Woodside Petroleum expects its partners in the $30 billion Browse development off north-western Australia will fall-in behind its decision to opt for a floating gas unit for the project rather than establishing a full onshore processing unit at James Price Point.
The West Australian premier yesterday was highly critical of the decision, since it will cost the state lost jobs and development opportunities.
‘‘We share the premier’s disappointment,’’ Woodside chief executive Mr Peter Coleman said this afternoon, saying that the original development proposal was simply ‘‘not commercially attractive - even going back and taking some costs out of it’’.
The new floating concept avoids establishing onshore facilities.
The final investment decision for the project is due in mid-2015 with the initial phase of the development to take until after 2016 to complete.
‘‘It combines lower up-front capex with earlier cash generation to make the project more attractive for our shareholders,’’ Mr Coleman said.
‘‘I’m hopeful that we will receive approval from the joint venture partners shortly.’’
This will then pave the way for a start on the detailed design phase of the project, he said.
Reporting today, Woodside said higher production and a lower petroleum rent tax helped lift its first-half net profit to $US873 million from $US818 million.
Revenue totalled $US2.86 billion, up from $US2.80 billion, while earnings per share rose to $US1.06 from $US1.00, it said.
The company also lifted the interim dividend to 83 US cents a share from 65 US cents paid a year earlier.
Production rose a strong 22.5 per cent to 41.9 million barrels of oil equivalent, it said, reflecting a full half year contribution from the Pluto project.
However, the group has revised down its full-year output forecast to 85-89 million barrels of oil equivalent from 88-94 million barrels forecast earlier.
This stems from an unplanned shutdown of the processing unit for the Pluto project, which lost 2 million barrels of oil equivalent, along with the impact of the longer than scheduled maintenance of the Vincent floating storage unit, which has cut prospective output by a further 1 million barrels of oil equivalent.
Carbon costs totalled $35 million in the half, it said, with the group receiving an unspecified number of free carbon units.
As it continues to renegotiate long term supply contracts, Woodside said a prospective boost to US gas exports will have only a ‘‘limited influence’’ on its prices.
Demand in north Asia - Japan in particular - will remain strong, it said, pointing to expected demand growth elsewhere in the region.
Woodside said it expects North American gas exports to ‘‘eventually comprise about 10 per cent - 15 per cent of global trade by 2025’’.
‘‘Even with this supply, we expect the market in the Asia Pacific region will remain tight to 2020 and oil-indexed pricing will remain the basis for sales,’’ it said.
‘‘With limited new and uncommitted supply options entering the market in the short term, volumes available from Pluto LNG over and above the requirements of the project’s foundation buyers are expected to be highly sought after.’’