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Industrial Safety in TNK-BP as a Prime Factor for Development of Hydrocarbon Resources.

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Presentation on theme: "Industrial Safety in TNK-BP as a Prime Factor for Development of Hydrocarbon Resources."— Presentation transcript:

1 Industrial Safety in TNK-BP as a Prime Factor for Development of Hydrocarbon Resources

2 TNK-BP AT A GLANCE Russia’s top 3 largest oil company* 1H 2012 production 1,824 mboe/d (2,035 mboe/d with affiliates) Brownfield assets in West Siberia and Orenburg Producing greenfields in Uvat and Verkhnechonskoye Yamal: a new generation of greenfield projects Growing gas business A truly international player Ranking in the world’s top 10 non-state-owned oil producers* Venezuela: stakes in heavy and light oil projects Vietnam: stakes in offshore gas, pipeline and power plant** Brazil: stake in exploration project Ukraine and Belarus: downstream business World-class reserve base 39 bn boe of PRMS 3P reserves Reserve life of 21 years of 1P and 59 years of PRMS 3P reserves Industry-leading F&D costs and exploration success rate Strong financial profile Investment grade credit ratings Strong credit metrics Robust financial performance Fully integrated business Five refineries (incl. one in Ukraine***) and 50% stake in YANOS refinery Refining capacity of 769 mb/d, refining cover of 39.2% in 1H 2012 Extensive retail network with 1,274 retail sites in Russia, Ukraine and Belarus * - based on total oil production ** - acquisition of power plant planned to be completed in 2012 *** - currently refinery in Ukraine is under mothballing Russia Vietnam Belarus Ukraine Brazil Venezuela 2

3 OUR STRONG COMPETITIVE POSITION Source: company reports. *PetroChina production as of 2010 3Y average SEC LOF RRR (2009-2011) World class reserve replacement and F&D costs Among top 10 oil producers globally Best capital efficiency among Russian peers 1H12 CAPEX/ boe, USD Source: Consolidated Financial Statement, MD&A reports of companies 0.9 1.0 0.8 0.9 1.7 1.8 1.2 2.4 2.2 1.8 1.7 2.4 2.2 2.3 0.2 0.1 0.7 0.8 0.2 0.3 1.1 0.2 0.5 0.8 1.5 1.0 1.3 2.2 012345 Sinopec Gazprom Neft ENI Statoil ConocoPhilips TNK-BP Lukoil Total Rosneft Petrobras Chevron Shell PetroChina** BP ExxonMobil 2011 oil and gas production (incl. equity affiliates), mmboe per day OilGas RRR - reserve replacement ratio; F&D – finding and development 3

4 BROWNFIELD ASSET BASE HIGHLIGHTS 3P reserves of 24.7 bn boe Currently deliver 83% of total liquids output:1,291 mb/d West Siberia Focus on application of innovative technology and processes Production decline lowered by 0.9% in 1H12 v 1H11 >90% water cut Samotlor Giant field, 5 th largest ever discovered More than 40 years in production Delivers 32% of TNK-BP’s total liquids production Will remain a reliable producer going forward Orenburg 60-70 years in production Delivers 27% of TNK-BP’s total liquids production Impressive oil & gas production growth: up 20.9% in 2007 -2011 Samotlor Moscow Orenburg Nizhnevartovsk Nyagan Orenburg fields 3P Reserves: 3.4 bn boe 1H 2012 liquids production: 420 mb/d Samotlor field 3P Reserves: 7.7 bn boe 1H 2012 liquids production: 520 mb/d Nyagan fields 3P Reserves: 7.8 bn boe 1H 2012 liquids production: 142 mb/d Other West Siberia fields 3P Reserves: 5.7 bn boe 1H 2012 liquids production: 193 mb/d 4

5 GREENFIELDS: BUILDING FOR THE FUTURE Significant resource potential 3P reserves of 14.6 bn boe Increasing share in production From 17% currently up to 20-25% by 2015 Yamal projects and Rospan Major new production province Could potentially account for over 30% of TNK-BP’s total production by 2020 * Messoyakha is owned by a 50/50 JV between TNK-BP and Gazprom Neft, reserves data include 50% share of Messoyakha Suzunskoye Tagulskoye Russkoye Rospan 3P Reserves: 5.9 bn boe (liquids + gas) Potential FFD start-up: 2015 1H 2012 gas production: 1.7 bcm (59 mboe/d) 1H 2012 condensate production: 15 mb/d Messoyakha* Yamal projects 3P reserves: 4.9 bn boe Potential start-up: 2016-2019 Uvat 3P Reserves: 1.4 bn boe Start-up: 2009 1H 2012 liquids production: 126 mb/d Verkhnechonskoye 3P Reserves: 2.4 bn boe Start-up: 2008 1H 2012 liquids production: 139 mb/d Uvat Verkhnechonskoye Legend: Greenfield projects under development Greenfield projects at phase of commercial production Gas project 5

