In Kurdistan in 2014

  • US$6 million paid to the Kurdish Regional Government as taxes and community and development fund contributions
  • 3.63 Total Recordable Injury Rate (TRIR) in 2014, a decline from 5.28 in 2013
  • 19 community development projects and in-kind donations to improve sanitation and water supply, power supply, sports and school facility improvements were completed
  • US$223,000 spent on community development projects and donations, including a contribution of US$70,000 to support those displaced by conflict in the region
  • 100% of new personnel on site in 2014 were Kurdish, hired through Oil Search's local Employment Committee - a committee of local community representatives.

Overview of operations in 2014

Optimising our exploration portfolio is a key element in Oil Search's growth strategy.

The Company's exploration programme for the potentially large Taza oil field continued in 2014. A comprehensive appraisal programme was undertaken comprising the drilling of two wells, Taza 2 and Taza 3 as well as planning for drilling at a third, Taza 4. The programme also included conducting a 3D seismic acquisition programme comprising 630 square kilometres – the largest in Kurdistan.

In the second half of 2014, the Region's dynamic security situation caused some interruptions to Oil Search’s ability to deploy people, equipment and materials to operations in Kurdistan. In August 2014, the decision was made in consultation with Kurdistan’s Ministry for Natural Resources to temporarily suspend drilling at Taza 2 and operations recommenced in October 2014.

Security at Oil Search operations in the area was adjusted in response to frequent threat assessments that informed the implementation of enhanced security controls, travel restrictions and response preparedness. An intelligence-led approach informed the Management Team's decision making during this challenging period.

Health, Safety and Environment

During the year, social and environmental assessments and baseline investigations were performed at the Taza exploration block in preparation for ongoing activity. \u00a0The outcomes of these enable Oil Search to understand and manage potential social and environmental impacts associated with a changing scope of activity. It will inform monitoring programmes, augment the Company's existing social and environmental baseline information and address future regulatory requirements.

As a business stakeholder representative, Oil Search participated in consultation conducted by the Ministry of Environment towards the creation of Environment Impact Assessment, waste management and abandonment guidelines.\u00a0\u00a0 During the year, Oil Search also commenced monthly reporting of environmental and safety key performance indicators to the Ministry of Natural Resources.

A dedicated Health, Safety and Environment Manager was added to our team in Kurdistan in 2014 to develop and implement health, safety and environmental systems and processes. Specialists from our PNG Health Services team moved across to help set up health systems and processes.

Sustainable development

Our sustainable development activities are one tangible way in which we can demonstrate our commitment to social responsibility - captured in Oil Search's company vision. Oil Search's sustainable development approach considers community development, local business development and developing local employees.

The focus of our community development approach in Kurdistan is appropriate to the early phase and scale of our activity and determined by community need, request and consultation. Our activities are mostly directed towards improving: water supply, education, and healthcare facilities.

During the year, Oil Search completed 19 community projects and in-kind donations in the areas where we operate, directed towards our development priorities.

These included:

  • The refurbishment of the Zinana Medical Clinic
  • Construction of new classrooms at the Zinana Senior and Lufti Agha Primary Schools
  • Supply, installation or maintenance of water tanks or well pumps
  • Donation of various items to local community institutions, including desks, whiteboards, and sports equipment to schools and generators to police stations.

Also in 2014, the Company investigated a larger scale agricultural project for potential delivery as our appraisal activities progress. This project would assist improve local agricultural techniques and productivity through a combination of education and provision of higher yielding seed.

The unrest caused by Islamic State activity in the region has created a significant humanitarian crisis in Kurdistan. Oil Search contributed US$70,000 to the Rise Foundation in 2014 under the Kurdistan Oil and Gas Humanitarian Initiative (KOGHI). This contribution helped improve the lives of children in two large refugee camps by funding recreation activities for the younger residents, including art expression, and youth social support services. Another donation of $100,000 in 2015 will help fund refugee support programmes by the Rise Foundation and Kurdistan Save the Children.