CDP CDP 2016 Climate Change 2016 Information Request Oil Search Module: Introduction Page: Introduction CC0.1 Introduction Please give a general description and introduction to your organization. Oil Search was established in Papua New Guinea (PNG) in 1929. More than 98% of its assets are in PNG, where it operates all of the country’s producing oil fields, holds an extensive appraisal and exploration portfolio and has a 29% interest in the PNG LNG Project, operated by ExxonMobil PNG Limited. This world-class liquefied natural gas (LNG) development, which came on-stream in 2014, has transformed Oil Search into a regionally significant oil and gas producer with a long- term, low cost, high quality LNG revenue stream. The Company also holds a 23% interest in the proposed Papua LNG Project, operated by Total SA, which has the potential to become PNG’s next major LNG development. Oil Search has a clear strategy to drive future growth. This is focused on appraisal and exploration activities in PNG to prove up further gas to support potential PNG LNG Project expansion and the proposed Papua LNG Project which, once on-stream, have the potential to double Oil Search’s production. These projects are among the most competitive proposed new LNG developments in the world. Oil Search is listed on the Australian and Port Moresby stock exchanges (OSH) and its ADRs trade on the US Over The Counter market (OISHY). CC0.2 Reporting Year Please state the start and end date of the year for which you are reporting data. The current reporting year is the latest/most recent 12-month period for which data is reported. Enter the dates of this year first. We request data for more than one reporting period for some emission accounting questions. Please provide data for the three years prior to the current reporting year if you have not provided this information before, or if this is the first time you have answered a CDP information request. (This does not apply if you have been offered and selected the option of answering the shorter questionnaire). If you are going to provide additional years of data, please give the dates of those reporting periods here. Work backwards from the most recent reporting year. Please enter dates in following format: day(DD)/month(MM)/year(YYYY) (i.e. 31/01/2001).
Transcript
CDP CDP 2016 Climate Change 2016 Information Request Oil Search
Module: Introduction
Page: Introduction
CC0.1
Introduction Please give a general description and introduction to your organization. Oil Search was established in Papua New Guinea (PNG) in 1929. More than 98% of its assets are in PNG, where it operates all of the country’s producing oil fields, holds an extensive appraisal and exploration portfolio and has a 29% interest in the PNG LNG Project, operated by ExxonMobil PNG Limited. This world-class liquefied natural gas (LNG) development, which came on-stream in 2014, has transformed Oil Search into a regionally significant oil and gas producer with a long-term, low cost, high quality LNG revenue stream. The Company also holds a 23% interest in the proposed Papua LNG Project, operated by Total SA, which has the potential to become PNG’s next major LNG development. Oil Search has a clear strategy to drive future growth. This is focused on appraisal and exploration activities in PNG to prove up further gas to support potential PNG LNG Project expansion and the proposed Papua LNG Project which, once on-stream, have the potential to double Oil Search’s production. These projects are among the most competitive proposed new LNG developments in the world. Oil Search is listed on the Australian and Port Moresby stock exchanges (OSH) and its ADRs trade on the US Over The Counter market (OISHY).
CC0.2
Reporting Year Please state the start and end date of the year for which you are reporting data. The current reporting year is the latest/most recent 12-month period for which data is reported. Enter the dates of this year first. We request data for more than one reporting period for some emission accounting questions. Please provide data for the three years prior to the current reporting year if you have not provided this information before, or if this is the first time you have answered a CDP information request. (This does not apply if you have been offered and selected the option of answering the shorter questionnaire). If you are going to provide additional years of data, please give the dates of those reporting periods here. Work backwards from the most recent reporting year. Please enter dates in following format: day(DD)/month(MM)/year(YYYY) (i.e. 31/01/2001).
Enter Periods that will be disclosed
Thu 01 Jan 2015 - Thu 31 Dec 2015
CC0.3
Country list configuration Please select the countries for which you will be supplying data. If you are responding to the Electric Utilities module, this selection will be carried forward to assist you in completing your response.
Select country
Papua New Guinea
CC0.4
Currency selection Please select the currency in which you would like to submit your response. All financial information contained in the response should be in this currency. USD($)
CC0.6
Modules As part of the request for information on behalf of investors, electric utilities, companies with electric utility activities or assets, companies in the automobile or auto component manufacture sub-industries, companies in the oil and gas sub-industries, companies in the information technology and telecommunications sectors and companies in the food, beverage and tobacco industry group should complete supplementary questions in addition to the main questionnaire.
If you are in these sector groupings (according to the Global Industry Classification Standard (GICS)), the corresponding sector modules will not appear below but will automatically appear in the navigation bar when you save this page. If you want to query your classification, please email [email protected]. If you have not been presented with a sector module that you consider would be appropriate for your company to answer, please select the module below. If you wish to view the questions first, please see https://www.cdp.net/en-US/Programmes/Pages/More-questionnaires.aspx.
Further Information
Module: Management
Page: CC1. Governance
CC1.1
Where is the highest level of direct responsibility for climate change within your organization? Board or individual/sub-set of the Board or other committee appointed by the Board
CC1.1a
Please identify the position of the individual or name of the committee with this responsibility Oil Search's Health, Safety and Sustainability (HSS) Committee - The purpose of the Health, Safety and Sustainability Committee is to assist the Board to monitor the performance of the Company in respect of health, safety and sustainability matters. The role of the Health, Safety and Sustainability Committee is to oversee the strategies and processes adopted by management in these areas and to review whether the Company’s performance is in accordance with the Board’s policies and expectations.For more information please see Oil Search's Social Responsibility Microsite - http://socialresponsibility.oilsearch.com/approach/fundamentals/good-governance/
CC1.2
Do you provide incentives for the management of climate change issues, including the attainment of targets? Yes
CC1.2a
Please provide further details on the incentives provided for the management of climate change issues
Who is entitled to benefit from these incentives?
The type of incentives
Incentivized performance indicator
Comment
Environment/Sustainability managers
Monetary reward
Emissions reduction target Efficiency project Other: Variable depending on agreed objectives and timeframe .
