EXPERIENCE THE ENERGY

Transcription

1 EXPERIENCE THE ENERGY

2 OUR ENERGY BUSINESS is Australia s largest independent oil and gas company with a global portfolio, recognised for our world-class capabilities as an explorer, a developer, a producer and a supplier of energy. We have a clear strategy to deliver superior shareholder returns across three distinct time horizons. These horizons are characterised by cash generation from 2017, unlocking value from 2022, and repeating our successes from Our global exploration portfolio is balanced across established, emerging and frontier provinces covering Australia and the Asia-Pacific region, the Atlantic margins and sub-saharan Africa. Currently, we are focused on drilling to grow our resource volumes. We have significant equity interests in high-quality development opportunities in Australia (Wheatstone, Scarborough and Browse), Senegal (SNE), Myanmar and North America (Kitimat), and are pursuing new concepts and technology to enable cost-effective commercialisation of these resources. Our producing assets include the landmark North West Shelf (NWS) Project, Pluto LNG and non-operated Wheatstone LNG. Our operated assets are renowned for their safety, reliability and efficiency. As Australia s leading LNG operator, we produce 7% of global LNG supply, and operate a fleet of floating production storage and offloading (FPSO) facilities. We continue to expand our capabilities in marketing, trading and shipping and have enduring relationships that span more than 25 years with foundation customers throughout the Asia-Pacific region. continues to promote the use of LNG as a low-emissions and economically viable alternative fuel. Technology and innovation are essential to our long-term sustainability. We are working to bring down costs and find solutions to our business challenges. Today we are pioneering remote support and the application of artificial intelligence, embedding advanced analytics across our operations and making improvements in additive manufacturing. demonstrates strong safety and environmental performance in all its operations. We are committed to upholding our values of integrity, respect, working sustainably, discipline, excellence 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 long-term, meaningful relationships with communities are fundamental to maintaining our licence to operate. 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 more than 60 years of experience, making us a partner of choice. Karratha Gas Plant, Western Australia. 1

3 OUR AREAS OF ACTIVITY CONTENTS 2018 business priorities 4 OPERATIONS 6 Pluto LNG 8 North West Shelf Project 9 Australia oil Wheatstone LNG BROWSE DEVELOPMENT PLUTO LNG 10 SCARBOROUGH CANADA KITIMAT LNG LNG Burrup Hub 14 Scarborough Development 15 Beijing* Seoul* Browse Development 16 Tokyo* Kitimat LNG 16 Greater Western Flank 2 (GWF-2) Project 17 Other developments 17 Greater Enfield Project 19 EXPLORATION 24 Atlantic Margins 25 Sub-Saharan Africa 25 Taking our energy to the world OUR APPROACH TO SUSTAINABILITY MOROCCO USA PORT ARTHUR LNG GABON 20 Australia and Asia-Pacific MARKETING, TRADING AND SHIPPING IRELAND SENEGAL 19 PERU Karratha PLUTO LNG NORTH WEST SHELF PROJECT WHEATSTONE LNG PROJECTS AND DEVELOPMENTS OIL Senegal Broome NORTH WEST SHELF PROJECT1 AUSTRALIA OIL Onslow WHEATSTONE LNG GREATER ENFIELD PROJECT WESTERN MYANMAR AUSTRALIA Singapore* SUNRISE LNG AUSTRALIA Technology and innovation 32 Health, safety and environment 35 Building stronger communities 38 Business directory 41 Notes on Petroleum Resource Estimates: All petroleum resource estimates in this publication are to be read in conjunction with the Reserves Statement in s most recent Annual Report, as updated by subsequent ASX announcements available at Product type Production contribution Phase Gas Producing assets Oil Projects and developments Gas or oil *Denotes marketing office Appraisal and exploration Perth Headquarters 73% LNG 18% 9% LIQUIDS OTHER 1. Production from the Okha FPSO is now reported as part of our Australia Oil operations.

4 2018 BUSINESS PRIORITIES Unlock the Burrup Hub and maximise the value of existing infrastructure 5 Deliver near-term production growth from committed projects Browse to NWS Pluto-NWS Interconnector Wheatstone LNG Scarborough to Burrup FIRST PRODUCTION IN 2019 Commence Greater Enfield drilling campaign Commission Greater Western Flank-2 infrastructure At full production capacity, Wheatstone will contribute per annum Our share of Browse and Scarborough 1.5resources (2C)¹ bboe 1. As at 31 December Pluto domestic gas and LNG trucking Focusing on delivering Train 2 and domestic gas production, and optimising performance Image courtesy of Chevron Australia And maintain base business excellence SNE-Phase 1 FID 2019 Progress major developments Scarborough FID Ready 2020 Advance our Myanmar growth opportunity Browse FID Ready % UNIT PRODUCTION COST RELIABILITY 3.6/boe Pluto and NWS average

5 Pluto LNG Plant, Western Australia. 7 OPERATIONS Driven by our world-class capabilities, our operations are characterised by strong safety and environmental performance in remote and challenging locations.

