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Seven EnergyCorporate Social Responsibility Report 2013

Operatingresponsibly

Welcome 01Chief Executive’s Statement 02Highlights 04Group overview 06

Sustainability managementStakeholder relations 10Nigerian content 14People 18Compliance 22Asset protection 24Health and safety 26Environment 28

GRI conformance table 32Glossary of terms 36

Seven Energy is an indigenous Nigerianoil and gas exploration, development,production and distribution companywith a vision to become the leadingsupplier of gas to the Nigerian domesticmarket for power generation andindustrial consumption. We operatewith corporate responsibility at theheart of everything we do.

What’s inside

Seven Energy Corporate Social Responsibility Report 2013 01

We are headquartered in Lagos andLondon, with our operational activitiesbeing solely focused on Nigeria. Ouraim is to deliver value to Nigeria bybeing the local partner of choice andwe recognise the important role thatall of our stakeholders play in oursuccess by listening to them andstriving to play our part in thisrelationship by acting responsibilityand putting transparency at the heartof our business.

Seven Energy operates in a uniqueenvironment and our goal is to leadamongst our peers in all areas ofcorporate social responsibility (“CSR”)as a holistic strategy for our business.The nature of our work is regenerativeand we are focused on continuing thisculture in a manner that embraces ourpeople and local host communities,whilst adhering to both local heritageand global standards with the overallresult of deserved profit.

In this report, we cover activities thatare material to our business andinitiatives with our joint venturepartners. The period under review isJanuary 2013 to December 2013, inline with our historical corporate socialresponsibility reporting approach. Wecontinue to make concerted efforts toincorporate best practice in dailyactivities in our bid to comply withnational and international standards,including the International FinanceCorporation’s (“IFC”) 8 PerformanceStandards and the Equator Principles.In the future, we aspire to full CSRreporting utilising Global ReportingInitiative Principles (“GRI Principles”) as our benchmark.

For more information about SevenEnergy’s activities, please visit ourwebsite www.sevenenergy.com.

We welcome feedback on this reportor any of our activities that you maydirect to Dr Glenn Bestall, our VicePresident, QHSSE/CSR [email protected].

Welcome

IntroductionWe are proud to present our Corporate SocialResponsibility Report 2013. With a business modeldesigned to capture the full value chain, we aim toutilise our first mover advantage as a supplier to thedomestic gas market in our core operating areas andto maximise shareholder value through sustainablelong-term growth across the value chain.

Chief Executive’s Statement

Acting as a responsible partnerOur aim is to comply with national laws and customs, whilst also moving towardsattaining internationally accepted best practices and standards of operation.

CSR updateTo all our stakeholders, including ouremployees, contractors, joint venturepartners, suppliers and most importantly,our local host communities.

There is no doubt that CSR is importantto us, in fact, it is integral to our businessin every way.

At the heart of our business are ourpeople. Seven Energy has a highlyexperienced management team,combining the experience and expertiseof the original founders with theinternational operating capability of theoil and gas super majors and the oilservice industry. Our management issupported by a large and talentedworkforce. In 2013, we employed onaverage some 170 employees, of which84% are based in Nigeria and 93% ofour in-country employees are of Nigeriannationality.

The importance of peopleIn a country of high unemployment anduneven employee rights, Seven Energy iscommitted to sustaining a workforcethat is both diverse and inclusive and theGroup will continue to strengthen itspolicies and procedures for looking afterand developing its staff. In particular, theGroup runs a mentoring scheme forNigerian staff that aims to ensure thatthe Group continues to increase thenumber of Nigerian nationals in toppositions. In addition, the Groupcontinues to work with its local hostcommunities to provide employment,education, training and essentialinfrastructure.

Seven Energy strives to conduct itsbusiness in a responsible and transparentfashion and remains committed tosustainability and the health, safety and security of its workforce and thecommunities in which it operates. By theend of 2013, we reached 8.6 millioncumulative man-hours without a LostTime Incident (“LTI”), our TotalRecordable Incidence Rate continued tobe zero and no material environmentalissues or major security incidents werereported.

PartnershipsOur QHSSE/CSR performance is one thatI am hugely proud of and illustrates ourongoing focus and dedication on thesematters. The recent investment by theIFC, the IFC ALAC Fund and Temasek inour business, and IFC’s Category B ratingof its investment highlights that ourprojects are having a limited adversesocial and / or environmental impact thatcan be readily addressed throughmitigation measures. The trust placed inus by these investors is hugely importantto us and I look forward to furthersupporting the CSR team in 2014 tocontinue adding value to ourpartnerships and operations goingforward.

Phillip IhenachoChief Executive Officer

02 Seven Energy Corporate Social Responsibility Report 2013

8.6mman-hours without aLost Time Incident (“LTI”)

93%of our in-country employeesare of Nigerian nationality

Phillip IhenachoChief Executive Officer


Policy Associated standard Relevanceand management system

All GRI Global Reporting Initiative (“GRI”) is a leading organisation in the sustainability field. GRI promotes the use of sustainability reporting as a way for organisations to become more sustainable and contribute to sustainable development.

Corporate Social ISO 9001:2008, 14001:2004 The international standards or benchmarks forResponsibility, Quality Quality and Environmental management, Management and respectively.Environment

Quality Management API American Petroleum Institute (“API”) is an international oil and gas industry body dedicated to producing and maintaining engineering and construction standards.

