te year in review

International Association of Oil & Gas Producers

F
or more than 30 years, OGP has served the industry that nds and produces the oil
& gas on which the world relies. In addition to representing upstream interests before
global and regional bodies such as the United Nations and the European Union, we
identify and widely disseminate best practices in safety, the environment and other aspects
of upstream operations.
OGP was particularly active in 2005 and for good reason. It was a year when serious
questions were raised about the viability of future supplies of oil & gas. Ironically, 2005
also saw signicant efforts to limit the industrys access to many of the areas where we are
most likely to nd and produce the reserves needed to meet long-term global demand.
As ever, OGP helped the industry to respond to these challenges. As part of this, in 2005
we continued to inform decision-makers on the true impact of our operations. In addition,
we increased our efforts to help drive improvements in upstream operations around the
world through the spread of new technology and innovation. The results: greater safety
and less environmental impact both of which should lead to improved public perceptions
of our industry. We also enhanced efciencies by continuing OGPs tireless promotion of
global standards for a global industry.
In these few pages we can only provide a glimpse of the range of OGPs activities and
accomplishments in 2005. For a more comprehensive view, and to learn about the issues
that OGP is currently tackling, I suggest a visit to the Associations website: www.ogp.org.uk.
Whatever OGP accomplishes, it is through the combined efforts of our member compa-
nies and organisations and OGPs dedicated secretariat in London and Brussels. For my
own part, and on behalf of OGPs Management Committee, I would like to thank them.
Stig Bergseth,
April 2006
Highlights of 2005
Security of supply:
a fundamental issue
T
he year 2005 saw high crude oil prices
and temporary shortage of product
supply. This was due to a combination of
factors: growing market demands from
developing economies such as India and
China, political instability in major produc-
ing areas and a series of severe storms
that shut in Gulf of Mexico production for
weeks at a time.
At least one of these factors was short
term. Political instability could remain a
fact of life. And though growth in energy
demand from emerging economies is
likely to continue; it will probably not be
at the same dramatic rate seen in 2005.
Nevertheless, worries about the long-term
viability of oil & gas became a concern,
particularly in Europe.
Chairmans introduction
Therefore, OGP began an information
campaign on security of oil & gas supplies.
It was directed at European decision-
makers and included a meeting between
OGP Chairman Stig Bergseth and EU
Energy Commissioner Andris Piebalgs.
Throughout, the message focused on the
long-term viability of oil & gas (accounting
for as much as 60% of the energy mix
even a quarter-century ahead); the level of
investment required to build the enabling
framework; the importance of free and
open markets in oil & gas and the benets
of diverse sources of supply.
According to research commissioned by
OGP at the end of 2005, this campaign
succeeded in raising awareness among
Brussels decision makers. Some 80% of
those polled believed that oil & gas would
be viable fuels for decades to come.
OGP EU Affairs Manager Norbert Liermann and Nina
Commeau-Yannoussis from the EU Commission visit the
Burgan eld in Kuwait
Five new members in 2005
T
he bigger OGP is, the better the
Association can represent the upstream
industry it serves.
In 2005, ve new companies joined OGP.
They were TNK-BP, MI-SWACO, Perenco,
Oil Search Limited and Hellenic. By the
end of the year, OGP has a total of 60
members. Collectively, they produce more
than half of the worlds oil and over a third
of its gas through operations in some 80
countries.
Soundings on marine life impact
J
ust when regulatory agencies in
Australia, Brazil, Canada, the UK and
the USA were starting to re-evaluate and
update their rules on seismic exploration,
OGP embarked on a two-phase joint
industry project (JIP) to improve knowledge
concerning the sound generated
during upstream operations
and its potential effects
on marine
life.
Phase 1 was a scoping study, meant to
identify the gaps in existing knowledge.
The results were the subject of a workshop
organised by OGP in Halifax, Nova Scotia
in September. The meeting attracted lead-
ing gures from national regulatory agen-
cies, academic and research institutions,
maritime industries and non-governmental
organisations as well as members of the
upstream industry. The knowledge gaps
identied during Phase 1 were reviewed
and discussed. Output from the workshop
helped to refocus the JIPs future activities.
At the end of 2005, OGP proposed the
launch of the second phase of the JIP.
Participating oil & gas companies, trade
associations, service companies and
other relevant organisations will provide
the funding, expected to be around $20
million over three years.
Upstream safety: long-term
