Climate Change 2017 Information Request Oil Search · 2017-06-30 · employee bonuses, salary and progression. Further Information Page: CC2. Strategy CC2.1 Please select the option

6/30/2017 Climate Change 2017 Information Request Oil Search

https://www.cdp.net/sites/2017/38/13838/Climate%20Change%202017/Pages/DisclosureView.aspx 1/26

Climate Change 2017 Information RequestOil Search

Module: Introduction

Page: Introduction

CC0.1IntroductionPlease give a general description and introduction to your organization.

Oil Search was established in Papua New Guinea (PNG) in 1929. More than 98% of its assets are in PNG, where it operates all of the country’sproducing oil fields, holds an extensive appraisal and exploration portfolio and has a 29% interest in the PNG LNG Project, operated by ExxonMobilPNG Limited. This worldclass liquefied natural gas (LNG) development, which came onstream in 2014, has transformed Oil Search into a regionallysignificant oil and gas producer, with a longterm, low cost, high quality LNG revenue stream. The Company also holds a 23% interest in PRL 15,operated by Total SA, which contains the worldclass ElkAntelope gas fields. Oil Search has a clear strategy to drive future growth. We are pursuingopportunities to develop additional LNG trains in PNG, underpinned by existing discovered gas resources in the NW Highlands, including the P’nyanggas field in PRL 3, and the ElkAntelope fields in the onshore Gulf Province. Oil Search believes that there is presently sufficient gas to support at leasttwo PNG LNGsized expansion trains and possibly three trains, contingent on additional appraisal drilling. We are also undertaking a range ofexploration and appraisal activities to support further LNG expansion in PNG. Oil Search is listed on the Australian and Port Moresby securityexchanges.

CC0.2Reporting YearPlease state the start and end date of the year for which you are reporting data.The current reporting year is the latest/most recent 12month period for which data is reported. Enter the dates of this year first.We request data for more than one reporting period for some emission accounting questions. Please provide data for the three years prior to the currentreporting year if you have not provided this information before, or if this is the first time you have answered a CDP information request. (This does not apply ifyou have been offered and selected the option of answering the shorter questionnaire). If you are going to provide additional years of data, please give thedates of those reporting periods here. Work backwards from the most recent reporting year.Please enter dates in following format: day(DD)/month(MM)/year(YYYY) (i.e. 31/01/2001).

Enter Periods that will be disclosedFri 01 Jan 2016 Sat 31 Dec 2016

CC0.3Country list configuration Please select the countries for which you will be supplying data. If you are responding to the Electric Utilities module, this selection will be carried forward toassist you in completing your response.

Select countryPapua New GuineaAustralia

CC0.4Currency selection Please select the currency in which you would like to submit your response. All financial information contained in the response should be in this currency.

USD($)

CC0.6ModulesAs part of the request for information on behalf of investors, companies in the electric utility sector, companies in the automobile and auto componentmanufacturing sector, companies in the oil and gas sector, companies in the information and communications technology sector (ICT) and companies inthe food, beverage and tobacco sector (FBT) should complete supplementary questions in addition to the core questionnaire.If you are in these sector groupings, the corresponding sector modules will not appear among the options of question CC0.6 but will automatically appear in theORS navigation bar when you save this page. If you want to query your classification, please email [email protected] you have not been presented with a sector module that you consider would be appropriate for your company to answer, please select the module below inCC0.6.

Further Information

Module: Management

Page: CC1. Governance

CC1.1Where is the highest level of direct responsibility for climate change within your organization?

Board or individual/subset of the Board or other committee appointed by the Board

CC1.1aPlease identify the position of the individual or name of the committee with this responsibility

Oil Search's Health, Safety and Sustainability (HSS) Committee Our Board HSS Committee is charged by the Oil Search Board to oversee theCompany’s strategies, processes and performance relating to health, safety, security and social responsibility, including human rights and climatechange. The Board HSS Committee endorses our Climate Change Strategy and governs the management of the risks and opportunities posed byclimate change to our assets. In October 2016, the Committee endorsed and the Board approved our Climate Change Strategy. Monthly HSS Group 1meetings are the primary way that management is informed of and addresses climate change performance and initiatives.

mailto:[email protected]



CC1.2Do you provide incentives for the management of climate change issues, including the attainment of targets?

Yes

CC1.2aPlease provide further details on the incentives provided for the management of climate change issues

Who is entitled to benefitfrom these incentives?

The typeof

incentives

Incentivizedperformanceindicator

Comment

Corporate executive team Monetaryreward

EmissionsreductionprojectBehaviorchange relatedindicatorOther: StrategyImplementation

Our senior management team is financially incentivised to manage longerterm risks thatcould impact on the value of the Company, including climate change risk, via theoperation of the ‘at risk’ component of executive remuneration. Executives participate ina longterm incentive (LTI) plan, with payments under the plan linked to the relativeshareholder returns generated by the Company compared to a global peer group of oiland gas companies and to the 50 largest companies listed on the Australian SecuritiesExchange. Failure to effectively address climate change risk would be expected totranslate into relative underperformance in terms of creating longterm, sustainableshareholder value and hence impact on the realisation of LTI benefits.

Environment/Sustainabilitymanagers

Monetaryreward

Other: Variabledepending onagreedobjectives andtimeframe.

Setting and managing the climate change strategy, monitoring and reporting on targets.Inventory development. Attainment of objectives relating to climate change relatedinitiatives or projects are managed within Oil Search's overall performance incentiveframework. This framework involves the setting of individual and function/team KPIsannually, the performance against which is assessed at year end. This assessment formspart of the decision on employee bonuses, salary and progression.

Business unit managers Monetaryreward

EmissionsreductionprojectEmissionsreductiontarget

The PNG production and business unit management is responsible for developing theassociated gas fields at the Kutubu, Agogo, Moran and Gobe Main oil fields andachieving the Company’s GHG emissions target. The associated gas projects contributeto a reduction in emissions as they collect the gas for sale, rather than it being flared.Attainment of objectives relating to climate change related initiatives or projects aremanaged within Oil Search's overall performance incentive framework. This frameworkinvolves the setting of individual and function/team KPIs annually, the performanceagainst which is assessed at year end. This assessment forms part of the decision onemployee bonuses, salary and progression.

Further Information

Page: CC2. Strategy

CC2.1Please select the option that best describes your risk management procedures with regard to climate change risks and opportunities

Integrated into multidisciplinary company wide risk management processes

CC2.1aPlease provide further details on your risk management procedures with regard to climate change risks and opportunities

Frequency ofmonitoring To whom are results reported?

Geographicalareas

considered

How far into the futureare risks considered? Comment

Sixmonthly ormorefrequently

Board or individual/subset of theBoard or committee appointed by theBoard

PNG > 6 yearsAnalysis conducted as part of the 2016Climate Change Strategy assessed risks up to2035.

CC2.1bPlease describe how your risk and opportunity identification processes are applied at both company and asset level

Oil Search’s approach to risk management has been established to ensure that risks to Oil Search’s corporate objectives are well understood andeffectively managed at both company and asset levels.

Climate change risks and implications are considered in the Social Responsibility Policy, Risk Management, Engineering Design Procedure,Engineering Risk Management and Environmental Management Procedures.

A tiered process is used which identifies and assesses risks at operational, project (asset), corporate and strategic levels. Risks and opportunities areidentified through ongoing regulatory reviews, market analysis, stakeholder engagement using a workshop approach and government consultation.Across the business there are established governance forums to support the risk reporting processes including the identification of emerging risks atboth a corporate and asset level as well as reporting on trends and deeper analysis of key risks.

The identified risks are assigned to a risk owner who continually tracks the risk against the proposed management method and determines if the riskchanges over time. Where a new risk is identified, it is escalated through the business to ensure that it is assessed appropriately and entered into therisk register.

Asset level physical risks and opportunities are identified through Oil Search’s ISO14001 accredited Environmental Management System whichcontains a formal procedure for identifying and assessing environmental risks at an operational level. A risk register is developed which contains acomprehensive assessment of environmental risks for each facility in PNG and updated annually. Physical risks such as climate are a standardconsideration in new project developments and are assessed within a traditional engineering design risk analysis process.

The outcome of the identification and assessment phase is an organisationalwide risk profile, with appropriate scales of materiality and granularity.

CC2.1cHow do you prioritize the risks and opportunities identified?



A key step within Oil Search’s risk management approach is the evaluation (prioritisation) process. Risks and opportunities are prioritised using a riskmatrix which assesses consequence and likelihood plus criteria around tolerability (threshold) and acceptability (level of comfort) of risks. The resultingmanagement measure (opportunity) is assessed based on the financial value to the company, that is, return on investment and the effectiveness of themanagement measure to reduce the risk. This process has resulted in an assessment of the most material climate change risks to Oil Search.

