2019ANNUAL REPORT
INCORPORATING APPENDIX 4E
About this report
This Annual Report 2019 is a summary of Woodside’s operations and activities for the 12-month period ended 31 December 2019 and
financial position as at 31 December 2019. 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’, 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 2019 unless otherwise stated.
All dollar figures are expressed in US currency, Woodside share, unless otherwise stated.
On the cover
Pluto LNG onshore processing facility, a key component of Woodside’s Burrup Hub vision.
2019SUSTAINABLE
DEVELOPMENT
REPORT
Sustainable Development Report 2019
A summary of Woodside’s sustainability approach, health and safety performance and other material information
for the 12-month period ended 31 December 2019 is included in our Sustainable Development Report 2019, which
includes topics that have previously been included in Annual Reports.
These two reports provide a complementary review of Woodside's business.
Forward-looking statements
This report contains forward-looking statements. Please refer to page 122, 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.
APPENDIX 4E
Results for announcement to the market
2019
Revenue from ordinary activities
Profit from ordinary activities after tax attributable to members
Net profit for the period attributable to members
Decreased 7.0% to US$4,873 million
Decreased 74.9% to US$343 million
Decreased 74.9% to US$343 million
2018
US$5,240 million
US$1,364 million
US$1,364 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
Ordinary 55¢
Ordinary 36¢
Ordinary 91¢
Ordinary 53¢
Franked amount per security
Ordinary 55¢
Ordinary 36¢
Ordinary 91¢
Ordinary 53¢
Ex-dividend date
Record date for determining entitlements to the final dividend
Payment date for the final dividend
24 February 2019
25 February 2019
20 March 2019
Net tangible asset per security
31 December 2019
$17.641
31 December 2018
$18.68
1. Includes lease assets of $948 million and lease liabilities of $1,170 million as a result of AASB 16 Leases.
CONTENTS
Overview
About Woodside
Performance highlights
Chairman’s report
Chief Executive Officer’s report
Executive management
Focus areas
Operating and Financial Review
Financial summary
Strategy and capital management
Business model and value chain
Energy markets
Base business
Developments
Corporate
Risk
Climate change risk management
Reserves and resources
Governance
Woodside Board of Directors
Corporate governance
Directors’ report
Remuneration report
Financial Statements
Shareholder Information
Shareholder statistics
Key announcements 2019
Events calendar 2020
Business directory
Asset facts
Glossary, units of measure and conversion factors
Index
Summary charts
2
3
6
8
10
12
14
18
20
21
22
30
38
42
44
48
52
53
55
76
120
122
122
123
124
125
127
128
Ten-year comparative data summary
Inside back cover
Woodside Petroleum Ltd | Annual Report 2019
1
ABOUT WOODSIDE
Woodside led the development of the LNG industry in Australia and is applying this same
pioneering spirit to solving future energy challenges.
We have a focused portfolio and are recognised for our
world-class capabilities as an integrated upstream supplier
of energy.
As Australia’s leading LNG operator, we operated 6% of global
LNG supply in 2019.
In Western Australia, we are creating an integrated LNG
production hub on the Burrup Peninsula.
Building on more than 30 years of operations, we are
progressing development of the Burrup Hub to bring the
offshore Scarborough and Browse gas resources through
our existing assets, the Woodside-operated Pluto LNG and
North West Shelf (NWS) Project. We also operate two floating
production storage and offloading (FPSO) facilities, the Okha
FPSO and Ngujima-Yin FPSO.
Our operated assets are renowned for their safety, reliability
and efficiency and we have a strong track record in project
development.
We have a participating interest in Wheatstone, which started
production in 2017.
Internationally, we are progressing the Sangomar Field
Development in Senegal and the A-6 Development in Myanmar.
And we have equity interests in Canada (Kitimat LNG) and
Timor-Leste/Australia (Sunrise).
Technology and innovation are essential to our long-term
sustainability. We are working to improve our energy efficiency,
offset our emissions, reduce our emissions intensity and
explore options for lower-carbon energy. We support the use
of LNG as a lower-emissions and economically viable fuel.
Today we are pioneering remote support and the application of
artificial intelligence, embedding advanced analytics across our
operations while recognising digital security issues.
We continue to expand our capabilities in marketing, trading
and shipping and have enduring relationships that span 30 years
with customers throughout the Asia-Pacific region and beyond.
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 65 years of experience, making us a partner
of choice.
We have a focused portfolio and
are recognised for our world-class
capabilities as an integrated upstream
supplier of energy
2 Woodside Petroleum Ltd | Annual Report 2019
PERFORMANCE HIGHLIGHTS
Net profit after tax
million
million
million
$
$
Operating cashflow
Underlying net profit after tax
343$
1,063
3,305
89.6MMboe
3.9$
per boe1
Maintaining world-class operating costs
Gas unit production cost
Production
Total recordable injury rate
0.90
Lowest ever recorded value
per million work hours
1. Excluding oil facilities and impact of the planned Pluto LNG turnaround.
Woodside Petroleum Ltd | Annual Report 2019
3
PERFORMANCE HIGHLIGHTS
Strong base business fundamentals
Solid annual
production
Delivering
significant cashflow
Continuing
profitability
4
.
1
.
4 9
4
8
.
2
2
9
.
9
4
9
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.
6
9
8
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2
3
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3
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7
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,
7
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i
l
l
i
m
$
2015
2016
20171
2018
2019
2015
2016
2017
2018
2019
Prepared for growth
Prepared for growth
Well placed to
execute spend
2
5
9
6
,
Low
gearing
.
3
3
2
.
0
4
2
.
9
3
2
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y
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$
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.
1,416
4
6
3
,
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1,063
1,126
9
6
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,
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r
o
p
e
R
n
o
i
l
l
i
m
$
3
4
3
6
2
2015
2016
2017
2018
2019
Underlying NPAT
Sustained high
LNG reliability
.
2
5
9
.
4
8
9
.
3
7
9
.
5
3
9
97.8
.
7
3
9
y
t
i
l
i
b
a
i
l
e
r
G
N
L
%
2015
2016
2017
2018
2019
2015
2016
2017
2018
2019
2015
2016
2017
2018
2019
Pluto LNG turnaround impact
Momentum for growth
Greater Enfield
Sangomar Phase 1
Myanmar A-6
Delivered on schedule
and on budget
Achieved ‘best in basin’
drilling performance
Achieved FID
Agreed fiscal terms
Commenced execute
phase
Commenced pre-FEED
Complete
First oil 2023
FEED entry 2020
All dates are Woodside targets and remain subject to joint venture approvals, regulatory approvals and relevant commercial arrangements.
1. Woodside's share of NWS pipeline gas and associated condensate reduced in 2017.
2. Net 12 month dividend yield. Source: iBloomberg.
4 Woodside Petroleum Ltd | Annual Report 2019
Improving emissions
profile
Best-ever safety
performance
1
.
0
1
.
0
0
1
9
9
.
.
8
9
8
8
.
1
7
.
1
4
6
.
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e
-
O
C
t
M
2
3
.
1
9
2
.
1
0
9
0
.
2015
2016
2017
2018
2019
2015
2016
2017
2018
2019
Continued low
cost of production
Ongoing
high margins
2
0 5
5
.
.
.
8
8
2
.
8
3
2
.
0
4
2
5.7
.
5
4
1
.
5
2
.
1
42
9
1
.
i
n
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r
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m
s
s
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r
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b
/
$
9
6
.
)
p
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o
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g
(
t
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o
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r
p
t
i
n
U
e
o
b
/
$
2015
2016
2017
2018
2019
2015
2016
2017
2018
2019
Pluto LNG turnaround impact
Scarborough
Browse
Increased resource size
estimate by 52%
Agreed toll price
Completed basis
of design
Ready for FEED
FID 2020
FID 2021
Creating and
sharing value
Returning profits
to shareholders
150
100
50
0
e
r
a
h
s
r
e
p
s
t
n
e
c
2015
2016
2017
2018
2019
Sector-leading
returns
%
10
5
0
d
n
e
d
v
D
i
i
l
i
2
d
e
y
d
n
e
d
v
D
i
i
2015
2016
2017
2018
2019
Shared value
A$6.4billion
Distributed in supplier payments, shareholder returns,
government taxes, community contributions and
employee wages
Increased
Scarborough
resource
Estimated 2C resource52%
Woodside Petroleum Ltd | Annual Report 2019
5
CHAIRMAN’S REPORT
Woodside has in 2019 progressed growth
plans which, when executed well, will deliver
value to all our stakeholders and make a major
contribution to the Australian economy and to
global energy supply for decades to come.
At the same time, we have delivered value for shareholders,
achieving an underlying net profit after tax (NPAT) of
$1,063 million. The reported NPAT of $343 million reflects
the impairment of the Kitimat LNG asset. We paid an annual
dividend of 55 US cps, representing a payout ratio of 80% of
underlying profit.
In growing the company and recharging its longevity, our
focus is on ensuring Woodside remains a strong value
proposition for investors.
We are positioning your company financially for the
expenditure associated with responsibly executing our growth
plans. This included reactivation of the non-underwritten
Dividend Reinvestment Plan for the interim dividend.
The Board will continue to ensure disciplined capital
management as we progress our plans for growth, unlocking
value for shareholders.
Businesses in Australia make a huge contribution to our
society, through the provision of returns to shareholders,
employment, taxation and engagement with the community.
In the five years to 2019, Woodside paid a total of A$4.4 billion
in Australian taxes and royalties. The positive contribution
that businesses make is particularly evident when a company
like Woodside is considering growth projects that will create
enormous local opportunities and have significant flow-on
effects through the Australian community and economy.
Our proposed projects on the Burrup Hub in northern Western
Australia are about opportunity, prosperity, energy and jobs.
In the lead-up to major investment decisions, a company
takes a clear-eyed look at its purpose and its future, engaging
closely with stakeholders who will be part of that journey.
Throughout 2019, Woodside has been working hard to achieve
alignment with our joint venture partners and to meet the
expectations of regulators and the community.
The time and effort we have spent on explaining our growth
strategy and securing relevant approvals gives us confidence
that we can lock in broad-based support as we approach final
investment decisions that lock in our plans for the future.
Richard Goyder, AO
Chairman
6 Woodside Petroleum Ltd | Annual Report 2019
In particular, the Board has paid close attention to the role that
Woodside can continue to play in a lower-carbon world and
how our growth projects align with the emissions reductions
targeted in the Paris Agreement.
Natural gas is part of the global response to the dual challenge
of reducing global emissions while extending access to modern
energy.
Renewables are growing – and that growth must continue –
but even their exponential growth is not fast enough to satisfy
rising global demand for energy. Existing gas fields globally
are declining at a rate of approximately 8% per annum without
new capital investment, meaning new fields will need to be
developed even to meet the world’s existing levels of energy
demand, let alone future increases. Those new fields will need
to be developed in a way that is as carbon-efficient and
cost-efficient as possible.
Our plans to expand LNG production through the Burrup
Hub in northern Western Australia are cost-efficient because
they use existing facilities. These projects can help support
significant global emissions reductions in the decades ahead by
displacing higher emissions fuel in key Asian markets.
We are also thinking beyond that and investing in exploring
how Woodside’s experience and resources can be used to
support new energy technologies that align with the longer-
term global goal of carbon neutrality.
These are challenges that we cannot solve alone. That’s why
we’re drawing on the expertise of a range of partners, including
customers in our key markets who have an interest in jointly
developing long-term energy options.
We take the same collaborative approach in technology,
working with partners from NASA to IBM and Monash
University to understand how rapidly advancing technologies
that have been developed for other purposes can be applied in
our industry to deliver value.
As we head towards our Annual General Meeting, we look
forward to engaging with our shareholders. This includes
discussion of our approach to climate change. However, it is
important that all our shareholders have the opportunity to
use the AGM to interact with the Board and management on
the issues important to them, rather than proceedings being
disrupted by a small group of individuals holding very few
shares pushing a particular agenda. Our larger shareholders
need to support us on this, rather than siding with simplistic
AGM resolutions.
It was a pleasure, on behalf of the Board, to welcome Goh Swee
Chen, who started as a director on 1 January 2020. Ms Goh has
extensive experience across our industry and others, including
consumer goods and IT. Her diverse professional background,
extensive international track record and board experience will
be a valuable asset to the Woodside Board.
I would like to thank Peter Coleman and his management team
for their visionary leadership of the company at this crucial
time. And I thank you, our shareholders, for your support.
In December 2019, we marked the 65th anniversary of the
listing of your company. The first shareholders have been richly
rewarded for backing the vision of the accountant and the
stockbroker, who founded a company that went on to develop
a whole new industry for Australia. We look forward to the
continued support of our shareholders as we prepare to invest
in growth and the future.
Richard Goyder, AO
Chairman
13 February 2020
Our focus is on ensuring Woodside
remains a strong value proposition
for investors
Woodside Petroleum Ltd | Annual Report 2019
7
CHIEF EXECUTIVE
OFFICER’S REPORT
Peter Coleman
Chief Executive Officer
and Managing Director
8 Woodside Petroleum Ltd | Annual Report 2019
It was a pivotal year for Woodside in 2019, as we
laid the foundation for growth in our business
while maintaining our focus as a low-cost and
high-margin producer.
We faced numerous challenges both financially and in our
operations, but ended the year having achieved significant
progress in our growth plans, while strengthening our cashflows
and balance sheet.
Disappointingly, we have impaired our Kitimat LNG asset in
Canada as a result of continuing significant oversupply in the
North American gas markets and increasing costs for carbon that
were not foreseen when we initially acquired the asset in 2015.
However, very pleasingly, our team has significantly enhanced the
fundamental attributes of the asset, reducing development costs
and improving reserve recovery from the drilling program.
Across our business, we recorded our best-ever personal safety
outcome, which is a credit to our staff and contractors.
Our base operations results were affected by lower prices, a
major plant turnaround at Pluto, direct cyclone impact on our
processing facilities, and accounting and internal tariff changes.
Our business plan proved to be robust in the face of these
challenges, with a gross margin of 44%, and company-wide
breakeven costs reducing by 27% to $22/boe, as we have
refocused our spend in preparation for growth.
At the Pluto facility, we completed the first major scheduled
maintenance turnaround since starting the plant in 2012. Once
production was restored at Pluto, the facility achieved record
production rates.
Our operating cashflow of over $3.3 billion and year-end cash
balance of over $4.0 billion underscore the capacity of our base
business to support growth.
The cost performance of our underlying business was good,
benefiting from our lower exploration spend.
We were able to secure another $1.7 billion in additional debt
from the United States and Asian markets, with our gearing at
year-end being 14.4%, at the lower end of our target range.
Our investment in technology is paying off, contributing to a
20% reduction in corrosion maintenance costs at the North West
Shelf last year and a 15% increase in Pluto’s capacity since 2012.
We have actioned our near-term growth plans, with the
Greater Enfield Project delivered on schedule and on budget,
demonstrating Woodside’s expertise in project execution, which
will be critical in the months and years ahead.
You can read in detail in this report about the significant
milestones we have already reached in our growth plans in
Australia, Senegal and Myanmar, despite the complexity of
commercial negotiations and environmental and regulatory
approvals.
In 2019, awareness has grown around the world of the impacts
of climate change and the role that our industry plays. We can
support the energy transition in the decades ahead by
developing natural gas resources now that can displace more
carbon-intensive fuels and help meet the world's energy needs.
The use of cloud computing to reanalyse historic seismic data
with new techniques and reassess the recoverable gas in the
Scarborough reservoir revealed a 52% increase in the estimated
resource volume. This underlined both the value of the resource
and of the technologies that have improved our understanding
of it.
As we outlined during our Investor Briefing Day in November,
our portfolio of proposed projects would triple our reserves
base and deliver new production at a compound annual growth
rate of more than 6% through to 2028. It’s a compelling growth
story.
On the commercial front, we secured agreement on the tolling
price to bring Scarborough gas through the Pluto facility. Our
vision for an integrated LNG production hub on the Burrup
Peninsula is taking shape. In 2019, we reached a final investment
decision on the pipeline component of our Pluto-Karratha Gas
Plant Interconnector.
By locking in contractors, we have been able to take advantage
of a low point in the cost cycle and minimise the risk of cost
overruns.
We are engaging with partners and regulators on our proposal
to develop the Browse resource through the Karratha Gas Plant,
and we share the view of State and Federal Governments that
the timing is right to progress the development of this resource.
Already, we are seeing strong market support for our Burrup
Hub plans, reaching long-term supply agreements with
domestic and international customers.
We need to develop these energy resources in a responsible
fashion, managing emissions through offsets, energy efficiency
and lower-carbon technologies. Our aspiration is that by 2050
we will be at net zero in relation to all of our direct carbon
emissions.
For some years, we have been preparing our company to
play a constructive role in a lower-carbon world. Progress on
this in 2019 included an agreement with Greening Australia to
undertake large-scale native tree-planting projects to generate
quality carbon offsets.
We are targeting offsetting our equity reservoir emissions
across our entire portfolio from 2021. These emissions, which
occur naturally in gas reservoirs and need to be removed from
the gas prior to liquefaction, account for around a third of our
direct emissions over the lifespan of our proposed projects.
We have steered Woodside onto a path of long-term
sustainable growth. We are ready for the challenges and
opportunities ahead as we progress towards final investment
decisions and continue working hard to deliver on our
commitments.
I would like to acknowledge the extra effort that all Woodside
staff have put in to get us to this point and thank them in
anticipation for the hard work that lies ahead.
We have been planning for growth – and now we are ready to
deliver it.
The first of our major growth projects, the Sangomar Field
Development in Senegal, was approved in January 2020 and is
now in project execution. Key contracts have been awarded for
the development, which is targeting first oil in 2023.
Peter Coleman
Chief Executive Officer and Managing Director
13 February 2020
We took a significant step towards commercialising our assets
in Myanmar as fiscal terms were finalised and the Block A-6
Joint Venture moved in December from concept select phase to
pre-front end engineering and design.
In 2019, we have steered Woodside onto a
path of long-term sustainable growth
Woodside Petroleum Ltd | Annual Report 2019
9
EXECUTIVE MANAGEMENT
Peter Coleman
BEng, MBA, D.Law (Hon), FTSE
Chief Executive Officer and
Managing Director
Jacky Connolly
BCom, MOHS
Vice President
People and Global Capability
+ People and Global Capability
+ Employee Engagement
Robert Edwardes
BSc (Engineering), PhD
Executive Senior Adviser
Dr Edwardes stepped down
from the Executive Vice
President Development role in
September 2019 and continues
as Senior Adviser.
Michael Abbott
BJuris, LLB, BA, MBA
Senior Vice President
Corporate and Legal
+ Audit
+ Business Climate and Energy Outlook
+ Corporate Affairs
+ Legal and Secretariat
+ Risk and Compliance
+ Security and Emergency Management
+ Global Property and Workplace
Sherry Duhe
BS (Accounting), MBA
Executive Vice President
and Chief Financial Officer
+ Finance, Tax, Treasury
and Insurance
+ Commercial
+ Business Development and Growth
+ Contracting and Procurement
+ Investor Relations
+ Strategy, Planning and Analysis
+ Performance Excellence
Shaun Gregory
BSc (Hons), MBT
Executive Vice President
Sustainability and Chief
Technology Officer
+ Exploration
+ Digital
+ Geoscience
+ Technology
+ New Energy and Carbon Abatement
+ Kitimat LNG
+ Sunrise
10 Woodside Petroleum Ltd | Annual Report 2019
Reinhardt Matisons
BEng, MBA, MIEAust,
CPEng, CPA
Executive Vice President
Marketing, Trading
and Shipping
+ Marketing
+ Power and New Markets
+ Shipping
+ Trading
+ International Marketing Offices
Fiona Hick
BEng, BAppSci, FIEAust
Acting Executive Vice
President Operations
+ Producing Business Units
+ Production Support
+ Operations and Maintenance
+ Drilling and Completions
+ Logistics
+ Health, Safety, Environment
and Quality
+ Subsea and Pipelines
+ Reservoir Management
Meg O’Neill
BSc (Ocean Engineering),
BSc (Chemical Engineering), MSc
Executive Vice President
Development
+ Engineering
+ Projects
+ International Development Offices
+ Development Planning
+ Power
+ Scarborough and Pluto Train 2
+ Browse
+ Sangomar Field Development
+ Myanmar A-6 Development
Woodside Petroleum Ltd | Annual Report 2019
11
FOCUS AREAS
MYANMAR
CANADA
Beijing*
Seoul*
Tokyo*
Singapore*
SENEGAL
AUSTRALIA
TIMOR-LESTE / AUSTRALIA
Product type
Phase
Gas
Oil
Producing assets
Developments
Gas or oil
Appraisal and exploration
Refer to the Asset Facts section on page 124 for full details of Woodside's global interests.
* Denotes marketing office
12 Woodside Petroleum Ltd | Annual Report 2019
OKHA FPSO
NGUJIMA-YIN FPSO
Product contribution
LNG
Liquids
Other
%
76
17
7
Woodside Petroleum Ltd | Annual Report 2019
13
W
E
I
V
E
R
L
A
I
C
N
A
N
I
F
D
N
A
G
N
I
T
A
R
E
P
O
FINANCIAL SUMMARY
Key metrics
$ million
Operating revenue
EBITDA1
EBIT1
NPAT
Underlying NPAT 1,2
2019
2018
4,873
5,240
3,531
1,091
343
1,063
3,814
2,278
1,364
1,416
Net cash from operating activities
3,305
3,296
Investment expenditure
Capital investment expenditure 1,3
Exploration expenditure 1,4
Free cashflow1
Dividends distributed
Key ratios
Return on equity %
ROACE %
Earnings (US cps)
Gearing %
Effective income tax rate5 %
Sales volumes
Gas6 (MMboe)
Liquids (MMboe)
Total
1,327
1,167
160
2,067
1,189
2.1
4.1
36.7
14.4
29.3
73.0
15.9
88.9
1,922
1,633
289
1,524
909
7.8
9.3
148.1
12.1
29.4
75.4
13.8
89.2
1.
2.
3.
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 1 on
the inside back cover for calculation methodology on EBITDA.
2019 NPAT was adjusted for the impact of an impairment expense for the Kitimat LNG development
($720 million). 2018 NPAT was 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
($27 million).
Excludes exploration capitalised. 2018 expenditure has been restated to exclude restoration and
rehabilitation spend.
4. Excludes prior period expenditure written off and permit amortisation; includes evaluation expense.
5. Effective income tax rate for Australian operations.
6.
2019 volume includes 1.4 MMboe recognised in relation to a periodic adjustment reflecting the arrangements
governing Wheatstone LNG sales.
Dividend per share
54
9
0
1
54
8
9
45
3
8
71
4
4
1
64
1
9
Average annual dated Brent ($/boe)
Full-year dividend (cps)
14 Woodside Petroleum Ltd | Annual Report 2019
2015
2016
2017
2018
2019
2019 was characterised by strong production performance from all assets, significant planned
turnarounds at Pluto LNG and NWS Project, and challenging market conditions. We achieved an
underlying profit of $1,063 million and increased our cashflows, but recognised an impairment expense
reducing reported NPAT to $343 million. Our increased liquidity position has us well placed to execute
expenditure on our key growth projects.
NPAT reconciliation
Sales revenue: volume
1,364
(391)
(4)
(40)
(237)
148
109
114
(720)
Sales volumes decreased due to the planned Pluto LNG
turnaround in Q2 2019 and the planned cessation of Nganhurra
FPSO production in November 2018. This was partially offset by a
full year of Wheatstone Train 2 production and completion of the
Greater Enfield Project in August 2019.
$81 million was recognised in relation to a periodic adjustment
reflecting the arrangements governing Wheatstone LNG sales.
343
Production cost
Production cost increased primarily due to planned turnaround
activity at Pluto LNG and NWS Project, offset by the cessation of
Nganhurra FPSO production.
T
A
P
N
8
1
0
2
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:
e
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a
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:
e
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l
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r
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t
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R
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P
d
n
a
x
a
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e
m
o
c
n
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T
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9
1
0
2
G
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L
t
a
m
i
t
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K
f
o
t
n
e
m
r
i
a
p
m
I
Key movements
Sales revenue: price
Sales revenue decreased due to lower realised prices. Our
average realised price decreased by approximately 7% to
$50/boe, as a result of lower Brent and spot prices.
Depreciation and amortisation
Depreciation and amortisation for oil and gas properties
increased primarily due to completion of the Greater Enfield
Project in August 2019 and start-up of Wheatstone Train 2 in
June 2018.
Exploration and evaluation
Exploration and evaluation expense decreased in line with a
decrease in exploration activity in 2019.
Income tax and PRRT
The PRRT benefit decreased by $21 million primarily due to the
planned Pluto LNG turnaround and changes to LNG processing
agreements. Income tax decreased by $169 million predominantly
due to lower profit before income tax.
2019
$/boe
2018
$/boe
Variance
%
Impact
$m
Other
LNG
NWS¹
Pluto
Wheatstone²
Domestic gas
Condensate
Oil
LPG
Volume weighted
average realised prices
Brent average price
JCC (lagged 3 months)
50
45
54
52
14
60
66
59
50
64
70
54
48
57
59
15
71
71
69
54
71
68
(250)
(85)
(93)
(72)
(5)
(103)
(25)
(8)
(391)
(7)
(6)
(5)
(12)
(7)
(15)
(7)
(14)
(7)
(10)
3
1. Excludes 2019 and 2018 price review adjustments relating to sales from prior years.
2. Includes an amount recognised in other income reflecting the arrangements governing
Wheatstone LNG sales.
Other items increasing NPAT include net trading, finance income
and a positive stock movement. These were partially offset by
restoration adjustments due to revised cost estimates for end of
life assets, the implementation of AASB 16 Leases (AASB 16) as well
as higher interest expense due to lower capitalised borrowing
costs following the start-up of both Wheatstone Train 2 and
Greater Western Flank Phase 2.
Impairment of Kitimat LNG
The Kitimat LNG asset was impaired by $720 million primarily
due to increased uncertainty, particularly in the timing of the
development of the upstream resource.
Woodside Petroleum Ltd | Annual Report 2019
15
Capital allocation
Dividend
We continue to maintain a prudent financial position by
appropriately servicing our debt, investing in future growth and
distributing funds to shareholders.
A 2019 final dividend of US 55 cents per share (cps) has been
declared. The final dividend reflects 2019 underlying NPAT of
$1,063 million.
During the year we generated $3,305 million of operating
cashflow. We raised $1,700 million of debt through a Rule 144A/
Regulation S senior unsecured bond and a medium term note,
ending the period with liquidity of $6,952 million. This, combined
with our expected operating cashflows, prepares us for ongoing
delivery of our growth plans.
In 2019, we funded investment in line with our growth strategy,
investing $1,327 million in capital and exploration expenditure.
This was lower than our 2018 capital expenditure of $1,922 million,
which was primarily due to the acquisition of ExxonMobil’s 50%
interest in the Scarborough resources in 2018 coupled with a
reduction in exploration spend in 2019.
2019 capital expenditure was incurred for the Greater Enfield
Project, Pluto PLA07, Pyxis Hub and Scarborough FEED
activities.
Woodside continues to actively review future capital
requirements, including our asset portfolio and equity positions.
The 2019 dividend represents a payout ratio of 80%. Consistent
with disciplined capital management we will continue to review
the payout ratio as we progress through our growth phase.
To support our growth strategy, we reactivated in August 2019
the dividend reinvestment plan for the 2019 interim dividend.
The dividend reinvestment plan will remain in place until further
notice. This will allow our eligible shareholders to reinvest their
dividends directly into shares at a 1.5% discount.
The full year 2019 dividend is 91 cps, the value of the final
dividend payment is $518 million and the dividend will be fully
franked for Australian taxation purposes.
Unit production cost, cash costs and margins
Total unit production cost increased by 12% to $5.7/boe. This was
due to the planned Pluto LNG turnaround and increased NWS
Project maintenance activities, offset by a full year of production
from Wheatstone Train 2 and the completion of the Greater
Enfield Project.
Excluding the impact of the Pluto turnaround ($67 million and
7.7 MMboe), unit production cost reduced to $4.5/boe.
Liquidity
Cash
Undrawn debt
3,305
(1,238)
950
(421)
1,500
(1,062)
n
o
i
l
l
i
m
$
3,918
4
4
2
2
,
4
7
6
,
1
y
t
i
d
u
q
i
i
l
8
1
0
2
w
o
fl
h
s
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t
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O
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v
n
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w
o
fl
h
s
a
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D
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h
t
O
g
n
i
s
i
a
r
d
n
o
b
m
o
r
f
s
d
e
e
c
o
r
P
m
o
r
f
s
d
e
e
c
o
r
P
i
g
n
d
n
u
f
r
e
h
t
o
Production cost
6.9
9
3
6
5.0
5.2
5.1
n
o
i
l
l
i
m
$
2
7
4
3
4
4
5
6
4
Unit production
cost ($/boe)
5
0
5
5.7
4.5
8
3
4
Total production
cost ($ million)
2015
2016
2017
2018
2019
Pluto LNG turnaround impact
Net of Pluto LNG turnaround impact
6,952
4
9
8
2
,
8
5
0
4
,
y
t
i
d
u
q
i
i
l
9
1
0
2
16 Woodside Petroleum Ltd | Annual Report 2019
Balance sheet, liquidity and debt service
2020 outlook
We continue to build a resilient balance sheet, ending 2019 with a
healthy liquidity position of $6,952 million and net debt (including
leases) of $2,791 million.
Gearing decreased from our half year position of 17.9% to 14.4%.
Our target gearing range is 15-35%, which was adjusted as a result
of adopting AASB 16 from 1 January 2019. Woodside’s strong
credit ratings of Baa1 and BBB+ were both reaffirmed during 2019
by Moody’s and S&P Global respectively with a stable outlook.
Our investment expenditure guidance for 2020 is $4,100 million
to $4,400 million.1
We are increasing expenditure on our growth projects including
Scarborough and Pluto Train 2, Sangomar Phase 1, Wheatstone
and Pyxis. Wheatstone expenditure is for execution of
Julimar-Brunello Phase 2. The guidance includes amounts
conditional on a positive final investment decision to develop
the Scarborough field.
We continue to manage our debt portfolio by minimising near-
term maturities and maintaining a low cost of debt. The average
term to maturity is 5.2 years and our portfolio cost of debt
remains competitive at 3.6%. This represents both an increase in
maturity and decrease in cost compared to 2018.
We are also maintaining focus on base business. Outstanding
base business performance will allow us to generate cash to fund
our growth projects and meet our 2020 production targets.
Exploration expenditure in 2020 is expected to remain consistent
with 2019 expenditure at approximately $150 million.
In 2019, we extended our liquidity position through prudent
management of our debt portfolio. This included:
+ Issuing a $1,500 million Rule 144A/Regulation S senior
unsecured bond with a coupon of 4.5% and a term of 10 years.
The bond will mature in March 2029
+ Extended and upsized a syndicated revolving facility worth
$1,200 million
+ Issued a new medium term note of $200 million in
November 2019
+ Extended and upsized bilateral facilities.
For 2020 the expected impact on NPAT is $24 million for a $1
movement in the Brent oil price, and $10 million for a $0.01
movement in the AUD/USD exchange rate.
We will continue to actively manage our debt portfolio in 2020.
Unit production
cost ($/boe)
Total production
cost ($ million)
Debt maturity
Drawn debt
Undrawn debt facilities
n
o
i
l
l
i
m
$
1,500
1,000
500
0
2020 investment expenditure guidance
4,000
n
o
i
l
l
i
m
$
2,000
0
Growth2
Exploration
Sangomar Phase 1
Scarborough
Pluto Train 2
Wheatstone
Pyxis
Greater Enfield
Base business3
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
0
3
0
2
2019
2020 Scarborough
FID payment4
2020E
1. Guidance range is sensitive to phasing of project expenditure.
2. Growth includes Browse, Pluto-KGP Interconnector, Kitimat, Myanmar A-6 and other spend.
3. Base business includes Pluto LNG, NWS Project, Australia Oil and Corporate.
4. $450 million due to ExxonMobil and BHP on a positive FID to develop the Scarborough field.
Woodside Petroleum Ltd | Annual Report 2019
17
STRATEGY AND
CAPITAL MANAGEMENT
We have a clear plan to deliver superior shareholder returns through our efficient base business and
the execution of high-quality growth opportunities. Our strategy is underpinned by industry-leading
capability, technology and focus on sustainable energy solutions.
Base
business
Growth
Burrup Hub
International
Sustainable
energy
Woodside’s base business is characterised by world-class LNG and FPSO reliability, cost
discipline and strong safety and environmental performance.
We maximise value by developing and deploying technology across our portfolio of assets,
enabled by our close collaboration with world-leading experts.
Our base business has been expanded by development in recent years, including the
completion of the Greater Enfield Project, the start-up of Wheatstone and delivery of subsea
tie-backs extending the field life of our assets.
Our portfolio of growth opportunities has the right interests in the right assets to unlock
value for shareholders and other stakeholders. We are planning to undertake these activities
at the right time in the investment cycle in order to deliver new production when anticipated
global demand requires it.
Our Burrup Hub vision will extend the life of the world-class North West Shelf and Pluto LNG
facilities for decades to come. We are targeting the production of approximately 40 Tcf of
dry gas in a capital efficient way.1
The key projects of our Burrup Hub vision are Scarborough and Browse. Scarborough will
develop approximately 11.1 Tcf of dry gas (2C, 100%) from the Scarborough field in the
Carnarvon Basin through an expansion of our Pluto LNG facility. Woodside is targeting first
LNG cargo in 2024.
