2000 Annual Report

A Year of Outstanding PERFORMANCE

AND TRANSFORMATION CONTENTS

Chairman’s Overview 2 Managing Director’s Report 4 North West Shelf Ventures 10 Australian Gas 18 Australian Oil 22 New Ventures 26 Permit tables and maps Reserves Statement and table Sustainable Energy Solutions 38 Risk Management 40 Managing Health, Safety and the Environment 42 Community Development 46 Corporate Information 50 Financial Information 64 OUR PURPOSE

Enhancing the quality of life by meeting society’s energy needs in ways in which we are proud.

A special flame from a tray of burning natural gas hydrate produced in the joint Woodside - Curtin University pilot plant. OUR VALUES

Working Together Creativity Integrity and Trust Freedom to Act Care Respect 2000 has been an exceptional year for the Company because of its outstanding operational and financial performance and significant external events. C

CHAIRMAN’S OVERVIEW

2000 has been an exceptional year for An excellent operational performance the Company because of its from the Cossack Pioneer and Northern outstanding operational and financial Endeavour floating production, storage and performance and significant external offloading facilities resulted in the Company events. It has also been a period of being well positioned to extract the benefits major transformation as we are now of higher than anticipated oil prices and no longer dependent for our entire favourable exchange rates. This performance revenue stream on oil and gas by the Company’s oil assets greatly enhanced production from the North West Shelf the highly reliable production of LNG, Venture. This follows the successful condensate, domestic gas and LPG from commissioning of oil production from the North West Shelf Venture assets. the Laminaria and Corallina oil fields in the Timor Sea. As a result, sales revenue increased by 138.1% from A$988.8 million in 1999 to The Company continued to make A$2,353.9 million. Net profit for 2000, significant progress towards its strategic which includes A$108.7 million (after tax) growth objectives through new oil and gas from the divestment of 10% of the Greater discoveries in Australia, new gas marketing Sunrise gas and condensate fields, was initiatives in Australia and with A$966.6 million, an increase of 191.8% international LNG customers, and a over the 1999 profit of A$331.3 million commitment by the North West Shelf (including abnormals). This is the eighth Venture to the Echo-Yodel condensate consecutive year of increasing profits. development. In addition the Legendre Earnings per share in 2000 increased to oil development project will commence 145 cents compared to 49.7 cents in 1999. production in April 2001, some three Ocean Legend production facility arriving months earlier than expected. at the port of Dampier, January 2001.

Earnings & Dividends Per Share (cents) Return on Shareholders’ Funds 1996 - 2000 After Abnormal Items 1996 - 2000 150 145 140 130 50 120 45.8 110 100 40

90 82 80 30 70 60

45.0 49.7 Percent 20 19.8 19.6 19.6 50 41.2 15.3 Cents Per Share Cents Per 40 26 28.6 30 23 20 10 20 16 10 0 0 96 97 98 99 00 96 97 98 99 00 EPS (after Abnormal Items) 2 Woodside Petroleum Ltd. DPS 2000 Annual Report The record results reflect significantly The proposal was considered in detail In 2001, the Company will be seeking to higher oil prices and lower Australian with the benefit of extensive expert add further shareholder value. We expect dollar exchange rates during 2000. In advice, and the independent Directors to finalise contract arrangements with our both cases the benefits of favourable oil concluded that the proposal fell well short Japanese LNG customers and commence prices and exchange rates were offset by of any proposal that could be accepted construction of a fourth LNG processing the Company’s oil price and exchange and recommended to shareholders. train and associated infrastructure on the rate hedging position. Woodside subsequently proposed to Shell Burrup Peninsula. We will also be pursuing that the Alliance agreement signed by the development of an LNG facility in Debt at the end of 2000 was US$785 both companies in 1998 provided the Darwin. The Company’s oil-producing million, a decrease of US$415 million preferred way forward for constructive assets will be further expanded in April compared to 1999. Gearing ended the cooperation between the two companies. when the Legendre oilfields commence year at 34% compared with 50% at the production and we expect to continue to end of 1999. In late November, Shell announced a progress development plans for the take-over offer of A$14.80 and one Greater Sunrise gas and condensate fields Woodside will pay a final dividend of 60 conditional call option for each Woodside and the Vincent-Enfield-Laverda oil cents per share (fully franked) on 30 share and a proposal to transfer a large discoveries in Permit WA-271-P. In March 2001. This will consist of an 18 parcel of Shell’s assets to Woodside in parallel,Woodside has planned a major cents per share dividend (fully franked) and return for the placement of 333.3 million exploration program, with wells to be a special dividend of 42 cents per share new Woodside ordinary shares (revised drilled in a number of promising (fully franked). Together with the interim asset transfer proposal). prospects in Australia, Gulf of Mexico dividend of 12 cents per share (fully and West Africa. franked) and a special interim dividend of Woodside responded to the take-over 10 cents per share (fully franked), this offer with a Target’s Statement in late The Company will also address the makes a 2000 total dividend of 82 cents December. The Statement contained the challenge of resolving the outstanding per share (fully franked). This compares independent Directors’ formal response to issues with Shell to preserve the close with the 1999 total dividend of 26 cents the offer in the form of a recommendation strategic relationship that has existed per share (fully franked). that Shell’s offer of A$14.80 and a between the two companies for a conditional call option for each Woodside number of years. Significant external events during 2000 share should be rejected. The key reasons included Shell’s initial asset transfer for recommending rejection were: There were no changes to the proposal and subsequent take-over offer composition of the Board during 2000. and revised asset transfer proposal. • The independent expert concluded that the offer is neither fair nor reasonable; In order to deal with the matters arising out of Shell’s take-over offer and asset In March 2000,Woodside received an • The offer does not contain an adequate transfer proposals, the Board established a unsolicited proposal from the Shell Group premium for control of Woodside; and Shell Relationship Committee which met of Companies. Shell’s proposal was that • The offer does not fully reflect the a number of times during the year. Woodside should: growth initiatives of Woodside. • acquire all Shell’s upstream assets in On behalf of the Directors, I would like Australia and most of its upstream The independent Directors in preparing to thank the Managing Director, John assets in New Zealand, plus a minority the Target’s Statement, chose not to assess Akehurst, his management team and the interest in two projects in Iran, at Shell’s revised asset transfer proposal at that Company’s employees and contractors for Shell’s estimated fair market value of time as information about some of Shell’s their contributions during what was a A$7.9 billion; assets was insufficient to enable a detailed particularly busy 2000. Woodside’s • assume about A$2.1 billion of debt in recommendation to be made to shareholders achievements are a direct result of their the companies holding the assets; and within the timeframe allowed under competence, enthusiasm and dedication. • issue 428.9 million new Woodside shares Corporations Law for preparing this statement. I look forward to reviewing the to Shell, increasing Shell’s shareholding in Woodside from 34.27% to 60%. The revised asset transfer proposal is now Company’s performance and prospects being assessed with the assistance of expert with you in more detail at the Annual The independent Directors (i.e. the advice, so that a considered recommendation General Meeting to be held on non-Shell appointed Directors) decided can be put to shareholders. Wednesday 23 May 2001 at the Sheraton that acceptance would be justified only if Hotel, Perth. At the time of writing this report, Shell analysis of the proposed transaction had extended the expiry date for its take- demonstrated that it would clearly provide over offer to 12 April 2001. The offer also a significant enhancement of the capacity remained conditional upon obtaining the of the Company to deliver value to all approval of the Treasurer under the Foreign shareholders in the future. Charles Goode Acquisitions and Take-overs Act 1975. Chairman 22 March 2001

Woodside Petroleum Ltd. 3 2000 Annual Report 4 Woodside Petroleum Ltd. 2000 Annual Report Woodside people across the Company have delivered unprecedented performances, both in operational and business development areas. M

MANAGING DIRECTOR’S REPORT

Year 2000: A Big Year For Woodside The importance of the health and safety of all those affected by our activities, and With earnings and net cash flow for of the integrity of the environment in 2000 around three times 1999 levels which we operate is paramount for and with two unsolicited offers from Woodside. While we are striving to Shell designed to create a change of achieve consistent top quartile operating control of the Company, 2000 was and financial performance relative to our certainly a big year for Woodside. In global peers, the Company’s fundamental reporting to Shareholders on the philosophy remains that, if a conflict arises Company’s performance during what between safety and other business was a remarkably busy period, I would activities, safety must take priority. first like to acknowledge the outstanding dedication and In my discussions with people working on consistency of performance of the our production facilities and elsewhere in people who together are Woodside. operational roles, it is clear to me that the fundamentals of good health, safety and Despite the uncertainties generated by environmental management are in place Shell’s offers and the very high media and that the commitment of the Board profile which they received,Woodside and senior management to this high level people across the Company have delivered philosophy is fully acknowledged. Those unprecedented performances, both in in supervisory roles in the Company’s operational and business development operations clearly feel confident that they areas, to produce 2000’s excellent results. will be supported if they call a halt to I would like to thank all the men and activities because of health, safety or women who have chosen to work at environmental concerns. Building on this Woodside, almost all of whom are strong cultural starting point,Woodside shareholders, for the very high level of people across the Company are committed commitment that they have shown to the to ensuring that the rigour and discipline successful execution of their business plans of our management system, which is in in 2000 and to the creation of an exciting place to ensure the safety of colleagues future for the Company, while at the same and the integrity of the environment, will time dealing with the work load be reinforced during 2001 by a greater associated with the two Shell offers. sense of caring for the individuals for whom we have responsibility. Health, Safety and Environment Health, safety and environmental matters are dealt with in greater detail in pages 42 There was one area of real disappointment to 45 of this report as are the efforts for us all during 2000. An increased which are being directed at re-establishing number of Woodside people and others the previous trend towards zero injuries involved in the Company’s activities suffered and incidents in our activities. injuries, some of them serious. This reversed the long-term trend of reduced injuries to our people over recent years.

Woodside Petroleum Ltd. 5 2000 Annual Report Strategic Objectives • Developments: Net profit after income tax, which includes - Legendre oil fields development on A$108.7 million (after tax) derived from the In 1996, following the discovery of the time and budget divestment of 10% of the Greater Sunrise Laminaria and Corallina oil fields, gas and condensate fields, was A$966.6 Woodside embarked on a strategy to - Define preferred development plan million, an increase of 191.8% compared for WA-271-P discoveries maximise the value to be derived from its with A$331.3 million in 1999. The substantial existing asset base while, at the - Evaluate Basker, Manta and Gummy opportunity cost of oil price hedging and same time, broadening its portfolio of fields currency hedging in 2000 (after tax) was profitable new oil, gas and sustainable • Growth: A$381.6 million and A$24.3 million, energy investment opportunities. High respectively. The Company has provided - Pursue exploration of highly level strategic objectives were defined for an income tax liability on the profit of prospective oil-prone areas in as follows: Australia A$440.6 million of which A$336.7 million is current. Gas Strategy - Develop self-sustaining production • Existing Business: businesses in a small number of Woodside’s gas lifting costs in 2000 countries outside Australia through increased by A$0.08 to A$1.79 per barrel - Maximise returns from developed exploration and brownfield developments assets and current long-term contracts of oil equivalent (boe) due mainly to Sustainable Energy Solutions slightly lower gas production volumes • Growth: • Pursue a portfolio approach to the compared to 1999. As expected, oil lifting - Win profitable new LNG and development of a number of profitable costs decreased by A$3.35 (compared to domestic gas contracts sustainable energy businesses starting in 1999) to A$1.18 per barrel in response to - Position North West Shelf as a Western Australia. a full twelve months of production from the Cossack Pioneer and Northern processing hub for third parties In pursuit of these strategic objectives, Endeavour FPSOs during 2000. These unit - Monetise our Australian static gas 2000 saw the achievement of a number of cost levels place Woodside in or around resources, starting in Darwin significant milestones for the Company. the top decile with respect to competitors. - Develop a strong position as an Maximising the Value of Existing Assets eastern states gas supplier The Company’s finding cost for 2000 was In 2000,Woodside’s share of product sales A$0.61 per boe, compared to a finding Oil and Condensate Strategy increased significantly to 64.7 million cost of A$0.52 per boe in 1999. • Maintain an appropriate balance of barrels of oil equivalent (MMboe) revenues from oil, condensate and gas compared with 39.1 MMboe in 1999. At the end of 2000,Woodside’s net debt • Existing Business: Substantially increased oil production and was US$785 million, representing a net steady gas and liquids production and debt to equity ratio of 34%. Capital - Maximise value extraction from expenditure, including exploration was existing assets processing levels and improved product prices throughout 2000 resulted in an A$488 million, an increase of A$52 - Arrest declining condensate increase in sales revenues of 138.1% to a million compared to 1999. A return on production by infill drilling and record A$2,353.9 million in 2000 shareholders’ equity of 45.7% was further liquids-rich developments compared with A$988.8 million in 1999. achieved compared to 19.6% in 1999. - Seek new oil discoveries around existing infrastructure to arrest Cash flow from operating activities in Gas Developments in Australia projected natural decline in oil 2000 (before net interest and tax) was Real progress was made with the production A$1,861.4 million, an increase of 300.0% Woodside-led negotiations with major compared with A$620.4 million in 1999. Japanese customers to secure new LNG sales contracts.

Lost-Time Injury Capital Expenditure Profit After Tax Frequency Performance 1996 - 2000 1996 - 2000 1986 - 2000

25 800 216 24.0 700 1,000 967 20 600 900

554 800 500 243 15 148 700 13.4 400 600 76 500 10 A$ million A$ million 300 288 400 331

Injury Frequency 282 300 200 245 300 275 5.4

5 4.6 4.2 200 191

3.9 43 3.9 3.4 3.4 100 2.8 2.9 2.6 2.2 2.2 100 1.8 62 0 0 0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 96 97 98 99 00 96 97 98 99 00

Exploration 6 Woodside Petroleum Ltd. Property, plant & equipment, evaluation & 2000 Annual Report development By early 2001, the North West Shelf condensate. Production from Echo-Yodel announced a Letter of Intent for new Venture had signed Letters of Intent with will mitigate the effects of declining LNG supply from Darwin (details are four customers for additional volumes of condensate production due to the progressive contained on page 20 of this report). 2.4 million tonnes of LNG per annum, depletion of the Goodwyn reservoirs. The with deliveries commencing in the second development is expected to produce 37 Woodside is actively exploring for gas in half of 2004. We now expect to conclude million barrels of condensate over a four-to offshore Victoria. Two interesting gas letters of intent with at least three further five-year period commencing in 2002. prospects have been identified from seismic customers in the first half of 2001. Joint data in the Otway Basin. The Company venture approvals of the final investment In recognition of the increasing need for acquired additional interests in the Kipper decision for a fourth LNG processing train upstream LNG suppliers to become gas field and Basker-Manta-Gummy oil and on the Burrup Peninsula with a design involved in investment in new receiving gas fields in Bass Strait and established a capacity of 4.2 million tonnes per annum, terminals in order to secure LNG supply 10% founding interest, with Shell, Energy are anticipated by the beginning of April. contracts,Woodside formed a consortium Partnership Ltd and United Energy at Woodside has a 16.7% interest in this to bid for a major LNG receiving terminal 40%, 25% and 25% respectively, in a investment. and pipeline network in China in support Victorian-based energy retailer, Pulse Energy of ALNG’s preparations to bid for LNG and an energy merchant business, EdgeCap. In parallel, marketing activities by Australia supply contracts to China. The consortium, LNG Pty. Ltd. (ALNG) on behalf of the comprising Woodside, Chevron and the Oil Developments in Australia six North West Shelf joint venturers were Korea Gas Corporation was one of four Oil production from the Cossack Pioneer intensified in pursuit of two specific LNG foreign bidding consortia short-listed to is expected to commence natural decline supply opportunities of 3 million tonnes develop these facilities in association with within the next six months and Northern each per annum commencing in 2006, to a number of Chinese-based organisations. Endeavour oil production is expected to both China and South Korea. If tenders In March, it was announced that BP-Amoco see progressive decline over 2001. The for these contracts are successful, was the successful bidder. successful execution of the final stages of investment in a fifth LNG processing train the Legendre oil field development in In northern Australia, plans to realise the will also be required. which Woodside has a 45.94% interest will commercial potential of the Greater result in additional production of 40,000 On the domestic front, a conditional gas Sunrise gas and condensate fields have barrels per day at plateau levels. Production sales agreement and two memorandums of progressed with the signing of a conditional is due to commence in April 2001. The understanding for gas supply were signed Letter of Intent with a foundation gas Company will also drill several oil prospects between the North West Shelf Venture and customer, Methanex Corporation and the within tie-back distance of the Northern three potential new Western Australian inclusion of a potential customer, Osaka Endeavour and Ocean Legend during based gas customers, namely Syntroleum Gas, as an upstream partner.The signing in 2001, which if successful, will prolong the Sweetwater Operations, Plenty River late 2000 of an in-principle agreement production plateau of both assets. Corporation and Austeel Pty Ltd. The with Phillips Petroleum Company of successful start-up of these projects could Australia (operator of the Bayu-Undan The Company’s exploration activities in see the Venture supplying an additional project) to pursue a cooperative development Permit WA-271-P,west of Exmouth in 400 plus terajoules of gas per day with of both companies’ gas resources in the north-western Australia where Woodside first gas deliveries in 2003. Woodside has region was a significant achievement. has a 100% equity interest, have resulted in a 16.7% interest in these new domestic gas the discovery of three new oil fields out During the first quarter of 2001 further opportunities. of a total of five exploration wells drilled progress was made with agreement being to date. The North West Shelf Venture also reached to transfer to Phillips a 16.39% committed to the development of the interest in the Greater Sunrise fields. In Echo-Yodel gas fields which are rich in addition, Phillips and El Paso Corporation

Revenue by Product Debt & Gearing Woodside Finding Cost for all hydrocarbons- 1996 - 2000 1996 - 2000 discoveries, field extensions and revisions proven, probable and scope for recovery (A$/boe) 1990 - 2000 2,400 72

2,200 1,296 2,000 70 15 14.49 2,000 60 1,800

1,600 1,500 50 49 50 42 1,400 41 10 1,200

40 Percent 1,200 34 1,000 1,000 20 41 955 26 800 785 30

109 138 620 700 A$ /boe A$ million 13 800 103 550 554 US$ million 93 501 5 600 467 20 500 400 10 268 366 200 240 256 1.84 1.49 0.89 0.73 0.56 0.41

165 0.42 0.42 0.52 0 0 0 0 0.61 96 97 98 99 00 96 97 98 99 00 90 91 92 93 94 95 96 97 98 99 00 LPG Crude Oil Gearing (net debt/equity) LNG/Domestic Gas Condensate Debt US$M Woodside Petroleum Ltd. 7 2000 Annual Report Exploration be trucked from the onshore gas In addition to the exploration activities in processing plant on the Burrup Peninsula. Permit WA-271-P,Woodside’s International The Company has since submitted Exploration group has continued with a proposals to supply electricity on a similar series of initiatives designed to build basis to the remote Western Australian significant long-term exploration and towns of Esperance, and Exmouth. The production businesses in a small number supply of LNG is a greenhouse friendly of countries outside Australia. During substitute for diesel. In the case of 2000, the Company secured additional Esperance it is intended to be the exploration acreage in Mauritania and in precursor to a biomass project using oil the Gulf of Mexico to add to its existing mallee trees as the supply source. international oil exploration portfolio. Other key activities include an More recently, the Company secured a investment in a US-based company 15% interest in a committed gas and Ocean Power Technologies, a leading liquids development in Algeria together developer of wave energy power systems with interests in a study agreement and which use the energy in ocean wave motion onshore exploration program in the region. to generate competitively priced electricity. The Company has also invested a further Reserves A$15 million in Ceramic Fuel Cells Limited and is continuing to work closely with As a result of activities undertaken during Left to right:Andrew Mirco, Karolina Curtin University in developing synthetic Heather and Colette James members of 2000, growth in Woodside’s hydrocarbon the Corporate Finance Team. natural gas hydrate as an alternative fuel reserves at the Probable level exceeded for road transport in the future. production for the fifth year in succession. Woodside’s reserves replacement ratio was This, together with a successful appraisal 186% at the Probable level. Focussing on our People program has resulted in a significant upgrade to reserves and scope for recovery As at 31 December,Woodside’s reserves Back in 1994, the Company embarked on estimates in the permit. A combined position had increased to 919.6 million a series of major business improvement development of the Enfield and Laverda barrels of oil equivalent (MMboe) at the campaigns which have radically reduced fields is being targeted at mid-2005 with Proved level and increased to 1,192.8 operating costs, improved business initial production levels projected at MMboe at the Probable level. A full processes and created the discipline of a 100,000 barrels per day. breakdown of changes to Woodside’s comprehensive management system across hydrocarbon resource portfolio during all the Company’s activities. In 1999, it The high success rates experienced in 2000 is presented in the Reserves became clear from opinion surveys that Permit WA-271-P are largely the result of Statement in this report. many Woodside people were looking for the excellent seismic quality and the something more than best practice. There ability of the Company to enhance the Sustainable Energy Solutions was a growing desire for a more inclusive, imaging of direct hydrocarbon indicators A power purchase agreement was supportive and inspiring culture which using far offset AVO techniques. Woodside agreed with Western Power Corporation would complement the discipline of the intends to drill at least two further for the supply of electricity in the remote Company’s management systems by exploration prospects and carry out area of west Kimberley in Western liberating the creative energy of all additional appraisal work in this permit Australia which will be fuelled by LNG to employees in the workplace. during 2001.

