Woodside Energy

Climate change and the energy transition are a strategic risk and opportunity for Woodside. Energy markets and regulations will continue to evolve.

Time horizons

Time horizons are defined as: Short = Third quarter 2025 to the end of 2026 (current); Medium = 2027–2036 (anticipated); Long = 2037 and later (anticipated). The short-term may impact current producing assets and sanctioned projects (projects that have already been subject to a final investment decision); the medium-term may impact current producing assets and sanctioned projects as well as opportunities under active evaluation but not yet subject to a final investment decision. The long-term could impact on both of the above short and medium term categories as well as opportunities beyond current consideration. These time horizons broadly align with those used for strategic decision making.

Physical risks

Extreme weather intensification (physical risk) – Short: Q3 2025 to end of 2026; Medium: 2027–2036; Long: 2037 & later. Climate change is expected to lead to an increase in the frequency and severity of extreme weather events. This could include metocean events such as cyclones, hurricanes, or storm surges. It could also include land-based changes such as increases in extreme heat days.

Transition risks

Reputation – Short: Q3 2025 to end of 2026; Medium: 2027–2036; Long: 2037 & later. Some of Woodside's stakeholders hold differing opinions about how to address climate change and the energy transition. This can impact Woodside's reputation, for example with investors, governments or communities.

Climate litigation – Short: Q3 2025 to end of 2026; Medium: 2027–2036; Long: 2037 & later. There are groups and individuals who are opposed to Woodside's activities. These groups or individuals may initiate proceedings or file challenges against Woodside. The types of climate litigation observed in the oil and gas sector potentially include misleading or deceptive conduct claims; challenges to regulatory approvals which may result in project delays; and claims seeking compensation for harm caused by extreme weather events or natural disasters.

Higher than expected cost to reduce emissions at operations – Short: Q3 2025 to end of 2026; Medium: 2027–2036; Long: 2037 & later. Woodside's producing facilities are subject to environmental regulatory limits including for Scope 1 and 2 GHG emissions. These vary across regions and have the potential to become more stringent beyond the trajectory contemplated under Woodside's net equity Scope 1 and Scope 2 GHG emissions reduction targets and its net zero by 2050 aspiration.

Lower than expected product demand – Short: Q3 2025 to end of 2026; Medium: 2027–2036; Long: 2037 & later. There are a wide range of possible scenarios and accordingly, there remains a risk that countries may pursue policies that lead to lower levels of product demand over time compared to the external scenarios that inform Woodside's analysis.

Transition opportunities

Increased demand for LNG – Short: Q3 2025 to end of 2026; Medium: 2027–2036; Long: 2037 & later. There are scenarios in which countries may pursue policies that lead to higher levels of gas demand over time than Woodside expects.

Increased demand for new energy products and lower-carbon services – Short: Q3 2025 to end of 2026; Medium: 2027–2036; Long: 2037 & later. Woodside is developing a number of opportunities that could lead to the profitable delivery of new energy products (such as ammonia) and lower-carbon services (such as CCS) to customers.

Lower than expected decarbonisation costs – Short: Q3 2025 to end of 2026; Medium: 2027–2036; Long: 2037 & later. Policy settings may evolve leading to a lower cost of asset decarbonisation than Woodside expects.

Information on the boundaries applied to this 2025 assessment includes: materiality for the purposes of disclosing CRROs has been identified by reference to financial materiality, consistent with the financial statements. In addition, the Report includes information relating to CRROs that, while not meeting the financial materiality threshold, could reasonably be expected to influence decisions that primary users of general purpose financial reports make on the basis of those reports. These material CRROs are relevant to Woodside's current value chain.

Value chain

Woodside's global portfolio includes oil, gas and new energy assets across Australia, the US, Trinidad and Tobago, Senegal, Mexico, Timor-Leste and Canada. Woodside has also considered the impact of climate and the energy transition and assessed the financial impact of its material climate-related risks and opportunities across Woodside's value chain (upstream and downstream).

Concentration of risks and opportunities by value chain component

Extreme weather intensification (physical risk): has the potential to primarily impact the Project execution, Operate and Marketing, trading and shipping components of our value chain. In the long term, more frequent or severe metocean events could lead to higher operating or maintenance costs, increased downtime, and/or additional costs of insurance. An increase in extreme heat days could affect labour force productivity and cause supply chain disruptions.