Browse extends the life of the existing NWS facilities through the subsea development of
three fields in the Browse Basin. Browse gas will be transported to the NWS facilities through
an approximately 915 km trunkline. Woodside is targeting final investment decision in late 2021.
Commercialisation of our international assets progressed with the approval of the Sangomar
Field Development Phase 1 offshore Senegal. The Sangomar Field Development is well
matched to our expertise in subsea development and FPSO operations. Phase 1 targets the
development of an estimated 231 million barrels of oil (2P, 100%), with an opportunity to
potentially export pipeline gas to shore in future phases. Project execution commenced in
2020 and first oil is targeted for 2023.
In Myanmar, the offshore A-6 Development is targeting an estimated 2.2 Tcf of dry gas
(2C, 100%) to be transported through a 240 km export pipeline. This development will tie
into existing infrastructure to provide a new source of energy for the region.
We are actively progressing future growth opportunities, including Kitimat (Canada) and
Sunrise (Timor-Leste / Australia).
We are focused on providing sustainable energy solutions that deliver enduring value to
shareholders, communities, governments and other stakeholders. We promote LNG as a
lower-emissions fuel and cleaner alternative for transport, shipping and power generation.
We set and report on our targets to improve the energy efficiency of our operations and our
broader contribution to a lower-carbon world. We have established the capacity to generate
large-scale carbon offsets in support of this approach. In executing our growth opportunities
we are incorporating design and operational activities to reduce our carbon footprint.
As global energy demand grows we will be ready to meet it, including participating in
partnerships to promote and develop hydrogen.
18 Woodside Petroleum Ltd | Annual Report 2019
1. Refer to the Burrup Hub section on page 30 for more information.
Capital management
Our capital management framework provides us with the
flexibility to maximise the value delivered from our portfolio of
opportunities. We consider a range of macroeconomic scenarios
to inform our decision making and ensure we maintain a resilient
financial position.
VALUE MAXIMISATION
Operating cashflow
Debt
Participating
interest
Shareholder
returns
Equity
management
FINANCIAL RESILIENCE
Our capital investment requirements are primarily funded by our
resilient and stable operating cashflows, which we augment or
distribute with a number of capital management levers. We do
this to maximise shareholder value and consider:
+ Debt management, 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 15-35%.
We continue to target maintaining an investment-grade credit
rating.
+ Participating interest management, to ensure we balance
capital investment requirements, project execution risk and
long-term value.
+ Shareholder returns, in accordance with our dividend
policy we will pay a minimum of 50% of net profit after tax
adjusted for non-recurring items. Consistent with prudent
and disciplined capital management, we will review the
payout ratio as we execute our growth projects. Our strong
shareholder distributions will be funded from our high margin
base business. We retain the option to return surplus cash to
shareholders by increasing the dividend payout ratio, payment
of special dividends or stock buy-backs.
We also consider equity management options on an
ongoing basis.
Investment criteria
+ Our investment criteria target investment decisions which
deliver returns on capital exceeding our cost of capital.
+ The economic criteria we use are set independently of project
decisions.
+ We apply a suite of target metrics that are aimed at delivering
superior shareholder returns from our investment decisions.
+ We test the robustness of our investments against a range of
low-outcome and lower-carbon scenarios. We include carbon
pricing in our economics and test the economics for a range of
prices.
+ We set higher target metrics for investments with increased
complexity and risk, and seek to preserve any upside potential.
+ Typical target metrics required for investment are an ungeared
internal rate of return of greater than 12%, a value investment
ratio (VIR) of greater than 0.25 and a payback period of less
than eight years.
Woodside Petroleum Ltd | Annual Report 2019
19
BUSINESS MODEL
AND VALUE CHAIN
Woodside’s business model seeks to maximise returns 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.
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.
2019 illustrations
Start of development
activities for Myanmar Block
A-6 following exploration
and appraisal success.
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 execution
commences.
Entered execute phase for
Sangomar Field Development
Phase 1 in early 2020. Prepared
Scarborough for FID targeted
in 2020.
OPERATE
Our operations are characterised by strong safety and environmental performance in remote and
challenging locations. As Australia’s leading 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. 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.
Completed major turnarounds at
Pluto LNG and NWS Project and
achieved record daily production
rates at Pluto LNG.
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 and 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.
Negotiated long-term LNG supply
agreements to underpin the
development of the Scarborough
gas resource.
DECOMMISSION AND DIVEST
Decommissioning is integrated into project planning, from the earliest stages of development
through to the end of field life. Individual assets within our portfolio have a finite 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.
Continued the decommissioning
of Nganhurra FPSO infrastructure.
20 Woodside Petroleum Ltd | Annual Report 2019
ENERGY MARKETS
LNG is a reliable, affordable and clean energy source. LNG demand is forecast to expand rapidly,
potentially doubling by 2040, with Asia the key region of demand. Woodside’s strategy is focused
on delivering world-class LNG projects to meet this demand and supply a growing and increasingly
complex market.
Woodside’s proposed Burrup Hub developments can deliver
competitively priced LNG to major LNG demand centres nearby
in Asia, where it is expected that two-thirds of the global demand
will be located.
While 2019 was a record year for new LNG investment decisions,
many more projects are required over the next 18 months to
ensure the market remains adequately supplied past the mid-
2020s. The LNG market is characterised by cycles and the market
is adequately supplied in the near-term as production from the
wave of projects sanctioned during the last cycle is absorbed.
Demand growth is expected to outstrip supply growth in the
medium term, tightening the market. LNG demand has increased
42% in the past four years, and is expected to expand at a
compound annual growth rate exceeding 4% out to 2035.
As the cleanest burning hydrocarbon, natural gas is expected to
see broad-based growth across all demand sectors, including
electricity generation, industrial use (such as steelmaking,
petrochemical, fertiliser and manufacturing) and water
desalination. Gas use for transport is also expected to increase,
doubling in demand by 2040. A new market is emerging for
LNG as a marine fuel to support the International Maritime
Organisation’s efforts to reduce sulphur emissions.
Australia in 2019 became the world’s largest supplier of LNG,
overtaking Qatar. As additional LNG supply ramps up from the
USA and Russia, the market is increasingly globalised. In 2019,
over a third of the LNG supply was sold on a destination flexible
basis. This destination flexible supply is expected to reach two
thirds of the market as soon as 2025.
Projects best positioned to reach investment will have
competitive delivered prices, an ability to attract project financing
(if required), and support from experienced equity partners with
strong balance sheets.
Continued LNG demand strength is supported by China, India
and other Asian economies. Government and social policy is
aligned with natural gas as a reliable energy source that improves
local air quality whilst lowering national carbon dioxide emissions.
LNG on a life-cycle basis emits half the carbon dioxide of coal to
generate power, supporting a timely and stable energy transition
in support of the goals of the Paris Agreement. Continued coal-
to-gas switching and economic growth is expected to see the
Asian region increase LNG imports by 84% out to 2035.
Global LNG Outlook
Increasing spot market liquidity is a key characteristic of a
commoditised marketplace. The LNG market is demonstrating
greater diversification, with an expected 100 buyers present in
2020 with varying contracting requirements. Traditional long-
term contracts remain prevalent, but more innovative hybrid
contracting structures are standard with variety in pricing
mechanisms, contract length and flexibility.
Woodside is well-positioned, in terms of development
opportunities and capability, to meet the requirements of a
dynamic LNG market.
Global LNG supply1
Marine fuel
Developing Asia
China
Other
Europe
Japan, Korea and Taiwan2
2020
2025
2030
2035
700
600
500
400
300
200
100
a
p
t
M
0
2015
1. Supply forecast based on existing capacity and under construction developments, excluding boil-off gas.
2. LNG demand growth to 2035 is widespread across Asia. Japan is the only regional market to contract.
Source: Wood Mackenzie Q4 2019, including NLNG Seven project.
2035 forecast Asian
LNG demand
above 2019 levels84%
Woodside Petroleum Ltd | Annual Report 2019
21
S
S
E
N
I
S
U
B
E
S
A
B
22 Woodside Petroleum Ltd | Annual Report 2019
PLUTO LNG
Production
37.1MMboe
LNG reliability¹
98.5%
Sales revenue
$1,988million
Unit production cost¹
$3.5per boe
1. Excluding impact of planned Pluto LNG turnaround.
2019
Highlights
+ Completed first major turnaround
+ Achieved new record daily production rates
+ Achieved FID on Pyxis Hub
+ Commenced operations at the LNG truck
loading facility
2020
Activities
+ Commence Pyxis Hub development drilling
+ Install the Pluto water handling module, in
support of 2021 RFSU
Excellent base business
Pluto LNG delivered 37.1 MMboe of production in 2019
(Woodside share).
Woodside safely completed Pluto LNG’s first major turnaround in
June 2019, delivering improved production capacity and excellent
reliability performance. Pluto LNG production capacity is now
approximately 15% higher than at start-up in 2012.
A new record daily production rate of 15.3 kt/d (14% above
nameplate capacity of 4.9 Mtpa) was achieved in Q3 2019,
reflecting the improvements realised by operational learnings,
engineering improvements and advanced digital technology.
Average reliability following the turnaround was 99.2%.
We recorded no Tier 1 or 2 process safety events in 2019.
Commercial sales of domestic gas from Pluto LNG commenced
during 2019.
Enabling growth
Development of additional Pluto resources through subsea
tie-backs continued during 2019. We also took a number of
significant steps to prepare the onshore facility for our Burrup
Hub growth plans.
In November 2019, Woodside achieved start-up of the PLA07
infill well on budget and on schedule. We also achieved final
investment decision (FID) on the Pyxis Hub project, comprising
the subsea tie-back of the Pyxis, Pluto North and Xena infill
wells. Key contracts were awarded to support the design and
installation of subsea equipment and infrastructure. Ready for
start-up (RFSU) is targeted for 2022.
Tie-ins for the Pluto-KGP Interconnector were installed during
the major turnaround in Q2 2019, ahead of the Interconnector’s
start-up targeted for 2022.
Tie-ins for the Pluto water handling project were also completed
during the major turnaround. The project involves the
construction and installation of a water handling module on the
Pluto platform to enable wet gas production from 2021.
Woodside completed construction and first deliveries from the
Pluto LNG truck loading facility. The facility enables LNG to be
transported across Western Australia for use by local mining
companies for remote power generation and heavy transport,
supporting our drive to develop new markets for our LNG and
replace higher-emissions fuels.
Woodside interest: 90%
Refer to page 30 for more information on our Burrup Hub
vision.
New technologies, operational
excellence and the safe completion
of the first major turnaround
resulted in record daily production
Woodside Petroleum Ltd | Annual Report 2019
23
NWS PROJECT
2019
Highlights
+ Completed major integrated turnarounds
+ Achieved excellent health and safety
performance
2020
Activities
+ Targeting FID on NWS component of
Pluto-KGP Interconnector
+ Safe and efficient execution of major
+ Achieved strong production and reliability
turnarounds
performance
+ Achieved FID on GWF-3 and Lambert Deep1
1. Subsequent to the period
Excellent base business
Woodside delivered strong LNG production and reliability
performance from the NWS Project. A significant program of
onshore and offshore turnaround activities was completed
during the year.
NWS Project delivered 32.0 MMboe of production in 2019
(Woodside share).
We maintained strong average reliability of 97.0% throughout
the year.
Our continued focus on health and safety delivered an excellent
safety outcome. We also recorded no Tier 1 or 2 process safety
events in 2019.
Enabling growth
The existing NWS Project infrastructure is a central component
of our Burrup Hub vision. We delivered several key work scopes
in 2019 aimed at maintaining our strong safety, reliability and
efficiency performance as we transition to including third-party
gas processing.
In July 2019 we successfully executed major turnarounds
at the Goodwyn A platform and LNG Train 1 on budget
and on schedule, and in September 2019 undertook an
integrated turnaround involving LNG Train 5, Fractionation,
the North Rankin Complex and North Rankin Train 2. Multiple
improvements increasing reliability and production performance
were implemented during the turnarounds.
We also continued a comprehensive maintenance program
at KGP to support ongoing production and our future growth
plans. The program was approximately 49% complete at the
end of 2019. The application of new technologies and innovative
products has helped reduce our external corrosion maintenance
costs by approximately 20% since 2018.
FID was achieved for Greater Western Flank Phase 3
(GWF-3) in January 2020, following completion of FEED
activities which commenced in Q2 2019. GWF-3 (including
Lambert Deep) is a subsea tie-back opportunity to
commercialise further NWS Project reserves.
Woodside interest: 16.67%
The NWS Project achieved strong
LNG reliability, completed major
maintenance activities and invested in
extending the life of the facilities
24 Woodside Petroleum Ltd | Annual Report 2019
Production
LNG reliability
Sales revenue
32.0MMboe
$1,379million
$4.1per boe
Unit production cost
97.0%
Woodside Petroleum Ltd | Annual Report 2019
25
AUSTRALIA OIL
2019
Highlights
+ Delivered the Greater Enfield Project
on schedule and on budget
+ Strong production performance from
Ngujima-Yin FPSO
Ngujima-Yin FPSO
The Greater Enfield Project involved the refurbishment of the
Ngujima-Yin FPSO and subsea tie-back of additional fields. The
project was completed on schedule and on budget. Woodside’s
strong commitment to safety was reflected in the execution of
the full shipyard scope without any recordable injuries.
The Ngujima-Yin FPSO recommenced production from the
Vincent wells in July 2019 and began production from the
Greater Enfield wells in August 2019. Woodside’s share of annual
production in 2019 from the Ngujima-Yin FPSO was 4.0 MMboe,
WHEATSTONE
2019
Highlights
+ Commenced domestic gas production
+ Achieved FID on Julimar-Brunello Phase 2
Wheatstone continued to deliver solid production in 2019. The
facility achieved new record production rates, driven by improved
reliability and constraint management.
Wheatstone delivered 14.4 MMboe of production in 2019
(Woodside share), up from 9.1 MMboe in 2018.
26 Woodside Petroleum Ltd | Annual Report 2019
up from 1.3 MMboe in 2018. 2019 production was above target
following project completion.
Woodside interest: 60%
Okha FPSO
The Okha FPSO produces oil from the Cossack, Wanaea,
Lambert and Hermes fields and commenced production in 2011.
Woodside’s share of annual production in 2019 from the Okha
FPSO was 1.6 MMboe, down from 1.8 MMboe in 2018 primarily
due to natural field decline. Okha subsea life extension activities
commenced in 2020.
Woodside interest: 33.33%
Nganhurra FPSO
Decommissioning activities for the remaining infrastructure will
continue in 2020.
Woodside interest: 60%
Unit production costs at Wheatstone also decreased significantly
from $6.8/boe in 2018 to $4.3/boe in 2019.
Commercial production of domestic gas commenced in
March 2019.
Julimar-Brunello
To support Wheatstone production, Woodside is progressing
Julimar-Brunello Phase 2, which involves the tie-back of the
Julimar field to existing Brunello subsea infrastructure connected
to the Wheatstone offshore platform.
FEED activities progressed during 2019, enabling a positive FID to
be taken by the joint venture in November 2019. Drilling activities
commenced in January 2020.
Woodside interest: 13% (Wheatstone)
Woodside interest: 65% (Julimar-Brunello)
EXPLORATION
2019
Highlights
+ Commenced development activities for the
Myanmar A-6 Development
+ Awarded a PSC extension to appraise the
FAN and SNE North discoveries in Senegal
+ Acquired 3D seismic offshore Senegal
+ Awarded new permits in Australia and the
Republic of Korea
Overview
Exploration activities in 2019 were focused on divesting
low-value licences and drilling prospects across our captured
interests with a focus on high-value opportunities to provide
sustainable growth opportunities.
Australia
The Achernar-1 exploration well was drilled during May 2019 in
WA-28-P, safely and under budget. It intersected high porosity
sands in the target reservoir which were found to be water
bearing.
The Gemtree prospect in WA-49-L was matured to drill-ready
status and is scheduled to be drilled in 2020 following the
Julimar-Brunello Phase 2 wells. Gemtree offers potential backfill
gas into the Julimar-Brunello development.
In the North West Shelf asset area, reprocessing of the
Fortuna 3D seismic data, acquired in 2014, was completed on
schedule and budget. The data covers five developed fields
(Tidepole, Goodwyn, Sculptor-Rankin, Keast and Dockrell),
three undeveloped fields (Dixon, Haycock and Gaea) and a
number of exploration prospects near existing infrastructure.
The reprocessing of data covered approximately 950 km² of
the Dampier sub-basin with the key purpose of applying new
processing technology to increase the resolution and imagery of
the subsurface geology. In 2020, seismic interpretation activities
will be undertaken to mature prospects in this area for potential
development and tieback to existing infrastructure.
New acreage was acquired to provide options for future growth.
NT/P86 in the Bonaparte Basin is nearby to the Barossa gas
field, and WA-536-P contains high-quality tieback prospectivity
to either Pluto or Wheatstone. Retention lease applications
were submitted for WA-430-P with the discoveries having the
potential to be developed in the future. A declared location was
granted in WA-404-P.
Myanmar
Our exploration focus in Myanmar in 2019 was to move our
discovered volumes to development. This was successfully
achieved with the commencement of pre-FEED activities for
the A-6 Development, following the successful appraisal of the
Shwe Yee Htun discovery in Q4 2018. In 2020, Woodside will
commence a fourth drilling campaign with the primary intention
of following up the gas discovery at the Aung Siddhi-1 exploration
well and reaching commerciality in our northern blocks.
Bulgaria
The Khan Kubrat-1 exploration well in Bulgaria reached target
depth in late May 2019 with non-commercial liquid hydrocarbons
recovered to surface from target reservoirs. The well was plugged
and abandoned as planned. Further studies are being undertaken
to inform future activities in the block.
Republic of Korea
In April 2019, Woodside entered a Concession Contract for
Blocks 8 and 6-1N in the Republic of Korea. The blocks lie in the
deepwater Ulleung Basin, adjacent to a large, mature gas market.
Substantial deepwater prospectivity was identified by Woodside
and joint venture partner KNOC when the acreage was held
between 2007-2016. A large-scale, high definition 3D marine
seismic survey is planned to commence in Q1 2020 to further
evaluate the hydrocarbon potential of the basin.
Peru
The Boca Satipo Este-1 exploration well in Peru reached
total planned depth in February 2019 with non-commercial
hydrocarbon shows in the target reservoir. The well was plugged
and abandoned.
We are focusing
on high-value
opportunities to
deliver sustainable
growth
Woodside Petroleum Ltd | Annual Report 2019
27
MARKETING AND SHIPPING
2019
Highlights
+ Executed long-term LNG SPA with Uniper
+ Completed first sales from the Pluto LNG
truck loading facility
+ Achieving a price premium for Greater Enfield
heavy sweet crude
Overview
We supply to portfolio players, major gas and electricity
utilities, trading houses and industrial and mining buyers around
the world. With a focus on LNG, we also supply crude oil,
condensate, LPG and pipeline natural gas. We are seeking to
develop new markets by exploring the use of LNG as a
lower-emissions and cost-effective alternative fuel for heavy
transport and remote power generation.
The Sangomar Field Development Phase 1 in Senegal offers
additional oil production with geographical diversification. First
oil is targeted for 2023. Woodside is preparing key joint venture
agreements that support the lifting and marketing of equity oil
production from the project.
We will leverage our pipeline marketing capabilities in 2020
to progress gas sales agreements for the A-6 Development in
Myanmar with prospective domestic and international buyers.
Domestic gas
Since the commencement of equity marketing of domestic gas
in 2016, we have established our position in the WA market and
continued to develop our portfolio of customers and trading
capabilities.
Our domestic gas sources include the NWS Project, Pluto
LNG and Wheatstone, allowing Woodside to have a portfolio
sales approach in Western Australia and to meet customer
requirements through a mix of short-, mid- and long-term
contracts.
Wheatstone domestic gas production, commissioned in March
2019, increased our equity pipeline gas capacity by 26 TJ/d to
approximately 150 TJ/d.
Portfolio LNG marketing
Legacy NWS joint domestic gas contracts will end in 2020.
Integrated trading, shipping and operations
Woodside has a proven track record in shipping and operations,
and during the year delivered 328 cargoes, including all LNG,
condensate, crude and LPG cargoes with Woodside equity
interest.
Woodside maintains 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 price fluctuations in the
shipping market, and equips us to deliver third-party cargoes
through sub-chartering activities.
Our integrated shipping, operations, marketing and trading
teams perform LNG trading and portfolio optimisation activities
to maximise the value of our LNG portfolio. The net benefit
realised from our trading and optimisation activities for the year
was approximately $90 million.
In August 2019, production of Vincent crude from the
Ngujima-Yin FPSO recommenced, following completion of the
Greater Enfield Project. Vincent crude has proven to be highly
sought-after with several cargoes being purchased for low
sulphur fuel oil blending ahead of 2020 IMO changes, and other
cargoes being bought at strong prices.
Woodside’s portfolio LNG marketing approach provides us with
the flexibility to meet changing buyer requirements, including
sales price diversity and flexible terms. 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 LNG equity portfolio reached 8.0 Mtpa in 2019. We increased
our mid-term contracted volumes in the year by executing
portfolio LNG sale and purchase agreements (SPAs) for delivery
of up to 5 million tonnes over the period 2020 to 2025.
In mid-2020, we expect to commence offtake from Corpus
Christi LNG in Texas, USA, to complement Woodside’s LNG
portfolio.
Focus on growth
In 2019, we focused on progressing sales arrangements to
underpin our growth strategy and support a Scarborough FID
in 2020.
During the year, Woodside executed a long-term SPA with
Uniper Global Commodities SE (Uniper) for the supply of LNG
for a period of 13 years commencing in 2021, and a heads of
agreement with ENN Group for the sale of 1.0 Mtpa of LNG for
ten years commencing in 2025.
Woodside’s existing long-term LNG sale and purchase agreement
with PT Pertamina (Persero) (Pertamina) has the option for
Woodside to increase supply to Pertamina by approximately
0.5 Mtpa to 1.1 Mtpa from 2024 to 2038.
28 Woodside Petroleum Ltd | Annual Report 2019
Creating new markets
Woodside is working to create new markets for LNG, including for
use in remote power generation and as a marine fuel.
Our Pluto LNG truck-loading facility provides LNG for distribution
to the Pilbara, Kimberley and Gascoyne regions of Western
Australia. We executed a SPA with Sheffield Resources Limited
in January 2019 and are in discussions with several other mining
companies to deliver LNG energy solutions for their operations.
These include solutions integrating LNG with renewable power.
Woodside intends to supply LNG from our existing LNG
production facilities to support the transition of iron ore bulk
carriers operating in the Pilbara to new LNG-fuelled ships. During
2019, we finalised the concept for an LNG bunker vessel and
selected a preferred vessel owner which would operate the vessel
under long-term charter. We are actively engaged with potential
customers to support FID on an LNG bunker vessel.
We continue to evaluate opportunities to participate further
down the LNG value chain in international markets, focusing on
Asian countries close to our LNG supply.
Our portfolio marketing
approach provides us
with the flexibility to
meet changing buyer
requirements and
maximise value
Woodside Petroleum Ltd | Annual Report 2019
29
S
T
N
E
M
P
O
L
E
V
E
D
30 Woodside Petroleum Ltd | Annual Report 2019
BURRUP HUB
Woodside is progressing the development of an integrated, regional LNG production
hub on the Burrup Peninsula. The Burrup Hub builds on our decades of experience
in northern Western Australia, bringing together Woodside-operated resources and
facilities to target the production of approximately 40 Tcf of gas from the NWS,
Pluto, Scarborough and Browse resources.1
By processing these resources through Pluto LNG and the Karratha Gas Plant (KGP),
we can create value for shareholders and customers, supporting thousands of jobs
and supplying energy for decades to come.
Integrating our facilities and transitioning to a toll processing model will provide
a cost-efficient pathway for the future development of other resources already
discovered in the Carnarvon and Browse Basins.
The key components of the Burrup Hub include:
Scarborough
+ Development of 11.1 Tcf of dry gas (2C, 100%) from the Scarborough resource
+ Semi-submersible floating production unit and a ~435 km trunkline to a proposed
expansion of the Pluto LNG onshore facility, with an offshore capacity of 7.5 Mtpa
(6.5 Mtpa LNG and 1.0 Mtpa domestic gas).
Pluto Train 2
+ Construction of Pluto Train 2, with capacity of approximately 5 Mtpa
+ Domestic gas infrastructure of approximately 225 TJ/d.
Browse
+ Development of 13.9 Tcf of dry gas and 390 MMbbl of condensate (2C, 100%)
from the Browse resources
+ Two FPSO facilities processing gas and condensate, and a ~915 km trunkline to
the NWS Project with an offshore capacity of 12 Mtpa (10.5 Mtpa LNG/LPG and
1.5 Mtpa domestic gas).
Pluto-KGP Interconnector
+ Construction of a pipeline connecting Pluto LNG and KGP, with a capacity of
greater than 5 Mtpa.
NWS Project Extension
+ Refurbishment to extend the life of the NWS Project facilities by 30+ years for
processing third-party gas resources.
We have made progress on all components of the Burrup Hub as detailed on pages
31 to 34. All parts of this plan are now in motion, from preparing to build a second
processing train at Pluto LNG to extending the life of the North West Shelf’s KGP and
connecting the two facilities with a pipeline.
2019SUSTAINABLE
DEVELOPMENT
REPORT
Refer to pages 20-22 of the Sustainable Development Report 2019
for more information on social and cultural impacts on communities.
1. Approximate targeted production, 100% basis. Proved plus probable reserves (2P, 100%) and best estimate contingent
resources (2C, 100%) for the Greater Pluto, NWS, Greater Scarborough and Greater Browse. Potential future
production from current developments.
Pluto-KGP Interconnector
With a proposed capacity of more than 5 Mtpa, the Pluto-KGP
Interconnector will allow the transfer of gas between Pluto
LNG and KGP, optimising production across both facilities. The
Interconnector will initially deliver gas to KGP to utilise spare
capacity as it becomes available.
We approved the pipeline component of the Interconnector in
November 2019 and entered into contractual arrangements for
the construction of the pipeline and its ongoing operation and
maintenance.
Environmental approval for the pipeline was secured in 2019. We
continue to work through regulatory approvals and finalisation of
commercial arrangements for the Interconnector.
Woodside is targeting start-up of the Interconnector in 2022.
NWS Project Extension
The proposed NWS Project Extension will invest in the future
of the world-class KGP by transforming it into a third-party gas
processing facility.
Key regulatory, technical and environmental milestones were
progressed in 2019, opening the way for this landmark facility to
continue to deliver long-term value as NWS reservoirs begin to
deplete.
We are targeting
production of
approximately
40 Tcf of gas
through the
Burrup Hub
Scarborough
Browse
Pluto LNG
Pluto Train 2
Conceptual image, not to scale. Developments are subject to joint venture approvals, regulatory approvals and relevant commercial arrangements.
Pluto-KGP
Interconnector
Karratha Gas Plant (KGP)
Existing
Proposed
Woodside Petroleum Ltd | Annual Report 2019
31
SCARBOROUGH AND
PLUTO TRAIN 2
2019
Highlights
+ Executed FEED for Scarborough and
Pluto Train 2
+ Increased Scarborough resource estimated
volume by 52%
+ Executed sale and purchase agreement for
long-term LNG supply with Uniper
2020
Activities
+ Award key contracts for execution phase
+ Targeting FID in 2020
+ Finalise commercial agreements with
Scarborough Joint Venture
+ Commence drilling activities
Scarborough
The Scarborough gas field is located approximately 375 km
west-north-west of the Burrup Peninsula and contains an
estimated contingent resource (2C) of 8.3 Tcf of dry gas
Woodside share (11.1 Tcf of dry gas, 100%). It is part of the Greater
Scarborough resource, including the Thebe and Jupiter fields,
which contains an estimated contingent resource (2C) of 9.3 Tcf
of dry gas Woodside share (13.0 Tcf of dry gas, 100%).
In 2019, Woodside applied new technology and our geoscience
expertise to significantly increase the recoverable volume from
the Scarborough field. The application of integrated subsurface
studies incorporating full waveform inversion 3D seismic
reprocessing and updated petrophysical interpretation to the
Scarborough field resulted in a 52% increase in the estimated
contingent resource (2C) of dry gas from 5.5 Tcf Woodside share
(7.3 Tcf, 100%) to 8.3 Tcf Woodside share (11.1 Tcf, 100%).
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
(FPU). The upstream design capacity will be 7.5 Mtpa (100%
project, including 1 Mtpa of domestic gas).
In Q1 2019, Woodside submitted its Offshore Project Proposal
(OPP) to the National Offshore Petroleum Safety and
Environmental Management Authority. The OPP details the
assessment and mitigation measures of potential environmental
impacts of the project.
In H1 2019, Woodside awarded engineering contracts to
McDermott for the floating production unit design, Saipem for
the export trunkline coating and installation, Subsea Integrated
Alliance for the subsea, umbilicals, risers and flowlines, IntecSea
for the export trunkline design, Boskalis for the trunkline seabed
intervention and shore crossing, and MITO for the export trunkline
linepipe supply. All contracts, except for IntecSea, were awarded
with options to convert to execute phase contracts.
Commercial agreements with the Scarborough Joint Venture
for processing Scarborough gas at Pluto are on track to support
FID for Scarborough and Pluto Train 2 targeted for 2020. In
November 2019, Woodside and BHP agreed the tolling price
for processing Scarborough gas through Pluto Train 2 and the
existing Pluto facilities. The heads of agreement (HOA), including
the agreed tolling price, is valid to 31 March 2020.
Woodside is targeting FID in 2020 and first cargo in 2024.
Woodside interest: 75%
Delivering the world-class Scarborough
resource and providing future growth
opportunities through the expansion of
Pluto LNG
32 Woodside Petroleum Ltd | Annual Report 2019
Scarborough resource
increased
%
52Estimated 2C resource
Pluto Train 2
Pluto Train 2 is a highly capital efficient solution for processing
Scarborough gas. By utilising existing infrastructure,
including major equipment such as LNG storage and the jetty,
approximately $4B of capital spend is avoided compared to
building a similar greenfield LNG facility.
Pluto Train 2 is designed with a capacity of approximately
5 Mtpa. Additional domestic gas infrastructure will be built to
increase the Pluto site domestic gas capacity to approximately
225 TJ/d.
The gas composition of the Scarborough reservoir is well-
matched to Pluto LNG due to its lean gas, moderate nitrogen
concentration and very low carbon dioxide content.
Existing primary environmental approvals for Pluto LNG allow for
two LNG trains and supporting infrastructure, and its commercial
structure is designed to facilitate third-party gas processing. An
area for a second train was pre-prepared with the foundation
project in 2007-2008. Minimal further earthworks are required
for Pluto Train 2.
In 2019, Bechtel Australia, as the appointed FEED engineering,
procurement and construction contractor for Pluto Train 2,
executed FEED activities and provided a lump sum price and
schedule for the execute phase.
Development approval was secured in Q4 2019 for a 2,500-bed
construction accommodation village in Karratha.
FEED activities commenced for the modification required
to Pluto Train 1 for processing approximately 1.5 Mtpa of
Scarborough gas.
Woodside is targeting FID for Pluto Train 2 in 2020 and first
cargo in 2024.
Woodside interest: 100%
Woodside Petroleum Ltd | Annual Report 2019
33
BROWSE
2019
Highlights
+ Completed Basis of Design
2020
Activities
+ Finalise gas processing agreement
+ Completed Economic Impact Assessment
+ Finalise agreements with the State
+ Commenced primary environmental
approvals public comment period
+ Targeting FEED entry in 2020
+ Apply for production licences over Calliance
and Torosa
Comprising the Brecknock, Calliance and Torosa fields, the
Browse resource is located in the offshore Browse Basin,
approximately 425 km north of Broome in Western Australia.
The Browse resource contains an estimated contingent
resource (2C) of 4.3 Tcf of dry gas and 119 MMbbl of condensate
Woodside share (13.9 Tcf of dry gas and 390 MMbbl of
condensate, 100%).
The proposed Browse development has delivered against key
technical, commercial, regulatory and environmental milestones
in 2019.
The basis of design was completed in May 2019, representing the
primary technical deliverable for the concept definition phase.
The Calliance and Torosa preliminary field development plan
was submitted to the National Offshore Petroleum Titles
Administrator and the Western Australian Department of Mines,
Industry Regulation and Safety in September 2019.
The geophysical, geotechnical and environmental surveys for the
Browse export trunkline were safely completed in August 2019.
Concept definition engineering for the wells, FPSOs, subsea,
umbilicals, risers, flowlines and trunkline was completed in Q3
2019. Joint technical studies between the Browse and NWS joint
ventures for modifications required to KGP were substantially
progressed in 2019.
The environmental impact statement/environmental
review document was submitted to the Western Australian
Environmental Protection Authority and the Commonwealth
Department of the Environment and Energy in November 2019.
An extended public comment period for the documents opened
18 December 2019 and closed on 12 February 2020.
Progress continues to be made on the gas processing agreement
negotiations between the NWS Project and the Browse Joint
Venture. The NWS State Agreement Act amendments were
tabled in Parliament in October 2019.
The Browse Joint Venture is ready to commence FEED, subject
to completion of gas processing agreement negotiations. The
FEED phase involves activities required to finalise the costs
and technical definition ahead of FID, and to prepare for the
post-FID execution phase, including preparation of contracts.
Further engineering definition work is continuing in the lead
up to FEED entry.
The Browse development concept utilises two FPSO facilities
and is designed to deliver 12 Mtpa of LNG/LPG and domestic
gas through an approximately 915 km trunkline to existing NWS
infrastructure, with condensate processed on the FPSOs.
