BP Exploration (Caspian Sea) Ltd. Environmental Statement 2000

FOREWORD

In 1994 the signing of Production Sharing Agreement with the Government of Azerbaijan allowed a consortium of 11 oil companies (AIOC), operating in partnership with the State Oil Company of Azerbaijan Republic (SOCAR), to develop 3 major oil fields in the Azerbaijan Sector of the Caspian Sea.

As lead partner in this development, BP has played a major role in all aspects of exploration and production in this area, including the transportation of hydrocarbons through Georgia to the Supsa Terminal at the Black Sea coast. Following the merger of BP and Amoco in 1999 the company assumed operatorship over the consortium.

BP is fully committed to the highest standards of environmental performance and is equally committed to ensuring all activities are managed towards the goal of no damage to the environment. In managing BP's environmental performance the company will ensure that it takes practical and commercial steps to minimise the impacts of activities on the environment, and that full account will be taken of biodiversity, society's demands and the needs of future generations.

This publication presents the environmental overview of BP's production activities (AIOC operations) in Azerbaijan and Georgia for 2000. These operations have been certified to ISO 14001, the international standard of environmental management, which is based on continual improvement through the assessment of impacts, setting of targets, operational controls and implementation of monitoring programmes to measure progress.

BP will continue to ensure it plays a leading role in protecting the environment in all its activities in Azerbaijan and Georgia. David Woodward President, AZBU

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Health Safety &Environmental Policy

David WoodwardBusiness Unit Leader BP AzerbaijanSeptember, 2001

We fully endorse the BP Group Policy and are committed to our worldwide corporate goals: no accidents, no harm to people and no damage to the environment. Getting HSE right is a fundamental part of our business in the Caspian Sea Region and BP through our operations in exploration, development, extraction and transporting of oil & gas fully supports its goals and requirements. In meeting with this policy we will:

1. Expect all personnel to demonstrate commitment to, and leadership in, health, safety and environmental (HSE) protection, performance and compliance.

2. Manage HSE performance in compliance with the expectations in the BP "Getting HSE Right" management system.

3. Audit the environmental management system against ISO 14001.4. Inform our employees, contractors, partners, stakeholders, government agencies and the

public of relevant HSE aspects of our operations. Openly listen, consult and respond to their concerns.

5. Endeavour to continuously improve HSE performance.6. Meet or exceed applicable HSE legislation, regulations and company requirements.7. Ensure our employees and contractors are familiar with our HSE systems, and are

competent and trained to carry out their work safely and with due regard for the environment.

8. Provide employees with a safe place to work.9. Maintain a commitment to incident and pollution prevention, maintain emergency

response plans and resources, and manage emergency situations resulting from ouractivities.

10. Set annual HSE objectives and targets and openly report our performance. Audit compliance with our policies and take corrective action where appropriate.

No task is so important that we cannot take time to plan and implement it in a safe and environmentallyresponsible manner.

TERMS AND ABBREVIATIONS

ACG Azeri, Chirag and Guneshli

AIOC Azerbaijan International Operating Company

AZBU Azerbaijan Business Unit

Chirag1 Offshore production platform in the Chirag oil field

EIA Environmental Impact Assessment

EMS Environmental Management System

Environmental Aspect An element of our activities, which interacts with the environment

Environmental Impact Any change to the environment resulting from our activities

FFD Full Field Development

GHG Greenhouse gases

GIOC Georgian International Operating Company

HSE Health, Safety and Environment

ISO 14001 International Standard for Environmental Management

mmscf million standard cubic feet

NREP Northern Route Export Pipeline

Sangachal Receiving terminal located in Azerbaijan on the Caspian Sea coast

SOCAR State Oil Company of Azerbaijan Republic

Supsa Export terminal located in Georgia on the Black Sea coast

WIP Water Injection Project

WREP Western Route Export Pipeline

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INTRODUCTION

BP Exploration (Caspian Sea) Ltd. Activities

BP Exploration (Caspian Sea) Ltd. is an upstream division of the BP Group - one of the world’s largest oil and petrochemical groups involved in oil and gas exploration and production, oil refining and marketing, manufacturing and marketing chemicals and gas and power generation. Its Azerbaijan Business Unit operates in Azerbaijan and Georgia under a series of Production Sharing Agreements (PSAs) signed with the Government of Azerbaijan and a Host Government Agreement with Georgia. The PSAs cover the development of the following prospective structures in Azerbaijan sector of the Caspian Sea:

