CDP. Module: Introduction. CDP 2017 Water 2017 Information Request Occidental Petroleum Corporation. Page: W0. Introduction W0.1.

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1 CDP CDP 2017 Water 2017 Information Request Occidental Petroleum Corporation Module: Introduction Page: W0. Introduction W0.1 Introduction Please give a general description and introduction to your organization Occidental Petroleum Corporation's (Oxy's) principal businesses consist of three segments: (1) oil and gas exploration and production; (2) midstream and marketing; and, (3) chemicals (OxyChem). The oil and gas segment explores for, develops and produces crude oil and condensate, natural gas liquids (NGL) and natural gas. The midstream and marketing segment gathers, processes, transports, stores, purchases and markets oil, condensate, NGLs, natural gas and carbon dioxide (CO2), and generates power. OxyChem is a leading manufacturer of PVC resins, vinyls, chlorine and caustic soda key building blocks to life-enhancing products such as pharmaceuticals, water treatment chemicals, building materials and plastics. The production of oil and gas, electricity and chemicals requires water, and Oxy understands the importance of managing water resources responsibly. Occidental's water management program is designed to conserve and protect water resources in communities where we operate by optimizing the use of low-quality produced water, the recycling of water and limiting the use of freshwater used for drinking water supplies. OxyChem, as an American Chemistry Council Responsible Care company, is committed to reporting on its water management practices and consumption. W0.2 Reporting year Please state the start and end date of the year for which you are reporting data Period for which data is reported Fri 01 Jan Sat 31 Dec

2 W0.3 Reporting boundary Please indicate the category that describes the reporting boundary for companies, entities, or groups for which water-related impacts are reported Companies, entities or groups over which operational control is exercised W0.4 Exclusions Are there any geographies, facilities or types of water inputs/outputs within this boundary which are not included in your disclosure? No W0.4a Exclusions Please report the exclusions in the following table Exclusion Please explain why you have made the exclusion Further Information Module: Current State Page: W1. Context W1.1 2

3 Please rate the importance (current and future) of water quality and water quantity to the success of your organization Water quality and quantity Direct use importance rating Indirect use importance rating Please explain Sufficient amounts of good quality freshwater available for use Sufficient amounts of recycled, brackish and/or produced water available for use Vital for operations Important Important Not very important It is important to Oxy that we use all sources of freshwater responsibly. Where possible, Oxy does not use freshwater resources in conflict with local users. Oxy's oil production operations generate significant quantities of produced water (i.e., saline water from hydrocarbon reservoirs) which is often sufficient to meet the quantity of our needs. However, there are certain activities, such as hydraulic fracturing and water flooding for which the quality of recycled produced water is not sufficient. For those, Oxy requires freshwater. OxyChem s business uses significant quantities of freshwater for production and cooling purposes, in addition to producing electricity. With respect to indirect use, freshwater is used to meet worker s needs for cleaning and drinking purposes. With respect to direct use, Oxy s oil and gas operations increasingly substitute freshwater resources with brackish/non-potable produced water, naturally occurring water that originates in the hydrocarbon reservoir and comes to the surface along with oil and gas during production. The extraction, processing, treatment and reinjection of produced water is integral to the design and efficient operation of Oxy s mature oil and gas fields, including water flooding and EOR operations. In 2015, 60% of water needs were sourced using non-potable water in our U.S. upstream operations. In the Permian Basin, our oil and gas operations achieve close to 90%. At OxyChem, the manufacture of chlorine and caustic soda involves the extraction and processing of brine (saltwater) streams. W1.2 For your total operations, please detail which of the following water aspects are regularly measured and monitored and provide an explanation as to why or why not 3

4 Water aspect % of sites/facilities/operations Please explain Water withdrawals- total volumes Oxy operational facilities measure and monitor water withdrawals. For Oxy's oil and gas operations, essentially all brackish water is co-produced with oil and gas extracted from wells. Water withdrawals- volume by sources Oxy operational facilities measure and monitor water withdrawals by source. Water discharges- total volumes Oxy operational facilities measure and monitor water discharge volumes. Water discharges- volume by As required by regulations, operational facilities measure and monitor discharges by destination destination. Water discharges- volume by As required by regulations, OxyChem facilities measure and monitor discharges by treatment method treatment method. Water discharge quality data- quality As required by regulations, operational facilities measure and monitor discharges by by standard effluent parameters waste and effluent parameters. Water consumption- total volume OxyChem and Oxy's oil and gas facilities measure and track water consumption. Facilities providing fully-functioning WASH services for all workers All Oxy offices, field camps, OxyChem and oil and gas facilities provide adequate water facilities for potable uses, sanitation and hygiene. W1.2a Water withdrawals: for the reporting year, please provide total water withdrawal data by source, across your operations Source Quantity (megaliters/year) How does total water withdrawals for this source compare to the last reporting year? Comment Fresh surface water 0.00 About the same Brackish surface water/seawater About the same Oxy does not measure surface fresh water withdrawals across all operations, at this time. 4

