Corporate Responsibility Report 2015 by Wintershall

Corporate Responsibility Report

About this report With the present Corporate Responsibility Report Wintershall is informing about their economic, ecological and social activities within 2015. Using examples and key indicators we illustrate how corporate responsibility contributes to Wintershallâ&#x20AC;&#x2122;s long-term success.

Issues (IPIECA). Deviating standards or reporting boundaries will be clearly visualized. The data and information for the reporting period were sourced from the expert units responsible using representative methods. The reporting period was the 2015 business year (January 1 to December 31, 2015).

The report includes Wintershall and its subsidiaries. As part of the BASF Group the financial information is based on the requirements of International Financial Reporting Standards (IFRS). The sustainability reporting is guided by the standard of the Global Oil and Gas Industry Association for Environmental and Social

The report is published annually in German and English and is available as a PDF version on the Wintershall website. In order to improve readability, only the male form is used in the text, nevertheless all data apply to members of both gender.

Insights into the world of Wintershall Page 10

Page 16

For further information, please visit the homepage of Wintershall. There you will find exciting insights into the world of crude oil and natural gas as well as information about our company, technologies and innovations. www.wintershall.com

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At a glance – Key indicators 2015

Economic data 1

Sales to third parties

Unit

2015

2014

€ million

12,998

15,145

Exploration & Production

€ million

2,809

2,938

Natural Gas Trading 2

€ million

10,189

12,207

Profit from operating companies (EBIT)

€ million

1,072

1,688

Investments and acquisitions 3

€ million

1,823

3,162

MMBOE 4

153

136

2014

Production

Ecological data

Water use (total) Waste (total)

Unit

2015

million m3

28.9

29.6

93,097

52,631

Energy Energy consumption Steam use

MWh el

546,900

498,511

492,552

507,288

Greenhouse gas emissions CO 2

million t

1.28

1.06

CH 4

5,080

4,427

3,883

3,612

2015

2014

Number of employees 5

as on Dec. 31

2,000

2,715

Apprentices 6

as on Dec. 31

Emission of inorganic substances

Social data

Occupational safety

1 2 3 4 5 6

Fatalities (own employees and contractors)

Injury with > 1 day lost time (own employees and contractors)

he information on the financial aspects is based on the requirements of International Financial Reporting Standards (IFRS) T Through the asset swap concluded with Gazprom by September 30, 2015 without contributions from the natural gas trading and storage activities in the fourth quarter of 2015 Property, plant and equipment and intangible assets incl. capitalized exploration wells Million barrels of oil equivalent 2015 figure excluding employees from the divested natural gas trading and storage activities and Wintershall Noordzee B. V. Apprentices in Germany

Content

Foreword

Company Profile

Insights

Responsible Growth

Responsible Operations

Responsible Cooperation

Outlook

CONTACT / imprint

Wintershall Corporate Responsibility Report 2015

Mario Mehren Chairman of the Board of Executive Directors

Dear Ladies and Gentlemen, In an eventful year 2015 the market environment posed major challenges. The conditions were challenging for the oil and gas industry throughout the world, particularly due to the low and volatile oil and gas prices as well as the current political crises and upheavals. Nevertheless, Wintershall performed well under these difficult circumstances – we demonstrated that we can operate successfully even at times of low prices. In every crisis is an opportunity to optimize processes and to focus on essentials. The aim is to make Wintershall even fitter for the future. That means we need to have costs under control, optimize our production and manage our projects efficiently. Therefore, Wintershall will do both in the coming years: save and invest. That is not a contradiction. We will keep investing in selected projects, especially in regions with favourable production conditions. These include further development of the Achimov formation in the Urengoy field in Russia, the Maria project in Norway and expansion of gas production in the south of Argentina. Responsibility is one of our corporate values. This term reflects Wintershall’s attitude and character, that’s why we focus on it in our first corporate responsibility report 2015. Already since 2007 we annually report about our performance in health, safety and envi ronmental protection. This year’s report integrates economic, environmental and social aspects for the first time. Please find out how we understand and implement responsibility in the three major subjects of growth, operations and cooperation. And get to know the standards that we set ourselves, the strategies that we use to pursue them and, last but not least, the performance that we achieve in doing so. Environmental protection and high safety standards have tradition at Wintershall. One example is our no-flaring approach. In our own operations, we have stopped the flaring of associated gas during routine operations already since 2012. To us, our high standards are more than rules to which we adhere. They are practiced corporate culture. It is in harmony with profitability. We know that excellent performance in this area strengthens us in the fierce international competition for the award of licences and shares.

Wintershall Corporate Responsibility Report 2015

At Wintershall we maintain an open and dialogue-based corporate culture. With good reason: Only in dialogue and as a team we will make progress. What connects all employees at Wintershall is the commitment to achieve the best possible performance and to develop ideas which meet the challenges of the future successfully. Open communication is also important in respect of our social responsibility. Companies are expected to look beyond their own backyard and to contribute to solving global challenges. Therefore we define our role and our self-perception in order to be successful in the long term. Yours,

Mario Mehren Chairman of the Board of Executive Directors

Company Profile

Wintershall Corporate Responsibility Report 2015

Successful through technological expertise and strong partnerships.

Wintershall is an oil and gas producer with worldwide operations. Furthermore we are active in the transport of natural gas in Europe. It is a wholly-owned subsidiary of BASF SE. As an international company with German roots, we focus on selected core regions, where we have built up a high level of regional and technological expertise. These are Europe, Russia, North Africa, South America, and increasingly the Middle East. Wintershall employs about 2,000 employees from more than 50 nations. Oil and gas secure global supply of raw materials Wintershall contributes strongly to the supply of energy. Thereby the exploration and production of crude oil and natural gas is our main business. We have over 120 years of experience in extracting natural resources and have been producing crude oil and natural gas for more than 80 years. Oil and gas are the cardiovascular system of our industrial society. Our prosperity is based on the long-term secure supplies of energy. As energy sources and industrial raw materials, hydrocarbons will play an important role in future. Oil is one of the most valuable fossil fuels in the world, and there will be no change in the near future. Natural gas has the best ecological performance among fossil fuels. And because of its low CO 2 emissions compared to other fossil fuels it is used primarily for heating and for generating electricity. In addition, it will be more important for the industry as a raw material. Wintershall has currently an annual production of over 150 million boe and is Germany’s largest internationally active oil and gas producer. We focus on investing in the development of promising new deposits, increasing the yield from producing fields as well as on operating as efficiently as possible. Thereby we rely on innovative technologies and strong partnerships. Technology “Made in Germany” From a technical perspective, the exploration and production of crude oil and natural gas in Germany is particularly challenging. In view of complex geological conditions, it is necessary to

deploy highly sophisticated technologies. As a result, production in Germany serves as a lab for developing new trend-setting technologies. These “Made in Germany” innovations are used around the world, making our company a valued partner in the international arena. Strong partnership Long-term partnerships form an important basis for our success. State-owned and private companies trust in our know-how, experience, and reliability – this ranges from our activities in Siberia’s permafrost, through the North African desert, to the South American steppe. Our partnerships are successful because everyone contributes what they are best at, thus complementing the other party. And we understand to further develop our partnerships. Responsible Operation In our activities we are creative and technologically innovative to achieve our business objectives. We have the courage to put extraordinary ideas into action. We are open, value diversity and promote dialogue. Even before our activities start, we examine potential effects on humans and the environment. Furthermore, we take into account social aspects as well as the protection of cultural heritage. We constantly strive to improve our processes to use resources more efficiently and further minimize our impact. Further information about our company under www.wintershall.com/company.html

company profile

Core Regions Germany

Russia

Europe

North Africa

South America

Middle East

Germany

North Africa

Wintershall has been active in the extraction of natural resources for 120 years, and in the exploration and production of crude oil and natural gas for over 80 years. We produce oil from a total of 15 fields and gas from over 35 fields in Germany – using the latest technology and maintaining high environmental standards.

Since 1958, we have been active in the exploration and production of crude oil in Libya, both onshore and offshore. Wintershall is regarded as a technology and environmental pioneer in the E&P sector in the North African country.

Europe

South America

Since 1965, Wintershall produces oil and gas in the Dutch North Sea. We have also licenses in British, Danish and Norwegian territorial waters. Today, the company holds over 60 licenses on the Norwegian Continental Shelf, more than half of them as operator.

Wintershall has been producing hydrocarbons in Argentina for more than 35 years and is now the fourth-largest gas producer in the country. Wintershall currently holds working interests in 15 oil and gas fields. Moreover, it is Wintershall’s research center for production from unconventional reservoirs.

Russia

Middle East

Achimgaz, Severneftegazprom und Wolgodeminoil are the cornerstones of our business with Gazprom und LUKOIL. In addition, Wintershall is a shareholder of Nord Stream – a twin pipeline system through the Baltic Sea, a gas supply route for Europe.

In 2010 we opened an office in Abu Dhabi. Since 2012, we have taken on the technical appraisal of the sour gas and condensate field Shuwaihat in the United Arab Emirates as operator. A first exploration well was completed in 2015.

Wintershall Corporate Responsibility Report 2015

Highlights 2015

Asset Swap

90 percent

In the 25th year of their partnership, BASF / Wintershall and Gazprom have completed the swap of assets of equal value. Wintershall focuses now on exploration and production of oil and gas as well as natural gas transport and transferred the gas trading and storage business to Gazprom.

Wintershall signs a new investment agreement for Vaca Muerta and thereby expands its participation in the Aguada Federal block in Neuquén province.

Research cooperation ADNOC and Wintershall agree on a cooperation in research and development for Chemical Enhanced Oil Recovery (cEOR).

60 years in Landau Since 1955, Wintershall produces crude oil in the southern Palatinate. Also for the future, the oil production plays an important part for the energy supply in Germany.

Change Mario Mehren (2nd from left) takes over as CEO. Next to Martin Bachmann (left) and Dr. Ties Tiessen (2nd from right) is Thilo Wieland (right) new in the board.

~80,000 boe With the production start in the fields Edvard Grieg and Knarr in the North Sea as well as the takeover of Vega operatorship from Statoil, Wintershall strengthens its production profile in Norway.

Unmanned mini-platform The unmanned mini-platform L6-B starts to produce natural gas off the Dutch North Sea coast.

Insights

Wintershall Corporate Responsibility Report 2015

“Who is actually MARIA?”

58° 58' N, 5° 44' E Hardly any other country in Europe has such an exciting and varied coastline as Norway. Nature changes its appearance within a few kilometres. Along the coast runs also the Norwegian continental shelf, a shelf with enormous resource potential.

Insights

Wintershall Corporate Responsibility Report 2015

An innovative development concept allows the economic and environmentally friendly development of the Maria field.

Around a quarter of all oil and gas reserves in the world are located under water; in Europe, this figure is as high as 90 percent. The North Sea has been one of the most important production regions for decades. There are now more than 450 platforms there, many of which are in Norway. The resource-rich kingdom in the North of Europe is the most important supplier of fossil fuel to Europe after Russia. Wintershall scrutinizes Maria “Maria” dominated the headlines last year in Norway. These headlines, however, did not involve a member of the royal family, but a development project with an innovative approach off the coast of Norway.