Return on Average Capital Employed Operating Cash Flow After Probable Million Barrels of Oil Equivalent 1996 - 2000 Tax and Net Interest (MMboe) Petroleum Reserves Woodside Share 1996 - 2000 1996 - 2000 1,200 1,192.8 33 1,133.4 30.7 1,108.5 1,070.0 1,096.2 30 1,800 1,000 27 1,600 1,516 24 1,400 800 21 1,200 18 600 1,000 15 13.7 12.7 12.4 800 Percent 12 MMboe 400

10.5 A$ million 600 515 555 9 505 394 400 6 200

3 200

0 0 0 96 97 98 99 00 96 97 98 99 00 96 97 98 99 00

8 Woodside Petroleum Ltd. Gas Crude Oil 2000 Annual Report Condensate In looking for the next stage of Five-Year Comparative Data Summary performance improvement, the Company Years Ended 31 December 2000 1999 1998 1997 1996 engaged McKinsey and Co in late 1999 Profit & Loss (A$m) and, following a detailed diagnosis of Sales Revenues LNG/Domgas 620 554 550 501 467 existing organisation capability,a performance Condensate 366 256 268 240 165 leadership program was developed, in NWS Oil 317 47 109 103 93 Laminaria 979 91 - - - conjunction with Gita Bellin and Associates. LPG 72 41 20 26 13 The intention of this ongoing program, 2,354 989 947 870 738 which involved more than 1,300 employees EBITDA 1,908 587 676 661 554 during 2000, is to stimulate new ways for EBIT 1,510 443 523 510 384 Depreciation & Amortisation 398 144 153 151 170 employees to work together to achieve the Borrowing Costs/Interest Rec 102 59 52 76 76 next level of business performance Tax 441 53 170 159 117 Profit after Tax 967 331 300 275 191 through the personal development of EPS-(cents)-after abnormals 145.0 49.7 45.0 41.2 28.6 individuals and work groups. Dividends per Share-(cents) 82.0 26.0 23.0 20.0 16.0 Payout Ratio 57% 52% 51% 49% 56% The success of this transformation EBITDA/Op Cash Flow 126% 106% 172% 131% 108% program has enabled us progressively to Balance Sheet (A$m) develop more supportive and productive Capital Expenditure Exploration 243 148 216 76 43 interpersonal relationships in the work PP&E and E&D 245 288 554 282 62 place. This in turn has created the Total Assets 5,969 4,721 4,403 3,435 3,016 confidence to increase the levels of delegation within work teams with better Debt 1,415 1,835 1,583 1,081 1,007 Net Debt 1,110 1,691 1,466 1,005 876 defined accountabilities and, through the widespread use of 360 degree feedback, Shareholder Equity 2,111 1,691 1,533 1,387 1,245 has facilitated a clear understanding of Cash Flow (A$m) where further performance improvements Cash Flow from Operations 1,516 555 394 505 515 can be achieved. Investing (428) (717) (637) (325) (113) Financing (948) 212 265 (258) (412) The benefits of these changes have played Ratios (%) an integral role in enabling Woodside to ROACE 30.70% 12.40% 12.70% 13.70% 10.50% Return on Shareholders Funds 45.80% 19.60% 19.60% 19.80% 15.30% deal with the major challenges throughout Gearing 34.50% 50.00% 48.90% 42.00% 41.30% 2000 with reduced levels of stress, a Volumes greater sense of personal enjoyment and Sales LNG (Tonnes) 1,265,168 1,271,100 1,242,599 1,216,444 1,219,115 achievement and a fuller understanding of Domgas (Tj) 88,572 90,155 86,576 78,181 74,192 the true diversity of value which each Condensate (bbl) 8,759,449 8,803,565 10,823,889 9,080,221 6,730,571 NWS Oil (bbl) 7,381,405 1,914,704 4,198,358 3,748,847 3,934,938 individual brings to the work place. Laminaria (bbl) 25,410,972 2,640,596 - - - LPG (Tonnes) 127,631 137,439 100,897 88,704 51,633 Conclusion Total BOE 000’s 64,726 39,140 39,634 35,941 33,113 Production LNG (Tonnes) 1,279,944 1,291,740 1,285,232 1,255,290 1,252,949 During 2000,Woodside has continued to Domgas (Tj) 88,572 90,155 86,576 78,181 74,192 Condensate (bbl) 8,935,707 9,130,320 10,159,324 9,182,002 7,199,067 deliver against its key strategic objectives. NWS Oil (bbl) 7,068,042 2,281,375 3,955,874 3,648,807 4,316,060 We have extracted a high level of value Laminaria (bbl) 25,591,993 2,657,409 - - - from our existing business which exhibits LPG (Tonnes) 133,655 107,978 111,952 92,100 56,199 a high return on equity and unit operating Total BOE 000’s 64,988 39,735 39,270 36,312 34,232 and unit finding costs which benchmark Reserves Gas well against competitors. We have made Probable (Tcf) 4.60 4.72 4.63 4.68 4.46 good progress with our capital investments Condensate Probable (MMbbl) 149.4 159.2 158.9 161.2 164.1 and gas marketing activities and we have NWS Oil made a number of important exploration Probable (MMbbl) 31.4 36.8 34.7 36.8 40.5 Laminaria discoveries. The Company now has a Probable (MMbbl) 62.2 89.0 102.6 77.1 83.0 comprehensive opportunities portfolio and Legendre Probable (MMbbl) 20.3 20.3 - - - is well positioned to fund and to resource Vincent & Enfield the investment program it requires to Probable (MMbbl) 122.5 - - - - meet its long-term growth targets from its Other own cash flow. It has certainly been a big Employees 2,198 2,141 2,365 1,661 1,332 year for Woodside. Shares High $15.25 $12.25 $10.86 $13.36 $9.19 Low $9.30 $7.10 $6.80 $8.66 $6.61 Close $14.75 $11.25 $7.30 $10.82 $9.19 Number (000’s) 666,666 666,666 666,666 666,666 666,666

J H Akehurst Number of Shareholders 42,135 43,201 43,898 34,526 30,669 Market Capitalisation (A$m) 9,833 7,500 4,867 7,213 6,127 Managing Director Finding Costs (A$/BOE) 0.61 0.52 0.73 0.42 0.42 22 March 2001 Effective Tax Rate 31.3% 13.8% 36.2% 36.6% 38.1%

Woodside Petroleum Ltd. 9 2000 Annual Report 10 Woodside Petroleum Ltd. 2000 Annual Report Woodside’s existing North West Shelf Venture business delivered a sound operational performance in 2000. N

NORTH WEST SHELF VENTURES

Woodside’s existing North West third Woodside Environment award for Shelf Venture business delivered a developing a process to re-route flash gas sound operational performance in to LP fuel. This will enable the amount of 2000 with production and processing hydrocarbon gas vented from the LNG volumes for most major products sulfinol process to be reduced, which in exceeding target levels. turn will reduce the plant’s Greenhouse emissions by 300,000 tonnes of carbon The Cossack Pioneer floating production, dioxide equivalent per annum. storage and offloading facility (FPSO) has continued to perform exceptionally well since the completion of a major upgrade at the end of the first half of 1999.

The environmental management performance of the onshore gas plant during 2000 was particularly notable through the achievement of record production and processing levels without a single reportable environmental incident or an environmental licence exceedance. The plant was also presented with the

Marine Biologist working on the Dampier Archipelago (photo courtesy of the Western Australian Museum)

Woodside Petroleum Ltd. 11 2000 Annual Report NWSV participants signing Letters of Intent for the sale and purchase of one million tonnes of LNG per year with representatives from Tokyo Gas Co., and Toho Gas Co., Ltd.

Liquefied Natural Gas additional spot sales in 2001 although Woodside’s share of Domgas sales from the The North West Shelf Venture sold 128 realising this potential will be challenging North West Shelf Venture averaged 242 cargoes of LNG to Japanese customers in as it will require access to additional LNG Tj/d during 2000 compared with 247 2000. In addition to the contract sales to shipping capacity which is in short Tj/d in 1999. existing customers, four cargoes were sold supply worldwide. Gas marketing highlights in 2000 include on a FOB basis to CMS Energy in the Woodside’s share of 2000 LNG significant progress towards securing three USA and one to the Korea Gas production was 1,279,944 tonnes potential new Western Australian based gas Corporation, taking the North West Shelf compared with 1,291,740 tonnes in 1999. customers with the signing of: Venture’s total sales in 2000 to 133 cargoes. • A conditional gas sales agreement with This total includes two cargoes purchased Domestic Gas (Domgas) by the Venture as replacements for Syntroleum Sweetwater Operations Production of Domgas for the Western Ltd for 130 Tj/d of gas to a proposed scheduled deliveries which were disrupted Australian market during 2000 was slightly gas-to-liquids plant. First gas may be by the unscheduled shutdown of LNG less compared with the same period in supplied as early as October 2002; train one in October 2000. 1999, largely as a result of reduced • A Memorandum of Understanding The existing Japanese customers continue demand from BHP’s Direct Reduced Iron with Plenty River Corporation to support the North West Shelf Venture plant in Port Hedland. Production during Limited for 70 Tj/d of gas to a with deliveries to Japan in 2001 currently the period averaged 484 terajoules per day proposed ammonia-urea plant. First gas planned at 127 cargoes. Potential exists for (Tj/d) compared with 494 Tj/d in 1999. may be supplied as early as 2003; and

12 Woodside Petroleum Ltd. 2000 Annual Report LNG & Domgas Production

LNG 2000

Production Deliveries Tonnes Tonnes (Woodside share) Q1 335,522 343,458 Q2 311,520 286,300 Q3 331,208 314,486 Q4 301,694 320,924

Total 1,279,944 1,265,168

1999 Production Deliveries Tonnes Tonnes

Q1 317,175 330,416 Q2 309,105 285,102 Q3 339,754 313,267 Q4 325,706 342,315

LNG Sales Cargoes to Japan & Third Parties Total 1,291,740 1,271,100 1996 - 2000 160 Domgas 2000 1999 140 6 5 3 5 4 Deliveries Deliveries Tj/d Tj/d 120 128 128 128 125 127 (Woodside share) 100 Q1 235 238 80 Q2 235 242 • A Memorandum of Understanding Cargoes Q3 237 260 with Austeel Pty Ltd for 315 Tj/d of 60 Q4 259 246 gas to a proposed integrated iron and 40

steel project. This project has since 20 been restructured and its gas Average 242 247 0 requirements are now expected to be in the order of 200Tj/d. 96 97 98 99 00 Third Parties Woodside’s interest in each of these new Japan domestic opportunities is 16.7%. Domgas Sales 700 1996 - 2000 LNG & Domgas Revenue 600 2000 1999 494 500 474 484 428 405 Revenue A$m 400 Q1 160.6 139.6

Tj/d 247 300 237 Q2 147.0 133.9 214 242 203 Q3 151.6 142.9 200 Q4 161.2 138.1 100 Total 620.3 554.5 0 96 97 98 99 00

100% Woodside Petroleum Ltd. 13 Woodside Share 2000 Annual Report Left to right; Bernard Viney, Helen Harvey and Wynne Jones participating in a NWSV emergency response exercise.

Condensate LPG Crude Oil Condensate production averaged 98,864 LPG production was 133,655 tonnes in Production from the Cossack Pioneer barrels per day (bbl/d) in 2000 compared 2000 compared to 107,978 tonnes FPSO in 2000 averaged 115,869 bbl/d, to 101,000 bbl/d in 1999. Woodside’s share in 1999. which represents a significant improvement of condensate production was 8,935,707 compared with the facility’s performance barrels (bbl) compared with 9,130,320 bbl Woodside’s entire 2000 entitlement to of 85,000 bbl/d before the upgrade. in 1999. Production levels were higher LPG was sold into Japan, completing a than expected due to the sustained three-year term contract. Woodside Woodside’s share of Cossack crude oil performance of the Goodwyn reservoir. entered a new three-year term contract to production in 2000 was 7,068,041 barrels sell its LPG entitlement to an existing compared with 2,281,375 barrels in 1999. During 2000,Woodside continued to customer, commencing in January 2001. maintain a balance between spot and term Approximately 45% of Woodside’s sales to domestic and export customers. entitlement to Cossack crude oil was Approximately 40% of Woodside’s sold under term contracts during 2000. entitlement to condensate was sold on a Approximately 50% of Woodside’s spot basis allowing the Company to secure entitlement was sold to Australian sales at the then prevailing firm spot refineries with the balance exported market price. The balance was under to the United States and Asia. term contracts. Export sales accounted for 80% of sales volumes.

14 Woodside Petroleum Ltd. 2000 Annual Report Condensate Production/Revenue 2000

Production Sales Barrels Barrels (Woodside share) Q1 2,444,036 2,183,607 Condensate Sales Q2 2,334,609 1,982,088 1996 - 2000 Q3 2,045,611 2,651,975 10.8 Q4 2,111,451 1,941,779 11 10 9.1 Total 8,935,707 8,759,449 9 8.8 8.8 8

2000 1999 7 6.7 Revenue (A$m) 6 Q1 79.4 60.0 5 Q2 79.3 45.5 MMbbl 4 Q3 122.7 77.2 3 Q4 84.5 73.3 2

1 Total 365.9 256.0 0 96 97 98 99 00

Cossack Crude Oil Production/Revenue 2000

Production Sales Barrels Barrels (Woodside share) Q1 1,735,362 2,071,658 Q2 1,763,846 1,348,539 Q3 1,683,245 2,042,437 Q4 1,885,589 1,918,771 Cossack Crude Oil Sales 1996 - 2000

Total 7,068,042 7,381,405 8 7.3 7 2000 1999 Revenue (A$m) 6 Q1 74.4 0.8 5 4.2 3.9 Q2 56.2 - 4 3.7

Q3 99.8 18.3 MMbbl 3 Q4 87.0 27.6 2 1.9

1 Total 317.4 46.7 0 96 97 98 99 00 LPG Production/Revenue 2000

Production Sales Tonnes Tonnes (Woodside share) Q1 35,156 - Q2 36,335 38,920

Q3 31,479 44,133 LPG Sales Q4 30,685 44,578 1996 - 2000

14 137.4 Total 133,655 127,631 127.6 12

2000 1999 100.9 10 Revenue (A$m) 88.7

Q1 - 10.6 8 Q2 20.8 - 6 Q3 23.1 12.9 51.6 000 tonnes Q4 27.7 17.2 4

2 Total 71.6 40.7 0 96 97 98 99 00

Woodside Petroleum Ltd. 15 2000 Annual Report Japanese LNG Market Outlook take 38 months and will be completed in During 2000, the structure of the time to meet customer requirements in commercial negotiations between the mid-2004. North West Shelf Sellers and Japanese Woodside expects further negotiations LNG customers for additional LNG sales with both existing and new Japanese LNG volumes changed with the eight existing customers will result in additional sales customers and a new customer,Tohoku volumes being contracted to Japan over Electric, negotiating their LNG the next two years. requirements individually rather than as a consortium as had previously been the Echo-Yodel Condensate Development case. The Japanese customer-consortium Planning for the Echo-Yodel condensate of the eight original customers remains in development progressed during the first place for the existing contracts. half of 2000, culminating in an expected The North West Shelf Sellers made final investment decision in the third significant progress towards securing quarter of 2000. additional LNG sales volumes during The Echo-Yodel fields are 23 kilometres the year. from the Goodwyn-A offshore production In late September, Letters of Intent for a platform.The development is based on total of one million tonnes of LNG per two sub-sea production wells tied back to year from mid-2004 for a 25-year period the Goodwyn platform for processing, were signed with Tokyo Gas and Toho with production being exported to the Gas. In early 2001, Letters of Intent were onshore gas plant via the existing sub-sea signed with Osaka Gas for one million trunkline. It is designed to take advantage tonnes per year over a 30-year period and of spare condensate processing capacity on Tohoku Electric for 400,000 tonnes per the Goodwyn platform post-2000 as year over a 15-year period. These will be Goodwyn condensate production declines. followed by Sales and Purchase It also provides the infrastructure to Agreements during 2001. develop further satellite fields in the wider Echo-Yodel area. In early 2001, key commercial terms had been agreed between the North West Production of 37 million barrels of Shelf Venture and customers for a further condensate and 0.4 trillion cubic feet (Tcf) 1.3 million tonnes per year. Letters of of recoverable gas are expected over an estimated five-year field life. Start-up is LNG storage tank at the onshore gas Intent for these additional volumes of plant on the Burrup Peninsula. LNG are expected to be concluded by planned in the first half of 2002 at 27,000 mid 2001 with Sales and Purchase barrels per day of condensate and the Agreements to follow later in the year. capital expenditure budget is about A$200 million (Woodside’s interest 16.7%). The new LNG sales volumes to Japan will underpin a A$2.4 billion expansion of the Modifications to equipment on the North West Shelf Venture’s gas processing Goodwyn platform for the tie-ins to the facilities (Woodside’s interest 16.7%).This processing equipment were completed will include the construction of a fourth during a planned maintenance shut-down LNG train capable of processing 4.2 in late 2000 in readiness for the next stage million tonnes per year, a 42-inch sub-sea of this development. gas trunkline and associated infrastructure, beginning in early 2001. The engineering, procurement, construction and commissioning activities are expected to

16 Woodside Petroleum Ltd. 2000 Annual Report Non-Japanese LNG Markets Since commencing operation in mid- 1999,Australia LNG (ALNG) has been pursuing a range of LNG market opportunities, outside of Japan, based on the uncommitted gas reserves of the Greater North West Shelf.

ALNG has continued to pursue LNG sales opportunities in Taiwan, China, Korea and India throughout 2000.

In Taiwan,ALNG has been working with a number of companies to supply LNG to Taipower’s planned 4,000 megawatt power station in northern Taiwan. Progress with this LNG supply opportunity depends on the power station project proceeding and selection of the preferred gas supplier.

A proposal to supply three million tonnes per annum to the Guangdong LNG project in China from 2005 was submitted to Chinese officials in April 2000 during a visit by ALNG and the Managing Directors of each of the North West Shelf Venture Sellers. A formal LNG supply tender is expected to be issued in the first half of 2001 and the preferred LNG supplier is expected to be announced during the second half of 2001.

ALNG is also developing new LNG market opportunities in India and other countries in the Asia-Pacific region and is actively working opportunities in South Korea to supply LNG. South Korea is the second largest importer of LNG after North West Shelf Venture Exploration BP-Amoco’s share of exploration costs of Japan and offers significant LNG supply In mid-2000,Woodside acquired BP- A$8.5 million in these permits over the opportunities as the Asian economies Amoco’s rights to undeveloped oil next three years. continue to improve. discoveries and future oil discoveries in Two oil exploration wells were drilled in Australia is well placed to meet Korea’s the North West Shelf Venture area. This the North West Shelf Venture’s acreage in additional LNG requirements through included BP-Amoco’s one-sixth share of the second half of 2000 in search of ALNG which is pursuing long-term reserves associated with the undeveloped opportunities to use future spare capacity supply and winter peak cargo opportunities Egret and Dixon oil discoveries and BP- on the Cossack Pioneer FPSO. with the Korea Gas Corporation. The Amoco’s one-sixth share of any subsequent Unfortunately, both the Cavalier-1 well in timeframe in which these sale oil discoveries. In return,Woodside Licence WA-9-L and the Castor-1 well opportunities may be realised will be assumed the costs associated with in Licence WA-5-L failed to find influenced by the timing of plans to break exploring and developing these resources hydrocarbons. However, the Gaea-1 up the Korean Gas Corporation into as well as carrying A$4 million of BP- gas/liquids exploration well drilled in late separate business units and subsequent Amoco’s costs in the North West Shelf 2000, encountered a 30-metre gross gas privatisation of these business units. Venture project area in 2000. column in the upper reservoir and a 210- Under a separate arrangement, the metre gross gas column in the lower Company will provide BP-Amoco with reservoir. This discovery is located half- additional equity in three gas exploration way between the Goodwyn-A and North Permits WA-294-P,WA-296-P and WA- Rankin-A offshore production platforms 297-P in the offshore Canning Basin, and is considered to be economically while retaining a strategic 16% interest in viable although no decision has been each permit. Woodside will also cover made on the timing of development.

Woodside Petroleum Ltd. 17 2000 Annual Report 18 Woodside Petroleum Ltd. 2000 Annual Report During 2000,Woodside continued to make significant progress toward its strategic objective of commercialising its Australian Gas resources. A

AUSTRALIAN GAS

During 2000,Woodside continued to petajoules of gas per year to a proposed make significant progress towards its large-scale synthesis gas generation facility strategic objective of commercialising near Darwin in northern Australia. This is its Australian gas resources by becoming an important step towards securing a a major gas supplier to the Northern foundation customer to underpin the Territory as well as developing a strong development and commercialisation of the position as a major gas supplier to Sunrise, Sunset and Troubadour (Greater eastern Australia. Sunrise) gas and condensate fields, enabling City of Darwin. the Company to pursue additional gas The Company’s activities in support of its market opportunities in the Northern strategic objective have been focussed on Territory and in eastern Australia. five key areas, namely: Methanex has since established a presence • The development of domestic gas market opportunities and LNG in Darwin and has worked closely with processing in Darwin; Woodside as operator of the Sunrise gas project, to resolve outstanding issues to • Divestment of a portion of Woodside’s enable the project to proceed to a final 66% equity in its northern Australian gas resources to support investment decision. Commercial commercialisation activities through the negotiations with other potential gas inclusion of potential customers or new customers in the region are being strategic joint venture partners; progressed. These include Nabalco which operates the alumina refinery at Gove • Acquisition of gas resources in eastern Australia to accelerate the development and the Northern Territory Power and of these reserves to satisfy the demand Water Authority. and diversity of supply requirements of eastern Australia; Marketing activities for Timor Sea gas reserves also extended beyond the • Exploration activities in the Gippsland Northern Territory with the Company and Otway Basins to identify new gas participating in a proposal to the supplies close to markets; and Queensland Government to provide gas • Direct involvement in energy retailing supplies to a power project in Townsville. activities to develop relationships and Long-term plans to take Timor Sea gas to market knowledge to assist in the the other eastern states markets have capture of market opportunities. continued via commercial discussions with infrastructure providers, aimed at providing Northern Australia the necessary pipeline infrastructure between Darwin and the gas supply hub at In early 2000,Woodside signed a Moomba, as the market grows. conditional Letter of Intent with Methanex Corporation for the supply of 110

Woodside Petroleum Ltd. 19 2000 Annual Report In mid-2000,Woodside’s development Eastern Australia plans for the Greater Sunrise area were enhanced through the divestment of 10% Woodside’s participation in the eastern of the Company’s interest in the Greater Australian energy market was strengthened Sunrise gas and condensate fields to Osaka during 2000 with the acquisition of Gas for US$67.2 million. This area additional Bass Strait interests from Shell. A contains Scope for Recovery volumes 27.5% interest in Retention Lease estimated to be 9.17 Trillion Cubic Feet of VIC/RL2, containing the majority of the Dry Gas and 321 million barrels of Kipper gas field, was purchased for A$42.6 condensate at the Probable level. million, increasing Woodside’s interest in VIC/RL2 to 30%. A 94.04% interest in Onshore gas The divestment of upstream equity is plant at night. exploration permit VIC/P19B, containing consistent with the Company’s previously 100% of the Basker oil discovery and stated strategy of introducing new partners approximately 90% of the Manta and to improve commercialisation prospects for Gummy gas discoveries was purchased for these world-class gas resources. Osaka Gas A$10.0 million, increasing Woodside’s has extensive gas distribution and marketing interest in VIC/19B to 100%. knowledge in Japan and is a significant potential gas customer in its own right. Retention Leases were granted to Woodside over blocks containing the In late 2000, the Company’s plans were Basker, Manta and Gummy discoveries to further enhanced when in-principle allow future development options to be agreement was reached with Phillips assessed. The remainder of Bass Strait Petroleum Company of Australia to pursue exploration permit VIC/P19 (50% co-operative development of the two Woodside interest) was relinquished after companies’ gas resources in the Timor Sea. technical studies failed to identify any The agreement is designed to combine the drillable prospects. However, technical early gas delivery potential of the Phillips studies conducted in 2000 suggest that a operated Bayu-Undan gas and condensate gas development involving Kipper, Manta development to meet customers’ initial gas and Gummy fields is likely to be feasible in requirements (operations are planned to a 2005 timeframe. Further studies are commence in 2004) with the large reserve planned in 2001 to confirm this. base of the Greater Sunrise fields. This arrangement will see Greater Sunrise Two significant gas prospects were commence gas production as soon as either identified in Woodside’s Otway basin domestic or LNG markets require permits VIC/P43 and T/30P from seismic additional gas volumes. survey data acquired during 2000. Up to two wells are planned in 2001. During early 2001,Woodside, Phillips and Shell have been working on finalising Woodside also secured its involvement in the co-operative arrangement. energy retailing in eastern Australia through the establishment of a new energy retailer, In late February 2001,Woodside agreed to Pulse Energy which is owned by United transfer to Phillips a 16.39% interest in the Energy Ltd (25%), Energy Partnership Greater Sunrise fields. In return, Phillips (25%), Shell Australia (40%) and Woodside agreed to pay Woodside’s capital costs for (10%). Pulse Energy currently services the development in Sunrise permit NT/RL2 to requirements of more than one million the value of US$176 million, escalated at Victorian energy customers. 10% nominal per year. In early March 2001, Phillips and El Paso Corporation announced Further deregulation of eastern Australian a Letter of Intent which is intended to result energy markets was planned to commence in the delivery of 4.8 million tonnes of LNG from January 2001 which would have provided per year from a new LNG plant in Darwin. Pulse Energy with access to additional Deliveries will commence as early as 2005 customers and enable it to offer Australia’s for an expected period of twenty years. first large-scale combination of electricity and gas services to energy consumers.

