2013 HSE ANNUAL REPORT

Health, Safety,
Environment
 Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Section 1: Corporate Social Responsibility . . . . . . . . 10

Section 2: Health and Wellness . . . . . . . . . . . . . . . . . 18

Section 3: Personal and Process Safety . . . . . . . . . . . 24

Section 4: Environmental Performance . . . . . . . . . . 34

Section 5: Driving Flawless Execution . . . . . . . . . . . . 50

Section 6: Recognition . . . . . . . . . . . . . . . . . . . . . . . . 60

Section 7: Looking Forward . . . . . . . . . . . . . . . . . . . . 66

Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

2 Baker Hughes Incorporated

At Baker Hughes, our goal is to make today, and every day, a
Perfect HSE Day. Simply put, this means no injuries, no accidents,
and no harm to the environment. We work to achieve this one
day at a time, by taking care of each other. And that means our
employees are looking out for their teammates at Baker Hughes,
our industry partners at jobsites and members of our communities.

2013 HSE Annual Report 3

Executive Summary

Our goal is to make today, and every day,
a Perfect HSE Day, one without recordable
injury or illness, serious spill or release, and
serious motor vehicle accident across the
company. During 2013, we improved our
HSE performance in many areas, achieving
fewer employee injuries and vehicle
accidents, minimizing spill volumes, and
advancing our conservation of energy and
water. Our accomplishments were, however,
overshadowed by the loss of six of our
colleagues, which emphasizes that we cannot
lose our focus on mitigating life-critical risks.
HSE goal performance
We strive for flawless execution in our
operations and believe that we can achieve
365 perfect HSE days in a year. Our performance
metrics highlight that we are progressing, but
we still have more to do.

Table 1 Summary of results of 2013 HSE goals

Goal Target Result

Zero fatalities 0 6 work-related employee fatalities

10% Reduction in Total Recordable

<0.68 0.65 (14% reduction)
Incident Rate (TRIR)

10% Reduction in Days Away from

<0.19 0.17 (18% reduction)
Work Case Rate (DAFWCR)

15% Reduction in Short Service

<0.95 1.03 (8% reduction)
Employee (SSE) TRIR

10% Reduction in Motor Vehicle

<0.32 0.34 (4% reduction)
Accident Rate (MVAR)

Reduce resource use by 10%,

targeting water, energy and associated 10% reduction 13% reduction
greenhouse gas emissions

15% Reduction in spill volume 15% reduction 6% reduction

4 Baker Hughes Incorporated

This report provides an overview of Baker Hughes health, safety,
environmental and social responsibility performance for 2013.
In each section, we provide an overview of the goals, associated
activities and achievements, and future direction to bring
continual improvement.

2013 HSE Annual Report 5

Executive Summary

During 2013, we emphasized our mission to Corporate Social Responsibility

Make Everyday a Perfect HSE Day, along with Our efforts in Corporate Social Responsibility
the following key HSE focus areas: continue to be recognized. We achieved
nnContinue culture shift balancing personal top tier ranking in our industry sector in the
and process safety following sustainability performance indices:
nnUse work activity analysis for nnDow Jones Sustainability Ranking Leader
injury prevention in the Energy Equipment and Services
nnPromote healthy and fit behaviors sector of the World and North America
nnLearn from high potential incidents, Sustainability Indices
near misses, and observations nnCarbon Disclosure Project (CDP) Leader in
nnMitigate transportation safety risks the Energy Equipment and Services sector
nnEnhance resource conservation nnCR Magazines Best Corporate Citizens
nnPromote customer and Highest-ranked oilfield service company in
community engagement the energy industry sector
nnBloomberg Environment, Social and
Governance Disclosure Index Leader in
the energy sector

6 Baker Hughes Incorporated

Our award-winning facility in Shafter, California built to our sustainable building standards
We achieved these accolades through our
efforts to engage our employees, achieve
a culture of diversity and inclusion, and be
recognized as a great place to work. Our
employees around the world enjoy supporting
our communities in a range of social activities,
often in collaboration with our customers.
Health and wellness
Our long term health goal is to optimize the
health of our employees for a positive impact
to our business and the individual. Our health
program involves protecting worker health and
influencing our employees to manage their
personal health. With a robust occupational
health and hygiene program and informative
wellness communications, this years health
activities included exposure monitoring for
validation of engineering controls; increased
awareness of breast cancer with our pink drill
bits campaign; and supporting community
emergency response team learning centers.
Our efforts continue to elevate the
H in HSE.
Personal and process safety
In many areas of the world, Baker Hughes
teams were individually successful in achieving
365 Perfect HSE Days. Regrettably, we
experienced six work-related fatalities within
the first four months of 2013. To help eliminate
serious injuries and fatalities in the workplace,
our new Life Rules! program was developed.
Employees performed nearly 43,000 Stop Work
actions in 2013, a notable 60% increase from
the previous year. Safety performance improved
with a 14% reduction in Total Recordable
Incident Rate and an 18% reduction in Days
Away From Work Case Rate. Hand and back
2013 HSE Annual Report 7
Executive Summary
The Navigation team holds the record for the most Chairmans HSE Excellence awards with 12 wins
injuries continue to be the most frequent
body parts affected, making up 44% of the
recordable injuries.
Transportation performance improved
with a 4% reduction in our Motor Vehicle
Accident Rate. We achieved a 9% reduction
in the overall accident frequency (all severity
classifications) and a 5% decrease in
preventable accidents. The majority of our
vehicle accidents were due to excessive speed
for conditions, improper following distance,
poor driver awareness of surroundings and
inconsistent Journey Management practices.
These causes reflect the need for continued
training and strong oversight programs.
With a helicopter crash resulting in the loss
of two employees, we conducted a thorough
air-safety audit on helicopter providers under
direct contract and initiated the assessment
of more than one hundred helicopter service
operators used by our clients to transport our
employees to offshore or remote land locations.
We also began working with an international
aviation safety consultant to develop stronger
operational controls and tools to help us
8 Baker Hughes Incorporated
mitigate the hazards of helicopter operations
for our employees.
Environmental performance
We continue to focus on energy efficiency
and water conservation to align with our
sustainability strategy and commitment to
manage the risks associated with climate
change. We achieved a 13% reduction in
our resource use, as measured by our use of
electricity, natural gas and water. Greenhouse
gas emissions from our activities were also
reduced, eliminating approximately 53,500
metric tons of CO2e. This success is the result
of integrating energy management standards
into our HSE management system and the
continued commitment of our employees to
protect the environment and the communities
where we work and live.
Spill performance improved from 2012,
with a 6% decrease in spill volume. With
proper chemical management practices and
effective spill response planning, most spills
are contained and all are cleaned up quickly,
with minimal and temporary environmental
impacts. Weve directed our efforts on the
process-related causes of spills, enhancing
these elements in our reporting system and
emphasizing spill prevention practices.
Sustainability improvements in our products
and services continue with the expansion of our
Bifuel (dual fuel) fleets of hydraulic fracturing
units. These bifuel units can replace up to 70%
of the diesel fuel with natural gas, reducing
greenhouse gas emissions. At year end, we had
converted nearly 100 pumps in our hydraulic
fracturing fleet. Other advances include the
further development of environmentally
preferred chemicals and new technologies that
reduce the amount of freshwater required.
In 2013, environmental compliance costs were
USD 85 million, essentially flat year on year. We
spent about USD 7 million in capital projects to
improve energy efficiency and reserved
USD 34 million to address environmental
liabilities at 72 sites worldwide.
Recognition
In our annual HSE recognition program, we
presented top-performing teams with the
Chairmans HSE Excellence Award. This year, we
also introduced two new awardsthe Presidents
Perfect HSE Day award, and the Presidents
HSE Performance awardto recognize teams
that achieved 365 Perfect HSE Days. Entries
for these awards were received from across
the enterprise with winners coming from all of
our major business sectors. The 500-member
team at the Navigation Manufacturing facility
in Houston, Texas won the Chairmans HSE
Excellence award for the twelfth time and has
achieved more than 12 million man-hours
without a Days Away From Work case. Our
employees have also been recognized externally
by our customers and industry groups for their
stellar HSE accomplishments.

Driving flawless execution

We collaborate with our customers and industry
groups to address the HSE challenges presented
in our operations and align our internal
standards to reflect best practice. In 2013,
we obtained full global IADC accreditation
for our Competence Assurance Program. To
further drive consistency and conformance, we
migrated our HSES MS into the Baker Hughes
Operating System (BHOS) in order to provide
employees a centralized location for all HSE and
technical procedures. Bureau Veritas conducted
our first global headquarter ISO 14001 and
OHSAS 18001 audit, as part of our multisite
certification effort. During 2013, we had 70
Chairman and CEO, Martin Craighead presents the
facilities certified to ISO 14001 and 22 facilities
Chairmans HSE Excellence Award to Jeff Merritt, Plant
also certified to OHSAS 18001. Director and Susan Bell, HSE Manager at Navigation
Manufacturing Facility, Houston, USA

2013 HSE Annual Report 9

Section 1

Corporate Social
Responsibility
In 2013, Baker Hughes employees continued
efforts to ensure we provide a preferred
workplace, and to foster a culture of openness
and trust. In addition, employees supported
community improvement projects, and also
collaborated on HSE challenges with our
customers. As a result of our efforts, we were
recognized as leaders in the energy sector in a
number of investor rankings.
Investor corporate social
responsibility rankings
Baker Hughes participates in a number of
investor sustainability assessments as a way of
benchmarking our global citizenship. Most of
the surveys evaluate a broad range of business
areas such as energy and the environment,
governance and compliance, risk management,
employee relations, and human rights.
Our corporate social responsibility (CSR) efforts
were recognized by the following investment
and media institutions:
nnDow Jones Sustainability Index. For the
second year in a row, Baker Hughes was
announced as a world sustainability leader
on the 2013 Dow Jones Sustainability (DJSI)
World Index. And for the first time, we
were also listed on the DJSI North America
Index. Baker Hughes was named as the
industry leader in the Energy Equipment
and Services sector.
nnCarbon Disclosure Project (CDP). In
the area of energy efficiency and climate
change, we were the highest-ranked
oilfield service company in the Energy
Equipment and Services sector. CDP
performance results are used in many
investor sustainability analyses.

DID YOU KNOW?

The rise of investor-led initiatives such as CDP reflects

the growing interest in socially responsible investment.
CDP has 722 institutional investors representing
USD 87 trillion in assets.

10 Baker Hughes Incorporated

Our commitment to being good corporate citizens is reflected in
the decisions and actions of our employees in the work we do
every day. We realize that we earn our license to operate by being
responsible members of the communities in which we live and
work. This involves considering not only the economic impacts of
our decisions, but also the environmental and social impacts, and
finding the right balance between people, planet, and profit.

