REG - Woodside Energy Grp. - AGM Address by Chair R. Goyder and CEO M. O'Neill

Woodside EnergyAnnouncement

28/04/2023 07:00

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RNS Number : 7936X  Woodside Energy Group Ltd  28 April 2023

Woodside Energy Group Ltd

ACN 004 898 962

Mia Yellagonga

11 Mount Street

Perth WA 6000

Australia

T +61 8 9348 4000

www.woodside.com

 

ASX: WDS

NYSE: WDS

LSE: WDS

 

Announcement

 

Friday, 28 April 2023

 

 

AGM ADDRESS BY CHAIR RICHARD GOYDER AND CEO MEG O'NEILL

 

In accordance with the Listing Rules, please see attached announcement
relating to the above, for release to the market.

 

In addition, the AGM presentation has been submitted to the FCA National
Storage Mechanism and will shortly be available for inspection at:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism)

 

 

 

 

 Contacts:

 INVESTORS                  MEDIA

 Matthew Turnbull (Group)   Christine Forster

 M: +61 410 471 079         M: +61 484 112 469

                            E: christine.forster@woodside.com

 Sarah Peyman (Australia)

 M: +61 457 513 249

 Rohan Goudge (US)

 M: +1 (713) 679-1550

 E: investor@woodside.com

 

This announcement was approved and authorised for release by Woodside's
Disclosure Committee.

 

 

 

 

 

 

 

 

 

 

Forward looking statements

 

Disclaimer and important notice

 

This announcement may contain forward-looking statements with respect to
Woodside's business and operations, market conditions, results of operations
and financial condition which reflect Woodside's views held as at the date of
this announcement. All statements, other than statements of historical or
present facts, are forward-looking statements and generally may be
identified by the use of forward-looking words such as 'guidance',
'foresee', 'likely', 'potential', 'anticipate', 'believe', 'aim', 'estimate',
'expect', 'intend', 'may', 'target', 'plan', 'forecast', 'project',
'schedule', 'will', 'should', 'seek' and other similar words or
expressions.

 

Forward-looking statements are not guarantees of future performance and are
subject to inherent known and unknown risks, uncertainties, assumptions and
other factors, many of which are beyond the control of Woodside, its related
bodies corporate and their respective officers, directors, employees, advisers
or representatives. Details of the key risks relating to Woodside and its
business can be found in the "Risk" section of Woodside's most recent Annual
Report released to the Australian Securities Exchange and in Woodside's
filings with the U.S. Securities and Exchange Commission, including Woodside's
Annual Report on Form 20-F. You should review and have regard to these risks
when considering the information contained in this announcement.

 

Investors are strongly cautioned not to place undue reliance on any
forward-looking statements. Actual results or performance may vary materially
from those expressed in, or implied by, any forward-looking statements.

Woodside Energy Group Ltd.

2023 Annual General Meeting

Friday, 28 April 2023

 

Chair Richard Goyder

Good morning. My name is Richard Goyder and, as Woodside's Chair, I would like
to thank shareholders, Woodside staff and guests for attending today's
meeting, both in person and on-line.

 

Before we commence, please take a few seconds to familiarise yourselves with
the evacuation procedures shown on the screen above which would apply in the
unlikely event of an emergency.

 

Following Woodside's merger last year with BHP's petroleum business, we have
evolved into a truly global company. But our headquarters remain right here in
Perth, on Whadjuk Noongar country.

 

With this in mind, I would like to acknowledge the Whadjuk people of the
Noongar nation as the traditional owners of the land on which we meet today,
and pay my respects to Elders past, present and emerging. I recognise their
continuing connection to culture and contribution to this city that Woodside
is proud to call its home.

 

The invaluable contribution made by the Noongar people in this region of WA,
conserving and caring for the land on which we live and work each day, is
something I am personally thankful for, having grown up on Noongar country in
the small towns of Tambellup and Broomehill.

 

I also recognise the many traditional custodians that protect and preserve the
rich cultural heritage in areas where Woodside's operations are located -
particularly the Ngarda-Ngarli people as the collective custodians of
Murujuga, where Woodside has operated for almost 40 years.

 

As we move towards a referendum on the Indigenous Voice later this year, I
also highlight Woodside's strong support for the Uluru Statement from the
Heart, and our continued commitment to listen closely to, and learn from,
Indigenous voices.

 

Our Annual General Meeting is an event that the Board looks forward to every
year, as it gives us a chance to hear directly from our shareholders and
respond to your questions.

