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Woodside ramps up Pluto LNG; Santos output up

PERTH: Australia's largest oil and gas company, Woodside Petroleum, said it is very close to exporting liquefied natural gas (LNG) from its flagship project and the nation's No. 2, Santos, reported higher first-quarter output, sending shares of both companies higher on Thursday.

Woodside is gearing up its Pluto LNG project to load its first export cargoes in the "coming days," Woodside said in its March quarter production report on Thursday.

The flagship A$14.9 billion ($15.47 billion) Pluto LNG is Australia's third gas export project and the first to come online in six years.

"Pluto has safely reached start-up and we look forward to our first LNG cargo. Pluto will add to the solid production base of our foundation projects," Woodside chief executive Peter Coleman said in the report.

Although the Pluto development has come online in less than seven years from its discovery, it is a year behind its original target and A$900 million over-budget. Pluto LNG's first export cargo has been slightly delayed from the original late March target.

The rest of Woodside's production was hit by Australia's cyclone season, with output down 10 percent from the same period in 2011 at 14.1 million barrels of oil equivalent (mmboe) in the first quarter.

But Woodside said its production guidance for 2012 is unchanged at 73 to 81 mmboe, with 17 to 21 mmboe expected to come from Pluto LNG.      

Santos, which also reported March quarter production on Thursday, said it boosted first-quarter production by 13 percent from a year ago to 12.4 million mmboe after starting up new projects and as output in the flood-hit Cooper Basin continued to improve.

Guidance for 2012 is unchanged at 51 to 55 mmboe, Santos said.

Woodside shares rose 1.3 percent to just over A$35 per share, while Santos shares gained about 0.8 percent to over A$14 per share by late morning. The two helped lift the broader Australian market up 0.6 percent.


Both Woodside and Santos saw a boost in sales revenue from higher oil and gas prices in the March quarter.

Woodside's quarterly sales revenues were around $1.2 billion, down slightly from the previous quarter, but still 20 percent above year-ago levels despite lower production, while Santos sales revenue increased 50 percent from the previous quarter to A$754 million.

Both Woodside and Santos were focused on production growth from new projects.

Santos said a raft of new fields contributed to its higher March quarter production including the Wortel gas project in Indonesia, the Chim S?o field in Vietnam and the Raindeer and Spar projects in Western Australia.

Woodside also started up the Okha gas system on the North West Shelf, and the project is expected to produce 30,000 barrels of oil per day.

With Pluto LNG in production, Woodside said it is in discussions with other gas resource owners as part of its plans to expand Pluto LNG.

Copyright Reuters, 2012


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