te year in review

International Association of Oil & Gas Producers

Highlights of 2006
SOS revisited
OGPs review of the year
2005 led with a story
about security of supply
more commonly known
within the Association
as SOS. The fact this
Highlights 2006 does
the same is signi-
cant. The topic has
been a predominant
issue throughout the
year and remains so well
into 2007. (In February, the Association
made a comprehensive response to
the European Commissions Strategic
EU Energy Review known as SEER
published at the beginning of this year.)
Among the SOS
activities that
engaged OGP
during 2006 was a
20 February dinner
debate in the Euro-
pean Parliament jointly
organised with the Eu-
ropean Energy Forum.
More than 150 stakehold-
ers attended, including
Members of the European
Parliament, representatives
of the European Commission, Member
States permanent representations and
industry gures. They heard encouraging
words about resources and reserves of
oil and gas available for Europe from
around the world. They also learned,
however, that security of supply in the
decades ahead will depend on access
to resources and considerable investment
by producers as much as $200 billion
a year globally for the next 20 years.
During the course of the year, OGP
provided a consistent message to a wide
variety of international audiences. These
included the Council of Europe, the UK
House of Lords and participants at more
than 60 international conferences in
places as far aeld as Berlin and Kuwait.
OGP also conveyed the SOS message
in meetings between the EU and Russia
and India. A specially-produced brieng
document also had wide circulation.
Rhonda Zygocki,
March 2007
I
n terms of membership and global reach, OGP is bigger than ever. At the end of
2006 the Association consisted of 66 members and associates, representing operat-
ing interests and activities on and around six continents. Collectively, OGP members
produce more than half of the worlds oil and over a third of its gas.
The scale and diversity of our membership give OGP two distinct advantages. As a
committee- and task force-based organisation, it provides wider access to what we
endearingly call sweat equity our continuing reliance on the effort and expertise of
a dedicated pool of talent from throughout the industry.
Just as important, OGPs broad membership base gives the organisation signicant
clout in dealing with the range of issues that have an impact not just on the upstream
sector but on the global economy and environment as well.
Two issues in particular dominated our agenda in 2006:
Building condence in the security of oil and gas supplies within both global and
regional contexts
Finding solutions to constraints on exploration and production due to concerns
over potential environmental impact
This report is meant to give a avour of what OGP achieved in 2006 and a
foretaste of the challenges and opportunities that are ahead.
Fortunately, we face the future from a strong position. Its worth noting that OGP
membership has already started to grow in 2007. Moreover, the election of a new
Management Committee, due to be endorsed at our Annual General Meeting in
New Delhi in April, will bring fresh ideas and renewed vigour to the Association.
For my part, I have very much enjoyed my period as Chair. It has been an honour to
represent the upstream operators on a global stage and to help guide the future of an
industry on which the world will continue to depend for decades to come.

An introduction from the Chair:

International Association of Oil & Gas Producers
O
il &
gas: the bridge to a sustainable future
Facts, gures & forecasts
An assessment of current oil and gas supplies and ways to meet
future demand by the association that represents producers of
more than half of the worlds oil and over a third of its gas

