Australia's Woodside Energy on Wednesday trimmed the top end of its annual production forecast and said it would scale back its investment in a lower-carbon ammonia project in the US due to slower demand.
The country's top independent oil and gas producer now expects annual production of 174 to 181 million barrels of oil equivalent (boe), down from its earlier forecast of 174 to 185 million boe.
The scaled-back ammonia investment is the latest step back from clean energy at Woodside, which under CEO Liz Westcott has abandoned its longer-term emissions target and canned $5 billion in planned lower carbon spending.
The Beaumont New Ammonia plant in Texas brought in lower-than-expected volumes for the quarter, with production constrained to 69% of capacity due to third-party feedstock availability and a 30-day shutdown following a safety incident.
Woodside said it would reduce its investment in the plant after completing a strategic review that found customer demand was slower than expected.
"The policy frameworks that were going to enable the lower carbon ammonia to be part of that market are also shifting," Westcott added.
Woodside acquired the plant for $2.35 billion in 2024 as part of a green energy push under former CEO Meg O'Neill.
Westcott said Woodside was focused on developing other parts of its portfolio such as the long-delayed Browse liquefied natural gas project off Western Australia, which could supply a range of customers including data centre operators and critical minerals producers.
"There's been a lot of interest in Browse in the last 12 months," Westcott said, while adding there was also interest from potential equity partners.
Environmental approvals and negotiations over a processing agreement have delayed Browse's progress.
Westcott said she was comfortable with how Browse's emissions were being addressed in its approval assessments in light of concerns a recent decision from Australia's top court, blocking a coal mine on climate grounds, could impact approvals of fossil fuel projects across the country.
Woodside reported revenue of $4.28 billion for the three months ended September 30, up from $3.36 billion reported a year ago, beating a Visible Alpha consensus of $4.11 billion.
Its average realised price for its products rose 40% from a year earlier to $84 per barrel of oil equivalent.
Quarterly production volumes fell 9% from a year earlier to 46.2 mmboe, but rose 12% from the previous quarter following higher production from Pluto LNG.
The company had earlier narrowed its annual production forecast in July, citing strong operational performance.
It also maintained its 2026 capital expenditure outlook at $4 billion to $4.5 billion.
(Reuters - Reporting by Rajasik Mukherjee, Nichiket Sunil in Bengaluru and Christine Chen in Sydney; Editing by Diti Pujara and Stephen Coates)