2013 HSE Annual Report 11

Corporate Social Responsibility
nnCR Magazines Best Corporate Citizens.
In their 2013 Industry Sector Best
Corporate Citizens, CR Magazine listed
Baker Hughes as the highest-ranking
service company in the Energy sector at
seventh place overall. The list is compiled
from publicly available data covering
seven categories: environment, climate
change, employee relations, human rights,
governance, finance, and philanthropy.
nnBloomberg Environment, Social and
Governance (ESG) Disclosure Index.
Over the last three years, our company has
consistently achieved significantly higher
Bloomberg ESG performance disclosure
scores as compared with other companies,
including oilfield service companies.
Our employees
At Baker Hughes, we rely on the knowledge
and commitment of our diverse workforce at all
levels of our organization to meet our business
Baker Hughes gives students first-hand look at oil and gas careers
12 Baker Hughes Incorporated
goals and achieve profitable growth. We foster
a culture of proactive engagement where
employees are involved and enthusiastic about
their work and feel a strong connection to
the Company.
Diversity and Inclusion. We recognize that
by attracting, developing, and retaining a
diverse talent pool, our employees will make
better business decisions and the Company
will be a better partner with our stakeholders.
In addition, we believe in an inclusive culture
where everyone can excel regardless of gender,
age, nationality, or religion.
In early 2013, the North America Womens
Resource Group (NA WRG) hosted its second
annual two-day summit. Nearly 450 employees
participated, including 100 executives and
managers and 175 WRG team members
connected remotely from 8 locations across
North America. The summit demonstrates
our commitment to our diversity and
inclusion initiatives through networking and
panel discussions on topics to facilitate the
recruitment, development, and retention of
women employees.
In August, the NA WRG sponsored a visit of
22 Houston-area high school students to our
drill bits facility in The Woodlands, Texas. The
students spent the day learning about careers in
the oil and gas industry. This event was part of
the Science, Technology, Engineering and Math
(STEM) program which encourages students to
pursue careers in these disciplines. Through its
support of STEM, Baker Hughes helps promote
technology degrees and a career in the oilfield
service industry.
Employee engagement. Each year, Baker
Hughes measures employee engagement,
job satisfaction, and commitment to the
Company and colleagues. Seventy-two percent
of our employees completed the confidential
survey in 2013 to relay what is working, and
where we can improve. Overall, employee
engagement levels remained positive and
DID YOU KNOW?
In the employee engagement survey, 74% of employees
agreed Baker Hughes is a good place to work.
higher than an external company benchmark
at an enterprise level. Areas of strength include
feeling a sense of accomplishment, teamwork
and positive environment, and understanding
expectations. Areas for further improvement
include development and career opportunities,
employee recognition, and actions taken to
effectively compete in a global market. Survey
results enabled group managers to establish
and implement 2014 action plans around these
strengths and vulnerabilities.
Three questions related to HSE were included in
the employee engagement survey. These were
among the top positive responses as follows:
nn92% of employees agreed Every day, my
work group strives to create the Perfect
HSE Day with no injuries, spills or
driving accidents
nn95% of employees agreed Everyone in
this Company is responsible for reaching
our HSE goals
nn89% of employees agreed When an HSE
incident occurs, we determine the root
cause and implement solutions to
prevent reoccurrence
2013 HSE Annual Report 13
Corporate Social Responsibility

Employee Ombuds. Baker Hughes ombuds

(o3) office is a progressive initiative that
was voluntarily established by executive
leadership and follows the ethical principles
established by the International Ombuds
Association. It provides employees a safe
and confidential place to obtain information,
discuss their concerns, and evaluate options.
The ombudsmen work with employees through
any job-related issue, from a minor annoyance
Martin Craighead states his commitment to the military
to a serious concern on policy or law. The o3 recruitment program at the Veterans Resource
complements, but does not replace or compete Group (VRG) meeting
with, any other resource in the Company, such
as line management, human resources, HSE,
legal, or our ethics and compliance helpline. tap into a diverse, dedicated, and highly skilled
The existence and use of the o3 further assures group of individuals that are transitioning from
that the Companys core values are not merely military service to civilian life. Veterans bring
philosophical, but an integral part of how leadership, drive, dedication, discipline, and
we work. The o3 completed the first full year loyalty to Baker Hughes. The goal is to fill 15%
of operation in 2013. Initially, the office was of available positions in the U.S. with veterans.
established to serve employees in the U.S., Veterans resource groups will be an employee-
and Trinidad and Tobago, and in October, was run resource open to all employees that are
expanded to support our employees in Canada. passionate about advocating for veterans.
Resource group members will volunteer their
Military Recruitment. In February, Martin time supporting our veteran employees.
S. Craighead, President and Chief Executive
Officer, signed into effect a new military
recruitment program. This program allows us to

DID YOU KNOW?

More than 550 employees have reached out to the

o3. These employees represented all levels of the
organization, all groups and product lines, and range
from the newly hired to our long-tenured employees.

14 Baker Hughes Incorporated

Employees in Ghana renovate a local school for deaf children

Supporting our communities Figure 1. Baker Hughes Foundation charitable

Baker Hughes strives to make a positive contributions 2013

community impact with charitable contributions

at corporate, region and geomarket levels. In
2013, Baker Hughes operating regions made
contributions of more than USD 8 million to
charities around the world. In addition, the
Baker Hughes Foundation contributed around
USD 3 million, primarily to organizations
that target improvements in social sectors
supporting education, health, youth, and
culture (Fig. 1).

Education / scholarships
Matching Gifts Program
United Way
Health
Children / youth
Culture / museums
Other grants

2013 HSE Annual Report 15

Corporate Social Responsibility

More than 100 Baker Hughes interns volunteered at the Houston Food Bank

Baker Hughes employees have been active
in a wide range of social initiatives, such as
charitable events that promote sustainable
benefits to the enterprise.
For example, Baker Hughes won an award
from Ghanas Western Region Chamber of
Commerce and Industry for active involvement
in the community. Projects include the
renovation of a local school for the deaf in
which employees repaired the schools ceiling,
roof, and concrete floor, and painted several
classroom areas. Baker Hughes donated more
than 20 computers as well as equipment for
the sewing and woodworking classrooms.
The project gave employees the opportunity

DID YOU KNOW?

Following the devastation of Typhoon Haiyan in the

Philippines, Baker Hughes employees in Southeast Asia
raised funds that were matched by the Company. A
total of USD 10,000 funded relief aid to those directly
affected, along with 20 boxes of essential items
provided by our employees in Kuala Lumpur.

16 Baker Hughes Incorporated

to socialize with children and teachers, and
better understand the needs of the region.
Other community projects in Ghana included
donating treated mosquito nets and awarding
scholarships to six female engineering students.
Each year, Baker Hughes holds a social event
with our Houston-based university interns,
and last summer, 111 interns volunteered at
the Houston Food Bank for a day, packing a
total of 31,928 pounds of food and 26,606
individual meals. We wanted to do something
that would enable our university interns to
experience the community they were working
in, said Cheryl Piccio, University Relations
Intern Program Team Lead. We chose the
Food Bank because Baker Hughes has been a
strong supporter of the charity for many years.
PETRONAS official Dato Wee Yiaw Hin (left) at the opening of the new Baker Hughes Education Center
The interns really enjoyed the event and it
made their summer internship more meaningful
because it allowed them to touch the lives of
our citys needy.
Collaborating with our customers
We also support our customer sustainability
objectives. For example, we opened the
Baker Hughes Petroleum Education Centre
at Universiti Teknologi PETRONAS (UTP) in
Malaysia last year. The new center at UTP
offers an interactive, hands-on approach to
education. It is part of our pledge to foster
education in Malaysia, working in partnership
with PETRONAS and three other oil and gas
companies. Baker Hughes also awarded four
scholarships to university students.
2013 HSE Annual Report 17
Section 2

Health and Wellness

lth and Wellness
Employee Hea

Occupational Health Job Placement and

and Hygiene Assignment
Work related Assignment related
Protect worker health Ensure worker health
Medical surveillance Fit for duty
Exposure assessment Drugs and alcohol
Silica
Malaria

Personal Health and Hygiene

Person related
Inuence personal health
MD messages Flu shots
Health advisories Community outreach
Health fairs Smoking cessation

At Baker Hughes, the H in HSE means a Wellness communications

healthy employee. Healthy employees are
productive and make good decisions for our
company and our customers. The objective of
our Employee Health and Wellness program is to
optimize the health of Baker Hughes employees
to generate a positive impact on our business.
The components of the health program protect
worker health through occupational health and
hygiene, ensuring that the job assignment fits
the worker, and promoting personal health with
wellness support.
Communicating health information continues
to be a vital part of our health program. Each
month, our medical director (MD) provides an
informative bulletin, the Monthly MD Message,
to all employees. The emphasis is on personal
wellness, protection and early detection of
disease. Our 2013 health topics included:
prostate cancer, breast health, back health,
exercise, stress, along with heat induced and
insect borne illnesses.

18 Baker Hughes Incorporated

We believe that encouraging our employees to adopt healthy
behaviors at work and at home improves their quality of life. We
provide programs on occupational health and hygiene, fitness for
assignment and personal wellbeing. Healthy employees are more
productive, which also benefits our company and customers.

2013 HSE Annual Report 19

Health and Wellness

The pink drill bit arrives for use in Mossell Bay, South Africa

Health advisories remain an important part Cultivating healthy employees requires

of our wellness communications. With topics
ranging from polio to measles and dengue
fever, these disease specific advisories guide our
employees and their families when frequencies
increase in their area, providing information
about symptoms, treatment, travel precautions,
and most importantly, means of protection.
teamwork. To that end, Human Resources and
HSE partnered to create a stronger, consistent
message on wellness with Wellness 360.
Through this partnership, resources are focused
enterprise-wide on a single topic to enhance
the wellness message and coordinate health
promotion topics.

DID YOU KNOW?

Health advisories by the numbers:

nn62 issued in 2013
nn36 different countries
nn21 different endemic diseases

20 Baker Hughes Incorporated

In 2013, Wellness 360 emphasized our
support of breast cancer awareness in both
men and women. On the first day of Breast
Cancer Awareness month, Baker Hughes held
a press conference in our booth at the Society
of Petroleum Engineers Annual Technical
Conference and Exhibition (SPE ATCE) in New
Orleans. More than 100 media representatives,
customers, and employees joined in the
celebration that included giveaways and pink-
inspired refreshments.
During the press conference, Derek Mathieson,
Vice President of Strategy and Corporate
Development, announced our USD 100,000
donation to the Susan G. Komen Foundation
and launched the Doing our Bit for the Cure
campaign. This campaign was designed to
spread awareness by painting and distributing
500 pink drill bits to customers around the
world. These drill bits also included the Susan
G. Komen ribbon logo. Everywhere, from the
rig floor to the customers office, operators and
Baker Hughes employees are starting to look
out for these pink bits and send back stories
and photos.
Occupational health and hygiene
Industrial hygiene efforts focus on the
anticipation, recognition, quantification, and
control of occupational exposures to vapors and
dusts. We continue to leverage our industrial
hygiene services by using external resources
while providing a standard data gathering and
reporting protocol, and by having our own
industrial hygienists work closely with our field
HSE representatives to provide expertise and
training. This year, we collected extensive data
on hazards such as chemicals, noise, and dust
particles to assure safe working conditions for
our employees, customers, and contractors.
Engineering controls were developed and
validated to reduce the potential exposure
to respirable crystalline silica on hydraulic
fracturing jobs. Such control measures can
reduce exposures through process changes,
with the goal of reducing personal protective
equipment requirements. Health professionals
worked hand in hand with Pressure Pumping
engineers to validate the effectiveness of
proposed engineering controls through
exposure monitoring. One area receiving special
attention was the equipment used to move sand
during hydraulic fracturing. Improved controls
under evaluation include adding a local exhaust
system to the sand mover; providing automated
control of the equipment, thus removing an
operator from the regulated area; and providing
discharge chutes and covers on the transfer belt
to the blender. All these engineering changes
effectively reduce worker exposure.
Hydraulic fracturing sand mover with internally designed
vacuum system
2013 HSE Annual Report 21
Health and Wellness

Industrial hygiene internships

Our industrial hygiene interns such as Joseph Jay
Prescott benefit from the practical experience of
participating in engineering/industrial hygiene
projects. As one of ten interns hosted over the
past five years, Jay actively participated in this
years evaluation of engineering controls for
hydraulic fracturing activities. Other projects took
him to a drilling fluids location and several bulk Jay Prescott, Industrial Hygiene Intern

cement plants in the southwest to evaluate worker

exposure to dust and noise. He also monitored welding fumes, metal working fluids,
paints and biocides at various locations, including well sites. The data he provided on
our acrolein based biocide not only provided information to verify work practices, it also
produced key information for a health hazard profile to share with customers.

