Jaarverslag voor online gebruik engels by EBN

Annual report 2014 Sustaining value from Dutch oil and gas

Contents

Preface

About EBN

Profile

Organisation chart

Business model

The oil and gas chain

Life cycle of oil and gas fields

Our stakeholders

Most important results for 2014

Report by the executive board

Vision and mission

Strategy

Roadmaps based on technology policy

Other focus areas

General and social developments

Results for 2014

The people of EBN

Outlook and action plans for 2015

Report by the Supervisory Board

Corporate Governance

Integrity

Risk management

Appendix

About this report

Materiality matrix

Financial statements

Key figures

116

Glossary

118

Preface

The turbulent times we went through a year ago

ical challenge of extracting the available gas safely

are not over yet. On the contrary. The words gas

and sustainably, this is precisely where the challenge

and gas production are at the front of everyoneâ&#x20AC;&#x2122;s

lies for us and for our partners in the chain. Whilst

minds, more often in a negative sense than a positive

there is an incredible amount of knowledge available,

one. The discussion about the most responsible

we have not yet succeeded in sharing this knowledge

production level from the Groningen field continues

sufficiently with consumers and other target groups.

unabated, and residents are rightly concerned about

We have not been clear about exactly what we do,

their safety and their homes. They are justified in

about the complexity of the subsurface, about the

asking the government and NAM to work harder

dangers and the risks, about the challenges we Â

on solving the problems. We have to pull out all the

have to face or about our concerns for safety and

stops and improve the situation for the people of

the environment. We want to offer more transÂ

Groningen. Great energy must be put into repair-

parency, and we can only do so if we combine forces

ing damage and reinforcing houses. Dealing with

in the sector.

everything in the short term is a huge task: 20,000 damage reports in 2014 (which comes down to an

In the coming years, therefore, it is expected that

average of 60 a day) is something that is not dealt

significantly less gas will be extracted from the Gro-

with overnight.

ningen field. This reduction cannot be compensated by the gas from the small fields. The production from

Of course it is best to prevent earthquakes, or at

these small fields is gradually dropping and we are

least to drastically reduce their number. Investiga-

currently only able to slow down the decline as far

tion is currently being done into the most optimal

as possible. Technically speaking, gas production

measures, but this will take some time, due in part to

is becoming ever more challenging and expensive.

the complexity of the Groningen field. The Minister

It requires oil and gas companies to be willing to

of Economic Affairs has set a production ceiling for

continue to invest in the Netherlands. At a time

the Groningen field, in order to at least reduce the

when oil prices have more than halved, this does

frequency of earthquakes. This ceiling has meant

not always go without saying. There is less room for

that considerably less gas was produced in 2014

investment and the oil and gas companies can only

than in the previous year: 42.3 billion Nm3 compared

spend their money once. Yet there are still plenty of

to 54 billion Nm3 in 2013. At the start of 2015, the

opportunities in the Netherlands, both onshore and

ceiling was lowered by a further 3.1 billion Nm .

in the North Sea, as we have learned from various

EBN endorses this approach. We are thoroughly

studies. There are some hidden gems, which can

aware of the concerns that exist in society.

often be developed responsibly and profitably using new technology.

Because of the problems caused, many people have negative associations with the production of

Along with our operators, last year we once again

gas. Although it has an unblemished image with

invested to the full in the exploration and production

regard to comfort and ease of use, developments in

of new onshore and offshore fields. Over 60% of all

the Netherlands and abroad mean that this image

exploration and evaluation wells were successful and

is crumbling. If we want gas to become socially

we were able to add eight small fields to our portfo-

acceptable (once again), it is an absolute necessity to

lio. This is not enough, however, to compensate the

provide good information. Apart from the technolog-

falling production from small fields. Six new gas fields

and one new oil field were also taken into produc-

EBN employees included in this report show that

tion. And finally, the expansion of the Norg gas stor-

contributing to the Dutch energy climate is one of

age was finalised in December and the construction

their main motives. EBN wants to do more than just

of the Bergermeer gas storage is in its completion

invest financially in exploration and production. EBN

phase. Both gas storages are needed to provide the

aims to be an expertise centre for the partners in an

Netherlands with sufficient gas if demand is high.

industry that makes a targeted investment in knowl-

Over the past 50 years, gas has been important to

edge. This is an important motive for our employees

the Netherlands, and it will continue to be so in the

choosing to work with EBN. It is no coincidence that

coming decades as well. Maybe not in the traditional

the theme of our report is ‘The people of EBN’. In

sense, where gas was seen as the comprehensive

2014, we were voted a ‘Great place to work' – a title

solution for the provision of energy (gas by default),

we bear with pride and hope to uphold in the years

but more as a way of smoothing the transition to a

to come.

sustainable energy system (gas by design). So in the coming decades, gas will still occupy an extremely

We will accept the challenges that lie before us.

important place in the energy mix. It fulfils a valuable

Collaboration in our sector is essential in doing so

role as a reliable and flexible source of energy, as gas

– as is openness on all matters. Through this report,

is essential in facilitating the transition to a more sus-

we hope to contribute to restoring faith in gas and

tainable provision of energy at an acceptable cost.

gas production.

Through this report, too, we aim to provide better

Jan Dirk Bokhoven

insight into what EBN does exactly, and into the role we play in the chain, from exploration to the production and provision of gas and oil. The non-financial aspects associated with this also require better insight. In that respect, we talked to some of our main discussion partners about whether and how we could arrive at a joint sustainability plan. We also talked about how we, as partners in the chain, can give account to our stakeholders about this sustainable performance. Internally, we analysed which material topics are important to us and to our stakeholders. The analysis forms the basis of this report. Some of those topics concern our employees: their welfare and their development. We may be a small organisation, but together we face some big challenges. The social relevance of our work is important to our employees. The interviews with six

Jan Dirk Bokhoven

About EBN Profile

EBN’s legal predecessor, DSM Aardgas, was set up in

EBN B.V. is actively involved in the exploration,

1973. Until the end of 2005, EBN was run by DSM,

production, storage and trading of gas and oil. EBN

and the executive board of DSM held administrative

is a state participation, of which 100% of the shares

responsibility for EBN. Since 2006, EBN has been

are held by the Dutch State and are managed by the

an independent company, with the executive board

Dutch Ministry of Economic Affairs, which is also the

reporting directly to an independent Supervisory

department responsible for policy.

Board.

As far as possible, EBN secures the future profits

EBN’s profits are paid in full to the Dutch State.

from oil and gas production for the Netherlands. It

The income and taxes paid by EBN amount to

is also our job to advise the Minister of Economic

around half the total gas revenues, forming a major

Affairs on the mining climate. We stimulate activities

source of income for the Netherlands. In 2014, the

in the areas of exploration, development and

total natural gas revenues amounted to approxi-

production by Dutch and international oil and gas

mately EUR 10.3 billion, which is equivalent to

companies. The interest invested by EBN amounts

EUR 600 per capita. EBN’s contribution to this was

to between 40% and 50%. EBN also facilitates and

EUR 4.9 billion. With over 16,000 direct and indirect

shares knowledge.

jobs, the gas industry helps promote employment in the Netherlands.

Besides interests in oil and gas activities, EBN has interests in offshore gas pipelines, onshore underground gas storage and a 40% interest in gas trading company GasTerra B.V.

Organisation chart

A team of four directors functions on the basis

In carrying out oil and gas activities, EBN forms a

of shared responsibility. Tasks are divided over

major link between the oil and gas market and the

functional areas: a Director Asset Management, a

Dutch government. EBN already has a great deal

Director Technology and a Director Finance, under

of knowledge about the exploration and production

the chairmanship of a CEO. The CEO is the sole

of oil and gas fields, both onshore and offshore, and

statutory director

adds to its knowledge through research. This knowl-

â&#x20AC;&#x192;

edge comes together mainly within the Technology department. The Asset Management department functions as the point of contact for our business partners, promoting and managing the interests in participations. The Finance department is responsible for the financial matters within EBN, as well as managing the flow of funds.

Organisation chart

CEO Legal

Commercial Department

Communications and Public Affairs Office Management

Director Asset Management

Director Technology

Director Finance

Asset Groups

Asset Support

Business Control

GasTerra

Production and Infrastructure

Accounting & Reporting

Business Development

Exploration

Treasury

Expertise

ICT

‘A unique combination of complex work and social relevance’ ‘To be honest, I’d never heard of EBN before I applied for a job there. And I didn’t even know that the Dutch State directly participated in gas production. It was only when I came to work here that the enormous scale of the portfolio became clear to me. EBN gives you the room to excel. I started in 2009 as Commercial Advisor, and made the switch to Business Control a year and a half ago, as I wanted to work closer to our core business. In my role, I ensure optimal financial insight into

Thanks to our position, we possess an enormous

the performance of the investments on land – from

amount of knowledge, as we look across the borders

annual budgets to monthly insight into the per-

of the invidual licences and are familiar with all the

formance of EBN and the operators, costs versus

best practices in the sector. This knowledge position

budget and added value. This takes place on the level

allows us to add value in the Dutch gas and oil sector

of the participations, but also per operator, and –

by helping our partners to perform optimally. We

if the situation requires – to the level of production

do so by actively thinking along with them, sharing

installations. The collaboration with colleagues from

knowledge and offering alternative solutions where

the Accounting & Reporting department is essential

necessary.

to this process. We use their data for our analyses, and they rely partly on our knowledge of the busi-

Presenting impactful analyses based on all our data

ness for their interpretation of the figures.

is a powerful, convincing instrument, which we are using to increasingly good effect. In my job, I’m

We are an organisation of professional specialists.

working in the heart of the business, and that’s what

The focus is on content, and everyone works towards

I enjoy doing best’.

the same goal on the basis of their own professional field. This content-focused enthusiasm ensures a corporate culture in which I feel at home. Moreover, the combination of complex work and social relevance really appeals to me. We are not here for ourselves, but for society, for the State and for the parties with whom we collaborate: the partners and particularly the operators.

Edmund Wellenstein Business Controller

Business model

ment and research result in investments focused

EBN participates in 203 partnerships focused on the

on making optimal and responsible use of the

exploration and/or production of oil and gas in the

Dutch subsurface.

Netherlands, both offshore and onshore. Investment Developing knowledge

As EBN does not exploit any gas or oil resources

Value creation takes place through conducting stud-

itself (i.e. we do not exercise any executive powers),

ies on possible new gas and oil sites, and carrying

we are dependent on the investment proposals of

out research projects on new technologies. We also

licence holders in joint ventures. As soon as the

learn from exploration and production activities

Minister of Economic Affairs has granted a licence

in our partnerships. These studies and research

for exploration or production, EBN gets a 40%

projects are essential building blocks in our

interest in general.

business model. The aim of investing in exploration is to gain insight Applying knowledge

into the presence of oil and gas and into whether

The knowledge we gain is shared with the market

it can be produced. For example, EBN invests

and with our shareholder. We provide clear insight

in seismic survey in the exploration of potential

into new opportunities and manage actively on the

structures and in exploratory drilling to demonstrate

basis of research and development in the sector.

the presence of oil or gas. Profitable resources are

The investments we make in knowledge develop-

developed jointly with our partners.

EBN Business model

Developing knowledge

Applying knowledge

Roadmaps

Sharing knowledge

• Investing in new knowledge, analyses and instruments • Learning from operational activities • Insight into opportunities for new development

• Marketing new opportunities • Innovation • Recommendation to Ministry of Economic Affairs

Investing

Value creation

Kennis Knowledge

Economy Effects

Impact

• Proﬁts/prosperity • Employment • Economic activity

Optimising production of oil and gas reserves

Developing recoverable oil and gas reserves

NOV management • Collating technical, commercial, legal and business information • Managing participations • Advising • Exchanging knowledge

Energy supply • Security of provision • Security of supply

Studying drilled oil and gas reserves

Exploring possible oil and gas deposits

Input

The cover of this report shows an enlarged version of the business model.

Environment • Environmental impact • Greenhouse gas emissions

Sturing door feedback Feedback en interactie

Investing in projects

Social impact

Core activity

Output

We invest in the drilling and construction of produc-

Natural gas production and its consequences

tion facilities and pipelines, with the aim of eventually

have an effect at local level and on the climate and

developing an oil or gas field and selling the oil or gas

environment. Gas production in Groningen causes

on the market.

earthquakes. This leads to great unease in the population, which feels unsafe, as well as to serious

Knowledge and economic value are created in this chain. There are also social effects.

damage to homes and buildings. The production and use of oil and gas lead to CO2 emissions, and there is a risk of pollution from oil leaks, for example.

Social effects

Production activities can also have consequences for

Our existing and new partners in the joint ventures

biodiversity, although they are not always negative

can draw on the operational and technological

ones. For instance, underwater flora and fauna in the

knowledge we share with them.

direct vicinity of the offshore production platforms are more luxuriant than in the surrounding underwa-

There is also economic value creation, as the profits

ter areas. The infrastructure of onshore and offshore

from gas and oil production flow to the Dutch

oil and gas fields has to be cleared away at the end of

state. The oil and gas industry is, moreover, a major

field life, which can be harmful to the environment.

economic booster of direct and indirect employment (addition of 16,000 jobs). Owning gas has international relevance for the Netherlands. The production of natural gas gives the Netherlands a high degree of energy independence and contributes to prosperity. The Netherlandsâ&#x20AC;&#x2122; good gas infrastructure and its own gas supplies allow it to play a significant role as a European gas country. Owning our own natural gas means that citizens and companies are assured of supply and can count on an affordable provision of energy in the coming decades.

The oil and gas chain

Midstream

The illustration below shows our involvement in the

The production companies sell the oil and gas mainly

production of oil and gas. EBN plays a role in several

to wholesale companies. EBN sells its gas to the

parts of the chain.

wholesale company GasTerra, which sells the gas on to various middlemen and end users. EBN is a joint

Upstream

shareholder of GasTerra.

The upstream activities involve the exploration and production of natural gas and oil. These activities take

The natural gas is transported through pipelines

place both onshore and offshore. Along with oil and

to users in the Netherlands and abroad. The oil

gas companies, which execute the work, EBN invests

produced is transported sometimes through pipes,

in the exploration and production of gas and oil.

but also by tanker (over the sea) or by truck/train (over land).

The natural gas produced is transported to processing plants, where it is made suitable for introduction

As the time that natural gas is used differs from the

into the national gas grid.

time that it is produced, it is necessary to arrange storage capacity. This capacity can be filled when

The State Supervision of Mines, which falls under

supply exceeds demand (usually in the summer

the responsibility of the Dutch Ministry of Economic

months) and emptied in the reverse situation (in

Affairs, supervises the production of oil and gas.

the winter months). EBN is the joint owner of four underground gas storage facilities.

The oil and gas chain Horticulture

National high-pressure gas grid

Regional low-pressure gas grid Households/ofﬁces

Treatment and/or compression Gas storage

Collection pipes Onshore and offshore gas and oil extraction

Electricity generation

Transport

Industry

Gas Oil LPG

Filling stations

Condensate Products for reﬁning

Oil storage Reﬁneries

UPSTREAM

MIDSTREAM

The cover of this report shows an enlarged version of the oil and gas chain.

DOWNSTREAM

Downstream

Prospecting: EBN carries out studies into new

In the Netherlands, natural gas is supplied to the

gas and oil sites, using regional knowledge and

end user through the regional low-pressure gas grid.

seismic surveys.

Natural gas is used as household fuel (for cooking and heating), in electricity generation (central and

Exploration: along with licence holders, we

decentral), for industrial processes (high tempera-

test potential gas or oil resources through explora-

ture) and as a raw material (e.g. artificial fertiliser).

tory drilling.

Oil is used as a raw material in industrial processes (e.g. manufacturing plastic, nylon and

Construction: along with our partners, we develop

rubber) and is refined into transport fuels like

profitable resources.

petrol, diesel and kerosene. EBN plays no role in First gas production: the reserves are produced,

the refining activities.

providing their production is responsible and The Energy Department of the Netherlands

economically profitable. From this phase onwards,

Authority for Consumers and Markets (ACM)

there is usually a return on investment.

supervises the supply of gas. End of gas production: when a gas field has come to

Life cycle of oil and gas fields

the end of its life, the wells are plugged permanently

EBNâ&#x20AC;&#x2122;s involvement in oil and gas production can be

and the infrastructure is dismantled.

understood better by taking a look at the life cycle of an oil or gas field. The illustration below shows the

Former state: the surroundings are restored to their

process of exploring and extracting oil and gas, and

former state.

supplying them to the end user.

Life cycle of oil and gas fields

exploration

drilling

production

decommissioning and restoration

Our stakeholders

Internal and external stakeholder dialogues

As shown in the description of our business model

In 2014, we investigated which sustainable and

and our chain, a number of stakeholders are directly

social subjects we needed to include in our annual

involved in our activities:

report. The investigation was based on an internal

• The Dutch government as shareholder

analysis. Employees from our own organisation

• The Dutch government as licensing authority

and experts from the sector determined the most

(supervision of legitimacy)

important subjects from the chain, which were then

• The employees of EBN

discussed by the board. We shared the results of

• The Dutch government as policy-maker (energy

the internal analysis with a number of stakeholders

policy) • Oil and gas companies as joint venture partners (economic interest)

directly involved with our company. You can read more about this in the section Non-financial performance on page 36.

• Research institutes (knowledge-sharing, employment, social effects and economic interest)

Education EBN’s activities have a great social influence. It is

EBN has indirect influence on other stakeholder

therefore essential to contribute to social awareness

groups, who may each have their own interest in gas

about energy, and about the subsurface in par-

production.

ticular. In 2014, therefore, EBN supported various

• Citizens and companies as users of oil and gas

initiatives.

(availability of energy and economic interest) • Dutch society (prosperity, CO2 reduction, energy security, innovation and employment) • NGOs (nature and environment issues, and biodiversity) • People living near onshore projects and production locations (safety and damage)

In 2014, EBN organised its first Energy Lecture for a large number of students in Utrecht. The aim of the lecture was to discuss the latest position concerning climatology and to initiate the dialogue between students, the industry, NGOs and science.

In order to increase knowledge about the subsur-

External complaints procedure

face, EBN also contributed to DomUnder. This

To minimise the distance from the general public,

archaeological dig under Dom Square in Utrecht has

EBN can be reached by telephone and e-mail by

been developed into a historical exhibition, where

interested parties and discussion partners, also in

you can see the mediaeval cellars and remains of

the case of complaints about operational work. Even

the walls of the Roman fort Trajectum. DomUnder

though EBN is never the party carrying out the work,

shows the relationship between the various layers

we do ensure that complaints are passed on to the

of the subsurface and historical periods. The same

relevant department and to our operating partners.

applies to the GeoFort in Herwijnen (in the Betuwe region). This fort has been transformed into a play area, where all the activities concern the earth. Together with Shell, EBN provided a virtual lift that allows visitors to be transported to the centre of the earth.

Most important results for 2014 EBN’s sales amounted to EUR 6.6 billion

Investment levels rose to EUR 765 million

(2013: EUR 8.8 billion), with a net profit

(2013: EUR 652 million), with the highest

of EUR 1.6 billion (2013: EUR 2.3 billion).

investments in the gas storages in Norg and

Sales were considerably lower, due to lower

Bergermeer. A total of EUR 202 million was

production and lower prices.

invested in the two storages, and the rest of the investments were made in the develop-

EBN’s share in the total gas production

ment of wells and fields.

amounted to over 27.5 billion Nm . (2013: 32 3

billion Nm3). This drop was caused partly by

The number of joint ventures in exploration

less production, both from the Groningen field

and production rose by two in comparison

and from the small fields. Total gas production

with 2013, to 193.

from the Dutch small fields amounted to 24 billion Nm3. EBN’s share in these small fields

52 drillings were carried out in 2014

was 10.5 Nm (2013: 11.4 billion Nm ).

(24 onshore and 28 offshore).

‘The facts show that our approach works’ ‘Actually, I’ve been working all my life in the oil and gas industry – from exploration to refining. Four years ago, when I had to choose between working again for one of the supermajors or starting with EBN, I hesitated for a moment. In the end, social concerns were the deciding factor. As Asset Manager, it is my task to earn the optimal

This enables us to facilitate and advise the operators.

economic return from offshore gas production in the

If necessary, we can be thorn in the side, but in the

part of the Dutch North Sea in my portfolio. In doing

end we are all working towards a joint goal.

so, I work closely with six E&P operators. The economic return goes to the Dutch State, so indirectly I’m

The facts show that our approach works. There

contributing to the building of schools and hospitals,

is more activity in the Dutch North Sea, there is

etc. EBN is a nice company to work for, and my job

more exploration, and more wells are being drilled.

gives me the opportunity to be involved with 85

It always gives me a kick when we get another well

participations, four pipelines and two underground

on the sequence or realise a better development

gas storages.

concept, or sometimes simply when an operator appreciates what we are doing’.

Over the past four years, we have undergone great professionalisation, which is reflected in the social capital we realise. The main success factor is a renewed focus. With clear objectives and a consistently recognisable policy, our work concentrates on maximising production from the small fields. Although we can’t step into the shoes of the operators, we do know what all the operators in the Netherlands are doing. We see which technology is applied successfully or unsuccessfully, have insight into the subsurface of all licences, and we look beyond the licence boundaries.

Gareth Noble Asset Manager

Report by the executive board

f.l.t.r.: Berend Scheffers, Jan Boekelman, Thijs Starink en Jan Dirk Bokhoven

Vision and mission

On the basis of studies, we have developed a longterm vision. Without a firm, continual growth of

Vision

projects that can add gas reserves, annual produc-

The subject of gas is regularly at the heart of public

tion from the small fields will soon diminish. EBN

debate, and not always in a positive sense. The

therefore thinks it is important to carry out all the

earthquakes in Groningen caused by gas production

profitable projects in good time. The NOV manage-

lead to feelings of unease and uncertainly in the

ment cycle is a system that works with strategies and

residents of this province. EBN is thoroughly aware

action plans that are targeted at individual operators.

of the concern that exists in society and wishes

This integral approach has paid off in recent years.

to contribute to a responsible future position for natural gas in the Netherlands.

Through the production of gas, EBN contributes to a stable energy supply in the Netherlands.

