Woodside drops climate targets despite windfall profits from Iran conflict

Woodside Energy, Australia's largest oil and gas company, has scrapped its long-term emissions and clean energy targets while simultaneously reporting a sharp rise in profits fuelled by disruptions to global oil supplies caused by the Iran conflict.

Financial documents lodged on Tuesday showed the Perth-headquartered company's sales profit rose 27% to $1.67bn ($A2.33bn) over the six-month reporting period. Woodside said it expects further trading gains by redirecting oil barrels toward markets offering premium prices.

Clean energy commitments abandoned

At the same time, Woodside said it would drop its earlier commitment to invest $US5bn ($A7bn) in new energy products such as hydrogen by 2030. The company has also placed its new US ammonia business under strategic review — an asset previously seen as one of its most promising options for decarbonising power generation.

New chief executive Liz Westcott told analysts the company would "retire" its so-called scope 3 investment and abatement targets, which cover emissions generated by Woodside's customers, saying these targets were set in a "different market context". She said markets for emerging low-carbon technologies — including hydrogen, ammonia and carbon capture and storage — had developed more slowly than expected. Going forward, the company said its new energy business would be shaped by customer demand and commercial market conditions.

Criticism from climate campaigners

Woodside is among a growing number of major oil companies posting large profits linked to the Iran conflict, even as climate change driven by fossil fuel emissions continues to affect communities worldwide, including through a recent series of deadly heatwaves in the northern hemisphere. Brett Morgan of climate activist group Market Forces criticised the decision, saying Woodside had abandoned already weak climate commitments despite years of investor pressure for stronger action. He called on major shareholders, including Australian superannuation funds, to demand the company halt its plans to expand fossil fuel operations.

Woodside also declared an interim dividend of US57 cents per share, up from US53 cents a year earlier.