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AAP News (Australia): Woodside suffers dip in output, Chinguetti still troubled

Ben Sharples,
Published: Jul 19, 2007

PERTH, July 19 AAP – Woodside Petroleum Ltd has reported a dip in production during the second quarter of 2007, with the trouble-plagued Chinguetti project in Africa continuing to cause headaches.

Woodside, Australia’s largest independent oil and gas producer, delivered an output of 17 million barrels of oil equivalent (Mmboe) in the three months to June 30. The result was six per cent below the 18 Mmboe produced in the first quarter of this year, but nine per cent above the 15.6 Mmboe produced in the corresponding June quarter of 2006.

For the half year, Woodside has produced 35 Mmboe, up on the previous corresponding period’s 29.9 Mmboe. Woodside expects to produce between 72 Mmboe and 78 Mmboe in calendar 2007, but UBS energy analyst Gordon Ramsay said it would be a tough ask for the company to hit the upper range of its forecast. “I guess you have to look at what Woodside has produced over the half and what they have targeted for the year,” Mr Ramsay told AAP. “Certainly it is ambitious to be at the upper end of their target production range at the moment.”

Woodside attributed the drop in production during the second quarter to the sale of the Legendre asset in Western Australia and a fall in Chinguetti’s output. Production from the $1 billion Chinguetti oil field during the second quarter dropped by 23.3 per cent on the previous quarter, with the average output of 18,333 barrels (bbl) per day falling to 15,418 bbl. Woodside said after a brief shut-in during early June, production did not return to pre shut-in levels of around 18,000 bbl per day and has dipped to about 12,000 bbl per day.

Overall, production from Chinguetti has declined by 43 per cent in the six months to June 30. Woodside said it was expecting to bolster production in the second half of 2007, aided by output from the Otway gas project in Victoria, Neptune in the Gulf of Mexico and Stybarrow in WA. Otway has been dogged by construction delays and was originally expected to begin producing earlier in the year.

Woodside said it would also make a final investment decision on its Pluto liquefied natural gas (LNG) project in WA within the next two months, which was expected to cost as much as $10 billion to develop. The oil and gas producer delivered revenue for the quarter of $970 million, up 8 per cent on the previous quarter’s result of $899 million. Woodside, which is 34 per cent owned by Shell, added 71 cents to close at $46.42. AAP bls/jmc

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