Australia’s largest energy company has seen a rise in revenue in the March quarter, with prices climbing 11 per cent off the back of the US-Iran war.
In its latest ASX announcement Woodside told the market operating revenue jumped 7 per cent to $US3.26bn ($A4.54bn) in the quarter to March, while the average price of their gas, liquids (oil) and ammonia climbed 11 per cent to $63 ($A87.66) barrel of oil equivalent.
The increase followed December quarter revenue of $3.035bn, ($A4.22bn) but was lower than this time last year when the business’ revenue came in at $3.315bn ($A4.61bn).
The rise in prices was offset by production falls of 8 per cent due to cyclone-related disruptions in Western Australia during the quarter.
Shortly after the results were announced Woodside shares jumped 1.64 per cent to $32.93.
Woodside chief executive Liz Westcott called the overall performance a modest increase in the portfolio due to the impacts of the Middle East conflict.
“Further benefits of currently higher spot prices will be realised in subsequent quarters for LNG due to tagged contract pricing,” she said.
The price of oil and liquefied natural gas (LNG) has soared in the last month due to the US and Iran conflict blocking the critical Strait of Hormuz – a 50km wide entrance and exit which connects The Gulf with the Arabian Sea.
Prior to the conflict starting, just shy of 20 per cent of the world’s oil and LNG passed through the Strait.
This sent oil and gas prices skyrocketing, as both Iranian mines and the US navy halted traffic through the region and threatened shortages of supply across Asia and Europe.
The global energy producer said there had been no disruptions to Woodside’s trading due to the conflict in the Middle East, and their shipping operations had continued as planned.
Ms Westcott also noted the company’s output was impacted late in the quarter due to severe tropical cyclone Narelle.
“The team’s cyclone response ensured we maintained the safety of our people, assets and the environment throughout the shutdown and restoration of operations,” she said.
Ms Westcott said the company would prioritise organisation efficiency and improve capital management as the business looks to balance growth spending with shareholders returns.
“Cost discipline is essential to sustained shareholder value creation and we are commencing a structured review of our business to streamline decision making, reduce complexity and improve accountability,” she said.
