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From Compliancy to Sustainable Strategy
Agenda
2 2 2
Introduction
Seismic: A Key Technology for E&P sector
CGGVeritas ESG issues
Conclusion: From Compliancy to Sustainable Strategy
Annexes
Introduction What are seismic technologies?
3
Seismic technologies image the “invisible”
Equivalent of the ultrasounds used for medical imaging
Using acoustic energy and analyzing reflected waves in water and on land
Seismic provides a visualization of the sub-surface
In multiple dimensions: 2D, 3D
Time monitoring with 4D
Contributing to static and dynamic modeling of hydrocarbon reservoirs or mineral deposits
Only technology which provides wells measurements
Can be used for other fields like water search, CO2 capture and storage, etc..
BroadSeis Technology to image complex geologies
Imaging a reservoir
CGGVeritas: A Fully Integrated Seismic Provider
Equipment: Sercel, the industry leader
Leadership based on technology and installed base
Excellent financial performance expected to continue
Services: a leadership position in high-end technology
Marine: a high-end BroadSeisTM fleet well positioned in the progressively strengthening market
Land: a leadership position in select markets: Middle East, Arctic and Shallow Water/OBC
Multi-client: a recent high-quality 3D library offshore in the GoM, North Sea and Brazil and onshore in North American shale plays
Processing: a unique technology leadership position
4
Delineation Exploration Production Development
12%
15%
$3.2B
28%
31%
14%
2011 Revenue Breakdown
5
Breakdown of Revenues By Clients Breakdown of Revenues By Region
Key 2011 Financial Figures
Revenue : $3.2 billion
Opinc : $210 million
EBITDA : $852 million
Capex : $626 million
Employees : 7 264 worldwide
Group Net debt at $1.411 billion
14%
28%
31% 36%
22% 20%
22%
23% 20%
12%
45%
Majors
National Oil Companies
Small/Medium Independents
Large Independents
Agenda
6 6 6
Introduction
Seismic: A Key Technology for E&P sector
CGGVeritas ESG issues
Conclusion: From Compliancy to Sustainable Strategy
Annexes
7
778
634
Seismic: A Key Technology for E&P sector
Exploration is increasingly difficult
End of “easy oil”: challenging environments increase the cost of exploration
Mounting public pressure to conduct more responsible, well-controlled and risk-free exploration
New “sensitive” exploration areas
Post Macondo new regulation framework
Public Image & Reputation
Investor community
Strong E&P challenges
Reserve replacement remains low
Reservoirs continue to mature
As Complexity Increases, US Wells Are Becoming Significantly More Expensive to Drill
Source: EIA, Morgan Stanley Research
Source : IEA reports Excluding : Iraq, Nigeria and Venezuela.
Global OPEC spare capacity
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Seismic: The Benefits of Seismic Technology for Exploration
Lowering the cost of exploration
Exploration Success Rates: from 10% to >50%
Reducing drilling costs
While mitigating drilling risks
Identifying hazards
Assessing uncertainties improves safety
Source : Barclays Research
(1) Most important technologies influencing E&P business (5 y av. of survey answers)Most important technologies influencing E&P business
Source: Barclays Research
Global Drilling results vs Cumulative 3D Seismic
De-risking the exploration & drilling operations
Source: Apache JP Morgan Investor Meeting, December 8th 2010 Apache SPE Business Development Group presentation 19th January 2011
Limiting environmental footprint
Contributing to reduce our clients’ footprint
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Seismic: The Benefits of Seismic Technology for Production
Sustainable management of Reservoirs
Optimizing Reservoir Production
Permanent Monitoring of Reservoirs
Extending the life of field
Limiting environmental footprint
Identifying suitable CO2 storage sites
The Dukhan Field characterization to optimize the
reservoir production
IEA Roadmap for Carbon Capture & Storage by 2050
Improving the sustainability of reservoirs
Key issues
Unconventional gas is required to offset declining conventional resources
European and Asian economies are turning to unconventional gas to reduce current dependence on gas imports
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Leading National Shale Gas Market
Source: Vision Gain 2011
Integrated solution in the Shale Gas Exploitation
Showing optimum drilling & fracturing process with reservoir characterization
Seismic: The Benefits of Seismic Technology for Unconventional Resources
A Run for the Arctic resources
Global warming is opening new business and economic opportunities
Potential of 30% and 13% worldwide reserve in oil and natural gas
84% of this potential located in the Arctic Sea
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A very fragile “ecosystem”
No international legal framework
4 million inhabitants and 30 ethnic minorities
Unique biodiversity
CGGVeritas: 40 years experience in North America & Arctic Environment
3 “ice vessels”, 2 meeting NDV clean notation
