Woodside Energy : CEO speech at Leadership Matters

Meg O'Neill

CEO and Managing Director

Woodside Energy Group Ltd.

Leadership Matters, Perth

Thursday, 10 November 2022

[Check against delivery]

Good morning everyone.

I would like to start by acknowledging the traditional owners of the land upon which we meet today, the Whadjuk people of the Noongar nation. I pay my respects to their elders and leaders, past, present and emerging.

I also acknowledge:

• The Honourable Roger Cook MLA, Deputy Premier, Minister for State Development, Jobs and Trade, Tourism, Commerce and Science
• The Honourable Amber-Jade Sanderson MLA, Western Australian Minister for Health and Mental Health
• Libby Mettam MLA, Deputy Leader of the Western Australian Liberal Party and Shadow Minister for Health, Mental Health, Disability Services and Prevention of Family and Domestic Violence
• David Michael MLA, Member for Balcatta and Parliamentary Secretary to the Premier, Treasurer, Minister for Public Sector Management and Federal-State Relations
• Caitlin Collins MLA, Member for Hillarys
• Stuart Aubrey MLA, Member for Scarborough
• Hannah Beazley MLA, Member for Victoria Park
• The Honourable Dan Caddy MLC, Member for the North Metropolitan Region
• Basil Zempilas, City of Perth Lord Mayor
• Former Premier, Richard Court
• Former Treasurer and Woodside Board member, Ben Wyatt
• Woodside Chairman Richard Goyder

Thank you also to The West Australian for hosting today's event, Presenting Partner, Curtin University, and other event sponsors for your support.

I am honoured to join the ranks of other CEOs, prime ministers and premiers who have spoken over the past 20 years of Leadership Matters.

Today, we come together at the height of what the International Energy Agency is calling "the first truly global energy crisis", with supply disruptions and high prices causing stress for individuals, industries and economies across the globe.

While the crisis is playing out most vividly in Europe, which faces a bleak winter as it seeks alternatives to Russian gas, we are also seeing its effects much closer to home.

In our region, major economies such as Japan are clear that they need Australia to continue as a secure, affordable supplier of energy, including liquefied natural gas.

And in our own country, sharp increases in gas and electricity prices on the east coast have become headline issues.

These impacts are being matched by a growing intensity in public debate, as activism against oil and gas companies and their projects escalates and debate around the energy transition becomes increasingly ideological.

In this context, and now more than ever, Woodside Energy has a vital role to play in meeting energy needs around the world and supporting the energy transition.

In June, Woodside merged with BHP Petroleum business to become an even more significant supplier of energy that the world needs now and into the future.

We are now the largest energy company listed on the Australian Securities Exchange, with business interests spread across five continents - but our headquarters remain right here in Western Australia, at Mia Yellagonga, on Whadjuk Noongar country.

Today, I plan to focus my remarks on the critical role gas can play in the energy transition, arguably the most important challenge of our time, by meeting energy needs and helping the world decarbonise.

I will discuss the importance of investment in additional gas supply, some factors that threaten to undermine that investment and how, with the support of governments, we can respond.

And I will talk about the emerging role new energy products, such as hydrogen and ammonia, can play.

However, I would like to start by sharing a little about myself.

I was raised in Boulder Colorado, which is a lovely town, but I was always interested in travelling and exploring the world.

I enjoyed learning, and particularly enjoyed math and science.

When it came time to decide what to do with my life, I decided to study engineering and left home to move to Massachusetts.

My entry to the energy industry was a bit of happenstance.

I was nearing the end of my master's degree in Ocean Engineering and dropped by a career fair on campus.

I chatted with an engineer who worked in the oil and gas industry and one thing led to another and I found myself moving to Houston to start work as a research engineer.

As a young professional, the work was compelling. We were solving challenging problems to enable very large projects, and I was working with some really smart people.

I initially thought I would work in the sector for a few years, then do something different, but the work itself was constantly changing, offering new challenges and opportunities for growth.

I was able to travel extensively, learn how our industry works and how we can positively impact the countries and communities where we operate.

