Wirtualna Polska Holding S.A. Annual Report 2015

FY2015 Annual Report · Wirtualna Polska Holding S.A.

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ANNUAL REPORT 2015

Strength through resilience

ON THE COVER
Our world-class Karratha Gas Plant increased
annual production capacity from 16.3 to 16.7 million
tonnes of LNG following system improvements
and debottlenecking.

OUR COMPASS

WHO WE ARE

WHERE WE’RE GOING

HOW WE’LL GET THERE

INTEGRITY
We are open, honest and fair. We do what we
say we will do. We have the courage to do the
right thing.

RESPECT
We give everyone a fair go. We listen.

WORKING SUSTAINABLY
We are here for the long term. We look
after each other, our communities and the
environment. We keep each other safe.

WORKING TOGETHER
We are on the same team.
We build long-term partnerships.

DISCIPLINE
We play by the rules. We set goals and we
hold ourselves to account.

EXCELLENCE
We achieve great results. We learn.
We get better.

OUR MISSION
To deliver superior shareholder returns.

OUR VISION
Our aim is to be a global leader in upstream
oil and gas.

OUR STRATEGIC DIRECTION
Maintain our leading Australian position
by optimising our producing assets and
commercialising our growth projects and
other premium opportunities.

Grow our portfolio by leveraging our core
capabilities for global upstream growth.

PARTNER OF CHOICE
We are the premium choice for partnerships
based on our distinctive capabilities, culture
and track record as a great partner.

ENGAGED PEOPLE
We work for a highly regarded and
successful company. We are part of a team
working together for great results and have
opportunities to contribute and grow.

FUNCTIONAL EXCELLENCE
We leverage our core capabilities and the
latest technology to create new opportunities
and sharpen our competitive edge.

DECISION EFFECTIVENESS
We make and execute decisions in line with
our business priorities and our values.

OUR SUSTAINABLE DEVELOPMENT
REPORT 2015

This report is a summary of
Woodside’s sustainability
approach, actions and
performance for the
12-month period ended
31 December 2015.

This report will be available in
March 2016.

SUSTAINABLE DEVELOPMENT REPORT 2015

Further information at woodside.com.au

WOODSIDE PETROLEUM LTD ANNUAL REPORT 2015

ADDITIONAL INFORMATION

In this report, we have indicated where
additional information is available online
and in other sections of this report like this

A glossary of key terms, units of measure and
conversion factors is on page 110.

We have partnered with Green ReportsTM
in an initiative that ensures that
communications minimise environmental
impact and creates a more sustainable
future for the community.

About Woodside
We are an Australian-based oil and gas
company with a global presence, recognised
for our world-class capabilities – as an
explorer, a developer, a producer and a
supplier.

Our mission is to deliver superior shareholder
returns through realising our vision of becoming
a global leader in upstream oil and gas.

Wherever we work, we are committed to
living our values of integrity, respect, working
sustainably, discipline, excellence and working
together.

Our operations are characterised by strong
safety and environmental performance in
remote and challenging locations.

We recognise that long-term meaningful
relationships with communities are
fundamental to maintaining our licence to
operate, and we work to build mutually
beneficial relationships in all locations where
we are active.

Our producing liquefied natural gas (LNG)
assets in the north-west of Australia are
among the world’s best facilities.

Today, our exploration portfolio includes
emerging and frontier provinces in Australia
and the Asia-Pacific region, the Atlantic
margins and Latin America and Sub-Saharan
Africa. We have significant equity interests in
high-quality development opportunities.

We are Australia’s most experienced LNG
operator and largest independent oil and gas
company.

Our proven track record and distinctive
capabilities are underpinned by more than
60 years of experience, making us a partner
of choice.

Through collaboration, we leverage our
capabilities to progress our growth strategy.
Since 1984, we have been operating the
landmark Australian project, the North West
Shelf, and it remains one of the world’s
premier LNG facilities. In 2012, we added
our Pluto LNG Plant to our onshore operating
facilities.

About this report
This Annual Report 2015 is a summary of
Woodside’s operations and activities for the
12-month period ended 31 December 2015
and financial position as at 31 December
2015. Woodside Petroleum Ltd
(ABN 55 004 898 962) is the parent company
of the Woodside group of companies. In this
report, unless otherwise stated, references
to Woodside and the Group, the company,
we, us and our refer to Woodside Petroleum
Ltd and its controlled entities, as a whole.
The text does not distinguish between the
activities of the parent company and those of
its controlled entities.

References in this report to a year are to
the calendar and financial year ended
31 December 2015 unless otherwise stated.

We operate five floating oil production,
storage and offloading vessels, the largest
owner-operated fleet in Australia, and we
have an excellent track record of efficient and
safe production.

We are growing our portfolio through
acquisitions and exploration while maintaining
a disciplined approach to ensure that we
continue to increase shareholder value and
appropriately manage risk.

We are transforming to become a global
business. We have a portfolio of significant
interests in Canada and Timor-Leste and a
growing network of partnerships.

Known as a reliable and safe energy supplier,
we have enduring relationships with
foundation customers throughout the Asia-
Pacific region which span more than 25 years.

We believe technology and innovation are
essential to unlocking future growth and
commercialising assets. We continually
expand our technical knowledge, discover
new solutions and learn valuable lessons.

Innovation has always been in our DNA. Our
knowledge has been built through decades of
experience, dating back to the world-record
water depths of wells we drilled in offshore
southern Australia in the 1950s. Today, we are
pioneering remote support and the application
of artificial intelligence and advanced analytics
in our operations.

We are open and honest in our relationships.
Sharing ideas and aspirations, we have
the courage to always do the right thing
for our people, partners, customers and
communities.

All dollar figures are expressed in US currency,
Woodside share, unless otherwise stated.
Woodside is continuing efforts to reduce
its environmental footprint associated with
the production of the Annual Report. Printed
copies of the Annual Report will only be
posted to shareholders who have elected to
receive a printed copy.

The Annual Report is also printed
on an environmentally responsible
paper manufactured under ISO 14001
environmental management standards,
using elemental chlorine-free pulps from
sustainable, well managed forests.

CONTENTS
Overview
About Woodside ...................................................................................1
About this report ...................................................................................1
Our areas of activity ...........................................................................2
Performance summary .................................................................4
Chairman’s report ............................................................................... 6
Chief Executive Officer’s report ..........................................8
Woodside executives .....................................................................10

Operating and Financial Review
Creating sustainable value:
our business model .........................................................................14
Financial position ...........................................................................16
Strategy and outlook .................................................................18
...............................................................................................................20
Risks

Operations

North West Shelf ...............................................................22
Pluto LNG ..................................................................................24
Australia Oil ............................................................................. 26
International – Canada ................................................... 27
LNG marketing ..................................................................... 28
Our people ............................................................................... 30
Health, safety, security and

emergency management .................................. 32
Environment ........................................................................... 34
Communities ......................................................................... 35
Technology and innovation ........................................ 36
Reserves and resource statement ..................... 38
Growth ...........................................................................................................41
Global exploration ......................................................... 42
Development

Wheatstone ..................................................................44
Greater Enfield............................................................. 45
Greater Western Flank Phase 2 ................... 45
Browse FLNG ..............................................................46
Kitimat LNG.....................................................................47
Sunrise LNG ...................................................................47
Business development opportunities ........47

Governance
48
Board of Directors .............................................................................48
Corporate governance statement .................................50
Directors’ report ...................................................................................51
Remuneration report ....................................................................52

Financial Report 2015

Shareholder information
Shareholder statistics .................................................................107
Share registry: enquiries.........................................................108
Investor relations: enquiries................................................108
Business directory ..........................................................................109
Key announcements 2015 .....................................................109
Events calendar 2016 ...................................................................109
Glossary, units of measure and
conversion factors ..........................................................................110
Index ...............................................................................................................111
Summary charts 2015 ................................................................112
Ten-year comparative data summary ....................113

Report objectives
This report meets our compliance
and governance requirements, and
is designed to provide easy-to-read
information on how Woodside
performed in 2015 for our stakeholders,
including shareholders, staff,
customers and the community.

We aim to build awareness of our
operations and demonstrate how we
delivered on our mission and vision while
maintaining our values and commitment
to sustainable development.

WOODSIDE PETROLEUM LTD OVERVIEWOUR AREAS OF ACTIVITY

Our Australian business

Perth (HQ)

13
2 3

16
17

7
11

Broome

* In September 2015, Woodside entered into a conditional

agreement to sell our interests in the Laminaria-Corallina Joint
Venture, including the Northern Endeavour FPSO. For further
information refer to page 27.

Karratha

WESTERN
AUSTRALIA

Producing assets 1Karratha Gas PlantNWS2Goodwyn A platformNWS3North Rankin ComplexNWS4Okha FPSONWS oil5Angel platformNWS6Pluto LNG PlantPluto LNG7Pluto LNG platformPluto LNG8Ngujima-Yin FPSOVincent oil9Northern Endeavour FPSO*Laminaria-Corallina oil10Nganhurra FPSOEnfield oil11Armada Claire FPSOBalnaves oilProjects12Greater Western Flank Phase 1 NWS13Greater Western Flank Phase 2NWS14PersephoneNWS15Wheatstone LNG Plant (non-operated)Wheatstone16Wheatstone LNG Platform (non-operated)Wheatstone17Julimar Julimar, BrunelloDevelopments18Greater Enfield OilEnfield oil19Browse FLNGBrowseWoodside offices and representative officesOVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD ANNUAL REPORT 2015Our global business

Ireland

Morocco
Spain
(Canary
Islands)

Cameroon
Gabon

Grassy Point LNG

Kitimat LNG

Canada

Republic of Korea

Myanmar

USA

Corpus Christi

Port Arthur

Nova Scotia

Sunrise LNG

Australia

Perth

New Zealand

Peru

Broome

Woodside headquartersExploration acreageDevelopments and projectsBusiness opportunitiesProducing assetsOVERVIEWWOODSIDE PETROLEUM LTD OVERVIEWPERFORMANCE SUMMARY

In 2015, we attained a 10% improvement in personal safety performance,
and achieved a Proved plus Probable (2P) annual total reserves replacement
ratio of 276%. We delivered annual production of 92.2 MMboe, our second
highest annual result, whilst reducing our break-even cash cost of sales to
US$11 per boe, representing a 22% reduction from 2014.

Personal safety

Reserves replacement

Production

Sales revenue

10%

Improvement

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Our total recordable injury rate
(TRIR) was a 10% improvement
on 2014. It has significantly
improved over the past four years,
demonstrating solid progress
towards our goal of global
top-quartile health and safety
performance by 2017.

In 2015, we achieved a Proved plus
Probable (2P) annual total reserves
replacement ratio of 276%, largely
through acquisitions.

In 2015, we delivered annual
production of 92.2 MMboe, our
second highest annual result.
This was 3% lower than 2014 due
to the planned Pluto turnaround
and natural field decline.

We experienced a 36% decrease
in sales revenue. This reflected
lower realised prices across the
portfolio. During 2015, the average
price of Brent oil was US$53.60,
46% lower than the average Brent
price in 2014.

Operating cash flow

Reported NPAT

Break-even cash cost
of sales

Dividends per share

50%

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Operating cash flow decreased by
50%, largely attributable to lower
commodity prices.

99%

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14 15
^ Normalised to remove Browse

partial equity sale

12 13

14 15

Delivered reported NPAT of
US$26 million, a decrease of 99%
compared to 2014. This was due to
lower oil prices impacting revenue
and impairments driven by lower
near-term and long-term forward
price assumptions.

Our break-even cash cost of
sales per boe has reduced from
US$14.27 in 2014 to US$11.09
in 2015, representing a 22%
reduction. This cost reduction is
inclusive of royalties and excise,
and the impact of a weaker
Australian dollar.

11
13
^ Special dividend

NPAT adjusted for special items
of US$1.126 billion was used for
calculating the full-year dividend of
US109 cents per share.

Additional summary charts can be found on page 112.

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD ANNUAL REPORT 2015

PERFORMANCE SUMMARY

Results for the year

2014

2015

% change

Reported net profit after tax

(US$ million)

NPAT adjusted for one-off non-cash items1

(US$ million)

Sales revenue

Cash flow from operating activities

Reported earnings per share

Total recordable injury rate

Ten-year total shareholder return2 (TSR)

Ten-year TSR2 quartile ranking3

Production

Proved (1P) reserves

Proved plus Probable (2P) reserves

Contingent resources

(US$ million)

(US cents)

(TRIR)

(TSR, %)

(Quartile)

(MMboe)

2,414

2,617

7,076

4,785

293

1.90

10.6

2nd

95.1

1,048

1,339

1,743

1,126

4,496

2,376

1.71

2.5

2nd

92.2

1,150

1,508

4,398

(99)

(57)

(36)

(50)

(99)

(76)

n.m4

(3)

152

1. Woodside’s financial reporting complies with Australian Accounting Standards and International Financial

Reporting Standards (IFRS). The NPAT adjusted for special items (non-IFRS) is unaudited but is derived from
auditor reviewed accounts by removing the impact of non-recurring items (impairments, deferred tax asset
derecognition and onerous lease costs) from the reported (IFRS) auditor-reviewed profit. Woodside believes
the non-IFRS profit reflects a more meaningful measure of the company’s underlying performance.

2. Source: Bloomberg, TSR is the compounded annual return over the specified period.
3. Against Woodside peer group see page 63.
4. Not meaningful.

KEY ACHIEVEMENTS 2015

Achieved a total recordable injury rate of 1.71,
sustained progress towards global top-quartile
performance.

Achieved 92.2 MMboe of annual production,
our second highest result.

Acquired Wheatstone, Balnaves and Kitimat interests,
which increased 2P Developed and Undeveloped
Reserves (19.1%, 264.8 MMboe) and 2C Contingent
resources (151%, 2,632 MMboe).

Completed capacity enhancement activities at Pluto
LNG and North West Shelf (NWS) Project, increasing
expected annual production capacity.

Discovered additional 2C Contingent resources
of 68 MMboe (net) for Pluto with the Pyxis-1
exploration well.

Commenced production from the Greater Western
Flank Phase 1 Project.

Approved the US$2.0 billion (100% project)
Greater Western Flank Phase 2 Project.

Entered front-end engineering and design (FEED)
for Browse FLNG Project.

Completed the Xena Phase 1 Project ahead of
schedule and commenced production.

Discovered gas in Block A-6 in the Rakhine Basin,
located offshore Myanmar, substantially de-risking
the petroleum system and identified leads in the
block and our adjacent acreage.

Entered FEED for the Greater Enfield Development.

Raised $4.1 billion in bond and bank markets,
bringing our pre-tax portfolio cost of debt at year end
to a competitive 2.9%.

Completed the planned Pluto turnaround ten days
(30%) ahead of original plan.

Completed onshore and offshore NWS maintenance
turnaround activities, with system availability
returned to planned levels seven days ahead of
schedule.

Achieved record continuous LNG production runtime
of 125 days at the NWS Project's Karratha Gas Plant.

Completed in excess of 6,800 km2 of 3D seismic data
acquisition over Myanmar acreage.

Delivered annual productivity program benefits of
>US$700 million.

WOODSIDE PETROLEUM LTD OVERVIEW

CHAIRMAN’S REPORT

Against a backdrop of oil price
uncertainty, Woodside continues to
maintain a strong balance sheet and
operating cash flow.

Michael Chaney AO
Chairman

Global oil markets underwent a dramatic
change in 2015. Oil prices reached an
11-year low in December, and market
uncertainty presented challenges to oil and
gas companies around the globe.

A strong balance sheet

In this constrained business environment,
your company managed to deliver solid
results for 2015 – Net profit after tax
(NPAT) prior to the deduction of one-off
non-cash items of US$1,126 million, a
statutory NPAT of US$26 million and cash
flow from operations of US$2,376 million.
At the same time, we raised US$4.1 billion
in new and refinanced debt facilities.

These results build on a strong track record
of achievement. Since 2011, we have
increased Contingent resources by 106%,
reduced break-even cash costs of sales by
33% and increased production by 43%.

Today, compared to five years ago,
we are a leaner organisation with more
assets, development opportunities
and almost double the acreage in our
exploration portfolio.

Importantly, our strong balance sheet
has enabled us to pay over $7 billion in
dividends to our shareholders over the
past five years.

This year, we have elected to maintain
our 80% dividend payout ratio and we
have declared a fully franked dividend
of 109 US cents per share based on the
adjusted profit described above.

Consistent with our commitment to
a strong balance sheet and retaining
flexibility during this time of oil price
weakness, the 2015 final dividend will be
fully underwritten via the reactivation of
the Dividend Reinvestment Plan (DRP).
Activating the DRP at this time is prudent
financial management, as it enables us to
balance returns to our shareholders, with
the preservation of cash and maintenance
of balance sheet flexibility.

This financial discipline, combined with a
robust business model, enabled us to once
again make good progress on our growth
strategy during 2015.

Growth opportunities

Our largest development opportunity, the
proposed Browse Floating LNG (FLNG)
development off the coast of Western
Australia, entered front-end engineering
and design during the middle of the year.

The project team is working hard to reduce
Browse costs, targeting an economically
robust project in the forward price
environment.

We finalised acquisition of the Kitimat,
Balnaves and Wheatstone interests
in April. In Australia, Wheatstone and
Balnaves provide immediate and near-term
production and increase our Proved and
Probable reserves by 265 MMboe.

In Canada, Kitimat provides long-term
growth options and a world-class
Contingent resource (2C) of 2,632 MMboe
net Woodside share.

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD ANNUAL REPORT 2015Throughout the year, Woodside continued
to engage with the governments of
Australia and Timor-Leste on the Sunrise
development opportunity. We remain
committed to the development, but we
do need government alignment to ensure
certainty for future investment.

Early in 2016, we announced the important
discovery of gas in the Shwe Yee Htun-1
well drilled by Woodside in the Rakhine
Basin offshore Myanmar. This discovery
opens up an exciting new exploration
province in which your company holds
significant interests.

In this environment, we also
remain disciplined as we look for
potential acquisitions around the globe.
In September, we submitted a proposal
to the board of Oil Search Limited to merge
our two companies and create a regional
oil and gas champion. The proposal
would, in our view, have been to the
significant benefit to the shareholders
of both companies.

We were disappointed that the
Oil Search Board declined to engage in
any discussions of the proposal, which
we withdrew in December.

Oil price

A changing LNG market

We continue to pursue our key growth
opportunities, but we are also prepared for
ongoing oil price uncertainty.

The rise of North American
“unconventional oil”, the Organization of
Petroleum Exporting Countries’ decision
to defend market share and increase
production and weaker global growth have
all contributed to an oil market that is likely
to remain oversupplied through most of
2016.

Lower oil prices contributed to demand
growth of 1.7 million barrels per day in
2015, but demand growth alone has
not been strong enough to rebalance oil
markets.

While the major energy research
consultancies are predicting an oil price
recovery by 2020, Woodside is taking a
conservative view. Our focus remains on
providing superior shareholder returns
through the commodities cycle.

The company is using the lower price
environment to drive down costs,
enabling cost competitive development
opportunities.

Following the dramatic fall in oil prices
during 2015, we took a decision after the
close of the year to lower our short and
long-term oil price assumptions. This
resulted in a diminution in the assessed
value of the Wheatstone and Balnaves
assets, as reported in our annual accounts.

Alongside market uncertainty, we are
in the midst of a rapidly changing LNG
market. This poses opportunities and
challenges for Woodside. For a start, there
is increasing supply competition in this
market, providing customers with more
choices in terms of geography, pricing
and product. In future, we can expect to
see the first-ever LNG developments in
Canada, competing with US, Australia,
Africa and the Middle East.

Secondly, we are seeing a change in
the number and location of buyers.
Seven countries made up 90 per cent of
demand in 2005, but about 25 countries
will make up 90 per cent of demand by
2020. Globally, concerns about climate
change and air quality are also shaping
demand for LNG. During the past year,
we have seen numerous governments
around the world adopt more stringent
clean energy policies. As such, we
believe natural gas will continue to have a
significant role to play in the future energy
mix – it is the cleanest burning fossil fuel,
it is easily transportable and reliable, and
it complements renewables to provide
largescale uninterrupted power.

With these factors in mind,
Woodside continues its relentless focus
on productivity and reliability initiatives.

CHAIRMAN’S REPORT

We are also enhancing our marketing and
trading capabilities to reflect the increasing
flexibility in the LNG market.

Woodside’s track record of 25 years’
experience as a safe and reliable LNG
supplier to Asia’s growing economies
means we are well positioned to supply
the region and beyond with LNG into
the future.

Board changes

After 11 years of service on Woodside’s
Board of Directors, Dr Andrew Jamieson
will retire at our Annual General Meeting
in April. Dr Jamieson, with his wealth
of international engineering, oil and gas
experience, has made a substantial
contribution to the Board, and we are
indebted to him for his efforts. Following
Dr Jamieson’s retirement, Ms Melinda
Cilento will be appointed chair of the
Human Resources & Compensation
Committee.

Woodside’s strong performance in
2015 is a testament to our people, led by
Chief Executive Officer Peter Coleman.
On behalf of the Board of Directors,
I thank all our staff for their hard work
and dedication to the company.

We look forward to continuing our
progress in 2016.

Michael Chaney AO
Chairman

17 February 2016

WOODSIDE PETROLEUM LTD OVERVIEWCHIEF EXECUTIVE OFFICER’S REPORT

It is clear that our strategy, our assets
and our people have performed well
amid the pressures of the lower oil
price environment.

Peter Coleman
Chief Executive Officer and
Managing Director

2015 Key performance highlights

Future objectives

Achieved a total recordable injury rate
(TRIR) of 1.71, a 10% improvement
from 2014.

Achieved 92.2 MMboe of annual

production, our second highest result
on record.

Acquired Wheatstone, Balnaves and
Kitimat interests, which increased 2P
Developed and Undeveloped Reserves
(19.1%, 264.8 MMboe) and 2C Contingent
resources (151%, 2,632 MMboe).

Completed the Xena Phase 1 project ahead
of schedule and commenced production in
June 2015. The Phase 1 project accesses
net reserves (2P) of 197 Bcf dry gas and
2.3 MMbbl of condensate.

Entered front-end engineering and design

(FEED) for Browse.

Discovered additional 2C Contingent

resources of 68 MMboe (net) with the
Pyxis-1 exploration well.

Commenced production from the

Greater Western Flank Phase 1 Project
in December 2015.

Approved the US$2.0 billion (100% project)
Greater Western Flank Phase 2 Project off
the north-west coast of Australia.

Discovered gas in Block A-6 in the

Rakhine Basin, located offshore Myanmar.

Entered FEED for the Greater Enfield

Development.

Raised US$4.1 billion in bond and bank
markets, reducing our pre-tax portfolio
cost of debt.

Delivered annual productivity program

benefits of >US$700 million.

Achieve global top-quartile health and

safety performance by 2017.

Maintain a strong balance sheet, low cost

of operations and capital discipline enabling
the delivery of superior shareholder
returns.

Operate according to a business plan that

reflects low prices.

Work with the Browse Joint Venture

participants targeting a globally
competitive, economically robust
project.

Progress our projects:

à Greater Western Flank Phase 1 Project,

which achieved first gas in 2015.

à Persephone Project, scheduled for first

gas in the first half of 2018.

à Wheatstone Project, with first gas

expected in mid-20171.

à Greater Western Flank Phase 2 Project,
scheduled for first gas in the second half
of 2019.

Deliver value adding growth organically and

inorganically.

Enhance our competitive advantage
through leveraging technology to
deliver sustainable growth through cost
reductions and commercialisation of
stranded resources.

Expand our marketing capabilities through

access to new markets and low cost
shipping.

1. Source: Chevron.

As we look back over our performance in
2015, it is clear that our strategy, our assets
and our people performed well amid the
pressures of the significantly lower oil price
environment. The resilience of our business
model was apparent as we made measured
progress across the value chain, not only
meeting key objectives for the year, but
also improving the efficiency with which
we did so.

Reported Profit for the year was
US$26 million, driven by the sharp fall in
commodity prices and asset impairments.
Impairments are mostly driven by the
collapse in near-term crude oil prices and an
approximate 20% reduction in our long-
term pricing assumptions for the purpose
of determining asset values. Despite the
economic climate, our business is resilient.
Solid cash flows were generated through
our strong operating performance and our
low cost of production. Furthermore, we
maintained strong levels of liquidity, with
negligible debt maturities in 2016 and 2017,
and have low levels of committed capital
expenditure. We continue to execute our
strategy at a pace appropriate for the current
uncertain environment.

Operational excellence is central to how
we deliver value for our shareholders.
Production of 92.2 MMboe is our second
highest production result on record –
achieved through our relentless drive to
improve the reliability of our assets. In
December, production commenced from
the Greater Western Flank Phase 1 (GWF-1)
Project to maintain current levels of output
from the North West Shelf’s (NWS) Karratha
Gas Plant. We also made a final investment
decision on the Greater Western Flank
Phase 2 (GWF-2) Project. This is the fourth
major gas development for the NWS Project
in the past seven years, demonstrating a
commitment to maximising value from this

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD ANNUAL REPORT 2015asset. We are also pursuing third-party gas
arrangements for the NWS.

we delivered at the upper end of our 2015
production range.

Significant other achievements included
additional production from our Vincent
field, record continuous runtime of
125 days at our Karratha Gas Plant,
and enhancements at Pluto that have
production exceeding the expected annual
capacity of 4.3 mtpa.

Our productivity program has delivered
>US$700 million in benefits in 2015 and
>US$1.2 billion in cumulative benefits
since it began two years ago. Initiatives
aimed at not only reducing cost but driving
improvements and achieving efficiencies
have enabled us to meet our commitments
with reduced operating expenditure. This
contributed to our break-even cash cost of
sales dropping for the second consecutive
year to around US$11 per boe. All of this
was done while reducing the size of our
workforce by almost 10%.

Disciplined capital management is
a constant in our business and was
especially important in 2015. In an
environment of low commodity prices, we
maintained strong levels of liquidity with
US$1.7 billion in cash and undrawn facilities
at 31 December 2015. Our average term to
maturity is 4.7 years, and we have negligible
debt maturities in 2016 and 2017. Our debt
maturing in 2018 to 2020 comprises more
than 50% bilateral evergreen facilities
which contain annual options to extend
the maturity date. The performance of
our assets allowed us to generate strong
operating cash flow of US$2.376 billion.
Our gearing of 23% is within our 10% to
30% target range across the cycle.

We took advantage of market conditions
to raise US$4.1 billion in bond and bank
markets, bringing our pre-tax portfolio cost
of debt to a competitive 2.9% at year end.
Our credit rating is unchanged at BBB+ for
Standard & Poor’s and Baa1 for Moody’s,
albeit the Moody’s rating is currently under
review, reflecting the broader energy
sector conditions.

The resilience demonstrated by our
people is something of which I am very
proud. In March, we were forced to
temporarily shut-in production at Pluto
after a submersible rig on contract to
another party drifted near the Pluto flow
lines. The response across the business to
understand and assess risks and damage
was a phenomenal effort, allowing us
to quickly and safely restart production.
An electrical incident at the Karratha Gas
Plant in May tested the ingenuity of our
engineers, who pulled out all the stops
and came up with innovative solutions
that allowed us to restart production in a
timely manner. Despite these challenges,

Our progress towards achieving
top-quartile health and safety
performance remains on track, with a
reduction in our total recordable injury rate,
down from 1.9 in 2014 to 1.71. We met our
target for process safety, recording fewer
than three Tier 2 incidents, maintaining
the high standard set the previous year.
We were injury free in each of our two
major maintenance turnarounds of 2015,
both of which were also completed
ahead of schedule. We were pleased
with our environmental performance,
with a reduction in flared gas intensity.
This is a key focus in our response to
global efforts to reduce greenhouse gas
emissions and reflects our commitment
to developing resources responsibly.

We made steady progress on efforts
to grow our portfolio, focusing on
opportunities that fit well with our
capabilities and strategic aims, while
maintaining a disciplined approach
to investment decision making.
Our development pipeline includes
Wheatstone, Julimar, GWF-2, Greater
Enfield and Browse. At Kitimat, we drilled
four appraisal wells in Canada’s Liard
Basin – important steps as we work to fully
understand the potential of a world-class
resource.

During 2015, we undertook a range of
exploration activities, with successful
results. The Pyxis-1 gas discovery off the
coast of Western Australia increased net
contingent resources by 68 MMboe with
tieback potential to existing Pluto LNG
infrastructure. Then, at year end,
we announced the Shwe Yee Htun-1
gas discovery in offshore Myanmar.
This discovery of gas and reservoir-quality
rock in the deepwater Rakhine Basin
substantially de-risks identified leads in the
block and our adjacent acreage. Woodside
signed production-sharing contracts for
four other blocks offshore Myanmar which
were awarded in the 2013 bid round.

Our biennial staff survey revealed a marked
rise in engagement and enablement
levels, with engagement surpassing the
oil and gas industry benchmark.
Responses showed that our focus on
building a values-led, high-performance
culture gained good traction, and there
was strong belief that Woodside was
headed in a clear and promising direction.

This was amplified by our actions. Our
people worked hard to deliver improved
outcomes and innovative solutions that
aligned with our ambitions. Efficiency gains
were achieved not only through structured
change to enhance organisational agility,

CHIEF EXECUTIVE OFFICER’S REPORT

but through an ability to get things
done and done well, regardless of the
challenges.

In keeping with efforts to drive sustainable
success, we embraced science and
technology as a way of leveraging our
distinctive capabilities. This included
the introduction of data analytics and a
cognitive computing system, allowing us
easier access to 30 years of Woodside
knowledge and experience and enabling
data-driven decision making. Our
FutureLab program inspires connected
thinking and collaborative innovation with
industry experts and researchers.

We also continued to attract graduates at
levels comparable to that of the previous
year, reasserting our commitment to
developing talent from within, and we
worked to improve the diversity of our
workforce. Pleasingly, 49% of our graduate
intake were women, and the proportion of
women in our total workforce increased to
28% in 2015.

Outlook

Woodside’s progress is steady and sure,
a reflection of our robust and resilient
business model. We maintain firm focus
on our long-term vision to become a
global leader, drawing on a strategy that is
serving us well.

We continue to seek growth opportunities,
both organic and inorganic, making
disciplined decisions about what we
choose to pursue and when we do
so. Keen to enhance our competitive
advantage, we are embracing technologies
that leverage our experience and inspire
innovation, while our well-established
productivity program drives further
efficiencies and a commitment to
continuous improvement.

Woodside and its people are mindful
of the challenges of the lower oil price
environment but unwavering in their
commitment to delivering high-value
outcomes in support of sustainable
success.

Peter Coleman
Chief Executive Officer and
Managing Director

17 February 2016

WOODSIDE PETROLEUM LTD OVERVIEWWOODSIDE EXECUTIVES

Lawrie Tremaine
BBus, FCPA

Executive Vice President
Finance and Commercial and
Chief Financial Officer

Lawrie was appointed as Chief
Financial Officer in 2010.

He joined Woodside in 2006
and has over 30 years of
finance leadership experience,
predominantly in the resource
and minerals processing industry.

Lawrie is responsible for a range
of functions including finance,
investor relations, commercial,
contracting and procurement,
strategic planning and
performance excellence.

Prior to joining Woodside, Lawrie
worked for Alcoa for 17 years.
He is a National Executive
Member of the Group of 100.

Michael Utsler
BSc (Petroleum Engineering)

Chief Operations Officer

Michael was appointed
as Chief Operations Officer
in 2013, following an extensive
career in upstream oil and gas
spanning more than 35 years.

He is responsible for Woodside’s
producing facilities, global
logistics, global drilling and
completions; and stewardship
of programs in health, safety,
environment, quality, security and
crisis management.

Prior to joining Woodside,
Michael held the position of
President for the BP-Gulf Coast
restoration organisation, leading
the Deepwater Horizon response
effort.

Phil Loader
BSc (Geology), MBA, MSc, DIC

Executive Vice President
Global Exploration

Phil was appointed as Executive
Vice President Global Exploration
in 2013, following an extensive
career in the upstream sector
spanning over 30 years.

Phil is responsible for the
company’s global exploration
activities.

Prior to joining Woodside,
Phil’s roles included Senior
Vice President Exploration at
Mubadala Petroleum in the
United Arab Emirates and
Vice President Exploration at
Anadarko Petroleum, and he was
also a non-executive chairman of
Chariot Oil and Gas.

Peter Coleman
BEng, MBA, FATSE

Chief Executive Officer and
Managing Director

Peter was appointed as Chief
Executive Officer and Managing
Director in May 2011, and has
over 30 years’ experience in the
global oil and gas industry.

Peter is the Chairman of the
Australian-Korea Foundation, a
Fellow of the Australian Academy
of Technological Sciences and
Engineering and, in 2012, was
awarded the honorary title of
Adjunct Professor in Corporate
Strategy by the University of
Western Australia. In 2013,
he received the Distinguished
Alumni Lifetime Achievement
Award from Monash University.

In 2015, Peter was appointed
Chair of the Advisory Group on
Australia-Africa Relations.

Peter began his career at Esso
Australia (later becoming part
of the ExxonMobil group) and
stayed with ExxonMobil
until joining Woodside.

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD ANNUAL REPORT 2015WOODSIDE EXECUTIVES

Dr Robert Edwardes
BSc (Eng), PhD

Executive Vice President
Development

Robert was appointed as
Executive Vice President
Development in 2012. He has
over 35 years of resources
industry experience, spanning
the full breadth of operations and
projects.

In his current role, he is
accountable for front-end
planning and execution of
onshore and offshore capital
projects, reservoir management,
engineering and subsea.

Prior to joining Woodside,
Robert’s roles included Managing
Director of Worley Parsons
(US and Latin America) and
Project Director of the Kizomba
deepwater oil development in
Angola with ExxonMobil.

Dr Greg Roder
BSc (Hons), PhD, MBL

Reinhardt Matisons
BEng, MBA, MIE Aust, CPEng, CPA

Executive Vice President
Business Development and
Growth

Executive Vice President
Marketing, Trading and
Shipping

Greg was appointed as Executive
Vice President Business
Development and Growth in
2011. He has over 35 years’
experience in energy resources,
infrastructure investment,
funds management, capital
markets and operational asset
management.

Greg leads Woodside’s strategic
business growth, particularly
through corporate and asset
transactions.

Prior to joining Woodside, Greg
held leadership positions at
ExxonMobil, Macquarie Bank,
Standard Bank of South Africa
and AMP Capital Investors.

Reinhardt was appointed
as Executive Vice President
Marketing, Trading and Shipping
in 2014. He has over 30 years’
experience in the energy
industry.

In his current position, he is
accountable for the marketing,
trading and shipping function.
Reinhardt joined Woodside
in 1996 and has held various
marketing and commercial roles.

Prior to this, he held senior
leadership roles with Poten &
Partners, Alinta Gas, Western
Power and the State Energy
Commission of Western
Australia.

Michael Abbott
BJuris, LLB, BA, MBA

David McLoughlin
BA (Psychology), FAHR

Senior Vice President Corporate
and Legal and General Counsel

Senior Vice President
People and Global Capability

Michael was appointed as Senior
Vice President Corporate and
Legal in 2014. He has over 25
years of legal experience, with
more than ten years of senior
leadership experience in the oil
and gas industry.

Michael is accountable for
legal, company secretariat, risk,
compliance and corporate and
government affairs.

Michael joined Woodside in
2005 and has held a variety of
roles including Mergers and
Acquisitions lawyer, head of the
Procurement Legal Team and
Vice President Legal and General
Counsel.

David was appointed Senior Vice
President People and Global
Capability in January 2016.
He joined Woodside in 2014 and
has over 20 years’ experience
in mining, minerals and
engineering in Australia, South-
East Asia and the Americas.

David is accountable for building
executive leadership, maximising
employee performance and
managing change within the
organisation.

Prior to Woodside, David held
various senior roles with MMG,
GlencoreXstrata, Xstrata Copper,
Thiess and Rio Tinto.

Shaun Gregory
BSc (Hons), MBT

Senior Vice President and
Chief Technology Officer

Shaun was appointed as
Senior Vice President and
Chief Technology Officer in
January 2016, and has worked
in the oil and gas industry for
over 25 years.

Shaun leads the company’s
efforts in advancing science and
technology and understanding
the business climate and energy
outlook to support decision
making. He joined Woodside
in 1996 and has held a variety
of roles in areas including
geophysics, mergers and
acquisitions, corporate strategy,
exploration, and new ventures.

WOODSIDE PETROLEUM LTD OVERVIEWOPERATING AND
FINANCIAL REVIEW

OPERATING AND FINANCIAL REVIEW HIGHLIGHTS

Financial position

Liquidity

Productivity

~$11

per boe

Break-even cash cost
of sales

$1.7

billion

In cash and undrawn
facilities as at 31 December

>$700

million

In benefits achieved in 2015

Our break-even cash cost of sales is
~US$11 per boe, representing a 33% reduction
over two years. We achieved a 7% decrease in
gas unit production costs and a 17% reduction
in oil unit production costs. This reflects our
increased focus on cost efficiencies and reliability.

At year end, our portfolio cost of debt remains
at a very competitive 2.9% and we maintain a
strong liquidity position with available funds of
US$1,722 million. Our average term to maturity
is 4.7 years, and we have negligible maturities
in 2016 and 2017. Our gearing is 23%, within
our target range of 10% to 30%.

More than half of the benefits came from
increased production volumes through
improvements in reliability and capacity. The
balance was achieved through reduction to our
operating expenditure and reduction to our capital
expenditure. This includes savings relating to a
reduction of over 650 full-time equivalents.

Read more on page 42.

OVERVIEWWOODSIDE PETROLEUM LTD OPERATING AND FINANCIAL REVIEWCREATING SUSTAINABLE VALUE: OUR BUSINESS MODEL

Our primary focus is on the delivery of value for our shareholders.
We offer long-term investment opportunities and superior returns to our
shareholders through world-class asset and capital management, value-adding
growth and dividends.

MISSION

To deliver superior
shareholder
returns.

VISION
To be a global leader
in upstream oil and gas.

VALUES
Excellence. Respect.
Working sustainably. Integrity.
Working together. Discipline.

OUR STRATEGY

Maximise Core

Leverage Capabilities

Grow Portfolio

OUR BUSINESS MODEL

Acquire

Explore

Develop

Operate

Market

Decommission

Divest

CAPITAL MANAGEMENT

Capital Allocation

Capital Discipline

Capital Efﬁciency

How we create value
Woodside is an Australian-based international
oil and gas company guided by our mission,
vision, values and strategy. We seek to
create value for our shareholders across the
exploration and production life cycle through
a disciplined approach to capital management
and a focus on working sustainably.

Our strategy

Maximise our core

We create near-term value by maximising
operational effectiveness of producing assets
and developing contingent resources in the
most cost-effective way.

Leverage our capabilities

Grow our portfolio

Woodside is building distinctive capabilities
across the oil and gas value chain and has a
proven track record in the design, construction
and operation of world-class LNG plants,
FPSO operations, subsea technology,
seismic data acquisition and processing,
and deepwater drilling.

By leveraging our capabilities across our
business life cycle and by applying the
latest technologies, market experience and
relationships, we are able to unlock and
extract value through opportunities that would
not otherwise present themselves.

We are growing and rebalancing our
exploration portfolio, with a focus on
increasing our exposure to emerging
petroleum provinces, while also concentrating
on aggregating positions around our existing
focus areas in Australia and the Asia-Pacific
region, the Atlantic margins and Latin America
and Sub-Saharan Africa.

We are also seeking to grow our portfolio
through corporate and asset acquisitions,
maintaining a disciplined approach to ensure
that we continue to increase shareholder
value and appropriately manage risk.

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD ANNUAL REPORT 2015CREATING SUSTAINABLE VALUE: OUR BUSINESS MODEL

Our business model
The way we find, develop and operate our
portfolio of world-class assets; the way we
market the hydrocarbons we produce; and the
legacy we leave at the end of these assets’
lives enables us to create value and deliver
sustainable shareholder returns.

Through productivity improvements, cost
reductions and prudent growth, we preserve
and enhance value from our portfolio. We
continually innovate to discover new technical
solutions and learn valuable lessons.

With a strong focus on protecting our people,
the environment and the communities in
which we operate, we are committed to
finding safer, smarter and more sustainable
ways to run our business.

Acquire and explore

We seek to grow our portfolio through
exploration and corporate and asset
acquisitions, maintaining a disciplined
approach to increasing shareholder value and
appropriately managing risk.

Our exploration division provides growth
opportunities to deliver on our strategy by
pursuing high-impact exploration activities in
new and emerging petroleum provinces in our
three focus areas around the world.

Our business development process follows
the same investment criteria as our internal
development opportunities and looks for
material positions in world-class assets which
complement our existing portfolio.

Develop

We are a world-class developer of oil and
gas resources with a 30-year history of
safely and successfully delivering world-
class LNG and oil projects. We have rigorous
investment assessment criteria and only
approve investment in opportunities that, after
prudent assessment, offer attractive returns
exceeding our cost of capital.

We are in the business of creating value-
adding development solutions, which we do
through harnessing the technical and business
skills from across the company. During the
development phase, we maximise value by
planning the most efficient configuration for
getting products to market.

We work closely with our customers, joint
venture participants, governments and
communities to realise the opportunities
across all phases of the development process.
Once the value of the resource is confirmed,
and approvals have been received, the
development moves into project delivery and
construction.

Operate

Our dedication to achieving outstanding
operating excellence and sustaining a safe,
reliable and low-cost operating environment
is underpinned by our experience in operating
some of the world’s premier oil and gas
facilities.

Our operations are characterised by strong
safety and environmental performance
in remote and challenging locations. By
adopting a continuous improvement mindset
and an efficient, cost-competitive operating
model, we are able to increase the life of
our equipment, optimise production and
maximise value.

With a focus on using leading-edge
technology and unlocking collective
intelligence through data analytics and
cognitive computing, we are able to take
advantage of opportunities that are at the
forefront of the industry and gain valuable
productivity benefits.

Market and trade

Our marketing and trading capabilities have
long been central to our role as a leading
supplier of energy to the Asia-Pacific region.
Our valuable relationships with customers in
major energy markets have been maintained
through a track record of reliable delivery and
expertise across contracting, marketing and
trading.

While the majority of our contracts are
long-term, we are pursuing near-term value
accretive arrangements through LNG spot
and mid-term sales and LNG shipping
transactions.

Our marketing and trading strategy is to
continue to build a diverse supply portfolio,
underpinned by reliable Australian LNG and
supplemented by future globally sourced
volumes to pursue additional long-term sales
arrangements.

Decommission and divest

As we look towards the end-of-field-life of our
oil and gas assets, we aim to bring forward
optimal value wherever we can, including
the divestment of late life assets. In the
event that we are required to decommission
our facilities, we integrate closure planning
throughout an asset’s life cycle, from the
earliest stages of project development,
through to the end-of-field-life.

By working together with our partners,
stakeholders and technical experts, we are
able to identify the most sustainable and
beneficial post-closure options that minimise
financial, social and environmental impact.
Our approach helps us maintain our reputation
as a partner of choice and uphold our licence
to operate.

Capital management
As we operate in a commodity market, we
are subject to the fluctuations in commodity
prices. Consequently, we need to maintain
a flexible approach to capital management.
The overall level of investment in the different
areas of our business and the expenditure
focus are adjusted to reflect the external
environment.

Capital allocation

Our priorities for the allocation of capital are:

Debt service; to ensure we continue to

have access to premium debt markets at
an acceptable cost to support our growth
activities. Our gearing target is 25% – a
range of 10% to 30% through the cycle is
built into all investment plans. We target
maintaining an investment-grade credit
rating and will reactivate our Dividend
Reinvestment Plan (DRP) if necessary to
maintain it.

Capital expenditure to sustain and grow
our business. We seek to invest in world-
class low-cost assets that are within the
first two-thirds of their life cycle and are
located in our three exploration focus
areas. We aim to limit our equity exposure
to future complex, capital-intensive
projects to between 25% and 40%.

Dividend payments; governed by our

Dividend Policy, which specifies we will
pay a minimum of 50% of underlying net
profit after tax in dividends. We currently
pay an 80% dividend payout ratio and
target maintaining this for the foreseeable
future subject to market and business
conditions.

Returning surplus cash to investors
via either special dividends or stock
buy-backs.

Capital discipline

Our focus is on value growth. We achieve
this through good investment decision
making and active portfolio management.
We adopt a traditional discounted cash flow
(DCF) approach to our investment decisions
whether they be acquisitions, developments,
divestments or other activities. Our
investment criteria are designed to add value
through our investment decisions delivering
returns on invested capital that exceed our
cost of capital. The assumptions we use are
set independently of project decisions.

We apply a suite of target metrics with the
aim of our investment decisions delivering
superior shareholder returns. We also test
the robustness of our investments against
a range of low-outcome scenarios with the
expectation of a positive net present value.
We set higher target metrics for investments
with increased complexity and risk and seek
to preserve any upside potential.

Capital efficiency

We seek to develop and own low-cost
world-class assets. Our approach is to
drive down the unit development cost of
our projects to maximise competitiveness
and value while not compromising on
our commitments to health, safety, the
environment and the communities in
which we operate. Through good oilfield
development planning, project execution
and through the use of technology, we
identify the optimum solutions enabling us
to maximise the value of our operations and
developments.

WOODSIDE PETROLEUM LTD OPERATING AND FINANCIAL REVIEWFINANCIAL POSITION

Low oil price impacted profits and resulted in impairment charges, but low
operating cash costs mean that we continue to generate significant cash,
and the balance sheet remains strong.

Key metrics

2015 reported net profit after tax (NPAT) versus 2014

US$ million unless stated otherwise

Operating revenue
EBITDA1
Impairments
EBIT
Reported NPAT

NPAT adjusted for one-off
non-cash items2

2014
7,435
5,568
434
3,672
2,414

2015
5,030
3,063
1,083
441
26

2,617

1,126

Net cash from operating activities 4,785
561
Capital expenditure
Exploration expenditure
410
Free cash flow
Net debt

2,376
5,567
436
4,168 (3,080)
4,319
(682)

Key ratios
Gearing
%
US cps
Earnings
US cps
Adjusted earnings
Return on equity
%
Effective income tax rate %

Sales volumes

Gas
Liquids

MMboe
MMbbl

(4.5)
293
318
15.3
30.1

72.4
20.8

23.3
3
137
0.2
49.8

71.7
21.0

1. EBITDA excludes impairment and amortisation of permit

acquisition costs.

2. Removes the impacts of impairments, deferred tax asset

de-recognition and onerous lease.

Key differences relative to 2014

Revenue
Decreased by US$2,580 million to
US$4,496 million driven by price and
volume reductions and other variances.

Price: The impact of lower realised prices
was an unfavourable US$2,393 million:
NWS LNG realised prices declined in line
with reduced Japan Customs-cleared
Crude (JCC) pricing.

Pluto LNG realised prices decreased due
to a 40% decline in JCC, partially offset
by a price review effective for the full-year
2015 compared to part-year 2014.

Realised prices for oil, condensate, and

LPG were lower due to a 46% decline in
average Dated Brent prices.

Average realised prices

All in US$/boe
Pipeline natural gas

2014 2015
22

%
Variance
(21)

US$m
impact
(15)

NWS LNG

Pluto LNG

Condensate

LPG

100

101

Oil
Volume weighted
average realised prices
JCC (lagged 3 months) 111

Brent average price

(38)

(27)

(48)

(50)

(49)

(636)

(776)

(395)

(33)

(538)

(36)

(2,393)

(40)

(46)

2,500

2,414

2,580

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2015 NPAT was lower than in 2014 largely due to lower prices impacting revenue and impairments
predominantly associated with lower short and long-term oil price assumptions.

1. Petroleum Resource Rent Tax.

Volume: 2015 annual sales of 92.7 MMboe
were 0.5 MMboe lower than the record result
achieved in 2014. Lower volumes reduced
revenue by $120 million.

Other variances: A decrease of US$67 million
predominantly related to foreign exchange
movements on North West Shelf pipeline gas.

Oil and gas production costs
Oil and gas production costs decreased by
US$79 million to US$630 million in 2015
predominantly driven by cost reduction
initiatives and favourable exchange rates.

Impairments

Increased by US$649 million largely as a
result of forward price assumptions that are
approximately 20% lower than in 2014. The
Laminaria-Corallina write back is due to the
value attributed to the sale of this asset.

US$ million 2014

2015

Enfield

Stybarrow

Balnaves

Laminaria-Corallina

Vincent

NWS Oil

Wheatstone

Total

179

(95)

200

865

434

1,083

PRRT
PRRT increased US$219 million due to
the derecognition of a deferred tax asset
associated with Pluto, partially offset by
lower revenue.

Royalty and excise
The decrease of US$185 million was due
to lower realised prices.