6 BASIC INDICATORS IN TNK-BP OCCUPATIONAL SAFETY AND HEALTH Since 2007 the TRIFR is registered to be reduced by 84% TNK-BP Company realizes a Single Labour Concept, not dividing the employees into ins and outs (Contractor employees) The Company HSE report includes indicators of Contractors, the transparency meets the best world practice * Производственный травматизм 6 The reduction of Total Recordable Injury Frequency Rate (TRIFR)* by 20% The reduction of Days Away From Work Cases (DAFWC) by 10% Total Recordable Injury Frequency Rate (12-month Rolling Average) Comments TRIFR Subcontractors Company’s employees Total number of fatalities and lost time injuries * Total Recordable Injury Frequency Rate (TRIFR) comprises the total number of fatalities, lost time injuries, restricted work cases and medical treatment cases as per OSHA definitions. ** The International Association of Oil and Gas Producers

7 HSE: THE LEADING COMPANY IN RUSSIA Environment Safety The spill frequency index is improving : –The number of spills per thousand tons produced down 13% –Spilt tons per thousand tons produced down 45% Spills Frequency (12-month Rolling Average) 7 Information on accidents and incidents is presented as per classification of the Federal Law No. «On Industrial Safety of Hazardous Industrial Facilities» In the period from 2006 through 2011 average number of accidents at Company’s facilities reduced by 36.4% Comments

8  Major Projects Risk Assessment  Production facilities Integrity Risk Management.  Multilevel Control of applicable requirements compliance.  Managerial Leadership at all management levels. Direct function subordination to top managers.  Unsafe Action Intervention culture.  Single Labour Concept – the Company statistics include Contractor indicators  Reporting Disclosure and Transparency – Report on the Company sustainable development with disclosure of information on А+ (report auditors – PWC)  HSE Management Systems of several Subsidiaries are certified for compliance with ISO 14001 and OHSAS 18001 standards EFFECTIVE PRODUCTION SAFETY MANAGEMENT SYSTEM – A TICKET TO SUCCESS 8

9 “BARRIERS” SYSTEM – AN INSTRUMENT TO PREVENT INDUSTRIAL INCIDENTS 9 HAZARD AWARENESS Probable hazardous factors determined and assessed Barrier 1 WARNING Prevent Accidents Barrier 2 DETECTION AND MONITORING Detect accidents and monitor situation if event is evolving Barrier 3 MITIGATION Various accident aspects to be mitigated as the accident develops, escalation shall not be allowed Barrier 4 ESCAPE AND EVACUATION Move people to safe location REDUCE PROBABILITY MITIGATE RISK = PROBABILITY x CONCEQUENCES Hazardous factors 9

10 RISK IDENTIFICATION AND ASSESSMENT ON SITE FACILITIES Tank PROBABILITYCONSEQUENCE R RISK Evaluation criteria of equipment condition and associated systems Frequently Will occur 100% L / НH / ВHH / ОВ Probably 1time per year L / НM / СH / ВHH / ОВ Eventually 1 time per 2 years L / НM / С H / ВHH / ОВ Rare 1time per 3 years L / Н M / СH / В Unlikely L / Н M / С to 1M$to 2 М$to 3 М$to 4 М$More than 4 М$ Implications, М$ Probability Risk matrix 6 25 10 503 0 100 200 300 400 500 600 Distribution of “VST" over risk values НН/ОВН/ВМ/СL/Н 10 Barrier 1 WARNING Barrier 2 DETECTION AND MONITORING Barrier 3 MITIGATION Prevent accidents Detect accidents and monitor situation if event is evolving Various accident aspects to be mitigated as the accident develops, escalation shall not be allowed Hazardous factors

11 PROJECT MANAGEMENT – DECISION MAKING POINTS Appraisal clarification The company internally reviews HSE project solutions at all stages of project development and implementation in order to generate efficient and timely measures to mitigate possible negative impact 11 DMP

12 DEVELOPMENT STRATEGY – TRANSITION TO SINGLE OPERATING MANAGEMENT SYSTEM(OMS) Implement Review Monitor OMS Performance Improvement Cycle Plan OMS – management system with clearly formalized elements and minimal set of requirements for it. OMS has a formal management system improvement cycle (OMS Performance Improvement Cycle), which is similar to PDCA cycle (Plan-Do-Control-Act). PURPOSE OF OMS: Integrate HSE requirements into daily corporate operation in order to continuously mitigate HSE risks 12

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