FEARS that the schedule for Woodside Petroleum's $12 billion Pluto project in Western Australia may slip because of potential gas supply shortages and an industrial relations dispute have pushed the company's shares lower.
As it released its 2009 results, Woodside said the initial stage of its Pluto project was now 85 per cent complete and on track to deliver its first liquefied natural gas by the end of the year ''contingent on a productive industrial relations environment''.
Workers at the Pluto liquefied natural gas project in Karrartha have gone on strike twice in the past three months in protest over the accommodation provided. The strike action has prompted Woodside boss Don Voelte to take aim at the federal government's changes to the WorkChoices legislation, saying they had ''swung the pendulum back too far the other way''.
Amid the industrial dispute, Woodside's annual report shows Mr Voelte received a 20 per cent increase in his total remuneration compared with 2008, receiving $8.3 million last year.
Analysts believe the biggest concern for Mr Voelte is his ambitious timetable for Pluto, including reaching a final investment decision for a second processing train by the end of the year despite not yet securing enough gas.
One analyst, who preferred not to be named, said Woodside's $400 million boost to its forecast $4.7 billion capital expenditure for 2010 strongly suggested a deal with a third-party gas supplier was still some time away.
''They are betting $400 million-plus on finding 5-plus trillion cubic feet of gas inside the next nine months,'' the analyst said.
Mr Voelte said he was encouraged by results from the Noblige and Larsen exploration wells, however there is no detail yet on their potential size.
Macquarie analysts said any more strikes at Pluto could also derail the timeline. ''Although Pluto remains on track for first gas by year end, this is increasingly dependent on no further strikes,'' Macquarie said.
Mr Voelte said he believed most workers were happy with their accommodation and that the strike was ''just some folks testing the new laws and seeing what they can get away with''.
Woodside is in the market for a new chief financial officer after Mark Chatterji announced he would return to the US for family reasons.
The news came as Woodside recorded a slight 4 per cent rise in underlying net profit to $1.9 billion. Reported net profit was 2.1 per cent higher at $1.82 billion. A final dividend of 55¢ was declared in line with last year.
Woodside shares lost about 2.5 per cent, or $1.09, to $43.32.
WOODSIDE
Profit $1.82 billion+2.1%
EPS $2.59 -0.3%
Revenue $4.35 billion -27%
Final dividend 55¢unchanged