Reputation (transition risk): has the potential to impact the Acquire, Divest, Explore and Develop, Operate and Project execution components of our value chain. Relationships with important stakeholders could be impacted making it more difficult to secure regulatory consents, financing, or human resources.

Climate litigation (transition risk): misleading or deceptive conduct claims have the potential to impact various components of Woodside's value chain. Challenges to regulatory approvals which may result in project delays could impact the Project execution and Operate components of Woodside's value chain including operating expenses, and could also impact the timing of revenue. Climate attribution cases ordinarily arise with respect to oil and gas projects, and have the potential to impact various components of our value chain.

Higher than expected cost to reduce emissions at operations (transition risk): has the potential to primarily impact the Project execution and Operate components of our value chain.

Lower than expected product demand (transition risk): has the potential to have impacts across the Operate, Marketing, trading and shipping components of Woodside's value chain.

Increased demand for LNG (transition opportunity): has the potential to impact the Acquire, Divest, Explore and Develop, Project execution, Operate and Marketing, trading and shipping components of Woodside's value chain.

Increased demand for new energy products and lower-carbon services (transition opportunity): has the potential to impact the Acquire, Divest, Explore and Develop, Project execution, Operate and Marketing, trading and shipping components (new energy and lower-carbon services) of Woodside's value chain.

Lower than expected decarbonisation costs (transition opportunity): has the potential to impact the Project execution and Operate components of Woodside's value chain.

Woodside's climate strategy is integrated throughout our company strategy: our aspiration to thrive through the energy transition by developing a low-cost, lower-carbon, profitable, resilient and diversified portfolio.

Our climate strategy contains two key elements: reducing our net equity Scope 1 and 2 GHG emissions; and investing in products and services for the energy transition.

Reducing our net equity Scope 1 and 2 GHG emissions is supported by three levers: avoiding emissions in design; reducing emissions in operations; and offsetting the remainder with carbon credits.

Investing in products and services for the energy transition is also supported by three levers: assessing investments for their resilience to the energy transition; diversifying our products and services; and supporting our customers and suppliers to reduce their emissions.

These levers are further supported by our work to promote global measurement and reporting – including our own publication of transparent disclosures.

Woodside published a Climate Transition Action Plan and 2023 progress report in February 2024. Progress against this plan relevant to 1 January to 31 December 2025 is outlined in this report. Woodside is a signatory to global decarbonisation initiatives, including the World Bank's Zero Routine Flaring Initiative, UNEP's OGMP 2.0, and the Oil and Gas Decarbonisation Charter (OGDC).

Reducing net equity Scope 1 and 2 GHG emissions

GHG emissions reduction at facilities can be achieved through the way they are designed ('design out emissions') or by changes to the way they are operated after construction ('operate out emissions').

Efficient operations: The emissions efficiency of Woodside's current operations, measured as Scope 1 and 2 GHG emissions per unit of production (kg CO2-e/boe) compares well to the global average efficiency data provided by the IEA. Woodside's 2025 actual performance was 27% better (or, 12.4 kg CO2-e/boe) than the benchmark comparator.

Asset decarbonisation plans: Our operated production assets identify opportunities to reduce GHG emissions via asset decarbonisation plans. The main opportunities include energy efficiency and process optimisation measures, flaring and fugitive methane reduction, and electrification such as the use of renewables and batteries. As these opportunities are studied and matured, and if they are safe, technically viable and have an abatement cost of <US$80/t CO2-e they are considered for inclusion into business plans. At the end of 2025, projects which are expected to deliver approximately 50% of the GHG emissions reduction benefits of currently identified opportunities over the remaining facility life have commenced. In 2025, Woodside achieved record low flaring performance at KGP with flared quantities less than 10% of their peak in 2013, reducing GHG emissions by 62 kt CO2-e compared to the originally budgeted plan.

