presentación esg 2015 julio · shale • with talisman acquisition we have increased exposure to...
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Disclaimer
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the prior written permission of Repsol, S.A.
This document does not constitute an offer or invitation to purchase or subscribe shares, in accordance with the provisions of the
Spanish Securities Market Law (Law 24/1988, of July 28, as amended and restated) and its implementing regulations. In addition,
this document does not constitute an offer of purchase, sale or exchange, nor a request for an offer of purchase, sale or exchange
of securities in any other jurisdiction.
This document contains statements that Repsol believes constitute forward-looking statements which may include statements
regarding the intent, belief, or current expectations of Repsol and its management, including statements with respect to trends
affecting Repsol’s financial condition, financial ratios, results of operations, business, strategy, geographic concentration, production
volume and reserves, capital expenditures, costs savings, investments and dividend payout policies. These forward-looking
statements may also include assumptions regarding future economic and other conditions, such as future crude oil and other prices,
refining and marketing margins and exchange rates and are generally identified by the words “expects”, “anticipates”, “forecasts”,
“believes”, estimates”, “notices” and similar expressions. These statements are not guarantees of future performance, prices,
margins, exchange rates or other events and are subject to material risks, uncertainties, changes and other factors which may be
beyond Repsol’s control or may be difficult to predict. Within those risks are those factors and circumstances described in the filings
made by Repsol and its affiliates with the Comisión Nacional del Mercado de Valores in Spain, the Comisión Nacional de Valores in
Argentina, the Securities and Exchange Commission in the United States and with any other supervisory authority of those markets
where the securities issued by Repsol and/or its affiliates are listed.
Repsol does not undertake to publicly update or revise these forward-looking statements even if experience or future changes make
it clear that the projected performance, conditions or events expressed or implied therein will not be realized.
The information contained in the document has not been verified or revised by the Auditors of Repsol.
Repsol S.A.EM Division of Economy, Finance and Development. 03/09/2015
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1. Company Overview
• Talisman Acquisition
• Vision, Values and Strategies
• Repsol Today
2. Main challenges in Repsol
3. Our commitments with sustainability
4. Sustainability plans
5. Corporate Governance
6. Annexes
Repsol S.A.EM Division of Economy, Finance and Development. 03/09/2015
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1. Company Overview:Talisman Acquisition
Financial strength
High growth in Upstream
Competitive shareholder
compensation
Maximize Downstream profitability
A transformative transaction, ensuring high growth in Upstream
Strategic Rationale
Growth
Diversification
Value Creation
Talisman Acquisition
Growing from our strengths
(2012-2016)
Talisman Acquisition
Increase in operated assets and OECD production
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1. Company Overview:Talisman Acquisition
Strategic Rationale Talisman
Acquisition
Repsol: Data at the close of2014. Talisman Energy: Annual Report of December 2014 adjusted for the gas conversion factor of 5,615 cubic feet of gas per equivalent barrel
21% 44% 11%
+ 23 p.p.
+ 25 p.p.
Operated Production OECD Production
Repsol Repsol + Talisman Repsol Repsol + Talisman
36%
Upstream
Repsol Repsol + Talisman
~24,500 employees
~27,600 employees
Upstream
Nr. Employees
Increasing Human Capital…
...With complementary skills
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1. Company Overview:Talisman Acquisition
The New Repsol Talisman
Acquisition
World class explorer
Deepwater exploration experience
Strong Focus on LatAm
Growth in Exploration and Development
Technological, geological and geophysical capabilities
Experienced operator
Unconventionals experience
Focus on North America and South East Asia
Assets and contingent resources availability
Operational capabilities
A proposal for strong value creation
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1. Company Overview: Vision, Values & Strategy
Strategic Guidelines Vision,Values &
Strategy
PERFORMING BUSSINESS
FINANTIAL DISCIPLINE
PORTFOLIO MANAGEMENT
o Reinforcing Upstream business Enhanced Capabilities
Profitability
Risk Management
Sustainability SHAREHOLDER RETURN
o Resilience to stress scenarios
o Disciplined Capex allocation
o Optimization & Efficiency
o Maximizing integration
o Attractive value proposal
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1. Company Overview: Repsol Today
~ 656,000 boe/day production
~ 2.2 Billion boe proven reserves
Present in more than 40 countries
1 million boe/d refining capacity
30% of Gas Natural
Fenosa
4,700 service stations
~ 27,000 employees
Repsol´s presence
Upstream
Core Businesses
Downstream
Non Operated Shareholding
Gas Natural Fenosa
Peru
Ecuador
Bolivia
Venezuela Colombia
Aruba
Guyana
Brazil
Gabon
Namibia
Angola
USA
Canada
Ireland
UK