5 Source Quantity (megaliters/year) How does total water withdrawals for this source compare to the last reporting year? Comment Rainwater 0.00 Not applicable Oxy does not measure rainwater withdrawals across all operations, at this time. Groundwater - renewable Higher Oxy does not differentiate between renewable/non-renewable groundwater Groundwater - nonrenewable 0.00 Not applicable Oxy does not differentiate between renewable/non-renewable groundwater Produced/process water Higher Municipal supply 27 About the same Wastewater from another organization 0.00 Not applicable Source category not applicable to Oxy's operations. Total Higher Total water withdrawals were higher mostly due to the greater use of water for hydraulic fracturing in our U.S. upstream businesses. W1.2b Water discharges: for the reporting year, please provide total water discharge data by destination, across your operations Destination Quantity (megaliters/year) How does total water discharged to this destination compare to the last reporting year? Comment Fresh surface water About the same Brackish surface water/seawater About the same Groundwater About the same Municipal/industrial wastewater treatment plant.71 About the same Wastewater for another organization 5020 About the same 5

6 Destination Quantity (megaliters/year) How does total water discharged to this destination compare to the last reporting year? Comment Total About the same Total water discharges remained relatively flat across our operations. W1.2c Water consumption: for the reporting year, please provide total water consumption data, across your operations Consumption (megaliters/year) How does this consumption figure compare to the last reporting year? Comment 0.00 About the same Total water consumption remained relatively flat across our operations. Oxy s more efficient use of global water resources partly offset the greater use of water for hydraulic fracturing in our U.S. upstream businesses. W1.3 Do you request your suppliers to report on their water use, risks and/or management? No W1.3a Please provide the proportion of suppliers you request to report on their water use, risks and/or management and the proportion of your procurement spend this represents 6

7 Proportion of suppliers % Total procurement spend % Rationale for this coverage W1.3b Please choose the option that best explains why you do not request your suppliers to report on their water use, risks and/or management Primary reason Please explain Judged to be unimportant Oxy considers environmental management criteria as part of the comprehensive assessment it conducts when sourcing and selecting suppliers. Oxy is not engaged with retail commodity markets/consumers. At this time, there is insufficient value to Oxy in screening suppliers for reporting their organizational water consumption and risks. We continue to monitor these risks as operating parameters or local market conditions could change. W1.4 Has your organization experienced any detrimental impacts related to water in the reporting year? No W1.4a Please describe the detrimental impacts experienced by your organization related to water in the reporting year 7

8 Country River basin Impact driver Impact Description of impact Length of impact Overall financial impact Response strategy Description of response strategy W1.4b Please choose the option below that best explains why you do not know if your organization experienced any detrimental impacts related to water in the reporting year and any plans you have to investigate this in the future Primary reason Future plans Further Information Module: Risk Assessment Page: W2. Procedures and Requirements W2.1 Does your organization undertake a water-related risk assessment? Water risks are assessed W2.2 Please select the options that best describe your procedures with regard to assessing water risks 8

9 Risk assessment procedure Coverage Scale Please explain Comprehensive company-wide risk assessment Direct operations All facilities As part of Occidental's Health, Environment and Safety Management System (HESMS), our programs, standards and operational strategies designed to conserve water resources, such as improving efficient use, recycling and reuse of water and the quality of water being treated and discharged to surface water bodies. We assess other risk parameters that focus on the unique characteristics of each community and location of operations. Oxy uses industry-tested water risk tools (e.g., IPIECA Global Water Tool, GEMI Local Water Tool for Oil and Gas, WRI Aqueduct) to supplement our assessment findings. Assessments are also conducted as-needed to address changes in operations, site conditions or regulations. W2.3 Please state how frequently you undertake water risk assessments, at what geographical scale and how far into the future you consider risks for each assessment Frequency Geographic scale How far into the future are risks considered? Comment Annually Facility 1 to 3 years Every two years Region 3 to 6 years An initial assessment is conducted prior to exploration in a new region. Water is integrated into a comprehensive, company-wide risk assessment process incorporating direct operations only. Minor incidental uses, such as in office buildings, are not included. Oxy's Health, Environment and Safety Management System (HESMS) requires an assessment of potential environmental effects at all new operations. Facility or local level water risk assessments are cross referenced against longer-term (3-5 years, or longer) regional demographic and economic growth forecasts and risk of severe weather occurrences - i.e., drought, flooding and severe storm vulnerability - that potentially impacts staffing and our operational assets. W2.4 9