Focus on methane: Management of methane emissions receives particular focus within our asset decarbonisation plans. In 2024, Woodside joined the OGMP 2.0. During 2025, Woodside submitted its implementation plan to UNEP which has confirmed it meets the requirements as a "Gold Standard Pathway". This methane emissions management plan includes improving our ability to measure methane emissions, taking action to reduce them where identified, transparent reporting of data, and supporting the adoption of best practice across industry and regulation. As part of the plan, we have also set a five year (to 2029) intensity target to maintain methane emissions intensity below 0.2% of production by volume at operated assets.

Large scale abatement: Electrification, hydrogen fuelling and CCUS are all methods for reducing GHG emissions from our electrical and mechanical turbines, which for a typical LNG facility account for a range of 75–85% of facility GHG emissions. During 2025, engineering work on the leading opportunity at the Pluto facility was completed. Hydrogen fuelling of turbines had emerged as the leading opportunity, with hydrogen generated from natural gas auto thermal reforming with CCS. Engineering studies confirmed that unit abatement costs remain several times higher than Woodside's US$80/t CO2-e carbon price (real terms 2024). While there is no further technical work to progress at this time, Woodside is continuing to pursue policy advocacy, technology development and market engagement.

Carbon credits: Woodside uses carbon credits to offset gross equity Scope 1 and 2 GHG emissions that are above our net GHG emissions reduction target trajectory and to meet regulatory requirements in a given year. We prioritise abatement at facilities before we use carbon credits as offsets. As at 31 December 2025, Woodside continues to manage a portfolio of more than 20 million carbon credits sourced from projects registered under established carbon crediting schemes, including the ACCU Scheme, Verra, Gold Standard and the Climate Action Reserve. Woodside currently uses a mix of avoidance and removal type carbon credits, with the current approach seeking to increase the proportion of land-based, removal carbon credits over time.

Investing in products and services for the energy transition

Woodside expects sustained demand for natural gas through the energy transition in the decades ahead. We also expect growing demand for new energy products (such as hydrogen and hydrogen derivatives like ammonia) and lower-carbon services (like CCS). Each new investment is tested against the hurdle rates in our Capital Allocation Framework. Analysis includes explicit consideration of the resilience of an investment to the energy transition – including scenario analysis, risks and opportunities, and Scope 1, 2 and 3 GHG emissions. We further inform this analysis through direct engagements with customers. We have representative offices in Japan, China, Korea, Singapore and the United Kingdom.

Themes heard from customers in 2025 included: decarbonisation remains an important priority and has to be delivered alongside energy security and affordability; LNG and natural gas are a key linkage between energy security and decarbonisation goals; markets for new energy products and lower-carbon services are taking longer to develop than originally anticipated; each region has its own set of unique opportunities and challenges through the energy transition; energy policy and market settings need to contribute to the reliability and long term security of LNG supply.

Our analysis of this expected demand is a driver for our recent LNG investments including the Scarborough Energy Project and Louisiana LNG, as well as our Beaumont New Ammonia project, which started production in 2025 and is planning to commence the use of CCS in 2026. Beaumont New Ammonia is expected to account for $2.35 billion (inclusive of final completion payment) of our $5 billion Scope 3 investment target, and 1.6 Mtpa of our 5 Mtpa Scope 3 emissions abatement target.

Progress against prior plans

Cumulative expenditure against our Scope 3 investment target reached $2.6 billion at the end of 2025, up from $2.46 billion at the end of 2024. This is due to expenditure on Neosmelt, Beaumont New Ammonia Phase 2 assessment, and select CCS opportunities in Asia Pacific. Woodside delivered its 2025 net equity Scope 1 and 2 GHG emissions reduction target, achieved through a combination of underlying emissions performance at our facilities and the use of carbon credits.

Current financial effects

For the year ended 31 December 2025, there were no material quantifiable financial impacts to the financial performance, position and cash flow arising from these climate-related risks and opportunities. In addition, Woodside did not identify any material adjustments and there were no requirements to adjust resourcing. The cost of responding to these material climate-related risks and opportunities are inherently built into our current business processes and systems, resourcing and work plans and budgets.

Woodside took a decision to exit the H2OK Project during 2025 due to ongoing challenges facing the lower-carbon hydrogen industry, including cost escalation and lower than anticipated hydrogen demand. Woodside recognised an impairment loss of $143 million pre-tax ($113 million post-tax) in the profit and loss statement relating to the H2OK Project.

