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SAFE PROFITABLE GROWTH
(
TALISMAN ENERGY 2011 CORPORATE RESPONSIBILITY REPORT
CORPORATE
RESPONSIBILITY
IS ABOUT HOW
WE DO BUSINESS
Talisman is a global exploration and development company. Our
business strategy takes us into parts of the world not traditionally
associated with the oil and gas industry. The success of our
strategy is intrinsically linked to our commitment to responsible
operations, mutual benefit, transparency and collaboration.
Managing the impacts of our activities, whether related to safety,
environmental, ethical or social performance, is an important
part of how we do business. We strive to set a standard for our
operations that will position us to be a welcome partner in
communities globally. Through our actions, we demonstrate that
we take our commitment to corporate responsibility seriously.
We encourage you to read on and let us know what you think
by emailing us at CR@talisman-energy.com.
Talisman is listed on the Toronto and New York stock exchanges under
the symbol TLM. For more information, visit www.talisman-energy.com
01 About Talisman 30 Communities and Stakeholders
03 How We Do Business 36 Governance
04 President’s Message 43 Key Numbers
06 Safety 44 Independent Assurance
14 Environment 45 Forward-looking Information
20 Shale Operating Principles 46 Global Reporting Initiative
22 People IBC Corporate Information
This report, produced annually, provides performance data on all aspects of our company on a consolidated basis,
for the year ending December 31, 2011. Unless otherwise indicated, figures are reported in metric units, and all
financial information is reported in US dollars. Unless the context indicates otherwise, reference in this report to
“Talisman” or the “company” is intended to include, for reporting purposes only, the direct or indirect subsidiaries
of Talisman Energy Inc. and, in certain circumstances, partnership interests held by Talisman Energy Inc. and its
subsidiaries. Performance information relating to joint ventures, where Talisman is not the operator, is excluded
except where otherwise noted. Talisman defines its stakeholders as its employees, shareholders, suppliers, service
providers, communities, indigenous groups, investors, debt holders, governments, regulators and non-governmental
organizations (NGOs) affected by, or that can affect, the company’s operations.
ABOUT TALISMAN
WHO WE ARE the early 1950s when our predecessor
company was founded.
We are a global oil and gas company,
headquartered in Calgary, Canada. Our three
main operating areas are North America, the ABOUT OUR BUSINESS
North Sea and Southeast Asia, and we have Over the next two decades, global energy
a portfolio of international exploration demand is predicted to increase by more
opportunities. Our objective is to deliver than 50%1. The development of abundant,
safe, profitable growth. affordable hydrocarbons is essential to
Our commitment and ability to conduct meeting this demand. Our opportunity
business safely and in a socially and is to develop and find safe and economic
environmentally responsible manner is sources of oil and natural gas and, in doing
thanks to the efforts of our 3,700 employees so, create value for our shareholders.
and decades of industry experience since
2011 FACTS AND FIGURES
$3.4
billion cash flow 2
$776
million net income
3,700
people employed in 17 countries
Our portfolio is structured to deliver safe, profitable growth
Oil-linked
426
Gas
13%
Liquids
42% Gas
26% thousand barrels of oil equivalent
produced per day (approximately
55% oil, 45% natural gas)
Shale Gas
19%
1 International Energy Outlook 2011, US Energy Information Administration
2 Cash flow is a non-GAAP measure. See advisories in Talisman’s 2011 annual report. TALISMAN ENERGY CORPORATE RESPONSIBILITY REPORT 2011 01
OUR PORTFOLIO has grown from virtually nothing three years
ago to over 500 million cubic feet equivalent
Talisman’s portfolio balance of crude oil, per day in 2011. The company is shifting into
natural gas and natural gas liquids, enables us liquids rich shale plays in the short term and
to adjust our strategy to market dynamics. It looking to leverage these skills internationally.
is structured to deliver 5 to 10% production
growth through the medium term and to lead
SOUTHEAST ASIA
to the long-term renewal of the company.
sustainable, self-funding, medium-term growth
We have four focus areas:
Approximately 30% of our production comes
LEGACY ASSETS from Southeast Asia, where natural gas prices
generating cash flow to reinvest are linked to oil and liquids. We expect
self-funded growth of approximately 8%
Our legacy assets are conventional properties, annually through the medium term, in a region
mostly oil and liquids, in North America and where demand for energy is growing rapidly.
the North Sea. Our intent is to invest to
maintain the integrity and quality of these
EXPLORATION
assets, while continuing to high grade this
focus on material prospects for long-term renewal
part of the portfolio. This provides a base
of long-term production and generates cash We are building a focused international
to invest in other parts of the business. exploration portfolio that will contribute to
our renewal through the discovery of material
UNCONVENTIONAL hydrocarbon resources. In Latin America,
low cost, large potential, scalable we have made a number of encouraging oil
discoveries and, in Southeast Asia, we are
We have built significant positions in top-tier targeting natural gas. The forward emphasis
shale plays in Pennsylvania, Texas, British will be on deepwater oil and liquids-rich
Columbia and Alberta. Our shale production unconventional plays.
GLOBAL PRODUCTION
NORTH SEA
conventional production
NORTH AMERICA
conventional production
generates cash flow, shale
41%
of total 2011 production
generates cash flow provides long-term growth
25%
of total 2011 production
OTHER LATIN AMERICA
28%
6%
building new core area –
acquisition, development of total 2011 production
and exploration
of total 2011 production SOUTHEAST ASIA
self-funded through growth
and exploration
02 TALISMAN ENERGY CORPORATE RESPONSIBILITY REPORT 2011
CORPORATE RESPONSIBILITY AT TALISMAN
IT’S HOW WE DO BUSINESS
OUR APPROACH talent, create business opportunities, mitigate
risk and support our objective of safe,
Corporate responsibility (CR) is an integral profitable growth.
part of how we do business.