10 Have you evaluated how water risks could affect the success (viability, constraints) of your organization's growth strategy? Yes, evaluated over the next 1 year W2.4a Please explain how your organization evaluated the effects of water risks on the success (viability, constraints) of your organization's growth strategy? Oxy considers the longer-term patterns of integrated water resources management, regenerative capacity of ground water and aquifers, population growth/demand shifts and the potential for weather related impacts to evaluate and mitigate the effects of water risks on key operations and the safety and well-being of employees and contractors. When evaluating a new site or asset, this involves evaluating legal and regulatory issues and hydrological yield in terms of the reliability and proximity of other water users during exploration and production activities. Oxy's analysis of water-related risks includes an information-gathering process, environmental due diligence, participation in industry association work groups (for example, IPIECA Water Working Group and the American Chemistry Council Responsible Care) and external stakeholder engagement to inform and refine our risk management and strategic planning processes. Water risk is evaluated based on the importance of water to an operation, and importance depends in part on how easily a particular source could be replaced with an alternate source, and technological feasibility and viability. The evaluation also involves considering both quantity and quality characteristics of the source in use and of the potential alternatives. The importance level is factored into the risk identification and management process. An example is OxyChem's role in the Vinyl Institute s Vinyl Business and Sustainability Council. As part of this Council, OxyChem and other members are engaging with stakeholders to address perceptions of the industry s water management and water re-use practices to further explore risks and opportunities to our vinyls business. The Council can apply a life-cycle benefits/costs approach to the production of higher-value vinyl products, such as in building materials and medical products. Another example is Oxy s executive-level position, Director of Water Strategy, created in late The Director of Water Strategy manages the oil and gas development plans in an integrated and collaborative manner, across different business assets and geographic basins. The goal is to grow the business through the application of a full-cycle, cost-efficient water management program focused on smart sourcing of water, the recycling and re-use of produced water and environmentally sound treatment and disposal. W2.4b What is the main reason for not having evaluated how water risks could affect the success (viability, constraints) of your organization's growth strategy, and are there any plans in place to do so in the future? Main reason Current plans Timeframe until evaluation Comment 10

11 W2.5 Please state the methods used to assess water risks Method Please explain how these methods are used in your risk assessment CEO Water Mandate's 'Understanding Key Water Stewardship Terms' GEMI Local Water Tool IPIECA Global Water Tool for Oil & Gas Regional government databases WRI Aqueduct Other: World Economic Forum (WEF) Global Risks Oxy s water risk management approach assesses the risks and compliance measures associated with sourcing water in terms of adequate quantity and quality, the protection of water resources (e.g. proper well design and integrity), efficient use of water (reuse and recycling), and the disposal of wastewater and/or solid wastes. A variety of industry, scientific and third-party tools and risk assessments are used to cross-reference our internal HESMS risk management process. These external resources provide useful input and interject analyses and critical thinking that Oxy may not have considered relevant at the facility or business unit level. This is used for all our operations. W2.6 Which of the following contextual issues are always factored into your organization's water risk assessments? Issues Choose option Please explain Current water availability and quality parameters at a local level Current water regulatory frameworks and tariffs at a local level Relevant, included Relevant, included Water quantity and quality parameters are factored into Oxy's risk management approach and HESMS. Occidental recognizes the localized nature of water management issues, as such, it may not be relevant to compare water risk parameters from one site to another because the availability and quality of water sources, as well as the demand for those water sources, varies significantly from place to place. Current regulatory frameworks and tariffs at the local and municipal level are factored into our HESMS and water risk assessments. 11

12 Issues Choose option Please explain Current stakeholder conflicts concerning water resources at a local level Current implications of water on your key commodities/raw materials Current status of ecosystems and habitats at a local level Current river basin management plans Current access to fully-functioning WASH services for all employees Estimates of future changes in water availability at a local level Estimates of future potential regulatory changes at a local level Estimates of future potential stakeholder conflicts at a local level Estimates of future implications of water on your key commodities/raw materials Estimates of future potential changes in the status of ecosystems and habitats at a local level Scenario analysis of availability of sufficient quantity and quality of water relevant for your operations at a local level Scenario analysis of regulatory and/or tariff changes at a local level Relevant, included Not relevant, included Relevant, included Not relevant, explanation provided Relevant, included Relevant, included Relevant, included Relevant, included Not relevant, included Relevant, included Relevant, included Relevant, included Oxy always seeks to optimize water from non-potable sources, using the lowest-quality water acceptable for operational activities, and recycles produced water and wastewater wherever feasible to avoid using water resources in conflict with local stakeholders. Water risks on our raw materials are sufficiently addressed through diversity and security of suppliers. Local ecosystem and watershed impacts are factored into our HESMS and water risk assessments. In many operations, Oxy has set aside habitat conservation areas or has contributed to local and regional habitat conservation efforts. River basin management plans are considered, if robust and available. The use of external risk assessments and spatial modelling tools (WRI Aqueduct, IPIECA Global Water Tool) can substitute for government sponsored river basin plans. Oxy ensures adequate water is available for drinking, cleaning and hygiene at each of its facilities and field operations. Future estimates of local water supply/demand are assessed as part of our HESMS. Occidental's supplemental use of tools such as the WRI Aqueduct and GEMI LWT is consistent with this approach. Water-related risk to Oxy s supply chain is relatively small. Oxy s oil and gas facilities do not rely extensively on a supply chain. The raw materials and finished goods that Oxy s oil and gas and chemical operations use can generally be sourced from multiple geographic areas, which mitigates the risk of water-related effects on the supply chain. Occidental assesses potential future risks and impacts to local ecosystems and watersheds. Occidental's supplemental use of tools such as the WRI Aqueduct and GEMI LWT is consistent with this approach. Water-related risk to Oxy s supply chain is relatively small. Oxy s oil and gas facilities do not rely extensively on a supply chain. The raw materials and finished goods that Oxy s oil and gas and chemical operations use can generally be sourced from multiple geographic areas, which mitigates the risk of water-related effects on the supply chain. Oxy assesses potential future risks and impacts to local ecosystems and watersheds. Occidental's supplemental use of tools such as the WRI Aqueduct and GEMI LWT is consistent with this approach. Oxy assesses the long-term trends of water supply and quality. The supplemental use of tools such as the WRI Aqueduct, WEF Risk Reports and GEMI LWT is consistent with this approach. Oxy assesses the future potential regulatory impacts or changes in tariffs, as practical. 12