What is special about this is the extremely sophisticated integration into an already existing technological infrastructure. The concept envisages operation without any new separate platform for production, storage, treatment and loading. Instead, two remote-controlled installations on the seabed at a depth of 300 metres will take over production, integrated into a system of three already existing platforms, which are up to 40 kilometres away. “This tie-back requires very complex engineering”, explains May Kristin Sviland, Manager for Health, Safety and Environment in the Maria project.

The development of the Maria field is one of Wintershall’s own-operated projects in Norway. The field is located in the Halten Terrace in the Norwegian Sea, 200 kilometres from the mainland, and was discovered by Wintershall in 2010.

The best possible solutions to challenges such as those posed by the Maria field can be developed only if the collaboration is based on teamwork. An interdisciplinary team composed of Wintershall employees, partners and contractors pools its expertise and works together to make the project successful.

In September 2015, the Norwegian authorities approved the development concept, which, in many respects, pinpoints new approaches.

Corals and pipeline route must harmonize Standards for protecting the environment are also high. A special focus of the Maria

project is on protecting sensitive habitats and preserving species diversity. That is why Wintershall, in principle, uses environmentally friendly technologies and methods if possible. The comprehensive environmental study carried out for the Maria project clarifies what that can mean in concrete terms.

“A technical integration of this magnitude is one of the most complex in Norway.” “As part of this study, we carried out intensive investigations of the seabed”, May Kristin Sviland explains. They revealed that the region of the Maria field is the preferred habitat of vulnerable cold water corals. Hand in hand, environmental experts and engineers therefore worked out a route plan for the pipelines of the Maria field that keeps them as far away from the coral colonies as reasonably possible.

Insights

The Deepsea Stavanger unit (semi-submersible rig) will drill wells on the Maria field starting from April 2017 (01). The careful planning of the pipeline route protects the habitat of sensitive cold-water corals (02). The Norwegian project team (03).

Wintershall Corporate Responsibility Report 2015

Development and Operation Plan Maria

Åsgard A / C

KRISTIN

Åsgard B

HEIDRUN

Oil offloading for oil export

Host for processing Maria wellstream

Provides lift gas via Tyrihans D to improve oil production

Provides injection water to increase pressure in the reservoir

Gas export via Åsgard transport gas pipeline

TYRIHANS D

MARIA H

MARIA G

Subsea template

Production template

Insights

Developed innovative solution concept The development solution for the Maria field consists of two installations on the seabed, which are connected to the platforms, Kristin, Heidrun and Åsgard B, via a subsea connection. Like “Maria” are their names derived from Norse mythology. The assignment of names for new discoveries is clearly regulated in Norway. They have to reflect the importance of the activity for the region as well as the entire country. Especially popular are therefore names from Norse mythology, followed by famous Norwegians. Furthermore, new names have to be compatible with existing field names if they are located in the same area. The final word always has the Norwegian Ministry of Energy, which has even appointed a committee of experts. It consists of historians, journalists and politicians. Each of the three platforms fulfils different functions: The aim of the Heidrun platform, 40 kilometres to the north of the Maria field, is to supply the injection water required for production. The Åsgard B platform, which provides the gas that is likewise important to production, lift gas, is 20 kilometres away. On its way, this gas will pass the already existing subsea installation, Tyrihans D. The control room, from which production is to be monitored, is located at Kristin. The monitoring and remote control cables will run for 26 kilometres to the subsea stations of the Maria field. Conversely, pipelines will then channel the raw products to Kristin, where they will be treated. Separate treatment plants for the Maria project do not need to be built – a major cost benefit. The circle will be completed when the treated oil is channelled to the Åsgard C platform and is loaded onto tankers there.

The natural gas will be fed into the Åsgard gas transport pipeline, which ends at Kårstø onshore plant. The network of pipelines for the Maria project will have a total length of at nearly 100 kilometres. May Kristin Sviland is sure that “the technical integration of this magnitude is one of the most complex in Norway”. The advantages are diverse: We are increasing profitability and reducing development costs compared with a new construction; furthermore, material usage is significantly lower. Oil production and processing also requires less energy, thereby significantly reducing CO 2 emissions.

“By developing this innovative solution we are strengthening our position as a subsea operator.” Another positive aspect is that the existing infrastructure can be used on a more intensive and long-term basis, which also convinced all involved partners and stakeholders. “By developing this innovative solution that utilizes existing infrastructure in the Norwegian Sea, we are strengthening our position as a subsea operator and generating substantial value for the partnership and the whole supply chain”, says Hugo Dijkgraaf, Wintershall Project Director for Maria. Maria project proceeds In 2015, important steps for implementing the project were taken – apart from getting the approval for the development concept, Wintershall also awarded the drilling contract. It has been assigned following a thorough international selection process and in alignment with the other Maria license partners. From April 2017, Odfjell Drilling will drill down to a depth of

around 3,800 metres using its Deepsea Stavanger drilling rig. Under the terms of the contract, the Deepsea Stavanger unit will drill up to six wells. Finally, in 2018, production will start in the Maria field. In a difficult market environment, Wintershall is pushing ahead with the first operated development in Norway. Maria is a major subsea development on the Norwegian Continental Shelf. And the team is convinced that, with the subsea connection to production platforms, it has developed the best possible solution from a safety, environmental and economic perspective.

Wintershall Corporate Responsibility Report 2015

“How much energy is under the ice?”

66° 5' N, 76° 41' E In the remote region of Siberia is the City of Novy Urengoy. As the center of the main gas exploration regions of Russia, it is called today the unofficial capital of the Russian gas production. For Achimgaz employees snow and ice are part of their everyday life.

Insights

Wintershall Corporate Responsibility Report 2015

Achimgaz, a joint venture between Russians and Germans. A prime example of a successful cooperation in the energy sector.

It is ice-cold in the Siberian Tundra – in winter, the temperature sometimes falls below minus 50 degrees. And yet deep under the permafrost, there are resources that supply Europe reliably with heat and energy. Novy Urengoy, 60 kilometres south of the Arctic Circle, 3,500 kilometres from Moscow, is the centre of Siberian natural gas production. The town, with over 115,000 inhabitants, is the location of the Joint Venture AO Achimgaz, in which Wintershall and Gazprom, the Russian oil and gas company, are working together as established partners. In the middle of Western Siberia Russia has more than a third of all of the world’s natural gas supplies known today. It is at least eighth in terms of crude oil resources. It is the European Union’s largest natural gas supplier, with Germany covering around a third of its fossil energy requirements through imports from Russia. Wintershall is participating in several joint projects in Southern Russia and in Western Siberia. In doing so, we, together with our Russian partners, are relying on sol-

id and long-term collaboration. A cooperation model, which has proved its worth for more than 25 years, has developed as a result of the constant exchange of experience and know-how.

sioned more than 60 wells and large-scale installations, producing 15 million cubic metres of natural gas a day. A total of 113 wells will have been drilled by the final completion stage.

Novy Urengoy is situated in the JamalNenzen region, which is twice the size of Germany, but has only 500,000 people living there. The winter lasts eight months, the average temperature in January is minus 26 degrees and the sun rises above the horizon for just one hour on December and January days.

The presence and close collaboration of Wintershall and Gazprom on site enable them to find together new concepts in business management and to design them more effectively. All decisions, whether technical or administrative in nature, are taken jointly.

Among other, Novy Urengoy is one of Russia’s youngest towns. It was officially founded in the early 1970s when gas production began in the region. In those days, there were neither rows of houses nor supermarkets. Nowadays, Novy Urengoy offers its inhabitants modern shopping centres, universities as well as sports and cultural facilities. Partnership in permafrost Not only Novy Urengoy, but also Achimgaz is undergoing dynamic development. So far, the joint project between Wintershall and Gazprom has already commis-

This close and trusting collaboration assists the two companies in overcoming the conditions in Western Siberia, which present challenges in terms of both climate and geology. One of the many technical challenges, for example, is the huge difference in temperature between reservoir and surface: The Achimov formation is located at a depth of nearly 4,000 metres below the permafrost. The gas is stored there at a pressure of up to 600 bar and temperatures of at least 100 degrees Celsius while, on the surface, temperatures can drop to minus 50 degrees.

Insights

From the wooden barracks of the 60’s grew a modern city (01). The thermometer shows - 41 °C. On the coldest days, it drops below - 50 °C (02). The festival of northern peoples is celebrated annually in Novy Urengoi (03).

Wintershall Corporate Responsibility Report 2015

On some days the outside temperature falls more than 40 degrees below zero, certain works will be stopped because of safety aspects, for example drilling activities. The production itself can go on, but with increased safety arrangements. A second bus accompanies the bus with the Achimgaz employees, which drives nearly an hour from Novy Urengoy to the central processing facilities. In case of technical problems, this one can jump in immediately. On such days life in the Siberian city is basically frozen. Schools are closed and roads are empty. Only a few cabs are driving around, which have doubled their rates. Going outside has to be rethought twice. Production under such circumstances requires the highest technological knowhow. The partners benefit from the fact that they can combine their different competencies: Gazprom benefits from many years of involvement in the Arctic; Wintershall contributes experience with regard to deep wells.

demand, increase the speed of field development and reduce the costs involved in building access routes. Occupational and process safety also has high priority. In this respect, too, concepts need to be tailored to the particular challenges posed by the Siberian climate. Ultimately, though, the operational safety of the plants is not just a question of climate. What is crucial is to meet the highest Health, Safety and Environmental protection (HSE) standards for each operating state. “We achieve smooth operation through systematic process safety analyses and comprehensive safety and protection concepts“, Georgina Wien, Production Engineer and Expert on Health, Safety and Environmental Protection at Achimgaz, emphasizes. The strengths of the German and Russian system combine perfectly here, with the highest safety standards being applied in each case. “In addition, we are constantly searching for ways to make improvements and we carry out the best possible quality management”, Wien declares.

“We achieve smooth operation through systematic process safety analyses and comprehensive safety and protection concepts.”

This is underlined by Achimgaz’s international certifications. These include the globally applicable standards for requirements on environmental management and for occupational safety management, ISO 14001 and OHSAS 18001, respectively. It also has other globally recognized certificates, for example, in respect of compliance with the environmental and social standards of the International Finance Corporation.

