Woodside expects low oil and gas prices into 2021

Australia’s Woodside expects low oil and gas prices to continue for the rest of 2020 and into next year due to the Covid-19 coronavirus pandemic.

Cripling worldwide demand caused by the Covid-19 restrictions has seen oil, gas and LNG prices at its lowest levels for decades. Demand slump also lead to a major oversupply in the market.

“The agreement earlier this month between OPEC, Russia and other producing countries will help reduce the extent of the oversupply,” Woodside head Peter Coleman said Thursday during the company’s annual meeting of shareholders.

Howevher the demand destruction “we are seeing is so significant that low oil prices are likely to persist this year and possibly into next,” he said.

“To be frank, this extraordinary confluence of events is the worst situation I’ve seen for our industry in the 36 years I’ve been in this game,” he said.

North Asian spot LNG prices fell more than 60 percent this week since the beginning of this year to less than $2 per million British thermal units.

Brent crude prices were $24.87 a barrel in light trading on Thursday. For comparison, Brent was near $60 per barrel in mid-February.

“Significant uncertainty”

Woodside, which operates the North West Shelf LNG project and the Pluto LNG project, reported a 21.1 percent drop in revenue in the first quarter hit by the lower prices.

Woodside also slashed its 2020 spending by 50 percent and delayed final investment decision on its Scarborough and Pluto LNG Train 2 developments.

However, the company says it has entered this period of “significant uncertainty” with one of the stronger balance sheets in the industry.

“At the end of March, we had over $4 billion cash on hand, over $7 billion of liquidity and gearing at the low end of our target range,” Coleman said.

“In the past year, we have stress-tested our balance sheet against a number of scenarios, including two years of oil prices at $35 with ongoing oil prices beyond that of $50 flat real, to ensure the robustness of our investment strategy,” he said.

Coleman added that any investment decision by the company would depend on further analysis of a range of factors, including a view of likely oil price into the future.

Most Popular

Glenfarne still expects Texas LNG FID by end of this year

US energy firm Glenfarne confirmed it is targeting a final investment decision on its planned 4 mtpa Texas LNG export project in the port of Brownsville by the end of 2025 after the US FERC issued the final supplemental environmental impact statement for the project.

Kosmos: Tortue FLNG to hit full capacity in Q4

UK-based energy giant BP and its partners expect the 2.7 mtpa Golar FLNG Gimi, which serves the Greater Tortue Ahmeyim LNG project offshore Mauritania and Senegal, to reach its nameplate capacity in the fourth quarter of this year, according to US-based Kosmos Energy.

Equinor’s Hammerfest LNG back online after maintenance

Norwegian energy firm Equinor has resumed operations at its 4.3 mtpa Hammerfest LNG export plant following an extended maintenance shutdown, a spokesperson for Equinor told LNG Prime on Monday.

More News Like This

Woodside scraps US hydrogen project

Australian LNG player Woodside has scrapped its proposed H2OK hydrogen project in Ardmore, Oklahoma.

Australia’s Woodside retires second NWS LNG train

Australian LNG player Woodside has completed the permanent retirement of the second LNG train at its North West Shelf LNG terminal in the Pilbara region of Western Australia due to declining natural gas supplies.

Work progresses on Woodside’s Louisiana LNG export plant

Australian LNG player Woodside is moving forward with construction work on its Louisiana LNG export terminal.

Woodside inks LNG collaboration pact with Hyundai Engineering, Hyundai Glovis

Australian LNG player Woodside has signed a non-binding memorandum of understanding with South Korea's Hyundai Engineering and Hyundai Glovis, establishing a strategic framework to collaborate on LNG project development, engineering services, and shipping logistics.