Woodside Energy Group Ltd (WDS) Earnings Call Transcript & Summary

Good afternoon. My name is Richard Goyder. And as Woodside's Chairman and on behalf of the Board, I'd like to welcome you to the 2020 Annual General Meeting. I was speaking to you from Perth and would like to begin by acknowledging the traditional owners of this land, the Whadjuk Noongar people and pay my respects to their elders past, present and emerging. This AGM is unlike any we've held before. We've adopted our procedures in light of the COVID-19 pandemic to practice social distancing and play our part in slowing the spread of the virus. This meeting is being held with the assistance of video and teleconferencing technologies that will allow shareholders to submit questions during the meeting. We may have the odd glitch, but bear with us if that's the case. I thank you all for logging in and tuning in. I'm sorry that we don't have the opportunity to mix and engage this year, but I'm sure you'll understand how vitally important it is that we all change our behaviors for a while. We'll talk today about the changes we've implemented as a company as we've worked to protect the health of our staff and community, whether in Karratha, Perth or our international offices. Safety is at the core of our company's culture, and we responded quickly to the threat posed by COVID-19. Despite the restrictions on gatherings, we wanted to keep this appointment with shareholders. The AGM is an incredibly important occasion in our company's calendar and one 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. CEO, Peter Coleman, and I are here in Perth, along with Company Secretary, Warren Baillie; and Chief Financial Officer, Sherry Duhe, appropriately socially distanced. Our directors, unfortunately, are unable to travel to be here, but they are joining us via the webcast. So can I welcome Larry Archibald, Frank Cooper, Swee Chen Goh, Chris Haynes, Ian MacFarlane, Ann Pickard, Sarah Ryan and Gene Tilbrook. We'll hear messages shortly from Ian MacFarlane and Larry Archibald, who are seeking reelection; and from Swee Chen Goh, who joined the Board in January and is seeking election. Present on the call is Trevor Hammond, representing our auditor, Ernst & Young. I confirm that a quorum is present by virtue of the proxies I hold as Chair, and I now formally declare the meeting open. Just a reminder that as Woodside reports its results in U.S. dollars, any reference to dollars this afternoon will be in U.S. currency unless stated otherwise. As notified to the ASX, all resolutions today will be decided on a poll based on proxies that were submitted before the meeting. Lisa Ahwan from the company's share registry, Computershare, has agreed to act as returning officer for the poll. The poll will be scrutinized by representatives from Ernst & Young, the company's auditors. I now declare the poll open, and I will vote all directed proxies in accordance with the directions provided by shareholders. As advised in the Notice of Meeting, I'll also vote all available undirected proxies in favor of Items 2(a) to 3 inclusive and against Item 4(a), which was requisitioned by a group of shareholders. I have been informed that Resolution 4(a) will not be passed by the 75% majority required for a special resolution. Accordingly, it is not necessary to vote on Resolutions 4(b), (c) and (d). However, questions in relation to those items will be allowed in the Q&A for Resolution 4(a), and we will then display on the screen proxy and direct votes that were received before the meeting on these resolutions. I now declare the poll closed. The formal results of the poll will be notified to the ASX after the meeting and will be posted on the Woodside website, and I'll display the voting outcome for each item of business after the online Q&A about that item. I'd now like to outline the procedures for questions at this meeting. As this is a shareholders' meeting, only shareholders, their attorneys, proxies and authorized representatives are entitled to ask questions. Questions can be submitted via the questions icon on your screens. Thank you to those who have already submitted questions in advance. If you have a question prepared today, please submit it now, so that we can answer as many questions as possible when I come to the relevant agenda or item. I ask you to please limit yourself to no more than 2 questions. All questions should be addressed to me as Chair. Please start your question with the resolution number to which it relates and provide your affiliation if you are not here today in your personal capacity. I expect there are a lot of different issues to be discussed today. We want to hear from as many shareholders as possible. So I ask you to keep your questions brief and avoid repeating issues that have already been covered. Now let me start by talking about our company's performance in 2019 and how the work we've been doing in preparation for a growth phase sets us up for the challenges we are now facing. As you know, in 2019, we achieved an underlying net profit after tax of $1.063 billion and reported net profit after tax of $343 million, reflecting the impairment of the Kitimat LNG asset. Importantly, we generated operating cash flow of $3.3 billion, indicating the underlying strength of our base business. We continue to deliver value for shareholders with a final dividend of USD 0.55 per share, representing a payout ratio of 80% of underlying profit. Our annual dividend was USD 0.91 per share. Our disciplined approach to capital management has positioned us well to respond to the extraordinary circumstances that have unfolded around the world in recent months. A paradox of this pandemic is that it shows just how connected we all are. Even as it forces us physically apart, the challenges are much bigger than any individual, and we need to face them together. We know many people are doing it tough. I want to assure you that we are acting to protect your company for the long term, and we're also doing our bit for the community. To protect our business, we rapidly adopted an operating model that minimizes contagion risk and ensures we can continue to provide the natural gas that is crucial to West Australians' energy supply and to our customers globally. As I've said already, safety is of paramount importance to us. In fact, last year, we recorded our best-ever personal safety outcome, which was a credit to all our staff and contractors. Faced with the challenges of COVID-19, the response for our people has been fantastic. They have adapted to changed rosters and ways of working, whether at our facilities in Karratha or our corporate headquarters here in Perth, where most of our staff have spent time working from home. Woodside does a lot of preparation for crisis response. And although a pandemic of this scale is not something the company had drilled for, we had the right processes and people in place to respond and manage impacts on our business and our community. We've set up a AUD 10 million community fund, which is already providing support to Lifeline WA, Foodbank WA, Orange Sky and the Salvation Army in Karratha. These community groups play an important role even at the best of times. And at times like these, their roles become even more crucial. This targeted support is in addition to our existing commitments in the community. There have been difficult decisions for everyone along the way, but, by working together, we're trying to get the best outcomes for all our stakeholders. We have expedited payment terms for small, local and indigenous businesses, bringing forward millions of dollars in payments. We're also working closely with our contractors to mitigate impacts on their businesses and their employees. We've had positive feedback from contractors like the NEMMS JV, an indigenous contract in Karratha, and Matera Electrical, that this close engagement is helping them get through this difficult time. We recognize that our business relies on many others in the community who, in turn, are reliant on us. We are doing what we can to protect not only our business, but also our community. We're able to take these steps because we entered this period of uncertainty with a strong balance sheet. But the challenges are significant and all the more pressing for our industry because we are facing simultaneous supply and demand shocks from COVID-19 and oversupply of crude oil and LNG, influenced by geopolitical forces beyond control. Woodside has prudently managed those things that are within our control to identify a pathway through these challenges. For the past 2 years, we've been preparing our balance sheet for a growth phase of higher capital expenditure. Now we've been able to adapt to our plans to these new circumstances, delaying major growth projects in Western Australia and halving our forecast expenditure for the year. As I've said before, the #1 rule in business is never run out of cash and make sure your balance sheet is strong. On these measures, Woodside is in good shape. Of course, under more normal circumstances, we'd have liked to have spent this meeting updating you on the progress on our proposed Burrup Hub projects and the momentum building to final investment decisions. But it is, in fact, fortunate that we've not yet sanctioned those projects. That gives us flexibility. We've delayed until 2021 a target file investment decision on developing the Scarborough Gas Field and expanding the Pluto LNG facility. We've also deferred a decision on developing the Browse resource. Delaying these projects was the right decision, but when the timing is right, we'll be ready to proceed. The economy will certainly be in dire need of projects that involve investment and jobs, and the world will need the reliable and cleaner energy offered by natural gas. Over the past year, I've met with all our large shareholders. I'd like to thank each of them for the open and transparent way we have been able to conduct in our conversations. Many of those conversations have begun with discussions about climate change and our role in responding to it. This is not just an issue for companies, but also for all our big investors and small investors. It's certainly not going away as an issue. The fact that global emissions growth is likely to slow this year due to the severe economic downturn is not, in any way, an excuse for inaction. This is still a major challenge for the world. Our industry has a big role to play. We produce an energy-sourced natural gas that can displace higher emissions fuels and get the world's energy mix shifting in the right direction. Woodside supports the goal implicit in the Paris Agreement of net zero emissions globally by 2050. And as a company, we are working on our own role in delivering that as we aspire for Woodside to achieve net zero direct emissions within that time frame. That involves changes in the design and operation of our facilities as well as investment in carbon offsets and new energy opportunities. We're also working with industry -- within industry associations to support action on climate change. I want to thank Peter Coleman, his executive team and every Woodsider for their efforts in the past year, and particularly in recent months. I want to talk briefly about remuneration. We've worked very hard in recent years to ensure our executive remuneration is closely aligned with shareholder interest and designed to support the delivery of superior shareholder returns over the long term. We've also increased disclosure of executive remuneration in recognition of shareholders' interest in this subject. In the past year, the Board exercised its discretion to make significant reductions in executive awards. I believe we've got the balance right, preserving the ability of Woodside to attract and retain globally competitive talent, who can deliver long-term value, while ensuring executive pay is closely linked to shareholders' interests. The Board will consider feedback from shareholders as we look to enhance the executive incentive scheme going forward. In business, it's important to have a strategy that guides you, but be prepared to change your path when circumstances require it. As you know, Woodside has mapped out a clear growth strategy, and we were preparing this year to take the next steps on that journey. Peter and the team have responded with remarkable agility to the recent challenges. Indeed, the Australian people have been terrific in their response to this pandemic. Unfortunately, the economic consequences will be significant, and we need to navigate a safe pathway to rebuild our economy as soon as we can. While there will be risks, there are significant risks in not opening up. None of us wanted to be tested in this way, but your company is resilient and has been able to navigate a path through this global uncertainty, guided by its unswerving commitment to disciplined financial management and a culture of health and safety. Now I'll hand over to the CEO, Peter Coleman, to provide more detail about our achievements in the past year and how we are managing the challenges we now face.