Environmental Risk Assessment
Apply Industry Standard for Marine Environment Protection
Community Relationship Management Plan (CRPM) to respect the population’s rights
International Zones of the Arctic
Seismic: The Benefits of Seismic Technology for New Sensitive Exploration Zones
Agenda
12 12 12
Introduction
Seismic: A Key Technology for E&P sector
CGGVeritas ESG issues
Conclusion: From Compliancy to Sustainable Strategy
Annexes
Sercel
« Floating » Plant issues
CGGVeritas ESG issues: Long Term Management of the Complexity of our Diversified Activities
Marine Acquisition Land Acquisition Processing
« Construction » issues
« IT business » issues
« Industrial » issues
- HSE
- Environmental impact - Dialogue with communities
- HSE
- Dialogue with communities
- Development of dedicated centers
- Energy Efficiency - Environmental footprint of plant sites/Eco-design
- HSE & quality Operations Risk Management
Local & Environmental Impact
HR/Innovation - BroadSeis - EmphaSeis - Geovation - Solid Streamer
- Talent retention - Local Content - Skills & competenties - Technology skills
Addressing specific issues
Addressing corporate issues
Financial & Communication Risks
Integrated Management System supported by a dedicated organization
120 correspondents across the world
14
Regular Monitoring of Local Practices through audits
HSE audits including Social Responsibility issues since 2010
Proprietary Real Time Web based Reporting
Continuing Training program
HSE policy communicated to all stakeholders
Organized by CGGVeritas University and on sites
Performance
2011: LTIF 0,44/TRCF 3,18/ SR 0,01
2012 Objectives: LTIF <0,30 / TRCF <2,70 / SR:<0,005
Stringent HSE standards: Key for Operational Success
134
458
7 64
48 11 21
148
532
2
101 63
41 27
118
446
0
90 90
26 59
0
100
200
300
400
500
600
2009
2010
2011
HSE meeting
Marine – Emergency Prepardness Training
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Structured and disciplined approach to assessing and managing the uncertainties that the Group faces
Each risk is linked to a corporate governance issue and monitored by its dedicated Board Committee
Specific tools to identify the main risks of the Group: Group Risk Matrix, Human Risk Matrix and Scorecard Systems (Country and Subcontractors Risk Management) including SD issues
Risks Assessment and Management are part of our activities’ project management
Systems of Audits including SD issues to monitor our Entreprise Risk Management
Risks Identification
Operational
Financial
Communication
Technologic
HR
Governance and Board of Directors
HSE/DD Committee
Audit Committee
Technology Committee
Appointment and Remuneration
Committee
Evaluation et Gestion des Risques
« Management System »
Risk Management: Identify, Manage and Mitigate risks
Local employment & Local purchase
Favoring local employment especially for long term projects
Purchasing Code of Conduct
HSE Training
Sharing of skills and know-how
Long-term partnerships with our local JVs
16
Local Commitment for the Economic Development of the « hosting » Countries
Community Relationship Management Plan (CRMP)
Identification of our activity’s social impact on local communities
Use of tools to “map” local stakeholders and to open a dialogue with them
Development of indicators to monitor our social performance
Example of a Communication to inform the communities of CGGVeritas operations
Examples of local employment
Land operations in 2011
Permanent operations
Peru: 1547 vs 10 expatriates
Egypt: 520 vs 30 expatriates
Thailand: 800 vs 10 expatriates
China: 99%
Australia: 100%
Angola: 76%
India: 95%
Argentina: 100%
Brazil: 69% Mexico:83%
Norway: 93% UK: 98% Canada: 99%
USA: 98% France: 98%
Environment Policy
Tailored Environmental Risk Assessment &
Environmental Management Plan
Promote environmental best practices
Train, inform and mobilize employees
Environmental criteria included in the product development cycle
Technology innovation to produce eco-friendly equipment
“Product end-of-life” recycling offer for clients
17
Environment & Biodiversity Impact: Going Beyond Regulation
Mitigation of transient disturbance
Minimizing soil and seabed disturbance
Monitoring fauna’ displacements and change of behaviour patterns
Joint Industry Program to address knowledge gaps on E&P offshore’s impact on marine life
Marine Mammal Observer
Oil Spill Prevention in Alaska
Marine: Fleet Upgrade & Future Outlook
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Viking Vantage
10 streamers
Viking II
8 streamers
Amadeus
2 to 4 streamers
Princess Pacific Finder
2/3D
Vessel Profile
2 New X-Bow vessels meeting DNV-Clean Notation
Average age of the fleet reduced to 10,5 years vs 18 years
All 3D high capacity vessels equipped with solid streamers by the end of June 2012
89% use of marine diesel oil
Compliant with international convention MARPOL (concerning sea pollution)
Permanent installation on board to treat water and to separate wastes
Oceanic Endeavour
Geo Voyager
Alizé
Challenger
Symphony
