While all Performance Standards are applicable to this investment, IFCs environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards. If IFCs investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards

PS 1 – Assessment and Management of Environmental and Social Risks and Impacts
PS 2 - Labor and working conditions
PS 3 - Resource Efficiency and Pollution Prevention
PS 4 – Community Health, Safety and Security
PS 6 – Biodiversity Conservation and Sustainable Management of Living Natural Resources
PS 7 – Indigenous Peoples
If IFC’s investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards
While all Performance Standards are applicable to this investment, IFC’s environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the above Performance Standards:

In addition this review also considers the remaining standards, PS5 (Land Acquisition and Involuntary Resettlement) as compensation has been paid for temporary land access but no resettlement or economic displacement has taken place and, PS8 (Cultural Heritage) PetroNova has developed a chance find procedure but to date, PetroNova has not encountered any cultural heritage resources in the project area.

This is a category B project as the impacts related to the establishment of temporary exploration wells and potential additional seismic activities are site-specific, largely reversible and adverse impacts if any, are temporary and can be readily mitigated through the mitigation measures identified in the ESIA.

The Company has an environmental and social team in place with adequate capacity and a solid E&S Policy and management system to address the level of impacts related to the exploration activities to be financed by IFC. The E&S policies and management systems are in line with national legislation, good international industry practice and IFC Performance Standards.

Some of the seismic activities which had already taken place prior to IFC’s involvement were located on the land of Indigenous Peoples. Prior to initiating these seismic activities the Company engaged with the Indigenous Peoples in a process of consultation in line with the Colombian requirements for consultation (Consulta Previa) as well as the principles of Free, Prior, Informed Consent.

In case any of the future exploration activities are located on the land of Indigenous Peoples the Company has committed to engage in a process of Free, Prior and Informed Consent. This will ensure a robust consultation process where potential impacts and adequate mitigation measures are identified and implemented if the Indigenous Peoples agree to the planned activities.

For the three blocks in the Llanos Basin that are not operated by PetroNova, the operator Tecpetrol has a solid E&S management system in place as well as competent staff to manage their operations in line with national legislation and good international industry practices. PetroNova has procedures in place to ensure that Tecpetrol is managing E&S issues adequately on an ongoing basis.

IFC's appraisal considered the environmental and social management planning process and documentation for the project and gaps, if any, between these and IFCs requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and (if applicable) in an agreed Environmental and Social Action Plan (ESAP). Through the implementation of these measures, the project is expected to be designed and operated in accordance with Performance Standards objectives.

Policy – PetroNova has a clearly articulated E&S policy approved by its Board of Directors. This includes, among others, the company management’s commitment to implementation of its integrated health, safety, environment, and quality (HSEQ) management system across its own operations and those of subcontractors; compliance with legal obligations and industry standards; ensuring competent management and technical supervision of health risks, safety and environmental; maintaining appropriate technical skill levels of its employees; applying the principles of continuous improvement and change management to its own performance and to contractors; and engaging with communities in the assessment of environmental impacts early in the process of implementing exploration activities. Tecpetrol, PetroNova’s partner and majority shareholder in the Llanos Basin blocks, also has a clearly articulated corporate E&S policy placing substantial emphasis on aspects related to safety of their operations and the company’s objective to be leaders in accident prevention.

Identification of Risks and Impacts – PetroNova currently follows Colombian environmental licensing procedures which require the preparation of environmental and social assessment and management plans for each phase of oil and gas project development i) seismic exploration, ii) exploratory drilling, and iii) production:

i) Prior to seismic activities occurring, companies are required to prepare an E&S Management Plan (Plan de Manejo Ambiental - PMA) according to pre-defined regulatory terms of reference (ToR). Technical requirements include a preliminary baseline assessment of flora and fauna based on aerial image interpretation, secondary sources of information, and field confirmation surveys as well as municipal level evaluation of social aspects including land use, cultural approaches to conflict management and assessment of impacts on vulnerable groups. On the basis of these surveys a project specific PMA is developed (described in more detail under Management Programs below).

ii) Exploration drilling activities require an Environmental and Social Impact Assessment (ESIA) with a comprehensive analysis of baseline conditions and covering a range of aspects which include, among others: geology; geomorphology; soils; hydrology; water quality; hydrogeology; air quality; noise; terrestrial and aquatic flora and fauna; demography; ethnicity; cultural (including archeological) resources; political organizations; regional development trends; involuntary resettlement (if any); landscape issues; ecological services; effluents; and wastes. The ESIAs for exploration wells are typically developed without knowledge of the exact location of the exploration wells. Therefore the ESIA contains an environmental and social sensitivity zoning of the exploration area, defining potential areas of exclusion, areas of restriction, and areas of intervention. When the locations of the exploration wells are identified additional site specific assessments will be conducted to supplement the ESIA.

iii) Prior to any permanent oil and gas production wells and infrastructure being developed an additional ESIA is required.