Norway Russia
Portugal Spain
Morocco Algeria Libya
Iraq
Australia
Indonesia
Malaysia
Papua New Guinea
Vietnam
Italy Romania
Bulgaria
Trinidad & Tobago
Netherlands
Note: Additionally our Marketing and Chemical activity extends to Asia
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Indigenous communities in Bolivia, Perú, Ecuador, Alaska and Colombia Defined policies and procedures
Internal Guidance for due diligence processes and grievance mechanisms
Non-contacted indigenous tribes procedures
First O&G company operating in Latin America with an official policy explicitly supporting indigenous rights defined by ILO Covenant 169, including right to free, prior and informed consultation (FPIC)
Team of 40 +people dedicated to dialogue and relations with indigenous communities, 35% women, in Peru, Bolivia, Ecuador, USA and Colombia
UNPD entered into in Colombia: master agreement already signed in order to develop strategies and understand problems that exist in the most vulnerable communities with presence in areas where Repsol operates
Signed agreements in most areas, ongoing dialogue and consultation with all communities, currently no major disagreements
Controversies on indigenous tribes living in isolation: working with special preventive measures in Block 88 Peru
Peru grievance mechanism pilot finished to update company guidelines.
Talisman has a global community relations policy with similar principles as Repsol’s
2. Main challenges in Repsol
Ecuador, Peru, Bolivia, Alaska &
Colombia
Reshaping portfolio
• Balance of exposure to OECD countries : US, Canada, Norway, Europe.
• With Talisman acquisition the percentage of OECD based production has increased from 11% to 36%
Custom made approach
• Russia: Low profile, local alliances
• Latin America: work closely with local governments
• North Africa: limited activity to maintain current position
• Namibia, Angola: offshore
• South East Asia: take advantage of optimum relationship of Talisman with South East NOC’s
2. Main challenges in Repsol
Offshore deepwater safety
• Members of: Oil Spill Response (OSR), Joint Industry Project (JIP) of IPIECA 1 and OGP 2, and Global Well Containment Response Strategy
• Emergency response in place
• Strict asset integrity procedures
• Non-operated assets run by experienced operators: Petrobras, Chevron, BHP, Statoil, Eni
Deepwater Offshore
Brazil, GoM, Africa, Canada and others
12 (1) IPIECA:International Petroleum Industry Environmental and Conservation Association (2) OGP: International association of Oil & Gas producers
Political Risk
Arctic operations
Arctic
• Norway/Barents Sea: Not qualified as arctic operations. North-sea-type operations
• Alaska North Slope: onshore activity
• Russia: onshore activity
• Alaska Chukchi Sea: We will not carry forward any operation
• Beaufort Sea: no operations in the medium term
• Talisman has no arctic exposure
2. Main challenges in Repsol
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Non conventional shale
• With Talisman acquisition we have increased exposure to US shale Gas
• Talisman has developed a set of shale operating principles which supports Talisman’s HSE Policy and guide shale operations, including shale water management, globally
3. Our commitments with sustainability
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Commitment to safety
Excellence in environmental management
Promoting a low carbon strategy
Ethical conduct
Anti-corruption
Transparency
Respect for human rights
Zero Accidents Embedded safety culture Strict asset integrity procedures
Excellence in spill prevention and response
Optimized water&waste management
Biodiversity action plans
Achievement reduction of 3.0 million tons CO2 by 2013
Additional reduction of 1.9 million emissions by 2020
Promoting non- fossil fuel energy initiatives
Ethics and Conduct Regulation Anticorruption policy crime prevention model
Support of EITI since 2003. Adherence to Code of Best
Tax practices and to the register of EU lobbies
Remuneration disclosure
Policy on respect for human rights based on the UN Guiding Principles on Business and Human Rights
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3. Our commitments with sustainability Commitment to safety
Our objective: zero accidents
Sistematic Risk Management
Zero fatalities since 2013
Proper management of our facilities risks from design to abandonment
Operations control through work permits and identification of critical elements of our facilities
Special focus on deep water drilling: facilities integrity and design and proper response procedures
Focus on our main accidentability sources
Incident and near-misses management: lessons learnt and procedure adjustments
Safety and Enviromental Audits: 668 audits performed in 2014
Certifications: 55 out of 68 facilities certified through OHSAS 18001 in 2014
Target: “Changing the culture of Safety and Environment through the people leading the organization, whose behavior should serve as an example for all the
employees”
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Our objective : Embedded safety culture
3. Our commitments with sustainability Commitment to safety
Progress
•HSE leadership Plan defined and 2,000 employees trained
•Training in safety culture: more than 3,000 people have attended any of the 120 editions held in 11 countries. In 2014, the number of hours given on these topics came to 234,510, a 12% more than in 2013.