Climate change risks are assessed sixmonthly as part of our corporate risk management approach and broader strategic planning and decisionmaking. Those risks are also assessed as part of the Boardled strategic reviews conducted at regular intervals.

CC2.2Is climate change integrated into your business strategy?

Yes

CC2.2aPlease describe the process of how climate change is integrated into your business strategy and any outcomes of this process

Climate change risks and opportunities are one of the material risks regularly reviewed and considered as part of the Company’s broader strategicobjective setting process. Aspects of the Climate Change strategy link to various business objectives, for example, one of the focus areas from theClimate Change Strategy, ‘Assisting PNG meet its climate and development objectives’ supports the Company objective to ‘Maximise influence in PNGby being a leading corporate citizen and promoting a stable operating environment’.

The Oil Search Climate Change Strategy has four other focus areas: reducing the impact of operational emissions, climate change adaptation impacts,engaging on climate policy, and working with peers to build a collective response. This Strategy aligns with the principles of our Social ResponsibilityPolicy and Strategy and our PNG Sustainable Development Strategy (which is under development in 2017). It helps to ensure Oil Search remainsprepared for future carbon constraints and that we understand the potential risks and impacts to our business. Given rapidly changing stakeholderexpectations, technology and markets, this Strategy will continue to evolve and will be updated at least once a year.

The strategy has been influenced through a number of internal data collection and reporting processes including: • Consideration of the role of oil and gas in the energy outlook to 2035.• Benchmarking peer strategies and initiatives in response to climate change.• Evaluating opportunities to continue reducing emissions from existing assets.• Evaluating and considering investor and stakeholder concerns and information requests.• Evaluating PNG climate change commitments and opportunities.• tracking our emissions and emissions intensity

In addition, we conduct exhaustive modelling of various long term supply and demand scenarios for oil and LNG based on input from a variety ofauthoritative sources. We encapsulate these scenarios in a range of commodity price outlooks, including material downside cases reflecting weakersustained long term demand for our products. The economic viability of existing assets is then tested against the same downside economic cases.

Oil Search has commenced evaluation of 1.5/2C scenarios on the business and is committed to reporting the findings to our shareholders prior to theAnnual Meeting next year.

Based on market and investor demands, Oil Search’s shortterm strategy (35 years) will be to continue to develop gas fields to take advantage of thechanging oil and gas market which have being driven, in part, by the global need to reduce emissions through the use of more efficient, lower emissionfuels like gas. Other parts of the short term business strategy being influenced by climate change include the development of Oil Search’s Powerbusiness. This business is being developed to provide much needed electricity to PNG using Biomass rather than fossil fuel sources. It has the addedbenefit of helping PNG achieve its renewable energy goals. These aspects of the business strategy support Oil Search’s climate change strategy whichincludes: reducing the impact of operational emissions through the capture of associated gas, ensuring operations, investment and communities areresilient to physical impacts of climate change, assisting PNG to meet its climate and development activities through the development of our PowerBusiness and engaging on climate policy.

PNG has committed to transitioning to 100% renewable energy by 2030, if donor funding is available. Scalable renewable energy solutions will need tobe rapidly introduced for PNG to meet this target. By implementing our Power Strategy, Oil Search will help the PNG Government to meet its IntendedNationally Determined Contribution (INDC) and commitments under the Paris Agreement by encouraging the adoption of gas as a transition fuel todisplace diesel.

Oil Search’s transition to a gas dominated portfolio and its partnerships with ExxonMobil PNG Ltd’s PNG LNG Project and Total's Papuan LNG Projecthas transformed OSL into a regionally significant oil and gas producer with a longterm LNG revenue stream. Oil Search’s diversification into the Powersector provides an additional advantage by increasing its revenue base and improve the sociopolitical stability of PNG by improving living conditionsfor the PNG people.

CC2.2c Does your company use an internal price on carbon?

No, but we anticipate doing so in the next 2 years

CC2.3Do you engage in activities that could either directly or indirectly influence public policy on climate change through any of the following? (tick all that apply)

Trade associationsOther

CC2.3bAre you on the Board of any trade associations or provide funding beyond membership?

Yes

CC2.3cPlease enter the details of those trade associations that are likely to take a position on climate change legislation

Trade associationIs your position on climatechange consistent with

theirs?

Please explain the tradeassociation's position

How have you, or are you attempting to, influence theposition?

PNG Chamber ofMines andPetroleum

Inconsistent The Chamber has no statedposition on climate change.

The Chamber has previously coordinated a combined industrywide response to proposed climate change related legislation.

CC2.3ePlease provide details of the other engagement activities that you undertake



Oil Search is a signatory to the United Nations Global Compact (UNGC) and actively participates in the Global Compact Australia Local Network(GCNA). Oil Search actively supports the UNGC principles and communicates regularly on implementing them.

As a member of PNG's the Climate Change and Development Authority (CCDA) industry stakeholder group, in 2016, we engaged with CCDA onproposed and existing legislation and commitments related to climate change including: participating in a REDD+ workshop that covered topics such asthe National Forest Monitoring System Action Plan, Greenhouse Gas Inventory and Forest Reference Level and attending a postParis Agreementupdate and ratification workshop.

CC2.3fWhat processes do you have in place to ensure that all of your direct and indirect activities that influence policy are consistent with your overall climate changestrategy?

Oil Search’s HSS governance structure supports consistent decisions and approach to our engagement on climate change matters across ourgeographies and areas of activity. Our Stakeholder Engagement function, comprising externally facing disciplines such as government affairs, ensuresconsistent delivery and engagement across all aspects of the business.

Further Information

Page: CC3. Targets and Initiatives

CC3.1Did you have an emissions reduction or renewable energy consumption or production target that was active (ongoing or reached completion) in the reportingyear?

Intensity target

CC3.1bPlease provide details of your intensity target

ID Scope% of

emissionsin scope

%reductionfrombaseyear

Metric Baseyear

Normalizedbase yearemissionscovered by

target

Targetyear

Is this asciencebasedtarget?

Comment

Int1

Scope1+2(locationbased)

100% 12%

Other: KilotonnesCO2e per millionbarrels of oilequivalent(mmboe)

2009 92.8 2016

No, and wedo notanticipatesetting one inthe next 2years

Oil Search has a target to reducethe emissions intensity (kT Co2e/mmboe) of operations by 12%by 2016 based on a 2009baseline.

CC3.1cPlease also indicate what change in absolute emissions this intensity target reflects

ID

Direction of changeanticipated in absoluteScope 1+2 emissions at

target completion?

% changeanticipated inabsoluteScope 1+2emissions

Direction of changeanticipated in absoluteScope 3 emissions attarget completion?

% changeanticipated inabsoluteScope 3emissions

Comment

Int1 Decrease 33 No change 0

This achievement was predominantly due toongoing flare reduction initiatives and, to a lesserextent, the gradual shift in composition of productionfrom largely oil to oil and gas.

CC3.1eFor all of your targets, please provide details on the progress made in the reporting year

ID

%complete(time)

% complete(emissions orrenewableenergy)

Comment

Int1 100% 100%In 2016 Oil Search emissions intensity was 46ktCO2e/mmboe which represents a 50% reduction inemissions intensity against a 2009 baseline. This achievement was largely due to ongoing flare reductioninitiatives and a shift from oil to oil and gas production.

CC3.2Do you classify any of your existing goods and/or services as low carbon products or do they enable a third party to avoid GHG emissions?

Yes

CC3.2aPlease provide details of your products and/or services that you classify as low carbon products or that enable a third party to avoid GHG emissions

Level ofaggregation

Description ofproduct/Groupof products

Are youreportinglow carbonproduct/sor avoidedemissions?

Taxonomy, projector methodologyused to classifyproduct/s as lowcarbon or to

calculate avoidedemissions

%revenuefrom lowcarbonproduct/sin the

reportingyear

% R&D inlow

carbonproduct/sin the

reportingyear

Comment



Productliquefiednatural gas(LNG)

Avoidedemissions

Other: Globalenergy forecasts 60%

Less thanor equalto 10%

LNG is used to replace liquid heavy fuel for energygeneration. An example is the use of gas (and somecondensate) from the Hides Project supplied to thePorgera Gold mine reducing the mine’s dependencyon use of liquid heavy fuel for energy generation. Thisenables them to produce less scope 1 emissions.

