Sustainability Report 2014 About the Sustainability Report 2014 Through this report, we account SINCE 2008 WE HAVE PUBLISHED OUR ANNUAL SUSTAINABILITY for the way the Company manages its REPORT (SR) WHERE WE SUMMARIZE THE MAIN RESULTS AND ACTIVITIES CONCERNING OUR ECONOMIC, ENVIRONMENTAL activities, offering transparency and AND SOCIAL PERFORMANCE. THIS REPORT IS BASED ON THE compliance with best practices and GRI GUIDE 3.1 GUIDELINES, WITH ITS OIL AND GAS SECTOR operational excellence, which nowadays SUPPLEMENT, AND ON THE REPORT GUIDE “OIL AND GAS are critical to share with and communicate INDUSTRY GUIDANCE ON VOLUNTARY REPORTING”, JOINTLY to all our stakeholders. DRAWN UP BY IPIECA, API AND IOGP IN ITS SECOND VERSION. THE SR 2014 SCOPE COMPRISES THE AREAS OPERATED BY PLUSPETROL, WITH A DESCRIPTION OF THE ACTIVITIES CONDUCTED IN ANGOLA, ARGENTINA, BOLIVIA, COLOMBIA, PERU AND VENEZUELA. IT SHOULD BE NOTED THAT THE The Sustainability Report REPORTED QUANTITATIVE PERFORMANCE INDICATORS INCLUDE contributes with knowledge and statistic, INFORMATION FROM AREAS CURRENTLY IN THE PRODUCTION PHASE, MAINLY OPERATIONS IN ARGENTINA, BOLIVIA AND PERU. which are very useful for day-to-day AS FROM THIS YEAR, ALSO THE RESULTS FOR ANGOLA HAVE business. For the company’s employees, it BEEN INCORPORATED FOR SOME INDICATORS. is a permanent consultation document, an accurate source of data. IN ADDITION TO THE ABOVE, THIS YEAR WE MADE PROGRESS IN THE DEVELOPMENT OF AN INTEGRAL PROCESS OF ANALYSIS FOR THE IDENTIFICATION AND PRIORITIZATION OF OUR STAKEHOLDERS, AS WELL AS IN THE MATERIALITY ANALYSIS. LIKEWISE, WE MANAGED TO IMPROVE OUR PERFORMANCE INDICATORS BOTH IN QUANTITY AND QUALITY, REACHING 49 The chapters I’m more interested INDICATORS IN THE GRI GUIDE 3.1. THE PROGRESS RELATED TO in are those related to the Environment and THE MATERIALITY ANALYSIS AND THE NUMBER OF INDICATORS Community, which show how we can work REPORTED ARE EVIDENCE OF OUR COMMITMENT WITH SUSTAINABLE MANAGEMENT AND ITS COMMUNICATION TO OUR in a responsible way, protecting the STAKEHOLDERS. environment and people. DURING THE PREPARATION OF THIS REPORT SEVERAL AREAS AND COLLABORATORS PARTICIPATED WITHOUT WHICH ITS PUBLICATION WOULD NOT HAVE BEEN POSSIBLE. WE ARE ESPECIALLY GRATEFUL TO EVERYONE FOR THEIR EFFORT AND Our people’s opinion in the disclosure process of the 2013 Sustainability Report COMMITMENT. 1. Global Reporting Initiative. https://www.globalreporting.org/ 2. International Petroleum Industry Environmental Conservation Association. http://www.ipieca.org/ 3. American Petroleum Institute. http://www.api.org/ 4. International Association Oil & Gas Producers. http://www.ogp.org.uk/ LETTER FROM THE CEO THE INCREASING ENERGY DEMAND ADDED TO THE COMPLEX SOCIAL, POLITICAL AND ENVIRONMENTAL SETTINGS IN WHICH THE OIL AND GAS BUSINESS ARE DEVELOPED AND THE GROWING INTEREST OF STAKEHOLDERS REQUIRE AN IMPORTANT COMMITMENT WITH THE RESPONSIBLE DEVELOPMENT OF THE ACTIVITIES FROM OUR INDUSTRY. AND IT IS NOT AN EASY COMMITMENT. WE WORK IN AN INDUSTRY AT THE CENTER OF SOCIAL ATTENTION, WHICH REQUIRES THAT WE IMPLEMENT BETTER PRACTICES EVERY DAY, WHILE OBSERVING RULES THAT HAVE BECOME MORE