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Tullow OilINCORPORATING
APPENDIX 4E
About this report
This Annual Report 2018 is a summary of Woodside’s
operations and activities for the 12-month period ended
31 December 2018 and financial position as at 31 December
2018. Woodside Petroleum Ltd (ABN 55 004 898 962) is
the ultimate holding 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 ultimate holding company and those of
its controlled entities. In this report, references to a year are
to the calendar and financial year ended 31 December 2018
unless otherwise stated.
All dollar figures are expressed in US currency, Woodside share,
unless otherwise stated.
Additional information
We have indicated where additional information is available
online and in other sections of this report like this:
Refer to the Glossary section on pages 148–149 for key
terms, units of measurement and conversion factors.
Refer to Woodside’s website for more information
(www.woodside.com.au).
Forward-looking statements
This report contains forward-looking statements. Please refer to
page 144, which contains a notice in respect of these statements.
We are working with Green ReportsTM
on an initiative ensuring that
communications minimise environmental
impact and create a more sustainable
future for the community.
Sustainable Development
Report 2018
A summary of Woodside’s
sustainability approach, actions
and performance for the 12-month
period ended 31 December 2018
is included in our Sustainable
Development Report 2018.
This report will be available
on 7 March 2019.
On the cover
Pluto LNG onshore processing facility, loading LNG for export.
Expansion of Pluto LNG is a key component of Woodside's
plans to develop the Scarborough gas resource.
Appendix 4E
Results for announcement to the market
2018
Restated 20171
Revenue from ordinary activities
increased 31.8% to US$5,240 million
US$3,975 million
Profit from ordinary activities after tax attributable to members
increased 27.6% to US$1,364 million
Net profit from the period attributable to members
increased 27.6% to US$1,364 million
US$1,069 million
US$1,069 million
Dividends
Final dividend (US cents per share)
Interim dividend (US cents per share)
None of the dividends are foreign sourced
Previous corresponding period:
Final dividend (US cents per share)
Interim dividend (US cents per share)
Amount per security
Franked amount per security
Ordinary 91¢
Ordinary 53¢
Ordinary 91¢
Ordinary 53¢
Ordinary 49¢
Ordinary 49¢
Ordinary 49¢
Ordinary 49¢
Ex-dividend date
Record date for determining entitlements to the final dividend
Payment date for the final dividend
22 February 2019
25 February 2019
20 March 2019
Net tangible asset per security
31 December 2018
Restated 31 December 20171
$18.68
$17.90
1. 2017 amounts have been restated for the retrospective application of AASB 15 Revenue from Contracts with Customers (AASB 15). Refer to Note E.10(b) in the Financial
Statements for further details.
ii Woodside Petroleum Ltd | Annual Report 2018
CONTENTS
Overview
About Woodside
Performance highlights
Chairman’s report
Chief Executive Officer’s report
Executive management
Our areas of activity
Operating and Financial Review
Financial summary
Strategy and capital management
Our business model and value chain
Energy markets
Base business
Developments
Sustainability
Corporate
Governance
Woodside Board of Directors
Corporate governance
Directors’ report
Remuneration report
Financial Statements
Shareholder Information
Shareholder statistics
Key announcements 2018
Events calendar 2019
Business directory
Asset facts
Glossary, units of measure and conversion factors
Index
Summary charts
Ten-year comparative data summary
2
3
8
10
12
14
18
22
24
25
26
36
50
58
70
73
74
76
98
142
144
144
145
146
148
150
151
152
Woodside Petroleum Ltd | Overview 1
ABOUT
WOODSIDE
Woodside is the pioneer of the LNG industry in Australia and the largest Australian natural gas producer.
We have a global portfolio and are recognised for our world-class capabilities as an integrated upstream
supplier of energy.
We have a clear strategy to deliver superior shareholder
returns across three distinct time horizons, characterised by
cash generation from 2017, unlocking value from 2022, and
repeating our successes from 2027.
We are delivering on our strategy, creating an integrated
LNG production centre on the Burrup Peninsula. Building on
more than 30 years of operations in Western Australia, we
are progressing development of the Scarborough and Browse
gas resources through our producing assets, the Woodside-
operated Pluto LNG and North West Shelf (NWS) Project.
Our operated assets are renowned for their safety, reliability
and efficiency and we have a strong track record in project
development. As Australia's premier LNG operator, we
produced 6% of global LNG supply. We operate two floating
production storage and offloading (FPSO) facilities.
We also have a participating interest in Wheatstone LNG,
which started production in 2017.
Across our oil and gas portfolio, we have significant equity
interests in high-quality development opportunities in Senegal
(SNE), Myanmar, Canada (Kitimat) and Timor-Leste / Australia
(Sunrise). We are pursuing new concepts and technology to
enable cost-effective commercialisation of these resources.
We have a renewed exploration plan with a more focused
and opportunistic approach across established, emerging and
future growth hubs in Australia, Myanmar, Senegal, Gabon,
Peru and Bulgaria.
We continue to expand our capabilities in marketing, trading and
shipping and have enduring relationships that span 30 years with
foundation customers throughout the Asia-Pacific region.
Technology and innovation are essential to our long-term
sustainability. Today we are pioneering remote support and
the application of artificial intelligence, embedding advanced
analytics across our operations while recognising digital security
issues. We are working to improve our energy efficiency and to
support the use of LNG as a low-emissions and economically
viable fuel.
Woodside demonstrates strong safety and environmental
performance in all its operations. We are committed to
upholding our values of integrity, respect, discipline, excellence,
working sustainably and working together. Our success is
driven by our people, and we aim to attract, develop and retain
a diverse, high-performing workforce.
We recognise that enduring, meaningful relationships
with communities are fundamental to maintaining our
licence to operate. We actively seek to build relationships
with stakeholders who are interested in and affected by our
activities. We help create stronger communities through
programs that improve knowledge, build resilience and
create shared opportunities.
Our proven track record and distinctive capabilities are
underpinned by almost 65 years of experience, making
us a partner of choice.
As Australia’s premier LNG
operator, we produced 6%
of global LNG supply.
2 Woodside Petroleum Ltd | Annual Report 2018
PERFORMANCE
HIGHLIGHTS
Net profit after tax
Increased 28%
Dividend
Increased 47%
Free cash flow
Increased 83%
LNG unit production cost
Pluto LNG and NWS Project
Total recordable injury rate
$
1,364
million
144
US cents per share
$
1,524
million
3.6$
per boe
1.32
per million work hours
Woodside Petroleum Ltd | Overview 3
2018 DELIVERY
NEAR-TERM
GROWTH
+ Executed Greater Western Flank Phase 2
$630 million under total budget and
6 months ahead of schedule
+ Commenced production from Wheatstone LNG
train 2; production exceeding expectations
+ Commenced work on the Ngujima-Yin FPSO and
subsea infrastructure for Greater Enfield, targeting
first oil mid-2019
SCARBOROUGH AND
PLUTO LNG TRAIN 2
+ Increased Scarborough equity ownership to 75%
+ Assumed Scarborough operatorship
+ Awarded contracts for Scarborough front-end
engineering design activities, subsequent to
the period
+ Entered front-end engineering design (FEED)
for Pluto LNG Train 2
+ Commissioned Pluto pipeline gas facility
+ Executed a domestic gas agreement with Perdaman
SNE PHASE 1
+ Assumed operatorship
+ Submitted field development
and exploitation plan
+ Commenced FEED activities
OUTSTANDING
BASE BUSINESS
PERFORMANCE
4 Woodside Petroleum Ltd | Annual Report 2018
BROWSE TO
NORTH WEST
SHELF PROJECT
+ Commenced concept definition phase
+ Agreed a preliminary tolling arrangement between
the NWS Project and the Browse Joint Venture
+ Referred the project for State and Commonwealth
environmental approvals
NEW GROWTH
PLATFORMS
+ Completed the Shwe Yee Htun-2 appraisal well
in Myanmar, confirming good reservoir quality
+ Developing new markets in LNG: trucking
and shipping
OPERATIONAL
+ Record LNG production of 72 MMboe
+ Reduced unit production cost to
$5.1/boe
FINANCIAL
+ Generated $5,240 million in operating revenue
+ Generated $1,524 million in free cash flow
+ Reduced gearing to 12%
+ Secured equity funding for growth projects
Woodside Petroleum Ltd | Overview 5
DELIVERING
THE STRATEGY
CAPABILITY TO DELIVER
3 Experienced people with
proven project delivery record
3 Low cost operator
3 Prudent capital management
strategy, with balance sheet
strength
MARKET
3 LNG demand increasing
3 Low point of the
development cost cycle
3 Competitive, motivated
contractors
RESOURCES
3 Significant conventional
resources well matched
to existing infrastructure
2020
targeting
of production
GREATER
ENFIELD
GREATER
WESTERN
FLANK
PHASE 2
WHEATSTONE LNG
2019 PRIORITIES
+ Complete subsea works
and FPSO modifications
+ Complete drilling wells
+ Commence production
2019 PRIORITIES
+ Commence domestic gas production
+ Reduce operating cost
PLUTO LNG
AUSTRALIA OIL
NORTH WEST SHELF
OUTSTANDING BASE
BUSINESS
6 Woodside Petroleum Ltd | Annual Report 2018
HORIZON I
2017-2021
2027+
Kitimat
Sunrise
New markets
Tie-back
opportunities
Commercialising
exploration
2026 and 2027
BROWSE TO
NORTH WEST SHELF
PROJECT RFSU
2024
PLUTO LNG
TRAIN 2 RFSU
2023
SCARBOROUGH
RFSU
2022
SNE FIELD
DEVELOPMENT
PHASE 1 RFSU
2019 PRIORITIES
+ Complete technical and
commercial activities
for final investment
decision (FID)
+ Commence project
execution
2019 PRIORITIES
+ Execute FEED activities
+ Prepare for FID in 2020
2019 PRIORITIES
+ Execute FEED activities and prepare for FID in 2020
+ Finalise Scarborough Development Agreement with the
Government of Western Australia
+ Execute agreement for onshore gas processing
2019 PRIORITIES
+ Execute binding, fully-termed
gas processing agreements
+ Commence FEED activities
+ Prepare for FID in late 2020
Targeted production in 2020 is based on sanctioned projects being
delivered in accordance with their current project schedules.
Chart is not to scale nor intended to be a basis for measurement.
RFSU: Ready for start-up
HORIZON II
2022-2026
HORIZON III
2027+
Woodside Petroleum Ltd | Overview 7
CHAIRMAN’S
REPORT
It is a privilege for me to report on what has been
a pivotal year for Woodside as we outlined growth
plans that shore up the future of your company.
Since announcing those plans in February, we have already
made good progress on delivering them, and our vision for the
Burrup Hub is starting to take shape.
Our focus is always on value for shareholders and this year we
have delivered strong returns, generating free cash flow of
$1,524 million and net profit after tax of $1,364 million. We will
pay an annual dividend of US 144 cents per share, an increase
of 47% on 2017.
At a time when so many of our institutions are confronting
a loss of public trust, companies like Woodside demonstrate
that big businesses are a vital part of the community. Our big
companies make a significant economic and social contribution,
underpinning employment and tax revenue.1
These companies produce the goods and services that our
community relies on, developing the resources that power our
economy and our households. The best of our big companies
engage in a meaningful way with those who live and work
alongside them, forming long-term relationships with groups
that sustain and enrich the life of a community.
I have long admired Woodside for its dedication to operational
excellence and for the significant contribution it makes to
the Australian economy and community. In all its activities,
Woodside is guided by a strong company culture that values
integrity and is founded on the commitment to doing the right
thing by our customers, our partners and our communities.
It is an honour to take on the role of Chairman at a time
when Woodside is progressing growth plans that will bring
considerable benefits to Australia. Our plans to make significant
investment in Australian natural gas projects will underpin jobs
and economic growth in our country while providing a reliable
energy source to local and global customers.
Our shareholders, who provide the equity capital for our
investments, will benefit as we prepare to produce extra LNG
right at a time when the world needs it.
In early 2018, we outlined our proposals to develop the
Scarborough and Browse resources through our existing
infrastructure on the Burrup Peninsula, while also progressing
1. Woodside paid A$894 million (approximately US$668 million equivalent) in
tax and royalties in Australia in 2018 and A$4.9 billion over the past five years.
Richard Goyder, AO
Chairman
8 Woodside Petroleum Ltd | Annual Report 2018
promising developments in Senegal and Myanmar. Those plans
received strong backing from shareholders via our US$2 billion
equity raising, maintaining our strong balance sheet as we
progress through this growth phase. This positions us well as
we compete with other resource developers to take advantage
of the growing global demand for gas.
The world needs more gas as growing populations, particularly in
Asia, demand extra energy and cleaner air. For some years, there
was abundant gas and little investment globally in new projects,
but now a shortfall looms and there is strong competition to
sanction new projects that can meet the growing demand.
Woodside’s ability to use its existing facilities gives us a head
start in this global race. We have the opportunity to grow our
safe and reliable operations in an efficient way, rather than
duplicating facilities. We are working with our joint venture
partners and other stakeholders in finalising agreements on the
use of this infrastructure. Our plans are gaining momentum, but
we know there are still hurdles to jump, tough decisions to make
and cooperation needed from all our partners.
Our shareholders will benefit as we
prepare to produce extra LNG right at
a time when the world needs it.
Some things that are beyond our control can influence our
operations. It is important to have a stable industrial relations
environment because we’re not going to invest significant
capital if there is a risk of cost blow-outs due to changing
employment conditions.
As we approach big investment decisions, we carefully weigh a
range of factors. It’s an uncertain world, and we try to account
for those uncertainties – around geopolitics, around climate
change and the world’s response to it. The role of business is
to take calculated risks, with the Board overseeing appropriate
governance around investment decisions. We will manage risks
across an investment cycle. It is true that we won’t always get it
right, but we take a very diligent and rigorous approach as we
make long-term decisions to invest significant capital on behalf
of our shareholders.
I am pleased to chair a diverse Board of highly capable
directors, who are focused on the interests of the company
and shareholders and offer expertise that is broad and deep.
Peter Coleman leads an astute and dedicated management
team, with the right skills and vision to take us through this
important phase.
This report outlines our new remuneration scheme, which
we think is measured, appropriate and aligned to shareholder
experience. A significant part of the scheme involves equity,
which vests and is earned through long-term performance,
linked to major strategic deliverables in the coming years.
On behalf of the Board, I would like to thank Michael Chaney
for his leadership of Woodside as Chairman for 12 years.
Over that timeframe, which was marked globally by
significant volatility and rapid change, Michael has overseen
disciplined investment decisions and ensured that Woodside
maintained a strong financial position. I would also like to
thank Melinda Cilento, who steps down as a director at the
AGM, for the valuable contribution she has made during the
past decade, including her diligence and commitment as
Chair of the Human Resources & Compensation Committee.
Over the past year, your company has outlined bold growth
plans and made a good start on delivering them. The next few
years will be crucial for Woodside as we build on our history as
the pioneer of LNG in Australia.
Richard Goyder, AO
Chairman
14 February 2019
Woodside Petroleum Ltd | Overview 9
CHIEF
EXECUTIVE
OFFICER’S
REPORT
Woodside has achieved a lot in 2018, delivering
strong financial results, solid production and
impressive progress on our growth plans.
A successful equity raising early in the year set up our finances
to support a growth phase that is timed well to capture the
emerging global LNG shortfall.
Financially, we have had a very good year in 2018, achieving
a 32% increase in our operating revenue, to $5.2 billion, and a
28% increase in net profit after tax. These strong results were
underpinned by increased production due to the start-up of
major projects, higher prices and discipline on costs.
Looking to 2019, our expected capital requirements are similar
to 2018 as we complete projects while preparing for growth.
Our story began 65 years ago when a new company was formed
and named after a small town in Victoria’s Gippsland Basin.
That junior explorer would go on to develop the North West
Shelf, becoming the pioneer of the LNG industry in Australia.
That spirit is alive and well as we pursue proposals to develop
some 20 to 25 trillion cubic feet of gross dry gas resources
from the Scarborough and Browse fields off Western Australia.
Even as we plan for growth, we remain committed to
excellence in our base business, achieving high reliability and
globally competitive costs of production, while ensuring a
strong safety culture and performance.
Our growth plans will more than double Woodside’s equity
LNG production by 2027 and deliver significant benefits to
shareholders and to the broader community.
The timing is right for these developments and Woodside has
the resources, facilities and expertise to deliver them.
We’ve set ambitious timelines – and have shown in 2018 that
we intend to keep them. Our progress has been aided by the
fact it is a good time to engage leading contractors, early in the
commodity cycle.
We’ve demonstrated our expertise in project delivery, with the
Greater Western Flank Phase 2 Project coming in $630 million
under budget and six months ahead of schedule. Our near-term
growth plans took another step forward as Wheatstone train 2
started up, with production exceeding expectations.
10 Woodside Petroleum Ltd | Annual Report 2018
Peter Coleman
Chief Executive Officer
and Managing Director
The emissions released in producing natural gas are more than
offset by those avoided when it displaces higher-emissions
fuels. As a fuel for reliable and readily dispatchable power
generation, gas is the ideal partner for renewables.
Experienced companies like ours need to be part of the
response to climate change. Our contribution includes
managing our own emissions and developing new markets for
LNG to displace higher-emissions fuels, including for remote
power generation in northern Western Australia and as a fuel
for marine and road transport.
It was a significant year for Woodside internationally, as we
transitioned to operator of SNE, Senegal’s first offshore oil
development. The joint venture is targeting first oil in 2022 and
has commenced FEED activities and secured approval of the
Environmental and Social Impact Assessment.
Our exploration program in Myanmar made good progress,
with two further gas discoveries enhancing the commercial
prospects of the acreage.
Woodside is on the cusp of some great opportunities in both
our Australian and international operations, as we deliver our
growth plans.
Our staff are working hard to realise those opportunities and
I thank them for their efforts in 2018 and in the years to come
as we set the company up for a bright future.
Peter Coleman
Chief Executive Officer and Managing Director
14 February 2019
The acquisition in February of an increased interest in the
Scarborough field was the first in a series of significant
developments throughout the year in our plans to upgrade
and connect our existing facilities and bring new resources
through them.
Importantly, we have already struck agreements for the sale of
gas from our facilities to Australian customers. We anticipate
rising global demand for gas, but we are also committed to
providing local supply.
Our growth plans will more than
double Woodside’s equity LNG
production by 2027 and deliver
significant benefits to shareholders
and to the broader community.
After increasing our equity in Scarborough to 75%, we assumed
operatorship and have in early 2019 awarded engineering
contracts for the upstream development. We have also selected
an expansion concept for the Pluto LNG Plant and begun
engineering work on train 2.
At the same time, we have progressed our proposal to process
the Browse resources through the North West Shelf Project’s
Karratha Gas Plant, achieving a preliminary tolling agreement
between the two joint ventures that will enable the efficient
development of new resources through existing infrastructure.
This avoids costly duplication of facilities and benefits
all stakeholders.
We are building on our strengths and finding new and better
ways of doing things in both our commercial partnerships and
our operations. This includes exploring options on the Burrup
Peninsula for integrating gas-fired power with solar power to
supply reliable power to local industry.
We think gas has a big role to play as the world strives to
reduce emissions while extending access to modern energy.
Gas has a lower carbon intensity than other fossil fuels.
Woodside Petroleum Ltd | Overview 11
EXECUTIVE
MANAGEMENT
Michael Abbott, Sherry Duhe, Reinhardt Matisons, Meg O'Neill, Peter Coleman, Robert Edwardes, Jacky Connolly and Shaun Gregory
Peter Coleman
BEng, MBA, FTSE
Chief Executive Officer
and Managing Director
Michael Abbott
BJuris, LLB, BA, MBA
Senior Vice President
Corporate and Legal
Jacky Connolly
BCom, MOHS
Vice President
People and Global Capability
Sherry Duhe
BS (Accounting), MBA
Executive Vice President
and Chief Financial Officer
+ Audit
+ Business Climate and Energy
+ People and Global Capability
+ Employee Engagement
Outlook
+ Corporate Affairs
+ Legal and Secretariat
+ Risk and Compliance
+ Security and Emergency
Management
+ Global Property and Workplace
Shaun Gregory
BSc (Hons), MBT
Executive Vice President
Exploration and
Chief Technology Officer
+ Exploration
+ Development Planning
+ Digital
+ Geoscience
+ Technology
+ New Energy and
Carbon Abatement
Reinhardt Matisons
BEng, MBA, MIE Aust, CPEng, CPA
Executive Vice President
Marketing, Trading
and Shipping
+ Marketing
+ Power and New Markets
+ Shipping
+ Trading
+ International Marketing Offices
+ Finance, Tax, Treasury
and Insurance
+ Commercial
+ Business Development
and Growth
+ Contracting and Procurement
+ Investor Relations
+ Strategy, Planning and Analysis
+ Performance Excellence
Meg O’Neill
BSc (Ocean Engineering),
BSc (Chemical Engineering), MSc
Executive Vice President
and Chief Operations Officer
+ Producing Business Units
+ Operations and Maintenance
+ Drilling and Completions
+ Logistics
+ Health, Safety, Environment
and Quality
+ Subsea and Pipelines
+ Reservoir Management
+ Power
Robert Edwardes
BSc (Engineering), PhD
Executive Vice President
Development
+ Engineering
+ Projects
+ Developments
+ International Development
Offices
12 Woodside Petroleum Ltd | Annual Report 2018
Woodside Petroleum Ltd | Overview 13
OUR AREAS
OF ACTIVITY
GLOBAL
IRELAND
BULGARIA
MYANMAR
CANADA
Beijing*
Seoul*
Tokyo*
Singapore*
SENEGAL
MOROCCO
GABON
AUSTRALIA
TIMOR-LESTE / AUSTRALIA
PERU
Product type
Phase
Gas
Oil
Producing assets
Developments
Gas or oil
Appraisal and exploration
*Denotes marketing office
14 Woodside Petroleum Ltd | Annual Report 2018
WESTERN AUSTRALIA
BROWSE
NORTH WEST
SHELF PROJECT1
PLUTO
SCARBOROUGH
WHEATSTONE
AUSTRALIA OIL
GREATER ENFIELD
Broome
Karratha
PLUTO LNG
NORTH WEST
SHELF PROJECT
Onslow
WHEATSTONE LNG
WESTERN
AUSTRALIA
Production contribution
Perth
Woodside
Headquarters
79%
LNG
14%
LIQUIDS
7%
OTHER
1. Production from the Okha FPSO is reported as part of our Australia Oil operations.
Woodside Petroleum Ltd | Overview 15
FINANCIAL
SUMMARY
Net profit after tax
increased 28% to
$1,364
million
Operating revenue
increased 32% to
$5,240
million
Free cash flow
increased 83% to
$1,524
million
Earnings per share
20%
to 148 cents
Key metrics
$ million
Operating revenue
EBITDA2
EBIT2
NPAT
Underlying NPAT2,3
2018
5,240
3,814
2,278
1,364
1,416
20171
3,975
2,918
1,714
1,069
1,069
Net cash from operating activities
3,296
2,400
Investment expenditure
Capital investment expenditure2,4
Exploration expenditure2,5
Free cash flow2
Dividends paid
Key ratios
Return on equity
ROACE
Earnings
%
%
(US cps)
Gearing
Effective income tax rate
%
%
1,935
1,646
289
1,524
909
7.8
9.3
148
12
32
1,563
1,263
300
832
826
7.1
7.4
123
24
34
Sales volumes
Gas
Liquids
(MMboe)
(MMboe)
75.4
13.8
68.8
15.3
1. 2017 amounts have been restated for the retrospective application of AASB 15. Refer to Note
E.10(b) in the Financial Statements for further details.
2. These are non-IFRS measures that are unaudited but derived from audited Financial
Statements. These measures are presented to provide further insight into Woodside’s
performance. Refer to footnote 2 on page 152 for calculation methodology on EBITDA.
3. NPAT adjusted for the impact of foreign exchange options associated with the equity raising
($5 million), finance costs associated with the early redemption of the bond ($20 million) and
the reclassification of two LNG vessels from oil and gas properties to non-current assets held
for sale ($27 million). No adjustments were made to the calculation of 2017 underlying NPAT.
4. Excludes exploration capitalised, includes restoration and rehabilitation spend.
5. Item excludes prior period expenditure written off and permit amortisation, includes
evaluation expense.
Dividend per share
54
9
0
1
54
8
9
45
3
8
71
Full-year
dividend (cps)
Average annual
dated Brent
($/boe)
4
4
1
18 Woodside Petroleum Ltd | Annual Report 2018
2015
2016
2017
2018
Robust operational performance throughout 2018 and improved market conditions have generated solid
cashflows and contributed to increased profit. This has supported our strong financial liquidity throughout
2018 which positions us well for our growth projects.
NPAT reconciliation
286
(31)
(263)
863
(120)
n
o
i
l
l
i
m
$
1,069
(80)
(99)
(163)
(98)
1,364
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Key movements
Sales revenue: price
Sales revenue increased due to higher realised prices. Our average
realised price increased by approximately 23% to $54/boe.
Average realised price
2018
$/boe
20171
$/boe
Variance
%
Impact
$m
NWS LNG
Pluto LNG
Wheatstone LNG
Pipeline gas
Condensate
Oil
LPG
Volume weighted
average realised prices
Brent average price
JCC (lagged 3 months)
48
57
59
15
71
71
69
54
71
68
38
47
45
20
55
56
60
44
54
51
225
372
99
(24)
126
62
3
863
26
21
31
(25)
29
27
15
23
31
33
1. 2017 amounts have been restated for the retrospective application of AASB 15. Refer to
Note E.10(b) in the Financial Statements for further details.
Sales revenue: volume
Sales volumes increased due to the ramp up of Wheatstone
LNG and strong LNG reliability. This more than offset the
revenue reduction from the planned Ngujima-Yin FPSO
suspension of operations in May 2018 for the Greater Enfield
Project, and from the NWS Project due to the timing of equity
cargoes and the equity percentage change for domestic
pipeline gas.
Royalties and excise
Royalties and excise expense increased primarily due to higher
NWS revenue.
Depreciation and amortisation
Depreciation and amortisation for oil and gas properties
increased primarily due to Wheatstone LNG train 1
commencing production in the second half of 2017 and LNG
train 2 in June 2018, year-end 2017 Pluto reserves revisions and
higher production across our facilities.
Provision release
A one off $120 million provision related to the Balnaves FPSO
lease was released in 2017.
Exploration and evaluation
Exploration and evaluation expense increased following
significant activity in 2018 and accompanying well results.
Exploration expenditure in 2019 will reduce.
Net finance costs
Net finance costs increased due to lower capitalised borrowing
costs following the start-up of both Wheatstone LNG trains.
Income tax and PRRT
The PRRT credit decreased by $84 million predominately due
to higher assessable receipts. Income tax expense increased
by $79 million predominantly due to higher profit before
income tax.
Other
Other items impacting NPAT included higher production costs
due to a full year of Wheatstone LNG production, inventory
movement, higher shipping and direct sales costs, and
reclassification of two LNG vessels as assets held for sale. This
was partially offset by higher processing and services revenue
and other income.
Woodside Petroleum Ltd | Operating and Financial Review 19
Capital allocation
We continue to maintain a prudent financial position by
appropriately servicing our debt, investing in future growth
and distributing funds to shareholders. During the year we
generated $3,296 million of operating cashflow, raised
$1,949 million in net proceeds from the Q1 2018 equity
raising and ended the period with liquidity of $3,918 million.
This, combined with the operating cash flows anticipated
in Horizon I and into Horizon II, positions us to deliver our
growth plans.
In 2018 we funded investment in line with our Horizon II
growth strategy, investing $1,935 million in capital and
exploration expenditure. Our 2018 capital expenditure
of $1,646 million increased by $383 million. This was
predominately due to the acquisition of an increased interest
in the Scarborough resources. Capital expenditure was also
allocated to the Greater Enfield Project, Greater Western
Flank Phase 2 and Wheatstone LNG, all of which underpin our
targeted production of approximately 100 MMboe in 2020.
A prudent reduction to future investment expenditure was
made to exploration following wells drilled in Myanmar,
Gabon, Australia, Morocco and Peru in 2018.
Dividend
A 2018 final dividend of US 91 cents per share (cps) has been
declared. The final dividend reflects 2018 underlying NPAT of
$1,416 million, and was adjusted to reflect our strong operating
cash flow for the year due to higher realised prices, reliable
production and low operating costs. Woodside continues to
target a payout ratio of 80% of underlying NPAT subject to
market conditions and investment requirements. The full-
year 2018 dividend is 144 cps, the value of the final dividend
payment is $852 million and the dividend will be fully franked
for Australian taxation purposes.
Unit production cost, cash costs and margins
Total unit production costs decreased by 2% to $5.1/boe despite
a full year of higher non-operated Wheatstone LNG production
costs and the Ngujima-Yin FPSO suspension of operations,
underscoring our focus on high reliability and cost management
in operations.
Gas unit production costs of $4.0/boe remained the
same compared to 2017. Pluto gas and NWS gas unit
production costs both reduced to $3.6/boe from $3.9/boe
and $3.8/boe respectively, which were offset by higher
non-operated Wheatstone production costs of $6.80/boe.
We will continue to work with Operator in 2019 to reduce
Wheatstone production costs.
Gross margin increased by 21% from $23.8/boe to $28.8/boe
and our break-even cash cost of sales remains competitive at
$10.4/boe. Our high margin, low cost operations will generate
cash flow to help fund our Horizon II growth projects.
Liquidity
7,000
n
o
i
l
l
i
m
$
3,500
0
y
t
i
d
u
q
i
i
l
7
1
0
2
g
n
i
t
a
r
e
p
O
w
o
fl
h
s
a
c
w
o
fl
h
s
a
c
t
n
e
m
t
s
e
v
n
I
s
d
n
e
d
v
D
i
i
Cash
Undrawn debt
Production costs
7.4
5
0
7
6.9
9
3
6
Total production cost
($ million)
Unit production cost
($/boe)
5.0
2
7
4
5.2
3
4
4
5.1
5
6
4
g
n
i
s
i
a
r
y
t
i
u
q
e
m
o
r
f
s
d
e
e
c
o
r
P
t
n
e
m
y
a
p
e
r
d
n
o
b
y
l
r
a
e
9
1
0
2
r
e
h
t
O
t
b
e
d
r
e
h
t
O
n
o
i
t
a
l
l
e
c
n
a
c
y
t
i
d
u
q
i
i
l
8
1
0
2
2014
2015
2016
2017
2018
20 Woodside Petroleum Ltd | Annual Report 2018
Balance sheet, liquidity and debt service
We reinforced our strong balance sheet, reducing our gearing
to 12%, within our 2018 target range of 10-30%. We ended 2018
with net debt of $2,397 million and a robust liquidity position of
$3,918 million.
As a result of implementing AASB 16 Leases (AASB 16) from
1 January 2019, we will increase our target gearing range
to 15-35%. The implementation of AASB 16 will not impact
Woodside’s strong credit ratings of Baa1 and BBB+, both of
which were reaffirmed during the period by Moody’s and S&P
Global respectively with a stable outlook.
We continue to actively control our debt portfolio by
minimising near-term maturities and maintaining a low cost
of debt. The average term to maturity is 4.7 years and our
portfolio cost of debt remains competitive at 3.9%.
We restructured our debt portfolio in 2018, in order to minimise
interest expense incurred. The restructure included:
+ Redemption in May 2018 of a ten-year $600 million Rule 144A/
Regulation S senior unsecured bond, prior to the original
maturity date of 1 March 2019.
+ Cancelling a number of bilateral facilities totalling $700 million.
2019 outlook
Our investment expenditure guidance for 2019 is $1,600 million
to $1,700 million.
We are increasing expenditure on our growth projects
including Scarborough, Pluto LNG Train 2, Browse to North
West Shelf Project and SNE Field Development Phase 1.
Expenditure for the Greater Enfield Project will reduce ahead
of expected first oil in mid-2019, and work will continue on the
Wheatstone Julimar Phase 2 development.
Exploration expensed and capitalised in 2019 will reduce
to approximately $200 million, from $310 million in 2018.
For 2019 the expected impact on NPAT is $30 million for
a $1 movement in the Brent oil price, and $6 million for a
$0.01 movement in the AUD/USD exchange rate.
We will actively manage our debt portfolio in 2019.
Debt maturity
1,200
Investment expenditure
Drawn debt
Undrawn debt facilities
2,000
n
o
i
l
l
i
m
$
600
n
o
i
l
l
i
m
$
1,000
Scarborough
acquisition
Exploration
Growth1
Wheatstone
Greater Enfield
Base business2
0
0
9
1
0
2
0
2
0
2
1
2
0
2
2
2
0
2
3
2
0
2
4
2
0
2
5
2
0
2
6
2
0
2
7
2
0
2
8
2
0
2
9
2
0
2
2018
2019E
1. Growth includes Scarborough, Pluto LNG Train 2, Browse to NWS Project, SNE Field
Development (Senegal), Myanmar, Kitimat and other spend.
2. Base business includes Pluto LNG, Pluto-NWS Interconnector, NWS Project,
Australia Oil and Corporate.
Woodside Petroleum Ltd | Operating and Financial Review 21
STRATEGY
AND CAPITAL
MANAGEMENT
We have a clear strategy to deliver superior shareholder returns across three distinct time horizons.
These horizons are characterised by cash generation
(2017–2021), unlocking value (2022–2026) and repeating
our successes (2027+).
As a low cost and high margin producer, Woodside is uniquely
positioned as the global LNG market rebalances
and grows into the future.
HORIZON I 2017–2021
+ Lower capital intensity developments
+ New revenue streams
+ Preparing for Horizon II growth
+ New growth platforms through
exploration and acquisitions
+ Expanding the LNG market
CASH GENERATION
In Horizon I we are delivering the committed growth that will underpin
targeted production of approximately 100 MMboe in 2020, as we invest
in our significant LNG projects. We have new revenue streams from
Wheatstone LNG and Greater Western Flank Phase 2, and Greater Enfield
is expected to commence production in 2019. Progression of our LNG
developments is a priority through this period as we seek to deliver
successful projects which meet growing Asian LNG demand.
HORIZON II 2022–2026
VALUE UNLOCKED
+ Developments leveraging existing
infrastructure
+ Growth funded by base business
and Horizon I growth
+ Monetise exploration and
acquisition success
+ Increase supply to new and
traditional markets
We are targeting significant new production early in Horizon II.
First oil from Phase I of the SNE oil development offshore Senegal
is expected in 2022. We are targeting Scarborough upstream RFSU
in 2023, Pluto LNG Train 2 RFSU in 2024; and Browse RFSU for the
first FPSO in 2026 and the second in 2027. These developments will
significantly increase our developed reserve base and contribute to
earnings for years to come. We are also seeking to establish new
production from our resources in Myanmar within this horizon.
HORIZON III 2027+
+ Capital-efficient developments
+ Unlock new major hubs
SUCCESS REPEATED
Within our portfolio, we have resources identified for production
in Horizon III. These include the Sunrise resource located 450
km north-west of Darwin, and our significant resource position
in the Liard and Horn River basins supporting the Kitimat LNG
development in British Columbia, Canada.
OUTSTANDING BASE BUSINESS
SUSTAINABLE ENERGY
22 Woodside Petroleum Ltd | Annual Report 2018
Outstanding base business
Our outstanding base business is underpinned by world-
class LNG and FPSO reliability, cost discipline and strong
safety and environmental performance. We will continue to
maximise value by developing and deploying industry-leading
technology across our portfolio of assets.
Sustainable energy
Woodside is focused on providing sustainable energy
solutions that deliver enduring value to shareholders, partners,
communities and governments. We continue to promote LNG
as a lower-emissions fuel and have committed to developing
LNG as a transport fuel. As global energy demand grows we
will be ready to meet it, building our growth across the next
decade and beyond.
+ Shareholder distributions, in accordance with our Dividend
Policy which specifies that we will pay a minimum of
50% of underlying net profit after tax in dividends. We target
an 80% dividend payout ratio subject to market conditions
and investment requirements. Our strong shareholder
distributions will be funded from our high margin base
business and committed growth.
+ Returning surplus cash to shareholders by increasing the
dividend payout ratio, special dividends or stock buy-backs
is an option retained and considered by Woodside.
