He said during Woodside's first-half earnings call this morning that Qatar announcing it would increase its exports from 77 million tonnes per annum to 100MMtpa would only impact his projects in an indirect way, reminding analysts that the proposed Browse Basin development is low cost and has liquids credits as Qatar's LNG does. 

 

"We expect the [Qataris] will target mostly Pakistan and India, and already have significant volumes going to both those countries," he said.

 

"I'd step back from the shock of ‘my goodness, the Qataris are coming back in'. It's actually a vote of confidence in the fact that the market will open up, and the lowest-cost producer is saying ‘we want to participate in that when it does'.

 

"They're seeing the same things we are and want to ensure buyers are considering their volumes.

 

"They won't directly compete with us, but those who may have been competing with the Qataris will move to compete in the markets we're targeting."

 

Yet given buyers' emerging adeptness at utilising increasing market liquidity to get better prices, Coleman said only 5-7 of the lowest-cost projects would move forward.

 

"Then there will be a period when the market will need to soak that up. So we're trying to position our projects to be in that group," he said.

 

Australia was still well-positioned with its strong advantage in shipping costs, though, as buyers still need geographic diversification.

 

As for Woodside's next LNG project, the company has 25 people embedded in Bechtel's team at Wheatstone to ensure a safe and reliable start-up, which is still scheduled for next month, contributing more than 13 million barrels of oil equivalent to Woodside's annual production.

 

Woodside is also considering the merits of capacity enhancements at Pluto, a transport pipeline to the North West Shelf, or a small stand-alone train, and will decide by the end of 2017.

 

While joint venture alignment is seen as the biggest obstacle to expanding the NWSV, Coleman re-iterated this morning that the JV is aligned on at least having Browse as a reference development concept.

 

The NWS has a tolling proposal out to Browse, Scarborough and "another JV"; with the Browse JV progressing a joint technical feasibility study with Woodside targeting a decision for later this year.

 

 

Linked to LNG prices, Coleman also sees plenty of signs that the oil markets are continuing the rapid rebalancing, which will be "hard to stop" once it occurs purely because there are no really big, significant conventional oil projects being developed at this point in time.

 

His only note of caution was analysts taking five-year averages on crude oil inventory as a market gauge.

 

"We need to look at the five-year average of draw-down days, as those numbers are much closer to the five-year average, simply because demand has increased over the period," he said.

 

"Just using inventory as a number does not reflect the fact that demand has also increased over the period."

 

Since February there have been drawdowns in both OECD and US oil inventories, and last month saw the largest monthly US crude stock drawdown for more than three years.

 

Woodside is planning its projects in line with this optimism, with its SNE oil project in Senegal falling into its first ‘horizon' period, targeting first oil between 2021-23, with a five-well drilling campaign now completed and the transition is being undertaken to Woodside operating those assets, Coleman said.

 

Myanmar is in Horizon 2, to be developed between 2022 and 2026, with 100% exploration success, most recently in the Rakhine Basin where Woodside is the largest acreage holder, with more drilling planned into 2018.

 

Some of Coleman's optimism is based on the fact that the pace of growth in US oil production is slowing and costs are rising.

 

Coleman noted that, since reaching an agreement in October last year, OPEC has had a generally high level of compliance on production restraint. 

 

OPEC has also said it will refocus on reducing export deliveries. 

 

"Globally oil demand remains strong and is on track to grow by about 1.7MMbopd in 2017," Coleman said.

 

"We said last year we're expecting a rebalancing in 2017; it's been delayed as some OPEC members not under the quota compliance requirements are producing more than expecting.

 

"There is the expectation that the first quarter of next year will be a little uncertain depending on how US producers respond, but we've been range-bound between US$45-60, what we expect through the first half of 2018."

 

There are also early signs of gas-oil ratios increasing in the Permian Basin, and Coleman said "the dance there of consolidating assets has run its course". 

 

Brazil has also experienced a production increase.