SYDNEY/MELBOURNE, May 22 (Reuters) - Australia's Woodside Petroleum Ltd is counting on the delayed Browse liquefied natural gas project, frontier exploration and acquisitions for future growth, it said a day after walking away from a large gas project in Israel.
The decision to scrap plans to invest $2.7 billion in Israel left a hole in Woodside's near-term growth prospects and a pot of cash in its pocket, which has heightened speculation Australia's top oil and gas company may chase acquisitions.
Chief Executive Peter Coleman said on Thursday he would discuss ways to deploy that cash with the board soon, including a possible return to shareholders. He played down the prospect of big acquisitions, saying they rarely add value.
"If I want to take the sugar pill, we can go buy volume growth and I'll dress it up for you and I'll tell you how good it is. But if you really want to focus on value, then it's a hard road," Coleman told an investor briefing in Sydney.
Any acquisitions Woodside is targeting would be between $1 billion and $5 billion, Chief Financial Officer Lawrie Tremaine said.
Coleman said the company had other options for spending the money that would have gone towards Leviathan, but did not elaborate. However, Woodside said the long-delayed Browse liquefied natural gas (LNG) project would be the foundation of its next phase of growth.
A final investment decision on Browse is expected in 2015, after Woodside and its partners dropped plans last year to build a $45 billion LNG plant onshore and opted to study a floating LNG plant, using partner Royal Dutch Shell's Prelude FLNG plant as a model.
Woodside, which competes with companies like Anadarko Petroleum, BG, ConocoPhillips and Norway's Statoil, is also making a big push into exploration, aiming to spend around $650 million a year hunting in unexplored basins and build up oil reserves to balance its strong gas reserves.
It has already staked out acreage off Myanmar, Ireland, New Zealand and Australia and is looking to pick up acreage in other regions, its exploration chief Phil Loader said.
"Exploration allows us to pursue that growth portfolio," Coleman said.
Woodside shares rose 2 percent, outpacing the broader market, as investors eyed a possible capital return following the scrapping of the company's investment in the Leviathan project in Israel.
Reporting by James Regan and Sonali Paul; Editing by Richard Pullin