Our commitment to CR starts with our Board THREE STRATEGIC PRINCIPLES
of Directors, is directed by management and As a global operator, each of our geographic
supported by our 3,700 employees around the areas has unique operating, environmental
world. As a company, we need to recruit and and social challenges. However, we are guided
employ talented people who share our values. globally by three overarching principles:
We need to be accepted into communities.
We want to be a partner of choice. We want Responsible Operations
respected companies to want to work with minimizing our impact on the environment
us. We need governments to trust us when
we say we will operate safely, ethically Mutual Benefit
and responsibly. ensuring we benefit the communities
Doing what we say and conducting our business in which we operate
in a responsible manner is essential to achieving
Transparency and Collaboration
these objectives. Being a responsible, ethical
corporate citizen is not only the right thing to being open about our operations, involving
do, it is essential to our objective of safe, stakeholders in our project plans
profitable growth. In the following pages, you will find detailed
information about, and some examples of,
OUR STRATEGY our progress in terms of safety, environment,
people and governance. The topics throughout
DEFINING HOW WE DO BUSINESS this report touch every aspect of our operations
CR is about how we do business: we will be and demonstrate our efforts in action.
safe, we will be ethical, we will be transparent,
If you have comments or questions, please
and we will be responsible – wherever we
email us at CR@talisman-energy.com.
operate. Acting in this way helps us attract
WHERE WE FOCUS OUR EFFORTS
GOVERNANCE SAFETY
because highly ethical practices and because it is paramount we
oversight of our business conduct protect the health and well-being
and processes help us deliver our of our workers and communities
commitments and manage risks RESPONSIBLE
OPERATIONS
MUTUAL BENEFIT
TRANSPARENCY
AND COLLABORATION
COMMUNITIES ENVIRONMENT
AND STAKEHOLDERS because minimizing the
engaging and benefiting stakeholders environmental impacts of energy
builds public support for our business exploration and production is one
of industry’s key challenges
PEOPLE
because attracting the best people and developing
their full capabilities makes us a stronger organization
TALISMAN ENERGY CORPORATE RESPONSIBILITY REPORT 2011 03
PRESIDENT’S
MESSAGE
Corporate responsibility is an integral part securely contained and that all safety critical
of our business strategy. Equally important, equipment is properly maintained.
it reflects who we are and the values of the
people who work here. Many new employees OPERATING RESPONSIBLY
tell us the reason they chose Talisman is – THE ENVIRONMENT
because of how we conduct business. Our
people take an active interest in our safety We are committed to environmental performance
and environmental performance as well as that meets or exceeds regulations wherever
our impact on communities. we operate and are striving to minimize
our footprint.
Demand for hydrocarbons will continue to
increase for the foreseeable future. Satisfying Some of our activities take us to relatively
some of this energy demand, in a manner isolated parts of the world, where we operate
that is acceptable to our stakeholders, is key in sensitive ecological areas. Here we focus
to our strategy of safe, profitable growth. on working with local communities to take all
Our success as a company depends on our necessary measures to protect and restore
ability to operate responsibly, collaboratively the natural environment.
and transparently, while ensuring that the In some of our shale operations, we operate
communities in which we operate benefit in multi-use areas, which support communities,
from our activities. recreation and agriculture. The way we conduct
business is essential, and I am pleased that
SAFE OPERATIONS IS OUR Talisman is the first Canadian oil and gas
NUMBER ONE PRIORITY company to introduce a comprehensive set of
shale operating principles. We developed and
The safety of people is our top priority.
introduced these because we recognize public
Several years ago, we conducted extensive
concerns around shale development and are
benchmarking across our operations and
committed to not only follow best practices,
found that our performance in this area
but to lead the way.
was below average. We took action and
set a five-year plan aimed at achieving Our shale principles incorporate disclosure
first-quartile safety performance. of fracturing fluids, minimizing the impact
of our operations on the natural environment,
Four years later, we have improved
limiting emissions and continuous improvement
significantly. Notably, we have reduced
in water conservation. Some of our principles
the frequency of lost-time injuries by 72%,
are aspirational today; however, our goal is
taking our performance on this metric into
continuous improvement. We believe shale
the second quartile. Although this is a
can be developed safely and with minimal
tremendous accomplishment, there is still
detriment to the environment. The benefits
more to do. We remain focused on our target
to society of developing such an abundant
of achieving first-quartile performance.
resource of affordable, clean energy are
In 2011, we experienced a fatality with a significant, and our shale principles are
subcontractor. This was a sad moment for a step toward that goal.
everyone at Talisman, and our sympathies
One area where our 2011 performance was
go out to the family. We have learned from
disappointing relates to an increase in the
this tragedy, and continue to strengthen
number of spills greater than half a barrel.
our safety culture.
This can be partially attributed to an increase
We are also continuing our focus on process in our activity. However, we are taking steps
safety, ensuring that proper operating procedures to improve this and have targeted a 10%
are followed, dangerous substances are kept reduction in 2012.
04 TALISMAN ENERGY CORPORATE RESPONSIBILITY REPORT 2011
We believe we have a solid track record in employees around the globe with common
terms of our environmental performance, values and a common commitment. Our
taking care to minimize our environmental people are trained, equipped and supported in
footprint and working to restore areas back making the right choices wherever we operate.
to the condition they were in before our
The attraction of our company is that we offer
operations. Going forward, we are placing
an exciting work environment in a fast paced,
greater emphasis on water conservation and
global company, where the development of
recycling, particularly in our shale operations.
our people is a top priority. In 2011, over
90% of our employees completed career
COMMUNITIES – MUTUAL development programs, building on core
BENEFIT AND TRANSPARENCY competencies and mapping out possible
As a global business, we place great career development opportunities within
John A. Manzoni
emphasis on our transparent and collaborative the company. Equally important, we advanced President and Chief Executive Officer
interaction with the communities in which over 600 employees into new roles.
we operate. In 2011, this was further
supported through our global community NEXT STEPS – THE EVOLUTION
relations policy. Our objectives include OF CORPORATE RESPONSIBILITY
respecting the rights and interests of AT TALISMAN
indigenous and tribal communities,
For many years, we have used this report to
understanding their cultural needs, finding
provide public transparency to many of our
ways to share the economic benefits of oil
activities and key performance indicators
and gas development, and meeting the
(KPIs). Going forward, we will continue to
expectation that we will do no harm.
