Oil Search : 2021 Annual Meeting

ASX Announcement

30 April 2021

ASX: OSH | PNGX: OSH | ADR: OISHY

OIL SEARCH 2021 ANNUAL MEETING CHAIRMAN'S ADDRESS AND

MANAGING DIRECTOR'S PRESENTATION

Chairman's address

Good afternoon, ladies and gentlemen and welcome to the 2021 Annual Meeting of Oil Search Limited. My name is Rick Lee. I am the Chairman of Oil Search and I will be Chairing this meeting. The time is now 1pm and I declare this meeting open.

This meeting is being held at The Fullerton Hotel in Sydney Australia. I would like to begin by acknowledging the Gadigal people of the Eora Nation, Traditional Custodians of the land on which we gather today and pay my respects to their Elders past and present.

Respect for communities & culture hold an important place in Oil Search's DNA and I would like to extend this acknowledgement to Traditional Custodians of the lands in all the regions in which we work and operate. We acknowledge their ongoing connections to land, sea and community and we are fully respectful of their culture.

In accordance with the Constitution I confirm that the necessary quorum is present here today

On stage with me at The Fullerton Hotel Sydney, is Managing Director, Keiran Wulff, Non-Executive Directors, Eileen Doyle, Agu Kantsler and Fiona Harris and the Group Secretary, Mike Drew.

Joining us remotely, in accordance with Government guidelines and restrictions associated with COVID-19 are: Bakheet Al Katheeri, Kostas Constantinou, and Susan Cunningham.

I am also pleased to introduce Michael Utsler who, subject to your vote on resolutions 4 and 5, will be officially appointed today and Musje Werror who is standing for election today having been appointed in February to fill a casual vacancy. They bring fresh insight to the Board that is highly complementary to our business. We look forward to working with them.

I would also like to acknowledge Sir Mel Togolo, who stepped down from the Board late last year to facilitate our succession planning. On behalf of the Board, we greatly appreciate Mel's service to the Company and have valued his insights.

Jacques Strydom, representing our auditors, Deloitte Touche Tohmatsu is in attendance. In accordance with the provisions of the PNG Companies Act, I note that Deloitte is automatically reappointed as the Company's auditor at this meeting.

Oil Search Limited	Australian Office	oilsearch.com	1
Incorporated in Papua New Guinea	1 Bligh Street, Sydney NSW 2000, Australia	P. [phone]
ARBN 055 079 868	GPO Box 2442, Sydney NSW 2001, Australia	F. [phone]

This meeting is convened to consider matters specified in the Notice of Annual Meeting dated 16 March 2021, which was sent to all registered members. I will be conducting today's meeting in accordance with the order of business contained in that Notice.

In line with government restrictions in response to the COVID-19 pandemic, we were unable to hold the meeting in PNG this year. We have encouraged our members to attend online or by telephone and I am delighted that members, proxies and guests have taken the time to join us today through those facilities. We continue to adapt to these trying times and look forward to the time when we can all once again be back in Papua New Guinea.

I would now like to provide an overview of our Company's performance and achievements over the past twelve months.

The events of 2020 have tested the resilience of the Company like never before. In PNG, the increased rates of COVID-19 infection continue to challenge us. However, the difference between 2020 and 2021 is striking. We have entered the year with a renewed purpose and ambition, in a stronger financial position and with the confidence that we are well advanced in adapting the Company to operating successfully in a dramatically changed energy landscape.

As we progressed through 2020, we engaged broadly with our members to understand your concerns about the financial strength of the Company. Your comments were taken on board. We raised capital early issuing shares only to existing shareholders. We deferred discretionary capital investment and restructured the Company. We improved our financial flexibility and renewed our strategy. We were also one of the few ASX 100 companies to impose a 20% fee and salary reduction, over a six-month period, for the Board and executive leadership team.

As a voluntary measure, in the spirit of transparency and good governance, we put forward the remuneration report to members for an advisory vote. We understand from your response that some concerns remain and the Company will take this on board for future consideration.

Oil Search is clear in our purpose to deliver low cost, high value energy that meet society's needs. We have a strong team focussed on achieving our ambition to be the preferred energy company for all stakeholders. Keiran has led the Company admirably through his first year as Managing Director. During this time, he has assembled a dynamic leadership team that is organised around our priorities of disciplined capital management, safe and reliable operations, delivery of our growth projects, and our commitment to sustainability. The Board is grateful to Keiran and the senior leadership team for the commitment they have shown this year and we are confident in their ability to meet our goals to deliver long-term value to our shareholders.

Financial Performance

Despite a challenging operating environment and weaker realised oil and LNG prices, Oil Search produced a core net profit in 2020 of US$22 million. Excellent production performance and significant cost reductions contributed to a positive result.

Because of the uncertainty in markets generally, the Board decided not to pay an interim dividend in the middle of 2020, but with an improving price environment and sustained operating excellence, we declared a final dividend of US0.5¢ per share consistent with our dividend policy of paying out 35 - 50% of Core NPAT. To some, the dividend may seem modest, but it demonstrates the stabilisation of the business and our commitment to capital discipline.

