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       Sustainable Development Report 2010

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                                                                                                                   RECOGNITION AND

                                                                                                                   ABOUT THIS REPORT

                                                                                                                   ASSURANCE STATEMENT


                                                                                                                   PERFORMANCE DATA

                                                                                                                   OUR NETWORKS AND

                                                                                                                   GRI SUPPLEMENT
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                                               Sustainable Development Report 2010

                                          the decisions we make today...

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Woodside Petroleum Ltd | 2010 sustainable development report

                                                               Further information
                                                               In addition to our printed Sustainable
                                                               Development Report, we provide online
                                                               information, including material issues
                                                               and, where materially relevant, the Global
                                                               Reporting Initiative (GRI) G3 indicators.

                                                               For more information or to provide feedback,
                                                               please contact:
                                                                                                              Copies of the 2010 Sustainable            This report is printed on an environmentally
                                                               Woodside Petroleum Ltd                         Development Report and the                responsible paper manufactured under ISO
                                                               ABN 55 004 898 962                                                                       14001 environmental management standards,
                                                                                                              2010 Annual Report and previous reports   using Elemental Chlorine Free pulps from
                                                                                                              are available on request or from the      sustainable, well managed forests.
                                                               Woodside Plaza
                                                                                                              company’s website
                                                               240 St Georges Terrace
                                                               Perth, Western Australia 6000

                                                               t:   +61 8 9348 4000
                                                               f:   +61 8 9214 2777                                                                     We have partnered with Green Reports TM in an
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                                                               e:                                                         Development Report is not impacting the
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                                                                                      FROM THE CEO                             2
                                                                                      OUR STORY                                4
                                                                                      SUSTAINABILITY IN OUR BUSINESS           6
                                                                                      OUR CONDUCT                             10
                                                                                      OUR STAKEHOLDERS                        12
                                                                                      ECONOMIC                                16
                                                                                      ENVIRONMENT                             22
                                                                                      SOCIAL –
                                                                                        HEALTH, SAFETY AND SECURITY           28
                                                                                        PEOPLE                                34
                                                                                        COMMUNITY                             38
                                                                                      RECOGNITION AND AWARDS                  44
                                                                                      ABOUT THIS REPORT                       46
                                                                                      ASSURANCE STATEMENT                     48
                                                                                      GLOSSARY                                49

                                                                                                                                         Woodside | 2010 Annual Report
                                                                                      PERFORMANCE DATA                        50
                                                                                      OUR NETWORKS AND DISCLOSURE             56

                            ...impact the outcomes for
                               our future.

                                          Children enjoy the Woodside-supported community concert held in Karratha during NAIDOC week.

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                                                               FROM THE
                                                               A MESSAGE FROM DON VOELTE

                                                               During 2010, our people made significant contributions to Woodside’s
                                                               sustainability, shaping our performance across the economic, social
                                                               and environmental dimensions.
Woodside Petroleum Ltd | 2010 sustainable development report

                                                               Solid performance in these areas gives Woodside our licence       I am confident Woodside’s management team will continue
                                                               to operate and enables us to pursue our LNG growth strategy       to provide leadership in sustainability across our business to
                                                               with developments like Pluto expansion, Browse and Sunrise.       achieve high standards of social, economic and environmental
                                                               Our economic contribution was significant in 2010
                                                               as the company achieved a record net profit and paid              The elements of sustainable development are directly linked to
                                                               more than US$1.1 billion in taxes and royalties, thereby          Woodside’s Business Principles, providing a clear path for all
                                                               delivering broader economic benefits across Australia.            of our people to embed sustainability into every aspect of the
                                                                                                                                 business including our planning, performance management and
                                                               Our environmental performance improved in 2010, with              decision making.     See page 6.
                                                               continued reduction of environmental incidents and a
                                                               decrease in total flared gas from our facilities. We have         For the first time, this report includes broad targets for
                                                               also seen ongoing improvements in the proportion of               our economic, social and environmental performance, providing
                                                               waste being recycled rather than being sent to landfill.          clear goals for our workforce. We will report on our performance
                                                               Our waste management approach will be extended to                 against these targets in our 2011 Sustainable Development Report.
                                                               the Pluto LNG Plant when it comes into production.
                                                                                                                                 As in previous years, we have invited external feedback on our
                                                               We dedicated almost A$5 million to our social                     business from independent experts in the economic, social and
                                                               investment program and joined forces with another iconic          environmental dimensions through our Sustainable Development
                                                               Australian organisation, Surf Life Saving, as its national sun    Advisory Panel. We have used this feedback to ensure our
                                                               protection partner.                                               sustainable development reporting is focused on the issues that
                                                                                                                                 really matter.   See page 46.
                                                               Our staff numbers grew by 13.4% during 2010 in response
                                                               to increasing business activity whilst voluntary staff turnover   Woodside’s top five material issues for 2010 are outlined below:
                                                               remained steady. Our Indigenous employee numbers
                                                               increased by 47% and the number of Woodside employees,
                                                                                                                                 Opportunities, impacts and site selection of the
                                                               both male and female, who are accessing flexible working
                                                                                                                                 Browse LNG Development
                                                               arrangements also increased. We are working hard to               The Browse LNG Development progressed significantly during
                                                               ensure Woodside remains a great place to work.                    2010. The Browse Joint Venture selected the Western Australian
                                                                                                                                 Government’s Browse LNG Precinct as the preferred location for
                                                               I am disappointed that we did not meet our expectations           the onshore facilities. Woodside remains committed to delivering
                                                               on safety performance. We will continue to implement              a world-class project, which provides significant opportunities
                                                               leadership, behavioural and system programs to                    for local participation and social benefit.  See page 14.
                                                               improve performance in this area in 2011.

                                                               In October 2010 I announced that I would be leaving Woodside
                                                                                                                                 Our regional development contributions
                                                               in 2011. In the seven years I have been CEO at Woodside, the      Regional development was a focus in 2010 for industry and
                                                               company has taken great strides in its sustainability journey,    government in the communities where we operate. Since the
                                                               in terms of commitment, performance and reporting.                North West Shelf Project commenced operations more than
                                                                                                                                 25 years ago, we have supported the sustainable
                                                               There is no question that I am sad about leaving such             development of Karratha and surrounding communities.
                                                               a remarkable Australian oil and gas company. I have               With the Browse LNG Development gaining momentum,
                                                               found my time at Woodside immensely rewarding and                 we look forward to providing the same benefits to the
                                                               enjoyable. I believe I have identified the best time to allow     Kimberley region and its people.    See page 20.
                                                               a new CEO to take ownership of our growth projects.

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           Climate change                              Delivery on our Reconciliation
           Climate change continued to be on the       Action Plan commitments
           agenda for Woodside in 2010, both           We were delighted with our
           in terms of our own environmental           achievements in 2010 against our
           performance and policy development          inaugural Reconciliation Action Plan.
           by the Australian Government, with          The plan is a commitment of 28 actions
           the prospect of a national carbon           across the dimensions of respect,

                                                                                                                                          Woodside | from the ceo
           price. We believe that natural gas has      relationships and opportunities,
           an important role to play in helping        with the aim of helping close the life
           some of the fastest growing countries       expectancy gap between Indigenous
           transition to a lower carbon future.        and other Australians.     See page 42.
           Australian LNG has a pivotal role in
           that transition.    See page 26.
                                                       We believe this report reflects our
                                                       business activities, management
           Implications of the Montara and             approach and performance.
           Macondo oil spills                          We encourage you to provide
           Last year we reported on the implications   feedback through our website.
           of the 2009 Montara oil spill. As we
           anticipated, the entire industry has
           come under increased scrutiny from
           government regulators and other
           stakeholders on its performance. In
           2010, this was heightened by the tragic
           Macondo oil spill in the Gulf of Mexico,
           which resulted in 11 people losing
           their lives and lasting environmental
           consequences. Woodside continues
           to carefully analyse our approach to
           the prevention of, preparedness for,
           response to and recovery from incidents
           such as these.       See page 32.

                    OUR FOCUS Woodside has a proud Australian
                    heritage and truly dynamic future as we seek to
                    maintain our position as one of the world’s leading
                    producers of LNG. We have the governance                                                           DON VOELTE
                    structures, strategies and commitment to identify                                       Chief Executive Officer and
                    and manage sustainability risks and opportunities.                                              Managing Director

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                                                                 OUR STORY

                                                                 Our Profile                                    Key themes for Woodside within our                 Technical Functions
                                                                 Woodside is an independent,                    foundation business are to maximise                ƒ Exploration;
                                                                 publicly listed Australian oil and             value from existing assets, deliver on
                                                                                                                our production promise and continue to             ƒ Development;
                                                                 gas company playing a key role in
                                                                 supplying energy to our region.                maintain our licence to operate. In 2011           ƒ Projects; and
                                                                                                                our foundation business will grow with
                                                                 We have a large natural gas resource           the delivery of the Pluto LNG Project.             ƒ Production.
                                                                 base and are one of the world’s                                                                   Corporate Functions
                                                                 leading producers of LNG, helping to           LNG growth opportunities beyond
                                                                                                                                                                   ƒ Health, safety and security;
Woodside Petroleum Ltd | 2010 sustainable development report

                                                                 meet the demand for cleaner energy             2011 includes expansion of the Pluto
                                                                 from Japan, China, Korea and other             LNG Project near Karratha, as well                 ƒ Finance – includes enterprise
                                                                 countries in the Asia-Pacific region.          as development of the Browse gas                     risk, group financial control, tax,
                                                                                                                fields off the Kimberley coast and the               treasury, information technology
                                                                 Woodside is supported by 3,650 staff.          Sunrise gas fields in the Timor Sea.                 and investor relations;
                                                                                                                Successful execution of these                      ƒ Commercial and legal – includes
                                                                 Our Business Strategy                          developments will continue to                        legal, company secretariat, internal
                                                                 Our business strategy is focused on            position Woodside as a leading                       audit, commercial, marketing,
                                                                 delivering an LNG growth plan. The plan        global LNG producer.                                 supply chain and logistics;
                                                                 consists of three elements: enhancing
                                                                 our foundation business, delivering            In the past, international exploration was         ƒ Corporate – includes human
                                                                 growth in shareholder value through our        seen as a means to maintain alternative              resources, community relations,
                                                                 LNG development opportunities and              future growth options. However, this                 Indigenous affairs, government
                                                                 exploring selective future growth options.     growth option is limited in the short term           affairs, corporate communications,
                                                                                                                due to intense competition for quality               greenhouse, environment and
                                                                 Our foundation business comprises the          opportunities and the capital required               sustainable development;
                                                                 North West Shelf Project (NWS), which          to support the LNG growth strategy.                ƒ Strategic planning; and
                                                                 we have operated for more than 25 years,
                                                                 and the Greater Enfield Area and the           As a result, our international exploration         ƒ Administration.
                                                                 Timor Sea assets, supplemented by other        portfolio is limited to acreage
                                                                 Australian and US producing assets.            primarily in the Gulf of Mexico.

                                                                 The NWS produces LNG for international         Our Operating Structure
                                                                 customers, pipeline natural gas for
                                                                 Western Australian industry and                Woodside has six business units,
                                                                 households, as well as oil, condensate         which are responsible for our business
                                                                 and liquefied petroleum gas for export         strategy. These business units
                                                                 and domestic use. The Greater Enfield          reflect geographic areas and major
                                                                 Area and Timor Sea assets produce              projects. Our business units are:
                                                                 oil for international and domestic use.        ƒ International;
                                                                 Our Gulf of Mexico assets produce
                                                                 pipeline gas, oil and condensate.              ƒ Australia;
                                                                                                                ƒ North West Shelf;
                                                                                                                ƒ Pluto;
                                                                                                                ƒ Browse; and
                                                                                           tho                  ƒ Sunrise.
                                                                                              LNG growth        The business units are supported

                                                                                                                by functions, which are distinct
                                Value >

                                                                                                                resource groups that undertake
                                                                Foundation business                             the work to deliver the strategy.

                                                               Time >

                                                                                                                                Senior Health and Safety Adviser
                                                                                                                               working on our Pluto LNG Project.

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                         12 10
                           3 1
                    11 2     4
                       16                              	 Our producing assets (operated)                         	 Our projects
                  6       11   Karratha            1   Angel platform                   NWS                    11 Pluto LNG Project including
            9 7                                    2   Goodwyn A platform               NWS                       potential Pluto expansions            Pluto
                                                   3   North Rankin A platform          NWS                    12 North Rankin Redevelopment            NWS
                                                   4   Cossack Pioneer FPSO             NWS                    13 NWS Oil Redevelopment Project         NWS
                                                   5   Karratha gas plant               NWS
                                                                                                                 	 Our developments
                                                   6   Nganhurra FPSO                   Enfield
                                                   7   Maersk Ngujima-Yin FPSO          Vincent                14 Browse                                Browse                            5
                                                   8   Northern Endeavour FPSO          Laminaria-Corallina    15 Sunrise                               Sunrise
                                                                                                               16 Greater Western Flank                 NWS
                                                       	 Our producing assets (non-operated)

                                                                                                                                                                                   Woodside | 2010 Annual Report
                                                                                                                                                                                   Woodside | our story
                                                                                                                   Our communities
                                                   9 Stybarrow Venture MV16 FPSO        Stybarrow
                                                   10 MODEC Venture II FPSO             Mutineer-Exeter


                     Production, projects and developments

                     Field                                                                 Products                               Woodside-                % of Woodside
                                                                                                                                  operated                total production
                     Australian production
                     North West Shelf Gas                                LNG, pipeline gas, condensate, LPG                            Yes                         65
                     North West Shelf Oil                                                 Oil                                          Yes                          6
                     Enfield                                                              Oil                                          Yes                          8
                     Laminaria-Corallina                                                  Oil                                          Yes                          3
                     Vincent                                                              Oil                                          Yes                          7
                     Stybarrow                                                            Oil                                          No                           3
                     Mutineer-Exeter                                                      Oil                                          No                         <1
                     Otway*                                                Pipeline gas, condensate, LPG                               Yes                        >1
                     International production
                     Gulf of Mexico                                           Pipeline gas, condensate, oil                   4 out of 13 fields                   3
                          Neptune                                                    Pipeline gas, oil                               No
                          Power Play                                                 Pipeline gas, oil                               No
                     Ohanet (Algeria)                                               Gas, condensate                                  No                            3

                     Australian projects
                     Pluto                                                            LNG, condensate                                  Yes                         -
                     North Rankin Redevelopment                                       LNG, condensate                                  Yes                         -
                     North West Shelf Oil Redevelopment                                     Oil                                        Yes                         -
                     Australian developments
                     Browse                                                           LNG, condensate                                  Yes                         -
                     Sunrise                                                          LNG, condensate                                  Yes                         -
                     * The sale of the Otway Gas Project was completed in March 2010 and operatorship was transitioned in the second quarter of 2010.

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                                                               IN OUR BUSINESS

                                                               Sustainability is about delivering shareholder wealth in an
                                                               economically, socially and environmentally responsible way.
                                                               Our Approach                                       Policy describes our Business Principles,     Our Business Principles
                                                               For Woodside, sustainability is about              which are categorised into three areas        We have ten Business Principles that
            6                                                                                                     of sustainable development - economic
                                                               delivering shareholder wealth through                                                            guide our business planning, performance
                                                               operating our existing business and                performance, environmental excellence         and decision making. They are also
Woodside Petroleum Ltd | 2010 sustainable development report

                                                               developing new business opportunities              and social contribution.                      central to our governance, policies
                                                               in an economically, socially and                                                                 and standards, providing a common
                                                                                                                  The Board believes that operating in
                                                               environmentally responsible way.                                                                 approach to how we operate.
                                                                                                                  accordance with the Business Principles
                                                                                                                  is essential for sustainable long-term        Each of these Business Principles
                                                               Our Commitment                                     performance and value creation.               has an accompanying description to
                                                               Our sustainability approach underpins the                                                        ensure they are well understood by
                                                               Woodside Management System (WMS),                  All Woodside employees and contractors
                                                                                                                                                                Woodside’s staff and contractors.
                                                               which is our structured governance                 engaged under Woodside’s operational
                                                               framework. The WMS comprises two                   control are responsible for understanding     Our commitment to the governance
                                                               elements - Direction and Expectations.             and complying with Woodside’s policies        framework is reinforced through a
                                                                                                                  as part of their normal business practice.    range of training activities, including
                                                               Direction                                                                                        comprehensive induction processes
                                                                                                                  We also promote these policies to our
                                                               Woodside’s Direction is developed by                                                             and annual Code of Conduct training.
                                                                                                                  joint venture participants. All contractors
                                                               our executive management team and is               engaged by Woodside are required to
                                                               approved by Woodside’s governing body,             observe and comply with all applicable
                                                               the Board of Directors (the Board). Our            laws, regulations and standards.
                                                               mission, vision, values and policies define
                                                               our Direction and what we are aiming to                Woodside policies are published on our
                                                               achieve. Our Sustainable Development                   website at

                                                                                                                   Woodside Management System


                                                                                                                                          Development Policy



                                                                                                       Values                                                        PERFORMANCE





                                                                                           Operating Standards

                                                                                                                                                          ENVIRONMENTAL                SOCIAL

                                                                                       Processes and Procedures                                             EXCELLENCE              CONTRIBUTION

                                                                                           Guidelines and Tools

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            Mission                               Vision                                             Values
            Woodside’s mission is to create       Woodside’s vision is to be a world-class           ƒ Strong and Sustainable Performance;
            and deliver outstanding, sustained    LNG leader. To accomplish this we need to          ƒ Care and Respect;
            growth in shareholder wealth by       be the company of choice through speed,
                                                                                                     ƒ Integrity and Trust;
            providing energy for the future.      execution skills, commercial acumen, cost
                                                  focus and technical capability. Through our        ƒ Initiative and Accountability;
                                                  people and our values we will satisfy our          ƒ Creativity and Enterprise; and
                                                  shareholders and deliver a sustainable future.     ƒ Working Together.

           Business Principle                    Description

                                                 We create economic benefits and deliver both short and long-term financial returns to
                     We deliver economic
                                                 our shareholders and the communities and countries where we operate. We look for and
                                                 mitigate the risks to our business.

                                                 As a minimum, we comply with all applicable laws, regulations and standards.

                                                                                                                                                       Woodside | sustainability in our business
                                                 We do not offer, pay or accept bribes, nor participate in other corrupt business practices or

                                                 make donations to political parties or their representatives.
                     We are open and
                     accountable                 We operate with integrity, honesty, reliability and fairness. We are outward looking and
                                                 aware of our position and our competitors, and are open to change. We value our intrinsic
                                                 skills and are willing to improve.

                                                 We fully, consistently and in a timely manner, disclose material financial, social and
                                                 environmental information about the company and its performance.

                                                 We invest in the future by driving continuous improvement and always looking for new

                                                 practices and technologies.
                     We invest in innovation
                     and enterprise
                                                 We create a learning and productive work environment and provide opportunities for our
                                                 people to increase their knowledge and education.

                                                 The safety and health of our people comes first in our decisions. We believe that all
                                                 occupational injuries and illnesses are preventable.

             4       We respect people
                                                 We respect the rights of all people and value their diversity and differences. We respect
                                                 freedom of association and do not practise discrimination, or use forced or child labour.

                                                 We invest in the future by finding ways for people to develop to their full potential.

             5       We involve stakeholders
                                                 We build long-lasting relationships based on trust by working together with our stakeholders.
                                                 We earn the trust of our stakeholders by listening and doing what we say we are going to do.

                     We contribute to
                     the sustainability of       We help build strong and thriving communities which succeed beyond our efforts.
                     our communities

             7       We value culture
                     and heritage
                                                 We value the culture and heritage of the environment and host countries and communities
                                                 where we operate and help maintain these by minimising our impact.

             8       We supply energy into
                     the future
                                                 Through supply of our product we meet the growing energy demand and contribute to the
                                                 global transition to a lower carbon future.

             9       We use resources
                                                 We design and operate our plants using resources wisely to make our product.

            10       We minimise our
                     ecological footprint
                                                 We are committed to minimising our environmental impacts through our design and
                                                 operations. We value and seek to conserve biodiversity and ecological integrity.

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                                                               Sustainability Committee                    ƒ   Climate change response, including        The review resulted in the adoption of
                                                               In 2007 the Board established                   initiatives to reduce greenhouse          ten management standards, covering:
                                                               a Sustainability Committee (the                 emissions, and review of Australian       ƒ Leadership, commitment
                                                               Committee), which reviews and delivers          government policy development;              and accountability;
                                                               recommendations to the Board on the                                                       ƒ People management;
                                                                                                           ƒ   Social investment themes
                                                               company’s policy and performance
                                                                                                               and planned expenditure;                  ƒ Risk management;
                                                               in relation to health, safety, technical
                                                               integrity, the environment, Indigenous                                                    ƒ Health and safety;
                                                                                                           ƒ   Delivery against the Reconciliation
                                                               affairs and community relations.                Action Plan commitments; and              ƒ Integrity management;
                                                                                                                                                         ƒ Environment;
                                                               The members of the Committee are            ƒ   Approval of the annual Sustainable
                                                               the following non-executive Directors:                                                    ƒ Commercial contracting;
                                                                                                               Development Report.
                                                               ƒ David McEvoy (Committee Chairman);                                                      ƒ Information management;
                                                                                                           The Committee will meet six times             ƒ Security and emergency
                                                               ƒ Melinda Cilento;
                                                                                                           in 2011.                                        management; and
                                                               ƒ Erich Fraunschiel;
                                                                                                               Further information is available on our   ƒ Management review, audit
            8                                                  ƒ Andrew Jamieson; and
                                                                                                               website                and improvement.
                                                               ƒ Din Megat.
                                                                                                                                                         In 2010, we applied 20 operating
Woodside Petroleum Ltd | 2010 sustainable development report

                                                               Michael Chaney (Chairman of the             Our Strategy                                  standards across the business,
                                                               Board) and Don Voelte (Chief Executive      Woodside’s second WMS                         including assurance, emergency
                                                               Officer and Managing Director) also         element, Expectations, ensures                management, business continuity
                                                               attend Committee meetings. All other        that our sustainability approach is           management, event reporting and
                                                               Board members have a standing               understood and put into practice              investigation, external communication,
                                                               invitation to attend these meetings.        in our day-to-day operations.                 social investment, external stakeholder
                                                                                                                                                         engagement, integrity management,
                                                               In 2010, the Committee met four             Expectations                                  project execution, security
                                                               times to review and discuss key
                                                                                                           Expectations are the minimum                  management, commercial contracting
                                                               sustainability issues including:
                                                                                                           performance requirements set to help us       and transactional procurement.
                                                               ƒ    Health and safety performance,         achieve our Direction. The Expectations
                                                                    including challenges to                are defined in management and operating       A further 44 operating standards are
                                                                    achieving results comparable           standards and are supported by our            expected to be applied in 2011.
                                                                    with 2009 and progress in              processes, procedures and guidelines.
                                                                    improving contractor safety;
                                                                                                           In 2009, the WMS was reviewed to
                                                               ƒ    Integrity performance and the          simplify the system and improve clarity
                                                                    implementation of new tools            about accountabilities and expectations of
                                                                    and reporting systems;                 our managers, employees and contractors
                                                                                                           in delivering our mission and vision.
                                                               ƒ    Environmental performance and
                                                                    consideration of implications from
                                                                    the Montara and Macondo oil spills;

                                                                    Our Sustainability Committee: From left Erich Fraunschiel, Melinda Cilento, David McEvoy, Andrew Jamieson and Din Megat.

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           Managing Our Risks                             Assurance                                     ƒ External independent assurance of
           Risk management, which is one of our           Compliance with our governance                  our social investment expenditure by
           management standards, is a key element         framework, including the Business               the London Benchmarking Group;
           of good corporate governance. Our risk         Principles, is assured in a number            ƒ Management of concerns raised
           management framework, aligned to the           of ways, for example:                           and investigated under our
           international standard ISO 31000, enables      ƒ Code of Conduct certification – It is         Whistleblower Policy; and
           effective identification, assessment,            a condition of employment for staff
           monitoring and reporting of material                                                         ƒ Employee survey – last conducted in
                                                            to undertake annual certification
           business risks throughout Woodside.                                                            2008 and next scheduled for 2011.
                                                            to the Code of Conduct;
           Ensuring we have a robust risk                 ƒ Internal audits – Woodside has an
           management framework enables us to               internal audit program to ensure that
           adequately plan for and address risks as         the design and operation of the risk
           they arise. This approach underpins our          management and internal control
           contribution to sustainable development          system is effective. A risk-based
           by managing risks across economic,               audit approach is used to ensure
           social and environmental aspects of              that the higher risk activities in each
           our business, allowing us to grow                business unit are targeted by the
           and deliver energy for the future.               audit program. In 2010, 48 audits and                                                              9
                                                            reviews were conducted across 18
           The risk management process ensures              areas of our business in 11 locations;

                                                                                                                                                      Woodside | sustainability in our
                                                                                                                                                      Woodside | 2010 Annual Reportbusiness
           all business and operational risks are
           evaluated for potential exposures across       ƒ External audits – annual independent
           key focus areas – including health               verification of Woodside’s reserves,
           and safety, financial, environmental,            remuneration and financial reporting;
           legal/compliance, social and cultural,         ƒ External independent assurance by
           reputational and security. This process          Ernst & Young over a selection of
           also ensures senior management and               statements, claims and indicators
           the Board have a clear line of sight to          within the Sustainable Development
           Woodside’s corporate risk profile and            Report      see page 48;
           meaningful assurance that those risks
           are being effectively controlled.

           The Woodside Donaldson LNG transport vessel.