6 PLUTO LNG Pluto LNG was taken from discovery in 2005 to first production in 2012 a clear demonstration of s world-class LNG capabilities and expertise. NORTH WEST SHELF PROJECT 9 Pluto LNG processes gas from the offshore Pluto and Xena gas fields in Western Australia. Gas is piped through a 180 km trunkline to a single onshore LNG-processing train. s long-standing LNG development and operating experience is backed by growing capability in LNG shipping, with Pluto LNG managing an integrated shipping fleet of four LNG vessels. Pluto LNG is underpinned by 15-year sales agreements with Kansai Electric and Tokyo Gas, which each hold a 5% interest in the project. Pluto LNG has delivered a step-change for s equity production and revenue since start-up in April 2012 and has cemented our place as Australia s largest producer of LNG. Since commencing operations, Pluto s average annualised capacity has increased from 4.3 Mtpa to 4.7 Mtpa. The Pluto Support Centre in Perth provides remote support for Pluto LNG operations, ensuring improved operational efficiency in a competitive LNG market. Planning continues for the expansion of Pluto LNG based on the acceleration of Pluto gas and the potential development of unallocated gas resources in the Carnarvon Basin. The Pluto Joint Venture is engaging with third-party resource owners about the potential to process gas through Pluto infrastructure. Studies have commenced on a potential Pluto NWS Interconnector, intended to unlock incremental value for both Pluto LNG and the North West Shelf Project. Subject to joint venture, regulatory and other approvals, developing a pipeline connection between the two plants could accelerate Pluto area gas reserves, and leverage existing Pluto offshore capacity and emerging NWS LNG ullage. Additional synergies between the two plants are also being considered. Feasibility studies on a 0.7 to 3.3 mtpa LNG train were concluded in 2017, broadening the options available for Pluto expansion. The North West Shelf (NWS) Project is Australia s largest producing oil and gas project, and one of the world s premier LNG facilities. A joint venture between six major international companies, the NWS Project supplies oil and gas to Australian and international markets from huge offshore gas, oil and condensate fields in the Carnarvon Basin off the north-west coast of Australia. The NWS offshore production facilities include four natural gas platforms and the oil-producing Okha FPSO facility. WE ARE AUSTRALIA S LARGEST INDEPENDENT OIL AND GAS COMPANY AND MOST EXPERIENCED LNG OPERATOR Onshore facilities include five LNGprocessing trains, two domestic gas trains and three liquefied petroleum gas fractionation units. Under s operation, the NWS Project has maintained a track record for reliable production and delivery. Natural gas has been produced from the NWS Project for domestic use since 1984, and it is the largest single supplier of pipeline gas in Western Australia. Annual LNG export capacity of 16.9 Development of existing NWS Project reserves will ensure this world-class asset continues to generate value for years to come. MTPA OF LNG has delivered 4,500 + LNG cargoes to international customers since 1989

7 AUSTRALIA OIL WHEATSTONE LNG 11 s first oil discovery off North West Cape was the Vincent oilfield in 1998, followed by the nearby Enfield and Laverda oilfields in 1999 and 2000 respectively. Oil production began in 2006 when the Nganhurra FPSO facility started operations from the Enfield oilfield. The Ngujima-Yin FPSO commenced oil production from the Vincent oilfield in Since start-up of operations, Vincent and Enfield have produced more than 130 MMbbl (100% project) of oil. We have developed FPSO capabilities that extend across engineering design, operations and maintenance, allowing us to operate in remote marine environments with extreme weather conditions. We are using new technologies to extend our Australia oil assets via infill wells, near-field tiebacks and increased production reliability. Additional production will be added from the Greater Enfield Project in mid Please refer to page 19 for more information. will use its expertise in deepwater drilling, development, operation of subsea infrastructure and FPSOs as it develops and eventually operates oilfields in Senegal. Enfield 2017 Oil Production 6.8 MMboe Wheatstone LNG, comprising the Wheatstone and Julimar-Brunello Projects, is a world-class asset, which will make a significant contribution to s annual production. is the operator of the Julimar Development Project (JDP), which is a subsea development that will supply raw gas and condensate from the Julimar and Brunello fields to the Wheatstone offshore platform. The JDP supplies approximately 20% of the Wheatstone Project s foundation capacity of natural gas. The remaining 80% is supplied from the Chevron-operated Wheatstone and Iago fields. s 13% non-operated interest in the Wheatstone Project includes the offshore platform, the pipeline to shore and the onshore plant located near Onslow, in Western Australia s Pilbara region, but excludes the Wheatstone and Iago fields and subsea infrastructure. The onshore plant includes a two-train 8.9 Mtpa LNG development and a 200 TJ per day domestic gas plant. LNG and condensate will be exported, and domestic gas will be transported via pipeline to the Dampier-Bunbury Natural Gas Pipeline. Production commenced from LNG Train 1, with the first LNG cargo delivered to Japan on 12 November The first Wheatstone LNG cargo. Cossack, Wanaea, Lambert and Hermes Vincent Image courtesy of Chevron Australia.

