Woodside Watching Supermajors' Woes for Opportunities

Woodside Petroleum is keeping a close eye out for assets that might come up for grabs from the oil supermajors amid the oil market rout, seeing itself in a position to bid, Chief Executive Peter Coleman said on Friday.

The head of Australia's top independent gas producer said, however, deals were unlikely until the third or fourth quarter of this year.

"We are watching closely the super majors," Coleman told reporters on a conference call the day after Woodside's annual meeting.

He said Woodside was watching how the supermajors manage their debt and dividends and how they value their assets through impairments amid the oil market collapse driven by oversupply and the fall in fuel demand because of lockdowns for the novel coronavirus.

"They are all insights as to what we think the appetite may be in the industry towards sales at an asset level," he said.

Woodside is partners with supermajors Exxon Mobil Corp , Royal Dutch Shell (RYDAF), BP Plc and Chevron Corp at LNG projects in Australia and Canada.

Away from the supermajors, one of Woodside's partners in the Sangomar oil project off Senegal, Australian explorer FAR Ltd , flagged late on Thursday it might sell all or part of its stake in the field as it is struggling to fund its share of the $4.2 billion project.

Coleman said he hoped FAR could eventually raise the funds it needs, but if not, the joint venture has provisions for diluting its holding.

"We'll just watch that one very, very closely," he said.

Coleman confirmed that spot liquefied natural gas (LNG) prices are so weak that cargoes out of the United States are being cancelled, as reported by Reuters last week.

Spot LNG prices have slumped to record lows below $2 per million British thermal units (mmBTU), around the same price as U.S. Henry Hub gas prices, which means when pipeline, liquefaction and shipping costs are added, U.S. LNG cannot compete in the global spot market at the moment.

"Today, those cargoes are out of the money, meaning that many, many cargoes at the moment are being cancelled," Coleman said.

He would not comment on Woodside's own lifting plans from Cheniere Energy Inc's Corpus Christi plant, where Woodside was due to start taking cargoes from July, according to the company's annual report.

"It's a very, very difficult time for us," Coleman said.

(Reporting by Sonali Paul Editing by Robert Birsel)