BP Azerbaijan Sustainability Report 2016 The energy we produce serves to power Introduction from our regional economic growth and lift people out of poverty. president In the future, the way heat, light and mobility are delivered will change. We aim to anchor our business in these changing patterns of demand, rather than in the quest for supply. We have a real contribution to make to the world’s ambition of a low carbon future.

Sustainability is a core part of BP’s strategy. industry standards. We also had fewer high For more than two decades that we have potential incidents which could have resulted been in Azerbaijan, BP has been committed in a health, safety, security or environmental to conducting a safe and sustainable business major incident. We are committed to keeping that benefits all our stakeholders, including our focus on safety and our stated aim is to society at large. have no accidents, no harm to people and no damage to the environment. BP safely and reliably operates giant oil and gas fields in Azerbaijan, which have As the biggest foreign investor and the contributed to the development of the Caspian leading operator in the Caspian, we have the Sea as a modern hydrocarbon province. By responsibility to be a good corporate citizen. continuing to focus on production This includes creating sustainable benefits for performance, we delivered an average rate of people and new opportunities for social 908,000 barrels of oil equivalent per day from development. Our activities here have the Azeri-Chirag-Deepwater Gunashli (ACG) covered support for communities, – the largest oil field in the Azerbaijan sector of enterprises, public institutions, universities, the Caspian – and the Shah Deniz gas field, schools, cultural and sport organizations. We which has been BP’s biggest gas discovery are working in alignment with the since Prudhoe Bay Alaska in 1968. ACG and government, people and other partners to Shah Deniz facilities have also demonstrated assist Azerbaijan in strengthening its remarkable plant reliability throughout the past economy and improving the livelihood of its year. people. Our expertise in large-scale projects around Through the many achievements and the world and unique experience in the challenges over the past years, we have Caspian basin allows us to undertake massive created successful and prosperous integrated projects such as Shah Deniz Stage partnerships with the regional governments For a secure, affordable 2 and South Caucasus Pipeline Expansion. and all our stakeholders. These long-term and We have made significant progress in these trusted relationships give us the confidence projects and are set to deliver first gas from and motivation to work even harder and to run Shah Deniz 2 in 2018. During the peak of a sustainable business that benefits all our activities, over 24,000 people were involved stakeholders. in construction works across all main and sustainable energy contracts in Azerbaijan and over 80% of them were Azerbaijani nationals. Safety of our people is the top priority in all our operations and project activities. We Gary Jones future. reduced our recordable injury frequency for Regional President the third year in a row, keeping it low by Azerbaijan-Georgia-Turkey region bp.com/sustainability

BP Azerbaijan Sustainability Report 2016 1 Overview Our operations Our people Safety Environment Society Our reporting

About our report What’s inside? This report covers the calendar year ending BP Azerbaijan Sustainability Report 2016 covers our 31 December 2016. In some instances, significant business performance, environmental record and events from 2017 have been included. wider role in Azerbaijan during 2016. It is our 14th sustainability report and reflects feedback we received about previous reports. Unless otherwise specified, the text does not committed. All gas volumes are indicated in distinguish between the activities of BP p.l.c. standard cubic metres or standard cubic feet. and those of its subsidiaries and affiliates. References in this report to ‘us’, ‘we’ and The report is issued annually by BP ‘our’ relate to BP in Azerbaijan unless Exploration (Caspian Sea) Limited in its Overview Focus areas otherwise stated. capacities as operator and manager of the joint operating company for the Azeri-Chirag- When we cite ‘BP in Azerbaijan’ we refer to Deepwater Gunashli field, as manager of The We are committed to delivering Page 6 operations in Azerbaijan only. If we refer to Baku-Tbilisi-Ceyhan Pipeline Company and Our operations world-class operations and ‘BP AGT’ we are including all our activities in by BP Exploration (Shah Deniz) Limited in its projects and to maintaining a Azerbaijan, Georgia and Turkey. Specific capacities as operator of the Shah Deniz field sustainable presence in the references to ‘BP’ and the ‘BP group’ mean and as technical operator of The South Caspian region. BP p.l.c., its subsidiaries and affiliates. All Caucasus Pipeline Company. For this report, dollar amounts are in US dollars and if each of these entities has provided translated from other currencies reflect the information relevant to its project and Our long-term success in Page 12 exchange rate at the moment the funds were statements applicable to its project. Our people Azerbaijan depends on the skills, professionalism, experience and passion of our people.

Introduction We focus on maintaining safe, Page 17 Safety reliable and compliant operations Cautionary statement Front cover imagery Quick facts and overview of our and put safety and operational risk operations in the Caspian sea and management at the heart of everything we do. BP employees talk about the work on the the region. BP in Azerbaijan Sustainability Report 2016 may contain forward-looking statements relating, bridge connecting Deepwater Gunashli Page 2 in particular, to recoverable volumes and resources, capital, operating and other expenditures, platforms. We recognize that managing Page 21 and future projects. Actual results may differ from such statements depending on a variety of Environment environmental impacts is an factors including supply and demand developments, pricing and operational issues and essential part of what it means to political, legal, fiscal, commercial and social circumstances. responsibly produce oil and gas. BP Azerbaijan Sustainability Report 2016 We have reviewed BP Azerbaijan Our aim is to make a positive Page 25 Sustainability Report 2016 in Society impact on the society, supported order to provide assurance to BP by an open dialogue with our stakeholders and leading to management that the data, sustainable enterprise and statements and assertions made community development. regarding the sustainability performance of BP in Azerbaijan Our key performance data - Page 32 Sustainability are supported by evidence or Five-year covering areas including Report 2016 explanation. Our scope of work production, safety, environment and social spend. Details of our sustainability and conclusions can be found on performance performance with additional page 33. information online. data bp.com/sustainability Ernst & Young Introduction to the assurance process

2 BP Azerbaijan Sustainability Report 2016 BP Azerbaijan Sustainability Report 2016 3 Overview Our operations Our people Safety Environment Society Our reporting Our operations in the Caspian sea and the region

Scale The Caspian region has become one of the major oil and gas producing areas in the world, with the reserves of Azerbaijan being $64.5 billion $72 million 3 billion 80 billion 10 transported to global markets Capital expenditure on the ACG, BTC, Spent jointly with our co-venturers on Barrels of oil were produced by ACG Cubic metres of total gas were Drilling rigs currently involved through Georgia and Turkey. Shah Deniz and SCP projects since social programmes including from first oil in 1997 to the end of produced by Shah Deniz from first in our operations, including the beginning of operations in 1995 community development and 2016 gas in 2006 to the end of 2016 three mobile offshore drilling educational initiatives since the start units of our operations in Azerbaijan

BP in Azerbaijan, Georgia and Turkey Legal structure Business structure Employees Registered address In Azerbaijan, BP operates under several A number of BP legal entities have registered At the end of 2016, the regional leadership The number of people permanently employed The registered address of the representative production sharing agreements and host representative offices in Azerbaijan reflecting team led by the regional president consisted of by BP in Azerbaijan was 2,947, of whom 2,635 office of BP Exploration (Caspian Sea) Limited is government agreements (HGAs) signed with the evolution of BP’s presence in the region 15 vice presidents, the chief procurement were Azerbaijani citizens, at the end of 2016. 153 Neftchilar avenue, Nasimi district, Baku, the government of Azerbaijan. In Georgia and since BP opened its first office in Baku in 1992. officer, the assistant general counsel, the head AZ1010, Azerbaijan. Telephone: +994 (0)12 599 Turkey, BP operates under HGAs that cover The principal legal entity is BP Exploration of planning and commercial operations, and the 3000, Fax +994 (0)12 599 3665. export pipelines and terminals. (Caspian Sea) Limited. head of control and financial operations for Azerbaijan, Georgia and Turkey.

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Operating safely and reliably BP operates large offshore oil and gas assets in Azerbaijan. Onshore, we manage one of the world’s largest integrated hydrocarbon processing terminals and pipeline Our operations links to regional and world markets. We are committed to delivering world-class operations and projects and to maintaining a sustainable presence in the Caspian region. Azeri-Chirag-Deepwater Gunashli

ACG is operated by BP on behalf of the Workers perform a routine Azerbaijan International Operating safety audit on board the Company. It is the largest oilfield in the West Azeri platform, which Azerbaijan sector of the Caspian basin, located about 100km east of Baku. ACG is has been in operation since geologically challenging with a complicated December 2005, producing seabed topography including slumps and oil from the western portion mud volcanoes. of the ACG field.

What we are doing Net share of liquids production by BP subsidiaries around the world (%) Azeri-Chirag-Deepwater Gunashli oil production Operating safely and reliably 7 (mmbbl – million barrels; mmte – million tonnes)

Platform Start of Unit of From the start 2015 2016 production measurement of production till end of 2016 mmbbl 685.8 17.3 19.7 Chirag 3November1% 1997 38% mmte 92.7 2.3 2.7 41% mmbbl 781.9 56.2 52.7 59%Central Azeri February 2005 mmte 105.7 7.6 7.1 5% mmbbl 709.9 40.3 41.8 West Azeri December 2005 5% mmte 96.0 5.4 5.6 10% 11% mmbbl 404.9 26.0 26.3 East Azeri November 2006 mmte 54.7 3.5 3.6 US Azerbaijan DeepwaterUS Azerbaijan mmbbl 397.1 51.6 46.1 April 2008 Europe Other GunashliEurope Other mmte 53.9 7.0 6.2 mmbbl 102.1 39.9 43.9 West Chirag January 2014 In total, 943,000 barrels of crude oil and 82,000 barrels of mmte 13.8 5.4 5.9 natural gas liquid per day, excluding equity accounted entities. Other includes Canada, South America, Africa, Asia mmbbl 3081.6 231.3 230.5 Total (excluding Azerbaijan) and Australia. mmte 416.7 31.3 31.1

6 BP Azerbaijan Sustainability Report 2016 BP Azerbaijan Sustainability Report 2016 7 Overview Our operations Our people Safety Environment Society Our reporting