 

You will have an opportunity to ask questions or make comments during formal
business, however I encourage those shareholders joining us virtually, who
wish to submit a written question or comment, to begin doing so now. This will
enable the timely receipt of these questions.

 

You can do this via the same platform you are already using to view this
webcast, by following the instructions shown on the slide. Select the
messaging tab, select the category your question relates to and type your
question in the 'Ask a question' box and select the send arrow.

 

I will summarise the process for submitting verbal questions online, and for
asking questions from the floor, before we begin the formal business section
of today's meeting.

 

I'm joined on stage this morning by Chief Executive Officer and Managing
Director, Meg O'Neill, and Company Secretary, Warren Baillie.

 

In the room with us are Directors Larry Archibald, Frank Cooper, Swee Chen
Goh, Ian Macfarlane, Ann Pickard, Gene Tilbrook, Ben Wyatt, Chris Haynes,
Sarah Ryan, and Arnaud Breuillac. Also joining us is Angela Minas who, subject
to shareholder approval, will join the Board with effect from the conclusion
of today's meeting.

 

Arnaud and Angela will introduce themselves to you during the formal business
section of today's meeting, when they stand for election. Both bring a wealth
of industry, financial and other relevant experience that will make them
valuable members of the Woodside Board.

 

Last month Chris and Sarah announced their retirement as Directors of
Woodside, and they are standing down from their positions at the conclusion of
today's meeting. I would like to sincerely thank Chris and Sarah for their
outstanding service to the Board, and their significant contribution to
Woodside's success over the past decade.

 

Justin Carroll and Anthony Hodge, representing our auditors
PricewaterhouseCoopers, are also present today.

 

A reminder as always that Woodside reports its 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 with
respect to various matters including Woodside's 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.

 

On behalf of the Board, I am pleased to update you on a historic year for
Woodside, which saw us complete the merger with BHP's petroleum business,
deliver record profit and become an even more significant supplier of energy
to the world.

 

Through our diverse global portfolio we are providing the energy to heat and
cool homes, keep lights on and support industry in more places than ever, the
value of which has been reinforced by events of the past year.

 

Reflecting on Woodside's significant achievements in 2022, we can see that the
benefits of the merger have been immediate. Strong operational performance
from our enlarged portfolio allowed us to capitalise on sustained high oil and
gas prices across the year. This led to a record annual net profit after tax
of $6.5 billion, an increase of 228 percent on 2021. Underlying NPAT was $5.2
billion, providing us with a strong balance sheet that positions Woodside for
major capital investment in future years, while returning value to
shareholders.

 

Earnings per share more than doubled in 2022 to 430 US cents, while our total
full-year dividend of 253 US cents per share was an 87 percent increase on the
previous year. Our maintenance of an 80 percent payout ratio in 2022 meant
that we returned $4.8 billion to shareholders at a full-year yield of more
than 10 percent.

 

Our record profit in 2022 also means we are delivering strong returns through
our payments to governments in Australia. Our total Australian tax and royalty
payments of A$2.7 billion in 2022 demonstrate that when Woodside and our
industry performs well, our contribution to government revenue is significant.

 

I am very proud to Chair a company that is delivering these outstanding
returns to our shareholders and the broader community while continuing to
invest in the oil, gas and new energy projects that are laying the foundations
for Woodside to thrive through the energy transition.

 

In November 2021 the Board took the decision, on behalf of our shareholders,
to invest $12 billion US dollars in the Scarborough and Pluto Train 2 projects
in Western Australia.

 

Construction of these projects is progressing well, and we are on target for
first LNG cargo in 2026.

 

We were only able to make the decision to invest in Scarborough and Pluto
Train 2 because of the fiscal and regulatory certainty that Australia has
always offered in the past.

 

We will only be able to make future decisions to invest in both significant
new gas projects and the new energies such as ammonia and hydrogen that will
power our future, if that fiscal and regulatory certainty is maintained.
Otherwise, we expose our shareholders' capital to unacceptable risk.

 

Internationally, we are making good progress on the Sangomar project offshore
Senegal, and remain on track to deliver first oil later this year. We are also
working towards readiness for final investment decisions this year on the
Trion oil project offshore Mexico, and the H2OK hydrogen project in Oklahoma.

 

Meg will provide further updates on these major projects, and our strong
operational performance at producing assets across Woodside's expanded
portfolio. On behalf of the Board, I would like to thank the entire Woodside
team who delivered these excellent results in 2022.