Thank you, Richard, and thank you to all of those who are joining us on the webcast. As Richard already mentioned, it was crucial that we keep this appointment to talk with you today. I know that now more than ever, our shareholders want to hear how we see things playing out in the months ahead. And of course, as we've heard, these are very dynamic times, but we're through the initial shock of the COVID-19 crisis. And at Woodside, we've put in place the necessary arrangements to ensure we can continue operating for some time in these unprecedented circumstances. Those arrangements are designed to protect the health of our people, the strength of our finances and the continuity of our operations. We've taken the difficult but prudent decisions that were needed, delaying our proposed projects and nonessential activities, contributing to having a forecast expenditure this year to approximately $2.4 billion. We've emerged from that immediate crisis response phase in as good a shape as possible with our strong investment credit rating reaffirmed by both S&P and Moody's. The maintenance of a robust credit rating maximizes our options for the future and supports prudent risk management. Of course, our industry is confronted not just by the challenge of the COVID-19 pandemic and the associated reduction in demand, but also by the supply shock after the collapse of the deal between OPEC and Russia led to Saudi Arabia flooding the market with oil. The agreement earlier this month between OPEC, Russia and other producing countries will help reduce the extent of the oversupply, but the demand destruction we are seeing is so significant that low oil prices are likely to persist this year and possibly into next. To be frank, this extraordinary confluence of events is the worst situation I've seen for our industry in the 36 years I've been in this game. Now why would I be saying this to our shareholders? Well, 2 reasons. First, our shareholders are smart people, and you can see for yourself that our industry faces big challenges. And second, when an industry goes through extreme circumstances like this, it does throw up opportunities for those who have the balance sheet strength to pursue them. I can assure you that Woodside ended this period of significant uncertainty with one of the strongest balance sheets in the industry and world-class, low-cost producing assets. At the end of March, we had over $4 billion cash on hand and over $7 billion of liquidity and gearing at the low end of our target range. We're in this position because of our disciplined approach. We've taken on board learnings from Woodside's activities over the past 10 years to inform our approach to managing risk on our balance sheet, the execution of our projects and our M&A activities. Our balance sheet strength and rigorous investment analysis ensure that we can preserve value for our investors through uncertain circumstances, which can challenge the outlook for the timing and value of the sale of assets, the price of oil and LNG and the timing of major capital commitments in our portfolio. In the past year, we've stress tested our balance sheet against a number of scenarios, including one with 2 years of oil prices at $35, with ongoing oil prices beyond that of $50 flat real to ensure the robustness of our investment strategy. Of course, any investment decision would depend on further analysis of a range of factors, including a view of likely oil prices into the future. We also test our investment strategy under various climate scenarios and incorporate a cost of carbon of at least $40 a tonne, notwithstanding the fact that there's not a carbon tax in Australia at present. Our dividend policy is designed to recognize the uncertainty in our revenue streams due to the cyclical nature of the commodity business and the profit derived from that. All of these measures have ensured Woodside's balance sheet and cash flow remains robust. That's why we raised capital and debt over the last 2 years to ensure we could manage any uncertainty that may arise. We ran scenarios to test our balance sheet that would have been considered extreme at the time, but now with the benefit of hindsight, look prescient and prudent. Our disciplined approach to cash flow and debt management allowed us to respond quickly and decisively to preserve cash flow through these challenging months and ensure we can successfully execute our growth strategy when the time is right. We've also made the necessary changes to rostering arrangements at our facilities to ensure their operation is not disrupted by the spread of COVID-19. Our reliable and low-cost operations continue to maximize revenue from a base business. So what is the latest then on our growth strategy? Well, we've made good progress on the Burrup Hub, and that's continuing even though we've deferred final -- target final investment decisions for Scarborough-Pluto expansion and Browse. At the start of April, we achieved an important regulatory milestone for Scarborough. The offshore regulator, NOPSEMA, accepted the Scarborough offshore project proposal after assessing the potential environmental impacts over the life of the project. Our team is going to continue progressing the relevant approvals, so we will be ready to move forward when the time is right. The fundamentals are still sound, and demand will recover. In the cyclical nature of our industry, a number of projects that were proposed globally and reliant on project financing will likely not proceed. And that, in turn, will support LNG prices. I'm confident that our proposed projects are cost competitive, and we're now working towards a final investment decision on Scarborough next year. We're aiming to start construction this year the pipeline component of the Pluto to Karratha Gas plant interconnector, which continues to be a crucial part of our vision for an integrated production hub. Our near-term growth is continuing with the final investment decision reached earlier this year on the North West Shelf's Greater Western Flank Phase 3 and significant progress on executing the Pyxis Hub and Julimar-Brunello Phase 2. Our international plans have also progressed. Work started early this year on the Sangomar Phase 1 development in Senegal. We are managing the emerging impacts of COVID-19 on the supply chain and project schedule. And we're working with the contractors, the government of Senegal and our joint venture partners to evaluate options to reduce total costs in near-term spend while protecting the overall value of the investment. Richard has already referred to how we're responding to the global challenge of climate change. If the world is to have a chance of achieving the Paris Agreement goal, then natural gas will play a crucial role in driving the transition to cleaner energy. Natural gas can provide energy that the world needs with lower carbon than other major fossil fuel supply sources. But we're not complacent about that. We're working hard on two fronts: First, to further improve the emissions profile of natural gas, both in our operations and across the value chain; and second, by developing new capacity in new energy, carbon management and technology. We set ourselves targets for improving our emissions performance, and we'll report on our progress. Our current energy-efficient target spans the years 2016 to 2020, and we've committed to setting a target for the five years beyond that. In the past year, we announced a target for offsetting our equity reservoir emissions across our entire portfolio from 2021. These emissions occur naturally in gas reservoirs and need to be removed from the gas prior to liquefaction. Our carbon management team has been hard at work to deliver this. Here, in Western Australia, we've acquired properties to undertake native tree planting projects to generate quality carbon offsets, and we're aiming to commence planting within weeks. As a signatory of the methane guiding principles, we're working to reduce methane leakage, including by improving leak detection and repair at our facilities and raising awareness of the importance of managing methane across the natural gas value chain. In the past year, we've been progressing opportunities for hydrogen as a large-scale energy source and the networks that can enable this, including through agreements with partners in our key export markets of South Korea and Japan. Last year, we invested in a consortium in Korea that is building 100 hydrogen refueling stations, giving us access to information in that particular market. And earlier this month, we announced an agreement with Japanese companies, JERA, Inc., Marubeni Corporation and IHI Corporation, to examine the large-scale export of hydrogen as ammonia for using decarbonizing coal-fired power generation in Japan. We acknowledge investor and community interest in the challenge of climate change, and we'll continue this conversation as our business plays its role in supplying reliable energy while supporting progress towards a lower carbon world. Now the world has gone through some rude shocks in recent months, and our industry has copped it on 2 fronts. The headwinds we face in the year ahead are significant, but Woodside is in a better position to weather them than most of our competitors. This pandemic has been a reminder that we provide an essential service, supplying an energy source that keeps the lights on and homes heated as we come into winter. I'd like to thank all of you who are tuning in from your lounge rooms or home offices, and urge you to continue to heed the advice of the health experts through this pandemic. I also thank our employees for the flexibility that they've shown during this period. I acknowledge that these have been challenging times also for our suppliers and contractors and appreciate their willingness to work together to get through them. Almost 80 suppliers can benefit from our expedited payment terms for small, local and indigenous businesses. And we've expedited payment of some AUD 8.6 million so far as we target 14-day payment terms for small business because, of course, we know how crucial cash flow is to small business at this time. Now in particular, I'd like to acknowledge the importance of the grassroots work done by community groups at a time like this, dealing with the immense social challenges, including domestic violence and homelessness. We remain committed to working with our community partners through these very difficult times. It's just simply the right thing to do. Now it's encouraging that Australia has managed thus far to slow the rate of infection, but it's not over yet. As a nation, we're going to be managing the economic impacts of this crisis for some time. And companies like ours have a role to play in that recovery. And now I'll hand back to Richard. Thank you.