Combination of strengths In order to protect the region’s particularly sensitive ecosystem, Achimgaz uses the cluster drilling technique, in which only one well site is set up for several wells. Underground locations, just like offshore drilling reservoirs, will be reached by extended reach wells drilled from one platform. This enables us to minimize land

Social Engagement Achimgaz’s foundation is partnership. It is therefore a matter of course for Wintershall to become involved in the region and assist the local stakeholders with their activities on the way to achieving sustainable development. Since 2005, for example, Wintershall has been supporting the city partnership between Kassel

in Germany and Novy Urengoy as a platform for an exchange of knowledge and culture. Through the Young Vision Award, Wintershall, together with Gazprom International, is simultaneously supporting dialogue between students in the two countries as well as innovative ideas. “In Russia, there is an increasing focus on the inclusion of people with disabilities and every effort is being made to promote this more actively”, explains Ksenia Ryklin, Manager for Partner Relations and Corporate Social Responsibility in Russia. Thereby Wintershall supports the Association for International Understanding and the town of Urengoy financially to start a joint initiative regarding the establishment of an inclusive kindergarten. The last two years evaluations and intensive preparations have been carried out. In December 2015, the partners involved signed the contracts, thereby paving the way for laying the foundation stone in 2016. When the establishment opens, it is expected to provide places for 200 children aged between 6 months and 7 years, 20 percent of whom will be disabled. Energy for the future Proven partnership and natural gas resources below the ice: This combination contains energy for the future, from which both local people and people throughout Europe will benefit. Over the next 30 years, Wintershall and Gazprom intend to produce a total of 200 billion cubic metres of natural gas and 40 million tonnes of condensate from the concession: a significant contribution to Europe’s natural gas supply.

Insights

Achimgaz: Drilling for gas in Siberiaâ&#x20AC;&#x2122;s Urengoy field (04). 15 mil. cubic metres of natural gas per day are produced at Achimgaz (05). Birdâ&#x20AC;&#x2122;s-eye view of the snow-covered gas processing plant (06).

Wintershall Corporate Responsibility Report 2015

“What is so fascinating about Vaca Muerta?”

38° 12' 0'' S, 69° 30' 0'' W On the northern edge of Patagonia lies Neuquén, a province in western Argentina. The province is not only one of the top destinations for dinosaur researchers and wine connaisseurs, it is also one of the main growth regions of the country.

Insights

Wintershall Corporate Responsibility Report 2015

The development of one of the world’s largest shale oil and gas fields places great hopes.

The Argentinian desert, about 1,140 km to the south-west of Buenos Aires, contains one of the world’s largest shale oil and gas reserves, the “Vaca Muerta” (“Dead Cow”) formation, at a depth of 2,800 metres. The shale field was named after the nearby mountain range “Sierra de Vaca Muerta”. Great expectations are linked to its development. The Argentinian government is hoping for independence from energy imports, for economic growth and jobs. Wintershall intends to set up a centre of excellence here for production from unconventional deposits. Enormous potential in the shale The Vaca Muerta formation extends over an area of 30,000 square kilometres beneath the Argentinian provinces of Neuquén and Mendoza. In 1917, the geologist Hans Keidel, who was born near Braunschweig, was roaming through the east of the province of Neuquén on muleback when he found a rock formation that he described as follows: “At 1,297 kilometres from Buenos Aires, go 1,100 metres northwards, next

to a hill and right next to a group of trees, where I hammered in a peg.” Keidel had discovered the first crude oil in Neuquén. The formation is 150 to 600 metres thick and contains, according to estimates provided by the U.S. Energy Information Administration (EIA), recoverable reserves of around 16 billion barrels of oil and nine trillion cubic metres of gas. This quantity is roughly equivalent to the entire European oil reserves and a little more than twice the gas reserves. According to the EIA, the whole country has the second-largest shale gas reserves and the fourth-largest shale oil reserves in the world. The feature of the Vaca Muerta formation is that the oil and gas is located in particularly dense shale rock. Their development, however, requires use of the technologically relatively demanding and cost-intensive method of hydraulic stimulation. Hydraulic fracturing is the key technology for producing natural gas from difficult and complex reservoirs. Wintershall has been using this process for 30 years on conventional tight gas reservoirs, working according to the highest

environmental and safety standards. With this production technology artificial flow paths, known as fractures, will be created in the reservior. And due to the enlarged contact patch, economic production rates are made possible.

“This is the starting platform for the Wintershall Group’s unconventional activities.” Premiere for Wintershall Wintershall Energía, which has the concession for the 97 square kilometres Aguada Federal block in the eastern part of the Neuquén Province, has been participating in the exploration of the Vaca Muerta formation since 2014. At the end of 2015, the company’s share in the project was raised from an original 50 percent to 90 percent; Wintershall’s partner is Gas y Petróleo del Neuquén, the stateowned energy company based in the province.

Insights

The Aguada Federal block in eastern NeuquĂŠn province, where Wintershall is exploring unconventional reservoirs, is 97 square metres in size (01). The first well was drilled in 2015 (02, 03).

Wintershall Corporate Responsibility Report 2015

The Wintershall activities in Argentina are controlled from Buenos Aires (04). Aguada Federal is located far away from any civilisation and requires patience on arrival (05). Cattle breeding still plays a significant role in NeuquĂŠn (06).

Insights

This is the first time that the German company has been the principal operator in Argentina – a new chapter in its almost 40-year history. “This project is an opportunity for us to develop technological expertise that can subsequently be used throughout the world”, says Gustavo Albrecht, Managing Director of Wintershall Energía. “This is the starting platform for the Wintershall Group’s unconventional activities.” In 2015 two vertical exploration wells that were intended to unearth vital information on reservoirs, pressure zones, and the technologies that should be used, were drilled. From these further horizontal wells will be side-tracked to reach the shale layer that promises the most oil. Overall, the intention is to drill four horizontal wells in the initial exploration phase in Aguada Federal with a view to testing the cost-efficiency of production from the Vaca Muerta formation. If they are successful, a more extensive drilling campaign will follow. Project challenges also include the geographical position and the local infrastructure. “Aguada Federal is in the middle of nowhere”, says Jorge Ponce, Completion Team Leader of Wintershall Energía. To get to the block, you need to make an initial two-hour flight from Argentina’s capital, Buenos Aires, until you reach Neuquén, the provincial capital. Cattle breeding as well as fruit and vegetables grow in the environs of the pulsating administrative and industrial city, and along the river, there are modern vineyards, which produce wines from grapes like Pinot Noir, Sauvignon Blanc and Merlot for the Argentinian market and for export. From Neuquén, you travel two hours through the rock desert. No grapes thrive under the Auca Mahuida vulcano, which, on the horizon, watches over Aguada Fed-

eral. Summer days are baking hot, winter nights bitterly cold, and all the time there is a strong wind blowing. For centuries, only armadillos and guanacos, the wild archetype of the domesticated llama, were at home here.

“Local employment enables us to make a contribution to value creation in the region.” The future has a name The region is very sparsely populated, with an average of five inhabitants per square kilometre, and has undergone little development in the past. However, this is currently changing – over 20 oil and gas producers from all over the world are operating here. The number of inhabitants in the small town of Añelo, which is about 50 kilometres away from Aguada Federal, is growing rapidly. Añelo – which, in the language of the indigenous Mapuche Indians, means “forgotten place” – has chosen the following motto for itself: “The future found its place”. The region’s oil and gas industry has already brought 5,000 new jobs, some of them at Wintershall: “We mainly take on local employees”, Alfredo Armendano, Human Resources & Administration Manager at Wintershall, stresses. “This enables us to make a contribution to value creation in the region.” Driving forward together The future development of Añelo is based on an urban development plan, the implementation of which has already begun. The infrastructure – from electricity to water through to new streets – is to be

brought into line with the change. Industry and policymakers are working closely together here. Wintershall also intends to make a contribution to the region’s development. The company already has some experience in supporting social projects in Argentina, mainly together with its partners. Currently, Wintershall Energía is drafting its first own sustainability program. It aims at supporting local stakeholders with the sustainable development of their abilities and skills. “At the moment, we are in steady contact with land owners, local administrations and government representatives as well as with other operators in the region to ensure the correct use of available resources for the best of the region”, Alfredo Armendano explains. The focus is on help for self-help. Therefore Wintershall wants to support locals in developing their skills and competences. The objectives that Wintershall wants to pursue with that program are mediumterm to long-term in nature: The energy from Vaca Muerta, the “Dead Cow”, is expected to bring a lot of life into the desert in future as well.

Responsible Growth

Strategy and organization Management Compliance Partnerships Responsibility along the value chain Technology and innovation

29 30 31 32 32 33

Responsible Growth

We take responsibility.

The world community is facing numerous challenges: from growing population and the accompanying rise in demand for energy and resources to globalization through to climate change. Wintershall aims to take responsibility and to make a positive contribution in its sphere of influence. Strategy and organization Our approach and understanding Our corporate values provide the basis for our actions: We conduct our business creatively, openly, responsibly and entrepreneurially. Sustainability to us means combining economic, ecological and social responsibility. We ensure that it is taken into account in all Wintershall activities. In this way, we will not only be able to identify and reduce risks, but also recognize and utilize opportunities, at an early stage. Our vision and mission We want to contribute to meeting the growing energy demand in the most responsible way. Providing solutions for the energy supply of the future and, in doing so, generating added value both for us and for the society. We want to achieve our aims by applying high standards in all our corporate activities, using state-of-the-art, environmentally friendly and efficient technologies and being an attractive employer, reliable partner and good neighbor. Materiality aspects In order to identify the aspects relevant to Wintershall and its stakeholders, we constantly use various tools to analyze the challenges we face. These include company-internal studies and assessments as well as findings from dialogues and workshops with stakeholders as well as from press and community events. Industry-specific analyses also have a part to play. The resulting aspects, e.â&#x20AC;&#x2030;g. environmental protection, health, safety, employability, compliance and transparency, are reflected in this report.

Our principles

To promote sustainable development, we are guided by six principles related to economic, ecological and social aspects.

We create value for the companyâ&#x20AC;&#x2122;s long-term development and the society. We provide sustainable solutions.

We minimize our ecological footprint. We use resources efficiently.

We respect people and human rights. We involve our stakeholders actively.

Organization We see the steering of sustainability aspects as a strategic responsibility with implications for the whole company. In order to drive sustainable development forward in the company, joint efforts, coordination of measures and continuous monitoring of achievements are required. Mario Mehren, the Chairman of the Board of Executive Directors at Wintershall, has taken overall responsibility for this topic. A team positioned in the Strategy Division is responsible for development and management as well as coordinates implementation measures, supported by a community of experts.

Wintershall Corporate Responsibility Report 2015

Subject-specific and regional measures are in the responsibility of dedicated divisions and operational companies. They know the needs and expectations in their divisions and regions best and can act accordingly.

Risk management Wintershall is included in the BASF Group’s comprehensive risk management system. Extensive and established planning, approval, reporting and early warning systems are integral parts.

Management

Our risk management system aims to identify and assess opportunities and risks as early as possible; it also aims to take appropriate measures to seize opportunities and to limit business losses. This should safe Wintershall’s long-term business success and create long-term value due to improved entrepreneurial decision-making.