improvements & new priorities
I
n a study based on the biggest database
in the history of upstream safety report-
ing, the annual OGP Safety performance
indicators report found the continuation
of an improvement trend. Based on an
analysis of almost 2.3 billion work hours
of data worldwide from 37 companies
operating in 78 countries, there was
a 6% improvement in lost time injuries
recorded in 2004. Moreover, the injuries in
2004 were slightly less severe than in the
previous year.
The gures for fatalities were less encour-
aging. There were 120 company and
contractor deaths reported in 2004; nine
more than in 2003. And over half of these
fatalities were transport-related.
That is why, as part of the industry-wide
effort to reduce upstream deaths and
injuries in 2005, OGP focused on transport
safety. This led to publication of a new set
of safety recommended practices aimed
at eliminating serous road trafc incidents
and fatalities. It is applicable to all land
transport activities in the upstream industry,
including all company and contractor
vehicles and drivers operating on company
roads and premises as well as on public
roads. It also covers other transport activi-
ties including moving personnel and freight
and mobile plant activities.
In November OGP held a two-day
Transporting People & Equipment Safely
conference in Cairo to determine the best
ways to improve safety performance. The
meeting attracted more than 230 line man-
agers and safety experts from 29 countries
across six continents. The event also
included participation from transportation
services providers, regulators, equipment
manufacturers and consultants.
Having focused global attention on the
issue of transport safety, in 2005 the Safety
Committee met to determine a new theme
for the subsequent year. Building on the
results of a workshop held in 2004, they
announced that their 2006 priority would
be on managing major incident risks.
New committee established:
Surveying & Positioning
E
arly in 2005, OGPs Management Com-
mittee approved the establishment of
the Surveying & Positioning Committee. It
was formed from a previously independent
body, the European Petroleum Surveyors
Group, composed of specialist surveyors,
geodesists and cartographers from oil
companies operating within Europe. It
was regarded as the leading authority
on geographic surveying and positioning
within the international oil & gas industry.
As an OGP standing committee, Surveying
& Positioning now has a wider geographic
remit than in its previous, purely European,
existence. It gives OGP unrivalled technical
leadership in the
eld of surveying
and positioning and
promotes wider
adoption of best
practices in these
areas. Moreover,
the Surveying &
Positioning Commit-
tee is better placed
to support oil &
gas producers,
inuence decisions
by governments
and regulators and
create closer links
with standards
organisations.
The environment: a new process, a
new subcommittee & a new report
E
arly in the year, OGP went public with
a new Environmental, Social and Health
Risk Impact Management Process more
popularly known as E-SHRIMP. This exible
industry approach simplies the essential
task of assessing and managing every
aspect of an oil & gas project throughout
its development cycle.
In order to provide specic focus on marine
protected areas and species which have
a bearing on security of supply the Envi-
ronmental Quality Committee established a
dedicated sub-committee. This new group,
which rst met in the second half of 2005,
will develop a long-term strategy on the is-
sue, while simultaneously monitoring and
inuencing whenever possible regulatory
developments.
Year-end saw the publication of the latest
report on environmental performance in the
upstream industry. The report (which looks
at gaseous emissions, aqueous discharges,
non-aqueous drilling uids on cuttings,
spills and energy consumption) was based
on information submitted by 28 member
companies working in 56 countries in
2004.
Working with an enlarged
European Union
I
n 2005 the European Union expanded
its membership from 15 to 25 countries,
including a number that had formerly been
in the Soviet Bloc. With this expansion
came signicant changes to the European
institutions including the Commission, the
Parliament and the Council. To help ensure
that the relevant decision makers in the
new European government were aware
of the role of the upstream industry, OGP
embarked on a communications pro-
gramme highlighting the contributions that
our members make to Europe in general.
Throughout 2005, OGP stressed the
benets of upstream activities to Europe in
position papers, reports, presentations and
face-to-face meetings. These pointed out
that the industry:
Provides 40% of the EUs generated
electricity
Is responsible directly and indirectly for
more than 1 million jobs (in the previous
EU of 15 nations alone)
Contributes revenues of up to
15 billion a year
Annually invests more than 25 billion
to Europes direct benet
Further stimulates the European
economy through partnerships with
other industries and funding of research
programmes through university support