The role of the smaller fields owned by the

Gas is the backbone of the current energy supply

Netherlands is becoming more important now

and it will remain a significant part of the energy

that production from the Groningen field has

mix in the coming decades. Natural gas can be

been reduced. A lot of oil and gas has already been

deployed flexibly, allowing it to meet irregular

discovered in the Dutch subsurface, but there are

energy demands.

still substantial amounts of potentially recoverable natural gas and oil. The easily recoverable resources

Mission

have already been recovered or are in production.

EBN safeguards the profits from oil and gas produc-

However, many challenges will still arise in the case

tion for the Netherlands as far as possible. We do so

of the resources that are more difficult

by realising optimal economic profits for the Dutch

to recover. Exploitation will become increasingly

society in a responsible, safe and sustainable way.

difficult. Along with our partners, EBN is investigating the most suitable technologies for doing so, which are often new ones. EBN manages its portfolio actively through NonOperated Venture (NOV) management. As a partner in 203 participations and joint ventures, EBN thinks it is important to focus strongly on the activities that create the most added value for the Netherlands.

Strategy

Stimulating operators to

In order to prolong the profits from oil and gas

optimally exploit fields

production for the Netherlands as long as possible,

We want to stimulate operators to continue to invest

gas must be produced from the small fields to an

in oil or gas production from existing small fields and

increasing extent.

new ones that are still to be explored. We contribute to an optimal investment climate by gaining and

In order to achieve this, EBN has formulated a

exchanging knowledge about the potential in the

strategy that is founded on three pillars:

Netherlands and about new exploration technologies. Using NOV management, we manage the

1) Stimulating operators to optimally exploit fields;

participations in a professional way. Our internal

2) Exploring and developing subsurface potential;

operations and systems have been set up in such a

3) Contributing to a sustainable energy system.

way that we can carry out these activities optimally. Our goal is to encourage and expand activities in exploration, development and ultimately production, so that the existing infrastructure in the North Sea and on land continues to be exploited as long as possible.

Vision, Mission and Strategy Vision There is a substantial amount of potentially producable gas in Northwest Europe. Gas constitutes a continuous energy and income source for the Netherlands and is essential for a sustainable energy supply in the Netherlands.

Mission To optimally exploit the subsurface oil and gas potential and contribute to a sustainable energy supply.

Strategy To facillitate and stimulate operators in optimally exploiting (existing/new) gas fields

To discover and develop existing and new subsurface potential for the Netherlands

To contribute to sustainable energy management in the Netherlands

EBN aims to explore and develop new fields and

Roadmaps based on technology policy

Exploring and developing subsurface potential to stimulate the exploration and production of gas

In order to realise our ambition, we have set up

that is difficult to recover. These sorts of resources,

roadmaps for a number of subjects. They give

however, are extremely complex and demand greater

insight into the steps that need to be taken in order

efforts and more creativity from geophysicists,

to develop the additional oil or gas resources in the

geologists and reservoir engineers. In recent years,

Dutch subsurface. This may concern the realisation

EBN has started up research projects in both of the

of technical, commercial, legal or organisational

focus areas, usually in partnership with third parties.

preconditions.

The coming years will show whether these projects will lead to large amounts of gas or oil.

Our goal is to promote more innovation in exploration and production technologies and working

Contributing to a sustainable energy system

methods that lead to the exploration of new gas and

EBN will continue to work on creating support in

oil reserves. We present the results of our studies

society for natural gas and its production. This is

at national and international events and conferences

necessary, as natural gas will play an essential role

for Exploration & Production (E&P) and during

in the transition to a sustainable energy system.

workshops with operators who are active in the

We want to provide good information about natural

Netherlands.

gas and about what is necessary to deliver natural gas to the end user. In doing so, we aim towards a

The focus areas we have defined are:

joint approach with the industry.

• Exploration • Low-permeability fields • Shallow fields • End-of-life fields • Infrastructure

‘You reach your goal faster if you know the way’ ‘Before I joined EBN, I worked twelve years for one of the 4 big accounting firms. As I had operators in my portfolio, I knew EBN, but at the time it was a totally different company than the professional organisation it is today. A lot has changed, especially over the past four years. EBN is a good employer. You get the change to organise your work in the way

Our work is extremely complex, partly because we

you consider the best, and there are possibilities

have over 200 participations and application IFRS in

for growth within your function or, as in my case,

the E&P sector, but also because it can be influenced

to make the switch to another department. After

by social issues. It is not always simple to incorporate

working as a Business Controller for five years, I

such aspects in reports. This is always challenging.

became the manager of the Accounting & Repor-

But it is also the reason I enjoy my work so much.

ting department in November 2014. It was a great

I like solving complex issues with a multidisciplinary

opportunity, which I grasped with both hands.

team of enthusiastic professionals, and EBN offers me plenty of opportunity to do so’.

The Accounting & Reporting department ensures the timely submission and analysis of reliable financial reports – from reporting on a monthly and quarterly basis to preparing the annual report. My challenge is to bring Accounting & Reporting even closer to the business, and to further strengthen the interaction with Business Control. Our financial expertise allows us to provide essential added value. I often draw a comparison with a navigation system. If you drive to your destination without one, there is a big chance you will arrive late due to an unexpected diversion or taking the wrong exit. The same applies to a strategic or operational destination: you will reach your goal faster if you know the way and can identify any possible obstacles in time. Reports and interim financial insights are essential in managing expectations and in setting a course and adjusting it if necessary.

Laure van der Westerlaken-Malecki Manager Accounting & Reporting

Exploration

Another important study that was shared with

Through studies into new oil and gas resources in

the industry was the inventory and comparison of

the Dutch part of the Continental Shelf, EBN wants

potential oil or gas source rock in the same area.

to stimulate the interest of the E&P industry in

The results of the finalised prospectivity study of

developing activities here. Resources are identified

the Dinantian limestone were also presented to

opportunities (prospects) that can possibly be turned

the industry. Once again, a great contribution to

into reserves after drilling.

this yearâ&#x20AC;&#x2122;s research was made by various research studies conducted by university students.

The exploration study of the D, E, F, A and B blocks (DEFAB) dominated our exploration activities in

Low-permeability fields

2014 and will do so in the coming years. The DEFAB

Many gas fields in the Netherlands have low

blocks are located in the northern part of the Con-

productivity due to the naturally low permeability

tinental Shelf. Within the DEFAB study, we started

of the reservoir rock. This has a big influence on

a study of Zechstein limestone in 2013, which was

the economic development potential of oil and gas

continued in 2014. The second study concerns

resources and on the yield. The Netherlands has

sandstone reservoirs in the Trias layer. Triassic

around 50 fields that have already been drilled with

sandstone is widespread in the Dutch subsurface

an estimated joint gas volume of over 75 billion

and forms the main stone for gas reservoirs. Oil has

Nm3, which have not yet been taken into production

also been found in the Trias layer in various North

because of productivity problems. Future explo-

Sea gas fields to the south of the DEFAB area. In the

rations, as well, will probably also be affected by

industry, we refer to this as oil play.

this issue in certain areas, meaning that the tight gas volume may rise to way above 200 billion Nm3.

EBN has presented the prospects from both studies

Innovative technologies should, however, make it

to the industry at congresses and in workshops. The

possible to extract this gas. Last year, for example,

industry is very interested, for example, in (potential)

great progress was made with â&#x20AC;&#x2DC;minimal facilitiesâ&#x20AC;&#x2122;,

oil resources in the limestone in the North Sea.

which are compact, relatively inexpensive offshore platforms that can help develop marginal economic gas resources. In addition, EBN is investigating new drilling techniques, such as radial drilling, which could offer a potentially greener alternative to fracking, due to a relatively low water use.

Shallow fields

There are various techniques for extending the life of

There are three shallow gas reservoirs in production

the more mature gas wells and maximising their out-

in the Dutch part of the North Sea. Shallow fields are

put. Before a decision can be taken, it is necessary to

characterised by unconsolidated sediments and low

make an estimate of the costs of such a revitalisation

pressures. EBN investigates and realises oppor-

project. It is therefore important to reduce the tech-

tunities for developing other shallow fields. These

nical uncertainties associated with producing the

initiatives give the Netherlands a leading position

reserves still available. EBN has identified a potential

in the North Sea area. EBN has identified dozens

of 30 billion Nm3 gas in these fields that can still be

of additional shallow reservoirs, a number of which

extracted over the coming fifteen years.

have development potential. However, the potential volumes are relatively small and the resources are

In 2014, EBN approved fourteen projects that can

often located far from the existing infrastructure.

help realise this long-term ambition. We expect more

In 2014, therefore, we focused on the economic

developments in this area in the near future.

evaluation of these reservoirs. An initial study showed that a number of potential resources could

Infrastructure

be economically developed on the basis of stand-

The end of production has been determined for a

alone projects and conservative cost profiles.

number of scenarios for the offshore gas production installations. EBN determined the cut off date not

This portfolio could grow further through the cluster

only on the basis of a model, but also taking into

development of several fields. Furthermore, EBN

account the (economic) value of infrastructure and

had a study conducted in 2014 that showed that

the associated remaining reserves. The results were

the platform costs could be reduced by about 50%,

also compared to the data from operators.

so that more resources from this portfolio could be developed. These results form an important step in

This information provides clarity about the

bringing shallow gas reservoirs in the Dutch offshore

disappearance of the infrastructure. A number

area to maturity.

of resources are still present around some of the

End-of-life fields

basis of current reserves. They could add substan-

A gas field is at the end of its life if production levels

tial volumes, allowing the installations to continue

have fallen significantly or if production is nearing

production for longer. Furthermore, reduction of the

the end of its economic profitability. 90% of the

operational costs would create time to explore and

currently operational gas fields are in this phase.

develop any new exploration volumes.

platforms threatened with disappearance on the

Other focus areas

General and social developments

The knowledge gained by EBN in the various studies

State of affairs concerning the Groningen field

can also be used in other focus areas, which do not

Gas production from the Groningen field causes

belong directly to the domain of EBN. Geothermics

earthquakes. Over the years, these earthquakes

is an example of this.

have increased in frequency and magnitude. The earthquake at Loppersum in Augustus 2012 (3.6

EBN’s participation in any geothermal project

on the Richter scale) prompted the government’s

requires permission from the Minister of Economic

decision to conduct research into the earthquakes in

Affairs, on the grounds of the Mining Act. The

Groningen. The government thus hoped to discover

ministry is investigating the desirability of a role

whether the gas production can cause earthquakes

for EBN in this topic. Things will become clear over

of a greater magnitude and what effects the gas

the course of 2015. Our activities in 2014 were

production can have on buildings, houses, pipelines,

restricted to supporting research projects that are

dikes and power lines.

also directly related to oil and gas production. The results of this research were announced on Top sectors

17 January 2014. The results formed the basis for

For the third consecutive year, EBN took part in the

the government’s decision on gas production in the

Top Consortium for Knowledge and Innovation (TKI),

Groningen field. The main points were as follows:

as part of the innovation contract for gas (TKI gas).

• decreasing gas production by 80% in the risk

EBN participates in the sub-programme Upstream Gas, in which various projects are formulated. In 2013-2014, we participated in nine projects, which

• increasing safety and reinforcing houses, buildings and infrastructure;

aim to generate innovative solutions for extracting

• efficient claims settlements by the NAM;

the maximum amounts of gas from the Dutch sub-

• regulations for the depreciation in value

surface. This ambition links up well with the goals of our organisation. The participating organisations are the industry, knowledge institutes and universities.

area around Loppersum;

of houses.

In December 2014, the government drew up a defin-

In February 2015, the Dutch Safety Board published

itive production plan for the time being, which states

the report ‘Earthquake Risks in Groningen’. The

that gas production from the Groningen field must

Dutch Safety Board conducted research into the

be reduced from a maximum of 42.5 billion Nm3 in

decision-making on gas production in Groningen. In

2014 to a maximum of 39.4 billion Nm3 in 2015. This

doing so, they looked specifically at the way in which

government decision corresponded to the additional

the safety of residents was weighed up in relation

recommendation from the State Supervision of

to earthquakes. This research covered the period

Mines, which supervises gas production.

from the discovery of the Groningen field in 1959 to the presentation of the package of measures by the

At the beginning of February 2015, however, the

Minister of Economic Affairs in January 2014.

Minister of Economic Affairs took extra measures to increase liveability and safety in Groningen. In

The Dutch Safety Board’s report states that in prac-

the first half of 2015, until 1 July, gas production

tice, the safety of the population played a secondary

will be restricted further to 16.5 billion Nm .

role up to 2013. In the eyes of the Dutch Safety

This keeps open the possibility of reducing gas

Board, the Maatschap Groningen and the parties

production to the level of supply certainty from

involved in gas production jointly form a closed

July, should new research give reason to do so (30

stronghold.

billion Nm is needed to continue to supply all users 3

of gas). Another measure is the appointment of a

The Dutch Safety Board’s report makes several

National Coordinator Groningen, who is to ensure

recommendations. Parties involved in activities in

the smooth running of improvements to safety and

the deep subsurface should base their activities on

liveability in the area.

the complex and uncertain risks. For gas production in Groningen, the Board also recommends that all parties should actively gather and develop knowledge, by setting up a long-term research programme, among other things. The communication with residents must also be improved. In making these improvements, scope must be created for dealing with uncertainty and for transparency about considerations and decision-making. .

State of affairs concerning shale gas

This research was conducted by the agency

Shale gas has possibilities as an energy source in the

ABDTOPConsult. The report was finalised at the

Netherlands. Shale gas is gas that is trapped in clay

end of August 2014 and was sent by the Minister of

stone layers, or shale layers. Shale gas is identical to

Economic Affairs with an accompanying letter to

natural gas extracted from other fields and consists

the Lower House at the beginning of October.

mainly of methane. There are concerns about the technology needed to release the gas from these

As far as EBN is concerned, one of the agency’s

layers. In 2013, the government provided insight

conclusions was that it fulfilled a useful role. The

into the possible risks of production for people,

participation with shared risk by the State, for

nature and the environment. In 2014, a start was

example, is an incentive for mining companies to

made on the MER plan, which charts the possible

exploit small fields. ABDTOPConsult is, however, of

environmental consequences (risks and opportu-

the opinion that EBN should take more account in

nities) of any shale gas production for all the areas

its activities of the fact that it is a policy participation

where potential shale gas is present. The results of

and an instrument for carrying out government

the MER plan form an important input for the Struc-

policy. The agency advises the Ministry to make use

tural Vision for Shale Gas expected to be published

of the existing possibilities for steering EBN.

by the Minister of Economic Affairs and the Minister of Infrastructure and Environment in the second half

The Ministry plans to implement the recommen

of 2015.

dations, and has set up a project group for this purpose, which will give its recommendation in the

Research on governance

second quarter of 2015. EBN is taking part in

In 2014, the Minister of Economic Affairs had

the project group.

research conducted regarding the future of the

governance of the Gasgebouw and EBN (the Gasgebouw is the public-private collaboration between the State, EBN, Exxon Mobil, Shell and GasTerra for the production and sale of natural gas from the Groningen field).

Results for 2014

There were new licences in 2014 as well: two

Joint ventures

for exploration and four for production, including

The actual exploitation of oil or gas production is

the two aforementioned joint ventures that were

done by one of the licence holders, referred to as the

changed.

operators. Oil and gas companies apply for a licence for the exploration or production of oil or gas. When

In total, EBN has an interest in 193 participations

the licence is granted, EBN usually takes a 40%

for exploration and production licences. We also

interest in these activities. An operator often has

participate in five pipelines (including gas treatment

several licences. The total number of joint ventures

facilities), four gas storages and the gas wholesale

(in exploration, production and other joint ventures)

company GasTerra BV. No changes have been made

rose in 2014 from 201 to 203.

in these participations compared to 2013.

Two licences were changed from exploration to

Oil and gas portfolio

production of gas and oil; one onshore and one in

The Netherlands has considerable potential in

the offshore. Two joint ventures, for production and

small oil and gas fields, both offshore and onshore.

exploration respectively, were relinquished. These

In 2014, seven fields were taken into production:

exploration licences were returned by the licence

six gas fields and one oil field. This is fewer than we

holders to the Minister of Economic Affairs.

had expected. One of the new gas fields turned out to be part of an existing field, and the production

A new joint venture was created, due to the Botlek

start of a second gas field was delayed and is now

production licence being split up.

expected to take place in 2015.

2014 | total 193

107

Offshore production

2013 | total 191

13 Offshore exploration

106 Onshore production

Onshore exploration

Joint ventures in exploration and production

Activities 2014

• Field development • Gas storage • Drilled well • Seismic • Enhanced gas/oil recovery • Abandoned well

Exploration

Developments

In 2014, new seismic surveys covered an area of

Investments in production and storage licences

2,210 km . 23 exploration and appraisal drillings

increased by 17% to EUR 765 million compared to

yielded 14 successes.

EUR 652 million in 2013. Without these invest-

ments, gas production from small fields will diminish Drillings

considerably. It is important to continue to develop

In 2014, a total of 52 drillings took place

fields and to add new reserves in order to maintain

(24 onshore and 28 offshore).

production as far as possible.

Exploration and evaluation drillings

Production drillings

The biggest investments in 2014 were made in the Bergermeer and Norg gas storages (EUR 202

Injection wells

milion).

Production Gas storage wells

Activiteiten 2014

from the Groningen field amounted to 42.3 billion

Results of the exploration and production drillings:

Gasopslag

Nm3 (2013: 54 billion Nm3). Production of gas from small fields in which EBN participates amounted to

Veldontwikkeling Number of drillings that showed gas

Following the adjustment to the production ceiling at the beginning of 2014, production of natural gas

24 billion Nm3 (2013: 26 billion Nm3). This brings the total gas production in 2014 to over 66 billion Nm3.

Number of drillings that showed oil

Geboorde put

No hydrocarbons found

Seismiek

Not suitable for drilling

The relative share from the small fields increased compared to 2013, because less was produced from the Groningen field.

EBNâ&#x20AC;&#x2122; share in gas production is 27.5 billion Nm3, and

Verbeterde gas/olie productie

in oil production 0.46 million m3. The gas produced during the winter months from the underground gas

Verlaten put

storages Norg, Grijpskerk and Alkmaar is injected back in the summer months.

Reserves

Total sales amounted to 27 billion Nm3, 17% lower

In 2014, the total Dutch gas reserves decreased by

than last year. Besides a lower demand for gas, this

49 billion Nm . The total gas reserves in the Dutch

was caused mainly by the production restrictions on

subsurface amount to 884 billion Nm3. EBNâ&#x20AC;&#x2122;s share

the Groningen field and declining production from

in these gas reserves amounts to 358 billion Nm .

small fields (-8%).

Sales

On 17 September 2014, the remaining gas storage

Gas and gas storage capacity

capacity from the Bergermeer gas storage was

The mild winter of 2013/2014 meant that gas prices

auctioned. The volume auctioned amounted to 13

fell by 18% in 2014 to an average of 21.8 EUR/

TWh (1.3 bcm), meaning that the storage for the

MWh, whereas there had been a long cold period

2015/2016 storage season was completely sold out.

the year before. The prices on the Title Transfer Facility (TTF), the most liquid central trading place

A provisional sales price of approx. 2.4 EUR/MWh

for gas in North-West Europe, fluctuated through-

(including cycle costs) was calculated for this volume,

out the year between 16.7 and 28.0 EUR/MWh (TTF

based on a multiplier of the average difference set

Month Ahead, MA). After peaking in January, prices

each day between the 2015 summer price and the

fell to below 17 EUR/MWh.

2016 winter price in the period 15 October up to and including 15 December 2014. The definitive

In line with the market, the weighted average

sales price will become clear after the period 15

realised sales price for the EBN gas portfolio came

January up to and including 15 March 2015.

to 22.7 EUR/MWh, 13% lower than in 2013.

2014 | total 765

424 Construction work

Investments

196

2013 | total 652

145 Production wells

381 Exploration activities

159

112

Oil, condensate and LPG

These products are usually sold at a reduced price.

Up to September 2014, oil prices were still at the

Total sales of oil, condensate and LPG in 2014 came

level of the previous years (between EUR 75 and

to 4.2 million barrels; 57% more than in 2013. This

EUR 85 per barrel). In the last quarter, oil prices

rise can be explained by the Amstel field (crude oil)

plummeted as a result of excess supply on the world

and the Q16 Maas field (condensate and LPG) being

market and falling demand from Asia. This resulted

taken into production, and by the higher production

in the average price of a barrel of Dated Brent that

from the Schoonebeek oil field.

cost EUR 71 in 2014 being 9% lower per barrel than in 2013. The market for oil producers came under equal pressure, one reason for which was a greater supply of naphtha from the United States and West Africa. The weighted average realised sales price for our oil, condensate and LPG portfolio came to over EUR 70.5 per barrel (10% lower than in 2013). The usual difference to the price of a barrel of Dated Brent can be explained by a high share of lowervalue oil and a higher share of condensate in the total sales.

2014 | total 4,874

525

2,735

1,614

Corporate income tax

2013 | total 7,187

760

4,100 Levies

2,327

2012 | total 6,932

771

3,801

2,360

2011 | total 5,788

693

2,964

2,131

Net profit

Payments to the state

‘Sometimes, we take a slightly different perspective in looking at a well or field’ ‘In brief, the essence of my work is to use various data to provide insight into the expected behaviour of a field, and to conclude from that whether production can be optimised. At EBN we work with data provided by all the

You can feel this enthusiasm throughout the whole

operators that are active in the Netherlands. This

organisation. EBN is a demanding employer, but

can range from the amounts of gas, water and

in a positive sense. That goes with the position we

condensate produced to the temperature and pres-

occupy: we operate in the heart of the Dutch E&P

sure in the well. We analyse this data for over 250

industry, so you have to be demanding. You are

production fields. The huge scale makes our work

encouraged to develop – both professionally and

very special and challenging, and it gives us a unique

personally. At the same time, there is a good working

insight into the effectiveness of the different pos-

atmosphere. It is a friendly company with a good mix

sibilities and techniques available for optimising oil

of young and more experienced colleagues’.

and gas production. So sometimes we take a slightly different perspective to the operator in looking at a well or field. As an organisation, we are anyway open to new ideas, and we dare to think out-of-the-box. There is scope for study or research, if this helps us to map out alternative possibilities. One of the main challenges in my work is to share knowledge proactively with operators, and encourage them to consider new lines of thought in order to produce extra gas and oil. Besides the regular contact with the operators, we get together twice a year with each operator in Technical Committee Meetings, in which the activities, expectations and opportunities of the fields and wells are presented and discussed. Along with the operators, we aim for the best results. We want to keep the fields producing well for as long as possible.