Standards In all our activities, we follow international standards as well as our own standards and country-specific legislation. If several proven industrial standards exist, such as that of the International Association of Oil & Gas Producers (IOGP) or the International Association of Drilling Contractors (IADC), we apply the higher one. Code of conduct The adherence to our compliance standards is part of a responsible corporate governance. Core of these standards is the globally consistent BASF code of conduct, binding for all employees. It defines basic, globally applicable standards of conduct and integrates them in daily business. HSE Policy Through the policy of Health, Safety and Environmental Protection (HSE), our company is committed to comply with central principles. They relate to health, safety, environmental protection and socially acceptable behavior. The principles provided by the policy must be observed in all circumstances and have priority over economic interests. Human rights position For us, any and all actions are based on respect for human rights. As part of the BASF Group, which is one of the founding members of the United Nations Global Compact Initiative, we support its ten guiding principles for responsible corporate governance and human rights. Our aim is to align our internal guidelines and processes accordingly. Management system Wintershall has integrated sustainability aspects into the companywide Exploration & Production (E&P) management system. It describes processes and responsibilities and defines standards that are applicable across the company. In 2015, the hitherto independent HSE management system was integrated completely into the E&P management system. The aim here is, that all HSE guidelines and procedures are being taken into account accordingly in the respective processes.

Steering sustainability aspects By using BASF’s method of Sustainable Solution Steering we identify the key sustainability criteria and challenges as well as evaluate the sustainability contribution of our activities. When performing the analysis we consider the entire value chain as well as regional differences. The method is also used for steering our research and development activities. Various economic, ecological and social aspects are assessed: −− Economy: e. g. possibilities for cost saving or more efficiency −− Ecology: e. g. development of environmentally friendly solutions −− Society: e. g. increasing safety in operations or stakeholders’ acceptance In addition, we have other tools for assessing new projects in respect of their impact on the environment and society. These tools are used, for example, in approval processes.

Responsible Growth

Compliance With our Group-wide Compliance Program, we aim to ensure adherence to legal regulations and the company’s internal guidelines. We use the world-wide binding Code of Conduct of our parent company BASF SE, which applies to all employees of Wintershall and firmly embeds it into daily business. Members of the Board of Executive Directors are also expressly obligated to follow these principles. Compliance Program and Code of Conduct The Compliance Program of Wintershall is based on the worldwide applicable standards of BASF SE and internationally accepted standards. The BASF Code of Conduct includes the topics below:

Compliance Culture at Wintershall We firmly believe that for corporate responsibility to be a success, there must be an active culture of living these guidelines within the company. This culture takes years to develop, and requires the consistent, reliable application of compliance standards. Because the compliance codex was introduced early on, these standards are already established and undisputed. Monitoring adherence to compliance principles Wintershall’s Chief Compliance Officer (CCO) manages the implementation of the BASF Compliance Management System. He belongs together with 4 compliance officers within our core regions to a worldwide network of 94 BASF compliance officers who support the BASF Chief Compliance Officer. Furthermore, the Wintershall CCO reports to the Wintershall board regularly on the status of the Compliance Program as well as any major developments.

Code of Conduct

Antitrust Laws

Money Laundering Information Protection and Insider Trading Laws

Gifts and Entertainment

Protection of Data Privacy

Imports and Exports

BASF’s Code of Conduct stipulates how these topics are handled.

Human Rights, Labor and Social Standards

Protection of Environment, Health and Safety

Conflicts of Interest

Corruption Protection of Company Property and Property of Business Partners

Our efforts are principally aimed at preventing violations from the outset. To this end, all employees are required within a prescribed timeframe to take part in basic compliance trainings, refresher courses and special tutorials. Training takes place in different formats, including face-to-face training, e-learning or workshops.

We particularly encourage our employees to actively and promptly seek guidance if in doubt. For this, they can consult not only their managers but also dedicated specialist departments and company compliance officers. We have also set up external hotlines worldwide which our employees can turn to anonymously. We make sure that all concerns are processed and answered within a short amount of time. At Wintershall a compliance dialogue is conducted annually, thereby the CCO and the division heads of selected operational units discuss in form of a structured interview business-specific compliance risks. Objective is to identify specific risks with regard to region and task and then determine appropriate risk management measures for both current and future business environment. On April 1, 2015, we have adapted and introduced a new global standard of BASF SE, “Directive of Partner Due Diligence”. Based on this directive all business partners in the sales area will be checked regarding possible compliance risks. The assessment is performed via checklists, questionnaires to the counterparts as well as internet-based evaluations. The outcome of the review is documented. In addition, we also insist that our suppliers know and consider our global Supplier Code of Conduct.

Wintershall Corporate Responsibility Report 2015

German-Russian partnership: Achimgaz Deputy Director General Ingo Neubert (left) and Achimgaz Director General Oleg Ossipovich in front of a drilling rig in the gas field of Novy Urengoy, Siberia.

For over half a century we have been active in Libya. Times, in which we have built up longstanding partnership and good community relations.

Partnerships

project aims to build two additional offshore pipelines from Russia to Germany with an overall capacity of 55 billion cubic metres of natural gas. The project builds on the successful experience of Nord Stream.

Taking responsibility with our partners Collaborations and partnerships help to solve challenges and further develop. We are working on that especially with our partners such as Gazprom, Statoil and the Abu Dhabi National Oil Company (ADNOC). The focus thereby varies. We cooperate, for example, with Statoil and ADNOC on research and development topics such as the enhanced oil recovery (EOR). Especially national partners expect an environmentally and socially compatible approach. They are interested in companies making a contribution to solving national challenges. We are aware of our responsibility and contribute with infrastructure projects, for example the construction of a health centre in Libya. In addition, we work closely together with our parent company BASF in developing sustainable solutions in the internal research and development network. Together secure supply Wintershall also contributes to a secure supply of energy with natural gas in Europe with its participation in the Baltic Sea pipeline Nord Stream and the onshore pipeline links OPAL and NEL. Moreover, Wintershall intends to take part in the expansion of Nord Stream together with other European partners. The

Responsibility along the value chain Our intention In line with our own standards, we expect our business partners to act responsibly in relation to people and the environment. That is why Wintershall’s criteria for selecting suppliers and contractors are not only economic in nature. We also assess existing and new supply relationships in terms of compliance, environmental protection, safety and compliance to social standards. To us, sustainability-oriented management of the supply chain also means raising our suppliers’ awareness of our expectations and standards. Code of Conduct and standards for suppliers In addition to our Terms and Conditions of Purchase, our “Supplier Code of Conduct” describes what we expect from our suppliers in concrete terms. This Code of Conduct is based on the principles of the UN Global Compact and the conventions of the International Labour Organization (ILO). It comprises environmental protection, compliance with human rights, labor and social standards as well as discrimination and corruption.

Responsible Growth

At the heart of the steam flooding facility: Since 1981, Wintershall has been optimizing recovery by using steam flooding.

Extracting more oil gains in importance for the E&P Business. Therefore Wintershall is cooperating with BASF on different research projects on Enhanced Oil Recovery.

Additional standards for security personnel Further requirements apply to our security workforce, which we have defined in our Principles for Deploying Security Personnel. For example, these principles include relevant human rights aspects for the security of respective locations, e. g. the right of freedom and security of people.

Technology and innovation

Initiative for sustainable procurement Wintershall participates in the initiative “Together for Sustainability”, co-founded by BASF. The aim of the global program for responsible procurement of goods and services is to ensure compliance with international accepted environmental and social standards of our contractors. Implementation of standards Wintershall uses various inspection measures to ensure that suppliers and contractors observe the sustainability standards. Thereby we have a detailed sustainability assessment on selected suppliers and contractors, sub-divided by country and product risks. Measures range from voluntary information, presentation of relevant certificates to on-site audits.

Our business success is primarily based on technological expertise. It also provides a competitive advantage in terms of access to new fields. Our portfolio of technologies is wide-ranging, as our aim is to have the right solution for each technological challenge. Some of these technologies are already proven and tested methods, such as steam flooding and hydraulic fracturing. We also boast many years’ experience in the field of horizontal wells, which are required for developing complex reservoirs of tight gas and gas condensate. Innovativeness is a key aspect of future viability. That is why we also look into innovative technologies. Thereby we focus on those research and development projects that enable efficient production and careful use of resources. Current examples include the development of environmentally friendly polymers to improve the recovery factor. However, we also concentrate on the development of smart solutions for general challenges with our partners.

Wintershall Corporate Responsibility Report 2015

Interview

Low oil prices: causes, IMPACTS and risks

Heiko Meyer, Vice President Strategy & Portfolio Management

Since mid-2014, the oil price has more than halved. What are the reasons for this development? Oil prices have fallen from more than US $ 100 to less than US $ 40 a barrel (bbl) within one year. Thereby, we see this slump in oil prices as being supply-induced, as we are confronted by an over supply of oil on world markets, in particular, due to the rise in global production, especially shale oil production in the USA. At the same time, the Organization of Petroleum Exporting Countries (OPEC) did not, as in the past, respond to the price erosion by reducing production volumes. Also atypical is that geopolitical conflicts are having only a minimal stabilizing effect on prices. In addition, poor economic data from China are also having a negative impact on energy prices. What impacts are caused by this trend? The International Energy Agency continues to expect a rising demand for oil and gas. However, the investments necessary to cover the future demand are not being made with current price levels or being reduced. This may result in significant shortfalls in supply in future. Our industry is under great pressure, and we expect the market to consolidate. Furthermore, a number of producing countries are heavily dependent on oil revenues. As a result of the low revenues, their budget deficits, and hence the risk of crises, rises. If we consider the goal of limiting global warming to less than 2 degrees – a goal that was agreed at the end of 2015 at the United Nations Climate Change Conference in Paris – what does a low oil price mean in this context? With regard to climate protection efforts, there are two aspects. On the one hand, the low price reduces incentives for using energy efficiently. On the other hand, the fact that together with the oil price also gas prices are falling in many places means that there is enormous CO 2 saving potential. Natural gas is becoming more competitive and a switch from coal to natural gas will have a positive impact on climate, which is currently impressively observable in the USA. And what does the current oil and gas price development mean for Wintershall? Well, we are assessing all investment and exploration projects even more intensively and focusing the employment of capital only on those activities that are economically most attractive. A crisis, however, also always means an opportunity to optimize processes and to focus on essentials, thereby increasing efficiency in the long term.

Responsible Growth

Economic performance *

Overview total production, sales to third parties, profit from operating companies (EBIT)

Total production 26 % Crude oil

2015

74 % Natural gas

in MMBOE ( million barrels of oil equivalent)

153 136 2015

2014

Sales to third parties

Profit from operating companies (EBIT)

in € million

2015

Development characterized by portfolio changes as well as low oil and gas prices

in € million

2014

12,998

1,072

15,145

1,688 2015

2014

In 2015, Wintershall and its subsidiaries were active in the exploration & production and natural gas trading, storage and transport business sectors. At € 12,998 million, sales to third parties were € 2,147 million lower than in 2014. This was primarily attributable to the asset swap with Russian company Gazprom executed at the end of September 2015; the consequence of which was the loss of contributions from the gas trading and storage business and from Wintershall Noordzee B. V. in the fourth quarter of 2015. The significant drop in the price of oil led to slightly lower sales in the Exploration & Production business sector. However, sales were positively impacted by a volumes increase in both the Exploration & Production and Natural Gas Trading business sectors. At € 1,072 million, the income from operations (EBIT) were € 616 million lower than in 2014. Wintershall was able to raise oil and gas production significantly, by 13 percent to 153 million barrels of oil equivalent (boe). * The information on the financial aspects is based on the requirements of International Financial Reporting Standards (IFRS).

