2011 Sustainability Report Responsible ... - Oman Oil Companyoman-oil.com/News/2013/Oman Oil Group Sustainability Report.pdf · Report of Oman Oil Company and its subsidiaries

Responsible Investing for the Future of Oman

2011 Sustainability Report

“ The construction, economic, commercial and industrial projects established during the past stage in various parts of the Sultanate have absorbed many national workers and the private sector has proved its cooperation in shouldering the responsibility, as it assumed a tangible role in cooperating with the government and boosting sustainable development efforts. We are looking forward to a greater role to be played by the private sector in the future, particularly in the field of the development of human resources.”

Speech of His Majesty Sultan Qaboos Bin Said, Sultan of Oman, at the Opening of the Majlis Oman - 31 October 2011

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2011 Oman Oil Company S.A.O.C. Sustainability Report

Contents

Chairman’s Message 9CEO’s Message 11

OverviewAbout Oman Oil Company 12

Performance Demonstrating Commitment to Sustainability and Accountability 24Contributing to a Strong Omani Economy 30Investing in Oman’s Human Capital 40

Stewardship Becoming a Steward of Environmental Sustainability 58

Communities Elevating the Quality of Life in Our Communities 68

Summary Performance Summary 82Material Issues Assessment 84GRI Index 86

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2011 Oman Oil Company

S.A.O.C. Sustainability

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About This ReportOman Oil Company is proud to present its first sustainability report. This report will discuss the consolidated economic, environmental, and social performance of Oman Oil Company and nine of its subsidiaries (together with OOC known as OOC Group). Integration of sustainability into OOC’s operations is a key element of the company’s commitment to responsible investment in the future of Oman. Our sustainability programme is focused on increasing the transparency of OOC Group through annual reporting and direct engagement with our stakeholders. This report presents the performance of OOC and nine of its subsidiaries, focusing on measuring and demonstrating the value that OOC Group adds to Oman from economic, social, and environmental perspectives. Our first sustainability report assesses our current actions and creates a framework for us to move forward with strategic integration of sustainability management principles into OOC Group operations.

This report has been developed using the leading international guidelines for sustainability reporting, namely the Global Reporting Initiative (GRI) G3.1 guidelines. The appendices contain a complete GRI index as well as a statement from the GRI confirming that this report has achieved a GRI application level B.

Report Scope and MethodologyThis report demonstrates Oman Oil Company’s programme to embed sustainability within its future investments as well as its current subsidiaries. For its first sustainability report, OOC has selected nine out of its 13 subsidiaries operating in Oman

to report on their performance. The companies selected for this report represent OOC’s subsidiaries across a variety of sectors in order to capture the most accurate picture of OOC Group and its impacts. Future reports will endeavour to include reporting from all of OOC’s subsidiaries operating in Oman. A short profile of each subsidiary featured in this report is provided in the About Oman Oil Company section of the report.

As part of this reporting process, OOC selected 23 indicators that reflect a range of economic, environmental and social issues that are most relevant to the success of the companies and development of Oman. Performance data is presented for 2009, 2010, and 2011. A summary of OOC Group’s performance across these 23 indicators can be found on page 82-83 of this report. The emphasis of our reporting process was to increase the transparency of OOC Group operations while providing an accurate portrait of the economic, social and environmental impact of OOC Group in Oman. Moving forward, we strive to further enhance transparency by increasing the participation and reporting level of all OOC subsidiaries.

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It gives me great pleasure to introduce the first Sustainability Report of Oman Oil Company and its subsidiaries for 2012, in compliance with the guidelines of the Global

Reporting Initiative (GRI). The report aims to demonstrate and highlight OOC’s financial, environmental and social performance.

On the financial front, OOC Group has proven, in a short period of time, to be a significant player in the national economy with a diversified investment portfolio. Today, the group operates 33 energy and energy-related investment projects across 9 countries. OOC strategy focuses on working diligently and in line with government plans to diversify income and engage in developing new industrial areas, including Duqum, thereby improving their infrastructure and creating further jobs for Omanis.

The company’s operational strategy respects established environmental controls and standards to limit any negative operational impacts. A key principle OOC adopts and embraces in its strategic plans is conserving the environment in Oman’s energy sectors.

On the social performance and people development front, the group actively contributes in building Omani capabilities by developing their skills and adopting technical and vocational training programmes, suitable for employment. OOC Group also takes into consideration the initiatives of Omani women, who play a vital role in shaping Oman’s society.

Whereas the renaissance of any society cannot be viewed in isolation of its traditional culture, we sponsor craftsmen and support small and medium businesses. Our social responsibility policy focuses on supporting initiatives that assist handicapped people as well as enhancing and instilling a culture of voluntary work in the minds and hearts of our people and the whole society.

Nasser bin Khamis Al Jashmi Chairman, OOC Board of Directors

Chairman’s MessageOverview

Performance

Stewardship

Communities

Summary“ OOC strategy focuses on working diligently and in line with government plans to diversify income and engage in developing new industrial areas, including Duqum, thereby improving their infrastructure and creating further jobs for Omanis.”

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Overview

Performance

Stewardship

Communities

Summary

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It is my great pleasure to present Oman Oil Company’s first sustainability report. This report demonstrates our commitment to sustainability management and reporting

for our company and nine of its subsidiaries. Oman Oil Company’s 2011 Sustainability Report discusses our sustainability objectives with regard to the social, economic, and environmental performance of the company, its investments, and its subsidiaries.

Sustainability principles of accountability and responsible investment have been a part of our culture since our inception. We launched our sustainability report as part of sustainability adoption at our company to reach the next level of business excellence. Our goal is to foster a better future for Oman by accelerating the adoption of sustainability performance management across our investments, and increasing employment and human capital development in Oman.

Oman Oil Company plays a key role in the development and growth of the Omani economy as a provider of capital, a catalyst for private investment, and one of the employers of choice in the Sultanate. In 2011 Oman Oil Company and its subsidiaries contributed more than 1 billion OMR to the overall GDP of Oman’s economy.

As we continue our operations, the strength and impact of our investments shape the future of Oman’s energy sector.

Our first sustainability report marks the beginning of our journey to record and learn from our sustainability performance in order to create the best possible outcomes for our company and the Sultanate. I invite our stakeholders to read our report and share in our success as we continue to invest for the future of Oman.

Ahmed Al Wahaibi CEO, Oman Oil Company

CEO’s Message

“ Our goal is to foster a better future for Oman by accelerating the adoption of sustainability performance management across our investments, and increasing employment and human capital development in Oman.”

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Overview

Performance

Stewardship

Communities

Summary

Overview

About Oman Oil Company

Overview

Performance

Stewardship

Communities

Summary

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Oman Oil Company S.A.O.C. (OOC) is a commercial investment company wholly owned by the Government of the Sultanate of Oman. Since its establishment in 1996, OOC has pursued energy and industrial investment opportunities domestically and internationally. Oman Oil Company plays a key role in the Sultanate’s efforts to diversify the Omani economy and promote Omani and foreign private sector investment.

Company ObjectivesOman Oil Company has the following core objectives:• Create value for Oman through developing

and investing in profitable businesses• Create employment opportunities and

develop talent• Build a structured and diversified portfolio• Achieve operational excellence

Investment in the Energy SectorDomestically, Oman Oil Company’s mandate is the development of oil and gas-based industries and additional energy related projects. OOC’s operations strive to invest in the human capital of Oman, maintain our national environmental wealth and contribute to the community. Furthermore, Oman Oil Company advances the economy through

the knowledge and technology it brings to the market place by partnering with international industry leaders such as TAQA/ADWEA, IFFCO, KRIBHCO, Rio Tinto Alcan and Vale S.A. OOC’s portfolio of investments includes exploration, production, infrastructure, shipping, refining, marketing, petrochemicals, aluminium,

and power industries. OOC has investments in 33 companies operating domestically and internationally in the energy sector.

OOC GroupOOC Group has had great success in fulfilling our mandate to stimulate the growth and development of the energy sector in Oman by contributing more than 1 billion OMR in direct value added in 2011. OOC and its subsidiaries are strategically poised to maximise the operations of our subsidiaries to create the best outcome for the Sultanate. Looking forward, we strive to continue our successful growth as part of our mission to advance and strengthen Oman’s economy and society.

1 Musandam Musandam Gas Plant

2 Sohar Sohar Refinery (Orpic), Aromatics plant (Orpic), Polypropylene plant (Orpic),

Sohar Aluminium Company, Tanking Odfjell Ports Company, Vale Oman, Takamul’s projects: OARC, OAPIL, SSF, GSSI

3 Muscat Mina al Fahal Refinery (Orpic), Oman Gas Company, Oman Oil Marketing,

Takamul Investments, Oman Shipping, OOCEP, Abraaj Energy

4 Sur OMIFCO

5 Kareem Field Project Block 42

6 Duqm Refinery and Petrochemical Production, Oman Tanks

7 Mukhaizna Mukhaizna field project

8 Reema Reema field project

9 Salalah Salalah Methanol Company

10 AAB Abu Al Tobool Field

Oman

1

23

4

65

10

7

8

9

Oman Oil Company S.A.O.C.

China

South KoreaSpain

OMAN

Hungary

United Arab Emirates

India

Pakistan

Kazakhstan

Overview

Performance

Stewardship

Communities

Summary

Overview

Performance

Stewardship

Communities

Summary

Oman Oil Company’s International Operations

These maps are for reference purposes only . The international borders shown are not legally accurate


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OMAn OIl GROuP

Company Description Ownership breakdown

OGC Oman Gas Company S.A.O.C (OGC) is the major gas transportation company in Oman, delivering natural gas to industrial customers across the Sultanate including refineries, power plants, steel factories, and cement plants with more than 2300km of pipelines in operation.

80%: Oman Ministry of Oil and Gas20%: OOC

OOCEP Oman Oil Company Exploration & Production LLC (OOCEP) was established in 2009 to develop upstream opportunities in support of Oman’s energy sector. OOCEP holds investments in national and international oil and gas projects including the Musandam Gas Plant, Abraaj Energy Services and the Block 60 onshore field.

100% OOC

OSC Oman Shipping Company S.A.O.C (OSC) is a shipping services provider that offers chartering, transport and shipping management services for LNG, crude oil, chemical, dry bulk, container, and general cargo markets in Oman. With 42 ships in operation, OSC serves as Oman’s transport connection to global markets.

