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COMMUNITY MATTERS special edition SEPTEMBER 2013

www.nexeninc.com/cmse


Nexen Energy ULC is an upstream oil and gas company responsibly developing energy resources in some of the world’s most significant basins – including the UK North Sea, offshore West Africa, the United States and Western Canada. As a wholly-owned subsidiary of CNOOC Limited, Nexen has three principal businesses: conventional oil and gas, oil sands and shale gas. Message to Our Neighbours

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Environment

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Wildlife

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Safety & Emergency Response

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Community

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Responsible Care®

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Awards & Recognition

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MESSAGE TO OUR NEIGHBOURS

Nexen Energy ULC is an upstream oil and gas company responsibly developing energy resources in the UK North Sea, offshore West Africa, the United States and Western Canada. We have a long and distinguished track record of responsible and sustainable resource development. And while the ownership of our company recently changed, our values, culture and principle-based approach to business remains unaltered. In fact, as a wholly-owned subsidiary of CNOOC Limited, one of the largest

exploration and production companies in the world, we are in a better position than ever to invest in our employees, the communities near our operations, and the technologies that help make energy development both economically and environmentally sustainable. In other words, to do business the Nexen Way. This special edition of the Community Matters is a collection of stories that showcase the creativity, insight and resourcefulness of Nexen employees who come to work each day and make a difference.

Operating under the banner of Responsible Care速, we conduct our operations in a safe, sustainable and environmentally responsible manner and work closely with government agencies and local stakeholders to ensure information related to our operations is communicated in a timely manner. We will continue to meet these expectations to ensure the safety of employees, contractors and the public remains a top priority.

NEXEN AT A GLANCE YUKON

UK NORTH SEA WESTERN CANADA

POLAND

NORTHEAST B.C. CANADA

TRINIDAD & TOBAGO

MAINLAND U.S. U.S. GULF OF MEXICO

YEMEN

OFFSHORE WEST AFRICA

COLOMBIA

Conventional NEXEN IS

AN UPSTREAM OIL & GAS COMPANY

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Shale Gas/Oil

HEAD OFFICE

CALGARY, ALBERTA, CANADA www.nexeninc.com

Oil Sands 2012 PRODUCTION

198,000 MBOE/D BEFORE ROYALTIES


AT NEXEN, RESPONSIBLE DEVELOPMENT IS THE WAY WE SUPPLY THE ENERGY THAT FUELS PEOPLE’S LIVES TODAY, WITHOUT COMPROMISING THE WELL-BEING OF FUTURE GENERATIONS It is our road map for producing clean, secure and affordable energy and respecting the environment, our people and our communities. Through this publication, we intend to highlight Canada Gas Operations (including Shale Gas) and aim to demonstrate this division’s commitment to sustainability.

Blaine Sebry

A sustainable company is a safe and profitable business that not only meets regulatory requirements, but strives to meet societal and stakeholder expectations. The company develops and operates with a built-in continuous improvement approach that maximizes

value to shareholders, while ensuring the company meets the increased stakeholder expectations and challenges of the future. Responsible Care®, an initiative that was first practiced within the chemical industry, has allowed Nexen Canada Gas to become a leader in sustainability and over the years we have come to greatly appreciate what the initiative has done for our business.

General Manager Canada Production Operations

NEXEN’S WAY: OUR VALUES Nexen’s business has expanded and our ownership has changed, but the way we conduct our business remains the same. Protecting people and the environment We each play a role in protecting the safety and well-being of ourselves, our co-workers and the communities and environment in which we work.

Commitment to excellence

Accountability

We drive for, and reward, high performance. We are passionate about delivering results and innovative in overcoming obstacles.

We each know our responsibilities and are accountable for our decisions, behaviour and actions. We measure our results to validate our individual and shared ownership of Nexen’s successes and shortcomings.

Integrity

Courage

We conduct business in an ethical manner and build relationships based on collaboration, honesty and respect.

We’re not afraid to break from the pack. We have the confidence to speak up and make difficult decisions. We take informed risks based on facts to create value responsibly.

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ENVIRONMENT At Nexen, responsible energy development means understanding and actively managing environmental factors associated with resource development. We apply technology and innovation to improve operating efficiencies and minimize our impact on land, air and water. We also work cooperatively and constructively with industry peers, governments, Aboriginal and local community leaders, and various stakeholder groups to bring about outcomes that reduce environmental impacts. MANAGING WATER IN HORN RIVER

A small boat is used to deploy Acoustic Doppler technology, a device which measures stream flow.