Anticipated financial effects

Quantification is defined as Low = US$0–US$195 million; Moderate = US$195 million–US$1 billion; High = More than US$1 billion. Woodside identified and subsequently quantified several CRROs within the High category, at or over US$1 billion. An upper limit on the High range is not provided because the level of measurement uncertainty involved in estimating such a limit is so high that the information would not be useful. Quantification is an aggregate amount with the potential to occur across the time horizon identified, i.e. not an annually reoccurring amount, and is presented on a mitigated basis.

Extreme weather intensification: Quantification basis assessed impact on financial performance from an increase in extreme heat days upon Australian operations in the Pilbara region of WA, assessed as "Moderate", over the long-term.

Reputation: The level of measurement uncertainty was sufficiently high such that the resulting quantitative information would not be useful. No quantification has been calculated.

Climate litigation: Misleading or deceptive conduct claims in the short and medium term were quantified in the "low" range, based on an estimate of external legal costs of defending one to two proceedings in any given year. For challenges to regulatory approvals which may result in project delays, quantified based on a hypothetical project delay of up to 12 months, contemplating an impact on financial position from a delay of a single major project, assessed as being in the "high" category in the medium and long-term. Due to lack of precedent in the long-term for climate attribution cases, no quantification has been provided.

Higher than expected cost to reduce emissions at operations: Quantified by applying a 50% premium to Woodside's current carbon cost assumptions for emissions currently covered by the Australian SGM, with impact to the financial position in the "high" category in the long-term.

Lower than expected product demand: Quantified by assessing the impact to financial position (net asset carrying values) using Woodside's lowest long-term price assumption on a risk-weighted basis; potential financial impact in the long term assessed as "high".

Increased demand for LNG (opportunity): Quantified by assessing potential increase to financial performance (revenue) should Woodside maintain its current market share of a larger total addressable market for LNG emerging from 2035 to 2050; assessed as "moderate" to "high" in the medium to long-term.

Increased demand for new energy products and lower-carbon services (opportunity): Quantified through the potential impact to financial position (net present value of current equity in Australian CCS projects), and the potential for additional projects in response to policy conditions; quantified as "moderate" in the long-term.

Lower than expected decarbonisation costs (opportunity): Quantified by applying a 50% discount to current carbon cost assumptions for emissions currently covered by the Australian SGM, with impact potentially rising into the "high" category in the long-term.

Woodside modelled a hypothetical average annual adjusted free cash flow (FCF) for its portfolio of producing assets and sanctioned projects in five-year increments from 2026 to 2040 under IEA NZE, S&P 1.5, IEA STEPS and IEA CPS scenarios:

If the 1.5°C scenarios used in this analysis were to eventuate, management action would be required to maintain positive cashflow. These management actions may include acquisitions, divestments, production curtailment or cost reduction. It is not possible to model such actions in sufficient detail to present reliable quantitative data.

In determining the financial impact of each individual CRRO, financial information that is not publicly available and is considered by Woodside to be commercially sensitive, such that disclosure of the information would prejudice the economic benefits from the CRRO, was excluded from the quantification.

Woodside uses climate-related scenario analysis to inform its assumptions about future energy demand and pricing as well as its engineering design parameters. Scenario analyses are not forecasts, but they can provide a view of different potential futures.

As required by the AASB S2, Woodside has assessed the resilience of its strategy and business model to two different sets of climate scenarios: energy market scenarios that are associated with different global temperature outcomes, including 1.5°C outcome scenarios which test resilience to rapid decarbonisation in the near term; and physical impact scenarios, including those which consider temperature outcomes of more than 2.5°C of warming, to test resilience to the impacts of climate change in the medium term. For the specific purposes of the resilience testing section of this report, the analysis was concluded in January 2026.

Rapid decarbonisation in the near term

The approach to resilience testing in this report has been developed to meet the requirements of AASB S2. It is one part of informing Woodside about CRROs, not a complete method, and results do not represent Woodside's best estimate of how energy markets may develop.

