Interra Resources : Sustainability Report 2021

Table of Contents

• 1. Highlights ......................................................................................................................................... 1

  • 1.1 Corporate Profile ...................................................................................................................... 1

  • 1.2 Scope of Sustainability Report ................................................................................................. 1

  • 1.3 Restatements ........................................................................................................................... 1

  • 1.4 Sustainability contact ............................................................................................................... 1

  • 1.5 Message to Stakeholders ........................................................................................................ 2

• 2. Our Approach to Sustainability ...................................................................................................... 3

  • 2.1 Sustainability Organisational Structure .................................................................................... 3

  • 2.2 Sustainability Strategy ............................................................................................................. 4

  • 2.3 Consulting Our Stakeholders ................................................................................................... 5

  • 2.4 Sustainability Materiality .......................................................................................................... 6

• 3. Our Performance .............................................................................................................................. 7

  • 3.1 How We Measure Our Performance ........................................................................................ 7

  • 3.2 Sustainable Development ........................................................................................................ 8

  • 3.3 Environmental Stewardship ................................................................................................... 10

  • 3.4 Health and Safety ................................................................................................................... 12

  • 3.5 Community ............................................................................................................................. 15

Appendix A: Sustainability Scorecard ............................................................................................... 16

Appendix B: GRI Content Index .......................................................................................................... 17

1. Highlights

1.1 Corporate Profile

Interra Resources Limited ('Interra' or the 'Company'), together with its subsidiaries (the 'Group'), are engaged in the business of petroleum exploration and production (E&P). Our E&P activities include petroleum production, field development and exploration. We are positioning ourselves to become a leading regional independent producer of petroleum.

Since our inception, we have grown organically by developing our existing assets as well as through disciplined acquisitions by seeking attractive resource opportunities across Southeast Asia. Our portfolio of production, development and exploration assets comprises three petroleum contract areas in Indonesia and Myanmar.

Interra is listed on the Main Board of the Singapore Exchange.

1.2 Scope of Sustainability Report

The scope of the report dated 25 March 2022 covers information on material sustainability aspects of Interra, namely the Group's significant joint venture entity in Myanmar, Goldpetrol Joint Operating Company Inc. (Goldpetrol), from 1 January 2021 to 31 December 2021 unless otherwise specified. This should sufficiently address stakeholders' concerns in relation to sustainability issues arising from the major business operations of the Group.

Interra owns 60% of Goldpetrol, which operates the Chauk and Yenangyaung oil fields in central Myanmar, under two Improved Petroleum Recovery Contracts (IPRCs) with the Myanma Oil and Gas Enterprise (MOGE). Interra manages the operatorship of both oil fields jointly with a joint-venture partner, China ZhenHua Oil Co., Ltd (ZhenHua Oil). The oil fields cover a total area of approximately 1,800 km2 and are located along the Ayeyarwaddy River, about 580 km north of Yangon.

During financial year under review, the combined gross production for both oil fields was 587,060 barrels of oil (BO), comprising 100% of the total crude oil production by the Group.

This report is prepared in accordance with the Global Reporting Initiative (GRI) Standards: Core Option as it provides a set of an extensive framework that is widely accepted as a global standard for sustainability reporting. It also considers the Sustainability Reporting Guide in Practice Note 7.6 of the Singapore Exchange Securities Trading Limited (SGX-ST) Listing Manual. In preparing our report, we applied the GRI's principles for defining report content and report quality by considering the Group's activities, impacts and substantive expectations and interests of its stakeholders.

The data and information provided within the report have not been verified by an independent third party. We have relied on internal data monitoring and verification to ensure accuracy.

1.3 Restatements

No restatements were made from the previous report.

1.4 Sustainability contact

We welcome feedback on our sustainability practices and reporting atsr@interraresources.com.

1.5 Message to Stakeholders

On behalf of the Board of Directors of Interra Resources Limited, I am pleased to present the Sustainability Report for the financial year ended 31 December 2021 (FY2021)

Developing resources responsibly requires a collective effort. We must continue to operate in a safe and environmentally responsible manner and collaborate with communities in a mutually beneficial way. With more than 20 years of experience in developing Myanmar's crude oil resources and cooperating with the MOGE, Interra's long-term commitment to safe operations, minimised impact on the land, air and water, as well as investment in our communities remains strong.

In the FY2021 sustainability report, we continue to report on the Group's sustainability efforts on Sustainable Development, Environmental Stewardship, Health and Safety, and Community. The sustainability report highlights our business principles and approach, and how we are meeting the demand for energy in an economically, environmentally and socially responsible way. While we strive to make continual progress, there are always opportunities for improvement. We will also continue to track the key commitments for each area of our sustainability strategy in order to ensure that we have a robust sustainability programme in place. Interra will continue to stay responsible, mindful and ethical, while focusing on delivering results thereby positioning the Company for profitable and sustainable growth.

During FY2021, our Myanmar field operations were suspended for a period of two months from February to April 2021 due to civil disobedience movement brought about by the ongoing political developments in Myanmar. We were not able to have continuous and uninterrupted access to our field operations at the Chauk and Yenangyaung fields and as a result, there was no production during that time.

Since then, field operations have resumed and production is being gradually restored. This is a tedious and slow process due to the complex nature and mechanics of re-establishing production from reservoirs that have been shut-in for a period of time. Besides, equipment had to be repaired or refitted and facilities had to be restored. The waterflood projects also had to be restarted individually. At the end of FY2021, workovers and additional perforations in existing wells had resumed to a level similar to that of pre-suspension and waterflood projects had resumed to the extent that the positive effects were beginning to be realised. In the year ahead, we will strive to fully restore well production and bring production level to pre-suspension volumes.

Barring unforeseen circumstances, we are still committed to improve crude oil production progressively over the new contract period ending in 2028. We hope to achieve this in the following year through our drilling efforts combined with effective field operations and production management. Prior to the suspension, the on-going production enhancement by workovers, re-activations and new perforations in existing wells, all aimed at arresting the natural production decline, have been very successful at increasing wellhead production and yielding appreciable gains.

The Board will remain vigilant and assess the risk profile and evaluate the financial impact on the Company. It will also review the earnings prospects and business strategy of the Company, seeking to mitigate the financial and operational exposure. Going forward, we will continue to exercise strict financial discipline through meticulous monitoring and review of the overall operating cost and budget. Our focus will be on curtailing all non-essential expenses and conserving cash.

Lastly, we wish to confirm that the Board has considered sustainability issues as part of its strategic formulation. The Board has determined the material environmental, social and governance (ESG) factors and overseen the management in monitoring these material ESG factors.

On behalf of the Board of Directors

EDWIN SOERYADJAYA Chairman

25 March 2022

2. Our Approach to Sustainability

2.1 Sustainability Organisational Structure

Sustainability is a vital part of our corporate strategy for achieving long-term growth. The values we create for our people, the environment and society at large very much influence our financial performance. In order to better accommodate our sustainability goals and values, we have developed a sustainability organisational structure to move things forward.

The Country Manager, together with the Corporate Social Responsibility (CSR) Coordinator, is charged with organising and coordinating the CSR work of all departments within the subsidiary.

This is an excerpt of the original content. To continue reading it, access the original document here.