briefng paper
Focus on are reduction
OGP has joined forces with the World
Banks Global Gas Flaring Reduction
(GGFR) Initiative. Its aim: to minimize, as
far as is possible within safety con-
straints, the gas ares that burn around
150 billion cubic metres of valuable fuel
every year or enough gas to keep the
entire world supplied for a month.
To create greater awareness of this
objective and to disseminate best
practice, OGP and GGFR co-hosted the
second global forum on the subject in
Paris in December. The event attracted
more than 250 oil and gas experts
and interested parties representing 130
companies from more than 40 nations.
OGP Chair Rhonda Zygocki opened
the forum with a speech stressing that
gas aring has become integral to
issues such as security of supply, climate
change and clean development and the
economics of energy companies and
producing countries alike.
Other speakers at the two-day event
included Rashad Kaldany, the World
Banks Director of Oil, Gas, Mining
& Chemicals; representatives of the
governments of Equatorial Guinea, Kaza-
khstan, Norway, Russia and the United
States; Sonatrach Chairman Mohamed
Meziane and Christophe de Mar-
gerie, E&P President and Executive Vice
President of the forums host company,
Total. Claude Mandil, Executive Director
of the International energy Agency also
addressed the meeting.
Technical presentations included sessions
on aring and venting reduction through
automated process control, enhanced
gas recovery and North Sea develop-
ments.
Safety:
improvements and innovations
The need to improve upstream safety
was one of the prime reasons for the
founding of OGP more than 30 years
ago. Safety remains an important focus
of the Associations agenda and the
annual report on safety performance
indicators has become a global industry
benchmark.
The 2006 report (based on 2005 data
submitted by 39 companies operating
in 75 countries) showed improvements
across the majority of the industrys per-
formance indicators. The fatal accident
rate dropped by 33% from the previous
year against a 4% increase in upstream
activity. Figures for 2006 (published
in 2007) will give an indication if this
dramatic improvement is the start of a
trend.
With over 2.38 billion hours worked,
there were 3.5 deaths per 100 million
hours. This was the lowest rate since
OGP started publishing annual safety
reports in 1984.
New to the report were analyses of
the causes of lost work day cases and
greater detail on fatalities and other
signicant incidents. This information is
providing a greater understanding of
how and why accidents occur which
will lead to more effective strategies for
accident prevention.
Other safety milestones in 2005 in-
cluded the creation of new Diving Safety
Task Force, a workshop on managing
major incident risks and a presentation
to the International Regulators Forum by
Safety Committee Chair Volkert Zijlker,
who was succeeded by Don Jacobsen at
the end of the year.
OGP stand with Kaldany & Charles
0
1
2
3
4
5
6
7
8
Contractor
Company
Overall
2005 2004 2003 2002 2001
2.4
6.4
5.1
4.8
4.9
5.2
3.5
2.8
1.3
2.0
2.3
6.0
6.1
6.2
4.4
Fatality rate for the 2001-2005 period
Marine sound programme
makes a splash
The joint industry programme (JIP), dedi-
cated to expanding knowledge about the
assessment of exploration and production
sounds in the marine environment, initi-
ated phase 2 in 2006 with the start of tar-
geted research projects. Fifteen member
companies and associations signed on as
participants for the rst three years of re-
search funding. Dr. Roger Gentry, one of
the worlds foremost authorities on higher
marine vertebrates, became the JIPs Tech-
nical Programme Manager in mid-year.
In that role, he spoke at a workshop held
as part
of
the
58
th

