Woodside, Chevron agree to asset swap to streamline oil and gas portfolio

Woodside and Chevron have agreed to an asset swap, with Woodside acquiring Chevron's interest in the North West Shelf, NWS Oil and Angel Carbon Capture and Storage projects while transferring its entire interest in the Wheatstone and Julimar-Brunello projects to Chevron, Woodside said Dec. 19.

"This transaction simplifies our portfolio, improving our focus and efficiency by consolidating our position in our operated LNG assets," Woodside CEO Meg O'Neill said in a statement.

It also strengthens near-term cash flow to support shareholder distributions and ongoing investments while simplifying the NWS joint venture ownership, Woodside said.

Under the proposed transaction, Woodside will transfer its 13% non-operated interest in the Wheatstone Project and 65% operated interest in the Julimar-Brunello Project in exchange for Chevron's 16.67% interests in the NWS Project and the NWS Oil Project, along with a 20% interest in the Angel CCS Project.

The transaction is immediately cash flow accretive and includes a cash payment upon both execution and completion, Woodside said.

The Western Australian Government recently cleared an environmental approval for the extension of the North West Shelf gas project until 2070, a crucial step to facilitate the long-term processing of North West Shelf Joint Venture field resources and third-party gas resources through the Karratha Gas Plant.

The transaction creates greater opportunities to fill emerging processing capacity and "maximize value accretive recovery" from the North West Shelf Project, O'Neill said, adding that it also improves commercial prospects for the proposed Browse to North West Shelf Project.

"Additionally, this improves joint venture planning for decarbonization opportunities at Karratha Gas Plant," she said.

"Our increased equity in the Angel CCS Project also supports future development of this large-scale, multiuser carbon capture and storage hub in Western Australia," she added.

Production for 2024 through Sept. 30 from Woodside's interest in Wheatstone has averaged about 34.0 kilo b/d of oil equivalent, while production from Chevron's interest in the NWS Project and NWS Oil Project over the same period has averaged about 54.5 kilo boe/d.

Subject to completion of the transaction, the net impact on Woodside's Reserves and Resources as of the effective date, Jan. 1, 2024, will be a net increase of 9.6 million boe to Proved plus Probable (2P) Reserves, the company said.

In a separate statement also released Dec. 19, Chevron said the move aligns with Chevron Australia's plans to consolidate its focus on key assets.

"We have been an active participant in the North West Shelf Project since its foundation over 40 years ago," Chevron said, highlighting the project's record as a safe, competitive and reliable supplier of domestic gas and LNG as well as its transformation into a tolling facility as a positive outcome.

Chevron also noted that the asset swap transaction is subject to several conditions precedent, including regulatory approvals and the execution and handover of the Julimar Phase 3 Project from Woodside to Chevron Australia.