Energy giant Woodside takes $6.3bn hit as COVID-19 reshapes oil market

  • Jul 14, 2020
  • Sydney Morning Herald

Australian energy giant Woodside Petroleum has wiped billions of dollars off the value of its assets and reset price forecasts for the years ahead, giving the strongest indication yet of the severity and longer-term impact of coronavirus across the nation's oil and gas sector.

Woodside on Tuesday revealed $US4.37 billion ($6.3 billion) in write-downs and charges that have left no parts of the business unscathed, with impairments on all its Western Australian oil and gas assets, liquefied natural gas (LNG) plants and exploration licences.

Woodside's Karratha gas plant in Western Australia.Credit:Aaron Bunch

It follows a wave of similar revisions by some of the world's biggest oil producers including BP and Shell due to the crippling impact of coronavirus restrictions gutting oil demand and prices, and the growing realisation that the economic shock of the pandemic could last for years to come. ASX-listed Oil Search on Monday announced a $570 million write-down and indicated it could abandon some exploratory drilling projects in Papua New Guinea.

But Woodside chief executive Peter Coleman told investors the company's balance sheet was "not materially impacted" by the revisions and insisted the fundamentals of the business remained strong, particularly the demand outlook for its core product, LNG, in Asia.