The ratings on Woodside Petroleum Ltd. reflect its cost-competitive operations, 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, although improving, geographic diversity, higher-risk exploration and development projects, and vulnerability to oil price and currency movements. Woodside's above-average business position reflects the expansion of its significant investment in domestic gas and liquefied natural gas (LNG) fields from the North West Shelf Venture (NWSV) in Western Australia and increasing diversification into oil both in Western Australia and internationally. Strong cash flows from existing operations, together with existing debt facilities, have funded Woodside's share of the recently completed NWSV fourth train and infrastructure expansion, while enabling an
