ABOUT ABOUT THE GOVERNANCE THE REPORT COMPANY

ETHICS AND HUMAN COMMUNITY COMPLIANCE RESOURCES ENGAGEMENT

HEALTH, SUPPLY GRI SAFETY AND CHAIN ENVIRONMENT CONTENT

SUSTAINABILITY REPORT 2018

WE SOLVE, YOU GAIN Nobel Oil Services / Sustainability Report 2018 CONTENT

ABOUT ABOUT THE GOVERNANCE THE REPORT COMPANY

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ETHICS AND HUMAN COMMUNITY COMPLIANCE RESOURCES ENGAGEMENT

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HEALTH, SUPPLY GRI SAFETY AND CHAIN ENVIRONMENT CONTENT

32 39 41 Nobel Oil Services / Sustainability Report 2018 THE REPORT ABOUT Sustainability takes the center Preparation of the Report of the Global Reporting Initiative (GRI) stage of our operations and The decision to prepare Nobel Oil’s first Sustainability Reporting Standards remains an integral part of our Sustainability Report was an essential as a methodological framework. We business practices. For more than step towards the implementation of our disclose the most relevant issues in 14 years of our work in Azerbaijan, company’s strategy to increase the Report and analyze the aspects of our focus has been modeling a business transparency and develop a sustainable development, regarding the responsible dialogue with stakeholders. sustainable business concept particular indicators on topics identified This is our first Report in which we try to in the standards and examined by the while prioritizing safety and the inform our stakeholders about our UN Sustainable Goals. In addition to environment with the aim to win activities, achievements and plans in the this, we analyzed independent media the trust of our stakeholders. We field of sustainable development. The publications on the company’s activities aspire to contribute positively to Report presents our economic, and reports on the sustainable the environment where we set environmental and social values, as well development of international our operations while continuing as what was done during the reporting companies. We also conducted to ensure excellence in our period to put them into action. The interviews with employees responsible performance. This is a significant Sustainability Report preparation for various areas of sustainable challenge that is woven into the process helped our company in development to ensure the interests of fabric of the way we do business. defining our concept of sustainable internal and external stakeholders. development and approaches to non- By now, we have managed to build financial reporting in general. Stakeholder engagement is a crucial a rich portfolio by keeping a close Reporting period part of the process of the key aspects’ CEO MESSAGE watch on changing market trends analysis. The company constantly and discovering promising courses The Report was prepared for 2018. The Report also mentions events and interacts with its stakeholders to be for development. Having earned a activities that occurred earlier than aware of their changing needs and Today, Nobel Oil Services is a reputation of a reliable and trusted this period. For analytical purposes, expectations. We are committed to the progressive, value-generating group partner in the market, we are driven it also includes comparisons with principles of respect for all the parties’ of service companies that presents a by a strong desire to expand our two previous years and our planned interests, frequency of contacts, as well distinctive brand in oil, gas and energy business to a greater region and have figures for 2019. External verification as well-timed reporting on key aspects sectors, while providing responsible already achieved progress in this of this Report was not conducted. We of our activities. We build relationships and sustainable business operations. regard. From the strategic point of are considering that the future with many stakeholders by using the view, we aim to continue our market releases will be independently relevant means and methods (see the As a rapidly developing group of growth, maximize our economic and verified. Stakeholder Engagement table on page companies, Nobel Oil Services has operational efficiency, and continue 4). A comprehensive analysis identified gone through a rigorous journey investing in the social and economic Borders and scope of the Report the key aspects in the Materiality Matrix. to reach the considerable growth potential of Azerbaijan. Since this is our first consolidated and accomplishments it prides on Report on sustainable development, it The financial and economic today. We joined the market in 2005, As we move forward into the future, was decided to include the head office indicators presented in the Report of Nobel Oil Services (UK) Limited and resulted from the audit conducted offering procurement services to we intend to continue upholding its subsidiaries, branch of Nobel Oil Ltd based on international financial the oil & gas industry of the Caspian our values of safety, quality, one in the Republic of Azerbaijan (Nobel reporting standards (IFRS). region. Since then, we have grown team, integrity, and excellence. By Oil), GLENSOL and PROKON in the organically and broadened with maintaining a safe, environmentally scope of the Report. The Report our capabilities to provide drilling, responsible and economically presents our activities in the territory of workover, engineering, construction, sustainable business, we can deliver the Republic of Azerbaijan, as it is our project management, oilfield even more benefits and meaningful central region of operation. operations, equipment maintenance contributions to the people of CONTACT PERSON and enhanced oil recovery services. Azerbaijan in years to come. Principles for determining the Kamran Maharramov Since 2015, we have been following content of the Report [email protected] a dynamic business development VUGAR SAMADLI, During preparation of the Report for strategy, acquiring new businesses, CEO 2018 the Company used the guidelines 02 and creating joint ventures. 03 Nobel Oil Services / Sustainability Report 2018

STAKEHOLDER MATERIALITY ENGAGEMENT MATRIX THE REPORT ABOUT Our system of stakeholder engagement is aimed at achieving the objectives for Sustainable Development. The company constantly interacts with its

stakeholders to learn about their changing needs and expectations. We follow HIGHER 4 the principles of respecting the interests of all parties, regular contact, as well as 2 timely communication on key aspects of our activities. The company considers 2 1 3 the following as the interested parties: parties with a high degree of influence on the activities and performance of the company; parties that largely depend on the activities which the company has obligations towards, parties, cooperation 1 with which is important given the strategic prospects of the company. 3

ABOUT 5 1 KEY FORMS DISCUSSED 4 STAKEHOLDERS OF INTERACTION ISSUES

Importance to stakeholders 3 2 1 Clients Treaties Quality of service 2 Individual meetings Advancement of the service level Reporting Timely and cost-effective project Request for Proposals completion Presentations Regulatory Compliance LOWER Customer rating system Occupational Safety, Health and LOWER Importance to business HIGHER

THE REPORT Environment Shareholders Meeting of shareholders Financial statements and Investors Round tables Corporate Governance ECONOMIC SOCIAL ENVIRONMENT Presentations Quality of service Corporate Reporting Increase efficiency 1 Supply chain 1 Human rights 1 Environmental compliance Participation in conferences Strategy implementation Occupational Health, Safety and 2 Economic performance 2 Health and Safety 2 Water use Environmental protection 3 Anticorruption 3 Training and Development 3 Waste Suppliers Treaties and agreements Occupational Health, Safety and and Contractors Business meetings Environmental protection 4 Community engagement 4 Energy efficiency Corporate website Ethical tender process ORGANIZATIONAL Compliance with mutual obligations 5 Succession planning Compliance with business ethics 1 Business ethics Transparency and compliance 2 Corporate governance Employees Open door policy Salaries Internal communications Labor protection and occupational system safety Trade Unions Career development Local regulations Education and development Labor Relations Government Relations with regulatory Compliance of the Company’s authorities activities with the legislation Participation in commissions Emergency Preparedness Joint working groups Human rights Participation in conferences Health, safety, labor and environ- Corporate Reporting mental protection Round tables Impact on the local economy Individual meetings Local Communi- Social events Transparency of the company’s ties Company reporting activities Meetings Education Partners Reporting Transparency Treaties and Agreements Discussion of the project exploita- 04 Meetings tions 05 Nobel Oil Services / Sustainability Report 2018

