BP in Azerbaijan Sustainability Report 2015 bp.com/caspian/report

Building a stronger, safer BP Overview Overview About our report What’s inside? 2 Introduction 4 BP in Azerbaijan at a glance The regional president reflects on the Our organization at a glance, summary of BP in Azerbaijan Sustainability highlights of our activities in 2015 and our major achievements and challenges in This report covers the calendar year ending Report 2015 covers our business touches upon our future plans. 2015. 31 December 2015. In some instances significant performance, environmental record and wider role in Focus areas events from 2016 have been included. Azerbaijan during 2015. It is our 6 Our operations Our operations 13th sustainability report and We are committed to delivering world-class 23 Environment reflects feedback we received operations and projects and to maintaining a We recognize that managing environmental sustainable presence in the Caspian region. impacts is an essential part of what it means about previous reports. to responsibly produce oil and gas. 13 Our people Unless otherwise specified, the The report is issued annually by Our long-term success in Azerbaijan depends 27 Society on the skills, professionalism, experience and text does not distinguish between BP Exploration (Caspian Sea) Limited Our aim is to make a positive impact on the passion of our people. society, supported by an open dialogue with the activities of BP p.l.c. and those in its capacities as operator and our stakeholders and leading to sustainable of its subsidiaries and affiliates. manager of the joint operating 19 Safety enterprise and community development. Our people References in this report to ‘us’, ‘we’ company for the Azeri-Chirag- We focus on maintaining safe, reliable and and ‘our’ relate to BP in Azerbaijan Deepwater Gunashli field, as manager compliant operations and put safety and unless otherwise stated. When we of The Baku-Tbilisi-Ceyhan Pipeline operational risk management at the heart of cite ‘BP in Azerbaijan’ we refer to Company and by BP Exploration everything we do. operations in Azerbaijan only. If we (Shah Deniz) Limited in its capacities refer to ‘BP AGT’ we are including all as operator of the Shah Deniz field our activities in Azerbaijan, Georgia and as technical operator of The 34 Five-year performance data

and Turkey. Specific references to ‘BP’ South Caucasus Pipeline Company. Safety Our key performance data covering areas and the ‘BP group’ mean BP p.l.c., For this report each of these entities including production, safety, environment and its subsidiaries and affiliates. has provided information relevant to social spend. All dollar amounts are in US dollars its project and statements applicable and if translated from other to its project. currencies reflect the exchange rate at the moment the funds were committed. All gas volumes are

indicated in standard cubic metres Environment or standard cubic feet.

Cautionary statement

BP in Azerbaijan Sustainability Report 2015 may contain forward-looking statements relating,

in particular, to recoverable volumes and resources, capital, operating and other expenditures, and Society future projects. Actual results may differ from such statements depending on a variety of factors including supply and demand developments, pricing and operational issues and political, legal, fiscal, commercial and social circumstances.

BP in Azerbaijan We have reviewed BP in Azerbaijan Sustainability Report 2015 bp.com/caspian/report Front cover imagery Sustainability Report 2015 in order to provide Rahman Rahmanov, Shah Deniz 2 topsides assurance to BP management that the project manager talks to his colleague about the data, statements and assertions made work at Amec-Tekfen-Azfen yard, where the regarding the sustainability performance of two bridge linked platforms are being fabricated. BP in Azerbaijan are supported by evidence Our reporting or explanation. Our scope of work and conclusions can be found on page 35.

Ernst & Young Introduction to the assurance Building a stronger, safer BP process

BP in Azerbaijan Sustainability Report 2015 1 Overview Introduction by our regional president Achievements and challenges Overview

In this section we summarize the main achievements and challenges for BP in Azerbaijan in 2015. Our aim is to maintain a business that is resilient and sustainable in challenging times and continues to 2015 benefit all our stakeholders, including society at large. 13 February Central Azeri platform marked the 10th anniversary of the start of production. Gordon Birrell 14 April The Milli Majlis (Parliament) of Azerbaijan ratified the shallow water Absheron peninsula production sharing agreement.

25 May Baku-Tbilisi-Ceyhan celebrated the 10th It is my great pleasure to introduce the in construction activities across all main The number of Azerbaijani senior level managers anniversary of the pipeline inauguration and annual BP in Azerbaijan Sustainability Report. contracts and more than 80% of them were reached 275, which is almost 20% increase line-fill commencement. This is the 13th year we have produced this Azerbaijani nationals. The project is over 66% from the previous year. publication as part of our long-standing complete and remains on target. commitment to inform wider society about As an official partner of 2015 Baku European 29 June Tanker loading process at Ceyhan Marine terminal jetty. our activities in the country. Safety remains our top priority in whatever Games, we shared the nation’s excitement South Caucasus Pipeline expansion project we do and we continued our good safety and passion for success. We sponsored six started mainline construction in Azerbaijan. BP continued to operate the huge oil and track record in 2015. Our recordable injury Azerbaijani athletes as BP ambassadors; Achievements Enterprise development Together with our co-venturers in Azerbaijan, gas projects in Azerbaijan safely and reliably frequency dropped during the year remaining sponsored the Games Academy to develop Operations and business development we signed new long-term contracts with in 2015 and these projects have significantly low by industry standards. We also managed youth from Azerbaijan and Europe for the 3 September The Shah Deniz Stage 2 project made a very th 131 local companies in 2015, worth about contributed to the country and region’s to decrease our total vehicle accident rate by efficient delivery of major events; and 3000 tanker loaded with BTC oil sailed away good progress in 2015 with a number of $1.09 billion. See page 29. economic growth. Azeri-Chirag-Deepwater 42%. At the same time we had several high supported an elite athlete development and from the Ceyhan marine terminal in Turkey. milestones achieved ahead of schedule. Gunashli (ACG) – the largest oilfield in the potential events – an incident or near miss coaching programme for Azerbaijani athletes. See page 10. Azerbaijan sector of the Caspian – continued which could have resulted in a health, safety, Challenges to produce efficiently, averaging a daily rate of security or environmental major incident – Across all of our achievements, milestones We successfully delivered three turnaround about 634 thousand barrels. during the year. We learned lessons from and challenges, our aim is to maintain a programmes on West Azeri, Chirag and Shah Safety these events and are committed to keeping business that is resilient and sustainable in Deniz. See page 12. Eight high potential incidents were recorded in Working closely with the government our focus on safety. challenging times and continues to benefit all The 2D seismic survey in the SWAP contract 2015. See page 20. of Azerbaijan, the State Oil Company of our stakeholders, including society at large. area was safely completed in December 2015. Azerbaijan and other partners, we continued We have been privileged to operate major oil See page 12. to focus on production performance towards and gas projects on behalf of Azerbaijan and I hope you find this report interesting and Employees maximizing production from ACG. With being a good corporate citizen is an important useful. As always, it is shaped by what we The number of senior level national employees future continual major investments in new part of this activity. We strive to bring tangible hear from our stakeholders. So we welcome of BP in Azerbaijan reached 275, having grown technologies and facilities, we believe this and sustainable benefits to the society and your comments and suggestions. by 20% over the year. See page 14. field can continue to produce as a world-class to communities where we work. Besides reservoir for many years. generating revenue, these benefits include Safety creating jobs and building skills, providing Our recordable injury frequency has dropped Shah Deniz Stage 1 reliably delivered plateau opportunities for local enterprises and Thank you. by 11% and our total vehicle accident rate production throughout 2015, with 9.9 billion supporting local development initiatives. decreased by 42% compared to 2013. See standard cubic metres of gas and about page 20. 18.3 million barrels of condensate produced. Together with our co-venturers in Azerbaijan, Environment Our technical expertise and ongoing we remain committed to supporting the We substantially reduced the amount of flaring maintenance of the facilities has helped development of the local market – through at our facilities, bringing it down to 2%. Shah Deniz provide a consistently secure and enterprise development and training See page 24. reliable supply of gas to the region and in 2015 programmes and by increasing the local we achieved almost 100% plant reliability. content in our projects. In 2015, we signed We achieved a four-fold drop in the amount Gordon Birrell new long-term contracts worth more than of hazardous waste generated from our Regional president As a safe and reliable operator in the Caspian, $1 billion with 131 local companies. We opened our first office in Baku in operations. See page 25. BP Azerbaijan-Georgia-Turkey region we have the unique experience and expertise 1992, and two years later BP signed the 13 June 2016 to deliver large-scale complex projects in this We continued our co-operation with SOCAR in groundbreaking ‘Contract of the Century’ with basin. In 2015 we made good progress on support of our commitment to develop national the government of Azerbaijan. the Shah Deniz Stage 2 and South Caucasus employees involved in BP-operated projects. Read about our history in the Caspian at Pipeline Expansion projects. By the end of By the end of 2015, 88% of mid-level managers bp.com/caspian/history the year, about 20,000 people were involved working for BP in Azerbaijan were nationals.

2 BP in Azerbaijan Sustainability Report 2015 BP in Azerbaijan Sustainability Report 2015 3 Overview BP in Azerbaijan at a glance Western Route Export Pipeline (WREP) Baku-Tbilisi-Ceyhan (BTC) Sangachal terminal Our structure, organization, assets and history 1.2 million South Caucasus Pipeline (SCP) 49.3 million The Caspian region has become one of the major 106 thousand 1.2 million 3.2 million barrels oil and gas producing areas in the world, with the 31.4 million barrels 262.8 million barrels Shah Deniz reserves of Azerbaijan being transported to global 19.8 million markets through Georgia and Turkey. 18.6 million GEORGIA 1 9.9 billion BP in Azerbaijan, Georgia and Turkey ACK SEA In Azerbaijan, BP operates under several BL Local spend in Azerbaijan production sharing agreements and host government agreements (HGAs) signed $1.54 billion Supsa Azeri-Chirag-Deepwater with the government of Azerbaijan. Gunashli (ACG) In Georgia and Turkey, it operates under TURKEY Tbilisi HGAs that cover export pipelines and terminals. 6 A 231 million SE AN NE RA ER DIT Ceyhan Erzurum CASPIAN SEA ME Ceyhan terminal 3,112 tankers AZERBAIJAN 361 tankers

Baku

Legal structure A number of BP legal entities have registered representative offices in Azerbaijan reflecting the evolution Shallow water Absheron of BP’s presence in the country and the region since BP opened its first office in Baku in 1992. The principal legal entity is BP Exploration (Caspian Sea) Limited. 2D seismic

Business structure At the end of 2015, the regional leadership Shafag-Asiman team led by the regional president consisted of 16 vice presidents, the chief procurement 3D seismic officer, the assistant general counsel, the head of planning and commercial operations, and the head of control and financial operations for Azerbaijan, Georgia and Turkey. In Azerbaijan the BTC and SCP pipelines pass through 13 districts: Garadagh, Absheron, Hajigabul, Aghsu, Kurdamir, Ujar, Aghdash, Yevlakh, Goranboy, Samukh, Shamkir, Tovuz, Aghstafa.

Registered address Registered address of the representative office of BP Exploration (Caspian Sea) Limited is 153 Neftchilar avenue, Nasimi district, Baku, AZ1010, Azerbaijan. Telephone: +994 (0)12 599 3000, Fax +994 (0)12 599 3665. $58.4 billion $70.2 million 2.8 billion 67.7 billion 10

Employees At the end of 2015, the number of people permanently employed by BP in Azerbaijan was 3,150 of whom 2,735 were Azerbaijani citizens.