Mariene Gutierrez-Neri Reservoir Engineer

Financial

Dialogue with stakeholders

The annual sales for 2014 fell by 25% to EUR 6.6

In 2014, we discussed whether and how we can fulfil

billion, compared to EUR 8.8 billion in 2013.

these goals with a key group of stakeholders (share-

The decrease in sales was due both to lower realised

holder, representatives of operators, and policy-mak-

sales of natural gas (17%) and to lower realised

ers). In this meeting, we shared the internal analysis

prices (13%). The realised sales prices for oil and

of the most relevant long-term topics for EBN and

condensate were also lower than in 2013.

its partners in the sector (see also the materiality matrix on page 72). We also discussed our intention

The net profit amounted to EUR 1.6 billion.

of developing a sustainability plan with the opera-

Operational costs amounted to EUR 1.1 billion

tors, in which qualitative and quantitative goals are

(2013: EUR 1,0 billion). Total payments to the

formulated for the most material topics.

Dutch State, including levies, amounted to EUR 4.9 billion (2013: EUR 7.2 billion).

Stakeholdersâ&#x20AC;&#x2122; reaction According to the stakeholders, providing transpar-

Non-financial performance

ency fits the role of EBN. For the material aspects

Although EBN does not exploit the oil and gas pro-

of the operatorsâ&#x20AC;&#x2122; operations, it initially concerns

duction activities in which it participates, as a partner

a factual, recording report of the accumulated

in the participations we think it is important that the

achievements of the operators. EBN has been pub-

activities in the participations are executed in a safe,

lishing this report since 2003 on its website, under

sustainable and responsible way. Furthermore, we

the name Operational Performance Indicators.

want to give transparent account of this in accord-

Stakeholders also think it is important and correct to

ance with the guidelines of the Global Reporting

use existing reporting lines, such as the e-MJV, for

Initiative. More information about this can be found

these operator-related aspects. Formulating policy

in the appendix.

and goals for operator-related aspects can only take place in interactive dialogue with the operators and EBNâ&#x20AC;&#x2122;s shareholder. Although the stakeholders endorse the material topics selected by EBN, they think that further dialogue about them is necessary.

Stakeholders agree with EBNâ&#x20AC;&#x2122;s intention to develop

Reporting on relevant non-financial aspects

a sustainability plan along with the operators. This

In our role of responsibility for the chain, we

plan should link up closely to initiatives that are

stimulate our partners to promote health and safety,

already in progress within the industry, which will

environment and nature, and care for the surround-

require careful alignment with the operators.

ings. These topics have always come up for discussion in our regular meetings with the operators. In

Goals for the coming years

previous years, EBN set KPIs that are relevant to

The Board discussed the results of the stakeholder

our chain, and reported on them in this financial year

dialogue and their influence on the formulated goals.

in accordance with the Global Reporting Initiative

The conclusion is that EBN will continue to focus on

guidelines. The report was drawn up in accordance

greater transparency and will make preparations for

with the latest generation of G4 guidelines. It is our

a sustainability plan with the operators. In 2015,

intention to formulate goals for each relevant theme,

we want to jointly investigate how we can shape

along with our chain partners.

this plan. The parties that have been granted a licence in the In 2015, we want to focus on creating more support

oil and gas industry in the Netherlands hand over the

for our intended role in the oil and gas industry.

data about these KPIs to the Netherlands Enterprise

We want to provide more clarity to the partners

Agency. EBN then reports proportionately to its

about the reasons for and importance of reporting

share in the participations. In this annual report, we

in accordance with the GRI-G4 guideline.

cannot give the full details, as they are only available in June 2015. We therefore provide explanations for just some of the topics here. The main figures of the KPIs for the period 2003 to 2013 are included in the table on page 38. The completely separate SCR report will be available in July on our website (Operational Performance Indicators 2004-2014).

Environment EBN shares its knowledge from the many joint

Operational performance indicators

2013

2012

20.3 PJ

17.9 PJ

6.3 vs 15.1 %

0.7 vs 11.31%

1.90%

1.80%

787 Kton

769 Kton

5.8 Kton

6.6 Kton

3.2 mln Nm3

number of incidental discharges

volume of incidental discharges

2.0 ton

5.7 ton

industrial accidents leading to absenteeism

industrial accidents not leading to absenteeism

ventures in which it is involved with the operators, through workshops, for example. When the pro-

energy consumption

duction of gas and oil fields declines, the volume of

energy efficiency improvement (result vs goal)

production water increases. After being cleaned, this production water is discharged at sea, including the rainwater, scrubbing water and deck water from the

energy use as percentage of the energetic hydrocarbon production CO2 emissions

platforms. Up to 2007, the discharge of this production water was increasing. Since 2008, a system has increasingly been used to reinject production water

methane emissions production water discharges

via an old production well. Safety Safe working conditions are a priority in the oil and gas industry. The employees of the operators sometimes carry out their work in difficult conditions, especially at sea. They also work with heavy materials and flammable substances. The man足 agement therefore attaches great importance to safety. In 2014, our operators did not encounter any serious accidents.

fatal accidents

Biodiversity

The people of EBN

Previously, platforms at the end of their life cycle

With a staff of 77 (72 FTE), EBN may be a small-

were dismantled. However, this is not always

scale organisation, but it has a special mission.

straightforward, as the legs left standing on the

Our technological profile and the challenging market

seabed provide a breeding ground for luxuriant flora

in which we operate allow us to retain and inter-

and fauna. The Living North Sea Initiative (LiNSI)

est our employees with challenging projects and

project is investigating how the platforms can be

responsibilities, and to offer scope for personal and

cleared in accordance with the OSPAR requirements,

professional development.

while still retaining the benefits of the increased biodiversity. Wageningen University is also carrying

In 2014, EBN was voted â&#x20AC;&#x2DC;Great place to workâ&#x20AC;&#x2122;.

out doctoral research to map out the biodiversity

A Great place to work is an organisation in which

around platforms and wrecks.

employees trust one another, take pride in what they do and enjoy working with their colleagues.

More information For an outline of the main topics for EBN and its

Training and development

chain partners and the associated GRI indicators,

As a knowledge-intensive company, one of EBNâ&#x20AC;&#x2122;s

we refer you to the GRI table on our website.

activities is research. We therefore attach great importance to the development of knowledge and

The 2013 annual report attained a score of 152

skills in our employees. They are encouraged and

points on the Transparency Benchmark, which was

facilitated in taking relevant training courses that

far higher than the 120 points attained by the 2012

contribute to the development of the organisation

report. The Transparency Benchmark is an annual

and to the general level of knowledge. These courses

survey into the content and quality of social report-

focus on the development of both knowledge and

ing by Dutch businesses.

competencies. We provide professionals who are passionate about their job with the opportunity to develop optimally and to contribute to the further development of the Dutch energy chain. The average level of education matches the work we do. Over 71% of our staff are academically qualified and 9% have completed higher vocational training. The average number of training hours in 2014 amounted to 591, and our employees took an average of 61.4 hours of training.

HR goals

Terms of employment

The internal analysis of the most material topics for

EBN attaches great importance to good terms of

our organisation also led to setting existing goals and

employment for its employees, to whom a collective

some new ones in the area of employership.

labour agreement does not apply. This allows scope for customised terms of employment, which fits in

Workforce

with the dynamics of a knowledge organisation of

At year-end 2014, EBN had 77 in-house employees,

specialists for which there is great demand in the

expressed in FTE 72 (2013: FTE: 68.7), and 7 hired

oil and gas sector. In this way, EBN stimulates its

personnel (FTE: 3.0). One employee from GasTerra

employees to continue to develop their knowledge,

also worked with EBN on secondment. EBN aims

competencies and skills. The application of the

for a personnel turnover of less than 10%, in line

knowledge and skills developed and the company

with the goals of previous years. Our goal was amply

goals to be achieved are expressed in the perfor-

achieved in 2014, with a turnover of 6.5%. Our

mance agreements for which employees (from scale

policy is to fill vacant management positions with

9 upwards) can receive performance-related pay.

internal candidates as far as possible. In 2014, this was the case for two positions.

Flexible working hours and 42 days of leave ensure a good balance between work and private life. EBN is

Our aim is to recruit young people, and give them

a member of the pension fund ABP.

a good start in the oil and gas industry with a three-year traineeship. EBN also provides graduate

Absenteeism

projects and work placements. Once again, we

The target for total absenteeism is maintained at

provided the space for internship (17 in 2014) to

a value lower than 3%. This target was met: 2.3%

write their thesis, and for one PhD student to work

with an average reporting frequency of 1.2. We are

in the financial department. The average age of our

introducing a new target for short and medium-term

employees rose slightly to 42.6.

absenteeism: we aim for a value lower than 2.5%. We formulated this new target because we scored well in this area in previous years.

2014

2013

short-term absenteeism (< 8 days)

1.0

medium-term absenteeism (8 - 42 days)

0.3

long-term absenteeism (43 > days)

1.0

1.6

total

2.3

2.9

Absenteeism through illness

The score in 2014 was 1.3%, for example. In order to

the organisation. As soon as a vacancy occurs

maintain this, EBN is making long-term investment

(which is not filled through reappointment),

in the welfare of its employees, by providing more

action will be undertaken in order to arrive at a

sports facilities and chair massage, intervening

more balanced ratio.

promptly in the case of absenteeism and encouraging a work/life balance.

The Participation Act decrees that we must employ circa 5% disabled people in 2015. In view of the high

In the case of absenteeism through illness, it should

average level of education and the many specialist

be noted that the division between short, medium

roles in our company, we do not see this as a realisti-

and long-term absenteeism is made on the basis

cally feasible goal as yet. Where possible, we will try

of calendar days. The percentage of absenteeism

to find positions for disabled employees. EBN wants

through illness is calculated on the basis of

to employ at least one disabled person in a sup足

working days.

porting position.

Career guidance

Employee participation

We have set a new target for career guidance:

With regard to the announcement of organisational

100% of the employees must have an annual job

changes, EBN upholds a term and a working method

performance and development interview. This

that far exceeds the legal guideline. In the case of an

target was already met in 2014. This does not apply

organisational change, a procedure takes place in

to employees on long-term leave of absence for ill

which the Works Council is involved and informed at

health or to employees who entered employment in

an early stage. Decision-making regarding execution

the fourth quarter.

then takes place in close cooperation with the Works Council. The EBN also informs the employees in

Diversity

good time.

Diversity within an organisation contributes to a healthy corporate culture, resilience and creativity.

On 1 January 2014, a new Works Council of five

EBN applies the government norm, in which there is

members was installed. During the year, the chair of

an equal balance between men and women. In view

the Works Council accepted another job outside the

of the technical environment in which EBN works,

company, thus creating a vacancy. This vacancy has

however, this is not realistic. The current ratio is

now been filled. Four meetings with the CEO took

66.2% men to 33.8% women. In 2014, the manage-

place in 2014.

ment consisted of 21.4% women, and there were no women on the executive board or the Supervisory Board. In the coming years, EBN will aim towards a ratio of 65% men and 35% women at all levels of

Outlook and action plans for 2015

Technical plans In 2015, we will be continuing our technical plans

Exploration

that focus on new exploration and production

In 2015, 24 exploration and evaluation wells will be

technologies: Exploration, Low-permeability fields,

commenced or drilled, 17 of which will be completed

Shallow fields, End-of-life fields and Infrastructure.

in the same year.

Three projects we started at the end of 2014 will be

Production

• ‘The Exploration Monitor’, which is analysing a

continued in 2015: 20 production wells will be commenced or drilled, 16

second offshore area for exploration potential,

of which will be completed in 2015.

following on from the DEFAB survey. • ‘Maximising production around hubs’, which is

Norg and Bergermeer gas storages

an area-focused approach based on faster

The construction work on the expansion of the Norg

development around a production location.

gas storage will be completed in May 2015. The

• ‘Analysis of Production Data’, which aims to

third injection compressor will be installed in the first

provide more insight into the production

quarter and will become operational in July. The two

characteristics of Dutch gas fields.

new wells will be connected in January. In April, the whole Bergermeer gas storage will be

Investment climate

ready for full commercial operation, on schedule

In 2015, we will finalise a study into the possibilities

and within the budget approved by the Ministry of

of raising the investment level of the E&P industry,

Economic Affairs.

through more active licence management, with greater involvement from EBN. Sustainability goals In 2015, we want to further develop our reporting on non-financial performance. The materiality analysis we have conducted will help us do so. In line with this, we will formulate quantitative goals for each material aspect, where possible and relevant. We will continue our dialogue with our chain partners, in order to investigate whether a joint sustainability plan is realistic.

‘The breadth and the depth of the energy market fascinate me’ ‘I enjoy working in an environment with intelligent people, lots of knowledge and plenty of challenges. Every day, my job with EBN gives me this opportunity, while also providing scope for collegiality and humour. As Commercial Advisor, one of my responsibilities is to efficiently shape and advise on gas sales in our partnerships with the operators and the parties within the Gasgebouw. My work is to give shape to our mission, by

I’m also regularly put to work on strategic projects.

maximising the value of Dutch mineral resources

For instance, I was seconded as project manager to

and realising an optimal economic result for Dutch

the Ministry of Economic Affairs for the Groningen

society. Besides knowledge of the energy market,

earthquake dossier, and I’m involved in a project

this also demands strategic insight, sensitivity and

about the attractiveness of the Dutch mining climate.

constructive negotiating skills. This suits me down

They are extremely interesting issues. The breadth

to the ground. I look to the future and like to build

and the depth of the energy market fascinate me.

things up. My working day has been a good one if

I want to understand every aspect of how it works.

I see that preparations are starting to yield results.

So I’m happy that I can combine my job at EBN with

For example when different visions come together

writing a thesis on the role of investment and the

in a partnership and you sense that you have given

energy transition. From Monday to Thursday, I work

enough momentum and direction to the dynamics

the full hundred percent for EBN. On Fridays and at

of the process to arrive at a joint solution. Then the

the weekend, I focus mainly on my thesis for

critical moment has been reached where the rest

TU Delft. It’s a perfect combination’.

follows smoothly. Collaboration in the team and within EBN is crucial to our work. You have to be able to trust one another and keep each other alert. In our business, good work leads directly to millions and bad work to the opposite. However, there is really good collaboration within EBN – on all levels. The atmosphere is open, we discuss everything and the work rhythm is high due to the short lines.

Sander de Jong Commercial Advisor

Report by the Supervisory Board General

Mr Kramer had been associated with the company

The Supervisory Board has the job of supervising the

since 1 January 2006 as a member of the Super

policy of the executive board and the general state

visory Board, as a member of the Audit Committee

of affairs within EBN. The Supervisory Board gives

and as chairman of the Remuneration Committee/

advice to the executive board. In this report, the

Selection and Appointment Committee. Mr Kramer

Supervisory Board explains its methods of super

made a great contribution to the functioning of the

vision and advice.

Supervisory Board. The Supervisory Board and the executive board are very grateful to Mr Kramer for

On the basis of the state participation memorandum,

his commitment to the company and for the way in

EBN applies the Corporate Governance Code where

which he carried out his supervisory directorship.

relevant. EBN endorses the code’s principle that

Mr Kramer’s experience in the oil and gas industry

transparency towards stakeholders is crucial, and

allowed him to make an important contribution to

applied the principles of the code where possible

EBN’s development.

and relevant. EBN thus follows the government policy for state participations. The section on

During the Annual General Meeting of Sharehold-

Corporate Governance and Risk Management

ers in 2014, Mr Van Oorschot was reappointed as

in this report includes a paragraph indicating the

supervisory director and as chairman of the Super-

principles of the code followed by EBN.

visory Board. Mr Van Oorschot was reappointed for a third period of four years. In accordance with

Composition of the Supervisory Board

the Supervisory Board regulations, the discussions

A number of changes were made to the composition

regarding the nominations for reappointment took

of the Supervisory Board in 2014.

place in the absence of those involved and nomination for reappointment was not automatic.

Mr Kramer resigned during the Annual General

Nomination for reappointment was carefully

Meeting of Shareholders on 16 April 2014.

considered.

Retirement schedule

DATE OF FIRST APPOINTMENT

YEAR OF 1ST REAPPOINTMENT

YEAR OF 2ND REAPPOINTMENT

END OF TERM

Mr H.M.C.M. van Oorschot

1 January 2006

2010

2014

2018

Mr A.H.P. Gratama van Andel

1 January 2006

2009

2013

2017

18 April 2013

2017

3 February 2015

2019

Mr R.G.M. Zwitserloot Mr J.W. Weck

At the beginning of 2015, the Supervisory Board

Board, account must be taken of the nature of EBN’s

made a nomination for the vacancy created by the

activities, its mission, objectives and diversity, the

resignation of Mr Kramer. The Annual General

Supervisory Board’s terms of reference and the

Meeting of Shareholders appointed Mr Weck as

expertise of the other Supervisory Board members.

supervisory director as of 3 February 2015 by

The chairman of the Supervisory Board, Mr Van

written resolution.

Oorschot, is the primary contact person for EBN's executive board. The entire Supervisory Board has a

Mr Zwitserloot resigned on 16 April 2015. The

joint responsibility. All members of the Supervisory

Supervisory Board and the chairman of the executive

Board are also members of the Audit Committee

board thank Mr Zwitserloot for its contribution

and the Remuneration Committee/Selection and

during and outside the meetings of the Board. His

Appointment Committee. The table below shows the

knowledge of and experience in the oil and gas

memberships and chairmanships of the Supervisory

industry have been highly appreciated.

Board and the committees

The Annual General Meeting of Shareholders (re)

The members of the Supervisory Board do not

appoints the members of the Supervisory Board

maintain any other business relationships with the

on the nomination of the Supervisory Board. For

company. The Supervisory Board has not noted any

the appointment of a new supervisory director, the

conflict of interest between the company and the

Supervisory Board has a profile sketch, which is also

members of the Supervisory Board. The Supervisory

published on the EBN website. The profile sketch is

Board meets the independence criteria as referred

approved by the Annual General Meeting of Share-

to in the Corporate Governance Code.

holders on the basis of the articles of association. The profile sketch indicates the characteristics

The personal details, the current ancillary functions

that the individual members and the Supervisory

of the members of the Supervisory Board and the

Board as a whole should possess. The Supervisory

retirement schedule are published on the company’s

Board should be composed in such a way that the

website, under Corporate Governance – Supervisory

members can operate critically and independently

Board (www.ebn.nl/overEBN/paginas/raad-van-com-

in relation to each other, the executive board and

missarissen.aspx). The current retirement schedule is

each partial interest. In composing the Supervisory

given on page 46 of the annual report.

SUPERVISORY BOARD

AUDIT COMMITTEE

REMUNERATION COMMITTEE/SELECTION AND APPOINTMENT COMMITTEE

Mr H.M.C.M. van Oorschot

Chairman

Member

Mr A.H.P. Gratama van Andel

Member

Chairman

Member

Mr J.W. Weck*

Member

*Appointed 3 February 2015

Meetings of the Supervisory Board

Approvals by the Supervisory Board

The Supervisory Board met five times in 2014.

The Supervisory Board approved all the relevant

In addition to the Supervisory Board, members

decisions of the executive board. The following

of EBN’s team of Directors also attended. The

investments were approved: the budget increase

external accountant was also present at the first

of Total for the field development of K4a-Z, and of

meeting. That was the meeting at which the financial

GDF SUEZ for the field development of L5a-D

statements and the external accountant’s annual

and Q13-Amstel.

report regarding the administrative organisation and internal auditing were discussed.

The main reason for the budget increase for the three field developments was a rise in drilling costs.

In 2014, the Supervisory Board attended no meetings with EBN’s executive board and the

The Supervisory Board approved a deposit and

Works Council.

loan facility agreement between GasTerra, NAM and EBN.

The chairman of the Supervisory Board and the chairman of the team of Directors held a strategic

The regulations of the Supervisory Board have

meeting with the Director-general of Energy, Tele-

been updated (on minor points) and drawn up.

com and competition, and other Ministry members.

The regulations can be found on the EBN website.

The strategic discussions focused on exchanging

In the last meeting of 2014, the Supervisory Board

and aligning information about strategic issues and

approved the working schedule and budget for 2015

developments in the field of energy policy in general.

for EBN and EBN Capital B.V., and the associated

The (policy) goals and priorities of the Ministry

financing plan.

and EBN for the coming year were also discussed at this meeting. Besides the strategic meeting, the

In 2014, EBN moved to different premises.

chairman of the Supervisory Board and the chairman

The Supervisory Board approved the move in 2013.

of the team of Directors also held discussions at the

The costs of the move remained within budget.

Ministry, about the research of ABDTOPconsult, for example. The Supervisory Board attaches great value to a good relationship with the Ministry, and the informal visits to the Ministry are important to maintaining a good relationship.

Research by ABDTOPConsult

As far as EBN is concerned, one of the agency’s

In 2014, the Minister of Economic Affairs had

conclusions was that it fulfils a useful role. The par-

research conducted into the future of the gover

ticipation with shared risk by the State, for example,

nance of the Gasgebouw and EBN. (Gasgebouw

is an incentive for mining companies to exploit small

is the public-private cooperation in the Groningen

fields. ABDTOPConsult is, however, of the opinion

Partnership and GasTerra.) This research was

that EBN should take more account in its activities

conducted by ABDTOPConsult. The chairman of

of the fact that it is a policy participation and an

the Supervisory Board and the chairman of the

instrument for carrying out government policy.

team of Directors and a number of EBN employees

The agency advises the Ministry to make use of the

were interviewed as part of this research. ABDTOP

existing possibilities for steering EBN.

Consult finalised its report at the end of August 2014. The Minister of Economic Affairs sent the

The Supervisory Board noted the conclusions and

report to the Lower House with an accompanying

recommendations of the ABDTOPConsult report

letter at the beginning of October.

with interest, and has also discussed them with the Ministry, via the chairman of the Supervisory Board.

