ANNUAL REPORT

2010

Health,Safety andEnvironment

Shaping the future.

04 Foreword.

06 Activities And regions.

08 hse – our philosophy.

14 hse – our Actions.

34 hse perFormAnce 2010.

52 outlook.

55 contActs.

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CONTENTS

04/05

Dear Ladies and Gentlemen,

Energy is our business. And energy is our future.

We want to make our future a sustainable one. For us, sustainability is achieved through reconciling long-term commercial success with protection of the environment, safety, health for all and our social responsibility.

We embrace these challenges. After all, lasting eco-nomic success is not possible if we do not protect health, safety and the environment (HSE). The aim of our HSE management system is to systematically reduce risks to both people and nature. That’s why we at Wintershall believe that nothing is so impor-tant that it would justify ignoring the principles of work safety and environmental protection. This is a substantial basis for our corporate philosophy. As a responsible company, Wintershall defines its own ambitious standards toward safety perfor-mance and environmental protection – usually beyond what is required by law. These are valid for our executives, employees and contractors alike. Wintershall lives up to its responsibility.

2010 was a special year for our company. Apart from the start of work on building the Baltic Sea pipeline Nord Stream, the foundation was laid for one of Europe’s largest infrastructure projects: Construction of the 470-kilometer natural gas pipe-line OPAL in Eastern Germany. Up to 2,500 workers were and are going to be busy working here until the pipeline’s planned commissioning date in October 2011. Major projects of such economic significance are all too rare. They pose great challenges for everyone involved.

Our economic performance in 2010 was impres-sive. Despite a tough climate, Wintershall nearly maintained oil and gas production at the high level of the previous year: 133 (2009: 136) million barrels of oil equivalent (BOE). The company was able to increase its earnings before income and taxes (EBIT) by 45 million euros year-on-year to 2,234 million in 2010. From this, 1,918 million euros were generated from exploration and production and 416 million from gas trading.

Our ambitious health and safety target is zero accidents in all our activities. We achieved that mission for our own employees and were once more able to improve on the previous year in 2010. However, to our great dismay, our contractors suf-fered three fatal accidents and six accidents with lost time injuries, which led us to extensively review the requirements toward our contractors. On this basis, we have developed an extensive catalogue of measures to avoid such accidents in the future. The implementation of these is a joint effort between ourselves and our contractors. I call on all employees to play an active part in this process.

In the area of exploration and production, 2010 was impacted by the events related to the Deep-water Horizon disaster in the Gulf of Mexico. Even though we ourselves do not carry out any deepwater drilling, we have taken the incident and its investi-gation reports as an opportunity to identify learning points and room for improvement in our offshore activities.

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Dr. Rainer SeeleChairman of the Board

This report was created to give our employees, partners, public authorities and the interested public a summary of our health, safety and environ-ment activities in 2010. To ensure this, we have sup-plemented the key figures that are customary in the international arena, and that have been audited by KPMG, with many outstanding examples of our HSE activities.

Our success is primarily due to competent, inno-vative, extremely motivated and above all healthy employees. We are well prepared and together will overcome the challenges ahead of us, especially in the field of health, safety and the environment – to achieve a sustainable and safe future. After all, our ambitious goal for the future remains: zero accidents and an end to the flaring of associated gas by 2012.

Wintershall – Generating safety.

In the oil and gas industry, technological excellence, innovativeness and technical expertise are at leastas good at opening doors to cooperation deals and participating interests as billions in capital. As in the past, Germany must be the first home to innovative technologies in the future. The potential production of shale gas in Germany is currently a topic of debate. In this regard, we may be on the verge of a new technological leap. And we must not miss the boat. However, we don’t even know how large these unconventional deposits are in Germany and whether they can be developed cost-effectively. Consequently, our strategy is: Yes to exploration, yes to research. However, what is technically feasible can only be put into practice if it makes both eco-nomic and environmental sense. Our policy is not one of development at all costs.

We intend to invest more strongly in a sustainable future. That includes genuine innovations, such as the Schizophyllan biopolymer. The idea came from nature itself. These biopolymers are biodegradable and are eco-efficient if applied in oil production. Wintershall and BASF are jointly researching these in order to develop a new environmentally friendly technology which significantly increases oil recovery rates for the reservoir it is applied to.

To reduce greenhouse gas emissions from ourproduction sites, in 2007 we committed ourselves to discontinuing the flaring of associated gas.We are determined to achieve this goal by 2012.

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CORE REGIONS AND ACTIvITIES

OF WINTERSHALL.

CORE REGIONS AND ACTIvITIES

OF WINTERSHALL.

Wintershall, based in Kassel, Germany, has been actively involved in the exploration and production of crude oil and natural gas for more than 75 years. Wintershall focuses on selected core regions, where the company has built up a high level of regional and technological expertise. These are Europe, North Africa, South America, as well as Russia and the Caspian Sea region. It is also expanding its activities in the Middle East. The company, a wholly-owned subsidiary of BASF, is now the largest German producer of crude oil and natural gas, and with its subsidiaries, WINGAS and WINGAS TRANSPORT, is also an important gas supplier to the German and European market.

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The objective of Wintershall’s HSE (Health, Safety and Environment) management system is to reduce the risks to people and the environment. The guiding principle is: Economic concerns do not have priority over health, safety and the environment. Nothing is so important that Wintershall would allowthe principles of safety at work and environmental protection to be ignored. Values, standards and guidelines also serve to protect our most important resource: our people. We offer all employees opportunities for establishing the best possible working conditions and for personal development, enabling them to realize their potential.

HSE – OUR PHILOSOPHY.

HSE – OUR PHILOSOPHY.

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SYSTEMATIC HSE – SUCCESSFUL AND SAFE.Wintershall has laid down its position on HSE (Health, Safety and Environment) in a policy. This policy governs how the company operates within the global oil and gas industry. The key objectives of the company’s HSE policy are:

• Integration and continuous improvement of HSE in all activities.• “Everyone counts” – rigorous implementation of the HSE guidelines by all employees.• Living up to our social responsibility.• Responsibility for global climate protection.• Compliance with international conventions, local laws and our own standards.

In order to achieve these objectives HSE has to be effectively integrated in all activities. This is ensured by the WINS health, safety and environment manage-ment system. It consists of 12 elements, subdivided into planning, rollout, reporting and system improve-ment. The management system is designed so that HSE is integrated appropriately and the business objectives can be achieved.

Well-planned

Implemented

Notified

System improved

HSE Award Winners 2010

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Innovative solutions for improvement of health, safety and environment are rewarded at Wintershall. The company has been conferring an HSE Award since 2007, a prize for outstanding projects in the field of protecting health, safety and the ecology. An award category for “Simple Solutions” – a small and smart solution that has a perceptible impact on everyday work through minor changes – was added in 2010.

The HSE Award rewards proactive and creative measures that have been successfully implemen-ted at the company during the contest period and have resulted in a clear improvement in the field of HSE. An additional criteria for the reward is whether the solution can be applied at other locations.

The aim of the contest is to improve our high HSE performance continuously. Each entry is an enrich-ment for the whole company’s HSE performance,

THE HSE AWARD – A PRIzE FOR INNOvATIvE EMPLOYEE IDEAS.

since all the solutions are communicated within the company worldwide. Therefore they can be taken up by other teams and developed further.

In line with the HSE mission statement “Everyone counts,” all employees are urged to join in and sub-mit innovative ideas from their team. The award is intended as an additional incentive – above and beyond the company suggestion system – for employees to become involved in HSE and is accompanied by a tax-free cash prize.

The winners are chosen by an evaluation committee consisting of ten permanent jurors and representa-tives of the winning teams from the previous contest. The jury examines all entries and assesses them on the basis of set criteria – the most important being the project’s benefit for health, safety and the environment. Others include the HSE solution’s pro-activity, personal initiative and team spirit.

HSE-AWARD 2010.22 entries were submitted in the 2010 competition, eight in the category “Simple Solutions“. The award in the HSE project category was conferred to a team from Libya that had worked on a way to im-prove protection of anchor pipes at wells against external corrosion in the Libyan Desert for three years. The solution includes an innovative coating and intensification of pipeline checks. The winner in the “Simple Solutions” category is based in Wintershall Netherlands. He developed a door stopper for con-tainers, a hook-shaped device that prevents the container doors from suddenly being blown shut by the wind and so increases work safety.

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ECONOMIC AND HSE OBjECTIvES HAvE EqUAL PRIORITY.

Why does Wintershall publish a review of its HSE work?We want to demonstrate transparency toward our employees, partners, public authorities and the interested public. We regard it as our social respon-sibility to provide regular information on our activities in the field of health, safety and the environment. This is not limited to the internationally accepted key performance indicators; it also includes selected positive examples from our work. By this we hope to inspire others and set an example for successful HSE management.

How significant is HSE for Wintershall?The clear philosophy of our company’s manage-ment is that our high standards in health, safely and environment at Wintershall have equal priority alongside economic objectives. Nothing is so urgent or important that we would allow HSE principles to be ignored. That also protects our employees – our most important resource.

