Australia's Woodside sees low oil prices into 2021
Australian independent Woodside Petroleum expects low oil prices to persist for the rest of 2020 and into next year, given lower energy demand amid the Covid-19 pandemic from an oil oversupply across large producers.
The Argus dated Brent price for July delivery last settled at $24.24/bl on 29 April, down by 65pc from the near $69/bl seen in early January.
"The agreement earlier this month between OPEC, Russia and other producing countries will help reduce the extent of the oversupply but the demand destruction we are seeing is so significant that low oil prices are likely to persist this year and possibly into next," Woodside chief executive officer Peter Coleman said.
Woodside operates two LNG projects, the 16.3mn t/yr North West Shelf LNG venture and the 4.3mn t/yr Pluto LNG venture both offshore Western Australia (WA).
The company has stress-tested its balance sheet against a number of scenarios in the past year, including two years of oil prices at $35/bl with ongoing oil prices beyond that of $50/bl flat real, to ensure the robustness of the firm's investment strategy, Coleman said.
Woodside in March deferred the planned sanctioning of the Scarborough gas field offshore WA until 2021 from a proposed final investment decision in mid-2020, as it scales back capital expenditure in response to a sharp fall in oil prices.
By Kevin Morrison
source: Argus Media
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