• Azeri, Chirag and Deepwater Guneshli • Shah Deniz • Inam • Araz, Alov, Sharg Current operations of Azerbaijan Business Unit embrace the initial development of the Chirag field under the

PSA to produce oil and gas from Azeri, Chirag and deepwater Guneshli. The future plans include the Full Field Development of these three fields, accompanied by the expansion and modification of the existing and the construction of the new facilities, as well as the progress of the projects under the other PSAs. The current operational assets of Azerbaijan Business Unit of BP in Azerbaijan and Georgia, which are the focus of this publication are AIOC assets and include the following:

Chirag-1 offshore platform, connected by the sub-sea oil pipeline to Sangachal Terminal on the Caspian Sea coast and sub-sea gas pipeline transporting associated gas to the compression facilities of the Azerbaijan State Oil Company (SOCAR) in the Oily Rocks development. From Sangachal Terminal oil is pumped via two pipelines: Northern Route Export Pipeline (NREP) towards the Russian border and Western Route Export Pipeline (WREP) across Azerbaijan and Georgia to Supsa Terminal on the east coast of the Black Sea. From here oil is pumped via a sub sea pipeline to the floating loading buoy where it is loaded to tankers and can be delivered worldwide. BP Exploration (Caspian Sea) Ltd. Environmental Management System

BP Exploration (Caspian Sea) Ltd. recognises its responsibility to protect the environment while conducting its operations in line with the corporate goal ‘no damage to the environment’. That is why every operational site of BP Exploration (Caspian Sea) Ltd. is implementing an integrated Environmental Management System (EMS). This system includes conditions from the PSAs signed with the government of Azerbaijan and is based on two sets of guidelines:

1) Getting HSE Right, which is the BP corporate policy and expectations with regard to HSE performance

2) International Organisation for Standardisation ISO 14001 Standard for Environmental Management

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ISO 14001

ISO 14000 is a series of international standards aimed at helping companies establish an Environmental Management System (EMS). ISO 14001 is the first in this series of standards and specifies the requirements for such a system.

ISO 14001 requires that environmental management system be based on compliance with regulations, prevention of pollution, and continual improvement. It makes environmental management a part of everyday operations in a company and requires the commitment of top-management and the participation of operations personnel. This makes environmental management the responsibility of all, and not just environmental specialists. Compliance with ISO 14001 requirements is ensured by regular internal and external audits of the environmental performance of each operational site and is verified by the ISO 14001 certification.

BP Exploration (Caspian Sea) Ltd. was awarded the ISO 14001 certification on 23rd November 2000 by Moody International Certification. A key goal of ISO 14001 is that the relevant aspects of the company’s environmental performance are available to the public. That is why we publish this Environmental Statement, which describes the activities of our operating assets, potential environmental effects of these activities, our objectives and targets and our performance in reaching these objectives and targets. It contains reporting data for the year 2000 and future statements will be issued annually to show trends and progress over time.

Any comments, queries, requests for information or copies of statements should be addressed to:

Environmental Department BP Exploration (Caspian Sea) Ltd. Villa Petrolea II 2 Neftchilar Prospekti (Bayil) 370003 Baku Azerbaijan Telephone: +(994 12) 97 90 00/97 97 16 Fax: +(994 12) 97 97 29 The next statement will be issued by the end of

the 1st quarter 2002 covering the period January to December 2001.

Elements of an ISO 14001 EMS

The ISO 14001 standard requires that an organisation’s EMS meets the following minimum criteria: 1. Environmental Policy

The organisation’s environmental policy to include commitments to continual improvement and pollution prevention and to be made available to all employees and the public.

2. Planning (a) Identify significant environmental aspects and impacts of its activities (b) Identify the legal requirements that govern those activities (c) Set specific and measurable targets for reducing the identified impacts (d) Establish environmental management programs to achieve stated targets and objectives

3. Implementation and Operation (a) Define roles and responsibilities (b) Ensure training and competency of personnel whose work can cause significant environmental impacts (c) Communicate internally and externally (d) Document the EMS (e) Establish procedures for document control (f) Establish operational control systems (g) Maintain emergency response preparedness

4. Checking and corrective actions (a) Monitor and measure performance (b) Handle and investigate nonconformance (c) Maintain procedures for handling

environmental records (d) Conduct periodic audits

5. Management Review Conduct periodic management review of EMS effectiveness, progress towards objectives and targets, and continual improvement efforts.

