Australia’s Woodside says Myanmar exit to impact profit

Australian LNG player Woodside said it has decided to withdraw from its interests in Myanmar, joining its peers Chevron and TotalEnergies who have announced the same move earlier this month.

Woodside has operated in Myanmar since 2013, conducting multiple exploration and drilling campaigns.

It holds a 40 percent participating interest in the A-6 JV as joint operator and participating interests in exploration permits AD-1 and AD-8.

The LNG firm had previously announced that it was placing all Myanmar business decisions under review following the “state of emergency declared in February 2021 and the deteriorating human rights situation in the country.”

Last year, Woodside completed the relinquishment of exploration permits covering offshore Blocks AD-2, AD-5 and A-4 and is in the process of withdrawing from Blocks AD-6, AD-7 and A-7, it said in a statement on Thursday.

Woodside said it would now start arrangements to formally exit Blocks AD-1 and AD-8, the A-6 JV and the A-6 production sharing contract (PSC) held with the Myanma Oil and Gas Enterprise (MOGE).

Profit impact

Woodside expects the non-cash expense associated with the decision to withdraw from Blocks A-6 and AD-1 to impact its 2021 net profit after tax (NPAT) by about $138 million.

This is in addition to the $71 million exploration and evaluation expense for Block AD-7 disclosed in Woodside’s fourth-quarter report on January 20, the firm said.

However, these costs would be excluded from underlying NPAT for the purposes of calculating the dividend, Woodside said.

Woodside CEO Meg O’Neill said while Woodside had hoped to develop the A-6 gas resources with its joint venture participants and deliver “much-needed energy” to the Myanmar people, there was “no longer a viable option for Woodside to continue its activities.”

“Woodside has been a responsible foreign investor in Myanmar since 2013 with our conduct guided by the UN Guiding Principles on Business and Human Rights and other relevant international standards,” O’Neill said.

“Given the ongoing situation in Myanmar we can no longer contemplate Woodside’s participation in the development of the A-6 gas resources, nor other future activities in-country,” she said.

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