4 BP in Azerbaijan Sustainability Report 2015 BP in Azerbaijan Sustainability Report 2015 5 Our operations 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 links to regional and world markets. Our operations

Production at ACG started in 1997 from the A platform technician is seen behind the Chirag section. It now also includes the equipment on the Deepwater Gunashli platform. Central, West and East Azeri, Deepwater Gunashli and West Chirag sections. At the end of 2015, a total of 91 oil wells were We are committed to delivering world-class producing, and 42 wells were used for gas or water injection. operations and projects and to maintaining a ACG production continued at about the same sustainable presence in the Caspian region. level as in 2014. In 2015 we produced an average of 634 thousand barrels per day (more than 231 million barrels or 31.3 million tonnes in total) from the ACG complex.

We also delivered around 8.9 million cubic metres per day of ACG associated gas to the State Oil Company of the Republic of Azerbaijan (SOCAR) which equates to 3.2 billion cubic metres in total. Production continued at the Azeri-Chirag- Deepwater Gunashli (ACG) oil and Shah Deniz We continued to focus on production gas fields throughout 2015. performance targets and plans, working closely with the government of Azerbaijan, Azeri-Chirag-Deepwater Gunashli SOCAR and other partners towards optimizing ACG production. With future ACG is operated by BP on behalf of the continual major investments in new Azerbaijan International Operating Company. technologies and facilities, the field can It is the largest oilfield in the Azerbaijan continue to produce as a world-class sector of the Caspian basin, located about reservoir for many years. 100km east of Baku. ACG is geologically challenging with a complicated seabed In 2015, we spent approximately $760 million topography including slumps and mud in operating expenditure and $1.9 billion in volcanoes. capital expenditure on ACG activities.

Net share of liquids production by BP subsidiaries around the world 2015 oil gas Azeri-Chirag-Deepwater Gunashli oil production US 379 1528 (mmbbl – million barrels; mmte – million tonnes) Europe 121 266 Azerbaijan 111 219 Platform Start of production Unit of From the start of 2014 2015 Other 451 3483 measurement production till the end of 2015 Chirag November 1997 mmbbl 666.1 22.6 1 7. 3 US Europe mmte 90.0 3.1 2.3 Azerbaijan Central Azeri February 2005 mmbbl 729.2 57.1 56.2 Othera mmte 98.5 7. 7 7. 6 36% West Azeri December 2005 mmbbl 668.1 54.5 40.3 43% mmte 90.4 7. 4 5.4 East Azeri November 2006 mmbbl 378.5 27.1 26.0 mmte 51.1 3.7 3.5 11% Deepwater April 2008 mmbbl 351.0 53.3 51.6 10% BP employees discuss the work on the Gunashli mmte 47.6 7. 2 7. 0 bridge connecting the Deepwater Gunashli West Chirag January 2014 mmbbl 58.2 18.3 39.9 platforms. In total, 971 thousand barrels of crude oil and 88 thousand mmte 7. 9 2.5 5.4 barrels of natural gas liquid per day, excluding equity accounted entities. mmbbl 2851.1 232.8 231.3 aOther includes Canada, South America, Africa, Asia (excluding Total Azerbaijan) and Australia. mmte 385.6 31.5 31.3

6 BP in Azerbaijan Sustainability Report 2015 BP in Azerbaijan Sustainability Report 2015 7 Our operations

Oil production from Azeri-Chirag-Deepwater Gunashli, 2005-2015 Azerbaijan, Georgia and Turkey. The field We spent approximately $482 million in (million barrels) produced 9.9 billion cubic metres of gas and operating expenditure and $4.37 billion in Chirag Cental Azeri West Azeri East Azeri Deepwater Gunashli West Chirag about 18.3 million barrels (2.3 million tonnes) capital expenditure on Shah Deniz in 2015, of condensate in 2015. Shah Deniz’s current the majority of which was associated with 300 production capacity is 29.5 million standard the Shah Deniz Stage 2 project. 42.5 49.5 cubic metres of gas per day, or around 10.8 bcma. 250 17.7 Five SD wells 49.6 46.4 51.4 39.2 18.3 We completed two new production wells in 45.2 50.8 topped the list of 41.4 39.9 Shah Deniz in 2015. And, five SD wells BP-operated production wells 200 45.8 topped the list of BP-operated production 4.0 49.0 53.3 worldwide by gross daily rate 62.5 38.9 51.6 wells worldwide by gross daily rate in barrels 35.0 76.6 98.0 90.6 of oil equivalent. 150 27.1 72.4 26.0 69.7 68.7 54.5 100 81.4 89.1 40.3 Shah Deniz gas and condensate production 71.7 42.8 69.6 74.9 (bcm – billion cubic metres; bcf – billion cubic feet; mmboe – million barrels of oil equivalent, mmbbl - 70.1 58.0 55.4 57.1 million barrels, mmte - million tonnes) 50 56.2 A view of the West Chirag platform from the crew 52.4 51.8 47.1 44.6 38.7 Start of Unit of From the start of 2014 2015 34.0 27.2 27.3 25.4 22.6 transfer vessel. 17.3 production measurement production till the 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 end of 2015 SD gas November 2006 bscm 67.7 9.9 9.9 Shah Deniz 1,000 metres and is 22km long. SD is geologically challenging and highly pressured Bscf 2,390.8 348.1 348.8 The Shah Deniz (SD) gas field was discovered with multiple reservoir horizons. mmboe 412.1 60 60.1 in 1999. It is 70km offshore and lies beneath water depths ranging from 50-600 metres. In 2015 the SD field continued to provide SD condensate November 2006 mmbbl 136.5 18.7 18.3 The field has a reservoir depth of more than reliable deliveries of gas to markets in mmte 1 7. 1 2.3 2.3

Major BP-operated and contracted facilities in the Caspian

Shah Deniz Stage 2 West Chirag IncludesShahDenizBplatform, Shah Deniz Deepwater Gunashli Productionstartedin Dada Gorgud East Azeri subseapipelinesandSangachal Productionstartedin Productionstartedin January2014 Mobiledrillingunit Productionstartedin West Azeri Central Azeri Sangachal terminal terminalexpansion November2006 April2008 Chirag November2006 Heydar Aliyev Productionstartedin Productionstartedin Operationsstartedin 2018 Productionstartedin Mobiledrillingunit Istiglal December2005 February2005 October1997 November1997 Mobiledrillingunit

Net share of natural gas production by BP subsidiaries around the world (%)

US Europe Azerbaijan 28% Othera

63% 5% 4%

In total, 5,495 million cubic feet per day, excluding equity accounted entities. aOther includes Canada, South America, Africa, Asia (excluding Azerbaijan) and Australia.

8 BP in Azerbaijan Sustainability Report 2015 BP in Azerbaijan Sustainability Report 2015 9 Shah Deniz Stage 2 and the Southern Gas Corridor Our operations

BLACK SEA GEORGIA Tbilisi CASPIAN SEACaspian Sofia Sea BULGARIA AZERBAIJAN Baku Rome Ankara ALBANIA TURKEY Tirana ITALY

GREECE

Athens

MEDITERRANEAN ShahDenizfield SEA SouthCaucasusPipelineexpansion(SCPX) TransAnatolianPipeline(TANAP) TransAdriaticPipeline(TAP)

Left: Pipe lowering activity in Hajigabul district Shah Deniz Stage 2 Vessel Khankendi from Singapore through the In 2015, the Sangachal terminal exported over to the end of 2015, BTC has carried a total as part of the South Caucasus Pipeline expansion Volga-Don canal, arriving safely in Baku to join 296 million barrels of oil and condensate. This of about 2.36 billion barrels (315 million tonnes) project. Right: Construction of Shah Deniz Stage Shah Deniz Stage 2 (SD2) is a giant project the bow section, which has now been included about 261.6 million barrels through of crude oil loaded on more than 3,112 tankers 2 platform topsides is well underway. that will bring gas from Azerbaijan to Europe integrated at the Baku Shipyard. Once the Baku-Tbilisi-Ceyhan (BTC) pipeline, about and sent to world markets. and Turkey. This will increase gas supply and completed, this new vessel will be deployed 31.4 million barrels through the Western improve energy security to European markets to the Shah Deniz 2 area for the construction Route Export Pipeline (WREP), 2.2 million BTC’s throughput capacity is currently through the opening of the new Southern of the subsea structures. barrels by rail and about 0.9 million barrels 1.2 million barrels per day. In 2015, it exported Gas Corridor. It is one of the largest gas via a condensate export line. 262.8 million barrels (35 million tonnes) of development projects anywhere in the world. In July 2015, the Istiglal rig was transferred to crude oil loaded on 361 tankers at the Ceyhan the Caspian Shipyard Company for rig Works on the Sangachal terminal expansion terminal in Turkey. In September, BTC The project will annually provide for export of certification and upgrade. The Heydar Aliyev continued in order to provide processing celebrated the loading of the 3000th tanker 16 billion cubic metres of gas from the Shah rig completed drilling operations on two wells facilities for the SD2 project. A new access at Ceyhan. Deniz field through some 3,500 kilometres of and started drilling the lower section of a road was opened, allowing a safer and more pipelines to Georgia, Turkey, Greece, Bulgaria third well in support of the Shah Deniz Stage efficient route for the vehicles bringing The BTC pipeline currently carries mainly ACG and Italy. The project is over 66% complete in 2 pre-drill programme. These two rigs have people, plant and equipment to site. oil and Shah Deniz condensate from terms of engineering, procurement and already drilled nine production wells in All 16 expansion modules of the central Azerbaijan. In addition, crude oil from construction, and remains on target for first preparation for the first gas from Shah Deniz control building were installed and equipment Turkmenistan and Kazakhstan continues to gas from Shah Deniz Stage 2 in 2018. First Stage 2 and consequent production ramp up. installation and structural steelwork be transported via BTC. deliveries to Europe are expected in 2020. Drilling operations will continue in order to fabrication continued ahead of schedule. deliver all wells required to reach the planned By the end of 2015, about 20,000 people plateau level. There are nine fabrication and painting 80% were involved in construction activities shops at four different locations in the Baku across all main contracts and more than 80% Sangachal terminal area contributing to SD2 onshore facilities. of the 20,000 people of them were Azerbaijani nationals. The total More than 15,000 tonnes of steel and involved in construction cost of the SD2 project and expansion of the Oil and gas from Azeri-Chirag-Deepwater 150,000 metres of the piping required are activities were Azerbaijani South Caucasus Pipeline (SCP) is estimated Gunashli (ACG) and Shah Deniz continued to being fabricated onsite at a custom-built nationals around $28 billion. flow via subsea pipelines to the Sangachal piping fabrication shop and offsite at terminal. structural fabrication shops in the area. The SD2 project includes two new bridge- linked production platforms and 26 subsea The daily capacity of the terminal’s All the steel and pipe required for the wells, 500km of subsea pipelines built at up processing systems is currently 1.2 million Sangachal expansion have been fabricated to 550m of water depth and expansion of the barrels of oil and about 29.5 million standard Made in Azerbaijan by local yards. And, the project has had Sangachal terminal. cubic metres of Shah Deniz gas. Overall a significant impact on local jobs with all the steel and pipe required processing and export capacity for gas, for the Sangachal terminal a 1,200 strong fabrication workforce directly Widespread activities were ongoing at all including ACG associated gas is about expansion have been employed by BP on the fabrication portion Azerbaijan’s offshore and onshore sites/ 49.3 million standard cubic metres per day. fabricated locally of the onshore project and a further fabrication yards including the Sangachal 340 indirectly employed. terminal, ATA (AMEC/Tekfen/Azfen) yard near Gas is exported via the SCP and via a SOCAR Baku, Baku Deepwater Jackets Factory and gas pipeline connecting the terminal’s gas Baku-Tbilisi-Ceyhan pipeline along the pipeline route. A major milestone processing facilities and Azerigas’s national was achieved with the shipment of the two grid system. The 1,768 km BTC pipeline became hull sections of the Subsea Construction operational in June 2006. Since that time up

