2009 Corporate Sustainability Report

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  • 1. 2009 Corporate Sustainability Report

2. SCOPE OF REPORTThe principal facilities and assets operated by Hessperformance data for three key joint ventures not under Corporation and its subsidiaries during calendar year Hess direct operational control but where we have 2009 are included in this report. Environment, health,signicant inuence: the HOVENSA Renery in the U.S. safety and social responsibility (EHS & SR) data refer to Virgin Islands, the Joint Development Area (JDA) in gross gures from operated facilities as well as for third- Malaysia/Thailand and SonaHess in Algeria. party activities where Hess has overall responsibility as specied in contractual arrangements. To facilitate comparisons with prior years reports, data from HOVENSA has been presented separately. The information provided in this report has beenSonaHess and JDA performance data are included in guided by the Global Reporting Initiatives (GRI) G3Hess totals. Also, some quantitative EHS performance Sustainability Reporting Guidelines. To ensure oil anddata have been reported on a normalized basis to gas sector specic coverage, we have also followed thefacilitate year-on-year comparisons. joint International Petroleum Industry Environmental Conservation Association and the American Petroleum Net equity greenhouse gas (GHG) emissions have been Institutes Oil and Gas Industry Guidance onreported for operations in which Hess had an equity Sustainability Reporting. interest but that were operated by other companies. With the exception of net equity GHG emissions, this Report content was selected based on GRIs principles report does not include EHS & SR data on assets and guidance. Materiality, based on applicability, degree operated by other companies in which Hess has an of impact and risk, as well as stakeholder interest, wasequity interest. considered for each GRI indicator. Where an indicator was deemed to be of signicant materiality, reliableThe quality of the information and data included and veriable quantitative data have been provided to in this report was reviewed by ERM Certication the extent practicable given our current corporate data and Verication Services (ERM CVS), an accredited collection and aggregation systems. independent third party. ERM CVS verication statement has been included at the end of this report. The GRIs Reporting Guidance for Boundary Setting ERM CVS also provided an opinion on the self-declared was applied to determine the inclusion of operational GRI Application Level.Report Application LevelsCC+ B B+A A+Mandatory SelfReport Externally AssuredReport Externally AssuredDeclared This is our Communication on Progress Third in implementing the principles of the Party United Nations Global Compact.OptionalCheckedReportGRIWE SUPPORTWe welcome feedback on its contents.Checked Note: Following a review by ERM CVS, our external verier, Hess is self-declaring a GRI Application level of A+ in conformance with the GRI Sustainability Reporting Guidelines. On the cover: Student at Hess model school, Equatorial Guinea 3. TABLE OF CONTENTS20 Safety Performance02 28Message from Environmentalour Chairman Performance04 46Accomplishments,Challenges and GlobalOpportunitiesWorkforce06 54 CommunityOur Global and SocialReachPerformance10 60How We Products andOperateServices 66 Performance Data 71 Verification Statement68 GRI Content Index72 Awards and Recognition 4. MESSAGE FROM THE CHAIRMANJohn B. Hess Chairman of the Board and Chief Executive OfcerIn 2009 our company delivered strong performance inin deepwater drilling standards and oil spill response a challenging environment, marking further progress in are required. While our company believes we have our strategy to build a company that will sustain long extremely high performance requirements for the safety term protable growth while making a positive impact of drilling operations, we and our industry need to do on the communities where we do business. Hess is all we can to learn from this disaster and to take the committed to help meet the worlds demand for energy necessary precautions to ensure such a tragedy never in a way that protects the health and safety of ourhappens again. stakeholders and respects the environment.While we have a huge challenge ahead of us in A critical challenge for our company and our industry is meeting future energy demand, we must also address that we expect demand for energy to rise signicantlythe growing threat to sustainable development posed in the years ahead. Currently 85 percent of the worldsby climate change and reduce CO2 emissions to leave energy comes from hydrocarbons: 35 percent oil,a cleaner environment for future generations. Hess 30 percent coal and 20 percent natural gas. A keysupports U.S. climate change legislation that treats driver of energy demand growth is world population,all affected parties equitably and in a cost effective estimated to increase from 6.8 billion