Vision
12+ streamers
Oceanic Phoenix
Oceanic Vega Vanquish
Oceanic Sirius Champion
Creation of CGGVeritas
Wide Azimuth Acquisition
Long Offset Marine Acquisition
Digital Innovation
1930 1940 1950 1960 2020 1970 1980 1990 2000
Processing on Micro
Sercel 408 2D Innovation
V1
Kirchhoff PSDM
3D SRME/CBM
BroadSeis
RTM 3D Gather
HPVA
Sercel 428
2010
Nautilus
Sentinel
Reflection Seismic
3D Innovation
Sercel 388
Innovation: Human Capital
People: Key success driver
81% of senior executives and engineers in the Services
Promotion of « experts »
Participation in educational programs organized by SEG and the EAGE
Sponsorship of geophysical projects with a socially responsible content carried out by students all over the world
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Innovation: Human Capital RH priorities: Attract and retain talents
Recruitment: long-term relationships with schools and universities worldwide
Significant intern mobility opportunities
Identification of « key potentials »
Competitive remuneration based on an average of competitors remuneration and Energy sector
Training: CGGVeritas University promotes individual development and professionalism
Social Dialogue
Worldwide commitment to ensure the representation of employees and the respect of non-discrimination
Regular Employee satisfaction survey
CGGVeritas University Centers across the world
Integrity and Commitment
Our focus on performance and passion for innovation are powered by people and delivered with integrity
Promoting best practices inside the Group
E-learning sessions of our Code of Ethics and our Business Code of Conduct
CGGVeritas celebrates its 80th anniversary in Perth
Agenda
21 21 21
Introduction
Seismic: A Key Technology for E&P sector
CGGVeritas ESG issues
Conclusion: From Compliancy to Sustainable Strategy
Annexes
We Apply our own Standards Based on the Industry Standards (OGP and IAGC)
22
USA/GOM Mitigation Measures
-Observer Requirement: 2 MMO -Required Observation : 30 min -Source Exclusion zone: 500m -Ramp up Operations: Yes but not at night -Night-time Source use: Yes -Use of Passive Acoustics: Encouraged
Example: Regional Marine Mammal Mitigation Guidelines Implemented During Seismic Surveys: Some countries have defined Guidelines and others don’t: problems of non consistent regulation
USA/GOM Mitigation Measures
USA/GOM Mitigation Measures
-Observer Requirement: independent MMO -Required Observation : 30 min -Source Exclusion zone: 500m-1000m -Ramp up Operations: Yes -Night-time Source use: Infra-Red binoculars -Use of Passive Acoustics: Not required
Australia Mitigation Measures
USA/GOM Mitigation Measures
-Observer Requirement: 1-2 MMO -Required Observation : 30 min -Source Exclusion zone: 500m -Ramp up Operations: Yes -Night-time Source use: Permitted -Use of Passive Acoustics: During hours of darkness, or low visibility
UK Mitigation Measures
Our Group Standards
-Observer Requirement: 1-2 MMO -Required Observation : 30 min -Source Exclusion zone: 500m -Ramp up Operations: Yes -Night-time Source use: Permitted -Use of Passive Acoustics: Integration on several vessels
23
We Launch Initiatives to Go Beyond Regulation
Marine: Reducing Fuel Consumption
Evaluating the potential of an organic additive X-Bee
Land: Taking into account the operation
environment
Desert Environment: Reducing the water consumption by installing smart grid and raising employees and local people awareness with posters
Forest Environment: Respecting the food-chain law by designing non-straight seismic lines and by replanting trees
Processing: Reducing the Use of Air
Conditioning
Use of “oil bath” to cool down the computers
Eco-cool free-air cooling systems
Protect the “hosting countries” wealth
Participation of Ethnologists and Biologists to our surveys
Closing a camp: Erase our footprint
Our SD strategy based on 80 years of experience is recognized by clients, local population, employees and investors….
24
Conclusion
We are committed to respect our sustainable roadmap in reducing our footprint and going along with our clients to develop a more responsible E&P activity
Agenda
25 25 25
Introduction
Seismic: A Key Technology for E&P sector
Our ESG issues
Conclusion: From compliancy to sustainable strategy
Annexes
Annexes
26
1. Seismic Equipment & Services
2. Contract Drilling 3. Drilling-Related Products & Services
4. Formation Evaluation
5. Completion & Stimulation Services
6. Infrastructure Installation
7. Production & Well Maintenance
8. Oilfield Equipment
9. Logistics
-Land & Marine data acquisition -Data Processing
4% of E&P budget ($16bn)
Summary of the Oil and Gas Field Development Lifecycle
27
Annexes Sustainable commitment history
UN Global Compact member
Creation of
HSE & SD Committee
2010 2011 2012 2009 2008 2007
Creation of
Ethics Committee
Business
Code of Conduction
Launch of the 1st SD report
3rd Communication On Progress
1st Communication On Progress
2nd Communication On Progress
Listed on DJSI, Ethibel and ASPI
1931
Foundation
of CGG
CGG became CGGVeritas