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                                                               We recognise that our many and diverse stakeholders expect
                                                               Woodside to operate to the highest standards of corporate
                                                               conduct and governance.
            10                                                 Our Approach                                   Employees and contractors who are              Responding to stakeholders
                                                               Woodside is committed to operating             concerned that there may be a breach           Activities undertaken across our
                                                                                                              of laws, regulations or the Code,
Woodside Petroleum Ltd | 2010 sustainable development report

                                                               in an ethical and responsible manner.                                                         product development life cycle
                                                                                                              including safety-related issues, can raise     have the potential to directly affect
                                                               Our Code of Conduct (the Code) is a            concerns through an independent and            stakeholders positively or adversely.
                                                               key component of who we are, what              confidential Whistleblower helpline.
                                                               we do and how we behave. It sets out                                                          These activities also attract the
                                                               the principles, practices and standards        All calls are initially handled by an          interest of other stakeholders who
                                                               of personal and corporate behaviour            independent organisation before being          are not directly impacted, but have
                                                               that Woodside expects in daily business        passed to a senior Woodside compliance         an interest in the potential impacts on
                                                               activities.                                    manager, who will arrange a response           the environment and communities
                                                                                                              and, if appropriate, an investigation.         in which we operate. We also have
                                                               Key elements of the Code are:                                                                 stakeholders who have a regulatory
                                                                                                              In 2010 Woodside did not receive
                                                               ƒ Confidentiality;                                                                            role with respect to our activities.
                                                                                                              any calls through our Whistleblower
                                                               ƒ Privacy;                                     helpline. Woodside’s internal                  We actively seek to understand and
                                                               ƒ Employment practices;                        processes investigated and dealt               respond to stakeholder interests or
                                                                                                              with 33 alleged cases of improper              concerns through a process of impact
                                                               ƒ Use of company assets and resources;
                                                                                                              conduct that came to our attention             assessment and stakeholder engagement
                                                               ƒ Conflicts of interest and outside            other than through the Whistleblower           in all of our business activities.
                                                                 interests;                                   helpline. These investigations resulted
                                                               ƒ Corporate opportunities for personal gain;   in one verbal warning, 27 written              Given the regulatory environment in
                                                               ƒ Giving and accepting business                warnings, and the termination of               which we operate, we are required
                                                                 courtesies;                                  four contracts of employment.                  to undertake these assessments and
                                                                                                                                                             develop management plans in order
                                                               ƒ Compliance with laws and regulations;
                                                                                                              Our Strategy                                   to comply with government approvals
                                                               ƒ Fair dealing with external parties;                                                         for proposed business activities.
                                                                                                              We recognise that our business activities
                                                               ƒ Reporting of unlawful or unethical           have potential impacts and benefits
                                                                 behaviour;                                                                                  Human rights approach
                                                                                                              across five discrete areas in the product
                                                               ƒ Responsibilities to the community;           development lifecycle – exploring for          At Woodside we seek to uphold
                                                                                                              hydrocarbons, assessing and designing          basic human rights and reflect this
                                                               ƒ Responsibilities to shareholders and the
                                                                                                              production facilities, construction of those   commitment through our values,
                                                                 financial community generally; and
                                                                                                              facilities, processing of hydrocarbons,        Business Principles, Code and policies.
                                                               ƒ Responsibilities to clients, customers
                                                                                                              and supply of products to customers.
                                                                 and consumers.                                                                              Our approach is also consistent with
                                                                                                                                                             that of the Australian Government and
                                                                                                              We seek at all times across this
                                                               Our Commitment                                 product development life cycle to:
                                                                                                                                                             we comply with Australian legislation
                                                               Woodside managers and the Board                                                               enacted to uphold human rights treaties
                                                                                                              ƒ   Identify stakeholders and respond          and declarations, such as the Universal
                                                               must also take all reasonable steps to             to issues and concerns that may            Declaration of Human Rights.
                                                               ensure that employees, contractors,                arise as a result of our activities;
                                                               consultants and agents under our                                                              Internationally, Woodside complies
                                                               supervision are aware of the Code and          ƒ   Undertake business activities              with the laws of the countries
                                                               foster an environment that encourages              consistent with our governance             where it operates and relies on its
                                                               ethical behaviour and compliance.                  framework;                                 values, Business Principles, Code
                                                                                                                                                             and policies to ensure behavioural
                                                               Failure to comply with the Code is a           ƒ   Develop products in a responsible way;     standards are met by employees
                                                               serious breach of Woodside’s policy and
                                                                                                                                                             and contractors under our control.
                                                               will be investigated. The Code provides        ƒ   Maintain high standards of product
                                                               that breaches result in disciplinary action,       quality and supply; and
                                                               ranging from a verbal warning through to
                                                               termination of employment. All breaches        ƒ   Provide revenue transparency.
                                                               are required to be recorded and reported.

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             The Code of Conduct applies to all Woodside employees.

           Responsible product development                 governance in resource-rich countries             communities, or contractors and
           In developing our products, we                  through the verification and full publication     suppliers under our supervision.
           recognise the importance of supply chain        of company payments and government
                                                           revenues from oil, gas and mining.                Responsible product development
           compliance with our Code and policies.
                                                                                                             Internal and external audits of
           Contracted suppliers are subject to a           Woodside has an interest in Timor-                supply chain compliance are
           rigorous pre-qualification process, which       Leste through operatorship of the                 carried out on an ad hoc basis. Our
           includes site visits and review of suppliers’   Sunrise LNG Development. Timor-                   internal audit team completed four

           policies and procedures, where relevant.        Leste is an EITI-compliant country.               major contract audits in 2010.

                                                                                                                                                          Woodside | our conduct
           In Australia, contractors are required          Under the EITI Woodside reports its               We also continued a program initiated
           to comply with awards, workplace                petroleum tax and fee payments. Given             in 2009 to improve commercial
           agreements and relevant labour                  that the Sunrise LNG Development                  contracting, with a focus on schedule
           legislation. To ensure consistency with         has not started production, no details            delivery, reporting, and delivery of key
           these requirements, Woodside audits             are provided on revenue payments.                 performance indicators, including health,
           the employee relations management                                                                 safety and environmental measures.
           plans submitted by its contractors.             2010 Performance
                                                           Responding to stakeholders
           In addition to compliance with these local
           laws, Woodside requires suppliers to            In 2010 we held a number of meetings
           have a health, safety and environmental         and forums to support consultation
           (HSE) management system and                     for new projects, engagement
           to develop contract-specific HSE                activities for existing operations
           management plans, where relevant.               and to facilitate our advocacy
           These plans address all aspects of              role. Examples of our stakeholder
           safety and the environment, including           responses are provided overleaf.
           occupational health and safety, working
                                                           We also developed and applied new
           hours, overtime and environmental
                                                           operating standards that embrace
           standards for products and services.
                                                           environmental and social impact
           Woodside initiates actions to ensure            assessments. Details on these standards
           compliance by the supplier. Where               are provided throughout this report.
           evidence of non-compliance with
                                                           Human rights approach
           any identified standard is discovered,
           Woodside will not approve the supplier.         In 2010 we initiated a number of activities
                                                           to review our approach to human rights
           Wherever possible and appropriate,              against peer companies and relevant
           all new or replacement contracts                treaties and declarations, having regard
           with contractors, consultants                   to our predominantly Australian operating
           and agents impose appropriate                   context and the geographical extent
           obligations on the contracting                  of our supply chain. The review will
           party to comply with our Code.                  extend into 2011 and will also embrace
                                                           assurance and internal reporting systems.
           Revenue transparency
           Woodside has supported the Extractive           For the reporting period Woodside is
           Industries Transparency Initiative (EITI)       not aware of any incidents of human
           since 2005. The EITI aims to improve            rights violations with respect to people,

                                                                                                                                        ROB COLE
                     OUR FOCUS Everyone who works for or with                                                              Executive Vice President
                     Woodside, including members of the Board of Directors                                             Commercial & General Counsel
                     and Woodside’s officers and employees, must comply
                     with our Code of Conduct.

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       We seek to respond to the interests and concerns of our diverse range of
       stakeholders in an honest, timely and transparent manner. Examples of
       these interests and concerns, and our responses, include:
       Stakeholder         Key interests and concerns               Response
       Business            Financial performance                    Safe, reliable and efficient operations
       participants       Risk mitigation and management            Internal and external audits and assurance
       Customers          Reliability of supply                     Annual delivery plans for LNG supply
                          Product quality, cost and delivery        Quality control of our hydrocarbon products
       Employees and      Health and safety                         Golden Safety Rules
       contractors        Working conditions                        Flexible work practices
                          Career development opportunities          Personal development plans for employees
                          Access to social infrastructure           Karratha Infrastructure Strategy
       Governments        Legislative and regulatory framework      CEO participation in the Australian Government’s
       (including         Policy development                        Business Roundtable on Climate Change
       regulators)        Security of supply                        Long-term contracts with domestic gas and LNG customers
                          Economic, social and                      Compliance with local laws and social investment programs
                          environmental performance
                          Distribution of economic benefits         Payment of taxes to governments where we operate
       Industry (adjacent Disruption to business                    Impact assessment and stakeholder advice
       to our operations) Business opportunities                    Promotion of supply opportunities for LNG projects
       Industry           A range of issues relating to             Participation in local, national and internal forums
       associations       oil and gas development
       Local and          Environmental and social impacts,         Environmental and social impact assessments
       Indigenous         including cost of living, access to
       communities        community services and amenities
                          Culture and heritage impacts              Development of heritage management plans
                          Contribution to sustainable communities   Social investments in the communities where we operate
                          Investment in social infrastructure       Development of a Karratha infrastructure program
                                                                    targeting childcare, health, education and recreation
                           Land access                              Social impact assessments and stakeholder engagement
                           Employment and business opportunities    Graduate, trainee and apprentice programs
                                                                    Indigenous enterprise development
       Non-government      Social and environmental performance     Opportunity for participation in Woodside’s
       organisations                                                Sustainable Development Advisory Panel
                         Efficient use of resources                 Energy efficiency assessments of our facilities
                         Mitigation and management of               Compliance with policies and standards
                         financial and non-financial risks
                         Revenue transparency                       Supporter of the Extractive Industries Transparency Initiative
       Shareholders and Delivery of financial returns               Annual dividend
       finance providers                                            Total shareholder return
                         Mitigation and management of               Effective risk management framework
                         financial and non-financial risks
                         Governance                                 Compliance with policies and standards
       Suppliers         Supply opportunities                       Promotion of supply opportunities for LNG projects
       Trade unions      Workers’ rights and interests              Compliance with Australian labour legislation

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           Our stakeholder engagement activities in 2010 were focused on a range of
           activities related to our existing operations, projects under construction and
           developments. Highlights of these engagements included:
            Location              Engagements in 2010                                  Topics and key areas for discussion

            Local, State,         Regular meetings to provide updates on                Regional development and Karratha
            Australian and        operations, projects and developments                 infrastructure, tax reform, climate change,
            international                                                               domestic gas supply, LNG development, LNG
            governments                                                                 processing hub in the Kimberley and Pilbara
            Karratha,             Three Woodside Community Liaison Group meetings North West Shelf Project (NWS) and Pluto operations
            Western Australia                                                           updates, social investment and community impacts       13
                                  Regular meetings with Indigenous representatives,     Heritage management and Indigenous
                                  including quarterly meetings with Traditional Owners  issues including Pluto

                                                                                                                                               Woodside | our stakeholders
                                  Karratha and Districts Chamber of Commerce and        Update on community activity and social investments
                                  Industry forum
                                  Local stakeholders                                    Impacts arising from Woodside-operated
                                                                                        facilities in the Shire of Roebourne including
                                                                                        accommodation and social infrastructure
                                  Participation in the Lions FeNaClNG Festival          NWS and Pluto operations updates, social
                                                                                        investment and community impacts
            Broome,               Participation in the Western Australian Department    Environmental and social impacts arising from LNG
            Western Australia     of State Development’s Community Open Day             development at James Price Point
                                  and Social Impact Assessment workshops
                                  Participation in the Western Australian Department of Environmental and social impacts arising from LNG
                                  State Development’s Stakeholder Reference Group development at James Price Point
                                  Establishment of Browse LNG Development               Marine impacts arising from LNG development at
                                  Marine Users Working Group in June                    James Price Point
                                  2010 (the Group met three times)
                                  Establishment of the Browse LNG Development           Browse social impact assessment
                                  Community Advisory Committee in October               process and outcomes
                                  2010 (the Committee met three times)
            Exmouth,              Four community reference group meetings               Enfield and Vincent operations updates,
            Western Australia                                                           social investment, response to Montara/Macondo
            Port Campbell,        Two community reference group meetings                Otway Gas Plan operations updates,
            Victoria                                                                    sale of Woodside’s Otway interests and
                                                                                        transition to new gas plant operator
            Dili,                 Discussions with stakeholders regarding               Work carried out in 2010 to mature the Sunrise
            Timor-Leste           the Sunrise LNG Development                           project, theme selection of Floating LNG,
                                                                                        development of local content and social investment

             Staff at work on the Nganhurra FPSO.

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                                                               MATERIAL ISSUE
                                                               Opportunities, impacts and site selection of the
                                                               Browse LNG Development
                                                               Site selection of the Browse LNG Precinct was an important issue in 2010 with the ongoing assessment of James Price
                                                               Point by the Western Australian Government for the establishment of the Precinct. James Price Point attracted significant
                                                               attention from a range of stakeholders, including Indigenous, community, media and non-government organisations.

                                                               Context                                      The Western Australian Government            potential environmental, social
                                                               The Kimberley region of Western Australia    identified James Price Point as the          and heritage impacts, and to identify
                                                               is a diverse area. It is widely recognised   most appropriate site for the Browse         the strategies required to manage
14                                                                                                          LNG Precinct, after consultation with        these impacts.
                                                               for its environmental and tourism values.
                                                               The region’s significant Indigenous          environmental groups, Indigenous
Woodside Petroleum Ltd | 2010 sustainable development report

                                                                                                            and community leaders, oil and gas           The Strategic Assessment Draft Report
                                                               population has strong connections to
                                                                                                            proponents (including Woodside),             was released in December 2010, and
                                                               land and culture, as well as being at the
                                                                                                            and the Environmental Protection             will be subject to a public comment
                                                               forefront of the Indigenous land rights
                                                                                                            Authority of Western Australia.              period until March 2011. The final report
                                                               and self determination movements.
                                                                                                                                                         will provide the basis for Australian and
                                                               The Kimberley has relatively high levels     The site for the Browse LNG Precinct         Western Australian Governments to
                                                               of poverty and poor socio-economic           was chosen by the Western Australian         consider the environmental approval
                                                               outcomes, which are disproportionately       Government after it assessed 43              of the Browse LNG Precinct.
                                                               reflected in the region’s Indigenous         potential locations. The Western
                                                               population. Tourism, mining, retail,         Australian Government’s objective in         Our Commitment
                                                               agriculture and pearling are the major       pursuing a gas processing precinct is to
                                                                                                                                                         Woodside is committed to a socially
                                                               contributors to the region’s economy.        minimise heritage and environmental
                                                                                                                                                         and environmentally responsible
                                                                                                            impacts by locating multiple proponents
                                                                                                                                                         development of the Browse Basin
                                                               In February 2008 the Australian              at a single site, while delivering
                                                                                                                                                         resources. The development of Browse
                                                               Government opened an assessment              investment, business and employment
                                                                                                                                                         can have positive economic and social
                                                               of the West Kimberley for possible           opportunities from LNG processing.
                                                                                                                                                         effects on Kimberley communities, while
                                                               National Heritage listing. A decision
                                                                                                            In 2009 the Australian Government            environmental and cultural issues need
                                                               from the Federal Minister for
                                                                                                            offered renewed retention leases to the      to be carefully and sensitively managed.
                                                               Sustainability, Environment, Water,
                                                               Population and Communities on the            Browse Joint Venture for the Browse
                                                               listing is expected by 30 June 2011.         Basin gas fields. The renewal conditions     Our Strategy
                                                                                                            required the Browse Joint Venture to         Our strategy to deliver on our
                                                               Woodside is the major equity                 complete an A$1.25 billion work program      commitment focused on three areas
                                                               holder and operator of the Browse            and to make a final investment decision      in 2010:
                                                               LNG Development, which aims to               on the Development by mid-2012.
                                                                                                                                                         ƒ    Engaging Traditional Owners in
                                                               commercialise the three gas and
                                                                                                            The lease conditions also required                good faith by continuing discussions
                                                               condensate fields (Brecknock, Calliance
                                                                                                            that the Browse Joint Venture select              over land access and delivering
                                                               and Torosa), located 400 km off the
                                                                                                            the Western Australian Government’s               opportunities for training, employment
                                                               Kimberley coast. Gas and liquids
                                                                                                            Browse LNG Precinct as its preferred              and business development;
                                                               from these fields will be brought to
                                                               an onshore LNG plant at the Western          onshore development option, unless
                                                                                                                                                         ƒ    Building our relationships and
                                                               Australian Government’s Browse LNG           it could demonstrate that another
                                                                                                                                                              presence in the Broome
                                                               Precinct, 60 km north of Broome.             development concept would be
                                                                                                                                                              community; and
                                                                                                            commercially viable at an earlier time.
                                                               The Browse LNG Development is a                                                           ƒ    Completing our baseline
                                                               joint venture comprising Woodside,           In February 2010, after reviewing
                                                                                                                                                              environmental studies to support
                                                               BHP Billiton, BP, Chevron and Shell.         alternatives, including transporting gas
                                                                                                                                                              the environmental assessments
                                                                                                            to the Pilbara for processing, the Browse
                                                                                                                                                              for Browse.
                                                               Woodside has been involved in                Joint Venture accepted the Australian
                                                               discussions with government agencies         Government’s renewal condition to
                                                               and Kimberley Indigenous stakeholders        select the Browse LNG Precinct as the
                                                               over a suitable LNG processing site for      preferred location to process its LNG.
                                                               many years. Development options that
                                                               have been investigated by Woodside           To support the establishment of the
                                                               included an offshore development,            Browse LNG Precinct, the Western
                                                               piping gas to the Pilbara, and multiple      Australian Government is leading a
                                                               locations in the Kimberley.                  Strategic Assessment to understand the

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             James Price Point, 60 km north of Broome.

           2010 Performance                              an agreement with the Western                  Strategic Assessment and aims
           Engaging Traditional Owners                   Australian Government and Woodside             to identify and manage the social
                                                         within the specified timeframe.                opportunities and impacts directly related
           Woodside continued to build its                                                              to the Browse LNG Development.                   15
           relationship with the Kimberley Land          Woodside’s preference is a negotiated
           Council, Traditional Owners and other

                                                                                                                                                         Woodside | material issue
                                                         agreement with Traditional Owners              We engaged a leading independent
           Indigenous stakeholders during 2010.          to secure land access at James Price           agency to carry out baseline research
           We continued dialogue over land               Point. An agreement would include a            and public consultation, and to compile
           access and development benefits               significant benefits package for Kimberley     a report and management plan, which
           for Traditional Owners and started            Indigenous people, including training and      will be released publicly in 2011.
           to implement our commitments to               employment associated with the Browse
           Kimberley Indigenous people by delivering     LNG Development and opportunities for          Completing our environmental studies
           a number of new initiatives to support        local Indigenous businesses.                   The Browse LNG Development’s
           Indigenous people and culture.                                                               extensive environmental studies
                                                         Building relationships with                    program continued in 2010 to meet the
           By year end, 15 Kimberley Indigenous          the Broome community                           requirements of the Western Australian
           people on the Browse LNG Development
                                                         In 2010 we established an office in            Government’s Strategic Assessment
           were either in full-time employment or on
                                                         Broome to support increased engagement         and the Browse upstream (offshore)
           recognised training programs. We have
                                                         with people in Broome and surrounding          environmental impact assessment.
           also provided ongoing opportunities for
                                                         communities. Our aim is to understand
           Indigenous contractors to provide their                                                      These studies included the most
                                                         the needs and aspirations of the
           expertise in monitoring and assessing                                                        comprehensive study undertaken
                                                         Broome community, and find ways
           our environmental and engineering                                                            of the Western Australian Group lV
                                                         that the Browse LNG Development
           studies at James Price Point.                                                                humpback whale population, ongoing
                                                         can contribute to meeting those
                                                         needs. At the same time we are also            assessments of the Scott Reef
           We have employed a dedicated
                                                         educating people in Broome and nearby          system, marine baseline studies, and
           Indigenous Affairs team in our Broome
                                                         communities about the Development.             onshore flora and fauna studies.
           office to strengthen our relationships with
           local Indigenous people. We have started                                                     In total the Browse Joint Venture
                                                         We have:
           identifying and fostering Indigenous                                                         funded environmental studies valued
           businesses that have the capacity to          ƒ   Expanded the Woodside
                                                                                                        at A$30 million during the year.
           provide services to Woodside. We                  Community Grants program;
                                                                                                        Much of this work has been peer-
           have successfully engaged Indigenous                                                         reviewed and has made a substantial
                                                         ƒ   Hosted public exhibitions
           businesses to provide transport, catering                                                    contribution to the available knowledge
                                                             where we provided information
           and media production services. As                                                            of the Kimberley’s ecosystems.
                                                             about the Development;
           our on-site activities increase, we will
           work towards our target of awarding           ƒ   Provided regular updates to                Assurance
           about A$5 million worth of contracts              the community through local
           to Indigenous businesses each year                                                           The Browse Joint Venture conducts
                                                             newspapers and radio;
           when the plant is operational.                                                               an annual internal assurance process
                                                         ƒ   Briefed local businesses on preparing      across our business to ensure
           In September 2010, the Western                    to bid for Woodside contracts; and         compliance with agreed actions.
           Australian Government announced it
                                                                                                           For further information on the Browse
           would start the process of acquiring land     ƒ   Commenced a travelling careers and
                                                                                                           LNG Precinct please visit
           for the Browse LNG Precinct, which                training expo across the Kimberley.
           included a six month right-to-negotiate
           period for native title claimants. The land   Woodside commissioned the Browse
           acquisition process was commenced             Social Impact Assessment (BSIA) in
           after the Kimberley Land Council and          2010. Woodside’s BSIA complements
           native title claimants could not finalise     the Western Australian Government’s

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                                                                                                                                                                Business Principles

                                                                                                                                                                     We Deliver Economic Benefits

                                                                                                                                                                     We Are Open and Accountable

                                                                                                                                                                     We Invest in Innovation and Enterprise

                                                               ECONOMIC                                                                                              We Contribute to the Sustainability
                                                                                                                                                                     of Our Communities

                                                               In 2010 Woodside produced a net profit of US$1.575 billion and
                                                               increased our operating cash flow. We are well positioned to fund
                                                               our LNG growth plans.

                                                               Our Business Context                          Other proposed LNG projects are             Our Strategy
Woodside Petroleum Ltd | 2010 sustainable development report

                                                               Woodside has an Australian operating          expected to contribute to the increase      Our executive management team
                                                               focus with the majority of our production     in Australian LNG exports over the next     develops our business strategy,
                                                               coming from our Australian-based              ten years. Industry and government          which is endorsed by the Board.
                                                               assets. Woodside has more than 25             are working together to develop the
                                                               years’ experience in safe and reliable        substantial resource discoveries in         Our six business units manage annual
                                                               product supply and delivery. We also          the Carnarvon and Browse Basins             business plans to meet our strategy
                                                               have a complementary portfolio of             via strategic infrastructure hubs. In       and are developed and implemented
                                                               discovered hydrocarbons in the region         addition, two of the four proposed          with functional support. These business
                                                               pending development, such as Pluto            coal seam methane LNG projects              plans incorporate risk assessment at
                                                               expansion, Browse and Sunrise.                in Queensland recently reached              the business and operational level.
                                                                                                             a final investment decision.
                                                               The geographical location of our assets                                                   These plans include key performance
                                                               enables us to supply oil and gas to           Many more Australian LNG projects are       indicators (KPIs) against a range of
                                                               the established and growing Asian             in the development phase. These include     financial and non-financial measures. Non-
                                                               economies. LNG demand in the region           Woodside’s Sunrise LNG Development          financial measures include environmental,
                                                               currently comprises 60% of global LNG         (which utilises floating LNG technology)    health, safety and security, people, and
                                                               demand and is forecast by industry            and new types of small scale LNG            community, and Indigenous dimensions.
                                                               experts to double in volume by 2025.          that will assist the industry to meet       Staff reporting to the Chief Executive
                                                                                                             the world’s gas needs in the future.        Officer have accountability for these KPIs.
                                                               Global LNG demand grew faster than
                                                               expected in 2010 as a result of the           In addition to our continued LNG growth,
                                                                                                             Woodside has a strong portfolio of liquid   2010 Performance in Detail
                                                               economic recovery in Asia combined with
                                                                                                             hydrocarbons. As a result, the revenue      Financial performance
                                                               unusually cold weather in Europe. Strong
                                                               growth in developing Asian economies is       from more than 60% of Woodside’s            Despite the global financial crisis
                                                               expected to drive further demand growth       total hydrocarbon production (barrel of     continuing to cause uncertainty in
                                                               for LNG in the future. The emergence          oil equivalent basis or boe) is directly    sectors of the world’s economy,
                                                               of new and prospective markets in the         linked to fluctuations in oil prices.       demand for LNG remained robust.
                                                               Middle East, Asia and South America will
                                                                                                             Our Approach                                Our net profit was US$1.575 billion in
                                                               also contribute to ongoing LNG demand
                                                                                                                                                         2010, surpassing our record 2009 profit of
                                                               growth into the foreseeable future.           Woodside’s economic contribution
                                                                                                                                                         US$1.474 billion. This increase was largely
                                                                                                             is twofold. Firstly, it’s about
                                                               The Australian LNG industry, including                                                    driven by an approximately 20% increase
                                                                                                             delivering superior, sustainable
                                                               Woodside’s own portfolio, has                                                             to US$4.193 billion in sales revenue due,
                                                                                                             returns to our shareholders.
                                                               tremendous growth potential. The                                                          in part, to higher commodity prices.
                                                               pending start up of new LNG projects,         Secondly, it’s about delivering broad
                                                                                                                                                         Our total annual production for
                                                               including Woodside’s Pluto LNG                societal benefits by employing people,
                                                                                                                                                         2010 was 72.7 million barrels of oil
                                                               Project, will supplement existing supply      paying wages, investing in the skills of
                                                                                                                                                         equivalent (MMboe). Production was
                                                               from the North West Shelf Project in          our people, paying taxes to governments,
                                                                                                                                                         lower than in previous years due to
                                                               Western Australia and the Darwin LNG          purchasing goods and services through
                                                                                                                                                         natural field decline of our oil assets
                                                               facilities in the Northern Territory.         our supply chain and producing products
                                                                                                                                                         and the sale of our interest in the
                                                                                                             that satisfy the needs of our customers.
                                                                                                                                                         Otway Gas Project in March 2010.

                                                               PERFORMANCE SUMMARY
                                                                      NET PROFIT                           OPERATING                    FULL YEAR                         % GEARING
                                                                      AFTER TAX                            CASH FLOW                    DIVIDEND PER

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           Our Targets
             2010 Actions                                                           Status                          2011 Targets

             Production of 70 to 75MMboe                                            Completed                         Meet 2011 production target guidance

             Maintain product quality                                               Completed                         Maintain product quality

             Develop five-year strategy for Indigenous
                                                                                                                      Progress Indigenous participation in
             participation in commercial contracting                                Completed
                                                                                                                      commercial contracting and procurement
             and procurement

             Financial Performance Summary*
                                                                                                         2010             2009         2008        2007        2006
               Production (MMboe)                                                                         72.7             80.9         81.3        70.6        67.9
               Sales revenue from continuing operations ($ million)                                      4,193            3,487        5,045       3,224       2,620
               Operating cash flow (after tax) ($ million)                                               2,104            1,483        3,224       2,082       1,457
               Capital expenditure ($ million)                                                          3,636             4,265        4,449       2,412       1,467

                                                                                                                                                                             Woodside | economic
               Exploration and evaluation expensed ($ million)                                             329             253          301         440          318
               Net profit after tax ($ million)                                                          1,575            1,474        1,546        864        1,075
               Expense on materials, goods, services, employees ($ million)                                597             521          589         402         368
               Royalties, excise, taxes ($ million)                                                      1,116            1,099        1,708         915        797
               Gearing (%)                                                                                26.3             29.8         29.6        14.9        26.4
           * All financial data is reported in US dollars unless otherwise indicated.

           Infill drilling at the Vincent oil field during                   Gearing and debt remain at conservative
           the year boosted production despite the                           levels and the company remains well
           natural field decline. The discovery of the                       placed leading up to the commencement
           Cimatti oil field strengthens the long-                           of the Pluto Foundation Project.
           term production outlook for the region.
                                                                             Woodside sold its 51.55% interest in
           Our operating cash flow increased by                              the Otway Gas Project to Origin Energy
           41.9% from the previous year to                                   Resources Ltd and Benaris International
           US$2.104 billion, putting us in a strong                          N.V. in March 2010 for A$724.5 million.
           position to invest in our growth strategy.
                                                                             The Liberia/Sierra Leone assets were
           We also invested US$3.941 billion in                              successfully divested for US$65
           capital and exploration expenditure.                              million in 2010. As part of the sale,
                                                                             Woodside also received interests in eight
           A fully-franked final dividend of                                 exploration permits in the Gulf of Mexico.
           US55 cents per share was declared by
           the Board which together with fully-                                    Further information on our financial
           franked interim dividend of US50                                        performance is available in our
           cents per share paid to shareholders in                                 2010 Annual Report.
           September 2010 results in a full year
           dividend of US105 cents per share. The
           final dividend will be paid on 6 April 2011.