Implementation of and compliance with HSE stan-dards entails costs. Doesn’t that diminish commer-cial success?The very opposite – high HSE standards are the key to lasting commercial success. For instance, avoiding occupational accidents pays off two-fold: Production remains stable because no time is lost due to injuries. At the same time, healthy employees are also motivated, perform well and can channel all their energy into making the company successful.

What are the employees and contractors contribu-tions to this?All of us have a vital part to play when it comes to complying with the HSE policy. We expect respon-sibility, pro-activity and personal commitment from everyone and don’t make a distinction between our own employees and those of contractors. We have an ambitious goal: zero accidents in all our activi-ties. Even though we haven’t been able to achieve this target in one year, we are still doing all we can to avoid accidents and operate our facilities safely.

Corporate HSE Manager Guido Schnieders on the importance of HSE in Wintershall’s activities.

Interview with Corporate HSE Manager Guido Schnieders

In the past years contractor incidents were reoccur-ring events. What do you think is the reason?We believe the sharp increase in demand for skilled workers is having a negative impact on the qualifi-cation and experience of staff and thereby on safety. That’s why we have to work with our partners to achieve a high standard of training once more in the oil and gas industry. In addition, we will rigorously enforce our contractor management processes, i.e. assess the HSE performance of external com-panies before awarding contracts to them and conduct information and training events.

The “E” in HSE stands for environment. What are the challenges here?Wintershall increasingly explores for new reserves in areas that are ecologically or culturally sensitive. That’s why we analyze the effects on people and the environment precisely beforehand and define measures to minimize the impact. That also includes preserving the cultural heritage. Protecting the environment also means efficient use of natural resources. That’s why we constantly strive to improve the energy efficiency of our facilities.

Wintershall minimizes health risks at work. It also offers events providing information on health and cancer prevention. Isn’t that the employees’ own business?No. We want to keep our staff’s health at a high level. Prevention and information play a vital part in that. In the case of cancer of the intestine, for example, experts attribute the large number of people with this disease to a lack of knowledge about preven-tion and early screening. And the same with exer-cises: We want to motivate our employees to walk 8,000 to 10,000 steps a day to avoid being over-weight and the related illnesses.

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– OUR ACTIONS.HSE

– OUR ACTIONS.Just about everything we do or plan influences people and the environment in some way or other. That’s why we have fully integrated HSE in our activities.

HEALTH AND SAFETY.Responsibility and safety are fundamental values that form the basis for our corporate philosophy. Employees’ safety is Wintershall’s highest priority – whether they are our own or from contractors. Responsibility, pro-activity and personal comittment from every-one is vital to ensure a high standard of safety in the long term.

Our managers take on responsibility for their employees so that every single one of them feels safe at work and returns back home healthy. The same also applies to our contractors, who have to meet strict requirements and are also actively supported in their HSE work.

Wintershall is a company where people come first. That is be-cause healthy and motivated employees can contribute to the company‘s success with their capabilities and creativity.

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PROjECT MANAGEMENT – A GLIMPSE INTO THE FUTURE.Wintershall has many years of experience in deve-loping reservoirs that are difficult to access and are geologically challenging. Every new exploration project therefore places high demands on plan-ning. Above all, exploration in unknown regions requires particular support for the employees and contractors on the ground. That is why HSE experts support the project teams from an early stage. Apart from feasibility studies for a project, exami-nation of environmental and safety aspects is an integral part of planning. This includes environmental impact studies and plant safety analyses, as well as selection of contractors on the basis of HSE considerations. It is also necessary to assess risks in remote regions, such as car accidents on unpaved roads, endemic diseases, unsafe food and drinking water, logistics problems, the climate, crime, violent attacks or political unrest. During advance expedi-tions to the exploration area, risks are identified and suitable and concrete measures to minimize them are determined and summarized in an HSE project plan. As part of this, specialists evaluate the standard of medical care, test communication by satellite phone, identify landing strips for aircraft or examine the quality of the water in available wells. Safety engineers regularly supervise and control activities during the execution phase. Emergency concepts formulated at the outset are constantly reviewed and adapted to the current situation if necessary. Compliance with the relevant regulations and HSE standards is ensured in the operating phase. All projects at Wintershall are planned and carried out according to the same HSE procedures.

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INCIDENT MANAGEMENT. Wintershall promotes safety at work through risk assessments, procedures, seminars, training courses and audits. Reporting and investigation of incidents plays a key role in prevention and helps increase the standard of safety even further. Wintershall has esta-blished a reporting system that includes all locations worldwide and that does not make a distinction between its own employees and those of contrac-tors. Detailed analysis of incidents helps identify and assess their causes. Incidents where there is merely a risk potential are also investigated. The results are used to derive measures to protect against such incidents occurring in future and are communicated every month.

INSIGHTS.

INSIGHTS.

CRISIS MANAGEMENT.Wintershall’s HSE management system is aimed at avoiding incidents. However, to respond to unex-pected events, Wintershall has an end-to-end, clearly defined and interdisciplinary crisis manage-ment system comprising strategies and measures to tackle incidents. The system is embedded in the existing management structures. Only a planned and organized approach guarantees the best-possible prevention and control of emergencies. Emergency plans, regular safety exercises and annual drills for major incidents aim to ensure an ideal response. Training courses help sensitize and prepare employ-ees. HSE experts are responsible for drawing up, maintaining and supervising the measures and documentation for emergency planning.

SAM – SYSTEM FOR RECORDING SAFETY-RELATED SITUATIONS. An important aid in safety work has been developed for Wintershall Deutschland in the shape of the reporting system SAM. SAM is an abbreviation for “Situation, Assess and Measures”. Its objective is to enable prompt preventive measures to counteract situations where there are risk potentials and near accidents. Best-in-class examples are also com-municated using the system. Another objective of it is to improve awareness for, assessment of and readiness to communicate unsafe situations. Re-ports are stored in a database after being received. A working group in Kassel regularly deliberates on measures to implement the suggestions and improve the system.

ESTABLISHMENT OF AN EMERGENCY RESPONSE ASSOCIATION.Almost 40 new companies have qualified as opera-tors on the Norwegian Continental Shelf since 2000. These companies will account for a significant proportion of exploration work in Norway during the next few years. To ensure safety in offshore pro-duction, there are organizations that can respond rapidly to dangerous situations.

At the initiative of Wintershall Norge and in coope-ration with the Norwegian Oil Industry Association (OLF) and other companies, a concept to set up a professional emergency prevention center for the new companies operating on the continental shelf was developed. A feasibility study confirmed the assumption that it would be able to offer a higher-quality and more cost-efficient emergency service than the solutions currently available on the market. The Operators’ Emergency Response Association (OERA) was founded in june 2009 and a joint center was set up with ten employees. The obvious advan-tages of a permanent emergency response organi-zation are greater safety thanks to improved quality and training of staff, as well as the fact that there is one and the same organization for all activities.

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CONTRACTOR MANAGEMENT.Many projects in the oil and gas industry are un-imaginable without the support of external experts. That is why Wintershall uses contractors in various areas, including large specialist firms to conduct drilling campaigns, construction companies in infra-structure projects or smaller subcontractors at the administrative locations.

Wintershall‘s selection criteria for contractors are not limited to economic aspects. Environmental protection and work safety standards are also taken into account in assessing new and existing con-tractor relationships. As regards compliance with HSE standards, the Wintershall Group places the same high requirements on its contractors as on its own employees. Consequently, the company applies strict criteria in selecting them.

Extensive prequalification to examine a firm’s HSEperformance is conducted before the contract is awarded. This comprises an assessment of the contractors on the basis of the HSE documentation submitted. Information events are also held together with the contractor companies. The objective is to inform contractors of Wintershall’s requirements, train them and give precise recommendations to them in relation to HSE and through this help them improve their HSE performance.

Audits complement these measures. As part of contractor management, Wintershall’s contractors must also furnish proof of their HSE performance in further regular audits. The audits are conducted by a team of HSE experts and an operational specia-list from the field of work. The findings are comple-mented by continuous on-site inspections.

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PLANT AND PROCESS SAFETY.In addition to investments in exploring, developing and producing resources, the expansion of tech-nological know-how is the basis for securing the success of our company. The ability to overcome challenging geological conditions and in particular apply innovative exploration, drilling and production technologies is a key aspect of Wintershall’s techno-logical expertise, especially in its core regions.

Worldwide, Wintershall operates facilities for explo-ring, producing and transporting crude oil and natural gas that comply with the very highest safety standards. The company invests continuously in the construction of new and further development of existing plants. It is crucial for plant safety to be state-of-the-art at all times. Availability and efficiency are also highly important. As early as the planning stage, aspects such as health, safety and the environment are integrated in a multi-phase process. So that all facets can be taken into account, plant safety reviews – for the most part interdisciplinary in nature – are conducted and headed by an HSE expert. Apart from identification of the measures needed to protect people and the environment, decisions on the safest process technology, a suit-able location and logistics are taken. A tailor-made HSE concept containing the points of relevance to safety in planning, constructing and operating the facility is created for each project on the basis of pro-cesses, site plans, the existing local infrastructure, weather conditions and geotechnical information. Implementation of the concept is reviewed before the plant is commissioned. A further component of plant safety is inspections to check compliance with safety standards.

