Bhp Group Ltd · ASX:BHP
Bhp — Investor Day (December 2021)
30 slides from Bhp's investor day presentation, Dec 8, 2021
Slide 1: Investor Update 2021
INVESTOR UPDATE 2021 8 December 2021 www.woodside.com.au investor@woodside.com.au
Slide 2: Disclaimer, risks and assumptions
Disclaimer, risks and assumptions Disclaimer and risks Notes to petroleum resources estimates • Our investors and potential investors have requested that Woodside continues to provide further detail and information in 1. Unless otherwise stated, all petroleum resource estimates are quoted as at the
Slide 3: Agenda
Agenda STRATEGY 1 2 CAPITAL ALLOCATION SHAREHOLDER RETURNS 3 CLIMATE 4 NEW ENERGY 5 MERGER AND DEVELOPMENTS 6 3
Slide 4: Thriving through the energy transition
Thriving through the energy transition PROFITABLE LOWER CARBON RESILIENT OPTIMISE VALUE AND LOW COST DIVERSIFIED SHAREHOLDER RETURNS 4
Slide 5: Strategic framework
Strategic framework COMPETITIVE DISCIPLINED CAPITAL ADVANTAGE ALLOCATION Robust assessment of Highly valued products opportunities, portfolio outcomes World-class Tier 1 assets and shareholder returns Enablers Diversification within known Disciplined capital spend value chains bound by defined targe
Slide 6: ESG is part of our core business
ESG is part of our core business Environmental Social Governance Climate change resilience and transition Social and cultural impacts on communities Health safety and wellbeing Environment and biodiversity People and culture Corporate governance Decommissioning Supply chain and local content Major i
Slide 7: Market analysis
Market analysis Estimated cumulative investment under the range of IEA scenarios ($US trillion) Investment in oil and gas exceeds hydrogen investment in all scenarios Increased investment in hydrogen needed to support the Net Zero Emissions 2050 pathway Stated Not Paris aligned. Global temperature r
Slide 8: Climate testing
Climate testing 1 Indicative average annual free cash flow under the range of IEA scenarios Product pricing is the primary driver of the variation Portfolio decisions are assessed against a wide range of climate scenarios Climate scenarios include International Energy Agency (IEA) scenarios IEA scen
Slide 9: Portfolio and opportunity optimisation
Portfolio and opportunity optimisation Opportunity evaluation considerations Portfolio evaluation considerations Free cash Funding Emissions Payback Strategic EPS IRR/NPV Risk Breakeven flow capacity profile period fit Growth opportunities are screened against portfolio metrics using price, scenario
Slide 10: Capital allocation framework
Capital allocation framework OIL GAS NEW ENERGY OFFSHORE PIPELINE LNG DIVERSIFIED Generate high returns to fund New energy products and lower Leveraging infrastructure to monetise undeveloped diversified growth, focusing on carbon services to reduce customers’ FOCUS gas, including optionality for hy
Slide 11: Shareholder returns
Shareholder returns OPTIMISE VALUE AND SHAREHOLDER RETURNS Special dividends Safe, Dividend Strong Share reliable and Investment policy balance buy-backs low cost expenditure (minimum 50% sheet payout ratio) operations Excess cash Future investment Investment grade Maintain dividend based Targeted c
Slide 12: Thriving in a lower-carbon future
Thriving in a lower-carbon future DECARBONISATION TARGETS Emissions reduction targets apply to 15% Woodside’s equity portfolio (operated 30% Net zero and non-operated) by 2025 by 2030 aspiration by 2050 or sooner 1 Equity net emissions reduction targets Clear targets consistent with 3 Paris-aligned
Slide 13: Scope emissions approach
Scope 3 emissions approach INVEST NEW ENERGY PRODUCTS | LOWER CARBON SERVICES 1 $5 billion invested by 2030 Collaboration with customers to build market demand Recent announcements: Heliogen, H2Perth, H2TAS, H2OK, CCS SUPPORT PROMOTE CUSTOMER AND SUPPLIER EMISSIONS REDUCTION GLOBAL MEASUREMENT AND R
Slide 14: Energy transition plan
Energy transition plan 2021 Mid-2020s 2030+ ENERGY TRANSITION PROGRESS Market Early new energy New energy development transition at scale • Build relationships across value chain• Achieve start-up of new energy • Export liquid hydrogen from projects Australia • Technology flexible (hydrogen, CCS, re
Slide 15: New energy opportunities
New energy opportunities H2Perth | Flexible design for hydrogen or ammonia H2OK | Emerging opportunity for heavy transport sector • Initial phase targeting ~110,000 tpa• Initial phase targeting ~33,000 tpa of hydrogen production including of liquid hydrogen leveraging 250 MW electrolysis component e
Slide 16: New energy growth plan
New energy growth plan Cumulative capacity (megawatts, indicative) Potential 2030 capacity ~3,000 megawatts Phased project expansion to match customer demand FEED | Execute Phase 1 (Pluto) Phase 2 Power for base business Phase FEED | Execute Phase 1 Phase 2 Heliogen 3 Assess | Select | FEED | Execut