Malaria
Our continuing emphasis on malaria reduction 24 percent were from insect bites, and
has yielded results. Malaria cases were reduced 21 percent were from heat stress. Chemical-
85 percent, from 12 cases in 2012 to two related incidents continue to be a contributor to
in 2013. When travelling in regions where worker illness. Our health program emphasizes
malaria is present, our employees consult the prevention of spills, personal protective
with a travel medicine specialist about the equipment, and awareness to potential
use of antimalarial medication. They also exposures. Prevention of our other top health
obtain two kits, a Malaria Personal Protection risks, such as insect bites and heat stress, are
Kit and a Malaria Survival Kit from the local covered in our monthly health messages.
Malaria Control Officer. The Malaria Personal
Protection Kit is effective in preventing bites
from malaria-infected mosquitoes, as well as 2013 Health-related categories
from mosquitoes infected with other diseases,
including West Nile Virus, Dengue Fever, and
Yellow Fever. Chemical 48%
Insect bites 24%
Heat stress 21%
Health incidents
Other 7%
Despite best efforts, Baker Hughes experienced
a number of workplace-related illnesses. Of
the 125 health-related incidents reported,
48 percent were related to chemical exposure,

22 Baker Hughes Incorporated

Emergency response
Emergency response planning continues to
play a critical role in our Employee Health
and Wellness program across our operations
globally, as demonstrated in the photograph of
hands-on training in Latin America. In Houston,
Texas, Baker Hughes has partnered with the
Harris County Emergency Corps. to improve
training capabilities for local emergency
response teams. A donation of USD100,000 Emergency response training - photo courtesy of Harris
has enabled the emergency corps to add several County Emergency Corps

training rooms, a computer laboratory, and two

simulator rooms, and also to add personnel to
train 300 people annually.

We continue to promote wellness, prevent

disease, and evaluate and reduce exposures to
chemical, physical and biological agents that
can affect health. The Wellness objective for
2014 includes promoting health stations to
provide a central facility location for fitness and
nutrition information. These stations will also
allow employees to monitor their own personal
metrics like weight, body mass index and
blood pressure. In 2014, efforts will continue
to reduce exposure and improve engineering
controls to protect worker health.
Employees practicing medical emergency procedures in
Santa Cruz de la Sierra, Bolivia

DID YOU KNOW?

Reducing sedentary behaviors by sitting less and moving

more can improve your health. Active ideas:
nnHave walking conversations versus sitting
nnTake family walks after dinner
nnTrack your steps and aim for 10,000 steps a day
nnStand up and move after 30 minutes of sitting

2013 HSE Annual Report 23

Section 3

Personal and
Process Safety
At Baker Hughes, our goal is to make today,
and every day, a Perfect HSE Day that is,
a day with no injuries, no accidents, and no
harm to the environment worldwide. The
Perfect HSE Day initiative was developed and
launched in 2013 to simplify and personalize
HSE performance for our nearly 60,000 permit

employees. During the year, more than 60

local teams achieved 365 Perfect HSE Days,
comprising nearly 7,500 employees, or 9% of
our workforce. As a company, we achieved one
month of Perfect HSE Days.
DAYS
Stop Work
Stop Work authority is a proactive measure
that employees can deploy to prevent incidents
whenever they have concerns about inadequate
control of HSE risks. In 2013, we elevated

30
However, we tragically lost six of our fellow
employees in the first four months of the
year in work-related accidents. Transportation
accidents resulted in four of the six losses
and remains one of our highest risk activities.
Two losses were the result of a single vehicle
accident and two others were from a fatal
helicopter crash. The final two fatalities were
the result of a dropped-object incident and an
electrocution. To help eliminate serious injuries
Stop Work beyond an expectation of our
employees; it became a personal obligation
and responsibility. Employees performed nearly
43,000 Stop Work actions, an increase of 60%
from the previous year and more than twice
the number from two years ago (Fig. 1). This
demonstrates that employees are increasingly
using their Stop Work authority, which is
reflected in our mature safety culture and
reduced incident frequency.
Figure 1. Stop work yearly comparison
50,000
40,000

and fatalities in the workplace, Baker Hughes 30,000

highlights Life Rules! which are a formal set
20,000
of rules related to life critical hazards. There are
ten Life Rules, each with a corresponding icon 10,000
to help employees quickly identify the hazard.
0
2008 2009 2010 2011 2012 2013

24 Baker Hughes Incorporated

We take safety, including process safety very seriously. This means
understanding our risks and ensuring the right controls are in
place throughout our operations. Through the new Life Rules!
Program, we are focusing on the most critical hazards and risks to
protect our colleagues, customers and others that work with us.

2013 HSE Annual Report 25

Personal and Process Safety

Figure 2. Three year injury rates and rig count

2.0 4,000

1.5
TRIR
DAFWCR
IADC TRIR
1.0 3,500
SSE TRIR
Rig count

0.5

0.0 3,000
2011 2012 2013

Enterprise employee injury/illness
performance
We achieved a 14% reduction in 2013 Total
Recordable Incident Rate (TRIR), surpassing
our 10% goal for the year. Although 66 fewer
recordable incidents occurred than in the
previous year, 580 employees still suffered a
recordable injury.
In addition to successfully lowering our TRIR,
we achieved an 18% reduction in our Days
Away From Work Case Rate (DAFWCR). Our
key HSE performance metrics continue to
outperform the International Association of
Drilling Contractors benchmark, and are in the
top quartile across the industry (Fig. 2).
Our loss control triangle (Fig. 3) shows that
employees submitted 487,060 observations
in 2013, a 20% increase year-on-year. This
increase correlates directly with our improved
safety and environmental performance.

Figure 3. Loss control

6 Fatalities

152 Days Away From Work Cases

422 Other Recordable Cases

1,486 First Aid Cases / Near Misses

487,060 Observations

26 Baker Hughes Incorporated

Injury/illness data analysis
Figs. 4 and 5 illustrate the top five injured body
parts and the six most common types of injuries
sustained in 2013. Hand and back injuries
continue to be the most frequent body parts
affected. Combined, these injuries constitute
44% of the recordable injuries for the year
(Fig. 4). Although sprains and strains continue
to be the most prevalent type of injury, we
experienced a 14% reduction compared to
2012 and 31% compared to 2011 (Fig. 5).
Recordable injuries predominantly occurred
at the wellsite or at a Baker Hughes facility.
Together these locations accounted for 82%
of the recordable injuries (Fig. 6).

Figure 4. Top five most affected body part recordable incidents

Hand 27%
Back 17%
Shoulder 10%
Arm 8%
Knee 8%
Other types 30%

Figure 5. Nature of injury Figure 6. Recordable incidents by locale

200
2011
150 2012
2013
100

50

0
Sprain/ Laceration Fracture Contusion Abrasion/ Crushing
Strain Scrapes
Client-wellsite
Baker Hughes Service Center / Warehouse
Baker Hughes Manufacturing / Engineering
In-transit

2013 HSE Annual Report 27

Personal and Process Safety

Transportation safety 5-year motor vehicle accident rates

2.5
Our transportation safety performance
improved last year. Our recordable Motor 2.0

Vehicle Accident frequency improved 4%, and

1.5
our overall accident frequency rate (all severity
1.0
classifications) decreased by more than 9%.
While these are very encouraging results, we 0.5

still have many opportunities for improvement.

0.0
As in the past, the majority of our recordable 2009 2010 2011 2012 2013

accidents were due to a combination of factors,

but excessive speed for road and weather
conditions, improper following distance,
poor driver awareness of surroundings and
inconsistent journey management practices
continue to be our most frequent contributors,
reflecting the need for continued training and
strong oversight programs.
MVCR
MVAR
LVAR
PVAR
To address these issues, we completed a
thorough driving training program strategy
addressing not only the Baker Hughes-
specific driver training components (core
defensive driving), but also driver trainers and
assessors (Transportation Trainer and Assessor
Certification Course). Further support for these
two programs will come with the introduction
of the Transportation Safety Management
Leadership Program in Q1 2014. All three
programs will also be introduced globally. And,
we have initiated plans to pilot a state-of-the-
art driving simulator.

DID YOU KNOW?

With an increased focus on performing tasks correctly,

Baker Hughes achieved a 31% decrease in sprains and
strain-related injuries in the last two years.

28 Baker Hughes Incorporated

Air transportation
Following the tragic loss of two employees in
a helicopter crash in April 2013, we conducted
a thorough air safety audit of all three
helicopter providers under direct contract with
Baker Hughes. We also initiated a systematic
worldwide safety assessment of more than
100 helicopter service operators provided by
our customers to transport our employees to
offshore or remote land locations. Additionally,
we have developed stronger helicopter safety
processes and are working closely with an
international aviation safety consultant to
develop stronger operational controls and
tools to help us mitigate these hazards.
In 2014, we will increase our focus on leading
indicators to measure and drive overall HSE
performance. Our key proactive measures will
include the following.
nnActive leadership engagement in HSE
through hands-on activities such as job site
visits or town hall meetings
nnStrong employee participation in our
behavior-based observation program
nnRobust reporting of near-miss events with
resolution of issues before a negative
impact or injury occurs
nnEvaluation of safe driving behaviors
through our in-vehicle monitoring systems
nnPrompt closure of audit findings/
nonconformances

DID YOU KNOW?

In Thailand, where many of our employees ride scooters

to work, we provided motorcycle helmets to promote a
stronger safety culture on and off the job.

In 2013, Baker Hughes vehicles travelled more than

310 million miles globally. This is roughly equivalent
to 682 round trips to the moon or almost 13,000 times
around the globe.

2013 HSE Annual Report 29

Personal and Process Safety
Process safety
In order to prevent major accidents arising
in our field, pipeline or chemical processing
operations, Baker Hughes applies a process
safety framework (Figure 1) that establishes
good design principles, engineering,
construction, operating, and maintenance
practices, while ensuring that products are
structurally and mechanically sound. This
framework includes the application of barriers
(control measures) and safeguards designed to
control risks that could result in a major spill,
release of gases to the air, or harm to people,
including surrounding communities.
Downstream process safety
Our downstream process safety system ensures
safe and reliable operations at our chemical and
industrial services reaction and blend plants. In
addition to compliance with local and country
regulations, all of our plants are governed by
the Baker Hughes process safety management
system. Our efforts over the past two years
have focused on developing and implementing
components of our process safety management
system including:
nnProcess safety information (PSI)
contains details on the hazardous
chemicals used or produced by the
process, the technology of the process,
and the equipment in the process. PSI for
our plants, including Piping & Instrument
Diagrams, equipment data sheets, process
control data, and related information
was reviewed and verified for accuracy
in 2013. The plants use a combination
of manual and automated controls to
regulate the chemical processes, and
operating procedures are
certified annually.
30 Baker Hughes Incorporated
Figure 1. Process safety framework
Design and Risk
Engineering Management
Human Multibarrier
Factors Philosophy
Measurement
Competency
and Review
Process and
Procedures
nnProcess hazard analysis (PHA)
a systematic engineering approach for
identifying, evaluating, and controlling
potential hazards of processes involving
highly hazardous chemicals. All PHAs are
current including the required five-year
revalidation, and PHA action items are
tracked for completion. Layers of protection
or barriers are analyzed and installed to
mitigate identified risks.
nnManagement of change (MOC)
the system to address contemplated
changes to a process, evaluate their
impact on health, safety, and environment
(HSE), and identify necessary changes to
operating procedures. The MOC process
was enhanced in 2012 and our chemical
plants average 100 MOCs each month,
demonstrating their commitment to safely
managing the continued growth and
change in our operations.
Our employees are trained on their specific
processes and are recertified on a regular
schedule. Our inspection and testing of
equipment for mechanical integrity includes
Recognized and Generally Accepted Good
Engineering Practices, which include
industry recommended practices, equipment
manufacturer requirements, and general
preventive maintenance recommendations.
Upstream process safety
Our upstream process safety program focuses
on products and services to assure wellbore
integrity. This is accomplished through the
application of barriers (control measures), and
safeguards designed to control risks that could
result in the release of hydrocarbons, causing
harm to people or the environment.
Various tools are used to ensure subsurface
threats are understood and controls are in place
to mitigate hazards. In 2013, Baker Hughes
launched our Think Process Safety campaign
along with 10 Critical Requirements of Upstream
Process Safety (Fig. 2).

