Well, good morning, everyone, and welcome to Woodside's 2024 annual general meeting. I'm Richard Goyder, Woodside's Chair, and on behalf of our company, I'd like to thank everyone for attending, whether in person or online, today. We sincerely appreciate your interest in our business. If you're here in the room, please familiarize yourself with the evacuation procedures, which are now on screen, which would apply in the event of an emergency. I'm informed that we have a quorum present and formally declare the meeting open.
Today is a historic day for Woodside. It's our 70th AGM and almost the 30th since we moved our company headquarters to Perth in 1996. Our history here is proud. It's very short when compared to the many thousands of years the Wadjuk people of the Noongar Nation have lived here and cared for this country. I'd like to thank them for this enduring contribution.
I pay my respects to their elders, past, present, and emerging. I also recognize the many traditional custodians of the areas where Woodside operates. In particular, the Ngarda- Ngarli people as the collective custodians of the Murujuga, where we've worked for more than 40 years. Australia remains on a journey towards reconciliation, and at Woodside, our support for this goal is unwavering.
Today's event is a valuable opportunity for our board and company leadership to hear directly from our shareholders. I ask you to keep your questions brief, avoid repeating issues that have already been covered.
Could you please ask no more than two questions at a time to give as many shareholders as possible an opportunity to be heard? I remind shareholders that questions must relate to the item of business under consideration, and as in previous years, no speeches, please.
There'll be an opportunity for questions during the formal business, so if you're a shareholder online, please start submitting any questions now. You can do this using the same platform you're watching the webcast on. There are instructions on the slide, and I'll run through them now. To submit a question, you need to tap the messaging tab.
Type your question in the chat box at the top of the screen and hit send. Confirmation your message has been received will then appear. Shareholders who wish to ask questions from the floo r will need to register their questions at the question registration desk at the back of the meeting room. You'll then be called to ask your question at the microphone stand at the back of the room at the appropriate time. This year, we have two microphone stands for shareholders to use to ask questions.
This makes it easier for shareholders participating online as well as me and Meg to see you and hear your question. If you've not already registered a question you wish to ask, please go to the question registration desk now and give your name and a brief description of your question. You may return to the question registration desk at any time during the meeting to register further questions.
If you have any mobility issues, please raise your hand for assistance with your question registration. Staff will then bring you a microphone for you to ask your question from your seat at the appropriate time. The process for submitting audio questions is on the right-hand side of the slide.
To do so, you must click on the request to speak button at the bottom of the broadcast window, enter the requested details, click submit request, and follow the audio prompts to connect. You will continue to hear the meeting while you wait to ask your question. I'm joined on stage this morning by our Chief Executive Officer and Managing Director Meg O'Neill and Company Secretary Warren Bailey.
Also here in Perth with us are directors Larry Archibald, Ashok Belani, Arnaud Breuillac, Frank Cooper, Swee Chen Goh, Angela Minas, Ian Macfarlane, and Ben Wyatt.
In January, Frank Cooper and Gene Tilbrook announced they would be retiring as directors of Woodside. Gene stepped down from his position in February, and Frank will do so at the end of today's meeting, at which time Ben Wyatt will take over as the chair of Woodside's Audit and Risk Committee.
I'd like to thank Frank and Gene for their exceptional service to the board and the contributions they've made to Woodside's success. Thank you, Frank. I'd also like to warmly welcome Ashok Belani to the board following his appointment in January. Ashok brings extensive experience in new energy, technology, and petroleum sector decarbonization. He will stand for election as a non-executive director at today's meeting. Nick Henry and Anthony Hodge, representing our auditors, PricewaterhouseCoopers, are also present today.
Our executive leadership team, along with the board, will be available after the meeting to catch up with shareholders attending in person over light refreshments. Voting today will be conducted by poll. Each shareholder present, in person or by proxy, has one vote for every ordinary share owned. Lisa Ahwan from the company's share registry, Computershare, has agreed to act as returning officer for the poll.
I'll open the poll now for voting on all items of business so that shareholders who aren't able to stay for the full meeting can still cast their votes on all items of business. For shareholders attending in person, we're using an electronic keypad instead of paper poll cards. This means we'll be able to share the provisional voting results with you towards the end of the meeting. Instructions for using the handsets and submitting your votes on each item are now on the screen.
Please take a moment to familiarize yourself with these. At the time of registration, shareholders who are eligible to vote would have been given a white plastic smart card and a handset. Proxy holders would also have been given a handset and a summary of their voting instructions.
Following the discussion on items of business, I'll prompt those shareholders who are physically present today to vote on those items, and at that time, your handset will activate and voting instructions will appear on your screen. If you require assistance now or during the voting, please simply raise your hand, and someone from the Computershare team will assist you.
For shareholders requiring assistance online, please follow the instructions on the online platform to access assistance on voting. Voting will remain open during the discussion of the items of business.
I'll let you know when the poll is about to close. Shortly after the close of the poll, the provisional poll results will appear on the screen behind me. The final results of the poll will be announced after meeting to the Australian Securities Exchange and will also be available on Woodside's website.
I'm holding open proxies in my capacity as chair of the meeting, and I will vote all available proxies in favor of each resolution. Please remember, we report our results in US dollars, and any reference to dollars this morning will be in US currency unless stated otherwise. During today's meeting, we may also make forward-looking statements about our business and operations. Investors are cautioned not to place undue reliance on any forward-looking statements.
Please refer to the cautionary statement and disclaimer wording included in our ASX announcement released earlier today and our annual report and other filings with the ASX, LSE, and SEC. As the opening video highlighted, Woodside is marking several milestones this year. Our company was founded in a small Victorian town of Woodside in 1954, and we're celebrating our 70th birthday.
We're also marking 40 years of providing energy to local homes and businesses in Western Australia from the North West Shelf. It is 35 years since our first LNG ship departed for Tokyo Bay, marking the birth of the LNG industry in Australia. Reflecting on this long history of achievement, I feel privileged to be chair of this great Australian company and tremendously proud of the value we continue to return to our shareholders and, indeed, all our stakeholders: our employees, suppliers, and the communities in which we operate.
B efore I reflect on our performance in 2023, I'd like to state very clearly that we are committed to conducting our business sustainably. This means responding to climate change, and it means ensuring everyone who works at Woodside goes home safely.
Sadly, our safety performance, including the tragic death of a colleague at the North Rankin Complex, meant we did not achieve this in 2023. Please be assured that we are steadfast in our commitment to learning from this incident. There is nothing more important to us in 2024 than improving safety. Looking at our broader performance, 2023 further established Woodside as a global energy supplier.
We delivered record production from our expanded portfolio and achieved excellent LNG reliability. Amid normalized oil and gas prices coming off 2022's record highs, we recorded an annual net profit after tax of $1.7 billion and an underlying net profit after tax of $3.3 billion. Based on this, the board determined a fully franked final dividend of $0.60 per share, resulting in total full-year dividend of $1.40 per share fully franked.
That's AUD 4.1 billion going to our shareholders, either directly or through superannuation funds and the like. We are committed to returning value to our shareholders as well as the communities we operate in. In 2023, Woodside paid a record AUD 5 billion to the Australian government in tax and royalties payments. We're delivering these strong returns while also laying the foundations for future growth. Meg will give you more detailed updates on our major growth projects, which are progressing well.
We expect first oil from Sangomar in mid-2024, and Scarborough is targeting its first LNG cargo in 2026. We also took a final investment decision in June last year to develop the large, high-quality Trion resource in Mexico. We are aiming to reduce our net equity Scope 1 and 2 greenhouse gas emissions by 15% by 2025 and 30% by 2030.
This is compared to our 2016 to 2020 gross emissions with certain adjustments, and we're on track to meet these goals. We also launched our Climate Transition Action Plan and announced a new complementary Scope 3 Emissions abatement target. For the board and executive leadership at Woodside, we view our response to climate change not only as a responsibility but a great opportunity.
Our strategy is to thrive through the energy transition for the benefit of our shareholders, our employees, our communities, and the environment. I'd like to thank our shareholders for investing and placing trust in Woodside. In particular, may I thank those of you who've engaged with us on our climate plans. I believe that all plans and ideas are improved when they are subject to scrutiny and constructive feedback, and this has been the case for Woodside over the past 12 months.
In 2023, I held 43 meetings on climate change with investors, and our investor relations team held 70. And since the beginning of this year, I've held another 40 meetings. We'll continue to engage our shareholders on this important topic and take action accordingly. I also recognize that directors of public companies are under increasing investor, media, and stakeholder scrutiny for the responsibilities they discharge on behalf of shareholders.
This has certainly been my experience in recent times, but I can assure you that I've never been more energized and excited to be served as chair of Woodside.
The complexities of chairing an energy company as the world strives to decarbonize are many, but I firmly believe that Woodside's track record during my time as chair delivering strong operational and financial performance laying the foundations for future growth while continuing to return value to shareholders speaks to the quality of our management's current leadership and strategy.
On this note, I'd like to thank the board, the Woodside team, and particularly our Chief Executive Officer, Meg O'Neill, for their work this year. Meg is inclusive, capable, and highly intelligent. She is the right leader to seize the opportunities the energy transition brings and work through its challenges. In closing, I'd like to share a reflection about this being Woodside's 70th AGM. What would our first chair, Percival McKenzie, make of the company Woodside is today?
I can't imagine that in 1954 he could ever have conceived we would have thousands of employees, working officers, and operations around the world or how great our contribution to supplying energy to households and businesses at home and abroad would be.
But I believe he would be proud that we've maintained the enterprising Australian spirit of innovation and determination that saw Woodside established all those years ago. It is a legacy we intend to build on for many decades to come. I'll now hand over to Meg. Thank you very much.
Well, thank you, Richard. Thank you to everyone attending in person and online. It is a great privilege to lead Woodside during this transformative period for our company, and I am proud to report that we continue to invest and create value on your behalf while delivering reliable energy to homes and businesses here in Australia and overseas.
However, when I look back on 2023, I will always think of our colleague who lost his life while working at our North Rankin Complex. His death continues to affect many of us, and I, again, offer my deepest condolences to his family and friends. Safety is our number one priority at Woodside, and we must improve. We have commissioned an external review of our safety systems, and this will guide our efforts to improve safety performance. Our strategy is to thrive through the energy transition.
The heart of this strategy recognizes that the world must respond to the challenge of climate change by changing our energy system, and we intend to be part of the solution. Our strategy is underpinned by three priorities: providing energy the world needs today and into the future, creating and returning value, and conducting our business sustainably. We are delivering on all three.
As Richard highlighted, in 2023, we achieved record full-year production of more than 187 million barrels of oil equivalent. This record demonstrates a clear benefit of our merger with BHP's petroleum business, with production now more than double pre-merger levels. Our outstanding result of 98% LNG reliability for our operated LNG plants at Pluto and North West Shelf contributed to this overall record production and was achieved while successfully delivering planned turnarounds.
Operating revenue for 2023 was $14 billion, leading to an annual reported net profit after tax of $1.7 billion and an underlying net profit after tax of $3.3 billion. With a full-year dividend of $0.140 per share, we returned more than $2.6 billion to shareholders, which was 80% of our underlying net profit after tax. I am tremendously proud that we have delivered value of this magnitude amid inflationary pressures and lower oil and gas prices compared to 2022.
We remain on track to meet our target of reducing our net equity Scope 1 and 2 emissions by 15% below our starting base by 2025. In 2023, we reduced our net equity emissions to 12.5% below our starting base. We achieved this by designing and operating out emissions and using carbon credits as offsets. We aspire to achieve net-zero equity Scope 1 and 2 emissions by 2050 or sooner.
To underpin that, we have now completed asset decarbonization planning, identifying potential pathways to achieving this goal with a clear emphasis on design-out and operate-out solutions. A great example of this work is the modifications we have made at Pluto LNG to receive power from the proposed Woodside Solar project. In 2021, we set a Scope 3 investment target aiming to invest $5 billion in new energy products and lower carbon services by 2030.
At the end of 2023, we had cumulatively spent more than $335 million towards this target, meaning expenditure was up 135% compared to the year before. In February of this year, we announced a new complementary Scope 3 target to track the potential impact of new energy products and lower carbon services in helping our customers reduce or avoid emissions.
The new emissions abatement target is to take final investment decisions on new energy opportunities by 2030 with a total abatement capacity of 5 million tons per annum of CO2 equivalent. In 2023, we bedded down our transition to a larger, more global energy company following the merger with BHP's petroleum business. We are now working as one team across multiple locations with additional operating assets in the Gulf of Mexico and Trinidad and Tobago.
We have a range of new energy opportunities in the United States complementing our portfolio in Asia Pacific. We are also making good progress on our key growth projects, Sangomar, Scarborough, and Trion. Sangomar, offshore Senegal, was 96% complete at the end of the first quarter, with 19 of 23 wells drilled and completed.
The floating production, storage, and offloading facility has safely arrived in the waters off Senegal, and we are targeting first oil by the middle of this year. By the end of the first quarter, our Scarborough Energy Project was more than 62% complete and is on track for first LNG in 2026. A Scarborough milestone was marked during the quarter with the arrival on site of the first modules for Pluto Train 2.
At the end of the quarter, 13 of these modules were in place. If you visit Karratha, which I do often, you'll see that site works at Pluto Train 2 are well progressed. Key environmental plans were approved or key environmental approvals were accepted in late 2023, and following this, our seismic program was successfully completed. Offshore works, including trunk line installation and drilling of the wells, have also commenced.
Now, these milestones could not have been achieved without meaningful engagement and support from First Nations groups, which has been occurring since 2018. Another key achievement in 2023 was our sale and purchase agreement with LNG Japan for the sale of a 10% equity interest in the Scarborough joint venture. I'm pleased to report the transaction is now complete.
In February this year, we also signed a sale and purchase agreement with JERA for a 15.1% equity interest in the Scarborough joint venture. The LNG Japan and JERA deals are strong evidence of market confidence in Scarborough. In addition, we're in discussions with both companies for the sale of additional LNG. The equity agreements and the LNG supply discussions underline the long-term value our co-venturers see in this asset, as well as LNG's place in a decarbonizing world.
Now, our third major project is Trion in the Gulf of Mexico. We took a final investment decision on Trion last year, and the project is targeting first oil in 2028. Engineering, procurement, and contracting activities for Trion are progressing, including the award of the subsea marine installation contract. In 2023, we took further steps to increase our capacity to supply LNG to our customers in line with forecast ongoing global LNG demand during the energy transition.
We signed an offtake deal with Mexico Pacific, subject to that company taking a final investment decision on the proposed third train at the Saguaro Energia LNG project. This strengthens our position as a portfolio player, supplying our own LNG as well as third-party volumes to our customers. Now, in our new energy portfolio, we took a final investment decision on the hydrogen refueler at H2 Perth.
The refueler is a hydrogen production, storage, and refueling station. This project is targeting supply of hydrogen to Western Australian domestic trucking customers starting in 2025. The project is modest in scale, but it is intended to stimulate demand and demonstrate capability. Progress is also being made on our H2OK hydrogen project in Oklahoma, as well as the proposed Woodside Solar project near Karratha.
We continue to advance several carbon capture and storage opportunities, including the proposed Angel CCS opportunity. Angel's foundation project could abate up to 5 million tons per annum of CO2 equivalent.
Now, as Woodside's global presence increases, our sustainability performance becomes ever more important. Last year, we updated our sustainability strategy, further embedding sustainability performance into everything we do. We are committed to supporting community development and investments that are important to our host communities.
Last year, we invested $33.3 million globally in strategic partnerships, philanthropic programs, employee volunteering, and mandatory contributions. We strive to maintain real and meaningful relationships in the communities where we live and work and make them better places to live. At Woodside, we are proud of the role our LNG is playing in supporting decarbonization and economic growth in Asia. When used to generate electricity, gas typically produces half the lifecycle emissions of coal.
LNG is one of Australia's most important commodity exports to key trading partners in the region. We are also immensely proud of the contribution we have made to providing safe and reliable energy to homes and businesses here in Western Australia since the first North Rankin gas arrived onshore in 1984. Last year, Woodside's WA assets produced 76 petajoules of domestic gas, representing about 19% of the state's domestic gas supply.
As part of our ongoing and steadfast commitment to WA, earlier this month, we began marketing extra gas to the local market. In total, we will make roughly 32 petajoules of additional gas available to the WA market by the end of next year. Moving to the east coast of Australia, 100% of our gas, which comes from the Bass Strait project, goes to the domestic market. I'm pleased to report that over east, we have initiated an expression of interest for 50 petajoules of gas across 2025 and 2026.
We aim to keep building on our record of reliable domestic gas supply as we work to deliver the projects needed for ongoing energy security and economic prosperity through the energy transition. Before I close, I want to speak plainly about climate change. There are many views on how our industry should address this urgent challenge.
Recently, we've seen some of our global peers walk back from climate goals they now realize were too ambitious amid the uncertainty of the energy transition. At Woodside, we are determined to play our role in addressing climate change, but we won't make promises that we can't deliver. I give you our commitment that we will set goals and make decisions informed by the available science, in line with our capital allocation framework, and with our commitment to energy security front of mind.
We will also keep listening and responding to you, our investors and shareholders, as we continue to develop our strategy to thrive through the energy transition. I would like to thank all of our shareholders for the trust you continue to place in Woodside. May I echo Richard's thanks to Gene Tilbrook and Frank Cooper for their wise counsel and wonderful service to the Woodside board.
I'd also like to thank the Woodside team. Our people are skilled, diverse, and values-driven, and they are working hard day in, day out to deliver our strategy. I'm extremely proud to be leading this team in this our 70th year as a company. Safe, reliable, and affordable energy transforms people's lives. We must keep this front of mind as we work to contribute to a stable energy transition. Thank you.
Well, thank you, Meg. We now move to the formal business of the meeting. There are six items on the agenda today. Item one is a discussion of the 2023 financial statements and reports. Item two is my reelection as a director as I'm retiring by rotation and the election of one new director. Item three is the consideration of the company's 2023 remuneration report. Item four is the grant of equity incentive scheme awards to the CEO and Managing Director. Item five is relating to leave and living entitlements.
Item six is the Climate Transition Action Plan and 2023 progress report. General questions and comments about the accounts and the management of the company will be addressed during item one, along with any questions to the auditor. Climate-related questions will be addressed during item six.
