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, offering transparency and

ACTIVITIES CONCERNING OUR ECONOMIC, ENVIRONMENTAL

compliance with best practices and

AND SOCIAL PERFORMANCE. THIS REPORT IS BASED ON THE 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

which are very useful for day-to-day

PHASE, MAINLY OPERATIONS IN ARGENTINA, BOLIVIA AND PERU.

business. For the company’s employees, it

AS FROM THIS YEAR, ALSO THE RESULTS FOR ANGOLA HAVE 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

in a responsible way, protecting the environment and people.

ARE

EVIDENCE

OF

OUR

COMMITMENT

WITH

SUSTAINABLE MANAGEMENT AND ITS COMMUNICATION TO OUR STAKEHOLDERS. DURING THE PREPARATION OF THIS REPORT SEVERAL AREAS AND COLLABORATORS PARTICIPATED WITHOUT WHICH ITS PUBLICATION WOULD NOT HAVE BEEN POSSIBLE. WE ARE

Our people’s opinion in the disclosure process of the 2013 Sustainability Report

ESPECIALLY GRATEFUL TO EVERYONE FOR THEIR EFFORT AND 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 ABOUT THE SUSTAINABILITY REPORT 2014

02 LETTER FROM THE CEO

06

26

ABOUT PLUSPETROL

OUR PEOPLE

Company Profile

Human Capital Management

Governance Our Corporate Strategy

Training and Development

Stakeholders

Benefits

Supply Chain

Health

Activities

Communication

Highligths

34

64

88

98

ENVIRONMENT

COMMUNITY

SAFETY

GRI INDEX

Environmental Management

Management with the Communities

Safety and Operations Integrity Management

Opinion Poll

Environmental Performance in Numbers

Social Investment

Safety

Participatory Processes

Other Actions Performed

Energy Efficiency & Climate Change Environmental Impact Management Natural Resources Management

Indigenous Communities Community and Value Chain

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 PROFILE

TOGETHER WITH ETHICAL MANAGEMENT, SEARCHING TO BALANCE 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 PLUSPETROL IS A PRIVATE ENERGY COMPANY WITH OVER 35 YEARS OF EXPERIENCE IN HYDROCARBON EXPLORATION AND PRODUCTION.

COLOMBIA

PERU

+35 YEARS IN THE INDUSTRY

6

BOLIVIA

COUNTRIES WHERE PLUSPETROL CARRIES OUT OPERATIONS, IN SOUTH AMERICA AND AFRICA

+2,200 DIRECTLY HIRED PEOPLE

190.8 MMBOE OF TOTAL OPERATED PRODUCTION

163,903 BBL/D OF LIQUIDS PRODUCTION

13 EXPLORATION WELLS DRILLED

5. December 2014 data.

1,921 MMSCF/D OF GAS PRODUCTION

73 PRODUCTION WELLS DRILLED

ARGENTINA URUGUAY MONTEVIDEO CORPORATE OFFICES AND ASSISTANCE IN COMMERCIAL OVERSIGHT

References6 Offices Exploration Production NGLFP Sub Andean Bases 6. Points are not geographically referenced.

08 • Pluspetrol

OPERATING AREAS PLUSPETROL DEVELOPS EXPLORATION AND PRODUCTION ACTIVITIES OF OIL AND GAS RESERVES IN VERY COMPLEX ENVIRONMENTS. IN ITS OPERATIONS IT EMPLOYS THE HIGHEST OPERATIONAL STANDARDS AND MAKES USE OF THE BEST TECHNOLOGIES, PRIORITIZING RESPECT FOR THE ENVIRONMENT, LOCAL CULTURE AND ARCHEOLOGICAL HERITAGE, IN A SAFE AND RESPONSIBLE WAY.

Production

Exploration

Oil and gas production is conducted in diverse geographical environments, which range from the Patagonia region in Argentina to the Peruvian Amazon rainforest, including urban areas as well as territories inhabited by indigenous communities. The quantitative performance indicators presented in this Report only include results from the production areas.

Oil and gas reserve exploration is one of the company’s strategic activities, as it determines its projection into the future. The permanent search for new opportunities runs from current areas in operation to new regions in countries where the company has not yet developed any activities. This Report provides detail on the qualitative aspects related to the activities performed in exploration areas.

Operated Areas

Non-Operated Areas

It refers to the geographical areas where Pluspetrol holds a controlling interest over its operations. The scope of this Report includes all the areas operated by the Company in Angola, Argentina, Bolivia and Peru.

Non-operated areas include zones where Pluspetrol does not hold controlling interest to date: Chile, Argentina, Peru and Colombia. Also included here are those areas operated by Pluspetrol but which are in an exploration phase: Colombia and Venezuela. This Report does not include data on non-operated areas without a controlling interest.

AREAS OF OPERATION (DETAILS) Name Location COLOMBIA - CPE-7 Block - CPO-3 Block - CPO-2 Block

Department of Guaviare Department of Meta Department of Vichada

VENEZUELA

NETHERLANDS AMSTERDAM HEADQUARTERS

- Tiznado - Barbacoas

Guárico State Guárico State

PPN, PERU - Block 8 - Block 1AB

Department of Loreto Department of Loreto

CAMISEA, PERU - Block56 - Block 88 - Natural Gas Liquids Fractionation Plant and Marine Terminal

Lower Urubamba region, Department of Cusco Lower Urubamba region, Department of Cusco Province of Pisco, Department of Ica

PLUSPETROL E&P, PERU - Block 108 - Block 115 - Block 102

Basin of rivers Ene and Apurimac Department of Loreto Department of Loreto

BOLIVIA - Tacobo Field - Curiche Field - Tajibo Field - Río Seco Field - Bermejo-Toro Field - Huaico Field

ANGOLA

Department Department Department Department Department Department

of of of of of of

Santa Santa Santa Santa Tarija Tarija

Cruz Cruz Cruz Cruz

ARGENTINA - Neuquén Area - Río Colorado Area - Northern Area

Provinces of Neuquén and Río Negro Province of La Pampa, Neuquén and Mendoza Province of Salta and Formosa

ANGOLA - South Cabinda Block

Province of Cabinda

NON-OPERATED AREAS Name Location ARGENTINA - Río Colorado

Province of Salta

CHILE - El Tranquilo

Magallanes XII Region

COLOMBIA - Putumayo 12 Block - SN 1 Block

Urabá Antioqueño Putumayo

PERU - Block 76

Department of Madre de Dios

Sustainability Report 2014 •

09

GOVERNANCE Comité Ejecutivo CORPORATE GOVERNANCE PROVIDES THE INCENTIVES TO PROTECT THE COMPANY’S INTERESTS, PROMOTE VALUE CREATION AND THE EFFICIENT USE OF RESOURCES, WHILE PROVIDING TRANSPARENCY IN INFORMATION MANAGEMENT. IN THIS WAY, THE TRANSPARENCY IN THE GOVERNANCE STRUCTURE AND THE COMPOSITION OF THE ORGANIZATION ARE VITAL TO ENSURE ACCOUNTABILITY TO OUR STAKEHOLDERS. BELOW WE DESCRIBE OUR COMPANY’S GOVERNANCE AND ETHICS REGULATION CODES AND POLICIES.

Led by Pluspetrol’s CEO, it consists of four members. Its creation favored a better project coordination and a greater focus on the Company’s growth strategy and communication between the different sectors, and with collaborators.

COMITÉ EJECUTIVO CEO y Presidente Senior VP Producción Global de Activos Senior VP Servicios Corporativos y CFO

THE COMPANY’S GOVERNANCE The organization for decision-making, the policies that regulate our management and the transparency in our relations with stakeholders are key dimensions that feed and strengthen our governance. Additionally, there are different executive bodies within the company which are assigned specific roles and responsibilities for their performance.

Senior VP Desarrollo Corporativo

Global Assets Production

Corporate Services

Corporate Development

Responsible for optimizing the Company’s assets production.

Responsible for providing the best cost-effective balance support for the whole company.

Responsible for projecting the Company’s future development.

Board of Directors

Crisis Committee

Pluspetrol’s Board of Directors represents the company’s top managing organ and is comprised of three independent members appointed by the Shareholders’ Meeting. It is in charge of defining the Company’s objectives and strategic pillars, supervising and controlling internal management, and assessing organizational performance.

Pluspetrol has an internal crisis management procedure, under which the formation of a committee to face any crisis is considered, in order to respond in a coordinated way among the different sectors of the Organization; providing strategy management, support, resources and the appropriate attention to the stakeholders’ concerns both inside and outside of the Company, related to the event.

10 • Pluspetrol

ABOUT PLUSPETROL

ETHICAL BEHAVIOR The set of policies and codes that today rule our operations constitute a common framework for all the Business Units, as they set general corporate guidelines based on which each of them draws specific action plans and programs, appropriate to their local context. During 2014, two valuable ethical behavior initiatives materialized: the creation of an Ethics Committee and the implementation of a new whistleblower channel called “Ethics Line”.

Code of Ethics Since 2008, Pluspetrol has had a Code of Ethics in force that establishes the attitude of integrity, criterion and moderation that all personnel must assume in front of our clients, suppliers and other persons who may or not be part of the Company, in order to prevent situations that may compromise the Company or its employees with respect to their subjectivity and freedom to decide.

PERU

TRANSPARENCY IN THE RELATIONSHIP WITH THE GOVERNMENT Regarding our operations in Peru, we continue participating in the Extractive Industries Transparency Initiative (EITI) as a mechanism that favors transparency and strengthens our stakeholders’ trust. Pluspetrol voluntarily participated, together with other 58 extractive companies, in the Third National Conciliation Study, corresponding to 2011 and 2012. Through this study, data was made available on the revenue of the Peruvian State and the payments made by the 59 voluntary member companies, on income tax; mining, gas and oil royalties; special mining tax; special mining obligations and validity rights.

All Pluspetrol collaborators subscribe to this code through its signature upon joining the company.

Ethics Committee Excellence and sustainability are achieved by means of honest and transparent behaviors. With this vision, the Company’s Management created the Ethics Committee made up by the Directors of the Legal Affairs, Human Resources and Internal Audit areas, whose responsibility is to analyze the complaints submitted concerning ethics or law violations through any of the channels available.

2013 2,093.6 MILLIONS OF S/.

7

Ethics Line In 2014, a new contact channel was added to report unethical behaviors. Besides the usual communication with their immediate superior or the Human Resources department, now employees can make use of the Pluspetrol Ethics Line, a tool designed to facilitate reporting behaviors that may be contrary to the Company’s Best Business Practices. This new tool is available 24/7, through intranet and internet. Notifications may be sent by email ([email protected]), or filling in the form on the web www.ethicsline.pluspetrol.net. Also, in some countries, contact telephone lines have been set up, too.

2012 2,084.6 MILLIONS OF S/.

7

132.9 2011 2, MILLIONS OF S/.

7

Pluspetrol Ethics Line is managed by the KPMG company, so as to ensure confidentiality throughout the process. This company receives the different cases and channels them to Pluspetrol’s Ethics Committee for their analysis.

7. Pluspetrol’s contributions to the Peruvian Government in terms of oil and gas Royalties and Revenue; information submitted to EITI. In Peruvian nuevos soles (S /.)

Sustainability Report 2014 •

11

CORPORATE STRATEGY

PURPOSE, VISION AND VALUES

Think beyond possibilities; act despite uncertainty

Be persistent

VISION Stand out as a benchmark company among international energy companies.

Team work as a way of setting free our imagination and creativity

Develop our human resources’ talents PURPOSE Satisfy all of our stakeholders’ (shareholders, employees, their families, partners, suppliers, clients, governments, and the communities in the countries where we operate) needs and expectations maintaining our own identity.

Use resources efficiently, bearing in mind the low cost concept

Capitalize on opportunities

Preserve the environment

12 • Pluspetrol

THE DEVELOPMENT OF OUR OPERATIONS POSES THE CONSTANT CHALLENGE OF RECONCILING TECHNICAL, SOCIAL, ENVIRONMENTAL AND SAFETY ASPECTS. TO FACE IT IN A SUCCESSFUL WAY, WE HAVE DESIGNED A STRATEGY THAT ENABLES US TO MAINTAIN THE EXCELLENCE OF OUR OPERATIONS AND BE CREATIVE REGARDING THE EXPLORATION OF DIVERSE AS WELL AS COMPLEX REGIONS, WHILE WORKING ON REDUCING IMPACTS ON THE ENVIRONMENT AND NEIGHBORING COMMUNITIES. PLUSPETROL’S CORPORATE STRATEGY CONSIDERS THREE MAIN AXES: SUSTAINABILITY MANAGEMENT, SUSTAINABLE GROWTH AND OPERATIONAL EXCELLENCE.

ABOUT PLUSPETROL

OUR SUSTAINABILITY MANAGEMENT We understand Sustainability as the path to achieve our vision of becoming an international benchmark company in hydrocarbons exploration and production. Along this path, in order to create shared value, we search to integrate and balance the short and long-term interests of our stakeholders, including employees, shareholders, suppliers, clients, governments and communities from the countries where we operate. We are aware that our activities are a source for employment and income generation for governments and local communities, a local economic growth and investment driver. This is why we are responsible for ensuring the business’s continuity, and sustainability is the strategy to achieve it. The sustainability framework that we have defined directs us to conduct our activities in pursuit of excellence in the management of each of the processes, focused on a rational, efficient use of resources, preserving the environment and operating safely and responsibly, while we capitalize opportunities in a permanent cycle of continuous improvement. Our approach maintains environmental, social and safety aspects as a priority. An important tool to meet company sustainability objectives, and which allow us to address the abovementioned aspects, is risk management. All our operations are developed in complex regions and environmentally and socially sensitive environments, such as the Amazon rainforest in Peru, or the Bolivian blocks located in native community areas. In order to respond to these situations properly, we continue improving our management systems, including the way we identify, assess and manage risks associated with our activities and projects. In this sense, during 2014, the Environment and Community Affairs Directorate has started the process of design and implementation of a Corporate Environmental and Social Management System (SGASC, for its Spanish acronym), establishing environmental and social criteria and guidelines as minimum baseline requirements for all our operations. Although Sustainability crosses the whole Company, its management is carried out by the Environment and Community Affairs Directorate which, in turn, reports directly to the Corporate Development Vice-Presidency.

INTERVIEW WITH ENVIRONMENT AND COMMUNITY AFFAIRS DIRECTOR, CHRISTIAN DÖBEREINER

What challenges as the new leader of environmental and community affairs of Pluspetrol did you pose yourself? My first action was to listen, listen, listen… and try to understand the Company’s Culture and our main challenges. I soon realized we had a great team with highly qualified and experienced social and environmental personnel, which needed only to prioritize and focus a bit more on building the corporate systems and processes, while aligning to standards and preparing the company for growth.

What company achievements would you highlight? A very good example of the Company competence and achievement is the Camisea Gas Project in the Peruvian Amazon, where the social and environmental aspects are an example of a world class operation, showing us that we can do it. We need only to capture these leanings and apply them in the rest of our operations.

What are Pluspetrol’s challenges and opportunities in sustainability for the coming years? Our short term challenge is to finalize and implement our Social & Environmental Management System aligned with Operational Excellence. The Management system will enable us to better manage our social and environmental risks that will be reflected in our continuously improving performance.

Sustainability Report 2014 •

13

New Sustainability Policy

THREE KEYS TO SUSTAINED GROWTH

During 2014, our sustainability policy was drawn up. Pluspetrol understands it as a commitment to the continuous improvement of its processes to meet its long-term growth and sustainability goals.

PLUSPETROL SUSTAINABILITY POLICY

APPROVAL Management confirms its enactment

SOCIALIZATION Analysis with Country Managers

VALIDATION Discussion with different corporate areas

PILLARS Pluspetrol’s values as policy foundations

It is organized around nine principles that seek excellence in each of the Company’s processes; it proposes business ethical management, integrating economic, social and environmental aspects balanced with short and long-term interests, in order to create shared value for the Company and its stakeholders.

START Management Decision

BENCHMARKING Analysis of other companies’ best practices and background

Our Exploration Department has designed a five-year growth strategy. For its progress to be efficient, it has considered the operations that the company currently develops in different operational areas, its operational capacity and the expertise of the corporation’s technical and geoscientists team and the various business units. Diversify. The current production pace forces us to have a reasonable reserve replacement enabling long-term economic support. For this reason, we are working on building an opportunity portfolio that includes different alternatives in terms of value and risk. Explore. The easy oil era is over. For the future, we are directing a search towards more complex geographies, which we carry out successfully thanks to the deployment of advanced technologies. Adapt. We must be prepared to adapt our business to the evolution of an uncertain market, and be capable of offering fast and efficient answers.

THE SUCCESS OF THE INTERNATIONAL EXPLORATORY PROGRAM MAINLY LIES IN REMAINING FOCUSED, WELL PREPARED AND ATTENTIVE TO MAKE A GOOD SELECTION OF THE AREAS. MAINTAINING THE FOCUS AND PERSEVERANCE IS CRUCIAL, PARTICULARLY DURING HIGHLY UNCERTAIN PERIODS, WHEN MANY TIMES CRISES TURN INTO EXCELLENT OPPORTUNITIES.

Geographical Expansion Our strategy is based on maintaining two focus regions: Latin America and Western Africa. Through geological studies, we have defined the areas of more prospective interest. WHY A A SUSTAINABILITY POLICY IN PLUSPETROL? • BECAUSE GUIDELINES ARE NEEDED TO ENABLE THE COMPANY TO THINK IN THE LONG TERM, CONSIDERING ALL ITS STAKEHOLDERS AND CREATING SHARED VALUE WITH THEM. • BECAUSE BECOMING A GLOBAL COMPANY EXPOSES US TO GREATER RISKS AND FACING THEM INVOLVES HAVING NEW SYSTEMS AND PROCESSES THAT WILL LEAD US TO BE A WORLD- CLASS COMPANY IN THE INDUSTRY.

14 • Pluspetrol

High priority. Areas where we will concentrate our resources and the necessary funds to carry out the works. Here is where we could obtain E&P areas, outline prospects, start farm-in processes (with limited exploratory cycles), discover and produce hydrocarbons, activate the search for opportunities through engagement in biddings or strategic associations. Watching basins. Basins that require more complex regional geological analysis to complement the information that Pluspetrol already has in its records. These basins do not have the appropriate conditions to access the markets in the short term, and they do not have available areas.

ABOUT PLUSPETROL

ALIGNED WITH THE BEST INTERNATIONAL PRACTICES During 2014, Pluspetrol joined the International Oil and Gas Producers Association (IOGP), a prestigious global forum whose members relate and share the best practices associated to Health, Safety, the Environment, Social Responsibility, Engineering and Operations. Formed in 1974 to develop efficient communications among industry members in a complex context with growing international regulations, the IOGP stands out for the publication of standards, guidelines, indicators reports and useful information for the industry.

Since 2006, we have been members of the Regional Association of Oil, Gas and Biofuels Sector Companies in Latin America and the Caribbean (ARPEL). This association brings together public and private companies, and oil and gas sector institutions. Its main goal is to promote the industry integration and growth, and maximize its contribution to sustainable energy development in the region. Pluspetrol is a member of ARPEL’s Board of Directors, and is also actively engaged in six technical committees that support the association’s activities. In 2014, it should be noted that Pluspetrol was re-elected as President of the Social Responsibility Committee. In addition, and like every year, we participated in the Environmental Benchmarking project, through which member companies report a series of key environmental performance indicators. This allows, among other things, to identify the trends of specific environmental aspects like the use of resources, and to foster environmental management enhancement.

Sustainability Report 2014 •

15

OPERATIONAL EXCELLENCE

Operational Excellence is the strategy to ensure, from the Operations VP, the growth, value creation and long-term sustainability objectives. With this strategy, we seek to impact on different areas connected with the management of our business, such as safety and integrity, production efficiency, reserve replacement, operational costs optimization, capital productivity enhancement and ensuring our license to operate. Operational Excellence is a concept and work mode that allows us to capture a vision of how we want to perform in all our operations. This vision is supported on the following value drivers: standards and processes, technology, organizational capacity, and performance & learning.

work mode is much better than the sum of individual efforts. Following this work line, focus was placed on two main processes: Capital Excellence Process (CEP) and Contractors Performance Management (CPM). In the first case, we have extended and deepened the CEP implementation in Peru and Argentina. Opportunities and projects channeled under CEP nowadays reach around 30% of the investment amount planned for the next three years in GPA. On the other hand, with the implementation of the Contractors Performance Management Process (CPM) we achieved another step towards excellence. Management of our contractors and the contracts that connect us with them are key elements to ensure more efficient and safer operations.

Operational Excellence – 2014 Highlights: During 2014 we worked on the implementation of this strategy in each of the value drivers. Managing through defined processes helps us consolidate collaborative team work, aligned with one of Pluspetrol’s core values. We are certain that this

WE MUST POINT OUT THAT ON SEPTEMBER 4, THE COMPANY HELD THE “FIRST CONTRACTORS FORUM, TOWARDS OPERATIONAL EXCELLENCE” IN MONTEVIDEO, URUGUAY, WHERE IT GLOBALLY SHARED ITS GROWTH AND EXCELLENCE VISION WITH OVER 50 CONTRACTORS.

SUSTAINABLE GROWTH

Standards and Processes

Technology

Operational Excellence

● Safety and Integrity ● Production efficiency ● Reserves replacement ● Cost optimization ● Capital productivity ● License to operate

Organizational Capacity

Performance & Learning

16 • Pluspetrol

SAFETY

EFFICIENCY

CONFIDENTIALITY

ABOUT PLUSPETROL

From a technological point of view, each of the Operations VP management areas has put in place a plan to assess and incorporate the appropriate technology to meet the challenges our business needs to face. Such plan involves, among others, the development and exploration of non-conventional resources, heavy oils and assisted recovery, digitalization of our fields’ operation, and the application of Process Safety Management (PSM) concepts, in order to ensure the appropriate management of operational risk. Organizational capacity is another essential pillar for our growth and sustainability. In this regard, we have worked on the definition of technical competences of diverse operational disciplines, as well as geology and geophysics, which will let us improve our competence and training management in the future. In search for assurance of the technical competencies required for our collaborators, during November and December, Pluspetrol invited its staff from the operational areas to participate in the “Foundations of Process Safety” course, in order to strengthen their knowledge in this subject. Likewise, in December, a training session on Well Integrity was held in Peru, attended by members from different business units responsible for ensuring wells’ integrity. Lastly, Performance & learning is a crucial driver to understand the roles we must perform and what is expected from us. To this end, we have worked hard on devising the tools that will help us measure our performance, such as the GPA Operations Dashboard, the Well Construction Dashboard and other boards to follow-up projects, as well as on the practices or processes for goal planning, results review and actions definition to support ongoing improvements. During 2015, we will continue with the implementation of our Operational Excellence strategy, strengthening our model with the incorporation of planning as an axis for integration, with a permanent focus on improving our operations performance. The 2015 performance objectives need to be aligned with our excellence and continuous improvement vision to achieve safe, reliable and efficient operations.

OUR PATH TO EXCELLENCE IS A COLLECTIVE CONSTRUCTION THAT DEMANDS COMMITMENT, PERSEVERANCE, TENACITY AND THE ABILITY TO LEARN FROM OUR OWN MISTAKES AS WELL AS OUR ACCOMPLISHMENTS.

Sustainability Report 2014 •

17

STAKEHOLDERS EACH YEAR WE WORK TO IDENTIFY THOSE STAKEHOLDERS MORE LINKED TO OUR BUSINESS, INCORPORATING THOSE WHO EMERGE DUE TO THE DYNAMICS OF THE ENVIRONMENTS WHERE WE OPERATE, AS WELL AS THE DEVELOPMENT OF NEW AREAS OF OPERATION. WE SEEK MAINLY TO ENGAGE WITH OUR STAKEHOLDERS SO AS TO CREATE SHARED VALUE FOR THE COMPANY AND FOR THESE GROUPS; BESIDES, OUR OBJECTIVE IS TO IMPROVE THE MATERIALITY IN OUR REPORT, ACCOUNTING FOR THE TOPICS THAT STAKEHOLDERS ARE INTERESTED IN, OURSELVES BEING THE SOURCE OF TRANSPARENT AND DIRECT INFORMATION ABOUT “WHAT DO WE DO?” AND “HOW DO WE DO IT?”.

NGOs represent a valuable ally with respect to human rights; the community and stakeholders’ engagement; and the environmental protection and responsible use of natural resources

We provide our clients with the development of low-carbon energy sources, mitigating climate change and contributing to the energy market transformation

During the reported period, an identification and prioritization of stakeholders work was carried out, to later establish outreach strategies. Further, it is a relevant precedent that is providing us with tools to design a process which will regularly identify stakeholders and contribute to the report’s materiality analysis.

We encourage local communities’ engagement in the different outreach instances and spaces, and we prioritize respect for human rights, the environment -including the use and disposal of water and chemical substances-, and land control, use and management

Procurement of suppliers includes their health and safety, respect for human rights.