H&S OHSAS 18001 International standard for health and safety management systems.

Corporate Social World Bank and IFC principles The IFC is a member of the World Bank Group Responsibility that offers investment, advisory (including

environmental and social ‘performance standards’), and asset management services to encourage private sector development in developing countries.The IFC is also an equity investor in Seven Energy.

Environmental EGASPIN: 2002 Environmental Guidelines and Standards for the Petroleum Industry in Nigeria (“EGASPIN”).

Asset Protection ISO 31000: 2009 The international standard for risk management.

Asset Protection VPSHR Voluntary Principles on Security and Human Rights, which are a set of principles designed to guide companies, particularly in the extractive industries, in maintaining the safety and security of their operations within an operating framework that encourages respect for human rights.

Anti-Corruption and UKBA: 2010 UK Bribery Act, which covers the criminal lawBusiness Ethics relating to bribery and corruption in the United

Kingdom.

Anti-Corruption and FCPA: 1977 Foreign Corrupt Practices Act (“FCPA”), Business Ethics which is essentially the US version of the UK

Bribery Act. The combination of FCPA and the UK Bribery Act are key to company business ethics and compliance.

QHSSE/CSR development in 2013During 2013, Seven Energy completed the process of updating its QHSSE/CSRpolicies and procedures and commenced the process of developing andimplementing management systems that comply with the followinginternational standards and benchmarks in 2013:

Highlights

2013CSR highlights

Won the 2013 African Quality Service Award for Gas Processing and Transportationthrough Accugas, our wholly-owned midstream subsidiary

Launched, with Universal Energy, our 62.5% owned subsidiary, a joint venturepartners’ policy and procedures, including the Code of Conduct, CSR and Anti-Corruption initiatives

Completed the land acquisition process for the Uquo to Oron gas pipeline project inMay 2013, whilst complying with the relevant IFC Performance Standards

Achieved 98% completion of the Livelihood Restoration Plan and ResettlementAction Plan compensation and closeout on recommendations for the Uquo to Oronpipeline project

Improved our grievance handling and reporting processes for relevant stakeholders

Developed and deployed appropriate (to the operational nature and size of ourfacilities) crisis management, emergency response and oil spill contingency plans inline with the requirements of Seven Energy’s operational footprint

No reportable environmental spills

Stakeholder relations

Environment


ZeroTotal Recordable Incidence Rate (“TRIR”) 2013

Employee locationNigeria 84%UK 16%


Continued growth in participation by woman across the organisation resulting fromefforts to increase the balance between the female to male staff ratio, with womennow representing 27% of our employees and contractors within our wholly-ownedGroup companies

Facilitated pay equality measures across the business through the execution of adetailed salary audit and the design of a remunerations structure to attract andretain the best people

Improved access to staff training through the training request scheme

Equipped the CSR field team with GRI Principles and IFC training

Built a dedicated CSR unit and appointed a CSR Manager and a full-time QualityManager

Created a platform for the ISO 14001:2004 management systems and development

Developed new and standardised Group policies and procedures across the business

Enhanced our vendor screening processes

Completed a CSR performance audit with CSR-in-Action and implemented alltangible recommendations

Improved safety of the transport route through Akwa Ibom State by theintroduction of a journey management hub at Eket improving safe access to ouroperations

Provided international standard training events for staff on ‘Security Incident VictimCommunications’ and ‘Whitehall Security Guard’ standards

Commenced an internal peer review and development of Health, Safety andEnvironment Managements System documentation in line with OHSAS 18001

Achieved over 8.6 million cumulative man-hours without a Lost Time Incident(“LTI”) and Total Recordable Incidence Rate (“TRIR”) was nil in 2013

Experienced no fatalities across our operations in 2013

People

Compliance

Asset protection

Health and safety

Workforce demographicsMen 73%Women 27%

“On reflecting on ourachievements and highlights,I feel that we have madesignificant progress in ourquest to deliver value andbenefit to our staff and ourwider community andstakeholders through ourCSR activities and initiatives.These will form the buildingblocks of our business as wemove forward to the nextphase of growth anddevelopment in Nigeria.”

Dr Glenn Bestall Vice President QHSSE/CSR

Group overview

At a glanceSeven Energy is a Nigerian oil and gas company, operating along the full value chainfrom upstream exploration, appraisal, development and production assets; throughto midstream activities comprising ownership of processing and distributioninfrastructure, and marketing to end users.


Seven Energy has a diversified portfolio of onshore oil and gas interests witha substantial reserves and resources base in two focus areas of the Niger Deltaand a recently acquired undeveloped asset in the Anambra Basin.

The Group’s assets in north west Niger Delta and south east Niger Delta arelocated in close proximity to oil and gas infrastructure, giving access to majordemand centres for gas and export terminals for oil. The Anambra Basin is an underexplored basin but with substantial gas resource potential.


