24.02.2010 annual report 2009.pdf - Woodside

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2 Title Mission statement and strategy Value Woodside’s strategy Foundation business Time LNG growth Complementary business In June 2009 the Board of Directors reviewed Woodside’s long-term strategy and confirmed the importance of maintaining the existing strategic direction and delivering against the LNG growth plan. Woodside continues to focus on improving its foundation business and delivering long- term growth in shareholder value through development of the Australian liquefied natural gas (LNG) portfolio. Mission, Vision and Values Mission To create and deliver outstanding, sustained growth in shareholder wealth by providing energy for the future. Vision To be a world-class LNG leader. To accomplish this, we need to be the company of choice through speed, execution skills, commercial acumen, cost focus and technical capability. Through our people and our values we will satisfy our shareholders and deliver a sustainable future. Successful Pluto Jacket launch about 190 km north-west of Karratha in October 2009 Woodside’s foundation Australian business includes the producing assets in the North West Shelf Venture (NWSV) and Greater Exmouth area. These are complemented by producing assets elsewhere in Australia and the Gulf of Mexico. By maximising the returns from these assets Woodside will meet its financial obligations and contribute funds to support the company’s growth ambitions. To further maximise the value of the investment in these existing assets Woodside will also pursue selective exploration and development opportunities. Continued operation of these facilities to appropriate safety, environmental and stakeholder standards will maintain Woodside’s licence to operate. Longer term growth in Woodside’s value and its overall future will be shaped by LNG. The company’s significant natural gas assets and infrastructure in Australia Values • • • • • • Strong and sustainable performance Care and respect Integrity and trust Initiative and accountability Creativity and enterprise Working together We recognise that our business must be profitable and sustainable. We believe that living these values makes Woodside distinctive and is essential to our success. provide unparalleled opportunities within an industry struggling to access an ever depleting resource base. With increasing global demand for energy, driven by the continued growth of the Asian economies, we believe Woodside is well positioned to capitalise on new opportunities in emerging LNG markets. Delivery of the Pluto foundation project will support future LNG growth opportunities through expansion of Pluto and the development of Sunrise and Browse. Maintaining momentum on these projects will continue to build Woodside’s internal LNG capabilities and ensure access to the necessary external resources. A complementary business theme will be retained to provide options for future business through selective exposure to exploration outside of Australia. Woodside Petroleum Ltd | Annual Report 2009
Chairman’s overview The quality of our people at all levels allows us to look to the future with confidence The year 2009 may well be remembered, at least in Australia, as one in which the liquefied natural gas industry captured the public’s imagination. With large numbers of conventional and non-conventional LNG projects around Australia at various stages of development, the industry stood out as a hive of activity at a time many other sectors of the economy were in recession as a result of the global financial crisis. Members of the public could easily be excused for thinking the LNG industry is new to Australia. On the contrary, in 2009 Woodside celebrated 20 years of production of LNG from the North West Shelf Project, during which time we have loaded more than 2800 cargoes. This anniversary served as a pertinent reminder of our company’s pioneering role in the industry. The release during the year of a report on the economic impact of the North West Shelf, timed to coincide with 25 years of pipeline gas production and 20 years of LNG production, illustrated the enormous contribution this project has made to Australia. According to the report, the North West Shelf has contributed $70 billion to the nation’s gross domestic product. Annual federal, state and local government revenues are in the order of $5 billion a year. Today, Woodside has a presence across the development timescale of LNG projects. At the North West Shelf, we have an extensive track record as a proven, reliable and safe operator with an international reputation to match. At Pluto, we are close to completing the construction of our first LNG train and have entered the front-end engineering and design phase for an expansion of the project. At Browse and Sunrise, we have the opportunity to further significantly enhance our LNG portfolio. Both of these developments made strong progress in 2009. This time last year I commented that, even during periods of economic downturn, good businesses should remain profitable. The past year demonstrated Woodside’s robustness in this regard. In spite of the economic difficulties, the company recorded a profit of $1.82 billion, 2% higher than that earned in 2008 during a period of record oil prices. The Board of Directors declared a fully franked final dividend of 55 cents per share, resulting in a full-year dividend of 110 cents per share. We go into 2010 with a healthy balance sheet, having received strong support from banks, the bond market and, in our recent rights issue, equity investors. Woodside is in a sound financial position. On the political front two issues continue to be of particular concern to the board. At the time this report was published, the fate of the Commonwealth Government’s proposed Carbon Pollution Reduction Scheme remained unknown. While we recognise the significant improvements made to the scheme since the Green Paper was released in July 2008, Woodside has been vocal in pointing out that placing a carbon price on Australian LNG will put our industry at a disadvantage relative to any international competitors who are not similarly burdened. To the extent that this results in our potential customers continuing to use carbonintensive fuels rather than cleaner LNG, it will result in a net increase in greenhouse emissions. Michael Chaney, AO Michael has been on Woodside’s Board since 2005 and Chairman since 31 July 2007. Secondly, we remained concerned about the prospect of increased industrial disruption in our industry following the enactment of new Commonwealth workplace legislation. The Australian LNG sector has enjoyed relative workplace harmony for several years and this has been a central factor in developing and maintaining our reputation internationally as a reliable supplier. Any change to this risks damaging the sector’s standing with customers. As we celebrated 20 years of North West Shelf LNG production, we were pleased during the year to take the opportunity to name our first Woodside-branded LNG ship the 'Woodside Donaldson', in honour of Geoff Donaldson, whom many would regard as the father of the company. Geoff chaired Woodside from soon after its creation in 1954 until he retired 28 years later. At 96 years old he has reason to be proud of the company’s status as a successful, independent Australian oil and gas company. I take this opportunity to thank all our employees, led by Chief Executive Officer Don Voelte, for their efforts on behalf of the company; and I thank my fellow directors for their ongoing dedication and support. The quality of our people at all levels allows us to look to the future with confidence. Overview 3
Page 1 and 2: Annual Report 2009
Page 3: Performance at a glance Production
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2009 Financial Report Contents Inco
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2009 $m Statement of comprehensive
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In accordance with a resolution of
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Number of shareholdings There were
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Key announcements 2009 JANUARY Wood
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quick reference guide Africa 11 Air
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10 year comparative data summary Ye
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