Woodside is targeting FID in late 2021, RFSU for the first FPSO in
2026 and RFSU for the second FPSO in 2027.
Woodside interest: 30.6%
34 Woodside Petroleum Ltd | Annual Report 2019
SANGOMAR FIELD DEVELOPMENT
2019
Highlights
+ Exploitation Plan approved
+ Achieved FID on Phase 1¹
+ Commenced execute phase¹
1. Subsequent to the period
2020
Activities
+ Continue project execution
+ Prepare for exploration and development
drilling campaign
+ Progress future opportunities
In January 2020, Woodside took unconditional FID for the
Sangomar Field Development Phase 1 (Sangomar Development)
and execution phase activities commenced. This followed the
Government of Senegal grant of the Exploitation Authorisation.
The Sangomar field (formerly the SNE field), located 100 km
offshore to the south of Dakar, is within the Sangomar Deep
Offshore permit area and contains estimated oil resources
of 484 MMbbl (100%, including Phase 1), across a number of
reservoirs.
Activities in 2019 prepared for approval of the Sangomar
Development and included the completion of front-end
engineering design (FEED) activities. The FEED phase
comprised activities required to finalise the costs and technical
definition for the proposed development ahead of the execute
phase.
As part of the commencement of execute phase activities,
Woodside issued in January 2020 the contract for the floating
production storage and offloading (FPSO) facility and issued full
notices to proceed for the drilling and subsea construction and
installation contracts.
Phase 1 of the development will target an estimated 231 MMbbl
of oil resources (100%, 60 MMbbl (2P) reserves Woodside net
economic interest) from the lower, less complex reservoirs, and
a pilot phase in the upper reservoirs.
Phase 1 of the Sangomar Development consists of 23 subsea
wells tied back to a stand-alone floating production storage
and offloading (FPSO) facility with supporting subsea
infrastructure. The FPSO is expected to have a production
capacity of 100,000 bbl/day, and will process the oil before it
is exported to market by tankers.
In addition to Phase 1, Woodside continues to work with the
Ministry of Petroleum and Energies and Petrosen to progress
subsequent oil opportunities as well as potentially exporting
pipeline gas to shore in future phases of the development. This
is in addition to the Sangomar Field Development joint venture
continuing to pursue opportunities for the other discoveries
located in the Rufisque Offshore and Sangomar Offshore
blocks, following a detailed 3D high definition seismic survey
undertaken in 2019.
Our sustainable approach is fundamental to maintaining
our social licence to operate through delivery of long-term
economic and social benefits to the people of Senegal. This
includes a commitment to ongoing engagement with a wide
range of stakeholders including government authorities,
businesses and local communities so that all stakeholders
understand the potential benefits of the joint venture’s activities
and the ways in which they can provide feedback.
First oil is targeted in 2023.
Woodside interest: 35%
Conceptual image of the Sangomar Field Development Phase 1 development concept, not to scale.
Woodside Petroleum Ltd | Annual Report 2019
Woodside Petroleum Ltd | Annual Report 2019
35
35
MYANMAR A-6
2019
Highlights
+ Completed concept selection and
definition studies
+ Commenced pre-FEED
2020
Activities
+ Targeting FEED entry in 2020
+ Conduct site surveys and engineering studies
+ Progress key regulatory approvals and
commercial agreements
The A-6 Development will target the development of an
estimated contingent resource (2C) of 0.6 Tcf of dry gas
Woodside net economic interest (2.2 Tcf of dry gas, 100%) from
Block A-6 offshore Myanmar, following the success of the Shwe
Yee Htun-1, Pyi Thit-1 and the Shwe Yee Htun-2 wells.
The development concept includes the drilling of six wells
in Phase 1 and up to four additional wells in Phase 2 in a water
depth of 2,000-2,300m. The wells will be linked to a subsea
gathering system routed up the continental shelf slope to a
shallow water processing platform. The gas will then be exported
via a 240 km export pipeline to a riser platform, which is located
near to the existing Yadana platform complex. The riser platform
will distribute gas by the existing pipeline infrastructure to
Myanmar and Thailand.
be installed in the first phase. The second phase, comprising infill
wells, installation of compression modules and a second subsea
flowline, will be timed according to reservoir performance.
Woodside, the Block A-6 joint venture partners and Myanma
Oil & Gas Enterprise (MOGE) executed in December 2019 the
Fourth Amendment and Supplementary Agreement to the
Production Sharing Contract, and the Agreement on Upstream
and Midstream Ratio. These demonstrate strong progress towards
commercialisation of the resource.
At this time, the A-6 Development moved from the concept select
phase to the pre-FEED phase.
The A-6 Development is targeting FEED entry in 2020, at which
time Total will assume operatorship.
The development will be phased so that the majority of the
wells, flowline, platform, export pipeline and riser platform will
Woodside interest: 40%
Yangon
Pipeline
to Yangon
Riser
platform
Export pipeline
Pipeline
to Thailand
Yadana
platform
Processing platform
Existing
Proposed
Conceptual image, not to scale. Developments are subject to joint venture approvals, regulatory approvals and relevant commercial arrangements.
36 Woodside Petroleum Ltd | Annual Report 2019
KITIMAT LNG
Kitimat LNG comprises upstream resources in the Liard Basin in
northeast British Colombia, supported by a development concept
which includes a 471 km Pacific Trail Pipeline and a natural gas
liquefaction facility at Bish Cove near Kitimat, Canada.
In response to changing LNG market conditions and global
energy prices, we are focused on improving the cost
competitiveness of Kitimat LNG. Since 2015, we have made
significant progress in enhancing the project’s competitiveness,
reducing LNG unit costs by over 45% and incorporating a new all-
electric LNG facility design to reduce greenhouse gas emissions.
The new Kitimat LNG design eliminates the need for natural
gas fired turbines and will be the first all-electric LNG facility in
the world to be fully powered by hydroelectricity. This e-drive
concept will enable Kitimat LNG to achieve lower emissions
intensity. Kitimat LNG carbon emissions intensity will be
approximately 4 Mtpa lower compared to a US Gulf Coast
gas fired LNG facility.
In December 2019, Kitimat LNG received approval from the
Canadian National Energy Board for a new natural gas export
licence to increase LNG production from 10 to 18 Mtpa through a
foundation project of two 6 Mtpa LNG trains with a possible third
train expansion.
Environmental approval work is ongoing with the Impact
Assessment Agency of Canada and the British Columbia
Environmental Office.
Kitimat LNG continues to receive strong support from
communities and First Nations along the project’s entire value
chain. This includes benefits agreements with the Haisla Nation
associated with the LNG facility, and an agreement with all 16
First Nations along the proposed Pacific Trail Pipeline route
through the First Nations Limited Partnership (FNLP).
Woodside interest: 50%
SUNRISE
Australia’s and Timor-Leste’s new treaty to establish their
permanent maritime boundaries in the Timor Sea entered into
force on 30 August 2019.
The new treaty provides a pathway for the development of Greater
Sunrise. This is subject to the underlying arrangements, including
the new Greater Sunrise production sharing contract (PSC) and
agreed fiscal regime, being on terms and conditions equivalent to
the existing regime and giving 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 and are ongoing.
While the new PSC arrangements are being negotiated, the Sunrise
Joint Venture will continue to 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.
Woodside interest: 33.44%
Woodside Petroleum Ltd | Annual Report 2019
37
E
T
A
R
O
P
R
O
C
38 Woodside Petroleum Ltd | Annual Report 2019
RISK
Woodside maintains a robust and disciplined focus on
effective risk management. We do this to manage risk and
uncertainty, to help achieve our business objectives.
Our Risk Management Framework is designed to provide a consistent
approach to the identification, assessment and management of risks that
have the potential to materially impact Woodside’s short and longer term
objectives.
The Framework is aligned with the intent of the International Standard
ISO31000 for risk management and assesses potential risk in areas such
as health and safety, environment, finance, reputation and brand, legal and
compliance, social and compliance consequences.
Consistent with recognised industry practice, the Framework requires a
biannual review by the Audit & Risk Committee of risks to Woodside’s
strategic objectives and material (financial and non-financial) operational
risks.
This process provides a risk profile of the most significant risks at a whole-
of-entity level that, if not managed effectively, could adversely impact
Woodside’s ability to deliver superior shareholder returns.
As a hydrocarbon producer we are exposed to risks associated with the global
development of climate change policies and the transition to a lower-carbon
economy. We are taking an integrated approach to this multi-faceted risk, as
explained on page 39.
2019SUSTAINABLE
DEVELOPMENT
REPORT
Refer to page 10 of the Sustainable Development Report 2019
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/about-us/corporate-governance).
We identify, assess
and manage risks in
order to deliver superior
shareholder returns
Material risks overview
CONTEXT
RISK
MITIGATION
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.
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.
Woodside faces
climate change
related risks
including changes
in product demand,
carbon pricing,
uncertainty
surrounding
future regulatory
frameworks
and increased
stakeholder
expectations.
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 value adding growth through
commercialisation of exploration discoveries
in support of our strategy.
Adjustments to our exploration strategy support the near-
term focus on meeting key milestones for our development
growth projects with the required capital allocation through
2023 to 2025 whilst supporting sustainable growth. Our
disciplined management of opportunities, together with the
application of new technologies and recovery techniques,
further reduces the risk of reserve depletion.
Opportunities to provide value through
growth or divestment of Woodside’s
portfolio incur many risks that may impact
the ability to deliver anticipated value and
meet company objectives and strategy.
Targeted acquisition and divestment activities consistent
with our overarching strategy remain a focus to help deliver
maximum value from the portfolio and ensure sustainability
of the company in an increasingly disruptive environment.
Our processes are designed to realise the value whilst
mitigating the risk of a suboptimal outcome.
Efficient and
cost competitive
commercialisation
of hydrocarbons is
a contributor to our
future growth.
Failure to manage and prioritise our portfolio
of opportunities may impact our ability
to select a concept and front end load (in
support of required commercial agreements)
necessary to secure FID.
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.
Woodside Petroleum Ltd | Annual Report 2019
39
CONTEXT
RISK
MITIGATION
Safe, reliable and
efficient production
supports delivery of
our base business
and growth
opportunities.
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
+ management of
financial risks.
The inability to maintain safe and reliable
operations may result in a sustained,
unplanned interruption to production
and 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, that may result in a loss of
hydrocarbon containment, harm to our
people, environmental damage, diminished
production, additional costs, and impact our
reputation or brand. Key elements of this
risk include base business performance and
preparation for future growth opportunities.
The inability to maintain financial resilience to
internal and external disruptions may impact
our ability to support the development of
growth opportunities and deliver value.
+ 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.
An extensive framework of controls enables the
management of these risks to deliver world-class
operational performance in our base business. This
framework 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 with regulators. The framework identifies
and evaluates key drivers and opportunities to maintain
and improve the operating model and performance,
targeting reliability, cost discipline and strong safety and
environmental performance within both our base business
and future growth opportunities.
Financial strength and performance will enable our
growth strategy and superior Total Shareholder Returns
(TSR). Our growth strategy requires significant capital
expenditure to unlock and develop growth opportunities,
supported by strong underlying cashflows.
+ Uncertainty associated with product demand is
mitigated 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
mitigates this exposure.
+ A flexible approach to capital management enables
this overall level of investment in the different areas of
our business and the mix to be adjusted to reflect the
external environment. Our capital management strategy
focuses on capital allocation, capital discipline and
capital efficiency.
+ We maintain 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 cashflows and is used in our financial
reporting, reducing our exposure to currency
fluctuations.
40 Woodside Petroleum Ltd | Annual Report 2019
CONTEXT
RISK
MITIGATION
Woodside must have
the right capability
and capacity, with
staff performing to
the required level, to
deliver base business
and growth.
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 social licence
to operate, which
requires compliance
with legislation
and maintaining a
high level of ethical
behaviour.
Failure to establish sufficient capability and
organisational culture to support global
operations may impact achievement of our base
business and future growth objectives.
Our longer term strategic capability plan supports the
needs of our base business and growth opportunities.
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, and our
employer of choice credentials to attract high talent
in the market. We are proactively engaging our tier 1
contractors (and suppliers), strengthening alignment
with our Compass values, and are locking in capability
and price to meet upcoming business demands.
Unsuccessful development and delivery of new
technology and new products through innovation
may impact competitive advantage within base
business or fail to establish and commercialise
new growth opportunities or ventures.
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.
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.
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.
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.
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.
Sustainable and
secure digitalisation
of Woodside
to deliver base
business and growth
opportunities.
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).
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 Petroleum Ltd | Annual Report 2019
41
CLIMATE CHANGE
RISK MANAGEMENT
As a supplier of industrial quantities of energy, Woodside faces material business risks and opportunities
due to climate change.
The Task Force for Climate-related Financial Disclosures (TCFD) was established in 2015 and published a set of recommendations in
2017. We manage climate change risk in accordance with our Risk Management Framework and are transparent in related disclosures.
Information is available in our Sustainable Development Report 2019 and our website (www.woodside.com.au), in addition to this
summary of our management of climate change risk.
TCFD
RECOMMENDATION
OUR APPROACH
Governance
Disclose the organisation’s governance around climate-related risks and opportunities
Describe the board’s oversight
of climate-related risks and
opportunities.
Governance responsibility for climate change issues within
Woodside rests with the Board. The Board is supported and
informed by the Sustainability Committee, which comprises six
non-executive directors and meets four times per year.
Describe management’s role in
assessing and managing climate-
related risks and opportunities.
The executive leadership team provides twice yearly governance
over climate change risks in line with the Woodside risk
management process.
MORE
INFORMATION
+ Corporate Governance
Statement, p 14
+ Sustainable
Development
Report 2019, p 13-14
The Vice President Health Safety Environment and Quality is
accountable for managing climate change risk. The Executive
Vice President Operations is accountable for the overall
management of this risk.
Strategy
Disclose the actual and potential impacts of climate-related risks and opportunities on the organisation’s businesses, strategy,
and financial planning where such information is material
+ Corporate Governance
Statement, p 18-19
+ Strategy and capital
management, p 18-19
+ Sustainable
Development
Report 2019, p 26-29
Describe the climate-related
risks and opportunities the
organisation has identified
over the short-, medium-, and
long-term.
Describe the impact of climate-
related risks and opportunities
on the organisation’s businesses,
strategy, and financial planning.
Describe the resilience of the
organisation's strategy, taking
into consideration different
climate-related scenarios,
including a 2°C or lower scenario.
Woodside sees both opportunities and risks with climate change,
related to challenges reducing emissions, meeting stakeholder
expectations and adapting to climate change. Opportunities
exist to provide lower-emission forms of energy.
Climate change is Woodside’s most sensitive sustainability
issue and a strategic business risk. As well as assessing the
resilience of our existing business, we have recently established
a Sustainability Division, which includes responsibility for carbon
offsets and hydrogen business development. These emerging
areas will be allocated capital, in accordance with existing
business processes.
In testing the resilience of our portfolio, we consider sensitivities
across a range of variables including commodity prices, carbon
prices, length of asset life, exchange rates and interest rates. The
values of these sensitivities are based on several internal and
external scenarios, including the International Energy Agency
sustainable development scenario (SDS), which aligns with
holding global temperature rises below 2 degrees Celsius this
century.
In all these scenarios, both our existing assets and mature
growth opportunities would make a positive contribution to
shareholder value and operating cashflows, whilst our product
helps to counteract energy poverty and improve air quality in
the world.
42 Woodside Petroleum Ltd | Annual Report 2019
MORE
INFORMATION
+ Risk, p 39
+ Sustainable
Development
Report 2019, p 13-14
TCFD
RECOMMENDATION
OUR APPROACH
Risk management
Disclose how the organisation identifies, assesses, and manages climate-related risks
Describe the organisation’s
processes for identifying and
assessing climate-related risks.
The objective of our risk management system is to provide a
consistent process for the recognition and management of risks
across Woodside’s business.
Describe the organisation’s
processes for managing climate-
related risks.
Describe how processes for
identifying, assessing, and
managing climate-related
risks are integrated into the
organisation’s overall risk
management.
Woodside’s Risk Management Procedure defines the minimum
mandatory requirements of Woodside’s risk management process
which enables the organisation to understand and manage
risk, including climate change risk, to a level which protects the
business and helps deliver on objectives and growth aspirations.
Woodside considers climate change to be one of the 10 corporate
Strategic Risks, which means that it applies globally and has
significant oversight from the Executives and Board.
Management at all levels has accountability for managing
these risks in their area in accordance with Woodside’s values
(Our Compass).
Metrics and targets
Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information
is material
Disclose the metrics used by the
organisation to assess climate-
related risks and opportunities
in line with its strategy and risk
management process.
Disclose Scope 1, Scope 2, and, if
appropriate, Scope 3 greenhouse
gas (GHG) emissions, and the
related risks.
Describe the targets used by
the organisation to manage
climate-related risks and
opportunities and performance
against targets.
We use a range of internal and external metrics, which vary over
the years, to assess climate-related risks and opportunities in line
with our strategy and risk management process.
+ Sustainable
Development
Report 2019, p 26-29
Our 2019 equity greenhouse gas emissions were:1
+ Scope 1: 3.3 MtCO2-e
+ Scope 2: 0.01 MtCO2-e
+ Scope 3 (use of sold product): 27.9 MtCO2-e
We are working towards our target of 5% energy efficiency
improvement against baseline (2016-2020) and have set a new
5% target for 2021-2025.
We have also established a new target to offset global portfolio
equity reservoir CO2 from 2021.
Woodside’s aspiration is to be carbon neutral by 2050.
1. Scope 1 and 3 emissions are calculated on an equity share basis, scope 2 emissions are reported on an operated basis.
Woodside Petroleum Ltd | Annual Report 2019
43
RESERVES AND RESOURCES
Approval of the Sangomar Field Development Phase 1 contributed 60 MMboe of Proved plus Probable
(2P) Undeveloped Reserves. Start-up of the Greater Enfield Development and PLA07 contributed
Proved plus Probable (2P) Developed Reserves of 41 MMboe and 53 MMboe respectively. Application of
full waveform inversion 3D seismic reprocessing and updated petrophysical integration for Scarborough
contributed a 502 MMboe increase in Best Estimate (2C) Contingent Resource.
Woodside’s reserves1,2,3,4 and contingent resources⁵ overview* (Woodside share, as at 31 December 2019)
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
2019 reserves replacement ratio15
Organic 2019 reserves replacement ratio16
Three-year reserves replacement ratio
Organic three-year reserves replacement ratio
Reserves life17
Annual production18
Net acquisitions and divestments
Dry gas
Bcf
4,078.2
2,207.1
1,871.2
5,646.5
3,098.0
2,548.5
32,134.8
%
%
%
%
Years
MMboe
MMboe
Condensate
MMbbl
Oil
MMbbl
71.5
38.4
33.1
100.0
54.7
45.3
212.6
83.8
40.4
43.4
122.4
61.2
61.2
129.0
Total
MMboe
870.8
466.1
404.8
1,213.0
659.4
553.6
5,979.3
Proved
Proved plus Probable
52
52
24
24
9
92.1
0.0
73
73
16
16
13
92.1
0.0
1P Reserves
2P Reserves
2C Contingent resources
8
0
5
,
1
2
4
4
,
1
8
2
3
,
1
4
3
3
,
1
8
3
2
,
1
3
1
2
,
1
0
5
1
,
1
8
3
0
,
1
0
8
0
,
1
1
1
0
,
1
e
o
b
M
M
5
1
9
1
7
8
e
o
b
M
M
9
7
9
5
,
7
1
5
5
,
4
1
0
5
,
2
1
0
5
,
8
9
3
4
,
e
o
b
M
M
3
4
7
,
1
2014
2015
2016
2017
2018
2019
2014
2015
2016
2017
2018
2019
2014
2015
2016
2017
2018
2019
44 Woodside Petroleum Ltd | Annual Report 2019
Proved (1P) and Proved plus Probable (2P) developed and undeveloped reserves annual reconciliation by product*
(Woodside share, as at 31 December 2019)
Dry gas⁶
Bcf⁸
Condensate⁷
MMbbl⁹
Oil
MMbbl
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
(
)
P
1
(
d
e
v
o
r
P
4,494.7
6,052.7
-6.0
32.8
-
-
3.4
33.7
-
-
443.3
443.3
4,078.2
5,646.5
80.1
-0.1
0.3
-
-
8.8
71.5
l
s
u
p
d
e
v
o
r
P
l
e
b
a
b
o
r
P
)
P
2
(
108.2
0.2
0.3
-
-
8.8
100.0
)
P
1
(
d
e
v
o
r
P
46.4
0.7
42.3
-
-
5.6
83.8
l
s
u
p
d
e
v
o
r
P
l
e
b
a
b
o
r
P
)
P
2
(
67.7
0.0
60.3
-
-
5.6
122.4
)
P
1
(
d
e
v
o
r
P
915.0
-0.5
48.4
-
-
92.1
870.8
l
s
u
p
d
e
v
o
r
P
l
e
b
a
b
o
r
P
)
P
2
(
1,237.8
0.8
66.6
-
-
92.1
1,213.0
Reserves at 31 December 2018
Revision of previous estimates19
Transfer to/from reserves
Extensions and discoveries20
Acquisitions and divestments
Annual production
Reserves at 31 December 2019
*Small differences are due to rounding.
Best Estimate Contingent resources (2C) annual
reconciliation by product* (Woodside share, as at
31 December 2019)
Best Estimate Contingent resources (2C) summary
by region* (Woodside share, as at 31 December 2019)
Dry gas
Bcf
Condensate
MMbbl
Oil
MMbbl
Total
MMboe
29,124.2
214.1
193.6
5,517.2
-33.6
-0.3
-59.6
-65.9
3,044.2
-1.1
-5.0
527.9
-
-
-
-
-
-
-
-
Project
Greater Browse26
Greater Sunrise28
Greater Pluto
Greater Exmouth
North West Shelf
Wheatstone
Canada30
Senegal25
Greater
Scarborough27
Myanmar29
Total
Dry gas
Bcf
Condensate
MMbbl
Oil
MMbbl
Total
MMboe
4,257.8
1,716.8
591.2
307.4
257.6
20.3
15,021.1
88.8
9,275.1
598.8
32,134.8
119.4
75.6
7.9
2.1
7.4
0.3
-
-
-
-
-
-
-
32.0
11.7
-
-
85.3
-
-
866.4
376.7
111.6
87.9
64.3
3.9
2,635.3
100.8
1,627.2
105.1
212.6
129.0
5,979.3
32,134.8
212.6
129.0
5,979.3
*Small differences are due to rounding.
Contingent Resources
at 31 December 2018
Transfer to/from
Reserves
Revision of previous
estimates19
Extensions and
discoveries20
Acquisitions and
divestments
Contingent Resources
at 31 December 2019
*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
871
MMboe
1,213
MMboe
5,979
MMboe
Greater Pluto
Greater Exmouth
Senegal
North West Shelf
Wheatstone
%
23
19
%
49
4
5
Greater Pluto
Greater Exmouth
Senegal
%
%
50 North West Shelf 20
21
Wheatstone
4
5
Greater Browse
Greater Pluto
North West Shelf
Canada
Greater Scarborough
%
15
2
2
44
27
Greater Sunrise
Greater Exmouth
Wheatstone
Senegal
Myanmar
%
6
1
1
2
2
Woodside Petroleum Ltd | Annual Report 2019
45
Proved (1P) Developed and Undeveloped reserves by region*
Dry gas
Bcf
Condensate
MMbbl
Oil
MMbbl
d
e
p
o
e
v
e
D
l
l
d
e
p
o
e
v
e
d
n
U
l
a
t
o
T
964.5 1,256.3
2,220.8
882.3
102.3
984.6
-
-
-
360.2
512.6
872.8
-
-
-
d
e
p
o
e
v
e
D
l
13.5
16.6
-
8.4
-
l
d
e
p
o
e
v
e
d
n
U
21.5
3.1
-
8.5
-
d
e
p
o
e
v
e
D
l
-
9.3
31.1
-
-
l
a
t
o
T
35.0
19.7
-
16.8
-
2,207.1
1,871.2
4,078.2
38.4
33.1
71.5
40.4
l
d
e
p
o
e
v
e
d
n
U
-
-
1.0
-
42.3
43.4
Total
MMboe
l
d
e
p
o
e
v
e
d
n
U
l
a
t
o
T
d
e
p
o
e
v
e
D
l
l
a
t
o
T
-
182.7
241.9
424.6
9.3
180.7
21.0
201.7
32.2
-
42.3
83.8
31.1
71.6
1.0
32.2
98.4
170.0
-
42.3
42.3
466.1
404.8
870.8
Greater Pluto21
North West Shelf22
Greater Exmouth²³
Wheatstone24
Senegal25
Reserves
*Small differences are due to rounding.
Proved plus Probable (2P) Developed and Undeveloped reserves by region*
Dry gas
Bcf
Condensate
MMbbl
d
e
p
o
e
v
e
D
l
l
d
e
p
o
e
v
e
d
n
U
l
a
t
o
T
1,511.5
1,678.1
3,189.6
1,075.1
116.1
1,191.2
-
-
-
d
e
p
o
e
v
e
D
l
20.5
22.2
-
l
d
e
p
o
e
v
e
d
n
U
29.2
3.5
-
Oil
MMbbl
l
d
e
p
o
e
v
e
d
n
U
-
-
d
e
p
o
e
v
e
D
l
-
11.7
Total
MMboe
l
d
e
p
o
e
v
e
d
n
U
l
a
t
o
T
d
e
p
o
e
v
e
D
l
l
a
t
o
T
-
285.7
323.6
609.3
11.7
222.6
23.9
246.4
l
a
t
o
T
49.7
25.7
-
49.4
0.9
50.3
49.4
0.9
50.3
511.4
754.3
1,265.7
12.0
12.6
24.6
-
-
-
-
-
-
-
-
-
-
101.7
144.9
246.6
60.3
60.3
-
60.3
60.3
3,098.0 2,548.5 5,646.5
54.7
45.3
100.0
61.2
61.2
122.4
659.4
553.6
1,213.0
Greater Pluto
North West Shelf
Greater Exmouth
Wheatstone
Senegal
Reserves
*Small differences are due to rounding.
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, 95%
of Woodside’s Proved Reserves have been externally verified by
independent review over the past four years.
Unless otherwise stated, all petroleum resource estimates are
quoted as net Woodside share at standard oilfield conditions of
14.696 pounds per square inch (psi) (101.325 kPa) and 60 degrees
Fahrenheit (15.56 degrees Celsius).
Qualified petroleum reserves and resources
evaluator statement
The Reserves and Resources Statement is based on and fairly
represents information and supporting documentation prepared
by qualified petroleum reserves and resources evaluators. The
Reserves and Resources Statement has been approved by Mr Ian
F. Sylvester, Woodside’s Vice President of Reservoir Management,
who is a full-time employee of the company and a member of
the Society of Petroleum Engineers. Mr Sylvester’s qualifications
include a Master of Engineering (Petroleum Engineering) from
Imperial College, University of London, England, and more than
20 years of relevant experience. Mr Sylvester has consented in
writing to the inclusion of this information in this report.
46 Woodside Petroleum Ltd | Annual Report 2019
Notes to the reserves and resources statement
1
2
3
4
5
6
7
8
9
10
11
12
‘Reserves’ are estimated quantities of petroleum that have been
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.
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.
Woodside uses both deterministic and probabilistic methods for estimation
of petroleum resources at the field and project levels. Unless otherwise
stated, all petroleum estimates reported at the company or region level
are aggregated by arithmetic summation by category. Note that the
aggregated Proved level may be a very conservative estimate due to the
portfolio effects of arithmetic summation.
Woodside reports reserves net of the fuel and flare required for production,
processing and transportation up to a reference point. For offshore
oil projects the reference point is defined as the outlet of the floating
production storage and offloading (FPSO) facility, while for onshore gas
projects the reference point is defined as the inlet to the downstream
(onshore) processing facility. Downstream fuel and flare represents 9.2% of
Woodside’s Proved (Developed and Undeveloped) reserves, and 9.2% 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.
‘Condensate’ is defined as ‘C5 plus’ petroleum components.
‘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
15
16
17
18
‘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.
The ‘reserves replacement ratio’ is the reserves (Developed and
Undeveloped) change during the year, before the deduction of production,
divided by production during the year. The ‘three-year reserves replacement
ratio’ is the reserves (Developed and Undeveloped) change over three
years, before the deduction of production for that period, divided by
production during the same period.
The ‘organic annual reserves replacement ratio’ is the reserves (Developed
and Undeveloped) change during the year, before the deduction of
production and adjustment for acquisition and divestments, divided by
production during the year.
The ‘reserves life’ is the reserves (Developed and Undeveloped) divided by
production during the year.
‘Annual production’ is the volume of dry gas, condensate and oil produced
during the year and converted to ’MMboe’ for the specific purpose of
reserves reconciliation and the calculation of reserves replacement ratios.
The ‘Reserves and Resources Statement’ annual production differs from
production volumes reported in the company’s annual and quarterly reports
due to differences between the sales and reserves product definitions,
differences between the Woodside equity share of NWS domestic gas
production and independently marketed pipeline gas sales, reserves being
reported gross of downstream fuel and flare and the ‘MMboe’ conversion
factors applied.
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 ‘North West Shelf’ (NWS) includes all oil and gas fields within the NWS
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 21.5% of NWS Proved (Developed and Undeveloped) dry gas
reserves, 30.5% of NWS Proved (Developed and Undeveloped) condensate
reserves.
23 The ‘Greater Exmouth’ region comprises Vincent, Enfield, Greater Enfield,
Greater Laverda, Ragnar and Toro fields.
24 The ‘Wheatstone’ region comprises the Julimar and Brunello fields.
25 The ‘Senegal’ region comprises the Sangomar field. The Developed and
Undeveloped reserves comprise of oil estimates. The Best Estimate (2C)
Contingent resources include gas and oil estimates.
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 Shwe Yee Htun, Pyi Thit and Thalin
fields.
30 The ‘Canada’ region comprises unconventional resources in the Liard Basin.
31
Material concentrations of undeveloped reserves in Greater Pluto and
North West Shelf have remained undeveloped for longer than 5 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 | Annual Report 2019
47
E
C
N
A
N
R
E
V
O
G
WOODSIDE BOARD
OF DIRECTORS
Richard Goyder, AO
Peter Coleman
Larry Archibald
Frank Cooper, AO
Swee Chen Goh
Christopher Haynes, OBE
Ian Macfarlane
Ann Pickard
Sarah Ryan
Gene Tilbrook
48 Woodside Petroleum Ltd | Annual Report 2019
WOODSIDE BOARD
OF DIRECTORS
Richard Goyder, AO
BCom, FAICD
Chairman: Chairman since 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 & Governance
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.
Member: Evans and Partners Investment Committee.
Directorships of other listed entities within the past three
years: Wesfarmers Limited (2002 to 2017).
Peter Coleman
BEng, MBA, FTSE, MAICD, D.Law (Hon)
CEO and Managing Director Term of office: Director since
May 2011
Independent: No
Experience: More than 35 years in the global oil and gas business,
including 27 years’ experience with the ExxonMobil group.
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
Larry Archibald
BSc (Geosciences), BA (Geology), MBA
Term of office: Director since February 2017
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 & Governance Committees.
Current directorships/other interests:
Chair: University of Arizona Geosciences Advisory Board.
Directorships of other listed entities within the past three
years: Nil
Frank Cooper, AO
BCom, FCA, FAICD
Term of office: Director since February 2013
Independent: Yes
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 & Governance 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 and
ASIC Corporate Governance Consultative Panel.
President: Western Australia division of the Australian
Institute of Company Directors.
Trustee: St John of God Health Care (since 2015).
Pro Chancellor: University of Western Australia
Directorships of other listed entities within the past three
years: Nil
Woodside Petroleum Ltd | Annual Report 2019
49
Swee Chen Goh
BSc (Information Science), MBA
Term of office: Director since January 2020
Independent: Yes
Experience: Joined Shell in 2003 and retired as Chairperson of
the Shell companies in Singapore in January 2019. Served on
the boards of a number of Shell joint ventures in China, Korea
and Saudi Arabia and has extensive board and governance
experience. Prior to joining Shell, worked at Procter & Gamble
and IBM. Gained significant experience in a diverse range of
industries, including oil and gas, consumer goods and IT.
Committee membership: Member of the Human Resources &
Compensation, Sustainability and Nominations & Governance
Committees.
Current directorships/other interests:
Chair: Singapore Institute for Human Resource Professionals
(since 2016) and the National Arts Council Singapore
(since 2019).
Director: Singapore Airlines Ltd (since 2019), Singapore Power
Ltd (since 2019) and CapitaLand Ltd (since 2017).
Advisory Board Member: The Centre for Liveable Cities
Member: Singapore Legal Services Commission.
President: Global Compact Network Singapore.
Trustee: Nanyang Technological University.
Christopher Haynes, OBE
BSc, DPhil, FREng, 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.
Ian Macfarlane
Former Australian Federal Minister
(Resources; Energy; Industry and Innovation), FAICD
Term of office: Director since 2016
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
& Governance Committees.
Current directorships/other interests:
Chief Executive: Queensland Resources Council (since 2016).
Chair: Innovative Manufacturing Co-operative Research Centre.
Member: Toowoomba Community Advisory Committee of the
University of Queensland Rural Clinical School.
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 & Governance Committees.
Committee membership: Member of the Audit & Risk,
Sustainability and Nominations & Governance Committees.
Current directorships/other interests:
Director: KBR Inc. (since 2015).
Current directorships/other interests:
Director: Worley Limited (since 2012).
