Woodside Petroleum has slated more than $2.5 billion for projects in Israel and Myanmar (Burma) as chief executive Peter Coleman continues to lead a diversification push.
However, analysts have questioned the risks involved with ploughing money into politically unstable parts of the world, instead of concentrating on projects closer to home.
Shares in Woodside gained three per cent as the company said it was on track to lift oil production this year after posting a 98 per cent boost to full year profit.
The company plans to broaden its portfolio and continue with acquisitions as it tries to drive down the cost of developing liquefied natural gas (LNG) facilities amid increased competition.
Mr Coleman denied the Leviathan project in Israel and other overseas projects were taking precedence over Pluto, Browse and Sunrise in or near Australia.
“We’re moving forward on all of those projects as quickly as we can,” Mr Coleman told analysts on Wednesday.
“They’re just in different places of the development.
“I wouldn’t say any change at all. It’s just more reflective of Woodside now having a more diversified portfolio.”
Woodside will consider a final investment decision on a domestic gas development related to Leviathan this year.
Mr Coleman said the company was still heading towards a final investment decision on the Browse project by the middle of the year, but no agreement had been reached on the Sunrise project.
Woodside’s net profit rose to $US2.98 billion ($A2.89 billion) for the 2012 calendar year, from $US1.5 billion ($A1.46 billion).
The 2011 result was dragged down by the cost of delays to its $US14.9 billion Pluto liquefied natural gas (LNG) project off the northwest coast of Western Australia.
The company said the profit result was underpinned by a 31 per cent increase in production, a 29.6 per cent increase in sales revenue to $US6.2 billion ($A6.12 billion), from $US4.8 billion ($A4.66 billion).
The Pluto LNG project and higher contributions from the Vincent and North West Shelf oil facilities also helped improve earnings.
Woodside’s production target for 2013 remains unchanged at a range of 88 MMboe to 94 MMboe (million barrels of oil equivalent).
The company increased its capital expenditure budget for 2013 for projects in Israel and Myanmar to $US2.6 billion ($A2.52 billion) and has forecast it will spend about $US1 billion on the Leviathan gas project in Israel.
The expected investment expenditure comprises $US2.1 billion ($A2.04 billion) capital plus $US500 million ($A485.34 million) of exploration expenditure.
Shares in the company closed $1.16, or 3.06 per cent, higher at $39.07.
Patersons oil and gas analyst Alexis Clark said the profit result fell within expectations and investors were pleased with the increased dividend of 65 cents.
“It was broadly positive,” Mr Clark said.
He said the Leviathan transaction and the Myanmar block were projects for the future.
“To some extent the Israel one is problematic due to the jurisdiction in the Middle East and the potential geopolitical issues there,” Mr Clark said.
Morningstar analyst Mark Taylor said he was disappointed the company was pressing ahead with the Israel project.
“It’s an unnecessary diversification away from their core area of expertise and where they’re located,” he said.
