Annual and Three Year Planning for

HSEQ
Guideline

OMV-EP Guideline

Annual and Three Year Planning for

HSEQ

Prepared by: Date 21 February 2003

Peter E Neal, Senior HSEQ Advisor

Approved by: Date 5 March 2003

Ulrich Peball, Vice President EP-HSEQ

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1 Scope and Application

This guideline applies to all Austrian and international activities of the Exploration and
Production Division.

The purpose of this procedure is to ensure that HSEQ management system activities are
developed and documented in a formal planning system. To re-inforce the principle that
HSEQ activities are a line management responsibility, these activities should be integrated
within the overall business planning system.

HSEQ planning for specific development projects and major upgrades or facilities overhaul is
a stated requirement in the guideline HSEQ in Projects, document number HSEQ-04-01
latest revision. However, interfaces with the annual and three year plans should be identified.

2 Cross-references
HSEQ Policy Elements and Objectives, document no HSEQ-HQ-00-01 latest revision.
HSEQ Goals and Targets, document no HSEQ-HQ-01-01 latest revision.
HSEQ in Projects document no HSEQ-04-01 latest revision

3 Management responsibilities
Vice Presidents based in Austria and General Managers based overseas shall be
responsible for ensuring through their line management organisation, that:-
• Three year forward looking HSEQ plans are developed within their area of
responsibility.
• Annual HSEQ plans are developed that cascade down from the three year plan.
• Regularly reporting actual versus planned achievement against HSEQ plans.

4 Definitions
None

5 Procedure
The three year plan should be developed as the first step. It will be strategic process
because it involves the best way to respond the circumstances of business environment
whether or not these are known with any degree of certainty. Being strategic, means being
clear about the business unit objectives, being aware of the organisation's objectives and
resources, and incorporating both to be able to respond to a dynamic environment.

The process is about planning because it involves intentionally setting goals (i.e. choosing a
desired future) and developing an approach to achieving those goals. Further guidance

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about goals and targets is contained in the procedure HSEQ Goals and Targets, document
no HSEQ-HQ-01-01 latest revision.

The process of developing the three year plan involves strategic thinking and this means
asking “are we doing the right things”. More precisely it means making an assessment using
three key requirements of strategic thinking:- a definite purpose be in mind; an understanding
of the business environment risks (particularly the forces that impact or impede the fulfilment
of that purpose); and creativity in developing effective responses to those forces. Appendix A
provides guidelines for the strategic planning process.

The three year plan should be updated at least annually and “roll forward” to reflect improved
knowledge about the direction the business unit is heading.

The annual plan is the next level down from the three year plan and can be more detailed.
Progress – actual versus planned – should be monitored and reported on a monthly basis.

Planning is a business tool that provides information for effective management decisions.
Just as the hammer does not create the bookshelf, so the data analysis and tools of planning
do not improve the HSEQ performance of the business unit – they only support the intuition,
reasoning skills and actions that managers bring to the organisation.

6 Record of Revisions
None.

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Appendix A
This appendix provides guidance on the strategic planning process that can be used for
preparing the three year HSEQ plans that are a requirement of this procedure

To re-inforce the principle that HSEQ activities are a line management responsibility, these
activities should be integrated within the overall business planning system, whether at
corporate, region or project level.

This guidance is not meant to apply to project planning which usually follows industry
practices established by major engineering and construction contractors. It is also not meant
to cover short term and more detailed planning which may be required to show how
milestones will be achieved in an overall strategic plan.

The annual plan would cascade down from the strategic plan and is usually called the
Operating Plan based on a one year time period.

Strategic Planning Model

There are many different approaches to strategic planning and many have much more depth
and detail than what is described in this model. Below is a brief description of the five steps
in the process and these are only a recommendation. Each business unit/department will
need to establish a method that works best for them which may be entirely different or a
variation of these steps. However, the steps outlined below describe the basic work that
needs to be done and the typical deliverables of the process.

Step One – Preparation

A number of important tasks must be completed as part of the preparation. These are:
▫ Identify specific areas of the business that the planning process should address
▫ Clarify roles (who does what in the process)
▫ Create a Planning Workgroup
▫ Develop/agree the organisation profile
▫ Identify the information that must be collected to make sound decisions

The deliverable developed at the end of Step One is a Workplan and will normally be in the
form of a narrative with perhaps supporting diagrams for the organisation.

Step Two – Establishing a Vision of the Future

The vision is similar to a mission statement and communicates what is driving the
organisation to exist, what is its focus and where it is trying to position itself. The vision
typically describes an organisation in terms of its:
▫ Purpose – why the organisation exists and what it seeks to accomplish
▫ Business – the main methods or activities through which the organisation tries to fulfil
its purpose
▫ Values – the principles or beliefs that guide employees as they pursue the
organisation’s purpose.

At the end of Step Two a draft vision statement is developed.

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Step Three – Assessing the Current Situation

Situation assessment means obtaining current information about the organisation’s
resources, strengths, weaknesses and performance – information that will highlight the
critical issues that the organisation faces and that its strategic plan must address. These
could include a variety of primary concerns such as funding issues, new potential projects or
exploration opportunities, changing regulations or public expectations, and so on. The
purpose is to choose the most important issues to address. The Planning Workgroup should
agree on no more than ten critical issues around which to organise the strategic plan.

The deliverables of Step Three include: a database of quality information that can be used to
make decisions; and a list of critical issues that demand a response from the organisation –
the most important issues the organisation needs to deal with over the next three to five
years.

Step Four – Developing Strategies, Goals and Objectives

Once the critical issues have been defined, more in depth planning can proceed: the broad
approaches to be taken (strategies), and the general and specific results that are needed
(the goals and objectives). The process of deciding on the strategies, goals and objectives
may come from a variety of techniques: workshops, focus meetings, market research,
individual ideas, etc.

This step can take considerable time and needs degree of flexibility. Discussions at this
stage frequently will require additional information or a re-evaluation of the situation
assessment. New insights may emerge that require the vision statement to be re-formulated.
The process should be iterative to create the best possible plan.

The deliverable of Step Four is a finalised vision statement and an outline of the strategic
direction – the general strategies, long range goals, and specific objectives of its response to
the critical issues.

Step Five – Complete the Written Plan

Once the vision statement has been finalised, the critical issues identified, and the goals and
strategies agreed upon, it is necessary to prepare the commitment in writing. A final
document needs to be drafted and submitted for review to all key decision makers. This also
is the time to consult with senior staff to determine whether the document can be translated
into operating plans (the subsequent detailed action plans for accomplishing the goals
proposed by the strategic plan) and to ensure the plan answers key questions about priorities
and directions to serve as a guide. Revisions should be dealt with promptly, but conflict
should be fully resolved at this stage, because if concerns are unresolved it will undermine
the ownership and implementation of the plan.

The deliverable of Stage Five is the strategic plan. This would normally be in a narrative form
and may also include bar charts, schedules, organograms and other pertinent information.

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