today to 9 billionmanner. We believe that the most equitable way to by 2050, largely in the developing countries of theimplement U.S. climate change legislation is to impose world. With a corresponding rise in living standards,a carbon tax. We also support long term international hydrocarbon energy will be required to support collaboration for moderating energy demand by economic development. While renewable energy will be implementing efciency standards and diversifying needed and should be encouraged to help meet futureand increasing energy supply, including oil, natural energy demand and contribute to reducing our carbongas, cleaner coal, nuclear and renewables such as footprint, it currently does not have the scale, timeframe wind, solar and biofuels. or economics to alter materially the growing demand for hydrocarbons. As a consequence, more investment is A portion of our investment strategy includes moving required to nd and develop hydrocarbon resourcesquickly to access and develop the worlds abundance as well as to improve efciency in their use so that weof unconventional hydrocarbon resources through reduce the risk of escalating energy prices that signicant initiatives in the United States and would threaten world economic growth.international areas. Another component of our strategyincludes an investment in the construction of an Until the recent tragic accident in the deepwater Gulf advanced technology natural gas powered electricity of Mexico, our industry had an excellent record globally generation plant based in New Jersey that will provide in safety performance and environmental protection.power to New York City. We are also pursuing the With the devastating loss of life, ecological damage tocommercial development of hydrogen fuel cells for the Gulf coast and severe economic impact on local use in safe, clean and efcient transportation systems communities, it is clear that signicant improvementsthrough our Nuvera Fuel Cells subsidiary. 2 | 5. HESS CORPORATION PERFORMANCEIn 2009, with a strong focus on learning and The global reach of our operations demands ourdevelopment, more than 22 percent of professional commitment to key voluntary international initiatives employees assumed new roles within the company. and standards with respect to human rights, A core part of our progress is a social responsibility environmental protection and nancial transparency. strategy that is guided by our Values, Code of Conduct, We support the Extractive Industries Transparency policies and management systems that protect our Initiative, the Voluntary Principles on Security andemployees, customers, host communities and the Human Rights, the United Nations Global Compact,environment. Before the company makes a major new the Universal Declaration on Human Rights and investment, we conduct an Environmental and Social the International Labor Organization Declaration on Impact Assessment to understand the potential effects Fundamental Principles and Rights at Work. In 2009of our operation. We continue to pursue a focused we strengthened implementation of the Voluntary social responsibility strategy centered on health and Principles, as well as related commitments to human education through partnerships with host governments rights and transparency.and leading non-governmental organizations to develop sustainable programs. Hess has many types of stakeholder engagements that shape our business environment and inuence our OUR COMMITMENT business success. Our objective is to be transparent andWe are proud of our achievements but aware that engage with our stakeholders on their issues of concern we face signicant challenges, including political in a manner that is both constructive and productive. instability, human rights and environmental concerns in certain areas where we conduct operations; national In 2009 our safety performance was the best everand international climate change measures; demand since we began collecting data as we reduced ourfor affordable, clean and renewable energy; global workforce recordable incident rate by 27 percentcompetition for skilled and experienced workers and and experienced zero fatalities. This progress is a the risk of technical obstacles in nding and developing result of the commitment of our entire work force and hydrocarbon reserves. the success of our management systems. We remain focused on continuous improvement in this area. In the coming years, we will continue to pursue our strategy of sustainable growth targeting rst quartile The Hess Leadership Team endorsed a comprehensive operating performance across our business. Our Climate Change Strategy, reviewed with the Boardcompany will do its part in helping to build a balanced of Directors, for managing our carbon footprint. This and comprehensive approach to energy security and strategy included a ve year target for a reduction of 20 protection of the environment to ensure sustainable percent in the companys greenhouse gas emissions development. We are