GASCO Corporate Citizenship and Sustainability Report - Global

GASCO Corporate Citizenship and Sustainability Report

2009

“

On land and in the sea, our fore-fathers lived and survived in this environment. They were able to do so because they recognised the need to conserve it, to take from it only what they needed to live, and to preserve it for succeeding generations.

”

The late H.H. Sheikh Zayed bin Sultan Al Nahyan

The late Sheikh Zayed

H.H. Sheikh Khalifa bin Zayed Al Nahyan

H.H. Sheikh Mohammed bin Zayed Al Nahyan

Embedding Citizenship in the White Gold

Contents


CEO’s Message

4-5

The Responsible Corporate Citizenship Agenda 6-13 GASCO at a Glance 14-19 GASCO’s way of working 20-29

Strategic Goals and Road Ahead 30-35

Excelling in our Operations 36-43

Growth and Projects 44-51

Energy and Environment 52-63

Stakeholders, Employees and Efficient Systems 64-75

Towards Excellence 76-83

Key Events in 2009 84-87

Performance Snapshot 88-93

About this Report 94-97


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CEO’s Message

It gives me immense pleasure to present the GASCO Corporate Citizenship & Sustainability Report for the year 2009 – Embedding Citizenship in the White Gold. Excellence in everything we do is what everyone within GASCO continuously strives to achieve and our commitment to sustainability mirrors our vision: developing innovative systems, technology and processes to ensure our growth is founded on the principles of sustainability. We take great pride in our responsibility as trustees for future generations. Our responsible citizenship agenda focuses on four areas – engaging our stakeholders and employees; striving towards excellence; sustainable energy use; and protection of the environment. From the outset, several challenges stand between ourselves and the completion of our objectives to address the needs and aspirations of our shareholders. This report presents an overview of the approach we have adopted and the results we have achieved, towards nurturing sustainability in every aspect of the value chain. Throughout our journey towards meeting and living the objectives of responsible citizenship, we hope our actions lead us to being recognised globally as an organisation that is proactively teaming up with its partners on the path towards sustainable development. This would not have been possible without the dedication, teamwork and commitment of our employees, shareholders and other business partners. Finally, I would like to thank all our GASCO employees and their families for their perseverance, dedication and invaluable contributions throughout the year. In the years to come, I look forward to driving this agenda and contributing further towards the completion of our sustainability goals. Best wishes, Our Shareholders

‫محمد عبداهلل بن ساحـوه السويـدي‬ Mohammed A. Sahoo Al Suwaidi


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The Responsible Corporate Citizenship Agenda


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The Responsible Corporate Citizenship Agenda – managing accelerated growth in a sustainable manner The incorporation and establishment of GASCO in 1978 as a joint venture between the Abu Dhabi National Oil Company (ADNOC), Shell, Total, and Partex, and the integration of ATHEER (a wholly owned ADNOC company) in 2001, has supported GASCO in realising its vision to be one of the most innovative, respected and caring companies in the gas and hydrocarbon industry. The core nature of our business is to continuously generate value through world-class management of our plants and distribution network, within the hydrocarbon value chain. These in turn promote growth and prosperity by providing the basic requirements that a modern society needs for development. Throughout many years of operation, we have focused on and taken proactive steps to address the challenges faced by our business within the context of responsible citizenship.

The key driver behind implementing a sustainable, green and people orientated strategy is our commitment to meeting the expectations of our various stakeholders – employees and community, shareholders, regulatory bodies, and non governmental bodies. The priorities identified in the citizenship agenda, where we at GASCO are endeavouring to channel the optimum levels of time and effort, are focused on four areas: 1) Stakeholders

2) Energy and Environment 3) Employees

4) Excellence.

GASCO aspires to be a socially responsible corporation and is wholly committed to sustainable development across all areas of our business. Responsible citizenship is embedded within GASCO, starting with the vision statement in which we are committed to excellence in whatever we do, caring for our people, our community and our environment, acting as conscientious custodians for future generations.

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Being a responsible citizen in today’s world brings increased challenges within the realms of climate change, green issues, sustainability, and corporate social responsibility – and these are set to climb ever higher on the agendas of modern businesses. Many debates have taken places on the benefits of incorporating these environmental aspects strategically across governments, businesses and consumers, with significant amounts of historical and scientific data proving that these issues cannot be ignored. GASCO, alongside its parent entity ADNOC, has been a front runner in the Middle East in proactively addressing these challenges.

9 Energy Energy && Environment Environment

With growing legislation, dwindling natural resources and an increasingly aware and vocal group of stakeholders, the leadership of GASCO has placed responsible citizenship and sustainable development at the top of our agenda in the future. Excellence

GASCO Citizenship Priority Areas

Stakeholder

GASCO children planting trees in the Western Region Embedding Citizenship in the White Gold

Employees


The Business Case In addition to meeting our responsible citizenship goals, the initiatives in these areas also support our business obligations and ensure the robustness and reliability of our business. Operational and energy efficiency leads to cost savings and revenue opportunities for carbon trading, through our environmental initiatives such as flare gas reduction and green marketing (natural gas projects). These are a few examples of the initiatives we at GASCO have pioneered in the UAE in recent years, which enhances our reputation for demonstrating excellence in our commitment to responsible citizenship.

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Responsible Citizenship Priorities

Activities across our priority areas are broadly summarised below.

Stakeholders

GASCO has recently adopted an Enterprise Risk Management (ERM) framework in partnership with engaged stakeholders to address its business risks.

Energy & Environment

GASCO pioneered several projects to improve energy efficiency and pursue its environmental stewardship objectives – one of its kind in the entire Middle East region. These projects include flare gas reduction and infrared detection system.

Employees

At GASCO, the welfare and care of our employees is a high priority and we are rapidly expanding our headcount. Various initiatives are underway to enhance the safety and health of our employees.

Excellence

Our belief – excellence in everything we do. This is evidenced by our achievement of being one of the first of the ADNOC OPCOs to be certified to the internationally recognised quality standard: ISO 9001:2008, whereby all individual business units undergo stringent auditing to ensure that business processes are streamlined and efficient.

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GASCO receiving the Sheikh Khalifa Excellence Award from H.H. Sheikh Mohammed bin Zayed Al Nahyan Embedding Citizenship in the White Gold


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H.H. Sheikh Hamdan bin Zayed Al Nahyan receiving GASCO’s Leadership Team in the Western Region

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The approach can be summarised as: Suggestions, Feedback • Employees • Communities • Other stakeholders – internal, regulatory Study, Surveys • Internal surveys • External studies Consultants NGOs, Government, UN


Various committees evaluate and propose recommendations for implementation • Environmental Strategy Steering committee – Environment/Energy • Audit – Business Risk • Compensation – People

GASCO receiving an award from H.H. Sheikh Abdullah bin Zayed Al Nahyan for its support of the Emirates Foundation Board Meetings/ Steering Committee approval on recommendation

Our approach to responsible citizenship The various initiatives contained under the mantle of citizenship are addressed in a structured manner, with ideas coming from different sources such as suggestion schemes, studies, community engagement, best practices and other means. The consolidated ideas are evaluated on a case-by-case basis and recommendations are prioritised and discussed for implementation. For example: more than 130 opportunities were identified in a study conducted in 2008 by the Environmental Strategy Steering Committee (ESSC) to improve energy efficiency in our plants. Out of those, for the year 2009, about 60 initiatives were identified and approved as priorities. The key projects amongst those selected were the Flare Gas Recovery and the Sulphur Recovery Improvement.

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GASCO at a Glance


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GASCO at a Glance

GASCO at a Glance Vision – GASCO aspires to be the most innovative and respected supplier of gas and hydrocarbons in the UAE.

Processing Capacity One of the largest gas processing companies in the world • 5,300 million standard cubic feet of feed gas per day (MMSCFD) • 165,000 barrels of condensate produced on average per day in 2009 • 4,000 tonnes of sulphur and 18,000 tonnes of NGL (Natural Gas Liquids) produced on average per day

Operational Profile Gas processing and NGL extraction plants at • Asab • Bu Hasa • Habshan & Bab • Ruwais Industrial customers serviced through a network of pipelines (48 pipelines totaling over 2,300 kms in length)

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On Tuesday, 31st March 2009, GASCO’s Shareholders signed the GASCO’s Joint Venture Agreement renewal, providing a clear signal that the initial 30 year Joint Venture signed in 1978 had accomplished its objectives. The new Agreement is set to run until 30th September 2028. This renewal allows GASCO to hold the distinction of being one of the major players in the global gas and hydrocarbons market, conducting onshore gas processing and the transportation of gas and liquid products. The company delivers its products and contributes to the GDP of the UAE in a sustainable and responsible manner.

The key events in the evolution of GASCO can be summarised as follows.

Abu Dhabi Gas Industries (GASCO) incorporated as Joint Venture among ADNOC, Shell, Total & Partex.

As part of the 10th Anniversary, Five Years Maintenance Planning Programme was introduced throughout GASCO.

500th shipment from Ruwais went in October.

GASCO formally took over responsibility for operating its plants at end of February. 100th shipment from Ruwais went in August.

Total of 2.55 million manhours of work without LTI was achieved in July. 700th shipment went in October.

ATHEER a fully owned ADNOC company integrated with GASCO in April. 2500th ship loaded at Ruwais Jetties. Largest ever export of pentane: a single cargo of 76,193 tonnes took place in April.

Three million man hours without LTI throughout GASCO including the contractors’ employees was achieved for the first time.

Amended & restated Joint Venture Agreement with Industrial Shareholders (ISH), was signed on 31st March 2009, effective from 1st October 2008.

100 million tonnes of LPG produced since the beginning of operations.

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GASCO at a Glance Product Range • Methane (C1) • Ethane (C2) • Propane (C3) • Butane (C4) • Paraffinic Naphtha (C5 plus) • Granulated Sulphur • Condensate

Employees • Pride of GASCO – 4,001 member strong employee base • People’s Survey conducted annually reveals that 96% of our employees are proud to work at GASCO • Emiratisation is a priority – 32% employees are Emiratis • Structured growth and development – based on a Competency Assurance Management System


1981 1978

1985 1982

Bu Hasa plant commissioned in January 1981. Bab plant came on stream. First cargo of Ruwais plant was loaded in June 1981.

1987 1986

1990 1988

One million man hours without LTI throughout GASCO was achieved for the second time in May. 600th shipment went in September.

Bu Hasa high yield project commissioned in March. First 400 ships and the first ten million tonnes of product were achieved in October. One million man hours without LTI throughout GASCO was achieved for the first time.

1993 1991

2000 1994

Smokeless flaring was introduced at Ruwais plant. Record of two million man hours without LTI worked by GASCO and contractors’ staff was set. Over 1,300 ships loaded at Ruwais since the start of operations.

One million man hours without LTI throughout GASCO was reached for the third time in October.

2002 2001

2008 2006

2009

GASCO 21 initiative was launched in October 2002.

Six million man hours without LTI throughout GASCO including the contractors’ employees was achieved in April.

Major expansion projects were initiated.

GASCO at a Glance

The Health Safety and Environment (HSE) Division includes Occupational Health and Safety and Environment. The HSE Division provides visible leadership and commitment to promote a proactive HSE culture. It supports the identification of HSE hazards, evaluation of HSE risks and the development of controls to manage these risks. GASCO HSE policy, objectives, standards, procedures and guidance are developed and maintained by the HSE division, in line with ADNOC Codes of Practice (COP). The Internal Audit function has an independent role reporting administratively to the CEO, but is accountable to the Audit Committee for the effective discharge of its responsibilities. It executes the internal audit plan and provides assurance to the Audit Committee on the effectiveness of GASCO’s internal control and risk management systems. It will in due course manage GASCO’s compliance with its Code of Conduct. The organisational structure of GASCO is as below.