A MULTI-STAGE SYSTEM ENSURES SAFETY.For drilling projects special demands on safety and environmental protection have to be taken into consideration. It is therefore necessary to define the HSE rules and responsibilities for the projects in advance and as precisely as possible so as to be prepared, in particular for unforeseen occurrences. Alongside the very highest technical standards, this includes emergency plans backed by regular drills. The company-wide HSE management system “WINS” and the Well Operations Policy are applied in all Wintershall activities, thus guaranteeing that the highest standards are adhered to. This is ensured by regular reporting, inspections and audits.

With the help of different systems it is possible to ensure safety during drilling projects. Free-flowing production wells are protected by a subsurface safety valve and a Christmas tree with numerous closing valves, ensuring that the well is automatically shut in if an incident occurs. Multi-stage blowout preventers equipped with several independently operating safety devices to seal the well are used in exploration and can be activated automatically, mechanically or by remote control. As a minimum, Wintershall requires two redundant shut-off systems to be used at all times in exploration. In offshore production, an eight-stage barrier system is used, each with a large number of safety systems. These barriers ensure the overall integrity of the facility at all times, even if one or more elements fail.

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various factors determine how fast and for how long oil or gas can be produced from a reservoir, including the geological structure of the reservoir, the porosity and permeability of the reservoir rock, and the consistency and viscosity of the hydrocar-bons it contains.

Special techniques are required to extract oil or gas enclosed in extremely impermeable reservoir rock. Alongside horizontal drilling, hydraulic fracturing has been in use around the world for decades and is being improved all the time. The technique is used to exploit high-density reservoirs which lie deep underground.

The process involves injecting water at high pres-sure at previously defined points into the solid rock layers to create fine millimeter-thin cracks in the rock. Sand mixed with the water (proppants) helps to keep these cracks open longer. The cracks make it easier for the hydrocarbons in the reservoir to flow toward the well for production. This method has also been used for decades in Germany in crude oil and gas production from conventional reservoirs, in drilling for hot water or, in recent years, in geo-thermal drilling.

99 % of the fluid mixture used in fracing comprises water and sand, with around 1% being made up of chemical additives to ensure that silica sand, for example, blends with the water. The deliberately created flow channels stay open long enough and bacteria do not enter the reservoir. Apart from the natural seal due to the pressure from the mighty weight of the several hundred meter thick overlying rock, usually consisting of clay or salt layers, the well’s system of steel pipes, which are cemented into place, form secure barriers against the water-bearing aquifer layers.

For several decades now, Wintershall has used fra-cing to produce crude oil and gas, mostly in tight gas deposits in Russia, Argentina, the Netherlands and Germany, with high safety and environmental stan-dards – without any impact on the environment.

FRACING: A WORLDWIDE PROvEN TECHNOLOGY.

Fracing facility drilling hole Leer Z4 in Germany

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First aid courses

HEALTH PROTECTION.The aim of health protection at Wintershall is to prevent work-related illnesses or impairment to employees’ health, as well as maintain a high level of health within the workforce.

Main topics are health promotion and ensuring effective medical care in the event of emergencies. As an international company, Wintershall also en-deavors to give its employees the best possible preparation for journeys and assignments abroad and avoid unnecessary risks. Travel advice, vacci-nation recommendations and information on coun-tries where Wintershall operates are regularly compiled and updated. A special HSE checklist was developed to prepare employees for trips abroad. The package is rounded off by special procedural instructions and emergency cards for each location.

The issue of health protection in exploration and production in remote regions and under extreme climatic conditions requires special attention. There is often a lack of medical care or the local medical infrastructure does not meet international stan-dards. In such cases, special preventive measures are taken with great care to rule out health risks to employees and contractors as far as possible.

Medical care by a company physician or a certified institution is provided at all locations. In addition, Wintershall offers its employees the chance to participate in regular health campaigns on topical issues, such as cancer prevention and screening, lack of exercise or nutrition, and take the initiative themselves.

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HAzARDOUS SUBSTANCE DATABASE.A hazardous substance database has been deve-loped for the German production operations and can also be used internationally. It gives employees quick access to information on the substances used, for example in the form of safety data sheets, risks assessments and operating instructions. Be-cause the database is available in Wintershall’s company network, it can be accessed locally and so is easy to use for all employees. Its content is maintained and updated centrally and thus is al-ways up-to-date. However, the database is not only used in operational business, but also for conducting employees on the safe use of hazardous sub-stances.

INSIGHTS.HEALTH PROTECTION IN PRODUCTION – NORM AND TENORM.Residues containing naturally occurring radioactive materials (NORM/TENORM) may arise in the pro-duction of hydrocarbons. Oil and gas themselves are not radioactive, unlike the enriched salty produc-tion water, which is charged with salts.

The production residues, such as sludge or depo-sits on riser pipes, only emit a low-intensity dose. The values are well below the level of radiation to which aircraft passengers are exposed. These production residues are not a hazard to employees, the population or the environment.Production residues containing naturally occurring radioactive materials are disposed of in accordance with the provisions of the German Radiation Protec-tion Ordinance. This process has been officially approved and examined. Storage of waste and exposure during work are monitored by radiological safety representative and is documented transpa-rently at all times.During cleaning work on production facilities, all necessary measures, such as instruction, use of per-sonal protective equipment, control measurements, etc., are carried out to exclude risk to employees, contractors and third parties.

NORM/TENORM (technologically enhanced natur-ally occurring radioactive material), i.e. material containing natural radioactivity, arises in many segments of industry, including the production of drinking and mineral water, the geothermal sector, the metal-working industry and coal, ore, crude oil and gas production. The quantity of NORM/TENORM produced in Germany from the oil and gas industry is about 0.3 % of the total for the country as a whole.

ENvIRONMENTAL PROTECTION.

It goes without saying that Wintershall is committed to the responsible use of natural resources in exploration, field development and production. We respond to the challenges by applying high standards and driving technical innovation. Environmental protection is in our own financial interest. Therefore, the preservation of natural resources, the prevention of emissions and waste are integral parts of the explo-ration and production process. A key factor to our success is efficient use of the resources required to find and produce reserves with new or improved methods and so minimize the impact on the environment.

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The international community has set out ambitious goals in order to stop climate change. As laid down in the Kyoto Protocol, global greenhouse gas emis-sions are to be cut by at least five percent compared to their 1990 levels from 2008 to 2012. The Euro-pean Union has committed itself to a reduction of at least eight percent in the same timeframe. In December 2008, the EU also agreed on a package of directives and targets for climate protection and energy, under which primary energy consumption and greenhouse gas emissions are to be cut by 20 percent compared to 2005 by the year 2020. This comprises expanding renewable energies and in-creasing energy efficiency by 20 percent.

Emissions are created in exploration, production and transportation of crude oil and gas as a result of the energy required in these tasks – energy must be generated or imported in the form of electricity, process heat, steam and pressure. Since the pro-duction facilities are often sited in poorly developed regions, energy must be generated on site, normally using fossil sources, such as gas, heating oil or diesel. These emit a number of substances into the air during their thermal conversion. Other pro-cesses where substances are emitted into the air are the flaring of associated gas or condensate during production and the release of unburned gas (cold flaring / venting) for safety reasons or as part of maintenance measures.

REDUCTION OF EMISSIONS.

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As Germany’s largest producer of crude oil and natural gas and a company that operates worldwide in selected core regions, Wintershall accepts its responsibility to protect the global climate. Apart from complying with international conventions, local laws and our own standards, we help cut emissions by using leading-edge technologies and new or improved methods to increase energy efficiency, thus minimizing the impact on the environment, reducing energy consumption and also keeping costs as low as possible.

INFLUENCING FACTORS.Greenhouse gas emissions in production of crude oil and natural gas fluctuate for a number of pro-duction-related reasons. Projects, such as develop-ment of new fields, testing of wells, construction of pipeline links or scheduled plant shutdowns for maintenance or repair work, as well as safety reasons may influence their volume.

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CO² EMISSIONS TRADING. Emissions trading was introduced in the EuropeanUnion as of january 1, 2005, as part of the implemen-tation of the Kyoto Protocol. The goal of this system is to reduce CO² emissions where it is cheapest to do so. Market players are facilities that produce emissions and have an output of more than 20 megawatts capacity, energy-intensive industries and – as of 2012 – aviation. The second period ofemissions trading in the European Union commen-ced on january 1, 2008, and will last until 2012. The companies involved are currently preparing for the 3rd trading period which will last from 2013 to 2020 and involve major changes. As of 2013, the emissions trading system will be extended to other sectors and applied more stringently. In future, emissions rights will be auctioned to a greater ex-tent and no longer distributed free of charge as is currently the case. The share of auctioned certifi-cates will increase from 20 percent per annum in 2013 to 70 percent by 2020. In addition, the total quantity of available certificates will be reduced continuously by 21 percent overall.

Eleven plants at Wintershall/WINGAS are subjectto the statutory requirements for emissions trading in the 2nd trading period from 2008 to 2012. They include compressor stations, the Rehden natural gas storage facility and the steam flooding plant in Emlichheim. Greenhouse gas emissions have already been reduced as a result of numerous projects aimed at improving energy efficiency. Wintershall is also involved in research projects investigating ways of storing and processing CO².