20 Woodside Petroleum Ltd. 2000 Annual Report As a result of the delays in energy market China LNG Terminal Tidco LNG Regasification and deregulation, Pulse Energy is actively In early 2000,Woodside formed a Power Project looking for merger and partnership consortium to bid for the Guangdong The Dakshin Bharat Energy Consortium opportunities in other parts of the east LNG import terminal and pipeline (Woodside’s interest 15%) is continuing to coast of Australia to increase its customer network in China. The consortium progress plans to finance, build, own and base, reduce supply costs and increase the comprised Woodside, Chevron and the operate a US$1.6 billion LNG importation profitability of its business. Korea Gas Corporation. terminal and power station at Ennore, in the State of Tamil Nadu, in south-east India. Woodside also has an interest in an energy The Guangdong LNG Project is sponsored merchant business EdgeCap, which was by the Chinese State Development and In early 2000, the project was restructured formed in October 2000. EdgeCap is Planning Commission, China National to secure the support of the Indian owned by United Energy (50%), Shell Offshore Oil Company, Shenzhen Government’s Ministry of Power through (40%) and Woodside (10%) and has Investment Holding Company, Guangdong signing a Joint Development Agreement commenced trading electricity and gas in Electric Power Holding Company and and commencing Power Purchase the wholesale energy market. EdgeCap Guangdong Gas Company, which between Agreement negotiations with the federal also provides risk management and hedging them will hold 70% of the project.The Power Trading Corporation. Back to back services to Pulse Energy. successful foreign consortium will hold 30%. negotiations are also underway with the Woodside’s investment of A$30 million to Tamil Nadu Electricity Board and The proposal includes the development, neighbouring State Electricity Boards to secure a 10% interest in Pulse Energy and financing and construction of LNG EdgeCap is designed to enhance the agree the electricity off-take quantity receiving and regasification facility with commitments and payment support Company’s prospects of commercialising its initial capacity of three million tonnes per eastern and northern Australian gas interests. mechanism. Negotiations and discussions annum, and the first phase of a transmission with LNG supplier RasGas are being trunkline around the Pearl River Delta. conducted in parallel with the power Downstream Investment The project is expected to involve capital purchase agreement negotiations. Opportunities expenditure of up to US$600 million, with commissioning in 2005. During the year, the consortium conducted In late 2000, responsibility for Woodside’s the LNG terminal engineering, strategy to pursue potential downstream In October, the consortium was one of procurement and construction contract investment opportunities to enhance the four bidders short-listed for a second round tendering process and is negotiating details commercialisation of the Company’s of bidding. The second round bid was with a preferred contractor. undeveloped upstream gas resources was submitted in November 2000. In March moved to the Australian Gas business unit 2001, BP-Amoco was announced as the following the restructure of Woodside’s preferred terminal bidder. Downstream Development business unit. Two key business opportunities were progressed in this area during 2000.

City of Melbourne.

Woodside Petroleum Ltd. 21 2000 Annual Report An Echidna, resident of the Burrup Peninsula. 22 Woodside Petroleum Ltd. 2000 Annual Report The Northern Endeavour’s performance in 2000 has been outstanding A

AUSTRALIAN OIL

Laminaria and Corallina Oilfields of increase in water production have been The performance of the Northern largely as predicted. Coincident with the Endeavour floating production, storage onset of water, the oil producing capacity and offloading facility (FPSO) in 2000 of individual wells has declined. This effect was outstanding in achieving an is typical of watercut wells. The decline in average production rate of 148,451 productive capacity has been in line with barrels per day (Woodside’s share models constructed for the field development 71,466 barrels per day). In early 2000, plan but more pronounced than forecast production of 180,000 barrels per day in more recent models. Operational was achieved during high-rate testing, adjustments have largely mitigated the demonstrating the facility’s capacity to short-term impact of the effect. produce at rates higher than its The interpretation of reprocessed nameplate capacity of 170,000 barrels 3-D seismic data over the Laminaria and per day. Total production during 2000 Corallina oilfields was completed was 54.3 million barrels, 6% higher during the year and reserves estimates for Ocean Legend ready for offloading than originally expected (AC/L5 share Laminaria Phase-1 were updated in late following a 44-day sail from the US. 50.4 million barrels). 2000 to incorporate production data The performance of the operations and revised reservoir modelling. As a team on this facility was exceptional as result, no material change was made to they achieved “oil uptime” availability of previous estimates of expectation level oil 95% which benchmarks favourably against reserves, but proven levels have increased. world best practice for FPSOs. The Planning for a Phase-2 Laminaria facility did experience a fire in the development consisting of two additional debutaniser run-down cooler in late horizontal infill production wells was October resulting in modifications to completed in early 2001. The wells will the seawater/firewater system to prevent be completed by mid-2002 and will add a similar occurrence in future. The incremental reserves of 9 million barrels at operations team was able to recover the Probable level as well as enabling the production within two days and full production of both incremental reserves production resumed within eight days. and accelerated oil volumes of between Production and reservoir behaviour have 15 to 19 million barrels in the period been largely in line with expectations. 2002 to 2003. Onset of water breakthrough and the rate

Woodside Petroleum Ltd. 23 2000 Annual Report Northern Endeavour support vessel Total Provider assisting the Olympic Spirit offtake tanker.

Laminaria Crude Oil Production/Revenue Plans were matured for the drilling of an In 2000,Woodside sold approximately 2000 exploration well on the Pandorina 75% of its entitlement under a variety of structure in Permit AC/P8 which is term contracts. Approximately 55% of Production Sales Barrels Barrels within tie-back distance of the Northern Woodside’s entitlement was processed in (Woodside share) Endeavour FPSO. In addition,Woodside Asia and only 5% in Australia. The balance Q1 5,520,573 5,515,964 is now operator of the adjacent ZOCA was consumed in the United States. Q2 6,518,595 5,805,289 91-01 Production Sharing Contract Q3 6,977,968 7,502,958 (Woodside interest 40%) which contains Legendre Oilfields Development Q4 6,574,857 6,586,761 the Kuda Tasi prospect. Both prospects During 2000, excellent progress was made were drilled in early 2001. The in the development of the Legendre Total 25,591,993 25,410,972 Pandorina-1 well was dry and the Kuda North and Legendre South oil fields, 34 Tasi-1 well encountered a 17.5-metre kilometres south-east of the Wanaea and 2000 1999 gross oil column. Revenue (A$m) Cossack fields in Production Licence WA-20-L (Woodside’s interest 45.94%). Q1 169.4 - In late 2000,Woodside finalised an Q2 200.1 - agreement with BHP Petroleum (BHPP) Engineering, construction and Q3 322.5 - on the timing of payment and procurement activities are progressing in Q4 286.7 90.9 arrangements for receipt of a production line with the targets established at project entitlement to be paid by BHPP to sanction. Oceaneering International Inc. Total 978.7 90.9 Woodside. The entitlement is part of the completed conversion work on the Ocean 1994 farmin agreement between the two Legend from a jack-up drilling rig to a companies, where BHPP undertook to production facility in early November. pay a 5% production entitlement on the The facility was transported to Dampier Laminaria Crude Oil Sales 16.67% interest earned, payable once in Western Australia on the heavy-lift 1999 - 2000 project revenues match project costs. As a vessel Transshelf, arriving in early January

26 25.4 consequence Woodside accepted a 0.833% 2001. The Legendre Venture will pay 24 production entitlement “in kind” through Oceaneering an agreed day rate for 22 modifications to the Northern Endeavour production services utilising the Ocean 20 offtake schedule. Legend. Oceaneering own the facility 18 and will be responsible for its installation 16 As a result of a full twelve months of 14 and ongoing operation, manning and production from the Laminaria and 12 maintenance. 10 Corallina oil fields, Laminaria crude has MMbbl 8 established itself in the oil market and is A contract to provide a tanker to be used 6 now well recognised by the key as a floating storage and offloading facility 4 2.6 consuming markets of refining and 2 (FSO) was signed with Karratha Spirit 0 petrochemical production. Limited (a wholly-owned subsidiary of 99 00

24 Woodside Petroleum Ltd. 2000 Annual Report Teekay Shipping-Canada) in late 2000. Work This followed completion of screening The work program in 2001 will consist of to convert a tanker to the FSO, is under studies which demonstrated that, at the field development planning for Enfield, way at the Keppel shipyard in Singapore. time, a stand-alone field development of and further and ongoing studies for The FSO will be known as the Karratha Enfield was likely to be commercially viable. Vincent, with a possible appraisal well Spirit and, in a similar manner to the being drilled in the third quarter of 2001. Ocean Legend, it will be owned and Studies were also conducted on the Feasibility studies will be undertaken on operated by Karratha Spirit Limited with adjacent Vincent oil accumulation, which the Laverda field, possibly leading to an the Legendre Joint Venture paying an agreed is assessed to be larger than Enfield. The appraisal well some time in the second day rate for storage and offloading services. development of the Vincent field is half of 2001. technically more challenging and it straddles All the components of the crude oil the border with Permit WA-155-P. Exploration activities in 2001 will include export system (sub-sea flowlines, CALM at least two exploration wells being drilled buoy and anchor system) were An Enfield appraisal well drilled in the during the year. The first exploration well manufactured and ready for installation at fourth quarter of 2000 encountered a Montesa-1, was completed in March 2001 the end of 2000. 49.3-metre gross oil column which flowed and was dry. Consideration will be given at 7,026 barrels per day and 1.58 million to the acquisition of either a 2-D or 3-D Installation of the Ocean Legend and standard cubic feet of gas per day. This was seismic survey in the western part of associated equipment together with the followed by the drilling of the Laverda-1 Permit WA-271-P. drilling of the first of four horizontal exploration well, a prospect within tie- production wells and one gas re-injection back range of the Enfield development A range of possible start-up dates exist for well, commenced in mid-January. The which encountered a 61-metre oil column these oil fields. Enfield could be installation work for the export pipeline and a 9-metre gas column. developed as early as late-2004 on a stand- and mooring buoy is being carried out by alone basis, or by mid-2005 as a combined Coflexip Stena Offshore utilising the The exploration and appraisal results to development with Laverda. In contrast, vessel CSO Venturer and the five date, assessed in the light of recent seismic the Vincent field is more likely to be production wells are being drilled by the data, indicate that Permit WA-271-P developed in combination with Enfield Ensco 56 jack-up drilling rig. contains reserves and scope for recovery of and Laverda. The start-up date of more than 254.4 million barrels. This a combined development could be At the end of February 2001, the project consists of Enfield reserves and scope for around 2006. was 78% complete. The projected start-up recovery of 62.6 and 18.1 million barrels of oil production is early in the second respectively;Vincent reserves and scope for Basker-Manta-Gummy Oilfields quarter of 2001 and maximum production recovery of 59.9 and 57.5 million barrels During 2000, screening studies to of 50,000 barrels per day is expected. The respectively; and Laverda scope for determine the commercial viability of capital expenditure budget remains recovery of 56.3 million barrels. developing the Basker-Manta-Gummy unchanged at A$110 million (Woodside’s oilfields were undertaken and these have share 45.94%). The Company has also identified at least four more prospects from current 3-D progressed to the stage where development In March 2001,Woodside commenced seismic data and a number of additional concepts are now being evaluated. drilling the Delilah-1 exploration well in prospects and leads have been identified In 2001, the Company will evaluate Permit WA-208-P. This is the first of two on 2-D seismic data previously acquired whether further appraisal of the Basker exploration wells targeting potential tie- over the adjacent part of the block. A and Manta fields is warranted and if so, a back opportunities to the Ocean Legend number of these prospects and leads are at well may be drilled. Further studies to production facility. Exploration success, in the same stratigraphic level as Enfield and evaluate the development of the fields will the timeframe that Oceaneering will have display amplitude responses consistent also be carried out. their facility in the Legendre fields, will with the presence of hydrocarbons. allow additional small discoveries to be optimally exploited. Darwin Area Manager Frank Aquino. Legendre Crude Oil is a 43-degree API, light sweet crude oil similar in quality to Malaysian Tapis Crude Oil. Woodside expects to sell a significant proportion of its entitlement into Australian refineries, commencing in April 2001.

Vincent-Enfield-Laverda Oilfields During the first half of 2000, expenditure of A$54.6 million was approved to progress development of the Vincent and Enfield oil discoveries in Permit WA-271-P (Woodside interest 100%).

Woodside Petroleum Ltd. 25 2000 Annual Report 26 Woodside Petroleum Ltd. 2000 Annual Report Woodside’s growth strategy includes a significant continued exploration program within its core Australian acreage. N

NEW VENTURES

Exploration Strategy because Australia may not be able to provide all of the projects required to Woodside’s growth strategy includes a maintain production levels in the intervals significant continued exploration between successfully marketing and program within its core Australian developing a new tranche of the acreage combined with developing Company’s existing large gas assets. international interests in a small number of key geographic areas. The search for international Woodside’s exploration portfolio opportunities is focussed on a comprises 105 permits, of which 36 small number of proven hydrocarbon are operated by the Company. provinces, which are assessed to have greater potential for oil or monetisable Some 43 of these permits are located in gas, and a higher probability of success, Australia with core Australian than similar opportunities in Australia. acreage being located on the greater The Company aims to build a North West Shelf. Woodside’s Australian significant position in these areas in exploration effort is focussed on order to maintain the number, diversity discovering oil in Permit WA-271-P and quality of prospects in the portfolio. and adjacent to existing producing facilities as well as new prospects for low- Whilst the focus remains on proven cost gas close to infrastructure and hydrocarbon provinces, the portfolio will markets in offshore north-west, northern accommodate opportunities that combine and south-eastern Australia. low-entry cost, suitable exit options and significant upside potential such as Woodside has been active in the Otway Mauritania.The Company’s international Basin and Bass Strait during 2000 in exploration and production expansion search of opportunities to supply gas to plans are currently based on four focus the east-coast of Australia and will drill areas, each of which offers the potential to two exploration wells in the region during commercialise discoveries within three to 2001. The Company has also secured a five years.The focus areas selected for significant tranche of frontier acreage in Woodside’s expansion are the Gulf of the Great Australian Bight with the award Mexico, north-west/north Africa, south- of three new permits to a joint venture east Asia and Iran. consisting of Woodside,Anadarko and PanCanadian. Woodside is operator of In support of its exploration Permits EPP-28, EPP-29 and EPP-30 in strategy,Woodside has a substantial which it has a 40% interest. ongoing exploration program planned at a level of between A$200 to A$250 Despite Woodside’s successful exploration million per year. In 2001, the Company track record in Australia, an increasing plans to drill up to 26 exploration wells, of portion of readily monetisable oil reserves which 20 will be in Australia and 6 in required to replace production and international acreage. The program is significantly expand the Company’s targeting a 130% replacement of development opportunity base will need production at a finding cost of less to be sourced internationally. This is than A$3.00 per barrel of oil equivalent.

Woodside Petroleum Ltd. 27 2000 Annual Report Left to right; Dr Agu Kantsler, Director New Ventures and Peter Grant International Exploration Manager.

Australian Activities Woodside entered into agreements to secure a 30% interest in Permit AC/P17 During 2000, 2,100 kilometres of 2-D in the Timor Sea and a 40% interest in and 7,602 square kilometres of 3-D Permit WA-215-P in the Carnarvon Basin seismic data were acquired in support of through farmin. The permits are operated future Australian drilling programs. A total by OMV Australia and Apache Energy, of four exploration wells were drilled in respectively. The Audacious-1 exploration Australian acreage. This included two dry well was drilled in Permit AC/P17 in exploration wells in the greater north- January 2001 and encountered an 11.5- west shelf area,Tyche-1 in Timor Sea metre oil column. The Leaf-1 exploration Permit NT/P49, and Titania-1 in Permit well will be drilled in Permit WA-215-P WA-269-P in the Carnarvon Basin. in the second quarter of 2001. Although Titania-1 was dry,Woodside achieved a record drilling performance During 2000, the Company relinquished for this well in terms of both time and Timor Sea Permits NT/P50 and NT/P51 cost. Woodside’s interests in the two where it previously held interests of 50% permits are 33.33% and 40% respectively. and 33%, respectively and partially relinquished Permits WA-248-P and Woodside made two significant new VIC/P19 in the Carnarvon and Gippsland discoveries in 2000. The first was in Basins where it has 100% equity in the Browse Basin Permit WA-33-P where the retained positions. Woodside also divested Brecknock South-1 well encountered a to Osaka Gas a 10% interest in the 167-metre gross hydrocarbon column over Greater Sunrise Permits NT/RL2, a single interval in the primary reservoir NT/P55, ZOCA 95-19 and ZOCA 96-20. objective. As a result, re-mapping of the Brecknock and Brecknock South gas and In February 2001,Woodside agreed to condensate fields has been undertaken and transfer to Phillips a 16.39% interest in the substantial scope volumes added. The Greater Sunrise fields as part of an second was in the Exmouth sub-basin in agreement to pursue the cooperative Permit WA-271-P where the Laverda-1 development of Timor Sea gas resources. well encountered a 70-metre hydrocarbon Subject to the finalisation of unitisation column comprising a 9-metre gas column arrangements,Woodside’s remaining and a 61-metre oil column. The well equity in the Greater Sunrise permits will enhanced the chance of success of a be 26.33% in NT/P55 and ZOCA 95-20, number of adjacent prospects evident 27.33% in ZOCA 95-19 and 35.00% on 3-D seismic data. Woodside’s in NT/RL2. interests in the two permits are 50% and 100% respectively.

28 Woodside Petroleum Ltd. 2000 Annual Report International Activities Blocks 338, 648 and 1001. Woodside has The Risk Service Contract commits the a 25% interest in each of these blocks. joint venture to establishing commercial During 2000, 1,653 square kilometres of Up to 4 exploration wells are expected production of 710 million standard cubic 3-D seismic data were acquired in offshore to be drilled in the Gulf of Mexico feet of wet gas per day. Production is Mauritania,Areas A, B and C (Woodside’s acreage during 2001. expected to commence in October 2003 interests 35%, 35% and 37.5%, respectively) and reserves at the Probable level are to develop a portfolio of prospects and The Company also acquired an estimated to be 3.4 Tcf of pipeline quality leads for future drilling. Interpretation of additional interest in offshore Mauritania gas, 107 million barrels of condensate and the processed data is well advanced. and interests in neighbouring acreage in 116 million barrels of LPG. Planning for a two to three well drilling offshore Senegal through farmin activities. campaign in the first half of 2001 has As a result,Woodside has an opportunity In addition, the Company will been completed. to earn a 35% interest in the Dana participate in a one-well exploration Petroleum-operated Block-7 in Mauritania drilling program associated with the A total of three exploration wells were and a 46.25% interest in the three Boukhechba Production Sharing Contract drilled in the Company’s International Casamance production sharing contracts and the study of seismic and well data acreage. Both the Helena-1 (Block 165) operated by Roc Oil in Senegal. Activities from an area immediately adjacent to the and Berlin-1 (KC155/199) wells in the in these areas in 2001 will focus on the giant Hassi R’Mel gas field. The latter Gulf of Mexico were dry. The Anama-1 evaluation of existing seismic data and the may assist in securing future well in Papua New Guinea Permit PPL acquisition of new 3-D and 2-D seismic exploration licences in this region. 188 was also dry. Woodside’s interests in data in Mauritania and Senegal respectively. the three wells were 6%, 19.74% and During 2000, the Company relinquished 40.45%, respectively. In December 2000, the Company Blocks V and VI in offshore Cambodia and entered into a cooperative agreement withdrew from Papua New Guinea The Company acquired additional with BHP Petroleum in North Africa. Permit PPL184. Before relinquishment international exploration acreage in Under the agreement Woodside acquired and withdrawal,Woodside’s interests were early 2000 in the form of a 6% interest a 15% interest in the Ohanet Risk 40%, 45% and 30%, respectively. in Walker Ridge Blocks 77, 121, 165, 166, Service Contract, a 50% interest in 209 and 210 in the Gulf of Mexico. the Boukhechba Production Sharing Woodside and Marathon successfully bid Contract and a 50% interest in the Ouest on the March Central Gulf Lease Sale and Hassi R’Mel study agreement for a total were jointly awarded Mississippi Canyon payment of US$22.5 million. Blocks 449 and 554, and Green Canyon

“Backdeck” work area of the Ramform Challenger seismic vessel.