IDENTIFICATION •



MATERIALITY ANALYSIS

• • •

For the identification of the material matters to be included in our Report, we analyzed: International reporting standards: IPIECA8 and the oil and gas sector supplement of the GRI9 Guide Analysis of reports of other the sector companies Participatory dialogue processes Surveys Meetings

MATERIALITY The topics identified as material are: • Liaison with local communities • Occupational health and safety • Indigenous peoples’ rights • Regulatory compliance • Asset integrity and process safety • Proven Reserves (volume and type) • Water Management • Energy • Emissions, effluents and wastes • Company/employee relations • Products and services (mitigation of their environmental impact) • Biodiversity • Employment • Corruption

PRIORITIZATION Once the material topics were identified we proceeded to their prioritization in accordance with the following criteria: • Degree of importance of the topics in the standards consulted • Strategic significance for Pluspetrol • Importance for our consulted stakeholders (weighting and prioritization exercise)

8. International Petroleum Industry Environmental Conservation Association. 9. Global Reporting Initiative.

18 • Pluspetrol

We work with governmental organizations, bearing in mind transparency of payments made, and contributing to the countries’ economic and social development

PLUSPETROL

Our work with the media and opinion leaders is based on honesty and transparency of the messages broadcasted, as well as the consistency and uniformity of the information communicated

IDENTIFYING STAKEHOLDERS

Together with our dialogue channels and communication tools, we have initiated a systematic materiality analysis process to strengthen the relevance and transparency of the topics described in our reports. Topics are relevant (or “material”) when they may be reasonably important, as they manifest economic, environmental and social impacts of the organization, or else, because they substantially influence stakeholders.

Together with our collaborators we seek to preserve occupational health and safety, respect for human rights, and to maintain assets and process safety

ABOUT PLUSPETROL

SUPPLY CHAIN OIL AND GAS COMPANIES DEVELOP THEIR BUSINESS IN A DYNAMIC AND GLOBALIZED ENVIRONMENT, THIS CREATES A NEED IN COMPANIES TO REDESIGN THE TRADITIONAL WAY OF DOING BUSINESS. WITHIN THIS FRAMEWORK, SUPPLY CHAIN MANAGEMENT ARISES AS A KEY SUPPORT TOOL FOR OPERATIONS. IN PLUSPETROL, THE SUPPLY CHAIN IS MADE UP OF THREE FUNCTIONAL SECTORS: PROCUREMENT, LOGISTICS

AND WAREHOUSES; THE FOCUS IS PUT ON ADDING VALUE BY MEANS OF PROCURING MATERIALS, EQUIPMENT AND SERVICES SUPPORTED ON THE FOLLOWING PILLARS: SAFETY, PLANNING AND EXECUTION DEPENDING ON NEEDS; LONG-TERM VISION AND DECISION-MAKING; SUPPLIERS DEVELOPMENT; AND CONTRIBUTION TO THE DEVELOPMENT OF LOCAL ECONOMIES IN THE PLACES WHERE WE OPERATE.

Sustainability Report 2014 •

19

GLOBAL SUPPLY STRATEGY

DEVELOPING LOCAL ECONOMIES

Pluspetrol has developed a series of guidelines within the Strategic Supply conception, whose general objectives are: to improve expense and procurement management, and ensure performance based on best practices. Within this framework, a series of management programs and approaches have been designed since 2010, continuing with their implementation and development to date.

We align our interests with those of local economies by promoting and hiring local suppliers and purchases, contributing in the development of new capacities in the communities who live in the environments where we operate.

SUPPLIER MANAGEMENT PROGRAM Its main objective is to develop a planned process of continuous work with suppliers. Within this context a key factor is to strengthen relationships with this stakeholder group related to: supply of materials, equipment and services, the application of environmental, safety and sustainability standards, as well as the efficient management of supply costs, and the definition of specific conduct conditions with a regional scope.

TOPICS

SUPPLIER MANAGEMENT PROGRAM

SELECTION

A process to formalize incorporation of suppliers who comply with minimum predefined standards.

ASSESSMENT

A performance follow-up tool whose objective is to continue, promote or end relationships with suppliers.

OUTREACH

A selective program aimed at developing relationships with specific suppliers, based on their strategic level and criticality.

TECHNOLOGY

A customized management platform with corporate scope, and internal (governance) and external (suppliers) application scope.

2014 UPDATE The tool to be used was defined, in the Assessment line, whose implementation will be carried out during 2015 and 2016.

CONTRACT MANAGEMENT Oil and gas companies require “best in class” solutions to address contract management, considering that these regulate an essential part in what refers to the organization of a company’s operations. This is why we are taking the first steps towards the implementation of actions aimed at strengthening Contract Management. Therefore, we pursue to actively advance not only in the generation of standard contracts, but also in relation to their follow-up during the execution phase and level of response, completing a better control of potential risks and maximizing the business operability and financial performance.

20 • Pluspetrol

We create shared value with these communities by accompanying the gradual and organized growth of local suppliers who provide us with goods and services, ensuring, at the same time, an efficient use of local resources. Perú In our operations in Peru the relationship with local suppliers is carried out mainly by contracting companies created and managed by local people. These companies offer different services such as river transport for passengers and smaller loads. Under this form of communal enterprises we promote the generation of new employment opportunities for local people, while the degree of organization and training they acquire allows them to access service contracts with Pluspetrol and with other companies also operating in the area.

ABOUT PLUSPETROL

ACTIVITIES

PLUSPETROL CONDUCTS OIL AND GAS EXPLORATION AND PRODUCTION WITH A DUAL CONVICTION: THAT IT IS POSSIBLE TO OPERATE IN HIGHLY COMPLEX ENVIRONMENTS BY MAKING USE OF THE BEST PROVEN TECHNOLOGIES; AND THAT THIS MAY BE DONE RESPECTING THE ENVIRONMENT, THE LOCAL CULTURE AND ARCHEOLOGICAL HERITAGE IN EACH OPERATION.

EXPLORATION NUMBER OF WELLS DRILLED

2011/2014

Evolution

25

30

21

25 20

EXPLORATION 13

15

8

10 5 0 2011

2012

2013

2011

2014

2012

PRODUCCIÓN NUMBER OF WELLS DRILLED Evolution

154

2011/2014 160 140

73

96

88

75

80

85

100

110

113

120

60 40 20 0 2011 2010

2012 2011

• DRILLING • WORKOVER

During 2014, exploration activities were performed in Argentina, Bolivia, Peru and Angola. 11 wells were drilled with a total 25,000 m drilled and seismic activities were advanced with a total 751 km of 2D seismic and 715 km2 of 3D seismic.

2013 2012

2014 2013

Argentina Five exploratory wells were drilled with conventional objectives, out of which two discovered oil from the Mulichinco Formation (Southeast Barda Cortada x-1 and North La Junta x-1), in Río Colorado areas. On the other hand, a horizontal well was installed in the area of Puesto Silva (Puesto Silva x-1009 h) with an unconventional objective on Vaca Muerta Fm, by drilling 750 m inside the formation. Bolivia Four exploratory wells were drilled in the Tacobo area, with shallow (< 2,000 m) and deep (> 5,000 m) objectives. The deep Tacobo x1003 well, one of the deepest wells in Bolivia and of Pluspetrol, with the Santa Rosa Fm exploratory objective, reached 6308 m depth (200 m above the objective), and due to strong gasification and an increase in the formation pressure, it was temporarily abandoned until the appropriate equipment to continue its exploratory drilling is procured.

Angola Two exploratory wells were drilled on prospects in Cabinda Sur block, with conventional productive objectives in Castanha field, both wells resulting non-productive due to the lack of appropriate reservoirs. To continue the exploration, reprocessing of the existing 3D seismic was performed. Peru Exploratory activities in this country were focused on the acquisition of 2D seismic data in Block 88, in Camisea, and in Block 108, of the Ene River basin, both with exploratory objectives in rainforest regions and irregular landscapes. In the case of Block 88, 200 km of 2D seismic data were gathered to acquire information on possible prospects situated in the remaining areas of the block. In the case of Block 108, by late 2014, 180 km of 2D seismic were recorded, distributed in two zones within the area (north and center).

Sustainability Report 2014 •

21

OPERATED PRODUCTION

152,320

180,000 160,000

Argentina

2011/2014

627

643

0

695

634

20,000

Bolivia

Camisea | Peru

PPN | Peru

1,912

2,453

28,015

26,338

31,704

41,570

39,442

40,000

39,802

60,000

40,458

80,000

28,826

79,524

100,000

82,369

120,000

101,014

140,000 95,584

Liquids production (Bbl/d)

173,695

EVOLUTION

163,903

2011/2014

151,692

RESULTS

Pluspetrol

Angola

EVOLUTION

1,652

1,712

2,034 1,268

1,500

1,663

1,723

2,000

1,377

Gas production (MMscf/d)

1,921

2,500

6

7

0

8

8

59

81

95

92

215

193

290

500

242

1,000

0 Argentina

22 • Pluspetrol

Bolivia

Camisea | Peru

PPN | Peru

Angola

Pluspetrol

ABOUT PLUSPETROL

PROVEN RESERVES

2011/2014

EVOLUTION

600

694

787

585

660

800

728

817

1,000

650

Liquids reserves (MMBbl)

870

1,200

400

1

8

31

46

63 0

1

2

1

54

77

84

86

93

200

0 Argentina

Camisea | Peru

PPN | Peru

Pluspetrol

Angola

11,567

12,707

11,160

12,000

13,240

11,990

14,000

10,000 8,000 6,000

64

84

176

142

344

446

2,000

323

4,000

575

Gas reserves (Bcf)

11,866

16,000

12,273

EVOLUTION

13,862

2011/2014

Bolivia

0 Argentina

Bolivia

Camisea | Peru

Pluspetrol

Sustainability Report 2014 •

23

HIGHLIGHTS

10 YEARS OF CAMISEA IN FIGURES

BELOW WE HIGHLIGHT TWO 2014 MILESTONES THAT WE PARTICULARLY VALUE: THE CAMISEA PROJECT COMPLETED 10 YEARS OF OPERATION, AND WITH IT, OUR COMPANY ACHIEVED THE DEVELOPMENT OF THE MOST IMPORTANT ENERGY PROJECT IN PERU; FURTHERMORE, THE COMPANY ENDS THE PERIOD WITH A STRONG BET ON THE DEVELOPMENT OF UNCONVENTIONAL HYDROCARBONS IN ARGENTINA.

10 YEARS OF CAMISEA - PERU In August 2014, the Camisea Consortium reached its 10th year of operation in Peru. Camisea represents the most important energy project in Peru, driving the country’s growth through the creation of income, which translates into sustainable development indexes and quality of life improvement for society as a whole. Camisea’s operations develop the national production of natural gas and derived liquids, completely changing the energy matrix and contributing to the country’s industrial development. The use of Camisea’s natural gas makes it possible to reduce global emissions of CO2 as it allows the replacement of more polluting fossil fuels in the energy matrix of Peru, besides it enables significant savings year after year, mainly due to energy costs reductions in households, retail shops, industries, transport and power generation.

WHAT DOES CAMISEA CONSIST OF?

1,600 MMSCFD10 IS THE CURRENT PRODUCTION OF NATURAL GAS IN CAMISEA. IT STARTED ITS OPERATIONS WITH A 400 MMSCFD PRODUCTION.

+ US$ 10,000 MILLION SUM OF INVESTMENT DERIVED FROM THE PROJECT (TRANSPORT, DISTRIBUTION AND THERMOELECTRIC INDUSTRY) BETWEEN 2001 AND 2013.

+360,000 VEHICLES TURNED INTO LPG OR NGV11, THANKS TO THE DEVELOPMENT OF THESE LESS EXPENSIVE AND CONTAMINATING FUELS.

US$ 500 MILLION CAMISEA PLANS TO INVEST IN THE EXPLORATION AND DEVELOPMENT OF BLOCK 88 IN THE COMING YEARS.

US$ 3,700/ 4,000 MILLION WAS THE INVESTMENT FOR THE PROJECT IMPLEMENTATION, EXPLORATION AND EXPLOITATION PHASES, AND THE TWO EXPANSIONS OF THEIR PLANTS SITUATED IN CUSCO AND PISCO.

95% OF SUPPLY OF INTERNAL NATURAL GAS DEMAND IN PERU.

US$ 6,300 MILLION PAID AS ROYALTIES TO THE PERUVIAN STATE, BETWEEN 2004 AND 2013.

41% OF THE ELECTRIC GENERATION IN PERU IS PRODUCED BASED ON CAMISEA’S NATURAL GAS.

CAMISEA WELLS GAS AND CONDENSATES PRODUCTION

MALVINAS PLANT DRY NATURAL GAS AND DERIVED LIQUIDS SEPARATION PROCESS

NATURAL GAS

LIMA

NATURAL GAS LIQUIDS

PISCO FRACTIONATION PLANT. DIESEL, GASOLINE AND LPG SEPARATION PROCESS.

24 • Pluspetrol

As part of the celebrations for Camisea’s ten years, a central ceremony was held on August 4 in the Malvinas Plant. The President of the Republic, Ollanta Humala Tasso, the Minister of Energy and Mines, Eleodoro Mayorga, the president of the Cusco Region, René Concha Lezama, the president of the Camisea Consortium and Pluspetrol CEO, Steve Crowell, Pluspetrol Country Manager in Peru, Germán Jiménez Vega, the presidents of the companies associated in the Camisea Consortium, national, legislative, regional authorities, representatives from the native communities in the region and reporters, among others, attended the celebration.

ABOUT PLUSPETROL

The socio-environmental challenges of drilling unconventional wells. The hydrocarbon industry is continuously experiencing new developments to increase its hydrocarbon resources. As of late, the possibility to develop unconventional resources in Argentina has arisen. Mostly, the success of such development will depend on how the social and environmental issues of said projects are managed. Therefore, Pluspetrol undertakes a series of actions with the aim of managing the exploitation of these unconventional resources in accordance with the Company’s sustainability guidelines. • We are part of the Argentine Oil and Gas Institute through our engagement in technical commissions, working days and meetings aimed at suggesting and agreeing on the internationally recommended best practices locally applicable, as well as sharing experiences among the Companies in this sector for the development of unconventional resources.

UNCONVENTIONAL HYDROCARBONS Since early 2011, Pluspetrol started implementing a plan for the development of unconventional oil and gas resources in the Neuquén basin. Today Pluspetrol is positioned as one of the main players in the development of this strategic resource. Vaca Muerta is the main unconventional gas and oil formation in Argentina, and one of the most important on the planet. Betting on this kind of hydrocarbons represents a challenge and commitment with the future by Pluspetrol. This ambitious project includes the assessment of resources of both tight gas and tight oil as well as shale gas and shale oil, and the implementation of new drilling, completion and production technologies.

The main objectives of this plan are as follows:

1 TO DETERMINE THE POTENTIAL AMOUNT OF RESOURCES TO BE PRODUCED.

2

• We defined an internal ad hoc inter-disciplinary group in order to outline action strategies for the development of these resources. As part of this group, reference people from the environmental and social area engage in the search of international and local experiences in order to generate recommendations related to best practices, to manage the potential environmental impacts, and new technologies applicable to the local conditions of developing unconventional areas. In this regard, the work lines being followed are focused on Preventing impacts on drinking water aquifers’ quality. Minimizing the use of water resources suitable for human consumption or irrigation. Making land use compatible with other economic activities. Disclosure processes with the surrounding population. Implementing safe treatment alternatives for the disposal of flowback water. Safely managing the chemicals used during hydraulic stimulation.

TO DEFINE THE CONDITIONS NECESSARY FOR THESE RESOURCES TO BE CONSIDERED AS RESERVES.

In March, 2014, the acquisition of hydrocarbon assets in the province of Neuquén was completed, incorporating 1,240 square kilometers of the Vaca Muerta formation. So far, Pluspetrol has drilled 13 Liquids/Condensate wells, distributed in Loma Jarillosa, Puesto Silva Oeste, Cinco Saltos, Centenario, Aguada Baguales and Apon. Over the next years, we plan to make several investments focused on the research and development of the acquired assets’ potential.

10. MMSCFD: millons of standard cubic feet daily. 11. NGV: Natural Gas Vehicle.

Sustainability Report 2014 •

25

OUR PEOPLE WE CREATE AND MAINTAIN RELATIONSHIPS OF TRUST WITH OUR EMPLOYEES, CONTRACTORS, SUPPLIERS AND OUR STAKEHOLDERS, CONSIDERING THEIR NEEDS AND EXPECTATIONS WHILE LOOKING FOR THE GENERATION OF SHARED VALUE.

HR IN FIGURES BENEFITS

HUMAN CAPITAL MANAGEMENT

COMMUNICATION

HEALTH

OUR PEOPLE

26 • Pluspetrol

TRAINING AND DEVELOPMENT

In our Company we believe in an ethical, diverse, inclusive and collaborative working environment, with alignment between the values of the people and the Company. Verónica James Human Resources Corporate Director

Malvinas Plant, Camisea, Peru.

Sustainability Report 2014 •

27

HUMAN CAPITAL MANAGEMENT IN PLUSPETROL, THE GROWTH OBJECTIVE IS GLOBAL: IT IS A COMPANY WITH AN EXCELLENCE AND LEARNING AGENDA VISION, WHERE COOPERATION AND CHALLENGE ARE KEY ELEMENTS. WITHIN THIS FRAMEWORK, WE DEVELOP PROFESSIONALS WITH AN INTEGRATING MINDSET, BY MEANS OF INTERNATIONAL WORK EXPERIENCES AND ENGAGEMENT IN INTERDISCIPLINARY AND MULTICULTURAL TEAMS. IN THIS SENSE, HUMAN CAPITAL MANAGEMENT ALSO AIMS AT PROMOTING THE BEST WORK PRACTICES IN A SAFE, HEALTHY AND ENVIRONMENTALLYFRIENDLY ATMOSPHERE FOR ALL THE COMPANY COLLABORATORS IN THE DIFFERENT BUSINESS UNITS. TO THIS END, WE OPERATE IN A SAFE AND RESPONSIBLE MANNER. OUR RELATIONSHIP WITH OUR EMPLOYEES IS BASED ON A SHARED COMMITMENT WITH ETHICS AND CONSTANT LEARNING THROUGH DIVERSE TRAINING MECHANISMS.

+2,000 COLLABORATORS

COLLABORATIVE WORK ENVIRONMENT

TRUST

ANGOLA

ARGENTINA

SHARED VALUE

DIVERSITY

BOLIVIA

EXCELLENCE

CAMISEA | PERU PPN | PERU

PLUSPETROL 2014

2013

2014

2013

2014

2013

2014

2013

2014

2013

2014

Total Employees:

76

71

767

756

150

148

479

518

729

766

Employees by gender: Female

9

10

183

182

20

21

44

54

92

108

Employees by gender: Male

67

61

584

574

130

127

435

464

637

658

Employees by gender: Aged 30 or under

18

30

139

127

34

31

78

223

56

249

Employees by gender: 31 to 50 years old

51

33

469

467

75

73

334

257

387

414

1,316 1,244

Employees by gender: Aged 51 or over

7

8

159

162

41

44

67

38

286

103

560

12. The value reported in 2013 was 2,228, and that included 7 employees of Venezuela and 20 of Colombia. In the 2014 Report, these business units were not included in the indicator and therefore the value of 2013 was modified to maintain consistency.

28

• Pluspetrol

201312

2,201 2,259

348

375

1,853 1,884

325

660

355

OUR PEOPLE

DISTRIBUTION BY BUSINESS UNIT

DISTRIBUTION BY AGE

DISTRIBUTION BY SENIORITY

ARGENTINA • 34% PPN, PERU • 33% PERU • 23% CAMISEA, BOLIVIA 7% • ANGOLA 3% •

• 55% • 29% • 16%

• 41% • 28% • 17% • 14%

FROM 31 TO 50 YEARS OLD AGED 30 OR UNDER AGED 51 OR OVER

BETWEEN 5 AND 15 YEARS 2 YEARS OR LESS BETWEEN 2 AND 5 YEARS 15 YEARS OR OVER

DISTRIBUTION BY GENDER, 2014 EMPLOYEES BY GENDER

POSITIONS IN SENIOR MANAGEMENT

• 83% • 17%

MALE • 84% • 16% FEMALE

MALE FEMALE

TURNOVER RATE BY GENDER, AGE AND TOTAL PLUSPETROL

5.6%

7.5%

TOTAL

FEMALE

5.1%

4.4%

TURNOVER RATE

OVER 51 YEARS OLD

MALE

6.0%

5.2%

31 TO 50 YEARS OLD

UNDER 30 YEARS OLD

Sustainability Report 2014 •

29

TRAINING AND DEVELOPMENT Pluspetrol considers professional development globally, mindful of opportunities to perform in multiple areas of the company. Industry professionals that join the Company find different growth paths, in accordance to their profile. To this end, they receive support, training and counseling. Being Pluspetrol a reference company in the energy sector, professional development is considered a basic step to achieve business management excellence. We focus on diverse learning and/or training experiences: technical courses, development programs, on the job trainings and scholarship agreements for postgraduate courses for those profiles that require so.

MASTERS & POSTGRADUATE STUDIES In 2014, 20 collaborators were granted scholarships to take master and postgraduate courses. According to the general policy, established in 2012, their selection was based on business needs, their work performance excellence based on performance assessments and an analysis of the development profile; and proficiency in English. The programs developed are directed to technical subjects (specializations, master studies, diplomas), as well as subjects related to management skills development (MBA / EMBA, for example).

30

• Pluspetrol

TRAINING PROGRAMS Understanding that the industry and its technologies are ever changing, the offer of training is a permanent ally for the company’s management and accomplishment of its challenges. In this way, improvement of the collaborators’ preparation is multiple (including classroom, our own and specialized trainers in the industry, and international trainers). Its aim is to cover technical aspects in each discipline, software management and leadership.

801

TRAINING COURSES OFFERED

56

1,596

COLLABORATORS TRAINED

TRAINING HOURS ON AVERAGE PER EMPLOYEE

Our environment and context demand ongoing training and specialization in the tasks each sector carries out. Every year, we carry out an Annual Training Plan (PAC, its Spanish acronym), whose objective is to align training tools with the current and future business needs. It includes general training (industry-specific or Company-related topics); technical training (related to the development of new skills and updating topics specific to the function performed); and development training (in order to prepare employees to face future challenges, developing new skills, capacities and knowledge).

OUR PEOPLE

1,596

2,000

BENEFITS

1,500

429 171

189

148

66

450

569

375

500

801

1,000

0 Argentina

Bolivia

Camisea | Peru

PPN | Peru

Pluspetrol

COURSES DELIVERED • TRAINING • NUMBER OF EMPLOYEES TRAINED 13

During 2014, 801 training courses were delivered, reaching 1,596 collaborators in accordance with their expectations and needs. Out of all the employees trained, 13% were women and 87% were men. Among the activities performed, 83% were technical courses, and 17% were development and leadership activities.

ON THE JOB TRAINING DURING 2014, ELEVEN COLLABORATORS TOOK ON THE JOB TRAININGS. THIS TRAINING SEEKS TO FACILITATE BUILDING COMPANY AND BUSINESS AWARENESS (OR OF A PARTICULAR AREA) THROUGH HANDS-ON FIELD EXPERIENCE, INCORPORATING BOTH THEORETICAL AND PRACTICAL KNOWLEDGE.

LANGUAGE PROGRAM With the vision of becoming a global company, we offer our employees the opportunity to access a language program, which comprises English, Portuguese and French classes. This program consists of group, face-to-face classes, with a total duration of 3 hours per week.

In Pluspetrol, we consolidate diverse benefits offers to accompany the wellbeing of our collaborators, within the legal framework and pursuant to internal policies. Consequently, we offer differential medical insurance, facilitating access to special plans for all employees and their immediate family members. During 2014, 632 collaborators from Argentina accessed this benefit, and 1,292 collaborators from Peru obtained their EPS (Healthcare Provider Entities) health insurance. Further in this sense, we offer additional maternity leave days to those established by law. During 2014, 22 collaborators from Argentina and Peru made use of this benefit, in addition to their corresponding leave. Out of the total employees who took said maternity leave, 93% returned to their work. To accompany our collaborators both in their professional and personal life, we offer gifts for weddings and births. During the current report year 37 collaborators in Argentina and 86 in Peru received this benefit. Furthermore, we provide reimbursement for day care or school bonus, depending on the policy defined in the different business units; during this year the following had access to this benefit: 24 employees in Argentina, 722 in Peru and 62 in Argentina. Lastly, in some of our facilities we offer transport passes and the opportunity to do physical activities in a gymnasium. In September, the IX edition of the Olimpíadas Plusdeporte (PlusSport Olympics) were organized in PPN and Camisea, where Pluspetrol collaborators participated alongside employees from contractor companies, in football, volleyball and ping-pong tournaments, among others.

WEDDING GIFTS

In addition, and as a way of evaluation, students must take mid-year and end-of-year exams. During 2014, 278 collaborators made use of this benefit.

BIRTH GIFTS

TUITION BONUSES

PERFORMANCE ASSESSMENT Systematically, collaborators are invited to complete performance assessments. This process enables the alignment of objectives, as well as discussions with leaders to find room for development, share perspectives and challenges.

REIMBURSEMENTS FOR DAY CARE

TRANSPORT PASSES

13. General training data, language program and safety and health training, are included in the chart.

Sustainability Report 2014 •

31

HEALTH FOR OUR COMPANY THE HEALTH OF OUR COLLABORATORS IS A PRIORITY. THEREFORE, WE FOCUS ON CARRYING OUT DIFFERENT TRAINING, PREVENTION AND CONTROL CAMPAIGNS, ARTICULATED WITH ONE ANOTHER. 2,181 OCCUPATIONAL MEDICAL EXAMINATIONS, 931 FIRST AID TALKS, AND 1,149 INFLUENZA VACCINES WERE PART OF OUR HEALTHCARE ACTIVITIES.