In the report, ABDTOPConsult endorses the impor-

The Ministry has started a project to implement the

tance of the Gasgebouw and concludes that it is still

recommendations. EBN is participating in the project

functioning well in the main, but that it would be

group set up for this purpose. EBN informs the

desirable to make the public interests safeguarded

Supervisory Board about the progress of this project

by the Gasgebouw more explicit and to re-evaluate

group in the Supervisory Board meetings.

them. ABDTOPConsult also recommends better embedding of the internal processes concerning the Gasgebouw within the Ministry. It further advises considering the terms and the conditions under which parties can eventually leave the Gasgebouw, in view of the declining gas reserves in the Groningen field.

Strategy of EBN

terms. The Supervisory Board approved this agree-

At the end of 2013, the executive board and the

ment via a separate request, as this financing was not

Supervisory Board discussed the long-term strategy,

included in the annual financing plan.

including the preconditions attached to the strategy.

The exchange rate risk on these bond loans, arising

EBNâ&#x20AC;&#x2122;s operational and financial goals were also

from the future exchange rate movements of the

discussed in this context. The Supervisory Board and

Swiss Franc, is covered completely through cross

the team of Directors discussed this topic at length

currency interest rate swaps.

and exchanged ideas on future scenarios. In view of the extensive discussions at the end of 2013, this

Relevant developments

subject was not put on the agenda again in 2014.

On the basis of quarterly reports, the executive

The 2013 findings are still applicable. On behalf

board informed the Supervisory Board about the

of the Supervisory Board, the executive board has

relevant developments within EBN. In these meet-

invited the Ministry to exchange ideas about this

ings, the Supervisory Board pays attention to at least

strategy. This has not yet been followed up in 2014.

social developments, the production of gas, oil and

Financing

developments and the development of the turnover

In 2014, EBN entered into a long-term financing

and net profits. In its quarterly reports, EBN also

agreement. Long-term bond loans were floated on

gives an overview of investment levels. And the

the Swiss capital market to an amount of CHF 300

quarterly reports also deal with the developments

million. It concerned a float of CHF 175 for a period

in EBNâ&#x20AC;&#x2122;s joint ventures. A number of issues are

of 8 years with a coupon interest of 0.5%, and a

explained in further detail below

condensate in the relevant quarter, the recent price

float of CHF 125 with a coupon interest of 0.875%. Both coupon interests concerned the lowest coupon interests ever realised on the Swiss market for these

Earthquakes in Groningen

Bergermeer gas storage

In all the meetings in 2014, the Supervisory Board

The Supervisory Board was informed about the

was informed about the developments in Groningen,

progress of the Bergermeer gas storage. TAQA

including recent earthquakes, damage reports and

commenced the commercial activities, and the

damage settlements by NAM, and the preparations

remaining non-committed gas storage capacity from

for the 2015 production plan.

UGS Bergermeer was auctioned on 17 September

Mr C.W.M. Dessens attended the meetings of June

(1.3 billion Nm3), meaning that the storage for the

and December 2014. Mr Dessens is the chairman of

2015/2016 storage season was completely sold out.

2014. The volume auctioned amounted to 13 TWh

the Supervisory Board and chairman of the Board of Delegated Supervisory Directors of GasTerra. In the

The storage will be officially put into operation in

June meeting, the outline memorandum of GasTerra

April 2015.

was discussed, and in the December meeting GasTerra’s business plan for 2015 was discussed.

Expansion of Norg

In both meetings, Mr Dessens gave a detailed

The Supervisory Board was informed about the

explanation and answered questions from the

progress of work on the expansion of the Norg gas

Supervisory Board.

storage. EBN and NAM held regular meetings about this. The gas storage was put into operation on

In the December meeting, the Supervisory Board

schedule, in December 2014.

took note of the letter from the Minister of Economic Affairs dated 16 December 2014. In this

Schoonebeek

letter, the Minister explained the government’s

Production from this oil field was less successful

decision to implement a downward adjustment to

than expected in 2014 as well, although realised

the maximum permitted production from the Gro-

production in 2014 did turn out higher than the

ningen field in 2015, to 39.4 billion Nm per year.

expected production for 2014. The Supervisory

Board took note of a number of technical problems At the beginning of February 2015, the Minister of

and of NAM’s proposed approach for solving

Economic Affairs took extra measures for a further

these problems.

increase in liveability and safety in Groningen. In the first half of 2015, up to 1 July, gas production will be further restricted to 16.5 billion Nm3.

EBN internal affairs

In the first meeting, the Audit Committee reviewed,

Besides the quarterly reports, the Supervisory Board

amongst other issues, the annual report, the financial

was also informed about various developments

statements and the auditor’s report for 2013. In

within the EBN organisation, such as the communi-

connection with the auditor’s report for 2013, the

cation plan, the employee satisfaction survey, and the

external auditor from EY also attended this meeting.

insurance tender with respect to EBN’s participation

The auditor’s report was discussed at length with the

in the onshore and offshore oil and gas activities.

auditor and the team of Directors. After discussing the financial statements and the annual report, the

Evaluation of the executive board and self-evaluation

Audit Committee advised the Supervisory Board to approve the annual report for 2013.

In 2014, the Supervisory Board discussed the functioning of the executive board in the absence of the

In the first meeting, the Audit Committee also

executive board. In 2014, the Supervisory Board did

reviewed the internal audit plan for 2014. In 2014,

not conduct any self-evaluation, due to the changes

audits were carried out in the following areas: gas to

in the executive board. A self-evaluation will take

cash process, asset (NOV) management cycle, and

place in the first half of 2015.

management of external projects by the technical department. The results of the audits carried out

Meetings of the Audit Committee

in 2013 were discussed. The internal audits for

The tasks and methods of the Audit Committee

2013 concerned: insurances, document/informa-

are set out in the Supervisory Board’s regulations

tion management and ICT programme and project

for the Audit Committee. The Audit Committee’s

management.

tasks include supervising, auditing and advising the executive board on the functioning of internal risk

In the second meeting, the Audit Committee focused

management and control systems and supervising

on the following issues: the long-term financing

the company’s disclosure.

agreement (see above), the evaluation of the external accountant including the proposal for extending

The Audit Committee met twice in 2014. In addition

the accountant’s appointment, the post investment

to the members of the Audit Committee, the chair-

review carried out by EBN and the weighted average

man of the executive board and the Director Finance

cost of capital (WACC).

also attended these meetings.

The evaluation of the accountant was positive, mean-

Credit rating EBN

ing that the proposal for extending the appointment

In 2014, EBN informed the Supervisory Board about

was received positively by the Audit Committee,

the credit rating of EBN. Moody’s set EBN’s credit

following which the proposal was confirmed by the

rating at Aaa with stable outlook in March 2014. In

Supervisory Board. The evaluation and the proposal

November, Standard & Poor’s set EBN’s credit rating

were also discussed with the representatives of the

at AA+ with stable outlook.

shareholder, who also gave a positive recommen dation. EBN then extended the accountant’s appoint-

Declaration of the executive board

ment (up to and including financial year 2015).

The Supervisory Board asked the executive board to provide the Supervisory Board with a declaration for

On the basis of the post investment review, the

2014 to support the usual reports to the executive

Audit Committee gained insight into the realised

board. The executive board issued that declaration,

value of a number of selected projects regarding the

which serves to support provision III.1.8 of the

expected value at the time of the investment deci-

Corporate Governance Code. In accordance with

sions. The management measures for cost overruns

this provision, the Supervisory Board discussed

and the evaluation of reserves were also discussed

the following issues with the executive board: the

by the team of Directors and the Supervisory Board,

company’s strategy and primary risks and the results

with satisfactory results. At the request of the

of the executive board's evaluation of the structure

Supervisory Board, EBN carried out this analysis for

and functioning of the internal risk management and

a greater number of projects this year.

control systems. The primary risks were discussed in the first meeting of the Audit Committee on

The profitability of the projects in which EBN

the basis of a strategic risk analysis. This issue is

participates is excellent.

discussed in more detail in the section Corporate Governance and Risk Management.

Finally, the Audit Committee discussed the revised WACC in the second meeting.

Meetings of the Remuneration Committee/Selection and Appointment Committee

Remuneration policy

The tasks and methods of the Remuneration

of the executive board of EBN. Since mid-2011, Mr

Committee/Selection and Appointment Committee

Bokhoven has been the sole statutory director of

are set out in the ‘Supervisory Board’s regulations

EBN. The nomination for appointment was made by

for the Remuneration Committee/Selection and

the Supervisory Board. On the basis of EBN’s

Appointment Committee’. This committee’s tasks

articles of association, the Annual General Meeting

include presenting proposals to the Supervisory

of Shareholders sets the remuneration policy, and

Board for the remuneration policy to be imple-

the Supervisory Board subsequently sets the remu-

mented by the executive board – to be established

neration and further terms of employment. After due

by the Annual General Meeting of Shareholders –,

consideration, and taking account of the discussions

proposing the remuneration of the individual mem-

held, the Supervisory Board set the remuneration.

bers and compiling a remuneration report.

The Supervisory Board determines any annual

In 2007, the Annual General Meeting of Shareholders appointed Mr Bokhoven as the chairman

increase in remuneration. Also on request of the shareholder and as a result of developments in the policy regarding state owned

Remuneration structure

companies, the Supervisory Board is currently in

The remuneration of the executive board is

intensive discussion on the future remuneration

structured as follows:

policy. Aiming to reach an agreement on the remu-

• A fixed part;

neration policy and its implementation in 2015 by

• A variable part, depending on long-term,

the Supervisory Board. It concerns among other the salary, conversion of variable remuneration items

short-term and personal goals; • The employer’s pension contribution.

(as from 2014) and secundary terms of employment, taking into account the current contractual obliga-

No shares, options or other share-based remuner-

tions. The situation in 2014 is described in

ation components were granted to the executive

the following paragraph .

board.

The Remuneration Committee/Selection and Appointment Committee met four times in 2014. The committee discussed the executive board’s functioning and set the short-term variable remuneration for the executive board for 2013 as well as the longterm remuneration for the 2011-2013 period.

Variable remuneration

Financial statements

The variable remuneration of the executive board

The Supervisory Board reviewed the annual report,

consists of two parts: annual variable remuneration

the financial statements and the report by the audi-

depending on achieving the goals set for that year

tors EY. The Supervisory Board can accept these and

and long-term variable remuneration paid every

recommends that the General Meeting of Sharehold-

three years on the basis of achieving goals set for

ers should adopt the financial statements accord-

that period. The goals are agreed by the Supervisory

ingly. The Supervisory Board advises the Annual

Board and the executive board at the beginning of

General Meeting of Shareholders to discharge the

the year or 3-year period concerned, after it has

executive board of responsibility in respect of the

been discussed by the Remuneration Committee/

policy it has implemented and the Supervisory Board

Selection and Appointment Committee.

of responsibility in respect of its supervision.

The variable remuneration of the executive board

Supervisory Board, Utrecht, 23 June 2015

is dependent on achieving goals in the short term (added economic value, exploration and achieved

H.M.C.M. van Oorschot (chairman)

production level of small fields, budget and absen-

A.H.P. Gratama van Andel

teeism), as well as achieving a number of specific

J.W. Weck

personal goals. The maximum variable remuneration amounts to 30% (short-term goals) and 15% (specific personal goals) of the basic annual remuneration. Payment of the variable remuneration takes place after the Annual General Meeting of Shareholders has adopted the financial statements for the year applicable to the goals. Remuneration The remuneration of the executive board is given on page 111 of the financial statements, under â&#x20AC;&#x2DC;Other informationâ&#x20AC;&#x2122; in the Notes to the company financial statements.

‘Every day, it’s a pleasure to go work’ ‘As an HR assistant, I support the HR manager and HR advisors. However, I also have my own tasks and responsibilities, such as the salary administration, the updates to the personnel dossiers, the monthly HR score card and the introduction of new employees. Over the past three years, the HR department

I started out as a secretary, and was given the

has undergone great professionalisation. We have

opportunity to return as an HR assistant after my

changed from a traditional HR department that was

maternity leave. Now I can combine my job with a

purely focused on the employees into a department

Bachelor’s degree in Human Resources Manage-

with an active strategic policy function. Many

ment, with the prospect of growing towards the

typically HR tasks are now the responsibility of the

job of HR advisor. It is quite challenging to study

line management, and we facilitate and support

alongside a 32-hour job and raising a family of three,

them. The HR department therefore has more scope

but I’m extremely motivated and go to work with

for focusing on aspects like training, recruitment and

pleasure every day’.

selection, and on themes like lifelong employability and absenteeism. I’ve been working here now for almost nine years with great pleasure. My job is enjoyable, hectic and dynamic, but I like that. I have some great colleagues and I have the feeling that I make a substantial contribution to the operating results and to everyone’s pleasure of work. EBN is a good employer with an eye for the individual. You are given chances and opportunities for personal development.

Tamara Balfour van Burleigh HR assistant

Corporate Governance Shareholder

EBN’s articles of association also state that the executive board requires prior approval by the

General

Supervisory Board or the shareholder for certain

EBN is a private limited company with limited liability

decisions. Concerning the approval of the Super

with the Dutch State as it sole shareholder. Manage-

visory Board, please refer to page 48.

ment of the shares is in the hands of the Ministry of Economic Affairs. EBN is also a policy participation;

The shareholder’s approval is required for

shareholder status and the role of policymaker are

the following:

vested in the same ministry.

• entering into or terminating any sustainable collaboration or investment with a value

EBN’s authorised capital is EUR 128,137,500 and is divided into 284,750 ordinary shares with a nominal value of EUR 450 per share.

exceeding EUR 200 million • closing the business, or winding up the company or a subsidiary or important division of the business

The shareholder appoints the chairman of the

about a major change to the identity or character

Board of EBN. The shareholder appoints the execu-

of the company, including acceptance or divest-

tive board on the basis of a recommendation by the

ment of a substantial participation in the capital of

Supervisory Board. The Minister of Economic Affairs

another company and the transfer of the business

has to approve that recommendation beforehand.

to a third party

The shareholder appoints a Supervisory Director on the basis of a recommendation by the Supervisory Board. The shareholder appoints a chairman from the members of the Supervisory Board.

• in the case of decisions by the executive board

executive board and the members of the Supervisory

• exercising the voting right on shares in a subsidiary.

Shareholders’ meeting

Informal consultation

One shareholders’ meeting was held in 2014.

In addition to the shareholders’ meeting, the ministry

The chairman of the executive board, the Finance

also regularly conferred informally with EBN’s Direc-

Director and the full Supervisory Board attended

tor Finance: four times in 2014. The objective of this

this shareholders’ meeting. At least the following

informal consultation is to provide the shareholder

topics are on the agenda of the annual shareholders'

with all the relevant financial information the share-

meeting:

holder needs to exercise his authorities. Providing

• Review of the written annual report by the

relevant information is one of the executive board’s

executive board on issues concerning the

obligations.

company and its management • Adoption of the financial statements and deter mination of the profit appropriation • Discharging the executive board of its

The policymaker is also regularly consulted on an informal basis. There are fixed consultation times, such as the strategic consultation, the executive

responsibility for its management over the

consultation and the mining and gas production

past financial year

consultation. In these fixed consultation meetings,

• Discharging the Supervisory Board of its

information is exchanged on developments within

responsibility for supervision over the past

the two organisations, any changes to the energy

financial year.

policy and relevant developments in EBN's tasks and activities. In addition to members of the team of

These topics were discussed during the sharehold-

Directors, other EBN employees also attend these

ers’ meeting. The financial statements were adopted

meetings. The chairman of the Supervisory Board is

and the executive board and the Supervisory Board

present at the strategic consultation.

were discharged of their responsibility.

The composition of the Supervisory Board was amended during the 2014 shareholders’ meeting. Mr Kramer resigned and Mr Van Oorschot was reappointed for a third period of four years, whereby Mr Van Oorschot was also reappointed as chairman of the Supervisory Board. Mr Kramer’s resignation created a vacancy in the Supervisory Board. This vacancy was filled by the appointment of Mr Weck as of 3 February 2015 by the Minister of Economic Affairs. Mr Weck has worked for various ministries, in the positions of director-general and deputy permanent secretary.

Supervisory Board

Executive board

The Supervisory Board is responsible for supervising

EBN’s executive board comprises one statutory

the executive board’s policy and the general course

director (Jan Dirk Bokhoven). The executive board

of affairs within EBN and advises the executive

is responsible for general policy and strategy with

board when necessary and desired. In turn, the

the company’s associated risk profile. The executive

executive board provides the Supervisory Board

board is also responsible for achieving the compa-

with all necessary and relevant information to enable

ny’s objectives, the results achieved and the social

it to execute its tasks and responsibilities. EBN’s

aspects of business relevant to the company. Where

articles of association state that the executive board

necessary, the executive board submits decisions

requires the prior approval of the Supervisory Board

to the shareholder or the Supervisory Board for

for certain decisions, for example when

approval. It also ensures the proper functioning of

• establishing and amending the operating budget

the internal risk management and control system.

and the investment and financing plan; • appointing proxy-holders;

Team of Directors

• making (dis)investments;

The executive board is assisted by three functional

• conducting other legal transactions to the

directors who, together with the statutory director,

value of more than EUR 50 million.

constitute the team of Directors. The statutory director is chairman of the team of Directors. In

Equal distribution of the seats on

addition to the statutory director, the team of

the Supervisory Board

Directors comprises the following people: Mr

The composition of the Supervisory Board was

Starink (Director Asset Management), Mr Scheffers

amended in 2014, due to the resignation of Mr

(Director Technology), and Mr Boekelman (Director

Kramer. The Supervisory Board has compiled a

Finance). The organisation chart is shown on page 7.

function profile for the total Supervisory Board.

The executive board regulations state how the tasks

The profile can be viewed on EBN’s website.

are distributed among the team of Directors. The

As soon as a vacancy arises that is not filled by

team of Directors functions on the basis of joint

reappointment, the Supervisory Board will again

responsibility. Within that joint responsibility, the

take action to arrive at a ratio in accordance with

tasks are divided into functional areas. This specific

article 2, paragraph 276 of the Dutch Civil Code,

task division is set down in writing.

which requires 30% of the supervisory directors to be women. The report by the Supervisory Board is on page 46 of this annual report.

Each member of the team of Directors is responsible

Additional jobs of the

for preparing policy matters and decisions in his or

Supervisory Board members

her own operational area. After decision-making

Mr Bokhoven is a member of the Supervisory Board

within the team of Directors, the members of the

of GasTerra and a member of GasTerra’s board

team of Directors ensure the prompt implementa-

of delegated Supervisory Directors. He is also a

tion of the decisions made. In principle, the team of

member of the College van Beheer Maatschap

Directors meets twice a week.

Groningen.

In the annual report, the executive board gives a

Conflicts of interest

description of the primary risks related to EBN’s

EBN endorses principle II.3 of the Corporate

strategy; the structure and functioning of the

Governance Code (see below ‘Application of the

internal risk management and control systems

Corporate Governance Code’) that any form or

with regard to those risks, and any significant

appearance of conflict of interest between the

shortcomings detected in the internal risk

company and the executive board must be avoided.

management and control systems and the changes

The articles of association and the executive board

that have been implemented and improvements

Regulations include a regulation concerning (poten-

proposed in response. For this description, please

tial) conflicts of interest between the executive

refer to page 63.

board and the company. Any (potential) conflicting interest of material significance must be immediately

Remuneration

reported to the chairman of the Supervisory Board.

The shareholder determines the policy on the

No incidences were reported by the executive board

executive board’s remuneration. The Supervisory

in 2014.

Board determines the actual remuneration of the individual members of the executive board within

External auditors

the framework of that policy, including the variable

The shareholder is responsible for appointing the

remuneration. The executive board’s remuneration is

external auditors, with the Supervisory Board having

explained in the report by the Supervisory Board.

a right of nomination. In 2011, EY were appointed to audit the financial statements for the years 2012, 2013 and 2014. In 2014, the provisional option was lifted, whereby EY was also appointed to audit the 2015 financial statements.

EBN complies with the following principles of the Corporate Governance Code: II.1 Executive board: role and procedures, II.3 Executive board: conflicts of interest, III.1 Supervisory Board: role and procedures, III.2 Supervisory Board: independence, III.3 Supervisory Board: expertise and composition, III.4 Supervisory Board: the chairman of the Supervisory Board and the company secretary, III.5 Supervisory Board: composition and role of the board's three key committees, III.6 Supervisory Board: conflicts of interest, III.7 Supervisory Board: remuneration, V.1 Financial reporting, V.2 Role, appointment, reward and performance evaluation of the external auditors, V.3 and V.4 External auditors’ relationship and communication with the company’s bodies.

Application of the Corporate Governance Code

In 2014, the complaints board did not receive or deal with any complaints. The confidant(e) had one

As EBN qualifies as a state participation, the

discussion with an employee in 2014. The code of

company adheres to the government's policy that

conduct is available at: www.ebn.nl/documents/

stipulates that state participations must follow

gedragscode_EBN.pdf

the Corporate Governance Code. Accordingly, we follow a number of the code’s principles(1), whereby,

At present, there is no system for monitoring ques-

however, not all best practice provisions included in

tions related to competition-restrictive behaviour,

these Corporate Governance Code principles are

yet this topic is important to EBN. Our plan is to set

applicable to EBN.

up a system for registering employees’ questions

The specific principles and best practices we do

about possible competition-restrictive behaviour by

follow have been elaborated upon in EBN’s articles

EBN and/or its operators. This goal has arisen from

and associations and regulations and are a conduct

the internal materiality analysis in 2014.

guideline for the executive board, the Supervisory Board and the shareholder. The full Corporate

Regulations protecting whistleblowers

Governance Code can be viewed on:

On the basis of the regulations protecting whistle-

http://commissiecorporategovernance.nl

blowers, employees can report any alleged abuse to the executive board or the Supervisory Board. No alleged incidences of abuse were reported in 2014.

