Woodside puts Pluto growth on hold
Woodside Petroleum has shelved another big growth option, revealing it has ceased talks with other resource owners to expand its Pluto LNG venture, a week after abandoning expensive plans to build a new plant at James Price Point.
The start-up of the new $15 billion Pluto venture helped spark a 55 per cent jump in its first-quarter production, but Woodside confirmed there were no immediate options to expand production further, confirming analysts' fears that the oil and gas company's near-term growth options would be stymied.
"At present, there are no active discussions with other resource owners with regard to Pluto expansion," it said in its quarterly production report on Thursday. "Woodside is continuing its efforts in the pursuit of expansion gas and has exploration activities scheduled in the region over the coming years."
Output in the three months to March surged to 21.9 million barrels, up from 14.1 million barrels in the previous corresponding period, on the back of the Pluto ramp-up and the ongoing performance of its North-West Shelf business. Revenues surged by 21 per cent to $US1.44 billion.
The production volumes are in line with Woodside's full-year production guidance.
Investors largely welcomed Woodside's decision last week to abandon a massively expensive plan to build a new LNG plant at James Price Point, with costs reported to have blown out to double initial estimates of $45 billion.
But analysts warned Woodside was facing a plateau in production after the initial swell in production fuelled by the Pluto start-up, and called for either a return of capital or increased investment to sustain near-term growth.
Thursday's announcement means two of Woodside's major LNG expansion plans are now on hold.
Its third, the Sunrise gas venture in the Timor Sea, has been stalled due to a disagreement with East Timor over how the resource should be developed.
Woodside said there had been some progress on this front, having held "several engagements" with stakeholders from the Australian and Timor-Leste governments.
"Although these engagements do not represent any agreement at this stage, the dialogue continues developing common ground with both governments to agree a way forward. The collaborative effort will continue, engaging on all aspects of the development," it said.