Thanks, Peter. We now move to the formal business of the meeting. There are 4 items on the agenda today. The Item 1 discussion of 2019 Financial Statements and Reports; Item 2, reelection of 2 directors retiring by rotation and election of 1 director who was appointed since the last AGM; Item 3, consideration of the company's 2019 Remuneration Report; and Item 4 has resolutions requisitioned by a group of shareholders led by the Australasian Centre for Corporate Responsibility, ACCR. General questions about the accounts and the management of the company will be addressed during Item 1, along with any questions to the auditor. Questions on each of the other general items will be addressed when we reach that item later in the meeting. So move to Item 1. 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 December 31, 2019. 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. We received a number of questions from shareholders prior to the meeting, some of which have already been covered in Peter's and my addresses. Trevor Hammond from Ernst & Young, the company's auditor, is on the call and can answer questions relating to the company's accounting policies, the audit of the accounts or the independence of the auditors.

We will now address any questions or comments on the 2019 Financial Report and reports of the directors and the auditor. So the first question is from [ Adam Wit ], and it's on oil prices. So we're taking some general questions here as well, Peter. And the question is, what is the Board's outlook on global oil prices in the short and long term? And how is Woodside planning to mitigate any volatility caused by Russian and Saudi suppliers? And Peter, I'm going to get you to answer that one because you said 36 years. So...

Yes, yes. You would hope after 36 years, we may have some knowledge in this area. Look, the global oil prices are very difficult to predict at the moment. The challenge for us is twofold. Firstly, there's been demand destruction due to COVID-19, and that demand destruction is equivalent to around 25% of the world's global demand at this point. If you think about oil demand, it's made up in 3 areas: aviation; road transportation; and then the rest is pretty much made up in chemicals, manufacturing and so forth. First of those, aviation is obvious, and the demand destruction there has been enormous. So it's really how quickly will demand come back? How quickly will aviation come back? And then it's, of course, the second element on trucks and so forth, how quickly will people start driving their automobiles again? What we see is, hopefully, out towards the end of this year, sometime in third quarter, we'll start to see demand come back into the marketplace. Now the question will be, long term, what the aviation demand will be. So -- and whether we'll get back to where we were pre-COVID-19. We'll only know that as we go through the fourth quarter of this year and early into next year. The second part, though, then as we entered this with an oversupply in the marketplace, principally driven -- actually not by OPEC, but by production in the U.S. The production in the U.S. has come off. It's already dropped off around about 2 million barrels. We expect that to go out of the market this year. The question is whether that permanently stays out of the market will depend on how long oil prices are low for. If they're low, then it will stay up permanently. If there's a spike at -- between now and the end of the year, then that's likely to come back into the market. So what we're planning for is for low prices at least through this year and into next year. As we talked about in the opening, this is really to make sure that we manage our balance sheet expectations and manage our capital spending. It's really, really important for us at the moment, that we get Woodside back into a position where we're cash positive in our operations and in our investments. We have a large investment commitment this year already, and we just want to make sure that we don't draw down too heavily on the liquidity that we have available to us. So all I would say is I think you'll see a gradual strengthening of prices as we go through the year and into next year. And then hopefully, by 2022, we'll be back to as normal as we can be in the pricing area.

Thanks, Peter. I'm going to get you to answer the next one as well, which is from [ David Hensman ] on the breakeven oil price. The question is, what is the breakeven oil price for Woodside to remain profitable, please?

Well, thanks for the question, David. We don't actually disclose what our breakeven profit is. What we do disclose, though, is the cost of our operations. And then, of course, each year, we kind of look at what's our breakeven cash flow, which includes, of course, distributions through dividends and our investment. I'd simply point you to the fact that -- well, Woodside's cost of operations is around $4.50 per barrel equivalent. So the math is not that hard. When you look at the difference between what oil price is today and other costs, depreciation and so forth, you can see that Woodside maintains a very healthy margin. Now the profit year-on-year is going to go up and down depending on a number of other factors, including taxes, both primary and secondary taxes here in Australia and elsewhere. So all I would say to you is Woodside's well positioned with respect to the cost of our asset base, with the ongoing production and, I think, more importantly, the ability to be able to fund our activities, including our dividend.

Thanks, Peter. The next question's from [ Chris Barth ] on our long-term performance. And I'll read the question from Chris. I've been a shareholder in Woodside for about 10 years. Woodside's financial performance over the last 10 years has been poor on just about every measure, including declining earnings, terrible return on equity and a share price that's declined significantly over that period (ignoring the recent drop due to COVID-19). What is the Board doing to address the underperformance of Woodside? So I'll kick off, and Peter, you might want to add. Respectfully, I don't agree, Chris, that -- with the premise of the question, but thank you for asking it. I would say that, broadly, oil and gas has been a more difficult sector over the last 10 years. But within that, Woodside's been clearly in the top quartile in performance on any of those measures on total shareholder return, on return on equity, and clearly sector-leading in terms of yield to shareholders, which I think has been and will be incredibly important. I'd also say that we've done a heck a lot of work to ensure that we're operating our facilities' best practice and generating good and strong cash flows from those. And that any new projects, such as Scarborough, are world-class and will deliver outcomes for shareholders into the years ahead. And you all have seen, as a shareholder, the significant increase in resource at Scarborough last year, which just goes to the quality of that development. Peter, do you want to add anything?

Yes. Look, I would address Chris' question as -- this is a cyclical industry, and we've weathered the storm. We're now into our second cycle. So our shareholders will be aware that in 2015, at the end of 2014 and then through 2015, oil prices dropped very significantly and then went down further again in early 2016. Of course, your cost base is pretty much fixed. We took measures back then to significantly reduce or get costs out of our business and make sure that we maintained the quality in our balance sheet. We learned from that back in that 2010, 2011 period where we had really extended ourselves in building Pluto and saw the stress on our balance sheet during that period of time and decided that we would put prudent measures in place. And as I mentioned during my introduction, we've even increased those measures over the last couple of years, particularly after the acquisition of the equity in Scarborough from ExxonMobil, to ensure that we are robust during the period. The reality, though, is it's a cyclical business. And for the last few years, prices have been challenged. We're working very hard, as Richard said, to be the very best we can in the business and to be able to take advantage of any improvement in that cycle. And we're hopeful it will, of course, if long-term forecasts always say that it will, the energy demand is still going to be there. That's not going away. And so Woodside just is going to be positioned for that. So I would -- thank you for being with us for such a long period of time. Hopefully, you've enjoyed the dividend and the franking credits that have come with that during that period. And we look forward to the next few years ahead as hopefully we get ourselves out of this situation and prices improve.

Thanks, Peter. So the next question is from 2 shareholders on Scarborough, one from [ Norman Peter ] which is one of the largest barriers Woodside faces to get the Scarborough project started. And from [ Michael John Wilson ] After Woodside acquired Scarborough, the reserves were quickly upgraded from 8 to 11 Tcf, i.e., nearly 50% increase. What metrics did Woodside use for this dramatic increase? Or what did Exxon and BHP have so wrong? Peter?

Look, the first question, what are the largest barriers? At the moment, the Scarborough project is almost ready to go. So the onshore part of Scarborough Train 2 at Pluto, we were very, very advanced in our work on that with our primary contract at Bechtel. The offshore work was a couple of months behind that. And so we were ready to go into a final investment decision around the middle of this year subject to our partners' approval. Now, of course, we're continuing with our regulatory approvals, but we expect to have everything in place that we need by around the third quarter of this year. So the Scarborough project and Pluto Train 2 are ready to go. We call them investment-ready. And that's what we're doing. We're minimizing the spend on it now just to make sure that -- and using this time to make sure that we've got everything together and every I dotted and T crossed. So don't waste this time. Use it productively. So we'll be ready to go sometime later this year. Now what will be the trigger for that? In my view, it will be a period of sustained pricing stability and then also a trajectory through pricing growth. Now what's limiting us at this point in time? And of course, these ratings agencies -- ratings agencies have put all of the oil and gas industry on a negative watch and, in some instances, have downgraded companies by 1 to 2 notches. And of course, we just definitely don't want to get to a point where we're worried about whether we're investment-grade or not. And so we're in a situation where we'll need to see pricing stability. We'll need to see the ratings agencies change their pricing outlook, and we don't believe that's going to happen until sometime into next year. Now with respect to the reserves, the reserves were something that we noted during the acquisition process. And of course, you might recall that we acquired Scarborough in two tranches. The first tranche was 25% from BHP and the second tranche was another 50% from ExxonMobil. Now during -- up to the acquisitions, the first tranche, we looked very, very closely at some of the geophysical information and determined two things. One is the information was incomplete, meaning the two previous partners or the partners at the time actually had not shared information, and so did not have, in our view, a complete geological, geophysical picture of the resource. When we acquired the asset from ExxonMobil, of course, we got even more information that confirmed our view. We did a very rigorous assessment of the resource over a number of months, and we were able to both increase the size of the resource, but then also increase the recovery factors from it. The biggest change was the introduction of new seismic technology that wasn't available to either BHP or ExxonMobil previously. We've used that technology, and that technology has enabled us to increase the resource size. So it's a really classic example of 2 things. One is generally large resources get bigger over time as our professionals and professionals around the world are able to work on them and understand them better; and then secondly, the value of being using leading world-class technology. And that's what's been able to unlock that.

