Oil Search : 2020 Sustainability Report - Climate Addendum

A B S O LU T E

COMMITMENT

Climate resilience addendum

	OIL SEARCHSUSTAINABILITY REPORT 2020	ABOUT THIS REPORT	LEADERS' MESSAGE	HIGHLIGHTS	ABSOLUTE COMMITMENT	CLIMATE & ENERGY TRANSITION	ENVIRONMENT

Climate Resilience Addendum

CLIMATE CHANGE

RESILIENCE

Addendum to 2020 Sustainability Report

issued 15 April, 2021

Forward Looking Statements

The information contained in this report is based on assumptions and contingencies which are subject to change without notice and involve known and unknown risks, uncertainties and other factors which are beyond the control of Oil Search Limited. Oil Search Limited assumes no obligation to update this information, which is provided as a general guide only and should not be relied upon as an indication or guarantee of future performance.

While every effort is made to provide accurate and complete information, Oil Search Limited does not warrant that the information in this report is free from errors or omissions or is suitable for its intended use. Subject to any terms implied by law which cannot be excluded, Oil Search Limited accepts no responsibility for any loss, damage, cost or expense (whether direct or indirect) incurred by you as a result of any error, omission or misrepresentation in information in this report. All information in this report is subject to change without notice.

This report also contains forward-looking statements including with respect to climate change scenario analysis, carbon pricing, demand for oil and gas and the possible effect and impact of climate change on the value of Oil Search's portfolio and Oil Search's plans, strategies and objectives all of which are subject to particular risks associated with the oil and gas industry. Oil Search Limited believes there are reasonable grounds for the expectations on which the statements are based. However, actual outcomes could differ materially due to a range of factors including oil and gas prices, demand for oil, currency fluctuations, drilling results, field performance, the timing of well work-overs and field development, reserves depletion, progress on gas commercialisation and fiscal and other government issues and approvals. In respect of the forward-looking statements in relation to scenario analysis, while the use of scenarios may assist in the understanding and description of possible future events or circumstances, scenarios may have their own inherent disadvantages, limitations or deficiencies. Oil Search is not able to predict which if any of the scenarios referred to in this report may eventuate and does not regard any scenario as a preferred outcome for Oil Search.

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COMMUNITY	HEALTH AND SAFETY	PEOPLE	INTEGRITY	ECONOMIC SUSTAINABILITY	ASSURANCE STATEMENT	CORPORATE REPORTING	CLIMATE RESILIENCE ADDENDUM

Climate Resilience Addendum Contents

1. Climate Addendum

XX Forward Looking Statements

1. TCFD reporting

XX Climate governance

1. How our corporate strategy considers climate XX Climate risk management

XX Climate targets, metrics, and indicators

1. Resilience Testing Analysis

XX TCFD Reference Guide

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	OIL SEARCHSUSTAINABILITY REPORT 2020	ABOUT THIS REPORT	LEADERS' MESSAGE	HIGHLIGHTS	ABSOLUTE COMMITMENT	CLIMATE & ENERGY TRANSITION	ENVIRONMENT

Climate Resilience Addendum

Continued

Continued Climate Change Resilience

Oil Search supports global efforts, and those of the countries where we operate, for implementation of the Paris Agreement and a global warming trajectory of well below 2°C.

We are actively working on reducing our operated grean house gas (GHG) emissions and have set a target to reduce the GHG intensity of our operated assets by more than 30% by 2030.

Recognising the opportunities presented by the energy transition, Oil Search aims to be a net zero energy company by 2050.

• One of the first ASX listed companies to publish a TCFD climate change report;
• Conducted and published results of climate change scenario analysis, examining the resilience of our assets under 2°C degree and 1.5°C scenarios;
• Implemented an internal carbon price as part of the internal investment review process and this has been applied to growth projects in PNG and Alaska;
• Assessed the physical climate change risks in PNG and Alaska and published the results in our 2019 Social Responsibility Report;

We test our portfolio against a range of reputable and publicly available Paris Aligned scenarios. The analysis indicates long-term resilience and continued economic value generation under a range of Paris Aligned pathways.

Oil Search will focus on low cost, low GHG intensity, and Paris Aligned projects; we will deliver high value energy that meets society's needs and that contributes to sustaining the livelihoods of our communities.