I was fortunate to live in places as diverse as Canada, Norway, Indonesia and now Australia - and to visit other countries around the globe.

Everywhere I've worked, I've been impressed by the passion, curiosity and talent of the people in our industry.

The energy industry does amazing work to keep lights on, homes warm, people and goods moving around the world.

And we do this work with constant focus on the health and safety of our teams, care for the environment, and respect for communities.

As CEO of Woodside, I am conscious that I am leading our company through perhaps the most significant period of change in its history.

The merger is now legally complete, but there is still a great deal of work required to build a bigger and better Woodside, one that will thrive through the energy transition as a provider of low-cost,lower-carbon energy.

So how do we do this?

It starts with Woodside's, and indeed Western Australia's, long-standing reputation as a reliable supplier of energy to global and domestic markets.

10 November 2022

Leadership Matters Speech

2

At Woodside, we exported our first LNG cargo to Japan more than three decades ago and our customers, primarily in Asia, continue to rely on us for their energy security.

Last year, Woodside operated 5% of global liquefied natural gas supply, while WA as a whole accounted for more than 12% of global LNG exports.

As Western Australians, we can all be proud of this contribution our great state is making to global energy security.

And this contribution will become even larger with development of Woodside's Scarborough project, which is on track for targeted first LNG cargo in 2026.

With less than 0.1% reservoir CO2 and a modern and efficient second processing train being constructed at Pluto LNG in Karratha, Scarborough can help balance near-term energy supply and security imperatives with longer-term climate goals.

We are also working hard to expand the suite of new energy products we can offer to new and existing customers.

We have set an ambitious target to invest $5 billion US in new energy products and lower-carbon services by 2030.

For example, our proposed H2Perth project, located in the Rockingham Industry Zone, proposes a world- scale facility to produce hydrogen and ammonia for customers in WA and internationally.

We are working actively with energy customers in Japan and elsewhere to study the feasibility of ammonia and liquid hydrogen supply chains from Australia to Asia.

Just last week, I had the pleasure of signing a non-binding memorandum of understanding with the Japan Bank for International Cooperation in Tokyo, promoting cooperation in both the LNG sector and the development of new energy products and lower-carbon services.

The potential is clear - building on our relationships and our track record as a secure, reliable energy provider, we have an opportunity to replicate the LNG export industry that has done so much to underpin energy security in our region.

Supporting energy security is also the focus of Woodside's efforts here at home.

We have been supplying domestic gas to WA since 1984 and over the past 12 months, the four gas projects we have an interest in here produced, on average, more than 40% of the state's domestic gas needs.

Trucked LNG is being loaded at Pluto LNG for delivery to customers in regional WA, for use in power generation at remote mine sites, offering a lower-carbon alternative to diesel.

And development of the Scarborough field will provide additional domestic gas to Western Australia, supporting other business investment in the state.

Following our merger with BHP Petroleum, we are also a significant supplier of gas to the eastern states, through fields in the Bass Strait that are dedicated solely to domestic supply.

Earlier this year, more gas was needed when coal was hit by outages, and we have responded by increasing our Bass Strait production over the past winter.

As a partner in the Bass Strait joint venture, we recently brought forward the release of 50 petajoules of gas for 2024 to 2026, securing sales agreements with buyers from the retailer, generator and manufacturing sectors.

To put it in context, the Australian Government estimates 50 petajoules of gas can provide the equivalent of a year's electricity supply for more than two million households.

We expect to continue supporting east coast gas supply in response to demand with the release of more volumes next year.

What the current energy crisis has reinforced, is the key role that governments play in facilitating a stable energy market.

Western Australia has to date been largely immune from the supply and price shocks we have seen on the east coast and internationally, through a combination of natural advantages and stable policy settings.

10 November 2022

Leadership Matters Speech

3

It is absolutely critical, both for our industry and for many of the businesses represented here today, that this remains the case.

The outcome of these balanced policy settings in Western Australia, is that domestic gas is provided at about half the price of gas on the east coast, and well below international spot prices.

In the east, some voices are calling for measures such as price caps or additional taxes to address the energy challenge.

