Page 5 - AsianOil Week 20 2022

AsianOil COMMENTARY AsianOil

Woodside is aiming to
bring the Scarborough
field online in 2026.

significant development and growth oppor- The AGM marked the first time Woodside’s
tunities, within a timeframe that is unlikely to climate report was put to a shareholder vote. The
otherwise have been available”. Australian Financial Review reported this week
At the time of the report’s release a Credit that the meeting was often “testy”, with repeated
Suisse analyst, Saul Kavonic, said KPMG had questions on emissions and Woodside’s chair-
not shone as much light on BHP’s growth pros- man, Richard Goyder, ordering the microphone
pects as he had hoped. He added that the report to be cut off in several instances. O’Neill, mean-
had underestimated the potential value of while, accused the climate-focused questioners
BHP’s Calypso gas find in Trinidad in particu- of “cherry-picking” and sought to emphasise the
lar. However, Kavonic also noted that the com- company’s status as a responsible producer of oil
bined company was set to see little increase in and gas.
free cash flow despite the start-up of Woodside’s Activist shareholders had also hoped to
Scarborough project in 2026. He suggested this capitalise on previous investor support to pass
“may flag risk of decline elsewhere, including at resolutions including one on aligning capital
Pluto/Sangomar/North West Shelf”. allocation with the path to net-zero emissions.
That resolution and certain others garnered no Pressure over
Climate concerns more than 14.5% of the vote.
As well as needing to deal with this risk of decarbonisation
decline, the combined company looks set to find What next? is unlikely to go
itself under mounting pressure to take a tougher Pressure over decarbonisation is unlikely to go
line on its decarbonisation and climate change away, however, and instead seems more likely to away, however,
mitigation efforts. In particular, this could come strengthen over the coming months and years.
in the form of intensifying calls to adopt targets In the shorter term, the combined company also and instead
for Scope 3 emissions – those stemming from has market volatility to contend with.
end use of the company’s products by customers. Indeed, last month Woodside cited geopo- seems more likely
CGI Glass Lewis is among those highlight- litical tensions as one of the factors that had to strengthen.
ing the question of Scope 3 emissions, saying affected its oil and gas production in the first
that Woodside lags its peers in this area and quarter of this year. However, higher prices,
appears overly reliant on carbon offsets to meet especially for LNG, also helped keep the com-
its targets. pany’s revenues strong.
Woodside’s CEO, Meg O’Neill, pushed back Prices show no sign of falling in the near term,
against calls for Woodside to set Scope 3 targets so the combined company can expect to keep
at the AGM. benefiting from them for now.
“In many ways for us to have a Scope 3 target, “We expect in the second quarter to see the
it’s a bit of a double count,” she said, referring to continued benefit of stronger pricing, reflecting
those emissions already being counted by cus- the oil price lag in many of our LNG contracts,”
tomers in their Scope 1 figures. O’Neill said last month.™

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