Protecting water quality and quantity is a shared responsibility that Nexen takes very seriously. Since 2009, Nexen has invested substantial resources, including installing a multi-million dollar water monitoring network, to monitor the quality and quantity of surface water in northeastern British Columbia (NEBC), Canada. Monitoring surface water will assist Nexen in developing a site-specific understanding of the natural range of variability observed in the lakes and rivers near our potential operating areas.

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Nexen’s water management approach in NEBC is to draw and store water during specific times of high water flow, such as spring snow melt runoff (or spring surges). The water is then stored for use in well development operations (e.g., hydraulic fracturing) during the late summer and fall, which are typically periods of lower water availability. Borrow pits created during the construction of well pads, access roads, and plant sites support our water management approach by providing a

system of water storage sites closely associated with our well pads. This “big picture” approach to water management is enabling Nexen to balance the region’s natural flow patterns with our shale gas operations. We are upholding our commitment to transparency by working with regulators to provide weekly water monitoring and withdrawal reports along with raw hydrometric data from the Tsea River watershed.


RECYCLING IN BALZAC As the Balzac Abandonment & Reclamation (BAR) field team began planning the demolition of the south Crossfield flowline, we realized there was a considerable amount of glycol in this small part of the field. Ethylene glycol is an organic compound widely used as automotive antifreeze. The BAR team decided to take a closer

look at the entire field and estimated there would be enough glycol to fill 5,600 oil barrels (approximately 900 m3) when the tracer systems and all well sites were combined. After discussing the situation, we realized this would be a major issue, not only because of the amount of glycol but also because of the increased recycling demands due to the number of gas plants expected to shut

down in the near future. One option was to dispose of the product down hole, but the team felt there may be more Responsible CareÂŽ options to consider. We decided the right thing to do was to recycle the product and began to research various recycling vendors in the province.

PROCESSING DRILLING WASTE WHILE MINIMIZING ENVIRONMENTAL IMPACT In the past few years, Nexen has placed a strong emphasis on utilizing centrifuges, equipment that removes fine and ultrafine solids from water, to process drilling waste from core, observation and water wells. The alternative to the centrifuge process is the use of sump sites; however, the terrain and lack of suitable soil for the sites proved to be a challenge for Nexen’s Oil Sands Exploration (OSE) programs. It was also recognized early on that sumps would obstruct the development of infrastructure associated with future facilities. Additionally, the uncertainties of regulation changes were strong indicators that sumps were not a desirable disposal method for drilling waste. The drilling waste process through centrifuges results in 30% of the product coming out as solids and 70% coming out as clear water by-products. The water by-product is recycled as drilling fluids, when possible, and the solid waste is transported to a nearby Class II Landfill to avoid any conflict with facilities at a later date. By utilizing a centrifuge facility rather than sump sites, it is estimated that Nexen has conserved approximately 80 hectares of prime development land. In future programs, there will be stronger emphasis placed on utilizing the majority of the water byproduct for steam generation, turning 70% of drilling waste into a recyclable product.

MAKING USE OF SOLAR ENERGY As a responsible energy developer, Nexen understands the importance of investing in energy-efficient technologies. This allows us to costeffectively increase our production while minimizing our environmental footprint. Solar injection systems are used at our Medicine Hat well sites to eliminate costly and harmful methane emissions. Methane is released when traditional chemical injection pumps are used on the wells. The systems help Nexen reduce its footprint on the fragile grasslands by bypassing the need for trucks to drive onto the area to perform production cleanouts, which are imperative with chemical injection pumps. A Nexen operator monitors a solar injection system at one of our sites in Medicine Hat.

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WILDLIFE Nexen operations share habitat with a variety of key species that contribute to ecosystem biodiversity – from bears to migratory birds to plants. The more we understand the environment in which we conduct our operations, the more we are able to adjust our activities and minimize disturbances. Both independently and in partnership with industry peers, governments, universities and other organizations, Nexen invests in research, monitoring and conservation activities that protect the healthy ecosystems that support biodiversity. RESEARCHING HABITAT AND SURVIVAL OF FERRUGINOUS HAWKS

A young ferruginous hawk has just been banded with a radio transmitter, which allows the University of Alberta to track and evaluate the hawk’s habitat selection and survival after it leaves the nest (Source: University of Alberta, Department of Biological Sciences).