Responsible Operations

Safety Environmental protection and energy management Climate protection and emissions Employees

37 41 44 46

responsible Operations

We protect natural resources and use potentials.

Safety, environmental protection and motivated employees are important for our long-term success. We therefore assess prior to the beginning of our activities possible impacts on people and the environment and are constantly working on reducing negative ones. In addition, our success is based on the commitment of our employees. Therefore we strive to offer our employees a secure and attractive workplace.

Safety We apply high safety standards globally, use state-of-the-art technology and train our employees as well as our contractors to minimize risks to people and facilities. In order to ensure safety, prevention is a priority. Binding requirements and methods concerning occupational and process safety are therefore defined in our company-wide management system of health, safety and environmental protection (HSE). Compliance with respective requirements and its effectiveness are regularly reviewed through audits. In 2015, we examined and updated the HSE management system in respect of new processes, guidelines and external requirements. Additionally, we introduced BSCAT (Barrier-based Systematic Cause Analysis Technique), a methodology for analysis of the causes of incidents and near-misses company-wide. Process safety The facilities used for the exploration and production of hydrocarbons comply with high safety standards. To achieve this, we use the same demanding safety criteria as a basis throughout the world and invest constantly in new facilities as well as modernize existing ones.

Multi-stage safety systems All Wintershall’s offshore installations have a multi-stage barrier system, which ensures safe operation. This comprises technical measures for the prevention and detection of potential discharges; facilities for controlling respective damage scenarios such as fires or explosions; measures to minimize the impact of such scenarios and technical facilities for ensuring safe evacuation. Each barrier consists of several safety devices and elements, which are specified in respect of functionality, reliability and resilience. If one barrier fails, the next one becomes operable, thereby ensuring the installation’s overall integrity even if one or more elements fail. For each new facility, Wintershall prepares a tailor-made safety concept, which takes all important aspects into account. The development of such concepts is supported by an HSE-specialist. Based on this, we define respective safety measures. Existing facilities are regularly updated. Occupational safety Wintershall strives to create a safe working environment. We regularly raise employees’ and contractors’ awareness of risks. Also in 2016, our goal is to avoid any incidents. Against this background, we are constantly working to improve our occupational safety performance. Safety measures Our company uses a range of instruments and measures to continuously improve occupational safety. Among them are global guidelines and requirements, such as those relating to risk assessments for workplaces or for the use of personal protective equipment. Occupational safety is a core component of day-to-day activities, which is why safety meetings, emergency response training programs, awareness-raising workshops and seminars for employees and contractors take place frequently at all sites. Wintershall regularly carries out emergency response exercises, both

Wintershall Corporate Responsibility Report 2015

offshore and onshore. Our employees receive intensive instructions and trainings in all matters relating to safety. For example, all offshore employees must complete a survival-training program every four years. Performance 2015 The incident figures, especially those of our contractors, rose in 2015 compared with the previous year. Overall, there were 9 lost time injuries (own employees: 1, contractors: 8). The lost time injury frequency (LTIF) was 0.97 in 2015 (own employees: 0.21, contractors: 1.75). The total recordable incidents frequency (TRIR) was 4.19 (own employees: 1.27, contractors: 7.22). This also includes minor incidents.* The figures illustrate that occupational safety cannot be ensured by high standards alone: A proactive safety culture is also extremely important. Wintershall responded to the changes in incident figures by initiating a global safety campaign in the fourth quarter of 2015. For this, all employees took a time-out for safety in November. Small teams developed specific proposals on how to improve safety in their own working environment. Additionally, managers assessed the topic of safety culture and their own function as role models. In 2016, the discussed proposals need to be translated into action.

Contractor management Many projects in the oil and gas industry are unimaginable without the support of external experts. That is why Wintershall uses contractors in various areas. The company bases its selection of contractors on strict criteria. In 2015, Wintershall revised and optimized the pre-qualification requirements for global projects to increase its ability to identify specific risks from the outset and respond to them in a more comprehensive way. When it comes to compliance with HSE standards, Wintershall places the same high requirements on its contractors as on its own employees. As in the last few years, we will continue with information events for our contractor companies. The aim is to provide contractors with information and instructions regarding our HSE requirements, give specific recommendations and thereby improve the HSE performance.

Key Performance Indicators Occupational safety Wintershall Employees

Employees 1 and Contractors

2015

2014

2015

2014

2,000

2,715

2,009

1,888

4,737,221

4,682,160

4,571,335

4,294,234

Fatalities (FAT)

Injury with > 1 day lost time (LTI)

0.21

0.43

1.75

0.47

Working hours 2

Lost Time Injury Frequency per one million working hours (LTIF) Total Recordable Injury Cases (TRIC) Total Recordable Injury Rate per million working hours (TRIR) 1 2

Contractors

1.27

1.92

7.22

6.75

015 figure excluding employees from the divested natural gas trading and storage activities and Wintershall Noordzee B. V. 2 2015 figures working hours of all own-operated activities, including working hours of employees and contractors from the divested natural gas trading and storage activities until September 30.

* All data and input figures presented in this report meet national and international standards in the E & P industry. As a member of the International Association of Oil and Gas Producers (IOGP) and the German oil and gas industry association,“Wirtschaftsverband Erdöl- und Erdgasgewinnung e. V. (WEG)”, Wintershall uses the definitions of both internationally recognized associations when compiling data.

responsible Operations

Activities 2015

Initiative “Tipping Kills” The initiative “Tipping Kills” – a joint campaign of Wintershall, ExxonMobil, the German Oil and Gas Industry Association and Lower Saxony’s Road Safety Association advocates more safety in road traffic, in particular the potential dangers of using a mobile phone while driving. German Social Accident Insurance Institution for raw materials and chemical industry awarded the project with Germany’s most prestigious occupational safety prize. Thereby the jury particularly praised the close collaboration between all partners in a campaign that transcends the boundaries of participants’ own companies.

Risk Assessment Our subsidiary in Argentina has transported a complete drilling rig over a distance of more than156 kilometres to a new location without any accidents. A large part of the route consisted of gravelled road. Wintershall Argentina had used a special road risk assessment to prepare the transportation, which took 9 days in total. With this method, hazard and accident zones will be detected in advance and preventive measures and plans can be developed.

Emergency exercise Wintershall Norge ran an Emergency Response Exercise, simulating a disaster on board of the Borgland Dolphin drilling rig in the Norwegian North Sea. Rescue and crisis intervention teams as well as representatives of local communities also participated in the exercise as it would be the case in a real emergency case.

Safety courses Despite the current low level of activities in Libya, Wintershall is striving to safeguard the skills and abilities of its employees in Libya. That is why several exercises took place again in 2015. To ensure that our Libyan employees are able to handle the gas processing plant in Jakhira, as soon as operations can be resumed, a training course on a simulator was held. Due to the current political situation the plant is out of service since July 2013. Another example is the fire-fighting training that the Emergency Response Team of our Libyan sites completed in Malta. The focus of the three-day training course was on the orientation in the midst of extreme smoke or heat as well as on rescuing injured persons.

Wintershall Corporate Responsibility Report 2015

The safety days in Stavanger and Bergen focused on the right behavior in case of an emergency. Our HSE experts, the local fire department, the Norwegian air rescue as well as our partners provided useful information and practical tips on the subject of health and safety at work and at home.

Emergency and crisis management A clearly defined and interdisciplinary crisis management system contributes to emergency preparedness and crisis resolution. Emergency response plans and regular exercises ensure that the right response is made at any time and at any place in the event of an emergency. This applies not only to fire-fighting, but also to other emergency situations such as the uncontrolled escape of oil or gas. In trainings, our HSE specialists raise employeesâ&#x20AC;&#x2122; awareness of potential risks and prepare them for emergency situations. In addition, we train processes with employees, contractors and authorities and check our emergency systems at regular intervals. Site security and information protection Protection of our business activities and our employees from potential, imminent or existing hazards and risks is one of our core interests. At the same time, we take measures to ensure the security of our data and our know-how. Our globally uniform security concepts create the necessary framework for this. In countries with a higher security risk, in which political or social unrest can suddenly change everyday life, we inform business travellers and local employees about appropriate protective measures and consult them individually, if needed.

Production in Libya significantly cut back Because of the tense security situation in Libya, Wintershall had pulled out all international employees in mid-2014. Wintershall had already to halt oil production in onshore concessions 96 and 97 since mid-2013, due to blockades of the export infrastructure. However, when the infrastructure was available colleagues in the Libyan desert demonstrated our short-notice production capacity. Wintershallâ&#x20AC;&#x2122;s office in Tripoli is used only to a very limited extent at the moment, our employees are predominantly working from home. Wintershall constantly monitors the situation in Libya. The security of our employees, their families as well as of the production facilities is of the highest priority.

responsible Operations

Environmental Protection and Energy Management Wintershall is conscious of its responsibility for the environment. Through clear specifications and systematic management, we aim to reduce risks to people and the environment. We rely on technical innovations and apply high standards to use resources efficiently and reduce emissions and waste largely. Before starting any of our activities, we carefully assess the potential impacts in order to minimize negative ones. Management systems Our company uses a global Health, Safety and Environmental protection (HSE) management system, which also includes all aspects that are important to environmental protection and energy management. It ensures clear structures, processes and responsibilities and is adjusted to local conditions at all sites. This enables us to ensure that we use resources efficiently everywhere and comply with environmentally relevant laws and regulations. Additionally, we are committed to our own and international standards. We constantly raise awareness for the topics linked to environmental protection and efficient energy use among our employees at all levels of the company and maintain a constant dialogue with them to impart the objectives of environmental and energy management. In addition, we provide detailed information through guidelines and training courses. We use regular internal audits to review our performance and analyze the effectiveness of measures taken. A company-wide network, in which environmental experts from all sites are represented, is devoted to improve the environmental performance and to address relevant environmental topics. Wintershall has set itself the goal of having the HSE management system certified according to international standards ISO 14001 (for environmental management) and ISO 50001 (for energy management) at all sites by 2020. This will enable us to raise the quality of the management system as well as legal certainty. Our German sites are already certified to ISO 50001 standard, while those in the Netherlands are certified to ISO 14001. The management systems of our Russian joint ventures Achimgaz and Severneftegazprom are likewise certified to ISO 14001. At our other sites, certification of the environmental and energy management systems is still being prepared or implemented, respectively.