Product Naptha Avoidedemissions

Other: Globalenergy forecasts

Less thanor equalto 10%

Naphtha produced from the Hides facility supplied totea plantations (WR Carpenters) to use as a heatsource for drying tea leaves. The alternative wouldhave been the use of heavy fuel and wood. Thisenables them to reduce their scope 1 emissions.

CC3.3Did you have emissions reduction initiatives that were active within the reporting year (this can include those in the planning and/or implementation phases)

Yes

CC3.3aPlease identify the total number of projects at each stage of development, and for those in the implementation stages, the estimated CO2e savings

Stage of development Number of projects Total estimated annual CO2e savings in metric tonnes CO2e (only for rows marked *)Under investigation 2To be implemented* 0Implementation commenced* 2 2860Implemented* 6 25022Not to be implemented 0

CC3.3bFor those initiatives implemented in the reporting year, please provide details in the table below

Activitytype

Description of activity

EstimatedannualCO2esavings(metrictonnesCO2e)

Scope Voluntary/Mandatory

Annualmonetarysavings(unit

currency as

specifiedin CC0.4)

Investmentrequired(unit

currency as

specifiedin CC0.4)

Paybackperiod

Estimatedlifetime of

theinitiative

Comment

Processemissionsreductions

Reduce blanket gassupply pressure andreduce offspec productin crude rundown toCrude Storage Tanksleading to reducedventing from tanks.

2383 Scope 1 Voluntary 50000 1620years


Improve flare meteringturndown and detectexcess flare rates orpurge flows duringsteady state operation.



Reduced flaring duringprocess upsets due toautomated pressurecontrol on gasreinjection wells.Reduced reliance onmanual choke changesin the field.



Rationalisation of TEGunits to single train(1x100%) from 3 x 33%.Reduction in electricalpower demand and flaregas required forreboilers due torationalisation from oneunit to three.

2383Scope 2(locationbased)

Voluntary 1000000 610 years

Total forecast of 1million for formaldecommissioningin 2018. Unitscurrently offline.


Remove fieldcompressors due to debottlenecking GobeProcessing Facilitycompressors.Compressors no longerrequired to deliver fielddevelopment plan.

14298 Scope 1 Voluntary 1700000 35 years


Reduce flaringassociated with gasdelivery to GobeProcessing Facility andreduce reliance onmanual choke changes.

2383 Scope 1 Voluntary 4400000 35 years

CC3.3cWhat methods do you use to drive investment in emissions reduction activities?

Method Comment



Financial optimizationcalculations

Oil Search has a dedicated programme to capture the natural gas associated with its oil fields in PNG. By capturing theassociated gas it can be treated and sold rather than flared.

Further Information

Page: CC4. Communication

CC4.1Have you published information about your organization’s response to climate change and GHG emissions performance for this reporting year in places otherthan in your CDP response? If so, please attach the publication(s)

Publication StatusPage/Sectionreference

Attach the document Comment

In mainstream reports(including an integratedreport) but have not usedthe CDSB Framework

Complete Social Responsibility:pg. 48

https://www.cdp.net/sites/2017/38/13838/ClimateChange 2017/SharedDocuments/Attachments/CC4.1/OSH2016AnnualReport CC refs.pdf

2016 Annual Report.(Reporting framework: ASXCorp. Governancerequirements, GRI and others)

In voluntarycommunications Complete

Proud of what we doand how we do it –Strengthening ourclimate changeunderstanding

https://www.cdp.net/sites/2017/38/13838/ClimateChange 2017/SharedDocuments/Attachments/CC4.1/OSH2016SocialrespReportCC refs.pdf

2016 Social ResponsibilityReport.http://www.oilsearch.com/srreport2016/reportingindex(Reporting framework: GRIand others)

In voluntarycommunications Complete Responsible Operator

– Climate Change

https://www.cdp.net/sites/2017/38/13838/ClimateChange 2017/SharedDocuments/Attachments/CC4.1/OSHWebsiteCCrefs.pdf

Oil Search Company website:http://www.oilsearch.com/howwework/responsibleoperator(Reporting framework: GRIand others)

In voluntarycommunications Complete Oil Search Company

website: Data Centre

https://www.cdp.net/sites/2017/38/13838/ClimateChange 2017/SharedDocuments/Attachments/CC4.1/OSHWebsiteDataCentreCC refs.pdf

Oil Search Company website:http://www.oilsearch.com/howwework/performance/datacentre

In voluntarycommunications Complete Oil Search Company

website: Latest News

https://www.cdp.net/sites/2017/38/13838/ClimateChange 2017/SharedDocuments/Attachments/CC4.1/OSL_QA_ClimateChange_170509_FINAL.pdf

Oil Search Company website:http://www.oilsearch.com/

Further Information

Module: Risks and Opportunities

Page: CC5. Climate Change Risks

CC5.1Have you identified any inherent climate change risks that have the potential to generate a substantive change in your business operations, revenue orexpenditure? Tick all that apply

Risks driven by changes in regulationRisks driven by changes in physical climate parametersRisks driven by changes in other climaterelated developments

CC5.1aPlease describe your inherent risks that are driven by changes in regulation

Riskdriver Description

Potentialimpact

Timeframe

Direct/Indirect

Likelihood

Magnitudeof impact

Estimatedfinancial

implications

Managementmethod

Cost ofmanagement



Carbontaxes

The mostsignificant risk isthe introductionof a carbon levyeither directly toOil Search orindirectly tosuppliers (andpassed through)at a price levelthat is notcompatible witheconomicdevelopment.

Increasedoperationalcost

3 to 6years Direct

Morelikely thannot

Lowmedium

The financialimplications of adirect carbontax in PNGwould be anincrease incosts on our oiland gasproducts whichcouldpotentiallyimpact OilSearch’scompetitivenessin the region.

Oil Search hastwo keymanagementmeasures whichform part of theOil SearchClimate Changestrategy:engagementwith the PNGGovernment,andcommissioningwork on ashadow carbonprice. Weactively engagewith regulatoryand othergovernmentagencies,including thePNG ClimateChangeDevelopmentAuthority(CCDA), onproposed andexistinglegislation andcommitmentsrelated toclimate change.We belong tothe CCDAindustrystakeholdergroup. Thisengagementhelps us toiterativelyassess theimplications ofregulatorchanges andprepareaccordingly. OilSearch iscurrentlyevaluating thevalue of theshadow carbonprice todetermine anappropriatecarbon price –this will be usedto model theimpact of acarbon price onexisting assetsand investmentdecisions.

The costs tomanage thisissue includetimeassociatedwithstakeholderparticipationor theequivalent of0.25 of anFTE. Costsassociatedwith settingup and/orperformingmodellingexercises.Costsassociatedwithcomplianceincludingpotentialverification.



Lack ofregulation

Lack ofregulation andregulatoryuncertainty hasthe potential toimpact on OilSearch'srenewablepower business.While PNG hasan INDC inplace, there isnothing todocument howthey are going toreach the target.The impact ofthis risk to OilSearch is that itcreatesuncertainty inmakingdecisions in ourPower business.


>6 years DirectMorelikely thannot

Low

Developmentexpenditure for2016 for theBiomass powerproject was$14.8 million. Ifthe project wasno longer viablebecause ofcheaper butmore emissionsintensive fuelsourcesobtainingapproval fromthe PNGgovernment, theinvestment todate may belost.

To manage therisk of regulatoryuncertaintyimpacting on theOil SearchPower business,Oil Search hasentered intoagreements withPNG’s majorenergycompanies. InSeptember2016, theMarkham ValleyBiomass Project,which willdeliver up to30MW of lowercarbon powerfor businessesandcommunities inthe Lae region,entered FEEDand a 25 yearPower PurchaseAgreement wasexecuted whichwill provide ongoing certaintyfor the Powerbusiness.

Cost ofstakeholderengagementwith PNGgovernmentwhich isequivalent to0.25 FTE.

Emissionreportingobligations

PNG does notcurrently haveany emissionsreportingobligations.Were they to beintroduced, thismay increasecosts to OilSearch to meetcompliancerequirements.Shareholderactivism mayalso lead to anincrease inreportingrequirementsoutside of anyregulatoryrequirements.


3 to 6years Direct

Morelikely thannot

Low

Key financialimplication ofthis risk isincreased costof complianceand assurance.These costs arelikely to be theequivalent of 1FTE plusconsultingcosts.

The keymanagementmeasure for thisrisk is OilSearch’senvironmentdatamanagementsystem. Thissystem is usedto trackemissionsperformance. Inaddition, OilSearch obtainsindependentassurance overgreenhouse gasemissions. Wecontinue torefine this so wecan manage thisrisk by ensuringwe have robustand timely dataavailable to aiddecision makingand meetstakeholderexpectations.

