BP in Azerbaijan Sustainability Report 2013 bp.com/caspian Building a stronger, safer BP About our report This report covers the calendar year ending 31 December 2013. In some instances significant events from 2014 have been included. Unless otherwise specified, the text does not distinguish between the activities of BP p.l.c. and those of its subsidiaries and affiliates. References in this report to ‘us’, ‘we’ and ‘our’ relate to BP in Azerbaijan unless otherwise stated. When we cite ‘BP in Azerbaijan’ we refer to operations in Azerbaijan only. If we refer to ‘BP AGT’ we are including all our activities in Azerbaijan, Georgia and Turkey. Specific references to ‘BP’ and the ‘BP group’ mean BP p.l.c., its subsidiaries and affiliates. All dollar amounts are in US dollars. All gas volumes are indicated in standard cubic metres or standard cubic feet. The report is issued annually by BP Exploration (Caspian Sea) Limited in its capacities as operator and manager of the joint operating company for the Azeri-Chirag-Deepwater Gunashli field, as manager of The Baku-Tbilisi-Ceyhan Pipeline Company and by BP Exploration (Shah Deniz) Limited in its capacities as operator of the Shah Deniz field and as technical operator of The South Caucasus Pipeline Company. For this report each of these entities has provided information relevant to its project and statements applicable to its project. Front cover imagery Find out more online The Sangachal terminal is one of the world’s Our bilingual website, largest integrated oil and gas processing bp.com/caspian, is the main terminals. It is a central hub for BP’s oil and gas information source about our operations in the Caspian region. Caspian region energy projects. Centre photo: Around one thousand people work continuously at the terminal to maintain safe and reliable operations of this strategic hub. Left photo: The Caspian Technician Training Centre located in the terminal area provides world-class training to the newly recruited technicians. These include classroom activities, production simulation and a large fully-equipped workshop. Right photo: View of the processing area at the Sangachal terminal. The oil and gas processed at the terminal is transported through the pipeline links to the regional and global markets. bp.com/caspian bp.com Browse through latest news, project This site contains information about the details, environmental and social impact BP group including detail of the company’s assessments, legal agreements governing policies and values, reports on its activities the projects, civil society monitoring and operations worldwide and the group’s reports and BP’s responses, earlier BP in sustainability reviews. Azerbaijan sustainability reports and other documents. ecbaku.com This site provides up-to-date information about development projects and gives Cautionary statement useful insights on how to work with BP and other international and local companies. BP in Azerbaijan Sustainability Report 2013 contains forward-looking statements relating, in particular, to recoverable volumes and resources, capital, operating and other expenditures, and future projects. Actual results may differ from such statements depending on a variety of factors including supply and demand developments, pricing and operational issues and political, legal, fiscal, commercial and social circumstances. Overview Overview What’s 2 Introduction 3 BP in Azerbaijan at a glance Gordon Birrell reflects on the highlights of our Our organization at a glance, our history, activities in 2013 and touches upon our future summary of our major achievements and inside? plans. challenges in 2013. Focus areas BP in Azerbaijan Sustainability 8 Our operations 36 Environment We operate large offshore hydrocarbon assets in Managing our environmental performance from Our operations Report 2013 covers our business the Caspian and manage pipeline links to regional exploration and the development of new projects performance, environmental and world markets. to production. record and wider role in Azerbaijan during 2013. It is our 20 Our people 44 Society How we improve the way we manage and We aim to have a positive impact on society eleventh sustainability report and develop our people to provide the foundation for and the local economy through our projects in reflects feedback we received BP’s long-term success in Azerbaijan. education, community, enterprise development about previous reports. and co-operation in revenue transparency. 