Exploration and evaluation
The US$96 million increase was primarily
due to the write-off of unsuccessful wells,
namely Anhalt and Malaguti in Australia,
Hongge in the Republic of Korea and Cheetah
in Cameroon.

Onerous lease
A US$128 million provision was recognised in
2015 reflecting the shortfall in value between
the look forward value of the Balnaves asset
and the lease obligations. The provision arises
due to the lower performance expectations of
the asset and lower oil prices.

Income tax expense
Income tax expense reduced US$969 million
due to lower pre-tax profit.

Other
The decrease is predominantly due to general
administrative and other costs reducing by
US$113 million, partially offset by other items.

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD ANNUAL REPORT 2015

Unit production costs
We achieved an overall 8% reduction in unit
production costs relative to 2014, with a 7%
decrease in gas unit production costs and a
17% reduction in oil unit production costs.
Since 2013, the total production cost reduction
has been 14%.

Total production cost

Gas unit production cost

Oil unit production cost

3
3
7

9
0
7

2
9
6

0
3
6

5
8
4

17.44

34.18

25.83

21.55

20.19

4.16

5.49

4.57

5.19

4.89

13 14

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Cash margins and cash break-even
Cash margins have decreased with lower
realised pricing across the portfolio.

Our break-even cash cost of sales has
reduced from US$16.52 per boe in 2013
to US$11.09 per boe in 2015, representing a
33% reduction over two years. These savings
are inclusive of reductions in royalties and
excise, and the impact of a weaker Australian
dollar.

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/
$
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8
11

8
12

9
13

7
4
7
7
14 15

Cash margin

Other

Production costs

Investment
In 2015, we invested US$6,003 million in our
business, comprising:

US$4,873 million on the acquisition and

development costs of Wheatstone, Kitimat
LNG and Balnaves oil;

US$694 million on our pre-existing

assets (up from US$561 million in 2014).
Expenditure increased largely due to
Vincent Phase IV side track; and

US$436 million in exploration (up from
US$410 million in 2014). Expenditure
increased during 2015 due to higher drilling
activity.

Investment expenditure outlook is on page 19.

Balance sheet and liquidity
Net debt has increased to US$4,319 million at
31 December 2015 following the funding of
the acquisition and investment expenditure.
Gearing has increased to 23% but remains
well within our target range of 10% to 30%.

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12 13 14 15

Net debt

Gearing (%)

With strong support from bank and debt
capital markets, we raised new debt and
refinanced a significant portion of our exisiting
debt portfolio. US$4,100 million in new and
refinanced facilities were raised during the
year comprising:
US$1,000 million US 144A ten-year

corporate bond;

US$1,000 million syndicated loan facility;
US$2,100 million in revolving bilateral debt

facility agreements.

Refer to page 91 of the Financial Report
for further details on our debt facilities.

Our debt maturities have been extended
with an average term to maturity of 4.7 years
and negligible maturities in 2016 and 2017.
Over 50% of debt maturing in 2018 to 2020
comprises bi-lateral evergreen facilities which
contain annual options to extend the maturity
date.

1,750

1,500

1,250

1,000

750

500

250

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17 18

19 20 21 22 23 24 25

Bank debt (contains options to extend)

Bonds

Other

At year end, our portfolio cost of debt
remains at a very competitive 2.9%, and
we maintain a strong liquidity position
with available funds of US$1,722 million
comprising cash of US$122 million and
undrawn debt facilities of US$1,600 million.

Our BBB+ rating has been affirmed by
Standard & Poor's (negative outlook) and
our Baa1 rating by Moody’s is currently
under review.

The Board has approved reactivation of the
Dividend Reinvestment plan (DRP) for the
2015 Final Dividend. This will further support
our balance sheet.

FINANCIAL POSITION

Sources and uses of cash
We entered the year in a strong position
with US$6.8 billion of available liquidity in
January 2015. With the addition of
US$2.4 billion of operating cash flow
we were able to comfortably fund
our asset acquisitions and investment
expenditure requirements.

10,000

8,000

6,000

4,000

2,000

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Sources

Uses

Cash flow from
operations
Cash at beginning of
period
Undrawn facilities at
beginning of period

Investment expenditure

Acquisition

Dividend payment
Net repayment of
borrowings

NPAT sensitivities
For 2016, a US$1 movement in the
Brent oil price is expected to impact NPAT
by US$22 million, and a US$0.01 decrease
in the AUD/USD exchange rate is expected
to increase NPAT by US$4 million.

Productivity progress
In 2014, Woodside announced a multi-year
program to improve productivity across the
company. By year end 2015, 56% of our
major improvement projects were completed,
and thousands of smaller improvements
were delivered. These initiatives delivered
>US$700 million in 2015.

More than half of the benefits came from
increased production volumes through
reliability and capacity improvements relative
to our average performance for 2010 to 2013.

The balance was achieved through reduction
to our operating expenditure relative to our
2013 actual spend and reduction to our capital
expenditure relative to our 2013 forward plans.
These savings are inclusive of the reduction
of over 650 full-time equivalents relative to
our 2013 baseline. Benefits were achieved in
contracting savings, efficiency improvements
and rigorous scope challenge, with significant
sustainable benefits. For example, the
Engineering Standards project is expected to
deliver ongoing capital expenditure benefits.

The program delivered a step-change in our
productivity and will continue in 2016, when
the remaining major improvement projects
will be completed.

WOODSIDE PETROLEUM LTD OPERATING AND FINANCIAL REVIEW

STRATEGY AND OUTLOOK

Strategic direction

Leverage our capabilities

Our vision is to become a global leader in
upstream oil and gas and deliver superior
shareholder returns.

Upstream oil and gas is a cyclical business.
A resilient low-cost operating core and
healthy financial position are essential to
endure price cycles and sustain long-term
growth. Despite a challenging year of
low oil and gas prices, we are well placed
at this point of the cycle due to a strong
balance sheet and operating cash flow.

Maximise our core

In early 2014, Woodside proactively
embarked on a program to lower its
costs, improve production and improve
operational efficiency. This program has
improved our resilience to a low oil price
environment and is driving cultural change.
Our break-even cash cost of sales has
been reduced to $11.09 per boe.

We achieved strong safety and reliability
performance in 2015. Our full-year total
recordable injury rate is an historic low
of 1.71 per million man hours (a 10%
reduction from 2014), and we are on track
to achieve global top-quartile performance
by 2017. We achieved full-year production
of 92.2 MMboe, our second highest
result on record. Excellent operations
performance and revised turnaround
strategies are improving Woodside’s
production outlook.

The productivity program delivered
>US$700 million in benefits in 2015.
Around half of this has been achieved
through improvements in operating
reliability and turnaround efficiency; the
other half through cost savings. We have
improved cost control through internal
initiatives, and vendor and category
management.

Woodside’s outstanding performance
in 2015 was delivered alongside a 20%
improvement in organisational efficiencies
which included staff reductions. The
Woodside team is more engaged and
more productive. Since 2013, Woodside
has substantially improved employee
engagement and enablement and is
performing at the top end of industry
benchmarks.

Our near-shore liquefaction and modular
liquefaction technologies and a range
of subsea and seismic data processing
technologies are delivering value to our
exploration and development investments.
Our emerging remote operations and
analytics capabilities are lowering operating
costs and improving maintenance
outcomes.

We continue to build capabilities in
marketing, trading and shipping as we
transition from a point-to-point to a
portfolio-based seller. Corpus Christi
Liquefaction LLC reached a final
investment decision on 13 May 2015,
satisfying conditions precedent to
Woodside’s 20-year LNG sales and
purchase agreement. Our customer
portfolio is expanding in response to an
evolving LNG market.

Grow our portfolio

One of our main priorities is to unlock value
from the Browse resources using floating
LNG (FLNG) technology. On 30 June 2015,
we entered the front-end engineering and
design phase for the proposed Browse
FLNG Development.

Our exploration strategy continues to
transition from acreage acquisition to
execution. We progressed a range of
exploration activities across our portfolio,
resulting in discoveries at Pyxis-1 in
Australia and Shwe Yee Htun-1 in
Myanmar. The latter has substantially
de-risked the petroleum system and
identified leads in the block and adjacent
acreage.

Our acquired interests in the Australian
Wheatstone and Balnaves oil projects
added significant reserves as well as
immediate and near-term production to
our portfolio.

Wheatstone is a world-class asset with
8.9 mtpa (1.16 mtpa Woodside share) LNG
production capacity. Kitimat LNG offers
a ground floor entry position into one of
the most advanced LNG opportunities
in Western Canada. These assets will
provide value-enhancing opportunities and
leverage our subsea, floating production
storage and offloading operations and
LNG capabilities. We continue to evaluate
further acquisition opportunities that meet
our target investment criteria.

Outlook

Market outlook

The LNG market has been impacted by
effects of world economic growth, energy
demand, timing for new LNG supply,
and volatility in oil price due to oil-linked
LNG pricing. Price trends in the short-
term market reflect a supply overhang.
Key uncertainties for LNG in the medium
term include the potential restart of some
nuclear reactors in Japan and the ramp-
up timing of new supply from Australia
and the United States of America (USA).
There is a risk of delay for some projects
under construction and final investments
decisions (FIDs) for incremental supply,
with the potential for a supply gap to
emerge from around 2022.

For more information on LNG marketing,
please refer to page 28.

Production range

Woodside’s production target range for
2016 is 86 to 93 MMboe, comprising
a product split of approximately 42%
Pluto LNG, 25% NWS LNG, 14% NWS
domestic gas, 18% condensate, oil and
LPG and 1% Canadian pipeline natural gas.

Exploration activities

In 2016, our planned drilling and seismic
activities include:

one well and a side track in the Beagle
Basin offshore north-west of Australia;

one well in Myanmar (AD-7); and

seismic surveys in Gabon, Ireland and

Myanmar.

Our focus in 2016 is to continue to grow
and high-grade our global exploration
portfolio with an emphasis on emerging
petroleum provinces such as Myanmar,
that offer materiality and can deliver future
growth opportunities (see Chart 1).

To read more about our exploration growth,
go to page 42.

Development activities

Our committed projects include
(see Chart 2):

North West Shelf (NWS) Project, namely
Greater Western Flank Phase 1 (GWF-1),
Persephone and Greater Western Flank
Phase 2 (GWF-2) projects; and

Wheatstone, namely the Wheatstone
Project (non-operated) and the Julimar
Project (Woodside operated).

To read more about Wheatstone and the
Julimar Project, go to page 44.

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD ANNUAL REPORT 2015Our uncommitted (pre-FID) projects are
(see Chart 2):

Browse, Greater Enfield, NWS Lambert

Deep, Kitimat and Sunrise.

The NWS Project participants approved
the GWF-2 project, a subsea tieback to the
Goodwyn A platform, in December 2015.
Drilling has commenced on the Persephone
project, a subsea tieback to the North
Rankin Complex. The project remains on
target to achieve start-up in 2018.

The Browse FLNG Development entered
the front-end engineering and design
(FEED) phase in mid-2015. Work continues
to support a FID.

To read more about Browse, go to page 46.

Woodside remains committed to
developing Greater Sunrise once
government alignment is established
between Australia and Timor-Leste on
fiscal terms.

Investment expenditure

Woodside’s total investment expenditure
in 2016 is expected to be approximately
US$2.05 billion (see Chart 3), of which
~US$1.5 billion is committed.

The 2016 expenditure relates to:

Wheatstone, (~US$760 million) and

Kitimat (~US$140 million);

Pluto, (~US$230 million) allocated to
well developments and sustaining
capital expenditure;

NWS, (~US$290 million) allocated
to Persephone, GWF-2, Karratha
life extension and sustaining capital
expenditure;

exploration, (~US$350 million) which will
be allocated approximately one half to
drilling, one quarter to seismic and lease
acquisition costs and one quarter to
general permit activity; and

other, (~US$280 million) mostly

allocated to Browse FLNG FEED and
Greater Enfield FEED, both pre-FID
expenditure.

Chart 1 – 2016–2017 planned drilling and seismic activities

Drilling
Australia

Beagle Basin

WA-483-P
International
Myanmar

Seismic surveys

Gabon
Ireland
Myanmar
Myanmar

Drilling

2016

2017
Q1

Size1

Target

Skippy Rock
Stokes2
Swell

Thalin
A-6 TBA3
A-6 TBA3

3D
3D
2D
3D

Oil
Oil
Gas

Gas
Gas
Gas

Medium
Small
Large

Large
Large
Large
Km4
2,500
2,200
1,230
31,750

Drilling subject to joint venture approval

Seismic surveys

1. Target size: gross mean success volume 100%, un-risked. Small <20 MMboe, Medium >20 MMboe and

<100 MMboe and Large >100 MMboe.

2. The Stokes prospect will be drilled via a side track from the Skippy Rock well.

3. Myamar A-6 wells in 2017 are subject to joint venture approval.

4. 2D seismic is in line km. 3D seismic is in sq km.

Chart 2 – Development pipeline
2016

2017

2018

2019

2020
1H 2H

US$m1

Committed projects
NWS:

GWF-1
Persephone
GWF-2
Wheatstone:
Wheatstone
Julimar

Uncommitted (pre-FID) projects
Browse
Greater Enfield
Kitimat

~310
~140
~330
~1,8582

STRATEGY AND OUTLOOK

The above figures include Woodside’s
share of sustaining capital expenditure1
and restoration costs in 2016 which is
expected to be:

NWS (~US$30 million) combined

onshore and offshore;

Australia Oil (~US$30 million); and

Pluto (~US$25 million) combined

onshore and offshore.

1. Sustaining capital expenditure is capital which

does not develop additional reserves.

Sources and uses of cash in 2016

Our cash flow from operations is expected
to exceed our committed investment
expenditure of US$1.5 billion in 2016,
notwithstanding current oil prices.

Chart 3 – Woodside’s investment
expenditure outlook1

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0
0
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0
0
0
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3

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436

208

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~280

~290

~230

~350

~140

~760

15
Asset
Acquisitions

16 E

Wheatstone

Kitimat LNG

Exploration

Pluto LNG

NWS

Other2

1. Chart includes capital, exploration and restoration
expenditure and excludes capitalised interest.

2. Other includes Australia Oil, Browse, International,
Sunrise, Corporate and restoration expenditure.

3. All figures are Woodside share.

Concept select

Concept definition and FEED

Execute

Execute subject to FID

1. Total project cost – Woodside share.
2. Development expenditure post 'acquisiton and working capital adjustment'.

WOODSIDE PETROLEUM LTD OPERATING AND FINANCIAL REVIEW
RISKS

Our approach to risk management focuses on enhancing opportunities,
reducing threats to our existing and potential business and sustaining a
competitive advantage.

Woodside’s risk management process
(Figure 1) is aligned to ISO 31000,
the international standard for risk
management. It is part of our overall
management system and sets out clearly
defined criteria to evaluate and report on
material risk across our organisation. We
systematically assess the consequence
of risk in areas such as health and
safety, environment, finance, legal and
compliance, reputation and brand, and
social and cultural impacts.

A range of material risks with the potential
to adversely impact Woodside are
summarised below. These risks are not
listed in order of significance, nor are they
all encompassing. Rather, they reflect the
most significant risks identified at a whole-
of-entity level.

Market conditions

External market conditions, including
volatility in commodity prices and demand
for our products, may impact our future
financial performance.

Commodity prices are variable and are
impacted in part by global economic
factors beyond Woodside’s control.
Adverse commodity prices, which could
have a material effect on our business,
are managed in a number of ways. For
example, any reductions in global LNG

prices are managed through our diversified
portfolio of long-term sale and purchase
agreements. In practical terms, this
provides some downside price protection.
Woodside mitigates the uncertainty
associated with product demand by selling
LNG under long-term ‘take or pay’ sale
agreements, in addition to the spot market.

We are also exposed to fluctuations in
currency exchange rates and, as a result,
Woodside’s financial results can be
negatively impacted. The extent of this risk
is reduced by Woodside’s financial results,
debt and the majority of revenue being
in US dollars. The remaining exposure is
principally to Australian dollar and third
currency expenditure. Our exposure to
volatility in the Australian dollar is partially
mitigated by our pipeline gas revenue,
which is priced in Australian dollars.
The impact of currency volatility becomes
more pronounced when Woodside is
undertaking new domestic, onshore
developments. Our current exposure to
these new projects is low. Woodside
generally considers that active commodity
and currency hedging does not provide
value to our shareholders, but does
consider the appropriateness of such
hedging from time to time and in specific
circumstances. Any hedging activity is
only undertaken in accordance with limits
approved by the Woodside Board.

Figure 1 displays the Woodside risk management process. It applies clearly defined criteria to
evaluate and report on risk and considers the potential impact of risk across six categories of
consequence.

Figure 1 – Woodside risk management process

Establish the context

RISK ASSESSMENT

Risk identification

Risk analysis

Risk evaluation

Risk treatment

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The overall exposure to fluctuations in
currency exchange rates is low. For the
estimated impact of a change in oil price or
exchange rates on NPAT, see the Financial
Position on page 16.

Production
Safety and reliability in production
and delivery of hydrocarbon products
influences our ability to achieve superior
shareholder returns.

A sustained and unplanned interruption to
Woodside’s production could significantly
impact our financial performance and delay
future growth. Such an event could occur
for a number of reasons, including loss
of facility integrity, sub-optimal reservoir
performance, critical process failures,
removal of our licence to operate or a
significant weather event. Further, offshore
and marine-related activities introduce
additional complexity and risk into the
way we operate, which require specific
management. These activities also have
the potential to interrupt our ability to
produce hydrocarbons.

Our extensive framework of controls
enables the management of such risks.
This includes our overall production
processes, inspection and maintenance
procedures, performance standards,
marine assurance processes and our
focus on compliance with legal and
regulatory obligations. This framework
is complemented by the ongoing
engagement we have with regulators.

Additionally, our facilities are designed
and operated consistent with the overall
environmental and climatic conditions
applicable to each facility.

Information technology
Our business relies on a variety of
information technology systems.
A cyber security attack has the potential
to disrupt our business activities. Our
exposure to cyber security risk is managed
by an appropriate control framework
and the continuing focus on system
control improvements, supported by
an established and embedded security
strategy across the organisation.

Loss of containment
A loss of hydrocarbon containment
from a Woodside-operated facility or
well could result in harm to personnel,
or environmental, social, reputation and
financial loss.

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD ANNUAL REPORT 2015

This risk is addressed by an extensive
control framework designed to prevent
the loss of hydrocarbon containment
in the first instance, and by maintaining
an appropriate capability to minimise
the impact of an event should it occur.
Our specialised oil spill contingency and
response teams further enhance our
emergency response capabilities.

Exploration
Our ability to identify, acquire and
commercialise hydrocarbons will be
an ongoing contributor to our success.
However, there is a risk that Woodside’s
exploration activities may be unsuccessful,
thereby reducing or limiting future growth.

Our overall exposure to exploration risk is
addressed by a comprehensive exploration
strategy and a rigorous and disciplined
review of opportunities, complemented by
the company’s capabilities in geosciences
and deepwater exploration.

Commercial transactions
Commercial transactions undertaken
with the objective of growing Woodside’s
portfolio are associated with a number of
risks.

These include the risk of sub-optimal
commercial outcomes which fail to deliver
the value to Woodside anticipated from the
transaction; the imposition of unfavourable
conditions, obligations or liabilities which
affect the value of the transaction; or
the eventual operational performance
of any acquired asset not meeting our
expectations. Our commercial processes
are designed to reduce the likelihood
of these risks materialising as a result
of a commercial transaction. We focus
on maintaining a disciplined approach
to ensure that we continue to increase
shareholder value and appropriately
manage risk.

Commercialisation of hydrocarbons
Woodside’s focus is on ensuring efficient
and cost-competitive commercialisation
of hydrocarbons to deliver superior
shareholder returns.

A failure to do so may occur as a result
of choosing a sub-optimal development
option or failing to execute a project in
a way that achieves our objectives in
cost, schedule and quality. If we are
unsuccessful in managing cost and
productivity, the value we can secure
from future developments will be
reduced. Creating effective commercial
arrangements with a range of partners,
stakeholders and contractors is an
important mechanism to offset this risk.
Our historic and ongoing investment
in robust and high-quality opportunity
development and project management
systems is also central to the management
of such risks.

The agreement of our joint venture
participants to a particular course of
action is often required to commercialise
hydrocarbons, and we may have limited
influence or control over these decisions.
We address this risk by actively engaging
with our joint venture participants
to promote alignment on significant
decisions.

Technology
Inability to successfully develop and deliver
new enabling technology solutions within
our business has the potential to inhibit
our future performance. We are actively
pursuing strategies to reduce unit costs for
developments and maturing technology
solutions in new business opportunities to
deliver our strategic objectives.

RISKS

introduced by government may adversely
impact the company’s financial standing.

Government action, or conversely inaction,
may also negatively affect our ability to
undertake future development activities
or maximise value from existing assets.
By increasing our global footprint, we
are proactively maintaining ongoing and
constructive relationships with both
domestic and international governments
and regulators.

Fraud and corruption

Violation of anti-bribery and corruption
law may expose Woodside to fines,
criminal sanctions and civil suits, as well
as negatively impact our international
reputation.

Our Fraud and Corruption Control Program
provides a clear framework to help
prevent, detect and respond to dishonest
or unethical behaviour. The framework
incorporates policies, programs, training,
standards and guidelines that help ensure
that all activities are conducted ethically,
honestly and to the highest possible
standard.

Climate change

Continued and increasing attention on
climate change has the potential to
lead to additional measures impacting
financial performance. We are focusing
on improving our energy efficiency,
maintaining engagement with key industry
and government stakeholders and
modelling the impact of climate change
action on our business. Failure to manage
this risk has the potential to increase costs,
delay future projects, and lead to poor
investment decisions.

Government and regulatory
Our business activities are subject to
extensive regulation. Unforeseen change

Refer to the Corporate Governance
Statement 2015 available on our website and
the Sustainable Development Report 2015.

Unreasonable prejudice

Forward looking statements

As permitted by sections 299(3) and
299A(3) of the Corporations Act 2001, we
have omitted certain information from this
operating and financial review in relation to
our business strategy, future prospects and
likely developments in our operations and
the expected results of those operations
in future financial years. We have done
this on the basis that such information,
if disclosed, would be likely to result in
unreasonable prejudice to Woodside
(for example, because the information
is premature, commercially sensitive,
confidential or could give a third party
a commercial advantage). The omitted
information relates to our internal budgets,
forecasts and estimates, details of our
business strategy, and LNG contractual
pricing.

This report contains forward looking
statements, including statements of
current intention, statements of opinion and
expectations regarding Woodside’s present
and future operations, possible future
events and future financial prospects. Such
statements are not statements of fact and
may be affected by a variety of known and
unknown risks, variables and changes in
underlying assumptions or strategy which
could cause Woodside’s actual results
or performance to differ materially from
the results or performance expressed or
implied by such statements. There can be
no certainty of outcome in relation to the
matters to which the statements relate,
and the outcomes are not all within the
control of Woodside.

Further information on some important
factors that could cause actual results or
performance to differ materially from those
projected in such statements is contained
in the “Risk” section above. Woodside
makes no representation, assurance or
guarantee as to the accuracy or likelihood
of fulfilment of any forward looking
statement or any outcomes expressed or
implied in any forward looking statement.
The forward looking statements in this
report reflect expectations held at the
date of this report. Except as required by
applicable law or the Australian Securities
Exchange (ASX) Listing Rules, Woodside
disclaims any obligation or undertaking
to publicly update any forward looking
statements, or discussion of future financial
prospects, whether as a result of new
information or of future events.

WOODSIDE PETROLEUM LTD OPERATING AND FINANCIAL REVIEW%

NORTH WEST SHELF

In 2015, the North West Shelf (NWS) Project delivered value through
increasing production capacity and delivery of committed projects to schedule.

NWS production (Woodside share)

2015 Key performance highlights

Continued excellent improvement in

process safety performance.

Executed a best-in-class LNG turnaround

at the Karratha Gas Plant (KGP).

Achieved record continuous LNG

production runtime at KGP.

Produced first gas from the Greater

Western Flank Phase 1 (GWF-1) Project.

Approved the Greater Western Flank

Phase 2 (GWF-2) Project.

Increased average annual production

capacity from 16.3 to 16.7 million tonnes
of LNG following system improvements
and debottlenecking.

Progressed the Karratha Life Extension
Program refurbishment on the domestic
gas plant and fractionation units.

Future objectives

Continue focus on performance

excellence and continuous improvement
to achieve efficiency improvements
across our operating assets.

Progress the Persephone and GWF-2

Projects.

Consider a final investment decision

(FID) for Lambert Deep.

Identify and mature prospects from the

Fortuna 3D marine seismic survey.

Progress technical scopes of work and
agreements with Hess Exploration
Australia to support a decision to enter
the front-end engineering and design
(FEED) phase for the Equus Project.

Identify and pursue potential

opportunities to process stranded gas
of other operators through KGP.

NWS Project
Interest

16.67
50.001

NWS Venture
Domestic Gas joint
venture (JV)
16.671
Incremental Pipeline JV
China LNG JV
12.50
Cossack, Wanaea, Lambert 33.33
and Hermes (crude oil)

Operator

Woodside

Facilities

North Rankin Complex
Goodwyn A platform
Angel platform
Okha FPSO
Karratha Gas Plant

Location

Offshore facilities ~135 km
north-west of Karratha, WA

Water depth 80 – 130 metres

Products

LNG, pipeline gas,
condensate, crude oil and LPG

First
production

1984 (pipeline gas)
1989 (LNG)

1. During 2015, Woodside’s average share of pipeline gas
production was approximately 45%. Woodside’s exact
share of domestic gas production depends on the
quantities and aggregate rate of production.

44.7

MMboe

NWS LNG

NWS domestic gas

NWS LPG

NWS condensate
NWS oil

MMboe %
51
29
2
13
5

22.7
13.1
0.7
5.7
2.5

In 2015, NWS contributed 44.7 MMboe to
Woodside’s net production of 92.2 MMboe.

NWS key metrics (Woodside share)

NWS LNG reliability

2014

2015

Sales revenue

(US$ million) 2,986

1,788

EBITDA

(US$ million) 2,278

1,333

Net gas
production

Net liquids
production

Proved plus
Probable
Developed and
Undeveloped
reserves

(MMboe)

37.2

36.5

(MMbbl)

9.1

8.2

(MMboe) 462.9

416.4

6
7.
9

6
.
5
9

4
7.
9

9
.
3
9

8
.
2
9

13 14 15

)

(

%
y
t
i
l
i

b
a
i
l
e
r
e
g
a
r
e
v
A

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD ANNUAL REPORT 2015

Production performance

In 2015, Woodside’s share of production
from the NWS Project was 44.7 MMboe,
comprising 36.5 MMboe of gas (including
13.1 MMboe of pipeline gas) and
8.2 MMbbl of liquids. Pipeline gas
reliability was 99.9% and production
continued to meet customer
demand in Western Australia.

from Fractionation Train 3; a unit not
originally designed with this capability.

Execution of a major LNG maintenance
turnaround at KGP was completed
ahead of schedule and, along with timely
completion of offshore maintenance
scopes, ensured that system availability
returned to planned levels seven days
ahead of schedule.

LNG marketing

The NWS Project exported 252 cargoes
(total project) of LNG in 2015, of which
36 were sold on the short and mid-term
market.

In 2015, the NWS Project progressed
arrangements to enable equity lifting
of uncontracted LNG and pipeline gas
by the NWS Project participants. The
Australian Competition and Consumer
Commission’s authorisation for the
NWS Project to jointly market pipeline
gas expired on 31 December 2015.
NWS Gas will continue to administer
long-term contracts that were marketed
by the six NWS Project participants.

Financial contribution

Woodside’s share of sales revenue from
the NWS Project was US$1,788 million
in 2015, approximately 36% of our total
operating revenue.

Unit production costs decreased to
US$4.18 per boe from US$5.22 per boe
in 2014, underpinned by an ongoing
focus on delivering cost efficiencies and
performance excellence.

NWS delivered a unit cash margin of
US$30 per boe in 2015, while productivity
improvements continue to be implemented
to ensure that profitability remains resilient
in a low oil price environment.

Operations excellence

In 2015, we continued our focus on
ensuring safe and reliable production,
while reducing costs and sustaining a
commitment to excellence across our
operations. This year, LNG reliability of
93.9% was achieved despite impacts to
production from an electrical incident at the
KGP in May. Discounting this incident, the
underlying trend was for top-quartile LNG
reliability.

Engineering and operations innovations
delivered during the response and
recovery from this incident not only helped
to reduce production impacts but also
delivered improved operational flexibility
and robustness. These innovations
resulted in KGP acquiring the ability to
produce LNG without fractionation and for
refrigerant-grade propane to be processed

System improvements and
debottlenecking delivered during the
LNG turnaround resulted in KGP’s
annual LNG production capacity increasing
from 16.3 to 16.7 million tonnes of LNG.

In 2015, the Karratha Life Extension
(KLE) Program continued to plan and
execute a portfolio of refurbishment
scopes to extend the life of KGP, including
completing activities on the domestic gas
plant, stabilisation and fractionation units,
and LNG trains. Preparations for a marine
facilities campaign that will refurbish
the LNG and LPG jetties have also
commenced.

The KLE program is approximately 16%
complete and is targeting completion
around 2025. Through KLE, about
US$50–70 million will be invested by
Woodside each year to deliver safe,
efficient and predictable refurbishment
and life extension works at the KGP.

Efficient development of
NWS reserves

Woodside’s substantial experience
in delivering major subsea tieback
projects is enabling the NWS Project to
commercialise its existing gas reserves in a
timely, cost-effective and efficient manner
to extend plateau production.

First gas from the A$2.5 billion (100%
project) GWF-1 Project was delivered
ahead of schedule in late 2015. The
project is developing the Goodwyn and
Tidepole fields via a subsea tieback to the
existing Goodwyn A platform. Initial gas
has come from the Goodwyn field, with
further production from the Tidepole field
expected from early 2017.

At the end of 2015, the A$1.2 billion
(100% project) Persephone Project was
51% complete, having undertaken platform
modifications and commenced drilling and
fabrication of key subsea infrastructure.
Persephone is a two-well, 7 km subsea
tieback from the Persephone field to the
existing North Rankin Complex.
The project will access approximately
140 MMboe (100% project) to maintain
offshore supply to the KGP and remains
on budget and on schedule for start-up in
early 2018.

NORTH WEST SHELF

In December, the NWS Project
participants approved the US$2.0 billion
(100% project) GWF-2 Project, which
will develop approximately 317 MMboe
(100% project) from the combined
Keast, Dockrell, Sculptor, Rankin, Lady
Nora and Pemberton fields using subsea
infrastructure and a 35 km, 16" pipeline
connecting to the existing Goodwyn
A platform. Gas delivery will initially
commence in 2H 2019 from five wells in
the Lady Nora, Pemberton, Sculptor and
Rankin fields, followed by the remaining
three wells in the Keast and Dockrell fields
in 1H 2020.

The proposed Lambert Deep development,
a one-well, subsea tieback to the existing
Angel platform, is continuing the FEED
phase to enable a planned FID in 1H 2016.

Extending our business beyond
known reserves

We are actively progressing opportunities
to identify and develop hydrocarbon
reserves to extend the life of the NWS
Project by helping maintain offshore supply
to meet onshore processing capacity.

Preliminary data from the Fortuna 3D
marine seismic survey was processed,
and interpretation is underway, with final
data products delivered in January 2016.
Evaluation of this information will be
used to identify potential development,
exploration and infill opportunities.

The NWS Project participants and
Hess Exploration Australia executed an
operational integration FEED agreement
in Q1 2015 for the proposed Equus
Project. Technical discussions continued
on tolling of resources in the Carnarvon
Basin through KGP to support a potential
entry into the FEED phase for the Project
in 2016.

Outlook

In 2016, we will continue to optimise
production from our current assets,
deliver value from remaining hydrocarbon
resources in NWS acreage and maintain
our focus on performance excellence
and continuous improvement to achieve
cost savings and deliver reliability
improvements.

WOODSIDE PETROLEUM LTD OPERATING AND FINANCIAL REVIEWPLUTO LNG

The Perth-based Pluto Support Centre delivered improved operational
efficiencies through our innovative approach to remote operations, maintaining
high standards of health, safety and environmental management.

2015 Key performance highlights

Achieved top-quartile LNG reliability,

averaging 96.9%.

Delivered the first major turnaround

ten days ahead of schedule.

Commenced Xena Phase 1 production.

Started up the sixth production well in

the Pluto field.

Discovered additional gas for future
tie-back with the Pyxis-1 exploration
well.

Implemented capacity enhancement

modifications to the LNG train to further
increase Pluto LNG capacity.

Future objectives

Pluto
Interest

Operator

Facilities

Location

WA-34-L
WA-404-P

Woodside

Pluto platform
Pluto LNG Plant

Pluto and Xena fields, 190 km
north-west of Karratha, WA
(the location of the gas plant)

Water depth

400 – 1,000 metres

Products

LNG and condensate

First
production

2012

Pluto production (Woodside share)

90
100

37.5

MMboe

Pluto LNG
Pluto condensate

MMboe %
93
7

34.8
2.7

In 2015, Pluto contributed 37.5 MMboe to
Woodside’s net production of 92.2 MMboe.

Deliver safe and sustained reliable

production and sales.

Pluto key metrics
(Woodside share)

Pluto LNG reliability

Protect long-term supply.

2014 2015

1
7.
9

9
.
6
9

Increase plant utilisation through further
capacity enhancements and availability
improvements.

Operating
revenue

(US$ million) 3,440

2,377

EBITDA

(US$ million) 3,131

2,051

(MMboe)

37.3

34.8

(MMbbl)

2.9

2.7

7
.
0
9

2
7.
8

)

(
y
t
i
l
i

b
a
i
l
e
r
e
g
a
r
e
v
A

(MMboe) 842.4

802.7

12 13 14 15

In 2015, our focus on operational excellence
delivered top-quartile LNG reliability at Pluto.

Net gas
production

Net liquids
production

Proved plus
Probable
Developed and
Undeveloped
reserves

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD ANNUAL REPORT 2015

Production performance

Production results were above plan,
primarily due to strong reliability and
system optimisation. Woodside’s share
of production from Pluto LNG was
37.5 MMboe in 2015, comprising
34.8 MMboe of LNG and 2.7 MMbbl
of condensate.

In June, we completed our first major
turnaround on Pluto in 25 days, ten
days ahead of the original schedule due
to disciplined planning and technical
innovations. The turnaround execution was
outstanding across several areas, including
health and safety performance, quality, and
cost savings. The scope involved onshore
plant activities to maintain the integrity of
plant equipment, as well as minor capacity
enhancements and offshore work to
support the Xena tie-in.

The Xena Phase-1 Project was completed
ahead of schedule, with production
commencing in June. Xena, the sixth
production well and the Pyxis discovery
will support Pluto production and future
growth.

The fifth Pluto production well has
not performed to expectations due to
mechanical issues. The well will be
reinstated in 2016 by side tracking the
existing well-bore.

The Perth-based Pluto Support Centre
delivered improved operational efficiencies
through our innovative approach to
remote operations while maintaining
high standards of health, safety and
environmental management. The
operating model provides the opportunity
to build capability in this emerging area
and further develop processes, practices
and technology for the next generation of
Woodside LNG facilities.

LNG marketing

Pluto LNG delivered 66 cargoes of LNG
in 2015 and, since start-up in 2012, we
have delivered a total of 229 cargoes1 (total
project). In August 2015, we reached a
significant milestone, loading our 200th
cargo since start-up in 2012.

While the majority of volumes were sold
under long and mid-term agreements with
premium Japanese and Korean energy
buyers, incremental value was derived
from the sale of six upside cargoes on
the spot market, three of which were
produced as a result of the reduced
turnaround time in June. Four incremental
gas-up and cool-down (GUCD) services
were also provided to third-party vessels.
GUCDs involve loading a partial LNG cargo
to a warm LNG vessel in readiness for an
efficient full cargo loading.

Our focus on capacity improvements
and reliability ensured that we offset
the production disruption caused by the
precautionary shutdown in Q1 2015, when
a third-party semi-submersible drilling
rig drifted near Pluto flowlines during a
cyclone. Our strong operational capabilities
enabled an efficient response to and
recovery from this incident.

Financial contribution

Woodside’s share of revenue from
Pluto was US$2,377 million, comprising
US$2,067 million of LNG revenue,
US$130 million condensate revenue and
US$180 million from processing revenue.
This represented about 47% of
Woodside’s total operating revenues.

1. Includes some partial cargoes.

PLUTO LNG

Unit production costs were
US$5.48 per boe in 2015, despite
suffering from a precautionary
shutdown in Q1 2015 and undergoing
the first major planned turnaround in June.
Pluto delivered a unit cash margin of
US$50 per boe in 2015.

Conservation Agreement

Under the A$34 million Pluto LNG
Conservation Agreement with the
Australian Government, we continue to
support initiatives that protect and promote
the living culture and National Heritage
values of the Burrup Peninsula in Western
Australia. To date, we have spent more
than A$18 million on projects related to this
agreement. A key initiative in 2015 was the
Women in the Picture: Murujuga Dreaming,
Art and Landscapes scoping study.

This study identifies sites and stories
related to the Burrup which are important
to women today and which preserve
scientific or archaeological information
about women in the past. We will
contribute a further A$4 million to the
display and curatorship of rock art in 2016
and look forward to building upon the
progress and success of projects in 2016.

Outlook

We remain focused on maintaining
plant capacity and future growth. Drilling
activities are planned to commence in
Q2 2016 to reinstate production on the
fifth production well in the Pluto field.
Further development studies on the
Pyxis-1 exploration well will be undertaken,
including sub surface analysis and
geotechnical and geophysical surveys.

In December 2015, we commenced a
4D marine seismic survey. The information
acquired will be used to maximise
hydrocarbon recovery and use of our
existing Pluto infrastructure, with data
processing to occur in 2016.

Woodside continues to drive continuous
improvement initiatives following the
implementation of our Pluto Support
Centre.

Since start-up in
2012, Pluto LNG
has delivered a
step change for
Woodside’s equity
production and
revenue.

WOODSIDE PETROLEUM LTD OPERATING AND FINANCIAL REVIEWAUSTRALIA OIL

In 2015, we enhanced the value of our floating production storage and
offloading (FPSO) fleet by improving reliability and productivity and continued
to focus on reducing costs.

2015 Key performance highlights

Increased productivity and efficiency
through the One FPSO standardised
operating model.

Entered into a conditional agreement
to sell our interests in the Laminaria-
Corallina Joint Venture.

Completed the Vincent Phase IV well.

Entered the front-end engineering and
design (FEED) phase for the proposed
Greater Enfield Development.

Future objectives

Continue the One FPSO initiative to
further reduce costs and increase
efficiency.

Increase focus on productivity

improvements to deliver cost savings
in a lower oil price environment.

Complete the sale of the Laminaria-

Corallina assets.

Consider a final investment decision

(FID) on the Greater Enfield
Development.

Australia Oil
(excludes NWS oil, Woodside share)

2014

2015

Sales revenue

(US$ million)

EBITDA*

(US$ million)

825

505

(MMbbl)

8.4

510

249

9.8

Net liquids
production

Proved plus
Probable
Developed and
Undeveloped
reserves

(MMboe)

33.2

27.7

Australian oil assets delivered a unit cash margin
of $27 per boe in 2015.

*Excludes onerous lease costs.

Australia Oil production
(excludes NWS oil, Woodside share)

9.8

MMboe

Vincent
Balnaves
Enfield
Laminaria-Corrallina
Stybarrow

MMboe %
56
20
12
9
3

5.5
2.0
1.2
0.8
0.3

In 2015, Australia Oil (non-NWS) contributed
9.8 MMbbl to Woodside’s net production of
92.2 MMboe, up from 8.4 MMbbl.

Vincent oil field

Interest

Operator

Facilities

Location

Water depth

Products

First production

WA-28-L
Woodside
Ngujima-Yin FPSO
45 km off the
North West Cape, WA
350 – 400 metres
Crude oil
August 2008

Vincent has produced 55.4 MMbbl
(100% project) of oil since start-up in 2008.
Annual production was 9.2 MMbbl
(5.5 MMbbl Woodside share). The Vincent
Phase IV in-fill well came online in June
and has produced 1.7 MMbbl.

Balnaves oil field

Interest

Operator

Facilities

Location

Water depth

Products

First production

WA-49-L
Woodside
Armada Claire FPSO
~180 km north-west
of Karratha, WA
135 metres
Crude oil
August 2014

Balnaves has produced 3.0 MMbbl
(100% project) of oil since completion of
the acquisiton in April 2015 (2.0 MMbbl
Woodside share). The FPSO commenced
commissioning operations in 2014, and
has since been integrated into Woodside’s
fleet under a leased operating model.
Overall performance has been less than
expected.

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD ANNUAL REPORT 2015AUSTRALIA OIL

INTERNATIONAL

Canada1

Interest

Operator

Facilities

Location

Water depth

Products

Liard and
Horn River Basins
Chevron2
Pipeline
North-east British Columbia,
Canada
Not applicable, onshore
Natural gas

1. Canada reserves and resource estimates are provided on pages 38 and 39.

2. Woodside was operator for a six-week transitional period between April and May.

The Liard and Horn River Basins produced 0.2 MMboe
(Woodside share) of natural gas into the Canadian domestic grid
since the transaction was completed in April 2015. The produced
gas is a result of the appraisal program being undertaken to
support the Kitimat LNG Project.

See more on page 47.

Enfield oil field

Interest

Operator

Facilities

Location

Water depth

Products

First production

WA-28-L

Woodside

Nganhurra FPSO
40 km off the
North West Cape, WA
400 – 500 metres
Crude oil
July 2006

Enfield has produced 76.3 MMbbl (100% project) of oil
since start-up in 2006. Annual production of 2.0 MMbbl
(1.2 MMbbl Woodside share) for 2015 continued to
reflect reliable performance. Production was consistent
with anticipated natural field decline in 2015.

Laminaria-Corallina oil fields

Interest

Operator

Facilities

Location

Water depth

Products

First production

59.901

66.67

Laminaria
Corallina
AC/L5
Woodside
Northern Endeavour FPSO
Timor Sea, 550 km
north-west of Darwin
340 metres
Crude oil
1999

1. Interests on a post-unitisation basis, i.e. after agreeing to pool Woodside’s
interest with other field owners and to exploit the field as a single venture.

The Laminaria-Corallina oil fields have delivered over 200 MMbbl
(100% project) of oil production since commencing in 1999.
Lower production of 1.4 MMbbl (0.8 MMbbl Woodside share)
for 2015 is consistent with anticipated natural field decline.

In September 2015, Woodside entered into a conditional
agreement to sell interests in the Laminaria-Corallina Joint Venture,
and the parties are working towards satisfaction of the conditions
to enable closing of the transaction. The transaction is expected to
be completed in 1H 2016.

Stybarrow oil field

Interest

Operator

Facilities

Location

Water depth

Products

WA-32-L
BHP Billiton

Stybarrow Venture FPSO

~50 km off the
North West Cape, WA
825 metres
Crude oil

First production November 2007

Stybarrow has produced over 60 MMbbl (100% project)
of oil since start-up in 2007. Production of 0.6 MMbbl
(0.3 MMbbl Woodside share) in 2015 reflects natural reservoir
decline. Production permanently ceased in June 2015, and
decommissioning activities have commenced.

Outlook

We will continue to enhance the value of our FPSO fleet by
improving reliability and productivity and continuing our focus
on reducing costs. In 2016, we will continue to standardise the
way we work across our FPSO fleet. The One FPSO operating
model will continue to improve operational efficiencies and cost
performance as we prepare for end of field activities on producing
assets. Additional growth is created by understanding the value
proposition of the Greater Enfield Development.

To read more about Greater Enfield, go to page 45.

Image courtesy of Chevron Canada.

Natural gas for the Kitimat LNG Project will be sourced from the
Horn River and Liard Basins in British Columbia, Western Canada.

WOODSIDE PETROLEUM LTD OPERATING AND FINANCIAL REVIEWLNG MARKETING

Woodside’s marketing strategy
in 2015
During 2015, Woodside made good
progress on its LNG marketing and trading
strategy: transitioning from a point-to-point
to a portfolio-based seller and bolstering
trading capabilities. Our aim is to offer
customers competitive and flexible supply
terms, backed by our substantial existing
and potential equity LNG and third-party
sources. Key elements of our marketing
strategy include: leveraging our strong
suite of existing LNG contracts; expanding
trading and shipping activities; and
expanding our portfolio of supply options.

Browse marketing
Woodside is making every effort to
achieve cost targets and secure LNG
contracts that deliver an economically
robust project. Accordingly, we enhanced
our marketing efforts when Browse
entered front-end engineering and design
in 2015. We are engaging with key Asian
and regional customers with the objective
of securing Browse FLNG foundation
sales.

Global LNG market
Our marketing strategy reflects a rapidly
changing LNG industry, which continues to
grow, evolve and diversify. Key trends for
the global LNG market include:

an expanding customer and demand
base, in part facilitated by new LNG
import receiving infrastructure in
emerging markets, albeit with some
moderation in growth rates for certain
markets (e.g. China);

ongoing evolution of the short-term LNG
market, with 2015 featuring significant
incremental buying activity from Middle-
East importers (including new LNG
buyers Egypt, Jordan and Pakistan), and
changing dynamics in trade flows and
price arbitrage;

substantial growth in the size of the

global LNG shipping fleet, and improved
fuel efficiency of newly built vessels;
and

a broadening LNG supply base and
variety of supplier business models,
providing LNG buyers and suppliers with
increased diversity in choice of LNG
pricing structures; geographic location
of supply; the number of suppliers;
LNG heating value; LNG production
technology (e.g. FLNG); and a mix of
short, mid and long-term contracting
arrangements.

About 1301 million tonnes of new supply
currently under construction is expected
to ramp up over the next five years,
mostly from projects in Australia and the
US. While much of this volume is already
under long-term contract with buyers, it is
expected to increase liquidity in the global
LNG market.

Multiple sources of LNG demand
growth

Diversification and growth opportunities
include new LNG customers in emerging
markets and in established LNG markets,
where gas and power sector deregulation
is occurring.

In addition, the longer-term outlook
includes substantial recontracting demand
from the traditional Asian LNG buyers in
Japan, Korea, Taiwan (i.e. replacement
of expiring contracts from legacy supply
projects) and potential increased LNG
import into the sizable European gas
market (approximately 500 BCM per
year2). European demand is partly as a
result of expiring contracts, and also due to
expected decline in indigenous natural gas
production.

200

150

100

a
p
t
m

0
2020

Asia LNG contracting potential3

2030

Other Asia-Pacific uncontracted LNG
demand growth
Recontracting opportunities from
traditional buyers
(Japan, Korea, Taiwan and China)

Dynamic short-term market activity
amid lower prices

Dynamic LNG trading activity, an increased
prevalence of shorter-term contracts
(i.e. spot sales and contracts with a
duration of less than two years) and an
expanding set of participants are now
established components of the global
LNG market.

The 2015 calendar year featured some
different trade flows and drivers compared
to 2014, namely: increased buying activity
out of the Middle East and India; and the
reduction of the price arbitrage to shift
significant quantities of Atlantic cargoes
to Asia.

Short-term LNG prices traded significantly
lower, on average about US$7.50/MMBtu
in 2015, compared to an average of about
US$14/MMBtu for 2014. The reduction
in spot prices has been due to the
combination of: lower oil prices; weaker
short-term LNG demand, in particular
due to milder weather across a number of
markets and China’s economic slowdown;
and increased LNG supply with the
ramp-up of LNG supply from Queensland
and Papua New Guinea.

Industry FID support required to
avoid long-term LNG shortfall

Compared to recent years, the pace of
positive FIDs on LNG projects slowed
in 2015, with two Greenfield4 and two
Brownfield expansion5 projects approved,
amounting to an additional aggregate
capacity of about 20 mtpa.

The global supply and demand outlook
indicates that existing and under
construction supply is expected to be
sufficient to meet demand until around
2022. Thereafter, a supply gap grows
substantially to 2030, signalling the need
for annual additions of around 20 mtpa
through project life extensions and new
supply.

Given the current lower oil price
environment and review of capital
expenditure budgets by oil and gas
companies globally, Woodside anticipates
that only the most commercial LNG
projects will be sanctioned, whilst other
projects will be delayed or cancelled,
resulting in a more modest growth rate
for the industry as a whole. Noting that
the lead-time for new supply can be five
to six years, achieving a positive FID in a
lower oil price environment is a shared
industry-wide challenge and will require
support from customers, contractors, and
governments.

