The West Australian energy giant booked a net loss of $US 4.067 billion for the 6 months of 2020, predominantly due to impairments that devalued the company’s assets by $US 3.92 billion.
“Approximately 80 % of the oil and gas properties impairment losses are due to the significant and immediate reduction in oil and natural gas prices assumed up to 2025,” the company said. “Additional contributors are increased longer-term demand uncertainty impacted by the COVID-19 pandemic and increased risk of higher carbon pricing.”
In March, as the pandemic took hold, Woodside responded to market conditions by slashing its forecast 2020 total expenditure in half, deferring final investment decisions for its Scarborough and Pluto Train 2 projects to the 2nd half of next calendar year and Browse from calendar 2023. It has also reduced exploration significantly.
Woodside CEO Peter Coleman said the onset of COVID-19 had created the worst operating conditions in his working lifetime.
“I would rate the external conditions created this year by the COVID-19 pandemic and oversupply in global oil and gas markets as the most difficult I’ve seen in nearly 4 decades in the industry,” he said. “Oil and gas prices were negatively impacted by the confluence of geopolitical dynamics, global economic uncertainty and energy demand destruction brought about by the COVID-19 pandemic.”
According to Woodside, oil prices fell as much as 80 per cent from the start of the year, and the LNG spot prices have been at historical lows.
Woodside said in response to the pandemic it had cut its planned total expenditure by 50 % and delayed final investment decisions.