29 Safety Our people Focusing on achieving safe, reliable and compliant operations and putting safety and operational risk management at the heart of everything we do. Our reporting and key performance indicators 55 Report process and feedback We have reviewed BP in Azerbaijan We aim to provide a full and transparent account Sustainability Report 2013 in order to of our performance and activities and to respond provide assurance to BP management that Safety to stakeholder feedback. the data, statements and assertions made regarding the sustainability performance of 56 Five-year performance data BP in Azerbaijan are supported by evidence or explanation. Our scope of work and Our key performance data covering areas including conclusions can be found on page 57. production, safety, environment and social spend. Ernst & Young Introduction to the assurance process Environment Society Our reporting BP in Azerbaijan Sustainability Report 2013 1 Introduction by the president of the BP Azerbaijan-Georgia-Turkey region BP and its co-venturers are committed to helping Azerbaijan develop its hydrocarbon resources safely and reliably for the benefit of the country. Gordon Birrell I am delighted to introduce the eleventh issue of Keeping our promise of safe and At the same time, the Shah Deniz production the BP in Azerbaijan Sustainability Report. reliable delivery sharing agreement was extended up to 2048, meaning that BP and its partners in Azerbaijan can For more than a decade, BP has produced this Enhancing our production, safely and responsibly, move ahead with appraising future stages of Shah annual report as part of our commitment to is an important aspect of our operations. During Deniz. communicating publicly about what we do in the 2013, we made good progress in implementing country and how we do it. our plans to optimize production that we agreed Our knowledge of the ACG field has led us to believe there may be large natural gas resources in In Azerbaijan, we operate the super-giant Azeri- with our partners and the government of the deeper reaches of ACG that can be developed Chirag-Deepwater Gunashli (ACG) oil field and the Azerbaijan. We expect our joint efforts will in support of Azerbaijan’s plans to expand its new huge Shah Deniz natural gas field, as well as the continue to take us step by step towards our supplier role. world-scale Sangachal terminal and major oil and commitment to maximize field recovery. gas export pipelines. The Chirag oil project was a major part of this Throughout 2013, our teams in Azerbaijan continued the massive task of processing data This year we celebrate the 20th anniversary of the commitment. Sanctioned back in 2010, from a 3D seismic survey on the prospective signing of the ACG production sharing agreement, the $6 billion project was designed to boost oil Shafag-Asiman structure. known as ‘the Contract of the Century’. What production from the ACG field through the new started as a vision in 1994 has turned into an West Chirag platform. It was completed safely Striving to be a responsible corporate enduring success story. With our co-venturers, we with no day away from work cases. The heaviest citizen and a good employer have designed and built world-class infrastructure platform ever installed in the Caspian, West Chirag Our programme for graduate recruitment remains to help Azerbaijan develop its hydrocarbon successfully started production in January 2014. popular among Azerbaijani youth, breaking a new resources safely and reliably for the benefit of the We believe that with the right production plans in record in 2013 with more than 4,300 applications. country. place and the right technologies, combined with We celebrated the first graduation of our petro- optimal reservoir depletion plans, ACG can go on technical resource entry programme (PREP) in for decades to benefit Azerbaijan, our partners and September 2013. This programme is designed to the region as a world-class resource. support capability development among petro- technical graduates as they join BP in Azerbaijan. Working towards the energy future In addition to hiring a record number of 86 In parallel, the Shah Deniz Stage 2 project – one of graduates in 2013 we also increased PREP intake the largest new natural gas ventures in the world – to 81. has made good progress. In 2013, Shah Deniz partners confirmed the final pipeline routes, paving Together with our co-venturers, we continue the way for the Southern Corridor that will bring to support Azerbaijani students, who pursue Shah Deniz gas to Europe. undergraduate and graduate studies in engineering and geosciences. In 2013, seven graduate and 25 The efforts put into this project by many teams undergraduate students benefitted from our joint culminated in the signing of the final investment scholarship programme. decision in Baku on 17 December. This truly historic milestone opens a new chapter in the development of Caspian hydrocarbons and establishes Azerbaijan as an important energy supplier to Europe. 2 BP in Azerbaijan Sustainability Report 2013 BP in Azerbaijan Overview at a glance Our structure, organization, assets and history. Through co-operation agreements with the State Legal structure Transportation and storage Oil Company of the Republic of Azerbaijan and the A number of BP legal entities have registered (at year end 2013) Baku Higher Oil School in November, we formally representative offices in Azerbaijan reflecting the Transportation: Sangachal terminal – an oil reaffirmed our long-held pledge to create a strong evolution of BP’s presence in the country and the and gas processing terminal south of Baku.