That type of market manipulation would have serious long-term consequences, reducing investment in new supply making the energy shortfall and price pressure worse in future years.

As we contemplate Australia's approach to energy transition, it is essential that governments clearly define and communicate credible pathways to net zero - then business can take decisions to ensure their viability along that pathway.

Governments also need to proactively support all important lower-carbon solutions, such as carbon capture, utilisation and storage, which is recognised by the IEA and Intergovernmental Panel on Climate Change as an important technology - and one that will likely be required to meet the world's climate goals.

Investors need an efficient and effective regulatory regime that allows for appropriate consultation, protects the environment, but also provides certainty around the timeline for approvals.

Finally, the road to net zero must also be supported with stable tax and fiscal settings, which are required in order to make the large, long-term investments that support energy security, decarbonisation and economic growth.

From a Woodside perspective, we have paid more than $13 billion in Australian taxes and royalties since 2011 and $2 billion so far this year alone, including $700 million in Petroleum Resource Rent Tax.

The all-in effective tax rate in respect of our first-half 2022 profits was approximately 47%.

It is important that all voices are heard in the debate around how the energy transition unfolds.

After all, this is a truly global challenge, requiring global solutions, and developed wherever possible by global consensus.

Over time, that consensus has strengthened and perhaps the best example was the signing of the Paris Accord in 2015.

At Woodside, we are part of that consensus, and we need to do our part to address climate change.

We have set targets to reduce our net equity Scope 1 and 2 greenhouse gas emissions by 30% by 2030, on a pathway towards our aspiration of net zero by 2050.

We are investing in the products and services that our customers need, as they too reduce their emissions.

And while there is general consensus on the 'need' to act on climate change, there remains a lack of consensus on 'how' we get there.

The reality is that there are many pathways that could limit global warming to between 1.5 and two degrees.

In the IEA's Net Zero Emissions scenario, the amount invested annually for low emissions hydrogen becomes as large as what is spent on natural gas today.

In the Announced Pledges Scenario, which is associated with a temperature rise of 1.7 degrees, the amount invested in natural gas annually up to 2030 is greater than over the past five years.

Exactly how much investment in gas and hydrogen is needed is uncertain and highlights perhaps the greatest challenge for an energy company navigating the energy transition.

What we can be certain of, is that both gas and hydrogen will have a role to play.

New gas supply is needed, not just for Europe but also here in Australia, and in Woodside's target markets of Japan, China and the Republic of Korea, all of which have net zero targets under the Paris Agreement while acknowledging a continuing role for gas.

10 November 2022

Leadership Matters Speech

4

Yet some voices would have you believe that gas and all other fossil fuels can be removed from our energy systems rapidly and seemingly without consequence.

The evidence today - as we now see both in Europe and on the east coast of Australia - is that gas plays a critical role in supporting an integrated energy market, not least by firming up intermittent renewable generation.

These same voices criticise a project like Scarborough using a range of falsehoods.

So let me set the record straight.

Yes, Scarborough and Pluto Train 2 will generate emissions.

However, in 2030, they will account for less than 0.8% of Australia's national emissions.

Importantly, this assumes Australia reaches its 43% emissions reduction target and it is only half the story.

As, when used to generate electricity, Scarborough could power the homes in ten cities the size of Perth for thirty years, doing so with around half of the greenhouse gas emissions that would be produced if this electricity were generated by coal.

These facts matter because it is projects such as this that need to go ahead if we are to minimise the economic and social impacts of the energy transition.

In closing, the opportunities to transform our energy system are diverse, and different countries have different needs and approaches.

We need all options on the table if we are to successfully change the way we produce and consume energy and limit temperature rise.

Australia, and in particular Western Australia, has a vital role to play in the global energy transition, by providing affordable and reliable energy that the world needs now, and developing lower-carbon energy solutions for the future.

We need to work together to ensure there is confidence for industry to invest and help our state and nation deliver on its promise and potential across all forms of energy.

Woodside stands ready to help deliver on this promise.

Thank you.

10 November 2022

Leadership Matters Speech

5