108 Woodside Petroleum Ltd|Annual Report 2018
NOTES TO THE FINANCIAL STATEMENTS A. EARNINGS FOR THE YEAR
for the year ended 31 December 2018
A.1 Segment revenue and expenses
Operating segment information
The Group has identiﬁed its operating segments based on the
internal reports that are reviewed and used by the executive
management team in assessing performance and in determining
the allocation of resources. The producing operating segments
are consistent with the 2017 Financial Statements. In the reporting
period, the Group’s development projects have been consolidated
into one development segment for internal reporting purposes
which comprises the Browse, Scarborough, Kitimat, Myanmar,
Sunrise and Senegal projects. With the exception of Browse,
which was previously a separate reporting segment, all other
projects were previously included in the other reporting segment.
Comparatives have been restated to reﬂect the updated operating
segments reported internally.
Management monitors the performance of the operating results
of the segments separately for the purpose of making decisions
about resource allocation and performance assessment. The
performance of operating segments is evaluated based on proﬁt
before tax and net ﬁnance costs and is measured in accordance
with the Group’s accounting policies.
Financing requirements, including cash and debt balances, ﬁnance
income, ﬁnance costs and taxes are managed at a Group level.
Operating segments outlined below are identiﬁed by
management based on the nature and geographical location
of the business or venture.
Major customer information
The Group has two major customers which account for 19% and
14% of the Group’s external revenue. The sales are generated by
the Pluto and North West Shelf operating segments (2017: two
customers; 20% and 15%).
USm USm USm USm
1. Revenue is attributable to geographic location based on the location of the customers.
2. Non-current assets exclude deferred tax assets of US$1,179 million
(2017: US$1,125 million).
3. 2017 amounts have been restated for the retrospective application of AASB 15.
Recognition and measurement
Revenue from contracts with customers
Revenue is recognised when or as the Group transfers control of
products or provides services to a customer at the amount to which
the Group expects to be entitled. If the consideration includes a
variable component, the expected consideration is adjusted for
the estimated impact of the variable component at the point of
recognition and re-estimated at every reporting period.
• Revenue from sale of produced hydrocarbons
Revenue from the sale of produced hydrocarbons is recognised
at a point in time when control of the product is transferred to
the customer, which is typically on delivery.
Revenue from take or pay contracts is recognised in earnings when
the product has been drawn by the customer (transfer of control)
and recorded as unearned revenue until drawn by the customer.
• Other operating revenue
Revenue earned from LNG processing and other services is
recognised over time as the services are rendered.
Trading and other hydrocarbon revenue earned from sales
of third-party products is recognised at a point in time when
control of the product is transferred to the customer, which is
typically on delivery.
• Royalties and excise duty
Royalties and excise duty under existing regimes are considered
to be production-based taxes and are therefore accrued on the
basis of the Group’s entitlement to physical production.
North West Shelf Project – Exploration, evaluation,
development, production and sale of liqueﬁed natural gas,
pipeline natural gas, condensate and liqueﬁed petroleum gas
from the North West Shelf ventures.
Pluto LNG – Exploration, evaluation, development, production
and sale of liqueﬁed natural gas and condensate in assigned
Australia Oil – Exploration, evaluation, development,
production and sale of crude oil in assigned permit areas
(North West Shelf, Enﬁeld and Vincent).
Wheatstone LNG – Exploration, evaluation, development,
production and sale of liqueﬁed natural gas and condensate in
assigned permit areas.
Development segments – This segment comprises
exploration, evaluation and development of liqueﬁed natural
gas and condensate in the Browse, Scarborough, Kitimat,
Myanmar, Sunrise and Senegal projects.
Other segments – This segment comprises trading and
shipping activities and activities undertaken in other
Unallocated items – Unallocated items comprise primarily
corporate non-segmental items of revenue and expenses and
associated assets and liabilities not allocated to operating
segments as they are not considered part of the core
operations of any segment.
Key estimates and judgements
Revenue from contracts with customers
Judgment is required to determine the point at which the customer
obtains control of hydrocarbons. Factors including transfer of legal title,
transfer of signiﬁcant risks and rewards of ownership and the existence
of a present right to payment for the hydrocarbons typically result in
control transferring on delivery of hydrocarbons at port of loading or
port of discharge.
The transaction price at the date control passes for sales made subject to
provisional pricing periods in oil and condensate contracts is determined
with reference to quoted commodity prices.
Progress of performance obligations for LNG processing services
revenue recognised over time is measured using the output method
which most accurately measures the progress towards satisfaction of the
performance obligation of the services provided.