Spotlight On: Meg O’Neill

Woodside CEO and managing director Meg O'Neill
Woodside CEO and managing director Meg O'Neill (Image courtesy of Woodside)

Woodside Petroleum Ltd and BHP Group recently announced they had entered into a merger commitment to combine their respective oil and gas portfolios, creating a global top 10 independent energy company by production. Here, Energy Source & Distribution speaks exclusively to Woodside CEO and managing director Meg O’Neill, who will lead the newly formed entity.

In what is one of the biggest mergers Australia’s energy industry has ever seen, the Woodside and BHP deal is set to deliver a stronger balance sheet, increased cash flow and the financial ability to finance planned and new energy sources in the future.

“The proven capabilities of both Woodside and BHP will deliver long-term value for shareholders through our geographically diverse and balanced portfolio of tier 1 operating assets and low-cost and low-carbon growth opportunities,” Woodside CEO and managing director Meg O’Neill said at the announcement of the merger commitment.

“The proposed transaction de-risks and supports Scarborough final investment decision later this year and enables more flexible capital allocation. We will continue reducing carbon emissions from the combined portfolio towards Woodside’s ambition to be net zero by 2050.”

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While the combined business will benefit from the joint management and technical petroleum expertise of both companies, O’Neill will become CEO and managing director of one of the world’s biggest energy companies.

“Woodside is an amazing company with an incredible history. Since its inception it has developed from a small explorer to the pioneer of Australia’s LNG industry, and with the completion of the merger it would become one of the world’s leading independent energy companies,” she says.

“It’s an honour to have been given the opportunity to lead the company through such an exciting, transformational period, and also to take on the challenge of not only managing the expanded oil and gas business but driving progress in decarbonisation and new energy, such as hydrogen.”

The significance of this milestone, she says, is less about the title and more about the opportunity to make an impact and inspire.

“I think a great leader is a person who is able to inspire others to achieve more than they think possible,” O’Neill says.

“Leadership starts with modelling the values and behaviours you want in the organisation, listening deeply to understand, and incorporating a wide range of views in decision making. Great leaders are willing to take courageous action, and bring the team along with those big decisions.

“I came to Woodside in 2018 to run the operations side of the business and subsequently was asked to oversee both developments and marketing. That gave me a breadth of knowledge of Woodside’s business, which positioned me well to take on the role of CEO,” she says.

“When you come into senior executive roles you are always thinking how you might make the biggest impact on the company and I’m now relishing the opportunity to make a difference and apply my own vision to our long-term strategy.”

Asked about the biggest benefits of the merger, O’Neill says it represents a highly attractive proposition for Woodside and BHP shareholders while strengthening opportunities within the oil and gas sector.

“Together, the two businesses can create greater value for shareholders than they can apart,” she explains.

“Both sets of shareholders will benefit from the estimated annual merger synergies of US$400 million, with enhanced cashflows underpinning shareholder returns while allowing for investment across the portfolio.

“The merger creates a top 10 global LNG producer and transforms Woodside by doubling production, diversifying our portfolio and offering multiple growth opportunities. The merged business will have the balance sheet, cash flow and financial strength to fund planned developments in the near term and low-carbon opportunities now and into the future.”

The merger also looks set to seal the deal for Woodside’s Scarborough LNG project—potentially Australia’s last major LNG project of its kind to be developed.

“The merger simplifies and aligns the ownership of Scarborough and streamlines the path to a final investment decision this year on the development of the offshore gas resource and the addition of a second production train at our Pluto LNG facility,” O’Neill says.

“Scarborough is a globally competitive development and will be among the world’s lowest-carbon sources of LNG for customers in North Asia, who will have growing demand for gas in the second half of this decade.

“The enlarged Woodside, with the benefit of a stronger balance sheet and sustained cash flows, will be well positioned to fund Scarborough and other development projects, while maintaining or enhancing its returns to shareholders through the investment cycle.”

In light of the recent IPCC report, which provided a sobering view of the impacts of global warming, I ask O’Neill about her personal views on striking the balance between economic and environmental responsibility.

“We know that climate change is one of the biggest challenges we face today and recognise that as an energy producer we have a very important role to play in helping the world decarbonise: by reducing emissions in our own business and helping our customers in their journey to a lower carbon future,” she says.

“After the merger, Woodside will remain predominantly a gas company, accounting for about 70 per cent of our production, and we believe gas has a hugely important role to play in helping the world decarbonise, particularly given the countries we sell to—Japan, South Korea and China—need gas to decrease their reliance on coal and meet their own emissions reduction targets.

“At Woodside we’ve made clear commitments to reduce our own net emissions by 15 per cent by 2025 and 30 per cent by 2030, on a pathway to net zero by 2050. Those decarbonisation commitments will be applied to the merged portfolio, as will our clear undertakings to transparently report reductions in net emissions.

“We’re also exploring with our customers opportunities to supply them with zero-carbon energy in the form of ammonia and renewable hydrogen to help them decarbonise.

“The merger will provide Woodside with the financial strength to invest in the energy transmission, including those opportunities in hydrogen and ammonia that we are already pursuing.”

Asked how the pandemic has changed day-to-day operations at Woodside, O’Neill says the company has navigated COVID with two main goals in mind: safety and supply.

“It’s been more complex and required additional planning, but we’ve been able to safely sustain all of our core activities and operations, making sure our people stay healthy and ensuring security of supply to our customers.

“We’ve also worked hard over the past 18 months to ensure our international supply chains have not been impacted.”

While the country’s leadership seems to be at odds in terms of how to handle the Delta strain, with some supporting a ‘live with it’ approach and others opting for hard borders and lockdowns, I ask O’Neill for her personal view.

“Greater mobility and certainty around borders would be would helpful when we are planning work involving some of the specialist people we require from time to time, but our workforce is more than 90 per cent based in Western Australia, so we have access to most of the skills we need on a day-to-day basis,” she explains.

“We are doing whatever we can to support the government’s vaccination program because we recognise it is a critical tool to reopening Australia within the national boundaries and then opening up to international travel.”

As an American expat living in Perth, O’Neill says she’s become an Aussie through and through by adopting our national sports.

“Somewhat unusually for an American I play netball, which I took up when working with some Aussie expats in Indonesia,” she explains.

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“Everywhere in the world I’ve gone, I’ve found team sports have been a great way to meet people and get some downtime from work.

“I’ve also become a fan of Australian football since we moved here and my partner and I absolutely love going to the Dockers games.”

While the Woodside-BHP merger is yet to be signed, sealed and delivered, O’Neill is poised to steer the global giant towards new frontiers while the world watches on.

WOODSIDE-BHP MERGER COMMITMENT DEAL
On completion of the transaction, BHP’s oil and gas business would merge with Woodside, and Woodside would issue new shares to be distributed to BHP shareholders. The expanded Woodside would be owned 52 per cent by existing Woodside shareholders and 48 per cent by existing BHP shareholders. The transaction is subject to confirmatory due diligence, negotiation and execution of full form transaction documents, and satisfaction of conditions precedent including shareholder, regulatory and other approvals. With the combination of two high-quality asset portfolios, the proposed merger would create the largest energy company listed on the ASX, with a global top 10 position in the LNG industry by production. The combined company will have a high margin oil portfolio, long-life LNG assets and the financial resilience to help supply the energy needed for global growth and development over the energy transition.