Woodside, a major Australian energy company, is calling for urgent reforms in the country’s offshore approvals process following a recent Federal Court ruling. The ruling threatened to delay a $16 billion offshore gas project due to inadequate consultation with an Indigenous woman. The court sided with Raelene Cooper, a Mardudhunera woman, who argued that seismic testing for the Scarborough gas project could harm her songline, which includes whales and turtles.
On September 28, the court ruled that the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) had wrongly approved the permit without proper consultation with the Murujuga traditional custodians. This consultation was necessary before drilling could commence. Woodside’s CEO, Meg O’Neill, stated that while the ruling did not impact the company’s target for the first LNG cargo from Scarborough in 2026, the uncertainty over approvals could lead to delays and increased costs for Australian offshore gas activities.
O’Neill highlighted that the uncertainty threatens the delivery of new gas supplies to the Western Australian domestic market and undermines the confidence of regional trading partners. The Scarborough project is currently 46% complete, with fabrication of a floating production unit progressing. Woodside is continuing its engagement with NOPSEMA over the environmental plan following the court decision.
In addition to the calls for reform, Woodside also provided an update on its production and capital expenditure expectations. The company expects to achieve the midrange of its production guidance for 2023, projecting a production of 183 million to 188 million barrels of oil equivalent (MMboe). This comes after an eight percent increase in third-quarter production to 47.8 million barrels. Woodside also narrowed its forecast for capital expenditure to $5.7 billion to $6 billion, down from the previous estimate of $6 billion to $6.5 billion.
Analysts have commented that Woodside’s quarterly update shows solid results overall, but point to the potential risk of further regulatory delays to the Scarborough project as a concern. Woodside’s CEO, Ms. O’Neill, highlighted that the quarter-on-quarter increase in production was driven by strong operating results at the Pluto LNG plant in Western Australia, which achieved a remarkable 99.9% reliability.
This news update from Woodside underscores the importance of strategic reforms in Australia’s offshore approvals process to ensure efficient and timely project implementation while respecting Indigenous consultation and environmental considerations. These reforms are crucial for maintaining the confidence of regional trading partners and securing future energy supplies for Western Australia’s domestic market.
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