Attainment of objectives relating to climate change related initiatives or projects are managed within Oil Search's overall performance incentive framework. This framework involves the setting of individual and function/team KPIs annually, the performance against which is assessed at year end. This assessment forms part of the decision on employee bonuses, salary and progression.
Further Information
Page: CC2. Strategy
CC2.1
Please select the option that best describes your risk management procedures with regard to climate change risks and opportunities Integrated into multi-disciplinary company wide risk management processes
CC2.1a
Please provide further details on your risk management procedures with regard to climate change risks and opportunities
Frequency of monitoring
To whom are results reported?
Geographical areas
considered
How far into the future are risks
considered?
Comment
Six-monthly or more frequently
Board or individual/sub-set of the Board or committee appointed by the Board PNG and MENA. 3 to 6 years
CC2.1b
Please describe how your risk and opportunity identification processes are applied at both company and asset level Oil Search’s approach to risk management framework has been established to ensure that risks to Oil Search’s corporate objectives are well understood and effectively managed at both company and asset levels. A tiered process is applied, which identifies and assess risks at operational, project, corporate and strategic levels. The particular circumstances determine the specific risk identification methodology that is applied. For example, Oil Search’s ISO14001 accredited Environmental Management System contains a formal procedure for identifying and assessing environmental risks at an operational level. A risk register is developed which contains a comprehensive assessment of environmental risks for each facility in PNG and updated annually. Physical risks associated with external factors such as climate is also a standard consideration in new project developments and are assessed within a traditional engineering design risk analysis process, GHG levels are also a key risk consideration in both asset management and project development. The outcome of the identification and assessment phase is a risk profile that is created across the organisation, with appropriate scales of materiality and granularity.
CC2.1c
How do you prioritize the risks and opportunities identified? A key step within Oil Search’s risk management approach is the evaluation (prioritisation) process. This assesses the tolerability of identified risks and identifies a treatment strategy. A risk matrix forms part of this process which allows priority classification. A governance structure helps management oversee their respective risk profiles and the implementation, monitoring and review of risk management strategies developed The Board-level HSS Committee oversees strategic climate change direction, asset management and oversees the specific regulatory or physical risks associated
with climate change affecting these assets.
CC2.1d
Please explain why you do not have a process in place for assessing and managing risks and opportunities from climate change, and whether you plan to introduce such a process in future
Main reason for not having a process
Do you plan to introduce a process?
Comment
CC2.2
Is climate change integrated into your business strategy? Yes
CC2.2a
Please describe the process of how climate change is integrated into your business strategy and any outcomes of this process Preamble - Oil Search's Company vision, “to generate top-quartile returns for shareholders through excellence in socially responsible oil and gas exploration and production” is delivered by the Company strategy. This strategy consists of six streams, including the maintenance of a stable operating environment, sustaining and optimising oil and gas assets, commercialise gas in PNG, pursue high value exploration opportunities, enhance organisational capability and optimise capital management. Delivery of the business strategy is supported by cascaded key performance indicators for each business unit/function, discipline and individual. For purposes of this question, short term refers to the current period up to 5 years and longer term is anything over this time period. (i) Oil Search’s governance structure explicitly includes consideration of material social responsibility areas including climate change.
HSS Board Committee – The Health, Safety and Sustainability (HSS) Board Committee oversees the Company’s social responsibility strategies, processes and procedures, assists the Board monitor and review social responsibility risks, compliance and performance,. Health, Safety, and Sustainability (HSS) Groups - HSS Group 1 meets monthly and consists of all Executive General Managers, plus relevant representatives from senior management. Group 1 is responsible for reporting material updates to the HSS Board Committee including those relating to health, safety, environment, security, and climate change. This structure ensures the appropriate information is considered in the development of strategy. (ii) Regulatory changes, stakeholder expectations and the physical impacts of climate are particular aspects of importance to OSL. These considerations are integrated into established risk management and governance processes. (iii) Greater disclosures on Oil Search's website regarding our position and activity on climate change will increase more once the updated Company's climate change strategy is complete. In 2015 PNG experienced some of the worst drought conditions in 18 years which affected food crops and drinking water among the community. Oil search worked with the PNG government to deliver support to these communities (http://socialresponsibility.oilsearch.com/article/performance-responsible-operator-drought-relief/). Support for drought relief was a crucial means through which to maintain a stable operating environment. In 2015 Oil Search commissioned a climate change white paper that helped to inform Oil Search’s understanding of the current market risks of climate change and explored the potential risks and opportunities presented by regulatory and policy changes affecting supply and demand, and likely outcomes from COP21. This paper was used to inform strategy scoping, which was subsequently endorsed by the Board HSS Committee in October, 2015. The updated strategy is due for completion by December 2016. (iv) Commercialising gas is a key business strategy. The Company’s primary business is the supply of gas to the PNG LNG Project, where the gas is liquefied and then shipped to customers in Asia. Switching to natural gas from carbon alternatives can present immediate opportunities for our customers to reduce carbon emissions, especially in the power generation sector. Socially responsible oil and gas exploration and production is a key part of Oil Search’s business strategy. Oil Search recognises that the physical impacts from climate change have the potential to create social issues in the communities in which we operate. Oil Search’s focus on supporting the provision of gas as a source of energy to generate power to local communities is a key component of our long term strategy that is in part, being influenced by climate change. For information on power access project visit http://socialresponsibility.oilsearch.com/article/approach-sustainable-development-access-to-power/ In addition, Oil Search’s longer term business strategy has also been influenced by risks and opportunities presented by climate change, as outlined in CC5 and CC6. The focus is on ensuring we have the necessary practices and procedures established to support the management of risks and opportunities identified. The ongoing implementation of an improved monitoring and measurement framework for environmental and community development activities, working towards embedding social responsibility aspects within development activities, and continuous improvements of business processes and practices (including reviewing corporate standards) are important components of OSL’s long term strategy and help to manage risks outlined in CC5. (v) A new phase of growth and change, such as our stake in the ExxonMobil PNG Ltd’s PNG LNG Project and Total's Papuan LNG Project, is providing the opportunity
to build on history with a more rigorous and strategic approach to sustainable business practices. This has transformed OSL into a regionally significant oil and gas producer with a long-term LNG revenue stream. A strategy revision in 2014 and business optimisation projects in 2015 included a focus on pursuing LNG based expansion opportunities in PNG. (vi) In 2015, a number of steps were taken to develop the next iteration of the Company’s climate change position and strategy in preparation for 2017 onwards. These included the production of a white paper that helped to inform Oil Search’s understanding of the current market risks of climate change and explored the potential risks and opportunities presented by regulatory and policy changes affecting supply and demand.