PetroNova has completed PMAs for 2D and 3D seismic exploration studies in the PUT 2 Block and for 3D seismic exploration studies in the Tinigua Block. The Company has further developed ESIAs with E&S sensitivity zoning for potential exploration wells in the two areas of the PUT 2 Block known as Canelo Norte and Canelo Nogal. These ESIAs will be completed with site-specific surveys once the exact location of the exploration wells has been identified. The PMAs and ESIAs described above have been disclosed by IFC as part of this ESRS disclosure.

PMAs and detailed ESIAs have been prepared by Tecpetrol for the three exploration blocks in the Llanos Basin.

In the future, PetroNova will revise its assessment procedure to ensure that the scope of ESIAs is consistent with applicable aspects of the IFC Performance Standards specifically addressing habitat classification and mitigation hierarchies as defined in Performance Standard 6 – Biodiversity Conservation and Sustainable Management of Living Natural Resources. The Company has committed to address any gaps between the content of the already developed ESIAs for Canelo Norte and Canelo Nogal and IFC Performance Standards prior to the drilling of exploration wells. Further, the Company has committed to develop all new ESIAs in line with IFC Performance Standards.

Management Programs – PetroNova’s HSEQ management system includes the fundamental elements of planning (documentation, policies, identification of risks and impacts, legal requirements and objectives); implementation (organizational structure, objectives); verification (measurements, audits); and corrective actions (non-conformities, corrective actions and preventive measures). Through a health, safety, and environment (HSE) manual for contractors, the company defines contractors’ roles and responsibilities and addresses a series of specific requirements related, for example, to contractors legal obligations (including compliance with PetroNova’s HSEQ), technical capacity, occupational health and safety (OHS) management plans and procedures, emergency preparedness and response plans, monitoring and reporting requirements. The HSEQ includes an OHS program and emergency preparedness and response plan applicable to PetroNova’s operations and a comprehensive series of environmental and OHS operational control and monitoring procedures.

Tecpetrol, PetroNova’s operating exploration partner in the Llanos Basin blocks, is an experienced oil and gas exploration, production, and transport company and has a comprehensive E&S Management System that is based on corporate standards and incorporates Colombian regulatory requirements. Tecpetrol’s E&S Management System also includes detailed management programs and operational procedures for the selection and management of contractors responsible for the field implementation of E&S procedures.

As described above, the ESMPs are developed on the basis of assessment of baseline conditions, the outcome of the consultation with affected communities; definition of organizational capacity with defined roles and responsibilities; risk analysis matrix; and the preparation of E&S sensitivity zoning maps to identify areas of exclusion for seismic activities (i.e. such as drinking water supplies and water bodies). Additional ESMPs are prepared for exploration drilling and well testing activities. These ESMPs are based upon regulatory obligations for the management of potential impacts identified in the ESIAs, the outcome of the consultation process with affected communities and on PetroNova’s and Tecpetrol’s own management programs which include specific environmental, social, health and safety procedures.

Organizational Capacity and Competency – Both PetroNova and Tecpetrol have hired qualified environmental and social specialists with experience in managing environmental and social impacts. The overall responsibility and authority for implementation of PetroNova and Tecpetrol environmental and social policies and programs are managed by each company’s respective Operations Departments. PetroNova and Tecpetrol own management capacity is complemented by qualified and experienced seismic and drilling subcontractors. The E&S teams of both companies are further supported by qualified E&S consultants who provide assistance with the preparation of ESIAs and ESMPs.

During the project implementation phase, the work of all seismic and drilling contractors is supervised and monitored by PetroNova’s and Tecpetrol’s ESHS management teams which are supported by full time ‘contractor overseers’ (interventores) who report directly to the project owners on contractors’ compliance with contractual and legal requirements. The team of ‘interventores’ includes environmental, OHS, and social specialists. Members of potentially affected communities are in some cases hired as interventores to help ongoing monitoring of aspects of specific concern to local communities. The scope and design of the community monitoring is agreed upon through the consultation process.