 

The troubling geo-political events of the past year, and resulting volatility
in global energy markets, have highlighted the importance of a stable energy
transition in which energy is affordable, reliable and lower carbon. This
drives Woodside's strategy to continue building a low cost, lower carbon,
resilient, diversified and profitable portfolio that can provide energy to the
world, and deliver long-term value for shareholders, across different energy
transition scenarios.

 

The projects that we progressed during 2022, which I just mentioned, reflect
this diversity of location and product mix. And this is also a feature of
Woodside's next wave of growth opportunities, including expansion of existing
fields in the US Gulf of Mexico, development of major gas fields such as
Calypso, Browse and Sunrise, and execution of new energy and lower carbon
opportunities including hydrogen and ammonia, solar, and carbon capture
utilisation and storage.

 

Through continued development of this diverse portfolio, underpinned by
consistently strong financial and operational performance, Woodside can
maximise our prospects for long-term success against the backdrop of an
uncertain energy transition. Our strategy allows us to remain flexible and
adaptable to the needs of our customers as they determine their own
decarbonisation pathways.

 

We have set out Woodside's assessment of the energy transition, and our
strategy to successfully navigate it, in our 2022 Climate Report. The report
outlines the reasons for the Board's confidence in ongoing robust demand for
Woodside's products in a lower-carbon future. In particular, the important and
ongoing role that gas will play in supporting the world's decarbonisation
goals, by replacing coal as a source of power generation and providing firming
capacity to support intermittent wind and solar.

 

Throughout the year we engaged and listened to our shareholders to further
understand their expectations about our climate-related strategy and
disclosures, and we've taken those into account in preparing this year's
report.

 

While our assessment and strategy remain consistent, we have provided
additional detail requested by shareholders on how we plan to reduce emissions
from our operations, manage our use of carbon credits appropriately, consider
future investment options in the context of climate change, and our approach
to Scope 3 emissions.

 

The Board recognises the ongoing strong interest of our shareholders in
Woodside's climate strategy and intends to put our climate reporting to a
non-binding, advisory vote of shareholders at our 2024 Annual General Meeting.
Subsequent shareholder votes will be held at three-year intervals, unless
there are exceptional circumstances.

 

Rest assured we will continue to proactively engage with shareholders on our
reporting and management of climate-related risks and opportunities.

 

Before I hand over to Meg, I would like to thank her for the outstanding
contribution she has made as Chief Executive Officer over the past two years.
Supported by her executive team, Meg's leadership has seen Woodside reach new
heights of success. Her ability to drive day-to-day excellence while also
providing the vision and inspiration needed for Woodside's long-term success
continues to impress those inside and outside the company.

 

My thanks also to all of my Board colleagues, who have provided valuable
guidance and counsel throughout a very successful year for Woodside.

 

And finally, to all our shareholders, the Board greatly appreciates your
ongoing support. Just under a year ago, you voted overwhelmingly to endorse
our proposed merger with BHP's petroleum business. It was clear you shared the
Board's view that the merger provided Woodside with a golden opportunity to
secure a successful long-term future for our company.

 

Almost twelve months on, there is strong evidence that shows this to be the
case. We are pleased to be delivering you strong returns from a quality and
diverse global portfolio, while charting a path for Woodside's success through
the energy transition that we are confident you will want to be a part of.

 

I'll now hand over to Meg. Thank you.

 

CEO and Managing Director Meg O'Neill

Thank you Richard. And thank you to our shareholders for attending in person
and on-line this morning.

 

It is a pleasure to update you on another successful year for Woodside in
which we completed our transformational merger with BHP's petroleum business,
delivered record profit and production from our quality global portfolio,
further strengthened our balance sheet, and made good progress on our major
growth projects.

 

Following the overwhelming shareholder support for the merger at last year's
Annual General Meeting, we worked hard to complete the merger on 1 June and
quickly brought the best of the two businesses together. We put in place our
new leadership team, refreshed our culture and re-designed the organisation to
operate more efficiently as a global business across multiple time zones. We
also listed on the London and New York stock exchanges, increasing our access
to global capital markets. Almost one year later, we have evolved into a truly
global company with a very strong future ahead.

 

I'm very proud of our teams who were able to implement this significant change
while maintaining excellent financial and operational discipline. Beyond the
impressive headline profit numbers, we delivered strong financial returns
across the board. Operating revenue increased 142 percent to $16.8 billion,
free cash flow increased more than six-fold to $6.5 billion, and we maintained
low levels of net debt and gearing well below our target range. We also
achieved the goals we set ourselves ahead of the merger, delivering
initiatives expected to realise over $400 million per year of post-merger
synergies.