IDENTIFIED WHO WE ARE MATERIAL ASPECTS THE COMPANY ABOUT MATERIAL MATERIALITY ASPECTS BOUNDARIES Nobel Oil Services (UK) Limited is a rapidly growing and diversified TOPICS FOR NOBEL OIL OF MATERIAL TOPICS group of energy-related businesses. We provide exceptional value Anticorruption Operating with integrity Company to customers and deliver innovative solutions while adhering to the is crucial for achieving Local community highest ethical standards. sustainable development. Customers Thus, the Company pays Shareholders special attention and Investors Nobel Oil Ltd was originally result, all service segments of the oil to implementation Government established in 2005 as a technical and gas industry were united under of anti-corruption service provider, offering services to Nobel Oil Services (UK) Limited. ABOUT measures. the oil and gas industry in the Caspian Human rights Human rights are an integral Company region. These included wells workover, Nobel Oil Services (UK) Limited part of sustainable develop- Employees drilling, installation, construction, was founded on 25 June 2014 and ment. We guarantee equal Customers engineering, repair & maintenance registered in the United Kingdom. rights and do not tolerate Shareholders services. In 2013, Nobel Oil undertook Nobel Oil Services (UK) Limited is any form of discrimination and Investors a comprehensive strategic review of a parent company of Global Energy and harassment. Government its business, with a focus on assessing Solutions, PROKON, SOCAR AQS the company’s organizational and Llamrei. It also has several joint Training and Development Our ability to attract, develop Company THE REPORT capabilities, strategic goals, operating venture companies such as GVL, SDL and retain top talent is key Employees markets and growth options both Denholm Limited, Lamor NBO, Wood to our success. We invest Government in programs and develop- regionally and globally. Group Azerbaijan and Turan Drilling & mental plans that build high Engineering Company. performing work teams. In 2014, Nobel Oil reorganized its corporate structure to place its Today, Nobel Oil grew into a Health and Safety Safety and labor protection Company Azerbaijan-based businesses under a progressive, diversified, value- is particularly important for Employees parent company headquartered in the generating service group in the oil, gas us. The life and health of our Customers UK and align its business processes and energy sectors and turned into a employees, contractors, Suppliers customers and all interested and Contractors with international standards. As a recognizable brand. parties remains the key Shareholders priority for the Company. and Investors Government OPERATIONS Supply chain Our business performance Company Suppliers and LOCATION is dependent upon our contractors Shareholder supply chain management. Government In today's globally competi- tive economy, we are aware that strong relationships with our suppliers are essential to COUNTRY NAME OF OFFICE satisfying the needs of all of • Azerbaijan Branch of Nobel Oil Ltd our stakeholders. in the Republic of Azerbaijan Environmental compliance The conscious acceptance Company • Kazakhstan Glensol of social responsibility Shareholders • UAE Llamrei towards maintaining an en- Community • Bangladesh SOCAR AQS vironment is one of the top Customers priorities for the Company. Government The Company monitors Local Community MAIN SERVICES SERVICED INDUSTRIES • Drilling and wells management • Oil and Gas the implementation of the • EPCM • Energy legislation requirements in • Construction • Power and Water the field of environmental • Project management • Construction protection while imple- • Procurement and logistics menting projects. • Fabrication and installation 06 • Integrated services 07 08

ABOUT THE COMPANY each individual. dedicated to fostering a work environment that challenges, enriches and rewards capabilities andthecontribution ofallteammembers. Allourmanagementis our standards ofexcellence.Nobel Oil’s successdependsuponthecombined continuous improvement wechallenge,test, reevaluate andcontinually raise Our philosophyisbasedonethicalconduct,mutual trustandteamwork.To ensure OUR PHILOSOPHY STRUCTURE COMPANY NOBEL OILSer- NOBEL OILSer- NOBEL OILSer- NOBEL OILSer- NOBEL OILSer- (UK) LIMITED NOBEL OIL SERVICES vices UK vices UK vices UK vices UK vices UK VENTURES AZERBAIJAN LAMOR NBO GROUP JOINT WOOD vices UK vices UK vices UK vices UK vices UK NOBEL OIL Ser- NOBEL OIL Ser- NOBEL OIL Ser- NOBEL OIL Ser- NOBEL OIL Ser- Nobel OilServices/SustainabilityReport2018 customer delivery. equipment from thepoint oforiginto optimizing theflowofmaterial and operations. Llamrei focuseson maintenance andproduction clients related todrilling,projects, materials andequipmentforits Provides awiderange ofoilfield LLAMREI facilities, polymerandfertilizerplants. processing facilitiesandrefining stations, onshore andoffshore gas injection plants,offshore power and installationofoffshore gas focuses onfabrication,construction management company, which It isaproject andconstruction PROKON in thewatertreatment area. GLENSOL offers operational solutions equipment. Inpartnership withSuez, capability forotherrotating andstatic inspection, maintenanceandrepair drive maintenanceservicesaswell GLENSOL alsoprovides offshore top of gasturbinesandcompressors. start-up, operation, maintenance Provides installation, commissioning, SOLUTIONS(GLENSOL) GLOBAL ENERGY other drilling-related services. sidetracking, casingrunningand well workoverandintervention, design andplanning,wellcompletion, and directionally deviatedwells,well drilling ofhorizontal,multilateral services management,including Provides integrated drillingandwell SOCAR AQS governance totheGroup companies. Provides managementoversight & NOBEL OILSERVICES warehouse management. construction workstream aswell Procurement, RDS engineeringand Operation, DrillingRigMaintenance& Drilling RigMaintenance, DrillingRig engineering services,including Provides offshore drilling andrig COMPANY TURAN DRILLING&ENGINEERING Azerbaijan. across arange ofoffshore assetsin construction managementcontracts engineering, procurement and supports thedeliveryofbrownfield market inAzerbaijan.Itprimarily support servicestotheoilandgas Provides engineering andoperations WOOD GROUPAZERBAIJAN capping stacksystems. management anddisposal, such asvessels,dispersants, waste ancillary servicesandinfrastructure, partners toprovide customers with rely onanextensiveframework of the advantageofbeingableto remediation. LamorNBOhasalso wastewater treatment andsoil response, wastemanagement, Main servicelinesincludeoilspill LAMOR NBO certification. maintenance engineering,testingand overhaul andrepair, valvediagnostics, services amongothers includesvalve full lifecycleofvalves.Therange of Provides supportsolutionsforthe GVL vessels, tanksandrelated packages. including high-pressure flowlines, offshore facilities,pipeworksystems of structural steelwork,upgrades of including thefabricationandinstallation fabrication andinstallationservices, Provides onshore andoffshore SDL NOBEL STRUCTURE COMPANY

09 THE COMPANY THE ABOUT Nobel Oil Services / Sustainability Report 2018

KEY PROJECTS KEY PROJECTS THE COMPANY ABOUT KEY ONGOING PROJECT KEY COMPLETED PROJECTS ABOUT

SOCAR POLYMER Sumgayit, Azerbaijan OIL ROCK GAS TURBINE COGENERATION EPCM About the Project: POWER PLANT Caspian Sea, Azerbaijan The Project Construction Area has been cleaned from Caspian Sea, Azerbaijan Scope of works: debris and existing facilities and utility connections in About the Project: HEYDAR ALIYEV OIL REFINERY Engineering, Procurement and Construction the Project Area has been removed. The Project Area Neft Dashlari Power Plant consists of 6 turbines and Management across 8 offshore platforms (ACG has been backfilled and compacted up to the Project Baku, Azerbaijan Generators (8 MGW). The total capacity of power Scope of works: & Shah Deniz), including Small Engineering Zero Level. generation is 48 MGW. 2 Turbines are capable to Steel Structure Erection, Modifications (CAT-C), Brownfield projects (CAT-B), Scope of works: 3 work with dual fuel provide with the Diesel system. Piping Fabrication and Erection, Equipment erection TAR (Turnaround) for all discipline work, Maintenance General Excavation of 405,900 m , Mass Backfill 3 3 Turbines are capable to run continuously and the works. Projects (repair, fabric maintenance, etc). from stockpiles of 130,000 m and Mass Backfill from imported soil of 290,000 m3. other 3 are in standby. THE COMPANY

VALVE MAINTENANCE 8 offshore platforms, Sangachal Terminal and 4 GUNESHLI DEEP SEA WATER PLATFORM ELECTRICAL & INSTRUMENTATION export pipelines within Azerbaijan and Georgia Scope of works: COMPRESSOR STATION Azerbaijan-Georgia-Turkey (AGT) region Valve maintenance services, including among Caspian Sea, Azerbaijan GUNESHLI DEEP SEA WATER PLATFORM Scope of works: others valve overhaul and repair, valve diagnostics, Execution, service, installation, commissioning, About the Project: COMPRESSOR STATION maintenance engineering. The new compressor station has been constructed at Caspian Sea, Azerbaijan modification and inspection services designed to General information: Support solutions for the full life maximize uptime and optimize assets life cycle. Caspian Sea Guneshli Deep Sea Water Platform No # 4 About the Project: cycle of valves. in 2012. The purpose of the gas compressor station is to The new compressor station has been completed collect low-pressure gases and transport it to the suction with main equipment of 8 gas turbine drive centrifugal of BCS-2 at Oily Rocks. The completed project consists of compressor units, consisting of 4 (3 operational + 1 the establishment of two (2) Siemens SGT400 twin shaft spare) first stage (LP) and 4 (3 operational + 1 spare) gas turbine compressor drivers, two (2) Siemens STC-SH second stage (HP) units as well as gas dehydration unit KEY COMPLETED PROJECTS driven units gas compressor units and two (2) Siemens and all associated process equipment with output of STC-SV driven units gas compressor units. 3 mln.m3/day and working pressure of 12,5 MPa.

