Annual & Sustainability Report | Halliburton
Halliburton 2021 Annual & Sustainability Report Introduction 3 TABLE OF CONTENTS Company at a Glance .......................................................................................................................................................................4 Financial Highlights ..........................................................................................................................................................................5 Environmental, Social, and Governance Highlights ................................................................................................................6 2021 in Review ................................................................................................................................................................................... 7 Mission, Values, and Sustainability Guiding Principles .........................................................................................................10 Materiality-Based Approach .........................................................................................................................................................11 Engagement ..................................................................................................................................................................................... 13 Governance ...................................................................................................................................................................................... 15 Corporate Governance ............................................................................................................................................................ 16 Enterprise Risk Management ................................................................................................................................................. 19 Ethics and Compliance ............................................................................................................................................................ 21 Anti-Bribery, Anti-Corruption, and Fair Competition ......................................................................................................22 Supply Chain Governance ......................................................................................................................................................23 Public Policy ...............................................................................................................................................................................25 Environmental ..................................................................................................................................................................................26 Climate Change and Emissions Reduction ........................................................................................................................27 Environmental Management ................................................................................................................................................. 30 Sustainable Energy Evolution ............................................................................................................................................... 36 Social ................................................................................................................................................................................................. 50 Health and Safety ..................................................................................................................................................................... 51 Our People .................................................................................................................................................................................. 56 Training and Development ..................................................................................................................................................... 60 Diversity, Equity, and Inclusion ..............................................................................................................................................62 Local Communities .................................................................................................................................................................. 66 Human Rights .............................................................................................................................................................................72 Appendix ...........................................................................................................................................................................................74 Data Tables ..................................................................................................................................................................................75 Awards and Recognitions ...................................................................................................................................................... 86 About the Report .......................................................................................................................................................................87
Halliburton 2021 Annual & Sustainability Report Introduction 4 Company at a Glance At December 31, 2021 130 42,172 70+ NATIONALITIES EMPLOYEES COUNTRIES North America Europe / Africa / CIS 2 Countries 36 Countries 13,222 2021 Headcount 9,418 2021 Headcount 5 Major Technology Centers 2 Major Technology Centers Latin America Middle East / Asia 11 Countries 25 Countries 5,987 2021 Headcount 13,545 2021 Headcount 1 Major Technology Center 4 Major Technology Centers
Halliburton 2021 Annual & Sustainability Report Introduction 5 Financial Highlights Millions of U.S. Dollars (USD) and Shares, Except Per Share Data 20191 20201 20211 Revenue $ 22,408 $ 14,445 $ 15,295 Total Operating Expenses $ 22,856 $ 16,881 $ 13,495 Operating Income (Loss) $ (448) $ (2,436) $ 1,800 Income (Loss) Before Taxes $ (1,122) $ (3,220) $ 1,252 Amounts Attributable to Company Shareholders: Net Income (Loss) from Continuing Operations $ (1,131) $ (2,945) $ 1,457 Basic and Diluted Income (Loss) Per Share from Continuing Operations $ (1.29) $ (3.34) $ 1.63 Cash Dividends Per Share $ 0.720 $ 0.315 $ 0.180 Basic and Diluted Common Shares Outstanding 875 881 892 Net Working Capital2 $ 6,334 $ 5,054 $ 5,637 Total Assets $ 25,377 $ 20,680 $ 22,321 Total Debt $ 10,327 $ 9,827 $ 9,138 Total Shareholders' Equity $ 8,025 $ 4,983 $ 6,728 Cash Flows from Operating Activities $ 2,445 $ 1,881 $ 1,911 Capital Expenditures $ 1,530 $ 728 $ 799 Depreciation, Depletion, and Amortization $ 1,625 $ 1,058 $ 904 Total Capitalization3 $ 18,352 $ 14,810 $ 15,866 Debt to Total Capitalization4 56% 66% 58% 1. Reported results during these periods include impairments and other charges of $12 million for the year ended December 31, 2021; $3.8 billion for the year ended December 31, 2020; and $2.5 billion for the year ended December 31, 2019. 2. Net working capital is defined as total current assets less total current liabilities. 3. Total capitalization is defined as total debt plus total shareholders’ equity. 4. Debt to total capitalization is defined as the total debt divided by the sum of total debt plus total shareholders’ equity. Geographic Revenue Diversity Strong Free Cash Flow Debt Reduction Progress Millions of dollars Billions of dollars 25%: 42%: Middle East/ North $1,439 Asia America $1,369 $1,105 $10.3 $9.8 $9.1 $15.3B USD 2019 2020 2021 2019 2020 2021 18%: Europe/ Africa/CIS 15%: Latin America In 2021, Halliburton earned the majority of our Halliburton generated over $1.3 billion of free cash flow* Halliburton has strengthened our balance sheet, revenue internationally. We reset our earnings power in 2021, demonstrating our ability to generate strong reducing gross debt by $1.2 billion during the and improved margins in several key end markets. free cash flow in different business environments. pandemic, with another $600 million reduction in the first quarter of 2022. * Management believes that free cash flow, defined as operating cash flows less capital expenditures, plus proceeds from sale of equipment, is an important liquidity measure that is useful to investors and management for assessing the company’s ability to generate cash.
Halliburton 2021 Annual & Sustainability Report Introduction 6 Environmental, Social, and Governance Highlights ENVIRONMENTAL SAFETY Recordable Environmental GHG Emissions Total Energy Lost-Time Total Recordable Preventable Recordable Incident Rate Intensity Scope 1 & 2 Consumption GJ Incident Rate Incident Rate Vehicle Incident Rate Per 200,000 hours worked TCO2 e/operating hours Thousand gigajoule (GJ) Incidents per 200,000 Incidents per 200,000 Incidents per million hours worked hours worked miles traveled 0.57 62,306 0.2700 0.2643 0.1969 47,850 0.16 0.03 39,775 0.16 0.02 0.02 0.11 0.30 0.13 0.09 0.25 0.20 0.06 0.06 2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021 2021 International Association of Drilling Contractors (IADC) industry average SOCIAL GOVERNANCE Female Diversity of Female Diversity in Charitable Giving Percentage of Spend with Anti-Corruption Training Percentage of Suppliers Total Workforce All Management Positions Local Suppliers Assessed in the Last Three Years for Human Percentage of all employees All employees (positions include Thousand USD Participants Rights Risks junior, middle, and senior management) 6 8 6 5 0 , 7 86% 5 , 84% 18,170 99% 0 3 5 03 17,409 66 , 5 80% 98% , 2 , 93% 8 $ 2 13% 13% 13% 13% 4 $ 9 , 12% 12% $1 9,187 2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021 Halliburton Labs Leader in API Spec Percentage of Clean Energy Q2 Certification. Workforce that Accelerator Number of Facilities Diversity of our is Localized Companies in 2021 Certified Board of Directors 92% 12 27 58%
Halliburton 2021 Annual & Sustainability Report Introduction 7 2021 in Review also allows us to make meaningful progress on the objectives we describe throughout this report. As this multi-year upcycle accelerates, we will use our international strength and leadership position in North America to deliver profitable growth and industry-leading returns. We will also build on the tangible progress we made in 2021 toward achieving our 40% reduction in Scope 1 and 2 emissions by 2035 from our 2018 baseline. And, as ever, we remain well positioned to support our customers through the energy transition as a leader in technology and innovation. Deliver Profitable Growth Internationally The Halliburton 2021 Annual & Sustainability Throughout 2021, and despite global supply chain Report highlights our execution on each of our challenges, we served customers in more than 70 strategic priorities and how we will accelerate countries. In doing so, we allocated capital to the highest returns opportunities, increased international revenue into the multi-year energy upcycle. In 2021, and margins every quarter, and brought new drilling and we delivered profitable international growth, formation evaluation technologies to the international maximized cash flow in North America, deployed markets. We also scaled our artificial lift business in new digital and automation technology while the Middle East and continued construction of our new specialty chemicals plant in Saudi Arabia. We expect our we increased capital efficiency, and advanced a international accomplishments in 2021 to set us up for sustainable energy future. We did so through a continued profitable growth in 2022. transition year that witnessed a world reopening from the pandemic and an oil and gas demand Maximize Cash Flow recovery accelerating across the globe. in North America We owe our 2021 success to the work of our global team of As the only fully integrated oilfield services company more than 40,000 Halliburton employees. They delivered in North America, our strategy is to maximize cash flow solid execution across every part of our business — in this structurally changed market, which remains safety, service quality, and financial results. You will read the largest oil and gas services market in the world. about that execution throughout this report. Despite the Halliburton’s North American business in 2021 benefited challenges of working during a pandemic with increasing from meaningful operating leverage we created early in complexity in global energy demand, they outperformed the pandemic and expanded margins as customer activity and delivered what the world requires — affordable accelerated across basins. We also have the right type of and reliable energy that oil and gas provides — in a equipment for this market. We are the leaders in the high- safe, efficient, and ethical manner while minimizing our demand, low-emissions equipment segment with our Tier environmental impact. Our 2021 financial performance 4 dual-fuel and electric fracturing solutions. As you will demonstrates that aligning our actions with our strategic read in this report, our proven Zeus™ e-frac solution helps priorities allows us to accelerate cash flow generation, customers reduce their carbon footprint and provides strengthen our balance sheet, and increase cash returns unprecedented operational control and precision. to shareholders. This execution on our strategic priorities
