Australia's Woodside says bidders keen on Browse LNG stake
PERTH/MELBOURNE (Reuters) - Australia's Woodside Petroleum (WPL.AX) said there are keen bidders for a minority stake in its Browse LNG project off the northwest coast of Australia, and it hoped to decide on a deal in the next few months.
China National Petroleum Corp, Japan's Osaka Gas Co (9532.T), Mitsui & Co (8031.T) and Taiwan's CPC Corp are among bidders for the stake, sources with knowledge of the deal said.
Woodside could sell up to a 20 percent stake in the project, one of the sources said. The sources declined to be named as the bidding interest is not yet public.
Woodside, 24 percent owned by Royal Dutch Shell (RDSa.L), is considering selling down part of its 50 percent holding in the Browse LNG project to cut its share of the costs, with Asian LNG buyers seen as potential new partners.
"With respect to understanding the value of a minority interest sale in Browse, we are maturing in that discussion, the interest has been strong and we'll know over the next few months exactly what we are doing in that space," Woodside chief executive Peter Coleman said in a call with analysts.
Coleman declined to confirm names of the bidders or the size of the stake Woodside could sell, but said it would be looking to lock in LNG buyers as part of a deal.
"Any potential equity selldown that came with an off-take agreement would be seen favourably," he said.
Chinese companies have ramped up investments in Australian projects in recent years in an effort to secure more supplies for their rapidly growing gas market and to gain expertise in liquefied natural gas and unconventional gas production.
The Browse project has been plagued by local opposition to building a plant at James Price Point, and a long-running dispute with its partners Shell, BP (BP.L), Chevron (CVX.N), and BHP Billiton (BHP.AX)(BLT.L) over the best location to process Browse gas.
As it tries to resolve those issues, Woodside is seeking government permission to delay a final decision investment on Browse by up to a year to the first half of 2013. The government has set a deadline of end-2012 for the companies to go ahead with the project or risk losing their permit.
PLUTO ON TRACK
Woodside, which released its second-half earnings on Wednesday, also reassured investors it would launch the first cargo of LNG from its long-delayed Pluto project in March, and said it was in talks to secure supply for an expansion of the project.
The closely watched Pluto project is the first of three multi-billion dollar liquefied natural gas developments slated to drive Woodside's growth over the next several years, and revenue from Pluto will help Woodside fund future projects.
Woodside said its June-December profit before one-offs rose 34 percent, powered by higher oil and gas prices and said it was in a strong position to fund future growth.
"With more than $2 billion (1 billion pound) in cash and undrawn facilities and strong cash flows, which will be further boosted when Pluto comes online, we are well placed to fund our LNG growth plans and consider other opportunities," Coleman said in a statement.
With Pluto starting up, Woodside expects capital and exploration spending to fall 42 percent to $2.2 billion in 2012.
Underlying profit rose to $813 million in July-December 2011 from $605 million a year earlier, compared with a consensus forecast of $842 million, according to Thomson Reuters I/B/E/S.
Woodside maintained its target for 2012 production at 73 to 81 million barrels of oil equivalent, including 17 to 21 mmboe from Pluto. The company produced 64.6 mmboe last year.
Woodside's shares have jumped 20 percent so far this year on the back of soaring oil prices, and continued to outperform on Wednesday, rising 2.5 percent in a flat market .AXJO.
(Reporting by Sonali Paul in Melbourne and Rebekah Kebede in Perth. Additional reporting by Narayanan Somasundaram in SYDNEY,Aizhu Chen in BEIJING and Denny Thomas and Charlie Zhu in HONG KONG; Editing by John Mair)
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