We also continue to enhance our financial flexibility. In February 2021, we hedged nine million barrels of production for this year with a floor of $55 per barrel. We did this through put options

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enabling us to realise the full upside of oil and LNG prices which are now exceeding our budget expectations. Higher realisations have also improved liquidity with $1.57 billion available at the end of March. This will serve the Company well as we shift towards funding our growth projects in 2022 and beyond. In this regard, we are reviewing a range of funding sources and priorities for those projects to provide flexibility and optionality as we navigate the volatility of financial and energy markets.

Committed to Sustainability

Just as we have refocused the business and balance sheet for resilience, we have also refocused the organisation to elevate our commitments to address climate change, while continuing to support the communities where we work.

In February, we stated our ambition to be Net Zero by 2050 on top of our previously announced commitments of a 30% reduction in Operated Green House Gas intensity of our Scope 1 and 2 emissions by 2030. Earlier this month we issued our annual Sustainability Report with an addendum updating shareholders on our climate change resilience, reported in line with the Financial Stability Board's Task Force on Climate-related Financial Disclosures. The report concluded that the Company's portfolio is resilient to a range of decarbonisation scenarios, including the Paris Agreement goals of staying "well below 2°C".

Our focus on climate change, however, is in addition to our ongoing commitment to maintaining a stable operating environment by supporting the communities where we work. In 2020, we made a socio-economic contribution of US$895 million in PNG and Alaska. This amount includes payments to governments through taxes, royalties and levies, employment and development opportunities, procurement of goods and services from local suppliers and contractors and community investment.

Of course, the biggest threat to our communities this year has been from COVID-19. In PNG, this threat is now a public health emergency. In addition to prioritising the protection and support of our own employees and their families, the Oil Search Foundation has distributed some 450,000 items of personal protective equipment and is providing assistance to the PNG and Australian governments as they roll out the vaccine to Papua New Guineans.

Outlook for 2021

Despite the ongoing challenges of COVID-19, the Company has been able to improve safety and operating reliability and progress our growth project in Alaska and PNG. In 2021, we expect more of the same. Our teams continue to drive costs out of our operations and improve performance all round. This attention to operations has also resulted in a materially improved safety performance.

In our growth projects, since FEED entry in February, Alaska is progressing towards a Final Investment Decision on Phase 1 of the Pikka project planned for later this year. In addition to finalising the project development plan, the Company is working to ensure it has funding for project costs once the project is fully sanctioned. This includes the possibility of a selldown of 15% of our interest to 36% and raising long-term financing for the project through various available commercial banking and funding organisations.

Pleasingly Papua LNG is also progressing. This year, the PNG Government announced the signing of the Fiscal Stability Agreement with all joint venture participants. This was a significant milestone that demonstrated the alignment of the joint venture with the government to progress a two-train development. It also helped establish clear milestones for the project to enter FEED in mid-2022 with a target of first gas in 2027.

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Likewise, our plans to develop PNG Biomass as a tangible symbol of our commitment to both sustainability and community are progressing towards an FID decision. However, the timing is being impacted by the many policy, financial and logistical challenges facing the PNG Government at present.

Closing

In closing, I would like to acknowledge our dedicated workforce who brought us through 2020 with determination and resilience. Many of our staff have had to be away from their families for extended periods of time throughout the year. Their commitment comes through in all that the Company has achieved this year despite its many challenges.

Oil Search has developed a simple business model. We are optimising our operated PNG fields around safety and reliability with sustained cost reductions. Those operated fields contribute gas that supports our 29% interest in the world-class PNG LNG project. And we are developing our extensive resource base in Alaska and PNG by investing in low cost, high value energy projects that will increase the Company's free cash flow. We are implementing this business model with capital discipline and in a sustainable way that meets society's needs.

My appreciation goes out to my colleagues on the Oil Search Board for their wisdom, guidance and counsel and to Keiran and the senior leadership team for their commitment and energy. Finally, I would like to extend my sincere gratitude to all our shareholders for the support you have provided us over the years and the trust you have demonstrated throughout 2020 in our stewardship of the business as we drive towards our ambition of having Oil Search the preferred energy company for all stakeholders.

Thank you

I would now like to invite Keiran to address the meeting.

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Managing Director's address

Despite the challenging conditions over the last 12 months, we have made material strides in building resilience, right sizing the organisation and reducing our cost base, enhancing the well- being of our operations and staff, and setting our Company for the future.

However, the recent escalation of COVID-19 rates in PNG and remaining uncertainties in global outlook highlight the importance of managing our Company conservatively whilst positioning the business to deliver on our world class growth assets as soon as conditions allow.

2020 was probably the most challenging in our Company's 92-year history, requiring absolute focus on the welfare of our people and enhancing our resilience. Through the efforts and commitment of our staff, I am very pleased to say that our Company is coming through the challenges well. We are better positioned to manage the uncertainty of the current operating environment whilst setting ourselves to deliver the value through the inevitable commodity cycles from our world class growth assets in PNG and the US.

The challenges facing Our Company in 2020 brought our people across the organisation closer than ever before. This was borne out in an independent employee engagement survey conducted by Korn Ferry at the end of 2020. Through our well communicated strategy and "Keep Connected" initiatives, the Oil Search team performed very well at every level.

2020 saw the delivery of an excellent safety record (our best ever), above budget operating performance, sustainable cost reductions and importantly a lowering of the breakeven costs of our existing and new projects to remain commercially viable in a lower oil price environment.

Last year we undertook a critical US$700 million capital raise and refinanced corporate debt to strengthen our liquidity. This represented the beginning of a disciplined capital management

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