Woodside thumbs its nose at majority of investors, doubles down with Driftwood LNG

The Australasian Centre for Corporate Responsibility​ (ACCR) is commenting on the announcement that Woodside Energy Group Ltd is acquiring Tellurian (NYSE: TELL), including its Driftwood LNG development in Louisiana, United States.

Commenting on the announcement, Alex Hillman, Lead Analyst of the Australasian Centre for Corporate Responsibility (ACCR) said:

“While it’s unsurprising that Woodside has been hunting around for acquisitions given its underwhelming pre-FID fossil fuel portfolio, Driftwood LNG just adds more fossil fuel capex and emissions risk.

“Like Browse, Driftwood is a project that has struggled to get off the ground for years. Questions should be raised as to why a super major has not already swooped in on the project. Clearly, these companies do not see Driftwood as the compelling opportunity that Woodside claims it is.

“It is an alarming strategic decision - to double down on LNG just as the IEA is forecasting an emerging LNG glut.

“This adds to concerns about Woodside’s board's ability to think creatively about strategy - investors expect a board that can do more than just pursuing marginal fossil fuel projects.

“Coming just months after the majority of investors voted down its climate plan, this acquisition is a concerning sign that Woodside is still thumbing its nose at investor concerns about management of climate risk.

“Woodside’s CEO Meg O’Neil has today said the acquisition means “no change” to its climate strategy, which is astounding given the majority of investors have rejected the company’s climate plan.

“Woodside does not have a strong track record with greenfields projects. The last two major projects it completed, Pluto and Sangomar, were both late and over budget. Our analysis shows Woodside investors did not recover their cost of capital on either of these projects.”