AMMONIA & UREA COMPLEX Sumgayit, Azerbaijan Scope of works: PIPELINE PROJECT FOR CEMENT PLANT Civil, building, piping, steel structural, painting, insulation, Baku, Azerbaijan equipment, erection, HVAC, electrical and instrumentation. Scope of works: Scope Description: Engineering and Design of Pipe Line (8 km “530x8mm 3 Compression Excavation 218,915.00 m dia.” + 0.33 km “325x10mm dia.”) and Internal 3 Backfilling 146,548.00 m Cement Plant Area (in accordance with SNIP&GOST Rebar approx. 6,000.00 Ton Standards), Supply of Pipes, Pipeline Construction 3 Concrete approx 65,000.00 m Activities, Automatic Gas Distribution Pressure 2 Road & Pavement (Asphalt) 43,299.00 m Reduction Station Construction and Erection Activities, 3 Road & Pavement (Concrete) 4,960.00 m Equipment Erection Works 10,631.00 Ton Obtaining Governmental Approvals for the Pipeline and 2 BUILDINGS (5 ea) 6587 m E & I Cable Pulling Works 1,078.00 km Automatic Gas Distribution Pressure Reduction Station, 2 Structural Steel Erection 5,958.00 Ton Painting Works 125,753.00 m Commissioning Activities of Facilities and Gas Pipeline. 10 Piping Works 348,873.00 DI Insulation Works 58,353.00 m2 11 12

ABOUT THE COMPANY PERFORMANCE FINANCIAL composed oftheoffshore welldrillingservicesrendered toitscustomers 11 million$andSOCAR-AQS intheamountof330million $.RevenuegeneratedbySOCAR-AQS ismainly 3 from 2018 2 the 1 Revenue fromconstruction contractsfor2018comprises oftherevenuegeneratedbyProkon intheamountof The indicateddataincludestheentire NobelOilServices(UK)LimitedasaGroup.Formoredetailedinformation on Reason forsharpincreaseinfiguesbetween 2017and2018duetorecognitionofSOCARAQSrevenueassubsidiary company’s financialoperations,please visithttp://www.nobeloil.com/assets/Site_18/files/Report2018.pdf Income Sale ofGoodsandOther Provision ofServices9,9 Rental Income19,3 Revenue 39,9 Construction Contract 2016 8,8 REVENUE BY BUSINESSAREA,mln$

77,9

REVENUE, mln$

Income Sale ofGoods 2016 Revenue 62,6 Construction Contract Provision ofServices16,7 Rental Income15,5 106,7 1,9 2017 1

2017 andOther

2 2018 382,9 ConstructionContract ProvisionofServices12,7 RentalIncome0,02 Income Sale ofGoodsandOther Revenue 34 3 2018 28,6 1,5 while makingapositive contribution and constructionservices company into aninternationalengineering sustainable development istogrow The Company’sgoalin the fieldof we identifyandappropriately manageriskandopportunities. doing thisrightisthekeytobeingagreat companyandhelpstoensure in ourdecisionmakingprocesses across ourbusiness.Webelievethat upon our ability tobalance economic, social and environmental issues Our sustainabilityorlong-termfuture as asuccessfulbusinessrelies Nobel OilServices/SustainabilityReport2018 governance andsocialresponsibility. and environmental safety, corporate following standards ofindustrial of thecountriesitspresence, and to thesocial-economic development APPROACH OUR

13 APPROACH SUSTAINABILITY SUSTAINABILITY Nobel Oil Services / Sustainability Report 2018 MANAGEMENT SYSTEM MISSION & VALUES VISION, NOBEL OIL SERVICES SUSTAINABILITY PILLARS

PEOPLE ENVIRONMENT COMMUNITY PROFESSIONALISM

STRUCTURE OF THE Operational management of VISION

APPROACH SUSTAINABILITY MANAGEMENT sustainable development is carried Our vision is to be our customers’ primary choice and most trusted partner, SYSTEM out by specialized departments in all our business lines through successfully delivering the best services with within Nobel Oil. All department the passionate and active engagement of our people. The direction of activities in the heads regularly meet with the general field of sustainable development director and submit monthly reports is carried out by the Nobel Oil to review and discuss implemented management at various levels. activities, improvements, and tasks. MISSION SUSTAINABILITY SUSTAINABILITY Competence of the Board of In subsidiary companies of the Our mission is to deliver superior services and solutions with quality-driven Directors includes strategic Group, these issues are managed processes in a safe, efficient and environmentally responsible manner. management of issues related by company executives. Companies to activities in the field of within Nobel Oil group can develop sustainable development, as well their sustainable development VALUES as consideration and approval of documents that consider the industry documents of the highest level. specifics of their activities. SAFETY QUALITY We conduct our business according We assure a quality component to the highest standards of social, and quality control service of the Our objectives in the field of sustainable development include: environmental, and safety practices. Company. We comply with all relevant We are committed to being a good quality standards and regulations. • improving corporate governance • ensuring the safety of our corporate citizen. Our top priority is on system; employees, contractors and public the health, safety, the security of our INTEGRITY • creating an effective and during carrying out activities of the workforce protection of assets, and We are honest with others and transparent system of interaction Company; the environment. ourselves. We meet the highest ethical with our stakeholders; • minimizing our negative impact on standards in all business dealings. We • promoting personal growth and the environment; ONE TEAM do what we say we will do. We accept professional development of our • promoting rational use of natural As an international company, we value responsibility and hold ourselves employees; resources; and respect the uniqueness of the accountable for our actions and • promoting social-economic • introducing innovation in all areas of cultures in which we work. Wherever inactions. development of regions of the Company's operations. we operate, we have an inclusive presence; work environment and embrace a EXCELLENCE diversity of people, ideas, talents, and We strive for excellence in what we do, experiences. We aim to build a healthy aiming for a high level of performance environment and work as one team. and operational efficiency. 14 15 16

ABOUT THE REPORT for theCompanyaswellcontributionswemadetothem. solutions intheoil&gasindustry. Beloware themostsignificantSDGs of theSDGsthrough providing reliable andsustainabletechnological Company’s capabilitytodirectly impactandaccelerate theachievement best benefitfrom ourmeaningfulcontribution.Weremain aware ofour affected byouroperational activitiesinorder toidentifyareas thatcould into effect.In2018,NobelOilworkedtoidentifytheSDGsthatare most to maintainthewell-beingandpreservation ofourplanetofficiallycame In 2016,the17UNSustainableDevelopmentGoals(SDGs),designed DEVELOPMENT GOALS THE UNSUSTAINABLE • • • • • • • • • • • • • centage ofexpensesonlocalsuppliers • • • • • • Effective pr in r Compiling withlocaland internationalrulesandlaws Effective managementof waste Incr Incr Use ofcleanandenvir Implementing actionstodeveloplocalsupplier and disabledpeople Maintaining employmentamongtheyounggeneration Employee evaluation Use ofener Encour Effective pr Collabor of humanr Education, developmentandpr Health safetyofemployees Pr T Local employment Per ransparent taxpayment otection ofemployeesandstakeholders from accidents elations withtheprotection oftheenvironment easing thetechnologicalpotentialofourenterprises easing efficiencyintheuseofresources age rational waterusageamongemployees ation withhigheducationalinstitutions esources oject management oject planning gy-efficient technology onmentally friendlytechnologies eparation s Our companyperfectsthe who grant ustheirtrustinreturn. business withourstakeholders, maintain transparency inconducting and associates.Westriveto maintaining thetrustofourpartners is essentialforwinningand trustworthy businesspartner Our reputation asanhonestand Nobel OilServices/SustainabilityReport2018 GOVERNANCE STRUCTURE GOVERNANCE STRUCTURE General Meeting of Shareholders management of Directors Group Board CEO growth. necessary conditionsforsustainable competitive advantagesandcreate effective governance,enhanceour working inthisdirection toincrease practices. Weintendtocontinue legislation, plusinternational line withthelocalandinternational corporate governancesystemin and Compliance and Compliance APPROACH Committee Committee Ethics Ethics HSE HSE OUR

17 GOVERNANCE GOVERNANCE 19 , Member , Member , Member , Member , Chairperson and , Chairperson SYSTEM

3 cial Officer, Member cial Officer, cial Officer, Member cial Officer, ating Officer, Member ating Officer, ating Officer, Member ating Officer, ON GD oup Legal Manager, Member oup Legal Manager, oup HSE Lead, Chairperson and oup HSE Lead, Chairperson oup HR Manager MANAGEMENT MANAGEMENT Secretary Compliance Officer Chief Executive Officer Chief Oper Chief Commer Chief Financial Officer Gr Chief Executive Officer Chief Oper Chief Commer Chief Financial Officer Gr GLENSOL GD PROK Gr Secretary • • • STRUCTURE AND MEMBERSHIP STRUCTURE AND be comprised ofThe Committee shall below members: • • • HSE COMMITTEE • • • • • The HSE committee supports the HSEThe HSE committee supports the management system in fulfilling its about occupational responsibilities as well as the industrial and safety, taking into protection, environmental legislation and account the relevant of corporate the highest standards governance. The committee includes a voting authority and with five members one member without authority. STRUCTURE AND MEMBERSHIP ofThe Committee shall be comprised below members: • • • ocedures ogram of ethical and ogram ation and resolution of any ation and resolution omotion of a company culture egulations; that encourages compliance with that encourages of the standards and the regulations ethical conduct; Consider the understanding issues regarding of the of all aspects of the program ethical and legal compliance; Effective implementation of risk management, audit and compliance issues by the company; Implementation of the compliance system under the laws and r Ensuring compliance of the company's policies and pr Assistance in the development, of implementation and operation an effective pr legal compliance; Pr with the local legislation and to various compliance responding risks. Detailed information is given in the HSE section • • • • / Sustainability Report 2018 Report / Sustainability Oil Services Nobel CHIEF EXECUTIVE OFFICER Officer provides The Chief Executive management of the operational and acts company’s activities of its competence, within the scope established by the Nobel Oil company regulations. ETHICS AND COMPLIANCE COMMITTEE an The company has established Ethics and Compliance Committee. five The committee is composed of with the voting authority members and one member without the voting the right. The primary function of Committee is to monitor and resolve within ethical and compliance issues including aspects of the company, the following nature: • • 3 o improve the preventive measures the preventive o improve o conduct in-depth strategic analysis o conduct in-depth strategic HSE system – the o improve T T - the strategy and develop future with McKinsey decision to collaborate was made; T the establishment of a committee for of the entire HSE and reorganization system was approved; and detect cases of bribery – the of ISO 37001 anti- introduction was corruption management system also decided.