stretch ourselves, setting new challenges,
A good illustration of this policy in practice targets and KPIs that reflect the priorities
is Peru, where we continue to work closely with of our business and stakeholders.
local communities. We operate only where we
We have been recognized as a leader in
have the consent of these communities, and
corporate responsibility for many years by
we expanded our efforts in 2011 through
a number of independent organizations that
a series of multi-federation meetings.
track performance in this area. Although we
In 2011, we invested $9.5 million to help are proud of our past, we will keep listening,
address key social issues and enhance the keep learning and keep improving.
communities in which we operate, partnering
Understanding what is important to our
with a number of non-governmental organizations.
stakeholders helps us manage and mitigate
Through our involvement with The Centre for
risks to our business. Your feedback at
Affordable Water and Sanitation Technology
CR@talisman-energy.com is important to us.
(CAWST) in 2011, our efforts gave one
million people across the globe access
to better water and sanitation.
OUR EMPLOYEES – MAKING
TALISMAN A GREAT PLACE TO WORK John A. Manzoni
President and Chief Executive Officer
The technical challenges of oil and gas Talisman Energy Inc.
development, plus our commitment to May 1, 2012
responsible operations, requires hard-working,
conscientious, bright people. Our track record
of operating in a safe, responsible, ethical
manner is the result of thousands of
TALISMAN ENERGY CORPORATE RESPONSIBILITY REPORT 2011 05
SAFETY 06 TALISMAN ENERGY CORPORATE RESPONSIBILITY REPORT 2011
Being a responsible operator means we prioritize the
safety of people above all else. We continuously set
improvement targets, assess performance and enhance
policies and processes to develop best practices. Our
goal is to be a consistent top-quartile performer.
TALISMAN ENERGY CORPORATE RESPONSIBILITY REPORT 2011 07
SAFETY SCORECARD
2011 PERFORMANCE
45%
improvement in our
17%
increase in the number
23%
improvement in total
lost-time injury frequency of unintentional recordable injury frequency
hydrocarbon releases
2011 PERFORMANCE AND 2012 PLANS
What we said What took What we plan
we’d do in 2011 place in 2011 for 2012
• achieve 20% reduction in • decreased our lost-time injury • reduce lost-time injury
lost-time injury frequency frequency by 45% p09 frequency by an additional 15%
• achieve 20% reduction in total • reduced our total recordable • reduce total recordable injury
recordable injury frequency injury frequency by 23% p09 frequency by an additional 20%
• reduce unintentional hydrocarbon • experienced 17% increase • reduce flammable unintentional
releases by 20% in unintentional hydrocarbon hydrocarbon release frequency
releases p11 by 20%
• achieve zero backlog of • achieved zero backlog of overdue • achieve zero backlog of
overdue safety critical repairs safety critical repairs in all overdue safety critical repairs
operating regions p11
• achieve zero overdue • achieved zero overdue safety • achieve zero overdue critical
safety critical preventative critical preventative maintenance preventative maintenance
maintenance man-hours man-hours in all areas except man-hours
the UK p11
• introduce and implement a • implemented a global well
global well control standard control standard in each
region p10
• measure implementation of the
Talisman operating management
• focus on implementing our • began implementing the global
system (TOMS) against specific
global contractor health, HSE contractor management
milestones for five standards
safety and environment (HSE) standard in our highest risk
management standard for operations but have more work
our highest risk operations to do p12
• each region will implement five • each region implemented
Golden Rules for Safe Operations, two Golden Rules for Safe
an important part of our global Operations p10
safety culture standard; the
remaining five rules will be
implemented in 2012
• pilot PREVENT, a barrier
management tool, in the UK
* In our 2010 CR Report, we included reference to operationalizing global standards,
emergency and crisis management structures, and development work on several
standards, all to be progressed during 2011. In 2011, we made progress against
each of these commitments; however, they no longer constitute scorecard items.
08 TALISMAN ENERGY CORPORATE RESPONSIBILITY REPORT 2011SAFETY
OUR APPROACH One of the key safety measures we track is
the rate of lost time due to workplace injuries.
Safe operations are a core value. If operational
results and safety ever come into conflict, we Our 2011 lost-time injury frequency (LTIF)
will choose safety. Our goal is to create a work improved 45% from 2010, taking our
environment where we cause no harm to performance on this metric into the second
people, and we engineer, construct and quartile. Our total recordable injury rate
operate our businesses to prevent major (TRIF) improved 23%, but we remain in
accidents. The visible commitment of our the fourth quartile for this metric. These are
leadership, at all levels of the organization, tremendous achievements; however, as you
helps us ensure safety remains our top priority. will read in this section of the report, we have
a number of initiatives underway to improve
performance again in 2012. As an example,
PREVENTING PERSONAL we plan to focus on improved contractor
SAFETY ACCIDENTS management at our sites and facilities.
We strive to keep people safe through our work
Contractor fatality in Alberta
practices, education and training. Because we
are not satisfied with the status quo, we have Although we strive to create a work
set key performance indicators for improved environment where accidents do not occur,
performance. We also investigate every safety tragically a company working for Talisman
incident that has the potential to seriously experienced a fatality in 2011, when a
harm someone. These are discussed with subcontractor, dismounting from the cabin
the Chief Executive Officer (CEO) and his of a large tractor, was crushed under the
leadership team. equipment. The incident was investigated
in accordance with our incident reporting,
investigation and analysis practice.
GLOBAL LOST-TIME GLOBAL TOTAL RECORDABLE
INJURY FREQUENCY INJURY FREQUENCY
(per million exposure hours) (per million exposure hours)
2.0 5.00
4.68
4.00
1.5
3.00 3.56 3.62
1.0
1.08
0.98 2.00
0.5
0.54 1.00
0 0
2009 2010 2011 2009 2010 2011
We reduced our lost-time injury frequency We reduced our total recordable injury
by 45% from 2010*. Contributing factors to frequency by 23% from 2010*, surpassing
this performance were enhanced leadership our goal of a 20% improvement.
in our shale operations and operational
readiness reviews.