                         OUR FOCUS Woodside’s economic contribution                                                                               LAWRIE TREMAINE
                         is about delivering superior, sustainable returns                                                                     Executive Vice President &
                                                                                                                                                   Chief Financial Officer
                         to our shareholders and providing broad societal

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                                                               In 2010 we achieved an LNG ‘on specification’ rate of 100% and an
                                                               overall ‘on specification’ rate of 99.7% across all gas products.

                                                               Economic contribution                           Product quality and reliability of supply                                                                             Sales revenue
                                                               In 2010 Woodside’s total expenditure            In 2010 we achieved an LNG ‘on

                                                               was approximately US$4.5 billion.               specification’ rate of 100% and an
                                                               About 83% of this amount was spent in           overall ‘on specification’ rate of 99.7%

                                                               Australia on materials, goods and services      across all gas products. Oil products

                                                                                                                                                                               Revenue (US$million)

                                                               purchased; employee payroll and training;       are sold ‘as produced’ and are therefore

                                                               and capital and exploration expenditure.        not bound by a specification. Domestic

                                                                                                               gas supplied to the Western Australian
                                                               In addition we paid more than                   market is subject to a strict specification
                                                               US$1.1 billion in royalties, excise and         and our quality compliance rate in 2010
                                                               taxes to governments, most of which             was 100%. Our production facilities
                                                               was paid to the Australian Government.          also achieved our target average
                                                                                                                                                                                                                      06     07          08      09       10
                                                                                                               reliability rate of 94.8%, which is a
            18                                                 Dividends to the value of about
                                                                                                               measure of our plant performance.                                                                    Sales revenue up 20.2% due to
                                                               US$547 million were paid to                                                                                                                          higher commodity prices and the
                                                               shareholders in 2010.                           In 2010 we also completed construction                                                               positive conclusion of certain LNG
Woodside Petroleum Ltd | 2010 sustainable development report

                                                                                                                                                                                                                    price negotiations.
                                                                                                               of a new laboratory to support our Pilbara
                                                               Woodside did not receive significant
                                                                                                               operations. The laboratory is central
                                                               financial assistance from government
                                                                                                               to the continuous monitoring of our                                                                       Reported net profit after tax
                                                               in 2010.
                                                                                                               products. It is one of the most technically
                                                               Supply chain performance                        advanced laboratories in the world.

                                                               Woodside has a Local Industry

                                                                                                               Woodside did not receive any fines
                                                                                                                                                                               Net profit after tax (US$ million)

                                                               Participation Policy, which seeks               for non-compliance with laws and
                                                               to provide full, fair and reasonable            regulations concerning the provision and

                                                               opportunity for local industry to               use of products and services in 2010.                                                                         864
                                                               contribute to Woodside activities. We
                                                               maximise local industry participation           Investing in people
                                                               where it is capable and competitive             In 2010 Woodside spent approximately
                                                               on the basis of health and safety,              A$20 million on staff training and
                                                               environment, quality, cost and delivery.        development.
                                                               This policy applies to all personnel and                                                                                                              06      07          08      09      10
                                                               contractors engaged in activities under
                                                                                                               Performance Data                                                                                     Reported net profit after tax up 6.9%
                                                               Woodside’s operational control.                                                                                                                      due to higher commodity prices and
                                                                                                                                         Production volumes                                                         one-off gains from asset divestments.
                                                               We seek to deliver these benefits
                                                               through our day-to-day operations

                                                               and development of new projects.

                                                                                                                                                                                                                             Operating cash flow

                                                               Approximately 80% of Woodside’s
                                                                                                            Production (MMboe)

                                                               total contract expenses including

                                                               the purchase of goods, services and
                                                                                                                                                                               Operating cashflow (US$ million)

                                                               equipment on contract was spent
                                                               locally within Western Australia and

                                                               nationally across Australia during 2010.

                                                               A contract Health, Safety and                                      06      07      08       09       10
                                                               Environment (HSE) scorecard
                                                               model was developed in 2010 and                                   Down 10.1%, primarily due to the sale of
                                                                                                                                 Woodside’s interest in the Otway Gas
                                                               implementation has commenced.                                     Project and oil-field natural decline.
                                                               This is designed to further improve                                                                                                                    06     07          08      09       10
                                                               HSE for contractor management.
                                                                                                                                                                                                                    Operating cashflow up 41.9%, due
                                                               A dedicated resource for Indigenous                                                                                                                  to higher receipts driven by higher
                                                                                                                                                                                                                    commodity prices and asset sales.
                                                               business participation was allocated
                                                               in 2010 and a five-year strategy
                                                               for Indigenous participation in
                                                               commercial contracting and
                                                               procurement has been developed.

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                                                                                                                                                           Woodside | economic
             We have more than 25 years’ experience in safe and reliable product
             supply and delivery. Our customers tell us that this is an important
             foundation of their business.
             – Reinhardt Matisons, President Marketing
             Customer Relations
             Meeting the needs of our customers              and future sales of equity gas to underpin      learn first-hand about the production
             is critical to our success.                     growth of our developments and projects.        and supply of LNG from the NWS.
                                                                                                             Companies that have participated in
             Our Western Australian gas customers            Woodside is the only Australian LNG             these programs include Tokyo Gas Co.,
             comprise gas distribution/aggregation           company to have representatives                 Ltd, Kansai Electric Power Co., Inc,
             companies, electricity producers,               in all of these cities.                         Osaka Gas and Korea Gas Corporation.
             major industrial customers and
             gas traders. Our international gas              The purchase and supply of oil and other        Woodside has also supported,
             customers comprise major industrial             liquid hydrocarbon products produced by         through its participation in the NWS,
             customers, including power and utility          Woodside is coordinated by our liquids          the Australia-China Natural Gas
             companies in the Asia-Pacific region.           marketing team. Liquids customers               Technology Partnership Fund.
                                                             include international oil majors, national
             Typically gas is supplied to these              oil companies, independent refiners and         This multi-million dollar fund is a joint
             customers under long-term sale and              petrochemical producers worldwide.              initiative of the NWS and Australian
             purchase agreements, some of which                                                              and Western Australian Governments,
             are up to 25 years in duration.                 Relationships with these customers exist        and aims to provide opportunities
                                                             at multiple levels within the customer          for training, research and knowledge
             These contracts create the opportunity          organisations and include the trader/           transfer between the People’s
             for long-term customer relationships,           relationship manager interface, the             Republic of China and Australia in
             which are managed by dedicated                  contracts execution/operations interface        the natural gas and LNG industry.
             relationship managers; either directly          and the senior management interface.
             with Woodside, or through agencies                                                              A hallmark of our customer relations is
             in the instance of North West                   To support all relationships we facilitate      providing the flexibility to meet changing
             Shelf Project (NWS) products.                   customer visits to Woodside-operated            customer needs. These positive
                                                             sites, as well as visiting customers at their   relationships also allow us to manage
             The NWS agencies have offices in Perth,         own facilities.                                 unexpected production outcomes in a
             Beijing and Tokyo. In addition, Woodside                                                        way that minimises customer impacts.
             has its own offices in Perth, Beijing, Seoul    Formalised exchange programs also
             and Tokyo to support customer relations         allow customer representatives to

           The Sea Eagle LNG Transport vessel delivering the first LNG cargo into China in 2006.

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                                                               MATERIAL ISSUE
                                                               Woodside’s contribution to the regional development of the Pilbara
                                                               and the Kimberley regions of Western Australia.
                                                               Regional development was an important issue in Western Australia in 2010, with a renewed focus by governments of all
                                                               levels in Australia to invest in social infrastructure and services in regional communities. This focus has been accompanied
                                                               by community visioning and planning in the Pilbara. The Western Australian Government also completed a Strategic
                                                               Assessment to understand the implications of the establishment and operation of an LNG Precinct in the Kimberley.

                                                               Context                                       ƒ   Investing in programs and services         ƒ    A coordinated process allowing
                                                               Karratha has experienced steady                   that have mutual benefit for Woodside           stakeholders like Woodside to align
                                                               population growth over the past ten               and the broader community;                      their investment and resourcing to
            20                                                 years. There is a resident population of                                                          the Roebourne Rejuvenation goals;
                                                                                                             ƒ   Providing opportunities for local
                                                               about 14,000 people supplemented by
                                                                                                                 participation in our business; and         ƒ    Investing in the functionality of
Woodside Petroleum Ltd | 2010 sustainable development report

                                                               approximately 4,000 transient workers.
                                                                                                                                                                 the community and preparing
                                                                                                             ƒ   Voluntary contribution of funds                 them to realise economic
                                                               Broome is the largest regional centre
                                                                                                                 and resources to worthwhile                     development opportunities; and
                                                               in the Kimberley region. Government
                                                                                                                 community initiatives.
                                                               reports point to social infrastructure
                                                                                                                                                            ƒ    Ensuring access to equitable
                                                               and community services under
                                                                                                             In implementing this strategy we                    educational opportunities
                                                               pressure, exacerbated by seasonal
                                                                                                             listen to the needs of our employees                is a core commitment.
                                                               workforces and tourism.
                                                                                                             and the broader community. We also
                                                                                                             work with other industry and various           Clontarf Foundation
                                                               Exmouth is a remote community
                                                               in the Gascoyne region, with a                levels of government to optimise               Woodside commenced sponsorship
                                                               permanent population of 2,200                 resourcing and funding outcomes.               of the Clontarf Foundation in 2009
                                                               people. Its local economy is based                                                           to establish a Roebourne Academy
                                                                                                             Our regional strategy in the Kimberley is      for delivering educational and social
                                                               on marine and maritime industries,
                                                                                                             similar to the Pilbara, though at an earlier   outcomes to young Indigenous
                                                               nature-based tourism, commercial
                                                                                                             stage of development, in light of the          men through the medium of
                                                               and recreational fishing, and
                                                                                                             stage of our Browse LNG Development.           Australian Rules Football.
                                                               aquaculture. Woodside does not have
                                                               a residential workforce in Exmouth.           At this time we are focused on                 In 2010 further support through in-kind
                                                                                                             listening to stakeholders who have             accommodation was provided for the
                                                               Our Commitment                                an interest in the Kimberley and our           establishment of the Karratha Academy.
                                                               Woodside is committed to                      business activities, with a view to
                                                               supporting healthy and vibrant                managing impacts that may arise from           The Karratha and Roebourne Academies
                                                               communities where we operate.                 our Browse LNG Development.                    are two of 36 Academies run by the
                                                                                                                                                            Clontarf Foundation throughout Australia.
                                                               We support a sustainable Karratha,            2010 Performance                               Every academy is staffed with full-time
                                                               with a diverse economic base and                                                             mentors who guide and help young
                                                               amenities that enhance the town’s                                                            Indigenous men gain confidence, life
                                                               appeal as a place to live and work.           Woodside has made a significant                skills and increase their educational
                                                                                                             contribution to the regional                   and employment prospects.
                                                               We also recognise the environmental           development of the Pilbara since
                                                               and cultural significance of the              we started operations in 1984.                 Working in partnership with the local
                                                               Kimberley region, and the strong                                                             school, the Karratha Academy provides
                                                               ‘sense of place’ that people have about       A key aspect of our commitment to              a diverse program of activities designed
                                                               living and working in the Kimberley.          the region has been our collaborative          to engage the young Indigenous
                                                                                                             work with Indigenous stakeholders              men in the school environment.
                                                                                                             in the Shire of Roebourne.
                                                               Our Strategy                                                                                 Five young Indigenous men from the
                                                               Woodside is a long-standing member            Roebourne Rejuvenation Project                 Roebourne Academy and four from
                                                               of the Pilbara community through              Woodside has worked extensively with           the Karratha Academy graduated from
                                                               our operatorship of the North West            the Western Australian Government              Year 12 in 2010. It was also the first
                                                               Shelf Project (NWS) and more                  in the development of the Roebourne            time that an Indigenous male had
                                                               recently our Pluto LNG Project.               Rejuvenation Project to increase the           completed Year 12 and met the Western
                                                                                                             capacity of the Indigenous people of the       Australian academic requirements at
                                                               Our strategy with respect to                                                                 Roebourne District High School.
                                                                                                             West Pilbara to better realise the benefits
                                                               regional development involves:
                                                                                                             of neighbouring industry initiatives. The
                                                               ƒ    Understanding and mitigating             outcomes sought by Woodside include:           We are also working with the Shire of
                                                                    impacts arising from operational                                                        Roebourne, the Western Australian
                                                                                                             ƒ   A long-term focus on investment in
                                                                    and construction activities;                                                            and Australian Governments, and

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             2010 Family Fun Day in Karratha, supported by Woodside.

           other industry in the region, to support       Together with the other NWS participants,       commercial relationships with local
           worthwhile community projects. The             Woodside has contributed over A$5.6             suppliers of a diverse range of services
           Western Australian Government has              million to west Pilbara communities             including real estate, office supplies,
           also provided funding through its              through a social investment program,            vessel chartering and vehicle hire.
           Royalties for Regions program, which           inclusive of cash, time and in-kind support
           provides a framework for spending              (excluding management costs) in 2010.           In 2010 we expanded our Community
           25% of Western Australia’s resource                                                            Grants program to Broome and
                                                          Woodside employed more than 1,100               surrounding communities. This                    21
           development royalties in regional areas.
                                                          people in 2010 to support our NWS               social investment program supports

                                                                                                                                                           Woodside | material issue
           Woodside has a Karratha Infrastructure         and Pluto Projects, about 40% of                community groups by providing funding
           Strategy, with a focus on childcare, health,   whom lived in Karratha. The remainder           for activities and infrastructure.
           education and recreation. Voluntary            of our Karratha employees worked
           contributions by Woodside and the NWS          on a fly-in fly-out (FIFO) basis.               The initiatives we have supported range
           participants to these areas started in                                                         from providing equipment for the local
           2009, with a five-year strategy to spend       While we are committed to a significant         swimming club, through to supporting
           about A$30 million over this period.           residential workforce, offering a               a drilling program to supply fresh water
                                                          number of FIFO positions is important           to a Derby Indigenous community.
           Since 1984, the NWS’ overall financial         in maintaining workforce stability.
           contribution to Karratha has been              Attracting and retaining skilled operators      KALACC
           valued at more than A$300 million,             and maintenance workers in the face
                                                                                                          Woodside entered into a partnership
           including investments in roads, housing,       of growing Australian and international
                                                                                                          with the Kimberley Aboriginal Law and
           health services and education.                 competition for skilled workers is a
                                                                                                          Cultural Centre (KALACC) in 2010, to
                                                          challenge for all regional employers.
           Woodside, as operator of the NWS, has                                                          support KALACC’s work in maintaining
           built 680 houses to accommodate our            Looking ahead, we will seek                     Indigenous law and culture. In a two-
           residential employees. An additional           collaborative partnerships with relevant        year, A$400,000 agreement with
           138 houses were built to support               organisations to support improved               KALACC, Woodside will support two
           Woodside’s Pluto LNG Project. Some             services and facilities in key areas            of the Centre’s key programs - the
           of our housing portfolio is allocated to       such as health, education, childcare/           Repatriations Program, which involves the
           support critical community services.           early learning, youth, recreation and           return of historical materials, sacred and
                                                          leisure, and improving town amenities.          significant objects and human remains
           Woodside has also built or funded the                                                          to the Kimberley region, and the Yiriman
           majority of the accommodation required         We will also continue to encourage              Project, under which Aboriginal Elders
           for our Pluto construction workforce.          a competitive supply chain                      and community members take young
           Gap Ridge Village, which has been              and welcome local businesses                    people that have been identified as
           used for the construction of Pluto, was        tendering for available contracts.              ‘at-risk’ on intensive bush trips, to help
           built by Ngarda Civil and Mining, one                                                          them re-connect with their culture.
           of the largest Indigenous-owned and            Kimberley
           operated contracting companies in              Woodside’s association with the                 Looking ahead, we will take into
           Australia. The overall cost of the Village     Kimberley dates back to the 1970s,              consideration the outcomes of the
           was approximately A$300 million.               with major gas and condensate                   Western Australian Government’s
                                                          discoveries in the Browse Basin, about          evaluation of the environmental and social
           In 2010 Woodside contributed to an             400 km from the Kimberley coast.                implications of establishing and operating
           upgrade of the Walkington Theatre and                                                          the Browse LNG Precinct in developing
           the public port loading facilities. We also    Since that time we have maintained              the strategy for our contribution to the
           significantly contributed towards the          a steady flow of exploration and                regional development of the Kimberley.
           new Tambrey Early Learning Centre,             development activities from
           which opened in October 2010.                  the Broome Port, which have                     Exmouth
                                                          maintained our links with Broome                Woodside invests in the local
           These major infrastructure projects            and supported the local economy.                community through a range of
           are supported by our broader social                                                            educational, environmental and social
           investment program where we provide            Our Broome office opened in                     programs each year.
           financial and in-kind support to a             September 2010 and it is staffed by
           range of local community projects and          eight local residents. We have also             Woodside remains committed to
           activities that aim to enhance social,         had significant numbers of Perth-               maintaining a positive presence in the
           cultural and economic capacity.                based staff working in Broome during            community and building on our existing
                                                          the year and we have established                social investment programs.

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                                                                                                                                                                Business Principles

                                                                                                                                                                      We Supply Energy for the Future

                                                                                                                                                                      We Use Resources Efficiently

                                                                                                                                                                      We Minimise Our Ecological

                                                               Ongoing compliance and continued improvement in our environmental
                                                               performance is central to Woodside’s sustainable development as a company.
                                                               Our Business Context                         Our Approach                                 2010 Performance in Detail
                                                               Woodside operates in a range of              We recognise that our licence to             Environmental incidents
            22                                                 marine and terrestrial environments,         operate depends on how well we               In 2010 we reduced the occurrence of
                                                               predominantly in an Australian context.      understand the environments in               environmental incidents, with four events
                                                               Ongoing compliance and continued             which we operate and our ability to
Woodside Petroleum Ltd | 2010 sustainable development report

                                                                                                                                                         recorded as Category D in our internal
                                                               improvement in our environmental             minimise our environmental footprint.        incident rating system, where A is an
                                                               performance is central to Woodside’s                                                      incident with the greatest consequences.
                                                               sustainable development as a company.        Our systematic approach to
                                                                                                                                                         There were no incidents greater than a D.
                                                                                                            environmental management is
                                                               Potential environmental impacts              underpinned by the Woodside                  The four incidents were considered
                                                               relevant to our business include:            Management System, which                     Category D due to the requirement
                                                                                                            includes our Environment Policy.             to report them to government as
                                                               ƒ Release of hydrocarbons or
                                                                                                            This management system framework             part of our licence and approval
                                                                 chemicals onto land or into water;
                                                                                                            is aligned to the ISO14001 international     conditions. The incidents were:
                                                               ƒ Emissions of pollutant to air;             standard and applies a consistent
                                                                                                            approach to environmental                    ƒ    A ‘dark smoke’ event at the Karratha
                                                               ƒ Resource efficiency, including                                                               gas plant resulting from shutdown
                                                                                                            management across our business.
                                                                 water and energy use;                                                                        of the domestic gas plant following
                                                               ƒ Waste management; and                                                                        electrical system failures; and
                                                                                                            Our Strategy
                                                               ƒ Biodiversity impacts.                      We recognise that achieving high             ƒ    Unplanned release of methanol during
                                                                                                            standards of performance in our                   production from the Enfield oil well on
                                                               We integrate environmental management        foundation business provides our                  three separate occasions. Methanol
                                                               into the design, construction and            licence to operate. This means complying          is used for preventing formation
                                                               operation of our facilities. This            with the conditions of our licences and           of hydrates (frozen hydrocarbons)
                                                               includes managing potential changes          approvals and working to minimise                 during production from subsea
                                                               in our environmental footprint due to        potential impacts on the environment.             wells. It is of relatively low toxicity.
                                                               growth in our LNG operations through
                                                               developments such as the expansion of        We also recognise that understanding
                                                                                                                                                         We did not incur any environmental fines
                                                               the Pluto LNG Project, and the Browse        future operating environments is
                                                                                                                                                         or penalties in relation to these incidents.
                                                               and Sunrise LNG Developments.                fundamental to support our LNG growth
                                                                                                            strategy. This means undertaking             There has been a reduction in the
                                                               As a result of major oil spill incidents     studies and research to inform business      number of Category D incidents over the
                                                               in the Timor Sea and Gulf of Mexico,         decision making, impact assessment and       past three years, with 21 events being
                                                               in 2010 there was increased public           planning. It also involves taking account    recorded in 2008 and eight in 2009.
                                                               scrutiny by government and other             of other external factors, such as changes
                                                               stakeholders on oil spill prevention,        to industry regulations, stakeholder         There were no Category D incidents
                                                               mitigation and remediation. Government       expectations and global trends in            recorded from our drilling and
                                                               and industry are responding to the           industry practice and performance.           seismic operations in 2010.
                                                               lessons learned from these incidents
                                                               and implementing improvements.

                                                                   Woodside’s response is outlined on
                                                                   page 32.

                                                               PERFORMANCE SUMMARY
                                                                       CATEGORY D                         FLARING                      RECYCLING                          UNDERSTANDING
                                                                       INCIDENTS                                                                                          REGIONAL

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           Our Targets
             2010 Actions                                   Outcomes                     2011 Targets

             Review environment strategy                     Completed                    Roll out across the business

             Continue downward trend in Category D                                        Maintain low level of Category D
             environmental incidents                                                      environmental incidents
             Continue site-based water                                                    Initiate development of Woodside-
             efficiency measures                                                          wide water management strategy

           Air emissions                                Resource efficiency                            The Western Australian Government
           Our air emissions predominantly              Water use                                      also launched a Pilbara water efficiency
           consist of products of combustion                                                           program in 2010, as well as endorsing
                                                        In 2010 we used 345,000Kl of freshwater
           associated with power generation                                                            a proposal to build a new seawater
                                                        in our onshore operations. The calculation
           and LNG train compressor turbines,                                                          desalination plant that will add a further
                                                        is based on water usage bills and some
           both using gas turbine technology.                                                          six billion litres of water a year to support
                                                        metering on site. The majority of this
                                                                                                       residential and small commercial growth
                                                        freshwater is consumed in the production                                                        23
           Flaring represented less than 12%                                                           in Karratha, Dampier, Roebourne,
                                                        of gas at our Karratha Gas Plant. A water
           of emissions to air by source. Most                                                         Wickham and Point Samson.
                                                        management plan has been in place on

                                                                                                                                                        Woodside | environment
           of our facilities, including the newly
           commissioned Angel platform,                 this facility for many years. Our offshore
           performed better than expected. Our          production facilities produce freshwater
           total flared gas decreased. However,         through reverse osmosis units. We also
           additional anticipated improvements in       commissioned additional desalination
           flaring were not achieved due to flaring     capacity for general construction
           from the Maersk Nguijima-Yin and             activities at the Pluto LNG Park in 2009.
           Cossack Pioneer floating production,
                                                        We will continue to improve the methods
           storage and offloading oil facilities.
                                                        for recording our water usage and identify
           A fire on the Maersk Ngujima-Yin in          water efficiency initiatives as part of
           2009 damaged the gas reinjection             the development of a Woodside-wide
           compressors that are normally used to        water management strategy in 2011.
           reinject gas into the reservoir during oil
           production. Repairs took longer than         Freshwater supplies in the Pilbara are
           originally anticipated and are expected      drawn from regional scheme water,
           to be completed during 2011. During          which has two climate dependent
           2010, we managed production levels           water sources – the Harding Dam
           to minimise our flaring within the           (surface water) and the Millstream
           limits approved by the regulator.            Aquifer (groundwater). The Western
                                                        Australian Government estimates that
           Higher rates of flaring occurred on          the reliable yield from these sources
           the Cossack Pioneer as a result of           has a capacity of 15 GL. Current annual
           recycle compressor issues. A flare           demand in the region is 14.5 GL.
           management plan was put in place to
           maintain conformance with internal           The Western Australian Government
           standards and to minimise flaring            expects regional demand to outstrip
           within technical constraints.                supply in 2012. In response, they
                                                        announced in 2010 a five-year
           Our flared gas and greenhouse gas air        action plan to guide sustainable
           emission intensity decreased in 2010.        management of the region’s water
           Emission intensity refers to the emission    resources and water services.
           per tonne of hydrocarbon production.

                     OUR FOCUS We recognise that minimising                                                                  JILL HOFFMANN
                                                                                                                                    Vice President
                     our environmental footprint and understanding                                                                   Environment
                     future operating environments is fundamental to
                     supporting our licence to grow.

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                                                               Energy use                                  We continued marine monitoring                  Performance Data
                                                               Woodside recognises the need to have        programs for Pluto, including monitoring
                                                               energy-efficient operating facilities.      the impacts associated with dredging                                                      Incident Category D
                                                               We look at this from two perspectives       undertaken from 2008 to 2010 to                                                                and above
                                                               – in the design of new facilities; and      establish shipping facilities and a trunkline
                                                               identifying, evaluating and implementing    route. Water quality and coral health

                                                               energy savings opportunities.               monitoring carried out throughout the

                                                                                                           dredging program has shown that

                                                                                                                                                                         Number of incidents
                                                               In 2010 we continued ‘basis of design’      impacts were significantly less than
                                                               work for our Browse LNG Development,        predicted during the impact assessment
                                                               with a view to improving energy             and environmental approvals process.
                                                               efficiency and combustion emissions.        These findings are to be included with

                                                               The Browse Joint Venture will review        a range of other research conducted by

                                                               the proposed design in 2011 as Browse       Woodside in a dredge impact research
                                                               moves towards a final investment            project coordinated by the Western
                                                                                                                                                                                                     06           07         08       09      10
                                                               decision targeted for mid-2012.             Australian Marine Science Institute.
                                                                                                                                                            A change to the naming of incidents in the Woodside
                                                               We conducted energy efficiency              In 2010 we also continued our annual            incident classification system was made in early 2010.
                                                                                                                                                           ‘Category D’ incidents were previously referred to
                                                               assessments on the Maersk                   marine monitoring program for the               as ‘Category C’. There has been no material change
            24                                                                                                                                             to the criteria that would trigger an incident being
                                                               Ngujima-Yin and Angel facilities.           North West Shelf Project (NWS), in              considered for this category and therefore previous
                                                                                                                                                           performance against ‘Category C’ incidents is
                                                                                                           which a range of physical and biological
Woodside Petroleum Ltd | 2010 sustainable development report

                                                                                                                                                           considered equivalent to the new ‘Category D’.
                                                                  More information can be found in the     parameters is sampled to identify
                                                                  Climate Change section of this report    any longer-term impacts from NWS
                                                                  on page 26 and in our performance data
                                                                                                           operations. This program has been                                                                  Flare gas
                                                                  on page 52.
                                                                                                           in place for more than 20 years and                                                              and intensity
                                                                                                           has continued to show that there are
                                                               Waste management                            no significant impacts on the broader                                                     18.6

                                                               A change of waste management                ecosystem from Woodside’s operations.
                                                               practices in 2009 led to immediate                                                                                              566
                                                                                                                                                           Flared gas (kilotonne)

                                                               results, with significant improvement in    Woodside completed four marine seismic

                                                                                                                                                                                                                                                   production (kilotonne)
                                                                                                                                                                                                                                                     Intensity flared gas
                                                                                                           surveys and one marine controlled-                                                                    9.5         9.5     9.6     9.3
                                                               the proportion of waste recycled instead

                                                               of being sent to landfill. This positive    source electromagnetic survey in 2010.