Capital allocation
Woodside’s capital allocation framework provides flexibility to
optimise returns and risk in a range of macroeconomic scenarios.
Our priorities are:
+ Debt service, to ensure that we continue to have access to
premium debt markets at a competitive cost to support our
growth activities. We seek to manage average debt maturity
on our debt portfolio. Our gearing target is between 15% and
35%, which has been revised from between 10% and 30% to
reflect the impact of the leasing accounting standard AASB 16.
We continue to target maintaining an investment-grade
credit rating.
+ Investment expenditure, to sustain and grow our business.
Woodside seeks to build its portfolio through the
disciplined allocation of capital to exploration, acquisition
and development opportunities that complement existing
positions and capabilities. Our developments will seek to
prioritise lower capital intensity, faster to market, capital-
efficient opportunities that utilise existing infrastructure
where possible. Through Horizon I, we are investing in LNG
projects that will be required to meet a projected LNG supply
shortfall in Horizon II.
INVESTMENT CRITERIA
+ Our investment criteria target investment decisions which
deliver returns on capital exceeding our cost of capital.
+ We test the robustness of our investments against a range
of low-outcome and low-carbon scenarios.
+ The economic criteria we use are set independently
+ We set higher target metrics for investments with
of project decisions.
+ We apply a suite of target metrics that are aimed
at delivering superior shareholder returns from our
investment decisions.
increased complexity and risk, and seek to preserve any
upside potential.
+ A typical metric required for investment is a target
ungeared internal rate of return between 12% and 15%.
Woodside Petroleum Ltd | Operating and Financial Review 23
OUR BUSINESS
MODEL AND
VALUE CHAIN
Woodside’s business model seeks to maximise the value of its portfolio across the value chain. This is
achieved by prioritising competitive growth opportunities; by utilising our operational, development and
drilling capabilities; and by deepening relationships in LNG markets with strong demand growth. We do
this with the objective of generating superior shareholder returns across the three horizons and beyond.
ACQUIRE AND EXPLORE
We grow our portfolio through acquisitions and exploration, based on a disciplined
approach to increasing shareholder value and appropriately managing risk. We look for
material positions in world-class assets and basins that are aligned with our capabilities and
existing portfolio. We assess acquisition opportunities that complement our discovered and
undiscovered resource base.
2018 illustrations
Acquired an additional 50%
interest in WA-1-R, containing
the majority of the Scarborough
gas field.
DEVELOP
We are building on over 30 years of development expertise from our assets in Western Australia
by investing in opportunities in Australia, Senegal, Myanmar, Canada and Timor-Leste. During
the development phase, we maximise value by selecting the most competitive concept for
extracting, processing and delivering hydrocarbon products to market. Once the value of the
development is confirmed, and approvals are received, a final investment decision is made and
project delivery and construction commence.
Assumed operatorship,
commenced FEED activities
and received approval for
the Environmental and Social
Impact Assessment for the SNE
Field Development Phase 1.
OPERATE
Our operations are characterised by strong safety and environmental performance in remote and
challenging locations. As Australia’s premier LNG operator, our operated assets include the NWS
Project and Pluto LNG. We also operate two FPSO facilities and have a non-operated interest in
Wheatstone LNG. By adopting technology, a continuous improvement mindset and an efficient,
well planned, cost competitive operating model, we have been able to reduce operating costs,
increase production rates and improve safety performance to optimise the value of our assets.
Record LNG production of
72 MMboe.
MARKET
Our marketing and trading strategy is to build a diverse customer portfolio and pursue
additional sales agreements, underpinned by reliable domestic gas and LNG production,
supplemented by globally sourced volumes. Our relationships with customers in Australian and
international energy markets have been maintained through a track record of reliable delivery
and expertise across contracting, marketing and trading. In addition to long-term sales, we
pursue near-term value accretive arrangements through spot and mid-term sales and LNG
shipping transactions.
DECOMMISSION AND DIVEST
Individual assets within our portfolio have a finite life. Decommissioning is integrated into
project planning, from the earliest stages of development through to the end of field life.
At appropriate intervals, we consider opportunities to divest ourselves of assets to maximise
the value of our portfolio. Our decommissioning planning is implemented at the appropriate
time. Through working together with our partners and technical experts, we are able to
identify the most sustainable and beneficial post-closure options that minimise financial,
social and environmental impacts.
Several new domestic gas and
LNG agreements executed for
mid- and long-term supply.
Decommissioning of the
Nganhurra FPSO following
cessation of production in
November 2018.
24 Woodside Petroleum Ltd | Annual Report 2018
ENERGY
MARKETS
Rebalancing of the global LNG market is expected in the early 2020s, with global LNG demand forecast
to exceed supply. Woodside's strategy is focused on delivering new LNG supply to energy markets in the
required time frame.
The LNG market is growing rapidly, underpinned by the
role of natural gas as a clean, reliable and affordable energy
source. The expectations of some market commentators of
a large oversupply have not materialised. LNG demand has
increased by over 21% in the past two years. Continued LNG
demand strength, supported by higher energy demand and
an increased focus on air quality, is signalling the start of a
new cycle of LNG project sanctions.
A significant driver of recent LNG demand growth has
been Asian countries’ increased focus on air quality. Gas is the
cleanest burning hydrocarbon and has received strong policy
support from countries seeking to replace coal-fired power
generation. China has led with large-scale replacement of coal
with natural gas.
South Korea has also developed energy policies signalling
a shift away from coal-fired and nuclear power generation
towards cleaner-burning gas. India’s energy demand growth
has been fuelled in large part by coal and accompanied by a
deterioration in air quality. To address this, India has released
new energy targets including increasing the share of gas in the
energy mix from 6% in 2018 to 15% by 2022 and prioritising
infrastructure development such as LNG receiving terminals
and gas network pipelines.
Beyond use in power generation, gas is forming part of a policy
push for cleaner sources of fuel in transport and industry. In
LNG Demand Outlook
China, industrial use already represents over 30% of total gas
demand and is expected to grow at over 4% p.a. to 2030 as
gas replaces other fuels. China has introduced incentives for
compressed natural gas (CNG) in light-duty vehicles and LNG
in trucks. Today there are around 300,000 natural gas fuelled
trucks on Chinese roads.
New supply regions such as the USA and Russia are
contributing to the growth of the global LNG market. In 2019
Australia is set to become the world’s largest supplier of LNG.
The growth of the LNG market has involved more diverse
buyers and sellers and with them, evolving commercial and
contracting structures. The traditional long-term contract
remains prevalent, but more innovative contracting structures
with variety in pricing mechanisms, contract length and
flexibility are becoming increasingly common. Both buyers and
sellers are seeking a combination of long-term, mid-term and
short-term contracts within their portfolios.
New LNG investment decisions are required in the coming
18 months to ensure the market remains adequately supplied
with LNG from the early 2020s. Projects supported by equity
partners with strong balance sheets will be best positioned to
participate. With their close proximity to Asian LNG demand
centres, our growth projects are ideally positioned to meet
growing LNG demand.
Global LNG supply1
Other
Europe
Developing Asia
China
Japan, Korea and Taiwan2
700
600
500
400
300
200
100
0
a
p
t
M
2035 forecast Asian
LNG demand
above 2018 levels
Source: Wood Mackenzie ‘Global Gas Markets Long-term outlook 2018: LNG Supply’ and
Wood Mackenzie Q4 2018.
1. Supply forecast based on existing capacity and under construction developments.
2. LNG demand growth to 2035 is widespread across Asia. Japan is the only regional market to contract. Source: Wood Mackenzie.
Woodside Petroleum Ltd | Operating and Financial Review 25
PLUTO
LNG
Production
MMboe43.3
2018 HIGHLIGHTS
+ Record LNG production rates, including 100%
reliability in Q2
+ Entered execute phase on PLA07 infill well
+ Commissioned Pluto pipeline gas facility
2019 ACTIVITIES
+ Start-up of LNG truck loading facility
+ Achieve RFSU on PLA07 infill well
LNG unit production cost
+ Undertake major turnaround in Q2
$3.6
per boe
Sales revenue
$2,510
million
LNG reliability
97.4%
28 Woodside Petroleum Ltd | Annual Report 2018
A continued focus on safety and operational
excellence has driven outstanding production from
Pluto LNG, providing a firm basis for our Burrup
Hub growth projects.
Production
Annual production of 43.3 MMboe was achieved in 2018 at a
globally competitive LNG unit production cost of $3.6/boe.
Pluto LNG continues to demonstrate strong reliability
performance, achieving 100% reliability in Q2 2018 and 99.7%
in Q4 2018. Average reliability over the year was 97.4%.
The capacity of Pluto LNG was increased to 4.9 Mtpa from
the original nameplate capacity of 4.3 Mtpa. This was achieved
by application of new technology and the ongoing delivery of
debottlenecking and optimisation projects across the facility.
Pluto LNG delivered 70 LNG cargoes (100% project), of which
48 were sold under foundation contracts, 13 under mid-term
contracts and 9 on the spot market.
56% GROSS MARGIN
lGross margin
lDepreciation and amortisation
lOther
lProduction cost
$/boe
35.7
20.1
4.8
3.6
%
56
31
7
6
PLUTO
LNG
Enabling growth
Investment continues in Pluto LNG to maintain high rates of
production into the future. Preparations are well advanced for
the facility’s first major turnaround, scheduled for Q2 2019.
The turnaround duration will be approximately 30 days and
include work required to maintain the facility’s high reliability
and performance, as well as support future project developments.
The PLA07 infill well achieved FID in 2018, targeting RFSU in
2019. FID was also taken on the Pluto water handling project
to mitigate the impact of potential future reservoir water
breakthrough. Key tie-ins will be implemented on the Pluto
platform during the 2019 turnaround, followed by the water
handling module lift in 2020 and RFSU of the module in 2021.
The development of the Pyxis and Pluto North infill wells, which
will be developed by a 25 km tieback to the Pluto platform,
entered FEED in January 2019. RFSU is targeted for 2021,
aligned with RFSU of the Pluto-NWS Interconnector (see
further information on page 41). The additional gas from
Pyxis and Pluto North will provide flexibility to optimise gas
production across the Burrup Hub facilities.
We successfully commissioned the Pluto pipeline gas facility
in December 2018, adding to Woodside’s domestic gas
supply portfolio.
The planned start-up of the Pluto LNG trucking facility in
Q1 2019 further demonstrates Woodside’s commitment to
supplying gas to the domestic market from the Pluto facility.
The Pluto LNG processing facilities are well matched to
Scarborough gas composition, which is lean, dry and contains
nitrogen. Building a second LNG train at Pluto LNG will
maximise the value of existing infrastructure and form a key
component of the Burrup Hub.
Woodside interest: 90%
Pluto LNG capacity (Mtpa)
2018
2016
Design
4.3 4.7 4.9
Pluto LNG onshore processing facility
Woodside Petroleum Ltd | Base Business 29
NWS
PROJECT
Production
34.0
MMboe
2018 HIGHLIGHTS
+ Exceeded 2018 production targets
+ Delivered 5,000th LNG cargo
+ Averaged 97.1% reliability
2019 ACTIVITIES
+ Progress commercial agreements and technical work
to process third-party gas at KGP
+ Undertake exploration of the Achernar gas prospect
LNG unit production cost
+ Take FID on Lambert Deep and South Goodwyn tie-backs
$3.6
per boe
Sales revenue
$1,497
million
Delivered
262
LNG cargoes
(100% project)
30 Woodside Petroleum Ltd | Annual Report 2018
Central to our vision for the Burrup Hub is extending
the life of the NWS Project facilities to safely deliver
reliable energy supply for decades to come, while
maintaining strong base business performance.
Production
In 2018, we continued to set the foundations for NWS Project
Extension while maintaining excellent performance from the
project’s base business. Annual production of 34.0 MMboe was
achieved at a globally competitive LNG unit production cost of
$3.6/boe. Average LNG reliability during the year was 97.1%.
The NWS Project delivered 262 LNG cargoes (100% project),
including delivery of the 5,000th cargo from KGP in
September 2018.
We continued to invest to improve plant reliability and
performance during the year, executing major onshore and
offshore turnarounds involving LNG train 1, LNG train 2 and
the Goodwyn A platform.
55% GROSS MARGIN
lGross margin
lDepreciation and amortisation
lOther
lProduction cost
$/boe
24.3
8.0
8.1
3.6
%
55
18
19
8
Enabling growth
Major turnarounds are planned in July 2019 for the
Goodwyn A platform (approximately 21 days) and LNG train 1
(approximately 19 days). An integrated turnaround campaign
is planned for September 2019, which will include LNG train 5
(approximately 19 days), fractionation (approximately 14 days),
North Rankin Complex (approximately 19 days) and North
Rankin train 2 (approximately 20 days).
A comprehensive maintenance program, with an aim of
extending the production capacity of KGP to support current
NWS reserves, began in 2013 and is now approximately 40%
complete. Future investment in the plant, including the ongoing
adoption of innovative technology, will be undertaken as
required to process gas from third-party resource owners.
Significant progress was made in the development of subsea
tie-back opportunities. The Greater Western Flank Phase 2
Project (GWF-2) commenced production in October 2018,
more than six months ahead of schedule. GWF-2 is designed
to produce at up to 800 MMscf/d (100% project).
Evaluation of incremental opportunities continues, and
the NWS Project has entered FEED on the $700 million
tie-backs of Lambert Deep and South Goodwyn to existing
offshore infrastructure. FID is expected in late 2019, with
the two developments expected to add an estimated
400 Bcf of production to the NWS Project from the early
2020s. Exploration of the Achernar gas prospect is planned
for Q2 2019.
In November 2018, the NWS Project referred a proposal to the
Western Australian Environmental Protection Authority and
the Commonwealth Department of Environment and Energy,
seeking approval for use of existing State onshore and offshore
infrastructure to enable long-term processing of third-party
gas at KGP in support of our Burrup Hub growth plans.
Woodside interest: 16.67%
2018
5,000th
CARGO
2014
4,000th CARGO
2010
3,000th CARGO
2006
2,000th CARGO
1999
1,000th CARGO
1989
FIRST CARGO
The Northwest Swan, which delivered the 5,000th LNG cargo from the NWS Project
Woodside Petroleum Ltd | Base Business 31
AUSTRALIA OIL
2018 HIGHLIGHTS
+ Commenced FPSO, subsea and
drilling activities for Greater Enfield
+ Achieved 938 days without
a recordable injury on Nganhurra
FPSO
Woodside’s share of annual production in 2018 from Ngujima-Yin FPSO (Vincent field)
was 1.3 MMbbl, down from 4.0 MMbbl in 2017 due to suspension of production on
1 May 2018 to support the Greater Enfield Project. The FPSO transited to the Keppel
shipyard in Singapore to undertake maintenance and modifications as part of the
Greater Enfield Project (see further information on page 39). Production is planned
to resume from mid-2019.
Woodside interest: 60%
Woodside’s share of annual production in 2018 from Okha FPSO (Cossack, Wanaea,
Lambert and Hermes fields) was 1.8 MMboe, down from 1.9 MMbbl in 2017 primarily
due to natural reservoir decline. Subsea life extension work will continue in 2019.
There is no major maintenance planned in 2019.
Woodside interest: 33.33%
Woodside’s share of annual production in 2018 from Nganhurra FPSO (Enfield
field) was 0.7 MMbbl, down from 0.9 MMbbl in 2017 due to natural reservoir decline.
Permanent cessation of production occurred in November 2018. In December 2018,
the FPSO departed the field for cold lay-up in Labuan, Malaysia, ahead of planned
future divestment. Plugging and abandonment of wells and the decommissioning of
remaining subsea equipment will be subject to future stakeholder engagement and
regulatory submissions.
Woodside interest: 60%
WHEATSTONE LNG
2018 HIGHLIGHTS
+ Commenced production from train 2
+ Exceeded 2018 production targets
+ Domestic gas plant export-gas
capable
Production at Wheatstone LNG (non-operated) has exceeded expectations in 2018,
highlighted by strong reliability at LNG train 1 and quicker than expected ramp up at
LNG train 2. Woodside’s share of annual production in 2018 was 9.1 MMboe.
Production from LNG train 1 has been steady
since start-up in October 2017 and continues
to demonstrate production rates above plan.
Production from LNG train 2 safely commenced in
June 2018 and reached full capacity within weeks.
A planned shutdown to remove commissioning
strainers was carried out in August 2018.
In 2018, Woodside offtake from Wheatstone LNG
comprised 12 LNG and four condensate cargoes.
There are no planned major LNG maintenance
turnarounds scheduled in 2019.
Woodside interest: 13%
Wheatstone LNG
expected to contribute
annually, once fully
operational
CANADA
32 Woodside Petroleum Ltd | Annual Report 2018
Woodside’s share of annual production from the Liard Basin in north-eastern British
Columbia was 1.2 MMboe, down from 1.3 MMboe in 2017 primarily due to natural
reservoir decline. Production is a result of the appraisal program being undertaken
to support the proposed Kitimat LNG development. Liard Basin production is
expected to cease in mid-2019.
EXPLORATION
2018 HIGHLIGHTS
+ Completed our third consecutive drilling campaign in
Myanmar in line with schedule and budget, with two
further gas discoveries
+ Discovered gas volumes at the high-end of pre-drill
estimates in the Shwe Yee Htun-2 appraisal well
in Myanmar
Exploration activities in 2018 were focused on
drilling prospects across our captured interests to
test prospectivity in emerging basins and support
Horizon III value and resource growth.
Australia
The Ferrand-1 exploration well in Block WA-404-P was drilled
between April and June 2018. Wireline logging and additional
tests confirmed intersection of a 69 m gross gas column.
In 2019, we plan to drill the Achernar exploration well in Block
WA-28-P, targeting gas in an early Jurassic North Rankin bed
reservoir, in proximity to existing gas discoveries at North Rankin
and Lambert Deep.
Myanmar
In 2018, we undertook our third successive drilling campaign in
Myanmar, which was completed within schedule and budget.
The campaign discovered gas in two exploration wells and
successfully appraised the 2016 Shwe Yee Htun-1 discovery.
The Shwe Yee Htun-2 appraisal well in Block A-6 was drilled
approximately 10 km west of the Shwe Yee Htun-1 discovery well.
Wireline logging and pressure measurements indicate that the
reservoir is highly likely to be in pressure communication with the
Shwe Yee Htun-1 discovery. The well results, combined with the
successful 2017 exploration/appraisal well at Pyi Thit-1, increased
discovered volumes within Block A-6 to a level that supports
consideration of concept selection in the near term, subject to
other factors including joint venture approval.
Woodside made the Aung Siddhi-1 gas discovery in Block AD-1,
intersecting gas in two primary targets. The discovery is close
to existing infrastructure and has enhanced the prospectivity of
surrounding Woodside acreage.
The Dhana Hlaing-1 exploration well in Block A-7 also intersected
gas in the primary target. The volume discovered is considered
non-commercial but provides indications of potential volumes
for Block A-7.
The results of the exploration wells prove the extension of
existing proven plays into new areas of the basin, and work is
ongoing to incorporate these learnings into future exploration
and appraisal drilling. Our 2019 activities are focused on moving
the discovered volumes in Blocks A-6 and AD-1 to development.
Gabon
Woodside drilled two exploration wells offshore Gabon.
The Boudji-1 well in the Likuale (F14) Block intersected a
90 m gross oil and gas column, and the Ivela-1 well in the
Luna Muetse (E13) Block intersected a 78 m gross oil column.
While both wells were determined to be non-commercial by
Woodside due to development costs associated with the water
depths being over 2,600 m, their results proved a working
hydrocarbon system with both oil and gas potential.
Morocco
The Rabat Deep-1 exploration well offshore Morocco was
completed in May 2018. Woodside considered the well to be
dry, but with minor oil indications. Consequently, the joint
venture agreed not to extend the Rabat Deep licence and it
was relinquished on 21 December 2018.
Peru
The Boca Satipo Este-1 exploration well was spudded in October
2018, targeting a large prospect with oil potential in Cretaceous
reservoirs. The well reached target depth in early February 2019.
Further analysis will determine the results and implications on
the prospectivity of the block.
Bulgaria
An exploration well, targeting a large oil prospect, is planned
for Q2 2019 in Block 1-14 Khan Kubrat, offshore Bulgaria.
YANGON
PIPELINE TO
YANGON
FUTURE COMPRESSION
PLATFORM
PROPOSED SHALLOW WATER
PROCESSING PLATFORM
Myanmar Block A-6 potential development concept: tie-back to existing Yadana platform complex (not to scale)
EXISTING YADANA
PLATFORM COMPLEX
PIPELINE TO
THAILAND
Woodside Petroleum Ltd | Base Business 33
MARKETING
AND SHIPPING
2018 HIGHLIGHTS
+ Delivered 296 LNG, condensate, crude, and LPG cargoes1
+ Executed several mid-term portfolio LNG sale and
purchase agreements (SPAs) to increase revenue
certainty and customer diversity
+ Entered long-term domestic gas agreements with
Perdaman Chemicals and Fertilisers Pty Ltd and Alcoa of
Australia Limited
2019 ACTIVITIES
+ Progress negotiations regarding long-term LNG SPAs
to position for FID on our Burrup Hub growth projects
+ Secure customers and commence first deliveries from
the Pluto LNG truck loading facility
+ Advance marketing discussions for gas resources
in Myanmar
+ Market entry for heavy sweet crude production
from Greater Enfield
1. Includes all cargoes with Woodside equity interest.
34 Woodside Petroleum Ltd | Annual Report 2018
Portfolio LNG marketing approach
Our LNG equity portfolio reached 8.1 Mtpa in 2018, following
the successful ramp up of Wheatstone LNG.
We manage our LNG portfolio through a mix of short-,
mid- and long-term contracts, supplied by Woodside equity
cargoes and supplemented by third-party purchases. Our
portfolio marketing approach provides us with flexibility and
positions us to meet changing buyer requirements.
We increased our mid-term contracted volumes in 2018 by
executing portfolio LNG SPAs for delivery of up to 4.3 million
tonnes (59 cargoes) over the period 2018 to 2023.
These included a heads of agreement with Uniper Global
Commodities for the supply of up to 0.6 Mtpa over a period
of four years commencing in 2019, to be supplied to markets
in Europe and Asia.
An agreement with RWE Supply & Trading GmbH (RWE)
was also finalised, which will commence in the fourth quarter
of 2020 and be primarily supplied by cargoes Woodside has
purchased from Corpus Christi LNG in Texas, USA.
At the end of 2018, more than 90% of Woodside’s expected
2019 LNG production has been committed to sales contracts.
Focus on marketing Burrup Hub growth projects
Our focus in 2019 will be on advancing marketing discussions
with several buyers to support FID for Scarborough and
Browse to NWS Project.
In late 2018, we finalised a long-term gas sale and purchase
agreement (GSPA) with Perdaman Chemicals and Fertilisers
Pty Ltd (Perdaman) for the supply of 125 TJ of gas per day for a
term of 20 years. The agreement, which is subject to a number
of conditions precedent, will commence between 2023 and
2025 and is underpinned by the Scarborough development.
We are also preparing for crude oil marketing from Greater
Enfield in 2019.
Expanding reliable pipeline gas supply for WA
Our portfolio supplier approach in Western Australia enables
us to meet customer requirements through a mix of short-,
mid- and long-term contracts from our supply sources which
now include the Pluto pipeline gas facility commissioned in
December 2018.
In addition to the Perdaman GSPA, Woodside entered into
three binding GSPAs for a total quantity of approximately
80 PJ, with duration of between four and ten years,
commencing between Q4 2018 and mid-2020.
Wheatstone domestic gas production in early 2019 will increase
our equity pipeline gas capacity by 26 TJ/d to approximately
150 TJ/d.
LNG trading and optimisation
We perform LNG trading and portfolio optimisation
activities across our integrated shipping, operations,
marketing, and trading teams. Our trading office was
established in 2013 in Singapore, a major hub for LNG sales
and trading. Our optimisation activities ensure the reliable
delivery of LNG cargoes and enable us to maximise the value
of our LNG portfolio.
We maintain an LNG shipping fleet of five LNG vessels under
long-term contracts. Access to our own shipping allows us to
create value, protects us against fluctuations in the shipping
market, and allows us to deliver third-party cargoes through
sub-chartering activities.
The net benefit realised from our trading and optimisation
activities in 2018 was approximately $21 million.
Promoting LNG as a low-emissions
and cost-effective fuel
The Pluto LNG truck loading facility in Western Australia,
which commenced construction in 2018, will be operational
in early 2019 to provide LNG for distribution by truck to
the Pilbara, Kimberley and Gascoyne regions of Western
Australia. In addition to providing LNG for remote power
generation, we are working with mining companies and
equipment manufacturers on the use of LNG as a heavy
transport fuel for mining operations.
We are a strong advocate for use of LNG as a marine fuel.
In 2018, LNG represented more than 90% of the fuel used in
our shipping fleet.
In 2018, Woodside participated in joint industry projects to
assess the feasibility for LNG to be used as a fuel for bulk carriers
transporting iron ore from the Pilbara. In 2019, we will undertake
activities to support FID on an LNG bunkering vessel to supply
this market.
We are also evaluating opportunities to be involved further
along the value chain to facilitate additional demand for our gas
in the international market. This may include LNG regasification
and power generation.
Loading facilities at Pluto LNG
Woodside Petroleum Ltd | Base Business 35
NEAR-TERM
GROWTH
With our focus on project excellence and innovation, we are well positioned to deliver our near-term
growth target of approximately 100 MMboe of production in 2020.
Wheatstone LNG
Wheatstone LNG produced above expectations in 2018,
demonstrating it is a world-class asset that will make a
significant contribution to Woodside’s ongoing production.
Wheatstone LNG processes gas from the offshore
Wheatstone, Iago, Julimar and Brunello gas fields, located
220 km from Onslow, Western Australia. The Wheatstone
onshore facilities comprise two LNG trains with a combined
capacity of 8.9 Mtpa and a domestic gas plant with a
capacity of 200 TJ/day. Woodside acquired a 13% interest
in Wheatstone LNG in 2015.
Wheatstone LNG diversifies Woodside’s production portfolio
and delivers material cash flow.
Building on reliable production performance from Wheatstone
LNG train 1 throughout the year, LNG train 2 achieved start-
up in June 2018 and produced at rates above plan due to a
quicker than expected ramp up. Woodside’s share of annual
production from Wheatstone was 9.1 MMboe in 2018.
Woodside’s share of Wheatstone production will grow in
2019 with first domestic gas deliveries expected in Q1 2019.
At the end of 2018, construction of the domestic gas plant
was complete.
Further development of Wheatstone reserves will be achieved
through phase 2 of the Woodside-operated Julimar-Brunello
Project. Woodside holds a 65% equity interest in the Julimar
and Brunello fields, which contribute 20% of Wheatstone LNG’s
foundation production. Phase 1 of the Julimar-Brunello Project
involved the tie-in of the Brunello field in 2016 as part of the
foundation project.
Phase 2, which will tie back the Julimar field to the existing
Brunello subsea infrastructure connected to the Wheatstone
offshore platform, entered FEED phase in 2018. The project is
targeting FID in Q2 2019 and RFSU in 2022.
Once fully operational for both LNG and pipeline gas,
Wheatstone will contribute more than 13 MMboe to
Woodside’s annual equity production.
Wheatstone LNG Woodside interest: 13%
Julimar-Brunello Project Woodside interest: 65%
CASE STUDY
Woodside developed and implemented its non-operating
joint venture (NOJV) strategy for Wheatstone LNG in 2016.
The key focus was to support Operator to achieve a safe and
flawless start-up of LNG trains 1 and 2.
We provided 25 Woodside employees to support both the
offshore and onshore components of the development. We
shared recent knowledge and experience in the areas of
completions, commissioning and start-up at both Pluto LNG
and KGP, utilising our 30 years’ experience of LNG operations.
A key to success was the excellent collaborative relationship
with Operator, which was the foundation for Woodside to
provide value-adding support to the project. From the outset,
we were determined to focus on areas where we could add
value through constructive engagement with the Operator
and other participants.
Opportunities were identified to simplify work processes,
and a structured execution model was implemented for the
completion of construction, commissioning, start-up and
final handover to operations.
We were supportive of Operator’s drive to deliver the project
efficiently. We shared site productivity lessons that we learned
on a KGP maintenance program. Operator’s personnel visited
KGP and Woodside employees visited the Wheatstone LNG
site at Onslow to identify opportunities for improvement.
The first LNG cargo was successfully delivered from train 1
in October 2017 and from train 2 in June 2018. Both trains
have exceeded performance and reliability expectations,
with train 1 start-up lessons implemented on train 2,
reducing the start-up duration by approximately 75%.
Lessons from the start-up of Wheatstone LNG continue to
be shared between both parties, and have created a solid
platform for future opportunities to reduce operating costs
and identify potential synergies.
As Woodside prepares to realise the Burrup Hub vision,
collaboration between operators and partners is paramount
to successful project execution. The collaborative approach
achieved on the Wheatstone Project will set the benchmark
for future LNG growth projects.
38 Woodside Petroleum Ltd | Annual Report 2018
Greater Western Flank Phase 2
The Greater Western Flank Phase 2 Project (GWF-2) represents
the next phase in gas supply to KGP.
GWF-2 commenced production in October 2018, $630 million
under budget (100% project) and six months ahead of schedule.
The project involved the tie-back of eight subsea production
wells by a 35 km subsea pipeline from six offshore fields (Keast,
Dockrell, Sculptor, Rankin, Lady Nora and Pemberton) to the
existing Goodwyn A platform.
GWF-2 was driven throughout by a commitment to
innovation and cost discipline. Excellent overall performance
and close collaboration with contractors enabled the project
to consolidate a two-phase well completion campaign into
a single scope, accelerating the key work packages while
reducing project risks.
Gas from the GWF-2 fields adds approximately 1.6 Tcf
to existing North West Shelf reserves (100% basis).
Woodside interest: 16.67%
Greater Enfield
The Greater Enfield Project is on track for first oil in mid-2019,
starting a new chapter in Woodside’s established oil operations
off North West Cape, Western Australia.
The project involves development of the Laverda Canyon,
Norton over Laverda and Cimatti oil accumulations by a 31 km
subsea tie-back to the Ngujima-Yin FPSO, located over the
Vincent oil field.
Woodside’s share of the 2P reserves targeted for development is
41 MMboe (69 MMboe 100% project) from the oil accumulations,
and is initially estimated to increase production by more than
24,000 bbl/d (40,000 bbl/d 100% project).
The Ngujima-Yin FPSO suspended operations as planned on
1 May 2018 and transited to the Keppel shipyard in Singapore
to commence maintenance and modification activities.
The FPSO dry-dock work program was completed in Q4 2018.
Final modifications and maintenance activities will be carried
out quayside, before the FPSO returns to location in mid-2019.
Subsea pipelay and drilling campaigns were conducted
throughout 2018, with installation of the 31 km flowline
system and subsea infrastructure substantially complete
in December 2018. Development well drilling continued
throughout Q4 2018, and at the year end, eight of the project’s
12 development wells had been drilled and completed.
At the end of 2018 the project was 83% complete, and remains
on budget and on schedule for first oil in mid-2019.
Woodside interest: 60%
Ngujima-Yin FPSO at Keppel shipyard in Singapore
Woodside Petroleum Ltd | Developments 39
BURRUP
HUB
We are developing an integrated, regional LNG production centre on the Burrup Peninsula utilising our
proven LNG facilities. The Burrup Hub will provide a long-term solution for processing gas resources to
supply domestic and export markets for decades to come.
To realise the Burrup Hub vision we are advancing several projects that unlock new gas resources and prepare the onshore
facilities for processing these resources. The projects include Scarborough, Browse to NWS Project, Pluto LNG Train 2, NWS
Project Extension and the Pluto-NWS Interconnector. Together, these projects will maximise the efficient use of existing assets.
Scarborough
+ Development of 7.3 Tcf (100%, 2C) from
the Scarborough resource
+ Semi-submersible floating production unit
and trunkline to Pluto LNG with an offshore
capacity of 7.5 Mtpa (LNG and domestic gas)
Browse to NWS Project
+ Development of 13.9 Tcf of dry gas and
390 MMbbl of condensate (100%, 2C) from
the Browse resources
+ Two FPSO facilities processing gas and
condensate, and a trunkline to the NWS
Project with an offshore capacity of 11.4 Mtpa
(LNG/LPG and domestic gas)
See page 42 for more information
See page 44 for more information
Pluto LNG
NWS Project
Pluto LNG Train 2
Pluto-NWS Interconnector
NWS Project Extension
+ Construction of Pluto LNG
Train 2, with capacity of
approximately 5 Mtpa
LNG trucking
Pluto domestic gas
See page 42 for more information
+ Construction of a pipeline
connecting Pluto LNG and KGP
+ Refurbishment to extend the
life of the NWS Project facilities
for processing third-party gas
resources
+ Targeting extension of the facility
life by 30+ years
BURRUP HUB
Future development of the Jupiter and
Thebe fields and other gas resources
40 Woodside Petroleum Ltd | Annual Report 2018
Development of the Burrup Hub will extend the life of
Woodside infrastructure, enabling growth and delivering
sustainable value for our shareholders, governments, partners
and the communities in which we operate. It will unlock third-
party resources, providing owners with the ability to process
their gas for sale to domestic and export markets. Initially the
Burrup Hub will involve the development of some 20 to 25 Tcf
of gross (100%) dry gas resources. This will position Australia
to take advantage of the expected global LNG supply gap
from the early 2020s, providing long-term energy security.
Significant employment and contracting opportunities will be
generated as these projects are progressed.
Pluto-NWS Interconnector
The Pluto-NWS Interconnector is a pipeline connecting Pluto
LNG with KGP, including metering equipment, to allow the
transfer of gas between the two facilities.
NWS Project Extension
Central to the Burrup Hub vision is the transition of KGP into
a third-party tolling facility as the NWS Project resources reach
end of field life.
A referral for primary environmental approval associated with
the Interconnector was submitted to the WA Environmental
Protection Authority and the Commonwealth Department of
Energy and Environment in Q4 2018.
A supporting application associated with Woodside’s
Pluto LNG facility was lodged with the Western Australian
Environmental Protection Authority in December 2018.
Woodside intends to lodge a similar application in Q1 2019
for the Interconnector tie-in to KGP.
Subject to joint venture, regulatory and other approvals,
the Interconnector provides a pathway for development of
unallocated resources in the Carnarvon and Greater Exmouth
basins. Woodside is targeting FID in 2019 and RFSU in 2021.
In November 2018, the NWS Project participants signed non-
binding preliminary agreements with the Browse Joint Venture
and Chevron, the leaseholder of the Clio-Acme fields, for the
processing of their respective offshore gas resources through
the NWS facilities. Long-term processing of third-party gas,
such as the Browse resources, at KGP will extend the life of the
facility for decades.
A proposal to use existing State onshore and offshore
infrastructure to enable the long-term processing of third-
party gas at KGP was referred by the NWS Project to the
Western Australian Environmental Protection Authority and
the Commonwealth Department of Environment and Energy
in November 2018.
The NWS Project on the Burrup Peninsula
Woodside Petroleum Ltd | Developments 41
SCARBOROUGH
AND PLUTO LNG TRAIN 2
2018 HIGHLIGHTS
+ Completed acquisition of an additional
50% interest in WA-1-R
+ Completed concept definition for Scarborough
and Pluto LNG Train 2
+ Progressed technical and commercial engagement
+ Entered FEED on Pluto LNG Train 2
+ Referred proposals to environmental regulators
+ Subsequent to the period, awarded contracts
for Scarborough front-end engineering design
activities
2019 ACTIVITIES
+ Execute FEED activities for Scarborough
and Pluto LNG Train 2
+ Finalise commercial arrangements for
processing of Scarborough gas
+ Finalise the Scarborough Development
Agreement with the Government of
Western Australia
42 Woodside Petroleum Ltd | Annual Report 2018
Woodside’s safe and reliable Pluto LNG facility is
positioned to unlock value from Scarborough.
Scarborough
Woodside assumed operatorship of Scarborough in April 2018,
following the acquisition of an additional 50% participating interest
in WA-1-R.
Woodside is well placed to deliver its preferred development
concept, processing Scarborough gas through a brownfield
expansion of Pluto LNG.
