The rating on Australian-based oil and gas producer Woodside Petroleum Ltd. reflects the company's cost-competitive operations, long reserve life, strong development pipeline, and favorable market outlook for liquefied natural gas (LNG). In addition, Woodside has lower gas price exposure than its U.S. peers, with LNG pricing linked to oil prices and floor-price protection under the offtake agreements for its massive Pluto LNG project. These strengths are partly offset by the company's limited, although improving, geographic diversity, large capital-expenditure commitments, and exposure to rising operating and development costs. Woodside's market position is underpinned by long-life gas reserves and low-cost operations, although key-asset-concentration risk remains. Long-life reserves and low gas-lifting costs give Woodside considerable flexibility to withstand volatile oil prices and the