•Culture Project: Definition of Repsol´s HSE Culture attributes and of maturity levels to be achieved
•Training programs in safety and the environment for contractors have been intensified, with a total of around 400,000 hours taught, which represents an increase of nearly 80% compared to 2013.
Next Steps
• Action Plan 2015-2020 to diagnose culture levels throughout the operational sites
• Defining action plans based on the diagnosis results tailored to each operational site
A note on asset integrity
Strict facilities and well planning construction process
Careful hazard identification and prevention process
Highest technical standards
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3. Our commitments with sustainability Excellence in environmental management
Our objective : zero spills
Various measures have been implemented to prevent accidental spills, both in the upstream and downstream divisions:
o Reviewed procedures
o Improved management systems
o Reviewed of control mechanisms
o Best available technologies
Repsol as developed and patented an early detection system for oil spills, using proprietary technology that uses advanced detection software and complex algorithms to interpret spill signals
2013 Milestones:
• To bring internal standards into line with international best practices
• To create a group of experts in emergency management and establish the functions and roles played by the new multidisciplinary emergency response team
• To establish emergency response rooms and centers in Madrid, Houston, Lima and Río de Janeiro
During 2014 the scheduled training sessions and drill exercises have been carried out
Excellence in spill prevention and
response
Emergency response:
global critical management
program
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3. Our commitments with sustainability Excellence in environmental management
Emergency response:
global critical management
program
2015 Achievements o Finalized and Distributed the Incident Management Handbook o Signed Contract with Oil Spill Response Limited (OSRL) for Global Dispersants
Stockpile o Repsol-Talisman Global Emergency Response Coordination agreed o Finalize Capability Review 1 and Gap Analysis 2 in Ecuador, Russia and Spain o Finalized JIP 3 Phase I, produced 24 Oil & Gas Best Practice Guidance
Scheduled Activities
o Develop Capability Review and Gap Analysis to Repsol BUs and Projects o Develop GCEM 4 Training IMT5/BST6/CMT7 to Repsol BUs and Projects o Develop GCEM Drills and Exercises for MAH8
o Continue participation in JIP and OSRL meeting o Develop Criteria to include Environmental Maps into the Oil Pill Plans
1.- Capability Review is the process to assess the capacity of response to an Emergency through established international tool created to measure the preparedness and response capacity and is comprised of three levels of preparedness (Basic level “A”, Intermediate Level “B” and Advance Level “C”) in relation to commonly agreed pre-established criteria considering International Best Management Practices. 2.- Gap Analysis is the process of analyze and compare the actual emergency response performance with a desired performance taking in account Repsol’s standards and international best practices. 3.- JIP means Oil Spill Response Joint Industry Project. In response to the Macondo incident the Oil and Gas Producers (OGP) formed the Global Industry Response Group (GIRG). This group was comprised of appropriate nominees from OGP, IPIECA, OSRL and from other organizations for 5-years duration Joint Industry Project to develop, share and promoting sound practices and solutions, contributing to sustainable development by providing safe and reliable energy in an environmentally and socially responsible manner. 4.- GCEM: Global critical emergency management program. 5.- IMT: Incident management team. 6.- BST: Business support team. 7.- CMT: Crisis management team. 8.- MAH: Major accident hazard.