Emergency Preparedness and Response – Emergency preparedness and response planning is central to the E&S Policies and Management Programs of both PetroNova and Tecpetrol. PetroNova’s HSEQ Management Program includes procedures for risk identification and rating, analysis of vulnerabilities, organizational capacity such as integration of emergency brigades and emergency committees, and response planning including evacuation. The plan defines aspects related to coordination, alarm systems, evacuation routes, signage, and communications during any emergency. Seismic and drilling service companies are contractually required to develop and implement emergency plans specific to the project activities and in line with PetroNova’s corporate procedures.

Monitoring and Review – PetroNova’s and Tecpetrol’s E&S management programs define the monitoring and review activities of each phase of exploration work. ESMPs developed in conjunction with ESIAs include a standard set of indicators to be monitored during the execution of project activities including, for example, impact and mitigation of flora and fauna (including rescue or restoration activities); hydrological resources (including surface water abstraction, quality of drilling and sanitary effluents, etc); waste management (including types and quantities of solid wastes and their treatment and disposal methods); noise; indicators of implementation of social programs; community consultations; as well as frequency of grievances and response to community concerns.

Operational activities are continually monitored by PetroNova’s and Tecpetrol’s EHS teams and by the aforementioned ‘contractor overseer’ (interventores).

In the Llanos Basin blocks, the results of Tecpetrol’s monitoring of E&S indicators is presented with PetroNova in monthly reports and discussed during the Operational Committee Meetings which take place at least twice a year and when requested by one of the parties. The monthly reports include a summary of recordable and lost time occupational accidents, OHS training indices, stakeholder consultation and a detailed status of environmental licensing. The reports include information about the number of properties affected and the compensation paid to owners for access. Tecpetrol also provides PetroNova with daily drilling reports which include the safety “stop card” indicator of unsafe actions identified by the on-site auditors.

Oil companies in Colombia are required to provide E&S monitoring reports to the Colombian National Hydrocarbons Agency (Agencia Nacional de Hydrocarburos - ANH). These reports summarize the status of compliance with environmental licenses; OHS factors used in the selection of contractors; compliance with environmental and OHS regulations; status of consultation with communities and Indigenous Peoples; and implementation of social programs. ANH also conducts independent audits of the drilling progress which include some E&S aspects. Audits are typically conducted every time there is a new project although they may also occur on a random basis. Technical aspects covered in the ANH audits include OHS; workers’ accommodation conditions (housing, sanitation, etc); waste management; and compliance environmental license conditions, consultation process among others.

Working Conditions and Management of Worker Relationships - PetroNova currently has 36 permanent staff and 6 contractors working as part of the core team. In addition, contractors are recruited to conduct the seismic and exploration well drilling (see description of workers engaged by Third Parties below).

PetroNova has a Human Resources Policy and management system which meets national requirements. Issues such as working conditions, non-discrimination, minimum age, recruitment process, and induction are addressed. Although not formalized yet, PetroNova has a grievance mechanism in place that covers both staff as well as contractors which will be formalized and documented as part of the updated Human Resource Policy which the Company has committed to developing in line with IFC Performance Standards 2 on Labor and Working Conditions.

None of PetroNova’s staff members are currently unionized. However, the Company supports the principles of Freedom of Association which will be made explicit in the updated Human Resource Policy.

Occupational Health and Safety – PetroNova’s and Tecpetrol’s HSEQ Management Programs have very detailed occupational health and safety (OHS) procedures which effectively address the types of risks inherent to oil and gas exploration activities. These programs include specific procedures for aspects such as drilling platform safety; transport vehicle safety; helicopter safety; permit-required confined spaces entry; chemical exposure safety; prevention of fires and explosions; work at heights and fall prevention; permit-required hot work; work with ladders and scaffolds; materials handling; lifting equipment including slings, cranes, and forklifts; and care and use of personal protective equipment (PPE), among others.

PetroNova’s HSEQ Management Programs also include procedures for the identification of anti-personnel landmines. These procedures include description of advance and on-going landmine surveys by trained landmine detection teams of areas selected for exploration activities, training of all contracted and subcontracted workers in the avoidance of suspicious objects and areas not cleared by the survey teams, and coordination with the Colombian Armed Forces who are responsible for the removal of identified landmines.