CC2.2b
Please explain why climate change is not integrated into your business strategy
CC2.2c
Does your company use an internal price of carbon? No, but we anticipate doing so in the next 2 years
CC2.2d
Please provide details and examples of how your company uses an internal price of carbon
CC2.3
Do you engage in activities that could either directly or indirectly influence public policy on climate change through any of the following? (tick all that apply)
Direct engagement with policy makers Other
CC2.3a
On what issues have you been engaging directly with policy makers?
Focus of legislation
Corporate Position
Details of engagement
Proposed legislative solution
Other: All in drop-down list excluding carbon tax.
Support
In collaboration with the oil and gas industry in PNG, the PNG Government is working to reduce emissions by transitioning to a low-carbon economy. During the year, the PNG's Office of Climate Change and Development (OCCD) released the Climate Change (Management) Act, which was passed by the PNG Parliament in July. The umbrella Act establishes the framework and administrative processes to implement the PNG Climate Change Policy. Oil Search participated in the OCCD's industry consultation on this Act.
CC2.3b
Are you on the Board of any trade associations or provide funding beyond membership?
CC2.3c
Please enter the details of those trade associations that are likely to take a position on climate change legislation
Trade association
Is your position on climate change consistent with theirs?
Please explain the trade association's position
How have you, or are you attempting to, influence the position?
CC2.3d
Do you publicly disclose a list of all the research organizations that you fund?
CC2.3e
Please provide details of the other engagement activities that you undertake Oil Search is a signatory to the United Nations Global Compact (UNGC) and actively participates in the Local Network (Australia). Oil Search actively supports the UNGC principles and communicates regularly on implementing them. As a member of PNG's Office of Climate Change and Development (OCCD) industry stakeholder group, Oil Search provided input into PNG’s Intended Nationally Determined Contribution (INDC) presented at CoP21 in Paris, December 2015.
CC2.3f
What processes do you have in place to ensure that all of your direct and indirect activities that influence policy are consistent with your overall climate change strategy? Oil Search’s HSS governance structure supports consistent decisions and approach to our engagement on climate change matters across our geographies and areas of activity. Our Stakeholder Engagement function, comprising externally facing disciplines such as government affairs, ensures consistent delivery and engagement across all aspects of the business.
CC2.3g
Please explain why you do not engage with policy makers
Further Information
Page: CC3. Targets and Initiatives
CC3.1
Did you have an emissions reduction or renewable energy consumption or production target that was active (ongoing or reached completion) in the reporting year? Intensity target
CC3.1a
Please provide details of your absolute target
ID
Scope
% of emissions in
scope
% reduction from base year
Base year
Base year emissions covered by
target (metric tonnes CO2e)
Target year
Is this a science-
based target?
Comment
CC3.1b
Please provide details of your intensity target
ID
Scope
% of emissions in scope
% reduction from base
year
Metric
Base year
Normalized base year emissions covered by
target
Target year
Is this a science-based target?
Comment
Int1 Scope 1+2 (location-based)
100% 12%
Other: Kilo-tonnes CO2e per million barrels of oil equivalent (mmboe)
2009 92.8 2016
No, and we do not anticipate setting one in the next 2 years
Oil Search has a target to reduce the emissions intensity (kT Co2-e/mmboe) of operations by 12% by 2016 based on a 2009 baseline.
CC3.1c
Please also indicate what change in absolute emissions this intensity target reflects
ID
Direction of change anticipated in absolute Scope 1+2 emissions at
target completion?
% change anticipated in absolute Scope 1+2
emissions
Direction of change anticipated in absolute Scope 3 emissions at target
completion?
% change anticipated in absolute Scope 3
emissions
Comment
Int1 Decrease 30 No change 0 N/A
CC3.1d
Please provide details of your renewable energy consumption and/or production target
ID
Energy types
covered by target
Base year
Base year energy for energy type covered
(MWh)
% renewable
energy in base year
Target year
% renewable
energy in target year
Comment
CC3.1e
For all of your targets, please provide details on the progress made in the reporting year
ID
% complete
(time)
% complete (emissions or
renewable energy)
Comment
Int1 88% 100%
In 2015, Oil Search’s total greenhouse gases emitted increased 15% from 830 ktCO2 – e in 2014 to 958 ktCO2 – e. This was largely due to the commencement of production from high CO2 wells in the Company’s Agogo field. A 30% increase in production to 20 mmboe in 2015, however, meant emissions intensity decreased from 55 to 48 ktCO2 – e/mmboe with the net effect being that Oil Search remains on track to meet its emissions reduction target at the end of 2016.
CC3.1f
Please explain (i) why you do not have a target; and (ii) forecast how your emissions will change over the next five years
CC3.2
Do you classify any of your existing goods and/or services as low carbon products or do they enable a third party to avoid GHG emissions? Yes
CC3.2a
Please provide details of your products and/or services that you classify as low carbon products or that enable a third party to avoid GHG emissions
Level of
aggregation
Description of product/Group
of products
Are you
reporting low carbon
product/s or avoided
emissions?
Taxonomy, project or
methodology used to classify
product/s as low carbon or to calculate
avoided emissions
% revenue from low carbon
product/s in the
reporting year
% R&D in
low carbon product/s
in the reporting
year
Comment
Product liquefied natural gas (LNG)
Avoided emissions
Other: Global energy forcasts 70%
Less than or equal to 10%
Gas (and some condensate) from the Hides Project supplied to the Porgera Gold mine reducing the mine’s dependency on use of liquid heavy fuel for energy generation. This enables them to produce less scope 1 emissions. in 2015, 5.312 bcf (6% lower than in 2014 due to a temporary closure) was sent and used by the mine.
