- Oil and gas giant, Woodside Petroleum (WPL) has put billions of dollars of major projects on hold, due to the uncertainty of COVID-19 and the drop in oil prices.
- Woodside will slash spending by 50 per cent and delay its major LNG projects: Scarborough and Browse
- These projects have a combined value of US$53 billion
- The ASX 200-lister isn't the first to do this
- Major energy producers such as Oil Search and Santos have also cut spending and deferred projects
- Woodside is down 3.06 per cent on the market this afternoon, trading at $17.45 per share
Oil and gas giant, Woodside Petroleum (WPL) has put billions of dollars of major projects on hold due to the uncertainty around the COVID-19 pandemic.
Woodside will slash spending by 50 per cent and delay its major LNG project Scarborough and Browse, with a combined worth of $53 billion, to protect the company against the fall in oil prices.
Since the start of the year, the benchmark Brent crude and West Texas Intermediate oil prices have halved, falling below $US30 a barrel.
The company said it will defer an investment decision on its US$11 billion ($18.2 billion) Scarborough gas projects in Western Australia.
Additionally, it will also delay decisions on the Pluto Train 2 and the $US20 billion ($32 billion) Browse project.
CEO Peter Coleman said all steps were being taken to protect the wellbeing of those work for Woodside, guarantee energy supplies and maintain value for shareholders.
"These are extraordinary times, that no one could have foreseen, but Woodside enters this period of significant uncertainty with one of the stronger balance sheets in our industry and world-class, low-cost producing assets, which are resilient to commodity price fluctuations," Peter said.
"Our disciplined approach to cash flow and debt management has positioned us to respond quickly and decisively. The measures we are implementing will preserve cash during these challenging months and ensure that in the longer term we can successfully execute the growth strategy we have in place," he added.
Peter said the development of the Scarborough and Browse gas resources, through Woodside’s proposed Burrup Hub, remains among the world’s most cost-competitive LNG investment opportunities.
All of Australia’s biggest energy producers including Woodside, Oil Search and Santos have cut spending and deferred projects.
Woodside is down 3.06 per cent on the market this afternoon, trading at $17.45 per share at 2:40 pm AEDT.