Compressor station Mallnow in Germany

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EFFICIENT POWER GENERATION.Wintershall already supplies all its operations in Germany independently with electricity it generates itself. The largest of the facilities which help to supply the various sites is the combined heat and power generation (CHP) plant in Emlichheim. Gas that could not previously be used cost-effectively is now used to produce electricity and steam. The heart of the plant is a 5.2-megawatt gas turbine that drives a generator which produces up to 45 million kilowatt hours of electricity per year. Wintershall invested 5.9 million euros in building the new CHP plant. The exhaust heat, which has a temperature of more than 500° C and comes from the gas burned to produce the electricity, would normally be lost in conventional plants, but is used here to produce more than 100,000 tonnes of water vapor a year. Wintershall needs that to extract oil by steam flooding. The new technology cuts CO² emissions by 25,000 tonnes a year.

STEAM TURBINE USES ExHAUST HEAT.The exhaust heat from the three existing gas turbines at the Mallnow natural-gas compressor station near Frankfurt (Oder) is used to power a steam turbine. A pipe with a diameter of around four meters takes the exhaust gases of the gas turbines to a process, where steam is produced to drive the fourth turbine. Afterwards, the used steam is cooled and liquefied in a closed cycle. The steam turbine generates an output of up to 20 megawatts. Expensive drive power is therefore saved and CO² emissions are specifically reduced.

NO FLARING POLICY 2012.The flaring of associated gas not only destroys valuable energy resources worldwide, but also emits huge quantities of greenhouse gases into the atmosphere. To reflect our responsibility for the en-vironment, we are committed to stopping flaring associated gas as part of routine operations. Flaring of it will be discontinued at our existing facilities by 2012, while new plants will be constructed to enable use of the associated gas. As a result, we will play our part as a company dedicated to sustainable production and will also set international standards.We are regarded as a technological leader in Libya when it comes to environmental protection: The gas from the production of crude oil is already completely processed. The quantities of crude oil and associated gas are processed at the central facilities at the Nakhla and As Sarah fields. Following integration of the Hamid field in December 2006, flaring was finally ceased in Libya.

STEAM FLOODING TECHNOLOGY.The crude oil at Wintershall’s Emlichheim site in Germany is especially viscous and hence difficult to extract, which is why the company uses a special technique. Water vapor at a temperature of 300 degrees is forced into the reservoir at high pressure using steam flooding. The crude oil trapped in the rock heats up and becomes less viscous, enabling it to flow through the reservoir to the production wells more easily. Associated gas and natural gas are used to produce the steam. Thanks to the use of tempered and desalinated production water as boiler feed water, fuel consumption and the specific greenhouse gas emissions are reduced.

INSIGHTS.

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WASTE MANAGEMENT.Waste emerges during the exploration and produc-tion of crude oil and natural gas. We try to avoid such waste wherever possible. Unavoidable waste is recycled and disposed in line with regulations. The amount of waste and its environmental impact during recycling and disposal can be significantly influenced by the source of generation. Wintershall disposes of waste in due form and in an environ-mentally friendly way, even where there is a lack of public or private means of disposal. A large part of the waste comes from former drilling mud pits, which Wintershall is now recultivating and rehabilita-ting. It is expected to complete this task by 2013.

WASTE AND WATER MANAGEMENT.

Wietingsmoor in Germany after recultivation

WATER MANAGEMENT.Production and waste water arise in the search for and production of crude oil and natural gas. Pro-duction water is removed from the oil or gas by means of separator systems at the surface. After being processed, the production water is reinjected into the original reservoir. Other waste water is produced in construction and operation of cavern storage facilities, during cleaning work and in treating water. Apart from that, there is also sanitary waste water; however, this only accounts for a relatively small proportion of the total amount of waste water. Sanitary waste water is cleaned and disposed of sensibly at locations where Wintershall is not con-nected to the public sewerage system.

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WATER POLLUTION CONTROL IN STORAGE CONSTRUCTION.Wintershall’s subsidiary WINGAS ensures it meets the needs both of cost-effectiveness and protection of the environment during the construction of a cavern storage facility at jemgum in Germany. Because of its massive underground salt domes, the area around jemgum is particularly well suited to storing natural gas. The cavern storage facilities there are large cylindrical cavities in the salt layers that have been flushed out with water. The gas is then stored securely in the salt formation deep underground. So that caverns can be produced in a salt dome, however, water must first be fed deep into the site and then the brine, i.e. the water con-taining the dissolved rock salt, must be pumped back out of the cavity that has been formed.

The project is conducted subject to strict environ-mental protection requirements. The fresh water used to flush out the caverns is not extracted by suction, but gravity-fed from the Ems so as to avoid any detrimental impact on the river’s fish. A means of minimizing the effects on the ecology was found by discharging the salt water produced informing the caverns into the North Sea at Rysumjust over 40 kilometers away. The original planning and approval envisaged discharge of brine into the Ems at nearby Ditzum.

In discharging the brine into the North Sea, WINGAS strictly adheres to the statutory thresholds, which are controlled by an extensive monitoring program with the supervision and collaboration of the public authorities.

Mud disposal pit

Wietingsmoor

INSIGHTS.RECULTIvATION OF DRILLING MUD PITS.Drilling waste such as drilling fluids and cuttings used to be stored in pits. Today drilling fluids are partially reused or removed in accordance with regulations; drill cuttings are cleaned and then disposed of accordingly.

Wintershall has been cleaning and renaturalizing pits in Bohlsen, Emlichheim, Eydelstedt and Wietings-moor in an environmentally and landscape-friendly way since 2003. The deposited drilling mud is pro-cessed according to its nature and composition, and secured or recycled and disposed of at the relevant plants. The entire process is accompanied by extensive examinations. They include controlling the material to be disposed of, as well as the ground-water and the earth used to restore the areas.

In Bohlsen new breeding and living grounds for a multitude of birds, endangered plants and insects was created by rehabilitation of an area of approxi-mately 24,000 m². After being cleaned up, the areas at the Eydelstedt and Wietingsmoor sites were filled with topsoil and ownership of them handed back with a view to reusing them for agriculture.

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The Wintershall Group invests intensively in finding, producing and transporting crude oil and natural gas. Europe is increasingly dependent on com-modity imports for securing its energy supply. The Wintershall subsidiaries WINGAS and WINGAS TRANSPORT alone are planning to expand the European natural gas infrastructure significantly with investments of around three billion euros by 2015. The investments are mostly earmarked for the expansion of the transport system as well as the construction of new natural gas storage facilities in Europe. The Nord Stream natural gas pipeline through the Baltic Sea and its pipeline links OPAL and NEL are set to make a major contribution to transporting natural gas to Europe in future.

Some of the construction projects extend acrossnational borders and also cross numerous country-side areas. Accomplishing such large projects is a major logistical feat and demands a high degree of expertise when it comes to minimizing their ecologi-cal impact. The goal, as required by law, is to avoid spoiling the natural world and its proper functioning, ensure that it can still be used, and prevent any impairment to the flora and fauna. In addition, the group undertakes many more measures – some of them unusual – to protect the countryside to an extent above and beyond that required by law. Landscaping and nature conservation are important elements at all phases of the projects.

CARE OF THE LANDSCAPE DURING PIPELINE CONSTRUCTION.Planning and building natural gas pipelines demanda large number of tasks and requirements. Especially the construction in terrain with difficult tectonics re-quires experience and know-how. The company’s experience in constructing pipelines enables it to live up to its responsibility for the environment and nature. The planning of a gas pipeline route takes

IN HARMONY WITH THE ENvIRONMENT – CONSTRUCTION PROjECTS.

into account ecologically valuable areas and infra-structure elements, such as transportation routes and built-up areas, as well as the supply security of the region concerned. This means that pipelines do not always take the shortest route, but the one that makes the most sense for the requirements of the population and the environment.

Route planning is geared to nature conservation areas and the ecological conditions of the land-scape. Protective measures, such as pressing pipes below rivers and streams, are defined in close collaboration with the landscape authorities, environ-mental offices and experts for environmental and landscape planning. The company’s building super-visors are supported from an ecological aspect in the implementation of tree protection measures, limiting working strips, and regulating working hours to protect birds’ breeding seasons. The fertile topsoil is removed and stored on the side before construction work begins. When the natural gas pipeline has been buried in the trench and is ready for operation, the trench is refilled with the soil that was previously removed. After work on the route has been completed, the beds of waterways are restored using formerly removed river gravel and their banks are renaturalized. The ground used for the construction site will be recultivated and loosened; trees and bushes will be planted. Meadows and arable land, as well as areas with trees and shrubs, are restored. Around a year after a gas pipeline has been laid, there are virtually no signs that there used to be a construction site. Development and care of the replanted areas continues for at least three years. The company also guarantees after-care for all areas affected by pipeline construction after this period. Eventually, the fact that there is a pipeline can only be recognized by the yellow poles protruding from the ground every 100 to 500 meters.