Resource efficiency Wintershall uses resources efficiently to minimize consumption and to prevent waste, where possible. This applies to exploration and production as well as to our administrative sites. Water During the exploration and production of oil and natural gas water from a variety of sources will be used: reservoir water, production water and waste water. Wintershall therefore uses innovative technologies (e.â&#x20AC;&#x2030;g. recycling of drilling fluids) and recycles water in order to minimize water consumption. Each of our relevant sites has a water protection concept. At these production sites, in particular, we conduct systematic risk assessments to minimize risks on the water pathway. In water stress areas, we carry out early-stage analysis of savings potential to minimize water consumption. Overall, we used 28.9 million m3 of water in 2015 (2014: 29.6 million m3). Most of this was reservoir water, which is a co-product of the production of hydrocarbons. Its volume was 13.9 million m3 (2014: 15.3 million m3). We used separator systems to separate around 9.8 million m3 of the reservoir water from the crude oil and natural gas at the surface, cleaned it and fed it back to the reservoir. Production water from our offshore plattforms (totalling 17.5 million m3) we discharged, after cleaning, into the sea in compliance with the legal threshold limits. Furthermore, around 13.1 million m3 of cooling water and 1.5 million m3 of other forms of waste water were produced. They originated, for example, from the construction and operation of a cavern storage facility; from cleaning activities as well as from other sources. At locations where Wintershall is not connected to the public waste disposal network, waste water is cleaned and disposed professionally and in line with regulations.

Water

in million m 3

28.9 29.6

2015

2014

Wintershall Corporate Responsibility Report 2015

Waste management Waste can be generated during the exploration and production of crude oil and natural gas as a result of production processes. Unavoidable waste is recycled and disposed according to regulations. This goes as far as the reuse of complete offshore platforms in the Dutch North Sea, which we re-deploy elsewhere when production ceases. In classifying waste as well as storing, treating, transporting and disposing, we follow the applicable national legislation and additionally comply with international as well as our own standards. Wintershall recovers and disposes waste in an environmentally compatible and appropriate manner even in locations in which there is a lack of corresponding public or private disposal possibilities. In 2015, waste at Wintershall totalled 93,097 tonnes (2014: 52,631 tonnes). Of this total, 63,302 tonnes were hazardous waste (2014: 26,653 tonnes) and 29,795 tonnes non-hazardous waste (2014: 25,978).

Waste in t

The waste volumes rose in 2015, particularly due to an increase of drilling operations in Russia and the decommissioning work at sites in Barnstorf and Bockstedt in Germany. The classification into “hazardous waste” and “non-hazardous waste” is in line with European regulations. We recovered about 43.9 percent of waste as material or as energy, 26.7 percent was incinerated and 29.4 percent landfilled in accordance with regulations. Biodiversity Among the regions in which we operate are sensitive protected areas such as the German Wadden Sea. Before carrying out new projects, we conduct risk assessments and studies to clarify the potential impacts on the biodiversity and the environment. During our activities, we ensure that our projects do not have an adverse effect on sensitive ecosystems or endangered species. Wintershall’s former drilling mud landfill site in Emlichheim, Germany, for example, was successfully recultivated in 2015 as part of a total clearance. A grass landscape with water areas and gravel islands was created on a surface area of around 50,000 m 2. The area is now used for nature conservation and environmental protection purposes.

93,097 52,631

2015

2014

Hazardous waste / Non-Hazardous waste

29,795 tonnes (32 % ) non-hazardous waste

2015 63,302 tonnes (68 % ) hazardous waste

Since 2003, Wintershall has already invested more than 60 million euros in remediation and recultivation of former landfill sites in Germany in an environmentally friendly and landscape-friendly manner. Thus, for example, the former landfill site in Bohlsen is nowadays an ecological niche for threatened and endangered small animals and insects. It contains breeding places for woodlarks, tree pipits and blue-headed wagtails as well as forage and egg deposit areas for insects like the black-veined white, painted lady, water betony or the small fritillary.

responsible Operations

Combined heat and power is one of the most efficient forms of generating energy in terms of using resources sparingly and minimizing harmful emissions.

L6-B is the first unmanned mini-platform by Wintershall. The platform has started to produce natural gas since 2015. Because of the connection to other platforms it functions in a low emission and resource-saving way.

Energy efficiency We use energy in various forms at our sites and in the course of our activities. Therefore we have to ensure that such use is efficient, in order both to protect the environment and to reduce energy costs.

Depending on the location of our production facilities, we obtain electricity from the public grid or produce it ourselves at remote sites. Wherever appropriate, we use micro gas turbines or combined heat and power (CHP) plants.

To achieve this, we have set ourselves the ambitious goal of implementing a comprehensive energy management system at all our sites by 2020. This will enable us to review and continuously improve our energy-related performance. A certified energy management system will ensure, in a transparent manner verified by independent external experts, that our facilitiesâ&#x20AC;&#x2122; use of energy is efficient and hence environmentally friendly. Additional energy-saving ideas made by employees via the companyâ&#x20AC;&#x2122;s suggestion system are implemented.

Energy

Energy consumption in MWh el

546,900 498,511 Steam use in t

492,552 507,288

2015

Our German sites are already certified according to ISO 50001, while certification of the energy management system at other sites is being prepared or implemented, respectively. In 2015, we used a total of 546,900 MWh of electrical energy and 492,552 tonnes of steam for our processes. We use electrical energy, for example, to drive our pumps and compressors. We need thermal energy in the form of steam for crude oil production.

2014

Wintershall Corporate Responsibility Report 2015

Climate Protection and Emissions

Emissions of other substances into the atmosphere

Climate change is one of the main societal challenges. As a company with global operations, we therefore also assume co-responsibility for global climate protection. By using modern technologies and processes, we reduce emissions and hence the impact of our business activity on the environment. As a wholly owned subsidiary of BASF SE, Wintershall reports, in accordance with BASF’s Responsible Care Reporting Guidelines, on environmental emissions arising during the production of crude oil and natural gas. As a member of the International Association of Oil & Gas Producers (IOGP), we have also been explaining our emissions in the IOGP’s “Environmental Performance in the E&P Industry” report since 2006.

In addition to emissions of greenhouse gases, we also determine the emissions of inorganic gases such as carbon monoxide (CO), nitrogen dioxide (NO 2) and sulphur dioxide (SO 2), as well as other substances. These are attributable, in particular, to the combustion of natural gas, heating oil, and diesel to generate power. In 2015, emissions of inorganic substances rose to 3,883 tonnes (2014: 3,612 tonnes).

Emissions of other substances into the atmosphere in t

2015

2014

2013

Inorganic substances

Emissions of greenhouse gases Our business activities give rise to emissions of the following greenhouse gases: carbon dioxide (CO 2 ), nitrous oxide (N 2O) and methane (CH 4). The extent of such emissions depends on the nature of our activities: For example, whether the projects involve development of new fields, construction of connection pipelines or maintenance and repair works affects the quantity of greenhouse gases. In 2015, Wintershall emitted 17 percent more greenhouse gases than in 2014. The largest share represents CO 2 emissions with 1.28 million tonnes (2014: 1.06 million tonnes). In terms of Wintershall production of crude oil, natural gas and condensate, this is equivalent to a specific emission of 0.06 tonnes of CO 2 per tonne of oil equivalent (toe). Moreover, following emissions of other greenhouse gases were produced: 5,080 tonnes of CH 4 (2014: 4,427 tonnes of CH 4) and 20.7 tonnes of N 2O (2014: 19.5 tonnes of N 2O). The increase in the emission of greenhouse gases is mainly due to the increase of production in Norway and Russia.

Sources of emissions in t

2015

2014

2013

913,712

746,426

954,898

57,199

60,755

103,390

309,685

254,896

309,649

5,080

4,427

4,185

Source of CO 2 emissions Production processes Indirect (import / export of electricity / steam) Direct (electricity and steam production) Source of CH 4 emissions Production, undifferentiated

Total inorganic substances

3,883

3,612

3,358

Carbon monoxide (CO)

1,341

1,203

1,403

Nitrogen oxides (NO X ) as NO 2

2,317

2,164

1,717

225

245

237

2,237

1,959

1,633

Sulphur oxides (SO 2 + SO 3 ) as SO 2 Organic substances Non-methane volatile organic substances (NMVOC) Other substances Particular matter

Emissions trading Across Europe, seven plants in our group are subject to legal requirements of emissions trading. They include three production platforms in the Netherlands and the Norwegian production platform, Brage, as well as the sites in Germany. In 2015, our plants were allocated 324,209 emissions allowances (EUA / a) and they emitted a total of 468,451 tonnes of CO 2.

responsible Operations

Climate protection

For example in Libya the associated gas is used for the operation of the drilling facilities as well as power generation.

“No Flaring” – Use of Resources One of our most effective climate and environmental protection measures is, that we as operator stopped flaring of associated gas in routine operations since 2012.

Wintershall is convinced that the E&P industry can also make a contribution to the reduction of emissions. Since 2012, as operator we have stopped flaring of associated gas in routine operations. All existing plants have already been retrofitted; the utilization of associated gas is being directly planned for new plants. We use the associated gas to produce electricity, heat and steam. Depending on the site, this energy is used for the oil production or for the supply of private households. By doing so, Wintershall meets the international standards for the environmentally friendly production of crude oil. In own operated assets flaring is only allowed in exceptional cases, for example when testing a well or as part of maintenance and repair works, in order to comply with our safety standards. In order to underline our commitment, Wintershall, as the largest internationally active German producer of crude oil and natural gas, joined the World Bank’s “Zero Routine Flaring by 2030” initiative in December 2015. The aim of the “Zero Routine Flaring by 2030” initiative, which was launched by the World Bank together with UN General Secretary Ban Ki Moon, is to end the worldwide flaring of associated gas during routine operations by 2030. Members include governments, oil producers and development organizations. Each year, around 140 billion cubic metres of associated gas are flared worldwide during oil production. That corresponds to around 30 percent of the gas consumed each year in the EU. At the same time greenhouse gases are also released: more than 300 million tonnes of CO 2 worldwide. By joining the World Bank initiative, Wintershall wants to encourage more companies and countries to participate. We are convinced that eliminating associated gas flaring can make an important contribution to mitigating climate protection.

Wintershall Corporate Responsibility Report 2015

Employees

Employee age structure

People come first at Wintershall. After all, only healthy and motivated employees can be productive and creative. In this way, they make a significant contribution to the company’s economic success.

Up to and including 25 years (M = 4 %, F = 2 %)

124 Between 26 and 39 years (M = 23 %, F = 14 %)

745 Between 40 and 54 years (M = 26 %, F = 12 %)

769

Global labor and social standards 55 years and up (M = 15 %, F = 3 %)

In our interactions with our employees, we adhere to the applicable national legislation and to the core labor standards of the International Labour Organization (ILO). In addition, we organize working conditions worldwide in line with our self-commitments, the OECD guidelines for Multinational Companies and with local requirements. Employment and strategy As the largest internationally active German crude oil and natural gas producer, Wintershall employed 2,000 employees worldwide at the end of 2015, 32 percent of whom were female and 68 percent male. Due to the asset swap with Gazprom the overall figure has fallen by 26 percent compared with the previous year. Thereby the largest share derives from Europe.