Seven Energy’s wholly-owned midstream business, Accugas, focuses on sales and marketing, processing and distribution of gasto the domestic Nigerian market. Through the development of gas infrastructure, Accugas serves to assist its upstream partnersto monetise their gas resource. Accugas owns the Uquo Gas Processing Facility, which processes gas from the Uquo and StubbCreek Fields, and a network of pipelines linking the processing facility to both the Ibom Power station and the Calabar NIPPpower station. The recent acquisition of EHGC adds the 128 km East Horizon pipeline running from Ukanafun to Mfamosing, just outside Calabar, to the Group’s infrastructure assets, as well as a gas sales agreement with UniCem.

The midstream business has three components:

– Processing: gas processing services are provided by the 200 MMcfpd Uquo Gas Processing Facility to Seven Energy’s upstream subsidiaries and joint venture partners. Similar processing services are planned to be offered to other market participants in due course.

– Distribution: gas is transported through an extensive gas pipeline infrastructure from processing facilities directly to offtakers.

– Sales and marketing: gas sales agreements are entered into with offtakers.

Our investors: Seven Energybenefits from a strong andsupportive investor base.

– Temasek– Petrofac– Capital International PrivateEquity Funds

– Standard Chartered– IFC– Africa Finance Corporation– IFC ALAC Fund– Amaya Capital– JPP Ocean– Actis– Investec


Sustainability managementThis section highlights the key sustainability issues we face and details our approachto managing them. In each case, we outline our efforts to comply with national lawsand customs, whilst also moving towards attaining internationally accepted bestpractices and standards of operation.


Sustainability management

Stakeholder relationsAt Seven Energy, we are committed to managing our businesswith integrity and we believe that maintaining a strong andethical culture in all aspects of our business is key to executingour strategy. We operate in an industry that is subject tochanges in government policy and regulations and SevenEnergy needs to actively manage these obligations.


Pro-active engagementWe continue to pro-actively engage andmaintain constructive relationships withall stakeholders, including the NigerianGovernment, regulators, local hostcommunities and other interest groups.Integral to the success of our business iscorporate citizenship and communitybuilding and as we strive to make ourcompany more responsive to ourcommunities, shareholders and otherstakeholders, our CSR projects remaincompliant with IFC performancestandards.

Seven Energy’s CSR initiativesdemonstrate a long-term commitmentto our local host communities andgeneral populace.

Good businessThe business management side ofcorporate social responsibility isconsidered a key focus for Seven Energy,as only the most effective relationshipsand interactions nurtured withcommunities and other importantstakeholders will ensure that SevenEnergy’s business are executedsuccessfully. As such, Seven Energy iscommitted to ensuring that it isrecognised as a responsible organisationwith the highest corporate socialresponsibility standards andperformance.

“We really appreciateSeven Energy. Personally,I score Seven Energy 95%during the constructionphase which was the firstphase of the project.”Comrade Eric MesikenorNational President Oruko Youth Development Association

“…with the presentdevelopments undertakenby Seven Energy, they havedone more that 80% ofwhat is expected fromthem…”Elder Honourable Chief Effiong Okon UyeMemorandum of Understanding DraftingCommittee Member - Village Head of Impacted


Pro-activeengagement


CSR resourceWe are confident, that with theappointment of a new CSR Manager, full resourcing of our field CSRrepresentatives team and establishmentof a new CSR policy and implementationof our CSR management system in linewith the expectations of the IFC and theGRI, that we have excellent stakeholderrelationships that will be furthermaintained into 2014 and beyond. This is further underpinned with theimproved report and grievancemanagement mechanisms and closerrelations with our Memorandum ofUnderstanding Implementing Councils.

On behalf of the Board, the Environment& Community Committee, chaired by Dr Joshua Udofia, a Non-executiveDirector, also meets on a quarterly basisto discuss progress against the Group’sQHSSE/CSR objectives and targets.

Support for teaching excellenceDuring the year, Seven Energy supportedthe Inoyo Toro Foundation’s PublicSecondary School Teachers AwardCeremony in Akwa Ibom State, duringthe call for entry phase, in acceptance of the relevance of education.

Land acquisition process2013 also saw our team focused on theland acquisition process relating to the37 km Right of Way for the Uquo toOron gas pipeline project that saw ourland acquisition policy being upgradedand successfully implemented. Theupgrade of this policy included ourdecision to acquire the land for thepipeline directly from local communitiesby working with non-Governmentalorganisations. This land acquisitionprocess was completed in May 2013.During the clearing of this project, sixlocal main roads were graded in Oruko,Oruko Udesi, Oruko Udung-Ukpo and anew link road from Oruko Udung-Ukpoto Ubodung was constructed. SevenEnergy’s project contractors employed atotal of 400 semi-skilled locals.

Sustainability awarenessTowards the end of 2013, Seven Energysupported the call for awareness forsustainable practice in the extractiveindustries as a whole by sponsoring the2nd Sustainability in the ExtractiveIndustries Conference as organised byCorporate Social ResponsibilityAwareness and Advancement Initiative,a Nigerian based social enterprise.

African Quality Service AwardIn view of our contribution to gasprocessing services in Nigeria, oursubsidiary, Accugas, was proud toreceive the 2013 African Quality ServiceAward for Gas Processing andTransportation from the Institute forGovernment Research & LeadershipTechnology during the AfricanGovernance and Corporate LeadershipAwards in Abuja. This prestigious awardis a welcome recognition for ourongoing efforts and achievements tosupport the development of the Nigeria’sgas market in a responsible way.