2,181

OCCUPATIONAL HEALTH EXAMINATIONS

931 1,149

INFLUENZA VACCINES

FIRST AID TALKS

ARGENTINA In 2014, diverse activities were offered, including first aid and CPR talks for 41 people, training on electrical risks for 10 people and several talks on preventive occupational health for 425 collaborators. At a preventive level, 446 people were immunized against influenza. The Frequent Flyer Program continued, which enables to access enquiries, counseling and vaccination at the Dr. Stamboulian Infections Center for those collaborators who are heading for areas with risk; 40 people were assisted through this program. Also, 217 of our collaborators had a medical check up. Finally, our Buenos Aires office has in-company health care assistance, where a doctor provides counseling to employees once a week and performs consultations with doctors from other districts in the country.

BOLIVIA As a preventive measure, 148 people were immunized against influenza, typhoid fever, tetanus, and hepatitis B. On the other hand, the business unit has a functional Occupational Health Management System (SIGES, its Spanish acronym), which carries out health control tasks. In this way during 2014 nutritional controls, exercise at work, ergonomics controls, occupational health training, drug control and prevention services, a working atmosphere and healthcare program were put into practice. Like every year, job entry, intraoccupational and termination medical examinations were performed.

32

• Pluspetrol

OUR PEOPLE

COMMUNICATION Our Company is growing with respect to challenges and work spaces. For this reason we search to improve communication at different levels, such as the media available, the information shared, and collaborators’ knowledge. Promoting dialog, appropriate and transparent information, and change management are some of the area’s work objectives. We have different mass communication channels for employees in the various Business Units: intranet, digital newsletters, news bulletins, boards and institutional mailing. In addition, for new staff, an 8 hour organizational induction session is carried out, whose aim is to provide knowledge and understanding of the organization.

PLUSPETROL NORTE AND CAMISEA, PERU Several health-related actions with were conducted. In this way 740 employees participated in first aid talks and 96 collaborators participated in Drug Control (DEA) management training. 244 people received external trainings on spirometry, audiometry and X-rays. Lastly, we delivered training on dyslipidemia -attended by 124 people-, and diabetes mellitus -for 62 collaborators. As a preventive measure, we continued making occupational health examinations and vaccination campaigns against influenza, benefitting 2,165 people. We also applied various programs to monitor vectors causing Leishmaniasis; nutritional counseling, office gym, hearing health, and occupational health. Further, The Annual Obesity Eradication Program was implemented, attended by 108 people, which included beach-volley, water-polo and triathlon activities. Also, a nutritional health program was implemented including counseling and office gym. To continue with control and monitoring operations, visual acuity exams and dental assessment charts were performed on 306 collaborators; and health recovery medicine for 148 people. Additionally, health controls were conducted on people belonging to sectors where food, diners and groceries are handled.

During 2014, several mass campaigns related to different business and company initiatives were implemented. Many of the campaigns have graphic pieces associated (posters, signs, banners, videos), as well as briefing talks and/or training. This year, one of the most outstanding was Environment Day at Camisea, Peru, where environmental awareness talks were delivered at educational centers of the Native Communities, an environmental marathon was run with the unit’s collaborators, children participated with drawings and a contest was held for the best motto related to “Responsible Work, Healthy Environment.” Further, environmental awareness sessions were delivered in Pisco, together with a beach cleaning and bird watching contest in Paracas bay and Lobería beach.

MASS COMMUNICATION CHANNELS

(DIGITAL) INTRANET, WHICH CONTAINS THE COMPANY’S COMPILED INFORMATION

LOCAL (DIGITAL) NEWSLETTERS.

BOARDS IN OILFIELDS AND OFFICES

EXCELLENCE BULLETIN

Sustainability Report 2014 •

33

ENVIRONMENT WE LEAD OUR ENVIRONMENTAL MANAGEMENT IN A PREVENTIVE MANNER, SEEKING TO AVOID ALL KINDS OF INCIDENTS AND TO MINIMIZE POTENCIAL IMPACTS, TOGETHER WITH AN EFFICIENT USE OF ENERGY AND NATURAL RESOURCES, WE ASSESS AND MANAGE RISKS INHERENT TO OUR ACTIVITY, AND IMPLEMENT MANAGEMENT SYSTEMS WITHIN A CONTINUOUS IMPROVEMENT FRAMEWORK.

MANAGEMENT SYSTEM

ENVIRONMENT NATURAL RESOURCES MANAGEMENT

ENERGY AND CLIMATE CHANGE

IMPACT MANAGEMENT

Biodiversity Monitoring Program (Camisea, Peru). Photograph: André Liberoff.

34 •• Pluspetrol Pluspetrol

To achieve success and sustainability in the projects we develop, it is crucial to appropriately manage the environmental aspects in every phase involved in a hydrocarbon project, considering management measures and tools, specific management strategies and technologies adjusting to environmental and social sensitivity in every environment where we operate. Sandra Martínez Environmental Corporate Manager

Sustainability Report 2014 •

35

ENVIRONMENTAL MANAGEMENT Our environmental management is aimed at enabling that the activities we perform contribute to the sustainability of both the Company and our surroundings; therefore, we analyze and manage the risks inherent to our activity and the environment where it is set, minimizing the negative impacts and optimizing the benefits and opportunities offered by the environment.

BIODIVERSITY PRESERVATION

01

ENVIRONMENTAL MANAGEMENT

02

03

RATIONAL USE OF ENERGY AND NATURAL RESOURCES

CONTAMINATION AND ADVERSE IMPACTS PREVENTION

ASSESS AND SELECT

DEFINE

EXECUTE AND OPERATE

ABANDON

36

• Pluspetrol

We take up the challenge of operating in complex, remote areas with high biodiversity, sensitive ecosystems and, in many cases, with the presence of indigenous communities or rural and urban populations. That is why the management of environmental aspects during the entire lifecylce of our activities is not an option, but a key and essential element to the success of our projects. We develop and implement environmental management standards, processes and tools that favor continuous improvement in the different phases of our projects’ lifetimes, from the assessment stage to the selection of areas and ending with their abandonment. These elements of the Corporate Environmental Management System are reproduced and adaptedd in each of the Business Units; in this way, we promote the development of standardized processes and practices throughout the Company.

• Early Environmental Assestment • Indentification, dissemination and consultation in sensitive areas • Assessment of the applicable regulatory framework • Environmental and social due diligence • Identification of best practices in the industry • Internal information to areas involved and authorities • Execution of Environmental and Social Impact Assessment Studies • Obtain the complementary environmental permits • Strenghten relationships with the stakeholders • Implement Environmental Management Plans (EMPs) • Biodiversity management • Waste management • Energy efficiency • Environmental monitoring and reporting • Supervision and audits • Non Conformities, Preventive and Corrective Actions • Implement environmental investment plans • Environmental risk analysis • Readiness and response to environmental emergencies • Remediation • Restoration of intervened sites • Research and assessment of potentially impacted sites

ENVIRONMENT

ENVIRONMENTAL AND SOCIAL MANAGEMENT SYSTEMS Appropriate environmental and social management is required to achieve Sustainability and, for this reason, we strive to perform in our operations with respect to these two key areas. Their management is addressed in a comprehensive and transversal way throughout the organization. To this end, the Corporate Environmental and Community Affairs Office has started a process for the design and implementation of a Corporate Environmental and Social Management System (CESMS), establishing baseline environmental and social criteria and guidelines which represent minimum requirements for all of the Company’s operations. For the system’s design a two-level approach was considered, establishing both strategic and practical objectives.

Strategic Approach • Constitute a key element to position Pluspetrol as a reference company regarding environmental and social management, under the guidance of the the Company’s Vision. • Ensure sustainability, based on sound environmental and social risks and impacts management. • Deepen the incorporation of environmental and social aspects as a core element of the business, promoting efficiency in the entire productive cycle. • Reflect the company’s Purpose with actions at all levels, keeping to its identity and especially considering its Values.

In this regard, the CESMS has a direct link with the management systems implemented by the BUs, setting corporate guidelines while it feeds back from local lessons and experiences in a permanent continuous improvement cycle. In turn, the CESMS interrelates with other corporate management systems, all of them within the framework of our Sustainability Policy guidelines.

SUSTAINABILITY POLICY

CORPORATE MANAGEMENT SYSTEM

ENVIRONMENTAL AND SOCIAL MANAGEMENT SYSTEM

OTHER MANAGEMENT SYSTEMS

BUs’ MANAGEMENT SYSTEMS

BUs’ MANAGEMENT SYSTEMS

BUs’ MANAGEMENT SYSTEMS

BUs’ MANAGEMENT SYSTEMS

2014 NEWS ON THE MANAGEMENT SYSTEMS IN THE BUs Argentina: The Integrated Management System (IMS) in the North Area is certified under ISO 14001 since 2007; and under OHSAS 18001 since 2012. During 2014, the corresponding internal IMS monitoring audits were performed. Camisea, Peru: The IMS is certified under ISO 14001 and OHSAS 18001 since 2008. During 2014, the corresponding IMS recertification audit was conducted for both standards.

Practical Approach • Constitute a useful and baseline tool for new operations or emerging activities in new areas and in the different stages of the industry. • Set responsibilities at all levels of the organization. • Prevent/minimize environmental and social risks and impacts. • Be aligned with the company’s organizational structure. • Set environmental and social performance objectives and standardize practices.

Bolivia: The BU has a management system certified under standard OHSAS 18001 since 2012; likewise, the same year, an environmental management system under ISO 14001 was incorporated, although not yet certified. During 2014, the corresponding internal IMS monitoring audits were made. PPN, Peru: During 2014, a review process of the existing environmental and social management documentation was initiated, in order to work on an Integrated Environmental and Social Management System for the BU.

Sustainability Report 2014 •

37

ENVIRONMENTAL PERFORMANCE IN NUMBERS Any set of indicators constitutes a signal system that guides us in relation to the progress we make concerning the achievement of certain goals and objectives. Thus, environmental indicators let us identify the main trends in environmental dynamics.

diagnosis of the environmental management performance in every Business Unit, and to conduct, where necessary, adjustment or improvement measures based on this traceable and comparable information.

Since 2008, in every Pluspetrol area of operation a continuous follow-up and monitoring of a set of environmental indicators is carried out. These have been defined in order enable an accurate annual

These tools contribute to the sustainability strategy design, as they allow us to assess Pluspetrol’s environmental performance and compare it with the industry’s international and regional standards.

Camisea, Peru.

38

• Pluspetrol

Biodiversity Monitoring Program (Camisea, Peru). Photograph: Daniel Silva.

ANNUAL EVOLUTION

2014 PERFORMANCE



ARGENTINA

PLUSPETROL

BOLIVIA CAMISEA, PERU

PPN, PERU ANGOLA

INDICADOR

2011

2012 2013 2014 2014 2014

2014

2014 2014

Electric energy consumed (TJ)

4713

4688.1 4416 4487 922.8

60.6

691.8

2805.7 6.2

1062

1885.3 2492.4 2159.5

314.1

32.6

1432.2

378.6

23.73

1583.5

641.4

Vented and flared gas (MMscf)

2.1

GHG emissions (CO2 eq. MTn)

4201.5

4787.9 2645.4 2607.7 380.8

VOC emissions (t)

6.5

12.4 35.1 30.5

SOx emissions (t)

2184.5

1210.1 2782.4 1110.3

37

0

148

925.3

-

NOx emissions (t)

14,087

16,823.1 10,971.1 11,179.8 1518

0.6

2314

7347.2

-

PM emissions (t)

627.4 379.1 441.1 566.9

1

0

112

Number of hydrocarbon spills

20 16 21 12

2

0

0

Volume of hydrocarbon spills (barrels)

233

356 57.6 276.6 5

0

0

263.7 7.9

Volume of HC spilt due to vandalism (barrels)

3007 115 1190 645.9 0

0

0

645.9 0

Number of water/oil mixture spills

30 43 47 48

0

0

Volume of water/oil mixture spills (barrels)

1466.3

0

0

Number of spills of other substances

45 32 21 19

0

0

Volume of spills of other substances (barrels)

3241.4 466 1094 744.7 654.7

0

0

47

43

Generated hazardous waste (t)

2065

13.1

1830

1724

12

Generated non-hazardous waste (t)

4097.4 5910.5 4469.5 4347.4 600

83.4

1664

192114 79

Water consumed (millions of barrels)

95.5

-

44

827.3 2224.4 1340.6 1295.7

15

1966.2 2212 3887.1 308

86.8 46.4 37.3 23.8

0.5

0.5

30

2.6

0

- -

453.9 -

7 3

1 3

37

7.9

2 2

10.4 0.04

14. Unlike past years, in PPN, Peru, wastes from drilling projects have been included as part of operational management

Sustainability Report 2014 •

39

ENERGY EFFICIENCY & CLIMATE CHANGE The climate change directly or indirectly originated from human activity constitutes one of the major environmental challenges in the path towards sustainable development.

OIL TRANSPORT TO ITS TREATMENT POINT

OIL AND GAS EXTRACTION

TREATMENT FACILITIES

Through emissions measurements, monitoring and eventual reduction, Pluspetrol pursues to improve the environmental conditions of its surroundings.

ENERGY CONSUMPTION - GHG EMISSIONS

TREATMENT AND RE-INJECTION OF PRODUCTION WATER

98%

This phenomenon impacts through multiple and evident transformations in the climate system, determined by ever increasing greenhouse gases (GHG) concentrations in the atmosphere. Climate change, due to the relevance of the activities that create it and its scope and consequences, not only constitutes an environmental issue, but also a development issue with deep impact on society, the economy and ecosystems. Mitigating climate change involves limiting and reducing GHG emissions into the atmosphere.

OTHER MINOR USES

OF THE ELECTRIC ENERGY CONSUMED IS SELF GENERATED

Pluspetrol operations consume a total of 4,486,996.7 GJ of electric energy, out of which it only imports 74,427.62 GJ from the grid, producing with its own on-site power plants 4,412,569.10 GJ.

How do we manage energy efficiency and climate change projects? The implementation of certifiable energy efficiency and/or GHG emissions reduction projects comprises four stages: 1. Identification of project alternatives 2. Assessment of project alternatives 3. Project Execution 4. Results Disclosure These stages are addressed through an interdisciplinary work group where people responsible for different areas in the Company are engaged.

GHG EMISSIONS One of the main management tools for this kind of emissions that Pluspetrol developed and has implemented since 2010, is the Corporate GHG Emissions Inventory.

CORPORATE GHG EMISSIONS INVENTORY: IN ORDER TO HAVE ACCURATE DATA ON GHG EMISSIONS, AND TO BE ABLE TO DEFINE FUTURE IMPROVEMENT OBJECTIVES BASED ON TRACEABLE AND COMPARABLE INFORMATION, SINCE 2010 WE CALCULATE DIRECT EMISSIONS OF THESE GASES THROUGH THE IMPLEMENTATION OF THE CORPORATE INVENTORY. IN EVERY BUSINESS UNIT CARBON DIOXIDE (CO2), METHANE (CH4) AND NITROUS OXIDE (N2O) EMISSIONS FROM ALL COMBUSTION SOURCES ARE CALCULATED, AS WELL AS CH4 FLASH EMISSIONS IN TANKS. THIS IS A CATEGORY 3 INVENTORY, ACCORDING TO IOGP15 GUIDELINES.

Every year, through the use of the inventory, a review of the methodology and the sources considered for the calculations is carried out. Thus, we increasingly achieve better data quality. This assures a reliable data base for the definition of the Company’s action strategies regarding the management and reduction of GHG emissions.

15. The International Oil and Gas Producers (IOGP) Association has an Atmospheric Emissions Inventory Categorization, as per this guideline, Pluspetrol’s Corporate Inventory is a Level 3 of 5 that contemplates IOGP.

40 • Pluspetrol

ENVIRONMENT

GHG EMISSIONS PER PRODUCTION UNIT, MTNCO2E/MBOE– 2013/ 2014 EVOLUTION

61

67

80

60

13.9

13.2

11

10

5.6

0.2

15.31

20

13.82

40

The strategies we develop in order to reduce our GHG emissions are associated to the following guidelines: • Energy Efficiency in our operations • Incorporation of the energy efficiency concept in our projects’ design • Identifying and developing technological and processes improvements to register new projects in the framework of the United Nations Clean Development Mechanism (CDM). • Gas Flaring and Venting Reduction

0 ARGENTINA

• 2013

BOLIVIA

• 2014

CAMISEA PERU

PPN PERU

PLUSPETROL

PLUSPETROL HAS A CDM PROJECT REGISTERED SINCE 2012, WHICH IS PART OF THE NATIONAL PORTFOLIO OF CARBON PROJECTS OF PERU, LED BY THE NATIONAL ENVIRONMENTAL FUND (FONAM). IT IS THE FIRST CDM PROJECT IN LATIN AMERICA FOR THE UPSTREAM SECTOR.

Sustainability Report 2014 •

41

ENERGY EFFICIENCY Under the energy efficiency concept we search to optimize and reduce the use of energy in those processes and operational projects where feasible. This strategy also involves incorporating the consideration of a lower use of energy in the Company’s new projects. Direct and indirect consumption of energy Direct consumption of energy makes reference to fuel consumption (primary energy) used for energy self-generation, the development of activities, vehicle fleet, among others. On the other hand, indirect consumption refers to electric energy bought from an external source of generation. Below we include, on the one hand, the primary energy consumed (direct consumption) by type of fuel, and the total electrical energy consumed (self-generated and compared to an external source of generation) by operation.

PRIMARY ENERGY CONSUMED PER PRODUCTION UNIT16, PER OPERATION IN GJ/MBOE - 2014 Gas oil

26.61

Natural Gas

183.18

Gasoline

0.20

37% of these fuels are used to generate electricity

250

291.85

270.52

300

262.0

268.0

TOTAL ELECTRIC ENERGY CONSUMED PER PRODUCTION UNIT, PER OPERATION IN GJ/MBOE - 2011-2014 EVOLUTION

200 150

23.5

26.7

22.0

27.6

5.6

9.7

3.4

4.7

4.8

12.5

14.3

7.4

7.3

33.5

30.6

30.2

50

27.2

100

0 Argentina

Camisea, Peru.

42 • Pluspetrol

Bolivia

Camisea | Peru

PPN | Peru

Angola

Pluspetrol

ENVIRONMENT

GAS FLARING AND VENTING In some cases during hydrocarbon production, besides oil, associated gas coming from the same reservoir is extracted. A big part of this gas is used or preserved for its use; however, part of the gas is flared and, in some cases, released into the environment (venting) due to technical, regulatory or economic constraints.

FLARED AND VENTED GAS17 PER PRODUCTION UNIT IN SCF/BOE18 – 2011-2014 EVOLUTION 2011

2012

2013

2014

Argentina

19.7

21.5

12.96

11.4

Bolivia

0.7

6.6

1.0

7.7

Camisea, Peru

1.8

4.8

10.8

9.7

PPN, Peru

33.1

46.5

39.8

39.4

-

-

-

1.9

6.7

10.9

12.4

11.3

Angola Total Pluspetrol

NEUQUÉN AREA, ARGENTINA ANNULAR GAS CAPTURE PROJECT IN AGUADA BAGUALES FIELD

OTHER EMISSIONS Besides greenhouse gas emissions, hydrocarbon combustion generates other emissions, such as volatile organic compounds (VOCs), sulfur oxides (SOx), nitrogen oxides (NOx) and particulate matter (PM). Emissions of these substances are monitored regularly in order to check that the they are within the limits of the applicable legal framework, so as to prevent negative impacts on the environment immediate to our operations.

OTHER EMISSIONS PER PRODUCTION UNIT IN TON/YEAR. PLUSPETROL TOTAL, 2013/2014 COMPARISON. TOTAL BUs 2014 PLUSPETROL VOC Emissions (t) SOx Emissions (t) NOx Emissions (t) PM Emissions (t)

2013

2014

35.1 30.5 2782.4 1110.3 10,971.1 11,179.8 441.1 566.9

ARGENTINA

BOLIVIA

CAMISEA

PPN

2014

2014

2014

2014

-

0.5

30.0

0.0

37.0

0.0

148.0

925.3

1518.0

0.6

2314.0

7347.2

1.0

0.0

112.0

453.9

Objective: to reduce the amount of vented gas in productive oil wells, in order to recover andexploit it. The project is conducted in the well cluster situated in the Aguada Baguales Field, which produce oil by means of mechanical extraction and annular gas, which is vented into the atmosphere. After the analysis of different gas recovery alternatives, we chose to proceed with a capture technique based on applying a pressure lower than the atmosphere. This technique involves construction of a HDPE pipeline network that withdraws annular gas from a series of wells to then transfer it through pipelines network to a compressor with an 18,000 m3/d gas operational capacity, which feeds an electric power generator. Project progress: in 2014, work was done on the project’s design and environmental permits were obtained for the construction and assembly of the different facilities required. Its construction and gradual implementation is expected throughout 2015. It’s worth mentioning that based on this project, new low pressure gas extraction and marketing possibilities open up in the area.

KEY MITIGATION ACTIONS AND THEIR RESULTS In Pluspetrol we record and assess GHG emissions levels resulting from our activities. Based on this information, we seek strategies and new technologies that enable us to reduce this kind of emissions. Consequently, throughout 2014 we performed a series of key mitigation actions in some BUs which include the design of energy efficiency processes in new and ongoing projects, and a decrease of flared or vented gas.

16. Turbo JP1, HFO (Heavy Fuel Oil) and Residual consumption have not been included in this report. 17. For the formulation of the gas flaring and venting coefficient indicator, production in Río Colorado District was not considered in Argentina and Pluspetrol totals, as no data is available on flared and/or vented gas in this operation. 18. Standard cubic foot. A cubic foot equals 0.028317 cubic meters.

Sustainability Report 2014 •

43

Planta Ramos, Argentina.

Based on the new Waste Management Standard, the PIMAR Project was implemented. This project was conducted during 2014 in PPN operations. It is focused on achieving an integral waste management in blocks 8 and 1AB.

ENVIRONMENTAL IMPACTS MANAGEMENT

NUMBER OF SPILLS - 2011/2014 EVOLUTION

120

WASTES CLASSIFICATION

101 92

100

89

TREATMENT FINAL DISPOSAL

83

80 60 45 40 20

44

47

47

21

19

21

17

2013

2014

30 32 26 16

0 2011

2012

TOTAL • PLUSPETROL’S SPILLS • MIXTURE SPILLS • HYDROCARBON • OTHER SPILLS

During the last 4 years, the total number of spills has decreased by 18%. This is so thanks to the fact that during that same period, drops -of between 1% and 13%- in this indicator were recorded in all BUs (except for Angola, which started production in mid 2013). This drop was steeper between 2011 and 2012.

SEGREGATION AND COLLECTION

CORPORATE STANDARD OF WASTES MANAGEMENT

GENERATION REDUCTION

EXTERNAL WASTE TRANSPORT

TEMPORAL WASTE STORAGE

GARRAHAN HOSPITAL FOUNDATION RECYCLING PROGRAM We continue collaborating with this institution through a recycling program, donating paper and plastic lids that we collect from offices in Buenos Aires and Neuquén every month. In 2014, we contributed: 17,681 kilos of paper, preventing the felling of 300 medium-sized trees. 38 kilos of lids, representing 15,200 plastic lids, approximately.

42 • Pluspetrol 44

ENVIRONMENT

Management of the environmental impacts associated to the activities we peform is carried out based on three instruments: In each project, whatever the phase of the cycle the business is in, Pluspetrol performs the early identification, prediction and assessment of the potential physicochemical, biological, social and cultural impacts based on the elaboration of specific and detailed baselines in the working area.

A corporate model for environmental, social and operational risk management is implemented in order to minimize the operations’ exposure level, to prevent potential impacts and act proactively to make decisions in front of potential hidden risks. This model, which is being consolidated since 2012, is aligned with the Operational Excellence approach developed in our Company. A specific methodology is used through which risk surveys and classification is made, as well as identification of treatment actions, by means of interdisciplinary workshops. Based on the information gathered, risk maps are elaborated for every BU. These maps have follow-up measures linked to the treatment actions for the high and very high exposure level risks.

IMPACT IDENTIFICATION AND ASSESSMENT

RISK MAPPING

At corporate level the information generated at each BU is used to define common risk categories which make up the baseline corporate risk map.

MANAGEMENT TOOLS AND PRACTICES IMPLEMENTATION

The main aspects we preventively and proactively manage to avoid and minimize their impacts on the environment are: ●

Environmental impact assessments; Environmental management plans; Environmental Procedures, Action plans, Activity-specific environmental guides; Audits; Environmental indicators, Contingency plans.

Hazardous and non-hazardous waste management Drilling wastes management ● Spill events ● Potentially impacted sites and environmental remediations ● Produced water management ●

Sustainability Report 2014 •

45

WASTES MANAGEMENT

During 2014, the Corporate Environmental Wastes Management Standard was developed, focused in establishing the minimum requirements for environmental wastes management in our operation areas. These requirements aim to achieve wastes identification and characterization from their source, implementing an appropriate segregation and collection system, safely transporting them, and implementing more efficient treatment and/or final disposal alternatives from the technical, logistics and environmental viewpoints. The criteria defined in the standard are considered as minimum requirements in

All BUs classify their wastes according to the applicable legislation; the minimum requirement is the separation of Hazardous Wastes and Non-hazardous Wastes.

Every BU performs wastes segregation according to the classification criteria; sorted collection is carried out maintaining the necessary records to ensure wastes traceability and follow-up.

the waste management plans of every BU; among those criteria, the consideration of reduction, reuse, recycling and recovery alternatives is established, according to their applicability, as well as the implementation of sufficient records to ensure an appropriate traceability of wastes and compliance with the applicable laws in each of the sites.