Figure 2. Ten critical requirements of upstream process safety

BARRIERS LOST BARRIER

Know your equipment, If a barrier is lost,
process, and people immediately stop
barriers and confirm and fix it.
they are in place
and tested.

SUBSURFACE WELL CONTROL

UNCERTAINTIES EQUIPMENT
Know and Know your well
communicate control equipment
subsurface and confirm its
uncertainties. certified and tested.

TRAINED PEOPLE POLICIES &

Confirm all people PROCEDURES
are trained and Follow policies
competent for and procedures
the task. or get approval
to deviate.

RISK ASSESS WALK THE LINE

HRA
Perform risk Walk the line on
assessments during temporary rig-ups
planning and for and confirm set-up
changes. = layout drawing.

EMERGENCY REPORT / LEARN

RESPONSE Report Process
Test your emergency Safety incidents and
responses and Process Safety Near
conduct regular Misses, investigate,
drills. share, and learn.

2013 HSE Annual Report 31

Personal and Process Safety
As an expansion to our traditional failure,
mode and effects analyses, we overlaid an
additional risk analysis methodology, the bow-
tie analysis (Figure 3), to provide a more visual
representation of potential threats and control
measures to ensure jobs are conducted safely.
A series of 22 bow-tie analyses were conducted,
field tested, and published last year for
operations presenting the most critical HSE risks.
In 2013, our competency management
program gained global certification through
the International Association of Drilling
Contractors. Through completing a tailored
learning and development path, with regular
worksite assessments, our workforce develops
competence to perform safety-critical tasks.
To date, more than 75,000 competency
assessments have been completed and are
tracked in our learning management system.
Baker Hughes was awarded second place in SHELLs Process Safety Video Challenge for our musical number
Think Process Safety!
32 Baker Hughes Incorporated
In Q4 2013, an enhanced upstream process
safety awareness training course was launched,
which focused on the 10 critical requirements
and on risk management during service
delivery. To date, 11,546 employees have
completed this training.
Midstream process safety
Our midstream business helps our customers
assess and maintain the integrity of their
new and existing pipeline systems and
process plants. We use a rigorous protocol
of engineering design, review, and hazard
and operability analysis conducted jointly by
the client and Baker Hughes engineers. In
2013, we conducted more than 3,000 tenders
using this process. Our support occurs during
the precommissioning, commissioning, and
decommissioning phases of projects. For 2014,
the midstream team will expand its assessment
capabilities through the use of bow-tie analysis
which will be included in our competency
assurance program.
Figure 3. Managing risk with bow-tie analysis

Failure of C1
Equipment

Improper
Design
Fatality
Follow customer
Failure Trending emergency response
Analysis procedures

Review of Example:
PDM Process Customer/Client Loss of Primary
Requirements
Loss of Well
Containment
Follow customer Control
emergency response
procedures

Spill or
Equipment
Release to
Malfunction
Pre-job Function Testing
Follow customer Environment
emergency response
Analysis at Rig Site
procedures

Baker Hughes is committed to working with
industry groups and regulatory agencies
to further strengthen the principles of
process safety in our organization and the
industry. Additionally, we partner with our
industry colleagues on various committees
in organizations such as the Center for
Offshore Safety and the International Oil and
Gas Producers Association to develop new
standards, best practices, and key performance
indicators related to process safety in the oil
and gas industry.

2013 HSE Annual Report 33

Section 4

Environmental
Performance
Our environmental stewardship efforts continue of our business units with internal and
to focus on resource conservation to reduce external partners, and the engagement and
energy use, greenhouse gas emissions, and commitment of our employees.
water consumption. This focus aligns with
our sustainability strategy, contributing Resource conservation
to the long-term profitable growth of the Our overall resource reduction results were
company while enhancing the lives of people normalized to revenue and calculated as a
and the environment. We achieved a 13% weighted average from our top three resources:
overall reduction in our resource use in 2013, nnElectricity 40%
exceeding our 10% goal. A critical component nnNatural gas 40%
of our success was the collaborative efforts nnWater 20%

Resource reduction results

Overall resource reduction: 13%

Electricity: 10%
Natural gas: 13%
Water: 17%
Greenhouse gas emissions: 16%

34 Baker Hughes Incorporated

Our commitment to protect the environment is anchored in our
HSE and Climate Change Policy Statements. These policies outline
our commitment to promote a culture of continuous improvement
through the development and implementation of operational
standards and best practices that protect the environment and the
communities in which we live and work.

2013 HSE Annual Report 35

Environmental Performance

We achieved a 10% reduction or more in each Energy efficiency and greenhouse

resource category: electricity, water, natural gas, gas emissions
off-road diesel, propane, and fuel oil (Fig. 1). To support our commitment to manage the
risks associated with climate change, we
These results are calculated from resource data calculate greenhouse gas emissions from our
for 221 facilities tracked through GreenLink, global energy use. Three years ago, we began
our environmental performance database. reporting energy savings achieved through
These facilities represent more than two-thirds energy efficiency projects, and in 2013 we
of the energy and water used across our global developed a formal energy management
suite of manufacturing and operations facilities. standard for identifying significant energy
sources and implementing measures to
Our conservation efforts continue to enhance effectively reduce energy use.
our financial performance. During 2013, our
total energy savings were estimated at about
USD 10 million.

Figure 1. Progress towards 10% reduction goal by resource type

Off-Road
Electricity Natural Gas Water Diesel Propane Fuel Oil
0
Percentage Change Year-on-Year

-10 Goal 10%

-20

-30

-40

-50

36 Baker Hughes Incorporated


Emissions reduction and CO2e savings
Energy Resources: 38,000 metric tons CO2e
Sustainable Buildings: 8,000 metric tons CO2e
Transportation: 7,500 metric tons CO2e
We met our greenhouse gas emissions
reduction target for 2013, eliminating 38,000
metric tons of carbon dioxide equivalent (CO2e)
through heightened employee awareness
of energy conservation and specific energy
reduction projects at our facilities. Through our
continued application of sustainable building
technologies, we saved an additional 8,000
metric tons of CO2e. Emissions from fleet
transportation and rental car mileage decreased
3% from 2012, eliminating an extra 7,500
metric tons of CO2e.
Minimizing our carbon footprint
We remain committed to data quality and
transparency in reporting our carbon footprint.
Last year, we were the highest ranked service
DID YOU KNOW?
Our total CO2e savings of 53,500 metric tons was equal
to the annual greenhouse gas emissions from more than
11,000 passenger vehicles.
company in the energy sector for the Carbon
Disclosure Project. Our score was a significant
improvement over the previous year, and we
ranked highest in the areas of governance and
strategy, verification, stakeholder engagement,
and opportunities.
We continue to improve energy efficiencies
in our facilities. Our most significant energy
conservation effort last year focused on
building automation systems, including
upgrades or new installations at 51 locations
worldwide. Highlights of additional projects
include the following:
nnRedesigning water chiller systems
nnConverting from diesel power generators
to grid-supplied electricity
nnOptimizing production scheduling
(minimized equipment shutdown
and startup)
nnRetrofitting light fixtures
nnReplacing equipment with
energy-efficient versions
We will continue to improve energy efficiency in
future years as we implement our new energy
management operational control procedure,
which is aligned with the recent ISO 50001
standard for energy management systems.
2013 HSE Annual Report 37
Environmental Performance

Water conservation To further reduce the potential impact on

Water is critical for the upstream oil and gas
industry, so reducing fresh water use through
proactive water management practices is a
high priority. Our efforts focus on developing
technologies and services to promote water
reuse and maximize water recycling. In 2013,
these efforts reduced water use at our facilities
by 17% (normalized).
Fig. 2 illustrates the results of our efforts to
reduce water use and disposal, and
increase recycling.
fresh water sources, we use several water
management tools (e.g., IPIECAs Global Water
Tool for Oil and Gas, GEMI Local Water Tool
and the Maplecroft Global Water Security Risk
Index) to identify operations that are located
in water-stressed areas. Approximately 25%
of the countries we operate are at risk for
water shortages. Knowing which areas have a
higher potential for water scarcity allows us to
better plan water management strategies and
reduce risk.

Figure 2. Water profile

3,000
Mass (Thousands of Metric Tons)

2,500 2011 Actual

2012 Actual
2013 *Normalized
2,000

1,500

1,000

500

0
*Water Consumption Disposed Wastewater

DID YOU KNOW?

Across the company we conserved 308,000 metric tons

of water, which is enough to fill more than 1.5 million
standard-size bath tubs.

38 Baker Hughes Incorporated

Facility water cycle management in diverse conditions
Managing the challenges of water supply and demand is an expanding concern on a
global basis, especially in regions where water is a scarce resource. Our internal water
management tool was developed to assess and quantify water management components
and identify strategies and technologies for managing a facilitys water cycle. This tool was
used for seven facilities in Africa and its use was later expanded globally. As a result, water
management techniques were successfully incorporated at facilities in Iraq and Brazil, as
highlighted below.

Basra Iraq facility

At our base of 600 employees, about 7,500m3 of potable water was consumed per month
with an average of 180m3 disposed every day, representing about 70% of the supplied
water. Optimization efforts included separation of potable and nonpotable (i.e., river) water
sources to reduce the use of potable water, which is in scarce supply in the area. The water
quality required for process water was met by substituting filtered river water. We reduced
potable water use by 5,400m3 per month and reduced costs by 34%. Waste water disposal
was also cut by 16% with the installation of a wastewater recycling system.

Macae, Brazil
A recycling system was installed to treat oily waste water generated from washing
oilfield trucks, skid units, and other equipment. A flocculation system was chosen, with
approximately 143m3/month of wastewater treated and reused, reducing fresh water use
and saving more than USD 19,000 per month for disposal.