In 2011, Nexen funded ferruginous hawk research completed by the Biological Sciences Centre at the University of Alberta. This research grant gave the centre the ability to collect important data, in Alberta and Saskatchewan, and allowed them to learn more about this species at risk. From 2011 to 2012, Nexen loaned the centre 18 post guards that were used to protect their digital video equipment from cattle. The video data is used to study hawk behaviour, including their responses to human and

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environmental disturbances, the number of food deliveries to nestlings and sources of nest failures such as weather or predators. The footage allowed the centre to determine that: •

on average, most ferruginous hawks deliver five prey items a day to their nest (mostly Richardson’s ground squirrels - aka gophers) and

• one nest in Saskatchewan was very active and averaged 14 prey per day.

Ferruginous hawks are a species at risk and are the largest of the hawk family in North America. They use the arid grassland regions of Southern Alberta as their main habitat and are found in uncultivated pastureland or prairie. Nexen has approximately 2,400 well sites in southeast Alberta and southwest Saskatchewan. Given the number of Nexen well sites that fall within this species’ nesting area, we can only benefit from on-going research at the Biological Science Centre.


SUPPORTING WILDLIFE PROTECTION

Ray Rowland, Manager of Special Projects Field, at Balzac, with a hawk that was brought in by the AIWC.

Nexen donated $70,000 to the Alberta Institute for Wildlife Conservation (AIWC) to support the protection of bird species and other wildlife. The investment to the institute is part of Nexen’s Balzac Heritage Project. The donation is to be used towards housing, rehabilitation and equipment purchase to provide care to a variety of species including bald eagles, hawks, great horned owls, red fox and beavers. Having operated a sour gas processing plant in Balzac for 50 years, our focus is to find community investment opportunities that will further

strengthen the ties Nexen has with Rocky View County. The plant stopped production in the spring of 2011. The structural demolition of the surface equipment is expected to start in July 2013, and may take one year to complete. It is anticipated that the two stacks will be brought down in late 2013 or early 2014.

GAINING A BETTER UNDERSTANDING OF OUR IMPACT ON BOREAL WOODLAND CARIBOU In northeast British Columbia, Nexen, along with nine other shale gas producers, is working to better understand the potential impact of the industry’s operations on boreal woodland caribou. The boreal caribou is listed as threatened under the federal Species at Risk Act (SARA). Habitat disturbance caused by both natural events and industrial activity has been linked to increased predation of caribou calves. Boreal caribou live in an environment that is abundant in hair lichen, which hangs from tree branches. Caribou favour large, healthy and interconnected forests to survive. The four-year study, undertaken by University of Alberta researchers, involves placing GPS radio collars on boreal caribou and their predators to track activity during calving season. The goal is to identify where caribou calves are most vulnerable to predators and where survival rates are highest, and then put this information to practical use to increase rates of calf survival. “We need to understand how caribou are using the landscape, and the influence of predator-prey dynamics within our exploration area, to design effective mitigative measures,” explains Scott Wagner, Senior Community Consultation and Regulatory Affairs Advisor at Nexen.

CANADA GEESE IN BALZAC McDonald Lake is an important waterfowl habitat neighbouring our Balzac gas plant. It is home to birds migrating through the area and for those that decide to settle during the summer. One of the most prominent species at the lake is the familiar black headed, white chinstrap Canada goose. At one time, Canada geese were endangered in many places, as a result of overhunting and loss of habitat. They are now protected by law. The species has a tendency to nest in an elevated area near water such as streams, lakes and ponds. Geese have an inclination to attack humans if they feel their goslings are being threatened. The geese will first stand erect, spread their wings and produce a hissing sound. The geese will

Nexen’s Balzac gas plant.

then charge and may bite or attack with their wings. Nexen’s employees and contractors share the site with a large population

of geese and we are taking steps to make sure that the geese, as well as our people, are safe while the demolition of the Balzac gas plant takes place.

