Woodside ponders 'range of options' for African assets

Woodside Petroleum Ltd. is restructuring its asset portfolio in a move that is likely to include the Perth-based firm's exit from Africa.

Rick Wilkinson
OGJ Correspondent

MELBOURNE, Aug. 24 -- Woodside Petroleum Ltd. is restructuring its asset portfolio in a move that is likely to include the Perth-based firm's exit from Africa.

During a recent earnings briefing, Woodside Chief Executive Don Voelte said his company was considering a range of options for its African business. These options included trading the assets for interests in other companies' projects, spinning off the African assets into a separate company, or just selling them off completely.

The reasons behind the possible move, Voelte said, include Woodside's plan to refocus on its LNG business and "other areas that are more attractive." Voelte said in addition to developing its Australian gas assets such as Pluto, Browse basin, and Greater Sunrise fields, Woodside wants to move into Atlantic Basin LNG.

Voelte also expressed confidence that Woodside's OceanWay LNG receiving terminal, proposed for off California, will gain environmental approval.

Voelte was adamant, however, that the Africa project review was not being conducted due to operational disappointments in that country. "It's not because of failure," he said. "It's a selection process of where we want to go forward. We have created value in Africa, but the question is: Is it something we want to go forward with versus the opportunities we have in LNG?"

Nevertheless Woodside has had a disappointing run in Africa, particularly with production from its Chinguette oil field off Mauritania. Since coming onto production early last year, reserves at Chinguette have been halved and production figures are well-below initial expectations. The field's production has declined from 70,000 b/d when it came on stream in February 2006 to 15,000 b/d currently.

Woodside also has been frustrated after drilling a dry hole in the deepwater Pamboo-1 wildcat off Kenya. The company also has had a disappointing exploration campaign onshore Libya.

Separately, Woodside also holds a stake in the producing Ohanet natural gas venture in Algeria.

Funds freed by the exit from African would partially go towards funding the company's ambitious plans for its growing LNG business kicked off recently with an $11.2 billion (Aus.) commitment to develop Pluto LNG by the end of 2010 (OGJ Online, Aug. 6, 2007).

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