                                                               trend has been maintained in 2010. Our      The surveys were conducted in the                                                                           310


                                                                                                           Browse and Carnarvon Basins to support

                                                               total solid waste during 2010 from our                                                                                                                        115

                                                               operating facilities was estimated to be    development and exploration efforts.
                                                               7390 tonnes of which we estimated that
                                                                                                           Details of cetacean sightings during these                                           06          07          08         09       10
                                                               45.8% was recycled.
                                                                                                           surveys were provided to the Australian
                                                                                                                                                                                                     Total gas flared for operated ventures
                                                               This approach will be extended to the       Government for inclusion in its national                                                  Woodside portion of flaring
                                                               Pluto LNG Plant when it comes into          database. The database is accessible                                                      Intensity flared gas (tonne)/hydrocarbon
                                                                                                                                                                                                     production (kilotonne)
                                                               production.                                 to researchers, marine industries,
                                                                                                           conservation groups and the public.
                                                               Biodiversity conservation                                                                                                       For further information on our
                                                                                                           Woodside followed the Australian                                                    environmental performance
                                                               Woodside’s approach to biodiversity
                                                                                                           Government licence conditions for                                                   indicators, please see page 50.
                                                               focuses on establishing high quality
                                                                                                           these surveys, including adherence to
                                                               baseline studies. These studies support
                                                                                                           Environmental Protection and Biodiversity
                                                               environmental impact assessments as
                                                                                                           Conservation Act (1999) Policy Statement
                                                               part of approvals processes and ongoing
                                                                                                           2.1 Interaction between offshore seismic
                                                               monitoring of our operational footprint.
                                                                                                           exploration and whales, which sets
                                                               In 2010 much of our focus was on            out standards to minimise the risk of
                                                               baseline research to support our Browse     disturbance and acoustic injury to whales
                                                               LNG Development. These studies              from seismic survey operations.
                                                               included continuation of extensive annual
                                                                                                           We continued to develop procedures
                                                               survey programs for humpback whale
                                                                                                           and practices in advance of emerging
                                                               and turtle monitoring, a baseline fish
                                                                                                           environmental issues such as invasive
                                                               monitoring survey (including sail fish
                                                                                                           marine species.
                                                               tagging) and various dredging studies.

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           Our licence to operate depends on how well we understand the
           surrounding environment.
           – Dr Luke Smith, Principal Environmental Scientist

           Browse Studies                               Western Australian Museum Alliance
           When contemplating a new                     Our alliance with the Western Australian                         LNG Development through the three year
           development, such as the Browse              (WA) Museum was formed in 1998. It                               Marine Life of The Kimberley Project.
           LNG Development, access to robust            typifies our approach to understanding
           data is critical in supporting decision      the broader context of the environments                          The project has involved collecting
           making and conducting impact                 in which we operate. It also illustrates our                     data on worms, molluscs, crustaceans,
           assessments to inform our design             collaborative approach to working with                           fish, corals, soft corals, echinoderms,
           process and operational planning.            leading researchers and ensuring that                            marine algae and seagrasses
                                                        research commissioned by Woodside                                from the inshore region and the
           Woodside undertook extensive                 is made available to the community.                              continental shelf coral atolls.
           studies to acquire a large amount                                                                                                                                                  25
           of scientific information to underpin        Woodside and the WA Museum                                             For further information, please visit

                                                                                                                                                                                              Woodside | environment
           the impact assessment of the                 undertook the first detailed survey of                       
           Browse LNG Development and to                the marine biodiversity of the Dampier
                                                                                                                         As a result of both regional research
           feed into the Western Australian             Archipelago, home to our North West
                                                                                                                         programs, the WA Museum has
           Government’s Strategic Assessment            Shelf and Pluto LNG Projects, in 1998.
                                                                                                                         documented more than 6,700 marine
           for the Browse LNG Precinct.
                                                        The focus of expeditions, by staff from                          species and described more than
           The Browse Joint Venture spent more          the WA Museum and other institutions                             290 species new to science.
           than A$30 million in environmental           in Australia and overseas, has been to
           studies in 2010, including:                                                                                   This research has direct relevance
                                                        collect data and specimens across a
                                                                                                                         to Western Australian Government
           ƒ Humpback whale and other                   range of habitat types. Since inception,
                                                                                                                         agencies, local communities and other
             marine megafauna surveys;                  the program has resulted in 4,500
                                                                                                                         industries, enabling them to undertake
                                                        species being recorded, many new
           ƒ Turtle monitoring program;                                                                                  business planning and decision
                                                        to science. These records are known
                                                                                                                         making in an informed manner.
           ƒ Dredging studies;                          as the Woodside Collection and are
                                                        on display at the WA Museum.                                           For further information, please visit
           ƒ Coral reef ecosystem surveys;
           ƒ Fish and benthic habitat surveys; and      In 2009 our relationship with the WA
                                                        Museum was expanded to include the
           ƒ Impact assessments for port and LNG        Kimberley, in recognition of our Browse
             plant construction and operation.

             Western Australian Humpback Whale Studies 2010
             Following from our previous studies, our
             2010 whale survey further improved our
             understanding of the distribution and abundance                                                                                                                          Carnot Bay
             of humpback whales off the west coast of the
             Kimberley region. The extensive study included                         5%                      5%           10%              10%         10% 10% 5%
             aerial surveys over 20 days from June to                                                                            10%      10%         10% 10% 5%       Cape Bertholet

             October flying over 17,000 km of transect.

             Analysis of results showed that 95% of the
                                                                                                                                                                   Coulomb Point
             humpback whales and calves recorded in the
             James Price Point Migration Corridor Survey
             area were more than 6 km from the coast. The
             peak abundance occurs from mid-July to early
             September. The average distance from shore                                                                                                                    Browse
             that adult humpback whales were recorded was                                                                                                                  Precinct
                                                                                                                                                                Quondong Point
             24.1 km.                                                                                                                     James Price Point
                                                                                                                                         Marine Precinct Area
                                                                                                                                           (indicative only)
             The vast majority of humpback whales migrating
             through the area are therefore outside the
             immediate construction footprint of the Western
             Australian Government’s Browse LNG Precinct.
             Broader regional surveys illustrated that the
                                                               90     80          70          60          50        40              30           20        10
             Browse offshore platforms are well outside the                                                                                                             Cape Latreille
             migratory path. Findings such as these have                   Migration corridor survey transects
                                                                                                                                Outer limit of
             been included in the Strategic Assessment for                 No sightings
                                                                                                                               coastal waters
             the Browse LNG Precinct.                                                                                           (3nm miles)

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                                                                                            MATERIAL ISSUE
                                                                                            Climate Change
                                                                                            Description                                                                         Context                                        Data from the International Energy
                                                                                            Climate change and its relevance to                                                 Following the federal election in              Agency’s World Energy Outlook 2010
                                                                                            Woodside was a public issue in 2010,                                                August 2010, the Australian Government         indicates that global energy demand
                                                                                            following a federal election and the re-                                            signaled its commitment to establish a         will increase by nearly 40% of 2007
                                                                                            emergence of the debate on Australian                                               carbon price. In late 2010 the Australian      levels by 2030, with most of the energy
                                                                                            climate change policy development.                                                  Government established a Climate               growth being sourced from fossil
                                                                                                                                                                                Change Business Roundtable to                  fuels. Increasing the share of LNG in
                                                                                                                                                                                engage the business community on its           the global fossil fuel mix will help to
                                                                                                                                                                                climate change policies. Woodside’s            minimise greenhouse emissions.
                                                                                                Greenhouse gas emissions
                                                                                                                                                                                Chief Executive Officer, Don Voelte,
                                                                                                      and intensity                                                                                                            Relative to fuels such as coal, LNG
                                                                                                                                                                                accepted an invitation to participate
                                                                                            10000                                   0.28                                                                                       produces as little as 50% less emissions
                                                                                                                                                                                in the Roundtable discussions.
                                                                                                                                    0.27                                                                                       when used to produce electricity. Despite
                                                               CO2 Emissions (kilotonnes)

26                                                                                           8000                                                                                                                              being emissions-intensive to produce, the
                                                                                                                                                                                Meanwhile, measures such as the
                                                                                                                                           Intensity CO2 (tonnes)/Hydrocarbon

                                                                                                                                                                                renewable energy target and energy             use of LNG therefore has the potential
Woodside Petroleum Ltd | 2010 sustainable development report

                                                                                             6000                                                                                                                              to result in significant environmental
                                                                                                                                                    production (tonne)

                                                                                                                                    0.25                                        efficiency initiatives have been promoted
                                                                                             5000                                                                                                                              benefits when displacing higher-emitting
                                                                                                                                    0.24                                        to help reduce Australia’s emissions and
                                                                                                                                                                                meet its Kyoto Protocol commitments.           fuels such as coal in power generation.
                                                                                             3000                                   0.23
                                                                                                                                                                                Australia has also been active in helping to
                                                                                             2000                                                                                                                              Studies that further explore the
                                                                                                                                    0.22                                        shape a collective international response
                                                                                             1000                                                                                                                              combustion of natural gas relative
                                                                                                                                                                                through the United Nations Framework
                                                                                                0                                   0.21                                                                                       to the combustion of coal from a
                                                                                                    06     07    08     09     10                                               Convention on Climate Change.
                                                                                                                                                                                                                               lifecycle perspective include the
                                                                                                                                                                                A 2008 Worley Parsons report                   Worley Parsons Greenhouse Gas
                                                                                            Total annual CO2e emissions for
                                                                                                                                                                                (consistent with a 1996 CSIRO                  emissions Study of Australian LNG,
                                                                                            operated venues
                                                                                                                                                                                study) demonstrates that LNG has a             and the Pace Life Cycle Assessment
                                                                                            Woodside portion of CO2e emissions
                                                                                                                                                                                substantially lower greenhouse footprint       of GHG Emissions from LNG and Coal
                                                                                            GHG intensity (CO2e/t HC production)                                                associated with it compared to coal –          Fired Generation Scenarios study.
                                                                                                                                                                                not just in reference to the combustion
                                                                                                                                                                                                                               Conclusions from the Worley Parsons
                                                                                                                                                                                emissions, but throughout its lifecycle.
                                                                                                Current and projected global                                                                                                   study indicate that although the
                                                                                               energy demand by fuel source                                                                                                    production of LNG results in emissions
                                                                                                                                                                                Our Commitment                                 within Australia, there are significant
                                                                                                         2007 (12,013 Mtoe)                                                                                                    greenhouse benefits in a global
                                                                                                                                                                                Woodside recognises that climate
                                                                                                                  1%                                                            change is a global problem requiring           context when LNG replaces higher-
                                                                                                                2%                                                              global solutions.                              emitting fossil fuels, such as coal. In
                                                                                                                                                                                                                               fact, for every tonne of carbon dioxide
                                                                                                            6%                                                                  We believe that natural gas has an             equivalent emitted in the production
                                                                                                          10%           34%                                                     important role to play in transitioning        of LNG, there is the potential to avoid
                                                                                                                                                                                to a lower carbon future. We believe           between 4.5 and 9.5 tonnes elsewhere
                                                                                                         21%                                                                    that Australia can help reduce global          in the world in cases where LNG
                                                                                                                                                                                emissions through the growth of                displaces coal for electricity generation
                                                                                                                 27%                                                            the Australian LNG industry, when              in customer countries such as China.
                                                                                                                                                                                LNG displaces higher-emitting
                                                                                                                                                                                fossil fuels such as coal and oil in           This is supported by the Pace study,
                                                                                                                                                                                countries to which it is sold.                 funded by the Center for Liquefied
                                                                                                         2030 (16,789 Mtoe)
                                                                                                                                                                                                                               Natural Gas, which found that for every
                                                                                                                2%                                                              We also believe that the Australian LNG        tonne of carbon dioxide equivalent
                                                                                                            2%                                                                  industry should not have additional            emitted in a sample of five LNG supplier
                                                                                                                                                                                costs placed on it until its international     countries’ LNG production, a potential
                                                                                                                                                                                competitors are faced with similar costs.      6.8 tonnes are avoided globally when
                                                                                                         10%            30%
                                                                                                                                                                                                                               LNG replaces coal in the current United
                                                                                                                                                                                Our Strategy                                   States electricity generation mix.
                                                                                                                                                                                In 2010 Woodside’s climate change
                                                                                                                                                                                                                               Developing technical solutions
                                                                                                                  29%                                                           strategy focused on the benefits of
                                                                                                                                                                                                                               to reduce our emissions
                                                                                                                                                                                natural gas and developing technical
                                                                                                                                                                                solutions to reduce our own emissions.         Technical initiatives that reduce our
                                                                                                         Oil          Biomass & Waste                                                                                          greenhouse emissions embrace three
                                                                                                         Coal         Nuclear                                                   The benefits of natural gas                    scenarios - the design of new facilities,
                                                                                                         Gas          Hydro                                                     Natural gas is a versatile and efficient       expansions, and improvements to
                                                                                                                      Other Renewables                                                                                         existing operations. At Woodside, we
                                                                                                                                                                                fuel with the potential to displace higher-
                                                                                                                                                                                emitting fossil fuels. Because of this,        maintain a portfolio of opportunities to
                                                                                                                                                                                it has the ability to support movement         reduce our emissions. Typically, new
                                                                                                                                                                                towards renewable energy systems.              facilities and expansions offer the most

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             We invest in offsetting our emissions from the Pluto LNG Project through CO2 Australia.

           signficant opportunities to improve              Woodside and its partners have             Our trend for emissions intensity of
           efficiency. This is because they do              made significant investments               LNG production has continued to
           not cause interruptions to production            towards reducing emissions at their        fall over time, with the progressive
           commitments on existing assets.                  facilities through both technical          introduction of more efficient
                                                            initiatives (for example reducing          production systems and processes.
           In 2010 we completed energy                      own-use fuel consumption) and
           efficiency assessments on two of our             market mechanisms (for example             At the start up of production of North
           existing facilities. These assessments           the investment for the Pluto LNG           West Shelf Project (NWS) LNG Train 4
           were conducted in accordance with                Project through CO2Australia).             our LNG emissions intensity was about

                                                                                                                                                      Woodside | material issue
           our obligations under the Australian                                                        0.48 tonnes CO2e / tonne LNG. At the
           Government’s Energy Efficiency                   Recognition of these investments           start up of production of NWS LNG
           Opportunities (EEO) program.                     will encourage continued efforts           Train 5 our LNG emissions intensity was
                                                            towards the environmental                  about 0.44 tonnes CO2e / tonne LNG.
           Since the inception of the program, we
                                                            objective of reducing emissions.
           have undertaken nine assessments
                                                            It will also ensure continued LNG          2010 Public Reporting
           and implemented 44 opportunities,
                                                            production, which contributes              Woodside’s share of emissions in 2010
           resulting in annual energy savings to
                                                            to the Australian economy, and             was about 2.3 million tonnes CO2e.
           date of approximately 3 million GJ,
                                                            is a cleaner source of energy.
           which is equivalent to about 2% of
                                                                                                       In supporting our climate change
           Woodside’s current energy consumption.       Re-invest revenue raised from                  strategy, we provide information about
                                                        the carbon price mechanism into                greenhouse gas emissions as well as
           Our Position on Climate Policy               emissions-reducing technologies                energy production and consumption
           Woodside recognises the Australian               Accelerating the development and           for our facilities. This is provided
           Government’s plan to introduce a                 commercialisation of low emission          to the Australian Government as a
           carbon price mechanism into Australia’s          technologies should be the priority        requirement of the NGER legislation.
           economy and supports the following               for revenues raised through a              We also participate in the EEO program.
           principles in its development:                   carbon price.                              Woodside-operated facilities undergo
                                                                                                       energy efficiency assessments and
           The development of a carbon price            Preserve the competitiveness of Australian     identify opportunities for improvement
           mechanism starts from a clean slate          LNG exports                                    based on a government-approved
           A single national approach to regulating         Of vital importance to Australia’s         assessment and reporting schedule.
           greenhouse gas emissions
                                                            LNG industry is that any carbon
               The chosen mechanism should                                                             Woodside voluntarily takes part in the
                                                            price mechanism preserves the
               override all other legislation related                                                  Carbon Disclosure Project, a not-for-profit
                                                            competitiveness of Australian LNG
               to greenhouse gas emissions, for                                                        investor organisation. Information about
                                                            exports. Woodside believes that
               example project-specific obligations                                                    our emissions is also provided to the
                                                            a carbon price applied in Australia
               that impose an additional carbon                                                        annual Dow Jones Sustainability Index.
                                                            should not impose additional costs
               price. All mechanisms that either            on the LNG sector until competitor         In considering new and ongoing capital
               directly or indirectly place a carbon        LNG exporting countries have similar       expenditure, Woodside includes
               price should be streamlined with             costs applied to those producers.          carbon pricing assumptions as part of
               a single national approach.
                                                                                                       its economic assessment. Like other
           Reduce greenhouse gas emissions at           2010 Performance                               companies, we do not publicly release
           lowest cost to the Australian economy        In 2010 our total operated greenhouse gas      information on economic assumptions.
               Simplifying the administration of the    emissions decreased by about 653,000
               carbon price mechanism will help         tonnes CO2e to about 8.3 million tonnes        Assurance
               minimise costs associated with it.       CO2e. The decrease was primarily due to        In September 2010, Woodside engaged
                                                        a change in the emissions factors used to      Deloitte to provide limited assurance
           Recognise investments that have already      convert fuel use consumption and flaring       on its NGER data to the Board.
           been made to reduce emissions                quantity into greenhouse gas emissions.
               The carbon price mechanism               These factors have been adjusted to            In November 2010, we performed
               should recognise the contribution of     ensure consistency with the National           a self assessment against the key
               legacy investments made in good          Greenhouse and Energy Reporting                elements of the EEO legislation.
                                                        (NGER) legislation. Other contributors to
               faith towards reducing Australia’s
                                                        the decrease in emissions relative to 2009
               greenhouse gas emissions.
                                                        included lower hydrocarbon production
                                                        and the divestment of Woodside’s
                                                        interest in the Otway Gas Facility.

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                                                                                                                                                                    Business Principles

                                                               SOCIAL – HEALTH, SAFETY                                                                                    We Respect People

                                                               AND SECURITY
                                                               We believe that the health and safety of our people comes first in all
                                                               our decisions and actions.

                                                               Our Business Context                            Our health and safety aspiration is ‘no-one   ƒ    Improve learning, the communication
                                                                                                               gets hurt, no incidents’ and we seek to            of lessons learnt and the recognition
            28                                                 Our business is typical of the oil and
                                                                                                               be recognised by our people and peers              of warning signs from incidents in
                                                               gas industry, where potential exposure
                                                                                                               as an industry leader in the management            order to avoid repeat incidents;
                                                               to risk exists in many activities, which
Woodside Petroleum Ltd | 2010 sustainable development report

                                                               can result in high-impact events                of health and safety. This includes
                                                                                                                                                             ƒ    Design new and modified facilities
                                                               such as hydrocarbon releases, fire              ensuring the integrity of our assets
                                                                                                                                                                  to be inherently safer. Assure the
                                                               and explosion. Other activities, such           throughout their lifecycle so that they
                                                                                                                                                                  integrity of existing assets; and
                                                               as working at heights or in confined            operate without jeopardising our people’s
                                                               spaces, can also have potential impacts         health and safety and our asset’s value.      ƒ    Undertake strong engagement
                                                               on people’s health and safety if not                                                               and relationship-building with
                                                                                                               We strive to ensure the security                   government agencies and contractors
                                                               managed and performed appropriately.
                                                                                                               and protection of Woodside people,                 to achieve excellent health, safety
                                                               A key oil and gas industry focus is             information, assets and reputation                 and security performance.
                                                               on maintaining asset integrity, which           throughout the company’s global
                                                               encompasses a range of activities that          operations.                                   Woodside believes that the number
                                                               are aimed at prevention, preparedness,                                                        and frequency of injuries and
                                                               response and recovery from a major              Our Strategy                                  incidents recorded in 2010 was
                                                               accident event involving hydrocarbons.          Health and safety                             disappointing and aims to improve
                                                                                                                                                             performance by delivering on our
                                                               The Australian oil and gas industry uses        In late 2010, we introduced a new
                                                                                                                                                             health and safety imperatives.
                                                               contractors extensively for a number            internal health, safety and environment
                                                               of activities, including exploration,           performance measure and updated our           Security and emergency management
                                                               construction of new facilities and              six health, safety and security strategic
                                                                                                                                                             Woodside has a dedicated security,
                                                               maintenance of existing facilities.             imperatives. This followed a review of our
                                                                                                                                                             emergency and crisis management
                                                                                                               operating environment and the integration
                                                                                                                                                             team whose focus is to protect
                                                               The industry also undertakes construction       of security and emergency management
                                                                                                                                                             Woodside’s employees, information,
                                                               projects and sources goods and services         into the health and safety function. Our
                                                                                                                                                             assets and reputation with
                                                               from countries that, from time to time,         new 2011 strategic imperatives are to:
                                                                                                                                                             minimal business interruption.
                                                               experience increased security risk.             ƒ   Strengthen ‘Our Safety Culture’
                                                                                                                   and implement other high impact           The team work to identify and understand
                                                               Our Approach                                        human factors tools and techniques;       man-made and natural threats and risks
                                                               We believe that the health and safety of                                                      to Woodside, and ensure appropriate
                                                                                                               ƒ   Understand the consequences of            and robust procedures and processes
                                                               our people comes first in all our decisions
                                                                                                                   major accident events and manage          are in place as mitigation measures.
                                                               and actions.
                                                                                                                   preventative and mitigative controls;     Having a security, emergency and crisis
                                                                                                                                                             management capability embedded
                                                                                                               ƒ   Consistently implement health,
                                                                                                                                                             across Woodside is an essential
                                                                                                                   safety and security standards,
                                                                                                                                                             business enabler, which ensures that
                                                                                                                   procedures and rules;
                                                                                                                                                             the company prevents, prepares for,
                                                                                                                                                             responds to and recovers from any event.

                                                               PERFORMANCE HIGHLIGHTS
                                                                       TOTAL                                 TOTAL                         HIGH POTENTIAL                    LOSS OF
                                                                       RECORDABLE                            RECORDABLE                    INCIDENTS                         CONTAINMENT
                                                                       CASES                                 CASE                                                            EVENTS

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           Our Targets
             2010 Actions                                                     Status                                2011 Targets
             Improve TRCF comparable
                                                                               Not met                                 Improve TRCF performance compared to 2010*
             to 2009 performance
                                                                                                                       Revise and publish health, safety and
             Revise and roll out Golden Safety Rules                           Completed
                                                                                                                       security operating standards

             Engage contractors on health and safety                           Completed                               Continue to engage contractors on health and safety

                                                                                                                       Four crisis management exercises and a
             Three company-wide crisis
                                                                               Completed                               range of associated crisis and emergency
             management exercises conducted
                                                                                                                       management related training activities
           * For 2011, Woodside has introduced a new internal HSE performance measure which increases focus on more serious injuries and illnesses and high potential incidents. The new
             measure draws upon both lead and lagging indicators as part of a more balanced safety performance measure. Woodside will continue tracking and external reporting of TRCF.

           2010 Performance in Detail                                   Continued company-wide focus on                              Understand and manage risk
           Woodside’s frequency of safety incidents                     improving process safety and asset                           of major accident events
           (as measured by total recordable                             integrity contributed to significantly                       New engineering standards for health
           case frequency or TRCF) increased                            improved integrity performance,                              and safety in design were introduced that

                                                                                                                                                                                                 Woodside | health, safety and security
           from 3.3 in 2009 to 5.1 in 2010.                             including a substantial reduction in                         have more emphasis on inherent safety
                                                                        ‘loss of containment’ events. In 2010,                       principles, which reduce the residual risk
           The total number of safety incidents                         there was one hydrocarbon release
           (total recordable cases) decreased                                                                                        to the health and safety of our people.
                                                                        that was classified as major and a
           from 199 to 151, a 24% decrease from                         further eight deemed to be significant,                      The ongoing delivery of technical
           2009. This performance was relative                          compared with four major and 47                              integrity training helped improve
           to a 51% decrease in hours worked in                         significant releases during 2009.                            awareness and understanding of the
           2010, as the focus of work associated
                                                                        The number of reported occupational                          issue and the process and controls
           with construction of the Pluto LNG
                                                                        illnesses continued at similar levels.                       that Woodside employs to reduce
           Project shifted from fabrication in
                                                                        Twenty one occupational illnesses were                       the risk of major accident events.
           Asia to Karratha site activities.
                                                                        reported in 2010, compared to 30 in 2009.
           While the number of safety incidents
           decreased, the increase in TRCF                              2010 strategic imperatives activities
           is disappointing. There were no
                                                                        The following activities were undertaken
           work-related fatalities in 2010.
                                                                        with respect to our 2010 health,
           There were 54 high potential incidents                       safety and security imperatives:
           (HPIs), i.e. those with the potential
           to cause serious injury, compared                            Embed ‘Our Safety Culture’
           with 40 in 2009. The HPI frequency                           ‘Our Safety Culture’ capacity and
           increased from 0.67 in 2009 to 1.82                          capability was extended through
           in 2010. 55% of HPIs were ‘dropped                           measurement, education, training
           object’ incidents, primarily associated                      and coaching activities.
           with construction and shutdown
           activities. There was a substantial                          Awareness and use of human factors
           decrease in ‘dropped object’ incidents                       analysis tools was increased with
           in the last quarter of 2010, following                       targeted training, follow-up coaching
           a mid-year awareness campaign.                               and education aimed at increasing
           There were 13 eye-related injuries in                        understanding of human factors
           2010, compared with 45 in 2009. A                            issues and analytical techniques.
           sustained focus on eye injury prevention,
           including training and equipment
           upgrades led to the significant reduction.

                        OUR FOCUS Our health and safety aspiration is                                                                                                 EVE HOWELL
                                                                                                                                                         Executive Vice President
                        ‘no-one gets hurt, no incidents’ and we seek to be                                                                               Health, Safety & Security
                        recognised by our people and peers as an industry
                        leader in the management of health and safety. This
                        includes ensuring the integrity of our assets.

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                                                               Apply health, safety and                    Select and manage principal contractors           Performance Data
                                                               integrity processes, standards,             Woodside hosted a Contractor
                                                               procedures and rules                        Safety Forum in October 2010,                                                             Total recordable cases
                                                               Golden Safety Rules were revised            which was attended by over 100
                                                               and rolled out throughout Woodside,         senior leaders from Woodside and
                                                               to both employees and contractors.          its most significant contractors. This                                            5.1                                       5.1

                                                                                                                                                                                                                                                 Total recordable case frequency rate
                                                               The Golden Safety Rules are                 event was a follow-up to a forum that                                                          4.1   4.3

                                                                                                                                                                                                                                                       (per millon hours worked)
                                                               a cornerstone of Woodside’s                 Woodside hosted in February 2009.

