Woodside and Chevron Streamline Operations in Western Australia

By Adwitiya Srivastava

(Reuters) – Woodside and Chevron (NYSE:CVX) announced on Thursday the streamlining of oil and gas operations in Western Australia via a stake swap deal, which leads to Woodside exiting the $34 billion Wheatstone LNG project.

Under the asset swap agreement, Chevron will sell its interest in the North West Shelf venture and acquire all of Woodside's (OTC:WOPEY) interest in Wheatstone and an affiliate gas project. Additionally, Chevron will compensate Woodside up to $400 million.

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

Following the announcement, Woodside's shares decreased by 1.7%, mirroring broader losses in the Australian energy sector.

As Australia's leading oil and gas producer, Woodside will exit Wheatstone, a project in which it had invested in 2015. Its stake in the North West Shelf will increase to 50%.

Brad Smoling, managing director at Smoling Stockbroking, remarked, "The asset exchange will suit both companies' interests for future development. Focusing on some assets in their own respective backyards makes good common sense in these fluid times in the energy sector."

This deal marks the conclusion of Chevron's four-decade involvement in the North West Shelf venture, Australia's largest LNG exporter to date. The move is aligned with Chevron's strategy to concentrate on key Australian assets like the Gorgon LNG venture.

Additionally, this agreement follows Woodside Energy receiving environmental approval from the Western Australian government to extend the North West Shelf liquefied natural gas project until 2070.

The transaction is still subject to competition approvals and foreign investment board clearance, and its completion is anticipated in 2026.