Product Naptha Avoided emissions
Other: Global energy forcasts
Less than or equal to 10%
Naphtha produced from the Hides facility supplied to tea plantations (WR Carpenters) to use as heat source for drying tea leaves. The alternative would have been the use of heavy fuel and wood. This enables them to reduce their scope 1 emissions.
CC3.3
Did you have emissions reduction initiatives that were active within the reporting year (this can include those in the planning and/or implementation phases) No
CC3.3a
Please identify the total number of projects at each stage of development, and for those in the implementation stages, the estimated CO2e savings
Stage of development
Number of projects
Total estimated annual CO2e savings in metric tonnes CO2e (only for rows marked *)
CC3.3b
For those initiatives implemented in the reporting year, please provide details in the table below
Activity type
Description of activity
Estimated annual CO2e
savings (metric tonnes
CO2e)
Scope
Voluntary/ Mandatory
Annual monetary savings (unit currency - as specified in
CC0.4)
Investment required (unit currency - as specified in
CC0.4)
Payback period
Estimated lifetime of
the initiative
Comment
CC3.3c
What methods do you use to drive investment in emissions reduction activities?
Method
Comment
CC3.3d
If you do not have any emissions reduction initiatives, please explain why not Oil Search is currently in the process of developing a new Climate Change Strategy - through the development process reduction initiatives will be assessed. Previously Oil Search has engaged in flare reduction activities with changes still in effect today. As per Oil Search’s Company performance requirements, all new projects must demonstrate that all reasonably practicable significant greenhouse gas mitigation measures have been incorporate. There have been no new projects during the reporting period.
Further Information
Page: CC4. Communication
CC4.1
Have you published information about your organization’s response to climate change and GHG emissions performance for this reporting year in places other than in your CDP response? If so, please attach the publication(s)
Publication
Status
Page/Section reference
Attach the document
Comment
In mainstream reports (including an integrated report) but have not used the CDSB Framework
https://www.cdp.net/sites/2016/38/13838/Climate Change 2016/Shared Documents/Attachments/CC4.1/Data Book - Resp Oper.pdf
Data Book - http://socialresponsibility.oilsearch.com/data-centre/ (Reporting framework: GRI and others)
Further Information
Module: Risks and Opportunities
Page: CC5. Climate Change Risks
CC5.1
Have you identified any inherent climate change risks that have the potential to generate a substantive change in your business operations, revenue or expenditure? Tick all that apply Risks driven by changes in regulation Risks driven by changes in physical climate parameters Risks driven by changes in other climate-related developments
CC5.1a
Please describe your inherent risks that are driven by changes in regulation
Risk driver
Description
Potential impact
Timeframe
Direct/ Indirect
Likelihood
Magnitude of impact
Estimated financial
implications
Management
method
Cost of
management
Carbon taxes
The most significant risk is the introduction of a carbon levy either directly to OSL or indirectly to suppliers (and passed through) at a price level that is not compatible with economic development. Oil Search maintains an ongoing dialogue with government authorities to understand any proposed changes, and actively participates in stakeholder forums to provide industry feedback. This engagement helps us to iteratively assess the implications of regulator changes and prepare accordingly.
Increased operational cost
3 to 6 years Direct More likely
than not Unknown
Costs associated with production of oil and gas if a carbon tax is implemented impacting on cost per barrel of oil equivalent (BOE). Costs associated with compliance.
Engagement with policy makers and regulators - The Papua New Guinea (PNG) Government are in the process of developing regulations to support its recent Climate Change Act and Oil Search is committed to maintaining active participation in stakeholder consultation activities. Development of a Climate Change Strategy - as this is developed through 2016 may consider the implication of carbon taxes. A white paper was commissioned in 2015 which is helping to inform the scoping for this strategy.
Non-monetary – time associated with stakeholder participation. Costs associated with setting up and/or performing modelling exercises. Cost of any associated compliance requirements.
Risk driver
Description
Potential impact
Timeframe
Direct/ Indirect
Likelihood
Magnitude of impact
Estimated financial
implications
Management
method
Cost of
management
Lack of regulation
Adoption of international standards and practices where no local standards exist. Such standards are often not compatible with local operating environments.
Increased operational cost
1 to 3 years Direct More likely
than not Medium
Capital costs associated with implementing international standards where local ones do not exist.
Continual assessment of the risks and benefits of committing to International Standards before voluntarily adopting such levels of practice. This occurs on an ongoing and as required basis. Implementing an approach to development which enables alignment with international standards as required. With the adoption of the Paris Agreement by countries in 2015 we continue to monitor the potential risks and opportunities of this, for example in the development of our Climate Change Strategy.
Increased operational budget for research and gap analysis.
Emission reporting obligations
Introduction of reporting obligations
Increased operational cost
3 to 6 years Direct More likely
than not Low
Costs associated with the monitoring and collecting of data to meet reporting standards.
In 2015, Oil Search's environment data management system went live. It included prior year data. We continue to refine this so we can
Capital and operational costs associated with developing systems, collecting data, managing
Risk driver
Description
Potential impact
Timeframe
Direct/ Indirect
Likelihood
Magnitude of impact
Estimated financial
implications
Management
method
Cost of
management
manage this risk by ensuring we have robust and timely data available to aid decision making.
inventories and obtaining third party assurance.
CC5.1b
Please describe your inherent risks that are driven by changes in physical climate parameters
Risk driver
Description
Potential impact
Timeframe
Direct/
Indirect
Likelihood
Magnitude of
impact
Estimated financial
implications
Management method
Cost of
management
Other physical climate drivers
Extreme weather conditions causing delays with tanker loading, drilling operations, general operations and crew changes.
Increased operational cost
Up to 1 year Direct
More likely than not
Medium
Export and production losses due to downtime and delays from extreme weather conditions.
Depending on the risk assessment outcomes and need for additional controls, operational and capital costs may be incurred
Risk driver
Description
Potential impact
Timeframe
Direct/
Indirect
Likelihood
Magnitude of
impact
Estimated financial
implications
Management method
Cost of
management
Induced changes in natural resources
Community - Crops, forestry and food security
Other: Disruption to operations caused by community conflict.
