The ratings on Woodside Petroleum Ltd. (Woodside) reflect cost-competitive operations, predictable cash flows from long-term domestic gas and liquefied natural gas (LNG) contracts, incremental cash flow from new oil projects, a successful reserve replacement strategy, and a long reserve life. These strengths are offset by the company's limited geographic diversity and vulnerability to oil price and currency movements. Woodside's business position reflects the expansion of its significant investment in the North West Shelf Venture (NWSV) and increasing diversification into oil, with production from its Laminaria-Corallina (LC) project and Legendre oil fields in offshore Western Australia. Strong cash flows from existing operations, together with existing debt facilities, will fund Woodside's share of the NWSV fourth train and infrastructure expansion, while enabling