1. WoodMackenzie, LNG Tool.
2. IHS Energy.
3 WoodMackenzie and Woodside data.

4. Cameroon GoFLNG, Corpus Christi.
5. Sabine Pass Train 5, Freeport Train 3.

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD ANNUAL REPORT 2015Global LNG supply and demand6

Continued LNG price diversification

~200 mtpa supply
must come online to
support 2030 demand

New FIDs required
now to support
2022 demand

600

500

400

a
p
t
m

300

200

100

2015

2030

Probable development
Projects under construction
Operational
WoodMackenzie demand

6. WoodMackenzie (Q4 2015) and Woodside data.

Further long-term contracting
opportunities across existing and
emerging markets

Experienced buyers from the established
markets of Japan, Korea and Taiwan are
expected to secure new supply to avoid
long-term shortfalls and to leverage market
conditions.

Emerging markets including Thailand,
India, Singapore, Indonesia, Vietnam,
Pakistan, and Jordan are an important LNG
demand growth sector. The importance
of long-term contracts is recognised in the
industry, with new importers committing
to stable, secure supply in the form of long-
term agreements. During 2015, Indonesia,
Thailand and a number of emerging buyers
in China each announced long-term supply
agreements.

Europe is regarded as a market with the
potential to take increasing volumes of
LNG, particularly from the US. While
overall gas demand growth in Europe is
relatively flat, it remains the largest gas
import region in the world, and is an open
and flexible market with the infrastructure
to accommodate further LNG supply.
Woodside will seek to leverage existing
end-buyer and trading relationships in this
market to develop new opportunities,
particularly to support on-selling and
optimisation of Woodside’s future
US LNG volumes.

The short-term LNG market features a
variety of short-term pricing structures,
including fixed pricing and negotiated
indexation to movements in oil prices and
gas hub markers. In 2015, there was an
increased use in the industry of tenders
(buy-side and sell-side) to execute short
and medium-term sales arrangements.
The Singapore Stock Exchange (SGX)
also launched the SGX LNG Index Group
(SLInG) as an exchange traded spot index
for Asian LNG.

Long-term contracts are expected to
feature an evolving set of pricing structures
including indexation to oil, Henry Hub, and
to a lesser extent other gas hubs such as
National Balancing Point. For Woodside’s
core Asia-Pacific market, oil linkage is
expected to remain the most prevalent
index, with Henry Hub linkage growing to
around 20% of the market in the period
2020–2030.

Shipping opportunities in the
current market

LNG shipping capacity is expanding rapidly,
with 22 vessels added to the global fleet
in 2015, and a further 140+ LNG ships
on order. While many of these vessels
are committed to projects, a number are
unallocated or speculative vessels. On the
back of lower LNG prices and the LNG
ship capacity ramp-up, short-term LNG
ship charter rates are at their lowest levels
since 2010.

Strong suite of existing LNG
contracts

Woodside’s portfolio currently has the
majority of volumes committed under
existing long-term and mid-term sales
arrangements.

Through 2016, Woodside will continue to
have limited exposure to spot pricing with
more than 95% of expected production
committed under mid and long-term
contracts. There is some optionality to
increase exposure if spot prices exceed
term contract prices.

As some mid-term contracts
(predominantly underpinned by Pluto
volumes) expire in 2017, Woodside will
continue to target spot exposure of less
than 10% of its total expected production
including targeting flexibility to choose
between spot and term pricing for some
volumes. Woodside is currently discussing
options for roll-over and replacement of its
mid-term contracts more than 12 months
in advance of expiry of those contracts.

Woodside’s acquisition of an interest in
the Wheatstone Project added further

LNG MARKETING UPDATE

high-quality LNG contracts with Japanese
buyers to our existing suite of committed
LNG.

The North West Shelf Project successfully
completed price review negotiations
with two key customers during 2015.
Woodside’s share of NWS LNG production,
subject to price review in 2016, equates to
approximately 1.3 mtpa. The NWS equity
lifting transitional arrangements put in
place in 2015 enabled Woodside to on-sell
four transitional cargoes during 2015 at a
premium to short-term market indexes.

Expanding trading and shipping
activities

Woodside demonstrated another
successful year in trading in 2015, with
focus continuing on building our trading
capability to support our existing projects.
This includes actively seeking optionality
and flexibility to enable optimisation of
Woodside’s current LNG portfolio, and
building relationships with buyers to
position for future portfolio volumes.

In general, Woodside sells LNG on a
delivered basis. As such, we have entered
into long-term shipping arrangements for
two approximately 174,000m3 ships, one
for delivery in 2016 and one for delivery
in 2017, taking advantage of the present
competitive shipping market in support
of further trading activities as well as
underpinning long-term supply from our
global portfolio.

Expanding portfolio of supply
options

Woodside has a competitive and
increasingly diversified LNG supply
portfolio to progress incremental sales
arrangements. Woodside’s customer value
propositions are backed by substantial
existing and future Australian supply,
US LNG, potential LNG from
West Coast Canada, and a proven track
record in LNG shipping and operations.

Historically, Woodside’s LNG capacity has
been launched based on foundation sales
into Japan, Korea and China. However,
to compete in the evolving global LNG
market, and aggregate sufficient long-
term sales to support Woodside’s growth
aspirations, a multi-market engagement
strategy is being implemented. This
strategy focuses on the substantial
recontracting demand from traditional
Asian LNG markets, LNG growth from
the emerging Asia-Pacific markets
and diversification opportunities into
Europe, Latin America and the Middle
East. Woodside’s portfolio supplies will
be sourced from its equity production,
committed purchases and short-term
trading opportunities.

WOODSIDE PETROLEUM LTD OPERATING AND FINANCIAL REVIEWOUR PEOPLE

Our Republic of Korea office supports our exploration interests in offshore Korea and our marketing and trading activities across Asia.

We continue to build a values-led, high-performance culture in support of our
vision to become a global leader in upstream oil and gas.

2015 Key performance highlights

Graduate recruitment

Indigenous employment outcomes

2.6 2.6

2.7

2.3

1
0
2 1
9

9
9

4
9

2.2

4
8

13 14 15

Indigenous employees
Percentage of workforce

The number of Indigenous employees
(permanent/fixed-term) remained stable
during 2015. Woodside continued supporting
Indigenous pathways, with 23 participants
successfully converting to Woodside
employment in 2015.

Increased engagement from 63% to
70% in the 2015 Employee Survey,
above the oil and gas industry
benchmark.

Delivered efficiency gains through

reshaping our organisation, reducing
organisational layers and improving our
managers’ spans of control.

Continued to attract high-quality

graduates at levels comparable to our
2015 graduate intake; 108 for 2016
compared to 103 for 2015.

Implemented a new international

secondment program to build capability
for global growth.

Future objectives

Implement the 2016 – 2020

Reconciliation Action Plan (RAP).

Develop and implement actions

which continue to build a values-led,
high-performing organisation.

Refine our approach to executive
development to strengthen our
succession plans.

Continue to implement the gender

diversity strategy.

3
0
1

9
5

8
0
1

5
5

1
7

7
3

1
5

5
3

6
4

3
2

6
1

3
2

4
3

4
4

3
5

13 14 15

Male
Female

Woodside has increased its graduate
intake, with a focus on sustaining a diverse
workforce. We recruited 108 graduates in
2015, up from 103 in 2014.

Number of full-time equivalents
(FTEs)

0
2
3

4
8
0
,
4

2
3
3

4
6
7
,
3

2
3
4
,
3

s
E
T
F

Positions as at January 2014
FTEs as at December 2014
Reductions achieved
FTEs as at December 2015

In 2015, FTEs reduced by 9%, a 20%
cumulative reduction since the end of 2013.

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD ANNUAL REPORT 2015Building culture and capability

Productivity progress

The results of our 2015 Employee Survey
indicated the progress made towards
strengthening our culture. The results
showed that we have a more engaged
and enabled workforce, and continued
strong commitment to Woodside’s values.
Our employees are experiencing good
collaboration within teams and strong
encouragement to innovate and improve
effectiveness.

Our productivity program aimed to improve
organisational efficiency by 10% to 20%
throughout 2014 and 2015. This has been
achieved through reduced organisational
layers, improved spans of control and
an 18% reduction in management roles.
Overall, we have achieved a
20% improvement in organisational
efficiency, and this will be maintained
throughout 2016.

Our Leadership and Management
Development framework provided
guidance to leaders on building capability
for leading people, results and growth.
We continued to embed the principles
of leader-led development, enabling our
current leaders to develop our future
leaders from within the business.

In 2015, we reduced spending on formal
education programs, in step with our cost
reduction initiatives. We are committed
to developing our people, focusing
on experience and relationship-based
learning, and providing in-house training
to ensure that we have the capability
required to sustain growth. In 2015,
913 employees participated in in-house
continuous improvement training. We
continue to offer cross-functional rotations
to provide experience-based development
for employees, increasing the number of
participants by 10% in 2015.

In 2015, 141 participants completed core
skills development through the Woodside
Production Academy. We continue to
achieve a high conversion to employment
rate, with 85% of the 29 trainees and
apprentices who completed their programs
securing employment.

Developing a diverse workforce

In 2015, we began a three-year strategy to
drive sustainable improvements in gender
diversity at all levels of the workforce.
Overall female representation slightly
increased to 28% in 2015, comparing
favourably with the average of 16%
women in the Australian resources sector1.

We continue to focus on driving
gender balance through our Graduate
Development Program intake and
apprenticeship and traineeship schemes.
In 2015, 49% of our graduate intake and
21% of our apprentice and trainee intake
were female. Woodside has taken action
to broaden the pool of future female talent
at school and university levels with eight
gender-specific scholarships awarded.

All employees, regardless of their
employment type, have access to the
same financial and non-financial benefits.
This was confirmed in the annual
remuneration review to ensure pay parity
between men and women on a salary line
and job level basis.

Voluntary turnover for women has fallen
from 8.7% in 2014 to 4.9% in 2015 and
is lower than the overall organisational
turnover of 5.7%. Throughout 2015, we
focused on women in mid-career and,
encouragingly, the turnover in this group
reduced to 3.1%.

1. Source: Workplace Gender Equality Agency 2015.

OUR PEOPLE

Following strong internal promotions and
improved retention, women now hold
13.8% of senior management roles and
12.8% of executive positions, exceeding
the annual target set in the three-year
strategy.

By the end of 2015, Woodside employed
94 Indigenous people, representing 2.7%
of Woodside’s workforce. Turnover of
Indigenous employees decreased from
14% in 2014 to 3.2% in 2015, and progress
has been made in developing a pipeline of
future Indigenous talent.

We have met or exceeded all targets for
our Pathways Programs. Our Pathways
Programs provide individuals with the
opportunity to develop the skills needed
for Woodside employment roles, such
as mechanical fitters, electrical and
instrumentation technicians, laboratory
technicians, logistics and operations
support, IT desktop support and business
administration. There are currently 28
participants in our Pathways Programs and
conversion of trainees and apprentices is at
83%. In 2015, we awarded ten additional
cadetships to increase the pool of talent
for Woodside’s Graduate Program intake.
A total of 23 scholarships were awarded,
comprising ten community scholarships
and 13 scholarships directly related to
Woodside’s future capability needs.

A new RAP has been designed and
approved for 2016 to 2020, continuing
Woodside’s investment in opportunities
for Indigenous people.

Outlook

In 2016, actions will be developed and
implemented to maintain momentum in
building a values-led, high-performing
organisation. We will continue to
implement our strategy to develop and
promote from within, focusing on entry
level hiring and sustaining our industry-
leading Graduate Development Program.

Further information can be found in the
Corporate Governance Statement 2015,
available on our website.

Karratha Gas Plant
process plant
operator
and Production
Academy graduate
Sandra Van Der
Gaag was named
Australia’s 2015
Trainee of the Year.

WOODSIDE PETROLEUM LTD OPERATING AND FINANCIAL REVIEWHEALTH, SAFETY, SECURITY AND
EMERGENCY MANAGEMENT

In 2015, we were awarded two APPEA Health and Safety Awards in
recognition of our outstanding performance in the industry.

2015 Key performance highlights

Recorded a 10% improvement in total

recordable injury rate.

Improve and embed process safety
through a focus on people, plant and
processes.

Awarded two Australian Petroleum

Tier 2 process safety events (PSEs)

Production and Exploration Association
(APPEA) Health and Safety Awards
for the novel use of remote digital
video inspection during the Pluto LNG
turnaround.

Joined the Voluntary Principles on

Security and Human Rights Association
and commenced a program to
implement the principles across the
business.

Rated amongst the highest in our peer
group for our Fraud and Corruption
Control Program.

Recorded no Tier 1 process safety

events.

Future objectives

Progress towards achieving global

top-quartile health and safety
performance in 2017.

Focus on human factors, and excellence
in leadership to continually improve our
health and safety culture.

Improve leading indicators for health

risk management and support personal
wellbeing programs that focus on
occupational factors and mental health.

e
m

i
t

t
s
o
L

Increase emergency management and
response competencies across the
organisation to ensure high levels of
prevention, preparedness and response.

In 2012, Woodside
commenced classifying
PSEs in accordance with
American Petroleum Institute
Recommended Practice
754, to enable global
benchmarking.

12 13 14 15

A typical Tier 1 PSE is loss of containment of hydrocarbons
greater than 500 kg (in any one-hour period).

Lost time injury and lost time
injury frequency (LTIF)

y
r
u
n

d
e
k
r
o
w
s
r
u
o
h
n
o

i
l
l
i

r
e
p
F
I
T
L

0.62

0.94

0.43

0.22

13 14 15

Total recordable injury rate (TRIR)
performance

d
e
k
r
o
w
s
r
u
o
h
n
o

i
l
l
i

r
e
p
R
R
T

11 12 13 14 15 16 17

Woodside (actual)
IOGP1 top-quartile (actual)
IOGP1 top-quartile (expected)

Our approach

In 2015, we completed a major project
to simplify and streamline our health,
safety and environment system processes
and procedures, making it easier for all
employees to understand and comply with
Woodside’s standards.

We continued to implement our strategic
health and safety roadmap, making
solid progress towards delivering on our
aspiration of global top-quartile health and
safety performance. Focus areas in 2015
included:

improving health risk assessment

processes and tools;

increasing emergency management

and response competencies across the

A typical Tier 2 PSE is loss of containment of hydrocarbons
greater than 50 kg but less than 500 kg (in any one-hour
period).

1. Woodside has benchmarked its TRIR against global

top-quartile performance of the International Association of
Oil and Gas Producers (IOGP).

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD ANNUAL REPORT 2015

organisation to ensure high levels of
prevention, preparedness and response;

improving the management of process

safety within our business; and

improving human factors awareness,

understanding and engagement.

2015 performance
We demonstrated strong performance in
health and safety throughout 2015.

There were no work-related fatalities, or
recordable injuries with the potential for
fatality. We recorded no Tier 1 process
safety events, but two Tier 2 events.

The number of recordable injuries
decreased by 8% and the total recordable
injury rate (TRIR), which measures the
number of recordable injuries per one
million hours worked, decreased by 10%
compared with 2014 performance.

The number of lost time injuries (LTIs)
increased from three in 2014 to six in
2015. None of the injuries had the potential
to result in a fatality or permanent total
disability.

We were awarded two APPEA health
and safety awards in September,
demonstrating industry and peer
recognition for our performance and
delivery of continuous improvement in
health and safety initiatives.

Key initiatives delivered

Human factors

We delivered a program to support our
objectives in human factors. We focused
on four strategic areas: setting people up to
succeed through good design; guidelines
that focus on human reliability on critical
tasks; improvements on how we consider
human factors in our investigations, and
supporting materials for Woodside’s Our
Safety Culture framework.

Process safety

Process safety is our disciplined
framework for managing the integrity
of systems and processes that handle
hazardous substances over the exploration
and production life cycle. It relies on good
design principles and good engineering,
operating and maintenance practices.

We continue to execute a major project
to improve the delivery of process safety
management requirements. The project
centres on the development of a new
set of minimum requirements to ensure
that wherever we operate, we apply
a standardised approach to managing
process safety.

Health and wellbeing

We delivered our health and wellbeing
activities, complying with health
regulations and licence to operate

HEALTH, SAFETY, SECURITY AND EMERGENCY MANAGEMENT

obligations, as well as maintaining and
monitoring fitness for work of all staff and
contractors. In 2015, we strengthened
occupational health through the revision
of the health risk assessments and
implementation of an integrated platform
to allow easier recording, monitoring and
reporting of programs and results. We
continue to provide a suite of programs
that support employee personal wellbeing.

Stand Together for Safety

Woodside’s annual Stand Together for
Safety week was marked with a number
of company-wide activities around the
theme ‘working together we keep each
other safe: building the connection’. The
campaign focused on visible leadership
from everyone at Woodside, where
all employees were encouraged to
demonstrate a commitment to Woodside’s
health and safety goals, increase their
awareness of the processes and tools
and participate in activities that build
relationships within and between teams.

Security and emergency
management
In a dynamic domestic and international
security environment, Woodside’s security
and emergency management team
worked to ensure that the company’s
people, assets and operations globally
remain protected from existing and
emerging security threats. In response
to Woodside’s global growth initiatives,
Woodside joined the Voluntary Principles
on Security and Human Rights Association
and commenced a program to implement
the principles across the business.

To complement the existing emergency
and crisis management framework, a
new oil spill preparedness capability was
established in 2015, enabling continuous
improvements of Woodside’s oil spill
preparedness capabilities both in Australia
and internationally. The overall emergency
preparedness framework includes an
extensive training and exercise program to
ensure that Woodside is able to respond to
and is resilient to foreseen and unforeseen
events on a global level.

Woodside’s Fraud and Corruption Control
Program was maintained, and further
improvements made, including an increase
in the number of third-party audits and
refinements to the due diligence process
for new opportunities in locations including
Myanmar and East and West Africa.
Woodside’s Fraud and Corruption Control
Program was rated among the highest in
its peers by the Dow Jones Sustainability
Index.

Outlook
In 2016, we will continue to embed the
key elements of our health and safety
strategy, including leadership and
engagement, process safety, contractor
management and health and wellbeing, in
order to consistently deliver outstanding
health and safety performance in all areas
of our business.

Additionally, we will apply continuous
improvement initiatives to protect
Woodside’s people and assets in all
national and international locations
as we progress to global top-quartile
performance in 2017.

CASE STUDY
Adapting technology to
eliminate high-risk activities
Planning for the Pluto turnaround in 2015
identified a large number of pressure
vessels needing internal inspection
to ensure that they conformed to
Woodside’s performance standard and
complied with State and Commonwealth
regulations. Fifty vessels were expected
to require manned confined space
entries, a recognised high-risk oil and
gas industry activity.

The use of remote digital video
inspection (RDVI) alongside
non-intrusive inspection (NII) techniques
was recommended to internally inspect
pressure vessels. RDVI had been
previously trialled by Woodside for
one-off inspections.

RDVI uses robotics and cameras
to deliver clear and concise visual
inspection data and eliminates the
need for confined space entry. NII uses
ultrasonic testing, liquid penetrant and
radiography techniques conducted

from outside a vessel without breaking
containment or requiring vessel entry.

Using RDVI, coupled with NII, during
a major facility turnaround, was a step
forward in reducing the number of
manned entries to check the condition of
pressure containing equipment, essential
to maintaining asset integrity and
minimising process safety risk.

The initiative removed the need for 36
manned confined space entries, reduced
inspection activities by four days, cut
up to ten days from the typical 35-day
turnaround saving approximately
A$4.5 million.

This innovative RDVI and NII process to
internally inspect pressure equipment
has been integrated into Woodside’s
engineering standards for future
inspections of this type.

The initiative was recognised by
industry through receipt of the 2015
APPEA Health and Safety Award and
also of the Delegates’ Choice Award for
Health and Safety.

WOODSIDE PETROLEUM LTD OPERATING AND FINANCIAL REVIEWENVIRONMENT
Woodside’s future success depends on our continued capacity to
demonstrate strong environmental performance across our global portfolio.

2015 Key performance highlights

Our approach

Woodside’s approach to environmental
management is outlined in our Health,
Safety, Environment and Quality Policy and
the mandatory environmental operating
standards that apply to all facilities and
operations. We continue to manage
environment risk and make decisions
based on robust science delivered in part
through our partnerships with researchers
and stakeholders. We remain focused on
environmental excellence wherever we
operate, supported by visible leadership in
environmental management.

Environmental performance

During 2015, we achieved an 8% reduction
in flared gas intensity and recorded
a 2% increase in total greenhouse
gas emissions. We had no significant
environmental incidents.

Environmental excellence

In 2015, Woodside was awarded the
Annual APPEA Conference Environment
Excellence Award for our overall approach
to environmental management. The
award demonstrates industry and peer
recognition of our consistent approach
to strategic environmental planning,
leadership and culture, risk management,
science-based decision making and
community engagement. Woodside also
won the annual APPEA Health Safety and
Environment Conference Environment
Delegates’ Choice Award, held in Perth for
our work associated with avoiding marine
biofouling.

Global biodiversity

Environmental collaboration, partnerships
and transparency are key to our future
success. In 2015, we partnered with
some of the world’s leading environmental

Reduced flaring intensity by 8%

attributable to continuous improvement
initiatives and high reliability in facility
operation.

Awarded the Australian Petroleum

Production and Exploration Association
(APPEA) Environment Excellence Award.

Commenced our largest field-based
produced water and sedimentation
study adjacent to three offshore
facilities.

Future objectives

Deliver global top-quartile environmental
performance to support our Australian
and global activities.

Improve energy and flare efficiency to
reduce greenhouse gas emissions.

Partner with leading international

environment organisations to improve
understanding of new environments.

Embrace technology developments and
increase transparency in scientific data
collection.

Embed a high-performance

environmental culture for all employees
and contractors.

Flared gas and intensity1

14.2

10.0

9.2

8.0

7.5

6
4
2

7
1
2

1
2
4

0
5
3

5
1
3

9
7

5
6

9
2
1

3
7
1

7
6
1

Total gas flared for operated ventures (kilotonnes)

Woodside equity portion of flaring (kilotonnes)

Intensity flared gas
(tonne/kilotonnes hydrocarbon production)

1. Excludes commissioning.

The intensity of flared gas in 2015 showed
a decline from the peak in 2013 due to
improved plant performance.

organisations to better understand the
global environments where we have
interests. This includes formalising
relationships with the World Oceans
Council and Fauna and Flora International.

During 2015, extensive environment
studies and approvals were undertaken
to support our activities in Australia,
Korea, Myanmar, Canada, Ireland and
Morocco. This included finalising a study
to understand the seasonality of cetacean
visitation to the offshore waters of Ireland
to assist the Irish Government’s strategic
environmental assessment of offshore
waters.

Climate change

We accept the Intergovernmental Panel on
Climate Change’s assessment of climate
change science and believe that natural
gas has a major role to play in containing
global average temperatures. Achieving
this requires stable regulatory frameworks
capable of achieving current and future
emissions reduction targets.

Outlook

In 2016, we will continue to minimise our
impacts on land, sea, air and wildlife with
a focus on improving energy and flare
efficiency to reduce greenhouse
gas emissions.

Woodside will expand our partnerships
with leading scientific organisations
to collect robust science to support
the management of environment risks
associated with our activities and position
ourselves as a partner of choice across our
growing global portfolio.

Further information on environmental
management will be available in our
Sustainable Development Report 2015.

Woodside’s
Environment
team accepts
the 2015 APPEA
HSE Conference
Environment
Delegates’ Choice
Award.

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD ANNUAL REPORT 2015OVERVIEW

OPERATING AND
FINANCIAL REVIEW

GOVERNANCE

FINANCIAL
REPORT

SHAREHOLDER
INFORMATION

COMMUNITIES

2015 Key performance highlights

Contributed A$13.9 million worth
of social investment to our host
communities, equating to 0.5% of a
three-year averaged profit before tax
from 2013 to 2015.

Contributed A$2 million towards eight
early childhood development initiatives
through the Woodside Development
Fund, including our first international
initiative in Myanmar.

Achieved 68 of the 82 measurable goals
in our 2011–2015 Reconciliation Action
Plan (RAP), with results exceeding
expectations for 11 of these.

Exceeded our RAP target, signing

163 new contracts with Indigenous
businesses, against a target of 50.

Future objectives

Continue to engage with a broad range
of stakeholders to understand their
interests and concerns.

Implement a 2016 sustainable social

contribution strategy to support
business and community outcomes.

Maintain and report on outcomes
achieved through the Woodside
Development Fund.

Implement 2016–2020 RAP to support
business and Indigenous community
outcomes.

Early childhood development in Myanmar is the focus of the first international contribution of
Woodside’s A$20 million Development Fund.

The Woodside Compass values, our Code
of Conduct and our policies provide the
framework that supports us in carrying out
our business activities in a manner that
respects human rights.

Our philanthropic contribution was
primarily through the donation of almost
6,300 hours of our employees’ time to
corporate volunteering valued at
A$1.2 million.

We build long-lasting relationships with
Indigenous communities in which we are
active. We demonstrate respect and act
with integrity as we generate positive
economic, social and cultural outcomes.

In Australia, we maintain relationships
with Aboriginal communities in the Pilbara,
Kimberley and South West regions.
Our 2016 - 2020 RAP will outline our
commitment to increasing the participation
and development of Indigenous
employees and is supported by our three-
year Indigenous Employment Strategy.

Our social contribution strategy focuses
on developing capacity and capability in
local host communities through long-term,
strategic investment in the communities
where we operate. Our funding focus
areas are applied globally, aligning with
stakeholder interests, and support our
core business objectives for exploration,
developments and operations.

Woodside Development Fund

In 2015, we maintained our commitment
to early childhood development through
the Woodside Development Fund.
The fund supported eight major initiatives,
including two place-based collaborative
initiatives. Over 50 Western Australian
communities will benefit from our
investment and a further 14 Australia-wide
communities will benefit from leveraged
funding.

We also made our first international
contribution through the fund.
In collaboration with Save the Children,
Plan International and Pann Pyo Lett
through the Myanmar Education
Consortium, the fund is supporting the
delivery of parenting and early childhood
education programs for around
700 children aged zero to eight years
in ten villages in the Ayerwaddy Region
in south-west Myanmar.

Outlook

In 2016, we will implement our
revised RAP and our sustainable social
contribution strategy which reflect and
align with business activities, impacts and
stakeholder interests and concerns.

Further information is available in Woodside’s
Sustainable Development Report 2015.

Our approach

Our performance

For us, working sustainably is about doing
what’s right, so that we can perform to
our very best. It is a core value embedded
at every level of our company, across our
value chain and wherever we work.

Our ability to respond to the issues and
concerns of the communities where we
operate is important. For us this means
doing the right thing by our people,
partners and broader society and keeping
them safe and healthy.

As a member of the London Benchmarking
Group, we use its methodology to track,
measure, benchmark and report on our
social contribution performance.

In 2015, we contributed A$13.9 million
through voluntary social contribution
towards a combination of strategic
partnerships (74%), the Woodside
Development Fund (14%) and philanthropic
activities (12%).

WOODSIDE PETROLEUM LTD OPERATING AND FINANCIAL REVIEWTECHNOLOGY AND INNOVATION

Innovation and our ability to apply leading-edge science and technology in
our operations are important differentiators. By innovating, we have
maintained our position as a leader in the Australian oil and gas industry.

2015 Key performance highlights

Future objectives

Our approach

Established a dedicated science team

Continue to build capability in data

focusing on data science.

Introduced a cognitive computing

system.

Built a predictive analytics platform for

maintenance and process control.

Qualified the Near Shore LNG concept
and low-cost drilling techniques, ready
for deployment in our business.

Deployed 3D Full Waveform Inversion
on two data sets from exploration
seismic surveys.

Launched Woodside FutureLab to help

drive collaborative innovation.

science including internal talent, a data
science platform and relevant external
partnerships.

Deploy data science technologies
in production facilities and extend
its application to other areas of our
value chain.

Woodside’s commitment to innovation
aligns with our core values of excellence
and working sustainably, and our goal of
achieving world-class reliability and safety
of our producing assets.

Our technology strategy is focused on
competitive advantage through innovative
solutions to business problems.

Enhance competitiveness through

innovation, enabling resource
development, reducing unit technical
costs and development duration and
increasing production.

In exploration, we are focused on
progressing seismic and drilling technology
solutions to reduce costs and improve the
timeliness and accuracy of subsurface
modelling.

Consider technologies that could disrupt
Woodside’s value chain and how they
might be leveraged for advantage.

In the second half of 2015, we deployed
the 3D version of Full Waveform Inversion
(FWI). This technology was successfully
used in Myanmar 3D seismic surveys,
both for shallow hazards analysis and
for pore pressure prediction. 3D FWI
has the potential to reduce cycle time
from acquisition to drilling, creating value
through reduced costs and improved
efficiencies. We’ll continue to refine and
evolve this technology to seek greater
efficiencies in 2016.

By focusing on scope elimination, we
continue to find opportunities to reduce
upstream capital and operation costs
for drilling developments and projects.

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD ANNUAL REPORT 2015Subsea technologies reduce the
requirement for large infrastructure such as
manned offshore platforms, allowing us to
safely and economically develop fields in
remote, deep water locations. Throughout
2015, we matured work on electrical
subsea systems and subsea processing
options for long subsea tiebacks to remote
facilities.

We continued leveraging more than
30 years of development and operational
experience, to progress the development
of innovative onshore and near shore
LNG design solutions to lower the cost
of LNG supply.

In 2015, we established a science team
dedicated to pursuing opportunities in the
emerging field of data science.

We are using advanced analytics in our
Pluto LNG Plant with the aim of enhancing
plant reliability through process and
maintenance control. Big data, streaming
from over 200,000 sensors on the plant,
is being interpreted through advanced
statistical analysis to assist in proactive
planning and predictive process control.
These production enhancement initiatives
are designed to increase the value of our
base business by enhancing the availability
and productivity of our assets.

In June, we deployed a cognitive
computing system into our business
focusing on capturing the vast proprietary
database of knowledge on Woodside’s
major capital projects.

By making this information easily
accessible to our people through this
system, there is potential to enhance
decision making across the project
life cycle and improve productivity.
In 2016, we will extend this technology to
our Exploration and Marketing divisions.

Woodside FutureLab

FutureLab is actively building an
ecosystem of scientific and technological
innovation through collaborations
with research institutions, start-ups,
entrepreneurs and adjacent leading
industries.

FutureLab is designed to deliver
collaborative innovation through key
partnerships initially under three broad
themes: ocean engineering, Plant of the
Future and enterprise analytics.

In 2015, we launched programs to
collectively share challenges and develop
innovative solutions within the enterprise
analytics work stream, including the Cisco
Internet of Everything Innovation Centre
(CIIC) at Curtin University.

In 2016, we will launch innovation centres
with the University of Western Australia
and Monash University focused on our
ocean engineering and Plant of the Future
work streams respectively.

FutureLab is an integral part of our journey,
encouraging a collaborative approach
to innovation and providing access to
capability that will enhance the results of
our innovation program.

TECHNOLOGY AND INNOVATION

Outlook

In 2016, our technology and innovation
program will continue to focus on reducing
our cost of supply. We will leverage our
work on reducing exploration drilling costs
into development drilling. Our work on long
subsea tiebacks to remote facilities will be
matured and we will continue to consider
novel approaches to reducing the capital
costs of our LNG facilities.

We will continue to develop predictive
analytics tools and cognitive systems
to capture the knowledge of the
organisation and use this knowledge for
better and more timely decisions. We
will continue to invest in the capability of
our people to innovate and collaborate
with established technology providers on
early adoption and practical application.

The CIIC is an
innovative space to
collaborate and to
connect leading talent
under the FutureLab
enterprise analytics
work stream.

WOODSIDE PETROLEUM LTD OPERATING AND FINANCIAL REVIEWRESERVES AND RESOURCE STATEMENT

Increased Developed reserves by

Net acquisitions and divestments

Reserves at 31 December 2014
Revision of previous estimates19

Transfer to/from reserves
Extensions and discoveries20

Acquisitions and divestments

Discovered 68 MMboe of net Contingent

Annual production

Developed and
Undeveloped reserves
additions of 193.9 MMboe
(Proved) and 264.8 MMboe
(Proved and Probable),
replacing more than 200%
of production for 2015.

2015 Key performance highlights

Acquired 193.7 MMboe of Proved

Developed and Undeveloped reserves,
increasing resource base by 10% post
2015 annual production.

Extended Proved and Probable (2P)

Developed and Undeveloped reserves
life to 16 years.

19.1MMboe (Proved) and 25.3 MMboe
(Proved plus Probable) with the start-up
of the Goodwyn (GHA/B) and Vincent
Phase IV projects.

Increased our best estimate Contingent
resource by 152%, primarily driven by
the 15 Tcf acquisition of unconventional
gas resources in the Liard and Horn
River Basins within Canada.

resources for Pluto with the Pyxis-1
exploration well.

Proved reserves*

d
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Proved Developed and Undeveloped reserves
increased by 101.9 MMboe due to acquisitions
and positive annual reserves revisions offsetting
production and volumes transferred from reserves.

Proved plus Probable reserves*

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13
Proved plus Probable Developed and
Undeveloped reserves increased by
169.5 MMboe due to acquisitions and positive
annual reserves revisions offsetting production
and volumes transferred from reserves.

Woodside’s reserves1,2,3,4 and contingent resources5 overview*

Dry gas6
Bcf8

Condensate7
MMbbl9

Oil
MMbbl

Proved11 Developed12 and Undeveloped13

Proved Developed

Proved Undeveloped
Proved plus Probable14 Developed and Undeveloped
Proved plus Probable Developed

Proved plus Probable Undeveloped

Contingent resources

Key metrics

5,827.9
2,517.6

3,310.3
7,591.1
3,349.8

4,241.3

23,106.2

2015 reserves replacement ratio15
Organic 2015 reserves replacement ratio16

Three-year reserves replacement ratio

Organic three-year reserves replacement ratio
Reserves life17
Annual production18

Total
MMboe10

1,150.1
506.0

644.1
1,508.0
683.9

824.1

22.4
22.4

0.0
42.6
42.6

0.0

106.5

4,398.1

Proved

206

Proved plus
Probable
276

(4)

96.1

193.9

96.1

264.8

105.3
41.9

63.4
133.5
53.6

79.9

237.8

Years

MMboe

Proved (1P) Developed and Undeveloped reserves annual reconciliation
by product*

Dry gas
Bcf
5,263.3

Condensate
MMbbl
94.9

Oil
MMbbl
30.0

Total
MMboe
1,048.3

5.7

(0.1)

0.0

990.9

432.0

1.0

0.0

17.4

8.0

3.7

(1.6)

0.0

2.6

12.4

22.4

5.7

(1.6)

0.0

193.9

96.1

1,150.1

Reserves at 31 December 2015

5,827.9

105.3

Proved plus Probable (2P) Developed and Undeveloped reserves annual
reconciliation by product*

Reserves at 31 December 2014

Revision of previous estimates

Transfer to/from reserves

Extensions and discoveries

Acquisitions and divestments

Annual production

Reserves at 31 December 2015

Dry gas
Bcf
6,653.6

Condensate
MMbbl
117.1

Oil
MMbbl
54.1

Total
MMboe
1,338.5

14.3

(0.1)

0.0

1,355.9

432.0

7,591.7

0.9

0.0

23.5

8.0

133.5

(0.3)

(2.2)

0.0

3.4

12.4

42.5

3.1

(2.2)

0.0

264.8

96.1

1,508.0

Contingent resources at 31 December 2014

Transfer to/from reserves

Revision of previous estimates

Extensions and discoveries

Acquisitions and divestments

Contingent resources at 31 December 2015

Dry gas
Bcf
7,766.9

Condensate
MMbbl
235.6

0.1

32.1

366.1

14,941.0

23,106.2

0.0

0.6

3.5

(1.9)

237.8

Oil
MMbbl
144.6

2.2

(40.4)

0.0

0.1

Total
MMboe
1,742.9

2.2

(34.2)

67.7

2,619.5

106.5

4,398.1

Proved (1P) Developed and Undeveloped reserves summary by region*
Total
MMboe
573.0

Condensate
MMbbl
46.4

Dry gas
Bcf
3,001.4

Oil
MMbbl
0.0

Region

Greater Pluto21
North West Shelf22
Greater Exmouth23
Other Australia24
Wheatstone25
Canada26

1,836.8

0.0

968.0

21.7

41.5

0.0

17.4

0.0

10.1

11.9

0.5

0.0

373.8

11.9

0.5

187.2

3.8

Reserves

5,827.9

105.3

22.4

1,150.1

*Small differences are due to rounding.

Refer to page 40 for notes to the reserves and resource statement.

14 15

Best estimate Contingent resources (2C) annual reconciliation by product*

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD ANNUAL REPORT 2015

Proved (1P) Developed reserves summary by region*

Region

Greater Pluto27
North West Shelf
Greater Exmouth
Other Australia
Wheatstone
Canada
Reserves

Dry gas
Bcf
1,186.3
1,309.5
0.0
0.0
0.0
21.7
2,517.6

Condensate
MMbbl
15.8
26.1
0.0
0.0
0.0
0.0
41.9

Region

Proved (1P) Undeveloped reserves summary by region*
Condensate
MMbbl
30.6
15.3
0.0
0.0
17.4
0.0
63.4

Greater Pluto
North West Shelf
Greater Exmouth
Other Australia
Wheatstone
Canada
Reserves

Dry gas
Bcf
1,815.1
527.2
0.0
0.0
968.0
0.0
3,310.3

Oil
MMbbl
0.0
10.1
11.9
0.5
0.0
0.0
22.4

Oil
MMbbl
0.0
0.0
0.0
0.0
0.0
0.0
0.0

Proved plus Probable (2P) Developed and Undeveloped reserves
summary by region*

Region

Greater Pluto
North West Shelf
Greater Exmouth
Other Australia
Wheatstone
Canada
Reserves

Dry gas
Bcf
4,216.4
2,020.7
0.0
0.0
1,309.1
45.5
7,591.7

Condensate
MMbbl
63.0
47.0
0.0
0.0
23.5
0.0
133.5

Oil
MMbbl
0.0
14.9
27.2
0.5
0.0
0.0
42.6

Proved plus Probable (2P) Developed reserves summary by region*

Region

Greater Pluto
North West Shelf
Greater Exmouth
Other Australia
Wheatstone
Canada
Reserves

Dry gas
Bcf
1,893.0
1,411.2
0.0
0.0
0.0
45.6
3,349.8

Condensate
MMbbl
24.9
28.7
0.0
0.0
0.0
0.0
53.6

Oil
MMbbl
0.0
14.9
27.2
0.5
0.0
0.0
42.6

Total
MMboe
223.9
266.0
11.9
0.5
0.0
3.8
506.0

Total
MMboe
349.1
107.8
0.0
0.0
187.2
0.0
644.1

Total
MMboe
802.7
416.4
27.2
0.5
253.2
8.0
1,508.0

Total
MMboe
357.0
291.2
27.2
0.5
0.0
8.0
683.9

Proved plus Probable (2P) Undeveloped reserves summary by region*

Region

Greater Pluto
North West Shelf
Greater Exmouth
Other Australia
Wheatstone
Canada
Reserves

Dry gas
Bcf
2,323.4
609.5
0.0
0.0
1,309.1
0.0
4,242.0

Condensate
MMbbl
38.2
18.3
0.0
0.0
23.5
0.0
79.9

Oil
MMbbl
0.0
0.0
0.0
0.0
0.0
0.0
0.0

Region

Best estimate Contingent resources (2C) summary by region*
Oil
MMbbl
0.0
0.0
0.0
79.9
15.1
11.5
0.0
0.0
106.5

Greater Browse28
Greater Sunrise29
Greater Pluto
Greater Exmouth
North West Shelf
Other Australia
Wheatstone
Canada
Total

Condensate
MMbbl
142.6
75.6
11.9
2.1
4.9
0.5
0.3
0.0
237.8

Dry gas
Bcf
4,881.0
1,716.8
949.2
307.4
168.8
65.5
17.5
15,000.0
23,106.2

Total
MMboe
445.8
125.2
0.0
0.0
253.2
0.0
824.1

Total
MMboe
998.9
376.7
178.5
135.8
49.6
23.5
3.4
2,631.6
4,398.1

*Small differences are due to rounding.

Refer to page 40 for notes to the reserves and resource statement.

RESERVES AND RESOURCES STATEMENT

Proved plus Probable reserves
(Developed and Undeveloped)

1,508
MMboe

12.7%

Developed
Greater Pluto Undeveloped
NWS Undeveloped
Wheatstone Undeveloped
Other Undeveloped

%
45
30
8
17
0

At year end of 2015, 45% of the Proved
plus Probable reserves were categorised
as Developed, down from 57% in 2014.

1P Reserves by region
(Developed and Undeveloped)

1,150.1
MMboe

9.7%

Greater Pluto
NWS
Greater Exmouth
Other Australia
Wheatstone
Canada

%
50
33
1
<1
16
<1

2P Reserves by region
(Developed and Undeveloped)

1,508
MMboe

12.7%

Greater Pluto
NWS
Greater Exmouth
Other Australia
Wheatstone
Canada

%
53
28
2
0
17
<1

2C Contingent resource
by region

4,398.1
MMboe

152%

Greater Browse
Greater Sunrise
Greater Pluto
Greater Exmouth
NWS
Other Australia
Wheatstone
Canada

%
23
9
4
3
1
<1
0
60

WOODSIDE PETROLEUM LTD OPERATING AND FINANCIAL REVIEWGovernance and assurance

Woodside, as an Australian company listed on the Australian
Securities Exchange, reports its petroleum resource estimates
using definitions and guidelines consistent with the 2007 Society
of Petroleum Engineers (SPE)/World Petroleum Council (WPC)/
American Association of Petroleum Geologists (AAPG)/Society
of Petroleum Evaluation Engineers (SPEE) Petroleum Resources
Management System (PRMS).

Woodside has several processes to provide assurance for
reserves reporting, including the Woodside Reserves Policy, the
Petroleum Resources Management Operating Standard, staff
training and minimum competency levels and external reserves
audits. On average, more than 99% of Woodside’s Proved
Reserves have been externally verified by independent review
over the past four years.

Unless otherwise stated, all petroleum resource estimates are
quoted as net Woodside share at standard oilfield conditions of
14.696 pounds per square inch (psi) (101.325 (kPa)) and
60 degrees Fahrenheit (15.56 degrees Celsius).

Qualified petroleum reserves and resources evaluator
statement

The Reserves and Resources Statement is based on and fairly
represents information and supporting documentation prepared
by qualified petroleum reserves and resources evaluators. The
Reserves and Resources Statement has been approved by
Mr Ian F Sylvester, Woodside’s Vice President of Reservoir
Management, who is a full-time employee of the company
and a member of the Society of Petroleum Engineers.
Mr Sylvester’s qualifications include a Master of Engineering
(Petroleum Engineering) from Imperial College, University of
London, England, and more than 20 years of relevant experience.
Mr Sylvester has consented in writing to the inclusion of this
information in this report.

Notes to the reserves and resource statement

‘Condensate’ is defined as ‘C5 plus’ petroleum components.

‘Revision of previous estimates’ are changes in previous
estimates of reserves or contingent resources, either up or
down, resulting from new information normally obtained from
development drilling and production history or resulting from
a change in economic factors.

‘Extensions and discoveries’ represent additions to reserves
or contingent resources that result from increased areal
extensions of previously discovered fields, discovery of
reserves in new fields or new reservoirs in old fields.

The ‘Greater Pluto’ region comprises the Pluto-Xena, Larsen,
Martell, Martin, Noblige, Remy, Alaric and Cadwallon fields.

The ‘North West Shelf’ (NWS) includes all oil and gas fields
within the North West Shelf Project Area. As the NWS
consists of a portfolio of fields, probabilistic aggregation is
more appropriate than arithmetic summation as inter-field
dependencies reflecting different reservoir characteristics
between fields are incorporated. Probabilistic aggregation
of individual fields in the NWS accounts for 14.3% of NWS
Proved (Developed and Undeveloped) dry gas reserves,
18.6% of NWS Proved (Developed and Undeveloped)
condensate reserves.

The ‘Greater Exmouth’ region comprises Vincent, Enfield,
Stybarrow-Eskdale, Greater Laverda, Cimatti, Ragnar and
Toro fields.

‘Other Australia’ comprises the Laminaria-Corallina and
Argus fields.

‘Wheatstone’ comprises the Julimar and Brunello fields.

‘Canada’ comprises unconventional resources in the Liard
and Horn River Basins.

27 Material concentrations of reserves in the Greater Pluto and

North West Shelf regions have remained undeveloped for
longer than 5 years from the date they were initially reported
as the incremental reserves are expected to be recovered
through future developments to meet long-term contractual
commitments. The incremental projects are included in the
company business plan, demonstrating the intent to proceed
with the developments.

‘Greater Browse’ comprises the Brecknock, Calliance
and Torosa fields. For the Browse FLNG development, the
reference point is defined as the outlet of the FLNG facility,
which means Contingent resources are reported excluding
the fuel and flare required for production and processing up to
the reference point.

‘Greater Sunrise’ comprises the Sunrise and Troubadour
fields.

‘Reserves’ are estimated quantities of petroleum that
have been demonstrated to be producible from known
accumulations in which the company has an interest from
a given date forward, at commercial rates, under presently
anticipated production methods, operating conditions, prices
and costs.

Assessment of the economic value of a project, in support of
a reserves classification, uses Woodside Portfolio Economic
Assumptions (PEAs). The PEAs are reviewed on an annual
basis or more often if required. The review is based on
historical data and forecast estimates for economic variables
such as product prices and exchange rates. The PEAs are
approved by the Woodside Board. Specific contractual
arrangements for individual projects are also taken into
account.

3 Woodside uses both deterministic and probabilistic methods
for estimation of petroleum resources at the field and project
levels. Unless otherwise stated, all petroleum estimates
reported at the company or region level are aggregated by
arithmetic summation by category. Note that the aggregated
Proved level may be a very conservative estimate due to the
portfolio effects of arithmetic summation.

4 Woodside reports reserves net of the fuel and flare required
for production, processing and transportation up to a
reference point. For offshore oil projects, the reference point
is defined at the outlet of the FPSO. For onshore LNG projects,
the reference point is defined as the inlet to the downstream
(onshore) processing facility. Downstream fuel and flare
represents 11.9% of Woodside’s Proved (Developed and
Undeveloped) reserves, and 11.8% of Proved plus Probable
(Developed and Undeveloped) reserves.

‘Contingent resources’ are those quantities of petroleum
estimated, as of a given date, to be potentially recoverable
from known accumulations, but the applied project(s) are not
yet considered mature enough for commercial development
due to one or more contingencies. Contingent resources may
include, for example, projects for which there are currently no
viable markets, or where commercial recovery is dependent
on technology under development, or where evaluation of the
accumulation is insufficient to clearly assess commerciality.
Woodside reports Contingent resources net of the fuel and
flare required for production, processing and transportation
up to a reference point and non-hydrocarbons not present
in sales products. Contingent resources estimates may not
always mature to reserves and do not necessarily represent
future reserves classifications. All Contingent resource
volumes are reported at the ‘Best Estimate’ (P50) confidence
level.

’Dry gas’ is defined as ‘C4 minus’ petroleum components
including non-hydrocarbons. These volumes include LPG
(propane and butane) resources. Dry gas reserves and
contingent resources include ‘C4 minus’ hydrocarbon
components and non-hydrocarbon volumes that are present
in sales product.

‘Bcf’ means Billions (109) of cubic feet of gas at standard
oilfield conditions of 14.696 psi (101.325 kPa) and 60 degrees
Fahrenheit (15.56 degrees Celsius).

‘MMbbl’ means millions (106) of barrels of oil and condensate
at standard oilfield conditions of 14.696 psi (101.325 kPa) and
60 degrees Fahrenheit (15.56 degrees Celsius).

‘MMboe’ means millions (106) of barrels of oil equivalent.
Consistent with international practice, dry gas volumes are
converted to oil equivalent volumes via a constant conversion
factor, which for Woodside is 5.7 Bcf of dry gas per 1 MMboe.
Volumes of oil and condensate are converted from MMbbl to
MMboe on a 1:1 ratio.

‘Proved reserves’ are those reserves which analysis of
geological and engineering data suggests, to a high degree
of certainty (90% confidence), are recoverable. There is
relatively little risk associated with these reserves.

‘Developed reserves’ are those reserves that are producible
through currently existing completions and installed facilities
for treatment, compression, transportation and delivery,
using existing operating methods and standards.

‘Undeveloped reserves’ are those reserves for which wells
and facilities have not been installed or executed but are
expected to be recovered through future investments.

‘Probable reserves’ are those reserves which analysis of
geological and engineering data suggests are more likely
than not to be recoverable. There is at least a 50% probability
that the quantities actually recovered will exceed the sum of
estimated Proved plus Probable reserves.

The ‘reserves replacement ratio’ is the reserves (Developed
and Undeveloped) change during the year, before the
deduction of production, divided by production during the
year. The ‘three-year reserves replacement ratio’ is the
reserves (developed and undeveloped) change over three
years, before the deduction of production for that period,
divided by production during the same period.