80%: Oman Ministry of Finance 20%: OOC

SMC Salalah Methanol Company LLC (SMC) is a state-of-the art, methanol production facility in Salalah Free Zone with an annual capacity of one million tons per year. SMC began operations in May 2010.

90% OOC10% Takamul

Takamul Takamul Investment Company S.A.O.C was formed in 2006 to develop a sustainable downstream chain to support Oman’s thriving industrial sector. The company’s primary objective is to promote and invest in value-added, economically viable projects serving upstream industries that include metals, petrochemicals and minerals.

92.9% OOC7.1% ADWEA and Al Maha Investments

OMAn OIl GROuP

Company Description Ownership breakdown

OMIFCO Oman India Fertiliser Company S.A.O.C (OMIFCO) is an ammonia/urea fertiliser manufacturing company operating in Sur. The plant is designed to produce up to 250,000 metric tons per annum of surplus liquid ammonia and 1.65 million metric tons per annum of bulk granulated urea, which is sold to national and international markets.

50% OOC 25% Indian Farmers Fertiliser

Co-operative Limited 25% Krishak Bharati Co-operative Limited

Orpic Oman Oil Refineries and Petroleum Industries Company is one of Oman’s largest companies operating refineries in Sohar and Muscat in addition to aromatics and polypropylene plants in Sohar. Orpic is a leader in Omani refining and petrochemicals, providing petroleum and polypropylene products to national and global markets. Orpic was created as a result of the restructuring of three companies: Oman Refineries and Petrochemicals Company LLC, Aromatics Oman LLC and Oman Polypropylene.

75% Oman Ministry of Finance25% OOC

Sohar Aluminium Sohar Aluminium Company (SAC) was established in 2004 as Oman’s first aluminium plant. SAC has achieved significant growth and success, reaching its one millionth tonne of aluminium production in August 2011.

40% OOC 40% Abu Dhabi National Energy Company

(TAQA)20% Rio Tinto Alcan

Oman Oil Marketing

Oman Oil Marketing Company S.A.O.C (Omanoil) was formed in 2003 to provide marketing, direct sales and distribution services for the Sultanate of Oman. Omanoil operates more than 100 retail fuelling stations in Oman in addition to its role in aviation, commercial and domestic energy distribution and sales.

49% OOC51% Publicly traded

In this report, we provide the consolidated performance of Oman Oil Group, including Oman Oil Company and its subsidiaries. Below are the companies that have participated in our first sustainability report.

Oman Oil Group Overview

Performance

Stewardship

Communities

Summary

Overview

Performance

Stewardship

Communities

Summary

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Overview

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Sustainability at Oman Oil Company

Sustainability and accountability are becoming increasingly important criteria in the successful pursuit of global competitiveness.

This is evident in the number of investors turning towards assessment of environmental, social and governance (ESG) performance as important criterion for long term and profitable investment outcomes. Sustainable investment is emerging as the new global model of investment. In a study by the International Finance Corporation regarding the Middle East and North Africa’s preparedness for sustainable investment, Oman was found to be the most prepared and open to adapting sustainable investments1. Oman’s development strategies are rooted in the principles of sustainability, placing Oman at the forefront of the MENA region in terms of sustainable investment.

Vision for Oman’s Economy: Oman 2020 is based on the core principles of sustainability to ensure that Oman’s development and growth is focused on meeting the needs of today, without compromising the ability of future generations to meet their own needs.

Adoption of sustainability is the next step in meeting the needs of today’s society while safeguarding Oman’s long-term future. OOC began integrating sustainability management

and reporting into our operations because OOC recognises that they add value, and serve as catalysts for assessing and enhancing our performance. In the context of accountability, our sustainability report communicates information to our stakeholders about our social, economic and environmental performance as well as OOC Group’s overall impact on Oman. By creating this group-wide sustainability report that shares our full business contribution with our stakeholders, we are positioning ourselves at the forefront of business excellence in Oman.

Oman Oil Company’s mandate to invest in the future of Oman in alignment with the Vision for Oman’s Economy hinges on our ability to develop and invest in globally competitive companies in the energy and industry sector. Sustainable development provides the OOC Group with a business advantage in global markets as well as ensuring our ongoing positive contribution to the advancement of the Omani economy. OOC began integrating sustainability into our investments by measuring and reporting on our performance as part of a broad effort to build and present a complete picture of OOC’s impact on Oman. The next steps in this process centre on further alignment of our investments to best meet the goals and aspirations of Oman.

Oman 2020 is based on the core principles of sustainability to ensure that Oman’s development and growth is focused on meeting the needs of today, without compromising the ability of future generations to meet their own needs.

Oman Oil Company’s Domestic Operations

Oman Oil Exploration

& Production

Oman Gas Company

Oman Shipping Company

Salalah Methanol Co.

Takamul Investment Co.

S.A.O.C.

Oman India Fertiliser Co.

Oman Oil Marketing Company S.A.O.G.

Oman Oil Refineries & Petroleum Industries Company

Sohar Aluminium Company

Exploration & Production

Transportation & Infrastructure

Petrochemicals

Refining & Marketing

OMAn OIl COMPAny

Metals

1 Sustainable Investment in the Middle East and North Africa Region Report, International Finance Corporation, World Bank Group

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Overview

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Summary

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Oman Oil Company’s Sustainability Framework

OOC’s sustainability framework serves as the basis of the company’s strategy and alignment. Our sustainability framework highlights the most important focus areas in the measurement, management and implementation of sustainability for OOC Group. Our sustainability framework aligns and focuses the approach of the group to drive our operations towards improved performance and long-term return of all investments. OOC’s objectives were devised and outlined to align with the four objectives of the Sultanate’s strategic vision: Oman 2020.

Commitment to Accountability and Sustainability - discusses the role of governance, engagement and transparency in creating the foundation for responsible investment.

Contributing to a Strong Omani Economy - outlines the financial performance of OOC’s companies and describes the dedication to growth at the heart of OOC’s operations.

Investing in Oman’s Human Capital - focuses on the critical role of people in OOC Group’s operations and OOC Group’s commitment to building the capacity of the national workforce through investment in employees and Omani nationals.

Becoming a Steward of Environmental Sustainability - reviews OOC Group’s environmental performance and outlines our commitment to the development of environmental programmes in alignment with national objectives.

Elevating the Quality of Life in our Communities - presents OOC Group’s community investment and engagement activities in alignment with the Sultanate’s emphasis on social development.

The five sections of this report reflect the five key objectives of our sustainability framework.

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Overview

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Our Sustainability Framework

OmaniEconomicVision 2020

SustainableDevelopment and MacroeconomicFrameworks

Human Resources Development

Economic Diversification

Private SectorDevelopment

OOCObjectives

Create value for Oman through developing and investing in profitable businesses

Create employment opportunities and develop talent

Build a structured and diversified portfolio

Achieve operational excellence

5 Sustainability Objectives of OOC Group Companies

Demonstrating Commitment to Accountability and Sustainability

Contributing to a Strong Omani Economy

Investing in Oman’s Human Capital

Becoming a Steward of Environmental Sustainability

Elevating the Quality of Life in our Communities

MostRelevant

Stakeholders

Foreign and/or Domestic Private Sector Investors

Our Employees

Supply Chain

Our Portfolio Companies

Our Environment

Our Society

The Government(Shareholders)

• Ministry of Social Development• local nGOs • The Public Authority for

Investment Promotion & Export Development (PAIPED)

• Muscat Securities Market

• Supreme Council for Planning• Ministry of Finance• Ministry of Commerce & Industry• Ministry of Oil & Gas

• Ministry of Environment & Climate Affairs

• local environmental nGO’s (ie. Environment Society of Oman)

• Our Subsidiaries

• Ministry of Education• Ministry of Higher Education• OOC Human Resources

Department• Human Capital unit (Takatuf)• local educational institutions

• OOC and PC’s Contracts and Procurement Departments.

Accountability to StakeholdersOman Oil Company Group’s sustainability objectives consider the needs and aspirations of all stakeholders. We must understand who the key stakeholders are and what their

expectations of our company are, in order to best meet their needs. We have developed a map of our stakeholders and the key players in industry, government and the local community

who share in our operations and success. Please refer to the material issues analysis on pages 84 and 85 for details of stakeholder engagement and alignment.

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Overview

Performance

Stewardship

Communities

Summary

Performance

Demonstrating Commitment to Sustainability and Accountability

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Oman Oil Company Governance

Strong governance and commitment to integrity ensure that accountability is at the core of our operations. Accountability begins with our management team and our company-wide commitment to excellence and responsibility. OOC’s CEO works closely with the Board of Directors and OOC management team to build on OOC’s reputation for excellence in investment. Moving forward, Oman Oil Company is committed to building its reputation for accountability and governance through annual sustainability reporting and continual engagement with its stakeholders.

The Board of Directors is the highest governing body within Oman Oil Company. The responsibilities of the Board include oversight and development of company strategy, vision and direction. The Board of Directors consists of five members that are appointed by Royal Order and serve as independent, non-executive directors.

The Board of Directors meets at least four times a year. Board meetings include discussion of strategy and direction as well as engagement with representatives of various internal business units to discuss the company’s economic, environmental and social performance. The Board

also discusses opportunities, risks and compliance issues that are applicable to business operations.

Oman Oil Company’s Board of Directors is ultimately responsible for the company’s risk management. Included in these systems of risk management is a regular programme of internal and external audit of various aspects of the business. The Audit Committee of the Board reviews audit reports of legal compliance, projects, human resources, HSE, business continuity, investment monitoring, and information management and ensures mitigation plans are undertaken by management as corrective measures. This committee meets at least twice a year.