* 2010 values have been restated as a result of
enhancements to the calculation methodology.
TALISMAN ENERGY CORPORATE RESPONSIBILITY REPORT 2011 09IMPLEMENTING OUR GOLDEN Although the vast majority of our operations
RULES FOR SAFE OPERATIONS function without incident, where these do
occur, we move quickly to minimize the impact
Crucial to managing personal safety is building
on people and the environment. In every case,
an entrenched safety culture where clear rules
we undertake a review, share these learnings,
and procedures are consistently followed to
and make corrections and improvements.
prevent personal injuries. To reinforce our
commitment to safety, we have established our Responding to equipment failures
10 Golden Rules for Safe Operations. These in the Marcellus
rules have been an important part of our recent
On two occasions, December 2010
improvement in personal safety. Implementing
and January 2011, in the Marcellus, we
all 10 rules across the globe has been a major
experienced serious valve failures in our
undertaking. Each of our operating regions
completion (hydraulic fracturing) activities,
introduced at least two rules in 2011.
which caused surface releases (mostly water
and sand) under high pressure. No one was
OPERATIONAL READINESS REVIEWS harmed, and there was no damage to the
BEFORE MAJOR PROJECTS environment. We immediately shut down
There is a significant risk of injuries these activities until we understood the
occurring during project startups. In 2011, cause of the failures. After investigating,
we implemented a structured assurance we determined that both incidents were
process called operational readiness reviews. caused by inadequate valve refurbishment
These reviews help ensure we have the right by a subcontractor. We worked with our
processes, people and equipment in place contractor to ensure they introduced new
before commencing major operations. We quality-control procedures to inspect these
involve participants from different disciplines valves. We are working with our contractors
across the organization to build in objectivity. and subcontractors to implement the new
requirements to prevent similar incidents.
Last year, we piloted 15 reviews globally,
including a number at our exploration wells, Addressing hydrocarbon releases
notably our deepwater Lempuk well offshore on a North Sea platform
Indonesia. In our Eagle Ford shale operation, In May and June 2011, we had five separate
we delayed startup until we were satisfied that unintentional releases of flammable gas on our
we were able to operate according to our safety Claymore platform. Although the volumes were
standards. These reviews are now part of how relatively small, as required by law, we reported
we do business. them to the UK’s offshore safety regulator, the
Offshore Safety Division of the Health and
PREVENTING Safety Executive. We also immediately
conducted our own investigation.
MAJOR ACCIDENTS
The regulator served a prohibition notice
Process safety is about taking preventative
in August, and we complied by shutting
measures to ensure hydrocarbons and other
down production beyond a planned 70-day
dangerous substances are contained where they
turnaround (an annual shutdown where
belong. Good process safety policies, procedures
thorough inspections, equipment testing
and practices can avert major unplanned events
and other key safety measures are carried
that can lead to fires, explosions or spills, and
out), while we worked to resolve the
may result in casualties or significant damage
outstanding issues.
to equipment. Our process safety framework
encompasses well-designed and maintained As a result of our investigation, we made
facilities, the right processes to operate these fundamental changes in four key areas: control
facilities, and competent trained people. At of work, inspection, maintenance, and incident
Talisman, this commitment and leadership investigation. We have also put particular effort
starts at the very top of our organization. into improving safety behaviours on Claymore.
For example, we now have a dedicated resource
10 TALISMAN ENERGY CORPORATE RESPONSIBILITY REPORT 2011to control maintenance work in production PROCESS SAFETY INDICATORS
operations, and we introduced new tools to
We measure the success of process safety and
improve safety conversations. We are in the
operational integrity management through a
process of applying these lessons across our
number of performance indicators, including
UK operations.
unintentional hydrocarbon releases and the
A barrier management system, called PREVENT, number of overdue repairs of safety critical
will be piloted in 2012 in our UK operations. equipment. In 2011, we experienced a
It will document the layers of protection we 17% increase in unintentional hydrocarbon
have in place to safeguard our operations releases, largely due to a significant increase
against major accident hazards. Using a in our shale activity. Our target for 2012 is
street light model of red, yellow and green, to reduce global flammable unintentional
it will provide a quick diagnostic of possible hydrocarbon release frequency by 20%.
issues that require attention.
During the year, we achieved a zero backlog
of repair orders for safety critical equipment
in all areas.
UNINTENTIONAL HYDROCARBON
RELEASES (UHRs)
frequency (number number of UHRs
of UHRs per million
exposure hours)
12.0 400
345
9.0 300
8.65
6.0 200
138
118
3.0 100
2.41
2.46
0.0 0
2009 2010 2011
An unintentional hydrocarbon release is any
unintended release of petroleum hydrocarbons,
resulting from a process safety related incident.
From 2010 to 2011, we experienced a 17%
increase in unintentional hydrocarbon releases,
the majority stemming from a significant increase
in our North American shale activities.
NEW DEFINITION FOR
HYDROCARBON RELEASES
We are introducing a new definition to enhance incident reporting. In the
future, we will report flammable unintentional hydrocarbon release frequency,
in addition to unintentional hydrocarbon releases. This additional performance
metric starts our transition to align with the reporting standard introduced by
the International Association of Oil and Gas Producers. We will begin reporting
on this measure in next year’s corporate responsibility report.
TALISMAN ENERGY CORPORATE RESPONSIBILITY REPORT 2011 11BUILDING A colleagues to display the correct safety
behaviours and attitude. During 2011, we
SAFETY CULTURE
commenced quarterly engagement sessions
REINFORCING SAFE BEHAVIOURS with the Care champions to help them create
ON OUR WORK SITES further awareness of the program and to
share best practices.