governance, corporate finance, risk governance, corporate HSE, as well as criticalmanagement and of the industry. knowledge and expertise • • WITH THE COMMUNICATION BOARD OF DIRECTORS Our management and the Board and open transparent encourage communication with shareholders, parties. employees and all interested During the reporting year, the Board the Board year, During the reporting Oil has made of Nobel of Directors atseveral crucial decisions aimed thethe company’s advancement in field of sustainable development. •

EXECUTIVE NON-EXECUTIVE The board of directors is balanced in of directors The board the key competencies terms of retaining work. The necessary for practical vast accumulated experience and members knowledge of the board enable them to deliver optimal solutions at any time. With extensive experience in members the private and public sectors, possess skills of directors of the board management, corporate in strategic GENERAL MEETING OF SHAREHOLDERS meeting of shareholders The general Nobel Oilof the private company is the supreme Services (UK) Limited which the company, governing body of makes critical decisions on the most in role The shareholders’ vital matters. the company’s management includes and auditors, appointing directors as well as ensuring that the current meets the management structure standards. required BOARD OF DIRECTORS was formed based of Directors Board the Nobelfrom received on proposals of Directors Board Oil shareholders. management overall carries out general of the company’s activities. Their duties include setting the strategic managing goals of the company, their implementation, overseeing business management and informing The main of their direction. shareholders are of Directors activities of the Board governed by the legal and regulatory documents, legislative authorities and meeting of shareholders. by the general has one executive and two The Board non-executive members. MANAGEMENT MANAGEMENT SYSTEM

GOVERNANCE 18 Nobel Oil Services / Sustainability Report 2018 RISK BUSINESS MANAGEMENT ETHICS AND COMPLIANCE ETHICS Our management pays special attention other regulatory legal acts, documents, BUSINESS ETHICS nationality, sex, origin, age, religion, and to issues of risk coordination to provide methods and procedures such as Ethics remains an integral part of our any other grounds, as well as workers’ a reasonable guarantee of achieving regulations, standards and guidelines, business. The company’s policies right to associate with any public our strategic goals, which allows for as well as corporate culture norms and and documents were developed organizations of their choice. the timely identification, analysis and actions taken by management and in accordance with the UK and prevention of possible threats and employees of the Company, aimed local legislation and government We actively encourage our employees losses. at providing sufficient guarantees for authorities, as well as the best and other interested parties to report achieving company goals and solving international practices for the Code any actions that are not consistent Our company considers the risk problems. of Conduct and Business Ethics. Our with human rights and fair labor management system as an aggregation Code reflects the commitment of our practices and provide the necessary of interrelated organizational measures This whole aggregation aimed at employees to high ethical principles mechanisms for their appeal. and processes, organizational supporting our management and of business conduct and includes a In 2018, no appeals and complaints structure, local regulatory acts and employees in making critical decisions. set of universal laws and business related to discrimination and violation standard behavior and interaction of of human rights in the workplace were employees among themselves, their received by the Company. business partners and stakeholders. NON-DISCRIMINATION Training and Communication Our business ethics not only defines Our company conducts briefings the standards of ethical behavior in

GOVERNANCE and training for our employees and relations with our business partners suppliers regularly. We aim to ensure but also implies our commitment that all our employees are made to the principles of sustainability, aware of the relevant functional equality of opportunity and non- channels for issue reporting. Each discrimination. We undertake employee of the company may refer the necessary efforts to enable to the business ethics hotline if they the personal development of our believe that they have witnessed a employees and maintain their social violation of the Code or if they have awareness by supporting them in been made aware of such conduct. volunteering for appropriate social and community initiatives.

Nobel Oil maintains policies and ETHICS & COMPLIANCE HOTLINE procedures that allow our HR http://www.nobeloil.com/contact-us.aspx personnel to hire, develop and retain employees based on job descriptions, regardless of their gender, race, Monitoring Effectiveness nationality, religion, language, social In the reported year, the list of origin, financial status, political or internal procedures and documents other beliefs. The HR Department was revised in coordination with the has overall responsibility for this conducted external audit, as well policy and maintains the reporting as with the implementation of ISO and monitoring procedures. All senior 37001:2016. The key changes were managers, managers and employees made regarding the improvement of are required to comply with the the anti-bribery system. aforementioned requirements of non- discrimination. HUMAN RIGHTS Our company guarantees equality of Employees are expected to conduct 20 rights and non-discrimination based on themselves professionally. 21 Nobel Oil Services / Sustainability Report 2018 ANTI-CORRUPTION CONFLICT AND ANTI-BRIBERY OF INTEREST AND COMPLIANCE ETHICS We do not tolerate any form of bribery management system abuse or harassment of employees, ISO 37001:2016. The standard our customers or our contractors, certification enables the company to suppliers, visitors, government apply certain measures that can serve officials or any other person we deal as the basis for the integration of a with. Intimidation, harassment, racist control system designed to advance remarks, discriminating conduct, risk management in bribery cases. inappropriate language, verbal aggression, physical aggression, Training and Communication threatening behavior, insults or sexual Anti-corruption communication and ETHICS aggression are considered serious trainings serve as the key controlling acts of misconduct which will not be elements. The company regularly tolerated and will lead to disciplinary conducts trainings for our employees action and/or dismissal. and hired workforce. The Company shall require all of its employees to ANTI-CORRUPTION comply with the relevant policy, and AND ANTI-BRIBERY shall communicate to employees Corruption is globally regarded the key principles, requirements as one of the major economic and punitive consequences of non- phenomena. Our company assigns compliance. Special training programs great significance to the prevention aimed at preventing bribery are carried The company recognizes and respects INFORMATION DISCLOSURE and combating of corruption and and updated regularly to take into the diversity and importance of the Information transparency is one of demonstrates strict compliance account any changes in the law. off-duty goals and interests of its our main principles of corporate with the local and British legislation. employees. Nevertheless, the company governance. Our company promptly We are subject to and will abide by cannot remain neutral in cases where, informs stakeholders about the

AND COMPLIANCE the UK Anti-Bribery Act 2010, US During the years 2016-2018, as a result of personal, family or other significant events in its business. Foreign Corrupt Practices Act 1977, 500 employees were involved circumstances, an employee of the A special part of the corporate Convention Combating Bribery of in anti-corruption trainings. company loses or may lose loyalty and governance system is attributed to Foreign Public Officials in International objectivity about the company. The information openness and financial Business Transactions 1997, The resulting conflict of personal interests transparency, combined with the United Nations Convention against The Company has implemented with the interests of the company preservation of the company’s Corruption 2003, ISO 37001:2016 a clear and accessible procedure may exert a negative impact on the interests in the protection of trade Anti-Bribery Management System and for reporting. The purpose of company’s effectiveness. Therefore, the secrets and confidential information. the anti-bribery and anti-corruption this procedure is to promote the company is taking action to prevent the You can find the latest news, financial laws of the countries in which we implementation of the ‘Reporting occurrence of such conflicts. indicators, statements and other operate or conduct our business. Corruption’ and ‘Raising Concern’ useful information of the Nobel Oil Policies and procedures have been principles by providing methods of The company has a control procedure Group on our company website. The established to prevent, detect, report informing employees and interested in place to ensure the prevention of website also showcases regulatory and investigate actual or suspected parties about actual or suspected abuse of the official position and the documents for our corporate cases of bribery and corruption. cases of bribery, corruption or occurrence of conflicts of interest. governance system. Directors and employees are required inappropriate behavior. By adopting Each employee submits an annual form to abide by these laws and Company this procedure, the Company follows based on which the estimated risk of policies and procedures governing the best corporate governance conflict is assessed. anti-bribery and anti-corruption. practices that serve to demonstrate its operational efficiency as an INFORMATION DISTRIBUTION CHANNELS: In 2018, to improve the preventive addition to other internal controls and detection measures for aimed at preventing any violations www.nobeliol.com linkedin.com/company/nobel-oil-services-uk-ltd/ facebook.com/Nobel.Oil.Services/ potential bribery cases, a decision and minimizing the risk of corruption, twitter.com/NobelOil 22 was made to introduce an anti- fraud or other misconduct. 23 Nobel Oil Services / Sustainability Report 2018

