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
If IFC’s investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards

TransAtlantic’s operations include exploration and production activities at several acquired licenses in the Thrace Basin and the southeast region of Turkey. Company’s activities have a potential for limited environmental and social impacts that are mainly site specific, largely preventable and/or reversible, and that can be addressed through the development of specific mitigation measures and proper implementation.

Risks discussed in this ESRS mainly consist of those associated with onshore oil and gas exploration and production and include development and implementation of a comprehensive EHS and social management system, pollution prevention, management of contractors, occupational health and safety (OHS) issues during construction/rehabilitation works and wells/facilities operations, and community health and safety. Some legacy issues, mainly related to old mud pits associated with acquired facilities, also need to be addressed. Key mitigation measures are described in the ESAP.

Land acquisition is limited to small areas required for new drilling pads and does not involve any physical or economical displacement; risks and mitigating measures associated with this activity are discussed and covered under PS 1. Similarly, risks associated with cultural heritage will be included in the assessment and management system. No conversion of habitats, or issues related to Indigenous Peoples are expected as part of this investment. Therefore, PS 5 “Land Acquisition and Involuntary Resettlement”, PS 6 “Biodiversity Conservation and Sustainable Natural Resource Management”, PS 7 “Indigenous Peoples”, and PS 8 “Cultural Heritage” are not considered to be applicable.

Given the scope and scale of the potential impacts associated with this project, it has been identified as a Category B project under IFC’s 2012 Policy Social and Environmental Sustainability.

Environmental Health & Safety Guidelines that are expected to be relevant to this investment include applicable parts of:

General EHS; and
Onshore Oil and Gas Development

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:

TransAtlantic has an overarching policy defining EHS objectives that provides a framework for the company’s management and operational activities. TransAtlantic, after conducting a thorough gap analysis of its policies, will add commitment to implement IFC’s PSs in its operations (or more stringent national standards if they exist). The policy will signal to both employees and the industry the importance that TransAtlantic places on managing social, environmental, health, and safety risks in the countries where it works.



Assessment:

Under current Turkish legislation TransAtlantic licenses issued before 1993 are exempt from developing an environmental impact assessment (EIA) for exploration and production well sites ((Environmental Impact Assessment Regulation published in the official Gazette, No. 27980, on June 10, 2010). The Şelmo in the southeast regions field falls under this exemption. However, a new regulation (Gazzette No. 28784, published on October 3, 2013) requires, under Article 26, for oil and gas exploration companies to submit a project description of planned activities to the competent authority that, upon review of the documentation, will notify the applicant if an EIA is required or the activities are exempt. TransAtlantic, will review the status of its licenses against the new EIA regulation and, if necessary, will develop an action plan to bring its operations in compliance. Furthermore, the company will, as part of its effort to achieve outcomes consistent with IFC’s Performance Standards, develop a comprehensive site assessment procedure, which will include relevant EHS and social elements, to be carried out before initiating any work at new sites, based upon the principles of PS 1 and including relevant PS 5, 6 and 8 provisions. The procedure will identify any EHS and social potential risks and impacts, outline specific mitigating measures the company or its contractor(s) need to implement, and identify, if relevant, necessary baseline data and monitoring procedures to be conducted before, during, and after any activity is conducted at site. The assessment will conform to company’s environmental and social standards, including the IFC Performance Standards, the World Bank Group EHS Guidelines, and GIIP and will reference specific requirements for site preparation, management, and restoration.



Management:

TransAtlantic is developing an integrated Health, Safety, Security and Environmental Management System (HSSE-MS) that will provide a framework for the company’s management and operational activities. Once completed, TransAtlantic plans to translate the integrated HSSE-MS to an informational technology platform using either SAP or ERP software. Currently, the company has developed and partially implemented many procedures, standards, related forms, and checklists. As outlined in the ESAP, TransAtlantic will ensure that its integrated HSSE-MS is consistent and includes all PS 1 and World Bank Group
provisions and relevant general and sector guidelines. The system will incorporate the necessary elements, including policy, risk and impacts, management programs, organizational capacity, emergency preparedness, and monitoring appropriate to the nature and scale of the company operations and will cover environmental, social, health and safety and security issue.



Organizational Capacity:

Management has a good mix of major company background and smaller specialized oil and gas company experience. Vice presidents have strong technical knowledge and good understanding of the sector market. The EHS manager, who reports directly to the vice president of operations and facilities, has a team of two EHS engineers and one doctor. The engineers, one located in the Thrace Basin and the other in the southeast region, are responsible for day to day operations while the doctor oversees and coordinates the company first aid facilities and associated personnel. An environmental engineer, located in the southeast region, is also assigned to ensure permit compliance with local regulation. TransAtlantic is currently assessing its management team to ensure that each regional area of operations is sufficiently covered. As outlined in the ESAP, the company will appoint an additional EHS supervisor in the southeast area and an EHS coordinator, who will oversee both areas of operations and report to the EHS manager.



