Woodside Shifts Focus from Clean Energy to Fossil Fuels

Woodside Energy Group Ltd., Australia’s largest oil and gas producer, is shifting its focus back to fossil fuels, scaling back its clean energy initiatives. The company announced it will aim for $350 million in annual cost savings starting in 2028, partly by reducing investments in lower-carbon projects. This includes retiring its scope three emissions-abatement target and abandoning a plan to spend $5 billion on clean-energy projects by 2030. The Beaumont New Ammonia project in Texas is also under review.

Chief Executive Officer Liz Westcott attributed the decision to a change in customer appetite for lower-carbon products and delays in policy frameworks supporting clean energy. “We need to be guided by where markets and customers are at,” she said. Woodside’s move comes as higher oil and LNG prices boosted its earnings, with net income rising 27% to $1.7 billion in the six months through June, despite a 13% drop in production.

The company’s stock has climbed nearly 20% since its last earnings report in February, supported by higher oil prices and supply disruptions. Brent crude averaged $87 a barrel over January-June, up from $71 a year earlier. Woodside maintains its scope one and two emissions reduction targets but will now prioritize LNG expansion to meet long-term energy demand and decarbonization goals.

Analysts warn the shift may alienate investors and climate activists concerned about fossil fuel expansion. Rohan Bowater of Accela Research noted that Woodside was already behind peers in transitioning to cleaner energy. The company’s production fell due to natural field decline, cyclones, and maintenance, but it plans to pay an interim dividend of 57 cents per share.