OUR APPROACH RECRUITMENT, SUCCESSION PLANNING AND DISMISSAL HUMAN RESOURCES Nobel Oil’s staff remains the 2018 results Following our policy of staff employee in written about the most important stakeholder and • Based on the adopted SOD matrix, recruitment and retention, we decision. If employment continues, a key factor in the successful and new documents were revised and formulated a culture that reflects the employment contract shall be sustainable development of our prepared following the company's values, goals and ambitions of renewed for a definite period. company in the long term. We strive needs and requirements; our company's employees. Our to form a stable team of qualified, • During this period, a training and recruitment team understands the Cases not depending on the will of loyal and motivated employees who development plan was developed nature of the skills and talents that employee and/or employer are committed to the goals of the and approved; are needed in our industry for each If employment is terminated on the company and are proud of their work • The process of creating a CV line of business. We employ workers reasons not depending on the will in it. Securing the best talents, as database covering all companies of using a relevant of methods. of employee and/or employer (i.e. well as providing high-quality care the Nobel Oil Services Group was death of employee, his/her disability, and opportunities for development launched; Vacancy placement employee is called to military for our employees are considered • In our business units, a labor Our company regularly posts service or sentenced to prison) the to be among our company’s top demand analysis was conducted vacancies on relevant websites and employment will be terminated. priorities. The quality of human by the internal audit. A plan for the channels. Anyone interested in a job Labor Code of Azerbaijan Republic capital remains a critical factor in the optimization and provision of labor, can receive information about the covers the factors that affect development of our company and its as well as recommendations on the application and selection process employees who will be terminated in regions of presence. distribution of work, was developed and apply for a vacancy through these circumstances and details the based on the obtained results. an online portal. In 2018, 100 open guidelines for termination. Our workforce vacancies were filed with 3945 We value our employees and work Plans applications, from which 16 were Further development of a to ensure that they have everything • Improvement and upgrade of hired after passing the recruitment Competency Framework they need to build an excellent the performance management procedure following the rules of our The aim of the project is to: profile and offer qualified service to process; company. • Facilitate the recruitment and our clients. We work with a diverse • Implementation of a new grading selection process of employees team of professionals, who reflect system; CV database with a strong fit for the role, as well the interests of our clients and • A “How to live Values” training Within the reporting period, the as the organization; communities in which we operate. project designed to boost the company has implemented an • Set performance expectations and To retain talents, we offer inclusive promotion of Nobel Oil's values; integrated CV database system. The evaluate employee contributions HUMAN RESOURCES benefits and development programs • Further development of a use of the system helps the company objectively; for our employees, including Competency Framework; to select specialists of varying • Expedite employees to enhance competitive salaries, careers, job • Realization of paid summer degrees from different fields in a their performance and increase activities, trainings and leadership internship program short period without loss of time. their level of work satisfaction; development. • Recruitment for HAOR Project • Map an employee’s professional • Performance management Termination and redundancy development and further career • Establishment of project-based Expiration of Employment planning; KPIs; Contract • Assess ‘competency gaps’ • Technical skills development A term employment contract may be in individuals and teams and trainings. terminated upon its expiration by any provide effective inputs for party of employment. HR Department creating modules for increased will notify Department Manager development and training about it 40 calendar days prior to resources. expiration date. Department Manager should confirm his/her decision to REGULATORY FRAMEWORK FOR RELATIONS BETWEEN THE COMPANY continue or terminate employment AND ITS EMPLOYEES one month prior to expiration date. The Constitution of the Republic of Azerbaijan Once the decision of termination UK Legislation System and Labor Code of the Republic of Azerbaijan has been confirmed by Department 24 Manager, HR Department will notify 25 Nobel Oil Services / Sustainability Report 2018 PERSONNEL PERSONNEL PROFILE PROFILE HUMAN RESOURCES

2017 2018 BY AGE

47 71

Male 80% Female 20% Male 83% Female 17% Under 30 30-50 50 and over NEW HIRES EMPLOYEE TURNOVER 36

3

Male Female 23% 17%

2017 2018 BY AGE 2017 2018 BY AGE HUMAN RESOURCES

38 44 323 363

Male 59% Female 41% Male 70% Female 30% Under 30 Male 93% Female 7% Male 93% Female 7% Under 30 30-50 30-50 50 and over 50 and over NEW HIRES NEW HIRES EMPLOYEE EMPLOYEE TURNOVER TURNOVER 19 4 314 8

Male Female 30% 32% Male Female 17% 21% 26 4As the company primarily operates in the field of construction, the indicators are provided in the form of an annual average 27 Nobel Oil Services / Sustainability Report 2018 REMUNERATION INTERNAL COMMUNICATIONS AND MOTIVATION SYSTEM AND FEEDBACK SYSTEM HUMAN RESOURCES One of the main spheres of HR’s activities is the motivation of our employees. Our company aims to preserve and increase labor productivity by strengthening the motivation of our staff in the working space. We offer a competitive salary, the level of which is much higher than the average minimum wage in the republic. The company and its subsidiaries operate under a time-based and piece-rate payment systems and offer additional bonus rewards. We constantly monitor the market level of wages in the context of professional categories. On this basis, depending on the financial condition of the Company, the issue of increasing wages for particular subsidiaries and professional categories is considered annually.

Compensation and Benefits and setting new targets, while the end Our employee motivation system of year evaluation should define pay boasts a wide range of benefits and increases, bonuses, promotions, and compensations. In this area, we pay training needs. great attention to issues that affect Performance management is the quality of life of our workers. Our concerned with the following: benefits and compensation packages • Performance advancement – in order include voluntary medical insurance, to achieve corporate and personal temporary disability allowance, goals; occupational accident insurance, • Personal development – to give a social insurance, as well as financial chance to an employee to attain aid, paid leave (for example, parental, personal goals; medical and additional pay), rewards • Networking and connection – and benefits for work and trainings. The to establish mutual understanding, package is available in Nobel Oil and all information exchange between of its subsidiary companies. Employees managers and employees and in Nobel Oil Group are paid 100% salary determine expected results. while taking a vacation during any month. Implementation of a new grading An important role in creating a One of the important elements of the HUMAN RESOURCES system favorable environment for effective internal communications system is Performance appraisal A single grading structure based on organizational teamwork belongs our “open door” policy, which allows An employee performance appraisal analytical job evaluations will provide to a highly developed system of all employees to directly contact creates an opportunity for effective fairness and a possible defense to equal internal communications. Employees management about their concerns. feedback and goal setting, making pay claims. should receive accurate information decisions on benefits, salary growth about corporate events that affect Staff Satisfaction Survey and duties extension. Employees This project allows us to empirically their rights and obligations and be Staff satisfaction, as the basis of should be informed about performance demonstrate employee's rationale for able to convey their perspectives high labor motivation, is an important expectations, performance evaluation offering different levels of pay. In the and problems to the company aspect of our sustainability and criteria, and what measures/benefits frame of this project, it will be possible managers. To ensure that these development. We conduct annual follow different levels of performance. to determine the worth or value of one standards of effective communication employee satisfaction evaluations and job about, or compared to another are met, we have created a system take appropriate measures based on A performance evaluation process is regardless of the characteristics or for informing employees about the survey results. to be held every year (or half-year at experience of the specific individual the goals, development prospects the sole discretion of the Company). occupying the position at any given time. and current state of affairs in the According to the 2018 survey, 80% The annual evaluation process is linked Company. Through the information of our employees were satisfied with to the financial year to be a part of this This project involves determining the means available at Nobel Oil and their workplace conditions. In the process. Performance appraisal held in level of complexity, decision-making, its subsidiaries, all employees are future, we plan to develop a strategy for the middle of the year is primarily for the and skills required for each job, which is informed about the events and strengthening employee engagement 28 exchange of ideas on goal achievement then categorized accordingly. developments in the Company. through a satisfaction survey. 29 Nobel Oil Services / Sustainability Report 2018 TRAINING AND DEVELOPMENT ENGAGEMENT COMMUNITY Our investment in the training and and distance learning in universities. As a company that primarily operates within the energy sector, development of our staff is another We intend to further develop our Nobel Oil Services (UK) Limited is aware of its social, economic and area of our active operation. We system of continuous corporate environmental impact. To embrace responsibility for our company’s consider high-quality training a trainings by developing a actions and encourage a positive contribution to society, we strive strong basis for the success of comprehensive perspective training to support sustainable development and promote various social our employees, as well as for the program for various groups of initiatives in Azerbaijan. Our activities include promotion of business success of our business. Employee employees of the Company and its training remains a key factor in the subsidiaries. relations, sponsorship, support for empowerment, education and minimization of risks associated with cultural heritage. unqualified employee actions. Project “How to live Values” This project aims to support the KEY PROJECTS Based on our annual Training and company employees in the decision- Development plans, we conduct making process, clarify the clients and several development programs while potential partners the identity of the prioritizing the previously identified company by letting them recognize training needs of particular groups what the company is about, as well as of personnel. Educational programs improve employee communication, for employees help our company motivation and engagement. to provide successful solutions for problems related to new areas of our Having a clear set of values can help activity by maintaining the required our employees understand what the level of competitiveness. Company stands for. Besides, values give them guidance for their work and Nobel Oil participated as an instructor in Financial support for the implementation of Our primary strategic partners in this a sense of security. Having a set of the “Return disabled people to the public” the documentary film “Miras” to popularize area are the training centers that have well-defined company values provides trainings and attended labor fairs for the the heritage of the Nobel brothers in the established themselves as leading a moral direction to guide employees in unemployed and disabled. history of the oil production in Azerbaijan. providers of education. Our company difficult times. In a volatile environment also uses a wide arsenal of modern of rapid technological, environmental, teaching aids, which include seminars, and societal changes, which is HUMAN RESOURCES training programs, internship programs considered as much-needed constant.

