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2009 Report of Activity


HSSEQ

Response

Preparedness

CONTENTS Executive Summary

1

Overview

2

Health, Safety, Security, Environment

4

& Quality (HSSEQ) Response

5

Preparedness

6

Advocacy

7

Our People

8

Membership & Finance

9

Advocacy

Our People

Membership & Finance


Report of Activity 2009

Executive Summary BOARD OF DIRECTORS Singapore, October 2009

From left: Lindsay Mead (Oil Spill Response), Brian Tadeo (Apache North Sea Limited), Lon Langlois (Hess Corporation), Archie Smith (Oil Spill Response), Jon Lay (ExxonMobil), Ralph Torrance (Trafigura), Paolo Linzi (ENI), Dave Salt (Oil Spill Response), Dr. Mohammad Al-Ramadhan (KPC) Not in picture: John Weust (Marathon Oil Company)

In 2009, we continued to engage with Members and stakeholders across the world in a range of preparedness and response activities. This Report shows the scale and extent of these activities through the perspective of different departments and functions. Safety is the cornerstone for our Company as it is for the oil industry globally. It is encouraging to report that we have incurred no LTA’s this year. This is an achievement that we will work hard to maintain for the future. A major challenge in 2009 has been to ensure the security of our staff as they travel to areas where there are political or environmental risks to their well-being. Interestingly in 2009, the number of actual response mobilisations fell from 34 in 2008 to 24 but the number of Technical Advisor call-outs increased from 14 to 15. This initiative, launched in 2008, has encouraged Members to call us out earlier enabling us to give strategic advice in the critical initial hours of an incident and appears to be greatly valued by those using the service. Preparedness services have performed well in 2009 especially given that it has been a financially difficult year for the oil industry. We have introduced competency based training across a range of courses as well as holding more overseas published courses including new locations such as Goa and Lagos. Oil spill contingency plans and exercises are essential to preparedness and in 2009 we supported many Members in developing or reviewing their plans and running exercises. We have continued to provide technical support to Members through

short and long term secondments. In 2009, we continued to see an increase in preparedness services for exploration work which amounted to 178 projects this year alone, an increase of 16 projects compared to 2008. We as an industry funded organisation seek to encourage industry best practice through partnerships with other organisations, including IPIECA and the IMO, as well contribute to conferences, workshops and seminars in different countries. Internally, the focus has been on the continued implementation of our Approved Competency Management System for preparedness and response staff. This programme is a major investment in the development of our staff to ensure we have suitably qualified and competent personnel to support our Members. Maintaining increases in subscription below inflation is an important objective for us and we have been able to achieve this successfully in recent years through increased Membership, effective cost control and growth in preparedness activities. Despite the tough trading environment this year and the impact of adverse exchange rates, the subscription rate will remain flat in 2010. Looking forward to 2010, we will continue the development of our staff and the range of expertise we can offer to our Members. We have been growing our regional presence around the world and with representation now in the United Kingdom, West and North Africa, Middle East, Singapore and Indonesia, we look forward to more opportunities to engage with our Members.

Mission Statement Our mission is to provide resources to respond to oil spills efficiently and effectively on a global basis. Charter We will continue our pursuit of excellence in providing cost effective oil spill response, training and consultancy services. We will work towards improving communication, awareness of resources and capabilities, and where appropriate, encourage mutual support among the global population of international tier three oil spill co-operatives. These efforts will enhance our ability to deliver the quality of services required by our Shareholders.

