Australia's Woodside [Energy] has changed tack on plans to sell assets to help fund its $11 billion Scarborough gas project, now targeting infrastructure investors instead of energy companies amid a slump in oil and gas prices.
Woodside said on Wednesday it remains committed to developing its Scarborough and Pluto Train 2 liquefied natural gas project, on track for a final investment decision in the second half of 2021 and aiming for a first cargo in 2026.
Chief Executive Peter Coleman said the sales of a 50% stake in Pluto Train 2, stakes in other infrastructure, and a stake in its Sangomar oil project in Senegal would help Woodside avoid having to sell new shares to fund its projects.
"In our view, we're working down a path where the likelihood of raising equity gets smaller and smaller," Coleman told investors at an online briefing.
Last year it had sounded out major oil companies to buy part of its 75% stake in Scarborough to raise funds, but due to the oil and gas price crash this year, that no longer makes sense, Coleman said.
"It's just simply not a good time in the market to sell that," Coleman said.
Instead, it now wants to sell around a 50% stake in Pluto Train 2 to infrastructure investors.
Coleman said he was confident Woodside will be able to go ahead with the Scarborough project without lining up buyers for the LNG, unlike in the past, when it would seal deals for 80% of a project's LNG volumes before a final decision.
"We're not going to be rushing out trying to secure deals at the low prices you're seeing today," he said.
Woodside said there would be only a "modest" increase in the previous estimate of $11 billion to develop Scarborough [offshore W. Australia ], as it works on expanding the project by 20% to 8 million tonnes a year.
(Additional reporting by Shruti Sonal in Bengaluru; Editing by Lincoln Feast and Michael Perry)