Living The Land: Sustainability Report 2011
Living The Land: Sustainability Report 2011
Living The Land: Sustainability Report 2011
the land
sustainability Report
2011
2
letter from the ceo
letter
from the ceo
Apache Corporation is pleased to present our
second annual Sustainability Report for 2011.
Apache continually strives to achieve responsible and
sustainable operations across its worldwide asset base
spanning five continents. We empower our employees
to seek innovative solutions that create value to our
operations while also incorporating sustainability
initiatives, including reducing greenhouse gas (GHG)
emissions, protecting biodiversity in environmentally
sensitive areas, providing a safe operating environment
and giving back to the communities where we operate.
G. Steven Farris
Chairman and Chief Executive Officer
vision
Apache’s commitments to
the environment, safety and
community are sustained by our mission
to build value for our shareholders.
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2011 sustainability report
Apache explores for and produces crude oil and natural gas through operations
in the United States, Canada, the United Kingdom sector of the North Sea, Advocacy
Egypt, Australia and Argentina. Our commitments to the environment, safety
Over the course of several years, Apache
and community are sustained by the primary motivations of the business: has developed an extensive network of
Building value for our shareholders, developing a talented and motivated team relationships within the industry and is an active
of employees, operating more efficiently and maintaining positive connections member of several state and national industry
with essential stakeholders. advocacy groups, with company representation
on the leadership level. The primary focus of
most industry advocacy groups is to promote
We’ve learned that the right decisions for our business match up well with the right decisions for positive legislative and regulatory decisions.
the environment, the safety of our employees and our stakeholders: This is best accomplished by ensuring decision-
makers at the local, state and federal levels are
We substitute natural gas for diesel We empower workers to step in when informed about what the company does and
how it does it. These organizations work to
fuel to power our operations, reducing a danger appears present, reducing
raise awareness and advocate for sound energy
both costs and emissions. costly accidents and making sure our
policies and pro-business economic solutions.
people get home safely from work.
We seek non-potable sources for the
volumes of water necessary to find We help build sustainable communities
and produce oil and gas, and we through employment, taxes and
recycle a significant amount. royalties and involvement through
monetary and volunteer support.
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environment
environment
Linking environmental responsibility
with sound industry operations
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2011 sustainability report
biodiversity
Protecting and restoring Helping nature heal
Louisiana marshlands marsh land
Apache has owned nearly 270,000 acres of Since the 1930s, nearly 1,000 wells have been
land along the coast of Louisiana since 2002. drilled in the Golden Meadow field in South
The state is losing about 34 square miles of Louisiana’s LaFourche Parish, some standing in
freshwater coastal marsh land each year, and the water only about 40 feet apart. Apache has
land ownership often is in dispute. been operating in Golden Meadow since 2002.
The causes of marsh erosion are complex Here the marsh has suffered from subsidence,
and subject to fierce debate. But for a land saltwater intrusion, erosion mainly from
owner like Apache, the potential financial hurricanes and extensive canal building from
consequences are simple enough: If a marsh the early days of oil exploration.
turns into open water, it becomes public land
What is left of the freshwater marsh is in the
with mineral rights reverting to the state of
form of islands of grass on the borders of the
Louisiana.
wide channels in a field where Apache has
Apache’s business goal—maintaining the been drilling wells and upgrading facilities to
marshes and recovering more of the oil and gas extend the life of an oil field that has had many
resource beneath the acreage—is aligned with operators over the years.
broader environmental goals. The marshes are
A visitor can spot the areas where there’s been
a nursery for many of the most valuable fish
recent drilling—there’s more vegetation around
and shrimp catches in the Gulf of Mexico.
it. Apache uses the “spoil” that is dredged up to
Shrimp spawned in fresh waters grow in allow drilling rigs on barges to move onto a well
the grasses on the edges of marshlands in site to rebuild the banks along the channels.
the transition zone between fresh and salty
Using the spoil, or the soil removed during
water. Vegetation provides nutrition and
an excavation, the goal is to create as much,
protection for shrimp—a major money maker
if not more, marsh than was lost. Grasses are
for fisherman and a key food source for many
planted to hold the soil in place. Old channels
other species, including drum and snapper that
are closed off when they are no longer needed.
also seek protection in the marsh vegetation
Pipelines are routed through open water rather
when young. If open saltwater encroaches
than disturbing marsh.
on the freshwater marsh, the shrimp lose the Scan the QR Code with your
fragile ecosystem so crucial to their survival. smart phone to see an
interview with Tim Allen,
By protecting and restoring the marshes,
general manager of Apache
Apache protects its business assets and the Louisiana Minerals.
surrounding ecosystem, creating a win-win
For user instructions,
situation for the environment and the company.
please see page 31.