We place a strong emphasis on peer-to-peer
observations and supervisor mentoring to
GLOBAL CEO SAFETY AWARDS
raise awareness of hazards and correct
safety behaviours. In 2011, we continued In order to build upon our safety culture,
to reinforce these programs in our our annual CEO safety awards identify and
North America and UK operations. acknowledge individuals across our global
operations who have introduced further
North America improvements to our safety culture,
We continue to provide behaviour-based safety safety leadership and contractor safety
training, launching a pilot program in our drilling management practices.
and completions operations. Through a two-day
training program, front-line supervisors and IMPROVING CONTRACTOR
workers gained new skills for carrying out safety MANAGEMENT
inspections, providing feedback to workers and
holding effective safety meetings. Our company works with thousands of
contractors worldwide. These contractors are
UK expected to follow the same safety standards
We are building a positive personal safety as our employees. To bring more consistency to
culture in our UK operations through our Care contractor performance, we are implementing a
program. This program operates on the premise global contractor health, safety and environment
that everyone has a duty to ensure they are management standard. The standard provides
executing tasks in the safest manner possible a common system for evaluating and selecting
and that their peers are not endangering contractors and working with them to enhance
themselves or others. Care encourages people safety practices. In 2011, we began, but did
to step in when they see an unsafe act, not complete, the implementation of this
recording the intervention so that it can be standard among contractors working in our
shared across the UK’s 12 operational sites. highest risk operations. Completing this is
A network of volunteer Care champions a priority in 2012.
promote the program, encouraging their
12 TALISMAN ENERGY CORPORATE RESPONSIBILITY REPORT 2011ANTICIPATING right away, 21 were safely released within
24 hours, and one worker was detained for
AND MANAGING RISK
140 days. Throughout this incident, we
IMPLEMENTING OUR continued to work with the Colombian
MANAGEMENT SYSTEM authorities, the local communities and
our partners to support the safe release
The Talisman operating management system of the remaining contractor. We also
(TOMS) provides a framework for managing provided resources and support for the local
our operations. Once fully implemented, it will contractors and the affected employees.
provide a single, global system that integrates
our key operating parameters for managing Peru
health, safety, security, environment, Between September 18 and 27, cargo boats
operational assurance, global projects, operated by third-party contractors working
and drilling and completions. for us were stopped by members of a local
In 2011, we continued to implement 11 federation on the Morona River in Peru. Four
existing global standards in our different boats and 11 crew members were detained
regions. Based on industry best practices, near the community of Shinguito, outside our
the standards define the minimum criteria operating area in Block 64. After conversations
for the way we will operate. among our representatives, government officials
and members of the community, federation
Responding to security incidents leaders agreed to release crew members and
in Colombia and Peru boats, cease blockade activities on the river
During 2011, we experienced two and engage in conversations to present their
significant security incidents: grievances and issues. Subsequent meetings
with the local federation have been positive,
Colombia and social support agreements for 2012 have
On March 7, 23 contractors were abducted been reached.
from their forest camp by an illegal armed In both cases, we made these incidents a top
group in the province of Vichada. The workers priority and mobilized the required expertise
– all of whom were Colombian and most from and resources, both inside and outside of our
local indigenous communities – were carrying company. Our relationships with communities
out seismic work for one of our contractors and governments played an important role
when they were captured. One worker escaped in resolving these situations.
TALISMAN OPERATING
GLOBAL POLICIES
MANAGEMENT SYSTEM (TOMS)
• global corporate expectations –
everyone must know and follow
• matters of significant corporate risk
GLOBAL STANDARDS
• gives the “what” but not the “how”
• global expectations plus processes
and tools
function-level
• helps employees understand how region-level PROCEDURES
to comply with laws, regulations, country-level
• translation of global standards into
and global policies site-level
regional, country, functional, or
site-specific process steps and tools
GUIDELINES • complies with local laws, as well as
• recommended processes, tools, global policies and standards
protocols, best practices that help
employees comply with policies,
standards and procedures Our operating management system framework helps us to manage risks,
set common expectations for employees and contractors, and is central
to understanding and improving our performance.
TALISMAN ENERGY CORPORATE RESPONSIBILITY REPORT 2011 13ENVIRONMENT 14 TALISMAN ENERGY CORPORATE RESPONSIBILITY REPORT 2011
We are committed to environmental performance
that meets or exceeds regulations, wherever
we operate. Understanding and minimizing
our impact on the environment are important
considerations in the decisions we make, both
prior to and after commencing operations.
TALISMAN ENERGY CORPORATE RESPONSIBILITY REPORT 2011 15ENVIRONMENT SCORECARD
2011 PERFORMANCE
24%
increase in the number of spills
100%
of well completions in the
1
water conservation
(greater than 0.5 barrel) across Pennsylvania Marcellus play were performance program
our global operations green completions, capturing piloted in our
shale business
methane for production and
lowering emissions
2011 PERFORMANCE AND 2012 PLANS
What we said What took What we plan
we’d do in 2011 place in 2011 for 2012
• reduce the number of spills • experienced a 24% increase • achieve a 10% reduction
(greater than 0.5 barrel) in the number of spills p17 in our spill frequency
by 20%
• began developing a freshwater • collect baseline data on
intensity performance indicator freshwater use intensity
for our shale operations p17 in our shale operations
• began developing a green • collect baseline data
completions performance on green completions
indicator for our shale in our shale operations
operations p19
16 TALISMAN ENERGY CORPORATE RESPONSIBILITY REPORT 2011ENVIRONMENT
OUR APPROACH efforts to improve spill prevention and
awareness, particularly in our North America
Our goal of continuous improvement in our operations. These efforts will include a focus
environmental performance includes fully on the mechanical integrity of our facilities
integrating environmental considerations and equipment, and improvements to our
into our business and making efficient use training and procedures. Our 2012 target is to
of resources. We carefully plan all projects achieve a 10% reduction in our spill frequency.
and operations so as to minimize our
impacts on air, land and water.
