AD-7 Drilling Program: Quarterly Environmental Monitoring Report

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1 AD-7 Drilling Program: Quarterly Environmental Monitoring Report Date: Date: 19th March May Status: Final Draft Page 1 of 9

2 TABLE OF CONTENTS 1. INTRODUCTION DESCRIPTION OF THE ACTIVITY ENVIRONMENTAL MONITORING Implementation of Environmental Management Plan Implementation of Approval conditions Environmental Monitoring Program (Sediment and Baseline Data)...7 Video Transect Surveys...7 Sediment Monitoring REPORTING ENVIRONMENTAL BREACHES...8 Page 2 of 9

3 1. INTRODUCTION In 2013, Woodside Energy (Myanmar) Pte Ltd (Woodside) entered a farm-in agreement with Daewoo International Corporation (Daewoo) with respect to Block AD-7 (AD-7). Woodside and Daewoo hold 40% and 60% interests in AD-7 respectively. Woodside is the operator for exploration and appraisal drilling activities and Daewoo is the operator for all other operations with respect to AD-7. Woodside submitted an Environmental Impact Assessment (EIA) for the 2017 drilling program within AD-7 to the Myanmar Oil and Gas Enterprise (MOGE) and Ministry of Natural Resources and Environmental Conservation (MONREC) on 15 September Approval of the EIA was received from the MONREC Environment Conservation Department (ECD) via MOGE on 16 February Woodside has prepared this Environmental Monitoring Report for submission to MOGE and MONREC in accordance with the approved Environment Management Plan (EMP) and approval letter. This quarterly report covers the reporting period of 26 February to 12 May DESCRIPTION OF THE ACTIVITY Drilling operations commenced on 26 February 2017 from the Dhirubhai Deepwater KG2 (DDKG2) drillship in accordance with the Project Description provided in the EIA. Operations included a number of support vessels operating primarily out of Yangon (Myanmar) and Ranong (Thailand). Woodside undertook the exploration and appraisal drilling activities in AD-7 as operator on behalf of the AD-7 Joint Venture. To date the drilling program activities within AD-7 have included the reentry to Thalin 1B and associated testing. Thalin 2 commenced drilling in early May 2017 and this operation is continuing. All wells are located in AD-7, approximately 100 km offshore of the west coast of Myanmar. Thalin-1B and Thalin 2 are located in the Rakhine Basin, in water depths of approximately 800m. Exploration and appraisal drilling activities in AD-7 are continuing as at the date of this report. 3. ENVIRONMENTAL MONITORING 3.1 Implementation of Environmental Management Plan The Environment Management Plan (EMP), submitted to MONREC and approved as part of the EIA, was successfully implemented throughout the duration of the activity. Routine monitoring and auditing of environmental performance during the activity is conducted in accordance with the EMP. To date, the monitoring program has confirmed all environmental parameters were within the limits described in the EMP for the reporting period. Page 3 of 8