Progress
• Implementing water management actions in the Spain and Peru refineries, chemical plants and E&P assets following the 2015-2020 Water Action Plan
• Priority facilities have been included as part of the 2015 company objectives
Next Steps
• Continue progressing on the three working lines of the 2015-2020 Water action plan: • The improvement of knowledge of the surroundings and uses of water
• The adequate management of resources and efficient use of water, reducing competition for this strategic resource
• The improvement of treatment technologies and adjustment of discharge parameters to the most strictest environmental standards
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3. Our commitments with sustainability Excellence in environmental management
Our objective: Application of best practices for water management
NEW APPROACH:
Water as a strategic resource
Strengthening local management with a global and homogeneous vision
Application of standards and best practices
Initial objective of 14,5 kilotons waste reduction comfortably outstripped by the company in 2014: a waste reduction of 29 kilotons has been
already achieved
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3. Our commitments with sustainability Excellence in environmental management
Our new objective: reduce waste by 50 kt by 2020
Progress
• Waste reduction of 29 Kilotons achieved in 2014, involving all business areas
• Reduction comes mainly from refining, due to the implementation of a new method for cleaning the bottom of tanks (crude oil washing method)
• Company waste map redesigned
Next Steps
• Compliance and revision of the potential reduction of some of the actions identified for the periods 2015-2020
• Implementation of good practices which derive from the action plan in other parts of the Company
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3. Our commitments with sustainability Excellence in environmental management
Threats to biodiversity in all of our assets and upstream projects have been evaluated:
Our objective : biodiversity action plans implemented on all sensitive areas
Progress
• Definition of risk indicators for biodiversity
• BAP1 started in Bolivia, Peru, Ecuador, Trinidad Tobago, with 96% of implementation
• 100% of E&P sites have been evaluated and 52% qualified with some type of biodiversity risk.
• Pilot ecosystem services in the area of influence of Sagari (Block 57, Peru):
• The study has provided a number of recommendations that aim at strengthening Repsol’s environmental systems to incorporate ecosystem services reviews
• A strategy for the management of biodiversity and ecosystem services has been defined, with the establishment of specific reports and KPIs
Next Steps
•Inclusion of ecosystem services criteria into the operational management system. It comprises the revision of Repsol rules for the management of biodiversity and ecosystems services and its implementation in the company
1.- BAP: Biodiversity actions plans
3. Our commitments with sustainability Promoting a low carbon strategy
Proactive development of new technologies
Transport electrification
• Detection of oil spills without human intervention
• System already working in offshore Spain rigs
Repsol early detection of spills
Biofuels
Downstream initiatives
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• Use of auto gas (automotive LPG) in direct injection liquid phase engines.The reduction in CO2 emissions against gasoline has come to 14.9%
• Optimize heating oil to obtain a product better-suited to the most advanced boiler technologies reducing emissions by 30%
• Asphalt recycling and low temperature installation technology diminishes waste and emissions
• IBIL (50% owned by Repsol Nuevas Energías) first recharging operator for electric vehicles registered with the National Energy Commission
• More than 450 operational public and private charging points in 2014
• ~ USD 2 Million invested in 2014 to promote the electric mobility through IBIL.
• Repsol helps to reduce CO2 emissions through the use of biofuels, including bioethanol in gasolines and biodiesel and vegetable oil in gasoils
• Two lines of action:
o The development of advanced biofuel projects (using non-food raw materials, biomass)
o The production of Hydrotreated Vegetable Oil (obtained from oleaginous seeds ) and hydrobiodiesel in our refineries
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3. Our commitments with sustainability Promoting a low carbon strategy
Our objective : to reduce 1,9 million tons of CO2 by 2020
Progress
• 130 investments and operating improvement measures
• Repsol continues implementing a global energy management system (EnMS) for the whole company under ISO 50001 standard. Thereby seven facilities have been verified so far
• The company continues on the track to verify the entire GHG inventory following ISO 14064 standard (98% of total direct emissions of the company verified so far)
Next Steps
• Repsol is developing a plan in order to identify and mitigate methane emissions in its operating assets
• Focused on the identification and development of energy efficiency initiatives and low emissions technologies
Achievement of our 2006-2013 target to reduce CO2 emissions by 2.5 million tons. The company comfortably outstripped the objective met in 2012, attaining a final
reduction of 3 million tons of CO2 at the end of the period
3. Our commitments with sustainability Promoting a low carbon strategy
Mainly Offshore Wind Energy projects
Taking part in the project of Principle Power Inc. (PPI). First company in the world able to design, install and operate a floating semi-submerged structure for offshore wind generation
Repsol Nuevas Energías UK participates in the development of two offshore wind energy projects at Scottish coast: o Beatrice Offshore Windfarm Limited (BOWL). Repsol´s participation 25%
Total installed capacity of up to 750 MW, generated by 140 turbines, to be installed over an area of 131,5 km2
In March 2014, the project was approved by Marine Scotland for a capacity of 750 MW. The conceptual engineering stage ended in 2014.