                                                                                                                                                             Total recordable cases
                                                               approach to health and safety.
                                                                                                           Woodside continued to work closely with
                                                               Work commenced on reviewing all             Contractor Safety Focus Groups covering
                                                               health, safety and security standards       exploration, production, project execution,




                                                               and supporting documentation that           and drilling and completions activities.
                                                               will meet the requirements of the new                                                                                         06          07     08         09         10
                                                               Woodside Management System. The             Woodside was once again a leading
                                                               roll out of the revised and new operating   participant in Stand Together for
                                                               standards will be completed in 2011.        Safety, which is an industry-wide
                                                                                                           safety event that Woodside and its                                                  Lost workday case injuries
                                                               Improve learning                            contractors helped establish in 2009.
                                                               The quality of integrity-related
                                                                                                           Security and emergency management                                                                     0.9
                                                               investigations improved as a result of
Woodside Petroleum Ltd | 2010 sustainable development report


                                                                                                           In 2010 we continued to work with state,

                                                                                                                                                           Lost workday cases (LWC)
                                                               the implementation of an improved                                                                                                                                       0.7

                                                                                                                                                                                                                                             Lost workday frequency
                                                               qualitative assessment process,             national and international governments’

                                                               which provides direct feedback              security agencies to protect our operating                                                                      0.6

                                                               to investigation team leaders.              assets, construction sites and the
                                                                                                           workshops and yards of our contractors
                                                               Understand and control                      and suppliers. Liaison with these
                                                               occupational health risks                   agencies plays a vital link in protecting
                                                                                                                                                                                             06          07     08         09         10
                                                               Procedures and systems for selecting        our people travelling to or working in
                                                               and approving chemicals and other           countries with an increased security risk.
                                                               hazardous substances were upgraded.
                                                                                                           Capability development through training
                                                                                                           and simulated exercises was conducted                                                   Total hours worked
                                                               Awareness and understanding of
                                                               key occupational health risks such as       for all assets and projects to ensure
                                                                                                           that our people were well prepared to
                                                               heat stress and noise was increased                                                                                                                         53
                                                               through facility-focused health             deal with any type of incident. We also
                                                               risk assessments and company-               conducted three company-wide ‘Level 3’
                                                                                                           exercises to test the capability of broader
                                                                                                                                                         Hours (millions)

                                                               wide awareness campaigns.

                                                                                                           areas of our business, such as the



                                                                                                           welfare and communications functions.
                                                                                                           These exercises were conducted in
                                                                                                           partnership with key contractors and





                                                                                                           a range of government agencies to
                                                                                                                                                                                             06          07     08         09         10
                                                                                                           ensure the close integration of industry
                                                                                                           and government response measures.                                                       Contractors
                                                                                                               For further information on our
                                                                                                               health and safety performance
                                                                                                               indicators, please see page 55.
                                                                                                                                                                                                   High potential incidents

                                                                                                                                                                                                                                              High potential incidents frequency
                                                                                                                                                          High potential incidents (HPI)





                                                                                                                                                                                             06          07     08         09         10

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                                                                                                                                                        Woodside | health, safety and security
           This project is exciting because Woodside is playing a lead role in the
           potential development of a national Permit to Work standard.
           – Ally Oliver, Operations Manager – Projects and iSSoW project leader

           Permit to Work (PTW) is arguably the           Woodside partnered with Sage                    competence before being given
           most important safety management               Technology, an Australian software              access to iSSoW. A built-in security
           system in the oil and gas industry.            company specialising in safety-related          feature ensures that access is not
                                                          applications, to create the permit              possible until the criteria are met.
           The implementation of the Integrated           technology.
           Safe System of Work (iSSoW) in 2009                                                            The system has quickly proven to be an
           and 2010 has erased the differences            In the year-long lead-up to                     industry leader. Numerous companies
           between facility-specific PTW systems          implementation, more than 90                    have shown keen interest in the system,
           and replaced them with a uniform system.       presentations were delivered across all         with one company already adopting it.
                                                          operations sites to over 1,000 people.          The system and software have won
           Permit-related incidents have decreased        The sessions informed the workforce             awards nationally and internationally.
           by 65% since the introduction of the           about the new system and created a
           new system. There has also been an             sense of ownership and involvement in           iSSoW has significant potential because
           improved quality of risk assessment            the change, addressed concerns and              it lays a foundation to harmonise
           and improved levels of worksite                took feedback into consideration.               the permit system across a range
           risk awareness among crews.                                                                    of industries and companies.
                                                          Implementation was carried out one
           iSSoW has also allowed the company             facility at a time and a three-month            With another skills shortage looming
           to reduce its PTW procedures from              on site integration period ensured a            in the Australian oil and gas sector
           5,000 pages down to 100, a 98%                 seamless and successful transition.             and large numbers of transient
           reduction by simplifying the rules                                                             workers, there is a good argument for
           and building them directly into the            The iSSoW team, at its peak, comprised          standardising safety-critical working
           software. This removes the potential           only five people, but has had a substantial     practices across the oil and gas industry
           for users to shortcut the system.              impact on the day-to-day working                and across many industry sectors.
                                                          practices of thousands of permit
           iSSoW offers a robust system, which            workers across Woodside’s facilities
           is centrally-controlled. It consists of        and a significant number of third party
           business rules enforced through user-          contractors and transient workers.
           friendly software, and integrates risk
           management, isolation management               Every user of the system is trained
           and permit development.                        and must demonstrate their

           iSSoW has standardised permit to work systems across our facilities.

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                                                               MATERIAL ISSUE
                                                               The implications for Woodside and Western Australia of the Montara
                                                               and Macondo oil spills
                                                               The Macondo Oil Spill in the Gulf of Mexico was one of the main industry and community issues in 2010. It followed the
                                                               Montara Spill in the Timor Sea of 2009. These major oil spill incidents in the Timor Sea and Gulf of Mexico have had a significant
                                                               impact on the oil and gas industry in Australia.

                                                               Context                                       Our Commitment                                2010 Performance
                                                               In August 2009, a blow out on a drilling      Woodside recognises the significant           Preventative and response measures
                                                               rig on the Montara field in the Timor Sea,    concern that these major oil spills have      Maintaining the integrity of our facilities
                                                               north-west of the Western Australian          generated among the community,                and the safety of our people is a priority
                                                               coastline resulted in an oil and gas leak.    government, environmental                     for Woodside. Our facilities are well
Woodside Petroleum Ltd | 2010 sustainable development report

                                                               The leak was contained after 74 days.         groups and other stakeholders.                maintained to mitigate the risk of a loss
                                                                                                                                                           of containment. We undertake regular
                                                               The Australian Government                     These incidents are expected to
                                                                                                                                                           management reviews to independently
                                                               commissioned the Montara Inquiry              have long-lasting impacts on the
                                                                                                                                                           verify compliance with our management
                                                               into the incident in November 2009            global oil and gas industry.
                                                                                                                                                           systems and technical standards. In
                                                               and released a report and a draft
                                                                                                             Woodside is committed to open                 2010 we conducted five management
                                                               response in November 2010.
                                                                                                             and honest communication with                 reviews/inspections of our onshore
                                                               The report outlines a broad reform            our stakeholders about our plans              and offshore production facilities.
                                                               agenda for Australia’s offshore petroleum     to manage the risk of a loss of
                                                                                                                                                           In terms of our drilling activities, risks are
                                                               industry. In response, the Australian         containment across our operations.
                                                                                                                                                           identified and mitigation measures are in
                                                               Government intends to establish a single
                                                                                                             We continue to work in partnership            place before we begin drilling and for each
                                                               national regulator, the National Offshore
                                                                                                             with government and our industry              stage of well completion. Woodside’s
                                                               Petroleum Safety and Environmental
                                                                                                             peers to address the risks and impacts        drilling activities are undertaken in
                                                               Management Authority (NOPSEMA) to
                                                                                                             of an oil and gas release through a           accordance with legislative requirements,
                                                               regulate offshore petroleum activities.
                                                                                                             collaborative approach to the prevention      which include the need for oil spill
                                                               In a separate incident, the largest oil       of, preparedness for, response to and         contingency plans, and are approved by
                                                               spill in US history occurred from April       recovery from such emergencies.               relevant government authorities before
                                                               to June 2010 from the Macondo field                                                         commencement. As a minimum, we
                                                               in the Gulf of Mexico. The spill resulted                                                   also seek to comply with all relevant
                                                                                                             Our Strategy                                  environmental legislation and each well
                                                               from an explosion on a drilling rig, in
                                                                                                             Our loss of containment prevention            has an approved Environmental Plan.
                                                               which 11 people lost their lives and 17
                                                                                                             and response strategy in 2010
                                                               others were injured, and triggered an
                                                                                                             focused on the following areas:               A two barrier standard applies to all
                                                               unprecedented response program across
                                                                                                                                                           Woodside-operated drilling operations,
                                                               four US states. Hydrocarbons flowed           ƒ   Enhancement of our prevention,
                                                                                                                                                           which ensures there are at least two
                                                               from the reservoir for 87 days until the          preparedness, response and
                                                                                                                                                           tested barriers in place at any time to
                                                               wellhead was successfully capped.                 recovery measures;
                                                                                                                                                           prevent reservoir fluids flowing to the
                                                                                                             ƒ   Open and honest communication             external environment. A barrier is a
                                                                                                                 with stakeholders; and                    verified and independent mechanism,
                                                                                                                                                           which prevents fluid flow and pressure
                                                                                                             ƒ   Working in partnership with               transmission from one location in a
                                                                                                                 government and industry.                  well to another. A barrier can be a
                                                                                                                                                           combination of drilling mud, cement,
                                                                                                                                                           packers or blow out preventers.

                                                                                                                                                           We regularly inspect and audit drilling
                                                                                                                                                           rigs under contract to Woodside
                                                                                                                                                           to ensure compliance with our
                                                                                                                                                           management systems and technical
                                                                                                                                                           standards. We conducted eight
                                                                                                                                                           inspections and audits in 2010.

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               Woodside conducted two oil spill response crisis management training exercises in 2010.

           Woodside has also undertaken                  Throughout 2010, Woodside was                   In the Gulf of Mexico, we are working
           several actions in 2010 to ensure             represented at APPEA and on its                 with US Government authorities on the

                                                                                                                                                       Woodside | 2010 Annual Report
                                                                                                                                                       Woodside | material issue
           our current systems and processes             Oil Spill Task Force, which is driving          best way to progress exploration activities
           remain robust, including:                     improvements across the industry.               in the region post the Macondo incident.
                                                         We also held a number of briefing
           ƒ    An independent review of our             sessions with the Western Australian            Woodside is participating in the Helix
                management systems and                   and Australian Governments                      consortium in the Gulf of Mexico, which
                technical standards for drilling         outlining Woodside’s emergency                  comprises 23 oil and gas companies.
                wells and well control manuals;          and crisis management capabilities              The consortium is progressing the
                                                         and our activities in 2010.                     Helix subsea containment solution
           ƒ    A review of competency                                                                   to have well containment equipment
                standards for critical positions;        Woodside is one of nine participant             on standby in the region.
                                                         companies that finance the activities
           ƒ    An inspection of blow out preventers                                                     Woodside is also participating in a US
                                                         of the Australian Marine Oil Spill
                on all Woodside-operated rigs; and                                                       industry consortium developing binding
                                                         Centre (AMOSC), which deploys oil
                                                         spill response equipment on 24-hour             agreements to share rigs and other
           ƒ    A check to confirm that blow out
                                                         stand-by around Australia. AMOSC                resources in the event of an oil spill.
                preventer functions on all Woodside-
                operated rigs can be operated by         equipment stockpiles are located
                remotely operated vehicles.              in Geelong, Dampier, Exmouth and                Assurance
                                                         Broome. In 2010, AMOSC agreed to                Woodside’s executive management
                                                         increase the number of industry core            team is accountable for preventing
           Woodside also conducted an internal
                                                         personnel from 42 to 84. In addition,           loss of containment incidents and our
           audit of its systems and processes in
                                                         Woodside employs a number of                    response commitment and strategy.
           the event of a loss of containment. We
                                                         experienced people trained by AMOSC.
           have our own oil spill recovery equipment
                                                                                                         We report our environmental, safety
           in the regions where we operate.              Woodside conducted two oil spill                and integrity performance to our
                                                         response crisis management training             executive management team and
           Open and honest communication
                                                         exercises in 2010. In November,                 the Board on a quarterly basis.
           with stakeholders
                                                         Woodside participated in a three-
           Woodside held two community                   day combined port oil spill response            Our joint venture participants meet with
           briefings about our preventative and          exercise in Geraldton with the                  us regularly to review our performance
           response measures in Exmouth,                 Western Australian Government. The              as operator and conduct regular audits
           Western Australia in 2010.                    exercise provided Woodside with the             of our systems and processes.
                                                         opportunity to improve how industry
           We also briefed our joint venture             can best work with government                   There is a company-wide internal
           participants and the Western Australian       bodies in the event of an oil spill.            assurance process that reviews
           and Australian Government regulators.                                                         our compliance with the Woodside
                                                         Within the Browse Basin, Woodside,              Management System. We are
           Working in partnership with                   along with other industry partners, has         also subject to external audits
           government and industry                       initiated a project to map the broad            by relevant authorities such as
           Woodside is currently reviewing the           distribution and sensitivities of natural       NOPSEMA who visit our offshore
           Montara Inquiry Report and draft              ecosystems, and develop a series of             facilities and rigs twice a year.
           Australian Government response.               scientifically robust, reactive monitoring
                                                         programs that can be implemented in
           We are also working with the                  the unlikely event of a major oil spill.
           Australian Petroleum Production and
           Exploration Association (APPEA) to
           progress an industry response to the
           recommendations in the report.

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                                                                                                                                                                     Business Principles

                                                               SOCIAL – PEOPLE                                                                                             We Respect People

                                                               Woodside’s ability to create sustainable shareholder wealth depends
                                                               on our ability to attract and retain an engaged, capable and highly
                                                               motivated workforce.
                                                               Our Business Context                              provide a climate where all employees,        Employee retention continues to be a
                                                                                                                 irrespective of their background,             highlight with a low level of turnover in
                                                               Woodside continues to focus on                    can perform to their full potential.          2010 resulting in an annualised voluntary
                                                               improving its foundation business while                                                         turnover of 5.4%. The turnover level
                                                               also delivering long-term growth in               Woodside’s Diversity Policy further           has been trending down since 2007,
            34                                                 shareholder value through development             underpins this commitment by ensuring         when it reached a peak of 11.2%.
                                                               of its Australian LNG portfolio through a         Woodside recruits and manages on the          This was a pleasing outcome in light
                                                               competent and engaged workforce.                  basis of competence and performance           of a competitive labour market both
Woodside Petroleum Ltd | 2010 sustainable development report

                                                                                                                 regardless of age, nationality, race,         domestically and internationally.
                                                               Availability of skilled labour over the next      gender, religious beliefs, sexuality,
                                                               five to ten years will be a key challenge         physical ability or cultural background.      The 94.6% retention rate was assisted
                                                               for Woodside and other resources                                                                by the employee equity plan that
                                                               companies operating in Australia.                 Woodside’s human resources strategy           was implemented in 2009. Further
                                                               This shortage will be compounded                  consists of four focus areas, which are       investment in Woodside’s career
                                                               by the significant number of resource             aligned to Woodside’s business strategy:      development processes continued in
                                                               development projects entering a                                                                 2010. This resulted in a greater focus
                                                                                                                 ƒ Attraction and retention;
                                                               construction phase over the coming                                                              on skillpool management, simplification
                                                               years.                                            ƒ People capability;                          of the performance management
                                                                                                                 ƒ Leadership and climate; and                 system and greater opportunities
                                                               Woodside are working with the Western                                                           for peer participation in organisation-
                                                               Australian and Australian Governments             ƒ Business processes.                         wide improvement projects.
                                                               to assess a range of viable solutions to
                                                               address the increasing demand for skilled         2010 Performance in Detail                    Woodside is committed to obtaining
                                                               labour to support the oil and gas industry                                                      regular feedback from its employees
                                                                                                                 Attraction and retention
                                                               in an increasingly competitive labour                                                           and taking action to address any
                                                               market. Developing and maintaining                The Woodside workforce grew to 3,650          concerns. Action plans following the
                                                               a diverse workforce, including greater            in 2010, representing a 13.4% increase        last employee engagement survey in
                                                               participation by women and Indigenous             from 2009.                                    2008 continued to be implemented
                                                               Australians, will be essential to meet                                                          throughout 2010 to improve employee
                                                                                                                 A number of activities were undertaken
                                                               future labour requirements.                                                                     engagement and satisfaction. The
                                                                                                                 in 2010 to ensure that Woodside
                                                                                                                                                               last survey resulted in feedback on a
                                                               Our Approach                                      remained appropriately positioned
                                                                                                                                                               range of topics, including improvement
                                                                                                                 in the marketplace to attract key
                                                               Woodside recognises that creating                                                               opportunities in the areas of leadership,
                                                                                                                 talent. This included launching a
                                                               sustainable shareholder wealth will                                                             health and safety, middle management
                                                                                                                 new careers website, re-branding of
                                                               depend on its ability to attract and retain                                                     engagement and people development.
                                                                                                                 Woodside’s recruitment advertising
                                                               an engaged, highly skilled and highly                                                           The next employee engagement
                                                                                                                 and targeted domestic and international
                                                               motivated workforce. We continue to                                                             survey will be undertaken in 2011.
                                                                                                                 recruitment campaigns.
                                                               succeed in this area, evidenced through
                                                               a record number of new employees in                                                             Resulting from the last employee survey,
                                                                                                                 These activities led to 682 new
                                                               2010 and an enviably low attrition rate.                                                        middle management engagement was
                                                                                                                 employees joining Woodside to support
                                                                                                                                                               a key priority. Subsequently we have
                                                                                                                 our growing portfolio of opportunities. The
                                                                                                                                                               established a middle management forum,
                                                               Our Strategy                                      majority of these new employees were
                                                                                                                                                               supported by an executive management
                                                               Woodside is committed to treating                 recruited into Woodside’s Production,
                                                                                                                                                               team member, to identify and resolve
                                                               its people with care and respect. This            Projects and Development divisions, with
                                                                                                                                                               issues and have a constructive impact
                                                               commitment forms part of our core                 female recruits representing 26.6%.
                                                                                                                                                               on organisational performance.
                                                               values, and in turn, ensures that we

                                                               PERFORMANCE SUMMARY
                                                                       INDIGENOUS                             PARTICIPATION IN                 APPRENTICES                     % OF WOMEN
                                                                       PEOPLE DIRECTLY                        FLEXIBLE WORK                    AND TRAINEES                    IN THE WOODSIDE
                                                                       EMPLOYED                               ARRANGEMENTS                     IN THE                          WORKFORCE

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           Our Targets
               2010 Actions                                    2010 Outcomes                2011 Targets

                                                               Action plans developed
               Continue to monitor employee engagement                                      Conduct employee engagement survey
                                                               and implemented

               Review programs to support talent
                                                               Actions completed            Roll out program across all businesses
               attraction and retention

               Continue to improve gender and                  Strategy agreed and
                                                                                            Roll out diversity plans across all businesses
               Indigenous participation                        implemented

               Simplify the performance                        System improvements          Provide coaching and feedback to drive
               management system                               completed                    behaviours and performance culture

           Initiatives such as this provide the           ƒ   Career Conversations assists our          During 2010 more than 52 production
           opportunity for Woodside to engage and             leaders to broaden development            technician trainees and in excess of
           retain quality individuals and provide a           discussions to include experiential       48 apprentices received the majority
           unique and engaging work environment.              learning, on the job development,         of their training through this approach.
                                                              mentoring, coaching and cross-            These trainees and apprentices are
           Leadership and climate                             functional opportunities in addition      an important part of our ‘grow our               35
           In late 2005, Woodside introduced an               to a training event or program.           own’ capability, ensuring a constant
           organisational improvement strategy                                                          supply of new technical talent

                                                                                                                                                         Woodside | people
           designed to provide leaders with the           Technical skills development                  into our operations facilities.
           appropriate skills to improve the climate      The continued development and skills
           experienced by their employees. The            enhancement of our employees is critical      The focus of the training is largely
           Leadership for High Performance program        to our long-term success. Woodside            technical to ensure Woodside has the
           is well established within the organisation,   invested approximately A$20 million           right skills to operate and maintain
           and develops and improves leadership           in the learning and development of its        our LNG processing plants within the
           competencies through regular formal            people in 2010. Woodside’s approach is        technical integrity envelope. The training
           and informal feedback. In 2010, a further      supported by a competency framework           ensures our technicians can perform
           196 leaders completed the leadership           that addresses core, leadership               their roles in accordance with our license
           program, taking the total attendees            and technical competencies.                   to operate and safety case obligations.
           to 1,103 since inception in 2005.
                                                          Woodside skillpools have been in              Woodside had a total of 130 trainees
           To complement the Leadership for               operation for a number of years, with         and apprentices participating in
           High Performance program, a suite of           skillpool managers being accountable for      programs throughout 2010.
           supporting programs was developed              managing the technical development
           and is available through Woodside’s            of our employees.
           Management Curriculum.
                                                          Skillpools manage the development
           The leadership development programs            curricula, which have traditionally been
           are designed to:                               more focused on training activities such
                                                          as formal courses. In 2010 this approach
           ƒ    Create an organisational climate that
                                                          was broadened to include a variety of
                attracts and retains the best people;
                                                          development opportunities such as cross-
           ƒ    Develop a culture of high                 functional temporary assignments, project
                performance; and                          rotations and on-the-job development.

           ƒ    Equip the business to sustainably and     Trainees and apprentices
                profitably achieve its growth strategy.   In 2010, the Production Function
                                                          introduced a single integrated training
           Complementary programs have been               framework across the division. This
           introduced to develop or enhance skills        approach delivers training capability
           in a more focused way and include:             across the onshore and offshore team,
                                                          which has increased Woodside’s capacity
           ƒ    Feedback Conversations for High           to offer traineeships for both Karratha
                Performance enable line managers          residential and fly-in fly-out employees.
                to have effective and regular
                performance discussions; and

                      OUR FOCUS Woodside is committed to treating its                                                            IAN MASSON
                                                                                                                                  Vice President
                      people with care and respect. This commitment forms
                                                                                                                               Human Resources
                      part of our core values, and in turn, ensures that we
                      provide a climate where all employees, irrespective of
                      their background, can perform to their full potential.

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                                                               Graduates                                        Woodside understands that an important       places in the program. This has a
                                                               Despite a challenging operating                  element in achieving more equitable          positive impact on the attraction and
                                                               environment following the global financial       participation is the provision of flexible   retention of Indigenous Australians
                                                               crisis, Woodside continued to invest in          working arrangements. Highlights in          through a mutual understanding of both
                                                               our long-standing graduate development           2010 included an 11.3% increase in           Indigenous and Western cultures.
                                                               program. We recognise that this program          female take up of part-time employment,
                                                                                                                a 39% increase in take up of additional      Business processes
                                                               is pivotal in ensuring a pipeline of talent
                                                               for the future. In 2010, 43 new employees        annual leave and a 90.5% return from         Woodside took a significant step to
                                                               entered the graduate development                 maternity leave. Woodside is also            improve the career development of
                                                               program; with a total of 135 people              pleased to have 4.5% of men accessing        its people in 2010, with approval to
                                                               participating in the three-year program          at least one of its flexible work options.   invest in a corporate-wide Learning
                                                               across all areas of Woodside’s business.         Woodside was proud to have its efforts       Management System (LMS). The
                                                                                                                recognised through the Chamber               LMS will be implemented in mid-2011
                                                               Diversity                                        of Minerals and Energy Award for             and will demonstrate compliance
                                                               Woodside embraces diversity in the               Flexible Work and Support Initiatives.       with regulated role requirements and
                                                               broadest sense and welcomes the                                                               improve competency management
                                                                                                                Indigenous                                   to develop our internal workforce.
                                                               different ideas, thoughts, and experiences
                                                               of all employees. We continue to                 Woodside was pleased to meet, and in
                                                                                                                some instances exceed, its Reconciliation                       For further information on our
            36                                                 recognise the value that a talented and
                                                                                                                Action Plan commitments in 2010                                 social performance indicators,
                                                               diverse culture brings to our business
                                                                                                                through a continued focus on Indigenous                         please see page 54.
                                                               planning and decision making. In 2010
Woodside Petroleum Ltd | 2010 sustainable development report

                                                               Woodside piloted the ‘Leading Diverse            participation; specifically the aspiration
                                                               Teams’ program with its executive team           to triple the number of permanent                                   Number of employees and
                                                               and will launch this program in 2011. It         employees by the end of 2012.                                          voluntary turnover
                                                               is intended that all employees holding
                                                                                                                In 2010 Woodside directly employed 53                                             11.2
                                                               a leadership position will attend this
                                                                                                                Indigenous people compared to 36 in                                 10.1
                                                               program over the next three years.