“As a trained scientist, I believe in systematicallymanaging processes and procedures to achieve near-perfect conclusions. I understand very well, however,the importance of the human factor – whetheremployees or communities - in business. As a devoutSeven Energy team member, I work hard to ensure thatpeople and processes are managed to satisfaction.”Dr Glenn Bestall Vice President QHSSE/CSR

400semi-skilled locals employedto clear Right of Way

6graded roads as a part ofthe Right of Way project

37kmRight of Way for Uquo to Oronpipeline successfully acquired

Left: Dr Glenn Bestall, Vice President QHSSE/CSRspeaking at the 2nd Sustainability in the ExtractiveIndustries Conference in Lagos.


Adopt standardised reporting usingthe GRI Principles reportingframework by end 2014

Institute newly developed policiesand processes to further driveexcellent stakeholder relations

Provide training and awareness to, and resourcing for, SevenEnergy’s stakeholders andQHSSE/CSR team to enablesuccessful implementation ofmanagement systems

Complete renovation andconstruction social investments atadopted orphanage home andNational High School Etebi (staffquarters) both at Esit Eket, classroomblocks at Ubodung communitysecondary school, culverts on linkroad between Uko Itak Eyulor andUko Itak Eyokpo Villages, Mbo) andcompletion of abandoned ruralelectrification project in operationalcommunities

Achieve 100% close out ofcompensation payments andresolution of outstanding grievancesof Livelihood Restoration Plan andthe Resettlement Action Plan; all inline with IFC performance standardsand processes

2014 AND BEYONDCASE STUDY

Challenge:Current events in the energy sector have presented challenges resulting fromcommunity unrest and occasional disturbances. At Seven Energy, werecognised that only the most robust relationships and interactions nurturedwith our communities and other important stakeholders would ensure thatour operations, activities and developments were executed with minimaldown time impact.

How we met the challenge: In order to sustain excellent stakeholder relationships in 2013 and beyond,we recruited a new CSR Manager, restructured our CSR Field Team andestablished a new CSR policy and management system, all in line with IFCand GRI Principles expectations.

Our commitment to the Local Content Act, local host communityrepresentatives and affected persons along the Right of Way of the Uquo toOron gas pipeline has ensured that we are in line with communityexpectations and international best practices.

Furthermore and more importantly, Seven Energy has an establishedEnvironment & Community Committee, reporting to the Board. Thiscommittee is headed by a Non-executive Director, to discuss agreedobjectives and targets on a quarterly basis.

“Seven Energy, as far as mycommunity is concerned,has performed creditablyby my assessment andlevel of exposure with oilcompanies.”Honourable Awai M. AwaiVillage Chairman, Member, Justice of Peace,Akwa Ibom State


Nigerian content


Localcontent

Nigerian content development is an important focusof our business. In line with the principles of theNigerian Oil and Gas Industry Content DevelopmentAct 2010 (the “Local Content Act”), we continuallystrive to ensure that Nigeria’s hydrocarbon assets areincreasingly used to benefit Nigerians.

Benefiting NigeriansThis goal is inherently sustainable as we help to build theNigerian economy, develop local communities and reduce theenvironmental and health impacts associated with other sourcesof power generation such as diesel.



Local Content ActWe have actively implementedrequirements of the Local Content Act. At Seven Energy, our policy is to givefirst consideration to supply of goodsand services to Nigerian contractors andmanufacturers, and we seek to partnerwith local suppliers who are compliantwith our values. We also monitorclosely the industry approved quota ofNigerian nationals relative to expatriatesinto our workforce. In 2013, some 93%of our in-country employees were ofNigerian nationality, well in excess ofthe 70% requirement as per the LocalContent Act.

Involving local companiesDuring the year, Seven Energy and ourjoint venture partners executed severalcapacity development initiatives. Theseinitiatives were aimed at deepening theparticipation of local companies in ourarea of operation with a positive impacton local host communities as well as onlocal and national economic and socialoutlook.

Under stringent and competitive criteriaas stipulated by the Local Content Act,a Nigerian contractor, Oilserv, wasawarded a 37 km pipeline constructioncontract out of five other Nigeriancompanies, with various subcontractsawarded to other Nigerians on theproject.


93%in-country employees are Nigerianvs. 70% requirement of the LocalContent Act

“Seven Energy is mindfulof the need to complywith the Local Contentlegislation, as itsoperations continue togrow and develop. TheGroup continues tomonitor closely currentand anticipated changesto industry practises,regulatory changes andother directions as aresult of this legislation.”


Fully integrate our supply chainprocesses with our Local Contentmanagement function to ensurethat the relevant sections of theLocal Content Act are integratedwith the day to day contracting andprocurement processes

All procurement and contracts mustreceive Local Content endorsementprior to approval by ExecutiveManagement

Consolidate our 2014 Local Contentstrategy to maximise theemployment and contractingopportunities of our project footprintin communities

Conduct strategic workshop toencourage local contractors toventure into more technical areassuch as cathodic protectioninstallation, procurement of oil toolsand equipment, environmentalprotection equipment, field survey,chemicals and industrial gases

Collaborate with the NigerianContent Development andMonitoring Board (“NCDMB”) andits recommended banks to stimulatethe activities of small and mediumscale enterprises within our area ofoperations

This scheme will identify and supporta selected number of small andmedium enterprises based in AkwaIbom State with affordable access tocredits to enable them to establish asmall/medium sized fabrication yardthat will support the fully operationalIbom Power station

2014 AND BEYOND

PeopleOur people are at the core of our business andensuring that Seven Energy is a workplace ofchoice for our employees is a priority for us. Itresults in a commitment from our team toserve all of our stakeholders responsibly.