8
environment
Lake DeCade: Rebuilding the Apache and the previous owners have backed
projects creating barriers and water control
rigs to reefs
banks, defending against systems to preserve freshwater marshes in the Apache supports the “Rigs to Reefs”
saltwater intrusion face of forces destroying marshes to the south. program, which is the heart of the Texas
The south bank of Lake DeCade is a low dirt Artificial Reef Program. It involves the
Lake DeCade has gotten saltier during some
levee topped by a bristling barrier of oyster recycling of obsolete petroleum platforms
periods because it’s linked by navigation
grass and bullwhips. A handmade billboard on into permanent artificial reefs rather than
channels to the Houma Industrial Canal.
a sheet of plywood proclaims that this is allowing them to be taken ashore as scrap.
When the winds and tides are aligned, this
“The Kajun Bahamas.” Every year on the Fourth Rigs make ideal artificial reefs because they
large canal to the Gulf of Mexico is an avenue
of July this is the home of a unique celebration are environmentally safe, made of highly
for salt water incursions.
with grills, coolers and lawn chairs set up for a durable and stable material and already
Every year Apache rebuilds the bank of support a thriving reef ecosystem.
party in the shallow water.
Lake DeCade by dredging up dirt from the lake.
A closer look shows how the choppy waters This low levee includes water control devices To date, more than 100 offshore
have gouged the bank that divides the lake that keep out salty water but allow shrimp petroleum structures have been donated
from the increasingly salty marshlands to the and fish in this natural nursery to move out by cooperating oil and gas companies.
south. It’s a weak spot in an unbroken line to the lake. Currently, the Artificial Reef Program
of defenses against salt water intrusions, receives 50 percent of an oil company’s
stretching nearly 18 miles from east to west savings from converting the jacket to a reef
across Apache land. wheatstone lng instead of taking the structure to shore
Apache and its partners are developing where it is salvaged. The funds received are
Without reinforcement a strong storm could
the Wheatstone LNG project in used to finance research, administration,
wipe out the bank allowing salt water to pour
Western Australia under the strictest of maintenance, liability and construction of
into the lake, threatening freshwater marshes
environmental conditions. The project, new artificial reefs. The funds also make the
to the north. In 2010, Apache picked up 15
a joint venture between the Australian Texas Artificial Reef Program self-sufficient
percent of the cost of a $3 million project to
subsidiaries of Apache, Chevron, Kuwait with no need for taxpayer dollars.
line an 8,450-foot stretch of the south banks
with rocks. The federal government is covering Foreign Petroleum Exploration Company
the balance of the cost. In a short period, salt and Shell, received approval under national
water can kill the vibrant vegetation found in environmental law in 2011. The project
a freshwater marsh and drive out alligators, partners will adhere to 70 environmental
bass, frogs and many of the types of ducks that conditions, including submitting plans
winter here. on how they will protect matters of
environmental significance and implement
The lake is at the heart of Apache’s largest a biodiversity offset strategy. The strict
Louisiana land holding known as La Terre, conditions will help protect threatened and
French for “the land,” in Terrebonne Parish. migratory species such as dugongs, marine
This property combines marshes that are turtles, sawfish, dolphins, whales and the
breeding grounds for the fish and shrimp in the marine environment.
Gulf of Mexico on top of oil and gas deposits.
An aerial photograph from 1945 shows an Scan with your smart phone to
see the “Rigs to Reefs” video.
hourglass-shaped lake with a nearly solid marsh
around it. A comparable shot of Lake DeCade
now would show a roughly oval shaped lake
with a lace work of ponds nearby.
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2011 sustainability report
greenhouse gases
Improved operations CO2-e Detail 2010 In Canada, Apache is among the leaders in
using carbon-dioxide rich exhaust gas from
bring lower costs, (in metric tonnes) electrical generation plants to extend the life of
reduced emissions 2010 GHG Emissions by Region aging oil fields.
Managing greenhouse gas emissions at Argentina 1,050,000 In 2010, Apache reduced its emissions by
Apache has become an integral part of Australia 850,000 805,000 metric tonnes of C02 equivalent.
improving operations. This figure isn’t the product of some algorithm
Canada 1,600,000
These improvements come from projects large Egypt 3,400,000 or clever rework of numbers, but rather a
and small. Apache has built regional electric straightforward and tangible amount. It comes
North Sea 400,000
grids for its facilities in Egypt and Argentina; from projects large and small within our
Central 500,000
replaced diesel generators with high-efficiency, existing facilities across a variety of regions.
