The rating on Woodside Petroleum Ltd. (Woodside) reflects the company's cost-competitive operations, solid operating track record, incremental cash flow from new projects, and long reserve life. These strengths are offset by the company's limited, although improving, geographic diversity, large capital-expenditure commitments, 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 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. However, the recently announced development approval for
