Woodside Energy chief executive Meg O’Neill has backed in the company’s approach to new energy at a lunch event today, days after the company’s $US2.35 billion Texas ammonia buy.
Woodside Energy chief executive Meg O’Neill has backed in the company’s approach to new energy at a lunch event today, days after the company’s $US2.35 billion Texas ammonia buy.
Ms O’Neill used a speech to the Australian Institute of Company Directors to highlight its progress on new energy initiatives.
Woodside has come under scrutiny for its continued push to produce fossil fuels but made headlines this week with its multi-billion-dollar purchase of an under-construction ammonia project in Texas from OCI Global.
The company is targeting first ammonia at the project in 2025 and will sequester carbon emissions there from 2026.
Ms O’Neill told the AICD event that the purchase was evidence of Woodside’s commitment to the pursuit of value accretive green energy opportunities.
“Our capital allocation framework is a key feature of our transition case methodology,” she said.
“We target different internal rates of return and payback periods for different products, based on the risk reward balance for each commodity.
“New energy is an emerging market. It does not have the resource risk of oil and gas developments.
“Consequently, we target a lower rate of return and a longer payback period.”
Ms O’Neill said the OCI project met its capital allocation frameworks.
“This investment shows we are living our values,” she said.
Woodside has set a target to invest $US5 billion in new energy products and lower carbon services by the end of the decade and seeks to abate five million tonnes per annum of carbon dioxide equivalent by 2030.
“This project makes a material step towards delivering on both,” Ms O’Neill said.
“It is also an example of the role carbon capture and storage can play in building markets for lower-carbon intensity energy products.”
Ms O’Neill also spoke on the potential of the H2 Refueller project being delivered for the domestic trucking industry at Rockingham from 2025 – described as “modest in scale” but designed to “stimulate demand and demonstrate capability”.
Woodside shares are trading around 6 per cent lower than they were prior to the announcement of the OCI acquisition.
That’s despite a shareholder vote against the company’s climate action plan at the company’s AGM earlier this year.
Woodside continues to invest heavily in its traditional business too, with the Scarborough gas project off the WA coast on track for production in 2026.
The LNG producer dropped $US1.8 billion on the Driftwood gas project in the US only weeks ago, in a move designed to expand its reach into the US market.
First oil was achieved at the Sangomar field off Senegal in June.
The future of the company’s massive Browse field, discovered in 1971 but yet to be developed, is less clear.
Earlier this week, reports emerged that the long-stalled project could face pushback from the state environmental regulator.
While not referencing Browse by name, Ms O’Neill also used her speech to stress the importance of natural gas supply to meeting the energy needs of an increasingly hungry local market.