Questions on each of the other agenda items will be addressed when we reach those items later in the meeting. We received a number of questions from shareholders prior to the meeting, some of which have already been covered in Meg's and my addresses. As this is a shareholders' meeting, only shareholders, their attorneys, proxies, and authorized company representatives are entitled to speak and vote at this meeting.
Please direct all questions to me as chair. As I mentioned earlier today, today is an important opportunity for the board to hear a range of Woodside shareholders and to ask Meg and me questions on the issues of interest to you. As a courtesy to other shareholders, please refrain from making speeches. If you do ask a question, please keep it brief and avoid repeating issues that have already been covered.
I remind shareholders to please ask no more than two questions at a time to give as many shareholders as we can an opportunity to be heard. When I invite questions later in the meeting on each item, I propose to spend time on questions from the floor, from shareholders, from proxies who are in attendance, written questions submitted through the online platform, and audio questions submitted online.
A reminder to shareholders who wish to ask questions from the floor of the meeting to register your question at the registration desk. You'll be called by our staff positioned by the microphone at the appropriate time. You'll need to show them your handset. Please give them your name, and they'll introduce you to the meeting. I outlined the arrangements for submitting written and audio questions online earlier, and they are again shown on the screen as a reminder.
Questions submitted online may be grouped together if there are multiple questions on the same topic. Repetitive questions, whether from shareholders and proxies physically present or those from attending online, will not be asked so that we can maximize the range of topics discussed here today.
I move to item one, which is the financial statements and reports. The first item of business on the agenda is to receive and consider the company's financial report and the reports of the directors and the auditor for the year ended 31 December 2023. Although voting is not required on this item, shareholders have the opportunity to raise questions relating to the management of the company and to comment on the reports.
Nick Henry and Anthony Hodge from PwC, Woodside's auditor, can answer questions relating to the conduct of the audit, the company's accounting policies, the preparation and content of the auditor's report, or the independence of the auditors. We'll now address any questions or comments on the 2023 financial report and reports of the directors and the auditor, including general questions on the management of Woodside. Can I start with any questions received from shareholders prior to the meeting? Please, operator.
Mr. Chair, we have a question from Vinka Bellini on The Voice, which has four parts. A) Whose decision was it for Woodside to make a $2 million donation to the failed yYes campaign? B) Was legal advice obtained before that decision was made? If yes, what was the advice and who gave it? If not, why not? C)
Since over 60% of Australian voters opposed The Voice and voted no, did the board, before the donation of $2 million was made, consider whether the donation was in the interest of and likely to be approved by the shareholders? If not, why not? If it did not consider that question, what was the board's view and the grounds for it? D) Were any of the board members or their family supporters of the Yes campaign?
If yes, did those board members declare a conflict of interest and abstain from taking part in the decision?
So the volume was a bit low on the first part of that question. I think I got it. Everyone in the room got it. I think it's okay now. Thank you. So can I thank Vinka Bellini for the question? We acknowledge the outcome of the referendum on an Indigenous voice to Parliament. Yes, we did commit money to the Yes campaign because Woodside has long been a supporter of the Indigenous groups we work with, and we've been a supporter of reconciliation and the Uluru Statement from the Heart.
And we've made no secret of that over the years. And we conduct a lot of work with our Indigenous colleagues and communities to ensure that we work closely with them. So I don't think anyone should be surprised that Woodside supported the campaign. I'm not going to get into legal advice and the like.
And certainly, there were no directors in any position of conflict. And as I say, we acknowledge the outcome. We didn't tell people how they should vote, but we wanted people to be informed of the issues. And the people of Australia obviously made their decision. Thank you. Operator, if there's no more previous questions that were submitted earlier, have we got questions from the floor?
Mr. Chair, this is Mr. Phil Patterson. Mr. Phil Patterson is a shareholder.
Thank you, Mr. Chair. My question, actually, relates to the domestic gas reservation policy, which people may be aware allows for 15% allocation for domestic use. My question is, at this stage, because I know there's a long timeline, do you know how much of the 15% pro rata to date has actually been allocated to the local domestic market? My very brief comment is, obviously, the gas comes from WA.
The state owns the gas. And for the sort of reputation of Woodside, it's really important that we do not run out of gas before the at any stage during the coming years. Thank you.
Thanks, Mr. Patterson, for the question. Meg addressed a bit of that in her speech, and I'll get her to address that now, including what we've recently announced, which will be supplying more gas into the domestic market. Meg, can you answer Mr. Patterson's question, please?
Sure. Thank you, Mr. Patterson. So it's probably worth reminding the audience that the domestic gas policy has evolved over time. So our first production was back in 1984. Actually, the state was very forward-thinking in the development of a gas pipeline from Dampier to Bunbury to enable domestic industry to evolve in the state that could use natural gas as an energy feedstock.
We take our responsibility to support the domestic market extremely seriously. And over the course of our production life at all of our assets, we have supplied domestic gas volumes equivalent to more than one-third of our exported LNG volumes. Now, there's variability at each of our assets.
We, as I said in my speech as well, have leaned into the opportunity, recognizing that the near-term domestic gas market has some pressures to make additional gas available to these important industrial customers as well as households here in the state. Thank you for your question.
Next question from the floor, please.
Mr. Chair, this is Mr. John Goodacre. Mr. Goodacre is a shareholder.
Jack Oudega, shareholder. Petroleum Resource Rent Tax and decom. In the last four years, reported RRT, Woodside, including BHP, paid about AUD 2.3 billion in RRT. With decom taking off in WA and Victoria, how much do you expect to get back as cash credits, given that RRT, as I understand it, should be fundable by the government up to the amount paid for RRT or 40% of the closing down expenditure, whichever is lesser?
Thanks, Mr. Goyder. The technical question there, which again I'll ask Meg might give a bit of background for shareholders on the PRRT, and then I'm not sure if you're able to answer that question specifically or not.
Yeah. We probably don't have the number in front of me here, but I think you've raised a very important point. So the petroleum resource rent tax is basically a tax designed to increase the amount of money from oil and gas operations that goes to the Commonwealth government once we have paid for the investment we have made. Woodside is the biggest payer of PRRT in Australia following the merger with BHP's petroleum business.
And we recognize, again, that oil and gas is a resource that belongs to the nation, and the PRRT is a method of ensuring that once we get paid back for our investment, additional funds go to the government. Decommissioning is another part of the business that we take extremely seriously.
For those of you who follow us closely, in our investor briefing day last year, we gave a forecast for our upcoming decommissioning spend. Last year, we spent close to $500 million, largely in Western Australia as well as Bass Strait, again dealing with some of these aged facilities. Our forecast for this year is approaching $1 billion, and next year we'll drop back down to around $400 million.
So this is a very important part of our business. When we finish producing an asset and the reservoir is depleted, it is extremely important that we return the landscape to the condition in which we found it. And this is work that we are progressing at pace.
Thanks, Mr. Goodega. And we might our CFO, Graham Tiver, is here today, and it might be worth you catching up with Graham in terms of how the mechanics will work of the question you asked. So please, I'll ensure that Graham seeks you out if you're still around at the end of the meeting. Thank you. Next question from the floor, please.
Mr. Chair, this is Mr. Jeff Reed. Mr. Reed is a proxy for the Australian Shareholders Association.
Good morning, Mr. Chairman, and thank you for taking my question. There's a bit of feedback on this microphone over here, Mr. Chairman, and if you could ask your people to sort it later in the meeting, that would be great. Mr. Chairman, I'm representing the Australian Shareholders Association, and 1,000 of our members have given me 2.2 million shares to vote on their behalf today.
That would just about get them into the top 20 shareholders if it was one shareholding. My question is in two parts, Mr. Chairman. Would you like them both at once or separately?
Do them together. Thanks, Mr. Reed.
Thank you, Mr. Chairman. Woodside has many hydrogen opportunities around the world. I can think we've mentioned Oklahoma. We've got one in New Zealand. We've got one in Tasmania. We've got the refueler project in Kwinana. The Kwinana refueler is very small, as the CEO has said.
My question, Mr. Chairman, is, can you envisage enough demand at viable prices to bring these opportunities through the FID process and bring hydrogen to market in the short, medium term? Second question. The final dividend was paid to shareholders a little over 2 weeks ago. This makes Woodside one of the slowest dividend payers listed on the ASX. Please, can you advance the dividend payment date to something closer to mid-March? Thank you, Chairman.
Thanks. Thanks, Mr. Reed. No doubt you'll have very popular support on your second question. You and I have discussed that before. Again, I'll take that up with our CFO. There are mechanics obviously involved, and particularly for Woodside, where we just declare dividends in US currency and the like. We will see what we can do on that front for you. On the hydrogen, the question of hydrogen is actually a very important question because there's a lot of hype around hydrogen.
It's obviously a very important source of energy as we look forward. Woodside is spending a lot of time and money looking at opportunities on hydrogen, but there needs to be a reality to it as well. I'll get Meg to answer your question around demand, the market, and where we are with our projects. Thank you very much.
Thanks, Mr. Reed. Let me just start by acknowledging we really value all of the retail shareholders who hold Woodside directly. I know many Australian households hold us through their superannuation funds, but we really value the people who hold our stock directly. Thank you for representing that constituency in our register.
On hydrogen, you've asked a very insightful question, and it really is the crux of the challenge that we're grappling with on our hydrogen opportunities. We know that as the world works towards net-zero 2050, we are going to have to change the energy mix away from the traditional sources that have underpinned tremendous economic growth for the last 100 years. Hydrogen is a potential solution to some of those challenges. Renewables, of course, have a role to play.
But when we look at our skill set and we look at the scale of the challenge, we genuinely see opportunity in hydrogen. The challenge that we are all grappling with around the world is how fast can we make that transition happen? And how do you bridge the cost gap? The challenge as the world tries to deliver economic growth is that the cost of energy is a very important input parameter.
So we are working on a number of fronts. We're working on steps to try to lower the cost of our project so that we can offer hydrogen at a lower price. We have focused our efforts, and you have seen this, Mr. Reed, on the refueler here, which, albeit a small project, will allow us to build a domestic demand center. Our Oklahoma project is similarly oriented towards the domestic market in the United States.
We do have confidence that an export market will develop. But again, it's going to take significant investment, not just from ourselves as a supplier, but also from our customers in places like Japan, Korea, Singapore, the utilities that are going to receive this product. And there are some technical challenges to work through, particularly on the transportation side. Now, all of that is a way of saying that we do expect the demand growth will start to really kick off in the 2030s.
And we see an opportunity now for the rest of this decade to make sure that we're investing in some of these smaller-scale projects, getting ourselves the experience, building the capability set, and securing the foundational elements for those bigger projects, the customer commitments, the environmental approvals, the technical work to enable this to be a more material part of our business, particularly in the 2030s.
Thank you very much.
Thanks, Mr. Reed.
Next question, please.
Mr. Chair, this is Mr. Peter Miller. Mr. Peter Miller is a shareholder.
Thank you.
Excuse me. Thank you, Chairman. It was great to see a little bit of promotional material earlier on. Why is it that Woodside and the gas industry don't engage in an advertising campaign, much like the banking industry did a few years ago, about the educational benefits of gas as a transition energy source, considering the future energy and oh, sorry, computing and artificial intelligence requirements it's going to have on the energy grid, rather than allow environmental groups using proxy votes on post-access to the media to promote their own ideologies?
Thanks, Mr. Miller. It's a question that, as a company, we've been thinking about. Again, I'll get Meg to talk about it. We need to be careful in everything we do and say. I think Woodside is one of the more scrutinized companies in this country at the moment.
But we certainly want to educate people on the role of gas in the energy transition, how important it is not just for homes but the businesses as well, and actually how important it is for the world to decarbonize when you look at energy production in countries like China and India, where the majority of energy production is still coal-fired and gas is probably half the lifetime emissions of coal. And in fact, you can see it in Australia. Meg might talk about that now. So in terms of the various states' energy mix.
So Meg, can you specifically ask the question on advertising, but also you might just talk about that broader education piece? Thank you.
Yeah. Well, thanks for the question, Mr. Miller. One of the roles that I fill, in addition to my role as Woodside CEO, is I'm the chair of Australian Energy Producers, which is the industry association for the oil and gas industry. That organization does actually have quite an extensive campaign underway, targeting Western Australia perhaps a little bit less because many Western Australians have a good understanding of the role of gas in keeping our industry running, keeping the lights on, and partnering with renewables.
But the crux of the messaging for that industry association campaign is around two key thematics. One is the role of gas in partnering with renewables, and I'll speak to that in a moment. The second is the role of gas as a feedstock to other products.
I think that's something that's often misunderstood or overlooked, is that many products that are manufactured here in Australia can only be manufactured with gas as a feedstock. That includes things like bricks and glass. It includes chemicals such as plastics. The plastics that make your household recycling bin come from gas as a feedstock, and importantly, fertilizer. So one of the big domestic gas contracts that we will start supplying when Scarborough starts production is to a fertilizer manufacturer.
This is a company that is investing in a brand new fertilizer project here in Australia because they have access to gas from Woodside. Now, the energy mix is a fascinating question, and I fully concur with your recommendation that we need to highlight this. If you look in Australia, we've got a great case study.
So South Australia has an energy mix that is 70% renewables, 30% gas, and it's the lowest emissions-intensity energy grid in the east coast of Australia. By contrast, if you go to Victoria, New South Wales, or Queensland, they are still heavily dependent on coal-fired power stations. Their emissions intensity - and this is CO2 emissions per unit of power output - is 2-3 times the magnitude of South Australia. So the story is very clear, but I appreciate your support for us getting out there a bit more in the market to tell our story.
Thank you. Microphone one again.
Mr. Chair, this is Mr. Alex Hillman. Mr. Alex Hillman is a shareholder and has two questions.
Good morning, Richard, Meg, and Warren. I've got a question, firstly, on Woodside's company strategy. So when presenting the climate plan to our investors, our CEO, Meg, said that our business strategy is a climate strategy. Our climate strategy doesn't seem to have a lot of support, though, with media suggesting it will likely fail to win majority support today. As well as Australia's three main proxy advisors, ACSI, ISS, and Glass Lewis, major institutional investors have publicly said they don't support our climate strategy.
These include Australia's largest superannuation fund, Australian Super, Australia's third-largest superannuation fund, Aware, America's second-largest public pension fund, CalSTRS, the UK's largest asset manager, LGIM, Norway's largest private pension fund, KLP, Florida's largest pension fund, Florida State Board of Administration. So Richard, as the chair of this company, do you finally accept that you need to fundamentally change Woodside's business strategy?
Did you have a second question, Mr. Hillman?
It'll depend on how I think. Start with that one, if you may.
No, if you can ask both at the same time, please.
Okay. To call a spade a spade, our company has an underwhelming track record delivering projects. Our last greenfield project, Pluto, was 80% over budget and 2 years late. Our next project, due to start in Senegal, the Sangomar project, is now 20% over budget and 1 year behind schedule. Although we tried to sell down our stake in Sangomar, we actually ended up increasing it from 35% to 82% as other partners pulled out.
Analysts are now saying that Sangomar may have a negative NPV depending on the renegotiation with the Senegalese government. What has made you change your mind to think that developing more projects like Browse, Sunrise, or Calypso will be higher value than returning capital from these projects to shareholders as dividends or buybacks?
So thank you for both questions. Meg's talked a bit about the projects. I'll get her to answer that in a minute. On the first one on strategy, where we say our climate strategy is our strategy, Meg and I both talked about Woodside thriving through the energy transition. Part of that is ensuring that, as she just said in the answer to the previous question to Mr. Reed around hydrogen, ensuring we've got the capabilities and the business knowledge and opportunities to be supplying new energy to markets.
The reality right now is that there is significant demand for our products for a significant period ahead. We stress-test every investment decision we make on the normal things you would expect us to stress-test them: pricing, capital, capital overruns, pricing movements, timeframe overruns, and also through a shorter timeframe of operating long-life assets.
We're confident in the investments we've made that they will make significant returns to shareholders in the years ahead. Our climate strategy is incredibly important to the future of Woodside. We'll engage with all our stakeholders, particularly the large shareholders. Many of those groups you referred to are not significant shareholders in Woodside. They are very, very small shareholders in Woodside. We will engage with the serious shareholders in Woodside on where we go. It's important to note.
So, did you say?
Sorry. Don't interrupt me, please.
Not serious shareholders.
I said they're not the significant shareholders, we will engage with them. But the really important thing is they are shareholders in Woodside. So they've made a decision. And in some cases, they are continuing to buy shares in Woodside based on the strategy of this organization. So yes, we will engage, and we will refine our strategy. We would love to be investing more money in new energy right now if we only had the customers, and customers were prepared to make the trade-offs, particularly.
Potential, and many of our customers have significant costs in moving from their current operations to new sources of energy, and we will be part of that journey with them. But we cannot and won't be turning on a dime on this, and nor should you or anyone expect us to do that. Meg, do you want to talk about the projects?
So I did the question.
I'm just going to ask Meg to go to item two, and then I'm going to take the next question from the next shareholder. Thank you.
Sure. So from a project execution perspective, one of the things that we have been conscious of for a period of time at Woodside is that we need to give our shareholders confidence in project delivery. Reflecting on the Pluto experience, we spent quite a bit of time rebuilding our project execution organization and developing that capability.
And if you look at the projects we have delivered in the interim period: Greater Enfield development, Greater Western Flank phase II, Greater Western Flank phase III, Pluto expansion, all of these projects have been delivered on time and ahead of budget. If we look at the new part of our business, the BHP petroleum business, the Shenzi North project, the Ruby project, also project execution was first-rate.
So we appreciate that the industry's track record has been a bit mixed in this space, but we have invested time and resources to build the right capability. So Sangomar, look, Sangomar is a disappointment. It's a project that we sanctioned in early 2020. We started construction work in the middle of COVID, and unfortunately, there were some disruptions and some challenges associated with execution that we were not able to navigate our way through as the world grappled with a global pandemic and rolling lockdowns in many of our fabrication locations.
But we are very pleased to be approaching that first oil milestone for this development. And as I said, the subsequent projects, the Scarborough Energy project and Trion, both remain on track and consistent with the budget that we've put out to the markets.
Richard, back to the first question. It was, do you accept the needs that you need to change Woodside's business strategy? Could you please answer that?
I'd say that Woodside's business strategy is dynamic, just as the whole transition is. We will be adjusting what we do in the years ahead according to our best capabilities to, as I said, thrive through that energy transition.
Thank you.
Thank you. Microphone two.