TRAINING • They reach all of our own and contractors’ staff. • It refers to appropriate waste management. • It involves staff training in areas in operation, as well as administrative areas, which provide operations support (e.g., Supplies, Facilities, etc.).

Considering the previous points, and in order to monitor compliance with the waste management plans, regular monitoring reporting as well as internal audits are done.

TREATMENT FINAL DISPOSAL

WASTES CLASSIFICATION

SEGREGATION AND COLLECTION

GENERATION REDUCTION

CORPORATE STANDARD OF WASTES MANAGEMENT

EXTERNAL WASTE TRANSPORT

TEMPORAL WASTE STORAGE

Since the projects and/or activities’ design phase we perform an analysis of alternatives that enable reduction of waste generation at the source.

Thanks to these efforts during 2014, we recycled 36 % of our non-hazardous wastes, including plastic wastes, paper, cardboard paper, glass and wood. As per hazardous wastes, such have been managed according to the applicable legislation in each operation site. The

46 • Pluspetrol

AUDITS It is planned to perform, at least, two audits aimed at: • Internal waste management. • External waste management (transfer, treatment, recycling, final disposal).

treatment or final disposal techniques vary depending on the local characteristics and complexities of every site. In all cases, hazardous wastes are managed by authorized operators, who perform the final disposal according to the wastes’ characteristics and the applicableregulations.

Each BU performs waste treatment according to the applicable legal requirements. Waste Management Plans include treatment measures that allow minimizing the amount of wastes to dispose of in-situ or ex-situ.

Wastes are conditioned for their withdrawal from the areas in operation; keeping the necessary records required by law and Pluspetrol’s specific procedures. situ or ex-situ.

It is performed in sites conditioned to such purpose, based on the characteristics and requirements of the wastes stored. situ or ex-situ.

NON-HAZARDOUS WASTES MANAGEMENT

• 64% FINAL DISPOSAL • 36% RECYCLED

ENVIRONMENT

PLUSPETROL NORTE, PERU COMPREHENSIVE WASTES MANAGEMENT PLAN - PIMAR As part of our commitment to perform the appropriate environmental management of wastes in PPN, and within the corporate standard framework mentioned above, we initiated the implementation and dissemination of a Comprehensive Waste Management Plan –PIMAR for its Spanish acronym-, which main objective is to develop the effective and responsible management of all wastes generated in the operation of the Business Unit Blocks. The PIMAR includes the identification, classification, management and disposal of the wastes generated, involving the entire generation chain: from the hiring and purchase of services and materials, and their transfer to operative areas, to their use, to the disposal of wastes associated to such products, goods and services. Therefore, PIMAR not only involves operative areas, but also requires the engagement of the Supply Chain, Projects, Logistics, Legal Department, etc. The coordinated engagement of all these areas enables the identification and application of effective reduction measures in the place of origin.

During 2014, the implementation focus was placed on the reduction in the place of origin, training and segregation, and temporary storage.

PIMAR Principles • Reduction in the place of origin • Segregation • Reuse, recovery and recycling • Temporary storage • Treatment • Transfer and final disposal • Management control • Training and raising awareness

REDUCTION AT THE PLACE OF ORIGIN SEGREGATION IN 7 COLORS

AMOUNT OF WASTES

REUSE, RECOVERY AND RECYCLING TREATMENT AND/OR FINAL DISPOSAL

Pavayacu, Pluspetrol Norte, Peru.

To achieve reduction in the place of origin, the measures implemented start at the beginning of the process, from the hiring of services and the material and input purchase, to the later appropriate management of wastes generated in the operation. To this aim, we develop workshops which take part in the purchase, transfer and use of materials, in order to evaluate alternatives that enable us to modify: consumption, packaging management (reuse, net weight/gross weight ratio), wrappings use, among others. In turn, in each block, measures to improve general waste management were implemented; the most significant achievement of this phase being the construction of wastes flowcharts, which make use of the “mass balance” concept, connected to the materials coming in into the operation, with the wastes generated

from such materials. This tool has enabled us to identify the main lines of work and to focus actions on implementing improvements in the entire waste management process. Regarding segregation and temporary storage, these are performed at green points, which are sites especially conditioned to store wastes in a temporary and segregated way until their collection by the internal wastes operator. During 2014 the Green Dots they were adjusted to a new color code, voluntarily comforming to the Peruvian Technical Standard 9000 o58-200519, which includes waste classification into 8 types: Reusable: hazardous, organic, metal, plastic, glass, paper, cardboard paper; Non-reusable: hazardous and non-hazardous. This new classification enables a more efficient waste segregation in order to reduce the mass of those that are effectively sent for their final disposal; in this way, we generate 3 Rs alternatives: reusing, recovering, recycling.

19. NTP 900.058 2005: Environmental Management. Wastes Management. Color code for waste storing devices.

Sustainability Report 2014 •

47

ARGENTINA

DRILLING WASTES TREATMENT

DRILLING WASTES MANAGEMENT20 As part of the drilling activities, solid wastes known as cuttings are generated (made up of small pieces of rock and excess mud). In this sense, drilling with the best environmental and quality industry standards requires defining an appropriate methodology for waste management and final disposal as a key aspect of this activity’s environmental management. Some of the techniques used to manage drilling wastes at Pluspetrol are as follows: • Re-injection of drill cuttings. Camisea, Peru. • Assisted landfarming. Bolivia. • Re-injection of drill cuttings. Pluspetrol Norte, Peru.

The system used in Argentina’s operations consists of closed loop circuits set to manage cuttings and drilling muds, in order to reduce the operations’ environmental impact and generation of wastes which later need to be sent to treatment and final disposal. In the case of Neuquén area a treatment plant was set up, where we can separate, through different mechanisms, the muds’ liquid fraction. These fluids are later sent to the Salt Water Injection Plant. The solids remaining from each phase of the treatment process are sent to drying cells where, after being sampled to ensure their innocuity (according to the regulations in force), are disposed of in quarries operated within the framework of Degraded Zones Recovery Projects.

NEUQUÉN AREA PROCESS:

DRILLING EQUIPMENT

MUD

REPOSITORY DEHYDRATION PLANT

FLUIDS

PRETREATMENT

CENTRIFUGAL SEPARATION

FLUIDS

CUTTING

SECONDARY RECOVERY THROUGH SALT WATER INJECTION PLANT (PIAS) (ONLY IN CENTENARIO FIELD PLANT)

CLARIFICATION

CLARIFIED WATER

SOLIDS

SOLIDS (50% HUMIDITY)

DRYING LOT

SOLIDS (35% HUMIDITY)

DRYING CELLS 20. These wastes are not included in the hazardous waste indicator, as they are eventually generated in drilling projects.

48 • Pluspetrol

FINAL DISPOSAL (AUTHORIZED QUARRIES)

ENVIRONMENT

SPILLS MANAGEMENT In case of a spill in any of the sites where our operations are set in, in addition to deploying our response plans in order to minimize potential environmental impacts, we proceed to investigate the causes of such event. The investigation of the causes of a spill is very useful to make the necessary adjustments and improve our actions to prevent this kind of events, both in relation with the facilities’ maintenance and inspection plans, as well as training and awareness actions. SPILL INVESTIGATION PROCESS

INVESTIGATIVE COMMITTEE FORMATION

THE INVESTIGATION IS PERFORMED BY A COMMITTEE FORMED ACCORDING TO THE CHARACTERISTICS OF THE RELEVANT EVENT. THIS COMMITTEE IS MAINLY DEVOTED TO INVESTIGATING THE INCIDENT/ACCIDENT IN ORDER TO FIND ITS BASIC AND IMMEDIATE CAUSES. THE INVESTIGATION INCLUDES INSPECTING THE PLACE WHERE THE EVENT OCCURRED, INTERVIEWING WITNESSES, REVIEWING PROCEDURES, AND ALL THE RELEVANT DOCUMENTATION; AS WELL AS ALL THE EVIDENCE AND BACKGROUND INFORMATION THAT COULD BE FOUND. CONSIDERING ALL THE DATA GATHERED, WE PROCEED TO ANALYZE THE CAUSE-EFFECT. LATER, A FINAL INVESTIGATION REPORT IS GENERATED, WHERE THE PROCESS’ CONCLUSIONS AND RECOMMENDATIONS ARE SHOWN.

INVESTIGATION DUTIES

(Site inspection; witness interviews; procedures review; background analysis; etc.)

CAUSE-EFFECT ANALYSIS

DEFINITION OF CONCLUSIONS AND RECOMMENDATIONS

FINAL REPORT

Another important element that enables us to manage spills is the follow-up and assessment of the corresponding environmental indicator. To this end, we count with a specific procedure for reporting spills, which we classify into three types so as to make a detailed analysis of the trends in every case; the categories are: Hydrocarbon Spills, Mixture Spills (hydrocarbon and water mixtures), and Other Substances Spills (which comprises products not included in the other categories).

Sustainability Report 2014 •

49

Assessment of spill response capacity During 2014 we completed the implementation of the spill response capacity assessment corporate project, which consisted in the assessment of all the aspects that make up an effective response: response preparation, contingency plans, training, human resources and equipment available, and current drill plans in the framework of the Peruvian operations (PPN and Camisea).

HYDROCARBON SPILLS21 VOLUME OF HYDROCARBON SPILLS PER PRODUCTION UNIT, PER OPERATION (BBLS/MMBOE)22 - 2011-2014 EVOLUTION

27.3

27.43

40

30

1.45

2

1.4

0.29

7.13

3.12

0.03

0

0.1

0

1.96

0

0

0.25

0.18

2.6

1.1

10

0

11.9

20

0 Argentina

Bolivia

Camisea | Peru

PPN | Peru

As a result of the analysis a recommendation to build sensitivity maps arose, so as to enable focusing and optimizing response mechanisms in the face of spill events.

Pluspetrol

Angola

Due to the implementation of the abovementioned investigation methodology, we could conclude that during 2014, the spills occurred as a consequence of vandalism have generate higher volumes of hydrocarbon spill (70% of the total volume spilt), although in terms of the number of events occurred, they only represent 24%.

WATER/OIL MIXTURE SPILLS VOLUME OF WATER/OIL MIXTURE SPILLS PER PRODUCTION UNIT, PER OPERATION (BBLS/MMBOE) – 2011-2014 EVOLUTION 69.25

80

7.02

11.08

4.7

8.6

7.13

3.85

12.8 0

0

0

0

0

0

0

0

0

14.65

39.3

20

20.2

40

47.01

60

0 Argentina

Bolivia

Camisea | Peru

PPN | Peru

Angola

Pluspetrol

Spills of other substances This category includes spills of substances other than hydrocarbons, associated to production activities, such as water based drilling fluids, produced water, or injection water. In 2014, the volume spilt decreased 28%, reaching a total of 3.9 BBLS/MMBOE spilt, thanks to the implementation of scheduled maintenance plans, facilities’ inspections, as well as different training courses and awareness raising actions.

50 • Pluspetrol

21. These spills include leaks of crude oil and its derivatives (gasoline, distillates, asphalt, lubricants, kerosene) bigger than 1 barrel, which reach the environment. 1 barrel = 0.162 m3. 22. It does not include spills as a consequence of vandalism.

ENVIRONMENT

CAMISEA, PERU

ENVIRONMENTAL SENSITIVITY MAP OF THE NGLFP23 In Camisea, the elaboration of an Environmental Sensitivity Map was initiated in the marine and coastal environments of the NGL Fractionation Plant and in the buffer zone of the Paracas National Reserve, in order to generate a planning and response tool in the case of contingencies that might happen in the operations and activities related to the Pisco Camisea Marine Terminal. For its preparation, international reference indicators, methodologies and criteria were used, and, as a first measure, the area of influence of the operations was delineated. The subsequent phases included: • Biological resources mapping: it was performed using the vast information on the area’s characteristics offered by the Biotic and Abiotic Monitoring Program conducted by Pluspetrol since 2003. Work was done on the identification of areas with the highest concentrations of individuals and which represent development sites for the most sensitive phases in the lifecycle of certain species. The groups of species that were mapped included those more vulnerable and sensitive to hydrocarbon spills and disturbances related to response activities; threatened, endangered or rare species; and species that have commercial or recreational relevance. • Definition of the kind of coastline: it facilitates determining the capacity of penetration and/or burial and movement of the hydrocarbon on the coast, exposure to waves and tidal energy that determine the hydrocarbon’s persistence on the coast along time, the biological productivity and overall sensitivity, and clean up easiness. • Mapping of stakeholders in the coastal area of influence in Pisco: those that could be potentially involved if an emergency/contingency response event was considered, identifying their vulnerability and resilience in front of a spill event in the coastline and marine environments. This process, still ongoing during 2015, will let us have a strategic Environmental Sensitivity Map, at a 1:50,000 scale, and with tactic maps divided into sectors in 30 quadrants within the area of influence, which show in more detail the areas’ sensitivity that will require attention in case of a spill event. 23. Natural gas liquids fractionation plant.

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POTENTIALLY IMPACTED SITES AND REMEDIATIONS • Investigation, assessment and application of corrective actions in potentially affected sites. In September, 2014, the corporate standard for the investigation, assessment and eventual application of corrective actions in affected soils, sediments and water bodies was approved. The objective of this standard is to ensure: i) that the sites affected or potentially affected by past and/or present operations, are duly investigated and assessed from an environmental viewpoint, and ii) that based on the results of the evaluations performed we proceed to define, implement and assess the effectiveness of the corrective actions necessary to ensure the protection of human health and the environment. In this way we guarantee the application of the best practices and the generation of all the information necessary to support management and operational decisions. Based on the standard, contaminated sites are managed according to 5 phases where the best techniques and practices on the subject are applied, which allow to ensure the traceability and robustness of the whole process.

IDENTIFICATION

PRELIMINARY ASSESSMENT

ENVIRONMENTAL CHARACTERIZATION

RISK ASSESSMENT

REMEDIATION/ REHABILITATION

52 • Pluspetrol 48

PLUSPETROL NORTE, PERU

REGULATORY COMPLIANCE OF SOIL ENVIRONMENTAL QUALITY STANDARDS (SOIL ECA) During 2013 and 2014, the Ministry of Environment (MINAM, Peru) approved the regulatory framework associated to the Soil Environmental Quality Standards (Soil ECA standard, its complementary provisions and technical guides). To comply with this last regulation, PLUSPETROL NORTE (PPN) contracted the environmental engineering company CH2MHill, a leading global environmental services consulting company to, pursuant the current legislation and in line with the international standards, research potential areas of interest in blocks 1AB and 8. Such projects consist of an initial Site Identification Phase, whose objective is to confirm or rule out the existence of affected zones in these blocks by determining whether soil concentrations exceed the environmental quality or background level standards, through the collection of representative samples and the analysis of toxicological or ecotoxicological parameters inherent to the Oil & Gas industry, indicated in the applicable environmental regulations currently in force in Peru. During 2015, we plan to submit to the Authorities the information resulting from the Identification Phase through the submittal of Site Identification Reports.

• Remediations The aim of environmental remediations is to restore the sites that may be impacted by spill events, as well as those sites intervened during operations which, once completed (in the abandonment phase), must be brought back to their previous condition or else, an environmentally safe condition.

Lote 8, Pluspetrol Norte, Peru.

PLUSPETROL NORTE, PERU

LIDERA PROJECT (SPILL CLEANING AND ENVIRONMENTAL REMEDIATION) In the light of the occurrence of a series of spills due to acts of vandalism between 2010 and 2013, the LIDERA Project (Spill Cleaning and Environmental Remediation) was created, led by PPN’s Environmental Management Area. Said project summons highly specialized professionals to carry out control, cleaning and remediation work at the different impacted sites that exist as a consequence of spills derived from acts of vandalism in Block 8. These cleaning tasks involve the implementation of in situ technologies, which represent an alternative to the final disposal of contaminated soils in secure landfills as hazardous wastes. The activities that LIDERA carries out start with hydrocarbon recovery, which involves the removal of free hydrocarbon from the incident zone through physical and mechanical methods. Then, the bioremediation itself is implemented24. In late 2014, the following results were achieved: • 4 environmental incidents have been 100% concluded in relation with the area’s cleaning and remediation. • 9 environmental incidents are being cleaned and remedied. • Recovery of approximately 6675 barrels of crude oil, which have been incorporated into the Block’s production through the installation of connections to the existing oil pipelines, which resulted in substantial resource savings, as airborne transport of fluids from the impacted sites to the batteries was eliminated. • Cleaning and remediation of 34,018.6 m2 of soil. • Implementation of biopile-based bioremediation technologies in an area prepared for that purpose, leading to a substantial reduction in the amounts of transported and disposed hazardous wastes. • Generating work and staff training in the local communities within Bock 8’s area of influence.

ARGENTINA

RESTORATION PLAN FOR “AGUADA BAGUALES” DEGRADED SITES

Before and after the restoration work of a location in Aguada Baguales (Argentina).

24. Bioremediation: Bacterial hydrocarbon degradation process. Different techniques are used to accelerate the degradation rate through the addition of fertilizers containing nitrogen and phosphorus, which in turn favor the proliferation of living microorganisms that degrade the spilt hydrocarbon.

This degraded areas rehabilitation project in Neuquén’s operations started with a survey of the condition of the abandoned well locations in the Aguada Baguales CNQ-12 area, to later determine the necessary environmental remediation works, such as widrawal of calcarous material, closure of old accesses, closure of auxiliary entrance paths, and reduction of existing locations using restoration techniques, thus complying with the province’s legal standards. During 2014, progress was made in reconditioning tasks in 5 locations. The sites have been scarified, access roads have been closed and 6350 m3 total of calcareous material have been carried away (material that was collected for its later reuse in road restoration, works within the field and construction in other locations).

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NATURAL RESOURCES MANAGEMENT WATER MANAGEMENT Our water resource management is aimed at reducing the amount of surface and/or underground water extracted, incrementing reuse of treated water and making use of produced water in the operations where it is generated; it also aims at reducing the amount of domestic effluents generated and implementing industrial and domestic wastewater treatment systems to ensure the discharge quality and harmlessness. On the other hand, Zero Discharge ofproduced water is a standard in all our operations. To meet the water resource management goals, the action pillars are defined as follows: • Adopting the best practices available in the industry, adjusting them to the complexity of the environments where we operate. • Investing in the development of new domestic and industrial wastewater treatment technologies. • Developing process improvements that are key to reducing freshwater use. • Carrying out training and awareness raising campaigns on the efficient use of water.

The uses given to freshwater coming from different surface and underground sources may be grouped in 5 general types : camps and offices, plant consumption, drilling, secondary recovery, and others. The highest consumption is originated in, firstly, plant consumption, which includes industrial processes (such as crude oil treatment), and secondly, the secondary recovery process.

TYPES OF CONSUMPTION

• 6%

OTHERS (IRRIGATION OF GREEN AREAS, PIPELINES, WORKSHOP, PLANT WASH, FIRE SYSTEM TESTS)

• 14% CAMP/OFFICES • 40% CONSUMPTION AT THE PLANT

• 2% DRILLING • 38% SECONDARY RECOVERY

Camisea, Peru.

54 • Pluspetrol

ENVIRONMENT

WATER CONSUMED PER PRODUCTION UNIT, PER OPERATION (MBBLS/MBOE) - 2011-2014 EVOLUTION

• •

UNDERGROUND 1% SUPERFICIAL 99%

• •

UNDERGROUND 96% SUPERFICIAL 4%

• •

UNDERGROUND 91% SUPERFICIAL 9%

• •

UNDERGROUND 2% SUPERFICIAL 98%

• •

UNDERGROUND 25% SUPERFICIAL 75%

0.6

1.1

0.5

1

0.9

0.9

1.5

1.5

1.4

1.6

2

2

2.1

2.5

0.2

0.2

0.04

0.02

0.02

0.03

0.03

0.12

0.04

0.04

0.1

0.5

0 Argentina

Bolivia

Camisea | PERU

PPN | PERU

Angola

Pluspetrol

In all the cases we selected the most appropriate efficient use or water resource reuse alternatives according to the technology available, the operations performed in each site, and the types of consumption and characteristics belonging to the operations.

LIQUID EFFLUENTS: PRODUCTION WATER

Total production

ARGENTINA

BOLIVIA

CAMISEA | PERU

PPN | PERU

ANGOLA

313.84

3.09

0.58

1000.47

1.01

water volume during 2014 (MBbl/d)

Since 2009 we have a 100% of produced water re-injection in all our operations. This means that in all production sites we operate under the “Zero Discharge” concept, in reference to the disposal or reuse of the produced water generated, either by injection in dedicated disposal wells or else through treatment and reuse for other activities. In the PPN and Argentina Business Units (Neuquén and Río Colorado Areas), produced water management is performed through different techniques.

100%

OF PRODUCED WATER RE-INJECTED. INNOVATION AND TECHNOLOGICAL FOREFRONT

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MANAGEMENT OF IMPACTS ON BIODIVERSITY

ENVIRONMENTAL DISSEMINATION AND EDUCATION

BIODIVERSITY CORPORATE STANDARD OF BIODIVERSITY MANAGEMENT In order to establish the general criteria that should be considered for Biodiversity protection and management in the areas of influence of our facilities, activities, operations and new projects, we have a Corporate Standard of Biodiversity Management in force since 2010.

INTERACTION WITH STAKEHOLDERS

BIODIVERSITY STANDARD

PROTECTED AREAS AND SPECIES

TRAINING AND RAISING AWARENESS

RESEARCH AND DEVELOPMENT

1. Habitat loss and degradation (fragmentation) / Changes in the land use 2. Introduction of invasive species 3. Overexploitation 4. Contamination The purpose of the main actions defined in the Standard is to prevent and mitigate those potential impacts; to that, the following lines of work were defined: complying with the applicable legislation, identifying the area of influence and its sensitivity, elaborating thorough biological baselines and developing limited environmental impact evaluations (for new projects), managing Biodiversity impacts, training and raising awareness of our own employees and contractors, promoting biodiversity research by means of programs jointly developed with scientific institutions and other stakeholders.

Biodiversity Monitoring Program (Camisea, Peru). Photograph: Enrique Castro.

56 • Pluspetrol

ENVIRONMENT

MANAGEMENT OF IMPACTS ON BIODIVERSITY Developing biodiversity Baselines, identifying potential positive and/or negative impacts

BIODIVERSITY MONITORING PROGRAM (BMP) IN CAMISEA, 10 YEARS OF IMPLEMENTATION This is a long-term scientific program that, since 2005, performs monitoring in the area, in order to establish whether there is negative impact to biodiversity, and if so what is its extent and origin, while at the same time it generates recommendations for the prevention and mitigation of said impacts on biodiversity in the project’s area. During the 10 years of implementation, 82 monitoring campaigns were carried out -including terrestrial biota, aquatic biota and the use of natural resources in native communities- where more than 80 scientists and 250 native co-researchers participated. Among the contributions to scientific knowledge of the area, there is a registration of more than 2260 terrestrial species (excluding insects), over 700 aquatic species, finding of 6 new species of insects for science, a detailed characterization of the different landscape units, generating information on the different biological groups evaluated: vegetation, insects, amphibians, reptiles, birds, mammals and aquatic biota, and knowledge about the structure and function of the ecosystem monitored. All the information related to the program and its activities can be found in the website www.pmbcamisea.com

CAMISEA, PERU BIODIVERSITY MONITORING PROGRAM (BMP) During 2014, within the BMP framework, the following activities were carried out: Landscape monitoring: characterization and evaluation of the deforestation produced during the installation of heliports and temporary base camps opened during seismic works, and for the installation of all the wells platforms in Blocks 56 and 88. Species and communities monitoring: based on the monitoring activities performed during 2014, and using the information disclosed in the last 10 years, the degree of negative impact and/or recovery in flowlines and wells locations, after 6 years of initiating revegetation activities, were analyzed. Additionally, for this analysis we considered the condition of non-intervened areas with the same type of landscape unit. Concerning the aquatic biota, in 2014, 28 stations were monitored, and a comparative analysis was initiated on the data historically collected in order to evaluate water course trends with similar characteristics, downstream and upstream of Camisea Project. Monitoring Native Communities’ use of resources: analysis of the data obtained in four running years of information compilation, presenting the first trends identified in the access to the use of resources, as well as season analysis and changes in the activities evaluated (hunting, fishing and collection).

IDENTIFYING BIOLOGICALLY SENSITIVE AREAS (BSA) WITHIN THE SCOPE OF 2D SEISMIC OF BLOCK 88: As part of the block’s exploration and development extension program (FEP), a seismic survey was conducted for which a biological support program was designed in order to identify sensitive areas that could be impacted by the seismic design. To this end, a group of 6 biologists worked with the seismic topography teams during July and August defining BSA, such as collpas, animal bathing and feeding places, reproduction zones, water bodies, etc. A total 260 significant BAS and 87 non-significant BAS were identified, which required the displacement of the seismic lines’ location to avoid impact on these areas.

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Monitoring with trap-cams, Biodiversity Monitoring Program (Camisea, Peru).