Halliburton 2021 Annual & Sustainability Report Introduction 8 Accelerate Digital and Automation our oil and gas customers decarbonize their legacy production base, reduce water consumption, We advance digitalization and automation in all aspects produce less waste, and enhance efficiencies to of our business. In 2021, Halliburton 4.0 — our digital improve project economics. approach — accelerated the deployment and integration of digital and automation technologies within our own At the same time, we are on a parallel path to use our and our customers’ operations. As a result of increased existing technologies in renewable energy applications. digital adoption, we benefit from more intelligent, remote, This report highlights how Halliburton employs our autonomous, and environmentally friendly operations. technology in those adjacent markets. We showcase these advancements in this report. 2021 was the first full year of Halliburton Labs, our clean Increase Capital Efficiency energy accelerator. We have 12 participating companies, each of whom have access to our collaborative Halliburton focuses on driving capital efficiency across the environment in which entrepreneurs, academics, and balance sheet. This is consistent with our goal to deliver investors work together to advance cleaner and more significant free cash flow to shareholders. Research and affordable energy. Through Halliburton Labs, companies development and process changes allow us to build tools benefit from Halliburton’s more than 100 years of cheaper, lengthen their run life, and move assets to where industrial capabilities, technical expertise, and culture they make the best returns. Capital efficiency also allows of teamwork and mentorship. Through their work at for our many investments in health and safety, employees, Halliburton Labs, we — and our participating companies — diversity, equity, and inclusion, and the communities in plan to achieve results that make a significant impact on which we operate. clean energy’s future. Advance a Sustainable Into the Future Energy Future 2022 and beyond present enormous opportunity as the multi-year upcycle unfolds. We approach the future Finally, our strategy is to advance a sustainable energy with enthusiasm and resolve to execute on our value future. Our cycle of innovation includes sustainability, proposition: we collaborate and engineer solutions to and Halliburton’s global resources, leading engineering, maximize asset value for our customers. We are scientific and technical expertise, and more than a confident that our focus on technology differentiation, century of experience provide our customers with the digital adoption, and capital efficiency positions us for efficient and innovative tools and services to minimize the profitable growth internationally and maximizing value environmental impact of their oil and gas operations. This in North America. report contains many examples of technologies that help
Halliburton 2021 Annual & Sustainability Report Introduction 9 Halliburton will evolve as energy evolves. 2021 demonstrated that to advance everywhere for everyone, the world will require oil and gas long into the future, even Strategic Priorities as it transitions to additional energy sources and builds out required value chains. Halliburton’s core competencies at a Glance and service excellence will play an important role regardless of the energy source called upon to deliver the future of energy. Deliver industry-leading returns A bold vision of the future requires a steadfast, focused, and strong free cash flow and technologically advanced energy supply and Halliburton stands ready to deliver. As we move forward, Halliburton will continue to work with our customers to Profitable provide reliable, affordable energy to all people around the International world — whether in emerging or established economies. Growth In closing, we thank our employees, our Board of Directors, and our shareholders for the important role each of you play in our success. Halliburton managed the transition Maximizing Value from a global pandemic to the next energy upcycle in North America because of the hard work of our employees, who deliver on our core values of integrity, safety, respect, creativity, and reliability every day. We look to the future with optimism and are well on our way to deliver strong free Digital cash flow and returns for our shareholders. Halliburton 4.0 Capital Efficiency Jeffrey A. Miller Lance T. Loeffler Chairman of the Board, President Executive Vice President and Chief Executive Officer and Chief Financial Officer Sustainable Energy Future Lawrence J. Pope Van H. Beckwith Executive Vice President Executive Vice President, of Administration and Secretary and Chief Legal Officer Chief Human Resources Officer Eric J. Carre Mark J. Richard Joe D. Rainey Executive Vice President of Global President, President, Business Lines, and Chief Health, Western Hemisphere Eastern Hemisphere Safety and Environment Officer
Halliburton 2021 Annual & Sustainability Report Introduction 10 Mission, Values, and Sustainability Guiding Principles Our Value Proposition Mission We collaborate and engineer solutions to maximize asset value Our mission is to achieve superior growth and returns for for our customers. our shareholders by delivering technology and services that improve efficiency, increase recovery, and maximize production for our customers. You can find additional information about our company on our website, including detailed statements on our mission, vision, values, and our sustainability guiding principles. Values Sustainability Guiding Principles Our values are our corporate DNA, and they are the Built on a foundation of ethics and integrity, foundation for how we treat each other and every the Halliburton Guiding Principles for Sustainability individual and entity with whom we interact. We provide the framework for our operations and expect every Halliburton employee to use, live by, our future. and demonstrate these principles on a daily basis. Our Values RELIABILITY SAFETY COLLABORATION COMPETITION CREATIVITY RESPECT INTEGRITY Guiding Principles for Sustainability HEALTH, SAFETY, COLLABORATION FINANCIAL TECHNOLOGY GLOBAL TRANSPARENCY AND ENVIRONMENT PERFORMANCE AND INNOVATION CITIZENSHIP Our Mission
Halliburton 2021 Annual & Sustainability Report Introduction 11 Materiality-Based Approach We continue to have open, frank dialogue with our stakeholders, including our shareholders, about environmental, social, and governance topics. Feedback from our investors, customers, workforce, and ESG rating organizations, among others, reassured us that we are focused on the right priorities, which is why there are no new changes to our ESG materiality matrix this year. This materiality matrix shows the relative weight of different topics from two perspectives. The X-axis shows how important the industry considers an issue, and the Y-axis shows the topic’s importance to our stakeholders. Our work this past year represented a continuation of the priorities we established in 2020, and we are confident in our progress toward the sustainability commitments of each material topic, as seen in the next table and highlighted throughout this report. Dow Jones Sustainability Index (DJSI) included Halliburton in the S&P Global Sustainability Yearbook 2022, which highlights the top 10% most sustainable companies per industry.
Halliburton 2021 Annual & Sustainability Report Introduction 12 Sustainability Commitments Topics Commitment Material issue Metrics • Achieve a 40% reduction of Scope 1 and 2 emissions • Climate change, GHG Climate by 2035 from 2018 baseline. emission reduction, • GHG emissions Change • Partner with Tier 1 suppliers to track and reduce energy efficiency, Scope 3 GHG emissions. alternative energy • Establish and achieve waste-reduction targets in our • Environmental Environmental major facilities. stewardship: water, • Waste disposal Improvements • Create water-use-improvement plans in our major waste, responsible • Water consumption facilities located in water-stressed areas. resource use, • Spill volume and rate biodiversity Value Creation • Lead the industry in innovation and conscientious • Economic Technologies stewardship of global resources. performance • R&D (patents and spend) and Solutions • Provide solutions that support decarbonizing our • Continuous • Financial performance / Continuous customers’ legacy production base. improvement Improvement • Support universal human rights as defined by the Human Rights United Nations Universal Declaration of Human • Human rights • Supply chain assessments Rights through fair and ethical employment practices and our Code of Business Conduct. • Target outperforming total recordable incident Occupational rate and lost-time incident rate in the International • Fatalities, injuries, high potential Safety — Association of Drilling Contractors sector • Health, safety, incidents and rates Journey to benchmarking. and wellness • HSE training hours ZERO • Achieve HSE training compliance >95%, driver • HSE training compliance competency >95% and 100% completion of our • Driver competency annual Journey to ZERO strategic objectives. • Training hours • Have a skilled and committed workforce by listening • Business Leadership Development Skilled and and responding to our employees’ feedback and Program and President’s Committed committing to an engaged workforce that feels • Benefits and Leadership Excellence Program Workforce valued with the right support and resources to compensation attendees be successful. • New hires (#, %) • Turnover rates • Engagement indices • Female % new hire by region • Provide a diverse, equitable, and inclusive • Diversity, equity, and • Localized workforce % by region Diversity, environment that upholds our core values of inclusion • Female diversity Equity, collaboration and respect, and provides all employees • Board leadership and • Board diversity and Inclusion opportunities for growth and development. inclusion • % female in STEM job roles • % of minorities in STEM job roles (U.S. only) • Streamline risk categories, risk identification, and risk management to ensure best alignment with • Corporate Halliburton strategy and place a critical focus on governance • Board independence Risk what matters most. • Business ethics and • Board meeting attendance Management • Enhance cross-functional visibility to and transparency • Risk matrix collaboration among key stakeholders throughout the • HSE • Security assessments organization to ensure consistency, uniformity, and • Information security, strategic approach to risk assessment, identification, data management and mitigation. • Conduct business with integrity, choosing the ethical • Corporate • Local Ethics Officers and Ethical course of action when confronted with challenging governance engagements/trainings Operations circumstances, promoting a speak-up culture • Business ethics • Ethics training free of retaliation, and treating our employees and and transparency • Code of Business Conduct stakeholders honestly and fairly. (COBC) statistics Supplier • Cultivate a sustainable supply chain through the • Tier 1 count and spend Conduct and continuous improvement of internal processes, • Supply chain • Spend with small and Responsible by performing proactive risk assessments and by sustainability diverse suppliers Procurement working collaboratively with our diverse mix of global • Local region spend % and local suppliers. Community • Enhance the social value of communities in which Relationships we live and work through effective engagement and • Local communities • Charitable giving social investment.
Halliburton 2021 Annual & Sustainability Report Introduction 13 During off-season engagement, Board members and Engagement management conducted video conferences with 18 shareholders representing about 40% of our shares and with the two largest proxy advisors, Institutional Halliburton maintains regular communications Shareholder Services Inc. (ISS) and Glass Lewis. These included video conferences with Murry Gerber, Chair of in all relationships to ensure that our Board the Compensation Committee, or Robert Malone, Lead of Directors and our management receive Independent Director, and senior management. valuable input about our business performance, This off-season investor engagement program was in strategic priorities, and initiatives. In these addition to routine solicitation of shareholder feedback discussions, we use our Listen and Respond coincident with annual and quarterly reporting, earnings mainstay as a guiding principle. To support our conference calls, and investor meetings. Also, our senior outreach efforts and further our commitment management and Investor Relations team regularly hold meetings and conference calls with analysts, institutional to transparency, we invested in a new, robust investors, and ESG rating firms, among others. In 2021, website that we regularly update to share Halliburton participated in 13 sell-side conferences, three important information with our shareholders, non-deal roadshows, and approximately 300 investor customers, employees, and others. meetings that are all part of our ongoing shareholder outreach cadence. Shareholders Our senior management and directors presented shareholder feedback to the full Board of Directors for Halliburton values ongoing, open shareholder dialogue to discussion. As a result of these engagements and Board ensure that the Board and management have a regular pulse consideration of investor feedback, we made changes on investors’ views. This dialogue also provides valuable discussed in this report, including our enhanced Board feedback on how we can continue to improve. governance and 2022 annual executive incentive plan. Following our 2021 Annual Meeting, the Board (For more information about changes to our executive recommitted to more active shareholder engagement. compensation, please visit Chapter G1 on Corporate We enhanced shareholder communications, refreshed our Governance in this report.) shareholder presentation, opened additional availability for director video calls, and listened and responded to Institutional Investor magazine once again shareholders about possible changes to governance and executive compensation. recognized Halliburton in 2021 with these honors: All-American Executive Ranking as a In 2021, independent Board members offered and held Most-Honored Company, Best CFO, and Best off-season meetings with stewardship representatives Investor Relations. from our top shareholders to gain a better understanding of their priorities and concerns prior to the proxy voting season. We offered these meetings to 34 of our top Customers shareholders representing approximately 60% of our shares. Each received the opportunity to meet with Board Our business development team and product service lines members by video conference. For those unable to attend, (PSLs) meet regularly with our customers to understand we sent our refreshed shareholder presentation to each their requirements and concerns, including sustainability and offered follow-up. The updated materials highlighted topics. This input is critical to the investments that the latest information about our Board oversight and we make in research and development (R&D) for new corporate governance; executive compensation program; products and services, and to improve existing solutions. health, safety, and environment (HSE) performance To help our customers in their transitions to a lower- and strategies; diversity, equity, and inclusion (DE&I) carbon future, we work with them to provide solutions and performance and strategies; and our approach to energy services that reduce their emissions. transition. After receiving these new materials, additional shareholders accepted the offer to meet.