8 employees onsite at Pluto LNG. 13 PROJECTS AND DEVELOPMENTS has developed some of Australia s biggest oil and gas projects. We now have a global portfolio comprising high-quality and near-term production developments and projects.

9 LNG SCARBOROUGH DEVELOPMENT 15 BURRUP HUB Our vision is to develop a Burrup Hub to ensure efficient use of our existing Pluto LNG and North West Shelf Project facilities and the timely and cost-effective development of large undeveloped gas resources such as Scarborough and Browse. Scarborough and Pluto LNG The onshore development concept for Scarborough is a brownfield expansion of the existing Pluto LNG facility. Extensive onshore development studies for Pluto LNG expansion were undertaken in 2010/11, including a complete frontend engineering and design phase for a second LNG train at Pluto. Previous studies combined with s 2017 market engagement on LNG expansion, means that is well placed to assess and estimate the cost of an LNG expansion train for Scarborough. Browse and North West Shelf Project In 2017, the Browse Joint Venture made significant progress in narrowing alternative concepts for the development of the Browse resources and is aligned on Browse to NWS as the reference case. The Browse Joint Venture received a non-binding tolling proposal from the NWS Project to process Browse gas through existing infrastructure. Commercial discussions and joint technical studies are progressing between the two parties. Pluto LNG development Development planning regarding the Pyxis resource continues. Pyxis provides supply diversity to meet plant capacity and offers potential acceleration for any Pluto expansion. We are progressing the supply of gas to the Dampier to Bunbury Natural Gas Pipeline (DBNGP). Subject to all required approvals, a compressor will be installed capable of delivering gas into the DBNGP at rates of TJ/day. It is anticipated that gas will be supplied to customers in Western Australia from the second half of Our acquisition of a share of the Scarborough area assets increases our resource base close to -operated infrastructure. The Scarborough area assets include the Scarborough, Thebe and Jupiter gas fields, which are estimated to contain contingent resource (2C) of 9.2 Tcf of dry gas. The estimate is based on a revised development scenario utilising existing -operated infrastructure on the Burrup Hub. On 14 February 2018, announced it had entered into a binding Sale and Purchase Agreement to acquire ExxonMobil s 50% interest in WA-1-R, which contains the Scarborough gas field. Upon completion of the transaction, which is targeted by end Q1 2018, will have a 75% interest in WA-1-R and a 50% interest in WA-61-R, WA-62-R and WA-63-R.1. Completion of the transaction will increase s net share of the contingent resources (2C) in the Scarborough area assets from 2.8 Tcf of dry gas to 6.4 Tcf of dry gas. By providing greater alignment between s upstream resources and downstream infrastructure and greater control over and certainty of development, this acquisition supports s strategy of unlocking shareholder value. This is expected to create a pathway to development of the material, unallocated Scarborough gas field through a lower-cost brownfield expansion of our high-reliability Pluto LNG facility. Preparations are underway for the first delivery of trucked LNG to customers in Western Australia by construction of a truck-loading facility at Pluto LNG. Primary approvals are progressing for construction, with start-up targeted in the second half of The facility will provide LNG for distribution in the Pilbara region of Western Australia. s Scarborough development concept involves a lower-cost brownfield expansion of the Pluto LNG facility