FULL EXPLORATION PLAN (FEP)

CAMISEA, PERU The UN Special Rapporteur on the Rights of Indigenous Peoples presented in March 2014 a report about the expansion of the Camisea project in Block 88. In this document he collects his impressions after his visit to Peru and to the project in December 2013. He also recognizes ”the Company´s effort to minimize the presence and the adverse impacts of its activities in a geographic area of high sensitivity due to its extensive biodiversity and the presence of indigenous inhabitants”. At the same time, he highlights the off-shore in land model developed by the Company in the Block 88 operations as a “good practice” from the environmental point of view. The full report of the Special Rapporteur on the Rights of Indigenous Peoples can be found at: http://unsr.jamesanaya.org/ esp/special-reports

The Block 88 Full Exploration Plan, FEP, includes the execution of different sub-projects in order to evaluate the exploratory potential, find and develop new hydrocarbon reserves to ensure meeting Peru’s energy needs in the coming years. Block 88 is characteristic for its high environmental and social sensitivity, for which different safeguards have been developed and implemented which facilitate the execution of works respecting and protecting the environment, and among which the following stand out: the heliborne operation modality with no opening of land access roads (off-shore in land), the implementation of a Code of Conduct for Employees and Contractors, the Communication and Consultation Program, the Community Environmental Monitoring Program, and the Anthropological Contingency Plan, as the primary ones. Next, we highlight some of the projects implemented within the FEP framework.

Monitoring big mammals during seismic activities with camera traps. The use of camera traps is a non-invasive method, specific for elusive animal studies and/or animals with nocturnal or crepuscular habits that often avoid human presence, being their recording through other methods rather limited. This technique, which consists of a photographic record, provides evidence of the presence -and even identity- as well as activity patterns of many species. In 2014, the BMP implemented the “Big mammals monitoring during seismic activities with camera traps”, with the aim of evaluating the potential impact related to the exploration activities of the 2 D Seismic Project of Block 88. Monitoring covered the period of activities associated to the seismic survey with the installation of 34 camera traps. A total 341 registries were obtained, which included 19 mammal species, some of which arecategorized as endangered. As an important registry it is worth highlighting the presence of two species of bush dogs (Atelocynus microtis and Speothos venaticus) with (VU/NT) threat category, extremely rare and difficult to observe. Recovery, Maintenance, Relocation of Epiphytes from Central Kimaro Platform in Block 88 It was initiated during the forest clearing performed in the location, through the identification of epiphytes (orchids and bromeliads) in felled trees. These species were transferred to a greenhouse especially designed for this purpose. Once stabilized, the epiphytes were relocated on host trees, thoroughly selected, having previously set for this purpose election criteria according to the conservation state, vulnerability, diversity, predominance, phytosanitary state, and others that enable ensuring the continuity of every identified species. 3035 epiphyte individuals were rescued, relocating 1562 individuals. In November, 2014, the first relocated epiphytes monitoring was performed to determine their survival rate, evidencing a low mortality rate (8.65% three months after relocation). Based on the results obtained via the application of strict technical criteria, it’s been demonstrated that it is possible to transfer species of vascular epiphytes to new natural habitats, ensuring the survival of these species without altering the existing diversity, constituting a conservation alternative to reduce the environmental impact in a highly sensitive zone.

58 • Pluspetrol

ENVIRONMENT

ENVIRONMENTAL DISSEMINATION AND EDUCATION Supporting education campaigns and disseminating Biodiversity conservation actions.

CAMISEA, PERU SOCIALIZATION AND DISSEMINATION OF RESULTS OF THE BIOTIC AND ABIOTIC MONITORING PROGRAM IN PISCO We keep promoting the participation of local authorities in the monitoring program’s field activities; in 2014, staff from the following institutions took part: Paracas National Reserve (RNP), Guano Isles, Islets and Points System National Reserve (RNSIIPG), Peru Sea Institute (IMARPE), Pisco Port Harbormaster (CAPISCO), Río Seco Local Water Authority (ALA-RS), Environmental Committees from Local Municipalities and Universities. Besides, the Program results are shared and disseminated to the local authorities. Additionally, the Program results are disseminated through the following activities: • Anomalous events report (algal blooms, species morality) to Pisco Port Harbormaster, Paracas National Reserve, Guano Isles, Islets and Points System National Reserve. • Result dissemination to 338 Camisea workers and from contractors companies, during an awareness raising day that includes a visit to Paracas Bay, a demonstrative plankton monitoring, and a visit to Ballestas Islands (habitat of sea wolves, penguins and guano birds); to later visit the Interpretation Center of the Paracas National Reserve (RNP). • Results external dissemination to 465 students and 967 stakeholders from our area of influence, among which there were RNP, RNSIIPG, Paracas Municipality, Pisco Municipality, San Andrés Municipality, Universities, and Schools. • Identification of Contamination Sources Study in Paracas Bay, carried out by the Río Seco Local Water Authority (identified sources not related to our activities). • Huerequeque (Burhinus superciliaris) nesting research in the surroundings of the PFLGN Landscaping Project, presented in the Ornithology National Congress.

ANNUAL BMP WORKSHOP The annual workshops on results dissemination are framed within the communication actions carried out by the BMP, which aim is to spread the information generated by the Program. Based on a transparent process, it provides concrete contributions to the scientific community, the Oil and Gas sector, government bodies, and the civil society in Peru, through significant information. In 2014, the event was held on June 3 in Lima, Peru. The panel of speakers comprised four experts, BMP Scientific Committee leaders, who presented the main results of the year concerning the contributions of the Program in terms of Biodiversity Management, Scientific and Communication results. Other presentations made in 2014: • Bird Monitoring in Lower Urubamba Basin and Effectiveness of Mackinnon Lists, Counting Points and Mist Nets. IX Ornithology National Congress Ayacucho, Peru. • Biodiversity Monitoring Program in Camisea. 10 Years of Implementation. VIII INGEPET, Lima. • Landscape Changes Associated to the Camisea Project Development Its Evolution Along Time. VIII INGEPET, Lima. • Characterization and Ecosystemic Services of the Amazonic Forest Pacal in the Lower Urubamba, Cusco, Peru. XI Latin American Botanical Congress Salvador de Bahía, Brazil. Participation via the setting-up of a PMB stand in the Society of Petroleum Engineers (SPE) in June, 2014.

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59

Malvinas Plant, Camisea, Peru.

IMPACT REDUCTION AND PREVENTION

CAMISEA

COMPLIANCE WITH IFC PERFORMANCE STANDARDS

RESPECT FOR NATIVE COMMUNITIES

10 YEARS OF CAMISEA - PERU The Camisea project is developed in a complex scenario, from both the environmental and social point of view. On the one hand, the operations are carried out in a sensitive natural ecosystem, which is the Tropical Forest of the Lower Urubamba valley (Cusco, Peru); this zone is categorized as a Biodiversity Hotspot26, included in the “Global 200”27; besides, Block 88 is situated within the buffering zones of Manu and Otishi National Parks. Likewise, the project’s area of influence is inhabited by indigenous population with different levels of organization, while part of the block is located within the Kugapakori Nahua Nanti Territorial Reserve28. Understanding this environment’s complexity, since the Camisea project design phase environmental and social management was considered a key aspect when it came to defining operational alternatives and techniques in all the activities involved in the process. The starting point for all socio-environmental considerations was the participative design of the consultation process, which was done in the early stages of the project, enabling the identification of the communities’ specific concerns and interests through the dissemination of clear and accurate information in over 50 workshops held. The consultation process generated a series of commitments with the stakeholders, which are embodied in the following general considerations:

60 • Pluspetrol

SOCIO-ENVIRONMENTAL CONSIDERATIONS BEFORE THE PROJECT

DURING THE PROJECT

PARTICIPATIVE DESIGN

PMAS

COMMITMENT WITH STAKEHOLDERS

COMMUNITY OUTREACH PLAN

ESIA

SPECIFIC PROGRAMS

ENVIRONMENT

Another milestone in the project was the development of the Environmental and Social Impact Assessment (ESIA), which was carried out under the IFC, the World Bank and Peruvian legislation guidelines. The social and environmental baselines were built thoroughly considering participation of the local communities.

Based on the impacts identified and evaluated in the ESIA, a series of distinctive management tools, as well as best practices were defined and applied, which nowadays constitute a standard in the development of hydrocarbon activities in rain forest zones:

TOOLS

BIODIVERSITY MONITORING PROGRAM

ARCHEOLOGY AND CULTURAL RESCUE PROGRAM

COMMUNICATION AND CONSULTATION PROGRAM

CODE OF CONDUCT AND STAFF TRAINING

LOCAL EMPLOYMENT PROGRAM

PARTICIPATIVE MONITORING PROGRAM (PMAC + FLUVIAL COMMUNITY SURVEILLANCE)

ENVIRONMENTAL MONITORING PROGRAM

ACCESS CONTROL PROGRAM

ANTHROPOLOGICAL CONTINGENCY PROGRAM

AGREEMENT, COMPENSATION AND INDEMNIFICATION ESTABLISHMENT PROGRAM

BEST PRACTICES

PIPELINE SPECIFIC DESIGN

OFF-SHORE IN LAND

EROSION AND REVEGETATION CONTROL

MINIMUM USE OF THE LAND

DRILLING CUTTINGS RE-INJECTION

GUIDED DRILLING

HELITRANSPORTABLE SEISMIC

INTERVENED AREAS RECOVERY

26. According to Conservation International (CI) 27. According to World Wildlife (WWF). 28. The RTKNN was created in 1990 as a State Reserve; inside it, populations with different levels of contact reside, some of them settled and others in voluntary isolation.

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01

SOME OF THE PROGRAMS CURRENTLY ONGOING IN CAMISEA: PARTICIPATIVE MONITORING PROGRAM By means of this program, Pluspetrol seeks to increase the efficacy and efficiency of the monitoring and supervision actions in the Camisea operations, through the participation of local population. In this way, we can generate and record reliable and accessible information, via the community, for its use by the local population, Pluspetrol and interested organizations. In turn, this program has two segments: one is the Lower Urubamba Community Environmental Monitoring Program, which is directed to the community monitoring of environmental aspects, and the other one is the community fluvial surveillance Program aimed at monitoring fluvial transport in Urubamba and Camisea rivers.

SOCIO-ENVIRONMENTAL MONITORING Continuous follow-up and observations of both aspects

04

COMMUNICATION AND DISSEMINATION Skills development and training

TRAINING AND COORDINATION COMMITTEE Reliable registry and experience sharing

PMAC

02

ENVIRONMENTAL EDUCATION Awareness raising on the environment and initiatives coordination

03 COMMUNITY ENVIRONMENTAL MONITORING PROGRAM (PMAC) This program has 4 components and its main objective is to promote and implement the actions necessary to ensure conservation of the environment by contributing in maintaining biodiversity, and encouraging the use of sustainable resources for the development of a conservation culture in the local communities. All the information gathered during the monitorings is duly recorded and, if potential deviations to the applicable procedures are identified, relevant corrective measures are implemented. At the same time trainings, workshops and talks are coordinated in order to disseminate the program’s results, share experiences and generate awareness about the environment.

22 COMMUNITY MONITORS WORKING FOR 8 YEARS

COMMUNITY FLUVIAL SURVEILLANCE OBJECTIVES 1. ONGOING FLUVIAL TRANSIT COMMUNITY MONITORING. 2. COMMUNITY VERIFICATION OF THE PROJECT’S FLUVIAL TRANSIT REGULATORY COMPLIANCE. RESULTS 1. PROMOTION OF LOCAL WORKMANSHIP EMPLOYMENT IN RIVERSIDE COMMUNITIES.

OPERATION FOLLOW-UP RESULTS OF THE COMMUNITY ENVIRONMENTAL MONITORING PROGRAM 10 YEARS AFTER INITIATING CAMISEA

POTENTIAL IMPACT EARLY IDENTIFICATION

2. 22 SURVEILLANCE BOOTHS ALONG URUBAMBA AND CAMISEA RIVERS. 3. 40 FLUVIAL WATCHMEN FROM 20 COMMUNITIES.

62 • Pluspetrol

ONGOING DIALOG CHANNEL WITH THE COMMUNITIES

ENVIRONMENT

ENVIRONMENTAL MONITORING PROGRAM The objective of this program is to evaluate physical and chemical conditions of the environmental factors as air, surface water, groundwater and soil. To this end, through a system of monitoring stations located upstream and downstream of our facilities, a number of parameters are measured: • Air quality • Emissions • Surface water quality • Groundwater quality • Soil characteristics This program ensures that none of these factors is affected as a result of the activities carried out by the Camisea project. BIODIVERSITY MONITORING PROGRAM (BMP) OBJECTIVE: THE SYSTEMATIC EVALUATION OF BIODIVERSITY TO DETECT CHANGES OR DISTURBANCES. The BMP generates contributions to biodiversity management via recommendations for decision-making. Among the topics addressed are included the information for the selection of better alternatives from the environmental viewpoint in the definition of pipeline routings; implementation of procedures when encountering fauna; identification of highly sensitive areas from the biodiversity point of view; identification of recovery-delayed sectors; invasive exotic species mapping; and staff training, among others. In 10 years of implementation, some scientific conclusions were drawn: • The Camisea Project’s landscape footprint is of about 481 hectares, and it represents less than 0.2% of the project’s total area (Block 88, Block 56 and Malvinas Plant area), confirming that the implementation of Pluspetrol’s work methodology, consisting of a scheme with no roads construction and closing and reforestation actions, is critical to minimize impact on the ecosystem. • The edge effect associated to flowlines opening was studied. In different vegetation indicators, an effect was checked up to 25 m from the center of DDV. For specific indicative groups (such as beetles), we observed a gradual increase in the richness of the species, from the flowline edge to 50 m. • The limnological parameters evaluated in water courses present normal values for Amazonian waters, and the variations observed are related to the climate conditions and the basin’s location.

Biodiversity Monitoring Program (Camisea, Peru). Photograph: Enrique Castro

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COMMUNITY WE PROMOTE A HARMONIC RELATIONSHIP WITH THE COMMUNITIES OF THE AREAS WHERE WE OPERATE, PURSUING TO FAVOR THEIR LIFE QUALITY AND DEVELOPMENT, PRESERVING BIODIVERSITY AND LOCAL CULTURES.

SOCIAL INVESTMENT

PARTICIPATORY PROCESSES

INDIGENOUS COMMUNITIES

LOCAL EMPLOYMENT

COMMUNITY COMMUNITY COMPANIES

COMMUNITY DEVELOPMENT

64 • Pluspetrol

INSTITUTIONAL STRENGTHENING

One of Pluspetrol’s strengths is its capacity to perform in sensitive socio-cultural and geographical environments. To achieve and sustain such capacity in time, it is imperative to achieve an efficient leadership and management of resources and the relations with local communities. In this respect, the implementation of the best practices in the industry and the continuous improvement of our operations add value to the care and conservation of the environment and the local communities, and they contribute in the strengthening of stakeholders’ development skills. Marisol Rodríguez Vargas Community Affairs Corporate Manager

Villa Trompeteros, Loreto. Pluspetrol Norte, Peru.

Sustainability Report 2014 • 65 57

MANAGING OUR RELATIONSHIP WITH THE COMMUNITIES The social management that we perform seeks to consolidate relations that generate value for the company and stakeholders. Particularly, we work with the communities based on social management standards that gradually enhance our performance. Such standards set guidelines to detect and timely prevent our projects’ potential impacts on the local populations, their lifestyles, culture and/or territories. In this way, the corporate community action standard establishes the general guidelines for establishing relations with local communities, while enabling each Business Unit to be able to respond to particular challenges of their socio-cultural context. In turn, the corporate social investment standard incorporates the criteria to be considered in defining and directing social economic investment, as part of our project and operation sustainability strategy. Another corporate standard which is part of the set of documents that guides our social management is the one referred to land acquisition and involuntary resettlement, which establishes general guidelines for the development of an orderly and consensual land acquisition process for its use during the operational phase.

SOCIAL MANAGEMENT GUIDELINES DURING THE PROJECT’S LIFE CYCLE

ASSESS AND SELECT

DEFINE

EXECUTE AND OPERATE

ABANDON

66 • Pluspetrol

• Stakeholders indentification and early assessment of the social conditions in the area At the initial stages of assessment and selection of a production site, activities focus on identifying and mapping stakeholders, in addition to performing an early analysis of the social condition of the area. • Strengthening and development of projects Definition of projects through participatory mechanism and strengthening of relations with stakeholders, fostering mutual approach and understanding. Concurrently, compensation mechanisms for communities are evaluated as regards any potential impact generated by our presence in the area. • Management of social impacts and Implementing social investment plans During the operation stage, projects are continued with local communities, and social investment plans are organized. During the abandonment stage, we weork to minimize social impact on the areas reverted.

COMMUNITY

SOCIAL INVESTMENT Pluspetrol’s growth depends on all of our stakeholders’ growth. Hence, our efforts are focused on contributing to generating economic opportunities and improving the life quality of the local communities in the areas surrounding our operations through different productive initiatives and entrepreneurships; always preserving identities, customs, culture and traditional values. By means of programs led by the different Business Units, community relations teams develop sustainable plans and projects, aimed at promoting the local population’s skills and capabilities, with medium and long-term economic initiatives, and therefore contributing to local and regional development. Education, Healthcare, Institutional and Productive Strengthening, and Community Development are all considered priority work lines which we implement transversally throughout the company.

EDUCATION

COMMUNITY DEVELOPMENT

COMMUNITY PROJECTS

HEALTH

INSTITUTIONAL AND PRODUCTION STRENGTHENING

Camisea, Lower Urubamba, Peru.

Sustainability Sustainability Report Report 2014 2014 •• 50 67

EDUCATION HIGHLIGHTED PROJECTS

WHAT DO WE SEEK? TO STRENGTHEN THE EDUCATIONAL QUALITY OF OUR COMMUNITIES

WHAT DO WE WORK ON? EDUCATION PROGRAMS BASIC INFRASTRUCTURE SCHOLARSHIP PROGRAMS

ARGENTINA

MUSIC AS A LEARNING AND VALUE-SHARING TOOL “Among violins and cellos, musical stimulation” is a project that Pluspetrol carries out together with School No.234 from the City of Plottier, within the framework of the “School Projects Support Program” that the company has been conducting during the last 4 years in the South District, supporting initiatives associated with technology, physical activities, libraries, art, among others. We work jointly with the headmasters and teachers of this school, located in one of the access roads to the Centenario Oilfield and close to several company’s facilities, it is attended by kids from poor neighborhoods in the eastern area of the city. In 2014, we decided to create a children orchestra with pedagogical purposes, to promote social inclusion through music, which is appreciated as a tool that consolidates values such as discipline, solidarity, collective sense and intellectual development. For the project, the School arranged the contribution of two workshop leaders, in charge of children pedagogical and training aspects, while from Pluspetrol we committed ourselves to provide the required instruments. Since June 2014, the project has been running with a significant participation of children from the school and the neighborhood on an extracurricular schedule.

PLUSPETROL NORTE, PERU

TECHNOLOGY TO TRAIN AND PROVIDE HOPE Since 2014, Pluspetrol has contributed to a project that the organization Kuepa runs in the Nuevo Andoas native community (Block 1AB), in order to train young people who were not able to complete their high school studies through an online platform. The 8-month long project is supported by the Department of Education and is conducted with the consent and participation of the High School’s headmaster, parents and students. The Kuepa organization has ample experience in this kind of digital education experiences, which are being performed in different parts of the world. By means of a modern platform, it facilitates distance learning or face to face learning, with excellent digital educational content. From Pluspetrol we facilitate the program’s integration in the Nuevo Andoas community. Our IT staff was responsible for the implementation of the infrastructure to support the project, installing 8 new networked computers in the Variante Agropecuaria school. Up right: Plottier, Neuquén, Argentina. Down left: Block 1 AB, Pluspetrol Norte, Peru.

68 • Pluspetrol

At the program’s launch, 12 youths from the Nuevo Porvenir, Alianza Capahuari and Nuevo Andoas communities participated, subsequently joined by 7 youths from Los Jardines native community.

COMMUNITY

Educational Projects BU

PROJECT

LOCATION

2014 RESULTS

Argentina

Scholarship program for university students.

Ramos

Financial help is provided through a fixed monthly amount to cover the university courses of scholars. Like the previous year, during 2014 scholarships were granted to 14 students.

Forest Nursery Project at Cornejo Agricultural School. New Project.

Ramos

It is a new project aimed at producing native plants for reforestation efforts. During 2014, sprinkler irrigation materials were acquired.

Bolivia

Support to productive indigenous community projects.

Tacobo and Tajibo

We continued providing financial and material support to educational programs in 17 Guaraní communities from Tacobo and 13 indigenous communities from Tajibo.

Camisea, Peru

Pilot Environmental Education Program for basic level Educational Institutions in Pisco province.

Pisco, San Andrés and Paracas

Strengthening of values, attitudes and skills of students and teachers from 10 institutions, with an emphasis on neighborhood environmental education and knowledge of nearby protected natural areas. In 2014, a total 5,980 students were trained.

Technical Training Program for 4th and 5th year high school students as Maintenance Mechanic Assistant

Pisco

Technical training for employment opportunities in the short-term. In 2014, 100 4th and 5th year students from the Raúl Porras Barrenechea, José de San Martín and Renán Elias Olivera schools were trained.

Success Program - Young People Entrepeneuring for Success New Project.

Pisco

Training and strengthening young entrepreneurs’ business knowledge. During the first year, 200 young people were trained, and 15 entrepreneurs won the “capital semilla” (seed capital), a stimulus given in order to establish the business idea.

University Scholarships Program –UCSS NOPOKI–.

Native communities from Camisea, Kirigueti and Nuevo Mundo, in Lower Urubamba

Professionals are developed under an intercultural, bilingual approach. Continuing with the program, in 2014, twenty one young people (7 women and 14 men) from Kirigueti, Nuevo Mundo, Timpía, benefitted from the university study scholarships on Basic Intercultural Bilingual Education, Agricultural and Forestry Engineering, and Administration.

Local Educational Management Support Program. New Project.

Nueva Jerusalén (Block 1AB).

Support for the educational quality of the community students is provided. Services of a pre-university education professor were hired and 12 students were successfully trained.

Pluspetrol Norte, Peru

Down left: Camisea, Lower Urubamba, Peru. Up right: Gral. Mosconi, Salta, Argentina. Center right: Camisea, Lower Urubamba, Peru. Down right: Lower Urubamba, Peru.

Sustainability Report 2014 •

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HEALTH HIGHLIGHTED PROJECTS

WHAT DO WE SEEK? TO ENHANCE AND PRESERVE OUR COMMUNITIES’ WELL-BEING.

WHAT DO WE WORK ON? PREVENTION PROGRAMS BETTER ASSISTANCE HEALTHCARE SERVICES

ARGENTINA

INDIGENOUS COMMUNITY’ HEALTHCARE Since 2005 Pluspetrol has actively contributed to the AMTENA (Thomas Elkins Norte Argentino Health Care) program, whose objective is to contribute to health care in indigenous peoples communities that live in the Santa Victoria Este and neighboring areas, 170 km east of Tartagal. During 2014, Pluspetrol and the province of Salta collaborated by ensuring the logistics for both doctors and patients. In the two campaigns run during the year, a total of 3655 patients were assisted: 961 clinical visits, 916 pediatric visits, and 845 gynecological visits; besides, 499 gynecological studies were performed, as well as 676 imaging tests and 257 dental visits. By late 2014, a specific campaign of surgical operations was carried out for the first time, where 19 professionals from the Británico and Italiano Hospitals participated.

BOLIVIA

COMMUNITY HEALTHCARE SERVICE Through the Solidary Medical Group (GRUMEDSO), throughout 2014 we continued providing primary health care to neighbors from the 31 communities in the area of influence of Tacobo, Tajibo and Curiche fields, with the aim of performing health diagnosis focused on illness prevention, as well as providing pharmacological treatment when required. This year, 155 service days were completed, and 4,978 patients were assisted (830 more than in 2013). The most frequent pathologies were acute respiratory infections (29%), musculoskeletal conditions (18%), gastrointestinal conditions (17%), and cardiovascular illnesses (13%).

70 • Pluspetrol

COMMUNITY

Healthcare Projects BU

PROJECT

LOCATION

2014 RESULTS

Argentina

“Pluspetrol and Schools” Healthcare plan.

Neuquén Area

Dental, pediatric and ophthalmologic assistance to school-age children. In 2014, 1,406 dental visits were made (with 5187 services) as well as 1,385 pediatric visits. Additionally, in the ophthalmology area, 551 visits were performed and 232 pairs of glasses were delivered.

“Healthy to school” Healthcare Plan.

Ramos

In 2014, we worked all year round at Coronel E. Vidt School in General Mosconi, to detect and solve basic dental (with 7,684 services), pediatric (with 1,408 services), ophthalmological issues (860 pair of glasses were delivered), and to refer high risk cases to Public Health Centers (457 derivations).

Camisea, Peru

“Zero Cavity” Program New Project.

Pisco, San Andrés and Paracas

Dental health assistance aimed at reducing the risks associated with dental cavities, in the framework of the Interinstitutional Support Agreement entered into with San Juan de Dios Hospital from Pisco. In 2014, over 1,300 boys and girls of between 3 and 11 years of age, from three educational institutions (kindergarten and elementary school) benefitted from it.

Pluspetrol Norte, Peru

Healthcare Program - Medical Campaigns.

Block 1AB

Access to health is favored for indigenous communities (assistance, medical tests and medicines). During 2014, 17,706 medical consultations were delivered at health stations in Block 1AB, besides the medical campaigns in Pastaza and Tigre basins communities.

Prevention and Health Care. “Health Promoters Training”.

Block 1AB

Health promoters training within the communities. During 2014, we continued training 27 young people through courses deliverd by qualified professional in Andoas and San Jacinto medical units.

