Scope of Report Message From the Chairman Our Company 2006 Highlights 2006 At A Glance 2006 Performance Data How We Operate Review of Operations Safety Performance Environmental Performance Global Workforce Community & Social Performance Global Compact Index GRI & IPIECA/API Index Verification Statement

ENVIRONMENTAL PERFORMANCE

We are committed to meeting the highest standards of corporate citizenship by safeguarding the environment.

OIL SPILLS AND RELEASES

Our operations have the potential to impact land and water resources. We have established controls to minimize these impacts and metrics to help us monitor and improve our performance.

Spills

Although our goal is to have no spills, releases do occur accidentally. We track our company wide spills in order to monitor performance, identify root causes and plan mitigation measures.

Our oil spill definition is: “Any spill to a waterbody which creates a sheen; or any spill affecting land outside of secondary containment which is more than 1 barrel for the upstream business or five gallons and greater for the downstream business.” Impervious surfaces that are not designed or intended to provide volumetric containment do not meet this definition. (For example, all surface spills onto concrete at Retail stations are considered outside secondary containment.)

Hess operations achieved a significant reduction in the number of oil spills in 2006 compared to 2005. The total number of spills fell by 57%, from 270 in 2005 to 115 in 2006 .

The majority of our reportable spills occur at Retail stations. However, Retail had less than half the number of spills in 2006 than in 2005. Retail’s improved spill performance is attributed primarily to the completion of a spill bucket replacement campaign in late 2005.

Our Exploration and Production operations had 27 spills in 2006 compared to 93 in 2005. U.S. Production operations accounted for most of the spills with 10 spills in North Dakota, 6 spills in the Permian Basin, and 4 spills in the Gulf Coast.

Failure of a 10 inch export pipeline at the Gassi El Agreb facility in the Algerian Sahara desert resulted in a 31,367 bbl spill in early 2006. This leak occurred in a remote location and was observed from a company aircraft during a routine flight. A repair was made to the pipe and the majority of the oil was recovered. The pipeline was replaced later in 2006.

After factoring out this single event, the remaining spill volumes were significantly lower in 2006 than those in recent years. Excluding the Algeria spill, we spilled 88 bbls in 2006 compared to 531 bbls in 2005. Our Marketing and Refining operations spill volume was reduced from 110 bbls in 2005 to just 29 bbls in 2006.

Over 84% of our spills occurred at onshore locations, where the majority of the oil spilled is recovered and disposed of appropriately. This includes the 31,367 bbls spilled in Algeria. The remaining spills to water amounted to just 3 bbls in 2006.

Offshore Discharges

At our U.S. Terminals, Refining and E&P facilities, the volume of oil discharged in produced water at offshore facilities decreased from 1,796 bbls in 2005, to 1,409 bbls in 2006. Following an increase in 2005 the oil in water concentration decreased from 20 ppm in 2005 to 17 ppm in 2006 . This is well below the generally accepted regulatory limits of 30-40 ppm.

In 2006, the Triton Floating Production Storage and Offloading facility in the U.K. North Sea installed a new separation package which will greatly enhance its produced water discharge performance in the future.

In 2006, our overall volume of drilling mud and cuttings increased due to a larger number of wells drilled. However, the amount of oil discharged with cuttings decreased from 350 tons in 2005 to 308 tons in 2006 .

Onshore Discharges

At our U.S. E&P, Terminals and Refining facilities, we continued our excellent National Pollutant Discharge Elimination System compliance performance, achieving 99.9% compliance in 2006 . Port Reading also continued its excellent external waste water performance with all discharges well below permitted limits .

RESOURCE USE

Waste

The overall quantity of waste generated increased by 8% from 169,763 tons in 2005 to 182,976 tons in 2006 .

Approximately one half of the waste generated was recycled, a 9% improvement on 2005. Approximately 0.30% of waste generated in 2006 was categorized as hazardous. We did not export any waste deemed hazardous under the terms of the Basel Convention in 2006.

Water

We do not use fresh water from any of our onshore U.S. fields for reservoir pressurization. In 2006 we injected approximately 66 million barrels of produced water into our U.S. onshore oil fields and a further 32 million barrels were injected into disposal wells.