President: Energy Industries Council (since 2015).
Directorships of other listed entities within the past three
years: Nil
Member: Chief Executive Women and University of Wyoming
Foundation Board.
Directorships of other listed entities within the past three
years: Nil
50 Woodside Petroleum Ltd | Annual Report 2019
Melinda Cilento
BA, BEc (Hons), MEc
Ms Melinda Cilento retired effective on 2 May 2019 after
10 years of service on Woodside’s Board of Directors.
Ms Cilento served on a number of Woodside Board
committees including as Chair of the Human Resources &
Compensation Committee and a member of the
Sustainability and Nominations Committees.
Sarah Ryan
BSc (Geology), BSc (Geophysics) (Hons 1), PhD
(Petroleum and Geophysics), FTSE
Term of office: Director since 2012
Independent: Yes
Experience: More than 30 years’ experience in the oil and gas
industry in various technical, operational and senior management
positions, including 15 years with Schlumberger Ltd. From 2007
to 2017 was an equity analyst, portfolio manager and energy
advisor for Earnest Partners.
Committee membership: Member of the Audit & Risk,
Sustainability and Nominations & Governance Committees.
Current directorships/other interests:
Director: Akastor ASA (since 2014), Aurizon Holdings (since
2019), MPC Kinetic Pty Ltd (since 2016) and Viva Energy Group
Ltd (since 2018).
Member: Chief Executive Women (since 2016) and ASIC
Corporate Governance Consultative Panel (since 2019) and Board
of the Future Battery Industries Co-operative Research Centre
(since 2020).
Directorships of other listed entities within the past three
years: Central Petroleum Limited (2017 to 2018).
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: Chair of the Human Resources &
Compensation Committee. Member of the Audit & Risk and
Nominations & Governance Committees.
Current directorships/other interests:
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: Nil.
Woodside Petroleum Ltd | Annual Report 2019
51
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.
Woodside has early adopted the ASX Corporate
Governance Council’s Corporate Governance Principles
and Recommendations (fourth edition) (ASXCGC
Recommendations) which were released in February 2019.
Throughout the year, Woodside complied with all the ASXCGC
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.
The Chairman of the Board, Mr Richard Goyder is an independent,
non-executive director and a resident Australian citizen. The
Chairman of the Board is responsible for leadership and effective
performance of the Board. The Chairman’s responsibilities are set
out in more detail in the Board Charter.
Mr Goyder is also chairman of Qantas Airways Limited. The
Board considers that neither his chairmanship of Qantas Airways
Limited, nor any of his other commitments listed on page 49,
interfere with the discharge of his duties to the company. The
Board has arrangements in place to ensure ongoing leadership
if unforeseen circumstances mean Mr Goyder is not available.
Mr Goyder’s office is located in the company’s headquarters in
Perth, Western Australia. The Board is satisfied that Mr Goyder
commits the time necessary to discharge his role effectively.
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
AUDIT & RISK
COMMITTEE
HUMAN RESOURCES
& COMPENSATION
COMMITTEE
CHIEF EXECUTIVE OFFICER
NOMINATIONS &
GOVERNANCE
COMMITTEE
SUSTAINABILITY
COMMITTEE
INDEPENDENT
ASSURANCE
MANAGEMENT GOVERNANCE AND ASSURANCE
EXTERNAL AUDIT
STRATEGY
AUTHORITIES
INTERNAL AUDIT
WOODSIDE
MANAGEMENT SYSTEM
INCLUDING WOODSIDE
COMPASS AND POLICIES
RISK MANAGEMENT
OPERATING
STRUCTURE
52 Woodside Petroleum Ltd | Annual Report 2019
DIRECTORS’ REPORT
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 2019.
Directors
Review of operations
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 38 of
the Sustainable Development Report.
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 2019:
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.
The directors of Woodside Petroleum
Ltd in office at any time during or since
the end of the 2019 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 48-51.
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 15 of the Corporate Governance
Statement. For all Board meetings held in
2019, 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 54.
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 $343 million ($1,364 million in
2018).
A review of the operations of the
Woodside Group during the financial year
and the results of those operations are set
out on pages 1-47.
Significant changes in
the state of affairs
The review of operations (pages 1-47) 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
2019 of 55 cents per ordinary share (fully
franked) payable on 20 March 2020.
Type
2019
final
2019
interim
2018
final
Payment
date
20 March
2020
20 September
2019
20 March
2019
Period
ends
Cents
per share
Value
$ millions
Fully
franked
55
518
36
337
852
The full-year 2019 dividend was 91 cents per share.
31
December
2019
30
June
2019
31
December
2018
Warren Baillie
LLB, BCom, Grad. Dip. CSP
91
Company Secretary
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 Past President of the Governance
Institute of Australia.
Woodside Petroleum Ltd | Annual Report 2019
53
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.4 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
P Coleman
F Cooper
SC Goh
R Goyder
C Haynes
I Macfarlane
A Pickard
S Ryan
Relevant interest in
Shares
4,403
441,119¹
9,571
Nil2
23,634
10,811
3,835
6,060
8,532
G Tilbrook
1. Mr Coleman also has a relevant interest in 214,973
unvested Restricted Shares and holds Variable Pay
Rights and Performance Rights under his CEO incentive
arrangements, details of which are set out in the
Remuneration Report in Table 13 on page 71 and Table 15
on page 74.
7,949
2. Ms Goh is participating in the Non-Executive Directors’
Share Plan and will acquire shares going forward under
this plan.
Signed in accordance with a resolution of
the directors.
R J Goyder, AO
Chairman
Perth, Western Australia
13 February 2020
P J Coleman
Chief Executive Officer
and Managing Director
Perth, Western Australia
13 February 2020
Auditor’s independence
declaration to the Directors of
Woodside Petroleum Ltd
As lead auditor for the audit of the
financial report of Woodside Petroleum
Ltd for the financial year ended 31
December 2019, 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
13 February 2020
Liability limited by a scheme approved
under Professional Standards Legislation
54 Woodside Petroleum Ltd | Annual Report 2019
REMUNERATION REPORT
Committee Chair’s letter
KMP and summary of Woodside’s five-year performance
Executive Incentive Scheme
Executive KMP remuneration structure
Corporate Scorecard measures and outcomes
Executive KMP KPIs and outcomes for 2019
Other equity plans
Contracts for Executive KMP
Non-executive directors
Human Resources & Compensation Committee
Use of remuneration consultants
Reporting notes
Statutory tables
Glossary
56
57
58
59
61
62
66
67
68
69
69
69
70
75
T
R
O
P
E
R
N
O
I
T
A
R
E
N
U
M
E
R
Woodside Petroleum Ltd | Annual Report 2019
55
Woodside Petroleum Ltd
ACN 004 989 962
Mia Yellagonga
11 Mount Street
Perth WA 6000
Australia
T: +61 8 9348 4000
F: +61 8 9214 2777
woodside.com.au
13 February 2020
Dear Shareholders
On behalf of the Board, I am pleased to present the Remuneration Report for the year ended 31 December 2019.
Our goal in preparing this report is to ensure that our shareholders and stakeholders clearly understand our approach to
remunerating Executives. We focus on the right balance to ensure we can attract and retain the executive talent
required to deliver on Woodside’s long-term strategy whilst aligning with shareholder interests. We have continued to
expand upon the information around the factors and metrics that the Board has considered in determining remuneration
outcomes for 2019.
This is the second year that the Executive Incentive Scheme (EIS) has been in operation, following its introduction in
2018. There have been no changes to the key principles of the EIS in 2019. The Scheme is built upon the Corporate
Scorecard and individual Key Performance Indicators (KPIs) which contribute with equal weightings in determining
award outcomes.
The Corporate Scorecard is based on four equally weighted measures that impact short- and long-term shareholder
value. The Board sets challenging targets for each measure to drive maximum performance throughout the organisation.
The Corporate Scorecard is set out in detail on page 61.
The CEO and Senior Executives are all measured against five objectives (outlined on page 62) to align performance with
the achievement of Woodside’s corporate strategy whilst driving collaboration between Executives.
The Board understands our shareholders’ expectation that it robustly and independently assesses executive and
corporate performance in determining appropriate award outcomes. An important component of this assessment is
reconciling fairly shareholder experience. This assessment is outlined on pages 62 and 64.
Notwithstanding promising progress against our growth plans and best-ever personal safety outcomes, the company
did not achieve all that we set out to achieve. Our reported net profit after tax of $343 million was impacted by the
impairment of our Kitimat LNG asset and a number of business plan priorities were delayed due to difficult conditions.
We did not meet our production target due to extended plant turnarounds and Tropical Cyclone Veronica.
Given this, the Board reduced the NPAT score on the Corporate Scorecard to 0 which resulted in an overall Corporate
Scorecard outcome of 4.75 (out of a maximum of 10). As a consequence, the Board has determined that the Executive
KMP will receive a below target award under the EIS to reflect these challenges. Furthermore the CEO has agreed to
receive no cash award in 2019, instead receiving this value in Restricted Shares subject to a three-year deferral period.
Overall, the CEO's award has reduced by approximately 17% as a result of these decisions.
During 2019, the 2013 and 2014 awards under the prior incentive plan, the Executive Incentive Plan (EIP), were tested
against their respective RTSR hurdles. This was the re-test for the 2013 award which resulted in 0.1% vesting and the
remaining 34.9% lapsing; while for the first test of the 2014 award, 53.7% vested. The detailed outcomes are in Table 13
on pages 71-72.
We look forward to our ongoing engagement with you and sharing in Woodside’s future success.
Yours sincerely
Gene Tilbrook
Chair of Human Resources & Compensation Committee
56 Woodside Petroleum Ltd | Annual Report 2019
Remuneration Report (audited)
KMP and summary of Woodside’s five-year performance
Woodside’s key management personnel (KMP)
This report outlines the remuneration arrangements in place and outcomes achieved for Woodside’s KMP during 2019.
Woodside’s 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 KMP during 2019 are set out in Tables 1a and 1b.
Table 1a - Executive KMP
Executive Director
Table 1b - Non-executive directors KMP
Richard Goyder (Chairman)
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)1
Shaun Gregory (Executive Vice President Sustainability)2
Reinhardt Matisons (Executive Vice President Marketing, Trading and Shipping)
Meg O’Neill (Executive Vice President Development)3
1. Mr Robert Edwardes ceased being an Executive KMP on 29 September 2019.
2. Mr Shaun Gregory’s title changed from Executive Vice President Exploration and Chief
Technology Officer to Executive Vice President Sustainability on 19 August 2019.
3. Ms Meg O’Neill held the position of Chief Operations Officer until 29 September 2019.
Larry Archibald
Melinda Cilento1
Frank Cooper
Swee Chen Goh2
Christopher Haynes
Ian Macfarlane
Ann Pickard
Sarah Ryan
Gene Tilbrook
1. Ms Melinda Cilento ceased being a director of Woodside on
2 May 2019.
2. Ms Swee Chen Goh was appointed as a non-executive director on
1 January 2020. Details of her remuneration will be disclosed in the
Remuneration Report for the year ending 31 December 2020.
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)1
Earnings per share3
Dividends per share
Share closing price (last trading day of the year)
Production
(US$ million)
(US cents)
(US cents)
(A$)
(MMboe)
2019
343
37
91
34.38
89.6
2018
1,364
148
144
31.32
91.4
20172
1,069
123
98
33.08
84.4
2016
868
104
83
31.16
94.9
2015
26
3
109
28.724
92.2
1. NPAT figure is NPAT attributable to equity holders of the parent. NPAT detail is contained in the Financial Statements on pages 76-119.
2. 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 76-119.
3. Basic and diluted earnings per share from total operations.
4. Share closing price (last trading day) for 2014 was $38.01.
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 executives 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.
Woodside Petroleum Ltd | Annual Report 2019
57
Executive Incentive Scheme (EIS)
The EIS was introduced in 2018. The scheme remunerates executives for delivering 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 is delivered as equity
in a combination of Restricted Shares or
Performance Rights. The Performance
Rights are Relative Total Shareholder
Return (RTSR) tested against
comparator groups, after five years.
STRATEGIC FIT
60% of the award has a five-year
deferral period, which reflects
Woodside’s strategic time horizons
to drive executives to deliver our
strategic objectives with discipline
and collaboration; in turn creating
shareholder value.
The scheme delivers an award to executives which is linked to annual individual and corporate performance, designed to be simple
and transparent. Awards under the EIS are based on performance against the Corporate Scorecard and individual KPIs set for the 2019
performance year.
The Board has strong oversight and governance to ensure that appropriate and challenging targets are set to create a clear link between
performance and reward. The Board has an overriding discretion which it can and does exercise to adjust outcomes in line with shareholder
experience and company or management performance.
Variable Annual Reward (VAR)
The entire EIS award (cash, Restricted Shares and Performance Rights) is subject to performance in the initial 12 month performance period.
Performance
Rights
30%
Performance tested
Subject to a 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
Restricted
Shares
Deferred
Subject to a five-year deferral period
12 Month
Performance
Year
30%
Restricted
Shares
27.5%
Cash
12.5%
Payable following
the end of the
Performance year
Deferred
Subject to a three-year
deferral period
v
a
l
u
e
m
e
t
h
o
d
o
o
g
y
l
A
l
l
o
c
a
t
e
d
u
s
i
n
g
a
f
a
c
e
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
58 Woodside Petroleum Ltd | Annual Report 2019
Executive KMP remuneration structure
Woodside’s remuneration structure for the CEO and Senior Executives is comprised of two components; fixed and variable annual reward.
FIXED ANNUAL REWARD (FAR)
VARIABLE ANNUAL REWARD
+ Based upon the scope of the executive’s
+ Executives are eligible to receive a single variable reward linked to challenging
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.
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) POLICY
The MSR policy reflects the long-term focus of management and aims to further strengthen alignment with shareholders. The policy
requires Senior Executives 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
Restricted Shares and Performance Rights are allocated using a face value allocation methodology. The number of
Restricted Shares and Performance Rights is calculated by dividing the value by the volume weighted average price
(VWAP) in December each year.
Dividends
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.
Clawback provisions
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.
Control event
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.
Cessation of employment
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 while 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.
Woodside Petroleum Ltd | Annual Report 2019
59
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. The Corporate Scorecard targets and individual KPIs 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 Senior Executives. 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 performance
conditions are not achieved. The decision to pay or allocate an EIS award is subject to the overriding discretion of the Board, which
may adjust outcomes in order to better reflect shareholder outcomes, and company or management performance.
INDIVIDUAL KPIs
CORPORATE
SCORECARD
IPF
Equally weighted
See page 62 for details of the CEO’s individual KPIs and page 64 for Senior Executives.
Target variable opportunity for 2019
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 2019 are outlined below.
Position
CEO
Senior Executives
Cash
Minimum opportunity
Target opportunity
Maximum opportunity (% of FAR)
Zero
200
160
300
256
The cash component represents 12.5% of the VAR and is payable following the end of the Performance Year.
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 2019. The remaining two-thirds will be tested against an international group of oil and gas companies, set out in Table 12 on page 70.
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
No vesting
50% vest
Vesting between the 50th and 75th percentile
Vesting on a pro-rata basis
Equal to or greater than 75th percentile
100% vest
CEO target remuneration
Senior Executive target remuneration
FIXED REWARD
VARIABLE REWARD
FIXED REWARD
VARIABLE REWARD
33%
67%
38%
62%
60 Woodside Petroleum Ltd | Annual Report 2019
Corporate Scorecard measures and outcomes
The Board assesses executive performance annually against a balanced scorecard of corporate measures in conjunction with individual key
performance indicators (KPIs) that aim to drive business performance and the creation of shareholder value.
The 2019 Corporate 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 has reduced the NPAT score to 0 which has resulted in the overall Corporate Scorecard outcome being adjusted to 4.75 (out of 10).
NPAT (25%)
0
0
TARGET
TARGET
5
5
MAX
MAX
10
10
OUTCOME
0
Net profit after tax performance is closely aligned with short-term shareholder value creation. NPAT is underpinned by efficient operational performance, and
outcomes are exposed to the upside and downside of oil price and foreign exchange fluctuations, as are returns to shareholders. 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.
2019 PERFORMANCE:
NPAT result was $343 million. The lower than target result was primarily due to the impairment of Kitimat LNG asset and additional impacts from extended plant
turnarounds and Tropical Cyclone Veronica.
Production (25%)
0
0
TARGET
TARGET
5
5
MAX
MAX
10
10
OUTCOME
4
Revenue is maximised and value generated from the Company’s assets when they are fully utilised in production. Production must be carefully managed throughout the
year to optimise value from the assets. The production target is set relative to the company’s annual budget and market guidance and is not revised through the year.
2019 PERFORMANCE:
Full year production was 89.6 MMboe, which was within the market guidance of 88 to 94 MMboe but below internal target of 91 MMboe. This was largely due to
extended plant turnarounds and Tropical Cyclone Veronica.
Material Sustainability Issues (25%)
0
0
TARGET
TARGET
5
5
MAX
MAX
10
10
OUTCOME
9
The Board considers performance across material sustainability issues including personal and process safety, environment, emissions reductions, and our social
licence to operate. Strong performance in this area creates and protects value in 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.
2019 PERFORMANCE:
Best-ever personal safety performance with a significantly better than target 12 month TRIR of 0.9 (target 1.29) and a full year without a Tier 1 or Tier 2 loss of
primary containment process safety event. A total of 167kt CO2-e in sustainable emissions reductions improvements was delivered. Completed over 500 community
engagements to support development of social and environmental impact assessments for key growth projects. Social impact management plans are in place for all
communities where Woodside has active development and production activities.
Delivery against Business Priorities (25%)
0
0
5
5
1010
OUTCOME
6
In 2019, we focused on three key business priorities supporting delivery of long-term shareholder value – safe and reliable base business, advancing our Burrup Hub
developments and commercialising our international assets.
2019 PERFORMANCE:
Base Business
• Continued delivery of high reliability and strong unit production performance from our operating assets.
• Greater Enfield Project delivered on schedule without a recordable safety incident and on budget.
• Final investment decisions taken for Pyxis Hub and Julimar-Brunello Phase 2.
• Completed major turnarounds at Pluto, KGP, Goodwyn and North Rankin. Turnarounds were completed without a safety incident, but failure of a major equipment
component delayed start-up at Pluto by over 30 days.
Burrup Hub
• Executed Scarborough and Pluto Train 2 FEED. 52% increase in Scarborough gas resource identified through integrated subsurface analysis.
• Commercial agreements for processing Scarborough gas at Pluto to be finalised. Heads of Agreement signed with BHP agreeing tolling price.
• Completed Basis of Design for Browse and issued the preliminary field development plan. Browse ready to commence FEED, subject to completion of commercial
agreements for tolling gas through the NWS facilities at Karratha.
• Disciplined capital management to support the growth plan including re-activation of dividend reinvestment plan and a Rule 144A/Regulation S senior unsecured
bond issued for US$1.5 billion.
International Assets
• Fiscal terms finalised for A-6 Development in Myanmar and joint venture moved to pre-FEED stage.
• Exploitation plan for the Sangomar Phase 1 development approved by the Senagalese Government in December 2019. Unconditional final investment decision
taken in January 2020.
OVERALL CORPORATE SCORECARD OUTCOME
4.75 /10
Woodside Petroleum Ltd | Annual Report 2019
61
Executive KMP KPIs and outcomes for 2019
CEO KPIs and outcomes
FAR
In February 2019, Woodside conducted a review of the CEO’s remuneration and concluded that no increase would be made to the CEO’s FAR.
VAR
For 2019, the individual performance of the CEO was reviewed by the Board against five equally weighted measures. These metrics, outlined
in Table 4a, were chosen because successful performance in each area is a key driver of superior shareholder returns. The same metrics were
cascaded to the Senior Executives to measure individual performance.
For 2019, the CEO’s individual performance was 1.2. The Board has exercised its discretion to reduce the CEO’s VAR for 2019 to below target to
reflect the overall performance of the organisation. Furthermore, the CEO has agreed to receive no cash award in 2019, instead receiving this
value in Restricted Shares subject to a three-year deferral period. Overall, the CEO's award has reduced by approximately 17% as a result of
these decisions. The 2019 award for the CEO is detailed in Table 6 on page 65. Information on the individual performance of the CEO is shown
in Tables 4a and 4b below.
Table 4a – CEO performance measures
Growth agenda
Objective
Assesses the alignment of growth opportunities
to shareholder return; portfolio balance; the
achievement of challenging business objectives.
2019 outcomes
Substantial progress achieved against growth objectives including execution of FEED for Scarborough and Pluto
Train 2; agreement on tolling price to bring Scarborough gas through Pluto facility; Basis of Design completed for
the Browse development which is FEED ready; FID taken for Pyxis Hub and Julimar-Brunello Phase 2; Sangomar
Phase 1 development exploitation plan approved in 2019 and FID taken in January 2020; entry into
pre-FEED stage for A-6 Development in Myanmar; and $1.7 billion in additional debt funding secured from the
United States and Asian markets providing certainly for growth. Challenges to the growth agenda were the
complexity of commercial negotiations and environmental and regulatory approvals; and several non-commercial
exploration finds.
Effective execution
Objective
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.
2019 outcomes
Strong production performance from all assets despite impact of Tropical Cyclone Veronica and significant plant
turnarounds, though failure of a major equipment component delayed start-up at Pluto by over 30 days. Recorded
best ever personal safety outcome and delivered 167kt C02-e sustainable emissions reduction improvements,
though extended plant turnarounds impacted progress against target of 5% energy efficiency improvements.
Greater Enfield Project and PLA07 infill well was delivered on schedule and on budget.
Enterprise capability
Objective
Assesses leadership development; workforce
planning; executive succession; Indigenous
participation and diversity; effective risk
identification and management.
Culture and reputation
Objective
Assesses performance culture and emphasis on
values; engagement and enablement; improved
employee climate; Woodside’s brand as a
partner of choice.
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.
62 Woodside Petroleum Ltd | Annual Report 2019
2019 outcomes
Continued to build executive capability with internal appointments for EVP Development role and acting EVP
Operations. Female participation increased to 31.8%, well above industry average of 23.9%. Indigenous participation
increased from 130 to 140 employees (3.7% of workforce). Significant advances were made toward remote
operations assets, future artificial intelligence and machine learning capability, with technology enabling a 52%
increase in Scarborough estimated resource volume. Risk management included implantation of a company-wide
assurance framework and development of strategic partnerships designed to enhance long term resilience to
a lower emissions future (e.g. partnership with Greening Australia and exploring opportunities associated with
producing and exporting hydrogen.)
2019 outcomes
Progressed Reconciliation Action Plan commitments with a 3% increase in the value of contracts awarded to
Indigenous businesses and improved conversion of Indigenous trainees to employees to over 50%. Supported the
Uluru Statement from the Heart alongside other ‘Elevate’ RAP partners. Achieved Silver Employer Status in the
Pride in Diversity Australian Workplace Equality Index, which typically represents employers ranked in the top
10-20%. Continued strong performance on a number of recognised external environmental, social and governance
global indices. Positive contribution to host communities through A$17.7 million social investment. Commenced
transition to a predominantly residential operational workforce in Karratha enabling employees to live where they
work and build strong team and community connections.
2019 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.
CEO actual remuneration
FIXED REWARD
34%
Table 4b – CEO 2019 EIS Outcomes
Name
P Coleman
1. The EIS earned reflects the Board’s adjustment to award below target VAR.
2019 Vesting1
P Coleman
2016 deferred short-term award vested on 27 February 2019
2015 deferred short-term award vested on 19 February 2019
VARIABLE REWARD
66%
IPF¹
0.975
Total EIS
earned $¹
$3,684,986
EIS earned as %
of maximum %
65%
2014 long-term award had a partial vesting of 53.7% on 20 February 2019 including an adjustment due to the Retail Entitlement Offer
2013 long-term award had a partial vesting of 0.1% on 6 March 2019
1. Describes vesting related to prior scheme as outlined on pages 71-72.
Shares
48,225
47,905
90,764
55
Woodside Petroleum Ltd | Annual Report 2019
63
Senior Executive KPIs and outcomes
FAR
In January 2019, Woodside conducted a review of Senior Executive remuneration based on benchmarking data against a defined peer group
alongside consideration of executive performance and role accountabilities. This review supported the Board’s decision to award an average
increase of 5.59% in April 2019.
VAR
For 2019, the individual performance of each Senior Executive was evaluated against the same performance measures as the CEO, as
described in Table 4a on page 62, with individual KPIs set relevant to each Senior Executive's area of responsibility. These metrics aim at
aligning individual performance with the achievement of Woodside’s corporate strategy while fostering collaboration between executives.
The Board approved EIS awards to Senior Executives based on the scorecard result and their individual performance assessment, resulting
in an IPF between 0 and 1.6. The Board exercised its discretion to reduce Senior Executives’ VAR for 2019 to below target. Information on the
individual performance of each Senior Executive is shown in Tables 5a and 5b below. Details of the EIS award for each Senior Executive are set
out in Table 6 on page 65.
Table 5a – Senior Executive Individual Performance for 2019 EIS
Senior Executives
Key performance indicators
2019 performance
Michael Abbott
Senior Vice President
Corporate and Legal
Stakeholder engagement; continuous
disclosure compliance; Code of Conduct
and anti-bribery and corruption training;
implementation of company-wide
assurance framework
Successful legal, corporate affairs, governance, risk and compliance support for core
business and growth activities; delivery against stakeholder engagement plans exceeded
targets; no anti-bribery or continuous disclosure breaches; assurance framework
implementation on target.
Sherry Duhe
Executive Vice President
and Chief Financial Officer
Funding and financial risk management;
commercial and contracting support for
growth projects; performance excellence
projects
Increased liquidity at competitive pricing in preparation for growth projects; agreed
tolling price with BHP for processing Scarborough gas through Pluto; progressed
negotiations to process Browse gas at KGP; strong commercial and treasury support in
respect of Sangomar; performance excellence projects progressed to schedule.
Robert Edwardes
Executive Vice President
Development (to
29 September 2019)
Portfolio development; cost and schedule;
portfolio cost competitiveness;
Development HSE
Greater Enfield Project delivered on schedule and on budget; progressed FEED for
Scarborough, Pluto Train 2 and Sangomar on schedule; completed Browse Basis
of Design; Scarborough, Browse and Sangomar cost of supply in line with targets;
Development Division TRIR better than target.
Shaun Gregory
Executive Vice President
Sustainability
Technology delivery; carbon abatement
strategy; hydrogen export opportunity;
exploration value delivery
Increase in Scarborough gas resource enabled through technology; significant advances
toward remote operations assets, future artificial intelligence and machine learning
capability; developed strategic partnerships to further technology, innovation and
hydrogen opportunities; carbon business established and delivering on offset strategy;
handover of Myanmar A-6 project into development phase; restructured exploration on
the back of several non-commercial finds.
Reinhardt Matisons
Executive Vice President
Marketing, Trading and
Shipping
LNG marketing for growth projects; oil and
domestic gas sales; trading performance;
fleet utilisation; LNG transport fuel
SPA executed with Uniper and HOA executed with ENN for long-term LNG supply
underpinning Scarborough development; domestic gas sales, trading performance and
fleet utilisation exceeded targets; LNG trucking business operational ready; progressed
LNG bunkering opportunities.
Meg O’Neill
Executive Vice President
Development (Chief
Operations Officer to
29 September 2019)
(to 29 Sept) Production, operating expense;
unit production costs; Operations HSE
performance.
Production within market guidance though impacted by extended plant turnarounds;
operating expenditure below budget; oil unit production costs better than target; gas
unit production costs close to target; Operations Division TRIR better than target;
emissions reductions improvements delivered; FID taken for Pyxis Hub, Julimar-Brunello
Phase 2 and pipeline component of Pluto-NWS interconnector.
(from 30 Sept) Portfolio development;
cost and schedule; portfolio cost
competitiveness; Development HSE
Executed FEED for Scarborough and Pluto Train 2; progressed Sangomar to FID
readiness (FID taken in January 2020); progressed Myanmar A-6 to concept definition;
Development TRIR better than target.
Senior Executive actual remuneration1
FIXED REWARD
41%
1. This represents an average of all Senior Executives' actual and variable remuneration for 2019.
VARIABLE REWARD
59%
64 Woodside Petroleum Ltd | Annual Report 2019
Table 5b – Senior Executive 2019 EIS Outcomes
Name
M Abbott
S Duhe
R Edwardes2
S Gregory
R Matisons
M O'Neill
1. The EIS earned reflects the Board’s adjustment to award below target VAR.
2. Mr Edwardes ceased being executive KMP on 29 September 2019. In line with this, EIS outcome has been pro-rated.
2019 vestings1
2015 deferred short-term award vested on 19 February 2019
2014 long-term award had a partial vesting of 53.7% on 20 February 2019 including
an adjustment due to the Retail Entitlement Offer
2013 long-term award had a partial vesting of 0.1% on 6 March 2019
Total EIS
earned $¹
649,409
1,036,871
708,140
886,252
731,267
1,318,464
Senior Executives
M Abbott
R Edwardes
S Gregory
R Matisons
M Abbott
R Edwardes
S Gregory
R Matisons
M Abbott
R Edwardes
S Gregory
R Matisons
1. Describes vesting related to prior scheme as outlined on pages 71-72.
Table 6 – Valuation summary of CEO and Senior Executive EIS for 2019 and 2018
Name
P Coleman
M Abbott
S Duhe
R Edwardes4
S Gregory
R Matisons
M O'Neill5
Year
2019²
2018³
2019²
2018³
2019²
2018³
2019²
2018³
2019²
2018³
2019²
2018³
2019²
2018³
Restricted Shares
3 year vesting period
$
1,469,046
Restricted Shares
5 year vesting period
$
1,101,779
Performance Rights
5 year vesting period
$
762,770
1,360,220
1,483,006
177,970
223,799
284,175
322,164
200,697
378,704
242,881
274,206
200,409
241,513
361,351
310,980
194,156
244,160
310,005
351,438
218,951
413,118
264,983
299,134
218,639
263,463
394,204
339,261
851,081
134,415
140,121
214,619
201,686
151,582
237,084
183,450
171,670
151,365
151,198
272,910
194,698
Cash1
-
612,113
81,176
100,721
129,609
144,976
91,540
170,422
110,782
123,403
91,408
108,688
164,808
139,948
EIS earned as % of
maximum %
60.9
60.9
60.9
60.9
60.9
60.9
Shares
4,788
10,507
6,218
5,541
3,903
11,432
6,116
6,263
2
6
3
3
Total EIS $
3,333,595
4,306,420
587,717
708,801
938,408
1,020,264
662,770
1,199,328
802,096
868,413
661,821
764,862
1,193,273
984,887
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 the closing spot rate on 31 December 2019.
2. The number of Restricted Shares and Performance Rights allocated for 2019 was calculated post year end 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 and Performance Rights at their date of grant has been estimated by reference to the closing share price at 31 December
2019 and preliminary modelling respectively. Grant date has been determined to be the date of the Board of Directors approval, being 12 February 2020 and any differences between the estimated
fair value at 31 December 2019 to the final fair value at grant date will be trued-up in the following 2020 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 Restricted Shares and 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 was estimated at 31 December 2018 with reference to the closing share price and preliminary modelling. Grant date was determined to be the
date of the Board of Directors’ approval, being 13 February 2019 and the final fair value was calculated at this date and was trued-up during the 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 Edwardes ceased being Executive KMP on 29 September 2019. In line with this, EIS outcome has been pro-rated.
5. Ms O’Neill commenced employment with Woodside on 1 May 2018.
Woodside Petroleum Ltd | Annual Report 2019
65
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 71-72. 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, after which the Board introduced the EIS. The EIP was
used to deliver short-term award (STA) and long-term award (LTA) to Senior Executives.
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 Senior Executives 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 Senior Executives.
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 is tested against a comparator group that comprises the entities within the ASX 50 index. The remaining two-thirds is
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 Senior Executives 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.
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 71-72.
66 Woodside Petroleum Ltd | Annual Report 2019
CEO STA & LTA
The CEO’s incentive arrangements are governed by his contract of employment. Prior to 2018, 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 71-72.
Woodside Equity Plan (WEP)
The WEP is available to all permanent employees except 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.
For offers prior to 2019, each ER entitled the participant to receive a Woodside share on the vesting date three years after the effective grant
date. For the 2019 award, the Board amended the terms of the Plan to allow for 75% vesting of the ERs three years after the effective grant
date and the remaining 25% of ERs five 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 2019. Table 13 on pages 71-72 includes a summary of Senior Executives 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.
Other 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 first tranche of 59,270 Restricted Shares (representing 44.44% of the
award) vested in full 1 May 2019. The remaining Restricted Shares will vest in two equal tranches on each of 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 pages 71-72.
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
P Coleman
M Abbott
S Duhe
S Gregory
R Matisons
M O’Neill
Employing company
Contract Duration
Termination notice period
company1, 2
Termination notice period
executive
Woodside Petroleum Ltd
Woodside Energy Ltd
Woodside Energy Ltd
Woodside Energy Ltd
Woodside Energy Ltd
Woodside Energy Ltd
Unlimited
Unlimited
Unlimited
Unlimited
Unlimited
Unlimited
12 months
6 months
6 months
6 months
12 months
6 months
6 months
3 months
6 months
3 months
6 months
3 months
1. Termination provisions – Woodside may choose to terminate the contract immediately by making a payment in lieu of notice equal to the fixed remuneration the executive would have
received during the ‘Company Notice Period’. In the event of termination for serious misconduct or other nominated circumstances, executives are not entitled to this termination payment.