Chief Executive Officer

VP Health Safety and Environment

Gathering of GASCO’s shareholders from ADNOC, Shell, Total and Partex in the presence of H.E. Yousef Omeir bin Yousef and H.E. Abdulla Nasser Al Suwaidi

VP Corporate Excellence

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19 Manager Internal Audit

The Chief Executive Officer (CEO) provides leadership and is responsible for the overall operations and financial performance of GASCO. The CEO is tasked with preparing GASCO’s strategy, plans, objectives and driving GASCO’s growth agenda. The direct reports to the CEO include Senior Vice Presidents (SVPs) from core groups and the leaders from Corporate Excellence, Health, Safety and Environment (HSE) and Internal Audit. The core groups at execution level are: Operations; Technical; Major Projects; Corporate Support; and Administration. The Operations Group is responsible for the operations at Habshan, Ruwais, Asab, and Bu Hasa Plants along with the Pipelines, Production and Shipping Divisions. The Technical Group oversees technical aspects including support for operational improvements by increasing efficiency at process level, developing new projects to increase reliability and assure process integrity. The Major Projects Group manages all major projects (over US $100 million to US $5 billion), which includes front end design, natural gas projects, and accompanying project services. The Corporate Support Group provides the services for Finance, Corporate Planning & Strategy Formulation, Performance Management, Corporate Business Reporting and Legal & Insurance. The Administration Group has a key role in supporting GASCO’s strategies in the areas of Human Capital management, Commercial activities, Information Technology implementation, provision of General Services and maintaining Public Relations. The Corporate Excellence Division shoulders the responsibility of improving the overall performance of the organisation and their objectives are focused on the initiatives on Change Management, Quality Management and Internal Communications. One of the responsibilities of the CE team is to map a high level overview of GASCO business processes with a view to developing a management system. Developing a change management strategy and the design and implementation of a GASCO mentorship programme are also core objectives. The Corporate Excellence Division is also responsible for enhancing employee and stakeholder satisfaction.


SVP Operations

SVP Technical

SVP Major Projects

SVP Corporate Support

SVP Administration

VP Habshan and Bab Plant

VP Engineering and Technical Support

VP Natural Gas Projects

VP Finance

VP Human Capability

VP Ruwais Plant

VP Technical Projects

VP Project Control

VP Corporate Planning & Strategy

VP Commercial

VP Asab Plant

VP Integrity Assurance

VP Project Front End

VP Information Technology

Major Projects Managers

VP General Services

VP Bu Hasa Plant

VP Pipelines

Manager Production/ Shipping Planning

Manager Public Relations

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GASCO’s way of working


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GASCO’s way of working Business Principles, Stakeholder Engagement and Corporate Governance

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Business Principles

Stakeholder Engagement

In accordance with GASCO’s vision, GASCO’s activities will be carried out safely, responsibly, efficiently and economically and will follow GASCO’s Business Principles.

GASCO continues to improve its processes and systems through the prioritisation of the needs and aspirations of our stakeholders across our business interfaces.

GASCO’s General Business Principles address:

Shareholders

1. Our core values – honesty, integrity and respect for people with particular focus on HSE.

We remain focused in delivering our products and excel in understanding the needs of our shareholders. Our business strategies and plans are aligned to deliver value to our shareholders in terms of quality, reliability, safety and environmental impact. During 2009 we strived to address the needs of stakeholders while protecting the environment, by making significant progress in our Natural Gas Project to build the infrastructure NG usage in vehicles. We are also continuing to invest significantly in capacity expansion and IT improvements in order to assure highest level of customer satisfaction both for our employees, as well as shareholders.

2. Our commitment to sustainable development where GASCO balances the short and long term interests, integrating economic, environmental and social interest into the business decision-making process, within the framework defined by our shareholders. 3. Our responsibilities to our stakeholders – shareholders, customers, employees, business partners, and society. 4. Our Principles which include GASCO’s commitment to Health, Safety and Environment (HSE), generating value, business integrity, local communities, compliance aspects, and communication and engagement with stakeholders.


Customers We strive to provide our customers with products and services which offer value in terms of quality, reliability, safety with minimal environmental impact. We commit also to respond to their needs, offering them high levels of performance.


Employees

Corporate Governance

We are committed to ensuring our business is globally competitive and our future leaders are able to overcome challenges and grow, by blending proven skills and capabilities with the development of new recruits from the Emirates.

The Board of Directors sits at the helm of the Governance structure. The Audit Committee and the other special committees, in tandem with the Executive Management support the Board in meeting its responsibilities. The Policies and Procedures, Delegation of Authority, Code of Conduct and Risk Management controls provide the foundation for the operations of the line and business unit management.

We treat our employees fairly and honestly, providing them with safe and healthy work conditions.

Business Partners

We seek to build long-lasting relationships based on trust and mutual benefits, giving preference to competitive and quality services. We encourage and support the efforts of all local contractors and suppliers, and will promote our General Business Principles in such relationships. Society

The Audit Committee is independent of GASCO Management due to its shareholder membership and participation by Executive Management and other concerned parties where appropriate. The purpose of the Audit Committee is to assist the Board of Directors in overseeing the effectiveness of GASCO’s internal control and risk management systems; this includes compliance with legal and regulatory requirements and Code of Conduct. The GASCO Governance Framework is represented in the schematic layout below.

We believe in conducting our business as a responsible corporate citizen, and complying with the applicable laws and regulations; we contribute and give back to society in a meaningful way. Over the years, GASCO has developed a mature approach through our commitment by supporting areas which include education, health, and safety. Initiatives supporting these activities are managed by specific operational units reflecting the needs of the community in which they operate. We recognise that the UAE Government is an important stakeholder of our organisation with whom we engage through the Supreme Petroleum Council. GASCO is a member of various inter-governmental bodies. 24

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Code of Conduct


Policies & Procedures (Internal Controls)

Delegation of Authority

Risk Management


The special committees identified previously are summarised below. Board Advisory Committee (BAC): a consultative body to the Board comprising senior representatives of the shareholders. Its purpose is to enable adequate preparation of Board of Directors meetings, to review matters of common concern to the shareholders and to make recommendations to the Board of Directors in order to facilitate the passing of appropriate resolutions by the Board. It is the institutional channel of communication between the shareholders and the company management. Technical Sub-Committee (TSC): a consultative body reporting to the Board Advisory Committee. Its duties are to make recommendations on HSE Technical studies and projects, plant performance, technical issues and studies, asset integrity, development studies and plans, capital projects, project and operation policies and procedures. It is also in charge of developing the annual service plan defining the technical assistance required from the Industrial Shareholders.

Committee

Members

Agenda

Board Advisory Committee (BAC)

• Chaired by ADNOC • Secretary – SVP (A) • ISH Senior representatives • CEO, SVPs – GASCO

• Review all issues covered in Board meetings • Prepare recommendation on issues and apprise Board

Technical Sub-Committee (TSC)

•Chaired by CEO •Secretary – SVP (TS) •Technical co-ordinator •Nominated members

• Recommends BAC on technical matters related to HSE, Energy Efficiency, plant performance, asset integrity, projects and other

Supply Sub-Committee (SSC): an advisory and consultative body reporting to the Board Advisory Committee. Its duties are to review and make recommendations on issues related to HSE (shipping), production planning and offtake, product specifications and quality of shipped products.

Finance Sub-Committee (FINCO)

• Chairman from ISH • ISH observers, nominees • SPC observer • CEO, SVPs – GASCO

• Recommends BAC on financial issues – accounting, IT, budgets, business plan, external auditors

Performance Management Sub-Committee (PMSC): reports to the Board Advisory Committee. Its role is to establish proper institutional channels of communication between the shareholders and GASCO on performance management issues. Its duties include making recommendations on selection of key performance indicators and targets, endorsement of annual performance contracts, periodic analysis of performance results, yearly performance results analysis and endorsement of scoring.

Supply Sub-Committee (SSC)

• Chaired by SVP(O) • Secretary – PP&S, Manager • ISH observers, nominees • CEO, SVPs – GASCO

• Recommends BAC on matters related to shipping, product specifications / quality, production planning and offtake.

Performance Management Sub-Committee(PMSC)

• Chaired by CEO • Secretary – CBR Head • ISH observers, nominees • Nominated members

• Recommends BAC on matters related to performance contract, performance review, and scoring

Finance Sub-Committee (FINCO): a consultative body reporting to the Board Advisory Committee. Its responsibilities include reviewing financial matters and making recommendations to the Board Advisory Committee on the accounting policies and procedures, IT financial systems and applications, matters related to financial and budget reporting, financial aspects of business plans and annual budgets, financial statements, appointment of external auditors, initiation of financial studies whenever deemed necessary.

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The constitution of Committee members, the agenda for the meetings and the decision-making process is summarised below.


Decision

• Frequency: Meets before Board meetings, twice a year • Consultative body to Board

• Frequency: Meets before FSC and BAC twice a year • Provides recommendations to the BAC

• Frequency: Meets 7 days before BAC, twice a year • Advisory and consultative body to assist efficient conduct of GASCO business

• Frequency: Meets before BAC twice a year

• Provides recommendations to the BAC

• Frequency: Meets three times in Q1, and before BAC twice a year • Provides recommendations to the BAC

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Risk Management

The governance structure for risk management is outlined below.

The Enterprise Risk Management (ERM) is tasked with providing a risk profile of the major corporate business risks for GASCO. The framework to help identify and manage these risks includes a Risk Management Policy, governance framework and the risk procedure and guidelines. BOARD

Abu Dhabi Gas Industries Limited (GASCO) shall: • Identify and assess the key risks that could have an adverse impact on the achievement of the company’s strategic objectives; set boundaries for risk taking and apply appropriate risk mitigation

• Implement risk responses within existing systems of internal controls that are designed to protect the Company’s people and assets, facilitate effective and efficient operations, and ensure reliable reporting and compliance with applicable regulations • Monitor the effectiveness of the system of risk and internal control management

Corporate risk profile and risk register Monitoring of the major risks

• Provide annual assurance regarding the extent of its compliance with the Risk Management Policy.

The GASCO Executive Leadership Team shall:

• Design, resource, operate and monitor the internal controls’ system in alignment with the Company’s key risks • Ensure that a risk-based approach to internal control is communicated to staff, embedded in business processes and is responsive to evolving risks • Assign accountability for managing risks • Ensure effective timely reporting on the following: The key risks: the level of threat currently posed by the risk The controls: their performance or effectiveness Action plans for risk mitigation: the progress made Losses or incidents: details and corrective action taken.

RISK MANAGEMENT COMMITTEE (RMC) RMC Members:

Chief Executive Officer (Chairman) Senior Vice Presidents + HSE Vice President Risk Officer (Co-ordinator)

• Apply guidelines, standards and ‘best practices’ that relate to particular types of risk

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AUDIT COMMITTEE

SVP Operations

Risk Owners Action owners and support team

Operational Sites

SVP SVP – Corporate Major Projects Support

Production Planning and Shipping

Integrity Assurance Legal and Insurance

Pipelines

Technical Projects

Finance

Natural Gas Projects

Human Capability

Corporate Planning & Strategy

SVP Technical

Senior Project Managers

Information Technology

Corporate Excellence

SVP Administration

Projects Control

Commercial

Internal Audit

HSE

Common process, language, understanding

Risk Management Policy

The Risk Management Committee will report to the Audit Committee which in turn reports to the Board. The objective is to ensure that an effective risk management framework is implemented and regular feedback and update provided to Risk Management Committee, Audit Committee and Board of Directors on the GASCO Risk Profile. This will be achieved by establishing structured procedures for identification, assessment, management and communication of risks. The repository of all risks is included in a Risk Register and a risk tracker monitors and reports the current controls and the status of action plans to further mitigate the risk identified.