Workers Engaged by Third Parties - In the contractors’ selection process Petronova and Tecpetrol evaluate contractors’ safety records and OHS management capacity and experience. All seismic and drilling services providers are contractually required to have adequate occupational safety management systems and to provide OHS training to employees.

PetroNova’s E&S Management System includes checklists to document program implementation and monitoring of contractors including, for example, pre-operational safety talks; accident investigations; OHS inspections; lessons learned; contractor performance review; contractor performance improvement plans; and training in the use of PPE.

The E&S Management System also requires contractors to provide adequate working conditions, including adequate facilities for worker’s accommodation and timely payment to national social security schemes as required by national law. The Company will formalize the existing grievance procedures for contractors’ employees as described above.

Water Consumption – The main uses of water in seismic exploration and drilling activities are for drilling mud preparation and sanitary use in worker camps. Water sources for oil and gas operations in Colombia are typically fluvial waters. All water use must be permitted by the authorities.

PetroNova’s exploration blocks are located in humid tropical regions with ample surface water supplies. Water is typically transported from the approved abstraction point to the project site via trucks and hoses. Workers’ accommodation camps are equipped with mobile water treatment plants to provide water for sanitary uses (bottled water is purchased for human consumption). Water for drilling activities does not require pre-treatment. About 85% of the water used in the drilling systems is recycled in the preparation of additional drilling mud while the remaining 15% is discharged as treated effluent.

Liquid Effluents – The main liquid effluents generated in seismic exploration activities consist of sanitary wastewater in temporary workers’ accommodation camps, which are typically treated via septic systems with leachfields as defined by Colombian requirements and described in PetroNova’s HSEQ and the project-specific ESMPs. Wastewater disposal must comply with the Colombian legislation (Decree 1594 of 1984) and additional requirements imposed in the environmental permits. The location and installation of these systems must conform to certain design standards which include minimum separation distances from groundwater and surface water bodies and soil permeability characteristics. Workers’ accommodation camps at drilling sites are required to use portable wastewater treatment plants that meet Colombian standards for reuse (i.e. for dust control of site access roads) and/or discharge.

Drilling activities generate wastewater effluents from the drilling mud solids dewatering process and from spent drilling fluids. PetroNova’s and Tecpetrol’s drilling activities rely exclusively on the use of water-based drilling fluids. Wastewater from the drilling mud solids control and dewatering is treated via decantation to remove solids, monitored to establish Colombian regulatory compliance with heavy metals and other water quality parameters prior to discharge, most often as water for dust control in access roads. Other forms of wastewater discharge must meet regulatory requirements which include consideration of the receiving water use, when the discharge is directed to a surface water body or groundwater (currently no disposals are made into underground water bodies). Spent drilling fluids recovered at the conclusion of the drilling activity are stored and removed by the drilling contractor for subsequent recovery and final treatment in licensed facilities, also as defined in the procedures of PetroNova’s and Tecpetrol’s HSEQs and in the project-specific ESMPs. Used lubricating oils from equipment maintenance and waste oil from greywater grease traps are collected for recycling or final disposal by licensed waste management contractors.

Colombian legislation allows for the discharge of oil well test waters into rivers after proper treatment to meet local regulatory requirements (Decree 1594 of 1984). ESIAs for exploration drilling activities are required to model the potential impacts of wastewater discharges with advance modeling techniques (such as the HEC-RAS model and the QUAL2K model endorsed by the EPA). In the event that well testing activities are conducted concurrent with the exploration phase, PetroNova will ensure that effluents are treated to levels that meet the completion and well work-over fluids guideline values outlined in the IFC Environmental, Health, and Safety (EHS) Guidelines for Onshore Oil and Gas Development (total hydrocarbon content of 10mg/L and pH of 6-9).

Solid Wastes – Non-hazardous solid waste streams in seismic exploration and drilling camp sites mainly consist of organic and inorganic wastes from camp activities (e.g. food wastes; glass, metals, paper, plastic and cardboard packaging materials; etc) and wood from vegetation clearing. PetroNova’s and Tecpetrol’s HSEQ and the ESMPs for the project activities developed to date include detailed solid waste management procedures which include segregation and recycling of wastes and disposal of non-hazardous, non-recyclable, materials at the nearest, permitted, municipal waste facilities.

