Woodside Petroleum’s balance sheet will be in good shape to weather the COVID-19 crisis, chairman Richard Goyder said today, while continuing his calls for the economy to be reopened.
Woodside Petroleum’s balance sheet will be in good shape to weather the COVID-19 crisis, chairman Richard Goyder said today, while continuing his calls for the economy to be reopened.
Speaking at the company’s electronic annual general meeting today, Mr Goyder said Australian people had been terrific in their response to the pandemic.
“Unfortunately, the economic consequences will be significant and we need to navigate a safe pathway to rebuild our economy as soon as we can,” he said.
“While there will be risks, there are significant risks in not opening up.”
He said the company’s balance sheet had been prepared during the past two years for a growth phase of higher capital expenditure, but plans have been adapted to the circumstances of the pandemic.
“I’ve said before that the number one rule in business is: never run out of cash and make sure your balance sheet is strong,” Mr Goyder said.
“On those measures, Woodside is in good shape.
Woodside was fortunate not to have sanctioned decisions on the Burrup Hub projects because it gave extra flexibility, he said.
Delaying (the Scarborough and Browse) projects was the right decision, but when the timing is right, we will be ready to proceed.
“The economy will certainly be in dire need of projects that involve investment and jobs and the world will need the reliable and cleaner energy offered by natural gas.”
Chief executive Peter Coleman said the energy market was the worst he had seen in 36 years.
“The agreement earlier this month between OPEC, Russia and other producing countries will help reduce the extent of the (oil) oversupply but the demand destruction we are seeing is so significant that low oil prices are likely to persist this year and possibly into next,” Mr Coleman said.
But the tough market would create opportunities for companies with the balance sheet to pursue them, he said.
And the Scarborough and Browse remained highly competitive.
“In the cyclical nature of our industry, a number of projects that were proposed globally and are reliant on project financing will likely not proceed and that, in turn, will support LNG prices,” Mr Coleman said.
“I am confident that our proposed projects are cost-competitive - and we are now working towards a final investment decision on Scarborough next year.”