GOM Onshore 400,000 Our feeling is that the numbers, as well as the
natural-gas powered units; installed advanced
GOM Shelf 1,700,000 work they represent, speak for themselves.
metering and monitoring systems; and
extended the life of its fields by injecting Permian 1,000,000 Even in the midst of an impressive growth
carbon dioxide into underground reservoirs TOTAL 10,900,000 spurt we have been able to reduce emissions in
that otherwise would have been emitted by our facilities by 800,000 tonnes.
smokestacks. Some large reductions come Recently, with oil production climbing, Apache’s All of these projects have been paid for
from improving basic operational efficiency. Egypt Region spent millions to convert with benefits such as lower fuel costs,
inefficient diesel-burning generators to more greater energy efficiency and reduced
“We look for opportunities to run our
efficient electric generators burning lower-cost, downtime and maintenance expenses,
business better, and in the process we reduce
cleaner-burning natural gas. with cleaner air as a bonus.
emissions,” said Cal Cooper, Apache’s
manager of Worldwide Greenhouse Gas. The project in Egypt points to the company’s
This single field represents approximately The emissions report is based on a variety of A cleanup operation with a
8 percent of Apache’s worldwide production, indicators of electric generator performance, long-term reward
but only 3 percent of the company’s including fuel use, downtime and power output. Apache’s Midale Field in Canada, which was
greenhouse gas emissions. discovered 57 years ago, has become a test bed
The data is being used to identify opportunities
Since Apache bought the field in 2003, it has to improve performance. For example, the data for ways to extend the life of oil fields while
invested more than $3 billion to drill wells and indicated that a turbine on an offshore platform reducing carbon dioxide emissions.
improve operations. One key project called the had suboptimal efficiency and after further The field in Saskatchewan just north of the
Ring Main improved the efficiency of power investigation, it was discovered that a bit of U.S. border is expected to produce an
generation in the face of increased power cleaning restored its output to optimal levels. additional 60 million barrels of oil, extending
requirements as oil output increased. Most of its productive life, due to injections of carbon
the field’s power now comes from natural gas dioxide (CO2) that otherwise would have gone
that previously had been flared instead of diesel up a smokestack.
delivered by boat from onshore refineries.
The payoff could go far beyond the value of
another couple decades of oil production.
Investing in cleaner growth This is one of the first fields in the world where
Explosive growth in oil output in Egypt has quickly moved it to the top of the list of Apache’s carbon dioxide emissions from a coal-fired
highest producing regions. electric generation facility are being used for
enhanced oil recovery. And when all the oil is
The growth of Apache’s carbon emissions in Egypt tracks the rise in its oil production; the
gone, the CO2 will remain underground.
region represented about one-fourth of the company’s 2010 oil and gas output and also its
CO2 emissions. Apache’s Qarun Petroleum Co. joint venture with the Egyptian government Midale and the nearby Weyburn field operated
has been driving output higher using diesel generator sets to power the pumps that produce by Cenovus are both part of the Plains CO2
the oil. Reduction (PCOR) Partnership, a cross-
border, government/business effort to test
Apache has been moving to limit emissions by replacing many of the widely dispersed
the feasibility of using industrial emissions
diesel generators with a far more efficient electrical generation plants fired by
for enhanced oil recovery and ultimately
natural gas and linked to the wells by 75 miles (120 kilometers) of overhead
sealing them in the ground for the
power lines.
long term.
Scan with your smart
phone to see a video
about Midale operations.
11
2011 sustainability report
resources
and environmentally responsible operations
Conserving nature’s in shale formations in the Horn River Basin,
resources as we Argentina and new areas where we are
provide energy exploring.
From efforts to preserve and restore As a significant producer of natural gas in
marshes in South Louisiana to developing North America, Egypt, Argentina and Australia,
oil fields near a pristine reef of the Western Apache is increasing its use of the fuel to
Australia coast, Apache works to develop reduce its own emissions and operating costs.
oil and gas resources in ways that match We are also encouraging more reliance of gas
its economic goals with what’s best for the in the transportation and electric generation
environment and communities. sectors in North America, and developing LNG
Water—an essential commodity for people, resources that will help rapidly growing Asian
agriculture and many industries—also is economies meet their soaring energy demand
important in drilling and producing oil and gas. with the cleanest-burning fossil fuel.