The Scarborough gas resource is located in the offshore
Carnarvon Basin, approximately 375 km west-north-west of the
Burrup Peninsula in Western Australia. This resource is estimated
to contain 7.3 Tcf (100%, 2C) of gas.
The 0.7 Tcf (1.4 Tcf, 100%, 2C) Thebe and 0.2 Tcf (0.5 Tcf, 100%, 2C)
Jupiter gas fields provide opportunities for future tie-backs to
Scarborough infrastructure.
The upstream development concept is to initially develop the
Scarborough gas field with up to seven subsea, high-rate gas
wells, tied back to a semi-submersible floating production unit.
The upstream design capacity will be 7.5 Mtpa (100% project,
including 1 Mtpa of domestic gas).
The proposed export pipeline route traverses the Carnarvon Basin,
in close proximity to undeveloped fields. Provision for future
tie-ins is planned and engagement is progressing with third-party
resource owners.
A geophysical and environmental deep-water survey of the pipeline
route was completed in July 2018, to define the environment
between the Scarborough and Pluto field areas.
Geophysical, geotechnical and metocean survey campaigns were
initiated in Q4 2018 and Q1 2019, to acquire data to support the
engineering design of the pipeline.
In December 2018, the Scarborough Joint Venture referred a
proposal for activities in State waters to the Western Australian
Environmental Protection Authority and the Commonwealth
Department of Environment and Energy.
Woodside awarded contracts in January 2019, in its corporate
capacity and funded on a 100% basis, for front-end engineering
design activities for the floating production unit, the export
trunkline and the subsea umbilical risers and flowlines.
Woodside is targeting FID in 2020 and upstream RFSU in 2023.
Scarborough Woodside interest: 75%
Pluto LNG Train 2
Woodside’s preferred development option is to process
Scarborough gas through a brownfield expansion of
Pluto LNG. The expansion will include construction of a
second LNG train with a capacity of approximately 5 Mtpa
and installation of domestic gas infrastructure to increase
capacity to approximately 225 TJ/d.
The Scarborough reservoir characteristics are well matched to
the Pluto LNG basis of design. Pluto LNG was originally designed
to allow efficient brownfield development and third-party gas
processing. Existing primary environmental approvals for Pluto
LNG allow for two LNG trains and supporting infrastructure.
An area for a second train was pre-prepared with the foundation
project in 2007-2008. Minimal further earthworks are required
for Pluto LNG Train 2.
In December 2018, Woodside awarded Bechtel the contract
to complete FEED for Pluto LNG Train 2, with the option for
the full execute phase contract subject to a positive FID.
Woodside is targeting FID in 2020 and downstream RFSU
in 2024.
Pluto LNG Train 2 Woodside interest: 100%
SCARBOROUGH FLOATING
PRODUCTION UNIT
PLUTO PLATFORM
~430km TO PLUTO LNG
~190km TO PLUTO LNG
SCARBOROUGH PIPELINE
SHORE CROSSING
PLUTO LNG TRUCK
LOADING FACILITY
TO KARRATHA
GAS PLANT
PROPOSED
EXISTING
PLUTO LNG
PLUTO LNG
TRAIN 2
DOMESTIC GAS
INFRASTRUCTURE
PLUTO-NWS
INTERCONNECTOR
Scarborough and Pluto LNG Train 2 development concept (not to scale)
Woodside target schedule
2019
FEED
2020
FID
2023
Scarborough
RFSU
2024
Pluto LNG
Train 2 RFSU
Woodside Petroleum Ltd | Developments 43
BROWSE TO
NORTH WEST
SHELF PROJECT
2018 HIGHLIGHTS
+ Commenced concept definition phase for the
Browse to NWS Project
+ Signed a non-binding, preliminary tolling
agreement between the Browse Joint Venture
and NWS Project for the processing of Browse
gas resources through KGP
+ Referred the Browse to NWS Project and
the NWS Project Extension to the Western
Australian Environmental Protection Authority
and the Commonwealth Department of the
Environment and Energy
2019 ACTIVITIES
+ Conclude binding, fully-termed gas
processing agreements
+ Progress primary environmental approvals
+ Finalise the Browse Development Agreement
with the Government of Western Australia
The Browse resources are progressing towards
commercialisation.
Located offshore, approximately 425 km north of Broome in north-
west Australia, the Browse resources, containing the Brecknock,
Calliance and Torosa fields, are estimated to contain 13.9 Tcf of dry
gas and 390 MMbbl of condensate (100%, 2C).1
The Browse Joint Venture (BJV) selected the Browse to NWS
Project development concept, including two FPSO facilities, and
commenced the concept definition phase in September 2018.
The project will deliver gas through an approximately 900 km
pipeline to existing NWS infrastructure, producing around 10 Mtpa
of LNG/LPG and 1.4 Mtpa of domestic gas (100% project).
In November 2018, the BJV and NWS Project participants signed
a non-binding, preliminary tolling agreement for the processing of
Browse gas resources through KGP. Four of the five BJV participants
hold interests in both the BJV and NWS Project.
The BJV is proposed to be the foundation tenant for the NWS
Project Extension.
The preliminary tolling agreement is being converted to a binding,
fully-termed gas processing agreement.
Several contracts were awarded to support the concept definition
phase, including the engineering design of the FPSO facilities and
the pipeline route survey.
+ Commence FEED
1. Gross (100%) 2C resource estimate (net 4.3 Tcf and 119 MMbbl).
Browse FPSO development concept over the Brecknock, Calliance and Torosa fields (not to scale)
44 Woodside Petroleum Ltd | Annual Report 2018
In October 2018, the BJV referred the Browse to NWS Project
to the Western Australian Environmental Protection Authority
and the Commonwealth Department of the Environment and
Energy. The referrals are the initial step in the environmental
approvals process for the development.
To support the design of the subsea pipelines, a metocean survey
campaign commenced in Q1 2019 to capture current, temperature
and turbidity data along the proposed pipeline route.
Developing Browse through existing Woodside-operated
infrastructure will deliver a globally competitive project for the
benefit of governments, the local community, titleholders and
infrastructure owners.
Woodside interest: 30.6% (Browse)
SCOTT REEF WATERS
BROWSE FPSO
FACILITIES
AUSTRALIA
BROWSE FPSO
FACILITIES
NORTH RANKIN
COMPLEX
KARRATHA GAS
PLANT
NORTH RANKIN COMPLEX
KARRATHA GAS PLANT
PROPOSED
EXISTING
Browse to NWS Project development concept (not to scale)
Woodside target schedule
2019
FEED Entry
late
2020
FID
2026
Calliance and
Brecknock
FPSO RFSU
2027
Torosa
FPSO RFSU
Woodside Petroleum Ltd | Developments 45
SENEGAL
2018 HIGHLIGHTS
+ Assumed the role of operator of
the SNE development in Senegal
+ Commenced FEED activities
+ Submitted the SNE Development and
Exploitation Plan to the Government
of Senegal
+ Environmental and Social Impact
Assessment was approved
2019 ACTIVITIES
+ Complete technical and commercial
activities to support FID
+ Commence execute phase works
+ Progress domestic gas opportunity
SNE Field Development Phase 1
Woodside acquired a material position in the highly prospective offshore
region of Senegal in 2016 as a joint venture participant in the Rufisque
Offshore, Sangomar Offshore and Sangomar Deep Offshore (RSSD)
permit areas, 100 km offshore and south of Dakar. The RSSD blocks include
the SNE discovery which offers near-term oil production from the SNE
Field Development Phase 1 and is positioned to be Senegal’s first offshore
oil development.
The SNE Field Development Phase 1 has made substantial progress in 2018,
delivering on the planned program of work.
Since the discovery of the world-class SNE and neighbouring FAN fields
in 2014, a significant drilling program has been undertaken to appraise the
SNE field.
The first phase for the development will target an estimated 230 MMbbl of oil
resources (P50 gross) from the lower, less complex reservoirs, and an initial
pilot phase in the upper reservoirs.
The development concept is a stand-alone FPSO facility with 23 subsea
wells and supporting subsea infrastructure. The FPSO is expected to
have a capacity of around 100,000 bbl/day and will be designed to allow
subsequent SNE development phases, including options for gas export
to shore and for future subsea tie-backs from other reservoirs and fields.
The RSSD joint venture submitted the SNE Development and Exploitation
Plan to the Ministry of Petroleum and Energies in October 2018. In January
2019, the RSSD joint venture was granted an extension of the production
sharing contract (PSC) for the SNE area.
46 Woodside Petroleum Ltd | Annual Report 2018
SNE Field Development Phase 1 concept (not to scale)
ESIA validation meeting with State and regional Government representatives
Woodside assumed the role of operator of the RSSD joint
venture in December 2018, following approval from the Minister
of Petroleum and Energies. On 17 December 2018, Woodside
announced the commencement of FEED activities following the
award of the subsea FEED contract.
The development’s Environmental and Social Impact Assessment
(ESIA) Report was approved by the Ministry of the Environment
and Sustainable Development on 2 January 2019. The ESIA is
a comprehensive study of potential environmental and social
impacts and benefits which may arise from the development.
In preparing the ESIA, significant stakeholder engagement was
undertaken in the Dakar, Thies and Fatick coastal regions of
Senegal to understand local concerns, issues and expectations.
In 2019, we will work with the Ministry of Petroleum and
Energies, Petrosen and SENELEC, the national electricity
company of Senegal, to collectively pursue an opportunity
to export pipeline gas to shore.
The RSSD joint venture maintained its social investment
program in 2018, which included English language training for
key stakeholders and a mobilisation project with seven fishing
communities in Yenne. The fishing community mobilisation
project, led by The Hunger Project, is addressing health and
safety education, environmental management and sustainable
fishing practices. These programs are in addition to Woodside’s
corporate investment in early childhood education in Dakar with
Save the Children through the Woodside Development Fund.
The RSSD joint venture is proposing to undertake a 3D
marine seismic survey in Q2 2019, subject to government
and regulatory approvals. It is expected that the 3D marine
seismic survey will improve reservoir definition supporting
well positioning and optimisation.
The RSSD joint venture submitted a request to the Ministry in
January 2019 for an extension of the FAN and SNE-North-Spica
exploration area to undertake further evaluation works.
Woodside also worked with government environment officials
in Senegal to develop a broader understanding of the oil and gas
industry by hosting a week-long workshop in June 2018.
Refer to the Sustainable Development Report 2018
for more information on our social investment outcomes.
FID is targeted for mid-2019. The development is a key
component of Woodside’s growth strategy to be delivered
in Horizon II.
Woodside interest: 35%
2018
FEED
2019
FID
2022
First oil
Woodside Petroleum Ltd | Developments 47
HORIZON III
GROWTH
Sunrise
Kitimat LNG
Australia and Timor-Leste signed a new treaty on
6 March 2018 to establish their permanent
maritime boundaries in the Timor Sea.
In 2018, we focused on developing a globally
competitive project which will be aligned with
LNG market demand growth.
The new treaty provides a pathway to the development
of Greater Sunrise, provided the underlying arrangements,
including the new Greater Sunrise PSC and agreed fiscal
regime, are on terms and conditions equivalent to the existing
regime and give the Sunrise Joint Venture the fiscal and
regulatory certainty necessary for a commercial development
to proceed.
Negotiations between the two Governments and the Sunrise
Joint Venture on the new Greater Sunrise PSC commenced in
November 2018.
While the new PSC arrangements are being negotiated, the
Sunrise Joint Venture will meet its obligations under existing
PSCs (JPDA 03-19 and JPDA 03-20) and Retention Leases (NT/
RL2 and NT/RL4), continue ongoing social investment activities
in Timor-Leste and maintain an office in Dili.
The Kitimat LNG Development is a 50/50 joint venture
between Woodside Energy International (Canada) Limited
and Chevron Canada Limited (Operator).
The project is targeting a globally competitive cost of supply,
with significant reductions in Kitimat LNG unit cost already
achieved since Woodside’s investment in the project in 2015.
Key activities in 2018 have included progressing value
enhancement opportunities in the Kitimat LNG design to ensure
necessary project cost competitiveness is achieved; advocating
for a clear, stable and competitive fiscal framework with
governments; continuing the appraisal of the Liard upstream
natural gas resource and maintaining engagement and support
for the project with First Nations and local communities.
In 2019, the joint venture is focusing efforts on activities to
drive down costs across the full value chain, advocating with
governments and maintaining engagement with key stakeholders.
Woodside interest: 33.44%
Woodside interest: 50%
Community garden in Timor-Leste, supported by the Sunrise Joint Venture in partnership with HIAM Health
48 Woodside Petroleum Ltd | Annual Report 2018
Woodside Petroleum Ltd | Developments 49
SUSTAINABILITY
Taxes and royalties
paid in Australia
A$894million1
Social contribution
A$17.7million2
Energy efficiency
improvement3
3.4%
Total recordable
injury rate
per million work hours1.32
Female workforce
representation
30.4%
Working sustainably is one of our core values
and ensures we are here for the long term.
We look after each other, our communities and
the environment. This value is embedded at every
level within our organisation and is fundamental
to realising our vision to be a global leader in
upstream oil and gas.
These themes are underpinned by our sustainability principles
which provide the foundation for ensuring we operate in a
sustainable manner:
+ Creating shared value: We believe there is shared
value for our business and the communities in which we
operate in the co-creation of opportunities in education,
employment and enterprise.
+ Operating with transparency and integrity: We are open,
honest and fair and we have the courage to do what’s right,
balancing short- and long-term interests.
+ Building a resilient business: We are committed to
supporting a sustainable energy future.
+ Operating safely and responsibly: Effective risk
management is essential to ensuring that we are best
positioned to prevent and respond to any incidents that
have the ability to impact our people, our communities and
the environment.
+ Fostering the organisation and culture: We focus on having
a values-led, high-performance culture.
Sustainable Development Report
The Sustainable Development Report 2018 provides a complete
overview of our sustainability performance and outlines our
approach to addressing our material sustainability topics.
Woodside considers sustainability topics to be material if they
have a significant economic, environmental and social impact,
or if they substantively influence the assessments and decisions
of our stakeholders. In 2018, our material topics include climate
change and greenhouse gas emissions; social and cultural
impacts on communities; health and safety; and fraud, anti-
bribery and corruption.
Woodside’s sustainability performance is linked to remuneration
for employees and executives, and is measured through
metrics within our corporate scorecard. We also measure our
performance against our material topics with annual targets.
More information on how we engage with our stakeholders,
as well as our approach to material topics and our overall
sustainability performance, can be found in our Sustainable
Development Report 2018, released in March 2019.
1. Approximately US$668 million equivalent.
2. Approximately US$12.7 million equivalent.
3. Against baseline performance, which is measured relative to product energy efficiency prior to 2016.
52 Woodside Petroleum Ltd | Annual Report 2018
COMMUNITIES
Woodside has an active role to play in contributing to the well-being of our communities and creating a
more sustainable future.
Stakeholder engagement and managing impacts
We are committed to understanding and managing actual
and potential impacts from our activities.
the Karratha community by announcing that we will transition
our operations workforce to a predominantly residential model
over the long term.
In 2018, we continued regular engagement with our host
communities through community group meetings in Karratha
and Exmouth.
We conducted social impact assessments in 2018 for our
proposed activities in Myanmar and Senegal. Both included
significant consultations with local communities.
Late in 2018, we commenced social impact assessments for our
Burrup Hub projects. We also reinforced our commitment to
Social contribution
We build and maintain partnerships that allow us to engage in
real conversations with the local community. We have aligned
our social contribution approach across four focus areas:
education and early-childhood development; environment;
technology and innovation; and arts, culture and community.
MIA YELLAGONGA
From September 2018 we transitioned to our new
headquarters in Perth at Mia Yellagonga. This project has
been guided by a desire to foster innovation, collaboration
and acceleration in line with Woodside Compass values.
In designing the campus, we targeted sustainable
construction and design that would minimise waste and
pollutants and prioritise long-term energy efficiency.
The facility has received a rating of 6 Green Stars, the
highest rating awarded by the Green Building Council
Australia. Energy use in the building is monitored to ensure
it continues to meet stringent efficiency targets.
The advanced wellbeing features and a variety of workspace
choices, enabled by cutting edge technology, ensure the new
precinct sets the scene for optimal performance.
From the use of biometrics, backed by global best practice
processes, to creating a culturally sensitive environment,
each feature has been carefully considered to help enable a
new way of working.
Utilisation of new collaboration tools is enabling effective
communication and efficient decision making, which is
important as we execute our growth strategy.
Woodside Petroleum Ltd | Sustainability 53
PEOPLE
We continue to grow outstanding leaders, build diverse capability, drive an inclusive high-performance
culture and optimise workforce performance.
2018 HIGHLIGHTS
+ Positive progress against Woodside’s Reconciliation
Action Plan
+ Increased female workforce representation
+ Increased Indigenous workforce representation
+ Increased membership of Woodside inclusion and
diversity community groups
Inclusion and diversity
In 2018, we progressed our 2016-2020 Reconciliation Action
Plan (RAP) and commenced implementing an updated three-
year inclusion and gender diversity strategy.
Key statistics from the year show improvement across a
range of key indicators:
+ Increased the directly employed Indigenous workforce
from 117 employees in 2017 (3.3% of total workforce) to
130 employees (3.7% of the total workforce and above
target of 3.5%).
+ Increased the number of Indigenous tertiary scholarships
+ Delivered 145 new leadership development programs
from 22 in 2017 to 34 in 2018.
across the business
Productivity performance
In 2018, we maintained a flat and efficient organisation to
achieve business priorities. Global headcount remained stable
at 3,662 and global voluntary turnover was 3.5% (3.2% 2017).
Building culture and capability
Woodside continues to build an inclusive, values-led, high-
performing culture. Outstanding leadership and capability
development of our workforce are key enablers in driving
Woodside’s future success. In response to employee survey
feedback and to provide greater clarity on the leadership skills
and behaviours required to deliver our growth portfolio, we
launched our revised leadership expectations in May 2018.
Building on foundations from 2013, a number of enhancements
were implemented to enable more targeted and effective
development of leadership capability and support our drive to
shift employee mindsets to ‘innovate, collaborate, accelerate’.
Our ability to grow outstanding leaders remains evident with
76% of senior leader appointments in 2018 coming from internal
promotions, an improvement on 68% in 2017.
+ Increased female representation from 29% in 2017 to 30.4%.
+ Increased senior and executive female representation from
17.6% and 23.9% respectively in 2017, to 19.3% and 24.4%.
+ Decreased the voluntary turnover of female employees from
4.5% in 2017 to 3.6%.
+ Increased membership of diversity and inclusion community
groups; Gender Equality Matters (increased 18%), Woodside
Reconciliation Community (increased 60%) and Spectrum
(employee network supporting a more inclusive working
environment for LGBTI+ staff, increased 21%).
Refer to Woodside’s website for more information.
Indigenous employment rate
2.6%
2.6%
1
0
1
9
9
2.7%
4
9
3.7%
0
3
1
3.3%
7
1
1
3.0%
3
0
1
2013
2014
2015
2016
2017
2018
Number of employees
Percentage of total employees
54 Woodside Petroleum Ltd | Annual Report 2018
HEALTH
AND SAFETY
In 2018, Woodside recorded its second best ever safety performance through strong leadership and
enhanced collaboration with our contractor workforce. We continue to strive for every day to be a
‘Perfect HSE Day’, with no injuries and no incidents.
Safety culture survey
A mature and positive safety culture strongly correlates with
improved, sustainable safety performance. Measuring safety
culture is considered best practice by leading industries.
In 2018, we conducted a company-wide safety culture
survey to understand the health and safety perspectives
of our workforce and compare our safety culture maturity
to other industries. We received a strong response to the
survey, allowing us to identify our strengths and areas for
improvement. External benchmarking of this data highlighted
that the safety culture performance of our Operations and
Developments divisions exceeded the industry average.
Safer Together WA/NT launch
Woodside led the formation of a new industry body, Safer
Together Western Australia/Northern Territory, modelled
on the success of Safer Together Queensland. We hosted
the first conference in September 2018. Over 60 contractor
and operator members shared leadership lessons to improve
industry health and safety performance.
Contractor safety forum
Woodside facilitated a safety performance workshop in
collaboration with key contractors to generate strategies for
stopping injuries. Over 70 ideas and five prototype solutions
were developed. These were shared with joint industry
working groups, including the Safer Together WA/NT Forum.
We look forward to a continuing partnership in delivering safe
outcomes for our industry.
Process safety
Integrity of our assets and excellence in project design are critical
in preventing loss of containment events. We strengthened our
process safety competency and culture through delivering a
structured training program across the organisation for over
1,800 employees and contractors.
We had one Tier 1 loss of primary containment process safety
event (LOPC PSE) and one Tier 2 LOPC PSE in 2018. The Tier 1
event involved the release of crude oil product in a pump room,
with no injuries sustained and no release to the environment.
Best in class innovation
Woodside won the global IChemE Safety Centre Process Safety
Award in November 2018 for the ‘Watson for HSEQ’ project
in recognition of this innovative approach to process safety,
improved risk assessment and hazard identification. Watson for
HSEQ allows users to examine more than 700,000 historical data
records within minutes, enabling data-driven decision making.
APPEA Safety Excellence Award
In May 2018, Woodside was awarded the 2017 Australian
Petroleum Production & Exploration Association Safety
Excellence Award, which acknowledged our smart safety
systems, strong focus on process and assurance management,
and the use of data analytics to enhance decisions and
minimise risk.
Total recordable injury
rate (TRIR) performance
Lost time injuries (LTI) and
Lost time injury frequency (LTIF)
Tier 1 and 2 process
safety events (PSEs)
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1.64
1.29
1.32
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0.43
0.43
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0.22
3
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2016
2017
2018
LTIF (LHS)
LTI (RHS)
Tier 1
Tier 2
Woodside Petroleum Ltd | Sustainability 55
ENVIRONMENT
Woodside is taking action on climate change and we are motivated to play a key role in a clean energy future.
Environmental performance
We recognise that strong environmental performance is
essential to our success and continued growth. Our approach
is based on robust risk management underpinned by sound
science, strong partnerships with local researchers and
transparency of our environmental knowledge
Energy efficiency improvement
We intensified efforts to improve our energy efficiency in
2018, achieving a 3.4% improvement in operated asset energy
efficiency against baseline.2
Three years into our five-year efficiency improvement plan,
we are on track to meet our target of 5% energy efficiency
improvement against baseline by 2020.
Our improved performance in 2018 was achieved through
delivery of targeted improvement projects at KGP and Pluto
LNG, combined with high reliability and reduced flaring across
our operated assets.
Scientific partnerships
In 2018, we recognised our 25-year partnership with the
Australian Institute of Marine Science (AIMS) and 20-year
partnership with the Western Australian Museum.
These partnerships have significantly contributed to
understanding Western Australia’s rich marine biodiversity
and iconic ecosystems.
Climate change
In multiple scenarios, the demand for natural gas is expected to
increase as a vital component of a clean energy future due to
its benefits over other energy sources:
+ Gas is the cleanest burning hydrocarbon.
+ Switching from coal to gas-fired power can significantly
reduce greenhouse gas emissions.
+ Gas improves air quality, by displacing higher emissions
energy sources.1
+ Gas is easy to transport.
+ Gas is an ideal, reliable partner for renewable energies.
We have a goal to improve our energy efficiency and we are
also developing new opportunities for LNG to displace higher-
emission fuels, including in trucks, trains and ships.
In 2018, we released our Carbon Disclosure Project (CDP)
submission.
Woodside is resilient as a business in a lower carbon future.
This is supported through three themes:
+ Create value: We create value through prudent application
of our investment framework, innovating to develop new
opportunities and building new markets.
+ Protect value: We protect our existing investments by
focusing on a competitive cost of supply, designing and
reviewing our assets to withstand extreme environmental
conditions and testing the resilience of our portfolio
against a range of scenarios, including ‘2 degrees Celsius’
climate-related scenarios.
+ Our contribution: We are improving our energy efficiency,
supplying affordable and clean energy, and supporting
policies that deliver carbon abatement at lowest cost and
enhanced competitiveness.
For more information refer to the sustainability section of
Woodside’s website.
1. http://www.ipcc.ch/report/ar5/syr/
2. Baseline performance is measured relative to product energy efficiency prior to 2016.
56 Woodside Petroleum Ltd | Annual Report 2018
OUR FUTURE
Technology, combined with our pioneering, innovative spirit, is a key supporter of our corporate strategy.
We invest in technology to reduce costs for our existing
operations, to enable future developments, and to extend
sources of revenue. The application of technology in our
business also enables our people to work more efficiently and
assists in reducing their exposure to health and safety hazards.
In 2018, we refreshed our technology strategy to increase
the priority of carbon management and the development
of new energy markets and sources. We continue to focus
on conventional oil and gas technologies and data-driven
breakthroughs. Our strategy ensures we apply innovation and
technology to support growth.
We don’t do this alone. We utilise external expertise by
growing our FutureLab network, combining innovative ideas
from our own people with fresh perspectives from outside our
industry. In November 2018, we launched the Centre for Long
Subsea Tiebacks in partnership with the University of Western
Australia, driving research into new subsea engineering
technologies for offshore oil and gas production.
Conventional oil and gas technology
Woodside has long been a leader in oil and gas technologies.
Supported by our capabilities in data science, analytics and
machine learning, we continue to search for breakthroughs that
will deliver value.
In the second half of 2018, we completed a pilot initiative to
optimise the composition of mixed refrigerants across KGP
LNG trains 1 and 2. By making small changes in response to
ambient temperature, we delivered a 1.5% improvement in
energy efficiency. We plan to extend the initiative to other LNG
trains in 2019, reducing costs and carbon dioxide equivalent
(CO2-e) emissions.
Intelligent assets
We are installing a data-driven digital nerve system at our
existing facilities that will provide real-time insights, enabling
better decision making, cost reductions and higher reliability.
To achieve this we are employing technologies such as smart
sensors and robots.
The Woodside robotics team continued proof of concept trials
at Pluto LNG and KGP throughout 2018, proving navigation
capabilities via local teleoperation and autonomous control.
We performed an Australian-first trial on an offshore
platform at the North Rankin Complex (NRC) in October
2018. We successfully teleoperated our ‘Aggie’ surveillance
robot on NRC from Perth. This is an early step towards
proving our extended capabilities in remote operations.
Carbon management
We aim to reduce our carbon emissions from existing and
future operations.
We worked with ABB Australia Pty Ltd to install a 1 MWh
PowerStore battery on the Goodwyn A platform, with
commissioning due to start in 2019. This world-first application
of microgrid technology on an offshore platform is expected
to improve energy efficiency by approximately 5%, reducing
fuel gas consumption by more than 2,000 tonnes per year and
CO2-e emissions by 10,000 tonnes per year.
In late 2018, we established a team to build a portfolio of CO2
abatement mechanisms considering reduction, sequestration
and other uses of carbon. We also progressed plans to integrate
industrial-scale solar power generation with gas-fired generation
and battery storage for our future Burrup Hub LNG operations.
Reducing fuel gas consumption on the Burrup Peninsula will
increase the amount of gas available for LNG production,
yielding both environmental and commercial benefits.
New energy
We are supporting the transition to low carbon energy in a
way that adds value for our shareholders across our growth
horizons. We are developing and promoting new markets for
LNG fuels. In the longer term, we are exploring opportunities
to produce and export hydrogen on a commercial scale.
Woodside Petroleum Ltd | Sustainability 57
RISK
Woodside maintains a robust and disciplined
focus on operational excellence and effective
risk management. We do this so that we better
understand uncertainty and manage risks, to help
achieve our objectives.
Our risk management process is designed to recognise and
manage risks that have the potential to materially impact on
Woodside’s short- and long-term business objectives. This
process is aligned to the international standard 1SO31000 for
risk management and assesses potential risks in areas such
as health and safety, environment, finance and economic,
reputation and brand, legal and compliance and social and
cultural consequences.
Refer to the Sustainable Development Report 2018 for
more information on sustainability issues of importance
to our stakeholders and our business.
Refer to Woodside’s Corporate Governance Statement
for more information (www.woodside.com.au/
Working-Sustainably/governance-and-compliance).
Material risks overview
CONTEXT
RISK
MITIGATION
Our future growth
depends on our ability to
identify, acquire, explore
and develop reserves.
Unsuccessful exploration and renewal of
upstream resources may impede delivery of
our strategy.
Exposure to reserve depletion is addressed
by our exploration strategy together
with our capability in geosciences and
deep-water exploration. Our disciplined
management of opportunities and
acquisitions, together with the application
of new technologies and recovery
processes, further addresses this risk.
Commercial transactions undertaken with the
objective of growing or divesting Woodside’s
portfolio incur many risks that may impact
the ability to deliver anticipated value. These
include sub-optimal commercial outcomes; the
imposition of unfavorable (or change in) fiscal
conditions, obligations or liabilities; and operational
performance of assets not meeting 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.
Efficient and
cost-competitive
commercialisation
of hydrocarbons is a
contributor to our success.
Failure to prioritise, invest in, and successfully
commercialise our hydrocarbon opportunities to
meet our corporate strategy may reduce the value
we can secure from future developments and
negatively impact our financial performance.
Failure to deliver on major capital project FID
commitments through poor project execution
performance may negatively impact our
financial performance.
Failure to negotiate, opitimise and finalise
commercial agreements with key stakeholders
may impact Woodside’s current and future
opportunity portfolio.
Central to the management of this risk is
our focus on creating effective commercial
arrangements with a range of participants,
stakeholders and contractors.
In addition, we continue to invest in robust
and high-quality opportunity development
and project management systems.
We undertake resource planning and
management to support the demands
of a growing, fast-paced and diverse
development portfolio, with ongoing
review of the mix of capability for each
opportunity phase and capacity to deploy.
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.
60 Woodside Petroleum Ltd | Annual Report 2018
CONTEXT
RISK
MITIGATION
Safe and optimised
production and delivery
of hydrocarbon
products to plan may
influence our licence to
operate and our ability
to achieve superior
shareholder returns.
Sustained, unplanned interruption to production
may impact our licence to operate and financial
performance. Our facilities are subject to operating
hazards associated with major accident events,
cyber-attack, inclement weather and disruption
to supply chain, which can result in a loss of
hydrocarbon containment, diminished production,
additional costs, environmental damage or harm
to our people, reputation or brand.
Woodside’s financial
strength and
performance may be
impacted by key factors
such as:
+ disruption in market
dynamics;
+ ability to maintain
competitive
advantage;
+ access to capital;
+ capital allocation; and
+ management of
financial risks.
The integrity, availability and reliability of data
within Woodside’s information technology systems
may be subject to intentional or unintentional
disruption (e.g. cyber security attack).
Commodity prices are variable and are
impacted by global economic factors beyond
Woodside’s control.
Demand for and pricing of our products remain
sensitive to external economic and political
factors, weather, natural disasters, introduction
of new and competing supply, and change within
buyer preferences for differing products and
price regimes.
We are exposed to treasury and financial risks,
including liquidity, changes in interest rates,
fluctuation in foreign exchange and credit risk.
Insufficient liquidity to meet financial
commitments and fund growth opportunities
could have a material adverse effect on our
operations and financial performance.
Our financing costs could be affected by interest
rate fluctuations or deterioration in our long-term
investment grade credit rating.
We are exposed to credit risk; our counterparties
could fail or could be unable to meet their
payment and/or performance obligations under
contractual arrangements.
Our world-class operational performance
is based on an extensive framework of
controls which enable the management
of these risks. This includes production
processes, drilling and completions and
well integrity management processes,
inspection and maintenance procedures and
performance standards. This framework is
supported by the ongoing engagement we
have with regulators.
Our exposure to cyber security risk is managed
by a control framework and the continuing
focus on system control improvements,
supported by an established and embedded
security strategy across the organisation.
Woodside mitigates the uncertainty
associated with product demand by
selling LNG in a portfolio manner and under
long-term ‘take or pay’ sale agreements,
in addition to the spot market. Our low cost
of production and approach to balance
sheet risk management further mitigate
this exposure.
Woodside maintains a flexible approach
to capital management. The overall level
of investment in the different areas of
our business and the investment mix
are adjusted to reflect the external
environment. Our capital management
strategy focuses on capital allocation,
capital discipline and capital efficiency.
Woodside maintains insurance in line
with industry practice and sufficient to
cover normal operational risks. However,
Woodside is not insured against all potential
risks because not all risks can be insured and
because of constraints on the availability
of commercial insurance in global markets.
Insurance coverage is determined by the
availability of commercial options and
cost/benefit analysis, taking into account
Woodside’s risk management program.
Losses that are not insured could impact
Woodside’s financial performance. For
example, Woodside does not purchase
insurance for the loss of revenue arising
from an operational interruption.
Our extensive framework of financial controls,
including monitoring of counterparties,
enables the management of these risks.
The US dollar reflects the majority of
Woodside’s underlying cash flows and is
used in our financial reporting, reducing
our exposure to currency fluctuations.
Woodside Petroleum Ltd | Corporate 61
CONTEXT
RISK
MITIGATION
Woodside must have
the right capability
and capacity, with
staff performing to the
required level, to deliver
base business and growth.
Failure to establish sufficient capability and
organisational culture to support global
operations may impact achievement of
our objectives.
Woodside’s technology
strategy is focused on
maintaining competitive
advantage through
innovation to generate
value for our business.
Our business activities
are subject to extensive
regulation and
government policy. Our
business performance
is underpinned by our
licence to operate.
Woodside faces climate
change related risks
including changes in
product demand, carbon
pricing, uncertainty
surrounding future
regulatory frameworks
and increased stakeholder
expectations.
Unsuccessful development and delivery of new
technology and new products through innovation
may impact competitive advantage.
In each of the countries where we do business,
Woodside is subject to various national and local
laws, regulations and approvals, and stakeholder
expectations. These relate to the exploration,
development, production, marketing, pricing,
transportation and storage of our products, and
changes or failure to comply with these may
impact our licence to operate.
Bribery and corruption present a significant threat
to commercial organisations and communities
worldwide. Violation of anti-bribery and corruption
laws may expose Woodside to fines, criminal
sanctions and civil suits, and negatively impact
our international reputation.
Demand for oil and gas may subside as lower
carbon substitutes take market share. Global
climate change policy remains uncertain and
has the potential to constrain Woodside’s ability
to create and deliver stakeholder value from the
commercialisation of our hydrocarbons.
As we progress into a major growth phase,
our focus has been on reinforcing our
Compass values, the establishment of the
right talent and capability to support the
fast-paced development portfolio timeline,
and establishment of employer of choice
credentials to attract high talent in the market.
We proactively engage our tier 1 contractors,
strengthening alignment with our Compass
values, and are locking in capability and
price to meet upcoming business demands.
We are reducing unit costs for developments
and deploying technology solutions in new
business opportunities to deliver our strategic
objectives. We aim to respond nimbly to
emerging trends, disruptive innovations and
complementary technologies.
As we increase our global footprint, we
continue to strengthen our regulatory
compliance framework and supporting tools.
We also proactively maintain relationships
with governments, regulators and
stakeholders within countries in which
we operate and those of interest.
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 a high standard.
We are focusing on ensuring our portfolio
is robust in a carbon constrained market,
improving our energy efficiency, and
maintaining engagement with key industry
and government stakeholders. We are
implementing strategies to diversify our
product mix, diversify use of our products,
broaden our customer base and increase
our portfolio resilience.
62 Woodside Petroleum Ltd | Annual Report 2018
Woodside Petroleum Ltd | Corporate 63
RESERVES AND
RESOURCES
The Scarborough acquisition contributed 640 MMboe to Best Estimate Contingent resources (2C)
while start-up of Greater Western Flank Phase 2 contributed 48 MMboe to North West Shelf Proved
plus Probable (2P) Developed reserves.
Woodside’s¹,²,³,⁴ reserves and contingent resources⁵ overview* (Woodside share, as at 31 December 2018)
Proved11 Developed13 and Undeveloped14
Proved Developed
Proved Undeveloped
Proved plus Probable12 Developed
and Undeveloped
Proved plus Probable Developed
Proved plus Probable Undeveloped
Contingent resources
*Small differences are due to rounding.