Mr. Chair, this is Miss Anna Chapman. Miss Chapman is a proxy for Miss George Johnson. Miss Chapman has two questions.
There are increasing concerns about human rights implications of fossil fuel expansion globally. The recent landmark ruling by the European Court of Human Rights found that insufficient action to tackle climate change is a violation of human rights. How can Woodside continue to pursue LNG expansion when such projects are increasingly seen as incompatible with the right to a healthy environment? Furthermore, do you see the risk of human rights-related court cases as a financial risk to shareholders?
The second question?
That was the two questions.
Oh, okay. Thank you. Thanks, Miss Chapman. I think, importantly, a just transition is incredibly important in terms of the energy transition. Meg, do you want to deal with both those?
Sure. I mean, the first starting point is there's still 1.3 million people in the world who have no access to reliable energy, who rely on things like animal dung and wood to cook their food, who have nothing other than basic fire for which their children can try to do homework in the evenings. I think we need to have a holistic view of the human rights associated with the energy transition and with provision of energy. I think we here in the West take for granted the fact that we have reliable and affordable energy.
We hit a switch, and the lights come on. Our kids can study in the evening. We have refrigeration to keep our food cool. We have running water that's powered by energy.
And so as we think about just transition, one of the things that we think is extremely important is to make sure that the world is taking steps to help lift people out of poverty, to help provide people with the energy they need, to have really the basics of life: food, shelter, clean air to breathe.
The financial risk?
Financial risk. Look, in the climate report - and I'm assuming you've read our Climate Transition Action Plan - we detail a number of risks associated with climate change, and I'd point you to the reports for further information.
Thanks, Meg. Next question, please.
Mr. Chair, this is Mr. Stephen Bennett. Mr. Bennett is a proxy. He has two questions.
Good morning. So I'm a co-founder of Friends of Australian R ock Art, and I'm also a cultural heritage consultant. I've been working in WA and NT on cultural heritage matters for 30 years. And my question relates to the large amounts of acid gas emitted from the Karratha Gas Plant and Pluto project. And I've got two questions.
So my first question relates to an incorrect and misleading statement on the Woodside website, which states there is no peer-reviewed scientific evidence which identifies impacts on Burrup rock art from industrial emissions associated with LNG production. That's incorrect, and you know that it's incorrect because we've sent you these six refereed scientific articles many times.
And we've also got, in the recent Western Australian government report released in December last year, we've got a map showing high acidity levels all over the entirety of the Burrup Peninsula.
And just a final thing, to substantiate this factually incorrect claim, the Woodside webpage also, incredibly, cites data from the long-discredited CSIRO monitoring program, which was disbanded in 2017 after being shown to be scientifically flawed. And so my first question is, will Woodside delete these statements from its website so that investors and members of the public are no longer misled by statements which are false and/or based on discredited scientific data? Question one. Okay. Shall I move on to question two or?
Yes, please.
Okay. So as you'd be aware, there's been a bit of an upheaval in the Aboriginal Heritage Regulation sphere in WA over the last year or so. But what's happened is that in November 2023, the old Aboriginal Heritage Act was reintroduced with a couple of amendments. And there is a specific amendment here.
My question is about which was introduced, which is to kind of deal with the problem of Juukan Gorge, where there was new information available about Juukan Gorge, but it wasn't taken into account. So reading from the Western Australian government website, "When a Section 18 consent has been granted by the minister, the landowner is required to notify the minister of any new information about an Aboriginal site.
An important reform to help prevent another Juukan Gorge tragedy." Now, given that Woodside is already aware of the scientific evidence I just referred to on potential impacts to sites covered by its, I think, 2012 previous Section 18 approvals for the Pluto and North West Shelf projects, my question is, has Woodside complied with the requirements of Section 18 paragraph 6 by advising the minister of this new information yet?
Thanks, Mr. Bennett. Meg, do you want to deal with both of those?
Yeah. Mr. Bennett appreciates your questions. Thank you for attending today. Let me start by saying that as one of the most scrutinized companies in Australia, the contents of our website are thoroughly vetted, and we.
But you've got an incorrect statement there, Miss Bennett.
We do not have incorrect statements.
Section 18 correct.
We do not have incorrect statements. So our website is carefully vetted to ensure that we do have accuracy in what we communicate to the market.
This is correct. I just showed you. You've seen this information, Miss O'Neill, and you've still got that incorrect statement.
Can you please just let Meg answer the question, and please cease interrupting. You've asked your question. We'll answer it, and then we'll move to the next questioner. Thank you.
So we've been participating, as I'm sure you well know, in rock art monitoring studies for many years in conjunction with the traditional custodians, the Murujuga Aboriginal Corporation. And over time, they have taken an increasingly important leading role in the studies that we conduct. We are a participant in the most recent ongoing rock art monitoring program.
Of course, Murujuga Aboriginal Corporation and the Department of Water and Environmental Regulation is fully involved in and is the creator of this information. We review that, and we adapt our activities accordingly. But again, in the absence of scientific certainty on the level of emissions, which theoretically may impact rock art, we believe we are taking reasonable and practical measures across our operations to minimise emissions and minimise the impact.
Thanks, Meg. Can I have the next question, please? Can I have the next question from the next shareholder, please?
Mr. Chair, this is Mr. Shun Chang. Mr. Chang is a shareholder, and he has two questions.
Good morning, Mr. Chairman. As tomorrow is ANZAC Day, I'd like to acknowledge the 61,678 ANZACs that died in World War I, the 39,657 veterans that died in World War II, the 340 veterans that died in the Korean War, and the 523 veterans that died in the Vietnam War, lest we forget. I have a different view to some of the previous speakers.
I like oil and gas. I like the carbon dioxide that it produces, the world's greatest airborne plant food. Without plants, we won't be here because it produces oxygen. There is a virus infecting many of these proxy advisers. It's a global virus from Legal & General in London all the way to Sydney and Melbourne. It's called virus ID10T. For those at the back that are not anti-texterous, ID10T.
My question, in terms of what you mine, you do a lot of oil and gas, which is a great thing. It provides heat. I'm able to cook. It solves poverty. It solves starvation, and so on. But all these proxy advisers, instead of praising you, they're condemning you, and they're investing in things like electronic vehicles. Every electronic vehicle has a battery. This is the most toxic battery that humans have invented.
Every battery will be around here by 2050 in landfill. Do you, as a company—question one—mine cobalt? Cobalt is mainly mined by child labor in the Republic of Congo. Instead, I think what you have is a lot of high-paid professionals working for you, and you do not engage in the activity of slave labor. That's question number one. Question number two, people talking about renewables.
Can you confirm that the only thing keeping renewables the only thing renewable about renewables is the subsidies? In fact, wind turbines run only on subsidies. Thank you, Mr. Chairman.
Thanks, Mr. Chang. I can confirm, firstly, that we don't mine cobalt. We don't mine anything, even though we may be accused of, from time to time, mining things that we don't. I was going to say something else. Put it up there. Anyway, on renewables, I'll get Meg to respond to that. I was going to say sorry on your question about cobalt mining, though.
You will see on the Woodside website our modern slavery statement, which is a very comprehensive statement on how we deal with the issues that are arising from modern slavery across our business, both directly and indirectly. Meg, do you want to comment on renewables?
Sure. So as we think about the world's energy mix, it's clear that we have a world that depends on reliable, affordable, and safe energy to keep economies humming, to keep lights on, to keep people flying around the world, to keep commerce going. But we do recognize that the impact of increased use of fossil energy - coal, oil, gas to a certain degree - is having an effect on the climate.
And so the world needs to find ways to invest in lower-carbon forms of energy. Now, there's a variety of lower-carbon forms of energy: nuclear, solar, wind, hydro. There are parts of the world that invest very heavily in those forms of energy. Australia is a place that has fantastic solar and wind potential. We think that's an increasingly important part of the mix.
I think we showed some data, and it's in our Climate Transition Action Plan, again citing the statistics that I cited for East Coast Australia that shows the impact of renewables in reducing emissions intensity in places like South Australia. So we do recognize that renewables have a role to play. Renewables will be an important part of our hydrogen projects to make sure that we have the low-carbon energy and the low-carbon electrons feeding our electrolyzers.
So look, we support renewables. It's not something that we invest in directly at this point in time, but it is going to be part of solving the world's complex challenges of reliable, affordable, and lower-carbon energy.
Thanks, Meg. Next question, please.
Mr. Chair, this is Mr. Stuart Bass. Mr. Bass is a shareholder.
Hi there. I'd just like to say keep up the good work. Based on most of Woodside's operating revenue and profits based in the Australian national arena and with aging assets oh, yeah. And with a significant amount of the assets becoming of age and diminishing production, I wonder if you could talk to some of the large growth projects that may exist for the national scene that you have within your strategy, or whether you may be considering pivoting to the overseas offshore market.
Thanks, Mr. Bass. And appreciate the comments to Meg. Can I leave that one with you again?
Yeah. Thanks, Mr. Bass. And appreciate your shareholding and your interest. You're spot on that much of our revenue today comes from mature assets. We're very proud that this year we celebrate 40 years of gas production from North West Shelf. That's a project that, in many ways, was a marquee project demonstrating Australia's technical capability as the first LNG project in this nation.
But that asset, as you note, is mature. We are investing in other opportunities, and Scarborough is perhaps the best example of that, where we're investing in a very significant offshore gas field. We're going to bring that gas ashore to our Pluto facility, build LNG processing equipment at Pluto, build a very significant domestic gas plant, as I said, to help support a new fertilizer project. So we do see a pathway that has a very strong future cash flow stream from the Scarborough Energy Project.
We do have other opportunities here in Australia, and probably the most noteworthy is the Browse field. The Browse fields were discovered probably close to 50 years ago at this point in time. We have been working for several years on a concept that would see the Browse gas be transported to the Karratha Gas Plant and utilized the North West Shelf infrastructure for production into LNG and domestic gas.
That's a project that's got some complexities. We've been working to secure environmental approvals for that project for several years now, working on some of the commercial arrangements. That is an opportunity that we see to be able to continue our journey here as a very significant energy producer in Australia. It's worth also commenting that a lot of our new energy opportunities are Australian-based. As I said to Mr.
Chang previously, with the renewables' potential here, as we think about low-carbon energy opportunities, we do see a great opportunity to replicate what we've done with LNG, which is shipping energy at large scale to customers in Asia to do that in this new energy space with hydrogen or a hydrogen derivative. So we're pretty optimistic about those opportunities.
Thanks, Meg. Next question, please.
Mr. Chairman, this is Miss Carolyn Francis. Miss Francis is a shareholder.
Thank you. Miss Carolyn, or actually medical doctor, medical scientists tell us that for every 1,000 tons of carbon emissions, one human being will die as a result of climate change. Woodside's Burrup Hub project will release over 6 billion tons of carbon emissions over its 50-year lifetime.
This means that the Burrup Hub project will kill over 6 million people. A recent Harvard Law Review states that individual oil and gas companies can and should be held accountable for the loss of life and health that they cause, and that such prosecutions are highly likely to succeed. How does Woodside plan to handle the risk of legal prosecution for homicide?
I reject almost everything you just said. And so I'm not sure it's actually worth responding other than can you talk about the 6 billion tons?
Yeah. I think we need to actually strongly reject the numbers that you've cited. So there's a fair amount of misinformation around the emissions associated with our business. The emissions for the Scarborough development and this is full life cycle, so Scope 1 and 2, which is the emissions that Woodside creates, as well as Scope 3, which is the emissions created from our customers using our product.
The emissions from Scarborough development are 878 million tons, and this includes future phases of Scarborough. So those are the emissions that represent projects we have taken an affirmative final investment decision on. And as Richard said, reject the thesis of the rest of your question.
Thank you. Next question, please. Next shareholder, please.
Mr. Chair, this is Mr. Rick Sneddon. Mr. Rick Sneddon is a shareholder.
Mr. Sneddon.
Thank you, Richard, for the opportunity for asking a question. In relation to shareholder funds, I think this is one of the most important questions we've got. How is it that Woodside continues to support the Fremantle Dockers, and you should really switch to the West Coast Eagles? Thank you.
Thanks, Mr. Sneddon. Can I disclose that I absent myself from any conversations in terms of that because of obvious conflicts as chair of the AFL? I think your question is more prescient after the weekend than it might have been before the weekend. I'll get Meg to respond.
Well, thanks, Richard. And for what it's worth, Mr. Sneddon, our board does have some staunch Eagles supporters amongst their numbers, as does my executive team. But more holistically, one of the things that Woodside thinks is important is to be an active member of growing, vibrant communities wherever it is that we live and work. And sports is an incredibly important avenue to building a vibrant community.
And there's no sport that's more strongly where views are more strongly held in Western Australia than AFL, as I think your question demonstrates. So we're very proud to have renewed our sponsorship with the Fremantle Dockers. We've been one of their two co-lead sponsors for something like 15 years. And it's a partnership that goes both ways. We value the opportunity to invest with them and work with them on some of their youth programs. They truly value diversity.
We sponsor the men's and women's programs alike because, again, we have a belief that footy and sport is a way to make a community a better place.
Thanks, Meg. Next question, please.
Mr. Chair, this is Miss Maureen Phillips. Miss Phillips is a proxy for Blair Fraser.
Hello, Mr. Chair. I am also a medical doctor. Among the many triggers of asthma, one exposure of significance is nitrogen dioxide released when cooking or heating with domestic gas. Researchers in Australia - and I quote the National Asthma Council - consider 12% of childhood asthma is attributable to cooking with gas stoves. This is a safety concern. How does Woodside plan to manage the associated liability? Thank you.
Thank you. Thanks, Miss Phillips. Meg?
Oh, Miss Phillips, look, I appreciate your concern for health and safety. Obviously, health and safety is something that is extraordinarily important to Woodside, starting with our employees and contractors and then extending to the community and the users of our product. Most of our product in Western Australia actually is used in industrial settings. With respect to household safety, there are a number of state agencies that regulate that and ensure that appliances used in households are safe. I would be directing my question to the states.
Thanks, Meg. Next question, please.
Mr. Chair, this is Miss Jess Beckerling. Miss Beckerling is a proxy holder.
Good morning. Thank you, Mr. Chair. I have two questions. First of all, is Woodside in discussions with any parties regarding onshore gas developments in the Kimberley to supply its North West Shelf processing facility in the future? And will Woodside rule out contracting for gas supply to the North West Shelf facility from onshore development or fracking in the Kimberley? That's my first question. Would you like me to go straight to the second?
Yeah, that'd be great. Thank you.
Following up from Mr. Bennett's question but on a different detail, although Woodside claims on its website that there is no significant evidence that its emissions are having any effect on the globally significant Murujuga rock art, a 2020 scientific report by Dr. D. Fox, commissioned but currently withheld by Woodside, and cited by rock art scientist Dr. Ian MacLeod in a 2020 paper, found that there is unequivocal evidence that the changes in rock art colour contrast are affected by the changes in the mean and minimum pH observed on the rock art sites at the referent positions.
Will Woodside release the 2020 Fox report so that scientific experts, Woodside investors, and the general public are fully informed about the obvious impact of industrial emissions on the globally significant Burrup rock art? Thank you.
Thanks, Miss Beckerling. Meg, can you deal with both of those?
Sure. So thanks, Miss Beckerling. With respect to processing gas, so the Karratha gas plant, as was noted by a previous questioner, the fields that feed that plant are declining, so there is ullage in the plant. We have signed agreements between the North West Shelf and Pluto and the North West Shelf and Waitsia to process gas from those respective joint ventures. But North West Shelf and the Karratha gas plant is open, and we're having discussions with a variety of parties.
At this point in time, we're not having any with North West Shelf because there's no way for them to physically get the gas there. But we would welcome the opportunity to have a discussion with them to help enable and unlock their gas development opportunities. With respect to the rock art question, look, I think we answered that with the previous questioner.
We've been an active participant in rock art studies for many years. We are a participant in the process that is now in the rock art coalition group that is now managed by the WA Department of Water and Environmental Regulation, which has a broad coalition of parties to ensure that we are all working off the same dataset when it comes to understanding rock art.
Thanks, Meg. Come in to the next question, please. Come in to the next question, please.
Mr. Chairman, we have Mr. Liam Lilly. Mr. Lilly is a proxy holder, and he has two questions.
Thank you, Mate. First question is for the auditor. There is increasing regulatory scrutiny in Australia of restoration or decommissioning liability data and the financial reporting of these liabilities. What steps have you taken to ensure confidence that your assessment of Woodside's restoration obligations and the processes used to develop the reported provisions are robust enough to withstand increasing regulatory scrutiny?
The second question?
Second question. The growth incentive in the CEO's long-term incentive plan provides a powerful motive for Woodside to press ahead with capital allocation regardless of changes in markets, policies, or technological pathways. Could you explain to the shareholders how you have come to the view that setting incentives in this way is consistent with your fiduciary obligations to look after the long-term future of the company?
So I think the second question's probably better handled than the remuneration report, but let me deal with it to a degree now in terms of the way the CEO's incentive arrangements have been set up. And the CEO's remuneration arrangements consist of fixed annual remuneration and then incentives linked to the performance of the business. And a component of that is based on the total shareholder return of Woodside over a long period of time, which does equate, to a degree, to the long-life assets we've got.
We think it's a well-structured arrangement for the CEO, and it includes things like the performance includes things like safety, environmental performance, operational performance, our underlying cash generation performance, and keeping our operations costs under control. So the board feels that the remuneration arrangements we have for the CEO are appropriate and are appropriate for the short, medium, and long term.
On the first question, in terms of rehab provisions, I might just get Nick or Anthony to respond very quickly, if you can, as to how you assure yourselves, as auditors, that we are meeting our as per the annual report, meeting our obligations. So can we get a microphone to one of them? Where's Nick or Anthony? Are they there? There you go. Thank you.
Thank you for the question. So in the context of the audit, we audit the financial statements as a whole. Restoration is an important estimate. I refer you to note D5 in the financial statements where management have outlined the way in which that estimate is considered. We review the methodology that's applied by management, the significant assumptions, and the data, which is utilized in preparing the rehabilitation estimates. As you'll note, in our audit report, we've issued an unqualified opinion on the financial statements.
Thanks very much. Next question, please.
We have Mr. Paul Fanning. Mr. Paul Fanning is a shareholder.
Sorry, the microphone's not working. Hang on. Can we get that microphone for Mr. Fanning working, please? Oh, try that now.
I think that is better.
That's better? Yep.