13 Issues Choose option Please explain Scenario analysis of stakeholder conflicts concerning water resources at a local level Scenario analysis of implications of water on your key commodities/raw materials Scenario analysis of potential changes in the status of ecosystems and habitats at a local level Other Relevant, included Not relevant, included Relevant, included Future estimates of stakeholder needs are assessed as part of our HESMS, using the GEMI LWT and public engagement to avoid using water resources in conflict with local stakeholders. Water-related risk to Oxy s supply chain is relatively small. Oxy s oil and gas facilities do not rely extensively on a supply chain. The raw materials and finished goods that Oxy s oil and gas and chemical operations use can generally be sourced from multiple geographic areas, which mitigates the risk of water-related effects on the supply chain. Oxy assesses potential future risks and impacts to local ecosystems and watersheds. Occidental's supplemental use of tools such as the WRI Aqueduct and GEMI LWT is consistent with this approach. W2.7 Which of the following stakeholders are always factored into your organization's water risk assessments? Stakeholder Choose option Please explain Customers Not relevant, explanation provided Customers are not factored into Oxy's water risks assessments. Oxy produces and markets commodity petroleum products and chemicals that are not branded or consumer end goods. Employees Relevant, included Employees and contractors are factored into Oxy's water risks assessments. Investors Relevant, included Investors are factored into Oxy's water risks assessments and are part of Oxy's engagement with investors to disclose risks and water management performance. Local communities Relevant, included Local communities are factored into Oxy's water risks assessments and are part of Oxy's engagement with stakeholders to inform the public about our water management practices and performance. NGOs Not relevant, Oxy may factor relevant research and water related risks by NGOs. Typically, Oxy engages with these NGOs on explanation broader issues as part of our stakeholder engagement. provided Other water users at a local level Relevant, included Other local water users are factored into Oxy's water risks assessments. 13

14 Stakeholder Choose option Please explain Regulators Relevant, included Regulators are factored into Oxy's water risks assessments. River basin River basin management authorities, where they exist, are factored into Oxy's water risks assessments. Relevant, included management authorities Typically, these agencies are factored as part of the overall regulatory and operating environment. Statutory special interest Special interest groups, if relevant to a local region, are factored into Oxy's water risks assessments and part of Relevant, included groups at a local level Oxy's stakeholder engagement. Commercial suppliers do not present a consequential risk to Oxy's operations. However, Oxy s access to water Suppliers Relevant, included resources, secured though local water rights, are closely managed. Oxy monitors the market conditions and vulnerability of suppliers to water risks, and can adjust our assessment accordingly. Water utilities at a local level Relevant, included Water/waste water utilities are factored into Oxy's water risks assessments. Other W2.8 Please choose the option that best explains why your organisation does not undertake a water-related risk assessment Primary reason Please explain Further Information Module: Implications Page: W3. Water Risks W3.1 14

