Australia’s Woodside Petroleum Ltd. finally got what it wanted from Exxon Mobil Corp. And it only cost $744 million. As far back as 2013, Exxon planned to develop a floating liquefied natural gas venture for the Scarborough field offshore Western Australia. Woodside had a different idea. After buying into the project in 2016, it tried to convince the world’s largest publicly traded oil company to send the gas onshore to its own LNG plant. With no sign of an agreement, the Perth-based company said Wednesday it will buy up Exxon’s stake, gaining control of the development.
Woodside requested its shares temporarily halt trading until it announces the outcome of the institutional component of the share sale. The company also announced full-year net income of $1 billion, in line with analyst estimates. For Exxon, Scarborough’s once-promising 7.3 trillion cubic feet of gas fell out of favor with the energy giant as more profitable, less risky LNG opportunities arose in places like Papua New Guinea and Mozambique. Still, the company remains wedded to the floating-production model: ships built to process and export crude are linchpins of Exxon’s plans to harvest massive offshore crude discoveries in Guyana.
Woodside will also use funds from the share offer to develop its SNE oil project in Senegal and bring its Browse project to a final investment decision by 2021, a year later than previously planned. Up to 10 million tons of LNG could be developed from Browse at the North West Shelf complex at an overall project cost of $20.5 billion with Woodside funding up to $6.3 billion of the planned capital expenditure.
Sources and photo-credits: Bloomberg with assistance by Joe Carroll