FID to be taken 1st quarter 2016
o Inch Cape Offshore Limited (ICOL). Repsol´s participation 100% Total installed capacity of up to 784 MW The plant will have a maximum of 110 turbines, in a total area of 150
km2 In October 2014, the project was approved by Marine Scotland for a
capacity of 784 MW and a maximum of 110 turbines Conceptual engineering is at its final stage, which is expected to
conclude by end of July 2015 Pending secure of tariff
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Non-fossil fuel energy initiatives
In Repsol we believe that two global goals have to be pursued:
To mitigate climate change and
To provide access to affordable energy in order to support economic growth and development
We set up and deploy ambitious energy efficiency programs to reduce energy consumption and GHG emissions as one of the key elements of our strategy. These programs pursue long term targets which has been made public in order to facilitate their progress by the stakeholders.
We are convinced that innovation and technological development are essential for ensuring reliable and sustainable energy supply in the long term.
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3. Our commitments with sustainability
Our position on Climate Change
Repsol collaborates pro-actively as a member of the Climate Change Working Group of IPIECA (the global oil and gas association for environmental and social issues)
Concerning the concept of stranded assets we would like to highlight some key points:
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3. Our commitments with sustainability
Our view on Stranded assets
Reserves differ from resources: Oil and gas company valuations emphasize proven and commercial reserves that will be produced over the next 10 to 15 years
Not all fossil fuels are the same: Oil, coal and gas are different in key aspects relevant to the unburnable carbon and stranded assets concepts
Developing and deploying innovative technology: Oil and gas companies will continue to play their part in discovering and developing technologies to meet the challenges of supplying energy to billions of people, while reducing CO2 emissions
Repsol integrates CO2 risk into its business planning Focus on energy efficiency and having natural gas as 73% of total reserves will
ensure a robust portfolio in climate constrained future
Ethics and Conduct Regulation
On line training available to employees
Ethics Committee
Channels in place to enable all employees or third parties to submit queries relating to the Ethics and Conduct Regulation and report any potential incidents of non-compliance in a fully confidential manner
Audit and Control Corporate Division Anti-corruption policy
Applies to employees, partners, contractors and suppliers
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Repsol is committed to fighting against corruption in all its forms and establishing mechanisms to prevent corrupt or fraudulent activities
Crime Prevention Model
3. Our commitments with sustainability Anti corruption/ Ethical conduct
Supports non-compliance investigation Evaluates control processes efficiency
A formal framework of regulations, procedures and controls, that provide a means of reasonably ensuring that the risks of crimes being committed are suitably identified, monitored, evaluated and controlled
Code of Best Tax Practices
EITI and other initiatives
Support for initiatives to promote financial transparency in the international extractive sector and in the countries where we operate
We support EITI since its foundation in 2003: We belong to the Peru chapter and cooperate with Trinidad Tobago working group
Adherence to the Code of Best Tax Practices, evidencing our opposition to the use of non-transparent tax structures
EU lobbies
Adherence to the register of EU lobbies, which is part of the European Commission’s transparency initiative
Disclosure Transparency
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3. Our commitments with sustainability Transparency
Transparency is a key value for Repsol and a guarantee of the company’s ethical performance, its commitment to ensuring that all financial and non-financial information is complete and accurate, and
its willingness to engage in dialogue with all stakeholders
Continuous improvement on remuneration disclosure
Disclosure of engagement report
Development of internal guidance for
Policy on respect for human rights
Training
Human Rigths Impact Assesment:
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3. Our commitments with sustainability Respect for Human Rigths
Operational Level Grievance Mechanisims:
By year-end 2014, the number of people to have taken the course had reached 5,668 (total training hours: 11,388). To date, the course has been taken by 23% of the workforce, including 40% of management
4 HRIA concluded (2 in Peru and 2 in Bolivia). Several forecasted projects. Developing KPIs
Existing project in Bolivia and 1 pilot project in Peru. 1 project of developing a new GM on going. Developing KPIs
Due diligence processes Grievance Mechanisms
Based on the UN Guiding Principles on Business and Human Rights
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4. Sustainability plans
How to widen the view? How to include all stakeholders? How to involve the whole organization?