Halliburton 2021 Annual & Sustainability Report Introduction 14 Employees With a diverse employee population representing multiple nationalities, we maintain regular employee engagement through a range of initiatives, including personal Check-Ins (Halliburton’s informal performance-management process), workshops, townhall meetings, performance feedback, employee resource groups (ERGs), and our biannual Employee Pulse Survey (EPS). These activities lead to an inclusive workplace in which employees feel their voices are heard no matter where they work. For more information about the EPS and the results of our August 2021 survey, which yielded our highest-ever response rate, please refer to Chapter S4 on Diversity, Equity, and Inclusion (DE&I) in this report. We use the information gleaned from this outreach to improve our workplace. Suppliers As a global provider of oil and gas services, we work with suppliers from all over the world and cultivate mutually beneficial, long-term relationships. We obtain feedback and ensure collaboration with suppliers on important matters, such as worker health and safety procedures, human rights compliance, and reduction of environmental impacts. Our communications with suppliers include meetings, workshops, and training sessions. Regulators We engage with government agencies and regulators that are responsible for developing regulatory standards that aim to protect the environmental, social, and economic fabric of the countries in which we operate. Our Halliburton Government Affairs group works alongside local operations management, government officials, and policymakers to provide in-depth information on our business; educate them on our technologies and products; and collaborate on issues that are important to our customers, employees, and other stakeholders. Government officials and policymakers often seek out our knowledge and experience on energy-related topics. Additionally, Halliburton supports foreign service offices, consulates, and embassies around the world as a technology and local content resource. Local Communities and Non-Governmental Organizations (NGOs) To support the global communities in which we live and work, we meet with community groups, nonprofit organizations, and NGOs to better understand their requirements and concerns. We give back to our communities through volunteer programs focused on environmental cleanup and awareness, education, health and safety, and social services. We also support community organizations through corporate donations and from our charitable foundations. Through these activities, we assist the economic and social well-being of our communities.
Halliburton 2021 Annual & Sustainability Report Governance 15 Governance G1 Corporate Governance We know that good corporate governance G2 advances trust among our shareholders, customers, and employees. It builds Enterprise Risk Management transparency in our Company, and shapes how we conduct business in an ethical G3 manner. Under our Board of Directors’ Ethics and Compliance leadership, we have established governance structures, policies, and practices that foster G4 accountability, reduce risk, and push us to achieve the highest standards. Each year, Anti-Bribery, Anti-Corruption, and we identify opportunities to improve our Fair Competition performance and further strengthen our corporate governance. G5 Supply Chain Governance G6 Public Policy
Halliburton 2021 Annual & Sustainability Report Governance 16 G1 Corporate Governance The Board of Directors has adopted Corporate Governance Guidelines to define the governance structure for the Company’s business. The Board reviews these guidelines annually and revises when appropriate to lead our actions and business decisions for our shareholders’ benefit. 2021 HIGHLIGHTS Board Experience and Diversity Our Halliburton Board of Directors brings a diverse range of backgrounds and in-depth experience in publicly held and private businesses, start-up entrepreneurship, academia, science, government, and governance to the work of overseeing our Company’s long-term strategy. The Board includes current and former chief executive officers of public and private companies, executive board chairs, and a university president. Our Board members’ experience crosses multiple industries, including energy, finance, science, technology, legal, human resources, and HSE. BOARD OF DIRECTORS (1-Audit Committee, 2-Compensation Committee, 3-Health, Safety and Environment Committee, 4-Nominating and Corporate Governance Committee) Abdulaziz F. Al William E. M. Katherine Alan M. Milton (3,4) (2,3) (1,3) (1,4) (2,4) Khayyal Albrecht Banks Bennett Carroll Retired Senior Vice President President of Moncrief President of Texas Retired President and Chief Retired Executive Chairman of Industrial Relations of Energy, LLC A&M University Executive Officer of H&R of the Board of CenterPoint Saudi Aramco Block, Inc. Energy, Inc. Murry S. Robert A. Jeffrey A. Bhavesh V. (1,2) (2,4) (1,3) Gerber Malone Miller Patel Retired Executive Chairman of Executive Chairman, President Chairman of the Board, Chief Executive Officer of the Board of EQT Corporation and Chief Executive Officer of President and Chief Executive W.R. Grace First Sonora Bancshares, Inc. Officer of Halliburton Earl M. Tobi M. Patricia Cummings* Edwards Young* (2,4) Hemingway Hall** Managing Partner of MCM Senior Vice President, Global Retired President and Chief Houston Properties, LLC and Privacy, Government Affairs, Executive Officer of Health Chief Executive Officer of and Chief Regulatory Care Service Corporation BTS Team, Inc. Attorney of Cognizant Technology Solutions * Directors added to our Board on February 23, 2022, and will be appointed to Committees of the Board on May 18, 2022. ** Patricia Hemingway Hall has decided not to stand for re-election to the Board, due solely to a personal decision related to health and travel issues associated with the continuing COVID-19 pandemic, and endemic, and will continue as a Director until her term ends on May 18, 2022.
Halliburton 2021 Annual & Sustainability Report Governance 17 Board Experience and Diversity ESG Oversight Enhancements (continued) Based on our commitment to provide thorough oversight of ESG risks, opportunities, and strategy, the Halliburton Board The Halliburton Board evaluates representative diversity of Directors conducted a detailed analysis of our Board when we consider the overall composition of our Board structure in 2021. We performed an extensive review of and its committees. This means we consider our key other Board structures and consulted with our shareholders stakeholders such as our customers and suppliers, but and leading experts. The analysis found that our Board also — importantly — our own workforce, which we believe structure and oversight provide a leading model for good to be one of the most diverse in the world, as it represents governance. Through the review, we also identified an more than 70 countries and 130 nationalities. Following the opportunity for Halliburton to dedicate a committee to addition of new board members in February 2022, more oversee ESG and elevated the Nominating and Corporate than half of our 12 directors are women or represent racial/ Governance Committee for oversight of these issues. ethnic minorities. Although the Nominating and Corporate Governance Committee oversees ESG, each committee is responsible Halliburton announced the addition of Tobi Young for different aspects of ESG, as outlined in each respective and Earl Cummings to our Board of Directors. charter. The Board sharpened its overall ESG oversight of They bring a wealth of experience that includes the Company by focusing more time on these matters in leading roles in the private and public sector, both committee and full Board meetings, as well as in our entrepreneurship, technology, and governance. engagements with Halliburton’s shareholders. By engaging In addition, their wide-ranging roles and experience regularly with shareholders and other outside experts to bring important perspective to our Board. discuss sustainability topics, the Board can more effectively prioritize relevant ESG issues within our overall corporate strategy. During outreach, our shareholders endorsed this oversight structure and other governance enhancements. Below are the primary oversight responsibilities of our Board’s committees, with newly expanded or clarified responsibilities bolded: Board of Directors Nominating and Audit Health, Safety Compensation Corporate Governance Committee and Environment Committee Committee Committee • Overall oversight of ESG • Oversight and evaluation • Oversight of health, • Oversight of • Corporate Governance of the principal safety, environmental, and overall executive Guidelines independent public sustainable development compensation program accountants • HSE legal compliance • Monitoring the • Director self-evaluation • Internal Assurance effectiveness of our process and performance Services and the Ethics • HSE risk-management compensation program reviews and Compliance group processes in attracting, retaining, • Proposing candidates for • Reviewing our financial • The Company’s and motivating Section the Board statements and our environmental impact, 16 officers • Monitoring the Board’s mix accounting systems and including climate issues • Incorporating ESG into of skills, characteristics, controls pay and incentive plans experience, and expertise • Enterprise risk, including • Director compensation information security • Management succession and cybersecurity* planning • Control structure for • Political and lobbying externally reported spending non-financial metrics * The Board also enhanced its oversight of cybersecurity to include a quarterly update to the full Board of Directors.
Halliburton 2021 Annual & Sustainability Report Governance 18 Energy Demand and Climate Initiatives This year demonstrated that demand for oil and gas will remain steady into the future while the transition to using alternative energy sources takes place in parallel. Halliburton and our customers play an active role in the transition to a lower-carbon future. In 2021, under the guidance of our Board of Directors, we continued our steady march forward in meeting the goals to reduce Scope 1 and 2 emissions by 40% by 2035 from our baseline year of 2018. We quantified and executed on opportunities to reduce emissions, and we are on track to meet our reduction targets. We also completed our climate risk scenario analysis, aligned with the Task Force on Climate-Related Financial Disclosure (TCFD), which we discuss in more detail in Chapter E1 on Climate Change and Emissions Reduction in this report. To learn more about our sustainable technologies and the clean energy innovations that are underway at Halliburton Labs, please visit Chapter E3 on Sustainable Energy Evolution in this report. For more information on our approach to climate change and our emissions reduction targets, please visit our Climate Change Statement on our website. Executive Compensation We integrate our executive compensation programs within our overall business strategy and management processes to incentivize performance, maximize returns, and build shareholder value. The majority of our total compensation is performance based, at risk, and long term. We combine financial and strategic metrics in our annual incentive plan, and we include relative performance measures in our long-term incentive plan. As a result of our Listen and Respond shareholder outreach effort, and with the endorsement of our shareholders, we amended our annual incentive plan For more detailed background information about to include ESG-related metrics focused on greenhouse the Corporate Governance and our Board of gas (GHG) emissions and DE&I — two of our main areas Directors, including committee structure, roles and responsibilities, and individual member qualifications, of focus. ESG-related metrics will comprise 20% of the please visit the Halliburton website or view our 2022 total award, with achievement of specific financial goals Proxy Statement. comprising 80% of the total award. These changes are effective January 1, 2022.
