Woodside profit soars to $2.7 billion even as oil prices weaken

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Australia’s largest oil and gas company Woodside has delivered a record half-year profit $US1.74 billion ($2.71 billion), up 6 per cent from a year ago as its production was boosted by petroleum assets bought from BHP last year.

Operating revenue jumped 27 per cent to $US7.4 billion in the six months to June 30, the energy giant said in statement to the ASX on Tuesday. Growth was driven by $US2.5 billion in extra revenue from the former BHP assets, which had only been included for one month in the prior-year result and more than made up for a $US878 million sales shortfall from lower oil prices.

Woodside Energy CEO Meg O’Neill said the company’s oil production hit a record in the latest half.Credit: AAP

The average price Woodside received in the latest half dropped from $US96 a barrel of oil equivalent to just $US74, coming off last year’s war-fuelled peaks.

Mining heavyweight BHP sold its oil and gas assets across Australia, the Americas and North Africa to Perth-based Woodside last year as part of its push to decarbonise its operations around the world.

Woodside chief executive Meg O’Neill said her company’s strong financial performance and disciplined capital management enabled it to maintain its dividend payout ratio of about 80 per cent of profits. Underlying net profit was up 4 per cent to $US1.9 billion, with shareholders receiving an 80 US cents per share interim dividend.

“Production for the first half was a record at 91.3 million barrels of oil equivalent,” she said. “The Pluto LNG facility delivered an outstanding 99.9 per cent reliability rate in the five months prior to [a] planned maintenance turnaround, which was completed on schedule.”

Woodside’s Pluto LNG plant near Karratha, WA.

The results come on the day before a meeting with offshore unions that will determine if workers on three offshore platforms supplying Woodside’s North West Shelf liquified natural gas plant take industrial action.

The prospect, plus the chance workers at two Chevron plants in WA will follow within weeks, affects 11 per cent of the world’s seaborne gas supply and has caused concern in international gas markets.

The $73 billion oil and gas giant has three new production projects under way.

In June, Woodside made its first investment in North America since taking over BHP’s assets there, committing to its 60 per cent stake in the $US7.2 billion Trion oil project off the coast of Mexico as it awaits the backing of state-owned partner PEMEX.

Artist’s impression of Woodside’s proposed Trion oil production facility in the Gulf of Mexico.

Meanwhile, the Perth-based company pushed back the first oil production from its wholly owned Sangomar project off the coast of Senegal by six months to mid-2024 after unexpected problems were found on the production vessel under construction in Singapore. The estimated cost of the project rose 24 per cent to $US4.9 billion to $US5.2 billion.

The $US12 billion Scarborough to Pluto gas project remains on schedule to start exporting gas in 2026, but its only offshore environmental approval obtained so far for seismic testing received a legal challenge last week over the extent of consultations with indigenous people.

In June, a worker died in an accident on Woodside’s North Rankin gas platform, the first offshore fatality in Australia in more than a decade.

O’Neill said Woodside had changed its practices based on initial findings from the incident on the North Rankin platform.

“Woodside’s safety performance over the past two years has been below the standard we set for ourselves,” she said. In the first six months of the year, the main measure of safety at Woodside – the number of injuries per million hours worked – fell slightly from 1.8 in 2022 to 1.72, but was still well above the company’s target of 1.0.

Since January, the Woodside share price has risen almost 9 per cent, beating the overall market with the ASX200 index rising just 2.4 per cent.

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