1


Report of Activity 2009

Overview

We are the world’s largest international oil spill preparedness and response organisation, with regional bases in Europe, Asia, and the Middle East. Our total number of Members stands in excess of 100 accounting for over 60% of the world’s oil production. Collectively we have accumulated over 350 years response experience, having attended in excess of 350 spills. Shareholders

Associate Members Company

Afren Energy plc

EOG Resources

Husky Oil China Ltd

BAPCo

Eon-Ruhgas

Iranian Oil (UK)

Petronas Carigali Mauritania

Sinopec EG

Bailiwick of Guernsey

Fairfield Energy Ltd

Irish Coast Guard

Petro SA

Spanish Coast Guard

Bridge Resources

Foxtrot International

Ithaca

Plains Vietnam

Stratic Energy

Cairn Energy India

Galoc Production

Japex Libya

PowerSeraya Ltd

Sterling Resources

Centrica Storage

GDF Suez

Kosmos Energy LLC

Premier Oil

Tub Karragon

Century Exploration

Genesis

Kurmangazy Petroleum

PT Arah Prana

TAQA

Challenger Minerals

Gibraltar Port Authority

Lundin Services

Tullow Exploration

CNOOC Africa

Great Lakes & Dredging

Maersk Oil North Sea

PT Kawasan Industri Dumai

Guam Response Services Ltd

OMV

Gujarat State Petroleum Corporation

PA Resources

Dana Petroleum DONG Dragon Oil Endeavour Energy Energy Resources Technology (gas) Engen

2

Noble Energy OPET

Harwich Haven Authority

Petrobras Angola

HM Naval Portsmouth

Petrofac Development

Hurricane Exploration

PC Vietnam Limited

Petrobras Libya

Reliance Industries Ltd Repsol Exploration SA RWE Dea UK Ltd Salamander Santos Serica Energy plc Silverstone Energy Singapore Petroleum

Tupras Valiant Petroleum Vanco International Venture Vermillion Vitol Services Wintershall AG


Report of Activity 2009

Our Global Activities in 2009

New Members Advocacy Exercises Spill Response Improving Preparedness

Key Performance Measures Our strategy is to grow our expertise to provide the highest level of service in oil spill preparedness and response. We continually measure our performance to ensure we are doing the right thing for our Members in the best manner possible. The key performance measures in this report highlight the significant achievements of 2009 and the very high levels of activity. This report also illustrates our commitment to developing an experienced workforce with an appropriate mix of competence and accredited qualifications that we need to meet our Members’ ever increasing demands.

3


Report of Activity 2009

Health, Safety, Security, Environment & Quality (HSSEQ) We strive to create a workplace where accidents do not occur, where no one is exposed to health hazards and where personal security is not compromised. We further endeavour to protect the environment by working to minimise the impact of our activities on our planet. Throughout 2009 we have implemented a number of initiatives aimed at moving our safety culture up the “safety ladder”, improving our travel security and diverting waste away from landfill. We have implemented a number of landmark environmental initiatives in the refurbishment of an otherwise under-utilised area of one of our sites, which has helped us to reduce our overall utility usage through the year.

lost time accidents ( to end Q3 2009 )

Material / Waste Recycling Rate

No. of Hazard Identification & Near – Miss Reports Raised

14

400

12

356

350 54%

09’ 10

250

47%

08’

8

271

300

200 6

07’’

4

26%

29%

06’

100

2 05’ 0

05’

06’

07’

08’

09’

50

25%

0%

10%

20%

30%

162

150

40%

50%

60%

0

07’

08’

09’

Stated as rolling one year average per 1,000,000 man hours worked Highlights of the year

Highlights of the year

The LTA’s frequency rate - the number of lost time incidents calculated per one million man-hours worked continues to demonstrate an encouraging downward trend.

We take a proactive approach to environmental sustainability recognising our share of the responsibility in reducing climate change and protecting the environment.

We are very pleased to report that there have been no LTA’s for this year; an achievement we will work hard to sustain.

We also seek to heighten safety for employees at our workplaces and raise their awareness about issues impacting their safety. This happens through surveys, standard operating procedures,safety briefings and meetings, inspections and key performance indicators (KPIs).

In a major project involving the refurbishment of an old canteen / changing room facility, the recycling and reuse of waste off site was well above accepted construction standards at over 40%.

There has been a continued reduction in the level of hazardous waste taken for disposal.