Capital andoperationalcostsassociatedwithdevelopingsystems,collectingdata,managinginventoriesand obtainingthird partyassurance.

CC5.1bPlease describe your inherent risks that are driven by changes in physical climate parameters

Risk driver Description Potentialimpact Timeframe Direct/

IndirectLikelihood

Magnitudeof impact

Estimatedfinancial

implications

Managementmethod

Cost ofmanagement



Otherphysicalclimatedrivers

Extremeweatherconditionscausingdelays withtankerloading,drillingoperations,generaloperationsand crewchanges athighlandsites whichare onlyaccessibleby helicopter.


1 to 3years Direct

Morelikely thannot

Medium

Financialimplicationsinclude loss ofrevenue dueto loss inproductiontime fromdisruptions ordelays ingetting staff tosite or repairsrequired aftera storm event.A disruptionthat caused a0.1%decrease inproductionacross thecompany’soperationswould lead toan equivalentloss ofrevenue ofabout US$1million.

Themanagementmethods forextremeweather eventsincludeundertakingasset integrityriskassessmentsand toincorporateappropriateclimate impactscenarios intoasset planning.In addition,weather stationshave beeninstalled athighland drillingoperations.These helpinform pilots ofwhether it issafe to fly to thesite. Previouslythere has beenlittle informationon weatherconditionscausing pilots tohave to turnback due topoor weather.The results havebeen improvedsafety, logisticstimes andreduced fueluse.

The cost ofmanagementisincorporatedinto theplanningphase of newassets. Thecost ofinstallingweatherstations was$8,000 perstationincludingpurchase andinstallation.



Inducedchanges innaturalresources

Changingweatherconditionsmay increasethe lengthand severityof drought orfloodconditionswhichimpacts onthe localcommunitiesin which OilSearchoperates.Thesecommunityimpacts leadto potentialdisruptions tooperationsfromcommunityprotests andconflict.

Other:Disruption tooperationscaused bycommunityconflict.

3 to 6years Direct

About aslikely asnot

Medium

Productionlosses due todowntimeresulting fromcommunityprotests/disruptions. Adisruption thatcaused a 0.1%decrease inproductionacross thecompany’soperationswould lead toan equivalentloss ofrevenue ofabout US$1million.

Oil Searchmanages therisk a drought orflood creates acommunitydisruption bybuildingresilience in thecommunitythroughimplementationof sustainabledevelopmentprogrammesfocused onsustainable,longtermoutcomes.Theseprogrammesincludeagriculturaltraining andsupport toenhance foodsecurity,supporting localenterprisesdevelopment byassisting localwomen formagriculturalcooperativesand providingbasic businessskills training,seeds andmaterials sothey can selltheir produceand generate asource ofincome andeconomicindependence.We also look atother enterprisedevelopmentprojects in PNGthrough partnerssuch asBusiness forDevelopment,with which weare currentlyinvestigating theviability ofcreating a porkhusbandry andproductionbusiness in thePNG Highlands.Oil Search alsoprovidesemergencyassistance toPNGcommunitieswhen needed,for example,during a severedrought in 2015.Since 2015, wehave beenworking with thePNG NationalAgriculturalResearchInstitute (NARI)to develop anddistribute moredrought hardycrops to improvefood securityand resilienceduring futureperiods ofdrought.

Increasedoperationalcosts tosupportcommunityaffairsactivities inhostcommunities.In 2016, OilSearchcommittedUS$56 millionbetween 2016and 2020 tothe Oil SearchFoundation tosupporthealth,leadershipand women'sempowermentprogrammesin PNG.



Change inprecipitationpattern

Increases inmeantemperature,rainfall andhumidity mayaffecttransmissionof malariaand othermosquitobornediseases inPNGincludingChikungunyaand DengueFever. Thesediseasesimpact on OilSearchpersonnel aswell as hostcommunities.

Other: Widersocialdisadvantagesand potentialdisruptions tobusinessoperations

3 to 6years Direct

Morelikely thannot

Low

Increasedrates ofworkplaceillness/diseasewould reducethe availabilityof a healthyworkforce andplace greaterdemand ontheCompany’smedicalresources.This couldreduceproductionrates and leadto losses inrevenue.

Themanagementmeasure formosquito bornediseases istargeted vectorcontrolstrategiesincluding acombination ofcommunityawarenessactivities, therollout of rapiddiagnostic tests,improvedtreatmentregimens,indoor residualspraying, anddistribution ofLong LastingInsecticidalNets. Thesemeasures haveseen rates ofmalariaplummet to preeliminationlevels throughsurveillance andearlyintervention.Malaria is nowten times lowerthan thoserecorded in2011. This hasbeen achievedthrough thework of the OilSearchFoundation thatcontributes toawareness andtreatment withinnearbycommunities inPNG. Oil Searchis the founderand principledonor to the OilSearchFoundation.

Cost ofregularsprayingprogrammes,and ofmedicalresources torapidlydiagnose andtreat thoseaffected withmalaria. Aspart of OilSearch'sinvestment insustainabledevelopment,Oil SearchcommittedUS$56 millionbetween 2016and 2020 tothe Oil SearchFoundation tosupporthealth,leadershipand women'sempowermentprogrammes.These healthprogrammesseek toreducemalariaincidence aswell asaddress otherprominentdiseases inPNG.

CC5.1cPlease describe your inherent risks that are driven by changes in other climaterelated developments

Risk driver DescriptionPotentialimpact

Timeframe

Direct/Indirect

Likelihood

Magnitudeof impact

Estimatedfinancial

implications

Managementmethod

Cost ofmanagement



Reputation

Reputationalrisk from notmanagingand reportingon OilSearch’sclimatechangeperformancewhich couldresult inshareholderactivism andloss ofcredibility inthe market.

Reducedstock price(marketvaluation)

1 to 3years Direct

About aslikely asnot

Low

Withdrawal ofinvestor /stakeholdersupport dueto poordisclosure onclimatechangeperformancecould lead toa decrease inOil Search’sshare price.

The keymanagementmeasure is thedevelopment andpublic disclosure ofthe details of OilSearch’s 2016Climate ChangeStrategy. Thestrategy states thefive key areas onwhich Oil Searchwill focus attention:reducing the impactof operationalemissions, climatechange adaptionimpacts, assistingPNG to meet itsclimate anddevelopmentobjectives,engaging onclimate policy, andworking with peersto build a collectiveresponse.Disclosures on theCompany websitealso include anoverview of ourclimate changeposition, risks andopportunities,governance anddemand outlook.

The cost ofdevelopingandimplementingthe climatechangestrategy wastheequivalent of1 FTE for theyear.

Increasinghumanitariandemands

Negativesocioeconomicimpacts ofclimatechange inPNGincreasedemand foraid funding/humanitarianresponse.


>6 years Direct Likely Medium

Increasingcost offinancingcommunityhealth anddevelopmentinitiatives dueto increasingneed. OilSearch hascommittedUS$56millionbetween2016 and2020 to theOil SearchFoundation.Financialaspects ofhelpingcountriessupportclimatechangerelatedcommitments.

Increasedinvolvement inPublic PrivatePartnerships andinvestigation ofexternal funding tosupport theCompany’scommunity healthand developmentinitiatives. Initiativesthus far include:establishment of theOil SearchFoundation andpartnering withGlobal Fund tosupport expansionof public healthprograms acrossPNG. As a part ofOil Search’s wellestablishedCommunityDevelopmentProgrammes, theCompanycollaborates withlocal communitiesto improve foodsecurity through avariety ofprogrammes. Forexample,supporting womenin agriculturalenterprise initiativesincludingconnecting womencooperatives tomarkets andprovidingagricultural trainingas well asimproving watersupply.

Costsinvolved inmanagingcommunityhealth anddevelopmentprogrammes.

Further Information

Page: CC6. Climate Change Opportunities

CC6.1Have you identified any inherent climate change opportunities that have the potential to generate a substantive change in your business operations, revenue orexpenditure? Tick all that apply



Opportunities driven by changes in regulationOpportunities driven by changes in physical climate parametersOpportunities driven by changes in other climaterelated developments

CC6.1aPlease describe your inherent opportunities that are driven by changes in regulation

Opportunitydriver Description Potential impact Timeframe Direct/Indirect Likelihood Magnitude

of impact

Estimatedfinancial

implications

Managementmethod

Cost ofmanagement



Internationalagreements

PNG hassigned anIntendedNationalDeterminedContribution(INDC) underthe ParisAgreementand hascommitted totransition to100%renewableenergy by2030, byusing as faras possiblerenewableenergysources, ifdonorfunding isavailable. OilSearch hastheopportunity tohelp the PNGgovernmentmeet thiscommitmentbyimplementingits PowerStrategy andencouragingthe adoptionof gas powerto displacedieselgeneration.