Woodside Petroleum Ltd. 29 2000 Annual Report Woodside’s Exploration and Production Interests * Non-operated Permits

Location / Number Current 2000 Work Program 2000 Exploration 2001 Planned Activity Interest% Expenditure Woodside Share

Algeria Ohanet Risk Service Contract 15.00% Development of 4 gas/condensate reservoirs 3-D seismic, development drilling and facilities c onstruction

Beagle/Canning WA-293-P 100.00% Acquired 2,127 km 2-D seismic, and geological studies. A$0.8 million Acquire 1,718 km 2-D seismic, geological studie s. WA-294-P 14.00% Complete acquisition, processing and evaluation A$5.5 million Complete interpretation of new 2-D and 3-D datasets w ith of 4,366 sq km non-exclusive 3-D seismic data. 2-D the intention of possibly drilling one exploration well in subset ordered and 3-D subsets selection contingent 2002-2003. upon results of wells to be drilled in adjoining permits. WA-296-P 14.33% Completed acquisition and interpretation of approximately A$1.2 million Acquire, process and interpret 3-D seismic over Whitetail 6,866 km of new 2-D seismic data and integrated with vintage prospect with intention of drilling one exploration well 2-D data. Designed 555 sq km 3-D survey over Whitetail (Whitetail-1). Prospect, to be acquired in Q1 2001. WA-297-P 14.00% Completed acquisition and interpretation of approximately A$1.0 million Acquire, process and interpret 3-D seismic over 6,097 km of new 2-D seismic data and integrated with vintage Huntsman prospect. 2-D data. Designed 255 sq km 3-D survey over Huntsman prospect.

Browse Basin WA-33-P,EP36,TP/4 50.00% Completed evaluation of Brecknock 3-D survey. Drilled A$6.4 million Complete post-well studies. Finalise 3-D interpretation. Brecknock South-1 (gas discovery well) exploration well. Commercialisation studies. Retention lease application. Post-well evaluations in progress. WA-242-P 66.66% General permit administration and studies. A$0.2 million Acquisition of 1,000 km 2-D seismic data. WA-275-P 25.00% Processed and interpreted 285 sq km Brecknock-South A$0.7 million Seismic interpretation and geological studies.Retention 3-D seismic data. lease applications related to Brecknock/Brecknock South.

Cambodia Blocks V* 45.00% Exited permit A$0.3 million Blocks VI* 45.00% Exited permit A$0.1 million Offshore Study Agreement (blocks 1-4 & 7) 98.00% Study completed Evaluation work.

Carnarvon WA-28-P WA-7-R Wilcox 16.67% An agreement with BP-Amoco enabled Woodside to increase A$9.5 million Up to four oil exploration wells are planned to be drilled WA-9-R Dixon its equity in future oil discoveries from 16.7% to 33%.Two oil within WA-28-P and the associated licence areas in 2001. WA-10-R Egret exploration wells, Castor-1 and Cavalier-1, were drilled This includes a commitment well (Planaire-1) in WA-28-P, WA-11-R Rankin within NWSV acreage in 2000. Both wells were dry.A gas which entered the final permit year in August 2000. WA-1-L to WA-6-L exploration well, Gaea-1(gas discovery), was also drilled. WA-9-L WA-11-L WA-16-L WA-205-P* 5.00% Geological studies. A$0.3 million Geological studies. WA-254-P (P2)* 17.06% Geological studies. A$0.2 million Seismic interpretation and geological studies. WA-254-P (P1,3,4)* 24.38% WA-1-P 45.94% Seismic interpretation and geological studies. Preparation A$0.5 million Two exploration wells (Ajax-1, Patriot-1). Geological studies. for drilling two exploration wells. WA-20-L 45.94% Procurement of facilities, preparation for development drilling, Development drilling, installation and operation of facilities. (Formerly within WA-1-P) seismic interpretation and geological studies. WA-191-P * 8.20% Reprocessing and interpretation of 3-D seismic. Geological studies. A$0.4 million Further seismic interpretation and geological studies. Potential for one exploration well in 2001. WA-208-P 29.50% Seismic interpretation and geological studies. Preparation A$0.3 million One exploration well (Delilah-1). for drilling. WA-215-P* 40.00% Geological studies. One exploration well (Leaf-1). WA-248-P 100.00% Geological studies. A$0.3 million Geological studies. WA-263-P 22.50% Geological studies. A$0.3 million Relinquish permit at end Year 5. WA-269-P 60.00% One exploration well (Titania-1), geological studies. A$4.1 million One exploration well (Atlas-1), geological studies. WA-270-P 40.00% Acquire 1,715 km 2-D seismic, geological studies. A$0.1 million Two exploration wells (Grey Rabbit-1,Tyra-1). WA-271-P 100.00% Enfield-3 Appraisal well, Laverda-1 Exploration well, A$40.5 million Up to three exploration wells (Montesa-1plus two others), metocean acquisition, acquisition Indian 3-D seismic, environmental survey, geotechnical and geophysical survey, engineering/feasibility studies for Enfield, feasibility/ Vincent-3 appraisal well, appraisal of Laverda discovery, commerciality studies for Vincent. 2-D seismic survey. Conceptual engineering for Enfield, preliminary field development plan for Enfield, feasibility study for Laverda and commerciality studies for Vincent.

Gippsland Basin VIC/RL6* 100.00% Retention Lease over the Basker, Manta and Gummy fields Development studies, possible appraisal well on the Basker or (formerly VIC/P19B) awarded 30 October 2000. Studies on the development Manta fields. feasibility of the resources, costings and economics. VIC/P19* 50.00% Geological and geophysical reviews. 12 out of 14 graticular Secure Retention Leases. Development studies. blocks relinquished November 2000. Retention lease applications pending on two graticular blocks (VIC/RL9 and VIC/RL10,Manta and Gummy extensions). VIC RL2 * 30.00% Geological and geophysical reviews. Geological and geophysical reviews.

Great Australian Bight EPP28 40.00% 2-D seismic planning and stakeholder consultation. A$0.3 million Acquire, process and interpret seismic and potential fields data. EPP29 40.00% 2-D seismic planning and stakeholder consultation. A$0.4 million Acquire, process and interpret seismic and potential fields data. EPP30 40.00% 2-D seismic planning and stakeholder consultation. A$0.4 million Acquire, process and interpret seismic and potential fields data.

Gulf of Mexico WR123 * 33.33% Permit acquired in late 1999. Seismic acquisition, interpretation, and geological studies. WR37 * 33.33% Permit acquired in late 1999. One exploration well (shared with WR81). WR81 * 33.33% Permit acquired in late 1999. One exploration well (shared with WR37). KC301 * 33.33% Permit acquired in late 1999. One exploration well (shared with KC302). KC302 * 33.33% Permit acquired in late 1999. One exploration well (shared with KC301). GC246 * 33.33% Permit acquired in late 1999. Seismic acquisition, interpretation, and geological studies. AT40 * 33.33% Permit acquired in late 1999. Seismic acquisition, interpretation, and geological studies. MC1008 * 33.33% Permit acquired in late 1999. Seismic acquisition, interpretation, and geological studies. KC387 * 33.33% Permit acquired in late 1999. Seismic acquisition, interpretation, and geological studies. KC388 * 33.33% Permit acquired in late 1999. Seismic acquisition, interpretation, and geological studies. KC431 * 33.33% Permit acquired in late 1999. Seismic acquisition, interpretation, and geological studies. KC434 * 33.33% Permit acquired in late 1999. Seismic acquisition, interpretation, and geological studies.

30 Woodside Petroleum Ltd. 2000 Annual Report Woodside’s Exploration and Production Interests * Non-operated Permits

Gulf of Mexico KC477* 33.33% Permit acquired in late 1999. Seismic acquisition, interpretation, and geological studies. KC478* 33.33% Permit acquired in late 1999. Seismic acquisition, interpretation, and geological studies. NG15-91* 33.33% Permit acquired in late 1999. Seismic acquisition, interpretation, and geological studies. NG15-92* 33.33% Permit acquired in late 1999. Seismic acquisition, interpretation, and geological studies. NG15-93* 33.33% Permit acquired in late 1999. Seismic acquisition, interpretation, and geological studies. KC155* 33.33% Permit acquired in late 1999. One exploration well (shared with KC199). KC199* 13.00% Permit acquired in late 1999. One exploration well (shared with KC155). AC946* 16.25% Permit acquired in late 1999. One exploration well (contingent). GC688* 16.67% Permit acquired in late 1999. Seismic acquisition, interpretation, and geological studies. AT279* 16.67% Permit acquired in late 1999. Seismic acquisition, interpretation, and geological studies. AT371* 16.67% Permit acquired in late 1999. Seismic acquisition, interpretation, and geological studies. AT370* 16.67% Permit acquired in late 1999. Seismic acquisition, interpretation, and geological studies. KC287* 16.25% Permit acquired in late 1999. Seismic acquisition, interpretation, and geological studies. MC294* 12.50% Permit acquired in late 1999. Seismic acquisition, interpretation, and geological studies. MC338* 12.50% Permit acquired in late 1999. Seismic acquisition, interpretation, and geological studies. MC339* 12.50% Permit acquired in late 1999. Seismic acquisition, interpretation, and geological studies. GC410* 12.50% Permit acquired in late 1999. Seismic acquisition, interpretation, and geological studies. GB935* 12.50% Permit acquired in late 1999. Seismic acquisition, interpretation, and geological studies. GB936* 12.50% Permit acquired in late 1999. Seismic acquisition, interpretation, and geological studies. GB937* 12.50% Permit acquired in late 1999. Seismic acquisition, interpretation, and geological studies. GB979* 12.50% Permit acquired in late 1999. Seismic acquisition, interpretation, and geological studies. GC195* 12.50% Permit acquired in late 1999. Seismic acquisition, interpretation, and geological studies. GC239* 12.50% Permit acquired in late 1999. Seismic acquisition, interpretation, and geological studies. GC240* 12.50% Permit acquired in late 1999. Seismic acquisition, interpretation, and geological studies. GC283* 12.50% Permit acquired in late 1999. Seismic acquisition, interpretation, and geological studies. GC284* 12.50% Permit acquired in late 1999. Seismic acquisition, interpretation, and geological studies. GC328* 12.50% Permit acquired in late 1999. Seismic acquisition, interpretation, and geological studies. AC73* 16.25% Permit acquired in late 1999. Seismic acquisition, interpretation, and geological studies. AC117* 16.25% Permit acquired in late 1999. Seismic acquisition, interpretation, and geological studies. GB563* 16.67% Permit acquired in late 1999. Seismic acquisition, interpretation, and geological studies. WR342* 33.33% Permit acquired in late 1999. Seismic acquisition, interpretation, and geological studies. GC100* 25.00% Permit acquired in mid 2000. Seismic acquisition, interpretation, and geological studies. GC388* 25.00% Permit acquired in mid 2000. Seismic acquisition, interpretation, and geological studies. GC648* 25.00% Permit acquired in mid 2000. Seismic acquisition, interpretation, and geological studies. MC449* 25.00% Permit acquired in mid 2000. Seismic acquisition, interpretation, and geological studies. MC554* 25.00% Permit acquired in mid 2000. Seismic acquisition, interpretation, and geological studies. Total cost of the Gulf of Mexico acquisition A$88.8 million

Mauritania Area A 35.00% A$3.1 million Geological studies. Area B 35.00% Acquisition and interpretation of 3,500 sq km 3-D seismic data. A$9.9 million Two exploration wells plus geological studies. Area C 37.50% A$0.6 million One contingent well plus geological studies. Block 7* 35.00% Acquisition of 2,000km 2-D seismic data. A$0.0 million Geological studies.

Otway VIC/P43* 50.00% 2-D/3-D Seismic acquisition/processing/interpretation. A$4.7 million One exploration well (Geographe-1). T/30P* 50.00% 2-D/3-D Seismic acquisition/processing/interpretation. A$2.6 million One exploration well (Thylacine-1).

Papua New Guinea PPL-213* (formerly PPL-106) 25.00% Post-Tumuli-1 exploration well review. Exit from the permit. PPL-184* Exited permit. PPL-188* 45.00% One exploration well (Anama-1). A$2.9 million Post-Anama-1 technical evaluation, evaluate value of Uramu gas. PPL-199* 35.00% Geological studies. A$0.1 million Geological studies. PPL-208* 25.00% Geological studies. Geological studies. PPL218* 50.00% Geological studies. Geological studies.

Senegal Casamance Maritime I, II & III* 46.25% Geological studies. A$0.6 million 1,500km 2-D seismic.

Timor Sea AC/P4 80.00% Purchased 307.9 sq km multi-client 3-D seismic data. A$1.2 million Seismic interpretation and geological studies. Seismic interpretation and geological studies. Initiated 3-D seismic pre-stack depth migration reprocessing. AC/P8 75.00% Completion of updated prospect seriatim. Departure of BHPP A$1.3 million One exploration well (Pandorina-1). Preparation for and negotiation of tie-in agreement to AC/L5. Preparation renewal / relinquishment in 2002. for drilling in 2001. AC/L5 50.00% Re-interpretation of reprocessed 3-D seismic dataset and re-build Field development plan update. Execution of Laminaria Phase 2. of reservoir simulation model. Pre-project evaluation of Laminaria Evaluation of value enhancement opportunities. Phase 2. AC/P16 60.00% Seismic interpretation and geological studies. A$0.4 million Seismic interpretation and geological studies. AC/P17* 30.00% Acquired interest. A$0.5 million One exploration well (Audacious-1). ZOCA 91-01* 40.00% Seismic interpretation and geological studies. Planning for A$0.1 million One exploration well (Kuda Tasi-1),general permit change in operatorship. administration. Preparation for relinquishment in 2002. ZOCA 94-07 10.00% Seismic interpretation and geological studies. Seismic interpretation and geological studies. ZOCA 95-19 24.34% Acquired and processed Mescal 3-D survey (3,200 sq. km). Complete 3-D evaluation. Update field development 3-D seismic interpretation. Unitisation activities. Equity plan and review appraisal strategy.Complete unitisation activities. reduced from 34.34% to 24.34% June 2000. ZOCA 96-20 23.34% Acquired and processed Mescal 3-D survey. Complete 3-D evaluation. Update field development plan 3-D seismic interpretation. Unitisation activities. Equity reduced and review appraisal strategy. Complete unitisation activities. from 33.34% to 23.34% June 2000. NT/RL2 56.67% Acquired and processed Mescal 3-D survey. Complete 3-D evaluation. Update field development plan 3-D seismic interpretation. Unitisation activities. Equity reduced and review appraisal strategy. Complete unitisation activities. from 66.67% to 56.67% June 2000. NT/P50 50.00% Seismic interpretation and geological studies. A$0.1 million Relinquish permit. NT/P51 33.33% Completed 750 km 2-D seismic reprocessing and 100 km A$0.5 million Relinquish permit. pre-stack depth migration. NT/P53 50.00% Seismic interpretation and geological studies. A$0.1 million Relinquish permit. NT/P55 23.34% Acquired and processed Mescal 3-D survey. Complete 3-D evaluation. Update field development plan 3-D seismic interpretation. Equity reduced from 33.34% and review appraisal strategy. to 23.34% June 2000. WA-279-P 65.00% Acquired 376 sq km 3-D seismic data (Blacktip survey). A$4.9 million One exploration well (Blacktip-1). WA-280-P 65.00% Acquired 560 sq km 3-D seismic data (Thresher survey). A$8.6 million One exploration well (Thresher-1). NT/P57 90.00% Acquired 406 sq km 3-D seismic data (Shakespeare survey). A$5.9 million Seismic interpretation and geological studies. NT/P49 33.33% One exploration well (Tyche-1).Seismic interpretation A$4.0 million Seismic interpretation and geological studies. and geological studies.

Woodside Petroleum Ltd. 31 2000 Annual Report WOODSIDE’S EXPLORATION AND PRODUCTION INTERESTS Australia A

South Australia Victoria

32 Woodside Petroleum Ltd. 2000 Annual Report WOODSIDE’S EXPLORATION AND PRODUCTION INTERESTS International I

Mauritania Senegal

Algeria Gulf of Mexico

Cambodia Papua New Guinea

Woodside Petroleum Ltd. 33 2000 Annual Report Proved Probable Woodside’s share 2000 1999 2000 1999 Gas (Tcf) 3.74 3.85 4.60 4.72 Condensate (MMbbl) 112.4 120.1 149.4 159.2 Oil (MMbbl) 151.1 93.8 236.4 146.1 Total (MMboe) 919.6 889.3 1,192.8 1,133.4

Reserves Statement Development of the field has been shown Probable level. Reassessment of Sea Ripple to be economically viable, but timing has condensate content and recovery efficiency This statement presents a summary of the yet to be determined. Dry Gas Reserves also resulted in a Condensate Reserves changes to Woodside’s hydrocarbon in this field are estimated to be 0.07 Tcf addition of 1.9 MMbbl at the Proved level resource portfolio during 2000 in order of at the Proved level and 0.11 Tcf at the and 0.7 MMbbl at the Probable level. the main Permit areas and the resulting Probable level. reserves position as at 31 December 2000. Associated with the gas changes in Unless otherwise indicated, all Reserves Continuing studies of the Echo-Yodel Goodwyn and Echo-Yodel,were an and Scope For Recovery volumes quoted field in support of development planning overall increase in condensate recovery at herein are 100% permit or licence totals. resulted in an increase in Dry Gas the Proved level of 1.6 MMbbl and a Reserves of 0.01 Tcf at the Proved level decrease at the Probable level of 11.1 As a result of activities and studies and 0.06 Tcf at the Probable level. MMbbl for the two fields. undertaken during 2000, Probable hydrocarbon recovery attributable to Other changes, reflecting decreased Woodside’s share of total remaining Woodside has increased by an amount that uncertainty following study work, Condensate Reserves is 112.4 MMbbl at exceeds production for a fifth successive resulted in minor increases at the Proved the Proved level and 149.4 MMbbl at the year. Woodside’s reserves replacement level and decreases at the Probable level. Probable level. ratio in 2000 was 186% at the Probable The most significant was attributable to North West Shelf Ventures - Oil level. A summary of Woodside’s year-end the Goodwyn Field, where Proved Dry reserves position is provided in the table Gas recovery was increased by 0.11 Tcf, Multi-disciplinary studies incorporating above. while Probable decreased by 0.16 Tcf. the reprocessed greater Lambert/Hermes These changes incorporate the results of 3-D seismic data, a revised geological Full replacement of 2000 production and significant study work and the results of model, and the results of Lambert-5 and improved reserves position were realised continued production in the main the subsequent sidetrack resulted in primarily as a result of new Reserves GD/GE/GFA reservoirs.They also a combined increase in the Reserves bookings in the Enfield and Vincent oil include a new booking in the for the Lambert and Hermes oilfields, fields. Commercially viable developments unappraised area of the GD reservoirs, which produce to the Cossack Pioneer have been demonstrated for both fields, where a development well is planned FPSO. Based on this work, the oil following appraisal wells and multi- in 2001. volumes originally in place have been disciplinary studies during the year. The increased for Hermes and decreased Probabilistic addition of reserves combined increase in Oil Reserves is 80.2 to a lesser extent for Lambert. The across the North West Shelf Venture MMbbl at the Proved and 122.5 MMbbl combined changes result in an increase acreage, which takes into account at the Probable level (Woodside share 100%). in recovery of 5.7 MMbbl at the Proved level dependencies between fields, indicates that and 10.4 MMbbl at the Probable level. Other increases came from the following an incremental 2.06 Tcf of Dry Gas is activities: available with a higher degree of In addition, Proved recovery was • An upgrade of oil recovery associated certainty. This gives a total of 19.09 increased by 5.1 MMbbl for the with the Hermes field as a result of Tcf of Dry Gas Reserves at the Proved Cossack field, following its continued multi-disciplinary studies using the level and 22.15 Tcf at the good production performance. The greater Lambert/Hermes 3-D seismic Probable level. Probable estimate has not changed. and Lambert-5 well results; and Excluding the adjustment for inter-field Woodside’s share of total remaining • The Gaea discovery in the North West dependencies,Woodside’s share of Oil Reserves is 17.1 MMbbl at the Shelf Venture area. total remaining Dry Gas Reserves is 3.74 Proved level and 31.4 MMbbl at the North West Shelf Ventures - Gas Recovery Tcf at the Proved level and 4.60 Tcf at Probable level. The booking of additional gas the Probable level. Laminaria and Corallina Venture (AC/L5) recovery in 2000 was based on multi- North West Shelf Ventures - Condensate disciplinary technical studies, well and The Northern Endeavour FPSO production results. The Gaea exploration Additional condensate recovery, associated continued its strong production performance, well resulted in a gas-condensate field with the increase in Gas Reserves for the reaching its peak processing capacity of discovery. This well is located between the Gaea discovery, was booked, resulting in 180,000 bbl/d. Production for the year North Rankin and Goodwyn platforms an increase in Reserves of 1.9 MMbbl at 2000 of 50.4 MMbbl (AC/L5 share) was and encountered gas in two accumulations. the Proved level and 3.4 MMbbl at the in line with original expectations.