Production began in 1997 from the Chirag Net share of natural gas production by BP Oil production from Azeri-Chirag- We spent approximately $469 million in section. It now also includes the Central, subsidiaries around the world (%) operating expenditure and $3.7 billion in Shah Deniz gas and condensate production West and East Azeri, Deepwater Gunashli Deepwater Gunashli, 2005-2016 capital expenditure on Shah Deniz in 2016, (million barrels) and West Chirag sections. At the end of the majority of which was associated with Start of Unit of From the start 2015 2016 2016, a total of 100 oil wells were the Shah Deniz Stage 2 project. production measurement of production producing, and 49 wells were used for gas 250 till end of 2016 or water injection. Five of these wells were 39.2 18.3 Shah Deniz Stage 2 50.8 bscm 78.4 9.9 10.7 among BP’s top 10 producing wells around 39.9 43.9 31% Gas November 2006 bscf 2 767.8 348.8 377.0 the world in 2016. 38% 200 53.3 Shah Deniz Stage 2 (SD2) is a giant project 41% 49.0 mmboe 477.1 60.1 65.0 38.9 51.6 46.1 that will bring gas from Azerbaijan to Europe ACG production continued steadily at a 59% 27.1 and Turkey. This will increase gas supply and mmbbl 156.6 18.3 20.1 150 Condensate November 2006 similar level to 2015. In 2016 we produced 26.0 26.3 improve energy security to European markets mmte 19.6 2.3 2.5 5% 69.7 68.7 an average of 630,000 barrels per day 54.5 through the opening of the new Southern (more than 230 million barrels or 5% 100 40.3 41.8 Gas Corridor. It is one of the largest gas (bcm – billion cubic metres; bcf – billion cubic feet; mmboe – million barrels of oil equivalent, 11% 31.1 million tonnes in total)1 0from% the ACG development projects anywhere in the world. mmbbl - million barrels, mmte - million tonnes) complex. 58.0 55.4 57.1 50 56.2 52.7 US Azerbaijan US Azerbaijan We also delivered around 7.5 million cubic 27.3 25.4 22.6 17.3 19.7 metres per day of ACG associated gas to Europe Other Europe Other 2012 2013 2014 2015 2016 the State Oil Company of the Republic of Azerbaijan (SOCAR) which equates to In total, 5,302 million cubic feet per day, excluding equity Chirag CentalAzeri WestAzeri accounted entities. 2.75 billion cubic metres in total. EastAzeri DeepwaterGunashli WestChirag Other includes Canada, South America, Africa, Asia (excluding Azerbaijan) and Australia. In 2016, we spent approximately $503 million in operating expenditure and $1.45 billion in capital expenditure on ACG activities. Shah Deniz

The Shah Deniz (SD) gas field was discovered in 1999. It lies 70km offshore beneath water depths ranging from 50-600 metres. The field has a reservoir depth of more than 1,000 metres and is 22km long. SD is geologically challenging and highly pressured with multiple reservoir horizons.

In 2016 the SD field continued to provide reliable deliveries of gas to markets in Azerbaijan, Georgia and Turkey. The field produced 10.7 billion cubic metres of gas and about 20 million barrels (2.5 million tonnes) of condensate in 2016. Shah Deniz’s current production capacity is 30 million standard cubic metres of gas per day, or around 10.9 billion cubic metres per annum.

We completed one new production well and commenced one deep-hole drilling operations well in Shah Deniz in 2016. Three SD wells topped the list of BP-operated production wells worldwide by gross daily rate in barrels of oil equivalent.

Liquids production by BP subsidiaries around the world in 2016 (thousand barrels)

2016 Oil Natural gas US 391 1,656 Europe 112 252 Azerbaijan 105 245 Other 417 3,150 Caption: Senior employees carry out a self-verification audit on cement tanks on board the Shah Deniz Alpha platform.

8 BP Azerbaijan Sustainability Report 2016 BP Azerbaijan Sustainability Report 2016 9 Overview Our operations Our people Safety Environment Society Our reporting

Baku-Tbilisi-Ceyhan pipeline

The 1,768km BTC pipeline became operational in June 2006. Since then up to the end of 2016 BTC has carried a total of about 2.61 billion barrels (around 349 million tonnes) of crude oil loaded on 3,425 tankers and sent to world markets.

BTC’s throughput capacity is currently 1.2 million barrels per day. In 2016, this pipeline exported around 251 million barrels (about 33.5 million tonnes) of crude oil loaded on 313 tankers at Ceyhan.

BTC currently carries mainly ACG oil and Shah Deniz condensate from Azerbaijan. In addition, crude oil from Turkmenistan and Kazakhstan continues to be transported via this pipeline. South Caucasus pipeline Caption: Workers discuss work plans at the Shah Deniz 2 platform quarters and utilities topsides unit which was installed offshore in July 2017. The 691km pipeline has been operational The project will annually provide for export fabrication yards of the country including operations will continue to deliver all wells since late 2006, transporting Shah Deniz gas of 16 billion cubic metres of gas from the the Sangachal Terminal, ATA (AMEC/ required to reach the planned plateau level. to Azerbaijan, Georgia and Turkey. During 2016 Shah Deniz field through some 3,500 Tekfen/Azfen) yard near Baku, Baku its daily average throughput was about 19.9 kilometres of pipelines to Georgia, Turkey, Deepwater Jackets Factory and along the Our subsea construction vessel, Khankendi, million cubic metres of gas per day. Greece, Bulgaria and Italy. The project is pipeline route. In September a significant has improved progress attainment and over 89% complete in terms of engineering, milestone was achieved in the project with started up the main engines in September. We spent about $27 million in operating procurement and construction, and remains the sail away of the jacket for one of the The vessel underwent sea trials in the expenditure and about $974 million in capital on target for first gas in 2018. First Shah Deniz Stage 2 platforms from the Caspian Sea, in the first half of 2017 which expenditure on SCP in 2016. deliveries to Europe are expected in 2020. BDJF yard for offshore installation. The is a significant milestone on SD2 project transportation, launch, and positioning delivery. SCP expansion project Over 119 million man-hours have been activities of the production and risers worked and 106 million kilometers driven on platform jacket structure were completed Sangachal terminal In 2016 SCPX activities continued successfully the projects since the final investment safely by the end of the third quarter, while along the pipeline route across Azerbaijan and decision in late 2013. During 2016 at the pile installation was completed in Oil and gas from Azeri-Chirag-Deepwater Georgia. In Azerbaijan, mainline construction peak of project activities over 24,000 people November. Gunashli (ACG) and Shah Deniz continued continued with approximately 239km of pipe were involved in construction works across to flow via subsea pipelines to the welded and 207km of pipe backfilled. Five all main contracts in Azerbaijan and over The Istiglal rig upgrade and commissioning Sangachal terminal. horizontal directional drilling activities were 80% of them were Azerbaijani nationals. was completed in mid-September. In the successfully completed. The total cost of the SD2 project and fourth quarter of 2016, the rig completed The daily capacity of the terminal’s expansion of the South Caucasus pipeline the SDC04 well, which is the first processing systems is currently 1.2 million In Azerbaijan, at the Borsunlu Camp the shaft (SCP) is estimated to be around $28 billion. completion on the Shah Deniz Stage 2 barrels of oil and about 29.5 million standard was piled in preparation for the Kura West project. The Heydar Aliyev rig drilled the cubic metres of Shah Deniz gas. Overall tunnel boring. The SD2 project includes two new reservoir sections of the SDG02 and SDG04 processing and export capacity for gas, bridge-linked production platforms and 26 wells. It is now preparing to spud the including ACG associated gas is about Western Route Export pipeline subsea wells, 500km of subsea pipelines SDF01 well to drill the top-hole section. 49.3 million standard cubic metres per day. built at up to 550m of water depth and BP, as operator of Azerbaijan International Expansion of the expansion of the Sangachal terminal. The above two rigs have already drilled 12 Gas is exported via the SCP and via a Operating Company, also operates the production wells in preparation for SOCAR gas pipeline connecting the Western Route Export Pipeline (WREP). The South Caucasus pipeline: A wide range of activities were ongoing at commencement of Shah Deniz Stage 2 and terminal’s gas processing facilities and 829km pipeline moves oil from the Caspian construction all offshore and onshore sites and subsequent ramp up of production. Drilling Azerigas’s national grid system. basin via the Sangachal terminal to Supsa on activities continued Georgia’s Black Sea coast. Since 1997, the In 2016, the Sangachal terminal exported WREP has undergone extensive successfully along the more than 286.8 million barrels of oil. This refurbishment by BP and its co-venturers. pipeline route in Azerbaijan. included over 253.4 million barrels through During the year it transported 30.3 million Baku-Tbilisi-Ceyhan (BTC), over 30.3 million barrels of oil. barrels through the Western Route Export Pipeline (WREP), and more than 3.1 million Exploration acquisition of 1,300 square kilometres of 3D Turnaround activity barrels via a separate condensate export data. The acquisition programme used BP’s line. BP has an exploration contract in place with advanced, proprietary Independent Turnarounds are planned periods when SOCAR to jointly explore for and develop Simultaneous Source with Nodes (ISSNTM) operating assets are taken out of service to Works on the Sangachal terminal expansion potential prospects in the shallow water area technology. The processing of the 3D data complete essential maintenance, continued in order to provide processing around the Absheron Peninsula (SWAP). The for the initially acquired area has already inspections or project work that cannot be facilities for the SD2 project. Solid progress contract area is located to the south of the been completed while for other acquired performed while the asset is online. These was made on piping erection and one peninsula in the water depths up to 40 areas it still continues. The full processing is planned breaks are essential for safe and million metres of cable was pulled. The site metres. Its potential reservoir depth is expected to complete by the third quarter of reliable operations over the long term. As conditions have improved over the year 3,000-5,000 metres. 2017. part of the annual work programme, we particularly with finished road surfaces and successfully completed turnarounds on the improved rights of way. Some of the early The 3D seismic acquisition programme, We have also commenced planning for the DWG platform and the West Azeri platform buildings have been handed over to which began in May 2016, was safely first exploration well on the Shafag-Asiman in 2016. commissioning. completed in December 2016 covering block.

10 BP Azerbaijan Sustainability Report 2016 BP Azerbaijan Sustainability Report 2016 11 Overview Our operations Our people Safety Environment Society Our reporting

Managing our workforce We aim to develop the talents of our workforce and to attract the best people to improve our strengths and skills.

