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Coronavirus affecting Woodside’s ability to sign gas deals

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According to Reuters, Woodside Petroleum Ltd has announced that the coronavirus outbreak is affecting its ability to sign gas deals and sell stakes in a key growth project, reporting a 25% decrease in annual underlying profit.

The fall in profit was reportedly in line with expectations because of both weaker output from Pluto LNG and lower oil and gas prices. However, Woodside claims the coronavirus outbreak is not only affecting prices, but also impacting broader sentiment.

Speaking to Reuters, the head of Woodside, Peter Coleman, claimed the company will use this year to focus on its Scarborough project, and will put efforts to secure an agreement for the long-delayed Browse project to supply gas to the North West Shelf LNG plant on hold.

According to Reuters, Scarborough and Browse are crucial to driving the company’s planned 6% growth per year in output through 2028. Woodside is now planning to make a final investment decision (FID) on Browse late next year. This is at least six months later than previously expected.

Coleman commented: “We’ve pushed it really hard. We’ve just said it’s time for us to all just step back for a while.”

He also noted that talks to reach gas agreements and sell part of its 75% stake in Scarborough to help it fund the project have been negatively affected by both low gas prices and travel restrictions caused by the coronavirus outbreak.

Coleman said: “The longer the coronavirus goes on people will form the view that distressed assets may come on the market.”

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