Provision of Community First-Aid Kits

Block 8

In 2014, we provided the Native Communities from Patuyacu and Chambira basins with community first-aid kits containing basic medicines. The material was delivered to local health promoters.

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71

INSTITUTIONAL STRENGTHENING HIGHLIGHTED PROJECTS

WHAT DO WE SEEK? TO FOSTER SELF-MANAGEMENT OF SOCIAL ORGANIZATIONS

WHAT DO WE WORK ON?

SELF-MANAGEMENT SKILLS CAPABILITIES

BOLIVIA

SUPPORT TO COMPREHENSIVE PROJECT MANAGEMENT Pluspetrol continues working jointly with FUNDESOC to support the comprehensive and social management of development projects for 30 indigenous communities of the Guaraní People Assembly Captaincy (APG), North Charagua. During the reporting period, 13 water projects were managed for those communities; we helped arrange the funding for the execution of the Social Housing Construction program for 5 communities.

CAMISEA, PERU

TECHNICAL GUIDANCE TO COMMUNITY COMPANIES During 2014, Pluspetrol continued supporting and providing technical guidance to transport community companies that belong to the CISA Consortium, in the Ucayali Region, through the Business Strengthening Program in Atayala. With the aim of improving the management capacity of community companies and settlers who provide fluvial cargo transport, during this period we worked on diversification tasks, and we managed to help them become providers of other companies, both private and state-owned. Also, we provided guidance related to the constitution and formalization of CISA SAC.

Up right: Bolivia.

72 • Pluspetrol

COMMUNITY

Institutional Strengthening Projects BU

PROJECT

LOCATION

2014 RESULTS

Argentina

Family Foundation.

Neuquén Area

Support to productive projects and community support to project entrepreneurs: native thinking, green horizon, microenterprises bank and pig production.

Bolivia

Headquarters construction for APG Captaincy in Charagua Norte. New Project.

APG Captaincy, North Charagua.

With resources from the TCB-X1002ST well compensation, the construction of the Captaincy’s new headquarters in Charagua was financed.

Camisea, Peru

“Carlos Laborde de Sepahua Institute Capabilities Strengthening” Program. New Project.

Atalaya

Project management, development of skills on cacao growing, and infrastructure and equipment enhancement. In 2014, technicians and producers specialized in cacao growing were trained.

Framework Commitment subscribed this year with the provincial municipality of Pisco and local governments. New Project.

Pisco

A money contribution was established for the execution of social, economic and infrastructure projects in a 5-year period: cleaning service and green areas enhancement to mitigate environmental impact in Pisco; and installation of sewage, house connections and wastewater treatment facilities in San Emilio, San Jacinto and Zarate Emilio neighborhoods.

Institutional Strengthening Program in Indigenous Federations.

Communities from Pastaza, Corrientes and Tigre basins (Block 1AB and Block 8)

Strengthening of environmental and public management capabilities of the organizations. Agreements were reached with the Corrientes River Federations (FECONACO and FECONAT) in order to finance informative workshops.

Gastronomic and hotel management training center in Villa Trompeteros.

Block 8

The Center has a training plan in place for young people from the region to develop restaurant and hotel hospitality skills. In 2014, thirty-seven students graduated.

Pluspetrol Norte, Peru

Skills strengthening. New Project.

Basic Welding Course. New Project.

Block 1AB

Block 1AB

Young people from the communities are trained to meet the needs of contractor companies that work inh Block 1AB. They were trained in welding, brick laying and vehicle driving services. In 2014, 19 people from the communities were trained in the welding course, 18 in the brick laying course and 20 in the vehicle driving course. In 2014, training was delivered by the National Service of Industrial-Technical Training (SENATI) in the Andoas base, with a duration of 100 hours. Certificates with national recognition were delivered. 19 inhabitants from the communities took part in it.

Down left: Centenario, Neuquen Area, Argentina. Up right: Centenario, Neuquen Area, Argentina. Down right: Pisco, Peru.

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COMMUNITY DEVELOPMENT HIGHLIGHTED PROJECTS

WHAT DO WE SEEK? TO ENCOURAGE PRODUCTIVE INDEPENDENCE AND INFRASTRUCTURE STRENGTHENING

WHAT DO WE WORK ON? SUSTAINABLE PRODUCTION ENTERPRISES ENHANCEMENT OF INFRASTRUCTURE AND UTILITY SERVICES

ARGENTINA

A COMMUNITY AND ENVIRONMENTAL ALTERNATIVE “Native Thinking” is a project started four years ago in North Valentina (Neuquén Area), based on the interaction of a local NGO (Fundación Familia), the Environment and Health School of the Comahue National University and Pluspetrol. The project has a community and environmental objective. A group of young women received training from the University to implement a nursery and greenhouse and produce local flora seedlings to be used to revegetate degraded areas. The sale of these seedlings generates the support for the youths who benefit from it. For this initiative, Pluspetrol contributed a 4 hectare site, and built the nursery, the hardening site and the irrigation systems. The Environment and Health School is in charge of the project’s technical management and the attendees’ training. Additionally, Fundación Familia accompanies the whole process considering the social risk environment the participants come from. During 2014, we worked on seeds collection and planting, and raising of native species for further sale. Approximately 20,000 seedlings of 8 different species were produced and sold.

BOLIVIA

AGREEMENTS AND PRODUCTIVE PROJECTS FOR WATER AND ECOSYSTEMS CONSERVATION The aim of this Interinstitutional Agreement between Fundación Natura, North Charagua APG Captaincy and Pluspetrol is to preserve the captaincy’s water resources and its 30 communities, in order to ensure long-term water supply for human consumption, food security, the environment and the development of economic activities. As part of this project, the implementation of Water Reciprocal Agreements (WRA) is considered, where water users downstream in the basin support upstream communities or farmers through development projects in order to preserve or restore ecosystems relevant for the provision of domestic use and irrigation water. For its implementation the participating municipalities, the entity that renders the water service, irrigators, NGOs and Pluspetrol provide about 80% of the economic resources that will be invested upstream. The resources collected are managed by local institutions and the value of the retribution is decided during participatory processes. During 2014, the socio-economic diagnosis of 30 captaincy communities was performed. Likewise, a water potentiality inventory and a water systems diagnosis are being carried out. 74 • Pluspetrol

COMMUNITY

Community Development Projects BU

PROJECT

LOCATION

2014 RESULTS

Argentina

“This is Rhythm” Project.

Neuquén Area

An arts engagement forum for children and school age kids, through dance classes. In 2014, 270 students from 8 schools and a community center in the cities of Neuquén and Centenario took part in it. Three public performances were made with an overall number of 3,000 spectators.

Support to the North Valentina Neighborhood Center.

Neuquén Area

We support the development of activities to improve the neighborhood’s life quality. In 2014, there was a contribution of 2,500 meters of drinking water pipelines, streets conditioning, support to popular festivities, power line cables and poles.

North Valentina Genetic Lodge.

Neuquén Area

Development of a genetically-controlled pork breeding lodge to contribute to poor local producers. Construction of a barn was initiated, which will serve as a breeding center. At present, there are 30 animals under control and breeding.

Cobblestone Project. New Project.

Ramos

Cobblestone production for articulated pavement, together with Mosconi Municipality and Unemployed Workers Union (UTD) from Cornejo locality. By mid 2014, Pluspetrol gave UTD, under loan for use, a cobblestone maker, as well as aggregates and cement to manufacture 3,000 cobblestones. At the end of the year, the entrepreneurship is under operation, making its first sales.

Construcción de sede social para Community de San Silvestre. Proyecto nuevo.

Curiche

Phase 1 of the community center construction was completed for the San Silvestre community to have a place where to hold meetings and cultural activities.

Mejoramiento del Matadero Municipal Abapó Sur. Proyecto nuevo.

Curiche

The municipal slaughterhouse has been enhanced and is already operative, which will enable the community to have a space to slaughter animals in optimal health conditions.

Construcción de un parque infantil. Proyecto nuevo.

Curiche

Construction of the playground was concluded and it was officially handed over to Abapó community, for the children to have a healthy recreational environment.

Support for procurement and purchase of traditional fishing equipment within the framework of the emergency program for Traditional Fishermen, through Fondepes.

San Andrés, Paracas and Pisco localities, Ica Department

Loans. In 2014, 1,125 fishermen were granted a loan.

“Water and Sanitation - Elevated Reservoir Construction in Santa Cruz sector, Paracas district” Project.

Paracas localities, Province of Pisco, Ica Department.

Paracas inhabitants’ life quality is improved by means of the provision of drinking water to their homes. The elevated reservoir construction was completed, which will benefit 7,400 inhabitants from the Paracas district.

“Our Well-Being” Project.

Amazonian indigenous communities from Lower Urubamba (Camisea, Shivankoreni, Cashiriari, Segakiato, Kirigueti and Nuevo Mundo).

The development of individual, collective and institutional capabilities to improve relations among family members. During 2014, together with Flora Tristán Organization, the actions focused on two components: Matsiguenga women development program and “My Healthy Home” program. 90 craftswomen from 6 communities, 40 children, 80 local workers, 6 directive boards, and about a hundred inhabitants were benefitted.

Improvement of streets, rehabilitation of the water network and building of sidewalks and pavements. New Project.

San Andrés localities, Province of Pisco, Ica Department.

Improvement of the living conditions of 4,000 district inhabitants. During 2014, 42% of the work was completed.

Bolivia

Camisea, Peru

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75

COMMUNITY DEVELOPMENT PROJECTS

Community Development Projects BU

PROJECT

LOCATION

2014 RESULTS

Pluspetrol Norte, Peru

Construction of community and family fish farms.

Pijuayal, Valencia, San José de Nueva Esperanza, Peruanito and Boca de Copal (Block 8).

Community self-support. 15 fish farms were built. Families received guidance on fish farm management in the beneficiary communities.

Obras de infraestructura para Communityes nativas.

Block 8

Pedestrian walkways in San Juan Nativo, Nuevo San Martín, Santa Elena and Nuevo Porvenir; pedestrian bridge in the Cuchara community; expansion of the school premises in Dos de Mayo community; construction of a community facility for Santa Rosa’s native community. Also, we are building the kindergarten education center in Santa Elena; and progress was made in the construction of two community facilities in S.J. Campesino and Las Palmeras.

Basic, educational and community interest infrastructure development projects. New Project.

Alianza Capahuari, Tituyacu, José Olaya, Doce de Octubre, Vista Alegre, Andoas Viejo, Pañayacu, Los Jardines, Alianza Topal, Sauki, Antioquia, Pampa Hermosa, Alianza Topal (Block 1AB).

During 2014, progress was made in the following projects: maintenance of 3.5 km of the Capahuari road – Tambo (70% progress); electrification system complementary work (37% progress); repairs to the current electrification system (95% progress); improving the electric system in the community changing poles and installing solar panels (25% progress); construction of the kindergarten educational center facility (75% progress).

Delivery of agreed-upon goods and works to native communities. New Project.

Block 1AB

Two portable sawmills were delivered (and installed) to Sauki and Vista Alegre native communities, and teaching material was delivered to the Titiyacu community. Besides, two community works were concluded: a church for the Titiyacu community and a health cabin for Los Jardines community.

HIGHLIGHTED PROJECTS

Camisea Native Community, Lower Urubamba, Peru.

76 • Pluspetrol

COMMUNITY

Villa Trompeteros, Loreto, Peru.

16.2

18.6

20,000,000

15.5

During 2014, Pluspetrol assigned US$ 16,242,937 to projects selected based on corporate standards for community action and social investment, with the permanent and active engagement of the communities and beneficiary localities.

SOCIAL INVESTMENT, IN MILLION US$ 2011/2014 EVOLUTION

15,000,000

13.6

OUR SOCIAL INVESTMENT IN NUMBERS

10,000,000

PERU WORKS FOR TAXES A successful and innovative way of complementary social investment, shared between our company and the local and regional governments of Peru, is the “Works for Taxes” modality. The strategy consists in the investment in community interest works in the sanitation, health, education and transport sectors, with private company funds, which may be exchanged for taxes. The first works in the rain forest regionwere executed by Pluspetrol Norte in the Nuevo Andoas community; it consists in the construction of a new high school.

5,000,000

0 Field (in dollars)

• Education • Health • Community

development

• Institutional

strengthening

• Other TOTAL

2011

2012

2013

2014

935,221

748,425

911,842

739,479

4,047,757

3,282,958

2,792,347

2,344,859

5,561,651

8,048,339

10,188,868

8,533,732

399,589

468,138

2,639,462

1,132,538

2,681,183

3,037,454

2,118,272

3,492,330

13,625,400

15,585,312

18,650,791

16,242,937

Sustainability Report 2014 •

77

PARTICIPATORY PROCESSES In our industry there are two types of citizen participatory mechanisms: the mandatory ones, that is, those contained in the standards and regulations of each country’s extraction sector, and the processes designed by the company itself to encourage the engagement and involvement of local players and integrate them into the decision making process. The mandatory or legal engagement mechanisms demand that companies follow a communication, consultation and/or information process of their projects to the people who inhabit the areas surrounding their operations. In certain countries, such as Colombia or Peru, this action is carried out in a phase previous to the operations and land concession; others admit it in a phase subsequent to the bidding contract´s subscription, through the execution of informative workshops, hearings or other citizen-engagement events, where the population’s expectations, doubts, concerns and suggestions in relation to the new project are collected and incorporated into the final design.

The starting point of our participatory processes is to understand the communication needs and interests of our local communities. The citizens and community engagement is inherent to our social management process; community involvement demands an open and intercultural approach from us, which in many occasions increases the timeframe of a project so as to adapt it to the local decision-making processes. This change in the perspective ensures a rational and committed support of the population to our projects. Engagement mechanisms are made viable by means of different strategies, such as consultation and information workshops, participatory monitoring programs, local staff incorporation in new projects’ monitoring, and community lookouts training, among other alternatives. The development of participatory methods enhances the projects’ quality, efficiency and sustainability; and strengthens our stakeholders’ responsability and commitment.

COMMUNICATION PROCESSES Pluspetrol’s community action is based on reliable, accessible, understandable and timely information related to its operations and projects. During 2014, Pluspetrol promoted the liaison with local communities through meetings, workshops, visits or hearings, associated with the communication of their projects and fulfillment of the commitments made in the different legal instruments.



4 briefings were held, where consultations were received from 168 inhabitants from Yabi, Chimbolo, Simindele & Chibodo, and Zongolo communities in order to provide a better understanding of the company’s activities and search for community engagement alternatives.



13 meetings with a total 69 people were held in Centenario Field to move forward with respect to the company’s operations and collaboration with the community. In Zapala, we reached an agreement with the Gelay Ko community to complete an exploratory well after 5 meetings with a total of 8 people.

ANGOLA

ARGENTINA ●



BOLIVIA ●





PPN, PERU ● ●



CAMISEA, PERU





78 • Pluspetrol

During 2014, together with the Curiche community, we addressed the Tacobo Field’s 3D Seismic Exploratory project. 6 agreement subscription assemblies with a total 540 people were held, as well as 17 community meetings to inform 363 people about the project execution. 2 Meetings with the Tajibo community were held for the reception of claims and complaints, attended by a total of 30 inhabitants.

The company held several meetings in Block 8, in order to sign agreements and contracts with communities from the Corrientes, Patuyacu and Chambira river basins. Additionally, 30 meetings were held, where agreements were subscribed, which are part of the vandalism prevention plan, such as: the Fluvial Surveillance Program and the Mutual Benefit Agreement for facility (pipelines) security, with the participation of Patayacu and Chambira communities for the 2014-2015 period. Meetings and assemblies were held in Block 1AB, in different communities, to negotiate the use of lands and quarries. Finally, 12 meetings were held Pastaza and Corrientes basins communities to evaluate the progress made in relation with the 2011-2014 Agreement.

50 Workshops were held to inform the communities about the company’s activities, attended by 1543 people, besides the issuance of 5 newsletters that reached 50,000 people in Pisco, San Andrés and Paracas. To receive enquiries or requests for support and coordinate activities, 61 events were held with the Boards from the 12 communities from the direct and indirect areas of influence of Blocks 88 and 56, Lower Urubamba. 39 meetings were held with local inhabitants, base organizations, educational and public institutions from Pisco, San Andrés and Paracas, attended by a total 917 local inhabitants.

COMMUNITY

CORE ELEMENTS OF THE CLAIM OR COMPLAINT RESOLUTION PROCESSES

GRIEVANCE RESPONSE MECHANISMS AND CONFLICTS RESOLUTION The development of our activity involves permanent interaction with local stakeholders. This liaison is particularly complex in those regions where multiple players with different interests coexist, or in social environments where diverse indigenous communities reside, each of them with their own values and cultures. From Pluspetrol we work to solve differences within a mutual respect framework. In all our operations we have procedures to ensure the appropriate reception and answer within the shortest possible time to eventual complaints received from the local population, public or private institutions, and indigenous organizations settled in the area of influence, among others.

DESIGNATION OF PEOPLE IN CHARGE FOR ALL MANAGEMENT PHASES.

OBSERVANCE OF RESPONSE TIMES ENSURING CLAIMANTS’ SATISFACTION.

EVERY OPERATION HAS ITS OWN PROCEDURE, ADJUSTED TO ITS CHARACTERISTICS AND CONTEXT

INVESTIGATION OF THE EVENT OCCURRED AND RELEVANCE OF THE COMPLAINT TO DEFINE CORRECTIVE ACTIONS.

IMPLEMENTATION OF RECORDING AND MONITORING TOOLS FOR ALL THE PHASES OF THE PROCESS.

ARGENTINA

• We worked on the resolution of 2 conflicts in Ramos and Centenario Fields, related to the demand for service provision and cooperation in general tasks that the company provides the communities in the area. Company representatives met with community leaders and neighbors.

PLUSPETROL • In Block 8, four conflicts were recorded related to the retention of workers who provide services to the company and also from fluvial vessels, in the Nueva NORTE, Valencia, Nueva Unión, Boca de Copal and San José de Nueva Esperanza PERU communities. There were 9 labor stoppages in the communities of Nueva Reforma, La Petrolera, Nuevo Progreso, Nueva Alianza, Santa Teresa, Nuevo Peru and Bellavista. The facilities of a contractor company were taken over in the Nuevo Porvenir community. • In Block 1AB, two labor stoppages were recorded in the José Olaya community, and 1 access blockade in Nuevo Andoas, due to compensation claims for the use of lands and quarries. Additionally, an alliance of communities performed a pacific demonstration for 15 days -which affected the normal traffic and activity in the area- to draw attention to different claims; on the other hand, the Doce de Octubre community carried out one blockade in the entrance of Tigre river bridge, due to the delays in the commencement of the works agreed upon, an elementary school. Also, 2 blockades of the main road were recorded: the Nueva Jerusalén community protested against a chemical leakage incident, and representatives from Tigre Basin demanded that the Government hire an expert company to carry out soil characterization works.

Angola, Bolivia and Camisea, Peru only received a few complaints which were quickly resolved.

The conflicts were solved through meetings and rounds of dialogue between Pluspetrol, the communities’ authorities and government bodies, if they are involved.

Sustainability Report 2014 •

79

INDIGENOUS COMMUNITIES Pluspetrol’s operations are usually developed in very sensitive geographical and socio-cultural areas, such as indigenous communities’ lands. Preserving their habitat and culture is one of the company’s priorities, whose strategy is based on respect for local organizations, traditional values and ongoing participatory work, to contribute to the development of these valuable communities.

PPN Ethnic groups: Achuar Quechua and Urarina (Department of Loreto, Peru)

CAMISEA Ethnic groups: Machiguenga, Yine and Ashaninca. (Department of Cusco, Peru)

ETHNIC GROUPS AND CULTURES: THE MACHIGUENGAS29 The Machiguenga ethnic group –also known as Matsigenka or Machigüenga– inhabits the Peruvian Amazon rain forest in the basins of the lower Urubamba, Manu and high Madre de Dios rivers, in the Departments of Cusco and Madre de Dios, respectively. According to census data, by 2007, the population of the communities self-identified as Matsigenka was 11,279 people. In addition, there are Matsigenka families in isolation and initial contact conditions (PIACI), who move around the area of the Kugapakori, Nahua, Nanti Land Reserve (Cusco and Ucuyali).

BOLIVIA Guaraní Ethnic Group (APG Captaincy, North Charagua)

Currently, most of the Matsigenka population lives in native communities alongside the rivers, which implies a relative level of sedentary lifestyle. Regarding their economic activities, the Matsigenka in general practice small scale mixed farming through the slash and burn method. Main products grown include corn, yucca, banana, beans and peanuts. The crops marketed are annatto, coffee and cacao. Fishing is the economic activity that represents their primary source of animal protein in their basic diet, while hunting comes second.

ARGENTINA Ethnic group: Wichi and Guaraní (North Area) Ethnic group: Mapuche (Neuquén Area)

Until the beginning of the 1950’s, the Matsigenka’s political organization was limited to a self-selected chief in every family group. Nowadays, also central organizations, federations and councils are identified, who represent the different native communities of the area.

29. Sources: “Los Machigüengas”, France-Marie Renard-Casevitz, Boletín de la Sociedad geográfica de Lima (1974, 93, août-décembre), p. 27-35. Peru Ecológico: http://www.peruecologico.com.pe/etnias_machiguenga.htm Interculture Vice Ministery of Peru: http://bdpi.cultura.gob.pe/pueblo/matsigenka

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The Camisea Project (Blocks 88 and 56) are located in community territories of this indigenous ethnic group; the native communities in the area of influence of our operations are: Camisea, Ticumpinía, Cashiriari, Segakiato, Shivankoreni and Kirigueti. The social management developed since the early stages of the project with these communities is detailed in the section “10 years of Camisea” in the Environmental Chapter.

COMMUNITY

OBSERVANCE AND PROTECTION OF INDIGENOUS PEOPLES’ RIGHTS

CODE OF CONDUCT

Continuous training programs for Pluspetrol staff and staff from contractor companies transfer the main guidelines of community management regarding liaison with indigenous communities, as well as knowledge and respect for their cultural and land rights.

Its objective is the proper work behavior inside as well as outside our areas in operation, to safeguard the integrity and good relations with indigenous communities and the environment. The Camisea´s Code of Conduct, developed in a participatory way with indigenous communities in 2002, is the first antecedent of a document of this kind in our company.

CODE OF CONDUCT

In Camisea, Peru, during 2014, induction talks on Community Affairs and the Code of Conduct were delivered to 2,877 new workers from Pluspetrol and the different contractor companies. COMMUNITY ENVIRONMENTAL MONITORING PROGRAM (PMAC)

INDIGENOUS COMMUNITIES

LAND RIGHTS

In turn, in Bolivia 34 talks were delivered on the Code of Conduct,training 879 workers. Further, within the framework of the 3D Seismic Exploration project, 25 induction talks on North Charagua Original Community Land (TCO) were held, attended by 635 workers.

AGREEMENTS, COMPENSATIONS AND INDEMNITIES PROGRAM

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LAND RIGHTS Pluspetrol develops its activities paying special attention to respect the isolation that certain indigenous communities wish to preserve, without disturbing their community rights or natural habitat.

CAMISEA, PERU

ANTHROPOLOGICAL CONTINGENCY PLAN (PCA) - BLOCK 88 In order to reduce the level of socio-cultural and health risk in the populations of the Kugapakori Nahua Nanti Land Reserve (RTKNN) due to the execution of the Camisea project activities, we continued in Block 88 the Anthropological Contingency Plan (PCA) that Pluspetrol has implemented since the beginning of its activities in 2002. Aligned with the RTKNN Protection Plan -approved by the Ministry of Culture as part of the official policy for defending the integrity of the people that live inside said reserve- the PCA considers measures that facilitate efficiently managing, under social responsibility criteria, situations resulting from the Project’s activities that involve some level of risk for the RTKNN population. Among the PCA’s objectives stand out training and dissemination of conduct standards for Pluspetrol’s and contractors’ staff, associated to procedures and protocols in the face of sightings and encounters with isolated populations. Also, in the different work fronts there are lookouts, Matsiguengas as well as Nahuas, who serve as translators (bilingual Matsiguengas and bilingual Nahuas) in cases where there is an undesired encounter with the inhabitants from inside the RTKNN. Finally, the PCA includes communication and coordination mechanisms with the relevant authorities to manage possible contingent situations, based on cooperation agreements with the Ministry of Culture, the SENANP (National Service for State Protected Natural Areas), and the MINSA (Ministry of Health), among others.

For the development of the Full Exploration Plan (FEP), the PCA has been implemented in field operations, pursuant the recommendations and guidelines set by the VMI (Interculture Vice Ministry), and the UN Special Rapporteur on the rights of indigenous peoples, incorporating the improvements suggested. The PCA is an appropriate tool for the prevention and management of undesired contacts with Isolated or Initial Contact Indigenous Peoples (PIACI). Each work group has a community lookout especially trained in the PCA, who can communicate in the native languages of the area (Nanti, Nahua and Machiguenga). In 2014, during the execution of the 2D seismic project, under the FEP, 27 pacific contacts occurred, one sighting and some evidence findings. Most events were associated to the population settled in the RTKNN (officially called “population in initial contact condition”), though there were also some events with neighboring populations, from the Cashiriari and Segakiato communities. No event with isolated communities has been recorded.

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COMMUNITY

COMMUNITY ENVIRONMENTAL MONITORING PROGRAM (PMAC) The PMAC is the result of an extensive participatory process developed between Pluspetrol and the indigenous communities that live in the area of influence of the project. The aim is to take advantage of these communities’ knowledge to monitor environmental and social impacts that our activities might cause. Additionally, the PMAC enables the local population to participate in verifying the observance of the environmental commitments taken on by the company.

