Importance and Mission
PTTEP realizes the importance of compliance with relevant laws and regulations as well as responsibility for community, society, and the environment in all operating areas, to reduce both direct and indirect impacts on the environment (inclusive of spillage, climate change, biodiversity, waste, air pollution, and water resources). PTTEP has garnered stakeholders' trust and has embodied the values of responsible consumption of natural resources, environmental stewardship, conservation, and sustainable management.
1. Achieve Net Zero Greenhouse Gas Emissions by 2050 for E&P business covering scope 1 and scope 2 under PTTEP’s operational control.
2. Achieve zero oil and chemical spill.
3. Achieve zero total waste to landfill by 2030.
4. No operation in areas at risk from water scarcity and ensure that there is no impact on the community and water users.
5. No operation in World Heritage sites as defined by UNESCO and achieving “No-Net Loss” (NNL) of biodiversity in the International Union for Conservation of Nature (IUCN) Category I-IV protected areas by 2044.
6. Net Positive Impact of Ocean Biodiversity and Ecosystem Services (Ocean BES) value in all offshore operations by 2030, compared to the 2019 base year.
7. No Gross Deforestation for E&P Projects from 2021 onwards.
PTTEP commits to operate business conscientiously and responsibly towards society and the environment by adhering to the Safety, Security, Health, and Environmental (SSHE) Policy which includes a commitment to environmental protection. Company personnel, business partners, and contractors working for or on behalf of the Company must abide by the SSHE Policy. In alignment with the policy, the Environmental Management Strategic Roadmap is established to demonstrate PTTEP's commitment to achieve cleaner petroleum exploration and production with environmental stewardship. The roadmap also supports the company sustainability long-term strategy/target and the Company's environmental management requirement to achieve SSHE Target Zero. The roadmap defines the long-term environmental management plan to reduce environmental footprints with focus on carbon and ecological footprint, promote the circular economy concept and create positive environmental value.
Moreover, PTTEP implements SSHE Management System (SSHE MS), which complies with the ISO 14001 international standard. PTTEP requires all operating assets to implement and certify the ISO 14001, which resulted in achievement of the latest ISO 14001:2015 certification for PTTEP's operating assets in Thailand, Myanmar, and Malaysia (Sarawak Project) from SOCOTEC certification (under United Kingdom Accreditation Service - UKAS). PTTEP develops SSHE Management System covered all activities in E&P phases; exploration, production, and decommissioning and major supporting activities; product transportation, waste management, logistics and supply chain management. For effective implementation, the corporate oversight of SSHE management system is in place which includes the requirement of SSHE due diligence process before, during and after a merger and acquisition (M&A) deal takes place, to ensure business partners' compliance with the Company's requirements.
PTTEP assesses each project's environmental risks against regulatory requirements, the Company's standards and/or international standards. Such environmental assessment is a tool to identify and evaluate environmental issues and impacts. It also helps in the setting of impact monitoring and mitigation plans. Throughout the company lifecycle, from exploration, production until decommissioning, PTTEP has followed all requirements specified in the Environmental Impact Assessment (EIA) and the Decommissioning Environmental Assessment (DEA) reports (which includes those relating to social and health issues). PTTEP takes priority of decommissioning activities at the same level of exploration and production activities, therefore SSHE MS has been adopted at same level. In 2021, PTTEP conducted the EIA in a total of 12 projects, comprising 2 exploration and development projects, and 10 production projects. The summary of the Company's EIAs and case studies includes in Related Documents.
Stakeholders also play an important role in driving business towards success and this demands appropriate management of their expectations and agreed objectives. Stakeholder management is conducted through the Company's stakeholder management process or the EIA or DEA process. The EIA and DEA reports contain concerns raised during the stakeholder engagement activities, as well as suggestions to prevent and mitigate possible impacts. Such concerns are analysed, to define appropriate measures. The stakeholder engagement activities will be arranged for all EIA and DEA projects.
