Key Materiality Issues

Woodside considers issues to be material if they have the potential to impact our ability to achieve our business strategy, or our reputation, or are of material concern to our stakeholders.

In 2015, we built on our existing materiality process by:

  • undertaking wider external stakeholder engagement;
  • evaluating sustainability issues across the value chain; and
  • evaluating sustainability aspects within our supply chain.

In the 2015 Sustainable Development Report we respond in detail to our top five material issues (pages 18 to 27). Our top 15 issues are presented in the materiality matrix and continue to be monitored and managed. Additional information and case studies are available here.

The materiality matrix illustrates the output from the prioritise and validate phase. The significance of the issue to the stakeholders and to our company are also outlined in the matrix.


1. Major incident prevention and response

While the likelihood of a significant uncontrolled release of hydrocarbons is low, the potential social, environmental and economic consequences can be extremely high. Loss of containment leading to a liquid hydrocarbon release from loss of facility integrity, well control or pipeline integrity, are all risks that must be managed by Woodside not only to prevent an incident, but also to mitigate the consequences if such events did occur.

Oil spill response plans are developed and are in place for all exploration, development, production and decommissioning operations, and they detail the response tactics and capability that should be drawn upon in the event of a spill.

Our Response

In 2014, Woodside carried out its Oil Spill Preparedness Improvement Project across its operations and activities. This resulted in significant improvements in contingency planning, competency and capability in oil spill preparedness that have continued to be developed throughout 2015.

In order to ensure that priorities and focus are maintained, a new team dedicated to spill preparedness and response was established in January 2015 to deliver continuous improvements of oil spill preparedness in the countries we operate in.

The key areas of focus are:

  • planning (contingency plans);
  • capability (contracts, equipment and services);
  • competency (training and exercising); and
  • compliance and assurance.

Woodside’s access to response capabilities include air, land, at-sea surface, at-subsea-surface and surface control.

Read more in pages 19-20 of the 2015 Sustainable Development Report


2. Climate change policy and response

As an energy producer, Woodside is exposed to the economic risks and opportunities of an accelerated transition by countries to being lower carbon emitters, uncertainty surrounding future regulatory and policy frameworks, and increasing social pressure for action on climate change.

Our Response

The world’s energy mix faces dual challenges of supplying sufficient energy for growth while reducing the environmental impacts of providing this energy.

We accept the Intergovernmental Panel on Climate Change’s assessment of climate change science and believe that natural gas has a major role to play in containing global average temperatures. We believe natural gas can – and needs to – play a pivotal role in the world’s future energy mix. Achieving this requires a stable regulatory framework capable of achieving current and future emissions reduction targets.

Natural gas provides the flexibility that renewable energy needs, as gas fired power stations can be ramped up or down faster than other fossil fuel plants. It also has lower emissions of greenhouse gases and local air pollutants than other fossil fuels.

As such, we see natural gas playing a central role in supporting economic growth and improving air quality in Asia’s rapidly developing mega-cities.

Read more in pages 20-21 of the 2015 Sustainable Development Report


3. Global health and safety performance

Woodside’s health and safety performance is critical to our business success. We must maintain our commitment to the health and safety of our people and communities across our activities in order to deliver on our goal of global top-quartile health and safety performance, as measured against our peers in the International Association of Oil and Gas Producers (IOGP).

Our Response

In 2015, Woodside continued to demonstrate improved health and safety performance. While overall performance improved, some functions need to continue to focus on delivering sustainable high performance.

Woodside has strong fundamentals in place. 'Our Safety Culture' and the 'Golden Safety Rules' provide a solid framework on which to build an effective safety culture. Throughout the year, communication across the organisation focused on reinforcing these fundamentals.

During 2015, consistent emphasis on the importance of visible leadership and supervisor engagement has been supported by simple and relevant messaging that everyone can use, such as:

  • engaging others in safety conversations and linking these conversations to Our Safety Culture behaviours;
  • checking and verifying understanding of Golden Safety Rules and the risks they control; and
  • improving hazard identification by reviewing the risks associated with tasks and always asking, 'what could go wrong?'

Read more in pages 22-23 of the 2015 Sustainable Development Report

4. Technical integrity

Woodside operates a number of assets that have been in production for many years and are at various stages of their life cycle.

As assets age, integrity and maintenance management are critical to preventing the potential for the failure of structures, piping, processes and equipment. These types of failures could lead to a loss of containment and deferred production.

Our Response

We manage technical integrity risks across our assets through adoption of robust standards, operating within established parameters and maintaining equipment critical for safety.

In recent years, this has led to significant investment to maintain and improve asset integrity:

  • continued execution of the Karratha Gas Plant (KGP) Life Extension Program targeting corrosion, equipment obsolescence and ageing facilities;
  • completion of the first planned inspection and maintenance turnaround of the Pluto LNG Plant, including novel intelligent pigging of the trunkline;
  • completion of piping replacements and removal of redundant major equipment on the Goodwyn A platform during major turnarounds;
  • completion of North Rankin A jacket structure inspection and removal of the redundant drill derrick; and
  • preparation for major dry dock maintenance of the Okha FPSO and in parallel in-field riser replacement in early 2016.

We are continuously improving our safety management systems and supporting processes. These include performance excellence initiatives to improve process safety management, as well as improving our medium and long-term integrated activity planning, equipment maintenance strategies and maintenance execution campaigns.

Read more in pages 24-25 of the 2015 Sustainable Development Report


5. Regulatory compliance

Woodside must operate an effective management framework to maintain our licence to operate, comply with regulatory requirements and meet the expectations of our joint venture participants and local stakeholders.

Our Response

A disciplined approach to regulatory compliance is central to Woodside's Compass values and is integral to demonstrating that we are a partner of choice. Complying with laws and regulations is important to maintaining our licence to operate and is required in all of our business activities, wherever we are present.

Our approach to managing and ensuring regulatory compliance is consistent and systematic, is fundamental to the Woodside Management System (WMS), and mandated through performance requirements in the Regulatory Compliance Management Operating Standard (the Standard). The WMS enables both discipline in our activities and working together as a team.

The Standard clearly defines accountability for regulatory compliance, provides a common language and sets the foundation for managing regulatory compliance, including improved visibility and transparency of performance. It is aligned to ISO 19600-2014 Compliance Management Systems.

Supporting the Standard are the Regulatory Compliance Management Guidelines, which provide structure and more detailed guidance to compliance personnel.

Embedding the performance requirements of the Standard into business processes is important to ensure that we achieve and maintain regulatory compliance, including:

  • incorporating regulatory compliance management as a clear expectation within the updated Woodside Management System and ensuring that process improvement emphasises regulatory compliance requirements; and
  • integrating regulatory compliance management expectations into the Opportunity Management Framework used in the development of projects and improved regulatory compliance management when assessing and entering into new opportunities.

Read more in pages 26-27 of the 2015 Sustainable Development Report