BP’s performance depends on a highly-skilled, motivated and talented workforce. We strive to equip them with the skills they need to deliver safe and reliable operations. We are committed to respecting individual differences and giving our employees equal access to opportunities and challenges. Our people In 2016, as the market conditions remained tough, we continued to look for ways to raise our competitiveness by improving efficiency Our long-term success in Azerbaijan depends on having a talented and diverse and better management of costs. This included reducing organizational complexity, which workforce. resulted in some positions occupied both by national and expatriate employees being made redundant. During 2016, BP’s overall Caption: Employees at work: two of the number of talented female employees across BP’s offices in Azerbaijan. headcount in Azerbaijan decreased by 264 to 3,221 employees (3,485 in 2015). This number included 2,947 permanent employees, Five-year nationalization plan performance is managed and updated on an of which 2,635 were nationals. A further 22 BP Azerbaijan has a five-year nationalization annual basis. nationals were on overseas assignments. plan for increasing the share of national staff with an ultimate target of reaching 90% by the We also have a memorandum of Developing national workforce end of 2018. The plan targets professional staff understanding with SOCAR on co-operation in on both permanent and fixed-term contracts the area of recruitment. As part of the Building a strong national workforce in as well as contingent workforce directly nationalization strategy, BP Azerbaijan Azerbaijan remains one of our key priorities. employed by BP for the projects it operates in specialists delivered a number of out-of- We invest in training young people who have Azerbaijan. curriculum sessions and provided other little or no prior work experience, attracting educational support to the Baku Higher Oil new talent and offering varied development The plan, agreed in November 2013 between School students. What we are doing and career opportunities to all employees at BP Azerbaijan and SOCAR, outlines annual Managing our workforce 13 any career level. nationalization targets both on an overall and BP Azerbaijan continues supporting its functional level from 2014 to 2018. It also contractors in development and delivery of Employee communication 14 By the end of 2016, the percentage of national includes the nationalization timelines for their nationalization plans. This includes and engagement citizens among BP Azerbaijan’s professional current and future expatriate roles with the sharing expertise, providing assistance in Learning and development 15 staff was 87% compared to 84% a year ago. If planned numbers of national successors. The preparing performance indicators and we consider only permanent employees, this plan is being tracked against progress, and monitoring implementation. Our code of conduct 16 number would be 89%, which is also an increase from 2015. BP employees and agency staff based Permanent professional staff The number of national senior level managers at BP in Azerbaijan reached 314 in 2016. This in Azerbaijan of BP in Azerbaijan

represents almost 58% of the total senior 4,500 137 managers working in the local office and is an 4,000 89% 4,000 132 76 increase of more than 14% on the previous 731 276 54 3,500 2,907 year. Of these, about 20% were female, 3,500 673 54 12 43 311 2,722 2,715 576 231 3,000 2,530 mostly working in offshore and onshore 562 2,643 3,000 531 537 operations, human resources and finance. 498 2,500 During the year another 22 Azerbaijani 2,500 87% 2,000 86% employees were on assignments in senior 2,000 level positions in other countries. 1,500 85% 1,500 2,693 2,817 85% 2,470 2,619 2,471 1,000 More than 92% of mid-level managers 1,000 500 working for BP in Azerbaijan were nationals. 452 494 474 415 500 312 Additionally, 11 nationals were on mid-level 2012 2013 2014 2015 2016 assignments abroad during 2016. 2012 2013 2014 2015 2016 Expatriate National National (%) Permanent – Male Agency – Male Fixed-term – Male Permanent – Female Agency – Female Fixed-term – Female

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Expatriate workforce Learning and While we are committed to staff nationalization, we also believe that a reasonable ratio of international assignments development to and from Azerbaijan is important for development. During 2016, 37 of our national employees worked at BP locations outside In 2016 we provided a range of safety, Azerbaijan. Almost 30% of them specialized technical, managerial and behavioural training in offshore and onshore operations. sessions in the region. A total of 951 of these were arranged by our local team, with more At the end of 2016, we had 312 expatriates than 8,000 attendees. About 92% of the working for BP in Azerbaijan. Almost two sessions were held in Azerbaijan. thirds of them were from the UK and more than a quarter were from the US. The Continuing professional education remainder were from Australia, Brazil, We continued providing financial assistance to Canada, Colombia, Egypt, Georgia, India, help our national employees attain additional Indonesia, Italy, Trinidad and Tobago and degrees or certificates in their areas of Turkey. By the end of December 2016, there expertise. We supported a total of 36 were 54 new expatriates who arrived to employees through this programme in 2016. work for BP in the country while 157 Some of these were new applicants and some expatriates left, constituting a net decrease continued education from past years. of 103. Challenge programme Recruitment Our global Challenge programme has been running within BP in Azerbaijan since 2003. It BP aims to create and sustain a positive work is intended to develop talented graduates with environment, where employees treat each little previous industry experience who are other with respect and dignity, and are able selected through our annual graduate to fulfil their potential. Selecting the right recruitment programme. During the three-year people for the right jobs is key in achieving programme, Challengers typically complete this goal. We are committed to meritocratic two or three distinct roles. Caption: An engineer talks to colleagues about ideas that could contribute to BP’s success. recruitment and promotion processes. In 2016 we hired four Challengers, and by the In 2016 we received above 750 applications end of the year their total number in Azerbaijan to our annual internship recruitment was 119. programme. Almost 40 interns were hired as Azerbaijan recruitment statistics a result. Other programmes The numbers in the table reflect people recently joining the company We continued to offer language training Ad hoc recruitment Graduate recruitment Total All ad-hoc vacancies at BP in Azerbaijan are Two petroleum engineers courses to our staff and their eligible family advertised on bp.com/caspian. In 2016, we members. By the end of 2016, 100 people discuss work at BP’s Xazar 2015 2016 2015 2016 2015 2016 received more than 5,000 applications for were taking English lessons. Almost 60 chose these roles and hired 13 national employees office. to study Azerbaijani. In addition, expatriates are Female Male Female Male Female Male Female Male with special skills. offered talks on Azerbaijani history, culture and traditions. Business support 1 1 0 Communications 1 0 1 and external affairs Compliance and ethics 2 0 2

two forums in 2016, attended by almost 70 education of employees’ children under the Engineering 2 1 5 7 1 technicians. age of 18. Employee Finance 1 1 0 Health, safety, security Listening lunches During the year, around 500 employees 1 0 1 communication Listening lunches bring together members of successfully applied for loans through the and environment our regional leadership team with employees programme, bringing the total number of Human resources 1 1 0 from a mix of disciplines for an informal lunch participants to more than 2,400 since we Information technologies 0 0 and engagement and open discussion of business-related launched the programme in 2012. Altogether it and services subjects. Employees get an opportunity to has contributed towards loans totalling over Operations 2 17 1 19 1 share their concerns, ask questions and get $44.5 million. Procurement and supply Technicians’ forum answers first-hand, while the leadership hear 1 0 1 chain management The BP technicians’ forum continues to be an opinions from various layers of the Other activities important means of communication with our organization. Nine listening lunches were held Employees who work for BP in Azerbaijan for a Projects 5 2 1 3 7 4 frontline – the technicians who work on during 2016, with more than 170 employees total of 10, 15 or 20 years receive long-service Subsurface 1 1 1 1 2 5 1 production platforms, in terminals and along taking part. awards to mark these anniversaries. The pipelines. We invest in the training and awards are presented by senior management at Tax 1 1 0 development of technicians, and we realize the Loan support programme town hall events. Since 2008, about 1,860 Wells 2 1 4 1 3 5 importance of regular meetings between All Azerbaijani national employees who have employees have been recognized in this way. this group of employees and top management, worked in the company for three years or Total graduates 1 10 1 3 11 4 where they can provide feedback, share more are eligible for our loan support In 2016, we held four town hall meetings in PREP graduates 2 13 15 0 experiences and raise any concerns. programme. The programme contributes Baku to discuss topical issues. We published towards defined bank loan commitments four issues of the staff magazine Compass in Total ad hoc 4 30 1 12 34 13 Since 2008, 22 forums have taken place, relating to the purchase or repair of houses or 2016, both in Azerbaijani and English and Caption: BP employees trial a simulator that will help Technicians recruitment 54 54 0 hosting about 670 participants. These include apartments, house construction, and the distributed them across the region. them learn about risky operations at a safe distance.

14 BP Azerbaijan Sustainability Report 2016 BP Azerbaijan Sustainability Report 2016 15 Our code of conduct

Our code of conduct is our guide to doing the right thing in business. Nothing is more important to BP than making sure we do what is right – and nothing puts us at risk more than failure to do so. Our code sets out the most important principles and expectations to help us live our values in our everyday work. It encourages us to use our judgement to make the right decisions when we are faced with difficult choices.

