Woodside Petroleum has reported a more than twofold jump in quarterly revenue, buoyed by rising oil and gas prices, and it expects to benefit in the longer term from energy security fears due to Russia’s invasion of Ukraine.
According to Reuters, tight supply drove prices of liquefied natural gas (LNG) to record highs last year before Russia, a top exporter of oil and gas, invaded Ukraine, sparking sanctions which have further hit supply.
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“We expect in the second quarter to see the continued benefit of stronger pricing, reflecting the oil price lag in many of our LNG contracts,” Woodside CEO Meg O’Neill said.
The Ukraine conflict has unnerved LNG buyers in Europe and Asia, putting producers like Woodside in Australia in a strong position to negotiate longer-term sales deals at higher prices than envisioned when the coronavirus hammered demand two years ago, she said.
“Since the invasion, we are seeing more interest,” O’Neill told Reuters.
Woodside is also attracting more potential bidders for a stake it wants to sell in its Scarborough gas project off Western Australia.
“I think we are seeing many customers who realise the importance of stable and secure energy supply from a nation like Australia. So we are seeing good interest in the Scarborough sell down as well as Scarborough LNG equity offtake,” O’Neill said.
O’Neill said she was confident shareholders would back Woodside’s merger with the petroleum arm of BHP Group on May 19, which will double the company’s output and give it a foothold in the Gulf of Mexico, more exposure to oil and a stronger balance sheet.
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In the March quarter, Woodside’s sales revenue came in at $2.36 billion, up from $1.12 billion a year earlier, as its realised price more than doubled on a year earlier. However, the result was softer than analysts at RBC and UBS expected.
Woodside’s shares fell 5.1 per cent—a bigger fall than the broader energy index, which was down due to a drop in oil prices.
