Woodside Invests in Moroccan Exploration Prospects

SYDNEY--Australia's Woodside Petroleum Ltd. (WPL.AU) added exploration prospects in Morocco to a growing portfolio of international assets it hopes will someday offset stagnating growth at home.

Woodside agreed to buy a 25% interest in six permits in the Doukkala Basin off the African country's northwest coat, for an undisclosed sum. It has an option to increase its holding to 50% and assume operatorship from current owner Chariot Oil & Gas PLC (CHAR.LN), contingent on carrying drilling costs.

The deal adds to recent purchases by Woodside of exploration permits in Myanmar, Ireland and New Zealand.

The company's record outside Australia to date has been uninspiring. Dry holes offshore South Korea and unsuccessful ventures in Africa, including in Mauritania, may have made investors apprehensive about its renewed offshore focus.

Still, Woodside Chief Executive Peter Coleman last month demonstrated the company would attempt to take a conservative approach to investments by walking away from a proposed US$2.5 billion deal to buy into the large Leviathan gas discovery offshore Israel.

Analysts are concerned the company's earnings will fall in coming years, after it failed to find enough gas to feed a planned expansion of its Pluto export project in Australia. Cost pressures also delayed the Browse gas-export project nearby by at least two years.

Mr. Coleman said the Moroccan assets, which cover more than 4,000 square miles in water depths ranging from 500-to-12,000 feet, fit with its strategy of investing in high-quality "frontier and emerging basins'.

Write to Ross Kelly at [e-mail]

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