3 to 6 years Direct
About as likely as not
Medium
Production losses due to downtime resulting from community protests/ disruptions.
Implementation of strong community health and development programmes with strategies focused on sustainable, long-term outcomes. This includes agricultural training and support to enhance food security. See our 2015 Social Responsibility Report for more information and results - http://socialresponsibility.oilsearch.com/performance/sustainable-development/ In 2015, Oil Search delivered agricultural and business development training to member of the community and local landowner companies.
Increased operational costs to support community affairs activities in the field and sustainability costs. In 2015, Oil Search invested US$10 million (including a US$8 donation to the Oil Search Foundation) into sustainable development. In 2015 PNG experienced some of the worst drought conditions in 18 years. Oil Search
Risk driver
Description
Potential impact
Timeframe
Direct/
Indirect
Likelihood
Magnitude of
impact
Estimated financial
implications
Management method
Cost of
management
worked with the PNG Government’s National Disaster Centre and provided logistical support and contributed US$830,000 towards the provision of emergency food and water in drought-affected areas in the Southern Highlands, Hela and Gulf Provinces.
Change in precipitation
Increases in mean temperature, rainfall
Other: Wider social disadvanta
3 to 6 years Direct
More likely than not
Low
Increased rates of workplace illness/dise
Targeted vector control strategies around all zones of operation and strong internal communication program regarding disease prevention and health awareness. The Oil Search Foundation also has a
Cost of regular spraying programm
Risk driver
Description
Potential impact
Timeframe
Direct/
Indirect
Likelihood
Magnitude of
impact
Estimated financial
implications
Management method
Cost of
management
pattern and humidity may affect transmission of malaria and other mosquito borne diseases in PNG including Chikungunya and Dengue Fever. This is a complex and not well understood connection, but these variables may affect breeding, lifespan and distribution.
ges and potential disruptions to business operations
ase would reduce the availability of a healthy workforce and place greater demand on the Company’s medical resources.
malaria program that contributes to awareness and treatment within nearby communities in PNG. Oil Search are a principle donor to the Oil Search Foundation (http://www.oilsearchfoundation.org/). In 2015, US$8 Million was donated to the Foundation to support delivery of health programmes.
es, and of medical resources to rapidly diagnose and treat those affected with malaria. As part of Oil Search's investment in sustainable development, US$8 million was donated to the Oil Search Foundation in 2015 which seeks to reduce malaria incidence as well as address other prominent diseases in PNG.
CC5.1c
Please describe your inherent risks that are driven by changes in other climate-related developments
Risk driver
Description
Potential impact
Timeframe
Direct/
Indirect
Likelihood
Magnitude of
impact
Estimated financial
implications
Management method
Cost of
management
Reputation
Reputational risk of not managing and reporting on Company’s climate change performance
Reduced stock price (market valuation)
3 to 6 years Direct
About as likely as not
Medium
Withdrawal of investor / stakeholder support due to poor disclosure on climate change performance.
1. The climate strategy will be aligned with areas that Oil Search can credibly control/influence for real change. Development of a Climate Change Strategy will be finalised in late 2016. 2. Continued improvements to processes and procedures for managing and reporting the Company’s climate change related initiatives. 3. Active public communication of our approach and performance. (http://socialresponsibility.oilsearch.com/article/performance-responsible-operator-new-climate-change-strategy/). 4. In 2015, Oil Search commissioned a White Paper that helped to inform Oil Search’s understanding of the current market risks of climate change and explored the potential risks and opportunities presented by regulatory and policy changes affecting supply and demand. This paper was used to inform strategy scoping, which was subsequently endorsed by the Board HSS Committee in October.
Developing and implementing a climate change strategy.
Increasing humanitarian demands
Negative socio--economic impacts of climate change in
Increased operational cost
>6 years Direct Likely Medium
Increasing cost of financing community health and developme
Increased involvement in Public Private Partnerships and investigation of external funding to support Company’s community health and development initiatives. Initiatives thus far include: establishment of the Oil Search Foundation and partnering with Global Fund to
Costs involved in managing community health and developme
Risk driver
Description
Potential impact
Timeframe
Direct/
Indirect
Likelihood
Magnitude of
impact
Estimated financial
implications
Management method
Cost of
management
PNG increase demand for aid funding/ humanitarian response.
nt initiatives. Financial aspects of helping countries support climate change related commitments.
support expansion of public health programs across PNG. As a part of Oil Search’s well-established Community Development Programmes, the Company collaborated with local communities to improve food security through a variety of programs. For example, supporting women in agricultural enterprise initiatives including connecting women co-operatives to markets and providing agricultural training. In 2015, as a member of the PNG Governments OCCD’s Technical Working Group, Oil Search provided input into PNG’s Intended Nationally Determined Contributions (INDCs), and where appropriate, will support government efforts to achieve PNG’s target.
nt programs.
Uncertainty in market signals
How markets may respond to climate change developments and/or impacts presents a potential risk.
Reduced demand for goods/services
>6 years Direct Unknown
Unknown
Reduced sales and investor interest.
Development of a Climate Change Strategy will be finalised in 2016.
Currently unknown.
CC5.1d
Please explain why you do not consider your company to be exposed to inherent risks driven by changes in regulation that have the potential to generate a substantive change in your business operations, revenue or expenditure
CC5.1e
Please explain why you do not consider your company to be exposed to inherent risks driven by physical climate parameters that have the potential to generate a substantive change in your business operations, revenue or expenditure
CC5.1f
Please explain why you do not consider your company to be exposed to inherent risks driven by changes in other climate-related developments that have the potential to generate a substantive change in your business operations, revenue or expenditure
Further Information
In 2015, the Oil Search Health Foundation transitioned to the Oil Search Foundation with three key streams - health, leadership and education and women's protection and empowerment.