RESTRICTIVE, WHICH HAS CIVIL SOCIAL ORGANIZATIONS MONITORING OUR PERFORMANCE, AND WHICH IS HIGHLY COMPETITIVE DUE TO THE ACCESS TO RESERVES. NOTWITHSTANDING, FOR MORE THAN 35 YEARS, PLUSPETROL HAS BEEN ABLE TO ADDRESS THOSE CHALLENGES WHILE CONTINUING TO GROW. AND WE ARE CONVINCED THAT WE WILL CONTINUE ON THIS TRACK, HELPING COVER THE INCREASING ENERGY NEEDS, AND ACTING IN AN ECONOMIC, SOCIAL AND ENVIRONMENTALLY RESPONSIBLE WAY, INTEGRATING ALL THESE ASPECTS IN THE BUSINESS DECISION-MAKING. WITH THIS SPIRIT, PLUSPETROL PRESENTS ITS SEVENTH SUSTAINABILITY REPORT, IN WHICH WE DESCRIBE OUR PERFORMANCE DURING 2014 IN DETAIL. IN THIS PERIOD, WE HAVE DECIDED TO CONSOLIDATE AND BOOST OUR SUSTAINABILITY AND OPERATIONAL EXCELLENCE CORPORATE LETTER FROM THE CEO STRATEGIES, WITH THE HOPE OF BEING ACKNOWLEDGED REGION-WIDE FOR OUR HIGH OPERATING STANDARDS AND A STRONG COMMITMENT TO RESPONSIBLE DEVELOPMENT. A HIGHLIGHT DURING THIS YEAR HAS BEEN THE 10-YEAR CELEBRATION FOR OUR ACTIVITIES IN CAMISEA, THE PERU’S MOST IMPORTANT ENERGY PROJECT, WHICH HAS DRIVEN THE COUNTRY´S GROWTH THROUGH THE INCORPORATION OF NATURAL GAS AS ALTERNATIVE CLEANER FUEL IN THE DOMESTIC MARKET. ALL THIS LED TO CHANGES IN THE COUNTRY´S ENERGY MATRIX, THUS REDUCING EMISSIONS AS A CONSEQUENCE OF ITS USE. FINALLY, I’D LIKE TO UNDERLINE THAT IN THIS NEW EDITION OF THE SUSTAINABILITY REPORT, WE HAVE IMPROVED THE DATA RECORD SYSTEM FOR THE PRESENTED INDICATORS, THUS OPTIMIZING THE DATA COLLECTION FILES AND TRAINING THE STAFF RESPONSIBLE FOR THE INFORMATION IN THE DIFFERENT OPERATION UNITS. WE INVITE YOU TO LOOK OVER THE PAGES OF THIS SEVENTH SUSTAINABILITY REPORT, WHICH DESCRIBES THE 2014´S MOST OUTSTANDING MILESTONES OF 2014 REGARDING SOCIAL, ENVIRONMENT AND ECONOMIC MATTERS WHICH HAVE AN IMPACT ON OUR OPERATIONS AND OUR MAIN STAKEHOLDERS. Steven G. Crowell President and CEO 01 02 06 26 ABOUT THE LETTER FROM ABOUT OUR SUSTAINABILITY THE CEO PLUSPETROL PEOPLE REPORT 2014 Company Profile Human Capital Management Governance Training and Our Corporate Strategy Development Stakeholders Benefits Supply Chain Health Activities Communication Highligths 34 64 88 98 ENVIRONMENT COMMUNITY SAFETY GRI INDEX Environmental Management with Safety and Operations Opinion Poll Management the Communities Integrity Management Environmental Social Investment Safety Performance in Numbers Participatory Other Actions Performed Processes Energy Efficiency & Climate Change Indigenous Communities Environmental Impact Management Community and Value Chain Natural Resources Management ABOUT PLUSPETROL PLUSPETROL IS COMMITTED TO DEVELOPING ITS ACTIVITIES PERMANENTLY IMPROVING ITS PRACTICES, PURSUING EXCELLENCE IN EACH OF ITS PROCESSES TO MEET ITS LONG-TERM GROWTH AND SUSTAINABILITY GOALS. TO THIS END, IT INTEGRATES ECONOMIC, SOCIAL AND ENVIRONMENTAL ASPECTS FOR DECISION MAKING, COMPANY TOGETHER WITH ETHICAL MANAGEMENT, SEARCHING TO BALANCE PROFILE SHORT- AND LONG-TERM INTERESTS IN ORDER TO GENERATE SHARED VALUE FOR THE COMPANY AND ITS STAKEHOLDERS. GOVERNANCE ABOUT PLUSPETROL CORPORATE STRATEGY HIGHLIGHTS ACTIVITIES STAKEHOLDERS SUPPLY CHAIN 06 • Pluspetrol Malvinas Gas Plant Camisea, Peru. Sustainability Report 2014 • 07 USA