10 BP in Azerbaijan Sustainability Report 2015 BP in Azerbaijan Sustainability Report 2015 11 Our people

South Caucasus Pipeline Exploration Shah Deniz Stage 1 The 691km pipeline has been operational BP has an exploration contract in place with Shah Deniz – BP’s biggest discovery since since late 2006, transporting Shah Deniz gas SOCAR to jointly explore for and develop Prudhoe Bay in Alaska in 1968. to Azerbaijan, Georgia and Turkey. During potential prospects in the shallow water area Our long-term success in Azerbaijan 2015, its daily average throughput was about around the Absheron Peninsula (SWAP). The Developing Shah Deniz Stage 1 involved 18.6 million cubic metres of gas per day. contract area is located to the south of the depends on the skills, professionalism, drilling some of BP’s most difficult wells peninsula in the water depths up to – at depths of around 6,000 metres below We spent about $47.5 million in operating 40 metres. Its potential reservoir depth experience and passion of our people. sea level and under high pressures. And expenditure and about $1.1 billion in capital is 3,000-5,000 metres. in only seven years, we also drilled the expenditure on SCP in 2015. deepest exploration well in the Caspian In 2015, the parliament of the Republic of to date, built the platform and onshore SCP expansion project Azerbaijan ratified the SWAP production terminal and laid the 700km South sharing agreement enabling BP to bring its Caucasus pipeline through Azerbaijan and In 2015, SCP expansion (SCPX) activities experience and advanced technology Georgia to the Turkish border. continued along the pipeline route across solutions from shallow water areas around Our technical expertise and ongoing Azerbaijan and Georgia. We began the the world to the Caspian. The 2D seismic maintenance of the facilities have helped mainline construction in Azerbaijan in June, a survey in the SWAP contract area was safely Shah Deniz provide a consistently major undertaking involving welding completed in December 2015 and we have secure and reliable supply of gas to the approximately 71km of pipe by the end of begun planning for a 3D seismic acquisition region and in 2015 we achieved almost 2015. Trenching, lowering, laying and programme for the contract area. 100% plant reliability. This has helped to backfilling activities began at the end of increase production from the existing November and are progressing. In addition, BP completed the interpretation facilities. Shah Deniz Stage 1 has reliably More than 60% of the pipe needed for the of the seismic dataset for the Shafag-Asiman delivered plateau production throughout Azerbaijan section was already in storage block which lies some 125km (78 miles) 2015, with 9.9 billion standard cubic metres at Mugan, Kurdamir, Yevlakh, and Qazanchi south-east of Baku. This represents of gas and about 18.3 million barrels of pipe yards by the end of the year. We have 18 months of work and will be followed by condensate produced. acquired nearly all of the land needed for the another year of planning for the first right of way in Azerbaijan. exploration well. The Shafag-Asiman is located in deepwater section of about Western Route Export Pipeline 650-800 metres and has a reservoir depth of around 7,000 metres. BP, as operator of Azerbaijan International Operating Company, also operates the Western Route Export Pipeline (WREP). The 829km pipeline moves oil from the Caspian basin via the Sangachal terminal to Supsa on Georgia’s Black Sea coast. Since 1997, the WREP has undergone extensive refurbishment by BP and its co-venturers. During the year, it transported 31.4 million barrels of oil. Turnaround activity

Turnarounds are planned periods when operating assets are taken out of service to complete essential maintenance, inspections or project work that cannot be performed while the asset is online. As part of the annual work programme, we successfully completed turnarounds on the West Azeri platform in May, on the Shah Deniz platform and the Shah Deniz facility inside the Sangachal terminal in August, and on the We invest in training young people who have little Chirag platform in December. These planned or no prior work experience, attract new talent breaks are essential for safe and reliable and offer varied development and career operations over the long term. opportunities to employees throughout their careers.

12 BP in Azerbaijan Sustainability Report 2015 BP in Azerbaijan Sustainability Report 2015 13 Managing our workforce

Our aim is to develop the capabilities of our workforce with a focus on the skills required to maintain safe and reliable operations.

legal reasons, the temporary agency Five-year nationalization plan Expatriate workforce Our employees discuss work in the Sangachal workforce that we recruit as needed to meet The pursuit of high standards – terminal process area. operational requirements were mostly Aynur Alizade A five year nationalization plan was signed in While we are committed to staff transferred to fixed-term BP contracts in November 2013 between BP in Azerbaijan and nationalization, we also believe that 2014, and all BP employees – whether A varied career has helped Aynur Alizade, SOCAR. It outlines nationalization targets both on international assignments to and from fixed-term or permanent – now come within regional performance manager for BP’s total and functional levels on a yearly basis from Azerbaijan are important for development. scope. global operations organization, to become 2014 to 2018. It also includes the individual In 2015 almost 80 of our national employees one of the most senior women in BP current and future expatriate roles nationalization worked at BP locations outside Azerbaijan, By the end of 2015, the percentage of timelines with the planned numbers of national more than 30% of them specializing in wells. Azerbaijan. Our people national citizens among professional staff successors. of BP in Azerbaijan was 84%, compared to As a member of the regional operations At the end of 2015 we had 415 expatriates 82% a year ago. If we consider only leadership team, Aynur is the key person to In September 2014 BP in Azerbaijan signed a working for BP in Azerbaijan. More than permanent employees, this number would monitor, illuminate and follow-through on memorandum of understanding with SOCAR on 60% of them were from Europe and slightly be 87%, also a slight increase on 2014. performance of operations. “My objective is cooperation in the area of recruitment. As part of less than 30% from the US. The remainder to systematically improve performance and the nationalization strategy, BP specialists were from Australia, Canada, Colombia, Egypt, The number of national senior level managers the quality of work and to reduce risk in our delivered more than 20 out-of-curriculum India, Indonesia, Oman and Trinidad & Tobago. operations. To do this we need to implement Permanent professional staff of BP in Azerbaijan at BP in Azerbaijan reached 275 in 2015. This sessions and provided other educational support 44 new expatriates arrived to take up BP posts represents 48% of the total senior managers standardized performance management to the Baku Higher Oil School students. during the year, while 103 expatriates left. This chart also shows the percentage of national working in the local office – an almost 20% systems, processes and tools across all citizens BP’s performance depends on having increase compared to the previous year. teams and departments,” says Aynur. BP in Azerbaijan continues supporting its National a highly-skilled, motivated and talented Of these, about 21% were female and mostly Aynur is also expected to contribute to contractors in development and delivery of their Expatriate workforce. We are committed to respecting working in finance and human resources. plant and export efficiency by overseeing nationalization plans. This includes sharing individual differences and giving all our During 2015, a further 30 a Azerbaijani expertise, assistance in preparation of 4,000 performance management of BP’s offshore 86% employees equal access to opportunities. employees were on assignments in senior and onshore assets in Azerbaijan, including performance indicators and monitoring the 3,500 85% positions in other countries. implementation as part of their performance 85% 87% platforms, rigs, onshore oil and gas terminal In 2015, taking into account tough market reviews. 3,000 86% and export pipelines. “We need to work 87% conditions, we made efforts to improve our 88% of mid-level managers (454 out of 516) towards our production targets without 2,500 competitiveness and searched for working for BP in Azerbaijan were nationals. compromising safety and reliability.” 2,907 2,000 2,530 2,722 2,705 opportunities to remove unnecessary Additionally, 29 nationals were on mid-level Azerbaijan recruitment statistics 2,272 1,500 2,067 organizational complexity. We reviewed assignments abroad during 2015. The numbers in the table reflect people recently joining the company our structure to align it with BP’s goal of 1,000 becoming a more focused company and Ad hoc recruitment Graduate recruitment Total 500 as a result some national and expatriate 312 380 452 494 474 415 2014 2015 2014 2015 2014 2015 employees were made redundant during the 2010 2011 2012 2013 2014 2015 Female Male Female Male Female Male Female Male course of the year. BP’s overall headcount in Azerbaijan decreased by 260 over the year Business support 4 1 1 5 1 to 3,485 employees by the end of the year. Communications 2 2 0 This includes 3,120 permanent employees, and external affairs of which 2,705 were nationals. A further Compliance and ethics 1 1 2 0 30 nationals were on overseas assignments. Engineering 3 2 2 7 5 12 7 BP employees and agency staff based in Developing a national workforce Finance 1 0 1 Health, safety, security and Azerbaijan 7 1 1 9 0 Building a strong national workforce in environment Permanent Male Female Azerbaijan remains one of our key priorities Human resources 5 2 1 2 9 1 Fixed-term Male Female and we have a five-year nationalization plan Information technologies Male Female 0 0 to increase the proportion of national staff in and services 4,500 137 our business with an ultimate target of Operations 2 11 2 17 13 19 4,000 76 reaching 90% by the end of 2018. We invest 276 54 Procurement and supply 132 731 12 in training young people who have little or no 1 3 4 0 3,500 54 311 chain management 110 prior work experience, attract new talent and 673 576 3,000 562 531 Projects 2 8 5 2 10 7 86 521 offer varied development and career 434 537 Subsurface 3 1 1 2 3 1 2 8 5 2,500 475 opportunities to employees throughout their 450 careers. Tax 1 1 1 2 1 2,000 Wells 1 4 2 2 5 1 12 3 1,500 2,693 2,817 2,619 In previous years we have focused our 2,470 Total graduates 10 19 1 10 29 11 2,020 2,226 nationalization efforts on BP’s permanent 1,000 Total PREP graduates 4 41 2 13 45 15 employees in Azerbaijan. However our aThis number should not be confused with the 30 employees 500 agreements with SOCAR and nationalization on overseas assignments cited in the 2nd paragraph. There was Total ad hoc 16 43 4 30 59 34 a total of 30 employees still on assignment as of 31 December, 2010 2011 2012 2013 2014 2015 commitments now include both permanent and almost 80 who were on assignment during the year, of Technicians recruitment 1 112 54 113 54 and fixed-term professional employees. For which 30 were senior level.

14 BP in Azerbaijan Sustainability Report 2015 BP in Azerbaijan Sustainability Report 2015 15 Recruitment First organized in 2008, we have held 20 fora to date involving around 600 participants in BP aims to create and sustain a positive work total. We held two in 2015, attended by environment, where employees treat each around 60 BP technicians. other with respect and dignity, and are able to unlock their full potential. We are Listening lunches committed to meritocratic recruitment and promotion processes. Listening lunches bring together members of our regional leadership team with employees Our people We regularly monitor and review our from a mix of disciplines for a discussion of recruitment processes to check they are business-related subjects. Through the transparent and efficient. In addition a lunches, employees get an opportunity to UK-based independent agency regularly share their concerns, ask questions and get conducts a global survey testing the quality answers first-hand, while the leadership of our recruitment practices. BP in Azerbaijan hears opinions from various layers of the has received higher than average scores in organization. Three listening lunches were almost all areas covered compared to other held in 2015 with more than 60 employees BP businesses across the globe. taking part.