Members of GASCO’s Leadership Team attending a strategy workshop Embedding Citizenship in the White Gold

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Strategic Goals and Road Ahead


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Strategic Goals and Road Ahead Strategic Objectives GASCO is currently undergoing major changes in terms of expanding capacities, developing our workforce and embedding excellence in our business practices to ensure alignment to the vision of the company. The strategic objectives set forth under the shareholders’ guidance define how we plan to meet our strategic goals within the boundaries of our vision and values. The strategic objectives are classified in five broad areas – HSE, Governance, Operations, Value and People. GASCO has been achieving its objectives through teamwork and the commitment of our employees, shareholders, suppliers and other stakeholders.

Mission

To develop, operate and maintain the associated/non-associated gas processing and transport facilities necessary to deliver the required network/re-injection gas and products, in a safe, environmentally friendly, reliable and efficient manner, in line with our shareholders’ guidance.

Vision

• GASCO aspires to be the most innovative and respected supplier of gas and hydrocarbons in the UAE.

• We are committed to excellence in all we do, caring for our people, our community and our environment. • We strive to be the employer of first choice.

• Our core business is to continuously generate value through world-class management of our gas plants and distribution network within the hydrocarbon value chain. • We continuously seek to improve and develop in sustainable ways: we are trustees for future generations.

HSE

• HSE objectives of the Company: No harm to people Protect the environment Improve asset integrity • Focus on three main areas – Facilities, Management System and Standards, People

Governance

• Long-term generation of value and its enhancement to our shareholders • We insist on honesty, integrity and respect for others in all aspects of our business and expect the same in our relationship with those with whom we do business • To comply with all applicable Laws, Government Policies and Directives of Abu Dhabi and the UAE

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Operations

• Ensure availability of assets to meet the demand • Improving the asset integrity and reliability • Integrate the new assets into the existing operations with minimal disruption

Values

Our business goals can only be achieved through our most valuable resource, our people. In order to retain the commitment of our people, we must ensure they are treated with respect and dignity, and that each individual’s health, welfare and safety play a primary role in all of our actions. Only then will our people support us in excelling across our cultural attributes: HSE, Performance, Open Communication and Transparency, Professionalism, Innovation, Teamwork, Learning and Adaptability, and Family and Community.

The path forward

In the near future, there will be a significant increase in activities for commissioning and stabilising a series of projects which were previously awarded. These projects include those listed below: • Habshan-3

The project will include processing of 1,225 MMSCF of thamama ‘F’ dry gas; production of 11,800 tonnes NGL (including 3,400 TPD ethane) and 130,000 barrels of condensate per day. • Habshan-4

The objective of the project is to install:

a) additional associated gas processing facilities to cope with additional associated gas as a result of the ADCO 1.4 MMBOPD crude expansion project at Bab and Bu Hasa; and to introduce operational flexibility between Habshan and Bu Hasa fields; Value

• To ensure that the operating expenses (excluding) manpower remain stable in real terms, while securing HSE, asset integrity and operations reliability

b) Acid Gas Enrichment Unit for processing additional acid gas from Habshan–3 (OGD-III) and from other facilities; c) additional Sulphur Recovery Units (two trains). • Asab-2

People


• We aim to be a good neighbour, contributing to the general well being of Abu Dhabi and UAE • To promote research and development to improve our operations • To work towards the goals of Emiratisation in recruitment and development • Contribute towards the development of the Western Region

The project is aimed at recovering 6,400 TPD NGL (including 1,750 TPD ethane) from the existing thamama ‘F&G’ processing facilities from the sour rich gas which is currently being recycled.

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• Ruwais-3 NGL train

The project includes the processing of an additional 24,400 TPD NGL and the production of 6,000 TPD of propane, 6,000 TPD of butane, 5,800 TPD of paraffinic naphtha and 6,400 TPD of raw ethane for export to the petrochemical complex of Borouge. • Offshore Associated Gas

The objective of the project is to transport compressed and dehydrated associated gas at high pressure from Das Island through a 200 km long offshore / onshore pipeline, and to process the same at Habshan, to provide a link between offshore and onshore facilities, as well as to reduce HSE risk of congestion in Das Island. The other challenge lies in ensuring sufficient recruitment to meet the upcoming expansion, maintain the aging plants and develop young UAE Nationals. These priorities have been identified in the business plans for the coming years.

Focus areas and initiatives for the next five years

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Energy and Environment

Employees

• Focus on asset integrity, reliability and process safety • Technical studies on investments on improving energy efficiency and reducing GHG emissions

• Adequate and timely staffing • Ensure highest level of employee motivation

• Awareness campaign

Excellence • Smooth commissioning of new facilities • Timely completion of IGD and other projects • Collaboration with the Petroleum Institute on research • Drive performance through the heart of GASCO by embedding the principles of change management


Stakeholder Engagement • Support conferences and seminars on knowledge sharing and development • Support various projects of ADNOC and the government of Abu Dhabi • Contribute to community by promoting educational initiatives, sustainability issues (environment, safety, health)

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Excelling in our Operations



GASCO’s production accounts for about 60% of natural gas products produced in the UAE, and approximately 10% within the Middle East

Goals we set for 2008 Maintaining a high level of reliability, availability and efficiency of facilities Ensuring effective coordination and overall optimisation of the value chain, with all partners (upstream and downstream, onshore and offshore) Maximizing condensate production

Achievements in 2009 Met increased requirements for both processed gas and other products through the consolidation of business processes 38

Very high availability/reliability of all production facilities with no significant incidents

Cyril Huijsmans

Senior Vice President – Operations

Next five years

Every year the priorities and activities of Operations remain consistent: the delivery of the maximum possible value from the facilities which our shareholders have entrusted to us. Our mission is to ensure we meet annual performance expectations, whilst delivering continual improvements. Similarly, the challenges we face in meeting these priorities are continuous: the harshness of the climate in which we operate and the effect it has on people and assets; the incredibly large amounts of capital expenditure required to keep up with the long-term growth in demand for gas based fuels; the safety of our employees; and ensuring we reduce the pollution of the environment arround us.

Promoting research to improve operational efficiencies

Our responsible corporate citizenship requires us to achieve the highest standards of HSE performance. The integrity of our facilities, the safety of our employees and our care of the environment are core values at the heart of our operations. This is our licence to operate. This does not diminish the overall importance of each challenge to the successful operation of the business, rather reflects the growing global focus on people and environmental issues. The dedication and commitment of the operations team has delivered a performance we are proud of. Achievements include the increase in total gas processing, doubling the capacity of Ruwais, as well as initiatives on improving the reliability of our facilities in the long run. The key challenge of the operations group is to continue the delivery of the core business, while supporting the massive expansion projects. In 2010 we intend to bring US $6 billion hardware on stream – from developing the manpower, setting up the processes and streamlining the operations of the new facilities with the existing one – a mammoth task. Embedding Citizenship in the White Gold

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The operations of GASCO are categorised as follows:

C3+ net productions – in million tonnes

1) Associated gas facilities at Asab 0, Bab and Bu Hasa

Condensate – in million BBL

2) Non-associated gas facilties at Habshan and Asab-1 3) Fractionation facilities at Ruwais 4) Pipelines.

The above gas and fractionation facilities between them process and deliver a range of gas products into Abu Dhabi’s gas distribution network. These products consist mainly of methane (C1), ethane (C2), propane (C3), butane (C4), paraffinic naphtha (C5 plus), liquid sulphur and condensate. The gas is supplied to industrial customers including the Emirate of Dubai through a network of pipelines spread over 2,300 km. We have come a long way from where we started in 1980: producing 120 MMSCFD of gas for our consumers in UAE, compared to producing 2,000 MMSCFD today. During this period we also generated approximately 2.2 million tonnes of LPG every year for our global customers.

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Last year the Operations team significantly increased the total overall gas processed from Habshan and Asab, with network gas and condensate production increasing by 10% and 14% respectively. There was however a dip in the production of associated gas by 14%, in addition to a drop in production of C3+ and raw ethane due to reasons beyond our control – less demand at Borouge for raw ethane, and lowered feed from ADCO driven by quota. Compared to last year, the major processing units delivered improved performance, whilst maintaining high plant availability and reliability, meeting both consumer demand and shareholders’ expectations. Additionally, during May the operation of the Sulphur Granulation Plant at Ruwais was handed over from Takreer to GASCO.

In order to ensure continued long-term reliability and asset integrity for GASCO plants, an extensive programme of major shutdowns was successfully completed during the first quarter of 2009. Despite the shutdown, GASCO plants continued to operate at high performance levels, enabling ADCO to achieve oil production quotas and meet marketing commitments. The production was achieved by very close co-ordination and co-operation between GASCO, ADNOC E&P and ADCO to align shutdowns. GASCO also has a swap agreement with Dolphin Energy Limited. During the major planned shutdown of Dolphin Energy in 2009, GASCO provided additional gas to the network. The sales gas production in 2009 was 10% higher than in 2008, mainly as a result of supplying additional gas to ADWEC to meet the peak demand during summer. Two new customers, Emirates Aluminium and Emirates Steel Industries, started to take small quantities of gas during the year and this is expected to increase over the coming years. The raw ethane produced by GASCO was mostly above the Borouge requirements except during the unscheduled oil production shutdown by ADCO in August 2009, which resulted in a severe reduction in ethane availability. The Ethane Recovery Maximisation (ERM) plant at Habshan played a positive role in balancing the ethane production at GASCO, particularly during shutdowns, upsets and ADCO reductions.

Production Statistics Network gas – in BSCF Raw ethane – in kilo tonnes Sulphur (incl. Ruwais) – in kilo tonnes

GASCO’s Plant Operation Vice Presidents: Adel Al Amoodi (Asab), Abdul Raqeeb Al Haj (Pipelines), Mahmoud Al Mazmi (Buhasa), Saeed Yaslam Al Ameri (Ruwais) and Abdul Nasser Al Mughairbi (Habshan & Bab) Embedding Citizenship in the White Gold

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Plant reliability

By the end of 2009 GASCO had safely loaded 192 vessels with a total of 3.4 million tonnes of product.

Product shipment Shipment of C3 – pentane (in million tonnes)

Asab-0 (%) Asab-1 (%)*

Shipment of C4 – butane (in million tonnes)

Bab (%) Bu Hasa (%)

Shipment of C5+ – paraffinic naptha (in million tonnes)

Habshan (%) Ruwais (%)

Plant availability

The Operations Group had also channelled its efforts towards minimizing operational expenditure in line with GASCO’s performance goals to meet ADNOC’s cost reduction objectives. Several cost optimisation initiatives were identified by the operating facilities and are being converted into action plans.

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43 Asab-0 (%) Asab-1 (%)* Bab (%)

Gross Operating Cost (in US$ million)

Bu Hasa (%) Habshan (%) Ruwais (%)

Capacity utilisation

Asab-0 (%) Asab-1 (%)* Bab (%) Bu Hasa (%) Habshan (%) Ruwais (%)

*Project impact on shutdown window


There are 16 ongoing major & technical projects being executed in the Pipelines Division including Habshan-III, Asab-2, OAG (Offshore Gas), NGL pipelines replacement, Habshan-4, Elixier-I&II projects as well as gas pipelines to Masdar facilities in Taweelah and Madinat Zayed and to EMAL plant.