I'm Paul Fanning, shareholder of Melbourne. I missed the two addresses, so I might have to if I recap, well, my apologies. But look, I've been a long-term shareholder from the days of BHP, and then I've benefited from the merger of the petroleum assets into Woodside, and I've been able to reap the benefits, along with many other shareholders in this room. My question's probably directed through the chair to Meg.
One is the apparent sale of the Macedon and Pyrenees assets. What did really happen? Why was it withdrawn from sale? Were the metrics not good enough, or was the sale process not as prosperous as possible? And of course, this was recently.
Looking at the quarterly production report, when we look at revenue in USD, US dollars, for oil and gas revenues received in the quarter, PCP to 12 months ago, the revenues are down quite considerably. I think it's something like 35%. Now, the financial and business press painted the picture, Meg, that you may not have been unduly concerned or fazed by that.
But from a shareholder end, be it small or large, I think we probably need to perhaps evaluate that. Yes, I know there's a lot of exchange rate issues, and the price of oil and gas fluctuates up and down. So can you please give us some color on both of my questions, please?
Thanks, Mr. Fanning. It's actually nice to have some questions on the business. Thank you very much. I'll get Meg to answer both questions. On what I would say from a board point of view on any potential investment or divestment, the board is very disciplined around the way we assess those decisions.
There's a capital allocation framework that I think most shareholders or many shareholders understand around new investments, and we apply that as well to where we may be looking at other entities and the like. Similarly, if we are to dispose of an asset, it needs to be done in a way which is incrementally positive to the Woodside shareholders and done for the good reasons.
The reason we didn't progress decisions, and we've made a number of decisions in recent months not to progress things, is because we didn't feel it was in the interest of the company and particularly shareholders to proceed with those, in this case, divestments. But Meg, if you want to add anything to that, please do. Then just can you talk about the revenues around the quarterly production?
Yeah. Well, thanks, Mr. Fanning, and welcome to Woodside. Very pleased to have some Heritage BHP shareholders who have joined us and stayed with us. So thank you for your shareholding. On Macedon and Pyrenees, it's a bit straightforward. So following the merger, we had a number of companies come to us and say they were interested in buying those assets from us.
And it was enough interest to say, "Look, we'll run a process and see if we can get more value than we see ourselves." One of the things that we are very mindful of, back to a previous question on decommissioning, is making sure that if we're going to do a transaction, that the party we do the transaction with really has the capability to safely operate the asset and to decommission at the end of the day.
At the end of the day, we ran a process. The valuation didn't stack up. We feel like we can get more value for our shareholders by operating these assets ourselves. So that underpins the cancellation of the sale process. On the quarterly production report, there's a couple of factors underpinning the revenue drop.
One is a bit of a decline in production. So we had some scheduled and a little bit of unscheduled downtime in the first quarter that we didn't see this time of year last year. The bigger mover, though, was the commodity prices. And that's one of the factors of oil and gas and a commodity business, is the price of the product we produce will go up and down with time.
The thing we're very much focused on is ensuring that we operate our assets cost-efficiently every day, that we focus on the margin of the business. If you look back at our investor briefing day, for example, you'd see that our margin's been at or above 80% for the better part of the last five years. So that's what we focus on. Unfortunately, we can't control the price that the market pays for our product. What we can control is making sure we safely, reliably, and cost-efficiently operate every day.
Thanks, Mr. Fanning.
Thank you.
Next question, please.
Mr. Chairman, we have Mr. Kok Fai Chang. Mr. Chang is a shareholder.
Mr. Chairman, I'm Kok Fai Chang, a long-time shareholder. Most of us this morning come to this meeting, have made big effort to come, either transport or mobility and all this. We are very most of us are very old. My wife and I came early, half an hour before the scheduled time, but we end up 10 minutes late for the meeting.
Mr. Chairman, security is important here, I admit, but they made a big fuss out of it. All I know is they should check through all the bags as long as there's no weapons, including pocket knife and so on. But the security people outside there make sure and insist on the size of the bag, the size of the bag. You can look around on the way out later on. Some of the ladies carry big bags twice as big as my little shoulder bag.
And yet, I was denied to bring the bag in and had to walk all the way to the cloakroom to deposit it, to deposit it. You can see, Mr. Chairman, we are all, if you like, you walk to the back of the room and look forward and see how many of these people have gray hair, bald like yourself, and old. And you are not there yet. You are not there yet. We are in the 70s, 80s because we are long-time shareholders.
Thanks, Mr. Chang.
Security is important. I haven't finished yet, Mr. Chairman, because it's important. All you need is security people there to check weapons, including the pocket knife and so on. That's it. Why bother my bag? Now I pick up some magazine. I have nowhere to put it.
Thanks.
What's the use?
Thanks.
Check hands. We are old.
Mr. Chang, firstly, thank you for coming today. Can I also say thank you for your support? I agree with a lot of what you just said. It's incredibly important for retail shareholders to be able to come to an AGM and to be able to come and feel safe and secure. Last year, we had people endeavor to come into the room with smoke bombs, which, if they had been able to let off, would have created a very unsafe environment for people in the crowd.
We do want our shareholders here. We don't want security to be overburdened, but we want people in the room to be safe. Again, thank you. I'll take on board your comments. Thanks, Mr. Chang. One of our team will help you get your bag after the meeting.
Yes.
Next question, please. Thanks for the personal reflections on gray hair and the like.
Mr. Chairman, we have Miss Kelly Bowden-Howells. Miss Howells is a proxy holder.
Thank you, Mr. Chair. My question relates to the RPS Group hydrocarbon spill assessment. I'm an oceanography expert from the Oceans Institute at UWA, and I have a few concerns about the methodology and the decisions that the business has been making based off these results.
So some of the examples of the flawed methodology include very coarse grid cells being used, which don't accurately represent the small-scale processes operating in its Scott Reef, the fact that the results have actually been annualized, which don't reflect the very drastically varying metocean conditions over the different seasons.
Additionally, the fact that the tidal modelling has been verified against the UTide toolbox rather than actual measured results. So my question is, are you aware of this methodology and what this actually means for the accuracy of the results reflecting the Scott Reef environment?
Additionally, do you feel like it's important to accurately reflect the environment at Scott Reef before pushing forward with the Browse Basin and expansion? And are you planning on redoing these modeling results or at least allowing for some kind of independent peer review?
Thanks very much, Miss Bowden-Howells. Meg?
Yeah. Well, thanks, Miss Bowden-Howells. We have a team of environmental scientists at Woodside who work on precisely the kinds of matters that you've raised. Let me say we would really love to have young talent such as yourself join that team to ensure that we really are evolving our scientific capability.
I would say that we've partnered with the Australian Institute of Marine Science for 25+ years to ensure that we've got access to the best scientific minds in the oceanography space to underpin the work that we do around Scott Reef, to understand the habitat and understand the most effective ways to model this.
As data improves, as computing capability grows, we are keen to continue to improve our modeling efforts. If you're referencing submissions that have already been made, we've made those submissions based on the processes that you've noted.
But perhaps we can get you connected with the environmental science folks at Woodside to have a more technical discussion following the meeting.
Thanks very much. Next question, please.
Mr. Chair, we have an online question from Crantara Super. They ask, "Given the loss on oil price hedging, why does Woodside hedge given its inability to correctly forecast oil prices over many years?
So can I thank the shareholder for the question? It's a very good question. And we don't hedge to try and base it on us trying to forecast and make a speculative gain. We will hedge to protect our balance sheet. And we've done that in recent years, particularly as we've got periods of high capital expenditure in front of us.
And it gives us some protection for downside commodity risk with that high capital expenditure coming forward. And we'll also hedge currency where that's appropriate, where we're buying product in a different currency to what we might be receiving revenue on. Meg, anything else you want to add on that? No? Okay. Thank you. Next question, please.
Mr. Chair, this is an online question from Vishad Sharma. "Browse has reached a negative FID once before and had multiple FEED studies completed. There have been recent media reports that the Browse-to-North West Shelf concept is being shelved as well as the downsizing of the project team. How much has the company spent on pre-FEED and FEED to date?
So I think Meg's touched on Browse. But Meg, can I get you just to give us sort of a holistic answer on that one?
Yeah. It's a great question, and you're spot on that we have been working hard on Browse for many years. There have been a couple of proposed Browse development plans that went through FEED and were very mature and ended up not progressing. The concept that we have now to take Browse gas to North West Shelf, I think, is the right concept. We have an existing LNG facility. We've got oil and gas in that facility.
The gas composition is a good fit for that facility. So I think we have the right concept at this point in time. But we do need to make sure that we progress the opportunity in a manner that doesn't have us getting engineering ahead of some of the critical items such as environmental approvals. So I don't know that we've put a number out in the past on how much we've spent in previous years.
But I would reinforce that we're being very disciplined about how we approach the project this time around to ensure that we've got confidence that when we move into FEED, we will have an investable opportunity.
Thanks, Meg. Thanks for the question. Next question.
Mr. Chair, we have an online question from Mr. Lawrence Frederick White. "To stop Woodside's strategy being sidetracked into unprofitable byways by green shareholders with token shareholdings, will the board consider a share consolidation, the opposite of a split, take place to increase a single share significantly, for example, to $20,000?
Thanks, Mr. White. I hadn't thought of that one. I think, actually, we're more, it's an interesting suggestion. I think we'll operate in the best interests of the company and hopefully a share that's worth whatever it is today or it's nearer that number in 20, 30, or 40 years' time without any consolidations. But thank you for the question. Next question, please.
Mr. Chair, we have an online question from Mrs. Diana Margaret Maine. "Why are we continuing to donate six-figure sums to the major political parties since Richard Goyder joined the board? We've contributed more than AUD 1 million to the Labor, Liberal, and National parties, although the annual figure was down last year. This is poor governance and undermines public confidence in our democratic system.
When are we going to join the other ASX20 companies like BHP, CBA, Rio Tinto, and Aristocrat and impose a complete ban on all political contributions? Could our two ex-politicians on the board, Labor's Ben Wyatt and Liberal veteran Ian Macfarlane, please comment on why they believe these political donations should be continued when the majority of our peers have ceased this practice?
So thank you. I'm not going to ask Ian or Ben to comment because we don't make political donations. In fact, it was under my leadership of the board where we ceased making political donations. We do make very minor contributions to attend meetings with politicians, and we disclose those.
A lot of companies don't. And that's one of the reasons we have political donations disclosures because we are more transparent than most other companies. But we do not make political donations. And I think the board puts a limit on those meetings, Meg. Thank you very much for the question. Are there any more questions on item one? If not, sorry. Microphone one.
Mr. Chair, I'd like to introduce Mrs. Janine Wood. Mrs. Janine Wood is a shareholder.
Hello, everyone. I just want to say thank you for allowing me to enter the shareholders' meeting after leaving my submachine gun in the car. I wanted to suggest or have you considered spraying the rock art graffiti? Us affecting it, if this is the case.
Also, for all of us shareholders and our participants, are we going to ride our bikes home or drive the cars that we came in, which are emitting carbon dioxide? If Woodside just turned off the switch, what are we all going to do? Have cold showers, freeze to death in the winter, or boil to death in the summer? These are the things we have to consider because the transition is going to take time. We just can't turn off immediately.
All you folks that want to improve the situation, let's give it a bit of time and do your bit towards it. Thank you.
Thanks. Thank you very much. Thank you, and thanks for coming to the meeting on the rock art.
Yeah. Thanks, Miss Wood. And let me echo Richard's thanks. We do appreciate our shareholders who come and appreciate the wisdom that our shareholders bring to the discussion. We've worked very closely with the Murujuga Aboriginal Corporation, and I don't think there's a solution that would involve putting additional substances on the rock art that would be accepted or would be desired by the traditional custodians.
I think the better course of action for us is to do our part to reduce emissions as best we can and to ensure that we've got the right scientific monitoring in place. But appreciate your creativity on that front. And on your second question, thank you for really spotlighting what is the crux of the challenge that we're faced with today. You don't have to go too far back in time.
There was an incident at the Longford Gas Plant in Victoria that basically stopped gas supply to that state for about two weeks. It was a very sobering experience for many, having to take cold showers, having to struggle with the lack of ability to heat their homes. It is quite a confronting event. Really appreciate your sharing those observations with the audience here today. Thank you.
Thanks very much. Thanks, Meg. So I think we'll now move onto the next item of business. Items 2A and 2B are the re-election of Mr. Goyder. That's me, and the election of Mr. Belani. Before handing the chair to Meg for my re-election, let me say a few words. And some of this has been said. So I'll be quick. I joined the board in August in 2017, having retired from Wesfarmers later. I retired Wesfarmers CEO later that year.
I became chair in April 2018. The time I've been chair, we've dealt with the challenges of operating through a pandemic, and we maintained, incredibly importantly, maintained production through that time to enable the Western Australian and international economies to have sources of energy. We've dealt with CEO succession. We've had a transformative merger with BHP Petroleum. We've done board renewal.
If you look at our board now, six of our directors are based overseas, and that's continuing. I'd say this to you as shareholders, particularly those of you in the room, that the role of being a chair of a public company is a complex role because of the interaction and relationship with all stakeholders. As I said earlier, I'm about 80 meetings in with shareholders on governance matters over the last year and a bit.
But also, it's incredibly important as chair to ensure that the diversity of views around the board table are heard and listened to. And at the end of meetings, decisions are made, and management, in this case, Meg and her team, have the clarity on which they want the board wants them to act so that you actually have things happening as a company. A little bit about, oh, sorry.
I think the CEO-chair relationship is very important. I think Meg and I have got a very good way of working together, challenging each other for the benefit of the company. Many of you in the room know me. I grew up son of farmers in the Great Southern of Western Australia. That taught me a few things. Firstly, Mum and Dad were environmentalists way before it was a thing to be because they knew that nurturing the land would support our farm and support their families as we grew up.
By the way, our energy supplies in those days were either LP gas, courtesy of Wesfarmers, or open fires. It also taught me about being open and transparent, integrity, commercial because farming is tough, and I might say resilient. The final comment I want to make is this.
I said it earlier, but I'm incredibly proud to chair Woodside and to be on the board. I'm proud of the work the board does, and I'm incredibly proud of Meg and her team and the 4,700 employees of Woodside. I'm happy to stand with them and walk with them as we do what we do at Woodside, which is generate value for all our stakeholders and be an important participant in the energy transition. Thank you for your support. Over to you, Meg.
All right. Thank you, Richard. Mr. Goyder was elected at the 2021 AGM and retires by rotation at this meeting. Being eligible, Mr. Goyder offers himself for re-election. Based on the 2023 performance reviews, the board, with Mr. Goyder abstaining, supports the re-election of Mr. Goyder. The motion that Mr. Goyder is re-elected as director is now before the meeting. Are there any questions on the re-election of Mr. Goyder from shareholders physically in attendance?
Mr. Chairman, we have Mr. Jeff Reed. Mr. Reed is a proxy holder for the Australian Shareholders Association.
Thanks, CEO. I'd like to state that the Australian Shareholders Association is supporting the election of Richard Goyder for multiple reasons. Since Mr. Goyder joined the board, the board has been refreshed and renewed extensively with experience, diversity, and skills that improve this company for the shareholders. Mr. Goyder has driven the BHP merger, which has advantaged all shareholders.
He has chosen an excellent CEO for which we should be very grateful. He has overseen a transition of the auditor. The auditor is often overlooked, but the auditor we had before was very long-serving. A couple of years ago, we got a new auditor, which is in the best interest of the stewardship and the governance. Mr. Goyder, through his office, has ceased political donations of any sort from this company. All in all, he's been a great asset to shareholders. We thoroughly support his re-election. Thank you.
Thank you, Mr. Reed.
Meg.
Mr. Chair, this is Thomas Veitch. Thomas Veitch is a proxy holder.
Mr. Veitch.
Thank you. I have a question relating to which kind of approach Woodside takes to building maximum shareholder value. ACCR, whom I represent, has published research looking at Woodside's portfolio of oil and gas projects that have not yet gone to final investment decision, projects like Browse, Sunrise, and Calypso.
What we found is that these projects offer less value, more risk, and more emissions than an alternative strategy the board might consider, which is a capital return strategy. So my question is, is the board willing to consider a strategy of returning capital to shareholders rather than persisting with the current strategy of high-risk growth projects? Thank you.
Richard.
Thanks, Mr. Veitch. So I'll answer this in the capacity as director seeking re-election. And I think I referred earlier to our capital allocation framework, which looks at acquisitions and investment decisions based on various returns. And that allocation framework is in our Climate Transition Action Plan and also in our annual report, I think, Meg. So we look at investments in that way.
We're thorough and rigorous the way we assess the opportunities and the risks of investing. And I think Woodside's got a very good track record of returning capital to shareholders when we don't have other ways of investing in the business. So I think the answer to the question is, we look at all those things. Thanks very much.
Next question, please.
Next up is Mr. William Van der Poel. Mr. William Van der Poel is a proxy holder.
Mr. Van der Poel, please.
Thank you very much. Mr. Chair, in your letter to shareholders on 16 April, you wrote, "We believe the approach Woodside is taking is Paris-aligned." How on earth did you get that past the lawyers? As the vote is expected to show later today, the majority of your shareholders don't believe that you have a reasonable basis for making that claim.
It certainly doesn't marry up with the clear consensus of climate scientists, which tells us that if we are to achieve the climate goals of the Paris Agreement, we need to rapidly reduce production and use of oil and gas, leaving no room for the development of new fields. You may be aware that this week, there have been hearings at a Senate inquiry into greenwashing.
So my question is, is Woodside concerned that increasing legal and regulatory action to crack down on greenwashing could have a material impact on this company?
So I'm not sure what that has to do with my re-election other than the comment I made in my letter, which I stand by. So thank you.
Thank you. Next question, please.
Next up, we have Mr. Alex Hillman. Mr. Alex Hillman is a shareholder.
Good morning. Richard, you've indicated that if you are re-elected today, that it will be your last term. One of your responsibilities as chair is succession planning and ensuring the right composition of skills and expertise on the board by finding and nominating candidates. What are the skills and backgrounds you are looking for in the future board to ensure our company is equipped to face the challenges of the energy transition? And more specifically, what are the skills you will be looking for in your successor as chair?
Thanks, Mr. Hillman. This is most likely to be my last term because three years from now will be 2027, and that'll be 10 years, which is an unofficial sort of guideline at Woodside. But there may be circumstances under which I would go earlier or stay longer if that was the desire of shareholders and the board.