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ENVIRONMENTAL ASPECTS AND IMPACTS OF OUR OPERATIONS

An environmental aspect is any element of an organisation’s activities, which can interact with the environment. Any positive or adverse change to the environment caused by an organisation’s activities is an environmental impact. BP Exploration (Caspian Sea) Ltd. identifies the environmental aspects and impacts of its operations, as required by ISO 14001, and assesses them to determine their significance. The assessment is based on the seriousness of possible impacts in terms of:

• public health • environment • legal compliance of the company • reputation of the company • frequency of occurrence • ability to control the impact

Aspects and impacts are summarized in site-specific aspects and impacts registers and serve as a basis for development of the site-specific environmental improvement plans.

ENVIRONMENTAL OBJECTIVES AND TARGETS

Based on the aspects and impacts assessment we set objectives and targets every year to meet the commitments to our Health, Safety and Environment Policy and to improve our environmental performance. Some of the objectives and targets are specific to BP AzBU operations, while others are related to the higher-level expectations and aspirations within the BP Group. Objectives and targets set for the year 2000 together with the actual performance, and objectives and targets set for year 2001 are represented in the following table.

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BP Exploration (Caspian Sea) Ltd. AIOC operations 2000/2001 Environmental Objectives and Targets

Objective 2000 Measured Target Actual Performance

2000 2001 Measured Target

Maintain and Continually Improve Environmental Management System Conforming to ISO 14001 Standard Ensure that Projects are Subject to Environmental Impact Assessment and Identified Impacts are Managed or Mitigated

ISO 14001 certification of by end 2000 Progress/complete EIA for FFD as required

AZDP certified to ISO 14001 on 23 November 2000 The ACG FFD Environmental and Social Overview Document completed and published by the end 2000

Maintain ISO 14001 EMS through the implementation of Environmental Improvement Plans Progress/complete FFD EIA’s as required

Meet or Exceed Legislation and Regulatory Requirements

No Notices of Violation during 2000

There were no notices of violations served during 2000

No Notices of Violation during 2001

Minimise Impact to Air Improve Energy Efficiency

GHG emissions target for 2000 of 420,000 net tonnes CO2 equivalent Average flaring of 38.1 mmscf per day Identify and catalogue all uses & sources of halocarbons and develop halocarbon strategy by 4Q 15% improvement in energy efficiency from 2000 baseline to be achieved by 2010

412,000 net tonnes of CO2 equivalent greenhouse gas emitted Average flaring of 37.7 mmscf per day achieved Sources catalogued, group halocarbon strategy developed Energy efficiency improvement initiatives continue to be implemented, progress ongoing

GHG emissions target for 2001 of 413,000 net tonnes CO2 equivalent 10% reduction of average flaring as compared to year 2000 by 4Q 2001 15% improvement in energy efficiency from 2000 baseline to be achieved by 2010

Minimise Impact to Land and Water. Reduce Impact to Environment due to Spills

No more than 5 spills >1 bbl (based on 15% reduction) No oil or chemical spills from production operations No chemical or fuel spills as a result of the Chirag WIP Implement a strategy for management of chemicals by 4Q

Only 2 spills greater than 1 barrel recorded. Drilling had no spills > 1 barrel recorded. Hazardous materials management procedure implemented through EMS

No oil spills >1 barrel No oil or chemical spills from production operations No chemical or fuel spills as a result of the Chirag WIP Zero cuttings discharge for synthetic based mud from Chirag by end 4Q Implement a strategy for management of chemicals by 4Q

Reduce Impact to Environment due to Waste Disposal

Implement waste management plan to ensure compliance with corporate and regulatory requirements by 4Q

Waste management strategy being developed.