Highlights of the year

Regular safety campaigns have increased the focus on near misses in order for staff to better understand what can be learnt from such incidents. In 2009, there was an increase of 31% in the number of near misses/Hazard Identification reports raised.

This year a web based safety system has been introduced to enhance safety reporting and the preparation of risk assessments across the Company.

In 2009, we also a undertook a company wide safety culture survey which will be followed by staff workshops to develop initiatives to improve our safety performance and move our culture up the safety ladder.

Our care for each other and the environment.

4


Report of Activity 2009

Response 2009 has seen us respond to over 25 incidents. The overall general pattern of responses in 2009 has been towards fewer incidents with shorter involvement. The ongoing need for expertise, however, is reflected through a rise in the number of Technical Advisor activations, from 14 to 15. Across the UK, Bahrain and Singapore Operations departments, there is an emphasis on alignment of procedures to ensure that our Members receive the same high quality of service irrespective of which base it is delivered from. The safety and security of our staff remains a primary concern and the processes in place are constantly reviewed. The Service Level Agreement (SLA) remains the core of what we do and is continually monitored to ensure that our ability and capacity to respond is not compromised.

Classification of Spills ( no. of spills )

Responders’ Years of Experience ( accumulated years )

Days Engaged in Spills

400

35

600

30

301

300

25

313

319

321

271

400

20

200

300

15 10

100

05’

06’

07’

08’

09’

Pipeline Shipping

Onland Upstream

0

05’

06’

07’

08’

09’

Our corporate in-field experience continues to increase with another varied year of deployments which have allowed our personnel to put their training into practice. It is this breadth and depth of practical spill experience which underpins our ability to deliver ‘real world’ preparedness and response advice.

2009 saw a slightly reduced number of spills compared to 2008, which was an unusually busy year.

There has been an increase in mobilisations to shipping incidents, however a number of these responses were pro-active uses of the Technical Advisory service, often with no release of oil.

In contrast to last year’s Report of Activity, 2009 has seen a decrease in our response to exploration and production incidents.

The profile of response in 2009 has been one of an advisory capacity requiring small numbers of staff for short periods rather than full scale deployments of equipment.

The programme of personnel exchanges across the group means this experience can be put to effective use in the day to day response and preparedness activities we engage in.

Use of Technical Advisor in 2009

15

Highlights of the year

The service, introduced in 2008 continues to prove popular with our Members, giving them advice and expertise in the early stages of a response. It allows us to gather valuable incountry information, prior to sending people and equipment resources to the incident. In 2009 the service was utilised 15 times, leading to 10 full mobilisations of personnel and equipment.

17

0

05’

146

06’

07’

08’

09’

Highlights of the year

Highlights of the year

113

100

Offshore Upstream Inland Downstream

284

200

5 0

505

500

Highlights of the year

In 2009, we were engaged in spill activity for a total of 284 spill days and with an overall figure of over 800 mandays across all three bases.

One of the most significant deployments was the response to the Montara well control incident in Australia which involved the ADDS Pack equipment and personnel support. This response provided a good opportunity to gain experience of offshore containment operations in ideal sea conditions.

No. of Trained Responders 90

79

80 70

62

80

85

Highlights of the year

Our staff continue to support our Members through short and long term secondments, bringing a wealth of spill response knowledge to their operations.

Support to Singapore has been signifiicant in light of spill incidents occurring in the Asia Pacific during the year.

The SLA continues to be maintained and all requests for support from other areas of the business continue to be recognised and resourced appropriately.

62

60 50 50 30 20 10 0

05’

06’

07’

08’

09’

2009 has seen a continued recognition of the value to the Members of our Technical Advisor role. 5


Report of Activity 2009

Preparedness 2009 has been a busy but difficult year for Preparedness activities. In the current economic climate, training and consultancy services have all come under pressure with the demand for training being reduced by 6% compared to 2008. Activity in the oil exploration sector has continued albeit with some projects being delayed or cancelled; demand for the provision of long term oil spill solutions and equipment hire has been maintained with some notable projects being implemented in the later months of the year. As in previous years, and of increasing importance, the backbone of our Preparedness activities is the expertise and recent real experience of our people. Feedback from our Members on our Preparedness services continues to be very favourable.