4 3.2 Implementation of approval letter conditions In accordance with the AD-7 approval letter, the following conditions are being reported: Condition (a) To comply with the environmental, social and health programs and monitoring programs as mentioned in the Report in implementing the project; (b) To comply fully with the commitments mentioned in the Report; (c) To comply with the prescribed norms and standards mentioned in the EIA Report for disposal of drilling fluids, drill cuttings, hazardous waste (liquid, solid) including chemicals, and nonhazardous waste; (d) To submit to ECD the location of appraisal wells 30 days prior to the commencement of project; (e) In case that appraisal wells will be drilled in 2018 and 2019, to submit Environmental Management Plan EMP for those wells to ECD for approval; (f) In drilling appraisal well, if it produces not only Dry Gas but Hydrocarbon Fluid more than expected, to stop the drilling and inform ECD immediately, to conduct Oil Spill Modelling if required, to conduct Impact Assessment of Oil Spill and to prepare Management Plan and to submit the Impact Assessment and Management Plan to ECD for approval. (g) To conduct regular monitoring on the oil content in drilling fluid from Mud Pit cleaning; (h) To comply with IFC guidelines for mercury and cadmium content in stock barite; (i) To collect additional primary baseline data during exploration and appraisal drilling operations Status The commitments in the EIA are being implemented. All conditions within the AD-7 EMP have been complied with for the reporting period. The disposal of drilling fluid, hazardous wastes, chemicals and non-hazardous wastes has been undertaken in accordance with the requirements of the AD-7 EMP and Waste Management Plan. Location of appraisal wells were re-confirmed with ECD on 8 February It is anticipated a revised Environmental Management Plan for any drilling activity proposed within 2018/2019 will be submitted in late Thalin 1 re-entry confirmed the biogenic dry gas petroleum system as per expectations outlined in the EIA. Mud pit oil content is monitored in accordance with EMP condition to ensure discharge does not exceed 1% oil content. Discharges have not exceeded 1% during the reporting period. Stock barite was tested prior to drilling program. Measured cadmium levels were less than 0.5 mg/kg and mercury levels less than 1 mg/kg, which are below the prescribed IFC limits of 3 mg/kg cadmium and 1 mg/kg mercury. In accordance with Section 3.3, baseline data collection has commenced during exploration and appraisal drilling operations. Page 4 of 8

5 (j) To submit oil spill contingency plan, Waste Management Plan, Emergency Response Plan and the class certificate of Dhirubhai Deep-water KG2 to ECD prior to commencement of Operations; (k) Prior to the commencement of the project, to submit the DDKG2 ERP and ERP bridging documents which are under preparation, as mentioned in Clause of EIA Report and those documents should basically, at least, cover the following points:- - Medical emergencies including medevac procedures; - Search and rescue includes man-overboard procedures and helicopter ditching; - Heavy weather/cyclone; Oil spill contingency plan, waste management plan, class certificate of the Dhirubhai Deep-water KG2 was submitted to ECD on 8 February 2017, prior to commencement of Operations. The DDKG2 ERP and ERP bridging documents were submitted to ECD on 8 February 2017 and includes: Medical emergencies, including medevac procedures; Marine Search and rescue (man overboard and helicopter ditching), and associated drills; Cyclone preparedness and response; and Hydrocarbon/ chemical spills to the marine environment. Loss of well control - Hazardous material spill response; - A MODU incident such as a loss of well control; and hydrocarbon release including Blow Out. (l) In case of any changes in project design and operation related to the project, Woodside Energy (Myanmar) Pte. Ltd. to inform ECD on behalf of its Joint Venture Partners; Changes to project design are managed in accordance with Section Management of Change of the AD-7 EIA. In accordance with Section 8.8 and Condition (l), any significant change in risk requiring modification of the EMP will be submitted to MOGE, MONREC and relevant authorities. (m) As per Stakeholder Engagement Plan (Table 9.2), to continuously consult with local communities and to consider and incorporate their suggestions and wants; (n) The ongoing EIA process (e.g. primary data collection, information and reports submission and submission of Management Plans, etc.) to be provided collectively as EIA follow-up report; The stakeholder engagement plan has been implemented throughout the drilling program. Updated EIA follow-up reporting information such as baseline and sediment monitoring reports and updated EMP and will be provided in accordance with Conditions (E) and (V). Page 5 of 8