Any payments made in the event of a termination of an executive contract will be consistent with the Corporations Act 2001 (Cth).
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.
Woodside Petroleum Ltd | Annual Report 2019
67
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 Human Resources & Compensation Committee based on benchmarking from external
remuneration consultants, and determined by the Board, subject to an aggregate limit of A$4.25 million per financial year, which was
approved by shareholders at the 2019 AGM. The base Board fees and Audit & Risk Chair and Committee fees were increased with effect from
1 July 2019.
The minimum shareholding requirements for NEDs was reviewed in 2018. NEDs are 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 in order to preserve their
independence.
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 $10,000 gross per trip is paid.
Board fees are not paid to the CEO, as the time spent on Board work and the responsibilities of Board membership are considered in
determining the remuneration package provided as part of the normal employment conditions.
The total remuneration paid to, or in respect of, each NED in 2019 is set out in Table 14 on page 73.
Table 9 – Annual base Board and committee fees for NEDs
Human Resources
& Compensation
Committee
Sustainability
Committee
Nominations
Committee
A$
A$
A$
Nil
Nil
59,3604
31,9644
52,0005
26,5005
47,400
23,700
.
Position
Chairman of the Board2
Non-executive
directors3
Committee chair
Committee member
Audit & Risk
Committee
A$
Board1
A$
723,3004
219,1784
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 2019.
5. Annual fee from 1 July 2018.
68 Woodside Petroleum Ltd | Annual Report 2019
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 the remuneration for NEDs and
executive. 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 2019.
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
Fees
PricewaterhouseCoopers
Remuneration benchmarking for the 2019 NED fee review
A$15,000 (ex GST)
Remuneration benchmarking for the 2019 CEO remuneration review
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$2,209,825 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 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.
Woodside Petroleum Ltd | Annual Report 2019
69
Statutory tables
Table 11 - Compensation of CEO and Senior Executives for the year ended 31 December 2019 and 2018
Fixed Annual Reward
Variable Annual
Reward
Short-term
Post
Cash
Share
based
payments
Benefits
and
allowances
(including
non-
monetary)1
Company
contributions
to
superannuation
Salaries,
fees and
allowances
$
$
$
P Coleman
Chief Executive Officer 2019
1,863,173
35,805
14,436
Cash2
$
-
Share
plans3
Long
service
leave
Termination
benefits
Total remuneration4
Performance
related5
$
$
$
$
A$
3,158,361
102,493
M Abbott
Senior Vice President
Corporate and Legal
S Duhe
Executive Vice
President and Chief
Financial Officer6
R Edwardes,
Executive
Vice President
Development7
S Gregory
Executive
Vice President
Sustainability
R Matisons
Executive Vice
President Marketing,
Trading and Shipping
M O’Neill
Executive
Vice President
Development6,8
2018
1,964,585
44,260
15,149
612,113
3,755,729
147,126
2019
399,737
21,666
16,684
81,176
365,771
25,425
2018
430,015
17,060
14,569
100,721
322,263
25,153
2019
682,815
59,566
-
129,609
462,033
30,716
2018
628,922
35,984
7,544
144,976
279,663
15,482
2019
560,055
20,565
10,793
91,540
1,061,792
42,384
2018
790,884
27,563
15,149
170,422
951,554
41,206
2019
545,069
19,892
14,436
110,782
451,928
70,370
2018
532,588
19,062
15,149
123,403
393,253
121,145
2019
453,994
38,313
14,788
91,408
393,203 (20,270)
2018
469,000
19,746
12,977
108,688
357,139
17,299
2019
985,101
61,356
-
164,808
1,360,584
30,764
2018
846,751
129,600
11,531
139,948
1,407,427
15,666
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,174,268
7,443,346
6,538,962
8,807,377
910,459
1,308,973
909,781
1,226,641
1,364,739
1,962,023
1,112,571
1,501,811
1,787,129
2,555,625
1,996,778
2,688,150
1,212,477
1,743,162
1,204,600
1,623,340
971,436
1,396,598
984,849
1,327,826
2,602,613
3,742,420
2,550,923
3,497,641
%
61
67
49
46
43
38
65
56
46
43
50
47
59
61
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 the closing spot rate on 31 December 2019.
3. ‘Share plans’ incorporate all equity based plans. In accordance with the requirements of AASB 2 Share-based Payments, 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 2019 EIS has been measured using estimated fair values as disclosed in footnote 2 in Table 6. 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 outcome percentage is calculated as total Variable Annual Reward divided by the total USD remuneration figure.
6. As non-residents for Australian tax purposes Ms Duhe and Ms O’Neill have elected to receive a cash payment in lieu of all superannuation contributions, in accordance with the
Superannuation Guarantee (Administration) Act 1992. The cash payment is subject to (PAYG) income tax and paid as part of their normal monthly salary. The amount is included in salaries,
fees and allowances.
7. Mr Edwardes ceased being Executive KMP on 29 September 2019. Mr Edwardes’ 2016, 2017, 2018 and 2019 share based payment amortisation expenses have been accelerated based on his
contract end date of 31 March 2020.
8. Ms O’Neill commenced with Woodside on 1 May 2018.
Table 12 - Peer group of international oil and gas companies
Apache Corporation
ConocoPhillips
Hess Corporation
Inpex Corporation
Kosmos Energy
Marathon Oil Company
Murphy Oil Corporation
Oil Search Limited
Origin Energy Limited
Santos Ltd
Tullow Oil PLC
70 Woodside Petroleum Ltd | Annual Report 2019
Table 13 – Summary of CEO and Senior Executives' allocated, vested or lapsed equity
Name
Type of equity1
Grant date
Allocation date
Vesting date2,3
Awarded
but not
vested
Vested in
2019
% of total
vested
Lapsed in
2019
Fair value of
equity4,5,7
P Coleman
Restricted Shares
1 January 2015
19 February 2016
19 February 2019
Restricted Shares
16 December 2016 27 February 2017
27 February 2019
-
-
47,905
48,225
Restricted Shares
1 January 2016
27 February 2017
27 February 2020
48,225
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
Restricted Shares
12 February 2020
18 February 2020
18 February 2023
Restricted Shares
12 February 2020
18 February 2020
18 February 2025
RTSR Tested VPRs
1 January 2013
21 February 2014
6 March 2019
37,822
61,660
67,266
61,083
45,812
-
-
-
-
-
-
-
55
RTSR Tested VPRs
1 January 2014
20 February 2015
20 February 2019
169,0226
90,764
RTSR Tested VPRs
1 January 2015
19 February 2016
19 February 2020
155,402 6
RTSR Tested VPRs
1 January 2016
27 February 2017
27 February 2021
106,067 6
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
Performance Rights
12 February 2020
18 February 2020
18 February 2025
67,266
45,812
-
-
-
-
-
100
-
-
-
-
-
-
-
0.1
53.7
-
-
-
-
-
M Abbott
Restricted Shares
1 January 2015
19 February 2016
19 February 2019
-
4,788
100
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
Restricted Shares
12 February 2020
18 February 2020
18 February 2023
Restricted Shares
12 February 2020
18 February 2020
18 February 2025
RTSR Tested VPRs
1 January 2013
21 February 2014
6 March 2019
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
Performance Rights
12 February 2020
18 February 2020
18 February 2025
WEP Equity Rights
1 October 2017
-
1 October 2020
S Duhe
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
Restricted Shares
12 February 2020
18 February 2020
18 February 2023
Restricted Shares
12 February 2020
18 February 2020
18 February 2025
RTSR Tested VPRs
1 January 2017
20 February 2018
20 February 2022
Performance Rights
13 February 2019
19 February 2019
19 February 2024
Performance Rights
12 February 2020
18 February 2020
18 February 2025
SWEP Equity Rights
1 December 2017
-
1 December 2020
5,339
4,721
10,145
11,068
7,400
8,073
-
7,2696
9,5216
7,0176
6,987
11,068
8,073
1,1616
439
14,604
15,931
11,816
12,890
868
15,931
12,890
15,1536
-
-
-
-
-
-
2
3,903
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
0.1
53.7
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
R Edwardes8
Restricted Shares
1 January 2015
19 February 2016
19 February 2019
-
10,507
100
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 2013
21 February 2014
6 March 2019
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
9,658
6,727
17,167
18,727
-
21,2926
19,5766
13,3616
13,276
18,727
-
-
-
-
6
11,432
-
-
-
-
-
-
-
-
0.1
53.7
-
-
-
-
-
-
-
-
-
-
-
-
55,434
-
-
-
-
-
-
-
-
-
-
-
-
-
2,385
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,987
-
-
-
-
-
31.15
22.73
20.88
22.49
24.71
24.71
24.05
24.05
20.77
17.45
17.39
12.05
12.06
16.87
16.65
31.15
20.88
22.49
24.71
24.71
24.05
24.05
20.77
17.45
17.39
12.05
12.06
16.87
16.65
20.33
22.49
24.71
24.71
24.05
24.05
12.06
16.87
16.65
21.26
31.15
20.88
22.49
24.71
24.71
20.77
17.45
17.39
12.05
12.06
16.87
Woodside Petroleum Ltd | Annual Report 2019
71
Name
Type of equity1
Grant date
Allocation date
Vesting date2,3
Awarded
but not
vested
Vested in
2019
% of total
vested
Lapsed in
2019
Fair value of
equity4,5,7
S Gregory
Restricted Shares
1 January 2015
19 February 2016
19 February 2019
-
6,218
100
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
Restricted Shares
12 February 2020
18 February 2020
18 February 2023
Restricted Shares
12 February 2020
18 February 2020
18 February 2025
RTSR Tested VPRs
1 January 2013
21 February 2014
6 March 2019
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
7,038
4,831
12,430
13,560
10,099
11,018
-
11,3916
10,4726
7,1486
7,150
Performance Rights
13 February 2019
19 February 2019
19 February 2024
13,560
Performance Rights
12 February 2020
18 February 2020
18 February 2025
WEP Equity Rights
1 October 2017
-
1 October 2020
11,018
1,7476
-
-
-
-
-
-
3
6,116
-
-
-
-
-
-
-
-
-
-
-
-
0.1
53.7
-
-
-
-
-
-
R Matisons
Restricted Shares
1 January 2015
19 February 2016
19 February 2019
-
5,541
100
Restricted Shares
1 January 2016
27 February 2017
27 February 2020
Restricted Shares
1 January 2017
20 February 2018
20 February 2021
5,583
3,712
Restricted Shares
13 February 2019
19 February 2019
19 February 2022
10,948
Restricted Shares
13 February 2019
19 February 2019
19 February 2024
Restricted Shares
12 February 2020
18 February 2020
18 February 2023
Restricted Shares
12 February 2020
18 February 2020
18 February 2025
RTSR Tested VPRs
1 January 2013
21 February 2014
6 March 2019
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
Performance Rights
12 February 2020
18 February 2020
18 February 2025
WEP Equity Rights
1 October 2017
-
1 October 2020
M O’Neill
Restricted Shares
13 February 2019
19 February 2019
19 February 2022
Restricted Shares
13 February 2019
19 February 2019
19 February 2022
Restricted Shares
12 February 2020
18 February 2020
18 February 2023
Restricted Shares
12 February 2020
18 February 2020
18 February 2025
Performance Rights
13 February 2019
19 February 2019
19 February 2024
Performance Rights
12 February 2020
18 February 2020
18 February 2025
11,943
8,333
9,091
-
11,666
10,7976
7,3686
7,327
11,943
9,091
1,1616
14,097
15,379
15,025
16,391
15,379
16,391
-
-
-
-
-
-
3
6,263
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
0.1
53.7
-
-
-
-
-
-
-
-
-
-
-
-
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
-
59,270
100
37,048
37,048
-
-
-
-
-
-
-
-
-
-
-
3,532
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,663
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
31.15
20.88
22.49
24.71
24.71
24.05
24.05
20.77
17.45
17.39
12.05
12.06
16.87
16.65
20.33
31.15
20.88
22.49
24.71
24.71
24.05
24.05
20.77
17.45
17.39
12.05
12.06
16.87
16.65
20.33
24.71
24.71
24.05
24.05
16.87
16.65
24.45
24.45
24.45
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 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 2013, 2014, 2015 & 2016 performance years and the 2017 WEP allocations have been updated to include any adjustments made as part of the Retail
Entitlement Offer.
7. Fair values for the 2018 EIS with a grant date of 13 February 2019 have been updated based on grant date fair value as disclosed in footnote 3 of Table 6. Fair values for the 2019 EIS with a grant
date of 12 February 2020 have been estimated as disclosed in footnote 2 of Table 6.
8. Mr Edwardes ceased being an Executive KMP on 29 September 2019.
72 Woodside Petroleum Ltd | Annual Report 2019
Table 14 - Total remuneration paid to NEDs in 2019 and 2018
The following table provides a detailed breakdown of the components of remuneration for each of the company’s NEDs.
Non Executive Director
Short-term
Post employment
Cash salary and fees
Pension / Superannuation
Salaries, fees
Company contributions to
Superannuation $
R Goyder¹
L Archibald
M A Cilento²
F C Cooper
C Haynes
I Macfarlane
A D Pickard
S Ryan
G Tilbrook
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
1. Mr Goyder was appointed Chairman on 20 April 2018.
2. Ms Cilento ceased being a director on 2 May 2019.
543,915
449,968
243,256
216,076
69,586
213,606
216,241
219,354
250,868
216,076
195,759
198,637
258,683
233,162
195,005
197,329
208,721
198,375
14,269
14,969
-
-
6,611
20,293
19,820
20,839
-
-
14,436
15,149
-
-
17,802
18,747
18,829
18,846
Total
$
558,184
464,937
243,256
216,076
76,197
233,899
236,061
240,193
250,868
216,076
210,195
213,786
258,683
233,162
212,807
216,076
227,550
217,221
Woodside Petroleum Ltd | Annual Report 2019
73
Table 15 - KMP share and equity holdings
Details of shares held by KMP including their personally related entities1 for the 2019 financial year are as follows:
Name
Type of equity
Non-executives Directors
Opening
holding at
1 January 2019²
Rights
allocated
in 2019
Rights
vested
in 2019
Restricted
Shares
granted
Net changes -
other
Closing
holding at 31
December 20194
NEDSP³
R Goyder
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
15,634
2,314
4,899
8,240
9,512
1,956
3,818
7,373
7,949
-
2,089
522
1,331
1,299
1,879
2,242
1,159
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8,000
-
(5,421)
-
-
-
-
-
-
(55,434)
Equity Rights
Shares
590,777
466,347
M Abbott
Equity Rights
Shares
S Duhe
Equity Rights
Shares
R Edwardes5
Equity Rights
Shares
S Gregory
Equity Rights
Shares
R Matisons
Equity Rights
Shares
M O'Neill
Equity Rights
34,342
23,084
16,021
439
74,498
63,074
41,443
27,780
41,985
35,700
-
Shares
133,366
-
-
-
-
-
-
-
-
-
-
-
-
-
-
67,266
(90,819)
-
90,819
128,926
(30,000)
11,068
(3,905)
-
(2,385)
-
3,905
21,213
(10,000)
15,931
-
-
-
-
30,535
-
-
18,727
(11,438)
-
(81,787)
-
13,560
11,438
(6,119)
-
35,894
(110,406)
-
6,119
25,990
11,943
(6,266)
-
-
6,266
22,891
15,379
-
-
-
-
29,476
(3,532)
(14,012)
(3,663)
(9,024)
-
-
23,634
4,403
-
9,571
10,811
3,835
6,060
8,532
7,949
511,790
656,092
39,120
38,202
31,952
30,974
-
-
45,352
45,877
43,999
55,833
15,379
162,842
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. 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 2019.
5. Mr Edwardes ceased being Executive KMP 29 September 2019.
74 Woodside Petroleum Ltd | Annual Report 2019
Glossary
Key terms used in the Remuneration Report
Term
Meaning
Committee
The Human Resources & Compensation Committee
Corporate Scorecard
A corporate scorecard of key measures that aligns with Woodside’s overall business performance
EIP
EIS
ER
The Executive Incentive Plan
The 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
Executive
A senior employee whom the Board has determined to be eligible to participate in the EIS
Executive Director
Peter Coleman
Executive KMP
The Executive Director and Senior Executives listed in Table 1a on page 57
KMP
KPI
LTA
MSR
NED
Key management personnel
Key performance indicator
Long-term award
Minimum shareholding requirements
Non-executive director
NEDSP
The Non-executive Director Share Plan
Performance Rights
Each Performance Right 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 Performance Right
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
RTSR
Relative total shareholder return
Senior Executive
A Senior Executive listed as KMP in table 1a on page 57, excluding the Executive Director
STA
SWEP
VAR
VPR
WEP
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
Woodside Petroleum Ltd | Annual Report 2019
75
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
CONTENTS
Financial statements
C. Debt and capital
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated statement of
financial position
77
78
79
Consolidated statement of cash flows 80
C.1 Cash and cash equivalents
C.2 Interest-bearing liabilities and
financing facilities
C.3 Contributed equity
C.4 Other reserves
Consolidated statement of
changes in equity
D. Other assets and liabilities
81
D.1 Segment assets and liabilities
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
82
84
85
87
87
87
87
89
90
91
92
D.2 Receivables
D.3 Inventories
D.4 Payables
D.5 Provisions
D.6 Other financial assets and liabilities 103
D.7 Leases
E. Other items
E.1 Contingent liabilities and assets
E.2 Employee benefits
E.3 Related party transactions
E.4 Auditor remuneration
E.5 Events after the end of the
reporting period
E.6 Joint arrangements
B.4 Impairment of exploration and
E.7 Parent entity information
evaluation and oil and gas properties 93
B.5 Significant production and growth
asset acquisitions
95
E.8 Subsidiaries
E.9 Other accounting policies
Directors’ declaration
Independent audit report
96
97
97
99
99
100
101
101
101
102
102
103
105
106
106
108
108
108
108
109
110
112
113
114
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:
• On 25 August 2019, the Greater Enfield Project commenced production through the Ngujima-Yin
FPSO. The assets’ results for the period are included within the Australia Oil segment of Note A.1.
• The Group raised new debt including a $1,500 million Rule 144A/Regulation S senior unsecured bond
and a $200 million medium term note, and increased the existing unsecured syndicated loan facility to
$1,200 million. For more details, refer to Note C.2.
• The Group reactivated the Dividend Reinvestment Plan (DRP) for the 2019 interim dividend and
issued 6,135,351 ordinary shares at a price of A$31.34 per share. For more details refer to Note C.3.
• The Group adopted AASB 16 Leases (AASB 16) on 1 January 2019. For more details, refer to Note D.7.
• The Group recognised impairment losses of $737 million relating to non-current assets held for sale
and exploration and evaluation, refer to Notes A.1 and B.4.
76 Woodside Petroleum Ltd | Annual Report 2019
CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2019
Operating revenue
Cost of sales
Gross profit
Other income
Other expenses
Profit before tax and net finance costs
Finance income
Finance costs
Profit before tax
Petroleum resource rent tax (PRRT) benefit
Income tax expense
Profit after tax
Profit attributable to:
Equity holders of the parent
Non-controlling interest
Profit for the period
Basic and diluted earnings per share attributable to equity holders of the parent (US cents)
The accompanying notes form part of the Financial Statements.
Notes
A.1
A.1
A.1
A.1
A.2
A.5
A.5
E.8
A.4
2019
US$m
4,873
(2,727)
2,146
130
(1,185)
1,091
91
(320)
862
31
(511)
382
343
39
382
36.7
2018
US$m
5,240
(2,604)
2,636
43
(401)
2,278
33
(216)
2,095
52
(680)
1,467
1,364
103
1,467
148.1
Woodside Petroleum Ltd | Financial Statements 77
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2019
Profit for the period
Other comprehensive income
Items that may be reclassified to the income statement in subsequent periods:
Gain on hedges
Tax effect on employee share plans
Items that will not be reclassified to the income statement in subsequent periods:
Remeasurement gains on defined benefit plan
Other comprehensive income/(loss) for the period, net of tax
Total comprehensive income for the period
Total comprehensive income attributable to:
Equity holders of the parent
Non-controlling interest
Total comprehensive income for the period
The accompanying notes form part of the Financial Statements.
2019
US$m
382
2018
US$m
1,467
2
-
2
4
386
347
39
386
-
(4)
1
(3)
1,464
1,361
103
1,464
78 Woodside Petroleum Ltd | Annual Report 2019
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2019
Notes
2019
US$m
2018
US$m
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
Lease assets
Total non-current assets
Total assets
Current liabilities
Payables
Interest-bearing liabilities
Other financial liabilities
Other liabilities
Provisions
Tax payable
Lease liabilities
Total current liabilities
Non-current liabilities
Interest-bearing liabilities
Deferred tax liabilities
Other financial liabilities
Other liabilities
Provisions
Lease liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued and fully paid shares
Shares reserved for employee share plans
Other reserves
Retained earnings
Equity attributable to equity holders of the parent
Non-controlling interest
Total equity
The accompanying notes form part of the Financial Statements.
C.1
D.2
D.3
D.6
D.2
D.6
B.2
B.3
A.5
D.7
D.4
C.2
D.6
D.5
A.5
D.7
C.2
A.5
D.6
D.5
D.7
C.3
C.3
C.4
E.8
4,058
1,674
343
176
28
42
-
487
155
54
31
10
4,647
2,411
245
35
21
3,809
18,298
177
1,173
948
24,706
29,353
581
77
12
34
272
86
69
208
30
17
4,180
18,881
182
1,179
-
24,677
27,088
586
79
48
43
215
74
-
1,131
1,045
5,602
2,193
15
46
1,856
1,101
10,813
11,944
17,409
9,010
(39)
992
6,654
16,617
792
17,409
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
Woodside Petroleum Ltd | Financial Statements 79
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 December 2019
Cash flows from operating activities
Profit after tax for the period
Adjustments for:
Non-cash items
Depreciation and amortisation
Depreciation of lease assets
Change in fair value of derivative financial instruments
Net finance costs
Tax expense
Exploration and evaluation written off
Impairment loss
Restoration movement
Other
Changes in assets and liabilities
Decrease/(increase) in trade and other receivables
(Increase)/decrease in inventories
Increase/(decrease) in provisions
(Increase)/decrease 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
Proceeds from disposal of non-current assets held for sale
Borrowing costs relating to investing activities
Payments for acquisition of joint arrangements net of cash acquired
Net cash used in investing activities
Cash flows from/(used in) financing activities
Proceeds from borrowings
Repayment of borrowings
Borrowing costs relating to financing activities
Repayment of lease liabilities
Borrowing costs relating to lease liabilities
Contributions to non-controlling interests
Dividends paid (outside of DRP)
Dividends paid (net of DRP)
Net proceeds from equity raising
Net cash from/(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
The accompanying notes form part of the Financial Statements.
Notes
2019
US$m
2018
US$m
382
1,467
1,617
1,497
86
(1)
229
480
46
737
77
39
118
(21)
33
(48)
(11)
-
(2)
183
628
94
39
(16)
25
(96)
22
(14)
45
(5)
3,763
3,867
(66)
85
5
(157)
(313)
-
(12)
(56)
29
8
(131)
(414)
2
(9)
3,305
3,296
(1,213)
(1,334)
-
12
(37)
-
71
-
(65)
(444)
(1,238)
(1,772)
1,700
(84)
(30)
(41)
(89)
(77)
(852)
(210)
-
317
2,384
1,674
-
4,058
-
(1,003)
(47)
-
-
(149)
(909)
-
1,949
(159)
1,365
318
(9)
1,674
B.5
C.2
C.2
C.1
FIX TABLE IN EXCEL
80 Woodside Petroleum Ltd | Annual Report 2019
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2019
s
e
t
o
N
E.9
Notes
At 31 December 2018 (as previously reported)
Adoption of AASB 16 (net of tax)
At 1 January 2019 (restated)
Profit for the period
Other comprehensive income
Total comprehensive income for the period
Dividend Reinvestment Plan
Employee share plan purchases
Employee share plan redemptions
Share-based payments (net of tax)
Dividends paid
At 31 December 2019
At 1 January 2018
Profit for the period
Other comprehensive loss
Total comprehensive income/(loss) for the period
Shares issued
Share issue costs (net of tax)
Employee share plan purchases
Employee share plan redemptions
Share-based payments (net of tax)
Dividends paid
At 31 December 2018
The accompanying notes form part of the Financial Statements.
d
i
a
p
y
l
l
u
f
d
n
a
d
e
u
s
s
I
s
e
r
a
h
s
C.3
s
n
a
l
p
e
r
a
h
s
e
e
y
o
p
m
e
l
r
o
f
d
e
v
r
e
s
e
r
s
e
r
a
h
S
C.3
s
t
fi
e
n
e
b
e
e
y
o
p
m
E
l
e
v
r
e
s
e
r
C.4
e
v
r
e
s
e
r
n
o
i
t
a
l
s
n
a
r
t
y
c
n
e
r
r
u
c
n
g
i
e
r
o
F
C.4
e
v
r
e
s
e
r
g
n
g
d
e
H
i
C.4
e
h
t
l
f
o
s
r
e
d
o
h
y
t
i
u
q
E
t
n
e
r
a
p
i
s
g
n
n
r
a
e
d
e
n
i
a
t
e
R
t
s
e
r
e
t
n
i
g
n
i
l
l
o
r
t
n
o
c
-
n
o
N
E.8
y
t
i
u
q
e
l
a
t
o
T
US$m
US$m
US$m
US$m
US$m
US$m
US$m
US$m
US$m
8,880
-
8,880
-
-
-
130
-
-
-
-
9,010
6,919
-
-
-
1,989
(28)
-
-
-
-
(31)
-
(31)
-
-
-
-
(66)
58
-
-
(39)
(35)
-
-
-
-
-
(56)
60
-
-
8,880
(31)
206
-
206
-
2
2
-
-
(58)
61
-
211
218
-
(3)
(3)
-
-
-
(60)
51
-
206
793
-
793
(14)
7,655
17,489
833
18,322
-
(155)
(155)
-
(155)
(14)
7,500
17,334
833
18,167
-
-
-
-
-
-
-
-
793
793
-
-
-
-
-
-
-
-
-
-
2
2
-
-
-
-
-
343
-
343
-
-
-
-
343
4
347
130
(66)
-
61
39
-
39
-
-
-
-
382
4
386
130
(66)
-
61
(1,189)
(1,189)
(80)
(1,269)
(12)
6,654
16,617
792
17,409
(14)
7,200
15,081
1,364
1,364
-
1,364
-
-
-
-
-
(3)
1,361
1,989
(28)
(56)
-
51
-
-
-
-
-
-
-
-
-
830
103
-
103
-
-
-
-
-
15,911
1,467
(3)
1,464
1,989
(28)
(56)
-
51
(909)
(909)
(100)
(1,009)
793
(14)
7,655
17,489
833
18,322
Woodside Petroleum Ltd | Financial Statements 81
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 13 February 2020.
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
2018 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 16 Leases (AASB 16) (refer to Note E.9(c)).
The Group early adopted AASB 2019-3 Amendments to Australian
Accounting Standards - Interest Rate Benchmark Reform (AASB
2019-3) which provides mandatory temporary relief allowing
hedge accounting to continue under existing interest rate
assumptions during the reform period (refer to Note E.9(d)).
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.
82 Woodside Petroleum Ltd | Annual Report 2019
The financial statements comprise the financial results of the
Group as at 31 December each year (refer to Note E.8).
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. Where required, 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 and 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 approval of the Group’s risk management strategy, policy
and key risk parameters. The Board of Directors and the Audit & Risk
Committee have oversight of the Group’s internal control system and
risk management process, including 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 Corporate on pages 38-41 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 84
Page 84
Page 96
Page 96
Page 96
Page 100
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 31 December 2019 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, and actual results may
differ. 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.5
Note D.6
Note D.7
Note E.6
Revenue from contracts with customers
Taxes
Exploration and evaluation
Oil and gas properties
Impairment of exploration and evaluation
and oil and gas properties
Provisions
Other financial assets and liabilities
Leases
Joint arrangements
Page 85
Page 88
Page 91
Page 92
Page 93
Page 102
Page 103
Page 104
Page 108
Woodside Petroleum Ltd | Financial Statements 83
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 31 December 2019
NOTES TO THE FINANCIAL STATEMENTS A. EARNINGS FOR THE YEAR
for the year ended 31 December 2019
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 85
Page 87
Page 87
Page 87
Page 87
Key financial and capital risks in this section
Commodity price risk management
The Group’s revenue is exposed to commodity price fluctuations. Commodity price risks 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% (2018: +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.2, D.4 and D.7 for detail of the denominations of cash and cash equivalents, interest-bearing liabilities, receivables, payables
and lease liabilities held at 31 December 2019.
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.
84 Woodside Petroleum Ltd | Annual Report 2019
NOTES TO THE FINANCIAL STATEMENTS A. EARNINGS FOR THE YEAR
for the year ended 31 December 2019
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.
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
in assigned permit areas.
Pluto LNG – Exploration, evaluation, development, production
and sale of liquefied natural gas, pipeline 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, Greater Enfield and Vincent).
Wheatstone – Exploration, evaluation, development,
production and sale of liquefied natural gas, pipeline natural
gas and condensate in assigned permit areas.
Development
Development segments – This segment comprises
exploration, evaluation and development of liquefied natural
gas, crude oil and condensate in the Browse, Scarborough,
Kitimat, Sunrise and Sangomar 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.
Major customer information
The Group has three major customers which account for 16%, 15%
and 11% of the Group’s external revenue. The sales are generated
by the Pluto, North West Shelf and Wheatstone operating
segments (2018: two customers; 19% and 14% generated by Pluto
and North West Shelf).
Revenue from external
customers1
Non-current assets2
2018
US$m
21,324
Oceania
192
Asia
1,408
Canada
558
Africa
16
Other
23,498
Consolidated
1. Revenue is attributable to geographic location based on the location of the customers.
2. Non-current assets exclude deferred tax of $1,173 million (2018: $1,179 million).
2019
US$m
21,934
199
777
621
2
23,533
2019
US$m
202
4,435
2
-
234
4,873
2018
US$m
286
4,739
5
-
210
5,240
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.
• Depreciation and amortisation
Refer to Note B.3 for details on depreciation and amortisation.
• Impairment
Refer to Note B.4 for details on impairment.
• Leases
Refer to Note D.7 for details on leases.
• Employee benefits
Refer to Note E.2 for details on employee benefits.
Key estimates and judgements
Revenue from contracts with customers
Judgement 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. Judgement is used to
determine if it is probable that a significant reversal will occur in relation
to revenue recognised during provisional pricing periods in LNG contracts.
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.
Woodside Petroleum Ltd | Financial Statements 85
NOTES TO THE FINANCIAL STATEMENTS A. EARNINGS FOR THE YEAR
for the year ended 31 December 2019
A.1 Segment revenue and expenses (cont.)
Producing
Development
Other
North West
Shelf
2018
2018
2018
2019
Pluto
Australia Oil Wheatstone
2018
2019
Consolidated
2018
2019
2019
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
3,271 3,761
89
651
301
25
995 1,061 1,796 2,280
-
230
-
-
Development
2018
2019
85
586
360
44
-
2
-
-
-
-
5
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2019
2019
2019
2018
2018
Other
segments
Unallocated
items
-
-
-
-
-
-
-
-
(13)
(247)
(7)
(36)
(755)
-
(17)
(243)
(4)
4
188
-
-
69
271
-
44
84
327
-
25
119
42
81
242
-
-
-
301
-
360
-
-
-
-
-
-
-
360
-
301
-
-
-
-
420
-
94
-
-
480
10
127
-
-
617
-
-
60
60
514
-
-
1
1
360
(87)
(6)
(2)
23
(72)
-
677
(62)
-
(1)
1
(62)
(29)
515
(62)
-
(1)
(3)
(66)
(28)
(124)
(211)
(7)
-
(342)
(5)
(225)
-
(13)
6
(232)
(24)
301
(117)
(7)
(3)
(12)
(139)
-
1,379 1,497 1,988 2,510
202
71
-
273
1,379 1,497 2,230 2,783
(157)
(132)
-
(187)
(14)
(6)
(9)
(1)
(180)
(326)
(24)
(4)
Liquefied natural gas
Domestic 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
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 costs1
Other hydrocarbon costs
Other cost of sales
Cost of sales
Gross profit
Other income2
Exploration and evaluation
expenditure
Amortisation
Write-offs
Exploration and evaluation
General, administrative and other
costs
Depreciation of other plant and
equipment
Depreciation of lease assets
Restoration movement
Impairment losses3
Other4
Other costs
Other expenses
Profit/(loss) before tax and net
finance costs
1. Trading costs includes trading intersegment adjustments which eliminate to nil in the Group’s consolidated results.
(871)
(815)
(110)
(44)
(76)
(98)
-
(48)
(186)
(190)
(671) (1,237) (1,237)
993 1,546
826
10
18
(170)
-
-
-
-
(242)
118
7
(321)
(36)
(4)
(60)
(100)
(483)
194
105
(268)
(56)
(27)
-
(83)
(677)
702
14
(234)
(33)
(1)
(1)
(35)
(335)
180
14
(54)
-
-
-
-
(193)
108
(4)
-
(26)
-
-
-
(26)
(28)
-
-
3
(17)
(2)
(9)
(17)
-
-
(80)
-
1
(87)
(90)
-
-
1
(39)
1
(41)
(44)
-
-
-
-
(2)
(18)
(24)
(272)
(42)
(15)
-
(57)
-
-
15
-
1
15
13
-
-
-
-
-
-
(1)
-
-
-
-
(1)
(1)
(2)
(26)
(266)
-
(22)
(148)
-
(44)
(803)
-
(16)
(190)
-
(4)
-
(4)
(8)
(1)
-
-
(1)
(2)
-
-
(2)
(3)
-
-
(3)
(1)
(53)
-
(3)
-
-
(3)
(1)
-
-
(1)
(6)
-
-
(6)
(2)
-
-
(2)
963 1,532
800
699
117
192
298
(16)
35
(8)
(2)
(4)
(1)
7
-
-
-
2
-
-
-
-
2
(2)
-
-
-
(2)
-
-
-
-
-
-
-
-
-
(2)
-
2
(4)
-
-
(4)
(1)
-
-
-
(720)
(5)
(726)
(730)
(728)
5
-
-
-
-
5
(5)
-
-
-
(5)
-
-
-
-
-
-
-
-
-
(5)
-
-
-
-
-
-
-
-
-
-
-
4
4
4
4
-
-
225
-
225
225
-
-
-
-
-
-
-
-
-
-
26
(120)
-
(94)
(94)
131
-
(89)
(15)
(42)
(146)
-
-
139
-
139
139
-
-
-
-
-
-
-
-
-
-
(22)
(130)
-
(152)
(152)
(13)
2
(121)
(46)
(94)
(261)
-
-
-
-
-
-
3
-
5
-
8
-
-
-
-
-
-
-
-
-
8
8
4
-
-
-
-
-
-
-
-
-
4,346 4,827
202
210
1
413
119
267
141
527
-
-
-
(11)
-
(11)
-
4,873 5,240
(465)
(505)
(218)
(193)
(36)
(17)
(24)
29
(743)
(686)
(57)
(57)
-
-
-
(101)
(74)
(1,412) (1,293)
(7)
(4)
-
-
-
-
-
(1,574) (1,431)
(207)
(110)
(222)
(249)
(1)
(108)
(430)
(467)
(11) (2,727) (2,604)
(11) 2,146 2,636
43
130
3
-
-
-
-
(103)
(15)
(46)
(164)
(133)
(46)
(94)
(273)
3
(4)
(81)
(78)
(80)
(103)
-
(31)
-
-
-
(28)
(174)
(1)
-
-
-
2
(3)
(264)
(28)
(29)
-
-
(7)
(145)
(145)
(19)
(28)
-
(86)
-
(77)
-
(737)
13
(13)
(84) (1,021)
(84) (1,185)
(20)
-
16
(39)
18
(128)
(401)
(43)
(275)
(133)
(92) 1,091 2,278
2. Other income includes an $81 million periodic adjustment reflecting the arrangements governing Wheatstone LNG sales (2018: nil). Refer to Note D.6 for further details.