The ‘organic annual reserves replacement ratio’ is the
reserves (Developed and Undeveloped) change during the
year, before the deduction of production and adjustment for
acquisition and divestments, divided by production during the
year.

The ‘reserves’ life is the reserves (Developed and
Undeveloped) divided by production during the year.

‘Annual production’ is the volume of dry gas, condensate
and oil produced during the year and converted to ’MMboe’
for the specific purpose of reserves reconciliation and the
calculation of reserves replacement ratios. The ‘Reserves
and Resources Statement’ annual production differs from
production volumes reported in the company's annual and
quarterly reports due to differences between sales and
reserves product definitions, reserves reported gross of
downstream fuel and flare and the ‘MMboe’ conversion
factors applied.

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD ANNUAL REPORT 2015OVERVIEW

OPERATING AND
FINANCIAL REVIEW

GOVERNANCE

FINANCIAL
REPORT

SHAREHOLDER
INFORMATION

GROWTH

We maintained focus on organic and inorganic growth opportunities,
executing high-impact exploration activities and progressing significant
developments and new business opportunities.

We maintain a disciplined approach to investment decisions
with a mindset that oil prices could remain lower for longer.

GROWTH

ORGANIC1

INORGANIC2

GLOBAL
EXPLORATION

DEVELOPMENT

BUSINESS
DEVELOPMENT
OPPORTUNITIES

Block A-6

Gas discovery in the
Shwe Yee Htun-1 well

The discovery of gas and
reservoir quality rock
substantially de-risks
the petroleum system,
currently identified leads
in the block and our
adjacent acreage.

Appraise

FEED

Kitimat LNG

Greater Enfield

MoU

Sempra LNG

The Kitimat LNG Project
offers a ground-floor
entry position in one of
the most advanced LNG
opportunities in Western
Canada.

The Greater Enfield Joint
Venture participants
approved entry into the
front-end engineering
and design (FEED) phase.

Woodside entered
into a non-binding
Memorandum of
Understanding (MoU)
with Sempra LNG for a
potential development.

Read more on page 47.

1. Growth through exploration and development of existing assets held by Woodside.
2. Growth through the acquisition of assets.

WOODSIDE PETROLEUM LTD OPERATING AND FINANCIAL REVIEW

GLOBAL EXPLORATION
Exploration is focused on building a material balanced global portfolio to
provide future growth opportunities for the business.

2015 Key performance highlights
Discovered gas at Pyxis-1, offshore
Western Australia, resulting in the
addition of 68 MMboe of net Contingent
resources (2C) for Pluto.

Discovered gas at the Shwe Yee

Htun-1 exploration well in Block A-6
in the Rakhine Basin, located offshore
Myanmar. The discovery of gas and
reservoir quality rock substantially
de-risks the petroleum system, currently
identified leads in the block and our
adjacent acreage.

Drilled a further four wells worldwide,

with the Hongge-1 well in the Republic
of Korea confirming the presence
of a petroleum system, but a non-
commercial discovery.

in April 2015 and at Shwe Yee Htun-1, in
Block A-6 in Myanmar’s Rakhine Basin,
in December 2015. Sub-commercial
hydrocarbons were encountered in
exploration wells drilled in the Republic
of Korea (Hongge-1) and Cameroon
(Cheetah-1). The results will be integrated
into further reviews of permit prospectivity.

We maintained a disciplined approach
to new growth opportunities and to the
management of our existing portfolio by
applying rigorous financial and technical
criteria. In line with this approach, in early
2015, Woodside elected not to enter
the First Extension Period for the Lake
Tanganyika South Production Sharing
Contract (PSC) in Tanzania, meaning this
opportunity was not pursued.

Acquired 2,200 km2 of new marine

3D seismic data in New Zealand and
commenced 3D seismic data acquisition
in Myanmar.

We continued to enhance our global
exploration culture, capabilities and
technical excellence, further increasing
our international presence and profile.

Achieved a significant efficiency gain in
Myanmar through the deployment of a
record number (18) of streamers on the
PGS vessel Ramform Titan.

Acquired almost 1,630 line km of new
2D data in Morocco, Peru and Tanzania.

Future objectives
Drill up to three wells in 2016 (Thalin-1 in
Myanmar, Skippy Rock-1 and Stokes in
Australia) and commence preparations
for drilling up to six wells in 2017.
Conduct 3D and 2D marine seismic
surveys in Myanmar and 3D marine
seismic surveys in Ireland and Gabon.
Continue to pursue opportunities in our
focus areas that leverage our deepwater
skills and technology capabilities.
Continue our disciplined, technical

approach to growing our portfolio, in line
with our global exploration strategy.
Minimise the costs of our exploration
activities by taking advantage of the
lower oil price environment.

Exploration strategy in 2015
During 2015, we focused on maturing
our international captured acreage and
aggregating our positions across our three
focus areas: Australia and the Asia-Pacific,
the Atlantic Margins and Sub-Saharan
Africa. Our efforts built on the significant
progress we made in 2013 and 2014 in
rebalancing our global exploration portfolio,
in terms of basin maturity, geographic
focus and mix of oil and gas and leveraging
our deepwater and technology capabilities.

We carried out exploration activities across
our portfolio, making gas discoveries at
Pyxis-1, in the Pluto Production Licence,

We maintained a focus on delivering future
value creation for the business through
our strategy of building a material quality
portfolio and execution of exploration
activities.

The lower oil price environment also saw
us achieve significant cost savings and
efficiencies in our exploration activities,
including through reduced rates in
contracts for seismic vessels.

Australia
During 2015, we drilled three wells
offshore north-western Australia:
Pyxis-1 in the Pluto Production Licence
WA-34-L resulted in a gas discovery
and the addition of 68 MMboe of net
Contingent resources (2C);

Anhalt-1 in the Outer Canning basin

permit WA-462-P resulted in a dry hole;
and

Malaguti-1 in the Exmouth Sub-basin

permit WA-271-P resulted in a dry hole.

Preliminary data from the 4,058 km2 North
West Shelf Fortuna 3D marine seismic
survey was processed and interpretation
commenced. A number of new leads were
identified, and the existing portfolio was
screened based on these data. Final data
from the Fortuna survey was delivered
in January 2016 and interpretation is
underway to deliver drill candidates for
2017 drilling.

Portfolio management remained a key
focus in 2015, reflecting Woodside’s
disciplined approach. As a consequence
of our evaluation of low-remaining
prospectivity following seismic or drilling
activity, eight Australian exploration

permits were relinquished during the year.
A farm-out of our participating interest
from 100% to 60% was completed
for permit WA-483-P in the Northern
Carnarvon Basin, in order to preserve an
appropriate risk to equity balance.

Woodside retains an interest in
24 Australian exploration permits,
providing rights to explore 70,000 km2
of the North West Shelf.

Planning continues for the drilling of Skippy
Rock -1 and side track (Skippy Rock –
1ST1, also known as ‘Stokes Prospect’)
in 2016 in permit WA-472-P in the Beagle
Sub-basin. This well will test a new play
concept with an oil focus.

Cameroon
Woodside 30% (non-operator)

The Cheetah-1 exploration well drilled
in Q2 and Q3 2015 discovered sub-
commercial hydrocarbons. The joint
venture continues to integrate the
Cheetah-1 results into a review of the
prospectivity of the permit.

Canada (Nova Scotia)
Woodside 20% (non-operator)

Processing by the operator of the Tangiers
3D marine seismic survey is ongoing.
Numerous leads have been identified by
the operator in the preliminary seismic
data set. Subsequent to year end, the first
of the final products from the processing
were delivered in January 2016.

Gabon
Woodside 40% (non-operator)

The operator commenced planning for
a 2,500 km2 3D seismic survey that is
expected to start in Q1 2016.

Ireland
FEL 5/13 Woodside 90% (operator)
FEL 3/14 Woodside 85% (operator)
FEL 4/14 Woodside 85% (operator)
FEL 5/14 Woodside 60% (operator)

All existing 3D seismic surveys within
our licence areas in the Porcupine Basin
were reprocessed to improve data quality
and mature drilling candidates. A new 3D
seismic survey is planned for mid-2016 to
mature the 2D lead portfolio.

Several environmental studies were
completed, including a scientific survey of
cetacean behaviour in the Porcupine Basin
that provided new insights into whale
behaviour. Results will be used to manage
any future operations in the area.

BANGLADESH

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD ANNUAL REPORT 2015Morocco
Rabat Ultra Deep Offshore Reconnaissance
Licence Woodside 75% (operator)
Rabat Deep Offshore blocks I-VI Woodside
25% (non-operator)

In the Rabat Ultra Deep Offshore
Reconnaissance Licence, Woodside
acquired 1,074 km of 2D seismic data.
Subsequent to year end, processing of
the data was completed in January 2016.

Ministerial approval for entering the First
Renewal Period of the Reconnaissance
Licence was provided on 30 December
2015, with the licence now expiring
14 December 2016.

In the Rabat Deep Offshore blocks I-VI,
the operator is continuing geological and
geophysical studies following a successful
multi-beam sonar and geochemical coring
program.

Myanmar
A-6 Woodside 40% (joint operator)
AD-7 Woodside 40% (operator for drilling)
A-7 Woodside 45% (operator)
AD-5 Woodside 55% (operator)
A-4 Woodside 45% (non-operator)
AD-2 Woodside 45% (non-operator)

Gas was discovered at the Shwe Yee
Htun-1 exploration well in Block A-6 in the
Rakhine Basin, located offshore Myanmar.
The discovery of gas and reservoir quality
rock substantially de-risks currently
identified leads in the block.

On 4 January 2016, Woodside announced
that approximately 15 m of net gas
pay was interpreted within the primary
target interval. The net gas pay figure
increased to approximately 32 m following
completion of nuclear magnetic resonance
and resistivity image logging, formation
fluid sampling and pressure testing.

GROWTH – GLOBAL EXPLORATION

Reservoir studies will be undertaken to
evaluate the contingent resource volume
during 2016.

the permits will support the maturation of
existing leads towards a final prospectivity
assessment by the end of 2016.

The Thalin-1 well in Block AD-7
commenced drilling activities in
January 2016.

Extensive 2D and 3D seismic surveys
(including gravity and magnetic data
recording) over Blocks A-4, A-7, AD-2
and AD-5 commenced in late 2015 and
will continue into Q2 2016. Programs of
extensive seabed coring in Blocks A-4,
A-7, AD-2 and AD-5 are also planned to
commence in 2016.

Since the seismic acquisition commenced,
seismic operator PGS’ vessel Ramform
Titan has achieved a world record
for number of streamers towed (18).
Acquisition rates have been up to 160 km2
per day.

The AD-7 PSC was amended to provide
for the expansion of Block AD-7, adding
1,100 km2 (70%) to the Block’s area.
A 1,200 km2 3D survey will be acquired,
mainly in the expansion area, in early 2016.

New Zealand
Woodside 70% (operator)

During the first half of the year, Woodside
and joint venture participant New Zealand
Oil & Gas Limited completed the
1,170 km2 Toroa 3D marine seismic
survey in the Great South Basin (permit
PEP55974) and the 1,086 km2 Vulcan
3D marine seismic survey in the Taranaki
Basin (permit PEP55793).

Interpretation of the preliminary seismic
dataset occurred during 2H 2015.
Processing of the data is underway and
final products will be available in Q2
2016. Interpretation of the final data in

Peru
Woodside 35% (non-operator)

In Block 108, the operator acquired and
processed 527 km of new 2D seismic
data. Surface geology was mapped in
detail along each line, and gravity and
magnetic profiles were recorded. Initial
interpretation of the new data indicates
that leads and prospects can be matured
to drilling candidates. Environmental
approvals have been secured for a number
of potential drilling locations, with up to
two wells planned for 2017.

Republic of Korea
Woodside 50% (operator exploration)

In the Ulleung Basin Block 8/6-1N, the
Hongge-1 exploration well reached a
total depth of 3,900 m below the rotary
table. Drilling confirmed the presence
of a petroleum system with a significant
gas column within the primary target.
However, a high percentage of inert gas in
the hydrocarbon column has resulted in a
non-commercial discovery. Woodside will
continue to work closely with the Korea
National Oil Corporation to analyse the well
result and integrate with planned regional
studies.

Spain (Canary Islands)
Woodside 30% (non-operator)

Woodside continues to work with the joint
venture to determine the next steps in the
Canarias Permits 1-9.

Gas was discovered at the Shwe Yee Htun-1 exploration well in Block A-6 in the Rakhine Basin, located offshore Myanmar.

BANGLADESH

INDIA

CHINA

AD-7

LAOS

MYANMAR

AD-2

A-4

A-6

Shwe Yee Htun-1

AD-5

A-7

THAILAND

100

200

kilometres

VIETNAM

LEGEND

Gas

Oil

Woodside titles

Gas

Oil

WOODSIDE PETROLEUM LTD OPERATING AND FINANCIAL REVIEWDEVELOPMENT
Wheatstone
Woodside 13% (non-operator)
Woodside brings more than 30 years of project development and operational
experience to the world-class Wheatstone Project as a joint venture participant.

2015 Key performance highlights

Established an integrated Julimar Project

delivery team.

Continued installation of the Julimar and

Brunello subsea infrastructure.

Progressed key milestone activities for

the Wheatstone Project.

Future objectives

Achieve ready for start-up for the

Julimar Project in 2H 2016.

Achieve first LNG by mid-2017.

Development update

Woodside has interests in the
Wheatstone Project and the Julimar
Project (refer to Diagram A).

Woodside’s 13% non-operated interest
in the Wheatstone Project includes the
offshore platform, the pipeline to shore and
the onshore plant located near Onslow,
in Western Australia’s Pilbara region, but
excludes the Wheatstone and Iago fields
and subsea infrastructure.

The onshore plant includes a two-train
8.9 mtpa (100%) LNG development and
a 200 TJ per day domestic gas plant.
LNG and condensate will be exported,
and domestic gas will be transported via
pipeline to the Dampier Bunbury Natural
Gas Pipeline.

Woodside is operator of the Julimar
Project, with a 65% interest in the
Julimar and Brunello fields. The Julimar
Project is a subsea development that
will supply raw gas and condensate
from the fields, located approximately
180 km west-north-west of Dampier, to
the Wheatstone offshore platform. The
platform is 225 km from the onshore plant
site and within Commonwealth waters.

In 2015, an integrated Julimar Project
delivery team was formed to execute the
remaining subsea infrastructure installation
works. Woodside will commission and
operate the Julimar and Brunello gas and
condensate wells and flowlines.

In 2015, the Wheatstone Project
progressed key milestones, including
installation and connection of all subsea
infrastructure and flow lines and
commissioning of the offshore platform.

Marketing

The Julimar and Brunello fields will supply
approximately 20% of the Wheatstone
Project’s foundation capacity of natural
gas. The remaining 80% will be supplied
from the Chevron-operated Wheatstone
and Iago fields. Woodside has significantly
expanded our marketing portfolio, and
uncontracted volumes from our share of
production, when available, will form part
of our overall LNG equity portfolio. At least
15% of the quantity of LNG processed
from Woodside titles is committed to
domestic gas.

Diagram A:
Woodside's equity interests

Julimar Project1

Wheatstone Project2

Julimar Brunello fields –
Woodside 65%

Wheatstone
Iago fields –
Woodside 0%

20% gas supply3 to
Wheatstone Project

80% gas supply to
Wheatstone Project

Offshore platform – Woodside 13%

Offshore pipeline – Woodside 13%

Onshore plant – Woodside 13%

Products

LNG
Woodside
13%4

Pipeline gas
Woodside
13%4

Condensate
Woodside
13%4

All figures are approximate. Product percentage depends on
supply gas composition.

1. Operator: Woodside.
2. Shared facilities, Woodside non-operator.
3. Woodside’s 65% share of the Julimar Project’s 20%
gas supply equates to 13% of the gas supply to the
Wheatstone onshore plant.

4. Depends on supply gas composition.

Outlook

The Wheatstone Project is more than 65%
complete5, targeting first LNG in mid-2017.
The Julimar Project is more than 80%
complete and remains on target to achieve
start-up on budget and schedule in 2H 2016,
as committed to the Wheatstone Project.

5. Source: Chevron.

Wheatstone forecast6

December
2014
estimate

February
2016

estimate Variance

US$ m

2015

2016

2017

Total

1,018

~760

~80

1,8007

1,858

6. Includes the Julimar Project.

7. Average spend of $600 million per year from 2015 – 2017

as advised 16 December 2014.

All Train 1 process modules required for
first LNG have been delivered to the
Wheatstone LNG plant site. Image courtesy
of Chevron Australia.

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD ANNUAL REPORT 2015GROWTH – DEVELOPMENT

Greater Enfield
Woodside 60% (operator)
The proposed Greater Enfield Development entered the front-end engineering
and design (FEED) phase on 21 August 2015.

2015 Key performance highlights

Development update

Entered the FEED phase.

Commenced tendering activities for key

execute phase scopes of work.

Issued a preliminary Field Development

Plan (FDP) for regulatory review.

Executed in-field geophysical,

geotechnical and environmental survey
activities.

Future objectives

Target cost savings to enhance

development value and business case.

Submit a final FDP.

Target a final investment decision (FID)

in late 2016.

The potential development involves the
tieback of the Laverda and Cimatti oil
fields, through a 31 km flowline to the
Ngujima-Yin floating production storage
and offloading (FPSO) vessel.

The development is targeting gross (100%)
contingent resources (2C) of 70 MMboe
(net Woodside share of 42 MMboe) and is
located 50 km off the North West Cape in
Western Australia.

In 2015, studies focused on aggregating
Laverda and Cimatti oil fields, making
use of existing infrastructure. Following
completion of the concept select and
definition phases, the Greater Enfield Joint
Venture participants approved entry into
the FEED phase in August 2015.

Offshore geophysical and geotechnical
surveys were completed and will assist in
the FEED and detailed design activities.

An offshore environment survey was also
completed, the results of which will assist
in the preparation of the Environment Plan
in 2016.

The preliminary FDP was submitted to
the government regulatory authority, and
feedback received, during Q4.

2016 Outlook

In 2016, we will continue to progress
primary and secondary approvals, including
the submission of a Production Licence
application and a final FDP.

Our focus will remain on technical activities
and delivering targeted cost savings.

The Greater Enfield Development is
targeting an FID in late 2016.

Greater Western Flank Phase 2
Woodside 16.67% (operator)

2015 Key performance highlights

Completed the FEED phase.

Secured acceptance of the final FDP and production licences.

North West Shelf (NWS) Project participants approved the FID.

Future objectives

Award remaining major contract packages.

Continue manufacture and fabrication of project infrastructure.

Commence drilling.

Development update

In December, the NWS Project participants approved
the US$2.0 billion (100% project) Greater Western Flank
Phase 2 (GWF-2) Project, which will develop approximately
317 MMboe (100% project) from the combined Keast, Dockrell,
Sculptor, Rankin, Lady Nora and Pemberton fields using subsea
infrastructure and a 35 km, 16" pipeline connecting to the existing
Goodwyn A platform. Gas delivery will initially commence in
2H 2019 from five wells in the Lady Nora, Pemberton, Sculptor
and Rankin fields, followed by the remaining three wells in the
Keast and Dockrell fields in 1H 2020.

The GWF-2 Project is the fourth major gas development for the
NWS Project in the past seven years, demonstrating a continued
focus on maximising value from this world-class asset by
delivering sanctioned projects and developing reserves.

The GWF-2 Project continues a series of NWS Project subsea
tiebacks that are commercialising its gas reserves in a timely and
efficient manner to extend plateau production.

GWF-2 is an economically robust project that will deliver
significant value by applying Woodside’s substantial experience in
delivering major subsea tieback projects.

Our approach is to leverage Woodside scope and scale, both
locally and globally, to reduce costs, increase reliability and deliver
schedule predictability.

Standardising design and simplifying concept and execution
enables increased repeatability, allows for synergies with other
work scopes and helps to reduce risk and improve safety.

Working with potential suppliers throughout a disciplined and
rigorous FEED phase, the project delivered significant cost
reductions ahead of a final investment decision that supported
improved project economics.

2016 Outlook

In 2016, we will complete the transition to the execute phase
and award remaining major contract packages. Manufacture and
fabrication of key project infrastructure will continue, and the
project drilling campaign is expected to commence in 2016.
We will continue to work with key contractors to deliver targeted
cost savings.

WOODSIDE PETROLEUM LTD OPERATING AND FINANCIAL REVIEWFloating LNG provides a technically innovative solution to developing the
remote, offshore Browse resources. Image courtesy of Shell.

Browse FLNG
Woodside 30.6% (operator)
The Browse Joint Venture participants entered the front-end engineering
and design (FEED) phase on 30 June 2015. We are undertaking all of
the activities required to finalise the costs and technical definition for the
proposed development.

2015 Key performance highlights

Development update

Government approvals

Entered the FEED phase.

Agreed a Domestic Gas and Supply

Chain Key Principles Agreement (KPA)
with the State of Western Australia.

Granted Commonwealth and State

retention lease renewals.

Granted Commonwealth environmental

approval from the Minister for
Environment.

Future objectives

Deliver cost savings to enhance project

value and business case.

Complete the Browse Development
Agreement (BDA) based on the KPA.

Secure foundation LNG sales to support

a final investment decision (FID).

Submit Production Licence applications

and a final Field Development Plan
(FDP).

In July, the Commonwealth and State
Governments granted Browse retention
lease renewals for the Brecknock,
Calliance and Torosa fields until 2020
and agreed the Torosa Apportionment
Deed of Agreement.

In August, the Minister for Environment
granted Commonwealth environmental
approval under the Environment Protection
and Biodiversity Conservation Act 1999.

Marketing

Woodside’s Browse LNG and condensate
entitlements will be marketed on an equity
basis from Woodside’s global portfolio.
We continue discussions with a range
of regional LNG customers regarding
potential LNG sales.

Outlook

Woodside is targeting project cost
reductions that reflect current pricing and
LNG contracts that together deliver an
economically robust project.

Woodside, as operator of the proposed
Browse FLNG Development, is
progressing the use of floating liquefied
natural gas (FLNG) technology in
conjunction with a subsea development as
the development concept to commercialise
resources in the Browse Basin.

The Brecknock, Calliance and Torosa
fields – collectively known as the Browse
resources – are estimated to contain gross
(100%) Contingent resources (2C) of
16.0 Tcf of dry gas and 466 million barrels
of condensate. The Browse resources
are located approximately 425 kilometres
north of Broome in Western Australia.

Following completion of the basis of
design phase, the Browse Joint Venture
participants entered the FEED phase on
30 June 2015. During the FEED phase
we are undertaking all of the activities
required to finalise the costs and technical
definition for the proposed development.
Further work is being undertaken to
determine a range of details related to the
commercialisation, timing and sequencing
of FLNG deployment. FEED is the final
stage before an FID is considered.

Woodside’s participating interest in the
Browse resources is 30.6% (net Woodside
2C share of 4.9 Tcf of dry gas and
142.6 MMbbl of condensate).

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD ANNUAL REPORT 2015Kitimat LNG
Woodside 50% (non-operator)
The Kitimat LNG Project offers a ground-floor entry position in one of the
most advanced LNG opportunities in Western Canada.

GROWTH – DEVELOPMENTS

2015 Key performance highlights

Drilled four appraisal wells to the

planned target depth in the Liard Basin.

Completed two development scale

wells and brought them online.

Future objectives

Deliver earliest final investment decision
(FID), subject to success in the following
areas:

reserves certainty through continued

appraisal of the Liard Basin;

a cost-competitive LNG solution at the

Kitimat site;

First Nation, government and

community support;

competitive fiscal framework; and

sufficient LNG sales.

Development update
In April, Woodside acquired a 50% interest
in the proposed Kitimat LNG Project. The
project proposes to develop natural gas
resources found in shale and tight rock

The Liard and Horn River Basins cover
approximately 620,000 acres and hold
significant potential. Image courtesy of
Chevron Canada.

Sunrise LNG
Woodside 33.44% (operator)

The Greater Sunrise fields were discovered
in 1974 and hold gross (100%) Contingent
resources (2C) of 5.1 Tcf of gas and
225.9 million barrels of condensate (net
Woodside share of 1.7 Tcf of dry gas and
75.6 MMbbl of condensate). The fields are
located approximately 150 km south-east
of Timor-Leste and 450 km north-west of
Darwin, Australia.

In 2015, Woodside, as operator of
the Sunrise Joint Venture, maintained
compliance with its title obligations and
continued our social investment activities.

We remain committed to developing the
Greater Sunrise fields once government
alignment is established.

formations in the Liard and Horn River
Basins, covering approximately 620,000
acres (100% project), in north-eastern
British Columbia. Gas will be transported
via the proposed Pacific Trail Pipeline
to a liquefaction facility at Bish Cove
near Kitimat.

The project complements our existing
portfolio and adds to the geographic
diversity of our LNG business.

Approvals

All major provincial and federal
environmental approvals are in place,
including approval from the National
Energy Board to export up to 10 mtpa
of LNG (100% project).

Outlook

Woodside is focused on delivering a
globally competitive project that is aligned
with LNG market conditions.

In 2016, we will continue to appraise
the Liard Basin, with engineering and
design work focusing on generating a
cost-competitive LNG solution. Efforts to
secure sufficient LNG sales commitments
will continue.

Woodside will maintain its engagement
with First Nations and the community
to ensure appropriate support, and with
government to establish a competitive and
stable fiscal framework.

BUSINESS DEVELOPMENT
OPPORTUNITIES
Grassy Point LNG
Woodside continues to investigate the
potential of developing and operating
an LNG processing and export facility at
Grassy Point, on the north-west coast of
British Columbia, Canada.

In February 2015, Woodside was granted
a licence from the National Energy Board
to export up to 20 mtpa of natural gas from
the Grassy Point site for a period of up to
25 years.

Throughout 2015, we progressed the
pre-application Environmental Assessment
(EA) process required under the Sole
Proponent Agreement. This includes a
number of studies to understand potential
environmental sensitivities.

As part of the EA process, we are working
with First Nations, local, provincial and
federal government agencies and the
community to understand potential
environmental, social, economic, health
and heritage impacts.

Any decision to proceed with an LNG
development at Grassy Point remains
subject to a variety of approvals.

Sempra LNG
In June 2015, Woodside entered
into a non-binding Memorandum of
Understanding with Sempra LNG, an
affiliate of Sempra Energy, to commence
preliminary discussions and assessments
for the potential development of a natural
gas liquefaction facility at Port Arthur,
Texas.

The proposed Port Arthur Liquefaction
Project is located about 140 km east of
Houston. The potential project includes
two natural gas liquefaction trains with
a total export capability of approximately
10 mtpa. Any decision by Woodside to
proceed with a binding arrangement,
including the establishment of a joint
venture or partnership with Sempra LNG
in relation to the project, remains subject
to further due diligence and necessary
internal and external approvals.

WOODSIDE PETROLEUM LTD OPERATING AND FINANCIAL REVIEWGOVERNANCE – BOARD OF DIRECTORS

a) MICHAEL A CHANEY, AO
Chairman – BSc, MBA, Hon LLD (UWA), FAICD
Director since November 2005
Chairman since July 2007
Independent: Yes
Age: 65
Residence: Perth, Australia

Experience
22 years with Wesfarmers Limited,
including Managing Director and CEO from
1992 to 2005. Chairman of the National
Australia Bank Limited (2004 to December
2015). Three years with investment
bank Australian Industry Development
Corporation (1980 to 1983), and prior to
that eight years as a petroleum geologist
working on the North West Shelf and in
the USA and Indonesia. Previously a non-
executive dire ctor of BHP Billiton Limited
(19 95 to 2005) and BHP Billiton Plc (2001
to 2005).

Committee membership
Chair of the Nominations Committee.
Attends other Board committee meetings.

Current directorships/other interests
Chair: Wesfarmers Limited (director since
June 2015).

Director: The Centre for Independent
Studies Ltd (since 2000).

Chancellor: The University of Western
Australia (since 2006).

Member: Prime Minister's Business
Advisory Council (since 2013) and
Commonwealth Science Council (since
November 2014) and Australia-Germany
Advisory Group.

Directorships of other listed entities
within the past three years:
National Australia Bank Limited
(2004 to December 2015).

b) PETER J COLEMAN
CEO and Managing Director – BEng, MBA, FATSE
Director since May 2011
Independent: No
Age: 55
Residence: Perth, Australia

Experience
More than 30 years in the global oil and gas
business, including 27 years’ experience
with the ExxonMobil group, culminating
as Vice President Development Company,
with responsibility for leading development
and project work in Asia-Pacific region.
Appointed an Adjunct Professor in
Corporate Strategy by the University of
Western Australia in 2012.

Committee membership
Attends Board committee meetings.

Current directorships/other interests
Chair: Australia-Korea Foundation
(since December 2014) and the Federal
Government's Advisory Group on
Australia-Africa Relations (since 2015).

Member: The University of Western
Australia Business School Board (since
2011), Executive Committee of the
Australia Japan Business Co-operation
Council (since 2011), Australia-India Chief
Executive Officers’ Forum (since 2015) and
Australian Institute of Company Directors.

Adviser: Monash Industry Council.

c) MELINDA A CILENTO
BA, BEc (Hons), MEc
Director since December 2008
Independent: Yes
Age: 50
Residence: Melbourne, Australia

Experience
Significant public and private sector
experience in economic policy
development and analysis. Deputy Chief
Executive (2006 to 2010) and Chief
Economist (2002 to 2010) of the Business
Council of Australia. Previously worked
with County Investment Management
(now Invesco) as Head of Economics,
the Department of Treasury and the
International Monetary Fund.

Committee membership
Member of the Human Resources
& Compensation, Sustainability and
Nominations Committees.

Current directorships/other interests
Director: Australian Unity Limited
(since 2014).

Co-Chair: Reconciliation Australia
(Director since 2010) and NAB Advisory
Council on Corporate Responsibility
(member since 2013).

Commissioner (part-time): Productivity
Commission (since December 2014).

Member: Advisory Panel of the Australian
Scholarships Foundation and Australian
Securities and Investments Commission
External Advisory Panel (since 2013).

d) FRANK C COOPER, AO
BCom, FCA
Director since February 2013
Independent: Yes
Age: 60
Residence: Perth, Australia

Experience
More than 35 years' experience in
corporate tax, specialising in the
mining, energy and utilities sector,
including most recently as a partner of
PricewaterhouseCoopers. Director of
Alinta Infrastructure Limited and
Alinta Funds Management Limited
(2005 to 2006).

Committee membership
Chair of the Audit & Risk, Member of the
Human Resources & Compensation and
Nominations Committees.

Current directorships/other interests
Chair: Insurance Commission of Western
Australia, University of Western Australia
Strategic Resources Committee.

Director: St John of God Australia Limited
(since January 2015), South32 Limited
(since May 2015).

Member: Senate of the University of
Western Australia.

President: Western Australia division
of the Australian Institute of Company
Directors.

Trustee: St John of God Health Care
(since January 2015).

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD ANNUAL REPORT 2015BOARD OF DIRECTORS

e) CHRISTOPHER M HAYNES, OBE
FREng, CEng, FIMechE
Director since June 2011
Independent: Yes
Age: 68
Residence: United Kingdom

Experience
38-year career with Shell including as
Executive Vice President, Upstream
Major Projects within Shell’s Projects
and Technology Business, General
Manager of Shell’s operations in Syria and
a secondment as Managing Director of
Nigeria LNG Ltd. From 1999 to 2002
Dr Haynes was seconded to Woodside as
General Ma nager of the North West Shelf
Venture. Dr Haynes retired from Shell on
31 August 2011.

Committee membership
Member of the Audit & Risk, Sustainability
and Nominations Committees .

Current directorships/other interests:
Director: WorleyParsons Limited
(since 2012).

President: Energy Industries Council
(since October 2015).

f) ANDREW JAMIESON, OBE
FREng, CEng, FIChemE
Director since February 2005
Independent: Yes
Age: 68
Residence: United Kingdom

Experience
Former Executive Vice President Gas
and Projects of Shell Gas and Power
International BV with more than 30
years' experience with Shell in Europe,
Australia and Africa. From 1997 to 1999
Dr Jamieson was seconded to Woodside
as General Manager North West Shelf
Venture. Retired from Shell in June 2009.

Committee membership
Chair of the Human Resources &
Compensation Committee, Member
of the Sustainability and Nominations
Committees.

Current directorships/other interests
Director: Hoegh LNG Partners
(since 2014), Hoegh LNG Holdings and
Gaztransport & Technigaz S.A. (GTT)
(since 2015).

Chair: Seven Energy International Limited
(Director since 2011).

President: Institution of Chemical
Engineers (since 2015).

Directorships of other listed entities
within the past three years: Velocys PLC
(2010 to 2015).

g) DAVID I McEVOY
BSc (Physics), Grad Dip (Geophysics)
Director since September 2005
Independent: Yes
Age: 69
Residence: Sydney, Australia

Experience
34-year career with ExxonMobil involving
extensive international exploration and
development experience.

Committee membership
Chair of the Sustainability Committee.
Member of the Audit & Risk and
Nominations Committees.

Current directorships/other interests:
Director: AWE Limited (since 2006) and
Seven Group Holdings Limited (since
May 2015).

Directorships of other listed entities
within the past three years: Acer Energy
Limited (2002 to November 2012) and
Po Valley Energy Ltd (2004 to May 2012).

h) SARAH E RYAN

PhD (Petroleum and Geophysics), BSc (Geophysics)
(Hons 1), BSc (Geology)
Director since December 2012
Independent: Yes
Age: 49
Residence: Sunshine Coast, Australia

Experience
More than 20 years' experience in the
oil and gas industry in various technical,
operational and senior management
positions, including 15 years with
Schlumberger Limited. Currently an energy
adviser for institutional investment firm
Earnest Partners, having previously been
responsible for research and portfolio
management from 2007 until January
2014.

Committee membership
Member of the Audit & Risk, Sustainability
and Nominations Committees.

Current directorships/other interests:
Director: Akastor ASA (since December
2014).

Directorships of other listed entities within
the past three years:
Aker Solutions, ASA (May 2011 to
December 2014).

i) GENE T TILBROOK
BSc, MBA
Director since December 2014
Independent: Yes
Age: 64
Residence: Perth, Australia

Experience
Broad experience in corporate strategy,
investment and finance. Senior executive
of Wesfarmers Limited between 1985
and 2009, including in roles as Executive
Director Finance and Executive Director
Business Development.

Committee membership
Member of the Audit & Risk, Human
Resources & Compensation and
Nominations Committees.

Current directorships/other interests:
Director: Orica Limited, GPT Group
Limited and the Bell Shakespeare
Company.

Directorships of other listed entities
within the past three years:
Aurizon Holdings Limited (2010 to
February 2016), Fletcher Building Limited
(2009 to 2015).

Member: National Board and Western
Australia division of the Australian Institute
of Company Directors.

Councillor: Curtin University.

WOODSIDE PETROLEUM LTD GOVERNANCECORPORATE GOVERNANCE STATEMENT

We believe high standards of governance and transparency are essential.

Corporate governance at Woodside

Woodside is committed to a high level
of corporate governance and fostering
a culture that values ethical behaviour,
integrity and respect. We believe that
adopting and operating in accordance with
high standards of corporate governance
is essential for sustainable long-term
performance and value creation.

Woodside’s Compass is core to our
governance framework. It sets out our
mission, vision and strategic direction and
core values of integrity, respect, working
sustainably, working together, discipline
and excellence. It’s the overarching guide
for everyone who works for Woodside.

Our corporate governance model
is illustrated below. The Woodside
Management System (WMS) sets out
how Woodside provides management
governance and assurance. It defines
how Woodside will deliver its business
objectives and the boundaries within which

Woodside employees and contractors are
expected to work. The WMS establishes
a common approach to how we operate,
wherever the location.

Throughout the 2015 year, Woodside’s
governance arrangements complied with
the ASX Corporate Governance Council’s
Corporate Governance Principles and
Recommendations (third edition).

Our Corporate Governance Statement
reports on Woodside’s key governance
principles and practices. These principles
and practices are reviewed regularly and
revised as appropriate to reflect changes
in law and developments in corporate
governance.

Woodside’s Corporate Governance
Statement can be viewed in the Governance
and Compliance section of Woodside’s
website at: www.woodside.com.au/
Working-Sustainably/governance-and-
compliance.

The Corporate Governance Statement
discusses arrangements in relation
to Woodside’s Board of directors,
committees of the Board, shareholders,
risk management and internal control, the
external auditor relationship, and diversity.

Woodside’s website also contains
copies of Board and committee charters
and copies of many of the policies and
documents mentioned in the Corporate
Governance Statement. The website is
updated regularly to ensure it reflects
Woodside’s most current corporate
governance information.

Shareholders

Board

n
o
i
t
a
g
e
e
D

A
c
c
o
u
n
t
a
b

i
l
i
t
y

Audit & Risk
Committee

Human Resources
& Compensation
Committee

Chief Executive Officer

Nominations
Committee

Sustainability
Committee

Independent
Assurance

External
Auditors

Internal
Audit

Major Project
Assurance Checks

Management Governance and Assurance

Strategy

Risk
Management

Mission
Vision
Values
Policies

Management Standards

Authorities
Framework

Operating
Structure

Management Review
and Improvement

Operating Standards

Management
Committees

Woodside Management System

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD ANNUAL REPORT 2015DIRECTORS' REPORT (including the Remuneration Report)

Environmental compliance

Woodside is subject to a range of
environmental legislation in Australia and
other countries in which it operates.

Details of Woodside’s environmental
performance are provided on page 34.

Through its Health, Safety, Environment
and Quality Policy, Woodside plans and
performs activities so that adverse effects
on the environment are avoided or kept as
low as reasonably practicable.

Company secretaries

The following individuals have acted as
company secretary during 2015:

Michael Abbott
BJuris, LLB, BA, MBA

Senior Vice President Corporate and
Legal and General Counsel and Joint
Company Secretary

Mr Abbott joined Woodside in 2007
and was appointed to the role of
Senior Vice President Corporate and
Legal and General Counsel in December
2014. He was appointed Joint Company
Secretary effective 3 May 2012. Mr Abbott
holds Bachelor of Laws and Bachelor of
Arts degrees and a Masters of Business
Administration. More information on
Mr Abbott can be found on page 11.

Warren Baillie
LLB, BCom, Grad. Dip. CSP

Company Secretary

Mr Baillie joined Woodside in 2005 and
was appointed Company Secretary
effective 1 February 2012. Mr Baillie
holds Bachelor of Laws and Bachelor of
Commerce degrees and is a solicitor and
chartered secretary. He is a member of the
National Board and Vice President of the
Governance Institute of Australia.

The directors of Woodside Petroleum
Ltd present their report (including the
Remuneration Report) together with the
financial report of the consolidated entity,
being Woodside Petroleum Ltd and its
controlled entities, for the year ended
31 December 2015.

Directors

The directors of Woodside Petroleum Ltd
in office at any time during or since the end
of the 2015 financial year and information
on the directors (including qualifications
and experience and directorships of listed
companies held by the directors at any
time in the last three years), is set out on
pages 48 and 49.

The number of directors’ meetings held
(including meetings of committees of
the Board) and the number of meetings
attended by each of the directors of
Woodside Petroleum Ltd during the
financial year are shown in Table 3 on
page 6 of the Corporate Governance
Statement.

Available on our website.

Details of director and senior executive
remuneration are set out in the
Remuneration Report.

The particulars of directors’ interests in
shares of the company as at the date of
this report are set out on page 70.

Principal activities

The principal activities and operations of
the Group during the financial year were
hydrocarbon exploration, evaluation,
development, production and marketing.

Other than as previously referred to in
the annual report, there were no other
significant changes in the nature of the
activities of the consolidated entity during
the year.

Consolidated results

The consolidated operating profit
attributable to the company’s shareholders
after provision for income tax was
US$26 million (US$2,414 million in 2014).

Review of operations

A review of the operations of the
Woodside Group during the financial year
and the results of those operations are set
out on pages 1 to 47.

Significant changes in the state
of affairs

The review of operations (pages 1 to 47)
sets out a number of matters which
have had a significant effect on the state
of affairs of the consolidated entity.
Other than those matters, there were no
significant changes in the state of affairs
of the consolidated entity during the
financial year.

Events subsequent to end of
financial year

Since the reporting date, the directors have
declared a fully franked dividend. More
information is available in the Dividend
section below. No provision has been
made for this dividend in the financial
report as the dividend was not declared or
determined by the directors on or before
the end of the financial year.

Dividends

The directors have declared a final dividend
out of profits of the company in respect
of the year ended 31 December 2015
of US43 cents per ordinary share (fully
franked) payable on 8 April 2016.
The amount of this dividend will be
US$354 million.

A fully franked final dividend of
US144 cents per ordinary share was
paid to shareholders on 25 March 2015
in respect of the year ended 31 December
2014. The amount of this dividend was
US$1,186 million.

Together with the fully franked interim
dividend of US66 cents per share paid to
shareholders on 23 September 2015, the
total dividend paid during the 2015 year
was US210 cents per share fully franked.

Woodside’s dividend reinvestment plan
has been re-activated for the 2015 final
dividend.

Likely developments and expected
results

In general terms, the review of operations
of the Group gives an indication of likely
developments and the expected results
of the operations. In the opinion of
the directors, disclosure of any further
information would be likely to result in
unreasonable prejudice to the Group.

GOVERNANCEWOODSIDE PETROLEUM LTD GOVERNANCEREMUNERATION REPORT (AUDITED)

Contents

Overview ...............................................................................................................................53

Executive remuneration ..............................................................................................54

CEO remuneration ..........................................................................................................59

Other equity plans ..........................................................................................................59

Contracts for executive KMP ..................................................................................60

Non-executive directors .............................................................................................60

Human Resources & Compensation Committee ...................................61

Use of remuneration consultants ........................................................................61

Reporting notes ................................................................................................................61

Glossary of key terms used in this report .....................................................110

Summary index of tables

Table

Description

Woodside’s KMP during 2015

Woodside five-year performance

Summary of executive remuneration structure

Allocation of executive remuneration between fixed and variable annual reward

Overview of the EIP

How Short-Term Awards are determined

Allocation Value of VPRs to KMP

Vesting Schedule for VPRs

Allocation Value of VPRs to CEO

Summary of contractual provisions for executive KMP

Annual base Board and committee fees for NEDs

Fees paid to remuneration consultants

Compensation of executive KMP for the year ended 31 December 2015 and 2014

Vesting Schedule for RTSR-tested VPRs awarded for the Performance Years 2009 to 2011

LTA Peer Group for Performance Years 2009 to 2011

STA Peer Group and LTA Peer Group Performance Years 2012 to 2015 – International Oil and Gas Companies

Summary of LTA Terms for Performance Years 2010 to 2015

Summary of deferred STA Terms for Performance Years 2011 to 2015

Summary of executive KMPs’ interests in Time-tested VPRs

Summary of executive KMPs’ interests in Restricted Shares

Summary of executives KMPs’ interests in RTSR-tested VPRs

Summary of executive KMPs’ interests in Equity Rights under the WEP

Summary of executive KMPs’ interests in Equity Rights under the SWEP

Total remuneration paid to non-executive directors in 2015 and 2014

KMP Shareholdings

Executive KMPs’ interests in Variable Pay Rights (VPR) and Equity Rights (ER)

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD ANNUAL REPORT 2015Overview

Guide to this report

This Remuneration Report outlines the remuneration
arrangements in place and outcomes achieved for Woodside’s
key management personnel (KMP) during 2015. Woodside’s
KMP are those people who have a meaningful capacity to shape
and influence the Group’s strategic direction and performance
through their actions, either collectively (in the case of the Board)
or as individuals acting under delegated authorities (in the case
of the CEO and his direct reports). The names and positions of
the individuals who were KMP during 2015 are set out in Table 1
below.

Given the capacity KMP have in affecting Woodside’s
performance and the returns delivered to shareholders, it is critical
to design and implement remuneration policies for KMP that
support the business strategy and align the interests of executive
KMP with those of shareholders. This report explains the
manner in which the Board, assisted by the Human Resources &
Compensation Committee (Committee), achieves this objective.

In preparing this report, the Board has endeavoured to provide
sufficient detail and transparency so that investors can form
their own views about the appropriateness of the remuneration
arrangements in place at Woodside. While remuneration
arrangements for executives are complex and involve a variety
of components and performance measures, the report contains
summaries intended to give investors an understanding of how
these components fit together. There is also a Glossary at the
back of the report (on page 110) which explains many of the terms
and abbreviations used throughout the report.

Linking remuneration to strategy and performance

The Board believes that appropriate remuneration policies
motivate executives to strive for better performance outcomes for
the Company and shareholders, while at the same time ensuring
Woodside retains key talent. The Company’s executive incentive
arrangements are designed to ensure ongoing alignment with
Woodside’s strategic direction and values.

The key terms of the executive incentive arrangements are:

a short-term award (STA) delivered two-thirds as cash and one-

third as deferred equity subject to a three year service condition;
and

a long-term award (LTA), the vesting of which is linked to

service and relative total shareholder return (RTSR):

tested over a minimum four year performance period, with a

potential re-test after five years;

one-third (33%) tested against a peer group of top 50 ASX-

listed companies; and

two-thirds (67%) tested against a peer group of 17 oil and gas

companies.

Table 2 on page 54 shows key financial measures of company
performance over the last five years.

Table 1 – Woodside’s KMP during 2015

Executives

Executive Directors

P Coleman (Managing Director and Chief Executive Officer) (CEO)

Senior executives

M Abbott (Senior Vice President Corporate and Legal and General Counsel)1

R Edwardes (Executive Vice President Development)

S Gregory (Senior Vice President and Chief Technology Officer)

P Loader (Executive Vice President Global Exploration)

R Matisons (Executive Vice President Marketing, Trading and Shipping)2

D McLoughlin (Senior Vice President People and Global Capability)3

G Roder (Executive Vice President Business Development and Growth)

Non-executive Directors

M Chaney (Chairman)

M Cilento

F Cooper

C Haynes

A Jamieson

D McEvoy

S Ryan

G Tilbrook

L Tremaine (Executive Vice President Finance and Commercial and Chief Financial Officer)

M Utsler (Chief Operations Officer)

1. On 1 January 2015 Mr. Abbott was appointed to the position of Senior Vice President Corporate and Legal and General Counsel. He previously held the position of Senior Vice President

Legal & General Counsel.

2. On 1 January 2015, Mr. Matisons was appointed to the position of Executive Vice President Marketing, Trade & Shipping. He previously held the position of Senior Vice President

Commercial & Marketing.

3. On 22 January 2015, Mr. McLoughlin became KMP.

GOVERNANCEWOODSIDE PETROLEUM LTD GOVERNANCETable 2 – Woodside five year performance

Year Ended 31 December

Net Profit After Tax (US$ million)

Earnings Per Share2 (US cents)

Dividends Per Share (US cents)

Production (MMboe)

Share closing price (A$) (last trading day of the year)

2015

261

109

92.2

28.72

2014

2,414

293

255

95.1

38.01

2013

1,749

213

249

87.0

38.90

2012

2,983

366

130

84.9

33.88

20114

1,507

190

110

64.6

30.62

Relative TSR3 (1 year)

2nd Quartile

1st Quartile

4th Quartile

2nd Quartile

4th Quartile

1. Detail of net profit after tax is contained in the Financial Position section on page 16.
2. Basic and diluted earnings per share from total operations.
3. As discussed under the STA component of EIP on 57.
4. Amounts were translated to US dollars using monthly average exchange rates.

Executive remuneration

Remuneration Policy

Woodside’s Remuneration Policy aims to reward executives fairly
and responsibly in accordance with the regional (and in some
instances, international) market and ensures that Woodside:

provides competitive rewards that attract, retain and motivate

executives of the highest calibre;

sets demanding levels of performance which are clearly linked

to an executive’s remuneration;

structures remuneration at a level that reflects the executive’s

duties and accountabilities;

benchmarks remuneration against appropriate comparator

groups;

aligns executive incentive rewards with the creation of value for

shareholders; and

complies with applicable legal requirements and appropriate

standards of governance.

Executive remuneration is reviewed annually having regard to
individual and business performance and relevant comparative
information. No review was undertaken in 2015 due to the
company-wide freeze on fixed remuneration.

Executive remuneration structure

Woodside’s remuneration structure for executives, including
executive KMP, has several components, which are explained
in Table 3.

Outcomes

The key remuneration outcomes for Woodside executives in 2015
were as follows:

During 2015, Woodside announced that a freeze on fixed

remuneration would be put in place as part of the response to
the global downturn in the commodities market. This decision
affected all Woodside employees, executives (including the
CEO and other executive KMP) and NEDs. This situation will be
reviewed in 2016.