2013 HSE Annual Report 39

Environmental Performance
Last year, our water conservation projects
included identifying water sources other than
potable water for use in operational processes
and landscape irrigation. An internal water
cycle management tool was developed to
further our understanding of operational
water usage requirements and the associated
environmental aspects so we can effectively
manage water throughout its life cycle. The
development of a strong plan for the water
management cycle reduces costs, ensures a
sustainable supply, and addresses community
needs and concerns. This tool is used when
designing new facilities and when upgrading
existing locations.
Waste minimization and recycling
Our approach to waste minimization
emphasizes source reduction (elimination),
recycling, reuse or reclamation, and proper
disposal of any remaining wastes. Waste
minimization aligns with our sustainability
efforts by conserving natural resources,
preventing pollution, and reducing disposal
and compliance costs.
DID YOU KNOW?
Our employees recycled 120 metric tons of electronics in
2013. This is equal to the weight of 9 Big Ben bells in the
Elizabeth Tower at the Westminster Palace
in London.
40 Baker Hughes Incorporated
All operations are required to prepare a waste
management and minimization plan to identify
waste streams and reduction strategies along
with approved waste vendors. In 2013, waste
(992,000 metric tons) and recycling (26,000
metric tons) volumes decrease by 1% and
41%, respectively. The decrease in waste
was due largely to the increased efforts of
our Pressure Pumping product line and our
facility consolidations. Wastewater remains
our largest waste stream and comprises
98% of our total waste. Less than 1% of all
waste (approximately 8500 metric tons) was
categorized as hazardous. We believe our
recycling volumes have decreased concurrent
with improved efficiency throughout our
operations, especially in supply chain.
About 70% of our total recycled materials
is comprised of metals (55%) and solvents
(15%). The remaining 30% consists of
wastewater, wood, and empty industrial or
consumer containers.
Recycling revenue
We continue to collaborate with vendors
to remarket and recycle obsolete electronic
equipment and to incorporate mixed media
materials into existing services. As illustrated in
Fig. 3, USD 18 million in revenue was obtained
from our recycling efforts, with USD 0.5 million
expensed to recycle some materials.
Additionally, we have diverted 9% of our used
materials from landfills by recycling, which
resulted in a disposal offset of about
USD 0.4 million in the U.S. alone. The net
gain from recycling is about USD 17.5 million.

Figure 3. Recycling revenue

Net gain
USD 17.5 million

Revenue Cost
USD 18 million USD 0.5 million

Disposal offset
USD 0.4 million

DID YOU KNOW?

More than 15,000 metric tons of metal were recycled by

employees last year. This is enough metal to construct
225 Boeing 747 airplanes.

Our estimated total CO2e savings from recycled paper,

cardboard and wood resources is equal to the amount
of carbon sequestered annually by 2,397 acres of forest.
This is equal to nearly 700,000 trees.

2013 HSE Annual Report 41

Environmental Performance
Spill performance
Any spill can pose a risk through potential
harm to the environment, possible community
impacts, worker exposure, and unnecessary
waste and downtime. Our goal is to have a
Perfect HSE Day every day and that means no
harm to the environment. Spill prevention is
critical and benefits everyone.
In keeping with the Perfect HSE Day, we
implemented comprehensive spill prevention
procedures and response plans in 2013, along
with engineered specifications to improve
our chemical storage and handling practices.
We also analyzed spills based on the total
number of spill incidents and total volume,
with an emphasis on spills considered serious
or major (1-10 bbls and >10 bbls, respectively).
Additionally, spills occurring within and outside
containment were given special consideration,
including those released to water or soil.
Figure 4. Spill severity by volume
5,000
4,000
Volume in BBLs
3,000
2,000
1,000
0
2011 2012
Minor (<1 bbl)
Serious (1 10 bbl)
Major (>10 bbl)
42 Baker Hughes Incorporated
In 2013, we had 1,129 spill incidents totaling
3,719 barrels, reflective of a 6% normalized
decrease in volume year-on-year. Additionally,
the volume of serious/major spills decreased
5% as illustrated in Fig. 4.
Of the spill incidents we classify as serious or
major, 61% occurred at customer sites, 33% at
our facilities, and 6% during transport. While
the number of spills is higher at customer
sites, the overall volumes are greater at our
Baker Hughes facilities. Only 5% of our serious/
major spill incidents occurred offshore, which
represents only 1% of the total volume.
Spill incidents
Most spills reported are relatively low-volume
incidents, with just 6 spills (1%) contributing
50% of the total volume. Of our serious
and major spill incidents, 55% were fully or
partially contained, which accounts for nearly
70% of the total volume (2,408 bbl). These
large spills receive considerable attention,
with executive participation in the incident
review. However, we expect the cause of
all spills to be investigated, so appropriate
corrective actions can be taken to prevent
recurrence and eliminate spill risk factors
throughout our operations. We continue to
improve spill transparency by encouraging
employees to report all spills, large or small,
in our incident reporting system. As illustrated
in Fig. 5, reporting of spills less than 1 barrel
increased 8% from last year, while total volume
decreased 6%.
2013
Effective response strategies ensure that all
spills are remediated promptly with minimal and
temporary environmental impact. Continued
visibility of all spill incidents, appropriate
corrective action and spill prevention campaigns
will continue to drive improvements.
Spill causes
Identifying the causes of spills enables training
efforts and resources to be targeted to these
risks. The top five causes of serious/major
spills (top 6% with 80% total volume) during
2013 are illustrated in Fig. 6. Valves left open
contributed to about one-third (31%) of these
spills. The second most frequent cause was
listed as Other, which includes factors such
as weather, sabotage, and human error.

Figure 5. Number of spill incidents by severity Figure 6. Spill causes

1,200

1,000
Number of Spill Incidents

800

600

400

200

0
2011 2012 2013

Minor (<1 bbl) Valve left open 35%

Serious (1 10 bbl) Other 30%
Major (>10 bbl) Equipment / pump failure 20%
Hose rupture / popped off 8%
Overfill 7%

DID YOU KNOW?

In 2013, Baker Hughes launched the Greenlink

Dashboard. The Dashboard provides real-time
performance data to show progress on
environmental goals.

2013 HSE Annual Report 43

Environmental Performance

Spill costs Environmental reserves

While spill incidents are an important indicator
of environmental performance, they also affect
our environmental costs. Total spill costs were
approximately USD 4.1 million in 2013. This
marks a 5% overall decrease year on year, and
a 37% decrease in third-party cleanup costs.
Continued emphasis on inspections, analysis
of risk factors, proper controls, and effective
response have contributed to this success.
Environmental remediation is managed
centrally, and accrued reserves are audited
periodically to ensure compliance with the
U.S. Sarbanes-Oxley Act and Securities and
Exchange Commission requirements. At year
end, we reserved a total of USD 34 million for
remediation at 72 sites, including USD 4 million
for Superfund Liabilities. Cash spending totaled
about USD 7 million, down 11% from 2012.
The environmental reserve trend for the past
three years is illustrated in Fig. 7.

Figure 7. Environmental reserve trend Figure 8. Benchmark analysis:

Environmental reserves as a percent of revenue
40
0.8
35 0.7
Percentage of Revenue
Reserve in Millions

30 0.6
25 0.5
20 0.4

15 0.3

10 0.2

5 0.1

0 0.0
2009 2010 2011 2012 2013 Superfund Remediation Total Reserves
Environmental Cost Type

Remediation
Customer reference
Superfund
Peer reference
Baker Hughes

* Note: Data obtained from publicly available information

(2013 10K filings)

DID YOU KNOW?

As part of our Perfect HSE Day initiative, a reusable

mug program was launched at 17 offices. More than
8800 employees made the commitment to stop using
Styrofoam in favor of the reusable stainless steel mug.
These efforts reduced the use of Styrofoam cups by
60%. With this success, the reusable mug program will
be expanded globally.

44 Baker Hughes Incorporated

Benchmark analysis:
Environmental reserves
An evaluation of Baker Hughes environmental
reserves as a percentage of revenue (Fig. 8)
indicates our liabilities are lower than our
peer and client references. Our lower ratio
compared with the client references may
reflect some differences in the nature of the
businesses and associated risks. However, our
lower remediation costs also may suggest more
effective due diligence to prevent acquisition of
new cleanup sites along with strategic, cost-
effective management of existing sites.
Environmental investment
In 2013, Baker Hughes incurred an estimated
USD 85 million in costs for environmental
protection and compliance management,
including permitting, waste disposal, spill
response, and other environmental activities.
These costs are essentially flat year on year.
Environmental capital costs of about USD
10 million include about USD 7 million to
conserve energy, with the remainder for
secondary containment structures to prevent
environmental impacts from spills and other
protective measures such as emission control
systems to protect air quality.

Celebrating Earth Day around the globe

Baker Hughes employees around the world celebrated Earth Day 2013 by participating in
activities that promote environmental awareness and connect employees with the world or
natural environment around them.

For example, the Wireline Services group in Vietnam organized an employee coastal
cleanup event to protect the environment and promote awareness among employees and
the community (pictured, below right).

In India, our employees at the Kakinada base planted trees around their location to
celebrate Earth Day. In a similar effort in Colombia, our employees started a tree planting
initiative in 2012 with 40 employees planting 65 trees in the forest. This event generated
interest and enthusiasm, and in 2013, more than 166 employees planted 285 trees
(pictured, below left).

2013 HSE Annual Report 45

Environmental Performance
Environmental stewardship in
hydraulic fracturing operations
While hydraulic fracturing has existed for many
years, it has attracted increased attention
in recent years because of the potential for
social and environmental impacts. We manage
the risks associated with this activity through
continued efforts to reduce environmental
impacts and by engaging with communities and
regulators to understand stakeholder concerns.
In October, Baker Hughes joined eight other
companies that are members of the Petroleum
Services Association of Canada to unveil a
Fracturing pumps converted to run on natural gas
46 Baker Hughes Incorporated
code of conduct related to hydraulic fracturing
operations. Development of the code involved
consultations with community stakeholders over
a six-month period. The code outlines standard
practices for technical and environmental
performance, as well as guidelines companies
should follow when dealing with community
groups and other stakeholders. It is intended
to increase public confidence in hydraulic
fracturing through transparency and consistent
best practices for these activities.
Laboratory testing of ClearStar fracturing fluid

We place a special emphasis on mitigating the
environmental risks associated with fracturing
chemicals. Our SmartCare qualified systems
and products have been in use since 2009 to
ensure the use of environmentally-preferred
products. SmartCare products are screened
through an advanced proprietary process. Since
2011, the component substances used in our
fracturing fluids have been disclosed in the
FracFocus registry. The chemical disclosure
registry serves a vital role in communicating
important chemical information to the public.

DID YOU KNOW?

At year-end 2013, our environmental services group

completed 239 product evaluations as part of the
SmartCare program, and developed a library of 251
substance hazard profiles, of which nearly 80% pertain
to hydraulic fracturing fluids.

