SYDNEY (Reuters) - Woodside Petroleum Chief Executive Peter Coleman said there’s little need for more mergers and acquisitions by Australia’s biggest independent oil and gas producer as it works on developing a handful of new projects at home and abroad.
The company, seen as short on growth, has had to rely on a few deals to build up reserves after being snubbed in late 2015 in an $8 billion bid for Oil Search Ltd and walking away from a $2.6 billion gas stake off Israel a year earlier.
“We’re starting to get a pipeline of projects moving through,” Coleman told Reuters after Woodside reported fourth-quarter revenue rose a better-than-expected 2 percent to $1 billion from the previous quarter thanks to higher oil prices.
The $34 billion Wheatstone liquefied natural gas (LNG) project off Western Australia, which Woodside bought into in 2015, is scheduled to start this year after six months of delays, followed by a second stage in 2018, Coleman said.
Wheatstone, operated by Chevron Corp, will contribute more than 13 million barrels of oil equivalent to Woodside’s annual output, when complete.
Woodside expects 2017 production to fall to 84-90 mmboe from 94.9 mmboe last year, in line with two analysts’ forecasts, with Wheatstone’s ramp-up not enough to offset a long agreed drop in the company’s share of domestic gas from the North West Shelf from May.
Woodside’s shares fell 1 percent on Thursday, but analysts attributed that to profit taking following a run-up over the past two months on the back of rising oil prices.
From 2019, Woodside plan to start producing from its Greater Enfield oil project in Australia.
“Do we need to buy something? No,” Coleman said. “Woodside does not need to buy to grow.”
Coleman also said he was anxious to get started on development “as soon as possible” on a promising oil venture off the coast of Senegal that it acquired from ConocoPhillips last October for $440 million.
The Senegal deal gave Woodside 35 percent of the SNE and FAN oil discoveries off the West African country, setting it up to start producing oil early in the next decade.
Woodside last year also bought half of BHP Billiton’s stake in the undeveloped Scarborough offshore gas field assets in Western Australia.
It is drilling in Myanmar, too.
“With their level of activity in the past several year, Woodside certainly can’t be accused of inertia,” said RBC Capital Markets analyst Ben Wilson. “They have been positioning themselves for growth.”
Reporting by James Regan; Editing by G Crosse and Sonali Paul
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