Chairman H.E. Nasser bin Khamis Al Jashmi

Undersecretary of Ministry of Oil & Gas

H.E. Sultan bin Salim Al Habsi

Undersecretary of Ministry of Finance

H.E. Eng. Ahmed bin Hassan Al Dheeb

Undersecretary for Commerce and Industry, Ministry of Commerce & Industry

Sheikh Salim Abdullah Al Rawas

Private Sector Representative

Mr. Salim Hasan Macki

Private Sector Representative

Board of Directors

Oman Oil Company Organisation Structure Overview

Performance

Stewardship

Communities

Summary

Chief AuditExecutive

Vice PresidentStrategy &

Performance

Vice PresidentDownstreamBusinesses

Vice PresidentEmerging

Businesses

Deputy ChiefExecutive

Officer

Finance & Accounting

legal

Corporate Affairs

Corporate Social

Responsibility

Chief FinancialOfficer

GeneralCounsel

Executive Management Committee

Board of Directors

Chief Executive Officer

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OOC’s sustainability programme has been met with great enthusiasm by the nine companies participating in our first sustainability report. Economic, social and environmental performance is measured using 23 key performance indicators (KPI) designed to capture the overall and company specific performance of OOC Group. On average, 20 indicators were reported on for 2011, amounting to 86% participation by OOC and its subsidiaries. A complete list of indicators can be found in the Performance Summary Index on pages 82 and 83 of this report.

OOC aims to act as a catalyst for the adoption of sustainability management and reporting among all of its subsidiaries. For our first report, we chose to present the aggregated performance of OOC Group because we believe that in the context of sustainability, it provides the most meaningful representation of Oman Oil Company’s contributions. Sohar

Aluminium has issued three annual sustainability reports beginning in 2009, making it the first OOC Company to issue a sustainability report.

While developing this report, we worked closely with the companies, laying the foundations for further engagement on sustainability in the future. Opportunities for strengthening performance continue to be realised through on-going evaluation and assessment of our core operations and organisational foundation.

As we continue our sustainability engagement process, we will work with all of our subsidiaries to ensure that our actions align with the objectives of our stakeholders.

OOC Group Sustainability Reporting

KPI REPORTInG

2009 2010 2011

Average number of KPIs reported 12 16 20

% Reported 53% 68% 86%

Overview

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Summary

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Performance

Contributing to a Strong Omani Economy

Overview

Performance

Stewardship

Communities

Summary

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The economy of Oman continues to excel, guided by strategic direction from the Government of Oman. Despite the global economic setbacks, the Omani economy has continued its trend of annual growth in GDP. In 2011, Oman’s economy achieved a 6% growth in GDP. Oman Oil Company Group contributed to this growth as its contribution to Oman’s GDP increased by more than 520 million OMR between 2009 and 2011. OOC’s investments have stimulated the growth and development of many industries in Oman. For example, OOC Group’s value added contributions to the chemical manufacturing sector have increased by more than 116 million OMR (238%) from 2009 to 2011. This growth included the development of two new companies, Salalah Methanol Company and Oman Aromatics, which provide new manufacturing capabilities in Oman.

Oman’s economic strategy, as outlined in the Vision for Oman’s Economy: Oman 2020, is focused on the development and diversification of the Sultanate’s economy. Investment plays a critical role in creating the necessary conditions for the development of the Omani economy, through infusion of capital and encouraging foreign direct investment and international partnerships. As a national leader in investment, Oman Oil Company facilitates the growth and development of the Omani economy by fully investing in new ventures or making new investments possible through international partnerships.

In an open international market, global competitiveness is a necessity for businesses to remain financially successful. The OOC investment strategy centres on developing it’s business in alignment with the Sultanate’s

national economic vision. We contribute to Oman’s economy directly through diversification and the value added by our companies. We contribute also indirectly through our local procurement policies, compensations and benefits, and the knowledge and expertise our companies bring to the market place.

Economic Overview

“ Providing appropriate conditions for the realisation of economic diversification and working toward the optimum utilisation of the natural resources and the geographically distinct location of the Sultanate.” Vision for Oman’s Economy: Oman 2020

OMAnI'S AnnuAl GDP GROwTH (%)2

Year 2006 2007 2008 2009 2010 2011

GDP annual growth (%) 6 7 13 1 4 6

2 www.worldbank.org, The World Bank Group database.

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The path towards diversification is already underway. From 1999 to 2010, Oman’s economy has built momentum through diversification away from petroleum-based activities. Oman Oil Company has played a significant role in supporting diversification efforts in alignment with the Oman 2020 Vision. The investment in Sohar Aluminium

and OMIFCO is a clear example of OOC’s contribution towards the diversification of the economy. In 1999, the chemical fertiliser and aluminium industries did not play a significant role in the Omani economy. In 2010, both these industries combined made up over 4% of Omani exports. The importance of diversified investments (such as the establishment of

Sohar Aluminium) can be seen by the multiple opportunities they create for downstream, aluminium-based industries.

Percentage of oil, gas and other major exports as a percentage of total Omani export.3

3 The Observatory of Economic Complexity, Data source: UN Comtrade http://atlas.media.mit.edu/

MAjOR ExPORTS In 1999

70% petroleum oils, crude2.4% petroleum oils, refined0.01% petroleum gases

MAjOR ExPORTS In 2010

61% petroleum oils, crude12% petroleum gases4.2% petroleum oils, refined2.2% unwrought aluminium 2.0% mineral or chemical

fertilisers

Oman Oil Company’s investments are concentrated on the development and diversification of the Omani energy sector. OOC subsidiaries are diversified across the upstream and downstream of the oil and gas industry. The diversification strategy builds upon

the existing strength of the energy sector while providing new opportunities for growth and development.

Our investments serve as a catalyst to develop partnerships with global industry such as

TAQA/ADWEA, IFFCO, KRIBHCO, Rio Tinto Alcan and Vale S.A. Our international investment partnerships elevate our international profile while providing opportunities to leverage existing knowledge and advanced technology, thus enhancing our performance.

Diversified Investments

Refining and marketing Petrochemicals and metals

Transportation and infrastructure Exploration and production

Overview

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Summary

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OOC Group companies are considered pioneers in the economy of Oman, and looked upon to play a dynamic leadership role in the future of Oman’s economy. In 2011, OOC was selected to give a presentation to the Majlis A’Shura, Oman’s legislative council, in which OOC described its performance, overall growth of its investments and outlined a framework for future development and investment. Furthermore, OOC Group continues to be lauded for its excellence in Omani industry. Sohar Aluminium was recognised for their leadership and excellence, receiving His Majesty’s Cup Award for Top Five Factories in Oman in both 2010 and 2011.

OOC Group makes significant contributions to the Omani economy, representing 3.62% of Oman’s total GDP in 2011. OOC Group contributed more than 1 billion OMR in value added contributions. OOC Group’s role as a catalyst for the growth and development of the Omani economy aligns with the economic and

development aspirations of the Sultanate as outlined in Oman 2020 Vision.

OOC Group plays a significant role across multiple sectors from manufacturing to retail and marketing. Most notably, OOC Group made up 35.79% of Oman’s industrial manufacturing industry in 2011, representing more than 441 million OMR of value added contributions.

Our investments infuse capital into the national economy and create the foundation for the future development of the Omani economy. For example, the Aluminium Roll Facility initiated in 2011 by Takamul will become operational in 2014, providing processing and manufacturing services to complement Sohar Aluminium’s smelting plant in the Sohar Industrial Estate. In addition, OOCEP’s role in the development of the Musandam Gas Plant represents the future of integrated energy industry operations, generating Liquid Petroleum Gases (LPG) and natural gas processed from the existing West

Bukha platform. These projects and many others create new opportunities for further development of industries, contributing to the diversification and growth of Oman’s economy.

In 2011, OOC Group generated more than 4 billion OMR in revenues. The revenue increased by more than 1.5 billion OMR from 2010 to 2011, an increase of 48.5%. Moving forward, we strive to grow our revenue streams in order to create new opportunities for innovation and expansion within our operations.

Direct Economic Contribution

OOC GROuP DIRECT ECOnOMIC COnTRIBuTIOn 2011

2011 Total Contribution to GDP (OMR) % of Oman GDP Total

OOC Group 1,012,556,246.154 3.62

OOC GROuP DIRECT ECOnOMIC COnTRIBuTIOnS: 20114

Company Sector Value Added % Share of Sector GDPOOC share of % share

of sector GDP

OSC, OGC Transport 19,324,199 1.298 0.260

OMIFCO, SMC Basic Chemicals Manufacturing 183,780,746 10.768 6.93

SAC, Orpic Other Manufacturing 441,716,415 35.794 13.075

Oman Oil Marketing Retail and Marketing 18,657,009 0.916 0.449

PERFORMAnCE

2009 2010 2011

Total revenues (OMR)5 2,413,274,023 3,292,968,251 4,890,725,936

4 This data does not include the contributions of Takamul, or OOCEP.

5 The revenues presented represent the consolidated revenues of all Oman Oil Group companies. As such, these figures differ from the reported revenues of OOC based on OOC’s ownership stake in each Oman Oil Group company.

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Oman Oil Company aims to make a strong contribution to Oman through commitment to policies that encourage engagement with local economies and communities. Local procurement is one of OOC Group’s greatest opportunities to contribute to the development and success of local businesses and communities. In 2011, on average 53% of goods and services were sourced from Oman. From 2010 to 2011 average spending on local procurement per company decreased from 58.3% to 53% for the six comparable companies. Of these six companies, two

increased local procurement while three decreased and one remained at the same amount. Moving forward, the OOC Group strives to develop strategies that promote local procurement and create connections with our communities through commerce.

Sohar Aluminium’s local procurement policies include preferential procurement of goods ranging from paper products to foods to support local communities and SMEs. In 2011 Sohar Aluminium integrated a commercial supply chain section into its website to make

the process for procurement bids more transparent and accessible to local and small businesses. Sohar worked with 1,197 suppliers in 2011, 61% of which were local. As part of Sohar’s commitment to supporting local business development, the company hosted a workshop for more than 100 vendors in 2011. This workshop emphasised best practices in business, safety, and localisation. Through regular engagement with its suppliers, Sohar Aluminium has established strong relationships and contributed to the success of local businesses in Oman.

OOC Group provides competitive compensation to its employees in line with industry standards. By investing in our employees, we are contributing to the overall growth of Omani society and elevating the quality of life in accordance with the Oman 2020 Vision goals. In 2011, OOC Group paid more than 97 million OMR to employees in compensation and benefits. Of the seven comparable companies, total compensation and benefits payments increased by more than 9 million OMR from 2010 to 2011, an increase of 21%, reflective of a general increase in average pay over this period together with a 16% increase in the workforce. Our employees are our most significant investment; salaries are just one of the ways in which we invest in the growth and success of our employees. The Investing in Our Human Capital section (pg. 40) includes further details regarding our human resources practices.

