Its ascendancy is revealed in data from energy advisory firm EnergyQuest in its latest quarterly report, which includes a ranking of all upstream companies by production in the year to September 2012.
EnergyQuest figures show Woodside overtook BHP Billiton in the September 2012 quarter in terms of production from Australian assets thanks to a strong performance from Pluto LNG.
Woodside production jumped by 32% from 20.1 million barrels of oil equivalent in the June quarter to 26.3MMboe in the September quarter.
This took it past BHP Billiton's 24.3MMboe in the latest quarter, and was also a major factor in a record Australian petroleum production figure of 143MMboe.
BHP Billiton was still the biggest producer in terms of annual production, with 84.2MMboe in the year to September compared to Woodside's 76.6MMboe.
Pluto LNG has exceeded expectations since coming on stream in March, leading Woodside in October to upgrade its 2012 production guidance from between 77-83MMboe to between 83-86MMboe.
In fact, another quarter result such as it had in September will take Woodside past the top end of this range to a 2012 total of 86.8MMboe.
This assumes a continuing steady performance from Woodside's base business.
The non-Pluto operations were solid in the nine months to September 2012, with strong gains by some operations offsetting areas of continuing decline.
Vincent has been a big improver, with Woodside's share of production lifting to 4.8MMbbl in the first three quarters of 2012, up from 2.9MMbbl in the previous corresponding period.
Woodside's share of North West Shelf oil is also higher, up from 0.4MMbbl to 2.5MMbbl.
These performances have offset continuing declines in oil production from Enfield and Stybarrow.
Looking ahead to 2013, Woodside can expect around 100MMboe if present performances continue.
That would be enough to put Woodside ahead of BHP Billion in terms of annual production from Australian assets, and keep it there for the next few years.
BHP Billiton had some growth upside in its Australian assets, but not enough to close the gap to Woodside.
Production from BHP Billiton's Gippsland joint venture with ExxonMobil continued to bounce back, thanks to rising demand for gas in the eastern states.
BHP Billiton is also set to increase gas sales with the commissioning of the Macedon project next year. However, its other new Australian projects, Kipper and Turrum, are not expected to begin production before 2016.
BHP Billiton is also being let down by its oil projects in Australia. BHP Billiton's share of oil production dropped to 20.9MMbbl in the year to September 2012, down from 29.1MMbbl in the previous corresponding period.
The decline is being led by Pyrenees, where production output has dropped by 40% in the past year from 31.1MMbbl to 18.6MMbbl.
In contrast, Woodside's oil production increased from 15.3MMbbl to 17.5MMbbl.
The biggest threat to Woodside's leadership in overall petroleum production will come from Chevron and in two to three years when the Gorgon and Wheatstone LNG projects are commissioned.
A list of Australia's top 10 producers shows the big gap between Woodside and BHP Billiton and the rest of the industry.
It shows a cluster of companies - Chevron, BP, MIMI, Shell - who are stakeholders in the North West Shelf project, along with Woodside and BHP Billiton.
The other members of the top 10 are Santos, ExxonMobil, Apache and Origin.
ExxonMobil has been one of the biggest improvers this year, with production jumping from 6.9MMboe in the March quarter to 11.3MMboe in the September quarter.
This reflects a sharp rise in gas production from the Gippsland joint venture to the highest levels in five years. Associated increases in condensate production have also provided a boost.
Santos climbed to a higher level in 2012 thanks to new production from Reindeer and Spar and higher oil production from the Cooper Basin.
EnergyQuest data on petroleum production by Australian basins highlights the resurgence of the Cooper, where annual production in the latest year increased by almost 10% from 27.3MMboe to 29.7MMboe.
Growth from the Cooper Basin joint venture actually decreased, but this was more than offset by rising oil production from the western flank.
With more growth from the western flank locked by a number of producers, the Cooper Basin is set to become Australia's fastest growing basin in 2013.
The Carnarvon Basin continues to dominate Australian petroleum production, although output declined in the year to September from 326MMboe to 321.5MMboe. This reflected lower production from the North West Shelf, which was down from 233.3MMboe to 219.3MMboe.
The Gippsland Basin remained the second largest producer, with output rising from 70MMboe to 72MMboe, followed by the Surat-Bowen Basin, which was up from 39.9MMboe to 42.9MMboe, and the Cooper Basin.
Other basins also improved. The Bonaparte Basin increased production from 10.1MMboe to 10.7MMboe, thanks to the start up of ENI's Kitan oil field and higher production from Darwin LNG.
The gong for biggest increase in percentage terms went to the Perth Basin, where output lifted by 20%, from 2MMboe to 2.4MMboe thanks to a sharp increase in gas production.
Perth Basin production is set to increase further with the commissioning of Empire's Gingin West and Red Gully fields early next year.