Integrity

The regulations protecting whistleblowers can be

Code of conduct, internal complaints

found at: www.ebn.nl/documents/klokkenluidersre-

board and confidant(e)

geling_EBN.pdf

The importance we attach to transparency and clarity externally also applies within the confines of our own organisation. EBN has a code of conduct that is accessible and applicable to all employees and provides a guideline for making personal choices and individual decisions. We also use the code of conduct to test the actual conduct of our company and our employees. In the event of internal complaints, employees can approach a confidant(e) or the complaints board.

Risk management

We used a benchmark study to assess the relation-

Risk management is an integral part of EBN’s oper-

ship between the level of enjoyment at work and

ational management. It enables our organisation to

integrity compared with other companies.

constantly maintain a good overview of the strategic

The results were discussed and further elaborated in

and operational opportunities and risks, and respond

internal workshops with all employees.

effectively to them. Risk management within EBN is partly based on standardised processes and

Risk management structure

regulations that are integrated as far as possible

In 2013, EBN introduced a revised performance

into the company’s regular business activities. When

measurement system. It generates reports based

identifying these opportunities and risks, however,

on performance indicators that enable effective

we do not rely solely on structural elements. We also

monitoring of the performances of the joint

devote constant, focused attention to the cultural

ventures, the internal technological roadmaps and

aspects, such as risk awareness and integrity within

the departments. The system is also used to monitor

our organisation.

the progress of planned activities in these areas. At management level, the reports enable more effective

In 2014, we ran an internal integrity programme.

monitoring and, where necessary, the adjustment of

This programme is expressly linked to ‘enjoying your

EBN’s performances as a whole. The various reports

work’. It is our philosophy that enjoying your work

are regularly discussed and deployed in various parts

and integrity are naturally linked.

of the organisation.

Strategic Risk Analysis

Annual working programme

Operational Risk Analysis

EBN strategy

Vision, mission and strategy

Self evaluations In control statements

Effectiveness assurance

Internal audits External audit Following up internal and external audits

Risks and opportunities

Control Defind working processes Planning & control cycle / performance measurement Policy, regulations, codes

EBN Framework with major elements for each individual pillar for risk management

Risk analysis and control measures

Integral Management System (IMS)

Like every year, in 2014 the executive board carried

The working processes, internal policy documents

out a strategic risk analysis of both the opportunities

and internal regulations, such as the authorisation

and the risks of achieving the objectives. Additional

and power of attorney regulations and the code of

management measures were identified where

conduct, have been included in an Integral Man-

necessary, in addition to the measures already in

agement System (IMS). Within the context of risk

force. The most important strategic risks and their

management, EBN makes these documents easily

management are discussed annually with the Audit

accessible to all employees via on the EBN intranet.

Committee and the Supervisory Board. Audits The operational risks were evaluated once more in

In 2014, like every year, a number of internal audits

2014 by the departments within EBN. Operational

were carried out. These are aimed at evaluating

risks were identified and an evaluation was made

the quality and effectiveness of important working

of whether they were appropriately managed. This

processes and/or a number of specific themes within

took place in open and informal self-evaluation

those working processes.

sessions between the department managers and their employees. Where applicable, managers from

In 2014, internal audits were carried out on the

other departments with a significant share in the

NOV management cycle, on the gas-to-cash process

activities of a particular department joined in. During

and on the management of projects carried out

these sessions, the risks and the main associated

externally by the technical department. These

management measures were critically assessed, and

internal audits produced findings on the basis of

the set-up and the actual effect and effectiveness of

which actions were defined and allocated to ‘owners’.

these measures was discussed. Where necessary,

The findings of the internal audits are presented

specific actions were defined for improving the

and explained to the executive board. The most

control level. The results of the self-evaluations were

important findings are also discussed with the audit

reported to the executive board, and the department

committee of the Supervisory Board. The team

managers issued an ‘in-control declaration’. In this

of Directors monitors the implementation of the

declaration, the managers stated whether the major

actions on a quarterly basis.

risks in the relevant area of responsibility have been identified and gave an explanation of whether they

As every year, in addition to the internal audits, in

are adequately managed.

2014 EBN deployed joint venture audits to conduct a financial audit of the costs charged on to our organisation within the context of the various joint ventures. The findings of the joint venture audits were discussed with the partners. Adjustments were made where necessary.

Financial markets

Control measures

To achieve our strategic objectives, we depend

EBN encourages the operators to use as safe a

on good access to the capital markets, effective

process as possible, while minimising any possible

currency and interest-rate risk management and the

effects on the living environment. Specific HSE

sound creditworthiness of our financial counterparts.

issues are not discussed with the operators. When

Page ... onwards of the financial statements explains

damage does occur, we encourage the operator to

how the relevant risks are managed.

rectify it as quickly and efficiently as possible. We believe it is important for interested parties to

Risk profile

be informed pro-actively, factually and transparently

Each year, EBN does its utmost to achieve its strate-

of specific activities and any possible HSE effects.

gic objectives for the short term and the long term.

We therefore encourage operators to communicate

Naturally, it is inevitable that risks and uncertainties

transparently on these topics. Each year, dozens of

occur that affect the actual execution of these plans

earthquakes take place in the Netherlands, caused

to some degree or other. The major and most topical

by gas production. See page 11, 26 and 51 for a

risks are described below.

more detailed discussion of this issue.

Disasters and other undesirable effects

Earthquakes can cause damage to houses and other

on health, safety, nature and the living

property. In such cases, the operator compensates

environment

for the damage caused by the earthquake. EBN

The operational activities executed by the operator

contributes to that compensation proportionately to

for the joint ventures in which EBN participates

its interest in the joint venture in question. For the

entail potential inherent risks of disasters and other

financial impact, please refer to page 77, 88 and 94

undesirable effects on health, safety and the environ-

of the annual report.

ment (HSE) and our living environment. A disaster or other undesirable effect on HSE can lead to personal injury, damage to nature and the environment or to financial loss. This in turn may lead to loss of reputation for the exploration and production (E&P) sector and reduced support for E&P activities. A negative perception by society of these risks can also lead to less social support. Sufficient social support for exploration and production of gas and oil is essential, however, to achieve the desired production and replenishment of reserves in the Netherlands.

Long-term low prices, insufficient potential

That also means that the Netherlands would be

resources in the Netherlands or

unable to attract enough new investors and, conse-

an unfavourable investment climate

quently, there would be less investment in Dutch gas

If oil or gas prices are low for a longer period, oil

and oil production in general and in the application of

and gas companies will have less means available for

new, innovative techniques, in particular. Moreover,

funding all their planned projects. In addition, fewer

without new investments, the existing infrastruc-

future projects will be able to meet the minimum

ture would be removed prematurely. For offshore

yield requirements and the fields currently in

gas production, however, it is essential for critical

production will became loss-making earlier. There is

infrastructure to be retained as long as possible to

therefore a risk of the level of gas and oil production

facilitate the development of new fields. There is

lagging behind ambitions and produced reserves

a risk of the level of gas and oil production lagging

being insufficiently replenished. In order to avoid

behind ambitions and produced reserves being

this, there must be a greater focus on cost savings.

insufficiently replenished.

If there are insufficient exploration opportunities

Control measures

in the Netherlands, or if oil and gas companies find

EBN attempts to ensure sufficient seismic shoot-

insufficient new resources or regard the Dutch

ing, based on new technologies. We use targeted

investment climate as unfavourable for the explo-

research to identify and chart new E&P opportu-

ration and production of oil and gas, these parties

nities and resources in the Netherlands and bring

will shift their priorities to countries where they can

them to the attention of oil and gas companies.

realise better returns on their investment.

EBN actively encourages oil and gas companies to turn resources into reserves wherever possible. EBN will investigate the possibilities for further optimisation of the investment climate and commit itself to capitalising on them, together with the government, the sector and knowledge institutions. We will also actively draw national and international attention to the opportunities for exploration and production of gas and oil in the Netherlands. Our aim is to increase the dynamics in the sector and attract appropriate newcomers.

A poor competitive position for gas

Declaration by the executive board

Together with renewable energy sources, natural

The executive board is responsible for adequate

gas potentially plays an essential role in the energy

internal risk management systems and for assessing

mix. Gas is a low carbon fuel and, moreover, forms a

their effectiveness. The actual company perfor-

natural combination with sustainable energies such

mances are periodically compared with the approved

as solar and wind energy, as it is flexibly deployable.

plans and budgets in the financial year and discussed

There is, however, a risk that the potential role of gas

during the executive board Meeting. The executive

in the energy mix will be insufficiently realised due

board declares that the systems for the financial

to increasing energy production from other sources

reporting risks functioned properly during the year

(such as coal, as a result of the possible lasting low

under review and have provided a reasonable degree

price of coal). This could also lead to lower gas prices

of certainty that the financial reporting contains no

in the long run, due to declining demand. In the

material inaccuracies.

event of an extended period of low gas prices, there is the risk that oil and gas companies will slow down or postpone their investment projects and invest less in new developments. In that case, the level of gas and oil production will lag behind ambitions and produced reserves will be insufficiently replenished. Control measures EBN considers it important to convey the potential and importance of natural gas and to influence policymakers in their related policy choices. Due to the low operational cost structure, low market prices have little effect on EBNâ&#x20AC;&#x2122;s annual results.

Appendix About this report

As a significant part of EBN's operations is the financial participation in oil and gas activities and trading

Development of the report

in hydrocarbons, the material aspects of these

EBN reports annually on its social and sustainability

activities should be included in EBN's reporting.

performances in accordance with the applicable guidelines of the Global Reporting Initiative

Internal testing

(GRI). This enables EBN to offer the transparency

For the internal analysis, the following steps have

its shareholder also requires and reinforce the

been taken, in which employees are expressly

organisation's social esteem. In May 2013, the GRI

involved:

guidelines were reviewed and the fourth genera-

• identification of the relevant aspects

tion, the G4, was launched. To continue complying

• other issues resulting in a longlist of issues

with the GRI guidelines, EBN has decided to base the reporting for 2014 on these new-generation

This was carried out on the basis of knowledge of

guidelines. Consequently, in the fourth quarter of

the sector and the G4 guidelines and the sector

2014 we investigated the consequences entailed for

supplement for the oil and gas industry.

EBN's reporting and policy. GRI requests that the materiality of the aspects Materiality analysis

included in the longlist is determined.

The G4 guidelines require an organisation to find

This was done by assessing each aspect for:

out which (material) aspects it is most important to

• its importance to EBN according to major stake-

report on from a social point of view.

holders • its importance to EBN on the basis of the follow-

EBN investigated this in 2014. For this process, GRI

ing criteria:

expressly requests that the reporting organisation

- The degree of influence EBN has on the aspect

consider where in the chain certain aspects occur

- The degree to which the aspect is relevant to

and what influence it has on them. For EBN, this

EBN's success.

means looking at the materiality of aspects for our own organisation, but also at our role and influence

The results are shown in the materiality matrix on

with regard to operators and customers. In the

page 72. The importance of an issue for stakeholders

non-financial performances paragraph on page 36,

and for EBN is weighed up in the matrix.

we explain that role further.

Choice of issues

Additionally, G4 stipulates that, for most material

The issues that have high priority for both stake

issues, insight should be provided on how the organ-

holders and EBN are:

isation adapts in accordance with the performances

• Economic performance

of these aspects. This requires objectives, for exam-

• Indirect effects of economic performance

ple. These can be either qualitative or quantitative

• Oil and gas reserves

objectives. These have been determined for the most

• Compliance with environmental legislation

material issues. We would like to expand on these

• Health and safety (also of local communities)

further where necessary in 2015.

• Acting in accordance with competition regulations

External testing At the end of December 2014, the findings of this

In EBN's view, those issues most relevant for opera-

internal materiality analysis were tested against

tors concern environmental aspects and biodiversity,

the opinions of a number of direct stakeholders

environmental management, dismantling and dis-

(shareholder, representatives of operators and

posing of old infrastructure, disaster plans, reliable

policy-makers) in an interactive session. Addition-

installations and safe processes.

ally, EBN's intention of linking the reporting on the sustainability aspects to the operators and the

Issues that are most relevant for EBN as an organi-

associated objectives was discussed.

sation concern training and education and employee diversity, but also those related to influencing public

Stakeholders confirmed the desirability of increasing

opinion and an efficient chain.

transparency with regard to social aspects. They stressed that it is important to determine the extent

This analysis showed that most of the material

to which reporting and adaptation with regard to the

aspects are already included in EBN's reporting,

operators is appropriate for EBN's role. Attention

either in the financial statements or in the annual

needs to be paid to avoiding doubling up with, for

report on EBN's operational performance indicators.

instance, the role of the State Supervision of Mines.

To report in line with G4, the conclusion is that a number of aspects and indicators need to be added to these annual reports. We give a detailed overview of these in the GRI index (which can be found on our website).

Decisions and objectives for reporting

All performances described follow specific frame-

On the basis of external testing, EBN has formulated

works. The relationship of certain indicators with the

the following intentions.

annual gas and oil production, for example, is evident

• The 2014 annual reporting was formulated in

and, for a number of indicators, the relationship with

accordance with the G4 guidelines (including

the number of drillings is logical. Frameworks are not

the GRI index), complying with as many content-

defined by laws and regulatorions, however. These

related requirements as possible. We report at

frameworks are described in further detail where

core level, choosing at least one indicator for each

relevant. The results provide an overview of EBN’s

material aspect.

share (unless otherwise specified) in the perfor-

• In 2015 we aim to embed the responsibilities for

mances of the entire oil and gas production industry.

aspects, indicators and objectives required by G4 in our organisation. • In cooperation with the oil and gas industry,

EBN’s share is calculated as EBN's percentage of the total gas, condensate and oil production in the

EBN will initiate a process for compiling a

environmental and economic performances. For the

sustainability plan.

social performances, the share of the entire industry (100 percent) is presented, as it is irrelevant to

Scope

mention EBN’s share in these.

EBN's environmental performances concern our participations only; they are related to the perfor-

Dutch production of gas, oil and condensate

mances of the entire sector operating on Dutch

comprises the fiscally reported gas, oil and conden-

territory. The environmental reports by the individ-

sate production figures reported by the operators.

ual operators, formulated annually in the context

The injection and production volumes of gas in the

of the Ministry of Economic Affairs’ Declaration of

gas storage facility are seen as internal company

Intent, Execution of Environmental Policy Oil and

activities.

Gas Producing Industry constitute a guideline. The Dutch operators add the environmental and energy

The gas is fiscally reported the moment it is

performances, in the electronic Environmental

delivered to third parties. The energy consumption

Annual Report. These data form the basis for the

of drilling activities is not included, but the CO2 and

performances as presented in this report and the

CH4 emissions from drilling activities are.

CSR reporting.

Since the 2012 reporting year, the oil and gas

Reporting Initiative's G4 Sustainability Reporting

production industry no longer reports on waste

Guidelines (Core aspect) and our internal reporting

due to production-related activities (Under GRI3.1

criteria. Please refer to page 114 for the independ-

indicator EN22), so the related graph cannot be

ent accountant's assurance report.

expanded upon. The results up to and including 2011 are still shown in this reporting. The performances

GRI Index

of one onshore gas treatment site are not included

On our website you will find the GRI index, in which

in the total reporting. For one operator, only the

we have also included the new indicators.

production-related data is included. Disclaimer In this report, we report on efforts and achievements with regard to the objectives in 2014. We also present our plans and vision for the future. This future-oriented information is characterised by words such as continue, want, aim, predict, expect, target, objective, vision, planning, ambition, scenario, resolution and forecast. Inherent to future expectations is that the outcome is subject to risks and uncertainties and their achievement is therefore not assured. Assurance EBN considers it important for an independent accountant to test our non-financial performance against the applicable reporting guidelines. We have requested the accountancy firm EY to provide assurance with regard to this financial year with a limited degree of certainty concerning the information in the sections Preface, About EBN and Report by the executive board and the GRI table that will be published on our website. We have asked EY to assess whether all materially significant aspects are correctly presented in accordance with the Global

Materiality matrix

• Water: discharge and treatment of waste water • Environmental impact of products and services • Emergency plans

• Indirect economic effects • Use of chemicals • Use of renewable energy • Emissions • Leaks • Waste • Burning off natural gas • Meeting environmental requirements • Health and safety of the local community (earthquakes as a result of gas production, safe transport, safety of gas stations) • Communication with local community • Safety of installations and processes • Influence of government policy • Complying with legislation

• Economic performance • Reserves (oil and gas) • Health and safety • Dismantling old platforms • Non-compliance with competition legislation

• Material use • Caring for ecosystem and biodiversity • Animal welfare (e.g. birds around platforms) • Noise • Complaints procedure regarding environmental incidents • Working conditions checks on suppliers • Complaints procedure regarding working conditions • Human rights as part of investment policy • Freedom to join a union • Child labour • Slavery • Human rights checks on suppliers • Complaints procedure regarding human rights • Being forced to move house • Complaints procedure regarding the immediate surroundings

• Pollutants in fuels (benzene, lead, etc) • Investments and payments related to the environment • Working conditions • Employee representation • Equal pay for men and women • No discrimination • Reuse of product locations or platforms • Anti-corruption • Replacements for fossil fuels

• Training courses for employees • Efficiency in the production chain (production to end user)

• Diversity and equal opportunities for employees

Operators’ interest

L EBN’s interest

Financial statements

General EBN B.V. ('EBN'), having its registered office in

The consolidated financial statements of EBN have

Utrecht, the Netherlands, was incorporated on

been prepared in accordance with the International

2 January 1973 in Maastricht. All shares in EBN are

Financial Reporting Standards (IFRS) and inter-

held by the Dutch State.

pretations of the International Financial Reporting Interpretations Committee (IFRIC) as applicable on

EBN focuses on oil and gas exploration and pro-

31 December 2014 and as endorsed by the

duction activities in the Netherlands and the Dutch

European Union and with Part 9, Book 2 of the

territorial waters. In addition, EBN participates in

Dutch Civil Code.

underground gas storages and in transport and gas processing facilities.

EBN’s company profit and loss account has been presented in a condensed manner in accordance

The executive board has prepared and, by resolution

with article 402, Part 9, Book 2 of the Dutch Civil

of 23 June 2015, formally approved the financial

Code.

statements of EBN for the 2014 financial year. The financial statements were subsequently sub

Basis for consolidation

mitted to the Supervisory Board. Pursuant to Article

The consolidated financial statements comprise the

20.2 of the articles of association, the Supervisory

financial statements of EBN and the entities over

Board also provides a preliminary recommendation

which EBN has control. EBN has control over a

to the shareholders. The financial statements were

subsidiary if EBN is able to determine the sub

then submitted to the General Meeting of Share-

sidiary’s financial policy and corporate policy in order

holders, where they were adopted and subsequently

to obtain benefit from its activities. The subsidiary’s

published.

financial statements are prepared on the basis of the same principles as EBN's. All transactions, balances,

Please note that this is a copy of the Dutch version

assets and liabilities within the group are eliminated

of the financial statement. The Dutch version

on consolidation. The results of the subsidiaries

prevails.

acquired or disposed of during the year are included in the consolidated statement of comprehensive income from the date of acquisition or until the date of disposal as appropriate. In 2014, EBN Capital B.V. (EBN Capital) was EBN's sole subsidiary.

Associates

The most important joint operations, based on the

EBN has a 40% participation in GasTerra BV ('GasTerra').

carrying amount of property, plant and equipment,

GasTerra is based in Groningen and its core activity is

are as follows:

trading in natural gas. EBN also has a 45% participation in NOGAT BV ('NOGAT'), based in Zoetermeer, and a 12% participation in NGT-Extensie, also based in Zoetermeer.

NAME

INTEREST

OPERATOR

OPERATOR'S PLACE OF BUSINESS

The core activity of these participations is gas transport

Groningen

40%

NAM

Assen

from the North Sea.

Schoonebeek

40%

NAM

Assen

K04/K05

50%

Total

The Hague

EBN conducts its activities through partnerships, which

Gasopslag Bergermeer

40%

TAQA

The Hague

are set out in contractual arrangements (agreements of

Drenthe

40%

NAM

Assen

UGS Norg

40%

NAM

Assen

JDA Unit

40%

NAM

Assen

ments of cooperation and the joint operating agreements,

L05a

40%

GDF SUEZ

Zoetermeer

EBN has joint control with the other parties in the agree-

K06/L07

49%

Total

The Hague

L09a

50%

NAM

Assen

de Ruijter Unit

46%

DANA

Voorburg

for the obligations related to the agreements. In EBN's

A&B Unit

47%

Petrogas

Voorburg

financial statements, EBN's interest in the joint operations

Q13a

40%

GDF SUEZ

Zoetermeer

is recorded in fnancial statements by including the assets,

K18-G Unit

40%

Wintershall

Rijswijk

F03a

40%

Centrica

Hoofddorp

Joint arrangements

cooperation or joint operating agreements). EBN has investigated the rights and obligations ensuing from these agreements. The conclusion is that, in both the agree-

ments over the most important activities over partnership. Furthermore, together with the other parties in the joint agreements, EBN has rights to the assets and is liable

liabilities, income and expenditure for its share.

Key accounting estimates and judgements Estimates and judgements are made in the preparation of the financial statements. These have con足sequences for the amounts reported for assets and liabilities, income and expenditure items and the related reporting of contingent assets and liabilities at the date of the financial statements. Results can be influenced by such estimates and judge-

ments. The paragraphs below give an explanation of the

gory 1) and the associated production profiles. Estimations

matters that management considers most important and

of reserves are, by definition, inaccurate and based on

which, due to intrinsic uncertainties, are often the most

interpretations that can, over time, change, on the basis

difficult to estimate.

of new information obtained from drilling new wells, reservoir production behaviour and changes in economic

Decommissioning and restoration costs

factors (such as price expectations). This can result in

The provision for decommissioning and restoration costs

upward or downward revisions to the reserves. Changes

is based on information from operators EBN evaluates

in reserves have an effect on future depreciation and the

this information on the basis of its own knowledge and

realisable value of production assets.

experience and amends it where necessary. The ultimate decommissioning and restoration costs are uncertain and

Claims resulting from earthquakes

cost estimations can vary as a result of numerous factors,

The provision for claims resulting from earthquakes in

such as market prices, changes in legal requirements,

the province of Groningen is based on information from

new decommissioning techniques or experience. The

the operator. This provision is based on the number of

anticipated timing and scope of the costs can change as

reported and expected claims and the average cost per

a result of, for example, changes in gas and oil reserves

claim on the basis of experience and historic information.

and changes to legal and regulatory requirements and

The ultimate level of the costs depends on the extent of

their interpretation. Significant estimates and judgements

the damage and its evaluation can therefore deviate from

are made when establishing the provision for decommis-

the current average.

sioning and restoration costs. Substantial revisions of the provision can therefore influence future results.