                                                                                                                                                                                                                                                 Voluntary turnover ratio (%)
                                                                                                                2009, representing a 47.2% increase.                                                              9.0

                                                                                                                Woodside had 49 people on Indigenous
                                                                                                                                                                 Total employees
                                                               A formal mentoring program was also
                                                                                                                Employment Pathways compared to 33                                                                           5.2           5.4
                                                               designed in 2010 to support our high
                                                               talent employees. The program will               in 2009, representing a 48.5% increase.
                                                               be rolled out throughout the business



                                                                                                                Additionally, Woodside had 128
                                                               in 2011 to broaden our employees’
                                                                                                                Indigenous people working for
                                                               understanding of the industry and
                                                                                                                construction contractors, a decrease                                 06           07        08           09           10
                                                               varying career experiences that exist.
                                                                                                                compared to 2009 but within expectation
                                                               Gender                                           as construction activities continue to
                                                                                                                reduce at the Pluto LNG Project.                                        Indigenous workforce
                                                               With specific reference to women in the
                                                               workplace, in 2010 women represented             An Indigenous woman was appointed
                                                               26.4% of Woodside’s workforce, a 1%              to Woodside’s Roebourne office to
                                                               decrease from 2009. Of the 682 new               further enhance Woodside’s relationship
                                                               employees hired in 2010, 26.6% were              with the Roebourne community,
                                                               female with most women working                   and in particular to provide a greater
                                                                                                                                                              Total employees

                                                               in technical, supervisory/professional           opportunity for local women to engage
                                                               and administration roles, increasing             Woodside. The Roebourne office opened
                                                               our total number of female employees             in 2007 and remains the only office                                          74
                                                               from 878 in 2009 to 962 in 2010.                                                                                                                                       49
                                                                                                                representing the industry in Roebourne.                                                   28            33
                                                               Although Woodside has a similar or                                                                                            29           32            36            53
                                                                                                                A highlight in 2010 was the enthusiasm
                                                               higher female percentage than most                                                                                            07           08            09            10
                                                                                                                of our employees to learn more about
                                                               of its oil and gas industry peers, we            Indigenous Australian culture. Our                                  Employees (permanent / fixed term)
                                                               recognise the need to more effectively           Reconciliation Action Plan set a target                             Pathways
                                                               promote the opportunities we can                 of 120 employees to undertake cultural                              Contractors construction
                                                               provide to encourage more women to               awareness training in 2010. At year
                                                               participate at all levels of our organisation.   end, 422 had completed the training,
                                                                                                                with considerable demand for future

                                                                2010 workforce gender profile                       Female                Female %                                 Male                                   Male%
                                                                Administration                                        260                    59.1                                  180                                        40.9
                                                                Technical                                             318                    24.2                                  996                                        75.8
                                                                Supervisory / professional                            319                    25.3                                  942                                        74.7
                                                                Middle management                                     62                     10.4                                  533                                        89.6
                                                                Senior-management                                      3                     7.5                                    37                                        92.5
                                                                Total                                                 962                    26.4                                  2,688                                      73.6
                                                                Board members                                          1                      11                                    8                                            89

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                                                                                                                                                        Woodside | people
           Securing our future workforce will be essential for supporting our
           foundation business and building LNG growth. It’s clear that we need
           to grow our own.
           – Justin Seal, Senior Human Resources Manager Production

           Production Training Academy
           Over the next five years more than 300         The aim of the Academy is to eliminate       experienced technicians. As a result, we
           technicians will be needed to support          any vulnerability in the skills shortage     can actively target a diverse workforce.
           existing operations at Karratha, planned       by providing 70% of the technician           Of the 2010 intake of trainees at the
           expansions and new LNG opportunities.          requirements for our Production              Academy, 32% were Indigenous.
                                                          Division, both onshore and offshore.
           It is imperative these people have                                                          A workforce with this kind of training
           the right capabilities and values,             Academy courses on offer include             offers a powerful competitive
           as well as actively contributing to            production technician, instrument            advantage. In-house experts working
           the diversity of the workforce.                electrician technician, communications,      with trainees in a structured learning
                                                          Mirnuwarnigu Yirdiya (MY) program,           environment and with access to plant
           In response Woodside has created its           maintenance technician, and operator         and equipment allows the teaching
           own ‘learning university’ by conceiving        competency assurance. The MY                 of valuable and necessary skills to a
           and establishing the Woodside                  traineeship program was established          new generation of future workers.
           Production Training Academy.                   in 2009 and is providing access to
                                                          training and employment opportunities        Technicians trained to the company’s
           The Training Academy opened in                                                              high standards, providing parity in
                                                          for Indigenous people. Mirnuwarnigu
           February 2010 and with almost a full                                                        processes and systems, are a valuable
                                                          Yirdiya means ‘learning road’ in
           year behind it, has supplied a capable,                                                     asset. They also ensure we have
                                                          the local Ngarluma language.
           committed and diverse workforce to                                                          competent people for critical positions.
           sustain production operations for the          Potential candidates are identified
           future. The 12 trainers have already           through a rigorous selection process and     The Training Academy has centralised
           put 31 students through their paces.           are provided training and development        the company’s training programs and
                                                          support on their path to becoming oil        standardisation approach and has brought
           Located in the newly refurbished                                                            together a strong, organised team of
                                                          and gas technicians. This also offers
           Karratha Gas Plant at our North West                                                        maintenance and operational technical
                                                          a quality outcome for Woodside.
           Shelf Project operations, the Training                                                      experts with oil and gas backgrounds, all
           Academy is unique amongst oil and              The comprehensive training program           working together to build and maintain
           gas producers in Australia, based on           allows us to select people from the          employee capability and competence.
           the extent of its training program.            wider community and not just recruit

           The Production Training Academy is providing hands-on training.

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                                                                                                                                                                Business Principles

                                                                                                                                                                     We Respect People
                                                                                                                                                                     We Involve Stakeholders
                                                                                                                                                                     We Contribute to the Sustainability
                                                                                                                                                                     of Our Communities

                                                               SOCIAL – COMMUNITY                                                                                    We Value Culture and Heritage

                                                               Long-term and meaningful relationships with the communities where
                                                               we operate are fundamental to our business.
                                                               Our Business Context                          Our Approach                                Measures were put in place to manage
                                                               Woodside has a presence in a number           Woodside recognises that long-              impacts in Karratha arising during
                                                               of communities in Australia and               term and meaningful relationships           the construction phase. These plans
            38                                                 internationally.  See page 5.                 with the communities where                  remained in place in 2010 as the Pluto
                                                                                                             we operate are fundamental to               LNG Project neared completion.
                                                               Our head office is located in Perth, the
Woodside Petroleum Ltd | 2010 sustainable development report

                                                                                                             maintaining our licence to operate.
                                                               capital of Western Australia. Our other                                                   Examples of the measures included
                                                               major operational centre is Karratha,         We seek to achieve these relationships      designing the footprint of the Pluto LNG
                                                               home to the North West Shelf and Pluto        by understanding and managing               Plant to minimise impact to Indigenous
                                                               LNG Projects, where we have offices in        the impacts we may have on our              rock art, construction of Gap Ridge Village
                                                               the towns of Karratha and Roebourne.          communities and through the                 to accommodate construction workers
                                                                                                             development and implementation of           and provision of medical services on site.
                                                               We also operate three oil assets              programs that deliver mutual benefits.
                                                               off the coast of Exmouth, which                                                           Of the original A$12 billion budget at
                                                               connects us to this community.                                                            project sanction, we expect at project
                                                                                                             Our Strategy                                completion about 55% or A$6.6 billion
                                                               We have offices in Broome, Western            Our community relations strategy            to have been invested in Australian
                                                               Australia and Dili in Timor-Leste to          has three focus areas that are aligned      contracts.
                                                               provide community liaison opportunities       with our business strategy:
                                                               for our Browse and Sunrise LNG                                                            The construction workforce, most of
                                                               Developments. We also have a US               Social impacts                              which operates on a fly-in fly-out basis,
                                                               office in Houston to support our                                                          peaked at about 4,000 people. Many of
                                                                                                             ƒ   Providing a consistent and strategic
                                                               activities in the Gulf of Mexico.                                                         these workers came from other areas in
                                                                                                                 approach to understanding and
                                                                                                                                                         Australia, supporting the commencement
                                                                                                                 mitigating negative social impacts
                                                               The scale and intensity of resource                                                       of new trans-Australian commercial
                                                                                                                 and creating positive social impacts;
                                                               development in Western Australia has                                                      air services to and from Karratha.
                                                               impacted on regional communities such         Stakeholder engagement
                                                               as Karratha, including the cost of living                                                 The effectiveness of our LNG Project
                                                                                                             ƒ   Creating stakeholder relationships      social impact management activities
                                                               and provision of community services.              outside issues-based interactions
                                                               Perth has experienced similar impacts                                                     will be reviewed in 2011 as we move
                                                                                                                 to support long-term trust; and         towards the start of production.
                                                               as a result of resource industry growth.
                                                                                                                                                         Lessons learned from Pluto will be
                                                                                                             Social investment
                                                               An upside of this growth has been the                                                     applied for the planned Pluto expansion,
                                                                                                             ƒ   A three-tiered funding approach,        as well as the development of other
                                                               revenue provided to government by way
                                                                                                                 with the majority of funds              greenfield projects, particularly the
                                                               of taxes and royalties, which are being
                                                                                                                 invested in regional programs.          Browse LNG Development.
                                                               used to provide social infrastructure
                                                               in urban and regional areas.
                                                                                                             2010 Performance in Detail                  The Western Australian Government
                                                               Companies such as Woodside also                                                           is seeking to develop the Browse LNG
                                                                                                             Social impact
                                                               provide additional funding to manage                                                      Precinct at James Price Point, about
                                                                                                             Social impact activities in 2010 included   60 km north of Broome, with capacity
                                                               social impacts arising from business
                                                                                                             initiatives to support our Pluto LNG        for LNG processing and shipping facilities
                                                               activities, as well as voluntary
                                                                                                             Project and Browse LNG Development.         for at least two LNG proponents. Our
                                                               contributions to worthwhile community
                                                               initiatives.                                                                              Browse LNG Development is intended to
                                                                                                             In 2007 we undertook a social
                                                                                                                                                         be the foundation project for this Precinct.
                                                                                                             impact assessment for the Pluto LNG
                                                                                                             Project, which started construction in
                                                                                                             November 2007.

                                                               PERFORMANCE SUMMARY
                                                                       SUCCESSFUL                          BENCHMARK                     APPOINTMENT                      IMPROVED
                                                                       IMPLEMENTATION                      EMPLOYEE                      OF FIRST TIER                    STAKEHOLDER
                                                                       OF SOCIAL                           VOLUNTEERING                  ONE COMMUNITY                    ENGAGEMENT
                                                                       INVESTMENT                                                        PARTNER

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           Our Targets
            2010 Actions                                     Status                        2011 Targets

            Appoint first Tier One partner – Surf Life
                                                              Completed                     Appoint second Tier One partner
            Saving national program for sun protection

                                                                                            Ensure compliance of social investment
            Develop standards for social impacts, social
                                                              Ongoing                       and stakeholder engagement standards
            investments and stakeholder engagement
                                                                                            and finalise social impact standard

           In December 2010 the Western Australian       Australian Government approval of             A final investment decision is expected by
           Government released reports on its            the Western Australian Government’s           the Browse Joint Venture by mid-2012.
           social impact studies, anticipating the       Browse LNG Precinct is expected in 2011.
           impacts arising from the development of                                                         Further details about Woodside’s
           the Browse LNG Precinct. The studies             For further information on the Browse          selection of the Browse LNG Precinct as
                                                            LNG Precinct please visit                      its preferred processing site can be found
           focused on a range of scenarios, ranging
                                                                     on page 14.
           from no development of the Browse
           LNG Precinct to high development              In 2010, Woodside commissioned a              In 2010, we initiated development of             39
           (50Mtpa LNG Precinct within 30 years).        social impact assessment, specific to its     a social impact standard to provide a
                                                         Browse LNG Development, with baseline         consistent approach across our business,

                                                                                                                                                        Woodside | community
           The Western Australian Government
                                                         studies commencing in October 2010.           with defined accountabilities and
           report noted that Broome is expected
           to undergo significant natural population                                                   expectations of our staff and contractors.
                                                         This assessment follows the Western
           growth over the next 30 years,                Australian Government program of              The standard will be finalised and rolled
           independent of any direct or indirect         social, environmental, Native Title           out across the business in 2011.
           population increase attributable to the       and Indigenous heritage studies to
           development and operation of the Browse       support the development of its Browse         Stakeholder engagement
           LNG Precinct. Broome’s natural growth is      LNG Precinct in the Kimberley.                In 2010 our stakeholder engagement
           projected to increase by 84% from 17,100
                                                                                                       activities were focused on supporting
           people in 2011 to 31,400 people in 2041.      Woodside’s assessment will include
                                                                                                       our existing operations, projects under
                                                         consultation with local stakeholders,
           Given that many social services and                                                         construction and developments.
                                                         seeking their views on the current
           facilities within the Shire of Broome         status of key social issues in the
           are currently experiencing significant        community, what they perceive are the
           demands on resources and are                  key areas of potential impact and how
           vulnerable to any increase in demand,         those impacts should be managed.
           attention will need to be given to the
           provision of services and facilities to       The assessment team will consult with
           support the natural population increase       a broad cross-section of the community,
           over the next 30 years. Existing              including recreation groups, community
           community pressures include land for          and health organisations, Indigenous
           housing, health services, police and          people, local businesses and government.
           justice and community wellbeing.              In addition, a local Community Advisory
                                                         Committee has been established to
           The report concluded that the potential       provide advice on the social impact
           Browse LNG Precinct-related population        assessment process and to review
           increase is relatively manageable in          the community engagement plan.
           comparison to Broome’s projected
           natural population growth. A separate         A further community engagement
           Western Australian Government                 strategy will be developed once the
           report recommended strategies                 assessment report is complete to
           for mitigating and managing these             ensure the local community is involved
           impacts and maximising opportunities          in ongoing implementation and
           for local community benefit.                  monitoring of management strategies.
                                                         Final reports are expected in 2011.

                    OUR FOCUS We seek to understand and                                                                         TINA THOMAS
                                                                                                                           Senior Vice President
                    manage the impacts we may have on our
                    communities, and develop and implement programs
                    that deliver mutual benefits.

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                                                               Engagements in 2010 were typically            In 2010 we formalised a three-tiered                Woodside social investment
                                                               with government regulators to support         approach to social investment funding.                  by category 2010
                                                               approvals, community and Indigenous           Typically, Tier One partners are national
                                                               representatives and near neighbours           and iconic, Tier Two partners cover
                                                               to our facilities on planned activities,      multiple geographic areas in Western
                                                               non-government organisations on               Australia and Tier Three partners are
                                                               environmental and social impacts,             local organisations where we operate.
                                                               special interest groups on community
                                                               partnerships, customers on supply             Woodside’s social investment strategy                       37%
                                                               commitments, and suppliers on                 provides for three Tier One partners,
                                                               participation opportunities.                  with the majority of our social investment
                                                                                                             expenditure focusing on Tier Two and Tier
                                                               We were also active in local, state           Three program partners which benefit
                                                                                                                                                                             Living energy
                                                               and national forums on a range of             Perth and the regional communities in                           Creative energy
                                                               issues affecting the sustainability           Western Australia in which we operate.                          Natural energy

                                                               of the oil and gas industry.
                                                                                                             In 2010 we announced the appointment
                                                               Examples of these engagements are             of our first Tier One partner in the area
                                                                                                                                                                 Woodside social investment
                                                               highlighted in the Our Stakeholder            of Living Energy – Surf Life Saving,
            40                                                                                                                                                        by region 2010
                                                               Table.    See page 12.                        Australia’s major water safety, drowning
                                                                                                             prevention and rescue authority.
Woodside Petroleum Ltd | 2010 sustainable development report

                                                               In 2010 we developed and rolled                                                                   1%          14%
                                                               out across the company an external            Surf Life Saving is an active part of              3%
                                                               stakeholder engagement standard to            Australian local communities and is
                                                               provide consistency in this area.             the largest volunteer movement of its
                                                                                                                                                                     18%                  64%
                                                                                                             kind in Australia. It is a not-for-profit
                                                               Social investment                             movement that exists only through
                                                               In 2010 Woodside continued to                 community donations, fundraising
                                                               develop its social investment program,        and corporate sponsorship.
                                                               focusing on three key themes:
                                                                                                             Woodside’s partnership with Surf Life                     WA                   International
                                                               ƒ    Living Energy – personal
                                                                                                             Saving supports a national program                        Pilbara              National
                                                                    health and wellbeing;                                                                              Kimberley
                                                                                                             focused on sun protection. We see many
                                                               ƒ    Natural Energy – environmental           similarities between Woodside and            Note: Western Australia includes social investment
                                                                                                                                                          programs which were implemented in two or more
                                                                    health and wellbeing; and                Surf Life Saving as Australian entities,     state locations.
                                                                                                             coastal operating environments, the
                                                               ƒ    Creative Energy – community              dedication of our people wanting to               For further information on our
                                                                                                             become involved in the community and              community performance indicators,
                                                                    health and wellbeing.
                                                                                                                                                               please see page 55.
                                                                                                             common values of safety and wellbeing.
                                                               Our investment across these areas
                                                               is captured by way of cash, time              In 2011 we will announce our
                                                               and in-kind contributions, using the          second Tier One partner, this being          Timor-Leste social investment
                                                               London Benchmarking Group (LBG)               in the area of Natural Energy.               Woodside and its Sunrise Joint Venture
                                                               methodology. Investments in these                                                          participants are committed to contributing
                                                               areas are over and above those that           Employee participation in and                to the social development of Timor-Leste.
                                                               result from mandatory contributions,          support of partnership activities is a       In 2010, as in previous years, the Joint
                                                               including programs that are essential to      hallmark of Woodside culture. In 2010        Venture worked closely with several
                                                               our business such as publicly available       Woodside employees donated more              organisations to deliver a range of social
                                                               research and contractual obligations.         than A$192,600 of their own money            investment projects in Timor-Leste.
                                                                                                             to 36 not-for-profit organisations.
                                                               Woodside’s equity-only social investment                                                   The focus of these initiatives was to
                                                               in 2010 was A$4.9 million. Our total social   Our employees also contributed               deliver sustainable positive benefits to
                                                               investment, inclusive of management           4,261 volunteering hours. The value          the health and education of the Timorese.
                                                               costs, in 2010 was A$8.7 million. This        of this was A$151,050. All Woodside          These projects included the role as key
                                                               is slightly lower than A$9.2 million in       employees are entitled to 12 hours           sponsor for World Vision’s Water for
                                                               2009 as a result of a strategy to reduce      paid volunteering leave per year.            Life program, the Alola Foundation’s
                                                               the number of corporate community                                                          Maternity Packs and Safe Motherhood
                                                                                                             The LBG 2010 benchmarking report             program and Junior Achievement
                                                               partners and invest in programs for longer
                                                                                                             showed that Woodside is a benchmark          Timor-Leste which provides educational
                                                                                                             leader in employee volunteering and          resources to teachers and students.
                                                               Woodside’s 2010 social investment             participation. Our 2009 volunteering rate
                                                                                                             was 13.1% well ahead of our resource         In addition the Joint Venture sponsored
                                                               data was verified by the LBG and will
                                                                                                             sector peers and LBG membership              the Timor-Leste national marathon
                                                               be benchmarked against our peers
                                                                                                             at 8.4% and 5.8% respectively.               squad participating in the inaugural
                                                               throughout Australia and New Zealand
                                                                                                             Woodside’s employee participation rate       Dili Marathon and a Rotary container
                                                               in the LBG’s 2011 Benchmarking
                                                                                                             was 16.7%, well ahead of our resource        of school equipment to Dili.
                                                               Report.     See page 47.
                                                                                                             sector peers and LBG membership
                                                                                                             at 10.5% and 7.2% respectively.

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                                                                                                                                                          Woodside | commuinty
           Surf Life Saving is an iconic Australian organisation that does so much
           for the safety and wellbeing of the many thousands of people who
           enjoy our beaches each year. It’s great to be part of that team.
           - Jo Ferrie, Manager Community Relations

           Surf Life Saving
           Our people at Woodside and                     Our partnership with SLS will provide           Woodside employees in the field have
           Australia’s Surf Lifesavers have a lot         hats, sunscreen and sun protection              received wide brim sun hats or Saturn
           in common – our activities take place          education materials to more than                ring hats to go over hard helmets.
           on the coast, we’re committed to               135,000 volunteer members from                  Sunscreen has also been made
           volunteering, we place a high priority         305 SLS clubs around Australia.                 available at our head office in Perth.
           on safety and we’re very conscious
           about spending time in the sun.                Distribution of all club kits and materials     Education materials, including posters,
                                                          coincided with National Boardies Day            have been distributed at head office,
           That’s why our partnership with Surf           in December 2010. Boardies Day is a             as well as our Karratha and Broome
           Life Saving (SLS) as its national sun          national fundraising event coordinated          town offices, the Karratha Visitor’s
           protection partner is such a great fit.        annually to raise funds for life saving         Centre and the Karratha Gas Plant.
                                                          services throughout Australia.
           Sun protection is an issue that                                                                The sun protection partnership with
           strikes at the very heart of being             Woodside believes that the partnership          SLS is one way we can do our bit to
           Australian, given our love for the             provides an excellent vehicle to                protect the people who generously
           sun, water and being outdoors.                 communicate sun protection messages             volunteer their time to safeguard
                                                          to SLS volunteers, Woodside                     the lives of so many others.
           Australia has one of the highest               employees and the wider community.
           incidences of skin cancer in the world.                                                        Woodside is proud to support such an
           Each year skin cancers account for 80%         Internally, communications are                  iconic Australian organisation, especially
           of all newly diagnosed cancer. Two in          being coordinated within our Health,            one which is Australian for life.
           three Australians will be diagnosed with       Safety and Security Division.
           skin cancer by the time they are 70.

             Sun protection for Surf Lifesaver on duty.

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                                                               MATERIAL ISSUE
                                                               Woodside’s delivery on its Reconciliation Action Plan commitments

                                                               In 2009 Woodside launched its Reconciliation Action Plan (RAP) outlining public commitments towards
                                                               helping to close the life expectancy gap between Indigenous and other Australians. The RAP provides a
                                                               framework for Woodside’s initiatives and commitments to Indigenous individuals and communities, articulates
                                                               clear actions and realistic targets and makes a public declaration of our strong intent to deliver.

                                                               Context                                     In 2009 Woodside developed a                  Our Strategy
                                                               Woodside, like many resource                Reconciliation Action Plan (RAP) to help      Woodside’s Indigenous Affairs strategy
                                                               development companies in Australia,         close this life expectancy gap. The RAP       directly correlates with these areas by:
            42                                                                                             articulates clear actions, targets, and
                                                               has its operations in regions where the                                                   ƒ    Building respect through our approach
                                                               Indigenous population is proportionally     accountabilities for Woodside to make a
                                                                                                                                                              to cultural heritage management
Woodside Petroleum Ltd | 2010 sustainable development report

                                                               higher than in urbanised areas.             difference within its sphere of influence.
                                                                                                                                                              and Indigenous land access;
                                                               Our North West Shelf Project and Pluto      Our Commitment
                                                                                                                                                         ƒ    Understanding effective stakeholder
                                                               operations are in the Pilbara region        The Woodside RAP covers three key
                                                                                                                                                              engagement is an essential element
                                                               of Western Australia, close to the          areas for making a difference – respect,
                                                                                                                                                              for building relationships; and
                                                               communities of Karratha and Roebourne.      relationships and opportunities. Our
                                                                                                           commitments in these areas are:               ƒ    Creating opportunities through
                                                               Karratha has a permanent population of
                                                                                                                                                              employment, business participation
                                                               about 14,000 people, of which less than     Elevated Respect
                                                                                                                                                              and social investments.
                                                               10% are Indigenous. Roebourne has a         ƒ   Woodside recognises the impacts
                                                               population of close to 1,000 people, with       that displacement and dispossession
                                                               approximately 75% being Indigenous.                                                       2010 Performance
                                                                                                               has had for Indigenous Australians.
                                                                                                               We acknowledge Indigenous people’s        We also publish a report on
                                                               We recognise that the population                                                          our performance actions.
                                                                                                               special connection to country and
                                                               proportion of Indigenous people
                                                                                                               the subsequent responsibility that
                                                               is even greater in the Kimberley                                                          In 2010 Woodside delivered against 26
                                                               region of Western Australia, where              Indigenous people have in caring          of the 28 RAP actions. For highlights of
                                                               Woodside is seeking to locate its               for country. We will encourage
                                                                                                                                                         these achievements,      see page 43.
                                                               Browse LNG Development.                         action where everyone plays their
                                                                                                               part in building a better relationship    Our 2011 – 2014 RAP will be published
                                                               Our head office is in Perth, the                between all Australians. Woodside         during the first quarter of 2011.
                                                               capital city of Western Australia.              will facilitate a range of programs
                                                               Perth has a population of more                  and initiatives that demonstrate our           For further information please visit
                                                               than 1.6 million people, of which               respect for the culture and the special and
                                                               less than 2% are Indigenous.                    contribution of Aboriginal and Torres          Reconciliation Australia
                                                                                                               Strait Islander peoples to Australia.
                                                               These demographics are consistent
                                                               with the Australian landscape, with         Strengthened Relationships                    Assurance
                                                               higher proportions of Indigenous            ƒ   Woodside is committed to
                                                               people in the more remote regions.                                                        Woodside’s Chief Executive Officer is
                                                                                                               establishing and maintaining              accountable for achieving the RAP’s
                                                                                                               relationships with Indigenous             stated outcomes. RAP commitments are
                                                               It is also typical of the Australian
                                                                                                               Australian communities to ensure          also reflected in the annual performance
                                                               landscape that in many of these
                                                                                                               we understand community priorities        agreements of staff directly reporting
                                                               remote areas, Indigenous communities
                                                                                                               and provide opportunities for             to the Chief Executive Officer.
                                                               face significant social and economic
                                                               disadvantages and challenges, such as           involvement in Woodside projects.
                                                               high unemployment, lack of educational                                                    Performance against these outcomes is
                                                                                                           Increased Opportunities                       reported internally on a quarterly basis
                                                               attainment and poor health.
                                                                                                           ƒ   Woodside focuses programs and             to our Indigenous Affairs Lead Team,
                                                               The Roebourne Report, compiled by               resources on the areas that the           the Business Operating Committee
                                                               the Western Australian Government               Indigenous community recognises           and the Chief Executive Officer. The
                                                               Department of Indigenous Affairs in             as important. We will work alongside      Board’s Sustainability Committee also
                                                               July 2009, revealed alarming levels of          the Indigenous community                  receives a performance update annually.
                                                               overcrowding, alcohol abuse, domestic           to provide opportunities that
                                                               violence and child neglect. At a broader        contribute towards the community’s        Our RAP is subject to an annual internal
                                                               community level, Australian Indigenous          aspiration of a sustainable future.       assurance process across our business to
                                                               people have a life expectancy 17 years                                                    ensure compliance with agreed actions.
                                                               less than non-Indigenous Australians.

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             Clontarf Foundation football training at Fremantle Oval in 2010.