Across its operations, Apache is using new Apache’s nearly 270,000 acres along the
and proven technologies to reduce our draw Louisiana coast present special challenges—
on freshwater supplies. For example, we have the impact of years of subsidence, salt water
invested in a new water plant to process non- intrusion, erosion, and the lasting impact
potable water sources to limit the freshwater of extensive canal building in earlier years
impact of drilling and completion operations when the importance of the marshes
in the Horn River Basin of northeastern British to the ecosystem was not understood.
Columbia, an abundant shale gas play. Today, Apache’s goal is to create as much,
Also at Horn River, pad-drilling techniques if not more, marsh than was lost through a
enable Apache to tap large areas from a small range of strategies.
location, minimizing the impact on the surface. Apache’s business is developing resources
The wells drilled there are clustered in a that can be used to improve the standard of
relatively small area, allowing Apache to reach living for people and communities all over
out more than mile in each direction without the world. Our obligation is to preserve the
disturbing the land. To protect drinking water natural environment as best we can so that
aquifers close to the surface, Apache’s wells are it will continue to provide benefits to these
lined with corrosion-resistant steel and sealed same communities.
off from the surrounding rocks by cement to
prevent leaks.
Producing oil and gas and Apache and partner Encana have gone to
extraordinary lengths to find a way to avoid
apache global water usage
protecting water resources using water from nearby rivers and lakes.
Securing large volumes of water needed to
develop unconventional formations like the
Horn River Basin in northeast British Columbia
And the investment includes doing what
it takes to ensure drilling and completing
wells won’t contaminate underground fresh-
water resources.
88 percent
comes from non-potable
is a key issue for Apache and other oil and gas water sources
producers, along with the imperative to use Tapping the plentiful supply of non-potable
great care to prevent contamination of drinking
35
water in the Debolt aquifer required drilling
water aquifers penetrated on the way to more than 2,600 feet deep and designing
productive formations. and building a water treatment plant to percent
Applying two well-known and proven remove the hydrogen sulfide (H2S), a is recycled or reused in secondary
poisonous gas commonly found in oil recovery operations
technologies, horizontal drilling and hydraulic
fracturing, has unlocked previously untapped Canadian gas, in the salt water.
natural gas resources in North America. Apache developed the water treatment
Environmentally responsible operations method and designed the plant that was built
and innovative solutions to water issues are by Encana. The $75 million project ensures
essential if natural gas is to fulfill its promise as adequate supplies of water in a region where
a means to reduce carbon emissions from the droughts can lead to restrictions on surface
electric generation and transportation sectors. water use that shut down drilling.
Apache has years of experience dealing Apache is taking lessons learned at the
with water issues in drilling and production Debolt aquifer and applying it to operations
operations and seeking solutions that rely in other areas.
on non-potable water in its operations. This
reduces the impact on regional aquifers, lakes
2011 Environmental
and rivers used for local water supplies. In
mature oil fields, like Apache’s fields in the Performance Award—
Permian Basin of West Texas and New Mexico, Debolt Water
the largest component of what comes out of Treatment Plant
the well is salt water that is separated from
the oil and frequently pumped right back into Apache and Encana were recognized for
the reservoir, enhancing the recovery of oil and developing infrastructure designed to
Scan with your
gas reserves while minimizing the disposal of reduce the environmental impact of natural
smart phone to
production by-products. gas development in British Columbia’s learn more about the
Horn River Basin. 2011 Environmental
Eighty percent of the water used in hydraulic
Performance Award.
fracturing operations required to complete
Apache’s shale gas wells at Horn River will
come from an aquifer sealed deep in the earth
and filled with non-potable water.
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2011 sustainability report
2009
32,116 52,948 85,064 35%
14
environment
health
and safety
At Apache, safety is not negotiable
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2011 sustainability report
“I worked in reservoir, production and drilling engineering in the Southern and Central regions
and I still use those experiences,” Weatherl said. “Knowing what is required to be an Apache
production engineer or drilling engineer has made me a better reservoir engineer.”
Mark McClelland, improved recovery and resource assessment manager and leader of the
development program, said Apache is laying the foundation for the continued success of
the company.
community
Respecting our communities and
building relationships
24
community
indicators
Performing safely,
responsibly and socially
30
indicators
Energy Use (Mwh) 15,800,000 Earnings per Diluted Common Share ($) 8.46
Water Use (ML/YR) 144,743 Net Cash Provided by Operating Activities 6,726
($millions)
Hydrocarbon Spills to Environment (>1 barrel) 436
Exploration & Development Capital ($millions) 4,741
Barrels Spilled 8,248
Proved Reserves (MMboe)
in this book
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2000 Post Oak Boulevard,
Suite 100
Houston, Texas
77056-4400
www.apachecorp.com