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SAFETY & EMERGENCY RESPONSE At Nexen, we believe creating a safe working environment is the most important work we do. Our employees and contractors strive to ensure production occurs in a safe manner, with zero harm to people, communities and the environment. To accomplish this we are putting an emphasis on education and continuous improvement. TRANSCAER® Protecting our employees, the public and the environment is not just a regulatory requirement – it’s a commitment Nexen makes as a responsible energy developer. For this reason, Nexen is an active member on the Prairie Regional TransCAER® Committee. The committee’s purpose is to drive the TransCAER® initiative, which assists communities to prepare for and respond to possible hazardous material transportation incidents. Members of the initiative are volunteer representatives from the chemical manufacturing, transportation, distributor and emergency response industries, as well as the government. The committee raises awareness and organizes training needs for first responders in potentially affected communities along transportation corridors. During the last week of September 2012, the Prairie Regional TransCAER® Committee organized a workshop in Calgary with the objective of reviewing emergency response plans and the communication process between first responders, shippers and the transportation companies. Fire fighters from the Calgary Fire Department were provided training on hazardous materials, transportation equipment and the resources that would be available to them during a possible incident.

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A tank car used at the TransCAER® workshop.

The workshop included a demonstration of a tank car, trailer and the loading/ unloading system, discussion of the characteristics of various chemicals

that are transported and the roles and responsibilities of Transport Canada and Alberta Emergency Services.


CONTRACTOR MANAGEMENT For Nexen, safe on-the-job performance is a top priority and we have committed to providing clear expectations for our contractors’ safety and training credentials. To reach these standards, Nexen implemented a contractor management system, ISNetworld (ISN), which allows us to collect self-reported health, safety and environment conformance information from contractors, verify its accuracy and acquire data in a functional format. In 2012, Nexen devoted additional resources to optimize how we use the system. As a proactive company, we regularly attend ISN regional meetings where we communicate with our contractors and we contribute to a working group to enhance ISN systems. We also collaborate with other producers to align our contractor verification initiatives by participating in the On-Site Validation Project (O-Val). O-Val is an initiative that allows Nexen and 10 other industry peers to formally validate self-reported contractor information at the field level in a consistent and standardized manner. Up to 38 Alberta safety protocols are assessed on-site to ensure that the safety programs the contractors submit to ISN are followed while they carry out their daily work. The verification allows us to recognize contractors with well-implemented and up-to-date safety programs, as well as help other contractors improve their programs. Collaborating with industry peers allows us to share verification expenses and best practices as well as reduce contractor audit fatigue, making the process efficient for all involved parties.

LIFE SAVING RULES Nexen’s Life Saving Rules are a part of our continued commitment to create a safe work environment for our employees and contractors. Our Life Saving Rules lay the cultural foundation to achieve zero serious incidents. Using clear direction and instruction about occupational safety, the Life Saving Rules apply job performance standards and workplace rules in a fair and consistent manner to all employees

and partners of Nexen. The Rules are created from industry lessons; they are a tangible contribution to strengthening our safety culture and are shared across Nexen’s business process and operations. Nexen employees and partners are responsible, and authorized to stop any work that does not comply with these rules and other procedures.

There will be no repercussions – that is Nexen’s commitment. Whether it’s a conventional drilling site or a stateof-the-art offshore platform, personnel management methods determine both operating performance and business success. Nexen is committed to creating a safe work environment for our employees; we aim to train our people to make the right choices when it comes to health and safety.

Life Saving Rules, Nexen’s continued commitment to create a safe work environment for our employees.

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EMERGENCY RESPONSE DRILLS IN BALZAC

An operator at Nexen’s Balzac location helps lower a mannequin, strapped into a rescue stretcher, off a high scaffolding structure during an emergency response drill.

At Nexen, creating a safe working environment is a top priority. With the recent change in the nature of activity at our Balzac gas plant, emergency response drills are imperative to ensure the safety of our staff, contractors and the local residents. We are tailoring drills to our new operating environment and are working closely with local emergency responders. Nexen regularly participates in emergency drills with Rocky View County Fire and Rescue, which was demonstrated in a recent mock medical evacuation off one of Nexen’s high scaffolding structures.

Emergency drills such as this are part of our ongoing effort to ensure activities at our Balzac gas plant occur in a safe manner with zero harm to people, communities and the environment.

“AT NEXEN, CREATING A SAFE WORKING ENVIRONMENT IS TOP PRIORITY.”