Stakeholder Engagement and Grievance Procedure:

Some of the company’s operations and/or facilities are located in close proximity (1 to 3 km) of settlements. The land needed for TransAtlantic’s operations is either government land or belongs to people living nearby. For privately owned land, leasing or right of way agreements are done on willing seller/willing buyer basis and payments, including compensation for lost crop and land restoration, go directly to the owners and/or land users. However, when multiple owners are involved and consensus on leasing can’t be reached or owners are not known or not traceable, the company needs to engage with the relevant government agency to initiate expropriation proceedings. While the company is fully engaged with local communities, its activities are managed and implemented informally. TransAtlantic will develop an appropriate stakeholder engagement plan based on PS 1 provisions. The plan should identify the different categories of internal and external stakeholders including affected residents and determine procedures for consultation, disclosure of information and a solid and locally applicable grievance mechanism. Relevant procedures of the plan will be implemented in the site assessment outline above.



Monitoring and Evaluation:

TransAtlantic current HSSE-MS includes procedures and forms for monitoring its activities. However, the system is not fully integrated, implemented evenly across the operational regions, nor part of a systematic monitoring program. Inspections are carried out re
gularly but do not include all company sites while several EHS environmental and OHS key performance indicators have been developed but not consistently implemented. Data analysis, leading to procedural changes and corrective actions, is mainly managed at a regional/site level.



Drilling mud and produced water waste are tested before disposal. Waste water effluents from the treatment plant at the Şelmo processing center are regularly monitored and tested. Furthermore, the company does monitor point source emission and dust.

As described in the ESAP, TransAtlantic will formalize relevant environmental, OHS, and social key performance indicators and develop a comprehensive monitoring program that will include regular inspections, audits, data evaluation, and implementation of corrective actions. The program will also include detailed surface and groundwater monitoring protocols to ensure that drilling and work-over activities do not have negative impacts on the environment and relevant stakeholders. As part of its audit and inspection program, TransAtlantic will include specific procedures to ensure that contractors are compliant with their own EHS management system and with TransAtlantic EHS provisions.



Emergency response:

TransAtlantic has developed an emergency response plan for the Şelmo processing center consistent with its operations in the area. The plan addresses types of emergencies, specific response structures and responsibilities, and notification procedures. The company will develop similar plans to cover all its facilities in the southeast and Thrace Basin regions.

Human Resources Policies and Procedures:

TransAtlantic human resources policy is included in the employee handbook, which is currently under review. The handbook is provided to, and acknowledged by, all employees. It outlines a general framework covering all TransAtlantic staff and includes such elements as equal employment opportunity, non-discrimination and anti-harassment practices, and procedures for reporting incidents related with violation of these policies. Other terms of employment, such as working hours, termination of employment and conflict resolution, are managed according to Turkish labor regulations. Local law in Turkey reflects all of the International Labor Organization’s core labor standards, including those conventions on the freedom of association, the right to collective bargaining, non-discrimination, forced labor, and child labor. As part of the employee handbook review process, the company will conduct a gap analysis and integrate the document to achieve compliance with IFC PS 2 provisions. In particular, the company should integrate the existing system with worker’s rights related to grievance redress and include specific procedures for seasonal and/or short term employments.

TransAtlantic has a number of third party companies providing a variety of services (e.g. drilling and work-over services, trucking of product, waste handling and disposal, etc.). The company, by its contractors’ auditing procedures, will ensure that employment conditions of contracted employees are also consistent with the key requirements of IFC’s PS 2.



Working Conditions and Terms of Employment:

Transatlantic has a total of 238 employees, 44 (18%) of which are women and 5 disables, with ages ranging from 18 to over 56. Within the managerial level, women account for 36% of key positions. The company does not have a redundancy program; however, given the current development plans, personnel are not expected to decrease/increase materially in the near future.



All employees have contract that include basic terms of employment like contract duration, wages and benefits, hours of work, overtime work and working during holidays. Issues related with leave for illness, maternity, vacation or holiday, employees’ right for labor protection are managed according to local labor law.