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The North Sea has been one of the world’s most important hydrocarbon production regions for decades. Wintershall itself has been involved in producing natural gas there since 1965 and ope-rates 26 platforms in its southern part. It also has offshore activities in Argentina and Libya. The ex-pansion of offshore expertise is generally gaining importance in the exploration and production of oil and gas, and the company applies this exper-tise to its activities in other regions of the world. Wintershall Noordzee is based in Rijswijk near The Hague, and is home to the corporate-wide competence center for offshore technology.

RECYCLING OFFSHORE pLATFORMSThe conditions for producing oil and gas at sea are challenging. A production platform must be equipped to cope with the wind, weather, heavy seas, water quality and much, much more. The average service life of a platform is approximately 25 years. After this they are usually disassembled and scrapped. Wintershall has now logically and beneficially combined ecology and economy in this area with the conversion and modernization of two platforms in the Dutch sector of the North Sea.

In addition to natural gas production platform L5-C, E18-A has also been completely converted and modernized so that it can be moved on and produces elsewhere. The conversion of the old platforms saves costs, time and material compared to a completely new construction, as a large part of the installations can be reused.

The predecessor to the E18-A platform, p14-A, was built in 1993, later dismantled at its location in the Dutch sector of the North Sea and towed

to a shipyard in Rotterdam. The platform’s body,with its several decks and a helipad, were com-pletely reconditioned and modernized at a yard in Ridderkerk. Reuse of a large part of the p14-A platform meant that 500 tons of steel and a con-siderable amount of energy – around 2.5 million kWh – were saved. The E18-A was equipped solely with electric generators to minimize emis-sions. A supply line to the adjacent F16-A provides the E18-A with electricity and operating resources and enables data to be transferred. As a result, it was possible to reduce the number of visits to the platform, which meant fewer helicopter flights and ship transports, hence reducing emissions.

MITTELpLATEThe Mittelplate platform in the UNESCO world cultural heritage site of the Wattenmeer in Schleswig-Holstein is the only oil producing facility operated from German waters. New and innovative technical solutions were necessary to develop the crude oil reserves at Mittelplate safely and ecologically. The 70 by 95 meter plat-form was built on the tidelands of the Mittelplate and protected on the sea side by a liquid-tight concrete-and-steel basin with sheet pile walls of eleven meters in height, so that there can be no uncontrolled discharges or seepage from it. Drilling and production operations are protected by sophisticated monitoring and control systems that provide multiple safeguards. Subsurface and surface safety valves can be activated automati-cally, manually and by remote control. Finally, laying a pipeline to the Dieksand land-based station eliminated the need for around 2,000 ship movements to remove the crude oil in double-hulled vessels.

OFFSHORE ENvIRONMENTAL PROTECTION.

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Conceive cultural differences as enrichment. Discover that our shared values outweigh our differences. This is why Wintershall’s international operations not only produce crude oil and natural gas, but also foster contact between people. Sponsoring cultural and social projects is not a luxury for Wintershall, but an expression of its social commitment and active steps to enhance the quality of life.

SOCIAL

RESPONSIBILITY.

RESPONSIBILITY.

The Wintershall Group respects human rights and, as a responsible company, supports observance and promotion of them.

In its economic activity, Wintershall sees itself as an attractive employer, dependable partner and good neighbor that nurtures the development of friendly, open and respectful relationships and mutual under-standing between nations.

Our employees’ working conditions worldwide comply at the minimum with basic international labor standards and the law of the countries where we operate. That includes preventing child and forced labor, upholding the principle of non-discrimi-nation at work and the right to freedom of assembly and association.

HUMAN RIGHTS.

As a company which has operations around theworld and employs more than 2,000 people fromover 40 nations, we experience the enriching po-wer of exchange across cultural borders daily and have promoted it for years at the international level. We feel connected to the regions in which our company operates. In addition to our cultural com-mitment, we also focus on helping people in need. Where we have activities, Wintershall sees itself as a neighbor who helps out when needed.Our employees have lent a helping hand in provi-ding sports clothing and school uniforms for 30 learners in the Cañadón-Asfalto Basin in Southern Patagonia, organizing computers and printers for a neighboring hospital or through supporting a public kitchen run by Caritas in Tierra del Fuego together with our partner Total. In North Africa, Wintershall Libya helped build a school and renovate a nursery school in jakhira. The company also gives support to regional festivals, public institutions and events for the workforce and the population of the region. When the mosque on the premises of Wintershall Libya became too small for the large number of local employees, the com-pany had a new, bigger one built in 2004. Under

the supervision of a Libyan engineer, between 15 and 20 employees of a local construction company worked for five months on the new Omar Ben Al Khatab mosque. The mosque has been officially recognized and registered by the relevant authority. An imam has been appointed, who now calls the faithful to prayer every Friday.In Turkmenistan, Wintershall has helped equip a hospital room to Western standards.With the assistance of Wintershall’s subsidiary WINGAS, a home for blind and visually impaired children in Russia was connected to the public gas network, electricity lines and water pipes were re-novated and the buildings were expanded. Picture books and games specially designed for visually impaired and blind children were also donated. We have also by now established a tradition of not giving Christmas presents to customers and busi-ness partners. Instead, we support charities and humanitarian organizations in Germany and our operating regions. In recent years, for example, we have given to schools, homes for children, and an SOS Children’s village, as well as to voluntary orga-nizations and facilities for promoting the young.

INSIGHTS.

Wintershall is also committed to fundamental values derived from its corporate philosophy: success, innovation, increasing value added, health and en-vironmental protection, safety, intercultural compe-tence, mutual respect, open dialogue and a high level of integrity. These values are defined in guide-lines that are applied in our daily activities. That is because every single Wintershall employee acts as a role model and contributes to the company’s success with his or her actions.

Wintershall engages in many cultural and social projects worldwide in the regions where it operates.

CORPORATE NEIGHBORSHIP.

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HSE Performance

2010

HSE Performance

2010

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HEALTH AND SAFETY

2010

WINTERSHALL / WINGAS CONTRACTORS

2009 2010 2009 2010

Number of employees* 2,077 2,164 - -

Fatal accidents (FAT) 0 0 0 3

Incident with > 1 day lost time (LTI) 3 0 8 6

Lost time incident frequency rate

per one million man hours (LTIF) 0.65 0 1.68 1.01

*Excluding temporary employees; part-time employees pro rata.

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2010 was a success story for Wintershall in terms of the occupational safety of its own employees. There were no lost time injuries (LTIs) among our own employees. However, contractors suffered three fatal injuries (FAT) and six lost time injuries. The severity of the contractor accidents led the company to critically review its safety regulations and derive suitable measures to avoid such incidents in future.

KEY PERFORMANCE INDICATORS OCCUPATIONAL SAFETY.

The statistical data on its own employees’ perfor-mance demonstrates that Wintershall was able to surpass its achievements of the previous year. For own employees the 2010 frequency (LTIF) was zero, the internal targets were therefore met. Despite an increase in the overall incidents witnessed in 2010, the LTIF rate for contractors declined from 1.68 in 2009 to 1.01 in 2010. This has to be attributed to the increase in working hours performed by 42 % in comparison to the 2009 data. Following the severe accidents in 2010, specific prevention measures were derived during the course of the accident investigation. The increase in working hours can be attributed to the construction of the OPAL pipeline and the jemgum storage facility by WINGAS and increased exploration activities in Norway, qatar and Mauretania.

The increase in accidents during contractor activities can be partly attributed to an increased demand for experts in the past years. This has had a nega-tive effect on the qualifications and especially on experience of personnel, which directly influences safety performance. Wintershall is working with its partners to reestablish the high level of training in the oil and gas industry. We will systematically apply the contractor management methods we have developed so that external companies meet the requirements we have set out.

The WINGAS Group has derived specific measures from the investigations into the severe incidents which occurred in 2010. They include an external review of the safety concept, the obligation to submit applications for all activities at construction sites outside the agreed working time, monitoring of compliance by means of helicopter flights over sites, random checks, including at weekends, and training and specially tailored courses for different trades.

The goal in 2011 is to avoid any type of accident. With enhanced standards and even more commit-ment, we are working to continuously improve the high level of safety and our performance.

We are constantly striving to improve the company-wide health, safety and environment management system (WINS). This is supported by intensive ex-perience exchange and dialogue between experts from the Operating Companies (OPCOs) and Busi-ness Units (BUs) at Wintershall’s global locations and our involvement in committees of the Interna-tional Association of Oil and Gas Producers (OGP) and the industry association Erdöl- und Erdgas-gewinnung e. v. (WEG).

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SAFETY 2010 AT A GLANCE.

GERMANY: FIRE DRILL AT THE REHDEN NATURAL GAS STORAGE FACILITY.In the fall of 2010, Wintershall invited safety experts to attend a drill for a major incident at the natural gas storage facility in Rehden. During the annual fire drill, around 60 field personnel from Wintershall and BASF plant fire services, as well as local volunteer fire fighters, trained for various scenarios in Rehden. Additionally safety experts from the Gazprom sub-sidiary Gazobezopasnost, from Gazprom export, Achimgaz and Severneftegazprom observed the drill for the first time.