Furthermore, PTTEP is committed to comprehensive reporting on environmental performance for all assets and petroleum support bases under our operational control. In 2021, Company achieved the group-wide coverage of environmental reporting at 100% and is in line with the Global Reporting Initiative's Sustainability Reporting Standards (GRI Standards), full reporting guideline on Oil and Gas Sector Disclosures (OGSD) for the "In Accordance - Core" option and the International Petroleum Industry Environmental Conservation Association (IPIECA)'s reporting guideline on international sustainability. The Company has continuously collected and reported the environmental performances via the web-based 'Environmental Performance System (EPS)'. This reporting covers energy consumption, greenhouse gas emissions, air emissions, water withdrawal, water discharge, spills, produced water management, waste management, hydrocarbon production, and environmental expenditure. The up-to-date data can be analyzed, to enhance environmental management efficiency and ensure compliance with relevant laws and the Company's regulations.
For continuous improvement of environmental performance, PTTEP has reviewed and improved data collection and database to ensure its timeliness. The data first collected in 2010 till now is verified by an external party and it has been publicly disclosed in PTTEP's annual Sustainability Report. In addition, PTTEP also benchmarks its performance on climate change and water security against peers in the International Association of Oil and Gas Producer (IOGP), Dow Jones Sustainability Indices (DJSI), CDP (formerly Carbon Disclosure Project), and other organizations.
Climate Strategy and Targets
Climate change may impact the environment and PTTEP's business, in terms of more frequent natural disasters, stringent national and international policies and regulations, and a drive towards low carbon future.
PTTEP has continuously initiated actions to reduce and mitigate risks, including an increase in the investment proportion of natural gas as a cleaner transition energy and studies to find ways to reduce greenhouse gas (GHG) emissions. In addition, to support Thailand’s goals to achieve Carbon Neutrality and Net Zero Greenhouse Gas (GHG) Emissions as committed at the 26th United Nation Climate Change Conference of the Parties (COP26), the Company has set the target to achieve Net Zero GHG Emissions by 2050 for E&P business covering scope 1 and scope 2 under PTTEP’s operational control. PTTEP also set the targets of reduction of greenhouse gas emissions intensity by 30% by 2030 and 50% by 2040 from 2020 base year.
To achieve the target, PTTEP implements the GHG emission reduction projects by means of flare/excess gas recovery and utilization, energy efficiency improvement, production efficiency improvement and methane leak reduction. In addition, recognizing that greenhouse gas emissions will affect business expansion, PTTEP in collaboration with the PTT Group launches an internal carbon pricing scheme for investment decision-making process especially in projects that may emit significant GHG volume. Additionally, to achieve the target PTTEP has focused on research and development about Carbon Capture Utilization & Storage (CCUS) together with GHG emissions reduction from the operations. Examples of the CCU projects during the research and development are the conversion of CO2 to Carbon Nanotube and Cyclic Carbonate, respectively, etc.
PTTEP's operational transparency reflects in the inclusion of climate change strategy and performance in the annual reports and sustainability reports. PTTEP has also disclosed environmental and climate change-related performance to CDP since 2010. PTTEP has been ranked at "Leadership Level" for the 7th consecutive years since 2014, and "Management Level" in 2021, reflecting its environmental stewardship compared to its peers.
As a company's vision to become an "Energy Partner of Choice", PTTEP recognizes the importance of collaboration with other Thai and international organizations to create positive climate action. PTTEP has committed to engage with third parties including Thailand Greenhouse Gas Organization (TGO) on climate policy under UN Global Compact's Guide for Responsible Corporate Engagement in Climate Policy. PTTEP is seeking opportunities to reduce or offset GHG emissions through various channels. For instance, PTTEP buys carbon credit in support of TGO's carbon credit market to offset the emissions for internal activities; launches a reforestation project to capture carbon, participates in TGO's Low Emission Support Scheme (LESS) by initiating energy efficiency projects and applies the 3Rs principle (Reduce, Reuse and Recycle) in waste management.
