SYDNEY/MELBOURNE May 22 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
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
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,"
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