Woodside Rises on Outlook for Post-Quake LNG Demand, BHP Stake Speculation

Woodside Petroleum Ltd. (WPL) climbed to the highest in 11 months amid forecasts that Japan’s nuclear reactor crisis will increase natural gas demand and speculation BHP Billiton Ltd. (BHP) may be interested in buying a stake.

Woodside, Australia’s second-biggest oil and gas producer, gained 0.3 percent to A$47.75 at the 4:10 p.m close in Sydney, the highest since April 2010, while the benchmark S&P/ASX 200 Index advanced 1.4 percent. The shares have risen 13 percent since March 10, the day before a devastating earthquake and tsunami struck Japan, damaging the Fukushima Dai-Ichi plant.

“The world has changed for liquefied natural gas,” said Xavier Grunauer, a Sydney-based analyst at Nomura Holdings Ltd.

Increasing oil prices, expectations that Asian countries will shift away from nuclear power and speculation BHP is considering acquiring Royal Dutch Shell Plc (RDSA)’s remaining 24 percent stake in Woodside have driven the shares higher, said analysts including Grunauer and Deutsche Bank AG’s John Hirjee.

Woodside is unaware of any explanation for the share price increase other than information already announced and “speculation about a potential takeover,” the Perth-based company said in a statement to the Australian stock exchange today after the market closed, declining to comment further.

Fiona Martin, a spokeswoman in Melbourne for BHP, the world’s biggest mining company, declined to comment on reports it is considering buying Woodside shares. The oil explorer’s stock has advanced for six consecutive days, the longest winning streak for a year.

BHP as Buyer

BG Group Plc (BG/), the U.K.’s third-largest gas producer, has climbed 8.7 percent in London since March 10. BG is proceeding with a $15 billion LNG project in Queensland state.

Woodside, operator of the North West Shelf project, is due to begin output this year at the Pluto LNG venture in Western Australia and is planning the Browse and Sunrise projects. Santos Ltd. (STO) is building a $16 billion LNG development in Queensland with partners including Total SA. (FP)

“The demand side from Japan should be stronger,” Hirjee of Deutsche Bank in Melbourne said last week. “People have started to say, ‘What will happen if there’s less nuclear power in Japan?’ Well, LNG will be the key fuel that’s utilized and Woodside therefore will be a beneficiary.”

Santos gained 0.1 percent to A$15.58 and has risen 8 percent since March 10, while the S&P/ASX 200 is up 2.6 percent.

Grunauer of Nomura said he “wouldn’t be surprised” if BHP, also Australia’s largest producer of oil and gas, sought to buy Shell’s Woodside stake, which was valued at about A$9 billion ($9.3 billion). “The landscape has changed, and BHP is more interested in gas. If BHP’s top management is studying the story, I wouldn’t be surprised.”

To contact the reporter on this story: James Paton in Sydney jpaton4@bloomberg.net.

To contact the editor responsible for this story: Amit Prakash at aprakash1@bloomberg.net.

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