A new report warns investors and shareholders that environmental and heritage approvals for Woodside’s highly controversial Scarborough project are ‘in a mess’, creating major risks and uncertainty for the project less than two months before a financial investment decision is scheduled by the company.
The report, released by the Conservation Council of WA (CCWA) shows that almost every environmental and heritage approval for the $16bn project remains outstanding, subject to unresolved legal challenges, requires updating, or is behind schedule, while a new area of legal and reputational risk emerging around Aboriginal heritage.
According to the report, Woodside’s market disclosures about the progress of approvals for the project have been vague and do not provide the level of detail required for investors to properly assess risks. The ‘Incomplete and Uncertain’ report aims to address this information gap by providing rigorous independent analysis of each of the project’s major approvals.
Some of the outstanding issues identified in the report include:
- an unresolved legal challenge in the WA Supreme Court against primary approvals for processing the Scarborough gas
- unresolved appeals against the Works Approval to expand the Pluto LNG processing plant, including from Traditional Owners
- Approvals for the development of the offshore Scarborough field not yet submitted or assessed by the regulator
- Section 18 Aboriginal Heritage approvals outdated and uncertain
- An ongoing review of conditions on greenhouse gas emissions by the WA EPA
Piers Verstegen, Policy and Legal Director at CCWA said: “With only a matter of weeks until Woodside is due to commit $16bn to this development, our investigations show that almost all of the essential environmental and heritage approvals for the project are unresolved and uncertain. Overall, approvals for this project are in a mess, and are nowhere near the point where investors can responsibly commit capital.
“The Scarborough and Pluto LNG project is a highly complex undertaking. If it proceeds, it will be one of Australia’s most polluting fossil fuel projects in one of the world’s most sensitive environments, with globally significant Aboriginal cultural heritage values. Approvals are required from at least five different regulatory authorities and so far, Woodside has failed to significantly de-risk any of these approvals.
“Woodside’s approach towards environmental approvals has been highly arrogant. The company has tried to cut corners and avoid due process while taking regulators for granted. Ultimately this approach has increased risk, by exposing decisions to legal challenge and failing to address fundamental concerns such as the very high carbon pollution and impacts to ancient Aboriginal heritage.
“It is not surprising that Woodside has struggled to find an investor willing to buy into this project given the high-risk gamble that the company wants to take, and the lack of progress towards resolving major challenges still facing the project.
“Any one of the many issues identified in our analysis could cause major disruptions, delays or cost blowouts for the project. Taken together, the risks are multiplied, making Woodside’s timeline for an investment decision look reckless in the extreme.
“Nowhere in Woodside’s market disclosures has the company released a full list of approvals required, what progress has been made, and the outstanding risks. It is possible that senior management and the company board itself does not even have a clear picture of these risks.
“While Woodside appears willing to accept a very high level of risk to see the Scarborough project proceed, other partners and investors are unlikely to share the same risk appetite.
“We urge shareholders and investors to do their own due diligence rather than relying on the vague information Woodside has provided about approvals for the project, and we hope the information we have released will assist investors to make their own assessment of risks.
“We recommended that no further capital is committed to this project by investors, and that shareholders seek assurances from Woodside that it will not recklessly commit capital to the development until the many outstanding issues and uncertainties have been resolved.”
The ‘Incomplete and Uncertain – Environment and heritage approvals for the Woodside Scarborough project’ investor briefing is available to download, here.
MEDIA INFORMATION: The Conservation Council of WA (CCWA) is the state’s foremost non-profit, non-government conservation organisation representing more than 100 environmental organisations across Western Australia.
For more information, visit: ccwa.org.au.
CONTACT: For any enquiries relating to this release, please contact Robert Davies
08 9420 7291 / 0412 272 570 or by email, [email protected]