A student talks to a BP employee at our stand We received about 3,200 applications to our Loan support programme Left: BP employee conducts training for new Learning and development TTE-Petrofac. during the Oil and Gas show in 2015. annual graduate and intern recruitment technicians at Caspian Technical Training Centre. programme in 2015. In the end, we hired All Azerbaijani national employees who have Right: We look for opportunities to reinforce our We provide a range of safety, technical and We recruited 11 graduates as challengers in 28 summer interns and 38 new graduates. worked in the company for three years or culture of speaking up. managerial training programmes for our staff. 2015 and transitioned a further 12 across Of these, we recruited 23 graduates to our more are eligible for this benefit. The More than 2,000 training sessions have been from the petro-technical resource entry Challenge programme as permanent programme contributes towards defined bank held in 2015, with more than 23,000 programme, making a total of 23. By the end BP employees and the remaining 15 received loan commitments relating to the purchase or attendees, 82% of which were held in of the year, we had 155 challengers working places on our petro-technical learning repair of houses or apartments, house Azerbaijani. in Azerbaijan. programme (PREP). For more information construction, and the education of about Challenge and PREP programmes see employees’ children under 18 years old. Continuing professional education Caspian Technician Training Centre page 17. More than 300 employees successfully applied We provide financial assistance to help our The Caspian Technician Training Centre – We ran a technicians recruitment campaign for loans through the programme in 2015, national employees attain additional degrees set up by BP and its co-venturers in the and recruited 54 Azerbaijani technicians as a bringing the total number of recipients to more or certificates in their areas of expertise. Caspian – works to support the shared goal result. Before being deployed to offshore or than 2,400 since the programme began in 2012. We supported a total of 58 employees of promoting nationalization of the workforce onshore sites newly recruited technicians Since that time BP has contributed to loans through this programme in 2015. Of these, in Azerbaijan, Georgia and Turkey. In addition, enroll on an intensive 12-month English totaling more than $36.8 million. 15 undertook postgraduate degree it acts as a regional centre of technical language and technical training programme programmes at British educational institutes excellence for BP, with our operations in at the Caspian Technician Training Centre. Other activities and a further 43 were able to take advantage Oman and Iraq also using its services. Since of other postgraduate learning opportunities. 2004 about 1,150 technicians have graduated All ad-hoc vacancies at BP in Azerbaijan are Employees who work for BP in Azerbaijan for from its foundation programme. In 2015 55 advertised on bp.com/caspian. In 2015, we 10, 15 or 20 years receive long-service Challenge and petro-technical resource technicians were deployed to BP assets after received more than 10,000 applications for awards to mark these anniversaries. The entry programmes graduation. these roles and hired 17 national employees awards are presented by senior management with specific skills required for the roles. at town hall events. Since 2008, more than Our global ‘challenge’ programme has been Other programmes 1500 employees have been recognized in this running within BP in Azerbaijan since 2003. Employee communication way. It is intended to develop talented graduates We continued to offer language training and engagement with little previous industry experience that courses to our staff and their eligible family We held five town hall meetings in Baku in are selected through our annual graduate members. By the end of 2015, there were Technicians’ forum 2015, to discuss topical issues. We also use recruitment programme. During the three- 235 learners taking English lessons and our regional intranet and internal magazine year programme ‘challengers’ typically fulfil almost 80 studying Azerbaijani. In addition, The BP technicians’ forum continues to be an Compass to disseminate information. We two or three distinct roles. expatriates are offered talks on Azerbaijani important means of communication between published four issues of the magazine in 2015 history, culture and traditions. senior management and our frontline staff – in Azerbaijani and English and distributed We launched a petro-technical resource entry Higher scores the technicians who work on production them to employees across BP’s Azerbaijan, programme in 2012 to develop selected In a global evaluation survey platforms, in terminals and along pipelines. Georgia and Turkey businesses. graduates who did not qualify for the we have received higher We invest in the training and development of challenge programme. The 11-month training scores in almost all recruitment technicians, and we realize the importance of programme is designed to help these practices compared to other regular meetings between this group of graduates deepen their technical knowledge, BP businesses across the employees and top management, where they business awareness, communication and globe. can provide feedback, share experiences and English skills. The programme is delivered in raise any concerns. collaboration with Heriot-Watt University and

16 BP in Azerbaijan Sustainability Report 2015 BP in Azerbaijan Sustainability Report 2015 17 Our code of conduct Safety We define our commitment to high ethical standards in our code of conduct.

Our code of conduct is based on our values and To maintain employee awareness of ethics and Issues raised via OpenTalk are reported for clarifies the principles and expectations for how compliance issues, we launched a quarterly assessment and further action, as appropriate. we work at BP. It covers operating safely, newsletter containing statistics and case studies responsibly and reliably; respecting and valuing illustrating both misconduct and positive We look for opportunities to reinforce our culture our people; how we work with our partners and behaviours. of speaking up. For example, we identified that We focus on maintaining safe, suppliers; protecting BP’s assets; and working the number of concerns raised by our employees with governments and communities. We expect and encourage our contractors and in Azerbaijan, Georgia and Turkey was lower than reliable and compliant operations their employees to act in a way that is consistent expected. Following a survey, we discovered that Ethics and compliance training with our code. We seek to clearly communicate employees were not aware of the channels and put safety and operational risk our expectations to our business partners, agree available to raise concerns or were reluctant to We conduct ethics and compliance workshops contractual obligations where appropriate and use them. management at the heart for employees, contractors and suppliers. Around take the appropriate measures where we believe 2,400 people across Azerbaijan, Georgia and they have not met our expectations or their To address this we delivered more than of everything we do. Turkey participated in some 136 face-to-face contractual obligations. 100 training sessions to employees, contractors training sessions in 2015 and a further 3,700 and suppliers. The sessions reinforced the BP employees completed e-learning modules. In 2015 we continued to focus on raising our importance of ethical behaviour, explained how business partners’ awareness about what we to raise concerns and outlined our policy of zero Training sessions stressed the importance of expect of them and the consequences of tolerance towards retaliation. Since the speaking up and BP’s policy of zero tolerance unethical behaviour. We conducted ethics and awareness programme began in 2013, the towards retaliation against those who have compliance training sessions for senior managers number of concerns raised in the region spoken up in good faith. Our goal is to create an of more than 50 supplier companies. increased from 37 to 58 in 2015. environment where employees and contractors feel comfortable and safe raising concerns about Speak up culture and disciplinary action In Azerbaijan, Georgia and Turkey, investigations unethical, unsafe or potentially harmful behaviour. of misconduct resulted in 42 instances of We encourage employees, contractors and other disciplinary action during 2015, including written third parties to speak up if they are concerned warnings and dismissals of BP employees. We that our code of conduct is not being followed, plan to implement trainings for team leaders and Our values and behaviours or simply feel unsure about any situation. continue raising awareness on our code of Employees who become aware of a breach or conduct expectations. We have five values that express our shared potential breach of our code or legal understanding of what we believe, how we requirements must report it straightaway. aim to behave and what we aspire to be as an organization: OpenTalk, BP’s global helpline, is a confidential way in which both employees and third parties Safety can raise concerns. It is administered by an independent company, is available every day of Respect the week at any time, day or night, and can accommodate calls in more than 75 languages. Excellence Courage Disciplinary cases in Azerbaijan (By code of conduct chapter) One Team Operating safely, responsibly and reliably Our people Our assets and financial integrity Our values and behaviours are the foundation The governments and communities we work with of our code. They define how each of us must act to ensure that BP sustains its reputation 35 and continues to earn the trust that allows 30 us to prosper as a company. At its heart is 30 the message that BP trusts its employees 50 to make the right decisions and speak up senior managers of supplier 25 20 when they have questions or concerns. Our companies have received 19 20 goal is to ensure that they translate into BP ethics and compliance responsible behaviour in the work we do training 15 Workers in special protective every day. The values define what we expect equipment perform drilling from our employees and are reinforced by our 10 operation at the Shah Deniz remuneration structure, which connects how platform. individuals are rewarded with how we work at 5 2 6 6 a group, team and individual level. 1 2014 2015

18 BP in Azerbaijan Sustainability Report 2015 BP in Azerbaijan Sustainability Report 2015 19 Managing safety

Safety is our top priority, driven by our leadership and applied through our operating management system.

Creating a safe and healthy working Safety performance Health and personal safety At the end of 2015, we successfully completed Safety training for local companies environment is essential for our success. 75% of actions, which resulted from the 2014 We are committed to keeping people safe, Improving operational safety In 2015, our recordable injury frequency operating management system (OMS) group BP organized a safety training session for whether they are working at our sites or living dropped to 0.08 (2014 0.09). audit of our wells organization, with zero more than 20 local companies participating in communities near to our operations. In total, there were eight high potential deferrals and overdues. in the enterprise development and training incidents in 2015, meaning incidents or near We carry out various occupational health and programme sponsored by BP and its Operating management system misses which could have resulted in a health, first aid capability, welfare, vaccination and Integrity management co-venturers. safety, security or environmental major promotion activities in our operations onshore Our operating management system (OMS) is incident. Five of these took place in offshore and offshore. We established an occupational We conducted a number of inspections of our The class outlined BP’s health, safety and a group-wide framework designed to help us locations. All incidents were investigated and health unit for BP personnel at Ganja MediClub facilities in 2015. environment expectations and was well manage risks in our operating activities and lessons learned reported and shared. Clinic in 2015. The clinic carries out fitness for attended by top- and mid-level managers drive performance improvements. task assessments and screenings for We conducted almost 1300 equipment and and health, safety and environment There was a decrease in the number of employees in the western regions of Azerbaijan piping pressure system inspections for the representatives from engineering, OMS brings together BP requirements on losses of primary containment, with six meaning they no longer need to travel to Baku Sangachal terminal and export operations. transportation, construction, drilling, health, safety, security, the environment, incidents in 2015 (2014 8). for these assessments. We finished more than 200 structural/civil fabrication, IT and other businesses. The social responsibility and operational reliability, inspections of structures, supports and participants gave very positive feedback and as well as related issues, such as BP’s investigation into the Deepwater Driving safety concrete foundations. In addition, we several said they aimed to incorporate the maintenance, contractor relations and Horizon accident, the Bly Report, made completed more than 180 pipeline inspections acquired knowledge within their company organizational learning, into a common 26 recommendations aimed at further In 2015, our driving activity increased by 13%, across Azerbaijan and Georgia. During the year

processes to improve their capability. management system. It sets out the rules reducing risk across our global drilling We worked to strengthen our contractors’ with more than 27 million kilometres driven we finalized corrosion protection surveys and Safety and principles that govern key risk activities. We have completed all compliance with safety standards. (58 million including kilometres driven by upgrades for midstream facilities. We have management activities such as inspection, 26 recommendations. In doing so, we have contractors) during the year. Our total vehicle spent 70,000 man-hours yearly in the testing, competency development and acted to enhance blowout-preventer accident rate decreased by 42%. production chemistry area to assure fluid flow, business continuity and crisis response reliability, well control, well integrity and integrity of plant and infrastructure, and quality planning. cementing, verification and risk management, We worked to strengthen our audit of sites’ of export products. drilling capability and training. and contractors’ compliance with driving safety We review and amend our group standards as well as day-to-day monitoring. By the end of 2015, more than 20 internal requirements within OMS from time to time The programme has involved significant work inspections of major hydrocarbon vessels on to reflect BP’s priorities and experience or both within BP and with our service Day away from work case frequency Audit and verification Azeri and Chirag Platforms were performed on changing external regulations. Any variations providers and contractors: developing new (per 200,000 hours worked) our offshore facilities. We executed our in the application of OMS – in order to meet standards and enhancing existing standards, Group audit and verification helps us prioritize corrosion management and fabric maintenance Day away from work case frequency local regulations or circumstances – are carrying out hundreds of audits, site visits a b the safety and reliability of our operations to programmes on all seven platforms as planned. API benchmark OGP benchmark subject to a governance process. to our drilling locations around the world, protect the welfare of our workforce, the In addition, we performed inspections on and training over 3,000 individuals during 0.14 environment and local communities. different Azeri and Chirag structures by using a OMS also helps us improve the quality of our more than 130 workshop sessions. 0.12 remotely operated underwater vehicle. operating activities. All businesses covered 0.10 BP’s operations in Azerbaijan were audited by OMS undertake an annual performance 0.08 twice by BP group in 2015. The scope of these improvement cycle and assess alignment 0.06 audits included risk management activities for with the applicable requirements of the OMS 0.04 0.03 0.03 0.03 the onshore pipeline operations and marine 0.01 0.01 framework. 0.02 0.00 operations in Azerbaijan and Georgia. Fourteen actions resulted from the marine operations 2010 2011 2012 2013 2014 2015 audit and eighteen actions from pipeline validation audit. We are working to close these actions.