Growth and Projects


Growth and Projects

1st CNG station for vehicles started

11 major gas development and pipeline projects of US$ 16 billion in various stages of development and completion

Goals we set for 2008 Ensuring the safe commissioning and start-up of major projects Supporting ADNOC with Phase I of the Natural Gas in Vehicles (NGV) Project, to promote economical and environmentally friendly fuel in the UAE

Achievements in 2009 Inaugurated the first CNG vehicle station (NGV Project), by H.E. Yousef Omair Bin Yousef, Secretary General of the Supreme Petroleum Council and ADNOC CEO. The project is championed by ADNOC with technical support from the Natural Gas Projects team Commissioned Ruwais–3 NGL train and initiated work for future projects 46

47 Ruwais capacity has approximately doubled to 47,700 TPD in October 2009 after Ruwais–3 NGL train

Abdul Aziz Al Ameri

Senior Vice President – Major Projects

Next five years

The Major Projects Group has the challenge of fulfilling the growth aspirations of our shareholders, by ensuring the vision becomes reality. We are committed to ensuring sustainable growth by giving due consideration to issues related to the environment, culture and well-being of the community and nature around our planned facilities. Previously, we have rejected projects with identified risks in these areas which were beyond mitigation and our highest standards of acceptance. We ensure that during construction all contractors have a compliant HSE system on site and have implemented all controls to ensure safety. HSE Awards for best performance have been implemented to recognise contractor efforts to meet project HSE targets. We believe that leadership commitment to safety is a top priority, as are appropriate systems which we expect to be demonstrated by the Project Leader and Project Site Manager. This has resulted in excellent HSE performance from our projects.

Right-first-time-start-up and commissioning of new projects, including: Flare Gas Recovery, Integrated Gas Development Project; thammama “C” to Asab Lean Gas Pipeline (ALP); Asab 2 & 3, CO2 Recovery and Injection; Habshan 3 & 4; Offshore Associated Gas (OAG)

During 2009, six mega projects worth US $10 billion were awarded for EPC, which are at various stages of execution, including Ruwais Train 3 construction project which was successfully started in November 2009. At the end of 2009 Major Projects Group was managing the execution of 29 projects at different stages with a total capital outlay of US $19 billion. We are always conscious of the fact that project delays lead to loss in production and cost over-runs, therefore completing projects on time and on budget is our key challenge. The simultaneous execution of major oil/gas/petrochemical/energy projects in the UAE and the wider region means that finding and managing the right subcontractors and construction labour is a core requirement to eliminate any negative impact on our projects. In the final stage, diligent efforts are made to ensure we deliver ‘right-firsttime-start-up’ and execute flawless commissioning of new facilities. Our prime objective remains to ensure safe commissioning and start-up of the major projects while managing the new projects.


Continuing support of ADNOC in implementation of the NGV Project (by 2010 – 16 CNG vehicle stations), and the Nitrogen Gas Injection and Sulphur Handling projects Increasing capacity across all the facilities, from 6.4 BSCFD in 2010 to 8.0 BSCFD by 2013

Growth and Projects

To deliver GASCO’s strategic growth plans the Major Projects Group, comprising the Front End, Projects Control, and Natural Gas Divisions, is entrusted with the responsibility of creating new facilities to the highest global standards, within budgeted costs. The projects are primarily aimed at meeting the plans of ADNOC: Integrated Gas Development, Natural Gas in Vehicles and general expansion of processing volume.

Current projects that GASCO is executing to support the ADNOC group include: • Compressed Natural Gas (CNG) and City Gas Projects

• ELIXIER 1 and ELIXIER 2 projects for Nitrogen Gas Injection (Mix and Pure Cases) • Breakthrough and Nitrogen Rejection pre-FEED and FEED Studies

• FEED of Shah Habshan Ruwais Rail (SHR) project to transport granulated sulphur • FEED for CO2 capture and injection.

Amongst the current risks and challenges which require major attention, include:

new EPC contractors (South Korean) working in the UAE for the first time; and

the lack of adequate UAE based construction contractors with sufficient capacity for additional work, in view of many large EPC projects being executed simultaneously within the region. Over the next few years, we are looking towards our Corporate Excellence values to enable us to smoothly deliver the ambitious targets of: • increasing our production capacity of methane by 25%

• increasing our production capacity of condensate by 25%

• doubling our production capacities of: sulphur, LPG and paraffinic wax; and • tripling our production capacity of ethane. 48

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Some of the major projects on which we worked in 2009 currently in various stages of development and completion are outlined below.

Habshan-3

Asab-2

Offshore Associated Gas Processing – (OAG-Pkg.2)

Ruwais-3 NGL train

Habshan-4

Offshore Associated Gas Processing – (OAG-Pkg.3)

Habshan-5 Process Plant and Utilities & Offsites (IGD)

Ruwais Storage Tanks and 4th NGL train (IGD)

NGL Pipeline Replacement

Habshan Flare Gas Recovery Project


Growth and Projects

ADNOC recognises the growing interest in using cleaner, more environmentally friendly fuels such as natural gas. Natural gas is a safe, clean, efficient and economical energy source. It is used extensively in residential, commercial and industrial applications around the world. The main mission of the Natural Gas Division is to develop, engineer, construct, commission and handover all Natural Gas Project (NGP) works to Operations, in accordance with the acceptable international industry standards and within agreed schedules and budgets.

Natural Gas Projects encompass implementation of a Natural Gas Distribution Network in the Emirate of Abu Dhabi. The prime objective of the Natural Gas Distribution Network Project is to supply compressed natural gas for vehicles through filling stations and to various residential, commercial and industrial customers in Abu Dhabi city through pipelines / piping network. The formation of the Natural Gas Division came when GASCO had been assigned to execute the NGP, which entails a network of compressed natural gas stations (CNG) at various locations within the Emirate of Abu Dhabi as well as the Northern Emirates, in addition to all ADNOC group companies’ remote sites and various governmental authorities. The NGP covers the design, construction, operation, maintenance, emergency activities and communication networks (SCADA, Fibre Optics) from / including the high pressure gas pipelines to the natural gas distribution network terminating at residential, commercial and industrial customers’ appliances. The NGP will also serve the transportation sector by building and operating state-of-the-art natural gas filling stations, vehicle conversion workshops and vehicle conversions. To execute this project, the NGP team was founded to collaborate with other government entities, supported by ADNOC technical expertise, infrastructure and fuel. We have successfully commissioned the Al Maha NGV station in 2009, with the remaining 17 stations set to be up and running by the middle of 2010. Our challenge in 2010 will be to streamline the operation of the NGV stations, by supporting the ADNOC Distribution team with relevant technical and process expertise, such as managing and leading the selection of NGV conversion workshop operators, and the procurement of natural gas bulk storage trailers units to transport CNG from Mother to Daughter Stations.

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CASE STUDY

NGV – VEHICLES OF THE FUTURE Natural Gas Vehicle (NGV) is a vehicle that uses Compressed Natural Gas (CNG) as fuel. CNG is a gaseous mixture of hydrocarbons, mainly methane, compressed to a pressure of 200 kg/cm2, and stored in a reinforced cylinder installed in the vehicle.

WHY NGV?

SAFETY • CNG being lighter than air does not accumulate in case of accidental leakage. • Higher auto-ignition temperature than gasoline.

ENVIRONMENTALY FRIENDLY

• Reduces carbon monoxide emissions 90%-97%. • Reduces carbon dioxide emissions 25%. • Reduces nitrogen oxide emissions 35%-60%. • Potentially reduces non-methane hydrocarbon emissions 50%-75%. • Emits fewer toxic and carcinogenic pollutants. • Emits little or no particulate matter. • Eliminates evaporative emissions. • CNG engines are less noisy than diesel engines.

ECONOMICS

• CNG is cheaper than petrol or auto LPG. • NGVs give greater mileage over petrol or auto LPG. • CNG has a high octane rating giving efficiency advantage. • NGVs have lower maintenance cost since CNG does not contaminate or dilute crankcase oil, and the absence of lead in CNG helps avoid lead fouling of plugs, thereby enhancing plug life.


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Goals we set for 2008 Leading an extensive emission reduction campaign; reducing significant GHG, SOx and NOx gas emissions by implementing environmentally friendly modifications and projects Continuing to promote HSE excellence with particular focus on process and manpower safety, and environmental protection for both existing and new facilities. Introducing a Process Safety KPI Ensuring the long-term integrity of assets and facilities, and developing enhanced Asset Integrity KPIs Aggressive plan to implement advanced process control systems to optimise energy utilisation

Achievements in 2009 Awarded two ADNOC HSE Awards for 2008 (one in the Sustainable Development category) Conducted an HSEMS Audit in co-ordination with shareholders, which identified 34 areas of improvement, for which remedial action plans are being developed

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Abdulla S. Al Minhali

Commenced development of a GASCO Process Safety Standard which is based on the Major Accident Prevention Programme

As the guardians of GASCO’s assets, the technical team’s primary challenge is to ensure the existing capacities are at optimal performance level, both in terms of operational parameters as well as energy and environment friendliness. The Technical Group is responsible for integrity assurance, technical project management and offers engineering support, with major focus on energy efficiency and environmental preservation.

Updated processes for the Permit to Work

Senior Vice President – Technical

We identify opportunities to improve the reliability, quality or environment of our operations. This is achieved by the implementation of technical studies and investments leading to energy conservation and reduction of greenhouse gas emissions. In this regard we collaborate with energy and environmental experts in order to accelerate our ambitious improvement plans. In 2008, we systematically screened our operational facilities for opportunities to improve on energy efficiency and implement better environmental practices. As a result more than 130 opportunities were identified and in 2009, all the feasible quick wins were implemented. We are currently on track to register several of these environmental projects in the UNFCCC under the Clean Development Mechanism (CDM) which is supported by Masdar. We continously monitor and measure our fuel gas consumption and flared gases in all GASCO plants in order to track and drive improvements. In addition, the GASCO Energy Award was initiated with the first award going to Habshan/Bab in May 2009, for major steam savings achieved through optimised operational approach. Going forward, we have introduced a Key Performance Indicator (KPI) for energy efficiency for each site. The Green Building Design guidelines were issued for implementation – to minimize the impact our buildings have on the environment and community, through energy saving and reduction of harmful waste. We are tasked with ensuring that the asset integrity and reliability of our ageing facilities are not compromised. Accordingly, asset integrity auditing plays a key role in gauging asset integrity assurance levels. Further, the implementation of the Asset Integrity & Reliability Management System (AIRMS) and conclusion of the Long Term Asset Replacement Plan (LTARP) study have proved to be integral components in our quest to continually improve the performance of our assets. Embedding Citizenship in the White Gold

Initiated a strategic study on the future of GASCO Gas turbines, to achieve improved long-term reliability for 18 process turbines and lower carbon footprints Completed the 2009 Shareholders’ Assets Integrity Audit Introduced Project HSE Review (PHSER) standard to ensure that HSE and integrity hazards associated with Projects have been assessed Adopted Green Building Design guidelines which will minimize environmental impact, reduce energy consumption and minimize waste Supported launch and data gathering for the GASCO Corporate Citizenship and Sustainability Report Held a workshop with the shareholders to review the Habshan (0) pilot LTARP methodology to review and agree the way forward for the other GASCO plants Commenced development of the Petroleum Institute Research & Development Support Agreement, in co-ordination with ADNOC and ISHs

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Next five years Implementing technical studies and investments leading to energy conservation, a reduction in greenhouse gas emissions and collaboration with knowledge partners Prioritising process & occupational safety and asset integrity Developing a forum to share best practices with our industrial shareholders and OPCOs Carrying out HSEIAs for newly commissioned projects and existing facilities to identify cumulative risks by merging HSEIA and QRAs, to quantify risk to GASCO posed by ADCO facilities

Going forward, the company is driving the agenda to conserve the White Gold by focusing on efforts to capture flared gas. In addition to these efforts to reduce harmful gas emissions like SOx, NOx, further issues were taken into consideration, leading to the formation of the Environmental Strategy Steering Committee (ESSC) in 2007. ESSC’s primary purpose is to uphold GASCO’s commitments to deliver on environmental conservation. Their motto: Energy Efficiency and Emission Reduction.

