The rating on Woodside Petroleum Ltd. (Woodside) reflects its cost-competitive operations, incremental cash flow and geographical diversification from new oil projects, and 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 strong business position reflects the expansion of its significant investment in Australian 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 development program, while enabling an active offshore exploration program. The company's exploration acreage is