Thanks, Peter. So the next 2 questions come from Ms. [ Kit Chisholm Holmes ]. Finance in the context of a rapidly decarbonizing world economy and Australia's commitment to the Paris Agreement, net zero by 2050, meaning emissions need to halve by 2030 and a reduction in the social tolerance for irresponsible climate behavior by companies, what are Woodside's Browse development plans for carbon capture and/or emissions offsetting? And she also asks, given the recent oil price decline, overall price volatility in the world economy rapidly decarbonizing, does the Browse development represent a very high investment risk with a possibility of Browse becoming a stranded asset? Again, Peter, I think I'll get you to...

Look, the Browse asset itself has the highest carbon footprint of any of Woodside's suite of assets, either in Australia or globally. And so we've been very cognizant of that through the development phase. There are 2 parts to it. Of course, early on in the Browse development, we planned to offset emissions through the development of carbon sinks. And you heard in my opening that we've already established a relationship there with Greening Australia to develop carbon sinks here in Western Australia. We'll need to, obviously, expand that activity as we get closer to bringing Browse online. And so that's the first step for us is really developing carbon sinks, so we can offset those particular emissions. And then, of course, secondly, over time, the design of the facilities allows for the post-installation or post-start-up installation of carbon capture and storage facilities on board. Now of course, that's uneconomic at this point of time. It's a very expensive activity to do, but we believe, over time, it will become more attractive for the partners to proceed with that. And we'll be able to use reservoirs that are being depleted, and we'll be able to inject carbon back into the reservoirs as they're being depleted. At the moment, there are no reservoirs in near proximity to Browse. So that's how we're looking at Browse at this point.

Thanks, Peter. The next question is from Mr. Louis de Villiers on the pandemic response. [ Mr. Goyder ], thanks to all contractors and staff for their work and dedication in these difficult times. There appears, however, many contractors and staff being terminated or made redundant, most recently, presumably in response to COVID. Could you please clarify the reduction of staffing and how the company sees reappointing contractors and employees? What I've heard is the hopeful reduction of expenditures for the year ahead, which I imagine is due to the reduced staffing. So I'll kick off. Peter, you add anything you want. The significant component of capital -- of spend reduction for the U.S. capital by far are the largest component. But there are some things we've had to do in order to maintain our ability to produce LNG up at the North West, and that required us on our offshore and onshore facilities to have less people. And typically, those no longer on are some of the contractors who were doing ancillary work because of the need to keep people appropriately distanced and protected from this virus and ensure we can keep production. So we've had to do that. And of course, in the projects that we have pushed back, we have a reduction in some of the work we're doing there. So that's had an impact on contractors as well. We've been, prior at this stage, very strong on retaining our employment numbers.

Yes. Look, let me make a couple of comments. Look, first and foremost, the contractor reduction was not driven by cost. It was really driven by COVID-19 response. And the reason for that is if you think about Woodside, it was about maintaining the integrity of our facilities and the ongoing ability to operate. We don't -- one of the biggest risks that we have in our facilities is if we have an outbreak, particularly on an offshore platform. Now offshore platforms, the analogy is probably not the best one, but kind of like a passenger ship. Now we're all familiar with how COVID-19 has spread through passenger ships. Our employees on those offshore facilities are isolated out there. They work and live in very close proximity. And prior to COVID-19, many of them were sharing. There were two to a bedroom. So we've had to cut that down to one person per bedroom. And then we've also had to cut down the amount of people coming in and out of the business because Woodside took an additional step even before the government put in place its requirements of having our employees self-isolate for two weeks prior to even going into our facilities. And we did that and along with changing our rostering arrangements to include a longer cycle in which they were actually at work. And the reason for that is just -- is quite simple. The less times you have to rotate people in and out, the less contact that they have with others, then the less likelihood that we can have a spread of COVID-19. So first and foremost, it was about protecting the health and safety of the people at our facilities, and then, of course, along with that, protecting the ongoing assets as they operate. You can imagine the difficulty it would cause to the state if one of our facilities had an outbreak offshore and then we had to isolate that facility with the potential for shutting it down. So this is what the contract reduction was in the first instance. As Richard mentioned, there's also been, unfortunately, some reductions in contractors as we've had to ramp down some of our project activities. But most of the work actually was overseas, so it has not had a direct impact in Western Australia of any magnitude.

Thanks, Peter. The next question's from Dr. and Mr. [ Lutzig ]. Our joint venture partner in the Sangomar oil project in Senegal, has been unable to secure finance for the project. What's the future for Sangomar and how Woodside ensures shareholder value is not eroded by continuing to pursue this project? Well, we've got two other joint venture partners. One is the government of Senegal, and the other one is Cairn, a U.K.-based company. There are arrangements in place for all the partners to fund appropriately their expenditure on this project. And if they can't, then we'll deal with that at the time. But we're doing everything we can to ensure that this is a good project for our shareholders and indeed for all the partners. Peter, do you want to add anything to that?

Yes. I'm sure, by the nature of the question, the writer also understands a little bit about FAR. FAR had an equity raising last year. So that's currently financing them. They have financing available out sometime through this year. And to be able to meet their cash calls on the project, of course, they announced that some of their debt funding had fallen over post-COVID-19. And my understanding is they're looking for other ways to be able to fund the project. And they're better placed, to be quite frank, to be speaking to that matter. With respect to Woodside's rights under the joint venture, of course, any partner who's not able to meet the cash calls then has a few months to be able to remedy that situation. If they're not able to remedy it and pay their cash call, then, of course, their equity is diluted. And there's a method for doing that. So that's how we're protecting Woodside shareholders.

Thanks. The next one is, I think, from [ Norman Peter ] which is, what are the primary financial avenues which the company is looking to pursue to enable both the Scarborough and Browse basin projects to go ahead? Which lenders or investors or JV partners might you be leaning on? I think, Peter, you've spoken a bit about that, but do you just want to add anything?

Look, the other financial avenues we're looking at, of course, is looking at infrastructure investors who may be interested in particularly the onshore facilities at Pluto Train 2. So there are investor types who are very comfortable in receiving infrastructure returns, particularly when it's backed by companies like ourself and our joint venture partner have very strong credit ratings. We've also looked at selling down some of the offshore equity in Scarborough. At this point, we've withdrawn from that activity just given where the market is at this point. On Browse, we just continue to try and bring the costs down on Browse. And hopefully, out of -- once we get out of this COVID-19 situation, we'll be able to go back to the contractors and get them to sharpen their pencils again.

Thanks, Peter. Two questions from [ James Egleston ]. While it is clear Woodside will continue to focus on improving performance to maximize the remaining value of existing assets, what are the long-term plans for profitable growth down the road? For instance, can you report specifically on what's more ventures, such as research projects, pilot programs or minority stakes in new businesses Woodside is considering? And does Woodside intend to match European counterparts, who increasingly recognize that a strategy for a diversified business beyond pure fossil fuel extraction is required to reduce climate risk and provide long-term value for investors? Can you please elaborate? And Peter, I think you spoke a bit in your address about some of the ventures that we're looking at, hydrogen and carbon offsets. So you've spoken a bit about that. I think we are doing a number of other ventures related to our existing businesses that we think will enhance the value of those businesses. And we've got a significant investment in technology at Woodside, which has been very good for us in terms of improving the efficiency of our existing operations and providing an opportunity into new areas. That's probably all I'd say on that. Anything you want to add on the first question?

No. I'd probably just to elaborate a little bit. We are doing a lot in the hydrogen space, including a relationship with Monash University. And we'll open up a research center at Monash University later this year. With respect to hydrogen, we're invested -- gaining a couple of possibilities at the moment for small-scale hydrogen plants in Australia. And of course, there's some potential government funding available to support that. So that will be the first step for us. With respect -- and then, of course, I also mentioned the joint venture arrangements with JERA and so forth. In the technology area, we're currently in discussions with a major international company with respect to commercializing some of the work we've done around modeling our plants and so forth and being able to extract real-time data and transmit that over long distances. So we are looking at a number of areas in our business. We're quite active with that. We've also looked at carbon trading opportunities as well as developing carbon sinks. And we'll just -- we'll continue to do that. We don't typically talk about the exact areas that we're going to invest in. But as I said in my opening, we're going to scan the horizon pretty closely because out of COVID-19, there may be opportunities that present themselves that allow us to accelerate our activities in this area.

Thanks, Peter. And in relation to the second question, one of the things that we're pretty clear on as a Board is that Woodside is a very good LNG company, gas company, obviously, with some assets in oil as well. And we do that well. We do it efficiently. We're a good operator. We're an incredibly safe operator. And that's how we feel we can add value to all our stakeholders, including gas, as Peter and I both mentioned earlier, doing it a bit in terms of changing the energy mix and reducing CO2 emissions globally. As Peter also said, we've got a strong balance sheet, and we've got a capacity to look for new opportunities. But I wouldn't overestimate that in terms of changing what we do. We're an LNG company, and we're a very good one.