           Commitment                                                                                 Key Achievements

           Recognise Traditional Custodians through formal acknowledgements                           Woodside had a welcome to country at the AGM for the first time
           Raise the profile of our Cultural Awareness Training                                       422 Woodside staff attended Cultural Awareness Training in the
                                                                                                      Perth and Pilbara regions
           Pursue the objectives of the Conservation Agreement, empowering Indigenous groups          Two major projects have commenced after successful
           to conduct initiatives that recognise, protect and conserve the National Heritage values   applications
           of the Dampier Peninsula                                                                                                                                           43
           Promote, support and celebrate NAIDOC Week with activities in the areas where we           Support for NAIDOC Week provided in Perth, West Pilbara and
           operate and through promoting events to our employees and community partners               Exmouth regions

                                                                                                                                                                              Woodside | 2010 Annual Report
                                                                                                                                                                              Woodside | material issue
           Promote Noongar culture and relationships to Perth and the South West region of            Woodside was the Indigenous Program Partner for the
           WA through partnering with the Perth International Arts Festival (PIAF) Indigenous         2010 PIAF
           Partner Program
           Create a Reconciliation Interest Group to raise awareness of Indigenous                    The Woodside Reconciliation Interest Group was created and
           community issues                                                                           has 152 members
           Include and display educational materials for the Woodside Indigenous Art Collection       Database of Indigenous art maintained but educative materials
                                                                                                      yet to be developed
           Demonstrate 100% compliance with Woodside heritage protocols and                           No issues of non-compliance raised in 2010
           compliance procedures
           Demonstrate compliance with Indigenous Land-Use Agreements

           Ensure acknowledgement of Indigenous artists through the development of a                  A guideline was developed for the purchase and reproduction of
           Woodside guideline                                                                         Indigenous art
           Utilise our Indigenous Communities Policy to guide the business in building
           long-lasting relationships
           Maintain our Roebourne office as a hub for ongoing dialogue with the local                 An additional Roebourne staff member commenced in 2010
           Indigenous community
           Follow-up on the initial ethnobotanical program with further support in consultation       Final report on the ethnobotanical program was presented to the
           with the local Indigenous group                                                            West Pilbara Indigenous groups in February 2010
           Establish a Woodside Sustainability Advisory Committee with Indigenous representation

           Establish a Woodside Indigenous Employee Collegiate and provide support for identified
           Develop an Indigenous community approach that ensures all Community Liaison Groups
           have Indigenous representation
           Facilitate heritage meetings with West Pilbara Indigenous groups

           Develop a formalised Indigenous community consultation process for Woodside
           social investments
           Utilise the relationship with the Australian Employment Covenant to create                 Woodside has increased the number of directly employed
           further Indigenous employment opportunities with Woodside, our contractors and             Indigenous people by 62% since making the RAP commitment
           other community organisations
           Continue to create employment outcomes through implementing specific Indigenous-           Forty nine Indigenous people participated in Woodside Training
           focused training programs                                                                  Pathways in 2010
           Support Indigenous tertiary students through participation in the National Indigenous      Six Indigenous University students participated on the Woodside
           Cadetship Program                                                                          Cadetship program in 2010
           Support Indigenous enterprise development                                                  Eleven Indigenous businesses throughout the Perth, Pilbara and
                                                                                                      Kimberley regions gained direct Woodside contracts in 2010 and
                                                                                                      a further four gained sub-contract opportunities
           Boost Indigenous education attainment levels through funding school-based initiatives      Woodside provided funding for the Gumala Mirnuwarni program,
                                                                                                      the Clontarf Academy and the Roebourne Breakfast Program in 2010
           Celebrate and showcase Indigenous art and dance                                            More than A$80,000 in art sales was achieved through the
                                                                                                      Roebourne Art exhibition
           Engage Indigenous youth in their communities through supporting community initiatives      Big hART sponsorship commenced in Roebourne during 2010

           Showcase Indigenous community initiatives through support of the Film and Television       In 2010 the Film and Television Institute and Woodside were
           Institute’s Making Movies Roadshow                                                         awarded the Qantaslink Regional Award as part of the Australian
                                                                                                      Business Arts Foundation Awards
           Develop the capacity of Indigenous leaders through supporting their participation in       Two Indigenous Clontarf participants were supported by Woodside
           selected leadership forums                                                                 to attend the National Youth Leadership Forum in Canberra
           Provide guidance and support to the North West Cape Exmouth Aboriginal Corporation         Progress on the Yinigudura Stefano Walk Trail was delayed and
           to develop the Yinigudura Stefano Walk Trail                                               Woodside had limited participation in this initiative for 2010

                                                                                                      Met Targets         Exceeded targets           Did not meet targets

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                                                               AND AWARDS

                                                               External                                         – Wayne Bailey, Exploration and         whereby ‘tube inserts’ originally
                                                               Woodside was presented with a number             Geotechnical Operations; Andrew         designed for an alternate application
                                                               of industry awards in 2010, including:           Murray, Exploration and Geotechnical    were adapted to re-balance the energy
                                                                                                                Operations; Alex Kaiko, North West      distribution across the exchanger.
                                                               ƒ    Australian Government 2009-                 Shelf Project (NWS); Bruce James;
                                                                    2010 National Work/Life Balance             Shane Pelechatey and Jinfeng L; and     Environment – this award recognises
                                                                    Awards-Finalist (mining category);                                                  achievement and commitment
                                                                                                            ƒ   Fire and Emergency Services             to excellence in supplying energy
                                                               ƒ    Australasian Reporting Awards               Authority (FESA) Volunteer              for the future, using resources
            44                                                      - gold award for Woodside’s                 Employer Recognition Award. This        efficiently, and/or minimising
                                                                    2009 Annual Report;                         award recognises the support and        Woodside’s ecological footprint.
Woodside Petroleum Ltd | 2010 sustainable development report

                                                                                                                assistance given by employers to
                                                               ƒ    Australian Information                      staff who are FESA Volunteers.          Winner – Implementation of Environment
                                                                    Industry Association – Best                                                         in Design Principles in the Browse LNG
                                                                    Industrial Application award for                                                    Plant Design – successful implementation
                                                                    SageSURPASS, the software               Internal
                                                                                                                                                        of environment in design principles in the
                                                                    element of Woodside’s Integrated        Woodside’s Sustainable Development          Browse LNG plant design has led to a
                                                                    Safe System of Work (iSSoW);            Awards recognise employees who              step change in Woodside’s environmental
                                                                                                            have made an outstanding contribution       performance and cost savings by
                                                               ƒ    Asia-Pacific Information                to our sustainability as a company,         avoiding late ‘end of pipe’ solutions.
                                                                    Communication Technology                demonstrating excellence and
                                                                    Industry – Merit Award Winner for       commitment to the Business Principles.      Health and Safety – this award recognises
                                                                    iSSoW system and software;                                                          achievement and commitment to
                                                                                                            Each category winner receives A$5,000       improving Woodside’s health and
                                                               ƒ    Chamber of Minerals and Energy          to donate to their nominated charity. The   safety performance and culture.
                                                                    Award for Flexible Work and             overall winner is recognised with the
                                                                    Support Initiatives; and                Woodside Chairman’s Excellence Award        Winner – Permit to Work –The Integrated
                                                                                                            and receives an additional A$10,000 for     Safe System of Work – the system is now
                                                               ƒ    Australian Petroleum Production and     donation. A People’s Choice Award is also   in place on all Woodside’s self-operated
                                                                    Exploration Association (APPEA)         voted by Woodside staff, encouraging        production facilities and has demonstrated
                                                                    – Best Poster Presentation for          peer recognition of team achievements.      a significant decrease in permit-related
                                                                    iSSoW system and software.                                                          safety incidents across all sites.
                                                                                                            In 2010 the Woodside Chairman’s
                                                               Staff who received public recognition        Excellence Award was presented to           Leadership and Capability – this
                                                               for their achievements included:             the NWS LNG 5 Main Cryogenic Heat           award recognises achievement
                                                               ƒ    APPEA – Reg Sprigg Medal                Exchanger Tube Inserts project. The         and commitment to developing an
                                                                    recognising outstanding service         People’s Choice Award was presented         engaging climate of respecting people
                                                                    in promoting the objectives             to Our Safety Culture Journey – North       through communication, development
                                                                    of the industry – Eve Howell,           Rankin 2 Project in Batam Indonesia.        and diversity within Woodside.
                                                                    Health, Safety and Security;
                                                                                                            Economic – this award recognises            Winner – Reconciliation Action Plan
                                                               ƒ    WA Training Awards – WA                 achievement and contribution to             (RAP) – the 2010 RAP has been a
                                                                    Apprentice of the Year - Emerson        Woodside’s financial performance,           catalyst for significant improvements
                                                                    Lievense, Production;                   and/or contribution to local,               in the delivery of Indigenous Affairs
                                                                                                            regional or national economies;             outcomes and is recognised as the first
                                                               ƒ    Chemeca 2010 Conference –                                                           of its kind in the oil and gas industry.
                                                                    Aker Solutions Design prize for         Winner – NWS Condensate Pricing –
                                                                    Curtin University engineering           Woodside instigated a change in the         Sustainable Communities – this
                                                                    project Design of a Natural Gas         way that condensate had been priced         award recognises achievement and
                                                                    Nitrogen Rejection Plant– Catriona      in the region for the past 24 years.        commitment to community development
                                                                    Steeghs, Production Karratha Gas                                                    and capacity building, respecting culture
                                                                                                            Innovation and Technology – this            and heritage, and involving stakeholders.
                                                                    Plant and Kate Shryock, Pluto;
                                                                                                            award recognises achievement
                                                               ƒ    Petroleum Exploration Society of        and contribution to application of          Winner – Karratha Education Initiative
                                                                    Australia – Distinguished lecturer      innovation and technology.                  – this project has targeted strategic
                                                                    – Simon Lang, Exploration and                                                       initiatives to significantly improve the
                                                                                                            Winner – NWS LNG 5 Main Cryogenic           standard of local secondary education
                                                                    Geotechnical Operations;
                                                                                                            Heat Exchanger Tube Inserts – a novel       in Karratha and has resulted in positive
                                                               ƒ    APPEA – Best paper for Unusual          approach to significantly improve           benefits for both Woodside families
                                                                    Reservoir Connectivity at the Sunrise   performance in the Karratha Gas Plant’s     and the broader Karratha community.
                                                                    Field Revealed by Data Integration      LNG 5 Main Cryogenic Heat Exchangers

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                                                                                                                                      Woodside | recognition and awards

             2010 Sustainable Development Award-Chairman’s Excellence trophy.

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                                                               ABOUT THIS REPORT
                                                               About this Report                            Responsiveness                                 We sought and identified leaders in their
                                                               This report is a summary of our approach,    ƒ   An organisation’s response to              respective field representative of our
                                                               actions and performance for the 12-month         stakeholder issues that affect its         stakeholder groups and with expertise in
                                                               period ending 31 December 2010.                  sustainability performance and             the economic, environmental and social
                                                                                                                communication with stakeholders.           areas in which Woodside operates. We
                                                               The text and data in this report covers                                                     believe that external perspectives help
                                                               all sites and production facilities wholly   We have also applied the Global                provide the necessary balance to ensure
                                                               owned by Woodside or operated                Reporting Initiative’s (GRI) G3 guidelines,    our sustainable development reporting is
                                                               by Woodside in a joint venture.              which set out the principles and               focused on the issues that really matter.
                                                               International exploration activities         indicators that organisations can use
                                                               and joint ventures where we are              to measure and report their economic,          The Panel members who participated
                                                               not the operator are excluded.               environment and social performance.            throughout 2010 included:
                                                                                                                                                           ƒ Hon. Richard Court AC - former
                                                               The exceptions to this are our share         Based on the extent of coverage of               Premier of Western Australia;
            46                                                 of production from non-operated joint        the GRI Guidelines Version 3.0 in this
                                                                                                                                                           ƒ Reg Howard-Smith - CEO, Western
                                                               ventures and associated revenues, and        report and our supplementary online
                                                                                                                                                             Australia, Chamber of Minerals and
Woodside Petroleum Ltd | 2010 sustainable development report

                                                               our social investment expenditure, which     index to our disclosures under the
                                                                                                                                                             Energy of Western Australia;
                                                               is reported on an equity basis. We also      GRI, we self-declare that this report
                                                               provide data on our greenhouse gas           complies with Application Level B+.            ƒ Mark Stickells - Chief Executive,
                                                               emissions on an equity share basis.                                                           WA Energy Research Alliance;
                                                                                                                Our supplementary index can be found at    ƒ Mark Moran – Head, Australia
                                                               We report the performance indicators                            Program, World Vision Australia;
                                                               that we consider most material to the                                                       ƒ Dr Wally Cox - Director,
                                                               sustainability of our business. This is      Inclusivity
                                                                                                                                                             The Ardross Group;
                                                               supplemented by additional information       In 2010, Woodside formalised
                                                               and data throughout the report.              its stakeholder engagement                     ƒ Kim Collard - Director,
                                                                                                            activities with the development                  Kooya Consultancy;
                                                               In some instances we have provided           of an External Stakeholder                     ƒ Paul Gamblin - Program Leader
                                                               estimates as it has not been possible to     Engagement Operating Standard.                   - West, World Wildlife Fund;
                                                               accurately measure some performance                                                         ƒ Kim Bridge - Indigenous Consultant;
                                                               areas. These are indicated in the report.    The standard provides consistency
                                                                                                            across our business in the identification      ƒ Andre Garnaut - Head of Sustainability
                                                                                                            of stakeholders and potential issues,            and EcoNomics WA, Worley Parsons;
                                                               Our Approach                                 communication of information about             ƒ Professor Paul Flatau - Director
                                                               Sustainable development is central           proposed business decisions and                  of the UWA Business School
                                                               to the way we operate our business           activities, and provision of opportunities       Centre for Social Impact; and
                                                               and develop new opportunities in an          for stakeholders to have a say about
                                                                                                                                                           ƒ Regina Flugge - Executive
                                                               economically, environmentally and            those decisions or activities.
                                                                                                                                                             Officer Environment and Land
                                                               socially responsible way. We are guided
                                                                                                            While stakeholders will vary from location       Access, Chamber of Minerals and
                                                               by our values and Business Principles,
                                                                                                            to location, we have identified for the          Energy of Western Australia.
                                                               with governance provided by our
                                                                                                            purposes of this report stakeholder
                                                               Woodside Management System.                                                                 Materiality
                                                                                                            groups that are generic to our business.
                                                               In preparing this report, we reflect our                                                    Towards the end of the 2010 reporting
                                                               commitment to the Business Principles,       These stakeholder groups are:                  period, we undertook a materiality
                                                               taking into account our business                                                            assessment to identify our material issues
                                                                                                            ƒ Business participants;
                                                               strategy, how we have gone about our                                                        for reporting purposes in 2010. In our
                                                               business activities, the potential impact    ƒ Customers;                                   view, issues are material if they have the
                                                               of these activities on our communities,      ƒ Employees and contractors;                   potential to impact our ability to achieve
                                                               and the views of our stakeholders on         ƒ Governments (including regulators);          our business strategy or are of concern to
                                                               issues of importance and concern.                                                           our stakeholders.
                                                                                                            ƒ Industry (adjacent to our operations);
                                                               To reflect our approach, we have             ƒ Industry associations;                       Material issues, identified from external
                                                               applied the AA1000 Accountability                                                           sources, were assessed by Woodside
                                                                                                            ƒ Local and Indigenous communities;
                                                               Principles Standard to this report,                                                         staff members representing a broad
                                                               which encompasses Inclusivity,               ƒ Non-government organisations;
                                                                                                                                                           range of expertise across our business.
                                                               Materiality and Responsiveness.              ƒ Shareholders and finance providers;
                                                                                                                                                           These issues were then presented
                                                               Inclusivity                                  ƒ Suppliers; and                               to a number of Panel members for
                                                                                                            ƒ Trade unions.                                consideration and review.
                                                               ƒ    The participation of stakeholders
                                                                    in developing and achieving             Since 2009 we have engaged a                   Woodside staff and selected Panel
                                                                    an accountable and strategic            Sustainable Development Advisory Panel         members voted on the importance
                                                                    response in sustainability.             (the Panel) to provide feedback on our         of the issues for Woodside, with the
                                                                                                            sustainability reporting, including input on   consolidated view resulting in a prioritised
                                                               Materiality                                  issues that were ‘material’ to our business    list of material issues.
                                                               ƒ    The relevance and significance          during the reporting period. The Panel
                                                                    of an issue to an organisation          also assist us to identify sustainability
                                                                    and its stakeholders.                   issues requiring longer term focus.

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               Woodside employees at work in our Perth head office.

           It should be noted that feedback provided        Learning from Assurance                        Woodside respects the rights of our
           to Woodside by Panel members does                In 2009 we engaged Ernst &                     employees and contractors to self-declare
           not represent endorsement by those               Young to perform limited assurance             their Indigenous status and provides
           stakeholders as individuals or by their          procedures in relation to our 2009             the opportunity for them to do so.
           respective organisations of this report                                                                                                       47
                                                            Sustainable Development Report.
           or its contents. In addition, the Panel                                                         We do not expect them to provide
                                                                                                           evidence to verify their Indigenous status.

                                                                                                                                                         Woodside | reporting and performance indicators
           members did not draft or review the              In summary, Ernst & Young concluded
           sections in this report that describe            that nothing came to its attention in the
           Woodside’s response to the issues that                                                          In addition, Woodside has allocated
                                                            subject matter of the report that would
           they assisted in identifying through the                                                        a dedicated resource for Indigenous
                                                            indicate material was not presented fairly
           materiality assessment. Members were                                                            business participation and developed
                                                            and calculated in all material respects in
           not paid for their contribution to the Panel.                                                   a five-year strategy for Indigenous
                                                            accordance with the scope of assurance.
                                                                                                           participation in commercial
           Responsiveness                                   In presenting this view, Ernst & Young         contracting and procurement in 2010.
                                                            made two qualified conclusions:                A key component of the strategy
           Woodside aims to understand and
                                                                                                           implementation is that, wherever possible
           respond to stakeholder interests, issues
                                                            ƒ   Woodside did not provide fully             or appropriate, disclosure of Indigenous
           and concerns in an honest, timely and
                                                                the material indicators, principally       employee numbers is embedded into
           transparent manner to ensure we take
                                                                an aggregate monetary figure, to           all new or replacement contracts with
           account of their views and needs in our
                                                                enable stakeholders to assess our          contractors, consultants and agents.
           decision making and business planning.
                                                                performance in the area of Indigenous
                                                                business participation; and                Woodside’s 2010 Ernst & Young
           With respect to this report, we
                                                                                                           Assurance Statement relevant to
           have determined that our top
                                                            ƒ   Ernst & Young was not able to              this report does not contain any
           five material issues are:
                                                                verify the extent of Woodside’s            qualifications (please see overleaf).
           ƒ    Browse LNG Development site                     employment of Indigenous
                selection – See page 14;                        people, which is based
                                                                solely on self-declarations of
           ƒ    Regional development –       See page 20;       employees and contractors.

           ƒ    Climate change –      See page 26;          Response 1
                                                                                                           Verification Statement
                                                            Woodside has engaged an Indigenous
           ƒ    The implications for Woodside                                                              London Benchmarking Group
                                                            Business Participation Manager in its
                of the Montara and Macondo oil                                                             The LBG model helps businesses
                                                            supply chain, with the aim of improving
                spills –   See page 32; and                                                                improve the measurement, management
                                                            participation and reporting systems to
                                                            more accurately record the monetary            and reporting of their corporate
           ƒ    Woodside’s delivery on its
                                                            value of Indigenous contracts.                 community investment programs. It
                Reconciliation Action Plan
                                                                                                           covers the full range of contributions
                commitments –       See page 42.
                                                            We also joined the Australian Indigenous       (cash, time and in-kind donations)
                                                            Minority Supplier Council (AIMSC).             made to community causes, and
           These issues have been addressed                 AIMSC provides a direct business-              assesses the results achieved for the
           specifically in our report and are               to-business purchasing link between            community and for the business.
           identified as indicated. We also                 corporate Australia, government agencies
           instructed Ernst & Young to conduct              and Indigenous-owned businesses. Its           As managers of LBG Australia/New
           limited assurance on text and data               mission is to contribute to the creation       Zealand, we have worked with Woodside
           provided on these issues in this report.         of a sustainable, vibrant and prosperous       Energy Ltd to review its understanding
                                                            Indigenous enterprise sector in Australia.     and application of the LBG model in
           Other material issues have been                                                                 respect of the wide range of community
           presented in this report, such as our            Response 2                                     programs supported. Our aim has been to
           approach to water management and                 In Australia, the official definition          ensure that the evaluation principles have
           biodiversity. Text and data provided             of an Aboriginal or Torres Strait              been correctly and consistently applied.
           on these issues has not been                     Islander is a person of Aboriginal             Having conducted an assessment,
           independently verified.     See page 22.         or Torres Strait Islander descent,             we are satisfied that this has been
                                                            who identifies as being Aboriginal             achieved. Our work has not extended
                                                            or Torres Strait Islander, and who is          to an independent audit of the data.
                                                            accepted as such by the community              Simon J. Robinson
                                                            with which the person associates.              CCI Director on behalf of LBG

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                                                               ASSURANCE STATEMENT

                                                               Independent Limited Assurance Statement to the Management and Directors of Woodside Petroleum Ltd (‘Woodside’)
                                                               We have performed limited assurance procedures in relation to Woodside’s 2010 Sustainable Development Report (‘the Report’) as detailed in the ‘Scope of Work’ below.

                                                               Directors and Management                                  when determining the nature and extent of our            Completeness:
                                                                                                                         procedures, our review was not designed to provide
                                                               Responsibility                                            assurance on internal controls. We believe that
                                                                                                                                                                                  Has the report covered the material topics and
                                                                                                                                                                                  indicators sufficiently to reflect the significant
                                                               The Directors of the Company are responsible              the evidence we have obtained is sufficient and
                                                                                                                                                                                  economic, environmental and social impacts and
                                                               for the preparation of the Report. The Report has         appropriate to provide a basis for our conclusion.
                                                                                                                                                                                  enabled stakeholders to assess the reporting
                                                               been prepared by the management of Woodside
                                                                                                                                                                                  organisation’s performance in the reporting period?
                                                               (‘Management’) who are responsible for the
                                                               collection and presentation of information within         Scope of Work                                            In relation to the focus areas we have evaluated
                                                               it and for maintaining adequate records and
                                                                                                                         We designed our procedures in order to                   the subject matter against Woodside’s application
                                                               internal controls that are designed to support
                                                                                                                         state whether anything has come to our                   of the GRI G3 Principle of Accuracy defined as:
            48                                                 the sustainable development reporting process.
                                                                                                                         attention to suggest that the subject matter
                                                               There are currently no prescribed requirements                                                                     Is the reported information sufficiently accurate
                                                                                                                         detailed below has not been reported in
                                                               relating to the preparation, publication and                                                                       and detailed for stakeholders to assess the
                                                                                                                         accordance with the criteria listed below.
Woodside Petroleum Ltd | 2010 sustainable development report

                                                               verification of sustainable development reports.                                                                   reporting organisation’s performance?

                                                                                                                         Subject matter                                           Woodside management has determined total
                                                               Assurance Practitioner’s                                  The Subject Matter for our limited                       greenhouse gas emissions taking both an
                                                               Responsibility                                            assurance engagement was:                                equity-share and operational control approach, as
                                                                                                                         1.   The determination of appropriate content            aligned to international and industry greenhouse
                                                               Our responsibility in performing our limited
                                                                                                                              for the 2010 Sustainable Development                gas accounting standards; sources for emissions
                                                               assurance procedures is to the Management and
                                                                                                                              Report in accordance with the GRI G3                factors reflect Australian and international
                                                               Directors of Woodside only and in accordance
                                                                                                                              Principles for Defining Report Content;             greenhouse gas accounting standards.
                                                               with the terms of reference for this engagement
                                                               as agreed with them. We do not therefore
                                                               accept or assume responsibility for any other             2.   The performance indicators, statements
                                                               purpose or to any other person or organisation.                and claims related to the following focus           Procedures undertaken
                                                               Any reliance any such third party may place                    areas as defined on pages 2 and 3 of the            Our assurance procedures performed at Woodside’s
                                                               on the Report is entirely at their own risk.                   Report as they relate to performance claims         corporate office included, but were not limited to:
                                                                                                                              relevant to the 2010 calendar year:
                                                               Our limited assurance engagement has been                                                                          ƒ Interviewing selected corporate and site
                                                               planned and performed in accordance with the                   ƒ Opportunities, impacts and site selection           personnel to understand the key sustainability
                                                               Australian Standard on Assurance Engagements                     of the Browse LNG Development                       issues related to the focus areas and
                                                               ASAE 3000 “Assurance Engagements Other                                                                               processes for the collection and accurate
                                                                                                                              ƒ Woodside’s contribution to the regional             reporting of performance information;
                                                               Than Audits or Reviews of Historical Financial
                                                                                                                                development of the Pilbara and the
                                                               Information” (‘ASAE 3000’). We have also                                                                           ƒ Where relevant, performing walkthroughs
                                                                                                                                Kimberley regions of Western Australia
                                                               considered the Global Reporting Initiative G3 (‘GRI                                                                  of systems and processes for data
                                                               G3’) reporting guidelines in conducting our limited            ƒ Climate Change                                      aggregation and reporting;
                                                               assurance procedures, as described below.
                                                                                                                              ƒ The implications for Woodside and                 ƒ Checking the accuracy of calculations performed;
                                                               These procedures have been undertaken to form a                  Western Australia of the Montara
                                                               conclusion that nothing has come to our attention                and Macondo Oil Spills                            ƒ Checking that data and statements had been
                                                               that causes us to believe that the subject matter,                                                                   correctly transcribed from corporate systems
                                                                                                                              ƒ Woodside’s delivery on its Reconciliation           and/or supporting evidence into the Report; and
                                                               as presented in Woodside’s 2010 Sustainable
                                                                                                                                Action Plan commitments
                                                               Development Report, was not presented                                                                              ƒ Obtaining and reviewing evidence to support
                                                               fairly, and calculated in all material respects           These focus areas were determined by                       key assumptions in calculations and other data.
                                                               in accordance with the criteria detailed below            Woodside on the basis of a formal materiality
                                                               for the period 1 January 2010 to 31 December              assessment that considered the views of
                                                               2010 (within the boundaries described in the              internal and external stakeholders.                      Independence, Competence and
                                                               Report). Our responsibility did not include:
                                                                                                                                                                                  In conducting our assurance engagement we have
                                                               ƒ Any work in respect of information reported             Criteria                                                 met the independence requirements of the APES
                                                                 outside of Woodside’s 2010 Sustainable
                                                                 Development Report (printed version), such              In relation to the determination of appropriate          110 Code of Ethics for Professional Accountants.
                                                                 as Sustainable Development information                  report content we have evaluated the subject             We have the required competencies and experience
                                                                 published on Woodside’s website;                        matter against Woodside’s application of the             to conduct this assurance engagement.
                                                                                                                         GRI G3 Principles for Defining Report Content of
                                                               ƒ Review of Management’s forward looking                  Materiality, Stakeholder Inclusiveness, Sustainability
                                                                 statements; and                                         Context and Completeness, defined as:                    Conclusion
                                                               ƒ Assessing whether the Report is in accordance                                                                    Based on our limited assurance procedures as
                                                                 with all of the requirements of GRI G3 or               Materiality:                                             described in this Report, which do not constitute
                                                                 whether any application level prescribed                Does the information in the Report cover topics          an audit, nothing has come to our attention that
                                                                 by the GRI G3 has been achieved.                        and indicators that reflect the organisation’s           causes us to believe that the subject matter,
                                                                                                                         significant economic, environmental and social           as presented in Woodside’s 2010 Sustainable
                                                                                                                         impacts, or that would substantially influence the       Development Report, was not presented
                                                               Level of Assurance                                        assessment and decisions of stakeholders?                fairly, and calculated in all material respects in
                                                               A limited assurance engagement consists of making                                                                  accordance with the criteria detailed above.
                                                               enquiries and applying analytical and other limited       Stakeholder inclusiveness:
                                                               assurance procedures. Our procedures were
                                                               designed to provide a limited level of assurance and      Has the reporting organisation identified its
                                                               as such do not provide all the evidence that would be     stakeholders and explained in the Report how it
                                                               required to provide a reasonable level of assurance.      has responded to their reasonable expectations
                                                               The procedures performed depend on the assurance          and interests?
                                                               practitioner’s judgement including the risk of material
                                                                                                                         Sustainability context:
                                                               misstatement of the specific activity data, whether                                                                Ernst & Young
                                                               due to fraud or error. While we considered the            Has the report presented the organisation’s
                                                                                                                                                                                  18 February 2011
                                                               effectiveness of Management’s internal controls           performance in the wider context of sustainability?

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           APPEA                                   Australian Petroleum Production and Exploration Association Ltd.
           Board                                   Woodside’s governing body – the Board of Directors.
           Browse LNG Development                  The Browse LNG Development is a joint venture comprising Woodside, BHP Billiton, BP, Chevron and
                                                   Shell. Woodside is the major equity holder and operator of the Browse LNG Development.
           Browse LNG Precinct                     The Western Australian Government is seeking to develop the Browse LNG Precinct at James Price
                                                   Point, about 60 km north of Broome, with capacity for LNG processing and shipping facilities for at
                                                   least two LNG proponents.
           Committee                               Woodside’s Sustainability Committee.
           Code                                    Woodside’s Code of Conduct.
           Condensate                              Hydrocarbons which are gaseous in a reservoir but which condense to form liquids as they rise to
                                                   the surface.
           EEO                                     The Australian Government’s Energy Efficiency Opportunity program. This program encourages large
                                                   energy-using businesses to improve their energy efficiency.                                                 49

           FPSO                                    Floating, Production, Storage and Offloading vessel.