Halliburton 2021 Annual & Sustainability Report Governance 19 G2 Enterprise Risk Management Halliburton takes a consistent, systematic, Our Risk Management and integrated approach to our Enterprise Risk Sustainability Commitments Management (ERM) program, which our Board • Streamline risk categories, risk identification, and of Directors oversees. Designed to identify, risk management to ensure best alignment with mitigate, and manage enterprise-level risks Halliburton strategy and place a critical focus on to our organization, our ERM assessment what matters most. process includes a review of items that may • Enhance cross-functional visibility to and collaboration among key stakeholders throughout impact company strategy, business continuity, the organization to ensure consistency, uniformity, and crisis management — among other and a strategic approach to risk assessment, strategic risks to the Company. identification, and mitigation. 2021 HIGHLIGHTS Enhancements to Risk Controls Global IT Infrastructure Through our risk assessment process, we continually review Halliburton is on a strong path to advance our digital our risks to ensure that the Company focuses on those with capabilities — doing so will allow us to reduce capital the greatest potential impact to our organization. We embed expenditures, enhance security, speed delivery, and any identified risks into our strategic planning for the improve service quality (SQ). A shift is underway to years ahead. transfer applications and data from our physical data centers into a cloud-based digital platform while retaining In 2021, as part of the risk identification phase of our a smaller number of network hubs that ensure secure assessment, our ERM group surveyed a broad group of access to cloud resources. When we complete this more than 190 leaders representing different parts of the initiative, our physical footprint contained within these Company around the world and interviewed 29 senior- network hubs will decrease by 77% from 2020. Last year, level, strategic leaders. We reported the findings to the our team transferred significant amounts of our computer Board of Directors’ Audit Committee, as well as to leaders and storage workload to the cloud and are on target who manage a part of the organization with an to complete all scheduled moves by the third quarter identified risk. of 2022.
Halliburton 2021 Annual & Sustainability Report Governance 20 Cybersecurity Halliburton subscribes to best-practice design philosophies for IT systems that include “zero trust,” which The frequency and sophistication of global attacks on uses techniques such as: corporate IT systems containing sensitive information • Multi-factor authentication to verify the credentials of have increased. Halliburton takes each threat seriously users’ identities and devices and dedicates significant resources to protect our IT systems and data, in alignment with industry security • “Defense in depth,” which puts in place multiple layers standards, such as the International Organization for of protection Standardization (ISO) 27001 and the National Institute of • “Least privilege,” which limits the content that individual Standards and Technology (NIST) 800-53. In response, users can access our Board of Directors now receives quarterly updates on cybersecurity matters, and our Audit Committee receives Our cybersecurity team includes thought leaders an annual, in-depth review. who expand knowledge of their expertise. Team members contributed to the following publications for The Landmark iEnergy® platform completed a System the World Economic Forum Cyber Resilience in Oil and and Organization Controls (SOC 2) Type 1 audit for security Gas community: and availability. An SOC 2 Type 1 audit evaluates and • Cyber Resilience in the Oil and Gas Industry: Playbook certifies design effectiveness of IT system controls. for Boards and Corporate Officers The platform is currently undergoing an SOC 2 Type 2 audit, which certifies that controls are in place and • Advancing Supply Chain Security in Oil and Gas: An working as designed. Industry Analysis Through the pandemic, as employees work remotely and access our Company systems, stringent security measures are vital to protect our computing assets, Halliburton employees share their networks, data, and users. A key initiative to further knowledge and contribute to many strengthen our security posture and improve user experience and productivity is upgrading our Enterprise industry organizations. In 2021, Identity and Access Management solution. our Chief Information Security In addition to our own asset protection, we work with Officer served as board member our customers to provide assurance of adequate and treasurer for the Oil and operational technology (OT) security by participating in International Electrotechnical Commission (IEC) Natural Gas Information Sharing 62443-based assessments. and Analysis Center (ONG-ISAC), an organization that shares intelligence Physical Security on cybersecurity incidents, threats, Workplace Violence Prevention vulnerabilities, and best practices to improve security measures within Our employees’ safety is paramount at Halliburton, and the maintenance of a secure and safe workplace is one companies throughout our industry. of our key priorities. Fundamental to our workplace safety is commitment to our Code of Business Conduct (COBC) and established security controls. Additionally, we regularly communicate with employees and managers on how to recognize, report, and manage threats of violence. In 2021, our Corporate Security team developed and delivered targeted training modules for key staff members to enhance our ability to respond to threats of violence. We recognize that early identification and pragmatic management of these incidents are crucial factors to reduce and mitigate the risk of violence occurring in the workplace.
Halliburton 2021 Annual & Sustainability Report Governance 21 G3 Ethics and Compliance Respect and integrity serve as the foundation Our Ethics and Compliance of our brand and underpin everything that we Sustainability Commitment do. To maintain these core values, Halliburton Conduct business with integrity, choosing the ethical has a longstanding ethics and compliance course of action when confronted with challenging program administered by our Global Ethics circumstances, promoting a speak-up culture free of and Compliance group under the leadership retaliation, and treating our employees and stakeholders honestly and fairly. of the Chief Ethics and Compliance Officer and, ultimately, the Audit Committee. This program includes our COBC, Ethics Helpline, and whistleblower protections. To learn more about these programs please visit the Halliburton website. The full text of our COBC, which is available in 13 languages, can be accessed on the COBC page on our website. Number of Local Ethics Officers in 2021: 2021 HIGHLIGHTS 55 Ethics and Compliance Training COBC Training Halliburton requires all employees and contractors with Participants* access to our systems to complete in-person or online COBC training every two years. We rely on our Local 2019 43,792 Ethics Officers (LEOs) to supplement this education by maintaining awareness of ethics and compliance issues 2020 45,989 on an ongoing basis and serving as a resource for our 2021 50,634 employees and contractors. We have 55 LEOs in 40 countries who model ethical behavior, answer questions, * Participants include employees, contractors, and consultants who provide guidance, take reports of suspected misconduct, took the training during 2021. and deliver quarterly Ethics Moments and biweekly Ethics Topics. In 2021, LEOs conducted 2,699 presentations. Enhanced Procurement Fraud Training in Countries This year, Halliburton provided relevant, timely, and Designated as High-Risk for Procurement Fraud targeted virtual ethics and compliance training to Participants employees around the globe — and our LEOs played a critical part in this accomplishment. 2019 1,433 2020 1,637 2021 1,703
Halliburton 2021 Annual & Sustainability Report Governance 22 G4 Anti-Bribery, Anti-Corruption, and Fair Competition Our anti-bribery, anti-corruption, and fair competition policies and procedures apply to all employees, contractors, suppliers, agents, consultants, and others acting on our behalf. To read about these policies and practices in greater detail, please visit the Halliburton website. We included our commitment to these principles in our COBC, which can be found on the COBC page of our website. 2021 HIGHLIGHTS Anti-Corruption Training Participants Our Requirements At Halliburton, we expect our employees to conduct 2019 9,187 business in a manner that aligns with our core values and in compliance with laws that include the U.S. Foreign Corrupt 2020 17,409 Practices Act (FCPA), the UK Bribery Act 2010, and similar applicable laws around the world. Additionally, we expect our people to compete fairly and to win business in a legal 2021 18,170 and ethical manner, which includes refraining from making unfair or disparaging comments about our competitors and their offerings. Employee Training All employees with relevant job functions and those management and due diligence and provides guidance on working in high-risk countries complete anti-bribery and ethical conduct when providing business hospitality and anti-corruption training. This training emphasizes charitable contributions. In 2021, because of the ongoing Halliburton’s core commitment to conducting business COVID-19 pandemic, the Global Ethics and Compliance the REDWay (Responsibly, Ethically, and Diligently) in all group conducted virtual training sessions to supplement that we do. It highlights international business relationship our web-based anti-corruption training courses.
Halliburton 2021 Annual & Sustainability Report Governance 23 G5 Supply Chain Governance Our supply chain mission is to work with Our Supplier Conduct and suppliers who share our commitment to integrity Responsible Procurement and ethical business practices. We use set Sustainability Commitment structures to screen suppliers, measure their compliance within our supply chain, and ensure Cultivate a sustainable supply chain through the continuous improvement of internal processes, by they align with our mission. To learn about our performing proactive risk assessments and by working Supplier Management System, along with our collaboratively with our diverse mix of global and policies for local supplier procurement, conflict local suppliers. minerals, prevention of modern slavery and human trafficking, and our expectations for suppliers related to compliance and training, please visit the Supplier Relations section of our website. 2021 HIGHLIGHTS Human Rights as an Essential assess inherent risk in our supply chain based on country, Component of Supplier Qualification category, and spend classification, which helps prioritize areas for detailed follow-up. Halliburton recognizes the importance of performing due diligence on suppliers with respect to slavery and human Internal Training trafficking. We require suppliers to contractually commit to protect and uphold the fundamental human rights of Halliburton uses trainings from many professional training their employees as stated in the United Nations Universal bodies focused on supply chain and procurement, Declaration of Human Rights. We also comply with the including the Chartered Institute of Procurement and UK Modern Slavery Act of 2015 and the Australia Modern Supply (CIPS), the world’s largest professional body Slavery Act of 2018. (To learn more about our compliance serving procurement and supply organizations with more with Australia’s Modern Slavery Act, please visit Chapter than 200,000 procurement and supply chain professionals S6 on Human Rights in this report.) in more than 150 countries. CIPS conducts training on such issues as ethics, compliance, conflict minerals, and human In 2021, Halliburton implemented our new digital rights awareness. supplier management system, which includes the Supplier Lifecycle Performance (SLP) and Supplier Another training Halliburton takes part in is a new course Performance Management (SPM) modules. SLP covers for suppliers and contractors that focuses on labor all elements of supplier request, onboarding, and rights and identification of worker exploitation. The qualification. SPM provides a robust tool to monitor training, developed in collaboration with the International and manage supplier performance. Petroleum Industry Environmental Conservation Association (IPIECA), includes 12 interactive modules We also developed and built new comprehensive human covering topics such as fair recruitment, discrimination, rights assessments into supplier qualification in SLP working hours, worker accommodation, worker grievance and performance assessments in SPM. Additionally, mechanisms, and forced labor. Halliburton uses an internal human rights dashboard to
Halliburton 2021 Annual & Sustainability Report Governance 24 Local Content • Create a supply chain culture based on our continuous commitment to improvement. Strong, established relationships with local suppliers • Deliver supplier workshops, meetings, and visits. provide Halliburton with strategic and competitive advantages for our operations while expanding the Partnerships capacity and competency of national and local suppliers, • Develop long-term relationships with suppliers to create stimulating local economies, and promoting positive labor positive environments for local supplier development. practices. We work with governments and customers around the world in a legal and ethical manner to meet • Increase value for both suppliers and Halliburton local content targets, and we have achieved a high rate in terms of relationships, communication, cost, of spend with suppliers based in the regions in which our and SQ. operational activities take place. Additionally, Halliburton works with IPIECA and our Commitment to Local Communities in 2021: industry counterparts to standardize the measurement and reporting of local content globally for the oil and gas industry. An example of our activities is Australia, where we are a member of Supply Nation, an organization that helps companies allocate spend to the underused indigenous business sector through their database of indigenous 86% suppliers. Supply Nation also offers training to help companies develop their procurement policies on this Percentage of Spend with Local Suppliers initiative. Our 2021 activities with Supply Nation include: • Attending a training called First Step, which provides an overview on the relevance of allocating indigenous spend and discusses ways in which procurement organizations can increase indigenous spend. • Reporting our annual indigenous spend, which provides Supply Nation with insights to pursue ongoing advancements in the indigenous business sector. We also attended an event in the Australian Northern Territory (NT) held by the Energy Club NT to meet local The three elements of our local content strategy are: vendors, including indigenous vendors, and to explore processes, practices, and partnerships. opportunities for localizing spend. One of our customers, INPEX, sponsors this event, which enjoys participation Processes by various companies in the industry. • Provide opportunities, contracts, and feedback to local suppliers. Conflict Minerals • Implement a functional mailbox that is always accessible to enable new suppliers to contact As a member of the Responsible Minerals Initiative and and present their capabilities to the local in compliance with the U.S. Dodd-Frank Act, Halliburton procurement team. seeks to ensure that our suppliers source minerals in an ethical manner. In 2021, we identified 3,557 suppliers • Visit vendor facilities every month to meet new as subject to the Dodd-Frank Act and contacted them suppliers and develop relationships with as part of our Conflict Minerals campaign. We terminate existing suppliers. relationships with any suppliers who do not cooperate with Dodd-Frank compliance requirements. Practices • Clearly define Halliburton expectations and requirements for HSE and SQ.