DiversityDiversity is a vital element of our workforce and this year, we achievedincreased diversity and inclusivity across all levels of our organisation byattracting world class talent in terms of age, gender, functional expertiseand problem solving skills. Our culture of embracing diversity enablesour people to contribute their vast experience, perspectives and skills toimproving business results and delivering sustainable value to SevenEnergy and our stakeholders.

Our activities in the Niger Delta mean that a fair share of employment isgiven to the local communities near our operations and as a result, 25%of Seven Energy’s workforce is from the south east Niger Delta.



25%Seven Energy’s workforce is fromthe south east Niger Delta, ourarea of operations


Diverseworkforce



Future business leadersSeven Energy is fully committed togrowing leadership capabilities within itsworkforce and, as part of the successionplanning process, has successfullyadopted an Expatriate/Nigerianunderstudy approach in achieving this.As a result of actively seeking the bestfemale Nigerian talent in the localemployment market, we are proud toannounce that in 2013, therepresentation of women in our wholly-owned Group companies stands at27%.

Seven Energy’s Human Resources teamcarried out a review of incentiveframeworks and remuneration levels tobenchmark and align competitively withcomparable companies, demonstrated inthe case study of the re-organisation ofthe CSR field team. Following a CSRfocused audit, we put in place measuresto empower our CSR Representatives byproviding them with appropriatetechnology, clear reporting systems, paystandardisation and logisticalconvenience.

In the support of our staff withcoaching, mentoring and development,2013 saw us implementing a structuredtraining and development programme inline with corporate performanceobjectives. Amongst staff trained ondiverse job-specific skill sets, our CSRfield team were given introductorytraining on the IFC performancestandards and the GRI reportingmechanisms.

CommunicationsAn intranet system was launched inDecember 2013 after a series ofstructural IT integrations between theLagos and London offices, as a means oftransparently proliferating our corporatevalues.

Through the input of a working group,comprising Human Resources andCorporate Affairs teams, the intranetreflects all arms of the Group’s business.Designed to be installed in phases, PhaseOne is fully operational and comprises ofthe Group’s corporate information,covering compliance and a series ofcourses staff are required to undertaketo ensure they are fully up to date interms of compliance requirements andthe Group’s policy and procedures onthe matters. It is expected that PhaseTwo will become operational by 2014and will contain department specificdata. The intranet will offer a moreintegrated and relatively seamless way ofcommunicating internally at SevenEnergy.

27%of our workforce are female

Number of full time employees2013 1682012 1722011 158

Local employees 93%Local employees 93%Expatriate employees 7%

2011 2012 2013


Our teamIn 2013, Seven Energy employed onaverage 168 full time equivalent people,of which 141 were based in Nigeria(84%). 93% of the Group’s in-countryemployees are of Nigerian nationality,well in excess of the 70% requirementof the Local Content Act. During theyear, an additional local office wasopened in Uyo to support our existingoffices in Lagos, Port Harcourt andLondon.

Seven Energy also employs a number of contractors, particularly in connectionwith its various infrastructure projects.The number of contractors that SevenEnergy utilises is project dependent andvaries according to the number, type andactivity level of the projects undertaken.As of 31 December 2013, the number of contract staff Seven Energy utilisedwas approximately130.

The Group seeks to maintain workforcepolicies that are fair and compliant withapplicable local laws. It is our policy toemploy individuals on the basis of meritand ability. It continues to develop theskills of its local workforce and toemploy locally, as much as possible. Eachemployee, consultant and contractor isexpected to abide by its humanresources policies, including its policy onequal employment opportunities andworkforce diversity.

Health and safetySeven Energy is committed to providinga safe and healthy working environmentin which all personal injury is regarded aspreventable. It recognises the right of allemployees to exercise membership of anemployee organisation or trade unionand we seek to protect internationallyrecognised human rights.

Increase the number of employeeengagement activities and feedbackchannels, including employeeforums, surveys and one-one withsenior management

Conduct an employee satisfactionsurvey and organise networkingevents

Finalise the deployment of a HumanResources Information System

Systematise training anddevelopment approach to meetorganisational goals

Finalise and communicatedisciplinary and grievance policy

Open local offices in Abuja and inBenin City

2014 AND BEYONDCASE STUDY

Challenge:Seven Energy is a company withdeep respect and appreciationfor the individuals who ensure itssuccess, and we take decisivesteps to ensure a world classworking environment for its staff.

How we met thechallenge: We embarked on a business-wide pay grade and bandstandardisation to ensurecollective satisfaction onremuneration. We alsostandardised employmentcontracts for both head officeand field staff and have to date,received favourable feedbackfrom affected parties.