But the likelihood is that this would be my last term. Succession planning is an important part of the board's role for executives, the CEO and executives, and the board. And we've, I think, done a heck of a lot of board renewal in the last few years. So last year, we had Dr. Chris Holmes and Dr. Sarah Ryan retire.
We appointed Arnaud Breuillac, who had a long and successful career at TotalEnergies, Angela Minas, who's got extensive experience, financial and sector experience in the US. We've recently appointed, subject to your vote shortly, Ashok Belani, who brings experience that we'll touch on shortly. And the board continues to look at the skills and capabilities we need, including what skills and capabilities a chair would require. And we have external people helping us as well. And so that board renewal process is ongoing.
In due course, the board will make a decision in terms of who will succeed me as chair. I wanted to say one other thing, and it's gone out of my head, in terms of board capabilities. Oh, sorry. I also wanted to say this, that if circumstances arose where I was unable to continue my duties as chair, Woodside has arrangements in place at a board level so that those duties can be conducted appropriately.
Woodside also has a process where we review performance of each of the directors each year, including the performance of the chair. The chairs of the Remuneration Committee and the Audit and Risk Committee provide that feedback to me as chair. Thanks very much.
Okay. Thank you, Mr. Hillman. Next question from the floor.
Mr. Chairman, we have Mr. Paul Fanning. Mr. Paul Fanning is a shareholder.
Try and turn it on again, Mr. Fanning. Sorry.
And can we get the light as well on Mr. Fanning and the microphone, please? I think your mic is okay. I think.
Thanks.
Very good.
Meg, thank you for the opportunity to raise a question for Richard Goyder's re-election. First of all, Richard, I will be supporting you wholeheartedly for your re-election. There's plenty of items written in the AFR and The Australian Today, which you no doubt have seen. No further comment.
My two questions are, one, through Meg, is I'm concerned, and many shareholders are probably concerned about your ongoing workload, particularly in a chair role. You also occupy the chair role for Qantas, but you have taken the decision to stand down later in the year, which is admirable. And your other chair role is the Australian Football League. Now, Woodside is clearly a very big task, very big challenge for any CEO or any chair. How do you see yourself working towards those challenges in your coming term?
My second question is, on the election of the current CEO and MD, Meg O'Neill, I recall that Meg served an interim period as the interim CEO. How did that happen, or why did it happen? Was it a case of the previous CEO having retired or left quite suddenly, and there was a recruitment process done by an EA company internationally? Maybe there's something in the constitution that actually points to that.
Can I ask something?
I know it's not on the very agenda, but yeah, relevant because the chair would probably have been an integral part of it.
Thanks, Mr. Fanning. I'll let Richard field both of those.
Thanks again, Mr. Fanning. On workload, you're right. I'll step down as chair of Qantas later this year. That'll free up. I've always been very clear on my priorities. My priorities, firstly, are my family. Secondly, are the organizations that pay me. In this case, it's Woodside. And then other organizations that I'm involved in, and I'm lucky enough to be involved in, including the Australian Football League, get any residual time and effort. So I'm very clear on my priorities.
Having been a CEO of a large listed company for more than 12 years, my workload is, compared to a lot of people, is pretty high. But compared to where I was, is down a notch. So I feel more than able to fulfill the duties as they come. And I think what we've done in recent times can illustrate that.
Meg and I did a lot of work over the past few months on a significant transaction. It was in the media. I think the way I was able to work with Meg and her team on that is an example, if you like, of the capacity to do what's required. The interim CEO question's a very good question. But I'll take you back to the time.
We're in COVID. It is incumbent on boards these days to ensure that even if you have a degree of confidence that you've got internal succession, which is important, as I just said to the previous question, it's important to look at yeah, we wanted to look at candidates around the world. It was a difficult time to do that because of COVID. Peter had made a decision about the timing he went.
And that happened to then coincide with conversations we started having with BHP. So we needed someone in the seat. It was a terrific opportunity for Meg to be acting CEO. And frankly, she stepped up. It was very evident to the board after not too long that not only was Meg a highly capable leader and also highly commercial, as I found through the conversations with BHP Petroleum, but it was also very clear to us that she had the support of the organization.
So it became a much easier decision, if you like, for the board because we got to see Meg in the role. So it would have been and I think I've always acknowledged it would have been challenging for Meg not to get the nod initially. But I think it worked well for the organization.
Meg knows that she was appointed having been considered amongst other candidates who we thought were the best in the world, so. Hopefully, I've answered it. Thank you.
All right. Thanks, Mr. Fanning. Next question, please.
Mr. Chair, we have an online question from Mrs. Sandra Ransom Fonseca, who asks, "Richard, can you give me at least two strong reasons why you should be re-elected as director?
Well, thanks, Mrs. Fonseca. I think I've done that in my speech. I probably gave more than two reasons. But hopefully, my leadership, my ability to work with my colleagues on the board and work with the CEO and track record underline that.
Yeah. Thanks, Richard. I think you have covered that off well in your opening remarks. Do we have another online question?
Mr. Chair, we have an online question from Mrs. Diana Margaret Maine. "When Richard Goyder retired as Wesfarmers CEO in late 2017, he owned 351,664 shares, which would be worth AUD 23 million if still held today. There was another AUD 16 million of LTI shares, which may or may not have vested. Given this enormous Wesfarmers wealth, why has our chair only bought during his six years as chair, which on Monday were worth AUD 749,046, with the stock wallowing at AUD 28.63?
It was at AUD 31.38 on the day he was announced as chair-elect back in February 2017. The modest shareholding is dwarfed by the AUD 4 million-plus in cash he's been paid by Woodside shareholders, including AUD 841,108 last year, which was well up on the AUD 606,000 his predecessor, Michael Chaney, was paid in 2017, his final year as Woodside chair. Does Mr.
Goyder, acknowledge that the share price has gone down during his six years as chair, and why hasn't he invested more heavily in the stock given his Wesfarmers riches and large cash fees to be chair? Will he commit to buying more shares?
Take it away, Richard.
So thanks, Mrs. Maine. A couple of comments on that. Firstly, of course, you're mixing pre-tax numbers and post-tax numbers because any investment is post-tax. Secondly, our share price is dependent on a whole bunch of things, including prevailing prices. What I would say about Woodside in the last number of years, particularly the last two years, is I think we've distributed something like $11 billion or $12 billion to our shareholders.
We're paying 4,700 employees, suppliers, creditors, $5 million to the Australian government in taxes and royalties. So I think we're actually generating a heck of a lot of wealth. In terms of my shareholding, the main complication I have in terms of buying shares is we actually do have a director's share investment scheme.
I've always been very cautious on that as chair because I've never wanted any perception that I had access to inside information if subsequently we conducted a transaction or the like. So I've been very, very cautious to do that. So the shares I bought were early. I regret that I haven't bought more since because I think there were times when they would have been a very good investment. But I've always endeavored to ensure that anything I do in terms of buying shares is not just illegal but is seen to be appropriate as well. Thank you.
All right. Thank you, Richard. I think we have another online question.
Chair, we have another online question from Diana Margaret Maine, who asks, "CVs matter for professional directors.
We all know what happened at Qantas. But from an ESG and transparency point of view, could Richard comment on why he ended the practice of publicly disclosing the CEO's salary in the AFL annual report and why the AFL has twice renewed its sports bet contract as the AFL official gambling company during his time as AFL president? If he commits to not signing another AFL sports bet deal, I will reverse my online against vote on this resolution.
All right. Well, Ms. Maine, this is not a question that has anything to do with Woodside, so we will not address it at this AGM. I believe we have another online question.
Mr. Chair, we have an online question from Mr. Mark James Horner. The question reads, "I am most supportive of the resolution. I thank Richard for his years of service, past, present, and hopefully future, and express my opinion that I know of no better chair to lead the company through the transition and bedding down the company's portfolio. My question invites Richard to add some color to the opportunities and the challenges ahead.
All right. Thank you, Mr. Horner. Richard?
Thanks, Ms. Tonna. I appreciate the comments. I think between Meg and I, we've talked about the opportunities. We think Woodside has tremendous opportunities. One of the two great strengths of Woodside is our human capital.
We have fantastic people working for Woodside. Then we have strong cash flows from our businesses that are going to enable us to invest in new opportunities, not just the things that you're seeing now that will come to fruition in the years ahead, but further opportunities through the energy transition. My strong desire is that Woodside is seen as one of the world's leading energy companies in 2040 and 2050 and 2060, having thrived through the energy transition. Again, thank you for your support.
All right. Thank you, Richard. And thank you, Mr. Horner. Operator, are there any audio questions online in relation to item 2A? Okay. If there are no further questions, I will now put item 2A to the meeting. Instructions for using the handsets and submitting your votes are again displayed on the screen. Please enter your vote for item 2A. We'll put them up. So the proxy and direct votes received before the meeting on this resolution are now displayed on the screen. And I will now hand the chair back to Richard.
Thank you, Meg. Item 2B relates to the election of Mr. Belani as a director. As Mr. Belani was appointed, since the last annual general meeting is required under the company's constitution to retire at this meeting, Mr. Belani, being eligible, offers himself for election. The board supports the election of Mr. Belani as a director, with Mr. Belani abstaining.
Mr. Belani's experience and biographical details are set out in the explanatory notes accompanying the notice of meeting. I'll now ask Mr. Belani to come to the microphone, and you'll hear from him addressing his skills that he'll bring to the board. So Ashok, where are you? Welcome.
Thank you, Richard. Good morning, ladies and gentlemen. My name is Ashok Belani. For most of my career, very long career, I worked for a company called Schlumberger, or as it is called now, SLB, which develops and deploys technologies which enable the energy industry. I was head of technology for a long time.
That quest, that function, took me all over the world. I've lived in many different countries and operated in practically the whole world, certainly in Asia and in the Middle East and Europe, and finally in the United States, where I'm now a resident and a citizen. During the last 10 years of my career, I led the thinking process in my company on the energy transition. We understood many things about what were emerging technologies and emerging opportunities as the energy transition would unfold.
We actually launched a business group under my charge as Schlumberger New Energy, which is still working on developing technologies in hydrogen production or in carbon capture and sequestration, energy storage, geothermal energies, and so on, in low-carbon technology in possibilities for the energy portfolio. Since my retirement from Schlumberger, I'm engaged in many projects and companies and universities in the United States, but also in Singapore, Malaysia, India, and now Australia.
I see Woodside Energy as a very interesting company positioned in a very interesting way with its capability of executing large projects and delivering to its customers safe, reliable, and, let's say, competitive technologies in its portfolio. Its customers are marquee customers all over Asia, particularly and Australia.
I see the opportunity for Woodside Energy to innovate and to decarbonize its energy portfolio and add new energy assets, which will further decrease the footprint of its own operations and also of its customers as a possibility that has many opportunities for business innovation and business growth as well. To that end, I thank you all for placing your trust in me to participate in this transformative future as non-executive director. Thank you.
Thank you, Ashok. The motion is that Mr. Belani, who's elected as a director, is now before the meeting. I don't think there are any questions, Operator, at the moment. If there are no questions or comments, I'll now put that to the meeting. Sorry. Let me just catch up where I am. I now put item 2B to the meeting.
Please enter your vote for item 2B. And I'll give you a little bit of time to do that, and then we'll put up the proxy and direct votes received before the meeting. And if we can put those up now, please. So congratulations, Ashok. And it's good that your election has been confirmed by shareholders. I move to item 3, which is the remuneration report. Item 3 on the agenda is to consider the company's remuneration report for 2023.
The report is set out on pages 80 to 104 of the annual report. It explains the company's policy on the remuneration of non-executive directors, the CEO, and other senior executives, and provides remuneration information for 2023. Although the vote on the remuneration report is only advisory, the board will take the outcome into consideration when determining the company's ongoing remuneration policy.
The motion that the remuneration report for the year ended 31 December 2023 is adopted is now before the meeting. Are there any questions on item 3? Microphone two.
Mr. Chairman, we have Mr. Jeff Reed. Mr. Reed is a proxy holder.
Hello again, Mr. Chairman. Thank you for taking the question. In the remuneration report, you tell us that the non-executive directors are required to purchase an amount of shares equivalent to one year's board fees within the first five years of tenure. Some of our directors are not there yet because they've got varying tenures.
They are buying their shares through a non-executive director share purchase plan, which presumably sets aside a small portion of their fees each year to buy some shares. Mr. Chairman, we like to see directors with skin in the game, and skin in the game fairly promptly. We feel that five years is too long a period for directors to achieve the minimum shareholding. We would ask the board to please change the five-year rule to a three-year rule.
Thanks, Mr. Reed. We'll have a look at it. It can be challenging, as I just said, to buy shares, although, as you rightly say, we do have a non-executive directors' proposal. Let me have a look at that. I'll come back to you once I've got an indication as to on the current trajectory when some of our directors will get there. We would agree with you that we want each of the non-executive directors to have that minimum shareholding. Thank you. Another question from the floor?
Yep. Mr. Chairman, we have Mr. David Wood. David Wood is a shareholder.
Good afternoon, Mr. Chairman.
Mr. Wood.
I'd like to thank the Woodside for the level of dividends that have been coming out. I'm sure all those self-funded retirees, they're very thankful for the ability to sustain themselves with that level of dividend. My thoughts at the moment, you've got people that are homeless deciding whether to pay for the bills or pay for the food. Things are very precarious in the building industry. It seems, well, that the corporate Australia is very insulated in respect to remuneration.
I've brought it up a couple of times before, and I've been told, "Well, that's just what we have to pay for what we can get." That's wearing thin. You've got CEOs and so forth at AUD 2,000 an hour if you work on a 50-hour week. I think it was Alan Joyce about two, three years ago. It was up to AUD 4,300 an hour. That is obscene.
You've got to understand that retirees and working blokes and so forth can't compete with buying a house or anything else against that sort of level. If you want something, you just pay for it. You don't argue the point. But my question is, why hasn't Woodside been more active in tempering the level of remuneration packages as an example to corporate Australia? The disparity between average worker and corporate Australia is overwhelming. Has that been considered?
Thanks.
Did we get a chance?
Yeah. Thanks, Mr. Wood. Mr. Wood, I appreciate, firstly, your comments around the dividend and, secondly, your comments on remuneration. Remuneration is not simple. It can be difficult to defend. But let me defend it. Firstly, if you look at the complexity of Woodside and you look at our business and what we're dealing with, we want to have not only as good a CEO as we can have but as good a group of executives running the organization.
Those executives, at the moment, half of them live in and around Houston, and half of them live in and around Perth. Those places are about as far away as you can go. So our executives do a heck of a lot of travel. They spend a lot of time away from home.
They are running complex businesses safely and that are generating the sort of returns you talked about. We are in a global market for talent. One of the concerns the Woodside board has is to retain that talent in a market where, particularly in the US market, where that disparity that you just talked to in Australia exists at a multiple in the US as it does here. We balance that.
A very significant portion of the CEO's remuneration is at risk or is tied to her tenure in the organization and is linked to the performance of the organization. We're very confident that Meg will be paid well when the organization is performing well. That is in your interests, and it's, obviously, in the interests of the company. There have been significant changes to remuneration over the last 10 or 15 years.
I think it is more challenging now in most businesses for executives to meet the hurdles. Most companies are now judged against their peers and against the performance of companies in the ASX. There is, I think, strong alignment between the outcomes for shareholders and the remuneration that executives have.
I completely understand your question. I have enormous empathy for people who are struggling to pay their bills and, indeed, have other issues that cause homelessness and the like. But as a board and as chair, I can justify to you what we pay our people because they work bloody hard for it, and they generate very good returns for shareholders. But I appreciate the question. Thank you. Thank you. Next question.
Mr. Chair, this is Mr. Brett Morgan. Mr. Brett Morgan is a proxy holder.
Thank you, Mr. Chair. I'm here today asking this question on behalf of the 145 shareholders that filed a member statement on the adoption of the company's remuneration arrangements this year. Woodside's remuneration plan still incentivizes its executive, like Ms. O'Neill, to pursue oil and gas production growth.
Not only is this out of step with the company's global peers, but this is increasingly risky in an environment where we have the International Energy Agency telling us that global gas use must decline 19% by 2030 if we're to have at least a 50% shot at meeting the Paris Climate Goals, the goals of which you yourself, Mr. Chair, today have said that Woodside is aligned with. With that, my question to you, Mr.
Chair, is that as the demand outlook for gas growth continues to decline and we approach a global LNG supply glut, why is Woodside's remuneration plan still incentivizing executives to pursue a value-destructive gas growth strategy?
Thanks, Mr. Morgan. Thanks for the question. I think you made a statement there, which I don't agree with, which talked about the demand scenario for gas. And if you've got perfect foresight on the demand scenario for gas, can you please come and join the company? Because we'll base all our decisions on that perfect foresight that you and your 140-odd colleagues apparently have, notwithstanding the fact that most of you own one share, I think, in Woodside. So I don't agree with that.
There are different demand scenarios. And as I just said in answer to Mr. Wood's question, we believe that the remuneration arrangements we've got in place for the CEO and the executive are appropriate. They're appropriate for the risks we're taking in terms of investing capital. And they're appropriate with the activities and strategies we have for thriving through the energy transition.
Now, they will be reviewed, as they should be from time to time, to ensure that they're fit for purpose. But right now, the board and I are very comfortable that the remuneration arrangements are appropriate. Thank you. Microphone two .
Mr. Chairman, we have Mr. Paul Fanning. Mr. Paul Fanning's a shareholder, and he has two questions.
Thank you for the opportunity once again. Look, REM is a considerably complex item, Richard, as you have already stated. In the annual report, I want to talk to you and to the meeting about what makes up the corporate scoreboard, page 90, which are financial, business, sustainability, and strategy growth. How is that table composed? If and when is it modified? Where is the source data coming from to generate that?
Yeah. So that was go on. Keep going.
Out of outside consultants. Now, the next page, which will be Table 4, page 92, is, again, in regard to Meg's individual performance for 2023. Would we expect in 2024 the EIS would be similar, or would it be some different metrics in there? Those are my two questions.
Yeah. Thank you. So in terms of the strategy and growth, there is a change between the corporate scorecard measures for 2023 and 2024. In 2024, we'll be separating safety from environmental performance. Both of those measures will have 15% allocation to them in 2024. In relation to your question around strategy and growth, the elements to that change each year.