In 2021, PTTEP successfully reduced GHG emission intensity by 24.1% compared to the base year 2012 and reduced GHG emissions from production processes by 358,187 tonnes of CO2 equivalent. With this success, it helps generate revenue and saving cost of approximately USD 36.69 million from hydrocarbon recovery and energy efficiency improvement.
Reduced GHG emissions from production process (tonnes of CO2 equivalent)
Climate Risk Management
Company has fully integrated the Task Force on Climate-related Financial Disclosures (TCFD) framework into its climate change management as shown in the Mapping Index for TCFD Alignment. Furthermore, PTTEP takes risks that may result from climate change into serious consideration, treating it as the Company's emerging risk. In 2021, PTTEP reassessed risks with context-specific for timely improvement across all-new operation assets, upstream & downstream activities, and clients and for compliance with modified requirements both at national and international levels. Assessed climate change risks consist of physical risks and transition risks. Physical risks are related to direct impacts such as heat waves, heavy precipitates, tropical storms, drought and water-related risks. Transition risks are related to changes of risks of policy, legal, technology; market; and reputations. The assessment covers short-term risks (2020 - 2025), medium-term risks (2025 - 2035) and long-term risks (2035 - 2050).
In the assessment of physical risks, 3 scenarios are applied as guided by the Intergovernmental Panel on Climate Change (IPCC): aggressive mitigation scenario or representative concentration Pathways (RCP 2.6); strong mitigation scenario (RCP 4.5); and Business-as-usual (BaU) scenario (RCP8.5). The assessment results of corporate physical risks in all scenarios and all timeframe are ranked in between low to medium level.
In the assessment of transition risks, 3 scenarios are applied: Stated Policies Scenario (SPS - previously known as “New Policies Scenario (NPS)”, the underlying assumptions and modelling methodology remain unchanged), Sustainable Development Scenario (SDS) and IPCC's 1.5°C scenario. The first two scenarios are in line with International Energy Agency (IEA)'s impact assessment guidance and the last with IPCC's guidance. The assessment results of corporate transition risks in all scenarios and all timeframe are ranked in between low to medium level.
Based on the assessment results in 2021, the risks of the Company maintain at the same level. As such, the Company is confident that its climate risk management is appropriate and aligned with the global target to hold temperature increase to well below 2 degrees Celsius. The Company closely monitors and tracks climate change that may affect corporate risk level, as a result of the COP26 and Thailand's commitment on Net Zero target, in order to manage risks by the balancing the risk appetite level and corporate sustainable development. In addition, PTTEP has developed a Climate Management Plan in response to the Company's physical and transition risks. The plan is an integration of mitigation, adaptation, and resilience actions to allow its understanding on vulnerabilities to climate, manage the risks posed by climate change, place us in a strong position to increase resilience to potential threats, and exploit new business opportunities.
Strategy and Targets for Biodiversity and Ecosystem Services
PTTEP has committed to operating with minimal environmental impacts and integrated the impacts on biodiversity and ecosystem services into the business decision-making process, by means of the promotion of the net positive impact on biodiversity and ecosystem services at all operational areas. To achieve the objective, PTTEP has set the targets as outlined below:
- Avoid operating in World Heritage sites as defined by UNESCO and achieve No-Net Loss of biodiversity in protected areas as defined by the International Union for Conservation of Nature (IUCN) Category I-IV protected areas by 2044
- Achieve Net Positive Impact of Ocean Biodiversity and Ecosystem Services (Ocean BES) value in domestic offshore operations by 2025 and all offshore operations by 2030, compared to the 2019 base year.
- No Gross Deforestation* for E&P from 2021 onwards.
*The Food and Agriculture Organization (FAO) defines a forest as natural forests and forest plantations that have tree canopy covers more than 10 percent and areas of more than 0.5 hectare. The trees should be a minimum height of 5 meters. Forests are determined both by the presence of trees and the absence of other predominant land uses.