Halliburton 2021 Annual & Sustainability Report Governance 25 G6 Public Policy Because the regulatory environment for the global energy industry is complex and constantly evolving, Halliburton stays engaged on public policy issues that affect our Company, operations, and workforce. To read more about our policies regarding political activities and engagement, as well as the multi-candidate, non-partisan Halliburton Company Political Action Committee (HALPAC), please visit the Public Policy section of our website. 2021 HIGHLIGHTS Greater Transparency In 2021, Halliburton published a comprehensive report (Halliburton Policies for Political Engagement) on our annual political activity. Notable highlights from this report include: • Zero corporate contributions made directly to political parties or candidates • Zero corporate contributions used to In 2021, Halliburton scored an support ballot measures • Prohibitions against using corporate funds to contribute 80% to 527 and 501(c)(4) organizations • Board oversight of the Company’s strategy on CPA-Zicklin Index for political engagement This index scores S&P 500 corporations on the transparency For our efforts, in 2021 Halliburton scored an 80% on and accountability demonstrated within their political engagement policies. the CPA-Zicklin Index. Developed by the Wharton School of Business, Zicklin Center for Business Ethics Research, this index scores corporations on the transparency and accountability demonstrated within Halliburton is within the their political engagement policies. The index uses 24 TOP scoring elements focused on political contributions, trade associations, and political action committee (PAC) activities to calculate a raw score. Halliburton’s 20% raw score of 56 points places us within the top 20% of all companies. of all companies scored
Halliburton 2021 Annual & Sustainability Report Environmental 26 Environmental E1 Climate Change and At Halliburton, our work to help our customers Emissions Reduction extract oil and gas that fuels the world in a safe, E2 reliable, and efficient manner is at the core of our business. Oil and gas are an essential source Environmental of energy and play a critical role in the energy Management transition. For our own and our customers’ E3 operations, we actively work to identify ways to facilitate the evolution to a lower-carbon future Sustainable Energy Evolution with the innovation of new technologies that mitigate environmental impact. We proactively manage environmental risks, and we take measures to reduce energy use, water use, and waste generation. At Halliburton Labs, we collaborate with early-stage companies that develop clean energy technologies to help advance their products to the marketplace.
Halliburton 2021 Annual & Sustainability Report Environmental 27 E1 Climate Change and Emissions Reduction Our Climate Change Sustainability Commitments We lower the GHG emissions profile of our • Achieve a 40% reduction of Scope 1 and 2 emissions internal activities, and of our portfolio of by 2035 from our 2018 baseline. technologies and services, to meet the goals of • Partner with Tier 1 suppliers to track and reduce the Paris Climate Accord, which seeks to limit Scope 3 GHG emissions. global warming to well below 2°C compared to pre-industrial levels. As a result of these efforts, we also help our customers decarbonize their operations and reduce their emission footprints. We are committed to a sustainable energy future and have work underway to improve our energy efficiency and advance clean energy development. For more information on our Company’s commitments, please refer to our Climate Change Statement on the Halliburton website. 2021 HIGHLIGHTS Sustainable Energy Priorities Halliburton has set science-based targets to reduce Scope 1 and 2 emissions by 40% by 2035 from our 2018 baseline. We have made progress on our targets by quantifying and executing on opportunities, which puts us on track to reduce emissions and meet reduction targets. Nigeria Cuts Diesel Custom SeaQuest® and Fuel Use by More ScaleFightR Solution Cuts Than 58% Emissions in the Gulf of Mexico In Nigeria, the installation of a power transformer The Halliburton Stim Star IV field operations team combined our at our facility led to a greater than 58% SeaQuest® seawater-based fracturing fluid system with our ScaleFightR improvement in diesel consumption, generating scale-inhibitor chemicals to overcome the technical challenges cost savings as well as emissions reduction. associated with operations in sea water and barium-rich formations. With this change, we reduced the number of Compared to the freshwater fracturing fluids that are typically used to shipments and, therefore, the number of trucks stimulate reservoirs and that require multiple vessels to carry barrels on the road. of fluid to the wellsite, the patent-pending combination eliminated the requirement for extra supply vessels.
Halliburton 2021 Annual & Sustainability Report Environmental 28 Climate Risk Scenario Analysis Sustainability Labels In 2021, Halliburton conducted a detailed climate risk Using sustainability labels, we identify the emissions scenario analysis. A team of 24 internal cross-functional footprint of our critical products and services in the field. stakeholders, along with external consultants, assessed We expect that disclosing this information will help our the significance of climate-related risks and opportunities, customers make informed product selections and meet aligned to TCFD guidance. their decarbonization targets. We completed a systematic process for our climate risk As part of our organization’s digital transformation, scenario analysis: Halliburton PSLs will work to integrate sustainability 1. Assessed the significance of climate-related labels into digitized workflows so we can generate risks and opportunities labels before we execute jobs and compare those 2. Identified and defined a range of scenarios labels with operational data and actual post-execution 3. Mapped business impacts results. Access to this data will help our PSLs better 4. Determined potential responses understand whether opportunities exist during technology development to reduce emissions and prioritize the The analysis considered the International Energy opportunities for our customers’ benefit. Agency (IEA) Stated Policies Scenario (STEPS) and Facility Improvements to Reduce Sustainable Development Scenario (SDS), as well as the Intergovernmental Panel on Climate Change (IPCC) Energy Use Climate Scenario SSP3-RCP7. Our use of published Halliburton strives to reduce energy use in our facilities. In scenarios that consider a range of alternative future 2021, Halliburton reduced our global real estate footprint outcomes helps to inform our understanding of climate- by more than 2%, which decreased our facilities’ energy related risks and opportunities and supports our demands. This is in addition to a 22% reduction of our real development of resilient strategies for a complex and estate footprint in 2020. dynamic future. To meet sustainability targets and to comply with We categorized transition risks and opportunities regulations, we assess newer real estate technologies and according to their market, policy, technology, and update our facilities accordingly. As part of our building reputation impacts. We categorized physical risks as maintenance, we also evaluate technologies associated chronic, such as extreme heat and drought, or acute, such with major structural elements — including heating, air as hurricanes and flooding. We assessed these impacts conditioning, and ventilation (HVAC), insulation, and based on a review of: windows — to identify potential updates for more energy- • Input from climate experts and consultants efficient performance. • Review of relevant reports, including those from American Petroleum Institute (API), IPIECA, and Energy Scope 1 GHG Emissions Workforce and Technology Council, and IEA and IPCC Metric tons CO e transition scenarios 2 • Existing risk disclosures from suppliers, peers, and customers (CDP and other disclosures) 2019 4,354,369 2020 2,626,561 The takeaways from our climate risk scenario analysis 2021 3,503,441 support our ERM process and reinforce our sustainable energy strategic priorities: Scope 2 GHG Emissions 1 Help our customers meet their goals for Metric tons CO2e reducing GHG emissions 2 Reduce our internal emissions in alignment 2019 249,259 with our science-based targets 2020 191,451 3 Advance clean energy solutions through 2021 248,949 Halliburton Labs
Halliburton 2021 Annual & Sustainability Report Environmental 29 Facility Improvements to Reduce Energy Use (continued) Halliburton evaluates the use of artificial intelligence (AI) to help make our building automation systems for air conditioning and heating proactive, rather than reactive, to external forces. Typical building automation systems work in a sequence of events. They react to temperature changes and humidity, and then adjust interior spaces based on set points. Using AI, we can examine whether the automation system can predict what it must do to lower energy consumption while improving comfort in buildings. Select buildings at our corporate headquarters Energy-Efficient Lighting serve as a pilot location for this test. In North America, we are nearing completion of LED lighting retrofits at 13 large facilities, which will reduce carbon emissions from lighting by 63% per year. At our Añelo Field Camp in Argentina, we completed LED renovations in our offices, then met the need for additional lighting along pathways and parking areas with LED lighting towers that are powered by solar panels and battery storage thereby avoiding almost 40,000 kWh in a year from the electrical grid. We are evaluating another 42 Halliburton sites in North America, Europe, Eurasia, and Sub-Saharan Africa for potential completion of retrofits in 2022. Solar Power As part of an ongoing rooftop solar initiative that includes four major projects in Singapore, India, and California, Halliburton commissioned two new solar projects in Malaysia and Colombia in 2021. At our manufacturing facility in Johor, Malaysia, Halliburton executed a 25-year solar power purchase agreement (PPA) in the first quarter of 2021. We installed and will maintain 2,247 fixed-tilt, roof-mounted solar panels totaling 999,915 kilowatt peak (kWp). This is the largest size solar array that the local regulations permit. The Green Electricity solar array will produce 1,000 megawatt hours (MWh) of As we establish new electricity supply contracts, electricity annually. It has offset approximately 22% of the Halliburton purchases green electricity from the grid facility’s usage from August to December, 2021. when available and feasible. In 2021, we signed two Additionally, at our field camp in Barrancabermeja, three-year agreements for 100% green electricity with Colombia, Halliburton executed a 10-year solar PPA in 12 accounts in Alberta, Canada, and two accounts in the fourth quarter of 2021. We installed and will maintain Pennsylvania in the U.S. 278 fixed-tilt, roof-mounted solar panels totaling 99 kWp. The solar array will produce 228,000 kWh of electricity annually, offsetting approximately 49% of the facility’s current usage. In 2022, we expect to explore similar projects elsewhere in Colombia, as well as in Mexico and Brazil.
