Woodside’s profit nosedives as low oil prices continue to bite

Australian LNG player Woodside reported on Wednesday a 99 percent decline in 2015 net profit, hit by $1.1 billion in asset impairments due to falling oil and gas prices.

Woodside’s net profit in 2015 dropped to $26 million, down from $2.41 billion in the year before. Woodside last time posted a loss in 2002.

Revenue from operations decreased 32 percent to $5.03 billion, the company said. Woodside announced a full-year dividend of $1.09.

The Australian LNG company reaffirmed its 2016 production target range of 86 to 93 MMboe.

Browse FLNG project

Woodside said last year that its Browse FLNG project in Australia would have been break even with oil prices “around $50-$55 a barrel”. However, in the meantime oil prices fell to near 12-year lows below $35 a barrel.

The Browse FLNG development concept is based on three FLNG facilities utilising Shell’s technology to commercialise the Brecknock, Calliance and Torosa fields located approximately 425 kilometres north of Broome in Western Australia.

The Browse FLNG partners had planned to take a final investment decision (FID) on the giant project in the second part of this year.

“I would expect the joint venture partners will meet a number of times as we consider our final investment decision on Browse,” Woodside’s CEO Peter Coleman told reporters on Wednesday.

According to Coleman, “this is not the time to be reckless at all with respect to capital deployment. And this is not the time to make bets the future is going to be rosier just simply because we hope it will be.”

“What’s not clear to me today is are we in the middle of a fundamental structural change in the industry or is this just a short-term disruption, where we’ll go back to long term trends in a relatively short period of time,” the CEO said.

“It’s with that sort of eye that we’re looking at all of our investment decisions today,” Coleman added.

LNG World News Staff