The board has a comprehensive conversation with the CEO around the elements that we feel that, in this case, she should be judged on in terms of that performance. There will be different there'll be some probably consistent, and there'll be some different next year as we look back on the performance for 2024. As I said, the remuneration arrangements for next year, we've pulled out safety and climate to increase the focus on each of those.
We don't want to, in any way, diminish the focus on safety. But we also want shareholders to understand that there's a very significant focus on climate. Thank you. If there's no further questions, I'll now put item 3 to the meeting. If you've not already done so, please submit your vote on item 3 now. The proxy and direct votes received before the meeting on this resolution are displayed on the screen.
So thank you for your support. I'm now going to move to item 4, which is the CEO Executive Incentive Scheme Awards. Item 4 on the agenda is to consider the proposed grant of restricted shares and performance rights to the CEO on the terms set out in the explanatory notes accompanying the notice of meeting. These Executive Incentive Scheme Awards form part of Ms. O'Neill's remuneration for the 2023 financial year.
The motion is now before the meeting. Are there any questions in relation to item 4 from shareholders in attendance? Microphone one.
Mr. Chair? Mr. Chair, the next question is from Ms. Esther Montgomery. Ms. Esther Montgomery is a proxy shareholder.
Ms. Montgomery? Please ask your question.
Hello. Esther Montgomery, member of Murujuga Aboriginal Corporation but also traditional owner. My question is, does Meg O'Neill get bonuses and financial incentives for consultation and trying to obtain the consent of traditional owners?
Thank you for your question.
Hello.
The answer to the question is, no, she doesn't.
Hello. Hello. How are you? Good question again.
Part of an important?
Hello. No, you're right. You're right.
An important part of Meg's role and that of the executive is consulting with and working with the traditional owners, in this case, the Murujuga Aboriginal Corporation in Karratha. Meg meets with that group, as do I, from time to time. The team does as well. But it's not linked to her remuneration, although the board would be concerned if Meg wasn't doing that. But we say that that's very much part of her day-to-day job. Thank you.
Yeah. And the reason I asked is because you've got to remember, there are five it's very unique. Murujuga actually is probably one of the most unique Aboriginal corporations in Australia because it has five language groups under it. So when you do consultation and you're seeking consent, you've got to take into account shareholders that not everybody is a member of Murujuga Aboriginal Corporation, although their blood lineage, their family lineage, and their footprint goes into Murujuga.
So I want shareholders to really think about that when it comes to consultation and obtaining the consent of traditional owners because not everybody falls under Murujuga Aboriginal Corporation. And the reason why I'm actually putting that to Meg is because Raelene Cooper found that she was not consulted and did not get consent from Woodside. I also want to quickly say that Aboriginal people in the Pilbara are not against infrastructure.
We're not against moving forward. What we are against is no consultation and no consent. Thank you very much, shareholders. Thank you.
Thanks, Esther. I just get Meg just to talk a bit about the consultation. Thank you.
Yeah. Thanks for the question, Ms. Montgomery. And we do take our relationships with the traditional custodians where we operate extremely seriously. We have an active and longstanding relationship with a number of the groups in Roebourne, starting with Ngarluma, with whom we formed a relationship back in the North West Shelf days, Murujuga Aboriginal Corporation in the 2000s, and even more recently with the Ngarluma Aboriginal Corporation, who have native title over the land where we proposed to build the Woodside Solar Project.
We do take our responsibilities to consult extremely seriously. But I do want to differentiate that consultation is quite different from consent. And the process of consultation is one where we want to listen and learn and work together with the traditional custodians to minimize the impacts and to avoid.
I think at Pluto, for example, the consultation has yielded, for example, design changes where, within the Pluto LNG plant perimeter, we have preserved traditional sites that are important to the local traditional custodians. We regularly allow them, with appropriate safety precautions, to visit and attend those sites. Consultation's very important. It's part of our reconciliation action plan, and it's part of how we do business.
Thanks, Meg. I'm not getting any further questions on item 4. So I'll now put item 4 to the meeting. If you've not already done so, please submit your vote on item 4. And we'll display the proxy and direct votes received before the meeting on the resolution. And that resolution will be passed.
Thank you. Item 5 on the agenda is to consider, and if thought fit to approve, the giving of benefits to any current or future person holding a material executive office in the company or a related body corporate in connection with that person ceasing to hold that office, as set out in the explanatory notes accompanying the notes of meeting. The motion is now before the meeting. Are there any questions in relation to item 5? Item number 2?
Your questions, please.
[crosstalk]
Microphone two.
Mr. Chair?
Yeah.
We have Mr. Fanning. He had a question from the previous resolution. Thanks, Mr. Fanning.
I think it's Mr. Reed first.
Oh, proceed.
It's okay.
Thank you, look. Oh, no. I thought my question was in queue, but my apologies. Look, in regard, Meg, I support your re-election. And you've worked through some challenging and tricky times with COVID and post-COVID. I draw your consideration to the peer group of international oil and gas companies, table 11, page 101, and also ask, how is that comparator group really constructed?
Because when we look at the list, that there are about 10 or 12, I ask, should we BP, Petrobras and Shell Group, should probably be included in that comparator group? How can that be? And also, can you give some clarity to the board, to the shareholders, where you divide between restricted share rights and also performance rights? Very technical questions. I'm sorry, but I think these are probably relevant.
So I think those questions probably relate to the remuneration report, not to the leaving entitlements. We might just pause the meeting for a minute while we remove the speechmakers, please. Thank you. Sorry, Mr. Fanning. I might get you to kick off again. And I'm just trying to work out whether your question relates to the remuneration report or the issue on leaving entitlements. But either way, I'm happy to answer it.
It comes under item 4, the grant of executive incentive schemes for Meg.
Yeah. Go on. Go on.
Part of it is to give a definition. I think I know what the answer is, but probably because it's very technical. How does the board decide between the allocation of, say, restricted shares and performance rights? And also, second prong is the comparator group that you have page eight and also in the annual report, page 111, doesn't include BP and Shell.
Yeah. On the comparator companies, we try and do like companies. The board reviews this each year. It's actually become a smaller group of companies in recent times because of acquisitions and amalgamations and the like in this sector. But as best we can, we want Meg's performance assessed against relevant peers.
And we think that's the right group. And as I said, we'd look at that each year. In relation to the split between performance and shares that are entitled as long as Meg remains with the company, we moved away from a short-term and a long-term incentive scheme some years ago. And this is now what would loosely be called a combined scheme. So there's a mix in that between shares that are performance-tested against total shareholder return, against the ASX 200, and against those peer companies.
Then there's an element paid in cash, and there's elements that Meg will receive if she's still with the business. But the quantum of those shares of that award is dependent on the performance of the business and Meg's performance. So again, we think that's an appropriate way of doing it.
LTI and STI combined.
It combines them both.
To make up restricted share rights and performance share rights.
That's correct.
Thank you. Thank you very much. Thank you for the time and patience.
No, that's all right. Now, I think you all did. You have a question on the leaving entitlements, Mr. Fanning? No?
No, Mr. Chair?
Yep.
We have Mr. Jeff Reed. Mr. Jeff Reed is a shareholder.
Okay. Sorry, Mr. Reed.
Thanks, Chairman. Just to clarify, Jeff Reed representing the Australian Shareholders Association. I'm trying to understand this resolution, Mr. Chairman, and I'm having some difficulty with the objectives and the processes by which shareholders are guaranteed that you will use the permissions we give you responsibly, even through changes of CEO, board, HR chief, etc.
I'm looking for information about how many people this resolution applies to. Are they just Australian, or are they just American? Is it just KMP, or does it go wider than KMP? And broadly, in the resolution and the notes to the meeting, you've given us some statements promising to use the permissions we give you wisely, responsibly, and cautiously and appropriately. Well, how do we know that resolution can carry over through changes of personnel, Mr. Chairman?
Yeah. So again, Mr. Reed, thank you very much for your question. And thank you for the constructive way you've approached your questions today as well. As I indicated to you when you and I met some weeks ago, there is nothing in this which is Woodside seeking to increase leaving entitlements. This is the purpose of this is it's increasingly common for ASX-listed companies to do it every three years so that we don't inadvertently breach an Australian Corporations Act's termination benefits limit, which paid to employees.
And it became more complex for us when we did the merger with the BHP Petroleum business because of employees with BHP Petroleum and in that jurisdiction. So it's to ensure we don't inadvertently breach. We treat our departing employees fairly. It's very clear internally how we are to do that.
As I said, there's nothing in this which is about increasing those payments. It's just to ensure that we don't inadvertently breach the Corporations Act.
Can I add something?
Yeah.
And Meg's got.
Yeah. Perhaps I can elaborate. So with our subsidiary structure, with our increasingly complex global organization, we have a number of employees that are below KMP who are directors or officers of subsidiary companies. It's certainly appropriate for them to hold those roles because they will be located in the countries where we have those affiliates.
The Corporations Act would put at risk our ability to pay them the leaving benefits to which they are entitled. So the request for this permission would allow us to pay those employees who have filled those subsidiary director or officer roles consistent with their contractual leaving entitlements without risk of breaching the Corporations Act.
Meg, could you give me an estimate of the number? Are we talking 10, 20, or 50?
Oh, no. It'd be over 100.
Over 100?
Yeah. We've got 100-plus. I'm looking at my CFO. Thumbs up. Affiliates sorry, warrants.
It's a management or executive office, Jeff, so.
So each of those subsidiaries will have three to five directors. It actually does end up being a reasonably large set of employees that are potentially exposed.
Also people who've held those roles in the past three years?
Correct.
Okay. That's quite a number. Thank you.
Thank you.
Thanks very much.
Mr. Chairman, we have Mr. Fanning. Mr. Fanning is a shareholder.
Thank you. Look, this is an interesting proposal, item 5, the approval of leaving entitlements. And I suspect this has come about or necessitated in recent times and maybe is an item of business for the companies in the energy and materials space.
Given what you have actually mentioned to the ASA just before, which I took in, how were these leaving entitlements managed before, and particularly maybe small ex gratia year payments or notices of termination? How was it handled prior to having put this item on notice for approval? What has changed?
Thanks, Mr. Fanning. I actually don't think anything's changed. We just want to make sure we don't inadvertently breach the Corporations Act. But Meg, can you give a bit more color on the?
Sure. So.
It depends on whether people leave as a good leaver or as a bad leaver, Mr. Fanning. There's a number of things that go into it, how much service they've had, long service leave, annual leave. There's a number of factors that play into what the leaving benefits may include.
Yeah. So thank you for the question. Before the merger with BHP Petroleum, our corporate structure was much simpler. So there were a smaller number of employees who were holding these director and officer roles in the subsidiaries. So it was a smaller number of people who were captured by this requirement.
T hrough the normal leaving process, HR ensured that we managed those leaving entitlements appropriately. Again, it's a result of the merger with BHP, the more complex global corporate structure that has created the possibility with those increasing number of global subsidiary director roles that we could have a conflict between the leaving benefits a person's entitled to and the restrictions from the Corporations Act.
Okay. Thank you very much. Yes, I do raise technical questions, but.
No, I appreciate it.
I'm late to the beast.
You've come a long way. Thanks, Mr. Fanning. I now put item 5 to the meeting. If you've not already done so, please submit your vote on item 5 now. The proxy and direct votes received before the meeting of this resolution are displayed on the screen. So that will be approved. Thank you. Item 6 is the Climate Transition Action Plan and 2023 Progress Report. It's on the agenda to consider those things.
The report describes Woodside's plan to reduce our net equity Scope 1 and 2 greenhouse gas emissions, and invest in products and services for the energy transition. Shortly, we'll display the proxy and direct votes received before the meeting on this item. You'll see that based on this, the motion is unlikely to receive majority shareholder support.
While this vote is an advisory one and non-binding, the board will seriously consider the outcome when reviewing our approach to climate change. I'll reflect more on this later. But continuing with formal business, the motion that the Climate Transition Action Plan and 2023 Progress Report is supported is now before the meeting. Are there any questions in relation to item 6?
Mr. Chair, we have a pre-submitted question from Mark Paton. My question is, what are you going to do if your Climate Transition Action Plan is rejected by a majority of shareholders?
So thanks, Mr. Paton. And as I just said, I think we take the shareholder feedback seriously. We've had significant engagement with shareholders, hundreds of meetings with shareholders over the last year or two.
We will reflect on the voting, continue to engage with shareholders to understand their feedback, and decide how we best respond to it, and hopefully work with shareholders who want to own shares in Woodside to ensure that they have the confidence in us and in our plans to continue to do that. Have we got any questions from the floor? Microphone one.
We do indeed. Mr. Chair, this is Thomas Veitch. Thomas Veitch is proxy holder.
Thank you, Chair. I have two questions. The first one is about the scientific scenarios that underpin the action plan. Just today, Meg said we will set our goals and make decisions informed by the available science. But the climate plan has relied on the IPCC AR6 scenarios to show the perceived resilience of oil and gas towards 2050. However, these scenarios are five years out of date.
And the remaining carbon budget since they were published is now less than half. Given where we are today, it's simply not possible that the oil and gas is as resilient as Woodside makes it out to be under any Paris-aligned scenarios. So my question is, looking at the available science, why did you think it was acceptable to justify the climate plan with out-of-date scenarios that overstate the carbon budget by roughly 100%?
Will you commit to being informed by the available science using scenarios that are updated annually, such as the International Energy Agency or the Network for Greening the Financial System, NGFS4 scenarios?
Thanks, Mr. Veitch. Meg?
Let me start by saying that the IPCC 6th Assessment Report was published in March 2023. It was recognized as part of the COP28 summit outcome as recently as December 2023.
We strongly reject your assertion that it's out of date, especially and I'll quote, the IPCC itself said, "Thousands of people from all over the world contribute to the work of the IPCC. For the assessment reports, experts volunteer their time as IPCC authors to assess the thousands of scientific papers published each year to provide a comprehensive summary of what is known about the drivers of climate change, its impacts and future risks, and how adaptation and mitigation can reduce those risks.
An open and transparent review by experts and member governments is an essential part of the IPCC process to ensure an objective and complete assessment and to reflect a diverse range of views and expertise." So we are using the same data that the COP process is using to inform our reports.
The second thing that I think is important to highlight is that the IPCC notes that there are many different pathways to achieve a Paris-compliant outcome. There are 97 scenarios that constrain temperature warming to 1.5 degrees C or lower. There is a range of gas, oil, coal, hydro, renewables used in those scenarios. The energy transition is going to be uncertain. This is one of the things that we've highlighted in our Climate Transition Action Plan.
And so as a company like ourselves, we need to be taking a prudent path that is informed by the science to make our decisions about strategically where we go.
Thanks.
Thank you.
Any more questions from the floor?
There's just a follow-up question.
Yeah. Sorry. Perhaps I should have asked both of my questions at once. My other question is about the complementary abatement target. The climate plan describes the abatement target as complementary. From what I can see, this means it is a way to measure the progress of projects which were being assessed against the existing $5 billion new energy CapEx target. I'm wondering if you could give an example of a project that would not have happened under the CapEx target but will now happen because of the abatement target.
Yeah. It's not that simplistic. So one of the things and it was feedback that we received regularly from our shareholders was that the $5 billion investment target was appreciated. But investors didn't have clarity as to what does that mean from a climate change perspective. So looking at the outcome of that investment, what does that mean? So the complementary abatement target speaks to the impact on global emissions associated with the investment making.
And the way we developed both of those numbers was we took a look at the slate of projects that we have in our portfolio. We asked ourselves, what's a credible pace at which we can progress those projects? In fact, what's an ambitious pace that underpins the $5 billion?
And then we asked, well, what would the outcome be if we achieved that and the 5 million tons per annum abatement target correlates to the $5 billion investment target?
Thanks, Meg. Further questions?
Mr. Chair, the next question is from Mr. William Van der Poel. Mr. William Van der Poel is proxy holder.
Thank you. I actually had a different question. But just following on from what was just spoken about, a simple one, how does that 5 million tonne abatement target compare to Woodside's current annual Scope 1 to 3 emissions?
And then did you have another question as well?
How would it compare to Woodside's projected Scope 1 to 3 emissions after it completes the addition of its current growth projects and then again with other future growth projects it's planning to undertake?
Okay. Thank you. Meg? Meg?
Sure. So our gross Scope 1 emissions in 2023 was 6.2 million tons. With the use of offsets, our net equity Scope 1 and 2 was 5.5 million tons per annum. If we look at our Scope 3 last year, it was 73 million tons of CO2 equivalent emissions. So you're highlighting that the 5 million tons relates to the 72 million tons that we're currently emitting. I think that's a material step forward.
That's approaching 10% in investments that we're going to make between now and 2030. So to change, again, in a capital-intensive business, to change anything you do by 10% is only going to happen with tremendous work, commitment, and effort. And I have absolute confidence that our team is positioned to do that and that we will be working through the challenges to deliver on that target.
Yeah. The new projects. It's hard to obviously, we're in the process of reviewing those projects. So as we do that, we'll have an assessment of what those emissions are likely to be. I think the only other thing I'd say to you, Meg, about the scope 3 is obviously, they're our customers' scope 1 emissions, scope 1 and 2 emissions. And so customers will have their own plans as well. Thank you. Yeah. Meg gave her.
Well, just to be clear.
Whole-of-life emissions profile for Scarborough, which was because people are very erroneous in some of the numbers they're talking about.
And just to be clear, well, the 5 million tons is per annum. So multiply that over the life cycle of the project. That'll give you a flavour for the longevity. It's also, I think, worth noting that one of the differences between our new energy investments and our traditional oil and gas investments is a hydrogen project, for example, is more of a factory. So we don't face the inevitable decline that we face in the oil and gas business.
So if we're able to produce hydrogen, for example, that allows customers to have energy with 5 million tons per annum less emissions, we'll be keeping that factory full for 30, hopefully more years. So again, the abatement potential actually is quite enduring once we get these projects up and running.
Thank you. Next question.
Next up, we have Mr. Murray Ridestock. Mr. Ridestock is a shareholder.
Thank you, Chairman. In 2023, Woodside planted more than 2.7 million biodiverse seedlings in WA. On page 30 of the report, there are some impressive before and after photos of Woodside's native reforestation projects. What has been the survival rate of these plants in the plantations under the current extreme dry conditions as a result of climate change? And more recently, there's been shot-hole borer.
Shot-hole borer could devastate these plantations as they mature. And has the impact of that on the carbon credit offsets from the mature trees been assessed? And has Woodside considered supporting the current government research initiatives and the mitigation measures to stop the spread of shot-hole borer?