Special or potentially hazardous solid wastes generated typically include the sludge from wastewater treatment facilities (such as septic tanks, portable toilets and portable wastewater treatment plants), medical wastes, and equipment maintenance wastes (i.e. oily rags, empty oil containers, etc). Based on PetroNova’s and Tecpetrol’s procedures and as defined in the ESMPs, these materials must be collected and disposed of by licensed contractors (identified in the ESMPs) for subsequent treatment or disposal according to Colombian legal requirements. Wastewater sludge (from septic systems or wastewater treatment plants) is disposed of at the nearest municipal wastewater treatment facilities.

Water-based drilling mud solids from Tecpetrol’s exploration drilling activities in the Llanos Basin blocks are currently treated in a solids control and dewatering system. The recovered solid residues are temporarily stored in a lined pit where they are treated with lime and allowed to dry further reduce moisture levels. The solids are analyzed according to the Toxicity Characteristics Leaching Procedure (TCLP, as defined in Colombia’s Hazardous Waste regulations (Decree 4741 of 2005 as well as the US State of Louisiana Administrative Code 29B/99). If the analysis results in non-hazadous classification of these materials, they are deposited in un-lined pits on-site for final disposal. The pits are covered with topsoil and re-vegetated. ESMPs for Tecpetrol’s drilling activities in the Llanos Basin include a requirement for the installation of at least three groundwater monitoring wells at each drilling location to monitor potential contamination of shallow aquifers due to drilling and campsite activities. Groundwater is tested for phenols, total petroleum hydrocarbons (TPH), and conductivity. This type of environmental monitoring is a standard regulatory requirement of all exploration drilling ESMPs and will be included in PetroNova’s future drilling activities.

Hazardous Materials Management – Seismic exploration and drilling activities and campsites store and use potentially hazardous materials such as fuels and lubricants, explosives, and drilling mud additives. All storage and use is defined in specific procedures in PetroNova’s and Tecpetrol’s HSEQs and project-specific ESMPs. Fuels and lubricants are stored in dedicated containers or tanks with secondary containment. ESMPs for seismic and drilling operations include detailed spill contingency plans and procedures to respond to any eventual release, including accidental releases of oil during well testing operations.

Atmospheric Emissions and Greenhouse Gases – Seismic exploration and drilling activities use fuels for helicopters and vehicles and for diesel generators. These sources of emissions are considered temporary and emissions prevention measures consist mainly of maintenance to ensure efficient combustion. Of perhaps greater significance to communities located near seismic activities or drilling sites is the dust from the circulation of transport equipment and vehicles in unpaved access roads. Dust emissions are controlled through the application of treated wastewater from the drilling mud dewatering and from the sanitary and greywater treatment plants.

The most significant potential source of greenhouse gases in PetroNova’s activities may occur during well testing activities if these occur immediately after the drilling phase. Well testing equipment includes gas handling and flaring facilities to manage any release of natural gas.

Infrastructure and Equipment Design and Safety – PetroNova’s and Tecpetrol’s HSEQs include standards for the design and execution of operations including, for example, access restrictions to drilling facilities. Both companies have strict operational requirements and procedures including training for driving safety in public roads. These requirements are extended to contractors.

Hazardous Materials Management and Safety – PetroNova’s and Tecpetrol’s HSEQs include standards for the storage, management, and transport of hazardous materials, including specific requirements for transport of hazardous or potentially hazardous materials on public roads. Although not yet required at this stage of project development, there are also HSEQ procedures applicable to transport of crude oil in tanker trucks during early testing/production stages. During the early testing and production phases, PetroNova will ensure that these procedures are strictly adhered to by subcontractors through closely monitoring aspects such as training of drivers, safety performance records, limits on driver working and rest hours, truck safety and oil spill management procedures.

Ecosystem Services – As evidenced in the ESIAs prepared for the planned exploration drilling in the Canelo Norte and Canelo Nogal prospection areas of the PUT-2 exploration block, the scope of ESIAs in Colombia includes a detailed assessment of ecosystem aspects of socio-economic and cultural importance to local communities regardless of whether they are formally considered as resource dependent or not. The ESIAs include detailed identification of potential sources of potable water, fishing grounds, and flora and fauna of social, economic, medicinal or other interests. The impact analysis protocols classify these types of natural resources as highly sensitive and are restricted to direct drilling activities.

