UPDATE 1-Oil rout casts doubt on Woodside's key LNG project

* Year net profit slumps 99 pct on writedowns

* Core profit halved to $1.1 bln, beats forecasts

* Browse LNG cost cuts offset by weak oil price

* Woodside shares down 3.4 pct (Recasts with CEO comments on Browse LNG)

By Sonali Paul

MELBOURNE, Feb 17 (Reuters) - Woodside Petroleum reported a halving in its underlying profit on Wednesday, and said deep uncertainy over oil prices was weighing on the prospects for its key growth project, a liquefied natural gas (LNG) development off Western Australia.

Australia’s biggest oil and gas producer said it was still unclear whether the oil price rout over the past year marked a short-term low or a fundamental shift in the market.

The Browse floating LNG partners had planned to decide on whether to go ahead with the project, last estimated by the Australian government to cost A$30 billion ($21 billion), in the second half of 2016, but Woodside would not be drawn on when a decision would be made.

“This is not the time to be reckless at all with respect to capital deployment. And this is not the time to make bets the future is going to be rosier just simply because we hope it will be,” Chief Executive Peter Coleman told reporters.

In further blows to Browse, Coleman said the company had not lined up any customers for the LNG and while the project team had succeeded in slashing costs, much of those savings had been offset by the lower oil price outlook.

“What’s not clear to me today is are we in the middle of a fundamental structural change in the industry or is this just a short term disruption, where we’ll go back to long term trends in a relatively short period of time,” Coleman said.

“It’s with that sort of eye that we’re looking at all of our investment decisions today.”

Woodside’s view last year was the project would have been break even with oil prices around $50-$55 a barrel. Prices have since sunk to near 12-year lows below $35 a barrel.

Woodside’s net profit for 2015 slid to $26 million, hit by $1.1 billion in asset impairments after tax, as flagged in January, after it cut its long term oil price assumptions by about 20 percent.

Core profit fell 53 percent to $1.126 billion, which was better than feared thanks to cost cuts. Analysts’ forecasts were around $902 million, according to Thomson Reuters I/B/E/S.

Woodside announced a full-year dividend of $1.09, topping market forecasts at $1.05.

The company is counting on its recent gas discoveries off Myanmar to give it more growth options.

“These are good-sized commercial discoveries, we believe,” Coleman said.

Woodside’s shares fell 5.3 percent on Wednesday, partly due to a further drop in oil prices. ($1 = 1.4049 Australian dollars) (Reporting by Sonali Paul; Editing by Richard Pullin)