ComplianceSeven Energy recognises that doing business in Nigeria brings with it inherentrisks associated with fraud, bribery and corruption. The Group’s Code ofConduct and Business Ethics contains policies and procedures covering howwe conduct our business and maintain our relationships with businesspartners and ensure compliance with applicable anti-corruption legislation.

Importance of complianceOur compliance team closely monitorsboth the integrity and effectiveness of allinternal systems and controls put inplace. This has effectively provided aframework that shapes our businessconduct, helping to strengthen andsustain our corporate integrity andsuccess. 2013 was a year in which wetook significant steps towards achievingcompliance conformance with local andinternational regulatory requirements.

We operate in an industry subject tochange in government policies andregulations. To manage theseobligations, 2013 was a year in whichwe continued to achieve compliancewith applicable local and international

regulatory requirements. This was madepossible by pro-actively engaging andmaintaining constructive relationshipswith all stakeholders, including theNigerian Government, local hostcommunities, regulators and otherinterest groups, as well as reviewinginternal mechanisms.

HSE Policy and ProceduresDuring 2013, corporate-widegovernance, including Group policiesand objectives were redefined, mergedand introduced to all spheres of SevenEnergy’s operations. In line with plans forfuture certification to ISO 9001:2008,the development of a QualityManagement System was commenced.

A new and more appropriate HSE Policyand Procedures document wasdeveloped according to internationalstandards (ISO 14001, OHSAS 18001),and was deployed throughout SevenEnergy’s operations and projects during2013. We also rolled out our Anti-Corruption, Asset Protection, CSR, HSEand Quality Management policies.


Roll out business-wide QualityManagement System

Conduct workshops on riskmanagement for risk owners and staff

Train vendors in partnership with theNigerian Content Development andMonitoring Board

Challenge:There was a need to play a more active role in mitigating the QHSSE/CSR risksand impacts associated with our operations and projects. This brought aboutthe need to address organisational changes in the structure and themanagement focus of the QHSSE/CSR Group in 2013, especially with regardto implementing appropriate policies and management systems that wouldkeep Seven Energy on a growth path.

How we met the challenge: To find a suitable solution to our challenge, the Group underwent a change inthe structure and management focus of the QHSSE/CSR Group during theyear. A key facet of this re-organisation was the creation of a dedicatedEnvironmental Coordinator, a Quality Manager, a CSR Manager, an overallProjects HSE Manager and combined HSE Systems and Regulatory AffairsManager. A number of these positions were filled by current staff within theexisting Seven Energy Lagos structure.

In addition, new and more appropriate QHSSE/CSR policies and managementsystems were developed according to various international standards anddeployed throughout the Seven Energy’s operations and projects.

2014 AND BEYOND

ISO14001commenced development ofmanagement system for deploymentthroughout Seven Energy’s operations

CASE STUDY

OHSAS18001commenced development ofmanagement system for deploymentthroughout Seven Energy’s operations

23Seven Energy Corporate Social Responsibility Report 2013

Corporateintegrity


Asset protectionThe security of personnel, assets and property is one of SevenEnergy’s top priorities. The success of its business in Nigeria is largelydependent on maintaining a safe and secure working environmentfor all of its employees, contractors, subcontractors, partners andlocal stakeholders, including community groups.

Site securityGreater security integration between thegas receiving facility located near theIbom Power station and power stationitself was successfully achieved with theconnection of fence lines in order tobetter secure the area, which resulted ina reduction of the number of armedGovernment security forces on-site.

Safety practicesImproved safety practices addressinghuman capital needs saw that werecorded 8.6 million man-hours withouta LTI, which is a 28% improvement on2012, and therefore zero TRIR, for theyear ended 31 December 2013. Thismeans we have had a third consecutiveyear without serious security incident.

When performing joint operations, weengage specialist security consultants toexamine and manage transport routesand any other identified hazards tomitigate potential risks and securityissues. In addition, we employ aneffective alert system that describes thesecurity status at all of our upstream andmidstream locations.

All personnel, across our upstream andmidstream gas operations, are keptinformed of the security status of eachlocation on an ongoing basis. There isalso a security team that covers bothupstream and midstream assets,including the Uquo Gas ProcessingFacility. Third party security contractorscover all our pipelines and pipelineroutes with the assistance of the policeand contingents from the ‘Joint TaskForce’.

We also comply with the InternationalVoluntary Principles of Security andHuman Rights and seek to ensure thatall of our partners, contractors andsubcontractors also comply with theseprinciples.


Challenge:Considering the geographicallocation of Seven Energy’s activitiesin the Niger Delta, one of the mostsignificant challenges we face isensuring the secure operation ofour upstream and midstreamactivities.

How we met thechallenge: From the opportunity identificationphase of our business modelthrough project development andproduction, our systems seek toidentify and mitigate security risks.Seven Energy has performed andmaintained ongoing research withsecurity consultancies and relevantGovernment Agencies that allowsus to monitor volatility in the NigerDelta region and the south east ofNigeria in general. Based on thisongoing security assessment, weseek to identify opportunities inregions that are lower risk for ourportfolio and asset growth.

Seven Energy’s securityprocedures are continuallyupdated to ensure that it is pro-active and ready to deal with the everchanging environment in which it operates.