362 Male (M)

Female (F)

Our employment strategy is derived from our corporate strategy and simultaneously contributes to the achievement of our goals. We focus on three directions: outstanding employees, outstanding managers and outstanding working conditions. Therefore, we present ourself as an employer who promotes the career development and lifelong learning of employees and managers in all regions. Furthermore, we seek to offer our employees a safe and attractive working environment. The chapter “Employees” refers to employees active in a company within the BASF Group scope of consolidation as of December 31, 2015.

Employees *

As of December 31, 2015

Training and career entry programs 2,000 2,715

2015

2014

In the global competition for the best employees and managers, we want to recruit qualified talents at a very early stage. We therefore offer university graduates special career entry programs. These cover both technical (SPEAD) and commercial areas (START IN). In 2015, 35 young employees took part in our programs in Germany.

Proportion of women in the total workforce

32 % Female

2015 68 % Male

We also offer students internships in different divisions of our company. In addition, they can prepare practically oriented theses in various subject areas at Wintershall. Moreover, in Germany, Wintershall trains young people as mechatronics engineers, mining technologists and electronics engineers, industrial business management assistants, chefs and restaurant specialists. A total of 52 people were being trained at the end of 2015.

* 2015 figure excluding employees from the divested natural gas trading and storage activities and Wintershall Noordzee B. V.

responsible Operations

Work-life Management

Apprentices and Entry programs As of December 31, 2015

Apprentices

52 SPEADS (32) and START IN (3)

Career development and lifelong learning We can meet new challenges successfully if our employees and managers recognize the importance of lifelong learning and continually develop their knowledge and skills. We therefore attach great importance to individual further development. In the annual employee appraisal, employees and managers outline prospects for individual professional development together. The concept of development paths assists us in highlighting possible career models across the company. Combined with needs-oriented further training, this enables us to meet external requirements. Diversity Mixed teams work more successfully. Wintershall, as a company with global operations, therefore focuses on diversity, both in competition for specialists and in its day-to-day activities. We consciously aim to benefit from the different outlooks that our employees contribute on account of their different nationalities, cultures, generations, genders and experiences. Our employees hail from over 50 nations. Most of our managers abroad are locals. We promote our cultural diversity through, for example, worldwide staff assignments and intercultural skills training. About 19 percent of our management positions are currently held by women. We want to help our parent company, BASF, achieve its self-defined goal of increasing the proportion of women in management positions to between 22 and 24 percent by 2021. We do not use a quota system in pursuit of this goal; instead, we organize everyday work in such a way that career and family life can be combined as easily as possible.

A work-life balance is important in maintaining performance and motivation. Wintershall offers employees a high degree of flexibility through adjustable working time models, such as part-time working, teleworking and job-sharing. This opens up many possibilities for finding an optimum balance between professional and private obligations. In addition, we support our employees at all our sites through tailor-made measures and programs to further improve their work-life balance. These include for example sport programs, assistance for child care and common social events. Health management Occupational safety and health protection are not only part of our social obligation, but also make a contribution to securing the companyâ&#x20AC;&#x2122;s future. We focus on three key areas: occupational health prevention, health promotion and medical care in the event of emergencies. In order to ensure first aid in an emergency, 814 first-aiders and paramedics, who hold a nationally recognized certificate in first aid, are deployed at all Wintershallâ&#x20AC;&#x2122;s sites. Depending on local requirements, our sites place different emphases in organizing health management programs. These range from preventive medical examinations to health promotion activities. To force compliance with our health and safety standards, we conduct audits on a regulary basis. The results of our health protection activities were again positive this year. As it was already the case in previous years, no employee succumbed to an occupational illness in 2015. Furthermore, we performed 862 medical examinations as well as numerous health activities, such as health seminars, to promote the awareness among our employees. As a globally active company, Wintershall fully prepares its employees for trips and assignments abroad. Our company physicians provide intensive travel medicine care for employees posted abroad, including the required vaccinations. Special HSE checklists and hazard assessments for each site complete the preparation. In remote areas, where the local medical infrastructure does not meet international standards, Wintershall provides to medical care by a company physician or a certified establishment.

Wintershall Corporate Responsibility Report 2015

At all Wintershall sites regularly staff meetings take place and therefore provide the opportunity to engage in an active dialogue.

Mario Mehren, Chairman of the Board of Executive Directors, met with twelve employees to share experiences.

Dialogue

Employee survey Wintershall conducts global employee surveys every three years. These surveys involve issues like health, diversity, leadership and further development. Employees and managers in all regions discuss the results together and formulate measures for improvement.

The ideas, abilities and experiences of the people that work for us are an important resource for our company. Wintershall therefore maintains an active dialogue with employees and employee representation at all levels. The reciprocal communication is based on honesty and respect. Collaboration with employee representatives Employer and employee representatives maintain an open and trusting dialogue at Wintershall. Our company respects trade union freedom of association and the right to collective bargaining. It is our understanding that co-determination helps employees to assume co-responsibility for the mid-term to long-term development of the company as a whole. Dialogue between employees and managers Wintershall continually holds staff meetings and provides information about current developments and organizational changes through events or on the company intranet. Employees also have a regular opportunity to evaluate their line managers directly. This provides our managers with important feedback about their personal strengths and areas in need of attention, enabling them to optimize their leadership behavior accordingly, with a view to responding better to employeesâ&#x20AC;&#x2122; needs.

More than 60 percent of the workforce took part in the companywide employee survey conducted in June 2015. It revealed that employees were generally very satisfied, but also provided concrete pointers to areas that we can optimize. What is particularly pleasing is that most employees would recommend Wintershall as an employer. Further information about employment under www.wintershall.com / career.html

responsible Operations

Mission Nutrition – our global health campaign

Nutrition is crucial to maintaining health and work capacity. Our global health campaign in 2015, entitled “Mission nutrition – Healthy nutrition” took account of this. Our aim was for our employees to develop more awareness of what does and does not do them good in terms of their nutrition – whether at lunch in the canteen, cooking at home, choosing drinks or snacking while out and about. The campaign took into account the fact that the regions in which our company is represented have different culinary traditions.

Part of the campaign, for example, involved talks about healthy nutrition and correct nutrition under stress. There were also individual offerings; for example, employees were able to have their blood sugar and cholesterol levels measured and obtain personal tips about nutrition as well as medical advice. At the same time, all company canteens had healthy campaign meals on the menu.

As part of the global health campaign, the canteen in Kassel, Germany, offers additionally “vital plus” meals.

Responsible Cooperation

Dialogue Social commitment

51 55

Responsible Cooperation

We rely on open cooperation.

Wintershall sees itself as a responsible member of society. Broad acceptance of our activities is the basis for our corporate success. That is why we foster an intensive exchange with our stakeholders and become involved in the regions in which we operate. Dialogue Wintershall is in constant dialogue with various stakeholders. These include all people and institutions that are potentially affected by our activities, have an interest in our company’s business success or exert an influence on it. Amongst our relevant stakeholders are neighbors, authorities and political decision-makers, industry associations and networks, media, academic institutions as well as our employees and business partners. In general, there is a constant increase in expectations in terms of transparency and involvement. We therefore provide regular and comprehensive information about our company’s activities. We seek to understand the concerns and positions of individual stakeholders. This exchange helps us to identify trends at an early stage and to respond to them accordingly. The form and intensity of individual measures varies, depending on the respective target group, the location and specific topics. Partners We are in a constant dialogue with our business partners to ensure that we are able to meet the challenges of the future together. The Scientific Technical Cooperation has been an important dialogue forum with our Russian Partner Gazprom since 1992. Within the framework of this program, we have been addressing many issues from efficient oil and gas production to environmental protection and process safety. In 2015, the focus was the further development of the corporate safety culture. In addition to this institutionalized forum, numerous other topicspecific activities take place. For example, on the initiative of our subsidiary Wintershall Russia a workshop took place where

experts for health, safety and environmental protection (HSE) discussed possible further developments of the HSE management systems and HSE measures. In Norway, the HSE Brage Forum, a format launched in 2014 to intensify the exchange with our contractors, was held again in 2015. It contributes to the continuous improvement of HSE performance on the Brage production platform. Media Our traditional dialogue format with the media is the annual press conference. In 2015, this took place in the context of the World Gas Conference in Paris. In his function as Wintershall’s new Chairman of the Board of Executive Directors, Mario Mehren explained the company’s growth targets against the background of changing markets and technological challenges. Press trips also support the exchange with media representatives. Last year, for example, twelve young German journalists got to know our company’s work in Argentina. The aim of our activities is to increase transparency and to provide information about our business model. Wintershall’s participation in major industry events and our presence on social media like Facebook, Twitter and Youtube also enable us not only to deepen the dialogue with media and interested public, but also to interact with them promptly and individually.

Wintershall Corporate Responsibility Report 2015

OVERVIEW OF STAKEHOLDERS & ACTIVITIES IN 2015

Continuous exchange, participation in internal working committees

Participation in national and international industry associations & initiatives

Topic specific exchange

BASF

NETWORKS & ASSOCIATIONS

Participation in conferences

SCIENCE

PARTNERS

WINTERSHALL IN DIALOGUE

LOCAL COMMUNITIES

Bilateral exchange, open days, project-related discussion and information events

EMPLOYEES

POLITICAL DECISION-MAKERS

MEDIA Bilateral exchange, participation in hearings, own discussion events

Annual press conference, press trips

Employee survey, staff meetings, internal media

Responsible Cooperation

For the past 60 years Wintershall produces crude oil at Landau, Germany. Horsehead pumps as well as grape vines are part of the everday picture.

From apprentice to the board (here CEO Mario Mehren) â&#x20AC;&#x201C; all German Wintershall employees contributed through a postcard campaign to the political discussion.

Neighbors We feel closely connected to local people. The open exchange with our neighbors provides the basis of mutual understanding and acceptance of business decisions. We maintain constant dialogue by being available at our locations at all times and providing information about our activities at an early stage. Such transparency creates trust.

In Brussels, the further development of European energy and climate policy dominated political discourse and our work last year.

Also in 2015, we invited to numerous events. In Palatine Landau, where Wintershall celebrated its 60th anniversary of crude oil production, the entire site opened its doors. Residents and interested parties had a chance to get an insight into the management and monitoring of the production and treatment processes. They also could take a very close look at the most important machinery, ranging from the winch to the slush pump through to well completion technology. Politics Wintershall maintains representations in Berlin and Brussels, via which we foster a continuous exchange with political decisionmakers and with associations and non-governmental organizations. The focus is on economic, energy and environmental topics as well as on foreign affairs. Furthermore, Wintershallâ&#x20AC;&#x2122;s subsidiaries contribute to local discussions. This enables us to make a constructive contribution to shaping the political framework for our business activities.

