Woodside seeks urgent reform to avert more gas delays

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Woodside chief executive Meg O’Neill has called for the federal government to urgently overhaul its environmental approval process for offshore gas developments, weeks after the energy major lost a court battle to perform seismic blasting off the West Australian coast.

O’Neill, who is at the helm of Australia’s biggest fossil fuel company, said legal action against already approved plans could add significant costs and delays to oil and gas developments in Australian waters.

Meg O’Neill announced the Scarborough project would go ahead two years ago.Credit: Oscar Colman

“Such uncertainty threatens the delivery of much-needed new supplies to the WA domestic market, as well as undermining the confidence of our regional trading partners,” she said.

In September, the Federal Court ruled that the offshore environment regulator should not have approved Woodside’s plans to conduct seismic testing for its Scarborough gas development. The court found Woodside had not adequately consulted Mardudhunera woman Raelene Cooper, a traditional owner of the area.

O’Neill said the court’s decision on seismic testing would not delay first production, scheduled for 2026, from the $19 billion Scarborough gas project.

However, Woodside has yet to receive environmental approval for any of its plans for other more critical parts of the project, including drilling, installing a giant floating facility and laying a pipeline to shore.

Without regulatory change, Woodside could suffer the same fate as rival Santos, which was the first to be affected by legal action over consultation with Indigenous people.

Santos’ plan for drilling the Barossa gas field north of Darwin was ruled invalid a year ago, forcing an expensive drilling rig to lie idle ever since.

Two weeks ago, Resources Minister Madeleine King said she did not like the confusion caused by the decisions and that regulatory change was urgently needed. A spokesman for King said a team in her department was developing options for increased efficiency and certainty in the approval system.

“It is imperative that the oil and gas sector build respectful relationships with First Nations groups,” she said. “The government expects the industry to step up in this regard.”

Madeleine King says the oil and gas sector needs to build respectful relationships with First Nations communities.Credit: Dion Georgopoulos

Woodside’s bottom line is exposed to any delays to Scarborough. The company has agreed to compensate US-based Global Infrastructure Fund – which owns a 50 per cent stake in the expansion of Woodside Pluto LNG plant – under certain circumstances if production at Scarborough is delayed.

A continued high risk of legal challenges to approvals could also dampen enthusiasm for Woodside’s next big Australian project, the Browse fields off the Kimberley coast.

In the September quarter, Woodside’s production jumped 8 per cent and revenue rose 6 per cent to $US 3.3 billion ($5.1 billion) as the increased production outweighed a 5 per cent dip in the average price for its hydrocarbons.

Santos is expected to provide an update on its Barossa project on Thursday when it reports its quarterly results.

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