WOODSIDE Petroleum is in talks with Royal Dutch Shell on the possible sale of its remaining $8 billion stake in the Perth-based oil and gas explorer, outgoing chief executive Don Voelte said yesterday.
Mr Voelte and chairman Michael Chaney were shocked in November, when Shell moved without warning to reduce its stake from 34 per cent to 24 per cent and signalled it was set to sell the rest of its holding.
But amid speculation that a cashed-up BHP Billiton or another major could be preparing to swoop on the Shell stake, Mr Voelte said Woodside was working "proactively" with its major shareholder over any move to bring in a new strategic investor.
"It's early days but I'll just say I would hope that we're not surprised with the other 24 per cent," Mr Voelte said.
He said last year that he was "happy" Shell was looking to exit the Woodside share register.
"Maybe we were surprised the first time around."
Woodside also announced yesterday that Shell's share sale last year would lead to changes on the board, with the number of Shell-nominated directors falling from three to two.
Shell nominee Andrew Jamieson would remain on the board and Shell would soon nominate a second director.
Mr Voelte's comments came as he delivered a 6.9 per cent rise in net profit to a record $1.57bn in the year to December 31.
It is likely Mr Voelte may have been delivering his final full-year result at the helm of Woodside.
Mr Voelte earned $7.77m last year, according to Woodside's annual report issued yesterday.
Woodside declared a final dividend of 55c a share, taking full-year dividends to $US1.05.
The profit was largely driven by higher prices for commodities, and record production and sales from the Woodside-operated North West Shelf natural gas project in Western Australia.
But there was little in the way of major progress announced on Woodside's suite of growth projects and the profit result failed to excite investors, with shares closing down 16c to $42.58.
The market has been concerned about Woodside's recent cost blowouts at Pluto and delays with the Browse and Sunrise projects.
Macquarie Securities analyst Adrian Wood said yesterday's briefing had failed to answer key questions, including the identity of the explorer's next chief executive, whether Shell would sell its remaining 24 per cent stake and Woodside's failure to find enough gas to underpin its planned Pluto expansion.
"There is very little we know about Woodside tonight that we didn't know this morning," he said. "There are others in the sector with more interesting stories to tell at the moment."
Mr Wood said Woodside had failed to convince the market of tangible progress at its key growth projects, including the controversial $20bn-plus Browse development planned in Western Australia's Kimberley which has been marred by conflict within the joint venture.
"There are growth projects that they keep telling us are progressing and yet there is very little to show for it," he said.
He said Woodside was bullish on Browse but joint-venture partners appeared less so.
Mr Voelte said the 95 per cent-complete Pluto project was still scheduled to produce first gas in September, but recent poor weather in the area could cause further delays.
The cyclones that had recently passed through the Pilbara had caused 20 days of lost productivity at the site.
"At this late stage of the project it might be hard to make any or all of that time," he said. "It's a fact of life up there: it is raining and raining and raining up there."
Mr Voelte said front-end engineering and design work for the offshore and onshore components of Browse had begun last week and Woodside's joint-venture partners had approved $779m of spending on the project.
A final investment decision on the Browse project was on track to be made next year.
Mr Voelte, who revealed last year that he would return to the US in the "second half" of this year, said Woodside chairman Michael Chaney and its non-executive directors were interviewing candidates.
"I can tell from the confidence in Michael's voice when he talks to me about it, I think they have got a good candidate list," he said.
Mr Voelte said although he would be in the US after he leaves Woodside, he would remain involved in Australian business.
He said he had decided to rescind his resignation from West Australian Newspapers board, which agreed yesterday to acquire Kerry Stokes's Seven Media Group in a deal worth $4.1bn.
© theaustralian.com.au
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