Chevron and Woodside Swap O&G Assets in Australia

Chevron Australia Pty Ltd (Chevron Australia), an indirect subsidiary of the US-based Chevron Corporation, on Thursday agreed to an asset swap with Australian energy giant Woodside under which both parties will consolidate their focus on strategic assets they individually operate in Western Australia.

Under the proposed transaction, Chevron Australia will transfer to Woodside its 16.67% non-operated interest in the North West Shelf (NWS) Project, NWS Oil Project and its 20% non-operated interest in the Angel Carbon Capture and Storage (CCS) Project.

Chevron Australia will acquire Woodside’s 13% non-operated interest in the Wheatstone Project, and 65% operated interest in the Julimar-Brunello Project. The transaction is subject to several conditions precedent including regulatory approvals and execution and hand over of the Julimar Phase-3 Project from Woodside to Chevron Australia.

Wheatstone is operated by Chevron Australia and is a joint venture between the Australian subsidiaries of Chevron (64.14%), Kuwait Foreign Petroleum Exploration Company (13.4%), Woodside Energy Group Ltd (13%), and Kyushu Electric Power Company (1.46%), together with PE Wheatstone Pty Ltd, part-owned by JERA (8%).

In addition, Chevron Australia will make a cash payment to Woodside of up to $400 million paid at key milestones and contingent on the execution and handover of the Julimar Phase-3 Project from Woodside to Chevron Australia.

Chevron Australia’s Managing Director Mark Hatfield said that this transaction will enable them to consolidate their focus and resources on key assets that they operate in Western Australia, and in this case it is Wheatstone Project.

The North West Shelf Project paved the way for Western Australia and the nation to become international leaders in natural gas and has been operated by Woodside to a world-class standard., he said.

“We have been an active participant in the North West Shelf Project since its foundation over 40 years ago and we are proud of the project’s record as a safe, competitive, and reliable supplier of domestic gas and LNG and its transformation into a tolling facility,” he added.

Streamlining Woodside’s Portfolio

According to Woodside, the deal with Chevron will enable it to streamline its Australian portfolio and consolidate its focus on operated LNG assets; simplify NWS joint venture ownership, unlocking economic recovery of existing production and future development opportunities; and strengthen near-term cash flow to support shareholder distributions and ongoing investments.

Woodside’s CEO Meg O’Neill said that the strategic and commercial rationale for this asset swap is compelling for Woodside. This transaction simplifies Woodside’s portfolio, improving its focus and efficiency by consolidating their position in its operated LNG assets.

It is also immediately cash flow accretive and includes a cash payment upon both execution and completion. This year, the North West Shelf project and its Karratha gas plant celebrated 40 years of operations.

He said that the Western Australian government’s recent decision to extend the environmental approval for the North West Shelf project supports its ongoing contribution to reliable energy supply for local and global customers.

“This transaction creates greater opportunity to fill emerging processing capacity and maximise value accretive recovery from the North West Shelf project. It also provides greater alignment and improves the commercial prospects for the proposed Browse to North West Shelf project,” Woodside CEO added.