We register social and environmental variables to evaluate the program by means of monitoring activities.

We design and update a training plan to strengthen the monitors’ technical skills.

ENVIRONMENTAL AND SOCIAL MONITORING

MONITOR TRAINING

COMMUNICATION AND DISSEMINATION

ENVIRONMENTAL EDUCATION

We communicate environmental awareness, with the aim of promoting healthy environmental behaviors inside the communities.

The program is structured based on an improvement process that facilitates optimizing the scope of its objectives with active engagement of the communities:

We strengthen the monitors’ oral and written skills in order to improve their performance within the communities.

CAMISEA, PERU As part of the PMAC, in 2014 a total of 36 environmental monitorings were performed in different locations within the areas of operation, both in Block 88 and Block 56. The monitorings included: Mipaya flowline facilities; drilling platform for the injection well in Malvinas; Malvinas Gas Plant; Pagoreni B, San Martin 1 and Mipaya platforms; and facilities in Oropel, paying special attention to wastes management, drinking and discharge water treatment systems, among others. In addition, monitoring of dringking water sources, environmental noise and air quality were carried out in the native communities of Segakiato, Cashiriari and Ticumpinía. During the year, a total of 12 monthly workshops were organized to provide environmental and social training. For more information visit www.pmac-bu.org.pe

BOLIVIA During the execution of the 3D Seismic Exploration project (initiated 1 August, 2014) a public disclosure document for the consultation and engagement process was prepared in a participatory manner, and an active assistance in the public consultation workshops was recorded. Likewise, socio-environmental monitoring of the following activities associated to the project execution was performed: path clearing and topographic surveying; verification of minimum safe distances of shot holes in seismic lines; hiring labor and local services; project socialization in the communities; communication management with their parent organization and community authorities; grievances management; community roads use and maintenance; obtaining permits, valuation and payment of compensations and signing of conformity acts; staff behavior inductions and surveillance; and elaborating monthly monitoring reports and a final report.

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AGREEMENTS, COMPENSATIONS AND INDEMNITIES PROGRAM

CAMISEA, PERU Included in our Community Liaison Plan, agreements, compensations and indemnities establish fair reimbursement for the population, under a mechanism of returns for a service provision or the temporary use of an area of interest for our operations. The agreements and compensations are executed under the applicable regulations and established under a process of mutual agreement with the populations, pursuant to their decision-taking guidelines or mechanisms. In the case of indemnities, the purpose of the negotiation is to revert or redress a damage or loss caused individually or collectively; a very simple example of this process is the indemnity payment for the plants and/or trees that must be temporarily withdrawn due to a road construction in a seismic project.

During 2014, six fluvial traffic agreements for the period 2011-2014 were completely settled, and another three have an outstanding paymentbalance. Likewise, fluvial traffic agreements for the period 2014-2016 were signed with five villages and two rural settlements (Shintorini and Tupac Amaru). Regarding the compensation agreements in the operation phase of Blocks 88 and 56, an agreement with the Kirigueti community was signed as well as an agreement with the rural settlement Tupac Amaru. Further, we completed the negotiation with the Ticumpinia community for the Malvinas plant extension. Likewise, an agreement was signed in relation with the compensation of Block 88 for the 2D seismic survey, and a disbursement was made to the Cashiriari community.

BOLIVIA 30 productive initiatives were funded, with charges to the following sources: a) Social Action Plan 2014 (agreements); and b) Compensations Agreement for Wells SID-X1, TCB-X1002ST, SIN-X1, and Tacobo and Curiche Fields 3D Seismic (compensations). Also, we achieved co-financing of the Housing State Agency of Bolivia for the construction of 66 dwellings in the communities of Puerto Viejo, Tacobo and El Carmen. The local counterpart comes from resources of the 2014 Social Action Plan, Compensations Agreement (PBC) and local manpower. As per the installation and enhancement of water systems for human consumption in 17 Guaraní communities, seven projects were completed with FUNDESOC’s technical assistance, the resources came from agreements, compensations and third-party funds, and six projects were executed with the NGO Acción Contra el Hambre, as a result of FUNDESOC’s management.

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COMMUNITY

COMMUNITY AND VALUE CHAIN In Pluspetrol we are convinced that generating job and local development opportunities contributes to the communities’ sustainability and stregthens our value chain. That is why we prioritize hiring people from the areas where we operate, developing local management capabilities and encouraging the creation of community companies that may become our suppliers and suppliers of other companies in the area.

LOCAL EMPLOYMENT In Pluspetrol we particularly prioritize hiring people living in the communities immediately surrounding our operations. Our Community Affairs Area works on mechanisms and agreements that facilitate hiring local staff -including members of native communities- directly and through community companies.

VALUE CHAIN CYCLE

SUPPLIERS

5,229

Through community companies serving as our contractors, during 2014, 1,426 job opportunities were generated in Block 8, and 3,803 in Block 1AB. Likewise, 70% of the works executed in the communities were in charge of community companies. Finally, during the reporting period, 89 people were trained in the Villa Trompeteros training school, out of which 19 were employed by contractor companies, and the rest work in their own family businesses.



To carry out a 3D seismic project in Tacobo and Curiche fields, 93 technically-skilled workers were hired. Additionally, 604 workers were hired to move equipment and staff, and perform drilling, registry, restoration and abandonment, and topographic surveying tasks. Additionally, jobs were provided to workers to manage lodging and food services for 180 workers in hotels and homes. Likewise, community members from Tajibo Field carried out the surveillance of AMR-X1001 well in order to provide water to Aymiri and Quebracho Guaraní communities.



Job opportunities were created for members of native communities and rural settlements from Lower Urubamba associated with different projects executed throughout the year.



An agreement was signed with a local organization with the aim of hiring labor for general tasks to be performed in the Ramos Field.

Job opportunities created in PPN, PERU

LOCAL DEVELOPMENT COMMUNITY COMPANIES



LOCAL EMPLOYMENT

736 Job opportunities created in BOLIVIA

3,950 Job opportunities created in CAMISEA, PERU

49 Job opportunities created in ARGENTINA

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COMMUNITY COMPANIES AND PRODUCTIVE ENTERPRISES Pluspetrol collaborates with the creation and maintenance of community business initiatives. The Company hires and advises the services of these local enterprises and, in turn, the latter contribute as service suppliers of other companies in the region.

CAMISEA, PERU In 2014, the company Segakiato SAC, constituted with compensation funds granted by Pluspetrol to the native community with the same name, continued providing fluvial cargo and passenger transport services to Pluspetrol and other companies, as it’s been doing since 2012. With respect to the previous period, Segakiato notably increased 80% its staff, with 382 people in December, 2014, coming from different communities from Lower Urubamba.

PLUSPETROL NORTE, PERU The first entrepreneurship of this kind started its activities in October, 2007, as an agricultural service community company (ECOMUSA), in the José Olaya community, with a total of 21 full-time employees. The company started offering clearing (weed cutting) services in rights of way, oil pipelines, flowelines, high voltage power lines and specific locations. In July, 2009, a new service was added: tree felling, which enabled the creation of 16 new work positions. The company has been growing ever since; nowadays it has 797 work positions. During the 2014 period, the number of community companies in Block 1AB was extended, addingup to 10 at present: Doce de Octubre, José Olaya, Antioquia, Nuevo Andoas, Alianza Capahuari, Nueva Jerusalén, Pampa Hermosa, Titiyacu, Los Jardines and Nuevo Porvenir. These community companies generated 3,803 total job positions in the different work fronts, such as selective felling, weed cutting, reforestation and erosion control, among others.

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COMMUNITY

PLUSPETROL NORTE, PERU

AWARDS AND RECOGNITIONS On many occasions, our work with the communities rewards us with special recognitions that, beyond the objectives of the areas where the company is involved, confirm our goals and encourage us to double our efforts. In this edition, we share some distinctions received by our Peru units.

2014 PROINVERSION AWARD FOR SOCIAL INCLUSION During the reporting period, Pluspetrol Norte was awarded this recognition within the Works for Taxes program, for the management of an entrepreneurship in the rain forest region. The winning project consisted in the construction of a high school educational center -agricultural modality- in the Nuevo Andoas community in Block 1AB.

SUSTAINABLE DEVELOPMENT 2014 AWARD, SOCIO-ENVIRONMENTAL MANAGEMENT CATEGORY The Community Environmental Monitoring Program of Corrientes River, which PPN promotes in the region of Loreto jointly with indigenous communities in the area of influence of Block 8 and the NGO Pro Naturaleza, won the award for “Sustainable Development 2014”, organized by the National Oil, Mining and Energy Society (SNMPE). The PMAC Corrientes was awarded first place in the category of Environmental Management, which recognizes the efforts in conservation and efficiency in the use of natural resources and the prevention, rehabilitation and recovery of affected areas. It was also declared as a finalist in the category of Biodiversity Management 2014 in the National Environmental Award, granted by the Ministry of Environment. In this case, it has been recognized for its work in the recovery of the quality of ecosystems, including emblematic species of Corrientes River basin as the taricaya (river turtle), the black caiman and amazonian fish.

CAMISEA, PERU RECOGNITION OF PISCO SOCIETY The Chamber of Commerce of Pisco recognized Pluspetrol for its commitment and accountability with the society of this province. The award was made official within the framework of the Chamber’s 79th anniversary, highlighting the coordinated joint work by the company and Pisco’s different stakeholders, as well as its contribution to the execution of several programs and projects aimed at driving local development. Also, we must point out that the Department of Education distinguished Camisea with a Diploma, recognizing Pluspetrol’s contribution to Educational development. Since 2008, different educational programs have been carried out for the benefit of students in the Pisco province and in the native communities of the Lower Urubamba.

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SAFETY & INTEGRITY WE MANAGE RISK AS AN ESSENTIAL PART OF OUR ACTIVITY; WE TAKE DECISIONS ACCORDING TO THEIR LEVEL, MINIMIZING NEGATIVE IMPACTS AND OPTIMIZING THE BENEFITS AND OPPORTUNITIES CREATED BY OUR ACTIVITY DURING THE LIFETIME OF OUR PROJECTS. WE OPERATE SAFELY AND RESPONSIBLY, WITH A PREVENTIVE APPROACH, WHICH SEEKS TO AVOID ALL KINDS OF INCIDENTS AND MINIMIZE ADVERSE IMPACTS ON STAFF, THE ENVIRONMENT AND OUR NEIGHBORS.

SAFETY AND OPERATIONS INTEGRITY

PERFORMANCE INDICATORS

SAFETY AND OPERATIONS INTEGRITY MANAGEMENT

TRAINING & LEARNING

Ramos Gas Plant, North Area, Argentina.

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Operational Excellence is the strategy defined from Operations to achieve growth, value creation and long-term sustainability objectives. Safety & Operations Integrity management excellence involves ensuring an optimum risk and integrity management, establishing continuous improvement processes to minimize incidents and losses, and appropriate contingency management. Mary Stella Corsaro Safety & Operations Integrity Corporate Manager

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THE RISKS RELATED TO PERSONAL OR OCCUPATIONAL SAFETY LEAD TO INCIDENTS WHOSE IMPACT IS LIMITED TO THE WORKERS INVOLVED IN THE TASK.

PROCESS SAFETY-RELATED RISKS LEAD TO MAJOR INCIDENTS DUE TO THE RELEASE OF POTENTIALLY HAZARDOUS MATERIALS OR ENERGY, WHICH IMPACT ON THE WORKERS, THE COMMUNITY, THE ENVIRONMENT, THE FACILITIES AND/OR THE BUSINESS CONTINUITY.

SAFETY

OUR SAFETY & OPERATIONS INTEGRITY MANAGEMENT

Over the past 25 years, the industry -and also Pluspetrol as part of it- has focused on occupational safety; i.e., managing people’s safety, by using systems centered on identifying and managing risks during the performance of their duties. The implementation of these systems has substantially reduced the frequency of incidents. In Pluspetrol, we manage a complex risk portfolio, from the possibility of occurrence of minor events to major ones. We have achieved improvements in their management, and the challenge is to continue reducing the probability of major events. The correct management of the aspects that include, but are not limited to, asset integrity, management processes and competence assurance are key elements to meet this goal. This set of elements is called Process Safety. One of the lessons that result from the major incidents analysis in our activity is the need to distinguish process safety and personal safety, and manage both aspects with the appropriate approach.

PERSONAL SAFETY

PROCESS SAFETY

PERSONAL DAMAGE PREVENTION AND MITIGATION

FIRE, EXPLOSIONS, CHEMICAL PRODUCT RELEASE PREVENTION AND MITIGATION

LOW CONSEQUENCE HIGH FREQUENCY Source: ccps

Pluspetrol’s management strongly believes that the appropriate implementation of the Process Safety concepts is the key to minimize the risks of major accidents in the operations.

PROCESS SAFETY

This is a disciplinary framework for the integrity management of operational systems and processes that handle hazardous substances. It is based on the best practices for design principles, engineering, operation and maintenance.

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HIGH CONSEQUENCE LOW FREQUENCY

SAFETY

WHAT DOES PROCESS SAFETY IMPLY? All the actions necessary to prevent catastrophic events (explosions, fires, environmental disasters)

TOOLS

THE RIGHT PEOPLE WITH THE RIGHT SKILLS

APPROPRIATE ORGANIZATION ● PROCEDURES ● GUIDES

WITHIN A FRAMEWORK OF THE SENSE OF VULNERABILITY

By understanding this change, Pluspetrol has evolved considering the Safety concept as an approach that manages Personal Safety and Process Safety, so that Occupational Health and Safety has accompanied this change process renaming it as Safety & Operations Integrity (S&OI), and its challenge is set up in four general chapters, one for each subject area that constitutes the Management structure.

S&OI STRUCTURE CHANGE (CULTURAL EVOLUTION)

SAFETY

ASSET INTEGRITY

RISK MANAGEMENT AND CONTINGENCY PLANS

ENSURE THE IMPLEMENTATION OF PLUSPETROL’S INTEGRITY STANDARD, BY COORDINATING THE DEFINITION OF PROCESSES, STANDARDS AND PRACTICES, PROVIDING MANAGERS WITH SUPPORT, USING AS LEVERAGE CULTURE MANAGEMENT AND THE ARTICULATION OF THE NECESSARY COMMUNICATION.

DEVELOP SAFETY POLICIES AND STRATEGIES FOR PLUPETROL, PROMOTING MANAGEMENT ALIGNMENT WITH INTERNATIONAL STANDARDS.

DEVELOP ASSET INTEGRITY POLICIES AND STRATEGIES FOR PLUSPETROL, PROMOTING THE MANAGEMENT’S ALIGNMENT WITH INTERNATIONAL STANDARDS.

ENSURE AN APPROPRIATE DISSEMINATION AND IMPLEMENTATION OF SUCH POLICIES AND STANDARDS, AND THEIR ALIGNMENT WITH THE COMPANY’S STRATEGY.

ENSURE AN APPROPRIATE DISSEMINATION AND IMPLEMENTATION OF SUCH POLICIES AND STANDARDS, AND THEIR ALIGNMENT WITH THE COMPANY’S STRATEGY.

ENSURETHE SAFETY AND INTEGRITY RISK MANAGEMENT OF PLUSPETROL’S OPERATIONS, ALIGNED WITH THE PROCESS SAFETY MANAGEMENT (PSM) PRINCIPLES THROUGHTHE DEFINITION OF THE RISK MANAGEMENT PROCESSES. ENSURE THE ALIGNMENT OF ALL THE CONTINGENCY PLANS WITH THE IDENTIFIED RISKS, AND THEIR QUALITY. ENSURE THAT THE INSURANCES PROCURED ARE ALIGNED WITH THE IDENTIFIED RISKS.

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SAFETY PROCESS SAFETY

OUR CHALLENGES • TO INTEGRATE PROCESS SAFETY INTO MANAGEMENT, IN ORDER TO ENABLE EARLY DETECTION OF DEVIATIONS SO AS TO MINIMIZE POTENTIAL MAJOR ACCIDENTS

STANDARDS DEFINITION

• TO DEFINE AND IMPLEMENT SAFETY MANAGEMENT STANDARDS AND TOOLS SO AS TO INCORPORATE THE BEST PRACTICES OF THE INDUSTRY AT AN INTERNATIONAL LEVEL, AND COMPLY WITH THE LOCAL LAWS AND STANDARDS IN EVERY BUSINESS UNIT • TO POSITION OURSELVES WITHIN THE IOGP WORLD TRIF30 TOP QUARTILE

PERFORMANCE INDICATORS

• TO BE RECOGNIZED AS SAFETY LEADERS IN ARGENTINA AND PERU

TRAINING AND LEARNING

TRAINING AND LEARNING Year after year, we offer different Safety-related training courses aimed at our collaborators as well as contractors, in order to increment their knowledge and strengthen their skills, favoring a higher professional growth and performance when carrying out their tasks safely. Such courses are defined based on the people’s roles and responsibilities, and the risks present in the position they serve.

TRAININGS BY BUSINESS UNIT

TRAINED HOURS OF TRAINING RECEIVED PERSONNEL31 PER PERSON

Bolivia

12.1832

2,053

25,006

Argentina

2.33

2,369

5,520

PPN, Peru

2.42

7,027

17,021

Camisea, Peru

14.5

4,705

68,251

Total

7.2

16,154

115,798

TOTAL TRAINING HOURS

Additionally, during 2014, we worked to incorporate into the organization the skills and abilities required to manage Process Safety. A series of learning spaces have been planned, which will enable the organization to acquire knowledge on keynote aspects.

30. Total recordable incidents frecuency / Frecuencia del total de incidentes registrables. 31. It includes both, its own personnel and contractors. 32. The average hour value per person is higher than for the rest of the BU. The explanation is that in such BU an exploratory project was developed, which tripled its workforce for a few months. These people receive a thorough short-term safety training program.

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The first event that Pluspetrol’s staff had an opportunity to attend this year was the Latin American Process Safety Congress, which lasted 4 days, and where a significant number of employees from different roles and business units were able to share knowledge and experiences. During November and December, personnel from technical and operational areas attended the course: CCPS “Foundations of Process Safety”, whose aim is to strengthen knowledge on Process Safety, based on a need for the implementation of an efficient management system to increment operational efficiency, based on 4 pillars and 20 elements from the Risk Based Process Safety.

SAFETY

TRAINING AND LEARNING PRACTICES SAFETY AND HEALTH AT WORK WORLD DAY CELEBRATIONS - CAMISEA, PERU On the celebration of the World Day for Safety and Health at Work, during the week of April 28, a space for reflection was generated throughout the areas of the company, both at the corporate level as well as in the business units. The topics addressed included, among others, Process Safety; Hand Protection, Noise and Hearing Preservation; Chemical Products Handling; Behavior-Based Safety.

BRIGADE TRAINING AT CORCOBO FIELD, ARGENTINA The Corcobo field has its own brigade squad to fight fires. Once a week, this brigade –which received formal training on firefighting at the Argentine Fire Fighting and Training Center (Centro Argentino de Lucha Contra Incendios y Conducción, CALCIC), and on first aid– meets to debate different topics of interest for the brigade and to carry out fire fighting drills.

DRILLS, CAMISEA, PERU Level II Emergency Drill On May 28 and December 20, Level II Emergency drills where carried out. The aim was to assess the appropriate control techniques for potentially inflammable gas leaks in pressurized equipment, using the resources assigned to emergency response. Helicopter Crash and Rescue Drill In August, a planned helicoptercrash landing and rescue drill was conducted in the Urubamba river; to this end the procedures that need to be applied to timely and efficiently face the occurrence of potential emergencies that might take place during the course of our operations were carried out; in addition, the Crisis Committee activation drill was also carried out, assessing the actions taken in response to the emergency. These practices enable us to face, in an appropriate, fast and safe way, the occurrence of emergencies that could happen in our operations, therefore raising the level of response of our personnel in the different areas, and especially of our emergency brigade.

RECOGNIZING OUTSTANDING SAFETY PERFORMANCE, PLUSPETROL NORTE, PERU As part of Block 8’s safety program, there has been ongoing recognition of the work crews who have demonstrated management of best safety practices in the activities they perform; this recognition is part of the organization’s commitment of creating a safety culture within our operations.

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OCCUPATIONAL HEALTH AND SAFETY MANAGEMENT SYSTEM (OH&S) Currently, the Occupational Health and Safety Management Systems (OH&S) constitute a tool that enables business units to ensure the appropriate application of our corporate safety criteria related to personal safety. At the same time, they contribute to the continuous improvement of processes development in all our operations.



Certifications OHSAS 18.001 were maintained for Ramos Field, Balbuena Tank Farm, Sweetening Plant and Pluspetrol’s Base in the North Area. Two semiannual Follow-up Audits were conducted.



Certifications OHSAS 18.001, obtained in 2012, are maintained, which comprise the Santa Cruz offices and Tacobo and Tajibo fields. In 2013, said standard was certified in Curiche field. In Bermejo, the management system was implemented although without this certification yet.



The management system responds to the requirements of OHSAS 18001:2007, as well as the procedures that Camisea has defined and implemented for the performance and improvement of its Environment, Safety and Occupational Health Management. The system deployed covers all the BU’s fields, and in 2014, it received its second re-certification.



A search for best practices (benchmarking) in other organizations (IOGP, OSHAS, API) has been made for the implementation of the integrated management system in PPN.

ARGENTINA

BOLIVIA

CAMISEA, PERU

PLUSPETROL NORTE, PERU

Our challenge is to continue enhancing our systems through the appropriate incorporation of the relevant standards.

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SAFETY

COMMITTEES

ARGENTINA

CAMISEA, PERU

BOLIVIA

CORPORATION

OPERATION

PLUSPETROL NORTE, PERU

Different health and safety committees work in Pluspetrol’s units, which are often comprised of the units’ leaders, people responsible for health and safety management, and employees’ representatives. Committees meet regularly, and during the meetings, they mostly analyze lessons learned from undesired events, strategies and action plans are proposed, and commitments for safety management are taken.

ORGANIZATIONAL STRUCTURE DESCRIPTION

Monthly reviews of high potential undesired event investigations, and related actions follow-up. Contractors Biannual Working Day



Two types of occupational health and safety committees: the EHS committees and the Mixed Occupational Health and Safety Committees (legal requirement of the Bolivian legislation).



The EHS Committee is in turn divided into Local EHS Committees (one per each field: Tacobo, Tajibo, Curiche, Bermejo) and a Central EHS Committee (which in turn represents the Santa Cruz office).



Also, there are two Mixed Occupational Hygiene and Safety Committees. One of the Committees represents workers from the Tacobo, Tajibo and Curiche fields, including the Santa Cruz office. And the remainder represents the workers from Bermejo and Toro fields.



Country Safety Committee: comprised of the senior management of Camisea.



Workplace Health and Safety Committee: is a joint governing body of workers and management that evaluates and reviews the global performance of the health, safety and environment management system, and undertakes initiatives to ensure performance is adequate to their objectives and goals.



Lima IMS Committee: led by the Executive Management; it reviews the overall performance of the integrated management system twice a year, and sets improvement and growth strategies .



Malvinas and Pisco IMS Committee: led by the Malvinas and Pisco plant managers; it reviews the Safety, Health and Environmental performance of each of the Camisea operations on a monthly basis.



Area Subcommittees: they execute Safety, Health and Environmental initiatives and guidelines issued by the Committee of each operation.



Camisea Shielding Committee: comprised of Camisea technical authorities and the organization’s directors, in order to establish initiatives aimed at ensuring process Safety in the facilities.



In every operating area (Neuquén, Rio Colorado, Ramos and GETSA) a monthly committee is held, comprised of the area Manager, Safety personnel and operational leaders. This committee analyzes the indicator results of the month; undesired events are presented, together with the investigation results of such events; the safety highlighted facts of the month, as well as follow-up of the corrective actions.



Bimonthly, Argentina’s safety committee meets, with the participation of the Country manager, the Operations manager and operations support areas managers. In this framework, reactive and proactive indicators are analyzed, and safety standards are approved for the business unit.



Safety, Health and Environment Committee: Monthly meetings in both blocks, with contractractor companies representatives and Pluspetrol Management teams at the operational sites. The lessons learned from undesired events are analyzed, strategies and action plans are proposed, and commitments for safety, health and environmental management are taken.



Electrical Safety Committee: Quarterly meetings at Block 1AB, led by the Maintenance Department and comprised of representatives from different maintenance-related companies.



Joint Safety Committee: Implemented as required by law and carried out with representatives of the workers from both blocks and the company, at the Lima offices. For 2015, a change in the committee’s board of directors is planned.



Logistics Safety and Fluvial Transport Committee: implemented by Camisea in 2013 and extended to PPN in 2014, it discloses on a monthly basis safety and operational aspects of piers and rivers used by water units that serve both of Pluspetrol’s business units in Peru.



Country Safety Committee: Quarterly meetings with participation of the company senior management. The lessons learned from undesired events and Safety management core matters are analyzed, and progress in Corporation Safety matters is presented.

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NEW MEMBERSHIPS IN INTERNATIONAL BODIES - IN LINE WITH OPERATIONAL EXCELLENCE CCPS is the Center for Chemical Process Safety, an organization that identifies and establishes the needs for process safety in the chemical, pharmaceutical and oil industries, together with the American Institute of Chemical Engineers. Its members work in committees and develop guidelines with practical application in the industry. It has over 100 publications, focusing on 5 principles: culture, standards, competences, management systems and lessons learned. In the site http://www.aiche.org/ ccps you may find guides and guidelines for process safety, from the design and construction to process plant operation.