Key metrics
Dry gas
Bcf
4,494.7
2,333.4
2,161.4
6,052.7
3,260.5
2,792.2
29,124.2
Condensate
MMbbl
Oil
MMbbl
Total
MMboe
80.1
43.3
36.7
108.2
59.8
48.4
214.1
46.4
15.4
31.0
67.7
25.7
42.0
193.6
915.0
468.0
447.0
1,237.8
657.5
580.3
5,517.2
2018 reserves replacement ratio15
Organic 2018 reserves replacement ratio16
Three-year reserves replacement ratio
Organic three-year reserves replacement ratio
Reserves life17
Annual production18
Net acquisitions and divestments
%
%
%
%
Years
MMboe
MMboe
Proved
Proved plus Probable
-3
-3
16
16
10
93.6
0.0
-3
-3
4
4
13
93.6
0.0
1P Reserves
2P Reserves
2C Contingent resources
3
4
1
,
1
e
o
b
M
M
8
4
0
,
1
0
5
1
,
1
0
8
0
,
1
2
1
0
,
1
5
1
9
7
3
4
,
1
9
3
3
,
1
8
0
5
,
1
2
4
4
,
1
4
3
3
,
1
8
3
2
,
1
4
1
0
5
,
8
9
3
4
,
2
9
6
,
1
3
4
7
,
1
7
1
5
2 5
1
0
5
,
,
13
14
15
16
17
18
13
14
15
16
17
18
13
14
15
16
17
18
64 Woodside Petroleum Ltd | Annual Report 2018
Proved (1P) and Proved plus Probable (2P) developed and undeveloped reserves annual reconciliation by product*
(Woodside share, as at 31 December 2018)
Dry gas6
Bcf8
Condensate7
MMbbl9
Oil
MMbbl
)
P
1
(
d
e
v
o
r
P
l
s
u
p
d
e
v
o
r
P
l
e
b
a
b
o
r
P
)
P
2
(
)
P
1
(
d
e
v
o
r
P
l
s
u
p
d
e
v
o
r
P
l
e
b
a
b
o
r
P
)
P
2
(
)
P
1
(
d
e
v
o
r
P
l
s
u
p
d
e
v
o
r
P
l
e
b
a
b
o
r
P
)
P
2
(
Total
MMboe10
)
P
1
(
d
e
v
o
r
P
l
s
u
p
d
e
v
o
r
P
l
e
b
a
b
o
r
P
)
P
2
(
4,983.0
6,538.5
88.8
117.0
48.5
69.9
1,011.5
1,333.9
1.5
-28.0
0.0
0.0
461.7
24.8
-48.9
0.0
0.0
461.7
0.1
0.0
0.0
0.0
8.8
0.1
0.0
0.0
0.0
8.8
1.7
0.0
0.0
0.0
3.8
1.6
0.0
0.0
0.0
3.8
2.0
-4.9
0.0
0.0
93.6
6.1
-8.6
0.0
0.0
93.6
4,494.7
6,052.7
80.1
108.2
46.4
67.7
915.0
1,237.8
Reserves at
31 December 2017
Revision of previous
estimates19
Transfer to/from reserves
Extensions and discoveries20
Acquisitions and
divestments
Annual production
Reserves at
31 December 2018
*Small differences are due to rounding.
Best Estimate Contingent resources (2C) annual reconciliation
by product* (Woodside share, as at 31 December 2018)
Best Estimate Contingent resources (2C) summary by region*
(Woodside share, as at 31 December 2018)
Dry gas
Bcf
Condensate
MMbbl
Oil
MMbbl
Total
MMboe
Project
Dry gas6
Bcf8
Condensate7
MMbbl9
Oil
MMbbl
Total
MMboe10
Contingent
resources at 31
December 2017
Transfer to/from
reserves
Revision of
previous
estimates
Extensions and
discoveries
Acquisitions and
divestments
Contingent
resources at
31 December 2018
26,043.8
236.9
206.0
5,012.0
49.0
0.0
0.0
8.6
-789.5
-22.9
-12.4
-173.8
174.5
3,646.5
0.0
0.0
0.0
30.6
0.0
639.7
Greater Browse26
4,257.8
Greater Sunrise28
1,716.8
Greater Pluto
Greater Exmouth
North West Shelf
Wheatstone
Canada
Senegal30
Greater
Scarborough27
Myanmar29
619.9
307.4
294.7
20.3
15,024.0
88.8
6,411.6
383.0
119.4
75.6
8.2
2.1
8.5
0.3
0.0
0.0
0.0
0.0
0.0
0.0
0.0
32.0
16.8
0.0
0.0
866.4
376.7
117.0
87.9
77.0
3.9
2,635.8
144.9
160.5
0.0
0.0
1,124.8
67.2
29,124.2
214.1
193.6
5,517.2
Total
29,124.2
214.1
193.6
5,517.2
*Small differences are due to rounding.
*Small differences are due to rounding.
1P Reserves by region
(Developed and Undeveloped)
2P Reserves by region
(Developed and Undeveloped)
2C Contingent resource
by region
915
MMboe
1,238
MMboe
5,517
MMboe
lGreater Pluto
lNorth West Shelf
lGreater Exmouth
%
50
26
4
lWheatstone
lCanada
%
20
0
lGreater Pluto
lNorth West Shelf
lGreater Exmouth
%
52
23
4
lWheatstone
lCanada
%
21
0
lGreater Browse
lGreater Sunrise
lGreater Pluto
lGreater Exmouth
lNorth West Shelf
%
%
16 lWheatstone
0
7 lCanada
48
2 lSenegal
3
2 lGreater Scarborough 20
1 lMyanmar
1
Woodside Petroleum Ltd | Corporate 65
Proved (1P) Developed and Undeveloped reserves by region*
Dry gas
Bcf
l
d
e
p
o
e
v
e
d
n
U
d
e
p
o
e
v
e
D
l
l
a
t
o
T
Greater Pluto21, 31
848.4
1,551.7
2,400.1
North West Shelf22, 31
1,050.5
102.6
1,153.1
Greater Exmouth²³
0.0
0.0
0.0
Wheatstone24
434.4
507.2
941.6
Canada25
Reserves
0.0
0.0
0.0
2,333.4
2,161.4 4,494.7
*Small differences are due to rounding.
Condensate
MMbbl
Oil
MMbbl
d
e
p
o
e
v
e
D
l
11.8
21.1
0.0
10.3
0.0
43.3
l
d
e
p
o
e
v
e
d
n
U
25.4
3.0
0.0
8.4
0.0
36.7
d
e
p
o
e
v
e
D
l
0.0
10.2
5.1
0.0
0.0
15.4
l
d
e
p
o
e
v
e
d
n
U
0.0
0.0
31.0
0.0
0.0
31.0
l
a
t
o
T
37.2
24.1
0.0
18.7
0.0
80.1
Total
MMboe
l
d
e
p
o
e
v
e
d
n
U
l
a
t
o
T
297.6
458.3
21.0
31.0
97.4
0.0
236.6
36.2
183.9
0.0
d
e
p
o
e
v
e
D
l
160.7
215.6
5.1
86.6
0.0
l
a
t
o
T
0.0
10.2
36.2
0.0
0.0
46.4
468.0
447.0
915.0
Proved plus Probable (2P) Developed and Undeveloped reserves by region*
Dry gas
Bcf
l
d
e
p
o
e
v
e
d
n
U
d
e
p
o
e
v
e
D
l
l
a
t
o
T
Greater Pluto
1,447.3
1,920.7 3,367.9
North West Shelf
1,231.2
115.7 1,346.9
Greater Exmouth
0.0
0.0
0.0
Wheatstone
582.0
755.9
1,337.8
Canada
Reserves
0.0
0.0
0.0
3,260.5
2,792.2 6,052.7
*Small differences are due to rounding.
Condensate
MMbbl
l
d
e
p
o
e
v
e
d
n
U
32.3
3.5
0.0
12.6
0.0
l
a
t
o
T
51.9
29.9
0.0
26.4
0.0
d
e
p
o
e
v
e
D
l
19.5
26.5
0.0
13.8
0.0
59.8
Oil
MMbbl
l
d
e
p
o
e
v
e
d
n
U
0.0
0.0
42.0
0.0
0.0
d
e
p
o
e
v
e
D
l
0.0
13.3
12.4
0.0
0.0
48.4
108.2
25.7
42.0
Total
MMboe
l
d
e
p
o
e
v
e
d
n
U
369.3
23.8
42.0
145.2
0.0
d
e
p
o
e
v
e
D
l
273.4
255.8
12.4
115.9
0.0
l
a
t
o
T
642.7
279.6
54.4
261.1
0.0
657.5
580.3
1,237.8
l
a
t
o
T
0.0
13.3
54.4
0.0
0.0
67.7
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.
Governance 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 2018
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 Procedure, staff training and minimum
competency levels and external reserves audits. On average,
96% 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).
66 Woodside Petroleum Ltd | Annual Report 2018
Notes to the reserves and resources statement
‘Reserves’ are estimated quantities of petroleum that have been
1.
demonstrated to be producible from known accumulations in which
the company has a material interest from a given date forward, at
commercial rates, under presently anticipated production methods,
operating conditions, prices and costs.
2. Assessment of the economic value of a project, in support of a reserves
booking, 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.
15. 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.
16. 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.
17. The ‘reserves life’ is the reserves (Developed and Undeveloped)
3. Woodside uses both deterministic and probabilistic methods for
divided by production during the year.
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.
18.
4. Woodside reports reserves net of the fuel and flare required for
5.
6.
7.
8.
9.
10.
11.
12.
production, processing and transportation up to a reference point.
For offshore oil projects and floating liquefied natural gas (FLNG)
projects, the reference point is defined as the outlet of the floating
production storage offloading (FPSO) facility or FLNG facility
respectively, while for onshore gas projects the reference point is
defined as the inlet to the downstream (onshore) processing facility.
Downstream fuel and flare represents 10.6% of Woodside’s Proved
(Developed and Undeveloped) reserves, and 10.5% 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 bookings. 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.
‘Probable reserves’ are those reserves which analysis of geological and
engineering data suggests are more likely than not to be recoverable.
Proved plus Probable reserves represent the best estimate of
recoverable quantities. Where probabilistic methods are used, there
is at least a 50% probability that the quantities actually recovered will
exceed the sum of estimated Proved plus Probable reserves.
13.
‘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.
14.
‘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.
‘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
the sales and reserves product definitions, reserves being reported
gross of downstream fuel and flare and the ‘MMboe’ conversion
factors applied. Woodside’s NWS pipeline gas production for the
purpose of dry gas reserves reconciliation is based on the Woodside
equity share. Any imbalance resulting from independently marketed
pipeline gas sales will be reconciled before project abandonment.
19.
‘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 or
reservoir modelling to estimate volumes reasonably expected to be
recovered from wells in the relevant project.
20. ‘Extensions and discoveries’ represent additions to reserves or
contingent resources that result from increased areal extensions
of previously discovered fields, discovery of reserves or contingent
resources in new fields, or new reservoirs in old fields.
21. The ‘Greater Pluto’ region comprises the Pluto-Xena, Larsen, Martell,
Martin, Noblige, Pyxis and Remy fields.
22. 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 20.3% of
NWS Proved (Developed and Undeveloped) dry gas reserves, 27.4%
of NWS Proved (Developed and Undeveloped) condensate reserves.
23. The ‘Greater Exmouth’ region comprises the Vincent, Enfield, Greater
Enfield, Greater Laverda, Ragnar and Toro fields.
25. The ‘Canada’ region comprises unconventional resources in the
Liard and Horn River Basins. Previously reported Canada reserves,
all associated with pipeline gas, have been reclassified to Contingent
Resources using definitions and guidelines consistent with the 2018
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).
26. The ‘Greater Browse’ region comprises the Brecknock, Calliance and
Torosa fields.
27. The ‘Greater Scarborough’ region comprises the Jupiter, Scarborough
and Thebe fields.
28. The ‘Greater Sunrise’ region comprises the Sunrise and Troubadour fields.
29. The ‘Myanmar’ region comprises the Pyi Thit and Shwe Yee Htun
fields with well results and discovered volumes within Block A-6
supporting consideration of concept selection in the near term.
30. The ‘Senegal’ region comprises the SNE field and includes oil and gas
estimates for the SNE development phases including the opportunity
to export pipeline gas to shore.
31. Material concentrations of undeveloped reserves in Greater Pluto and
North West Shelf have remained undeveloped for longer than five
years from the dates 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.
Woodside Petroleum Ltd | Corporate 67
‘Condensate’ is defined as ‘C5 plus’ petroleum components.
24. The ‘Wheatstone’ region comprises the Julimar and Brunello fields.
WOODSIDE
BOARD OF
DIRECTORS
RICHARD GOYDER, AO
PETER COLEMAN
Richard Goyder, AO
BCom, FAICD
Chairman: Appointed April 2018
Term of office: Director since August 2017
Independent: Yes
Experience: 24 years with Wesfarmers Limited, including
Managing Director and CEO from 2005 to late 2017. Chairman
of the Australian B20 (the key business advisory body to the
international economic forum which includes business leaders
from all G20 economies) from February 2013 to December 2014.
Committee membership: Chair of the Nominations Committee.
Attends other Board committee meetings.
Current directorships/other interests:
Chairman: Qantas Airways Limited, Australian Football League
Commission, Channel 7 Telethon Trust, JDRF Australia and
WA Symphony Orchestra.
LARRY ARCHIBALD
MELINDA CILENTO
Member: Evans and Partners Investment Committee.
Directorships of other listed entities within the past three
years: Wesfarmers Limited (2002 to 2017).
FRANK COOPER, AO
CHRISTOPHER HAYNES, OBE
Independent: No
Peter Coleman
BEng, MBA, FTSE
CEO and Managing Director
Term of office: Director since 2011
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 the development and project work in the
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 2014).
Director: Business Council of Australia (since 2017).
Member: Executive Committee of the Australia Japan Business
Co-operation Council (since 2011) and Australian Institute of
Company Directors (since 2011).
Adviser: Monash Industry Council.
Directorships of other listed entities within the past three
years: Nil
IAN MACFARLANE
ANN PICKARD
SARAH RYAN
GENE TILBROOK
70 Woodside Petroleum Ltd | Annual Report 2018
Larry Archibald
BSc (Geosciences), BA (Geology), MBA
Frank Cooper, AO
BCom, FCA, FAICD
Term of office: Director since February 2017
Term of office: Director since February 2013
Independent: Yes
Independent: Yes
Experience: Former ConocoPhillips company executive (2008
to 2015), spending eight years in senior positions including
Senior Vice President, Business Development and Exploration,
and Senior Vice President, Exploration. Prior to this, spent
29 years at Amoco (1980 to 1998) and BP (1998 to 2008) in
various positions including leadership of exploration programs
covering many world regions.
Committee membership: Audit & Risk, Sustainability and
Nominations Committees.
Current directorships/other interests:
Adviser: Warburg Pincus (since 2016).
Member: Geosciences Advisory Board of the University
of Arizona.
Directorships of other listed entities within the past three
years: Nil
Melinda Cilento
BA, BEc (Hons), MEc
Term of office: Director since December 2008
Independent: Yes
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: Chair of the Human Resources &
Compensation Committee. Member of the Sustainability and
Nominations Committees.
Current directorships/other interests:
Chief Executive Officer: Committee for Economic Development
of Australia (since 2017).
Director: Australian Unity Limited (since 2014).
Co-Chair: Reconciliation Australia (director since 2010).
Member: Chief Executive Women.
Directorships of other listed entities within the past three
years: Nil
Experience: More than 35 years’ experience in corporate tax,
specialising in the mining, energy and utilities sector, including
senior leadership roles at three of the largest accounting firms
and director of a leading Australian utility company.
Committee membership: Chair of the Audit & Risk Committee.
Member of the Human Resources & Compensation and
Nominations Committees.
Current directorships/other interests:
Chair: Insurance Commission of Western Australia and the
University of Western Australia Strategic Resources Committee.
Director: St John of God Australia Limited (since 2015) and
South32 Limited (since 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 2015).
Directorships of other listed entities within the past three
years: Nil
Christopher Haynes, OBE
BSc, DPhil, CEng, FIMechE, FIEAust
Term of office: Director since June 2011
Independent: Yes
Experience: A 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, seconded
to Woodside as General Manager of the North West Shelf
Venture. Retired from Shell in 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 2015).
Directorships of other listed entities within the past three
years: Nil
Woodside Petroleum Ltd | Governance 71
Ian Macfarlane
Former Australian Federal Minister (Resources; Energy; Industry
and Innovation), FAICD
Sarah Ryan
BSc (Geology), BSc (Geophysics) (Hons 1), PhD (Petroleum and
Geophysics), FTSE
Term of office: Director since 2016
Term of office: Director since 2012
Independent: Yes
Independent: Yes
Experience: Australia’s longest-serving Federal Resources
and Energy Minister and the Coalition’s longest-serving
Federal Industry and Innovation Minister with over 14 years
of experience in both Cabinet and shadow ministerial
positions. Before entering politics, Mr Macfarlane’s experience
included agriculture, and being President of the Queensland
Graingrowers Association (1991 to 1998) and the Grains Council
of Australia (1994 to 1996).
Committee membership: Member of the Human Resources &
Compensation, Sustainability and Nominations Committees.
Current directorships/other interests:
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. From 2007 to 2017 was an equity analyst, portfolio
manager and then energy adviser for Earnst Partners.
Committee membership: Member of the Audit & Risk,
Sustainability and Nominations Committees.
Current directorships/other interests:
Director: Akastor ASA (since 2014), MPC Kinetic Pty Ltd
(previously Kinetic Consolidated Pty Ltd) (since 2016) and Viva
Energy Group Ltd (since 2018).
Chief Executive: Queensland Resources Council (since 2016).
Chair: Innovative Manufacturing Co-operative Research Centre.
Member: Advisory Board of Unearthed Solutions (since 2017)
and Chief Executive Women (since 2016).
Member: Toowoomba Community Advisory Committee of the
University of Queensland Rural Clinical School.
Directorships of other listed entities within the past three
years: Central Petroleum Limited (2017 to 2018).
Directorships of other listed entities within the past three
years: Nil
Ann Pickard
BA, MA
Term of office: Director since February 2016
Independent: Yes
Experience: Retired from Shell in 2016 after a 15-year tenure
holding numerous positions, including Executive Vice President
Arctic, Executive Vice President Exploration and Production,
Country Chair of Shell in Australia, and Executive Vice President
Africa. Previously had an 11-year tenure with Mobil prior to its
merger with Exxon.
Committee membership: Chair of the Sustainability
Committee. Member of the Human Resources & Compensation
and Nominations Committees.
Current directorships/other interests:
Director: KBR Inc. (since 2015).
Member: Chief Executive Women and University of Wyoming
Foundation Board.
Directorships of other listed entities within the past three
years: Nil
Gene Tilbrook
BSc, MBA, FAICD
Term of office: Director since 2014
Independent: Yes
Experience: Broad experience in corporate strategy,
investment and finance. Senior executive of Wesfarmers
Limited between 1985 and 2009, including 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:
Deputy Chair: National Board of the Australian Institute of
Company Directors (since 2016).
Director: Orica Limited (since 2013), GPT Group Limited (since
2010) and the Bell Shakespeare Company.
Member: Western Australia division of the Australian Institute
of Company Directors (since 2013).
Directorships of other listed entities within the past three
years: Aurizon Holdings Limited (2010 to 2016).
Michael Chaney
BSc, MBA, Hon LLD (UWA), FAICD
Mr Michael Chaney retired effective on 19 April 2018 after
13 years of service on Woodside’s Board of Directors.
Mr Chaney served as Chairman from 2007 and was also
Chair of the Nominations Committee.
72 Woodside Petroleum Ltd | Annual Report 2018
CORPORATE
GOVERNANCE
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. The Compass is the
overarching guide for everyone who works for Woodside.
Our values define what is important to us in the way we work.
Refer to Woodside’s website for more information.
Our corporate governance model is illustrated below.
The Woodside Management System (WMS) describes the
Woodside way of working, enabling Woodside to understand
and manage its business to achieve its objectives. It defines the
boundaries within which our employees and contractors are
expected to work. The WMS establishes a common approach
to how we operate, wherever the location.
Throughout 2018, our governance arrangements complied
with the ASX Corporate Governance Council’s Corporate
Governance Principles and Recommendations (third edition)
(ASXCG Recommendations).
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.
The Corporate Governance Statement discusses arrangements
in relation to our Board of Directors, committees of the Board,
shareholders, risk management and internal control, the
external auditor relationship, and inclusion and diversity.
Our website 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 that it reflects Woodside’s most
current corporate governance information.
Refer to Woodside’s Corporate Governance Statement for
more information (www.woodside.com.au).
STAKEHOLDERS
BOARD
DELEGATION
ACCOUNTABILITY
AUDIT & RISK
COMMITTEE
HUMAN RESOURCES
& COMPENSATION
COMMITTEE
CHIEF EXECUTIVE OFFICER
NOMINATIONS
COMMITTEE
SUSTAINABILITY
COMMITTEE
INDEPENDENT ASSURANCE
MANAGEMENT GOVERNANCE AND ASSURANCE
EXTERNAL AUDIT
STRATEGY
INTERNAL AUDIT
RISK MANAGEMENT
AUTHORITIES
FRAMEWORK
OPERATING
STRUCTURE
Woodside Petroleum Ltd | Governance 73
DIRECTORS’
REPORT
Directors
The directors of Woodside Petroleum
Ltd in office at any time during or since
the end of the 2018 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) are set out on pages 70–72.
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 14 of the Corporate Governance
Statement. For all Board meetings held in
person in 2018, all directors were present.
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 75.
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
$1,364 million ($1,069 million in 2017).
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 1–67.
74 Woodside Petroleum Ltd | Annual Report 2018
The directors of Woodside Petroleum Ltd present their report
(including the Remuneration Report) together with the Financial
Statements of the consolidated entity, being Woodside Petroleum
Ltd and its controlled entities, for the year ended 31 December 2018.
Significant changes in the
state of affairs
The review of operations (pages
1–67) sets out a number of matters
that 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.
Dividend
The directors have declared a final
dividend out of profits of the company in
respect of the year ended 31 December
2018 of 91 cents per ordinary share (fully
franked) payable on 20 March 2019.
Type
2018
final
2018
interim
2017
final
Payment
date
20 March
2019
20
September
2018
22 March
2018
Period
ended
31
December
2018
30 June
2018
31
December
2017
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.
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 56.
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 2018:
Andrew Cox
BA (Hons), LLB, MA
Vice President Legal and General
Counsel, and Joint Company Secretary
Mr Cox joined Woodside in 2004 and
was appointed to the role of Vice
President Legal in January 2015. He was
appointed Vice President Legal and
General Counsel and Joint Company
Secretary on 1 June 2017.
91
53
49
852
496
413
Warren Baillie
LLB, BCom, Grad. Dip. CSP
Company Secretary
Cents per
share
Value $
million
Fully
franked
The full-year 2018 dividend was 144 cents per share.
Mr Baillie joined Woodside in 2005 and
was appointed Company Secretary
effective 1 February 2012. Mr Baillie
is a solicitor and chartered secretary.
He is a member of the National Board
and Immediate Past President of the
Governance Institute of Australia.
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 Guidance
Policy. 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 Statements.
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 2001 for
the following reasons:
+ all non-audit services were provided in
accordance with Woodside’s External
Auditor Policy and External Auditor
Guidance Policy; 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.
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.
The auditor’s independence declaration,
as required under section 307C of the
Corporations Act 2001, 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 2001.
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 Corporations
(Rounding in Financial/Directors’ Reports)
Instrument 2016/191 dated 24 March 2016.
Directors’ relevant interests
in Woodside shares as at the
date of this report
Director
L Archibald
M Cilento
P Coleman
F Cooper
R Goyder
C Haynes
I Macfarlane
A Pickard
S Ryan
G Tilbrook
Relevant interest in
shares
2,314
4,899
284,1701
8,240
15,634
9,512
1,956
3,818
7,373
7,949
1. Mr Coleman also has a relevant interest in
182,177 unvested Restricted Shares and holds
Variable Pay Rights under his CEO incentive
arrangements, details of which are set out in
the Remuneration Report in Table 13 on page
92 and Table 15 on page 96.
Signed in accordance with a resolution of
the directors.
R J Goyder, AO
Chairman
Perth, Western Australia
14 February 2019
P J Coleman
Chief Executive Officer and
Managing Director
Perth, Western Australia
14 February 2019
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 2018, 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
T S Hammond
Partner
Perth, Western Australia
14 February 2019
Liability limited by a scheme approved under
Professional Standards Legislation
Woodside Petroleum Ltd | Governance 75
REMUNERATION
REPORT
Chairman's letter
KMP and summary of Woodside's five-year performance
Scorecard measures and outcomes
New Executive Incentive Scheme introduced in 2018
CEO and executive KMP remuneration structure
CEO and executive KMP KPIs and outcomes for 2018
Other equity plans
Contracts for executive KMP
Non-executive directors (NEDs)
Human Resources & Compensation Committee
Use of remuneration consultants
Reporting notes
Statutory tables
Glossary
77
78
79
80
82
83
87
88
89
90
90
90
91
97
76 Woodside Petroleum Ltd | Annual Report 2018
14 February 2019
Dear Shareholder
It is my pleasure, on behalf of the Board, to present Woodside’s Remuneration Report for the year ended
31 December 2018.
In March 2018, the Board outlined the new Executive Incentive Scheme (EIS), after completing a comprehensive
review of our executive remuneration arrangements. This report details Woodside’s first application of this new
remuneration structure.
I have appreciated the opportunity to engage with our investors in 2018 on remuneration and the new EIS. The Board
is confident that the scheme is tailored to Woodside’s corporate strategy, aligns with shareholder interests and allows
Woodside to attract and retain the executive talent required to deliver on Woodside’s growth aspirations.
It is structured to have a significantly greater reliance on equity to reward executives and for the first time, we have
introduced minimum shareholding requirements for executive key management personnel. The Board has also decided
to increase the minimum shareholding requirements for non-executive directors. These changes reflect the long-term
focus of our executives and further promote alignment with shareholders.
Executive awards under the scheme will be based upon two equally weighted components – individual and corporate
performance. In 2018, Woodside delivered positive performance across all operational assets and progressed a
number of projects and growth opportunities. The majority of the business plan priorities were met and Woodside is
well positioned to deliver our strategy across all three growth horizons. Individual executive performance was a critical
contributor to this positive corporate performance.
The Board understands and welcomes our shareholders’ expectation that the Board robustly and independently
assesses executive and corporate performance in determining awards. An important component of this assessment is
reconciling fairly shareholder experience with the award outcome.
We have sought to continue to provide greater detail around the factors and metrics that the Board has considered
in determining remuneration outcomes for 2018. The challenge is to do so in a way that provides clarity without
compromising commercially sensitive information. We trust shareholders share our view that we are striking a good
balance in our efforts to improve transparency.
Notwithstanding strong overall performance, the Board chose to exercise discretion in adjusting the recommended
scorecard outcome from 8.25 to 7.75 (out of 10) to reflect the decline in safety performance over the first half of the
year and a number of business plan priorities that were not achieved.
Yours sincerely
Richard Goyder AO
Chairman
Woodside Petroleum Ltd | Remuneration Report 77
Remuneration Report (audited)
KMP and summary of Woodside's five-year performance
Woodside’s executive key management personnel (KMP)
This report outlines the remuneration arrangements in place and outcomes achieved for Woodside’s executive KMP during 2018.
Woodside’s executive KMP are those people who have the authority 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 senior executives).
The names and positions of the individuals who were executive KMP during 2018 are set out in Table 1.
Table 1 – Executive KMP
Executive
Executive Director
Peter Coleman (Managing Director and Chief Executive Officer) (CEO)
Senior Executives
Michael Abbott (Senior Vice President Corporate and Legal)
Sherry Duhe (Executive Vice President and Chief Financial Officer)
Robert Edwardes (Executive Vice President Development)
Shaun Gregory (Executive Vice President Exploration and Chief Technology Officer)
Phil Loader (Executive Vice President Global Exploration)1
Reinhardt Matisons (Executive Vice President Marketing, Trading and Shipping)
Meg O’Neill (Executive Vice President and Chief Operations Officer)2
Michael Utsler (Executive Vice President and Chief Operations Officer)3
1. Mr Phil Loader ceased being executive KMP on 28 February 2018 and ceased employment on 30 June 2018.
2. Ms Meg O’Neill commenced as KMP on 1 May 2018.
3. Mr Mike Utsler ceased being executive KMP on 27 April 2018 and ceased employment on 1 November 2018.
4. Mr Richard Goyder was appointed Chairman of the Woodside Board on 20 April 2018.
5. Mr Michael Chaney ceased being Chairman of the Woodside Board on 19 April 2018.
Non-executive directors
Richard Goyder (Chairman)4
Michael Chaney (Chairman)5
Larry Archibald
Melinda Cilento
Frank Cooper
Christopher Haynes
Ian Macfarlane
Ann Pickard
Sarah Ryan
Gene Tilbrook
Table 2 – Five-year performance
The table below outlines Woodside's performance over the last five years against key metrics.
Net profit after tax (NPAT)2
Earnings per share3
Dividends per share
Share closing price (last trading day of the year)
Production
(US$ million)
(US cents)
(US cents)
(A$)
(MMboe)
2018
1,364
148
144
31.32
91.4
20171
1,069
123
98
33.08
84.4
2016
2015
868
104
83
31.16
94.9
26
3
109
28.72
92.2
2014
2,414
293
255
38.01
95.1
1. 2017 NPAT has been restated for the retrospective application of AASB 15, and earnings per share has been restated for the retrospective application of AASB 15 and the Retail Entitlement Offer.
For more information refer to the Financial Statements on pages 99-139.
2. NPAT figure is NPAT attributable to equity holders of the parent. NPAT detail is contained in the Financial Statements on pages 99-139.
3. Basic and diluted earnings per share from total operations.
Remuneration Policy
Woodside aims to be a leading global performer in upstream oil and gas. To do so the company must be able to attract and retain
executive capability in a globally competitive market. The Board structures remuneration so that it rewards those who perform, is valued
by executives, and is strongly aligned with the company’s Compass, strategic direction and the creation of value for all stakeholders.
Fixed Annual Reward (FAR) is determined by the scope of the executive’s role and their level of knowledge, skills and experience.
Variable Annual Reward (VAR) at target is structured to reward the CEO and executive KMP for achieving challenging yet realistic
targets set by the Board which deliver long-term growth for the company. VAR aligns shareholder and executive remuneration
outcomes by ensuring a significant portion of executive remuneration is at risk, while rewarding performance.
Executive remuneration is reviewed annually having regard to the accountabilities, experience and performance of the individual.
FAR and VAR are compared against domestic and international competitors at target, to maintain Woodside’s competitive
advantage in attracting and retaining talent and ensure appropriate motivation is provided to executives to deliver on the strategic
objectives of the company.
78 Woodside Petroleum Ltd | Annual Report 2018
Scorecard measures and outcomes
The Board assesses executive management performance on an annual basis against a balanced scorecard of measures in conjunction with
individual key performance indicators (KPIs) that aim to drive business performance and the creation of shareholder value.
The 2018 scorecard for executive KMP is based on four equally weighted measures that have been chosen because they impact
short- and long-term shareholder value, with a score of 5 for an outcome at target and a maximum score of 10 on each measure.
The Board sets challenging targets for each measure with significant stretch to achieve maximum performance and robustly
assesses performance against expectation.
In 2018, Woodside delivered positive performance across all operational assets, with total 2018 production at the high end of market
guidance and strong safety performance particularly in the second half of the year. Combined with the higher realised price outcome,
this enabled Woodside to deliver a NPAT outcome at the upper end of our target range. Woodside re-positioned its portfolio with
the acquisition of an additional 50% equity in the Scarborough gas field and further progressed a number of projects and growth
opportunities. The majority of business plan priorities were met and we are well positioned to deliver across all three growth horizons.
In considering overall corporate performance, the Board chose to exercise its discretion to reflect appropriately first half safety performance
and business priorities that were not achieved. The Board elected to adjust the initially recommended scorecard outcome from 8.25 to 7.75
(out of a maximum of ten) for the 2018 performance year.
NPAT
Profit after tax performance is closely aligned with short-term
shareholder value creation. NPAT is underpinned by operational
performance, oil price and foreign exchange rates. This measure
focuses management on driving exceptional operational performance,
with the Board ensuring that short-term results are not achieved at the
expense of longer term performance. NPAT outcomes are exposed to
the upside and downside of oil price and foreign exchange fluctuations,
as are returns to shareholders.
Scorecard outcome: 10
+ Strong operational performance due to high reliability and low cost
assets underpinned a NPAT result of $1,364 million, a 28% increase on
2017. This was supported by higher realised prices and lower exploration
operational expense, partially offset by lower petroleum resource rent
tax benefit, higher income tax expense and higher depreciation.
PRODUCTION
Woodside maximises revenue and generates value from its assets when
they are fully utilised in production. Production is carefully managed
throughout the year to optimise the production value from the reservoir.
The production target is set relative to the company’s annual budget
and is not revised through the year.
Scorecard outcome: 7
+ Full year production was 91.4 MMboe and was at the high end
of market guidance. This result was underpinned by our strong
operational and project delivery performance including successful
optimisation of the North West Shelf turnaround, strong Pluto
reliability, early delivery of Greater Western Flank 2 start-up and
better than expected production performance
from Wheatstone.
DELIVERY AGAINST BUSINESS PLAN
Woodside’s annual business plan commitments aim
to deliver long-term shareholder value. In 2018, we
focused on five key business priorities - base business
excellence, Wheatstone delivery and optimisation,
unlocking the Burrup Hub, SNE FEED entry and
progressing our opportunities in Myanmar.
Scorecard outcome: 8
+ Continued to deliver high reliability and strong unit production
performance from our operating assets; commenced production
from Greater Western Flank Phase 2, six months ahead of schedule
and $630 million under budget (100% project); Wheatstone
commenced LNG production from Train 2; successful A$2.5
billion equity raising underpinned funding for the acquisition of an
additional 50% interest in Scarborough gas field, and will support
the progression of Scarborough and the SNE Phase 1 developments
and the development of Browse to FID; Woodside entered FEED
for Pluto Train 2 underpinning Woodside’s preferred concept for
the development of the Scarborough gas resource; NWS Project
signed non-binding preliminary agreements with the Browse Joint
Venture (BJV) and Chevron for the processing of their respective
offshore gas resources through NWS Project facilities; Browse
commenced concept definition with unanimous approval by the
BJV participants; Woodside assumed operatorship for the proposed
SNE Field Development Phase 1, and FEED activities commenced;
successful appraisal of the 2016 Shwe Yee Htun-1 discovery in
Block A-6, located in offshore Myanmar; start-up of both the
Wheatstone Domestic Gas and Pluto Truck Loading facilities was
not achieved as planned in 2018 with delivery now expected in early
2019; disappointing exploration outcomes resulting in higher than
expected non-commercial discoveries.
Total
scorecard
7.75
outcome
SAFETY AND ENVIRONMENT
The Board considers company performance across
a range of elements including personal and process
safety, environment (including emissions reductions),
sustainability and our social licence to operate. Strong
performance in this area creates and protects value four
ways; it reduces the likelihood of major accident events and
catastrophic losses; it maintains Woodside’s licence to operate
which enables the development and sanction of its growth portfolio;
it reflects efficient, optimised and controlled business processes that
generate value; and it supports the company’s position as a partner of
choice providing us access to the best capabilities and talent.
Scorecard outcome: 6
+ During the first half of 2018, Woodside’s safety performance declined
compared to 2017. However, in response to a concerted campaign
of engagement with staff and contractors, performance improved to
deliver a total recordable injury rate of 1.32 per million hours worked.
Woodside had one Tier 1 and one Tier 2 loss of primary containment
process safety event in 2018. Woodside delivered a total of 138kt CO2-e
in emissions reductions against baseline. This exceeded our annual
target of 115 kt CO2-e. We remain on track to deliver our target of a
5% reduction against baseline by 2020. The Dow Jones Sustainability
Index included Woodside in the World, Asia-Pacific and Australian lead
groups and ranked Woodside fifth within our industry.