2013 HSE Annual Report 47

Environmental Performance
Dry on the Fly process reduces transportation
In 2013, Baker Hughes announced the
introduction of the new ClearStar fracturing
fluid system that is an alternative to traditional
guar-based fluids. The supply of guar is highly
subject to the impact of climate change (drought
or flooding) in the areas from which this natural
product is sourced. The ClearStar system uses
a refined cellulose derivative polymer to attain
superior viscosity. In product testing, the
ClearStar fracturing fluid system produced an
average of 11% more cumulative oil over 350
days of production compared to wells stimulated
using premium, guar-based fluids.
48 Baker Hughes Incorporated
Two years ago, we introduced our first
bifuel (also called dual-fuel) pumps into our
U.S. hydraulic fracturing fleets. The Rhino
Bifuel pumps are able to replace as much as
70% of the engines diesel fuel supply with
natural gas (field gas, liquefied natural gas,
or compressed natural gas) with no loss in
hydraulic horsepower. This not only reduces
the carbon footprint of these jobs, but also
improves operational efficiency, lowers costs,
reduces safety risks, and capitalizes on the
availability of North Americas abundant natural
gas production supplies. We achieved a 32%
reduction in greenhouse gas emissions using
these bifuel pumps, based on calculations
completed for more than 50 wells. At the
end of 2013, we had 80 completed pumps
(six fleets) in U.S. land and 19 (one fleet) in
Canada. We are committed to convert all our
pumps to run on natural gas.
Since hydraulic fracturing uses more water
than any other phase of drilling or completing
a well, our Baker Hughes Water Management
team continues to develop technologies and
services that conserve fresh water through
reuse, thereby reducing transportation and
disposal. In November 2013, Baker Hughes
and DuPont Chemical Solutions announced
a strategic arrangement to bring more
sustainable water treatment technology to the
oil and gas industry. Chlorine dioxide will be
used in conjunction with our Baker Hughes
H2prO water management service so water
used in pressure pumping can be treated
onsite and reused. Chlorine dioxide has been
used for more than 60 years to prevent the
growth of bacteria and corrosion in municipal
drinking water, food processing, and industrial
cooling applications.
Historically, fracturing fluids were manually
premixed and then transported to the wellsite
for application. To prevent the premature
hydration of the gelling agent during
transportation, a large amount of mineral oil-
based material had to be added. The process
of mixing the fluids was labor intensive and
required protection from chemical exposure.
Our Baker Hughes Dry on the Fly hydration
system is a more sustainable solution that
eliminates these HSE issues. The mixing process
is automated at the wellsite, so the need for
mineral oil is eliminated. Since only the dry
powder is transported to the wellsite, the volume
of material transported is reduced by about
60%. In 2013, this resulted in approximately 280
fewer truck trips, with an associated reduction in
fuel consumption and emissions.

DID YOU KNOW?

Our Baker Hughes Water Management team has treated

and reused more than 50 million barrels of water for
hydraulic fracturing use in the past 18 months. In 2013,
Baker Hughes treated water for use in more than
350 wells in North America. Our operating capacity is
currently 2.5 million barrels of water per day.

2013 HSE Annual Report 49

Section 5
Driving Flawless
Execution
In order to minimize HSE risks and prevent
harm to people and the environment, it is
critical to understand the industry trends that
present HSE issues. One of the ways that we
validate our understanding of the trends is
through collaboration with our customers.
Engaging in this way, we share best practices
and identify ways to address the industrys
new challenges through our HSE management
system. We assure our management system
using tools such as the Baker Hughes Operating
System (BHOS), external certification to
international standards; and internally, through
our audit program.
50 Baker Hughes Incorporated
Shaping industry HSE performance
Baker Hughes works collaboratively within the
industry and directly with customers to address
common HSE issues and emerging challenges.
We are an active member of the International
Association of Oil and Gas Producers, serving
on the executive Management Committee
as well as many technical committees and
workgroups. Baker Hughes also is a member
of and volunteers subject matter expertise to
the technical committees and workgroups
of the American Petroleum Institute; and, is
active in committee work within the Society
of Petroleum Engineers, the Society of
Chemical Manufacturers and Affiliates, and the
International Association of Drilling Contractors
(IADC). In addition, we are one of the founding
members of the Center for Offshore Safety.
These contributions and participation all help
advance the industrys performance related to
HSE and social responsibility.
We believe we can improve safety across our industry by
collaborating with our customers and communities. We continue
to enhance our internal standards and practices to ensure our
efforts are focused and on-target. Through our audit program, we
verify that these standards are implemented and effective across
the organization.

2013 HSE Annual Report 51

Driving Flawless Execution

Along with many companies, Baker Hughes

subscribes to the services of Welling and
Company, an international research and
consulting firm that conducts specialized
market analysis in the energy industry and
related fields. In particular, we analyze
Wellings findings regarding the importance
HSE plays in the buying decisions of our
customers. For the third consecutive year
since 2011, their annual Customer Perception
Survey (Fig. 1) indicated that HSE is the primary
consideration of oil and gas companies when
choosing a contractor as a business partner.
The trend is growing year-on-year, confirming
our own analysis from our direct interaction in
the industry and with our customers.

Concurrent with our annual internal HSE

Baker Hughes HSE Exchange Forum Addressing Industry
performance review and development of
HSE Performance
next-year objectives, Baker Hughes hosts
an engagement forum to advance the HSE
conversation with and between oil and gas
companies and to provide deeper, collective
insight into factors driving HSE performance
across the industry.

Figure 1. Most important factors in selecting business partners according to our customers

3.0

2.5

2.0
Commitment to HSE
1.5 Equipment quality / reliability
Trained and capable field personnel
1.0
Availability / delivery
0.5 Technical support
Responsive to needs
0.0
Track record / experience
-0.5 Handle technical challenges
Price competitiveness
-1.0

-1.5
2009 2010 2010 2011 2011 2012

52 Baker Hughes Incorporated

Figure 2. OGP - June 2013 Safety Performance Indicators Report

7
Industry TRIR (per 1 million work hours)
Industry Lost Time Incident Rate (per 1 million work hours)
6 Industry Fatal Accident Rate (per 100 million work hours)

0
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

During the 2013 exchange forum, participants nnFinding solutions to eliminate hazards and
addressed one of our industrys most critical risks associated with
issues, the combination of a rather flat safety nnTransportation

performance (Fig. 2) in recent years and an nnHand injuries

upward trend in fatality frequency and nnPressurization

injury severity. nnFatigue

nnDropped objects
Attendees identified four primary areas of
focus: attrition/turnover; HSE cultures; risk Figure 3. Key areas of HSE needing focus by
perception/tolerance; and competence/technical the industry

proficiency (Fig. 3). The candid conversations 25 24% 24%

during the forum identified the following 22%

challenges to be tackled by our industry: 20 19%

nnFinding more effective/efficient processes
and systems to address
15
nnHSE culture
nnStop Work
10
nnRisk tolerance 7%
nnUpstream process safety
5
nnCompetency 3%

Risk tolerance
Inherent risk
Culture
Competency
Workforce
Other

2013 HSE Annual Report 53

Driving Flawless Execution
Baker Hughes produced and released four
videos to promote best practice in upstream
process safety; management of change (MOC);
Life Rules!; and, achieving the Perfect HSE Day.
The videos are available through
www.BakerHughes.com and YouTube.
Upstream Process Safety
Management of Change (MOC)
Life Rules!
Perfect HSE Day
DID YOU KNOW?
The HSE MS has more than 1,100 documents
translated in Spanish, Portuguese, Russian, German,
and Arabic combined!
54 Baker Hughes Incorporated
HSE management system
Our HSE management system (MS) continues
to provide the foundation of our HSE programs,
and consists of our HSE and Security (HSE&S)
policy statement, 16 elements, and a wide
variety of operational control procedures
designed to drive flawless execution. This
HSE MS continues to change and evolve to
meet the HSE needs of the business, which
was restructured to form 24 geomarkets. Last
year, the position of chief security officer and
vice president of HSE was separated and so,
the security team will be developing a new
management system for their procedures, but
will continue to use and reference applicable
procedures covered in the existing HSE MS.
Policy
Our HSE&S policy statement was amended
to further strengthen our commitment to
protecting people and communities, company
assets, and the environment. The emphasis
on Stop Work was enhanced by making it an
individual obligation and company responsibility,
and process safety is now included to reflect our
heightened commitment.
Baker Hughes Operating System (BHOS)
Last year, we migrated the entire HSE MS,
including all translated procedures, into BHOS.
This migration strengthened our commitment
to driving consistency and conformance by
providing employees a centralized location to
access all HSE and technical procedures. User
interface was enhanced by providing
employees visual BHOS icons, to identify
approved procedures.
Competency
Learning is a core value at Baker Hughes
and we believe that our training programs
are critical to our business success. In 2011,
Baker Hughes became the first integrated
oilfield service company to receive the new
accreditation from IADC for our Competence
Management Program for the Gulf of Mexico.
Last year, we made history again by obtaining
full global accreditation from IADC for our
Competence Assurance Program. To date,
more than 2,700 technical assessments have
been conducted to ensure that employees are
competent and have acquired the necessary
skills to perform their jobs safely and advance
their careers. Although the performance criteria
for each assessment are unique, there is one
commonality; the first component of every
assessment is safety. Placing safety first ensures
employees can effectively execute tasks and
mitigate risks to fulfill our HSE commitment and
exceed our customers expectations.
Within Baker Hughes, a technical workforce
of 20,000 employees has completed more
than 75,000 technical assessments.
External validation by Bureau Veritas
A number of our facilities obtain external
certification of their HSE management
system to International Organization of
Standardization (ISO) standards. To achieve
greater organizational and cost-efficiency, we
initiated a three-year program to transition all
local HSE certifications to a single enterprise-
wide multisite certificate. During 2013, we
completed the transition of locations in the
U.S., United Kingdom, Norway, Canada, The
Netherlands, and Italy. The remaining sites in
Latin America and Asia Pacific will transition
during 2014.
As part of this multisite certification effort
in 2013, we completed the first global
headquarter audit to ISO 14001, the
environmental management system standard
and OHSAS 18001, the occupational health and
safety management system standard. During
the audit no nonconformities were noted and
the company was commended on the extent

DID YOU KNOW?

The average technical assessment takes one week

to complete. To date, the Baker Hughes technical
workforce has completed more than 1,438 years of
competency assessments. Thats a lot of experience!

2013 HSE Annual Report 55

Driving Flawless Execution
Figure 4. ISO 14001 certifications by region
Europe, Africa, Russia, Caspian 38%
Latin America 30%
Global Products and Services 26%
Middle East / Asia Pacific 5%
North America 1%
of leadership involvement. Additional strengths
mentioned in the final report were:
nnUse of bow-tie analysis in the assessment
of hazards, risk, and aspects
nnProactively calculating and disclosing
carbon footprints
nnTracking performance and statistics on
meeting goals and objectives
nnRecording and tracking incidents, audit
results and associated corrective actions
At year-end, 70 Baker Hughes facilities were
certified to ISO 14001. Of these, 22 facilities
were also certified to OHSAS 18001. These
certifications represent operations in a
number of regions (Figs. 4 and 5) and include
production and administrative facilities across
all product lines.
HSE auditing
As a critical component of our compliance and
internal assurance system, internal HSE Audits
are used to verify that our HSE performance
is real, and effective. Our audit program
evaluates our operations worldwide, confirming
regulatory compliance and conformance to
56 Baker Hughes Incorporated
Figure 5. OHSAS 18001 certifications by region
Europe, Africa, Russia, Caspian 5%
Latin America 75%
Middle East / Asia Pacific 20%
our HSE MS. It also attests that our efforts
are consistent with customer requirements
as well as with industry standards and best
practices. The program facilitates continuous
improvement in HSE performance, engaging a
wide range of employees including operations
and HSE personnel to identify hazards,
mitigate risks and implement actions to ensure
compliance and best practice. Our audit
program is benchmarked annually through
our membership in the International Audit
Protocol Consortium (IAPC), a multi-industry
representation of global auditors.
Managing the HSE audit program
Three specific audit types address specialized
aspects of HSE and frame the program: process
safety management (PSM); environmental
emphasis; and HSE MS.
nnProcess Safety Management (PSM).
In 2013, 11 PSM audits were conducted at
chemical plants. These audits are used
to reconfirm that our chemical plants
worldwide are in compliance with
regulatory requirements and meet industry
best practice to mitigate process safety
 related risk. This multiyear program is on
track with 69% of the facilities assessed,
and 98% of the findings closed (Fig. 6). No
major findings have been identified.
nnEnvironmental emphasis. Environmental
assessments were conducted at 31 facilities
in 2013 and 45 in 2012. These audits
were designed to reconfirm environmental
compliance with U.S. Environmental
Protection Agency requirements for the
upstream chemical business segment.
This program was also used to identify
opportunities to enhance chemical storage
and management practices and evaluate
related investment needs at each facility.
Last year, the program identified efficiencies
that resulted in a 30% reduction in
external compliance costs related to
stormwater pollution prevention and oil
spill prevention. This multiyear program is
on track with 97% of the facilities assessed
and 100% closure for compliance related
findings (Fig. 7). No major findings have
been identified.