The value of the STA corporate scorecard for 2015 was

1.35 out of a maximum possible result of two.
For more detail go to page 57.

The STA pool for 2015 was A$22,933,877 for 98 participants
including the executive KMP (and the CEO). Refer to page 57.

The 2010 LTA, which was allocated in 2011 was subject to
the second performance test on 25 February 2015, and as
Woodside attained the 55th percentile of the peer group1, 60%
of the award vested and 40% of the award lapsed.

The 2011 LTA, which was allocated in 2012 was subject to

the first performance test on 1 March 2015 and as Woodside
attained the 64th percentile of the peer group1, 78% of the
award vested and 22% of the award lapsed.

The next performance test will be for the 2012 LTA, which was
allocated in 2013 and is subject to testing on 22 February 2017.
For more detail refer to page 58.

Time-tested Variable Pay Rights (VPRs) for the 2011

performance year were allocated in 2012 as deferred STA
and vested during 2015.

Awards of Equity Rights (ERs) were made under the Woodside
Equity Plan (WEP) in October 2015. The CEO did not receive an
award under this plan.

Vesting for the 2012 WEP took place on 1 October 2015.

No awards were made under the Supplementary Woodside

Equity Plan (SWEP). For more detail go to page 60.

1. Details of the LTA peer group for performance years 2009 to 2011 is set out in Table 15.

Remuneration Report 2014

Woodside’s Remuneration Report for 2014 was adopted at
the Annual General Meeting (AGM) on 16 April 2015 with a
clear majority of 417,543,955 votes in favour of the motion
(representing 92.91% of the votes received).

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD ANNUAL REPORT 2015Table 3 – Summary of executive remuneration structure

Component

How is it determined?

When is it paid?

Fixed remuneration

Short-Term
Award (STA)

Variable
Annual
Reward
(VAR)

Fixed remuneration is determined on the basis
of the scope of the executive’s role and their
individual level of knowledge, skill and experience.

STA payments are based on performance against
a corporate scorecard and individual performance
against KPIs.

The corporate scorecard is based on relative total
shareholder return (RTSR), production, safety and
delivery against business plan commitments.

Individual KPIs vary but can include measures
relating to health and safety, environment, human
resources, financial and operational measures.

Regularly throughout the year.

Subject to performance, two-thirds is paid in cash
in March of the following year.

The remaining third is delivered as a deferred
equity award of Restricted Shares, which is
determined based on a VWAP and vests after
three years’ further continuous service.

Long-Term
Award (LTA)1

LTA is granted in the form of Variable Pay Rights
(VPRs).

Subject to performance, LTA may vest after a
four-year performance period.

If any of the LTA does not vest it will be re-tested
on the fifth anniversary of the allocation date,
but will only vest if RTSR exceeds the ranking
achieved in the prior year and is at or above the
median of the relevant comparator group.

If VPRs vest, executives receive an equivalent
number of Woodside shares on a one-for-one
basis. The shares will have the same face value
as all other ordinary fully-paid Woodside shares on
issue at the time of vesting.

The value at vesting cannot be predicted in
advance. The actual value at vesting may be more
or less than the fair value that is used to determine
the number of VPRs awarded. The actual value
received (if any) will depend on performance
against the hurdles and Woodside’s future share
price.

Awards under the Woodside Equity Plan (WEP)
and Supplementary Woodside Equity Plan (SWEP)
are subject to a three-year vesting period.

The number of VPRs awarded is calculated by
dividing the value of the executive’s LTA by the
fair value of a VPR determined at grant date
(as calculated by an independent consultant
in accordance with the relevant accounting
standards). Fair value is used because it takes into
account the likelihood of meeting the performance
conditions and other variable factors, and so better
reflects the true value of a VPR at the time of
grant.

Vesting of LTA is subject to achievement of RTSR
targets, with 33% measured against the ASX
50 and the remaining 67% tested against an
international group of oil and gas companies.

Executives may receive awards under other equity
plans for various reasons including to:

provide executives with the opportunity to

participate in ownership of shares;

support a competitive base remuneration

position having regard to internal and external
relativities; and

retain key talent.

Generally, awards are calculated with reference
to salary and performance as assessed under
Woodside’s performance review process.

Other equity plans

1. For awards for the 2012 performance year onwards. Details on vesting schedule and peer groups for performance years 2009 – 2011 are contained in Tables 14 and 15 respectively.

GOVERNANCEWOODSIDE PETROLEUM LTD GOVERNANCEProportion of remuneration at risk

Executive Incentive Plan (EIP)

The target allocation of remuneration between fixed remuneration
and VAR for Woodside’s executives is shown in Table 4.
A higher proportion of the CEO’s remuneration is ’at risk’
relative to that of other executives as the CEO has the greatest
opportunity to influence the company’s performance.

The actual percentages received will vary from year to year
for each executive depending on performance outcomes.
Participation in other equity plans is not taken into account
for the calculation of the percentages shown in the table.

Table 4 – Allocation of executive remuneration
between fixed and Variable Annual Reward

The Executive Incentive Plan (EIP) is used to deliver Short-Term
Awards and Long-Term Awards to executives, other than the CEO.
The CEO’s individual arrangements are described on page 59.

The EIP aims to reward executives for meeting or exceeding their
individual performance targets, while at the same time linking
their reward to the creation of long-term sustainable wealth for
shareholders.

Table 5 illustrates how EIP awards will be determined for the 2015
Performance Year, as well as their lifecycle in future years. A more
detailed explanation of each component is provided later in this
report on pages 57 to 58.

Executive KMP

45-50

30-33

20-22

CEO

Fixed Annual Reward

40
Percent %

STA (at risk)

100

LTA (at risk)

Table 5 – Overview of the EIP

2015

2016

2017

2018

2019

2020

2021

Performance Year

Executives must be
employed for at least part of
the Performance Year and
achieve at least an acceptable
level of performance in
their individual performance
assessment to be eligible for
an EIP award.

Eligible executives receive
a Variable Annual Reward
(VAR) under the EIP

VAR for a Performance Year
is calculated as a percentage
of fixed remuneration, which
is determined by the Board
taking into account relevant
data on levels of variable
reward being offered in the
market.

VAR consists of:

60% STA

Adjusted in accordance
with the STA pooling and
performance assessment
process.

Two-thirds of the STA is paid
in early 2016 as cash while
the other third is awarded as
Restricted Shares.

40% LTA

Awarded as Variable Pay
Rights (VPRs).

Restricted Shares

Subject to a three-year
deferral period ending in
2019.

VPRs

Subject to RTSR
performance over a
four-year period up to
the vesting date on
19 February 2020.

VPRs that do not
vest after the four-
year period may
vest after a five-year
period, subject to
performance.

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD ANNUAL REPORT 2015Short-Term Award (STA)

Key features of STA

Who participates? Executives, including all executive KMP
other than the CEO, participate in the EIP. The CEO has similar
arrangements under his contract.

What are the performance conditions? STA outcomes are
determined based on performance against the corporate
scorecard and performance against individual KPIs.

How is performance assessed? The Board assesses
performance against the corporate scorecard. For executive
KMP, individual performance assessments are conducted by
the CEO against their agreed KPIs and demonstrated values
and behaviour, and are subject to approval by the Committee.

How is it delivered? Two-thirds is paid in cash and one-third is
awarded as Restricted Shares subject to a three-year deferral
period. The number of Restricted Shares is calculated by
dividing the deferred STA value by the Pricing Date Volume
Weighted Average Price (VWAP). Participants are not required
to make any payment in respect of these restricted shares on
grant or at vesting.

What is the maximum and minimum STA award that an
executive can receive? Executives do not have an individual
maximum STA opportunity because their VAR and the
size of the STA pool varies from year to year depending on
performance and other factors. The overall STA pool for 2015
was A$22,933,877 for 98 participants including the executive
KMP (and the CEO). This was distributed amongst the
participants in accordance with the pooling process outlined
in Table 6. The minimum STA award that an executive can
receive is zero if their individual performance is assessed as
unacceptable.

What were the outcomes in 2015? The value of the STA
corporate scorecard for 2015 was 1.35 out of a maximum
possible result of two.

Time-tested Variable Pay Rights (VPRs) for the 2011
performance year were allocated in 2012 as deferred STA
and vested during 2015.

Individual KPIs for 2015 Short-Term Awards

A range of individual key performance indicators (KPIs) were
adopted for 2015 reflecting the varied responsibilities of
executives who participate in the STA. KPIs are chosen to align
individual performance with the achievement of Woodside’s
business plan and objectives. Examples of KPIs adopted for 2015
include the following:

health and safety (e.g. total recordable case frequency, high

potential incident frequency);

environment (e.g. greenhouse gas emissions, flared gas);

human resources (e.g. talent management, capability

development and diversity);

financial (e.g. revenue, operating costs, earnings before interest
and tax, return on average capital employed, production costs,
drilling costs); and

operational (e.g. production volumes, project progress).

Corporate scorecard measures and outcomes for
2015 STAs

Company performance is determined by the Board following
assessment against a corporate scorecard of key measures that
align with Woodside’s overall business performance.

Management performance is determined by the Board following
assessment against a balanced scorecard of key measures that
align with Woodside’s overall business performance.

Table 6 – How Short-Term Awards are determined

At the start of the year,
KPIs for each executive
are set out in an individual
performance agreement.

Following the end of
the year, individual
performance is assessed
against KPIs.

STA is determined for each executive
where individual performance is
acceptable.

Executives are sorted into ‘pool groups’ to
ensure a fair allocation of STA.

Each pool is adjusted by a multiple of zero
to two, based on corporate scorecard
performance.

Each executive is allocated a proportion
of the relevant pool, based on individual
performance relative to other executives in
the same pool.

STA is delivered two thirds in cash and
one-third in Restricted Shares, with a
three-year deferral period.

No STA is awarded
to individuals
whose performance
is assessed as
unacceptable.

The 2015 scorecard is based on four equally weighted measures:

Relative Total Shareholder Return (RTSR): Indicator of overall
company performance relative to the performance of 17 oil and
gas peer companies (see Table 16 on page 63) and the ASX 50
over the Performance Year.

Production: Underpins the company revenue and profit.

Safety: A strong safety performance is required to maintain
a licence to operate and retain the company’s position as a
partner and employer of choice.

Delivery against business plan commitments: Measures

the company’s delivery of commitments made to market and
considers operational performance, financial performance and
delivery of Woodside’s growth agenda.

The measures for the scorecard were chosen because of the
impact they have on shareholder value.

For the 2015 Performance Year, the Board determined a scorecard
outcome of 1.35 out of a maximum of two. In summary, for 2015,
Woodside:

achieved a RTSR rank of 8 against oil and gas peer companies

and 40 against the ASX 50;

delivered annual production of 92.2 million barrels of oil

equivalent, our second highest result;

achieved a Total Recordable Injury Rate of 1.71 per million man
hours (a 10% improvement on 2014) and two ’Tier 2’ Process
Safety Events occured in the year; and

met or exceeded the majority of 2015 business plan

commitments. In particular, production, asset utilisation, opex,
flaring, cost reduction and efficiency improvement programs are
all ahead of targets. This was achieved with approximately 10%
fewer employees than at the start of 2015.

This performance outcome resulted in a total available STA of
A$22,933,877 across all pools.

GOVERNANCEWOODSIDE PETROLEUM LTD GOVERNANCEDeferral of STAs

Table 7 – Allocation value of VPRs to KMP

Executive

M Abbott

R Edwardes

S Gregory

P Loader

R Matisons

D McLoughlin

G Roder

L Tremaine

M Utsler

Fair value at
grant date

Face value at
grant date

163,901

337,001

180,282

258,224

185,864

122,913

302,708

288,378

339,262

293,589

603,656

322,932

462,546

332,931

220,168

542,228

516,560

607,705

LTA performance hurdles

Once the number of VPRs is determined, the VPRs are divided
into two portions with each portion subject to a separate RTSR
performance hurdle tested over an initial four-year period.

For the 2015 Performance Year, one-third (33%) of the VPRs will
be tested against a comparator group that comprises the entities
within the ASX 50 index at 1 December 2015. The remaining two-
thirds (67%) of the VPRs will be tested against an international
group of oil and gas companies. The oil and gas companies used
for Performance Years since 2012 are set out in Table 16 on
page 63. This international peer group was chosen as Woodside
competes globally for resources, market and people, operating in
an international commodity business.

How LTAs align with strategy

The LTA has been designed to align with our company strategy
through carefully chosen peer groups that include both
competitors for investor funds, and domestic and overseas oil and
gas players. RTSR was chosen as the LTA performance measure
in order to ensure that Woodside’s executives’ remuneration
is aligned with the company’s performance in relation to the
performance of the two peer groups. The weighting towards
the international peer group reflects our goal of becoming a
global leader. The Board believes that RTSR best reflects
creation of shareholder wealth and is both transparent and
widely understood.

The LTA performance period is initially tested after four years as
Woodside operates in a capital intensive industry with investment
timelines averaging five to ten years. This makes it imperative
that executives take decisions that are in the long-term interest of
shareholders, focused on value creation taking into account the
commodity price cycles of the oil and gas industry.

The STA for a Performance Year is delivered two-thirds in cash,
and one-third is made as an award of Restricted Shares subject to
a three-year deferral period.

Generally, vesting of the deferred STA is subject to the executive’s
employment not being terminated with cause, or by resignation,
for three years after allocation. The deferred STA may vest prior
to the expiry of the three years upon a change of control event, or
on the death or total and permanent disablement of the executive.
Deferred STA will also generally vest upon redundancy or
retirement with effect from a date determined by the Board. There
are no further performance conditions for vesting of deferred STA.

A summary of the terms of unvested deferred STA awarded to
KMP is provided in Table 18 on page 64. Details of Restricted
Shares awarded to KMP are provided in Table 20 on page 65.

Long-Term Award (LTA)

Key features of LTA

Who participates? Executives, including executive KMP other
than the CEO, participate in the EIP. The CEO has similar
arrangements under his contract.

What are the performance conditions? Vesting of 33% of
the LTA is subject to RTSR performance against the ASX 50.
Vesting of the remaining 67% is subject to RTSR performance
against an international group of oil and gas companies.
Participants are not required to make any payment in respect of
these VPRs on grant or at vesting.

What is the performance period? Performance is initially
tested over a four-year performance period.

How is performance assessed? RTSR performance is derived
from Woodside’s position in the RTSR rankings of members of
the peer groups over the performance period. This is calculated
by an independent consultant.

What were the outcomes in 2015? The 2010 LTA, which was
allocated in 2011 was subject to the second performance
test on 25 February 2015, and as Woodside attained the 55th
percentile of the peer group, 60% of the award vested and
40% of the award lapsed.

The 2011 LTA, which was allocated in 2012 was subject to
the first performance test on 1 March 2015 and as Woodside
attained the 64th percentile of the peer group, 78% of the
award vested and 22% of the award lapsed.

The next performance test will be for the 2012 LTA, which was
allocated in 2013 and is subject to testing on 22 February 2017.

LTA – valuation and allocation

LTA for the 2015 Performance Year is granted in the form of VPRs.
The number of VPRs awarded is calculated by dividing the value
of the executive’s LTA by the fair value of a VPR. The fair value
was determined by an independent consultant and reflects
potential vesting outcomes (having regard to applicable
performance conditions) as well as other factors such as
volatility and forfeiture risks.

The fair value at grant date used to determine the number of VPRs
allocated to executive KMP for the 2015 Performance Year was
US$17.39 per VPR. The face value of a Woodside share at the
grant date was US$31.15.

Table 7 sets out the fair value and face value of LTA made to

executive KMP for the 2015 Performance Year based on these
values. Details for the CEO are set out on page 59.

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD ANNUAL REPORT 2015Measurement of LTAs

building enterprise and organisational capacity;

The total shareholder return in respect of Woodside and both peer
groups is calculated by an external adviser in accordance with the
EIP rules on the fourth anniversary of the allocation of these VPRs.
The outcome of the test is measured against the schedule below:

Table 8 – Vesting schedule for VPRs1

Woodside RTSR percentile
position within peer group

Less than 50th percentile

Equal to 50th percentile

Vesting of VPRs

no vesting

50% vest

Equal to or greater than 75th percentile

100% vest

enhancing culture and reputation; and

ensuring shareholder focus.

At the completion of the Performance Year, each non-executive
director contributes to the documented review of the CEO’s
performance for that year. This is used to determine the CEO’s
individual performance factor for the Performance Year.

The STA for the CEO is calculated by multiplying the CEO’s fixed
remuneration by the scorecard multiple and the CEO’s individual
performance factor. STA is delivered as two-thirds cash and one-
third Restricted Shares. Restricted Shares have the same terms
and conditions as those awarded to other executives as described
on page 57.

Vesting between these percentile points is on a pro rata basis.

LTA

1. Schedule used for RTSR tested VPRs awarded for 2012 – 2015 Performance Years.

Any VPRs which do not vest at this time are subject to a second
RTSR test on the fifth anniversary of the allocation date, but
further vesting in accordance with the schedule will only occur
if Woodside equals or exceeds the 50th percentile threshold
and achieves a superior RTSR ranking at the second test date
compared to that achieved on the first test date. Any VPRs that do
not vest on the fifth anniversary lapse.

LTA – other terms

VPRs lapse if the executive’s employment is terminated with
cause, or by resignation, prior to vesting.

VPRs may vest prior to the satisfaction of the vesting conditions
upon a change of control event, or on the death or total
and permanent disablement of the executive. In the event
of redundancy, retirement or the cessation of a fixed term
employment contract of a participant, VPRs continue in the plan
and remain subject to the normal performance measures.

A summary of the terms and conditions of unvested VPRs under
each award made to executives under the EIP is provided in
Table 17 on page 64. A summary of executive KMP interests in
VPRs is provided in Table 21 on page 66.

CEO remuneration

Mr Coleman’s remuneration is governed by his contract of
employment which, in summary, for 2015 is comprised of:

30% fixed remuneration;

30% STA component; and

40% LTA component.

STA

The grant of an STA to the CEO is determined based on the
scorecard and individual performance as determined by the Board.
The STA award is capped to a maximum of two times fixed annual
reward. The CEO’s STA award for 2015 was 82% of maximum
and the remainder was forfeited. The scorecard and performance
against the scorecard measures is described on page 57 of this
report under the section titled Corporate scorecard measures
and outcomes for 2015 STAs.

Each year the Board determines and documents the factors which
will be used to assess the annual individual performance of the
CEO. The individual performance of the CEO is reviewed by the
Board against the following factors which were chosen because of
their impact on shareholder value:

setting and pursuing the growth agenda;

achieving effective execution;

The LTA entitlement for the 2015 Performance Year will be
allocated in February 2016 and will be subject to RTSR testing for
the first time in February 2020. The vesting conditions for the LTA
allocation reflect those outlined on page 58 and summarised in
Table 17 on page 64 in respect of the 2015 LTA allocation for other
executives.

The fair value at grant date used to determine the number of VPRs
allocated to the CEO as his LTA for the 2015 Performance Year
was the same as the fair value used to determine the number
of VPRs awarded to other executive KMP, i.e. US$17.39 per
VPR. The face value of a Woodside share at the grant date was
US$31.15. The table below sets out the allocation value of the
CEO’s 2015 LTA based on these values.

Table 9 – Allocation value of VPRs to CEO

VPRs

Fair value at
grant date

Face value at
grant date

153,833

2,675,156

4,791,898

Other equity plans

Woodside Equity Plan (WEP)

Woodside has a history of providing employees with the
opportunity to participate in ownership of shares in the company.
This has supported staff retention and alignment of employees
with shareholder interests. As part of the strategy to attract, retain
and motivate employees, the Board approved the introduction
from November 2011 of a broad-based, long-term equity plan
called the WEP to recognise and reward the commitment of
eligible employees.

The WEP is available to all Australian based permanent employees
including executives, other than the CEO. Woodside’s intention is
to enable eligible employees to build up a holding of equity in the
company as they progress through their career at Woodside.

The number of Equity Rights (ERs) offered to each eligible
employee is calculated with reference to salary and individual
performance on an annual basis. There are no further ongoing
performance conditions upon allocation of each individual’s ERs.
The linking of performance to an allocation allows Woodside to
recognise and reward eligible employees for high performance.

Each ER entitles the participant to receive a Woodside share on the
vesting date three years after the effective grant date.

Vesting of grants made under the WEP in 2012 took place on
1 October 2015.

GOVERNANCEWOODSIDE PETROLEUM LTD GOVERNANCETable 22 on page 67 provides a summary of executive KMP
interests in ERs under the WEP.

Supplementary Woodside Equity Plan (SWEP)

In October 2011, the Board approved a remuneration strategy
which includes the use of equity to support a competitive base
remuneration position. To this end, the Board approved the
establishment of the Supplementary Woodside Equity Plan
(SWEP) to enable the offering of targeted retention awards of
ERs for key capability. The SWEP was designed to be offered to
a small number of employees identified as being retention critical.
The SWEP awards have service conditions and no performance
conditions. Each ER entitles the participant to receive a Woodside
share on the vesting date three years after the effective grant
date. There were no awards issued under the SWEP in 2015.

Table 23 on page 67 provides a summary of executive KMP’s
interests in ERs under the SWEP.

ERs under both the WEP and the SWEP may vest prior to the
vesting date on a change of control or on a pro rata basis, at the
discretion of the CEO, limited to the following circumstances;
redundancy, retirement (after six months’ participation), death,
termination due to illness or incapacity or total and permanent
disablement of a participating employee. An employee whose
employment is terminated by resignation or for cause prior to the
vesting date will forfeit all of their ERs.

Legacy plans – STAs and LTAs 2009 to 2011

The deferred portion of STA for the Performance Years from 2009
to 2011 inclusive was delivered in the form of time-tested VPRs.
Details of time-tested VPRs awarded for previous performance
periods are provided in Table 19 on page 64.

The LTA for the Performance Years from 2009 to 2011 inclusive
was granted in the form of VPRs, the vesting of which is linked
to service and relative total shareholder return. Performance is
initially tested over a three-year performance period.

Vesting schedule and peer groups for all VPRs tested against an
RTSR hurdle are set out in Tables 14 and 15 on page 63.

Non-executive directors (NEDs)

Key features of NEDs remuneration

What remuneration do NEDs receive? NEDs receive
Board and committee fees, which are inclusive of statutory
superannuation (or payments in lieu for overseas based NEDs).

Does the Chairman receive higher fees? The Chairman
receives a higher Board fee than other NEDs, but does not
receive extra fees for committee work. Committee Chairs
receive higher base committee fees than other respective
committee members.

Do NEDs receive performance-based remuneration or
retirement benefits? No.

Were there any changes in 2015? There were no adjustments
to NED fees for 2015.

Remuneration Policy

Woodside’s Remuneration Policy for NEDs aims to attract, retain,
motivate and to remunerate fairly and responsibly having regard to:

the level of fees paid to NEDs relative to other major Australian

companies;

the size and complexity of Woodside’s operations; and

the responsibilities and work requirements of Board members.

Contracts for executive KMP

All KMP have a contract of employment. Table 10 below contains a summary of the key contractual provisions of the contracts of
employment for the executive KMP.

Table 10 – Summary of contractual provisions for executive KMP

Name

P Coleman

M Abbott

Employing company

Contract duration

Woodside Petroleum Ltd

Unlimited

Woodside Energy Ltd

Unlimited

R Edwardes

Woodside Energy Ltd

Fixed Term Contract until
31 December 2018

S Gregory

R Matisons

Woodside Energy Ltd

D McLoughlin

Woodside Energy Ltd

Unlimited

P Loader

Woodside Energy Ltd

G Roder

Woodside Energy Ltd

Fixed Term Contract until
1 July 2018

Fixed Term Contract until
31 August 2017

L Tremaine

Woodside Energy Ltd

Unlimited

M Utsler

Woodside Energy Ltd

Fixed Term Contract until
2 December 2018

Termination
notice period
company1,2

Termination notice
period executive

12 months

6 months

12 months

6 months

12 months

6 months

3 months

6 months

3 months

6 months

3 months

1. Termination provisions – Woodside may choose to terminate the contract immediately by making a payment in lieu of notice equal to the fixed remuneration the executive would have received

during the ‘Company Notice Period’. In the event of termination for serious misconduct or other nominated circumstances, executives are not entitled to this termination payment. Any payments
made in the event of a termination of an executive contract will be consistent with the Corporations Act 2001.

2. On termination of employment, executives will be entitled to the payment of any fixed remuneration calculated up to the termination date, any leave entitlement accrued at the termination

date and any payment or award permitted under the EIP Rules. Executives are restrained from certain activities for specified periods after termination of their employment in order to protect
Woodside’s interests.

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD ANNUAL REPORT 2015Fees paid to NEDs are recommended by the Human Resources
& Compensation Committee based on advice from external
remuneration consultants, and determined by the Board, subject
to an aggregate limit of A$3.75 million per financial year, which
was approved by shareholders at the 2014 AGM.

Human Resources & Compensation Committee
The Committee assists the Board to determine appropriate
remuneration policies and structures for NEDs and executives.
Further information on the role of the Committee is described in
section 3.4 of the Corporate Governance Statement.

During 2015, Woodside announced that a freeze on fixed
remuneration would be put in place as part of the response to
the global downturn in the commodities market. This decision
affected all Woodside employees, executives (including the
CEO and other executive KMP) and NEDs. This situation will be
reviewed in 2016.

The Woodside shareholding guideline for NEDs requires NEDs
to hold a minimum holding of 2,000 Woodside shares and NEDs
who have less than the minimum holding are required to direct
25% of net (after tax) fees to the purchase of Woodside shares
until the minimum holding requirement is satisfied. The NEDs may
utilise the Non-Executive Directors’ Share Plan (NEDSP) to acquire
the shares on market at market value. As the shares are acquired
with net fees the shares in the NEDSP are not subject to any
forfeiture conditions.

NEDs remuneration structure

NEDs remuneration consists of base Board fees and committee
fees, including statutory superannuation contributions or
payments in lieu (currently 9.5%). Other payments may be made
for additional services outside the scope of Board and committee
duties. NEDs do not earn retirement benefits other than
superannuation and are not entitled to any form of performance-
linked remuneration.

Table 11 below shows the annual base Board and committee fees
for NEDs.

In addition to these fees, NEDs are entitled to reimbursement of
reasonable travel, accommodation and other expenses incurred
attending meetings of the Board, committees or shareholders, or
while engaged on Woodside business. NEDs are not entitled to
compensation on termination of their directorships.

Board fees are not paid to the CEO, as the time spent on Board
work and the responsibilities of Board membership are considered
in determining the remuneration package provided as part of the
normal employment conditions.

The total remuneration paid to, or in respect of, each NED in 2015
is set out in Table 24 on page 68.

Use of remuneration consultants
The Committee directly engages independent external advisers
to provide input to the process of reviewing NEDs and executive
remuneration. The Committee receives executive remuneration
recommendations directly from external independent
remuneration consultants. Table 12 shows the fees payable to
independent external remuneration consultants during 2015.

Under communications and engagement protocols adopted by
the Company, the market data reports and the recommendations
were provided directly to the Committee Chairman, and the
consultants provided a statement to the Committee that the
reports and recommendations had been prepared free of undue
influence from KMP. The Committee had full oversight of the
review process and therefore it, and the Board, were satisfied that
the recommendations made by Egan Associates were free from
undue influence by KMP.

Table 12 – Fees paid to remuneration consultants

Remuneration
consultant

Egan Associates

Services Provided

Fees

A$25,830

Market data and
remuneration
recommendations
(2016 CEO
remuneration review)

Reporting notes

Reporting in United States dollars

In this report, the remuneration and benefits reported have
been presented in US dollars, unless otherwise stated. This is
consistent with the functional and presentation currency of
the company.

Compensation for Australian-based employees and all KMP is
paid in Australian dollars and, for reporting purposes, converted
to US dollars based on the applicable exchange rate. Valuation
of equity awards is converted at the spot rate applying when the
equity award is granted.

Table 11 – Annual base Board and committee fees for NEDs

Position

Chairman of the Board1

Non-executive Directors2

Committee Chairman

Committee Member

Board

723,3003

212,7003

1. Inclusive of committee work.
2. Board fees paid to non-executive directors, other than the Chairman.
3. Annual fee from 1 July 2014.

Audit & Risk
Committee

Human
Resources &
Compensation
Committee

Sustainability
Committee

Nominations
Committee

56,0003

27,9003

47,4003

23,7003

47,4003

23,7003

Nil

GOVERNANCEWOODSIDE PETROLEUM LTD GOVERNANCETable 13 – Compensation of executive KMP for the year ended 31 December 2015 and 2014

The following table provides a detailed breakdown of the components of remuneration for each of the executive KMP, calculated in
accordance with accounting standards.

Fixed Annual
Reward

Variable Annual
Reward

Short
term

Post
employment

Short
term

Share based
payments

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e
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e
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a
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e
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(
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v
r
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s
g
n
o
L

P Coleman,
Chief Executive Officer

M Abbott,
Senior Vice President Corporate and
Legal and General Counsel4

2015

1,829,049

152,493

14,304

2,007,413

3,488,469

63,088

2014

2,174,957

146,653

16,479

2,950,283

3,092,961

76,423

2015

310,743

15,526

83,106

200,654

257,297

42,601

2014

R Edwardes,
Executive Vice President
Development5

S Gregory,
Senior Vice President and
Chief Technology Officer

P Loader,
Executive Vice President
Global Exploration6,7

R Matisons,
Executive Vice President
Marketing, Trading and Shipping8

D McLoughlin,
Senior Vice President
People and Global Capability9

G Roder,
Executive Vice President Business
Development and Growth10

L Tremaine,
Executive Vice President
Finance and Commercial and
Chief Financial Officer

M Utsler,
Chief Operations Officer6,11

2015

786,031

25,630

14,304

440,297

379,166

22,304

2014

883,779

57,569

16,479

632,382

334,964

25,762

2015

421,790

14,388

14,304

260,580

346,471

15,924

2014

479,811

23,836

16,479

338,304

277,773

31,428

2015

656,081

64,635

337,364

442,557

16,465

2014

743,085

36,085

484,543

204,099

17,290

2015

352,674

67,703

96,831

232,188

348,562

16,396

2014

2015

336,031

16,738

13,416

176,800

61,839

7,650

2014

2015

671,396

43,930

59,258

296,609

542,504

20,073

2014

808,791

10,414

38,224

568,012

346,443

22,710

2015

607,197

13,131

17,124

414,316

706,360

22,838

2014

681,326

52,779

20,555

676,415

556,717

23,838

2015

954,838

40,625

2014

1,072,898

34,639

455,769

511,756

22,775

795,782

227,228

24,872

s
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7,554,816

8,457,756

909,927

1,667,732

1,950,935

1,073,457

1,167,631

1,517,102

1,485,102

1,114,354

d
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t
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f
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e
P

612,474

1,633,770

1,794,594

1,780,966

2,011,630

1,985,763

2,155,419

1. Reflects the value of allowances and non-monetary benefits (including travel, health insurance, car parking and any associated fringe benefit tax).

2. The amount represents the short-term incentive earned in the respective year, which is actually paid in the following year.

3. ‘Share plan’ incorporates all equity-based plans. In accordance with the requirements of AASB 2 Share-based Payment, the fair value of rights as at their date of grant has been determined by

applying the Black-Scholes option pricing technique or binomial valuation method combined with a Monte Carlo simulation. The fair value of rights is amortised over the vesting period, such that
‘total remuneration’ includes a portion of the fair value of unvested equity compensation during the year. The amount included as remuneration is not related to or indicative of the benefit (if any)
that individual executives may ultimately realise should these equity instruments vest.

4. On 1 January 2015, Mr Abbott was appointed to KMP. Mr Abbott did not meet the definition of KMP under AASB 124 for years prior to 2015. Previous years comparative figures are not shown.

5. Mr Edwardes' share based payments are recognised over the shorter of his contract end date and the vesting date of the performance right. In the current period his contract end date was

extended from 31 December 2016 to 31 December 2018. The expense recognition period of his performance rights has been adjusted to reflect his new contract end date.

6. As a non-resident for Australian tax purposes Mr Loader and Mr Utsler have elected to receive a cash payment in lieu of all superannuation contributions, in accordance with the Superannuation
Guarantee (Administration) Act 1992. The cash payment is subject to (PAYG) income tax and paid as part of their normal monthly salary. The amount is included in salaries, fees and allowances.

7. Mr Loader’s 2014 and 2015 share-based payment amortisation expenses have been accelerated based on his contract end date of 1 July 2018.

8. On 1 January 2015, Mr Matisons was appointed to KMP. Mr Matisons did not meet the definition of KMP under AASB 124 for years prior to 2015.

Previous years comparative figures are not shown.

9. On 22 January 2015, Mr McLoughlin was appointed to KMP. Mr McLoughlin did not meet the definition of KMP under AASB 124 for years prior to 2015.

Previous years comparative figures are not shown.

10. Mr. Roder’s 2014 and 2015 share-based payment amortisation expenses have been accelerated based on his contract end date of 31 August 2017.

11. Mr Utsler’s 2014 and 2015 share-based payment amortisation expense has been accelerated based on his contract end date of 2 December 2018.

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD ANNUAL REPORT 2015

Table 14 – Vesting schedule for RTSR-tested VPRs awarded for the Performance Years 2009 to 2011

The table below sets out the relative TSR rankings that are required for vesting of the VPRs that were granted in respect of the
2009 to 2011 Performance Years.

Woodside RTSR percentile
position within Peer Group

Vesting of RTSR-tested
VPRs

Less than 50th percentile

Equal to 50th percentile

Equal to 75th percentile

Equal to 100th percentile

no vesting

50% vest

100% vest

150% vest (i.e. 50% uplift
for topping LTA Peer Group)

Vesting between these percentile points is on a pro rata basis. While a VPR generally only
confers an entitlement to a single share on vesting (or its cash value), when greater than
100% vesting is achieved additional shares are allocated in respect of each RTSR-tested
VPR to achieve the necessary uplift.

When testing occurs in relation to awards that are subject to an RTSR hurdle (being the LTA for the 2009 to 2011 Performance Years
and both the STA and LTA for the 2012 to 2015 Performance Years), Woodside’s total shareholder return will be ranked against the total
shareholder returns of the relevant list of companies set out below. For 2012 to 2015 STA and LTA awards, it will also be ranked against
the total shareholder returns of the ASX 50.

Table 15 – LTA Peer Group for Performance Years 2009 to 2011

Apache Corporation

Anadarko Petroleum Corporation

BG Group PLC

CNOOC Limited

Inpex Corporation

Marathon Oil Company

Murphy Oil Corporation

Pioneer Natural Resources Company

Repsol YPF, S.A.

Santos Ltd

Talisman Energy Inc

Table 16 – STA Peer Group and LTA Peer Group Performance Years 2012 to 2015 –
International Oil and Gas Companies

Apache Corporation

Anadarko Petroleum Corporation

BG Group PLC

ConocoPhillips

ENI S.p.A

Hess Corporation

Inpex Corporation

Marathon Oil Company

Murphy Oil Corporation

Oil Search Limited

Origin Energy Limited

Pioneer Natural Resources Company

Repsol YPF, S.A

Santos Ltd

Statoil ASA

Talisman Energy Inc

Tullow Oil PLC

GOVERNANCEWOODSIDE PETROLEUM LTD GOVERNANCETable 17 and Table 18 summarise the terms and conditions of the equity instruments granted under the LTA and STA for
Performance Years 2010 to 2015.

Table 17 – Summary of LTA Terms for Performance Years 2010 to 2015

Terms and
conditions

Allocation date

2015 VPR
award

19 February
2016

2014 VPR
award

20 February
2015

2013 VPR
award

21 February
2014

Pricing date

1 January 2015

1 January 2014

1 January 2013

Grant date

1 January 2015

1 January 2014

1 January 2013

2012 VPR
award

22 February
2013

7 December
2012

1 January
2012

2011 VPR
award

1 March
2012

2010 VPR
award

25 February
2011

31 December
2011

31 December
2010

1 January
2011

1 January
2010

Allocation price1

A$21.22

A$19.51

A$20.00

A$19.65

A$31.93

A$42.78

Vesting date2

Re-testing date

19 February
2020

19 February
20213

20 February
2019

20 February
20203

21 February
2018

21 February
20193

22 February
2017

22 February
20183

1 March
2015

1 March
20164

25 February
2014

25 February
20154

% Vesting

78%

60%

1. For allocations made for the years prior to 2012, the allocation price was determined by calculating the Volume Weighted Average Price of Woodside shares for the trading days in the month of

December of the respective Performance Year. For subsequent allocations, the allocation price is the fair value of a Variable Pay Right as at the Pricing Date.

2. Provision is made for accelerated vesting in certain events such as total and permanent disability, death or a change in control of Woodside.

3. Any VPRs that do not vest as a result of the first test will be re-tested over a five-year performance period.

4. Re-testing is applied to the RTSR-tested VPRs if the RTSR threshold is not achieved at the Vesting Date.

Table 18 – Summary of deferred STA Terms for Performance Years 2011 to 2015

Terms and
conditions

2015
award

2014
award

2013
award

2012
award

2011
award

Deferral instrument

Restricted Shares

Time-tested VPRs

Allocation date

19 February 2016

20 February 2015

21 February 2014

22 February 2013

1 March 2012

Pricing date

Grant date

Volume weighted
average price

31 December 2015

31 December 2014

31 December 2013

31 December 2012

31 December 2011

1 January 2015

1 January 2014

1 January 2013

1 January 2012

1 January 2011

A$27.90

A$36.09

A$37.90

A$34.09

A$31.93

Vesting date1

19 February 2019

20 February 2018

21 February 2017

22 February 2016

1 March 2015

1. Provision is made for accelerated vesting in certain events such as total and permanent disability, death or a change in control of Woodside.

Table 19 and Table 20 summarise the interests of executive KMP in deferred STA that were granted as VPRs
(for the 2009 to 2011 Performance Years) and Restricted Shares (for the 2012 to 2015 Performance Years).

Table 19 – Summary of executive KMPs’ interests in Time-tested VPRs1

Name

Allocation
date

Vesting
date2

P Coleman

March 2012

March 2015

M Abbott

S Gregory

R Matisons

L Tremaine

March 2012

March 2015

March 2012

March 2015

March 2012

March 2015

March 2012

March 2015

Awarded
but not
vested

Vested in
2015

% of total
vested

Lapsed in
2015

Fair value3 of VPRs by
performance year

14,791

1,516

2,024

2,548

4,470

100

38.87

1. For valuation purposes all VPRs are treated as if they will be equity settled.

2. Vesting date and exercise date are the same. Vesting is subject to a three-year service condition. No amount is payable by the executives on the grant or vesting of Variable Pay Rights.

The minimum total value of the grants for future financial years is nil if relevant vesting conditions are not satisfied. An estimate of the maximum possible total value in future financial years
is the fair value as shown above multiplied by the number of VPRs awarded.

3. In accordance with the requirements of AASB 2 Share-based Payment, the fair value of rights as at their date of grant has been determined by applying the Binomial or Black Scholes option

pricing technique. The fair value of rights is amortised over the vesting period, such that ‘total remuneration’ includes a portion of the fair value of unvested equity compensation during the year.
The amount included as remuneration is not related to or indicative of the benefit (if any) that individual executives may ultimately realise should these equity instruments vest.

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD ANNUAL REPORT 2015
Table 20 - Summary of executive KMPs’ interests in Restricted Shares

Allocation
date

Vesting
date1

Awarded
but not
vested

Vested in
2015

% of total
vested

Lapsed in
2015

Value of Restricted
Shares by
performance year

Name

P Coleman

February 2013

February 2016

33,720

February 2014

February 2017

19,924

February 2015

February 2018

45,334

February 2016

February 2019

47,905

M Abbott2

February 2016

February 2019

R Edwardes

February 2013

February 2016

February 2014

February 2017

February 2015

February 2018

4,788

4,710

5,075

9,717

February 2016

February 2019

10,507

February 2014

February 2017

S Gregory3

February 2015

February 2018

February 2016

February 2019

February 2014

February 2017

P Loader

February 2015

February 2018

February 2016

February 2019

R Matisons4

February 2016

February 2019

D McLoughlin

February 2016

February 2019

February 2013

February 2016

February 2014

February 2017

February 2015

February 2018

February 2016

February 2019

February 2013

February 2016

February 2014

February 2017

G Roder

L Tremaine

2,566

5,198

6,218

1,450

7,445

8,051

5,541

4,239

3,829

4,603

8,728

7,078

6,933

4,249

February 2015

February 2018

10,393

February 2016

February 2019

February 2014

February 2017

M Utsler

February 2015

February 2018

February 2016

February 2019

9,887

322

12,228

10,876

30.98

35.18

34.80

31.15

30.98

35.18

34.80

31.15

35.18

34.80

31.15

35.18

34.80

31.15

30.98

35.18

34.80

31.15

30.98

35.18

34.80

31.15

35.18

34.80

31.15

1. Vesting date and exercise date are the same. Vesting is subject to satisfaction of vesting conditions. The minimum total value of the grants for future financial years is nil if relevant vesting
conditions are not satisfied. An estimate of the maximum possible total value in future financial years is the fair value at grant date multiplied by the number of Restricted Shares awarded.

2. Mr Abbott did not meet the definition of KMP under AASB 124 for years prior to 2015. Previous years comparative figures are not shown.

3. Mr Gregory did not meet the definition of KMP under AASB 124 for years prior to 2013. Previous years comparative figures are not shown.

4. Mr Matisons did not meet the definition of KMP under AASB 124 for years prior to 2015. Previous years comparative figures are not shown.

GOVERNANCEWOODSIDE PETROLEUM LTD GOVERNANCE
Table 21 – Summary of executives KMPs’ interests in RTSR-tested VPRs1

The following table summarises the interests of executive KMP in RTSR-tested VPRs that were granted as LTA for the 2010 to 2015
Performance Years.

Name

Allocation
date

Vesting
date2,3

Awarded but
not vested

Vested in
2015

% of total
vested

Lapsed in
2015

Fair value4
of VPRs

March 2012

March 2015

51,769

40,380

11,389

February 2013 February 2018

150,665

P Coleman

February 2014 February 2019

156,940

February 2015 February 2020

167,316

February 2016 February 2021

153,833

February 2011 February 2015

M Abbott5

March 2012

March 2015

R Edwardes

February 2016 February 2021

February 2013 February 2018

February 2014 February 2019

February 2015 February 2020

February 2016 February 2021

February 2011 February 2015

March 2012

March 2015

S Gregory6

February 2014 February 2019

February 2015 February 2020

February 2016 February 2021

February 2014 February 2019

P Loader

February 2015 February 2020

February 2016 February 2021

February 2011 February 2015

R Matisons5

March 2012

March 2015

1,799

2,549

9,425

11,923

19,780

21,078

19,379

1,239

2,721

10,000

11,276

10,367

7,536

16,150

14,849

3,029

4,284

February 2016 February 2021

10,688

D McLoughlin

February 2016 February 2021

G Roder

L Tremaine

February 2013 February 2018

February 2014 February 2019

February 2015 February 2020

February 2016 February 2021

February 2011 February 2015

March 2012

March 2015

February 2013 February 2018

February 2014 February 2019

February 2015 February 2020

February 2016 February 2021

February 2014 February 2019

M Utsler

February 2015 February 2020

February 2016 February 2021

1. For valuation purposes all VPRs are treated as if they will be equity settled.

7,068

5,774

17,940

18,932

17,407

4,207

7,564

14,631

16,560

18,036

16,583

1,676

21,219

19,509

1,079

1,988

743

2,122

1,817

3,342

2,524

5,900

720

561

496

599

1,212

942

1,683

1,664

21.36

15.90

20.77

17.45

17.39

20.02

21.36

17.39

15.90

20.77

17.45

17.39

20.02

21.36

20.77

17.45

17.39

20.77

17.45

17.39

20.02

21.36

17.39

15.90

20.77

17.45

17.39

20.02

21.36

15.90

20.77

17.45

17.39

20.77

17.45

17.39

2. Vesting date and exercise date are the same. Vesting is subject to satisfaction of vesting conditions. The minimum total value of the grants for future financial years is nil if relevant vesting

conditions are not satisfied. An estimate of the maximum possible total value in future financial years is the fair value at grant date multiplied by the number of VPRs awarded.

3. Vesting date is 25 February 2014 or 25 February 2015 in respect of February 2011 allocations and 1 March 2015 or 1 March 2016 in respect of March 2012 allocations. Vesting date is
22 February 2017 or 22 February 2018 in respect of February 2013 allocations, 21 February 2018 or 21 February 2019 in respect of February 2014 allocations and 20 February 2019 or
20 February 2020 in respect of the February 2015 allocations. Vesting date is 19 February 2020 or 19 February 2021 in respect to the February 2016 allocations.

4. In accordance with the requirements of AASB 2 Share-based Payment, the fair value of rights as at their date of grant has been determined by applying the Binomial or Black Scholes option pricing

technique. The fair value of rights is amortised over the vesting period, such that ‘total remuneration’ includes a portion of the fair value of unvested equity compensation during the year.
The amount included as remuneration is not related to or indicative of the benefit (if any) that individual executives may ultimately realise should these equity instruments vest.

5. Mr Abbott and Mr Matisons did not meet the definition of KMP for the years prior to 2015. Comparative figures are not shown.

6. Mr Gregory did not meet the definition of KMP for the years prior to 2013. Comparative figures are not shown.

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD ANNUAL REPORT 2015
Table 22 and Table 23 summarise the interests of executive KMP in Equity Rights granted under the WEP and SWEP, respectively.

Table 22 – Summary of executive KMPs’ interests in Equity Rights under the WEP

Name

M Abbott2

S Gregory

R Matisons2

Grant date

1 October 2012

1 October 2015

1 October 2012

1 October 2013

1 October 2014

1 October 2015

1 October 2012

1 October 2015

D McLoughlin

1 October 2015

L Tremaine

1 October 2012

1 October 2013

1 October 2014

1 October 2015

Number of Equity
Rights granted

Number of Equity
Rights which have
lapsed/forfeited

Number of Equity
Rights which have
vested during 2015

Fair Value of
Equity Rights1

1,500

2,300

2,000

3,100

2,300

1,500

2,300

2,000

3,100

2,300

1,500

2,000

1,500

2,000

31.99

18.07

31.99

30.47

31.26

18.07

31.99

18.07

31.99

30.47

31.26

18.07

1. The fair value of Equity Rights as at their date of grant has been determined by reference to the share price at acquisition. The fair value of Equity Rights is amortised over the vesting period,

such that ‘total remuneration’ includes a portion of the fair value of unvested equity compensation during the year. The amount included as remuneration is not related to or indicative of the benefit
(if any) that individual executives may ultimately realise should these equity instruments vest. The minimum total value in future financial years is nil if relevant vesting conditions are not satisfied.
An estimate of the maximum possible total value in future financial years is the fair value as shown above multiplied by the number of Equity Rights awarded.

2. Mr Abbott and Mr Matisons did not meet the definition of KMP for the years prior to 2015. Comparative figures are not shown.

Table 23 – Summary of executive KMPs’ interests in Equity Rights under the SWEP

Name

P Loader

L Tremaine

M Utsler

Grant date

1 October 2014

Number of Equity
Rights granted

Number of Equity
Rights which have
lapsed/forfeited

Number of Equity
Rights which have
vested during 2015

Fair Value of
Equity Rights1

11,960

14,350

31.26

1. The fair value of Equity Rights as at their date of grant has been determined by reference to the share price at acquisition. The fair value of Equity Rights is amortised over the vesting period,

GOVERNANCEWOODSIDE PETROLEUM LTD GOVERNANCE
Table 24 – Total remuneration paid to non-executive directors in 2015 and 2014

The following table provides a detailed breakdown of the components of remuneration for each of the company’s
non-executive directors.

Non-executive
director

M Chaney

M Cilento

F Cooper

C Haynes

A Jamieson

D McEvoy

S Ryan

G Tilbrook

2015

2014

2015

2014

2015

2014

2015

2014

2015

2014

2015

2014

2015

2014

2015

2014

Short-term

Post employment

Cash salary and fees

Pension super

Salaries, fees and allowances

Company contributions to
superannuation

543,228

632,197

195,346

231,062

219,604

265,694

217,358

256,820

233,393

275,752

236,848

255,854

198,500

234,803

198,500

16,685

51,607

59,294

18,558

21,666

20,862

18,440

23,991

18,858

22,017

15,176

1,275

Total

594,835

691,491

213,904

252,728

240,466

284,134

217,358

256,820

233,393

275,752

236,848

279,845

217,358

256,820

213,676

17,960

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD ANNUAL REPORT 2015Table 25 – KMP shareholdings

Details of shares held by KMP (including their personally related entities1) for the 2015 financial year are as follows:

Name

Opening
holding2

NEDSP3

Equity Rights
vested

Restricted
Shares granted

Net change –
other

Closing
holding

Non-executive directors

2015

1,344

1,224

1,318

1,170

M Chaney

M Cilento

F Cooper

C Haynes

A Jamieson

D McEvoy

S Ryan

G Tilbrook

Executives
P Coleman
M Abbott4
R Edwardes

S Gregory

P Loader
R Matisons5
D McLoughlin6
G Roder

L Tremaine

M Utsler

20,000

2,086

1,960

3,399

6,460

8,040

1,875

7,153

108,648

10,328

5,921

1,450

8,432

22,353

322

20,000

2,086

3,304

4,623

7,778

8,040

3,045

7,153

209,153
10,948

20,045

18,008

8,895
20,760

158

17,160

47,640

12,550

55,171
6,083

6,889

9,207

14,894

45,334
4,287

9,717

5,198

7,445
5,324

158

8,728

10,393

12,228

578

6,229

1. Personally related entities include a KMP's spouse, dependants or entities over which they have direct control or significant influence.