Recordable injury frequency Safety performance of BP in Azerbaijana BP group also conducted rig audits on Central (per 200,000 hours worked) Azeri, East Azeri and Shah Deniz platforms and 2014 2015 Heydar Aliyev and Dada Gorgud drilling rigs. Fatalities 0 0 Recordable injury frequency There were 201 actions from these audits and Day away from work case frequencyb 0.00 0.01 API benchmark OGP benchmark c 117 of them were closed during 2015. Recordable injury frequency 0.09 0.08 0.70 d Total vehicle accident rate 0.83 0.48 0.60 By the end of 2015, we had also successfully Kilometres driven (millions) 24.24 27.32 0.50 completed 82% of actions which resulted from Hours worked (millions) 32.18 43.64 0.40 a group audit in 2014 of our operations 0.30 0.24 0.27 0.21 organization. There are also three outstanding 0.20 0.17 a This table includes BP staff and contractors. BP’s injury and illness definitions are the US Occupational Health and Safety 0.09 actions from 757 raised during previous safety 0.08 Administration definitions and their subsequent interpretation. Data does not include project-only data. 0.10 and operational risk audits. These will be closed The frequency indicators are calculated per 200,000 labour hours worked. 2010 2011 2012 2013 2014 2015 during 2016-2020. b A day away from work case is a work-related injury that causes the injured person to be away from work for at least one normal A crane operator performs loading job at the shift after the shift on which the injury occurred. West Azeri platform. c Recordable injury is the number of all reported work-related injuries above first aid. a The American Petroleum Institute d Total vehicle accident rate is the number of reported road accidents per million vehicle kilometres travelled. b The International Association of Oil & Gas Producers

20 BP in Azerbaijan Sustainability Report 2015 BP in Azerbaijan Sustainability Report 2015 21 Environment

Security and crisis management We have completed an 18 month programme to enhance BP’s oil spill preparedness and We have processes in place to try to anticipate response capability in Azerbaijan. As part of potential threats to our business and to be this programme, we have acquired a ready if a crisis or incident occurs. substantial amount of new equipment to We recognize that managing environmental increase Azerbaijan’s in ‘in-situ’ supply of fire BP monitors for, and aims to guard against, booms, dispersant spray systems, temporary impacts is an essential part of what it hostile actions that could cause harm to our on-water oil storage, boats and people or disrupt our operations, including decontamination units and shelters, as well as means to responsibly produce oil and gas. physical and digital threats and vulnerabilities. ancillary equipment such as trucks and External perimeter protection of BP-operated all-terrain vehicles which would assist in areas in Azerbaijan, both onshore and moving equipment safely and quickly. By our offshore, is provided by the state security assessment, the purchased equipment agencies. represents the most effective currently available for offshore and onshore mechanical In 2015 we maintained continuous cooperation recovery and containment of oil. with the state and private security contractors, which was the crucial part of the assurance The completion of this programme brings BP over security and integrity of our operations in Azerbaijan into conformance with BP group’s A group of workers receive emergency response and assets. We organized and hosted the updated oil spill preparedness and response training on board a vessel. Export Pipelines Security Commissions Annual procedures which requires BP businesses to Forum with the Export Pipelines Protection have sufficient capability to respond to a Department (EPPD), our state partner in worst-case oil spill scenario. protection of operations. The forum also involved representatives from government Working with the government ministries and executive authorities from the regions crossed by export pipelines. The aim We have further strengthened our cooperation was to discuss current security and safety with the Ministry of Emergency Situations issues of the assets protection, community during the course of 2015. Representatives relations, and Shah Deniz 2 project expansion from the ministry participated in BP oil spill security considerations, as well as, share best drills – both desktop and in the field – and experiences among security and community BP participated in major emergency response stakeholders. exercise organized by the ministry. In addition, BP participated in an oil spill preparedness and BP supported EPPD with purchasing the response conference hosted by the Ministry of second special “KAMAZ” mobile post- Emergency Situations to commemorate the patrolling vehicle. It was re-designed and 10 year anniversary of its establishment. upgraded for challenging weather conditions and off-road areas. In total, these two vehicles have served for 37 days with 888 duty-hours at different points along the pipelines in 2015.

Crisis management and emergency response

Our crisis and continuity management planning helps to keep our people safe, respond effectively to emergencies and avoid potentially severe disruptions in our operations. BP across Azerbaijan, Georgia and Turkey identifies potential risks on an annual basis and carries out regular exercises to test how prepared our teams are to respond. In 2015 we carried out more than 400 drills and exercises to test our assets’ readiness to respond to an incident. We run a programme for ambient monitoring around the offshore and onshore facilities that are We shared our Offshore Oil Spill Contingency operated by BP in Azerbaijan. We have completed Plan with the Ministry of Environment and 191 monitoring studies since the programme Natural Resources and it was accepted by the began in 2004. Ministry of Emergency Situations in 2015.

22 BP in Azerbaijan Sustainability Report 2015 BP in Azerbaijan Sustainability Report 2015 23 Environmental performance Waste management

BP works to avoid, minimize and mitigate environmental impacts We adopt a life cycle approach to waste management, with a goal wherever we do business. of avoiding, reducing and reusing the waste that is created by our operations.

Excellence Award in flaring reduction The year was marked by the 15th anniversary of are Central Azeri platform (22%), ACG part of BP Azerbaijan generated nearly 100,000 tonnes for drill cuttings with synthetic-based mud (SBM) ISO 14001 certification of BP operations in Sangachal terminal (21%) and Deepwater of hazardous and non-hazardous waste in 2015. from the Chirag platform and with water-based Azerbaijan. The regular surveillance audits Gunashli platform (19%). The four-fold drop in the volume of hazardous mud (WBM) from all other platforms and mobile BP Azerbaijan and SOCAR received a Global covered Central Azeri platform, WREP pipeline, waste results from the suspension of onshore drilling rigs. Gas Flaring Reduction Partnership (GGFR) SPS Central Waste Accumulation Area and In 2015 we achieved a substantial reduction in produced water disposal by one of our Excellence Award in 2015 for the ACG gas Serenja Hazardous Waste Management Facility. the amount of flaring at our facilities from 413 kt contractors and our significant reduction in drilling Sewage flaring reduction project. In 2015 cooperation In October, our operations were successfully in 2014 to 204 kt in 2015. The main factor fluids waste. between BP Azerbaijan and SOCAR resulted re-certified to ISO 14001 standard as a result of contributing to the decrease was the completion We achieved a significant reduction in the number in a reduction of the volume of gas flared the three-yearly re-certification audit, which of the West Chirag platform commissioning. Our waste recycling and reuse rate reached 54% of sewage treatment plant outages causing from 4% to 2%. Activities contributing to covered Shah Deniz and Deepwater Gunashli for both hazardous (44,031 tonnes) and releases of untreated sewage offshore. We had this reduction included more efficient use of platforms, Advanced Fluids Facility, Sangachal We observed year on year decrease in nitrogen non-hazardous wastes (10,036 tonnes) in 2015. four such outages in 2015 compared with 12 in energy resources and improving consumers’ terminal Central Waste Accumulation Area and oxides and sulphur oxides emissions – by 1.9% Paper, wood, plastics, metals and oily water are 2014, resulting in a substantial decrease in the access to energy. Seawater Treatment Plant, as well as BP and 3.1% respectively. our main recycled waste streams. We processed volume of untreated sewage to 16 m3 (204 m3 management of drilling using semi-submersible 48,553 tonnes of drill cuttings at BP’s Serenja in 2014). rigs. Oil spills hazardous waste management facility. As a result, 8,818 tonnes of base oil were recovered, of We regularly monitor and analyse the Emissions to the air We are working to continuously improve how which 3,705 tonnes were re-used for mud performance of sewage treatment and the we control, contain and clean up oil spills should preparation, 984 tonnes were re-used as fuel by quality of discharged water. Results for faecal Our greenhouse gas (GHG) emissions arise from they occur. Though our priority is to prevent oil the treatment units and 1,738 tonnes were coliforms occasionally exceeded the limits at the burning of fuels in internal combustion engines, spills, they can still happen. We take steps to injected into the oil export pipelines. most of the offshore platforms. Total Employees monitor the work process in a control heaters and flaring of unrecoverable gas. improve our ability to respond to spills, including suspended solids and biological oxygen room of Advanced Fluids Facility in SPS area. through simulation exercises, using technology In addition, we continued our efforts to remove demand parameters at the Shah Deniz platform We manage our emissions through energy to enhance our response capability and updating hazardous waste from the Serenja hazardous were out outside specified limits. We increased efficiency, reductions in flaring and the design of our oil spill response plans. waste management facility that has accumulated the frequency of the monitoring and continue production of hydrocarbons. These waters are new projects. over many years. During the year, we disposed of to analyse the causes. re-injected back into the oil reservoir or disposed We saw a further decrease in the number of oil more than 100,000 tonnes offsite using newly of through other permitted means. In 2015 we emitted about 3.4 million tonnes of spills in 2015. We had two cases, both at Central approved disposal routes. At the Sangachal terminal, our monitoring of gross GHG, which is 16% lower than in 2014. Azeri platform – a spill of 250 litres of oil and treated sewage showed we did not achieve full Produced water volumes at the ACG field The main reason for this decrease was reduced water to the platform deck, of which only 10 Drill cuttings compliance between January-May or in continue to rise, with the majority of it

