Monday, Nov 09, 2009


 
 
   By Stephen Bell 
   Contributing to DOW JONES NEWSWIRES

PERTH (Dow Jones)--Woodside Petroleum Ltd. (WPL.AU) Chief Executive Don Voelte said Monday that the company won't take part in the latest effort to revive Iraq's war-ravaged energy sector, preferring to focus on its Australian liquefied natural gas projects.

Woodside "won't be participating" in Iraq's second licensing round next month, Voelte told Dow Jones Newswires on the sidelines of the In the Zone Conference.

"We studied it and decided as a management team not to go forward at this time, with all due respect to their government," he said.

Woodside was among 35 companies that pre-qualified for Iraq's first licensing round in June. That auction was widely perceived as a failure after most Western companies balked at the terms offered by the Iraqi government.

China National Petroleum Corp. and BP PLC (BP.LN) were the only companies to secure one of Iraq's prized oil fields, Rumaila, marking the first time foreign companies have been allowed to invest in the country's oil sector since 1972.

Iraq, which sits on the world's third-largest oil reserves, produces around 2.45 million barrels a day while its proven reserves are estimated at 115 billion barrels.

The upcoming licensing round, due Dec. 11-12 in Baghdad, will seek offers for fields such West Qurna and Majnoon, with targeted production of up to 600,000 barrels a day, according to the Iraqi Oil Ministry.

But the fiscal terms aren't attractive enough to entice Woodside, Voelte said.

"Looking at the economic terms offered, and the profile of our company, we decided that we'll stay in touch with what is going on over there (in Iraq)," he said.

"But at this time we're too busy - we think that things are going to go too well on Pluto, Browse and Sunrise (Australian LNG projects), and we've only got 3,100 employees," he said.

In recent years, Woodside has scaled back investments in Africa and some other non-Western Australian jurisdictions to focus on its LNG growth ambitions at home.

The Perth-based company recently sold out of a Victorian gas project to concentrate on its west coast assets.

Asked whether Woodside's Iraqi decision was related to any sovereign risk concerns, Voelte said: "Nothing at all on that, it is just about priorities." "Right now, we just like where all of our projects are going," he said.

However, he said there remain "opportunities" in the Middle Eastern country.

Even though Woodside won't participate in this round, the company "reserves the right to look in the future" at Iraq, Voelte said.

-By Stephen Bell, contributing to Dow Jones Newswires; 61-8-9244-4243; sgbell@bigpond.com

(END) Dow Jones Newswires

09-11-09 0700GMT