On the implementation of Europes

internal gas market, OGP maintained
strong involvement in the Madrid Forum of
regulators and at the European Association
for the Streamlining of Energy Exchange
(EASEE-gas), which develops common
business practices. In 2005 there were
agreements to remove obstacles to
interoperability. This is key to an open and
well-functioning gas market in Europe.
Endorsement for global
collaboration on regulations
I
n an address to the International
Regulators Offshore Safety Forum (IRF),
the chairman of OGPs Safety Committee
called for the group to work with industry
to develop a better understanding of risk
proles and how they are best addressed.
Speaking before an audience of leading
gures from government and industry
drawn from over 20 countries, Volkert
Zijlker called on IRF to join with OGP and
other industry associations to test how
existing protocols could be enhanced and
made more complete. OGPs view was that
this would be preferable to IRF proposals
for separate protocols in different countries
or regions.
OGP also took the opportunity to chal-
lenge the industrys regulators to become
more involved in the identication, develop-
ment and implementation of standards
within their regions.
IRF, in turn, challenged OGP to develop
effective ways to deal with the implications
of aging production facilities.
Raising standards globally
A
s usual, OGPs Standards Committee
was one of the Associations most
active. In addition to the usual range of
workshops and bulletins, there was the
launch of the third phase of a joint industry
project on technical editing.
Moreover, at the World Petroleum
Congress in Johannesburg, OGP chaired
a roundtable on the global impact of
upstream standards. Participants included
regulators, representatives of multi-national
and national E&P companies, contractors
and the International Organization for
Standardization.
Discussions underscored the industrys
genuine commitment to worldwide stand-
ards, highlighted the potential nancial
gains associated with applying them
and shed light on some of the difculties
encountered in achieving global objectives.
The roundtable also raised the issue of
medical standards, including standards of
tness for work in the upstream industry.
Reserves reporting considered
A
n OGP workshop held in Rome
examined one of the most controversial
issues of recent years: reserves reporting.
Featuring experts, government and the
investment community as well as the
upstream industry, the workshop helped
to identify principal stakeholders and
also considered what role if any OGP
should play in determining an industry
position on reserves reporting.
Though it was agreed that OGP itself
should not propose specic changes to
existing reserves reporting rules, despite
the articialities associated with them, the
workshop did conclude that OGP should
concentrate on playing an enabling role.
This could involve getting alignment
from the industry on a number of issues,
including ways to strengthen industry
communications on the topic.
The workshop also noted that OGP could
add credibility to any industry proposals by
facilitating participation from the account-
ing/auditing fraternity.
Without OGP involvement, there could
be a danger that the current reporting
regime, based on the largely out-moded
requirements of the US Security Exchange
Commission, would either prevail or be
replaced by something even less relevant
to upstream operations.
London ofce: 209-215 Blackfriars Road, London SE1 8NL, UK Tel: +44 (0)20 7633 0272 Fax: +44 (0)20 7633 2350
Brussels ofce: 165 Bd du Souverain, B-1160 Brussels, Belgium Tel: +32 (0)2 566 9150 Fax: +32 (0)2 566 9159
Web: www.ogp.org.uk E-mail: reception@ogp.org.uk
A company limited by guarantee Registered in England, No. 1832064 VAT No. 241 240 903
www.ogp.org.uk
SPE HSE Conference; Kuala Lumpur,
Malaysia
Jack-up Drilling Workshop; Singapore
Transporting People & Equipment Safely
Workshop; Cairo, Egypt
IMCA Annual Seminar: Expanding
Marine Contractors; Abu Dhabi, UAE
Managing Upstream HSE Issues:
Global Solutions with a Regional Focus;
Shenzhen, China