Define needs and develop an integrated waste management strategy for Azerbaijan and Georgia

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BP EXPLORATION (CASPIAN SEA) LTD. ASSETS AND OPERATIONS

Chirag-1 Platform

Chirag-1 platform is located in the Azerbaijan sector of the Caspian Sea approximately 120 km east of Baku. It is a part of an offshore development, which includes the Azeri, Chirag and deepwater Guneshli fields. Initially, it was a non-operating facility of the State Oil Company of Azerbaijan Republic (SOCAR) refurbished by Azerbaijan International Operating Company (AIOC), a consortium created to fulfill the PSA for the development of these fields. It produced its first oil in November 1997. After acquiring single operatorship over the AIOC in 1999 BP Exploration (Caspian Sea) Ltd. became the operator of the platform. By the end of 2000, total production from the platform was 11.35 million tonnes, with average production for 2000 of 100,000 barrels of oil per day.

Chirag-1 is a steel jacket platform with a base

structure 130 m high and weighing 1200 tonnes, sitting on piles sunk below the seabed. It is connected by a 48 km gas pipeline to the SOCAR facilities at Oily Rocks offshore development, and by a 176 km oil pipeline to the Sangachal Terminal. By the end of year 2000, 11 production and 4 water injection wells had been drilled from the platform, with an average depth of approximately 3000 m. The platform houses drilling, production and processing facilities, utilities and accommodation areas. It has been designed to accommodate 110 personnel and handle up to 18,300 tonnes of oil and 1.7 million cubic meters gas per day.

Sangachal terminal

Sangachal Terminal is located on the western shore

of the Caspian Sea and receives all the oil piped from the Chirag-1 platform. The terminal began operations in 1997 and has four storage tanks with a total capacity of 650,000 barrels of oil. The terminal lies approximately 37km south of Baku and covers an area of roughly 255 hectares.

The product extracted by the Chirag-1 platform is made up of a combination of gas, oil and water, which need to be separated out for export. Following initial separation on the Chirag-1 platform, further separation is carried out at Sangachal terminal before the oil is pumped to either the Western Route or Northern Route Pipelines for export. Metering the oil ensures any leaks occurring during export are detected and can be quickly dealt with.

Northern Route Export Pipeline (NREP)

From Sangachal the NREP carries oil up the Caspian Sea coast to the Russian border where a Russian oil company (Transneft) takes over operatorship. The pipeline then continues through Russia to the Black Sea port of Novorossiysk. The first 231km of the pipeline lies within Azerbaijan and is under BP control.

Chirag 1 Platform

Sangachal Terminal

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Unlike the Western route pipeline, there are no additional pumping stations along the BP controlled section of the Northern Pipeline, although there are 2 injection stations (Sumgayit and Siyazan), and a metering station at Shirvanovka at the Russian border.

The pipeline was commissioned in October 1997 and is designed to carry 115,000 barrels of crude oil per day.

Western Route Export Pipeline (WREP)

The WREP carries oil from Sangachal through Azerbaijan and Georgia to the terminal at Supsa. Operatorship of the pipeline, commissioned in December 1998, is divided between the AIOC consortium described earlier and its affiliate in Georgia - Georgian Pipeline Company.

The pipeline stretches for 830km across the two countries and is designed with a capacity of 115,000 barrels of crude per day. In order to minimise the environmental impact of the pipeline it has been buried along most of its length.

Pumps are used to push crude oil through the pipelines. Pumping stations, pressure reduction stations, injection and metering stations are all used to assist in ensuring the safety and reliability of the oil supply. There are 2 pumping stations located along the Azerbaijan section of the Western Route Pipeline and a further 3 pumping stations and 2 pressure reduction stations along the Georgian section.

Supsa

The western pipeline ends at Supsa Terminal on the shores of the Black Sea. Located here are four oil storage tanks with a total capacity of 950,000 bbl (barrels). Oil tanks are bunded (contained) in order to prevent spills, and the facility is equipped with wastewater treatment facilities to minimise pollution. Tree planting and landscaping have also been carried out to reduce impacts on the local environment.

As well as storage facilities, Supsa Terminal operates an offshore loading system for transferring the crude oil to tankers. A pipeline from the terminal connects to a floating loading buoy approximately 3km offshore. From here tankers are able to load crude for export worldwide.

Supsa Terminal

Siyazan Injection Station along NREP

Pumping Station 11 along WREP in Georgia

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ENVIRONMENTAL PERFORMANCE 2000

Within the ISO 14001 Environmental Management System we strive for continuous environmental improvement of our performance. The aim to minimize our impacts on the environment is reflected in targets set for every year. We developed Environmental Management Programmes for every operating site and a set of registers and environmental procedures to achieve these targets. A system of monitoring, environmental inspections and audits of our facilities allows us to take timely corrective actions and develop opportunities for improvement.