Realisable value Where necessary, the calculation of the realisable value

Reserves

of assets is partly based on estimations of the reserves,

The Unit of Production (UOP) depreciation is based on

production profiles, future selling prices, operational cost,

EBN's estimations of the gas and oil reserves and produc-

exploration potential, expected future investments and the

tion profiles. EBN determines the gas and oil reserves in

discount rate. Future events can have an impact on these

accordance with the definitions laid down by the Society

forecast and estimations, as a result, realisable values can

of Petroleum Engineers (SPE), World Petroleum Council

change.

(WPC), American Association of Petroleum Geologists (AAPG) and Society of Petroleum Evaluation Engineers (SPEE) in the Petroleum Resources Management System and the new guidelines from 2011. The reserves used for the depreciation are based on EBN's current estimations of proven and probable developed reserves (PRMS cate-

Summary of significant accounting policies The financial statements have been prepared in accord-

A tangible asset is no longer included in the balance sheet

ance with the historical cost convention, and on a ‘going

once it is disposed of or when no future economic benefit

concern’ basis, unless stated otherwise.

is expected from its continued use or if the licence is relinquished or sold. Any profit or loss ensuing from the

Conversion of foreign currencies

asset that is no longer included in the balance sheet is

The euro is EBN's operating and reporting currency. Com-

incorporated into the result.

mercial transactions and borrowings in foreign currencies are converted at the spot exchange rates as applicable on

Exploration and evaluation assets

the transaction dates. Balance sheet items denominated

Expenditures as listed below are capitalised as part of the

in foreign currencies are converted at the spot exchange

exploration and evaluation assets: acquisition of explora-

rates applying on the balance sheet date. Differences in

tion licences, exploration drilling including test, sampling

exchange rates resulting from settlement of these transac-

and activities related to evaluating the technical and

tions and conversion of balance sheet items are charged to

commercial possibilities for extracting hydrocarbons.

the profit for the year.

The costs of the following are not capitalised: topo graphical, geological, geochemical and geophysical surveys

Current versus non-current assets and liabilities

(unless they are related to existing and proven reserves).

An asset is classed as current if it is expected to be realised

incurred are charged to the consolidated statement of

within 12 months of the balance sheet date. A liability

comprehensive income.

If an exploration well turns out to be dry, the costs

or debt is classified as current if it will be settled within 12 months of the balance sheet date. In the comparative

Exploration and evaluation costs included in the balance

figures, a re-categorisation has been made to enable a

sheet for more than 12 months are charged to consol-

consistent presentation.

idated statement of comprehensive income under dry wells, unless:

Property, plant and equipment Property, plant and equipment are valued at purchase value minus depreciation and any impairment losses.

expenditure is required before production can

Replacement investments are capitalised in accordance

commence, or

with the IAS 16 general capitalisation criteria. The estimated costs of the decommissioning, dismantling and removal of platforms and other installations are capital-

• they are located in an area where significant capital

• commercially recoverable quantities have been found, or • further exploration or appraisal activities are taking

ised as part of the purchase value of the tangible asset in

place, i.e. additional exploration wells are being drilled

question.

or there are firm plans to do this in the near future.

EBN regularly evaluates, on the basis of the above criteria,

The UOP percentages for the financial year show the

whether it is still appropriate to capitalise expenses

ratio between the year's production and the proven and

relating to exploration drilling, and whether the drilling

probable developed reserves (PRMS category 1) at the

activities can be continued. Exploration wells that have

beginning of the year. These proven reserves are deter-

been on the balance sheet for more than 12 months are

mined by increasing the reserves as established at the end

reevaluated to determine whether any facts or circum-

of the financial year with the production for the year.

stances have changed and whether the above criteria still apply.

The other remaining property, plant and equipment items are depreciated on a straight line basis over their estimated

Exploration and evaluation costs under construction and

useful life. Twenty years is taken as the initial basis for main

investments under construction are re-categorised to

transport pipelines and thirty years for facilities for under-

production, transport and storage facilities or drilling from

ground storage of natural gas. A ten-year useful life applies

the start of production or commissioning.

to industrial buildings. Lands are not depreciated.

'EBN's reimbursements'

The estimated useful life of property, plant and equipment

Reimbursements paid to partners â&#x20AC;&#x201C; mainly exploration

is tested each year, taking economic and technological

costs and interest payments relating to proven reserves â&#x20AC;&#x201C;

obsolescence and regular usage into account.

are capitalised and depreciated on the basis of the Unit of Production method (see next section for more information).

Borrowing costs Financing costs for projects exceeding EUR 100 million

Depreciations

are capitalised. The interest rate used for the financial year

Property, plant and equipment for gas and oil production

is based on the average interest rate applicable to non-

are depreciated on the basis of the Unit of Production

current borrowings in the past financial year.

(UOP) method. This method is based on EBN's estimations of the proven and probable developed reserves and production profiles in accordance with the definitions laid down by the Society of Petroleum Engineers (SPE), World Petroleum Council (WPC), American Association of Petroleum Geologists (AAPG) and Society of Petroleum Evaluation Engineers (SPEE) in the Petroleum Resources Management System 2007 (PRMS) and its new 2011 guidelines.

Associates

If so, the value of the asset will be deemed to be impaired.

An associate is an interest in an entity on which EBN

If an asset does not generate sufficient independent

can exert significant influence, but over which it cannot

cash flow, the recovarable amount is determined for the

exercise decisive control.

cash-generating unit to which the asset belongs. Typically, EBN's cash-generating unit is a sales contract. The esti-

Associates are recognised in accordance with the equity

mated future cash flows are discounted at a rate before

method. This means that EBN’s share in an associate is

taxes, on the basis of the market interest rate, plus a

recognised as EBN’s share in the net assets of this entity,

mark-up for the asset’s specific risks. EBN uses the WACC

less any impairment. EBN’s share in the profit or loss of

(Weighted Average Cost of Capital) for this calculation.

the associate is charged to consolidated statement of

This is 6% for midstream activities (2013: 7%) and 8% for

comprehensive income.

exploration and production activities (2013 8%), after tax. A discount rate before tax is also determined, on the basis

If EBN’s share in the loss of an associate exceeds the

of an iterative method.

carrying amount of that associate, including any other receivables, the carrying amount is reduced to nil. No

If the recovarable amount of an asset is lower than the

further losses are accounted for unless EBN has assumed

carrying amount, the carrying amount will be reduced

responsibility for the associate through a guarantee or

to the recovarable amount. Impairment can be reversed,

other commitments.

either wholly or partially, in the event of a change in the

Unrealised gains and losses on transactions with associ-

estimate that is of significance for determining the reco-

ates are eliminated in proportion to EBN’s share in these

varable amount. Impairment is presented as a separate

associates.

item in the consolidated statement of comprehensive income.

Impairment An assessment is made annually on the balance sheet date

Inventories

as to whether the carrying amount of a non-current asset

Inventories of gas stored underground and materials and

(property, plant and equipment or associate) exceeds its

equipment are recognised at average purchase prices or

recovarable amount (higher of fair value less cost to sell

lower net realisable values. Inventories of above-ground

and value in use).

condensate and oil are recognised at their net realisable values at the year-end.

Receivables Receivables are recognised at amortised cost less any correction for bad and doubtful debts. On first recognition, receivables are presented at fair value.

Cash and cash equivalents

The provision for decommissioning and restoration costs

Cash and cash equivalents are cash in hand, bank balances

is designed to cover the expected estimated costs of

and deposits at banks with a remaining term to maturity

decommissioning, dismantling, and land restoration on

of less than three months. Amounts owed to banks are

the basis of present requirements, technology and costs

presented as current liabilities.

estimates. The amount of this provision is based on information provided to EBN by the operators. Any changes

Shareholder’s equity

in estimates will, after EBN has made its own assessment,

EBN’s shareholder’s equity consists of share capital and

result in a corresponding change in the capitalised of

any dividend declared. The Dutch State is EBN's sole

decommissioning and restoration costs of the relevant

shareholder. The dividend payable to this shareholder

property, plant and equipment.

is recognised as a liability in the period for which it is due, in accordance with EBN’s articles of association.

The provision for ground subsidence is designed to cover

An exception to this rule is made for the proposed final

certain additional liabilities arising during the production

dividend, which does not become a liability until it has

phase.

been approved by the General Meeting of Shareholders. The provision for earthquakes is designed to cover the

Provisions

claims resulting from earthquakes in the province of

Provisions are recognised in the balance sheet if the

Groningen.

following conditions are satisfied: • there is a present legal or constructive obligation as a result of a past event, and • it is probable that cash outflow will be required to settle the present obligation, and • a reliable estimate can be made of the amount of the obligation.

Liabilities Borrowings are recognised at amortised cost. On first recognition, such items are presented at fair value less costs. Borrowings in foreign currencies are converted at the exchange rates applicable on the balance sheet date. Premiums or discounts on borrowings are amortised during the term to maturity of the loan concerned interest

If the effect of the time value of money is material,

expense is charged to the result in the period to which it

provisions are determined by calculating the present value

pertains, using the effective interest rate method.

of the forecast cash flows at a discount rate before tax. Once the present value has been calculated, any increase in provisions as a result of the passing of time is presented as interest expense. The provision for deferred tax liabilities is not discounted.

Pensions

Sales

EBN provides a defined benefit pension scheme, which is

Sales from the sale of gas, oil and condensate are

managed as part of the ABP pension fund. In its financial

accounted for at the time of delivery, which is when own-

statements EBN treats the scheme as a defined contribu-

ership of and the risks associated with the delivered goods

tion pension scheme because the pension fund is unable to

pass to the buyer. Revenues from oil and gas production

provide the information required to determine and specify

generated from assets in which EBN participates with

EBN’s share in the underlying pension obligations, fund

other producers are accounted for in proportion to EBN’s

investments and costs of the scheme in a consistent and

relative interest in these assets.

reliable manner.

Financial income and expense Contingent assets and liabilities

Interest income and interest expense are recognised on

Contingent assets and liabilities are not included in the

the basis of the effective interest rate method. Interest

balance sheet.

expense also includes interest accrued on provisions.

Emission rights

Share of profit from associates

As a result of its interests in the various joint operations,

The share in the profit from associates is recognised as the

EBN must comply with legislation designed to reduce

share of the profit for the year under review correspond-

greenhouse gas emissions. The operator trades the emis-

ing with EBN’s interest, after deduction of taxes.

sion rights on behalf of the partners in the joint operations.

Taxes The operator reserves emission rights in order to be able

Taxes on profits are determined in accordance with the

to satisfy delivery obligations. These rights are not recog-

balance sheet method. Tax liabilities are specified in the

nised in the balance sheet. Income is reported when the

consolidated statement of comprehensive income except

operator sells EBN’s share in surplus emission rights. If the

if they relate to an item included in other comprehensive

operator has to purchase additional emission rights, EBN

income.

records an expense item to the extent of its share.

payable on the taxable profit for the year, based on the

International Financial Reporting Standards (IFRS)

tax rates applying on the balance sheet date, net of any

New and amended IFRS standards and IFRIC inter

adjustments for taxes payable in respect of previous years.

pretations that came into force as of the financial year

Current tax expenses are taxes that are expected to be

2014 have been incorporated: Deferred tax assets and liabilities are recognised on the

• IFRS 11 Joint Arrangements

basis of the expected fiscal consequences of temporary

• IFRS 12 Disclosure of Interests in Other Entities

differences between the fiscal and commercial values

• IFRS 10-12 - Transition Guidance

of assets and liabilities related to the provision for soil

• IAS 28 Investments in Associates and Joint Ventures

subsidence and decommissioning and restoration costs.

• IAS 32 Financial Instruments - Presentation: Offsetting

Deferred tax assets and liabilities are calculated on the

Financial Assets and Financial Liabilities

basis of the tax rates that are applicable or materially

The implementation of these standards has no significant

determined on the balance sheet date, and in accordance

impact on the financial statements.

with the tax regulations expected to apply when the specific deferred assets and liabilities are settled.

The following standards, amendments to standards and interpretations that have not yet come into force or have

Financial derivatives

not been endorsed by the European Union are not yet

Financial derivatives are recognised at fair value on initial

applied by EBN:

recognition and then at the current fair value prevailing

• IFRS 9 Financial Instruments

on each subsequent balance sheet date. The current fair

• IFRS 10 Consolidated Financial Statements and IAS

value is calculated with the appraisal model of Reuters,

28 Investments in Associates and Joint Ventures - Sale

using yields from Reuters. Any resultant gains or losses

or Contribution of Assets between an Investor and its

are charged to comprehensive income. EBN does not apply hedge accounting.

Associate or Joint Venture • IFRS 11 Joint Arrangements – Accounting for Acquisitions of Interests in Joint Operations

For further information on the calculation of the fair values, see page 104 "Fair value of financial instruments".

• IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets – Clarification of Acceptable Methods of Depreciation and Amortisation, effective 1 January 2016 • IFRIC 21 Levies EBN is investigating the consequences of these standards, amendments to standards and these interpretations. On the basis of the provisional results, EBN does not expect the application of these new standards, amendments to standards or new IFRIC interpretations to have any material consequences for the company’s financial statements in future financial years.

Consolidated statement of comprehensive income

in EUR mln NOTE

2014

2013

sales

6,598

8,809

levies

2,735

4,100

operational costs

1,095

917

impairments

depreciation and amortization

595

555

operating expenses

4,425

5,669

operating profit

2,173

3,140

financial income

142

114

financial expense

-214

-210

share of profit from associates

2,139

3,087

pre-tax profit taxes

-525

-760

net profit

1,614

2,327

1,614

2,327

other comprehensive income

total comprehensive income

Consolidated balance sheet

in EUR mln ASSETS

NOTE

YEAR-END 2014

YEAR-END 2013

non-current assets

YEAR-END 2014

YEAR-END 2013

128

199

219

2,549

2,225

borrowings

1,408

1,136

other

4,050

3,471

644

527

LIABILITIES

shareholderâ&#x20AC;&#x2122;s equity

property, plant and equipment

4,324

4,039

associates

110

111

4,434

4,150

NOTE

share capital retained earnings

non-current liabilities provisions deferred tax liabilities

current assets

current liabilities

inventories

receivables

997

1,148

154

126

1,230

1,379

5,664

5,529

tax derivatives cash and cash equivalents

total

borrowings

tax trade accounts payable

230

281

other

525

937

derivatives

1,415

1,839

5,664

5,529

total

Consolidated statement of changes in shareholder's equity in EUR mln balance at 1 January 2013

SHARE CAPITAL

RETAINED EARNINGS

TOTAL EQUITY

128

200

net profit

2,327

other comprehensive income

total comprehensive income

2,327

final dividend 2012

-72

interim dividend

-2,236

128

219

net profit

1,614

other comprehensive income

total comprehensive income

1,614

final dividend 2013

-91

interim dividend

-1,543

128

199

balance at 31 December 2013

balance at 31 December 2014

The retained profit at year-end 2014 of EUR 71 million represents the proposed final dividend. Total earnings per share for 2014 amounted to EUR 5,669, which was a decline of 31% in relation to 2013. Also see note 14.

Consolidated statement of cash flows NOTE

in EUR mln

2014

2013

1,614

2,327

Operating activities net profit from continuing activities conversion to net cash from operating activities - income from participations

-38

-43

- depreciation and impairment

595

652

- writing off dry wells

102

- change in provisions

172

109

- capitalised financing costs

- change fair value CCIRS - revaluation of borrowings - other financial income and expense

- charged to comprehensive income

- taxes

- charged to comprehensive income

- change in working capital

-5 65

-62

525

760

- inventories

-6

- receivables

153

-68

-386

-59

-19

- other liabilities (excluding loans, debts to credit institutions and profit distribution) - withdrawal from provisions - interest

-6 -72

15 - received - paid

-72

-85

- value added tax

- paid

-57

- corporate tax

- received

- paid

-672

Net cash from operating activities

-841 427

644

2,041

2,971

Investing activities property, plant and equipment

-765

-652

dividend received

Net cash used in investing activities

-727

-609

Financing activities profit distribution loans taken up loans repaid

-1,711

-2,420

249

-473

-365

cash flow at expiration CCIRS

107

change in debts to credit institutions

579

Net cash from financing activities Change in cash and cash equivalents Balance cash and cash equivalents at 1 January Balance cash and cash equivalents at 31 December

-1,249

-2,667

-305

366

126

Notes to the consolidated financial statements (1) General information

payments, amounting to EUR 2,640 million and the Stateâ&#x20AC;&#x2122;s

All amounts in these explanatory notes are in millions of

share of EUR 89 million. The decrease in payments in

euros unless otherwise stated.

2014 resulted from lower sales prices and sales volumes applicable for Groningen. Geological and geophysical (G &

Notes to the consolidated statement of comprehensive income

G) costs comprise the costs of geological, geochemical and geophysical surveys (including seismic studies).

(2) Sales EBN performs one main activity: the exploration for and

The operational costs include EUR 149 million for costs

production of natural gas and oil. All sales are realised in

related to earthquakes in the province of Groningen

the Netherlands. The assets in which EBN participates are

(claims and other costs).

also located in the Netherlands. Information on the main debtors can be found in note 22.

The remaining operational costs mainly concern production and transport costs.

Sales in 2014 from ordinary activities amounted to EUR 6,598 million, which was a decrease of EUR 2,211

Total salary costs as presented under operational costs

million (25%) in relation to 2013.

are as follows:

The decline in sales was caused by both lower gas sales

2014

2013

Gross salaries

Social securities

Pension costs

total

in EUR mln

(17%) and lower prices (13%). Sales prices for gas, oil and condensate were also lower than in 2013.

(3 and 4) Levies and operational costs

in EUR mln

2014

2013

G&G costs

Writing off (unsuccessful wells)

102

Other operational costs

958

841

1,095

917

For more information on EBN's workforce, please refer to the notes of explanation included in the financial statements.

total

As at the balance sheet date, the company did not have any contractual obligations â&#x20AC;&#x201C; other than the possibility of higher contributions in future â&#x20AC;&#x201C; to pay additional amounts

Levies were EUR 1,365 million (33%) lower than in 2013. This item mainly comprises the special payments made to the Dutch State in respect of production from the Groningen field in 2014, i.e. the MOR (yield increase regulations)

in the event of the pension fund being in deficit.

(5) Depreciation and amortisation

The interest rate charges on derivatives were EUR 8 million lower than in 2013, due to the repayment of loans

in EUR mln depreciation of property, plant and equipment impairments

and their refinancing at lower interest rates.

2014

2013

481

450

financial instruments primarily comprises the revaluation

105

related derivatives. In 2014, on balance, this produced a

The balance of the revaluations on derivatives and other results on the non-current borrowings and the directly

depreciation of property, plant and equipment due to decommissioning and restoration

114

total

595

positive result of EUR 10 million in comparison with at loss 652

EUR 6 million in 2013. This is largely due to the developments and mutual effects of the interest rate curves of CHF, JPY, and EUR.

(6) Financial income and expense The other financial income amounts to EUR 6 million 2014

2013

interest income on derivatives

revaluation income on derivatives

other financial income

total financial income

142

114

interest expenses on borrowings

-29

-35

interest expenses on derivatives

-41

-49

-67

revaluation expenses on other financial instruments

-87

interest expenses on discounted provisions

-56

-58

-1

-214

-210

-72

-96

in EUR mln interest income from cash and cash equivalents

revaluation income on other financial instruments

(2013: 5 million) in capitalised borrowing interest. (7) Result for associates

2014

2013

GasTerra B.V.

NOGAT B.V.

in EUR mln

NGT-Extensie total

revaluation expenses on derivatives

other financial expense total other financial expense

net financing costs

(8) Tax

The balance of deferred tax assets and liabilities declined by EUR 17 million as a result of the following changes:

in EUR mln current tax expenses current year adjustment previous year

2014

2013

542

803

-1

in EUR mln

deferred tax liabilities

arising from temporary differences

-17

-42

total

525

760

The effective tax rate was 25% in 2014, which was the same as in 2013. In 2014, the nominal rate for corporate tax in the

2013

-161

-143

-93

-135

-25

-18

-76

-93

110

-186

-161

-25

-18

balance at 1 January deferred tax assets

deferred tax expenses

2014

total movements as a result of: - differences between commercial and fiscal valuation of property, plant and equipment - differences between commercial and fiscal valuation of provisions balance at 31 December

Netherlands was 25% (2013: 25%). of which: - deferred tax assets - deferred tax liabilities

movement in assets movement in liabilities

Deferred tax assets and liabilities include future tax credits and liabilities arising from temporary differences between the amounts calculated in accordance with the commercial principles and those calculated in accordance with fiscal standards. (9) Net profit The net profit for 2014 from continuing operations was EUR 1,614 million, EUR 713 million (31%) lower than for 2013.

