A B S O LU T E

CLARITY

2020 Basis of Preparation

OIL SEARCHBASIS OF PREPARATION 2020

About this Report

2020 SOCIAL

RESPONSIBILITY DATA

This document details the basis on which Oil Search's 2020 sustainability data was generated.

The data covers the performance and activities over which Oil Search Limited had operational control during all, or part of, the year ended 31 December 2020. It relates predominantly to activities in Papua New Guinea (PNG) and Alaska and where noted, also covers our offices in Sydney and Tokyo.

It does not cover the PNG LNG Project as operational control rests with ExxonMobil PNG Limited. Social and environmental performance reporting for the PNG LNG joint venture is available on the project website. It also does not cover Oil Search's non- operated equity in NuiPower Limited, an independent power producer operated by Kumul Energy Limited.

All PGK and AUD payment figures are reported in US dollars (US$) using on-the-day exchange rates were calculated by the relevant system, or the following 2020 average annual exchange rates:

PGK1 = USD 0.28905

AUD1 = USD 0.69054

Payments in currencies other than those listed have been converted into US dollars using the exchange rate on the day.

Unless required to be displayed as a decimal, numbers and percentages have been rounded to the nearest whole number.

When determining the indicators contained in this Report, we aimed to achieve comparability year on year and with our peers and industry benchmarks, and ensure the reported data was reliable and met internal and external stakeholder expectations.

To make sure the data complemented or addressed other reporting needs, we considered other reporting requirements and frameworks. These included: the GRI Standards and Oil and Gas Sector Disclosure; the United Nations Sustainable Development Goals and Global Compact; Sustainability Accounting Standards Board (SASB) standards; Task Force on Climate-Related Disclosures (TCFD) recommendations; and Oil Search's internal and external reporting requirements.

Enquiries and feedback on our reporting and performance are welcome. Please contact Oil Search on sustainability@oilsearch.com

Contents

  1. About this document
  1. Integrity and transparency XX People and organisation XX Responsible operator
    XX Sustainable development XX Appendices

01

OIL SEARCHBASIS OF PREPARATION 2020

Integrity and transparency

Payments to governments

These include all cash paid by all Oil Search entities to government departments or authorities where we operate. They exclude amounts paid to State-owned Enterprises (SOEs), which are reported in the Supplier and contractor paymentssection of

this document.

Papua New Guinea

Payments are indicated as either:

  • Gross Payments made by Oil Search on behalf of joint venture participants.
  • Net Payments made by Oil Search that represent Oil Search's share only, based on equity interests or paying interests across Company activities.
  • Direct Payments made directly to the government, including petroleum and additional profits taxes, dividends, royalties, development levies, tax credits 1, excise/customs duty and other government taxes, fees and charges.
  • Indirect Payments made indirectly to the government, including Salary and Wages Tax, Goods and Services Tax (GST), interest withholding tax, PNG police, stamp duties and Foreign Contractor Withholding Tax.

Payment stream name

Recipient

Scope and methodology

Petroleum tax

PNG Internal Revenue

Net, at rates set out in the applicable legislation and regulations.

Commission

Additional Profits Tax

PNG Internal Revenue

Net, the total income tax paid for the oil and gas entities in PNG.

Commission

Oil Search share dividend

Kumul Petroleum Holdings

Net, at rates per share declared by the Oil Search Board and paid

Limited (KPHL)

during the period.

Oil Search Directors' tax

PNG Internal Revenue

Net, with Salary and Wages Tax calculated and withheld from fees

Commission

paid to Non-Executive Directors.

Royalties 2

Independent State of PNG

Gross, calculated at a rate of 2% of the well head value of oil or gas

exported.

Development levies 2

Independent State of PNG

Gross, calculated at 2% of the wellhead value of the petroleum

produced.

Salary and Wages Tax

PNG Internal Revenue

Gross, calculated on salaries and wages paid to Company employees

Commission

and personal income taxes for employees in PNG.