Indirect Economic Contribution

PERFORMAnCE: lOCAl SPEnDInG

2009 2010 2011

Spending on locally-based

suppliers/materials6 (%)

52.0 58.3 53.0

# of reporters 3 6 8

REPORTInG TREnDS 2010-2011

2 Companies increasing local spending

3 Companies decreasing local spending

1Companies with no change in local spending

2Companies with no comparable local spending data

6 These figures represent the simple average, not the aggregate calculation of actual local spending from all reporting companies.

COMPARISOn 2009-2010

# of comparable reporters % Change

3 0COMPARISOn 2009-2010


5 13.94



6 -8.26

PERFORMAnCE: EMPlOyEE COMPEnSATIOn

2009 2010 2011

Compensation and benefits paid to employees (OMR)

33,507,723 46,914,368 97,400,403



6 Companies increasing employee compensation

1 Companies decreasing employee compensation

0 Companies with no change in employee compensation

2 Companies with no comparable employee compensation data

Overview

Performance

Stewardship

Communities

Summary

4140



Report


Performance

Investing in Oman’s Human Capital

Overview

Performance

Stewardship

Communities

Summary

4342



Report


“ Developing human resources and upgrading the skills of Omani nationals to keep abreast of technological process to manage the dynamics of this progress in a highly efficient way, and face the ever-changing domestic and global conditions.” Vision for Oman’s Economy: Oman 2020

The Vision for Oman’s Economy: Oman 2020 considers development of human capital as a significant dimension and ultimate goal of the vision. The vision approved a strategy that focuses on the human resources capacity to generate and manage technological changes, while also adapting to continually changing international conditions to meet current and future labour demands. Oman 2020 recognises that to remain globally competitive the Sultanate must focus on knowledge-based industries and the development of a skilled workforce. The success of local industries and the nation’s economy will be closely linked to the industries’ ability to maintain knowledge and technical excellence within its current workforce, as well as developing the expertise of future entrants to the workforce.

Oman’s rapidly growing and young population shapes the overall human capital needs and direction of investment that is being developed. In 2010, the average age of the Omani population was 25.2 years old, with 63% of the population aged 29 years and younger7.

The combination of local youth population and expatriate workforce creates a unique set of challenges. The young, diverse, and growing Omani population presents a set of challenges for both private and public sectors in their path

towards maintaining global competitiveness. The diversity of the workforce due to the large expatriate population helps to advance the Omani economy and maintains its technological and professional relevance within the current international context. However Oman 2020 sets a target of 35% Omanisation to maintain a balance between the qualified and knowledgeable expatriate workforce, protect local culture and heritage, and develop and employ the local population. Additionally, the population growth rate predicts that over a quarter of a million Omanis will enter the workforce within the next decade. Accommodating such numbers does not only rely on providing the opportunities, it also depends on preparing young people for the job market.

In line with Oman 2020, OOC Group understands the imperative of developing the human capital of Oman for the benefit of the national economy, as well as OOC companies. To achieve this mission, OOC Group focuses first and foremost on providing a large number of job opportunities through its subsidiaries in Oman, while maintaining Omanisation as a high priority across the group. An overarching principle of OOC Group is to provide an attractive workplace that prioritises the satisfaction of employees along with their health and safety.

Vision for Oman’s Economy: Oman 2020

7 United Nations, Department of Economic and Social Affairs, Population Division

Overview

Performance

Stewardship

Communities

Summary

4544



Report


OOC Group’s employment strategy emphasises growth as well as professional development in order to meet the continually changing needs of our companies.

In 2011, all ten OOC Group companies presented in this report reported both their direct and indirect employment numbers8. In 2011, the group employed 4,189 full time direct employees and 5,865 indirect employees. For the nine companies that reported employment data from 2009 to 2011, full time employment levels have increased by 35% from 2009 with 785 new full time positions created. OOC Group is currently refining its methodology for tracking indirect employment to provide the most accurate information in future reports.

Employee turnover improved, decreasing from 8.3% in 2010 to 7.4% in 2011. Of the 10 reporters in 2011, three companies increased turnover rates while six reduced their turnover rates. Considering the nine comparable companies from 2010 to 2011, turnover decreased by 48%, indicating strong employee retention by OOC Group during this period.

Providing Job Opportunities

8 For the purposes of this report, indirect employee refers to employees who are contracted by OOC Group for full or part time employment.



9 3.51



9 14.81

TOTAl InDIRECT EMPlOyEES 2011

Total indirect employees (#) 5865

# of reporters 10

PERFORMAnCE: Full TIME EMPlOyEES

2009 2010 2011

Number of full time employees

2,252 2,331 4,189


Note: Total number of employees in OOC group including the number of employees in the companies weren’t participated in this report is 7,211


9 Companies increasing employment

0 Companies decreasing employment

0Companies with no change in employment

1Companies with no comparable employment data



7 8.17



9 -47.85

PERFORMAnCE: TuRnOVER

2009 2010 2011

Turnover (%) 6.9 8.3 7.4

Turnover (net) 149 184 313



3 Companies increasing turnover

6 Companies decreasing turnover

0 Companies with no change in turnover

2Companies with no comparable turnover data

Overview

Performance

Stewardship

Communities

Summary

4746



Report


In 2010, Oman Oil Company established its Takatuf unit to develop the human capital of OOC Group. The unit consists of 19 employees who provide a variety of services to OOC Group including talent management, employee training and HR systems management. Takatuf brings expertise in human capital development to each of OOC’s group companies in an effort to create a stronger, more skilled workforce to support the social and economic development of the Sultanate.

Takatuf is built on six main functions and themes. Each of the six functions has a distinctive goal, actions and activities.

Established in late 2010, Takatuf’s first year of 2011 aimed to establish the unit’s foundations. Takatuf has sought to create a training and talent management programme for OOC Group. Furthermore, Takatuf has established an online e-learning portal to provide on-demand professional development for employees. They have worked to develop global partnerships including London Business School and London University to build the group’s talent pool to meet international standards. Building talent from within has contributed to the success and growth of OOC Group, while helping to develop Oman’s skilled workforce.

In the future, Takatuf aims to: - Develop an employee relations framework for

the entire group.

- Create a talent assessment programme and build a database of the talent pool in Oman.

- Conduct a feasibility study to build a training centre for the OOC Group.

- Conduct comprehensive measurement and tracking of employee demographics.

- Develop educational policies in association with Oman Ministry of Education to improve the national education curriculum in alignment with workplace demands.

FunCTIOn GOAl ACTIOnS AnD ACTIVITIES

1 Talent Management Build a talent pool for OOC Group

- Employee exchange programme/rotation programmes - Employee leadership development programme - Improve professional development programmes for employees

2 Information Systems Enhance information sharing between business units

- Enhance information exchange by establishing an IT library on the internet

3 Performance Management

Improve employee retention and satisfaction

- Improve performance assessment and recognition programmes - Create a performance-based reward system

4 Training Develop human capital - Shared training centre to serve all training needs for entire OOC Group - Establish an e-learning system for the OOC Group employee training programme - Vocational and technical training and workshops - Improve the skillset and capacity of the CSR and HR officers of the OOC Group through

intensive training

5 Employment Maintain role as employer of choice

- Employ and attract the highest quality of talent - Improve links with educational institutions inside and outside Oman

6 Improve the HR Departments

Improve the human capital of each company within the group

- Provide support to the OOC Group’s HR units to enhance their performance

Takatuf

Takatuf means ‘shoulder to shoulder’ in Arabic, and represents unity and strength within the community.

Overview

Performance

Stewardship

Communities

Summary

4948



Report


OOC Group recognises the importance of providing opportunities for youth employment, given Oman’s population demographics. Youths, defined as individuals from age 18–29 years old, play a critical role in the current and future landscapes of the Omani workforce. Our youth employment percentages have decreased from 2009 to 2011 because the growth in the workforce size increased at a higher rate than the rate of youth employment. Nonetheless, the net amount of young people reported as being employed by the OOC Group reached 1,202 in 2011. In addition, the number of youths employed increased by 7.61% from 2010 to 2011 for the nine comparable companies. Of these nine comparable reporters, seven increased their youth employment while two decreased the number of youths employed from 2010 to 2011. Moving forward, OOC Group is committed to continuing its investment in youth employment through outreach, training, and internship programmes.

OOC Group strives to meet and exceed the Sultanate’s Omanisation goal in industry of 35%, viewing Omanisation as more than simply an employment rate. Omanisation is the development of a skilled national workforce that meets labour market demands.

Our combined Omanisation rate for 2011 was 70.1%, an increase from 66.8% in 2009. All 10 of the companies included in this report provided Omanisation data for 2011. Of the nine companies with comparable data, five companies increased their rate and three

reporters decreased their Omanisation rates. Between 2009 and 2011 the total number of Omanis employed by the nine reporting companies increased by 375 people. Every company represented in this report has exceeded the Sultanate’s goal of 35% Omanisation. In 2011, the lowest rate of Omanisation was 47% while the highest was 93%. As efforts to build and develop the Omani workforce continue, the goal of supporting the development of national talent will continue to play a critical role in OOC Group’s strategy.

Oman Oil Group companies have developed and implemented numerous training and professional development programmes to support and increase the roles for Omanis in our workforce. For example, Orpic, one of the largest OOC Group companies, has developed and implemented a formal professional development programme that enhances the leadership skills of Omani employees. A complete overview of our efforts in regard to Omanisation and human capital development is outlined in the Elevating the Quality of Life in our Community section on page 68.