Our Preparedness activities have performed well in the difficult economic climate with some significant long term contracts being implemented.

No. of Preparedness Services Delivered ( by industry classification ) Offshore Upstream

178

152 8

Ports and Harbours

70

Downstream

30 9

Inland Upstream

19

10

Shipping

36

14

15 13

Government 3 3

Pipeline

0 No. of Projects

40

80

120

160

200 2008

2009

Highlights of the year Our preparedness activities have performed well in the current economic climate. Overall, compared with 2008, the number of projects undertaken in 2009 has decreased by 13%. However, after allowing for the sale of the UKR business in 2008, the net number of projects actually increased by 8%.

Being closer to our Members through the presence of regional representatives has contributed significantly to the development of projects in areas including West Africa and Indonesia. Additionally, significant contracts have been awarded and implemented in Australia and the Philippines.

The expertise of our people has been utilised by more Members for a broader range of activities through short and long term secondments.

Projects

Consultancy

2009 76 projects

Number of Courses

2008 80 contracts

2007 2007 57 projects 93 projects

2,500

160

2009 88 contracts

2008 2008 115 projects 80 projects

Training

180

2007 57 contracts

2,000

140 120

1,500

100 80

1000

60 40

500

20 0

0

20

40

60

80

100

120

0

20

40

60

80

100

0 04’

05’

06’

07’

Number of Courses Highlights of the year

6

The drop in project numbers is mainly due to the sale of our UKR business in 2008 which contributed 60 projects. There is in fact an increased demand for bespoke equipment packages and services for exploration campaigns. The number of offshore equipment related projects increased to 64 compared with 47 in 2008, an increase of 36%. Two long term equipment provision, maintenance and training contracts were signed with Members in West Africa and significant new contracts were delivered in the Asia Pacific region. The provision of expertise via secondments and incident management services continues to grow.

Highlights of the year

The number of contracts delivered in 2009 shows an increase of 10% compared to 2008, particularly with a significant increase in number of contracts delivered in the Asia Pacific region. The number of contracts offering integrated solutions has increased as Members benefit from coordinated management of their preparedness needs. Following the formal approval of the AMOSC alliance in June 2009, a large contract is being jointly implemented in western Australia.

08’

09’

Number of Delegates

Highlights of the year

The range of courses is now wider with the addition of ‘Incident Management’ and ‘Awareness of Hazardous and Noxious Substances’ courses.

Published Courses were delivered in 20 locations globally, bringing our courses closer to our customers.

The inception of e-learning, led by our webbased DECC Level 1 for UK OIM’s and the use of multi media memory devices in place of paper copies have helped to improve topical understanding.

The take up of OPITO approved competency based assessment options is increasing with over 100% growth in the number of course attendees obtaining competency standards.

Number of Delegates


Report of Activity 2009

Advocacy We are committed to using our credentials of wide industry ownership to encourage adoption of industry best-practice in the global arena of spill preparedness and response. Our Advocacy Engagement in 2009

1 3 6 5

7

7

5

3 6

2

LEGEND

4

Advocacy Activities

Response Partners 1

4

2

5

3

6

7

Our Advocacy programme is the means by which we engage with stakeholders to promote the principles of spill preparedness, to encourage a coordinated, effective response, on behalf of our Members. This important programme is based upon three distinctive themes: Partnerships

Technical Standards

Communications

We are proud to be active in many government / industry alliances such as the Partnerships in Environmental Management for the Seas of East Asia (PEMSEA). Our relationship with IPIECA provides the basis for a formal industry partnership with the IMO to implement the Global Initiative (GI) programme. The flagship project in West and Central Africa (GI-WACAF) is making demonstrable progress towards improving preparedness in the region, specifically:

We facilitate the Industry Technical Advisory Committee (ITAC) which provides the oil industry with pragmatic solutions to spill response issues, disseminated through technical papers and an open-access website. In 2009, we led or contributed to several ITAC projects including:

Clear unambiguous communication is an essential component of our advocacy programme in our quest to help countries implement the provisions of the OPRC 90 Convention. In 2009 we placed specific emphasis on communicating the benefits of our advocacy activities to our Members through a comprehensive customer contact programme. Other outputs we have delivered focussing on communications have included:

15 of the 22 countries now have developed national contingency plans 3000 people have received training under GI-WACAF since 2006 Nine countries have identified sites sensitive to oil spills, four of which have developed sensitivity atlases

A new technical paper on oil observation and quantification The development of a protocol to assess the effectiveness of dispersant application. An equipment purchasing guideline for procurement specialists

A high-level review of the IPIECA Report Series to enable a priority for update assessment A detailed re-write of the IPIECA Dispersants Report (ongoing) 18 new conference papers produced and presented at international forums and events 7


Report of Activity 2009

Our People

The right people in the right place at the right time. People are the lifeblood of Oil Spill Response, hence the recruitment and development of the best people to deliver preparedness, response and corporate support that is essential to successfully serve the demands of our Members. We continue to develop a workforce which reflects the worldwide nature of our business in terms of backgrounds and ethnicity. We believe strongly in investing resources in the training and development of our personnel in order to deliver a multi-skilled pool of experts to our Members. To this end we have developed a suite of competence-based Occupational Standards which mirror the roles and responsibilities which we will fulfill for clients in the event of an incident and which are underwritten by the Offshore Petroleum Industry Training Organisation (OPITO). Our People by Language Skills ( English excluded ) Arabic 4% Others 15%

French 13%

Spanish 1% Bahasa 13%

Qualifications

Gender Ratio 160

160

140

140

120

120

100

100

80

80

60

60

40

40

20

20

0 Japanese 9%

0 00’

05’

07’

Mandarin 44%

08’

09’

Male

Female

00’

05’

07’

Engineering Officer

Deck Officer

Engineering Apprentice

Graduate

08’

Other (incl Admin)

Highlights of the year

To encourage and develop diversity amongst our staff, we have specific programmes to attract, retain and develop talent and also to provide support systems where required. This ability to understand, embrace and operate in a multicultural world was further enhanced in 2009 with the recruitment from India, UK, Indonesia and Singapore.

Recognising the importance of staff development and succession planning, a set of leadership and management competencies have been put in place for the executive and senior management teams. In parallel with this initiative, a new performance management system is ready for launching in 2010 to ensure equal opportunities for all staff

Man Days Training

No. of Secondments TEN staff were seconded to Members/bases in 2008

1800

1,667

1600 1400 1200

1,536

1,227

1000 800 600 400 TWENTY staff were seconded to Members/bases in 2009 Highlights of the year

During the year, we have doubled the number of staff seconded either between bases or into client companies reflecting the growing demand of our personnel’s expertise.

This year has seen continuous high demand from Members for both short term and long term assignments. We have had staff seconded to countries including Kazakhstan, Russia, Saudi Arabia and Ghana.

8

We familiarise our personnel with our global activities through staff exchanges that enable them to learn more about the different cultures we operate in and challenges faced in different parts of the world.

200 0

07’

08’

09’

Highlights of the year

In 2009, considerable progresss was made in the implementation of our vocational competency system, ACMS, for responders. These competency modules mirror the roles, such as Incident Command Manager, they may undertake during a response to an oil spill.

Workshops on communication skills were held widely throughout the organisation with a view to enhancing effectiveness when meeting and engaging with customers.

Also in 2009, we continued our ongoing management training programme with emphasis on skills including leadership, coaching, communication and employee development skills.