Flaring (MMSCFD)

Conclude the implementation of the Asset Integrity & Reliability Management System (AIRMS) across GASCO Implementing the recommendation of the LTARP Implementing a pilot Green Building Project

GASCO wins ADNOC HSE awards in two categories – Sustainable Development and Contractor Safety Initiative

Two projects on energy efficiency at advanced stages of registration in UNFCCC under Clean Development Mechanism

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GASCO Energy Award initiated in 2008

SOx emissions (tonnes/yr) As a result of ADNOC’s decision to address the issue of the gas which was flared for 30 years by ADCO during its production of crude oil, GASCO was created. Over the years this reduction of flaring has resulted in the recovery of this important source of energy, putting GASCO on a par with the best in our industry.



The ESSC embarked on several studies to identify potential opportunities to improve energy efficiency and environmental performance. More than 130 projects were identified and prioritised, based on strategic priorities and the time needed to implement them. As of 2009, approximately 70 have been completed. Amongst these projects were the initiatives taken to reduce flared gas and improve sulphur recovery. Given the substantial investments and long payback periods required, this is the first example of its kind in the Middle East. However the leadership of GASCO approved these projects after considering the benefits they provide to the community and environment at large, in pursuit of its goals of responsible citizenship. On completion of all these projects in energy conservation, we expect to reduce gas consumption by 85 MMSCFD, thus eliminating the emission of around 4 million tonnes of carbon dioxide per year by 2015. Asset integrity and reliability is an area which has come into the public eye in the last few years due to incidents like those in Texas City. It becomes increasingly vital, given the fact that our assets have been in operation for more than 30 years. The most important body in our governance structure – our industrial shareholders – are concerned about, and proactive in, ensuring the wellbeing of our assets. This is demonstrated by the comprehensive asset integrity audit conducted by the team from the shareholders. Within the management system and procedure related aspects of improving our process safety, we have started to develop a process safety standard, an Asset Integrity Management System, and rolled out our pilot project on the Long Term Asset Replacement Plan. GASCO CEO chairs an Assets Integrity Managment (AIM) steering committee, established in 2006, ensuring and directing the appropriate attention to safe integrity performance. 58

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In 2008, GASCO introduced our first Energy Award scheme among our operating divisions, to acheve wider employees’ contribution and benefits. Tremendous enthusiasm was demonstrated through the sheer volume of entries, and each one reflected the highest degree of commitment and perseverance to make every ounce of energy count and make the environment cleaner.

Abdulqader Alkamali

Vice President – Health, Safety, and Environment In GASCO, environmental, safety and occupational health issues are important considerations in every aspect of our industry: they are our licence to operate. During 2009 efforts continued in driving GASCO to achieve the highest standards in health, safety and environmental performance. A continuous HSE improvement process is in place. Some of the key initiatives included: carrying out HSEIA studies and a Project HSE review for new projects, supporting the sites to implement the HSEMS system and promoting the HSE culture. We were also recognised by ADNOC for efforts and awarded in the HSE areas for innovation and contractors’ HSE partnership.

Our HSE strategic objectives can be summarised as: • No harm to people • Protecting the environment; striving towards the elimination of hydrocarbon flaring; continuous venting; minimization and control of effluents and solid wastes; optimum use of land; energy and raw materials • Improving asset integrity, striving towards zero loss-of-containment. Embedding Citizenship in the White Gold

Focus remained on audits, strengthening the HSE management systems, training and awareness. The Major Accident Prevention Programme is in progress and actions related to H2S management are a priority. After the success of the pilot ‘Take care of your heart’ series, this year we launched ‘Take care of your back’ campaign to increase awareness and reduce the risks of manual handling. Despite our best efforts, we suffered two fatalities during 2009. All steps are being taken to prevent such tragedies from re-occurring and a seminar was organised for our contractors to emphasize the need for sharper focus on the effective implementation of their HSE management processes. Our focus in the coming years will be on HSEIA implementation at GASCO’s existing facilities under the scheme ‘HSEIA Operationalisation’.


‘Strategic Study of Future GASCO Process Gas Turbines’ has been initiated to explore viable energy efficiency and environmental friendliness options, to achieve long-term improved reliability and performance for eighteen process gas turbines. The study will evaluate parameters for: emission reduction levels; reliability; life; OPEX savings and CAPEX. Occupational health and safety in the process industry is a critical area, requiring delicate management, with the collaboration between processes and people remaining a major challenge. To address this, an HSE culture change programme was initiated to incorporate behavioural safety and risk-based assessment of hazards for all activities. The GASCO Major Accident Prevention Programmes remedial action plan was developed in March 2009 with the clear objective of establishing performance goals in terms of SMART objectives. These included an HSE competence assurance, an implementation for HSEMS and modifications in processes. The HSEIA Operationalisation is the process of implementing recommendations derived from HSEIA reports in operating facilities.

HSE Impact Assessment Operationalisation

1 Close-out of Shortfalls / Gaps 2 Organisation & Resources for HSEIA Operationalisation

7 Management Review RISK ASSESSMENT

6 Assurance & Audit

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COMAH

OHRA

EIS

3 Update & check Control Measures (Barriers)

HSEIA REPORTS

5 HSE Standards & Procedures Development / Implementation/ Update / Check

4 Competence Assurance of HSE Critical Tasks

The risk assessment process above covers the areas of: control of major accident hazards (COMAH); occupational health risk assessment (OHRA); environmental impact statement (EIS) using the Bow Ties methodology – presentation of risk evaluation and assessment.


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In the last few years, GASCO has undergone some major expansion projects. The launch of the Project HSE Review (PHSER) standard last year led to the assessment of the adherence of major projects to the ADNOC Guidelines and Code of Practices. Our contractors share the responsibility for providing a safe and clean work environment and culture for sub-contractors whether on our projects or on operating sites. We discussed HSE performance with them, and shared challenges we both face. This was done in a structured joint seminar last year with more than 25 of our contractors and industrial shareholder representatives. Discussions were held on the best practices of Shell (Sakhalin Project), our HSE perspectives and experience of best practices. We carried out several campaigns and studies on resource conservation and pollution prevention. The most significant amongst them was the Water Management study completed in 2009, which assessed the water consumption and waste water generation from GASCO operations and gave recommendations. The events included campaigns like Paperless Day, First Aid training, blood donation camps and the provision of Employee and Family training to raise awareness about energy conservation.

CASE STUDY

GASCO LONG TERM ASSET REPLACEMENT PLAN (LTARP)

LTARP will enable us to estimate the remaining lives of existing assets that may need to be replaced within the next twenty years. A pilot study was conducted for Habshan-0 and subsequent to that, an action plan was drawn up to implement the relevant recommendations at all GASCO facilities. A roll-out plan is currently being developed to conduct the LTARP study for the remaining sites’ assets.

CASE STUDY

GASCO’s winning entry in the ‘Recognition Award for Company and Contractor Partnerships’ category

Hazardous and non-hazardous waste

GASCO’s winning entry in HSE MS Initiatives – Zero Plus Programme consisted of one our major project contractors Bechtel Oil Gas & Chemicals, implementing an HSE programme to adhere to our philosophy of zero accidents called ‘Zero Plus’. 62 Non-hazardous waste (tonnes) Hazardous waste (tonnes)

Ground water consumption (m3)

The initiatives included the weekly all-hands meetings held each Saturday during which everyone on site met to recognise achievements in safety performance by individuals. Weekly management safety walk downs are held each Sunday involving the evaluation by senior members of HSE practices on site, and the communication of this to junior staff. The ownership, dedication and control of the team lead to excellent HSE performance with no fatality reported for a project with a workforce of 5,000 and only one minor non-industrial accident.

CASE STUDY

GASCO’s winning entry in the ‘Sustainable Development Award’ category – Detection of Invisible Gas Leaks

GASCO’s winning entry at Ruwais, Habshan & Bab, consisted of utilising an infrared video camera to provide rapid, accurate and safe identification of hydrocarbon gas emissions in realtime. This technology allows operators to see emissions of methane and volatile organic compounds that are not visible to the naked eye, enabling precise identification of the origin of the leak, resulting in a much higher degree of accuracy compared to previous conventional methods. This was part of the Fugitive Emission Management programmes, which are contributing to a safer and cleaner working environment.

We have been recognised for our efforts by ADNOC, having been awarded two honours in the HSE categories in 2009. We reached the milestone of 6.44 million man hours worked without a Lost Time Injury and the year-to-date LTIF and TRIR were 0.15 and 0.42 respectively against 0.18 and 0.42 for the same period last year. Embedding Citizenship in the White Gold

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Stakeholders, Employees and Efficient Systems



35% UAE nationals and 10% UAE female nationals

Emiratisation over 2009 reached 97% of its target with expatriate recruitment achieving 94% of its target

Goals we set for 2008 Actively continuing the recruitment, training and integration of staff necessary for the safe and smooth operation of new facilities Motivating, retaining and attracting highly competent staff – both UAE nationals and expatriates Ensuring staff development through training opportunities Meeting Emiratisation targets Minimizing operating costs and optimising capital expenditures, by promoting and applying best practice to all contractual and procurement activities Automating administrative tasks to improve accuracy and reliability

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Achievements in 2009

Rashed A. Al Shamsi

Senior Vice President – Administration As part of a major reorganisation and restructuring process in 2009 the Organisational Capability Division (OC) and the Human Resources Division (HR) were integrated to become a single division – the Human Capability Division (HC). The primary purpose of this integration was to create increased effectiveness and efficiency in managing the human resources related activities through improved co-ordination and control. As part of this drive to increase efficiency across the Division, the automation and accompanying improvement in reliability of administrative tasks was another priority for 2009. We saw the launch and go-live of the ERP application, and also implemented a US $5 million Production Information & Shipping Management (PRISM) to replace GOMES (GASCO Operations Management & Evaluation System). PRISM will cater for our growing business requirements resulting from the new projects and the expansion of existing IT facilities. However, with such large scale upgrading of IT hardware and software applications, there is always a risk of loss of data, and potential disruptions in business activities. We are in the process of developing a business continuity plan to address these risks and to ensure that the integrity of the data is maintained. Our commercial objective for 2010 is to optimise operating costs and capital expenditures by promoting cost conscious attitudes, and applying best practices to all contractual and procurement activities. Our ambitious expansion plans mean that we will need to recruit approximately 200 staff per year during 2010-2014. Our requirements for technical staff will be around 160 per year. Therefore retaining and recruiting the top talent to be found in the UAE remains our number one priority for the next five years. Embedding Citizenship in the White Gold