Notes to the consolidated balance sheet (10) Property, plant and equipment in EUR mln

TOTAL

PRODUCTION, TRANSPORT AND STORAGE FACILITIES

DRILLING

REIMBURSEMENTS

CAPITALISATION OF DECOMMISSIONING AND STORAGE COSTS

EXPLORATION AND EVALUATION ASSETS UNDER CONSTRUCTION

CAPITAL EXPENDITURE AND WELLS UNDER CONSTRUCTION

balance at 1 January 2013 cost

13,016

6,640

3,330

1,439

1,180

380

depreciation and amortization

9,105

4,969

2,319

1,227

590

carrying amount

3,911

1,671

1,011

212

590

380

652

112

350

- commissioning

-36

-104

- capitalisation of borrowing costs

178

Changes in 2013 cost: - capital expenditure

- capitalisation of decommissioning and storage costs - decommissioning - writing off dry wells

-55

-1

-28

-15

-11

-555

-230

-203

-17

-105

depreciation and amortization: - depreciation and amortization - impairments - decommissioning

-97

128

-96

-50

-3

143

13,796

6,774

3,483

1,453

1,358

108

620

balance at 31 December 2013 costs depreciation and amortization

9,757

5,199

2,522

1,244

695

carrying amount

4,039

1,575

961

209

663

108

523

Changes in 2014 cost: 765

150

111

145

350

- commissioning

- capital expenditure

572

190

-34

-728

- capitalisation of borrowing costs

211

-3

-102

-1

-41

-50

-10

-595

-260

-199

-22

-114

-97

- capitalisation of decommissioning and storage costs - decommissioning - writing off dry wells depreciation and amortization: - depreciation and amortization - impairments - decommissioning

285

364

-13

-285

costs

14,673

7,492

3,743

1,462

1,569

169

238

depreciation and amortization

10,349

5,553

2,721

1,266

809

4,324

1,939

1,022

196

760

169

238

balance at 31 December 2014

carrying amount

At EUR 765 million, capital expenditure in 2014 was

(11) Associates

17% higher than in 2013 (EUR 652 million). Onshore

EBN defines as associates its 40% participation in

investments amounted to EUR 290 million (2013:

GasTerra BV, its 45% participation in NOGAT and the

EUR 275 million). Offshore investments amounted to

12% participation in the NGT-Extensie. In 2014, the four

EUR 475 million (2013: EUR 377 million).

remaining cost companies ceased operations (in 2013: under "other" participations).

In 2014, the increase in the capitalised decommissioning costs amounted to EUR 211 million (2013: EUR 178

Associates are recognised in accordance with the equity

million). For further explanation, please refer to note 15.

method. The profits are distributed annually.

As a result of the application of IAS 23 “Borrowing Costs”, for the Bergermeer project and the Norg gas storage extension project, interest is added to the capitalised amount at 3%, bringing the amount of financing costs capitalised and amortised up to EUR 6 million (2013: EUR 5 million). There was no impairment in 2014 (2013: EUR 97 million).

GASTERRA

in EUR mln

NOGAT

NGTEXTENSIE

2014 TOTAL

GASTERRA

NOGAT

NGTEXTENSIE

2013 TOTAL

balance at 1 January

111

112

profit share

-14

-17

-14

-23

-7

-44

111

NGTEXTENSIE

2013 TOTAL

dividend dissolution cost companies balance at 31 December

-7

-38

-1

110

The following table shows summarised financial information on the GasTerra, NOGAT and NGT-Extensie associates on a 100% basis.

GASTERRA

in EUR mln balance sheet total assets

current

liabilities

current

non-current

NOGAT

NGTEXTENSIE

3,739

3,558

2014 TOTAL 3,787

GASTERRA

NOGAT

3,904

3,964

3,568

3,727

3,732

net sales

19,501

19,635

24,293

24,450

net profit

157

167

(12) Inventories

(14) Shareholder’s equity

2014

2013

materials

balance at 1 January

gas

total profit

condensate and oil

final dividend previous year

total

interim dividend

in EUR mln

balance at 31 December

(13) Receivables

2014

2013

219

200

1,614

2,327

-91

-72

-1,543

-2,236

199

219

Each month EBN pays the (provisional) dividend to the Ministry of Economic Affairs. These periodic payments

in EUR mln

2014

2013

largely determine EBN’s balance sheet structure and result in the relatively low shareholders’ equity. On the

accounts receivable from associates

175

1,109

other trade accounts receivable

810

total trade accounts receivable

985

1,126

997

1,148

other hand, the company has a substantial cash flow throughout the year. In 2014, the authorised, issued and paid up share capital amounted to EUR 128 million (2013:

other receivables and deferred items

EUR 128 million) and comprised 284,750 shares (2013: 284,750 shares), each with a nominal value of EUR 450. The declared interim dividend per share amounted to

total

EUR 5,419 (2013: EUR 7,853). The declared final dividend per share amounted to EUR 320 (2013: EUR 253).

Receivables fell by EUR 151 million (13%), mainly as a result of lower sales volumes in the fourth quarter of

The proposed final dividend of EUR 71 million (2013:

2014 in compared to the fourth quarter of 2013.

EUR 91 million) will be paid out once the General Meeting of Shareholders has adopted the financial statements.

Accounts receivable from associates refer to GasTerra, in

This amount is the balance of the net profit at EUR 1,614

which EBN has a 40% participation.

million and the interim dividend already paid out at

For information on credit risks please refer to note 19.

been deducted from the shareholders’ equity.

EUR 1,543 million. The proposed final dividend has not

(15) Provisions

The increase in the provision for decommissioning and

Provisions for decommissioning and restoration costs

restoration costs at EUR 211 million is primarily caused

cover obligations with terms of 1 to 60 years. Provisions

by amending the discount rate to a real interest rate of

for ground subsidence also cover obligations with terms

0.3% (2013: 0.7%). Additionally, the estimated costs for

of 1 to 60 years. The term of the provision for claims

dismantling and removing installations have been updated

resulting from earthquakes depends on the speed at which

by the increase in the estimated costs and new insight into

claims are submitted and settled.

the dates for ending production.

The provision for decommissioning and restoration costs

The provision for claims ensuing from earthquakes in the

is based on information from the operators and EBN's

province of Groningen is based on the number of reported

own analysis and is determined by estimating the costs

claims and the average costs per claim, based on experi-

on the basis of the current price level, without allowing

ence and historical information.

for inflation, and stated at the present value with a real interest rate level of 0.3% (2013: 0.7%). The equivalent

The increase in the provision for claims as a result of

of the provision stated at the present value is recognised

earthquakes in the province of Groningen is mainly caused

under property, plant and equipment and depresiated on

by the increasing number of claims.

the basis of the UOP method. Nominal interest is added to the provision at 2.7% (2013: 3.15%). The total for provisions will be increased by EUR 324 million, which is the balance of the changes shown below:

in EUR mln balance at 1 January 2013

SUBSIDENCE

EARTHQUAKES

TOTAL

1,873

1,957

withdrawals

-18

-1

-19

revision

178

interest

2,091

100

2,225

112

116

-9

-1

-49

-59

revision

211

interest

2,349

103

2,549

additions

balance at 31 December 2013 additions withdrawals

balance at 31 December 2014

DECOMMISSIONING AND RESTORATION COSTS

(16) Current and non-current borrowings

2014

in EUR mln

2013

TOTAL

OF WHICH CURRENT

TOTAL

OF WHICH CURRENT

1,339

1,494

427

104

commercial paper

358

cash loans

286

2,052

644

1,663

527

debenture loans private loans

total

Total borrowings increased by EUR 389 million (23%).

The cash loans concern deposits GasTerra has placed

That increase is primarily the result of a lower cash flow

with EBN. In 2014, together with Nederlandse Aardolie

from operating activities and higher investment activities

Maatschappij BV (NAM), a Deposit and Loan Facility

in 2014 in relation to 2013. In 2014, long-term deben-

Agreement was entered into with GasTerra. Under this

ture loans with a nominal value of CHF 525 million were

agreement, GasTerra can propose to EBN and NAM

repaid as well as a non-current private loan of JPY 5,000

(as joint parties) placing a sum of money with EBN and

million. Two new debenture loans with a joint nominal

NAM for a period of from 3 days to 3 months as a fixed

value of CHF 300 million were issued. No security has

term deposit. GasTerra can also request a loan from EBN

been provided for the outstanding borrowings with a total

and NAM (as joint parties) for a similar term under this

remaining debt at 2014 year-end of EUR 2,052 million.

agreement.

Clauses are included in the agreements for the debenture and private loans that limit the security that can be demanded.

Non-current borrowings Non-current borrowings, including those borrowings with a due date within one year, are composed as follows:

in EUR mln JPY

2013

5,000 MLN

1.59%

PRIVATE LOAN

2004/2014

CHF

400 MLN

3.00%

DEBENTURE LOAN

2007/2014

325

CHF

125 MLN

3.00%

DEBENTURE LOAN

2007/2014

102

10,000 MLN

1.775%

PRIVATE LOAN

2007/2017

CHF

325 MLN

2.125%

DEBENTURE LOAN

2010/2020

270

265

CHF

125 MLN

2.125%

DEBENTURE LOAN

2010/2020

104

102

CHF

350 MLN

0.75%

DEBENTURE LOAN

2011/2016

291

285

CHF

150 MLN

1.625%

DEBENTURE LOAN

2011/2023

125

122

CHF

235 MLN

0.625%

DEBENTURE LOAN

2012/2019

195

191

CHF

125 MLN

1.125%

DEBENTURE LOAN

2012/2024

104

102

CHF

175 MLN

0.50%

DEBENTURE LOAN

2014/2022

146

CHF

125 MLN

0.875%

DEBENTURE LOAN

2014/2026

104

1,408

1,598

JPY

The principals of these borrowings and the associated

The average interest rate on all non-current borrowings

interest charges have been fully converted into euros

outstanding as at year-end, including the effects of the

by means of cross currency interest rate swaps. This

cross currency interest rate swaps, is 2.15% (2013:

neutralises any currency fluctuation effects on the non-

3.00%). This decrease is the result of repaying, in 2014,

current borrowings, as shown in the table.

borrowings with a higher payable interest rate than the new financing.

2014

All non-current borrowings have fixed interest rates. All

(17) Other non-current liabilities

cross currency interest rate swaps have fixed interest

This mainly concerns a debt of EUR 17 million (2013:

rates, except those associated with the JPY 2007/2017,

17 million) to the State, pursuant to a GasTerra stock

CHF 2014/2022 and CHF 2014/2026 loans. At year-end

dividend, The State is entitled to a share of the dividend

2014, 22% of the financing through the outstanding cross

payable to EBN by GasTerra in the event of GasTerra's

currency interest rate swaps had variable interest rates

liquidation.

The following table lists the outstanding debenture loans

(18) Other current liabilities

and private loans in order of their term to maturity.

This item can be specified as follows:

2014

2013

462

within 1 to 2 years

291

within 2 to 3 years

285

within 3 to 4 years

within 4 to 5 years

195

after 5 years

853

782

1,408

1,598

in EUR mln within 1 year

2014

2013

230

281

levies

367

742

other liabilities

136

172

total

755

1,218

in EUR mln trade accounts payable interest payments

The decrease in levies is mainly due to the lower total

MOR obligation.

More than 74% of the outstanding non-current borrowings have remaining terms to maturity of more than three years. Borrowings with a due date within one year are presented under current liabilities.

Policy to control financial risks in EUR mln

2014

2013

non-current borrowings

1,408

1,136

644

527

2,052

1,663

-126

-61

-70

-105

1,856

1,497

shareholderâ&#x20AC;&#x2122;s equity (B)

199

219

gearing ratio A/(A+B)*100%

90%

87%

(19) Risk management General

current borowings

The main financial risks for EBN are the liquidity risk, the credit risk and the market risk (consisting of interest rate risk and currency risk). EBNâ&#x20AC;&#x2122;s financial policy focuses

total borrowings cash and cash equivalents

on limiting the effects of currency and interest rate fluctuations on assets and liabilities. EBN uses financial derivatives to manage interest and currency risks,

financial derivatives net liabilities (A)

specifically those relating to the funding of its operations. The company does not take any speculative positions with financial derivatives. Capital management EBN aims for continuous good access to the money and capital markets by means of, for example, prudent financing policy aimed at maintaining the short and longterm credit ratings at the highest possible levels. Capital

Liquidity risk

expenditure decisions are evaluated on the basis of the

EBN has a commercial paper programme of EUR 2,000

expected return, allowing for EBNâ&#x20AC;&#x2122;s weighted average

million. This is the same as in 2013. At year-end 2014,

cost of capital.

there was USD 435 million (converted through forward currency contracts to EUR 358 million) outstanding in commercial paper. Year-end 2013: EUR 65 million.

The following table shows the expected annual contract-based cash flows from the repayments and interest payable on the borrowings and the associated derivatives:

2014

in EUR mln

2014

2013

BORROWINGS

INTEREST

PAYMENT AT REDEMPTION

CASH FLOW FROM DERIVATIVES

TOTAL CASH OUT

within 1 year

644

-29

-644

-645

-472

within 1 to 2 years

291

-29

-291

-320

-28

within 2 to 3 years

-22

-69

-83

-319

within 3 to 4 years

-22

-82

within 4 to 5 years

195

-22

-195

-1

-218

-21

after 5 years

853

-44

-853

-837

-803

2,052

-168

-2,052

-2,125

-1,725

2013

2012

total

2013

in EUR mln BORROWINGS

INTEREST

PAYMENT AT REDEMPTION

CASH FLOW FROM DERIVATIVES

TOTAL CASH OUT

527

-42

-527

-472

-365

within 1 to 2 years

-28

-408

within 2 to 3 years

285

-28

-285

-6

-319

-28

within 3 to 4 years

-21

-69

-82

-319

within 4 to 5 years

-21

-82

782

-62

-782

-803

-824

1,663

-202

-1,663

140

-1,725

-2,026

within 1 year

after 5 years total

Credit risk

Swap (CDS) spreads and the market value of the derivatives

The credit risk to which EBN is exposed consists mainly of

for each counterparty. Consequently, on balance, the valua-

the amount it has on deposit at credit institutions, invest-

tion of the derivatives has decreased by EUR 1 million.

ments in money market funds and commercial paper, and the market value of outstanding financial derivatives. EBN

Credit risk on receivables

limits the credit risk by only doing business with financial

In 2014, EBN made 91% (2013: 96%) of its sales (directly

institutions with high creditworthiness and by internally

and indirectly) to GasTerra, for which the credit risk is

setting specific credit limits for each financial institution,

estimated as low (long-term rating Standard & Poor’s AA).

based on the institution in question’s credit rating. For

During 2014, the invoicing of part of the gas revenue was

investments in deposits and commercial paper, the mini-

changed, so this part is now received through the operator

mum is a P-1 Moody’s, an A-1 Standard & Poor’s or an F1

and no longer through GasTerra. The credit risk for the

Fitch short-term rating and a minimum of an A2 Moody’s

operator in question is estimated as low. Receivables from

and an A Standard & Poor’s and Fitch long-term rating.

GasTerra amount to 18% (2013: 97%) of total receivables.

A minimum credit rating of Moody’s Aaa and Standard & Poor’s and Fitch AAA applies for money market funds.

Interest rate risk The goal of EBN’s interest rate risk policy is to limit inter-

If derivative transactions are carried out in the context of

est rate risks arising from the company’s funding and thus

long-term financing, this is only done with a counterparty

achieve minimal net interest charges. A maximum of 60%

with a minimum of A2 Moody’s or A Standard & Poor’s

of the non-current borrowings and financial derivatives

and Fitch long-term rating with which EBN has entered

shall have a variable interest rate in accordance with inter-

into an ‘International Swaps and Derivatives Association’

nal guidelines. At year-end 2014, 22% (2013: 7%) of this

(ISDA) agreement including Credit Support Annex (CSA).

non-current debt position was at a variable interest rate.

EBN did not suffer any credit losses in 2014. For the cross currency interest rate swaps with a nominal

The following analysis of the sensitivity of borrowings and

value of CHF 1,160 million (EUR 965 million), Credit

the related financial derivatives to interest rate move-

Support Annexes (CSAs) have been agreed with the

ments is based on a direct change of 1 percentage point

relevant counterparties. For this, at year-end 2014,

in the interest rates for all currencies and maturities as at

EUR 5 million was provided as collateral to banks (2013:

31 December 2014. All other variables remain unchanged.

EUR 13 million). This collateral is interest-bearing. It is

A reduction of 1 percentage point in interest rates would

presented under cash and cash equivalents and will not

result in an estimated decrease of EUR 28 million in net

be used for commercial purposes.

financing costs, based on the portfolio of financial instruments at 31 December 2014. An increase of 1 percent-

100

The valuation of the derivatives allows for the coun-

age point in interest rates would result in an estimated

terparties credit risk. If the market value of the total of

increase of EUR 26 million in net financing costs.

derivatives per counterparty is positive, then a Credit

The main reason for these effects is that a change in the

Value Adjustment (CVA) is included in the valuation; if it

fair value of derivatives as a result of a change in interest

is negative then a Debt Valuation Adjustment (DVA) is

rate is charged directly to the consolidated statement of

included. These adjustments are based on Credit Default

comprehensive income.

The following table shows the sensitivity of the fair value of the financial instruments to changes in interest rate as at 31 December 2014:

in EUR mln CARRYING AMOUNT

FAIR VALUE

CHANGE IN FAIR VALUE +1%

CHANGE IN FAIR VALUE -1%

cash and cash equivalents

126

receivables

997

current borrowings

-644

other current liabilities

-757

-1,408

-1,489

-86

cross currency swaps positive used for non-current borrowings

-5

cross currency swaps negative used for non-current borrowings

-14

-21

-1,616

-1,697

-58

CARRYING AMOUNT

FAIR VALUE

CHANGE IN FAIR VALUE +1%

CHANGE IN FAIR VALUE -1%

1,148

-527

-540

-5

other current liabilities

-1,263

non-current borrowings

-1,136

-1,168

-68

cross currency swaps positive used for non-current borrowings

154

-7

cross currency swaps negative used for non-current borrowings

-49

-1

-1,612

-1,657

-67

2014

non-current borrowings

forward exchange contracts used for current borrowings total

in EUR mln 2013

cash and cash equivalents receivables current borrowings

total

101

At year-end 2014, sensitivity of financial results to interest

Currency risk

rate changes with regard to the fair value of the financial

EBN fully hedges currency risks arising from sales,

instruments ranged between a negative amount of EUR

purchases and borrowings at the time that the trade

26 million (1 percentage point change in interest rates)

receivables or trade liabilities arise. At year-end 2014,

and a positive amount of EUR 28 million (-1 percentage

there were no currency risks to be hedged (none at

point change in interest rates).

year-end 2013). Currency risks on current borrowings in foreign currencies are hedged with forward exchange contracts. At year-end 2014 USD 435 million worth of forward currency contracts had been concluded relating to current borrowings issued in foreign currencies (year-end 2013: none). Currency risks on non-current borrowings in foreign currency are hedged with cross currency interest rate swaps (see note 16). The analysis shown below of the sensitivity of the net debt (including financial derivatives) to fluctuations in exchange rates against the euro is based on a 10% movement in all exchange rates in relation to the euro compared to their levels at 31 December 2014, with all other variables remaining unchanged. A change of +10% means that the euro weakens in relation to the foreign currency. A change of -10% means that the euro strengthens in relation to the foreign currencies.

102

in EUR mln CARRYING AMOUNT

FAIR VALUE

CHANGE IN FAIR VALUE +10%

CHANGE IN FAIR VALUE -10%

cash and cash equivalents

126

receivables

997

current borrowings

-644

-40

other current liabilities

-757

-1,408

-1,489

-166

136

cross currency swaps positive used for non-current borrowings

-64

cross currency swaps negative used for non-current borrowings

-14

-72

-33

-1,616

-1,697

CARRYING AMOUNT

FAIR VALUE

CHANGE IN FAIR VALUE +10%

CHANGE IN FAIR VALUE -10%

1,148

-527

-540

-53

other current liabilities

-1,263

non-current borrowings

-1,136

-1,168

-130

106

cross currency swaps positive used for non-current borrowings

154

-78

cross currency swaps negative used for non-current borrowings

-49

-71

-1,612

-1,657

2014

non-current borrowings

forward exchange contracts used for current borrowings total

in EUR mln 2013

cash and cash equivalents receivables current borrowings

total

103

Fair value of financial instruments The table below summarises the carrying amounts and estimated fair values of financial instruments:

31 DECEMBER 2014

in EUR mln

31 DECEMBER 2013

CARRYING AMOUNT

FAIR VALUE

CARRYING AMOUNT

FAIR VALUE

current receivables

997

1,148

financial derivatives

154

126

listed non-current borrowings

1,339

1,417

1,067

1,095

other non-current borrowings

listed current borrowings

427

440

other current borrowings

644

100

757

1,263

assets

cash and cash equivalents

liabilities

financial derivatives other current liabilities

Fair values of listed non-current borrowings are based

Current receivables, cash and cash equivalents and short-

on published rate (level 1 according to IFRS), while the

term debts are recognised at their carrying amounts. In

other fair values are calculated on the basis of the market

view of the short term to maturity of these instruments,

information available (level 2 according to IFRS). All

these amounts approximate their fair values.

financial assets and liabilities at fair values with changes in value recognised in comprehensive income of profit are classified at level 2. The system for valuing derivatives is assessed annually. This was not done in 2014.

104

The following table summarises the carrying amounts of financial derivatives, specified according to type and objective:

ASSETS

LIABILITIES

TOTAL

154

-49

105

154

-49

105

cross currency interest rate swaps

-14

forward currency contracts

total financial derivatives in relation to borrowings at 31 December 2014

-14

in EUR mln cross currency interest rate swaps forward currency contracts total financial derivatives in relation to borrowings at 31 December 2013

105

Other notes

The Minister of Economic Affairs has promised that a total amount of EUR 1.2 billion will be made available for

(20) Contingencies

the 2014 - 2018 period. A provision has been included

As indicated in the accounting principles with respect to

for claims ensuing from earthquakes (see note 15). The

the valuation of assets and liabilities and the determi-

execution and costs of some of these measures cannot yet

nation of the profit, EBN participates in numerous joint

be reliably estimated and could therefore prove higher.

operations. The basis for these joint operations is laid

Pursuant to its participation in the Groningen licence,

down in agreements of cooperation, from which multi-year

EBN will contribute 40% of these costs.

financial rights and obligations arise. The investment obligations at year-end 2014 projects amount to

(21) Notes on the statement of cash flows

EUR 523 million and the majority of these obligations

The statement of cash flows was prepared on the basis of

has a duration shorter than 1 year. At year-end 2013,

the indirect method with a comparison made between the

the obligation amounted to 535 million.

opening and closing balances. Movements not resulting in an inflow or outflow of cash were subsequently eliminated.

Furthermore, as at 31 December 2014, EBNâ&#x20AC;&#x2122;s (in)direct

Information on movements in the statement of cash flows

share in proven and probable gas reserves in fields in

can largely be derived from the statements of movements

which EBN participates amounted to 358 billion Nm GE

in the relevant balance sheet items.