In Germany in 2015, Wintershall promoted, in particular, for a stable legal framework for domestic production. In this context, we also participated in the postcard campaign launched by the German Oil and Gas Industry Association (WEG). Wintershall employees at German locations sent over 11,600 personally written postcards to elected representatives in the German states and at federal level. The aim was to raise political decisionmakersâ&#x20AC;&#x2122; awareness of the impact of the current debate about using hydraulic fracturing. Furthermore, we continued our engagement in the Multi-Stakeholder Group of the international Extractive Industries Transparency Initiative (EITI). The aim of EITI is to increase transparency about cash flows and government revenues from the commodities sector. This should enable public dialogue on government revenue and the use of funds from the production of natural resources. To this end, companies involved in the production of commodities disclose their payments (tax payments, royalties, etc.) to the government authorities, who in turn publish the data on received revenues.

Wintershall Corporate Responsibility Report 2015

Wintershall hosts female students from Abu Dhabi

For one week, eight female students from the Petroleum Institute in Abu Dhabi travelled throughout Germany to discover the Wintershall world and learn about innovative technologies â&#x20AC;&#x153;made in Germanyâ&#x20AC;?. During this trip, the students visited the headquarters of Wintershall and its operative centre for domestic oil and gas production in Barnstorf. It was particularly interesting for the budding geologists, mechanical technicians, electrical engineers and chemical technicians to receive concrete insights into everyday professional practice in discussions with a Wintershall engineer. In addition to the Wintershall sites, the young women also visited the energy research centre (Energie-Forschungs-

The students visit the core repositories at Barnstorf, Germany.

zentrum Niedersachen) in Goslar and the Clausthal University of Technology. They likewise visited the Wintershall parent company BASF, where they learned more about the variety of possible uses of crude oil. The cooperation between the Petroleum Institute in Abu Dhabi and Wintershall underlines the importance of the region Middle East for Wintershall. By sharing expertise and knowledge with students, Wintershall supports the development of excellent research and innovation centres like the Petroleum Institute. Wintershall sets great store by knowledge transfer to younger generations, as the industry needs highly qualified specialists in the future.

Responsible Cooperation

Academia The focus of our exchange with universities and scientific institutions is on technical developments and challenges in exploring and producing hydrocarbons. On the one hand, we regularly present and discuss our work at conferences and symposia. Such as the annual meeting of the German Scientific Society for Oil, Gas and Coal (Deutsche Wissenschaftliche Gesellschaft für Erdöl, Erdgas und Kohle e.V.) at national level, and, at conferences and workshops organized by the Society of Petroleum Engineers (SPE), the European Association of Geoscientists and Engineers or the Network of European Oil Producers, the Production Engineering Association (PEA) at international level. On the other hand, we also actively use digital exchange platforms like that of the SPE. Our engagement at the Energy and Geoscience Institute at the University of Utah (USA) also serves the purpose of cross-industrial handling of current topics, such as geological shale structures in South America. Networks Our involvement in relevant national and international networks and associations is also an important source of information and a communication channel. In Germany, our headquarter, we contribute, among others, to the work of the German Oil and Gas Industry Association. Relevant issues in 2015 included the handling of disused pipelines, the importance of energy efficiency figures and energy audits. At international level, for example, we play an active part in the different committees of the International Association of Oil and Gas Producers (IOGP). Wintershall thus actively participates in the Oil Spill Response Joint Industry Project under the umbrella of IOGP and IPIECA, the global industry association for environmental and social issues. The project was launched in 2011 following the Deep Water Horizon disaster in the Gulf of Mexico in 2010. The primary objective is to identify and develop suitable technologies and to define concepts for preventing and dealing with oil spills.

Social commitment Wintershall feels connected to the regions in which it operates and supports them in their economic and social development. Dialogue with the local communities enables us to discover the challenges, which exist and how we can contribute to solve them. We recruit, where possible, local workers for our company’s business activities. Thereby we give a boost to the local labor market. In addition, we get involved in various ways in cultural and social spheres. We also support projects linked to education as well as science and technology. Education, Science and Technics As a technology-oriented company, we set great store by promoting interest in the natural sciences and technology. We therefore support projects that aim at enthusing children and adolescents for these topics. Furthermore, we also support projects involving the promotion of the future scientists. Social participation Wherever we operate, we see ourselves as a neighbor who helps when needed. At our sites, we support regional projects that benefit disadvantaged people. Thereby we improve their chances of a promising future and enable them to participate better in social life. Art and culture Art and culture are essential for one and every society. They transport values, afford an insight into history and contribute to development. We therefore support art, culture projects at our locations, and thereby contribute to increasing of the quality of life at a local level. Further information about our social commitment under www.wintershall.com/company /commitment.html

Wintershall Corporate Responsibility Report 2015

Our Commitment in 2015

Research lab: Science Bridge Pupils and teachers in Northern Hesse can use Science Bridge, the mobile pupils’ laboratory, to conduct sophisticated experiments in the natural sciences, particularly in relation to genetics and molecular biology, biochemistry and biotechnology. Experimental work at school is made tangible by this learning-by-doing strategy. Wintershall is involved as a sponsor for Science Bridge e.V.

TeknoLab TeknoLab in Stavanger in Norway is working closely together with schools in this region. The organization assists schools in making teaching on all matters pertaining to technology, mechanics, design and mathematics as exciting as possible.

Young Vision Award Since 2013, the Young Vision Award honors students from Germany and Russia, whose research projects aim to link ecology and cost-efficiency in oil and gas production. This competition is a joined project of Wintershall and Gazprom International. In 2015, a team from the Nizhny Novgorod region convinced the jury with their project for cleaning of phenol-containing wastewater using the combined method of adsorption and water-air oxidation.

Educational Scholarship In the Argentinian provinces of Tierra del Fuego and Neuquén, Wintershall supports the local population’s social and economic development – together with its partner Total Austral. Individual measures include, for example, the award of more than 40 scholarships to secondary school pupils to make their graduation possible.

Responsible Cooperation

Circus Upsala From the streets to the big top – that is what the Saint Petersburg project “Upsala Circus” offers children from difficult social backgrounds, some of whom live on the street. Its goal is to integrate children and youngsters back into society by means of circus pedagogy. It offers them a new perspective by giving them a roof over their head and allowing them to attend school regularly. Wintershall is one of the supporters of the project.

Art Collection In Norway, Wintershall is collecting works by local artists, thereby supporting their development. The collection now totals 82 works, which are located in Wintershall offices in Bergen and Stavanger.

Music Festival

Traditional Christmas donation Wintershall funds numerous projects every year with our traditional Christmas donation. Instead of giving Christmas presents to customers and business partners, we donate to charitable and humanitarian institutions in regions where we operate. We supported relief projects in Germany, Russia and Libya with a total of 50,000 euros in 2015 alone.

In our home town of Kassel, we have been promoting the “Culture Tent” (Kulturzelt) for more than 20 years. This music festival, which takes place every year in summer, is one of the region’s annual event highlights.

Outlook

Corporate Responsibility requires long-term thinking and continuous improvement processes. This is a long-term journey.

Responsible Growth Sustainability Management

Wintershall works constantly on the further development of sustainability management. Our first step is the focus on the integration of sustainability into business processes and the E&P management system. By 2017, we will have developed dedicated Guidelines & Standards, which ensure the integration in the decision-making processes as well as provide guidance to our employees.

Sustainability Indicators

To monitor and steer the progress of Wintershall’s sustainability activities, we will develop and establish further SD-KPIs and integrate them in an indicator system by 2020.

Purchasing processes

Our aim is to ensure sustainability along the entire value chain. Therefore, we participate in the initiative “Together for Sustainability” (TfS) to assess our existing suppliers and contractors. Furthermore we will develop an instrument that helps us even better to evaluate the sustainability performance of our new suppliers and contractors by 2018.

Responsible Operations Environmental protection, Energy and Safety

Diversity

Wintershall continues with the global process of certification of the management system of health, safety and environmental protection (HSE) according to ISO 14001 (environmental management), 50001 (energy management) and OHSAS 18001 (health and safety management) at all locations. By 2020, the certification-process acording to this standards will be completed. Promoting diversity is one aspect of our corporate culture. In 2015 for the first time, BASF, our parent company, set itself global goals for increasing the percentage of women in leadership positions. BASF aims to increase this figure to 22–24% worldwide by 2021 and we will contribute to this goal.

Responsible Cooperation Social Commitment

Social commitment has a tradition at Wintershall. To ensure that it reflects more strongly our stakeholders’ and our needs, we will seek to conduct our activities in a more impact-oriented way. By 2020, we will introduce a global framework, incl. evaluation and management tools.

Sustainable Reporting

Since 2007, Wintershall has published an HSE report for interested parties to inform about our activities. By 2020, we will expand it to a comprehensive Sustainability Report according to industry and international reporting guidelines IPIECA and GRI.

Wintershall Corporate Responsibility Report 2015

CONTACT

We look forward to receiving your questions, suggestions or comments on the Corporate Responsibility Report 2015. Wintershall Holding GmbH Friedrich-Ebert-Straße 160 34119 Kassel Germany Corporate Sustainability Nadja Brauhardt sustain @ wintershall.com External Communications / Media Relations Stefan Leunig presse @ wintershall.com Tel.: + 49 561 301 - 0 Fax: + 49 561 301 - 1702 www.wintershall.com

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Responsible for the content Wintershall Holding GmbH Friedrich-Ebert-Straße 160 34119 Kassel, Germany Concept of content and coordination Wintershall Holding GmbH Concept and design Heisters & Partner, Corporate and Brand Communication, Mainz, Germany Translation KERN AG, Kassel, Germany Photography BG RCI / Armin Plöger (p. 39) Odfjell Drilling (p. 13) Thaddeus Strode, The Forgiven and the Unforgiven in an 80s Field (p. 57) Wintershall / Morten Berentsen (p. 10) Wintershall / Arthur Bondar (p. 56) Wintershall / Marc Borufka (p. 45) Wintershall / Tarek Burgan (p. 39) Wintershall / Christian Burkert (p. 43, 54) Wintershall / Jack Dabaghian (p. 8) Wintershall / Sven Doering (p. 35) Wintershall / Andreas Fischer (p. 56) Wintershall / Justin Jin (p. 16, 19, 21, 32) Wintershall / Danil Khusainov (p. 19) Wintershall / Alejandro Kirchuk (p. 22, 25, 26) Wintershall / Heiko Meyer (p. 53) Wintershall / Thor Oliversen (p. 13, 40, 57) Wintershall / Frank Schinski (p. 2, 48) Wintershall / Bernd Schoelzchen (p. 48, 49, 57) Wintershall / Torsten Silz (p. 53) Wintershall / Harry Soremski (p. 57) Wintershall / Flying Focus / Herman Ijsseling (p. 43) Wintershall (p. 7, 8, 32, 33, 34) Print Werbedruck GmbH Horst Schreckhase, Spangenberg, Germany

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