AVERAGE TRAINING HOURS SPENT EACH EMPLOYEE BY GENDER

Open training on the topic of “Employee Our Company hosted one of the AMCHAM branding” was held. meetings.

For the first time, a round table was 293.93 5.2 10 organized in the 190.1 3.5 6.8 South Caucasus and technical seminars were held on the subject of turbine Male Female Male Female Male Female 30 equipment. 31 Nobel Oil Services / Sustainability Report 2018 OUR MANAGEMENT APPROACH SYSTEM AND ENVIRONMENT HEALTH, SAFETY Our health, safety, and environmental • No business objective will take priority management system provide over health and safety; a foundation for HSE aspects • No task is so important or urgent that consideration of projects managed it cannot be done safely; by Nobel Oil. HSE Management • Safety is everyone’s responsibility; system incorporates our values and • We operate sustainably and minimize commitments which are detailed in our environmental impact. our HSE policy sections of company operations and its subsidiaries, HSE Goals: practices, and procedures and plans • Achieve zero lost time incidents; for specific project sections. • Achieve year on year reduction in Our corporate culture, supported Total Recordable Injury rates; by the HSE management system, • Promote an active health and makes HSE a key priority for Nobel wellbeing culture; Oil’s employees and stakeholders • Reduce environmental impacts and and remains an essential factor improve performance regularly. in advancing our profitability. Management System serves as our HSE Committee company’s leading measure for The HSE committee was established refining our HSE conditions, as we to increase the effectiveness of Nobel commit to continuously improve our Oil’s activities in the field of HSE. performance in this field. Currently, this unit delivers regular high-quality reviews of our HSE Providing safe and healthy working 2018 RESULTS Our industrial, occupational and issues and conditions, demonstrating

HEALTH, SAFETY HEALTH, conditions for our employees remains • OHSAS 18001 and ISO 14001 environmental safety management the high prioritization of industrial a key priority for us. We work to international standards; system operates on the basic and environmental safety issues avoid, mitigate and reduce the harm • New environmental regulatory requirements of ISO 14001, OHSAS to our partners and stakeholders. of people, communities and the documents were revised and 18001, ISO 9001, and in accordance The committee guarantees that our environment, wherever we conduct prepared following the needs of the with local legislation. The field management bodies are confident that of the certification includes the Nobel Oil is appropriately managing

AND ENVIRONMENT our business. At Nobel Oil, we strive Company; to prioritize risk management at the • Annual targets for 2019 were organizations of the Nobel Group, HSE risks, implementing plans to highest level, understanding our defined; whose activities involve major risks in continuously improve efficiency in this responsibility as a company operating • A 2019 plan was developed and the field of industrial, occupational and sphere. The HSE committee reviews environmental safety preservation. materials on operational events, as in the oil & gas industry. Our HSE approved. well as reviews the summary report on management system defines OUR POLICY5 previous HSE indicators. principles that serve the basis of our PLANS Our Board of Directors approved the business conduct. • Improvement of the management new company policy for industrial Monitoring system, the creation of a unified and environmental safety and labor The efficiency assessment of Nobel ZERO HARM management system and its protection. This policy acts as a Oil’s management system is carried out We adhere to the principle of “Zero integration in all departments; fundamental document for presenting based on annual corporate control of Harm” in all of our operations. The principle illustrates Nobel Oil’s vision • Implementation of motivational tools our company’s expertise and compliance with legal requirements and for achieving zero safety hazards, zero for employees’ compliance with commitments in the field of HSE. The corporate standards, as well as through environmental incidents and zero non- rules, e.g. a rewards system; Policy formalizes standard principles the results of the internal audit of the productive time. This vision expresses and approaches in the HSE sphere to state of the management system in all our commitment to our employees, • Introduction and implementation of customers and society as a whole, and the updated HSE Policy; ensure the continuous development structures and regular external auditing clearly articulates our priorities - to • Introduction of observation cards. of Nobel Oil’s management system for of our received certifications. Besides, set the highest standards of business industrial and environmental safety and annual inspections by government conduct. Our reliable management labor protection. agencies, as well as regular inspections system, competence and dedication to our employees remain the key elements of occupational safety measures by of our success and the foundation of our Guiding principles: our clients, play an important role in path to a Zero indicator (ZERO). • All injuries and occupational illnesses enhancing the effectiveness of our are preventable; management system. 32 5 Information for Our Policy and HSE Committee is provided for 2019 33 Nobel Oil Services / Sustainability Report 2018 HEALTH AND SAFETY ENVIRONMENT AND ENVIRONMENT HEALTH, SAFETY Our work in the field of occupational Our compаny strives to adhere to the safety and health of workers is principles of responsible conduct and SANCTION FOR NON-COMPLIANCE based on the following principles: environmental preservation in all of our WITH LEGISLATION OR REGULATORY REQUIREMENTS DURING THE • Compliance with the local legislation projects. To achieve this, Nobel Oil and REPORTING PERIOD HAS BEEN • Compliance with international its subsidiaries have clear policies and IMPLEMENTED. standards in HSE sphere regulations that applied to our work • Ensuring production and with the environment. All of the projects environmental control in the that are developed and delivered to our ENERGY CONSUMPTION, implementation of all activities customers must comply with relevant • Applying a risk-oriented approach to environmental legislation. thousand kWh the management of HSE issues • Continuous improvement of our Our company has set itself the task of labor protection and industrial safety creating an integrated management management system system for the continuous 122,4 • Developing safety culture improvement of our entire HSE 93 • Receiving constructive feedback from management system. all stakeholders. In the reporting year, we have Assessment of working conditions worked on the preparation of 2017 2018 At Nobel Oil, we work systematically environmental regulation documents to improve our employees’ workplace for 2019. Environmental passports of FUEL CONSUMPTION, tons conditions. Our main method for enterprises, greenhouse gas emission

HEALTH, SAFETY HEALTH, assessing and managing working standards of atmosphere and the conditions is a procedure regulated limits of discharged sewage were HEALTH AND SAFETY by the local legislation for workplace reassessed and presented. 16,3 Our company pays the utmost attention conditions certification and by external to the creation and maintenance of audits participation. ENVIRONMENTAL PERFORMANCE 5 11,3 Energy consumption and greenhouse AND ENVIRONMENT safe and decent working conditions, setting the priority of these issues over gas emissions are two of the most GLENSOL HAS 26 ASSESSED PLACES 8,05 8,6 any organizational and technical tasks. IN OFFICE AND 7 IN WORKSHOP AREAS harmful components affecting the The life and health of our employees, FOR 2018. global environment. Recognizing its 2017 2018 contractors, customers and all of our responsibility, our company seeks to Diesel Petrol stakeholders are the highest value to reduce these impacts by increasing us. Therefore we make great efforts Our company regularly identifies and the efficiency of its activities. We strive every year to maximize their safety. evaluates occupational conditions with to accelerate our efforts in this area The direction of our focus in the field of a high risk of injury. In 2018, these jobs by offering our customers services GHG EMISSIONS, tons CO2 labor protection and occupational safety included work carried out at height, that maximize the value of their assets remains unchanged. work in confined spaces, repair works while consuming less energy and 64,8 on rotating equipment, etc. Firstly each less emission production. We achieve 49,2 We monitor workplace conditions at of the identified high-risk jobs undergo this through the effective planning 75,8 Nobel Oil and its subsidiaries while a risk assessment, after which the best of our work and by the introduction 59,2 taking active measures to carefully methods for minimizing impact are of ecologically clean solutions. As 2017 2018 analyze the causes of incidents by determined. On this basis, plans and a service company, we are unable following necessary steps for their rules of work are developed and trained to measure the actual energy Direct emission Indirect emission elimination. In our approach to ensuring inappropriately. consumption of rented office spaces occupational and industrial safety, and remote operation locations. For we extend our principles and policies WE ARE PROUD TO REPORT THAT IN THE this reason, we estimate the energy 6As the data for Prokon is provided only for 2018, we have de- to all Nobel Oil employees, as well PAST TWO YEARS WE HAVE RECEIVED 0 consumption of our rented premises cided to combine indicators of the company’s subsidiaries in RECORDED INCIDENTS. this report. Because of this, a sharp increase in 2018 whicdas as to employees of our contracting according to the method of HSE Plan. can be observed in comparison to the indicators for 2017 34 organizations. 35 Nobel Oil Services / Sustainability Report 2018

