Woodside Petroleum Ltd. will cancel or defer a number of non-essential activities as part of a 2020 expenditure reduction in light of reduced oil prices and the COVID-19 pandemic.
Total expenditure in 2020 is expected to be reduced by 50% to $2.4 billion (Aus.), including a $100 million reduction in operating expenditure and a 60% reduction in investment expenditure to $1.7-1.9 billion (Aus).
Future external spend has been minimized by reallocating required activities to internal Woodside resources. Employee numbers have been frozen, but graduate hiring will continue.
Impacts of the reduced expenditure include: delay in the company’s target FID for Scarborough and Pluto Train 2 until 2021; delay in the target FID for the Browse (Torosa, Brecknock-Calliance) project; changes to the planned turnaround schedule at Karratha gas plant, with the major turnaround for LNG Train 3 deferred to September 2020 and the major turnaround for LNG Train 4 deferred to August 2021; and deferral of most proposed exploration activities (although some seismic acquisition will continue) reducing overall exploration expenditure by 50% to $75 million.
Finalization of commercial agreements and regulatory approvals will continue for Scarborough, Pluto Train 2, and Browse, and there will be some ongoing engineering work in preparation for final investment decisions.
LNG and oil production have not reduced and deliveries to customers have continued. Woodside’s 2020 production guidance remains unchanged at 97-103 MMboe.