PROJECT PLANNING AND ENVIRONMENTAL PROTECTION

Wherever we operate, we endeavour to understand local environmental sensitivities and plan our activities accordingly. This demands careful attention to environmental issues and impacts in order to minimize the Company’s environmental footprint. Seismic, construction and drilling projects worldwide are supported by environmental planning to identify environmental risks and implement strategies to reduce potential impacts. This may involve baseline environmental studies, formal or informal environmental impact assessments and attendant protection plans, depending on the local environmental setting and sensitivities.

Talisman carefully plans all construction projects and we employ several routine practices to reduce environmental impact. Onshore, these include minimizing the size of areas to be cleared or otherwise disturbed, salvaging topsoil for eventual use in site reclamation and properly controlling runoff and erosion. Efforts are made to avoid sensitive environmental features through routing and schedule adjustments and the use of directional drilling techniques. In some cases, wells can be drilled from common pads to minimize the environmental footprint in a given area and most pipeline stream crossings are drilled or bored. To assist in our monitoring efforts, environmental inspectors are hired to guide work in sensitive locations.

Spill Frequency
(number/mmbbl (boe sales + produced water)

2004 2003 2002
North America 1.19 1.01 0.99
United Kingdom 0.15 0.17 0.17
Malaysia - 0.31 0.14

Environmental Impact Assessments

Formal environmental impact assessments and associated stakeholder consultations were completed during 2004 in support of planned projects in the US, Trinidad, the North Sea and Malaysia. Talisman also completed 28 screening-level environmental assessments in the UK in support of various offshore activities.

Canada

In 2004, Talisman began tracking potable water diversions from its Alberta operations. Total potable water use, as reported under our licenses or approvals for 2004 was 7,204,229 barrels.

Management of access and wildlife concerns remains a key component of project planning for ongoing deep gas exploration and development activity in the Rocky Mountain Foothills of Western Canada. As such, Talisman invested $110,000 in environmental research funding in Canada relating to coldwater fisheries, caribou, grizzly bears and the growth of native plants for use in site reclamation. Talisman also continued its support of the Alberta Ecotrust Foundation, which provides financial support for grassroots environmental projects by communities and non-profit organizations across Alberta.

United Kingdom

In the UK, Talisman supported environmental research related to on-going bird population monitoring in the Inner Moray Firth, an environmental newsletter for school children, an organization dedicated to native woodlands conservation and a University of Aberdeen dolphin study.

Talisman (UK) supported environmental research related to ongoing bird population monitoring in the Inner Moray Firth, an environmental newsletter for school children, native woodlands conservation and a University of Aberdeen dolphin study.

International

Talisman subsidiaries supported an environmental research project regarding the development and diversity of Mangroves Delta in the Tok Bali Area and Kuala Besut area of Northern Terengganu, Malaysia through the College University of Science and Technology Malaysia. Research focused on the distribution and variability of mangrove vegetation in the Delta area. A rehabilitation and replanting program will be proposed to the State Government and the State Forestry Department to help ease development pressures.

Other environmental planning and protection activities included:

Spill Response

Talisman’s regional operations maintain spill contingency plans and have access, either directly or through contractual arrangements, to spill containment and cleanup equipment, trained personnel and other key resources.

In 2004, Talisman’s average spill size was down in North America and the UK. There were no spills in Malaysia. The majority of spills in 2004 were caused by equipment failure. Where spills do occur, the root cause is identified, reviewed and communicated internally to ensure learning and reduce the potential for future spills.

A major spill response exercise involving Talisman (UK) operations, key contractors and the UK government was completed in the UK in 2004. Other activity included the development of three new spill contingency plans in support of specific offshore drilling campaigns in the North Sea.

Talisman also began assessing about 1,100 well sites, facilities and pipelines that are located within 100 metres of permanent water bodies in Alberta, to confirm the adequacy of existing spill containment and control measures. Improvements will be made where necessary.


School children flock to Greenwing Program

Though the School Lake Greenwing Adopt-a-Class Program was launched in June 2004, the partnership between Ducks Unlimited Canada and Talisman’s Edson Gas Plant was three years in the making.

The Greenwing Adopt-a-Class Program provides local school children with a hands-on opportunity to learn about wetland and wildlife conservation at School Lake, a 40- acre lake about one kilometre from Talisman’s Edson plant. Talisman not only adopted classrooms but also provided physical infrastructure such as the land, a dock and trails needed to allow for a hands-on learning process to take place.

Talisman believes that education is key to preserving Canada’s wetlands for future generations. As such, we’ve expanded the program to our Grande Prairie office as well.

“(Talisman) sought us out and as a result, we worked together as a team with Talisman to complete the pilot project at School Lake. They demonstrated a lot of commitment and should be congratulated,” said Dr. Rick Wishart, Director of Education for Ducks Unlimited Canada.