2. Opening holding represents amounts carried forward in respect of KMP.

3. Related to participation in the Non-executive Directors' Share Plan (NEDSP).

4. Mr Abbott was appointed to KMP on 1 January 2015.

5. Mr Matisons was appointed to KMP on 1 January 2015.

6. Mr McLoughlin was appointed to KMP on 22 January 2015.

Table 26 - Executive KMPs’ interests in Variable Pay Rights (VPR) and Equity Rights (ER)

The following table summarises the movements in the interests of KMP in VPRs and ERs during the 2015 financial year.

Name

Executives
P Coleman
M Abbott1
R Edwardes

S Gregory

P Loader
R Matisons2
D McLoughlin3
G Roder

L Tremaine
M Utsler3

At
1 January 2015

Allocated in
2015

374,165

31,703

28,031

19,496

23,714

66,792

16,026

167,316

9,496

21,078

13,576

16,150
13,849

2,658

18,932

20,336

21,219

1. Mr Abbott was appointed to KMP on 1 January 2015.

2. Mr Matisons was appointed to KMP on 1 January 2015.

3. Mr McLoughlin was appointed to KMP on 22 January 2015.

Net change –
other

At 31 December
2015

2015

Vested in
2015

(55,171)

(6,083)

(6,889)

(9,207)

(11,389)

22,097

(1,095)

33,006

(14,894)

(3,347)

474,921

25,510

52,781

33,623

35,646
37,648

2,658

42,646

68,887

37,245

GOVERNANCEWOODSIDE PETROLEUM LTD GOVERNANCEDIRECTORS’ REPORT

Indemnification and insurance of
directors and officers
The company’s constitution requires the
company to indemnify each director,
secretary, executive officer or employee
of the company or its wholly owned
subsidiaries against liabilities (to the
extent the company is not precluded by
law from doing so) incurred in or arising
out of the conduct of the business of the
company or the discharge of the duties
of any such person. The company has
entered into deeds of indemnity with each
of its directors, secretaries, certain senior
executives, and employees serving as
officers on wholly owned or partly owned
companies of Woodside in terms of the
indemnity provided under the company’s
constitution.

From time to time, Woodside engages its
external auditor, Ernst & Young, to conduct
non-statutory audit work and provide other
services in accordance with Woodside’s
External Auditor Guidelines. The terms of
engagement include an indemnity in favour
of Ernst & Young:

against all losses, claims, costs,

expenses, actions, demands, damages,
liabilities or any proceedings (liabilities)
incurred by Ernst & Young in respect of
third party claims arising from a breach
by the Group under the engagement
terms; and

for all liabilities Ernst & Young has to

the Group or any third party as a result
of reliance on information provided by
the Group that is false, misleading or
incomplete.

The company has paid a premium under
a contract insuring each director, officer,
secretary and employee who is concerned
with the management of the company or
its subsidiaries against liability incurred in
that capacity. Disclosure of the nature of
the liability covered by and the amount of
the premium payable for such insurance is
subject to a confidentiality clause under the
contract of insurance. The company has
not provided any insurance for the external
auditor of the company or a body corporate
related to the external auditor.

Non-audit services and auditor
independence declaration

Details of the amounts paid or payable to
the external auditor of the company, Ernst
& Young, for audit and non-audit services
provided during the year are disclosed in
note E.5 to the Financial Report.

Based on advice provided by the Audit &
Risk Committee, the directors are satisfied
that the provision of non-audit services

by the external auditor during the financial
year is compatible with the general
standard of independence for auditors
imposed by the Corporations Act for the
following reasons:

all non-audit services were provided in
accordance with Woodside’s External
Auditor Policy and External Auditor
Guidelines; and

all non-audit services were subject to
the corporate governance processes
adopted by the company and have been
reviewed by the Audit & Risk Committee
to ensure that they do not affect the
integrity or objectivity of the auditor.

Signed in accordance with a resolution of
the directors.

M A Chaney, AO
Chairman

Perth, Western Australia
17 February 2016

Further information on Woodside’s policy
in relation to the provision of non-audit
services by the auditor is set out in
section 7 of the Corporate Governance
Statement.

P J Coleman
Chief Executive Officer and
Managing Director

Perth, Western Australia
17 February 2016

Auditor’s Independence Declaration
to the directors of Woodside
Petroleum Ltd

As lead auditor for the audit of Woodside
Petroleum Ltd for the financial year ended
31 December 2015, I declare to the best of
my knowledge and belief, there have been:

a) no contraventions of the auditor

independence requirements of the
Corporations Act 2001 in relation to the
audit; and

b) no contraventions of any applicable

code of professional conduct in relation
to the audit.

This declaration is in respect of Woodside
Petroleum Ltd and the entities it controlled
during the financial year.

Ernst & Young

R J Curtin
Partner

Perth, Western Australia
17 February 2016

Liability limited by a scheme approved under Professional
Standards Legislation.

The auditor independence declaration,
as required under section 307C of the
Corporations Act, is set out on this page
and forms part of this report.

Proceedings on behalf of
the company

No proceedings have been brought
on behalf of the company, nor has any
application been made in respect of
the company, under section 237 of the
Corporations Act.

Rounding of amounts

The amounts contained in this report
have been rounded to the nearest million
dollars under the option available to the
company under Australian Securities and
Investments Commission Class Order
98/100 dated 1 July 1998.

Directors’ relevant interests in
Woodside shares as at date of report

Director

M A Chaney

M A Cilento

P J Coleman1,2

F Cooper

C M Haynes

A Jamieson

D I McEvoy

S E Ryan

G T Tilbrook

Relevant interest
in shares

20,000

2,086

209,153

3,304

4,623

7,778

8,040

3,045

7,153

1. Mr Coleman holds variable pay rights under his CEO

incentive arrangements, details of which are set out in the
Remuneration Report on page 59.

2. Mr Coleman will be allocated restricted shares and variable

pay rights under his CEO incentive arrangements on
19 February 2016, as set out in the Remuneration Report
on page 59.

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD ANNUAL REPORT 2015FINANCIAL
REPORT 2015

WOODSIDE PETROLEUM LTD FINANCIAL REPORT

FINANCIAL REPORTCONTENTS

Financial
statements

Notes to the
financial
statements

Consolidated income statement

Consolidated statement of comprehensive income

Consolidated statement of financial position

Consolidated statement of cash flows

Consolidated statement of changes in equity

About this report

Page 73

Page 74

Page 75

Page 76

Page 77

Page 78

A. Earnings for the year

B. Production and growth assets

B.1 Segment production and

Page 85

A.1 Segment revenue and expenses

A.2 Dividends paid and proposed

A.3 Earnings per share

A.4 Taxes

Page 80

Page 82

growth assets

B.2 Exploration and evaluation

B.3 Oil and gas properties

B.4 Impairment of oil and gas

properties

B.5 Significant production and
growth asset acquisitions

C. Debt and capital

D. Other assets and liabilities

C.1 Cash and cash equivalents

C.2 Interest-bearing liabilities

C.3 Financing facilities

C.4 Contributed equity

C.5 Other reserves

E. Other items

E.1 Contingent liabilities and assets

E.2 Leases

E.3 Employee benefits

E.4 Related party transactions

E.5 Auditor remuneration

E.6 Events after the end of the

reporting period

Page 91

Page 92

Page 98

Page 100

D.1 Receivables

D.2 Inventories

D.3 Payables

D.4 Provisions

D.5 Segment assets and liabilities

D.6 Disposal group held for sale

E.7 Joint arrangements

E.8 Parent entity information

E.9 Subsidiaries

E.10 Other accounting policies

Other

Directors’ declaration

Independent audit report

Page 86

Page 87

Page 88

Page 89

Page 94

Page 95

Page 96

Page 100

Page 101

Page 102

Page 104

Page 105

Page 106

Significant changes in the current reporting period
The financial performance and position of the Group was particularly affected by the following events and transactions during the
reporting period:

The purchase of interests in Wheatstone and Balnaves oil in Australia on 2 April 2015, for total cash consideration of US$2,817 million

and the purchase of interests in Kitimat LNG project in Canada on 10 April 2015, for total cash consideration of US$854 million.
For more detail, refer to Note B.5.

The decline in forecast oil prices resulted in an impairment loss of US$1,178 million. For more detail, refer to Note B.4.

In September 2015, management committed to a plan and signed a conditional agreement to sell the Group’s interests in the

Laminaria-Corallina joint operation. The transaction has resulted in the assets and liabilities of the joint operation being reclassified as
assets and liabilities held for sale and an impairment reversal of US$95 million being recognised. For more detail, refer to Notes B.4
and D.6.

Refinancing of the Group’s debt facilities. For more detail, refer to Note C.3.

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD ANNUAL REPORT 2015CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2015

Operating revenue

Cost of sales

Gross profit

Other income

Other expenses

Profit before tax and net finance costs

Finance income

Finance costs

Profit before tax

Petroleum resources rent tax (PRRT) (expense)/benefit

Income tax expense

Profit after tax

Profit attributable to:

Equity holders of the parent

Non-controlling interest

Profit for the year

Basic and diluted earnings per share attributable to equity holders of the parent (US cents)

The accompanying notes form part of the financial report.

Notes

A.1

A.4

E.9

A.3

2015
US$m

5,030

(3,073)

1,957

(1,553)

441

(89)

356

(131)

(112)

113

3.2

2014
US$m

7,435

(2,883)

4,552

(911)

3,672

(178)

3,509

(1,081)

2,516

2,414

102

2,516

293.4

FINANCIAL REPORTWOODSIDE PETROLEUM LTD FINANCIAL REPORT

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2015

Profit for the year

Other comprehensive income

Items that may be reclassified to profit or loss in subsequent periods:

Loss on available-for-sale financial assets reclassified to profit or loss

Translation loss reclassified to profit or loss

Items that will not be reclassified to profit or loss in subsequent periods:

Remeasurement gains/(losses) on defined benefit plan

Other comprehensive income for the year, net of tax

Total comprehensive income for the year

Total comprehensive income attributable to:

Equity holders of the parent

Non-controlling interest

Total comprehensive income for the year

The accompanying notes form part of the financial report.

2015
US$m

2014
US$m

113

2,516

142

(6)

2,510

2,408

102

2,510

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD ANNUAL REPORT 2015

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2015

Notes

2015
US$m

2014
US$m

Current assets

Cash and cash equivalents

Receivables

Inventories

Tax receivable

Other assets

Disposal group held for sale

Total current assets

Non-current assets

Receivables

Inventories

Other financial assets

Other assets

Exploration and evaluation assets

Oil and gas properties

Other plant and equipment

Deferred tax assets

Total non-current assets

Total assets

Current liabilities

Payables

Interest-bearing liabilities

Tax payable

Other financial liabilities

Other liabilities

Provisions

Liabilities associated with disposal group held for sale

Total current liabilities

Non-current liabilities

Interest-bearing liabilities

Deferred tax liabilities

Other financial liabilities

Other liabilities

Provisions

Total non-current liabilities

Total liabilities

Net assets

Equity

Issued and fully paid shares

Shares reserved for employee share plans

Other reserves

Retained earnings

Equity attributable to equity holders of the parent

Non-controlling interest

Total equity

The accompanying notes form part of the financial report.

C.1

D.1

D.2

A.4

D.6

D.1

D.2

B.2

B.3

A.4

D.3

C.2

A.4

D.4

D.6

C.2

A.4

D.4

C.4

C.5

E.9

122

489

170

106

145

3,268

478

247

1,079

4,042

2,528

19,236

770

22,760

23,839

813

215

156

1,268

17,534

1,052

20,040

24,082

605

629

440

189

1,304

1,941

4,364

1,390

1,653

7,510

8,814

1,957

1,637

123

1,755

5,482

7,423

15,025

16,659

6,547

(27)

963

6,743

14,226

799

15,025

6,547

(38)

920

8,447

15,876

783

16,659

FINANCIAL REPORTWOODSIDE PETROLEUM LTD FINANCIAL REPORT

CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 December 2015

Cash flows from operating activities

Profit after tax for the period

Adjustments for:

Non-cash items

Depreciation and amortisation

Impairment of oil and gas properties

Loss on disposal of exploration and evaluation assets

(Gain)/loss on disposal of oil and gas properties

Loss on disposal of investment

Change in fair value of derivative financial instruments

Net finance costs

Tax expense

Exploration and evaluation written off

Other

Changes in assets and liabilities

(Increase)/decrease in trade and other receivables

Decrease/(increase) in inventories

Increase/(decrease) in provisions

(Increase)/decrease in other assets and liabilities

Increase in trade and other payables

Cash generated from operations

Purchases of shares and payments relating to employee share plans

Interest received

Dividends received

Interest paid

Income tax paid

PRRT paid

Payments for restoration

Payments for carbon tax

Net cash from operating activities

Cash flows from/(used in) investing activities

Payments for capital and exploration expenditure

Proceeds from disposal of exploration and evaluation assets

Proceeds from disposal of oil and gas properties

Payments for acquisition of joint arrangements net of cash acquired

B.5

Net cash used in investing activities

Cash flows from/(used in) financing activities

Proceeds from/(repayments of) borrowings

Contributions to non-controlling interests

Dividends paid

Net cash used in financing activities

Net (decrease)/increase in cash held

Cash and cash equivalents at the beginning of the period

Effects of exchange rate changes

Cash and cash equivalents at the end of the period

C.1

The accompanying notes form part of the financial report.

Notes

2015
US$m

2014
US$m

113

2,516

1,539

1,083

1,462

434

(3)

243

131

(28)

(30)

3,323

(45)

(119)

(768)

(10)

(16)

(2)

163

993

(65)

(18)

5,707

(55)

(163)

(550)

(95)

(27)

(52)

2,376

4,785

(1,819)

(3,637)

(5,456)

1,834

(162)

(1,730)

(58)

(3,138)

3,268

(8)

122

(697)

(617)

(1,184)

(182)

(1,753)

(3,119)

1,049

2,223

(4)

3,268

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD ANNUAL REPORT 2015

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2015

l
l

u
f

d
n
a

d
e
u
s
s
I

s
e
r
a
h
s

d
a
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d
e
v
r
e
s
e
r

s
e
r
a
h
S

e
e
y
o
p
m
e

r
o
f

s
n
a
p

e
r
a
h
s

e
v
r
e
s
e
r

s
t
fi
e
n
e
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e
y
o
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E

y
c
n
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r
r
u
c

n
g
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r
o
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n
o
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t
a
s
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a
r
t

e
v
r
e
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e
r

r
i
a
f

t
n
e
m
t
s
e
v
n
I

e
v
r
e
s
e
r

e
u
a
v

d
e
n
a
t
e
R

s
g
n
n
r
a
e

f
o

s
r
e
d
o
h

y
t
i
u
q
E

t
n
e
r
a
p

e
h
t

g
n

i
l
l

o
r
t
n
o
c
-
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N

t
s
e
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e
t
n

y
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i
u
q
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a
t
o
T

Notes

At 1 January 2015

Profit for the year

Other comprehensive income

Total comprehensive income for the year

Employee share plan purchases

Employee share plan redemptions

Share-based payments

Dividends paid

At 31 December 2015

At 1 January 2014

Profit for the year

Other comprehensive income

Total comprehensive income for the year

Employee share plan purchases

Employee share plan redemptions

Share-based payments

Dividends paid

At 31 December 2014

C.4

C.5
US$m US$m US$m US$m US$m US$m US$m US$m US$m

C.4

C.5

E.9

6,547

(38)

161

773

(14)

8,447

15,876

783

16,659

(45)

(56)

6,547

(27)

187

776

(45)

113

142

(45)

(1,730)

(71)

(1,801)

6,743

14,226

799

15,025

6,547

(42)

164

773

(14)

7,797

15,225

733

15,958

(55)

6,547

(38)

(6)

(59)

161

2,414

102

2,516

(6)

2,414

2,408

102

2,510

(55)

(1,764)

(52)

(1,816)

773

(14)

8,447

15,876

783

16,659

The accompanying notes form part of the financial report.

FINANCIAL REPORTWOODSIDE PETROLEUM LTD FINANCIAL REPORT

NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2015

About this report
Woodside Petroleum Ltd (Woodside or the Group) is a for-profit
entity limited by shares, incorporated and domiciled in Australia. Its
shares are publicly traded on the Australian Securities Exchange.
The nature of the operations and principal activities of the
Group are described in the directors’ report and in the segment
information in Note A.1.

The financial report was authorised for issue in accordance with a
resolution of the directors on 17 February 2016.

Statement of compliance
The financial report is a general purpose financial report, which
has been prepared in accordance with the requirements of the
Corporations Act 2001, Australian Accounting Standards (AASBs)
and other authoritative pronouncements of the Australian
Accounting Standards Board. The financial report complies with
International Financial Reporting Standards (IFRS) as issued by the
International Accounting Standards Board.

The accounting policies are consistent with those disclosed in the
Financial Report 2014, except for the impact of all new or amended
standards and interpretations. The adoption of these standards
and interpretations did not result in any significant changes to the
Group’s accounting policies.

Currency
The functional and presentation currency of Woodside Petroleum Ltd
and all its subsidiaries is US dollars.

Transactions in foreign currencies are initially recorded in the
functional currency of the transacting entity at the exchange rates
ruling at the date of transaction. Monetary assets and liabilities
denominated in foreign currencies at the reporting date are
translated at the rates of exchange ruling at that date. Exchange
differences in the consolidated financial statements are taken to
the income statement.

Rounding of amounts
The amounts contained in this report have been rounded to the
nearest million dollars under the option available to the Group under
Australian Securities and Investments Commission (ASIC) Class
Order 98/0100 dated 10 July 1998, unless otherwise stated.

Basis of preparation
The financial report has been prepared on a historical cost basis,
except for derivative financial instruments and certain other
financial assets and financial liabilities, which have been measured
at fair value.

The financial report comprises the financial statements of the
Group and its subsidiaries as at 31 December each year
(refer to Section E). Subsidiaries are fully consolidated from
the date on which control is obtained by the Group and cease
to be consolidated from the date at which the Group ceases to
have control.

The financial statements of subsidiaries are prepared for the
same reporting period as the parent company, using consistent
accounting policies. All intercompany balances and transactions,
including unrealised profits and losses arising from intra-group
transactions, have been eliminated in full.

Non-controlling interests are allocated their share of the net profit
after tax in the consolidated income statement, their share of other
comprehensive income, net of tax in the consolidated statement
of comprehensive income and are presented within equity in the
consolidated statement of financial position, separately from parent
shareholders’ equity.

NOTES TO THE FINANCIAL STATEMENTS

Key estimates and judgements
In applying the Group’s accounting policies, management
continually evaluates judgements, estimates and assumptions
based on experience and other factors, including expectations
of future events that may have an impact on the Group.
All judgements, estimates and assumptions made are
believed to be reasonable based on the most current set of
circumstances known to management. Actual results may
differ from those judgements, estimates and assumptions.
Significant judgements, estimates and assumptions made by
management in the preparation of these financial statements
are found in the following notes:

Note A.4

Note B.2

Note B.3

Note B.4

Note D.4

Note E.7

Taxes

Exploration and evaluation

Oil and gas properties

Page 83

Page 86

Page 87

Impairment of oil and gas properties Page 88

Provisions

Joint arrangements

Page 95

Page 101

Financial and capital risk management
The Board of Directors has overall responsibility for the
establishment and oversight of the Group’s risk management
framework, including review and the approval of the Group’s
risk management strategy, policy and key risk parameters.
The Board of Directors and the Audit & Risk Committee have
oversight of the Group’s internal control system and risk
management process, including the oversight of the internal
audit function.

The Group’s management of financial and capital risks is
aimed at ensuring that available capital, funding and cash
flows are sufficient to:
meet the Group’s financial commitments as and when

they fall due;

maintain the capacity to fund its committed project

developments;

pay a reasonable dividend; and
maintain a long-term credit rating of not less than

‘investment grade’.

The Group monitors and tests its forecast financial position
against these criteria and, in general, will undertake hedging
activity only when necessary to ensure that these objectives
are achieved. Other circumstances that may lead to hedging
activities include the management of exposures relating
to trading activities, the purchase of reserves and the
underpinning of the economics of a new project. It is, and
has been throughout the period, the Group Treasury policy
that no speculative trading in financial instruments shall be
undertaken. Refer to the risk section of the operating and
financial review on page 20 for more information on the
Group’s objectives, policies and processes for managing
financial risk.

The below risks arise in the normal course of the Group’s
business. Risk information can be found in the following
sections:

Section A

Section C

Commodity risk

Foreign exchange risk

Capital risk

Liquidity risk

Interest rate risk

Section D

Credit risk

Page 79

Page 90

Page 93

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD ANNUAL REPORT 2015In this section

This section addresses financial performance of the Group for the reporting period including, where applicable,
the accounting policies applied and the key estimates and judgements made. The section also includes the tax
position of the Group for and at the end of the reporting period.

A. Earnings for the year

A.1 Segment revenue and expenses

A.2 Dividends paid and proposed

A.3 Earnings per share

A.4 Taxes

Page 80

Page 82

Key financial and capital risks in this section

Commodity price risk management
The Group’s revenue is exposed to commodity price fluctuations, in particular oil and gas prices are measured by
monitoring and stress testing the Group’s forecast financial position to sustained periods of low oil and gas prices.
This analysis is regularly performed on the Group’s portfolio and, as required, for discrete projects and acquisitions.

As at reporting date, the Group had no financial instruments with material exposure to commodity price risk.

Foreign exchange risk management
Foreign exchange risk arises from future commitments, financial assets and financial liabilities that are not
denominated in US dollars. The majority of the operations’ revenue is denominated in US dollars. The Group is
exposed to foreign currency risk arising from operating and capital expenditure incurred in currencies other than
US dollars, particularly Australian dollars.

Measuring the exposure to foreign exchange risk is achieved by regularly monitoring and performing sensitivity
analysis on the Group’s financial position.

A reasonably possible change in the exchange rate of the US dollar to the Australian dollar (+10%/-10%), with all
other variables held constant, would not have a material impact on the Group’s equity or the profit or loss in the
current period. Refer to Notes C.1, C.2, D.1 and D.3 for detail of the denomination of cash and cash equivalents,
interest-bearing liabilities, receivables and payables held at 31 December 2015.

Currently, there are no foreign exchange hedge programs in place. Foreign currency is purchased periodically to
meet operational requirements.

NOTES TO THE FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS A: Earnings for the year for the year ended 31 December 2015WOODSIDE PETROLEUM LTD FINANCIAL REPORTA.1 Segment revenue and expenses
Operating segment information
The Group has identified its operating segments based on the
internal reports that are reviewed and used by the executive
management team in assessing performance and in determining
the allocation of resources.

Management monitors the operating results of the Business Units
separately for the purpose of making decisions about resource
allocation and performance assessment. The performance of
operating segments is evaluated based on profit before tax and
net finance costs and is measured in accordance with the Group’s
accounting policies.

Financing requirements, including cash and debt balances, finance
income, finance costs and taxes are managed at a Group level.

Operating segments outlined below are identified by management
based on the nature and geographical location of the business
or venture.

Producing
North West Shelf Project – Exploration, evaluation,
development, production and sale of liquefied natural gas,
pipeline natural gas, condensate, liquefied petroleum gas and
crude oil from the North West Shelf ventures.

Pluto LNG – Exploration, evaluation, development, production
and sale of liquefied natural gas and condensate in assigned
permit areas.

Australia Oil – Exploration, evaluation, development,
production and sale of crude oil in assigned permit areas
(Laminaria, Enfield, Vincent, Stybarrow and Balnaves).

Development
Browse FLNG – Exploration, evaluation and development of
liquefied natural gas and condensate in the Browse area.

Wheatstone LNG – Exploration, evaluation and development
of liquefied natural gas and condensate. This is a new segment
due to the acquisition in the year.

Other
Other segments – This segment comprises the activities
undertaken by Trading and Shipping, United States,
Exploration, International, Canada and Sunrise Business Units.

Unallocated items – Unallocated items comprise primarily
corporate non-segmental items of revenue and expenses
and associated assets and liabilities not allocated to operating
segments as they are not considered part of the core
operations of any segment.

Major customer information
The Group has two major customers which account for 18% and
16% of the Group’s external revenue respectively. The sales are
generated by the Pluto and North West Shelf Business Units
(2014: two customers; 19% and 14%).

Geographical information

Revenue from external
customers1

Non-current assets2

2015
US$m

532

4,207

214

2014
US$m

2015
US$m

2014
US$m

586

20,763

18,957

6,705

103

1,171

Australia

Asia

USA

Canada

Other

Consolidated

5,030

7,435

21,990

18,988

1. Revenue is attributable to geographic location based on the location of

the customers.

2. Non-current assets exclude deferred tax of US$770 million

(2014: US$1,052 million).

Recognition and measurement

Revenue
Revenue is recognised and measured at the fair value of
consideration received or receivable to the extent that it is probable
that the economic benefits will flow to the Group and the revenue
can be reliably measured.

Revenue from sale of produced hydrocarbons

Revenue from the sale of produced hydrocarbons is recognised
when the significant risks and rewards of ownership have
passed to the customer, which is typically at the point that title
passes. This policy is applied to the Group’s different operating
arrangements.
Revenue is recognised on the basis of the Group’s working
interest in a producing field (the entitlement method).
Revenue from take or pay contracts is recognised in earnings
when the product has been drawn by the customer and recorded
as unearned revenue when not drawn by the customer.

Other operating revenue

Revenue earned from LNG processing, ship chartering and other
services is recognised as the services are rendered.
Trading revenue earned from sales of third party products is
recognised when the risks and rewards of ownership of the
products are transferred to the customer.

Expenses
Royalties and excise duty

Royalties and excise duty under existing regimes are considered
to be production-based taxes and are therefore accrued on the
basis of the Group’s entitlement to physical production.

Depreciation and amortisation

Refer to Note B.3 for details on depreciation and amortisation.

Impairment

Refer to Note B.4 for details on impairment.

Leases

Refer to Note E.2 for details on leases.

Employee benefits

Refer to Note E.3 for details on employee benefits.

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONNOTES TO THE FINANCIAL STATEMENTS A: Earnings for the year for the year ended 31 December 2015WOODSIDE PETROLEUM LTD ANNUAL REPORT 2015A.1 Segment revenue and expenses (cont.)

Producing

Development

Other

t
s
e
W
h
t
r
o
N

f
l
e
h
S

o
t
u
P

l
i

O
a
i
l
a
r
t
s
u
A

e
n
o
t
s
t
a
e
h
W

s
t
n
e
m
g
e
s

r
e
h
t
O

d
e
t
a
c
o

l
l
a
n
U

s
m
e
t
i

e
s
w
o
r
B

d
e
t
a
d

i
l

o
s
n
o
C

2015

2014

2015

2014

2015

2014

2015

2014

2015

2014

2015

2014

2015

2014

2015

2014

US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m

Liquefied natural gas
Pipeline natural gas
Condensate
Oil
Liquefied petroleum gas
Revenue from sale of produced
hydrocarbons
Processing and services revenue
Trading revenue
Other revenue
Operating revenue

Production costs
Royalties and excise
Carbon costs
Insurance
Inventory movement
Onerous lease provision
Costs of production
Land and buildings
Transferred exploration and
evaluation
Plant and equipment
Marine vessels and carriers
Oil and gas properties
depreciation and amortisation
Shipping and direct sales costs
Trading costs
Other cost of sales
Cost of sales

Gross profit

1,028 1,654 2,067 2,909

295

291

140

376

568

308

130

333

510

825

1,788 2,986 2,197 3,242

510

825

180

198

180

198

1,788 2,986 2,377 3,440

510

825

(186)

(243)

(206)

(203)

(237)

(259)

(215)

(400)

(2)

(7)

(15)

(14)

(9)

(12)

(31)

(3)

(17)

(3)

(23)

(128)

(6)

(3)

(425)

(661)

(245)

(195)

(391)

(261)

(7)

(4)

(71)

(55)

(6)

(5)

(36)

(40)

(4)

(5)

(315)

(298)

(746)

(726)

(303)

(270)

(7)

(335)

(314)

(853)

(821)

(307)

(275)

(39)

(47)

(100)

(124)

(39)

(47)

(100)

(124)

(2)

(3)

(799) (1,022) (1,198) (1,140)

(700)

(539)

989 1,964 1,179 2,300

(190)

286

Other income

Exploration and evaluation
expenditure
Amortisation and write-offs
Exploration and evaluation
General, administrative and
other costs
Impairment of oil and
gas properties
Depreciation of other plant and
equipment
Other

Other costs

Other expenses

(3)

(11)

(1)

(12)

(1)

(2)

(5)

(33)

(38)

(22)

(2)

(24)

(38)

(200)

(41)

(1)

(4)

(200)

(203)

(37)

(49)

(18)

(393)

(431)

(27)

(455)

Profit/(loss) before tax and net
finance costs

797 1,922 1,198 2,310

(204)

(163)

(865)

354

355

161

184

(1)

(3)

(9)

(1)

(2)

(5)

3,095 4,563

296

421

377

901

650

1,155

4,496

7,076

180

354

534

198

161

359

5,030

7,435

(1)

(639)

(215)

(28)

(69)

(128)

(705)

(400)

(24)

(23)

(2)

(5)

(2)

(14)

(16)

(1)

(353)

(160)

(351)

(161)

(353)

(182)

(7)

(240)

(245)

(120)

(23)

(360)

(268)

(14)

10 (1,077)

(1,112)

(78)

(59)

(46)

(52)

(1,364)

(1,308)

(7)

(1,495)

(1,426)

(9)

(23)

(10)

(148)

(353)

(185)

(160)

(10)

(501)

(345)

(3,073)

(2,883)

1,957 4,552

(249)

(280)

(153)

(26)

(402)

(306)

(14)

(35)

(57)

(80)

(28)

(141)

(14)

(49)

(374)

(317)

(1,083)

(434)

(21)

(15)

(93)

(15)

(1)

(22)

(18)

(15)

(96) (1,151)

(605)

(96) (1,553)

(911)

(369)

(322)

(116)

(75)

441 3,672

NOTES TO THE FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS A: Earnings for the year for the year ended 31 December 2015WOODSIDE PETROLEUM LTD FINANCIAL REPORT

A.2 Dividends paid and proposed

A.4 Taxes

2015

2014
US$m US$m

(a) Dividends paid during the financial year

(a) Tax expense comprises

Prior year fully franked final dividend US$1.44,
paid on 25 March 2015 (2014: US$1.03, paid on
26 March 2014)

Current year fully franked interim dividend
US$0.66 paid on 23 September 2015
(2014: US$1.11, paid on 24 September 2014)

1,186

849

PRRT

Current tax benefit

Deferred tax expense/(benefit)

PRRT expense/(benefit)

544

915

1,730

1,764

Income tax

Current year

2015

2014
US$m US$m

(29)

160

131

(83)

(5)

(88)

Current tax expense

Deferred tax (benefit)/expense

283

(168)

1,018

(b) Dividend declared subsequent to the
reporting period end (not recorded as liability)

Final dividend US$0.43 (2014: US$1.44)

354

1,186

Franking credits available for the subsequent
periods

2,808

2,257

Tax expense

Adjustment to prior years

Current tax benefit

Deferred tax expense

Income tax expense

Current year dividends per share (US cents)

109

255

(b) Reconciliation of income tax expense

A.3 Earnings per share

Profit before tax

PRRT (expense)/benefit

Profit before income tax

Profit attributable to equity holders of
the parent (US$m)

Weighted average number of shares
on issue

Basic and diluted earnings per share
(US cents)

2015

2014

Income tax expense calculated at 30%

Non-deductible/(assessable) items

2,414

Foreign expenditure not brought to account

Over provided in prior years

822,943,960

822,771,118

Foreign exchange impact on tax expense

3.2

293.4

Income tax expense

Earnings per share is calculated by dividing net profit for the year
attributable to ordinary equity holders of the parent by the weighted
average number of ordinary shares outstanding during the year.
The weighted average number of shares makes allowance for
shares reserved for employee share plans.

Profit before tax

Non-PRRT assessable profits

PRRT projects profit before tax

PRRT expense calculated at 40%

Augmentation-Pluto

Performance rights of 9,243,434 (2014: 8,975,093) are considered
to be contingently issuable and have not been allowed for in the
diluted earnings per share calculation.

There have been no transactions involving ordinary shares
between the reporting date and the date of completion of
this financial report.

Derecognition of quarantined exploration
expenditure-Pluto

Other

PRRT expense/(benefit)

(d) Deferred tax income statement
reconciliation

PRRT

Production and growth assets

Provisions

Augmentation for current year

Derecognition of quarantined exploration
expenditure

Other

PRRT deferred tax expense/(benefit)1

Income tax

Oil and gas properties

Provisions

Other liabilities

Exploration and evaluation assets

Other

Foreign jurisdiction

Income tax deferred tax (benefit)/expense

Deferred tax expense

1. US$20 million (2014: US$nil) movement recognised in assets held

for sale.

(23)

112

243

356

(131)

225

(2)

(50)

112

(167)

156

1,081

993

3,509

3,597

1,079

(20)

(11)

(30)

1,081

356

3,509

(341)

(2,959)

(226)

363

(12)

131

(56)

(226)

363

160

(183)

(42)

(30)

(148)

550

220

(225)

(83)

(88)

412

(119)

(225)

(73)

(5)

272

(189)

(14)

230

225

(e) Deferred tax balance sheet reconciliation

Deferred tax assets

PRRT

Production and growth assets

Provisions

Augmentation for current year

Other

Deferred tax liabilities

PRRT

Production and growth assets

Provisions

Other

Income tax

Oil and gas properties

Provisions

Other liabilities

Exploration and evaluation assets

Other1

(f) Tax receivable/(payable) reconciliation

PRRT receivable/(payable)

Income tax receivable/(payable)

2015

2014
US$m US$m

365

197

226

(18)

770

585

246

225

(4)

1,052

437

(138)

555

(156)

1,238

1,421

(560)

(621)

141

348

(88)

183

302

(61)

1,390

1,637

106

(28)

(412)

(440)

1. US$3 million (2014: US$3 million) movement recognised in other

comprehensive income.

Recognition and measurement
Current tax assets and liabilities are measured at the amount
expected to be recovered from or paid to the taxation authorities.
Deferred tax assets and liabilities are measured at the tax rates that
are expected to apply in the period in which the liability is settled or
the asset is realised. The tax rates and laws used to determine the
amount are based on those that have been enacted or substantially
enacted by the end of the reporting period. Income taxes relating
to items recognised directly in equity are recognised in equity.

Current taxes
Current tax expense is the expected tax payable on the taxable
income for the year and any adjustment to tax payable in respect of
previous years.

Deferred taxes
Deferred tax expense is the movements in the temporary
differences between the carrying amount of an asset or liability in
the statement of financial position and its tax base.

Deferred tax liabilities are recognised for all taxable temporary
differences. Deferred tax assets are recognised for deductible
temporary differences, unused tax losses and tax credits only if it
is probable that sufficient future taxable income will be available to
utilise those temporary differences and losses.

Deferred tax is not recognised if the temporary difference arises
from goodwill or from the initial recognition (other than in a
business combination) of assets and liabilities in a transaction that
affects neither accounting profit nor the taxable profit.

Deferred tax is also not recognised if the taxable difference relates
to investments in subsidiaries, associates and interests in joint
ventures to the extent that the Group is able to control the reversal
of the temporary difference and it is not probable to reverse in the
foreseeable future.

In relation to PRRT, the impact of future augmentation on
expenditure is included in the determination of future taxable
profits when assessing the extent to which a deferred tax asset can
be recognised in the statement of financial position.

Offsetting deferred tax balances
Deferred tax assets and liabilities are offset only if there is a legally
enforceable right to offset current tax assets and liabilities and
when they relate to income taxes levied by the same taxation
authority on either the same taxable entity or different taxable
entities that the Group intends to settle its current tax assets and
liabilities on a net basis. Refer to Notes E.9 and E.10 for detail on
the tax consolidated group.

Key estimates and judgements

(a) Income tax classification
Judgement is required when determining whether a particular
tax is an income tax or another type of tax. Accounting for
deferred tax is applied to income taxes as described above,
but is not applied to other types of taxes, e.g. North West
Shelf royalties and excise. Such taxes are recognised in
the income statement on an appropriate basis. PRRT is
considered, for accounting purposes, to be an income tax.

(b) Deferred tax asset recognition
Foreign tax losses: Deferred tax assets of US$334 million
(2014: US$287 million) relating to unused foreign tax losses
that are available for offset against future taxable profits are
not recognised. The Group has determined it is not probable
that the assets will be utilised based on current planned
activities in those regions.

PRRT: Deferred tax assets of US$3,466 million
(2014: US$3,389 million) on the deductible temporary
differences have not been recognised on the basis that
deductions from future augmentation of the deductible
temporary difference will be sufficient to offset future taxable
profit. US$3,028 million (2014: US$3,389 million) relates to the
transition of the North West Shelf Project, US$363 million
(2014: US$nil) relates to the quarantined exploration spend of
the Pluto Project and US$75 million (2014: US$nil) relates to the
general expenditure of the Wheatstone Project. Future taxable
profits were determined using the same assumptions disclosed
in Note B.4 and a long-term bond rate of 2.7% for the purposes
of augmentation.

Had an alternative approach been used to assess recovery of
the deferred tax assets, whereby future augmentation was not
included in the assessment, the estimated deferred tax assets
would be recognised, with a corresponding benefit to income
tax expense. It was determined that the approach adopted
provides the most meaningful information on the implications
of the PRRT regime, whilst ensuring compliance with
AASB 112 Income Taxes.

NOTES TO THE FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS A: Earnings for the year for the year ended 31 December 2015WOODSIDE PETROLEUM LTD FINANCIAL REPORTIn this section

This section addresses core producing (oil and gas properties) and strategic growth (exploration and evaluation)
assets position of the Group at the end of the reporting period including, where applicable, the accounting policies
applied and the key estimates and judgements made. The section also includes the impairment position of the
Group at the end of the reporting period.

B. Production and growth assets

B.1 Segment production and growth assets

B.2 Exploration and evaluation

B.3 Oil and gas properties

B.4 Impairment of oil and gas properties

B.5 Significant production and growth asset acquisitions

Page 85

Page 86

Page 87

Page 88

Page 89

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONNOTES TO THE FINANCIAL STATEMENTS B: Production and growth assets for the year ended 31 December 2015WOODSIDE PETROLEUM LTD ANNUAL REPORT 2015B.1 Segment production and growth assets

Producing

Development

Other

t
s
e
W
h
t
r
o
N

f
l
e
h
S

o
t
u
P

l
i

O
a
i
l
a
r
t
s
u
A

e
n
o
t
s
t
a
e
h
W

s
t
n
e
m
g
e
s

r
e
h
t
O

d
e
t
a
c
o

l
l
a
n
U

s
m
e
t
i

e
s
w
o
r
B

d
e
t
a
d

i
l

o
s
n
o
C

2015
2014
US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m

2015

2014

Balance as at 31 December

Oceania

Asia

Africa

The Americas

Europe

402

371

192

173

373

247

Total exploration and evaluation

402

371

192

173

373

247

Balance as at 31 December

Land and buildings

Transferred exploration and
evaluation

Plant and equipment

539

609

417

358

2,532 2,996 11,589 11,947

359

621

Marine vessels and carriers

129

135

Projects in development

339

333

142

406

Total oil and gas properties

3,075 3,548 12,687 13,320

379

665

Additions to exploration and
evaluation

Exploration

Evaluation

Restoration

Additions to oil and gas
properties

(1)

(2)

131

(5)

126

284

2,811

3,095

Oil and gas properties additions

151

157

234

233

154

Capitalised borrowing costs
additions1

Restoration

(144)

241

(16)

160

(7)

138

408

223

396

147

163

3,755

109

3,960

1. Borrowing costs capitalised were at a weighted average interest rate of 3.9% (2014: 4.1%).
Refer to Note A.1 for descriptions of the Group’s segments.

308

348

1,302 1,231

1,173

1,534

385

2,528 1,268

(4)

122

131

1,072

575

652

465

413

- 14,767 15,568

129

135

3,300

766

- 19,236 17,534

187

132

(25)

1,206

129

1,269

135

(25)

1,463

268

4,294

415

110

(58)

539

4,346

967

NOTES TO THE FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS B: Production and growth assets for the year ended 31 December 2015WOODSIDE PETROLEUM LTD FINANCIAL REPORT

B.2 Exploration and evaluation

Year ended 31 December 2015
Carrying amount at 1 January 2015
Additions
Amortisation of licence acquisition costs
Expensed
Transferred exploration and evaluation
Carrying amount at 31 December 2015

Year ended 31 December 2014
Carrying amount at 1 January 2014
Additions
Disposals at written down value
Amortisation of licence acquisition costs
Expensed
Transferred exploration and evaluation
Carrying amount at 31 December 2014

Exploration commitments
Year ended 31 December 2015
Year ended 31 December 2014

Oceania
US$m

Asia
US$m

Africa The Americas
US$m
US$m

Europe
US$m

Total
US$m

1,231
221
-
(100)
(50)
1,302

1,016
240
-
-
(5)
(20)
1,231

142
192

10
42
(6)
(16)
-
30

16
1
-
(7)
-
-
10

130
68

13
20
(2)
(12)
-
19

-
13
-
-
-
-
13

25
24

4
1,179
(10)
-
-
1,173

31
4
(17)
(14)
-
-
4

124
5

10
1
(4)
(3)
-
4

-
10
-
-
-
-
10

53
82

1,268
1,463
(22)
(131)
(50)
2,528

1,063
268
(17)
(21)
(5)
(20)
1,268

474
371

Recognition and measurement
Expenditure on exploration and evaluation is accounted for
in accordance with the area of interest method. The Group’s
application of the accounting policy for the cost of exploring and
of evaluating discoveries is closely aligned to the US GAAP-based
successful efforts method.

Areas of interest are recognised at the field level. All exploration
and evaluation expenditure, including general permit activity,
geological and geophysical costs and new venture activity costs,
is expensed as incurred except for the following:
where the expenditure relates to an exploration discovery that,
at the reporting date, has not been recognised as an area of
interest, as an assessment of the existence or otherwise of
economically recoverable reserves is not yet complete, then it is
capitalised; or

where the expenditure relates to a recognised area of interest

and it is expected that the expenditure will be recouped through
successful exploitation of the area of interest, or alternatively, by
its sale, then it is capitalised.

The costs of acquiring interests in new evaluation and exploration
licences are capitalised. The costs of drilling exploration wells
are initially capitalised pending the results of the well. Costs
are expensed where the well does not result in the successful
discovery of economically recoverable hydrocarbons and the
recognition of an area of interest. Subsequent to the recognition
of an area of interest, all further evaluation costs relating to that
area of interest are capitalised.

Upon approval for the commercial development of an area
of interest, accumulated expenditure for the area of interest is
transferred to oil and gas properties.

In the statement of cash flows, those cash flows associated
with capitalised exploration and evaluation expenditure,
including unsuccessful wells, are classified as cash flows
used in investing activities.

Exploration commitments
The Group has exploration expenditure obligations which are
contracted for, but not provided for in the financial report. These
obligations may be varied from time to time and are expected to be
fulfilled in the normal course of operations of the Group.

Key estimates and judgements

(a) Area of interest
An area of interest (AOI) is defined by the Group as an
individual geographical area whereby the presence of
hydrocarbons is considered favourable or proved to exist.
The Group has established criteria to recognise and maintain
an AOI. There is separate guidance for conventional and
unconventional AOIs.

(b) Impairment of exploration and evaluation assets
The recoverability of the carrying amount of the exploration
and evaluation assets is dependent on successful development
and commercial exploitation, or alternatively, sale of the
respective AOI.

Each potential or recognised AOI is reviewed half-yearly to
determine whether economic quantities of reserves have been
found or whether further exploration and evaluation work is
underway or planned to support continued carry forward of
capitalised costs. Where a potential impairment is indicated,
assessment is performed using a fair value less costs to
dispose method, to determine the recoverable amount for
each AOI to which the exploration and evaluation expenditure
is attributed.

This assessment requires management to make certain
estimates and apply judgement in determining assumptions
as to future events and circumstances, in particular, the
assessment of whether economic quantities of reserves
have been found. Any such estimates and assumptions
may change as new information becomes available. If, after
having capitalised expenditure under the policy, the Group
concludes that it is unlikely to recover the expenditure by future
exploitation or sale, then the relevant capitalised amount will be
written off to the income statement.

Year ended 31 December 2015
Carrying amount at 1 January 2015
Additions
Disposals at written down value
Depreciation and amortisation
Impairment loss
Completions and transfers
Carrying amount at 31 December 2015

At 31 December 2015
Historical cost
Accumulated depreciation and impairment
Net carrying amount

Year ended 31 December 2014
Carrying amount at 1 January 2014
Additions
Disposals at written down value
Depreciation and amortisation
Impairment loss
Completions and transfers
Carrying amount at 31 December 2014

At 31 December 2014
Historical cost
Accumulated depreciation and impairment
Net carrying amount

Land and
buildings
US$m

Transferred
exploration
and evaluation
US$m

Plant and
equipment
US$m

Marine
vessels and
carriers
US$m

Projects in
development
US$m

652
-
-
(78)
-
1
575

1,092
(517)
575

712
-
(2)
(59)
-
1
652

1,091
(439)
652

413
-
(3)
(46)
-
101
465

872
(407)
465

474
-
(9)
(52)
-
-
413

801
(388)
413

15,568
(119)
(4)
(1,364)
(218)
904
14,767

24,181
(9,414)
14,767

16,620
534
(72)
(1,308)
(434)
228
15,568

24,485
(8,917)
15,568

135
-
-
(7)
-
1
129

401
(272)
129

115
-
-
(7)
-
27
135

400
(265)
135

766
4,465
-
-
(865)
(1,066)
3,300

4,223
(923)
3,300

569
433
-
-
-
(236)
766

824
(58)
766

Total
US$m

17,534
4,346
(7)
(1,495)
(1,083)
(59)
19,236

30,769
(11,533)
19,236

18,490
967
(83)
(1,426)
(434)
20
17,534

27,601
(10,067)
17,534

Recognition and measurement
Oil and gas properties are stated at cost less accumulated
depreciation and impairment charges. Oil and gas properties
include initial cost to acquire, construct, install or complete
production and infrastructure facilities such as pipelines and
platforms, capitalised borrowing costs, transferred exploration and
evaluation assets, development wells and the estimated cost of
dismantling and restoration.

Subsequent capital costs, including major maintenance, are
included in the asset’s carrying amount only when it is probable
that future economic benefits associated with the item will flow to
the Group and the cost of the item can be measured reliably.

Depreciation and amortisation
Oil and gas properties and other plant and equipment are
depreciated to their estimated residual values at rates based on
their expected useful lives.

Transferred evaluation and exploration and offshore plant and
equipment are depreciated using the unit of production basis over
proved reserves or proved plus probable reserves. Onshore plant
and equipment is depreciated using a straight-line basis over the
lesser of useful life and the life of proved plus probable reserves.
On a straight-line basis the assets have an estimated useful life of
5-50 years.

All other items of oil and gas properties are depreciated using the
straight-line method over their useful life. They are depreciated
as follows:
Buildings – 24-40 years;
Marine vessels and carriers – 10-40 years;
Other plant and equipment – 5-15 years; and
Land is not depreciated.

Impairment
Refer to Note B.4 for details on impairment.

Capital commitments
The Group has capital expenditure commitments contracted for,
but not provided for in the financial report of US$520 million
(2014: US$89 million).

Key estimates and judgements

Reserves and resources
The estimations of reserves require significant management
judgement and interpretation of complex geological and
geophysical models in order to make an assessment of
the size, shape, depth and quality of reservoirs, and their
anticipated recoveries.

Estimates of oil and natural gas reserves are used to
calculate depreciation, depletion and amortisation charges
for the Group’s oil and gas properties. Judgement is used in
determining the reserve base applied to each asset. Typically,
late life oil assets use proved reserves.