flaring at Chirag-1 and West Chirag platforms. litres reached the open environment; and 795 November. These issues have since been exported to shore. Produced water discharges Environment The largest contributors to our GHG emissions litres of oil-based mud released to sea. Management of drilled cuttings saw big changes resolved. Along the export pipelines, an issue to the sea during the year decreased by 72% in 2015. We more than doubled the injection of with elevated faecal coliforms parameters at the to 22,506 tonnes. This has been achieved due cuttings into re-injection wells at the ACG field reed beds continued in 2015. We continue to to fixing some leaking valves. Net GHG emissions Gross non-GHG emissions reaching over 20,000 tonnes. assess water quality in these areas. After treatment and separation at Sangachal Operationalnetgreenhousegas(GHG)emissions (tonnes) (thousandtonnes) Oxides of Sulphur (SOx) Shipments of cuttings from sea to shore grew by Produced water terminal, about 4,800,800 tonnes of produced NormalisedoperationalGHGemissions Oxides of Nitrogen (NOx) 72% to 53,875 tonnes; these were brought to the water was exported by pipeline back offshore for (tonnesperthousandbarrelsofoilequivalent) 11,179 Gross flaring by asset 10,966 Serenja hazardous waste management facility. Our operations manage significant volumes of re-injection. In total, 5,539,006 tonnes or 99.6% 800 (thousand tonnes) 770,8 wastewater, created, for example, as a result of of the ACG produced water was re-injected. 155 705.9 699.4 8,887 150 As a result, the permitted discharges to sea using water to test vessels or pipelines, or 670.9 8,908 8,649 Sangachal terminal (SD) East Azeri 600 623.3 677,9 8,544 16.9 16.8 halved to 16,970 tonnes. Discharges to sea, cooling water. We also manage produced water, The remaining 3,500 tonnes were sent for trial Sangachal terminal (ACG) West Azeri 122 Chirag Central Azeri 13.9 114 112 114 meeting the regulated requirements, are allowed which is brought to the surface during the treatment by two third-party onshore facilities. Deepwater Gunashli West Chirag 400 13.92 13.06 12.6 12.5 Operational discharges of drill cuttings to water In late 2015, the Deepwater Gunashli platform 600 200 became the second platform to start 59.7 (tonnes) separating produced water offshore, building 500 75.2 11.2 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015 Asset / facility With WBM With SBM Total 54.3 on the experience of the East Azeri platform in 2014. Applying this new technology has 400 120.8 Chirag-1 0 2,752.8 2752.8 112.6 113.0 enabled us to reduce the quantity of water Energy consumption Central Azeri 1114.9 0 1114.9 7.7 within oil sent to shore. During 2015 666,089 300 6.6 29.5 150.7 75.1 2013 2014 2015 41.5 West Azeri 228.9 0 228.9 tonnes of produced water were separated at 3.1 106.2 Fuel gas (thousand tonnes) 800.4 949.7 957 200 98.2 28.0 East Azeri 217.5 0 217.5 the East Azeri and 94,810 tonnes at Deepwater 135.6 18.2 17.4 53.1 Diesel (thousand tonnes) 65.8 83.0 83.3 Gunashli. Produced water volumes from the 108.5 61.2 7.8 Deepwater Gunashli and West Chirag 0 0 0 100 85.7 5.1 36.6 Electricity import (megawatt hours) 8,074 6,821 10,167 Shah Deniz field are much smaller compared to 34.8 65.1 62.2 37.6 21.1 42.9 10.5 12.4 14.8 Shah Deniz 284 0 284 ACG. In 2015 28,512 tonnes were placed into Total 589.7 475.9 256.4 413.1 203.7 Dada Gorgud drilling rig 0 0 0 the dedicated storage ponds at the Sangachal 2011 2012 2013 2014 2015 Generated waste quantities (tonnes) terminal, a decrease of about 8% from 2014. 2013 2014 2015 Istiglal drilling rig 12,371.4 0 12,371.4 The following flaring data has been omitted, since they are relatively small: about 1,100 tonnes in 2012 at Istiglal rig and Hazardous waste (excluding produced water and sewage) 94,958 314,462 81,314 Heydar Aliyev drilling rig 0 0 0 1,200 tonnes in 2013 at Heydar Aliyev rig. There is no flaring on Shah Deniz platform. Non-hazardous waste 15,216 13,535 18,650 Total 14,216.7 2,752.8 16,969.5

24 BP in Azerbaijan Sustainability Report 2015 BP in Azerbaijan Sustainability Report 2015 25 Environmental monitoring Society For many years, environmental surveys have been helping us to identify and understand the impacts of our activities on local environments.

Our aim is to make a positive impact on the society, supported by an open dialogue with our stakeholders and leading to sustainable enterprise and community development.

Left: A soil and vegetation survey conducted We run a programme for ambient monitoring Onshore surveys around the Sangachal terminal. around the offshore and onshore facilities that Right: Environmentalists carry out a baseline are operated by BP in Azerbaijan. We have Of the 12 onshore surveys conducted in 2015, nearshore environmental survey. completed 191 monitoring studies since the six covered the Sangachal terminal, four – the programme began in 2004. This includes 20 export pipelines and two – the Serenja environmental surveys in 2015, of which 12 hazardous waste management facility (HWMF). were onshore, five were offshore and three were nearshore. These included ambient air quality monitoring around the Sangachal terminal, Serenja HWMF, Offshore and nearshore surveys along the Baku-Tbilisi-Ceyhan pipeline and Western Route Export Pipeline. Daytime and In 2015, we conducted four seabed monitoring night-time ambient noise measurements were surveys in the vicinity of the Chirag, West Azeri, conducted at several locations along the Deep Water Gunashli, and Shah Deniz Alpha pipeline routes and around the terminal. platforms. We carried out the benthic, water and plankton survey in the Shah Deniz contract We conducted ground water quality and area. surface water monitoring around the Sangachal terminal and along the export pipelines. Ground In the new shallow water Absheron peninsula water monitoring was also conducted around (SWAP) contract area, we carried out a baseline the Serenja HWMF. nearshore environmental survey prior to planned seismic surveys. A soil and vegetation survey was conducted around the Sangachal terminal. Two wildlife Two near-shore environmental surveys were (birds, mammals and herpetofauna) surveys conducted in the Sangachal bay: were carried out close to the terminal. Bio-restoration, vegetation and species • The status of the near-shore environment in diversity survey conducted along the export the bay was assessed through water and pipelines in Azerbaijan. sediment chemistry analyses and biology (macrofauna and plankton) taxonomy.

• The health status of residential fish populations was studied in the Shah Deniz 2 area of the Sangachal terminal. The aim was to understand if there was any impact on fish from the trenching activities. Qafqaz University rector Ahmet Sanic explains the equipment installed in the university laboratory as part of the Social Development Initiative.

26 BP in Azerbaijan Sustainability Report 2015 BP in Azerbaijan Sustainability Report 2015 27 Stakeholder engagement Enterprise development

BP in Azerbaijan engages with a wide range of stakeholders, We help build a sustainable local supply chain for the Caspian region by building relationships that help us to make responsible decisions. supporting targeted capability development in Azerbaijan’s business sector.

We continued to work with the State Oil The bilingual website bp.com/caspian provides Together with our co-venturers in Azerbaijan, In 2015 BP and its co-venturers awarded Company of the Republic of Azerbaijan information on our activities in Azerbaijan and Enterprise development training we signed new long-term contracts with contracts worth about $34.7 million to (SOCAR) on issues of mutual importance the region and remains an important means programme wins CSR award 131 local companies in 2015, worth about 29 companies that previously participated. within the framework of our production sharing of interaction with the public. The website $1.09 billion. Five participant companies won contracts agreements, host government agreements and received an average of more than 820 visits worth about $3.31 million with other In October 2015 the American Chamber other agreements. every day during the year. We also received Altogether, we worked with 238 local international companies while 14 companies of Commerce in Azerbaijan awarded its 1,483 enquiries through the site’s online companies and individuals in Azerbaijan in 2015, won contracts worth $52 million with local Corporate Social Responsibility (CSR) A delegation led by BP group chief executive, enquiry form. of which 78% were small and medium-sized companies. Participating local companies also Excellence Award in the economic Bob Dudley, was received by the President of enterprises. Our joint operations and projects invested about $2.55 million in new capital empowerment category to the enterprise the Republic of Azerbaijan, Ilham Aliyev at the Revenue transparency expenditure in Azerbaijan totalled nearly equipment and hired 1,813 employees in 2015. development training programme. World Economic Forum in Davos, Switzerland $2.67 billion in 2015, which is the same as in The award celebrates businesses that in January 2015 and during the Trans Anatolian Launched in 2003, the Extractive Industries 2014. As part of this, our in-country operations- contribute to social development through “BP is our key partner, the biggest and the Pipeline (TANAP) ground-breaking ceremony in Transparency Initiative (EITI) was designed only expenditure with local suppliers in the implementation of innovative projects. leading foreign investor in Azerbaijan. It is our Kars, Turkey, in March. to help create a voluntary process for the Azerbaijan was about $1.54 billion. The project was selected from among partner both in the Contract of the Century and transparent reporting of company payments 55 submissions by 30 companies, and Shah Deniz projects. The cooperation between In June, BP and SOCAR organized an event to and government revenues in extractive Enterprise development judged against four criteria: sustainability SOCAR and BP continues as part of other celebrate the 2015 Baku Games. It was hosted industries. It is implemented by governments, and training programme upon project completion; level of impact; projects as well. This cooperation has a history by Bob Dudley, and Rovnag Abdullayev, SOCAR in collaboration with companies and civil project evaluation mechanisms and of over 20 years and will be continued for president and attended by representatives of society. As a founding member of EITI, BP is Through our enterprise development and objectives achieved. decades to come.” Azerbaijan’s National Olympics and Paralympic a long-standing supporter of this international training programme, launched in 2007, we Committees, athletes, government and partner initiative. work to identify local companies with strong Ilham Aliyev companies. business potential and support them in The President of the Republic of Azerbaijan Azerbaijan became the first EITI compliant meeting international standards and enhancing As a part of the cooperation with the country in the world after completing the their competitiveness. The long-term aim is government of Azerbaijan, our regional validation in 2009. We have played an active to increase the number of local companies president, Gordon Birrell, regularly met with role in the local EITI process as a member of that can provide products and services to the officials to provide updates on the ongoing the multi-stakeholder steering group, and as industry in the region, thus contributing to the operations and projects, including Shah Deniz a co-ordinator of the group of participating development of the local economy. Stage 2 and Southern Gas Corridor. In June, companies. In August, BP in Azerbaijan he hosted President Aliyev and his guests on submitted its EITI report covering the period of By the end of 2015, the programme sponsored the BP stand at the 22nd Caspian Oil and Gas January-December 2014. by BP and its co-venturers had helped local Exhibition in Baku. companies to secure contracts worth about $633 million, of which $383 million are with During the year, we hosted about 30 site visits BP in Azerbaijan. to the Sangachal terminal with politicians, journalists and guests of our co-venturer During 2015, 19 companies completed the companies as well as representatives of programme, bringing the total number of financial, educational and other organizations companies that have completed it to 196. from more than 20 countries. During the period, a further 245 companies went through the initial appraisal. A total of We saw substantial media interest in our 1,863 companies have been appraised since Society activities during 2015 and engaged media the programme started. in all aspects of our business in Azerbaijan, arranging briefings and providing interviews for local and international journalists. We invited BP and co-ventures’ direct spend with local entities representatives of key media outlets to all (includes operations and projects) BP-hosted external events. We also held a ($ million) media workshop to present BP’s Statistical Joint ventures with Azerbaijani capital Review of World Energy and arranged trips Small and medium enterprises to our sites for visiting international media State-owned companies

representatives. Our 24-hour media response 179.8 line was available to the media. 2,400 284.2 2,000 1,073.3 BP’s head of economics for Russia/Commonwealth 1,600 of Independent States visited Azerbaijan in October 83.3 1,232.7 2015 to present BP’s annual Statistical Review of 1,200 51.0 World Energy to representatives from government, 37.2 660.2 800 481.4 business, academia and the media. During the 27.7 1,174.4 147.0 281.4 Visitors at BP’s stand during the Oil and Gas meetings, he also presented the BP Energy 400 759.4 378.0 490.1 532.9 show in 2015. Outlook 2035 report – our forecast of the long-term For our work with communities, 365.5 energy market trends. see page 30. 2010 2011 2012 2013 2014 2015

28 BP in Azerbaijan Sustainability Report 2015 BP in Azerbaijan Sustainability Report 2015 29 Working with communities

We aim to have mutually beneficial relationships with the communities around our operations, underpinned by open dialogue and working together to address community challenges.