Our values and behaviours Safety Respect Safety Excellence We focus on maintaining safe, reliable and compliant operations and put safety Courage Caption: A BP employee conducting data submission. and operational risk management at the heart of everything we do. One Team concerns about unethical, unsafe or of us to raise concerns about potential potentially harmful behaviour. misconduct, but it is just as important to Through the values and behaviours, we’re speak up about opportunities for putting in place strong foundations to We continue to work with to ensure that we improvement, to share a different make BP a safer, more trusted and more address the root causes of misconduct. perspective, or even a new idea. Speaking valuable company in the future. Our values While we seek to ensure robust disciplinary up is crucial for business success and and behaviours are the foundation of our actions for misconduct, we also support allows us to improve our processes and code. They define how each of us must act managers in role modelling ethical operations. to ensure that BP sustains its reputation behaviours and we recogniz employees who and continues to earn the trust that allows demonstrate ethical behaviours. We encourage employees, contractors and us to prosper as a company. It is down to third parties to speak up if they are all of us to use the values and behaviours We also engage with our suppliers and concerned that our code of conduct is not to guide our decisions. business partners on E&C issues to support being followed, or simply feel unsure about them to comply with the integrity culture we any situation. expect, and to report any ethical misconduct if it occurs in BP-related operations. Acting BP has zero tolerance for retaliation against What we are doing Ethics and compliance with integrity builds trust and is an important anyone who seeks advice, voices a concern, part of how we do business in the region. repeats misconduct or participates in an Managing safety 18 We continue to conduct instructor – led We seek to clearly communicate our investigation. The consequences for ethics and compliance (E&C) workshops in expectations to our business partners, agree misconduct or retaliation range from the areas of code of conduct, anti-bribery and contractual obligations where appropriate coaching and performance management corruption, anti-money laundering, and take measures where we believe they through to dismissal. competition anti-trust and international trade have not met our expectations or their regulations. We also provide e-learning contractual obligations. OpenTalk, BP’s global helpline, is a modules in these areas. In total, 884 people confidential way in which both employees in Azerbaijan, Georgia and Turkey, including We conducted E&C sessions for senior and thirds parties can raise concerns. It is BP staff, agency personnel and suppliers managers of more than 50 supplier administered by an independent company, is participated in 92 instructor led E&C training/ companies in 2016. We have prepared an available every day of the week at any time, awareness sessions in 2016 and a further E&C brochure as guidance to doing business day or night, and can accommodate calls in 1,193 BP staff completed e-learning with BP, and have asked counterparties to more than 75 languages. Issues raised via modules. cascade these messages into their OpenTalk are reported for assessment and organisation. We continue to issue quarterly further action, as appropriate. In 2016, 55 Our E&C team members are available to newsletters that contain recent case studies cases were reported through the OpenTalk provide guidance and advice, and are one of a illustrating real misconduct and positive helpline regarding issues in Azerbaijan, number of channels for reporting concerns behaviours as well as E&C statistics and Turkey and Georgia. about potential misconduct. Training also news. emphasized the importance of speaking up Investigations of misconduct resulted in 26 and BP’s policy of zero tolerance towards Speak up culture instances of disciplinary action during 2016, retaliation against those who have spoken up including the dismissal of a number of BP in good faith. Our goal is to create an Encouraging speaking up among our employees and agency personnel and the environment where employees and employees and contractors continues to be termination of a number of contracts of third contractors feel comfortable and safe raising critical to our strategy. It is important for all party contractors.

16 BP Azerbaijan Sustainability Report 2016 BP Azerbaijan Sustainability Report 2016 17 Overview Our operations Our people Safety Environment Society Our reporting

The principles clarify that safety is a number one Managing priority regardless of the business environment. In Azerbaijan, our milestones in 2016 include the successful delivery of two major safety turnarounds and significant progress in improving our competitiveness through Safety is our top priority, continuous improvement. driven by our leadership In 2016 we held an annual safety forum for contractors. The aim of the forum was to and applied through our continue efforts to create an incident-free environment within our operations, which can operating management be achieved through shared learning while connecting leaders in BP and our contractors to system. operate as one team. The event was designed to be an interactive discussion and included valuable input from senior leader. A total of 88 contractor companies participated in the event. Creating a safe and healthy working environment is essential for our success. Driving safety We are committed to keeping people safe, In 2016 our driving activity increased by 28%, whether they are working at our sites or living with more than 34.5 million kilometres driven in communities near to our operations. (84.5 million including kilometres driven by contractors) during the year. Operating management system Audit and verification Our operating management system (OMS) is a group-wide framework designed to help us Group audit and verification helps us prioritize manage risks in our operating activities and the safety and reliability of our operations to drive performance improvements. protect the welfare of our workforce, the environment and local communities. BP’s OMS brings together BP requirements on A crane operator performs operations in Azerbaijan were audited five times health, safety, security, the environment, drilling activity on board by BP group in 2016 as part of the group audit social responsibility and operational reliability, coverage plan. As an outcome as well as related issues, such as the Shah Deniz Alpha 36 actions were raised during 2016. maintenance, contractor relations and platform. organizational learning, into a common BP group also conducted rig audits on management system. It sets out the rules and Deepwater Gunashli, West Azeri, West Chirag principles that govern key risk management platforms and Heydar Aliyev and Istiglal drilling activities such as inspection, testing, Safety performance included establishing transparent reporting to rigs. There were 288 actions from these audits competency development and business help determine early warning signals and and 236 of them were closed during 2016. continuity and crisis response planning. We Improving operational safety develop proactive measures to prevent review and amend our group requirements We have completed the year without serious serious accidents at our facilities. In 2016 we At the end of 2016, we successfully completed within OMS from time to time to reflect BP’s process safety incidents. There were six high continued to embed operating discipline in our 98% of the actions which resulted from the priorities and experience or changing external potential incidents in 2016, meaning incidents day to day jobs, reinforcing our ‘follow the group audits from 2010. regulations. Any variations in the application or near misses which could have resulted in a rules, finish what you start and follow up’ of OMS – in order to meet local regulations or health, safety, security or major environmental principles for every person at our facilities. Integrity management circumstances – are subject to a governance incident. Two of these took place in offshore process. OMS also helps us improve the locations. All incidents were investigated and In 2016 BP established safety leadership As part of integrity management, we quality of our operating activities. All lessons learned, reported and shared. principles for our upstream business globally, conducted inspections of our onshore and Caption: A worker on board the West Azeri platform talks to colleagues via radio. businesses covered by OMS undertake an setting the expectations for BP leaders at all offshore facilities in 2016. This included annual performance improvement cycle and We continued to improve our HSE reporting levels. They set out how leaders are about 2,500 equipment and piping assess alignment with the applicable culture within our offshore operations. Topics expected to: pressure system inspections for the supports and concrete foundations, level West Azeri platforms using a remotely requirements of the OMS framework. Sangachal terminal and export operations, monitoring survey of 485 structures, and operated underwater vehicle. In addition, • relentlessly pursue the ultimate objective more than 390 inspections of structures, inspections on Shah Deniz, East Azeri and we completed more than 1,420 pipeline of an injury free workplace. inspections across Azerbaijan and Georgia. Day away from work case frequency Recordable injury frequency (per 200,000 hours worked) (per 200,000 hours worked) • not compromise our focus on safety in Safety performance of BP in Azerbaijan We have spent over 140,000 hours on order to achieve any other business production chemistry to assure fluid flow, 0.12 0.60 objective. 2015 2016 integrity of plant and infrastructure, and quality of export products, in addition over 0.10 0.50 • believe that our safety actions are most Fatalities 0 0 4,600 tonnes of chemicals were 0.08 0.40 effective when we genuinely care about transported to offshore and deployed each other. Days away from work case frequency 0.01 0.01 without incident. By the end of 2016, we 0.06 0.30 had performed 33 inspections of major 0.27 0.04 • maintain an environment for open and Recordable injury frequency 0.08 0.07 process vessels on all seven platforms 0.20 0.21 0.03 0.03 transparent reporting and recognize offshore. We also executed our corrosion 0.09 0.08 0.07 0.02 behaviour which is consistent with our Hours worked (millions) 43.7 59.4 management and fabric maintenance 0.00 0.10 0.01 0.01 values. programmes on all seven platforms as 2012 2013 2014 2015 2016 Total vehicle accidents rate 0.48 0.72 2012 2013 2014 2015 2016 planned. Dayawayfromworkcasefrequency • hold to account those who knowingly Kilometres driven (millions) 27.32 34.55 APIbenchmark OGPbenchmark Recordableinjuryfrequency disregard the rules. APIbenchmark OGPbenchmark

18 BP Azerbaijan Sustainability Report 2016 BP Azerbaijan Sustainability Report 2016 19 Crisis management relevant rescue and recovery standards for and emergency response offshore installations - was successfully achieved. Our crisis and continuity management planning helps respond effectively to As part of our enhancement of oil spill emergencies and mitigate potentially preparedness and response capability, oil severe disruptions in our operations. BP spill equipment has been registered in BP’s identifies potential risks on an annual basis maintenance system and serviced in and carries out regular exercises to test accordance with the preventative how prepared our teams are to respond. maintenance programme.

In 2016 we carried out regular drills and Working with the government exercises to test our assets’ preparedness to respond to emergency events. In We have further strengthened our addition to regular exercises, we co-operation with the Ministry of conducted a cross-border oil spill exercise Emergency Situations in 2016. For to test emergency cross border protocols example, in August the ministry and the effectiveness of the process, in participated in a joint exercise to practice co-operation with State Emergency the deployment of offshore containment Department and Customs. and recovery systems with BP and our oil spill contractor. In December, our Sangachal terminal held a large-scale firefighting exercise. It was We shared our oil spill contingency plans designed to validate existing firefighting for the Azerbaijan export pipelines and equipment capabilities and enhance fire Sangachal terminal with the Ministry of Environment responders’ knowledge, skills and Environment and Natural Resources, experience in dealing with incidents. We SOCAR and Ministry of Emergency also held a major emergency exercise – an Situations in 2016. The plans were We recognize that managing environmental impacts is an essential part of what it incident scenario of helicopter ditching accepted by the Ministry of Emergency Caption: BP’s (left) and SOCAR’s presidents at one of during offshore transit. The primary Situations in 2016. the events aimed at further strengthening our means to responsibly produce oil and gas. objective of the exercise - validation of the co-operation with the government.

What we are doing Environmental performance 22 Waste management 23 Environmental monitoring 24

A lab test conducted as part of an audit and verification that helps us prioritize the safety and reliability of our operations to protect the welfare of our workforce, the environment and local communities.

20 BP Azerbaijan Sustainability Report 2016 BP Azerbaijan Sustainability Report 2016 21 Overview Our operations Our people Safety Environment Society Our reporting

to the previous year, totalling almost 24,000 Environmental Waste tonnes. The volume of cuttings shipped from production platforms and drilling rigs to Serenja hazardous waste management performance management facility was also 10% larger at 59,215 tonnes. The permitted discharges of cuttings to sea was 17,247 tonnes, comprised of drill BP works to avoid, We adopt a life cycle cuttings with synthetic-based mud (SBM) minimize and mitigate approach to waste from Chirag platform and water-based mud (WBM) from all other platforms and mobile environmental impacts management, with a goal drilling rigs. There were also four minor incidental drill cutting spills, which together wherever we do business. of avoiding, reducing and accounted for less than 200 litres.

