ASIC said in a release that the company has improved its disclosure of possible restoration costs in future, disclosing what infrastructure will be fully removed but some costs remain unclear.
Decommissioning has become a hot topic, with activist shareholder group the Australaisian Centre for Corporate Responsibility the latest to launch a missive at the company over its decommissioning liabilities, demanding more transparency. The ACCR has suggested the ageing assets are a "time bomb".
Once Woodside takes BHP's petroleum assets — the deal will be voted at at the annual general meeting of May 19 — it will also inherit its legacy Gippsland Basin platforms offshore Victoria.
New CEO Meg O'Neill has previously assured analysts and shareholders its 50% share of costs is in fact lower than expected by the offshore regulator, which has already begun issuing directions stating it expects work to begin at some assets within seven years.
ASIC noted today that "full removal has not been provided for certain pipelines and infrastructure, parts of offshore platform substructures, and certain subsea infrastructure, and the reasons (for that)" and that it has also given an "indication of the additional costs if certain items for which full removal has not been provided for are not exempted from full removal by The National Offshore Petroleum Safety and Environmental Management Authority".
The watchdog remains concerned about its disclosures around assets that will not be fully removed from the seabed. It is "continuing its inquiries about why Woodside did not allow for the full removal of certain infrastructure assets in its financial report".
This is an expansion of its efforts to ensure all company directors, not just those of oil and gas producers, disclose underlying asset values and provisions.
Woodside's annual of last week left decommissioning progress, along with safety, in the "below target" block of its KPIs. It plugged and abandoned its Capella well and two Yodel wells. Its total decom bill at this point looks to be over US$2.2 billion.
Some 65% won't be due in the next 10 years; in 2020 it put that figure at a higher 73%.
"Australian legislation requires removal of structures, equipment and property, or alternative arrangements to removal which are satisfactory to the regulator," Woodside's annual said.
However it has said restoration obligations vary between jurisdictions and "are often non-prescriptive". With its BHP petroleum merger it takes assets in the US and Mexican Gulf of Mexico, the Caribbean, and frontier areas in Canada.
"The restoration obligation requires judgemental assumptions regarding removal date, environmental legislation and regulations, the extent of restoration activities required, the engineering methodology for estimating cost, future removal technologies in determining the removal cost, and liability-specific discount rates to determine the present value of these cash flows," Woodside said.
Onshore assets and all production facilities and above ground pipelines will be removed.
It will still plug and abandon wells -- it is in the middle of a large scale campaign at its Enfield oil field -- and move infrastructure and FPSOs but may keep some large scale trunk lines in place, its report said
Elsewhere some infrastructure from platforms to pipelines may remain, however "where it can be demonstrated that this will deliver equal or better health, safety and environmental outcomes". This often means leaving infrastructure that has become home to varied sea creatures in place.
At most, if it has to remove more than expected, the added cost will be up to $500 million.
It said actual costs may vary compared to assumptions.
Australia's total decom bill, estimated in 2021 in a report commissioned by National Energy Resources Australia, suggests it could be as high as A$52 billion.
