© 2012 Chevron

The Gorgon Project: A New Paradigm in Quarantine Management

© 2012 Chevron

Gorgon Project Overview

Joint Venture Participants – Chevron (~47%)

– ExxonMobil (25%)

– Shell (25%)

– Osaka Gas (1.25%)

– Tokyo Gas (1%)

– Chubu Electric Power (0.417%)

Project Development Plan – 3 x 5 MTPA LNG trains

– A domestic gas plant with capacity of 300 terajoules per day

– LNG shipping facilities to transport products to international markets

– Reservoir greenhouse gas management via CO2 injection project

© 2012 Chevron

Challenging Regulatory Approval

EPA Report 1101 (2003) rejected the development proposal but advised government it may consider approving Gorgon if we: – Develop a set of standards for acceptable risks to conservation values of

BWI

– Involve independent technical experts

– Included a high level of community input

– Expect to set new benchmarks

– Significantly go ‘beyond best practice’

© 2012 Chevron

Role of Environmental Protection Authority (EPA)

EPA Report 1323 (Sept 2009) stated: ‘ …. likely to be world’s best practice and therefore it is unlikely to be

possible to recommend additional practical controls beyond that system.’

© 2012 Chevron

QMS Risk Assessment Process: Risk Definitions

Infection Survival Detection Eradication L Infection is extremely remote, highly unlikely

Cannot survive Virtually certain to detect early enough to consider eradication

Virtually certain to eradicate without significant impacts

1

Infection is remote, unlikely

Highly unlikely to survive

Very high likelihood of detection early to consider eradication

Very high likelihood of eradication without impacts

2

There is a slight chance of infection

Unlikely to survive

High likelihood of detection early to consider eradication

High likelihood of eradication without significant impacts

3

4-9

Infection will occur continuously

Will definitely survive

Cannot detect early enough to consider eradication

Will not eradicate 10

© 2012 Chevron

Establishing Standards for Acceptable Risk

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Risk assessment model - QHAZ

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Pathways and the Risk Scores

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What was the Plan?

IMEA

PBA

QHAZ

Barriers Quarantine Compliance Procedure

Specifications

Checklists

Guideline

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Structure of the QMS

Management measures Procedures, specifications

checklists and plans

Identify issues Risk assessment

i.e.IMEAs, PBAs, QHAZ

Communication Internal, external and

management of change

Monitoring and audits Environmental & Procedural

Monitoring and 3-Tier auditing

Corrective action Improvements to specifications,

procedures and guidelines

Management review Assessments, audits,

monitoring and expert advice

Capacity Building Education, awareness

and training

Policy

Objectives, strategy

& actions

Performance commitments

Improvement program

Roles and responsibilities Culture, work force participation

and delegation framework

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Eliminate NIS Inspect

Custody Detect

Monitor and eradicate

Protect

EFFORT COST

QMS Focus

Quarantine Continuum

© 2012 Chevron

FID to present – normalized per 10 000 tonnes

12

0

1

2

3

4

5

6

0

10

20

30

40

50

60

70

Intercepts

Incidents and Intercepts per 10,000 Freight Tonnes FID - February 2013

Supply ChainIncidentsIntercepts

© 2012 Chevron

Have we been successful?

We have funded the largest single biosecurity initiative in the world

We have managed to attract the most competent biosecurity workforce from around the world

We have implemented a comprehensive system

We have set numerous new benchmarks

We have gone significantly beyond best practice

We have not introduced a non-indigenous species to Barrow Island

By any measure, we are successful

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© 2012 Chevron

Quo vadis?

What was/is the role of the State in this benchmark (and the impact on the economy)?

There can be no doubt that Chevron has ‘set a new benchmark’ and has ‘gone beyond best practice’

One can argue that these represent ‘aspirational goals’ and the State used it authority to steer Chevron in this direction

It is now rational for Chevron to expect the State to strive to attain this same standard/benchmark for its own activities or those of others in the private sector.

If not the exercise was only theoretical and a very poor return on our investment – opportunity cost of the ‘investment dollar’.

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© 2012 Chevron

Is this what we see?

To the contrary, we see an erosion of standards and in some case a paralysis

The new Biosecurity Act attempts to ignore regional differences – at a time when trade and people movement are growing at expansively

We still cannot agree on biofouling solutions

We see rapidly diminishing funding for state agencies involved in biosecurity

We see an exodus of expertise from biosecurity agencies

We see our hotspots of biodiversity surrendered to a management strategy of benign neglect

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© 2012 Chevron

Source: http://www.globalfinancialdata.com

Impact of Global Trends

© 2012 Chevron

Conclusion Is this what we want?

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