Our environmental management system in reusing the waste that is Sewage Azerbaijan is independently audited against created by our operations. ISO 14001. In 2016, two rounds of external ISO We further reduced the number of sewage 14001 audits were conducted at West Chirag treatment plant outages offshore causing and West Azeri platforms, Sangachal terminal, A BP employee talks to In 2016 we achieved a 51% reuse and recycling releases of untreated sewage. There were Azerbaijan export pipelines, Supply Base and external environmental rate for non-hazardous waste. only three such outages in 2016 resulting in SPS Central Waste Accumulation Area. The The recycled non-hazardous waste streams the discharge of 23 m3 of untreated sewage. audits found zero non-conformances with the auditors, as part of our work included metals, plastics, paper, cardboard and system, and for the first time raised the aimed at avoiding, minimize others. The remaining portion of non- We regularly monitor and analyse the assessment of our internal environmental audit and mitigate potential hazardous waste was sent to landfill with small performance of sewage treatment and the process to the top ‘benchmark’ level. amounts (waste tyres only) stored. quality of discharged water. In the first half of environmental impacts year, we continued to observe results for Air emissions wherever we do business. Also, 52% of hazardous waste was sent for faecal coliforms exceeding the standards at reuse and recycling, the largest streams being Shah Deniz and Azeri platforms. However, Our emissions to air originate from internal oily water, cement and oils. This also includes closer to the end of year, the situation at all combustion of fuels, gas flaring and venting. base oil and water recovered as a result of three Azeri platforms improved as a result of Also, there are indirect emissions resulting from In addition, there were 3.3 kilotonnes flared Oil spills treatment of drilling cuttings, muds, produced process amendments. We plan to install an use of electricity from municipal grids. from Istiglal drilling rig as part of Shah Deniz 2 sand and tank bottom sludge treated at additional treatment unit at Shah Deniz. project during well clean-up. There were 10 fully contained oil spills in Serenja hazardous waste management facility. In 2016 we emitted about 815,2 thousand 2016, where we avoided discharge of The recovered base oil was injected into the oil The sewage treatment plant at Sangachal tonnes of net greenhouse gases (GHGs), which BP is a member of the ‘World Bank Zero hydrocarbons to sea. There was one case export pipeline, reused for mud preparation or terminal was operating in compliance with is 4% higher than in 2015. The largest Routine Flaring 2030’ initiative, which seeks to at our Shah Deniz platform, when a small used as fuel. Recovered water was used at standards throughout the year. Along the No produced water was disposed via other contributors to our GHG emissions are Central eliminate routine flaring from oil assets by 2030. fraction of oil-based mud from a ruptured Serenja for cooling and dust prevention export pipelines, an issue with elevated onshore waste management routes in 2016. Azeri platform (23%), Deepwater Gunashli In 2016, we completed a detailed analysis of hose reached the sea –which resulted in 15 purposes. faecal coliforms parameters at the reed beds platform (20%) and ACG part of Sangachal flaring to identify routine flaring. litres spilled. Our immediate response to oil of PSA2 and IPA1 facilities continued in The discharges of produced water to sea terminal (19%). spill incidents resulted in a 99.98% We continued to dispose the accumulated 2016. BP investigated the issue and fixed the significantly increased in 2016, primarily due to The amount of sulphur oxides (SOx) and recovery rate of spilled volume. In treated drill cuttings from Serenja with over performance issues with the wastewater new sources of discharges. All discharged A focus on reducing flaring, in particular on nitrogen oxide (NOx) emitted slightly increased November, we conducted an environmental 78,000 tonnes sent to landfill in 2016. treatment plants which was one of the main produced water was treated and directed to a fixing the flaring system at Chirag 1 platform, in 2016 compared to 2015. As the largest response exercise to test our Azerbaijan contributors to the reedbed discharge specially designed pipe submerged under the has led to a decrease in the amount of gas we contributor, the logistics operations have capability to respond to large-scale oil spill Drill cuttings quality. sea level to minimize the environmental flared at our operational facilities from 204 produced 29% of both SOx and NOx emissions incidents impacting the offshore and impact. kilotonnes in 2015 to 192 kilotonnes in 2016. across BP operations in Azerbaijan. coastal areas. Drilling activity in the Caspian Sea in 2016 Produced water resulted in a further growth of drill cuttings. Small volumes of produced water from the Gross flaring by asset In order to manage this, we increased Our operations manage significant volumes Shah Deniz field, totalling 37,255 tonnes in (thousand tonnes) Net GHG emissions Energy consumption re-injection to subsurface by 15% compared of wastewater, created, for example, as a 2016, were sent to storage ponds at the 1000 result of using water to test vessels or Sangachal terminal. 815.2 pipelines, or cooling water. 2014 2015 2016 800 770.8 11,2 699.4 689.2 500 623.3 54,3 Fuel gas 949.7 957 980.9 20.39 As oil reservoirs gradually deplete every 7.7 (thousand tonnes) 600 Operational discharges of drilled year, the share of water extracted with the Fate of drilled cuttings in 2016 29.5 19.98 oil increases. Produced water from the Diesel 83.0 83.3 86.3 16.8 cuttings to sea (tonnes) 400 112.6 (thousand tonnes) 400 Azer-Chirag-Gunashli (ACG) field is Facility Cuttings 113.0 separated both offshore and at the Electricity 200 13.92 import 6,821 10,167 1,825 13.06 Chirag - 1 1,321.8 (SBM) Sangachal terminal. In March, the West Azeri 3 300 75.1 (megawatt hours) 1 6.6 2012 2013 2014 2015 2016 platform became the third installation at the 41.5 Operationalnetgreenhousegas(GHG)emissions Deepwater Gunashli 0 ACG field to establish a process to separate 106.2 3.1 28.0 20.4 (thousandtonnes) produced water at the platform. The primary 200 98.2 17.4 19.4 Central Azeri 1,478.5 disposal route for separated produced water 18.2 10.7 NormalizedoperationalGHGemissions 135.6 (tonnesperthousandbarrelsofoilequivalent) 53.1 24.7 Generated waste quantities (tonnes) West Azeri 594.6 from the ACG field is through water 61,2 7.8 33.5 reinjection wells to sustain pressure in the oil 85.7 36.6 Gross non-GHG emissions 100 5.1 42.8 East Azeri 154.2 reservoir. 34.8 65.1 2014 2015 2016 (tonnes) 21.1 42.9 31.8 37.6 2 10.5 12.4 14.8 9.0 Hazardous 2016 154 11,222 Dada Gorgud drilling rig 5,230.3 In 2016 the ACG field produced 6,741,128 Total 475.9 256.4 413.1 203.7 195.9 waste (excluding 2015 150 10,966 tonnes of treated produced water, of which 2012 2013 2014 2015 2016 314,462 81,314 97,326 Maersk Explorer 0 produced water 2014 155 11,179 2,681,325 tonnes were separated at and sewage) offshore facilities (EA, WA and DWG) and Sangachal terminal (SD) East Azeri 2013 122 8,887 Shah Deniz Alpha 8,467.3 1. Injected 23,824 Sangachal terminal (ACG) West Azeri Non- 2012 114 8,649 4,059,803 tonnes were treated at Sangachal Chirag Central Azeri hazardous 13,535 18,650 22,474 terminal and sent to Central Azeri for 2. Shipped 59,215 Deepwater Gunashli West Chirag Total 17,246.7 waste Nitrogen oxide (NOx) Sulphur oxides (SOx) reinjection at Azeri field. 3. Discharged 17,247

22 BP Azerbaijan Sustainability Report 2016 BP Azerbaijan Sustainability Report 2016 23 Environmental monitoring For many years, environmental surveys have been helping us to identify and understand the impacts of our activities on local Caption: An environmental specialist collects water from the ambient water source check the quality. environments.

We run a programme for ambient measured the distribution and abundance monitoring surveys to investigate the environmental monitoring around our of macrobenthic populations in the area health of fish species in the bay area. offshore and onshore facilities. We and the physical and chemistry elements conducted 20 surveys in 2016. of seabed sediments. Onshore, 13 surveys were carried out around our facilities. These included Society Offshore, we conducted seabed Near shore, we conducted an monitoring air quality, soil and vegetation, monitoring surveys around Chirag-1, West environmental survey in Sangachal Bay to groundwater and surface water, and Chirag, Central Azeri and East Azeri understand water and sediment quality species diversity at the Sangachal terminal, The energy we produce serves to power economic growth and improve the platforms, as well as a post-drilling survey after completion of SD-2 project trenching BTC and WREP pipelines and the Serenja at the SD-2 West Flank location. We activities. We also conducted fish Hazardous Waste Management Facility. quality of life for millions of people. We aim to have a positive and enduring impact on the communities in which we operate.

What we are doing Stakeholder engagement 26 Enterprise development 27 Working with communities 28 Supporting education, 30 culture and sport

A worker examines valves on board the Shah Deniz Alpha platform to check the safety and compliance of our operations.