34 Woodside Petroleum Ltd. 2000 Annual Report This performance, plus the results of Oil initially in place in the Vincent Multi-disciplinary studies on the multi-disciplinary studies, resulted in an Field has increased significantly, based Brecknock and Scott Reef Fields, overall increase in Proved oil recovery for on the interpretation of new 3-D seismic involving remapping post-seismic the combined Laminaria and Corallina acquired over the field. Multi-disciplinary reinterpretation, resulted in small fields of 15.5 MMbbl, reflecting reduced studies have carried these results through combined changes. Scott Reef volumes uncertainty about future performance. to a development plan assuming joint increased by 0.10 Tcf of Dry Gas and 8.0 Probable recovery decreased by 2.8 MMbbl. development with Enfield and utilising MMbbl of Condensate, while Brecknock the same FPSO. Vincent would have a volumes decreased by 1.67 Tcf of Dry Woodside’s share of total remaining AC/L5 wellhead platform and would be Gas and 12.0 MMbbl of Condensate. Reserves is 43.1 MMbbl at the Proved level drained by multi-lateral wells. Reserves of Woodside’s share in these fields is 50%. and 62.2 MMbbl at the Probable level. 37.4 MMbbl at the Proved level and 59.9 MMbbl at the Probable level have Total Probable Scope For Recovery in Legendre Oil Development (WA-20-L) been booked for this field. these Permits is 20.49 Tcf of Dry Gas and Project execution activities dominated 311.0 MMbbl of condensate. Woodside’s activity in 2000 in the development of As a result of these bookings, the share is 9.65 Tcf and 142.0 MMbbl. reserves in the Legendre North and combined Reserves are 80.2 MMbbl at the These fields continue to be considered Legendre South oil fields. All major pieces Proved level and 122.5 MMbbl at the commercially viable, but await firm of project hardware have been contracted Probable level. These volumes are 100% development plans dependent on and were either completed, under Woodside share and apply to the WA-271-P significant growth in domestic gas and construction or undergoing conversion to area only. LNG markets. meet Legendre Project specifications. Scope for Recovery Reserves remained unchanged Sunrise and Troubadour Gas Discoveries (NT/RL2 and P55, from the 31/12/1999 levels of 23.3 MMbbl A significant increase in the Scope ZOCA 95-19 and 96-20) at the Proved and 44.1 MMbbl at the For Recovery for Woodside-operated Probable level. Woodside’s share is fields was also achieved. Scope for During 2000, an industrial-domestic 10.7 MMbbl at the Proved level and Recovery estimates for Dry Gas and market in Darwin from 2005 was 20.3 MMbbl at the Probable level. Liquids increased by 2.30 Tcf and 84.4 identified and a Letter of Intent signed MMbbl, respectively, at the Probable with Methanex. Concept selection has Vincent and Enfield Oil Accumulations level. Woodside’s share of the Dry Gas confirmed the preferred development (WA-271-P) decreased by 0.31 Tcf due to the sale as offshore export of condensate and a Previously in Scope For Recovery, of equity in Sunrise/Troubadour, dry gas pipeline to Darwin. Initial oil volumes in the Enfield and Vincent while liquids increased by 13.6 MMbbl, development will be from a platform fields have progressed to the Reserves boosted by the inclusion of Laverda oil. on the Sunrise Field in 160 metres of category following further appraisal and water with a phased development of four studies, which concluded that commercial Scott Reef, Brecknock and Brecknock additional drilling centres, one developments are feasible for both fields. South Gas Discoveries (WA-33-P, WA-275- on Troubadour. P, EP-36, TP/4) In Enfield, the Enfield-3 appraisal Total field Scope for Recovery has well demonstrated thicker reservoir The Brecknock South exploration well remained unchanged from the 31/12/1999 and improved reservoir properties. It resulted in the discovery of a new field levels of 9.17 Tcf of Dry Gas and 320.9 also improved the understanding of the straddling the boundary between MMbbl of condensate at the Probable geological setting. Geological and WA-33-P (Woodside 50%) and level. However,Woodside’s overall share engineering studies have resulted in WA-275-P (Woodside 25%). Initial of this volume has been reduced to a development plan for the field that mapping and studies indicate a Probable approximately 50% following the sale of assumes sub-sea wells producing to an Scope For Recovery of 3.92 Tcf of Dry 10% equity to Osaka Gas. At the end of FPSO. The Oil Reserves booked Gas and 87.0 MMbbl of Condensate. 2000,Woodside’s share of Probable Scope for Enfield are 42.8 MMbbl at the Woodside’s share is 1.36 Tcf of Dry Gas for Recovery was 4.57 Tcf of Dry Gas Proved level and 62.6 MMbbl at and 30.0 MMbbl of Condensate. and 159.9 MMbbl of condensate. the Probable level.

Woodside Petroleum Ltd. 35 2000 Annual Report Vincent and Enfield Oil Field Hydrocarbon Reserves as at 31 December 2000 Discoveries (WA-271-P) Production Licence Area, North West Shelf Subsequent to booking Oil Reserves volumes for these fields, there remains Proved Probable, including Proved some further Scope For Recovery (100% Area Dry gas Condensate Oil Dry gas Condensate Oil [Tcf] [MMbbl] [MMbbl] [Tcf] [MMbbl] [MMbbl] Woodside). In Enfield, Probable Oil WA-1-L 12.25 210.9 - 15.38 297.8 - Scope For Recovery of 18.1 MMbbl is WA-3-L 1.30 59.0 - 1.76 84.5 - carried, representing the interpreted WA-5-L/6-L 4.76 176.9 - 6.32 250. - increase in volumes demonstrated by the WA-3-L/9-L 0.00 0.4 7.3 0.00 0.5 24.8 Enfield-3 appraisal well. These volumes WA-11-L/9-L 0.08 3.3 69.5 0.13 4.8 112.9 have not yet been firmed up sufficiently to WA-16-L/3-L 0.20 1.7 20.7 0.26 2.6 39.5 incorporate into reserves. Total Remaining Recovery 18.59 452.2 97.5 23.85 640.8 177.2 Scope For Recovery of 57.5 MMbbl at Future Fuel and Flare Gas 2.40 - - 3.08 - - the Probable level is carried for Vincent. Total Reserves 16.19 452.2 97.5 20.77 640.8 177.2 These volumes are based on the potential Woodside Reserves Share 3.60 102.5 16.3 4.37 133.9 29.5 (refer notes) for additional recovery from infill drilling and extending the field’s production life beyond current assumptions. Permit Area WA-28-P and Retention Leases WA-7-R, 9-R and 11-R

Laverda Oil Discovery (WA-271-P) Proved Probable, including Proved Area Dry gas Condensate Oil Dry gas Condensate Oil Following on from the Enfield and [Tcf] [MMbbl] [MMbbl] [Tcf] [MMbbl] [MMbbl] Vincent discoveries, Laverda-1 found WA-28-P 0.25 26.2 - 0.38 41.1 - another oil accumulation in this WA-7-R 0.24 15.0 - 0.32 20.1 - prospective permit. The well WA-9-R 0.09 5.7 - 0.13 8.1 - encountered a total column of 70 metres WA-10-R 0.00 0.0 4.7 0.01 0.0 11.6 (9-metre gas and 61-metre oil) in the WA-11-R 0.39 12.7 - 0.74 23.8 - same horizon as Enfield. The oil is Total Remaining Recovery 0.97 59.6 4.7 1.58 93.1 11.6 biodegraded with an API gravity of 20. Future Fuel and Flare Gas 0.13 - - 0.20 - - Good quality 3-D seismic data supports Total Reserves 0.84 59.6 4.7 1.38 93.1 11.6 mapping over the lateral and vertical Woodside Reserves Share 0.14 9.9 0.8 0.23 15.5 1.9 extent of the field in two main zones. (refer notes)

Scope For Recovery of 56.3 MMbbl at Production Licences AC/L5 and WA-20-L the Probable level is carried for Laverda. Proved Probable, including Proved Bass Strait Oil and Gas Fields (VIC/RL6, Area Dry gas Condensate Oil Dry gas Condensate Oil VIC/RL9, VIC/RL10) [Tcf] [MMbbl] [MMbbl] [Tcf] [MMbbl] [MMbbl] AC/L5 - - 86.2 - - 124.4 During 2000,Woodside increased its WA-20-L - - 23.3 - - 44.1 equity in, and assumed operatorship of, several retention fields in the Bass Strait. Total Remaining Recovery - - 109.5 - - 168.5 The Basker and Manta oil fields are Future Fuel and Flare Gas ------contained entirely in VIC/RL6 (100% Total Reserves - - 109.5 - - 168.5 Woodside), as are most of Manta and Woodside Reserves Share - - 53.8 - - 82.5 (refer notes) Gummy gas fields. Parts of Manta and Gummy gas fields extend into the neighbouring blocks for which Retention Permit Area WA-271-P Lease applications (VIC/RL9 and Proved Probable, including Proved VIC/RL10, both Woodside 50%) have Area Dry gas Condensate Oil Dry gas Condensate Oil been submitted. Scope For Recovery [Tcf] [MMbbl] [MMbbl] [Tcf] [MMbbl] [MMbbl] volumes for Basker, Manta, and Gummy WA-271-P - - 80.2 - - 122.5 in all three leases have been transferred Total Remaining Recovery - - 80.2 - - 122.5 into the ‘Woodside-operated’ totals. Future Fuel and Flare Gas ------Combined, a total Scope For Recovery of Total Reserves - - 80.2 - - 122.5 0.17 Tcf of Dry Gas, 6.1 MMbbl of Woodside Reserves Share - - 80.2 - - 122.5 Condensate, and 27.0 MMbbl of oil are (refer notes) carried at the Probable level. Woodside’s Remark: share is 0.16 Tcf, 5.8 MMbbl, and 27.0 To add transparency to the reserves tables, Future Fuel and Flare is shown as a visible bottom line item. MMbbl, respectively. Future Fuel and Flare Gas for the processing and transportation to the delivery point for Domgas and LNG is 12.9 % of Dry Gas.

36 Woodside Petroleum Ltd. 2000 Annual Report Reconciliation of Hydrocarbon Reserves between 31 December 1999 and 31 December 2000 1. Definitions “Condensate” is defined as “C5 plus” hydrocarbon Dry Gas components. “Dry Gas” is defined as “C4 minus” hydrocarbon Remaining Recovery Changes Produced Remaining Recovery components plus inerts.These volumes include at 31.12.1999 during 2000 in 2000 at 31.12.2000 LPG (propane and butane) Reserves. Proved Probable * Proved Probable * Proved Probable * “Tcf” means trillion (1012) standard cubic feet of gas. Dry Gas Dry Gas Dry Gas Dry Gas Dry Gas Dry Gas Dry Gas Area [Tcf] [Tcf] [Tcf] [Tcf] [Tcf] [Tcf] [Tcf] “MMbbl” means millions of standard barrels of WA-1-L 12.51 15.59 0.07 0.12 0.33 12.25 15.38 oil, NGLs and condensates. WA-3-L 1.30 1.76 0.00 0.00 - 1.30 1.76 “MMBoe” means millions of barrels of oil WA-5-L/6-L 4.88 6.72 0.11 (0.17) 0.23 4.76 6.32 equivalent. The conversion factor for Dry Gas to oil equivalent is 1 barrel of oil equivalent for each WA-3-L/9-L 0.00 0.00 0.00 0.00 0.00 0.00 0.00 5,700 standard cubic feet of gas. WA-11-L/9-L 0.11 0.16 0.00 0.00 0.03 0.08 0.13 “Reserves” are identified volumes that have been WA-16-L/3-L 0.20 0.26 0.00 0.00 0.00 0.20 0.26 demonstrated to be producible from known WA-28-P 0.24 0.32 0.01 0.06 - 0.25 0.38 resources within the company acreage from a given date forward, at commercial rates, under WA-7-R 0.24 0.32 0.00 0.00 - 0.24 0.32 presently anticipated production methods, operating conditions, prices and costs. Woodside WA-9-R 0.09 0.13 0.00 0.00 - 0.09 0.13 reports reserves net of the gas required for WA-10-R 0.00 0.01 0.00 0.00 - 0.00 0.01 processing and transportation to the customer (fuel and flare gas). WA-11-R 0.39 0.74 0.00 0.00 - 0.39 0.74

Total Remaining Recovery 19.96 26.01 0.19 0.01 0.59 19.56 25.43 “Proved Reserves” are those Reserves that, to a high degree of certainty (90% confidence), are Future Fuel and Flare Gas 2.57 3.36 - - - 2.53 3.28 recoverable.There is relatively little risk associated with these Reserves. Total Reserves 17.39 22.65 - - - 17.03 22.15 “Probable Reserves” are those Reserves which * Remarks: Probable including Proved analysis of geological and engineering data suggests are more likely than not to be recoverable. There is at least a 50% probability Condensate that reserves recovered will exceed Probable Reserves. Unless otherwise indicated, for the Remaining Recovery Changes Produced Remaining Recovery purposes of this reserves statement, Probable Reserves are inclusive of Proved Reserves. at 31.12.1999 during 2000 in 2000 at 31.12.2000 Proved Probable * Proved Probable * Proved Probable * “Possible Reserves” are those Reserves that, to a Condensate Condensate Condensate Condensate Condensate Condensate Condensate low degree of certainty (10% confidence), are Area [MMbbl] [MMbbl] [MMbbl] [MMbbl] [MMbbl] [MMbbl] [MMbbl] recoverable.There is relatively high risk associated with these Reserves. WA-1-L 214.4 301.0 3.9 4.2 7.4 210.9 297.8 “Remaining Recovery” means the volumes that WA-3-L 59.0 84.5 0.0 0.0 - 59.0 84.5 have been demonstrated to be recoverable from WA-5-L/6-L 198.0 288.2 4.8 (11.7) 25.9 176.9 250.6 the sub-surface. It is equal to the sum of reserves plus the gas required for its processing and WA-3-L/9-L 0.1 0.3 0.0 (0.1) (0.3) 0.4 0.5 transportation to the customer. WA-11-L/9-L 3.2 4.7 (0.0) 0.0 (0.1) 3.3 4.8 “Scope for Recovery” is the recovery estimate WA-16-L/3-L 1.6 2.7 0.1 (0.1) 0.0 1.7 2.6 of any project for which implementation cannot WA-28-P 29.4 40.4 (3.2) 0.7 - 26.2 41.1 be shown with sufficient confidence to be technically sound or commercially viable, WA-7-R 15.0 20.1 0.0 0.0 - 15.0 20.1 but which could mature based on reasonable WA-9-R 5.7 8.1 0.0 0.0 - 5.7 8.1 assumptions about the success of additional data gathering, improved reservoir management, a WA-10-R 0.0 0.0 0.0 0.0 - 0.0 0.0 maturing technology from current research, WA-11-R 12.7 23.8 0.0 0.0 - 12.7 23.8 relaxations in the market constraints and/or terms and conditions for implementing such a project. Total Reserves 539.1 773.8 5.6 -7.0 32.9 511.8 733.9 2. Notes * Remarks: Probable including Proved Net cumulative production of Dry Gas, Condensate (C5+) production in the tables is estimated from actual Condensate Product production. A small correction in Condensate and Oil from the North Rankin, historical production was incorporated in the 1998 condensate (C5+) production figures and another is incorporated in the Perseus, Goodwyn,Wanaea, Cossack, Hermes and 2000 figures for condensate extracted from the associated gas produced from the oilfields in WA-3-L/9-L/11-L. Actual Laminaria/Corallina fields to 31 December 1999 Condensate Product production and sales are not affected. was 6.13 Tcf, 284.7 MMbbl and 185.3 MMbbl respectively. Oil Woodside’s share of Dry Gas Reserves is an estimate based on the hydrocarbon quantities required to be produced for Woodside’s Domestic Remaining Recovery Changes during 2000 Produced Remaining Recovery Gas interest, currently 50% and Woodside’s 16.7% at 31.12.1999 in 2000 at 31.12.2000 LNG interest.Woodside’s exact share of Domgas production depends on the volume sold and Proved Probable * Proved Probable * Proved Probable * capacity delivered. Oil Oil Oil Oil Oil Oil Oil Area [MMbbl] [MMbbl] [MMbbl] [MMbbl] [MMbbl] [MMbbl] [MMbbl] Woodside’s exact share of Condensate Reserves depends on the percentage of total production WA-3-L/9-L 9.9 32.5 5.1 0.0 7.7 7.3 24.8 derived from Domgas sales (Woodside’s interest WA-11-L/9-L 96.5 139.9 0.0 0.0 27.0 69.5 112.9 currently 50%), LNG (Woodside’s interest 16.7%) and Gas Recycling ventures. WA-16-L/3-L 22.6 36.7 5.7 10.4 7.6 20.7 39.5 WA-10-R 4.7 11.6 0.0 0.0- 4.7 11.6 Oil and Condensate volumes have been rounded to the nearest 0.1 MMbbl. Gas volumes have been WA-271-P 0.0 0.0 80.2 122.5 - 80.2 122.5 rounded to the nearest 0.01 Tcf. AC/L5 121.1 177.6 15.5 -2.8 50.4 86.2 124.4 WA-20-L 23.3 44.1 0.0 0.0 - 23.3 44.1 “The information contained in this Reserves Statement has been compiled by Mr Glen Johnson. Mr Johnson’s qualifications Total Reserves 278.1 442.4 106.5 130.1 92.7 291.9 479.8 include a Bachelor of Applied Science (Chemical Engineering) from the University of Waterloo, Canada and more than 21 years * Remarks: Probable including Proved of relevant experience. Mr Johnson has consented in writing, to the inclusion of this information in this Annual Report.”

Woodside Petroleum Ltd. 37 2000 Annual Report By year-end the Company had assembled a small portfolio of exciting opportunities which it will continue to pursue. S

SUSTAINABLE ENERGY SOLUTIONS

During 2000,Woodside These conditions include all necessary continued with its strategy to authorisations, site and environmental develop a sound base of investments approvals and project finance.The contract and projects to serve the growing is for 18 years with an option for a further market for renewable and seven years. Start-up of electricity clean energy. production is targeted for early 2003.

In late 2000,Woodside’s Esperance Power Project Downstream Development business In late 2000, the Woodside-Energy Equity unit was restructured to create a new Corporation joint venture submitted a business unit responsible for sustainable tender for the supply of power to the energy solutions. This group is pursuing Esperance region of Western Australia. The opportunities to provide fit-for-purpose tender is based on electricity generation solutions to meet customers’ clean through an integrated power station Ceramic Fuel Cell test bed. energy needs and make investments fuelled by LNG trucked from the Burrup in promising clean and renewable Peninsula, supplemented in 2006 with a 5- energy technologies. megawatt biomass fuelled generation By year-end the Company had assembled facility based on feedstock from oil-mallee a small portfolio of exciting opportunities (Eucalyptus) trees grown on farm which it will continue to pursue and properties in the surrounding region. expand during 2001. Contract negotiations are expected to West Kimberley Power Project commence with short-listed tenderers and Western Power Corporation and the The Woodside-Energy Equity Western Australian Government’s energy Corporation joint venture executed a regulator (Office of Energy) in early 2001. Power Purchase Agreement with Western Power Corporation in late 2000 for the Joint Venture with the Oil Mallee Company supply of electricity to Western Power to Woodside and the Oil Mallee Company meet the requirements of the West of Western Australia are working together Kimberley region. The joint venture will to establish a one-million-tree, oil mallee build gas-fired power stations at Broome, crop in the Esperance region and to Fitzroy Crossing, Halls Creek and develop a mallee harvester. Woodside will Camballin. Gas from the North West Shelf initially contribute A$550,000 to this first Venture’s onshore gas plant on the Burrup phase, which, if successful, would lead to Peninsula will be transported to the sites the establishment of 7 million trees as LNG in road tankers. The estimated needed to supply the Esperance biomass cost for the start-up phase of the project is plant. Woodside considers that this circa A$100 million (Woodside’s share 50%). development has the potential to be The agreement with Western Power applied to other regions in Australia contains a number of conditions precedent and overseas. which are to be met within nine months.

38 Woodside Petroleum Ltd. 2000 Annual Report Exmouth Power Project (Australasia) has the rights to intellectual It appears as an “ice-like” structure in Western Power Corporation and the property for commercial applications in which the natural gas is entrained within Office of Energy also invited expressions Australia, New Zealand and the South ice crystal cages forming a “solid gas”. In of interest in late 2000 for the supply of Pacific islands and is in the process of naturally occurring gas hydrate, this structure TM electricity to Exmouth in the north-west installing a PowerBuoy unit off the coast is stable at minus 15 degrees Celsius. of Western Australia. Woodside, together of Portland,Victoria for Powercor Woodside, in conjunction with Curtin with its joint venture partner Energy Australia Ltd., in conjunction with the University, has developed a process Equity, have submitted an expression of Australian Greenhouse Office. producing synthetic natural gas hydrate interest based on a power station fuelled Investment in Ceramic Fuel Cells Limited (SNGH) that is stable at warmer by trucked LNG sourced from the Burrup temperatures. Many times the “ice” Peninsula and possibly augmented with Woodside increased its investment in volume of gas is contained within the wind energy and/or wave energy deploying Ceramic Fuel Cells Limited (CFCL) in structure potentially making this an ideal Ocean Power Technologies’ equipment. 2000 by a further A$15 million. This method of transporting gas without high- Tenders are expected to be called by follows the Company’s initial A$5 million pressure containment. Woodside’s SNGH Western Power during the second or investment in 1999. also contains more gas than the naturally third quarter of 2001. CFCL’s work program aims to develop occurring variety. Because of these properties there are many potential Wave Power commercial electricity generation products that provide high energy conversion applications for this technology ranging In late 2000,Woodside purchased a 5% efficiencies, greatly reduced Greenhouse from recovery of offshore gas to stake in the US-based wave power emissions, lower power generation noise alternative fuels for road transport. generation company, Ocean Power levels and competitive electricity costs. Technologies Inc for US$3.62 million. During 2000, a three-year rolling The first commercial product is expected The company is a leading developer of agreement with Curtin University to fund for delivery in 2003. wave energy power systems, which use the the Chair of Hydrocarbon Research was energy in ocean wave motion to generate CFCL is developing solid oxide fuel cell signed. Within this agreement Woodside competitively priced electricity in products that will enable customers to has committed A$600,000 annually with increments of one megawatt or more from generate electricity on their own premises, additional milestone payments for success structures called PowerBuoysTM. using natural gas as the fuel source. This in accomplishing specific targets on on-site power generation paradigm is hydrate research. The first milestone The investment also gives Woodside the gaining increasing attention throughout payment has already been made as a result option to purchase by 2012, 500,000 the world, particularly in the USA, and of the successful commissioning of a pilot tonnes of carbon credits (CO equivalent 2 market assessment studies indicate substantial plant to manufacture SNGH in a semi- credits) from Ocean Power Technologies global demand for this type of product. continuous mode. Work is continuing at a discount to prevailing market prices with the pilot plant to further optimise and a further option to acquire a 40% Natural Gas Hydrate Research the process in the near term with a view equity stake in Ocean Power Natural gas hydrate is formed from water to commercialisation. Technologies’Australian-based subsidiary, and natural gas and occurs naturally in Ocean Power Technologies (Australasia) deep oceans and under permafrost. Pty Ltd. Ocean Power Technologies

LNG being transported by road in central Australia. (photo courtesy of Energy Equity Corporation)

Woodside Petroleum Ltd. 39 2000 Annual Report The Company has put in place a business risk-management framework. R

RISK MANAGEMENT

Business Risk Management environment, day-to-day operations and • To maintain financial stability during sustained periods of unfavourable oil Woodside defines business risk as any financial issues. However this approach prices, exchange rates and interest rates; event or action which has the has been expanded to encompass all areas potential to prevent the Company of activity ranging from regulatory • To ensure the Company will be able to achieving its objectives. The compliance, product supply reliability, meet its financial commitments definition is wide ranging to ensure human resources through to external including payment of dividends; and that due consideration is given to all relationships including joint venture • To ensure the Company can make issues (both opportunity and hazard) partners, government, customers and major investments in pursuit of its with the potential to impact upon investors. Once a business risk is business objectives with a greater level Woodside’s business. identified,Woodside’s key management of confidence. processes and systems are aimed at In order to properly identify and develop providing the necessary framework to In recent years,Woodside’s management of strategies and actions to manage risk, the enable the risk to be managed. financial risk has been aimed at locking-in Company has put in place a business risk- a proportion of future revenues and management framework which is based As part of Woodside’s quality assurance expenditures at prices which will provide on the following key elements: process, a major review of the business funds for the capital investments required risk-management framework was to achieve the Company’s long-term • A process to identify specific business undertaken during 1999. The review risks; growth objectives, whilst retaining a highlighted a number of additional significant exposure to future price • The measurement of the identified risk business risk areas which were movements. This policy reduces some of in terms of potential impact and progressively addressed during 2000. the potential upside in a high oil price likelihood of occurrence; environment while providing some Financial Risk Management • An assessment of the external protection against downside price risks in environment and the control environment As a growth company with a long-term a volatile commodity market. in place to manage the risk; focus operating in a volatile commodity • The development of further plans market,Woodside enters into financial Hedging levels are governed by Board which may be required to manage the transactions for the purposes of managing, policy and are monitored by the Board’s risks; and through hedging, exposure to oil prices, Finance Committee. As a matter of principle, forward hedging may not • Monitoring to ensure controls to foreign currencies and interest rates. This exceed identified real exposure levels and manage the risk are fit for purpose, approach is intended to ensure that the properly implemented and subject to management of financial risk is performed generally, hedge levels do not exceed 50% ongoing improvement. in a manner which will provide the of exposure for one year into the future, Company with a greater level of with percentage levels declining into the Woodside’s approach to risk management confidence that it can meet its three key medium term. has historically focussed on the objectives, namely: management of health, safety and the

40 Woodside Petroleum Ltd. 2000 Annual Report Oil Hedging Currency Hedging Opportunity Cost of Hedging Woodside manages its exposure to oil Currency hedging is undertaken against The opportunity cost of oil price and price movements by undertaking hedging specific future expenditure commitments currency hedging (after tax) included in activities to cover a proportion of its by way of forward exchange contracts and the Statement of Financial Performance identified barrels of oil equivalent currency option contracts. Hedging is for 2000 was A$381.6 million and A$24.3 exposure over a four-year period. This predominantly the purchase of Australian million, respectively. exposure is hedged using a mix of short- dollars and is undertaken in respect of term futures contracts, longer term identified Australian dollar net exposures floating to fixed-price swap contracts and taking into consideration known and oil options contracts. All commodity forecast receipts and payments. hedging is priced against the prevailing New York Mercantile Exchange’s West Interest Hedging Texas Intermediate (NYMEX-WTI) first The Company maintains a diversified and second contracts. funding portfolio designed to meet both its ongoing requirements and to ensure As at 31 December 2000,Woodside had ready access to liquidity to be in a 47 million barrels of oil equivalent position to take advantage of new business (MMboe) hedged at an average price of Oil Price Hedging as at 31 January 2001 opportunities as they materialise. Whilst US$17.99 per barrel for a period of four Year the nature and timing of these 1234 years on a rolling calendar basis. This opportunities will dictate the exact term hedge cover has been put in place on a Swaps & Futures and structure of the debt facilities, the BOE Cover (000’s) 18,443 14,998 5,823 2,243 progressive basis over the last three years. Company’s objective is to spread its source % Cover of exposure 42.34 43.43 21.46 9.65 Details of the latest oil hedge position Average Price(US$)bbl 17.59 17.85 19.61 21.03 of borrowings and to maintain a spread of effective 31 January 2001 are provided in maturities across those borrowings for Collars the adjacent table. both repayments and interest rate changes. BOE Cover (000’s) 4,698 0 0 0 % Cover of exposure 10.78 0 0 0 Average Price (US$)bbl 17.13 0 0 0 In addition Woodside also hedges this exposure by maintaining a portion of its Total total debt liabilities under a fixed-rate BOE Cover (000’s) 23,141 14,998 5,823 2,243 % Cover of exposure 53.12 43.43 21.46 9.65 borrowing agreement.