15 Is your organization exposed to water risks, either current and/or future, that could generate a substantive change in your business, operations, revenue or expenditure? Yes, direct operations only W3.2 Please provide details as to how your organization defines substantive change in your business, operations, revenue or expenditure from water risk Water quality and quantity both represents risks and opportunities. Water is used throughout the project life-cycle of oil and gas activities, for our chemical production and power generation and is core to business continuity. Oxy's HESMS and risk management approach identifies, assesses and grades significant (actual and potential) water-related risks. The HESMS sets consistent worldwide performance expectations and standards across each business segment's respective operations. The HESMS facilitates compliance with laws and regulations and the management of HES and water risks to improve overall business performance. Oxy manages its own water use consistent with community interests near our operations and to avoid adversely impacting the environment, or our license to operate in these communities. Oxy works with IPIECA, the global oil and gas industry association for environmental and social issues. Through a combination of practical tools, reporting practices and working group forums for sharing industry knowledge, IPIECA enables the oil and gas industry to proactively identify potential water risks and to manage water issues. For example, water scarcity is a prominent issue in the Permian Basin (West Texas and Southeast New Mexico) where, as reported by the U.S. Geologic Society and Texas Alliance, the majority of oil and gas wells are in a high or extremely high water stress area. These prevailing water scarcity risks are factored into Oxy s business plans and water use strategy to operationalize and mitigate risks, and also to identify and seize opportunities that could provide costs savings or generate revenues. Our current oil and gas development plans factor the risk associated with future scarcity of fresh water, especially in Southeast New Mexico. Investing in solutions to treat a larger capacity of produced water delivers value to our operations. We mitigate safety-related risks and save money from minimizing the handling/trucking of water, disposal costs and providing operational continuity to treat large volumes of water if a disposal system goes down. Oxy s social responsibility website and the Form 10-K provides a detailed discussion of risk factors, including those which can be water-related such as governmental actions, climate change and catastrophic events (hurricanes, floods and droughts). W3.2a Please provide the number of facilities* per river basin exposed to water risks that could generate a substantive change in your business, operations, revenue or expenditure; and the proportion of company-wide facilities this represents 15

16 Country River basin Number of facilities exposed to water risk Proportion of company-wide facilities that this represents (%) Comment United States of Colorado River (Caribbean America Sea) United States of America Mississippi River OxyChem plants United States of Other: Houston Ship America Channel/Gulf of Mexico Colombia Other: Aruaca River Llanos Norte Basin operations Colombia Other: Middle Magdalena Basin La Cira Infantas operations Hobbs/Midland/Odessa region, Permian Basin (Southwest Texas, Southeastern New Mexico) OxyChem plants, Ingleside Power Station and Occidental corporate hq W3.2b For each river basin mentioned in W3.2a, please provide the proportion of the company's total financial value that could be affected by water risks Country River basin Financial reporting metric Proportion of chosen metric that could be affected Comment United States of America United States of America United States of America Colorado River (Caribbean Sea) Mississippi River Other: Houston Ship Channel/Gulf of Mexico % global production volume % global production volume % global production volume Assuming a prolonged, severe drought similar to conditions in 2011 in W. Texas: Prices for water supplies are most at risk, but not necessarily access to water resources. Chemicals production volumes (vinyls and PVC); power generation; product distribution to regional markets/terminals Chemicals production volumes (vinyls and PVC); power generation; product distribution to regional markets/terminals 16

17 Country River basin Financial reporting metric Proportion of chosen metric that could be affected Comment Colombia Colombia Other: Aruaca River Other: Middle Magdalena Basin % global production volume % global production volume 1-5 Llanos Norte Basin operations 1-5 La Cira Infantas operations W3.2c Please list the inherent water risks that could generate a substantive change in your business, operations, revenue or expenditure, the potential impact to your direct operations and the strategies to mitigate them Count ry River basin Risk driver Potential impact Description of potential impa ct Timefra me Likeliho od Magnitu de of potential financial impact Response strategy Costs of response strategy Details of strategy and costs United States of Americ a Colorado River (Caribbean Sea) Physical-Increased water scarcity Physical-Projected water stress Physical-Seasonal supply variability/inter annual variability Higher operating costs Water scarcity is a prominent issue in the Permian Basin (West Texas and Southeast New Mexico) where, as reported by the U.S. Geologic Society and Texas Alliance, 1-3 years Probable Lowmedium Engageme nt with community Engageme nt with public policy makers Engageme nt with other stakeholde Dependen t on range of suppliers, technolog y solutions, access to water resources and level of To manage the risk of potential higher operating costs, Oxy could allocate additional capital/ budget. Increase investment in treatment and use of lower 17

18 Count ry River basin Risk driver Potential impact Description of potential impa ct Timefra me Likeliho od Magnitu de of potential financial impact Response strategy Costs of response strategy Details of strategy and costs the majority of oil and gas wells are in a high or extremely high water stress area. As readily available water supplies diminish, costs to source and use water, particularly freshwater, will increase. rs in the river basin Engageme nt with suppliers Infrastructu re investment Increased investment in new technology Promote best practice and awareness Water manageme nt incentives competitio n. quality water resources (brackish/produ ced water). United States of Americ a Colorado River (Caribbean Sea) Regulatory- Increased difficulty in obtaining withdrawals/operat ions permit Regulatory- Regulatory uncertainty Regulatory- Statutory water withdrawal Higher operating costs Regulatory risk, both at state and federal levels, is uncertain and, in some instances, contradictory with regards to compliance and permitting 1-3 years Probable Low Alignment of public policy positions with water stewardshi p goals Engageme nt with public policy Marginally higher costs due to staff time/due diligence Oxy monitors current and proposed legislation that could affect its operations and costs of compliance. 18

