Foreword The Gupco operated, Port Said District, is committed to the goal of no damage to the environment. In October 2001, we became the first Gupco District to be ISO 14001 certified. We were re-certified in 2002 and expect to be again approved early this year. As part of continuous improvement, a new incinerator was successfully deployed. This became the first time that a Petrojet built incinerator was used by Gupco. The District operates two platforms in the Mediterranean. This is a new area for the industry and we are leading the way with innovative approaches to protecting the environment. The first platform, Hapy, is solar powered. The second, Akhen, is the first to use a disposal well to handle produced water. No water or any oil is discharged to the sea. Also, the Akhen platform utilizes the first micro turbine in Egypt. This eliminates cold venting associated with instrumentation gas. The District presented a technical paper at the 2002 Mediterranean Offshore Conference to discuss the benefits of down hole offshore water disposal. We continue to work with area petroleum companies to share best practices and are committed to continuous improvement in the area of environmental protection. El-Sayed Abul Ela Doug Owens ___________________________ ____________________________ P.S. District Gen. Mgr. P.S. District Gen. Mgr.

Red Sea

Main Office

Introduction Our Commitment: We are fully committed to the achievement of the highest standards of HSE performance in all of our operations. This commitment covers the management and operation of the offshore Mediterranean Hapy and Akhen gas fields and associated gas processing plant near Port Said and connecting pipelines. In line with GUPCO Policy, we have set three simple goals that require all personnel working within GUPCO Port Said District operations either as employee, contractor or third party to strive towards. The Goals are that within GUPCO Port Said District operated activities:

There will be NO accidents. There will be NO harm to people.

There will be NO damage to the environment. Assessment and Compliance: We will assess the impact of our operations using recognized risk assessment processes for all new and existing operations. These will be used to identify and implement appropriate controls to reduce the impact on the environment, including the prevention of pollution, and to improve health and safety. We will at all times strive to exceed regulatory compliance and work according to accepted best practices within the industry. Improvement and Reporting: To achieve continual health, safety and environmental improvement, we will develop an action plan, incorporating annual targets against which our performance will be reviewed. The findings of this will be openly reported in our annual HSE statement. Personnel: Everyone working for and with us will be accountable for HSE Performance. We will work closely with our contractors, third parties and suppliers to ensure safe operations are realistically achievable at all times. We will ensure competence of Hapy & Akhen personnel through selection, placement, training and assessment. A prime motivator for our contractor selection process will be to work only with organizations that are committed to working with us in pursuit of the superior HSE performance standards we set ourselves. We will recognize good and exceptional HSE performance, encourage openness and invite the participation of everyone in decisions, which impact on safe operation and demonstrate the belief that HSE performance is genuinely held as a primary priority. Everyone is expected to give their full commitment to the achievement of these goals. Environmental Commitment: We will maintain an EMS that will meet the highest environmentally recognized standards.

ISO-14001 The Port Said Environmental Management system is aligned with the ISO14001 management process and is cyclical as represented in the diagram below. Port Said became ISO14001 certified in October of 2001 and has to date, maintained the certification.

EMS for ISO 14001

Continual Improvement

Environmental Policy

Management

Review Planning

Checking and

Corrective Implementation

Fig. (1): The Processes Of Environmental Management.

Description of our operations The Egypt BU consists of 2 strategic performance units, Base and Growth. The

Base SPU also know as GUPCO PU (performance unit) covers operations in the Gulf Of Suez (and the Western Desert. The Growth SPU consists the of Exploration PU and Gas Operations & Projects PU covering exploration and operations in the Nile Delta.

GUPCO is the Joint Venture (JV) operator company, owned in equal shares by BP and EGPC (Egyptian General Petroleum Corporation), and is responsible for operating producing oil and gas fields in the Gulf of Suez (GOS), Western Desert and Nile Delta. BP is in positions of influence vs. control at all GUPCO operated locations and is consistently striving to promote the adoption and implementation of BP policy requirements

Port Said Dist. consists of an onshore gas plant and two offshore platforms (Hapy and Akhen). Akhen is a newly established P/F, it sends its gas to another treatment facility but is operated by GUPCO (a 50/50 BP & Egyptian General Petroleum Corporation (EGPC) Joint Venture operating company) staff. The gas plant is constructed at west harbor, which is along the Mediterranean Sea coast about 20 (Km) west of Port Said. The gas daily production is about 300 Mscf/d and about 300 barrels of condensate.