Yes. Look, I would add that the targets that have been set by some of our European competitors are obviously quite aggressive and to meet the 2050 net zero emissions. So I mean there has been some changes. Do you measure intensity? Do you measure just net emissions in total? What does that look like? There have been certain undertakings made by companies to move into power generation and so forth into -- and to offset Scope 3 emissions in their products. We're looking at all of those. I think the big challenge though is finding scale in this. So the first one is finding scale. If you think about the amount of capital that we're able to deploy in the oil and gas industry, it's many, many billions of dollars that are required in that industry. You just don't find projects of similar scale in some of these other energy sectors, particularly in renewables. So it's about getting scale. The renewable sector itself is very challenged at the moment as host governments globally withdraw subsidies for that sector. And of course, it's also challenged by the rapid change in the efficiency of technology, particularly in the solar sector, where the efficiency of solar panels is changing and in such a rapid pace that investors in that area can find themselves with marginally higher-cost plants very, very quickly. So there's just change, and we wanted to see some stability there. It doesn't mean we're not going into those areas. But as Richard said, we do something very, very well, which is develop LNG. We believe that hydrogen is a natural complementary activity to LNG, but it's going to be sometime post 2030, early 2030s before hydrogen becomes commercial at scale globally.

Thanks, Peter. The next question, if we can bring it up, is from [ Harley and Julia Wright ]. Woodside has taken on a large amount of debt in response to the current crisis. At the same time, filing investment decisions on a number of major projects have been delayed, increasing the risk that these projects may become stranded. If you are to meet the goal set out in the Paris Agreement, oil and gas demand can never recover to a level that would justify Woodside's expansion strategy. So how will the company ensure it's able to meet its considerable debt obligations in the context of a long-term declining demand? Again, I don't think the premise of that question is correct in terms of debt. Woodside has actually raised equity over the last couple of years and has, as Peter said in the start, we start more than $4 billion of cash at the moment. And we have a debt profile out that, again, as Peter mentioned, has enabled us to retain our credit rating, which many others haven't. And we've got a tenor of debt in the years ahead that even in difficult circumstances, we feel pretty comfortable with. So clearly, any investment decisions we make in the future will -- once we consider the attractiveness or otherwise of that investment, we will look at the appropriate mix of debt and equity in terms of funding it and other partners. And we'll take a view on the longevity of those projects at the time. So I think...

Yes. Look, I would say the first part of the question is incorrect. We did not raise debt nor equity in response to COVID-19. We raised equity 2 -- just over 2 years ago and then, subsequently, have raised more debt and increased the tenor of our debt in that intervening period to prepare ourselves for our major projects. And so we're at this point through design, not through a reaction to a crisis. And of course, please don't misread my comments early on when I said we were testing at $35. We were testing our balance sheet at $35 for 2 years before COVID-19, before oil prices crashed. That was part of our prudent approach that we talked to, managing the balance sheet so we could do exactly what your question is asking, which is to be able to pay our debt when it became due. Now with the tenor of the debt, if you look at our debt profile, it's very manageable at the moment. So we can pay debt out of cash in bank if we wish to. We've just preserved that option at the moment, but we could pay our debt down out of our cash in the bank. If you look at it at the moment, we've only got $700 million of debt maturing next year. And then the following year, we don't have anything of any significance. So we've got quite a clean period in front of us before we have to worry about our debt situation.

Thanks, Peter. The next question is from [ Mrs. Kimberly Wright and the Watson Family ]. Peter, thank you very much for the update. With respect to the USD 7 billion of liquidity on the balance sheet, broadly, what portion, if any, is due to mature within the next 12 to 36 months? If relevant, what additional mitigation steps are the Board and management team considering in the event that the corporate debt markets are severely disrupted during the same period?

Yes. Well, let's differentiate between liquidity and debt. Liquidity is the amount of market -- money that we're able to draw out of the market. So when we talk about $7 billion of liquidity, that means, roughly, we have -- it's made up of 2 parts. One is $4 billion or just over $4 billion of cash that we actually have sitting in bank -- the bank already. And we preserve that cash over the last 2.5 years. The second part of that liquidity then is debt that we have available to us that we haven't drawn down out of our accounts. So I mean, that's just like simply having paid your -- overpaid your mortgages and then being able to draw down on it. So we actually have $7 billion of money available to us, of which $4 billion is cash that's already sitting in deposits. The other $3 billion is available through credit lines that we have available. Now our actual debt is in the order of around $6 billion. So let's get -- when we're talking about liquidity, I'm not talking about debt. The actual debt is $6 billion. Now this -- of that $6 billion, as I just mentioned in the last question, we have about $700 million becoming due -- coming due next year. And then in 2022, we really have nothing, and then the next one is in 2023. So we don't have a bus coming at us, so to speak, with respect to our debt.

Thank you. So the next question is from shareholders Emma Batchelor and Rachel Deans on Murujuga rock art. Last year, Woodside expressed support for the WA government and the Murujuga Aboriginal Corporation in their bid to seek World Heritage listing for the globally significant rock art of the Dampier Archipelago and, notably, the Burrup Peninsula, where Woodside operates a joint venture LNG facility. Woodside website also states that we're committed to preserving the petroglyphs. Given the credible scientific evidence that acidic emissions from LNG production and transport are seriously damaging the irreplaceable Burrup petroglyphs, how has Woodside public -- Woodside's public support for UNESCO World Heritage listing assisting with the company's plans for continuing industrial expansion through the Burrup Hub project? Peter?

Well, first point is, of course, our -- there's 2 parts to the petroglyphs. Firstly, with respect to emissions, there's no material or detrimental effect to the petroglyphs at this point due to the activities on the Burrup Hub. So let's put that one out there that there's nothing material at this point. However, we do recognize the potential. And of course, one part of the Burrup Hub strategy is to replace the existing power generation at the Karratha Gas Plant. That power generation is 1970s vintage power generation, and it alone is responsible for something in the order of more than 60% of NOx and SOx submissions out of the Burrup area. So that's the plan to do that. And of course, we've got activities underway to look at building a renewables power station on Maitland estate, which is off the Burrup Peninsula, and are working with the state government on getting approvals through to that. But that will take place once Browse is approved because that then justifies extending the North West Shelf. The second part, though, to the petroglyphs, and it is actually disturbing or moving the rocks themselves. Now of course, when the North West Shelf was originally built back in the late '70s, early '80s, our knowledge and understanding of our aboriginal culture and the petroglyphs were clearly not as advanced or mature as it is today. Fortunately -- and those rocks were disturbed. Fortunately, many of those rocks were preserved. And over the last few years, along with the traditional owners, we've gone through a rehabilitation program where we've culturally -- in a culturally sensitive way placed those rocks again in culturally appropriate areas. So that's the North West Shelf. Of course, Pluto being developed at a later point has best-in-class activities with respect to the preservation of the petroglyphs. Now we're very sensitive to this as well. And it's something that occupies a lot of our conversations as we talk about what we need to do on the Burrup Peninsula. But I can tell you the best thing to do is to get the very best technology into our operations, and the way that we can justify doing that on an economic basis is to ensure that we can extend the life of those facilities.

Thanks, Peter. So I think we're done there. So written questions to the auditor have been received and available on Woodside's website. So I'll now invite Trevor Hammond from Ernst & Young, who's online, to respond.