10 BROWSE DEVELOPMENT Indicative gfpso facilities for the Browse development (schematic not to scale). OTHER DEVELOPMENTS 17 The Brecknock, Calliance and Torosa fields collectively known as the Browse resources are estimated to contain contingent resources (2C) of 4.9 Tcf of dry gas and 143 MMbbl of condensate net share (16 Tcf and 466 MMbbl, 100%). The Browse resources are located in the offshore Browse Basin, approximately 425 km north of Broome in Western Australia. In 2017, the Browse Joint Venture made significant progress in narrowing alternative concepts for the development of the Browse resources and is aligned on Browse to NWS as the reference case. The Browse Joint Venture received a non-binding tolling proposal from the NWS Project to process Browse gas through existing infrastructure. Commercial discussions and joint technical studies are progressing between the two parties. A potential offshore development would be based on predominantly proven technologies and involve two gas FPSO facilities delivering around 10 mtpa of gas to NWS infrastructure by an approximately 900 km pipeline. The Browse Joint Venture is targeting commencement of the concept definition phase in the second half of 2018, enabled by alignment on commercial requirements with the NWS Project. Developing Browse through existing -operated infrastructure has the potential to deliver a globally competitive project to the benefit of titleholders, infrastructure owners, governments and the local community. KITIMAT LNG The Kitimat LNG Project proposes to develop world-class natural gas resources found in shale and tight rock formations in the Liard and Horn River Basins, in north-eastern British Columbia. Gas will be transported by the proposed 480 km Pacific Trail Pipeline to a liquefaction facility at Bish Cove near Kitimat. Kitimat LNG remains one of the most advanced LNG opportunities in Canada. It is well positioned to supply gas to Asian markets given the shorter shipping distances. Production from new and existing wells in 2017 continued to demonstrate the Liard Basin as one of the best unconventional hydrocarbon resources in the world. The joint venture continues to focus efforts on activities to drive down costs across the full value chain, targeting top-decile cost of supply to support a future LNG development. We are engaging governments to establish a clear, stable and competitive fiscal framework. GREATER WESTERN FLANK 2 (GWF-2) PROJECT The GWF-2 Project involves eight production wells tied back to the existing Goodwyn A platform by a 35 km subsea pipeline. Significant progress was made in 2017 and, at the end of the year, the project was 74% complete. The project is on schedule for start-up in the first half of Drilling and completion activities were successfully completed in 2017 at the Lady Nora, Pemberton, Sculptor and Rankin fields and continue at Keast and Dockrell. Excellent overall performance has enabled the project to consolidate from a two-phase well completion campaign to a single campaign, and target a The five year contract, signed in April 2016, is to charter a vessel with a dualfuel LNG diesel technology. The manufacture of subsea production equipment remains on schedule, and offshore construction activities are planned to commence in the firsthalf of Subsea installation and commissioning of infrastructure is expected to commence in the second half of 2018 and will take approximately five months to complete. Sunrise LNG The Greater Sunrise fields were discovered in 1974 and contain contingent resources (2C) of 1.7 Tcf of dry gas and 76 MMbbl of condensate net share (5.1 Tcf and 226 MMbbl, 100%). The fields are located approximately 150 km south-east of Timor-Leste and 450 km north-west of Darwin, Australia. (33.44% and operator) is committed to developing the Greater Sunrise fields. We maintain compliance with our title obligations and continue our social investment activities in Timor-Leste. Port Arthur LNG Located about 140 km east of Houston, Texas, the proposed Port Arthur LNG Project includes two natural gas liquefaction trains with a total export capability of approximately 10 Mtpa. In June 2017, amd Sempra Energy signed a memorandum of understanding (MOU) with the Korea Gas Corporation (KOGAS). The MOU provides a framework for cooperation and joint discussion by the parties regarding key aspects of the Port Arthur LNG Project.

11 OIL SENEGAL GREATER ENFIELD PROJECT 19 THE SNE FIELD OFFERS LINE OF SIGHT TO NEW NEAR-TERM OIL PRODUCTION AND A FOUNDATION FOR CREATING A REGIONAL OIL AND GAS HUB s representatives touring the Stena DrillMAX drill ship in Senegal. acquired a material position in the highly prospective offshore region of Senegal in 2016 as a joint venture participant in the Rufisque Offshore, Sangomar Offshore and Sangomar Deep Offshore (RSSD) exploration blocks, located 100 km south of Dakar in Senegal, West Africa. The RSSD blocks include the SNE discovery which offers near-term oil production from 2022 and a foundation for creating a potential regional oil and gas hub. For early commercialisation and ongoing optimisation of the development plan, a phased development is proposed, focusing first on the less complex lower reservoir units. Subsequent phases will target more complex reservoir units. In 2017, became Development Lead and plans to transition to operator in s expertise in horizontal well and completion design, subsea gathering system design, project execution and production excellence complements the joint venture participants capabilities. At the end of 2017, the SNE Field Development-Phase 1 entered concept definition. The Phase 1 development concept includes a stand-alone FPSO facility with subsea infrastructure. It will be designed to allow subsequent SNE development phases, including options for potential gas export to shore and for future subsea tiebacks from other reservoirs and fields. Phase 1 will include oil production as well as gas and water injection wells. The expected FPSO oil production capacity is approximately 100,000 bbl/day. Gas sales opportunities are being explored to support incremental gas export. is committed to working with our joint venture participants, key stakeholders and the Government of Senegal to achieve the earliest commercialisation of the SNE discovery in Senegal. The Greater Enfield Project is a subsea tieback to the existing Ngujima-Yin FPSO, which is currently producing from the Vincent oil field. The project is estimated to initially produce more than 40,000 bbl/d (100% project). At the end of 2017, the project was 43%complete, and it remains on budget and on schedule for expected first oil in mid The progress of FPSO design and equipment manufacture in 2017 has ensured that the shipyard activities remain on schedule for commencement in Q The first two of 12 subsea Xmas trees were delivered on schedule into Australia, in Q Focus continues on preparations for in-field drilling, subsea installation, and securing relevant regulatory approvals. The Greater Enfield drilling campaign is expected to commence in Q and take two years to complete. The subsea installation will also commence in Q1 2018, starting with pipelay activities.