Youth Employment Omanisation


# of comparable reporters

% Change in number of youths employed

9 -7.78



% Change in number of youths employed

10 7.61

PERFORMAnCE: yOuTH EMPlOyMEnT

2009 2010 2011

Youth employment (18-29) (aggregated %) 34.8 31.0 28.7

Youth employment (aggregated net) 784 723 1,202


PERFORMAnCE: OMAnISATIOn

2009 2010 2011

Omanisation rate (aggregate %)

66.8 69.0 70.1



7Companies increasing youth employment

2Companies decreasing youth employment

0Companies with no change in youth employment

1Companies with no comparable youth employment data


5 Companies increasing Omanisation

3 Companies decreasing Omanisation

2Companies with no change in Omanisation

1Companies with no comparable Omanisation data



9 6.9



9 16.9

Overview

Performance

Stewardship

Communities

Summary

5150



Report


PERFORMAnCE: SPEnDInG On EMPlOyEE TRAInInG

2009 2010 2011

Total spending on employee training (OMR) 2,976,697 2,673,470 5,170,108




7 -14.45



9 49.35


9Companies increasing spending on employee training

0Companies decreasing spending on employee training

0Companies with no trend in spending on employee training

1Companies with no comparable spending on employee training data

Employee Training and Human Capital Development

OOC Group is dedicated to developing the intellectual and technical capacities of our employees through on-site training, employee assessments and career development programmes. As an employer of choice, we make robust investments in employee engagement and human capital development.

We offer a comprehensive professional development and training programme that provides opportunities for growth to all of our employees. In 2011, OOC Group invested more than 5 million OMR in employee training. In the nine comparable companies, employee training funding increased by more than 1 million OMR from 2010 funding. All nine companies with comparable data from 2010 to 2011 reported an increase in their spending on employee training.

The focus of our professional development and employee training programmes is

on developing the skills of our Omani employees. Our expatriate employees receive training as well, however our training strategy focuses on training for Omani employees as our expatriate workers generally join with a higher skill level and knowledge base.

Oman Oil Company invests in the quality of training for our employees by augmenting our internal training capacity with that of national and regional training institutions. In 2010, OOC implemented a formal assessment programme for all of its direct employees, conducted by an external talent development consultancy. This evaluation results in every employee creating a professional development plan allowing for ongoing professional development reviews. Both Sohar Aluminium and Orpic operate e-learning programmes for their employees, providing on-demand access to training and development programmes to enhance

employees’ professional development and human capital development.

We strive to continually strengthen our training programme to meet the needs and aspirations of our employees. For example, OOCEP uses a formal leadership development programme to provide opportunities for employees, specifically Omanis, to develop leadership skills to prepare them to take management positions within OOCEP. Since 2003, OSC has operated its Seafarer Programme, to provide training for employment opportunities for 30 seamen during an internship in Australia and the UK. In addition, OSC has entered into an agreement with the International Maritime Organisation (IMCO) to provide technical training for 100 cadets beginning in 2012.

Overview

Performance

Stewardship

Communities

Summary

5352



Report


OOC Group is committed to creating an inclusive and diverse workforce by providing opportunities for employment to all eligible candidates as outlined in HR policy guidelines. In 2011, OOC Group workforce included 322 women, representing 7.7% of the total workforce. In the nine companies with comparable data, female employment has increased by 44.9% from 2009 to 2011. Our performance with regard to female employment is evidence of our dedication to providing opportunities and training to women, so that we can contribute to the development of the Omani workforce in alignment with the Oman 2020 Vision.

PERFORMAnCE: FEMAlE EMPlOyMEnT

2009 2010 2011

Female employment (aggregated %) 6.1 7.1 7.7

Total number of females employed (group aggregate) 138 166 322




% Change in number of females employed

9 19.6



% Change in number of females employed

9 20.9


5Companies increasing female employment

4Companies decreasing female employment

0Companies with no change in female employment

1Companies with no comparable female employment data

Female EmploymentOverview

Performance

Stewardship

Communities

Summary

5554



Report


A foundational principle for our investment in the human capital of Oman is to ensure a healthy and safe workplace for all employees. Process safety and employee safety are the keystones of maintaining operational excellence while minimising risk of injury.

In 2011, OOC Group experienced one fatality at Oman Gas Company as a result of a vehicle collision caused by an unauthorised, non-company vehicle driving the wrong direction on an OGC right of way pipeline road. Additional precautions have been taken by OGC to enhance security of roadways and encourage road safety. Ultimately, OOC Group’s goal is to reach zero lost time injuries (LTI) and zero fatalities.

In 2011, the OOC Group achieved an employee lost time injury rate (LTIR) of just 0.3 (per 1 mn m-h) during more than 7 million man-hours of operations. In 2011, seven companies reported zero LTI. Total LTIR decreased by more than 50% from 2009 to 2011.

Similarly, we achieved a total recordable injury rate (TRIR) of just 2.1 (per 1 mn m-h) a significant decrease from 7.0 in 2010. The TRI for eight comparable companies decreased by almost 73% from 2010 to 2011.



6 -16.12



8 -73.72


1 Companies increasing fatalities

0 Companies decreasing fatalities

7 Companies with no change in fatalities

2Companies with no comparable fatalitiy data


1 Companies increasing TRIR

3 Companies decreasing TRIR

4 Companies with no change in TRIR

2 Companies with no comparable TRIR data

Health and Safety

PERFORMAnCE: FATAlITIES

2009 2010 2011

Fatalities - Employees and

Contractors1 0 1


PERFORMAnCE: TRIR – EMPlOyEES

2009 2010 2011

TRIR – Employees (per 1 mn m-h) 4.3 7.0 2.1

Total number of recordable injuries - Employees 24.0 39.0 15.0

Man-hours - Employees 5,574,972 5,538,536 7,023,733


Overview

Performance

Stewardship

Communities

Summary

5756



Report


OOC Group’s commitment to safety inspires us to invest in the latest technologies and trainings in order to create the most suitable workplace for our employees. Safety begins with strong employee management and training systems that reduce risk and provide necessary skills training. Oman Oil Marketing implemented a health safety security and environment (HSSE) Passport System to track and reward employees for completing essential safety and procedural trainings. Similarly, OOCEP began using Oracle HRMS system to manage and track employee trainings and augment overall safety through its state of the art employee management system. In 2011, Sohar Aluminium was awarded the prestigious BRAVO! Award from Rio Tinto Alcan in recognition of Sohar passing 3 million man-hours without any lost time incidents.



6 -0.9



8 -0.36


0 Companies increasing LTIR

1 Companies decreasing LTIR

7 Companies with no change in LTIR

1Companies with no comparable LTIR data

PERFORMAnCE: lTIR – EMPlOyEES

2009 2010 2011

LTIR – Employees (Per 1 mn m-h) 0.9 0.4 0.3

Total number of lost time injuries - Employees 5.0 2.0 2.0

Man-hours Employees 5,574,972 5,538,536 7,023,733


Investing in SafetyOverview

Performance

Stewardship

Communities

Summary

5958



Report


Overview

Performance

Stewardship

Communities

Summary

Stewardship

Becoming a Steward of Environmental Sustainability

6160



Report


Environmental Challenges Our Environmental Activities

The Sultanate of Oman, like many countries, faces a variety of environmental challenges including climate change, limited freshwater supply, and increased energy consumption. These challenges present opportunities for innovation and improvement for companies and government alike as outlined in Oman 2020 Vision, which emphasises the need for development characterised by conservation of the environment.

Environmental sustainability for OOC Group represents a commitment to conducting its operations in a way that minimises environmental impact while enhancing social wellbeing. The emphasis of Oman Oil Company’s environmental strategy focuses on reducing resource consumption, in alignment with national standards as outlined in Royal Decree No. 114/ 2001 and the Oman 2020 Vision. Additionally, OOC’s strategy emphasises opportunities for increased efficiency and productivity through investment

in the latest technologies and implementation of environmental programmes such as SMC’s greenbelt wastewater treatment system. Moving forward, OOC Group strives to develop new environmental management programmes in alignment with the core business objectives of the company. OOC Group’s commitment to environmental stewardship begins with monitoring and measuring its environmental impacts.

All investments made by Oman Oil Company undergo an environmental impact assessment to ensure compliance and alignment with OOC Group’s environmental policies. OOC Group act in compliance with all local and national environmental laws and regulations. Following an initial assessment of our environmental impact, OOC Group is working to develop and implement programmes and policies that reduce environmental impact while maintaining operational excellence.

“ …creating the conditions for stable macro-economic climate with the aim of developing a private sector capable of the optimal use of the human and natural resources of the Sultanate, using methods characterised by efficiency and conservation of environment.” Vision for Oman’s Economy: Oman 2020

Catalysing the uptake of environmental stewardship in the energy and investment sectors of Oman is one of OOC Group’s core principles. Environmental stewardship begins with a strong strategy. Sohar Aluminium has implemented a five year, environmental, health and safety roadmap that outlines fundamental environmental safety and performance strategies in alignment with core business operations. Rooted in the company’s “zero harm” operational philosophy, Sohar Aluminium has established the framework for creating value while enhancing performance in a responsible manner.

Creating and implementing environmental management strategies is the next step on the path to environmental excellence for OOC Group. In alignment with international standards, two OOC companies, OSC and OGC, have achieved ISO: 14001certification for their environmental management systems. In 2011, OMICFO implemented an integrated management system that helped the company

to achieve a 1.2% reduction in operational costs. Integrated strategies represent the next level of performance excellence now and into the future, by adding value and improving operational performance.

OOC companies are investing in the future through investment in environmental performance. Additionally, Oman Shipping Company operates under a safety and environmental policy that uses a “zero tolerance” approach to environmental management and safety. Improvements in environmental performance often create positive, synergistic social and economic outcomes. The environmental and economic savings resulting from improved safety performance and minimisation of risks build strength into OSC’s operations. The role of environmental management in operations continues to accelerate as OOC Group realises the potential of sustainability to create value for its stakeholders.

Overview

Performance

Stewardship

Communities

Summary

6362



Report


OOC Group recognises the challenges and risks associated with climate change attributed to the emission of greenhouse gases (GHG’s) from the combustion of carbon-based fuels. OOC Group understands the importance of developing non-petroleum alternatives for energy and industry as part of the Sultanate’s commitment to diversification of the Omani economy. Moving forward, OOC Group aims to develop a formal climate change policy in alignment with company objectives.

In 2011, the total greenhouse gas emissions for seven reporting companies were 11,763,582 tonnes CO2 equivalent. GHG emissions for the three companies that provided comparable data decreased by 14.7%, or 566,867 tonnes, between 2010 and 2011. Most significantly, Sohar Aluminium achieved a 19.5% reduction in GHG emissions from 2010 to 2011 as a result of improved operational efficiency, which reduced the amount of CO2 generated per tonne of aluminium produced. Moving forward increased emphasis on monitoring and assessment of GHG emissions will increase reporting and lay the framework for comprehensive assessment to benchmark OOC Group performance.