Newproducts/businessservices

1 to 3years Direct Likely Medium

The financialimplicationsfrom thisopportunityrelated toincreased salesof gas and newrevenue fromthe Powerbusiness whichwas establishedin 2016.Revenue fromgas sales in2016 wasUS$33,841,000.

The keymanagementmethod is toengage withthe PNGgovernmentto influencethe processto increaseaccess toenergy forthe PNGpeople usingrenewablesand transitionfuels. Inaddition, OilSearchPower hasobtained a25 yearpowerpurchaseagreementwith PNG’slargest powercompany,PNG PowerLimited(PPL). FEEDactivities willfocus onrefining thetechnical andcommercialaspects ofthe project tosupport aFinalInvestmentDecision,which isexpected tobe madebefore theend of 2017.Working withPPL, OilSearch hasbeeninstrumentalin improvingpower supplyin Tari. Thetown nowhas reliable,24hour perdaygeneration.We have alsocontinued toprogressdistribution ofpower acrossthe HelaCommunity,with newpower linesandconnections.A powerhookup trialcontinuedduring 2016,while a studyagreementwith KumulPetroleumHoldings, toexplore thecollaborationof Oil Searchwith Kumulacross arange ofpotentialPNG powerprojects, wassigned.

The cost ofmanagementof thisopportunityrelates toengagingwith the PNGgovernmenton fuelsources aswell as thecost todevelopPoweropportunitiesacross PNG.Oil Searchhas investedover US$30million in thePNGBiomasspowerproject.

CC6.1bPlease describe your inherent opportunities that are driven by changes in physical climate parameters



Opportunitydriver

Description Potential

impactTimeframe

Direct/Indirect

Likelihood

Magnitudeof impact

Estimatedfinancial

implications

Managementmethod

Cost ofmanagement

Otherphysicalclimateopportunities

Oil Search hasthe opportunityto maintain itsposition as aleadingcorporatecitizen in PNGand promote astableoperatingenvironment byimplementingclimateresilienceprojects toimprove ouroperatingenvironment,and createadditionalbenefits byimprovinginfrastructurefor the PNGcommunity ingeneral whichin turns makesdoing businessin PNG easier.

Widersocialbenefits


Key financialimplicationsincludecontinuedoperations in astableenvironment.Disruptionsfrom socialunrest/damagefrom severeweather andlandslides canreduceproduction. Byundertakingworks toimproveresilience,these impactscan bemitigatedwhich couldresult inimprovedproductivity.An increase ofonly 1% inproductivitycould result inan additionUS$12 millionin revenue.

Managementmethods includeembedding climatechange intointernal proceduresto ensure potentialclimate impacts areconsidered indesign andconstruction ofnew/upgradedassets. Investmentin sustainabledevelopment andcommunity supportprogrammes thatcan improveresilience withincommunities.Examples ofsuccessfulprogrammesinclude the malariacontrol andpreventionprogramme whichhas reducedmalaria levels toten times lowerthan thoserecorded in 2011and agriculturaltraining andsupport to enhancefood security. OilSearch is alsoseeking to supportlocal enterprisedevelopment bysupporting localwomen by helpingthem to formagriculturalcooperatives andproviding trainingopportunitiesaround basicbusiness andagricultural skills.We provide thewomen with seedsand materials sothey can sell theirproduce to us or atlocal markets togenerate a sourceof income andeconomicindependence. OilSearch work withthe PNGGovernment todeliver publicinfrastructure aspart of the TaxCredit Scheme.Projects include theconstruction of aroad betweenErave andSamberigi whichhas improvedaccess in allweather conditions.

An exampleof costs ofmanagementis OilSearch'sinvestment insustainabledevelopmentin which, OilSearchcommittedUS$56millionbetween2016 and2020 to theOil SearchFoundation tosupport PNGcommunitiesto be moreresilient. in2106, OilSearch spent$32.3 milliononinfrastructureprojectsmanaged onbehalf of thePNGGovernmentunder theInfrastructureTax CreditScheme,including theconstructionof a roadbetweenErave andSamberigiwhich hasimprovedaccess in allweatherconditions.

CC6.1cPlease describe your inherent opportunities that are driven by changes in other climaterelated developments

Opportunitydriver

Description Potential

impactTimeframe

Direct/Indirect

Likelihood

Magnitudeof impact

Estimatedfinancial

implications

Managementmethod

Cost ofmanagement



Reputation

Oil Search hasthe opportunityto maintain itsposition as aleadingcorporatecitizen in PNGand promote astableoperatingenvironment byimplementingclimateresilienceprojects toimprove ouroperatingenvironmentand createadditionalbenefits byimprovinginfrastructurefor the PNGcommunitywhich in turnsmakes doingbusiness inPNG easier.

Widersocialbenefits


Key financialimplicationsincludecontinuedoperations in astableenvironment.Disruptionsfrom socialunrest/damagefrom severeweather andlandslides canreduceproduction. Byundertakingworks toimproveresilience,these impactscan bemitigatedwhich couldresult inimprovedproductivity.An increase ofonly 1% inproductivitycould result inan additionUS$12 millionin revenue.

Managementmethods includeembedding internalprocedures toensure potentialclimate impacts areconsidered indesign andconstruction ofnew/upgradedassets. Investmentin sustainabledevelopment andcommunity supportprogrammes thatcan improveresilience withincommunities.Examples ofsuccessfulprogrammesinclude the malariacontrol andpreventionprogramme whichhas reducedmalaria levels toten times lowerthan thoserecorded in 2011and agriculturaltraining andsupport to enhancefood security. OilSearch alsosupports localenterprisedevelopment byassisting localwomen formagriculturalcooperatives andproviding basicbusiness andagricultural training,seeds andmaterials so theycan sell theirproduce togenerate a sourceof income andeconomicindependence. Wealso work with hostcommunitymembers to assistthem build smallerscale infrastructuresuch as water tanks, and to improve theschool learningenvironment byproviding materialsand skills toupgrade existingschool buildingsmade from bushmaterials to a moresturdy and waterproof construction.

An exampleof costs ofmanagementis OilSearch'sinvestment insustainabledevelopment.Oil SearchhascommittedUS$56millionbetween2016 and2020 to theOil SearchFoundation tosupport PNGcommunities.

Further Information

Module: GHG Emissions Accounting, Energy and Fuel Use, and Trading

Page: CC7. Emissions Methodology

CC7.1Please provide your base year and base year emissions (Scopes 1 and 2)

Scope Base year Base year emissions (metric tonnes CO2e)Scope 1 Thu 01 Jan 2009 Thu 31 Dec 2009 1402007Scope 2 (locationbased) Thu 01 Jan 2009 Thu 31 Dec 2009 3885Scope 2 (marketbased) Thu 01 Jan 2009 Thu 31 Dec 2009 0

CC7.2Please give the name of the standard, protocol or methodology you have used to collect activity data and calculate Scope 1 and Scope 2 emissions

Please select the published methodologies that you use



American Petroleum Institute Compendium of Greenhouse Gas Emissions Methodologies for the Oil and Natural Gas Industry, 2009

CC7.2aIf you have selected "Other" in CC7.2 please provide details of the standard, protocol or methodology you have used to collect activity data and calculateScope 1 and Scope 2 emissions

CC7.3Please give the source for the global warming potentials you have used

Gas ReferenceCO2 IPCC Second Assessment Report (SAR 100 year)CH4 IPCC Second Assessment Report (SAR 100 year)N2O IPCC Second Assessment Report (SAR 100 year)

CC7.4Please give the emissions factors you have applied and their origin; alternatively, please attach an Excel spreadsheet with this data at the bottom of this page

Fuel/Material/Energy EmissionFactor Unit Reference

Natural gas 0.0025 metric tonnes CO2eper m3 API

Diesel/Gas oil 2.73 metric tonnes CO2eper m3 API

Jet gasoline 2.2 metric tonnes CO2eper m3 API

Motor gasoline 2.35 metric tonnes CO2eper m3 API

Electricity 0.72 metric tonnes CO2eper MWh

Site specific emission factor calculated based on generation and gas used at Hidesgas fired power station.

