Woodside under the pump as profit falls on lower prices

Woodside Energy’s profit has tumbled by almost three-quarters on lower commodity prices, inflationary pressures and asset writedowns.

The Perth-based oil and gas giant on Tuesday reported a full-year net profit of $US1.66 billion ($2.54b), down 74 per cent, as energy prices return to historic norms.

The underlying profit was $US3.32b for 2023, down 37 per cent, as lower prices were partly offset by higher sales volumes and record production.

CEO Meg O’Neill said Woodside was supplying energy the world needs from a high-quality portfolio in the right locations.

The 2023 result was built on record annual production of 187.2 million barrels of oil equivalent in the first full-year of operations since acquiring BHP’s oil business, she said.

The massive Scarborough LNG project in the Carnarvon Basin off the Pilbara coast was 55 per cent complete by the end of 2023 and Woodside welcomed government plans to reform offshore approvals.

“We are focused on delivering first oil from Sangomar and progressing the Scarborough energy project and Trion development,” she said.

Last week, Woodside sold a 15.1 per cent stake in the project in a $US1.4b deal with Japan’s largest utility JERA that locks in further decades of gas sales to one of Australia’s significant energy customers.

A 10 per cent share in Scarborough was sold to LNG Japan in 2023, and Woodside said the transactions “demonstrate the ongoing demand for new gas supplies to support regional security”.

Merger talks collapsed earlier this month with gas producer Santos on an $80b merger of Australia’s top two fossil fuel companies.

“We continue to be disciplined and value-focused in pursuing new energy opportunities,” Ms O’Neill said.

A year ago, Woodside tripled its annual profit after acquiring BHP’s petroleum assets and benefiting from soaring energy prices sparked by Russia’s invasion of Ukraine.

The 2023 results included impairments of $US1.53b or $US1.92 billion pre-tax, largely for the Shenzi asset acquired from BHP.

Woodside declared a final dividend of US60¢, for a total of $US1.40 for the calendar 2023 year.