The Hapy P/F is a 12-slot production P/F supported on four legs in 80 (m) of water approximately 40 (Km) offshore due north of the Damietta Promontory.

The gas and associated condensate and water arrive onshore and are fed to the plant inlet. The offshore transportation system consists of a 30 diameter multiphase pipeline capable of transporting a peak rate of 12 mscm/d of natural gas and produced fluids.

The plant is a low temperature separation plant with a condensate stabilizer tower to meet the required sales gas and condensate specifications.

The number of employees is about 58 Gupco and 90 contractors.

Mediterranean Development

Non-Operated Acreage

West Harbor

NORTH SINAIOFFSHORE

Damietta

OFFSHORE N. SINAI

N.PT.SAID

Abu Madi / El Qara

Gas Discovery - Pre

Seti Plio

ThekahKamose

Tao

Tuna DeniseTEMSAH Akhen

Karous

BALTIM Baltim North

Baltim S.

Baltim East Seth

Hapy

Gas Discovery - Pliocene BP Operated Acreage

Temsah

Port Said

RAS EL BARR

Seth

Annubus

HAPY OFFSHORE P/F

AKHEN OFFSHORE P/F

How we identify and manage important environmental impacts

To identify the impacts and relative ranking we first identify all of the activities and operations of the facility and then clarify the aspects of each activity and consequently the impacts.

We assign a score for duration, extent, magnitude, risk and significance and then we calculate the severity score. Also we identify the potential environmental impacts for land, air, groundwater, seawater, flora/fauna and human.

After this a plan with objectives and targets is set to manage these impacts. ANNEX-1 ASPECT / IMPACT SCHEDULE.

Our impacts and performance Issue: Greenhouse gases

Methane and carbon dioxide emissions from the onshore pig receiver and blowdown process.

Minimising emissions on the new Akhen Platform Impact

Air / Climate Changes (global warming). Air pollution.

Management A two-phase approach was adopted to reduce emissions from the pig receiver:

Pigging procedures were reviewed and amended to minimize the volume of gas released during pig receiving

The leaking valve scheduled to be replaced

The operations and maintenance departments now have procedures in place to minimize the occurrence of the abnormal conditions that can cause blow down

Instillation of a micro-turbine on the new Akhen platform for instrument control as an alternative to using gas to minimize greenhouse gas emissions

icro Turbine

Modifications to the onshore flare ignition system to

Performance

M reduce flaring.

GHG Emissions (CO2 Equivalent Tonnes)

0

1000

2000

3000

4000

5000

6000

7000

8000

2000 2001 2002

co2

Equi

v (T

onne

s)

An independent research group, Tebbin Institute for Metallurgical Studies (TIMS) energy and Environmental Research Center (E2RC), carries out environmental monitoring including air emissions. To date, air quality complies with Egyptian Law (Law/4/1994). Future plans Ongoing monitoring of existing operations and implementing Lessons Learned in new projects.

Issue: Halocarbons (R-22) The main source is the refrigerant used for air conditioning systems in offices and

process plant. Impact Ozone depletion. Climate change. Management Routine and corrective maintenance in place to minimize leakage R-22 has now been phased out and is no longer purchased Performance Occasional audits of chemical purchased to ensure no R-22 is available for use Future plans N/A

Issue: Waste Water (Onshore) Wastewater collection and treatment facilities were not operating correctly. Consequently, wastewater had to be collected and disposed by local authority.

Impact Increased consumption of fresh water for irrigation Increased volume of on-site traffic Management

Regular monitoring of the treated effluent to ensure that it is suitable for irrigation and poses no threat to onsite personnel

An independent external laboratory also assesses effluent quality. Performance Irrigation now routinely uses treated wastewater rather than freshwater Future plans NA

Issue: Offshore Disposals (Drilling liquids, waste water) The main source of these disposals is the drilling operations and the processing

operations for the produced gas. Impact Water Pollution. Management Disposal well has been created on Akhen P/F to handle all of these disposals.