Page: CC6. Climate Change Opportunities
CC6.1
Have you identified any inherent climate change opportunities that have the potential to generate a substantive change in your business operations, revenue or expenditure? Tick all that apply
Opportunities driven by changes in other climate-related developments
CC6.1a
Please describe your inherent opportunities that are driven by changes in regulation
Opportunity driver
Description
Potential impact
Timeframe
Direct/Indirect
Likelihood
Magnitude of impact
Estimated financial
implications
Management
method
Cost of
management
CC6.1b
Please describe the inherent opportunities that are driven by changes in physical climate parameters
Opportunity driver
Description
Potential impact
Timeframe
Direct/ Indirect
Likelihood
Magnitude of impact
Estimated financial
implications
Management
method
Cost of
management
CC6.1c
Please describe the inherent opportunities that are driven by changes in other climate-related developments
Opportunity driver
Description
Potential impact
Timeframe
Direct/
Indirect
Likelihood
Magnitude of
impact
Estimated financial
implications
Management method
Cost of
management
Opportunity driver
Description
Potential impact
Timeframe
Direct/
Indirect
Likelihood
Magnitude of
impact
Estimated financial
implications
Management method
Cost of
management
Changing consumer behaviour
Markets for LNG and alternative energy are growing rapidly, particularly with the increased global focus on climate change. OSL have a 29% interest in in the ExxonMobil operated PNG LNG project and 23% interest in the proposed Papua LNG Project operated by Total. LNG is considered less
Increased demand for existing products/services
Up to 1 year Direct
About as likely as not
Medium
Capital invested into LNG based projects.
Investment in LNG opportunities. OSL have a 29% interest in in the ExxonMobil operated PNG LNG project and 23% interest in the proposed Papua LNG Project operated by Total. Following a strategic review in 2014, Oil Search is working to commercialise gas in PNG and drive further LNG developments. More information on how this is integrated into OSL's strategy can be found at - http://socialresponsibility.oilsearch.com/article/approach-responsible-operator-climate-change-natural-gas/
Strong investment and financial management discipline is essential to ensure the Company’s priority LNG growth projects can be fully funded, financial flexibility is maintained and profits can be shared with shareholders by way of dividends.
Opportunity driver
Description
Potential impact
Timeframe
Direct/
Indirect
Likelihood
Magnitude of
impact
Estimated financial
implications
Management method
Cost of
management
emission intensive than other fossil fuels such as coal GHG, therefore its use can reduce associated emissions.
CC6.1d
Please explain why you do not consider your company to be exposed to inherent opportunities driven by changes in regulation that have the potential to generate a substantive change in your business operations, revenue or expenditure In 2015, a number of steps were taken to develop the next iteration of the Company’s climate change position and strategy in preparation for 2017 onwards. This will involve a more comprehensive assessment of climate changes risk and opportunities.
CC6.1e
Please explain why you do not consider your company to be exposed to inherent opportunities driven by physical climate parameters that have the potential to generate a substantive change in your business operations, revenue or expenditure
In 2015, a number of steps were taken to develop the next iteration of the Company’s climate change position and strategy in preparation for 2017 onwards. This will involve a more comprehensive assessment of climate changes risk and opportunities.
CC6.1f
Please explain why you do not consider your company to be exposed to inherent opportunities driven by changes in other climate-related developments that have the potential to generate a substantive change in your business operations, revenue or expenditure
Further Information
Module: GHG Emissions Accounting, Energy and Fuel Use, and Trading
Page: CC7. Emissions Methodology
CC7.1
Please provide your base year and base year emissions (Scopes 1 and 2)
Scope
Base year
Base year emissions (metric tonnes CO2e)
Scope 1 Thu 01 Jan 2009 - Thu 31 Dec 2009
1402007
Scope 2 (location-based) Thu 01 Jan 2009 - Thu 31 Dec 2009
3885
Scope
Base year
Base year emissions (metric tonnes CO2e)
Scope 2 (market-based) Thu 01 Jan 2009 - Thu 31 Dec 2009
0
CC7.2
Please give the name of the standard, protocol or methodology you have used to collect activity data and calculate Scope 1 and Scope 2 emissions
Please select the published methodologies that you use
American Petroleum Institute Compendium of Greenhouse Gas Emissions Methodologies for the Oil and Natural Gas Industry, 2009
CC7.2a
If you have selected "Other" in CC7.2 please provide details of the standard, protocol or methodology you have used to collect activity data and calculate Scope 1 and Scope 2 emissions N/A
CC7.3
Please give the source for the global warming potentials you have used
Gas
Reference
CO2 IPCC Second Assessment Report (SAR - 100 year) CH4 IPCC Second Assessment Report (SAR - 100 year) N2O IPCC Second Assessment Report (SAR - 100 year)
CC7.4
Please give the emissions factors you have applied and their origin; alternatively, please attach an Excel spreadsheet with this data at the bottom of this page
Fuel/Material/Energy
Emission Factor
Unit
Reference
Natural gas 0.0025 metric tonnes CO2e per m3 API Diesel/Gas oil 2.73 metric tonnes CO2e per m3 API Jet gasoline 2.2 metric tonnes CO2e per m3 API Motor gasoline 2.35 metric tonnes CO2e per m3 API
Further Information
Page: CC8. Emissions Data - (1 Jan 2015 - 31 Dec 2015)
CC8.1
Please select the boundary you are using for your Scope 1 and 2 greenhouse gas inventory Operational control
CC8.2
Please provide your gross global Scope 1 emissions figures in metric tonnes CO2e 952900.71
CC8.3
Does your company have any operations in markets providing product or supplier specific data in the form of contractual instruments? Yes
CC8.3a
Please provide your gross global Scope 2 emissions figures in metric tonnes CO2e
Scope 2, location-based
Scope 2, market-based (if applicable)
Comment
4559.66 0
CC8.4
Are there are any sources (e.g. facilities, specific GHGs, activities, geographies, etc.) of Scope 1 and Scope 2 emissions that are within your selected reporting boundary which are not included in your disclosure? Yes
CC8.4a
Please provide details of the sources of Scope 1 and Scope 2 emissions that are within your selected reporting boundary which are not included in your disclosure
Source
Relevance of
Scope 1 emissions from this source
Relevance of
location-based Scope 2 emissions
from this source
Relevance of market-based
Scope 2 emissions from this source (if
applicable)
Explain why the source is excluded
Sources outside of Papua New Guinea (PNG) operations.