 

Our excellent financial results were driven by a significant increase in
production to 157.7 million barrels of oil equivalent, a result of last year's
merger and strong operational reliability of 98.5 percent at our LNG
facilities. We focused our trading and marketing activities on opportunities
that maximised returns from our expanded production.

 

Stepping through our producing assets in more detail, in Western Australia we
achieved steady state operations at the Pyxis and Pluto North subsea tiebacks
early in the year, adding to production at the Pluto LNG facility. The Greater
Western Flank Phase 3 and Lambert Deep infill projects started up ahead of
schedule, helping the Karratha Gas Plant continue to operate at near full
production rates in 2022.

 

A highlight of the year was the successful start-up of the Pluto to KGP
Interconnector pipeline, resulting in 13 additional LNG cargoes during the
year using emerging spare capacity at KGP. The Interconnector marks the
beginning of a new chapter for our North West Shelf project, as a processor of
third party gas to extend its operating life as legacy fields decline.

 

On the east coast of Australia, Woodside became a significant supplier of gas
through our acquisition of a non-operated stake in the Bass Strait Joint
Venture. When a supply crunch hit this market in mid-2022 due to coal-fired
power outages and a drop off in renewables, Woodside played its part by
delivering as many molecules of its Bass Strait gas as possible to customers
who needed it.

 

Internationally, we added more than 20 million barrels of oil equivalent from
assets in the US Gulf of Mexico and Trinidad and Tobago, which came into
Woodside's production portfolio following the merger. The contribution to our
overall production from these assets will increase significantly in 2023,
based on a full 12 months of operations. This includes additional volumes from
the Mad Dog Phase 2 project, which commenced production earlier this month.

 

Turning to our growth projects, the Scarborough and Pluto Train 2 projects
combined are now 30 percent complete and remain on track for targeted first
LNG cargo in 2026. Highlights over the past year include the start of
fabrication on the offshore production unit topsides, the start of pipeline
manufacturing, and completion of the first phase of the Pluto Train 2
construction accommodation village in Karratha.

 

The 20-year gas sale and purchase agreement with Perdaman that became
unconditional this week was a significant milestone. Gas for Perdaman's
proposed urea plant would be primarily sourced from Scarborough. This
agreement demonstrates the benefits that Scarborough and Pluto Train 2 can
bring to Western Australia, in this case supporting new industry and jobs in
the Pilbara region.

 

Of course, the Scarborough and Pluto Train 2 projects themselves will directly
create thousands of jobs locally and deliver significant revenue to state and
federal Australian Governments. We look forward to these benefits really
starting to flow across the next couple of years as onshore and offshore
construction ramps up.

 

As Richard mentioned, we are expecting first oil later this year at our
Sangomar project offshore Senegal. Ten of the planned 23 wells are now
complete, and commissioning of the floating production storage and offloading
facility is underway in Singapore.

 

We are targeting FID-readiness in 2023 on the Trion oil project offshore
Mexico, having completed front-end engineering design activities, issued
tender packages for competitive bids and taken forward regulatory approval
submissions.

 

In our new energy business, we are making excellent progress on the H2OK
hydrogen project in Oklahoma. We completed front-end engineering design in
2022, and late last year awarded contracts for electrolysers and liquefaction
units to be installed at the facility. This has us well positioned for
FID-readiness this year.

 

Also this year, we are targeting a final investment decision at our Woodside
Solar project in the Pilbara, which could make an important contribution to
our plans to decarbonise the Pluto LNG operations. This facility could supply
100 megawatts of solar energy to Pluto LNG and other customers located near
Karratha, with potential expansion to a maximum of 500 megawatts.

 

The global energy security and affordability crises that unfolded in 2022
highlighted the challenge we all face as we strive to maintain and improve
global standards of living while reducing our emissions.

 

While there is considerable uncertainty over how the energy transition may
unfold in the decades ahead, we can be confident that global energy demand
will continue to grow, as the more than one billion people without access to
reliable and affordable energy pursue the same quality of life that we enjoy.

 

That demand, and the role gas can play as a lower carbon source of the energy
the world needs, underpins our confidence in the long-term strength of our
business.

 

As I outlined in my speech to the National Press Club last week, the natural
gas produced by Woodside can support three important, interrelated goals:
providing affordable and reliable energy for Australians; maintaining
strategic partnerships and energy security in our region; and progressing
global decarbonisation.