GLOBAL NUMBER OF SPILLS
(number of spills greater than 0.5 barrel)
PREVENTING SPILLS frequency (number number of spills
of spills per million
We take spills seriously, tracking exposure hours)
and recording them across our global
6.0 200
operations. By investigating for root
causes, developing corrective actions
157
and sharing what we learn, our goal 4.5 150
134
is to prevent similar incidents from 3.94
occurring in the future. 108
3.0 100
In 2011, our number of spills greater 2.34
than 0.5 barrel increased 24% from 2.25
1.5 50
108 in 2010 to 134. Almost all of these
incidents occurred in our North America
operations. While we believe this number 0 0
in part reflects enhanced reporting
2009 2010 2011
practices and a significant increase in
our activity level, we are not satisfied Global number of spills represents the unintended
with our spill performance. liquid discharges outside of secondary containment
or other impermeable confinement, where 0.5 barrel
We will continue to be transparent around or more reaches the environment. Spills include both
the number of global spills; however, hydrocarbon (e.g. crude oil, condensate, other
unrefined petroleum products, diesel fuel, gasoline,
starting in 2012, we will report and set
and other refined petroleum products) and other
targets around spill frequency per million liquids such as produced water, drilling fluids,
man-hours. This will enable us to better chemicals, etc. 2010 values have been restated as a
understand spill data in the context of our result of enhancements to the calculation methodology.
activity levels. We will also intensify our
TALISMAN ENERGY CORPORATE RESPONSIBILITY REPORT 2011 17Strengthening spill prevention established with regional suppliers for
in North America operations emergency response equipment, manpower
In our North America operations, we have and transportation equipment. To make the
a 2012 target to reduce our spill frequency plans actionable, workers on our rig platform
by 15%. We will strive to achieve this and service vessels were trained for emergency
by improving fuel handling, increasing response roles and regular drills were conducted
inspections and replacing aging equipment. to exercise spill response capability.
In our shale operations, we inspected all We are now applying the same rigour to spill
drilling rigs in the Montney play in northeast planning and safety as we begin planning for
British Columbia for potential spill issues. a deepwater well off the coast of Sierra Leone
This resulted in a number of upgrades and in West Africa and wells offshore Vietnam.
the installation of secondary containment
under storage tanks. REDUCING OUR
Developing spill contingency
LAND FOOTPRINT
plan for Lempuk well We conduct studies to identify and minimize
We drilled our first deepwater well in late encroaching on environmental features, such
2011, the Lempuk 1, off the coast of as streams and wetlands, early in the planning
Indonesia. We developed a comprehensive stages of our exploration projects. We work to
contingency plan to prepare for the low minimize the size of land to be cleared and try
likelihood of an oil spill in the remote area. to avoid sensitive environmental areas through
A well control specialist company was on routing and schedule adjustments. In some
contract throughout the drilling program. cases, as in our shale gas developments, we drill
Oil spill modelling was completed to multiple wells from a common pad to minimize
understand what could occur in the event our footprint. Impacts on wildlife and fauna
of a spill, and to identify the right response are important considerations throughout
options and equipment. Contracts were our planning and operating activities.
18 TALISMAN ENERGY CORPORATE RESPONSIBILITY REPORT 2011We are drilling exploration and appraisal gas from the water and routing it into a
wells in the jungles of Papua New Guinea. gathering line for sale. This avoids wasting
In carrying out this operation, we are a valuable energy resource and reduces
concentrating on ways to decrease our greenhouse gas emissions. During 2011, all
environmental footprint and minimize our of our 134 completions in the Marcellus were
operating costs. We have created an efficient green. As part of continuous improvement, we
“fit for purpose” strategy, which reduces have begun collecting baseline data on green
the size of our well pads. completions in our other shale operations.
Cleaner fuel mix for rig engines
MANAGING EMISSIONS
In the Montney, our drill rigs are powered by
Greenhouse gas emissions pose a significant modified diesel engines, which use a mix of
regulatory and reputational risk to our industry. diesel and natural gas. In late 2011, we began
The use of economic energy measures that testing a fuel blend containing up to 80%
can be integrated into our daily business to natural gas. By processing and piping natural
improve energy efficiency and operations gas from our production to some of our rigs,
is a priority. we can provide a cleaner fuel mix, reduce the
need to truck diesel on local roads, and achieve
In 2011, we achieved a modest 7.5% decrease
economic savings. We are now evaluating this
in our global production carbon intensity
strategy to measure the benefits and extend
(tonnes of carbon dioxide (CO2) equivalent
it potentially to other shale operations.
emissions per barrel of oil equivalent
production) over the previous year.
Collaboration on emissions study
We recognize this as an area for further We support collaborative fact-finding that
attention and continue to look for contributes to the development of best
opportunities to improve efficiency, practices for reducing emissions. We have
conserve energy and reduce emissions joined with the Environmental Defense Fund
on a project-by-project basis. and a group of other companies to sponsor
a University of Texas-led study to quantify
We also participate in reporting initiatives
methane emissions from typical shale gas
such as the Carbon Disclosure Project.
operations in the US. When completed in
This is an independent not-for-profit
early 2013, the study will help us to identify
organization that works with corporations
new opportunities to minimize emissions.
to disclose information on their greenhouse
gas emissions performance.
MANAGING EMISSIONS IN
OUR SHALE OPERATIONS
We are committed to taking actions to
reduce our company’s greenhouse gas
emissions, starting with our North
America shale operations.
Here are some highlights of our
2011 activities:
Green completions
We are taking steps in the Marcellus to
capture methane during well completions
through a process known as green
completions. Our standard operating
procedure is to use portable equipment
to process the gas on site, separating the
TALISMAN ENERGY CORPORATE RESPONSIBILITY REPORT 2011 19OUR SHALE OPERATING PRINCIPLES
Shale development is one of the highest
profile issues in our industry; opinions are
A journey
polarized. Talisman cannot single-handedly
Getting it right
influence the
of continuous debate, but we can set a
improvement
standard for our own operations that will
position us as a welcome partner in the
Because it’s important
communities in which we operate.