Emissions are not relevant
Emissions are not relevant
No emissions from this source
Activities outside PNG in 2015 involve minor levels of exploration related logistics. The scope 1 and 2 emissions associated with these activities are immaterial to our inventory. In the event the scale and scope of these greenhouse emissions become more significant a decision would be taken on their inclusion.
All admin offices Emissions are not relevant
No emissions from this source
Emissions are relevant but not yet calculated
Scope 2 emissions associated with our offices in Port Moresby, Sydney, Brisbane, Dubai, Sana'a and Sulaymaniyah is insignificant compared with emissions from operations in PNG. The Brisbane office closed permanently at the end of 2015. Other offices are largely closed due to conflict related locations.
CC8.5
Please estimate the level of uncertainty of the total gross global Scope 1 and 2 emissions figures that you have supplied and specify the sources of uncertainty in your data gathering, handling and calculations
Scope
Uncertainty range
Main sources of
uncertainty
Please expand on the uncertainty in your data
Scope 1 More than 5% but less than or equal to 10%
Assumptions
Main source of uncertainty relates to venting and fugitives, where API has been used to calculate emissions, and liquid fuels due to new accounting process. Note this range does not take into
Scope
Uncertainty range
Main sources of
uncertainty
Please expand on the uncertainty in your data
account any uncertainty associated with the IPCC GWP figures. Scope 2 (location-based)
Less than or equal to 2%
No Sources of Uncertainty
No significant uncertainty.
Scope 2 (market-based)
Less than or equal to 2%
No Sources of Uncertainty
N/A
CC8.6
Please indicate the verification/assurance status that applies to your reported Scope 1 emissions Third party verification or assurance process in place
CC8.6a
Please provide further details of the verification/assurance undertaken for your Scope 1 emissions, and attach the relevant statements
process assurance 2016/Shared Documents/Attachments/CC8.6a/OSL Assurance Statement 2015.pdf
CC8.6b
Please provide further details of the regulatory regime to which you are complying that specifies the use of Continuous Emissions Monitoring Systems (CEMS)
Regulation
% of emissions covered by the system
Compliance period
Evidence of submission
CC8.7
Please indicate the verification/assurance status that applies to at least one of your reported Scope 2 emissions figures Third party verification or assurance process in place
CC8.7a
Please provide further details of the verification/assurance undertaken for your location-based and/or market-based Scope 2 emissions, and attach the relevant statements
Please identify if any data points have been verified as part of the third party verification work undertaken, other than the verification of emissions figures reported in CC8.6, CC8.7 and CC14.2
Additional data points verified
Comment
Other: GHG emissions intensity Limited Assurance
CC8.9
Are carbon dioxide emissions from biologically sequestered carbon relevant to your organization? No
CC8.9a
Please provide the emissions from biologically sequestered carbon relevant to your organization in metric tonnes CO2
Further Information
Page: CC9. Scope 1 Emissions Breakdown - (1 Jan 2015 - 31 Dec 2015)
CC9.1
Do you have Scope 1 emissions sources in more than one country? No
CC9.1a
Please break down your total gross global Scope 1 emissions by country/region
Country/Region
Scope 1 metric tonnes CO2e
CC9.2
Please indicate which other Scope 1 emissions breakdowns you are able to provide (tick all that apply) By facility By GHG type
CC9.2a
Please break down your total gross global Scope 1 emissions by business division
Business division
Scope 1 emissions (metric tonnes CO2e)
CC9.2b
Please break down your total gross global Scope 1 emissions by facility
Please break down your total gross global Scope 1 emissions by GHG type
GHG type
Scope 1 emissions (metric tonnes CO2e)
CH4 263698.24 CO2 689095.62
CC9.2d
Please break down your total gross global Scope 1 emissions by activity
Activity
Scope 1 emissions (metric tonnes CO2e)
Further Information
Page: CC10. Scope 2 Emissions Breakdown - (1 Jan 2015 - 31 Dec 2015)
CC10.1
Do you have Scope 2 emissions sources in more than one country? No
CC10.1a
Please break down your total gross global Scope 2 emissions and energy consumption by country/region
Country/Region
Scope 2, location-based (metric
tonnes CO2e)
Scope 2, market-based (metric tonnes CO2e)
Purchased and consumed electricity, heat, steam or cooling
(MWh)
Purchased and consumed low carbon electricity, heat, steam or cooling
accounted in market-based approach (MWh)
CC10.2
Please indicate which other Scope 2 emissions breakdowns you are able to provide (tick all that apply) By facility
CC10.2a
Please break down your total gross global Scope 2 emissions by business division
Business division
Scope 2 emissions, location based (metric tonnes CO2e)
Scope 2 emissions, market-based
(metric tonnes CO2e)
CC10.2b
Please break down your total gross global Scope 2 emissions by facility
Facility
Scope 2 emissions, location based (metric tonnes CO2e)
Scope 2 emissions, market-based
(metric tonnes CO2e)
Hides 4559.66
CC10.2c
Please break down your total gross global Scope 2 emissions by activity
Activity
Scope 2 emissions, location based (metric tonnes CO2e)
Scope 2 emissions, market-based
(metric tonnes CO2e)
Further Information
Page: CC11. Energy
CC11.1
What percentage of your total operational spend in the reporting year was on energy? More than 0% but less than or equal to 5%
CC11.2
Please state how much heat, steam, and cooling in MWh your organization has purchased and consumed during the reporting year
Energy type
Energy purchased and consumed (MWh)
Heat 0 Steam 0 Cooling 0
CC11.3
Please state how much fuel in MWh your organization has consumed (for energy purposes) during the reporting year 2389024
CC11.3a
Please complete the table by breaking down the total "Fuel" figure entered above by fuel type
Fuels
MWh
Natural gas 2229422 Diesel/Gas oil 126509 Jet kerosene 32613 Other: BP Zoom Fuel 479
CC11.4
Please provide details of the electricity, heat, steam or cooling amounts that were accounted at a low carbon emission factor in the market-based Scope 2 figure reported in CC8.3a
Basis for applying a low carbon emission factor
MWh consumed associated with low carbon electricity, heat, steam or
cooling
Comment
No purchases or generation of low carbon electricity, heat, steam or cooling accounted with a low carbon emissions factor 0 NA
CC11.5
Please report how much electricity you produce in MWh, and how much electricity you consume in MWh
Total electricity
consumed (MWh)
Consumed
electricity that is purchased
(MWh)
Total electricity
produced (MWh)
Total
renewable electricity produced
(MWh)
Consumed renewable
electricity that is produced by company
(MWh)
Comment
6248 6248 0 0 Consume the full amount we purchase.