Estimates are reviewed at least annually or when there are
changes in the economic circumstances impacting specific
assets or asset groups. These changes may impact depreciation,
asset carrying values, restoration provisions and deferred tax
balances. If proved reserves estimates are revised downwards,
earnings could be affected by higher depreciation expense or an
immediate write-down of the property’s carrying value.

For more information regarding reserve assumptions, refer to
the reserves and resources statement at page 38 of the
Annual Report.

NOTES TO THE FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS B: Production and growth assets for the year ended 31 December 2015WOODSIDE PETROLEUM LTD FINANCIAL REPORTImpairment of oil and gas properties

B.4
Recognition and measurement

Impairment testing
The carrying amounts of oil and gas properties are assessed
half-yearly to determine whether there is an indication of
impairment. Indicators of impairment include changes in future
selling prices, future costs and reserves. If any such indication
exists, the asset’s recoverable amount is estimated.

Oil and gas properties are assessed for impairment on a cash
generating unit (CGU) basis. CGUs are determined on a field by
field basis, except for Pluto and Wheatstone which are single
CGUs respectively, and North West Shelf, which is split into an
oil CGU and a gas CGU.

Impairment calculations
The recoverable amount of an asset or CGU is determined as the
higher of its value in use and fair value less costs of disposal. Value
in use is determined by estimating future cash flows after taking
into account the risks specific to the asset and discounting it to its
present value using an appropriate discount rate.

If the carrying amount of an asset (or CGU) exceeds its recoverable
amount, the asset (or CGU) is written down and an impairment loss
is recognised in the income statement.

Impairment reversals
If the recoverable amount of an asset or a CGU that has previously
been impaired, subsequently exceeds its carrying amount, the
impairment loss is reversed. The carrying amount of the asset
(or CGU) is increased to the revised estimate of its recoverable
amount, but only to the extent that the asset’s carrying amount
does not exceed the carrying amount that would have been
determined, net of depreciation or amortisation, if no impairment
loss had been recognised.

Inputs to impairment calculation
Future cash flow information used for the value in use calculation
is based on the Group’s latest budget, five-year plan and project
economic plans. Key estimates are disclosed in the ‘Key estimates
and judgements’ section.

Recognised impairment and impairment reversals
The Group assessed each CGU to determine whether an indicator
of impairment or impairment reversal existed. All impairment losses
and reversals are recognised in other expenses. Refer to Note A.1.

The conditional sale of the Laminaria- Corallina assets in the
Australia Oil segment resulted in an impairment reversal of
US$95 million as the asset’s fair value less costs of disposal
exceeded the carrying value. The valuation used level 3 fair value
hierarchy inputs, being the conditional sales price in an orderly
arm’s length transaction.

The decline in forecast oil prices and oil field decline for the
Balnaves oil asset in the Australia Oil segment resulted in an
impairment loss of US$10 million for the oil and gas properties.

The decline in forecast oil and gas prices resulted in an

impairment loss of US$1,168 million (2014: US$434 million) for
the oil and gas properties in the Australia Oil, North West Shelf
and Wheatstone operating segments.

Impairment
charge/(reversal)

Recoverable
amount

2014
2015
US$m US$m US$m US$m

2015

2014

Australia Oil

Enfield oil

Stybarrow

Laminaria-Corallina

Vincent oil

Balnaves

NWS oil

Wheatstone

(95)

200

865
1,083

179

N/A

N/A
434

109

220

224

3,094
3,655

335

N/A

532

N/A
931

All impairment losses recognised against plant and equipment, with the
exception of Wheatstone which is against projects in development.

Key estimates and judgements

Recoverable amount calculation key assumptions
In determining the recoverable amount of assets, in the absence
of quoted market prices, estimates are made regarding the
present value of future cash flows. These estimates require
significant management judgement and are subject to risk and
uncertainty, and hence changes in economic conditions can
also affect the assumptions used and the rates used to discount
future cash flow estimates. Laminaria-Corallina was assessed
using the fair value less costs to dispose method, all other assets
were assessed using the value in use method. The basis for the
estimates used for value in use assessments are set out below:

Inflation rate – an inflation rate of 2.0% has been applied

(2014: 2.5%).

Foreign exchange rates – based on the forward exchange
rates at the date of assessment of three years, reverting
to management’s assumptions, including $0.75 AUD:USD
(2014: $0.90) after five years.

LNG price – based on the terms set out in the relevant

contracts between the Group and its customers. The majority
of LNG sales contracts are linked to an oil price marker,
accordingly the LNG prices used are consistent with oil price
assumptions.

Natural gas price – based on the terms set out in the relevant

contracts between the Group and its customers.
Oil price – oil prices were derived from forward price
curves and long-term views of global supply and
demand, building upon past experience of the industry
and consistent with external sources. Prices are adjusted
based on premiums and discounts applied to the oil price
marker based on the nature and quality of the product produced
at the field. The unadjusted oil prices (US$/bbl) used were:

2016

41.68

2017

47.58

2018

51.90

2019

65.68

2020

74.24

2021

82.81

Discount rate – a range of pre-tax discount rates have been

Prices from 2021 onwards are escalated at 2%.

applied between 9% and 13% (2014: 12% and 13%).

Impairment of oil and gas
properties (cont.)

Sensitivity analysis
It is estimated that changes in the key assumptions would result in a
higher or lower impairment or impairment reversal for the following
CGUs in 2015:

Under the terms of the Sale and Purchase Agreements, Woodside
has acquired the following undivided interests in an arrangement
and interests in Joint Operations:
a 13% interest in the Wheatstone LNG project and a 65%

Sensitivity

NWS oil

Vincent Wheatstone

Cash generating unit

Discount rate: increase 1%

Discount rate: decrease 1%

Long-term oil price:
reduction of US$5 (real)

Long-term oil price
increase of US$5 (real)

(10)

(22)

(17)

(36)

336

(387)

324

(324)

A reasonable possible change in the US$ exchange rate
(+10%/-10%) would not result in a material change to the
impairments recognised.

A reasonable possible change in discount rate (+1%/-1%),
long-term oil price (+US$5/bbl/-US$5/bbl) and US$ exchange
rate (+10%/-10%) would not result in a change greater than
US$5 million to the impairment charge recorded for Enfield,
and results in no change to the impairment charge recorded
for Balnaves.

B.5 Significant production and growth

asset acquisitions

Woodside entered into a binding transaction with Apache
Corporation to acquire Apache’s Wheatstone LNG and Balnaves oil
interests in Australia and Kitimat LNG project interests in Canada,
for an aggregate purchase price of US$2,750 million plus a closing
adjustment of US$921 million.

The Australian Wheatstone LNG and Balnaves oil component of
the transaction successfully closed on 2 April 2015 for total cash
consideration of US$2,817 million, including a closing adjustment of
US$567 million. The closing adjustment represents reimbursement
of Apache’s share of net expenditures in the Wheatstone LNG
project and Julimar-Brunello upstream gas development, changes
in working capital and net receipts from the Balnaves oil project
between the effective date, 1 July 2014, and closing. In addition to
the purchase cash consideration, transaction costs of US$39 million
have been capitalised relating to the acquisition.

The component of the transaction relating to the Canadian Kitimat
LNG project successfully closed on 10 April 2015 for total cash
consideration of US$854 million, including a closing adjustment of
US$354 million. The closing adjustment represents reimbursement
of Apache’s share of net expenditures on the project, changes in
working capital and other customary adjustments for the period
between the effective date, 1 July 2014, and closing. In addition to
the purchase cash consideration, transaction costs of US$12 million
have been capitalised relating to the acquisition.

interest in the Julimar-Brunello upstream gas development,
based in Western Australia;

a 65% interest in the Balnaves oil project, based in Western

Australia; and

a 50% interest in the Kitimat LNG project, including

approximately 320,000 net acres in the Horn River and Liard
Basins, Canada.

The acquisition of the interests in the Wheatstone LNG project,
Julimar-Brunello upstream gas development, Balnaves oil
project and Kitimat LNG project, have been accounted as asset
acquisitions. Except for the 13% interest in the Wheatstone LNG
project, which represents an undivided interest in the project, the
other interests acquired have been classified as Joint Operations.

The consolidated financial statements include the results of the
Joint Operations and undivided interest for the nine-month period
from the acquisition dates.

Assets acquired and liabilities assumed
The identifiable assets and liabilities acquired as at the date of the
acquisition inclusive of transaction costs were:

Balnaves Wheatstone
US$m

US$m

Kitimat
US$m

Exploration and evaluation
assets

Oil and gas properties

Restoration liabilities
assumed

Cash acquired

Net other assets and
liabilities acquired

Total identifiable net
assets at acquisition

Cash flows on acquisition

123

(78)

2,812

(77)

976

(116)

(2)

2,796

866

Purchase cash
consideration

Transaction costs

Total purchase
consideration

Accrued estimated
transaction costs

Net cash acquired

Net cash outflows on
acquisition

Balnaves Wheatstone
US$m

US$m

Kitimat
US$m

(6)

2,757

2,796

(23)

(48)

854

866

(8)

2,725

858

NOTES TO THE FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS B: Production and growth assets for the year ended 31 December 2015WOODSIDE PETROLEUM LTD FINANCIAL REPORTIn this section

This section addresses cash, debt and capital position of the Group at the end of the reporting period including,
where applicable, the accounting policies applied and the key estimates and judgements made.

C. Debt and capital

C.1 Cash and cash equivalents

C.2 Interest-bearing liabilities

C.3 Financing facilities

C.4 Contributed equity

C.5 Other reserves

Page 91

Page 92

Key financial and capital risks in this section
Capital risk management
Capital management is undertaken to ensure that a secure, cost-effective and flexible supply of funds is available
to meet the Group’s operating and capital expenditure requirements. A stable capital base is maintained from
which the Group can pursue its growth aspirations, whilst maintaining a flexible capital structure that allows access
to a range of debt and equity markets to both draw upon and repay capital.

The Dividend Reinvestment Plan (DRP) was approved by the shareholders at the Annual General Meeting in 2003
for activation as required to fund future growth. The DRP was reactivated for the 2015 final dividend and will be
fully underwritten.

A range of financial metrics is monitored including gearing and cash flow leverage, and Treasury policy breaches
and exceptions. The gearing ratio which is net debt divided by total equity (excluding non-controlling interest) plus
net debt is 23.3% (2014: negative 4.5%) at reporting date.

Liquidity risk management
Liquidity risk arises from financial liabilities of the Group and the Group’s subsequent ability to meet its obligations
to repay financial liabilities as and when they fall due. The liquidity position of the Group is managed to ensure
sufficient liquid funds are available to meet its financial commitments in a timely and cost-effective manner.

The Group’s liquidity position is continually reviewed including cash flow forecasts to determine the forecast
liquidity position and maintain appropriate liquidity levels. At 31 December 2015, the Group has a total of
US$1,722 million (2014: US$6,818 million) available undrawn facilities and cash at its disposal. The maturity profile
of interest-bearing liabilities is disclosed in Note C.2, and trade and other payables is disclosed in Note D.3.
Financing facilities available to the Group are disclosed in Note C.3.

Interest rate risk management
Interest rate risk is the risk that the Group’s financial position will fluctuate due to changes in market interest rates.

The Group’s exposure to the risk of changes in market interest rates relates primarily to financial instruments with
floating interest rates including long-term debt obligations and cash and short-term deposits. The Group aims to
manage its interest rate risk by maintaining an appropriate mix of fixed and floating rate debt. To manage the ratio
of fixed rate debt to floating rate debt, the Group may enter into interest rate swaps.

Cash and short-term deposits are short-term in nature and are therefore monitored to achieve the optimal
outcome.

At reporting date, the Group was exposed to various benchmark interest rates that were not designated in
cash flow hedges, US$122 million (2014: US$3,268 million) on cash and cash equivalents and US$2,166 million
(2014: US$1,300 million) on interest-bearing liabilities (excluding transaction costs).

A reasonably possible change in the London Interbank Offered Rate (LIBOR) (+1.0%/-0.85%), with all variables held
constant, would not have a material impact on the Group’s equity or the profit or loss in the current period.

As at reporting date, the Group had no interest rate swaps.

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONNOTES TO THE FINANCIAL STATEMENTS C: Debt and capital for the year ended 31 December 2015WOODSIDE PETROLEUM LTD ANNUAL REPORT 20152015

2014
US$m US$m

Amounts exclude transaction costs.

629

C.3 Financing facilities
Details of loan facilities at the reporting date are as follows:

C.1 Cash and cash equivalents

Cash and cash equivalents

Cash at bank

Money market deposits

Total cash and cash equivalents

2015

2014
US$m US$m

122

126

3,142

122

3,268

Recognition and measurement
Cash and cash equivalents in the statement of financial position
comprise cash at bank and short-term deposits with an original
maturity of three months or less. Cash and cash equivalents
are stated at face value in the statement of financial position.
For the purposes of the statement of cash flows, cash and cash
equivalents are reported net of outstanding bank overdrafts.

Foreign exchange risk
The Group held US$58 million of cash and cash equivalents at
31 December 2015 (2014: US$98 million) in currencies other than
US dollars (predominantly Australian dollars).

C.2

Interest-bearing liabilities

(a) Interest-bearing liabilities (current)

Debt facilities

(b) Interest-bearing liabilities (non-current)

Bonds

Debt facilities

2,289

1,292

2,075

4,364

665

1,957

Recognition and measurement
Borrowings are initially recognised at fair value less transaction
costs. Borrowings are subsequently carried at amortised cost. Any
difference between the proceeds received and the redemption
amount is recognised in the income statement over the period of
the borrowings using the effective interest method.

All bonds and facilities are subject to various covenants and a
negative pledge restricting future secured borrowings, subject to
a number of permitted lien exceptions. Neither the covenants nor
the negative pledges have been breached at any time during the
reporting period.

Foreign exchange risk
All interest-bearing liabilities are denominated in US dollars.

Fair value
The carrying amount of interest-bearing liabilities approximates
their fair value, with the exception of the Group’s three unsecured
bonds which have a carrying amount of US$2,289 million
(2014: US$1,292 million) and a fair value of US$2,310 million
(2014: US$1,500 million). The fair value of the bonds was
determined using quoted prices in an active market, classified
as Level 1 on the fair value hierarchy. The Group’s repayment
obligations remain unchanged.

Unused facilities
As at reporting date, the Group had the following facilities that were
undrawn at balance date:

Debt facilities

2015

2014
US$m US$m

1,600

3,550

Maturity profile of interest-bearing liabilities
The table below presents the undiscounted cash flows associated
with the Group’s interest bearing liabilities, representing principal
and interest. The figures will not necessarily reconcile with the
amounts disclosed in the consolidated statement of financial
position.

Due for payment in:

1 year or less

1-2 years

2-3 years

3-4 years

4-5 years

More than 5 years

2015

2014
US$m US$m

236

237

1,127

1,387

155

2,137

5,279

734

172

171

744

1,086

3,078

Bi-lateral loan facilities
The Group has 16 bi-lateral loan facilities totalling US$2,100 million.
Details of bi-lateral loan facilities at the reporting date are as
follows:

Number of
facilities

Term (years)

Currency

Extension option

USD

Evergreen

Interest rates are based on LIBOR and margins are fixed at the
commencement of the drawdown period. Interest is paid at the
end of the drawdown period. Evergreen facilities may be extended
continually by a year subject to the bank’s agreement.

Medium Term Notes
On 28 August 2015, the Group established a US$3,000 million
Global Medium Term Notes (MTN) program on the Singapore Stock
Exchange. No Notes have been issued under this program.
The program is not considered to be an unused facility.

Bonds
The Group has three unsecured bonds issued in the United States
of America as defined in Rule 144A of the US Securities Act as set
out below:
the 2019 US$600 million bond has a fixed rate coupon of

8.75% p.a. and matures on 1 March 2019;

the 2021 US$700 million bond has a fixed rate coupon of

4.60% p.a. and matures on 10 May 2021; and

the 2025 US$1,000 million bond has a fixed rate coupon of

3.65% p.a. and matures on 5 March 2025.

Interest on the bonds is payable semi-annually in arrears.

NOTES TO THE FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS C: Debt and capital for the year ended 31 December 2015WOODSIDE PETROLEUM LTD FINANCIAL REPORTC.3 Financing facilities (cont.)
Japan Bank for International Cooperation (JBIC) Facility
On 24 June 2008, the Group entered into a committed loan
facility totalling US$1,500 million (JBIC Facility). The JBIC Facility
comprises a 15-year, US$1,000 million tranche with JBIC (JBIC
Tranche), and a five-year, US$500 million commercial tranche with
a syndicate of eight Australian and international banks arranged by
the Bank of Tokyo-Mitsubishi UFFJ, Ltd (Commercial Tranche).
The Commercial Tranche has subsequently been repaid, with the
final payment made on 28 February 2013. There is a prepayment
option for the JBIC Tranche. Interest rates are based on LIBOR.
Interest is payable semi-annually in arrears and the principal
amortises on a straight-line basis, with equal instalments of principal
due on each interest payment date (every six months) starting on
7 January 2012. Under the JBIC Facility, 90% of the receivables
from designated Pluto LNG Project Sale and Purchase Agreements,
are secured in favour of the lenders through a trust structure, with
a required reserve amount of US$30 million. To the extent that
this reserve amount remains fully funded and no default notice or
acceleration notice has been given, the revenue from the Pluto LNG
Project continues to flow directly to the Group from the
trust account.

Syndicated facility
On 3 July 2015, the Group executed an unsecured US$1,000 million
syndicated loan facility. The syndicated loan facility comprises two
equal tranches with tenors of three and five years at interest rates
of USD LIBOR plus 0.9% and USD LIBOR plus 1.15% respectively.
Interest is paid at the end of the drawdown period.

(b) Shares reserved for employee share plans

Year ended 31 December 2015

Opening balance

Purchases during the year

Vested during the year

Amounts at 31 December 2015

Year ended 31 December 2014

Opening balance

Purchases during the year

Vested during the year

Amounts at 31 December 2014

Recognition and measurement

Number
of shares

US$m

937,442

1,880,385

(1,832,025)

985,802

902,040

1,366,933

(1,331,531)

937,442

(38)

(45)

(27)

(42)

(55)

(38)

Issued capital
Ordinary shares are classified as equity and recorded at the value of
consideration received. The cost of issuing shares is shown in share
capital as a deduction, net of tax, from the proceeds.

Reserved shares
The Group’s own equity instruments, which are reacquired for later
use in employee share-based payment arrangements (reserved
shares), are deducted from equity. No gain or loss is recognised in
the income statement on the purchase, sale, issue or cancellation
of the Group’s own equity instruments.

Details of loan facilities closed out during the reporting period are
as follows:

C.5 Other reserves

Other reserves

Employee benefits reserve

Foreign currency translation reserve

Investment fair value reserve

Reserve

Nature and purpose

2015

2014
US$m US$m

187

776

963

161

773

(14)

920

Employee
benefits
reserve

Foreign
currency
translation
reserve

Investment
fair value
reserve

Used to record share-based payments
associated with the employee share plans and
remeasurement adjustments relating to the
defined benefit plan.

Used to record foreign exchange differences
arising from the translation of the financial
statements of foreign entities from their
functional currency to the Group’s presentation
currency.

Used to record changes in the fair value of the
Group’s available-for-sale financial assets.

Asian syndicated facility
On 8 December 2010, the Group executed a five-year
US$1,100 million syndicated loan facility with 34 banks. The loan
facility was composed of a US$550 million term facility (Facility A)
and a US$550 million revolving facility (Facility B). Interest rates
were based on LIBOR for both facilities and were fixed at the
commencement of the drawdown periods. Interest was paid at
the end of the drawdown period. The facility was repaid in full on
16 July 2015.

364-day revolving credit facilities
The Group had one dual currency (US and Australian dollars)
364-day revolving credit facility totalling US$50 million. Interest
rates were based on LIBOR and were fixed at the commencement
of the drawdown period. Interest was paid at the end of the
drawdown period.

Bridging facilities
The Group entered into five 12-month bridging facilities in
December 2014 totalling US$2,000 million. Interest rates
were based on LIBOR and were fixed at the commencement
of the drawdown period. Interest was paid at the end of the
drawdown period.

C.4 Contributed equity
(a) Issued and fully paid shares

2015
US$m

2014
US$m

823,910,657 (2014: 823,910,657) ordinary
shares

6,547

All shares are a single class with equal rights to dividends, capital
distributions and voting. The company does not have authorised
capital nor par value in respect of its issued shares.

This section addresses other assets and liabilities position at the end of the reporting period including, where
applicable, the accounting policies applied and the key estimates and judgements made.

D. Other assets and liabilities

D.1 Receivables

D.2 Inventories

D.3 Payables

D.4 Provisions

D.5 Segment assets and liabilities

D.6 Disposal group held for sale

Page 94

Page 95

Page 96

Key financial and capital risks in this section
Credit risk management
Credit risk is the risk that a counterparty will not meet its obligation under a financial instrument or customer
contract, leading to a financial loss to the Group. Credit risk arises from the financial assets of the Group, which
comprise trade and other receivables and deposits with banks and financial institutions.

The Group manages its credit risk on trade receivables and financial instruments by predominantly dealing with
counterparties with an investment grade credit rating. Customers who wish to trade on unsecured credit terms are
subject to credit verification procedures. Receivable balances are monitored on an ongoing basis. As a result, the
Group’s exposure to bad debts is not significant. The Group’s maximum credit risk is limited to the carrying amount
of its financial assets.

NOTES TO THE FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS D: Other assets and liabilities for the year ended 31 December 2015WOODSIDE PETROLEUM LTD FINANCIAL REPORTD.1 Receivables

D.2

Inventories

(a) Receivables (current)

Trade receivables1

Other receivables1

Loans receivable2

Dividend receivable

Interest receivable

(b) Receivables (non-current)

Loans receivable2

Defined benefit plan asset

2015

2014
US$m US$m

227

186

300

174

489

478

Interest-free and settlement terms are usually between 6 and 30 days.

2. Loans receivable are due from non-controlling interests.

Recognition and measurement
Trade and other receivables, including receivables from related
parties, are initially recognised at fair value and subsequently
measured at amortised cost less an allowance for uncollectible
amounts. Collectability and impairment are assessed on a regular
basis. Subsequent recoveries of amounts previously written off are
credited against other expenses in the income statement.

The Group’s customers are required to pay in accordance with
agreed payment terms. Depending on the product, settlement
terms are 6 to 30 days from the date of invoice or bill of lading
and customers regularly pay on time. There are no overdue trade
receivables as at the end of the reporting period (2014: nil).

Fair value
The carrying amount of trade and other receivables approximates
their fair value.

Foreign exchange risk
The Group held US$123 million of receivables at 31 December
2015 (2014: US$80 million) in currencies other than US dollars
(predominantly Australian dollars).

(a) Inventories (current)

Petroleum products (at cost)

Goods in transit

Finished stocks

Warehouse stores and materials (at cost)

(b) Inventories (non-current)

Warehouse stores and materials (at cost)

2015

2014
US$m US$m

170

247

Recognition and measurement
Inventories include hydrocarbon stocks, consumable supplies and
maintenance spares. Inventories are valued at the lower of cost
and net realisable value. Cost is determined on a weighted average
basis and includes direct costs and an appropriate portion of fixed
and variable production overheads where applicable. Inventories
determined to be obsolete or damaged are written down to net
realisable value, being the estimated selling price less selling costs.

D.3 Payables
The following table shows the Group’s payables balances and
maturity analysis.

<30
days

30-60
days

>60
days

Total
US$m US$m US$m US$m

Year ended 31 December 2015

Trade payables1

Other payables1

Interest payable2

Total payables

Year ended 31 December 2014

Trade payables1

Other payables1

Interest payable2

Total payables

197

493

692

149

295

446

119

137

159

283

493

813

286

295

605

Interest-free and normally settled on 30-day terms.

2. Details regarding interest-bearing liabilities are contained in Note C.2.

Recognition and measurement
Trade and other payables are carried at amortised cost when goods
and services are received, whether or not billed to the Group, prior
to the end of the reporting period.

Fair value
The carrying amount of payables approximates their fair value.

Foreign exchange risk
The Group held US$507 million of payables at 31 December
2015 (2014: US$410 million) in currencies other than US dollars
(predominantly Australian dollars).

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONNOTES TO THE FINANCIAL STATEMENTS D: Other assets and liabilities for the year ended 31 December 2015WOODSIDE PETROLEUM LTD ANNUAL REPORT 2015D.4 Provisions

Year ended 31 December 2015

At 1 January 2015

Change in provision

Unwinding of present value discount

Transfer to liabilities held for sale

Carrying amount at 31 December 2015

Current

Non-current

Net carrying amount

Year ended 31 December 2014

At 1 January 2014

Change in provision

Unwinding of present value discount

Carrying amount at 31 December 2014

Current

Non-current

Net carrying amount

Recognition and measurement
Provisions are recognised when the Group has a present obligation
(legal or constructive) as a result of a past event, it is probable
that an outflow of resources embodying economic benefits will
be required to settle the obligation and a reliable estimate can be
made of the amount of the obligation.

Restoration of operating locations
Provision is made for the obligation to restore operating locations.
The provision is first recognised in the period in which the
obligation arises. The nature of restoration activities includes the
removal of facilities, abandonment of wells and restoration of
affected areas.

Restoration provisions are updated annually, with the corresponding
movement recognised against the related exploration and
evaluation assets or oil and gas properties.

Over time, the liability is increased for the change in the present
value based on a pre-tax discount rate appropriate to the risks
inherent in the liability. The unwinding of the discount is recorded
as an accretion charge within finance costs. The carrying amount
capitalised in oil and gas properties is depreciated over the useful
life of the related asset (refer to Note B.3).

Costs incurred that relate to an existing condition caused by
past operations and do not have a future economic benefit
are expensed.

Onerous lease
Provision is made for the loss making component of non-
cancellable operating leases. During the period, a US$128 million
provision was recognised (in other provisions) for the remaining
payment obligations under the Balnaves FPSO lease, which ends
in 2018.

Employee benefits
Provision is made for employee benefits accumulated as a result of
employees rendering services up to the end of the reporting period.
These benefits include wages, salaries, annual leave and long
service leave.

Restoration
of operating
locations
US$m

Employee
benefits
US$m

Other
US$m

Total
US$m

1,724

(37)

(156)

1,574

1,548

1,574

1,191

499

1,724

1,720
1,724

172

(31)

141

114

141

176

(4)

172

138

34
172

105

153

(44)

1
48

1,944

(156)

1,868

215

1,653

1,868

1,459

451

1,944

189

1,755
1,944

Liabilities in respect of employees’ services rendered that are not
expected to be wholly settled within one year after the end of the
period in which the employees render the related services are
recognised as long-term employee benefits.

These liabilities are measured at the present value of the estimated
future cash outflow to be made to the employees using the
projected unit credit method. Liabilities expected to be wholly
settled within one year after the end of the period in which the
employees render the related services are classified as short-term
benefits and are measured at the amount due to be paid.

Key estimates and judgements

(a) Restoration obligations
The Group estimates the future removal costs of offshore oil
and gas platforms, production facilities, wells and pipelines at
different stages of the development and construction of assets
or facilities. In most instances, removal of assets occurs many
years into the future. This requires judgemental assumptions
regarding removal date, future environmental legislation, the
extent of reclamation activities required, the engineering
methodology for estimating cost, future removal technologies
in determining the removal cost, and liability specific discount
rates to determine the present value of these cash flows.
The proportion of the non-current balance not expected to be
settled within 15 years is 71%.

(b) Long service leave
Long service leave is measured at the present value of benefits
accumulated up to the end of the reporting period. The liability
is discounted using an appropriate discount rate. Management
requires judgement to determine key assumptions used
in the calculation including future increases in salaries and
wages, future on-costs rates and future settlement dates of
employees’ departures.

NOTES TO THE FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS D: Other assets and liabilities for the year ended 31 December 2015WOODSIDE PETROLEUM LTD FINANCIAL REPORTD.5 Segment assets and liabilities

2015

2014
US$m US$m

Assets and liabilities of the disposal group held for sale
The major classes of assets and liabilities of the Laminaria-Corallina
joint operation disposal group classified as held for sale are
as follows:

2015
US$m

109

145

(156)

(11)

3,417

4,008

13,455

14,046

Assets

764

368

3,165

1,599

1,071

935

233

485

4,375

Cash and cash equivalents

Receivables

Inventories

Oil and gas properties

Deferred tax assets

23,839

24,082

Assets held for sale

2015

2014
US$m US$m

1,729

1,875

456

789

293

267

484

842

5,242

4,098

8,814

7,423

Liabilities

Payables

Tax payable

Provisions

Liabilities directly associated with assets held for sale

Net assets directly associated with disposal group

There are no cumulative income or expenses included in
other comprehensive income relating to the disposal group.

Recognition and measurement
The Group classifies non-current assets and disposal groups as
held for sale if their carrying amounts will be recovered principally
through sale rather than through continuing use. Such non-current
assets and disposal groups classified as held for sale are measured
at the lower of their carrying amount and fair value less costs to
sell. Costs to sell are the incremental costs directly attributable to
the sale, excluding the finance costs and income tax expense.

The criteria for held for sale classification is regarded as met only
when the sale is highly probable and the asset or disposal group
is available for immediate sale in its present condition. Actions
required to complete the sale should indicate that it is unlikely that
significant changes to the sale will be made or that the decision
to sell will be withdrawn. Management must be committed to the
sale expected within one year from the date of the classification.

Property, plant and equipment and intangible assets are not
depreciated or amortised once classified as held for sale.

Assets and liabilities classified as held for sale are presented
separately as current items in the statement of financial position.

(a) Segment assets

NWS

Pluto

Australia Oil

Browse

Wheatstone

Other segments

Unallocated items

(b) Segment liabilities

NWS

Pluto

Australia Oil

Browse

Wheatstone

Other segments

Unallocated items

Refer to Note A.1 for descriptions of the Group’s segments.
Unallocated assets mainly comprise cash and cash equivalents
and the Group’s deferred tax assets. Unallocated liabilities mainly
comprise interest-bearing liabilities and deferred tax liabilities.

D.6 Disposal group held for sale
In September 2015, management committed to a plan and signed a
conditional agreement to sell the Group’s interests in the Laminaria-
Corallina joint operation for a base price of A$0.9 million, plus a
closing adjustment for movements in working capital assets and
liabilities existing at the effective date and for the proceeds of oil
sales received and operating and capital expenditure paid during the
interim period. Accordingly, the joint operations are presented as a
disposal group held for sale. The Laminaria-Corallina joint operation
forms part of the Australia Oil operating segment. The sale is
subject to a number of conditions precedent and is expected to
complete in March 2016.

Impairment reversals relating to the disposal group held
for sale
Immediately before the classification of the assets and liabilities
within the Laminaria-Corallina joint operation as a disposal group
held for sale, the recoverable amount was estimated for certain
items of oil and gas properties and an impairment reversal of
$95 million was recognised (Note B.4). As at 31 December 2015,
there were no asset write-downs as the carrying amount of the
disposal group did not fall below its fair value less costs to sell.

This section addresses information on items which require disclosure to comply with Australian Accounting
Standards and the Australian Corporations Act 2001, however, are not considered critical in understanding the
financial performance or position of the Group. This section includes group structure information and
other disclosures.

E. Other items

E.1 Contingent liabilities and assets

E.2 Leases

E.3 Employee benefits

E.4 Related party transactions

E.5 Auditor remuneration

E.6 Events after the end of the reporting period

E.7 Joint arrangements

E.8 Parent entity information

E.9 Subsidiaries

E.10 Other accounting policies

Page 98

Page 100

Page 101

Page 102

Page 104

NOTES TO THE FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS E: Other items for the year ended 31 December 2015WOODSIDE PETROLEUM LTD FINANCIAL REPORTE.1 Contingent liabilities and assets

(a) Contingent liabilities at reporting date

Not otherwise provided for in the financial report

Contingent liabilities

Guarantees

(b) Contingent assets at reporting date

Not otherwise accounted for in the financial report

Contingent assets (claims made or pending)

2015

2014
US$m US$m

Contingent liabilities relate predominantly to actual or potential
claims of the Group for which amounts are reasonably estimated
but the liability is not probable and therefore the Group has not
provided for such amounts in this financial report. Additionally, there
are a number of other claims and possible claims that have arisen in
the course of business against entities in the Group, the outcome
of which cannot be foreseen at present and for which no amounts
have been included in the table above.

The Group has issued guarantees relating to workers’
compensation liabilities.

Contingent assets relate predominantly to claims receivable by
the Group for which amounts are reasonably estimated but the
receivable is not virtually certain and therefore the Group has not
provided for such amounts in this financial report.

E.2

Leases

2015

2014
US$m US$m

Operating lease commitments

Rents payable on non-cancellable operating
leases, due1

Within one year

After one year but not more than five years

Later than five years

1. Operating lease commitments include those relating to the Balnaves
FPSO lease, refer to Note D.4 for onerous lease provision details.

Subject to the joint operation that utilises the lease, the Group’s
share of actual payments made under operating leases may be
lower than the value of commitments disclosed.

The Group leases assets for operations including floating
production, storage and off-take vessels, helicopters, supply
vessels, cranes, land, mobile offshore drilling units, office premises
and computers.

There are no restrictions placed upon the lessee by entering into
these leases. Renewals are at the option of the Group. Certain
leases contain a clause enabling upward revision of the rental
charge on an annual basis based on the consumer price index. The
Group made payments under operating leases of US$567 million
during the year (2014: US$431 million). A portion of this amount
relates to arrangements containing non-lease elements, which are
not practicable to separate.

Recognition and measurement
Operating lease payments are recognised as an expense in the
income statement on a straight-line basis over the lease term.
Lease incentives received are recognised in the income statement
as a part of total lease expense.

E.3 Employee benefits
(a) Employee benefits
Employee benefits for the reporting period are as follows:

Employee benefits

Share-based payments

Defined contribution plan costs

Defined benefit plan expense

2015
US$m

2014
US$m

239

294

353

416

Recognition and measurement
The Group’s accounting policy for employee benefits other than
superannuation are set out in Note D.4. The policy relating to
share-based payments is set out in Note E.3(c).

All employees of the Group are entitled to benefits on retirement,
disability or death from the Group’s superannuation plan. The majority
of employees are party to a defined contribution scheme and receive
fixed contributions from Group companies and the Group’s legal or
constructive obligation is limited to these contributions. Contributions
to defined contribution funds are recognised as an expense as they
become payable. Prepaid contributions are recognised as an asset to
the extent that a cash refund or a reduction in the future payment is
available. The Group also operates a defined benefit superannuation
scheme, the membership of which is now closed. The asset for the
defined benefit plan at 31 December 2015 was US$13 million
(2014: US$14 million liability).

(b) Compensation of key management personnel
Key management personnel (KMP) compensation for the financial
year is as follows:

2015
US$

2014
US$

Short-term employee benefits

12,202,619

14,435,970

(c) Share plans
The Group provides benefits to its employees (including key
management personnel) in the form of share-based payments
whereby employees render services for shares (equity-settled
transactions).

Woodside equity plan (WEP) and supplementary Woodside
equity plan (SWEP)
WEP is available to all Australian-based employees including
executives, other than the CEO and any executive directors. The
number of Equity Rights (ERs) offered to each eligible employee will
be calculated with reference to salary and performance. The linking
of performance to an allocation allows the Group to recognise and
reward eligible employees for high performance. The ERs have no
further ongoing performance conditions after allocation, and do not
require participants to make any payment in respect of the ERs at
grant or at vesting. SWEP is available to a number of employees
identified as being retention critical. Participants do not make any
payment in respect of the ERs at grant or at vesting. Each ER entitles
the participant to receive a Woodside share on the vesting date three
years after the grant date.

399

557

779

453

684

824

Post employment benefits

Share-based payments

Long-term employee benefits

1,735

1,961

Termination benefits

312,647

134,409

7,084,981

4,180,339

250,114

115,211

519,090

19,850,361

19,385,019

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONNOTES TO THE FINANCIAL STATEMENTS E: Other items for the year ended 31 December 2015WOODSIDE PETROLEUM LTD ANNUAL REPORT 2015E.3 Employee benefits (cont.)
Executive incentive plans (EIP)

Short term awards (STA)
Restricted shares (from 2012) and time-tested Variable Pay Rights
(VPRs) (prior to 2012) are delivered in the form of restricted shares
to executives, including all executive KMP. Restricted shares entitle
their holder to receive dividends. There are no further performance
conditions for vesting of deferred STA. Participants are not required
to make any payments in respect of STA awards at grant or
at vesting.

Long term awards (LTA)
LTA is granted in the form of VPRs to executives, including
all executive KMP. Vesting of LTA is subject to achievement
of relative total shareholder return (RTSR) targets, with 33%
measured against the ASX 50 and the remaining 67% tested
against an international group of oil and gas companies. Subject to
performance, LTA may vest after a four-year performance period.
If any of the LTA does not vest it will be re-tested on the fifth
anniversary, but will only vest if RTSR exceeds the ranking achieved
in the prior year and is at or above the median of the relevant
comparator group. Participants are not required to make any
payments in respect of LTA awards at grant or at vesting.

Recognition and measurement
All compensation under WEP, SWEP and executive share plans is
accounted for as share-based payments to employees for services
provided. The cost of equity-settled transactions with employees is
measured by reference to the fair values of the equity instruments
at the date at which they are granted. The fair value of share-
based payments is recognised, together with the corresponding
increase in equity, over the period in which the vesting conditions
are fulfilled, ending on the date on which the relevant employee
becomes fully entitled to the shares. At each balance sheet date,
the Group reassesses the number of awards that are expected to
vest based on service conditions. The expense recognised each
year takes into account the most recent estimate.

The fair value of the benefit provided for the WEP, SWEP and time-
tested variable pay rights are estimated using the Black-Scholes
option pricing technique. The fair value of the restricted shares is
estimated as the closing share price at grant date. The fair value of
the benefit provided for the RTSR variable pay rights was estimated
using the Binomial or Black-Scholes option pricing technique
combined with a Monte Carlo simulation methodology, where
relevant using historical volatility to estimate the volatility of the
share price in the future.

The number of performance rights and movements for all share plans are summarised as follows:

Year ended 31 December 2015

Opening balance

Granted during the year1,2

Vested during the year

Forfeited during the year

Performance rights at 31 December 2015

Fair value of rights granted during the year

Year ended 31 December 2014

Opening balance

Granted during the year 1,2

Vested during the year

Forfeited during the year

Performance rights at 31 December 2014

Fair value of rights granted during the year

Number of performance rights

Employee plans

Executive plans

WEP

SWEP

STA

LTA

6,286,402

1,974,741

(1,603,731)

(540,572)

6,116,840

38,270

626,123

2,232,777

267,645

(78,417)

(31,081)

610,410

(154,143)

(322,764)

38,270

784,270

2,366,280

US$m

Number of performance rights

Employee plans

Executive plans

WEP

SWEP

STA

LTA

5,998,321

2,016,678

(1,262,072)

(466,525)

6,286,402

52,620

(14,350)

38,270

456,867

264,300

(42,256)

(52,788)

1,885,443

623,872

(276,538)

626,123

2,232,777

US$m

1. For the purpose of valuation, the share price on grant date for the 2015 WEP and SWEP allocations was US$20.89 (2014: US$35.62).
2. For the purpose of valuation, the share price on grant date for the 2015 STA and LTA allocations was US$31.15 (2014: US$34.80).

For more detail on these share plans and performance rights issued to KMPs, refer to the Remuneration Report included in the Directors’
Report (pages 52 to 69).

(d) CEO sign-on incentive shares

Mr Coleman gave up certain rights with his former employer to join Woodside as CEO. To recognise these interests, he was paid a one-off
sign-on incentive. Woodside acquired Woodside shares to the value of US$3 million to be held in trust for Mr Coleman. The final tranche of
these shares vested on 30 May 2014.

NOTES TO THE FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS E: Other items for the year ended 31 December 2015WOODSIDE PETROLEUM LTD FINANCIAL REPORTJoint arrangements
E.7
(a) Interest percentage in joint operations

Producing and developing assets

Oceania

North West Shelf

Enfield and Vincent

Laminaria-Corallina

Stybarrow

Balnaves

Pluto

Wheatstone

Exploration and evaluation assets

Oceania

Browse Basin

Carnarvon Basin

Bonaparte Basin

Outer Canning Basin

New Zealand

Africa

Morocco

Gabon

Cameroon

The Americas

Peru

Kitimat1

Nova Scotia

Asia

Republic of Korea

Myanmar

Europe

Ireland

Canary Islands

Group interest %

2015

2014

12.5 - 50.0

60.0

59.9 - 66.7

50.0

65.0

90.0

13.0 - 65.0

50.0

90.0

30.6 - 75.0

17.0 - 75.0

15.8 - 75.0

15.8 - 90.0

26.7 - 35.0

55.0

70.0

43.9 - 55.0

70.0

25.0 - 75.0

40.0

30.0

35.0

50.0

20.0

40.0

35.0

50.0

40.0 - 55.0

40.0 - 50.0

60.0 - 90.0

30.0

1. On 10 April 2015, Woodside Energy International (Canada) Limited

acquired a 50% interest in Pacific Trail Pipelines Management Inc. and a
50% interest in Pacific Trail Pipelines Limited Partnership. The remaining
50% interests are held by Chevron Canada Limited.

The principal activities of the joint operations above are exploration,
development and production of hydrocarbons. There were no
permits and/or licence areas as at 31 December 2015 which
were subject to government and regulatory approval.

E.4 Related party transactions
(a) Transactions with related parties
The following table provides the total amount of transactions that
were entered into with related parties for the 2014 financial year.
Royal Dutch Shell Group (Shell Group) is no longer deemed a
related party effective from 17 June 2014. We continue to transact
with Shell at an arm’s length basis. The transactions disclosed
below relate to transactions that occurred when Shell Group was
deemed a related party:

Transactions with related parties

Sales to
US$m

Purchases
from
US$m

Receivables
from
US$m

Payables to Commitments

US$m

Entities with significant influence over the Group:

Royal Dutch Shell Group (Shell Group)

Shell Company of Australia

2014

Other members of Shell Group

2014

(b) Terms and conditions of transactions with related parties
Sales to and purchases from related parties were made at arm’s
length on normal market prices and on normal commercial terms.

(c) Transactions with directors
There were no transactions with directors during the year other
than those disclosed in Note E.3(b). During the prior year, as part of
the CEO’s relocation costs, A$200,000 was paid in connection with
transfer duty in Western Australia.

E.5 Auditor remuneration
The auditor of Woodside Petroleum Ltd is Ernst & Young (EY)

2015
US$'000

2014
US$'000

(a) Amounts received or due and receivable for an audit or review of
the financial report of the entity and any other entity in the Group by:

EY Australia

Other EY firms

1,532

143

1,675

1,359

1,432

(b) Amounts received or due and receivable for non-audit services in
relation to the entity or any other entity in the Group by:

EY Australia for other assurance services

EY Australia for other advisory services

EY Australia for taxation services

Other EY firms for other assurance
services

742

400

139

440

400

214

1,284

1,054

E.6 Events after the end of the

reporting period

As announced to the market on 1 February 2016, subsequent
to the year end, the Group was advised by the operator of the
Wheatstone Project that the forecast for first LNG is now mid-
2017. This revised schedule was incorporated in the impairment
assessment of the Wheatstone CGU as discussed in Note B.4.

On 10 February 2016, Woodside Energy Shipping Singapore Pte Ltd
entered into two 15-year shipping vessel charters for $779 million.
The ships are due for delivery in 2016 and 2017.

100

E.7
(b) Interest percentage in joint ventures

E.8 Parent entity information

Group interest %

Entity

Principal activity

2015

2014

Woodside Petroleum Ltd

North West Shelf
Gas Pty Ltd

Marketing services for
ventures in the sale of gas
to the domestic market.

North West Shelf
Liaison Company
Pty Ltd

Liaison for ventures in
the sale of LNG to the
Japanese market.

16.67

Current assets

16.67

Non-current assets

Current liabilities

Non-current liabilities

Net assets

China Administration
Company Pty Ltd
(formerly North West
Shelf Australia LNG)

North West Shelf
Shipping Service
Company Pty Ltd

Marketing services for
ventures in the sale of LNG
to international markets.

16.67

LNG vessel fleet advise.

16.67

Recognition and measurement
Joint arrangements are arrangements of which two or more parties
have joint control. Joint control is the contractual agreed sharing of
control of the arrangement which exists only when decisions about
the relevant activities require unanimous consent of the parties sharing
control. Joint arrangements are classified as either a joint operation
or joint venture, based on the rights and obligations arising from the
contractual obligations between the parties to the arrangement.

To the extent the joint arrangement provides the Group with
rights to the individual assets and obligations arising from the joint
arrangement, the arrangement is classified as a joint operation and
as such the Group recognises its:
assets, including its share of any assets held jointly;
liabilities, including its share of any liabilities incurred jointly;
revenue from the sale of its share of the output arising from

the joint operation;

share of revenue from the sale of the output by the joint

operation; and

expenses, including its share of any expenses incurred jointly.

To the extent the joint arrangement provides the Group with rights
to the net assets of the arrangement, the investment is classified
as a joint venture and accounted for using the equity method.

Key estimates and judgements

Accounting for interests in other entities
Judgement is required in assessing the level of control
obtained in a transaction to acquire an interest in another
entity; depending upon the facts and circumstances in each
case, Woodside may obtain control, joint control or significant
influence over the entity or arrangement. Judgement is applied
when determining the relevant activities of a project and if joint
control is held over them. Relevant activities include, but are
not limited to, work program and budget approval, investment
decision approval, voting rights in joint operating committees,
amendments to permits and changes to joint arrangement
participant holdings. Transactions which give Woodside control of
a business are business combinations. If Woodside obtains joint
control of an arrangement, judgement is also required to assess
whether the arrangement is a joint operation or a joint venture.
If Woodside has neither control nor joint control, it may be in a
position to exercise significant influence over the entity, which is
then accounted for as an associate.

The Group’s interest in Pacific Trail Pipelines Management Inc.
and Pacific Trail Pipelines Limited Partnership were assessed
to be joint operations based upon the underlying draft joint
operating agreement for the Kitimat project.

2015

2014
US$m US$m

373

128

7,073

7,512

(368)

7,078

(271)

(355)

7,014

6,547

(27)

129

296

133

(38)

121

303

7,078

7,014

1,783

1,842

1,776

1,842

Issued and fully paid shares

Shares reserved for employee share plans

Employee benefits reserve

Foreign currency translation reserve

Retained earnings

Total Shareholder Equity

Profit of parent entity

Total comprehensive income of parent entity

Guarantees
Woodside Petroleum Ltd and Woodside Energy Ltd (a subsidiary
company) are parties to a Deed of Cross Guarantee as disclosed
in Note E.9. The effect of the Deed is that Woodside Petroleum
Ltd has guaranteed to pay any deficiency in the event of winding
up of the subsidiary company under certain provisions of the
Corporations Act 2001. The subsidiary company has also given
a similar guarantee in the event that Woodside Petroleum Ltd is
wound up.

Woodside Petroleum Ltd has guaranteed the discharge by a
subsidiary company of its financial obligations under debt facilities
disclosed in Note C.3. Woodside Petroleum Ltd has guaranteed
certain obligations of subsidiaries to unrelated parties on behalf of
their performance in contracts. No liabilities are expected to arise
from these guarantees.

101

NOTES TO THE FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS E: Other items for the year ended 31 December 2015WOODSIDE PETROLEUM LTD FINANCIAL REPORTE.9 Subsidiaries
(a) Subsidiaries

Name of entity

Parent entity

Woodside Petroleum Ltd

Subsidiaries

Company name

Woodside Energy Ltd

Woodside Browse Pty Ltd
Woodside Burrup Pty Ltd

Burrup Facilities Company Pty Ltd
Pluto LNG Pty Ltd
Burrup Train 1 Pty Ltd

Woodside Energy (Algeria) Pty Ltd
Woodside Energy Australia Asia Holdings Pte Ltd 
Woodside Energy (Carbon Capture) Pty Ltd
Woodside Energy Holdings International Pty Ltd
Woodside Energy Mediterranean Pty Ltd
Woodside Energy International (Canada) Limited 

Woodside Energy (Canada LNG) Limited 
Woodside Energy (Canada PTP) Limited 
KM LNG Operating General Partnership 

KM LNG Operating Ltd 

Woodside Energy Holdings Pty Ltd

Woodside Energy Holdings (USA) Inc. 

Woodside Energy (USA) Inc. 