Thank you, Chairman. Everyone, welcome to the opportunity to answer shareholder questions at today's AGM. As stated, the company has received questions, written questions to the auditor, from the shareholder in accordance with Section 250 PA of the Corporations Act. In our capacity as auditor, we have provided the list to the company that had been made available on the company's website. This list includes any questions which [ you have ] related to the conduct of our audit or the content of our audit report. Before responding to the specific questions, I would like to provide some context within which my responses are provided. The company prepares the financial report in accordance with the requirements of the Corporations Act, the accounting standards, stock exchange rules and certain other regulatory requirements. The approval of the financial report is the responsibility of the Board of Directors. The role of the auditor is to conduct an independent audit in accordance with the Australian Auditing Standards and to issue an independent audit report in accordance with the Corporations Act. In developing our audit approach, we do have regard to the company's main business activities and seek to develop an understanding of the business. For each business activity, we identify risks, internal controls and the critical audit objectives associated with those risks, which are expected to have a material impact on the financial report. It's important to note that our audit procedures were designed to provide reasonable assurance that the financial report as a whole is free from material misstatement. An auditor's work is not carried out for the purpose of giving a separate opinion on the adequacy of internal controls or on each caption of the financial report in isolation. We have followed the auditing standards in the conduct of our audit, and as a result of our work, we were able to issue an unqualified audit report on the financial report as set out on Pages 114 to 119 of the company's annual report. I will now respond to the 7 questions on the question list. Again, these are available on the company's website. I do not intend to read questions because they are available to the company's shareholders and invited guests. In respect of Question 1, I can confirm that prior to signing the audit report, I did read and understand the AASB and AUASB, that's the Australian Accounting Standards Board and Australian Auditing Standards Board, guidance on climate-related and other emerging risks disclosures. I note that the guidance is not mandatory but does make key recommendations that the auditor may consider. I can [ state ] that the key recommendations were considered during the conduct of the audit. [ For the conduct ] of the audit, I did not read the supplementary memorandum on Climate Change and Directors' Duties that the question refers to. I note that I have now since read this document, and I'm comfortable that it doesn't change my view in respect of the audit report that was issued on the company's financial report for the year ended December 31, 2019. In respect of Question 2, I can state that in planning our audit, we have [ considered ] the expectation of the key stakeholders [ of the company ], which includes investors in the company. These considerations assist in our determination of key risks that could result in a material misstatement to the financial report. In this context, our consideration of risk included consideration of climate-related risks. The other parts to Question 2 concern whether the directors and management considered the impact of a 1.5-degree scenario. I don't think it's appropriate for me to say what the company has or has not considered, but I can say that we have understood and assessed how the company has addressed the impact of climate-related risks on the financial report and, in particular, in its assessment of the potential impairment of assets. And we're satisfied that the impairment assessments performed by management satisfy the requirements of the accounting standards, including the disclosure requirements. In relation to Question 3, I can confirm that our audit plan did include consideration of climate change risk as did our reporting to the company at the conclusion of our audit. In relation to Question 4, as I stated in my response to Question 2, we did identify and understand the assumptions management made in respect to climate change. In the context of asset impairment assessments, impairment of assets for both oil and gas properties and exploration and evaluation assets was a key audit matter for us and has been described in our audit report on Pages 114 to 119 of the company's annual report. In relation to Questions 5 and 6, I will answer these together as they relate to the same subject matter. In the conduct of our audit, we did not separately and directly consider a 1.5-degree scenario as we do not believe there is a specific requirement to do so. During the audit, we did, however, consider the impact of climate-related risks more broadly and determined how they were relevant to the financial statements and, as I've mentioned previously, in particular, in relation to the potential impairment of assets. My response, therefore, relates to our consideration of climate-related risks generally and not specifically to a 1.5-degree scenario. As I mentioned earlier, impairment of assets was a key audit matter and has been described in our audit report in the company's annual report. In that context, we did consider the impact of climate-related risks in our overall risk assessment and testing strategy for impairment and obtained representations from management about impairment where required. We did communicate information on impairment, including the consideration of climate-related risks, to the company's Audit and Risk Committee. The inclusion of the consideration of climate-related risks in the company's impairment assessments did have an impact on the values determined by those assessments. However, it would not be appropriate for me to provide information on this that is not otherwise disclosed in the financial report. I can also confirm that impairment of assets was considered a significant risk in our audit of the company's financial report. Finally, in relation to Question 7, I again refer to our audit report on Pages 114 to 119 of the company's annual report, which discusses the procedures we performed in respect of the assumptions used by the company and its assessment of impairment and in determining the adequacy of disclosures. These procedures including -- included assessing the reasonableness of key assumptions used in the company's impairment calculations and their impact on the recoverable amount of assets and included the consideration of the impact of climate-related risks. I can also confirm that based on the level of disclosure in the financial report, I was satisfied and remain satisfied that our opinion was appropriate. That concludes my response to the questions outlined in the question list. So I'll pass back to you, Chairman.

Thanks a lot, Trevor, for that, and thanks for the questions and comments on that item. So we'll now move on to Items 2a to 2c: the elections of Mr. MacFarlane, Mr. Archibald and Ms. Goh. Items 2a and 2b relates to the reelection of Mr. MacFarlane and Mr. Archibald as Directors. Item 2c relates to the election of Ms. Goh as a Director. Mr. MacFarlane and Mr. Archibald were elected at the 2017 AGM and retired by rotation at this meeting. Being eligible, Mr. MacFarlane and Mr. Archibald offered themselves for reelection. Ms. Goh was appointed to the Board since the last AGM and, being eligible, offers herself for election. Each year, the Board conducts an evaluation of the performance of individual directors. Based on the 2019 performance reviews, the Board supports the reelection of Mr. MacFarlane and Mr. Archibald. Appropriate background checks were completed before Ms. Goh was appointed to the Board based on her diverse professional background, extensive international track record and board experience. The Board supports the election of Ms. Goh. Details of the directors seeking election are set out in the explanatory memorandum accompanying the Notice of Meeting. We will now hear messages from the directors seeking election, addressing the skills they bring to the Board.

Good afternoon. I'm Ian MacFarlane. And for the last 3.5 years as a Director of Woodside, I've been able to draw on my background of business and public policy to provide unique advice and input into the Board of Woodside as we make those decisions that will ensure that Woodside not only continues to grow but meets the expectations of the political leaders and communities that we live in. With the challenges ahead, particularly with the difficult economy and the downturn globally, along with the growing community expectation that companies like Woodside should lower its greenhouse gas emissions, I look forward to being part of that process in ensuring the company remains strong and meets its community expectations. Thank you.

My name is Larry Archibald, and I've had the privilege serving as a Director on Woodside's Board for the past 3 years. I've spent my entire career, close to 40 years, working in the oil and gas business. I've worked in a breadth of roles with several of the largest multinational oil and gas companies, and I retired in 2015 from ConocoPhillips after 8 years as their Global Head of Exploration and Appraisal. I have extensive upstream oil and gas experience, familiarity with many of the world's most important oil-producing regions and understanding the issues facing the energy industry today. In addition to my director role, I do advisory work for private equity and consulting firms, and I chair a Geoscience Advisory Board at the University of Arizona in Tucson, where I have a residence. With that brief background, I'm pleased to offer myself for reelection. And with your support, I look forward to serving on your Board of Directors for the next 3 years. Thanks.

Good afternoon. My name is Goh Swee Chen, and I joined the Board of Woodside in January 2020. I'm currently based in Singapore, and a significant part of my professional life was in international assignments, and I've worked and lived in most continents, including in Australia for IBM. My past career spanned across a diverse range of industries, and these include oil and gas, consumer goods and IT and, most recently, in renewable energy. I currently serve on several for-profit boards, and these are Singapore Airlines, Singapore Power and CapitaLand. I also chaired the Singapore National Arts Council and I'm a trustee on the Board of Nanyang Technology University. I appreciate your support for reelection into the Woodside Board. Technology and social developments have resulted in meaningful increase in the level of complexity in the world we live and operate in. And I will make the best use of my diverse experience and background and international track record to serve the Woodside Board and its stakeholders. Thank you.

Thank you. I'm advised there are no questions on Item 2. So we will now show the voting outcomes for these resolutions, hopefully. Here we go. So the resolutions have been passed. I'm pleased to confirm the election -- the reelection of Mr. MacFarlane and Mr. Archibald and the election of Ms. Goh. Congratulations. I'll move on to Item 3, which is to consider the company's remuneration report for 2019. The report is set out on Pages 55 to 75 of the annual report. It explains the company's policy on the remuneration of directors and senior executives and provides remuneration information for 2019. Although the vote on the remuneration report is only advisory, the Board will take the outcome into consideration when determining the company's remuneration policy. Are there any questions on Item 3? And I'm told there's no questions on Item 3. So I'll now display the voting outcomes on the screen. So the resolution has been passed. So I'll move on to Item 4. Item 4 on the agenda relates to resolutions requisitioned by a group of shareholders. Details of the resolutions and the Board response are contained in the Notice of Meeting. Those resolutions relate to Woodside's commitment to action on climate change and our advocacy in support of this, including through membership of industry associations. One of the resolutions challenged some of Woodside's social investment and community engagement programs. Resolution 4a will not be passed by the 75% majority required for a special resolution, meaning that Resolution 4b, c, d are not valid, and it is not necessary to vote on them. The Board has responded to the resolutions in detail in our Notice of Meeting, and further information is available on our website on our membership of industry associations and how we monitor and review alignment with our climate policy. We will publish the summary of our annual review later this year. Our website also contains further information on our commitment to managing emissions and reporting on our targets for improving our energy efficiency. These are issues we already take very seriously. So now I'll look to take questions on Item 4. So there's 2 questions from Daniel Gocher on Item -- one on Item 4b and one on Item 4c, 4b. The Chairman and CEO have repeatedly stated that Woodside's gas is reducing emissions because it is displacing coal in Asia. Can the Board confirm which of Woodside's customers have replaced coal-fired power generation with gas, when that transition took place and the amount of emissions that were reduced? And second question, on Item 4c. On 27 March, CEO Peter Coleman said that implementing carbon capture and storage at Browse from day 1 doesn't affect the economics in a material way. He also said he'd "hate to say that to a regulator." If CEO said it does not change the economics of Browse, why then did Woodside campaign against proposed EPA guidelines that would have required new projects to capture offset their emissions. Peter, do you want to have first go?