12 EXPLORATION Drilling rig and support vessel side-by-side during s Myanmar drilling campaign. 21 Exploration is focused on building a portfolio of high-quality prospects and executing high-impact drilling to deliver value.

13 Myanmar Thazin 3D marine seismic survey data. OUR GLOBAL EXPLORATION STRATEGY IS TARGETING GROWTH IN THREE FOCUS AREAS AUSTRALIA AND ASIA PACIFIC, ATLANTIC MARGINS AND SUB-SAHARAN AFRICA 2018 high-impact drilling + + Drill the Ferrand exploration well in Australia to target prospectivity, close to existing discoveries. + + Drill three exploration wells in Myanmar to inform development planning. + + Drill two exploration wells in Gabon (Ivela-1 and Boudji-1) plus wells in Morocco (Rabat Deep 1) and Peru (Boca Satipo East). s exploration activities continue to deliver outcomes to support our strategy and realise our vision of becoming a global leader in upstream oil and gas. Across our permit interest areas we see an opportunity to leverage our core capabilities, particularly in deepwater exploration, technology and project development, to create value for our shareholders. We continue to build prospect inventories in our core focus areas and mature drilling candidates, with plans to drill a number of high-impact wells in 2018 and We are focused on consolidating our positions in areas of high potential, with a view to establishing and growing regional hubs. We remain committed to delivering on our exploration strategy to secure near-term growth opportunities with a clear vision to commerciality.

14 AUSTRALIA AND ASIA-PACIFIC ATLANTIC MARGINS SUB-SAHARAN AFRICA 25 Myanmar has established a strong acreage position in Myanmar with nine blocks. During 2016 and 2017, we were one of the most active and advanced explorers in the region, and planned activities will continue to progress this position. Our gas discoveries have established the credentials of a working hydrocarbon system in the Rakhine Basin, which has immediate follow-up potential. In 2018, we will continue to build upon our exploration successes through a 2018 campaign that includes plans for three wells. Australia We have equity in exploration permits offshore Western Australia in the Carnarvon and Bonaparte Basins, and the Exmouth, Dampier and Beagle sub-basins. We are planning to conduct exploration drilling in offshore Western Australia to build our gas volumes and maximise the value of our existing assets. Bay of Benegal 0 30 kilometres Thalin-1 Khayang Swal-1 Thalin-2 AD-7 AD-8 AD-6! Shwe Platform AD-1 AD-2 Pyi Tharyar-1 Pyi Thit-1 A-4 A-6 Shwe Yee Htun Myanmar-China Gas Pipeiine Myanmar Naypyitaw Yangon The Atlantic Margins provide evidence of working Mesozoic petroleum systems. Our focus in the region is on play diversity and multiple trapping geometries in emerging and frontier basins, which have the potential to deliver material exploration targets with line of sight to commerciality. Currently, holds exploration permits in Senegal, Ireland, Morocco and Peru. Senegal offers the opportunity for to develop a significant regional hub across the value chain. Following a five-well exploration and appraisal campaign in 2017 the joint venture is reviewing potential 2018 drilling opportunities. We are building a strategic position in both unexplored and underexplored plays in emerging, predominately oil-prone basins in sub-saharan Africa, which have proven worldclass petroleum systems with significant potential. In Gabon, has a 40% interest in the Doukou Dak and Luna Muetse blocks, a 21.25% interest in the Diaba Block and recently acquired a 30% nonoperated participating interest in the Likuale Block. The Boudji-1 exploration well in the Likuale Block was completed in Q s farm-in to the Likuale Block in the Gabon Coastal Basin is awaiting final Government approval. Exploration activities are underway in the Luna Muetse Block.! AD-5 A-7 In 2018, we are drilling SEVEN ONE firm wells and Overview of s acreage in Myanmar. Yadana Platform contingent well¹ 1. Exploration and appraisal

15 27 MARKETING, TRADING AND SHIPPING Global LNG demand grew by 11% in 2017 and is expected to grow by more than 5% per annum over the next five years. Our experience and capabilities in marketing, trading and shipping are key to the expansion of our global LNG supply portfolio to meet future demand. Pluto LNG Plant, Western Australia.

