Exxon Eyes Woodside as Australia Warns on Takeover
A reported acquisition target has quickly become a political issue, raising new questions about the future of one of Australia's largest LNG producers.
(Reuters) — Reports that Exxon Mobil is evaluating a possible acquisition of Australia's Woodside Energy have drawn opposition from Western Australian officials, highlighting potential political hurdles to any future deal involving one of the country's largest LNG producers.
Bloomberg News reported June 12 that Exxon has been evaluating acquisition targets, including Woodside, citing people familiar with the matter. According to the report, discussions remain at an early stage and no transaction has been announced.
The prospect of a deal gained further attention June 14 when Western Australia Premier Roger Cook said the state government would oppose any takeover that involved relocating Woodside's headquarters from Perth.
"The WA government will fight hard to keep Woodside Western Australian," Cook said in a statement. "Overseas interests have sought to acquire Woodside before, and the reasons those efforts were defeated have not changed."
Woodside declined to comment on the Bloomberg report, while Exxon did not respond to requests for comment.
A potential acquisition would significantly expand Exxon's LNG portfolio and strengthen its position in Asian gas markets. Woodside is Australia's largest independent energy company and operates key LNG assets, including the North West Shelf LNG project.
Exxon already has an established presence in Australia's natural gas sector. The company is a partner with Woodside in eastern Australian gas operations and holds a 25% stake in the Chevron-operated Gorgon LNG project in Western Australia.
The report fueled investor interest, with Woodside's U.S.-listed shares rising more than 8% following news of Exxon's interest.
The state government's opposition echoes a previous attempt by foreign interests to acquire Woodside. In 2001, Western Australian officials successfully opposed a takeover bid by Shell on national-interest grounds.
Any future transaction would ultimately require review by Australia's Foreign Investment Review Board and approval from the federal government.
The reported interest comes as Woodside advances several major LNG developments, including the Browse project, Australia's largest undeveloped gas resource. The project is expected to supply gas to the North West Shelf LNG facility and carries an estimated development cost of $35 billion.
On June 12, Woodside also moved to strengthen its position in Browse by exercising preemptive rights to acquire PetroChina's 10.67% interest in the project, increasing Woodside's ownership stake to nearly 42%.
Analysts have noted that acquiring Woodside would provide Exxon with additional LNG export capacity and greater exposure to growing Asian demand, reinforcing natural gas as a key pillar of the company's long-term growth strategy.