Developing comprehensive GHG emission reduction strategies often begins with conducting an assessment of GHG emissions in company operations. In 2011 Orpic and Sohar Aluminium began an assessment of their GHG emissions and will use 2011 data as the baseline for the creation of a comprehensive strategy.



2 2.01



3 -14.74

Climate Change

PERFORMAnCE: GREEnHOuSE GAS EMISSIOnS

2009 2010 2011

Total greenhouse gas emissions (tonnes) 3,770,374 3,846,566 11,763,582



2 Companies with increased emissions

1 Companies with decreased emissions

0Companies with no change in emissions

4Companies with no comparable emissions data

Other Emissions While they are not greenhouse gases, nitrogen oxide (NOx) and sulphur oxide (SOx), which are released during the combustion of fuels for energy creation and industrial processes, have a negative impact on environmental air quality. As an example of OOC Group’s leadership, in 2010 SMC installed a state-of the art stack emissions system and ultra-low NOx burners that minimise NOx emissions. This was the first system of its kind to be installed in the Dhofar region.

Overview

Performance

Stewardship

Communities

Summary

6564



Report


Gas flaring occurs during normal plant operations and also during emergency procedures. Planned flaring is used to relieve pressure from flammable gases. The combustion of fuel during flaring is one of the main contributors to the environmental impact of operations by releasing CO2 into the atmosphere. In 2011 five reporting companies recorded 68.0 MMSCM of gas flaring. From 2010 to 2011, the four comparable reporters had a 47% increase in gas flaring. Programs and procedures to reduce flaring in OOC Group’s operations continue to be developed and implemented.

Efforts to reduce flaring create opportunities for synergy in operations such as Orpic’s fuel gas integration project. In 2011 Orpic began a fuel gas integration project to decrease flaring by installing a pipeline from its Sohar Refinery to the Orpic Aromatics Plant where it will be used. This project, which will be completed in 2012, will result in both economic and environmental savings through reduction of flaring and reallocation of energy to the Aromatics Plant.

Energy consumption represents one of OOC Group’s most significant resource usages. Reduction strategies will result from innovation and investment in efficient technologies. Efforts to improve operational efficiency continue to develop as new technologies become available across many industries.

In 2011, the combined electricity consumption was 19,679,685 GJ for nine reporting companies. The six comparable companies from 2010 to 2011 increased electricity consumption by 2.04% during this period. In the future, Oman Oil Company strives to develop collaborative energy usage and reduction.



2 -29.88



5 4.94



4 47.10



6 2.04

Flaring Energy Consumption

PERFORMAnCE: FlARInG

2009 2010 2011

Total flaring (MMSCM) 51.2 40.82 68.0


PERFORMAnCE: ElECTRICITy COnSuMPTIOn

2009 2010 2011

Total electricity consumption (GJ) 18,377,482 19,286,335 19,679,685



2 Companies increasing flaring

1 Companies decreasing flaring

1 Companies with no change in flaring

1Companies with no comparable flaring data


4Companies increasing electricity consumption

3Companies decreasing electricity consumption

0Companies with change in electricity consumption

2Companies with no comparable electricity consumption data

Overview

Performance

Stewardship

Communities

Summary

6766



Report


Fuel consumption represents an additional opportunity for improvement for OOC Group. Fuel consumption is primarily attributed to shipping, large vehicles and power generation, with additional consumption by small vehicles. Moving forward, we strive to introduce efficiency strategies and consumption guidelines to minimise fuel consumption while maintaining business operations.

In 2011, total fuel consumption was 127,057,994 GJ for eight reporting companies. The five comparable companies recorded a 6.4% increase in fuel consumption from 2010 to 2011, which can be attributed to the growth of operations.

Reduction of fuel and electricity consumption begins with an assessment of current operations. This report is another step towards comprehensive improvement through assessment and reporting on consumption. OOC Group strives to develop and implement strategies that improve environmental performance while maintaining operational excellence. Oil and gas sector operations can maximise efficiency using pipeline leak detection and management systems. OGC and Oman Oil Marketing have both implemented state-of-the-art leak management and detection systems to improve operations and enhance safety by reducing the risk of leaks and operational disruptions.



5 6.40

Fuel Consumption

PERFORMAnCE: FuEl COnSuMPTIOn

2009 2010 2011

Total fuel consumption (GJ) 93,971,774 118,436,773 127,057,994

# Of reporters 4 5 8


3Companies increasing fuel consumption

2Companies decreasing fuel consumption

0Companies with change in fuel consumption

3Companies with no comparable fuel consumption data



4 26.03

Oman’s limited water supply makes conservation and reduction of water usage an imperative component of environmental sustainability in both the national and business context. Since water is a limited and precious resource in Oman, monitoring and reduction of water consumption is an essential part of OOC Group’s environmental stewardship programmes. Water is used in OOC Group operations as part of manufacturing processes, in cooling systems, and for general cleaning. Employees consume additional potable water. The success of water treatment and recycling programmes in some of our companies sheds light on future opportunities for improvement.

Water is used in many OOC Group operations, amounting to 3,621,977 cubic metres of water consumed in 2011 by nine reporting companies. Of the seven comparable

companies from 2010 to 2011, water consumption increased by 12.8%. Moving forward, increased emphasis on conservation and reduction of water usage will be achieved through water audits, improvement in operational efficiency and installation of water efficient technology across all sectors of OOC Group operations. Water treatment and recycling programmes represent the next level of operational excellence for OOC Group. OOCEP operates a reed bed system to treat all wastewater in their Block 60 operations. The reed bed system for sewage and grey water treatment has resulted in reductions in power and chemical consumption compared with traditional sewage treatment systems. Additionally, treated effluent water from SMC’s operations is used to create a “greenbelt” on its premises, reducing soil erosion and enhancing the plant aesthetic with landscaping.



5 50.19



7 12.81

Water Consumption

PERFORMAnCE: wATER COnSuMPTIOn

2009 2010 2011

Total water consumption (m3) 1,850,092 3,194,784 3,621,977

# Of reporters 5 7 9


6Companies increasing water consumption

1Companies decreasing water consumption

0Companies with change in water consumption

2Companies with no comparable water consumption data

Overview

Performance

Stewardship

Communities

Summary

6968



Report


Communities

Elevating the Quality of Life in our Community

Overview

Performance

Stewardship

Communities

Summary

7170



Report


OOC Group recognises that building strong relationships with our communities is of mutual benefit, and creates new opportunities for engagement and growth. Our operations are located in nine communities throughout Oman, including Muscat and Sohar. Community engagement programmes exemplify our role as a business leader in Oman and are an imperative part of our commitment to elevating the quality of life for Omanis. OOC Group’s investment in communities also provides an outlet for employee engagement and acts as a mechanism for partnerships between OOC companies and other leading organisations such as OPAL. Our programmes focus on three main areas: building capacity, training for employment and supporting entrepreneurship and small businesses.

In 2011, OOC Group contributed more than 3 million OMR to community investment projects and charities. In the seven comparable companies, total community investment increased by 148% from 2010 funding levels. Our community engagement programmes fund a variety of social and cultural activities, many of which will continue into 2012. Beyond our fiscal contributions, the Group takes pride in delivering on our social responsibilities and duties through volunteering and community programmes.

OOC’s community investment strategy aligns with the Oman 2020 Vision to support small and medium enterprise (SME), human capital and private sector development in local and national contexts. Our support for SMEs encourages the growth of local economies, while providing opportunities for women and young people to earn income and develop business skills through entrepreneurship. Development of the private sector through advocacy for and investment in business creates employment and growth opportunities for the future success of the Omani economy. Human capital development contributes to the overall wellbeing of Omani society by providing job skills training and enrichment opportunities for Omanis. Emphasis on job creation and economic development continues to increase as the Omani economy grows to meet the needs and aspirations of its people. As a leader in the energy sector, Oman Oil Company takes pride in fulfilling the vision of the Sultanate by supporting job creation, human capital development and community enrichment programmes.



5 64.46



7 148.47

Our Communities

PERFORMAnCE: COMMunITy InVESTMEnT

2009 2010 2011

Total community investments (OMR) 742,448 1,260,191 3,279,133



5Companies increasing community investment

1Companies decreasing community investment

0Companies with no change in community investment

2Companies with no comparable community investment data

Overview

Performance

Stewardship

Communities

Summary

7372



Report


OOC Group invests in training and educational opportunities for Omani youth as part of our commitment to supporting the development of human capital in Oman.

Building the capacity of the Omani workforce via skill building and technical training programmes contributes directly to the development of the Omani workforce. Through our training programmes and educational workshops, we strive to unlock the potential of individuals, build local economies and improve the workforce of Oman.

OOC’s Qudrat Youth Social Responsibility Project provides young Omani civil society with the knowledge and professional skills to contribute to their communities and workforce more effectively. The project addresses important themes such as strategic planning, communication skills and advocacy through structured lectures and presentations. In 2011 Oman Oil Company provided the opportunity for 41 Omani young people to participate in the Qudrat Youth Social Responsibility Project.

In 2011, OOC launched the “My Job, My Oath” national awareness programme built on one-day workshops held around the Sultanate. The aim of this programme is to educate Omanis on their role and responsibility in

building the nation. Workshop topics include increasing productivity, creating a healthy work environment and the principles of Omani labour law. “My Job, My Oath” is run in partnership with the Oman Association for Petroleum Services. In 2011, 367 Omani private sector employees participated in this programme.Supporting education is a pillar of OOC Group’s efforts to strengthen Omani society through human capital development. As part of its community engagement programmes, SMC

sponsored scholarships for 10 young people from low-income families to pursue engineering degrees at Dhofar University. These youths will focus on a variety of engineering and technical skills including instrumentation, engineering maintenance and mechanical engineering in preparation for employment in the energy or industrial sectors.

Developing Future Leaders of Oman

OOC believes that investing in today’s youth is investing in Oman’s future. In 2010 OOC launched the Takatuf Scholars Programme to increase investment in Oman’s youth and foster leadership in the next generation. Takatuf Scholars is an innovative programme for high school students designed to prepare Oman’s most talented young people for personal and professional success. We are proud to support the Takatuf Scholars Programme as part of our commitment to investing in Oman and its social and economic development. It is a unique programme that focuses on developing adaptable leaders who are well-rounded in the Omani culture and economy within the global context. The programme aims to equip young people with the self-motivation and aspirations to propel Oman to a new level of economic and social prosperity.