Woodside Petroleum Ltd. 41 2000 Annual Report 42 Woodside Petroleum Ltd. 2000 Annual Report Woodside views all injuries and industry-related diseases as preventable and is striving to continuously improve. M

MANAGING HEALTH SAFETY AND THE ENVIRONMENT

Safety Management hazard that is identified today prevents an government agencies and international Woodside’s management and accident tomorrow. For this reason, it is exercises to test the Company’s ability to employees view all injuries and pleasing to see the ratio of hazard reports support incidents in selected overseas industry-related diseases as preventable. to accident reports continuing to improve. locations. We are striving continuously to It is important to acknowledge that the A number of significant training programs improve the health and safety of our number of injuries and incidents in 2000 for Emergency Teams which included the employees and contractors. is unacceptable and we must now mobilise participation of overseas trainers to Regrettably, in the last 12 months, 85 of the continuing support of the entire enhance the quality of the programs were our people sought the services of a workforce in order to reduce significantly completed during the year. A comprehensive medical practitioner as a result of the number of incidents and injuries project to define all the competency workplace injuries. In some cases the in 2001. standards required for each role within the impact on the person’s health, lifestyle and Woodside emergency response management Protecting and Promoting the Health of family was considerable and is continuing. system, was under-taken. This is a major Our People There were also 44 incidents which had milestone as no other project of its kind the potential to cause serious injury or Caring for people is a key value at has been completed in Australia or overseas even fatalities. Woodside. We are committed to for this industry. The results will be used protecting and promoting the health of to develop assessment criteria for employees Experience globally in the oil and gas our workforce and their families. and contractors in emergency response industry suggests that at some point the and support training programs in the future. potential in these incidents will be realised Close attention continued to be paid to unless the root cause deficiencies are health promotion during 2000. The Managing the Environment addressed. At the heart of the majority of corporate health promotion theme was At Woodside, we share the desire of the these incidents is a failure in one of the Gender Health and numerous community to develop resources in a way processes which contribute to the presentations on this important lifestyle that meets the needs of the present, integrity of facilities.Very often these issue were made to staff. In addition, without compromising the ability of failures are “sleepers” which may have Woodside again sponsored the Heart future generations to meet their own remained undetected for a number of Foundation’s “Climb to the Top”stair needs. We remain committed to achieving years. These were the circumstances climbing campaign which continues to be excellent results in environmental surrounding a serious incident in April popular amongst Woodside personnel. management and in continuing to 2000 where part of the lifting device More than 100 teams from Woodside were improve environmental performance. failed on a fast rescue craft during a involved in the event and again this was routine lift on board the Cossack Pioneer. the highest number of teams from any A high level of employee interest and The vessel and its five occupants fell more participating company in Western Australia. commitment is an essential component of than 10 metres into the sea. Thankfully all Woodside’s bid to continue to improve its five occupants survived although one Emergency Response Management environmental performance. This was remains seriously disabled as a result of Over 70 emergency response exercises again evident by the level of interest in this incident. were successfully conducted during 2000 the third Woodside Environment Award. resulting in a high level of learning and The award, which was inaugurated in In response, we have formed a dedicated necessary changes to practices were 1997, is designed to recognise the project team to review and recommend identified and implemented. This program contribution and initiatives of employee improvements to engineering processes. included a major exercise with the and contractor work groups in improving One area of safety management that Northern Endeavour, a mobilisation of environmental management. continues to improve is the hazard oil-spill equipment involving major reporting culture. We believe that the

Woodside Petroleum Ltd. 43 2000 Annual Report Six submissions covering a range of Gas may also be flared from new facilities, continued to be well below the plant’s excellent initiatives were received and the when gas export or re-injection licence limit of 10 milligrams per litre. award was presented to the Karratha equipment is being commissioned. onshore gas plant team for developing a Waste Management Elevated flaring levels were experienced process to re-route flash gas to LP fuel. Woodside’s focus on improving waste during the commissioning of the This will enable the amount of management practices has continued Northern Endeavour in late 1999 and hydrocarbon gas vented from the LNG through 2000 with the implementation of continued into early 2000 until completion sulfinol process to be reduced, which in a total waste management contract, a of the commissioning of gas re-injection turn will reduce the plant’s Greenhouse waste disposal database, updated waste facilities. Flaring levels have since been emissions by 300,000 tonnes of carbon disposal procedures and ongoing training minimised and maintained at planned levels. dioxide equivalent per annum. and awareness programs. The identification of opportunities for Changing Environmental Legislation Woodside measures and reviews the quantities of gas flared as a proportion of improved waste segregation and recycling The Environmental Protection and total production and continues to seek continued throughout the year. Biodiversity Conservation Act 1999 (EPBC) opportunities for cost-effective initiatives Paper consumption is continuing to be was implemented on 16 July 2000. The to reduce the volume of flared gas. Flare monitored as a key environmental Act, which provides protection for matters flow meters were commissioned at the performance indicator by Woodside. A of national environmental significance, has onshore gas treatment plant in 2000. concerted effort is being made to reduce resulted in a more complex and potentially Improved identification of flared gas paper usage by encouraging the use of longer environmental approval process. streams on the North Rankin-A offshore paperless office technology which is widely production platform has enabled the Since the inception of the Act,Woodside available throughout Woodside. Paper development of a flare reduction strategy has submitted 12 submissions for approval recycling programs have been established for this facility. for works such as seismic surveys, at all facilities and are enthusiastically geotechnical investigations, exploration Produced Formation Water supported by employees and contractors. and appraisal wells, condensate field development plans, production wells and Produced and condensed water associated Monitoring and Research with oil and gas reservoirs must be pipeline modifications. To date, only the Woodside has comprehensive environmental separated from products and treated to Echo-Yodel project and an appraisal well monitoring programs in place to assess regulatory limits prior to being discharged test in Permit WA-271-P were “controlled potential impacts on proposed site to sea. The monthly average actions” under the Act and all approvals locations as well as ongoing programs that concentration of oil in produced are progressing on time. Maintaining monitor the effect of operations on the formation water from the Cossack Pioneer open communication with the surrounding environment. government is a key element of and Northern Endeavour floating, Woodside’s environmental policy and production, storage and offloading (FPSO) The ChEMMS program monitors the copies of Woodside’s submissions can be facilities were below the regulatory limit health of key environmental components- found at Environment Australia’s website of 30 milligrams per litre during 2000. corals, mangroves, sediments, oysters and (www.environment.gov. other rocky shore species in Mermaid The North Rankin-A platform’s oil-in- au/epbc/projects.html). Sound adjacent to the onshore gas plant. water performance has improved No major variations from general long- considerably with the installation of a Performance Indicators term trends were detected in 2000. centrifuge system to improve the More environmental incidents were separation of produced formation water Sea-bed monitoring was conducted in the reported in 2000. The majority of prior to being discharged. Some limited vicinity of the Goodwyn-A platform. The environmental incidents reported were regulatory exceedences were experienced findings support laboratory studies that minor contained oil spills which did not during commissioning. Similarly, the ester-based drilling fluids degrade rapidly result in any external discharge. Woodside Goodwyn-A platform experienced in the waters surrounding the North West believes this increase was attributable to a occasional short-term exceedences during Shelf project. higher level of participation by employees the year, however monthly averages have and contractors in the reporting of remained below the regulatory limit. The A sediment sampling survey was environmental incidents. exceedence periods have resulted in less conducted across three exploration than 0.1% increase in oil loads during the permits in the Joseph Bonaparte Gulf Flaring reporting period. The Western Australian located off the coasts of Western Australia Small amounts of gas are flared from Department of Minerals and Energy has and Northern Territory. The survey assessed Woodside operated facilities during been kept fully informed regarding levels the baseline physico-chemical characteristics normal operations for safety and of oil in discharged water and the of sediments and the composition of the operability reasons. This includes continuous performance improvements which have sediment biological assemblages for an low-rate flaring associated with pilot and been made. area where no data previously existed. purge systems and occasional periods of elevated flaring during process upsets. The concentration of oil-in-water from the onshore gas plant’s effluent stream has

44 Woodside Petroleum Ltd. 2000 Annual Report A comprehensive environmental baseline The Company carried out a whale- Sustainable Development in Mauritania study was undertaken for the Legendre monitoring program on board the seismic Mauritania will be Woodside’s first major oil field in early 2000. This study survey vessel to assist researchers in international-operated opportunity and included grab and dredge samples and acquiring information on the abundance, the Company is committed to applying sea-bed video surveys. distribution and diversity of whales in the Australian standards for health, safety and offshore waters of the Great Australian environmental management in Mauritania. Environmental assessments were conducted Bight during the summer months. during the year on behalf of the Sunrise Where exploration efforts result in a Gas project. These included an Vincent / Enfield Exploration and Appraisal discovery and further development, archaeological and heritage survey, a flora Woodside is continuing exploration and Woodside is working on a strategy for and fauna survey of Glyde Point (north- appraisal activity in Permit WA-271-P. adopting the principles of Sustainable east of Darwin), a video survey of Sunrise All activity has been managed with a very Development in its Mauritanian operations. Shoals in the Timor Sea as well as onshore high level of environmental care. A In doing so the company intends to: and offshore geo-technical investigations. comprehensive community awareness • manage the safety of all the people Woodside updated its oil-spill modelling program has been employed. Proactive, involved in, and affected by operations; best practice measures, have been applied capability by installing a new model at the • understand the requirements of such as the use of Supergreen burners on Bureau of Meteorology Special Services stakeholders and secure their input into Unit. This model enables the Company well tests, avoidance of environmentally decision-making processes; to predict risks to the environment in the sensitive periods and extensive assessment studies (sea-bed and aerial surveys). • maximise the benefits to the event of an oil spill and to prepare Mauritanian economy from any appropriate response strategies. In general, the environmental performance subsequent developments; and has been of a high standard. Regrettably, • minimise the impact on the environment. Environmental Management in two environmental incidents have been New Projects recorded which involved the loss of In the absence of applicable Mauritanian seismic streamer and fuel-bunkering near legislation regarding the development and Otway Basin Seismic Survey sensitive areas. implementation of environmental management plans for oil and gas During the year,Woodside developed a Project Approvals exploration activities,Woodside’s comprehensive stakeholder risk environmental management of the 2001 The environmental approvals for the management program for a 3-D seismic drilling campaign will be carried out development of the Echo-Yodel gas and acquisition program in the Otway Basin in according to standards and procedures condensate project is progressing, with Permit VIC/P43. The primary objective applied in Australian waters. This includes approval from the Commonwealth of the program was to identify and ensure the preparation of an Environmental Plan, Environmental Regulatory Authority key environmental and social values and prepared in accordance with Australian (Environment Australia) anticipated in the sensitivities were protected. regulatory requirements. A key objective first half of 2001. The outcomes of this project include a of this Plan is to ensure that drilling comprehensive stakeholder database, Approval for the Legendre project’s activities in Area B, offshore Mauritania, production of the first seismic survey Environmental Plan was received from conform to Woodside’s corporate environment plan under the new Act, an Environment Australia during the year, the environmental policies and health, safety environmental resource atlas, and funding first such approval for a production facility. and environmental management system. of the Deakin University’s Blue Whale Environmental approval was obtained The northern inshore region of Study to assess the abundance and from the Western Australian Department Mauritania includes the Banc d’Arguin distribution of this species. of Environmental Protection for the National Park,Africa’s largest coastal and marine national park, a UNESCO World Great Australian Bight Seismic Survey fourth LNG train in the form of a site works approval. Heritage site and a Ramsar-listed Wetland Woodside commenced a 2-D seismic of International Importance. The Banc acquisition survey in the Great Australian d’Arguin is also listed on the Worldwide Bight in late 2000. A comprehensive Fund for Nature Global 200 List. stakeholder consultation program was developed and implemented in support of Woodside and its drilling contractors will this activity. The assessment and approval maintain a series of comprehensive of the 2-D seismic survey was conducted environmental management controls in under the new Act, with approval being order to ensure the environmental granted by the Governor-General to integrity of this important area. A operate within the Great Australian Bight comprehensive oil spill contingency plan Marine Park. will be in place in the unlikely event of an oil or fuel spill occurring during drilling and well-testing activities.

Woodside Petroleum Ltd. 45 2000 Annual Report 46 Woodside Petroleum Ltd. 2000 Annual Report Woodside continues to be a leading force in a range of community- based activities. C

COMMUNITY DEVELOPMENT

Through its sponsorship and donations • Youth Focus - Driven by the St Vincent De Paul Society, involves program and employee involvement, philosophy “helping teenagers and both a financial contribution from Woodside continues to be a leading saving lives”,Youth Focus provides Woodside as well as employees acting force in a range of community-based support services to young people (14- as volunteers in the centre. 18 years of age) at risk of suicide or self- activities, with particular emphasis on • Black Swan Theatre Company - harm. Through a Woodside partnership adding energy to really making a Woodside has established a partnership with United Way,Youth Focus will with Black Swan Theatre Company. difference for the future of our society. introduce their innovative camp Over a three-year period, Black Swan concept to the Pilbara. In addition, Theatre will take their unique Making a difference for Young Australians Woodside will provide funding direct expertise to the Pilbara to encourage to Youth Focus for two full-time The Company is keen to provide young people to create their own role professionals to work with and mentor opportunities for young people. This in a theatre production that reflects youth at risk in metropolitan Perth. involves establishing partnerships with a the aspirations of young Western Woodside employees will also have the diverse group of organisations that provide Australians and embraces the region’s opportunity to train as mentors and geographic diversity. direction for young people in a range of learn vital skills to help prevent this areas including cultural pursuits, science, growing trend. • EcHO - WA Symphony Orchestra - technology, education and environmental By transforming the partnership with • Awesome Children’s Festival - Woodside endeavours. the Western Australian Symphony has committed to becoming a principal Orchestra,Woodside is ensuring that partner of the festival. The Awesome During 2000,Woodside committed the EcHO, the Orchestra’s education Festival aims to inspire young people over A$700,000 to support organisations arm, is able to bring classical music to between 5 and 16 years of age to which focus on young people. Ongoing young people at risk and living in develop artistic creation and difficult situations in Perth’s detention partnerships with WA Youth Orchestra, expression. The main objective is to centres and prisons. Scitech,Art Gallery of Western Australia assist youth development through through its Year 12 Perspectives, Canteen, promoting empowerment, building Young Achievers, Camp for Kids, United self-esteem and acting as a deterrent to Way, Diabetes Research at UWA, and the potentially destructive behaviour. TVW Institute for Child Health Research • Earthwatch - Woodside is supporting were strengthened and new partnerships Earthwatch’s mission for promotion formed. Some of the exciting new long- and participation of field research and term partnerships include: conservation projects. This is a two- tiered partnership that offers • Surf Life Saving - Woodside has opportunities for young people at risk pledged a financial commitment to and Woodside employees to participate Surf Life Saving WA (SLSWA) and in fellowships to work with Earthwatch each club in Western Australia to to study and preserve Australian fauna ensure this important organisation can in their natural habitat. achieve its commitment to community safety and youth development. This • Passages - This unique inner-city three-year partnership sees Woodside resource centre provides a focal point become principal sponsor of SLSWA for homeless young people to find a to help ensure our employees, the safe place in order to start their community and their young families journey to finding a healthier and continue to safely enjoy Western better lifestyle.This three-year Australia’s unique coastal environment. partnership with Rotary and the

Woodside Petroleum Ltd. 47 2000 Annual Report Employee Champions In addition, the Company through its These programs will be expanded in 2001 Each one of these sponsorship agreements environmental awards program donated through the introduction of an Indigenous is managed by a group of employee A$5,000 to the establishment of tourist Cadetship program, to meet the gap in champions who contribute their expertise, and nature paths through the Cape Range provision of opportunities for local passion and leadership to ensure these National Park. Other planned initiatives indigenous tertiary students. It is supported partnerships are mutually beneficial for include sponsorship of the Scitech Road by a cross cultural training program for both Woodside and the community. Show into the region, school information all employees. packs and community open days. Other project teams are also taking the A Heritage protocol and Heritage benefits of working within the Eastern Australia Management Committee have also been established to ensure that all associated community to foster team spirit. The Woodside returned to its Victorian heritage issues are managed effectively. Echo-Yodel team have embarked on an origins, embarking on exploration ambitious monthly community project activities in the Otway and Bass Strait The model applied to indigenous and already have raised over A$2,000 in a Basins in offshore Victoria. In 2000, the relationships with the North West Quiz night for Guidedogs for the Blind, Company together with its joint venture Shelf’s neighbouring communities is given the Suffolk Hostel a newly partners in the Otway Basin donated being adopted by the Company in new decorated lease of life and made some A$5,000 for a shade cover for the Port development areas such as the West speech-and hearing-impaired children’s Campbell toddler playground. Kimberley, Northern Territory, East Timor lives a little bit easier. and the Bowen Basin in Victoria. In the town of Woodside near Yarram in In the Pilbara south-eastern Victoria, the Company In the North (Northern Territory and donated A$5,000 in support of the Woodside In Karratha,Woodside continued to East Timor) support several local community group Primary School’s fund-raising program. Woodside, as operator of the Sunrise Gas activities including major sponsorship of Relationships with Indigenous Project on behalf of Shell, Phillips and junior cricket in the west Pilbara through Communities Osaka Gas, has worked closely with the the Western Australian Cricket Association. communities in Darwin and East Timor. The program is designed to provide junior Key events in 2000 included the official cricketers in the region with the opening ceremony of the Ngarluma and In Darwin, consultations with a range of opportunity to receive specialist coaching Yindijbarndi Foundation in Roebourne community stakeholders regarding and involves both Woodside staff and and the building of long-term potential onshore developments have been parents. In addition, the company relationships with the Larrakia people in undertaken.The Larrakia and Tiwi continued to sponsor the Pilbara Tourism Darwin and the East Timorese in relation Aboriginal people are the traditional Association and the Aboriginal Art Award to the Sunrise Gas Project. owners in the Darwin area and during the at the Cossack Art Awards. year a sacred site avoidance survey was The Ngarluma and Yindijbarndi undertaken to allow the project to carry In the Gascoyne Foundation, the most visible product of out geo-technical studies on the Gunn the Native Title Agreement for future The North-West Cape is rapidly Peninsula. Larrakia people were also expansion on the Burrup Peninsula in the becoming Australia’s newest hydrocarbon employed as field assistants on the Pilbara, is a benchmark concept that will province.Working closely with the archeological and environmental studies. see long-term benefits accessed by all communities in Exmouth, Coral Bay and Discussions continue with the Larrakia Ngarluma and Yindijbarndi peoples. Carnarvon,Woodside is ensuring and Tiwi in regard to developing a mutual Focussing on provision of social, economic community concerns and expectations are understanding of each others concerns and cultural programs for this generation addressed. In a unique program,Woodside and aspirations and the creation of a and the future, the Foundation now has has made a commitment to keeping the shared vision for the Sunrise gas project over 380 registered members, a fully- community informed of all exploration and both Aboriginal communities. functional Board of Directors and a Chief and appraisal activities in the region. Executive Officer. Activities have included a comprehensive In addition, all performance indicators communication strategy involving have been met in relation to Woodside’s monthly activity updates by mail, involvement in a local education program advertisement and posters, an exclusive - Gumala Miruwarni (“Coming together 1800 toll-free number for any community to learn”) and the employment and questions, visits by the project team, a training initiative - Warrgamugardi preliminary capability assessment for local Yirdiyabura (“Pathways to employment”). industry involvement and community and Both programs are successfully providing environmental workshops for all opportunities for local indigenous people exploration staff and contractors. to directly compete in a rapidly changing Woodside was also a key sponsor and environment. participant in AquaFest 2000, a local festival celebrating industry and community.

