A shareholder activist group is demanding that Woodside Energy extracts more value for investors from its capital, not more oil and gas.
The Australian Centre for Corporate Responsibility (ACCR) on Thursday said Woodside was under pressure to improve, following a majority (58 per cent) vote against its climate plan at the last annual general meeting
Releasing a report, What's Next For Woodside?, the centre said share buybacks would deliver 140 per cent more value for shareholders than going ahead with the Browse project off the coast of Western Australia and Sunrise in the Timor Sea.
Developing Browse was more expensive than 70 per cent of the world's unapproved gas projects, and the recently acquired Driftwood project was more expensive than three quarters (76 per cent) of those in the US, the report found.
"If Woodside can move past its recent habit of pursuing high-capex, financially-marginal fossil fuel projects, then it has a real shot at delivering what investors want - better capital returns and reduced exposure to climate risk," analyst Alex Hillman said.
"Last week's acquisition of Driftwood LNG is simply another example of its failing strategy ... Last year it was Trion (in the Gulf of Mexico)," he said.
Mr Hillman said there were lower-risk options the board could look at, as peers were adding value to shareholders by increasing returns - especially through buybacks.
The shareholder activist organisation holds a mere 322 Woodside shares, of a total 1,898,749,771 on issue, which means it has 0.00000017 per cent of issued shares, Woodside told AAP.
But the group also enlists the support of other shareholders in its campaign to release free cash flow to investors that would otherwise bankroll fossil fuel production growth.
Woodside chief executive Meg O'Neill says the company has listened carefully to investors and is providing information about market demand and important updates to emissions reduction plans.
It is also banking on ongoing demand for LNG in Asian markets, citing long-term sale and purchase agreements with Taiwan and Japan and a $1 billion loan agreement with a Japanese institution to fund the Scarborough project in the Carnarvon Basin.
But it faces ongoing delays at Browse, Australia's largest untapped gas resource, as it mulls where to process the gas after being tangled in red and green tape for more than two years.
The North West Shelf project is seeking to extend Woodside's Burrup processing hub until 2070, which the Conservation Council of WA says is "Australia's biggest climate decision" as it would emit nearly nine times the nation's annual carbon emissions.
Separately, investment bank UBS said Woodside faced heavy capital expenditure on Scarborough and Driftwood through to 2028.
"Given Driftwood LNG currently screens as a higher relative cost plant, producing into an oversupplied LNG market in 2029+, we remain cautious on Woodside achieving its targeted returns," UBS said in a research note.
The Scarborough project, about 375 km off the WA coast, is more than two-thirds complete and remains on target for first LNG cargo in 2026, Woodside said in its latest earnings report.
Declining production from the North West Shelf and Bass Strait is expected to be offset by Scarborough and the Sangomar field offshore Senegal where Woodside achieved first oil in June.
