in the first half of 2023, following a targeted final investment decision in the third quarter of 2021. Importantly, this project would create local construction and operational jobs and new opportunities for Tasmanian businesses,” he said.

The term sheet with Tas Gas marks another significant milestone for H2TAS, the only Tasmanian project among seven shortlisted in the Australian Renewable Energy Agency’s A$70-million Renewable Hydrogen Deployment Funding Round, with the final application submitted this month.