Woodside Under Investigation, What This Means for the WPL Share Price

Word got out on Friday that Woodside Petroleum Ltd [ASX:WPL] is under investigation by the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA).

Woodside Petroleum is Australia’s largest independent oil and gas company.

What happened?

NOPSEMA is investigating Woodside Energy in relation to the removal of old offshore oil equipment.

In particular, it has to do with the Nganhurra riser turret mooring in the Enfield oil field in title area WA-28-L. The area license is co-owned by both Woodside — who holds 60% — and Mitsui who owns the rest.

Woodside had planned to dispose of the infrastructure by transporting it to land to decommission it but it can no longer do so as the infrastructure isn’t stable anymore.

As Energy News Bulletin reported:

We had secured approvals, awarded contracts, and mobilised vessels to undertake the activity,” a Woodside spokesperson told Energy News. 

 During this process, Woodside identified an “issue with one of the ballast comparments,” meaning it could not tow the riser turret mooring as planned.

Woodside has revised their plan to decommission it by turning it into an artificial reef. While NOPSEMA seems onboard with the new plan, they had this to say:

NOPSEMA has accepted a revised Nganhurra Cessation of Operations Environment Plan by Woodside, for the decommissioning of the Nganhurra riser turret mooring from title area WA-28-L. Through accepting the environment plan, NOPSEMA has required Woodside to implement a range of protective measures to prevent and mitigate impacts to whale sharks, turtles, and seabirds.

 In addition, NOPSEMA has initiated regulatory compliance action due to Woodside being unable to comply with an originally approved plan to remove the equipment for onshore disposal.

What could happen next?

So far markets have taken the news well, as the WPL share price increased by 0.9% at time of writing.

But Woodside has had quite a hit from the pandemic after oil collapsed. They had to write-down around US$4 billion in assets because of drops in prices of oil and natural gas. It’s been a tough year for oil companies with demand and oil prices collapsing, and less investment going into the industry.

Share price for WPL has decreased 24% in the last 12 months.

If you’re looking for dividend plays, check out our ‘Top Five Dividend Stocks Set to Thrive in Post Pandemic Era’, where Greg Cavanan reveals his top five ASX-listed stocks with the chance of maintaining big dividend payouts.

You can download it free here.


 Selva Freigedo

Selva Freigedo is a research analyst for The Rum Rebellion.

Born in Argentina, her passion for economic analysis started at a young age. Her father was an economist for the Argentinean governments and the family used to discuss politics and economics at the dinner table.

Argentina is a country with an unusual economic history. Growing up there gave Selva first-hand experience on different economic phenomena such as hyperinflation, devaluation and debt default.

Selva has also lived in Brazil, Spain and the USA.

Back in 2000 she was living in the US as the dot com bubble popped…
And in 2008 she was in Spain as the property market exploded and then collapsed…

She has seen first-hand what happens when bubbles burst.

Selva joined Fat Tail Investment Research’s team in 2016, as an analyst. She now writes from her vantage point in Australia, where she settled in 2015.

The Rum Rebellion