 

Gas is not the only answer to achieve these goals. But it is, and will
continue to be, an essential part of the equation.

 

At home, gas is a flexible source of energy that provides stable baseload
power generation, smooths the transition to renewables and is an enabler for
industry and manufacturing.

 

And abroad, by generating electricity with around half the life cycle
emissions of coal,  gas is helping keep the lights on in the mega-cities of
our most important regional partners, while also supporting their national
decarbonisation goals.

 

This essential, ongoing role for gas in the energy mix is why Woodside
continues to engage with the Australian Government on policies that support
affordable and reliable energy for households and business, while supporting
continued investment in new gas supply and infrastructure.

 

If we don't get these settings right, there is a real risk that energy
development will stall and Australia will miss out on the benefits. Not only
in terms of energy supply and economic development, but also the scale and
pace of our renewable ambition.

 

As Woodside takes forward our growth opportunities, we do so in line with
commitments under our Climate Strategy to reduce our net equity Scope 1 and 2
emissions, and invest in the new energy products and lower carbon services our
customers require to secure their energy needs and reduce their emissions.

 

As set out in our 2022 Climate Report, we are on track to meet our 2025 and
2030 emissions reduction targets of 15% and 30% respectively, towards an
aspiration of net zero by 2050 or sooner. In 2022, Woodside's net equity Scope
1 and 2 greenhouse gas emissions were 11% below the starting base, which was
adjusted following the merger with BHP's petroleum business. Methane emissions
were around 0.1% of our production by volume, and during 2022 Woodside became
a signatory to the Aiming for Zero Methane Emissions initiative.

 

At the core of Woodside's Scope 3 emissions strategy is our target to invest
$5 billion in new energy products and lower carbon services by 2030. We have
to date spent more than $100 million in this area, primarily on our H2OK
project. Also during 2022 we supported a number of initiatives to promote
emissions reduction by our customers and suppliers, and enhance global
measurement and reporting of Scope 3 emissions.

 

Climate change is one of many considerations that drive our commitment to
strong environmental, social and governance performance. As our business
continues to evolve, so do our ESG focus areas and we will adapt accordingly
through our approach to sustainability and reporting.

 

The health and safety of our people is our highest priority, and it was
pleasing that across our global business in 2022 we recorded no Tier 1 loss of
primary containment process safety events, although we did record one low-risk
Tier 2 event.

 

Our injury performance, however, continues to be challenged. Our total
recordable injury rate of 1.80 per million hours worked remains above our
target of 1.0. We know we need to improve and we are making progress. Our
focus is on safety culture, leadership and applying human and organisational
performance principles to help us learn and return to leading safety
performance.

 

Partnering with First Nations communities to create positive outcomes that
leave a lasting legacy also remains one of Woodside's foremost priorities.
Highlights for the year included successful negotiations with Ngarluma
Aboriginal Corporation for an Indigenous Land Use Agreement to support the
proposed Woodside Solar Project, and approval of the Scarborough project
Cultural Heritage Management Plan following extensive consultation with
Traditional Custodians. We continued to fund air monitoring on the Burrup
Peninsula in support of the Murujuga Rock Art Strategy, and provide support
for Murujuga's World Heritage Listing.

 

As Richard mentioned earlier, Woodside has an enduring commitment to listen
closely to, and learn from, Indigenous voices. In this spirit, we have
publicly declared Woodside's support for recognising Indigenous Australians in
the Constitution and establishing a Voice.

 

Yesterday we announced that we have appointed Liz Westcott as Executive Vice
President Australian Operations.

Liz had a distinguished 25-year career at ExxonMobil working in Australia, the
United Kingdom and Italy before joining Energy Australia in 2018, where her
most recent role was Chief Operating Officer.

I am delighted that Liz is joining Woodside. Her extensive upstream experience
is complemented by knowledge of the power generation and retail sectors. I
would also like to thank Mike Price for his leadership of the Australian
Operations team over the past five months.

 

Before handing back to Richard, I would like to echo his appreciation for our
shareholders, and their support for the strategy that Woodside's Board and
executive leadership team are implementing.

 

The faith you showed in backing last year's merger has already been rewarded
the financial strength, operational excellence and attractive growth
opportunities we have outlined today. The opportunity now in front of us is to
springboard off a very successful 2022 and take Woodside's future prospects to
another level, building a company that will thrive through the energy
transition and deliver value to our shareholders for many years to come.

 

Thank you.

 

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