Woodside Petroleum Ltd | Remuneration Report 79
New Executive Incentive Scheme introduced in 2018
Following a comprehensive review of Woodside’s incentive structure, the Executive Incentive Scheme (EIS) was introduced for the
2018 performance year. All executives have transitioned into the scheme and the terms of the CEO's contract have been updated
to facilitate the new structure. The new scheme remunerates our executives for delivering outstanding results, whilst avoiding
inappropriate remuneration outcomes for under-performance. The EIS has been designed to deliver three key objectives:
EXECUTIVE ENGAGEMENT
+ Enable Woodside to attract and
retain executive capability in a
globally competitive environment
by providing executives with a
simple remuneration structure
and clear line of sight to how
performance is reflected in
remuneration outcomes.
ALIGNMENT WITH THE
SHAREHOLDER EXPERIENCE
+ 87.5% of the award will be
delivered as equity in the form
of Restricted Shares or
Performance Rights. The
Performance Rights are RTSR-
tested after five years against
comparator groups.
STRATEGIC FIT
+ 60% of the award will have a
five-year vesting period, which
reflects Woodside’s strategic
time horizons to drive executives
to deliver our strategic objectives
with discipline and collaboration
and in turn create shareholder
value.
The scheme delivers a single combined award to executives which is linked to annual individual and corporate performance,
designed to be simple and transparent. We have considerably reduced the variable cash opportunity for executives with a significant
proportion of the award allocated in equity whilst introducing extended deferral periods which align to our strategic horizons of
delivery. Awards under the EIS will be granted for the first time in 2019 based on performance against the corporate scorecard and
individual KPIs set for the 2018 performance year.
The Board has strong oversight and governance to ensure that appropriate, challenging and stretch targets are set to ensure
the clear link between performance and reward. The Board has overriding discretion to adjust outcomes in line with shareholder
experience and company or management performance.
VARIABLE ANNUAL REWARD
The entire EIS award (cash, Restricted Shares and Performance Rights)
is subject to performance in the initial 12 month performance period.
Performance tested
Subject to a relative total shareholder return (RTSR) test five years after
the date of allocation; divided into two separate tranches with one third
tested against the ASX 50 companies and the remainder against a group of
international oil & gas companies
Time tested
Subject to a five-year deferral period
Time tested
Subject to a three-year
deferral period
12 month
performance
period
Performance
Rights
30%
Restricted
Shares
30%
Restricted
Shares
27.5%
Cash
12.5%
Payable following
the end of the
performance year
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
80 Woodside Petroleum Ltd | Annual Report 2018
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Calculation of award
An executive’s award will be based upon two equally weighted components; individual performance against challenging KPIs and
the company’s performance against the corporate scorecard. This results in an individual performance factor (IPF) which ranges
from 0 to 1.6 for executive KMP. These targets are designed to promote short- and long-term shareholder value. Performance
against individual KPIs is assessed by the Board in the case of the CEO, and by the CEO and the Human Resources & Compensation
Committee in the case of other executive KMP. Meeting these targets means the CEO and executive KMP are eligible for their target
EIS allocation, subject to individual performance. Exceeding targets may result in an increase to award, whereas under performance
will result in a reduction in award. The minimum award that an executive can receive is zero if the initial performance conditions are
not achieved. The decision to pay or allocate any EIS award is subject to the overriding discretion of the Board, which may adjust
outcomes in order to better reflect shareholder expectations, and company or management performance.
EQUALLY WEIGHTED
INDIVIDUAL
KPIs
CORPORATE
PERFORMANCE
IPF
See page 83 for details of the CEO’s individual KPIs and page 85 for other executive KMP.
Restricted Shares
The Restricted Shares are divided into two tranches. The first tranche is 27.5% of the award and subject to a three-year deferral
period. The second tranche is 30% of the award and subject to a five-year deferral period. There are no further performance
conditions attached to these awards. This element creates a strong retention proposition for executives as vesting is subject
to employment not being terminated with cause or by resignation during the deferral period. The deferral ensures that awards
remain subject to fluctuations in share price across the three and five-year periods, which is intended to reflect the sustainability of
performance over the medium- and long-term and support increased alignment between executives and shareholders.
Performance Rights
The Performance Rights are divided into two portions with each portion subject to a separate RTSR performance hurdle tested over a five-
year period. Performance is tested after five years as Woodside operates in a capital intensive industry with long investment timelines. It is
imperative that executives take decisions in the long-term interest of shareholders, focused on value creation across the commodity price
cycles of the oil and gas industry. Our view is that RTSR is the best measure of long-term value creation across the commodity price cycle
of our industry.
One-third of the Performance Rights will be tested against a comparator group that comprises the entities within the ASX 50 index at
1 December 2018. The remaining two-thirds will be tested against an international group of oil and gas companies, set out in Table 12 on
page 92.
RTSR outcomes are calculated by an external adviser on or after the fifth anniversary of the allocation of the Performance Rights.
The outcome of the test is measured against the schedule below. For EIS awards, any Performance Rights that do not vest will lapse
and are not retested.
Woodside RTSR percentile position within peer group
Vesting of Performance Rights
Less than 50th percentile
Equal to 50th percentile
Equal to or greater than 75th percentile
Vesting between the 50th and 75th percentile points is on a pro rata basis.
no vesting
50% vest
100% vest
Target variable opportunity for 2018
Each executive is given a target VAR opportunity and a maximum VAR opportunity which is a percentage of the executive's FAR. The
opportunities for 2018 are outlined below.
Position
CEO
Executive KMP
Minimum opportunity
Target opportunity (% of FAR)
Maximum opportunity (% of FAR)
Zero
200
160
300
256
CEO target remuneration
Executive KMP target remuneration
FIXED REWARD
33%
VARIABLE REWARD
67%
FIXED REWARD
38%
VARIABLE REWARD
62%
Woodside Petroleum Ltd | Remuneration Report 81
CEO and executive KMP remuneration structure
Woodside's remuneration structure for the CEO and executive KMP is now comprised of two components; fixed remuneration
and variable reward.
FIXED ANNUAL REWARD
+ Based upon the scope of the executive’s role and their
individual level of knowledge, skill and experience.
+ Benchmarked for competitiveness against domestic and
international peers to enable the company to attract and
retain superior executive capability.
VARIABLE ANNUAL REWARD
+ Executives are eligible to receive a single variable reward
linked to challenging individual and company annual
targets set by the Board.
+ 12.5% of the variable reward is paid in cash.
+ 27.5% is allocated in Restricted Shares, subject to a
three-year deferral period.
+ 30% is allocated in Restricted Shares, subject to a
five-year deferral period.
+ 30% is allocated in Performance Rights which are subject
to a RTSR test five years after the date of grant; divided
into two separate tranches with one-third tested against
a comparator group that comprises the ASX 50 and the
remaining two-thirds against a group of international oil
and gas companies determined by the Board.
MINIMUM SHAREHOLDING REQUIREMENTS (MSR)
The Board introduced a MSR policy for executive KMP to reflect the long-term focus of management and further strengthen
alignment with shareholders. The policy requires executive KMP to have acquired and maintained Woodside shares for a minimum
total purchase price of at least 100% of their fixed remuneration after a period of five years and in the case of the CEO a minimum of
200% of fixed remuneration.
Table 3 – Key VAR features
Allocation methodology
Dividends
Clawback provisions
Control event
Cessation of employment
Restricted Shares and Performance Rights will be allocated using a face value allocation
methodology. The number of Restricted Shares and Performance Rights is calculated by dividing
the deferred value by the volume weighted average price (VWAP) each year.
Executives are entitled to receive dividends on Restricted Shares. No dividends are paid on
Performance Rights prior to vesting. For Performance Rights that do vest, a dividend equivalent
payment will be paid by Woodside for the period between allocation and vesting.
The Board has the discretion to reduce unvested entitlements including where an executive has acted
fraudulently or dishonestly or is found to be in material breach of their obligations, there is a material
misstatement or omission in the financial statements or the Board determines that circumstances have
occurred that have resulted in an unfair benefit to the executive.
The Board has the discretion to determine the treatment of any EIS award on a change of
control event. If a change of control occurs during the 12-month performance period, an
executive will receive at least a pro-rata cash payment in respect of the unallocated cash and
Restricted Share components of the EIS award for that year, assessed at target. If a change of
control occurs during the vesting period for equity awards, Restricted Shares will vest in full
whilst Performance Rights may, at the discretion of the Board, vest on an at least pro-rata basis.
During a Performance Period, should an executive provide notice of resignation or be terminated
for cause, no EIS award will be provided. In any other case, Woodside will have regard to
performance against target and the portion of the performance period elapsed in determining the
form of any EIS award.
During a Vesting Period, should an executive provide notice of resignation or be terminated for
cause, any EIS award will be forfeited or lapse. In any other case, any Restricted Shares will vest in
full from a date determined by the Board whilst any Performance Rights will remain on foot and
vest in the ordinary course subject to the satisfaction of applicable conditions. The Board will have
discretion to accelerate the vesting of unvested equity awards, subject to termination benefits laws.
No retesting
There will be no retest applied to EIS awards. Performance Rights will lapse if the required RTSR
performance is not achieved at the conclusion of the five-year period.
82 Woodside Petroleum Ltd | Annual Report 2018
CEO and executive KMP KPIs and outcomes for 2018
CEO KPIs and outcomes
FAR
In February 2018, Woodside conducted a review of the CEO's remuneration. This review took into account the changes to the CEO’s
incentive structure alongside the CEO’s individual and company performance together with comparative data against a defined peer
group. This supported the Board's decision to award the CEO an increase of 7.9% in April 2018.
VAR
For 2018, the individual performance of the CEO was reviewed by the Board against five equally weighted measures. These metrics,
outlined in Table 4, were chosen because successful performance in each area is a key driver of superior shareholder returns.
At the completion of the year, the Board reviews the CEO’s performance for that year. The CEO is given an individual performance
score of between 0 and 1.6. The CEO’s overall IPF for 2018 was 1.29, resulting in an award of 85.8% of maximum. The 2018 award for
the CEO is detailed in Table 6a on page 86.
Table 4 – CEO performance measures
Growth agenda
Objective
Assesses the alignment of growth
opportunities to shareholder return;
portfolio balance; the achievement of
challenging business objectives.
2018 outcomes
Substantial progress achieved against strategic objectives including acquisition of
additional equity in Scarborough; commencing FEED activities for Scarborough, Pluto
expansion and Senegal; negotiating preliminary agreements to process Browse gas at
KGP; commencing Browse concept definition phase; high grading Myanmar prospects
through successful drilling campaigns; and completing the equity raising providing
funding certainty for growth.
Effective execution
Objective
2018 outcomes
Assesses the maintenance, operation
and profitability of existing assets;
project delivery to achieve budget,
schedule and stated performance;
cost reduction; achievement of health,
safety and community expectations.
Strong operational performance with increased production, reduced unit production
costs and increased gross margin supporting cash flow and increased profit. Production
optimised through major NWS maintenance turnaround executed with no recordable
incidents, high Pluto reliability, completion of GWF 2 project ahead of schedule and
under budget, and Wheatstone producing at above design rates. CO2-e emissions
reductions better than target, TRIR did not meet target but was the second best result on
record and high potential incidents were almost halved.
Enterprise capability
Objective
2018 outcomes
Assesses leadership development;
workforce planning; executive
succession; Indigenous participation
and diversity; effective risk
identification and management.
Increased executive stewardship of workforce planning to deliver growth objectives
while maintaining base business. Continued to build executive capability and gender
balance with the appointment of the new Chief Operations Officer (COO). Overall, female
participation increased to 30.4% which compares favourably to the industry average
of 23.2%. Indigenous participation increased to 3.7%. Continued to advance artificial
intelligence and data analytic capability while maintaining focus on critical infrastructure,
security and risk management including a focus on opportunities designed to enhance
long term resilience to a lower emissions future (e.g. carbon abatement capability,
hydrogen assessment).
Woodside Petroleum Ltd | Remuneration Report 83
Shareholder focus
Objective
Assesses whether decisions are
made with a long-term shareholder
return focus; efficient and timely
communication to shareholders,
market analysts and fund managers;
the focus on shareholder return
throughout the organisation.
CEO actual remuneration
FIXED REWARD
28%
2018 Vesting
P Coleman
Table 4 – CEO performance measures (cont.)
Culture and reputation
Objective
2018 outcomes
Assesses performance culture and
emphasis on values; engagement
and enablement; improved employee
climate; Woodside’s brand as a
partner of choice.
Introduced a new integrated cultural framework incorporating values, safety, risk and
compliance and piloted pulse checks to measure cultural health on a regular basis.
Workplace climate and collaboration enhanced through new Mia Yellagonga headquarters.
Positive contribution to host communities through A$17.7 million social investment, and
meeting or exceeding most annual Reconciliation Action Plan targets. Progressed Human
Rights Policy implementation plan, including supply chain management framework.
2018 outcomes
The CEO drove a disciplined approach to managing capital efficiency allowing the
optimisation of growth projects while maintaining base business operating cash flows
and balancing corporate gearing.
VARIABLE REWARD
72%
Shares
45,334
103,051
14,097
2014 deferred short-term award vested on 20 February 2018
2013 long-term award had a partial vesting of 65% on 5 March 2018 including an adjustment due to the Retail Entitlement Offer
2012 long-term award had a partial vesting of 14% on 5 March 2018 including an adjustment due to the Retail Entitlement Offer
Executive KMP KPIs and outcomes
FAR
In January 2018, Woodside conducted a review of executive KMP remuneration based on benchmarking data against a defined
peer group alongside consideration of executive performance and role accountabilities. This review confirmed that executive KMP
remuneration was below market median. This supported the Board's decision to award an on average increase of 2.8% in April 2018.
VAR
For 2018, KPIs were tailored to reflect the individual responsibilities of executives who participate in the EIS. They are chosen to
align individual performance with the achievement of Woodside’s corporate strategy whilst fostering collaboration and excellence
amongst executives.
The Board approved EIS awards to executive KMP based on the scorecard result and their individual performance assessment. As a
result, EIS awards for executive KMP ranged from 59% to 88% of maximum and the average EIS award for executive KMP was 75% of
maximum. The EIS award for executive KMP is detailed in Table 6a on page 86.
The individual KPIs for each of the executive KMP are shown in Table 5 on page 85.
84 Woodside Petroleum Ltd | Annual Report 2018
Table 5 – Individual KPIs for 2018 EIS
Executive KMP
Key performance indicators
2018 performance
Michael Abbott
Senior Vice President
Corporate and Legal
Stakeholder engagement; continuous disclosure
compliance; Code of Conduct and anti-bribery
and corruption training; deliver Woodside
headquarters project
Successful legal and corporate affairs support for core business and growth
activities; corporate reputation plan succesfully executed; new Woodside
headquarters delivered under budget and on schedule with smooth startup;
managed robust market disclosure practices with no continuous disclosure
breaches; training enhanced and delivered to plan.
Sherry Duhe
Executive Vice President
and Chief Financial
Officer
Corporate operating expense; balance sheet
strength; credit rating; commercial; contracting and
funding support for growth projects
Robert Edwardes
Executive Vice President
Development
Portfolio development; capital expenditure; cost
and schedule; portfolio cost competitiveness;
Development HSE
Project development; exploration value delivery; data
analytics capability; technology delivery
Corporate operating expenditure below budget; successful conclusion
of Scarborough equity acquisition; successful execution of funding plan,
including equity raising, to support growth; effective commercial and
contracting support for Burrup Hub strategy including negotiations to
process Browse gas at KGP and contract awards for Scarborough, Senegal
and Pluto Train 2 FEED.
GWF 2 project delivered under budget and ahead of schedule; Greater
Enfield, Pluto Expansion, Scarborough, Senegal and Browse developments
progressed on or ahead of plan; capital expenditure (excluding
Scarborough acquisition) below budget; Scarborough, Senegal and Browse
cost of supply in line with targets; Development Division TRIR did not
achieve target.
Successfully moved Scarborough and Pluto Expansion into FEED activities
and Browse into concept definition stage; review and redirection of
exploration focus; two Myanmar gas discoveries; technology initiatives
delivered; enhanced data analytics capability; identification of opportunities
to enhance resilience to a lower emissions future.
LNG, oil and domestic gas sales; trading
performance; fleet utilisation; progress integrated
energy solutions
LNG marketing strategies developed for growth projects; grew domestic
gas sales portfolio including long-term agreement with Perdaman for
pipeline gas; trading performance and fleet utilisation exceeded targets;
joint venture agreement for domestic LNG fuel distribution in the Pilbara.
Production, operating expense; unit production costs;
Operations HSE performance
Production above target; operating expenditure below budget; unit
production costs better than target; instrumental in mid-year turnaround
in company’s personal safety performance; Operations Division TRIR
better than target; emissions reductions better than target; successful
commissioning of Pluto pipeline gas facility.
Shaun Gregory
Executive Vice President
Exploration and Chief
Technology Officer
Reinhardt Matisons
Executive Vice President
Marketing, Trading and
Shipping
Meg O’Neill
Executive Vice President
and Chief Operations
Officer
Executive KMP actual remuneration1
FIXED REWARD
36%
1. This represents an average of all executive KMPs actual and variable remuneration for 2018.
2018 vestings
2015 WEP Equity Rights vested on 1 October 2018 including an adjustment due to the Retail Entitlement Offer
2014 deferred short-term award vested on 20 February 2018
2013 long-term award had a partial vesting of 65% on 5 March 2018 including an adjustment due to the
Retail Entitlement Offer
2012 long-term award had a partial vesting of 14% on 5 March 2018 including an adjustment due to the
Retail Entitlement Offer
VARIABLE REWARD
64%
Shares
2,323
2,323
2,323
4,287
9,717
5,198
7,445
5,324
12,228
4,431
12,988
6,566
4,947
6,807
1,100
613
1,115
434
950
Executive KMP
Mr Abbott
Mr Gregory
Mr Matisons
Mr Abbott
Mr Edwardes
Mr Gregory
Mr Loader
Mr Matisons
Mr Utsler
Mr Abbott
Mr Edwardes
Mr Gregory
Mr Loader
Mr Matisons
Mr Utsler
Mr Abbott
Mr Edwardes
Mr Gregory
Mr Matisons
Woodside Petroleum Ltd | Remuneration Report 85
Table 6a – Valuation summary of CEO and executive KMP EIS for 2018
Name
Year
P Coleman
M Abbott
S Duhe
R Edwardes
S Gregory
P Loader4
R Matisons
M O'Neill5
M Utsler6
2018
2018
2018
2018
2018
2018
2018
2018
2018
Cash1
$
612,113
100,721
144,976
170,422
123,403
15,063
108,688
139,948
48,103
Restricted Shares²
3 year vesting period
Restricted Shares²
5 year vesting period
Performance Rights3
5 year vesting period
$
$
1,360,220
1,483,006
223,799
322,164
378,704
274,206
33,465
241,513
310,980
106,881
244,160
351,438
413,118
299,134
36,509
263,463
339,261
116,609
$
851,081
140,121
201,686
237,084
171,670
20,952
151,198
194,698
66,921
Total EIS
$
4,306,420
708,801
1,020,264
1,199,328
868,413
105,989
764,862
984,887
338,514
1. Represents the cash incentive earned in the respective year, which is actually paid in the following year. Amounts were translated to US dollars using closing spot rate on 31 December 2018.
2. The number of Restricted Shares allocated was calculated by dividing the amount of the executive's entitlement allocated to restricted shares by the face value of Woodside shares. The USD fair value
of Restricted Shares as at their date of grant has been estimated by reference to the closing share price at 31 December 2018. Grant date has been determined to be the date of the Board of Directors
approval, being 13 February 2019 and any differences between the estimated fair value at 31 December 2018 to the final fair value will be trued-up in the following 2019 financial year. The fair value
is not related to or indicative of the benefit (if any) that an individual executive may ultimately realise should these equity instruments vest.
3. The number of Performance Rights allocated for 2018 was calculated by dividing the amount of the executive's entitlement allocated to performance rights by the face value of Woodside shares.
The USD fair value shown above has been estimated at the date of grant based on preliminary modelling. Grant date has been determined to be the date of the Board of Directors' approval,
being 13 February 2019 and any differences between the estimated fair value at 31 December 2018 to the final fair value will be trued-up in the following 2019 financial year. The amount listed
above is not related to or indicative of the benefit (if any) that an individual executive may ultimately receive should these equity instruments vest.
4. Mr Loader ceased being executive KMP on 28 February 2018 and ceased employment on 30 June 2018.
5. Ms O'Neill commenced employment with Woodside on 1 May 2018.
6. Mr Utsler ceased being executive KMP on 27 April 2018 and ceased employment on 1 November 2018.
Table 6b – Valuation summary of CEO and executive KMP EIP for 2017
Name
P Coleman
M Abbott
S Duhe4
R Edwardes
S Gregory
P Loader
R Matisons
M Utsler
Year
2017
2017
2017
2017
2017
2017
2017
2017
STA Cash1
STA Deferred2
$
1,875,061
234,046
21,809
333,532
239,529
256,787
184,074
475,262
$
850,617
106,175
9,873
151,290
108,649
116,476
83,483
215,589
LTA3
$
Total EIP
$
1,263,852
3,989,530
84,263
10,468
160,109
86,229
123,265
88,364
171,107
424,484
42,150
644,931
434,407
496,528
355,921
861,958
1. Represents the short-term incentive earned in the respective year, which is actually paid in the following year. Amounts were translated to US dollars using closing spot rate on 31 December 2017.
2. The number of shares allocated under the STA was calculated by dividing the amount of the executive's entitlement by the face value of Woodside shares. The USD fair value of Restricted Shares
as at their date of grant has been determined by reference to the share price at acquisition. The fair value is not related to or indicative of the benefit (if any) that an individual executive may
ultimately realise should these equity instruments vest.
3. The number of shares allocated under the LTA for 2017 was calculated by dividing the amount of the executive's entitlement by the face value of Woodside shares. The USD fair value shown
above has been determined at the date of grant by applying the binomial valuation method combined with a Monte Carlo simulation. The amount listed above is not related to or indicative of the
benefit (if any) that individual executives may ultimately receive should these equity instruments vest.
4. Ms Duhe commenced employment with Woodside on 1 December 2017.
86 Woodside Petroleum Ltd | Annual Report 2018
Other equity plans
Woodside has a history of providing employees with the opportunity to participate in ownership of shares in the company and
using equity to support a competitive base remuneration position, including the legacy Executive Incentive Plan.
Details of prior year allocations are provided in Table 13 on pages 92-94. The terms applying to prior year grants are described
in past Woodside Annual Reports.
Executive Incentive Plan (EIP)
The EIP operated as Woodside’s executive incentive framework until the end of 2017 when the Board introduced the EIS. The EIP
was used to deliver STA and LTA to executive KMP.
Eligible executives could only receive an STA award if their individual annual performance was assessed as acceptable. Participants
were then divided into “Pool Groups”, with the size of the pool determined by each participant's target STA, and then adjusted based
on the corporate scorecard result.
STA made up 30-33% of total target remuneration for executive KMP with no individual maximum STA opportunity because the size
of the STA pool varied from year to year depending on performance and other factors.
LTA was granted in the form of Variable Pay Rights (VPRs) making up 20-22% of total target remuneration for executive KMP.
The award was divided into two portions with each portion subject to a separate RTSR performance hurdle tested over a four-year
period. One-third of the LTA will be tested against a comparator group that comprises of the entities within the ASX 50 index.
The remaining two-thirds will be tested against an international group of oil and gas companies.
RTSR outcomes are calculated by an external adviser on the fourth anniversary of the allocation. For 2017 awards, any VPRs that
do not vest, will lapse and are not retested. Prior awards of VPRs allowed for a retest at the end of a five-year period.
Table 7 illustrates how EIP awards for executive KMP were allocated, as well as their lifecycle in future years.
Table 7 – Overview of EIP
Performance Year
Year 1
Year 2
Year 3
Year 4
Year 5
PERFORMANCE YEAR
Executives must have been employed for at least part of
the Performance Year and achieve at least an acceptable
level of performance in their individual performance
assessments to be eligible for an EIP award.
F
O
S
T
S
I
S
N
O
C
R
A
V
ELIGIBLE EXECUTIVES RECEIVE
A VAR UNDER THE EIP
VAR for a Performance Year was
calculated as a percentage of FAR, which
was determined by the Board taking into
account relevant data on levels of variable
reward being offered in the market.
60% STA
Adjusted in accordance with the STA
pooling and performance assessment
process. Two-thirds of the STA was
paid as cash while the other third was
awarded as Restricted Shares.
40% LTA
Awarded as VPRs.
RESTRICTED SHARES
Subject to a three-year
deferral period.
VPRS
Subject to RTSR performance
over a four-year period up to
the vesting date with no retest.
Details of prior year allocations are provided in Table 13 on pages 92-94.
CEO STA & LTA
The CEO’s incentive arrangements are governed by his contract of employment. For previous years the CEO’s STA award was
determined by multiplying the CEO’s FAR by the corporate scorecard result and the CEO’s individual performance factor as
determined by the Board. Two-thirds of the award was paid in cash with the remaining third delivered as a deferred equity award
of Restricted Shares, subject to an overall cap of two times FAR.
For 2017, the LTA opportunity was set at 133% of his FAR. The entitlement was allocated at face value and in the form of VPRs and
divided into two portions with each subject to a separate RTSR performance hurdle tested over a four year period with no retest.
One- third of the LTA will be tested against a comparator group that comprises the entities within the ASX 50 index. The remaining
two-thirds will be tested against an international group of oil and gas companies.
Details of prior year allocations are provided in Table 13 on pages 92-94.
Woodside Petroleum Ltd | Remuneration Report 87
Woodside Equity Plan (WEP)
The WEP is available to all permanent employees, but since 1 January 2018 has excluded EIS participants. The purpose of the WEP 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 determined by the Board, and based on individual
performance as assessed under the performance review process. There are no further ongoing performance conditions. 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.
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 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 allocations under the SWEP in 2018. Table 13 on pages 92-94 includes a summary of executive KMPs interests in ERs.
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.
Equity awards
In February 2018, the Board approved the equity award rules which apply to EIS and discretionary executive allocations.
This allows the Board and CEO to award discretionary allocations of Restricted Shares or Performance Rights.
An award of 133,366 Restricted Shares was made to Ms Meg O’Neill upon commencement of employment with Woodside on 1 May 2018
to recognise certain rights that were forfeited with her prior employer. The Restricted Shares will vest in three tranches on each of
1 May 2019, 1 May 2021 and 1 May 2023, subject to Ms O’Neill not resigning or being terminated for cause prior to the vesting date.
No further vesting conditions were attached. Further details are set out in Table 13 on page 92-94.
Contracts for executive KMP
All executive KMP have a contract of employment. Table 8 below contains a summary of the key contractual provisions of the
contracts of employment for the executive KMP.
Table 8 – Summary of contractual provisions for executive KMP
Employing company
Contract Duration
Termination notice
period company1, 2
Termination notice
period executive
P Coleman
Woodside Petroleum Ltd
Unlimited
12 months
M Abbott
S Duhe
Woodside Energy Ltd
Unlimited
Woodside Energy Ltd
Unlimited
R Edwardes
Woodside Energy Ltd
Fixed term contract until
31 December 2019
S Gregory
Woodside Energy Ltd
Unlimited
R Matisons
Woodside Energy Ltd
Unlimited
M O’Neill
Woodside Energy Ltd
Unlimited
6 months
6 months
6 months
6 months
12 months
6 months
6 months
3 months
6 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 and Equity Award Rules. Executives are restrained from certain activities for specified periods after termination of their employment in order
to protect Woodside’s interests.
88 Woodside Petroleum Ltd | Annual Report 2018
Non-executive directors (NEDs)
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
+ the responsibilities and work requirements of Board members.
Fees paid to NEDs are recommended by the HR&C Committee based on benchmarking 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.
The minimum shareholding requirements for NEDs was reviewed in 2018. NEDs are now required to have acquired shares for a total
purchase price of at least 100% of their pre-tax annual fee after five years on the Board. 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, plus 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 9 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.
Effective 1 January 2019 an allowance is paid to any NED required to travel internationally to attend Board commitments,
compensating for factors related to long-haul travel. Where travel is between six and ten hours, an allowance of $5,000 gross per
trip is paid. Where travel exceeds 10 hours, an allowance of $10,000 gross per trip is paid.
Board fees are not paid to the CEO, as the time spent on Board work and the responsibilities of Board membership are considered
in determining the remuneration package provided as part of the normal employment conditions.
The total remuneration paid to, or in respect of, each NED in 2018 is set out in Table 14 on page 95.
Table 9 – Annual base Board and committee fees for NEDs
Position
Chairman of the Board2
Non-executive directors3
Committee chair
Committee member
Board1
A$
723,3004
212,7004
Audit & Risk
Committee
Human Resources
& Compensation
Committee
Sustainability
Committee
Nominations
Committee
A$
A$
A$
56,0004
27,9004
52,0005
26,5005
47,4004
23,7004
A$
Nil
Nil
1. NEDs receive Board and committee fees plus statutory superannuation (or payments in lieu for overseas based NEDs).
2. Inclusive of committee work.
3. Board fees paid to NEDs other than the Chairman.
4. Annual fee from 1 July 2014.
5. Annual fee from 1 July 2018.
Woodside Petroleum Ltd | Remuneration Report 89
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, available on
Woodside's website.
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 may receive executive remuneration advice directly from external independent remuneration
consultants. Table 10 below shows the fees payable to independent external remuneration consultants during 2018.
Under communications and engagement protocols adopted by the company, the market data reports were provided directly to
the Committee Chair, and the consultants provided a statement to the Committee that the reports had been prepared free of undue
influence from executive KMP. The Committee had full oversight of the review process and therefore it, and the Board, were satisfied
that the work undertaken by PricewaterhouseCoopers was free from undue influence by executive KMP.
Table 10 – Fees paid to remuneration consultants
Remuneration consultant
Services provided
PricewaterhouseCoopers
Remuneration benchmarking for the 2018 NED fee review
Remuneration benchmarking and modelling for the EIS
Remuneration benchmarking for the 2018 CEO remuneration review
Fees
A$184,609 (ex GST)
A$15,000 (ex GST)
A$25,500 (ex GST)
PricewaterhouseCoopers provided other services to Woodside including provision of taxation advice and general financial and
business consulting which resulted in a total of A$3,967,077 fees paid by Woodside.
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 executive KMP is paid in Australian dollars and, for reporting purposes,
converted to US dollars based on the applicable exchange rate at the date of payment. Valuation of equity awards is converted at
the spot rate applying when the equity award is granted.
90 Woodside Petroleum Ltd | Annual Report 2018
Statutory tables
Table 11 - Compensation of executive KMP for the year ended 31 December 2018 and 2017
Fixed Annual Reward
Variable Annual Reward
Short-term
Post
Cash
Share based
payments
Salaries,
fees and
allowances
Benefits
and
allowances
(including
non-
monetary)1
Company
contributions to
superannuation
Cash2
Share plans3
Long
service
leave
Termination
benefits
Total remuneration4
Performance
related5
$
$
$
$
$
$
$
$
A$
P Coleman
Chief Executive Officer
2018
1,964,585
44,260
15,149
612,113
3,755,729
147,126
-
-
-
-
-
-
-
-
-
-
6,538,962
8,807,377
7,914,105 10,266,600
909,781
1,226,641
983,756
1,281,013
1,112,571
1,501,811
308,683
402,986
1,996,778
2,688,150
1,890,649
2,456,444
1,204,600
1,623,340
1,079,246
1,409,030
-
-
-
-
-
1,682,683
2,186,728
984,849
1,327,826
1,015,831
1,325,726
2,550,923
3,497,641
-
-
%
67
74
46
51
38
10
56
54
43
54
55
56
47
50
61
-
49
55
2017
1,893,748
51,310
15,197 1,875,061
3,994,496
84,293
2018
430,015
17,060
14,569
100,721
322,263
25,153
2017
349,823
17,049
92,801
234,046
270,277
19,760
2018
628,922
35,984
7,544
144,976
279,663
15,482
2017
197,922
78,528
-
21,809
9,186
1,238
2018
790,884
27,563
15,149
170,422
951,554
41,206
2017
807,124
17,532
15,197
333,532
688,578
28,686
2018
532,588
19,062
15,149
123,403
393,253
121,145
2017
444,512
17,003
15,197
239,529
339,217
23,788
M Abbott
Senior Vice President
Corporate and Legal
S Duhe
Executive Vice President
and Chief Financial
Officer6,7
R Edwardes,
Executive Vice President
Development8
S Gregory
Senior Vice President and
Chief Technology Officer
P Loader
Executive Vice President
Global Exploration7, 9, 10
R Matisons
Executive Vice President
Marketing, Trading and
Shipping
M O'Neill
Executive Vice President
and Chief Operations
Officer7, 11
M Utsler
Executive Vice President
and Chief Operations
Officer7, 12, 13
2018
360,299
7,102
2017
681,242
41,783
-
-
256,787
681,840
21,031
15,063
349,044 (88,098)
21,012
664,422
853,388
2018
469,000
19,746
12,977
108,688
357,139
17,299
2017
385,171
23,336
79,248
184,074
323,310
20,692
2018
846,751
129,600
11,531
139,948
1,407,427
15,666
2017
-
-
2018
873,307
13,869
2017
1,026,372
22,006
-
-
-
-
-
-
48,103
829,668 (116,234)
153,035
1,801,748
2,352,842
475,262
828,789
30,656
2,383,085
3,094,964
1. Reflects the value of allowances and non-monetary benefits (including relocation, travel, health insurance, car parking and any associated fringe benefit tax).
2. The amount represents the cash earned in the respective year, which is actually paid in the following year. Amounts were translated to USD using closing spot rate on 31 December 2018.
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 applying the binomial valuation method combined with a Monte Carlo simulation. The fair value of rights is amortised over the vesting
period from the commencement of the service period, such that ‘total remuneration’ includes a portion of the fair value of unvested equity compensation during the year. The portion of the
expense relating to the 2018 EIS has been measured using estimated fair values as disclosed in footnotes 2 and 3 in Table 6a. 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. The total remuneration in AUD is converted from USD using exchange rates on the date of each transaction. This non-IFRS information is included for the purposes of showing the total annual
cost of benefits to the company in Australian dollars for the service period.
5. Performance related outcomes are calculated using the USD total remuneration figure.
6. Ms Duhe commenced with Woodside on 1 December 2017.
7. As non-residents for Australian tax purposes Ms Duhe, Mr Loader, Ms O'Neill 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.
8. Mr Edwardes' 2015, 2016, 2017 and 2018 share based payment amortisation expenses have been accelerated based on his contract end date of 31 December 2019.
9. Mr Loader's 2014, 2015, 2016, 2017 and 2018 share based payment amortisation expenses have been accelerated based on his contract end date of 30 June 2018.
10. Mr Loader ceased being executive KMP on 28 February 2018 and ceased employment 30 June 2018. Includes $306,774 of salaries, fees and allowances received by Mr Loader for the period of
1 March 2018 to 30 June 2018 whilst he was on gardening leave.
11. Ms O'Neill commenced with Woodside on 1 May 2018.
12. Mr Utsler's 2014, 2015, 2016, 2017 and 2018 share based payment amortisation expenses have been accelerated based on his contract end date of 1 November 2018.