48 Woodside Petroleum Ltd. 2000 Annual Report Woodside sponsored junior surf lifesavers.

East Timor to develop a program to help the East Finding solutions for the future Woodside has been working with the East Timorese people in the Dili suburb of Helping uncover solutions for the future is Timorese community in a number of ways. Comoro rebuild and repair their houses an integral part of Woodside’s operating and at the same time, receive training in philosophy. In addition to a variety of After the post-referendum violence in East the building trades. environmental and energy technology Timor, more than 300,000 refugees fled to research projects, the Company is also The East Timor National University in West Timor and were living in refugee entering the third year of its partnership Dili re-opened in October 2000. camps. In East Timor, the large majority with the Western Australian Museum to Unfortunately, many students live some of homes, public buildings and other survey the Dampier Archipelago. infrastructure had been destroyed and as a distance away from campus and were result many people were homeless, sick unable to afford the transport cost. The Woodside has committed A$630,000 and injured.Woodside provided medicine, Sunrise gas project has provided bus to the museum over a four-year period food, mattresses and storage space in Darwin transport to resolve this problem. to support the survey. This survey will add in support of the Australian relief effort. substantial knowledge to the marine biology Woodside was also one of the founding of the north-west coastal region. It also members of a steering committee for Woodside also contributed to the allows for community involvement and education, training and employment of Northern Territory Museum’s initiative to facilitation of wider understanding of this East Timorese in the petroleum industry. retrieve, catalogue and protect the incredible marine environment through The committee aims to facilitate collection at the Dili Museum, which the Woodside Dampier Gallery at the opportunities for East Timorese people to was being threatened by impending Museum and the preparation of an enable them to compete effectively for monsoon rains. international film documentary on the region. employment opportunities in the oil and After being approached by Project Timor, gas industry and related East Timorese a Perth-based, non-government government administration roles. organisation,Woodside worked with them

Woodside Petroleum Ltd. 49 2000 Annual Report C CORPORATE INFORMATION

Board of Directors

CB Goode BCom (Hons), MBA JH Akehurst, MA (Oxon), FIMechE, RES Argyle, LLB, DIP PL (Dundee) (Columbia), HonLLD (Melb), (Managing Director) FAICD (Chairman) Director since 7 February 1996; appointed Director since 1 November 1995; Director Director since 3 February 1988, Chairman Executive General Manager of Woodside’s of Woodside Group Staff Superannuation of the Nominations and Shell operating subsidiaries from June 1994 Pty. Ltd.; Chairman of the Corporate Relationship Committees and ex-officio until appointment as Managing Director Governance Committee; member of the member of all other Board Committees. on 3 April 1996; member of the Finance,Audit, Nominations and Shell Chairman of Australia and New Zealand Corporate Governance; Health, Safety and Relationship Committees. Chairman of Banking Group Limited;Australian United Environmental, Finance and Shell Aurora Gold Ltd. and Leeuwin Ocean Investment Company Limited; Diversified Relationship Committees; Director of Oil Adventure Foundation Ltd. and a Director United Investment Limited;The Howard Search Limited since August 1999; of Scitech Discovery Centre. Over 35 Florey Institute and The Ian Potter Member of the Board of the University of years experience as a commercial and Foundation Ltd.; Director, Singapore Western Australia’s Graduate School of resources lawyer in Perth. Age: 64. Airlines Ltd. and Air New Zealand Management; the Board of the Asia Limited. Age: 62. Research Centre and the Board of Youth Focus. Over 25 years experience in the international oil industry. Age: 52.

50 Woodside Petroleum Ltd. 2000 Annual Report JR Broadbent, BA (Economics and Maths)

Director since 17 June 1998; member of the Finance, Human Resources and Shell Relationship Committees. Board Member, Reserve Bank of Australia and Coca-Cola Amatil Limited.Vice President, Board of Trustees,Art Gallery of New South Wales; Sydney Advisory Board - Salvation Army Eastern Territory and Director of the Sydney Theatre Company. Over 20 years experience in the finance sector, principally as a senior executive of Bankers Trust. Age: 52.

KA Dean, BCom (Hons), FCPA, MAICD

Director since 18 February 1998; Chairman of the Audit Committee; member of the Finance and Corporate Governance Committees; Chief Executive Officer of Shell Finance Services division of Shell International Limited, London; non-executive Director of Shell Australia Limited. Over 25 years experience in the Australian and international oil industry. Age: 48.

PJB Duncan, BE (Hons.1), DBS

Director since 4 June 1999; member of the Nominations Committee; Chairman of The Shell Group of Companies in Australia; Chairman, Shell New Zealand Limited and Shell New Zealand Holdings Limited. A Director of various Shell Pacific Island companies and Chairman of the Australian Institute of Petroleum. Over 35 years experience in the international oil industry. Age: 59.

Dr AJ Parsley, BSc, PhD

Director since 4 June 1999; member of the Audit, Human Resources and Health, Safety and Environmental Committees; Chief Executive Officer Shell Development (Australia) Pty. Ltd. and Director, Shell Australia Limited. Over 30 years experience in the international oil industry. Age: 57.

Dr PJB Rose, BCom (NZ), DipEc (Camb), PhD

Director since 6 December, 1990; Chairman of Health, Safety and Environmental Committee; member of Audit, Nominations and Shell Relationship Committees. Director of Australian United Investment Company Limited;The Ian Potter Foundation Limited; Australian Ballet Centre;Air New Zealand Limited and Ansett Holdings Limited. Formerly Adviser to Prime Minister, 1977-1983; Director of the University of Melbourne Business School, 1984-2001; Sidney Myer Professor of Commerce and Business Administration,1978-2000. Age: 65.

RH Searby, QC, MA (Oxon)

Director since 17 June 1998; Chairman of the Human Resources Committee and member of the Corporate Governance and Shell Relationship Committees. Formerly Chairman of The News Corporation Limited; Chairman of Equity Trustees Ltd and non-executive Director of Rio Tinto Group of Companies and of Shell Australia Limited. Chancellor of Deakin University and Director of BRL Hardy Ltd and Amrad Ltd. Appointed Queen’s Counsel in 1971; over 20 years experience in the resources industry. Age: 69.

RAG Vines, BE (Hon), DSc (Cit. WA), FAIM, FAIMM, FTSE

Director since 19 February 1997; Chairman of the Finance Committee; member of the Health, Safety and Environmental, Human Resources, Nominations and Shell Relationship Committees. Director of WMC Limited and Central Norseman Gold Corporation Limited and Chairman of Scitech Discovery Centre; Retired Chairman and Managing Director,Alcoa of Australia Limited. Over 35 years experience with Alcoa internationally and in Australia. Age: 64.

Woodside Petroleum Ltd. 51 2000 Annual Report 2000 Corporate Governance increased where it is felt that additional Statement expertise is required in specific areas, or where an outstanding candidate is This statement summarises the Board’s identified. Where the Board is greater in number than 9 it would be the governance practices that were in effect intention of the Board to return the during the year. number to 9 upon the retirement or resignation of the next independent Communications with Shareholders Director, subject to the resulting The Board aims to ensure that composition continuing to satisfy shareholders are kept informed of all Board policy. (Currently the Board major developments affecting Woodside. comprises 10 Directors including the Managing Director. On the retirement Information is communicated to or resignation of the next independent shareholders through the distribution of Director, it would be the Board’s the Annual and Half-Yearly Reports; intention to recommend that the releases made by Woodside throughout the number of Directors on the Board be year with respect to changes in the held at 9.); and business, future developments, exploration • the number of Shell-nominated and drilling progress and results; and in the Directors, as a proportion of the Board, Chairman’s address delivered at the Annual should approximate the proportion that General Meeting. Shareholders at the Shell’s holding of fully paid shares in Annual General Meeting are encouraged the Company bears to all of the issued to ask questions regarding matters that fully paid ordinary shares in the may not have been dealt with or may not Company. have been sufficiently covered in the Annual Report. Woodside also posts all All Directors bring, as they are expected ASX and media releases on the to, an independent view to the Board’s Company’s website deliberations. Details of the age, experience (www.woodside.com.au). and qualifications of Directors are set out on pages 50 to 51 of this Annual Report. Board Composition Whilst election of Directors is a matter for Board membership remained at ten for shareholders in general meeting, the Board the year. will bring forward candidates for All Directors are non-executive with the shareholders’ consideration. As a guide to exception of the Managing Director, Mr Directors’ tenure, the Board’s position is John Akehurst. The Chairman and five expressed in the following policy, adopted other Directors are independent non- in March 1999: executive Directors.The remaining three • Non-executive Directors appointed non-executive Directors are officers of after March 1999 will normally retire Shell Australia Limited, a substantial on attaining age 70 years or on shareholder of the Company. completion of 15 years service, whichever date occurs first; In assessing the composition of the Board, • Non-executive Directors in office in the Directors have regard for the March 1999 will normally retire on following guidelines: completion of 15 years service or 8 years from the date of adoption of this • the Chairman should be both non- policy, whichever occurs later, or on executive and independent and an attaining the age of 72 years; Australian citizen or permanent resident; • The Board may support extensions of • the Managing Director should be a these dates and periods in particular full-time employee of the Company; circumstances; and • more than half of the Board should • An executive Director may only comprise Directors who are both non- become eligible for appointment as a executive and independent; non-executive Director after a suitable • the Board should represent a broad period away from the Board. range of qualifications, experience, age and expertise considered of benefit to Board Responsibilities the Company; The Board considers that its essential • the Board should ideally comprise nine responsibility is to oversee Woodside’s Directors including the Managing business activities and its management Director, although this number may be

52 Woodside Petroleum Ltd. 2000 Annual Report primarily for the benefit of Woodside workings of its committees. Board The program is aimed at ensuring that the shareholders, but at the same time members complete confidential Company conducts its operations in a recognising its responsibilities to its questionnaires, the results of which are manner that allows risks to be identified, employees, the community and analysed by an external consultant and assessed and appropriately managed. environment within which it operates issues addressed in a formal period outside Management is accountable for the and, where appropriate, other stakeholders. normal Board meetings. In addition, the implementation and management of this Responsibility for management of Board assesses the performance of the program. Board papers and management Woodside’s business activities is delegated Managing Director by reference to agreed presentations routinely address the risks of to the Managing Director, who is key duties. all proposals submitted to the Board for accountable to the Board. approval. Discussion and approval of the The terms of reference and composition Annual Budget and a rolling 10-year Having regard to the uncertainties and of each Board committee are also forward view presented by management high costs of the oil and gas business, as reviewed each year.As a result of these assist the Board to identify significant well as the need to replace depleting reviews, the terms of reference for the business risks and, together with management, assets, the Board places significant Nominations Committee were updated decide upon and implement ways of emphasis on long-range planning, as well and the Acquisitions and Divestments managing those risks. Performance is as participation in joint ventures in order Committee was disbanded. monitored by management and communicated to share risks. To achieve these objectives, • Meetings through monthly Board reports. management is expected to engage in commercial relations with others in a The Board held ten scheduled meetings • Code of Business Ethics manner that will continue to make during the year ended 31 December 2000 The Board has in place a Code of Woodside their “partner of choice”. In and in addition had eleven unscheduled Business Ethics, which applies to all addition, management is charged with the meetings. Senior staff attended and made Directors and employees within the group. responsibility to submit to the Board its presentations at Board meetings as proposals for strategic direction, as well as considered appropriate and were available • Directors and Employee Share Dealings all necessary financial plans and proposals for questioning by Board members. In The Board also has in place a specific for major projects. May 2000 the Board visited the North share trading policy, binding on Directors West Shelf Venture’s operations. The key responsibilities of the Board include: and employees, designed to assist Directors • Conflicts of Interest and employees to avoid insider trading, and • Developing strategy with management providing guidelines for trading in Woodside and approving plans, new investments The Board has in place ‘conflict of interest securities. The policy stipulates that the and major capital and operating guidelines’ which operate if there is expenditures proposed by management; only appropriate time for a Director or potential for conflict between the personal employee to acquire or sell Woodside • Defining and setting performance or other interests of a Director and the shares is when he or she is not in expectations for the Company and business of Woodside. In the event that a possession of price-sensitive information monitoring actual performance; conflict of interest exists, the Director does that is not generally available to the • Appointing and reviewing the not receive the relevant Board papers market. Directors wishing to buy or sell performance of the Managing Director regarding such issues and when the matter Woodside securities in accordance with and senior management; comes before the Board for discussion, the the policy may only do so after first • Ensuring that there are effective health, Director withdraws from the meeting for having advised the Chairman of his or her safety and environmental procedures in the period the matter is considered and intention. In the case of employees, there place; takes no part in the discussions or is a corresponding notification requirement. decision-making-process. • Arranging for effective budgeting and Committees of the Board financial supervision; • Independent Professional Advice During the year, the Board agreed to • Ensuring that appropriate audit With the approval of the Chairman, any arrangements are in place; disband the Acquisitions and Divestments Director can seek external professional Committee and refer that Committee’s • Ensuring there are effective reporting advice, at Woodside’s expense, in carrying business to the full board. The Committee systems that will assure the Board that out their duties. did not meet during the year. proper financial, operational, compliance and risk management controls are in • Risk Management In March 2000, the Company received a place and functioning appropriately; and The Board has as one of its main proposal from the Shell Group of Companies • Reporting to shareholders. objectives, the monitoring and managing in which Shell offered to sell Woodside a of areas where risk to Woodside is portfolio of Shell assets in exchange for Board Workings perceived to be significant. A Woodside shares. In accordance with the • Performance evaluation comprehensive business risk review, led by Company’s conflict of interest guidelines, an external consultant and extending to all the Shell-nominated Directors on the Board During the year, the Board carried out its areas of activity, was completed in March did not participate in the majority of the annual performance evaluation to assess its 2000. The results of the risk review are business conducted at special Board meetings own performance and the effective being deployed throughout the Company. convened to discuss the Shell proposal.

Woodside Petroleum Ltd. 53 2000 Annual Report In order to simplify the process of In particular it: convening meetings of this nature, an ad • reviews and approves accounting policies; hoc committee was formed in August 2000 called the Shell Relationship • reviews the draft half-year and annual Committee. Its members comprise all the consolidated accounts of the Group and the Directors’ Report, prior to non-Shell-nominated Directors. The submission to the Board for approval; purpose of the Committee was to provide a forum in which Directors could discuss • reviews internal audit reports and any matters relating to the ongoing progress on implementation of relationship with Shell, any future proposal recommendations; by Shell, or any matters relating to the • oversees and reports to the Board upon terms or structure of the Alliance the internal control and business risk Agreement with Shell, in the absence of arrangements adopted by management the Shell-nominated Directors. in implementing Board policies; • makes recommendations to the Board In November 2000, Shell Australia on the appointment of the external Investments Limited, a wholly-owned auditor; subsidiary of the Shell Group, made a • approves the annual external audit fee; take-over offer to Woodside shareholders and presented a revised asset transfer • reviews the annual audit plan; proposal to the Company. The Woodside • oversees Group compliance with response to the Shell take-over offer has statutory responsibilities; and been the subject of a number of meetings • when considering the annual and half- of the Shell Relationship Committee and yearly financial reports, reviews the is expressed in the Target’s Statement lodged carrying value of assets, provisions and with the Australian Securities and other accounting issues. Investments Commission on 28 December 2000. The revised asset transfer proposal Members of the Committee are Mr KA was under consideration by the Shell Dean (Chairman), Mr RES Argyle, Mr Relationship Committee at the time of CB Goode (ex-officio), Dr AJ Parsley and writing this report. Dr PJB Rose. The internal and external auditors, the Managing Director, the Chief Currently six standing Board committees Financial Officer and the Group assist the Board in the discharge of its Accounting Manager attend Committee responsibilities. meetings by invitation. The Committee They are: met five times during the year.

• Audit Committee; Corporate Governance Committee • Corporate Governance Committee; The Corporate Governance Committee • Finance Committee; advises on and monitors Woodside’s governance practices and assists the Board • Health, Safety and Environmental to ensure that there is in place an Committee; appropriate process for the direction and • Human Resources Committee; and control of the Group. In particular it: • Nominations Committee. • reviews the way the Board and its committees work and their evaluation Other ad hoc committees are convened processes; from time to time to address major • monitors the management systems and transactions or other matters calling for processes in place for compliance with special attention. laws and regulatory requirements; and

Audit Committee • monitors the management systems in place for addressing significant business The Audit Committee assists the Board to risks and the framework of internal ensure that there are in place within the management controls. Woodside Group appropriate and effective accounting, auditing, internal control, Members of the Committee are Mr RES business risk management, compliance and Argyle (Chairman), Mr JH Akehurst, Mr reporting systems, processes and practices. KA Dean, Mr CB Goode (ex-officio) and Mr RH Searby. The Committee met five times during the year.

54 Woodside Petroleum Ltd. 2000 Annual Report Finance Committee Human Resources Committee In its evaluation of candidates for the The Finance Committee (formerly known The Human Resources Committee Board, the Committee has regard for as the Finance and Risk Management reviews and makes recommendations to normally accepted nomination criteria Committee) reviews and makes the Board on the operation of key human including: recommendations to the Board concerning: resource management policies and processes • integrity and moral reputation; including remuneration packages and policies • specific funding proposals; • appropriate experience and/or applicable to the Managing Director, senior professional qualifications; • borrowing and compliance with executives and Directors.The Committee loan terms; obtains independent advice to ensure • the ability to exercise sound business judgement; • the scope of insurance cover; and remuneration policies are appropriately positioned with respect to the market and • a position of leadership or prominence • financial risks resulting from movements in a specified field; in oil prices, interest rates and exchange monitors their ongoing operation. rates and the extent and methods of any • absence of conflicts of interest or other In particular, the Committee considers: financial hedgings which are undertaken. legal impediments to serving on the • remuneration policy; Board; Recognising that more than one • recruitment policies and performance; • willingness to devote the required committee has “risk management” time; and responsibilities, the Committee was • succession and planning for key positions; • availability to attend Board and renamed during the year to reflect its • performance management and appraisal; Committee meetings. principal area of responsibility. • competence development; In considering overall Board balance, the Members of the Committee are Mr • employment practices including Equal RAG Vines (Chairman), Mr JH Akehurst, Employment Opportunity,Affirmative Committee gives due consideration to the Mr RES Argyle, Ms JR Broadbent, Mr Action and employee negotiations; and value of a diversity of backgrounds, experiences and location of the members. KA Dean and Mr CB Goode (ex-officio). • compliance with statutory obligations. The Chief Financial Officer and the Members of the Committee are Mr CB Financial Risk Manager attend meetings Members of the Committee are Mr RH Goode (Chairman), Mr RES Argyle, Mr by invitation. The Committee met nine Searby (Chairman), Ms JR Broadbent, Mr PJB Duncan, Dr PJB Rose and Mr RAG times during the year. CB Goode (ex-officio), Dr AJ Parsley and Vines.The Committee met three times Mr RAG Vines. The Managing Director Health, Safety and Environmental during the year. and the Management Director with Committee responsibility for human resources attend Directors’ Emoluments The Health, Safety and Environmental Committee meetings by invitation. The Details of the nature and amount of each (HSE) Committee reviews all aspects of Committee met four times during the year. element of the emolument of each health, safety and the environment which Director and the basis upon which those are relevant to Woodside’s activities. In Nominations Committee emoluments are determined, are set out in particular it: The Nominations Committee reviews the Directors’ Statutory Report and Note • monitors and reports to the Board on Board composition and Board succession 37 to the financial statements. occupational health, safety and planning. This includes the finding, environmental management systems evaluating and recommending of and goals, due diligence procedures and candidates for the Board. performance; In carrying out this role, the duties and • ensures that adequate and proper procedures and benchmarks are in responsibilities of the Nominations place to support Woodside’s health, Committee include: safety and environmental policies; and • reviewing annually the size and • oversees incident investigation, audit composition of the Board; reports, compliance and procedures for • considering the mix of desired continuing improvement. competencies of Board members;

Members of the Committee are Dr PJB • evaluating Board candidates and recommending individuals for Board Rose (Chairman), Mr JH Akehurst, Mr appointment/shareholder election; and CB Goode (ex-officio), Dr AJ Parsley and Mr RAG Vines. The HSE Manager • Board member performance appraisal. attends meetings by invitation, as do relevant senior management. The Committee met five times during the year. Members also visited the Company’s North West Shelf operations to gain first-hand experience of the operating environment.

Woodside Petroleum Ltd. 55 2000 Annual Report Left to right:Alan Brooks, Karen Lange,Agu Kantsler, Ernie Kennedy, Chris Haynes, Chris Cronin, John Akehurst, Jeff Schneider, Bob Carroll and Richard Beresford (Inset Keith Spence).

Executive Management Team Bob Carroll Chief Financial Officer Woodside’s Executive Management Team as at 22 March 2001. Bob joined Woodside in February 1981 as Manager of Corporate Accounting in Richard Beresford Melbourne and since October 1985 has Director Sustainable Energy Solutions held a number of senior finance-related positions. Richard joined Woodside in mid-1996 after 12 years with British Gas working in Key Accountability: To ensure an optimum research, operations, planning and business capital structure which includes the development. securing of cost-effective funds for ongoing business needs and new Key Accountability: To build a new opportunities, recommendations on the profitable business for Woodside to meet distribution of capital to shareholders and growing demand from customers for to drive the process for management “green” energy, based on new ways of review of investment proposals. Bob is delivering and converting gas for power also responsible for financial due diligence and other uses, plus selective investments and governance which includes in renewable and other innovative energy monitoring and reporting, taxation, technologies. Age: 45 financial risk management and investor and stakeholder relations.Age: 56 Alan Brooks Chief Legal Officer Chris Cronin Director Corporate Strategy, Alan joined Woodside in 1981 and was Planning and Performance appointed Manager Legal covering all aspects of Woodside’s activities in 1997. Chris joined Woodside in 1981 and was previously the General Manager Human Key Accountability: To manage the legal Resources, Corporate and Public Affairs. aspects of all Woodside activities including the Company Secretariat. Age: 56 Key Accountability: To drive the processes for business strategy and planning, performance leadership, executive development and external affairs activities and to provide shareholder value assurance

56 Woodside Petroleum Ltd. 2000 Annual Report for Woodside through North West Shelf Jeff Schneider Venture/Australian LNG (NWSV/ALNG) Director Eastern and Northern owner representation. Chris is also Australian Gas accountable for the Corporate Development Department including the Jeff joined Woodside in 1979 and was acquisition and divestment process and for previously General Manager Commercial. governance of the human resources Key Accountability: To build a profitable processes which are run from within the new domestic gas business in eastern Shared Services Division. Age: 52. Australia and to monetise gas reserves in Chris Haynes the Timor Sea and Browse Basin. Jeff is CEO North West Shelf Ventures also accountable for the capital efficiency project. Age: 50 Chris was seconded by Shell to Woodside in mid-1999 after 20 years with the Keith Spence Exploration and Production arm of Shell Director Australian Oil International. Keith joined Woodside in 1998 and was Key accountability: To improve the bottom previously General Manager Northern line business performance of the existing Business Unit. Prior to joining Woodside, NWSV assets and create and implement Keith was on secondment from Shell to profitable growth of the total NWSV Woodside and was responsible for NWSV business. Chris is also accountable for exploration. governance of health, safety and Key Accountability: To build a best-in-class environment performance throughout oil exploration and production business in Woodside. Age: 53 Australia through brownfield exploration, Agu Kantsler development and production. Keith is Director New Ventures also accountable for governance of information technology and remains the Agu was seconded by Shell to Woodside process owner for reserves accounting. in mid-1995 following 15 years of Age:47 exploration activity with Shell, mostly on international assignments. In 2000,Agu formally joined Woodside as a permanent employee.