Thanks, Mr. Ridestock. Again, I'll get Meg to answer the question. It'd be nice to get some rain in the agricultural regions of Western Australia sooner rather than later, obviously. Have we got any updated information on?
Look, I appreciate the question, Mr. Ridestock, and appreciate the interest in our carbon business. We're actually very excited about this part of our company. We started this business in 2018 recognizing that the ability to manage our own future and have high-quality offsets that we are originating ourselves would be important.
So we have been investing quite a bit of time and effort to build out a diverse portfolio of both plantations and credits. We work with the Australian government on the Australian carbon credit methodologies, which do account for a certain amount of plants and seedlings not making it to maturity. So that's accounted for in the methodology. So if you're wondering, well, do we have a risk to the carbon credits that we present on slide 31, that is accounted for in the methodology.
With respect to the questions around how the plants are doing in these dry conditions, Sean Gregory, who runs our new energy businesses here and I'd suggest, Sean, if you can speak with Mr. Ridestock after the meeting, you can share a little bit more detail on how the specific plants are surviving this dry spell.
Thanks very much.
The addition.
Yeah. Yeah.
Might come back on.
Sorry. Do you have another question?
Yeah. Yeah. Part two was talking about the shot-hole borer and the impact that would have on the plantations.
Oh, sorry. There's the disease. Yeah. Again, we might.
It's a very recent disease in Perth. I mean, it's only very early days at this stage. It's spreading fast.
Yeah. Apologies. Sorry.
Yeah. Well, we'll take that. I'll have Sean follow up with you on that after the meeting, if that's all right?
Okay.
Yeah. Thank you.
Mr. Chair, next up, we have Alex Hillman. Alex Hillman is a shareholder. He has two questions.
Good afternoon. Now, I've been here for a while. So first question relates to the capital allocation framework, which is included in the CTAP. So when we had a look at that, one thing we noticed is that Woodside, for its fossil fuel projects, has a lower investment hurdle rate. And separately, sorry, it has a higher oil price.
And then when we compared that to the investment hurdle rate included in the CTAP, we noticed that Woodside has a lower investment hurdle rate and/or a higher oil price assumption than Equinor, Total, Conoco, Shell, Eni, BP, Exxon, and Chevron. So we're substantially more bullish on oil and gas than those peers. Considering TSR, i.e., total shareholder return, we have underperformed every one of these companies over the last three years. So this gives rise to part A and part B of this first question.
How do you justify having more bullish assumptions than our peers? And part B, has this impacted the decision-making process with growth projects such as Trion and Sangomar?
Sorry. Say the second part of the question again. How's?
Have these bullish assumptions fed into the decision to make FID on growth projects such as Sangomar and Trion?
Well, I'm not going to disclose the assumptions we made on any of those projects. But I would say that we test all the assumptions we make, including pricing assumptions, to ensure that any investments we make are going to be cash flow positive in an adverse price and demand scenario, as well as testing, as I said earlier today, around the CapEx, around any overspend on CapEx or any time frame extension as well.
And we also look at the lifespan projections of cash flows. And we look at the resilience to investments for that as well. The capital allocation framework, I think, sets out broadly the way we are looking at investments. But there are a number of other factors we bring into account. And we make our own assessments as to what we think the price assumptions that we should include.
Importantly, for gas, the gas price assumptions, our pricing, can often be long-term and not necessarily fixed to prevailing oil prices.
Yeah. I mean, perhaps a point to add on is one of the metrics that I think is highly transparent. Look, every company has its own methodology and its own price forecast. The number that you can't dispute is what is the break-even price at which a commodity is competitive. So for our Scarborough Energy Project, the LNG delivered to customers in North Asia would be delivered at a price of $5.80 per MMBTU.
So if you compare that to US Gulf Coast LNG, for example, we are lower priced. So again, that gives us confidence in the resilience of our product versus others. And as a proof point, that Scarborough is a highly competitive source of LNG. If we look at Trion and this was very clearly communicated in our FID pack, the break-even oil price for Trion was, I want to say, $53.
That's inclusive of the carry that we have for the state oil company if we excluded that. So to look at the quality of the investment without that split between the partners, it's closer to a $40 break-even. So again, these are good measures that help demonstrate the resilience of the Woodside growth investments versus our competitors.
Thank you. Next question, please.
Second question.
You had your second. Did you ask it?
No.
No. This is the second question.
Mr. Hillman again.
Just one thing. My colleague, Tom, you didn't answer the question about whether or not there's any projects that would happen under the abatement target that wouldn't happen under the CapEx target. I'll just give you an opportunity to answer that before I ask my other question.
Yeah. I think I answered it, which is we need to look at the capital allocation framework. That underpins the investment decision-making. The abatement target really is complementary to the investment target. Projects aren't assessed on A versus B. We take a look at the totality of the project. Making sure that we're meeting our return expectations is one of the critical gates that any investment needs to pass.
Then my second question relates to Scope 1 emissions. So our latest climate report goes to great lengths to imply that we won't need a lot of offsets to meet our Scope 1 targets. We'll reduce emissions instead. The disclaimer on some of these emissions reductions, though, is quite impressive and doesn't give me, as a shareholder, a lot of confidence that these reductions will happen.
The CTAP describes some of these reductions as indicative only, not guidance, not certain, subject to further maturity of cost and engineering definition. The disclaimer then refers to section 7.6 of the CTAP, which lists more reasons why these projects may not be implemented. Noting that we're happy to include such uncertain emission reductions in our CTAP and quantify those, can you explain why there isn't an estimate of the Scope 1 emissions associated with the pre-FID projects that this business is progressing?
I mean, Alex, a bit of it. So let me give you two points. So first off, on the decarbonization plan, one of the things that we've done and I think we're one of few companies in the world that has done it at this level of granularity is to outline the costs and the pathway to achieve near-zero emissions in 2050.
To frame this a bit, if you look at the assets that we have now and the assets that we'll be operating into the 2040s, we have assets that were designed in the 1990s. What we've done with the CTAP is outline for the assets that we expect to be operating late into the 2040s, what would we need to do to get those to near-zero emissions. It's not easy. It's not going to be inexpensive.
So to decarbonize an operational LNG plant that was designed in the 1990s, we're going to need to find a different fuel source to run the power generation. Renewables will help with that. But we've got to find something that helps firm. That may be hydrogen, may be some other technologies. We have to deal with the exhaust and the CO2 that comes out of the machines that power the compressors that make the LNG.
And we've outlined technologies that can help us do that. We've also been highly transparent about the cost of those technologies. And that's one of the issues that we grapple with. Is it the better answer for us to spend those shareholder dollars on those high-unit cost opportunities or to spend them on other opportunities? So we've never said that offsets won't be part of the mix.
In fact, we've been really pretty clear that offsets are part of the mix. When it comes to new projects, it's perhaps a bit simplistic to say that we have a target for how we are going to decarbonize our business. Emissions that come into the portfolio above that target line need to be either designed out, operated out, or offsets.
Thank you. Further questions?
Yeah. Mr. Chair, next up, we have Tim Frodsham. Mr. Tim Frodsham is a proxy holder.
Thank you. A couple of questions concerning carbon capture and storage. The next one is relating to decommissioning. Just a bit of context. Woodside's used the P3 pathway.
Sorry. Can you just speak up a little? Just get closer.
Sure.
Thank you. Yeah.
Yep. So do you want me to repeat those questions?
Yeah. Thank you.
Okay. So first question is relating to carbon capture and storage. The second question is concerning decommissioning. So for context, Woodside has used the P3 pathway, which relies on 687 gigatons of carbon capture and storage.
In 2021, the global emissions totaled 36 gigatons. 687 gigatons would represent 19 years of operational global emissions being buried from your projects. For context, total global CCS came in in 2021 at 40 megatons, which is 0.11% of global emissions for that year and just 0.0058% of total carbon capture and storage required under the P3 pathway. For further context.
Sorry. Can you ask a good question, please?
Getting there?
No. Can you ask a good question? I don't want to speech.
Will the board concede, given there's exactly 0 contribution from Woodside to the CCS total, that both CCS and direct air capture requirements outlined in P3 are unreasonable? Part B, if not, what has Woodside calculated as a fair share of the required 687 gigatons of CO2 sequestration? How and when does it plan to reach these required levels? I've got a second question.
Yeah.
This is for the auditor in relation to.
You've missed your chance on the auditor. Thank you. So we'll just answer the first question. Thank you.
Look, I think it's worth noting, as we clearly spelled out in the Climate Transition Action Plan, that there are many pathways to achieve the goals of the Paris Agreement. CCS and carbon sequestration is going to be an important part of most of those pathways. I think you've spotlighted that the world is behind where we need to be in getting that technology up and running.
We've got a number of CCS opportunities that we're progressing. We outline them in the reports. We've got opportunities in Bass Strait. Angel CCS is probably our most advanced operated opportunity. Bonaparte CCS is one that has large-scale potential but is more in the early stages. So we recognize that CCS is going to be part of the solution. It's something that we are continuing to progress.
We see it as a pathway to helping our customers address their Scope 1 emissions, which, of course, as Richard said, is our Scope 3.
Thank you. Next question, please.
Mr. Chair, next up, we have Mr. Michael Wilson. Mr. Michael Wilson is a shareholder.
Thank you, Richard and Meg, for your presentation this morning. It was quite impressive. I guess I originally had one question. But from your talk, I've been prompted to just pop in another one quickly. Historically, Woodside's been an exploration and production company. But in your talk this morning, there was not one mention of any exploration. And bearing in mind that you offloaded most of your G&G staff some months ago, I suspect that exploration is no longer on the horizon for Woodside.
So is it safe to assume that Woodside is now simply a production company. And my second question is basically to do with the energy transition that we've heard lots about this morning and unlimited waffle on various aspects of this and that and the other, quoting numbers here, numbers there, and numbers everywhere.
But overall, obviously, your energy transmission plan is to reduce emissions. And again, we use all these flowery words. When we don't mean emissions at all, we mean anthropogenic CO2, which we now fail to really designate as what we truly mean. Because the public narrative is now that we must have all these flowery definitions about everything to mean something that they're not. And so as we know, atmospheric CO2 is a trace gas in the atmosphere of 7.041%.
And the anthropogenic composition of that 0.041% is less than 5%. So in actual fact, we're looking at 0.002% of atmospheric CO2, which somehow has become the on/off switch for climate change, global warming, and any other nefarious term you want to use, which is now inundating our daily media.
My question really is then is when is Woodside going to step back a little bit and have a look at the forest rather than the trees and, as such, really think about why are we spending these millions, billions of dollars chasing a mythological dream? Thank you.
Thanks, Mr. Wilson. So just on exploration, I'll get Meg to, again, talk a bit more about it. I think we've sort of moved from the days of exploring for oil and gas to, although we'll still, from time to time, look, particularly where those opportunities are adjacent to existing facilities we've got. I think our, if you like, exploration strategy now is focused on accessing, testing, and developing low-cost, low-carbon valuating opportunities, which we see as very important going forward as long as they meet our financial criteria as we've outlined.
So I would hope that as an organization, as we go forward, we're as innovative and bold as we have been in our 70-year history, particularly as it pertains to developing the LNG business in Western Australia and some of the bold decisions that have been made. So I think that exploration bit is naturally evolving.
Do you want to add anything to that and then talk a bit about the transition?
Look, from an exploration perspective, as Richard said, we're very focused. We do have an exploration team. A lot of that work is being run out of our Houston office. But the clear focus for the team is making sure that we're managing the risk of this kind of activity, making sure that we're not kind of putting all of our money on one opportunity.
So having a range of opportunities that we're exposed to but exploring in places where we've got a pathway to rapid commercialization and where the opportunities, if we're successful in finding them, would be low-cost and lower carbon. So that's the exploration focus. Look, from an energy transition and look, I appreciate you providing your own numbers to that question.
One of the things we do recognize and I think it's going to be it's reflected in a lot of the discussion we're having today is that changing the world's energy system is complex. Tackling climate change is complex. These are things that are going to take time. They're going to take dollars. And I think the important starting point is to be able to have a really honest conversation about where we're headed and how fast we can get there. So appreciate you sharing your perspectives on the challenge that we're tackling.
I do believe our business strategy is one that will allow Woodside to continue to do what we've done for many years, which is provide reliable, affordable energy to homes here in Australia and around the world and create and deliver value to our shareholders.
Thanks, Mr. Wilson. Next question, please.
Mr. Chairman, we have Mr. Trương Chang. He's a shareholder.
Good afternoon, Mr. Chairman. I commend both you and the CEO on an outstanding meeting. The share price has gone up. So you must be doing something right. You also helped eradicate this new virus, the ID10T. Most of them have already left this meeting. I don't know what you did. But you did a very good job.
In order to inoculate the rest of the people that might be susceptible to the ID10T virus, I've got a question about gas. A lot of the young people are breathing the fumes of a path of mutual destruction because of their lack of understanding and they're misinformed about gas. At the recent COP24, also known as FLOP24, the Gulf States wanted to increase gas. China and India wanted to increase coal. The Saudi State wants to increase petroleum. And our minister, Blackout Bowen, wanted to increase renewables.
In Victoria, there's a ban on new gas devices in any new home. Yet, they're short of gas in the Eastern States. And Sorbent, the toilet paper manufacturer, recently opened up a factory. Instead of doing it in Australia, they did it in Indonesia because they couldn't get a cheap gas supply. Can you confirm that gas is needed more than ever and that Woodside is producing gas that everyone wants and needs efficiently and reasonably? And I have a second question. Do I ask it now or do I wait?
Answer it now, please. Ask it now, please.
Certainly. As what Mr. Wilson just said, when the ID10T people left the room, the IQ of this room, the average IQ, doubled and tripled. So we'll try to double and triple it again by talking a bit about CO2. And I've got a question about CO2. Can you cite one study, any study, that shows an increase in CO2 causes an increase in climate? The reason you can't is if you find one, you've got to show that the 97%-95% of natural emissions, not man-made or human-made emissions, don't cause it, yet the 3% causes it. Thank you, Mr. Chairman.
Thanks, Mr. Chang. On your first question on gas demand, again, Meg might want to make some comments.
But she said in her speech today that we're actually putting more gas into the Western domestic market and more gas into the East Coast domestic market because of demand scenarios. The Australian energy market operators indicated in both those markets that without more gas, there will be significant issues around supply of gas and that there will be consequences to that.
Meg also talked about the long-term arrangements we're entering into with customers in terms of Scarborough gas and some of the other things we're doing. So we're seeing at the moment a strong demand scenario for our products. That's going to be good for shareholders. On CO2, I think I'll let you answer that if you want to. But otherwise, we'll move on.
Yeah. Look, we appreciate there's a divergence of views. The leadership of the world's 140 nations have signed up to the Paris Agreement and concluded that climate change is a serious issue that the world needs to respond to. The IPCC and the scientists that contribute to the IPCC inform our decision-making on this topic. With all of that as context, that drives our business strategy, which is really to thrive through the energy transition. We're very clear that gas has a substantial role to play.
We've got great examples here in Australia. South Australia versus their neighbors is a classic example. But if the world is serious about tackling climate change, we need to be looking really hard at the nations that have the highest energy consumption. And how do we tackle decarbonization there? And the low-hanging fruit is coal use in China.
That's where gas has a real opportunity to make a difference.
Thanks, Meg. Next question, please.
Mr. Chang, next up, we have Mr. Bill Hare. Mr. Bill Hare is a proxy holder. He has two questions for you.
Thank you, Mr. Chairman. Good afternoon. I'm actually a climate scientist. I've been involved with the IPCC in different capacities over many years. I take part in all of the COPs as well, just as context. My question was about the Paris Agreement alignment of the scenarios that Woodside is using to justify its present business plan.
I have questions about that. Woodside has claimed that there are about 200 Paris-aligned pathways. It's almost universally accepted now that Paris alignment means limiting warming to two things: 1.5 degrees with no or limited overshoot; and secondly, to bringing global greenhouse gas emissions back to net zero in the second half of the century. Probably only about 50 scenarios in the most recent IPCC assessment that align with these Paris Agreement goals. Formally, they belong to category C1A.
You can find them in the summary for policymakers if you haven't found them before. There were, therefore, not 200 aligned scenarios that Woodside has claimed. I'm just wondering, and I want to get to this, what interpretation of the Paris Agreement Woodside actually has. The other 150 scenarios don't align with either the warming limit or with the requirement that greenhouse gas emissions get back to net zero sometime this century.
I want to ask two things. Firstly, what exactly is Woodside's interpretation of the Paris Agreement? How does it differ from the widely acknowledged and accepted understanding that it is to limit warming to one and a half degrees and bring greenhouse gas emissions to net zero this century?
Secondly, given that Woodside has apparently cherry-picked an extreme pathway from the IPCC database that does not, to me, appear aligned with the Paris Agreement's goals as I've outlined them, I'm wondering what justification Woodside has for using these pathways and what the implications are, whether the company has evaluated what the implications are of relying on these extreme pathways to justify its business plans to investors and shareholders. Thank you.
Thanks, Mr. Hare. Thank you for the work you've done on this very important matter. I think we've dealt with a lot of the questions you raised in terms of Paris. I think you've made a statement about the different scenarios. We wouldn't say we've cherry-picked one different scenario. We'd say there's a range of scenarios. I think otherwise, we've fairly well done it, Meg. Any further comment?
Yeah. Just I would reiterate that one of the key questions facing us is the tremendous uncertainty ahead of us. And the IPCC, as you noted, have many different pathways that can allow the world to achieve the outcomes of the Paris alignment. And if we look at the things that are fundamentally within our control, we're taking action on our Scope 1 and 2 emissions by working to reduce our net equity, Scope 1 and 2 emissions, to zero by 2050 or sooner, again, fulfilling that aspirational goal.
We've got clear targets for the very near and mid-term. We've got plans to support our customers in reducing their emissions, which is our Scope 3. And so I think we've addressed the question already. Thank you.
Next question. Can we keep the questions brief, please?
Mr. Chairman, we have Mr. Philip Gardner. Mr. Gardner is a proxy holder.
Good afternoon, Richard. I'm in the conflict of being a shareholder of Woodside but also a farmer. As you know, we all know that farmers are totally dependent upon rainfall. We had the driest year ever in 2023, as did much of southwest of Western Australia. It's not looking good at all for 2024 at this stage. We're also aware that the relationship between CO2 emissions, man-made emissions, and climate change is strengthening. The IPCC said that WA is a hotspot in terms of climate change.