13. Mr Utsler ceased being executive KMP on 27 April 2018 and ceased employment on 1 November 2018. Includes $688,104 of salaries, fees and allowances received by Mr Utsler for the period of
28 April 2018 to 1 November 2018 whilst he was on gardening leave.
Woodside Petroleum Ltd | Remuneration Report 91
Table 12 - Peer group of international oil and gas companies
Anadarko Petroleum Corporation
Apache Corporation
ConocoPhillips
Hess Corporation
Inpex Corporation
Kosmos Energy
Marathon Oil Company
Murphy Oil Corporation
Noble Energy
Oil Search Limited
Origin Energy Limited
Santos Ltd
Tullow Oil PLC
Table 13 – Summary of CEO and executive KMPs allocated, vested or lapsed equity
Name
Type of equity1
Grant date
Allocation date
Vesting date2,3
Awarded
but not
vested
Vested in
2018
% of total
vested
Lapsed
in 2018
Fair
value of
equity4,5,13
P Coleman
Restricted Shares
1 January 2014
20 February 2015 20 February 2018
45,334
45,334
100
Restricted Shares
1 January 2015
19 February 2016 19 February 2019
Restricted Shares
16 December 2016 27 February 2017 27 February 2019
Restricted Shares
1 January 2016
27 February 2017 27 February 2020
Restricted Shares
1 January 2017
20 February 2018 20 February 2021
Restricted Shares
13 February 2019
19 February 2019 19 February 2022
Restricted Shares
13 February 2019
19 February 2019 19 February 2024
47,905
48,225
48,225
37,822
61,660
67,226
-
-
-
-
-
-
RTSR Tested VPRs
1 January 2012
22 February 2013 5 March 2018
99,8226
14,097
RTSR Tested VPRs
1 January 2013
21 February 2014 21 February 2018
158,5406
103,051
RTSR Tested VPRs
1 January 2014
20 February 2015 20 February 2019
169,0226
RTSR Tested VPRs
1 January 2015
19 February 2016 19 February 2020
155,4026
RTSR Tested VPRs
1 January 2016
27 February 2017 27 February 2021
106,0676
RTSR Tested VPRs
1 January 2017
20 February 2018 20 February 2022
104,797
Performance Rights
13 February 2019
19 February 2019 19 February 2024
67,226
-
-
-
-
-
-
-
-
-
-
-
14
65
-
-
-
-
-
M Abbott7
Restricted Shares
1 January 2014
20 February 2015 20 February 2018
Restricted Shares
1 January 2015
19 February 2016 19 February 2019
Restricted Shares
1 January 2016
27 February 2017 27 February 2020
Restricted Shares
1 January 2017
20 February 2018 20 February 2021
Restricted Shares
13 February 2019
19 February 2019 19 February 2022
Restricted Shares
13 February 2019
19 February 2019 19 February 2024
RTSR Tested VPRs
1 January 2012
22 February 2013 5 March 2018
RTSR Tested VPRs
1 January 2013
21 February 2014 21 February 2018
RTSR Tested VPRs
1 January 2015
19 February 2016 19 February 2020
RTSR Tested VPRs
1 January 2016
27 February 2017 27 February 2021
RTSR Tested VPRs
1 January 2017
20 February 2018 20 February 2022
Performance Rights
13 February 2019
19 February 2019 19 February 2024
WEP Equity Rights
1 October 2015
WEP Equity Rights
1 October 2017
-
-
1 October 2018
1 October 2020
4,287
4,788
5,339
4,721
10,145
11,068
4,3496
6,8186
9,5216
7,0176
6,987
11,068
2,3236
1,1616
4,287
100
-
-
-
-
-
613
4,431
-
-
-
-
2,323
-
-
-
-
-
-
14
65
-
-
-
-
100
-
-
-
-
-
-
-
-
85,725
-
-
-
-
-
-
-
-
-
-
-
-
3,736
-
-
-
-
-
-
-
34.80
31.15
22.73
20.88
22.49
22.06
22.06
15.90
20.77
17.45
17.39
12.05
12.06
12.66
34.80
31.15
20.88
22.49
22.06
22.06
15.90
20.77
17.39
12.05
12.06
12.66
18.07
20.33
92 Woodside Petroleum Ltd | Annual Report 2018
Table 13 – Summary of CEO and executive KMPs allocated, vested or lapsed equity (cont.)
Awarded
but not
vested
Vested in
2018
% of total
vested
Lapsed
in 2018
Fair
value of
equity4,5,13
Name
Type of equity1
Grant date
Allocation date
Vesting date2,3
S Duhe8
Restricted Shares
1 January 2017
20 February 2018 20 February 2021
Restricted Shares
13 February 2019
19 February 2019 19 February 2022
Restricted Shares
13 February 2019
19 February 2019 19 February 2024
RTSR Tested VPRs
1 January 2017
20 February 2018 20 February 2022
Performance Rights
13 February 2019
19 February 2019 19 February 2024
SWEP Equity Rights
1 December 2017
-
1 December 2020
R Edwardes
Restricted Shares
1 January 2014
20 February 2015 20 February 2018
Restricted Shares
1 January 2015
19 February 2016 19 February 2019
Restricted Shares
1 January 2016
27 February 2017 27 February 2020
Restricted Shares
1 January 2017
20 February 2018 20 February 2021
Restricted Shares
13 February 2019
19 February 2019 19 February 2022
Restricted Shares
13 February 2019
19 February 2019 19 February 2024
RTSR Tested VPRs
1 January 2012
22 February 2013 5 March 2018
RTSR Tested VPRs
1 January 2013
21 February 2014 21 February 2018
RTSR Tested VPRs
1 January 2014
20 February 2015 20 February 2019
RTSR Tested VPRs
1 January 2015
19 February 2016 19 February 2020
RTSR Tested VPRs
1 January 2016
27 February 2017 27 February 2021
RTSR Tested VPRs
1 January 2017
20 February 2018 20 February 2022
Performance Rights
13 February 2019
19 February 2019 19 February 2024
S Gregory
Restricted Shares
1 January 2014
20 February 2015 20 February 2018
Restricted Shares
1 January 2015
19 February 2016 19 February 2019
Restricted Shares
1 January 2016
27 February 2017 27 February 2020
Restricted Shares
1 January 2017
20 February 2018 20 February 2021
Restricted Shares
13 February 2019
19 February 2019 19 February 2022
Restricted Shares
13 February 2019
19 February 2019 19 February 2024
RTSR Tested VPRs
1 January 2012
22 February 2013 5 March 2018
RTSR Tested VPRs
1 January 2013
21 February 2014 21 February 2018
RTSR Tested VPRs
1 January 2014
20 February 2015 20 February 2019
439
14,604
15,931
868
15,931
15,1536
9,717
10,507
9,658
6,727
17,167
18,727
7,9006
19,9816
21,2926
19,5766
13,3616
13,276
18,727
5,198
6,218
7,038
4,831
12,430
13,560
3,0796
10,1016
11,3916
RTSR Tested VPRs
1 January 2015
19 February 2016 19 February 2020
10,4726
RTSR Tested VPRs
1 January 2016
27 February 2017 27 February 2021
RTSR Tested VPRs
1 January 2017
20 February 2018 20 February 2022
Performance Rights
13 February 2019
19 February 2019 19 February 2024
WEP Equity Rights
1 October 2015
WEP Equity Rights
1 October 2017
-
-
1 October 2018
1 October 2020
P Loader9
Restricted Shares
1 January 2014
20 February 2015 20 February 2018
Restricted Shares
1 January 2015
19 February 2016 19 February 2019
Restricted Shares
1 January 2016
27 February 2017 10 July 2018
Restricted Shares
1 January 2017
20 February 2018 10 July 2018
Restricted Shares
13 February 2019
19 February 2019 19 February 2022
Restricted Shares
13 February 2019
19 February 2019 19 February 2024
RTSR Tested VPRs
1 January 2013
21 February 2014 21 February 2018
RTSR Tested VPRs
1 January 2014
20 February 2015 20 February 2019
RTSR Tested VPRs
1 January 2015
19 February 2016 19 February 2020
RTSR Tested VPRs
1 January 2016
27 February 2017 27 February 2021
RTSR Tested VPRs
1 January 2017
20 February 2018 20 February 2022
Performance Rights
13 February 2019
19 February 2019 19 February 2024
7,1486
7,150
13,560
2,3236
1,7476
7,445
8,051
8,787
5,179
1,517
1,655
7,6116
16,3146
15,0006
10,2386
10,221
1,655
-
-
-
-
-
-
-
-
-
-
-
-
9,717
100
-
-
-
-
-
1,115
12,988
-
-
-
-
-
-
-
-
-
-
14
65
-
-
-
-
-
5,198
100
-
-
-
-
-
434
6,566
-
-
-
-
-
2,323
-
7,445
-
8,787
5,179
-
-
4,947
-
-
-
-
-
-
-
-
-
-
14
65
-
-
-
-
-
100
-
100
-
100
100
-
-
65
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,785
-
-
-
-
-
-
-
-
-
-
-
-
2,645
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
22.49
22.06
22.06
12.06
12.66
21.26
34.80
31.15
20.88
22.49
22.06
22.06
15.90
20.77
17.45
17.39
12.05
12.06
12.66
34.80
31.15
20.88
22.49
22.06
22.06
15.90
20.77
17.45
17.39
12.05
12.06
12.66
18.07
20.33
34.80
31.15
20.88
22.49
22.06
22.06
20.77
17.45
17.39
12.05
12.06
12.66
Woodside Petroleum Ltd | Remuneration Report 93
Table 13 – Summary of CEO and executive KMPs allocated, vested or lapsed equity (cont.)
Name
Type of equity1
Grant date
Allocation date
Vesting date2,3
R Matisons10
Restricted Shares
1 January 2014
20 February 2015 20 February 2018
Restricted Shares
1 January 2015
19 February 2016 19 February 2019
Restricted Shares
1 January 2016
27 February 2017 27 February 2020
Restricted Shares
1 January 2017
20 February 2018 20 February 2021
Restricted Shares
13 February 2019
19 February 2019 19 February 2022
Restricted Shares
13 February 2019
19 February 2019 19 February 2024
RTSR Tested VPRs
1 January 2012
22 February 2013 5 March 2018
RTSR Tested VPRs
1 January 2013
21 February 2014 21 February 2018
RTSR Tested VPRs
1 January 2015
19 February 2016 19 February 2020
RTSR Tested VPRs
1 January 2016
27 February 2017 27 February 2021
RTSR Tested VPRs
1 January 2017
20 February 2018 20 February 2022
Performance Rights
13 February 2019
19 February 2019 19 February 2024
WEP Equity Rights
1 October 2015
WEP Equity Rights
1 October 2017
-
-
1 October 2018
1 October 2020
M O'Neill11
Restricted Shares
13 February 2019
19 February 2019 19 February 2022
Restricted Shares
13 February 2019
19 February 2019 19 February 2024
Performance Rights
13 February 2019
19 February 2019 19 February 2024
Restricted Shares
1 May 2018
Restricted Shares
1 May 2018
Restricted Shares
1 May 2018
1 May 2018
1 May 2018
1 May 2018
1 May 2019
1 May 2021
1 May 2023
M Utsler12
Restricted Shares
1 January 2014
20 February 2015 20 February 2018
Restricted Shares
1 January 2015
19 February 2016 19 February 2019
Restricted Shares
1 January 2016
27 February 2017 1 November 2018
Restricted Shares
1 January 2017
20 February 2018 1 November 2018
Restricted Shares
13 February 2019
19 February 2019 19 February 2022
Restricted Shares
13 February 2019
19 February 2019 19 February 2024
RTSR Tested VPRs
1 January 2013
21 February 2014 21 February 2018
RTSR Tested VPRs
1 January 2014
20 February 2015 20 February 2019
RTSR Tested VPRs
1 January 2015
19 February 2016 19 February 2020
RTSR Tested VPRs
1 January 2016
27 February 2017 27 February 2021
RTSR Tested VPRs
1 January 2017
20 February 2018 20 February 2022
Performance Rights
13 February 2019
19 February 2019 19 February 2024
Awarded
but not
vested
Vested in
2018
% of total
vested
Lapsed
in 2018
Fair
value of
equity4,5,13
5,324
5,541
5,583
3,712
10,948
11,943
6,7326
10,4736
10,7976
7,3686
7,327
11,943
2,3236
1,1616
14,097
15,379
15,379
59,270
37,048
37,048
12,228
10,876
13,673
9,586
4,845
5,286
1,6926
21,4356
19,7076
14,1996
14,188
5,286
5,324
100
-
-
-
-
-
950
6,807
-
-
-
-
-
-
-
-
-
14
65
-
-
-
-
2,323
100
-
-
-
-
-
-
-
12,228
-
13,673
9,586
-
-
1,100
-
-
-
-
-
-
-
-
-
-
-
-
100
-
100
100
-
-
65
-
-
-
-
-
-
-
-
-
-
-
5,782
.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
34.80
31.15
20.88
22.49
22.06
22.06
15.90
20.77
17.39
12.05
12.06
12.66
18.07
20.33
22.06
22.06
12.66
24.45
24.45
24.45
34.80
31.15
20.88
22.49
22.06
22.06
20.77
17.45
17.39
12.05
12.06
12.66
1. For valuation purposes all VPRs and equity rights are treated as if they will be equity settled.
2. Vesting date and exercise date are the same. Vesting is subject to satisfaction of vesting conditions. Full details of the vesting conditions for all prior year equity grants to executive KMP are
included in the remuneration report for the relevant year. 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 equity instruments awarded.
3. Any RTSR-tested VPRs allocated prior to 2017 that do not vest as a result of the first test will be re-tested over a five year performance period. RTSR-tested VPRs allocated in 2017 and
performance rights will not be re-tested. The second test date for earlier VPR allocations is one year after the vesting date listed in the table.
4. In accordance with the requirements of AASB 2 Share-based Payment, the fair value of variable pay 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 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. The fair value of Rights and Restricted Shares as at their date of grant has been determined by reference to the share price at acquisition. The fair value is not related to or indicative of the benefit
(if any) that individual executives may ultimately realise should these equity instruments vest.
6. The RTSR-tested VPRs allocated for the 2012, 2013, 2014, 2015 and 2016 performance years and the 2015 and 2017 WEP allocations have been updated to include any adjustments made as part of
the Retail Entitlement Offer.
7. Mr Abbott did not meet the definition of executive KMP under AASB 124 for years prior to 2015. Previous years' figures are not shown.
8. Ms Duhe commenced employment with Woodside on 1 December 2017.
9. Mr Loader ceased being executive KMP on 28 February 2018 and ceased employment on 30 June 2018.
10. Mr Matisons did not meet the definition of executive KMP under AASB 124 for years prior to 2015. Previous years' figures are not shown.
11. Ms O'Neill commenced employment with Woodside on 1 May 2018.
12. Mr Utsler ceased being executive KMP on 27 April 2018 and ceased employment on 1 November 2018.
13. Fair values for the 2018 EIS with a grant date of 13 February 2019 have been estimated as disclosed in footnotes 2 and 3 of Table 6a.
94 Woodside Petroleum Ltd | Annual Report 2018
Table 14 - Total remuneration paid to NEDs in 2018 and 2017
The following table provides a detailed breakdown of the components of remuneration for each of the company’s NEDs.
Non-executive director
Short-term
Cash salary and fees
Post employment
Pension super
Salaries, fees and allowances
$
Company contributions to superannuation
$
R Goyder1
M A Chaney2
L Archibald3
M A Cilento
F C Cooper
C Haynes
I Macfarlane
A D Pickard
S Ryan
G Tilbrook
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
449,968
69,080
171,227
554,241
216,076
203,850
213,606
217,467
219,354
224,057
216,076
221,765
198,637
203,043
233,162
234,168
197,329
202,524
198,375
211,265
14,969
6,507
17,951
52,653
-
-
20,293
20,659
20,839
21,285
-
-
15,149
14,852
-
-
18,747
19,240
18,846
18,301
1. Mr Goyder was appointed as a Director on 1 August 2017 and was appointed Chairman on 20 April 2018.
2. Mr Chaney ceased being Chairman on 19 April 2018.
3. Mr Archibald was appointed as a Director on 1 February 2017.
Total
$
464,937
75,587
189,178
606,894
216,076
203,850
233,899
238,126
240,193
245,342
216,076
221,765
213,786
217,895
233,162
234,168
216,076
221,764
217,221
229,566
Woodside Petroleum Ltd | Remuneration Report 95
Table 15 - Executive KMP share and equity holdings
Details of shares held by executive KMP including their personally related entities1 for the 2018 financial year are as follows:
Name
Non-executive Directors
Type of
equity
Opening holding
at 1 January 20182 NEDSP3
Rights allocated
in 2018
Rights vested
in 2018
Restricted
Shares granted
Net changes
- other4
Closing holding at
31 December 20185
R Goyder
M Chaney6
L Archibald
M Cilento
F Cooper
C Haynes
I MacFarlane
A Pickard
S Ryan
G Tilbrook
Executives
P Coleman
Shares
Shares
Shares
Shares
Shares
Shares
Shares
Shares
Shares
Shares
12,500
1,744
20,000
-
1,088
1,106
3,559
6,396
944
1,133
7,565
1,106
873
2,376
5,748
7,153
Equity Rights
Shares
682,766
349,443
M Abbott
Equity Rights
Shares
S Duhe
Equity Rights
Shares
R Edwardes
Equity Rights
Shares
S Gregory
Equity Rights
P Loader7
Equity Rights
Shares
Shares
R Matisons
Equity Rights
Shares
M O'Neill
Equity Rights
M Utsler8
Equity Rights
Shares
Shares
38,111
15,996
15,000
-
81,353
42,244
45,824
20,754
48,670
37,693
50,072
38,404
-
-
56,460
51,449
986
1,178
986
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
110,884
-
7,334
-
1,021
-
14,033
-
7,587
-
10,221
-
7,775
-
-
-
14,188
-
-
-
-
-
-
-
-
-
-
-
(117,148)
117,148
(7,367)
7,367
-
-
(14,103)
14,103
(9,323)
9,323
-
-
(10,080)
10,080
-
-
(1,089)
1,089
-
-
-
-
-
-
-
-
-
-
-
1,390
(20,000)
120
396
711
841
97
264
639
796
(85,725)
37,822
(38,066)
-
4,721
-
439
6,727
-
4,831
-
5,179
-
(3,736)
(5,000)
-
-
(6,785)
(2,645)
(7,128)
(58,891)
(42,872)
(5,782)
3,712
(16,496)
-
133,366
-
9,586
-
-
(69,559)
(62,124)
15,634
-
2,314
4,899
8,240
9,512
1,956
3,818
7,373
7,949
590,777
466,347
34,342
23,084
16,021
439
74,498
63,074
41,443
27,780
-
-
41,985
35,700
-
133,366
-
-
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. For NEDs only (excluding M Chaney), related to participation in the entitlement of one new share for every nine shares held on the record date of 19 February 2018, under the Entitlement Offer
announced on 14 February 2018.
5. Closing equity rights holdings represents unvested options and rights held at the end of the reporting period. There are no options and rights vested but unexercised as at 31 December 2018.
6. Mr Chaney ceased being Chairman on 19 April 2018.
7. Mr Loader ceased being KMP on 28 February 2018.
8. Mr Utsler ceased being KMP on 27 April 2018.
96 Woodside Petroleum Ltd | Annual Report 2018
Glossary
Key terms used in the Remuneration Report
Term
Committee
EIP
EIS
ER
Meaning
The Human Resources & Compensation Committee
The Executive Incentive Plan
Executive Incentive Scheme
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 whom the Board has determined to be eligible to participate in the EIS
Executive
Executive Director Peter Coleman
Executive KMP
KMP
KPI
LTA
NED
NEDSP
Performance Right Each Performance Right is a right to receive a fully paid ordinary share in Woodside (or, at the Board’s discretion,
The Executive Director and senior executives listed in Table 1 on page 78
Key management personnel
Key performance indicator
Long-term award
Non-executive director
The Non-executive Director Share Plan
as cash equivalent). No amount is payable by the Executive on the grant or vesting of a Performance Right
The year to which an EIS award relates
Performance Year
Restricted Shares Woodside ordinary shares that are awarded to Executives as the deferred component of their STA or as a part
of their VAR under the EIS. 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 aligns 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
The Woodside Equity Plan
RTSR
Scorecard
STA
SWEP
VAR
VPR
WEP
Woodside Petroleum Ltd | Remuneration Report 97
CONTENTS
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
Notes to the financial statements
About these statements
A. Earnings for the year
A.1 Segment revenue and expenses
A.2 Finance costs
A.3 Dividends paid and proposed
A.4 Earnings per share
A.5 Taxes
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
100
101
102
103
104
105
107
108
110
110
110
110
112
113
114
115
116
116
C. Debt and capital
C.1 Cash and cash equivalents
C.2 Interest-bearing liabilities and financing facilities
C.3 Contributed equity
C.4 Other reserves
D. Other assets and liabilities
D.1 Receivables
D.2 Inventories
D.3 Payables
D.4 Provisions
D.5 Other financial assets and liabilities
D.6 Segment assets and liabilities
D.7 Non-current assets held for sale
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
Directors’ declaration
Independent audit report
117
118
118
119
120
121
122
122
122
123
124
124
125
126
127
127
127
129
129
129
129
130
131
133
135
136
Significant changes in the current reporting period
The financial performance and position of the Group were particularly affected by the following events and transactions during the
reporting period:
• Wheatstone LNG Train 2 and Greater Western Flank Phase 2 commenced production. Refer to Note A.1 for the assets’ results for the period.
• The Company completed an equity raising of 93,706,646 shares at a discounted price of A$27.00 per share. The net proceeds from the
equity raising were US$1,949 million. For more details, refer to Note A.4 and C.3.
• The purchase of ExxonMobil’s interests in the Scarborough area assets on 29 March 2018, for a total purchase consideration of
US$444 million. For more details, refer to Note B.5.
Woodside Petroleum Ltd | Financial Statements 99
CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2018
Operating revenue
Cost of sales
Gross profit
Other income
Other expenses
Profit before tax and net finance costs
Finance income
Finance costs
Profit before tax
Petroleum resource rent tax (PRRT) benefit
Income tax expense
Profit after tax
Profit attributable to:
Equity holders of the parent
Non-controlling interest
Profit for the period
Basic and diluted earnings per share attributable to equity holders of the parent (US cents)
Notes
A.1
A.1
A.1
A.1
A.2
A.5
A.5
E.9
A.4
2018
US$m
5,240
(2,604)
2,636
79
(437)
2,278
33
(216)
2,095
52
(680)
1,467
1,364
103
1,467
148.1
Restated*
2017
US$m
3,975
(1,963)
2,012
16
(314)
1,714
10
(94)
1,630
136
(601)
1,165
1,069
96
1,165
123.4
The accompanying notes form part of the Financial Statements.
*Certain amounts shown here do not correspond to the 2017 Annual Financial Statements, refer to Note E.10(b).
100 Woodside Petroleum Ltd | Annual Report 2018
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2018
Profit for the period
Other comprehensive income
Items that may be reclassified to the income statement in subsequent periods:
Losses on hedges
Tax effect on employee share plans
Items that will not be reclassified to the income statement in subsequent periods:
Remeasurement gains on defined benefit plan
Other comprehensive (loss)/income for the period, net of tax
Total comprehensive income for the period
Total comprehensive income attributable to:
Equity holders of the parent
Non-controlling interest
Total comprehensive income for the period
The accompanying notes form part of the Financial Statements.
*Certain amounts shown here do not correspond to the 2017 Financial Statements, refer to Note E.10(b).
2018
US$m
1,467
Restated*
2017
US$m
1,165
-
(4)
1
(3)
1,464
1,361
103
1,464
(2)
8
4
10
1,175
1,079
96
1,175
Woodside Petroleum Ltd | Financial Statements 101
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2018
Current assets
Cash and cash equivalents
Receivables
Inventories
Other financial assets
Other assets
Non-current assets held for sale
Total current assets
Non-current assets
Receivables
Other financial assets
Other assets
Exploration and evaluation assets
Oil and gas properties
Other plant and equipment
Deferred tax assets
Total non-current assets
Total assets
Current liabilities
Payables
Interest-bearing liabilities
Other financial liabilities
Other liabilities
Provisions
Tax payable
Total current liabilities
Non-current liabilities
Interest-bearing liabilities
Deferred tax liabilities
Other financial liabilities
Other liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued and fully paid shares
Shares reserved for employee share plans
Other reserves
Retained earnings
Equity attributable to equity holders of the parent
Non-controlling interest
Total equity
Notes
C.1
D.1
D.2
D.5
D.7
D.1
D.5
B.2
B.3
A.5
D.3
C.2
D.5
D.4
A.5
C.2
A.5
D.5
D.4
C.3
C.3
C.4
E.9
2018
US$m
1,674
487
155
54
31
10
2,411
208
30
17
4,180
18,881
182
1,179
24,677
27,088
586
79
48
43
215
74
1,045
3,992
2,062
20
64
1,583
7,721
8,766
18,322
8,880
(31)
985
7,655
17,489
833
18,322
Restated*
2017
US$m
318
406
186
74
27
-
1,011
155
31
8
3,530
19,398
141
1,125
24,388
25,399
645
76
11
29
220
61
1,042
4,989
1,811
22
77
1,547
8,446
9,488
15,911
6,919
(35)
997
7,200
15,081
830
15,911
The accompanying notes form part of the Financial Statements.
*Certain amounts shown here do not correspond to the 2017 Financial Statements, refer to Note E.10(b).
102 Woodside Petroleum Ltd | Annual Report 2018
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 December 2018
Cash flows from operating activities
Profit after tax for the period
Adjustments for:
Non-cash items
Depreciation and amortisation
Change in fair value of derivative financial instruments
Net finance costs
Tax expense
Exploration and evaluation written off
Impairment loss
Other
Changes in assets and liabilities
(Increase)/decrease in trade and other receivables
Decrease/(increase) in inventories
Decrease in provisions
Decrease/(increase) in other assets and liabilities
Decrease in trade and other payables
Cash generated from operations
Purchases of shares and payments relating to employee share plans
Interest received
Dividends received
Borrowing costs relating to operating activities
Income tax paid
PRRT received
Payments for restoration
Net cash from operating activities
Cash flows used in investing activities
Payments for capital and exploration expenditure
Proceeds from disposal of other plant and equipment
Borrowing costs relating to investing activities
Payments for acquisition of joint arrangements net of cash acquired
Net cash used in investing activities
Cash flows used in financing activities
Proceeds from borrowings
Repayment of borrowings
Borrowing costs relating to financing activities
Contributions to non-controlling interests
Dividends paid
Net proceeds from equity raising
Net cash used in financing activities
Net increase in cash held
Cash and cash equivalents at the beginning of the period
Effects of exchange rate changes
Cash and cash equivalents at the end of the period
Notes
2018
US$m
Restated*
2017
US$m
1,467
1,165
1,497
(2)
183
628
94
39
9
(96)
22
(14)
45
(5)
3,867
(56)
29
8
(131)
(414)
2
(9)
3,296
(1,334)
71
(65)
(444)
(1,772)
-
(1,003)
(47)
(149)
(909)
1,949
(159)
1,365
318
(9)
1,674
1,204
(1)
84
465
58
-
28
9
(25)
(75)
(24)
(9)
2,879
(47)
10
6
(21)
(411)
6
(22)
2,400
(1,390)
-
(178)
-
(1,568)
2,220
(2,133)
(15)
(51)
(826)
-
(805)
27
285
6
318
B.5
C.2
C.2
C.1
The accompanying notes form part of the Financial Statements.
*Certain amounts shown here do not correspond to the 2017 Financial Statements, refer to Note E.10(b).
Woodside Petroleum Ltd | Financial Statements 103
g
n
i
l
l
o
r
t
n
o
c
-
n
o
N
t
s
e
r
e
t
n
i
E.9
US$m
830
103
-
103
-
-
-
-
-
(100)
833
823
96
-
96
-
-
-
(89)
830
y
t
i
u
q
e
l
a
t
o
T
US$m
15,911
1,467
(3)
1,464
1,989
(28)
(56)
-
51
(1,009)
18,322
15,648
1,165
10
1,175
(47)
-
50
(915)
15,911
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2018
i
d
a
p
y
l
l
u
f
d
n
a
d
e
u
s
s
I
s
e
r
a
h
s
e
r
a
h
s
e
e
y
o
p
m
e
l
r
o
f
d
e
v
r
e
s
e
r
s
e
r
a
h
S
s
n
a
p
l
s
t
fi
e
n
e
b
e
e
y
o
p
m
E
l
e
v
r
e
s
e
r
e
v
r
e
s
e
r
n
o
i
t
a
l
s
n
a
r
t
y
c
n
e
r
r
u
c
n
g
e
r
o
F
i
e
v
r
e
s
e
r
g
n
g
d
e
H
i
i
s
g
n
n
r
a
e
d
e
n
a
t
e
R
i
e
h
t
l
f
o
s
r
e
d
o
h
y
t
i
u
q
E
t
n
e
r
a
p
Notes
C.3
US$m
C.3
US$m
C.4
US$m
C.4
US$m
C.4
US$m
US$m
US$m
At 1 January 2018
Profit for the period
Other comprehensive loss
Total comprehensive income/(loss) for the period
Shares issued
Share issue costs (net of tax)
Employee share plan purchases
Employee share plan redemptions
Share-based payments
Dividends paid
At 31 December 2018
At 1 January 2017 (restated*)
Profit for the period (restated*)
Other comprehensive income/(loss)
Total comprehensive income/(loss) for the period (restated*)
Employee share plan purchases
Employee share plan redemptions
Share-based payments
Dividends paid
At 31 December 2017 (restated*)
6,919
-
-
-
1,989
(28)
-
-
-
-
8,880
6,919
-
-
-
-
-
-
-
6,919
(35)
-
-
-
-
-
(56)
60
-
-
(31)
(30)
-
-
-
(47)
42
-
-
(35)
218
-
(3)
(3)
-
-
-
(60)
51
-
206
198
-
12
12
-
(42)
50
-
218
793
-
-
-
-
-
-
-
-
-
793
793
-
-
-
-
-
-
-
793
(14)
-
-
-
-
-
-
-
-
-
(14)
(12)
-
(2)
(2)
-
-
-
-
(14)
7,200
1,364
-
1,364
-
-
-
-
-
(909)
7,655
6,957
1,069
-
1,069
-
-
-
(826)
7,200
15,081
1,364
(3)
1,361
1,989
(28)
(56)
-
51
(909)
17,489
14,825
1,069
10
1,079
(47)
-
50
(826)
15,081
The accompanying notes form part of the Financial Statements.
*Certain amounts shown here do not correspond to the 2017 Financial Statements, refer to Note E.10(b).
104 Woodside Petroleum Ltd | Annual Report 2018
About these statements
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 the principal activities
of the Group are described in the Directors’ Report and in the
segment information in Note A.1.
The financial statements were authorised for issue in accordance
with a resolution of the directors on 14 February 2019.
Statement of compliance
The financial statements are general purpose financial statements,
which have 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 statements
comply with International Financial Reporting Standards (IFRS)
as issued by the International Accounting Standards Board.
The accounting policies are consistent with those disclosed in the
2017 Financial Statements, 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, with the exception
of AASB 15 Revenue from Contracts with Customers (AASB 15)
(refer to Note E.10(b)). The Group early adopted AASB 9 Financial
Instruments (AASB 9) on 1 January 2017.
The Group has not elected to early adopt any new or amended
standards or interpretations that are issued but not yet effective.
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 these financial statements have been
rounded to the nearest million dollars under the option available
to the Group under Australian Securities and Investments
Commission (ASIC) Corporations (Rounding in Financial/Directors’
Reports) Instrument 2016/191 dated 24 March 2016, unless
otherwise stated.
Basis of preparation
The financial statements have 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 or amortised cost adjusted for changes in fair
value attributable to the risks that are being hedged in effective
hedge relationships.
The financial statements comprise the financial results 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.
The consolidated financial statements provide comparative
information in respect of the previous period. A reclassification of
items in the financial statements of the previous period has been
made in accordance with the classification of items in the financial
statements of the current period.
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.
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
and 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 pages 60–62 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 A
Section C
Section C
Section C
Section D
Commodity price risk
Foreign exchange risk
Capital risk
Liquidity risk
Interest rate risk
Credit risk
Page 107
Page 107
Page 117
Page 117
Page 117
Page 121
Woodside Petroleum Ltd | Financial Statements 105
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 31 December 2018
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.1
Note A.5
Note B.2
Note B.3
Note B.4
Note D.4
Note E.7
Revenue from contracts with customers
Taxes
Exploration and evaluation
Oil and gas properties
Impairment of oil and gas properties
Provisions
Joint arrangements
Page 108
Page 111
Page 114
Page 115
Page 116
Page 123
Page 129
106 Woodside Petroleum Ltd | Annual Report 2018
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 31 December 2018 NOTES TO THE FINANCIAL STATEMENTS A. EARNINGS FOR THE YEAR
for the year ended 31 December 2018
In 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.
A.1
A.2
A.3
A.4
A.5
Earnings for the year
Segment revenue and expenses
Finance costs
Dividends paid and proposed
Earnings per share
Taxes
Page 108
Page 110
Page 110
Page 110
Page 110
Key financial and capital risks in this section
Commodity price risk management
The Group’s revenue is exposed to commodity price fluctuations. Commodity 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 the 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 Group’s 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 (+12%/-12% (2017: +12%/-12%)), 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 2018.
In order to hedge the foreign exchange risk and interest rate risk (refer to Section C) of a Swiss Franc (CHF) denominated medium-term
note, Woodside holds a number of cross-currency interest rate swaps (refer to Note C.2). The aim of this hedge is to convert the fixed
interest CHF bond into variable interest US dollar debt.
Woodside Petroleum Ltd | Financial Statements 107
NOTES TO THE FINANCIAL STATEMENTS A. EARNINGS FOR THE YEAR
for the year ended 31 December 2018
A.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. The producing operating segments
are consistent with the 2017 Financial Statements. In the reporting
period, the Group’s development projects have been consolidated
into one development segment for internal reporting purposes
which comprises the Browse, Scarborough, Kitimat, Myanmar,
Sunrise and Senegal projects. With the exception of Browse,
which was previously a separate reporting segment, all other
projects were previously included in the other reporting segment.
Comparatives have been restated to reflect the updated operating
segments reported internally.
Management monitors the performance of the operating results
of the segments 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 and liquefied petroleum gas
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
(North West Shelf, Enfield and Vincent).
Wheatstone LNG – Exploration, evaluation, development,
production and sale of liquefied natural gas and condensate in
assigned permit areas.
Development
Development segments – This segment comprises
exploration, evaluation and development of liquefied natural
gas and condensate in the Browse, Scarborough, Kitimat,
Myanmar, Sunrise and Senegal projects.
Other
Other segments – This segment comprises trading and
shipping activities and activities undertaken in other
international locations.
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.
108 Woodside Petroleum Ltd | Annual Report 2018
Major customer information
The Group has two major customers which account for 19% and
14% of the Group’s external revenue. The sales are generated by
the Pluto and North West Shelf operating segments (2017: two
customers; 20% and 15%).
Revenue from external
customers1
Non-current assets2
Restated
20173
US$m
21,178
Oceania
133
Asia
1,349
Canada
598
Africa
5
Other
23,263
Consolidated
1. Revenue is attributable to geographic location based on the location of the customers.
2. Non-current assets exclude deferred tax assets of US$1,179 million
Restated
20173
US$m
334
3,439
11
-
191
3,975
2018
US$m
21,324
192
1,408
558
16
23,498
2018
US$m
286
4,739
5
-
210
5,240
(2017: US$1,125 million).
3. 2017 amounts have been restated for the retrospective application of AASB 15.
Recognition and measurement
Revenue from contracts with customers
Revenue is recognised when or as the Group transfers control of
products or provides services to a customer at the amount to which
the Group expects to be entitled. If the consideration includes a
variable component, the expected consideration is adjusted for
the estimated impact of the variable component at the point of
recognition and re-estimated at every reporting period.
• Revenue from sale of produced hydrocarbons
Revenue from the sale of produced hydrocarbons is recognised
at a point in time when control of the product is transferred to
the customer, which is typically on delivery.
Revenue from take or pay contracts is recognised in earnings when
the product has been drawn by the customer (transfer of control)
and recorded as unearned revenue until drawn by the customer.
• Other operating revenue
Revenue earned from LNG processing and other services is
recognised over time as the services are rendered.
Trading and other hydrocarbon revenue earned from sales
of third-party products is recognised at a point in time when
control of the product is transferred to the customer, which is
typically on delivery.
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.
Key estimates and judgements
Revenue from contracts with customers
Judgment is required to determine the point at which the customer
obtains control of hydrocarbons. Factors including transfer of legal title,
transfer of significant risks and rewards of ownership and the existence
of a present right to payment for the hydrocarbons typically result in
control transferring on delivery of hydrocarbons at port of loading or
port of discharge.
The transaction price at the date control passes for sales made subject to
provisional pricing periods in oil and condensate contracts is determined
with reference to quoted commodity prices.
Progress of performance obligations for LNG processing services
revenue recognised over time is measured using the output method
which most accurately measures the progress towards satisfaction of the
performance obligation of the services provided.
NOTES TO THE FINANCIAL STATEMENTS A. EARNINGS FOR THE YEAR
for the year ended 31 December 2018
A.1 Segment revenue and expenses (cont.)