19 Count ry River basin Risk driver Potential impact Description of potential impa ct Timefra me Likeliho od Magnitu de of potential financial impact Response strategy Costs of response strategy Details of strategy and costs limits/changes to water allocation standards. For instance, U.S. Bureau of Land Management likely to limit the percentage of freshwater used for oil and gas drilling and completions. makers Engageme nt with other stakeholde rs in the river basin Infrastructu re investment Increased capital expenditur e United States of Americ a Colorado River (Caribbean Sea) Physical-Projected water scarcity Physical-Projected water stress Reputational- Community opposition Reputational- Negative media coverage Loss of license to operate Reputational risk may impact our effectiveness and credibility as a trusted community partner and loss of our social license to operate. 4-6 years Unlikely Lowmedium Alignment of public policy positions with water stewardshi p goals Engageme nt with community Engageme nt with public policy makers Engageme nt with other No significant change in staff support and engagem ent costs envisaged. Oxy actively and effectively engages local communities and water users to inform the public about our water management practices and performance. 19

20 Count ry River basin Risk driver Potential impact Description of potential impa ct Timefra me Likeliho od Magnitu de of potential financial impact Response strategy Costs of response strategy Details of strategy and costs stakeholde rs in the river basin Strengthen links with local community United States of Americ a Other: Houston Ship Channel/Galve ston Bay/Gulf of Mexico Physical- Ecosystem vulnerability Physical-Flooding Physical- Inadequate infrastructure Physical-Seasonal supply variability/inter annual variability Plant/product ion disruption leading to reduced output Severe storms can cause widespread flooding and flash flooding across the Houston/Galve ston causing property damage, and impacting distribution, roadways and other public infrastructure. Currentup to 1 year Unlikely Lowmedium Develop flood emergency plans Engageme nt with community Engageme nt with suppliers Infrastructu re maintenan ce Supplier diversificati on Nominal cost of staffing response and cost of insurance. Oxy has emergency preparedness and action plans and coordinates its response activities with local and regional authorities and community stakeholders. Oxy staff and contractors are apprised of alerts and any action to mitigate storm and severe weather impacts. W3.2d 20

21 Please list the inherent water risks that could generate a substantive change in your business operations, revenue or expenditure, the potential impact to your supply chain and the strategies to mitigate them Country River basin Risk driver Potential impact Description of potential impact Timeframe Likelihood Magnitude of potential financial impact Response strategy Costs of response strategy Details of strategy and costs W3.2e Please choose the option that best explains why you do not consider your organization to be exposed to water risks in your direct operations that could generate a substantive change in your business, operations, revenue or expenditure Primary reason Please explain W3.2f Please choose the option that best explains why you do not consider your organization to be exposed to water risks in your supply chain that could generate a substantive change in your business, operations, revenue or expenditure Primary reason Please explain Judged to be unimportant Oxy considers environmental management criteria as part of the comprehensive assessment it conducts when sourcing and selecting suppliers. Oxy is not engaged with retail commodity markets/consumers. At this time, there is insufficient value to Oxy in screening suppliers for reporting their organizational water consumption and risks. We continue to monitor these risks as operating parameters or local market conditions could change. 21

22 W3.2g Please choose the option that best explains why you do not know if your organization is exposed to water risks that could generate a substantive change in your business operations, revenue or expenditure and discuss any future plans you have to assess this Primary reason Future plans Further Information Page: W4. Water Opportunities W4.1 Does water present strategic, operational or market opportunities that substantively benefit/have the potential to benefit your organization? Yes W4.1a Please describe the opportunities water presents to your organization and your strategies to realize them Country or region Opportunity Strategy to realize opportunity Estimated timeframe Comment Companywide Competitive advantage Increased brand Oxy actively and effectively engages local communities and water users to inform the public Oxy actively and effectively engages local Current-up to 1 year Oxy's commitment to using produced water from oil and gas reservoirs and other non-potable sources wherever feasible reduces our demand for freshwater. Oxy uses 22

