Woodside expands vision with new London listing and BHP merger
Woodside Energy (Woodside) has boosted its expansion plans, unveiling a secondary listing on the London Stock Exchange – with shares up nine per cent at close play after its first session of trading – only days after completing a historic merger with BHP’s petroleum arm.
While rival energy majors have announced plans to divest from fossil fuels, Woodside is certain that gas has “a very clear role in the energy transition.”
In an exclusive interview with City PM, the company’s chief financial officer Graham Tiver argued that gas is “fundamental” for a stable transition to renewable energy sources, and that it can provide a “crucial base load” of energy for consumers to rely on.
Commenting on the company’s business approach, he said: “We can offer countries very low risk energy, from the point of being able to provide our customers secure and reliable supplies”
“I think there is a very, very clear role for gas in in the energy transition today and well into the future.”
Fears of supply shortages and conflict-driven disruption following Russia’s invasion of Ukraine have powered natural gas prices to record highs this year, which has also ramped up wholesale costs for consumers, businesses and energy traders.
This has encouraged multiple Western economies – including the UK – to bolster domestic production to reduce their reliance on overseas suppliers.
Woodside is also ramping up its own business, with the company’s London debut following its arrival on the New York Stock Exchange last week, to go alongside its primary Australia listing.
The company also rebranded last month, having formerly been known as Woodside Petroleum.
This follows the confirmation of the oil and gas major’s successful merger with BHP Group’s petroleum business last week.
BHP has been paid in Woodside shares, giving its shareholders a 48 per cent stake in the merged group that will now have assets across Australia, US, Mexico, Senegal and Trinidad.
The move formalises its shift from being a predominantly Australian focused business to a global top 10 independent energy company – with a market cap in excess of £31bn.
New levies undermine investment possibilities
Tiver told City PM it was crucial for governments to establish “stable investment regimes.”
After the BHP merger, Woodside has become the sole owner of the $5.7bn Scarborough gas field in Western Australia.
It has received key government approvals for the project, and has committed $12bn worth of investment into the mega development.
Tiver suggested this would not be possible without “understanding the fiscal regimes” and to “develop the confidence to invest.”
His comments follow the UK unveiled a 25 per cent windfall tax last month to ease spiralling energy bills for households.
Meanwhile Australia has voted in a new Labor government which put climate change at the heart of its agenda, and has pledged to make Australia a renewable superpower.
Tiver was not concerned by the developments, believing the Labor Party had been “very clear” with the company about its goals, and had pledged “no new taxes” – lowering the prospect of levies on Australian fossil fuel traders.
As for its own green plans, Woodside has pledged to spend $5bn developing decarbonisation technologies and in ramping up hydrogen generation.
It has also committed to cut down scope one and two emissions 30 per cent by the end of the decade.
Woodside has faced criticism from activist investors for not including scope three emissions – customer’s emissions from buying the products – in its carbon cutting agenda.
This was reflected in the results of multiple shareholder votes last month at its annual general meeting.
While investors overwhelming its merger plans with BHP, 49 per cent of shareholders voted against its climate change strategy in a separate non-binding vote.
Despite the backlash, Tiver was confident that its transition plans would gain more support, with the company committing to more engagement with investors.
He said: “At times it’s not easy being an oil and gas company. But I think being being able to work with our investors, communities, our core stakeholders to be able to demonstrate that we are a part of the transition is really important.”