By the end of the 2000 we achieved our target to operate within the regulatory requirements and received no notices of violation during 2000. We keep the legislative compliance registers for every site and update them regularly to stay in compliance. We also met the target to reduce oil spills larger than 1 barrel (only 2 in 2000 as compared to 5 in 1999) and the targets for greenhouse gas emissions and for the volume of flaring.

We regularly monitor and measure our environmental performance to cut pollution and reduce impacts. There are monitoring programmes developed for each operational site. Horse patrols and vehicles are used for daily monitoring of the pipelines’ right-of-way. Effluents are monitored for oil and chemicals content and for the volume discharged depending on particular requirements. Air emissions monitoring is carried out monthly as a part of normal operations and reports are kept on site, sent quarterly to BP central office and annually – to regulators. The air emissions, effluent and waste inventories are kept on sites.

In addition to operational monitoring, a series of environmental research and monitoring projects were carried out in 2000, such as monitoring of fish near the Sangachal area of Caspian Sea, winter bird count at selected sites along WREP in Georgia, beached bird survey along the Black Sea coastline from Poti to Kobuleti, and monitoring of habitat restoration in sensitive zones along WREP in Georgia.

An ambient air quality survey was conducted at operating facilities both in Azerbaijan and Georgia, which showed that the local air quality has not significantly deteriorated through the years of operating of the facilities. The research and monitoring projects are expected to expand due to the further development of our activities both onshore and offshore.

Apart from that, we conduct environmental awareness and community involvement activities, such as media presentations and NGO meetings. In 2000 these activities included a meeting with the representatives of Azeri environmental NGOs to provide information and answer possible questions, the NGO fair to give NGOs an opportunity to demonstrate their activities to the public, provision of educational materials and equipment to local schools along pipelines in Azerbaijan and Georgia to raise the awareness of pipeline operations. HSE Awareness plans involving schools and communities and issue of awareness publications are planned to be continued.

The following sections cover those areas of our environmental performance in year 2000, which we currently monitor and report, and the measures we take to manage the impacts from our activities.

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Impact on air

The aspects of our operations that result in significant impact to the atmosphere are flaring, venting, power generation exhausts and fugitive emissions due to gas leaks from process equipment, materials storage and loading. The emissions from these sources include:

• greenhouse gases (GHG): primarily carbon dioxide and methane

• non-methane hydrocarbon emissions

• carbon monoxide

• oxides of nitrogen and sulphur (NOx and SOx)

• halocarbons Potential environmental impacts from these

emissions are global warming, ozone layer depletion, smog formation, acid rain and damage to human health.

Atmospheric Emissions from BP Exploration (Caspian Sea)

Ltd. Operations in 2000, gross tonnes*

Greenhouse gases 1,205,485

Non-methane hydrocarbons 2,766

Oxides of nitrogen (NOx) 2,170

Sulphur oxide (SOx) 107

Carbon monoxide (CO) 2,770

We have an improvement plan in place to further

reduce environmental impacts from emissions to air. To prevent and reduce these impacts we measure emission levels against agreed limits, carry out routine monitoring to detect leaks and maintenance to improve the performance and efficiency of equipment. We keep the halocarbon inventory and emissions report for 2000 and also aim at the improvement of the energy efficiency. In 2000 we conducted baseline estimate of our energy efficiency. As one of the energy improvement initiatives we increased the use of gas as a fuel versus diesel at Sangachal Terminal.

As the majority of our emissions are greenhouse

gases resulted from flaring we reduce flaring through the transportation of gas to Oily Rocks facilities for processing and, to the extent possible, by ensuring clean burning of hydrocarbons at flaring stacks.

In 2001 we plan to transport more gas to the

SOCAR facilities at Oily Rocks for processing, rather than flaring. This is possible due to improved processing facilities at Oily Rocks. An installation of a pipeline to link the Sangachal Terminal to a SOCAR’s Sangachal Gas Distribution Centre for the export of excess gas is considered as an option to reduce flaring at Sangachal

Monitoring and reporting of emissions to air will be further tightened, with more accurate estimates of minor releases from valves and flanges, an update to our inventory of emissions to air and purchasing of more monitoring equipment.