Slide 17: Carbon business
Carbon business • Diverse, cost competitive foundation portfolio to support base business and Scarborough demand • Collaboration with customers for supply of carbon offset cargoes Secured offsets to meet 2025 High quality • ~10,000 ha of land secured for planting native trees net emissions reduction
Slide 18: 2021 priorities delivered and a merger underway
2021 priorities delivered and a merger Cost and efficiency transformation DISCIPLINED 1 underway EXPENDITURE Achieved targeted Scarborough FID in H2 2021 2 Proposed merger with CREATE AND 5 BHP’s petroleum PROTECT VALUE 3 business Delivering Sangomar Phase 1 Delivering value through BUILD OUR 4 the
Slide 19: Merger strategic rationale
Merger strategic rationale + All-stock merger of Woodside and BHP Petroleum Petroleum Complementary, long-life, high margin, tier 1 assets PORTFOLIO QUALITY Strengthens cash generation and balance sheet CASH GENERATION AND BALANCE SHEET Supports superior returns through continued capital discipline
Slide 20: International portfolio of Tier 1 assets
International portfolio of Tier 1 assets Senegal Sangomar ~ 200 MMboe 1 2021 production 2 Top 10 independent East coast Australia Houston Bass Strait 10.6 Mt 3 LNG production Gulf of Mexico Shenzi | Wildling | Atlantis | 4 Top 10 global Mad Dog | Trion Scarborough FID Perth achieved Attractive near-
Slide 21: Timeline to completion
Timeline to completion Q3 2021 Q4 2021 Q1 2022 Q2 2022 17 August 22 November Target for release of Target for Woodside shareholder Merger commitment deed Share sale agreement and shareholder materials meeting to approve issue of shares executed integration and transitional services agreement execute
Slide 22: Organisational design after completion
Organisational design after completion CEO Marketing Exploration Australia International and and New Energy Operations Operations Trading Development Strategy Technical Business Finance and Projects Services Services Climate 22
Slide 23: Planning opportunities to deliver synergies after merger completion
Planning opportunities to deliver synergies after merger completion • Implement existing activities already identified by Operations Transform initiatives and identify opportunities for broader implementation after completion • Potential to improve inventory management and consolidation of contracts
Slide 24: Scarborough and Pluto Train developments approved
Scarborough and Pluto Train 2 developments approved DEVELOPS WORLD-CLASS RESOURCE Scarborough floating production unit Pluto platform 11.1 Tcf 957 MMboe 1,433 MMboe 8 Mtpa of LNG 3 increase to 1P reserves development plus increase to 2P reserves resource size, 100% 225 TJ/day domestic gas PROVIDES L
Slide 25: Scarborough's role in the energy transition
Scarborough’s role in the energy transition LNG is required Scarborough is advantaged Woodside’s net zero aspiration 1 in a decarbonising world from a carbon perspective includes Scarborough tCO -e/ LNG can assist coal-to-gas 2 t LNG ~0.1 % ~0.26 switching in Asia Net zero Train 2 design intensity C
Slide 26: Sangomar progress
Sangomar progress SUBSEA Umbilical on carousel Inline structure sliding frame Assembled inline structure FPSO CONVERSION DALIAN Turret support Living quarters Turret support structure structure integration 26
Slide 27: Sangomar progress
Sangomar progress SENEGAL FPSO TOPSIDES – TIANJIN FPSO TURRET – PENGLAI Medium pressure gas compression Chain table support system coating Liquid mud plant topsides assembly completed Electrical house Turret head system coating Sumitomo tubular yard 27
Slide 28: Key messages
Key messages Thriving through the energy transition STRATEGY CAPITAL ALLOCATION Clear criteria for maximising value from portfolio optionality SHAREHOLDER RETURNS Flexible framework for distributing value to shareholders Corporate emissions reduction targets applying to the larger portfolio; CLIMATE
Slide 29: Additional information for US investors
Additional information for US investors No offer or solicitation Disclosure of reserve information and cautionary note to US investors • This presentation includes information relating to the proposed Transaction between Woodside and BHP. • Unless expressly stated otherwise, all estimates of oil and
Slide 30: Head Office: Woodside Petroleum Ltd
Head Office: Woodside Petroleum Ltd Mia Yellagonga 11 Mount Street Perth WA 6000 Postal Address: GPO Box D188 Perth WA 6840 Australia T: +61 8 9348 4000 F: +61 8 9214 2777 E: companyinfo@woodside.com.au Woodside Petroleum Ltd ABN 55 004 898 962 woodside.com.au Forward-looking statements This announc