Performance All measurements and expectations for this well insure its efficiency to handle the

disposal fluids according to the environmental requirements.

Issue: Solid wastes (Plastics, Cartoons, Filters, Rags..) The main source of these wastes are: Office wastes (paper, food scrap) Packing materials (cardboard, paper..) Maintenance operations (spent filters and oily rags) Impact Limited control on how waste is handled and disposed after leaving the premises. Management

Assessment of waste streams and existing disposal options indicated that high temperature incineration was the safest and least polluting way of disposing these wastes

An incinerator has been constructed to safely dispose of all identified materials according to documented operating procedures and under supervision of operations department.

Waste management procedures being revised to allow for the appropriate storage and segregation of wastes to be incinerated.

Performance Controlled disposal of hydrocarbon-contaminated wastes All measurement and operating features are compatible with the environmental

requirements.

Future Plans NA

Issue: Solid waste accumulation in old Project Yard Solid wastes including drums, scrap steel, timber from the construction phase of the Plant were being stored adjacent to the Plant.

Impact Area prone to flooding, which increased the risk of the stored

Chemicals escaping to the environment.

Risk of the drums being stolen, posing a potential health risk to individuals coming into contact with them. Unsightly and bad for company image. Management

Ensure that this area remains clear.

Performance

The area has been emptied of all scrap materials and is now empty.

Future plans Storage of wastes in this area will not be permitted.

Objectives and targets Performance

Objective Reporting Year Target

Reporting Year Actual

Cleaning of the solid wastes storage area (wastes remaining from the Proj. phase).

2001 2001

Use of treated wastewater generated onsite for onsite irrigation.

2001 2001

Provide of an incineration facility for different kinds of wastes.

2002 2002

2003 Plans

Objective Target for [current year] Replace the pig trap 30 leaking valve.

Q2 / 2003

Increase the green area in front of the main gate.

Q4 / 2003

Glossary EMS Environmental Management System

EGPC Egyptian General Petroleum Corporation GUPCO Gulf of Suez Petroleum Company

PS Port Said District PU Performance Unit

Annex 1 Environmental aspect matrix

"Aspects Matrix-Version8.xls"

Feedback Tell us what you think. Are our statements easy to understand, not detailed enough or perhaps too complicated?

Is there any further information in which you are interested? Let us know what you think so we can improve our environmental reporting. If you have any queries about this report or general operations, please write or telephone us and we will be happy to assist.

Contact Guide

Address: Palestine St. Fourth Sector New Maddi, Cairo Egypt Zip Code: 11511 - P.O Box: 2400 (Cairo Office)

Key Persons: Doug Owens - ownesdc@bp.com

Mohamed Tawfeek - tawfeekma@gupco.net

The next site name PS Environmental Statement will be issued by The Health Safety & Environment Department - PS and will cover the period March 2003- January 2004.

Verification Statement Together with the requirements for ISO14001, independent verification is a requirement for all major sites within BP. For such sites, a simple attestation statement is shown below:

We have independently reviewed site Port Said District Environmental Statement and conclude it represents a true and fair reflection of the environmental programmes and performance within 2002 We have found no statements in this report which we have been unable to substantiate and verify through observations, visits and review of the appropriate systems.

Signed: ________________________ Date: _______________

El-Sayed Abul Ela Doug OwensP.S. District Gen. Mgr. P.S. District Gen. Mgr.IntroductionISO-14001Implementation

Description of our operationsHow we identify and manage important environmental impactsOur impacts and performanceIssue: Greenhouse gasesIssue: Halocarbons (R-22)Issue: Waste Water (Onshore)Issue: Offshore Disposals \(Drilling liquids, waIssue: Solid wastes \(Plastics, Cartoons, FilterFuture PlansIssue: Solid waste accumulation in old Project YardImpactManagementPerformanceFuture plans

Objectives and targets

GlossaryAnnex 1 Environmental aspect matrixFeedbackContact GuideVerification Statement