Woodside plans to splash $5 billion on new energy projects

Australian LNG player Woodside has revealed a new target to invest $5 billion in emerging new energy markets such as hydrogen by 2030.

Woodside CEO Meg O’Neill announced this strategy on Wednesday during a virtual event.

“We expect LNG to remain an important part of the energy mix in our region for decades to come, both as a lower-carbon source of fuel for coal-dependent countries and as convenient firming capacity for renewables,” O’Neill said at the investor briefing.

“But our significant investment target in new energy is aimed at positioning Woodside as an early mover in this evolving market and supporting the decarbonization goals of our customers,” she said.

The firm has plans to build at least three hydrogen production plants, including the recent announcement for the H2OK project in the US and the two Australian projects, namely H2Perth and H2TAS

“We expect that in the mid-2020s the transition to new energy will be underway, including the start-up of the first of our own projects,” she said.

Merger with BHP’s oil and gas business

Woodside said last month it had signed a binding merger agreement with BHP’s oil and gas business. On the same day, it also took a final investment decision on the Scarborough and Pluto LNG Train 2 developments worth about $12 billion.

The signing of the share sale agreement follows the merger commitment deed revealed in August.

Under the deal, Woodside will acquire the entire share capital of BHP Petroleum International in exchange for new Woodside shares.

On completion of the merger, Woodside will issue new shares expected to comprise about 48 percent of all Woodside shares on a post-issue basis as consideration for the acquisition of BHP Petroleum.

Moreover, the merger would create a global top 10 independent energy company by production and the largest energy company listed on the ASX, according to Woodside.

“The rationale for the merger with BHP’s petroleum business is compelling. After completion, Woodside will have a larger, diversified portfolio of long-life assets and increased cash generation to build resilience and support future investment and shareholder returns,” O’Neill said.

“The merged portfolio would have an exciting pipeline of near-term developments: Sangomar in Senegal; Mad Dog Phase 2, Shenzi North and other attractive opportunities in the Gulf of Mexico; and Scarborough offshore Western Australia,” she said.

“These, together with other potential oil, gas and new energy developments, will
provide an enviable hopper of opportunities competing for capital,” O’Neill said.

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