T hey made that prediction at least 20 years ago. My question is that with regard to Western Australia's farming industry and community, I recognize that the farming interests also create net emissions as well. But it's of a minor amount.
What degree of business, moral, and financial accountability does Woodside assess that its operations and consequence Scope 1, 2, and 3 emissions are having on the southwest of Western Australia's farming community now and prospectively for the coming decades? Respecting, of course, that Woodside emissions aren't the only emissions contributing to this increasingly damaging situation.
Thanks, Mr. Gardner. So as I said earlier, we're all hoping to get some rain in the agricultural region soon. I think the last part of your question is pretty important or what you were saying then. Our equity Scope 1, 2, and 3 emissions last year, as Meg said, were around 80 million tons. The Scope 3 emissions from the iron ore producers in Western Australia last year were probably close to a billion tons.
And Australia's share of global emissions was something between 1.2%-1.5%, I think, of global emissions. So if you believe in the theory that climate change, which I do, is occurring because of changes and emissions are a part of that but they're globally impacted, then it's a pretty long bow to say that Woodside is responsible for the climate conditions in the agricultural parts of Western Australia.
In fact, it's nonsense to say that. Thank you.
Mr. Chairman, we have Mr. David Wood. Mr. Wood is a shareholder.
Good afternoon again, Mr. Chairman. Having listened to everybody and sort of raised a bit of curiosity, I just want to ask a question. With the offshore platforms, you've got wind power. You've got wave power. You've got solar. You've got gas condensate. How do the offshore platforms get powered?
Meg?
It's gas-fired with diesel as a backup if we were to have a blackout condition.
There's no way of employing the renewable power out there?
We need 24/7 power. We need 24/7 power at scale. In a few places, there's one of the platforms where we've got a battery. That's allowed us to run fewer gas-fired power generation machines. We don't need that spinning reserve. We do have a battery on one of our platforms. We do have limited amounts of solar on some of our facilities. But again, that's more for ancillary items as opposed to running the main power system. Again, you need the 24/7 reliability. We get that from using gas in our own operations.
That's the optimum you can use?
Yep.
Yes.
Thank you very much.
Thanks, Mr. Wood.
Thank you.
Next question, please.
Mr. Chairman, we have Mr. Richard Yin. Mr. Yin is a proxy holder.
Yes. I'm Dr. Richard Yin, a medical doctor. This is more with regards to maybe ESG considerations going on into the future where they'll become more prominent in terms of the global conditions. My question is, air pollution from burning oil, coal, and gas is responsible right now for about a fifth of deaths around the world.
In view of increasing legal interest in holding fossil fuel companies responsible in holding fossil fuel companies responsible, has Woodside considered and documented the magnitude and the scope of likely significant health impacts from air pollution and as well as climate change as an indirect consequence, as noted in NOPSEMA , of projects such as Scarborough?
Thanks, Dr. Yin. I think we're talking.
Yeah. Previously.
Yeah. I think we've answered that. And I think if you look at coal-fired electricity in China and India and countries like that, it dwarfs anything that might be coming from any of our emissions at the moment. So the world's going to be a heck of a lot better off if it moves from coal-fired power to gas-fired power as soon as it can. Thank you. Next question, please.
Mr. Chair, next up, we have Ms. Raelene Cooper. Ms. Raelene Cooper is a proxy holder.
Waiver. Mwandewa. The Woodside Energy people up on the front there and everybody in the room, just to let you guys know, I've heard a lot of stuff here in terms of emissions and these destructive CO2 emissions that are going. I actually live in Karratha. Woodside is in my backyard. And yes, we do see, feel, and smell the destruction. I do.
And if you guys want, I welcome all of you, stakeholders, shareholders, everybody, come and visit Maingora where I belong and come and see what is happening because it's real for me. And it's real for a lot of other people. Anyway, to Ms. O'Neill, good morning. Good afternoon to you. So I guess if anyone hasn't seen or.
Sorry. Can you ask your question, please?
Richard, I'm actually a proxy for somebody. And as a traditional owner and custodian of this place where you have your big gas plant, it would be really nice to be respectful because this is what you say. You listen to us. And you're not actually listening. You'll allow everyone to have a talk. But you won't let me.
I will let you.
If you're respectful, please listen.
You're not going to tell me how to run my meeting, sorry. So will you ask your question? If you're not going to ask your question, I'll move to the next question.
On May 19th, I put a Section 10 out two years ago. The reporter of the Section 10 had forwarded the information that needed to then go to our minister, Tanya Plibersek. All right? So at the end of the day, Friday the 19th, before I even opened my email, it's being put out in the media, my Section 10 report, and every other person that's put their concerns into it for the operations that are happening on Maingora, Mwandewa.
So I'm asking you two things. One, has anyone from Woodside Energy leaked confidential information to the media before your AGM today to maybe give you guys a good heads up that this isn't real? Because this investigation is still not complete. So somebody has leaked out to the media before this AGM, all right, my confidential information and others who were put forward to it.
So I'm asking both you two and the secretary because he hasn't said anything all day. Hi there, you. Is it Woodside that's leaked this out? Because as of this morning, Minister Plibersek has received an email from me to vigorously.
In answer to that question.
And frankly.
In answer to that question.
All right. Can we?
To go and do a normal investigation if. Can we answer that question? I have no knowledge of that. I'm sure Meg has no knowledge of it. If you've got accusations, take them to the appropriate authorities.
But Ms. Cooper, we were in the same situation you were in. We hadn't even opened the email where we had received confidentially the draft report when we received a call from the media. So we share your outrage that a confidential document was leaked. I can give you every assurance that the Woodside team was not responsible.
Thanks, Meg. Thanks.
Thanks, Ms. Cooper.
Yeah.
May I come please?
Yeah. You're on.
Thank you. So it's interesting that there's a few people that have talked about the United Nations. I'm not sure whether stakeholders, shareholders, proxies, anybody in this room. A couple of years ago, myself and my young mum's sister attended the United Nations. Six months later, we received a response from the United Nations. And I'm just going to allow you, if you will, please, to let me read the first half of this. And then I'll ask you a question.
No. I don't want a speech, please. Just ask the question.
So I'll just say it then. All right? So on the 22nd of September, 2022, I got a response back from the United Nations about Woodside Energy and the destruction that it's causing.
So what's the question?
The question is, so you're telling everybody here in this room, your stakeholders and shareholders, all right, why is it that seven rapporteurs, right from environmental to human rights, all right, have put pen to paper and they have serious concerns about Woodside and Perdaman? Now, I'm happy to share any of this information with everybody here. There was a question earlier. I want to know, do you feel comfortable the fact that this letter that I have, that there will be no legal challenges in this?
Because this has come, remember, from six rapporteurs who have signed this document compelling and basically stating that it is that Woodside and Perdaman are, in that they are not following the Paris Agreement, most definitely. There are human rights violations, namely, that are important details that are in this document.
Can you please tell me, how do you feel that this has come from the United Nations, considering several people have stood up and have asked the question, "You are breaching the United Nations Paris Agreement. You are breaching. And the Australian government are breaching its agreement in the United Nations"?
Thank you. And we disagree with those assertions.
Well, much thank you.
Next question, please. Next question, please.
Great place. You know what? It's said on the.
Next question, please.
In the newspaper and the newsroom.
Mr. Chairman?
Yeah.
Mr. Chairman, we have an online question from Mr. Mark James Horner.
Thank you.
I am most supportive of the resolution. I have been particularly impressed by Meg's proactive role in better informing the public of the contribution the company makes to all. In this respect, I was most pleased when Meg added the term regional responsibility to the public narrative. My question invites Meg to add some color to that regional responsibility. To what extent does Japan, for example, rely on supplies of LNG from the company? And in what form does Japan use the LNG, e.g., transitioning industrial production and for heating homes?
Thanks, Mr. Horner. Appreciate the question. Meg can answer. Obviously, clearly, Japan and other of our Asian neighbors rely on our gas significantly. The visits they've made to Australia and the Australian ministers have made to Japan have reinforced that over the last couple of years. Meg, anything you want to add?
We were fortunate to host the former Japanese ambassador to Australia at one of our leadership workshops. He spoke very eloquently about the role of Australia in supporting Japanese energy needs. His numbers were that Australia provides 40% of Japan's LNG. Woodside would be a portion of that. I don't have the number off the top of my head. Our product goes largely to Japan, to Korea, to China.
It's used in a variety of settings. It's used in industrial settings. It's used for power generation. In the big cities like Tokyo, Osaka, it's used to heat homes. So we literally are keeping the lights on and keeping homes warm in the cold Japanese winter. That's something that I'm very proud of. I hope all of you as Woodside shareholders are very proud of.
Thanks, Meg. Next question, please.
Mr. Chair, we have an online question from Mr. Robert and Mrs. Muriel Brown, who write, "What hurdles or barriers do the board see as preventing a sweeping diversification toward non-fossil energy interests?
Again, I think we've dealt with this one pretty comprehensively today. I appreciate the question from the Browns. I think the barriers at the moment are and Meg's referred to this before, there's significant cost for a lot of our customers to change their processes. They will in due course. We will support that. I think we're seeing it's a really interesting question.
I think we're seeing as Meg referred to again earlier, if you look at Queensland, New South Wales, and Victoria, there's still a predominance of their energy supplies from coal-fired power stations, notwithstanding the commitments from those governments to move away from coal. So there are challenges. But the impact of climate change, sheer investment dollars going into new energy, I think will create a positive environment for diversification into non-fossil energy interests. Yeah. Thank you. Next question, please.
Mr. Chair, we have a question from Mr. Lawrence Frederick White. "Why is Woodside proposing any climate action that is not required by law or in response to economic incentives? How is this compatible with delivering long-term shareholder value?
Again, I think we've touched on this generally in different ways today. We want to thrive through the energy transition. We want to help our customers decarbonize. We believe that climate change is real. But we want to do it in a measured way. We think it is going to take some time. It is going to take some mutual trust. It will require a whole response from government, industry, consumers, and not just the Australian government but offshore governments.
And we'll do it in a way that's disciplined so that we can invest your money as shareholders in a way that we have a degree of confidence will give you the returns that you want. But thank you again for the question. Next question, please.
Mr. Chair, I have an online question from Mark James Horner. "With respect to the Climate Transition Action Plan, my question invites the board to add some color around jurisdictional demarcation lines. As I understand the matter, in spite of best efforts of the board to encourage reductions in Scope 3 such as abatement, the ultimate responsibility for Scope 3 emissions sits, Scope 3 emissions reduction sits outside of the company's jurisdiction, unlike Scope 1 and 2.
Yes. So I think that notion is correct, Mr. Horner. We obviously want to help our customers as best we can make the move to reduce their Scope 1 and 2 emissions. And that's outlined in our Climate Transition Action Plan. The most significant thing we can do on emissions is obviously reduce our Scope 1 and 2 emissions. And again, there's a lot of detail in our CTAP on that. But it's a very good point.
Thank you. And as I said earlier, when it comes to other industries in this country, the Scope 3 emissions, which are our customers' Scope 1 and 2 emissions, are not insignificant. Next question, please.
Okay. We have an online question from Mr. Peter John Gregory and Mrs. Jennifer Maria Gregory. "Noting that you expect to have carbon credits as part of your sustainability strategy going forward, can you please share your expectation of the cost of carbon credits over the next couple of years?" Thank you.
Meg?
Yeah. It's a great question. So in our CTAP, we provide and I'm looking for the page. But it's not coming to me right away. We provide information on the cost of carbon credits that we have acquired and originated to date. So that gives you a feel for the historic spend. Part of why we started the carbon business back in 2018 actually was to try to get ahead of the game.
And as the government has changed the rules around the safeguard mechanism, in many ways, that has proven our strategy very sound because there is increasing demand for those Australian carbon credit units. We're very well-positioned. And we've got a team that's very well-organized to ensure that we have the quality of credits we need and continue to keep the price down on those credits.
Thanks, Meg. Was there a question on microphone one?
Yes. Mr. Chair, we have Brett Morgan. Brett Morgan is proxy holder.
Thank you, Mr. Chair. I was going to ask a question about climate scenarios. But esteemed climate scientist Bill Hare is a bit of a hard act to follow. So instead, I want to ask a question about the Scope 3 abatement target, the 5 megatons per annum. So look, this represents just 7.4% of Woodside's 2023 Scope 3 emissions. And that will be even lower as productions and, therefore, emissions increase as well.
Now, back in 2020, half of Woodside's shareholders voted for a Scope 3 emissions reduction target. So my question is, does Woodside seriously think that this measly target is an adequate response to five years of shareholder discontent with Woodside's climate strategy?
Thanks, Mr. Morgan. Firstly, I'd just correct you. It wasn't half the shareholders. It was half the shareholders who voted. So our retail shareholders stayed pretty quiet on some of this stuff, even though they are very, very strong supporters and significant supporters of the company. I think we've just had a long conversation on Scope 3.
And I think that the work we're doing, if we can, between now and 2030, reduce our customers' emissions by that sort of amount, it'll be a not-insignificant contribution to reducing global emissions. Thank you. Next question, please.
Mr. Chair, we have an online question from Mrs. Diana Margaret Maine, who asks, "Given the large protest vote today, will you commit to putting up the climate action plan for approval every year? Similarly, for greater accountability, will you follow BHP's lead and voluntarily put all directors up for election every year? The likes of Rio Tinto, News Corp, and Treasury Wine Estates also do this.
Thanks, Mrs. Maine, for the question. I think we're probably the only corporation in the world that's put a climate plan up for two shareholder votes. So we'll assess after today as a board and management team what we do as we go forward. And we've got no current plans to put directors up for elections each year. Any other questions?
Mr. Chairman, we have Ms. Anna Chapman. Ms. Chapman is a proxy holder.
Good afternoon. There's been a lot of questions on Scope 3. I'll just keep this short. My question is, why hasn't Woodside established a more substantial Scope 3 emissions target to address this significant environmental impact?
Yeah. Thanks, Ms. Chapman. I apologize. You're late up on questions. I think we have pretty much exhausted the feedback on Scope 3. We take your question seriously. I'm not in any way diminishing it. Our Scope 3s are our customers' Scope 1. We are investing and looking forward to investing to help our customers reduce their Scope 1 emissions. Thank you for the question.
Can you increase the ambition?
Can we, sorry?
The ambition of the Scope 3 target?
Well, that's a great question. And I'm glad you asked it because we are ambitious. And as I've referred to earlier, Woodside has a history of being bold and ambitious. But we want to be realistic in the commitments we make. And we want to meet the commitments that we make. So there's a lot of organisations that are talking a big talk but may or may not be able to meet the commitments they make.
We want to meet the commitments we make. And that one is a pretty significant, it's not a commitment. But it's a pretty significant goal. And that's what we're going to try and do. So thank you.
Mr. Chairman, we have Mr. Lochton-Wells. Mr. Lochton-Wells is a shareholder.
No?
No. Have we got any other questions?
Yes, I do. Mr. Chairman, we have Mr. Liam Lilly. Mr. Liam Lilly is a proxy holder.
Two questions. First off, the net climate impact of gas and coal life cycle emissions are highly dependent on methane leakage. The IEA states that methane emissions are underreported by 70% worldwide. New research shows that global gas systems that leak over 4.7% of their methane, when considering a 20-year timeframe, are on par with life cycle emissions from methane leaking coal mines.
Aerial measurement surveys show fugitive methane leakage rates of between 0.65%-66.25% worldwide. The short of it is that when methane leaks are bad, gas can be as climate-polluting as coal. What is Woodside doing to accelerate and improve methane emissions detection, accounting, and management practices across all aspects of its supply chain? And will Woodside, retrospectively, update its own emissions estimates once methane measurement methods are updated?
Secondly, you've argued that there are multiple pathways to net zero and that we shouldn't favor anyone.
If that's the case, why have you picked the scenario that allows for more gas instead of the IPCC median scenario? Are you aware that these scenarios rely on development rates of carbon capture, which the International Energy Agency has labelled inconceivable?
Thanks. I think we've dealt with your second question pretty comprehensively today. On methane, I think we've actually got a good story on methane. But Meg, over to you.
Yeah. We do. So in our business and again, our business is different from many other methane producers. And I think that's important to note. A lot of gas production is onshore with high well counts, lots of small bore piping, lots of fittings. So there are methane operations in parts of the world or natural gas operations that have greater risk of leak. In our business, with offshore platforms and LNG plants, a gas leak is a process safety hazard.
And it is one of the most critical safety hazards for us to manage. We report our methane emissions consistent with the methodology provided by the Australian government. But to supplement that, we do extensive methane surveys and methane leak detection work to ensure that we are meeting those standards and catching any leaks early. We've shown leadership in the methane space.
We've been a member of the methane guiding principles for a number of years now. And we've taken a leadership role, particularly in Australia and working with the value chain, pipeline operators, and downstream users on things that they can do to reduce methane slip in their business. So I actually feel really good about where we are with methane. We can't ever let our guard down. But we are very focused on ensuring that methane stays in the pipes. And we manage that risk to people and environment.
Thanks, Mr. Lilly. I'm now going to put item 6 to the meeting. If you've not already done so, please submit your vote on item 6 now. There's not a lot of people left in the room. The proxy and direct votes received before the meeting on this resolution are displayed on the screen. That now covers the formal business of the meeting. The voting system will close shortly. Please ensure that you've cast your vote on all items.
Ladies and gentlemen, I now formally close the poll. The provisional votes you will shortly see on screen will be the combined votes, the results of the votes cast by shareholders present today, and those previously submitted by proxy. Computershare will undertake an audit of the results. The final results of the voting on all resolutions will be available and released to the ASX after the meeting.
The provisional results should be coming up on the screen shortly. There we go. As you can see, the provisional results show that each of resolutions 2A, 2B, 3, 4, and 5 have passed. Advisory resolution 6 has not received the support of a majority of shareholders. Ladies and gentlemen, on behalf of the board and staff of the company, thank you for your participation today. We welcome the positive results for the majority of resolutions.
As foreshadowed earlier, the Climate Transition Action Plan has not received majority shareholder support. Naturally, we're disappointed but respect the result. I'd like to thank our shareholders for their extensive engagement on this vital issue. The vote reflects the challenges and complexities of the energy transition. Today's outcome is one we take very seriously. The board will reflect closely on the result and continue to engage with shareholders as we progress our strategy.
Thank you again. I now declare the meeting closed. Thank you.