Workers Organizations:

Although there is no restriction on the rights to freedom of association, only blue collar workers are unionized. Within the company, only 41 (17%) workers are members of national trade union Petrol-Is (The Worker’s Union of Turkish Oil, Chemical and Rubber Industries), which has a collective bargaining agreement with the company. The agreement defines responsibilities of the employee and employer, payment, safety of labor and health protection, social guarantees, annual leave and resolution of conflict situations. The agreement ensures that company employees will not be prohibited from being a member of any labor organization an
d provides a grievance channel for workers’ concerns.



Grievance Mechanism:

As defined in the employee handbook, TransAtlantic has an open door policy that encourages workers to bring their concerns and grievance to management. However, this policy does not provide procedures or outlines the process for handling internal grievances. The company will develop a clear process, including required steps, timelines, procedures, and appropriate level of management for handling grievances. Once developed the grievance procedure will be fully disclosed to all employees. The grievance mechanism will be accessible to both direct and third party employees, as required by PS 2.



Health and Safety:

The company HSSE-MS lists specific training modules for the workforce and outlines a detailed training matrix covering its personnel. The matrix identifies mandatory and additional training for the company personnel as well as provides a defined schedule for each module. Mandatory induction and emergency response training is delivered to all new employees while additional training, in addition to what required by local legislation, includes spill prevention and control and H2S prevention and protection. As part of the integrated HSSE-MS, TransAtlantic will incorporate existing and newly developed training modules in a comprehensive program consistent with its operational activities. Provisions will be included for specific training to be delivered to contractors should their EHS management plan and system be found deficient as compared to TransAtlantic’s standards.



Minimum personal protective equipment is defined in the company HSSE-MS and is provided/replaced by the company. Its implementation is consistent throughout TransAtlantic field activities.

Separate OHS risk analyses were conducted for the Thrace Basin and southeast regions. As outlined in the ESAP, the company will carry out job safety analysis and develop standard operating procedures, in line with international recognized methodologies, for all its activities. Furthermore, TransAtlantic will expand and integrate its existing reporting system such that occupational accidents, including near misses, and internal audits and inspections at all working sites are regularly compiled and analyzed by management.

TransAtlantic will manage environmental impacts of its activities as per its new integrated HSSE-MS. The system will include procedures and standards that meet IFC’s PS 3 provisions and applicable general and sector specific EHS guidelines.



In the southeast area, many of the existing facilities currently operated by TransAtlantic have been built by other operators. Some above storage tanks and other areas where potential spills may occur (e.g. product truck loading areas, hazardous material and waste storage areas, etc.) appear to have insufficient secondary containment. The company will assess secondary containment at critical areas throughout its facilities and develop a comprehensive action plan including expected completion dates, to bring identified assets and areas in compliance with industry best practices and IFC sector guidelines standards.



Soil contamination:

TransAtlantic new integrated HSSE-MS will include provisions to prevent soil and water contamination at project sites. In addition to some minor impacted mud/soil from current operations, the company has few legacy issues associated with old impacted mud pits that already existed when TransAtlantic acquired assets and facilities. The company is currently evaluating options on how to treat impacted mud/soils with aeration being one of the methodologies currently being considered.

TransAtlantic will inventory, quantify, and assess existing impacted mud pits and other areas that have been potentially impacted and develop a comprehensive action plan, including expected completion dates, for remediation. A remediation plan will be developed, outlining procedures, tests to be conducted, and specific reinstatement measure to reclaim identified sites and dispose of the impacted soil/water.



Resource Efficiency

TransAtlantic has undertaken an electrification program in the southeast region to reduce emissions and waste associated with diesel generators. Currently all the Şelmo field wells are connected to the power grid while connections at the Göksu field will be completed by June, 2014. The few remaining production wells in the Arpatete and Bahar fields will either be connected to the grid or switched to gas generators.

The electrification program has substantially reduced emissions, diesel consumption and waste associated with diesel generators (e.g. oil, lubricants, filters, etc.).



TransAtlantic’s flaring, venting and fugitive emissions from its operations (production, storage, and transport) account for over 102,000 metric tonnes (MT) of CO2 equivalent per year. Additional green house gases (GHG) emissions include those from the use of electricity from the national grid (about 6,167 MT) and fuel gas consumption (1,752 MT). As part of its air emissions control program alluded to below, TansAtlantic will estimate and report on GHG emissions on an annual basis in order to improve emissions reduction.