ENVIRONMENT ENVIRONMENT AND ENVIRONMENT HEALTH, SAFETY HEALTH, SAFETY HEALTH, AND ENVIRONMENT

Water Consumption which creates difficulties in tracking Waste management WASTE, thousand m3* Our company recognizes the value our consumption and conservation We carefully and regularly monitor the of water as one of the most precious or results in the quantification of our pace of waste build-up and disposal. resources in the world. Pollution and efforts. However, in such circumstances, Total waste varies from year to year, poor water management will have the company uses the ratio of water per depending on the project portfolio. We a direct impact on the organization, employee. monitor the entire process of collecting, as well as a negative impact on the transporting and waste disposing of 4,2 environment and society. We encourage WATER CONSUMPTION, by agreeing with a highly qualified our employees to use water efficiently thousand tons company. We also actively consider and rationally for project implementation potential reuse or recycling options for purposes and regular use. During waste management. 9,7 project planning, we carefully examine the area and water resources to The company generates two main eliminate potential negative impacts and categories of waste, hazardous and 2018 0,96 deliver effective water management. 0,77 non-hazardous wastes. As it is evident Non-Hazardous Hazardous Our ability to regulate and report on from the diagram, a significant part of water consumption depends on the the waste generated in connection with office location. In most of the rented 2017 2018 company activities is non-hazardous.

space cases, we do not pay water *Wastes for 2017 were insignificant, therefore the relevant 36 bills directly and do not manage it, data for 2017 is not reported 37 Nobel Oil Services / Sustainability Report 2018

TRAINING CHAIN SUPPLY In today’s globally competitive economy, we are aware that strong relationships with our suppliers are essential to satisfying the needs of all our stakeholders.

While building cooperation with EXPENSES IN PERCENTAGE contractors, our company is always FOR 2018 YEAR striving to increase the efficiency of our supply chain management while ensuring transparency and competitiveness. Procurement is a part of our commitment to sustainability. We strive to maximize our positive economic and social contribution and minimize our environmental impact. Each year, the company depending on activity purchases a significant amount of goods and services. The purchases help our suppliers to maintain Local Vendors 96% financial stability, sustain jobs and Foreign Vendors 4% promote their development.

HEALTH, SAFETY HEALTH, Our company pays great attention THE NUMBER to delivering systematic training and OF AUDIENCES Depending on the specifics of ensuring competence regarding activity, the company applies a industry safety, environment supplier management system, which safety and labor protection for consists of several procedures

AND ENVIRONMENT all employees. Nobel Oil and suppliers governing involvement, its subsidiaries regularly hold their selection and our subsequent events to improve and develop the work with them. Our procurement necessary skills of all personnel activities are fully compliant with the and contractors in this area. 229 local legislation. Our activities primarily include Local Vendors 94,8% conducting of face-to-face 67 Supply Chain Overview Foreign Vendors 5,2% training, retraining and qualification The company’s supply chain advancement programs with most includes specialized contractors, up to date materials for our workers, 2017 2018 subcontractors and manufacturers implementing special training licensors, consultants, etc. In 2018, system for personnel working with 7 there were no significant changes dangerous equipment, as well as in the supply chain. As can be seen increasing the quality of safety- from the diagrams, the share of local related communication. suppliers in each company subsidiary exceeds 90%. Our international contractors mainly supply specific 391 equipment and reagents. Local Vendors 92,8% Foreign Vendors 7,2%

7Information about HSE Trainings audiences of Prokon is 2018 38 available only for 2018 39 Nobel Oil Services / Sustainability Report 2018 CONTENT GRI GRI STANDARDS REPORT AND INDICATORS NOTES SECTION/PAGE

GRI 102: GENERAL DISCLOSURES

Organizational profile

102-1 Name of the organization Covered, page 7 CHAIN 102-2 Activities, brands, products, Covered, SUPPLY SUPPLY and services page 7

102-3 Location of headquarters Back cover

102-4 Location of operations Covered, page 7 Preventive actions to demonstrate inconsistencies with We operate a supplier management the corporate requirements as per 102-5 Ownership and legal form Nobel Oil is a Limited Liability system that allows for a preliminary the results of our comprehensive Company qualification assessment of our assessment, are not allowed to tender. 102-6 Markets served Covered, suppliers for their compliance with page 7 corporate requirements, before The Company's plans and main 102-7 Scale of the organization Covered, engaging them in any competitive objectives: page 7, 12, 26-27 procedures. Each supplier who plans to • Improve transparency by applying conduct business with us must undergo new, adopted and improved fraud 102-8 Information on employees and Covered, the necessary verification and be able detection and prevention techniques; other workers page 26-27 to meet our company’s standards. We • Maximize value by delivering the right 102-9 Supply chain Covered, examine them for unethical practices. item at the right price at the right time; page 39-40 When performing a comprehensive • Support business continuity by audit of new suppliers, we carefully sustaining continuous supply, 102-10 Significant changes to the There is no significant changes in organization and its supply chain 2018. The changes are planned for evaluate their compliance with financial increasing leverage power in the the next years. activity, historical background, HSE market and being adaptive to market standards and ISO certifications. dynamics. 102-11 Precautionary Principle or Covered, approach page 20

The clauses on Anti-Bribery and The Company already planned to Strategy Corruption (ABC) and the Right to implement in practice Common Audit are included in contracts with Vendor Database (CVD), e-Source, 102-14 Statement from senior Covered, subcontractors and suppliers for and e-Tender common platforms. decision-maker page 2 service and product purchases. Our Through this, we will able to deploy 102-15 Key impacts, risks, Partially covered, goal is to ensure that suppliers comply the e-Procurement process under the and opportunities page 20 with internal rules and procedures to corporate office. The platforms will prevent potential risks of corruption. The spread to all group companies, which Ethics and integrity clause on the right to audit allows the increases internal productivity. 102-16 Values, principles, standards Covered, company to initiate regular inspections and norms of behavior page 15 within the supplier in case of suspicious The creation of the e-Procurement transactions and irregularities. system in common platform has already 102-17 Mechanisms for advice and Covered, concerns about ethics page 21, 23 started. The first stage of CVD is ready Additionally, we monitor our suppliers for operation; second and third tools of in a database that provides information e-Source and e-Tender are in process on their commitments and performance and planned to be launched by the 40 history. Suppliers that are revealed 2021. 41 Nobel Oil Services / Sustainability Report 2018 CONTENT GRI GRI STANDARDS REPORT GRI STANDARDS REPORT NOTES NOTES AND INDICATORS SECTION/PAGE AND INDICATORS SECTION/PAGE

GRI 102: GENERAL DISCLOSURES GRI 102: GENERAL DISCLOSURES GRI Governance Stakeholder engagement

102-18 Governance structure Covered, 102-40 List of stakeholder groups Covered, page 17 page 4

102-19 Delegating authority Covered, 102-41 Collective bargaining agree- Employees are not covered by any Not Covered page 18-19 ments bargaining agreements

102-20 Executive level responsibility Covered, 102-42 Identifying and selecting Partially covered, for economic, environmental, and page 18-19 stakeholders page 4 social topics CONTENT 102-21 Consulting stakeholders on Covered, 102-43 Approach to stakeholder Covered, economic, environmental, and social page 4 engagement page 4 topics 102-22 Composition of the highest Covered, 102-44 Key topics and concerns Covered, governance body and its committees page 18-19 raised page 4 Reporting practice 102-23 Chair of the highest Iman Gorman Chairman of the Covered governance body Board 102-45 Entities included in the con- Covered, 102-24 Nominating and selecting the The CEO is appointed by the BoD Covered solidated financial statements page 12 highest governance body of Nobel Oil 102-46 Defining report content and Covered, 102-25 Conflicts of interest Covered, topic Boundaries page 3 page 23 102-47 List of material topics Covered, page 3-6 102-26 Role of the highest Covered, governance body in setting purpose, page 18-19 102-48 Restatements This is the first Sustainability Report Covered, value, and strategy of information of the Company page 3