________________________ *Emissions figures are rounded in final calculations to the nearest 0.1 tonne and given for AIOC operations, encompassing both Azerbaijan and Georgia (gross emissions). However, BP is only one partner in the operating consortium for these activities and the proportion of emissions applicable to BP is based on the percentage ownership within this consortium (net emissions). That is why all figures should be multiplied by 34.14% i.e. BP is responsible for around a third of the stated emission levels. N2O emissions are grouped with NOx emissions

0

100000

200000

300000

400000

500000

ton

nes

Flaring from Exploration and Production activities in 2000

Azerbaijan 402480 113

Production gas flared Exploration & appraisal

gas flared

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Impact on Land, Water and the Marine Environment

1. Effluent discharges

Various types of liquid effluent are produced from platforms, terminals and pumping stations, including:

• hydrocarbons (in drainage, drilling mud and cuttings, from accidental spills)

• chemicals from drilling and production

• drill cuttings discharged to the sea

• sewage Potential impacts from effluent release are

contamination of land, surface and ground waters, pollution of the sea, toxic effects on wildlife, health hazards and localized visual and odour impacts.

We monitor pollutant levels in effluent against agreed limits and strive to reduce our discharges. By reusing chemicals and using less harmful materials where practical we attempt to minimise the impacts on the environment. We use only water based or synthetic based drilling mud to decrease the possible adverse effects. Drilling mud is reused and drill cuttings cleaned before being discharged to sea.

No produced water was discharged in 2000. The

limited amount of produced water (1254 m3) received onshore at Sangachal Terminal was sent to Karadag Cement Plant to be used for their processing.

Drainage systems and oil processing facilities are designed to remove contaminants prior to discharge. Sewage is treated and monitored after treatment for chemicals content against agreed limits before being discharged. Other site runoff is monitored for oil and grease content, either by daily oil and grease measurement, or daily visual monitoring, depending on the requirements.

2. Oil Spills

To prevent and cope with oil spills we bund storage facilities to contain possible spills and have spill clean-up equipment and emergency response plans in place. We also provide training to our personnel and record and investigate any oil spill incidents. In 2000 335 people received emergency response and oil spill response training and 4 offshore deployment exercises were carried out. We have detailed oil spill response plans in place to deal rapidly with any major spill that occurs.

In 2000 we recorded a total of 12 oil spills, with

only 2 of them over 1 barrel in volume. Both of these were contained on site and neither reached the environment. Only minor spills reached the environment in 2000, as shown on the graph above. We also completed the bioremediation of the contaminated area after the spills at the 72nd and 80th kilometres of NREP in 1998 and 1999 respectively and after the oil spill at Pump Station 11 of WREP in 1999.

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0.40

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Oil Spills Reaching the Environment in 2000

Volume of oil, bbl 0.76 0.92 0.39

Pipeline (WREP)

Chirag Supsa

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4000

6000

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ton

nes

Drilling discharges in 2000

Azerbaijan 450 8753

Chemical discharges Drill cuttings &

associated fluids

NREP KP 80 oil spill site after bioremediation

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We also started the de-oiling project for the remaining 182km of the old unused GIOC pipeline. The process involves the removal of pipeline liquids and abandonment of the pipeline in environmentally safe state. By the end 2000 the work was estimated 67% completed.

3. Presence of pipeline

Presence of pipelines can restrict land use, create the risk of land instability, erosion and subsidence. Ground works may also damage archaeological sites. We try to prevent these impacts through burying pipelines and segregating topsoil and subsoil to help regeneration, prevent soil erosion and degradation. We have a procedure for archaeological management during pipeline construction and at the first stage of pipeline construction we commission a detailed Environmental Impact Assessment (EIA) of the proposal. Based on the EIA we can then put in place measures to minimise the environmental impacts.

4. Plant cleaning and maintenance

Potential impacts from plant cleaning and maintenance include land and water contamination from spills and maintenance wastes, human health impacts and gas emissions from venting. To avoid this, we have procedures for cleaning and maintenance. All vessels and equipment are protected where necessary in secondary containment areas to avoid any off-site contamination and drains are used to collect contaminated water and recover oil.

Waste Management

Impacts result from the storage, transportation and disposal of waste to land. Potential impacts include the take-up of land for waste disposal and storage, health risk and risk of the contamination of land, atmosphere and watercourses due to the escape of wastes, improper disposal and leachate from landfill.

