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Woodside closes difficult quarter

19th July 2023

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – Oil and gas major Woodside has reported a 5% decline in production during the second quarter ended June, compared with the first quarter, owing to planned turnaround and maintenance activities.

The Australian major delivered 44.5-million barrels of oil equivalent during the quarter, with sales volumes reaching 48.4-million barrels of oil equivalent, a 4% decline on the first quarter owing to the lower production.

Revenue for the second quarter was down 29% on the first quarter, to $3.04-billion, owing to lower production and lower realised prices.

“It was an extremely difficult period for everyone at Woodside, given the tragic death in early June of a contractor employee at the North Rankin Complex,” said CEO Meg O’Neill on Wednesday.

Western Australian Police and the National Offshore Petroleum Safety and Environmental Management Authority are investigating the incident and Woodside is conducting an internal investigation into the incident.

“Strong underlying operational performance in the second quarter was impacted by planned turnaround and maintenance activities particularly at the onshore Pluto liquefied natural gas (LNG) facility and associated offshore facilities in Western Australia,” said O’Neill.

“The team delivered a successful turnaround, completing the planned activities at Pluto on schedule. While production and sales were lower compared with the first quarter of 2023, they were higher than the corresponding period last year, reflecting Woodside’s expanded operations portfolio.

“In the US Gulf of Mexico, we commenced production from the Argos offshore facility. This was a significant milestone for the Mad Dog Phase 2 project and production is expected to ramp up through the year.

“The Scarborough and Pluto Train 2 project continued to make good progress and is now 38% complete. Fabrication of both the topsides and hull of the floating production unit has ramped up. The accommodation village in Karratha, which will service the Pluto Train 2 construction workforce, is now complete. Pluto Train 2 module fabrication and foundation site works are progressing well,” said O’Neill.

“We conducted a cost and schedule review at Sangomar following the identification of remedial work required on the floating production and storage operation (FPSO). We have taken the prudent decision to conduct the remedial work while the FPSO remains at the shipyard in Singapore. This minimises the impact to the project schedule as it is safer, more efficient and more cost effective than undertaking the work offshore Senegal. First oil is now targeted for mid-2024.

“We also achieved an important step towards value-accretive investment in future growth, taking a final investment decision (FID) to develop the Trion oil field offshore Mexico, subject to the regulator’s approval of the field development plan which is expected in the fourth quarter of this year. Trion is expected to deliver shareholder returns which exceed Woodside’s capital allocation framework targets following its forecast start-up in 2028.

“A FID was also taken for the Julimar-Brunello Phase 3 project, which will provide a new supply of gas to the non-operated Wheatstone LNG facility in Western Australia. We are progressing contracting activities for the plant construction scope and other schedule-critical packages for H2OK and aiming to be ready for an FID in 2023.”

Looking at the full year, Woodside is targeting production of between 180-million and 190-million barrels of oil expenditure, with the company expecting to spend between $6-billion and $6.5-billion on capital expenditure.

Edited by Creamer Media Reporter

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