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.

- Advertisements -

Most Popular

Spark: spot LNG shipping rates climb to almost $200,000 per day

Spot charter rates for the global liquefied natural gas (LNG) carrier fleet continued to rise this week as the...

Chevron: strike ends at Gorgon and Wheatstone LNG terminals

Unions representing Chevron's workers at the Gorgon and Wheatstone LNG export terminals in Western Australia have on Friday decided...

Japan’s MOL orders more LNG-powered car carriers

Japan’s shipping giant MOL has ordered two more LNG-powered car carriers at compatriot Nihon Shipyard. A spokesperson for MOL confirmed...

More News Like This

Woodside expects to receive first Pluto Train 2 module in Q1 2024

Australian LNG producer Woodside expects to receive the first module from Indonesia at the Pluto Train 2 project site...

Australia’s Woodside and Japan’s Kepco to work on carbon capture and storage

Australian LNG producer Woodside and Japan's Kansai Electric Power have signed a non-binding memorandum of understanding to enable studies...

Woodside reaches deal with unions to avoid NWS LNG strike

Australian LNG producer Woodside and unions representing its workers at North West Shelf offshore gas platforms have reached an...

Woodside’s profit climbs in H1

Australian LNG producer Woodside reported a rise in its first-half profit and production. The Perth-based firm, which is now a...