annual
meeting of
the Interna-
tional Whaling
Commission in St.
Kitts & Nevis and also
appeared at the annual
conference of the
American Acousti-
cal Society in Providence, Rhode Island.
With up to $21 million to commit to
research projects over the course of three
years, the JIP is the largest ever managed
by OGP. As of the end of 2006, the JIP
had embarked on 19 separate research
contracts, ve of which were in place by
year end. Some of the new projects be-
ing supported will develop the upstream
industrys capability to detect the proxim-
ity of marine mammals to seismic survey
activity by using passive monitoring. Oth-
ers will focus on monitoring the behavior
of sh
exposed to
repeated
pulses of
sound. Some
of the work being
supported is con-
centrating on the
characteristics
of E&P sounds
themselves.
Brussels stakeholders speak
out; OGP responds
To discover what EU decision-makers
and opinion formers think about OGP
and its activities, OGPs Brussels ofce
commissioned a survey among leading
gures in the European Commission,
Members of the European Parliament,
EU Council members and gures
from the media and non-govermental
organisations. Questions covered
industry representation, key issues and
stakeholder involvement.
The survey results showed high aware-
ness (90% of those polled in the Com-
mission knew OGP), a fairly balanced
perception of the industry and alignment
with stakeholders on the issues that are
most important.
One of the most encouraging outcomes
was evidence that OGPs message on
the future of oil and gas has had an
impact. Over 75% of those who replied
believe that oil and gas will last as viable
fuels for 30 years or more.
On the negative side, it became
apparent that more work was needed
to deepen stakeholders understanding
about the upstream sector.
Actions resulting from the survey ndings
included a new more European identity
for the Brussels ofce, a new European
brochure and a higher European prole
achieved through an increase in speak-
ing engagement to relevant bodies. In
the pipeline is a series of industry fact
sheets specically geared to a European
audience.
Up to standard
In 2006 OGP continued to be highly
active in the area of standards. As ever,
the goal was global standards used
locally worldwide in order to improve
safety and efciency. To that end, the
Standards Committee and secretariat
worked closely with the International
Organization for Standardization to
improve the global standards process.
In addition to publishing widely
circulated standards bulletins and
staging workshops in the Middle East,
the Americas and Europe, OGP was
instrumental in the publication of 18 new
oil and gas standards during the year.
In recognition of the successful develop-
ment of ISO/TC67, those responsible
most of whom are members of OGPs
Standards Committee were honoured
by the ISO with the Lawrence D. Eicher
Leadership Award.
Cheryl Stark receiving the Lawrence D. Eicher Leadership award
Breakthroughs on cuttings & CCS
At any one time, the upstream industry
confronts a wide range of issues that
could have a bearing on effective-
ness and cost of future operations.
Often, these issues can go on for
years before they are resolved one
way or another. But in 2006 OGP
achieved a number of breakthroughs.
A success with OSPAR concerned
operational discharges. New restrictions
would have hampered the efciencies of
offshore operations. Promotion by OGP
of procedures based on sound scientic
solutions resulted in permission to leave
accumulated piles of drill cuttings on the
seabed after installation decommission-
ing provided doing so can be demon-
strated to be best environmental practice.
Developments on carbon capture and
storage (CCS) were positive on three
fronts in 2006. Having heard that con-
cerns over the nature of CO
2
streams to
be stored and fears over reservoir leaks
were unfounded, on October 30 London
Commissions recent report on the issue (to
which OGP contributed), which encour-
ages developing the concept further within
the EU. A legislative framework could be
proposed during the course of 2007.
Depleted oil
or gas reservoirs
Deep saline aquifer
Unminable
coal beds
Pipeline
Pipeline
Power station
with CO
2
capture
Convention delegates voted to allow CCS.
In parallel, OSPAR is developing its policy
along the same lines as that agreed in
the London Protocol and the European
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www.ogp.org.uk
On a roll
OGP grew at an unprecedented rate in
2006, with seven new members signing
on.
In order of joining, they were:
Yemen LNG Company Ltd
Dolphin Energy
International Association of Geophysi-
cal Contractors
Marathon (a company making a
welcome return to the fold)
Baker Hughes
Wintershall
Gas de France
Nexen
The trend continues. The rst quarter
of 2007 OGP welcomed two new
members: Persian LNG and Petropars.

Administration Manager Janet St.

John-Austen and EU Affairs Manager
Norbert Liermann both retired at the end
of the year.
It was OGPs good fortune to welcome
Richard Hall, on secondment from Shell,
as Norberts replacement in Brussels.
Moving on, moving in
In 2006 OGP bid fond farewells to three
familiar faces.
Management Committee Chair Stig
Bergseth stood down when a new Statoil
assignment in Calgary demanded his
sole attention.
Norbert Liermann welcomes Richard Hall
Events
In 2006 OGP staged, actively par-
ticipated in or featured prominently at
23 events related to health, safety, the
environment, operations and sustainable
development.
CCS round table, Houston
SPE HSE Conference, Abu Dhabi
NATO Security Forum, Prague
East-West Institute Worldwide
Security Conference, Brussels
OGP/IPIECA Middle East biodiversity
workshop, Abu Dhabi
Standards Workshop, Doha
American Society of Safety Engineers
Middle East Conference, Bahrain
EU Energy Conference, New Delhi
Interspill, London
OGP/IAGC HSE & Geophysical
Forum, Houston
OGP/IPIECA arctic biodiversity
workshop, Tromso

Reports
OGP produced a total of 10 reports in
2006. Most of these, as well as many
of the 370 others produced published
since 1974, are available from the
publications section of www.ogp.org.
uk.
Report on HIV/AIDS
Helicopter safety report
Lifting & hoisting report
Managing FPSO risks report
Workplace stress report
Biggest ever safety report
Malaria guide
Environmental report
Health risk assessment roadmap
SOS brieng paper

Stig Bergseth and Janet St.John-Austen

OGP/IAGC Global HSE Forum,
Gatwick
Managing Major Health Risks
workshop, London
Americas Standards workshop,
Veracruz.
International Standardization
Seminar, Calgary
International Regulators Forum,
Landgraafber
Safety data workshop, London
Offshore structures workshop, Vienna
Chatham House Middle East Invest-
ment Conference, London
Occupational Health Conference,
Oman
World Junior Oil & Gas Conference,
London
Global Gas Flaring Reduction Forum,
Paris
Saudi Aramco First International
Standards Forum, Jeddah