Maintaining community relations Ujar, Hajigabul, Agdash, Goranboy and Agstafa Computer-based educational project for through the European Bank for Reconstruction regions. These sessions covered topics such pre-school children and Development (EBRD) for use as loans BP regularly informs communities along as community safety, recruitment process and and technical assistance to private sector the Baku-Tbilisi-Ceyhan (BTC) pipeline and job opportunities, and general updates on the We signed a memorandum of understanding with development in Azerbaijan and Georgia. the South Caucasus Pipeline (SCP) route in project. In addition, the SCPX project held the PCs4KIDS Foundation in November 2014 to Azerbaijan about our plans and listens to their 32 school safety sessions involving more than supply kindergartens with used computers across Under the current microfinance project, which concerns. We engage in a number of ways, 2,500 schoolchildren and 140 teachers. the regions through which the pipelines pass. The is managed by EBRD and implemented via from community meetings and the distribution purpose of the project is to create opportunities its local partner Bank Respublika, BP and its of literature, to written correspondence and Land acquisition for pre-school aged children to develop their co-venturers committed $1 million. This project responses to requests or complaints. cognitive skills, such as active listening and is aimed at providing affordable and transparent The land acquisition process for the SCPX creative thinking through the use of entertaining microfinancing opportunities to micro, small Our community liaison officers hold public project continued in 2015. As part of land lease computer programmes. In 2015 we distributed and medium-sized entrepreneurs, local consultations and manage community-related agreements, we completed compensation 101 computers to 11 communities in Garadagh, farmers and enterprises located along BTC/ grievances and requests in these communities. payments to more than 950 land owners/ Hajigabul, Kurdamir and Ujar. SCP pipelines with the aim of increasing their Since 2013, we have distributed awareness users in the first 200km. We also signed competitiveness. Target areas include Tovuz, information packs that explain restrictions new agreements with more than 3,200 Health awareness sessions Shemkir, Goranboy and Yevlakh districts. around the export pipelines. By the end of 2015 land owners/users in the final 224km of the more than 4,300 packs had been provided to pipeline right-of-way. The remaining land lease We organized community awareness sessions In 2015 40 loans together totaling about landowners, land users and other stakeholders. agreements and compensation payments will on tuberculosis for almost 300 people from $250,000 were issued in Shamkir, Goranboy The CISCO Certified Information Technology The number of registered third-party violations be completed in 2016 as per the project plan. 11 project-affected communities in Hajigabul, and Yevlakh districts. Twenty loans will be used A project supported by BP aims at creating Essentials course for Umid and Sangachal such as grass fire, damage to line markers and No involuntary resettlement has taken place as Kurdamir and Ujar in November 2015. The in agricultural, four in service and 16 in trading opportunities for pre-school aged children to community members. trespassing within the safety zones was 47 in part of the SCPX project. sessions were delivered by two doctors from the activities. develop their cognitive skills through the use of 2015. Azerbaijan Research Institute of Tuberculosis and entertaining computer programmes. The compensation process and principles are Lung Diseases. During the sessions, information Business and human rights Grievance management in line with BP’s Guide to Land Acquisition and was provided on tuberculosis, its symptoms, involved in the protection of our operations to Compensation document, and compensation treatment options and preventive measures. The UN Guiding Principles on Business and enable understanding of the possible human We believe that open dialogue helps to payments will be completed for affected Human Rights outline a number of specific rights impact of their work. build strong, mutually beneficial working parcels of land in 2016. The document can be IT Essentials course for Sangachal and Umid human rights-related responsibilities for relationships over the long term, and enables found online at bp.com/caspian. communities businesses. According to the Guiding Principles BP Azerbaijan and contractors’ security personnel all sides to constructively resolve any the role of business is to respect human participated in the Voluntary Principles refresher disagreements. Development initiatives In December 2015 we launched a project providing rights, comply with all applicable laws and to training session conducted by BP’s global non-agricultural skills for Umid and Sangachal enable the remediation of any adverse human voluntary principles advisor in May 2015. We received 115 requests from communities As part of our operations in Azerbaijan, we community members of Garadagh district in rights impacts that business may cause or and other stakeholders, mainly relating to support a variety of community and sustainable order to increase their opportunities for income to which they may contribute, for example We also partner with a government body, getting permission for infrastructure works to development initiatives, including projects generation and employment. The CISCO certified through effective operational-level grievance the Export Pipelines Protection Department be carried out on the pipeline corridor. By the designed to improve local education, build Information Technology (IT) Essentials course, mechanisms for individuals and communities. (EPPD), to protect our operations. The EPPD end of 2015 we had responded to all these community-based skills and capabilities, implemented through Qafqaz University, is offered currently employs 76 certified training officers requests. Our grievance resolution mechanism and provide training and finance that local in Azerbaijani and covers fundamental computer BP is progressing towards aligning with to provide Voluntary Principles training to for communities along the pipelines’ route enterprises need in order to grow. and career skills for entry-level IT jobs. About 50 the Guiding Principles using a risk-based their staff. A total of 39 newly recruited, 350 has been in place since 2007. During 2015, community members completed the three-month approach. We are delivering our human rights current state security officers, and 90 private we received 12 BTC/SCP pipeline related Community needs assessment course in March 2016, gaining valuable skills policy, which sets out BP’s commitments in security service contractor personnel working Society complaints, nine of which we had responded and practical experience. Topics covered include relation to human rights, by implementing the at BP sites completed the Voluntary Principles to by the end of the year. We responded to one We conducted a community needs assessment laptops and portable devices, wireless connectivity, relevant sections of the Guiding Principles and training in 2015. more in January this year and are working on in 2015 to identify social investment projects security and communication skills. incorporating them into the processes and the last two. for BP in Azerbaijan. This included reviewing policies that govern our business activities. An emergency hotline along the export pipelines environmental and social impact asessments Social infrastructure improvement in enables affected communities and individuals The South Caucasus Pipeline Expansion (SCPX) undertaken by BP for its projects in Azerbaijan, Goranboy communities Human rights principles are already at the to report any improper use of force or abuse of project has developed and implemented a interviews with key stakeholders and heart of many of BP’s existing practices, human rights directly to BP and the state security community grievance mechanism in order community group discussions in 44 project- We launched three infrastructure improvement particularly in our code of conduct and values, provider for joint investigation. No security or to help us to understand and respond to all affected communities. This work has fed projects in the project-affected communities as well as in many operational requirements. human rights incidents were reported via the community concerns. In 2015 we continued into our community investment strategy and of Goranboy in 2015: the renovation of a water In 2015 we continued to identify and address hotline in 2015. to register, acknowledge and respond to all identified potential social investment projects system in Gazanbulag village; the refurbishment potential human rights impacts in the areas of community grievances and requests. to be implemented in the next few years. of a primary school in Iravanli village and the recruitment, workforce welfare, land acquisition renewal of its heating system. and livelihood, as well as other related issues in The SCPX project continues to engage In 2015 we implemented a number of affected communities. with communities along the 424 kilometre community development initiatives to address Regional microfinance programme with the pipeline route in coordination with its pipeline the needs identified. European Bank for Reconstruction and We are a signatory to the Voluntary Principles on contractor, Saipem-Azfen Joint Venture (SAJV). Development Security and Human Rights, which define good BP supported Gobustan Regional Training Center practice for security operations in the extractive delivers vocational training for communities from Fifteen community awareness meetings were Under a framework agreement signed in 2006, industry. In Azerbaijan we promote training in the settlements of the Garadagh district. held across communities in Kurdamir, Yevlakh, BP and its co-venturers committed $6 million the Voluntary Principles for security personnel

30 BP in Azerbaijan Sustainability Report 2015 BP in Azerbaijan Sustainability Report 2015 31 Supporting education, culture and sport

In addition to our community development initiatives, we support programmes that focus on education and capacity-building, culture and sport.

Educational initiatives Vocational training for communities

Our involvement in education is diverse and wide- In September 2014 BP on behalf of its co- ranging, guided by our goal of building capability to venturers signed an agreement with the State Oil support the oil and gas industry in Azerbaijan. Company of the Republic of Azerbaijan (SOCAR) to support vocational training for communities. Under Azerbaijan oil and gas scholarship programme the agreement, 79 young people selected from the settlements of the Garadagh district, close Funded by BP and its co-venturers, Azerbaijan to the Sangachal terminal trained at SOCAR’s oil and gas scholarship programme enables Gobustan Regional Training Center to become Azerbaijani students to pursue undergraduate and qualified technicians. The project had a total budget graduate studies in engineering and geosciences of more than $624,000. at universities in Turkey and Azerbaijan. In 2015 we continued to provide scholarships to the existing Qafqaz University project students who have been selected in previous years. The value of these scholarships was about We continued our project at Qafqaz University to $462,000. support development of Azerbaijan’s experts in engineering. BP has invested about $2.5 million In 2015 we hired four of these students into our to help establish two new departments and 16 Students at BP sponsored summer field course graduate recruitment programmes and four others laboratories since the launch of the project in Graduates of School of Project Management Local athlete receives instructions from a Michael Johnson Performance specialist at Elite Athlete that provides theoretical knowledge and hands-on as summer interns. 2009. In January 2015 BP signed an amendment established by BP and its co-venturers. Development and Training Programme. experience in sedimentology and structural to extend the cooperation with the university to geology. BP bursary programme March 2018. Our support to sport development and prepare national staff members, including We have been awarding bursaries to university BP summer students’ geology field course university graduates, to efficiently deliver a students that are studying oil and gas-related We continued our official partnership with the major multi-sport event, as well as to develop subjects in Azerbaijan since 2007. These give Since 2003 BP in Azerbaijan has sponsored National Olympic and Paralympic Committees. skills that will assist them in their future students an opportunity to improve their technical a summer field course providing theoretical This includes sponsoring Azerbaijan’s National careers. English language skills through a BP-funded knowledge and hands-on experience in Free admission to museums Olympic and Paralympic teams and a group 10-month training course. In 2015 we offered a sedimentology and structural geology for of athletes that have been selected as our A total of 188 university graduates – including year’s extension for the course to the previous undergraduate and graduate students. In From 2013 until the end of 2015, we ambassadors. 162 from Azerbaijan and 26 from across Europe – year’s 12 bursary winners with high university total, 18 university students were selected sponsored five seasonal campaigns to were enrolled in the Graduate Excellence admission scores. The total value of bursaries in from 182 applicants following a knowledge provide free admission to Baku’s leading We carried out the elite athlete development Programme. Graduates learned important skills 2015 was $17,113. based assessment. The course was led museums including the National Museum and training programme in collaboration and knowledge for contributing to the successful by representatives of Azerbaijan’s National of History of Azerbaijan, the National Art with the National Olympic Committee of the delivery of the Games and were provided with School of Project Management Academy of Sciences and the University of Museum of Azerbaijan, the Maiden Tower Republic of Azerbaijan, the Ministry of Youth further opportunities to continue hands-on, Michigan in the US. historical monument, the Azerbaijan Carpet and Sports of the Republic of Azerbaijan and practical experience in planning the games and Established by BP and its co-venturers in 2010, Museum and the Shirvanshahs Palace Michael Johnson Performance (MJP). with operational roles at test events. the School of Project Management continues to Azerbaijan Business Case Competition complex. help the private and public sectors access globally The project aimed to create opportunities for a recognized, comprehensive project management BP supports the Azerbaijan Business Case About 90,000 people visited the museums large group of national athletes and coaches Society programme. By the end of 2015, about 325 Competition for university students, in which during the campaigns. to benefit from MJP’s international experience specialists, representing 114 private and public teams compete to solve real-life business In October 2015 the campaign was awarded as they work to achieve sporting excellence sector organizations, had enrolled. problems using their knowledge in business with the Corporate Social Responsibility enhancing Azerbaijan’s representation in disciplines from finance and marketing, to (CSR) Excellence Award in Culture category international sporting events. The programme In December, we hosted the fourth School of accounting and management. They present their by the American Chamber of Commerce in targeted four national sport federations - Project Management graduation event. Of the solutions to a panel of judges representing major Azerbaijan. athletics, gymnastics, triathlon and fencing, to total of 312 graduates who received the George businesses in Azerbaijan. be represented by both coaches and athletes Washington University Associates Certificates, including BP’s ambassador athletes. A total of 282 also qualified for Masters Certificates. The 2015 competition was hosted by ADA 85 athletes have been assessed and selected University, with support from BP and other for the programme. The project is delivered by ESI International, a sponsoring industry organizations. 50 teams from global project management training organization, Azerbaijan applied to take part in the competition, Supporting Baku 2015 Games in collaboration with Khazar University. with three teams chosen as finalists. The students Altogether, BP and its co-venturers’ financial went through four weeks of training in business BP was an official partner of the Baku 2015 investment in the SPM is more than $2 million, case analysis and strategy development in European Games, and the oil and gas partner of which $558,248 was spent in 2015. preparation for the finals. BP provided $4,759 in for the games. sponsorship and our employees contributed to the project as trainers, coaches and a jury panel BP also became the exclusive official partner member. of the Baku 2015 Games Academy initiative. This learning programme aimed to develop