Further Information
Page: CC12. Emissions Performance
CC12.1
How do your gross global emissions (Scope 1 and 2 combined) for the reporting year compare to the previous year? Increased
CC12.1a
Please identify the reasons for any change in your gross global emissions (Scope 1 and 2 combined) and for each of them specify how your emissions compare to the previous year
Reason
Emissions value
(percentage)
Direction of change
Please explain and include calculation
Emissions reduction activities 0 No change Divestment 0 No change Acquisitions 0 No change Mergers 0 No change
Change in output 15 Increase
In 2015, Oil Search’s total greenhouse gases emitted increased 15% from 830 ktCO2 – e in 2014 to 958 ktCO2 – e. This was largely due to the commencement of production from high CO2 wells in the Company’s Agogo field. A 30% increase in production to 20 mmboe in 2015, however, meant emissions intensity decreased from 55 to 48 ktCO2 – e/mmboe meaning Oil Search remains on track to meet its emissions reduction target at the end of 2016.
Change in methodology 0 No change Change in boundary 0 No change Change in physical operating conditions
0 No change
Unidentified 0 No change Other 0 No change
CC12.1b
Is your emissions performance calculations in CC12.1 and CC12.1a based on a location-based Scope 2 emissions figure or a market-based Scope 2 emissions figure?
Location-based
CC12.2
Please describe your gross global combined Scope 1 and 2 emissions for the reporting year in metric tonnes CO2e per unit currency total revenue
Do you participate in any emissions trading schemes? No, and we do not currently anticipate doing so in the next 2 years
CC13.1a
Please complete the following table for each of the emission trading schemes in which you participate
Scheme name
Period for which data is supplied
Allowances allocated
Allowances purchased
Verified emissions in metric tonnes CO2e
Details of ownership
CC13.1b
What is your strategy for complying with the schemes in which you participate or anticipate participating?
CC13.2
Has your organization originated any project-based carbon credits or purchased any within the reporting period? No
CC13.2a
Please provide details on the project-based carbon credits originated or purchased by your organization in the reporting period
Credit origination
or credit purchase
Project type
Project identification
Verified to which standard
Number of credits (metric
tonnes of CO2e)
Number of credits (metric tonnes
CO2e): Risk adjusted volume
Credits cancelled
Purpose, e.g. compliance
Further Information
Page: CC14. Scope 3 Emissions
CC14.1
Please account for your organization’s Scope 3 emissions, disclosing and explaining any exclusions
Sources of Scope 3 emissions
Evaluation status
metric tonnes CO2e
Emissions calculation methodology
Percentage of emissions calculated using data obtained
from suppliers or value chain partners
Explanation
Purchased goods and services Not evaluated NA NA Capital goods Not evaluated NA NA Fuel-and-energy-related activities (not included in Scope 1 or 2) Not evaluated NA NA
Upstream transportation and distribution Not evaluated NA NA Waste generated in operations Not evaluated NA NA Business travel Not evaluated NA NA Employee commuting Not evaluated NA NA Upstream leased assets Not evaluated NA NA Downstream transportation and distribution Not evaluated NA NA
Sources of Scope 3 emissions
Evaluation status
metric tonnes CO2e
Emissions calculation methodology
Percentage of emissions calculated using data obtained
from suppliers or value chain partners
Explanation
Processing of sold products Not evaluated NA NA Use of sold products Not evaluated NA NA End of life treatment of sold products Not evaluated NA NA Downstream leased assets Not evaluated NA NA Franchises Not evaluated NA NA Investments Not evaluated NA NA Other (upstream) Not evaluated NA NA Other (downstream) Not evaluated NA NA
CC14.2
Please indicate the verification/assurance status that applies to your reported Scope 3 emissions No emissions data provided
CC14.2a
Please provide further details of the verification/assurance undertaken, and attach the relevant statements
Verification or
assurance cycle in place
Status in the
current reporting year
Type of
verification or assurance
Attach the statement
Page/Section reference
Relevant standard
Proportion of
reported Scope 3 emissions verified (%)
CC14.3
Are you able to compare your Scope 3 emissions for the reporting year with those for the previous year for any sources? No, we don’t have any emissions data
CC14.3a
Please identify the reasons for any change in your Scope 3 emissions and for each of them specify how your emissions compare to the previous year
Sources of Scope 3
emissions
Reason for change
Emissions value
(percentage)
Direction of change
Comment
CC14.4
Do you engage with any of the elements of your value chain on GHG emissions and climate change strategies? (Tick all that apply) No, we do not engage
CC14.4a
Please give details of methods of engagement, your strategy for prioritizing engagement and measures of success
CC14.4b
To give a sense of scale of this engagement, please give the number of suppliers with whom you are engaging and the proportion of your total spend that they represent
Number of suppliers
% of total spend (direct and indirect)
Comment
CC14.4c
If you have data on your suppliers’ GHG emissions and climate change strategies, please explain how you make use of that data
How you make use of the data
Please give details
CC14.4d
Please explain why you do not engage with any elements of your value chain on GHG emissions and climate change strategies, and any plans you have to develop an engagement strategy in the future (i) We do not collect Scope 3 emissions data at this time. (ii) A Responsible Supply Chain Strategy is currently under development and will include engagement with suppliers on all key sustainability issues and impacts, including climate change where relevant.
Further Information
Module: Sign Off
Page: CC15. Sign Off
CC15.1
Please provide the following information for the person that has signed off (approved) your CDP climate change response
Name
Job title
Corresponding job category
Gerea Aopi Oil Search Board Executive Director (and EGM Stakeholder Engagement). Director on board
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