Further Information

Page: CC8. Emissions Data (1 Jan 2016 31 Dec 2016)

CC8.1Please select the boundary you are using for your Scope 1 and 2 greenhouse gas inventory

Operational control

CC8.2Please provide your gross global Scope 1 emissions figures in metric tonnes CO2e

936720

CC8.3Please describe your approach to reporting Scope 2 emissions

Scope 2,locationbased

Scope 2, marketbased Comment

We arereporting aScope 2,locationbasedfigure

We have no operations where we are able toaccess electricity supplier emissions factors orresidual emissions factors and are unable toreport a Scope 2, marketbased figure

We have no operations where we are able to access electricity supplier emissionsfactors or residual emissions factors and are unable to report a Scope 2, marketbased figure. >90% of Oil Search’s electricity related scope 2 emissions arepurchased in a market where renewable energy products are not yet available.

CC8.3aPlease provide your gross global Scope 2 emissions figures in metric tonnes CO2e

Scope 2, locationbased Scope 2, marketbased (if applicable) Comment4739 We are not reporting a Scope 2, marketbased figure

CC8.4Are there any sources (e.g. facilities, specific GHGs, activities, geographies, etc.) of Scope 1 and Scope 2 emissions that are within your selected reportingboundary which are not included in your disclosure?

Yes

CC8.4aPlease provide details of the sources of Scope 1 and Scope 2 emissions that are within your selected reporting boundary which are not included in yourdisclosure

Source

Relevance ofScope 1emissionsfrom thissource

Relevance oflocationbased

Scope 2 emissionsfrom this source

Relevance of marketbased Scope 2

emissions from thissource (if applicable)

Explain why the source is excluded

SeismicinKurdistanregion ofIraq

Emissions arenot relevant

Emissions are notrelevant

No emissions from thissource

Activities outside PNG in 2016 involved the completion of seismicprocessing and related logistics in the Kurdistan Region of Iraq.The emissions associated with these activities are immaterial to ourinventory.



Source

Relevance ofScope 1emissionsfrom thissource

Relevance oflocationbased

Scope 2 emissionsfrom this source

Relevance of marketbased Scope 2

emissions from thissource (if applicable)

Explain why the source is excluded

Sydneyoffice


No emissions fromthis source


Scope 2 emissions associated with our office in Sydney areinsignificant compared with emissions from operations in PNG.

PortMoresbyoffice




Scope 2 emissions associated with our office in Port Moresby, areinsignificant compared with emissions from operations in PNG.

CC8.5Please estimate the level of uncertainty of the total gross global Scope 1 and 2 emissions figures that you have supplied and specify the sources of uncertaintyin your data gathering, handling and calculations

Scope Uncertaintyrange

Mainsources ofuncertainty

Please expand on the uncertainty in your data

Scope 1More than 5%but less than orequal to 10%

AssumptionsMain source of uncertainty relates to venting and fugitives, where API has been used to calculateemissions, and liquid fuels due to new accounting process. Note: this range does not take into accountany uncertainty associated with the IPCC GWP figures.

Scope 2(locationbased)

Less than orequal to 2% Assumptions

Main source of uncertainty relates to the composition of the gas entering the generator and theefficiency of the generator at the Hides Gas to Electricity Power Plant. Note: this range does not takeinto account any uncertainty associated with the IPCC GWP figures.

Scope 2(marketbased)

CC8.6Please indicate the verification/assurance status that applies to your reported Scope 1 emissions

Third party verification or assurance process in place

CC8.6aPlease provide further details of the verification/assurance undertaken for your Scope 1 emissions, and attach the relevant statements

Verificationor

assurancecycle inplace

Status inthe

currentreportingyear

Type ofverification

orassurance

Attach the statement Page/sectionreference

Relevantstandard

Proportionof

reportedScope 1emissionsverified(%)

Annualprocess Complete Limited

assurance

https://www.cdp.net/sites/2017/38/13838/Climate Change2017/Shared Documents/Attachments/CC8.6a/OSL2016SocialResponsibilityReportingLimitedAssuranceStatementFinal.pdf

Page 1 ASAE3000 100

CC8.7Please indicate the verification/assurance status that applies to at least one of your reported Scope 2 emissions figures

Third party verification or assurance process in place

CC8.7aPlease provide further details of the verification/assurance undertaken for your locationbased and/or marketbased Scope 2 emissions, and attach therelevant statements

Locationbased ormarketbasedfigure?

Verificationor

assurancecycle inplace

Status inthe

currentreportingyear

Type ofverification

orassurance

Attach the statement Page/Sectionreference

Relevantstandard

Proportionof

reportedScope 2emissionsverified(%)

Locationbased

Annualprocess Complete Limited

assurance

https://www.cdp.net/sites/2017/38/13838/ClimateChange 2017/SharedDocuments/Attachments/CC8.7a/OSL2016SocialResponsibilityReportingLimitedAssuranceStatementFinal.pdf

Page 1 ASAE3000 100

CC8.8Please identify if any data points have been verified as part of the third party verification work undertaken, other than the verification of emissions figuresreported in CC8.6, CC8.7 and CC14.2

Additional data points verified CommentOther: GHG emissions intensity Limited Assurance

CC8.9Are carbon dioxide emissions from biologically sequestered carbon relevant to your organization?

No

Further Information



Page: CC9. Scope 1 Emissions Breakdown (1 Jan 2016 31 Dec 2016)

CC9.1Do you have Scope 1 emissions sources in more than one country?

CC9.2Please indicate which other Scope 1 emissions breakdowns you are able to provide (tick all that apply)

By facilityBy GHG type

CC9.2bPlease break down your total gross global Scope 1 emissions by facility

Facility Scope 1 emissions (metric tonnes CO2e) Latitude LongitudeGOBE 186175 6.828806 143.744564Kutubu Refinery 31593 6.441771 143.214861CPF 365013 6.455938 143.222038APF 277754 6.339209 143.112684Hides 56674 6.001135 142.811746Kumul Terminal 11721 8.066835 144.561793Kopi & Moro 7790 7.313868 144.512359

CC9.2cPlease break down your total gross global Scope 1 emissions by GHG type

GHG type Scope 1 emissions (metric tonnes CO2e)CH4 262953CO2 673767

Further Information

Page: CC10. Scope 2 Emissions Breakdown (1 Jan 2016 31 Dec 2016)

CC10.1Do you have Scope 2 emissions sources in more than one country?

No

CC10.2Please indicate which other Scope 2 emissions breakdowns you are able to provide (tick all that apply)

By facility

CC10.2bPlease break down your total gross global Scope 2 emissions by facility

Facility Scope 2, locationbased (metric tonnes CO2e) Scope 2, marketbased (metric tonnes CO2e)Hides 4739 0

Further Information

Page: CC11. Energy

CC11.1What percentage of your total operational spend in the reporting year was on energy?

More than 0% but less than or equal to 5%

CC11.2Please state how much heat, steam, and cooling in MWh your organization has purchased and consumed during the reporting year

Energy type MWhHeat 0Steam 0Cooling 0

CC11.3Please state how much fuel in MWh your organization has consumed (for energy purposes) during the reporting year

2375994

CC11.3aPlease complete the table by breaking down the total "Fuel" figure entered above by fuel type

Fuels MWhNatural gas 2231190Diesel/Gas oil 114313Jet kerosene 30031



Fuels MWhOther: BP Zoom Fuel 443Other: Super 18

CC11.4Please provide details of the electricity, heat, steam or cooling amounts that were accounted at a low carbon emission factor in the marketbased Scope2 figure reported in CC8.3a

Basis for applying a low carbon emission factorMWh consumed associated with lowcarbon electricity, heat, steam or

cooling

Emissions factor (in units ofmetric tonnes CO2e per

MWh) Comment

No purchases or generation of low carbon electricity, heat,steam or cooling accounted with a low carbon emissionsfactor

0 0 NA

CC11.5Please report how much electricity you produce in MWh, and how much electricity you consume in MWh

Total electricityconsumed(MWh)

Consumed electricitythat is purchased

(MWh)

Total electricityproduced(MWh)

Total renewableelectricity produced

(MWh)

Consumed renewable electricitythat is produced by company

(MWh) Comment

6583 6583 0 0 0Consume the fullamount wepurchase

Further Information

Page: CC12. Emissions Performance

CC12.1How do your gross global emissions (Scope 1 and 2 combined) for the reporting year compare to the previous year?

Decreased

CC12.1aPlease identify the reasons for any change in your gross global emissions (Scope 1 and 2 combined) and for each of them specify how your emissionscompare to the previous year

ReasonEmissions

value(percentage)

Directionof

changePlease explain and include calculation

Emissionsreductionactivities

2.6 Decrease

Due to emission reduction activities implemented during the year, despite an increase in production,emissions have not grown as high as could be expected. Emissions reduction activities accounted for25,022 tCO2e. The percentage change in emissions due to these emission reduction activities was2.61% (Based on 25022/957460 = 2.6%).