3. Impairment losses represents charges on non-current assets held for sale of $17 million and exploration and evaluation of $720 million. Refer to Note B.4 for further details.
4. Other comprises foreign exchange gains and losses and other expenses not associated with the ongoing operations of the business.
86 Woodside Petroleum Ltd | Annual Report 2019
NOTES TO THE FINANCIAL STATEMENTS A. EARNINGS FOR THE YEAR
for the year ended 31 December 2019
A.2 Finance costs
A.5 Taxes
Interest on interest-bearing liabilities
Interest on lease liabilities
Accretion charge
Other finance costs
Less: Finance costs capitalised against qualifying
assets
2019
US$m
215
89
40
17
(41)
320
2018
US$m
207
-
42
27
(60)
216
A.3 Dividends paid and proposed
Woodside Petroleum Ltd, the parent entity, paid and proposed
dividends set out below:
(a) Tax expense comprises
PRRT
Current tax benefit
Deferred tax benefit
PRRT benefit
Income tax
Current year
Current tax expense
Deferred tax expense
Adjustment to prior years
Deferred tax expense/(benefit)
2019
US$m
2018
US$m
Income tax expense
Tax expense
(a) Dividends paid during the financial year
Prior year fully franked final dividend US$0.91,
paid on 20 March 2019 (2018: US$0.49, paid on
22 March 2018)
Current year fully franked interim dividend
US$0.36, paid on 20 September 2019
(2018: US$0.53, paid on 20 September 2018)
(b) Dividend declared subsequent to the
reporting period
(not recorded as a liability)
Final dividend US$0.55 (2018: US$0.91)
(c) Other information
Franking credits available for subsequent periods
Current year dividends per share (US cents)
852
413
337
1,189
496
909
518
852
1,565
91
1,634
144
The dividend reinvestment plan (DRP) was approved by the
shareholders at the Annual General Meeting in 2003 for activation
as required to fund future growth. The DRP was reactivated for
the 2019 interim and final dividend.
(b) Reconciliation of income tax expense
Profit before tax
PRRT benefit
Profit before income tax
Income tax expense calculated at 30%
Non-deductible items
Foreign expenditure not brought to account
Adjustment to prior years
Foreign exchange impact on tax expense
Income tax expense
(c) Reconciliation of PRRT benefit
Profit before tax
Non-PRRT assessable profits
PRRT projects profit before tax
PRRT benefit calculated at 40%
Augmentation
Other
PRRT benefit
A.4 Earnings per share
(d) Deferred tax income statement reconciliation
PRRT
2019
2018
Profit attributable to equity holders of the parent
(US$m)
Weighted average number of shares on issue
Basic and diluted earnings per share (US cents)
343
1,364
935,833,092 921,165,018
148.1
36.7
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.
Performance rights of 10,501,088 (2018: 9,702,925) are considered
to be contingently issuable and have not been allowed for in the
diluted earnings per share calculation.
There have been no significant transactions involving ordinary
shares between the reporting date and the date of completion of
these financial statements.
Production and growth assets
Augmentation for current year
Provisions
Other
PRRT benefit
Income tax
Oil and gas properties
Exploration and evaluation assets
Provisions
PRRT liabilities
Lease assets and 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
2019
US$m
2018
US$m
-
(31)
(31)
325
184
2
511
480
862
31
893
268
-
242
2
(1)
511
862
(528)
334
134
(168)
3
(31)
190
(168)
(52)
(1)
(31)
94
92
(97)
6
(23)
73
23
168
137
989
145
37
2
(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)
1,173
1,179
Woodside Petroleum Ltd | Financial Statements 87
NOTES TO THE FINANCIAL STATEMENTS A. EARNINGS FOR THE YEAR
for the year ended 31 December 2019
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
Lease assets and liabilities
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
2019
US$m
2018
US$m
525
(23)
(191)
(3)
1,827
465
(23)
(590)
257
-
(51)
2,193
523
(16)
(155)
(7)
1,733
373
-
(493)
251
(73)
(74)
2,062
86
86
74
74
29.3%
57.2%
29.4%
31.7%
893
268
242
(184)
326
2,147
644
49
(258)
435
1. No movement recognised in other comprehensive income (2018: $4 million).
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.
88 Woodside Petroleum Ltd | Annual Report 2019
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.
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.8 and E.9 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 nil (2018: $73 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 $471 million (2018: $399 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. $3,831 million (2018: $3,792 million) relates to
the North West Shelf Project, $654 million (2018: $589 million) relates to
the quarantined exploration spend of Pluto LNG and $856 million
(2018: $767 million) relates to Wheatstone. Future taxable profits were
determined using a long-term bond rate of 1.3% (2018: 2.8%) for the
purposes of augmentation.
Had an alternative approach been used to assess recovery of the
deferred tax assets, whereby future augmentation was not included in
the assessment, the additional deferred tax assets would be recognised,
with a corresponding benefit to income tax expense. It was determined
that the approach adopted provides the most meaningful information
on the implications of the PRRT regime, whilst ensuring compliance with
AASB 112 Income Taxes.
NOTES TO THE FINANCIAL STATEMENTS B. PRODUCTION AND GROWTH ASSETS
for the year ended 31 December 2019
In this section
This section addresses the strategic growth (exploration and evaluation) and core producing (oil and gas properties) assets position
of the Group at the end of the reporting period including, where applicable, the accounting policies applied and the key estimates and
judgements made. The section also includes the impairment position of the Group at the end of the reporting period.
B.
B.1
B.2
B.3
B.4
Production and growth assets
Segment production and growth assets
Exploration and evaluation
Oil and gas properties
Impairment of exploration and evaluation and oil
and gas properties
Page 90
Page 91
Page 92
Page 93
B.5
Significant production and growth asset acquisitions
Page 95
Woodside Petroleum Ltd | Financial Statements 89
NOTES TO THE FINANCIAL STATEMENTS B. PRODUCTION AND GROWTH ASSETS
for the year ended 31 December 2019
B.1 Segment production and growth assets
Producing
Development
Other
North West
Shelf
Consolidated
2018
2019
2019
US$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
2018
2019
Other
Pluto
2019
2019
2019
2019
2018
2018
2018
2018
2018
Balance as at 31 December
Oceania
Asia
Canada
Africa
Other
19
16
429
464
21
21
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total exploration and evaluation
19
16
429
464
21
21
2
-
-
-
-
2
-
18 1,624 1,324
-
-
742 1,408
563
607
-
-
-
-
-
18 2,973 3,295
148
199
-
16
2
159
192
-
-
15
2,243
2,002
199
742
623
2
192
1,408
563
15
365
366
3,809
4,180
1
-
3
-
1
5
342
375
717
49
7
-
-
-
-
99
40
-
56
139
1
-
-
1
1
12
13
-
-
-
-
-
-
-
1
1,068
1,100
729
-
625
3 15,813 15,460
66
-
36
652
-
1,630
4 18,298 18,881
396
552
948
58
416
5
479
726
41
186
953
1
12
13
-
-
-
157
640
(3)
794
866
56
37
959
-
-
-
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
Balance as at 31 December
Land and buildings
Marine vessels and carriers
Total lease assets
Additions to exploration and evaluation:
Exploration
Evaluation
Restoration
Additions to oil and gas properties:
Oil and gas properties additions
Capitalised borrowing costs additions1
Restoration
Additions to lease assets:
Land and buildings
Marine vessels and carriers
15
89
19
106
388
258
2,123
2,262
8,891
412
-
-
664
668
289
189
9,428 1,509
-
-
11
219
193
339 3,287 3,428
7
-
-
-
166
321
7
9,858 10,295 1,705
1,172
219
210
1,522 4,354 4,541
36
113
59
73
2,376
2,519
-
-
-
4
3
-
7
81
-
65
146
-
-
-
-
-
-
-
-
-
-
129
7
(35)
101
-
-
-
20
177
197
3
9
3
15
-
-
-
58
9
(1)
66
-
-
-
-
-
-
-
-
-
-
-
-
-
-
297
110
257
5
42
-
(1)
34
62
483
28
76
-
-
-
2
14
-
16
90
2
17
-
-
-
-
11
-
11
144
21
(3)
344
109
353
587
109
162
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
34
-
34
-
383
2
385
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
580
(2)
578
-
-
-
-
-
-
-
1. Borrowing costs capitalised were at a weighted average interest rate of 4.2% (2018: 4.4%).
Refer to Note A.1 for descriptions of the Group’s segments and geographical regions.
90 Woodside Petroleum Ltd | Annual Report 2019
NOTES TO THE FINANCIAL STATEMENTS B. PRODUCTION AND GROWTH ASSETS
for the year ended 31 December 2019
B.2 Exploration and evaluation
Year ended 31 December 2019
Carrying amount at 1 January 2019
Additions
Amortisation of licence acquisition costs
Expensed1
Impairment loss
Transferred exploration and evaluation
Carrying amount at 31 December 2019
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
Exploration commitments
Year ended 31 December 2019
Year ended 31 December 2018
Oceania
US$m
Asia
US$m
Canada
US$m
Africa
US$m
Other
US$m
2,002
325
(11)
(4)
-
(69)
2,243
1,447
570
(11)
-
(4)
2,002
13
33
192
11
(4)
-
-
-
199
133
76
(4)
(13)
-
192
32
35
1,408
54
-
-
(720)
-
742
1,348
60
-
-
-
1,408
-
-
563
60
-
-
-
-
623
598
74
(28)
(81)
-
563
44
3
15
29
-
(42)
-
-
2
4
14
(3)
-
-
15
15
36
Total
US$m
4,180
479
(15)
(46)
(720)
(69)
3,809
3,530
794
(46)
(94)
(4)
4,180
104
107
1. $46 million of exploration and evaluation expensed relates to unsuccessful wells written off during the period (2018: $94 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
evaluating discoveries is closely aligned to the US GAAP-based
successful efforts method.
Areas of interest are based on a geographical area for which
the rights of tenure are current. 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
where an assessment of the existence or otherwise of
economically recoverable hydrocarbons is not yet complete; or
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 the Group's
operations.
• where the expenditure is expected to be recouped through
successful exploitation of the area of interest, or alternatively,
by its sale.
Impairment
Refer to Note B.4 for details on impairment, including any
write-offs.
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.
Key estimates and judgements
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.
Woodside Petroleum Ltd | Financial Statements 91
NOTES TO THE FINANCIAL STATEMENTS B. PRODUCTION AND GROWTH ASSETS
for the year ended 31 December 2019
B.3 Oil and gas properties
Year ended 31 December 2019
Carrying amount at 1 January 2019
Additions
Disposals at written down value
Depreciation and amortisation
Impairment loss
Completions and transfers
Carrying amount at 31 December 2019
At 31 December 2019
Historical cost
Accumulated depreciation and impairment
Net carrying amount
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
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
1,100
-
-
(57)
-
25
1,068
1,722
(654)
1,068
1,122
-
(57)
-
35
1,100
1,694
(594)
1,100
625
-
-
(101)
-
205
729
1,348
(619)
729
649
-
(74)
-
50
625
1,143
(518)
625
15,460
122
(3)
(1,412)
-
1,646
15,813
30,928
(15,115)
15,813
16,087
(56)
(1,293)
-
722
15,460
29,167
(13,707)
15,460
66
-
(13)
(4)
(17)
4
36
184
(148)
36
122
-
(7)
(39)
(10)
66
306
(240)
66
1,630
831
(2)
-
-
(1,807)
652
710
(58)
652
1,418
1,015
-
-
(803)
1,630
1,701
(71)
1,630
Total
US$m
18,881
953
(18)
(1,574)
(17)
73
18,298
34,892
(16,594)
18,298
19,398
959
(1,431)
(39)
(6)
18,881
34,011
(15,130)
18,881
Recognition and measurement
Oil and gas properties are stated at cost less accumulated
depreciation and impairment charges. Oil and gas properties
include the costs 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 reliably measured.
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.
92 Woodside Petroleum Ltd | Annual Report 2019
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 $865 million
(2018: $331 million).
Key estimates and judgements
(a) Reserves
The estimation 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 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 44-47 of the Annual
Report.
(b) Depreciation and amortisation
Judgement is required in determining the commencement of
depreciation and amortisation for an asset which is applied at the
point that the project is ready for start up.
NOTES TO THE FINANCIAL STATEMENTS B. PRODUCTION AND GROWTH ASSETS
for the year ended 31 December 2019
B.4 Impairment of exploration and evaluation
and oil and gas properties
Exploration and evaluation recognition and measurement
Impairment testing
The recoverability of the carrying amount of exploration and
evaluation assets is dependent on successful development and
commercial exploitation, or alternatively, sale of the respective AOI.
Each AOI is reviewed half-yearly to determine whether economic
quantities of hydrocarbons 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 for an AOI, an assessment
is performed using a fair value less costs to dispose (FVLCD)
method to determine its recoverable amount.
Impairment calculations
The recoverable amount of exploration and evaluation assets are
determined using FVLCD. Costs to dispose are the incremental
costs directly attributable to the disposal of an asset (disposal
group), excluding finance costs and income tax expense.
If the carrying amount of an AOI exceeds its recoverable amount,
the AOI is written down to its recoverable amount 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, but only
to the extent that the asset’s carrying amount does not exceed
the carrying amount that would have been determined if no
impairment loss had been recognised.
Key estimates and judgements
Exploration and evaluation write-offs key assumptions
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.
Exploration and evaluation impairment key assumptions
The FVLCD for the Kitimat LNG AOI was determined as the present
value of the estimated future cash flows (expressed in real terms)
expected to arise from the development and use of the asset using
assumptions that an independent market participant would take into
account. These cash flows were discounted using a pre-tax discount
rate that reflects current market assessments of the time value of
money and the risks specific to the Kitimat LNG AOI.
Recognised impairment
The Group assessed each AOI to determine whether an indicator
of impairment existed. Impairment losses are recognised in other
expenses. Refer to Note A.1.
On 10 December 2019, the operator of the Kitimat LNG project
announced its decision to exit the project. On 31 January 2020, the
operator of the Kitimat LNG project announced an impairment of
their interest in the asset. This was considered to be an indicator
of impairment and the recoverable amount of the Kitimat AOI was
calculated.
The results are as follows:
Impairment
loss
US$m
Recoverable
Amount
US$m
2019
720
2018
-
2019
742
2018
-
Kitimat LNG
The impairment loss of $720 million has been recognised in the
development segment of Note A.1.
Sensitivity analysis
It is estimated that changes in the key assumptions would result in a
higher or lower carrying value as follows:
Discount rate: increase 1%
Discount rate: decrease 1%
Long-term oil price1: increase of 5% (real)
Kitimat
US$m
(742)
720
701
Long-term oil price1: decrease of 5% (real)
(701)
1. Long-term oil price based on US$72.50/bbl (2020 real terms) from 2025 and
prices are escalated at 2.0% onwards.
The FVLCD is classified as Level 3 on the fair value hierarchy and has
been determined based on the following key assumptions:
• Resource estimates - 50% of contingent resources (2C) included as
disclosed in the reserves and resources statement on page 44 - 47.
• Inflation rate – an inflation rate of 2.0% has been applied.
• Discount rate – a post-tax discount rate of 10.5% has been applied. The
discount rate reflects an assessment of the risks specific to the asset.
• An estimated cost of supply on produced and third-party gas.
• An evaluation of climate risk impacts.
• Oil price – derived from long-term views of global supply and
demand, building upon past experience of the industry and
consistent with external sources. Prices are adjusted for premiums
and discounts based on the nature and quality of the product. The
nominal Brent oil prices (US$/bbl) used were:
2020
2021
2022
2023
2024
2025
2019
1. Based on US$72.50/bbl (2020 real terms) from 2025 and prices are
68
63
63
76
72
801
escalated at 2.0% onwards.
Woodside Petroleum Ltd | Financial Statements 93
NOTES TO THE FINANCIAL STATEMENTS B. PRODUCTION AND GROWTH ASSETS
for the year ended 31 December 2019
B.4 Impairment of exploration and evaluation
and oil and gas properties (cont.)
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 an FPSO and associated oil fields for an oil asset,
and an LNG plant, offshore infrastructure 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.
Key estimates and judgements
Impairment and impairment reversal indicator modelling
key assumptions
In determining whether there is an indicator of impairment or impairment
reversal, in the absence of quoted market prices, estimates are made
regarding the present value of future cash flows for each CGU. These
estimates require significant management judgement and are subject to
risk and uncertainty, and hence changes in economic conditions can also
affect the assumptions used and the rates used to discount future cash
flow estimates. The present value of future cash flows for each CGU was
estimated using the assumptions set out below:
• Inflation rate – an inflation rate of 2.0% has been applied (2018: 2.0%).
• Foreign exchange rate – a rate of $0.75 US$:AU$ (2018: $0.78) is
based on management’s view of long-term exchange rates.
• Discount rate – a range of post-tax discount rates have been applied
between 7.5% and 9.0% (2018: 7.5% and 9.0%).
• An evaluation of climate risk impacts.
• LNG price – the majority of LNG sales contracts are linked to an oil
price marker, accordingly the LNG prices used are consistent with oil
price assumptions.
94 Woodside Petroleum Ltd | Annual Report 2019
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.
In 2019, the sale of two LNG vessels in the North West Shelf
operating segment resulted in an impairment loss of $17 million
as the assets' carrying value exceeded the fair value less costs of
disposal (2018: $39 million). The fair value less costs of disposal was
determined using sale agreements, classified as Level 3 on the fair
value hierarchy.
• Oil price – derived from long-term views of global supply and
demand, building upon past experience of the industry and
consistent with external sources. Prices are adjusted for premiums
and discounts based on the nature and quality of the product. The
nominal Brent oil prices (US$/bbl) used were:
2020
2021
2022
2023
2024
2025
2019
2018
1. Based on US$72.50/bbl (2020 real terms) from 2025 and prices are
63
68
68
75
63
71
76
82
72
78
801
83
escalated at 2.0% onwards.
As the Wheatstone CGU was previously the subject of an impairment
in 2015, its carrying value is sensitive to changes in future oil price
assumptions. The effects of changes to the long-term oil price on
Wheatstone’s carrying value are estimated as follows:
Change in assumption
Long-term oil price¹: increase of 5% (real)
Long-term oil price¹: decrease of 5% (real)
US$m
204
(204)
1. Long-term oil price based on US$72.50/bbl (2020 real terms) from 2025
and prices are escalated at 2.0% onwards.
NOTES TO THE FINANCIAL STATEMENTS B. PRODUCTION AND GROWTH ASSETS
for the year ended 31 December 2019
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 $444 million. The
transaction was accounted for as an asset acquisition. An additional
$300 million payment to ExxonMobil is contingent on a positive final
investment decision to develop the Scarborough field. In conjunction
with the transaction, Woodside granted BHP an option to purchase
an additional 10% interest in the Scarborough gas field on equivalent
consideration terms to the transaction with ExxonMobil. The option
was not exercised by BHP and expired on 31 December 2019.
In addition to the contingent payment above, a $150 million payment to
BHP is 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 $0.5 million.
Scarborough
US$m
444
444
US$m
444
-
444
444
Woodside Petroleum Ltd | Financial Statements 95
NOTES TO THE FINANCIAL STATEMENTS C. DEBT AND CAPITAL
for the year ended 31 December 2019
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 97
Page 97
Page 99
Page 99
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 was reactivated for the 2019 interim 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 2019, the Group has a total of $6,952 million (2018: $3,918 million) of available
undrawn facilities and cash at its disposal. The maturity profile of interest-bearing liabilities is disclosed in Note C.2, trade and other
payables are disclosed in Note D.4 and lease liabilities are disclosed in Note D.7. 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. The Group has early adopted AASB 2019-3 Amendments to Australian Accounting Standards -
Interest Rate Benchmark Reform. Refer to Note E.9(d) for further details.
At the reporting date, the Group was exposed to various benchmark interest rates that were not designated in cash flow hedges,
$3,981 million (2018: $1,536 million) on cash and cash equivalents, $533 million (2018: $617 million) on interest-bearing liabilities (excluding
transaction costs) and $7 million (2018: $12 million) on cross-currency interest rate swaps.
A reasonably possible change in the USD London Interbank Offered Rate (LIBOR) (+1.0%/-1.0% (2018: +1.0%/-1.0%)), with all variables held
constant, would not have a material impact on the Group’s equity or the income statement in the current period.
96 Woodside Petroleum Ltd | Annual Report 2019
NOTES TO THE FINANCIAL STATEMENTS C. DEBT AND CAPITAL
for the year ended 31 December 2019
C.1 Cash and cash equivalents
Cash and cash equivalents
Cash at bank
Term deposits
Total cash and cash equivalents
2019
US$m
175
3,883
4,058
2018
US$m
214
1,460
1,674
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 $47 million of cash and cash equivalents at
31 December 2019 (2018: $64 million) in currencies other
than US dollars.
C.2 Interest-bearing liabilities and financing facilities
Year ended 31 December 2019
At 1 January 2019
Repayments
Drawdowns
Fair value adjustment and foreign exchange movement
Transaction costs capitalised and amortised
Carrying amount at 31 December 2019
Current
Non-current
Carrying amount at 31 December 2019
Undrawn balance at 31 December 2019
Year ended 31 December 2018
At 1 January 2018
Repayments
Fair value adjustment and foreign exchange movement
Transaction costs capitalised and amortised
Carrying amount at 31 December 2018
Current
Non-current
Carrying amount at 31 December 2018
Undrawn balance at 31 December 2018
Bilateral
facilities
US$m
Syndicated
facilities
US$m
JBIC
facility
US$m
US bonds
US$m
Medium term
notes
US$m
(2)
-
-
-
(1)
(3)
(1)
(2)
(3)
(1)
-
-
-
(3)
(4)
(1)
(3)
(4)
1,694
1,200
316
(320)
-
2
(2)
(1)
(1)
(2)
(3)
-
-
2
(1)
(1)
-
(1)
1,444
800
417
(84)
-
-
-
333
83
250
333
-
500
(83)
-
-
417
83
334
417
-
3,284
-
1,500
-
(9)
4,775
(4)
4,779
4,775
-
3,880
(600)
-
4
3,284
(2)
3,286
3,284
-
373
-
200
4
1
578
-
578
578
-
372
-
1
-
373
-
373
373
-
Total
US$m
4,071
(84)
1,700
4
(12)
5,679
77
5,602
5,679
2,894
5,065
(1,003)
1
8
4,071
79
3,992
4,071
2,244
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 $4 million being recorded
(2018: loss of $1 million), and a gain of $5 million recorded on the
hedging instrument (2018: loss of $1 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.
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 $4,775 million (2018: $3,284 million) and a
fair value of $5,060 million (2018: $3,167 million).
The medium term notes have a carrying amount of $578 million
(2018: $373 million) and a fair value of $594 million
(2018: $388 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.
Foreign exchange risk
All interest-bearing liabilities are denominated in US dollars,
excluding the CHF175 million medium term note.
Woodside Petroleum Ltd | Financial Statements 97
NOTES TO THE FINANCIAL STATEMENTS C. DEBT AND CAPITAL
for the year ended 31 December 2019
To the extent that this reserve amount remains fully funded
and no default notice or acceleration notice has been given, the
revenue from Pluto LNG continues to flow directly to the Group
from the trust account.
Medium term notes
On 28 August 2015, the Group established a $3,000 million Global
Medium Term Notes Programme listed on the Singapore Stock
Exchange. Three notes have been issued under this program as
set out below:
Maturity date
15 July 2022
11 December 2023
29 January 2027
Currency
Carrying amount
(million)
US$
CHF
US$
200
175
200
Nominal interest
rate
Floating three
month US$ LIBOR
1%
3.07%
The unutilised program is not considered to be an unused facility.
US bonds
The Group has five 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
4 March 2029
Carrying amount
US$m
700
1,000
800
800
Nominal interest rate
4.60%
3.65%
3.70%
3.70%
1,500
4.50%
Interest on the bonds is payable semi-annually in arrears.
C.2 Interest-bearing liabilities and
financing facilities (cont.)
Maturity profile of interest-bearing liabilities
The table below presents the contractual undiscounted cash
flows associated with the Group’s interest-bearing liabilities,
representing principal and interest. The figures will not necessarily
reconcile with the amounts disclosed in the consolidated
statement of financial position.
Due for payment in:
1 year or less
1-2 years
2-3 years
3-4 years
4-5 years
More than 5 years
Amounts exclude transaction costs.
2019
US$m
297
980
462
439
171
4,800
7,149
2018
US$m
235
233
914
388
359
2,876
5,005
Bilateral facilities
The Group has 13 bilateral loan facilities totalling $1,694 million
(2018: 14 bilateral loan facilities totalling $1,444 million). Details of
bilateral loan facilities at the reporting date are as follows:
Number of
facilities
6
2
5
Term (years)
Currency
Extension option
5
4
3
US$
US$
US$
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 $1,000 million
syndicated loan facility, which was increased to $1,200 million on
22 March 2016 and amended to $800 million on 15 November 2017.
On 14 October 2019, Woodside increased the existing facility to
$1,200 million, with $400 million expiring on 11 October 2022 and
$800 million expiring on 11 October 2024. Interest rates are based
on USD LIBOR plus 0.85% and USD LIBOR plus 1.0% 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 $1,000 million and $500 million
respectively. The $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 sale and purchase agreements are secured in favour of the
lenders through a trust structure, with a required reserve amount
of $30 million.
98 Woodside Petroleum Ltd | Annual Report 2019
NOTES TO THE FINANCIAL STATEMENTS C. DEBT AND CAPITAL
for the year ended 31 December 2019
C.3 Contributed equity
C.4 Other reserves
Recognition and measurement
Issued capital
Ordinary shares are classified as equity and recorded at the value of
consideration received. The cost of issuing shares is shown in share
capital as a deduction, net of tax, from the proceeds.
Reserved shares
The Group’s own equity instruments, which are reacquired for later
use in employee share-based payment arrangements (reserved
shares), are deducted from equity. No gain or loss is recognised in
the income statement on the purchase, sale, issue
or cancellation of the Group’s own equity instruments.
(a) Issued and fully paid shares
Number of
shares
US$m
936,151,549
8,880
6,135,351
942,286,900
130
9,010
Year ended 31 December 2019
Opening balance
DRP - ordinary shares issued at A$31.34
(2019 interim dividend)
Amounts as at 31 December 2019
Year ended 31 December 2018
Opening balance
Equity raising - ordinary shares issued at A$27.00
93,706,646
Share issue costs (net of tax)
-
842,444,903
6,919
1,989
(28)
Amounts as at 31 December 2018
936,151,549
8,880
All shares are a single class with equal rights to dividends, capital,
distributions and voting. The Company does not have authorised
capital nor par value in relation to its issued shares.
(b) Shares reserved for employee share plans
Year ended 31 December 2019
Opening balance
Purchases during the year
Vested during the year
Amounts at 31 December 2019
Year ended 31 December 2018
Opening balance
Purchases during the year
Vested during the year
Amounts at 31 December 2018
Number of
shares
US$m
1,130,104
3,052,348
(2,197,146)
1,985,306
1,248,510
2,143,577
(2,261,983)
1,130,104
(31)
(66)
58
(39)
(35)
(56)
60
(31)
Other reserves
Employee benefits reserve
Foreign currency translation reserve
Hedging reserves
2019
US$m
2018
US$m
211
793
(12)
992
206
793
(14)
985
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
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.
Hedging reserve
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.
Woodside Petroleum Ltd | Financial Statements 99
NOTES TO THE FINANCIAL STATEMENTS D. OTHER ASSETS AND LIABILITIES
for the year ended 31 December 2019
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
Segment assets and liabilities
Receivables
Inventories
Payables
Provisions
Page 101
Page 101
Page 101
Page 102
Page 102
Other financial assets and liabilities
Page 103
Leases
Page 103
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 the Treasury function 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
2019, the Group had 7 customers (2018: 7 customers) that owed the Group more than $10 million each and accounted for approximately
85% (2018: 90%) of all trade receivables. Payment terms are typically 14 to 30 days providing only a short credit exposure.
At 31 December 2019, the Group had a provision for credit losses of $1 million (2018: nil). Subsequent to 31 December 2019, 100% (2018:
100%) of the trade receivables balance of $208 million (2018: $266 million) has been received.
Credit risk from balances with banks is managed by the Treasury function in accordance with the Group’s policy. The Group's main funds
are placed as short-term deposits with reputable financial institutions with strong investment grade credit ratings.
100 Woodside Petroleum Ltd | Annual Report 2019
NOTES TO THE FINANCIAL STATEMENTS D. OTHER ASSETS AND LIABILITIES
for the year ended 31 December 2019
D.1 Segment assets and liabilities
(a) Segment assets
NWS
Pluto
Australia Oil
Wheatstone
Development
Other segments
Unallocated items
(b) Segment liabilities
NWS
Pluto
Australia Oil
Wheatstone
Development
Other segments
Unallocated items
2019
US$m
2018
US$m
2,541
10,917
1,803
4,423
3,028
752
5,889
29,353
2019
US$m
643
823
755
212
189
510
8,812
11,944
2,672
11,292
1,581
4,706
3,310
414
3,113
27,088
2018
US$m
572
497
683
222
110
65
6,617
8,766
Refer to Note A.1 for descriptions of the Group’s segments.
Unallocated assets mainly comprise cash and cash equivalents,
deferred tax assets and lease assets. Unallocated liabilities mainly
comprise interest-bearing liabilities, deferred tax liabilities and
lease liabilities.
D.2 Receivables
(a) Receivables (current)
Trade receivables1
Other receivables1
Loans receivables2
Interest receivable
Dividend receivable
(b) Receivables (non-current)
Loans receivables2
Lease receivables
Defined benefit plan asset
2019
US$m
2018
US$m
208
72
52
10
1
343
222
5
18
245
266
131
84
4
2
487
193
-
15
208
1. Interest-free and settlement terms are usually between 14 and 30 days.
2. Loans receivables are due from non-controlling interests.
Recognition and measurement
Trade receivables are initially recognised at the transaction
price determined under AASB 15 Revenue from Contracts with
Customers. Other receivables are initially recognised at fair value
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.6).
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 (2018: nil).
Fair value
The carrying amount of trade and other receivables approximates
their fair value.
Foreign exchange risk
The Group held $73 million of receivables at 31 December
2019 (2018: $74 million) in currencies other than US dollars
(predominantly Australian dollars).
D.3 Inventories
Inventories
Petroleum products
Goods in transit
Finished stocks
Warehouse stores and materials
2019
US$m
2018
US$m
39
47
90
176
17
38
100
155
Recognition and measurement
Inventories include hydrocarbon stocks, consumable supplies
and maintenance spares. Inventories are valued at the lower of
cost and net realisable value. Cost is determined on a weighted
average basis and includes direct costs and an appropriate portion
of fixed and variable production overheads where applicable.
Inventories determined to be obsolete or damaged are written
down to net realisable value, being the estimated selling price less
selling costs.
Woodside Petroleum Ltd | Financial Statements 101
NOTES TO THE FINANCIAL STATEMENTS D. OTHER ASSETS AND LIABILITIES
for the year ended 31 December 2019
D.4 Payables
Restoration of operating locations
The following table shows the Group’s payables balances and
maturity analysis.