24 BP Azerbaijan Sustainability Report 2016 BP Azerbaijan Sustainability Report 2016 25 Overview Our operations Our people Safety Environment Society Our reporting

As part of the workforce nationalization BP Spend with Az Owned Suppliers, strategy, we are working to improve national 2012-2017 Stakeholder Enterprise representation in our contractors’ workforce. Our strategy is designed to make sure BP contractors are accountable for the planning 3000 engagement development and delivery of the workforce nationalization agenda at the early sourcing stage. It is 2500 BP in Azerbaijan engages We are helping to build based on BP values and sets out the target 1,174 1,442 for 90% of the professional workforce to be 2000 759 with a wide range of a sustainable local supply nationals, as set out in production sharing 1500 agreements that we operate on behalf of 533 284 stakeholders, building chain for the Caspian region government of Azerbaijan and our co- 180 108 by supporting targeted venturers. This applies to any contractor 1000 490.1 175 relationships that help registered to do business in Azerbaijan and 51 us to make responsible capability development in employing expatriate personnel in 500 481.4 835 1,233 1,075 1,178 Azerbaijan under a long-term contract with decisions. Azerbaijan’s business BP. We have also updated our standard 2012 2013 2014 2015 2016 contract terms and conditions to reflect new SME sector. requirements on national workforce State-owned We continued to work with the State Oil development. JV with Az Capital Company of the Republic of Azerbaijan (SOCAR) on issues of mutual importance Together with our co-venturers in Azerbaijan, Enterprise development and within the framework of our production sharing we signed new long-term contracts with 167 training programme The programme has helped local agreements, host government agreements local companies in 2016, worth about $1.06 companies secure international contracts and other agreements. billion. Through our enterprise development and with BP in Azerbaijan in excess of 61.5 training programme, launched in 2007, we million in 2016. BP’s group chief executive, Bob Dudley met Altogether, we worked with 266 local work to identify local companies with with the President of the Republic of companies and individuals in Azerbaijan in strong business potential and support In 2016 three companies completed the Azerbaijan, Ilham Aliyev on a number of 2016, of which 58% were small and medium- them in meeting international standards programme, bringing the total number of occasions throughout the year. He was sized enterprises and individuals. Our joint and enhancing their competitiveness. The companies that have completed it to 199. received by President Aliyev during the World operations and projects expenditure in long-term aim is to increase the number of Economic Forum in Davos, Switzerland in Azerbaijan totalled nearly $2.06 billion in 2016. local companies that can provide products Further 118 companies went through the January 2016, at the World Energy Congress in As part of this, our in-country, operations-only and services to the industry in the region, initial appraisal in 2016. A total of 1,981 Istanbul, Turkey in November, and in Baku in expenditure with local suppliers in Azerbaijan thus contributing to the development of companies have been appraised since the December. The last visit was also marked by Caption: A managing director of a contractor talks about the co-operation with BP. was $0.90 billion. the local economy. programme started. the signing of a letter of intent for the future development of the Azeri-Chirag-Gunashli (ACG) field in the Azerbaijan sector of the portfolio as well as update on BP’s strategy journalists and guests of our co-venturer Caspian Sea. and performance. companies as well as representatives of financial, educational and other organizations As part of the co-operation with the from a number of countries. For 22 years, BP and SOCAR have been government of Azerbaijan, BP AGT president, interacting as reliable partners. They work Gordon Birrell, regularly met with We saw substantial media interest in our government officials to provide updates on activities during 2016 and engaged media in all together in many projects – Azeri-Chirag- the ongoing operations and projects, aspects of our business in Azerbaijan, Gunashli, Shah Deniz, the Southern Gas including Shah Deniz Stage 2 and Southern arranging briefings and providing interviews for Corridor, the construction of oil and gas Gas Corridor. In February, Gordon Birrell and local and international journalists. We invited pipelines are the most important projects for members of his leadership team attended representatives of key media outlets to all our country. And this co-operation has a great the Southern Gas Corridor Advisory Council BP-hosted external events. We also arranged future, because, along with these projects, Second Ministerial Meeting with the trips to our sites for visiting international media work is under way on other promising participation of President Ilham Aliyev. In representatives. Our 24-hour media response initiatives. April, Gordon Birrell met with President line was available to the media. Aliyev as part of a meeting arranged with the American Chamber of Commerce delegation. Revenue transparency In June, he hosted President Aliyev on the BP Ilham Aliyev stand at the 23rd Caspian Oil and Gas The Extractive Industries’ Transparency President of Azerbaijan Republic Exhibition in Baku. In September, BP’s Initiative (EITI) supports disclosure of Vice-President for Shah Deniz 2 Projects payments made to, and received by, In May, BP’s board of directors and board Ewan Drummond and SOCAR President government in relation to oil, gas and mining committee led by the chairman, Carl-Henric Rovnag Abdullayev hosted President Aliyev activity. Svanberg, and BP’s chief executive, Bob at the Heydar Aliyev Baku Deepwater Jackets Dudley, visited Baku. In the course of the visit, Factory to witness jackets sail-away of one of As a member of EITI, BP works with the board members were received by the the Shah Deniz 2 platforms. governments, non-governmental President of the Republic of Azerbaijan Ilham organizations and international agencies to Aliyev. In 2016 BP group chief economist, Spencer improve the transparency of payments to Dale visited Baku to launch the BP Energy governments. A contractor who completed In June, BP’s Upstream CEO, Bernard Outlook report for 2016. The report was Looney, and his leadership team, hosted a presented to a wide range of audiences We have played an active role in the local the Enterprise Development two-day BP investor field trip in Baku, including key ministries, embassy and EITI process as a member of the multi- Programme, receives a Azerbaijan. The event also included sessions international organizations, civil society stakeholder steering group, and as a certificate from a senior BP with other key external stakeholders, such as members and journalists. co-ordinator of the group of participating government representatives. The key companies. In August, BP in Azerbaijan official. objective of the meeting was to provide the During the year, we hosted about 22 site visits submitted its EITI report covering the period analysts in-depth review of BP’s Upstream to the Sangachal terminal with politicians, of January-December 2015.

26 BP Azerbaijan Sustainability Report 2016 BP Azerbaijan Sustainability Report 2016 27 Overview Our operations Our people Safety Environment Society Our reporting

designed to improve local education, build • Renovating water piping and facilities in Lak rights of our workforce and those living in Working with community-based skills and capabilities, and village in the Samukh region. communities affected by our activities. provide training and finance that local enterprises need in order to grow. Regional microfinance programme with the We set out our commitments in our human communities European Bank for Reconstruction and rights policy and our code of conduct. Our Computers for pre-school children Development operating management system (OMS) contains We support a programme, run by the PCs4KIDS In 2016 the regional microfinance programme guidance on respecting the rights of workers We aim to have mutually Foundation, to supply kindergartens with used with the European Bank for Reconstruction and and community members. computers in communities close to the BTC/ Development was finalized. From the inception beneficial relationships with SCP pipelines. The purpose of the project is to of the project a total number of 127 loans Human rights principles are already at the heart create opportunities for pre-school aged ($703,899) were issued in the Shamkir, Yevlakh, of many of BP’s existing practices, particularly in the communities around children to develop their cognitive skills, such as Goranboy and Yevlakh districts. A total of 61 our code of conduct and values, as well as in our operations, active listening and creative thinking through the loans will be used in agricultural, eight in service many operational requirements. use of entertaining computer programmes. and 58 in trading activities. underpinned by open In 2016 we distributed 209 computers and notebooks to kindergartens located in the Building early intervention services dialogue and working Samukh, Goranboy, Yevlakh, Agdash, Shamkir, In June 2016 we launched a new community Agstafa, and Tovuz districts. Since 2014 more project to build early intervention services in 10 together to address than 300 computers and notebooks have been districts along the pipeline route – Hajigabul, distributed to the kindergartens in 11 regions Kurdamir, Agdash, Ujar, Yevlakh, Samukh, community challenges. through which the pipelines pass. Goranboy, Shamkir, Tovuz and Agstafa. The project is designed to provide services to Health awareness sessions identify children’s disabilities and developmental Maintaining community relations In 2016 we organized 117 community delays as early as possible so appropriate awareness sessions on tuberculosis in the assistance can be given. The work includes BP regularly informs communities along the communities of Hajigabul, Agsu, Kurdemir, Ujar, establishing early intervention centres in 10 Baku-Tbilisi-Ceyhan (BTC) pipeline and the Agdash, Yevlakh, Goranboy, Samukh, Shamkir, districts, training three early intervention South Caucasus pipeline (SCP) route in Tovuz and Agstafa districts along the pipeline. In specialists for each district centre, empowering Azerbaijan about our plans and listens to their addition, two sessions were delivered in parents to be active participants in their concerns. We engage in a number of ways, Azimkand, Sangachal and Umid districts in children’s development and building public Caption: A tutor talks in a classroom, as part of our health awareness sessions in the communities. from community meetings and the distribution Garadagh. From the inception of the project 130 awareness of the importance of early In 2016 we continued to identify and address of literature, to written correspondence and sessions reached out to over 2,600 community intervention. potential human rights impacts in the areas of responses to requests or complaints. members. The sessions were delivered by recruitment, workforce welfare, land acquisition liaison officers representing BP and our Contractors working for the SCPX project are doctors from the German Industrial and Medical During 2016, 392 people including doctors, and livelihood, as well as other related issues in Our community liaison officers hold public construction contractor continued to register, required to prioritize recruitment of personnel Consulting and State Lung Institute. nurses, teachers, social workers and parents affected communities. Specific activities have consultations and manage community-related acknowledge and respond to all community from local communities in the vicinity of project participated in the community meetings held included quarterly social risk review sessions, a grievances and requests in these communities. grievances and requests. activities. These may include skilled, semi- IT Essentials course for Sangachal in 10 regions. revision of the human rights responseplan; skilled and unskilled positions, depending on the and Umid communities technician forums (two in Azerbaijan, one in The number of registered third-party violations We aim to register and acknowledge type of construction activities to be undertaken. Our IT Essentials course aims to increase English for Communities Georgia); a people forum day in Ankara; over such as grass fire, damage to line markers and community grievances within seven days, and Job announcements where descriptions of opportunities for income generation and Launched in April 2016 the project is 650 BP employees have participated in training trespassing within the safety zones was 159 in address them within 30 days. This year through procedures to be undertaken by the applicant employment in the local community. In 2016 designed to enhance the quality of English sessions on the Code of Conduct (which 2016 (47 in 2015). investigating and responding to grievances we are clearly explained are also placed at different around 200 people from Sangachal and Umid language teaching in the communities. The includes human rights policy), regular human have followed a defined process to recognize locations in the communities adjacent to districts, participated in the course, which is scope includes two aspects – English resources visits to offshore and onshore sites; During 2016 we conducted more than 900 and compensate 40 bona fide users of project construction activities, in the local municipality implemented through Qafqaz University. The language teaching trainings for teachers and and the establishment of monthly labour group and individual consultation meetings with land (actual land users). and depending on the position can be course is offered in Azerbaijani and covers English language sessions for community management forums and quarterly labour a total of around 5,000 external stakeholders. announced at a national level. At the end of fundamental computer and career skills for members. management committees. The SCPX project continues to engage with 2016 95% of the unskilled workforce was from entry-level IT jobs. Topics covered include It aims at supporting community members to Grievance management communities along the 424 kilometre pipeline project-affected communities and municipalities laptops and portable devices, wireless develop skills and build capacities that would Voluntary Principles on Security and Human We believe that open dialogue helps to build route in co-ordination with its pipeline and 89% of the total workforce, over 2,300 connectivity, security and communication skills. help them expand their employment Rights strong, mutually beneficial working relationships contractor, Saipem-Azfen Joint Venture (SAJV). people, were Azerbaijani nationals. opportunities. We are a signatory to the Voluntary Principles on over the long term, and enables all sides to Additionally, 23 people successfully graduated Security and Human Rights, which provide a constructively resolve any disagreements. In 2016, 39 community awareness meetings Land acquisition - Azerbaijan from the first phase of the project in 2016 and The project is implemented by the British framework for companies to assess whether were held across communities in Kurdamir, The land acquisition process for the SCPX went on to take the Cisco Certified Network Council in collaboration with the Ministry of human rights issues are likely to occur as a result We received 135 requests from communities Yevlakh, Ujar, Hajigabul, Agdash, Goranboy, and project successfully continued in 2016. Associates training course and intensive English Education of Azerbaijan. of security activities within local operations, and and other stakeholders, mainly relating to Agstafa regions. These sessions covered topics Following execution of land lease agreements language improvement course. to allow appropriate precautionary steps to be getting permission for infrastructure works to including community safety, the recruitment across the SCPX right-of-way (ROW) in In 2016 75 teachers from around 50 schools taken. be carried out on the pipeline corridor. By the process and job opportunities and general Azerbaijan, we completed compensation Social infrastructure improvement in in Goranboy, Samukh, Shamkir, Tovuz and end of 2016, we responded to 118 of these updates on the project. payments to 2,921 private land owners/users Yevlakh, Ujar and Samukh communities Agstafa participated in face-to-face training Our state partner in protection of operations, requests, while 17 are to be closed-out in and 65 municipalities. We launched social infrastructure projects in sessions on the English language. The Export Pipelines Protection Department (EPPD), 2017. In addition to this, the SCPX project held 73 various project affected communities in 2016. teachers will use their improved language and which employs 76 training officers, continued to school safety sessions and a children’s art In addition, there were a number of factual user These included: teaching skills to provide English language provide training on the Voluntary Principles to Our grievance resolution mechanism for competition as part of the school safety agreements executed and compensations lessons to schools and community members. their staff. In 2016, 63 officers completed communities along the pipelines’ route has programme in which over 4,200 schoolchildren made. • Renovating two kindergarten buildings in training on the principles been in place since 2007. During 2016, we and 330 teachers attended. In addition, the Nematabad and Ashagi Garkhun villages of Ten teachers out of 75 (two from each region) received 20 BTC/SCP pipeline related project implemented a timber donation The compensation process and principles are in the Yevlakh region. were identified and trained to offer quality BP’s private security contractor provided training complaints, 17 of which were responded by the programme which provides SCPX project line with our guide to land acquisition and English teaching for community members. on the Voluntary Principles to 151 personnel end of the year. We responded to one more this affected communities with a useful resource compensation framework. The document can • Repairing a kindergarten building in Garaberk working at BP sites in 2016. January and are working on the last two. while enabling timber from the project to be be found online at bp.com/caspian. village in the Ujar region. Business and human rights re-used. We have a ‘114’ telephone line for communities The South Caucasus Pipeline Expansion (SCPX) Development initiatives • Renovating the village medical centre in We respect internationally recognized human neighbouring Azerbaijan export pipelines. The project continues to implement a community During 2015-2016 the timber donation Nematabad in the Yevlakh region. rights as set out in the International Bill of line can be used to report any improper use of grievance mechanism in order to help us to programme covered 600 households across 52 As part of our operations in Azerbaijan, we Human Rights and the International Labour excessive force or abuse of human rights and is understand and respond to all community communities within eastern, central and support a variety of community and sustainable • Installing a heating system at the Irevanli Organization’s Declaration on Fundamental overseen by the state security provider. concerns. In 2016, a team of 11 community western parts of the pipeline route. development initiatives, including projects secondary school in the Yevlakh region. Principles and Rights at Work. These include the

