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Woodside Delays Some Recruiting on Economic Slowdown (Update1)

Bloomberg

 

 

By Angela Macdonald-Smith

Oct. 20 (Bloomberg) — Woodside Petroleum Ltd., Australia’s second-largest oil and gas producer, said it has put on hold recruitment for some posts because of the economic slowdown.

The Perth-based company is still hiring “to fill real positions for our operations and projects that will continue to deliver value to shareholders in today’s world,” Chief Executive Officer Don Voelte said today at a conference in Perth. That includes recruiting for the Pluto, Sunrise and Browse liquefied natural gas projects, he said.

Woodside, 34 percent owned by Royal Dutch Shell Plc, is building the A$12 billion ($8.4 billion) Pluto LNG project off the northwest coast and proposes to develop LNG ventures at the Sunrise field in the Timor Sea and at the Browse fields in Western Australia’s far northwest. The government’s plan to introduce carbon trading in 2010 poses a risk for the development of LNG projects, Voelte said.

The economic slump hasn’t changed Woodside’s expectation for a more-than-doubling in global LNG demand by 2015, from about 180 million metric tons a year at present, and the company still forecasts a shortage in supply out to the middle of next decade, Voelte said. “There’s a big hole to fill over this time period,” he said.

The Australian government’s planned carbon trading system, which wouldn’t provide free emissions permits for LNG producers, is “flawed” and threatens investments in new projects, Voelte said.

Passing on Tax

Woodside will start passing through the additional cost of a tax on condensates from the North West Shelf venture within six months, primarily through higher prices for customers within Western Australia, Voelte said. The costs may be passed on through re-opening negotiations on existing contracts, or through higher prices in new supply contracts, he said. Alcoa Inc. is the venture’s biggest gas customer.

Voelte called for a study on an emergency plan for energy supplies within Western Australia should it experience a further gas shortage similar to earlier this year when a blast at Apache Corp.’s Varanus Island gas plant cut more than 30 percent of the state’s gas. One part of the solution may be to build a gas storage plant at the end of the Dampier-Bunbury pipeline, he said.

To contact the reporter on this story: Angela Macdonald-Smith in Sydney at[email protected]

Last Updated: October 20, 2008 01:36 EDT

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