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Woodside vows to take on US shale oil producers after BHP merger

The head of Woodside Petroleum has said she is open to taking on US shale oil producers with what the Australian energy group argues will be a cleaner, less capital intensive offering following the acquisition of the segment. BHP’s oil and gas business this year.

The merger will take Woodside from Australia’s second-largest producer of liquefied natural gas to one of the world’s top 10 private sector energy producers outside of superships, making it the into a substantial oil company with assets in the United States, Mexico, Canada, Algeria and Australia. .

By agreementwill be completed in the middle of the year pending a shareholder vote in the second quarter, BHP shareholders will receive a share in Woodside, accounting for 48% of the shares of the merged company.

CEO Meg O’Neill said the expansion team will not be exposed to oil and gas projects that require technology such as hydraulic fracturing – processes often called “unique” in the field – that have means it will avoid high cost of shale miningan element she said US investors would like.

She also thinks the company’s greater exposure to gas, which emits less carbon per unit of energy than oil, will be an advantage when it comes to raising capital from increasingly climate-conscious investors. .

“We don’t have the treadmill risk that is happening in [sector],” she said. “U.S. investors looking for a lower carbon intensity portfolio, I think Woodside would be quite attractive.”

Graeme Bethune, chief executive officer of energy consulting firm EnergyQuest, said Woodside’s claims about emissions intensity were “probably true”, but pointed out that the merger would not diversify the company away from natural fossil material.

“In many ways, Woodside is doubling the price of oil and gas,” he said. However, he added that clean energy research group BloombergNEF recently gave Woodside the highest rating out of 10 LNG producers – including Chevron, BP and Shell – in terms of their readiness for the transition. energy.

Woodside released a climate report on Thursday, which laid out emissions reduction targets for 2030.

The Australasian Center for Corporate Responsibility has labeled Woodside’s plan for its downstream “Scope 3” Emissions “A joke” because it doesn’t address the emissions created when its oil and gas are burned.

“The only reliable way for Woodside to reduce its emissions in range 3 is to stop developing new gas storage tanks,” said Dan Gocher, ACCR’s Director of Climate and Environment.

But O’Neill said addressing these emissions rests with customers and governments, saying: “Our range 3 is someone else’s range 1.”

The International Energy Agency released a report last year in which it said that there must no new oil and natural gas fields “Beyond those approved for development” if net zero emissions are to be achieved by 2050.

O’Neill said the company would “absolutely” continue drilling oil and gasbut insists the strategy is in line with the goals of the 2015 Paris agreement, arguing that gas production is helping Asian nations meet their international commitments under the agreement.

She said exploration must have a clear, short time to commercial production, amid uncertain long-term future oil and gas demand.

“I think we’re past the days of discovering resources that haven’t been developed for 20, 30 or 40 years. We need to make sure that exploration is focused on the path to rapid commercialization, to ensure that the work can deliver value to shareholders,” she said.

She also defends corporate lobbying on climate issues, even as Woodside faces pressure from activist groups. “We need to make sure we continue to have the right and active conversations about the right settings for investors like us to keep investing,” she said.

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