Community Exposure to Disease – PetroNova’s HSEQ management system includes requirements for contractors to manage community exposure to disease. Workers are required to have up to date vaccinations against endemic illnesses (such as yellow fever) and to receive training in prevention of transmission of water-borne, water-based, and vector-borne diseases.

Emergency Preparedness and Response – PetroNova and Tecpetrol have developed contingency plans for the seismic and exploration drilling activities which are shared with the potentially affected communities through the ongoing consultation process. Emergency plans include contingencies to address potential releases of drilling fluids or well testing waters, including the potential release of oil during well testing activities.

Security Personnel – Both the Tinigua block and the PUT2 block are located in areas which historically have had adverse security conditions. Although the situation has improved significantly during recent years there are still sporadic activities posing a potential security risk.

The Company is managing the security situation with the support of a well-respected security advisor and the key approach is managing potential risks through intelligence, prevention and engagement with local communities. The Company does not use the services of private armed security forces but has two agreements ‘Convenios’ for each block with the Colombian armed forces which provide them with peripheral security. These agreements outline that the military forces will respect International Human Rights and Humanitarian Law and the Company commits to provide financial support for training on Human Rights and logistics.

As part of this project, the Company will upgrade their current practices as needed to ensure they operate in accordance with the Voluntary Principles of Security and Human Rights. This will include formalizing the current grievance mechanism ensuring that any concerns related to the military forces raised by community members are presented to the relevant authorities.

This exploration project has a small footprint and the planned limited exploratory drilling operations are of low risk and are minimally invasive. The potential impacts are therefore limited and reversible. The company’s approach is based on avoidance of sensitive areas. Should any of the exploration areas proceed to full production, additional ESIA’s will be developed in line with IFC Performance Standards identifying potential impacts and implementing the mitigation hierarchy.

Protection and Conservation of Biodiversity – There is a two-stage licensing process for seismic studies and exploration drilling activities in Colombia.

1. Seismic exploration; avoidance or minimization of land clearance by making use of areas such as pastures for the location of temporary worker camps and helicopter landing pads and manually clearing small paths for the installation of seismic lines.

2. Exploration drilling: detailed biodiversity assessments and the use of secondary sources of information. These assessments require the identification of any flora and fauna under the International Union for Conservation of Nature (IUCN) categories for conservation; legally protected and special management areas; areas providing ecosystem services to local communities; and sensitive / fragile ecosystems.

The ESIAs conducted as part of the drilling phase licensing process identified the following areas under some type of legal protection status or special designation:

CPO6 Block (Tecpetrol managed block) – Tecpetrol has committed to avoid exploration drilling in an area designated as the Natural Municipal Reserve El Yucao which overlaps with a portion of this exploration block. This is a legally protected area located in an intervened grassland ecosystem (with significant agricultural and livestock activities) near Puerto Gaitan, Meta Department.

Putumayo concession block (PUT-2) – PetroNova has committed to avoid exploration in an area nationally designated as the Amazonia Forest Reserve which overlaps with a portion of the exploration block.

PetroNova’s exploration interest in the Putumayo concession block (Canelo Nogal) also overlaps with a portion of the Mecaya – Sencella Municipal Forest Reserve, which although reported to be an extractive forest, has been categorized by PetroNova as an area of high environmental sensitivity requiring operational restrictions. No decision has yet been taken on whether to site exploration wells in this area.

The ESIAs completed by PetroNova for portions of the Putumayo concession block for the areas of exploration interest Canelo Norte and Canelo Nogal reported four IUCN listed tree species including two in vulnerable (VU) status; one in endangered (EN) status; and one in critical (CR) status. The Canelo Norte ESIA reports that no IUCN listed amphibians, reptiles, or birds were identified in the exploration area. However, 19 IUCN listed mammalian species (12 of which are also listed by CITES) were observed during baseline evaluations. The ESIA for the Canelo Nogal prospection area identified four IUCN listed reptiles; three IUCN listed bird species (of which 26 are CITES-listed); and 25 IUCN listed mammalian species.

PetroNova will assess if there are any existing biodiversity values in the exploration areas that could potentially influence a Critical Habitat (CH) determination and will implement mitigation measures in line with PS6 which emphasizes the mitigation hierarchy.

Indigenous Peoples as defined by Performance Standard 7 are present within the two blocks operated by PetroNova, Tinigua and PUT2 (as described under Stakeholder Engagement).