DivestmentAcquisitionsMergers

Change inoutput 3.4 Increase

Net annual production increased by 3.4%. If no emission reduction measures had been introduced toreduce the emissions intensity of the operations, increased energy demands to fuel increased productionwould have generated an extra 3.4% of emissions.

Change inmethodologyChange inboundaryChange inphysicaloperatingconditions

Unidentified 2.3 DecreaseThe net decrease in overall emissions was 1.5%. Taking into account the emissions from increasedproduction, and emission reduction projects, there was an additional 2.3% in emission reductions whichcould not be identified.

Other

CC12.1bIs your emissions performance calculations in CC12.1 and CC12.1a based on a locationbased Scope 2 emissions figure or a marketbased Scope 2 emissionsfigure?

Locationbased

CC12.2Please describe your gross global combined Scope 1 and 2 emissions for the reporting year in metric tonnes CO2e per unit currency total revenue

Intensityfigure =

Metricnumerator (Grossglobal combinedScope 1 and 2emissions)

Metricdenominator:Unit totalrevenue

Scope 2figureused

%changefrom

previousyear

Directionof change

frompreviousyear

Reason for change

0.00198 metric tonnes CO2e 476874000 Locationbased 12 Increase

A reduction in average realised oil and condensate pricein 2016 compared to 2015 exceeded the emissionsintensity reductions achieved leading to an increase inthis intensity metric.



CC12.3Please provide any additional intensity (normalized) metrics that are appropriate to your business operations

Intensityfigure =

Metric numerator (Grossglobal combined Scope 1

and 2 emissions)

Metricdenominator

Metricdenominator:Unit total

Scope 2figureused

%changefrom

previousyear

Direction ofchangefrom

previousyear

Reason for change

0.046 metric tonnes CO2ebarrel of oilequivalent(BOE)

20467000 Locationbased 4 Decrease

Production increased slightly from lastyear and emissions reduced due toemission reduction activities in the oilfields.

Further Information

Page: CC13. Emissions Trading

CC13.1Do you participate in any emissions trading schemes?

No, and we do not currently anticipate doing so in the next 2 years

CC13.2Has your organization originated any projectbased carbon credits or purchased any within the reporting period?

No

Further Information

Page: CC14. Scope 3 Emissions

CC14.1Please account for your organization’s Scope 3 emissions, disclosing and explaining any exclusions

Sources ofScope 3emissions

Evaluationstatus

metrictonnesCO2e

Emissions calculation methodology

Percentageof

emissionscalculatedusing dataobtainedfrom

suppliers orvalue chainpartners

Explanation

Purchasedgoods andservices

Relevant,not yetcalculated

Capitalgoods


Fuelandenergyrelatedactivities (notincluded inScope 1 or 2)

Relevant,calculated 1036 National Greenhouse Gas Factors – Scope 3 emission factors

Upstreamtransportationanddistribution


Wastegenerated inoperations


Businesstravel


Employeecommuting


Upstreamleased assets


Downstreamtransportationanddistribution


Processing ofsold products

Relevant,calculated 542595

10.1 Tier 1 method: using NGA fuel factors as proxy for Oilrefinery emissions 10.2 Tier 3 data [PNGLNG operator supplied]for export gas processed at PNG LNG

65.00%

Calculated by usingoperational control sales methodology, asit provides the bestrepresentation of ourbusiness.



Sources ofScope 3emissions

Evaluationstatus

metrictonnesCO2e

Emissions calculation methodology

Percentageof

emissionscalculatedusing dataobtainedfrom

suppliers orvalue chainpartners

Explanation

Use of soldproducts

Relevant,calculated 10611942

11.1 – Uses Tier 3 activity data, default factors (API) for sales ofrefined fuels 11.2 – Uses Tier 3 data [incl facility specificemissions factors] for use of sales gas from Hides GTE. 11.3 –Uses Simplified method, use of Crude Oil factor NGER ScheduleI. Part 2 for end use of sold oil 11.4 N/A 11.5 – Uses sales datafor LNG quantity, Tier 1 for LNG use, assuming all product used asenergy fuel. With NGER Schedule 1 Part 2 default factor forconsumption of LNG.

Calculated by usingoperational control sales methodology, asit provides the bestrepresentation of ourbusiness.

End of lifetreatment ofsold products

Notrelevant,explanationprovided

There is limited end oflife treatment requiredfor our products as themajority arecombusted. Theemissions from thecombustion of ourproducts are reportedabove.

Downstreamleased assets


Oil Search does nothave any downstreamleased assets

Franchises


Oil Search does nothave any franchises

Investments Relevant,calculated 250787 15.1 Tier 3 data from PNG LNG Operator 100.00%

Other(upstream)


Oil Search is notaware of otherupstream scope 3emissions

Other(downstream)


Oil Search is notaware of otherdownstream scope 3emissions

CC14.2Please indicate the verification/assurance status that applies to your reported Scope 3 emissions

No third party verification or assurance

CC14.3Are you able to compare your Scope 3 emissions for the reporting year with those for the previous year for any sources?

No, this is our first year of estimation

CC14.4Do you engage with any of the elements of your value chain on GHG emissions and climate change strategies? (Tick all that apply)

No, we do not engage

CC14.4cPlease explain why you do not engage with any elements of your value chain on GHG emissions and climate change strategies, and any plans you have todevelop an engagement strategy in the future

A Responsible Supply Chain Strategy is currently under development and will include engagement with suppliers on all key sustainability issues andimpacts, including climate change where relevant.

Further Information

Module: Sign Off

Page: CC15. Sign Off

CC15.1Please provide the following information for the person that has signed off (approved) your CDP climate change response

Name Job title Corresponding job categoryGerea Aopi Oil Search Board Executive Director (and EGM Stakeholder Engagement) Director on board

Further Information

Module: Oil & Gas



Page: OG0. Reference information

OG0.1Please identify the significant petroleum industry components of your business within your reporting boundary (select all that apply)

Exploration, production & gas processing

Further Information

Page: OG1. Production, reserves and sales by hydrocarbon type (1 Jan 2016 31 Dec 2016)

OG1.1Is your organization involved with oil & gas production or reserves?

Yes

OG1.2Please provide values for annual gross and net production by hydrocarbon type (in units of BOE) for the reporting year in the following table. The valuesrequired are aggregate values for the reporting organization

Product Gross production (BOE) Net production (BOE) Production consolidation boundary CommentAssociated natural gas 11035012 Operational controlLight oilMedium oil 9455943 Operational control

OG1.3Please provide values for reserves by hydrocarbon type (in units of BOE) for the reporting year. Please indicate if the figures are for reserves that are proved,probable or both proved and probable. The values required are aggregate values for the reporting organization

Product Country/region Reserves (BOE) Date of assessment Proved/Probable/Proved+ProbableAssociated natural gas Papua New Guinea 370000000 Sat 31 Dec 2016 ProvedLight oilMedium oil Papua New Guinea 62300000 Sat 31 Dec 2016 Proved

OG1.4Please explain which listing requirements or other methodologies you have used to provide reserves data in OG1.3. If your organization cannot provide datadue to legal restrictions on reporting reserves figures in certain countries, please explain this

During the year, NSAI were engaged by the PNG LNG Project Operator, ExxonMobil, to assess resources in all Project fields, taking into account thesignificant development and production activity which has occurred since their last detailed field certification in 2009. Oil Search participated extensivelyin the recertification exercise and assisted the certifier specifically with the assessment of the Associated Gas fields. For each field, NSAI assessedoriginal gasinplace (OGIP) and estimated ultimate recoveries (EUR) to subsequently determine the portfolio OGIP and EUR estimates. Fieldproduction performance, well deliverability and compositional modelling were also considered. An independent flow stream model was used todetermine probabilistic production forecasts. Oil Search has elected to use the estimates from NSAI’s recertification of PNG LNG resources as the basisfor the Company’s 2016 Reserves and Resources Statement. Resource estimates, after historical production and allowance for fuel, flare andshrinkage, have been adjusted for economic limit using Oil Search’s corporate assumptions, which include sensitivities to upside and downside priceforecasts.

OG1.5Please provide values for annual sales of hydrocarbon types (in units of BOE) for the reporting year in the following table. The values required are aggregatevalues for the reporting organization

Product Sales(BOE) Comment

Associated naturalgas 1150000 Figures provided are equity of sales by Oil Search from Oil Search controlled operations only.

Light oilMedium oil 5097000 Figures provided are equity of sales by Oil Search from Oil Search controlled operations only.

