After giving the performance review, I will then outline our growth strategy as we prepare for the major capital investment programme which is planned for the next five years.

OPERATIONS In describing the Company's activities during 2002, I have divided them as usual into three broad categories or horizons:

Firstly, in Horizon 1, those activities which optimise the production and profitability of our existing assets;

In Horizon 2, those activities intended to create the infrastructure for new production through effective and profitable capital investment; and

In Horizon 3, those activities that grow our hydrocarbon reserves and create new long-term business opportunities.

In relation to Horizon 1, the North West Shelf Venture continued to provide strong underpinning cash flow to Woodside.

A new monthly production record was set last November when a daily average of 557,000 barrels of oil equivalent per day was achieved. This surpassed previous 2002 records which were set in July and August.

During the year, we reinforced our commitment to the health and safety of our people and to our care for the environment. I am pleased to report a 27% improvement in the frequency of recordable injuries in 2002, which includes lost time injuries, medical treatment and restricted work cases. However, we continued to experience injuries amongst our colleagues and contractors which are always painful and quite frequently serious. We have redoubled our efforts this year. I believe that we must view our safety performance as improving but unsatisfactory until we have avoided all injuries and incidents associated with our activities.

Having said this, I would like to acknowledge the achievement by the LNG Train 4 project team of a major safety milestone with 3.9 million hours worked up to the end of December 2002 without a single lost time injury.

Furthermore, with regard to the environment, the Goodwyn A facility was awarded an ISO 1401 Certificate, which is an international standard for environmental management. This is an important achievement and is the first certification at this level to be given to an Australian fixed offshore platform.

During 2002, the North West Shelf Venture once again proved its reliability with an outstanding 100% LNG cargo delivery record. 127 LNG cargoes were sold to Japan, with three spot cargoes to Korea plus one spot cargo to BP Gas Marketing. Woodside's share of produced LNG sales at 1.27 million tonnes was in line with that of the previous year.

The North West Shelf Venture also experienced strong demand for domestic gas in 2002 with gross production of 534 terajoules per day, a similar level to that of 2001. This was despite the operational difficulties experienced at BHP Billiton's Direct Reduced Iron plant at Port Hedland. The plant is currently taking gas at forecast levels and we expect demand for North West Shelf domestic gas in 2003 to exceed last year's production by more then 4%.

Production from the Echo-Yodel gas and condensate development, located in the North West Shelf, commenced in December 2001. This project was largely responsible for the 18% increase in Woodside's share of 2002 condensate production at 9.95 million barrels.

With increased condensate production, Woodside's LPG volumes also increased to 135,000 tonnes in 2002.

At the Cossack Pioneer the anticipated start of the decline in Cossack oil production did not eventuate in 2002. Strong performance of this facility saw North West Shelf Venture crude oil production actually rise by 2% to average 119,900 barrels per day. Our projections now assume that North West Shelf oil production will start to decline in 2003.

At the Legendre facility, 100 kilometres north of Dampier, oil production was up by 75%, largely due to a full 12 months of production in 2002 compared to only eight months of production in 2001. The average 2002 Legendre production was 31,000 barrels of oil per day.

Finally, the Woodside operated Laminaria/Corallina oil fields of the Timor Sea produced 15.2 million barrels of oil equivalent for Woodside, down by 26% compared to 2001 levels. This was anticipated and was a consequence of natural field decline due to the programmed depletion of reserves. This decline would have been more marked if it had not been for the excellent performance of the Laminaria operations teams which resulted in a best practice facility uptime of 99%. The total annual operating cost for the facility was also significantly reduced such that, despite the decline in production, unit operating costs only increased marginally from $1.26 to $1.33 per barrel in 2002.

Due to the efforts of our production and development staff, the significant production decline at Laminaria was largely offset so that Woodside's total production for 2002 was 64.2 million barrels of oil equivalent, only 3% lower than that of 2001.

Moving to Horizon 2 which looks at activities intended to create new production, the $2.4 billion dollar expansion of the North West Shelf Venture's gas processing facilities was a major focus of development efforts during 2002. The train 4 project commenced in April 2001 and was 60% complete by the end of 2002, while the second trunkline began in June 2002 and was 30% complete by late December. A $300 million LNG ship is also being built to support the expansion of gas processing facilities and is expected to be delivered in early 2004. A major review of performance against the project's cost and schedule milestones will be completed around mid-2003 in anticipation of the start-up of gas processing which is planned for mid-2004.

LNG sales and purchase agreements were signed with key Japanese customers which underpin the investment in the 4th LNG train at Karratha and the second large diameter pipeline from North Rankin to shore.

We also signed our first term contract with the Korea Gas Corporation for the sale of 500,000 tonnes per year for seven years commencing in late 2003.

Opportunity to create further new LNG processing capacity also took an important step forward with the signing of the Letters of Intent to supply China with its first LNG to which Charles Goode has already referred. A decision regarding investment in a 5 th LNG processing train will need to be made by the North West Shelf joint venturers during the next 12 months or so.