Producing
Development
Other
North West
Shelf
2018
Pluto
20171
20171
Australia Oil
20171
2018
Consolidated
20171
2018
2018
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
3,761 2,674
8
1,061
153
-
84
422
-
327
391
-
-
Development Other segments
2018
Wheatstone
20171
2018
2,280
-
230
-
1,763
-
146
-
903
142
276
-
420
-
94
-
-
-
-
391
-
-
-
301
89
651
301
-
11
-
-
-
5
-
-
20171
20171
20171
2018
2018
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Unallocated
items
25
43
-
-
-
-
-
1,497
1,364
2,510
1,909
301
391
514
-
-
-
-
-
-
-
-
202
71
-
273
192
36
19
247
1,497
(124)
(211)
(7)
-
-
(342)
(5)
1,364
(132)
(180)
(2)
(1)
-
(315)
(4)
2,783
(157)
-
(14)
(9)
-
(180)
(24)
2,156
(159)
-
(12)
13
-
(158)
(24)
(13)
(247)
(7)
(226)
(44)
(803)
(35)
(744)
-
-
-
-
301
(117)
(7)
(3)
(12)
-
(139)
-
(1)
(53)
-
-
-
-
391
(125)
(7)
(7)
(8)
120
(27)
-
-
-
1
1
515
(62)
-
(1)
(3)
-
(66)
(28)
(3)
(94)
(16)
(190)
-
8
-
-
28
28
36
(15)
-
-
11
-
(4)
(6)
(1)
(17)
(7)
(7)
-
-
-
-
-
-
(272)
(244)
(871)
(803)
(54)
(97)
(234)
(24)
(42)
-
-
(42)
(656)
(15)
826
(56)
-
(110)
(71)
(96)
(34)
-
-
-
(56)
(615)
-
(181)
(20)
(150)
(1,232) (1,111)
-
-
(193)
(18)
731
(5)
1,546
(18)
1,027
20
12
(3)
-
-
(3)
(4)
-
(39)
(43)
(46)
(4)
-
-
(4)
(3)
-
-
(3)
(7)
8
(6)
-
-
(6)
(16)
-
-
(16)
(22)
-
(8)
-
-
(8)
(1)
-
-
(1)
(9)
-
108
12
(2)
-
-
(2)
(1)
-
-
(1)
(3)
-
-
-
-
(124)
-
267
7
(1)
-
-
(1)
-
-
-
-
(1)
(33)
-
(1)
(34)
(334)
(1)
180
13
(1)
-
-
(1)
-
-
-
-
(1)
-
-
(27)
(27)
(55)
-
(19)
1
(2)
-
-
(2)
-
-
-
-
(2)
-
5
-
-
-
-
5
(5)
-
-
-
-
(5)
-
-
-
-
-
-
-
-
-
(5)
-
-
4
-
-
-
-
-
-
-
-
-
-
11
-
-
-
-
11
(11)
-
-
-
-
(11)
-
-
-
-
-
-
-
-
-
(11)
-
-
(3)
-
-
-
-
(1)
-
-
(1)
(1)
-
-
-
139
-
139
139
-
-
-
-
-
-
-
-
-
-
-
-
(151)
-
(151)
(151)
21
9
4
-
-
-
17
-
17
17
-
-
(1)
-
-
(1)
-
-
-
-
-
-
(21)
-
(21)
(22)
36
31
7
-
-
-
-
-
-
-
-
-
(11)
-
-
(11)
-
-
-
-
-
(22)
-
-
(22)
(33)
-
(33)
-
-
-
-
-
-
25
43
4,827 3,683
202
210
1
413
192
53
47
292
-
(1)
-
(1)
-
-
(2)
-
-
-
-
-
(23)
-
-
(23)
(25)
-
(25)
5,240 3,975
(443)
(465)
(187)
(218)
(23)
(36)
15
(24)
120
-
(518)
(743)
(34)
(57)
(74)
(46)
(1,293) (1,081)
(7)
(7)
(1,431) (1,168)
(207)
(222)
(175)
(55)
(1)
(430)
(47)
(277)
(2,604) (1,963)
-
-
2,636 2,012
18
(8)
79
16
(121)
(46)
(94)
(104)
(16)
(58)
(261)
(178)
-
-
-
-
-
-
-
-
(133)
(46)
(94)
(119)
(16)
(58)
(273)
(193)
(4)
(7)
(78)
(87)
(103)
(99)
(1)
-
(5)
(266)
(1)
-
(8)
(186)
(19)
(2)
(99)
(99)
(19)
(2)
(108)
(108)
(20)
(41)
(164)
(437)
(20)
(2)
(121)
(314)
800
736
1,532
1,018
117
273
192
(20)
4
(4)
(253)
(148)
(114)
(141)
2,278 1,714
Liquefied natural gas
Pipeline natural gas
Condensate
Oil
Liquefied petroleum
gas
Revenue from
sale of produced
hydrocarbons
Processing and services
revenue
Trading revenue
Other hydrocarbon
revenue
Other revenue
Operating revenue
from contracts with
customers
Production costs
Royalties and excise
Insurance
Inventory movement
Provision adjustment
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 hydrocarbon
costs
Other cost of sales
Cost of sales
Trading intersegment
adjustments
Gross profit
Other income
Exploration and
evaluation expenditure
Amortisation
Write-offs
Exploration and
evaluation
General, administrative
and other costs
Depreciation of other
plant and equipment
Other2
Other costs
Other expenses
Profit/(loss) before
tax and net finance
costs
1. 2017 amounts have been restated for the retrospective application of AASB 15 and the change of reporting segments.
2. Other comprises impairment losses on non-current assets held for sale as well as other expenses not associated with the ongoing operations of the business.
Woodside Petroleum Ltd | Financial Statements 109
NOTES TO THE FINANCIAL STATEMENTS A. EARNINGS FOR THE YEAR
for the year ended 31 December 2018
A.2 Finance costs
A.5 Taxes
Interest on interest-bearing liabilities
Accretion charge
Other finance costs
Less: Finance costs capitalised against qualifying
assets
2018
US$m
207
42
27
(60)
216
2017
US$m
202
39
20
(167)
94
A.3 Dividends paid and proposed
Woodside Petroleum Ltd, the parent entity, paid and proposed
dividends set out below:
(a) Dividends paid during the financial year
Prior year fully franked final dividend US$0.49,
paid on 22 March 2018 (2017: US$0.49, paid on 29
March 2017)
Current year fully franked interim dividend
US$0.53 paid on 20 September 2018 (2017:
US$0.49, paid on 21 September 2017)
(b) Dividend declared subsequent to the
reporting period (not recorded as a liability)
Final dividend US$0.91 (2017: US$0.49)
(c) Other information
Franking credits available for the subsequent
periods
Current year dividends per share (US cents)
A.4 Earnings per share
Profit attributable to equity holders of the parent
(US$m)
Weighted average number of shares on issue
Basic and diluted earnings per share (US cents)
2018
US$m
2017
US$m
413
496
909
413
413
826
852
413
1,634
144
2,032
98
2018
Restated
2017
1,364
1,069
921,165,018 866,201,877
123.4
148.1
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 on issue during the
year. The weighted average number of shares makes allowance
for shares reserved for employee share plans.
During the period, the Company completed an equity raising of
93,706,646 shares at a discounted price of A$27.00 per share.
As a result of the new shares issued, the weighted average
number of ordinary shares to calculate EPS was adjusted by a
theoretical ex-rights price factor. The adjustment factor of 1.03
was used to restate the weighted average number of ordinary
shares for the EPS calculation for all periods prior to the equity
raising. Equity rights under employee share plans were adjusted
in order to maintain value equivalence, resulting in an additional
53,656 rights under the Woodside Equity Plan and 24,079 rights
under the Executive Incentive Plan.
Performance rights of 9,702,925 (2017: 10,006,241) are considered
to be contingently issuable and have not been allowed for in the
diluted earnings per share calculation.
There have been no transactions involving ordinary shares
between the reporting date and the date of completion of these
financial statements.
110 Woodside Petroleum Ltd | Annual Report 2018
2018
US$m
Restated
2017
US$m
(a) Tax expense comprises
PRRT
Current tax benefit
Deferred tax benefit
PRRT benefit
Income tax
Current year
Current tax expense
Deferred tax expense
Adjustment to prior years
Current tax benefit
Deferred tax (benefit)/expense
Income tax expense
Tax expense
(b) Reconciliation of income tax expense
Profit before tax
PRRT benefit
Profit before income tax
Income tax expense calculated at 30%
Non-deductible items
Foreign expenditure not brought to account
Adjustment to prior years
Foreign exchange impact on tax expense
Income tax expense
(c) Reconciliation of PRRT benefit
Profit before tax
Non-PRRT assessable profits
PRRT projects profit before tax
PRRT benefit calculated at 40%
Augmentation
Other
PRRT benefit
(d) Deferred tax income statement reconciliation
PRRT
Production and growth assets
Augmentation for current year
Provisions
Other
PRRT deferred tax benefit
Income tax
Oil and gas properties
Exploration and evaluation assets
Provisions
PRRT liabilities
Unused tax losses and tax credits
Other
Income tax deferred tax expense
Deferred tax expense
(e) Deferred tax balance sheet reconciliation
Deferred tax assets
PRRT
Production and growth assets
Augmentation for current year
Provisions
Other
(3)
(49)
(52)
426
259
-
(5)
680
628
2,095
52
2,147
644
(1)
51
(5)
(9)
680
2,095
(1,785)
310
124
(190)
14
(52)
189
(190)
(23)
(25)
(49)
97
65
(8)
15
96
(19)
246
197
987
174
21
(3)
1,179
(3)
(133)
(136)
384
189
(3)
31
601
465
1,630
136
1,766
530
2
35
28
6
601
1,630
(1,577)
53
21
(183)
26
(136)
(49)
(183)
105
(6)
(133)
198
9
39
39
(50)
(23)
212
79
933
178
24
(10)
1,125
NOTES TO THE FINANCIAL STATEMENTS A. EARNINGS FOR THE YEAR
for the year ended 31 December 2018
Restated
2017
US$m
2018
US$m
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.
A.5 Taxes (cont.)
(e) Deferred tax balance sheet reconciliation (cont.)
Deferred tax liabilities
PRRT
Production and growth assets
Augmentation for current year
Provisions
Other
Income tax
Oil and gas properties
Exploration and evaluation assets
Provisions
PRRT liabilities
Unused tax losses and tax credits
Other1
(f) Tax payable reconciliation
Income tax payable
(g) Effective income tax rate: Australian and global
operations
Effective income tax rate2
Australia
Global
(h) Current year income tax expense reconciliation
Profit before income tax
Income tax at the statutory tax rate of 30%
Non-temporary differences3,4
Temporary differences: deferred tax4
Current year income tax expense
523
(16)
(155)
(7)
1,733
373
(493)
251
(73)
(74)
2,062
463
(5)
(129)
11
1,636
308
(485)
236
(169)
(55)
1,811
(74)
(74)
(61)
(61)
29.4%
31.7%
31.4%
34.0%
2,147
644
49
(258)
435
1,766
530
37
(189)
378
1. US$4 million (2017: US$8 million) movement recognised in other comprehensive
income.
2. The global operations effective income tax rate (ETR) is calculated as the Group’s
income tax expense divided by profit before income tax. The Australian operations
ETR is calculated with reference to all Australian companies and excludes foreign
exchange impact on tax expense.
3. Primarily expenditure in respect of foreign operations. Excludes foreign exchange
impact on tax expense.
4. Excludes adjustment to prior years.
Tax transparency code
Woodside participates in the Australian Board of Taxation’s
voluntary Tax Transparency Code (TTC). To increase public
confidence in the contributions and compliance of corporate
taxpayers, the TTC recommends public disclosure of tax
information. Woodside has addressed the recommended
disclosures in two parts. The Part A disclosures are addressed
within this Taxes note; the Part B disclosures are addressed in our
Sustainable Development Report.
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.
With the exception of those noted below, 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.
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
Australian tax losses: A deferred tax asset of US$73 million
(2017: US$169 million) has been recognised from carry forward unused
tax losses and credits. The Group has determined that it is probable that
sufficient future taxable income will be available to utilise those losses
and credits.
Foreign tax losses: Deferred tax assets of US$399 million
(2017: US$403 million) relating to unused foreign tax losses have not
been recognised on the basis that it is not probable that the assets will be
utilised based on current planned activities in those regions.
PRRT: Certain deferred tax assets on 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$3,792 million (2017: US$3,722 million)
relates to the North West Shelf Project, US$589 million (2017: US$501
million) relates to the quarantined exploration spend of the Pluto Project
and US$767 million (2017: US$680 million) relates to the Wheatstone
Project. Future taxable profits were determined using a long-term bond
rate of 2.8% (2017: 2.5%) for the purposes of augmentation.
Had an alternative approach been used to assess recovery of the
deferred tax assets, whereby future augmentation was not included in
the assessment, the additional deferred tax assets would be recognised,
with a corresponding benefit to income tax expense. It was determined
that the approach adopted provides the most meaningful information
on the implications of the PRRT regime, whilst ensuring compliance with
AASB 112 Income Taxes.
Woodside Petroleum Ltd | Financial Statements 111
NOTES TO THE FINANCIAL STATEMENTS B. PRODUCTION AND GROWTH ASSETS
for the year ended 31 December 2018
In this section
This section addresses the strategic growth (exploration and evaluation) and core producing (oil and gas properties) assets position
of the Group at the end of the reporting period including, where applicable, the accounting policies applied and the key estimates and
judgements made. The section also includes the impairment position of the Group at the end of the reporting period.
B.
B.1
B.2
B.3
B.4
B.5
Production and growth assets
Segment production and growth assets
Exploration and evaluation
Oil and gas properties
Impairment of oil and gas properties
Significant production and growth asset acquisitions
Page 113
Page 114
Page 115
Page 116
Page 116
112 Woodside Petroleum Ltd | Annual Report 2018
NOTES TO THE FINANCIAL STATEMENTS B. PRODUCTION AND GROWTH ASSETS
for the year ended 31 December 2018
B.1 Segment production and growth assets
Producing
Development
Other
North West
Shelf
Consolidated
2017
2018
2018
US$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
Australia Oil Wheatstone Development
20172
2018
20172
Pluto
2018
2018
2018
2018
2017
2017
2017
2017
Other
segments
Balance as at 31 December
Oceania
Asia
Canada
Africa
Other
Total exploration and evaluation
Balance as at 31 December
Land and buildings
Transferred exploration and evaluation
Plant and equipment
Marine vessels and carriers
Projects in development
Total oil and gas properties
Additions to exploration and evaluation:
Exploration
Evaluation
Restoration
Additions to oil and gas properties:
Oil and gas properties additions
Capitalised borrowing costs additions1
Restoration
16
-
-
-
-
16
16
-
-
-
-
16
464
-
-
-
-
464
402
-
-
-
-
402
21
-
-
-
-
21
21
-
-
-
-
21
18
-
-
-
-
18
832
7 1,324
-
-
-
1,408 1,348
-
537
-
563
-
-
-
7 3,295 2,717
19
106
412
289
436
333
9,428 10,222
-
24
69
2,262 2,263
115
268
-
11
339
-
-
62 1,172
166
2,519 2,739 10,295 11,053 1,522
59
73
-
12
661
668
235
219
409 3,428 3,190
7
-
7
568
520
219
989 4,541 4,613
-
-
-
-
-
-
-
-
-
-
-
-
159
192
-
-
15
366
1
-
3
-
-
4
169
133
-
61
4
367
2,002
192
1,408
563
15
4,180
1,447
133
1,348
598
4
3,530
1,100
625
1,122
1
-
649
3 15,460 16,087
-
122
66
-
1,418
1,630
4 18,881 19,398
-
-
-
-
-
-
-
-
129
7
(35)
101
171
8
36
215
58
9
(1)
66
110
-
(1)
109
1
10
(5)
6
22
-
18
40
-
-
-
-
-
-
-
-
-
11
-
11
-
7
-
7
-
580
(2)
578
29
139
2
170
99
40
-
139
150
43
-
193
483
28
76
587
286
9
1
296
144
21
(3)
162
480
150
21
651
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
157
640
(3)
794
866
56
37
959
180
199
(3)
376
959
167
76
1,202
1. Borrowing costs capitalised were at a weighted average interest rate of 4.4% (2017: 4.0%).
2. 2017 amounts have been restated for the change of reporting segments detailed in Note A.1.
Refer to Note A.1 for descriptions of the Group’s segments and geographical regions.
Woodside Petroleum Ltd | Financial Statements 113
NOTES TO THE FINANCIAL STATEMENTS B. PRODUCTION AND GROWTH ASSETS
for the year ended 31 December 2018
B.2 Exploration and evaluation
Year ended 31 December 2018
Carrying amount at 1 January 2018
Additions
Amortisation of licence acquisition costs
Expensed1
Transferred exploration and evaluation
Carrying amount at 31 December 2018
Year ended 31 December 2017
Carrying amount at 1 January 2017
Additions
Amortisation of licence acquisition costs
Expensed1
Carrying amount at 31 December 2017
Exploration commitments
Year ended 31 December 2018
Year ended 31 December 2017
Oceania
US$m
Asia
US$m
Canada
US$m
Africa
US$m
Other
US$m
1,447
570
(11)
-
(4)
2,002
1,392
90
(2)
(33)
1,447
33
82
133
76
(4)
(13)
-
192
61
89
(1)
(16)
133
35
63
1,348
60
-
-
-
1,408
1,284
64
-
-
1,348
-
21
598
74
(28)
(81)
-
563
486
132
(11)
(9)
598
3
93
4
14
(3)
-
-
15
5
1
(2)
-
4
36
16
Total
US$m
3,530
794
(46)
(94)
(4)
4,180
3,228
376
(16)
(58)
3,530
107
275
1. $94 million of exploration and evaluation expensed relates to unsuccessful wells written off during the period (2017: $58 million).
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 based on a geographical area. 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, because an assessment of the existence or otherwise of
economically recoverable reserves is not yet complete; 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.
The costs of acquiring interests in new exploration and evaluation
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 statements.
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.
114 Woodside Petroleum Ltd | Annual Report 2018
NOTES TO THE FINANCIAL STATEMENTS B. PRODUCTION AND GROWTH ASSETS
for the year ended 31 December 2018
B.3 Oil and gas properties
Year ended 31 December 2018
Carrying amount at 1 January 2018
Additions
Depreciation and amortisation
Impairment loss
Completions and transfers
Carrying amount at 31 December 2018
At 31 December 2018
Historical cost
Accumulated depreciation and impairment
Net carrying amount
Year ended 31 December 2017
Carrying amount at 1 January 2017
Additions
Depreciation and amortisation
Completions and transfers
Carrying amount at 31 December 2017
At 31 December 2017
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
1,122
-
(57)
-
35
1,100
1,694
(594)
1,100
489
-
(34)
667
1,122
1,903
(781)
1,122
649
-
(74)
-
50
625
1,143
(518)
625
425
-
(46)
270
649
1,093
(444)
649
16,087
(56)
(1,293)
-
722
15,460
29,167
(13,707)
15,460
13,981
39
(1,093)
3,160
16,087
28,450
(12,363)
16,087
122
-
(7)
(39)
(10)
66
306
(240)
66
122
-
(7)
7
122
316
(194)
122
1,418
1,015
-
-
(803)
1,630
1,701
(71)
1,630
4,359
1,163
-
(4,104)
1,418
1,530
(112)
1,418
Total
US$m
19,398
959
(1,431)
(39)
(6)
18,881
34,011
(15,130)
18,881
19,376
1,202
(1,180)
-
19,398
33,292
(13,894)
19,398
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 exploration and evaluation and offshore plant and
equipment are depreciated using the unit of production basis
over proved plus probable reserves or proved reserves for late
life assets. 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;
• Other plant and equipment –
• Marine vessels and carriers –
5-15 years; and
10-40 years;
• 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 statements of US$331 million
(2017: US$535 million).
Key estimates and judgements
Reserves
The estimations of reserves requires 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 asset’s carrying value.
For more information regarding reserve assumptions, refer to the
reserves and resources statement on pages 64–67 of the
Annual Report.
Depreciation and amortisation
Judgment is required in determing the commencement of
depreciation and amortisation for an asset and is at the point that the
project is ready for start up.
Woodside Petroleum Ltd | Financial Statements 115
NOTES TO THE FINANCIAL STATEMENTS B. PRODUCTION AND GROWTH ASSETS
for the year ended 31 December 2018
B.4 Impairment of oil and gas properties
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
or impairment reversal for those assets which have previously
been impaired. Indicators of impairment and impairment reversals
include changes in future selling prices, future costs and reserves.
Oil and gas properties are assessed for impairment indicators and
impairments on a cash generating unit (CGU) basis. CGUs are
determined as a floating production, storage and off-take vessel
and associated oil fields for an oil asset and an LNG plant and
associated gas fields for a gas asset.
If there is an indicator of impairment or impairment reversal for
a CGU then the recoverable amount is calculated.
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.
For assets previously impaired, if the recoverable amount exceeds
the 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.
Recognised impairment and impairment reversal
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 two LNG vessels in the North West Shelf
operating segment resulted in an impairment loss of US$39 million
as the assets’ carrying value exceeded the fair value less costs of
disposal. The fair value less costs of disposal was determined using
in-principle sales agreements, classified as Level 3 on the fair value
hierarchy. Refer to Note D.7 for further details.
No other indicators of impairment or impairment reversal were
identified in 2017 or 2018.
Key estimates are disclosed in the ‘Key estimates and
judgements’ section.
116 Woodside Petroleum Ltd | Annual Report 2018
Key estimates and judgements
Impairment and impairment reversal indicator key
assumptions
In determining whether there is an indicator of impairment or
impairment reversal, the Group considers whether there has been a
significant change in the following external and internal qualitative
factors:
• Commodity prices - LNG, natural gas and oil.
• Economic factors - interest rates, inflation rates, foreign exchange
rates and discount rates.
• Operating performance of an asset.
• Reserve and resource estimates.
• Project concept / planned use of assets.
• Forecast project expenditure.
B.5 Significant production and growth
asset acquisitions
On 29 March 2018, Woodside completed the acquisition of
ExxonMobil’s 50% interest in WA-1-R, which contains the
Scarborough gas field, for an aggregate purchase price of
US$444 million. The transaction was accounted for as an asset
acquisition. An additional US$300 million payment due to
ExxonMobil is contingent on a positive final investment decision to
develop the Scarborough field. In conjunction with the transaction,
Woodside granted BHP Billiton an option to purchase an
additional 10% interest in the Scarborough gas field on equivalent
consideration terms to the transaction with ExxonMobil.
In addition to the contingent payment above, a US$150 million
payment is due to BHP Billiton contingent on a positive final
investment decision to develop the Scarborough field.
Both contingent payments associated with acquiring the
Scarborough development are accounted for as contingent
liabilities in accordance with the Group’s accounting policies.
Woodside now holds the following interest in Joint Operations
relating to the Scarborough development:
• a 75% interest in WA-1-R and a 50% interest in WA-62-R, which
together contain the Scarborough gas field;
• a 50% interest in WA-61-R which contains the Jupiter gas field;
and
• a 50% interest in WA-63-R which contains the Thebe gas field.
Assets acquired and liabilities assumed
The identifiable assets and liabilities acquired as at the date of the
acquisition inclusive of transaction costs were:
Exploration and evaluation assets
Total identifiable net assets at acquisition
Cash flows on acquisition
Purchase cash consideration
Transaction costs1
Total purchase consideration
Net cash outflows on acquisition
1. Transaction costs were less than US$0.5 million.
Scarborough
US$m
444
444
Scarborough
US$m
444
-
444
444
NOTES TO THE FINANCIAL STATEMENTS C. DEBT AND CAPITAL
for the year ended 31 December 2018
In this section
This section addresses cash, debt and the 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.
C.1
C.2
C.3
C.4
Debt and capital
Cash and cash equivalents
Interest-bearing liabilities and financing facilities
Contributed equity
Other reserves
Page 118
Page 118
Page 119
Page 120
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 shareholders at the Annual General Meeting in 2003 for activation as required to
fund future growth. The DRP has not been utilised since the fully underwritten 2015 final dividend.
A range of financial metrics are monitored, including gearing and cash flow leverage, and Treasury policy breaches and exceptions.
Liquidity risk management
Liquidity risk arises from the 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 2018, the Group has a total of US$3,918 million (2017: US$2,942 million) of 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 are disclosed in Note D.3. Financing facilities available to the Group are disclosed in Note C.2.
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, cash and short-term deposits. The Group manages 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. The Group holds cross-currency interest rate swaps to hedge the foreign exchange risk (refer to Section A) and interest rate risk of
the CHF denominated medium term note.
At the reporting date, the Group was exposed to various benchmark interest rates that were not designated in cash flow hedges,
US$1,536 million (2017: US$84 million) on cash and cash equivalents, US$617 million (2017: US$1,020 million) on interest-bearing liabilities
(excluding transaction costs) and US$12 million (2017: US$11 million) on cross-currency interest rate swaps.
A reasonably possible change in the USD London Interbank Offered Rate (LIBOR) (+1.0%/-1.0% (2017: +1.0%/-1.0%)), with all variables held
constant, would not have a material impact on the Group’s equity or the income statement in the current period.
Woodside Petroleum Ltd | Financial Statements 117
NOTES TO THE FINANCIAL STATEMENTS C. DEBT AND CAPITAL
for the year ended 31 December 2018
C.1 Cash and cash equivalents
Cash and cash equivalents
Cash at bank
Term deposits
Total cash and cash equivalents
2018
US$m
214
1,460
1,674
2017
US$m
318
-
318
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.
Foreign exchange risk
The Group held US$64 million of cash and cash equivalents at
31 December 2018 (2017: US$73 million) in currencies other
than US dollars.
C.2 Interest-bearing liabilities and financing facilities
Year ended 31 December 2018
At 1 January 2018
Repayments
Fair value adjustment and foreign exchange movement
Transaction costs capitalised and amortised
Carrying value at 31 December 2018
Current
Non-current
Carrying value at 31 December 2018
Undrawn balance at 31 December 2018
Year ended 31 December 2017
At 1 January 2017
Repayments
Drawdowns
Fair value adjustment and foreign exchange movement
Transaction costs capitalised and amortised
Carrying value at 31 December 2017
Current
Non-current
Carrying value at 31 December 2017
Undrawn balance at 31 December 2017
Bilateral
Facilities
US$m
Syndicated
Facilities
US$m
JBIC
Facility
US$m
US Bonds
US$m
Medium Term
Notes
US$m
316
(320)
-
2
(2)
(1)
(1)
(2)
1,444
244
(1,350)
1,420
-
2
316
(2)
318
316
1,824
(3)
-
-
2
(1)
(1)
-
(1)
800
696
(700)
-
-
1
(3)
(1)
(2)
(3)
800
500
(83)
-
-
417
83
334
417
-
583
(83)
-
-
-
500
83
417
500
-
3,880
(600)
-
4
3,284
(2)
3,286
3,284
-
3,084
-
800
-
(4)
3,880
(4)
3,884
3,880
-
372
-
1
-
373
-
373
373
-
366
-
-
7
(1)
372
-
372
372
-
Total
US$m
5,065
(1,003)
1
8
4,071
79
3,992
4,071
2,244
4,973
(2,133)
2,220
7
(2)
5,065
76
4,989
5,065
2,624
Recognition and measurement
All 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.
Borrowings designated as a hedged item are measured at amortised
cost adjusted to record changes in the fair value of risks that are
being hedged in fair value hedges. The changes in the fair value risks
of the hedged item resulted in a loss of US$1 million being recorded
(2017: loss of US$7 million), and a loss of US$1 million recorded on
the hedging instrument (2017: gain of US$6 million).
All bonds, notes 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,
excluding the CHF175 million medium term note.
Fair value
The carrying amount of interest-bearing liabilities approximates
their fair value, with the exception of the Group’s unsecured
bonds and the medium term notes. The unsecured bonds have
a carrying amount of US$3,284 million (2017: US$3,880 million)
and a fair value of US$3,167 million (2017: US$3,985 million).
The medium term notes have a carrying amount of US$373 million
(2017: US$372 million) and a fair value of US$388 million
(2017: US$399 million). The fair value of the bonds and notes
was determined using quoted prices in an active market,
classified as Level 1 on the fair value hierarchy. The Group’s
repayment obligations remain unchanged.
118 Woodside Petroleum Ltd | Annual Report 2018
NOTES TO THE FINANCIAL STATEMENTS C. DEBT AND CAPITAL
for the year ended 31 December 2018
C.2 Interest-bearing liabilities and
financing facilities (cont.)
Maturity profile of interest-bearing liabilities
The table below presents the contractual undiscounted cash
flows associated with the Group’s interest-bearing liabilities,
representing principal and interest. The figures will not necessarily
reconcile with the amounts disclosed in the consolidated
statement of financial position.
2018
US$m
235
233
914
388
359
2,876
5,005
2017
US$m
289
1,144
267
910
390
3,237
6,237
Due for payment in:
1 year or less
1-2 years
2-3 years
3-4 years
4-5 years
More than 5 years
Amounts exclude transaction costs.
Bilateral facilities
The Group has 14 bilateral loan facilities totalling US$1,444 million
(2017: US$2,144 million). Details of bilateral loan facilities at the
reporting date are as follows:
Number of
facilities
7
1
6
Term (years)
Currency
Extension option
5
4
3
USD
USD
USD
Evergreen
Evergreen
Evergreen
Interest rates are based on USD 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.
Syndicated facility
On 3 July 2015, the Group executed an unsecured US$1,000 million
syndicated loan facility, which was increased to US$1,200 million
on 22 March 2016. On 15 November 2017, Woodside amended the
existing facility to a US$800 million facility comprising two equal
tranches, which now expire in July 2020 and July 2022. Interest
rates are based on USD LIBOR plus 0.9% and USD LIBOR plus
1.15% respectively. Interest is paid at the end of each
drawdown period.
Japan Bank for International Cooperation (JBIC) facility
On 24 June 2008, the Group entered into a two tranche
committed loan facility of US$1,000 million and US$500 million
respectively. The US$500 million tranche was repaid in 2013.
There is a prepayment option for the remaining balance. 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).
Under this 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.
Medium term notes
On 28 August 2015, the Group established a US$3,000 million
Global Medium Term Notes Programme listed on the Singapore
Stock Exchange. Two notes have been issued under this program
as set out below:
Maturity date
Currency
15 July 2022
11 December 2023
USD
CHF
Carrying amount
(million)
Nominal interest
rate
200
175
Floating three
month USD LIBOR
1%
The unutilised program is not considered to be an unused facility.
US Bonds
The Group has four unsecured bonds issued in the United States
of America as defined in Rule 144A of the US Securities Act of 1933
as set out below:
Maturity date
10 May 2021
5 March 2025
15 September 2026
15 March 2028
Carrying amount
US$m
Nominal interest rate
700
1,000
800
800
4.60%
3.65%
3.70%
3.70%
Interest on the bonds is payable semi-annually in arrears.
C.3 Contributed equity
Recognition and measurement
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.
(a) Issued and fully paid shares
Number of
shares
Year ended 31 December 2018
Opening balance
Equity raising - ordinary shares issued at A$27.00
Share issue costs (net of tax)
Amounts as at 31 December 2018
842,444,903
93,706,646
-
936,151,549
US$m
6,919
1,989
(28)
8,880
Year ended 31 December 2017
Opening and closing balance
842,444,903
6,919
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 relation to its issued shares.
Woodside Petroleum Ltd | Financial Statements 119
NOTES TO THE FINANCIAL STATEMENTS C. DEBT AND CAPITAL
for the year ended 31 December 2018
C.3 Contributed equity (cont.)
(b) Shares reserved for employee share plans
Year ended 31 December 2018
Opening balance
Purchases during the year
Vested during the year
Amounts at 31 December 2018
Year ended 31 December 2017
Opening balance
Purchases during the year
Vested during the year
Amounts at 31 December 2017
C.4 Other reserves
Other reserves
Employee benefits reserve
Foreign currency translation reserve
Hedging reserves
Number of
shares
US$m
1,248,510
2,143,577
(2,261,983)
1,130,104
1,151,175
1,962,899
(1,865,564)
1,248,510
(35)
(56)
60
(31)
(30)
(47)
42
(35)
2018
US$m
2017
US$m
206
793
(14)
985
218
793
(14)
997
Reserve
Nature and purpose
Employee benefits reserve Used to record share-based payments
associated with the employee share plans and
remeasurement adjustments relating to the
defined benefit plan.
Foreign currency
translation reserve
Hedging reserve
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 gains and losses on hedges
designated as cash flow hedges and foreign
currency basis spread arising from the designation
of a financial instrument as a hedging instrument.
Gains and losses accumulated in the cash flow
hedge reserve are taken to the income statement
in the same period during which the hedged
expected cash flows affect the income statement.
120 Woodside Petroleum Ltd | Annual Report 2018
NOTES TO THE FINANCIAL STATEMENTS D. OTHER ASSETS AND LIABILITIES
for the year ended 31 December 2018
In this section
This section addresses the 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.
D.1
D.2
D.3
D.4
D.5
D.6
D.7
Other assets and liabilities
Receivables
Inventories
Payables
Provisions
Page 122
Page 122
Page 122
Page 123
Other financial assets and liabilities
Page 124
Segment assets and liabilities
Non-current assets held for sale
Page 124
Page 125
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.
Customer credit risk is managed by each business unit subject to the Group’s established policy, procedures and controls relating to
customer credit risk management. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual
credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored. At 31 December
2018, the Group had 7 customers (2017: 6 customers) that owed the Group more than $10 million each and accounted for approximately
90% (2017: 85%) of all the receivables. Payment terms are typically 14 to 30 days providing only a short credit exposure.
At 31 December 2018, the Group had a provision for credit losses of nil (2017: nil). Subsequent to 31 December 2018, 100% (2017: 100%) of
the trade receivables balance of $266 million (2017: $214 million) has been received.
Credit risk from balances with banks is managed by the Group’s treasury department in accordance with the Group’s policy. The Group's
main funds are placed as short term deposits with reputable financial institutions with strong investment grade credit ratings.
The Group’s maximum exposure to credit risk for the components of the statement of financial position at 31 December 2018 and 2017 is
the carrying amounts as illustrated in this Note D.
Woodside Petroleum Ltd | Financial Statements 121
NOTES TO THE FINANCIAL STATEMENTS D. OTHER ASSETS AND LIABILITIES
for the year ended 31 December 2018
D.1 Receivables
D.2 Inventories
Inventories
Petroleum products
Goods in transit
Finished stocks
Warehouse stores and materials
2018
US$m
2017
US$m
17
38
100
155
31
51
104
186
Recognition and measurement
Inventories include hydrocarbon stocks, consumable supplies
and maintenance spares. Inventories are valued at the lower of
cost and net realisable value. Cost is determined on a weighted
average basis and includes direct costs and an appropriate portion
of fixed and variable production overheads where applicable.
Inventories determined to be obsolete or damaged are written
down to net realisable value, being the estimated selling price less
selling costs.
D.3 Payables
The following table shows the Group’s payables balances and
maturity analysis.
< 30
days
30-60
days
Total
US$m US$m US$m US$m
> 60
days
Year ended 31 December 2018
Trade payables1
Other payables1
Interest payable2
Total payables
Year ended 31 December 2017 (restated3)
Trade payables1
Other payables1 (restated3)
Interest payable2
Total payables (restated3)
150
332
6
488
139
322
7
468
-
-
-
-
28
1
-
29
62
-
36
98
70
26
52
148
212
332
42
586
237
349
59
645
1. Interest-free and normally settled on 30-day terms.
2. Details regarding interest-bearing liabilities are contained in Note C.2.
3. 2017 amounts have been restated for the restrospective application of AASB 15.
Recognition and measurement
Trade and other payables are carried at amortised cost and are
recognised 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$360 million of payables at 31 December
2018 (2017: US$380 million) in currencies other than US dollars
(predominantly Australian dollars).