23 Country or region Opportunity Strategy to realize opportunity Estimated timeframe Comment value Improved community relations Improved water efficiency Social licence to operate communities and water users to inform the public about our water management practices and performance. lessons learned from its engagement and its water stewardship practices to continuously improve management techniques and operational efficiencies. United States of America Collective Action Competitive advantage Increased brand value Increased shareholder value Improved water efficiency Innovation Sales of new products/services Oxy aims to leverage collaboration and knowledge sharing across operations to employ advanced production technologies and to enhance the efficiency of resource utilization. 1-3 years Oxy continues to evaluate new opportunities and revenue streams for beneficial reuse of water, such as for our chemicals production, non-potable municipal, ecological or agricultural use. OxyChem participates in the Vinyl Institute s Vinyl Business and Sustainability Council to first identify market opportunities for the use of higher-value vinyl products. Companywide Carbon management Climate change adaptation Competitive advantage Cost savings Increased shareholder value Improved water efficiency Social licence to operate Oxy can leverage an energy-water systems approach to build smarter, cost efficient water infrastructure. Oxy's operations employ advanced production technologies and control systems to enhance the efficiency of resource utilization, including both energy and water. Oxy also works with its service contractors to improve water efficiency. Current-up to 1 year Efficiency programs that save water will also save energy and vice versa. Energy and water efficiency can help achieve other objectives, such as emission reductions, water conservation and enhance our social license to operate with stakeholders. Oxy s operations employ advanced production technologies and control systems to enhance the efficiency of resource utilization, including both energy and water. Oxy also is developing new or enhancing existing water-related technologies, including the treatment of produced water and wastewater streams. We also continue to evaluate new opportunities for beneficial reuse of water, such as for our chemicals production, non-potable municipal, ecological or agricultural use. 23

24 Country or region Opportunity Strategy to realize opportunity Estimated timeframe Comment Companywide Competitive advantage Ensuring supply chain resilience Oxy actively manages its supplier base and works with its existing contractors to improve resilience from security of supply. Current-up to 1 year Oxy assesses risks to its value chain and actively manages its supplier base to improve resilience from security of supply. Oman Climate change adaptation Competitive advantage Cost savings Improved water efficiency Innovation Social licence to operate Oxy's operations employ advanced production technologies and control systems to enhance the efficiency of resource utilization, including both energy and water. Oxy also works with its service contractors and supports local enterprises to innovate solutions for improved water efficiency, treatment and desalination. Current-up to 1 year Oxy is developing new or enhancing existing waterrelated technologies, including the treatment of produced water and wastewater streams. Colombia Climate change adaptation Collective Action Competitive advantage Improved community relations Improved water efficiency Innovation Social licence to operate Oxy seeks to innovate solutions using natural ecosystems for improved water efficiency, fresh water filtration and retention. Current-up to 1 year Oxy works with local stakeholders to develop new ways to access safe drinking water sources for local communities, improving health conditions and bringing Oxy closer to the community, improving our relationships, and creating an atmosphere of trust. W4.1b Please choose the option that best explains why water does not present your organization with any opportunities that have the potential to provide substantive benefit 24

25 Primary reason Please explain W4.1c Please choose the option that best explains why you do not know if water presents your organization with any opportunities that have the potential to provide substantive benefit Primary reason Please explain Further Information Module: Accounting Page: W5. Facility Level Water Accounting (I) W5.1 Water withdrawals: for the reporting year, please complete the table below with water accounting data for all facilities included in your answer to W3.2a 25

26 Facility reference number Country River basin Facility name Total water withdrawals (megaliters/year) at this facility How does the total water withdrawals at this facility compare to the last reporting year? Please explain 0.0 Oxy does not publicly disclose its water performance and management data, at the facility level. Further Information Page: W5. Facility Level Water Accounting (II) W5.1a Water withdrawals: for the reporting year, please provide withdrawal data, in megaliters per year, for the water sources used for all facilities reported in W5.1 Facility reference number Fresh surface water Brackish surface water/seawater Rainwater Groundwater (renewable) Groundwater (nonrenewable) Produced/process water Municipal water Wastewater from another organization Comment Oxy does not publicly disclose its water performance and management data, at the facility level. W5.2 Water discharge: for the reporting year, please complete the table below with water accounting data for all facilities included in your answer to W3.2a 26

27 Facility reference number Total water discharged (megaliters/year) at this facility How does the total water discharged at this facility compare to the last reporting year? Please explain 0.0 Oxy does not publicly disclose its water performance and management data, at the facility level. W5.2a Water discharge: for the reporting year, please provide water discharge data, in megaliters per year, by destination for all facilities reported in W5.2 Facility reference number Fresh surface water Municipal/industrial wastewater treatment plant Seawater Groundwater Wastewater for another organization Comment Oxy does not publicly disclose its water performance and management data, at the facility level. W5.3 Water consumption: for the reporting year, please provide water consumption data for all facilities reported in W3.2a 27

28 Facility reference number Consumption (megaliters/year) How does this compare to the last reporting year? Please explain 0.0 Oxy does not publicly disclose its water performance and management data, at the facility level. W5.4 For all facilities reported in W3.2a what proportion of their water accounting data has been externally verified? Water aspect % verification What standard and methodology was used? Water withdrawals- total volumes Water withdrawals- volume by sources Water discharges- total volumes Water discharges- volume by destination Water discharges- volume by treatment method Water discharge quality data- quality by standard effluent parameters Water consumption- total volume Not verified Not verified Not verified Not verified Not verified Not verified Not verified Further Information Module: Response Page: W6. Governance and Strategy W6.1 28

