Low oil price for longer: Woodside
UPDATE 2.30pm: Woodside Petroleum chairman Michael Chaney has warned shareholders to prepare for a lengthy period of low oil prices, something the company was expecting.
Addressing shareholders at Woodside's annual meeting in Perth today, Mr Chaney said he did not know how long the weak oil price environment would last.
Leaner times ahead ‖ Oil price hits 2015 high
Oil prices have almost halved over the past year.
"It is impossible to predict just how long this lower oil price environment will last but the company is planning on the basis that it could be several years," Mr Chaney said.
"Fortunately, Woodside is in a relatively strong position compared with some of its peers because we have already started the hard work of embedding reliability and productivity initiatives across the business at a time when the oil price was high, and we have a strong balance sheet."
But he also told about 400 shareholders at the Perth Convention Exhibition Centre that future profits and dividend payouts would be lower because of the weak oil price, though he was upbeat about the long-term growth outlook for LNG, Woodside's primary focus.
Mr Chaney said this year would be a challenging one for the global oil and gas industry.
Although Woodside had growth opportunities, he said successful developments of ventures such as Browse would depend on acceptable price outcomes.
The Woodside chairman said the silver lining in the weak oil price environment was that costs were also coming down.
Mr Chaney also spelt out for the first time Woodside's expectation that LNG exports out of the US would amount to about 15 to 20 per cent, leaving sufficient room for new supplies from elsewhere around the world, including from Australia, East Africa and Canada, where the Perth company is pursuing projects.
Woodside shareholders are meeting to sign off on a big year for the company, which started with an unsuccessful attempt to remove Shell from its share register - the proposal was voted down by investors - followed by the $US3.7 billion acquisition of oil and LNG assets from Apache and an expansion of its global exploration footprint.
Woodside shares were up seven cents to $35.48 at the close of trade.