(a) Receivables (current)
Trade receivables1 (restated3)
Other receivables1 (restated3)
Loans receivables2
Interest receivable
Dividend receivable
(b) Receivables (non-current)
Loans receivables2
Defined benefit plan asset
Restated
20173
US$m
2018
US$m
266
131
84
4
2
487
193
15
208
214
103
87
-
2
406
141
14
155
1. Interest-free and settlement terms are usually between 14 and 30 days.
2. Loans receivables are due from non-controlling interests.
3. 2017 amounts have been restated for the restrospective application of AASB 15.
Recognition and measurement
Most trade and other receivables, including receivables from
related parties, are initially recognised at fair value or transaction
price determined under AASB 15 and subsequently measured
at amortised cost less an allowance for uncollectable amounts.
Uncollectable amounts are determined using the expected loss
impairment model. 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. Certain receivables that do not satisfy the contractual
cash flow and business model tests are subsequently measured at
fair value (refer to Note D.5).
The Group’s customers are required to pay in accordance with
agreed payment terms. Depending on the product, settlement
terms are 14 to 30 days from the date of invoice or bill of lading
and customers regularly pay on time. There are no significant
overdue trade receivables as at the end of the reporting
period (2017: nil).
Fair value
The carrying amount of trade and other receivables approximates
their fair value.
Foreign exchange risk
The Group held US$74 million of receivables at 31 December
2018 (2017: US$113 million) in currencies other than US dollars
(predominantly Australian dollars).
122 Woodside Petroleum Ltd | Annual Report 2018
NOTES TO THE FINANCIAL STATEMENTS D. OTHER ASSETS AND LIABILITIES
for the year ended 31 December 2018
D.4 Provisions
Restoration
of operating
locations
US$m
Employee
benefits
US$m
Other
US$m
Total
US$m
Year ended 31 December 2018
At 1 January 2018
Change in provision
Unwinding of present value
discount
Carrying amount at 31
December 2018
Current
Non-current
Net carrying amount
Year ended 31 December 2017
At 1 January 2017
Change in provision
Unwinding of present value
discount
Carrying amount at 31
December 2017
Current
Non-current
Net carrying amount
1,524
8
40
1,572
13
1,559
1,572
1,442
45
37
1,524
17
1,507
1,524
177
(6)
-
171
147
24
171
155
22
-
177
148
29
177
66
(11)
1,767
(9)
-
55
55
-
55
40
1,798
215
1,583
1,798
166
(100)
1,763
(33)
-
66
55
11
66
37
1,767
220
1,547
1,767
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.
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.
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 58% (2017: 63%).
(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 uses
judgement to determine key assumptions used in the calculation
including future increases in salaries and wages, future on-cost rates
and future settlement dates of employees’ departures.
(c) Legal case outcomes
Provisions for legal cases are measured at the present value of the
amount expected to settle the claim. Management is required to
use judgement when assessing the likely outcome of legal cases,
estimating the risked amount and whether a provision or contingent
liability should be recognised.
Woodside Petroleum Ltd | Financial Statements 123
NOTES TO THE FINANCIAL STATEMENTS D. OTHER ASSETS AND LIABILITIES
for the year ended 31 December 2018
D.5 Other financial assets and liabilities
D.6 Segment assets and liabilities
Other financial assets
Other financial assets at fair value through profit
and loss
Other financial assets
Total other financial assets
Current
Non-current
Net carrying amount
Other financial liabilities
Financial instruments at fair value through profit
and loss
Derivative financial instruments designated as
hedges
Other financial liabilities at fair value through
profit and loss
Other financial liabilities
Total other financial liabilities
Current
Non-current
Net carrying amount
Recognition and measurement
Other financial assets and liabilities
2018
US$m
Restated
2017
US$m
84
84
54
30
84
12
56
68
48
20
68
105
105
74
31
105
11
22
33
11
22
33
(a) Segment assets
NWS
Pluto
Australia Oil
Wheatstone
Development
Other segments
Unallocated items
(b) Segment liabilities
NWS
Pluto
Australia Oil
Wheatstone
Development
Other segments
Unallocated items
2018
US$m
2,672
11,292
1,581
4,706
3,310
414
3,113
27,088
2018
US$m
572
497
683
222
110
65
6,617
8,766
Restated
2017
US$m
2,988
11,858
1,084
4,663
2,750
422
1,634
25,399
Restated
2017
US$m
602
432
646
186
127
69
7,426
9,488
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.
Other financial assets and liabilities, including sales contracts
containing provisional pricing features, are initially recognised at
fair value on the date the contract is entered into and subsequent
fair value movements are recognised in the income statement.
Derivative financial instruments
Derivative financial instruments that are designated within
qualifying hedge relationships are initially recognised at fair
value on the date the contract is entered into. For relationships
designated as fair value hedges, subsequent fair value movements
of the derivative are recognised in the income statement. For
relationships designated as cash flow hedges, subsequent fair
value movements of the derivative for the effective portion of
the hedge are recognised in other comprehensive income and
accumulated in reserves in equity; fair value movements for the
ineffective portion are recognised immediately in the income
statement. Costs of hedging have been separated from the
hedging arrangements and deferred to other comprehensive
income and accumulated in reserves in equity. Amounts
accumulated in equity are reclassified to profit or loss in the
periods when the hedged item affects profit or loss.
Fair value
The carrying amount of all other financial assets and liabilities
approximates their fair values.
Foreign exchange
The Group had no material other financial assets and liabilities
denominated in currencies other than US dollars.
124 Woodside Petroleum Ltd | Annual Report 2018
NOTES TO THE FINANCIAL STATEMENTS D. OTHER ASSETS AND LIABILITIES
for the year ended 31 December 2018
D.7 Non-current assets held for sale
In December 2018, the partners of the North West Shelf joint
operation committed to sell two LNG vessels for a total price of
US$60 million. Woodside’s share is US$10 million.
Accordingly, the LNG vessels within the North West Shelf
operating segment have been reclassified as non-current assets
held for sale. The sale of each LNG vessel is subject to a number
of conditions precedent and is expected to complete in 2019.
Impairment relating to the non-current assets held for sale
Immediately before the classification of the LNG vessels as
non-current assets held for sale, the recoverable amount was
estimated for the LNG vessels within oil and gas properties and
an impairment of US$39 million was recognised (Note B.4).
Assets and liabilities of the non-current assets held for sale
At 31 December 2018, the LNG vessels have been classified as
non-current assets held for sale for US$10 million. No liabilities
are associated with the LNG vessels classified as held for sale.
Recognition and measurement
The Group classifies non-current assets as held for sale if their
carrying amounts will be recovered principally through sale
rather than through continuing use. Such non-current assets
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 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.
Woodside Petroleum Ltd | Financial Statements 125
NOTES TO THE FINANCIAL STATEMENTS E. OTHER ITEMS
for the year ended 31 December 2018
In this section
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.
E.1
E.2
E.3
E.4
E.5
E.6
E.7
E.8
E.9
Other items
Contingent liabilities and assets
Leases
Employee benefits
Related party transactions
Auditor remuneration
Events after the end of the reporting period
Joint arrangements
Parent entity information
Subsidiaries
E.10
Other accounting policies
Page 127
Page 127
Page 127
Page 129
Page 129
Page 129
Page 129
Page 130
Page 131
Page 133
126 Woodside Petroleum Ltd | Annual Report 2018
NOTES TO THE FINANCIAL STATEMENTS E. OTHER ITEMS
for the year ended 31 December 2018
E.1 Contingent liabilities and assets
E.3 Employee benefits
2018
US$m
2017
US$m
(a) Employee benefits
Employee benefits for the reporting period are as follows:
Contingent liabilities at reporting date
Not otherwise provided for or disclosed in the
financial statements:
Contingent liabilities
Guarantees
73
7
80
66
8
74
Employee benefits
Share-based payments
Defined contribution plan costs
Defined benefit plan expense
2018
US$m
282
21
33
2
338
2017
US$m
285
21
33
2
341
Contingent liabilities relate predominantly to actual or potential
claims on the Group for which amounts are reasonably estimated
but the liability is not probable and therefore the Group has
not provided for such amounts in these financial statements.
Additionally, there are a number of other claims and possible
claims that have arisen in the course of business against entities
in the Group, the outcome of which cannot be foreseen at present
and for which no amounts have been included in the table above.
E.2 Leases
Operating lease commitments
Rents payable on non-cancellable operating
leases, due:
Within one year
After one year but not more than five years
Later than five years
2018
US$m
2017
US$m
189
625
1,198
2,012
207
518
953
1,678
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 vessels,
helicopters, 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$242 million during
the year (2017: US$227 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.
Recognition and measurement
The Group’s accounting policy for employee benefits other than
superannuation is 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 net defined
benefit plan asset at 31 December 2018 was US$15 million
(2017: US$14 million).
(b) Compensation of key management personnel
Key management personnel (KMP) compensation for the financial
year was as follows:
Short-term employee benefits
Post employment benefits
Share-based payments
Long-term employee benefits
Termination benefits
(c) Share plans
2018
US$
8,674,034
92,068
8,645,740
178,745
174,047
17,764,634
2017
US$
10,039,832
227,786
5,663,860
97,305
276,622
16,305,405
The Group provides benefits to its employees (including KMP) 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)
The WEP is available to all permanent employees, but since
1 January 2018 has excluded EIS participants. 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.
Woodside Petroleum Ltd | Financial Statements 127
NOTES TO THE FINANCIAL STATEMENTS E. OTHER ITEMS
for the year ended 31 December 2018
E.3 Employee benefits (cont.)
Executive incentive plans (EIP)
Short-term awards (STA)
The STA are delivered in the form of restricted shares to
executives, including all executive KMP. Restricted shares
entitle their holders 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 are granted in the form of Variable Pay Rights (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.
Participants are not required to make any payments in respect of
LTA awards at grant or at vesting.
Executive incentive scheme (EIS)
The EIS was introduced for the 2018 performance year for all
excutives including executive KMP. The EIS is delivered in the
form of a cash incentive, restricted shares and performance rights.
The grant date of the restricted shares and performance rights
has been determined to be subsequent to the performance year,
being the date of the Board of Directors' approval (13 February
2019). Accordingly, restricted shares and perfomance rights
have not been included in the table below as they have not been
granted as at 31 December 2018. An expense related to the 2018
performance year has been estimated for restricted shares and
performance rights, using fair value estimates based on inputs at
31 December 2018.
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 and SWEP is
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 VPRs 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 2018
Opening balance
Granted during the year1,2
Vested during the year
Forfeited during the year
Performance rights at 31 December 2018
Fair value of rights granted during the year
Year ended 31 December 2017
Opening balance
Granted during the year
Vested during the year1,2
Forfeited during the year
Performance rights at 31 December 2017
Fair value of rights granted during the year
Number of performance rights
Employee plans
Executive plans
WEP
SWEP
STA
LTA
5,789,008
2,552,041
(1,710,458)
(305,227)
6,325,364
US$m
62
17,500
178
-
-
17,678
US$m
-
934,148
167,879
(271,997)
(16,062)
813,968
US$m
4
3,265,585
61,127
(279,528)
(501,269)
2,545,915
US$m
1
Number of performance rights
Employee plans
Executive plans
WEP
SWEP
STA
LTA
5,512,903
2,090,371
(1,595,207)
(219,059)
5,789,008
US$m
43
38,270
17,500
(26,310)
(11,960)
17,500
US$m
-
881,921
210,210
(129,641)
(28,342)
934,148
US$m
5
2,951,208
568,234
(114,406)
(139,451)
3,265,585
US$m
8
1. For the purpose of valuation, the share price on grant date for the 2018 WEP allocations was US$24.36 (2017: US$22.77) and the average SWEP was US$24.09 (2017: US$23.38).
2. For the purpose of valuation, the share price on grant date for the 2018 STA and LTA allocations was US$24.45 (2017: US$22.49).
For more detail on these share plans and performance rights issued to KMPs, refer to the Remuneration Report on pages
82-85 and pages 92-94.
128 Woodside Petroleum Ltd | Annual Report 2018
NOTES TO THE FINANCIAL STATEMENTS E. OTHER ITEMS
for the year ended 31 December 2018
E.4 Related party transactions
(b) Interest percentage in joint operations
Transactions with directors
There were no transactions with directors during the year other
than those disclosed in Note E.3(b).
E.5 Auditor remuneration
The auditor of Woodside Petroleum Ltd is Ernst & Young (EY).
(a) Amounts received or due and receivable for an audit or review of the
financial statements of the entity and any other entity in the Group by:
2018
US$'000
2017
US$'000
EY Australia
Other EY firms
1,643
148
1,791
1,734
182
1,916
(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
333
237
130
163
863
439
326
164
51
980
E.6 Events after the end of the reporting period
Since the end of the financial year and to the date of this report,
the following entities were incorporated:
• Woodside Energy Holdings II Pty Ltd was incorporated on
23 January 2019 - a wholly owned subsidiary incorporated
in Australia.
• Woodside Power Pty Ltd was incorporated on 23 January
2019 - a wholly owned subsidiary incorporated in Australia.
• Woodside Power (Generation) Pty Ltd was incorporated on
23 January 2019 - a wholly owned subsidiary incorporated
in Australia.
E.7 Joint arrangements
(a) Interest percentage in joint ventures
Entity
North West Shelf Gas Pty Ltd Marketing services for
Principal activity
ventures in the sale of gas to
the domestic market.
Liaison for ventures in the
sale of LNG to the Japanese
market.
Marketing services for
ventures in the sale of LNG
to international markets.
LNG vessel fleet adviser.
Group Interest %
2018
2017
16.67
16.67
16.67
16.67
16.67
16.67
16.67
16.67
Coordinator for venturers for
all equity liftings.
16.67
16.67
North West Shelf Liaison
Company Pty Ltd
China Administration Company
Pty Ltd
North West Shelf Shipping
Service Company Pty Ltd
North West Shelf Lifting
Coordinator Pty Ltd
Producing and developing assets
Oceania
North West Shelf
Enfield and Vincent
Stybarrow
Balnaves
Pluto
Wheatstone
Exploration and evaluation assets
Oceania
Browse Basin
Carnarvon Basin1,2
Bonaparte Basin
New Zealand3
Africa
Morocco4
Gabon5
Senegal
The Americas
Peru
Kitimat
Asia
Myanmar
Europe
Ireland
Bulgaria6
Group Interest %
2018
2017
12.5 - 50.0
60.0
50.0
65.0
90.0
13.0 - 65.0
12.5 - 50.0
60.0
50.0
65.0
90.0
13.0 - 65.0
30.6
15.8 - 90.0
26.7 - 35.0
-
30.6
15.8 - 90.0
26.7 - 35.0
70.0
-
21.3 - 40.0
35.0
25.0
21.3 - 40.0
35.0
35.0
50.0
35.0
50.0
40.0 - 55.0
40.0 - 55.0
60.0 - 90.0
30.0
60.0 - 90.0
-
1. Scarborough is included in the Carnarvon Basin.
2. One permit (WA-35-R) within the Carnarvon Basin was surrendered in 2018.
3. One permit (PEP-55794) within New Zealand was surrendered in 2018.
4. One permit (Rabat Deep I-VI) within Morocco was surrendered in 2018.
5. One permit (Permit Luna Muetse (E13)) within Gabon expired in 2018.
6. As at 31 December 2018, the 1-14 Khan Kubrat block farm-in has been approved by
the Bulgarian government. This approval has mandated that the Energy Minister
will sign an agreement that will transfer 30% of the block to Woodside. Final
execution of this agreement is pending.
The principal activities of the joint operations above are
exploration, development and production of hydrocarbons.
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.
Woodside Petroleum Ltd | Financial Statements 129
NOTES TO THE FINANCIAL STATEMENTS E. OTHER ITEMS
for the year ended 31 December 2018
E.7 Joint arrangements (cont.)
E.8 Parent entity information
Recognition and measurement
Joint arrangements are arrangements in 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.
Joint arrangements acquired which are deemed to be carrying on
a business are accounted for applying the principles of AASB 3
Business Combinations. Joint arrangements which are not deemed
to be carrying on a business are treated as asset acquisitions.
Woodside Petroleum Ltd:
Current assets
Non-current assets
Non-current liabilities
Net assets
Issued and fully paid shares
Shares reserved for employee share plans
Employee benefits reserve
Foreign currency translation reserve
Retained earnings
Total shareholders' equity
Profit of parent entity
Total comprehensive income of parent entity
2018
US$m
2017
US$m
357
9,839
(680)
9,516
8,880
(31)
121
296
250
9,516
1,005
1,002
345
7,812
(700)
7,457
6,919
(35)
123
296
154
7,457
853
857
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.2. 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.
130 Woodside Petroleum Ltd | Annual Report 2018
NOTES TO THE FINANCIAL STATEMENTS E. OTHER ITEMS
for the year ended 31 December 2018
E.9 Subsidiaries
(a) Subsidiaries
Name of entity
Ultimate Parent Entity
Woodside Petroleum Ltd
Subsidiaries
Company name
Woodside Energy Ltd
Woodside Browse Pty Ltd
Woodside Burrup Pty Ltd
Burrup Facilities Company Pty Ltd
Burrup Train 1 Pty Ltd
Pluto LNG Pty Ltd
Woodside Burrup Train 2A Pty Ltd
Woodside Burrup Train 2B Pty Ltd
Woodside Energy (LNG Fuels and Power) Pty Ltd
Woodside Energy (Domestic Gas) Pty Ltd
Woodside Energy (Algeria) Pty Ltd
Woodside Energy Australia Asia Holdings Pte Ltd y
Woodside Energy (Carbon Capture) Pty Ltd
Woodside Energy Holdings International Pty Ltd
Woodside Energy Mediterranean Pty Ltd
Woodside Energy International (Canada) Limited t
Woodside Energy (Canada LNG) Limited t
Woodside Energy (Canada PTP) Limited t
KM LNG Operating General Partnership t
KM LNG Operating Ltd t
Woodside Energy Holdings Pty Ltd
Woodside Energy Holdings (USA) Inc q
Woodside Energy (USA) Inc q
Gryphon Exploration Company q
Woodside Energy (Cameroon) SARL
Woodside Energy (Gabon) Pty Ltd
Woodside Energy (Indonesia) Pty Ltd
Woodside Energy (Indonesia II) Pty Ltd
Woodside Energy (Indonesia III) Pty Ltd
Woodside Energy (Ireland) Pty Ltd
Woodside Energy (Korea) Pte Ltd y
Woodside Energy (Korea II) Pte Ltd y
Woodside Energy (Myanmar) Pte Ltd y
Woodside Energy (Morocco) Pty Ltd
Woodside Energy (New Zealand) Limited z
Woodside Energy (New Zealand 55794) Limited z
Woodside Energy (Peru) Pty Ltd
Woodside Energy (Senegal) Pty Ltd
Woodside Energy (Tanzania) Limited ¥
Woodside Energy Holdings (South America) Pty Ltd
Woodside Energia (Brasil) Investimento em Exploracao
de Petroleo Ltda l
Woodside Energy Holdings (UK) Pty Ltd
Woodside Energy (UK) Limited p
Woodside Energy (Bulgaria) Limited p
Woodside Energy Holdings (Senegal) Limited p
Woodside Energy (Senegal) B.V.
Woodside Energy (France) SAS £
Woodside Energy Iberia S.A. º
Woodside Energy (N.A.) Ltd p
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
Notes
(1,2,3)
(2,3,4)
(2,4)
(2,4)
(5)
(5)
(5)
(2,4,9)
(2,4,9)
(2,4,9)
(2,4,9)
(2,4)
(4)
(2,4,12)
(2,4)
(2,4)
(4)
(4)
(4)
(4,8)
(4)
(2,4)
(4)
(4)
(4)
(4)
(2,4)
(2,4)
(2,4)
(2,4)
(2,4)
(4)
(4,10)
(4)
(2,4)
(4)
(4)
(2,4)
(2,4)
(6)
(2,4)
(7)
(2,4)
(4)
(4,11)
(4)
(4)
(4)
(4)
(4)
(2,4)
(2,4,12)
(2,4,12)
(2,4,12)
(2,4)
(2,4,12)
(2,4)
Name of entity
Woodside Energy Trading Singapore Pte Ltd y
WelCap Insurance Pte Ltd y
Woodside Energy Shipping Singapore Pte Ltd y
Woodside Guangdong Shipping (One) Pty Ltd
Woodside Guangdong Shipping (Two) Pty Ltd
Woodside West Africa Pty Ltd
Metasource Pty Ltd
Mermaid Sound Port and Marine Services Pty Ltd
Woodside Finance Limited
Woodside Petroleum (Timor Sea 19) Pty Ltd
Woodside Petroleum (Timor Sea 20) Pty Ltd
Woodside Petroleum Holdings Pty Ltd
Notes
(4)
(4)
(4)
(2,4,12)
(2,4,12)
(2,4,12)
(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.
2. These companies were members of the tax consolidated group at 31 December 2018.
3. Pursuant to ASIC Instrument 2016/785, relief has been granted to the controlled entity,
Woodside Energy Ltd, from the Corporations Act 2001 requirements for the preparation,
audit and publication of accounts. As a condition of the Instrument, 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 a 5%
interest in the shares of these subsidiaries. These subsidiaries are controlled.
6. As at 31 December 2018, Woodside Energy Holdings Pty Ltd held a 99.99% interest in
the shares of Woodside Energy (Tanzania) Limited and Woodside Energy Ltd held the
remaining 0.01% interest.
7. As at 31 December 2018, Woodside Energy Holdings (South America) Pty Ltd held a
99.99% interest in the shares of Woodside Energia (Brasil) Investimento em Exploracao
de Petroleo Ltda and Woodside Energy Ltd held the remaining 0.01% interest.
8. As at 31 December 2018, 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.
9. Woodside Energy (LNG Fuels and Power) Pty Ltd was incorporated on 22 May
2018, Woodside Energy (Domestic Gas) Pty Ltd was incorporated on 23 May 2018
and Woodside Burrup Train 2A Pty Ltd and Woodside Burrup Train 2B Pty Ltd were
incorporated on 22 October 2018.
10. Woodside Energy (Korea II) Pte. Ltd. was incorporated on 23 January 2018.
11. Woodside Energy (Bulgaria) Limited was incorporated on 24 July 2018.
12. These subsidiaries are under external administration and will be wound up voluntarily.
All subsidiaries were incorporated in Australia unless identified
with one of the following symbols:
The Netherlands ¥Tanzania
lBrazil
Cameroon zNew Zealand
tCanada
£France
ySingapore
ºSpain
p England and Wales
q USA
Classification
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, to 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.
Woodside Petroleum Ltd | Financial Statements 131
NOTES TO THE FINANCIAL STATEMENTS E. OTHER ITEMS
for the year ended 31 December 2018
E.9 Subsidiaries (cont.)
(c) Deed of Cross Guarantee and Closed Group
(b) Subsidiaries with material non-controlling interests
The Group has two Australian subsidiaries with material
non-controlling interests (NCI).
Name of entity
Burrup Facilities Company Pty Ltd
Burrup Train 1 Pty Ltd
Principal place of
business
Australia
Australia
% held
by NCI
10%
10%
The NCI in both subsidiaries is 10% held by the same parties (refer
to Note E.9(a) footnote 5 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
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
2018
US$m
2017
US$m
604
5,277
(84)
(542)
5,255
525
1,190
602
60
(57)
876
(36)
(840)
-
563
3,057
(152)
(383)
3,085
308
2,021
432
43
(43)
598
(2)
(596)
-
617
5,196
(79)
(515)
5,219
522
1,130
558
56
(51)
853
(15)
(838)
-
581
3,021
(158)
(366)
3,078
308
1,921
398
40
(38)
572
(1)
(571)
-
132 Woodside Petroleum Ltd | Annual Report 2018
Woodside Petroleum Ltd and Woodside Energy Ltd are parties to
a Deed of Cross Guarantee under which each company guarantees
the debts of the other. By entering into the Deed, the entities have
been granted relief from the Corporations Act 2001 requirements
for the preparation, audit and publication of accounts, pursuant
to ASIC Instrument 2016/785. The two entities represent a Closed
Group for the purposes of the Instrument.
The consolidated income statement and statement of financial
position of the members of the Closed Group are set out below:
Closed Group Consolidated Income Statement and
Statement of Retained Earnings
Profit before tax
Taxes
Profit after tax
Retained earnings at the beginning of the financial year
Dividends
Retained earnings at the end of the financial year
Closed Group Consolidated Statement of Financial
Position
Current assets
Cash and cash equivalents
Receivables
Inventories
Tax receivable
Other financial assets
Other assets
Non-current assets held for sale
Total current assets
Non-current assets
Receivables
Other financial assets
Exploration and evaluation assets
Oil and gas properties
Other plant and equipment
Deferred tax assets
Total non-current assets
Total assets
Current liabilities
Payables
Other financial liabilities
Other liabilities
Provisions
Total current liabilities
Non-current liabilities
Payables
Deferred tax liabilities
Other financial liabilities
Other liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued and fully paid shares
Shares held for employee share plan
Other reserves
Retained earnings
Total equity
Restated
2017
US$m
2018
US$m
191
(54)
137
2,033
(909)
1,261
284
(127)
157
2,702
(826)
2,033
80
258
55
-
36
15
10
454
94
346
63
29
70
-
-
602
15
29,781
1,501
4,063
181
23
35,564
36,018
-
28,371
1,001
3,750
140
25
33,287
33,889
349
27
53
117
546
23,017
485
14
36
944
24,496
25,042
10,976
8,880
(31)
866
1,261
10,976
429
17
38
139
623
22,068
415
15
52
921
23,471
24,094
9,795
6,919
(35)
878
2,033
9,795
NOTES TO THE FINANCIAL STATEMENTS E. OTHER ITEMS
for the year ended 31 December 2018
E.10 Other accounting policies
(b) New and amended accounting standards and
(a) Summary of other significant accounting policies
Tax consolidation
The parent and its wholly owned Australian controlled entities have
elected to enter a tax consolidation, with Woodside Petroleum Ltd
as the head entity of the tax consolidated group. The members of
the tax consolidated group are identified in 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.
interpretations adopted
The Group adopted AASB 15 as of 1 January 2018.
AASB 15 provides a single, principles-based five-step model to
be applied to all contracts with customers.
The Group adopted the new standard using the full retrospective
approach and applied the practical expedient per AASB 15.C5(b).
The Group’s new revenue accounting policy is detailed in Note A.1.
Revenue will be recognised using the sales method of accounting
rather than the entitlements method. The sales method results in
recording revenue when the products are delivered to customers,
as opposed to the Group’s percentage interest in production from
a producing field. An opening adjustment of a US$14 million loss has
been recognised in retained earnings as at 1 January 2017 and a
US$45 million increase in profit has been recognised for the year
ended 31 December 2017.
In the normal course of business, the Group enters into long-
term sales contracts. Provisions are included in the contracts
to renegotiate prices to align to current market conditions at a
given point in time. Where the new pricing formula is not agreed
by the time the contract enters a price review period, revenue
is recognised at the amount to which the Group expects to be
entitled. No opening adjustments were recognised.
The impact of AASB 15 adoption and representation of other
financial assets is as follows:
Impact on equity (increase/(decrease)):
Receivables
Other financial assets1
Payables2
Deferred tax liabilities
Retained earnings
Adjustment
31 December
2017
US$m
(76)
74
(46)
13
31
1 January
2017
US$m
(99)
66
(13)
(6)
(14)
1. Product receivables containing variable components held at fair value were
previously presented within receivables at 31 December 2017. These are now
presented as other financial assets in the statement of financial position.
2. Adjustment to payables relates to reversal of revenue entitlements.
Impact on the income statement and earnings per share
(increase/(decrease)):
Adjustment
31 December
2017
US$m
67
1
(4)
(19)
45
5.4
Operating revenue
Other income
Other expenses
Income tax expenses
Profit for the year attributable to equity holders of the parent
Basic and diluted earnings per share (EPS) attributable to
equity holders of the parent (US cents)1
1. EPS adjustment reflects the impact of AASB 15. It has not been adjusted for
theoretical ex-rights price factor associated with the equity raising (refer to
Note A.4).
Woodside Petroleum Ltd | Financial Statements 133
NOTES TO THE FINANCIAL STATEMENTS E. OTHER ITEMS
for the year ended 31 December 2018
(c) New and amended accounting standards and interpretations
issued but not yet effective
AASB 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.
The depreciation of the right of use asset and interest on the lease
liability will be recognised in the consolidated income statement.
Transition to AASB 16
The Group plans to adopt the modified retrospective approach
on transition, where the lease liability is measured at the present
value of future lease payments on the initial date of application,
being 1 January 2019. The lease asset is measured as if AASB 16
had been applied from the commencement of the lease with any
difference between the lease asset and liability recognised as an
adjustment to opening retained earnings. Under this transition
method, prior period comparative financial statements are not
required to be restated and the cumulative impact of applying
the standard is recognised in opening retained earnings on the
initial date of application, being 1 January 2019. The Group has
completed changes to the contracting process and the system
implementation to ensure ongoing compliance with AASB 16.
The Group has completed an impact assessment of AASB 16 and
estimates the following impact on its consolidated statement of
financial position as at 31 December 2018:
Estimated Impact on Consolidated
Statement of Financial Position1
Right of use assets
Right of use lease liabilities
US$m
1,029
1,202
1. The net effect of the lease liabilities and right of use assets, adjusted for deferred
tax will be recognised against retained earnings.
The leases recognised by the Group under AASB 16 predominantly
relate to LNG vessels and property.
On adoption of AASB 16, operating lease expense will no longer
be recognised in gross profit, depreciation of right-of-use assets
will be recognised in other costs and lease financing costs will be
recognised in net financing costs.
134 Woodside Petroleum Ltd | Annual Report 2018
DIRECTORS’ DECLARATION
In accordance with a resolution of directors of Woodside Petroleum Ltd, we state that:
1. In the opinion of the directors:
(a) the financial statements and notes thereto, and the disclosures included in the audited 2018 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 2018 and
of the performance of the Group for the financial year ended 31 December 2018;
(c) the financial statements and notes thereto also comply with International Financial Reporting Standards as disclosed in the ‘About
these statements’ section within the notes to the 2018 Financial Statements;
(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 2018.
For and on behalf of the Board
R J Goyder, AO
Chairman
Perth, Western Australia
14 February 2019
P J Coleman
Chief Executive Officer and Managing Director
Perth, Western Australia
14 February 2019
Woodside Petroleum Ltd | Financial Statements 135
INDEPENDENT AUDIT REPORT
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Independent auditor's report to the shareholders of Woodside Petroleum
Ltd
Report on the audit of the financial report
Opinion
We have audited the financial report of Woodside Petroleum Ltd (the Company), including its subsidiaries
(collectively the Group), which comprises the consolidated statement of financial position as at 31
December 2018, 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 to the financial statements, including a summary of significant accounting
policies, and the directors' declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
a)
b)
giving a true and fair view of the Group’s financial position as at 31 December 2018 and of its
financial performance for the year ended on that date.
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting
Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the
Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial report of the current year. These matters were addressed in the context of our audit
of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate
opinion on these matters. For each matter below, our description of how our audit addressed the matter
is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of material
misstatement of the financial report. The results of our audit procedures, including the procedures
performed to address the matters below, provide the basis for our audit opinion on the accompanying
financial report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
TH:CT:WOODSIDE:2018:017
136 Woodside Petroleum Ltd | Annual Report 2018
Independent audit report (cont.)
1. Impairment of non-current assets
Why significant
How our audit addressed the key audit matter
Page 2
Australian Accounting Standards require the Group to assess
whether there are any indicators that non-current assets
may be impaired. If any indicator exists, the Group must
estimate the recoverable amount of the asset. At year end,
the Group concluded that there were no indicators of
impairment or reversal of previous impairments for any of its
Cash Generating Units (CGUs), apart from an impairment
indicator in respect of LNG vessels classified as non-current
assets held for sale at 31 December 2018. An impairment
charge of $39 million was recognised during the year.
In determining whether there was an indicator of impairment
or impairment reversal, the Group considered whether there
was a significant change in the external and internal factors
as set out in the financial report in note B.4.
The assessment of indicators of impairment and reversal of
impairment is judgmental, and includes assessing a range of
external and internal factors that could impact the
recoverable amount of a CGU. Accordingly, this matter was
considered to be a key audit matter.
We evaluated whether there had been significant changes in the
external and internal factors considered by the Group in assessing
whether indicators of impairment or reversal of impairment exist.
This included assessing, in conjunction with our valuation
specialists, any significant changes in discount rates and
commodity prices and the impact this would have on the
conclusions drawn by the Group based on the impairment
assessments of previous years. Our assessment of commodity
prices makes reference to market prices (where available), market
research, market practice, market indices, market consensus and
historical performance.
We used the work of the Group’s internal experts with respect to
the hydrocarbon reserve assumptions used in the Group’s
assessment of movements in reserves in its impairment indicator
considerations. This included understanding the reserve
estimation processes carried out, the Group’s internal certification
process for technical and commercial experts who are responsible
for reserves, the design of the Group’s Petroleum Resources
Management procedures and its alignment with the guidelines
prepared by the Society of Petroleum Engineers. We also
examined the competence and objectivity of the Group’s experts,
the scope and appropriateness of their work. We assessed whether
key reserves economics assumptions were consistent with other
operational information.
We examined sales agreements utilised in determining the
recoverable amount of non-current assets held for sale at 31
December 2018.
We also focused on the adequacy of the financial report
disclosures regarding the assumptions, key estimates and
judgements applied by management for the Group’s assessment of
indicators of impairment and reversal of impairment of non-
current assets. These have been disclosed in Note B.4.
2. Accounting for petroleum resources rent tax (PRRT) assets
Why significant
How our audit addressed the key audit matter
The consolidated financial statements of the Group include
deferred tax assets arising from PRRT and associated PRRT
tax benefits. The determination of the quantum, likelihood
and timing of the realisation of deferred tax assets arising
from PRRT is highly judgemental and assessed on a basis
consistent with the impairment trigger assessment set out
above as well as other factors such as the long term bond
rate applied to the augmentation of deductible expenditure.
As such, this matter was considered to be a key audit matter.
The Group’s disclosures about PRRT are included in the
summary of significant accounting policies in Note A.5.
We considered the application of the judgements and
methodologies used by the Group to calculate the deferred tax
assets arising from PRRT and estimate their utilisation in the
future. In particular, we assessed those judgements and
methodologies relating to the estimation of future PRRT
assessable profits, the interpretation of PRRT legislation and the
consistency in application of forecasted performance with other
forecasts made, including analysis of impairment indicators.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
TH:CT:WOODSIDE:2018:017
Woodside Petroleum Ltd | Financial Statements 137
Page 3
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the information
included in the Company’s Annual Report for the year ended 31 December 2018, but does not include the
financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report and
our related assurance opinion.
In connection with our audit of the financial report, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial report or
our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors 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 control as the directors determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement, whether due to fraud or
error.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
►
►
►
Identify and assess the risks of material misstatement of the financial report, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
Obtain an understanding of internal control relevant to the audit 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 Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
TH:CT:WOODSIDE:2018:017
138 Woodside Petroleum Ltd | Annual Report 2018
Independent audit report (cont.)
Page 4
►
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial report or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the Group to cease to continue as
a going concern.
►
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in a
manner that achieves fair presentation.
We communicate with the directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should
not be communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
Report on the audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 76 to 97 of the directors' report for the year
ended 31 December 2018.
In our opinion, the Remuneration Report of Woodside Petroleum Ltd for the year ended 31 December
2018, complies with section 300A of the Corporations Act 2001.
Responsibilities
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.
Ernst & Young
T S Hammond
Partner
Perth
14 February 2019
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
TH:CT:WOODSIDE:2018:017
Woodside Petroleum Ltd | Financial Statements 139
SHAREHOLDER
STATISTICS
As at 8 February 2019
Number of shareholdings
There were 210,652 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
100,001–9,999,999,999
Total
Number of holders
147,347
Number of shares % of issued capital
6.08
56,954,395
55,805
5,095
2,305
100
210,652
113,813,216
35,118,592
43,808,099
686,457,247
936,151,549
12.16
3.75
4.68
73.33
100.00
Unmarketable parcels
There were 2,444 members holding less than a marketable parcel of shares in the company.
Twenty largest shareholders
HSBC Custody Nominees (Australia) Limited
J P Morgan Nominees Australia Pty Limited
Citicorp Nominees Pty Limited
BNP Paribas Nominees Pty Ltd
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