PERFORMANCE INDICATORS The work done by Pluspetrol to improve its safety performance includes changes in the way it measures it. It consists in the incorporation of an indicator called Total Recordable Cases (TRIC) into the management follow-up, which includes a record of all the events classified as “medical treatment, restricted work and lost days incidents”, trying to achieve the objective of zero recordable events.

120 100

6

100 80

5

68

4 3

40

2 22

60

1

1

9

20 0

0 CAMISEA, PERU

PPN, PERU

ARGENTINA

BOLIVIA

TOTAL PLUSPETROL

RECORDABLE CASES • TOTAL • TOTAL RECORDABLE CASES/HOURS WORKED

In 2014, the corporate frequency index for accidents with lost time was 1.00, 60% lower than in 2013. In relation to the severity rate , its value was 0.05, a 20% decrease compared to the previous year. In turn, Pluspetrol has started measuring process safety events. We started in Camisea, Peru, to later transmit the experience to the rest of the units.

33. Frequency rate: number of accidents with lost time accumulated during the year, per million hours worked. 34. Severity rate: number of lost days accumulated during the year, per thousand hours worked.

74 • Pluspetrol 96

Pluspetrol’s engagement in these organizations shows its eagerness to stand out as a benchmark company among international power companies, and to implement the best practices in line with international standards.

SAFETY

OTHER ACTIONS TAKEN DURING 2014

BOLIVIA • “3D Seismic Exploration, Tacobo and Curiche Fields: The execution of this project, which lasted 5 months, involved 650 people average, reaching 1,500 people at its highest peak. It involved 1,082,500 man hours worked. The operation was conducted through land and airborne vehicles, so a helicopter and lifting device audit plan was implemented. We must point out the absence of LTICs35 and HIPOs36 during the overall execution of the project.

PLUSPETROL NORTE, PERU • Modifications to the scope of the Contingency Plan to be followed in Blocks 8 and 1AB. 2 reviews were performed in 2014. • Evaluation of Blocks 8 and 1AB’s major risks, following the Operational Risk Management (ORM) approach.

• “Pluspetrol Family Health and Safety Day”: This event, which was held in November, was massively attended by Pluspetrol workers and their families, and its aim was to work on integration and raising awareness with relation to health, home safety, nutrition, and office gym.

CAMISEA, PERU • Classification process of Undesired Events (UER) for PSM (Process Safety Management): implementation was initiated according to Standard API 754 and the IOGP (International Oil and Gas Producers) Report 456 guidelines.

ARGENTINA • Cross-audit implementation. An audit program was set up, where the area managers, together with an assistant auditor, visited and audited other business areas in Argentina. Besides auditing the degree of compliance with the safety standards, the activity enables sharing experiences and best practices.

• Work Monitoring: This work system was put into practice, which describes the planning required, the control barriers and authorizations necessary to execute critical and non-critical tasks within Pluspetrol’s operations. This work system contains processes as relevant as hazard identification and task risk analysis; work permits system, competence verification, operational discipline, etc. • Change Management: Review of this process was carried out, whose purpose is to identify monitoring measures to minimize the risks caused by changes of an organizational, structural, process, procedural nature, etc. The Change Management procedure also defines the levels of authorization required to approve such changes.

35. LTIC = Lost Time Injury Case 36. HIPO = High Potential Incident

Sustainability Report 2014 •

97

GRI INDEX PLUSPETROL HAS ELABORATED ITS SUSTAINABILITY REPORT BASED ON THE GLOBAL REPORTING INITIATIVE GUIDELINES, INCLUDED IN THE G3.1. GUIDELINES AND THE OIL AND GAS SECTOR SUPPLEMENT, REACHING A C APPLICATION LEVEL37.

37. To indicate that a report is GRI-based, the organization should declare the level to which it has applied the GRI Reporting Framework for its elaboration via the “GRI Application Levels” system. There are three Application Levels: C, B and A, the latter being the one showing the greatest application of the GRI Framework.

98 • Pluspetrol

GRI INDEX

STATUS

DETAIL

PAGE / ANSWER

1

STRATEGY AND ANALYSIS



1.1

Statement by the most senior decision-maker of the organization about the relevance of sustainability to the organization and its strategy.

2 and 3



1.2

Description of key impacts, risks, and opportunities.

15, 16, 30, 38, 72 and 96

• • • • • • • • • • • • • • • • • • •

2

ORGANIZATIONAL PROFILE

2.1

Name of the organization.

Pluspetrol.

2.2

Primary brands, products and/or services.

8, 9, 26 and 27

2.3

Operational structure of the organization, including main divisions, operating companies, subsidiaries and joint ventures.

8 and 9

2.4

Location of the organization’s headquarters.

Buenos Aires, Argentina.

2.5

Number of countries where the organization operates, and names of countries with either major operations or that are specifically relevant to the sustainability issues covered in the report.

8, 9 and 25

Nature of ownership and legal form.

2.6

STATUS

DETAIL

PAGE / ANSWER



3.10

Explanation of the effect of any restatement of information provided in earlier reports, and the reasons for such restatement.

In the cases where there was a restatement of information corresponding to previous reports, it was explained in the contents of this report together with the reason that originated such restatement.



3.11

Significant changes from previous reporting periods in the scope.

1



3.12



3.13

4

GRI Content Index Table identifying the location of the Standard Disclosures in the report.

106-110

Assurance Policy and current practices with regard to seeking external assurance for the report.

The report hereby has not been subject to external assurance.

GOVERNANCE, COMMITMENTS AND ENGAGEMENT OF STAKEHOLDERS Governance Governance structure of the organization, including committees under the highest governance body responsible for specific tasks, such as setting strategy or organizational oversight.



4.1

Licensee and/or concessionaire of hydrocarbon exploration and exploitation. Anonymous society



4.2

Indicate whether the Chair of the highest governance body is also an executive officer.

The President of the Board is also the Executive Chief of the Company.



4.3 SE15

State the number and gender of the members of the highest governance body that are independent or non-executive member.

The Board of Directors is comprised of 3 independent members.

4.4 SE16

Mechanisms for shareholders and employees to provide recommendations or direction to the highest governance body.

20

12 and 13

2.7

Markets served (including geographical breakdown, sectors served and types of customers/beneficiaries).

8

2.8

Scale of the reporting organization.

8, 9, 26, 27, 32 and 33

2.9

Significant changes during the reporting period regarding size, structure and ownership of the organization.

1 and 29



95

3

REPORT PARAMETERS

Linkage between compensation for members of the highest governance body, senior managers and executives (including departure agreements) and the organization’s performance (including social and environmental performance).

N/D.

Awards received in the reporting period.



4.5

2.10

Report profile Reporting period.



4.6

Processes in place for the highest governance body to ensure conflicts of interest are avoided.

N/D.

3.1



4.7

Process for determining the composition, qualifications and expertise of the members of the highest governance body and its committees.

N/D.



4.8

Internally developed statements of mission or values, codes of conduct, and principles relevant to the economic, environmental, and social performance, and the status of their implementation.

13 and 14



4.9

Procedures of the highest governance body for overseeing the organization’s identification and management of economic, environmental, and social performance, including relevant risks and opportunities, as well as adherence or compliance with internationally agreed standards, codes of conduct, and principles.

14-19



4.10

Processes for evaluating the highest governance body’s own performance, particularly with respect to economic, environmental, and social performance.

N/D.



4.11



4.12

The report covers January 1 - December 31, 2014 period.

3.2

Date of most recent previous report (if any).

2013

3.3

Reporting cycle (annual, biannual, etc.).

Annual.

Contact point for questions regarding the report or its content.

Backcover.

3.4

3.5

Report Scope and Boundary Process for defining report content.

20

3.6

Scope of the report.

1

3.7

State any specific limitations on the scope or boundary of the report.

We report on the performance of Pluspetrol’s production areas, that is, our activities in Argentina, Bolivia Peru and some aspects of Angola.

3.8

3.9

Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations and other entities that can significantly affect comparability from period to period and/or between organizations.

1

Data measurement techniques and the bases for calculations.

All the disclosures concerning data collection techniques and calculations are detailed throughout the report.

Commitments to External Initiatives Explanation of how the precautionary approach or principle is addressed by the organization. Externally developed economic, environmental, and social charters, principles, or other initiatives to which the organization subscribes or endorses.

14-19

63 and 71-95

Sustainability Report 2014 •

99

STATUS



• • • •

4.13

DETAIL

PAGE / ANSWER

Main associations (such as industry associations) and/or national/international entities the organization supports and is engaged as a member.

ARPEL (Regional Association of Oil, Gas and Biofuels Sector Companies in Latin America and the Caribbean), IOGP (International Association of Oil & Gas Producers), IAPG (Argentina Oil and Gas Institute), EITI (Extractive Industries Transparency Initiative), CEPA (Argentina Oil Companies Chamber), Argentina-Bolivia Chamber of Commerce, American Chamber of Commerce in Argentina (AMCHAM), Argentina-Canada Chamber of Commerce, Peruvian Hydrocarbon Society (SPH), CCPS (Center for Chemical Process Safety)

Stakeholder Engagement List of stakeholder groups engaged by the organization.

20

4.15

Basis for identification and selection of stakeholders with whom the organization engage.

20

4.16 SE16

Approaches to stakeholder engagement, including frequency of engagement by type and by stakeholder group.

20

4.17

Key topics and concerns that have been raised through stakeholder participation, and how the organization has responded to those key topics and concerns, including through its reporting.

20

4.14

STATUS

DETAIL ENVIRONMENTAL PERFORMANCE INDICATORS

• • • • • • • • • • •

EN1

Materials Materials used by weight or volume.

EN2 E10

Percentage of materials used that are recycled input materials.

EN3 E2

Energy Direct energy consumption by primary energy source.

46

OG2 E3

Total amount invested in renewable energy.

No amounts are invested in renewable energy.

OG3 E3

Total amount of renewable energy generated by source.

Pluspetrol does not generate energy from renewable sources.

EN4 E2

Indirect energy consumption by primary source.

46 Consumption by corporate buildings is not included.

EN5 E2

Energy saved due to conservation and efficiency improvements.

46 and 47

EN6 E3

Initiatives to provide energy-efficient or renewable energy-based products and services, and reductions in energy requirements as a result of these initiatives.

N/D.

EN7 E2

Initiatives to reduce indirect energy consumption and the reductions achieved.

N/D.

EN8 E6

Water Total water withdrawal by source.

• • •

Economic Performance Direct economic value generated EC1 SE4, SE13, and distributed. SE14

59, 60 and 61 None of the water sources from where Pluspetrol captures consumption water in its operations is on the International Relevant Wetlands List (Ramsar List). Operations in Camisea, Peru, are situated in the Lower Urubamba Region, Cusco department, and they capture surface consumption water from Urubamba River. In the case of PPN, a sector of our operations is located in Cordillera Azul National Park.

Percentage and total volume of water recycled and reused.

59

Financial implications and other risks and opportunities for the organization’s activities due to climate change.

N/D.

EC3

Coverage of the organization’s defined benefit plan obligations.

N/D.

EC4 SE13

Significant financial assistance received from governments.

N/D.



EN10 E6

N/D.



EN11 E5



EN12 E5

Description of significant impacts of activities on biodiversity in protected areas and areas of high biodiversity value outside protected areas.

62-67

EN13 E5

Habitats protected or restored.

62-67

EN14 E5

Strategies, current actions, and future plans for managing impacts on biodiversity.

62-67

OG4 E5

Number and percentage of significant operating sites in which biodiversity risk has been assessed and monitored.

62-67

EN15 E5

Number of IUCN Red List species and national conservation list species with habitats in areas affected by operations, by level of extinction risk.

62-67 www.pmbcamisea.com

Market Presence Range of ratios of standard entry level wage by gender compared to local minimum wage at significant locations of operation.



EC6 SE5, SE7

Policy, practices and proportion of spending on locally-based suppliers at significant locations of operation.

94



EC7 SE5, SE6

Procedures for local hiring and proportion of senior executives hired from the local community at significant locations of operation.

93



59

EC2





N/D.

Water sources significantly affected by withdrawal of water.

N/D.

EC5 SE15



N/D.

EN9 E6

ECONOMIC PERFORMANCE INDICATORS



PAGE / ANSWER

EC8 SE4

EC9 SE6

OG1

Indirect Economic Impacts Development and impact of infrastructure investments and services provided primarily for public benefit through commercial, in-kind, and pro bono engagement. Understanding and describing significant indirect economic impacts, including the extent of impacts. Reserves Volume and type of estimated proved reserves and production.

100 • Pluspetrol

77, 79, 81, 83, 84 and 85

• • • •

N/D.

27

• • •

Biodiversity Location and size of land owned, leased, managed in, or adjacent to, protected areas of high biodiversity value outside protected areas.

62-67

EN16 E1

Emissions, Effluents and Waste Total direct and indirect greenhouse gas emissions by weight.

EN17 E1

Other relevant indirect greenhouse gas emissions by weight.

N/D.

EN18 E1

Initiatives to reduce greenhouse gas emissions and reductions achieved.

44 and 45

44-47

GRI INDEX

STATUS

DETAIL

PAGE / ANSWER

EN19 E7

Emissions of ozone-depleting substances by weight.

N/D.

EN20 E7

NOx, SOx, and other significant air emissions by type and weight.

43 and 47

EN21 E9

Total water discharge by quality and destination.

60 and 61

OG5 E9

Volume of formation or produced water.

60

EN22 E10

Total weight of waste by type and disposal method.

43 and 48 to 52

EN23 E8

Total number and volume of most significant spills.

43, 48 and 53 to 55

OG6 E4

Volume of flared and vented hydrocarbon.

43, 44 and 47

OG7 E10

Amount of drilling waste (drilling and cutting mud) and strategies for treatment and disposal.

52



EN24 E10

Weight of transported, imported, exported or treated waste deemed hazardous under the terms of the Basel Convention Annex I, II, III and VIII.



EN25 E5, E9

Identification, size, protected status, and biodiversity value of water bodies and related habitats, significantly affected by the reporting organization’s discharges of water and runoff.

• • • • • • • •

• • • • • •

EN26 HS4

Products and services Initiatives to mitigate environmental impact of products and services, and extent of impact mitigation.

OG8

Benzene, lead and sulfur content in fuels.

EN27

EN28

EN29 E1, E8

EN30

Percentage of products sold and their packaging materials, which are reclaimed at the end of their lifetime, by category.

Regulatory Compliance Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental regulations. Transport Significant environmental impacts of transporting products and other goods and materials used for the organization’s operations, and transporting members of the workforce. Overall Total environmental protection expenditures and investments by type.

LA7 HS3

Rates of injury, occupational diseases, lost day and absenteeism, and total number of work-related fatalities by region and per gender.

104



LA8 HS2

Education, training, counseling, prevention and risk-control programs in place to assist workforce member, their families or community members regarding serious disease.

36 and 37



LA9 SE16, HS1

Health and safety topics covered in formal agreements with trade unions.

N/D.



LA10 SE17

Training and education Average hours of training hours per year per employee by gender and by employee category.

Pluspetrol does not import or export this type of waste, pursuant to the Basel Convention.



LA11 SE17

Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing their professional careers endings.

34, 100 and 101

N/D.



LA12 SE17

Percentage of employees receiving regular performance and career development reviews by gender.

34



LA13 SE15

N/D.

Pluspetrol’s operations do not include refining operations. The products traded by Pluspetrol do not require packaging materials nor may they be recovered at the end of their lifetime given their nature.

N/D.

N/D.

LA2 SE15

Total number and rate of new employee hires and employee turnover, by age group, gender and region.

32 and 33



LA3

Benefits provided to full-time employees that are not provided to temporary or part-time employees.

35



LA15

Return to work and retention rates after parental leave, by gender.

35

Minimum notice period(s) regarding organizational changes.



LA14 SE15

32 and 33

N/D.

N/D.

103

34, 35, 100 and 101

Diversity and Equal Opportunities Composition of the corporate governance bodies and breakdown of employees per employee category according to gender, age group, minority group membership and other indicators of diversity.

12, 32 and 33

Equal Remuneration for women and men Ratio of basic salary of women to men by professional category.

N/D.

HUMAN RIGHTS PERFORMANCE INDICATORS Investment and Procurement Practices Percentage and total number of significant investment agreements and contracts that include clauses incorporating human rights concerns.



HR1 SE8



HR2 SE9

Percentage of significant suppliers, contractors and other business partners that have undergone human rights screening, and the actions consequently taken.

N/D.



HR3 SE8

Total hours of employee training on policies and procedures concerning aspects of human rights that are relevant to operations, including the percentage of trained employees.

N/D.



Non-discrimination Total number of incidents of discrimination HR4 SE8, SE18 and corrective actions taken.

N/D.



LA5 SE16

Occupational Health and Safety Percentage of total workforce represented in joint management-worker health and safety committees to help monitor and advise on occupational health and safety programs.



LA1 SE15

Labor/Management Relations Percentage of employees covered by LA4 SE16, SE8 collective bargaining agreements.

PAGE / ANSWER

LA6 HS1



• •

DETAIL



LABOR PRACTICES AND DECENT WORK PERFORMANCE INDICATORS Employment Total workforce by employment type, employment contract, and region broken down by gender.

STATUS



HR5 SE8, SE9



HR6 SE8, SE9



HR7 SE8

Freedom of Association and Collective Bargaining Operations and significant suppliers identified in which the right to exercise freedom of association and collective bargaining may be violated or at significant risk, and the actions taken to support these rights. Child Labor Operations and significant suppliers identified as having significant risk for incidents of child labor, and measures taken to contribute to the effective abolition of child labor. Forced and Compulsory Labor Operations and significant suppliers identified as having significant risk for incidents of forced or compulsory labor, and the measures to contribute to the elimination of all forms of forced or compulsory labor.

N/D.

N/D.

N/D.

N/D.

N/D.

Sustainability Report 2014 •

101

STATUS



HR8 SE10



HR9 SE2



OG9 SE2

• •

HR10 SE8

HR11 SE18

DETAIL Safety Practices Percentage of security personnel trained in the organization’s policies or procedures concerning human rights that are relevant to operations. Indigenous Rights Total number of incidents of violations involving rights of indigenous people and measures adopted. Operations where indigenous communities are present or affected by activities and where specific engagement strategies are in place. Assessment Percentage and total number of operations that have been subject to human right reviews and/or impact assessments. Remediation Number of grievances related to human rights filed, addressed and resolved through formal grievance mechanisms.

PAGE / ANSWER

N/D.



Local Communities Percentage of operations with implemented local community engagement, impact assessments and development programs.



OG13 HS5

N/D.



PR2 HS4

Total number of incidents of noncompliance with regulations and voluntary codes concerning health and safety impacts of products and services.

N/D.



PR3 HS4

Product and Service Labeling Type of product and service information required by current procedures and regulations.



PR4 HS4

Total number of incidents of noncompliance with regulations and voluntary codes, concerning product and service information and labeling.

N/D.

PR5

Practices related to customers satisfaction, including results of surveys measuring customer satisfaction.

N/D.

N/D.

• 72-95 We evaluated the social and environmental impact of all our operations, and we developed social programs in cooperation with the community.



PR6 HS4



PR7 HS4

86, 87 and 90



SO10 SE1

Prevention and mitigation measures implemented in operations with significant potential or actual negative impacts on local communities.

86, 87, 90 and 91



PR8



OG10 SE1, SE3

Number and description of significant disputes with local communities and indigenous peoples.

86 and 87



PR9



OG11 SE8

Number of sites that have been decommissioned and sites that are in the process of being decommissioned.

No sites were decommissioned during the report period.

• • •

N/D.

Actions taken in response to incidents SO4 SE11, SE12 of corruption.

N/D.

SO5 SE14 SO6 SE14



SO7



SO8



OG12 SE3

Public Policy Public policy positions and participation in public policy development and lobbying. Total value of financial and in-kind contributions to political parties, politicians and related institutions by country. Anti-competitive Behavior Total number of legal actions for anti-competitive behavior, anti-trust and monopoly practices and their outcomes. Compliance Monetary value of significant fines, and total number of non-monetary sanctions for non-compliance with laws and regulations. Involuntary Resettlement Operations where involuntary resettlement took place, the number of households resettled and how their livelihoods were affected in the process.

102 • Pluspetrol



Marketing Communications Programs for adherence to laws, standards or voluntary codes related to marketing communications. Total number of incidents of non-compliance with the regulations concerning marketing communications. Customer Privacy Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data. Regulatory Compliance Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of the organization’s products and services. Fossil Fuel Substitutes Volume of biofuels produced and purchased meeting sustainability criteria or standards.

OG14 E3

N/D.

N/D.

N/D.

N/D.

N/D.

N/D.

N/D.

Pluspetrol does not produce or purchase biofuels.

N/D.

Percentage of employees trained in organization’s anti-corruption policies and procedures.

SO3 SE11

N/D.

Customer Health and Safety Life cycles stages in which health and safety impacts of products and services are assessed for improvement, and percentage of significant products and services categories subject to such procedures.

88 to 91

Operations with significant potential or actual negative impacts on local communities.



Asset Integrity and Process Safety Number of process safety events, by business activity.

PR1 HS4

SO9 SE1

Corruption Percentage and total number of SO2 SE11, SE12 business units analyzed for risks related to corruption.

PAGE / ANSWER







DETAIL

PRODUCT RESPONSIBILITY PERFORMANCE INDICATORS

SOCIETY PERFORMANCE INDICATORS

SO1 SE1

STATUS

References

N/D.

• • •

N/D

Reported Partially reported Not reported Not declared

N/D.

N/D.

N/D.

During 2014, we did not promote involuntary resettlement of any of the communities settled in the direct or indirect area of influence of our operations.

The premises, initiatives, descriptions, programs, processes and other activities mentioned in this Sustainability Report shall not be deemed or construed either by implication or analogy, as legal, contractual obligation, or enforceable agreements, beyond any consequence resulting from any formal or express sources of legal liability. Such sources do not account or hinder their continuity, improvement or extension under the same or different circumstances, without the existence of an express acknowledgement in that regard.

SURVEY

OPINION POLL 2014 SUSTAINABILITY REPORT Through the following Opinion Poll you can send us your comments and suggestions to improve our Sustainability Report in the future. You may contact us by e-mail to [email protected] or by regular mail to the following address: Gerencia de Medio Ambiente - Lima 339 - C1073AAG Buenos Aires - Argentina.

1. WHAT TYPE OF STAKEHOLDER ARE YOU? CUSTOMER

SHAREHOLDER

EMPLOYEE

OTHER (SPECIFY)

PROVIDER

2. HOW MUCH HAVE YOU READ OF THIS REPORT? ALL OF IT

ENOUGH

VIRTUALLY NOTHING

A LITTLE

3. WHAT DO YOU THINK OF THE LENGTH OF THE REPORT? SHORT

APPROPRIATE

LONG

4. GENERAL OPINION ABOUT THE REPORT VERY GOOD

GOOD

AVERAGE

POOR

AVERAGE

POOR

4.1 GENERAL OPINION 4.2 RELEVANCE OF INFORMATION 4.3 LANGUAGE AND WRITING 4.4 DESIGN

5. OPINION ABOUT THE CONTENTS OF EACH CHAPTER VERY GOOD 5.1 CEO’S LETTER AND INTERVIEW WITH THE DIRECTOR OF ENVIRONMENT 5.2 ABOUT PLUSPETROL 5.3 OUR PEOPLE 5.4 ENVIRONMENT 5.5 COMMUNITY 5.6 SAFETY

6. WHAT OTHER INFORMATION WOULD YOU LIKE TO FIND IN SUBSEQUENT REPORTS?

7. DO YOU HAVE ANY OTHER COMMENTS ABOUT OUR 2014 SUSTAINABILITY REPORT?

GOOD

Editing and Coordination: Strategic Environmental and Social Management

Design and production: Chiappini + Becker Tel. +54 11 4314 7774 www.ch-b.com

www.pluspetrol.net

Angola Via AL5, Predio Cellwave, 3º Andar, Bairro Talatona, Luanda - Angola Tel: 244-222-309-302 Fax: 244-222-309-091 Argentina Lima 339 - C1073AAg Buenos Aires - Argentina Tel: 54-11-4340-2215 Fax: 54-11-4340-2215 Bolivia Av. Grigotá esquina calle Las Palmas Santa Cruz de la Sierra - Bolivia Tel: 591-3-359-4000 Fax: 591-3-354-8080

Colombia Edificio Torres Unidas 2, Av. Cra. 9 # 113-52 - Of. 1802 - Bogotá - Colombia Tel: 57-1-592-3777 USA 5599 San Felipe Suite 1000 Houston, Texas 77056 - USA Tel: 1-713-961-1095 Fax: 1-713-961-1097 Netherlands Muiderstraat 7A - 1011, PZ, Ámsterdam - Netherlands Tel: 31-20-662-2199

Peru Av. República de Panamá 3055 - Piso 8 San Isidro, Lima - Peru Tel: 51-1-411-7100 Fax: 51-1-411-7120/7142 Uruguay Luis Alberto Herrera 1248 - World Trade Center - Torre 2, Apto. 17 - 11300 Montevideo - Uruguay Tel: 59-82-1838-3200 Venezuela Torre Forum, Pb Oficina “B” - Guaicaipuro con Av. Ppal. de las Mercedes Urb. El Rozal, Caracas (1060) - Venezuela Tel: 58212-952-8475 / 953-8112