It’s not only production of iron ore, coal and uranium that have been impacted by the wet weather and cyclones across northern Australia since the start of the year.
Woodside Petroleum partly blamed the recent cyclonic weather yesterday in its March quarter production update for the sharp falls in output and sales, which is the first quarter of the company’s 2011 financial year.
Revenue was down 3% from a year ago, which was due to higher world prices, but the fall in production and sales means Woodside was unable to ride the surge in oil prices in the quarter.
Woodside shares fell 1.5% or 72c yesterday to $46.05, not so much because of the dip in production but the fall in oil prices overnight after the Standard & Poor’s cut to America’s credit rating outlook to negative.
Woodside said production in the March quarter fell 12% from the December quarter and a large 19% from the same quarter of 2010 because of higher than normal cyclone activity in the North West of Australia.
Woodside said production in the first quarter of 2011 was 15.6 million barrels of oil equivalent (mmboe), down from 17.7 mmboe in the December quarter of 2010 and the 19.2 mmboe in the March quarter of 2010.
Sales fell 14% to 15.3 mmboe in the March 2011 quarter, down 15% from the December quarter and 18% from the first quarter of 2010.
Revenue of $US998 million was down 6% from the December quarter, and only 3% from the first quarter of 2010 as rising world prices partially offset the fall.
"Production volumes were down 19% compared to the corresponding quarter due to tropical cyclone activity in the North West, the sale of Woodside’s interest in the Otway Gas Project in March 2010, planned outages at Vincent and NWS Oil and oil-field natural decline," the company said in yesterday’s report.
"This was partially offset by increased volumes from Stybarrow following the Stybarrow North infill well commencing in late Q4 2010."
Woodside said it expected underlying production in calendar 2011 to be 63 to 66 mmboe "as previously advised", excluding its Pluto field.
Woodside’s share of production from Pluto should be five to nine mmboe, the company said.
Woodside said it had decided to retain its Laminaria-Corallina assets, after testing the market for a potential buyer.
On the Pluto LNG project, Woodside said it has "transitioned to an ‘operating’ site with the introduction of natural gas into the plant in early March. Start up is targeted for August 2011 and LNG one month later.
"As noted in our 21 February full-year results briefing, the site has been impacted by the high level of cyclone activity this year. Cyclones and heavy rains have continued to impact construction, resulting in what is now approximately four weeks of weather-related delays since November 2010.
"The end of the cyclone season is approaching and will result in a better work environment. Mitigation plans are in place but it may be hard to recover weather-related delays at this late stage in the project.
"In early March, gas from the Dampier to Bunbury Natural Gas Pipeline was introduced to the Pluto LNG Plant.
"The gas is being used to power up the gas turbine generators, which provide permanent power to the process facility and site in general. The diesel-powered generators have been returned to backup service as originally intended.
"From late April 2011, gas from the pipeline will also be used to pressurise the 240 km of offshore pipelines out to the Pluto gas field, prior to the wells being opened for production."
