Sydney, 16 July, 2020: Woodside’s $6.2 billion in writedowns, along with Origin’s $1.2 billion writedown is a clear demonstration to investors that the oil and gas industry is facing headwinds against its former glory days.
Commenting on Woodside and Origin’s announcements, Dan Gocher, Director of Climate and Environment, said:
“Oil and gas companies have long contended that stranded assets were a possibility in the distant future. These massive writedowns show beyond a doubt that oil and gas assets are being stranded right now.
“These writedowns follow BP and Shell’s decision to write down the value of oil and gas assets last month. This is a domino effect in the industry and the COVID-19 crisis may well have caused permanent demand destruction.
“Investors have a fiduciary responsibility to make the best decisions on behalf of their clients and members. Those institutional investors who still believe fossil fuels are a secure investment, need to recalibrate their investment strategy immediately.
“While Woodside’s increase to its internal carbon price (now US$80/tonne) is welcome, it only applies that price to emissions above its safeguard mechanism baseline(s). Woodside should disclose the impact of a US$80 carbon price applied to the cost of gas delivered to its destination markets, as that is likely to have a far more substantive impact on Woodside’s gas expansion plans. ACCR remains concerned that Woodside refuses to entertain any change to its underlying strategy, or keep investors informed of the continued risks to its business.”