The exploration and extraction of oil is a potentially hazardous business with respect to the environment. PetroLatina pursues environmental measures within its operations to prevent, mitigate, correct and compensate for any potential impacts which the Company may have on the environment and the neighbouring community. These measures are continuously monitored and updated in order to keep improving the Company’s performance in this area.

Certifications

In 2010, Bureau Veritas carried out an audit of our integrated management systems with high standards of results being achieved by PetroLatina. The following proposed objectives were reached:

Recertification of the Quality Management System under the ISO 9001:2008 regulation.

Recertification of the Quality Management System under the ISO 9001:2008 regulation.

Recertification of the Quality Management System under the ISO 9001:2008 regulation.

UKAS quality management accreditation.

Management

PetroLatina has a Quality, Industrial Safety, Occupational Health and Environmental Policy. The policy is the guideline on the handling of key impacts to the environment. All environmental concerns are documented. These outline the issues faced, the objectives required to resolve problems and the goals aimed for. The internal management system is audited in an effort to highlight areas which need further improvement. Environmental impact studies are carried out for the operational areas. Monitoring audits are carried out periodically in order to ensure the fulfilment of the established measures in the impact studies, and generally the fulfilment of legal regulations and requirements the Company is committed to. Indicators are evidence of compliance of environmental commitments with the environmental authority. As part of a requirement by the Environmental Authority past environmental indicators have been documented and will be documented in future years. The Company has a contingency plan in the event of an environmental emergency.

Performance

PetroLatina prides itself on a thorough archive of data for water and air quality, and water consumption. The water quality of all water bodies in contact with the Company’s operations and the air quality of operational areas are monitored periodically. All data is documented in the monitoring audit reports.

Water Quality

All water bodies in contact with the PetroLatina’s operations are sampled and analysed. A physical, chemical and bacteriological analysis is carried out using the standard methods for examining water and waste water of the American Public Health Association (APHA), American Water Works Association (AWWA) and the Water Environment Federation (WEF). In the case of Colombia where there is an extensive water law, the results of monitoring are shown within the national legal parameters.

Water Consumption

Water consumption is an important issue especially in areas of limited access to clean water. PetroLatina continually monitors water consumption with respect to all its activities.

Air Quality

To determine the air quality of the areas of operation, the concentration of Hydrogen Sulphide (H2S) and Sulphur Dioxide (SO2) is measured using the standard methods provided by the Agency of Environmental Protection of the United States of America. These results are then analysed in conjunction with the norms set by the World Health Organisation and the World Bank.

Waste

PetroLatina monitors and documents data on liquid and solid waste produced by the Company. As far as possible PetroLatina promotes the minimisation of waste and takes maximum advantage of the use of this waste through recycling, reuse and compost.

Greenhouse Gases (GHGs) and Climate Change

PetroLatina does not carry out any refining activities, thus emissions made by the Company are minimal and restricted to the few vehicles in use and the well motors. There is a current running project to change the well motors to more efficient and environmentally friendly motors, and alternative ‘greener’ fuels are being investigated. In addition, the Company feels that through the appropriate handling of waste waters and solid waste, they have avoided an indirect generation and emission of GHGs to the atmosphere.

Energy

PetroLatina has an action plan to outline its approach to the efficient use of energy in the offices and out in the field. The plan complements the search for ‘greener’ fuel and the project for improved well motors.

Biodiversity

Most of PetroLatina’s operations are located in low biodiversity areas. Currently the Company addresses biodiversity as an environmental objective, but intends to prepare and implement action plans for biodiversity that are specific to the areas of operation in Guatemala and Colombia. As part of Environmental Impact Studies, local flora and fauna are observed and documented. This allows for the monitoring of changing biodiversity over time.

In order to reduce the impact to biodiversity of deforestation, PetroLatina applies modern techniques to collect seismic data thus reducing the environmentally damaging impact of its operations. With the increasing accuracy of Global Positioning Systems (GPS) to a matter of feet it is no longer necessary to use the ‘line of sight technique’ in order to accurately map seismic data. This technique required areas of forest to be cleared. Using GPS has therefore reduced the need to cut down trees. In addition seismic equipment can be carried into locations by hand. As a result there is no need to cut access roads through jungles to sites for seismic readings. These methods cause damage which is so slight that regeneration of forest happens within months. In the past, access roads were often used by illegal colonisers who entered the forest to cut down clearings for the cultivation of maize. This also means that PetroLatina’s activities have minimal consequences for the environment and wherever vegetation is cut down and cleared by PetroLatina, replanting of trees is conducted as soon as the activity is over. Reforestation is carried out in the bordering areas with the intention of compensating for the loss of vegetation.

Reporting

PetroLatina understands the importance of reporting polices and management of environmental issues. Stakeholders of the Company must be reassured that PetroLatina acts in a manner which minimises impacts to the environment.

PetroLatina hires an external company to write quarterly environmental follow-up reports and half-yearly reports for the Ministry of Environment in Colombia. All data recorded on environmental issues is published on the website.

The environmental reports can be requested by any interested party from the Environmental Authority.