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

China’s Wison wins Indonesian FLNG gig from Genting

China's Wison New Energies has secured a contract from a unit of Genting to build a floating LNG unit...

US FERC to decide on Venture Global’s CP2 LNG project

The US FERC is set to decide next week on Venture Global LNG's proposed CP2 LNG project in Louisiana. According...

Golden Pass LNG to speed up pipeline construction

QatarEnergy and ExxonMobil are seeking approval from US energy regulators to increase the peak workforce to speed up the...

More News Like This

Australia’s Woodside makes leadership changes

Australian LNG player Woodside has made changes to its leadership team. Woodside said in a statement on Friday the revised...

Hyundai Glovis, Woodside name LNG carrier in South Korea

South Korea’s Hyundai Samho hosted a naming ceremony for one 174,000-cbm LNG carrier it built for compatriot shipowner Hyundai...

Australia’s Woodside gets $1.45 billion loan for Scarborough

Australian LNG player Woodside has secured a loan worth $1.45 billion from the state-owned Japan Bank for International Cooperation...

TechnipFMC bags Woodside gig worth up to $250 million

TechnipFMC said it had secured a subsea contract from Australian LNG player Woodside worth up to $250 million to...