CASE STUDY

Devise and implement anappropriate security and monitoringplan for our pipeline Right of Wayprojects

Introduce the asset protection andmonitoring standards andaccompanying procedures to ourjoint venture partners in 2014

2014 AND BEYOND


Securityintegration


Health and safetySeven Energy seeks to protect the health and safety of everyone that are involved inits activities, the people who come into contact with its operations and the healthand sustainability of the environments in which it operates.

Importance of safetySafety is of utmost importance to us anda large part of the security aspect isrelated to the transportation of our staffand teams around the country. Ourvehicle drivers contribute significantlytowards our excellent record and havemaintained an excellent level of safetyfor our staff and visitors. This wasachieved by enhancing the skills of ourdrivers through a stringent five dayDefensive Driving Course with the ArmorGroup. In December 2013, the drivers’safety award ceremonies were held inLagos and Port Harcourt to honour theexcellent driving standards displayed bythe AVIS attached drivers.

Resourcing the QHSSE/CSR teamWe believe that the cornerstone ofsustainability within any organisation isthe QHSSE/CSR management functionand Seven Energy views this area of thebusiness with high importance. As such,2013 was a very important year duringwhich a number of changes to theQHSSE/CSR function were made. Thesechanges included the appointment of aVP QHSSE/CSR and a number of newsenior management roles within theQHSSE/CSR team. Changes to themanagement structure were also madevia internal promotions to other keysenior roles within the Group.


The Seven Energy Drivers Safety AwardsCeremony was held in Lagos and Port Harcourtand acknowledges the dedication, long hoursand hard work of the Group’s drivers.

Holistically review the KeyPerformance Indicators forQHSSE/CSR performance

Conduct gap analysis of HSE-Management System with a view toaligning current HSE-ManagementSystem to OHSAS 18001 by end of2014

2014 AND BEYOND

8.6m hoursreached without a Lost Time Incident(“LTI”) in 2013


“Seven Energy has a goal of delivering gas to theNigerian market which we in the CSR team wantto achieve, withoutcommunity issueshindering the goal,through active dialogueand pro-active communityengagement.”Lawrence IghokpoCSR Officer, Seven Energy

Lagos driving statisticsPopulation of Lagos: Est. 21 million peoplePercentage of Nigerian drivers Est. 2%who have received formal driver training

Number of reported road traffic accidents 14,000in Victoria Island alone in 2013

Number of Seven Energy drivers at 23the Lagos office

Number of driving hours during 2013 110,000 hoursDistance driven by Company vehicles 510,000 kmin Lagos during 2013

Number of road traffic accidents involving 3Seven Energy vehicles in Lagos during 2013

Number of Lost Time Incidents, (“LTIs”) 0attributed to the 3 accidents

Safetystandards


EnvironmentSeven Energy recognises the significant environmental considerations attached toits operations, and in particular its drilling operations. Minimising the impact on theenvironment by its business and operations is therefore of primary importance tothe Group.

Environmental ManagementThe development of a draftEnvironmental Management Systembased on the ISO 14001:2004 series andOHSAS 18001 was commenced.Consequently, in order to adapt to ourfast growing organisation, anEnvironmental Coordinator wasappointed during the re-organisation ofthe QHSSE/CSR department into HSEsystem and project teams.

We developed, implemented anddeployed specific plans to mitigate risksas identified in the Environmental ImpactAssessments undertaken on our assets.These plans were related to Project andFacility Waste Management,

Environmental Management andEnvironmental Monitoring, and weredesigned to comply with the IFCPerformance Standards, National andState legislation, and other industry bestpractices.

In addition, the development anddeployment of appropriate crisismanagement, emergency response andoil spill contingency plans are all in linewith the requirements of Seven Energy’soperational footprint, ongoing projectsand future acquisitions.

During 2013, Seven Energy did notexperience any reportable materialenvironmental spills.


Aim for 2014 reporting onGreenhouse Gas Emissions

2014 AND BEYOND

Zeroreportable environmental spills in 2013

SEVEN ENERGY’S QHSSE/CSR TEAM

CSR FIELD STRUCTURE

(ALL CSR REPRESENTATIVES ARE CONTRACT POSITIONS)

CONTRACT HSEADVISOR

HSE ADVISOR ENVIRONMENTALCOORDINATOR

VP QHSSE/CSR

QA/QC MANAGER

CSR MANAGER

PROJECT HSE MANAGER

HSE SYSTEMS &REGULATORY AFFAIRS

MANAGER

ASSET PROTECTION & TRANSPORT

(SENIOR) MANAGER

OPERATIONS PROJECTS DRILLING SEISMIC FACILITIES

ASSET PROTECTION & TRANSPORT STRUCTURE

PROJECT HSEMANAGEMENT &

OVERSIGHT STRUCTURE


The Group’s operations are at all times directed by itsQuality, Health, Safety,Security, Environment and Corporate SocialResponsibility (“QHSSE/CSR”)policies and procedures,which meet regulatoryrequirements and reflect best industry practice.