During the exercise, a task was to bring an ignited gas outlet under control at a wellhead. Together with the volunteer fire fighters, the Wintershall plant fire service demonstrated various extinguishing techniques and a personnel rescue maneuver in front of almost a hundred guests. The Ludwigshafen BASF plant fire service’s most modern service ve-hicle, the turbo extinguisher, played a central role in the fire drill. The turbo extinguisher is equipped with two aircraft turbines, and water or foam is fed into their jet wash. Through this, the special vehicle generates a fine mist which prevents flames and escaping gas from spreading. Thus, one hundred percent of water-soluble gases can be washed out of the atmosphere. Up to 8,000 liters of water per minute can be reduced to a fine spray and sprinkled over an area of up to 3,500 square meters from a distance of 150 meters.

Fire drill in Rehden (Germany)

WORLDWIDE: REvIEW OF SAFETY STANDARDS IN OFFSHORE PRODUCTION.The Deepwater Horizon disaster in the Gulf of Mexico had serious consequences for the environment. The impact of the blowout, which was caused by the failure of various safety systems, was also ex-acerbated by the fact that the platform was located in waters that are 1,500 meters in depth, leading to the blowout being considerably more difficult to control. The E&P industry has responded to the event by conducting extensive reviews of the existing safety systems applied in offshore production. An industry-wide working group set up by the Interna-tional Association of Oil & Gas Producers (OGP) reviewed the course of the incident and the under-lying causes. The objective of the review was to reassess the systems currently applied and adapt procedures where required.

Even though Wintershall itself does not operate any deep-sea drilling activities, the findings from investi-gation report were closely monitored. In order to improve safety in drilling operations further, the potential relevance of the courses of events and failed barriers were assessed. In drilling wells and producing hydrocarbons, Wintershall adheres to the very highest standards of environmental pro-tection and safety. At the same time Wintershall is constantly seeking opportunities to improve the safety of existing technologies. A task force was established in 2010 to implement learning points and optimize existing processes further.

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GERMANY: MICROTUNNEL – WORKING IN COM-PRESSED AIR CONDITIONS.The Baltic Sea Pipeline Link (OPAL) will pass below the River Peene via a microtunnel that was drilled in a depth of up to 25 meters. This method was chosen to protect the sensitive countryside and surrounding nature reserve. A tunneling machine with a diameter of three meters was used to drill a tunnel from the entry pit to the exit pit 1,000 meters away. As the machine advanced, 4-meter concrete segments were inserted in the tunnel. At the comple-tion of the tunnel, the pipes for OPAL, which had been welded together beforehand, were drawn in.

The discovery of a granite erratic boulder of around three meters in diameter after 650 meters of drilling resulted in the cutting tools having to be replaced on the drill head at a depth of around 22 meters. The position below groundwater level was a challenge. Due to the prevailing conditions in the subsoil, the tool had to be replaced with the front section of the tunnel pressurized using compressed air. This ensured stability, enabled access and pre-vented an excessive influx of groundwater. Exten-sive sealing work for the tunnel and surface were necessary to make the working area air-tight. The pressure at the drill head was 2.3 bars, equivalent to that when diving at a depth of 20 meters. Con-sequently, special compressed air equipment was needed to ensure safe working conditions and minimize the physical strain and stress. The tech-nicians worked in three shifts, each lasting 2.5 hours; it also took around 3 hours to prepare the workers for the face and another 3 hours to return them to the surface in a compression chamber. The entire work program was supervised by an occupational physician and coordinated by a team of professional divers.

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RUSSIA: STC – WORKING HAND-IN-HAND FOR SAFETY.Over the past few years, the successful collaboration between Wintershall and Gazprom along the entire value creation chain – from the wellhead in Siberia to the customer in Europe – has been expanded systematically to other important areas for both companies. Wintershall and the Gazprom safety experts have been working together regularly since 2008. The goal is to develop the skills and safety know-how of their field personnel when it comes to rectifying damage, improve coordinated interaction between them and test new protective equipment and devices. Following joint safety drills in Astrakhan, Russia, and in Rehden, Germany, further projects are planned for 2011.

LIBYA: vEHICLE TRACKING SYSTEM FOR THE DESERT.Under challenging climatic conditions Wintershall produces oil in Libya. In 2010, Wintershall Libya equipped its vehicle fleet and an aircraft with a satellite-based positioning system to enable rapid localization of vehicles in the desert, where full coverage by mobile communications and vHF radio is not possible. The vehicle tracking system enables vehicles to be tracked down quickly and easily, even in remote areas, and can navigate teams to their location if need be. It can be operated from any-where in the world.

NORWAY: ADAPTING TO GROWTH.Wintershall is one of the biggest licensees in Norway, holding more than 40 licenses and over 20 operator-ships. The company plans to invest more than one billion euros in this region by 2015 and has discovered highly promising reserves off the Norwegian coast. In 2010, Wintershall Norge and its consortium partners conducted numerous audits of their contractors and drilling rig operators to ensure compliance with the HSE standards. Areas such as health and safety management, environmental protection, mainte-nance and repair and emergency management were audited.

Due to the continuous expansion of its activities in Norway, Wintershall Norge also pressed ahead with adapting the existing management system to changing conditions. One project team is developing a business management system integrating the HSE quality management system. Both employees and contractors are to be given access to the web-based system.

Exploration in Norway

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Keeping healthy is not only a question of ensu-ring that operating facilities are technically safe. Health consciousness, and the will of each and every one of us to promote health and safety and to communicate this issue, is of crucial importance. Wintershall therefore believes it is vital to give its employees up-to-date information on important health concerns. Wintershall staged a campaign under the slogan “avoid bowel cancer” in 2010. It was specifically aimed at providing information on this form of cancer and measures to prevent it. Specialist doctors and nutritionists explained the illness and ways it might be prevented. Around two hundred employees took part in free early screening at the headquarters in Kassel.

Wintershall offers its employees regular vaccination against influenza – a service that was also taken up by many in 2010. In addition, company physicians provide employees assigned abroad with intensive

HEALTH PROTECTION 2010 AT A GLANCE.health advice and services before they travel. That includes health information on the country they are traveling to, as well as administering the vaccina-tions required there.

An emergency can strike anybody. The persons affected often only have a chance of survival if immediate measures are put into effect. Above all, it is vital to know what to do in emergencies. That is why Wintershall gives its employees the oppor-tunity to take part in first-aid courses. Wintershall and WINGAS also encourage staff to take part in courses for company first aiders held by the German Red Cross. The company registers the employees for courses and also assumes the costs.

Donating blood can also save life. In 2010, two blood donation drives were organized at the head-quarters in Kassel and almost 100 employees took part in them.

As in 2009, no employee of Wintershall suffered from an occupational disease in 2010. Together with HSE experts, company physicians at the individual locations and Business Units analyze working areas in order to minimize the risks to employees’ health in their activities. The working conditions in exploration, produc-tion and administration are of a very high standard. A total of 53 plant inspections to check standards were conducted. Beside this, numerous workplace inspections were performed by the management according to the requirements of the HSE Management System.

In order to ensure that emergency first aid can be administered, there are 557 first aiders who hold a nationally recognized certificate in first aid at the Wintershall Group’s locations.

501 medical examinations relating to prevention or early screening for work-related diseases and to prepare staff for travels abroad were conducted worldwide in 2010.

KEY PERFORMANCE INDICATORS HEALTH PROTECTION.

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ENvIRONMENTAL PROTECTION

2010

As a wholly-owned subsidiary of BASF SE, Wintershall is committed to the Responsible Care Initiative. In accordance with BASF’s Responsible Care Reporting Guidelines, environmental emissions relating to the production of crude oil and natural gas are reported as a ratio of Wintershall’s participating interest in the consortium in question. As a member of the International Association of Oil & Gas Producers (OGP), Wintershall has reported its environmental emissions in exploration and production as part of the OGP’s “Environmental Performance in the E&P Industry” report since 2006.

ENERGY.We use electrical energy to produce, process and transport crude oil and natural gas, for example to drive pumps and compressors, as well as thermal energy in the form of steam to produce oil. Depending on the location of our production sites relative to the supply networks, we obtain electricity from the public grid or produce it ourselves at remote locations.

In 2010 we used a total of 977,742 MWh in electrical energy, an additional 4,260 Mio. MWh energy for production processes and 511,514 tonnes of steam for our processes.

The use and generation of energy are subject to continuous improvement regarding efficient energy use. Examples are the commissioning of a highly efficient combined heat and power generation (CHP) plant at our Emlichheim location in Germany and installation of a system to enable use of exhaust heat at a gas turbine generator plant in Nakhla in Libya. In addition, Wintershall is testing generation of wind and solar power in a pilot project in the Libyan Desert with the aim of obtaining an energy-efficient electricity supply for remote facilities.

KEY PERFORMANCE INDICATORS ENvIRONMENTAL PROTECTION.

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source oF co² emissions co² emissions 2009 (t) co² emissions 2010 (t)

Production processes 1,507,838 828,579

Indirect (import/export of electricity/steam) 46,814 79,715

Direct (electricity and steam production) 123,079 465,135

source of ch4 emissions ch4 emissions in (t) 2009 ch4 emissions in (t) 2010

Production, undifferentiated 5,940 3,318

The reduction in greenhouse gas emissions is mainly attributable to rigorous measures to improve energy efficiency, such as commissioning of a CHP plant to produce electricity at Emlichheim, lower emissions in the Netherlands and further implementation of the No Flaring Policy. Of the produced associated gas 95 % is used to the date.

