Woodside’s strategy is to diversify and adapt, rather than choosing a single course in advance and acting as if the energy transition were more certain than it is. We are working to diversify our portfolio by adding new products and services alongside our existing products, where we believe we have a competitive advantage to supply them successfully through the energy transition. They each bring different qualities to the portfolio.
Asia has more than half of the world’s people and is growing.1 Across Asia many countries are still heavily reliant on coal which accounts for approximately 50% of total energy supply in the Asia Pacific.2 Woodside’s LNG is located close to Asian customer demand centres which enables lower shipping emissions.3 LNG typically offers longer-term cash flows and lower Scope 3 intensity (but higher Scope 1 intensity) than the oil projects in Woodside’s portfolio.
Oil demand is expected to decline as its use in light passenger transport is substituted by vehicle electrification.4 Demand in petrochemicals and heavy transport is likely to be resilient for longer. Some agencies expect global oil demand to peak in the 2030s,4,5 but in most scenarios will still require investment in supply.6
The IEA expects global oil demand to peak in the 2030’s in its Stated Policies Scenario (STEPS), or sooner if global decarbonisation action accelerates. The range of oil use in 2050 in the Intergovernmental Panel on Climate Change’s (IPCC) C1 to C3 (1.5°C to 2°C) range is 15 to more than 230 EJ per year.7 In 2023, oil consumption was 172 EJ. 8
Woodside's oil projects tend to provide higher cash and higher returns, lower Scope 1 and 2 GHG emissions (though higher Scope 3 GHG emissions) and shorter-term paybacks than the LNG projects in Woodside’s portfolio. The global oil market is commoditised and as a result changes in demand are likely to be reflected in oil prices. This, in turn, affects investment in supply, which should moderate accordingly.
Woodside is developing new energy products that are expected to supply energy to customers with lower-carbon emissions at the point of use than oil and gas products. We take a disciplined approach to new investments that seeks to match the pace, scale and needs of our customers as they determine their own decarbonisation pathways.
Woodside is evaluating lower-carbon services including carbon capture and storage (CCS), carbon capture and utilisation (CCU), and investing in carbon credits to enable our base business, help our customers decarbonise, and deliver future value to shareholders.
Woodside’s high margin portfolio is made up of quality assets that have the scale and resilience to deliver long-term value.