OIL SANDS WINTER DRILLING BOOT CAMP TRAINING PROGRAM In October 2012, Nexen held its ninth Oil Sands winter drilling boot camp training program in Kananaskis, Alberta over a three-day period. There were 140 people in attendance, including field supervisors, safety coordinators, rig operators and key contractors. The seasonality of the drilling program tends to attract a transient, inexperienced work force. To ensure all personnel involved in the project are aligned and aware of their roles and responsibilities, Nexen decided to create a boot camp training program. In past years, the boot camps touched on the topic of safety but also included discussions on water wells and

observation wells, along with personality profiling and team enhancement sessions. This year’s boot camp marked the first year that Nexen concentrated primarily on safety. The boot camp included an overview of safety policies and an on-site training exercise with two real training wells. This exercise allowed participants to work together as a crew and resolve rig deficiencies discovered during the simulation of typical well activity. Over the years, Nexen has found that the winter drilling boot camp training program increases the employee and contractor retention numbers and the on-site training exercises improve the efficiency of the crew members.

Core rig at work at Nexen’s Long Lake winter drilling operations.

HAZARD IDENTIFICATION

Nexen’s Balzac gas plant operators suited in their self-contained breathing apparatus gear.

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In 2012, Nexen participated in a global committee with the Centre for Chemical Process Safety (CCPS) to aid in the development of an interactive e-Learning module for hazard identification for operations and maintenance workers. The purpose of the project is to develop a computer-based training module that focuses on creating awareness in identifying process hazards specific to the chemicals and oil and gas industries. Hazards of this nature are leaks, spills and corrosion issues. They would be concerns that could lead to a catastrophic incident like a fire or explosion. Nexen, along with other participating companies from around the world, provided the material within the module. The module was released December 2012, and is the first in a series the global committee is looking to develop.


COMMUNITY At Nexen, operating with integrity means demonstrating respect for our stakeholders. We accomplish this by giving back to the communities where we operate and by creating stakeholder engagement. NEXEN DONATES TO VETERANS FOOD BANK Instead of their November 2012 town hall update, the Balzac leadership team chose to hold the Balzac Abandonment & Reclamation (BAR) food drive competition, a friendly competition to support The Calgary Poppy Fund and Veteran’s Food Bank, who work to assist needy veterans, their widows and dependents. “Seeing that our town hall update was occurring close to Remembrance Day, it just made sense to choose the Veteran’s Food Bank to receive our donation,” says Ray Rowland, Manager, Special Projects Field, Balzac. “They do a lot of great work for our veterans who sacrificed so much so that we can enjoy the freedom we have today.”

The BAR team’s donation to The Calgary Poppy Fund and Veterans’ Food Bank was more than 930 lbs.

The BAR team came together and successfully gathered the largest onetime drop the food bank saw in 2012 – more than 3,000 items at 930lbs. They also donated 200 stuffed and wrapped shoe boxes along with a $5,000 cash donation. “Nexen’s donation was a complete surprise and will go a long way in helping those who need it most,” says Lorne Bylsma, Manager, Veteran’s Food Bank. Designed to create some team spirit at Balzac, the team broke the food drive into two activities. The first activity consisted of one point being awarded for each food item collected and involved a team basketball shootout event. The second part consisted of a shoebox

The BAR team pose in front of 200 shoeboxes they stuffed and wrapped as part of a team building event.

event. Nexen’s Community Investment department provided a budget of $25 per box and teams purchased a host of items – toiletries, socks, mittens, toques, tea and coffee cards along with various Nexen items such as eyeglass cloths, pedometers and pens – to stuff

the boxes. The boxes were delivered to the Legacy project and were later distributed to veterans at their Christmas dinner.

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SUPPORTING THE FIGHT AGAINST BULLYING At Nexen, giving back to the communities where we operate has a long history and is deeply rooted into our values. We work alongside our communities to help them become stronger and more vibrant by making an effort to support initiatives that impact them. Rachel’s Challenge is an organization that was established after the Columbine (Colorado) High School shooting in 1999. The organization’s mission is to equip youth and adults with the means to fight bullying and feelings of isolation and despair by building a safe, kind and compassionate culture. Presentations are given in schools and

communities by members of Rachel’s family and other speakers to empower and educate youth. The program also includes establishing Friends of Rachel clubs in schools following the initial presentation to sustain the organization’s goals. Nexen is proud to have worked with the students of Fort Nelson, British Columbia to support this challenge. We aided in the creation of Friends of Rachel clubs in numerous schools, the collection of awards given to students for acts of kindness and the organization of barbecues at the schools in support of the challenge.

