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00:00I wish the circumstances were easier for you also because, you know, the conflict in Iran
00:04obviously generating a tremendous amount of geopolitical uncertainty.
00:08Can you give us a sense of how this is impacting your decision-making and your investment decisions?
00:13Yeah, the crisis in the Middle East has absolutely reinforced the importance of energy supplies
00:20and in particular gas.
00:21In Australia, the federal government's been working very hard on ensuring we have sufficient
00:27supplies of liquid fuels and has, you know, publicly reinforced the benefit of having an
00:33energy export industry as part of the ability to secure commitments from other countries.
00:39As an operator and as a producer, the importance on being reliable and honouring commitments
00:44is reinforced and certainly customers are looking for us to honour our contracts and also
00:49if there's any additional volumes to keep them in mind.
00:53Before any of this happened, a lot of the conversations were around the LNG market heading for a glut.
00:59Is this still the case if this conflict ends or do you see Asian consumers still needing
01:04every molecule of gas that Australia can provide?
01:07So LNG markets have always had volatility.
01:11They've had a lot of seasonality to them with demand high and low.
01:16We've also always survived and been part of geopolitical stability, price volatility.
01:23So to some degree, the markets are well set for these events.
01:27We are seeing a build-out of new supply and so that's going to continue to support the market
01:33going forward.
01:35But certainly our customers are very keen to continue to contract with us.
01:39And are customers looking for longer duration contracts now or has there been any change to that?
01:45The immediate activity for customers has been securing short-term supply as a result of having
01:52so much supply held back from the Middle East.
01:55But customers have historically, since COVID really, since 2021, been moving more to longer-term supply
02:02and we are starting to see that behaviour continue.
02:06So nearly two-thirds of contracts since 2021 worldwide have been for more than 10 years
02:12and so we continue to see that going forward.
02:14And of course we're seeing upheaval on the domestic front as well.
02:17Following the budget, the announcement of a 20% gas reservation policy,
02:22potential changes to the petroleum resource or end tax coming as well.
02:26How are you planning around that?
02:29So political stability is really important.
02:31Tax stability for industries like ours.
02:34We invest for decades and we have significant investments.
02:38We continue to talk with governments in Australia.
02:42The federal government recently agreed not to change the tax settings as part of the budget
02:48and we're in discussions with them on the new reservation policy that they recently talked to us about.
02:54The West Australian government, where the state government already has a domestic reservation policy
02:59that we use in Western Australia.
03:02And so it will be important that a federal system can work in harmony with what's already there in Western
03:08Australia.
03:09How would you characterise the broader regulatory set-up in Australia now?
03:12Is it getting too hard to invest in new LNG projects?
03:16Woodside continues to be super proud to be an Australian company
03:20and has strong ambition to continue to invest here.
03:23We do need stable, in government, we need stable fiscal settings,
03:28we need predictable settings and we need timely approvals.
03:32But we have Browse as a fabulous opportunity.
03:35It's a discovered but yet undeveloped resource
03:39and we're looking to see how do we bring that to market.
03:41We recently had an independent study that the Joint Venture Commission
03:45that highlighted just the benefits that could bring to Australia.
03:49Domestic gas for households and businesses support our regional partners
03:53but deliver more than $56 billion in taxes and royalties,
03:58provide additional jobs, things the government is also looking for.
04:01So ensuring changes to policies that continue to support investment
04:06is going to be really important.
04:08Let's talk a little bit more about Browse.
04:09When can we expect a final decision on this project?
04:12Browse is a project that we're keen to continue to progress.
04:16We have contracting companies working with us now
04:20on early front-end engineering and design
04:23for the floating FPSOs offshore.
04:26We've been working commercial agreements with our counterparts
04:29and we've continued to have long-term engagements
04:33with the government on environmental approvals.
04:35We need to have stable, predictable tax and fiscal settings as well
04:40but we're optimistic of the progress of Browse.
04:43Yeah, well, the caution and the steady pace is understandable
04:47because it's not cheap.
04:48Would you consider selling off infrastructure or any assets
04:51to help fund the project?
04:53So we have a number of committed projects today as Woodside
04:56that we're busy supporting.
04:58We've got a tree on development in Mexico
05:00and we've got our Louisiana LNG project in the US.
05:03We then have a suite of opportunities that could follow
05:06and these projects will all need to compete for capital
05:09and we need to consider the right strategic move for Woodside.
05:13We have Browse, we have further opportunities at Louisiana
05:17to do additional trains there.
05:19These are some of the considerations we have.
05:21Where would you place the chances of this not going ahead
05:24or is it just a question of when rather than if?
05:26Browse has been part of the Woodside portfolio for decades
05:29and the teams continue to progress it.
05:32The importance of having energy security in Australia
05:35has really been highlighted this year
05:37and its ability to support energy security in our region
05:41is equally important.