proud of the progress we have intensity. We made substantial progress towardmade in the growth of our company and we recognize achieving that target in 2009, reducing emissions that success is a long journey. With the continuing intensity by 11 percent against the 2008 baseline.support of our customers, employees, investors, As part of our strategy, we also committed to reducingbusiness partners and communities where we do by 50 percent the combined aring emissions at ourbusiness, we are condent that we are building a operations in Algeria and Equatorial Guinea over vesustainable enterprise that will make a positive impact years. In 2009, we successfully reduced the combinedon the world around us. aring at these operations by 45 percent. In addition, our Climate Change Network is implementing a corporate-wide Energy Efciency program, which we anticipate having in place by next year, along with performance targets.Hess is dedicated to attracting, energizing, developing and retaining a highly talented diversied workforceJohn B. Hess that is capable of delivering strong business results.Chairman of the Board Women comprise 40 percent of our global workforce.and Chief Executive Ofcer | 3 6. PERFORMANCE ACCOMPLISHMENTS, CHALLENGES AGAINST AND OPPORTUNITIES OUR VALUESACCOMPLISHMENTSMETRICVALUE CREATION Strong nancial and operating $740 million net income;performance in a challenging7 percent production growth.economic environment. Increased comprehensiveness and GRI G3 A+ application level,quality of sustainability performance strong sustainability rankings.disclosures.SAFETY & HEALTH No fatalities; best-ever workforce safety No fatalities; 0.82 employee and 0.64performance; no catastrophic incidents. workforce recordable incident rates;site-specic targets for preventivesafety actions. Focused efforts to improve employee Employee participation in health riskwellness through prevention.screening activities. Established ve-year, 20 percent GHG Achieved 11 percent GHG intensity ENVIRONMENTintensity reduction target; reduced directreduction toward 20 percent ve-year target.GHG emissions and aring. Reduced aring in Equatorial Guinea andAlgeria by 45 percent toward 50 percentve-year are reduction target. Proactive programs implemented to No oil spills greater than 50 barrels; 80minimize oil spills.percent reduction in spill volume.PEOPLE Upgraded Global Talent Management and 22 percent professionals in new roles;Succession Process. 34 percent increase in mentoring;35 percent women/minorities in U.S.leadership program. Increased number of positions held by 60-90 percent nationals in majorforeign nationals.overseas operations.TRANSPARENCY & Human Rights policy developed with Human Rights policy approved and HUMAN RIGHTS stakeholder input; risk assessment, disseminated; site visits, training in threetraining conducted in Asia Pacic.countries. Organized industry training session for Actively promote Extractive IndustriesCivil Society members of Equatorial Transparency Initiative (EITI) implementationGuinea EITI Commission. in countries where Hess operates. COMMUNITY & SOCIAL Equatorial Guinea education program Nearly 1,200 teachers trained; PERFORMANCEmet program objectives. improved data informs planning;40 schools refurbished. Social Investment strategy more aligned New Social Responsibility Policywith business strategy, focused onand Spending Guidelines developededucation and health. and issued. 4| 7. CHALLENGES OPPORTUNITIES Execute strategy to generate sustainable E&P growth Attractive portfolio of investment opportunities to deliver and maximize M&R current returns. sustainable growth in reserves and production. Continue to improve global data collection and quality Continue to address stakeholder expectations. control at the eld level. Improve organizational competence through training. Continue to improve safety culture and management Continue to mature culture of safety excellence. systems to reduce incident risks. Achieve aspirational goal of zero safety incidents. Provide global wellness program sensitive to local cultures. Reduction in health risks by increasing awareness, preventative screening and changes in behaviors. Capital investment that achieves GHG emissions Continue mitigation through energy efciency, are intensity reductions. and vent minimization and increase renewable and alternative energy. Maintain progress and prevent isolated incidents. Continue to reduce spill frequency and volume. Prepare employees for advancement; recruit skilled Continue to build globally diverse workforce as we grow. professionals; integrate new hires. Reduce reliance on expatriates around the world. Recruit and develop local talent for leadership roles. Ensure broad knowledge and best practice companywide; Assessment and training scheduled for Africa in 2010. training to encourage supplier and contractor respect for policy. Encourage Equatorial Guinea to reapply for EITI Build on Equatorial Guinea p...


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