Woodside has signaled that uncertainty surrounding the federal government’s proposed domestic gas reservation scheme could delay investment decisions on four planned development wells in the Bass Strait. The company emphasized the need to fully understand how the legislation might affect market dynamics before committing additional capital.

The reservation scheme, put forward by the Labor government to secure increased gas supply for Australian consumers, has drawn criticism from several energy producers. The proposal aims to prioritize domestic gas availability amid concerns over future supply on the east coast, but industry leaders warn that its current framework could dampen investment incentives.

Woodside chief executive Liz Westcott said the company supports the concept of a domestic gas reservation policy but expressed reservations about the details of the current proposal. She highlighted the complexity of the legislation, including significant ministerial discretion, as factors contributing to uncertainty around market behavior and investment confidence.

“The uncertainty we all have is what the legislation would result in, in terms of how the market would behave,” Westcott said. “It is quite complex, a lot of ministerial discretion, and so these are things we’re going to have to get our mind around before we can make a commitment on any further investment.”

Origin Energy’s CEO Frank Calabria has also voiced concerns, stating on Tuesday that the reservation scheme requires further amendments to be viable for producers.

Woodside’s caution comes amid a positive production update. The company reported a 12 percent increase in production for the September quarter, reaching 46.2 million barrels of oil equivalent. This rebound follows a period of planned maintenance at its Pluto LNG operations in the prior quarter. Operating revenue for the period rose 2 percent to US$4.28 billion (approximately A$6.1 billion), with an average realized price of US$84 per barrel of oil equivalent.

While assessing the technical aspects of the four proposed Bass Strait wells, Westcott acknowledged that Woodside’s assets have a finite production life, making timely clarity on the legislation crucial. She noted Woodside supplies roughly 20 percent of the gas market across Australia’s east and west coasts and is focused on the domestic market in Victoria.

“The scheme should support energy security while preserving incentives for companies to invest,” Westcott said, adding that a market-oriented approach is necessary to balance both objectives.

Woodside also adjusted its full-year production guidance, narrowing the upper end to 181 million barrels of oil equivalent from a previous estimate of 185 million barrels, while maintaining the lower end at 174 million barrels. The revision reflects anticipated lower output from the Beaumont New Ammonia project, reduced production at the Okha floating production storage and offloading (FPSO) facility, and a tightening timeline for first liquefied natural gas (LNG) shipment from the Scarborough project.

At the end of September, Woodside reported that its Scarborough LNG development and the Pluto Train 2 expansion were 99 percent complete, with first LNG shipments expected in the December quarter. Gas was also introduced into the Scarborough floating production unit and exported into the regional trunkline during the quarter.

Following a strategic review, Woodside said it will commence a formal process to reduce investment in the Beaumont New Ammonia project, citing the evolving pace of the lower-carbon ammonia market as a factor.