The Woodside Petroleum Limited (ASX: WPL) share price is heading south today despite a positive update from the company.
At the time of writing, the oil and gas company's shares are exchanging hands for $32.15, down 1.2%.
Let's take a closer look at what Woodside announced, and what might be dragging its shares lower.
Image source: Getty Images
Woodside accelerates production from offshore Pluto fields
The Woodside share price is in the red despite the company revealing it has commenced the processing of gas from the offshore Pluto fields located at the North West Shelf project's (NWS) Karratha gas plant (KGP).
Notably, the production is ahead of schedule following the start-up of the Pluto-KGP Interconnector.
The interconnector is a 3.2-kilometre pipeline that connects Pluto liquefied natural gas (LNG) with KGP. This allows other resource owners' gas to be processed at KGP.
The plant is expected to process roughly 2.5 million tonnes of LNG and around 20 petajoules of domestic gas from Pluto between 2022 to 2025.
One petajoule is equivalent to powering 19,000 homes for an entire year, or almost 380,000 dwellings with 20 petajoules.
Woodside CEO Meg O'Neill touched on the "significant achievement", saying:
The start-up of the Pluto-KGP Interconnector provides access to spare capacity at Karratha Gas Plant to process gas owned by other resource owners, both onshore and offshore Western Australia. The commencement of Pluto gas flowing through the Interconnector is the first example of this.
The processing of gas from the offshore Pluto fields through Karratha Gas Plant enables Woodside to deliver additional LNG cargoes into the international gas market.
The commercial agreements underpinning third-party gas processing at the North West Shelf reflect the commitment of Woodside and the North West Shelf Project to maximising value from the significant infrastructure on the Burrup Peninsula.
So why are Woodside shares falling?
It is possible the Woodside share price is being affected by falling oil prices today. This comes amid news the Biden administration is contemplating releasing its oil reserves, as the war between Russia and Ukraine continues to impact fuel prices.
The plan being weighed up involves releasing approximately a million barrels of crude oil per day from the strategic petroleum reserve.
The total release is expected to be as much as 180 million barrels of oil to ease demand for the crucial commodity.
In addition, efforts are being co-ordinated with other countries to also release their strategic oil reserves.
While no final decision has yet to be reached by the United States, an announcement could come as soon as tonight.
About the Woodside share price
Over the past 12 months, the Woodside share price has risen by 34% in value. However, when looking at year to date, its shares have surged by almost 50% following an uptick in oil prices.
Based on today's price, Woodside commands a market capitalisation of roughly $31.8 billion.