29 Who has the highest level of direct responsibility for water within your organization and how frequently are they briefed? Highest level of direct responsibility for water issues Frequency of briefings on water issues Comment Board of individuals/sub-set of the Board or other committee appointed by the Board Scheduledannual Oxy s Environmental, Health and Safety Committee of the Board of Directors is briefed annually (and more frequently as needed) on water-related matters. This Committee provides oversight on health, environmental and safety issues of importance to the Company, including water management. The Board supports Oxy's efforts to enhance water conservation, to preserve natural habitat, the efficiency of water utilization and water re-use, and sound treatment and disposal of produced and waste water. Oxy routinely educates stockholders and other key stakeholders through voluntary reporting on water risks and corporate water management practices. At the operational level, Oxy integrates waster risks and climate change issues into business decision making through a multi-disciplinary committee of managers, several of whom meet directly with the Environmental, Health and Safety Committee of the Board of Directors. W6.2 Is water management integrated into your business strategy? Yes W6.2a Please choose the option(s) below that best explains how water has positively influenced your business strategy Influence of water on business strategy Please explain Investment in staff/training Introduction of water management KPIs New executive-level officer dedicated to water strategy will align business goals and seek to realize operating efficiencies. Tracking water management KPIs has allowed more effective water-related expense monitoring. 29

30 Influence of water on business strategy Please explain Water resource considerations are factored into location planning for new operations Water resource considerations are factored into new market exploration Publicly demonstrated our commitment to water Alignment of public policy positions with water stewardship goals Exploration of environmental impact Greater due diligence Consideration of water resources has fostered positive neighbor and community relationships and encouraged the diversification of water sources. Consideration of water resources has fostered constructive engagement and assessments of risks with stakeholders and encouraged the diversification of water sources. Commitments and performance on water stewardship made public through stakeholder engagement and at Oxy's corporate website. Public consideration of water resources has fostered positive neighbor and community relationships. Wildlife Habitat Council, IPIECA, CEO Water Mandate, regulatory compliance Applying Oxy's HESMS approach in concert with external water risk tools such as WRI Aqueduct, WRI GWT, IPIECA/GEMI LWT, World Economic Forum Risk Reports Holistic due diligence process including supply chain resiliency, cost of water, engagement with investors and community stakeholders (to maintain social license to operate). W6.2b Please choose the option(s) below that best explains how water has negatively influenced your business strategy Influence of water on business strategy Please explain No measurable influence W6.2c Please choose the option that best explains why your organization does not integrate water management into its business strategy and discuss any future plans to do so 30

31 Primary reason Please explain W6.3 Does your organization have a water policy that sets out clear goals and guidelines for action? Yes W6.3a Please select the content that best describes your water policy (tick all that apply) Content Please explain why this content is included Performance standards for direct operations Performance standards for supplier, procurement and contracting best practice Incorporated within group environmental, sustainability or EHS policy Oxy s HESMS encompasses our programs, standards, operational strategies and integrated planning designed to conserve natural resources, such as improving efficient use, recycling and reuse of water and the quality of water being treated and discharged to surface water bodies. Oxy s water stewardship policies and performance are also publicly communicated online and through corporate reporting. W6.4 How does your organization's water-related capital expenditure (CAPEX) and operating expenditure (OPEX) during the most recent reporting year compare to the previous reporting year? 31

32 Water CAPEX (+/- % change) Water OPEX (+/- % change) Motivation for these changes Asset divestments in the U.S. combined with overall reduced well drilling activity and major projects deferments primarily responsible for reduced CAPEX in OPEX spending was less, reflecting quicker turnaround/maintenance, efficiencies from transportation, recycling and injection projects, but higher chemicals-related costs. Further Information Page: W7. Compliance W7.1 Was your organization subject to any penalties, fines and/or enforcement orders for breaches of abstraction licenses, discharge consents or other water and wastewater related regulations in the reporting year? No W7.1a Please describe the penalties, fines and/or enforcement orders for breaches of abstraction licenses, discharge consents or other water and wastewater related regulations and your plans for resolving them Facility name Incident Incident description Frequency of occurrence in reporting year Financial impact Currency Incident resolution W7.1b 32

33 What proportion of your total facilities/operations are associated with the incidents listed in W7.1a? W7.1c Please indicate the total financial impacts of all incidents reported in W7.1a as a proportion of total operating expenditure (OPEX) for the reporting year. Please also provide a comparison of this proportion compared to the previous reporting year Impact as % of OPEX Comparison to last year Further Information Page: W8. Targets and Initiatives W8.1 Do you have any company wide targets (quantitative) or goals (qualitative) related to water? Yes, targets and goals W8.1a Please complete the following table with information on company wide quantitative targets (ongoing or reached completion during the reporting period) and an indication of progress made 33