< 30
days
30-60
days
Total
US$m US$m US$m US$m
> 60
days
Year ended 31 December 2019
Trade payables1
Other payables1
Interest payable2
Total payables
Year ended 31 December 2018
Trade payables1
Other payables1
136
294
4
434
122
332
-
-
-
-
-
-
88
-
59
147
90
-
6
Interest payable2
Total payables
460
1. Interest-free and normally settled on 30 day terms.
2. Details regarding interest-bearing liabilities are contained in Note C.2.
-
-
36
126
224
294
63
581
212
332
42
586
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 $369 million of payables at 31 December
2019 (2018: $360 million) in currencies other than US dollars
(predominantly Australian dollars).
D.5 Provisions
Year ended 31 December 2019
At 1 January 2019
Change in provision
Unwinding of present value
discount
Carrying amount at 31
December 2019
Current
Non-current
Net carrying amount
Year ended 31 December 2018
At 1 January 2018
Change in provision
Unwinding of present value
discount
Carrying amount at 31
December 2018
Current
Non-current
Restoration
of operating
locations1
US$m
Employee
benefits Other
Total
US$m US$m US$m
1,572
259
171
18
55
15
1,798
292
38
-
-
38
1,869
35
1,834
1,869
1,524
8
40
1,572
13
1,559
189
167
22
189
177
(6)
171
147
24
70
2,128
70
272
-
1,856
70
2,128
66
1,767
55
1,798
55
-
215
1,583
1,798
(11)
-
-
(9)
40
Net carrying amount
1. 2019 change in provision is due to a revision of discount rates of $192 million, new
1,572
171
55
provisions and change in estimates of $76 million offset by provisions used of $9 million.
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.
102 Woodside Petroleum Ltd | Annual Report 2019
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 which 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 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 restoration 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 54% (2018: 58%).
(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.
NOTES TO THE FINANCIAL STATEMENTS D. OTHER ASSETS AND LIABILITIES
for the year ended 31 December 2019
D.6 Other financial assets and liabilities
D.7 Leases
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
2019
US$m
2018
US$m
63
63
28
35
63
7
20
27
12
15
27
84
84
54
30
84
12
56
68
48
20
68
Recognition and measurement
Other financial assets and 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 the income statement in
the periods when the hedged item affects profit or loss.
Foreign exchange
The Group had no material other financial assets and liabilities
denominated in currencies other than US dollars.
Key estimates and judgements
Fair value of other financial assets and liabilities
Estimates have been applied in the measurement of other financial
assets and liabilities, and, where required, judgement is applied in the
settlement of any financial assets or liabilities. In the current period,
this included an $81 million periodic adjustment which decreased
other financial liabilities, reflecting the arrangements governing
Wheatstone LNG sales (2018: nil). Refer to Note A.1 for further details.
Lease assets
At 1 January 2019
Additions
Lease remeasurements
Depreciation
Carrying amount at 31 December 2019
At 31 December 2019
Historical cost
Accumulated depreciation and impairment
Net carrying amount
Lease liabilities
At 1 January 2019
Additions
Repayments
Accretion of interest
Lease remeasurements
Carrying amount at 31 December 2019
At 31 December 2019
Current
Non-current
Carrying amount at 31 December 2019
Marine
vessels
and
carriers
US$m
Land and
buildings
US$m
429
1
(8)
(26)
396
430
(34)
396
444
6
(32)
23
(10)
431
9
422
431
600
12
-
(60)
552
612
(60)
552
758
12
(98)
66
1
739
60
679
739
Total
US$m
1,029
13
(8)
(86)
948
1,042
(94)
948
1,202
18
(130)
89
(9)
1,170
69
1,101
1,170
The Group adopted AASB 16 on 1 January 2019. Refer to Note
E.9(c) for lease transition disclosures.
Recognition and measurement
When a contract is entered into, the Group assesses whether
the contract contains a lease. A lease arises when the Group
has the right to direct the use of an identified asset which is not
substitutable and to obtain substantially all economic benefits
from the use of the asset throughout the period of use. The
leases recognised by the Group predominantly relate to LNG
vessels and property.
The Group separates the lease and non-lease components of
the contract and accounts for these separately. The Group
allocates the consideration in the contract to each component
on the basis of their relative stand-alone prices.
Leases as a lessee
Lease assets and lease liabilities are recognised at the lease
commencement date, which is when the assets are available
for use. The assets are initially measured at cost, which is the
present value of future lease payments adjusted for any lease
payments made at or before the commencement date, plus any
make-good obligations and initial direct costs incurred.
Lease assets are depreciated using the straight-line method
over the shorter of their useful life and the lease term. Refer
to Note B.3 for the useful life of assets. Periodic adjustments
are made for any re-measurements of the lease assets and for
impairment losses, assessed in accordance with the Group’s
impairment policies.
Woodside Petroleum Ltd | Financial Statements 103
NOTES TO THE FINANCIAL STATEMENTS D. OTHER ASSETS AND LIABILITIES
for the year ended 31 December 2019
D.7 Leases (cont.)
Lease liabilities are initially measured at the present value of
future minimum lease payments, discounted using the Group’s
incremental borrowing rate if the rate implicit in the lease cannot
be readily determined, and are subsequently measured at
amortised cost using the effective interest rate. Minimum lease
payments are fixed payments or index-based variable payments
incorporating the Group’s expectations of extension options and
do not include non-lease components of a contract. A portfolio
approach was taken when determining the implicit discount
rate for five LNG vessels with similar terms and conditions on
transition.
The lease liability is remeasured when there are changes in
future lease payments arising from a change in rates, index or
lease terms from exercising an extension or termination option.
A corresponding adjustment is made to the carrying amount of
the lease assets, with any excess recognised in the consolidated
income statement.
There are no restrictions placed upon the lessee by entering into
these leases.
Short-term leases and leases of low value
Short-term leases (lease term of 12 months or less) and leases of
low value assets are recognised as incurred as an expense in the
consolidated income statement. Low value assets comprise plant
and equipment.
Foreign exchange risk
The Group held $461 million of lease liabilities at 31 December
2019 in currencies other than US dollars (predominantly
Australian dollars).
Maturity profile of lease liabilities
The table below presents the contractual undiscounted cash
flows associated with the Group’s lease liabilities, representing
principal and interest. The figures will not necessarily reconcile
with the amounts disclosed in the consolidated statement of
financial position.
Payments of $64 million for short-term leases (lease term of
12 months or less) and payments of $14 million for leases of
low value assets were expensed in the consolidated income
statement for the year ended 31 December 2019.
The Group has short-term and low value lease commitments for
marine vessels and carriers, property, drill rigs and plant and
equipment contracted for, but not provided for in the financial
statements of $74 million.
Key estimates and judgements
(a) Control
Judgement is required to assess whether a contract is or contains a
lease at inception by assessing whether the Group has the right to
direct the use of the identified asset and obtain substantially all the
economic benefits from the use of that asset.
(b) Lease term
Judgement is required when assessing the term of the lease and
whether to include optional extension and termination periods.
Option periods are only included in determining the lease term at
inception when they are reasonably certain to be exercised. Lease
terms are reassessed when a significant change in circumstances
occurs. On this basis, possible additional lease payments amounting
to $1,768 million were not included in the measurement of lease
liabilities.
(c) lnterest in joint arrangements
Judgement is required to determine the Group's rights and
obligations for lease contracts within joint operations, to assess
whether lease liabilities are recognised gross (100%) or in proportion
to the Group’s participating interest in the joint operation. This
includes an evaluation of whether the lease arrangement contains
a sublease with the joint operation.
(d) Discount rates
Judgement is required to determine the discount rate, where the
discount rate is the Group’s incremental borrowing rate if the rate
implicit in the lease cannot be readily determined. The incremental
borrowing rate is determined with reference to the Group's
borrowing portfolio at the inception of the arrangement or
the time of the modification.
Due for payment in:
1 year or less
1-2 years
2-3 years
3-4 years
4-5 years
More than 5 years
2019
US$m
154
154
150
149
148
1,045
1,800
Lease commitments
The table below presents the contractual undiscounted cash flows
associated with the Group's future lease commitments after
31 December 2019 for non-cancellable leases not yet commenced,
representing principal and interest.
Due for payment:
Within one year
After one year but not more than five years
Later than five years
104 Woodside Petroleum Ltd | Annual Report 2019
2019
US$m
24
130
73
227
NOTES TO THE FINANCIAL STATEMENTS E. OTHER ITEMS
for the year ended 31 December 2019
In this section
This section addresses information on items which require disclosure to comply with Australian Accounting Standards and the Australian
Corporations Act 2001, however are not considered critical in understanding the financial performance or position of the Group.
This section includes Group structure information and other disclosures.
E.
E.1
E.2
E.3
E.4
E.5
E.6
E.7
E.8
E.9
Other items
Contingent liabilities and assets
Employee benefits
Related party transactions
Auditor remuneration
Events after the end of the reporting period
Joint arrangements
Parent entity information
Subsidiaries
Other accounting policies
Page 106
Page 106
Page 108
Page 108
Page 108
Page 108
Page 109
Page 110
Page 112
Woodside Petroleum Ltd | Financial Statements 105
NOTES TO THE FINANCIAL STATEMENTS E. OTHER ITEMS
for the year ended 31 December 2019
E.1 Contingent liabilities and assets
(c) Share plans
2019
US$m
2018
US$m
The Group provides benefits to its employees (including KMP) in
the form of share-based payments whereby employees render
services for shares (equity-settled transactions).
Contingent liabilities at reporting date
Not otherwise provided for or disclosed in the
financial statements:
Contingent liabilities
Guarantees
55
9
64
73
7
80
Contingent liabilities relate predominantly to actual or potential
claims on the Group for which amounts are reasonably estimated
but the liability is not probable and therefore the Group has
not provided for such amounts in these financial statements.
Additionally, there are a number of other claims and possible
claims that have arisen in the course of business against entities
in the Group, the outcome of which cannot be foreseen at present
and for which no amounts have been included in the table above.
E.2 Employee benefits
(a) Employee benefits
Employee benefits for the reporting period are as follows:
Employee benefits
Share-based payments
Defined contribution plan costs
Defined benefit plan expense
2019
US$m
246
21
28
1
296
2018
US$m
282
21
33
2
338
Recognition and measurement
The Group’s accounting policy for employee benefits other than
superannuation is set out in Note D.5. The policy relating to share-
based payments is set out in Note E.2(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 2019 was $18 million
(2018: $15 million).
(b) Compensation of key management personnel
Key management personnel (KMP) compensation for the financial
year was as follows:
Short-term employee benefits
Post-employment benefits
Share-based payments
Long-term employee benefits
Termination benefits
2019
US$
6,416,430
71,137
7,253,672
281,882
-
14,023,121
2018
US$
8,674,034
92,068
8,645,740
178,745
174,047
17,764,634
106 Woodside Petroleum Ltd | Annual Report 2019
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
relating to the WEP for 2018 and prior years, entitles the participant
to receive a Woodside share on a vesting date three years after
the grant date. For the 2019 WEP, 75% of the ERs offered to each
participant will vest three years after the grant date, with the
remaining 25% vesting five years after the grant date.
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
executives 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. Accordingly, the 2019
restricted shares and performance rights have not been included in
the table below as they have not been approved as at 31 December
2019. An expense related to the 2019 performance year has been
estimated for restricted shares and performance rights, using fair
value estimates based on inputs at 31 December 2019.
The restricted shares and performance rights relating to the 2018
performance year were granted on 13 February 2019 and have
been included in the table below. The expense estimated as at
31 December 2018 in relation to the 2018 performance year was
updated to the fair value on grant date during the period.
NOTES TO THE FINANCIAL STATEMENTS E. OTHER ITEMS
for the year ended 31 December 2019
E.2 Employee benefits (cont.)
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.
Year ended 31 December 2019
Opening balance
Granted during the year1,2
Vested during the year
Forfeited during the year
Performance rights at 31 December 2019
Fair value of rights granted during the year
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
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:
Number of performance rights
Employee plans
Executive plans
WEP
SWEP
STA
LTA
6,325,364
2,537,991
(1,645,915)
(305,889)
6,911,551
US$m
47
17,678
-
-
-
17,678
US$m
-
813,968
417,166
(338,537)
(24,881)
867,716
US$m
10
2,545,915
731,799
(212,694)
(360,877)
2,704,143
US$m
15
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
1. For the purpose of valuation, the share price on grant date for the 2019 WEP allocations was $21.72 (2018: $24.36). There were no SWEP allocations in 2019. The average share
price on grant date for 2018 SWEP allocations was $24.09.
2. For the purpose of valuation, the share price on grant date for the 2019 STA was $24.67 (2018: $24.45) and LTA allocations was $24.71 (2018: $24.45).
For more detail on these share plans and performance rights issued to KMPs, refer to the Remuneration Report on pages 55-75.
Woodside Petroleum Ltd | Financial Statements 107
NOTES TO THE FINANCIAL STATEMENTS E. OTHER ITEMS
for the year ended 31 December 2019
E.3 Related party transactions
(b) Interest percentage in joint operations
Producing and developing assets
Oceania
North West Shelf
Greater Enfield and Vincent
Stybarrow¹
Balnaves
Pluto
Wheatstone
Exploration and evaluation assets
Oceania
Browse Basin
Carnarvon Basin2,3
Bonaparte Basin
Africa
Gabon4
Senegal
The Americas
Peru
Kitimat
Asia
Republic of Korea5
Myanmar6
Europe
Ireland7
Bulgaria
Group Interest %
2019
2018
12.5 - 50.0
60.0
50.0
65.0
90.0
13.0 - 65.0
12.5 - 50.0
60.0
50.0
65.0
90.0
13.0 - 65.0
30.6
15.8 - 90.0
26.7 - 35.0
30.6
15.8 - 90.0
26.7 - 35.0
-
35.0
21.3 - 40.0
35.0
35.0
50.0
35.0
50.0
50.0
40.0 - 50.0
-
40.0 - 55.0
90.0
30.0
60.0 - 90.0
30.0
1. One permit (WA-255-P) was surrendered in 2019.
2. Scarborough is included in the Carnarvon Basin.
3. One permit (WA-536-P) was entered in 2019.
4. Two permits (Block F15 Doukou Dak and Diaba) expired in 2019.
5. Concession agreement entered into Blocks 8 and 6-1N in Korea in 2019.
6. Production Sharing Contracts for Myanmar Blocks AD-5, A-4 and AD-2 expired
in 2019.
7. Equity and operatorship transferred to existing partner in FEL 3/14.
The principal activities of the joint operations above are
exploration, development and production of hydrocarbons.
Transactions with directors
There were no transactions with directors during the year. Key
management personnel compensation is disclosed in Note E.2(b).
E.4 Auditor remuneration
The auditor of Woodside Petroleum Ltd is Ernst & Young (EY).
(a) Amounts received or due and receivable for an audit or review of the
financial statements of the entity and any other entity in the Group by:
2019
US$’000
2018
US$’000
EY Australia
Other EY firms
1,574
193
1,767
1,643
148
1,791
(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
345
104
125
206
780
333
237
130
163
863
E.5 Events after the end of the reporting period
In January 2020, Woodside took an unconditional FID on
Sangomar Field Development Phase 1 and execution phase
activities commenced. This followed the Government of Senegal’s
grant of the Exploitation Authorisation. At FID, key contracts
awarded for project execution with related lease and capital
commitments of $310 million and $714 million, respectively.
On 9 January 2020, Woodside Energy Finance (UK) Ltd entered
into a secured loan agreement to provide up to $450 million, with
a maximum term of 12 years, to a Sangomar joint venture partner
for the purposes of funding Sangomar project costs.
On 17 January 2020, the Group completed a $600 million syndicated
facility with a term of 7 years at a fixed interest rate of 2.92%.
E.6 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 advisor.
Group Interest %
2019
2018
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
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.
108 Woodside Petroleum Ltd | Annual Report 2019
NOTES TO THE FINANCIAL STATEMENTS E. OTHER ITEMS
for the year ended 31 December 2019
E.6 Joint arrangements (cont.)
E.7 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
Current liabilities
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
2019
US$m
2018
US$m
404
9,949
(133)
(484)
9,736
9,010
(39)
120
296
349
9,736
1,288
1,288
357
9,839
-
(680)
9,516
8,880
(31)
121
296
250
9,516
1,005
1,002
Guarantees
Woodside Petroleum Ltd and Woodside Energy Ltd (a subsidiary
company) are parties to a Deed of Cross Guarantee as disclosed
in Note E.8. 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.
Woodside Petroleum Ltd | Financial Statements 109
NOTES TO THE FINANCIAL STATEMENTS E. OTHER ITEMS
for the year ended 31 December 2019
Name of entity
Woodside Energy (SL) Pty Ltd
Woodside Energy Technologies Pty Ltd
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
(2,4,12)
(2,4,13)
(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 2019.
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 2019, 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 2019, Woodside Energy Holdings (South America) Pty Ltd held a
99.99% interest in the shares of Woodside Energia (Brasil) Apoio Administrativo Ltda and
Woodside Energy Ltd held the remaining 0.01% interest. On 5 November 2019, Woodside
Energia (Brasil) Investimento em Exploracao de Petroleo Ltda changed its name to
Woodside Energia (Brasil) Apoio Administrativo Ltda.
8. As at 31 December 2019, 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 Holdings II Pty Ltd, Woodside Power Pty Ltd and Woodside Power
(Generation) Pty Ltd were incorporated on 23 January 2019.
10. Woodside Energy (Congo) Limited was incorporated on 27 August 2019.
11. Woodside Energy Finance (UK) Limited was incorporated on 20 December 2019.
12. These subsidiaries were deregistered on 1 August 2019.
13. Woodside Energy Technologies Pty Ltd acquired 35% in Blue Ocean Seismic Services
Limited on 15 October 2019. This shareholding was diluted to 30% on 30 December 2019
and has been accounted for as an investment in associate at 31 December 2019.
All subsidiaries were incorporated in Australia unless identified
with one of the following symbols:
The Netherlands ¥ Tanzania
l Brazil
n Cameroon z New Zealand
t Canada
£ France
y Singapore
º Spain
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.
E.8 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 n
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 II Pty Ltd
Woodside Power Pty Ltd
Woodside Power (Generation) Pty Ltd
Woodside Energy Holdings (South America) Pty Ltd
Woodside Energia (Brasil) Apoio Administrativo Ltda l
Woodside Energy Holdings (UK) Pty Ltd
Woodside Energy (UK) Limited p
Woodside Energy Finance (UK) Limited p
Woodside Energy (Congo) 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
110 Woodside Petroleum Ltd | Annual Report 2019
Notes
(1,2,3)
(2,3,4)
(2,4)
(2,4)
(5)
(5)
(5)
(2,4)
(2,4)
(2,4)
(2,4)
(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)
(4)
(2,4)
(4)
(4)
(2,4)
(2,4)
(6)
(2,4,9)
(2,4,9)
(2,4,9)
(2,4)
(7)
(2,4)
(4)
(4,11)
(4,10)
(4)
(4)
(4)
(4)
(4)
(4)
(2,4)
(2,4,12)
(2,4,12)
(2,4,12)
(2,4)
NOTES TO THE FINANCIAL STATEMENTS E. OTHER ITEMS
for the year ended 31 December 2019
E.8 Subsidiaries (cont.)
(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.8(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
2019
US$m
2018
US$m
423
5,185
(6)
(577)
5,025
503
718
263
26
(48)
492
(34)
(458)
-
371
2,989
(71)
(396)
2,893
289
1,189
132
13
(32)
275
(10)
(265)
-
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)
-
(c) Deed of Cross Guarantee and Closed Group
Woodside Petroleum Ltd and Woodside Energy Ltd are parties to
a Deed of Cross Guarantee under which each company guarantees
the debts of the other. By entering into the Deed, the entities have
been granted relief from the Corporations Act 2001 requirements
for the preparation, audit and publication of accounts, pursuant
to 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
Adoption of AASB 16 (net of tax)
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
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
Lease assets
Total non-current assets
Total assets
Current liabilities
Payables
Other financial liabilities
Other liabilities
Provisions
Tax payable
Lease liabilities
Total current liabilities
Non-current liabilities
Payables
Deferred tax liabilities
Other financial liabilities
Other liabilities
Provisions
Lease liabilities
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
2019
US$m
2018
US$m
3,471
33
3,504
1,261
3
(1,189)
3,579
191
(54)
137
2,033
-
(909)
1,261
93
445
62
9
18
-
627
80
258
55
36
15
10
454
23
30,250
1,634
4,101
176
38
360
36,582
37,209
15
29,781
1,501
4,063
181
23
-
35,564
36,018
313
22
46
238
133
17
769
349
27
53
117
-
-
546
20,974
507
15
20
1,143
360
23,019
23,788
13,421
23,017
485
14
36
944
-
24,496
25,042
10,976
9,010
(39)
871
3,579
13,421
8,880
(31)
866
1,261
10,976
Woodside Petroleum Ltd | Financial Statements 111
NOTES TO THE FINANCIAL STATEMENTS E. OTHER ITEMS
for the year ended 31 December 2019
E.9 Other accounting policies
Operating lease commitments (comparative period):
(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.8(a).
The tax expense/(benefit), deferred tax liabilities and deferred tax
assets arising from temporary differences of the members of the
tax consolidated group are recognised in the separate financial
statements of the members of the tax consolidated group, using the
stand-alone approach.
Entities within the tax consolidated group have entered into a tax
funding arrangement and a tax sharing agreement with the head
entity. Under the tax funding agreement, Woodside Petroleum Ltd
and each of the entities in the tax consolidated group have agreed to
pay or receive a tax equivalent payment to or from the head entity,
based on the current tax liability or current tax asset of the entity.
The tax sharing agreement entered into between members of
the tax consolidated group provides for the determination of the
allocation of income tax liabilities between the entities, should the
head entity default on its tax payment obligations. No amounts
have been recognised in the financial statements in respect of
this agreement as payment of any amounts under the tax sharing
agreement is considered remote.
(b) New and amended accounting standards and interpretations
issued but not yet effective
A number of new standards, amendment of standards and
interpretations have recently been issued but are not yet effective
and have not been adopted by the Group as at the financial reporting
date.
The Group has reviewed these standards and interpretations and
has determined that none of the new or amended standards will
significantly affect the Group’s accounting policies, financial position
or performance.
Rents payable on non-cancellable leases, due:
Within one year
After one year but not more than five years
Later than five years
2018
US$m
189
625
1,198
2,012
Transition to AASB 16
The Group adopted the new standard using the modified
retrospective approach and applied the practical expedient per AASB
16.C10(a) and (c). Lease liabilities are measured at the present value
of future payments on the initial date of application, being 1 January
2019. The lease assets are measured as if AASB 16 had been applied
from the commencement of the lease using the discount rate at the
date of initial application with any difference between the lease assets
and lease liabilities recognised as an adjustment to opening retained
earnings on 1 January 2019. Opening adjustments were recognised as
at 1 January 2019 as indicated in the table below.
Impact on equity (increase/(decrease)):
Lease assets
Lease liabilities
Deferred tax asset
Retained earnings
Land and
buildings
US$m
429
(444)
2
(13)
Marine vessels
and carriers
US$m
600
(758)
16
(142)
Lease liabilities reconciliation on transition:
Operating lease commitments disclosed at
31 December 2018
Less:
Present value discounting of lease liabilities¹
Short-term leases
Low value leases
Contracts reassessed as service agreements
Lease liabilities recognised on transition
Total
US$m
1,029
(1,202)
18
(155)
US$m
2,012
(706)
(63)
(16)
(25)
1,202
1. Lease liabilities were discounted using a weighted average discount rate of 7.6%.
(d) New and amended accounting standards and interpretations
(c) New and amended accounting standards and interpretations
early adopted
The Group early adopted AASB 2019-3 Amendments to Australian
Accounting Standards – Interest Rate Benchmark Reform
(AASB 2019-3) as of 1 January 2019.
AASB 2019-3 amendments were issued in response to Interbank
Offered Rates reforms, and provide mandatory temporary relief
allowing hedge accounting to continue under existing interest rate
assumptions during the reform period. The Group applied this relief
to its derivative financial instruments designated as hedges, and
will continue to assess its accounting treatment in future reporting
periods as the reforms progress.
adopted
The Group adopted AASB 16 as of 1 January 2019.
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 lease assets and interest on the lease liabilities are
recognised in the consolidated income statement. The Group’s new
leases accounting policy is detailed in Note D.7.
Before the adoption of AASB 16, the Group classified each of its
leases (as lessee) at inception as either a finance lease or operating
lease per AASB 117 Leases. For operating leases, the leased item
was not capitalised and the lease payments were recognised in
the consolidated income statement on a straight-line basis. Lease
incentives received were recognised in the income statement as
part of total lease expense.
112 Woodside Petroleum Ltd | Annual Report 2019
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 2019 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 2019 and
of the performance of the Group for the financial year ended 31 December 2019;
(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 2019 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.8 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 2019.
For and on behalf of the Board
R J Goyder, AO
Chairman
Perth, Western Australia
13 February 2020
P J Coleman
Chief Executive Officer and Managing Director
Perth, Western Australia
13 February 2020
Woodside Petroleum Ltd | Financial Statements 113
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) and its subsidiaries
(collectively the Group), which comprises the consolidated statement of financial position as at 31
December 2019, 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)
giving a true and fair view of the Group’s financial position as at 31 December 2019 and of its
financial performance for the year ended on that date.
b)
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 judgement, 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
114 Woodside Petroleum Ltd | Annual Report 2019
Independent audit report (cont.)
1.
Impairment of oil and gas properties
Why significant
How our audit addressed the key audit matter
Australian Accounting Standards require the Group to
assess whether there are any indicators that oil and
gas properties may be impaired. If an indicator exists,
the Group must estimate the recoverable amount of
the asset. At year end, the Group concluded that there
were no impairment charges or reversals of previous
impairment charges required for any of its Cash
Generating Units (CGUs), apart from a $17 million
impairment charge in respect of LNG vessels disposed
of during the year.
We evaluated whether there had been significant changes
in the external or internal factors considered by the Group
in assessing whether indicators of impairment or reversal
of impairment existed, in particular, those relating to
forecast cash flows and the inputs used to formulate them.
This included assessing, in conjunction with our valuation
specialists, the discount rates, foreign exchange rates and
commodity prices with reference to market prices (where
available), market research, market practice, market
indices, broker consensus and historical performance.
In determining whether there was an indicator of
impairment or impairment reversal, the Group
considered whether there was a significant change in
the external or internal factors as set out in the
financial report in Note B.4. The key assumptions,
judgements and estimates used in the Group’s
assessment of impairment and reversal of impairment
are also disclosed in Note B.4.
The assessment of indicators of impairment and
reversal of impairment is complex and highly
judgemental and includes assessing a range of
external and internal factors and modelling a range of
assumptions that could impact the recoverable
amount of a CGU. Accordingly, this matter was
considered to be a key audit matter.
We used the work of the Group’s internal experts with
respect to the hydrocarbon reserve estimates 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 qualifications, competence and
objectivity of the Group’s experts and 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 the LNG vessels.
We also considered 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.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Woodside Petroleum Ltd | Financial Statements 115
Independent audit report (cont.)
2.
Impairment assessment of exploration and evaluation (E&E) assets
Why significant
How our audit addressed the key audit matter
The impairment testing process for E&E assets
commences with an assessment against indicators of
impairment under Australian Accounting Standard -
AASB 6 Exploration for and Evaluation of Mineral
Resources. If there is an indication that an E&E asset
may be impaired, the Group is required to estimate the
recoverable amount of the asset.
For the year ended 31 December 2019, the Group
identified impairment indicators in respect of the
Kitimat E&E asset. Impairment testing was undertaken
which resulted in an impairment charge of $720
million being recorded, as set out in Note B.4 of the
financial report.
The key assumptions, judgements and estimates used
in the formulation of the Group’s impairment
assessment of E&E assets, and those used in the
determination of the Kitimat E&E asset, are set out in
Note B.4 of the financial report.
The assessment of indicators of impairment and,
where required, the determination of recoverable
value is complex and highly judgemental. Accordingly,
this matter was considered to be a key audit matter.
We assessed the impairment analysis prepared by the
Group, evaluating the assumptions and methodologies
used and the estimates made. Our audit procedures
included the following:
• Considered the Group’s right to explore in the relevant
exploration area which included obtaining and
assessing supporting documentation such as license
agreements and correspondence with relevant
government agencies
• Considered the Group’s intention to carry out
substantive E&E activity in the relevant exploration
area, or plans to move the asset into development. This
included assessment of the Group’s cash-flow forecast
models approved by the Board for evidence of planned
future activity, and enquiries with senior management
as to the intentions and strategy of the Group
• Considered the Group’s assessment of the commercial
viability of results relating to E&E activities carried out
in the relevant license area
• Assessed the Group’s ability to finance both planned
future E&E activity and asset development plans
• Assessed the capabilities of management’s internal
experts for the purposes of estimating the potential
resources associated with E&E assets
• Tested, in conjunction with our valuation specialists,
the mathematical accuracy and integrity of the
impairment model developed in respect of the Kitimat
E&E asset
• Assessed, in conjunction with our valuation specialists,
the key assumptions used in the determination of the
recoverable value of the Kitimat E&E asset, with
reference to market information where available
• Considered the adequacy of the financial report
disclosure of the assumptions, key estimates and
judgements applied by management for the Group’s
assessment of impairment E&E assets. These have
been disclosed in Notes B.2 and B.4.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
116 Woodside Petroleum Ltd | Annual Report 2019
Independent audit report (cont.)
3. 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. 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 of the financial report.
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
modelling of impairment indicators.
We also considered the adequacy of the financial report
disclosures regarding PRRT included in Note A.5.
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 2019, 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.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Woodside Petroleum Ltd | Financial Statements 117
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
judgement 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.
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.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
118 Woodside Petroleum Ltd | Annual Report 2019
Report on the audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 57 to 75 of the directors' report for the year
ended 31 December 2019.
In our opinion, the Remuneration Report of Woodside Petroleum Ltd for the year ended 31 December
2019, 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
13 February 2020
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Woodside Petroleum Ltd | Financial Statements 119
N
O
I
T
A
M
R
O
F
N
I
R
E
D
L
O
H
E
R
A
H
S
SHAREHOLDER
STATISTICS
As at 6 February 2020
Number of shareholdings
There were 220,418 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
Greater than 100,000
Total
Unmarketable parcels
Number
of holders
Number
of shares
% of issued
capital
153,376
58,936
5,569
2,432
105
59,519,483
121,469,311
38,650,861
46,819,454
675,827,791
6.32
12.89
4.10
4.97
71.72
220,418
942,286,900
100.00
There were 2,473 members holding less than a marketable parcel of shares in the
company.
BNP Paribas Nominees Pty Ltd
36,823,113
Twenty largest shareholders
HSBC Custody Nominees (Australia) Limited
J P Morgan Nominees Australia Pty Limited
Citicorp Nominees Pty Limited
National Nominees Limited
BNP Paribas Noms Pty Ltd
HSBC Custody Nominees (Australia) Limited
Pacific Custodians Pty Limited
Citicorp Nominees Pty Limited
Citicorp Nominees Pty Limited
Australian Foundation Investment Company Limited
HSBC Custody Nominees (Australia) Limited-Gsco Eca
Netwealth Investments Limited
AMP Life Limited
Pacific Custodians Pty Limited
BNP Paribas Nominees Pty Ltd Hub24 Custodial Serv Ltd DRP
National Nominees Limited
Argo Investments Limited
Navigator Australia Ltd
Milton Corporation Limited
Total
Shares Held % of issued
capital
27.31
257,312,685
169,943,950
99,270,009
28,444,474
14,272,022
5,970,660
5,397,000
4,643,999
4,461,444
3,794,652
2,823,021
2,617,223
2,479,738
1,982,823
1,850,347
1,748,294
1,700,873
1,381,045
1,288,838
18.04
10.54
3.91
3.02
1.51
0.63
0.57
0.49
0.47
0.40
0.30
0.28
0.26
0.21
0.20
0.19
0.18
0.15
0.14
648,206,210
68.79
Substantial shareholders as disclosed in substantial shareholder notices given to the company are
as follows:
Vanguard Group (Vanguard Group Inc. (USA) and subsidiaries)
56,772,669
6.02
Vanguard Group's substantial shareholder notice was given on 31 October 2019. There has been no notice of a
change of interest of the substantial shareholder since that date.
Blackrock Group (Blackrock Inc. and subsidiaries)
57,411,550
6.09
Blackrock Group’s substantial shareholder notice was given on 30 May 2019. There has been no notice of a change of
interest of the substantial shareholder since that date.
120 Woodside Petroleum Ltd | Annual Report 2019
Annual General Meeting
The 2020 Annual General Meeting (AGM) of Woodside
Petroleum Ltd will be held at 2.00 pm (AWST) on Thursday,
30 April 2020, at the Perth Convention & Exhibition Centre,
21 Mounts Bay Road, Perth, Western Australia. Details of the
business of the meeting will be provided in the AGM notice.
The AGM will be webcast live on the internet. An archive version
of the webcast will be placed on the Woodside website to enable
the proceedings to be viewed at a later time.
Refer to Woodside’s website for copies of the Chairman’s
and CEO’s speeches (www.woodside.com.au).
Shareholders who reside outside the USA, the UK and Australia
may elect to receive their dividend electronically in their local
currency using the share registry’s Global Wire Payment
Service. For a list of currencies offered and how to subscribe to
the service, please contact the share registry.
Refer to Woodside’s website for the history of dividends
paid by the company (www.woodside.com.au).