Our Climate performance is directly linked to executive and employee remuneration under our short (STI) and long-term incentive (LTI) plans.

Oil Search will continue to transparently report in alignment with the Taskforce on Climate-related Financial Disclosure (TCFD).

Extension of 2018 Climate Change

Resilience Report

This 2020 Climate Change Addendum is an extension of our 2018 Climate Change Resilience Report and is intended to provide an update on our new climate change commitments; new GHG targets; resilience testing of our assets and growth portfolio; and report in line with TCFD.

We recognise there is an increasing and justified investor focus on climate change and the energy transition. As an upstream energy company, managing the risks and opportunities posed by the energy transition is critical for our long-term success.

Since the Paris Agreement was signed, with the world's governments committing to keeping global temperature increases to well below 2°C, Oil Search has undertaken and delivered the following commitments to climate action:

• Set an ambition to be a Net Zero energy company by 2050;
• Set a target to reduce the GHG intensity of operated assets by more than 30% by 2030 and linked GHG reduction target to executive and employee remuneration;

• Signed a Memorandum of Understanding (MOU) with PNG's Climate Change Development Authority (CCDA) on climate change adaptation in PNG;
• Developed a carbon marginal abatement curve to identify the priority GHG reduction opportunities in our PNG Business Unit;
• Designed the Pikka project with low emissions technology resulting in a low cost and low GHG intensity growth project;
• Planted 4 million trees in PNG as part of the PNG Biomass project, where, if sanctioned, will grow to 20 million trees; and
• Been invited to COP25 in Madrid to present our PNG Biomass project.

Through our actions, Oil Search has demonstrated we are committed to managing our climate change risks, transparently reporting in line with TCFD, and taking meaningful steps to realise the opportunities presented by the energy transition.

Similar to the Paris Agreement's "ratcheting up" mechanism where governments' climate change targets are increased over time; we also aim to "ratchet up" our climate change commitments and targets over time.

Over the next 12 months, we look forward to progressing our Paris Agreement aligned growth projects of Pikka and Papua LNG, exploring the new opportunities presented by the energy transition and, importantly, sharing this journey with all of

our stakeholders.

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COMMUNITY	HEALTH AND SAFETY	PEOPLE	INTEGRITY	ECONOMIC SUSTAINABILITY	ASSURANCE STATEMENT	CORPORATE REPORTING	CLIMATE RESILIENCE ADDENDUM

Climate Resilience Addendum

Continued

Climate change policy

In 2017, Oil Search's Board approved our first Climate Change Policy. We have now strengthened our climate change commitments and have updated our climate change policy to reflect those commitments and our new Net Zero by 2050 goal.

Climate Change Policy

Oil Search, acknowledging the science of climate change, is committed to delivering low cost, high value energy that meets society's needs.

Oil Search supports global efforts, and those of the countries where we operate, for implementation of the Paris Agreement and a global warming trajectory of well below 2°C.

Oil Search aims to be a net zero energy company by 2050. Oil Search also recognises the energy transition will present meaningful risks and opportunities as the global energy economy decarbonizes and will actively work on solutions that will be critical for Oil Search to achieve this shared goal.

Oil Search will:

• Manage climate change risks and opportunities with the objective of creating a sustainable business;
• Set meaningful targets to reduce our operated GHG emissions;
• Seek to ensure our growth portfolio is aligned with the objectives of the Paris Agreement;
• Work with partners, customers, host governments, and other stakeholders towards the shared objectives of the Paris Agreement;
• Promote the use of technology and encourage a culture of innovation and continuous improvement to reduce GHG emissions and identify new business opportunities that support emission reductions across our business;
• Disclose climate change governance, strategy, risk management, and targets in alignment with the Taskforce on Climate-related Financial Disclosure (TCFD) recommendations; and
• Seek to ensure our public policy engagement supports practical climate solutions that are also aligned with the intent of this policy.

All of our people have a responsibility to promote a culture whereby their actions and those of their colleagues are consistent with this Policy.

The Sustainability Committee has oversight of the Climate Change Policy and is responsible for reviewing its effectiveness.

The policy will be reviewed and revised periodically by the Sustainability Committee.

Richard Lee	Keiran Wulff
Chairman	Managing Director
EMS-POL-000011	Approved: 19 February 2021

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