Figure 6. PSM audit findings status Figure 7. Environmental emphasis audit status

200 100% 50

150 80%
40

100 60%
30

50 40%
20
0 20%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2012 2013 10

Total findings
0
Findings closed 2012 2013
Percent closed
Scheduled
Completed

DID YOU KNOW?

More than 300 noteworthy efforts of proactive HSE

actions were identified across Baker Hughes in 2013.

2013 HSE Annual Report 57

Driving Flawless Execution

Figure 8. Total number of audits and nnHSE management system. HSE MS

major findings audits were conducted at 97 operations
100 95 97 worldwide in 2013, representing all
92
regions and product lines, and about
80 10% of our applicable locations. In
keeping with International Audit Protocol

60
Consortium standards, our audit selection
criteria were risk-based, with input from
business segment HSE directors and
40
senior operations leadership. Each audit
22 report undergoes a thorough quality
20 15
review, offers important feedback to local
6
operations on the areas where they are
0
2011 2012 2013 doing well, and provides a roadmap for
Number of audits further improvement.
Number of major findings
Audit findings are classified as either major,
finding, or observation. Noteworthy efforts
including best practices are also identified and
communicated across the enterprise. These
Figure 9. Average days to closure for noteworthy efforts represent proactive HSE
major findings initiatives, and in 2013 were identified for
120 115 areas such as air quality, waste management,
waste minimization, chemical management, fall
100 protection, transportation safety, equipment
83 safety, and facility improvements.
80 72

In 2013, nearly 2,500 opportunities for

60
improvement were identified as findings. Of
40 these, six were classified as major (Fig. 8),
representing less than 1% of the total findings
20
and a 73% reduction from two years ago.

0
2011 2012 2013 Our major finding closure rate improved 37%
over the last two years, with the time to closure
Major finding closure rate (days)
averaging 72 days in 2013 (Fig. 9). The major
finding closure status is reviewed quarterly as
part of the executive compliance and internal
controls process. The overall finding closure rate
for all audit findings across the enterprise was
excellent, at 86%.

58 Baker Hughes Incorporated

Engaging our leaders
Business leaders participated as team auditors
during 2013, in a new effort to enhance our
interdependent HSE culture, embed HSE within
operations, and accelerate joint ownership
and understanding of HSE audit findings.
Since the new process was introduced in May,
75% of our audits included participation
by a business leader. Their visible and vocal
leadership connected with frontline employees,
demonstrating their personal ownership of
HSE and serving to further accelerate our
interdependent HSE culture across
Baker Hughes. The path forward
To continue our drive for efficiency, HSE
One key aspect of our business leader and quality will be conducting cooperative
involvement was their independent role as they audits in 2014. These audits will strengthen
audited facilities outside of their own remit. cross-function collaboration and minimize
Beyond auditing, this provided an opportunity disruption to operations. Self-assessments,
for learning and sharing of best practices across which provide an additional level of assurance,
other business segments. will be expanded in 2014. This will supplement
the formal HSE and special emphasis audits,
providing greater assurance and ownership
with location leaders.

DID YOU KNOW?

Of the business leaders participating in audits during

2013, 85% were presidents, vice presidents, directors,
or managers.

2013 HSE Annual Report 59

Section 6
Recognition
Baker Hughes HSE recognition
The Baker Hughes Chairmans HSE Excellence
Award and the Presidents HSE Recognition
Awards recognize teams that have achieved
excellent health, safety, and environmental
(HSE) performance. The Chairmans HSE
Excellence Award is presented to the five
applicant teams that have best demonstrated
sustained HSE excellence over a three-year
period and is awarded by Martin Craighead,
Baker Hughes President and Chief Executive
Officer. The Presidents HSE Recognition Awards
recognize excellence over the past year and are
bestowed by business segment presidents.
Nineteen teams applied for the 2013 Chairmans HSE Excellence Award.
The five winning teams are as follows.
Europe / Africa / Russia, Caspian Region
Global Products and Services
Latin America Region
Middle East / Asia Pacific Region
North America Region
60 Baker Hughes Incorporated
Chairmans HSE Excellence Award
To be eligible for the Chairmans HSE Excellence
Award, teams must have met the enterprise
HSE goals for the last three years, have taken
action to advance the HSE culture, and have
accomplished a significant HSE achievement.
The five teams selected to win the Chairmans
award receive a USD 10,000 prize to spend
on a reward of the teams choice. In 2014,
for the first time, select employees from each
winning team will participate in a special
celebration dinner with Martin Craighead. Local
celebrations will also be held for the winning
team from each region and business segment.
Sakhalin Island, Russia Completions Systems
Navigation Manufacturing Facility,
Houston, Texas, U.S.
Lagomar Base, Maca, Brazil
Pakistan
Trinidad
Baker Hughes employees continue to garner HSE recognition
from customers and industry groups. Within the company, we
encourage stellar HSE performance through recognition programs
such as the annual Chairmans HSE Excellence and the Presidents
HSE Recognition award programs.

2013 HSE Annual Report 61

Recognition

Examples of selected team accomplishments are

highlighted below.
nnThe Navigation manufacturing facility, with
more than 500 employees, has accrued
more than 12 million man-hours 8 years
without a Days Away From Work case and
more than 1.5 million man-hours since the
last recordable injury.
nnTwo new pressure test bays installed at the
Pine Island, Texas ballistics manufacturing
facility enable test fluids to be recycled and
reused, reducing water consumption and
eliminating a hazardous chemical waste.
nnThe Pakistan team organized a family HSE
Malissa Boudreaux, Country Director Qatar accepts
excursion to Murree Hills. The journey
the 2013 Chairmans HSE Excellence Award from
presented opportunities for coaching on Dmitry Kuzovenkov, Vice President HSE on behalf of
driving safety, and increased awareness Baker Hughes Qatar
about the environment.

New Presidents HSE Recognition Awards
In 2013, two new Presidents HSE Recognition
Awards programs were established to recognize
and celebrate teams of 50 or more employees
that achieved 365 Perfect HSE Days.
nn2013 Presidents Perfect HSE Day Awards.
Teams that achieved 365 Perfect HSE Days
in 2013 were recognized with this award.
nn2013 Presidents HSE Performance Awards.
This award is presented to teams that
More than sixty teams applied for the
Presidents Perfect HSE Day Awards, and
38 teams applied for the Presidents HSE
Performance Awards. Fig. 1 shows the regional
distribution of teams that achieved 365 Perfect
HSE Days.
Figure 1. Regional distribution of teams that
achieved 365 Perfect HSE Days

achieved 365 Perfect HSE Days in 2013,

demonstrated HSE excellence according
to a number of leading indicators, and
accomplished a significant achievement.
Up to five of the top performing teams are
recognized in each region.

Middle East / Asia Pacific 32%

Global Products and Services 30%
North America 15%
Latin America 13%
Europe, Africa, Russia, Caspian 10%

62 Baker Hughes Incorporated

Customer recognition
During 2013, our customers recognized Baker
Hughes employees for HSE excellence.

In June, our steadily maturing safety culture was

recognized by TOTAL at their HSE Forum 2013
in Paris. In the HSE Commitment category, Baker
Hughes received an award for our Organizational
Ownership of HSE Interdependency program.
Our Africa region was specifically cited for the
HSE Leadership Academy series, which reduced
injury rates 49 percent and vehicle accident rates
63 percent. Baker Hughes was one of only three
companies presented with an HSE award, and
was recognized from among 75 of TOTALs top
suppliers before 250 industry peers.
At the Shell Global Wells Conference in
November, Baker Hughes received a 2013 Best
HSE Performance award for our role in reducing
injuries and our commitment to process
safety. For this award, Shell evaluated key HSE
performance indicators such as total recordable
incidents, dropped objects, and Shell Life
Saving Rules violations.
Belgacem Chariag, Baker Hughes President, Global Products
and Services (left), and Sam Zettle, Vice President, Shell
Accounts (right), accept the 2013 Best HSE Performance
award from Gordon Graham, VP HSE, Shell (center)
Earlier in the year, Shell challenged all its service
contractors and other groups to develop a
creative, light-hearted video to promote process
safety. Baker Hughes accepted the challenge
and filmed a musical number Think Process
Safety! at our Beta Rig in Tulsa, Oklahoma. A
panel of Shell executives awarded the Baker
Hughes video second place in the contest.
There was a lot of thoughtful work that went
into the Baker Hughes video, and it does a
great job of promoting wellsite process safety
to the viewer in a memorable way, said
Andy Shaw, Baker Hughes Vice President of
Marketing, Asia Pacific region.

Jack Hinton, Vice President, HSE, (right) accepts the

Organizational Ownership HSE award from Marc Blaizot,
Senior Vice President Exploration, TOTAL

2013 HSE Annual Report 63

Recognition
Aguibou Ba, Baker Hughes Workshop Supervisor, and Tayeb
Jeddou, Baker Hughes Chemicals Operations Coordinator,
proudly pose with the PETRONAS Award
Craig Morris (right), accepts the Outstanding Supervisor
award from Steven Paterson, HSE Advisor at Chevron
(Gorgon Upstream Facility Team)
64 Baker Hughes Incorporated
In, March, Baker Hughes employees in
Mauritania celebrated their contribution to
achieving 2,500 days without a lost time
accident with PETRONAS.
Baker Hughes Service Supervisor Craig Morris
received a Chevron Outstanding Supervisor
award for his work on the Barrow Island
Gorgon project in Australia. Craig was
presented with the award for his continuous
efforts towards an incident- and injury-free
work environment.
In March, our Papua New Guinea Drill Team
was awarded the ExxonMobil First Quarter
2013 Environmental Leadership Award. The
award recognizes drill teams that exhibit
the leadership, actions, and results that
distinguish them as role models in progressing
ExxonMobils objective of protecting the
environment. The Baker Hughes team was
presented with the award for their excellent
HSE performance in blending, transporting, and
displacing 7,000 bbls of drilling fluids with no
spills and implementing plans for reducing the
environmental footprint during operations.
Other notable events
In October, Baker Hughes won the Oil and Gas
Awards, West Coast Region Environmental
Initiative of the Year award. The award was
earned for our energy-conservation initiatives,
including the application of an alternative
energy fuel cell at our new 70-acre campus in
Shafter, California. This Baker Hughes facility
is the first industrial site in the country to
incorporate the specific alternative energy fuel
cell technology, which generates electricity from
a chemical reaction rather than combustion
and therefore generates significantly lower
greenhouse gas emissions.
The Society of Chemical Manufacturers and Baker Hughes, Rayne Blend
Affiliates (SOCMA) awarded Baker Hughes Facility, Louisiana
ten performance improvement awards in nnSilver winner Product Stewardship
2013, sponsored by SOCMAs ChemStewards nnSilver winner Resource Management and
program. This program promotes a Waste Minimization
manufacturing facilitys commitment to
continuous improvement, outstanding HSE Baker Hughes, Kilgore Blend Plant, Texas
and Security performance, and educational nnSilver winner Environmental, Health,
outreach. The following awards were presented Safety and Security in Planning
to Baker Hughes locations. and Operations