The Company requires third parties such as tier 1 suppliers, non-tier 1 suppliers, and partners committed to all Biodiversity and Ecosystem Services targets for all operations within PTTEP boundaries.
To ensure effective achievement on the targets, PTTEP developed the Biodiversity and Ecosystem Services (BES) Management Guideline in line with IPIECA's "A Guide to Developing Biodiversity Action Plans for the Oil and Gas Sector" and International Finance Corporation (IFC)'s Performance Standard 6: Biodiversity Conservation and Sustainable Management of Living Natural Resources. The management guideline has been implemented at all PTTEP operational sites since 2014, according to the following mitigation hierarchy:
- Conduct biodiversity and ecosystem system service risk assessment in different project phases.
- Develop Biodiversity Action Plan where there are high risks.
- Implement Biodiversity Action Plan.
- Monitor environmental impacts concerning biodiversity and ecosystem services.
- Consider biodiversity offsets, where there is a residual impact, to compensate potential loss of biodiversity values in order to achieve no-net loss.
In 2020, the Company evaluated the net impact in monetary term in the assessment of environmental and social impacts from the Company's operations in Thailand and Myanmar. As of 2021, PTTEP achieved 29.5% progress toward the Net Positive Impact of Ocean Biodiversity and Ecosystem Services (Ocean BES) value target in the domestic offshore operations in 2025. This indicator measures from BES value created each year against the 2019 baseline. BES value is derived from the impact area and BES Value Proxy, according to the Convention on Biological Diversity (CBD) method under the Intergovernmental Panel on Biodiversity and Ecosystem Services (IPBES) approach.
Since the announcement of the commitment to No Gross Deforestation in 2021, the Company has had no activity in the operation area located in forestry and ensured its 100% implementation and compliance with the group-wide commitment, forest regulations, and mandatory standards. The evaluation of the compliance level has been introduced via internal and external monitoring and compliance audits. Furthermore, PTTEP is preparing to update the Vendor Sustainable Code of Conduct to ensure the effective protection and preservation of the biodiversity and ecosystem services and compliance with all commitments. The Code of Conduct will be integrated as part of the pre-qualification system for vendor acknowledgment. To monitor the compliance of vendors and suppliers, they will be tracked via the acknowledgment on the electronic system. This will enhance vendors' and suppliers' awareness, management, and mitigation of biodiversity and ecosystem services risks.
Furthermore, PTTEP collaborates with external organizations on Biodiversity and Ecosystem Services such as;
- IPIECA-IOGP Biodiversity and Ecosystem Services Working Group (BESWG) and UN Environment Programme World Conservation Monitoring Centre (UNEP-WCMC) to organize the workshop on ecosystem services in E&P industry,
- Department of Marine and Coastal Resources, under the Memorandum of Understanding (MoU) of Ocean for Life for 10-year cooperation (2020-2030) to promote and restore marine resources and biodiversity for ocean sustainability, enhance the quality of life and generate income for local communities in 17 provinces around the Gulf of Thailand where PTTEP has its operations.
- Petroleum Institute of Thailand in corporation with other E&P operators in the gulf of Thailand, Department of Mineral Fuels, consent authorities for rig-to-reef project, and academic experts to study and develop a guideline on the rig-to-reef project in the gulf of Thailand.
- Kasetsart University, under the Memorandum of Understanding (MoU) to promote ocean sustainability through various initiatives to tackle national and global issues with focus on ocean health and biodiversity monitoring.
Biodiversity and Ecosystem Services Risk Assessment
PTTEP manages biodiversity and ecosystem service risks by integrating them into the Environmental Impact Assessment of all E&P projects as well as impose Biodiversity Action Plan at projects with a high level of biodiversity risks. The action plan is designed to prevent the loss of endangered species as well as protecting and restoring ecosystem services that might be impacted by the company's operations.