Due to the nature of this exploration project having a small footprint with temporary and reversible impacts the potential impacts on Indigenous Peoples are limited. As mentioned earlier the location of the exploration wells is still not known and therefore the degree to which Indigenous Peoples will be impacted will only be known at a later stage of the exploration project. The only known impact at this stage is the use of an existing road crossing the territory of Indigenous People Alpa Manga (Canelo Norte exploration area) which has been identified in the ESIA and adequate mitigation measures have been identified in a process of Consulta Previa (Prior Consultation) with the affected community of Indigenous People as per Colombian legislation, which followed a process and achieved objectives that are consistent with Free, Prior and Informed Consent.

There are also Indigenous Peoples located within the blocks operated by Tecpetrol. Through the due-diligence process IFC has established that Tecpetrol’s engagement strategy for Indigenous Peoples is solid, based on Colombian requirements and in line with the principles of informed consultation and participation.

Stakeholder Engagement - PetroNova has engaged in an ongoing participatory consultation process with all communities located within the PUT2 and Tinigua blocks. The description of the stakeholder engagement is divided into two sections, the first covering the consultation process for the seismic activities conducted prior to IFCs investment in the project and the second part focusing on the consultation process as part of the ESIA development for the exploration well activities IFC will be financing.

Consultation for Seismic Activities - In both the Tinigua Block and the PUT2 block, PetroNova consulted with the local authorities as well as the communities through an established process described in the PMA. The objective of the consultation process was to identify the area of direct and indirect influence, provide information (verbal and written) about the scope of the project, and identify the potential impacts and adequate mitigation measures.

In the Tinigua block there are 10 communities with a total population of 602 inhabitants (Argelia, San Carlos, El Progreso, Las Rosas, Salitre, Goviotas, Ghamuza, Comuneros, Mansitas y Candilejas) and in the PUT2 block there are 18 communities with a total population of 1893 inhabitants (Buenos Aires del Mandúr, El Porvenir, Nueva Unión, San Luis, La Isla, Delicias, San Cayetano, Puerto Rosario, Las Villas, El Caraño, El Vergel, Los Almendros, Samaritana, Trojayaco, Villa del Prado, La Gaviotas, La Esmeralda, Bajo Inchiyaco) located within the area of influence of the seismic activities.

For non-indigenous communities the consultation process has been based on national requirements, good international industry practice and has been in line with the principles of Informed Consultation and Participation as per IFC PS1.

During the seismic campaigns both Indigenous Peoples and non-indigenous community members were recruited to monitor that potential impacts are avoided or adequately mitigated as agreed during the consultation process.

For the communities of Indigenous Peoples the consultation process has been based on national requirements, good international industry practice and been in line with the principles of Free, Prior and Informed Consent as per IFC PS7. The Colombian legislation requires that all Indigenous Peoples are consulted prior to any project developments through a well defined consultation process (Consulta Previa). The consultation process involves a broad representation of the Community of Indigenous Peoples, other representatives requested by the Indigenous Peoples (e.g. Defensor del Pueblo and Personeria - Colombian ombudsman functions at national and municipal levels), Company representatives and representatives from the Colombian Ministry of the Interior and Justice. Through the engagement process the Indigenous Peoples have the option to consent to engage in the consultation process and based on the outcome of consultation process and good faith negotiations they can decide to allow the project to move forward or not. The process is documented and meetings where key decisions are taken are overseen by representatives from the Ministry of the Interior and Justice and the relevant ombudsman functions. A full consultation process is required for all new activities located in the lands owned and used by Indigenous Peoples. In the case of this project a process of Consulta Previa will be conducted i) prior to each seismic campaign, ii) prior to the location and drilling of exploration wells, iii) prior to location and development of access roads, camps and other associated facilities, and although not relevant for this project iv) prior to location and drilling of any production wells.

In the Tinigua block one Community of Indigenous People (Candilejas) was identified and recognized by the Ministry of the Interior and Justice through the permitting process. After the Community of Indigenous People was recognized and prior to seismic activities took place they were consulted in line with the Colombian requirements (Consulta Previa). Consisting of 139 inhabitants and originating from the Nasa culture Candilejas has been located in this area for the last 15 years after they were displaced from the northern part of Departamento de Cauca. Through the migration process a large proportion of the Indigenous People lost their traditional language Nasa, which they are in the process of restoring through education and projects to strengthen their culture. The Indigenous People in Candilejas are primarily dependent on hunting and subsistence farming. Infrastructure is poor (travel to the nearest village Uribe) takes about 5 hours on horseback and there is no electricity and poor cell phone coverage. There is a strong wish for improved infrastructure including road connections, which would allow them to sell agricultural produce. The community is led by an elected leader ‘Governador’. The internal decision making process is based on consensus through communal meetings including men and women.