Key Accountability: To build a profitable international exploration and production business and to develop new production opportunities in Australia via successful, low-cost greenfield exploration. Agu is also accountable for providing world-class, sub-surface technical services to all other divisions. Age: 50

Ernie Kennedy Director Shared Services

Ernie joined Woodside in 1991 as Process Superintendent at the onshore gas plant and has held a number of senior operations positions prior to being appointed as Director Shared Services in December 1999.

Key Accountability: To provide market- competitive services to meet internal customer needs. This new division manages cross-company processes and provides services for finance, procurement and logistics, human resources and information technology. Age: 50

Woodside Petroleum Ltd. 57 2000 Annual Report Investor Information A service for shareholders has been introduced to allow website access to Annual General Meeting general information on Woodside and information specific to your own shareholding. The 30th Annual General Meeting will be held at the Sheraton Hotel, 207 Visitors to the site can obtain share price Adelaide Terrace, Perth,Western Australia and related graphical information. A on Wednesday 23 May 2001. Full details discrete area of the website provides of the Meeting have been sent with specific shareholder information. This area this report. can only be accessed by input of your Holder Identification Number (HIN) or American Depository Receipts Security Reference Number (SRN) as The Bank of New York sponsors an well as other personal information to American Depository Receipts (ADR) preserve security. program in the United States of America. ADR holders should deal directly with Additionally, common forms (e.g. change the Bank of New York,New York of address notifications) can be accessed telephone (212) 815 2218, fax (212) 571 on the site. 3050 on all matters relating to their ADRs. The Registry website address is Dividends www.cshare.com.au.

The Company pays an interim dividend Change of Address in September and a final dividend in It is very important that shareholders March of each year. The 2000 final notify the Share Registry immediately, in dividend will be paid on 30 March 2001. writing, if there is any change in their The following options are available registered address. regarding payment of dividends: Lost Holding Statements i. By cheque payable to the shareholder. Lost or stolen cheques should be Shareholders should inform the Share reported immediately to the Share Registry immediately, in writing, so that a Registry, in writing; or replacement statement can be arranged.

ii. By direct deposit to a bank, building Change of Name society or credit union account. Shareholders who change their name Electronic payments are credited on the should notify the Share Registry, in dividend date and confirmed by a writing, and attach a certified copy of a payment advice sent to the shareholder. relevant marriage certificate or deed poll. Request forms for this service are available from the Share Registry at the address Tax File Numbers (TFN) shown on page 58 of this report. Although it is not compulsory for each Shareholder Enquiries shareholder to provide a TFN or exemption details, for those shareholders All enquiries should be directed to the who do not provide the necessary details, Company’s Share Registrar. the Company will be obliged to deduct tax from any unfranked portion of their You should include your Holder dividends at the top marginal rate. TFN Identification Number as it appears on application forms can be obtained from your Holding Statement along with your the Share Registry, any Australian Post current address. Office or the Australian Taxation Office. Computershare Investor Services Pty. Limited Woodside Publications Level 2, Reserve Bank Building The Company’s Annual Report is the 45 St George’s Terrace main source of information for investors Perth,Western Australia, 6000 Australia and is mailed to shareholders in April. Phone: (08) 9323 2000 Shareholders also receive a Half-Yearly Fax: (08) 9323 2033 Report in September. Shareholders who Freecall: 1800 033 025 do not wish to receive the Annual or Half-Yearly Report should advise the Share Registry. Woodside’s financial reports are also available on its website.

58 Woodside Petroleum Ltd. 2000 Annual Report Information about Woodside Bankers Auditors Requests for specific information on the JP Morgan Chase & Co. Ernst & Young,Chartered Accountants. Company can be directed to the Company Secretary at the following address: Share Registry Directors’ Meetings Computershare Investor Services The number of Directors’ meetings Woodside Petroleum Ltd. Pty. Limited (including meetings of committees of No. 1 Adelaide Terrace Level 2, Reserve Bank Building Directors) and number of meetings Perth,Western Australia, 6000. 45 St George’s Terrace attended by each of the Directors of the Telephone: (08) 9348 4000 Perth,Western Australia, 6000 Australia Company during the financial year are Facsimile: (08) 9348 4142 Telephone: (08) 9323 2000 shown below: Woodside Website Fax: (08) 9323 2033 Freecall: 1800 033 025 Information about Woodside is available on the Internet at www.woodside.com.au. Woodside Petroleum Ltd. - Summary of Dividend Payments

Directors’ Statutory Report Payment Date Record Date Rate(c) Franking

Woodside Petroleum Ltd. 6 May 1991 19 April 1991 5(F) Unfranked ACN 004 898 962 4 May 1992 15 April 1992 8(F) Unfranked 6 November 1992 23 October 1992 3(I) Unfranked The Directors of Woodside Petroleum 7 May 1993 23 April 1993 5(F) Unfranked Ltd. (“the Company”) present their report 5 November 1993 23 October 1993 3(I) Unfranked together with the financial accounts of the 6 May 1994 22 April 1994 5(F) Unfranked Company and the consolidated financial accounts of the consolidated entity, being 4 November 1994 21 October 1994 3(I) Unfranked the Company and its controlled entities, 5 May 1995 21 April 1995 6(F) Unfranked for the year ended 31 December 2000 and 3 November 1995 10 October 1995 4(I) Unfranked the auditor’s report thereon. 2 May 1996 18 April 1996 8(F) Unfranked 7 November 1996 23 October 1996 6(I) Unfranked Directors 2 May 1997 17 April 1997 10(F) 7c fully franked The Directors of the Company in office @ 36% & 3c unfranked at any time during the financial year and 7 November 1997 22 October 1997 8(I) Fully franked until the date of this report are: 22 May 1998 6 May 1998 12(F) Fully franked 6 November 1998 21 October 1998 9(I) Fully franked CB Goode (Chairman) 21 May 1999 5 May 1999 14(F) Fully franked JH Akehurst (Managing Director) RES Argyle 30 September 1999 16 September 1999 10(I) Fully franked JR Broadbent 31 March 2000 20 March 2000 16(F) Fully franked KA Dean 22 September 2000 8 September 2000 22(I) Fully franked (includes 10c special dividend) PJB Duncan 30 March 2001 19 March 2001 60(F) Fully franked AJ Parsley (includes 42c special dividend) PJB Rose Final Dividend (F) Interim Dividend (I) RH Searby RAG Vines

Company Secretary Board Audit CorpGov Finance HSE HR Noms SR KA Lange AB AB AB AB AB AB AB AB

CB Goode 20 20 5 4 5 5 9 9 5 4 4 4 3 3 10 10 Corporate Information JH Akehurst 20 20 5 3 5 5 9 9 5 5 4 3 10 10 Woodside Petroleum Ltd. is a company RES Argyle 20 18 5 4 5 5 9 8 3 2 10 9 limited by shares that is incorporated JR Broadbent 20 19 9 9 4 4 10 9 and domiciled in Australia (Victoria). It *KA Dean 20 16 5 5 5 5 9 8 is the ultimate parent entity of the *PJB Duncan 20 15 3 3 Woodside Group. *AJ Parsley 20 15 5 3 5 5 4 4 PJB Rose 20 19 5 5 5 5 3 3 10 9 The registered office of Woodside RH Searby 20 19 5 5 4 4 10 9 Petroleum Ltd. is located at No. 1 RAG Vines 20 19 9 8 5 4 4 4 3 3 10 9 Adelaide Terrace, Perth,Western Australia, Column A Indicates number of meetings held during the period of each Director’s tenure. 6000. Column B Indicates the number of those meetings attended by the Director. * Director unable to participate in a number of meetings due to conflicts of interest. Directors may at times attend meetings of other Board Committees by invitation. These attendances are not included.

Woodside Petroleum Ltd. 59 2000 Annual Report Principal Activities/Subsequent Events environmental performance is provided on The principal activities and operations of pages 42 to 45 of this Annual Report. the Company during the financial year Through its environment policy,Woodside were hydrocarbon exploration, aims to plan and perform so that adverse development and production. Other than effects on the environment are either as previously referred to in this Annual avoided or kept to an acceptable level Report, there were no other significant while meeting all statutory requirements. changes in the nature of the activities of the consolidated entity during the year. Corporate Governance

Number of Employees A statement of the Board’s governance practices in effect during the year is set As at 31 December 2000, the Company out on pages 52 to 55 of this Annual Report. had 2,198 employees (1999: 2,141). Directors’ and Executives’ Emoluments Consolidated Results Non-executive Directors The consolidated operating profit attributable to the Company’s shareholders Fees paid to non-executive Directors of after provision for income tax and the Company are based on advice from abnormal item(s) was A$966.6 million external remuneration consultants. This compared with A$331.3 million in 1999. advice takes into consideration the level of fees paid to Directors by other major Review of Operations Australian corporations, the size and A review of the operations during the complexity of the Company’s operations financial year is set out on pages 2 to and the responsibilities and work 49 and in the financial statements of this requirements of Board members. Annual Report. Particulars of emoluments paid to or for the account of Directors during 2000 are Dividend set out in Table 1 on page 62. Within the The Directors have declared a final limit of A$1,400,000 set as the aggregate dividend out of profits of the Company in remuneration payable to non-executive respect of the year ended 31 December Directors and approved by shareholders at 2000 of 60 cents per ordinary share, fully the May 1999 Annual General Meeting, franked, in addition to the 22 cents per from 1 January 2000 Board fees payable to ordinary share, fully franked, interim non-executive Directors, are determined dividend, paid to shareholders on 22 as follows: September 2000. Of the total 82 cents • For the Chairman,A$229,000 dividend allocated for the year, 52 cents per annum inclusive of all represented special dividends reflecting committee work; profit from the sale of a 10% interest in • For each other non-executive Director: Greater Sunrise and the benefits during the year of better than expected oil prices. i. a fee of A$53,500 per annum; and ii. a fee of A$10,700 per annum for Environmental Compliance each Board committee or the Board Woodside is subject to a range of of the trustee of the Woodside environmental regulations with the most Group Staff Superannuation Fund or, where a non-executive Director is significant being: chairman of a Board committee or • The Western Australian Environmental of the Board of the trustee of the Protection Act, 1986; Woodside Group Staff Superannuation Fund, then A$16,100 per annum. • The Petroleum (Submerged Lands) Act, 1967; and Fees payable to non-executive Directors • The Environmental Protection and are fixed. Non-executive Directors are Biodiversity Conservation Act, 1999. not entitled to incentive reward for annual results or otherwise according to the During 2000,Woodside met all reporting Company’s performance. requirements in relation to the above All non-executive Directors received a environmental legislation.Where required contribution to superannuation equivalent by legislation, all incidents were reported to the superannuation guarantee levy, to the appropriate regulatory bodies. More based on Board and committee fees. detailed information on the Company’s

60 Woodside Petroleum Ltd. 2000 Annual Report In addition, non-executive Directors other • Short-Term Incentive: than officers of Shell Australia Limited are The amount paid is determined by entitled to retirement benefits in annual performance against business accordance with a plan approved by targets for the Company and the shareholders at the Annual General business or service unit for which the Meeting in May 1999. Under the plan, executive is responsible. Targets are set non-executive Directors accrue a for the year and approved by the maximum retirement benefit after 10 years Human Resources Committee and the service on the Board. That maximum quantum of the incentive is then determined and approved by the benefit is equal to three times the Committee on the basis of Director’s average annual emoluments over demonstrated performance against the three years prior to retirement. A pro- those targets at the end of the year. rata benefit is paid for periods of service greater than 3 years but less than 10 years. • Long-Term Incentive: This is delivered through the Woodside Board fees are not paid to executive Employee Share Plan and links the Directors since the responsibilities of executive’s reward directly to the Board membership are considered in growth in the Company share price. determining the remuneration provided as This aspect of the reward program part of their normal employment conditions. focusses the executive on the future performance of the Company over the Chief Executive Officer (Managing Director) next three to five years. and Senior Executives The provision of interest-free loans to purchase shares in the Company is at Woodside has designed its remuneration the discretion of the Board in and benefits policy to be consistent for all accordance with the Woodside permanent staff employees, with the Employee Share Plan rules approved by quantum relating to the size of the job. shareholders in 1997 and is subject to Woodside also sources a number of senior Company performance. Shell staff from its technical adviser, the Shell secondees do not participate in this Group of Companies.The remuneration long-term incentive, but may be and benefits paid to Shell expatriate entitled to participate in the Share Option Plan operated by their parent secondees is based on Shell’s international company, Shell. human resources policies and practices, with incentives relating to Woodside Woodside needs to remain competitive in performance and approved by the Human each of these components of its Resources Committee. remuneration program in order to secure, retain and motivate top quality executives Woodside’s remuneration policy for senior from a global and highly competitive executives, including Shell secondees, is market. In recent years, the emphasis in based on three main components, being executive remuneration, consistent with base salary and benefits, short-term most other large companies, has been incentives and long-term incentives. shifting towards the variable elements of the reward program, with particular focus In determining the compensation payable on short-and long-term incentives related to senior executives, the Human to individual and company performance. Resources Committee takes account of advice from the Company’s human resources specialists and advice received from independent remuneration consultants.

Senior executives’ remuneration is made up of three components: • Base Salary and Benefits: This element reflects the size of the job and the level of skill and experience of the individual and also includes superannuation and other ancillary benefits.

Woodside Petroleum Ltd. 61 2000 Annual Report Directors’ and Executives’ Benefits

Directors’ related party disclosures are set out in Note 39 to the financial statements.

Table 1 shows remuneration details for each Director of the Company. Table 2 shows the remuneration details for the five most highly remunerated officers of the Company.

Table 1. The following table shows remuneration details for each Director of the Company: (A$)

(a) (b) (c) (d) Total Base Board Incentives Benefits & Share Company Salary Fees Allowances Plan Contributions to Superannuation Executive Director

JH Akehurst (MD/CEO) 698,038 - 284,000 522,174 228,825 73,492 1,806,529

Non-Executive Directors CB Goode - 229,000 - 140,005 - 17,175 386,180 RES Argyle - 101,700 - 35,302 - 7,628 144,630 JR Broadbent - 74,900 - - - 5,618 80,518 KA Dean - 91,000 - - - 6,825 97,825 PJB Duncan - 53,500 - - - 4,013 57,513 AJ Parsley - 85,600 - - - 6,420 92,020 PJB Rose - 80,300 - 60,760 - 6,023 147,083 RH Searby - 80,300 - - - 6,023 86,383 RAG Vines - 91,000 - 28,205 - 6,825 126,030

(a) Reflects the payment made in 2000 for the Woodside 1999 calendar-year performance. (b) Reflects the value of allowances and benefits including housing, motor vehicles, health insurance and Directors retiring. (c) Reflects imputed interest of the Share Plan loan. (d) Includes SGC contributions (Woodside Defined Benefit Fund on Contribution Holiday from 1/5/00 to 31/12/00 for JH Akehurst). (e) Board fees for Directors nominated by Shell Australia Limited are paid directly to their employing company, not to the individuals.

Table 2. The following table shows remuneration details for the five most highly remunerated officers of the Company: (A$)

Name/Title (a) (b) (c) (d) (e) Base Pay Performance- Benefits & Share Plan Company Total Based Pay/ Allowances Superannuation Bonuses Contributions Chris Haynes CEO North West Shelf Ventures # (Shell Expatriate) 477,102 352,203 211,574 - 21,087 1,061,966

Agu Kantsler Director New Ventures 233,567 120,000 172,685 47,243 45,629 619,123

Roger Lewis Group Financial Controller 57,675 41,310 465,049 * 35,598 19,033 618,665

Manfred Henze General Manager Onshore Expansion Projects 251,037 77,188 188,259 - 78,850 595,335

Cyril Huijsmans General Manager Supply Operations (Shell Expatriate) 354,749# 68,116 142,684 - - 565,549

(a) # Expatriate Base Administration Salary. (b) Reflects the payment made in 2000 for the Woodside 1999 calendar-year performance. (c) Reflects the value of allowances and benefits including, motor vehicles, health insurance/Parent Company expatriate terms and conditions (housing, home leaving, boarding fees, etc). (*) Includes once-off, ex-gratia redundancy payment. (d) Reflects imputed interest of the Share Plan loan. (e) Woodside Defined Benefit Fund on Contribution Holiday from 1/5/00 to 31/12/00 for Executives.

62 Woodside Petroleum Ltd. 2000 Annual Report Directors’ Shareholding Indemnification and Insurance of Directors and Officers The particulars of shares held by the Directors of the Company in the The Company has agreed to indemnify all Company as at 31 December 2000 are set of the current board members of the out as follows: Company against all liabilities to another person (other than the Company or a Directors’ Benefits related body corporate) that may arise from their position as Directors of the Company During or since the end of the financial and its controlled entities, except where year, no Director of the Company has the liability arises out of conduct involving received, or become entitled to receive, a a lack of good faith.The relevant benefit by reason of a contract made by agreements stipulate that the Company the Company, its controlled entities or a will meet the full amount of any such related body corporate with a Director or liabilities, including costs and expenses. with a firm of which a Director is a member, or with an entity in which a During the financial year, the Company Director is a member, or with an entity in paid a premium under a contract insuring which a Director has a substantial interest Group Officers of the Company and its other than: controlled entities against liability incurred in that capacity. Those Group Officers i. a benefit included in the aggregate amount of remuneration received, or include the Directors of the Company, the due and receivable, by Directors other Company Secretary and other officers of than as reported in the consolidated the Company whose functions include the accounts; management of oil and gas exploration ii. normal benefits as a full-time employee and production activities, financial of the Company or a related management, human resource corporation; or management, marketing and corporate relations of the Company and its related iii. as outlined under the headings bodies corporate. Indemnification and Insurance. Disclosure of the nature of the liability and the amount of the premium is subject 1234to the confidentiality clause under the contract of insurance. The Company has JH Akehurst - 462,379 - 2,300 not provided any insurance for an auditor RES Argyle 2,000 - - 9,400 of the Company or a body corporate JR Broadbent - - 20,000 10,000 related to the auditor.

KA Dean 1,000 - - - Rounding of Amounts to Nearest CB Goode 2,000 - 98,000 - Thousand Dollars PJB Rose 4,000 - - - The amounts contained in this report have RAG Vines - - 7,400 - been rounded off under the option

Note: available to the Company under Class 1. Beneficial, in own name Order 98/0100. 2. Beneficial, in own name via Employee Share Plan 3. Beneficial, private company or trust On behalf of the Board and in accordance 4. Related interest with a resolution of the Board of Directors made on 21 February 2001.

Charles Goode Chairman

J H Akehurst Managing Director Dated at Melbourne 21 February 2001.

Woodside Petroleum Ltd. 63 2000 Annual Report COMPANY HISTORY

2000 Laverda oil field discovered in the Exmouth sub-basin. First letters of intent signed with Japanese LNG customers for the train 4 expansion. Exploration and production interests acquired in Algeria. Equity in the Greater Sunrise gas and condensate fields divested to Osaka Gas. Gaea gas field discovered. Final investment decision for the Echo-Yodel condensate development achieved. Interest acquired in an energy retailing company(Pulse Energy) in Victoria. Unsolicited asset transfer proposal received from Shell and subsequently rejected by Woodside’s independent Directors. Cash takeover offer and revised asset transfer proposal received from Shell in late 2000. Target’s statement recommending rejection of the cash bid issued to shareholders.

1954 Woodside (Lakes Entrance) Oil NL formed to search for oil in Victoria’s Gippsland region.

1963 Exploration permits acquired over 367,000 square kilometres off the WA coast. North West Shelf Venture formed.

1971 Major gas / condensate discoveries at Scott Reef, north of Broome and at North Rankin and Angel, north of Dampier.

1972 Goodwyn gas / condensate field discovered.

1974 Sunrise and Troubadour gas / condensate fields discovered.

1976 Shell and BHP respectively acquired significant interests in Woodside.

1980 Contracts signed with state Energy Commission of WA (SECWA) for 20 year supply of natural gas. Construction of Phase 1 of North West Shelf Project commenced.

1981 Project finance secured for phase 1 of North West Shelf Project in January.

1984 Sale of domestic gas to SECWA commissioned.

1985 Shell and BHP increased their respective interests in Woodside to 40% each. Contracts signed with eight Japanese power and gas utilities for 20 year supply of LNG. Construction of North West Shelf LNG Project commenced.

1989 Wanaea oil field discovered. First LNG shipments delivered to Japanese customers.

1990 BHP sold 75% of its interest in Woodside. Cossack oil field discovered.

1994 BHP sold its remaining interest in Woodside. Shell reduced its shareholding from 40% to 34%. Laminaria oil field discovered. Project finance replaced by corporate facility.

1995 Gas / condensate production commenced from Goodwyn A platform. Oil production commenced from Cossack Pioneer FPSO. Onshore LPG plant commissioned. Corallina oil field and Loxton Shoals gas / condensate field discovered.

1996 Perseus gas field discovered.

1997 Formal approval for the Laminaria and Corallina oil fields’ development. Northern Australia Gas Venture formed and feasibility study into potential Darwin-based LNG project commenced.

1998 Woodside entered into a comprehensive business Alliance arrangement with Shell International. Vincent oil field discovered in the Exmouth sub-basin. The commercial potential of the Legendre oil fields in the Dampier sub-basin confirmed. International exploration interests secured in offshore Mauritania and Cambodia.

1999 Formal approval for the Legendre oil fields’ development. Enfield oil field discovered 10km south-west of the Vincent oil discovery. Fifteen years of Domgas and ten years of LNG production together with 1000th LNG cargo to Japan celebrated. First oil production from the Laminaria and Corallina fields achieved in November. A 14.26% interest acquired in Oil Search Limited and deepwater exploration acreage acquired in the Gulf of Mexico. Insight Communication & Design