The biodiversity and ecosystem service risk management assessment, conducted in 2017 and reviewed in 2021, showed that no project possessed high biodiversity risks. Moreover, PTTEP has completed the voluntary Biodiversity Action Plan (BAP) for all operational assets that possess medium-level risks. The Company also organized workshops to enhance knowledge and understanding on biodiversity for personnel working in areas of moderate risk level.
Strategy and Targets for Spill Management
Zero spill is one of SSHE Target Zero which is part of the Company annual SSHE KPIs. To achieve the target, PTTEP focuses on efficient incident management, by forecasting spill scenarios and preparing responses. PTTEP follows the principles of Spill Management Plan in responding to spills. The system helps establish the organizational structure and the response process, including documentation, equipment, and resources.
PTTEP's spill management plan is regularly updated and follows the Tier 3 Spill response system defined by the International Petroleum Industry Environmental Conservation Association (IPIECA) and International Association of Oil and Gas Producers (IOGP). The response system is as follows:
- Tier 1: Spills that require Asset capability and resources.
- Tier 2: Spills that require local and national resources, such as Subdistrict Administration Organization, Department of Disaster Prevention and Mitigation, Marine Department, and Royal Thai Navy.
- Tier 3: Spills that require global and international response resources, such as Oil Spill Response Limited (OSRL), in collaboration with Tier 2 resources.
Spill Risk Management
PTTEP manages the spill risk in compliance with laws/regulations and company risk management process for all E&P activities in order to ensure the potential risk from spill has been assessed and mitigated to "As Low As Reasonably Practicable or ALARP" level. For an effective spill management, those risks are audited and reviewed regularly.
Furthermore, the Company prepared the spill management plan and constantly conducted emergency drills at a corporate- and project-level. This is to assess its preparedness and capability, as well as continuously improved the management plan. The Company has entered into agreements with response organizations in national and international levels, for prompt and appropriate management. The organizations include the Oil Industry Environmental Safety Group Association (IESG), the Petroleum Industry of Malaysia Mutual Aid Group (PIMMAG), and the Oil Spill Response Limited (OSRL). PTTEP, as a corporate member of IESG, provides supports to reinforce Thailand's spill management system. Such supports include participation in equipment test and annual drill as well as serving as a member in various committees.
PTTEP conducts the spill capability assessment for both existing and new projects, to prepare response approaches. PTTEP also focuses on spill management trainings for all related parties.
In 2021, the Company oil and chemical spill rate was at the rate of 0.02 tonnes per million tonnes of petroleum production, a significant decrease from the previous years. This is a result of the cause analysis and implementation of site-specific incident prevention campaigns for Spill and Loss of Primary Containment (LOPC). PTTEP performance on spill rate has continuously been kept lower than peers or IOGP average at all times.
Oil and chemical spill rate (tonnes per million tonnes of petroleum production)
Strategy and Targets for Waste Management
PTTEP handles waste from its operations in compliance with the regulations and laws stipulated by the countries where PTTEP operates as well as the waste management hierarchy. The first priority is to avoid generating waste at source, by removing and reducing waste volume. Then, the emphasis is on the strategy to reuse, recycle and recover waste in accordance with the circular economy concept. Waste treatment and disposal are the last in the hierarchy to consider. PTTEP targets zero hazardous waste to landfill in 2020 (where applicable and excluding waste with landfill disposal as the most environmentally friendly option), zero industrial waste to landfill in 2025, and zero total waste to landfill in 2030. The Company achieves the target of zero hazardous waste to landfill for Thailand operations in 2020 and maintains it to the present.
Further to its waste management with hierarchy above, PTTEP has sought and identified the best alternatives for waste management in E&P activities, in line with targets and to support the company’s waste management beyond local regulation requirements. The company has continuously improved the waste management alternatives for elevated standards, as well as studying and researching methods for waste upcycling and create added value to both the community and governmental sectors. PTTEP has conducted the study on the use of drilled cuttings, as our significant waste generated from our drilling activities, as alternative material for road construction and pavement. Additionally, the Company studied the produced sand waste conversion to zeolite, and conducted topside reuse at Arthit field. These are considered maximizing resource utilization under circular economy principal.