Yes. I'll have a go at the first one. The -- with respect to the customers itself, Woodside doesn't track what each of our customers is doing because our customer base is very broad, as you can imagine. And of course, they don't state to us why they are making particular investment decisions and why they may have made a decision to move from coal to gas. I mean that's internal to the company itself. It's not something that they either owe Woodside or disclose to Woodside. We have commissioned some independent work, though, that was verified by CSIRO that when looking at the average energy input into our customer nations -- and that's particularly the Asian growth nations of China, Korea or Japan. When you look at those average energy inputs, if displaced by gas, then, of course, there's very significant advantage in moving gas into those markets. And of course, as a case in point, when you look at the United Kingdom, the United Kingdom shut down coal in its power stations over some 20 years ago. Gas is now principally used as the major energy provider in the U.K., both in homes and also in power generation. And the U.K.'s energy intensity is the lowest it's been for almost a century. So you can see there's a case in point already in parts of the world in countries that have already displaced particularly coal out of their energy mix. And of course, we did some -- commissioned some independent work and published that work that says the same thing would happen in our customer nations as well. With respect to CCS at Browse, the comments I made were in response to questions around delays in Browse. And it was essentially one that said that Browse today and the base case for Browse is for -- not for carbon capture on day 1 but to be able to install the facilities or the space on the deck of the FPSOs, gas FPSOs, so that we can install carbon -- potentially install carbon capture and storage facilities at a later date once space becomes available in a reservoir. Rick, the comment around economics and so forth is correct. Depending on your carbon assumptions, and I made that in my initial comments that the pricing of carbon does not, in a material way, affect the economics of the projects. And I think that's good news for shareholders. The issues with regulators, of course, is -- we choose a number for a planning basis. The numbers that we use are much, much higher than what is -- carbon is currently traded at in the world. And for the majority of shareholders who don't follow this, it was only a couple of years ago that carbon was trading at about $5 per tonne in Europe. It's now trading at around $20 per tonne. It's probably gone down again. I haven't followed it that closely. You may recall in my opening remarks, I said we're using $40 per tonne. I wouldn't want anybody to think that that's what we think the current price would be, and that was my comment with respect to regulators. But I do want shareholders to be very clear that we are stress testing our investments and we've chosen carbon prices that we think, whilst maybe justifiable, are well in excess of what market is trading at today. So we haven't paid lip service to this. We've stress tested our assets, as I said, at carbon prices that are way above what the market is trading at today.

Thanks, Peter. The next 2 questions come from ACCR. Item -- on Item 4b, which is related to emissions and targets. Woodside consistently relies on the IEA Sustainable Development Scenario to justify the expansion of gas production. Given that scenario relies quite heavily on carbon capture and storage. Can the Board confirm how much Woodside will spend on CCS in 2020 and over the next 5 years? How does that -- this spend compare to other plant capital, which you've sort of touched on? And then Item 4c. Through the federal election last year, ALP and the Business Council supported the use of Kyoto carryover credit, which will effectively reduce Australia's 2030 emissions reduction target by half. Does Woodside support the Australian government's use of Kyoto carryover credits? Do you want to go back to the first at all? Or you...

Yes. Look, we can go back to the IEA Sustainable Development Scenario. It's plural, not singular. The IEA has a number of scenarios that we test our business -- forward business against. Of course, those scenarios have a number of assumptions. Carbon capture and storage is one of those assumptions for the more extreme of the scenarios as you get down below 1.5 degrees. And I mean we need to remember where the bar is set. The world has committed to a 2-degree outcome, not a 1.5 degree. That's a recommendation. And unfortunately, the nations that are signatory to these protocols has not been able to meet for the last 2 times that they'd plan to do so. And unfortunately, it's been delayed again this year through coronavirus. So here, in industry, we're trying to make decisions based on what we think the outcomes would be. We just test under a number of scenarios. As I mentioned, the advantage for a company like Woodside is carbon capture and storage is a technology that we have that's actually quite bountiful within the company. So all of the skill sets required for carbon capture and storage exist within the company. It has levels of difficulty, though. It's quite straightforward with respect to reservoir -- emissions coming out of the reservoir. They're very clean emissions. It's a lot more difficult once you get into emissions out of flue stacks and so forth. And of course, you do have to have a reservoir or an aquifer to be able to put the gas into, and that often can be many, many hundreds of kilometers away from where your site is. So I think there's a little misunderstanding here that everybody thinks that you can just capture gas out of a facility and put it directly into the ground. You can't. You have to have a storage vessel that's going to keep it there for many millennia. So that's -- we rely on those Sustainable Development Scenarios because they are independent. They are the best available to industry. They've been publicly scrutinized and tested. And so we think it's reasonable for us to test against those.

And on the Kyoto carryover credits?

Look, this is really a part of the advocacy that we have within industry associations. We understand the Australian government's current position. We're working through our associations to develop or update positions around climate change, particularly with the BCA, who will update their climate position later this year. On the Kyoto carryover credits, it's one, I think that a business would say, if you don't have to use them, that would be a better outcome. I think it's become a divisive issue, but it's one that government will address, I'm sure, once we get out of the COVID-19 response.

Thanks, Peter. Next question is from Dr. George Crisp, a representative of Doctors for the Environment Australia. Climate change has been recognized as the biggest health threat facing us this century and, increasingly, as a health emergency. The links between fossil fuel combustion and global heating are unequivocal as are the consequent adverse health effects. In view of this, has the Board sought to assess or quantify the proportion of health impacts and societal costs related to the emissions generated from their existing proposed gas developments? The answer is -- to that, specifically, would be no. We do look at what the impacts of CO2 emissions are. We do look at what, as Peter and I have said this afternoon, what we can do to mitigate our emissions and offset our emissions. And we strongly believe as -- in fact, as Australia's Chief Scientist, Alan Finkel, that natural gas, I'll quote him, is already making it possible for nations to transition to reliable and relatively low-emissions electricity supply. So I'll leave with that one on that one. The next one is from [ Athena Pezzoli ] on renewables investment, and this is quite a long question. Basically, the question is, why are we doing -- why on earth are you planting trees and doing other renewable energy type things? These poor energy solutions will soon be a thing of the past. Woodside should focus on is netting, not growing trees. And the second question, is Woodside progressing with the development of hydrogen? If so, why? Renewables aren't going to see us forward in the world. So that's a different view to the ACCR view. Peter?

Okay. Well, [ Athena ], thanks for your comments. Let me assure you, Woodside is not moving away from its netting, and it's extremely good at what it does, which is really the exploration for, development of and production, transport and marketing of gas as LNG. So we do that very, very well, and we're very focused on that. We are required, though, to ensure, as part of a number of the approvals that we have to pass through government and other regulatory bodies, to be able to demonstrate what we are doing with respect to Scope 1 and Scope 2 emissions and then also comment on Scope 3 emissions. Now Scope 1 and Scope 2 are the emissions that you generate directly out of your activities and in the transportation of your product to market. And then, of course, Scope 3 is the emissions that come from the combustion of that product by your customer. So I'd say, [ Athena ], the reality is we won't pass go with respect to approvals from the regulatory bodies if we do not address these things and demonstrate that we are taking measurable steps to offset emissions. So whilst the tenor of your question says just ignore this, you cannot ignore it. We cannot ignore it to be responsible in leading the company. We've already been clear that our view is climate change is real. It's one of those very difficult things that -- because by the time you start to see the true impact of climate change -- we may have seen some early parts of that with the bush fires on the East Coast earlier this year. And I know people will argue that one way or the other. I'm not into arguing one way or the other on it. But by the time you see the major impacts of climate change, it's really too late to rectify. So you have to act as though it's going to happen. That's the only responsible thing to do. And that's why we're taking a very measured approach to it. Your comment around the economics of renewables, I've already addressed in previous answers. And yes, the economics of renewables today are very, very challenged. And as I mentioned, governments worldwide are withdrawing their subsidies for that, and the most notable of those of the Chinese who've withdrawn on subsidies both for solar and for wind projects here in the last 12 months. So I think governments are also realizing that there's not just a social challenge here, but there is an economic challenge that we need to sustain. Finally, the question around, is our product good for the world? The answer is an unequivocal yes. And of course, it is. To move people out of poverty -- the world is growing. There will be more people on this -- filling more people on this earth by 2050. The world's growing rapidly. Prosperity, the lifestyle that we live is directly related to our access to low-cost and reliable energy sources. And at the moment, as much as we may wish that those sources came for free, they don't. And the world is currently in a transition mode. That transition is building momentum. Woodside will be part of that. Woodside wants to be here as a company in 2015 and be prosperous. And our view is both hydrocarbons and hydrogen are likely to be a very significant part of what we do.

Thanks, Peter. Two questions from Rachel Rainey on carbon assumptions and analysis. So as previously said, Woodside is using an internal carbon price assumption of $40. More recently, you said carbon capture and storage at $100 per tonne is possible. What's the internal price Woodside is now using and price being applied to the company's carbon emissions? I think you've answered that, Peter.

Yes.

And the second question was, the global energy scenarios used by Woodside are criticized by scientists, environmental groups as not consistent with the Paris Agreement. As a young person in environmental science, I wanted to know if CEO can confirm Woodside's committed to the Paris Agreement and explain why the company is using these global energy scenarios.