Baker Hughes, Taft Manufacturing Bronze winners:

Company, California nnBakersfield Blend Plant, California
nnSilver winner Stakeholder nnBarnsdall Manufacturing, Oklahoma
Communications nnHouston Blend Plant, Texas
nnSilver winner Product Stewardship nnBayport Manufacturing, Texas
nnSand Springs Manufacturing, Oklahoma

Ralph Crabtree, Vice President, Real Estate (2nd from left) and Will Harvey, Manager, Shafter, California (2nd from right)
accept the West Coast Region Oil and Gas Award for Environmental Initiative of the Year from Daniel Creasey and Andrew
Perry of Oil and Gas Awards

2013 HSE Annual Report 65

Section 7

Looking Forward

Baker Hughes 2014 expectations To drive performance and accountability, we

and targets will track nine key HSE performance metrics.
Each year, we establish our company
improvement goals following a critical evaluation Metric Target
of our current HSE performance and overall Total recordable incident
business strategies. The intent is to focus on 10% reduction
rate (TRIR)
those improvement areas that will provide the
greatest return so we can further safeguard our Days away from work
10% reduction
employees, communities and the environment. case rate
We continue to embrace the Perfect HSE Day,
Short service
moving from using the traditional goal approach 10% reduction
employee TRIR
to setting expectations.
Motor vehicle
10% reduction
Our overarching HSE expectation is to Make accident rate
Every Day a Perfect HSE Day and thus be
Energy/greenhouse gas
recognized as the industry leader in 10% reduction
emissions/water use
HSE performance.
Volume of serious spills 10% reduction
This is achieved through the following.
nnZero
HSE observations 20% increase
Serious Injury or Life Rules! Events
nnZero Process Safety Events Reporting of near misses
nnZero Serious Spills 75% increase
(including process safety)
nnZero Serious Motor Vehicle Accidents
Reporting of all upstream
process safety barrier 100%
failures

An enterprise dashboard comprised of key

metrics, including HSE leading indicators, now
provides wider visibility to all employees and will
act as a guide to direct local efforts. As these
expectations and metrics show, our heightened
focus on process safety will continue.

66 Baker Hughes Incorporated

Each year, we assess performance and set new priorities. It is our
vision that 365 Perfect HSE Days in a single year is possible. With
visible leadership and the daily efforts of all our employees, we
have become a sustainable company that protects our people, our
assets, the environment and the communities in which we live
and operate.

2013 HSE Annual Report 67

Section 8
Glossary
Baker Hughes Operating System (BHOS)
An enterprise-wide, integrated management
system that drives the consistency of and
conformance to Baker Hughes policies,
processes and procedures to comply with
our established objectives, enable flawless
execution and satisfy customers needs.
Bow-Tie Analysis
A risk assessment tool used in process safety
management for communicating risks to
people and the environment by clearly showing
the links between the potential causes of a
major incident, the barriers and controls to
prevent or mitigate such incidents, and possible
consequences.
Days Away From Work Case (DAFWC)
Any occupational injury or illness that renders
the affected person temporarily unable to
return to the workplace in any capacity on one
or more subsequent days after the day of
the injury.
Days Away From Work Case Rate
(DAFWCR)
Number of days away from work cases x 200,000
Total number of man-hours worked
68 Baker Hughes Incorporated
First Aid Case
Any work injury that results in a one-time
treatment and any follow-up visit for the
purpose of observationsuch as minor
scratches, cuts, burns, and splintersthat does
not ordinarily require medical treatment. Injuries
requiring only first aid are classified in Odyssey
as nonrecordable occupational injuries.
GreenLink
Software used at Baker Hughes to track
environmental performance indicators since
2008 to assist with measuring our overall
environmental footprint and progress on our
environmental goal.
Hazardous Waste
All waste defined as hazardous, toxic,
dangerous, listed, priority, special, or some
other term defined by an appropriate country,
regulatory agency, or authority. Basically,
hazardous waste means as defined by
legislation at the point of origin.
Incident
A negative event that causes or leads to an
operational interruption, disruption, and/or loss.
An incident can be classified as an emergency
or as a crisis.
2013 HSE Annual Report 69
Glossary
Interdependent HSE Culture
In an interdependent HSE Culture, the
organization owns HSE, employees believe
all injuries can be prevented, and zero
incidents are an expectation. This culture is
characterized by: cooperation within and across
teams; organizational pride; employees fully
engaged in goal-setting and improvements;
management comfortable leading or allowing
others to lead; and employees looking after
each others safety.
In-Vehicle Monitoring System
An on-board monitoring system that monitors
and records vehicle speed, acceleration, and
deceleration.
Light Vehicle Accident
A light vehicle accident is a vehicle accident
resulting in property damage, vehicle damage
not requiring tow-away, or injuries not beyond
First Aid.
Major Vehicle Accident
A motor vehicle accident resulting in a rollover
or lost work day/employee injury.
Medical Treatment Beyond First Aid
Any work injury (or illness) that requires medical
treatment beyond that considered as first aid
and does not result in days away from work or
a transferred/restricted work case.
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Motor Vehicle Accident
A motor vehicle accident is any vehicle
accident that occurs in a company vehicle or
any vehicle (at any time) while conducting
company business. These accidents typically
include: vehicle accidents resulting in third-
party injuries; rollovers; personal injuries
classified as recordable; and vehicles being
towed from the scene.
Motor Vehicle Accident Rate (MVAR)
Number of motor vehicle accidents x 1,000,000
Total number of kilometers driven
Motor Vehicle Crash
A motor vehicle crash is a motor vehicle
accident that occurs while conducting company
business. These accidents typically include:
vehicle accidents resulting in third-party
fatalities; rollovers; personal injuries classified
as recordable; and vehicles being towed from
the scene. Motor vehicle crash is an industry-
wide term established by the International
Association of Oil and Gas Producers.
Motor Vehicle Crash Rate (MVCR)
Number of motor vehicle crashes x 1,000,000
Total number of business kilometers driven
Normalization
The intent of normalization is to give an
accurate determination of intentional vs.
circumstantial reduction by adjusting the actual
quantity to account for changes in economic
activity, which may affect generation (such as
waste) or use of a material (such as energy).
The normalization basis is typically a numerical
value, which is tracked for some measure of
activity, such as revenue, production data
(pounds of material produced), number of
containers cleaned or other factors.
Noteworthy Efforts
These are identified during HSE&S MS
audits to highlight and share outstanding
or extraordinary efforts and promote a
positive perception of the audit process. To
be considered noteworthy, HSE efforts must
exceed Baker Hughes requirements or represent
a unique solution to a particular challenge.
Odyssey
Odyssey is an enterprise-wide, web-based
application to record, categorize, and
communicate incident details, investigation
elements, and corrective actions surrounding
work-related HSE&S incidents.
Perfect HSE Day
The goal at Baker Hughes is to make today,
and every day, a Perfect HSE Day. We define
a Perfect HSE day as one without a recordable
injury or illness, serious environmental spill or
release, and motor vehicle accident across
the enterprise.
Process Safety
A disciplined framework for managing the
integrity of systems and processes involving
hazardous substances. It is achieved by applying
good design principles along with sound,
engineering, operating and maintenance
practices. Process Safety is intended to prevent
and control events that have the potential
to release hazardous materials including
hydrocarbons, and energy. Such events can
result in toxic exposures, fires or explosions,
and could ultimately result in serious incidents
including fatalities, injuries, property damage,
lost production or environmental damage.
Recordable Incidents
All work-related injuries or illnesses that result
in fatality, days away from work, transferred or
restricted work, medical treatment beyond first
aid, or that involve loss of consciousness. First
aid injuries and near misses are not considered
recordable incidents.
Short-Service Employee (SSE)
For statistical reporting purposes, an SSE is any
Baker Hughes employee with less than one year
of service.
Superfund
The common name for the U.S. environmental
law officially known as the Comprehensive
Environmental Response, Compensation, and
Liability Act (CERCLA), which was created in
response to heavily contaminated toxic waste
sites. Sites listed on the Federal (Environmental
Protection Agency) Superfund National Priority
List or on state lists are generally referred to
as Superfund sites. The term superfund is
derived from the trust fund established for
cleanup at sites where no viable responsible
parties could be identified. This trust fund was
made up of several billion dollars from
taxes assessed on the chemical and
petroleum industries.
Total Recordable Incident Rate (TRIR)
Number of recordable incidents x 200,000
Total number of man-hours worked
2013 HSE Annual Report 71
Glossary

Baker Hughes Climate Change

Policy Statement

Baker Hughes is committed to managing the risks associated with climate

change. This commitment supports our global Health, Safety, Environment
& Security Policy to ensure environmental protection across all company
operations. Key elements of this climate change policy are as follows:
Compliance with all relevant legislation, associated guidance, and international, national, and
industry standards
Conservation of energy through the use of energy-efficient equipment, implementation of best
practices, and increasing the use of alternative and clean energy
Minimization of greenhouse gas emissions, including a commitment to support the generation of
geothermal energy through technology innovations and our service offerings
Setting measurable goals and plans to improve performance and reduce our overall carbon footprint
Mitigation of the effects of drought through the conservation of water
Collaboration with stakeholders including customers, regulators, contractors, suppliers, and other
partners to reduce impacts from climate change
Promoting these Climate Change Policy elements with our suppliers/vendors and partners
Public reporting of performance information on greenhouse gases and other climate change risks
Review and audit of systems and performance data, including the use of third-party audits
when necessary

The Vice President of Health, Safety, and Environment is responsible for establishing and implementing
this policy. Performance results are reported to the Board of Directors, which provides oversight of the
program to reduce HSE risks, including those related to climate change.

This policy is made available to employees, customers, contractors, suppliers, and the public.

Dmitry Kuzovenkov
Vice President
Health, Safety, and Environment
Baker Hughes Incorporated

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72 Baker Hughes Incorporated

Health, Safety, Environment, and Security
Policy Statement

Baker Hughes policy is to conduct business in a manner that

protects people, assets, intellectual property, and the environment.
This commitment is facilitated through a management system for
Health, Safety, Environment, and Security that promotes:
Line management and employee accountability, commitment, and individual contribution
Measurable goals and plans for continual improvement aimed at zero incidents; conservation
of energy, water and other resources; reduced emissions; and the prevention of pollution
Integration of Health, Safety, Environment, and Security matters into all business activities
Identification and effective management of Health, Safety, Environment, and Security risk
Provision of training, controls, and protective measures based on sound assessment of personal
health and safety, equipment and process safety, workforce and asset security, and environmental
and social responsibility
Collaboration with customers, regulators, contractors, suppliers, and community leaders
to improve overall performance
Compliance with applicable legislation, regulations, and industry standards
A culture where Stop Work is an individual obligation and a company responsibility
Asset integrity (traceability and preventative maintenance), equipment design, and
lifecycle management
Audit and review of systems and communication of performance
Understanding of crisis alert levels, response plans, and the crisis management process
Protection of all Baker Hughes intellectual property
Allocation of appropriate resources to implement this policy
Baker Hughes is a responsible corporate citizen committed to the protection of people, the
environment, and company resources, while supplying products and services in a sustainable
manner. This commitment adds value to employees, customers, shareholders, and communities.
This policy is made available to employees, customers, contractors, suppliers, and the public.

Martin S. Craighead
Chairman and Chief Executive Officer

2013 Baker Hughes Incorporated. All Rights Reserved. 28544 REV 12 07/2013

2013 HSE Annual Report 73

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