Australian listed companies intending to reach final investment decisions (FID) on LNG projects over the next two years include Woodside Petroleum, which seeks to sanction Scarborough and Browse projects in WA, Santos with the Barossa gas project to deliver Darwin LNG facilities and oil exploration with expansion in Papua New Guinea, where Santos is also involved.
Chevron's CEO Mike Wirth described the Mexican opportunity as "particularly exciting", with one of the largest discovered gas resources in the world. With 9.5 million tons contracted with LNG sales, the project is "approaching FID, a timeline we fully support," he said.
The stiffening of the LNG's competitive environment comes as spot prices for fuel in Asian trade close to a three-year low, and challenges new ventures that want to sign long-term sales offerings at prices high enough to support multi-billion dollar investments.
& # 39; We believe Australia will be a major focus for Chevron & # 39;
Meanwhile, the acquisition will mean that Chevron will look at "high-grade" the combined portfolio, with Wirth signaling $ US1
The Australian portfolio, which includes a stake in Woodside-run North West Shelf venture, as well as about 47 percent of Gorgon and 64.14 percent of Wheatstone, was unlikely to be affected, said Wood Mackenzie analyst David Low. This is due to the fact that it grew in importance in the Asia-Pacific portfolio, with the liquidation of Chevron's positions in Thailand and Indonesia.
"The Chevron-Anadarko transaction will give increased urgency from Chevron to deliver non-core values," Low said.
"It is likely that a number of upstream funds in Asia will be sold, but unlikely that Australia will count as part of it because of the importance of these assets in the portfolio. Rather, we believe that Australia will be a major focus for Chevron in the years to come. "
Mr Low said Wheatstone and Gorgon, two" clever cash-generating assets ", would be important for servicing Chevron's promised increased dividend, while Northwest Shelf provides an opportunity for Chevron to accelerate the commercialization of its undeveloped gas outside WA. -Coast.
But Credit Suisse analyst Saul Kavonic disagreed and said that the acquisition of Anadarko could give Chevron the impetus to sell its stake in the Northwest shelf. He said that with Chevron not in the Browse gas project, which is earmarked as the main source of replacement gas for the Northwest Shelf LNG, the US player sets itself as an unchanged JV partner, potentially giving Woodside the opportunity to streamline the interests across ventures by buy Chevron out. He is called PetroChina, who is in the Browse project, but not in the North West Shelf venture, as another potential candidate for Chevron's stake.
Chevron's sixth share in the North West Shelf venture is worth around $ US5.8 billion, with potential upside from projects to extend its life, estimated Kavonic, which also suggested Chevron's takeover of Anadarko, can slowly pose a final challenge to Mozambique LNG.
RBCs Wilson said the takeover also cement the consolidation trend in the LNG sector, which has also entered into a joint agreement between Tokyo Gas and Centrica to work together in the LNG supply in the Asia-Pacific and has an agreement to purchase LNG from Mozambique's LNG.
He added that such mergers and acquisition activities also inevitably spark consideration of any potential target companies in the local area, where Santos last year came within the sights of US private equity firm Harbor Energy, and Oil Search previously attracted attention from Woodside.  He said that although he did not immediately read through the agreement in Australia, such consolidation had a knock-on effect and underlined in any case "a reinvigorated interest in energy companies supported by a strengthened oil market".