Other government taxes

PNG Internal Revenue

Gross, including Foreign Contractor Withholding Tax and stamp

Commission

duties.

PNG Customs Service

Gross, including excise/customs duty.

Goods and Services Tax

PNG Internal Revenue

Gross, imposed on the sale of goods and services in PNG or the

Commission

importation of goods into PNG, at a rate of 10% of the value of the

goods and services sold or imported.

Interest withholding tax

PNG Internal Revenue

Gross, most interest derived by residents or from sources within PNG

Commission

is subject to withholding tax at a rate of 15%.

Other

Payments made to the PNG

Gross, includes payments made to the Royal PNG Constabulary

Police

(RPNGC) in line with the Police Act 1998, the Public Services

(Management) Act 2014 and the PNG National Government

Public Service General Orders. Payment is in the form of per diem

allowances, made with the full consent and approval of the RPNGC.

Other government fees and

Gross, including Department of Petroleum licence fees, data request

charges

fees, environmental water and waste permits, in-house customs

agency fees, manufacturer licence, PNG passports and visas, PNG

work permit fees, telecommunication licences and drivers' licences.

  1. The PNG Government's Infrastructure Tax Credit Scheme (ITCS) allows taxpayers to voluntarily pre-pay tax for the development of infrastructure projects selected by the Government. The amount pre-paid is disclosed for reporting purposes.
  2. Royalties and development levies are reported on an accrual basis. For actuals, please refer to the relevant PNG Extractive Industries Transparency Initiative (EITI) Report.

02

Integrity and transparency

Continued

Papua New Guinea continued

Payment stream name

Recipient

Scope and methodology

Tax Pre-payments

Internal Revenue

Net, includes all payments and spend made to suppliers by Oil

Infrastructure Tax Credit

Commission

Search as Operator to deliver projects under the PNG Government's

Scheme projects 3

Infrastructure Tax Credit Scheme (ITCS) and National Infrastructure

Tax Credit Scheme (NITCS). Excludes the amount of tax credits

claimed from the PNG Government for this expenditure at year end.

Australia

Stream and recipient name

Scope and methodology

Australian Taxation Office

Includes:

  • Net income tax.
  • Gross Fringe Benefits Tax, GST and Pay as you go (PAYG) instalments, and interest withholding tax.

Revenue New South Wales

Gross Payroll Tax.

Total paid to other Australian Government entities

Includes net payments to:

  • Australian Securities and Investments Commission.
  • Australia Post.

Excludes COVID-19 related payments such as hotel quarantine.

United States of America (USA)

Oil Search makes payments to the USA and Alaskan Governments, including:

  • State of Alaska
  • State of California
  • State of Colorado
  • City of Nuiqsut
  • North Slope Borough
  • Kuukpik Corporation (Native Village Corporation for Nuiqsut)
  • Municipality of Anchorage
  • Kenai Peninsula Borough
  • Landowners
  • Payroll Tax

Middle East and North Africa

  • Kurdistan Region of Iraq: Oil Search relinquished its interest in the Taza licence in 2016. We are in the process of exiting Kurdistan and are continuing to work with the Kurdistan Regional Government.

Fines

Total fines paid by Oil Search for anti-competitive behaviour, environmental breaches and corruption.

Payments to associations and networks

This includes membership or annual contribution fees paid to associations and networks.

Conduct

Number of Oil Search Code of Conduct breaches

Includes any substantiated Code of Conduct breach involving Oil Search employees. Excludes reported breaches by contractors and third-party service providers.

Whistle-blower calls

Includes number of calls (reports) to the Oil Search Whistle-blower Hotline.

3. Included in the 'total paid to the PNG Government' figure from 2018 onwards. Reported in previous years but not included in the 'total paid to the PNG Government' figure.

03

This is an excerpt of the original content. To continue reading it, access the original document here.

Attachments

  • Original document
  • Permalink

Disclaimer

Oil Search Limited published this content on 14 April 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 April 2021 05:56:04 UTC.