28 BP Azerbaijan Sustainability Report 2016 BP Azerbaijan Sustainability Report 2016 29 Overview Our operations Our people Safety Environment Society Our reporting

Azerbaijan Business Case Competition athletes that have been selected as our Supporting University with objective to enhance BP supports the Azerbaijan Business Case ambassadors. capacities and competencies of data Competition for university students, in science practices and commence a which teams compete to solve real-life We carried out the elite athlete development education, programme in big data analytics and data business problems using their knowledge in and training programme in collaboration with sciences in Azerbaijan. business disciplines from finance and the National Olympic Committee of the marketing, to accounting and management. Republic of Azerbaijan, the Ministry of Youth culture The project is part of BP and its co-ventures’ They present their solutions to a panel of and Sports of the Republic of Azerbaijan and commitment to supporting education, judges representing major businesses in Michael Johnson Performance (MJP). training and capacity-building in the country. Azerbaijan. and sport It is also designed to have a wider impact by The project aimed to create opportunities for a providing opportunities for public and private The 2016 competition was hosted by ADA large group of national athletes and coaches to sector representatives to use the centre’s University, with support from BP and other benefit from MJP’s international experience as In addition to our resources. sponsoring industry organizations. 51 teams they work to achieve sporting excellence from Azerbaijan applied to take part in the enhancing Azerbaijan’s representation in community development Processing and managing big data and competition, with three teams chosen as international sporting events. initiatives, we support information assets are at the forefront of finalists. The students went through five modern science. This includes the capture, weeks of training in business case analysis and ADA Baku Summer Energy School programmes that focus on storage, searching, transferring and analysis strategy development and four weeks of of huge data sets. The insights they can preparation sessions. BP provided $3,070 in BP sponsored the 10th Annual Baku Summer education and capacity- provide have major implications and impacts sponsorship and our employees contributed to Energy School of Caspian Center for Energy in a diversity of sectors and businesses. the project as trainers, coaches and a jury and Environment of ADA University. building, culture and sport. panel member. Caption: A student of a BP sponsored training school Through the ability to store and process The annual two-week certificate programme demonstrates his skills on a model equipment. huge volumes, the centre will allow Sport initiatives for energy professionals, which was arranged Educational initiatives immediate access to thousands of with SOCAR, BP and ExxonMobil, brought documents on specific topics which can be The project scope also includes the training of We continued our official partnership with the together 46 participants from 17 countries in Our involvement in education is diverse and searched for and retrieved in seconds. 20 local trainers who will use the new National Olympic and Paralympic Committees. 2016 to examine and gain a better wide-ranging, guided by our goal of building teaching methodology and skills, specializing This includes sponsoring Azerbaijan’s National understanding of global and Caspian energy capability to support the oil and gas industry Agricultural Vocational Education: in the newly-created occupations and trades. Olympic and Paralympic teams and a group of and environment issues. in Azerbaijan. Development of New Occupations If successful, the pilot phase experience will Launched in August, the project aims to be applied to scale up the project to cover all Azerbaijan oil and gas scholarship enhance the agricultural vocational training agricultural vocational schools across the programme system by developing new agricultural country. The Azerbaijan oil and gas scholarship occupations and trades. It is implemented programme, which is funded by BP and its by the British Council in collaboration with Vocational training for communities Caption: DVD cover for the documentary - Sarylar- ajourney to Karabakh - funded by BP. co-venturers, enables students to pursue the Ministry of Education. In December 2015 BP on behalf of its undergraduate and graduate studies in co-venturers signed an agreement with the engineering and geosciences at universities The project will develop up-to-date teaching State Oil Company of the Republic of in Turkey and Azerbaijan. In 2016 we materials, textbooks and training Azerbaijan (SOCAR) to extend the support of provided scholarships to students, totalling methodology for agricultural occupations vocational training for communities. Under the Cultural initiatives $ 243,456. and trades which will be used for teaching in agreement, in 2016, 47 young people, from a agricultural vocational schools all over district close to the Sangachal terminal trained The documentary film “Sarylar”, sponsored by Establishment of Big Data Sciences Azerbaijan. at SOCAR’s Gobustan Regional Training BP, is the company’s contribution to the wider Research and Training Centre at ADA Center to become qualified technicians. recognition of a unique breed of horses whose University The newly-developed occupations and home is the Karabakh region of Azerbaijan. It is Launched by BP and its co-venturers in disciplines will cover such areas as Build Your Future Project a touching story of the beautiful creatures October 2016 the project aims to institute a horticulture; crop production; and Launched in September 2016 the project aims known as the Karabakh horses named Sarylar, first of its kind functional centre at the ADA agricultural machinery/agro-service. to help students from disadvantaged defining the origin, history and characteristic backgrounds prepare for university. The features of these thoroughbred horses. programme targets students who have a strong desire to study but who cannot afford The documentary is a joint product created by tutorial services. AzerbaijanFilm and STUDIO TOR 1 Filmproduktion of Berlin. BP on behalf of its co-venturers provides support to students from the Garadagh region. BP in Azerbaijan presented a documentary film about the jazz virtuoso Vagif Mustafazade in As part of the project, which is implemented 2016. BP’s support for the production of the by a local education centre and a consultancy, film “Vagif as I knew him” is part of its 28 people took preparation courses for long-term commitment to Azerbaijan and to university admission exams. promoting its rich cultural heritage.

BP summer students’ geology field course The documentary is in recognition of Since 2003 BP in Azerbaijan has sponsored a Azerbaijan’s and one of the world’s summer field course providing theoretical Participants of the grandmasters of jazz, Vagif Mustafazade - knowledge and hands-on experience in BP-sponsored Annual Baku founder of a new genre in the art of music – sedimentology and structural geology for Summer Energy School, the jazz-mugham. The film features his life undergraduate and graduate students. In total, episodes as well as other well-known 19 university students were selected from 159 which examines global musicians’ thoughts about this world- applicants following a knowledge based and Caspian energy and renowned jazz performer of Azerbaijan. The assessment. The course was led by environmental issues. documentary is a joint product created by Buta representatives of Azerbaijan’s National Film and the Ministry of Culture and Tourism of Academy of Sciences and the University of Azerbaijan Republic. Caption: BP’s athlete ambassadors who represented BP during the 4th Baku Islamic Solidarity Games. Michigan in the US.