Well, firstly, just the first part of the question, Rachel, with respect to carbon price, I mentioned we're using $40 per tonne. And that's U.S. dollars per tonne, not Australian dollars per tonne. And then, of course, to implement carbon capture and storage at Browse is over $100 per tonne. So there's still a big price differential even between our own carbon assumptions internally. And then, of course, as I mentioned, the market itself is in the order of $20 per tonne. So if credits were traded internationally, of course, there's a huge price differential there and a huge cost to Woodside shareholders. And so we need to be mindful of that. With respect to the global energy scenarios being criticized by scientists and environmental groups, I'm not sure which scientists and environmental groups you're referring to. Of course, with any scenario, people are going to have differences of opinion. And they're going to have differences of opinion as to whether that's a 2-degree outcome or 1-degree -- 1.5-degree outcome or something different to that. But that's the advantage of democracies, and that's why we need to have these debates. Woodside uses all of those scenarios to test what we're doing. So -- and I think that's an appropriate thing to do. Whether they're criticized by scientists and environmental groups, as I said, that's -- you'd have to ask those groups why they've chosen that path and why they think something else is better. We just have all of the different options out there. We have to land on something, and that needs to be something that is generally accepted. It's not the extremes. Now with respect to the Paris Agreement, we are committed to the Paris Agreement. And so -- and the scenarios we're talking about are consistent with the Paris Agreement outcome. So I would say to you as a young person, you can be -- feel very comfortable that we at Woodside, not just the management and the Board but also the employees at Woodside, are very committed to the Paris Agreement. And if you are ever in doubt about that, please, come along and talk to some of our employees, and they can share with you some of the work that we're doing.

Thanks, Peter. We've got several questions from [ Matthew Curry ] on emissions. A couple of them are -- according to the global carbon budget produced by Stanford University this year, LNG use took over from coal as the biggest driver of global growth in carbon pollution. Given this, what information can Woodside provide to substantiate the claims that LNGs are reducing global emissions by reducing coal use? I think we've dealt with that one as well, didn't we?

Yes. Look, I'm not sure -- I'm not familiar with this particular study and that LNG use took over from coal. I'm not sure that that's factually correct. I'm open to being corrected. And I think you might find its gas use, not LNG. And as I mentioned previously, those countries that have a large proportion of gas in their energy mix, in fact, are doing particularly well with respect to their carbon emissions. In fact, the U.S., which as you know is not a signatory to Paris, has, in fact, reduced its overall gas emissions, and that's -- sorry, overall carbon emissions. And that's been principally been on the back of reducing coal use in the U.S. and a substantial increase in the use of gas. So I mentioned the U.K. before. I've mentioned the U.S. now. So I think the proof is in the pudding that gas does make a substantial difference. And shareholders of the company should be very proud of the product that their company is making and putting into the global market.

And then for the second question is, why is the company opposed to reporting Scope 3 emissions when this would provide an opportunity to prove its statements about gas being cleaner than coal in replacing coal. If the company stands by these statements that LNG use is lowering emissions, then why is it opposed to reporting Scope 3 emissions on a net basis?

Yes. Look, we have recently committed to reporting our Scope 3 emissions. So we can talk about that some more once we see those. The -- but the Scope 3 emissions itself is more on a general basis as distinct, as I mentioned before, in a customer-by-customer basis. And the reason for that is gas these days is increasingly traded. And so we are not always clear on who the actual end customer is or what company that is. We know generally which country it goes to, and so we know the emissions footprint of a particular country. But by the time the gas gets used and goes to an end consumer, then you really don't know. And I'll put into context -- that into context. One of our largest customers is Tokyo Gas, which is the major retailer of what we call town gas, or the gas that's distributed through the pipes into your homes, in Tokyo. If you think about the population of Tokyo, I think Tokyo Gas itself has something like 9 million customers. So just putting that into context is that I can't -- we can't reasonably go to each of those use points and measure how efficiently each one of those customers is using the gas. What we can do, though, is use scientifically tested ways of measuring those outputs, and that's what we do. So we do at -- we step above it. We don't get down to the individual customer level. We step above that, and we are now indicating what our Scope 3 emissions are from the products that we sell.

Thanks, Peter. A question from Rachel Deans. WA's environmental protection agencies recently issued stronger guidelines recommending that industrial polluters radically reduce their emissions and be made accountable for the damage caused by them. Business Council of Australia, of which Woodside is a member, also supports a sustainable jobs policy and transitioning to net-zero emissions by 2050. Will Woodside now accept these stronger EPA guidelines and abandon its Burrup Hub proposal by investing in modern renewable energy technologies and transitioning away from LNG to green hydrogen production? I think the answer to the second question is we certainly won't be doing that.

So look, on the WA -- the EPA's guidelines, the -- we obviously have opposed the guidelines that came out earlier in 2019. The EPA went back, then, to what we considered to be a more inclusive, more rigorous process that sought views not only from environmental groups and interested communities but also from industry. We're supportive of the new guidelines that have been issued, I believe, in draft form. But we've already indicated our public support for that.

Thank you. I'm going to take a couple more on CO2 emissions, and then I think we've probably given that a good run. Next one is from [ Mary Elizabeth Wilcox ]. Again, quite a long question, which goes to the Clean State estimates for carbon emissions of Burrup Hub in the vicinity of 6 billion tonnes over its lifetime. Sorry, can you go back and -- can you go back to [ Mary Wilcox' ] questions, please? They also say annual emissions will be 4x the size of the Adani coalmine, equivalent to 35 new coal-fired power stations every year. What are the emissions of the entire life of the Burrup Hub project? Why won't you meet with Clean State? That's the first question. The second one is, CEO said Browse is Woodside's highest carbon asset. Is development consistent with the Paris Agreement pathway? And then carbon capture storage for Browse -- and I think you've referred -- I think you've dealt with that. So have you got any response on the first one, Peter?

Look, I've read Clean State's media release. We haven't had a chance at all to, in any way, critically review the assumptions in it. As you're aware, Clean State is associated with the Conservation Council of WA. The Conservation Council of WA made very clear they're oppositioned to Woodside's plans for the Burrup Hub. So whilst we continue to engage with them in various forums, we also need to ensure that what we do is consistent with creating the best possible value, including creating jobs here in WA, and then, of course, contributing to reducing emissions globally. So I'm not going to speak to media releases that, in my view, haven't been critically reviewed.

Then there's 2 questions from Brynn O'Brien, which relate to resolution 4d, which is, what's the strategic rationale for the company's private branding the West Australian Nippers program? Couldn't we just make and disclose a philanthropic donation rather than using young children running around in Woodside singlets on the beach to promote our company's brand? And why does Woodside -- same clause, 4d. Does the Woodside Board think it's appropriate for a representative of our company to attend primary schools to teach students about drilling oil using vegemite sandwiches? Do our representatives spend time educating children about climate change? I would say -- and we found this resolution to be pretty extraordinary. Woodside contributes around -- last year, around $7 million to $8 million to community organizations, including Nippers. And anyone who lives in West Australia knows just how important the skill of swimming, swimming on the beach, lifesaving is. And without that contribution from Woodside, we wouldn't have the Nippers program that we have in West Australia. It's, I think, a fabulous community activity, and Woodside's proud to support it. And hopefully, that can be an ongoing thing that we support. In terms of education, Woodside will -- also will support appropriate education programs.

Yes. Look, I would challenge the context of the underlying theme of Brynn's question, which is -- or statement, which is why don't we just quietly hide in the shadows and make philanthropic donations? Woodsiders, as we call ourselves and our investors, should be proud of what Woodside does. The fact that we have -- are sponsoring a program which is around teaching kids how to swim at the beach, we should be very, very proud of that. And it's been one of the more successful programs that Woodside has put together in conjunction with Surf Life Saving WA. These are part of the things that we do as a company as well as supporting those who are suffering from family and domestic violence, from those who are homeless, from those who can't afford food in these difficult times. All of those programs are underway as well. To choose this program, I think, is disingenuous, to be quite frank with you. The -- Woodside does many, many, many good things in this community, and we should be rightly proud of it. With respect to our representatives going into primary schools, this is part of Woodside's outreach. It's our STEM program. As we know, there's a large challenge with respect to kids taking up science, technology, engineering in our school systems and particularly females in doing that. This -- the use of vegemite sandwiches, and I'm actually pleased that you are aware of it, was put together actually by our younger employees, our graduate group, and has been extremely successful in being able to teach children about the movement of fluid out of rocks and geology. So I think it's very important. And for those of you who are keen on carbon capture and storage, all you have to do is reverse this particular process. And whether you use vegemite in a sandwich or some other filling really doesn't matter, to be quite frank. The key here was not about doing something for Woodside. It was about teaching children about science and technology and engineering. And to that extent, our employees have been very proud, and that program has been extremely successful.

Thanks, Peter, and thank you for all the questions. I'm now going to display the voting outcome for Resolution 4a on the screen. As previously noted, this resolution has not passed. And accordingly, Items 4b to d will not be put to the meeting. However, in the interest of transparency, the proxy and direct votes received before the meeting on these resolutions will now be displayed. Thank you. That now covers the formal business of the meeting. Computershare will undertake an audit of the results, and the final results of the voting on all resolutions will be available and released to the ASX shortly after the meeting. Ladies and gentlemen, on behalf of the Board and staff of the company, I thank you for your participation today and for assisting us to convene this meeting while complying with social distancing guidelines. I'd like to thank all our shareholders and, particularly, our smaller shareholders, many of whom, in more normal times, would have made the effort to attend in person. We appreciate your ongoing support and continue to focus on delivering value for you. Stay well, look after yourselves, and I now declare the meeting closed. Thank you.