Influence Area
Operations
Added complexity Climate change Global Stakeholders Human rights Supply chain
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CSR Model
CORPORATE COUNTRY OPERATION
Stakeholders’ expectations on Repsol
List of actions: Sustainability plans
Aligning performance to expectations
CSR Committees: Include multidisciplinary executive members which make decisions on the actions to close the gap with
expectations which compose the sustainability plan
3 levels of implementation:
4. Sustainability plans
34
Actions are related to closing the gap in a variety of topics:
Sustainability plans approved in the year – 2015 Nº of Actions
Governance 60
Human Rights 68
Labor Practices 88
Safety
Environment
81
126
Fair operating practices 91
Consumer issues 25
Community involvement and development 154
Total 693
4. Sustainability plans Progress
61 278
427
574 693
0
100
200
300
400
500
600
700
800
0
2
4
6
8
10
12
14
16
2011 2012 2013 2014 2015
Nº of committees
Nº of actions
5 5 13 15 15
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5. Corporate Governance
(*) On 11th November 2013 CaixaBank launched a €594m 3-year Mandatory Exchangeable Bond into Repsol shares (2.5% of share capital)
Total number of shares: 1,400.36 million
11.72 %(*)
8.89 %
6.03 %
58.48 %
Institutional
Free Float
11,51%
8,73%
5,92%
73,84%
Caixabank S.A.
Sacyr Vallehermoso, S.A.
Temasek
Free Float
Retail Investor
14,64%
Institutional Free Float:
59,20%
Shareholder structure
37
5. Corporate Governance
6.41%
Directors may not hold more than 4 mandates in other
listed companies
Repsol currently has no overboarded Directors
Presence of External Directors
The majority of the Board (87.5%) consists of External Directors
Market Practice: The tendency is to decrease the presence of Executive directors
Rotation of independent
Directors
None of the Independent Directors have been on the Company’s board for more than 12 years
Implementation of the international standard (12 years cap) in our legal framework
% of Board independence
1/2 of the Board is independent
Market Practice: Good Governance Code for Listed Companies recommends having 1/2 of the Board Independent
% of Committee
Independence
Audit and Control Committee: Composed exclusively of independent directors
Nomination and Compensation Commitee: Majority independent / Chairman is independent
Strategy, Investments and CSR: Composed exclusively of external directors
The company's Board of Directors recognizes that a solid commitment to corporate governance is critical to establishing trust and credibility with investors.
Board of Directors
38
5. Corporate Governance Board of Directors
Gender Diversity
Female directors make up 7.14% of the Boards External Directors.
Repsol has committed to increase the proportion of women in leadership positions in Spain to 30% by 2020 as recommended in the Good Governance Code for Listed Companies.
Repsol’s Board recognizes that the presence of foreign Directors can add value to the decision-taking process. In line with the multinational nature of Repsol, the Board is committed to include foreign born members with solid
international experience, such as Henri Philippe Reichstul (Brazil), Rene Dahan (Dutch) and J. Robinson West (United States).
Geographical diversity
Separated roles of CEO
and Non Executive Chairman
The roles of the CEO and Chairman have been separated as of April 30, 2014 with the appointment of Mr. Josu Jon Imaz as CEO.
In 2015, the Company has continued implementation of this program, and in its meeting on April 30, 2015, the Board of Directors had proposed to attribute all executive functions to the CEO.
The AGM 2015 has re-elect the Chairman as a board member for a period of four years being classified now as an External Director in accordance with Article 529 duodecies of the Spanish Corporations Act and Article 3 of the Board Regulations.
In addition: 1/2 of the Board consists of Independent Directors and all Board committees, with the exception of the Executive Committee, are composed exclusively of external Directors only.
Transparency on
remuneration
The Company continues improving the disclosure on the remuneration issues and the implementation of international best practices. The Annual Remuneration Report is submitted for consultation vote to the General Shareholders Meeting. On 2015 AGM
the Report was approved by 95,098% of the share capital present on the meeting.
This year the AGM 2015 has approved the Remuneration Policy for the Directors for the years 2015, 2016 and 2017. This Remuneration Policy has been prepared in response to the new regulatory framework and reflects best practices on good governance and also Repsol's unflinching commitment to ensuring the utmost transparency.
Since 2009 to 2015 the increase of the fix pay for Directors has only increased 2.5% in total
The Company has committed to apply the limit of 2 years severance payment when proposing the appointment of new Executive Directors.
