By Sarah Byrne
WHILE Woodside Petroleum’s sales revenue was down 20.1 per cent to US$1.4 billion for the first quarter, suffering from lower oil prices, Woodside chief executive Peter Coleman remained positive as he fronted shareholders at the company’s annual general meeting in April.
Mr Coleman told investors the company was on track to meet a targeted US$800 million in savings, with US$560 million already delivered.
“We want to make sure we get $800 million locked away, and then we will reset the base,” he said at the Perth meeting.
Mr Coleman said the company achieved a lot of efficiencies prior to the oil price plummeting, but since then he had seen suppliers become more open about discussing possible reductions to rates.
Referring to the low oil price environment and the need to fund projects at the lower price, Mr Coleman said “we may be in this environment for some period of time.”
Woodside is looking at fast tracking the development of the Greater Enfield oil project, located offshore Exmouth, with Mr Coleman saying the project was benefitting from plummeting oil prices.
Greater Enfield’s complex reservoir was a challenge, particularly with high oil prices because the company struggled to get an acceptable return on the project for the amount of capital they were investing, he said.
“Actually low prices helped us out [with Greater Enfield],” Mr Coleman said.
“I have challenged the guys to bring forward an early development plan for Greater Enfield, but maybe on a partial field development, to take advantage of the costs we are seeing in the industry.”
“If rig prices are down 25% then now is the time to drill wells, if it makes sense,” he added.
“Rather than taking a big bite of Greater Enfield, let’s go and find the sweet spot of this and let’s get started as quickly as we can.”
Referring to what Woodside expects to see over the next 12 months, Mr Coleman said he would like to see greater opportunities in the pipeline, either through organic growth or through exploration, merger and acquisition opportunities.
“What I have got in front of me is arguably a much better set of growth options than we had just a few years ago, but we want to make it even better,” he said.
Mr Coleman said the industry was in a state of flux and change with a significant amount of merger and acquisition activity.
“We will see how that [mergers and acquisitions] play out over the year and how Woodside may or may not participate,” he said.
Woodside had bought Apache’s 50% stake in the Chevron-operated Kitimat LNG project in Canada, though Mr Coleman said Kitimat would still need to prove itself as an investible development.
Mr Coleman said a front-end engineering and design (FEED) entry readiness check for the proposed Browse Floating LNG facility was completed in the quarter with FEED phase entry expected in mid-2015 and a final investment decision due in 2016.
Production volumes were 6.8% lower in the March quarter of 2015 than in the December quarter of 2014, predominantly due to lower LNG volumes at Pluto and lower oil volumes, which were both associated with cyclone activity.