World Bank turns to OGP on aring

T
he World Banks Global Gas Flaring
Reduction (GGFR) initiative has looked
to OGP as a potential partner to assist with
monitoring, data collection and identifying
and disseminating best practice.
Launched at the
World Summit on
Sustainable Develop-
ment in Johan-
nesburg in 2002,
the GGFR has since
worked with national
governments, development
agencies and the industry in
reducing the environmentally dam-
aging and wasteful aring and venting
of gas associated with crude oil extraction.
For example, according to GGFR gures,
the amount of gas lost through a single
years aring is the equivalent of 30% of
the EUs gas consumption in 2004.
At a meeting in London OGP agreed to
co-host a best practices workshop on gas
aring in late 2006.
Brian Raggett,
who had served
as OGPs rst
European Affairs
Director, retired
halfway through
the year. He was
succeeded by
Beate Raabe,
who had been an
OGP European Affairs Manager. New to
the Brussels team in 2005 was Diederik
Peereboom, who
joined OGP from
the ofce of a
Dutch Member
of the European
Parliament. He
succeeded Beate
Raabe on her
promotion.
Events
In 2005, OGP staged or actively
participated in 14 events related to the
environment, health, safety, operations and
corporate social responsibility.
Offshore Mediterranean Conference;
Ravenna, Italy
Human Factors & Regional HSE
Workshops; Cumana, Venezuela
SPE E&P Conference; Galveston, Texas
Biodiversity and the Oil & Gas Industry
Central & West Africa; Luanda, Angola
Wildlife Conservation Society & IADC
Workshop on Environmental Impacts;
New York, USA
Sustainability Reporting Workshop; Paris,
France
World Petroleum Congress; Johannes-
burg, South Africa
International Standards Workshop:
Focusing on Africa; Johannesburg, South
Africa
Marine Sound Workshop; Halifax,
Canada

New faces; new roles

O
GPs members elected a new
Management Committee in 2005.
In a ballot that closed on 11 March, they
chose as their leaders for a two year term:
BP, Chevron, ConocoPhillips, ExxonMobil,
Qatar Petroleum, Shell, Statoil and Total.
Stig Bergseth of Statoil was again voted in
as chairman.
Earlier in the year Charles Bowen became
OGPs new Executive Director, succeeding
Alan Grant. Charles Bowen joined OGP
following a 30-year
international career
with Total that took
him to the Middle
East and the North
Sea as well as
corporate head-
quarters in Paris.
Beate Raabe
Diederik Peereboom
Charles Bowen
Publications
O
GP produced a total of 10 reports
in 2005. Most of these reports, as
well as many of the 360 others published
since 1974, are available from the
publications section of www.ogp.org.uk
Health & safety incident reporting users
guide 2004 data
Catalogue of international standards
used in the petroleum and natural gas
industries
Preventing the next major incident
Fate and effects of naturally occurring
substances in produced water on the
marine environment
Safety performance of helicopter
operations in the oil & gas industry
Standards bulletin 6
Land transportation safety recom-
mended practice
OGP safety performance
indicators 2004
Aviation weather guidelines
Environmental performance in the E&P
industry 2004 data

Marine Sound workshop; Halifax, Canada