This is a modal window.
This is a modal window.
This is a modal window.
Halliburton 2021 Annual & Sustainability Report Environmental 30 E2 Environmental Management We use the Halliburton Management Our Environmental System (HMS) to manage environmental Improvements Sustainability risks and identify opportunities to mitigate Commitments our environmental impact. It encompasses • Establish and achieve waste-reduction targets in our a comprehensive set of policies, business major facilities. practices, and procedures for how we work, • Create water-use-improvement plans in our major including how to reduce our energy use and facilities located in water-stressed areas. GHG emissions, improve water quality and conservation, use chemicals in environmentally safe ways, decrease waste, protect the quality and biodiversity of our environment, and manage environmental practices in our supply chain. To read about the HMS in more detail, please visit the Halliburton Management System section of our website. 2021 HIGHLIGHTS Facility Certifications Environmental Incidents The HMS, along with all associated processes and The majority of reported environmental incidents procedures, conforms to industry-standard certification are spills that occur at Halliburton facilities and field programs, including ISO 14001 and API RP 75. Individual locations. In 2021, we had no significant environmental Halliburton facilities and PSLs are externally certified noncompliance spill incidents and no significant to ISO 14001, based on business requirements. In 2021, environmental fines. 73 Halliburton facilities held ISO 14001 certifications, representing 17% of our active global properties. Recordable Environmental Incident Rate Environmental Awareness Training Incidents per 200,000 hours worked In 2021, we initiated a campaign to raise awareness of environmental compliance and stewardship. We provided 2019 0.03 our workforce with a training module focused on environmental compliance and reporting. The campaign aimed to ensure that all employees, regardless of their 2020 0.02 roles, understand their impacts on the environment and their stewardship responsibilities. 2021 0.02
Halliburton 2021 Annual & Sustainability Report Environmental 31 Chemical Stewardship We responsibly manage the environmental risks posed by our chemical products and services over their lifecycle. To improve our chemical stewardship processes and systems, the Global Chemical Stewardship (GCS) team collaborated with internal users to launch a new workflow application, the Chemical Request Management System (ChRMS, pronounced as “charms”). The new system allows users to track the progress of requests for compliance purposes. It also helps us balance the protection of intellectual property with the rights of the chemical manufacturer. Together, in one centralized system and with incorporated global master data, these features deliver a higher level of compliance assurance and facilitate smoother workflows for our personnel. In addition, the integration includes our Safety Data Sheets (SDSs) with information about the safe use of chemicals. Our SDSs are available in 37 languages in more than 70 countries and 20 jurisdictions. We keep all information related to global chemical Sustainable Water Initiative stewardship updated and available to users around The 3R initiative at liquid mud plants the world. The development of ChRMS aligns with our aims to accomplish the following: Halliburton 4.0 approach to digitize the value chain and create internal efficiencies. Reduce Reuse disposal volumes non-aqueous along with dilution fluids in other requirements applications and extend their 3R longevity Repurpose waste fluids in applications in which fluid quality is less critical We work with customers to “3R” all fluids to the fullest extent possible — even proactively cleaning, blending, and reusing most feedstock to help achieve habitual environmental conservation. Not only does this practice save water, but it can prevent some of the emissions associated with the manufacture, transfer, and mixing of new fluids and their components.
Halliburton 2021 Annual & Sustainability Report Environmental 32 Water and Effluents We work with our customers to reduce their water usage. Although customers purchase and control the water they use at hydraulic fracturing sites and at wellsites, we provide solutions to assist customers with water usage. Our reported water-usage data includes water used at Company-owned or Company-leased locations, except those locations that include water usage in the lease, and covers our facilities in the U.S. and Canada and most global facilities. Many of our locations have implemented water-reduction and water-recycling projects, particularly those in water- stressed areas. Water Withdrawal Cubic meters 2019 2,351,678 2020 1,345,507 2021 1,478,921 UK In Scotland, the Aberdeen Maintenance and Sperry Drilling departments have tanks that store water previously used in function testing activities until the water can be reused. This eliminates the requirement to use fresh water for every test. Thailand Our water treatment system cleans and separates oil discharge from water. The Thai government allows Halliburton to sell the water to a recycling company. Argentina At the Añelo Field Camp, we built a water-treatment plant that we completed in January 2022. The plant enables us to reuse 88% of the wastewater generated in our washbays.
Halliburton 2021 Annual & Sustainability Report Environmental 33 Waste Reduction At Halliburton, we develop waste minimization and management plans to reduce the amount of waste generated at our offices, workshops, field camps, manufacturing facilities, and wellsites under our control. Our waste-generation data covers all U.S. locations, all manufacturing locations, and any non-U.S. location that has a building footprint larger than two acres (8,092 m²) and that houses those activities identified as having the largest potential for waste generation. As we look to 2022, we are in the process of standardizing and digitizing waste-reduction tools and resources across our facilities to identify waste-reduction opportunities and effectively execute on them. Waste Disposal Metric tons 2019 294,123 2020 342,306 2021 349,843 Argentina In 2021, our collaboration with waste-management providers has resulted in the recycling of 37% of our total solid waste output. We send these materials — which include wood, pallets, cardboard, paper, and large bags — to waste-treatment facilities for processing as raw materials and conversion into other products. UK Our waste contractors installed skids that route hard plastic materials for recycling, in addition to softer plastic materials from packaging.
Halliburton 2021 Annual & Sustainability Report Environmental 34 UK and Africa In Scotland, we diverted 32 metric tons of wood waste including dry timber, used crates, pallets, and solid wood from a biomass plant to a local charity in Aberdeenshire, Wood RecyclAbility. This organization repurposes wood waste to make many beautiful, high-quality products that it sells to the public, such as furniture, various household products, and bespoke products. However, what makes this organization truly special are the opportunities that it provides to its trainees, who are adults with a range of additional support needs. Their work with Wood RecyclAbility gives them a purpose, life skills, wood-working skills, and, in some cases, has led to their full-time employment. In Africa, we repurposed wood from original packaging to build new boxes for material exportation. Brunei Halliburton worked with a local recycling company to convert paper waste into toilet paper. We collect non-confidential paper waste from our Brunei facilities — including from our offices, workshops, bulk plants, vessels, and rigs — and store them at designated recycling bins. On a monthly basis, recyclers collect the material and then transform it into a 100% recyclable toilet paper product. In 2021, Halliburton recycled 300 kilograms of paper.
Halliburton 2021 Annual & Sustainability Report Environmental 35 Biodiversity Our commitment to environmentally sound and sustainable business practices includes minimizing disturbances to the land where we develop our offices, field camps, chemical facilities, and service centers. To support this commitment, we conduct proper environmental due diligence and permitting when establishing new facilities and ensure regulatory compliance through the life of each facility. Additionally, we recognize the inherent value in threatened lands and species, and we evaluate programs and methods to protect sensitive habitats around our locations. Our employees took part in many biodiversity initiatives at our facilities around the world. We planted trees at many of our global sites, including our Coca Base in Ecuador, Añelo Field Camp in Argentina, Saihat facility in Saudi Arabia, Malaysia facilities, and the forests in Cabinda, Angola.