Gryphon Exploration Company 
Woodside Energy (Cameroon) SARL 
Woodside Energy (Gabon) Pty Ltd
Woodside Energy (Ireland) Pty Ltd
Woodside Energy (Korea) Pte Ltd 
Woodside Energy (Myanmar) Pte Ltd 
Woodside Energy (Morocco) Pty Ltd
Woodside Energy (New Zealand) Limited 
Woodside Energy (New Zealand 55794) Limited 
Woodside Energy (Peru) Pty Ltd
Woodside Energy (Tanzania) Limited 

Woodside Energy Holdings (South America) Pty Ltd
Woodside Energia (Brasil) Investimento em
Exploracao de Petroleo Ltda. 
Woodside Energy Holdings (UK) Pty Ltd
Woodside Energy (UK) Limited 

Woodside Energy (France) SAS 
Woodside Energy Iberia S.A. 
Woodside Energy (N.A.) Ltd 

Woodside Energy Julimar Pty Ltd
Woodside Energy (Kenya) Pty Ltd
Woodside Energy (M.E.) Pty Ltd
Woodside Energy Middle East and Africa Pty Ltd
Woodside Energy (Norway) Pty Ltd
Woodside Energy (SL) Pty Ltd
Woodside Energy Technologies Pty Ltd

Woodside Energy Trading Singapore Pte Ltd 

WelCap Insurance Pte Ltd 
Woodside Energy Shipping Singapore Pte Ltd 

Woodside Guangdong Shipping (One) Pty Ltd
Woodside Guangdong Shipping (Two) Pty Ltd

102

(1,2,3)

(2,3,4)
(2,4)
(2,4)
(5)
(5)
(5)
(2,4)

(4)
(2,4)
(2,4)
(2,4)

(4,11)

(4)

(4,10)

(4,8,10)

(4,10)
(2,4)

(4)

(4)
(2,4)
(2,4)

(4)

(4)
(2,4)

(4)

(4)
(2,4)

(6)
(2,4,7)

(7)
(2,4)

(4)

(4,9)

(4)

(4)
(2,4,10)
(2,4)
(2,4)
(2,4)
(2,4)
(2,4)
(2,4)

(4)

(4)
(2,4)
(2,4)

Name of entity

Note

Subsidiaries

Company name (cont):

Woodside West Africa Pty Ltd
Metasource Pty Ltd
Woodside Finance Limited
Woodside Petroleum (Northern Operations) Pty Ltd
Woodside Petroleum (Timor Sea 19) Pty Ltd
Woodside Petroleum (Timor Sea 20) Pty Ltd
Woodside Petroleum (W.A. Oil) Pty Ltd
Woodside Petroleum Holdings Pty Ltd
Mermaid Sound Port and Marine Services Pty Ltd

Note

(2,4)
(2,4)
(2,4)
(2,4)
(2,4)
(2,4)
(2,4)
(2,4)
(2,4)

1. Woodside Petroleum Ltd is the ultimate holding company and the head

entity within the tax consolidated group.

These companies were members of the tax consolidated group as at
31 December 2015.

3. Pursuant to ASIC Class Order 98/1418, relief has been granted to the

controlled entity, Woodside Energy Ltd, from the Corporations Act 2001
(Cth) requirements for the preparation, audit and publication of accounts.
As a condition of the Class Order, Woodside Petroleum Ltd and
Woodside Energy Ltd are parties to a Deed of Cross Guarantee.

4. All subsidiaries are wholly owned except those referred to in

Notes 5,6,7 and 8.

5. Kansai Electric Power Australia Pty Ltd and Tokyo Gas Pluto Pty Ltd

each hold 5% of the shares in these companies. These companies are
deemed to be controlled.

6. As at 31 December 2015, Woodside Energy Holdings Pty Ltd held a

99.99% interest in Woodside Energy (Tanzania) Limited and Woodside
Energy Ltd held the remaining 0.01% interest.

7. As at 31 December 2015, Woodside Energy Holdings (South America)

Pty Ltd held a 99.99% interest in Woodside Energia (Brasil) Investimento
em Exploracao de Petroleo Ltda and Woodside Energy Ltd held the
remaining 0.01% interest.

8. As at 31 December 2015, Woodside Energy International (Canada)

Limited and Woodside Energy (Canada LNG) Limited were the general
partners of the KM LNG Operating General Partnership holding a 99.99%
and 0.01% partnership interest respectively.

These entities were incorporated during the reporting period.

10. These entities were acquired during the reporting period.

11. During the reporting period, Woodside Energy International (Canada)
Limited acquired a 50% interest in each of Pacific Trail Pipelines
Management Inc. and the Pacific Trail Pipelines Limited Partnership.
The remaining 50% interest in each of these entities is held by Chevron
Canada Limited.

All subsidiaries incorporated in Australia unless identified with one
of the following symbols:

 Brazil
 Cameroon
 Canada
 France

 New Zealand
 Singapore

Spain
 Tanzania

 UK
 USA

Recognition and measurement
Subsidiaries are all the entities over which the Group has the power
over the investee such that the Group is able to direct the relevant
activities, has exposure, or rights, no variable returns from its
involvement with the investee and has the ability to use its power
over the investee to affect the amount of the investor’s returns.

(b) Subsidiaries with material non-controlling interests
The Group has two Australian subsidiaries with material
non-controlling interests (NCI).

Name of entity

Principal place
of business

NCI held

Burrup Facilities Company Pty Ltd

Burrup Train 1 Pty Ltd

Australia

10%

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONNOTES TO THE FINANCIAL STATEMENTS E: Other items for the year ended 31 December 2015WOODSIDE PETROLEUM LTD ANNUAL REPORT 2015E.9 Subsidiaries (cont.)
The NCI in both subsidiaries is 10% held by the same parties
(refer to footnote 5 above for details).

The summarised financial information (including consolidation
adjustments but before intercompany eliminations) of subsidiaries
with material NCI is as follows:

Burrup Facilities Company Pty Ltd

Current assets

Non-current assets

Current liabilities

Non-current liabilities

Net assets

Accumulated balance of NCI

Revenue

Profit

Profit allocated to NCI

Dividends paid to NCI

Operating

Investing

Financing

Net increase/(decrease) in cash and cash
equivalents

Burrup Train 1 Pty Ltd

Current assets

Non-current assets

Current liabilities

Non-current liabilities

Net assets

2015
US$m

2014
US$m

579

123

5,343

5,461

(431)

(427)

(283)

(336)

5,064

4,965

506

497

1,076

1,212

533

(44)

619

(29)

813

1,002

(10)

(18)

(803)

(984)

483

194

3,151

3,205

(395)

(305)

(307)

(235)

2,934

2,857

The consolidated income statement and statement of financial
position of the members of the Closed Group are set out below:

Closed Group Consolidated Income Statement
and Statement of Retained Earnings
Profit before tax
Taxes

Profit after tax

Retained earnings at the beginning of the
financial year
Dividends

2015

2014
US$m US$m

157
(56)

1,349
(304)

101

1,045

5,637
(1,730)

6,356
(1,764)

Retained earnings at the end of the financial year

4,008

5,637

Closed Group Consolidated Statement of
Financial Position
Current assets
Cash and cash equivalents
Receivables
Inventories
Tax receivable
Other assets

Assets held for sale

Total current assets

Non-current assets
Receivables
Inventories
Other financial assets
Exploration and evaluation assets
Oil and gas properties

Other plant and equipment

Deferred tax assets

Total non-current assets

Accumulated balance of NCI

293

286

Total assets

Revenue

Profit

Profit allocated to NCI

Dividends paid to NCI

Operating

Investing

Financing

1,796

1,990

337

(27)

519

(16)

402

(23)

641

(25)

Current liabilities
Payables
Tax payable
Other financial liabilities
Other liabilities
Provisions
Liabilities held for sale

(503)

(616)

Total current liabilities

Net increase/(decrease) in cash and cash
equivalents

(c) Deed of Cross Guarantee and Closed Group
Woodside Petroleum Ltd and Woodside Energy Ltd are parties to a
Deed of Cross Guarantee under which each company guarantees
the debts of the other. By entering into the Deed, the entities have
been granted relief from the Corporations Act 2001 requirements
for the preparation, audit and publication of accounts, pursuant to
Australian Securities and Investments Commission (ASIC) Class
Order 98/1418. The two entities represent a Closed Group for the
purposes of the Class Order.

Non-current liabilities
Payables
Deferred tax liabilities
Other financial liabilities

Other liabilities

Provisions

Total non-current liabilities

Total liabilities

Equity
Issued and fully paid shares
Shares reserved for employee share plans
Other reserves

Retained earnings

Total equity

99
882
59
182
-

145

93
934
120
-
30

1,367

1,177

-
6
24,896
879
3,476

4
11
19,414
964
4,235

30
29,359

107
24,814

30,726

25,991

396
-
21
47
131
156

751

371
300
18
73
184
-

946

17,208
364
11

10,178
430
10

122

936

1,349

18,611

12,089

19,362

13,035

6,547
(27)
836

6,547
(38)
810

4,008

5,637

11,364

12,956

103

NOTES TO THE FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS E: Other items for the year ended 31 December 2015WOODSIDE PETROLEUM LTD FINANCIAL REPORTE.10 Other accounting policies
(a) Summary of other significant accounting policies

Derivative financial instruments

Derivatives embedded in the Group’s contracts that change
the nature of a host contract’s risk and are not clearly and
closely related to the host contract are initially recognised at
fair value on the date the contract is entered into. Subsequent
fair value movements of the derivative are recognised in the
income statement.

Financial guarantees

Financial guarantee contracts issued by the Group are those
contracts that require a payment to be made to reimburse
the holder for a loss it incurs because the specified debtor fails to
make a payment when due in accordance with the terms of a debt
instrument. Financial guarantee contracts are recognised initially
as a liability at fair value, adjusted for transaction costs that are
directly attributable to the issuance of the guarantee. Subsequently,
the liability is measured at the higher of the best estimate of the
expenditure required to settle the present obligation at the reporting
date and the amount recognised less cumulative amortisation.

Tax consolidation

The parent and its wholly owned Australian controlled entities have
elected to enter tax consolidation, with Woodside Petroleum Ltd as
the head entity of the tax consolidated group. The members of the
tax consolidated group are identified at Note E.9.

The tax expense/(benefit), deferred tax liabilities and deferred tax
assets arising from temporary differences of the members of the
tax consolidated group are recognised in the separate financial
statements of the members of the tax consolidated group, using
the stand alone approach.

Entities within the tax consolidated group have entered into a tax
funding arrangement and a tax sharing agreement with the head
entity. Under the tax funding agreement, Woodside Petroleum Ltd
and each of the entities in the tax consolidated group have agreed
to pay or receive a tax equivalent payment to or from the head
entity, based on the current tax liability or current tax asset of
the entity.

The tax sharing agreement entered into between members of
the tax consolidated group provides for the determination of the
allocation of income tax liabilities between the entities, should the
head entity default on its tax payment obligations. No amounts
have been recognised in the financial statements in respect of
this agreement as payment of any amounts under the tax sharing
agreement is considered remote.

(b) New and amended standards and interpretations issued
but not yet effective

A number of new standards, amendment of standards and
interpretations have recently been issued but are not yet effective
and have not been adopted by the Group as at the financial
reporting date.

The Group has reviewed these standards and interpretations, and
with the exception of the items listed below for which the final
impact is yet to be determined, none of the new or amended
standards will significantly affect the Group’s accounting policies,
financial position or performance.

Title

Application date of the
standard

Summary

AASB 2014-3 Amendments
to Australian Accounting
Standards – Accounting
for Acquisitions of Interests
in Joint Operations
(AASB 1 & AASB 11)

Periods beginning on or after
1 January 2016

AASB 11 Joint Arrangements now provides guidance on the accounting
for acquisitions of interests in joint operations in which the activity
constitutes a business.

The impact of this change to the Group is that such acquisitions will be
accounted for as business combinations and not asset acquisitions.

AASB 9 Financial Instruments Periods beginning on or after

1 January 2018

AASB 15 Revenue from
Contracts with Customers

Periods beginning on or after
1 January 2018

IFRS 16 Leases

Periods beginning on or after
1 January 2019

A finalised version of AASB 9 which contains accounting requirements
for financial instruments, replacing AASB 139 Financial Instruments:
Recognition and Measurement. The standard contains requirements
in the areas of classification and measurement, impairment, hedge
accounting and derecognition.

AASB 15 provides a single, principles-based five-step model to
be applied to all contracts with customers. Guidance is provided on
topics such as the point in which revenue is recognised, accounting
for variable consideration, costs of fulfilling and obtaining a contract
and various related matters. New disclosures about revenue are
also introduced.

IFRS 16 provides a new lessee accounting model which requires a
lessee to recognise assets and liabilities for all leases with a term of
more than 12 months, unless the underlying asset is of low value.
A lessee measures right-of-use assets similarly to other non-financial
assets and lease liabilities similarly to other financial liabilities. Assets
and liabilities arising from a lease are initially measured on a present
value basis. The measurement includes non-cancellable lease payments
(including inflation-linked payments), and also includes payments to be
made in optional periods if the lessee is reasonably certain to exercise
an option to extend the lease, or not to exercise an option to terminate
the lease. IFRS 16 contains disclosure requirements for lessees.

104

In accordance with a resolution of directors of Woodside Petroleum Ltd, we state that:

In the opinion of the directors:

(a) the financial statements and notes thereto, and the disclosures included in the audited 2015 Remuneration Report, comply

with Australian Accounting Standards and the Corporations Act 2001;

(b) the financial statements and notes thereto give a true and fair view of the financial position of the Group as at
31 December 2015 and of the performance of the Group for the financial year ended 31 December 2015;

(c) the financial statements and notes thereto also comply with International Financial Reporting Standards as disclosed in

the ‘About this report’ section within the notes to the 2015 Financial Report;

(d) there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and

payable; and

(e) there are reasonable grounds to believe that the members of the Closed Group identified in Note E.9 will be able to meet any

obligations or liabilities which they are or may become subject to, by virtue of the Deed of Cross Guarantee.

2. This declaration has been made after receiving the declarations required to be made to the directors in accordance with

section 295A of the Corporations Act 2001 for the year ended 31 December 2015.

For and on behalf of the Board

M A Chaney, AO
Chairman
Perth, Western Australia

P J Coleman
Chief Executive Officer and
Managing Director
Perth, Western Australia

17 February 2016

105

FINANCIAL REPORTWOODSIDE PETROLEUM LTD FINANCIAL REPORTINDEPENDENT AUDIT REPORT

Independent auditor’s report to the members of Woodside Petroleum Ltd

Report on the financial report

We have audited the accompanying financial report of Woodside Petroleum Ltd, which comprises the consolidated statement of
financial position as at 31 December 2015, the consolidated income statement, the consolidated statement of comprehensive
income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended,
notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration of the
consolidated entity comprising the Company and the entities it controlled at the year’s end or from time to time during the financial
year.

Directors’ responsibility for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance
with Australian Accounting Standards and the Corporations Act 2001 and for such internal controls as the directors determine are
necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error.
In the notes to the financial statements, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of
Financial Statements, that the financial statements comply with International Financial Reporting Standards.

Auditor’s responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance
with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit
engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material
misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The
procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the
financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to
the entity’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal controls. An audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the
directors, as well as evaluating the overall presentation of the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Independence
In conducting our audit we have complied with the independence requirements of the Corporations Act 2001. We have given to the
directors of the company a written Auditor’s Independence Declaration, a copy of which is included in the Directors’ Report.

Opinion
In our opinion:

a. the financial report of Woodside Petroleum Ltd is in accordance with the Corporations Act 2001, including:

i giving a true and fair view of the consolidated entity’s financial position as at 31 December 2015 and of its performance

for the year ended on that date; and

ii complying with Australian Accounting Standards and the Corporations Regulations 2001; and

b. the financial report also complies with International Financial Reporting Standards as disclosed in the notes to the financial

statements.

Report on the remuneration report

We have audited the remuneration report included in pages 52 to 69 of the Directors’ Report for the year ended 31 December 2015.
The directors of the company are responsible for the preparation and presentation of the remuneration report in accordance with
section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the remuneration report, based on our audit
conducted in accordance with Australian Auditing Standards.

Opinion
In our opinion, the remuneration report of Woodside Petroleum Ltd for the year ended 31 December 2015, complies with section
300A of the Corporations Act 2001.

Ernst & Young

106

R J Curtin, Partner
Perth, Western Australia
17 February 2016

Liability limited by a scheme approved under Professional Standards Legislation.

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD ANNUAL REPORT 2015As at 12 February 2016

SHAREHOLDER STATISTICS

Number of shareholdings
There were 226,268 shareholders. All issued shares carry voting rights on a one for one basis.

Distribution of shareholdings

Size of shareholding

1 - 1,000

1,001 - 5,000

5,001 - 10,000

10,001 - 100,000

100,001 and over

Total

Number of
holders

Number of

% of issued
capital

165,658

53,766

4,717

2,030

226,268

64,672,143

109,497,510

32,709,995

40,962,737

576,068,272

823,910,657

7.85

13.29

3.97

4.97

69.92

100.00*

*Small differences are due to rounding.

Unmarketable parcels
There were 3,417 members holding less than a marketable parcel of shares in the company.

Twenty largest shareholders

HSBC Custody Nominees (Australia) Limited

Shell Energy Holdings Australia Limited

J P Morgan Nominees Australia Limited

National Nominees Limited

Citicorp Nominees Pty Limited

BNP Paribas Noms Pty Ltd

Citicorp Nominees Pty Limited

BNP Paribas Nominees Pty Ltd

Citicorp Nominees Pty Limited

HSBC Custody Nominees (Australia) Limited

Australian Foundation Investment Company Limited

Pacific Custodians Pty Limited

Network Investment Holdings Pty Ltd

RBC Investor Services Australia Nominees Pty Limited

AMP Life Limited

UBS Wealth Management Australia Nominees Pty Ltd

Argo Investments Limited

Navigator Australia Ltd

HSBC Custody Nominees (Australia) Limited - A/C 2

National Nominees Limited

Total

Shares held

156,170,060

111,847,852

106,833,484

62,637,897

59,773,014

13,171,660

6,153,510

5,265,243

4,141,924

3,577,399

3,282,886

3,225,696

3,027,570

2,153,594

2,098,600

1,954,390

1,700,873

1,657,147

1,478,719

1,312,150

% of issued
capital

18.95

13.58

12.97

7.60

7.25

1.60

0.75

0.64

0.50

0.43

0.40

0.39

0.37

0.26

0.25

0.24

0.21

0.20

0.18

0.16

551,463,668

66.93

Substantial shareholders as disclosed in substantial shareholder notices given to the company are as follows:

Shell Energy Holdings Australia Limited#

111,847,852

13.58

#Shell Energy Holdings Australia Limited’s most recent notice of change of interests of substantial shareholder was given on 23 June 2014.

107

SHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD SHAREHOLDER INFORMATIONAnnual General Meeting

Dividend payments

Change of address or banking details

Woodside declares its dividends in
US dollars as it is our functional and
presentation currency. Woodside pays
its dividends in Australian dollars unless
a shareholder’s registered address is in
the United Kingdom (UK) where they are
paid in UK pounds sterling, or in the United
States of America (USA) where they are
paid in US dollars.

Shareholders who reside outside of the
USA can elect to receive their dividend in
US dollars, payable into a USA financial
institutional account. Shareholders must
make an election to alter their dividend
currency by the business day after the
record date for the dividend by contacting
the share registry on 1300 558 507
(within Australia) or +61 3 9415 4632
(outside Australia).

Shareholders may have their dividends
paid directly into any bank or building
society account in Australia, the USA,
or the UK. Payments are electronically
credited on the dividend payment date and
confirmed by payment advice. To request
direct crediting of dividend payments,
please contact the share registry or
visit the share registry website
(www.investorcentre.com/wpl).

The history of dividends paid by the company
can be found on the company’s website.

Dividend reinvestment plan

Shareholders with registered addresses
in Australia and New Zealand can elect
to participate in Woodside’s dividend
reinvestment plan and have the dividends
on some or all of their shares automatically
reinvested in additional shares. Information
on the dividend reinvestment plan is
available on the company’s website.
Election forms are available from the
company's website or from the share
registry.

The 2016 Annual General Meeting (AGM)
of Woodside Petroleum Ltd will be held
at 10.00 am (AWST) on 21 April 2016, at
the Perth Convention & Exhibition Centre,
21 Mounts Bay Road, Perth, Western
Australia. Details of the business of the
meeting will be provided in the AGM
notice.

The AGM will be webcast live on the
internet. An archive version of the webcast
will be placed on the Woodside website to
enable the proceedings to be viewed at a
later time.

Copies of the Chairman’s and the CEO’s
speeches will be available on the company’s
website.

Share registry: Enquiries

Investors seeking information about
their shareholdings should contact the
company’s share registry:

Computershare Investor
Services Pty Limited

Level 11, 172 St Georges Terrace
Perth, Western Australia 6000

Postal address: GPO Box D182
Perth, Western Australia 6840

Telephone: 1300 558 507 (within Australia)

+61 3 9415 4632 (outside Australia)

Facsimile: +61 3 9473 2500

Email: web.queries@computershare.com.au
Website: www.investorcentre.com/wpl

The share registry can assist with queries
on share transfers, dividend payments, the
dividend reinvestment plan, notification
of tax file numbers and changes of name,
address or bank account details.

Details of shareholdings can be checked
conveniently and simply by visiting the share
registry website at
www.investorcentre.com/wpl

For security reasons, you will need your
Security Reference Number (SRN) or
Holder Identification Number (HIN) when
communicating with the share registry.

The share registry website allows
shareholders to make changes to address
and banking details online.

Shareholders should immediately notify
the share registry of any change to their
address or banking arrangements for
dividends electronically credited to a bank
account.

Changes can be made online
at the share registry website
www.investorcentre.com/wpl

Australian Securities Exchange
listing

Woodside Petroleum Ltd securities are
listed on the ASX under the code WPL.

Share price information can be accessed on
the company’s website.

American Depositary Receipts

Citbank (Citi) sponsors a level one
American Depositary Receipts (ADR)
program in the USA. One Woodside
share equals one ADR and trades over the
counter under the symbol ‘WOPEY’.

ADR holders should deal directly with
Citi on all matters related to their ADRs.

Enquiries should be directed to:
Citibank Shareholder Services
P.O. Box 43077
Providence, Rhode Island 02940-3077

Contact information

USA Toll Free Number: 1-877-CITI-ADR

Number for international callers:
1-781-575-4555

Fax: 1-201-324-3284

E-mail: Citibank@shareholders-online.com

Investor Relations: Enquiries

Requests for specific information on
the company can be directed to Investor
Relations at:

Investor Relations
Woodside Petroleum Ltd
Woodside Plaza
240 St Georges Terrace,
Perth, WA 6000

Postal address: GPO Box D188
Perth, WA 6840

Telephone: +61 8 9348 4000
Facsimile: +61 8 9214 2777

Email: investor@woodside.com.au
Website: www.woodside.com.au

108

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD ANNUAL REPORT 2015BUSINESS
DIRECTORY
Registered office Perth
Woodside Petroleum Ltd
240 St Georges Terrace, Perth, WA 6000
Telephone: +61 8 9348 4000
Postal address: GPO Box D188
Perth, WA 6840

Broome
29 Coghlan Street, Broome, WA 6725
Telephone: 1800 036 654

Karratha
3747 Balmoral Road, Karratha, WA 6714
Telephone: 1800 634 988

KEY ANNOUNCEMENTS 2015
February

March

April

May

June

July

Woodside achieves full-year profit of US$2.414 billion
Woodside signs production sharing contracts for Myanmar
offshore acreage
Woodside closes purchase of Apache interests in Australian assets

Gas discovery at Pyxis-1

Woodside closes purchase of Apache interests in Kitimat asset

Corpus Christi liquefaction LLC conditions satisfied

Woodside to investigate LNG Development in Texas

FEED phase entered for Browse FLNG Development

September

Woodside proposal to Oil Search Limited

December

Woodside withdraws proposal to merge with Oil Search Limited

North West Shelf Project Approves Development of GWF-2 Project

EVENTS CALENDAR 2016
Key calendar dates for Woodside shareholders in 2016.
Please note dates are subject to review.

January

February

Fourth quarter 2015 report

2015 full-year result and final dividend
announcement

Ex-dividend date for final dividend

24 Record date for final dividend

April

Payment date for final dividend

19 Annual General Meeting (AGM) proxy returns

May

June

July

August

close at 10.00 am (AWST)

First quarter 2016 report

21 AGM

Investor Briefing day – Sydney

30 Woodside half-year end

Second quarter 2016 report

2016 half-year result and interim dividend
announcement

TBA Ex-dividend date for interim dividend

TBA Record date for interim dividend

September

TBA Payment date for interim dividend

October

Third quarter 2016 report

December

31 Woodside year end

109

SHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD SHAREHOLDER INFORMATIONGLOSSARY, UNITS OF MEASURE AND CONVERSION FACTORS
Glossary

$, $m
1P
2C
2P
AGM

Appraisal well

ASX
AUD

Break-even cash cost
of sales

Brent

Condensate

Cps

Crude oil

Development well
DRP
EEP
EPS

Exploration licence

Farm in

FEED

FEL
FID

First half, second half

Flaring

FLNG
FPSO

US dollars unless otherwise stated, millions of dollars
Proved reserves
Best estimate of contingent resources
Proved plus Probable reserves
Annual General Meeting
A well drilled to follow up a discovery and evaluate its commercial
potential
Australian Securities Exchange
Australian dollars

Break-even cash cost of sales includes production costs,
royalty and excise, shipping and direct sales costs, carbon costs
and insurance; excludes exploration and evaluation, general
administrative and other costs, depletion, depreciation and
amortisation, PRRT and income tax

Intercontinental Exchange (ICE) Brent Crude deliverable futures
contract (oil price)
Hydrocarbons, which are gaseous in a reservoir, but which
condense to form liquids as they rise to the surface
Cents per share
Oil that is produced from a reservoir after any associated gas has
been removed
A well drilled for the purpose of recovering hydrocarbons
Dividend reinvestment plan
Employee equity plan
Earnings per share
A licence to explore for oil or gas in a particular area issued to a
company by a governing state

Where one company acquires an interest in an exploration permit
or production licence by paying some of the past or future costs of
another company which is relinquishing its interest

Front-end engineering and design. Preliminary design and cost and
schedule confirmation before a final investment decision
Frontier Exploration Licence
Final investment decision
Halves of the calendar year (i.e. 1H is 1 January to 30 June,
2H is 1 July to 31 December)
Flaring is the term used to describe the controlled burning of gas
found in oil and gas reservoirs
Floating liquefied natural gas
Floating production storage and offloading vessel

Free cash flow

Cash flow from operating activities less cash flow from investing
activities

Gas-Up and Cool-Down An operation to cool a vessel’s LNG tanks prior to loading
Gearing
GWF

Net debt divided by (net debt + equity)
Greater Western Flank

Infill well
IOGP
ISO

JCC

JV
KGP
LIBOR
LNG
LPG
LTIF
Net debt
NPAT
NWS
PEP
PRRT
PSC
PSE

Q1, Q2, Q3, Q4

RAP

ROE

ROACE

SPA

Tier 1 PSE

Tier 2 PSE

TRIR

TSR

Drilled for the purpose of increasing production
International Association of Oil & Gas Producers
International Organisation for Standardisation

The Japan Customs-cleared Crude is the average price of
customs-cleared crude oil imports into Japan as reported in
customs statistics (also known as 'Japanese Crude Cocktail') and is
used as the reference price for long-term supply LNG contracts.

Joint venture
Karratha Gas Plant
London Inter-Bank Offer Rate
Liquefied natural gas
Liquefied petroleum gas
Lost time injury frequency
Total debt less cash and cash equivalents
Net profit after tax
North West Shelf Project
Petroleum exploration permit
Petroleum Resources Rent Tax
Production Sharing Contract
Process safety event
Quarters of the calendar year (i.e. Q1 is 1 January to 31 March, Q2
is 1 April to 30 June, Q3 is 1 July to 30 September, Q4 is
1 October to 31 December)
Woodside’s Reconciliation Action Plan
Return on equity is a measure of company performance calculated
as equity attributable to shareholders (excluding non-controlling
interests) divided by reported NPAT (excluding non-controlling
interests) expressed as a percentage

Return on average capital employed is calculated as net profit after
tax and net finance costs (after tax) divided by average debt and
equity
Sales and Purchase Agreement

A typical Tier 1 PSE is loss of containment of hydrocarbons greater
than 500 kg (in any one-hour period)

A typical Tier 2 PSE is loss of containment of hydrocarbons greater
than 50 kg but less than 500 kg (in any one-hour period)

Total recordable injury rate. The number of recordable injuries
(fatalities + lost workday cases + restricted workday cases +
medical treatment cases) per 1,000,000 hours worked

Total shareholder return

Unit production costs

Production costs ($ million) divided by production
volume (MMboe)

USA
USD
WA

United States of America
US dollars
Western Australia

Glossary of key terms used in this report

Units of measure

Term

Committee
EIP

Executive

Executive Director
Executive KMP
KMP
KPI
LTA
NED
NEDSP
Performance Year

Restricted Shares

RTSR

Scorecard

STA

SWEP

VAR

VPR

Meaning
The Human Resources & Compensation Committee
The Executive Incentive Plan

Equity Right. ERs are awarded under the WEP and SWEP
and each one entitles participants to receive a fully paid share
in Woodside on the vesting date (or a cash equivalent in the
case of international assignees). No amount is payable by the
executive on the grant or vesting of an ER

A senior employee who the Board has determined to be eligible
to participate in the EIP

Peter Coleman
The Executive Directors and senior executives listed in Table 1
Key management personnel
Key Performance Indicator
Long-Term Award
Non-executive director
The Non-executive Director Share Plan
The year to which an EIP award relates

Woodside ordinary shares that are awarded to executives as
the deferred component of their STA. No amount is payable by
the executive on the grant or vesting of a Restricted Share

Relative Total Shareholder Return

A corporate scorecard of key measures that align with
Woodside’s overall business performance

Short-Term Award

The Supplementary Woodside Equity Plan

Variable Annual Reward

Variable Pay Right. Each VPR is a right to receive a fully paid
ordinary share in Woodside (or, at the Board’s discretion, as
cash equivalent). No amount is payable by the executive on the
grant or vesting of a VPR

WEP

The Woodside Equity Plan

110

bbl

Bcf

BCM

boe

kPa

Mcf

MMbbl

MMboe

MMBtu

mtpa

psi

Tcf

barrel

billion cubic feet

billion cubic metres

barrel of oil equivalent

thousands of Pascals

thousand cubic feet

million barrels

million barrels of oil equivalent

million British thermal units

million tonnes per annum

pounds per square inch

tonnes

trillion cubic feet

terajoules

Conversion factors

Product

Factor

Conversion
factors1

Australian Pipeline Natural Gas

1 TJ

163.6 boe

Liquefied Natural Gas (LNG)

1 tonne

8.9055 boe

Condensate

Oil

1 bbl

1.000 boe

Liquefied Petroleum Gas (LPG)

1 tonne

8.1876 boe

Gulf of Mexico Pipeline Natural Gas

1 MMBtu

0.1724 boe

1. Minor changes to some conversion factors can occur over time due to gradual changes in the

process stream.

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD ANNUAL REPORT 2015Index

A
American Depositary Receipts (ADR)
Angel platform
Annual General Meeting, 2015 Notice
Anti-bribery and corruption
Australia Oil
Areas of Activity
B
Balance sheet
Balnaves Oil
Board of Directors
Brent oil price
Browse FLNG
C

108
2, 22, 23
108
21
1, 12, 19, 26, 80-81, 86, 88, 96
2, 3

6, 8, 16-18, 83, 99
2, 17-18, 26, 72, 89, 98
7, 48, 50, 78
17
1, 2, 18-19, 28, 41, 46, 80, 109

Canada

Canary Islands
Cameroon
Carbon cost
CEO remuneration
CEO’s report
Chairman’s report
Cimatti
Committees of the Board
Compass (workplace culture)
Compliance
Community engagement
Conservation Agreement
Contingent resources
Conversion factors
Corporate governance
Credit rating
D
Directors’ declaration
Diversity

Dividend

3, 7, 9, 18, 27, 29, 34, 38-42, 47, 72,
80, 89, 100, 102, 112
3, 43, 100
3, 16, 28, 42, 100, 102
81, 110
59, 61
8, 9
6, 7
45
50, 51
ii, 35, 50
1, 11, 20, 47, 50, 51, 78, 83
34
25
5, 6, 8, 13-14, 38, 42, 45-47, 110
110
21, 31, 50-51, 61, 70
8, 15, 78, 93,

105
9, 28, 30, 34, 47, 50, 57
4, 6, 14, 17, 19, 51, 54, 76, 82, 90, 99,
108-109
6, 15, 17, 19, 51, 90, 108, 110
14, 17-19, 23, 25, 36-37, 42-43, 45

16, 113
9, 34, 54, 57
30-35, 50, 59, 60-61, 70, 95, 98-99, 113
34
108
16, 17, 21, 61, 76, 78-79, 88-89
10-11
38-39, 42
50

Dividend Reinvestment Plan
Drilling
E
Effective income tax
Emissions
Employees
Environmental incidents
Events calendar 2016
Exchange rate
Executives
Exmouth
External auditor relationship
F
Financial position
Financial report
Flared gas and intensity
Floating LNG (FLNG)
Franking credit
Free cash flow
G
Gabon
Gearing
Global exploration
Global LNG
Goodwyn A
Graduates (Program)
Great South Basin
Greater Enfield
Greater Western Flank
Gulf of Mexico
H
Health and safety
I
Independent audit report
Indigenous
K
Karratha Gas Plant (KGP)
Kitimat LNG
L
Laminaria–Corallina
Laverda
LNG market
LNG Train
London Benchmarking Group
Long-term award (LTA)
M
Memorandum of Understanding (MOU) 41, 47
Mission (company)
Morocco

Myanmar

12, 16-17
71-105
9, 13, 34,
6, 18, 46
82
16, 110

3, 18-19, 42, 102
9, 12, 15-17, 90, 110
42-43
21, 28-29
2, 18, 22-23, 45,
9, 13, 30-31
43,
45
2, 5, 8, 18, 22, 45, 110
110, 113

4, 8-9, 20, 25, 32

106
30-31, 35

2, 5, 8-9, 12, 22, 110
3, 17-18, 27, 41, 47, 72, 89

2, 16, 26-27, 72, 88, 96, 100
45
7, 18, 23, 25, 28-29
23-24
35
55-56, 58, 99, 110

ii, 1, 14, 50
3, 34, 42-43 100, 102
5, 17, 30, 33-35, 36, 39, 42-43, 100,
102, 109

N
Net profit after tax
New Zealand
Nganhurra FPSO
Ngujima-Yin FPSO
North American 'unconventional oil',
US LNG
North Rankin Complex
North West Shelf Project
Northern Endeavour FPSO
O
Oil spill response plan
Okha FPSO
Operating and financial review
Outer Canning
P
Payout ratio
Petroleum Resource Rent Tax (PRRT)
Performance summary
Peru
Pluto LNG
Pluto Support Centre
Production
Production Sharing Contract (PSC)
Proved plus Probable reserves
Proved reserves
R
Reconciliation Action Plan (RAP)
Remuneration report
Republic of Korea
Reserves replacement ratio
Reserves and Resource statement
Retention lease
Retention (of employees)
Return on equity
Risk management
S
Sales revenue
Security
Seismic
Sensitivities
Share plans
Share registry: enquiries
Shareholders: twenty largest
Shareholdings: distribution
Short-term award (STA)
Spain (Canary Islands)

Strategy, Woodside

Stybarrow Venture FPSO
Sunrise
T
Tanzania
Taranaki Basin

Technology

Timor-Leste
Total shareholder return (TSR)
Total recordable injury rate (TRIR)
Turnaround
Turnover (employees)
U
United States of America (USA)
Unit production cost
V
Values (company)
Vincent
Vision
Volume weighted average
realised prices
Volunteering
W

Wheatstone

X
Xena

5, 15-16, 54, 78, 110
3, 42-43, 100, 102
2, 27
2, 26
7, 29

2, 18, 22-23,
22-23, 29, 80, 83, 109-110
2, 27,

20, 33
2, 22
12-47
42, 100

6, 15
16
4, 5
2, 42-43
1, 2, 5, 9, 12, 16, 18, 24-25, 32, 90, 92,
24-25
4-9, 12, 14-18, 20, 22-29, 54, 80, 85
42, 109-110
38-39, 87, 110
38, 87, 110

30, 35, 110
52-69
3, 16, 42-43,
4, 38
38
46
31, 59
16, 110
20, 32, 34, 50, 78-79, 90

4, 16, 22-24
13, 20, 32-33
5, 14, 18-19, 22-23, 25, 36, 42-43
17, 47,
62, 77, 92, 98-99
108
107
107
57, 99
43,
6, 8-9, 14-15, 18, 28-29, 31, 33, 35-36,
42, 53, 58,
27
3, 7, 47

42, 102
43
1, 8-9, 15, 18, 20-21, 25, 33, 36-37,
42, 46
7, 19, 47
5
4, 8-9, 18, 32-33, 57, 110
4-5, 9, 12, 18, 22-25, 32-33
31

18, 91, 108
12, 17, 23, 25, 110

ii, 1, 9, 14, 30-31, 35-36, 50
9, 13, 16, 26, 38,
ii, 1, 9, 14, 18, 30, 50,

2, 5-9, 13, 17-19, 29, 38-39, 44, 72, 80,
85, 88-89, 96, 100

5, 8, 24-25,

111

SHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD SHAREHOLDER INFORMATION2015 SUMMARY CHARTS

PRODUCT VIEW

Investment

Gas and condensate*
Oil*
Exploration and other
* Indicative only as some assets produce oil and gas

2014
2015
50% 89%
5% 4%
45% 7%

6,003
Million

REGIONAL VIEW

Investment

Australia
Canada
Rest of World

2014
2015
88% 80%
0% 18%
12% 2%

6,003
Million

The majority of our investment expenditure was directed
towards the Wheatstone, Kitimat and Balnaves asset purchases
and investment on Wheatstone in 2015.

Capital investment in 2015 was predominantly in the
north-west of Australia, with the remainder in Canada.

Production

Natural gas*
Oil
Condensate
* Includes LNG, LPG and pipeline gas

2014
2015
79% 78%
12% 13%
9% 9%

92.2
MMboe

Production

Australia
Canada
Rest of World

2014
2015
99% 99%
0% <1%
<1% 0%

92.2
MMboe

The majority of our production is from natural gas at the
NWS and Pluto projects. The proportion of oil increased
slightly in 2015 due to the addition of the Balnaves oil asset to
our portfolio.

Australian projects continue to provide the majority of
Woodside’s production volumes.

Refer to our areas of activity map on page 2, which shows the
locations of our producing assets.

Sales revenue

Natural gas*
Oil
Condensate
* Includes LNG, LPG and pipeline gas

2014
2015
71% 76%
16% 15%
13% 9%

4,496
Million

Australia
Canada
Rest of World

2014
2015
99% 99%
0% <1%
<1% 0%

4,496
Million

Gas continues to provide the majority of our sales revenue.
The contribution of natural gas to revenue increased in 2015 due to
continued strong production at the NWS and Pluto projects.

The majority of our revenue is currently derived from Australia.
In 2015, revenue was also attributable to the sale of Canadian
pipeline gas.

Refer to the CEO report page 8 and the Operating and Financial
Review page 16, for further information on our strategy.

Reserves (Proved plus Probable)

Natural gas*
Oil
Condensate
* Includes LNG, LPG and pipeline gas

2015
2014
87% 88%
4% 3%
9% 9%

1,508.0
MMboe

Australia
Canada
Rest of World

2014

2015
100% 99%
0% 1%
0% 0%

1,508.0
MMboe

Gas represents the largest portion of Woodside’s Proved plus
Probable reserves, increasing in 2015 with the purchase of our
interests in the Julimar Project.

The majority of Woodside’s Proved plus Probable reserves
are located in Australia; however, we anticipate a greater
diversity will result from our global exploration and business
development activities.

112

OVERVIEWOPERATING AND FINANCIAL REVIEWGOVERNANCEFINANCIAL REPORTSHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD ANNUAL REPORT 2015TEN-YEAR COMPARATIVE DATA SUMMARY

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

Profit and
Loss (USDm)1

Balance Sheet
(USDm)1

Cash Flow
(USDm)
and Capital
Expenditure
(USDm)1

Volumes

Other ASX
Data

227
619
92
577
1,521
-
-
325
3,361
2,598
2,241
1,560
357
541
83
57
8
687
-
864
128
91
8,515
903
782
4,458
2,082
(1,700)
(522)

447
1,965
24.3
19.4
14.9

16.4
17.0
1.2
7.8
20.4
6.9
69.7

182
614
75
512
1,062
-
-
427
2,872
2,346
2,093
1,684
253
337
65
7
20
590
-
1,075
163
98
7,072
1,435
1,188
3,313
1,457
(1,432)
41

376
1,091
32.4
32.5
26.4

15.5
17.3
1.2
8.0
16.5
9.2
67.7

Operating Revenues
Australia Pipeline Gas
Australia LNG
Australia LPG
Australia Condensate
Australia Oil
Australia LNG Processing Revenue
Australia Trading Revenue
Other International
Total
EBITDAX
EBITDA2
EBIT3
Exploration and Evaluation
Depreciation and Amortisation
Amortisation of Licence Acquisition Costs
Impairment/(Impairment Reversal)
Net Finance Costs
Tax Expense
Non-controlling Interest
Reported NPAT
Reported EPS (cents)4
DPS (cents)
Total Assets
Debt
Net Debt
Shareholder Equity

Cash Flow from Operations
Cash Flow from Investing
Cash Flow from Financing

Capital Expenditure

295
3,095
34
421
650
180
354
1
5,030
3,443
3,063
441
380
1,517
22
1,083
85
243
87
26
3
109

367
2,834
125
903
1,918
125
-
76
6,348
5,528
5,162
3,795
366
1,184
26
157
137
614
61
2,983
366
130

376
4,563
80
901
1,133
198
161
23
7,435
5,853
5,568
3,672
285
1,441
21
434
163
993
102
2,414
293
255

375
366
1,509
3,347
127
88
860
1,000
1,795
896
-
150
-
-
136
79
4,802
5,926
3,423
4,460
2,864
4,188
2,212
2,538
559
272
627
1,218
28
45
(3)
387
26
179
677
545
2
65
1,507
1,749
190
213
110
249
24,810 23,231
23,839 24,082 23,770
5,102
4,340
3,764
2,586
5,061
1,918
1,541
(682)
14,226 15,824 15,225 15,148 12,658
3,330
2,376
2,242
161 (3,533)
(1,059)
(5,456)
362
(2,470)
(58)

4,785
(617)
(3,119)

4,441
4,319

(1,252)

3,475

309
1,310
115
708
1,579
-
-
172
4,193
3,431
3,126
2,256
305
749
24
97
(18)
697
2
1,575
204
105

378
769
94
571
1,496
-
-
179
3,487
3,427
3,209
2,303
218
752
35
119
12
823
(6)
1,474
210
95

320
1,007
112
669
2,685
-
-
252
5,045
4,017
3,765
2,852
252
732
49
132
19
1,287
-
1,546
225
100
20,196 17,753 10,317
2,044
4,939
1,946
3,732
4,633
8,812
3,224
1,483
(3,892)
(4,708)
684
4,207

4,915
3,952
11,091
2,104
(2,941)
608

Exploration and Evaluation
Oil and Gas Properties and Property, Plant & Equipment
(%)
(%)

ROACE5
Reported Return on Shareholders Funds
Gearing
Sales (million boe)
Australia Pipeline Gas
Australia LNG
Australia LPG
Australia Condensate
Australia Oil
Other International
Total (million boe)
Production (million boe)
Australia Pipeline Gas
Australia LNG
Australia LPG
Australia Condensate
Australia Oil
Other International
Total (million boe)
Reserves (Proved plus Probable) Gas (Tcf)
Reserves (Proved plus Probable) Condensate (MMbbl)
Reserves (Proved plus Probable) Oil (MMbbl)
Other
Employees
Shares

1,305
4,309
2.0
0.2
23.3

13.2
57.6
0.7
8.5
12.5
0.2
92.7

13.1
57.5
0.7
8.4
12.3
0.2
92.2
7.59
133.50
42.60

261
425
17.5
15.3
(4.5)

13.3
58.3
0.8
9.4
11.2
0.2
93.2

166
420
12.0
11.5
9.2

14.0
52.4
0.9
9.5
8.0
0.9
85.7

383
1,145
18.3
19.7
11.2

13.9
42.6
1.1
8.6
16.8
0.8
83.8

778
2,651
11.8
11.9
28.6

14.0
22.4
1.1
7.8
15.7
2.9
63.9

703
2,933
13.5
14.2
26.3

14.8
22.7
1.3
9.1
19.8
4.5
72.2

273
3,992
19.0
16.7
29.8

18.4
21.3
1.5
9.7
24.3
5.5
80.7

418
4,031
37.1
33.4
29.6

18.9
17.0
1.2
7.9
29.8
5.4
80.2

13.9
53.6
0.9
9.5
8.2
0.9
87.0
7.09

13.3
60.3
0.8
9.1
11.4
0.2
95.1
6.65

13.8
43.9
1.1
9.3
16.0
0.8
84.9
7.51
117.11 125.20 130.90
67.00
54.06

14.0
22.6
1.2
7.9
16.0
2.9
64.6
7.80
138.70
95.90 108.50

14.8
23.2
1.4
9.1
19.7
4.5
72.7
8.02
154.74
117.50

18.9
18.4
17.4
21.5
1.2
1.5
7.9
9.5
30.5
24.5
5.4
5.5
81.3
80.9
7.90
7.79
151.40
147.80
136.10 168.80

16.4
17.4
1.2
8.0
20.5
7.1
70.6
7.80

15.6
17.4
1.2
8.0
16.4
9.3
67.9
6.90
152.10 144.60
221.10
170.20

3,456
38.33
26.20
28.72

3,896
39.54
33.29
38.90

3,856
50.85
29.76
30.62

3,803
44.23
33.71
38.01

3,997
38.16
30.09
33.88

High (A$)
Low (A$)
Close (A$)

2,888
49.80
34.81
38.11
Number (000’s) 823,911 823,911 823,911 823,911 805,672 783,402 748,599 698,553 688,331 666,667
225,138 227,798 217,383 208,277 205,868 201,134 175,257 141,035 131,460 119,003
17,717 30,353 20,033
33,745
31,317 32,050 27,914 24,670 33,342 35,334 25,637 34,685 25,407
2.47
6.12
44.09
35.4
25.2
30.1
5.9
11.6
(2.7)

17,250 25,664 28,579 28,983 25,287
23,663
107.45
49.78
25.0

2,981
56.66
34.81
50.39

3,219
53.87
31.19
47.20

3,650
49.28
40.56
42.56

3,124
70.51
26.81
36.70

14.09
27.2
6.6

12.67
30.5
20.0

30.43
29.8
5.4

3.35
32.6
11.0

3.60
35.8
2.6

5.71
33.7
11.8

(%)
(%)

31,567

Number of shareholders
Market Capitalisation (USD equivalent at reporting date)
Market Capitalisation (AUD equivalent at reporting date)
Finding Costs ($/boe) (3 year average)6
Reported Effective Income Tax Rate
Net Debt/Total Market Capitalisation

1. Comparative financial information prior to 2010 has
been converted on a consistent basis in accordance
with Note 1(o) to the 2010 Financial Report. Cash flow
and capital expenditure have been converted using
a consistent approach adopted on a conversion of
expenses.

2. The calculation for EBITDA has been updated to
exclude impairment and amortisation of license
acquisition costs. 2006 to 2013 EBITDA numbers have
been re stated to reflect this change in calculation.

3. EBIT is calculated as a profit before income tax, PRRT

and net finance costs.

4. Earnings per share has been calculated using the
following weighted average number of shares:
2015: 822,943,960; 2014: 822,771,118
2013: 822,983,715; 2012: 814,751,356
2011: 791,668,973; 2010: 773,388,154
2009: 703,310,697; 2008: 685,179,496
2007: 671,447,950; 2006: 657,178,947

5. The calculation for ROACE has been revised in 2014 to
use EBIT as the numerator, in addition to a change in
the composition of capital employed. ROACE for
2006-2013 has been restated to include this change.

6. Finding cost methodology is in accordance with the

FAS69/SEC industry standard.

113

SHAREHOLDER INFORMATIONWOODSIDE PETROLEUM LTD SHAREHOLDER INFORMATION

ANNUAL REPORT 2015

Head Office:
Woodside Petroleum Ltd
240 St Georges Terrace
Perth WA 6000 Australia

Postal Address:
GPO Box D188
Perth WA 6840 Australia

t: +61 8 9348 4000
f: +61 8 9214 2777
e: companyinfo@woodside.com.au

Visit us at
www.woodside.com.au

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