Woodside utilised pricing assumptions derived from three scenarios in the IEA's World Energy Outlook 2025 (Current Policies Scenario - CPS, pointing towards ~3°C in 2100; Stated Policies Scenario - STEPS, pointing towards 2.5°C in 2100; NZE by 2050 Scenario, where peak warming exceeds 1.5°C for several decades, returning below 1.5°C by 2100), and one scenario from S&P Global (Net Zero 2050 Scenario, limiting warming to 1.5°C by 2100).

Woodside does not see evidence of policy, market or technology developments progressing in ways that are consistent with the two 1.5°C aligned scenarios used in this analysis. Neither the IEA NZE nor S&P Global's 1.5°C scenario are expected by Woodside to arise in the foreseeable future, because of their current and foreseeable lack of adoption by policy makers, misalignment with national energy security and decarbonisation pathways, and their requirements for deep declines in demand, counter to the strong demand Woodside has experienced for its LNG from Asian and European customers over the past two years.

The pricing data from these scenarios was used to calculate a hypothetical Woodside average annual adjusted free cash flow (FCF) for its portfolio of producing assets and sanctioned projects in five-year increments from 2026 to 2040. Results indicated Woodside's FCF is modelled as positive when using CPS and STEPS data through to 2040. If the 1.5°C scenarios were to eventuate, management action would be required to maintain positive cashflow from the 2031–2035 period (for NZE) and from the 2036–2040 period for S&P 1.5.

Physical impacts of climate change

In 2025, Woodside conducted a physical climate risk scenario analysis, incorporating assessment of 99 locations along Woodside's value chain in 16 countries, including both operated and non-operated assets, both existing or planned, and both offshore and onshore. The analysis also included assessment of 14 downstream locations, such as loading and discharge ports, and five locations of upstream suppliers.

The analysis was conducted using Shared Socio-economic Pathways (SSP) from the IPCC's Sixth Assessment Report: RCP 2.6/SSP1-2.6 (1.8°C, P5-95 range 1.3–2.4°C); RCP 4.5/SSP2-4.5 (2.7°C, P5-95 range 2.1–3.5°C); RCP 8.5/SSP5-8.5 (4.4°C, P5-95 range 3.3–5.7°C). Time horizons: Short (2026); Medium (2027–2036); Long (2037 and later). Climate indicators: heat stress, temperature extremes, severe weather, flooding, drought, and metocean conditions.

Woodside has also considered SSP1-1.9 as a 1.5°C pathway; however, limited availability of downscaled data for SSP1-1.9 constrains assessment, so Woodside has adopted SSP1-2.6 as its lower-warming scenario.

Results: The analysis identified a high exposure of Woodside's workers to heat stress, with exposure increasing over the time horizons under all scenarios, given key operations occur in remote, high-temperature regions. The Léopold Sédar Senghor FPSO in Senegal was particularly identified as already exposed to high temperatures. The analysis also identified existing high exposure to severe metocean conditions including cyclones, hurricanes and other storms, relevant for workers, assets, and downstream ports and shipping routes; however, exposure to this hazard is not increasing materially over the short-, medium- or long-term time horizons for any of the scenarios assessed. More than one third of loading and third-party discharge ports currently have higher exposure to the risk of cyclones, hurricanes and revolving storms, with a concentration in Japan, and exposure identified in the US and Taiwan. Heavy rainfall and flooding risks are also projected to intensify at discharge ports in Indonesia, China, and Japan.

Existing mitigation controls include extreme heat management guidelines, production planning, and design standards intended to withstand extreme weather events that occur in the range of one in 1,000 years to one in 10,000, with design sensitivities performed for selected assets against SSP5-8.5, a 4°C scenario.

Assessment of resilience

Woodside's business and corporate strategy has been assessed by Woodside as resilient in the short-, medium- and long-term to the identified material climate-related risks and opportunities. For the year ended 31 December 2025, there were no material quantifiable financial impacts to the financial performance, position and cash flow arising from these climate-related risks and opportunities. In addition, Woodside did not identify any material adjustments and there were no requirements to adjust resourcing. The cost of responding to these material climate-related risks and opportunities are inherently built into our current business processes and systems, resourcing and work plans and budgets.