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

GLOBAL WORKFORCE

We are committed to attracting, retaining and energizing the very best people by investing in their professional development and providing them with challenging and rewarding opportunities for personal growth.

We are committed to maximizing local employment opportunities where we do business. We added almost 1,000 employees in 2006 compared to 2005. At year end 2006 our worldwide employee headcount was approximately 13,000. Over 94% of our employees are based in the U.S., with more than 70% of employees working in our U.S. Retail network. Non U.S. employees comprise 6% of our overall workforce. These employees are located in the United Kingdom, Norway, Denmark, Russia, Equatorial Guinea, Egypt, Algeria, Gabon, Libya, Indonesia, Thailand, Azerbaijan, and Malaysia.

Hess Corporation paid $596 million in salary and benefits to worldwide employees in 2006.

The global oil and gas sector has seen increased activity and capital investment in recent years which has increased workforce demand. As would be expected in this environment, employee turnover rates and contractor hiring has increased across the entire oil sector. Given this challenging environment our salaried employee turnover rate was a modest 3.6%.

TRAINING AND DEVELOPMENT

The company develops employees to maximize their personal and professional potential in order to create a highly functioning organization capable of achieving its business objectives. In 2006 we spent $8.5 million on technical and personal development training with each salaried employee averaging approximately 25 hours of training.

In 2006, the company made progress in the implementation of its Leadership Development Program and enhanced its performance management program. The “Marketing and Refining University” is a key training resource which facilitates career growth and helps to provide the necessary skill sets to our employees.

EQUAL EMPLOYMENT OPPORTUNITY

Our commitment to global diversity is essential as we strive for top quartile performance across the company. The company does not tolerate any form of workplace harassment including sexual harassment of an employee or employment candidate.

The company provides equal employment opportunity to all employees and job applicants regardless of race, color, religion, sex, age, sexual orientation, creed, national origin or disability. All terms and conditions of employment, including compensation and opportunities for advancement, are based on qualifications and job performance.

In addition to the requirements of national laws and regulations, the company adheres to fair employment practices because it makes good sense and is the right thing to do. The company's reputation as a fair employer, that recognizes individual rights, not only attracts and retains employees, but is also valuable in vendor and customer relationships.

The company prepares an annual Affirmative Action Program to set specific goal oriented guidelines for the company. The program strives to ensure realization of equal employment opportunity objectives.

All complaints of harassment are treated seriously and confidentially. Employees are encouraged to report any questionable behavior to their supervisors. If the situation involves the supervisor, the employee contacts the department manager or Human Resources. The company also maintains a global reporting hotline for anonymous reporting of harassment and other perceived violations of the policy.

Black Professionals Magazine has recognized Hess for its commitment to employee and supplier diversity by naming the company one of its “Top 25 Companies for African-Americans.” In addition, readers of Woman Engineer Magazine have rated Hess one of the top 50 private sector employers. Subscribers to Careers and the Disabled Magazine recognized us as one of the top 50 employers for people with disabilities, and Diversity Inc. Magazine singled us out as one of 20 Noteworthy Companies.

The company operates in 14 countries with a diverse professional staff of national and expatriate employees. Our “People Value” helps guide our company in attracting and retaining a diverse global workforce. In order to attract skilled national employees in our areas of operation we actively recruit through national professional and trade associations and advertise in local and national publications. To further enhance our diversity and encourage the same in the technical fields in which we operate, we advertise open positions with organizations such as the National Society of Black Engineers, the Society of Hispanic Professional Engineers and the Society of Women Engineers. We also present information regarding the company and its operations at international professional conferences, such as the Society of Petroleum Engineers, which attracts skilled professionals worldwide. To provide all employees opportunities for development and long term advancement, we provide training and career counseling and list open global positions on an internal website.

The company offers flexible spending accounts with dependent care options and work/life referral services.

As of December 2006, there were two female non executive members of our board and there was no board representation from outside the United States. Worldwide, 36% of managers and 44% of our workforce were women. There are no women or minorities among the Hess Leadership Team.

PROMOTING EMPLOYEE INVOLVEMENT

Several mechanisms exist for our employees to provide their feedback to the company. Our compliance hotline is a 24 hour resource available to employees to share their concerns or report issues.

To assess our employees’ level of engagement, as well as their perspectives of our overall performance, we conduct a periodic global employee survey. Our last survey was in late 2004. The next survey is being designed to focus on employee engagement and is scheduled to take place early in 2008.

Significant improvements over the last two years have been made in linking performance to compensation, differentiating pay among top performers and moving people across organizations. Communication and training for the Total Pay system, which includes a formal performance review for every employee each year and a more proactive approach to career development, have had a significant impact on improving communications with employees. In 2006 we finalized the introduction of a new web based career development performance tracking system. We have received employee feedback that we need to continue to work on improving benefits, workplace stress and our ability to be innovative.

SUPPORTING HUMAN RIGHTS

Hess Corporation’s values and policies require that we maintain the highest standards of business and personal integrity. Within these policies we also pledge to respect the law in the countries and communities where we operate and uphold the principles contained in the “United Nations Universal Declaration of Human Rights.”

To further demonstrate our commitment to these values, we have pledged our support to the “United Nations Global Compact,” which challenges businesses to endorse and support ten principles in the areas of human rights, labor, the environment and corruption. We also have adopted the joint United States/United Kingdom sponsored “Voluntary Principles on Security and Human Rights” which requires that any security services we employ, whether public or private, conform to the highest standards of professionalism and protect the human rights of all community members.

Training programs on human rights are being developed in support of our commitments for both our general workforce and our security personnel. This training will take place throughout 2007.