(2013: 378 billion Nm GE). 3

(22) Associated parties As is usual in the industry, the pricing of sales contracts is

GasTerra and EBN are associated parties. EBN has 78

constantly renegotiated through, for example, the associ-

(2013: 76) gas sales contracts with GasTerra.

ate GasTerra. The results of these negotiations can have a significant positive or negative impact on EBN's results.

During 2014, the invoicing of part of the gas revenue was changed, so this part is now received through the operator

As a consequence of the Cabinet decision of 17 January

and no longer through GasTerra. Of the net sales of

2014 regarding gas production in Groningen and the

EUR 6,598 million, EUR 3,978 million was achieved

earthquakes caused hereby, future obligations have been

through GasTerra (2013: EUR 8,809 million and EUR

created. These obligations primarily concern damage

8,345 million respectively). The receivables in 2014

repair, preventive reinforcement of buildings and compen-

include an amount of EUR 175 million (2013: EUR 1,109

sation measures to improve the safety and liveability of

million) for supplies to GasTerra.

the earthquake area.

106

Together with Nederlandse Aardolie Maatschappij

The gross remuneration of the supervisory directors can

BV (NAM), EBN has entered into a Deposit and Loan

be specified as follows:

Facility Agreement with GasTerra. Under this agreement, GasTerra can propose to EBN and NAM (as joint parties)

in EUR

2014

2013

placing a sum of money with EBN and NAM for a period of from 3 days to 3 months as a fixed term deposit. GasTerra can also request a loan from EBN and NAM (as joint par-

H.M.C.M. van Oorschot

whole year

25,619

26,818

A.H.P. Gratama van Andel

whole year

22,264

R.G.M. Zwitserloot

from 18 April 2013 until 16 April 2015

22,264

16,698

G.J. Kramer

until 16 April 2014

6,555

22,264

R.M.J. van der Meer

until 18 April 2013

9,445

J.W. Weck

from 23 February 2015

76,702

97,489

ties) for a similar term under this agreement. For further information, please refer to note 16. The Dutch State, being the shareholder, can be regarded as an associated party. All levies, corporation taxes and net profits are paid to the State. More information can be found in notes 14 and 18 in these financial statements. total

(23) Key management The total charge for remuneration, pensions and other

The above remuneration does not include the employer's

salary costs of the key management (4 members of the

share of social premium and tax amounting to EUR 9,957

team of Directors and 4 supervisory directors) amounted

(2013: EUR 12,841).

to EUR 1.2 million in 2014 (2013: EUR 1.2 million; 4 members of the team of Directors and 4 supervisory directors).

(24) Events after the balance sheet date

The total salary costs of the executive board can be

There were no material events after the balance sheet

specified as follows:

date requiring further disclosure.

in EUR regular remunerations post-employent benefits total

2014

2013

1.096.895

1.110.986

134.365

1.096,895

1.245.351

Executive board

Supervisory Board

J.D. Bokhoven

H.M.C.M. van Oorschot

A.H.P. Gratama van Andel

J.W. Weck

The amounts above include variable remunerations were, until 2013, recognised in the year they were becoming definitive. As of 2014, they are recognised in the year to which the labour performance is related to. The comparative figures have been restated accordingly.

107

Company profit and loss account

2014

2013

other income after tax

1,572

2,275

net profit

1,614

2,327

other comprehensive income

total comprehensive income

1,614

2,327

in EUR mln income from participations

108

Company balance sheet

in EUR mln ASSETS

NOTE

YEAR-END 2014

YEAR-END 2013

non-current assets

YEAR-END 2014

YEAR-END 2013

128

199

219

2,500

2,209

borrowings

1,408

1,136

other

4,003

3,455

644

527

LIABILITIES

shareholderâ&#x20AC;&#x2122;s equity

property, plant and equipment

4,035

3,845

associates

344

226

4,379

4,071

NOTE

share capital retained earnings

non-current liabilities provisions deferred tax liabilities

current assets

current liabilities

inventories

receivables

981

1,148

154

125

1,208

1,360

5,587

5,431

tax derivatives cash and cash equivalents

total

borrowings

tax trade accounts payable

230

281

other

495

855

derivatives

1,385

1,757

5,587

5,431

total

109

Notes to the company financial statements General

The separate profit and loss account has been formulated

EBNâ&#x20AC;&#x2122;s separate financial statements are prepared in

in accordance with the limitations permitted pursuant to

accordance with the principles for financial reporting

article 2:402 of the Dutch Civil Code.

generally accepted in the Netherlands and the legal stipulations regarding the financial statements as defined

The capital contribution in 2013 concerns the contriÂ

in Part 9, Book 2 of the Dutch Civil Code.

bution from the Bergermeer gas storage to EBN Capital. The loans extended have been used for the investments in

For the determination of the accounting principles applied

the Bergermeer gas storage.

for valuing assets and liabilities and the determination Other notes

of the results of the separate financial statements, use has been made of the option presented in article 2:362,

The associates in the separate balance sheet include the

paragraph 8 of the Dutch Civil Code. The principles for

valuation of the 100% participation EBN Capital B.V., which

the valuation of assets and liabilities and determining the

is consolidated in the consolidated financial statements.

result of the separate financial statements are therefore

The differences in the other items between the consoli-

the same as those used in the consolidated financial state-

dated and separate financial statements mainly concern

ments. Participations where any significant influence is

the balance sheet positions of EBN Capital. The primary

exerted on the commercial and financial policy are valued

balance sheet positions within EBN Capital are property,

on the basis of the net asset value.

plant and equipment (EUR 290 million) and the provision for decommissioning and restoration costs (EUR 49 million).

The consolidated financial statements have been formulated in accordance with the Financial Reporting

In view of the minimal differences between the other

Standards (IFRS) as accepted within the European Union

balance sheet items shown in the consolidated and separate

(EU-IFRS) and with article 2:9 of the Dutch Civil Code.

financial statements, for further information on these

For a description of the principles applied, please refer to

items please refer to the notes to the consolidated financial

pages 78 to 83.

statements, which can be found on pages 88 to 107.

(11) Associates 2014

in EUR mln ASSOCIATES

LOANS

TOTAL

ASSOCIATES

LOANS

TOTAL

176

226

119

capital contribution

extended loan

120

dividend

-44

-53

balance at 31 December

174

170

344

176

226

balance at 1 January

profit share

110

2013

Securities

The amounts included in the table above are excluding

EBN has issued a liability statement for EBN Capital in

crisis levy. The total crisis levy charged to the result for

compliance with article 2:403 of the Dutch Civil Code.

2014 amounts to EUR 40,000 (2013: EUR 52,000), of which EUR 30,000 (2013: EUR 23,000) relates to the

Fiscal unity

remuneration of the aforementioned CEO.

EBN forms a fiscal unity with EBN Capital for the purposes of corporation tax and value added tax. EBN and its subsidi-

In 2014 remuneration paid to the Supervisory Board

ary together form a fiscal unity and are jointly and severally

members amounted to EUR 0.1 million (2013: EUR 0.1

responsible for the taxes payable by the fiscal unity.

million). See note 23 for further details about the remuneration of the individual supervisory directors.

Fees paid to external auditors For 2014, the fees paid to Ernst & Young, which are

Utrecht, 23 June 2015

included in the operational costs, amount to EUR 976,000 for audit services (statutory and joint venture audits)

Executive board

Supervisory Board

(2013: EUR 667,000) and EUR 134,000 for other services

J.D. Bokhoven

H.M.C.M. van Oorschot

(2013: EUR 343,000).

A.H.P. Gratama van Andel

J.W. Weck

Directors' remuneration The remuneration of the company’s CEO,

Other details

Jan Dirk Bokhoven, is as follows:

2014

2013

regular remunerations

272.424

267.540

variable remunerations

56.414

84.816

pension

77.108

95.392

in EUR

Profit appropriation Profit appropriation takes place in accordance with what is defined in article 21 of the company’s articles of association. To the shareholder: • part of the profit will be distributed annually as

total

405.946

447.748

a special profit distribution; • the remainder of the profit will be distributed as a dividend.

The variable remunerations were, until 2013, recognised

Events after the balance sheet date

in the year they were becoming definitive. As of 2014,

For more information, please refer to note 24 of these

they are recognised in the year to which the labour perfor-

financial statements.

mance is related to, The comparative figures have been restated accordingly.

111

Independent auditor’s report To: the Shareholder of EBN B.V.

executive board is responsible for such internal control as it determines is necessary to enable the preparation of the

Report on the financial statements

financial statements that are free from material misstate-

We have audited the accompanying financial statements

ment, whether due to fraud or error.

2014 of EBN B.V., Utrecht. The financial statements include the consolidated financial statements and the

Auditor's responsibility

company financial statements. The consolidated financial

Our responsibility is to express an opinion on these

statements comprise the consolidated balance sheet as

financial statements based on our audit. We conducted

at 31 December 2014, the consolidated statement of

our audit in accordance with Dutch law, including the

comprehensive income, the consolidated statement of

Dutch Standards on Auditing. This requires that we com-

changes in shareholder’s equity and the consolidated

ply with ethical requirements and plan and perform the

statement of cash flows for the year then ended, and the

audit to obtain reasonable assurance about whether the

notes, comprising a summary of the significant accounting

financial statements are free from material misstatement.

policies and other explanatory information. The company financial statements comprise the company balance sheet

An audit involves performing procedures to obtain audit

as at 31 December 2014, the company profit and loss

evidence about the amounts and disclosures in the

account for the year then ended and the notes, comprising

financial statements. The procedures selected depend on

a summary of the accounting policies and other explana-

the auditor’s judgment, including the assessment of the

tory information.

risks of material misstatement of the financial statements, whether due to fraud or error.

Executive board’s responsibility

112

The executive board is responsible for the preparation

In making those risk assessments, the auditor considers

and fair presentation of these financial statements in

internal control relevant to the entity’s preparation and

accordance with International Financial Reporting Stand-

fair presentation of the financial statements in order

ards as adopted by the European Union and with Part 9 of

to design audit procedures that are appropriate in the

Book 2 of the Dutch Civil Code, and for the preparation

circumstances, but not for the purpose of expressing

of the report by the executive board in accordance with

an opinion on the effectiveness of the entity’s internal

Part 9 of Book 2 of the Dutch Civil Code. Furthermore the

control. An audit also includes evaluating the appropriate-

ness of accounting policies used and the reasonableness

Report on other legal and regulatory requirements

of accounting estimates made by the executive board, as

Pursuant to the legal requirement under section 2:393

well as evaluating the overall presentation of the financial

sub 5 at e and f of the Dutch Civil Code, we have no

statements.

deficiencies to report as a result of our examination whether the report by the executive board, to the extent

We believe that the audit evidence we have obtained is

we can assess, has been prepared in accordance with

sufficient and appropriate to provide a basis for our audit

Part 9 of Book 2 of this Code, and whether the infor足

opinion.

mation as required under section 2:392 sub 1 at b-h has been annexed. Further we report that the report of the

Opinion with respect to the

executive board, to the extent we can assess, is consistent

consolidated financial statements

with the financial statements as required by section

In our opinion, the consolidated financial statements give

2:391 sub 4 of the Dutch Civil Code.

a true and fair view of the financial position of EBN B.V. as at 31 December 2014 and of its result and its cash flows for the year then ended in accordance with International

Amsterdam, 23 June 2015

Financial Reporting Standards as adopted by the European Union and with Part 9 of Book 2 of the Dutch Civil Code.

Ernst & Young Accountants LLP Signed by J.J. Vernooij

Opinion with respect to the company financial statements In our opinion, the company financial statements give a true and fair view of the financial position of EBN B.V. as at 31 December 2014 and of its result for the year then ended in accordance with Part 9 of Book 2 of the Dutch Civil Code.

113

Independent assurance-report To: the shareholder of EBN B.V.

Furthermore the executive board is responsible for such internal control as it determines is necessary to enable

We have reviewed the non-financial information in the

the preparation of the Report that is free from material

sections Preview, About EBN and Report of the executive

misstatement, whether due to fraud or error.

board part of the 2014 annual report (hereinafter: the Report) of EBN B.V. in Utrecht (hereinafter: EBN). The

Auditorâ&#x20AC;&#x2122;s responsibility

report comprises a description of the policy, the activities,

Our responsibility is to express a conclusion on the Report

events and performance of EBN relating to sustainable

based on our review. We conducted our review in accord-

development during 2014.

ance with Dutch law, including Dutch Standard 3810N Assurance Engagements relating to Sustainability Reports.

Limitations in our scope

This requires that we comply with ethical requirements

The Report contains prospective information, such as

and that we plan and perform the review to obtain limited

ambitions, strategy, targets, expectations and projections.

assurance about whether the Report is free from material

Inherent to this information is that actual future results

misstatement.

may be different from the prospective information and therefore may be uncertain. We do not provide any assur-

A review is focused on obtaining limited assurance. The

ance on the assumptions and feasibility of this prospective

procedures performed in obtaining limited assurance are

information.

aimed on the plausibility of information which does not require exhaustive gathering of evidence as in engage-

References in the Report (to www.ebn.nl, external

ments focused on reasonable assurance. The performed

websites and other documents) are outside the scope

procedures consisted primarily of making inquiries of

of our assurance engagement.

management and others within the entity, as appropriate,

Executive boardâ&#x20AC;&#x2122;s responsibility

as included in the Report and evaluating the evidence

The executive board of EBN is responsible for the

obtained. Consequently a review engagement provides

preparation of the Report in accordance with the

less assurance than an audit.

Sustainability Reporting Guidelines G4 (option Core) of

â&#x20AC;&#x192;

applying analytical procedures regarding the information

the Global Reporting Initiative (GRI) and the reporting criteria developed by EBN, including the identification of the stakeholders and the determination of material issues. The disclosures made by the executive board with respect to the scope of the Report and the reporting criteria are included in the section About this report.

114

Procedures performed

Conclusion

Our main procedures included the following:

Based on our procedures performed, and with due

• Performing an external environment analysis and

consideration of the limitations described in the para-

obtaining an understanding of the sector, relevant

graph Limitations in our scope, nothing has come to our

social issues, relevant laws and regulations and the

attention that causes us to conclude that the non-financial

characteristics of the organization.

information in the sections Preview, About EBN and

• Evaluating the acceptability of the reporting policies

Report of the executive board part of the 2014 annual

and their consistent application, such as assessment

report of EBN B.V., in all material respects, does not pro-

of the outcomes of the stakeholder dialogue and the

vide a reliable and appropriate presentation of the policy

reasonableness of accounting estimates made by

of EBN for sustainable development, or of the activities,

management. • Evaluating the application level in accordance with

events and performance of the organization relating to sustainable development during 2014, in accordance

the Sustainability Reporting Guidelines G4 (option

with the Sustainability Reporting Guidelines G4 (option

Core) of GRI.

Core) of GRI and reporting criteria developed by EBN

• Evaluating the design and implementation of the sys-

as disclosed in the section About this report.

tems and processes for data gathering and processing of information as presented in the Report. • Interviewing management (or relevant staff) responsi-

Rotterdam, 23 June 2015

ble for the sustainability strategy and policies. • Interviews with relevant staff responsible for providing

Ernst & Young Accountants LLP

the information in the Report, carrying out internal control procedures on the data and the consolidation

H. Hollander

J.J. Vernooij

of the data in the Report.

Subject matter expert

External auditor

• Evaluating internal and external documentation, in addition to interviews, to determine whether the information in the Report is reliable. • Analytical review of data and trend explanations submitted for consolidation in the Report. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion.

115

10 years EBN

IFRS 2014

IFRS 2013

IFRS 2012

IFRS 2011

IFRS 2010

IFRS 2009

IFRS 2008

IFRS 2007

IFRS 2006

IFRS 2005

2005

- production licences onshore

- production licences offshore

107

106

101

103

100

in EUR mln number of EBN participations in joint ventures:

- production licences

sales (bln m³, 100%)

-17

-10

-5

-3

-1

-7

- sales Groningen (bln m³, EBN share)

- sales small fields (bln m³, EBN share)

total sales (bln m³, EBN share)

22.23

25.52

26.76

22.63

18.58

20.72

26.91

20.67

21.52

16.46

6,598

8,809

8,528

7,103

6,486

6,387

8,698

6,090

6,264

4,883

3,384

6,598

8,809

8,528

7,103

6,486

6,387

8,698

6,090

6,264

8,267

-25

-27

-3

1,614

2,327

2,360

2,131

2,076

2,211

3,269

2,367

2,378

1,673

1,637

2,154

change in % compared to previous year (100%)

average selling price of gas (€-cents per m³, 35,17 MJ/m³) sales from: - continuing operations - discontinued operations total sales

change from continuing operations in % compared to previous year

net profit from: - continuing operations - discontinued operations total net profit

1,614

2,327

2,360

2,131

2,076

2,211

3,269

2,367

2,378

3,827

3,791

- capital expenditure onshore

290

275

202

228

224

238

129

277

146

121

- capital expenditure offshore

475

377

419

383

475

447

405

478

446

- decommissioning and restoration

211

178

-126

675

-163

137

273

149

total capital expenditure

976

830

495

1,286

664

550

669

819

896

716

567

depreciation and amortization

595

652

745

617

499

462

501

494

403

374

376

shareholders’ equity

199

219

200

204

174

158

160

162

290

237

437

5,462

5,309

5,565

5,684

5,146

4,520

5,386

4,664

3,902

3,437

2,977

net profit from continuing operations in % of sales

property, plant and equipment:

gearing ratio (%) outside capital

116

117

Glossary CCS

Carbon capture and storage.

Cluster

Location from which multiple wells can be drilled.

Corporate Governance Code (old)

Code of Conduct for Companies listed on the stock exchange.

Corporate Governance Code (new) The Dutch Corporate Governance Code of the Corporate Governance Code Monitoring Committee. COSO

The Committee of Sponsoring Organizations of the Treadway Commission.

CSR

Corporate Social Responsibility.

Cushion gas

Gas that has to be present in a field or storage facility to maintain the pressure.

Dashboard

Review of company-specific performance indicators.

Dinantian

The oldest carbon age.

Energy mix

Proportion of energy used in the Netherlands from different sources of energy.

End-of-field life

Gas or oil field in the final phase of production.

E&P

Exploration and production.

Ministry of Economic Affairs.

Fallow Acreage Convenant

Covenant, signed on 31 August 2010, for stimulating the exploration for and production of oil and gas reserves and the storage of minerals in the Dutch part of the continental shelf, as agreed between the Minister of Economic Affairs, Agriculture and Innovation and mining companies with operations on the continental shelf.

Fracking

Technique by which fluid is injected under high pressure into stone containing gas, â&#x20AC;&#x2DC;breakingâ&#x20AC;&#x2122; the stone so the gas can be extracted.

Fuel mix

Percentage of each fuel source in the total fuels used to generate energy.

Gas deposit

Subsurface accumulation of producible gas.

Gasgebouw

Public-private cooperation in the Groningen Partnership and GasTerra.

Gas Hub

European gas-market centre.

Gas Hub Discussion Platform Discussion forum of the Dutch government, the gas industry and knowledge infrastructure organisations to discuss new initiatives and strategic issues concerning the physical national and international gas-hub infrastructure. GE

Groningen equivalent (Nm3 gas with a combustion value of 35.17 MJ at 0 degrees Celsius and 101.325 kPa).

118

Geothermal energy

Thermal energy generated and stored in the Earth.

Human Resources.

ICT

Information and Communication Technologies.

IFRIC

International Financial Reporting Interpretations Committee.

IFRS

International Financial Reporting Standards.

IMS

Integral Management System.

JIP

Joint Industry Project.

LNG

Liquefied natural gas.

Maatschap Groningen

Joint venture for managing the production of the Groningen field.

Mining Act Dutch Act containing regulations governing the exploration for and production and storage of minerals. NAM

Nederlandse Aardolie Maatschappij (Dutch oil company in which Royal Dutch Shell and Exxon Mobil have equal shares).

Near-field exploration

Exploration for gas close to existing production locations.

Normal cubic metre â&#x20AC;&#x201C; standardized volume unit for measuring natural gas.

NOGEPA

Netherlands Oil and Gas Exploration and Production Association.

NOV management

Non-operated venture management.

Operating partner

See operator.

Operator

Party in the production process that carries out production activities on

behalf of the partners. Permeability The degree to which a solid substance can be pervaded by other substances. PRMS Petroleum Resources Management System: international classification system describing the status and volumes of oil and gas resources. ROAD

Rotterdam Storage and Capture Demonstration Project.

Scorecard

Review of department-specific performance indicators.

Shale gas Gas held in tight reservoirs in shales that have insufficient permeability for the gas to flow easily to the well bore. Shallow gas

Gas produced from relatively shallow reservoirs (< 800 meter depth, mostly unconsolidated).

SodM

State Supervision of Mines.

Spot market Public financial market, in which surpluses are traded and shortages made up for immediate delivery and payment in the very short term. State participation

Shareholder status of the Dutch State.

Stranded reserves or fields

Natural gas deposits that are technically or economically impractical to develop and produce at a particular time.

Tight gas

Gas produced from tight reservoirs in sandstones that have insufficient permeability for the gas to flow easily to the well bore.

TNO

Netherlands Organisation for Applied Science TNO.

Treasury

Management of a companyâ&#x20AC;&#x2122;s cash and cash equivalents.

Trias The Trias is a geological period that lasted from ca. 252.2 to 201.3 million years ago. Zechstein The Zechstein or the Zechstein Group is a unit of rock layers in the substratum of large parts of Western and Central Europe.

119

Contact information Did our annual report give you interesting thoughts, raise questions or give inspiration? You can always contact us to ask questions or to exchange views. Visiting and postal address EBN B.V. Daalsesingel 1 3511 SV Utrecht The Netherlands Telephone: +31 (0)30 2339001 Fax:

+31 (0)30 2339051

E-mail:

ebn.mail@ebn.nl

Production EBN Communicatie & Public Affairs in samenwerking met Bondt Communicatie, Breda Design and layout Made in Haarlem, Haarlem a-design, Sassenheim Photography Karen Steenwinkel, Haarlem Rob van Wieringen, Haarlem English translation Textware, Utrecht

120