FOR AN ENvIRONMENTALLY FRIENDLY FUTURE: NATURAL GAS.Natural gas stands out among fossil fuels on account of its high energy efficiency and favorable environ-mental properties. When natural gas is burned, it gives off mainly CO² and water vapor. Sulfur and nitrogen are found only in low concentrations. Far fewer greenhouse gases and dust particles are emitted compared to other fossil fuels.

During transportation process from the production field to the customer, natural gas sometimes travels several thousand kilometers through pipelines. The gas has to be compressed at regular intervals in com-pressor stations in order to compensate for the pressure loss caused by friction at the interior pipe wall. Electric, gas and steam turbines are used to drive the compressors. virtually sulfur-free natural gas is used as fuel for the gas turbines.

GREENHOUSE GAS EMISSIONS.Emissions released into the air are regularly controlled and recorded in accordance with statutory stipulations and our own standards. Apart from greenhouse gas emissions, we also ascertain emissions of air pollutants. They include inorganic gases such as carbon monoxide (CO), nitrogen dioxide (as NO²) and sulfur dioxide (as SO²). Apart from carbon dioxide (CO²), nitrous oxide (NOx) and methane (CH4), no other greenhouse gases are emitted by Wintershall.

Wintershall was able to cut greenhouse gas emissions last year by 11 percent compared with 2009. Production operations at Wintershall and WINGAS accounted for total emissions of 1.37 million tonnes of CO² (2009: 1.67 million) and 3,318 tonnes of CH4 (2009: 5,940) in 2010. Relative to Wintershall’s production of crude oil, natural gas and condensate, the specific emission is 0.08 tonnes of CO²/toe (2009: 0.08). Methane losses in gas production in 2010 were around 0.024 percent of the total quantity of natural gas produced.

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CO²-EMISSIONS TRADING IN GERMANY.In 2010, WINGAS TRANSPORT’s natural gas compressor stations in Mallnow, Olbernhau, Rückersdorf, Eischleben, Reckrod, Lippe and Haiming, WINGAS’ natural gas storage facility in Rehden and Wintershall’s CHP and steam flooding plants in Emlichheim as well as two Wintershall platforms in the Netherlands were required to participate in the emissions trading scheme. In 2010, the German Emissions Trading Agency (DEHSt) allotted our plants 744,624 EU allowances (EUA/a). Our German plants that are required to trade emissions emitted a total of 447,628 tonnes of CO² in 2010.

Wintershall is currently preparing for the 3rd emissions trading period from 2013 to 2020. It is necessary to reapply for the EU allowances for this period. In addition, allowances for the OPAL natural gas transfer station, which is currently under construction in Lubmin, and the new OPAL gas compressor station at Radeland must be applied for from the Emissions Trading Agency.

EMISSIONS OF OTHER SUBSTANCES. Fossil sources of energy, such as natural gas, heating oil or diesel, which emit various substances into the air during their thermal conversion, are used in some cases for power generation and production at our locations. Emissions of inorganic substances fell by 1,621 tonnes in 2010. Measures to increase energy efficiency, improved utilization of associated gas and lower energy requirements are among the reasons for this.

inorgAnic substAnces emissions 2009 (t) emissions 2010 (t)

Total inorganic substances 4,586 2,965

Carbon monoxide (CO) 2,005 1,033

Nitrogen oxides (NOx) as NO² 2,276 1,678

Sulfur oxides (SO²+SO³) as SO² 305 254

Organic substances

Non-methane volatile organic compounds (NMvOC) 2,375 2,015

Other substances

Particulate matter 20 30

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WASTE MANAGEMENT.Waste is classified, stored, handled, transported and disposed of in accordance with the applicable legislation of the country in question. In this respect Wintershall follows international and own standards. Waste is classified into the categories “hazardous waste” and “non-hazardous waste” according to EU regulations.

In 2010 Wintershall incurred 61,268 tonnes of waste (2009: 185,095). 29,505 tonnes were hazardous waste (2009: 150,122) and 31,763 tonnes non-hazardous waste (2009: 34,973).

83 % of the waste was disposed of at approved dumps. Around 8 % was recycled or subjected to thermal recovery, approximately 4 % was disposed of in waste incinerators and 5 % was disposed ofproperly in other ways. The volume of waste de-clined in comparison to the previous year due to completion of the recultivation at the used drilling mud pit at Wietingsmoor.

WATER MANAGEMENT.A total of 9.5 million cubic meters of water were used in 2010 (2009: 9.8 million), most of which – 8.5 million m³ (2009: 9.6 million) – was accounted for by production water. Some 6.55 million cubic meters of production waster were reinjected into the reser-voirs after being separated from the crude oil and natural gas at the surface. Production water from our offshore platforms totaled 1.97 million m³ and, after being cleaned, was discharged into the sea in compliance with the statutory threshold limits.

There were also 152,210 cubic meters of sanitary waste water and 758,322 cubic meters of other waste water. A total of 501,332 m³ was fed to waste water treatment facilities.

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ENvIRONMENTAL PROTECTION 2010 AT A GLANCE.WINGAS: COMPENSATION FOR OPAL.As compensation for land-use through construction of the Baltic Sea Pipeline Link (OPAL), a multi million euro sum is being invested to expand, maintain and care for areas of ecological value. In Brandenburg alone, some 280 hectares have been converted into semi-natural biotopes, including reforestation of an area of just under 90 hectares. The diversity of heathlands is to be fostered over around 40 hectares, while a further 40 hectares will be turned into forest monocultures. In addition, hedges and tree rows will be planted, wetland biotopes created and the renaturation of watercourses supported.

WINGAS SOMETIMES TAKES A DETOUR IN CONSTRUCTING PIPELINES.In order to protect an oak at least 200 years old and with a diameter of 1.6 meters that was in the planned path of OPAL, the gas pipeline was diverted around the tree and the adjacent small pond.

WINGAS: ECO GAS WITH A POSITIvE CO² BALANCE.Since October 2010, Wintershall’s subsidiary WINGAS has been offering eco gas, i.e. CO²-neutral natural gas. As a result, customers can completely offset the greenhouse gases emitted during the burning process. The emissions are compensated by CO² reductions in climate protection projects. The projects are chosen in accordance with strict international quality criteria, such as those of the Gold Standard. These are accepted by environmental organizations like the WWF. The certificates, which are acknowledged and inspected by independent bodies such as the UN Climate Secretariat in Bonn, are purchased by WINGAS and then taken off the market and deleted. The emission-reducing processes are regularly monitored by recognized organizations such as Germany’s technical inspection association TÜv.

WINGAS: BIOGAS IN THE PORTFOLIO.WINGAS’ eco gas portfolio is also complemented by biogas. WINGAS cooperates with farmers who supply the company with biogas under long-term contracts. Mixing in biogas can further improve natural gas’ excellent CO² values. In accordance with the Federal German Government’s targets, by 2020, six billion cubic meters of biogas are to be fed into the German natural gas pipeline network each year.

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NETHERLANDS: WINTERSHALL NOORDzEE CERTIFIED TO ISO 14001.In june 2010, Wintershall Noordzee’s HSE manage-ment system was recertified in accordance with the international environmental standard ISO 14001 for the third time after 2005 and 2007. This requires the company to have a defined environmental po-licy, environmental objectives and a management system that helps achieve the objectives. These criteria are met by Wintershall Noordzee with itssystem. This is geared toward constant control and improvement of the company’s environmental balance.

LIBYA: ABSORBENT TO HELP SAvE WATER.The company has planted over a hundred palms and mango, orange and other citrus trees for test purposes in the Nakhla treatment facility in the middle of the Sahara as part of testing the ab-sorbent Luquasorb from BASF. If the test goes well, the absorbent will be passed on to the local settlements in the area, so that they can use it to reduce their agricultural water consumption. Four kilograms of absorbent are mixed with sand per palm and incorporated in the root area. The absorbent sucks up the water into a gel to prevent it from seeping away or evaporating quickly. A new water treatment plant is also being built. This cleaned water will then be used to water the plants and trees.

LIBYA: POWER FROM SUN AND WIND ENERGY WITH CRUDE OIL PRODUCTION.A further model project in Libya, which has been running since early 2010, will examine whether in-stallations outside the central production facilities, such as camps, measuring points and pumps, can be independently supplied with power from sun and wind energy. Under desert conditions the power generated from wind in the project is compared to the output of a photovoltaic system. The effects are not limited to savings in fossil fuel consumption – greenhouse gas emissions are also reduced.

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qATAR: SAFETY DRILL AND INFORMATION EvENT HELD.In 2010, an initial exploration well was drilled in the Khuff formation in the western part of exploration block 4N in qatar. Extensive safety measures were taken in advance to avoid oil spills. As protection, Wintershall has concluded service agreements in qatar with a specialist emergency organization that keeps safety equipment available on an escort ship stationed alongside the well. The drillship’s crew practiced using the equipment in an emergency exercise. Wintershall is also involved in block 3 in qatar. Following the first 3D seismic investigations in 2010, exploration wells are planned in the coming years. Before the seismic campaign, Wintershall’s contractor Western Geco held an information event for local fishers in order to avoid disruptions for all parties involved.