6 (o) Not to conduct NADF Mixing business in Myanmar; (p) If Biocide is used as drilling fluid, to choose non-organohalogen type; (q) To use less toxic group (III) synthetic organic based fluids; (r) To use low sulphur marine fuel with sulphur content of 0.05%; (s) During 2017 Drilling Program to collect additional data including ROV Footage of benthic habitat, local bathymetry and seabed features, temperature, salinity and water depth data and to submit the result to ECD; (t) All the contracted vessels must (1) comply with IMO ballast water requirement (2) record taken up and discharge of ballast Water (3) submit to ECD together with the monitoring report as per prescribed timeline (u) At the place near the appraisal well drilling, to conduct assessment and regular monitoring of sediment and to conduct impact assessment in case of abnormal sediment changes in quality, to implement Management Plan and to submit it to ECD for approval (v) To submit Monitoring Plan with detailed frequency and responsibility (w) To comply with (clause 111 and 112) Chapter (9) Monitoring Plan of Environmental Impact Assessment Procedure and to submit Monitoring Report of (Exploration Drilling) every three months. No non-aqueous drilling fluid (NADF) has been mixed in onshore Myanmar. NADF is mixed on board the DDKG2 as part of the drilling program. No biocides containing organohalogens have been used. The base oil used during the drilling program is a Group III category fluid. Marine fuel used for the DDKG2 is sourced from Yangon Puma Facility, Myanmar, and fuel bunker delivery notes confirm the sulphur content is less than 0.05% sulphur. Refer to section 3.3 below for details on Baseline Monitoring Program. Results of the Baseline Monitoring Program will be provided to ECD when finalised. In accordance with IMO requirements, all project vessels record locations, volume and time of all ballast water uptake or discharges. Refer to section 3.3 below for details on the Sediment Monitoring Program. Refer to section 3.3 below for details on Baseline and Sediment Monitoring Program. This report is the Quarterly monitoring plan for the AD-7 Drilling Program. Page 6 of 8

7 3.3 Sediment and Baseline Monitoring Program In accordance with Conditions (s) and (u) of the AD-7 ECC approval letter, Woodside has commenced a representative sediment and baseline monitoring program within AD-7 with the intent of assessing abnormal changes in sediment quality and obtaining ROV footage of the benthic habitat, including local bathymetry and seabed features, temperature, and salinity. Details of the video transect survey and sediment monitoring program are provided below. Results of the environmental monitoring program will be provided to ECD when finalised. Video Transect Surveys Title Location Objectives Synopsis of methodology Location ROV Seabed Video Transects Representative Locations within AD-7 To collect representative imagery of seabed before and after exploration drilling for analysis and reporting to further document: a. The baseline existing environment of the deep-water exploration well sites and b. document the localised physical footprint of the drill cuttings and drilling fluids seabed deposition. Up to eight transects of approximately 150 m length running out from the well site location on the cardinal and inter-cardinal compass directions will be filmed at a standardised distance above the seabed before and after drilling. On the seabed around the well site. Along up to 8 x 150 m radial transects Sediment Monitoring Title Location Objectives Synopsis of methodology ROV Seabed Sediment Collection Representative Location within AD7 To collect representative seabed sediment samples to document and report on the sediment quality. Drill cuttings dispersion and deposition modelling demonstrated a predominant trajectory to the northeast/east. Based on the modelled predominant area of cuttings deposition, the sediment sampling design is planned to capture upstream sediment quality (i.e. least probability of sampling where cuttings deposition has occurred) and downstream sediment quality (i.e. maximising the where cuttings have been deposited to fully describing changes in sediment quality). Location The top 20 cm of each core sample will be used for environmental analysis (80 mm diameter) On the seabed around the well site at up to 12 sites representing predominant upstream and downstream cutting trajectory. This document is protected by copyright. No part of this document may be reproduced, adapted, transmitted, or stored in any form by Page 7 of 8

8 4. REPORTING ENVIRONMENTAL BREACHES During the drilling program, control measures were successfully implemented as described in the AD-7 EIA and EMP to reduce environmental impacts to as low as reasonably practicable. There were no environment, safety or social accidents or incidents that resulted in breaches of the commitments within the AD-7 EMP or approval letter for the quarterly reporting period. Table 4-1: AD-7 Environmental Breaches Date Incident Description Remediation Actions to prevent future occurrences Not applicable Not applicable Not applicable Not applicable This document is protected by copyright. No part of this document may be reproduced, adapted, transmitted, or stored in any form by Page 8 of 8