                                                                                                                                                               Woodside | glossary
           Greenfield                              The development of exploration outside the area of influence of existing operations/infrastructure
           GRI                                     The Global Reporting Initiative is a network based organisation that promotes sustainability reporting
                                                   worldwide. The GRI Reporting framework sets out principles and indicators that organisations can
                                                   use to measure and report their economic environmental and social performance. A GRI supplement
                                                   providing references for information contained in the report that corresponds to the GRI sustainability
                                                   reporting framework is available on our website
           HSE                                     Health, Safety and Environment.
           iSSoW                                   Integrated Safe System of Work.
           KPI                                     Key Performance Indicators.
           Kyoto Protocol                          The Kyoto Protocol is an international agreement adopted in 1997 and linked to the United Nations
                                                   Framework Convention on Climate Change. The major feature of the Kyoto Protocol is that is sets
                                                   legally binding obligations for developed countries to reduce their greenhouse gas emissions, while
                                                   developing countries may implement national mitigation actions on a voluntary basis. Developed
                                                   countries committed themselves to a collective greenhouse gas emission target of 5.2 percent lower
                                                   from the 1990 levels by 2012.
           LBG                                     London Benchmarking Group.
           LNG                                     Liquified natural gas.
           LPG                                     Liquified petroleum gas.
           NGER                                    The National Greenhouse and Energy Reporting Act 2007 (Cwlth) introduced a national
                                                   framework in Australia for the reporting and dissemination of information about the greenhouse
                                                   gas emissions, greenhouse gas projects and energy use and production of corporations.
           NOPSEMA                                 National Offshore Petroleum Safety and Environmental Management Authority.
           NWS                                     North West Shelf Project.
           RAP                                     Woodside’s Reconciliation Action Plan.
           Western Australian Group IV             The genetic stock of humpback whales that migrates to Western Australian waters.
           humpback whale population
           WMS                                     Woodside Management System. This is the company’s structured governance framework.

           A$           Australian dollars unless otherwise stated             Mtoe           million tonnes of oil equivalent
           bbl          barrel                                                 Mtpa           million tonnes per annum
           boe          barrel of oil equivalent                               NOx            Oxides of nitrogen
           CFC          Chlorofluorocarbon                                     SOx            Oxides of sulphur
           CO2e         carbon dioxide equivalent                              t              tonne
           GJ           gigajoules                                             TJ             terajoules
           kt           kilotonne                                              US$            US dollars unless otherwise stated
           ML           megalitres                                             VOCs           Volatile organic compounds
           MMbbl        million barrels
           MMboe        million barrels of oil equivalent

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                                                               ENVIRONMENTAL PERFORMANCE
                                                                                                                           2010        2009         2008         2007         2006
                                                               Hydrocarbon Production
                                                               Total Hydrocarbon Production (t)                       35,019,658   35,851,818   32,447,281   31,393,815   30,402,487
                                                               Woodside-share of Hydrocarbon Production (t)           9,070,200     9,887,859   9,356,885     8,455,202    7,930,829
                                                               Greenhouse gas emissions
                                                               Total CO2 equivalent (t)                               8,326,529     8,979,762    7,722,314    7,354,273    8,288,303
                                                               Woodside-share of CO2 equivalent (t)                    2,258,013    2,516,990   1,979,544     1,643,829    1,947,611
                                                               Intensity (CO2e (t) per t of hydrocarbon production)
                                                               (total operated)                                             0.24         0.25        0.24          0.23         0.27
                                                               Flared gas
                                                               Total flared gas (t)                                     326,500      343,224      309,741       297,509     566,429
Woodside Petroleum Ltd | 2010 sustainable development report

                                                               Woodside-share of flared gas (t)                         125,838      149,783       115,744     102,444      230,121
                                                               Intensity (flared gas (t) per kt of hydrocarbon
                                                               production)(total operated)                                   9.3          9.6          9.5          9.5         18.6
                                                               Volatile organic compounds
                                                               Total VOCS (t)                                             17,674       17,364      13,617       15,707       22,735
                                                               Woodside-share of VOCS (t)                                 3,593         3,763       2,980        3,433         5,374
                                                               Oxides of nitrogen emissions
                                                               Total NOx emissions (t)                                   18,295        19,120      15,333       13,296       16,943
                                                               Woodside-share of NOx emissions (t)                        5,042        5,645        4,398         3,313        3,912
                                                               Oxides of sulphur emissions
                                                               Total SOx emissions (t)                                      381          525          445          301          647
                                                               Woodside-share of SOx emissions (t)                          153          241          294          108          122
                                                               Ozone depleting emissions
                                                               Total CFC11 equivalent (t)                                   0.18         0.12        0.02          0.10         0.08
                                                               Woodside-share of CFC11 equivalent (t)                       0.03         0.02           0          0.02         0.01
                                                               Resource use
                                                               Energy consumption
                                                               Total energy consumption (TJ)                            115,660       114,948     105,302       85,200       84,523
                                                               Woodside-share of energy consumption (TJ)                 26,043       26,127       22,935        19,104       18,715
                                                               Intensity (energy consumption (TJ) per kt of
                                                               hydrocarbon production) (total operated)                      3.3          3.2          3.2          2.7          2.8
                                                               Water usage
                                                               Fresh water use (m3)                                     351,325       347,600     423,762      400,399      412,781

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                                                                                       2010              2009             2008               2007                2006
           Oily water discharge
           Total volume of oily water discharged (m3)                            6,862,964          5,775,644        5,420,577          8,627,036          9,199,206
           Woodside portion of oily water discharged (m )        3
                                                                                 3,415,806          2,829,393        2,200,451         4,225,930            4,276,664
           Total oil load in discharge water (t)                                       37.35             43.34            49.23              89.41               81.14
           Woodside portion of oil load in discharge water (t)                             17                20               14                 37                  33
           Average oil in water concentration (mg/l)
           (offshore facilities)                                                            5                  8                9                10                   9
           Oil in water concentration exceedences                                           0                  1                2                  0                  3
           Drilling and fluid discharge
           Total drilling fluid discharge:
           Water based fluid (t)                                                     40,699             38,121           37,662            53,386              73,689
           Non-water based fluid (t)                                                 11,209               1,125           3,025              2,814               4,512

                                                                                                                                                                            Woodside | environmental performance
           Wells drilled                                                                   19                18               26                 32                  38
           Length drilled (m)                                                        51,908             54,623           74,198            89,554              107,197

           Incidents (Category C and above)
           Total number of incidents                                                        4                  8              21                 20                  18
           Oil spills                                                                       0                  0                7                  6                  8
           Other spills (e.g. chemical)                                                     3                  1                2                14                   5
           Other incidents (e.g. gas releases, dark smoke events)                           1                  6              12                 10                   1
           Wastes and residual materials*
           Hazardous waste:
           Total disposed waste (t)                                                    1,839              1,107           4,260              2,527               3,970
           Total recycled waste (t)                                                    1,407                716              250               554                 106
           Non-hazardous waste:
           Total disposed waste (t)                                                    2,165             5,040            1,684              1,319               1,438
           Total recycled waste (t)                                                    1,979              2,217              466                312                234
           Total number of environmental fines and penalties                                0                  0                0                  1                  0

           Notes and Definitions
           Total hydrocarbon production            Includes gross liquid and gas products but does not include re-injected hyrdocarbons.

           Fresh water use                         Supplied by water utility.

           Total energy consumption                Comprises direct and indirect energy consumption.

           Incidents                               ‘Category D’ incidents are those that may include (but not limited to) incidents that are reportable to the
                                                   regulator, spills to marine environment >80 litres, spills to land >2,000 litres, any emission or discharge exceeding
                                                   regulatory limits.

                                                   A change to the naming of incidents in the Woodside incident classification system was made in early 2010.
                                                   ‘Category D’ incidents were previously referred to as ‘Category C’. There has been no material change to the
                                                   criteria that would trigger an incident being considered for this category and therefore previous performance
                                                   against ‘Category C’ incidents is considered equivalent to the new ‘Category D’.
           Ozone depleting emissions (oss)         The values represent the amounts of OSS purchased in the reporting period for replacement and not the actual
                                                   emissions. This accounts for the variation between reporting periods.

           *                                       In 2009 our understanding of disposed and recycled waste improved through vendor record keeping.

           Note:                                   The values in this table do not, as yet, take into account the error of uncertainty associated with the acquisition of
                                                   the raw data and the subsequent calculations.

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                                                               ENERGY CONSUMPTION OF
                                                               WOODSIDE-OPERATED FACILITIES
                                                               The total energy saved from implemented opportunities across nine completed assessments is approximately 3 million GJ a year.
                                                               This is approximately 2% of Woodside’s total energy consumption. The table below details the energy usage of facilities operated by
                                                               Woodside that completed their assessments during 2010.

                                                               Energy use assessed
                                                               Group member and/or business unit and/                   Period over which assessment                Energy use per annum in GJ in the
                                                               or key activity and/or site that has had an                     was undertaken                            current reporting year
                                                               assessment completed by the end of this
                                                               reporting period.
                                                               Cossack Pioneer FPSO                                       March 2007 – June 2008                                3,507,000
                                                               Northern Endeavour FPSO                                  September 2007 – June 2008                              2,076,000
                                                               Goodwyn A Platform                                    December 2007 – December 2008                              2,362,000
            52                                                 Nganhurra FPSO                                          January 2008 – December 2008                             4,902,000
                                                               North Rankin A Platform                                  February 2008 – March 2009                                637,000
Woodside Petroleum Ltd | 2010 sustainable development report

                                                               Karratha Gas Plant                                    September 2007 – December 2009                           107,663,000
                                                               Otway Gas Plant1                                        January 2009 – December 2009                             1,198,000
                                                               Angel Platform                                          January 2010 – December 2010                              353,000
                                                               Maersk Ngujima-yin FPSO                                 January 2010 – December 2010                             8,788,000
                                                               Total energy assessed to date                                                                                  121,888,000
                                                               Total energy use of the group in the current reporting year                                                    131,486,000
                                                               Total energy assessed expressed as a percentage of total current energy use                                         92.7%

                                                               Accuracy of energy use data
                                                               Entity                                                           % achieved                        Reasons for not achieving data accuracy
                                                                                                                                                                               to within ±5%
                                                               All facilities above meet the same                                 +/-10%                       Woodside has assessed their facilities
                                                               accuracy level                                                                                  as per the above table and met the
                                                                                                                                                               accuracy requirements as agreed in their
                                                                                                                                                               Assessment and Reporting Schedule (ARS)
                                                                                                                                                               of +/-10%.2

                                                               Assessment Outcomes - Angel Platform
                                                               Four opportunities were identified, of which none have been implemented. Three will not be implemented as they are uneconomic and one
                                                               remains under investigation. Examples of these opportunities include:
                                                               ƒ Increasing the ‘no touch time’ period: Flaring of the subsea flowline at the Angel facility is specified to occur after a certain duration of
                                                                 disruption. This is known as the ‘no touch time’, which is calculated to prevent hydrates forming in the flowline. Currently, the ‘no touch
                                                                 time’ period is set as two hours, but is proposed to be extended to eight, saving an estimated 1,600 gigajoules (GJ) of hydrocarbon per
                                                                 annum that could be recovered to saleable product.
                                                               ƒ Reduce the glycol reboiler temperature: The glycol reboiler is the primary consumer of electrical energy on the Angel Platform. There
                                                                 is potential to optimise the dehydration process by reducing the reboiler temperature, thereby saving electrical energy. It is estimated
                                                                 that this opportunity could save approximately 10,900 GJ per annum in fuel gas that could be recovered to saleable product.

                                                               Status of Opportunities                                           Number of              Estimated Energy Savings                  Annual
                                                                                                                                Opportunities          per annum by payback period                Energy
                                                                                                                                                               Natural Gas (GJ)
                                                                                                                                                        0 to 4       2 to 4          >4
                                                               Outcomes of assessment             Identified <+/-30%                   3                -               -           261,843      261,843
                                                                                                  Identified >+/-30%                   1               1,627            -             -             1,627
                                                                                                  Total identified                     4               1,627            -           261,843      263,470
                                                               Business response <+/-30% To be implemented                             0                -               -             -              -
                                                                                                  Implemented                          0                -               -             -              -
                                                                                                  Not to be implemented                3                -               -           261,843      261,843
                                                               Business response >+/-30% Under investigation                           1               1,627            -             -             1,627

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           Assessment Outcomes - Maersk Ngujima-yin Floating Production Storage and Offloading (FPSO) vessel
           Seven opportunities were identified, of which one has commenced implementation, three are proposed to be implemented,
           two are not to be implemented and one remains under investigation. Examples of these opportunities include:

           ƒ Single turbine operation: The Maersk Ngujima-yin facility uses gas turbines to generate its electricity. Oil that feeds the FPSO from
             the Vincent field contains associated gas, which is then used as fuel gas for the turbines. Any gas that is not used as fuel is normally
             reinjected back into the reservoir. This extends the fuel gas resource, which is forecast to deplete before the end of the recoverable oil
             reserves. However, while associated gas is available, alternatives to this fuel source, including purchased diesel or the use of produced
             oil for electricity generation are more expensive.
                To avoid disruption to electricity supply that could result from a gas turbine failure, a running spare turbine is operated as a backup.
                An opportunity was identified to operate the facility without a running spare turbine, saving fuel gas. However, due to the differences
                in cost of the alternate fuel sources, annual financial benefits would take at least four years to realise. Although this opportunity
                does not appear economic at this time, more rigorous cost estimates are being prepared as part of further investigation.                                                                               53

           ƒ Recovery of gas from the low pressure separator: The facility uses a series of separators on well fluids. These separators

                                                                                                                                                                                                                       Woodside | energy consumption
             process oil, gas and water. Currently, the gas separated in the low pressure separator is flared, but it may be possible to
             recover this gas by commissioning the low pressure compressor. Although this compressor is part of the facility, it has
             not been necessary to operate it to date. When the facility’s reinjection compression is restarted in 2011, the gas from the
             low pressure separator that is normally flared can be reinjected into the reservoir. This will extend the fuel gas resource
             and save approximately 30,400 GJ of fuel gas per annum. Similarly to the single turbine operation, the opportunity
             does not realise financial benefits for at least four years, but it is proposed to be implemented during 2011.

           Status of Opportunities                                  Number of                                        Estimated Energy Savings                                                         Annual
                                                                   Opportunities                                    per annum by payback period                                                       Energy
                                                                                                      Natural Gas (GJ)                                     Diesel (GJ)
                                                                                              0 to 2         2 to 4             >4               0 to 2          2 to 4           >4
           Outcomes of              Identified <+/-30%                       6                   -              -             206,428             24,241             -             -                  230,669
           assessment Identified >+/-30%                                     1                   -              -          1,304,045                 -               -              -              1,304,045
                                    Total identified                         7                   -              -          1,510,473              24,241             -             -               1,534,714
           Business                 Implementation
                                                                             1                   -              -              30,428               -                -             -                    30,428
           response                 commenced
           <+/- 30%                 To be implemented                        3                   -              -                       -         24,241             -              -                   24,241
                                    Not to be
                                                                             2                   -              -             176,000                -               -              -                 176,000
           Business                 Under investigation
           response                                                          1                   -              -          1,304,045                 -               -              -              1,304,045
           >+/- 30%

               The sale of the Otway Gas Project was completed in March 2010 and operatorship was transitioned in the second quarter of 2010.
               Typical fuel metering accuracy for Woodside facilities is within a range of 5-10% with higher accuracies for custody transfer of products at sales point (1-2%). However, the bulk of
               Woodside’s energy consumption is sourced from fuel gas taken as a utility side stream from the main production of hydrocarbons. Due to different modes of plant operation, and changes in
               the production balance into facilities from different reservoirs, it is difficult to accurately measure the amount of energy contained in the fuel gas stream. As the fuel gas is not being sold to a
               third party, accurate metering for custody transfer has not been justified or provided in the original design.

               Additionally, compositional variations in fuel gas can occur, due to plant operating modes (which may select alternative sources for fuel gas from different locations in the gas process)
               or due to variations in input production from reservoirs. The heating value or energy content of the fuel will continuously vary with production, processing conditions or source.

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                                                               SOCIAL PERFORMANCE
                                                                                                                               2010             2009              2008              2007               2006
                                                               Number of Employees
                                                               Male employees                                                 2,688              2,341            2,242             2,179              2,063
                                                               Female employees                                                  962               878              882               802                 825
                                                               Total                                                          3,650              3,219            3,124             2,981              2,888
                                                               Number of contractors                                           1,198             1,139            1,491             1,075                 947
                                                               Number of staff by employment type
                                                               Permanent                                                       3,166             2,782            2,601             2,484              2,376
                                                               Fixed term                                                        308               276              388               381                 410
                                                               Part time                                                         176               161              135                116                102
                                                               Total                                                          3,650              3,219            3,124             2,981              2,888
                                                               Number of staff by region
Woodside Petroleum Ltd | 2010 sustainable development report

                                                               Australia                                                      3,499              3,058            2,829             2,537              2,429
                                                               Middle East                                                           -                1                2                 4                 12
                                                               Africa                                                               4               21              125               278                 291
                                                               Asia                                                               62                34                27                22                 16
                                                               Europe                                                               3               18                37                29                 38
                                                               USA                                                                82                87              104                111                102
                                                               Total                                                          3,650              3,219            3,124             2,981              2,888
                                                               Woodside staff age distribution (years)
                                                               ≤ 20                                                               13                18                27                 5                 11
                                                               21 - 30                                                           649               568              578               544                 442
                                                               31 - 40                                                        1,233              1,095            1,067             1,043                 991
                                                               41 - 50                                                         1,074               984              952               932                 951
                                                               51 - 60                                                           598               498              460               416                 442
                                                               60+                                                                83                56                40                41                 51
                                                               Total                                                          3,650              3,219            3,124             2,981              2,888
                                                               Indigenous workforce *
                                                               Employees (permanent/fixed term)                                   53                36                32                29                n/a1
                                                               Pathways                                                           49                33                28                15                n/a1
                                                               Contractors construction                                          128               137              1091                741               n/a1
                                                               Total                                                             230               206              169                118                 52
                                                               Total turnover                                                    204               201              296               333                 290
                                                               Voluntary turnover                                                189               155              254               288                 250
                                                               % Return from maternity leave                                      90                81                80                81                 70
                                                               Training and development
                                                               Traineeship and Apprenticeship Program                            104                88              101                 81                 53
                                                               Graduate Program                                                  135               136              139               134                  95
                                                               Notes and Definitions
                                                               Total employees               Total number of employees including permanent, fixed term and part time. Does not include secondees orcontractors.

                                                               Contractors                   Non-Woodside employees, working within Woodside to support specific activities.

                                                               Total turnover                Permanent and fixed term employees who left Woodside voluntarily or involuntarily.

                                                               Voluntary turnover            Permanent and fixed term employees who left Woodside voluntarily for reasons not initiated by the company.

                                                                                             Indigenous employment data is based on declarations provided by employees and contractors. Whilst Woodside
                                                                                             makes every attempt to publish accurate Indigenous employment data, we are ultimately reliant on the self
                                                               *                             declaration of our employees and contractors. We have not, nor are we able to, independently verify the
                                                                                             Indigenous employment figures quoted by our contractors. Breakdown on the Indigenous workforce numbers
                                                                                             before 2007 is not available.
                                                               1                             Categorisation of workforce type was reviewed in 2009.

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           Social Investment                                                          2010               2009                   2008              2007               2006
           Social investment (A$)                                                4,912,333         6,088,074              5,286,603          7,600,000         8,256,000
           Note: 2010 - 2008 social investment data has been verified by the London Benchmarking Group (LBG) methodology. 2008 data previously reported has
                 been amended to reflect LBG verification. 2007 - 2006 data is presented on an estimate basis.
                   The LBG verified data includes donations, community investment and commercial initiatives. The 2006 and 2007 data was inclusive of expenditure
                   that does not meet LBG definitions.    For further information, please visit
                   2009 social investment spend was higher than in 2010 due to a one-off major donation to the Victorian Bushfire Appeal and the sale of Woodside’s
                   interest in the Otway Gas Project, reducing social investment in Victorian communities.

           Health and Safety
           Workforce exposure (million hours)
           Staff                                                                 7,563,720         7,170,520               7,026,240         7,316,938         6,289,529
           Contractors                                                         22,035,351        52,781,386              30,748,010        24,851,572         23,849,183
           Total                                                               29,599,071        59,952,906              37,774,249        32,168,510         30,138,712
           Number of incidents
           Fatalities                                                                       0                 0                      0                  1                     0
           Total recordable cases (TRC)                                                  151               199                    164                131                  153       55
           Lost workday cases (LWC)                                                       21                 33                     34                24                   32

                                                                                                                                                                                    Woodside | social performance
           High potential incidents (HPI)                                                 54                 40                     43                42                   49
           Total recordable occupational illnesses (TROI)                                 26                 30                     23                24                      8
           Frequency rates
           Total recordable case frequency (TRCF)                                        5.1                3.3                    4.3                4.1                 5.1
           Lost workday case frequency (LWCF)                                            0.7                0.6                    0.9                0.8                  1.1
           High potential incident frequency (HPIF)                                       1.8               0.7                    1.1                1.3                  1.6
           Total recordable occupational illness frequency (TROIF)                       0.9                0.5                    0.6                0.8                 0.3

           Notes and Definitions
           Hazard                              A set of conditions that had the potential to cause injury, ill health, damage to the environment, damage to equipment
                                               or assets or company reputation but did not. No release of energy has occurred.

           Incident                            Is one, or more, of the following: an unplanned release of energy that actually resulted in injury, occupational illness,
                                               environmental harm or damage to assets; a near miss; damage or potential damage to company reputation; breach of
                                               regulatory compliance and/or legislation; security breach.

           High potential incident             Is an incident, regardless of actual consequence, which could have resulted in the worst realistic consequence of
                                               Category C or above in accordance with the Woodside Event Reporting Impact Table.

           Occupational injury                 Is harm to a person such as a cut, fracture, sprain, amputation etc. that resulted from a single, instantaneous incident.
                                               The difference between an injury and an occupational illness is the single event concept. If the incident resulted
                                               from something that happened in one instance, it is an injury. If it resulted from prolonged or multiple exposure to a
                                               hazardous substance or environmental factor, it is an occupational illness.

           Occupational illness                Is any work-related abnormal condition or disorder, other than one resulting from a work injury, caused by or mainly
                                               caused by exposures at work. Occupational illnesses may be caused by inhalation, absorption, ingestion of, or direct
                                               contact with, as well as exposure to, physical and psychological situations.

           Work-related event                  An actual injury or occupational illness is to be considered work-related if an incident in the work environment either
                                               caused or contributed to the resulting severity impact or significantly aggravated a pre-existing work-related injury or
                                               occupational illness.

           Lost workday case (LWC)             Occurs where any work-related injury or occupational illness results in a person being unfit for work on ‘any day’ after
                                               the day of the event occurring. ‘Any day’ includes scheduled rest days, weekend days, leave days, public holidays or
                                               days after ceasing employment.
                                               Calculating the Lost Workdays is the total number of calendar days counting from the day of injury/occupational illness
                                               where the person was unable to return to work as a result of their injury or illness.

           Restricted workday                  Is the result of a work-related injury or occupational illness when a person undertakes restricted work duties or job
           case (RWC)                          transfer as they are not able to perform their normal routine functions for which they were scheduled to perform.
                                               Calculating the Restricted Workdays is the total number of calendar days counting from the day of the injury or
                                               occupational illness where the person was unable to return to work in the full capacity of their routine/normal functions.
                                               ‘Routine/normal’ functions are those work activities that the person regularly performs at least once a week.

           Medical treatment                   Is defined as the ‘management and care of a patient for the purpose of combating disease or disorder’. An MTC is
           case (MTC)                          when a work-related injury or occupational illness occurs and the person does not miss work nor undertakes restricted
                                               work duties but undergoes treatment beyond first aid by a physician (doctor) or other licensed health care professional
                                               (an individual whose legally permitted scope of practice (i.e. licence, registration or certification) allows him/her to
                                               independently perform, or be delegated the responsibility to perform the activities described by the US Department of
                                               Labor Occupational Safety and Health Administration Regulations – Standard Number 1904).

           Total recordable case (TRC)         Is all work-related injuries which result in fatality, lost workday case, restricted workday case or medical treatment case.
                                               It does not include occupational illnesses.

           First aid case (FAC)                Results when one of the following treatment/s occurs and the person does not miss work or undertake any restricted
                                               work duties: First Aid is usually administered after the injury or illness occurs and at the location (e.g. workplace) where
                                               the injury or illness occurred; generally consists of one-time or short-term treatment; treatments are usually simple and
                                               require little or no technology; can be administered by people with little training (beyond first aid training) and even by
                                               the injured or ill person; and is usually administered to keep the condition from worsening, while the injured or ill person
                                               is awaiting medical treatment. First aid treatment, provided by a physician (doctor) or licensed health care profession, is
                                               still considered first aid.

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                                                               OUR NETWORKS

                                                               Our networks                                   Disclosure
                                                               Woodside recognises that there are many        In addition to its own reporting, Woodside
                                                               issues relevant to our business activities     provides performance data to other
                                                               and to the interests of our stakeholders       organisations to assist stakeholders to
                                                               that are outside of our direct control.        assess our performance, including:
                                                                                                              ƒ Carbon Disclosure Project (CDP) –
                                                               To influence how progress is made
                                                                                                                Woodside has since 2006 participated
                                                               against these issues, we actively
                                                                                                                in the CDP, a voluntary program which
            56                                                 participate in industry forums and work
                                                                                                                collects, on behalf of institutional
                                                               with others, including governments,
                                                                                                                investors, information about how
                                                               industry representative bodies and
Woodside Petroleum Ltd | 2010 sustainable development report

                                                                                                                companies are responding to the
                                                               community groups to make a difference.
                                                                                                                challenges posed by climate change.
                                                               At an international level in 2010              ƒ Dow Jones Sustainability Index (DJSI)
                                                               we were members of:                              – Woodside has been a member of the
                                                               ƒ Extractive Industries                          DJSI since 2002. The DJSI is an index
                                                                 Transparency Initiative;                       that scores companies across a wide
                                                                                                                array of economic, environmental and
                                                               ƒ International Petroleum
                                                                                                                social factors. Woodside is in the global
                                                                 Industry Environmental
                                                                                                                leader group for the oil and gas sector.
                                                                 Conservation Association;
                                                                                                              ƒ London Benchmarking Group (LBG)
                                                               ƒ International Association of
                                                                                                                – Woodside became a member
                                                                 Oil & Gas Producers;
                                                                                                                of the LBG in 2009, joining many
                                                               ƒ World Economic Forum - Partnering              other companies around the world
                                                                 Against Corruption Initiative; and             who report, by way of a consistent
                                                                                                                methodology, on contributions to
                                                               ƒ World Business Council for
                                                                                                                the community, including financial
                                                                 Sustainable Development.
                                                                                                                support, time, in-kind donations
                                                               In Australia in 2010 we were members of:         and management costs.

                                                               ƒ Australian Petroleum Production
                                                                 and Exploration Association;
                                                               ƒ Business Council of Australia; and
                                                               ƒ Chamber of Minerals and
                                                                 Energy of Western Australia.
                                                               We also take part in similar advocacy and
                                                               collaborative relationships at a local level
                                                               in the communities where we operate.

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                                                                                                                   Woodside | 2010 Annual Report

           Climate Disclosure Leadership Index

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Woodside Petroleum Ltd | 2010 sustainable development report

                                                                          Sustainable Development Report 2010

                                                                          Head Office:
                                                                          Woodside Petroleum Ltd
                                                                          240 St Georges Terrace
                                                                          Perth WA 6000 Australia

                                                                          Postal Address:
                                                                          GPO Box D188
                                                                          Perth WA 6840 Australia

                                                                          t: +61 8 9348 4000                    Visit us at
                                                                          f: +61 8 9214 2777
                                                                                                                                                                             expo design

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