30 BP Azerbaijan Sustainability Report 2016 BP Azerbaijan Sustainability Report 2016 31 1 Five-year performance data Independent assurance statement For the year ended 31 December 2016 Operating 2012 2013 2014 2015 2016 We have reviewed the BP in Azerbaijan • Whether the Report covers the key Our conclusions Total hydrocarbons produced (thousand barrels of oil equivalent per day)2 893 909 900 903 908 Sustainability Report 2016 in order to sustainability issues relevant to BP in Based on the scope of our review, our 3 provide assurance to BP management that Azerbaijan in 2016 which were raised in Financial the data, statements and assertions made the media, BP Azerbaijan’s own review of conclusions are outlined below OPEX (operating expenditure) – total spend, gross ($ million) 1,360 1,542 1,766 1,388 969 regarding the sustainability performance of material sustainability issues, and selected BP in Azerbaijan are supported by evidence internal documentation. 1. Does the Report cover the key issues? CAPEX (capital expenditure) – total spend, gross ($ million) 3,669 4,862 7,170 7,674 6,470 or explanation. Our scope of work and • Whether sustainability claims made in the We are not aware of any key sustainability conclusions can be found below. Safety Report are consistent with the explanation issues relevant to BP in Azerbaijan which and evidence provided by relevant BP Fatalities – employees 0 0 0 0 0 were raised in the media or the outcome managers. of BP Azerbaijan’s own materiality process Fatalities – contractors 0 0 0 0 0 Independent assurance statement • Whether the sustainability data presented that have been excluded from the Report. Days away from work cases – workforce 3 5 0 2 3 to BP management in the Report are consistent with the relevant business unit level data records. Days away from work case frequency – workforce 0.03 0.03 0 0.01 0.01 We have performed a limited assurance 2. Are the data and claims regarding BP in engagement on selected performance data Azerbaijan’s sustainability performance Recordable injuries – workforce 20 40 14 17 22 and statements presented in the BP in contained within the Report supported by Recordable injury frequency – workforce 0.21 0.27 0.09 0.08 0.07 Azerbaijan Sustainability Report 2016 (the In order to form our conclusions evidence or explanation? Report). Hours worked – employees (million hours)4 5.55 13.47 13.41 8.5 9.2 we undertook the steps outlined We are not aware of any misstatements below. in the assertions and data presented 5 Hours worked – contractors (million hours) 13.5 16.5 18.8 35.2 50.2 1. Reviewed a selection of external media by BP management within the Report Respective responsibilities Environment reports and internal documents relating regarding BP in Azerbaijan’s sustainability BP’s management in Azerbaijan are to the sustainability performance of BP in performance. Direct carbon dioxide (CO2), gross6 (thousand tonnes) 3,543.70 3,021.80 3,846.50 3,275.21 3,394.17 responsible for the collection and Azerbaijan in 2016. Indirect carbon dioxide (CO2),7 gross presentation of the information within the 2. Reviewed the outcome of BP Azerbaijan’s 0.6 0.6 0.7 1. 2 1.6 (thousand tonnes) Report. Management are also responsible own processes for determining the key Our independence for the design, implementation and issues to be included in the Report. Direct methane (CH4), gross (thousand tonnes) 11. 2 6.8 11. 6 5.9 5.9 maintenance of internal controls relevant to We have implemented measures to comply Direct greenhouse gas emissions,8 gross the preparation of the Report, so that it is 3. Reviewed information or explanation about with the applicable independence and 3,776 3,164 4,067 3,400 3,543 (thousand tonnes CO2 equivalent) free from material misstatement, whether the Report’s sustainability performance professional competence rules as articulated due to fraud or error. data and statements. Whilst we reviewed by the IFAC Code of Ethics for Professional Flaring (exploration and production), gross (tonnes) 475,910 256,423 413,120 203,651 195,893 documentation to support the sustainability Accountants and ISQC12. Ernst & Young’s Sulphur oxides (SOx), gross (tonnes) 114 122 155 150 154 data contained within the Report, we did independence policies apply to the firm, Our responsibility, in accordance with not test the data processes for gathering, partners and professional staff. These Nitrogen oxides (NOx), gross (tonnes) 8,695.20 8,887 11,179 10,966 11,222 management’s instructions, is to carry out collating and reporting data at country or policies prohibit any financial interests in our Non-methane hydrocarbon, gross (tonnes) 2,539.70 1,505 3,406 2,438 767 a ‘limited level’ assurance engagement on site level. clients that would or might be seen to impair selected data and performance claims in the 9 independence. Each year, partners and staff Number of oil spills 12 11 6 2 11 Report (“the subject matter information”). are required to confirm their compliance with Volume of oil spilled (litres) 175,716 15,232 14,311 1,045 67,372 We do not accept or assume any The limitations of our review the firm’s policies. responsibility for any other purpose or to any Our evidence gathering procedures were Volume of oil unrecovered (litres) 156,794 643 40 805 15 other person or organisation. Any reliance designed to obtain a ‘limited level’ of Operational discharges to water – drill cuttings with synthetic-based any such third party may place on the Report We confirm annually to BP whether there 0 182 881 2,753 1,322 assurance (as set out in ISAE3000 Revised) mud (tonnes) is entirely at its own risk. have been any events including the provision on which to base our conclusions. The extent of prohibited services that could impair our 10 Employees of evidence gathering procedures performed independence or objectivity. There were is less than that of a reasonable assurance no such events or services in 2016. Our Number of employees of BP in Azerbaijan11 3,072 3,255 3,393 3,150 3 243 What we did to form our engagement (such as a financial audit) assurance team has been drawn from our Number of professional staff of BP in Azerbaijan11 2,982 3,216 3,381 3,130 3 211 conclusions and therefore a lower level of assurance is global Climate Change and Sustainability provided. Services Practice, which undertakes National11 2,530 2,722 2,907 2,735 2 785 Our assurance engagement has been planned and performed in accordance with engagements similar to this with a number of National (%) 85% 85% 86% 87% 87% the International Federation of Accountants’ Completion of our testing activities has significant UK and international businesses. Expatriate 452 494 4 74 415 426 ISAE3000(Revised)1. involved placing reliance on the BP’s controls for managing and reporting sustainability Ernst & Young LLP, London Senior level Azerbaijani managers 168 197 230 275 314 information, with the degree of reliance The Report has been evaluated against the 25 September 2017 informed by the results of our review of the Social spend following criteria: effectiveness of these controls. Total for BP and co-venturers in Azerbaijan ($ million)12 4.5 2.7 5.9 4.5 1,5

1Unless otherwise stated, performance data relates to BP in Azerbaijan only. 2This includes Azeri-Chirag-Deepwater Gunashli oil, Shah Deniz gas and condensate, associated gas delivered to the State Oil Company of the Republic of Azerbaijan. 3The BP AGT and its co-venturers. 4Hours worked by employees – are identified as hours worked by individuals who have a contract of employment with BP; this definition is consistent with BP’s group definition. 5Hours worked by contractors – are identified as hours worked by contractors under the sphere of our control; this definition is consistent with BP’s group definition. 6Gross numbers represent total of all partners’ participating interest in production sharing agreements (PSA). Net numbers represents BP’s participating interest in PSA. 7Indirect GHG emissions are a consequence of the import by operations of steam, electricity and heat from third-party sources. 8Direct GHG emissions are the physical emissions from operations. 1 9Oil spills are defined as any liquid hydrocarbon release of more than, or equal to, one barrel (159 litres, equivalent to 42 US gallons). International Federation of Accountants’ International Standard for Assurance Engagements 10Starting from 2016 numbers include both permanent and fixed term employees Other Than Audits or Reviews of Historical Financial Information (ISAE3000) Revised. 2 11Includes Azerbaijani employees working on overseas assignments for BP in Azerbaijan Parts A and B of the IESBA Code; and the International Standard on Quality Control 1 (ISQC1) 12This is the cash-out number spent under the BP-operated projects.

32 BP Azerbaijan Sustainability Report 2016 Further information

Apply for a job Raise a concern or request information Visit the Careers section of our website at To express your grievance or concerns, or bp.com/caspian/careers to request information, please contact our There you can learn more about the community liaison officers: technicians’ recruitment programme, the graduate and intern recruitment programmes Garadagh, Absheron, Hajigabul, Agsu, and any experienced professional vacancies at Kurdamir, Ujar BP in Azerbaijan. +994 (0)55 225 0251/225 0245 Agdash, Yevlakh,Goranboy, Samukh Please note: The graduate and intern +994 (0)55 225 0257/225 0254 recruitment campaign usually starts in October Shamkir, Tovuz, Agstafa Find out more online and is announced in the local media. +994 (0)55 250 5831/225 0260 Our bilingual website, Public Information Centres’ numbers: Kurdamir +994 (0)20 255 0594 bp.com/caspian Raise issues or seek guidance Yevlakh +994 (0)22 336 5884 is the main information source about our Shamkir +994 (0)22 305 4658 Caspian region energy projects. The Open Talk is available 24 hours a day, seven days a week. You can raise your concern in your For all security-related grievances and concerns Browse through latest news, project preferred language, via telephone, fax, letter or please call 114. details, environmental and social you may submit a report online. impact assessments, legal agreements governing the projects, earlier BP in Azerbaijan sustainability reports and other Online from: documents. opentalkweb.com Apply for a community programme Azerbaijan: grant +994 (0)12 599 3888 International: Your feedback is important to us +1 704 540 2242 Learn more about grants for community Fax: +1 704 556 0732 programmes at our website bp.com/caspian Letter: BP OpenTalk, 13950 Ballantyne You may also contact us at You can send it online through Corporate Place, PMB 3767, [email protected] bp.com/caspian/contactus Charlotte, You can also telephone NC 28277, +994 (0)12 599 3000 USA.

or write to: Transparency and public reporting BP AGT region BP Xazar Centre, 14 floor, 153 Neftchilar avenue, Baku, AZ1010, Azerbaijan.

Acknowledgements Paper Design Folga Plus LLC This report is printed on recycled paper. The paper has been Printing ZAMA printing house certified independently according to the rules of the Forest Stewardship Council (FSC). Photography Shahin Abasaliyev, Stuart Conway, Ramin Azizli, Chingiz Samedzade © BP p.l.c. 2017