16 TAKING OUR ENERGY TO THE WORLD 29 is Australia s largest producer of LNG with more than 25 years experience as an LNG producer and operator. The company is well positioned to meet expected future global energy demand. In addition to LNG, markets crude oil, condensate, LPG and pipeline natural gas. We have been supplying pipeline gas to Western Australian utilities and buyers since s marketing and shipping capabilities have long been central to our role as a leading supplier of energy to the Asia-Pacific region. Our strong relationships with customers in major energy markets have been maintained through a track record of reliable delivery and expertise across contracting, marketing and trading. s integrated business model encompasses offtake management and LNG shipping fleet operations to ensure reliable delivery of LNG and create value through portfolio optimisation. We continue to build a diverse supply portfolio, underpinned by reliable Australian LNG and supplemented by future North American sourced volumes to pursue additional long-term sales arrangements. is seeking to develop new markets by promoting the use of LNG as a low-emissions and cost-effective alternative fuel for heavy transport and remote power generation. The company is also evaluating opportunities to be involved further along the value chain to create additional demand for our gas in the international market. has commenced operations with the first LNG-powered support vessel in the southern hemisphere. The five year contract, signed in April 2016, is to charter a vessel with a dual-fuel LNG diesel technology. This vessel is environmentally responsible reducing greenhouse gas and pollutant emissions and the reliance on imported diesel while providing safe and reliable support to s assets in the Exmouth and Pilbara regions. Our early adoption of this technology means we are well placed to take advantage of growth in Australia s LNG fuel market. has signed an agreement with GE to work together to support the use of LNG as a fuel in Western Australia. The agreement will provide customers with the option of seamless access to reliable LNG fuel supply and gas-fuelled transport and power generation solutions. We re participating in a joint study with shipping and mining companies to assess the commercial feasibility of LNG-fuelled iron ore bulk carriers. As Australia s leading producer of LNG, we re eager to explore the potential for LNG fuel use by bulk carriers on the Green Corridor trade routes between Australia and China. Siem Thiima, the first LNGpowered support vessel in the southern hemisphere. WOODSIDE IS BECOMING A LEADER IN THE SUPPLY OF LNG AS A TRANSPORT FUEL, ESTABLISHING NEW ENERGY MARKETS AND APPLYING NEW TECHNOLOGY

17 OUR APPROACH TO SUSTAINABILITY Working sustainably is a core value embedded at every level of our company. It is fundamental to maintaining our social licence to operate and to being a global leader in upstream oil and gas. We are focused on delivering energy solutions that provide sustainable value for shareholders, partners and the communities in which we operate. SUSTAINABILITY PRINCIPLES Our approach to sustainability is underpinned by our five sustainability principles: Operating with transparency and integrity We have policies and programs that address bribery and corruption, regulatory compliance, human rights risks and transparent payments to governments. Fostering our organisation and culture We focus on having a values-led, high-performance culture where we promote inclusion and diversity and invest in training, education and technical programs. Creating shared value Meaningful stakeholder relationships are key to developing programs that address societal and environmental needs and create shared value. Our social licence to operate is supported through our community social investment programs, supply chain and indigenous engagements. Sustainability performance s corporate scorecard includes metrics reflecting our material sustainability issues. s sustainability performance is also linked to remuneration for employees and executives. We respond to a range of environmental, social and governance specific indices, including the Dow Jones Sustainability Index (DJSI). received a Silver Class distinction from RobecoSAM1 for its DJSI sustainability performance, placing us in the top 3% when ranked against our peers in the oil and gas upstream and integrated sector. United Nations Sustainable Development Goals The United Nations Sustainable Development Goals (SDGs) aim to address some of the world s most pressing economic, environmental and social challenges. While the response to the SDGs are led by national governments, business have a critical role in identifying their impacts and where opportunities exists to meaningfully contribute to the SDGs and their targets. Refer to our Sustainable Development report 2017 for more information on our approach to sustainability and 2017 performance. 31 Operating responsibly We ensure our operations are safe and sustainable by improving our energy efficiency; sustainable consumption and production; oil spill prevention, preparedness and response; and engagement with our communities, in addition to maintaining extensive research partnerships in marine environments. Building a resilient business We provide access to reliable and clean energy, and through the application of technology and innovation we are unlocking new opportunities such as providing the heavy transport sector with a cleaner fuel alternative to diesel. In 2018, received a Silver Class award from RobecoSAM for its Dow Jones Sustainability Index (DJSI) 2017 sustainability performance for a second consecutive year, placing us in the top 3% when ranked against our peers in the oil and gas upstream and integrated sector. This places as one of the top 15% companies globally for our sustainability performance.