Minimisingimpact



Conformance

GRI conformance table


1.1 Statement from the most senior Message from our CEO 02decision-marker of the organisation

2.1 Name of the organisation Welcome 01

2.3 Operational structure of the organisation Financial Statements 36including main divisions, operating companies, subsidiaries, and joint ventures

2.4 Location of organisation’s headquarters Welcome 01

2.5 Number of countries where the organisation Welcome 01operates, and names of countries with either major operations or that are specifically relevant to the sustainability issues covered in

2.6 Nature of ownership and legal form Annual Review 46

2.7 Markets served (including geographic breakdown, Welcome 01sectors served and types of customers/beneficiaries).

2.8 Scale of the reporting organisation Annual Review 28

2.9 Significant changes during the reporting Annual Review 28period regarding size, structure, or ownership

2.10 Awards received during the reporting period CSR highlights, Stakeholder Relations 04

3.1 Reporting period for information provided About this report 01

3.2 Date of most recent previous report (if any) About this report 01

3.3 Reporting cycle (annual) About this report 01

3.4 Contact point for questions About this report 01

3.5 Process for defining report content Introduction 01

Profile disclosures

GRI indicator GRI Report Pagedisclosure indicator reference number



3.6 Boundary of the report About this report 01

3.7 State any specific limitations on the scope None -or boundary of the report (completeness)

3.8 Basis for reporting on joint ventures At a glance 06

3.11 Significant changes from previous reporting About this report 01periods in scope, boundary, or measurement methods applied in the report

3.12 Table identifying the location of the GRI Conformance Table 34Standard Disclosures in the report

4.1 Governance structure of the organisation, Annual Review 38including committees under the highest governance body responsible for specific tasks, such as setting strategy or organisational oversight

4.2 Indicate whether the Chair of the highest Annual Review 38governance body is also an executive officer

4.3 For organisations that have a unitary board Annual Review 38structure, state the number and gender of members of the highest governance body that are independent and/or non-executive members

4.4 Mechanisms for shareholders and employees Annual Review 38to provide recommendations or direction to the highest governance body

4.14 Basis for identification and selection of CSR Policy and Management System 03stakeholders with whom to engage

4.15 Approaches to stakeholder engagement CSR Policy and Management System 03including frequency of engagement by type and by stakeholder group

Profile disclosures

Conformance


EC1 Direct economic value generated and Partially reported -distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments.

EC6 Policy, practices, and proportion of spending Nigerian content 14on locally-based suppliers at significant locations of operation.

EC8 Development and impact of infrastructure Stakeholder relations 10investments and services provided primarily for public benefit through commercial, in-kind, or pro bono engagement.

EN13 Habitats protected or restored Environment 28

EN26 Initiatives to mitigate environmental impacts Environment 28of products and services, and extent of impact mitigation.

LA1 Total workforce by employment type, Employees 18employment contract, and region, broken down by gender.

LA7 Rates of injury, occupational diseases, lost days, Security 24and absenteeism, and number of work-related fatalities by region and by gender.

LA8 Education, training, counselling, prevention, Stakeholder Relations 13and risk-control programs in place to assist workforce members, their families, or community members regarding serious diseases.

Market presence

Indirect economic impacts

Environmental - Biodiversity

Products and services

Employment

Economic performance


GRI conformance table


HR10 Percentage and total number of operations Compliance 22that have been subject to human rights reviews and/or impact assessments.

OG9 Operations where indigenous communities Stakeholder relations 10are present or affected by activities and where specific engagement strategies are in place.

HR11 Number of grievances related to human rights CSR Policy and Management System 03filed, addressed and resolved through formalgrievance mechanisms.

SO1 Percentage of operations with implemented CSR Policy and Management System 03local community engagement, impact assessments, and development programs.

SO4 Actions taken in response to incidents of Compliance 22corruption.

SO6 Total value of financial and in-kind contributions Nigerian content 14to political parties, politicians, and related institutions by country.

OG13 Number of process safety events, by 2013 CSR Highlights (Health and Safety) 05business activity.

Remediation

Asset Integrity and Process Safety

Assessment


Glossary of terms


API American Petroleum Institute

CSR Corporate Social Responsibility

EGASPIN Environmental Guidelines and Standards for the Petroleum Industry in Nigeria

FCPA Foreign Corrupt Practices Act

GRI Global Reporting Initiative

GRI Principles Global Reporting Initiative Principles

HSE Health, safety and environment

IFC International Finance Corporation

IFC ALAC Fund IFC African, Latin American and Caribbean Fund

ISO International Organisation for Standardisation

LTI Lost Time Incident

Local Content Act Nigerian Oil and Gas Industry Content Development Act 2010

m million

NPDC Nigeria Petroleum Development Company

NCDMB Nigerian Content Development and Monitoring Board

OHSAS Occupational Health & Safety Management Systems

QHSSE/CSR Quality, Health, Safety, Security, Environment and CSR

TRIR Total Recordable Incidence Rate

UKBA UK Bribery Act

NigeriaSepta Energy Nigeria Limited7 Anifowoshe StreetVictoria IslandLagosNigeria

Tel: +234 1 277 0600

United KingdomSeven Energy International Limited4th Floor6 Chesterfield GardensLondon W1J 5BQUnited Kingdom

Tel: +44 207 518 3850

Email: [email protected]

Designed and produced by: Westbrand Design Nigeria [email protected]

Sustainability report by: CSR in Action

Documents

Operating responsibly - Seven Energy/media/Files/S/Seven-Energy/reports-and... · Environmental EGASPIN: 2002 Environmental Guidelines and Standards for the Petroleum Industry in