- Woodside shares remain in positive territory amid management decision to end investment in Myanmar
- Political unrest along with human rights violations weighed in on the outcome
- Withdrawal of assets is expected to impact the company’s bottom line
The Woodside Petroleum Limited (ASX: WPL) share price is one of the few companies that’s in the green today. This comes after the company announced that it will pull its assets out of the Southeast Asian nation of Myanmar.
Over the last week, the world markets have dropped regarding concerns of military tension between Russia and Ukraine. In addition, interest rate rises and the spread of Omicron is fuelling investors’ concerns.
The S&P/ASX 200 Index (ASX: XJO) has fallen by more than 10% and is officially in correction territory. However, Woodside shares have maintained their edge and become resilient to market movements due to stable oil prices.
At the time of writing, the energy giant’s shares are up 1.95% to $24.60 apiece. However, in early morning trade, its shares reached an intraday high of $25.24.
In comparison, the benchmark index is down 2.11% to 6,814.6 points.
Woodside signals end of partnership
In a statement to the ASX, Woodside advised it has decided to withdraw from its interest in Myanmar due to political unrest.
For over 8 years, the company has conducted multiple exploration and drilling campaigns in hope to develop energy resources.
However, all Myanmar business decisions were put under review following the State of Emergency declared in February 2021. The military took over the country and detained senior government leaders in response to alleged fraud during November’s 2020 general election. Widespread human rights abuses were reported on a frequent basis in Myanmar.
Woodside holds a 40% participating interest in the A-6 Joint Venture as joint operator, as well as participating interests in exploration permits AD-1 and AD-8.
In 2021, the company retracted the exploration permits covering offshore Blocks AD-2, AD-5, and A-4.
Currently, Blocks AD-6, AD-7 and A-7 are in the process of being relinquished.
The other remaining Blocks AD-1 and AD-8, the A-6 Joint Venture and the A-6 production sharing contract have begun a formal exit.
The decision to withdraw from Blocks A-6 and AD-1 is expected to impact net profit after tax (NPAT) by approximately US$138 million (A$194.9 million). This is in addition to the US$71 million (A$100.28 million) exploration and evaluation expense for Block AD-7.
Woodside CEO, Meg O’Neill touched on its state of affairs, saying:
Woodside has been a responsible foreign investor in Myanmar since 2013 with our conduct guided by the UN Guiding Principles on Business and Human Rights and other relevant international standards.
Given the ongoing situation in Myanmar we can no longer contemplate Woodside’s participation in the development of the A-6 gas resources, nor other future activities in-country.
Woodside share price summary
The Woodside share price is down 4% over the last 12 months, but up 12% year-to-date. The company’s shares accelerated to an 11-month high of $25.90 last week despite the turmoil in global markets.
Based on today’s price, Woodside commands a market capitalisation of $23.86 billion, with approximately 969.63 million shares on issue.