18 TECHNOLOGY AND INNOVATION 33 We aim to enhance s competitiveness through innovation and applying technology that enables resource development, reduces unit costs and increases production. In mid-2017, we took delivery of one of NASA s Anthropomorphic Robonauts, which will be on loan to for a five-year deployment in Perth. At present, the Robonaut is testing tasks that have been suggested by our Operations workforce. The Robonaut complements s own robotics program that includes machines capable of conducting tele-operated and semi-autonomous patrols and inspections. The first site trial of our patrol and inspection machines took place in November 2017 at the Pluto LNG facility and further trials will be conducted in has advanced artificial intelligence and data analytics capabilities with the introduction of Willow, our cognitive adviser. Willow digests vast amounts of information using complex algorithms and is designed to interact with staff using natural language. Willow enables our people to unlock the collective intelligence of the organisation both past and present, allowing all employees to access cognitive and advanced analytics applications that are built using a range of data science tools updated with live streaming data from our assets. In December 2017, announced an agreement with ABB Australia Pty Ltd to install a lithium-ion battery energy storage system on the Goodwyn (GWA) platform. The installation of the 1 megawatt hour battery will reduce the need for back-up capacity (known as spinning reserve) in GWA platform s power generation system and is expected to reduce fuel gas consumption by more than 2,000 tonnes per year. This is estimated to decrease the platform s fuel gas emissions by 5% and positions as an early adopter of battery storage technology in oil and gas operations. We completed the installation of WiFi across all Karratha Gas Plant (KGP) trains. We will connect the remainder of the plant to WiFi throughout 2018 to provide site-wide availability. KGP WiFi technology provides a fast and cost-efficient way of acquiring additional data to support operations and business decision making. is collaborating with NASA to explore how the robotic technology could improve safety and efficiency at. s FutureLab is actively building an ecosystem of scientific and technological innovation through collaborations with research institutions, start-ups, entrepreneurs and adjacent leading industries. continues to invest in FutureLab, our collaboration hubs based at Monash and Curtin Universities and the University of Western Australia, that supports the delivery of our Intelligent Enterprise, Plant of the Future and Offshore Transformation work programs. FutureLab aims to nurture and grow a culture of diversity and innovation, harness new commercial opportunities and secure our ambition to be a leading supplier of affordable and sustainable energy. s robotics team successfully conducting site trials at Pluto LNG.

19 HEALTH, SAFETY AND ENVIRONMENT Highlights + + TRIR score of 1.29, a 21% improvement on Awarded the 2017 APPEA Environment and Health and Safety awards. + + No Tier 1 or 2 process safety events. + + Delivered 61 kt CO₂e savings of the 389 kt CO₂e 2020 target in Activities + + Execute planned energy efficiency and greenhouse gas improvement projects. + + Refresh our Golden Safety Rules, improving industry alignment and enabling global application. + + Monitor the effectiveness of the Process Safety Management framework across the value chain to manage risk. + + Build on our data analytics capability to learn from incidents and prevent reoccurrence, and continue to use industry partnerships to share incident lessons. We focus on health and safety because we believe that everyone has a right to go home in the same condition as they started the day. Our aim is to continuously improve year on year towards our goal of industryleading health and safety performance. To achieve this goal, we expect all our employees and contractors to demonstrate unwavering commitment to their own health and safety, and that of others. This is supported by s Our Safety Culture framework, which identifies the behavioural expectations required at all levels of the organisation to build and sustain an effective safety culture. The oil and gas industry works with flammable hydrocarbons at high pressure. s Process Safety Management framework ensures that all our assets and business functions have a standardised approach to managing process safety that is globally applicable. A healthy and productive workforce remains an important factor in s continuing success as we aspire to lead the way with effective, informative and enjoyable health and wellbeing initiatives. We see our health and safety performance as essential to our business success and growth, and we are making solid progress towards delivering on our goal of industry-leading health and safety performance. Bicycles are a common mode of transport for our people at Karratha Gas Plant.

20 37 s future success depends on our continued capacity to demonstrate strong environmental performance across our global portfolio. As we enter new regions around the world, brings with it decades of experience as a successful operator in sensitive marine environments. Wherever we operate, we know that our long-term success depends on our ability to understand the environment and mitigate any potential impacts of our activities. We continue to manage environment risk and make decisions based on robust science delivered in part through our partnerships with researchers and stakeholders. We remain focused on environmental excellence wherever we operate, supported by visible leadership in environmental management. Environmental collaboration and transparency are key to our future success. We have been working with some of the world s leading environmental organisations to better understand the global environments where we have interests. We continue our collaboration with our partners such as BirdLife, Fauna and Flora International (FFI), Wildlife Conservation Society (WCS), Australian Institute of Marine Science (AIMS) and the Western Australian Museum. was awarded the APPEA Environment Excellence Award in 2015, 2016 and believes that natural gas will continue to play an important role in the long-term energy mix, reducing emissions by replacing coal and integrating with renewables to address intermittent power generation. In 2017, released its Climate Change Policy supporting its defined climate change approach in these ways: + + Ensuring the resilience of our portfolio. + + Improving the carbon performance of our facilities and developments. + + Communicating the future role of gas. continues to invest in and promote technologies that reduce emissions and promote energy efficiency in our current and future facilities. We are evolving to meet the challenges of a low carbon economy by offering our products in a way that meets the world s requirements for reliable and sustainable energy, including partnering with renewables and developing new markets. Murujuga, also known as the Burrup Peninsula. SOUND RESEARCH AND TRANSPARENCY ARE KEY ELEMENTS OF WOODSIDE S APPROACH TO THE ENVIRONMENT

