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Chevron Corporation CVX and Woodside Energy have agreed on an asset swap deal to restructure their portfolios and focus on their core projects in Australia. This strategic swap should support both companies to fulfill their long-term goals, focus on efficiency and enhance sustainability.
Per the proposed transaction, Woodside will acquire Chevron’s 16.67% interests in the North West Shelf (NWS) Project, the NWS Oil Project and a 20% stake in the Angel Carbon Capture and Storage (CCS) initiative. In exchange, CVX will acquire a 13% share in the Wheatstone Project and a 65% operating interest in the Julimar-Brunello Project, coupled with a cash payment of up to $400 million.
Key Highlights of the CVX- Woodside Deal
During the last nine months, CVX’s output from the NWS and NWS oil project has averaged 54.5 kboe/d (thousand barrels of oil equivalent per day), and Woodside’s gas output from several offshore fields that include Julimar and Brunello has averaged 34,000 boe/d (barrels of oil equivalent per day).
This deal would position Woodside to progress with the extension of the NWS LNG plant, while the acquisition of Chevron’s stake in the Angel CCS project will help it reduce any emissions associated with its Browse development project. According to Woodside, the deal will strengthen its cash flow for shareholder distribution and ongoing investment and will simplify the NWS joint venture ownership at the same time.
The deal also promises a net increase of 9.6 million barrels of oil equivalent to its proven and probable reserves as of January 2024 for Woodside Energy.
CVX has been streamlining its assets over the past year, divesting its holdings in many companies in Alaska and Canada to prepare for its Hess Corporation acquisition. The deal will also align with CVX’s plans to consolidate its focus on key assets.
Recently, the Western Australian government has also approved the NWS gas project extension until 2070 to support long-term resource processing. This decision is crucial for optimizing joint venture field resources and third-party gas value.
Conditions and Reservations of the Deal
The companies notified that the asset swap deal is subject to several precedent conditions and regulatory approvals.
The deal will be inked only after the completion of the Julimar Phase 3 execution and handover, anticipated in 2026. Julimar Phase 3 is a four-well subsea tieback to the Julimar field production system and its execution phase will be completed by Woodside and thereafter transferred to Chevron on startup.