PTTEP also regularly conducts audit and review of the waste management systems at operating sites and those of waste treatment and disposal contractors, to ensure compliance to legal and the Company's requirements. This helps contractors improve their waste management areas and processes in a correct and proper manner.
PTTEP promotes the optimization of natural resources and energy consumption, while remaining environmentally friendly, at Headquarters in Bangkok and provincial offices. the Company adopts the Green Office concept from Department of Environmental Quality Promotion (DEQP)'s to promote the reduction in energy and natural resource consumption, waste, and greenhouse gas emissions. This well supports the growing environmental conservation awareness to the Company's personnel.
Strategy and Targets for Water Resource Management
In management of water resource, PTTEP commits to avoid operating in areas at risk from water scarcity and ensure that there is no impact on the community and water users. The Company also targets to zero produced water discharge to the environment. PTTEP commits to emphasize on reusing produced water as non-fresh water to improve oil recovery capacity and reduce consumption of limited freshwater, preserving the freshwater resource for community's consumption.
PTTEP has developed the action plan to control water consumption, by engaging with local stakeholders for their opinions and clearly communicating the Company's water management measures to relevant suppliers and contractors.
The Company demonstrates its commitment to transparency and trustworthiness by disclosing water performance in annual reports and sustainability reports. Water performance has also been reported to CDP since 2017 and PTTEP has been ranked at "Leadership Level" in 2017 and has ranked at "Management Level" since 2018 as a reflection of the Company's environment stewardship compared to its peers.
Water Risk Management
Water is crucial resource to petroleum exploration and production activities. PTTEP thus conducts an assessment on risks related to water resources management in all operating areas, to prevent the issues on water quality and water scarcity in neighboring communities. The Company also improves the water efficiency and water conservation and emphasize on the importance of leakage detection programs, maintenance, and the reduction of water losses from unnecessary activities.
In 2013, PTTEP developed the water risk assessment tool, to evaluate water risk management at all operating sites. The assessment was aimed at extending the risks to cover those related to water scarcity, increase in water fees, laws and regulations related to water consumption, as well as possible conflicts with stakeholders. The assessment utilizes actual data gathered onsite and forecasts from internationally-recognized tools such as IPIECA Global Water Tool for Oil and Gas, WRI Aqueduct, and WWF Water Risk Filter. Notably, the assessment focused on present and future risks (for 2020 and 2030, respectively) and the results were used to define risk management target and approaches.
In 2018, PTTEP reviewed and updated the water management guideline which identified recommendations on water-related risk assessment, performance reporting, targeting, and wastewater management best practices.
In 2021, the Company reassessed the water risk assessment and updated the analysis on possible impacts from water scarcity, increase in water fees, legal and regulatory amendments, water demands, and conflicts with stakeholders. The results showed that the Company is not currently at risk or facing significant impacts in any scenario at all assessed operations. However, the assessment on water stress area by WRI Aqueduct water risk atlas indicates the 3 operation assets located in area with water stress; S1 & L22/43, Suphanburi and Sinphuhorm assets. The Company has initiated the water resources conservation and water bank projects with local communities in water stress area, and maintains the operations continually.
Produced Water Management
PTTEP's projects located in Thailand have achieved zero produced water discharge since 2010, through injection of produced water back into depleted petroleum reservoirs. Though produced water volume tends to increase in line with production activities and reservoir age, PTTEP has effectively maintained the water injection capacity. Sinphuhorm project was the exception as it resorts to another technique, as described in its EIA, which also results in zero discharge. In 2021, the Company successfully achieved zero produced water discharge for the operations in Thailand, where 99.95% of the produced water was reinjected back to reservoirs and 0.05% was evaporated (Sinphuhorm Project). For overseas operations, PTTEP manages the produced water in compliance with the regulations/ requirements of such countries.
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