A poster used at events for Rachel’s Challenge.

NEXEN’S PARTICIPATION IN SYNERGY GROUPS Nexen continually supports and participates in multi-stakeholder groups to engage stakeholders on environmental, social and community-based issues. These groups include Synergy Alberta, Wetaskiwin Synergy Initiative and the Fort Assiniboine and Area Multi-Stakeholder Alliance. The groups provide stakeholders from communities in which our industry operates with the opportunity to have more meaningful and ongoing participation in issues that directly affect them. They create an environment for information sharing, discussion and learnings.

STAKEHOLDER ENGAGEMENT Taking the time to understand the issues important to our neighbouring communities and other stakeholders is the first step in social responsibility. We do this by engaging and consulting with local community stakeholders whenever possible. Nexen hosted a Responsible Care® Operator Workshop in early May 2012, attended by the lead operators from our western Canadian business units and two community representatives. Interactions of this nature allow for safe and fun discussion between Nexen operators and our community stakeholders. They allow our operators to understand the concerns of our stakeholders while allowing our stakeholders to meet the operators

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that work within their community. The stakeholders spent time asking questions, giving input into the Operator Code of Ethics and talking about what their experiences have been with Nexen and other industry peers.

Nexen Surface Land Agent meets with Balzac area farmer on his farm.

“TAKING THE TIME TO UNDERSTAND THE ISSUES IMPORTANT TO OUR NEIGHBOURING COMMUNITIES AND OTHER STAKEHOLDERS IS THE FIRST STEP IN SOCIAL RESPONSIBILITY. “


RUNNING TO THE RESCUE IN SOUTHERN ALBERTA When a fast-moving grass fire blazed through southeast Alberta in March 2012, Nexen employees at Hatton East were among the first on scene to try and slow its progress and offer support to local firefighters. About 12 Nexen employees and contractors were involved in helping to stop the wildfire. “We saw the smoke from the plant, and so we had some guys check it out right away and called 911,” says Larry Granger, a Lead Operator with Nexen who was Incident Commander during

the fire. “It has been so dry that this has actually been the third grass fire this year. We have a steamer (steam truck), so we sent that over right away to try and help out. We always do what we can when we hear there’s a fire.” The fire, which destroyed a strip of land of about 32 square kilometers, spread quickly as gusts were reaching up to 90 km/h, according to Environment Canada. Even after crews arrived, Nexen employees were able to stay on the scene, using their radios to keep track of

the fire’s current location and which way it was headed. Property, farming equipment and some buildings were damaged or destroyed in the fire, although no one was hurt and no homes were lost. Local landowners were very appreciative of the efforts of Nexen employees, and one local farmer even stopped by one of our southern Alberta offices to personally thank those who responded.

WORKING TOGETHER TO ADDRESS CHALLENGES: MARTIN ABORIGINAL EDUCATION INITIATIVE (MAEI) The Martin Aboriginal Education Initiative is a cause to improve elementary and secondary school education outcomes for Aboriginal Canadians through implementation of specific programs and application of appropriate research. Nexen entered into a cost-sharing agreement in December 2011 with the Horn River Basin Producers Group to support the initiative. This partnership allows for enhancement and enrichment to better support Aboriginal student achievement levels. The program was implemented at the Fort Nelson High School in spring 2012.

FORT ASSINIBOINE HAMLET HOEDOWN & WILD ROSE RODEO In 2012, Fort Assiniboine hosted its annual Hoedown, drawing people from far and wide to the small community. Nexen was proud to sponsor events at the rodeo, provide a donation to the Agricultural Society Auction and co-host the pancake breakfast with the Friendship Centre and Trident Resources Corp.

Nexen employees help their children flip pancakes at the Nexen co-sponsored breakfast at the Fort Assiniboine Hamlet Hoedown & Wild Rose Rodeo.

A Nexen employee gives his son a boost as the two take in the fireworks at the Fort Assiniboine Hamlet Hoedown & Wild Rose Rodeo.

