Capital Alignment

The use of fossil fuels for energy accounts for around three quarters of total anthropogenic greenhouse gas emissions.¹ This means that efforts to meet climate change goals must include changes to the way that the world produces and consumes energy. These changes are referred to as the ‘energy transition’. The precise shape and pace of the energy transition is uncertain. It is expected to vary across countries because they have different starting points, development requirements, resources and capabilities. However, the scale of the transition is clearer, as it will take many trillions of dollars, invested over decades. In 2023, the International Renewable Energy Agency (IRENA) estimates it will require $150 trillion of cumulative investment by 2050.² Whilst the scale of the investment required for the energy transition creates opportunity for Woodside, its inherent uncertainty and potential volatility creates risks. We believe that acknowledging the uncertainty and building resilience to it is a better response than picking a single future scenario and acting as if it were certain. This approach requires us:

• to carefully analyse a wide range of energy market and climate-related scenarios,
• diversify our portfolio to meet changing customer demand,
• have a disciplined capital allocation framework to focus our investments where we believe we will be most competitive,
• work diligently with our customers to understand and meet their needs so that ultimately we secure their purchase of our products and services.