09’


Report of Activity 2009

Membership & Finance

Over the past six years, through effective cost management and progressive growth in Membership and Preparedness, the average increase in the subscription rate has been less than 1%.

No. of Members

Membership by Industry Class

120

120

100

100

80

80

60

60

40

40

20

20

0

03’

04’

05’

06’

07’

No. of Participants

08’

09’

0

03’

No. of Associates

04’

05’

06’

07’

08’

Storage

Shipping

E&P

Others

Government

Refining

09’ Energy

Highlights of the year

Despite the difficult economic conditions, Membership has remained relatively stable in 2009, with 35 Participants and 75 Associate Members.

During the year we welcomed Murphy E&P as a new Participant and a further 14 new Associate Members, primarily from the exploration sector.

Our Customer Engagement programme continues to provide a platform to ensure our Members understand how best to use us and provide valuable feedback.

Subscription Rate per 100 Shares £80,000

In 2009, we have been adversely affected by difficult global trading conditions, including the negative impact of foreign currency market volatility. This has been mitigated by the increased level of business development activity and the implementation of tight cost control measures.

£70,000 £60,000 £50,000 £40,000 £30,000

We continue to proactively monitor our financial, operational and HSEQ performance and launch initiatives to increase the levels of customer engagement. The trends evident in Q4 2009 are encouraging for the 2010 outlook and we are confident of delivering our Business Plan.

£20,000 £10,000 £0 04’

05’

06’

07’

08’

09’

10’

Subscription Rate per 100 Shares Inflation-adjusted Rate

Preparedness Turnover by Geographic Area

Preparedness Turnover by Service (£’000)

(£’000) Highlights of the year

Over the past 5 years steady growth in Membership and Preparedness, coupled with effective cost control measures have enabled us to keep increases in subscription rates well below inflation. Despite the difficult economic climate and the adverse impact of exchange rates, the subscription rate for 2010 is unchanged at £66,450 per 100 shares.

£7,000

£7,000

£6,000

£6,000

£5,000

£5,000

£4,000

£4,000

£3,000

£3,000

£2,000

£2,000

£1,000

£1,000

£0

03

04 UK Middle East

05

06 Asia Pacific USA

07

08

Europe Rest of World

09

£0

03

04

05

06

Consultancy

07 Training

08

09 Projects

Highlights of the year

A key factor in achieving low increases in our Net Cost to Shareholders over the years has been the progressive growth that we have delivered in our Preparedness Activities.

In 2009 turnover at £6.4m is almost unchanged from 2008, reflecting challenging market conditions and the impact of the sale of the UKR business.

2009 has seen a continuation of the growth in the range of services provided and an increase in the number of Members with whom we trade.

9


Printed on paper that is 100% post consumer recycled waste ISO 14001 with vegetable based inks.

Oil Spill Response Limited London (Registered Office) One Great Cumberland Place London W1H 7AL United Kingdom T +44 (0)20 7724 0102 F +44 (0)20 7724 0103 E london@oilspillresponse.com

Bahrain P O Box 54211 Manama Kingdom of Bahrain T +973 1773 0961 F +973 1773 0058 E bahrain@oilspillresponse.com

Southampton Lower William Street Southampton SO14 5QE United Kingdom T +44 (0)23 8033 1551 F +44 (0)23 8033 1972 E southampton@oilspillresponse.com

Aberdeen Marine House Blaikies Quay Aberdeen AB11 5EZ United Kingdom T +44 (0)1224 72 6859 F +44 (0)1224 72 6860 E aberdeen@oilspillresponse.com

Singapore 2 Jalan Samulun Singapore 629120 T +65 6266 1566 F +65 6266 2312 E singapore@oilspillresponse.com

INDONESIA Indonesia Stock Exchange Building, Tower II, 17th Floor JI. Jend. Sudirman Kav. 52-53 Jakarta 12190 T +62 21 5291 7494 F +62 21 515 7799 E indonesia@oilspillresponse.com


http://www.oilspillresponse.com/pdf/Corporate/roa2009