Separated CEO/Non Executive Chairman, Diversity and Transparency
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Annexes Main KPI Evolution
2012 2013 2014
Repsol personnel (number) 1 23.995 24.214 24.460
Number of fatalities 4 0 0
Personnel covered by collective agreement (percentage) 57 57 56
Female staff (percentage) 32 32 33
Women in management posts (percentage) 15 15 15
Women on the Board of Directors (number) 2 2 2
Total turnover rate (percentage) 8 7 7
Investment in training (millions of euros) 19,00 19,63 17,5
Training per employee (hours) 42 40 44
Repsol staff who receive performance evaluations (percentage) 38 60 63
Differently-abled employees (number) 543 654 674
Teleworking staff (number) 1.037 1.222 1.411
Incidents of discrimination (number) 3 2 1
Voluntary social investment (millions of euros) 25,05 24,58 26,03
(1 )Total workforce at 12/31/2014
Social Indicators
Annexes Main KPI Evolution
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Enviromental Indicators
2012 2013 2014
Spills > 1 barrel
Number of spills that reach the environment 29 14 17
Volume of hydrocarbon spills that reach the environment (tons) 6.091 15 316
Energy and Carbon Management 1
Energy consumption (106 GJ) 2 178,5 176,8 178,4
Direct emissions of CO equivalent (million tons)3 14,1 14,2 13,8
CO reductions (million tons)4 0,443 0,444 0,452
Water Management
Fresh water withdrawn (kilotons)5 56.243 54.203 54.729
Reused water (kilotons) 8.375 9.473 9.945
Water discharged (kilotons) 38.925 38.965 35.920
Hydrocarbons in water discharged (tons) 259 460 199
Waste Management 6
Hazardous waste (tons) 80.775 66.315 66.430
Non-hazardous waste (tons) 52.580 182.693 167.200
(1 )The energy management and carbon data for 2014 currently being verified. Once verification is completed, they will be available on repsol.com.
(2) To calculate the energy consumption of different facilities we apply our Environmental Parameters Application (EPA) which takes into account all
fuels burned at the facility to make the energy required for its different processes (external fuel, mostly natural gas, and internal fuel generated at
the facility) and the net balance of steam and electricity imports and exports.
(3) Includes emissions of CO2, CH4 and N2O in terms of CO2 equivalent.
(4) CO2 reduction achieved due to the implementation of new initiatives to reduce greenhouse gases in a “business as usual” context.
(5) The fresh water figure for 2013 has been modified following publication of the 2013 Corporate Responsibility Report, due to a later correction carried out.
(6) Waste figures for 2014 may be subject to slight modification when the annual waste declaration is filed with the public authorities. In addition, waste
from drilling operations have to be considered: 58.793 tons (2012), 115.978 tons (2013) and 105.469 tons (2014).
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Annexes Safety indicators
1 0,6 0,92 0,84 0,55 0,78
0,91
0,59
0,85
2012 2013 2014
Lost time injury frequency rate
Total recordable injury frequency rate
3,39 2,59 2,38 0
0,5
1
1,5
2
2,5
3
3,5
4
2012 2013 2014
Own Employees
Contractors Employees
Combined
Zero Fatalities in 2014
Main OHSAS 18001 certifications by activity in 2014
Activity Centers certified under
OHSAS 18001 %
Refining 6 de 6 100
Chemicals 6 de 6 100
E&P 4 de 9 44
Gas&Power 0 de 1 0
LPG 25 de 32 78
Lubricants and Specialities 13 de 13 100
Technology Center 1 de 1 100
Safety and Enviromental Audit carried out in 2014
Number
Internal 384
Certification 109
External 89
Other 86
TOTAL 668
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Annexes Excelence in Enviromental management
Number of Hydrocarbon Spills (1)
(1) Includes spills in excess of one barrel that reach the environment (either the water or land on which we perform our operations)
29 14 17
0
5
10
15
20
25
30
35
2012 2013 2014
Our objective : zero spills
44
Annexes Repsol 2Q and 1H 2015 results (*)
Note: Repsol Group made the decision in 2014, prompted by the business reality and in order to make its disclosures more comparable with those in the sector, to disclose as a measure of the result of each segment the recurring net operating profit at current cost of supply (CCS) after tax of continuing operations (“Adjusted Net Income”), which excludes both non-recurring net income and the inventory effect. For more information please refer to section “Basis of preparation of the financial information” of the 2nd Quarter 2015 earnings release.