Water Consumption:

TransAtlantic use of water is main
ly associated with drilling and well stimulation activities. On average, drilling requires between 24,000 and 205,000 liters of water per drilling day (total drilling time depends on formation and depth but averages between 25 to 30 days) while consumption during well stimulation ranges from 120,000 to 835,000 liters per well, hydraulic fracturing requiring more water than acid stimulation. Water is provided by local contractors with sources including the Dam Lake for the Şelmo field and local rivers or groundwater wells for other licenses. The company occasionally drilled its own on-site water wells but reverted to buy water from local villagers who requested TransAtlantic to resume this practice as a way to increase income opportunities. As outlined below, the company is currently installing centrifuges on all rigs to reduce water consumption and increase mud recycling.



Waste Management and Disposal:

Hazardous (e.g. spent oil and lubricants, chemical) and non-hazardous wastes (e.g. drilling fluids, cuttings, general waste) are the main waste streams generated by TransAtlantic with spent mud from drilling activities making up the bulk of the total. Historically, waste mud is tested and then either disposed at local landfills (Thrace Basin) if found inert or sent to cement factories for burning (southeast region). With recent changes in the local legislation restricting emission standards, cement factories are no longer accepting impacted mud for burning that contain any amount of hydrocarbon or any drilling waste/mud with salt content in excess of 4 mg/liter. Therefore, TransAtlantic is currently storing impacted mud on site while evaluating disposal options. As an immediate action, the company has recently installed centrifuges on all its contractor’s rigs in order to extend drilling mud life and reduce water consumption.

Other types of waste include oil and batteries; contracts are in place with third parties companies for the collection and recycling of both these waste streams. Domestic waste is handled and disposed by local municipalities.



As part of its integrated HSSE-MS, TransAtlantic will develop a detailed waste management plan, in line with recognized industry standards and relevant provisions outlined in IFC general and sector specific guidelines, for each of its main facilities. The plan will classify and quantify hazardous and non- hazardous waste streams, identify opportunities for recycling, and develop procedures for waste minimization, segregation, handling collection, and disposal.



Wastewater is mainly generated by drilling, work-over activities, and the production water from some wells, in particular in the southeast region where about 20,000 barrels of water per day are separated from the crude. After testing, production water is either injected in deeper formations (ranging between 1,000 and 2,000 m below land surface) or is trucked to nearby water treatment plants for disposal. TransAtlantic will e
valuate the need to include specific monitoring measures to ensure injected water does not impact surface and/or groundwater resources or that increased pressure in the injected reservoir will cause local micro seismicity.

Smaller quantities of domestic wastewater are produced at well sites and product processing/gathering facilities. TransAtlantic, will inventory and assess existing domestic wastewater disposal practices to verify that domestic wastewater is collected in cesspits, or other impermeable enclosure, and develop a comprehensive action plan, including expected completion dates, to bring any identified deficiencies in line with industry standards and IFC general and sector guidelines.



Air Emissions:

In 2011 TransAtlantic conducted an air emission inventory that at the Şelmo field where point source emissions (e.g. generators) and general emissions from selected areas (e.g. storage tanks, filling station areas, etc.) were sampled for a variety of parameters (e.g. CO, O2, SO2, NOx, dust). Air emissions from TransAtlantic’ operations are principally related to their gathering and treatment facilities; wells and well batteries, oil tank vent pipes, pumps and generators; and diesel engines on drilling and service rigs. Key emissions involve nitrogen dioxide (NO2), particulate matter, sulfur dioxide (SO2), carbon monoxide (CO), volatile organic compounds (VOCs), and H2S. The company will undertake a comprehensive emissions inventory and monitoring program and will evaluate measures to reduce its GHG emissions intensity over time. As part of this monitoring program, point source emissions will be tested at least once per year, starting in 2014, against relevant local regulatory and IFC standards.

The company uses third parties trucks for the infield transport of oil from wells not connected with flow-lines. To minimize emissions TransAtlantic will include in their contractor(s) auditing procedures provisions to ensure the truck fleet is well maintained and emissions are in line with national requirements and industry standards.

Community health and safety:

TransAtlantic will include and implement, as part of its integrated HSSE-MS, procedures and standards to ensure community health, safety, and security impacts are identified and mitigated in accordance with IFC’s Performance Standard 4 provisions including, but not limited, to:

noise, spills, fire and explosion;

movement of equipment, material and waste;

air emissions, noise and vibrations; and

degradation and/or contamination of resources on which communities in the vicinity of the operational sites, are dependent.

Particularly, the company will include in its monitoring program periodical data collection of air quality, noise levels, and relevant surface and groundwater parameters in potentially affected communities/villages and implement mitigation measures where required.

Company operations in the project area increase vehicular and heavy machinery traffic in the surrounding communities.