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NEXEN DONATES $250,000 TO RED CROSS TO SUPPORT IMMEDIATE ALBERTA FLOOD RELIEF

As the flood waters began to recede in southern Alberta at the end of June 2013, the enormity of the damage became increasingly apparent. Surging rivers shut down entire towns like High River and Canmore, highways were closed and in Calgary alone upwards of 75,000 people were evacuated from their homes. Flooding struck in three cities where Nexen employees live and work – Fort McMurray, Calgary and Medicine Hat. Just as Albertans began to tackle the damage caused by the flooding, Nexen

donated $250,000 to the Red Cross to support immediate flood relief efforts in southern Alberta. “I want to express my deepest sympathy and support for those in these affected areas,” says Kevin Reinhardt, CEO of Nexen. “We know many have been impacted, along with thousands of others in the province whose homes and property have been destroyed in these unprecedented floods. Our priority remains keeping people safe and caring for our communities.”

Nexen’s efforts to help flood relief did not stop with a Red Cross donation. Through our ReachOut program, Nexen matched employee, contractor and student donations to registered charities, bringing the total raised as of July 10 to approximately $55,000 on top of Nexen’s donation to the Red Cross. In addition, Nexen mobilized employee volunteer teams to support community agencies impacted by the flooding. In less than three weeks, 31 volunteering team-build events were planned, most directly in response to the flooding.

Nexen employees form a sandbag chain gang removing sandbags from residents homes along the Elbow River.

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RESPONSIBLE CARE® WHAT IS RESPONSIBLE CARE®? Responsible Care® is a voluntary initiative focused on the chemical industry’s commitment to sustainability by improving performance, communication and accountability. Responsible Care® helps organizations eliminate harm throughout the lifecycle of their products. The primary belief that drives the initiative is that organizations should be committed to do the right thing and be seen doing the right thing. The initiative is a method of ensuring that Responsible Care® member companies not only meet but exceed government regulations.

WHAT IS NEXEN DOING? Nexen was the first upstream oil and gas company to adopt Responsible Care®. Our Canada Gas division has a current focus on strengthening the understanding of the Responsible Care® ethic and how it translates into the everyday activities and decision making of our field operators. Nexen has organized many successful information tours to educate staff on the Responsible Care® ethic. Since 2011, Nexen has coordinated Responsible Care® Operators Workshops to continue to integrate the Responsible Care® ethic throughout the Canada Gas division. These workshops allowed relationships to be built between the operators and Nexen subject matter experts that support the business units. The workshops focus on aligning the “Hearts and Minds” ethic, highlighting the importance of “Plan, Do, Check, Act” and emphasizing the effects of operators’ day-to-day work on the product lifecycle.

Canadian flag, Responsible Care® flag and Nexen flag at our Medicine Hat office.

OPERATOR CODE OF ETHICS Nexen’s talented employees are the key to making us a successful, responsible energy developer. We each know our responsibilities and are accountable for our decisions, behavior and actions. In order to ensure employees are aligned with the company’s purpose, we have a common set of values that guide the work we do. The Operator Code of Ethics was developed by Nexen senior operators in western Canada to provide a set of guiding principles to support day-to-day decision making. The Code of Ethics, which consists of 11 statements, is a voluntary commitment to the Responsible Care® ethic and aligns with Nexen’s Way as well as the Health, Safety and Environment & Social Responsibility Policy.

“WE EACH KNOW OUR RESPONSIBILITIES AND ARE ACCOUNTABLE FOR OUR DECISIONS, BEHAVIOR AND ACTIONS.”

Nexen’s Operator Code of Ethics.

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CIAC’S ANNUAL AWARDS DINNER: MERIT AWARD In 2012, Brian McAusland, Manager of Social Responsibility & Responsible Care®, was recognized with the Chemistry Industry Association of Canada’s (CIAC) Merit Award for his dedication to the Responsible Care® ethic. Each year the CIAC recognizes individuals who have committed their time and knowledge to support the issues, advocacy and sustainability work at the organization. Merit Awards recognize those who have contributed on CIAC committees, independent working groups or those who have added to key projects that support CIAC’s initiatives. Since 2011, Brian has developed and led Responsible Care® off site workshops which have given Nexen operators an

opportunity to see how the Responsible Care® ethic fits into their day-to-day work. Brian participates in numerous CIAC Responsible Care® Workshops where members share best practices on their implementation of Responsible Care® codes. In late 2012, Brian delivered a well-received presentation at the CIAC Responsible Care® Sustainability Workshop showcasing his outside of the box efforts to push the Responsible Care® ethic. Owing to Brian’s passion and drive to promote the Responsible Care® ethic, he is sought after by colleagues, internally and externally, for strategies on how best to intensify the initiative within their groups.