(Unaudited figures)
Results (€ Million) Q2 2014 Q1 2015 Q2 2015% Change
Q2 15/Q2 14
January -
June 2014
January -
June 2015
% Change
2015/2014
Upstream 145 (190) (48) - 400 (238) -
Downstream 162 534 439 171.0 452 973 115.3
Gas Natural Fenosa 159 122 105 (34.0) 282 227 (19.5)
Corporate and others (76) 462 (184) 142.1 (212) 278 -
ADJUSTED NET INCOME 390 928 312 (20.0) 922 1,240 34.5
Inventory effect 5 (140) 83 - (54) (57) 5.6
Non-recurring income 156 (27) (103) - 191 (130) -
Income from discontinued operations (31) - - - 268 - -
NET INCOME 520 761 292 (43.8) 1,327 1,053 (20.6)
(*) In 2nd Quarter 2015 the Group, for the first time, consolidated the results of the recently acquired company Talisman Energy Inc. (“Talisman”), since the date of closing of the transaction, 8 May.
45
Annexes
(Unaudited figures)
Economic data (€ Million) Q2 2014 Q1 2015 Q2 2015% Change
Q2 15/Q2 14
January -
June 2014
January -
June 2015
% Change
2015/2014
EBITDA 1,025 962 1,421 38.6 2,202 2,383 8.2
EBITDA CCS 1,018 1,174 1,297 27.4 2,283 2,471 8.2
NET CAPITAL EXPENDITURE 836 932 9,069 - 1,451 10,001 -
NET DEBT 2,392 126 13,264 - 2,392 13,264 -
EBITDA / NET DEBT (x) - - 0.43 - 1.84 0.40 (78.3)
Operational data Q2 2014 Q1 2015 Q2 2015% Change
Q2 15/Q2 14
January -
June 2014
January -
June 2015
% Change
2015/2014
LIQUIDS PRODUCTION (Thousand bbl/d) 122 132 203 67.0 126 168 33.1
GAS PRODUCTION (*) (Million scf/d) 1,216 1,249 1,811 48.8 1,201 1,531 27.5
TOTAL PRODUCTION (Thousand boe/d) 338 355 525 55.4 340 440 29.6
CRUDE OIL REALIZATION PRICE ($/Bbl) 87.8 44.6 55.7 (36.6) 86.9 51.1 (41.2)
GAS REALIZATION PRICE ($/Thousand scf) 4.0 2.8 3.2 (20.0) 4.1 3.1 (24.4)
DISTILLATION UTILIZATION Spanish Refining
(%)83.5 82.6 89.1 6.7 79.0 85.9 8.7
CONVERSION UTILIZATION Spanish Refining (%) 100.6 98.8 105.1 4.5 98.8 102.0 3.2
REFINING MARGIN INDICATOR IN SPAIN ($/Bbl) 3.1 8.7 9.1 193.5 3.5 8.9 154.3
Repsol 2Q and 1H 2015 results (*)
(*) In 2nd Quarter 2015 the Group, for the first time, consolidated the results of the recently acquired company Talisman Energy Inc. (“Talisman”), since the date of closing of the transaction, 8 May.
46
Repsol has led the Oil & Gas sector for two consecutive years, in the 2011 and 2012 editions of the prestigious Dow Jones Sustainability Indexes.
The company also leads the Oil & Gas sector on the European index (DJSI Europe).
Annexes Main Sustainability Indexes and Initiatives
47
Repsol is the leading oil and gas company in 2012 for carbon management, according to the Climate Disclosure Leadership Index (CDLI), comprising the top 50
international companies in communication and transparency on climate change
Our Company has won recognition for its energy efficiency and carbon management for the third time in the last five years
Annexes Main Sustainability Indexes and Initiatives
2009 2010 2011 2012 2013 2014
Maximum Energy sector
score 88 90 92 98 98 100
Minimum score for Energy
sector companies to be
eligible for the CDLI
79 88 90 95 97 98 *
Repsol’s score 75 88 89 98 98 96
Repsol´s evolution CDLI - A B A- B B
70
75
80
85
90
95
100
105
2009 2010 2011 2012 2013 2014
Maximum Energy sectorscore
Minimum score forEnergy sector companiesto be eligible for the CDLI
Repsol’s score
(*) Since 2014 leaders are identified by geographical area and not globally as in previous years. According to 2014 score, Repsol is among the companies with the highest score in transparency of the Energy sector.
©
THANK YOU
©
Repsol Contact details:
• Ms. Victoria Velasquez, Deputy Director Investor Relations- ESG
+34 91 7534474
• Ms. Leticia Padura, Investor Relations Officer
+34 91 7535988
Repsol S.A.EM Division of Economy, Finance and Development. 03/09/2015