Renewed our Joint Venture Agreement with GASCO’s shareholders, completed and signed in March 2009 Sponsored 13 GASCO employees to study Master degree programmes at the Petroleum Institute Developed a revised Code of Conduct Developed an updated Accounting guide and procedures Conducted a Certified Managers’ Programme covering 75 middle management staff. This programme will be further rolled out to cover an additional 100 staff at junior / middle management level Upgraded several legacy IT systems. For example, the ERP Project for HR and Finance, Maximo to version 6.2, and the replacement of GOMES with PRISM OPEX and CAPEX are closely monitored with a view to optimising them Approximately 50 employees undergoing study leave to upgrade their skills by pursuing further education at the Higher Colleges of Technology in various disciplines including chemical, mechanical and electronics engineering Led the development and establishment of a common supplier prequalification and registration system, now being used by the five exploration & production companies within the ADNOC group

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Next five years

Manpower (total number of employees)

Ensuring adequate staffing levels to meet growth plans Establishing a robust leadership model in line with international energy companies Implementing the Competency Assurance Management System (CAMS), to ensure the smooth integration of UAE nationals for the safe and efficient operation and maintenance of our plants Leading initiatives which will result in an improvement to employee satisfaction, to ensure their motivation and retention Limiting the budgetary impact of the cost of spare parts across major projects, by improving the current stock optimisation initiative

GASCO considers our people to be our greatest asset. Given our projected growth plans over the next few years, there is a need to increase our manpower significantly, with particular emphasis on the technically skilled. The motivation, involvement and support of our people are of particular importance for our success in this challenging period of accelerated growth. To meet this requirement, the Human Capability Division was created to manage our human resources through better co-ordination and control amongst all HR related functions, with a view to creating an environment in which our people could excel. 68

Head Office employees – gender breakdown

Total GASCO employees – gender breakdown

Male

Male

Female

Female

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A comprehensive employee survey is conducted annually to capture the level of employee satisfaction and engagement across a number of human dimensions. Frequent open communication sessions are hosted by the senior leadership team to provide a forum for employees to air their views, opinions and concerns and seek resolutions. Long Service Award functions are conducted annually, where employees who have completed 10, 15, 20, 25 and 30 years of service with the company are recognised for their contributions and honoured. Opportunities for work placements are provided for employees’ children. An employee referral scheme provides a cash reward to an employee who helps GASCO in recruiting qualified and competent candidates to fill technical positions.

Total training hours in 2009 Senior management Middle management Lower management Trainees Workers



The Commercial Division provides effective, quality and cost-efficient procurement services to the rest of GASCO, ensuring control over the procurement process while maintaining its integrity. The Commercial Division’s role in fast-track scenarios is critical, and as such is a major business enabler for GASCO. Several initiatives have produced excellent results including: • Cost savings of US $132 million

• Reduction in the purchasing cycle from 45 to 32 days

• Combined savings of US $20 million through introduction of the ‘GASCO Spare Parts Interchangeability Record’ (G-SPIR) • Increasing utilisation of the Inventory Data Sharing (IDS) system for exchanging materials. Project Spares Optimisation Savings (in US $ millions)

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Information technology facilitates our business transactions, improving efficiency and reducing errors. The major upgrades of IT infrastructure comprised the following projects: • Oracle Financials and the Oracle HCM as part of a state-of-the-art ERP implementation. • Production Information & Shipping Management (PRISM) • G-SPIR

• e-Tendering / e-Registration

• Risk Based Inspection (RBI) system • ECM Livelink

• Enhanced intranet and internet. Purchasing Cycle (in days)

Rashed Annoon

Vice President – Human Capability GASCO’s Human Capability Division plays a key role in driving a high performance work ethic to enable organisational success and growth, by fostering a supportive culture, while facilitating continuous improvement initiatives. In our role as ‘trusted partner’ and ‘advisor’ to all in GASCO, we strive to provide high quality services in all aspects of the Human Resources Management related functions. The rapid growth in the scale of GASCO’s operations demands the recruitment and integration of a large number of employees – both UAE nationals and expatriates. This ambitious objective faces stiff challenges in the wake of a stretched labour market for qualified and competent staff in the hydrocarbon industry, locally and globally. The lack of suitable candidates to fill the senior technical positions is a concern that we are addressing through a number of initiatives, including drawing upon the support of our shareholders as appropriate. A key objective is to develop and integrate a sizeable number of UAE national employees, about 400 to 500 over the next few years, through CAMS. In 2009, the HC Division’s focus was on embedding the ‘Sheikh Khalifa Excellence Award Model’ principles and practices into the Division’s activities, integrating all the human resources related functions including Personnel, Administration and Capability Development, into a single cohesive unit. In 2010 we will also seek to enhance the transactional efficiency and effectiveness of all our activities, and improve our services to become truly customer-centric.



A consistent level of competency in our people is achieved through use of the Competency Assurance Management System (CAMS). As part of this system, the competency of the employees under the CAMS is assessed periodically, the results of which are then used during the performance management cycle to feed into their Personal Development Plans (PDPs). At present, 168 university degree level graduates are being managed and developed through CAMS, undergoing technical and non-technical learning and development programmes, on and off the job. The expansion projects offer learning and development opportunities for technical graduates, exposing them to the latest developments in the field in disciplines such as design, operations and maintenance. GASCO regularly assigns its UAE national employees to project offices abroad as a high value adding development initiative. The Competency Assurance System (CAS) is applied to operators, technicians and graduates of the ADNOC Technical Institute (ATI). The GASCO Technical Training Centre (GTTC) is another state-of-the-art facility where a three-stage learning and development programme is conducted for UAE nationals, to equip them with the necessary technical and leadership skills and knowledge, so that they can be integrated into GASCO.

72

We believe in promoting education, and to facilitate this, provide full scholarship programmes for UAE national employees keen to go on to higher studies. Fully paid study leave is available through ADNOC for both undergraduate and post-graduate courses, in addition to educational subsidies. One recent initiative is to sponsor graduates from within the science and technical streams of high schools, and put them through a structured development programme prior to being welcomed into GASCO. There are currently around 50 employees pursuing higher education in higher colleges of technology in various disciplines including chemical, mechanical and electronics engineering. Another initiative in this direction is our sponsorship of graduates (both UAE nationals and expatriates), pursuing Masters programmes at the Petroleum Institute. Employee turnover

< 30 yrs

Ethnic breakdown

Emirati

< 30 - 50 yrs

Arab expat

> 50 yrs

Western expat Asian expat Other

We intend to focus on promoting the continued learning and development of UAE nationals, placing the best qualified people in positions that will enable them to grow professionally, while at the same time, helping GASCO achieve its business objectives. We plan to double our previous average yearly intake of around 100 UAE national employees to help us achieve the goals of Emiratisation. As part of our ongoing leadership development strategy we have identified the ‘Certified Manager Programme’conducted by the Institute of Certified Professional Managers (ICPM) as a highly relevant training option. The course is designed to enhance the leadership and management competencies of mid-level leaders (superintendents, section & department heads). Since October 2008, 60 potential leaders have been trained, and we have plans to develop an additional 100 employees through this initiative. Embedding Citizenship in the White Gold

73

Huda Al-Matroushi

Vice President – General Services GASCO’s commitment in balancing organisational growth with sustainable development is reflected in the spirit and actions of the General Services team. Our motto is to provide quality and value-adding support services to all our employees throughout their time in GASCO. In 2009, we led the environmental awareness for GASCO which consisted of various awareness campaigns on water and electricity conservation. We did not limit our campaigns to GASCO but extended them to schools and government institutions. In the coming years we plan to scale up our activities related to energy and water conservation, and include other areas of Abu Dhabi. The hygiene and safety of our employees are key responsibilities on which we focused several initiatives. Highlights were the implementation of the Vehicle Management System to monitor the safe driving of the employees; maintaining and improving housekeeping standards contributing to the ISO certifications and regular audits on catering and sanitation facilities. We are also involved with employee welfare and have successfully organised social, religious and cultural events along with informative lectures. We are actively pursuing resource and cost optimisation to reduce our environmental footprint through reduction in fuel consumption, paper waste and other similar activities. These efforts will not only help in cost control but will also provide positive impetus to natural resource and environment conservation. We will continue working towards optimising our business processes which will be aimed at providing more professional and efficient support in a timely manner. This will be achieved by channelling our effort towards automation and establishing systems which are transparent and effective. We relish our role in spreading sustainable practice by raising awareness of social, environmental and economic welfare in the broadest of terms.


CASE STUDY

Participation in Culture Week

GASCO took part in the Culture Week held by Qatr Al Nada school as part of our initiative to support local communities. A large collection of pictures depicting UAE heritage and culture were on display for students and other visitors to learn more about life in the past. A number of senior local government representatives attended the various activities of Culture Week, including: Mr. Khalfan Eisa Al Mansouri, the Director of the Western Educational Zone and Mr. Sultan Zayed Al Mazrouei, Officer in the Islamic Affairs and Endowment Authority in the Western Region, in addition to a large number of other dignitaries.

CASE STUDY

Traffic Week in the Western Region

Various activities were held during the week, educating people about road safety matters. GASCO was both the runner-up in, and the sponsor of, the football tournament. The tournament was held at the Al Dhafra Sports Club with teams representing the Health Department, Civil Defence, Al Masood for Cars, Public Transport Department and Etisalat. 74

CASE STUDY

75

Rewarding Outstanding Achievers

GASCO sponsored an initiative encouraging students to excel in their studies. The project was launched at Hamdaneiah School and included six categories for distinguishing outstanding students, teachers and parents. Between 20-25 winners are selected for awards by GASCO every six months.

CASE STUDY

Promoting Tradition and Culture

In support of the Zayed Higher Foundation for Welfare in Madinat Zayed, GASCO participated in sponsoring the annual Traditions campaign. This year’s campaign was held under the title “My Heritage, Myself Pride”, for which GASCO donated and installed a library at the Welfare Center, rich with historical and cultural books.

CASE STUDY

Sponsoring people with Special Needs

Supporting people of different abilities is part of our responsibility as a good corporate citizen. In the spirit of fulfilling this commitment, we took part in a fund-raising marathon, co-sponsored by GASCO, local schools and the local police department. A number of department managers from Habshan represented GASCO during this event.

Khaled Mubarak Al Kendi Manager – Public Relations

The challenge of the public relations team lies in creating a positive and responsible reputation for the company with all its key stakeholders – the regulatory bodies, the shareholders and the citizens of Abu Dhabi and UAE. We supported GASCO’s participation in several key events in the recent past which created a lot of good will and enhanced our image as a responsible Corporate Citizen. Notable amongst them were our support of divisions in communicating events like GASTECH 2009. Letters of appreciation are also awarded in recognition of excellent performance to employees, in addition to Long Service Awards. These are a key part of the initiatives we take to make our employees feel like part of the GASCO family. Furthermore we also promote and assist in humanitarian causes such as co-ordinating hospital visits, blood donation camps, and the collection and distribution of aid in the event of natural disasters through our support of the UAE Red Crescent. With all that has been achieved since 1978, we believe that any employee can say with pride that they are a part of GASCO. As the pubic face of the company, and looking to the future, we are striving to place GASCO amongst the most admired and respected businesses in both our industry and the UAE.