05:43So we understand that Browse could really be a solution
05:46for Australia going forward.
05:49Can you tell me a little bit more about M&A?
05:53Because when we're in situations like this,
05:55we've got very high oil prices, very strong earnings,
05:59good balance sheets as well.
06:00You feel that the scene is probably set for some consolidation.
06:04Are you looking at making any acquisitions at the moment?
06:06Yeah, Woodside's portfolio has continued to use mergers,
06:10acquisitions, divestments as part of the tools
06:14to increase value for shareholders.
06:17And that's been part of the suite of things.
06:19So that's always something that we contemplate.
06:21But we'll be looking for material positions.
06:23We'd be looking for assets that complement our skills,
06:27our geographies that we already are,
06:29that really are enabled for Woodside
06:32to generate additional value for shareholders.
06:34Back in 2024, Woodside and Santos were talking about a tie-up
06:38and it eventually didn't proceed because of valuations.
06:41Is that something that could potentially become a reality again?
06:45That particular deal is behind us.
06:48I see.
06:49Now, when you became CEO,
06:53well, it came at a time where Woodside was advancing
06:55a number of important LNG projects.
06:58Is this still a very much an LNG-first company?
07:01Yeah, Woodside has a real strength in LNG operating capability.
07:05We've been an operator of LNG for more than 35 years.
07:09And so we have a suite of projects that are going to continue with that.
07:13But we are also a proud oil developer
07:16and in particular deep water oil
07:18with our Sangamar asset that came online in 2024
07:21and the Trion project now in Mexico.
07:24So they're complementary.
07:25But the portfolio will be a dominated LNG portfolio.
07:30Do you feel Australia requires more oil refining capacity?
07:34Important for Australia is to recognise the ability
07:38to have fuel security.
07:39And the government in their recent budget
07:41put money aside to ensure that we have sufficient reserves.
07:46So refining capacity is one opportunity.
07:49But I think having the ability to do trades
07:52with the Asian counterparts for whom this is their natural product
07:56is equally valid.
07:58Yes, and in terms of that, you know,
08:00Australia's unique leverage in terms of providing the gas,
08:03that Asian consumers need
08:05in return for the liquid fuel that Australia needs.
08:09How long do you see this arrangement being sustainable and durable for?
08:13Can it last as long as, you know, the Iran war lasts?
08:16The arrangements are actually existing commitments
08:20between the countries.
08:21And what has been done is reinforce that we acknowledge
08:25that we actually need you to fully honour those commitments.
08:28And likewise, our counterparts,
08:30the Japanese Prime Minister visited Australia,
08:32seeking confirmation that we would continue to honour
08:35the commitments of LNG export.
08:37So the onus and the responsibility for Australia
08:41is to continue to develop new resources
08:43to enable that security,
08:45that energy security between our counterparts to continue.
08:50Can you imagine the situation,
08:52as was discussed in the early days of this conflict,
08:54where we might see some sort of rationing in Australia?
08:56Are we past that now?
08:57Do you feel that fuel security is sufficient,
09:00that that's no longer a conversation?
09:03I think that's an interesting question,
09:05and it's one that I know governments are really actively considering.
09:10Having gas and LNG available to support our Asian counterparts
09:14is our best opportunity to provide the reciprocal produced fuel
09:20back into Australia.
09:21And so that's the opportunity for Australia, I think,
09:24is to continue to have reciprocity
09:26in how we support our counterparts
09:29in the agreement that they will do the same for us.
09:34You mentioned earlier that you are in conversation with the government
09:37around potential changes to the tax regime
09:40around the petroleum resource rent tax.
09:43The government's taken a lot of criticism post-budget
09:45for breaking promises around property tax.
09:48Does this make it difficult to go ahead with these conversations
09:53in good faith, thinking, well, you know,
09:55the political climate could potentially change election to election?
09:59We have worked with governments over decades,
10:02and so we work with governments continually.
10:05And so part of the opportunity, I guess, for companies
10:09is to work with governments as they evolve their thinking.
10:13We understand that the government chose not to do anything for tax,
10:16which we're grateful for in the budget.
10:18But we do expect this conversation to continue.
10:20It's a democracy in Australia.
10:23Conversations like this are important.
10:25We believe the current regime is more than adequate
10:28in providing that fair share of return to Australia,
10:31but the conversation will continue.
10:32Just finally, Liz, is there one change, one policy change,
10:36one regulation that you would like to see happen
10:38that will make your life a lot easier?
10:41As we discussed, our projects compete for capital
10:44with other opportunities that are outside of Australia.
10:46And one of the hallmarks of Australia
10:50has been having a stable, predictable, transparent tax fiscal system,
10:56having regulatory approvals that we're enduring timely.
11:01We need to return to having that as a key feature
11:04of investing in Australia,
11:05and that will give Australia the best chance.
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