Halliburton 2021 Annual & Sustainability Report Environmental 36 E3 Sustainable Energy Evolution Halliburton provides the world with access to Our Value Creation affordable and reliable energy in parallel with our Technologies and Solutions / work to support the transition to a lower-carbon Continuous Improvement future. To do this, we deploy our world-class Sustainability Commitments technical expertise, resources, and versatile capabilities to develop new technologies that • Lead the industry in innovation and conscientious stewardship of global minimize our environmental impact. Our most resources. significant contribution toward our sustainability • Provide solutions that support decarbonizing goals is to help customers reduce their own our customers’ legacy production base. environmental impact by using our oilfield technologies. To learn about our vast product and service portfolio, please visit the Halliburton website. 2021 HIGHLIGHTS Sustainability in the R&D Process The LIFECYCLE process, which governs new product R&D, incorporates all of our Company’s major functions, including technology, manufacturing, product management, marketing, and operations. We use this process to improve our product and service solutions, mitigate risks, and review project progress at stage gates. Embedded within the LIFECYCLE process is sustainability. At the critical stage gates of product inception, detailed design, and commercialization, we consider the following: • People and environmental safety • Operational footprint • Human capital requirements • Overall product lifecycle • Manufacturing, storage, and transportation costs • Cybersecurity • Emissions during manufacturing and use Coinciding with sustainability reviews at project kickoff, detailed design, and commercialization, our governance board also provides a thorough review of environmental impacts, along with business case, risks, time to market, and product development costs. The insertion of these reviews into the process maximizes the influence of sustainability considerations on product development. PROGRAM SANCTIONING BUSINESS CASE DEVELOPMENT PRODUCTION LAUNCH COMMERCIALIZATION 0 INITIATION GATE 1 GATE 2 APPROVAL GATE 3 RELEASE GATE 4 RELEASE GATE 5 GATE 6 REVIEW STAGE 0 STAGE 1 STAGE 2 STAGE 3 STAGE 4 STAGE 5 ASSESSMENT DEFINITION DESIGN/BUILD/QUALIFY VERIFICATION VALIDATION COMMERCIALIZATION SUSTAINABILITY SUSTAINABILITY SUSTAINABILITY
Halliburton 2021 Annual & Sustainability Report Environmental 37 University Relationships members, and gain experience with Halliburton Landmark software, products, and knowledge base. Sponsored Research Agreements Halliburton facilitates regular, meaningful contact Halliburton engages with major universities in countries between students, industry representatives, and around the world to facilitate the research studies of academics through our STEPS program, and builds advanced-degree students. Our PSL technology groups a collaborative research network with the robust work with students to identify research topics that participation of all parties. address our Company’s technology challenges, along Each year, the STEPS Scientific Advisory Board selects a with the competencies of the specific university. We research theme within which students select a research help define the research scope, gather resources, and, topic of their choosing. The theme for the 2020–2021 on occasion, make financial contributions. Through this academic year was the 21st Century Energy Transition. endeavor, Halliburton uses external competencies to The theme for the 2021–2022 academic year was the advance the R&D goals of our PSLs and, ultimately, to Subsurface Characterization of Energy. improve our products and solutions for our customers as well as our internal processes. In addition to supporting research projects, STEPS hosts a Distinguished Lecture series aligned with the current STEPS Program research theme to encourage more interaction with the exploration and production (E&P) community. Our program, Science and Technology for Exploration and Production Solutions (STEPS), targets master’s-level To learn more about the STEPS program, including how to students at universities who are working on their theses. apply, please visit the STEPS page on our website. We give these students the opportunity to conduct a research project in collaboration with Halliburton and our industry and academic partners. Participating students can conduct research focused on real-world datasets, receive relevant training and mentorship from STEPS team • Drives innovation • Generates intellectual property • Delivers research results ACADEMIA STEPS INDUSTRY • Mentorship and training • Access to data and software • Engagement with industry
Halliburton 2021 Annual & Sustainability Report Environmental 38 Our Technology Highlights Featured here are examples of our technologies that reduce our customers’ emissions and aim to decarbonize the process of oil and gas extraction. Tier 4 Engines and E-Frac We also offer all-electric fracturing capabilities using our second-generation Zeus™ electric pumping unit, Halliburton has the largest fleet of Tier 4-compliant ExpressBlend™ electric blending system, eWinch™ electric engines — both diesel and dual fuel — in operation wireline unit, and an electric Tech Command Center. All in the U.S. and the Gulf of Mexico. Tier 4 is the U.S. this equipment can run on electric power, generated using Environmental Protection Agency’s (EPA) strictest natural gas or taken directly off the grid, for the lowest regulation for nitrogen oxides and particulate emissions. possible emissions profile. This solution also allows for Our Tier 4 dual-fuel engines enable operators to use additional electrification of fracturing locations, such as natural gas instead of diesel fuel as the majority of lighting and water transfer. their fuel source. The option to use field gas minimizes flaring, which reduces emissions and is less costly for our An active focus on our e-frac customers. Because of the way that Halliburton developed capabilities is underway. our technology, we can convert our diesel engines to Tier 4 dual-fuel. In August 2021, Halliburton announced the industry’s North America Industry Leader in EPA first deployment of an advanced e-frac solution with Tier 4-Compliant Diesel Engines Chesapeake Energy Corporation. The project combines our all-electric fracturing spread with VoltaGrid’s power- generation system. By using this technology in its local Percentage of Tier 4 Diesel 2019 2020 2021 field gas network, Chesapeake Energy reduced Engine Penetration emissions by 32% and applied more than 25 megawatts of lower-carbon power generation without sacrificing Hydraulic fracturing pumping operational performance or reliability. This project is a equipment (HHP) that meets 52% 56% 53% major step forward in our customer’s goal of achieving Tier 4 compliance for non-road diesel engine emissions net-zero emissions.
Halliburton 2021 Annual & Sustainability Report Environmental 39 Cementing Products The Cementing PSL has two main focus areas: to reduce the carbon footprint of the solutions that we provide to our customers and to stop fugitive gas emissions for the life of a well. NeoCem™ IsoBond™ Obex™ The NeoCem™ cement system The IsoBond™ cement system Our Obex™ family of compression- reduces the amount of Portland prevents sustained casing pressure set, mechanical packers (Obex cement in the wellbore isolation over the life of a well, which helps GasLock™ packer, V0 rated; Obex barrier by an average of 40% by mass improve well integrity and stop IsoLock™, V3 rated; and Obex Portland. (Portland cement accounts fugitive gas emissions from releasing EcoLock™, V6 rated) enhance well for the majority of the carbon into the environment. The system integrity and therefore prevent footprint in a cementing job, as its accomplishes this through: fugitive gas emissions. By offering a manufacture and transport releases • Low fluid loss and fast transition powerful mechanical barrier, Obex™ air pollutants.) times to prevent the flow of gas packers improve zonal isolation and through cement as it sets. mitigate sustained casing pressure to avoid failures leading to annular • Enhanced shear bond, in which gas migration. the ability of the cement to adhere to steel casing improves by as much as 40% compared to other cementing systems. • Reduced cement permeability by more than 70% compared to other cementing systems, which prevents gas and other wellbore fluids from migrating through the cement after it sets.
Halliburton 2021 Annual & Sustainability Report Environmental 40 Baroid Production Solutions ® BaraHib™ Gold WaterWeb ® BaraHib™ Gold high-performance Our WaterWeb conformance service 90% with little to no damage to water-based mud eliminates the gives operators the ability to lower hydrocarbon permeability. By requirement for the containment, the treatment and disposal costs reducing the water column, the transport, and treatment of oily of produced water, along with the WaterWeb® service improves the cuttings onshore. Fluid makeup associated environmental impacts. natural lift to residual oil and gas. To accomplish this, the WaterWeb® includes approximately 15% It also helps prolong and sustain industrially produced materials service uses a polymer chemistry to production by enhancing (except water and barite) by volume, impede water flow while enhancing reservoir drainage. compared to approximately 60% in hydrocarbon flow to the wellbore As an example of this technology’s a typical non-aqueous fluid. With in any type of reservoir — including capabilities, Halliburton deployed the trackable inhibitor technology, sandstone and carbonate formations. WaterWeb® service in an offshore BaraHib™ Gold fluid also has a This technology absorbs into the rock carbonate reservoir, where it reduced longer run life than typical water- surface and creates resistance that the water cut by 22% and increased based fluids. holds water back while allowing oil hydrocarbon production to more than and gas to pass freely, decreasing 600 barrels of oil per day. water permeability by more than 95% regained 97% reduction to oil permeability water permeability d 600 m , y t bili a 400 e 380 m r e P e v i t c e f f E 16 Oil Water Before treatment After treatment
Halliburton 2021 Annual & Sustainability Report Environmental 41 Reduction in Battery Use To improve the sustainability of operations, Halliburton aims to eliminate the use of lithium batteries in our downhole tools. Batteries require complex logistics and safety precautions, as well as recycling. The development of solutions to generate downhole power or to continuously provide power from the surface will make a step change toward reducing our environmental footprint. Because of this, many of our PSLs, including Sperry Drilling and Production Solutions, focus on technology development that does not rely on battery power. As an example, a downhole generator powers our iCruise® rotary steerable system, removing the batteries that we used in our previous generation of rotary steerable technology. One of the design goals of our new iStar™ intelligent drilling and logging platform was to reduce the number of downhole batteries that we used. In 2022, we will deploy an additional turbine-based generator to enable further reductions in battery use. ® Our SPECTRUM FUSION real-time hybrid coiled tubing services integrate fiber optic and electric communication and power to eliminate battery use. Doing so results in operations not limited by power or time constraints. The system also combines intervention and diagnostic capabilities and is fully compatible with mechanical and wireline tools. This unlimited flexibility lessens logistical constraints. Additionally, we have invested in a company that produces ultra-capacitators, a rechargeable solution that delivers the power required for our challenging downhole applications.