Change of address or banking details
Shareholders should immediately notify the share registry
of any change to their address or banking arrangements for
dividends electronically credited to a bank account.
Share registry enquiries
Investors seeking information about their shareholdings should
contact the company’s share registry:
Refer to the share registry website to change details
(www.investorcentre.com/wpl).
Computershare Investor Services Pty Limited
Address:
Level 11, 172 St Georges Terrace
Perth WA 6000
Postal address:
GPO Box D182
Perth WA 6840
Telephone:
Facsimile:
Email:
Website:
1300 558 507 (within Australia)
+61 3 9415 4632 (outside Australia)
+61 3 9473 2500
web.queries@computershare.com.au
investorcentre.com/wpl
The share registry can assist with queries on share transfers,
dividend payments, the dividend reinvestment plan,
notification of tax file numbers and changes of name, address
or bank account details.
For security reasons, you will need your Security Reference
Number (SRN) or Holder Identification Number (HIN) when
communicating with the share registry. The share registry
website allows shareholders to make changes to address and
banking details online.
Refer to the share registry website for details of
shareholdings (www.investorcentre.com/wpl).
Dividend payments
Woodside declares its dividends in US dollars as this is our
functional and presentation currency. Woodside pays its
dividends in Australian dollars, unless a shareholder’s registered
address is in the United Kingdom (UK), where they are paid in
UK pounds sterling, or in the United States of America (USA),
where they are paid in US dollars.
Shareholders may have their dividends paid directly into any
bank or building society account in Australia, the USA or the
UK. Payments are electronically credited on the dividend
payment date and confirmed by payment advice. To request
direct crediting of dividend payments, please contact the
share registry or visit the share registry website
(www.investorcentre.com/wpl).
Shareholders must make an election to alter their dividend
currency by the business day after the record date for the
dividend.
Australian Securities Exchange listing
Woodside Petroleum Ltd securities are listed on the ASX under
the code WPL.
American Depositary Receipts
Citibank (Citi) sponsors a level-one American Depositary
Receipts (ADR) program in the USA. One Woodside share
equals one ADR and trades over the counter under the
symbol ‘WOPEY’.
ADR holders should deal directly with Citi on all matters related
to their ADRs.
Enquiries should be directed to:
Citibank Shareholder Services
Address:
PO Box 43077
Providence
Rhode Island 02940-3077
USA Toll Free Number:
1-877-CITI-ADR
International callers:
Facsimile:
Email:
+1 781 575 4555
+1 201 324 3284
citibank@shareholders-online.com
Investor Relations enquiries
Requests for specific information on the company can be
directed to Investor Relations:
Address:
Postal address:
Telephone:
Email:
Website:
Woodside Petroleum Ltd
Mia Yellagonga
11 Mount Street
Perth WA 6000
GPO Box D188
Perth WA 6840
+61 8 9348 4000
investor@woodside.com.au
woodside.com.au
Woodside Petroleum Ltd | Annual Report 2019
121
Key announcements 2019
Events calendar 2020
January
February
March
April
June
July
August
Scarborough Contracts awarded
Full-year 2018 results and briefing
Sustainable Development Report 2018
First quarter 2019 report
Pluto LNG turnaround
Investor site visit
Second quarter 2019 report
Half-year 2019 results
First oil from Greater Enfield
October
Third quarter 2019 report
November
Scarborough resource volume increase
Investor Briefing Day 2019
December
Long-term LNG supply contract
Key calendar dates for Woodside shareholders in 2020.
Please note dates are subject to review.
February
March
April
June
July
August
October
13
13
13
24
24
25
20
16
30
30
16
13
15
Full-year 2019 results and briefing
Annual Report 2019
Sustainable Development
Report 2019
Ex-dividend date for final dividend
Closing date for receipt of director
nominations
Record date for final dividend
Payment date for final dividend
First quarter 2020 results
Annual General Meeting
Half-year end 2020
Second quarter 2020 results
Half-year 2020 results
Third quarter 2020 results
November
Investor Briefing Day 2020
December
31
Year-end 2020
Unreasonable prejudice
As permitted by sections 299(3) and 299A(3) of the Corporations
Act 2001, we have omitted certain information from this
operating and financial review in relation to our business strategy,
future prospects and likely developments in our operations
and the expected results of those operations in future financial
years. We have done this on the basis that such information, if
disclosed, would be likely to result in unreasonable prejudice to
Woodside (for example, because the information is premature,
commercially sensitive, confidential or could give a third party a
commercial advantage). The omitted information relates to our
internal budgets, forecasts and estimates, details of our business
strategy, and LNG contractual pricing.
Forward-looking statements
This report contains forward-looking statements, including
statements of current intention, statements of opinion and
expectations regarding Woodside’s present and future
operations, possible future events and future financial prospects.
Such statements are not statements of fact and may be
affected by a variety of known and unknown risks, variables and
changes in underlying assumptions or strategy that could cause
Woodside’s actual results or performance to differ materially
from the results or performance expressed or implied by such
statements. There can be no certainty of outcome in relation to
the matters to which the statements relate, and the outcomes are
not all within the control of Woodside.
Further information on some important factors that could cause
actual results or performance to differ materially from those
projected in such statements is contained in the ‘Risk’ section
on pages 38-41. Woodside makes no representation, assurance
or guarantee as to the accuracy or likelihood of fulfilment of
any forward-looking statement or any outcomes expressed or
implied in any forward-looking statement. The forward-looking
statements in this report reflect expectations held at the date of
this report. Except as required by applicable law or the Australian
Securities Exchange (ASX) Listing Rules, Woodside disclaims any
obligation or undertaking to publicly update any forward-looking
statements, or discussion of future financial prospects, whether
as a result of new information or of future events.
122 Woodside Petroleum Ltd | Annual Report 2019
Business directory
Registered offices
Perth
Woodside Petroleum Ltd
Mia Yellagonga
11 Mount Street
Perth WA 6000
AUSTRALIA
T: +61 8 9348 4000
Postal address:
GPO Box D188
Perth WA 6840
AUSTRALIA
Beijing
16/F, West Tower, 1607
World Financial Centre
No. 1 East 3rd Ring Middle Road
Chaoyang District, Beijing, 100020
CHINA
T: +86 10 8591 0577
F: +86 10 8591 0579
Broome
Unit 28 Shiba Lane
Broome WA 6725
AUSTRALIA
T: 1800 036 654
Postal address:
PO Box 2751
Broome WA 6725
AUSTRALIA
Calgary
Suite 3750
421-7th Avenue SW
Calgary Alberta T2P 4K9
CANADA
T: +1 855 956 0916
Postal address:
PO Box 22240 Bankers Hall
Calgary Alberta T2P 4J6
CANADA
Canberra
Suite 12.03
15 London Circuit
Canberra ACT 2601
AUSTRALIA
T: +61 8 9348 4000
Dakar
BP 15817
Fann, Dakar
SENEGAL
T: +221 32 824 40 60
Dili
Palm Business and Trade Centre Block
E01-06 Surik Mas, Fatumeta
BairroPite Dili
TIMOR-LESTE
T: +670 3310804
Houston
Sage Plaza
5151 San Felipe, Suite 980
Houston TX 77056
USA
T: +1 713 401 0000
F: +1 713 401 0088
Karratha
The Quarter HQ
Level 3, 24 Sharpe Avenue
Karratha WA 6714
AUSTRALIA
T: +61 8 9158 8100
Postal address:
PO Box 517
Karratha WA 6714
AUSTRALIA
London
3rd Floor, Pollen House
10-12 Cork Street
Mayfair, London W1S 3NP
UNITED KINGDOM
T: +44 20 7009 3900
Roebourne
39 Roe Street
Roebourne WA 6718
AUSTRALIA
T: +61 8 9158 8949
Seoul
11F Kwanghwamun Building
149, Sejong-daero, Jongno-gu
Seoul 03186
REPUBLIC OF KOREA
T: +82 2 739 3290
F: +82 2 739 3294
Singapore
12 Marina View
Asia Square Tower 2 #18-03
Singapore 018961
SINGAPORE
T: +65 6709 8000
Tokyo
Imperial Tower
1-1 Uchisaiwaicho 1-Chome
Chiyoda-ku
Tokyo 100-0011
JAPAN
T: +81 3 3501 7031
F: +81 3 3581 2689
Yangon
Level 6, Vantage Tower
623 Pyay Road
Kamaryut Township
11041 Yangon
MYANMAR (BURMA)
T: +95 1 230 7460
F: +95 1 230 7461
Woodside Petroleum Ltd | Annual Report 2019
123
Asset facts
Producing facilities
Australia1
North West
Shelf
Role
Equity
Product
Karratha Gas
Plant
North Rankin
Complex
Goodwyn A
Platform
Operator
16.67%
Operator
16.67%
Operator
16.67%
Angel
Platform
Operator
16.67%
LNG, pipeline
natural gas,
condensate
and LPG
LNG, pipeline
natural gas,
condensate
and LPG
LNG, pipeline
natural gas,
condensate
and LPG
LNG, pipeline
natural gas,
condensate
and LPG
Australia Oil
Role
Equity
Product
Ngujima-Yin
FPSO
Operator
60%
Oil
Okha FPSO
Wheatstone
Operator
33.33%
Gas and oil
Non-operator
13%
LNG, pipeline
natural gas and
condensate
Pluto LNG
Role
Equity
Product
Pluto A
Platform
Operator
90%
Pluto LNG
Plant
Operator
90%
LNG, pipeline
natural gas and
condensate
LNG, pipeline
natural gas and
condensate
Developments
Australia1
Browse
Greater Scarborough
A-6 Development
Sangomar Phase 1
Kitimat LNG
Sunrise
Myanmar
Senegal
Canada
Australia/Timor-Leste
Role
Operator
Equity
30.6%
Operator
50-75%
40%
Joint operator
Operator
Non-operator
Operator
35%
Oil
50%
33.44%
LNG, pipeline
natural gas
LNG, pipeline natural
gas and condensate
Republic
of Korea
Role
Equity
Product
8, 6-1N
Joint operator
50%
Gas prone basin
Product
LNG, pipeline natural
gas and condensate
LNG, pipeline natural
gas and condensate
Pipeline natural
gas
Julimar-Brunello
Phase 2
Greater Western
Flank Phase 3
Role
Operator
Equity
65%
Operator
16.67%
Product
LNG, pipeline natural
gas and condensate
LNG, pipeline natural
gas and condensate
Exploration
Asia-Pacific
Myanmar
A-7
AD-7 and A-6
AD-1, AD-6 and AD-8
Role
Equity
Product
Europe
Bulgaria
Role
Equity
Product
Africa
Senegal
Role
Equity
Operator
45%
Joint operator
Joint operator
40%
50%
Gas prone basin
Gas prone basin
Gas prone basin
1-14 Khan Kubrat
Ireland
FEL 5/13 and FEL 11/18
Non-operator
30%
Oil or gas prone basin
Role
Equity
Product
Operator
90%
Oil or gas prone basin
Rufisque, Sangomar and
Sangomar Deep
Operator
35%
Latin America
Peru
Block 108
Role
Equity
Non-operator
35%
Product
Oil prone basin
Product
Oil prone basin
1. For further information on Woodside’s Australian titles, please refer to the titles register website (neats.nopta.gov.au).
124 Woodside Petroleum Ltd | Annual Report 2019
Glossary, units of measure and conversion factors
Glossary
$, $m
1P
2C
2P
US dollars unless otherwise stated, millions of dollars
Gross margin
Proved reserves
Best Estimate of Contingent resources
Proved plus Probable reserves
Acquisition costs
2018 acquisition expenditure divided by contingent resources
(2C) added through 2018 acquisition activity
AGM
AOI
APPEA
Annual General Meeting
Area of interest
Australian Petroleum Production & Exploration
Association
Appraisal well
A well drilled to follow up a discovery and evaluate its
commercial potential
ASX
A$
Average unit cash
cost of sales
BJV
Brent
Cash margin
CDP
CHF
Condensate
cps
CWLH
DBNGP
DRP
EBIT
EBITDA
EBITDAX
EEP
EPC, EPCI
EPS
Equity lifted LNG
Farm-in
FEED
FEL
FID
Australian Securities Exchange
Australian dollars
Average unit cash cost of sales includes production costs,
royalty and excise, shipping and direct sales costs, carbon
costs and insurance; excludes exploration and evaluation,
general administrative and other costs, depreciation and
amortisation, PRRT and income tax
Browse Joint Venture
Intercontinental Exchange (ICE) Brent Crude deliverable
futures contract (oil price)
Revenue from sale of produced hydrocarbons less production
costs, royalties and excise, insurance and shipping and
direct sales costs, divided by revenue from sale of produced
hydrocarbons
Carbon Disclosure Project
Swiss francs
Hydrocarbons that are gaseous in a reservoir but that
condense to form liquids as they rise to the surface
Cents per share
Cossack, Wanaea, Lambert and Hermes
Dampier to Bunbury Natural Gas Pipeline
Dividend reinvestment plan
Calculated as a profit before income tax, PRRT and net
finance costs
Calculated as a profit before income tax, PRRT, net finance
costs, depreciation and amortisation and impairment
Calculated as a profit before income tax, PRRT, net finance
costs, depreciation and amortisation, impairment and
exploration and evaluation expense
Employee equity plan
Engineering, procurement, construction and installation
Earnings per share
The proportion of LNG which Woodside is entitled to lift and
sell, in its own right, as a result of its participating interest in
the relevant project
Where one company acquires an interest in an exploration
permit or production licence by paying some of the past
or future costs of another company that is relinquishing its
interest
Front-end engineering design
Frontier exploration licence
Final investment decision
First half, second
half
Halves of the calendar year (H1 is 1 January to 30 June and
H2 is 1 July to 31 December)
Flaring
FPSO
FPU
The controlled burning of gas found in oil and gas
reservoirs
Floating production storage and offloading
Floating production unit
Gross profit divided by operating revenue. Gross profit
excludes income tax, PRRT, net finance costs, other income
and other expenses
Gas sale and purchase agreement
Greater Western Flank
Halves of the calendar year (H1 is 1 January to 30 June and
H2 is 1 July to 31 December)
Health, safety and environment
Health, safety, environment and quality
GSPA
GWF
H1, H2
HSE
HSEQ
Infill well
Well drilled for the purpose of increasing production
ISO
JCC
JV
KGP
LHS
LNG
LOPC
LPG
LTIF
MOU
International Organisation for Standardisation
The Japan Customs-cleared Crude is the average price of
customs-cleared crude oil imports into Japan as reported in
customs statistics (also known as ‘Japanese Crude Cocktail’)
and is used as a reference price for long-term supply LNG
contracts
Joint venture
Karratha Gas Plant
Left hand side
Liquefied natural gas
Loss of primary containment
Liquefied petroleum gas
Lost time injury frequency
Memorandum of understanding
Net debt
Total debt less cash and cash equivalents
NOJV
NPAT
NT
NWS
PEP
PRRT
PSC
PSE
Non-operating joint venture
Net profit after tax
Northern Territory
North West Shelf
Petroleum exploration permit
Petroleum resources rent tax
Production sharing contract
Process safety event
Q1, Q2, Q3, Q4
Quarters of the calendar year (Q1 is 1 January to 31 March,
Q2 is 1 April to 30 June, Q3 is 1 July to 30 September, Q4 is
1 October to 31 December)
RAP
Woodside’s Reconciliation Action Plan
Return on equity
Return on shareholder funds is calculated as NPAT (excluding
non-controlling interests) divided by equity attributable to
the equity holders of the parent
RFSU
RHS
ROACE
RSSD
SPA
Spudded
Tier 1 PSE
Tier 2 PSE
TRIR
TSR
Ready for start-up
Right hand side
Return on average capital employed, calculated as EBIT
divided by average non-current liabilities and average equity
attributable to equity holders of the parent
Rufisque Offshore, Sangomar Offshore and Sangomar Deep
Offshore
Sale and purchase agreement
Commenced well-drilling process
A typical Tier 1 process safety event is loss of containment
of hydrocarbons greater than 500 kg (in any one-hour
period)
A typical Tier 2 process safety event is loss of containment of
hydrocarbons greater than 50 kg but less than 500 kg (in any
one-hour period)
Total recordable injury rate. The number of recordable injuries
(fatalities, lost workday cases, restricted workday cases and
medical treatment cases) per 1,000,000 work hours
Total shareholder return
Free cashflow
Cashflow from operating activities less cashflow from
investing activities
Unit production
cost
Production cost ($ million) divided by production volume
(MMboe)
FVLCD
GDP
Gearing
Fair value less costs to dispose
Gross domestic product
Net debt divided by net debt and equity attributable to the
equity holders of the parent
USA
USD
WA
United States of America
US dollars
Western Australia
Woodside Petroleum Ltd | Annual Report 2019
125
Conversion factors1
Product
Pipeline natural gas
Liquefied natural gas (LNG)
Condensate
Oil
Liquefied petroleum gas (LPG)
Natural gas
Dry gas
Factor
1 TJ
1 tonne
1 bbl
1 bbl
1 tonne
1 MMBtu
1 MMBoe
Conversion factors¹
163.6 boe
8.9055 boe
1.000 boe
1.000 boe
8.1876 boe
0.1724 boe
5.7 Bcf
1. Minor changes to some conversion factors can occur over time due to gradual
changes in the process stream.
Units of measure
bbl
barrel
bbl/d
barrels per day
Bcf
boe
billion cubic feet
barrel of oil equivalent
CO₂-e
carbon dioxide equivalent
kPa
kt
thousand Pascals
thousand tonnes
MMbbl
million barrels
MMboe
million barrels of oil equivalent
MMBtu
million British thermal units
mmscf
million standard cubic feet
mmscf/d million standard cubic feet per day
MPa
Mtpa
psi
t
Tcf
TJ
million Pascals
million tonnes per annum
pounds per square inch
tonnes
trillion cubic feet
terajoules
126 Woodside Petroleum Ltd | Annual Report 2019
Index
A
American Depositary Receipts 121
Annual General Meeting (AGM) 7, 87, 96, 121, 122
Australia Oil 26, 85, 86, 90, 101, 124
B
Balance sheet 17, 40, 87, 88, 107
Board of Directors 48, 52, 82, 106
M
Myanmar 2, 4, 9, 11, 12, 17, 18, 20, 27, 28, 36, 45, 61, 62, 64, 108, 124
N
Net profit after tax (NPAT) 3, 4, 6, 14-17, 19, 56, 57, 61, 82
Ngujima-Yin FPSO 2, 13, 26, 28, 76, 124
North Rankin Complex 24, 61, 124
North West Shelf Project 2, 15, 16, 20, 24, 28, 30-31, 34, 85, 88
Browse 2, 5, 9, 11, 18, 30, 34, 45, 61, 62, 64, 85, 108, 110, 124
NWS Project Extension 30-31
Bulgaria 27, 108, 124
Burrup Hub 2, 6, 9, 18, 21, 23, 24, 30, 61
C
Canada 2, 8, 12, 18, 20, 37, 45, 85, 91, 110, 124
Compass (workplace culture) 41, 43, 52, 57
Compliance 10, 38, 41, 53, 64, 82, 88
Contingent resources 30, 32, 34, 36, 44-47, 93
Conversion factors 47, 126
Corporate governance 42, 52
Credit rating 17, 19, 40, 82, 100
D
Directors’ declaration 113
Diversity 52, 62
Dividend 5, 6, 14, 16, 19, 53, 57, 59, 61, 80-82, 87, 96, 99, 101, 106, 111, 121, 122
Dividend reinvestment plan (DRP) 6, 16, 61, 71, 81, 87, 96, 121
Drilling 4, 8, 11, 20, 23, 27, 32, 35, 36, 40
E
Effective income tax 14, 88
Employees 62, 66, 67, 102, 106, 107
Events calendar 122
Exchange rate 17, 42, 71, 72, 80, 82, 84, 94
Executive Incentive Plan (EIP) 66, 106
Executive Incentive Scheme (EIS) 56, 58, 106
Executives 10-11, 56-74, 85, 106, 107
External auditor relationship 52
F
Financial position 16, 19, 79, 82, 84, 88, 96-98, 104, 111-113
Financial Statements 53, 76-119
Focus areas 12
Free cashflow 14
G
Gabon 108
Gearing 4, 8, 14, 17, 19, 62, 96
Goodwyn A 24, 61, 124
Greater Enfield 4, 8, 15-18, 26, 28, 44, 61, 62, 64, 76, 85, 108, 122
Greater Western Flank 15, 24, 124
I
Independent audit report 114-119
Interconnector 9, 23, 24, 30-31, 64
Investment criteria 19
J
Julimar-Brunello 17, 26, 27, 61, 62, 64, 124
K
Karratha Gas Plant (KGP) 9, 24, 30-31, 34, 61, 64, 124
Key management personnel (KMP) 57-74, 106, 108
Korea 27, 108, 124
L
Long-term award (LTA) 63, 65, 66, 106
O
Okha FPSO 2, 13, 26, 124
Operating and Financial Review 14, 122
P
Peru 27, 108, 124
Pluto LNG 2, 4, 15, 16, 18, 20, 22-23, 28-33, 85, 88, 98, 122, 124
Pluto Train 2 11, 17, 30-32, 61, 62, 64
Pluto truck loading facility 23, 28-29, 64
Proved plus probable reserves 44-47, 92, 128
Proved reserves 46-47, 92
Pyxis Hub 16, 23, 61, 62, 64
R
Realised prices 15
Reconciliation Action Plan (RAP) 62
Remuneration Report 53, 54-75, 107, 113
Reserves and resources statement 44-47, 92, 93
Reserves replacement ratio 44
Return on equity 14
Risk management 38-43, 52, 62, 64, 82, 96, 100
S
Sales revenue 15, 22, 25, 128
Sangomar 2, 4, 9, 11, 17, 18, 20, 28, 35, 44, 61, 62, 64, 85, 108, 124
Scarborough 2, 5, 9, 11, 16-18, 20, 28, 30-33, 44-47, 61, 62, 64, 85, 95, 108, 122, 124
Security 2, 10, 41
Senegal 2, 9, 12, 18, 20, 27, 28, 35, 45-47, 108, 110, 124
Shareholdings: distribution 120
Share plans 68, 70, 74, 75, 78-81, 87, 99, 106, 107, 109, 111
Share registry 121
Shared value 5
Short-term award (STA) 63, 65, 66, 106
Strategy 6, 10, 16, 18, 20, 28, 39-43, 52, 56, 64, 67, 82, 122
Sunrise 2, 10, 18, 37, 45, 85, 124
Sustainable Development Report (SDR) 53
T
Task Force for Climate-related Financial Disclosure (TCFD) 42-43
Technology 2, 7, 8, 10, 18, 20, 23, 27, 32, 41, 50, 57, 62, 64
Timor-Leste 2, 12, 18, 20, 37, 124
Total recordable injury rate (TRIR) 3, 5, 61, 64
Total shareholder return (TSR) 58, 106
U
United States of America (USA) 21, 28, 121
V
Vincent 26, 28, 85, 108
Volume weighted average 15, 59
W
Wheatstone 2, 14, 16-18, 20, 26, 27, 28, 45-46, 85, 86, 88, 90, 94, 101, 103, 108, 124
Woodside Petroleum Ltd | Annual Report 2019
127
Summary charts
Product view
Regional view
Investment
Gas and condensate*
Oil
Exploration and other
2019
63%
23%
14%
2018
51%
27%
22%
*Indicative only as some assets produce oil and gas.
Investment
Australia
Canada
Rest of world
2019
90%
4%
6%
2018
83%
4%
13%
Our investment expenditure was primarily on Wheatstone,
the Greater Enfield Project, NWS subsea tie-backs and
exploration.
The majority of our 2019 investment was in Australia.
Production
Natural gas*
Oil
Condensate
*Includes LNG, LPG and pipeline gas.
2019
83%
6%
11%
2018
86%
4%
10%
Production
Australia
Canada
Rest of world
2019
>99%
<1%
0%
2018
99%
1%
0%
The majority of our production is from natural gas produced
through Pluto LNG and NWS Project.
Australian assets continue to provide the majority of
Woodside’s production volumes.
Sales revenue
Natural gas*
Oil
Condensate
2019
78%
8%
13%
2018
80%
6%
14%
*Includes LNG, LPG and pipeline gas.
Gas, largely sold as LNG, continues to provide the majority of
our sales revenue.
Sales revenue
Australia
Canada
Rest of world
2019
>99%
<1%
0%
2018
>99%
<1%
0%
The majority of our revenue is currently derived from Australia.
Reserves (Proved plus Probable)
Reserves (Proved plus Probable)
Dry gas
Oil
Condensate
2019
82%
10%
8%
2018
86%
5%
9%
Australia
Senegal
Rest of world
2019
95%
5%
0%
2018
100%
0%
0%
Gas represents the largest portion of Woodside’s Proved plus
Probable reserves.
The majority of Woodside’s Proved plus Probable reserves are
located in Australia.
128 Woodside Petroleum Ltd | Annual Report 2019
Ten-year comparative data summary
2019⁶
2018
20175
2016
2015
2014
2013
2012
2011
2010
83
3,271
44
586
360
119
267
141
2
4,873
3,680
3,531
1,091
84
3,761
25
651
301
202
210
1
5
5,240
4,041
3,814
2,278
142
2,674
43
422
391
192
53
47
11
3,975
3,095
2,918
1,714
292
2,751
34
413
302
202
70
-
11
4,075
3,004
2,734
1,388
295
3,095
34
421
650
180
354
-
1
5,030
3,443
3,063
441
376
4,563
80
901
1,133
198
161
-
23
7,435
5,853
5,568
3,672
366
3,347
88
1,000
896
150
-
-
79
5,926
4,460
4,188
2,538
367
2,834
125
903
1,918
125
-
-
76
6,348
5,528
5,162
3,795
375
1,509
127
860
1,795
-
-
-
136
4,802
3,423
2,864
2,212
149
227
177
270
380
285
272
366
559
1,688
15
737
229
480
39
343
37
91
29,353
6,849
2,791
16,617
3,305
(1,238)
317
1,451
46
39
183
628
103
1,364
148
144
27,088
4,071
2,397
17,489
3,296
(1,772)
(159)
1,188
16
-
84
465
96
1,069
123
98
25,399
5,065
4,747
15,081
2,400
(1,568)
(805)
1,320
26
-
48
367
105
868
104
83
24,753
4,973
4,688
14,839
2,587
(2,473)
51
443
749
4.1
2.1
14.4
5.7
66.8
0.7
9.7
5.5
0.5
88.9
5.6
67.7
0.5
9.7
5.6
0.5
89.6
5.65
728
993
9.3
7.8
12.1
4.6
69.6
0.4
9.2
4.2
1.2
89.2
4.6
71.9
0.6
9.3
3.8
1.2
91.4
6.05
100.0
122.4
108.2
67.7
328
1,039
7.4
7.1
23.9
6.3
61.2
0.7
7.7
6.9
1.3
84.1
6.0
61.7
0.6
8.0
6.8
1.3
84.4
6.54
117.0
69.9
965
1,214
6.2
5.8
24.0
12.9
63.6
0.7
9.3
6.9
1.6
95.0
12.9
63.7
0.7
9.3
6.7
1.6
94.9
7.09
124.2
74.4
1,517
22
1,083
85
243
87
26
3
109
23,839
4,441
4,319
14,226
2,475
(5,555)
(58)
1,305
4,309
2.0
0.2
23.3
13.2
57.6
0.7
8.5
12.5
0.2
92.7
13.1
57.5
0.7
8.4
12.3
0.2
92.2
7.59
133.5
42.6
1,441
21
434
163
993
102
2,414
293
255
24,082
2,586
(682)
15,876
4,785
(617)
(3,119)
1,218
45
387
179
545
65
1,749
213
249
23,770
3,764
1,541
15,225
3,330
(1,059)
(2,470)
261
425
17.5
15.2
(4.5)
13.3
58.3
0.8
9.4
11.2
0.2
93.2
13.3
60.3
0.8
9.1
11.4
0.2
95.1
6.65
117.1
54.1
166
420
12.0
11.5
9.2
14.0
52.4
0.9
9.5
8.0
0.9
85.7
13.9
53.6
0.9
9.5
8.2
0.9
87.0
7.09
125.2
67.0
1,184
26
157
137
614
61
2,983
366
130
24,810
4,340
1,918
15,148
3,475
161
(1,252)
383
1,145
18.3
19.7
11.2
13.9
42.6
1.1
8.6
16.8
0.8
83.8
13.8
43.9
1.1
9.3
16.0
0.8
84.9
7.51
130.9
95.9
309
1,310
115
708
1,579
-
-
-
172
4,193
3,431
3,126
2,256
305
749
24
97
(18)
697
2
1,575
204
105
20,196
4,915
3,952
11,091
2,104
(2,941)
608
627
28
(3)
26
677
2
1,507
190
110
23,231
5,102
5,061
12,658
2,242
(3,533)
362
778
703
2,651
2,933
11.8
11.9
28.6
14.0
22.4
1.1
7.8
15.7
2.9
63.9
14.0
22.6
1.2
7.9
16.0
2.9
64.6
7.80
138.7
108.5
13.5
14.2
26.3
14.8
22.7
1.3
9.1
19.8
4.5
72.2
14.8
23.2
1.4
9.1
19.7
4.5
72.7
8.02
154.7
117.5
Profit and loss
(USDm)5,6
Balance sheet
(USDm)5,6
Cashflow (USDm)
and capital
expenditure (USDm)
Volumes5
Other ASX data
Operating revenues
Australia domestic gas
Australia LNG
Australia LPG
Australia condensate
Australia oil
Australia LNG processing revenue
Trading revenue
Other hydrocarbon revenue
Other international
Total
EBITDAX
EBITDA1
EBIT
Exploration and evaluation (excluding
amortisation of permit acquisition)
Depreciation and amortisation
Amortisation of license acquisition costs
Impairment/(impairment reversal)
Net finance costs
Tax expense
Non-controlling interest
Reported NPAT
Reported EPS (cents)2
DPS (cents)
Total assets
Debt
Net debt
Shareholder equity
Cashflow from operations
Cashflow from investing
Cashflow from financing
Capital expenditure
Exploration and evaluation
Oil and gas properties and property, plant
and equipment
ROACE3 (%)
Return on equity (%)
Gearing (%)
Sales (million boe)
Australia domestic gas
Australia LNG
Australia LPG
Australia condensate
Australia oil
Other international
Total (million boe)
Production (million boe)
Australia domestic gas
Australia LNG
Australia LPG
Australia condensate
Australia oil
Other international
Total (million boe)
Reserves (Proved plus Probable) Gas (Tcf)
Reserves (Proved plus Probable) Condensate
(MMbbl)
Reserves (Proved plus Probable) Oil (MMbbl)
Other
Employees
Shares High (A$)
Low (A$)
Close (A$)
Number of shareholders
Market capitalisation (USD equivalent at
reporting date)
Market capitalisation (AUD equivalent at
reporting date)
Finding costs ($/boe) (3 year average)4
Reported effective income tax rate (%)
Net debt/total market capitalisation (%)
3,834
37.40
30.49
34.38
Number (000’s) 942,287
3,662
39.00
28.45
31.32
3,511
3,597
31.88
33.97
23.94
28.16
31.16
33.08
936,152 842,445 842,445
214,350
3,456
38.33
26.20
28.72
823,911
225,138
3,803
44.23
33.71
38.01
823,911
227,798
3,997
38.16
30.09
33.88
3,856
3,896
50.85
39.54
29.76
33.29
30.62
38.90
823,911
823,911 805,672
217,383 208,277 205,868
3,650
49.28
40.56
42.56
783,402
201,134
220,065 209,753 209,383
22,666
20,681
21,762
18,922
17,250
25,664
28,579
28,983
25,287
33,745
32,396
29,320
27,868
26,251
23,663
31,317
32,050
27,914
24,670
33,342
21.71
57.2
12.3
29.90
31.7
11.6
26.21
34.0
21.8
39.06
35.9
24.8
107.45
49.8
25.0
44.09
30.1
(2.7)
30.43
29.8
5.4
14.09
27.2
6.6
12.67
30.5
20.0
6.12
25.2
11.6
1. The calculation for EBITDA has been updated to exclude impairment and amortisation of license acquisition costs. 2010 to 2013 EBITDA numbers have been restated to reflect this change in
calculation. EBIT is calculated as a profit before income tax, PRRT and net finance costs.
2. Earnings per share has been calculated using the following weighted average number of shares (2019: 935,833,092; 2018: 921,165,018; 2017: 866,201,877; 2016: 835,011,896; 2015: 822,943,960;
2014: 822,771,118; 2013:822,983,715; 2012: 814,751,356; 2011: 791,668,973; 2010: 773,388,154).
3. The calculation for ROACE has been revised in 2014 to use EBIT as the numerator, in addition to a change in the composition of capital employed. ROACE for 2009 to 2013 has been restated
to include this change.
4. Finding cost methodology is in accordance with the FAS69/SEC industry standard.
5. 2017 has been restated for the retrospective application of AASB 15 Revenue from Contracts with Customers (AASB 15). Comparative financial information prior to 2016 has not been restated
for AASB 15.
6. 2019 includes the adoption of AASB 16 Leases.
Annual Report 2019
Head Office:
Woodside Petroleum Ltd
Mia Yellagonga
11 Mount Street
Perth WA 6000
Postal Address:
GPO Box D188
Perth WA 6840
Australia
T: +61 8 9348 4000
F: +61 8 9214 2777
E: companyinfo@woodside.com.au
Woodside Petroleum Ltd
ABN 55 004 898 962
woodside.com.au