21 BUILDING STRONGER COMMUNITIES A$ 17.9 * MILLION contributed to our communities in A$6.5 million leveraged from other funders. * Includes cash value, in-kind and voluntary hours ( share). This is the measure of any additional resources contributed to a community organisation or activity that come from sources other than. For example; s joint venture participants, government and employees. 39 Delivering a STEM education class to a primary school. REAL CONVERSATIONS GENUINE RELATIONSHIPS STRONGER COMMUNITIES We build and maintain genuine longterm relationships and implement programs that create capacity and capability in local communities. Over the past five years, we have contributed more than A$70 million in support of our host communities. We believe there is shared value for our business and our communities by co-creating opportunities in education, employment and enterprise. To do this, we take the time to improve our knowledge of what is needed, to understand the environments we work in, to minimise our impacts and to maximise the opportunities to work with and support both community and government. This approach helps to build resilience in our host communities so they can take advantage of the opportunities we create. We understand that providing funding is just one way to support our communities. By building shared value with community, government and industry, and through our pioneering employee volunteering and participation programs, we are helping to build stronger communities. Collaborating with communities We have been part of the Australian community for more than 60 years and have a particularly strong relationship with Western Australia s Pilbara region, home to the -operated NWS Project and Pluto LNG. places great value on working with Indigenous communities to build and share knowledge on heritage and cultural values in the places where we are active. In 2017, implemented our extended Reconciliation Action Plan (RAP) which includes a targeted outcomes framework. This outcome focused approach ensures that our activities are planned to have a lasting impact on communities. The Development Fund Launched In 2014, the Development Fund is a commitment of A$20 million over ten years to support programs and organisations that focus on early childhood development. Helping children develop and grow to achieve their potential is a key way we contribute towards positive long-term improvements for communities in Australia and around the world. Helping young people reach their full potential provides an improved return to both individuals and community in education, health, employment, economic and social outcomes. The Fund strives to build alliances that bring together resources and expertise from early childhood non-profits, researchers, analysts, businesses, academic institutions, philanthropy and government, to drive social change. Pioneering corporate volunteering Over ten years ago we became one of the first companies in Australia to formally introduce paid volunteering leave. We are recognised as a pioneer of corporate volunteering in Australia and a strong advocate for the volunteering movement, its benefits in the workplace and to the community. Supporting innovation and technology proudly supports innovation and technology programs to make positive contributions to the social and scientific challenges facing the Australian and international community. A key focus is our collaborative relationships with schools, universities and industry to educate and empower students in the areas of science, technology, engineering and mathematics (STEM). I congratulate in the development of an outcomes based approach which measures the impact of reconciliation based activities. is forging new territory with this approach and is creating a step change for RAPs in Australia - Reconciliation Australia, National governing body of the RAP program 49,400EMPLOYEE HOURS contributed through corporate volunteering since 2010, with a value of approximately A$8.6 million in time. More than ORGANISATIONS 150COMMUNITY supported in % INCREASE IN contract awards to Indigenous business.

22 BUSINESS DIRECTORY Registered Office Perth Petroleum Ltd 240 St Georges Terrace Perth WA 6000 AUSTRALIA T: Postal address: GPO Box D188 Perth WA 6840 AUSTRALIA Dakar 1st Floor SIA Building Route de Ngor Les Almadies, Dakar SENEGAL T: Dili Palm Business and Trade Centre Block E01-06 Sur kmas, Fatumeta BairroPite Dili TIMOR-LESTE London 3rd Floor, Pollen House Cork Street London W1S 3NP UNITED KINGDOM T: Seoul 11F Kwanghwamun Building 211, Sejong-daero, Jongno-gu Seoul Republic of KOREA 41 BECOMING A GLOBAL LEADER IN UPSTREAM OIL AND GAS Beijing 32/F, Full Tower, 3206 No. 9 East Third Ring Road Chaoyang District Beijing CHINA T: F: Broome Unit 28 Shiba Lane Broome WA 6725 AUSTRALIA T: Postal address: PO Box 2751 Broome WA 6725 AUSTRALIA Calgary Suite th Avenue SW Calgary Alberta T2P 4K9 CANADA T: Postal address: PO Box Bankers Hall Calgary Alberta T2P 4J6 CANADA T: Dublin Hamiliton House 28 Fitzwilliam Place Dublin 2 IRELAND Houston Sage Plaza 5151 San Felipe, Suite 980 Houston TX USA T: F: Karratha The Quarter HQ Level 3, 24 Sharpe Avenue Karratha WA 6714 AUSTRALIA T: Postal address: PO Box 517 Karratha WA 6714 AUSTRALIA T: F: Singapore 12 Marina View Asia Square Tower 2 #18-03 Singapore SINGAPORE T: Tokyo Imperial Tower 1-1 Uchisaiwaicho 1-Chome Chiyoda-ku Tokyo JAPAN T: F: Yangon Level 6, Vantage Tower 623 Pyay Road Kamaryut Township Yangon MYANMAR (BURMA) T: F:

23 Head Office Energy Ltd Plaza 240 St Georges Terrace Perth WA 6000 Australia Postal Address GPO Box D188 Perth WA 6840 Australia T F E companyinfo@woodside.com.au Follow Us woodside.com.au April 2018