In the southeast region some of the light duty vehicles are equipped with GPS tracking and onboard cameras while GPS tracking is installed on all the contractor’s trucks hauling oil and water within and external to the production fields. The integrated HSSE-MS will include provisions for the management of vehicular movements, both company and contractors’ vehicles, to minimize impacts and increased potential hazards to the community located near project areas.



Security personnel:

All operational sites in both the Thrace Basin and southeast regions are fenced. In addition, sites in the southeast are being guarded by armed security personnel as required by local authorities. TransAtlantic will ensure that security personnel records are screened before employment and that security personnel are trained on human rights and Voluntary Principles. In addition, the company will develop specific provisions in their external stakeholders’ grievance mechanism to properly capture and process code violations from security personnel against members of the community and employees.



Life and Fire Safety:

TransAtlantic will provide the Şelmo processing center with foam/water centralized firefighting system by September 2014 while all other visited facilities rely on portable fire extinguishers. While extinguishers are reported to be checked regularly, individual extinguishers are not numbered, the checking procedure is not formalized, and logs with relevant observations and remedial actions are not kept. The company will inventory and assess existing firefighting measures and equipment at each site, determine if additional areas (e.g. the Göksu gathering facility) would need a centralized foam/water system, and develop procedures, checklists and logs to ensure firefighting equipment is sufficient, well positioned, and kept in working order at each site.

TransAtlantic’s operations are located in rural areas in both the Thrace Basin and southeast sites. Besides providing employment opportunities to local communities, the company is engaged in several community outreach activities including offering scholarships for university students, repairing village roads, planting trees, maintaining and refurbishing primary schools, houses of sorrows and health clinics. In the Şelmo area, a local council of elders was established, with members selected by the villagers, and is frequently consulted by TransAtlantic. The council is also a venue where local stakeholders can bring their request to the company’s attention. However, all these activities are managed informally without a coordinated budgets and resources allocation from corporate management. The company will formalize this process by developing a community engagement plan in order to better manage its effort, balanced to all its operational areas, and enhance programs effectiveness on the communities.

The company will make available on its website its social and HSSE policies and other relevant information on social and HSSE performance. TransAtlantic will also make available on its website its procedures as related to new projects and the measures it proposes to implement to conduct its business in accordance with IFC’s Performance Standards.

TransAtlantic Petroleum
Akmerkez, Block-B, Floor 4
Nispetiye Caddesi
34330 Etiler / Istanbul
Turkey
Phone: +90 212-317-2500
Fax: +90 212-317-2599

Broad Community Support is not applicable for this project

Title	Anticipated completion Date
Incorporate relevant company policies and commitment to implement IFC’s PSs in its operations (or more stringent national standards if they exist)	06/30/2014
Review the status of its licenses against the new EIA regulation and, if necessary, develop an action plan to bring its operations into compliance.	05/31/2014
Develop the new integrated HSSE-MS, covering environmental, social, health and safety and security issue, consistent with PS 1and World Bank Group provisions and relevant general and sector guidelines. The system should include, but not limited to, the following elements: • a comprehensive site assessment procedure that will include relevant EHS and social elements • relevant environmental, OHS, and social key performance indicators • a comprehensive monitoring program of the newly integrated HSSE-MS including • Management and compliance of contractors • Emergency response plans for all its facilities • Detailed waste management plan for its facilities • Management of vehicular movements, both company and contractors’ vehicles • Procedures and standards to ensure community health and safety and security impact are assessed and mitigated according to PS 4 provisions.	10/31/2014
Appoint an additional EHS supervisor in the southeast area and an EHS coordinator.	07/31/2014
Develop an appropriate stakeholder engagement plan, based on PS 1 provisions	08/31/2014
Develop and implement internal (e.g., workforce) and external (e.g. stakeholder) grievance procedures	08/31/2014
Integrate the employee handbook to achieve compliance with IFC PS 2 provisions	07/31/2014
Incorporate existing and newly developed training modules in a comprehensive program consistent with operational activities	08/31/2014
Carry out job safety analysis and develop standard operating procedures, in line with international recognized methodologies, for all its activities	09/30/2014
Inventory, assess, quantify and develop a time-bound action plan for the following: • Secondary containment • Impacted soils with related remedial plan if relevant • Firefighting system • Wastewater disposal practices	07/30/2014
Undertake a comprehensive emissions inventory and consider alternatives for the reduction of GHG emissions intensity over time	09/30/2014
Develop a comprehensive EHS monitoring program including, but not limited to, the following: • Point source emissions • Ambient air, noise, surface and groundwater at sites and at selected affected communities/villages	08/31/2014
Ensure that security personnel are screened before employment and that security personnel are trained on human rights and Voluntary Principles.	05/31/2014