Nexen employee, Brian McAusland (top center), and fellow CIAC Merit Award recipients.

SHARE “IMPROVEMENT IN SAFETY” AWARD We are pleased to announce that Nexen earned the 2012 Improvement in Safety Award from the Chemistry Industry Association of Canada (CIAC). The CIAC hands out this award once a year recognizing companies who show a 20% reduction in Total Recordable Incident Frequency (TRIF) per year, over three consecutive years.

RESPONSIBLE CARE® OPERATORS WORKSHOP: LEASE CLEAN-UP & RECLAMATION EXERCISE ethic. Discussion and debate were created around real life Responsible Care® experiences and relationships were built among the subject matter experts and the operators.

Nexen operators show off the Reclamation Certificate they received recognizing their successful clean-up of their lease site during an exercise at the 2012 Responsible Care® Operators Workshop.

In fall 2012, Nexen hosted its fourth set of Responsible Care® Operators Workshops at Heritage Park in Calgary,

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Alberta. The workshop was a two-day event where our Canada operators learned about the Responsible Care®

The workshop included an overview of Responsible Care®, case studies and a discussion on Nexen and Responsible Care® values. An emphasis was made on the importance of “Plan, Do, Check, Act” and operating procedures. The operators completed the handson “Lease Clean-up & Reclamation Exercise” where they learned the impact of their day-to-day work on the asset lifecycle. The exercise showed the importance of the regulatory compliance aspect of a lease clean-up.


AWARDS AND RECOGNITION We’re pleased to be recognized for the way we work. These awards reflect our values: good governance practices, transparent disclosure, effective stakeholder relations and a dynamic workplace that attracts and engages talented people.

Global 100 Most Sustainable Corporations from Corporate Knights Magazine, 2013

Top 50 Most Socially Responsible Corporations

Community Engagement Award, 2012

2012, Maclean’s Sustainalytics

World Shale Oil & Gas Summit

Canada’s Top 100 Employers 2012, Mediacorp Canada Inc.

Aon Hewitt 2012 Green 30 List, Maclean’s

2012 Corporate Reporting Award for Oil and Gas,

Magazine.

Canadian Institute of Chartered Accountants

Alberta’s Top 60 Employers 2013, Mediacorp Canada Inc.

Carbon Disclosure Leadership Index (Canada),

Annual Report Award for Financial Statements

2012

and Analysis for Senior Oil and Gas Companies, Oilweek Magazine, 2012

Alberta’s Top 60 Employers 2013, Mediacorp Canada Inc.

Progressive Aboriginal Relations Certification - Silver Level, Canadian Council for Aboriginal Business

SOCIAL MEDIA Nexen uses social media platforms to share information about our business, our community involvement and career opportunities.

See photos of our operations, how we invest in our communities and how we are a responsible energy developer.

Nexen is hiring! www.linkedin.com/company/nexen

WE’RE COMMITTED TO BEING A SUSTAINABLE ENERGY COMPANY IN EVERY SENSE OF THE WORD. IT’S NOT JUST WHAT WE DO THAT MATTERS, IT’S HOW WE GET THE JOB DONE.

GET THE FULL STORY WWW.NEXENINC.COM/2012CSR

Reproduced with the permission of yahoo! Inc. Flickr and the Flickr logo are registered trademarks of Yahoo! Inc.

www.flickr.com/photos/nexeninc

Learn about Nexen, the communities we invest in and what makes us an employer of

Follow Nexen on Twitter

choice.

@nexenenergy

YouTube™ is a Google Brand Feature which is a distinctive brand feature of Google, Inc.

www.youtube.com/Nexen 2012 SUSTAINABILITY REPORT

17


Nexen Energy ULC 801-7th Avenue S.W. Calgary, Alberta, Canada T2P 3P7 T 403.699.4000 • F 403.699.5800 www.nexeninc.com This publication was printed on recycled paper.


Community Matters - Special Edtion