Shale development is an integral part of our “The principles cover all aspects of our
We haveour shale
we doubled established
volumes, largely dueand the committed
resource, but also, how we toprotect
shale
company’s growth strategy. Throughout 2011 shale business – not just the way we develop
the
to tremendous growth in the Marcellus. Now, environment, ensure communities benefit
operating
in response to whatprinciples,
we believe will be an which
from our are
activitiesapproved
and how we can beby
ongoing period of low dry gas prices, we will more transparent about our operations.
our
focusexecutive
on liquids and aim toand endorsed
double production We alreadyby striveour
to meetboard of
high standards
in the liquids rich Eagle Ford in 2012. and measure our performance on a regular
directors. These aspirational principlesdemand basis; however, these principles will
However, exponential growth in the North that we continuously improve our operations.
guide
American our employees
shale industry has attracted and
Thiscontractors
is important, because ratherinthan
focus on the things we do well, we will
significant attention. There are opponents to
carrying
shale development outand responsible
some jurisdictions shale operations
continually push ourselves to do better. This
have gone so far as prohibiting development. is what industry leading businesses do,
across the globe.
Simply put, the public demands that those
involved in shale development ‘get it right.’
and essentially our principles articulate an
aspiration to be a sector leader in safe and
Talisman couldn’t agree more. sustainable shale operations.”
Our shale operating practices
The question is: Can shale development
will be
Sandy Stash, SVP of HSSE/OI has been
shaped by three overarching
be done safely? We believe it can, and in
addition to strong regulations, we believe
principles:
instrumental in developing the principles.
“Our principles set us apart and serve as
shale developers must act responsibly, a declaration that Talisman will be a leader
transparently and ensure their activities in responsible shale development. They
Responsible Operations
benefit the communities in which they
operate. This is why we have developed our
provide a clear framework for our practices
but we must all expect them to evolve. As
shale operating principles. we introduce management systems, monitor
We will work to prevent accidents and spills, performance, learn from our peers and
Jim Fraser, SVP Shale Division explains, our own experiences, we will undoubtedly
while at the
“Our 58 principles havesame time conserving and
the best possible embrace new technologies and processes.
As a result, we will maintain the journey of
foundation, as they have been driven by
protecting
the business and arefreshwater
built around our sources. We will strive
continuous improvement. This will take time,
but in the meantime, we should all feel proud
determination to lead the industry by
toexample.
minimize our
They are ambitious, operational
but we must footprint, protect
that our business is willing to set, and hold
itself accountable to these principles.”
remember that we have industry-leading
Shale Operating Principles
airtalent
quality, minimize
and expertise, and are capable of emissions and reclaim
delivering such high standards.
land following our operations.
02/2012
Mutual Benefit
Our intent is that every community in which These principles have been designed to
we operate will benefit from our presence. minimize impact on the environment, benefit
This may take many forms: employment and the communities in which we operate and bring
training opportunities, local procurement additional transparency into our operations.
strategies, community investments, etc. In They cover a range of impacts, including
all cases, our support will be informed by environment, supply chain, regulatory
a deep understanding of their priorities. interactions, community benefits and
stakeholder engagement.
Transparency and Collaboration
We will work with industry peers, For more information on our shale operating
governments, NGOs, academia and principles, visit www.talisman-energy.com
communities to continuously evolve best
practices and aim to create and nurture
positive working relationships with our
stakeholders. We will lead by example
by continuing to disclose information
on hydraulic fracturing fluids.
20 TALISMAN ENERGY CORPORATE RESPONSIBILITY REPORT 2011CONSERVING AND In 2011, we began collecting data in our
shale gas operations in the Montney and
PROTECTING FRESH WATER
Marcellus to better understand our current
IN OUR SHALE OPERATIONS intensity of fresh water use. We intend to
Our goal is to conserve and protect begin reporting on this performance indicator
freshwater resources through all stages in next year’s corporate responsibility report.
of our shale development activities. This
includes conducting baseline assessments Protecting groundwater in the Marcellus
on the quality and quantity of groundwater The Marcellus is recognized as one of the
we use in order to evaluate, monitor and most promising sources of natural gas in
mitigate potential long-term impacts. North America. Along with this recognition,
there has been dialogue among industry,
We also manage well integrity throughout well regulators, local residents and environmental
design, construction and operations. Before activists regarding the degree of risk to
starting to drill, we carry out voluntary testing groundwater resources, and the appropriate
of domestic water wells in the vicinity. We management of that risk.
follow stringent wellbore casing techniques
that meet or exceed industry guidelines Throughout 2011, we focused on developing
designed to protect fresh water, and we and implementing programs aimed at
monitor our practices and strive for assessing and managing risk to groundwater
continuous improvement in each well program. resources, including communicating and
cooperating with stakeholders to ensure
We look for opportunities to maximize the that their needs are addressed. This effort
reuse of produced water (fluid that flows has led to the development of a groundwater
back through the wellbore to the surface), protection program, which includes:
storing it and reusing it in future wells.
Reuse of produced water helps to minimize • developing and implementing a well pad
the use of fresh water and reduces the cost risk evaluation tool to assess potential risk
of off-site waste disposal. The amount of and nearby sensitive groundwater receptors
reuse varies in each of our shale development • carrying out a baseline groundwater
areas, because of the nature of the geology evaluation program with standardized
and the fracturing fluids used. procedures for quality assurance
We work closely with our fluid suppliers to
consistently improve the hydraulic fracturing
process, and we engage regularly with all of
our stakeholders. We publicly disclose the
composition of hydraulic fracturing fluids
on www.fracfocus.org for operations in the
US and www.fracfocus.ca for operations in
Canada. Additional information can be found
on our websites www.talisman-energy.com
and www.talismanusa.com. Providing this
information is part of our commitment
to maintaining open and transparent
communications with our stakeholders
and the communities where we operate.
PILOTING A NEW
PERFORMANCE INDICATOR
We plan to adopt a freshwater intensity
benchmarking measure that will evaluate our
ability to manage freshwater consumption
through our operating practices and use
of alternative water resources.
