By ROSS KELLY
BRISBANE -- Woodside Petroleum said it will restart efforts
to find natural
gas for an expansion of a flagship Australian
export facility early next year, as it doused expectations it
may look to fill a hole in its production growth with a big
Woodside, Australia's biggest oil company by output behind
BHP Billiton, has long led the nation's push to capture rising
Asian demand for clean
fuels, operating two of the country's three operating
gas-export facilities and partnering companies
like Shell on discovering new gas fields.
However, a lack of drilling success in recent years and
rising costs means the Perth based company is starting to lag
rivals in developing new projects. Woodside put an expansion of its $15 billion Pluto
gas-export facility in Western Australia State on ice last year
after it failed to find enough gas nearby and talks with rival
suppliers broke down.
Woodside will have two rigs drilling in waters near Pluto
next year, targeting at least eight natural
gas prospects, CEO Peter Coleman said in an interview.
Woodside wants to expand Pluto because existing
infrastructure makes it cheaper to bolt on extra l LNG
processing units than starting new developments from scratch.
The high cost of new LNG
projects was cited by Woodside and
partners for the recent decision to abandon plans to develop
the Browse gas resource in Western Australia using an onshore
Analysts say the setbacks mean Woodside will struggle to
increase its annual production until 2018 at the earliest
unless it uses surplus cash to buy rival companies or oil and
gas fields already in development.
Mr. Coleman said the company retains the ability to make a
"sizeable" acquisition following a recent $500 million cash
return to shareholders and a pledge to pay more of future
profits as dividends.
But potential targets currently look expensive, he said.
"When you look at prices and so forth, it's not clear to me
that it's a good time to be out in the market at all," Mr.
Mr. Coleman said Woodside would only be interested in
acquiring willing sellers, and therefore isn't keen on making
hostile takeover bids.
Dow Jones Newswires