RUSSIA: GREEN OFFICE CAMPAIGN.It is only now that Russians are slowly becoming aware about environmental protection and resourceconservation. Wintershall Russia therefore initiated an environmental protection campaign for employees at its office in Moscow. In addition to an evaluation of the office building’s environmental compatibility, the Green Office Campaign also focused on show-ing employees small but effective ways with which they can make a personal contribution to environ-mental protection and resource conservation. Many employees also took part in a campaign to clean the banks of the Moskva River in their spare time.

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OUTLOOK.

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SCHIzOPHYLLAN – A SMALL FUNGUS WITH A BIG IMPACT.The production of crude oil and natural gas is no longer conceivable without modern and highly-specialized technology. And yet the best methods often come from nature itself, as is the case with the largest research project that the German crude oil and natural gas producer Wintershall is currently conducting together with BASF. A fungus is in its focus – for one simple reason: When it consumes oxygen and starch, Schizophyllum commune – as the fungus is called – generates a biopolymer, a 100 % biological thickening agent.

This polymer can be used for oil production: The gelatin-like substance thickens the water which is injected into the reservoir to enhance production. The water can force more oil out of the reservoir because it increases viscosity. This technique can raise the recovery rate from a reservoir significantly. Even more, it does so in an environmentally friendly way because the biopolymer is fully biodegradable.

START OF CONSTRUCTION OF NEL.Work on building NEL, the North European Natural Gas Pipeline, got up and running in 2011. 440 km in length, it is one of Germany’s largest pipeline projects and demands extreme precision on the part of the engineers planning it: Its route takes into account the factors natural conservation, geo-graphy, safety and cost-effectiveness. All this is underpinned by sophisticated technology and a planning process that includes all agencies and organizations representing public interests. The pipeline is scheduled for completion by fall 2012.

NEWS.

ExPLORATION OF SHALE GAS DEPOSITS.Germany has valuable undeveloped gas deposits, for example in the form of shale gas. Work to quan-tify natural gas resources in such unconventional reservoirs is still in its early stages. The German Federal Institute for Geosciences and Raw Materials (BGR) is currently investigating the overall potential for domestic shale gas production on behalf of the German Federal Ministry of Economics.

Wintershall is also involved in the scientific evalua-tions and in August 2011 was granted permission by the mining authorities to carry out geological tests in two fields. Wintershall’s “Rheinland” and “Ruhr” concessions cover an area of 3,900 km² and stretch from the German/Dutch border in the west as far as the Sauerland region in the east.

Wintershall’s activities in the next three years will be confined solely to preliminary geological surveys to assess the resource potential of possible uncon-ventional reservoirs in these areas. Deep drilling and fracing operations are not planned. The scien-tific work program in North-Rhine Westphalia inclu-des special rock investigations aimed at providing information about the gas content of the rock at greater depths.

We will be focusing on shale horizons which, in selected locations, are already close to the surface, thus making it easy to carry out geological tests. Shallow core holes of up to 200 meters under the surface which provide rock samples for closer ge-ological examination may also be drilled and must be applied for individually.

Wintershall does not currently produce shale gas either at its international sites or in Germany. The results of the preliminary investigations must be carefully evaluated before any shale gas deposits in Germany can be exploited – needless to say under the precondition that shale gas production would make economic sense and would not cause undue damage to the environment. That is because there is no hard and fast answer to this question at present.

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ENvIRONMENTAL DAY 2011.To mark the United Nations World Environmental Day, Wintershall is also launching a company-wide campaign to promote environmental protection and increase ecological awareness. The company will provide information on its environmental pro-tection activities at the Wintershall Environmental Day 2011. It will also show how every single one of us can help protect the ecology by small measures at work and in everyday life. Outstanding projects from Wintershall’s global locations will be showcased in an exhibition. International experts will present environmental protection measures in the oil and gas industry in a program of talks. Focal issues will be production of shale gas and construction of the Nord Stream Baltic Sea Pipeline.

HEALTH CAMPAIGN 2011.Skin protection is the theme of Wintershall’s Health Campaign 2011. Since skin diseases are one of the most widely spread occupational illnesses, the campaign will provide information on related risk factors and valuable tips on preventing such diseases. The emphasis is on work-related skin diseases, skin and sun protection and early detection of skin cancer. Within the campaign Wintershall offers free skin cancer screening for employees.

STC – HSE ExPERTS MEET ON SAKHALIN.

In 2011, HSE experts from Wintershall will meet with Gazprom’s safety and rescue service on Sakhalin in Eastern Siberia to share their experiences and discuss the latest technologies and methods for rectifying damage. Gazprom has built Russia’s first liquefied natural gas plant on the island in order to supply countries in the Far East. The challenging climatic conditions and sensitive ecosystem demand special protective measures in the area of health, safety and environment.

ACTION DAYS.

OUTLOOK LIBYA.Wintershall is monitoring the developments in Libya with great concern. The company closed down pro-duction in the desert and shut in the wells securely at the end of February 2011 for safety reasons. No more oil has been produced there since then. All inter-national employees were flown out at the same time. 368 local employees remained in the country, some of whom are also supervising and monitoring the operating facilities. Before that, Wintershall had pro-duced around 100,000 barrels of oil a day in Libya.

It is currently difficult to assess how the situation in Libya will develop. Wintershall is taking care of itsLibyan employees on site as best it can. At present it is not possible to foresee whether, when and how oil production in Libya can be recommenced. Wintershall’s commitment in Libya is long-term and sustainable – and one to which the company is firmly dedicated.

Wintershall is supporting the International Red Cross (IRC) and Red Crescent in their work in Libya with100,000 euros of immediate aid. The donations will be used specifically to help people in Libya and Tunisia. In addition, a fundraising campaign for em-ployees was initiated and Wintershall doubles every euro donated.

Wintershall has been active in exploration and pro-duction in Libya, one of Africa’s biggest oil producers, since 1958. More than 2 billion US dollars have been invested in the country since then, and more than 150 wells have been drilled. Wintershall currently operates eight onshore oil fields in concessions 96 and 97 in the Libyan Desert. The facilities are approximately 1,000 km southeast of Tripoli.

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HSE IN FIGURES.

*Excluding temporary employees; part-time employees pro rata.

wintershAll perFormAnce unit 2010 2009Sales to third parties mil. € 10,791 11,356• Exploration & Production mil. € 3,819 3,846• Natural Gas Trading mil. € 6,972 7,509Profit from operating companies (EBIT) mil. € 2,334 2,289• Exploration & Production mil. € 1,918 1,781• Natural Gas Trading mil. € 416 508 occupAtionAl sAFety unit 2010 2009Number of employees* 2,164 2,077Own employees • Fatalities (FAT) 0 0• Incident with > 1 day lost time (LTI) 0 3• Lost time incident frequency rate per one million man hours (LTIF) 0 0.65Contractors • Fatalities (FAT) 3 0• Incident with > 1 day lost time (LTI) 6 8• Lost time incident frequency rate per one million man hours (LTIF) 1.01 1.68 LTIF total (own employees and contractors) 0.67 1.17 occupAtionAl heAlth unit 2010 2009Occupational disease own employees 0 0First aiders Wintershall/WINGAS 557 -Occupational medical check ups 501 - environment unit 2010 2009Energy consumption (total)(general and production process) mil. MWh 5,238 5,933 • General MWh 977,742 140,929• Production process mil. MWh 4,260 5,792Greenhouse gas emissions • CO² mil. t 1.37 1.67• CH4 t 3,318 5,940Emissions of inorganic substances t 2,965 4,586Emissions trading • Received emission allowances EUA/a 744,624 730,385• Emissions from facilities regulated under emissions trading scheme t 447,628 493,546Waste disposal t 61,268 185,095Water turnover (incl. production water) mil. m3 9.5 9.8

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KASSEL HEAD OFFICE Contact: +49 561 301-1757hse@wintershall.com

Klaus jantosEnvironmental Expert

Guido Schnieders Corporate HSE Manager

Georgina WienHSE Manager WINGAS

Malalay Osmani HSE Expert

jörn Kahle HSE Expert

Lars Winkels HSE Manager

CONTACT PERSONS.

Responsible for the contentWintershall Holding GmbHFriedrich-Ebert-Straße 160 34119 Kassel, Germany Tel.: +49 561 301-0Fax: +49 561 301-1702

Concept, Designand TypesettingDamm & Bierbaum GmbH, Frankfurt am Main

LithographyORT, Frankfurt am Main

GERMANY (WIDE)Dr. Michael BätcherHSE Manager

NETHERLANDS (WINz)Onno Spinder HSE & Permitting Manager

ARGENTINA (WIAR)Andres Wertheimer Human Resources & Administration Manager

RUSSIA (WIRF)Nikolay PopovHSE Manager

NORWAY (WINO)janne LeaHSEq Manager

qATAR (WIqA)Axel BarenscheeHSE Manager

HSE IN FIGURES.