Woodside shows huge bill for onshore Browse

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From The Australian:

In a sign that Woodside is becoming increasingly frustrated with suggestions it should have built an onshore plant rather than pursue a controversial floating LNG plan, the Perth-based company said yesterday that James Price Point was uneconomic and pursuing it could have placed the group at risk of collapse.

“We invested about 4.5 million man hours and had hundreds of Woodsiders who dedicated years trying to come up with a way to make this land-based development commercially viable,” Woodside’s vice-president of corporate affairs, Roger Martin, wrote in an opinion piece in The West Australian newspaper.

“When the final number came in at more than $80bn, it was obvious these efforts were in vain.”

…”Effectively, we would have spent almost the entire value of our company on an uneconomic project,” he wrote.

…”With just a modest cost overrun we could have put Woodside itself at risk, an organisation which has taken almost 60 years to create and which has played a critical role in the development of Australia’s oil and gas industry.”

My bro just returned from Perth where he paid $12 for a bottle of beer and$800 for a night in an average CDB hotel for two. His brother-in-law flies from Currumbin every eight days to do a low level FIFO job at $160k per year in Karratha. Double the salary for the real cost.

Woodside isn’t kidding.

Comments

  1. Brother must be a silvertail or loose with money as I just looked up Ibis in the CBD and it is $148 or maybe there was a conference on and it was full???

    • Yep… that $80B figure has got to be rubbish. $20B+ more than Gorgon, for a land-backed option? Impossible.

      Will be interesting to see what the cost of FLNG for Browse is going to be, if for one minute you could expect to get a like-for-like honest cost comparison. Doubtful.

      • dumb_non_economist

        Jackson, you watch the cost blowout on FLNG.

        I have a mate in the construction side of mining and you hear the stories of how the design companies play chicken with costings/completion times etc and I’d wonder what their conflict of interest is when it comes to FLNG.

  2. Diogenes the CynicMEMBER

    The hotel price was probably influenced by the cricket test. Loads of singing Poms here last weekend.

  3. dumb_non_economist

    hnh, sorry but what exactly does the B.I.L do? I’m not FIFO, but associated with it and I keep hearing of these magical high paying low level jobs third hand but YET to come across one first hand (not exactly true, but close to it).

    Kitchen hand/house cleaning etc with a company like Compass (ESS) is around 50-60K for 2/1, so 14 days of 12 hrs per day so a 56 hr wk @ 60k = $20.60 ph flat!!! Hardly startling.

    If your in a trade or driving a truck fine, if it’s a office admin etc it’s OK, the hrs are what gets you the extra.

    Oh, a Physio (doing masseuse work!) flat rate of $25 ph.