We separate wastes into special (hazardous) and general (non-hazardous) waste types and choose the best option for disposal. Our first option is to reduce the amount of waste we produce, for example we try to use bulk chemical containers to reduce the amount of packaging and container waste.

Where this is not feasible we try to re-use wastes, for example, we process and reuse drilling mud. If reuse is not practical, we recycle wastes, and if none of these options is possible, we look at incinerating wastes to make use of the energy content.

The last option we take is the disposal of waste materials to landfills. To do this safely and responsibly we segregate waste streams, retain documentation to ensure correct disposal and use only licensed waste contractors and landfill sites.

In 2000 the amount of hazardous wastes generated was 591 tonnes. In Georgia they were incinerated at a permitted facility in Rustavi. In Azerbaijan they were temporarily stored at CSM-operated facility pending a review of disposal options. Drill cuttings have been stored onshore at Serenja Waste Management Facility. Non-hazardous wastes were sent to the approved municipal waste facilities.

We are improving the way we monitor waste

disposal to provide more accurate data, including the use of consultants to review our waste management and developing a waste inventory register to record the types and quantities of waste we produce. Waste Management Strategy is being developed to ensure waste disposal streams follow best practice standards. In 2000 we employed a contractor to evaluate different options and give recommendations for the hazardous waste disposal. We also carried out a bioremediation trial for synthetic-based mud drill cuttings as one of the possible disposal options. The amount of hazardous waste is reported regularly under our corporate reporting commitments.

Serenja Waste Management Facility

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Moody International Certification Statement on BP Exploration (Caspian Sea) Ltd. ISO 14001 EMS

About MI Certification

Moody International Certification (MI Certification) is a member of the RCG-Moody International Group. The Group, established in 1911, offers world-wide certification, inspection, procurement, technical placement and expediting services in over 70 countries, employing over 2000 people world-wide.

The Moody International network ensures that not only can services be offered for corporate, global certification but also ensures that strategic reviews at corporate regional and operational levels can be provided. As a leading provider of accredited quality and environmental certification services such as ISO 14001 and ISO 9001 Moody International has issued over 10000 ISO 14001 / 9001 certificates world-wide and has been awarded accreditation from no less than 10 internationally recognised bodies. Although recognised for specific expertise in the Oil and Gas sector, Moody International provide certification to all sectors of Industry and Commerce with clients ranging from multi national companies through to small privately owned organisations. Scope To verify the BP Exploration (Caspian Sea) Ltd 2000 Environmental Statement of the operational facilities currently certified to ISO 14001. These include the Chirag 1 Platform, Sangachal Terminal, Supsa Terminal (including offshore loading facility), Western Route Export Pipeline and Northern Route Export Pipeline. Approach As there are no known statutory requirements for the verification of environmental statements the Moody International Certification verification primarily involved a detailed examination of the statement’s content. The verification of performance statements and associated data was carried out using the processes and methodologies established for accredited ISO 14001 certification. This process included interviews with key personnel, reviewing relevant

procedures in the Environmental Management System (EMS) and evaluating objective evidence through a review of the BP Exploration (Caspian Sea) Ltd objectives, measured targets and actual performance for the year 2000. Moody International Certification will continue to review the information in future Environmental Statements through its periodical audits associated with ISO 14001 certification activities. Conclusions The policies of BP Exploration (Caspian Sea) Ltd and the role and responsibilities of its managers and staff are fully understood and implemented to a very high standard throughout the company. Leadership from the top is ably demonstrated and provides a strong driving force for meeting the continual improvement objectives. The objectives and actual performance data appear reliable, and the statements made within the document are consistent with the factual evidence reviewed from the various facilities stated in the scope. It is Moody International Certification’s view that the activities and actions of BP Exploration (Caspian Sea) Ltd is accurately represented with regard to communication to the public and interested third parties. The BP Exploration (Caspian Sea) Ltd EMS is operated effectively and the associated procedures and processes currently meet all the requirements of ISO 14001, including evaluating regulatory compliance and making necessary corrective and preventive actions where any non-compliances (if any) occur. BP Exploration (Caspian Sea) Ltd has a well developed internal EMS audit process and its procedures only serve to confirm that EMS continues to conform to internal and external requirements and also to the company’s Health, Safety and Environmental Policy. John Canning Managing Director Moody International Certification

CorporateRegister.com 11/04/2006