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Towards Excellence


77

Towards Excellence

Sheikh Khalifa Excellence Award – Silver Award in Manufacturing

All 90 SBUs in GASCO are ISO 9001 certified – first of its kind in OPCOs

Goals we set for 2008 Excellence in quality and performance

Achievements in 2009 ISO 9001 certified for all business units Delivered the action plan to address the issues raised in the results of the 2008 People’s Survey, which had a 70% response rate Adoption of the widely used European Foundation for Quality Management (EFQM) Excellence Model, to define and measure company capability and performance aspirations 78

79

Next five years Optimising business processes during 2010, and moving towards an integrated quality management system by 2011; in line with a performance-driven approach and improved organisational capability

Ahmed Tamim Hisham Al Kuttab

Aiming to achieve a Gold Award in the Sheikh Khalifa Excellence Awards in Manufacturing

Vice President – Corporate Excellence

The Corporate Excellence team is one of the youngest additions to the GASCO family and is focused on demonstrating and delivering leadership in corporate excellence for our business processes. Our goal is to champion excellence and to inspire formal and informal leaders of change. The priority of the Corporate Excellence team is to promote ‘performance centred’ change and increase the organisational capabilities of all business units, through systematic application of the principles of Quality and Change Management. We strive to bring cultural change and improve internal communications. We take great pride in announcing that with effect from 5th November 2009 all individual business units of GASCO were certified to the internationally recognised Quality standard: ISO 9001:2008. Also in 2009, an Enterprise Risk Management (ERM) framework was developed to cover the whole spectrum of corporate business risks. We also conducted our annual employee survey in March 2009. The key findings were clustered into the ‘ten least favourable responses’ based on which a mitigation plan was created and is being implemented. We would also like to mention that the GASCO 21 Journey which was initiated in 2002 as a continuous improvement programme will be refreshed with re-defined objectives which centre around excellence, which we intend to tackle through people, culture and process workstreams. GASCO will also continue to search and promote synergies, both within our own entities and with external business partners. Embedding Citizenship in the White Gold

Extended Leadership team at the GASCO 21 workshop in November 2009

Towards Excellence

Over the years the GASCO 21 programme has evolved from a programme focusing on people, to one which focuses on excellence. Further emphasis was placed on this aspect of the business with the formal creation of the Corporate Excellence Division in 2009 reporting directly to the Chief Executive Officer, to champion excellence and to inspire formal and informal leaders of change. During the past few years, the hard work and perseverance of our various teams have led to several accolades. GASCO has been a proud recipient of the Sheikh Khalifa Excellence Award on two separate occassions.

GASCO continues to work on the area of Corporate Excellence. This year GASCO adopted the best practice European Foundation for Quality Management (EFQM) excellence model, as a framework for managing our capability and performance aspects.

EFQM Excellence Model

Enablers

Results

People

Leadership

People Results Processes, Products & Services

Strategy

Partnership & Relationship

80

Customer Results

Key Results

Society Results

Innovation, Creativity and Learning

EFQM Excellence Model 2010

As we strive to meet growth objectives, embedding the principles of Corporate Excellence has been a top priority. Our journey towards excellence began soon after the historic integration of GASCO with ATHEER, with the launch of the ‘GASCO 21’ initiative in 2002. GASCO 21 was a key change management programme which facilitated the smooth and successful integration of the two businesses – based on feedback from employee surveys and post-merger analysis.

Fundamental Concepts • Achieving balanced results

• Succeeding through people

• Leading with vision, inspiration & integrity

• Building partnerships

• Adding value for customers • Managing by processes

• Nurturing creativity & innovation • Taking responsibility for sustainable future

The EFQM Excellence Model is a measure of the organisation’s ability to achieve and sustain excellent results for its various stakeholders.The prime objectives include: increased cost effectiveness, a results oriented approach, customer centricity, new partnerships in technology and services, knowledge management, performance focused, and continuous learning. GASCO receiving the Sheikh Khalifa Excellence Award from H.H. Sheikh Hazza bin Zayed Al Nahyan

The Sheikh Khalifa Excellence Award is a symbol of quality and excellence among economic and service communities in Abu Dhabi and is awarded by the prestigious Abu Dhabi International Centre for Organisational Excellence and the Abu Dhabi Chamber of Commerce and Industry. The award was initiated in 1999 and has become the epitome of recognition for corporate excellence and quality – setting the benchmark for all organisations in Abu Dhabi. Embedding Citizenship in the White Gold

The model was designed to be simple: holistic (covering all aspects of an organisation’s activities and results); dynamic (a live management tool to support improvement); and flexible and innovative.

81

Towards Excellence

The Corporate Excellence Division utilises the following approach to identify areas for improvement. Thereafter, the Kotter methodology is used to manage and communicate the change.

GASCO’s Change Management Model Establish the Urgency

6 Define the Ambitions/ Vision

Assess the Readiness

Plan the Change

Anchor Change into Corp. Culture

The Corporate Excellence Division, using the EFQM model has identified several strategic initiatives in its journey towards excellence. These initiatives are aimed at standardising and optimising all activities related to people, operation and technology – a further step towards establishing benchmarks. These initiatives can be categorised into quality and change management initiatives. The goals and milestones are summarised below.

1 Quality Managment Initiatives Form a Powerful Coalition

2

Communicate the Plan

5

Build on the Change

Remove Obstacles

4

3

Create Quick Wins

• Pursue ISO 14001 certification

• OHSAS 18001 Certification

• Integrated Management System • One ISO 9001 Certification and Pursue Integrated Management System

82

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Several other initiatives such as the annual Employee Survey exercise and the launch of the GASCO ‘Ideas Oasis’ assist us in capturing employees’ feedback through formal (surveys) or informal (suggestion schemes) routes. These have delivered insights into the satisfaction levels of GASCO employees indicating that more than 96% are proud to work for GASCO. The last Employee Survey was conducted in March 2009 with a very good response rate of 70%. Responses fell under ten broad categories – Engagement, HSE, Execution, Customer Alignment, Strategy, Leadership, Achievement, Talent, Code of Conduct and Innovation. All categories received favourable scores above 70%. The results were reviewed by independent external adviser, Towers Perrin-ISR, the leading global firm providing employee surveys worldwide, who commented that, “These results are very positive and a credit to GASCO, they compare very favourably to Global High Performance companies around the world”. Going further, the leadership team has drawn mitigation plans to address the ‘ten least favorable responses’ . Innovation is rewarded through the ‘Ideas Oasis’ which replaces the Performance Enhancement and Reward Scheme (PERS). The flow of ideas is the same as PERS – an idea generated by an employee is passed to their line supervisor and then to a line manager for approval. The new system promotes a culture of employee empowerment, innovation and excellence by allowing amendments in the reward system and ease of replication once the idea is implemented in the originating division.


Change Managment Initiatives

• Operational Excellence • Investors in People

• Certified Change Agent Programme • Customer Service Excellence

• Certified Cultural Attribute • Succession Planning

Key events in 2009


Key events in 2009

Quarter

Month

Event

Quarter

Month

Event

Q1

March

GASCO amended & restated Joint Venture Agreement with Industrial Shareholders (ISH), was signed on 31st March 2009 effective from 1st October 2008.

Q3

August

Annual Ramadan Iftar party was held by GASCO.

August

On August 6th GASCO completed 5 million man hours without a Lost Time Injury.

September

GASCO was honoured for its Social Responsibility by Emirates Foundation.

October

Chinese delegation along with Economic and Commercial Attaché visited GASCO.

Q2

April

Asab plant staff participated in a two day ‘Inter Department Alignment Workshop’ on 22nd and 23rd April 2009.

April

First GASCO Administrative Professional Day was organised on 22nd April 2009.

April

Shareholders’ Assets’ Integrity Audit 2009 was completed.

October

Health campaign was held by GASCO at the Sheikh Khalifa Energy Complex.

April

On 5 April, Ruwais celebrated the shipment of 4000th ship (from Ruwais since start up of GASCO in 1980) by loading gas carrier ‘Al WUKIR’.

October

Water management study was undertaken by GASCO.

October

GASCO signed EPC contracts worth US $9 billion for IGD project.

May

83rd Board Meeting convened.

November

Organised National Day celebrations.

May

99th meeting of Board Advisory Committee convened.

November

IT exhibition inaugurated by GASCO CEO at Shaikh Khalifa Energy Complex.

May

GASCO won ADNOC HSE Awards for 2008, in the newly introduced category ‘Sustainable Development Award’ and the ‘Recognition of Group Company and Contractor Partnerships’.

November

Habshan Plant I in co-ordination with Red Crescent Society organised a blood donation camp at Madinat Zayed.

November

HSE seminar for the contractors was organised by GASCO.

GASCO organised the Singapore Trade Delegation Open Forum as part of the strategic partnership with key vendors, to share the latest development in technology and future trends in industry.

November

GASCO CEO's Cup cricket tournament was played.

November

All individual business units were certified to Quality standard: ISO 9001:2008. GASCO is the first among the OPCOs to achieve this.

November

GASCO awards EPC contract for Asab-3 project for a total price of AED 1.5 billion.

November

GASCO organised GCC Oil & Gas Materials Committee meeting in which knowledge about co-operation related to SCM, Inventory materials, saving time in extended shutdown and prevention of production losses was exchanged.

November

GASCO won the Silver Award (Manufacturing) of Sheikh Khalifa Excellence Award.

November

100th meeting of Business Advisory Committee was convened.

November

ELT workshop was conducted.

December

EPC contracts for the two Pipeline Projects of Thamama ‘C’ to Asab Lean Gas Pipeline and Nirogen Pipeline from Mirfa to Habshan were awarded.

December

Senior delegation of Qatar Petroleum visited GASCO for benchmarking studies.

December

Health campaign at Ruwais was organised with the theme ‘Take care of your back’.

December

GASCO 21 Golf Championship 2009 was held.

December

Commercial Division held a marathon for GASCO employees.

December

84th Board meeting convened.

86 May

May

A kick-off-meeting for the Habshan Gas Recovery Project was held on 28th May to activate the project.

May

Pipelines participated in the ‘Sas Al Nakhil Island Clean Up’ programme organised by CNIA and sponsored by Takreer, GASCO, ADNOC Distribution, Petroleum Institute and ADWEC.

May

ISO Management Representatives workshop was organised.

May

To re-energise the GASCO 21 Journey, the GASCO Leadership Team organised a GASCO 21 Change Agents’ Workshop to introduce the newly selected change agents to GASCO Journey Towards Excellence and steps needed to continue.

May

June

June


GASCO in co-ordination with Abu Dhabi Police and Michelin tyre manufacturer launched a campaign to improve road safety awareness amongst its staff. On World Environment Day, GASCO in partnership with the Environment Agency of Abu Dhabi and UNEP launched ‘Your Planet Needs You – Unite to Combat Climate Change – Paperless Day’ Campaign to reduce its daily paper consumption. Commercial Division hosted the Korean trade delegation as a part of the strategic partnership with key vendors to share the latest development in technology and future trends in industry.