In the PUT2 block two communities of Indigenous People (Villa Catalina - 206 inhabitants) and Alpa Manga - 80 inhabitants) are located in areas overlapping the concession block. During the permitting process an additional community of Indigenous People (Ambiwasi- 70 inhabitants) was identified, recognized and registered by the Colombian Ministry of the Interior and Justice. The three Communities of Indigenous Peoples are descendants from the Inga culture and base their livelihoods on substance agriculture, hunting and gathering. Alpa Manga and Villa Catalina are located near access roads and are well connected with the surrounding communities while Ambiwasi is more isolated. The proficiency in the indigenous language Inga, is about 20% in Villa Catalina and 50% in Alpa Manga. Part of the development plans for both Indigenous Communities include activities to strengthen their cultural and linguistic traditions. Alpa Manga is matriarchal with a female Governadora and very strong female participation in governing and decision making processes. All three Communities of Indigenous Peoples have elected leaders (Governador/a) responsible for the leadership of the groups who govern on the basis of a consensus decision making process with the participation of both men and women.

Consultation for Exploration Wells - The preliminary consultation process for the exploration wells has been conducted in the PUT2 block in relation to the first part of the ESIA for the prospects Canelo Norte and Canelo Nogal. As outlined under the section on Identification of Risks and Impacts above the ESIA covers the prospect areas in which exploration wells will be located although the exact location is still not known. The consultation process is therefore based on potential impacts and an additional consultation process will be conducted with the affected communities when the location of exploration wells and related infrastructure is known. For both prospects the consultation process was in line with the principles of Informed, Consultation and Participation and aimed at informing communities about potential project activities, identification of potential impact and adequate mitigation measures. The process involved 20 communities (Buenos Aires del Mandur, El Porvenir, Alpamanga, San Luis, La Villas, La Estrella, Nuevo Horizonte, Delicias de Mangalpa, Alpamanga, Puerto Rosario, La Esmeralda, La Gaviota, El Cerrito, La Samaritana, Trojayaco, El Caraño, El Vergel, Villa de los Prados, Los Almendros, La Palmera). In the Canelo Norte prospect the lands of the Indigenous People Alpa Manga and Villa Catalina are included and the Company has therefore engaged these communities of Indigenous People in a process of consultation in line with the Colombian requirements for Consulta Previa, good international industry practice and the principles of Free, Prior and Informed Consent as per PS7. To date it is anticipated that the project will be using an existing access road that crosses the territory of Alpa Manga which is included in the ESIA assessment and consultation process. At the time of the consultation it was not known if there will be any exploration wells and related infrastructure located on the lands of the communities of Alpa Manga and Villa Catalina. However, should exploration and/or related infrastructure wells be located on the land of Indigenous Peoples a new consultation process in line with the principles of Free, Prior and Informed Consent in line with PS7 will be required.

For all future activities financed by the IFC investment PetroNova will consult with the affected communities based on the framework of national legislation, international good industry practice and IFC performance Standards. In the case that any of the affected communities consists of Indigenous Peoples the consultation will be conducted in line with the principles of Free, Prior and Informed Consent as described in IFC Performance Standard 7. PetroNova will be enhancing the documentation of their Stakeholder Engagement Policy and Plans in line with IFC Performance Standards.

Stakeholders can access relevant project information including the Environmental and Social Review Summary (ESRS), the Environmental and Social Action Plan (ESAP), Environmental and Social Management Plans (PMA), as well as a non-technical summary of the Environmental Impact Assessment (EIA).

These documents are available at PetroNova''s head office in Bogota:

Oficina de PetroNova Colombia
Calle 99 No 9ª -45 Piso 6
Edificio Chico 99
Bogota Colombia
Tlf 0057 1 642 8677
Contact: Abdénago Caridad, Operational Manager

Local communities in the areas potentially impacted by the project can get access to relevant project information at the following locations:

- Municipality of Uribe
- Municipality of Puerto Guzman
- Municipality of Piamonte
- Candilejas School
- Ambiwasi School
- Alpa Manga School

Broad Community Support is not applicable for this project