HOUSTON BUSINESS OFFICE VENEZUELA COMPANY PROFILE5 COLOMBIA PLUSPETROL IS A PRIVATE ENERGY COMPANY WITH OVER 35 YEARS OF EXPERIENCE IN HYDROCARBON EXPLORATION AND PRODUCTION. PERU +35 6 BOLIVIA YEARS IN COUNTRIES WHERE PLUSPETROL THE INDUSTRY CARRIES OUT OPERATIONS, IN SOUTH AMERICA AND AFRICA +2,200 190.8 DIRECTLY MMBOE OF TOTAL ARGENTINA HIRED PEOPLE OPERATED PRODUCTION URUGUAY 163,903 1,921 MONTEVIDEO CORPORATE BBL/D OF LIQUIDS MMSCF/D OF GAS OFFICES AND PRODUCTION PRODUCTION ASSISTANCE IN COMMERCIAL OVERSIGHT 13 73 6 References EXPLORATION PRODUCTION WELLS DRILLED WELLS DRILLED Offices Exploration Production 5. December 2014 data. NGLFP Sub Andean Bases 6. Points are not geographically referenced. 08 • Pluspetrol Production Exploration Oil and gas production is conducted in Oil and gas reserve exploration is one diverse geographical environments, of the company’s strategic activities, which range from the Patagonia region as it determines its projection into the OPERATING in Argentina to the Peruvian Amazon future. The permanent search for new AREAS rainforest, including urban areas as well opportunities runs from current areas in as territories inhabited by indigenous operation to new regions in countries communities. The quantitative where the company has not yet performance indicators presented in developed any activities. This Report PLUSPETROL DEVELOPS this Report only include results from provides detail on the qualitative aspects EXPLORATION AND PRODUCTION the production areas. related to the activities performed in ACTIVITIES OF OIL AND GAS exploration areas. RESERVES IN VERY COMPLEX Operated Areas Non-Operated Areas ENVIRONMENTS. It refers to the geographical areas Non-operated areas include zones where Pluspetrol holds a controlling where Pluspetrol does not hold IN ITS OPERATIONS IT EMPLOYS interest over its operations. The scope controlling interest to date: Chile, THE HIGHEST OPERATIONAL of this Report includes all the areas Argentina, Peru and Colombia. Also operated by the Company in Angola, included here are those areas operated STANDARDS AND MAKES USE Argentina, Bolivia and Peru. by Pluspetrol but which are in an OF THE BEST TECHNOLOGIES, exploration phase: Colombia and PRIORITIZING RESPECT FOR THE Venezuela. This Report does not include data on non-operated areas without a ENVIRONMENT, LOCAL controlling interest. CULTURE AND ARCHEOLOGICAL HERITAGE, IN A SAFE AND RESPONSIBLE WAY. AREAS OF OPERATION (DETAILS) Name Location COLOMBIA - CPE-7 Block Department of Guaviare - CPO-3 Block Department of Meta - CPO-2 Block Department of Vichada VENEZUELA - Tiznado Guárico State NETHERLANDS - Barbacoas Guárico State AMSTERDAM PPN, PERU HEADQUARTERS - Block 8 Department of Loreto - Block 1AB Department of Loreto CAMISEA, PERU - Block56 Lower Urubamba region, Department of Cusco - Block 88 Lower Urubamba region, Department of Cusco - Natural Gas Liquids Fractionation Plant Province of Pisco, Department of Ica and Marine Terminal PLUSPETROL E&P, PERU - Block 108 Basin of rivers Ene and Apurimac - Block 115 Department of Loreto - Block 102 Department of Loreto BOLIVIA - Tacobo Field Department of Santa Cruz - Curiche Field Department of