Q4

87

Performance Snapshot


GRI Content Assessment Index Section

Focus areas (GRI)

GRI core indicators Areas

Energy & Environment

EN1, EN3, EN4, EN8, EN11, EN12, EN16, EN20, EN21, EN22, EN23, EN26, LA7

Units

2007

2008

2009

Energy & environment

Consumption of ground water

M3

200,000

250,000

295,200

Consumption of municipal/others

M3

2,000,000

2,005,000

2,012,000

Treatment and destination 1

M3

700,000

750,000

795,000

Treatment and destination 2

M3

400,000

450,000

500,000

Total GHG emissions

Million tCO2e

–

–

5.3

NOx

Tonnes

13,514

11,183

11,000

SOx

Tonnes

73,598

54,335

56,000

Flaring

MMSCFD

7.1

7.5

6.9

Non-hazardous waste

Tonnes

2,500

2,920

2,000

Hazardous waste

Tonnes

50

60

66

GRI Reporting Statistics

Total reportable injury rate

%

0.6

0.5

0.45

• Over 3,100 companies reported in 2008; 900 with reference to the Guidelines • 81% of FTSE 100 reporting (as of March 2007)

Lost time injury frequency

%

0.09

0.18

0.15

Number of fatalities

Number of incidents

1

1

2

Fatality accident rate

%

–

–

3.4

Lost time injuries

#

7

17

9

Exposure hours

Million hours

76.2

105

59.52

Workforce breakdown

Total man power

#

3474

3688

4001

Purchasing cycle time

Purchasing cycle

Pre-commitment days

41

46

32

Stakeholders, Employees and Employees and Efficient Systems

90

Material consumption, direct and indirect energy consumption, water consumption, CHG and air emissions, waste generated and waste water discharge, spills, safety related data

Details

Total workforce, employee turnover, training data, composition of governance bodies, serious disease management, incidents of discrimination, suppliers screenings

Water

LA1, LA2, LA8, LA10, LA13, HR2

About GRI

GHG emissions

NOx and SOx emissions

Global Reporting Initiative (GRI) – a multi stakeholder and independent institution whose mission is to develop and disseminate globally applicable Sustainability Reporting Guidelines. These guidelines are used by organisations for reporting on the economic, environmental, and social dimensions. GRI is the most widely used guideline globally and is a continually evolving barometer. More information on GRI is available at http://www.globalreporting.org

Reporting in Oil and Gas Sector

Wastes

Safety statistics

Over 20 companies reported. Participants include – BG Group, BP, Chevron, Exxon, Occidental, Petronas and Shell. GASCO and ADNOC are amongst the first of the National Oil Companies to report in the region.

Employee and stakeholders


91


Areas

Details

Number of LTPAs (commited)

Stock purchase

92

Direct material purchase

Inventory optimisation activities


Units

#

2007

78

2008

79

2009

80

Value of LTPAs (committed)

US $ million

22

27

29.4

Number of release orders

#

539

628

408

Value of release orders

US $ million

8.6

12.43

8.9

Value of total stock purchase

US $ million

18

29.94

18.08

Value release orders vs. value of total stock purchase

%

47

42

49

Number of LTPAs (committed)

#

31

36

39

Value of LTPAs (committed)

US $ million

1.6

7.2

6.3

Number of release orders

#

222

163

171

Value of release orders

US $ million

1.4

1.4

2.3

Value of total direct materials purchase

US $ million

51

65.23

56.12

Value release orders vs. value of total direct materials purchase

%

2.7

2.1

4.1

Shutdown materials / reservation review/challenge (avoidable purchase)

US $ million

0.36

0.7

0.3

Areas

Details

Units

2007

2008

2009

Project spares optimisation

Total savings

US $ million

39.8

156.7

144.1

Assets

Total assets

US $ million

7,117.80

8,626.10

Water Operating expenditure

Total routine expenditures

US $ million

390.8

504.6

573.2

Gross operating cost

US $ million

459.7

593.9

752.4

Net operating cost

US $ million

391.7

509.8

663.1

Total processing cost

US $ million

695.1

821.2

1,042.50

Estimated final CAPEX

US $ million

2,322.90

1,544.90

1,480.40

Total gas processed – feed gas (associated and non associated)

MMSCFD

4324

3677

3900

Total sales gas

MMSCFD

2736

2264

2450

Condensate

KBPD

180

151

170

Raw ethane

KT

1017

1065

1030

C3+ net productions

KT

5755

5636

5400

Sulphur (including Ruwais)

KT

1638

1371

1390

Sales gas distribution

MMSCFD

2733

2263

2450

Condensate shipments

MMB

66

55

62

Raw ethane

KT

1017

1065

1010

Production

Product distribution

10,549.50

Stock types reclassification (as per inventory policy) (avoidable purchase)

US $ million

0.65

0.61

0.61

C3+ shipments

KT

6206

5783

5400

Proposal for stock review

US $ million

0.25

0.71

0.36

Sulphur shipped from May 2009

KT

1638

1371

1216

Alternate products / brands identification

US $ million

0.4

0.11

0.02

Duplicate items verification

US $ million

0.99

0.44

0.77

Direct charge items against inventory

US $ million

0.27

0.02

0.03

Total avoidable ourchase

US $ million

2.92

2.59

2.09

93

94

About the Report


95

About the Report

Glossary of Terms ADCO – Abu Dhabi Company for Onshore Oil Operations

ADICOE – Abu Dhabi International Centre for Organisational Excellence ADNOC – Abu Dhabi National Oil Company AGD – Asab Gas Development

AIRMS – Asset Integrity & Reliability Management System ALARP – As Low As Reasonably Possible ATI – ADNOC Technical Institute

BAC – Board Advisory Committee BOD – Board of Directors

BOROUGE – Abu Dhabi Polymers Company Limited BSCFD – Billion Standard Cubic Feet per Day

CAMS – Competency Assurance Management System CAPEX – Capital Expenditure

CAS – Competence Assurance System CE – Corporate Excellence

CEO – Chief Executive Officer CGD – City Gas Distribution

CNG – Compressed Natural Gas

CNIA – Critical National Infrastructure Authority 96

CO2e – Carbon Dioxide Equivalent COP – Code of Practice

EAD – Environmental Agency of Abu Dhabi E&P – Exploration and Production

EFQM – European Foundation for Quality Management ELT – Extended Leadership Team

EPC – Engineering, Procurement and Construction ERM – Enterprise Risk Management ERP – Enterprise Resource Planning

ESSC – Environmental Strategy Steering Committee FEED – Front End Engineering Design FINCO – Finance Sub-Committee

GASCO – Abu Dhabi Gas Industries Limited GCC – Gulf Cooperation Council GDP – Gross Domestic Product GHG – Green House Gas

GOMES – GASCO Operations Management and Information System G-SPIR – GASCO Spare Parts Interchangeability Record System GTTC – GASCO Technical Training Centre H2S – Hydrogen Sulphide Gas

HSE – Health Safety and Environment

HSECES – HSE Critical Equipment and System HSEIA – HSE Impact Assessment

HSEMS – HSE Management System

ICPM – Institute of Certified Professional Managers IDS – Inventory Data Sharing

IGD – Integrated Gas Development Project ISH – Industrial Shareholders


About the Report ISO – International Organisation for Standardisation IT – Information Technology

JVA – Joint Venture Agreement

KPI – Key Performance Indicator KT – Kilo Tonnes

KWh – Kilowatt-hour

LTARP – Long Term Asset Replacement Plan LPG – Liquefied Petroleum Gas

LTIF – Lost Time Injury Frequency

LTPA – Long-Term Purchase Agreement

MAPP – Major Accident Prevention Programme

GASCO have been forerunners in the citizenship agenda. As a continuation of our journey towards sustainability and achieving our citizenship goals, this year we are publishing ‘Embedding Citizenship in the White Gold’. The purpose of the report is to demonstrate a balanced and reasonable representation of the Triple Bottom Line performance of GASCO. The target audience for the report is our core stakeholder group – our employees, shareholders and our community. This report is not intended for external publication. Any external publication or replication of any part of this report is unauthorized by GASCO. The report addresses the challenges that we have faced in our journey towards meeting our citizenship goals, the results of our past endeavours, our present plans and our future prospects. Materiality, accuracy and completeness have been the guiding principles in framing this report.

MMB – Million Barrels

MMBOPD – Million Barrels of Oil Per Day

The Reporting Boundary

MOPO – Manual Of Permitted Operations

The gas processing and NGL extraction operations take place at our desert plants: Asab, Habshan & Bab, and Bu Hasa. The processed products are then transferred to GASCO’s Ruwais Fractionation Plant, to other plants (condensate and sulphur to TAKREER – Ruwais and raw ethane to Borouge) and gas to industrial customers including Dubai through a widely spread network of pipelines (48 in number totalling over 2,300 kilometers in length).

MMSCFD – Million Standard Cubic Feet Per Day NGL – Natural Gas Liquids

NGO – Non-Governmental Organisation NGP – Natural Gas Project

NGV – Natural Gas in Vehicle

OAG – Offshore Associated Gas

OGD – Onshore Gas Development OPCO – Operational Company

OPEX – Operational Expenditures

PDP – Personal Development Plan

PERS – Performance Enhancement and Reward Scheme

Our operating facilities are primarily located in the Western Region of Abu Dhabi. We are currently in the midst of conducting a major expansion, have recently commissioned multiple facilities, and will continue to do so for several years. In the forthcoming financial year, we endeavour to include in the reporting boundary all divisions that become operational during the reporting year, and the significant impact these place on our financial statements. The report covers the following divisions:

PHSER – Project HSE Review

1) Asab 2) Bu Hasa 3) Habshan and Bab 4) Ruwais 5) Head Office 6) Pipelines Division

PMSC – Performance Management Sub-Committee

We have presented in the report, wherever possible, the performance of these divisions.

PI – Petroleum Institute

PRISM – Production Information and Shipping Management QRA – Quantitative Risk Assessment RAP – Risk Assessed Permit

The Report Content

RBI – Risk Based Inspection

The areas covered in the report are based on:

SCADA – Supervisory Control And Data Acquisition

• Goals that we have identified to address strategic objectives, which may impact our ability to deliver long-term value to our stakeholders.

RMC – Risk Management Committee SCM – Supply Chain Management

SMART – Specific Measurable Achievable Relevant and Time-Based SSC – Supply Sub-Committee SVP – Senior Vice President

• Relevant Performance Indicators and sections are in accordance with Global Reporting Initiatives (GRI) - G3 Sustainability Reporting Guidelines.

TAKREER – Abu Dhabi Oil Refining Company TPD – Tonnes Per Day

TRIR – Total Recordable Injury Rate TSC – Technical Sub-committee UAE – United Arab Emirates UN – United Nations

UNEP – United Nations Environment Programme

UNFCCC – United Nations Framework Convention on Climate Change USD – United States Dollars VP – Vice President

Your Feedback We look forward your feedback on this report and on our performance in citizenship priority areas. This is vital for our understanding of your expectations, and the improvement of the performance and reporting of our sustainability performance. For any additional information, you can also visit our website (www.gasco.ae). You may also contact our representative, Mr. Ahmed Tamim Al Kuttab ([email protected]), for any queries regarding the report and its content, or for further information.

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Mission Growth Corporate Excellence Vision

Energy

Environment

Performance

Responsibility Employee

Sustainability

Efficiency

Community

lf

u G n a i b Ara

Head Office Sheikh Khalifa Energy Complex Abu Dhabi City

Ruwais Plant

Habshan and Bab Complex

Bu Hasa Plant


Pipelines

Asab Plant

Recycled paper • Reduces water pollution by 35% • Reduces air pollution by 74% • Eliminates many toxic pollutants Each ton of recycled paper can save • 17 trees • 380 gallons of oil • 3 cubic yards of landfill space • 4000 kilowatts of energy • 7000 gallons of water This represents • 64% energy savings • 58% water savings • 60 pounds less of air pollution Please Note: These recycling facts have been compiled from various sources including the National Recycling Coalition, the Environmental Protection Agency, and Earth911.org.

This report is printed on Neenah Environment made from 100 percent post-consumer waste. All recycled papers from Neenah Paper contain a minimum of 30% post-consumer recycled fibre. Papers made with 100% post-consumer recycled fibre are available in the four popular finishes of the CLASSIC® Brands, ENVIRONMENT® Papers and SUNDANCE® Papers.

Abu Dhabi Gas Industries (GASCO) P. O . B o x 6 6 5 Abu Dhabi, United Arab Emirates Te l : + 9 7 1 2 - 6 0 3 0 0 0 0 www.gasco.ae Embedding Citizenship in the White Gold

GASCO Corporate Citizenship and Sustainability Report - Global

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