Natural gas liquids(NGL)Liquefied Natural Gas(LNG)

24342000 Figures provided are equity of sales by Oil Search from Oil Search controlled interested i.e. JV assets not underOil Search’s operational control.

OG1.6Please provide the average breakeven cost of current production used in estimation of proven reserves

Hydrocarbon/project Breakevencost/BOE Comment

Production, sales anddistribution, royalties andinterest expense

18.5Operating cash flow breakeven of US$18.15/boe – this is Oil Search’s consolidated position and includesthe weighted average of all operating costs for all fields and facilities (including production, sales anddistribution, royalties, interest expense).

OG1.7 In your economic assessment of hydrocarbon reserves, resources or assets, do you conduct scenario analysis and/or portfolio stress testing consistent witha lowcarbon energy transition?

No

OG1.7b Please explain why you have not conducted any scenario analysis and/or portfolio stress testing consistent with a lowcarbon energy transition

Oil Search is in the process of undertaking scenario analyses.

Further Information



Page: OG2. Emissions by segment in the O&G value chain (1 Jan 2016 31 Dec 2016)

OG2.1Please indicate the consolidation basis (financial control, operational control, equity share) used to report the Scope 1 and Scope 2 emissions by segment inthe O&G value chain. Further information can be provided in the text box in OG2.2

Segment Consolidation basis for reporting Scope 1emissions

Consolidation basis for reporting Scope 2emissions

Exploration, production & gasprocessing Operational Control Operational Control

Storage, transportation & distribution Operational Control Operational ControlRefining Operational Control Operational Control

OG2.2Please provide clarification for cases in which different consolidation bases have been used and the level/focus of disclosure. For example, a reportingorganization whose business is solely in storage, transportation and distribution (STD) may use the text box to explain why only the STD row has beencompleted

N/A

OG2.3Please provide masses of gross Scope 1 carbon dioxide and methane emissions in units of metric tonnes CO2 and CH4, respectively, for the organization’sowned/controlled operations broken down by value chain segment

Segment Gross Scope 1 carbon dioxide emissions (metrictonnes CO2)

Gross Scope 1 methane emissions (metrictonnes CH4)

Exploration, production & gasprocessing 622633 12522

Storage, transportation &distribution 19511 0

Refining 31593 0

OG2.4Please provide masses of gross Scope 2 GHG emissions in units of metric tonnes CO2e for the organization’s owned/controlled operations broken down byvalue chain segment

Segment Gross Scope 2 emissions (metric tonnes CO2e) CommentExploration, production & gas processing 4739

Further Information

Page: OG3. Scope 1 emissions by emissions category (1 Jan 2016 31 Dec 2016)

OG3.1Please confirm the consolidation basis (financial control, operational control, equity share) used to report Scope 1 emissions by emissions category

Segment Consolidation basis for reporting Scope 1 emissions by emissions categoryExploration, production & gas processing Operational ControlStorage, transportation & distribution Operational ControlRefining Operational Control

OG3.2Please provide clarification for cases in which different consolidation bases have been used to report by emissions categories (combustion, flaring, processemissions, vented emissions, fugitive emissions) in the various segments

N/A

OG3.3Please provide masses of gross Scope 1 carbon dioxide and methane emissions released into the atmosphere in units of metric tonnes CO2 and CH4,respectively, for the whole organization broken down by emissions category

Emissions category Gross Scope 1 carbon dioxide emissions (metric tonnes CO2) Gross Scope 1 methane emissions (metric tonnes CH4)Combustion 478180 0Flaring 104698 448Process emissions 0 0Vented emissions 90889 8088Fugitive emissions 0 3986

OG3.4Please describe your organization’s efforts to reduce flaring, including any flaring reduction targets set and/or its involvement in voluntary flaring reductionprograms, if flaring is relevant to your operations

Oil Search has undertaken emission reduction projects to reduce flaring. These projects include flare minimisation and stabiliser operating envelopeimprovements.

Further Information

Page: OG4. Transfers & sequestration of CO2 emissions (1 Jan 2016 31 Dec 2016)



OG4.1Is your organization involved in the transfer or sequestration of CO2?

No

Further Information

Page: OG5. Emissions intensity (1 Jan 2016 31 Dec 2016)

OG5.1Please provide estimated emissions intensities (Scope 1 + Scope 2) associated with current production and operations

Yearending Segment Hydrocarbon/product

Emissions intensity (metrictonnes CO2e per thousand

BOE)

% changefrom

previousyear

Direction ofchange fromprevious year

Reason forchange

2016Exploration,production & gasprocessing

Associated natural gasNatural gas condensateNatural gas liquids(NGL)Light oilMedium oilRefined products

43.5 3 DecreaseDue to anincrease inproduction

2016Storage,transportation &distribution


2.1 23 IncreaseMore liquidfuelsconsumed

2016 Refining


210 13 DecreaseDue to anincrease inproduction

OG5.2Please clarify how each of the emissions intensities has been derived and supply information on the methodology used where this differs from informationalready given in answer to the methodology questions in the main information request

For exploration, production & gas processing Oil field emissions / gas and condensate production & total oil production & associated gas exported toPNGLNG.For storage, transportation & distribution segment related emissions / all oil producedFor refining refinery emissions (including electricity emissions) / total refined fuels.

Further Information

Page: OG6. Development strategy (1 Jan 2016 31 Dec 2016)

OG6.1For each relevant strategic development area, please provide financial information for the reporting year

Strategicdevelopment area

Describe how this relates to yourbusiness strategy

Salesgenerated EBITDA Net assets CAPEX OPEX Comment

Other: All businessfinancial statistics

Key business financial data is presentedin this column. 1235908000 799039000 4725316000 217600000 555100000

Pages 71,103 and146 of theAnnualreport.Presentedin fullmillions inUSD

Biomass,excluding Biofuels

Oil Search has been working with keyPNG entities to develop a biomass plant.This forms part of our wider commitment toimprove access to power in PNGcommunities (currently 6% of thepopulation has access to power).

0 0 0 14800000 0

Amountinvestedinbiomassproject in2016. Allfiguresprovidedin USD

OG6.2Please describe your future capital expenditure plans for different strategic development areas

Strategic development area CAPEX Total return expected from CAPEX investments Comment

OG6.3Please describe your current expenses in research and development (R&D) and future R&D expenditure plans for different strategic development areas

Strategic development area R&D expenses – Reporting year R&D expenses – Future plans Comment



Further Information

Page: OG7. Methane from the natural gas value chain

OG7.1Please indicate the consolidation basis (financial control, operational control, equity share) used to prepare data to answer the questions in OG7

Segment Consolidation basisExploration, production & gas processing Operational ControlStorage, transportation & distribution Operational ControlRefining Operational Control

OG7.2Please provide clarification for cases in which different consolidation bases have been used

N/A

OG7.3Does your organization conduct leak detection and repair (LDAR), or use other methods to find and fix fugitive methane emissions?

No

OG7.3bPlease explain why not and whether you plan on conducting leak detection and repair, or other methods to find and fix fugitive methane emissions

We have fixed gas detection in most (but not all) facilities with continuous monitoring for gas leaks. In addition, we have an integrity managementprogramme for equipment, piping and pipeline inspection. The frequencies are risk based, taking into account, code requirements, and applicabledegradation mechanisms to the item concerned.

OG7.4Please indicate the proportion of your organization’s methane emissions inventory estimated using the following methodologies (+/ 5%)

Methodology Proportion of total methane emissions estimated withmethodology

What area of your operations does this answerrelate to?

Direct detection and measurement 0% Other: PNGEngineering calculations 25% to <50% Other: PNGSourcespecific emission factors(IPCC Tier 3) 0% Other: PNG

IPCC Tier 1 and/or Tier 2 emissionfactors 50% to <75% Other: PNG

OG7.5Please use the following table to report your methane emissions rate

Yearending Segment

Estimate total methane emitted expressed as % ofnatural gas production or throughput at given

segment

Estimate total methane emitted expressed as % of totalhydrocarbon production or throughput at given segment

2016Exploration,production & gasprocessing

0.39% 0.28%

OG7.6Does your organization participate in voluntary methane emissions reduction programs?

No

OG7.7Did you have a methanespecific emissions reduction target that was active (ongoing or reached completion) in the reporting year and/or were methaneemissions incorporated into targets reported in CC3?

No

OG7.7cPlease explain: (i) why you do not have a methanespecific emissions reduction target or do not incorporate methane into your targets reported in CC3; and (ii)forecast how your methane emissions will change over the next five years

Further Information

CDP: [D][,][D2]