WASTE MANAGEMENT AND SITE RESTORATION

Wherever we operate, wastes are carefully managed to avoid contamination of soil, groundwater, freshwater and marine ecosystems. Our approach involves proper handling and interim storage, recycling and re-use where feasible and appropriate final disposal commensurate with the nature of the waste material.

In 2004, Talisman’s waste intensities declined. While we were encouraged by the decrease, waste generation is difficult to predict year-over-year due to the periodic nature of many waste generating events, such as plant turnarounds, well workovers and installation modifications.

Waste Intensity, Alberta Operations

(tons/mmbbl (boe sales + produced water)

North Sea Waste Management Initiatives

The percentage of waste recycled in the UK increased from 2003 to 2004. This is largely due to an increase in personnel awareness and good waste handling practice.

Oil Content of Produced Water Discharged to Sea (ppm)

2004 2003 2002
United Kingdom 21.6 20.4 25.1
Malaysia 16.7 20.8 8.9

Initiatives to reduce the amount of produced water and entrained oil discharged to the sea included produced water re-injection trials and installation of improved oil and water separation equipment. Re-injection efforts focused on reservoirs requiring pressure maintenance for continued efficient recovery of oil and gas, rather than on dedicated disposal wells, to optimize overall energy efficiency.

North Sea operations also tested and gained government approval to use a new produced oilin- water analysis method in 2004 that does not require the use of harmful solvents and is simpler to use. Talisman (UK) is the first North Sea operator to receive government approval to use an alternate methodology.

A transport vehicle radiation monitoring system was installed onshore that receives all wastes from the North Sea offshore platforms in support of radiation detection systems offshore. The system will ensure proper identification and handling of all radiation contaminated wastes coming onshore from offshore platforms.

Reclamation and Contaminated Site Remediation

Approximately 150 inactive wells were abandoned in Canada and five wells were abandoned in the North Sea in 2004. Talisman’s current gross productive well counts in North America and the North Sea are 10,008 and 448, respectively.

In Canada, Talisman continues to assess and remediate soil and groundwater contamination associated with historic drilling and production operations. This includes reclamation of all of our historic earthen flare pits in Western Canada. Total expenditure on contaminated site clean up and well site reclamation was $16 million in 2004.

Innovative approaches to the treatment of contaminated soils and groundwater were tested in Canada in 2004, including the application of simple composting principles for the treatment of diesel-contaminated solids and the application of distillation technology to treat saltcontaminated groundwater.

Talisman’s Diamond Valley Soil Treatment Facility treated and recycled approximately 16,500 tons of contaminated soil in 2004. The facility was subject to regulatory audit in 2004, with no deficiencies noted.