Production glitches have forced Woodside Petroleum to cut forecast production for 2013 by as much as 10 per cent, despite the contribution from the start of the Pluto project.
Higher output and a decline in the petroleum rent tax helped Woodside lift its net profit to $US873 million ($961 million) from $US818 million in the June half, with revenue edging higher to $US2.86 billion.
It also followed through on its commitment to boost shareholder returns by lifting the interim dividend to US83¢ a share from US65¢ paid a year earlier. This comes after it paid a special US63¢ a share dividend during the half. Earnings a share rose to US106¢ from US100¢. Production in the half rose 22.5 per cent to 41.9 million barrels of oil equivalent, thanks to a full six-month contribution from the Pluto project.
But the group has revised down its full-year output forecast to 85-89 million barrels of oil equivalent, from the 88-94 million barrels forecast earlier.
This is due to an unplanned shutdown of the processing unit at Pluto resulting in the loss of 2 million barrels of oil equivalent, along with the impact of the longer than scheduled maintenance of the Vincent floating storage unit, which has cut output there by a further 1 million barrels. The Vincent unit is not now expected to be back on line until late in the year.
Along with the flagged cut to output, most interest is centred on the renegotiation of long-term supply contracts to north Asian buyers, amid heightened caution that North American gas exports from the US shale oil revolution will undercut the position of long-term suppliers such as Woodside.
Woodside said it expected only a "limited influence" on contract prices from North American exports. North American gas exports would "comprise about 10-15 per cent of global trade by 2025", Woodside said. "Even with this supply, we expect the market in the Asia-Pacific region will remain tight to 2020 and oil-indexed pricing will remain the basis for sales," it said. "With limited new and uncommitted supply options entering the market in the short term, volumes available from Pluto LNG over and above the requirements of the project's foundation buyers are expected to be highly sought after."
Earlier this week, Woodside confirmed that it would pursue a floating plant for its scaled-down $30 billion Browse basin development after earlier shelving plans for the James Price Point onshore processing plant.
The final investment decision for Browse is due in mid-2015, with the initial phase of the development to take until after 2016 to complete.
"It combines lower up-front capex with earlier cash generation to make the project more attractive for our shareholders," Woodside chief executive Peter Coleman said.
"I'm hopeful that we will receive approval from the joint venture partners shortly."
This would pave the way for a start on the detailed design phase of the project, he said.
Mr Coleman said there had been no discussion with its partners in the Leviathan project in Israel to pipe gas to Turkey rather than setting up a gas liquification unit.