Woodside Petroleum Ltd., Australia’s second-largest oil and gas producer, will join Daewoo International Corp. in an exploration venture off the coast of Myanmar as it moves to expand overseas.
Woodside will acquire a 40 percent stake in the project in the Rakhine Basin off western Myanmar, the Perth-based company said today in a statement. Daewoo, the trading unit of South Korean steelmaker Posco, will remain the operator of the production-sharing contract, Woodside said.
Woodside, seeking to broaden its portfolio of oil and gas assets to meet growth targets, is studying expansion options in the Eastern Mediterranean, Southeast Asia and the Americas, the company said in August. The energy producer joined a group that bid on gas exploration rights off the coast of Cyprus and has said it expects to get the results before the end of 2012.
Woodside shares rose 2.2 percent to A$35.98 at the close in Sydney, while the benchmark index gained 0.3 percent.
Myanmar is preparing to offer more oil exploration blocks to help fuel an economy that the Asian Development Bank said may grow as much as 8 percent a year for more than a decade. President Barack Obama in July permitted U.S. companies to invest in Myanmar for the first time in 15 years.
The Australian company, whose A$15 billion ($15.6 billion) Pluto liquefied natural gas project started production in April, is among LNG project developers in the country facing increasing construction costs and rising supply competition. Woodside also plans the Browse and Sunrise LNG ventures.
Chief Executive Officer Peter Coleman, an Australian citizen who joined Woodside in May 2011 after 27 years with Exxon Mobil Corp., believes that Woodside can’t generate “top quartile” returns based on its existing projects, James Bullen, a Sydney-based analyst at Bank of America Corp., wrote in a report in August.
The partnership with Daewoo is subject to completion of due diligence and government and other approvals, Woodside said.