32 BP in Azerbaijan Sustainability Report 2015 BP in Azerbaijan Sustainability Report 2015 33 Our reporting 35 . Ernst & Young’s Young’s . Ernst & 2 BP in Azerbaijan Sustainability Report 2015 Are the data and claims regarding BP in management within the Report regarding BP regarding management within the Report in Azerbaijan’s sustainability performance. Azerbaijan’s in issues relevant to BP in Azerbaijan which which Azerbaijan to BP in issues relevant have been excluded from the Report. the Report. from been excluded have supported by contained within the Report evidence or explanation? or explanation? evidence were raised in the media or the outcome of raised in the were Does the Report cover the key issues? the key cover Does the Report sustainability key of any aware are not We materiality process that own Azerbaijan’s BP misstatements in of any are not aware We the assertions and data presented by BP the assertions and data presented by Azerbaijan’s sustainability performance Azerbaijan’s professional competence rules as articulated by as articulated by competence rules professional partners and professional staff. These policies These staff. partners and professional financial interests in our clients prohibit any been any events including the provision of including the provision events been any prohibited services that could impair our global Climate Change and Sustainability assurance team has been drawn from our from assurance team has been drawn required to confirm their compliance with the required to confirm their compliance with the independence policies apply to the firm, independence. Each year, partners and staff are partners and staff year, independence. Each independence or objectivity. There were no were There independence or objectivity. significant UK and international businesses. conclusions are outlined below conclusions are outlined such events or services in 2015. Our or services events in 2015. such engagements similar to this with a number of Our conclusions Our independence with the applicable independence and Based on the scope of our review, our of our review, on the scope Based

Ernst & Young LLP, London LLP, Young Ernst & firm’s policies. firm’s undertakes Services which Practice, We have implemented measures to comply implemented have We Professional Code of Ethics for the IFAC that would or might be seen to impair that would confirm annually to BP whether there have We 2. Accountants and ISQC1 13 June 2016 June 13 1. Reviewed information or explanation about or explanation information Reviewed Reviewed the outcome of BP Azerbaijan’s Azerbaijan’s of BP the outcome Reviewed business unit level data records. business unit level documentation to support the sustainability did not data we contained within the Report, and statements. Whilst we reviewed reviewed Whilst we and statements. documentation. level. level. and evidence provided by relevant BP relevant by provided and evidence media, BP Azerbaijan’s own review of material material of review own Azerbaijan’s BP media, managers. reports and internal documents relating to the reports and internal documents relating to the issues to be included in the Report. in 2015. own processes for determining the key key determining the processes for own collating and reporting data at country or site sustainability issues relevant to BP in sustainability issues relevant sustainability internal issues, and selected sustainability performance of BP in Azerbaijan Azerbaijan sustainability of BP in performance Reviewed a selection of external media external a selection of Reviewed the Report’s sustainability data performance the Report’s Report are consistent with the explanation with the explanation are consistent Report test the data gathering, processes for the Report are consistent with the relevant are consistent with the relevant the Report Azerbaijan in 2015 which were raised in the were which in 2015 Azerbaijan base our conclusions. The extent of evidence of evidence extent The base our conclusions. gathering procedures performed is less than is less gathering procedures performed designed to obtain a ‘limited level’ of assurance of obtainto designed level’ ‘limited a level of assurance is provided. of assurance is provided. level below. In order to form our conclusions form to In order involved placing reliance on the BP’s controls placing reliance on the BP’s involved with the degree of reliance information, of the the results of our review by informed 3. effectiveness of these controls. effectiveness Completion of our testing activities has Our evidence gathering procedures were gathering procedures were Our evidence that of a reasonable assurance engagement managing and reporting sustainabilityfor 2. (such as a financial audit) and therefore a lower a lower as a financial audit) and therefore (such (as set out in ISAE3000 Revised) on which to on which (as set out in ISAE3000 Revised) we undertook the steps outlined the steps undertook we 1. The limitations of our review • the key covers Whether the Report • Whether sustainability claims made in the • Whether the sustainability data presented in . 1 Federation of Accountants’ International Standard for Assurance Engagements Than Audits or Reviews of Historical Financial Information (ISAE3000) Revised. Parts A and B of the IESBA Code; and the International Standard on Quality Control 1 (ISQC1) International International below. conclusions do not accept or assume any responsibility for responsibility for do not accept or assume any assurance to BP management that the data,assurance to BP management Our or explanation. evidence are supported by and performed in accordance with the and performed are also responsible for the design, are also responsible for person or other other purpose or to any any Respective responsibilities Respective may place on the Report is entirely at its own is entirely at its own place on the Report may Independent assurance statement statement Independent assurance misstatement, whether due to fraud or error. is to carry instructions, a out management’s risk. information within the Report. Management within the Report. information implementation and maintenance of internal organisation. Any reliance any such third party such reliance any Any organisation. statementsmade regarding the and assertions Azerbaijan sustainability of BP in performance conclusions can be found and scope of work Azerbaijan statements presented in the BP in controls relevant to the preparation of the to the preparation controls relevant claims in the selected data and performance Other Other 1 2 engagement on selected performance data and engagement on selected performance International Federation of Accountants’ Accountants’ of International Federation ISAE3000(Revised) BP’s management in Azerbaijan are responsible Azerbaijan management in BP’s Our assurance engagement has been planned Our responsibility, in accordance with Our responsibility, Report, so that it is free from material Report, We information”). (“the subject matter Report Sustainability Report 2015 in order to provide in order to provide Sustainability 2015 Report (the Report). Sustainability 2015 Report following criteria: following for the collection and presentation of the for We have reviewed the BP in Azerbaijan Azerbaijan the BP in reviewed have We a limited assurance performed have We to BP management BP management to What we did to form our form did to What we The Report has been evaluated against the has been evaluated Report The Independent assurance statementassurance Independent ‘limited level’ assurance engagement on ‘limited level’

2 0 0 2 17 1.2 8.5 4.5 5.9 903 150 415 805 275 0.01 0.08 87% 2015 2015 2015 2015 2015 2015 2753 3,130 2,735 3,150 35.15 1,045 2,438 3,400 10,966 7,674 3,275.2 1,388 203,651 6 0 0 0 0 14 40 0.7 5.9 4 74 155 11. 6 230 881 900 13.4 0.09 2014 2014 2014 2014 2014 2014 86% 7,170 1,766 18.78 4,067 3,381 2,907 3,393 3,406 11,179 14,311 3,846.5 413,120 0 0 5 40 11 2.7 197 0.6 6.8 909 494 13.5 122 182 643 0.03 0.27 2013 2013 2013 2013 2013 2013 85% 3,216 16.49 2,722 3,255 1,542 4,862 3,164 8,887 1,505 15,232 3,021.8 256,423 0 0 3 0 20 12 5.6 4.5 168 0.6 893 452 114 11. 2 0.03 0.21 2012 2012 2012 2012 2012 2012 85% 13.49 2,982 2,530 3,072 1,360 3,669 3,776 8,695 2,540 3,543.7 175,716 475,910 156,794 5 0 0 0 0 3 21 0.6 5.8 3.1 112 149 922 380 13.5 0.03 0.24 2011 2011 2011 2011 2011 2011 11. 74 86% 2,701 4,177 2,652 2,272 1,206 2,677 2,636 8,544 2,787 1 3,892.5 589,717 2 10 11 10 5 4 (thousand tonnes) gross (thousand tonnes CO2 equivalent) 6 8 gross (thousand tonnes) 7

9 10 3

BP in Azerbaijan Sustainability Report 2015

National National (%) Includes 30 Azerbaijani employees working on overseas assignments for BP in Azerbaijan This is the cash-out number spent under the BP-operated projects For the year ended 31 December the year For Operating Direct methane (CH4), gross (thousand tonnes) Indirect carbon dioxide (CO2), Indirect carbon dioxide Flaring (exploration and production), gross (tonnes) Flaring (exploration Hours worked – contractors (million hours) – contractors (million Hours worked Financial Number of professional staff of BP in Azerbaijan of BP in staff Number of professional Environment OPEX (operating expenditure) – total million) spend, gross ($ OPEX (operating expenditure) Volume of oil spilled (litres) Volume Total hydrocarbons produced (thousand barrels of oil equivalent per day) of oil equivalent produced (thousand barrels hydrocarbons Total Direct greenhouse gas emissions, Sulphur dioxide (SOx), gross (tonnes) Sulphur dioxide Expatriate Direct carbon dioxide (CO2), gross Direct carbon dioxide CAPEX (capital expenditure) – total spend, gross ($ million) CAPEX (capital expenditure) Volume of oil unrecovered (litres) of oil unrecovered Volume Nitrogen oxides (NOx), gross (tonnes) Nitrogen oxides Senior level Azerbaijani managers Azerbaijani Senior level Safety Operational discharges to water – drill cuttings with synthetic-based mud (tonnes) – drill cuttings to water Operational discharges Non-methane hydrocarbon, gross (tonnes) Non-methane hydrocarbon, Social spend Fatalities – employees Employees Number of oil spills Total for BP and co-venturers in Azerbaijan, ($ million) Azerbaijan, in BP and co-venturers for Total Fatalities – contractors Number of permanent employees of BP in Azerbaijan of BP in Number of permanent employees Days away from work cases – workforce from work away Days Days away from work case frequency – workforce from work away Days Recordable injuries – workforce Recordable Recordable injuryRecordable frequency – workforce Hours worked – employees (million hours) – employees Hours worked Hours 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. Direct GHG emissions are the physical emissions from operations. Gross numbers represent total of all partners’ participating interest in production sharing agreements (PSA). Net numbers represents BP’s participating interest in PSA. Oil spills are defined as any liquid hydrocarbon release to secondary containment or to open environment of more than or equal to one barrel (159 litres, equivalent to 42 US gallons). The BP AGT and its co-venturers. This includes Azeri-Chirag-Deepwater Gunashli oil, Shah Deniz gas and condensate, associated gas delivered to the State Oil Company of the Republic of Azerbaijan. Hours 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. Indirect GHG emissions are a consequence of the import by operations of steam, electricity and heat from third-party sources. Unless otherwise stated, performance data relates to BP in Azerbaijan only. 5 8 6 9 3 2

4 Five-year data performance 7 11 10 1 34 Further information

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

You can also telephone +994 (0)12 599 3000 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 Max Offset printing house certified independently according to the rules of the Forest Stewardship Council (FSC). Photography Alakbar Agasiyev Shahin Abasaliyev, Stuart Conway, Ramin Azizli, Chingiz Samedzade © BP p.l.c. 2016