Woodside Proceeding With Pluto Development  

Alan Kohler at the ABC has an interview with Woodside's CEO about the Pluto LNG project - Don Voelte on Inside Business.

ALAN KOHLER, PRESENTER: Despite talk of debt markets being in lockdown, Woodside Petroleum this week confidently said it would be borrowing billions of dollars to finish one of the biggest, most ambitious Capex budgets ever seen on Australia. No equity issue for Woodside apparently. To deliver the $12 billion Pluto LNG project of the WA coast the company will be cutting costs, selling assets and talking to Banks.

The company also turned in a solid set of results with its full year profit up 73 per cent to $1.8 billion. I spoke to Woodside boss Don Volte.

Well Don Volte perhaps we can start with just clarifying how much do you have to left to spend developing the Pluto field in Western Australia?

DON VOLTE, WOODSIDE PETROLEUM CEO: Our major portion of the big spend will be in 2009. In 2010 we go into a commission mode but the major portion of construction will be finished by that time. All the components have been purchased at this point and all the major contracts in place. So getting through 2009 is the main funding hurdle.

ALAN KOHLER: So what's the total you have to spend this year? Is it $7.5 billion, something like that?

DON VOLTE: It comes down to $7.2 billion I believe is the actual number that was committed to. We've, with the A dollar exchange, in other words with the A dollar weakness versus the US the budget actually increased a bit and then we brought that back down through funding reductions and deferrals. So we have about a $7 billion spend this year, yes.

ALAN KOHLER: And you reckon you've got a one to $1.7 billion gap at this stage.

DON VOLTE: At this stage...

ALAN KOHLER: And that includes selling what you call non core assets and reducing costs by 500 million?

DON VOLTE: Yeah, we've committed to the cost reductions, we have more to come there. We have not committed to any sale of any asset. What we said was we may test the market place. So we believe that we have alternatives...

ALAN KOHLER: The market place is not very good.

DON VOLTE: Well I don't know about that. You take a look at the coal seam methane sales recently and gas is valuable in that respect.

ALAN KOHLER: They all went crazy.

DON VOLTE: I don't think I'll make too many comments about that. The market place is what the market place is and people felt they were worth that and more than one company put those big dollars up.

ALAN KOHLER: So do you cross your heart and hope to die no capital raising this year, no equity raising share issue?

DON VOLTE: It's not the intention to do a capital raise this year. What we're doing is basically trying to fill the gap funding until we get Pluto on stream first thing in 2011. At that point with those contracts we believe that the spending crisis, as you might call it, is over. It's our full intent to reach the debt markets and fill the gap that way.