TALISMAN ENERGY CORPORATE RESPONSIBILITY REPORT 2011 21PEOPLE 22 TALISMAN ENERGY CORPORATE RESPONSIBILITY REPORT 2011
People join Talisman – and stay – because we offer
an exciting, challenging work environment in a fast
paced, global company. Their ongoing personal
and career development is a top priority.
TALISMAN ENERGY CORPORATE RESPONSIBILITY REPORT 2011 23PEOPLE SCORECARD
2011 PERFORMANCE
944
people hired for our
$10.9
million invested in training
92%
of employees had personal
global operations and career development development plans
programs for our employees
2011 PERFORMANCE AND 2012 PLANS
What we said What took What we plan
we’d do in 2011 place in 2011 for 2012
• require all permanent • achieved 92% completion of • require all permanent
employees to complete career development plans by employees to complete
career development plans permanent employees p27 career development plans
• expand 360-degree • completed 360-degree • continue 360-degree
feedback programs to our feedback programs for the feedback for leaders to
next generation of leaders top 200 leaders in our support ongoing development*
organization p27
• invested $10.9 million in • baseline and benchmark
training and career development our current learning and
programs for our employees p27 development investment
of $10.9 million
• hire approximately 50 new
graduates and pilot a targeted
development program in
North America
• conduct a second global
employee survey and create
a plan for improvement based
on the results, building on
the 2010 survey
• target 10% improvement in
employees’ satisfaction score
on career development in
the employee survey
* While 360-degree feedback will continue in 2012,
going forward it will no longer constitute a scorecard item.
24 TALISMAN ENERGY CORPORATE RESPONSIBILITY REPORT 2011OUR EMPLOYEES
OUR VALUES
Safety: our goal is to
create working conditions
where we cause no harm
to people.
Passion: we inspire
others by the passion we
demonstrate for our work.
Results: we have a
bias for results and take
initiative to get things
done efficiently, creating
value for our shareholders.
Respect: we take time to
consider and appreciate
other people’s points
of view and treat the
environment with respect.
Excellence: we strive
OUR APPROACH We experienced a 6.8% voluntary turnover
for excellence in what
rate, which is comparable to our peers. We
Our ability to attract and retain quality we do and how we do it.
conduct exit interviews with people leaving
individuals who contribute positively to our and continue to look for opportunities to Teamwork: by working
business is critical to our future growth and retain employees and improve our work effectively together, we
success. This means providing challenging environment. We offer challenging work, can deliver results far
work and career development opportunities, career development, and engage employees beyond our individual
rewarding competitively and building an for feedback so we can address what capabilities.
engaged, results-focused workforce. matters most to them. Honest communication:
We achieve this in part by aligning the
we show courage to speak
performance plans of individuals with
honestly and support
the performance goals of the business. EMPLOYEE DISTRIBUTION
others to do the same.
BY GEOGRAPHY
ATTRACTING AND Latin America
145
Rest of world
34
RETAINING TALENT
OUR GLOBAL WORKFORCE
In 2011, to support the growth of our Southeast Asia
592
operations, we hired 944 people, or 25%
of the employee base. This brought our global North America
North Sea 2,021
employee population to 3,600 full-time 808
permanent people. Much of our hiring activity
was concentrated in North America, primarily in
our shale operations, and by moving contractors
into employee positions in our International
Operations West. The latter reinforces
Contract and temporary employees not included.
consistency and effectiveness in our global Rest of world includes Algeria, Kurdistan region
operations. We also continue to strengthen of northern Iraq, Luxembourg, Poland, Qatar
our technical talent and safety resources. and Sierra Leone.
TALISMAN ENERGY CORPORATE RESPONSIBILITY REPORT 2011 25RECRUITING THE RIGHT PEOPLE 40% said they heard about the job through
an existing employee.
A diverse workforce helps ensure we are
benefiting from a wide range of backgrounds, One of the ways we recruit new people is to
perspectives and experiences. We recruit hire students from universities and technical
globally to find the right skills to drive our schools worldwide. We provide cooperative
business strategy. Our business spans many education and summer job opportunities,
geographic regions and includes a wide offering students hands-on experiences,
number of disciplines: exploration, drilling, mentoring, and opportunities to apply
engineering, safety, human resources, academic knowledge. In the last three years,
accounting, information technology, legal we have employed more than 140 students
and many more. It is extremely important in regions around the world.
for us to hire experienced people to share
their knowledge and mentor our next
NUMBER OF NEW
generation of leaders.
GRADUATES HIRED
In general, the industry has a relatively high
80
percentage of employees poised to retire over
the next five to 10 years. As a result, there 66
are skill shortages. It is a challenge to recruit 60
employees to meet our growing business needs,
especially those with technical skills already 42
40 37
in high demand. In 2011, we established an
internal sourcing team so we could respond
more quickly to business needs. 20
In hiring for regional operations, whenever
possible, we employ people from that area. This 0
enables us to take advantage of local talent and 2009 2010 2011
benefit the local economy. We also leverage the
networks and connections of our employees to In the last three years, we have employed
more than 140 students in regions around
find other high-quality talent. In a 2011 survey
the world.
of new employees, of the half that responded,
FROM NEW GRAD TO NEW HIRE
In September 2011, Alexandra Turecek began a four-month student position in
Talisman’s Corporate Affairs department. Alexandra’s role focuses on supporting
our corporate social responsibility by facilitating participation in global initiatives
and assisting with projects to meet international best practice standards. The
department has provided a supportive work environment open to providing new
challenges and increasing levels of responsibility. Alexandra also broadened her
experience at Talisman as a co-chair of the student committee, which allowed
her a unique opportunity to contribute to building an active network of budding
professionals within the company.
In recognition of her work, Alexandra was offered a full-time position as an
analyst. “Talisman is a dynamic organization and really sets itself apart in terms
of its student program,” she says. “The opportunities for learning, development
and networking have been incredible, and I am looking forward to continuing
my professional growth as a full-time employee.”
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