The Takatuf Scholars Programme is an integrated enrichment programme for students completing their secondary school studies. It consists of a residential summer programme followed by a series of independent learning assignments to be completed during the first semester of Grade 12. Each year, 60 Grade 11 students are selected as Takatuf Scholars. Secondary school aged Scholars participate in a summer intensive programme to learn leadership skills and complete personalised

assignments as part of an e-portfolio. Upon completion of secondary school, Takatuf Scholars will attend university in a variety of places. Many Takatuf Scholars attend local leading universities while others receive international scholarships to attend universities around the world.

The top ten Scholars receive Takatuf International Scholarships. International Scholarship recipients receive full tuition compensation at a top university including room and board, monthly living stipend, and return travel to Oman for semester break.

As Takatuf Scholars, young people have access to a vast network of professional mentors and academic resources. After completion of their university courses, Takatuf Scholars return to Oman bringing skills and knowledge to the workforce and the Sultanate.

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Providing job skills training for Omanis directly contributes to human capital development and improves the quality of the Omani workforce. Through partnerships with national business and non-profit leaders, OOC Group has created comprehensive training for employment programmes that develop skills and leadership for the next generation of Oman’s workforce.

Omani Society for Petroleum Services (OPAL) shares partnerships with many OOC Group companies to deliver training for Omani Youth. SMC began a partnership with OPAL in 2011, offering training programmes in mechanical maintenance and AutoCAD drafting to 40 young people. This six-month programme was conducted in partnership with the Ministry of Manpower and other companies to ensure job placement after completion of training. SMC and OPAL designed the technical emphasis of this training programme to create the maximum impact by providing specific technical skills that are in high demand in the energy industry.

Similarly, in 2011, OOC and OPAL began a job training partnership programme for young Omani workers. This programme provides technical and vocational training to Omanis selected from local communities. Education and hands-on training for students provide valuable skills designed specifically for the

energy sector. Guaranteed job placement and career counselling is also part of this programme.

In 2011, 90 Omanis from various social and economic backgrounds participated in this programme. Local training centres conducted a total of five training programmes over a period of seven months. The focus of these training programmes was:

• Occupational Health and Safety Programme

• Cashier Training Programme

• AutoCAD Programme

• Automobile Mechanical Programme

• Foreign Exchange Programme

These programmes will continue in 2012, with increased participation from local youths.

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Support for entrepreneurship and SME development strengthens the Omani economy, encourages the development of the private sector and enhances business competence in the Sultanate. Representing more than 15% of the Omani GDP, SMEs play a critical role in the Omani economy. Oman Oil Company has developed community programmes that support and develop SMEs within the Sultanate as part of the company’s support for the overall development of Oman’s economy, particularly the private sector, as outlined in Oman 2020 Vision. OOC’s contributions to SMEs and entrepreneurship are evidence of our role as a business leader investing in the future of Oman by investing in its people and businesses.

The role of small businesses is to create new opportunities for individuals while contributing to the diversification and strength of the Omani economy through the growth of the private sector. SMEs, which are often run by Omani men and women, provide opportunities for employment, economic growth and business skills development. Often small businesses serve as a catalyst for improving the quality of life for an entire family, providing an outlet for economic and social growth while encouraging leadership. In addition, small businesses often provide employment opportunities for women on a flexible schedule, allowing normal

household duties to continue with minimum interruption.

OOC held a holiday “Good Will Bazaar” at one of the local shopping malls in collaboration with local organisations, bringing more than 40 women’s organisations and vendors to an all-day event open to employees and the public. Items for sale included clothing, abayyas, Omani dates and accessories. This event was part of OOC’s commitment to strengthening its ties with non-governmental organisations and providing support for SMEs within the Sultanate.

In 2011, Sohar Aluminium provided financial sponsorship to the Small and Medium Enterprises (SME) Conference held by the Oman Chamber of Commerce and Industry. This conference focused on creating the economic and social foundations to help SMEs succeed in Oman through research and implementation of best practices. As one of the first entrepreneurship conferences in Oman, this event served as the springboard for launching new enterprises and stimulating success. The conference focused on best practices for small business management and methods to encourage greater participation of SMEs in the Omani economy.

SMEs and Entrepreneurship OMIFCO’s CELL Program In support of entrepreneurship and small business development, OMIFCO has created the CELL program, which will begin in 2012. The CELL’s mission is to create positive & sustainable impact for Omani Entrepreneurs, through supporting them financially & professionally during the start-up or expansion phase. The CELL will host entrepreneur initiation seminars in Sur and Muscat in order to inspire, motivate and identify the most committed entrepreneurs with the most viable business ideas. These entrepreneurs will then undergo several weeks of intensive training (immersion and coaching) as they refine their business ideas into concrete business plans. At the end of this intensive multi-week “Entrepreneur Boot Camp” the most promising entrepreneurs will be awarded start-up capital in the form of grants. The winning entrepreneurs will then receive continued expert mentoring and monitoring during the next critical phases of their companies.

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Community engagement is part of Oman Oil Company’s commitment to leading by example. Our community engagement initiative is focused on serving people and society. We strive to build programmes and relationships that foster meaningful contributions to impactful projects, and strengthen Omani society by working closely with community leaders and Omani social organisations. Community engagement is rooted in our fundamental role as an Omani company committed to the success and wealth of the Sultanate. The community programmes highlighted below represent the nature and scope of programmes conducted by OOC Group to support and enhance the communities in which we operate.

In 2011 OOC Group conducted a variety of community engagement programmes. In collaboration with the Central Blood Bank Department of Blood Services in Muscat, OOC conducted a blood donation drive at its headquarters in Muscat. The campaign aimed to raise awareness about the need for blood donation in the Sultanate and to provide an easy and accessible venue for donation on-site.

Oman Oil Marketing reached more than 100,000 young people though the “From Self Appreciation, I Declare Respect” campaign,

which was run in partnership with Rekaaz, a Pan-Arab non-profit foundation. The two-year campaign promoted responsible behaviour and moral values among Omani youths aged 14-23.

As part of Ramadan celebrations, Sohar Aluminium and SMC ran food drives to supply food to families in need during the holiday season. More than 200 families were given supplies for holiday dinners. Community food drives are just part of OOC Group’s philanthropic activities, which are tailored to meet the needs of the local communities in which each company operates.

In 2011, Oman Oil Company Exploration and Production (OOCEP) signed a Memorandum of Understanding (MoU) with the Ministry of Social Development pledging the company’s participation in funding a number of projects to support the local community in areas where the company operates. This pledge will promote and develop co-operation through projects that serve the family and society. These projects include programmes and activities related to providing support for Al Wafa Social Centre and funding scholarships for children of families on social security. Additional support

activities focus on improving and furnishing the homes of needy families as well as support programmes for the Omani Women’s Association.

Oman Gas Company takes special care in providing its employees with recreational and social engagement opportunities. As part of the integrated brand marketing strategy, OGC aims to communicate its business through the engagement of employees and their families. It aims to bring new and fresh ideas to enhance the image of the company as a leader in the oil and gas industry in Oman. In addition, OGC is committed to improving employees’ satisfaction and retention, promoting the spirit of team building amongst employees, and increasing their productivity. As part of its continued support of employees’ activities for healthier lifestyles, the company sponsored a football pitch where employees and community members can get together after working hours and play football each Saturday.

Community and Staff Engagement Overview

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PERFORMAnCE SuMMARy 2011

IndicatorUnit

2009 2010 2011# of reporters

Economic performance

Total revenue OMR 2,413,274,023 3,292,968,251 4,890,725,936

Spending on locally-based suppliers/material (%) % 52 58.3 53

3 6 8

Salaries paid to employees OMR 33,507,723 46,914,368 97,400,403

5 7 9

Human resources

Total workforce (full time employees) Number 2,252 2331 4189

9 9 10

Total contractors Number - - 5865

- - 10

Female Employment % 6.1 7.1 7.7

9 9 10

Youth employment (18-29) % 34.8 31 28.7

9 9 10

Omanisation rate % 66.8 69 70.1

9 9 10

Total spendings on employees training OMR 2,976,697 2,673,470 5,170,108

7 9 10

Turnover % 6.9 8.3 7.4

7 9 10

PERFORMAnCE SuMMARy 2011

IndicatorUnit

2009 2010 2011# of reporters

Environment and resources

Total water consumption m3 1,850,092 3,194,784 3,621,977

5 7 9

Total greenhouse gas emissions Tonnes 3,770,374 3,846,566 11,763,582

2 3 7

Total flaring MMSCM 51.2 40.8 68.0

2 4 5

Total Fuel Consupmption GJ 93,971,774 118,436,773 127,057,994

4 5 8

Total electricity consumption kWh 18,377,482 19,286,335 19,679,685

6 7 9

Community

Total community investments OMR 742,448 1,260,191 3,279,133

4 7 9

Health and safety

Fatalities - Employees and Contractors Number1 0 1

6 8 10

Recordable Injury Rate [TRIR] - Employees per 1 mn m-h 4.3 7 2.1

6 8 9

Total number of lost time injuries - Employees per 1 mn m-h 0.9 0.4 0.3

6 8 9

Man hours- employees number 5,574,972 5,538,536 7,023,733

6 8 9

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KEy STAKEHOlDER MATERIAl ISSuESSECOnDARy

STAKEHOlDERS

Government (Shareholders)

OOC Level

• Supporting the facilitation of foreign and private sector investments

• Ensuring the take-up of sustainability reporting across portfolio• As one of Oman’s largest conglomerates working across

many Omani communities, we can align and leverage our activities to tackle challenging sustainability issues and maximize impact

Investors, Portfolio Companies, Employees, Partners and the Supply

Chain

Organizational Level

• Transparency, disclosure and sound governance• Adoption of sustainability management and reporting• Taking collective action with Oman Group Portfolio

Companies in regards to key sustainability issues


OOC Level• To ensure strong financial performance in order to generate

a sustainable stream of revenue for the government Foreign or Private Sector Investors, Customers and