102-27 Collective knowledge Covered, 102-49 Changes in reporting There are no significant changes as Covered of highest governance body page 14 it is the first Sustainable Develop- 102-28 Evaluating the highest The performance of top Covered ment Report of the Company governance body’s performance management 102-50 Reporting period Covered, page 3 102-29 Identifying and managing Covered, economic, environmental, and social page 14, 18-19 102-51 Date of most recent report Covered, impact page 3

102-30 Effectiveness of risk Covered, 102-52 Reporting cycle Covered, management processes page 20 page 3

102-31 Review of economic, Covered, 102-53 Contact point for Covered, environmental, and social topics page 14, 18-19 questions regarding the report page 3

102-32 Highest governance body’s Organization’s sustainability will be Covered 102-54 Claims of reporting in Covered, role in sustainability reporting presented to highest governance accordance with GRI Standards page 3 body’s for future evaluation 102-55 GRI content index Covered, 102-33 Communicating critical Covered, page 41 concerns page 19-20 102-56 External assurance The Company plans to conduct an 102-35 Remuneration policies Partially covered, independent audit of the report in 42 page 28 the future 43 Nobel Oil Services / Sustainability Report 2018 CONTENT GRI GRI STANDARDS REPORT GRI STANDARDS REPORT AND INDICATORS NOTES SECTION/PAGE AND INDICATORS NOTES SECTION/PAGE

GRI 103: MANAGEMENT APPROACH GRI 205: ANTI-CORRUPTION GRI 103-1 Explanation of the material Covered, 205-2 Communication and training Covered, topic and its Boundary page 3-4 about anticorruption policies and page 22 procedures 103-2 The management approach Covered, and its components page 13-14 205-3 Confirmed incidents No such incidents occurred during Covered of corruption and actions taken the reporting period. 103-3 Evaluation of the management Covered, approach page 13-14 GRI 206: ANTI-COMPETITIVE BEHAVIOR

206-1 Legal actions for anti-competi- No such incidents occurred during Covered CONTENT GRI 201: ECONOMIC PERFORMANCE tive behavior, anti-trust, and monopoly the reporting period. practices 201-1 Direct economic value gener- Covered, ated and distributed page 12 GRI 302: ENERGY 201-3 Defined benefit plan obliga- Parental leave and retirement plans Covered tions and other retirement plans are applied according to the Labor 302-1 Energy consumption within the Covered, Code of the Republic of Azerbaijan. organization page 35 201-4 Financial assistance received No financial assistance was re- Covered 302-2 Energy consumption outside of We offer our customers energy-sav- Partially covered from the government ceived from the government during the organization ing initiatives through our consulta- the reporting period. tions and project management

GRI 202: MARKET PRESENCE 302-4 Reduction of energy Partially covered, consumption page 35

202-1 Ratios of standard entry level All employees are paid at least the Covered GRI 303: WATER wage by gender compared to local legally required minimum wage. minimum wage 303-1 Water withdrawal by source Covered, 202-2 Proportion of senior manage- Azerbaijani locals make up 65% of Covered page 36 ment hired from the local community all executive staff

303-2 Water sources significantly No such incidents occurred during Covered GRI 203: INDIRECT ECONOMIC IMPACTS affected by withdrawal of water the reporting period. 303-3 Water recycled and reused No water is recycled or reused at Covered 203-1 Infrastructure investments and Covered, Nobel Oil. services supported page 31 GRI 304: BIODIVERSITY 203-2 Significant indirect economic Covered, impacts page 31 304-1 Operational sites owned, leased, None of Nobel Oil operational sites Covered managed in, or adjacent to, protected covers the protected areas or areas GRI 204: PROCUREMENT PRACTICES areas and areas of high biodiversity of high biodiversity. value outside protected areas 204-1 Proportion of spending on Covered, local suppliers page 39-40 GRI 305: EMISSIONS

305-1 Direct (Scope 1) Covered, GRI 205: ANTI-CORRUPTION GHG emissions page 35 305-2 Energy indirect (Scope 2) Covered, 205-1 Operations assessed for risks Partially covered, GHG emissions page 35 44 related to corruption page 40 45 Nobel Oil Services / Sustainability Report 2018 CONTENT GRI GRI STANDARDS REPORT GRI STANDARDS REPORT AND INDICATORS NOTES SECTION/PAGE AND INDICATORS NOTES SECTION/PAGE

GRI 305: EMISSIONS GRI 403: OCCUPATIONAL HEALTH AND SAFETY GRI 305-5 Reduction of GHG emissions Partially covered, 403-3 Workers with high incidence or Covered, page 34 page 35 high risk of diseases related to their occupation GRI 306: EFFLUENTS AND WASTE GRI 404: TRAINING AND EDUCATION 306-1 Water discharge by quality and Covered, destination page 36 404-1 Average hours of training per Covered, year per employee page 30 306-2 Waste by type and disposal Covered, method page 37 CONTENT 404-2 Programs for upgrading Covered, employee skills and transition page 30, 39 306-3 Significant spills No significant spills were recorded Covered assistance programs during the reporting period

306-4 Transport of hazardous waste Covered, 404-3 Percentage of employees Partially covered, page 37 receiving regular performance and page 28 career development reviews 306-5 Water bodies affected by water No cases were detected in the Covered discharges and/or runoff reporting period. GRI 405: DIVERSITY AND EQUAL OPPORTUNITY

GRI 307: ENVIRONMENTAL COMPLIANCE 405-1 Diversity of governance bodies Partially covered, and employees page 28-29 307-1 Non-compliance with environ- We have not identified any Covered mental laws and regulations non-compliance with environmental laws and/or regulations GRI 406: NON-DISCRIMINATION

GRI 308: SUPPLIER ENVIRONMENTAL ASSESSMENT 406-1 Incidents of discrimination and We did not identify any incidents of Covered corrective actions taken discrimination during the reporting period. 308-1 New suppliers that were Covered, screened using environmental criteria page 39-40 GRI 407: FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING GRI 401: EMPLOYMENT 407-1 Operations and suppliers in No operations or suppliers in which Covered which the right to freedom of associa- the right to freedom of association 401-1 New employee hires and Covered, tion and collective bargaining may be and collective bargaining may be employee turnover page 26-27 at risk at risk were identified during the reporting period. 401-2 Benefits provided to full-time Covered, employees that are not provided to page 28 temporary or part-time employees GRI 408: CHILD LABOR

GRI 403: OCCUPATIONAL HEALTH AND SAFETY 408-1 Operations and suppliers No incidents of child labor were Covered at significant risk for incidents of identified during the reporting 403-1 Workers representation Covered, child labor period. in formal joint management worker page 19 health and safety committees GRI 409: FORCED OR COMPULSORY LABOR 403-2 Types of injury and rates of Covered, injury, occupational diseases, lost page 34 409-1 Operations and suppliers at No incidents of forced or compul- Covered days, and absenteeism, and number significant risk for incidents of forced sory labour were identified during 46 of work related fatalities or compulsory labor the reporting period. 47 GRI STANDARDS REPORT AND INDICATORS NOTES SECTION/PAGE

GRI 411: RIGHTS OF INDIGENOUS PEOPLES GRI 411-1 Incidents of violations involving No incidents were detected Covered rights of indigenous peoples during the reporting period.

GRI 413: LOCAL COMMUNITIES

413-1 Operations with local Covered, community engagement, impact page 31 assessments, and development programs CONTENT 413-2 Operations with significant There were no operations with Covered actual and potential negative impacts significant negative impacts on local on local communities communities during the reporting period.

GRI 414: SUPPLIER SOCIAL ASSESSMENT

414-1 New suppliers that were Covered, screened using social criteria page 40

414-2 Negative social impacts in the We did not identify any negative Covered supply chain and actions taken social impacts in our supply chain during the reporting period.

GRI 415: PUBLIC POLICY

415-1 Political contributions During the reporting period, Covered no political contributions have been made by Nobel Oil.

GRI 416: CUSTOMER HEALTH AND SAFETY

416-1 Assessment of the health and Partially covered, safety impacts of product and service page 34 categories 416-2 Incidents of noncompliance No incidents were detected Covered concerning the health and safety during the reporting period. impacts of products and services

GRI 418: CUSTOMER PRIVACY

418-1 Substantiated complaints No incidents were detected Covered concerning breaches of customer during the reporting period. privacy and losses of customer data STN Business Center, 6th floor GRI 419: SOCIOECONOMIC COMPLIANCE 10Q Alasgar Gayibov st, Baku, AZ1029, Azerbaijan Office: +994 12 310 44 44 419-1 Non-compliance with laws and No incidents were detected Covered E-mail: [email protected] regulations in the social and during the reporting period. Website: www.nobeloil.com 48 economic area