PERTH/BENGALURU (Nov 5): Australia's Woodside Energy on Thursday unveiled a new payout policy for investors and flagged it would axe more than 500 jobs globally, as it set out higher targets for cost cutting and return on capital.

Favoured by investors for paying out up to 80% of its underlying net profit in dividends since 2013, Woodside scrapped that policy and said it would now pay 20% to 40% of adjusted operating cash flow, with 20% as the base and another 20% for additional dividends or buybacks.

CEO Liz Westcott said Woodside now expects to slash costs by US$400 million, up from US$350 million announced in August, and the company aims to achieve a 12% to 15% return on investment for all projects by the middle of the next decade.

"Our priority now is to extract more value from our portfolio," Westcott said in a statement ahead of the company's annual Capital Markets Day.

Australia's biggest independent oil and gas company previously had a return target of more than 15% for offshore oil projects, more than 12% for gas projects and more than 10% for new energy projects.

Woodside's shares fell 5.5% on Thursday, in line with rival Santos, following a slide in oil prices.

The 500 job cuts Woodside announced equate to around 10% of its global workforce.

It expects to increase production by 32% to 280 million barrels of oil equivalent by 2032. That includes output from its five-million-metric-ton-a-year Scarborough liquefied natural gas project, set to produce its first cargo by the end of the year, the Trion oil project in the Gulf of Mexico, and the 16.5-million-ton Louisiana LNG facility coming online by 2029.

Last week the company signed a 20-year deal to supply QatarEnergy with up to three million tons a year of LNG from the Louisiana plant starting in 2030, and is working on further deals.

"Customers are looking to get a range of supply contracts," Westcott said, adding that some were seeking flexible deals, while others were discussing 20-year or seven-year contracts.

Woodside still wants to sell down its stake in Louisiana LNG, where the second phase is set to involve an expansion to 27.5 million tons a year, but Westcott said she "remained patient".

"We're looking for a partner who will be with us for decades," she said.

Under Westcott, who was appointed CEO in April after Meg O'Neill left to lead BP, Woodside has divested several assets including its Trinidad and Tobago gas fields and its stake in the Greater Sunrise project, and is looking to sell a clean ammonia project.

The company also dropped its Scope 3 emissions target, which relate to emissions from the use of its products, and on Thursday unveiled a new climate plan that aims to reduce its direct and indirect "emissions intensity" by 30% by 2035 from 2025 levels.

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