RegulatorsOrganizational Level• Strong risk management and ethical investing practices• Continuous business improvement and innovations in delivery

quality products and customer service


OOC Level• Alignment to Omani National Vision 2020• Diversifying the Omani economy

Our Societies

Organizational Level • Investing in key sectors and economic projects

KEy STAKEHOlDER MATERIAl ISSuESSECOnDARy

STAKEHOlDERS


OOC Level• Large-scale job creation in the Sultanate• Youth unemployment • Unprepared graduates for entry into the Omani Workforce

Employees and our Societies

Organizational Level

• Investing in our employees and becoming an employer of choice

• Promoting Omanization internally and across portfolio companies

The Environment

OOC Level • Supporting the creation of a ‘closed-loop’ economy

Investors and Regulators

Organizational Level• Promoting environmental awareness and protection • I ntegrating environmental screens in investment practices• Adopting environmentally-friendly practices & across portfolio

The Community

OOC Level • Increase the Quality of Life in the Sultanate

EmployeesOrganizational Level

• Making strategic and sustainable community investments • Utilizing all of OOC’s resources to impact the community • Establishing community stakeholder engagements

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GRI Index

PROFIlE DISClOSuRES

GRI Indicator Definition Page/Direct Response

1.1 Statement from the most senior decision-maker of the organization 9

1.2 Description of key impacts, risks, and opportunities 9

2.1 Name of the organization 14

2.2 Primary brands, products, and/or services 14

2.3Operational structure of the organization, including main divisions, operating companies, and subsidiaries

14-18

2.4 Location of organization’s headquarters 14

2.5Number of countries in which the organization operates, and names of countries that either contain major operations or are relevant to the specific sustainability issues

14-15

2.6 Nature of ownership and legal form 14

2.7Markets served (including geographic breakdown, sectors served and types of customers/beneficiaries)

14-18

2.8 Scale of the reporting organization 14-18, 36-37, 44

2.9Significant changes that occurred during the reporting period, regarding size, structure, or ownership

No significant changes occured during the reporting period.

2.10 Awards received in the reporting periodNo awards were received by Oman Oil Company during the

reporting period.

PROFIlE DISClOSuRES


3.1 Reporting period (e.g., fiscal/calendar year) for information provided 7

3.2 Date of most recent previous report (if any) This is the first sustainability report issued by Oman Oil Co.

3.3 Reporting cycle (annual, biennial, etc.) 7

3.4 Contact point for questions regarding the report or its contents Back cover

3.5 Process for defining report content 7,23, 84-85

3.6Boundaries of the report (e.g., countries, divisions, subsidiaries, leased facilities, joint ventures, suppliers)

7

3.7Specific limitations on the scope or boundaries of the report (see completeness principle for explanation of scope)

7

3.8Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations, and others

7

3.9Data-measurement techniques and the bases of calculations, including assumptions and techniques

7

3.10Explanation of the effect of any re-statements of information provided in earlier reports, and the reasons

N/A

3.11Significant changes from previous reporting periods in the scope, boundaries, or measurement methods

N/A

3.12 Table identifying the location of the Standard Disclosures in the report 86-94

3.13Policy and current practice with regard to seeking external assurance for the report

Oman Oil Company has not sought external assurance for this report. OOC aims to externally assure its reports in the future.

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PROFIlE DISClOSuRES


4.1Governance structure of the organization, including committees under the highest governance body responsible for specific tasks, such as setting strategy or organizational oversight

26-27

4.2Indication of whether or not the Chair of the highest governance body is also an executive officer

26-27

4.3For organizations that have a unitary board structure, statement of the number of members of the highest governance body that are independent and/or non-executive members

26-27

4.4Mechanisms for shareholders and employees to provide recommendations or direction to the highest governance body

Communications can be initiated at the annual company meeting (AGM) and/or directly to the CEO who may bring

matters to the attention of the Board of Directors.

4.5

Linkage between compensation for members of the highest governance body, senior managers, and executives (including departure arrangements), and the organization’s performance (including social and environmental performance)

26-27

4.6Processes in place for the highest governance body to ensure avoidance of conflicts of interest

Commercial Companies Law (RD 4/74). Law on the Protection of Public Funds and Avoidance of Conflcist of Interest (RD112/2011). Other related policies and

procedures currently under development.

4.7Process for determining the qualifications and expertise of the members of the highest governance body for guiding the organization’s strategy on economic, environmental, and social topics

Members of the Board of Directors are appointed by Royal Order.

4.8Internally developed statements of mission or values, codes of conduct, and principles relevant to economic, environmental, and social performance, and the status of their implementation

14, 19-22, 26-27

PROFIlE DISClOSuRES


4.9

Procedures of the highest governance body for overseeing the organization’s identification and management of economic, environmental, and social performance, including relevant risks and opportunities, and adherence to or compliance with internationally agreed standards, codes of conduct, and principles

26-27

4.10Processes for evaluating the highest governance body’s own performance, particularly with respect to economic, environmental, and social performance

Board evaluation technqiues, process, procedures etc is under discussion as part of revamping OOC’s corporate

goverance.

4.11Explanation of whether or not, and how, the precautionary approach or principle is addressed by the organization

9-10, 26

4.12Externally developed economic, environmental, and social charters, principles, or other initiatives to which the organization subscribes or endorses

8,9,19-22

4.13

Memberships in associations (such as industry a ssociations), and/or national/international advocacy organizations in which the organization: * Has positions in governance bodies; * Participates in projects or committees; * Provides substantive funding beyond routine membership dues; or * Views membership as strategic

16-17, 26

4.14 List of stakeholder groups engaged by the organization 7, 23, 84-85

4.15 Basis for identification and selection of stakeholders with whom to engage 7, 23, 84-85

4.16Approaches to stakeholder engagement, including frequency of engagement by type and by stakeholder group

23, 84-85

4.17Key topics and concerns that have been raised through stakeholder engagement, and how the organization has responded to those key topics and concerns, including through its reporting

23, 84-85

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PERFORMAnCE InDICATORS

labor Indicators

LA1 Total workforce by employment type, employment contract, and region 44-52

LA2Total number and rate of employee turnover by age group, gender, and region

42

LA3Benefits provided to full-time employees that are not provided to temporary or part-time employees, by major operations

38-39

LA7Rates of injury, occupational diseases, lost days, and absenteeism, and total number of work-related fatalities by region

54-56

LA10 Average hours of training per year per employee, by employee category 50-51

LA12Percentage of employees receiving regular performance- and career-development reviews

50-51

LA14 Ratio of basic salary of men to women by employee categoryMen and women receive the same basic salary in

alignment with individual skill profiles.

PR7Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications, including advertising, promotion, and sponsorship by type of outcomes.

No incidents of this nature were brought to the attention of management.

PR8Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data.


PR9Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services.


EC1

Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations, and other community investments, retained earnings, and payments to capital providers and governments

36-39

PERFORMAnCE InDICATORS

labor Indicators

EC5Range of ratios of standard entry-level wage compared to local minimum wage at significant locations of operation

Strandard entry level wage is OMR 765 for new graduates, both male and female, after training.

EC6Policy, practices, and proportion of spending on locally based suppliers at significant locations of operation

38-39

EC9Understanding and describing significant indirect economic impacts, including the extent of impacts

32-39

EN3 Direct energy consumption by primary energy source 65-66

EN4 Indirect energy consumption by primary energy source 65-66

EN8 Total water withdrawal by source 67

EN9 Water sources significantly affected by withdrawal of water 67

EN16 Total direct and indirect greenhouse gas emissions by weight 62-63

EN28Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations

In 2011 OOC did not incur any fines or sanctions related to compliance with environmental laws or

regulations.

HR4 Total number of incidents of discrimination and actions takenNo incidents of discrimination were brought to the

attention of OOC management.

SO1Percentage of operations with implemented local community engagement, impact assessments, and development programs

70-71

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DISClOSuRE OF MAnAGEMEnT APPROACH

G3.1 DMAs Description Reported Cross-reference/Direct answer

DMA EC Disclosure on Management Approach EC

Aspects

Economic performance Fully 32-39

Market presence Fully 32-39

Indirect economic impacts Fully 32-39

DMA En Disclosure on Management Approach En

Aspects

Materials Partially 60-67

Energy Partially 65-66

Water Partially 67

Biodiversity Partially 60-67

Emissions, effluents and waste Partially 60-64

Products and services Partially 60-67

Compliance Fully 60-63

Transport Partially 60-67

Overall Partially 60-67



DMA lA Disclosure on Management Approach lA

Aspects

Employment Fully 42-57

Labor/management relations Partially 42-57

Occupational health and safety Partially 42-57

Training and education Partially 42-57

Diversity and equal opportunity Partially 42-57

Equal remuneration for women and men Partially 42-57

DMA HR Disclosure on Management Approach HR

Aspects

Investment and procurement practices Partially 32-38

Non-discrimination Fully 42-57

Freedom of association and collective bargaining Partially 42-57

Child labor Partially 42-57

Prevention of forced and compulsory labor Partially 42-57

Security practices Partially 42-57

Indigenous rights Partially 42-57

Assessment Partially 42-57

Remediation Partially 42-57

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DMA SO Disclosure on Management Approach SO

Aspects

Local communities Fully 70-79

Corruption Fully 26-27

Public policy Partially 26-27

Anti-competitive behavior Partially 26-27

Compliance Partially 26-27

DMA PR Disclosure on Management Approach PR

Aspects

Customer health and safety NotDue to the nature of its business, OOC’s operations

do not include direct customer relationships

Product and service labelling NotDue to the nature of its business, OOC’s operations


Marketing communications NotDue to the nature of its business, OOC’s operations


Customer privacy NotDue to the nature of its business, OOC’s operations


Compliance NotDue to the nature of its business, OOC’s operations


Feedback

Communicating our performance to our stakeholders is an important outcome of this report.

We look forward to receiving your feedback on this report and our performance. Please direct communications via the following outlets:

Direct mail:

PO Box 261 PC 118, Muscat Sultanate of Oman

Tel: + 968 2457 3100

Fax: + 968 2457 3101

Email: [email protected]

www.oman-oil.com

Documents

2011 Sustainability Report Responsible ... - Oman Oil Companyoman-oil.com/News/2013/Oman Oil Group Sustainability Report.pdf · Report of Oman Oil Company and its subsidiaries