Halliburton 2021 Annual & Sustainability Report Environmental 42 2021 Technology Sustainability Matrix Additional portfolio e s d t G e e i y l s d t c items can be seen on - GH n uc e l li y e n o d i c f i e b e i s d s ro uc u f l l e o ns/ e l u a l Halliburton.com. l o u r p d l f r r e ng p i c f t e s i o d o i o s u n t ro e s dur / w d s s d m i s c s r d n f n e t i o r l a p r o e n a n m r a e t e o t f p e d ua w t ou f f h ial g s e r p r he d s s s r e at a n r o id e e i u a s s d o hig e s c i er e c v v t y t u y n i s o us / s w g a / u t o s b n t d o s r do c n a e i i nd i i e u t r s e d r t d m y g s o al quir do a u a t a m o g i u l u e en s o rr r e u t f d c o n d e os i n e / r u r i r / do mp ener sp e t oi / r d a m t e haz r i y i l y te p n p v e f af i e - a fe c t r r b t z e in s rem n t i h l i e e i i ble i l l er u o s a s s a a h r s n az o li y i e t r o p k u i a c r c b e t s c t t i f t t a f j t l u u no a q no h a w r e e e fo e y f w f hs/ o : e f f t t g r s at o re ns t o e l re r c n r s w b s n o ial u i f r o o o e e e s e n m o o c e o e oial / l o ns s a i t i l f i r nc o ng p l i a v e v t n s i m m e e a s i me me rene a o l o s i a e s s u c s l t s s e a t e r p r b r k r i ctr u l t a i l a u u s n r r t s e l a i l l ans e e a c l o p p o u o o l o o p u o o o r s s o n l m na m D P Em F E V V m S N Sp C V V T U U H C I a I E I W ARTIFICIAL LIFT Reduction or Elimination Improvement GeoESP® Tiger Shark III® BAROID BaraECD® BaraHib™ Gold BaraXcel™ CEMENTING AirGlide™ Asset Light-Remote Control Silos Autonomous Cementing Operations IsoBond™ Obex™ Tuned® Defense™ E Cement Spacer WellLife® COMPLETION TOOLS ® eCompletions™ Clariti ® ® SmartWell eMotion MultiLateral FlexRite® SmartWell® Fuzion™ DRILL BITS & SERVICES Articulating Gauge MULTI-CHEM APX™ — Analyzing Performance eXecution Ferrogone™ FeS Inhibitor FightR™ LX-18 Triple-Combo Inhibitors PRODUCTION ENHANCEMENT Dual Fuel Tier 4 Zeus ™ PRODUCTION SOLUTIONS HalKleen™ SafeGrip™ WaterWeb® TESTING & SUBSEA Single Trip Perf & Surge WIRELINE & PERFORATING RTRAC StrataXaminer™
Halliburton 2021 Annual & Sustainability Report Environmental 43 Digital Transformation Halliburton deploys digital technology across all Halliburton 4.0 business lines and geographies to improve efficiencies and outcomes. Many of these capabilities reduce GHG In 2021, Halliburton 4.0 accelerated our digital approach emissions through optimization and efficiencies and over the well lifecycle including subsurface, well provide high-quality data for enhanced decision-making construction, reservoir and production, and our and continuous improvement. own enterprise. Digital unlocks the potential to structurally lower costs, Our deployment of software, hardware, AI, machine shorten time to first oil, increase efficiency in exploration learning, and sensors gives us access to more data and and production, and enhance performance across the operational insight than ever before. This data allows entire value chain. us to improve project planning, design, and execution; monitor and optimize operations in real time; enhance In 2021, the Company made great strides in our digital decision-making; shift to automated controls and remote transformation by developing, deploying, and maturing operations; make data more accessible to all business Halliburton 4.0. units; and advance data storage and data analytics capabilities — all while enabling a more collaborative, Well Construction 4.0: connected workforce. Digitally Transforming the Well Halliburton 4.0 increases efficiency, saves costs, and Construction Lifecycle mitigates health and safety risks associated with manual labor. It also reduces our environmental impact through With digitally enhanced well construction, we the elimination of paper waste and the reduction of reduce costs and planning time and optimize personnel required to work at wellsites, which means well design and placement to improve drilling fewer emissions associated with transportation, lodging, performance for a safer, more productive well. and sustenance on both land and offshore settings. Well Construction 4.0 incorporates all of Launched in the first quarter of 2021, our new Halliburton’s digital technologies and allows cloud-based platform, Real-Time-as-a-Service (RTS), integration and collaboration between our well uses modern digital technology to stream real-time data engineering applications, such as Digital Well to all employees and customers who have subscribed to ® these feeds and are authorized to receive them. Program and Digital Well Operations, as well as any third-party applications that an operator or A customer in Norway, the first operator to adopt RTS, contractor may use. These technological advances uses the platform to monitor six offshore rigs. In the enabled us to reduce well planning and design time customer’s experience, RTS is 83% faster than our legacy by up to 80% in the North Sea. real-time system, with uptime reliability of nearly 99.9%. Well Construction 4.0 automates many drilling Equally important, RTS is less energy intensive than its processes. In a mature field in the Middle East, predecessor, relying on cloud computing that can be Halliburton improved drilling performance and scaled up or down based on consumer demand. shortened drilling time by 43% by integrating our As a result of using RTS, Halliburton retired a number of Cerebro® In Bit Sensing, Logix™ Automated Drilling Solution, N-Flow™ 325 filter cake breaker, Pason on-premise data centers that had dedicated services and AutoDriller, and project management services. reduced personnel required to keep the legacy real-time system functional. Our goal is to convert 100% of our Additionally, with our remote operations, Well real-time requirements to the RTS platform in the first Construction 4.0 helps reduce the number of half of 2022. people required on-site. For the first two sections For more information about Halliburton 4.0, of a job at an offshore rig in Southeast Asia, please visit the Halliburton 4.0 page on our website. Halliburton decreased the number of people at the wellsite by 21%, which also reduced helicopter rides and international commercial flights to the rig.
Halliburton 2021 Annual & Sustainability Report Environmental 44 Halliburton Landmark software, Landmark adapts E&P workflows to consider the parameters that are important for safe CO storage, 2 To support Halliburton 4.0, Halliburton Landmark offers identify suitable aquifers, screen areas for further a suite of geoscience software products that enable investigation, and model them using technologies that our customers to explore and produce hydrocarbons. In we developed to understand the injection and migration 2021, Halliburton shifted Landmark products further into of captured CO . Our technology helps customers answer 2 the sustainability space. Here are a few examples of our critical questions such as: products that support the world’s energy transition: • Where can we store CO ? 2 Neftex® PROSPECT software, which we developed in • How much CO can we inject, and can we inject CO 2 2 2021 and will launch in the first quarter of 2022, supports at a sufficient rate? critical mineral exploration. Electrification of transport • Can we store it safely? and industrial processes is a key component of global decarbonization ambitions. However, this initiative • What is a site’s storage capacity over its lifetime? requires a vastly increased supply of metals and minerals • Will the CO remain in the geological storage tank for success. Renewed investment in discovering 2 over time without leaking? additional resources will be the key to meet this demand. We also focus our efforts to enhance our iEnergy® Landmark adapts proven oil and gas exploration workflows to aid in the hunt for minerals that are critical platform, the industry’s first hybrid cloud environment to the energy transition. dedicated to E&P. By using machine learning, we can better manage and mitigate carbon emissions from Storage of carbon dioxide (CO ) in ancient rock strata is set our operations. 2 to become a major contributor to emissions reduction. We can identify suitable aquifers for this purpose by using a For more information on Landmark, please visit the similar approach to how we uncover hydrocarbon-bearing Landmark page on our website. ® ® strata. With Neftex Predictions and DecisionSpace 365 This database is included in Neftex® PROSPECT software. Areas in color denote when Earth’s tectonic features were active. Because many critical minerals are found in zones of active tectonism, this information can help to identify areas for closer attention in the search for specific minerals.
Halliburton 2021 Annual & Sustainability Report Environmental 45 Support for Renewable Energy Sources In addition to using our digital capabilities, Halliburton applies our existing technologies to the renewable energy space for a greater environmental impact. Carbon Capture, Utilization, and Storage Halliburton actively participates in the carbon capture, utilization, and storage (CCUS) industry, and has developed technologies to support carbon transport and storage projects. Our capabilities include geological storage site selection and development, in addition to well repurposing, construction, and monitoring, and pipeline and subsea construction and maintenance. In 2021, Halliburton applied a unique, machine learning- based 3D model for a Japanese company to estimate the availability of pore space over large areas for CO2 storage. This model increased operational efficiency, with a fivefold reduction in time spent compared to conventional approaches, along with increased accuracy. Geothermal For decades, Halliburton has offered our advanced In Indonesia, which is the world’s top geothermal market, technologies and experience to customers developing Halliburton has supported geothermal activity for more complete geothermal solutions around the world. Our than 30 years. In this time, we have drilled and produced products and services address every aspect of developing more than 220 wells, and completed approximately 40 a geothermal energy production facility, including wells with Halliburton Project Management’s Integrated project management, drilling, cementing, fluids, logging, Services. In 2021, Halliburton continued to contribute completions, stimulation, and geofluids transfer. to the Sarulla Geothermal project. For this project, we have worked with a market leader for more than 15 Geothermal energy demand has expanded to more years to provide drilling and cementing services in the shallow-source, lower-heat applications for heating development of this clean, renewable energy source. and cooling. For electricity generation, the geothermal During this time, we helped our customer produce clean market has expanded to deeper, higher-heat sources. electricity from geothermal wells safely, efficiently, and Although these geothermal sources are much more cost-effectively, and enabled a larger number of wells to efficient in generating electricity, they require produce from a single pad for less environmental impact. advanced geothermal systems to overcome technical challenges, and Halliburton is working to service these emerging markets.
Halliburton 2021 Annual & Sustainability Report Environmental 46 Halliburton Labs Halliburton Labs gives early-stage, clean-tech companies access to our world-class facilities, technical and scientific experience, and business network. Halliburton Labs is a collaborative environment in which entrepreneurs, academics, investors, and industrial labs come together to advance cleaner, affordable energy. Halliburton Labs also is a clean-tech accelerator. Participating companies take part in a 12-month program in which they can benefit from our vast, global resources that include knowledgeable and experienced personnel who cross a range of disciplines as well as an established infrastructure. Halliburton Labs helps these companies with a variety of services, such as: • Introductions to investors and potential customers • Development of supplier networks, using our broad For Halliburton, other benefits of Halliburton Labs include: supply base • Design of manufacturing processes, with a key focus • Strategic value in working closely with people, on HSE companies, and new technologies with the potential for • Cost reductions for manufactured products high growth as the energy industry changes While some offer a corporate venture capital model, • Ability to understand the development of new value Halliburton is unique for our founder-friendly environment chains associated with the energy transition and for granting companies regular access to our • Opportunity to evaluate how we can best use our core corporate campus, industrial facilities, executives, and competencies to accelerate cleaner, affordable energy subject matter experts. These elements are essential solutions and earn returns in new markets to reduce friction points, enhance collaboration, and increase the probability of each company’s success. Halliburton Labs is a low-risk, low-capital endeavor for us, and yet this initiative is critical for delivering the support Halliburton Labs is a unique that participants require to progress beyond their initial front door to engage with the years and to make a positive, lasting impact on the world around us. innovative companies and people who are ready to scale solutions for clean, affordable energy. To learn more about this endeavor, please visit the Halliburton Labs website.
Halliburton 2021 Annual & Sustainability Report Environmental 47 Application Process Halliburton Labs is an open, non-exclusive program. The application to participate is always available on our website. Three times per year — January, May, and September — we accept applicants into our program, which lasts for one year. After companies submit their applications, we evaluate them based on factors such as whether their technology Curriculum has progressed sufficiently and whether their business requirements align well with our capabilities, so that we Over a 12-month period, we open our doors to can offer them the most value from this experience. companies for unlimited education, mentorship, and consulting. We invite a narrow list of applicants to our Finalists’ Pitch Day, which involves a seven-minute business Our structured curriculum covers the core topics that pitch by company leaders followed by a live Q&A any entrepreneur must address while their business with our panel. From there, we select a handful of scales. Meanwhile, Halliburton is available to meet with companies to begin the program. We are selective so participants about more unique, company-specific that we can give each participant at Halliburton Labs requirements and priorities. the high level of attention and collaboration they deserve.
Halliburton 2021 Annual & Sustainability Report Environmental 48 Participating Companies Since we launched Halliburton Labs in 2020, we have attracted and onboarded many qualified and outstanding companies that are on the cusp to become game changers in their industries and our collective clean energy future. NANOTECH, INC. HELIX POWER SURGEPOWER MATERIALS Houston, TX Somerville, MA New Braunfels, TX Thermal insulation and Flywheel energy storage High-quality graphene fireproofing nano-coatings technology from renewable feedstock ENEXOR BIOENERGY SOLVCOR IONADA Franklin, TN Princeton, NJ Toronto, Ontario, Canada On-site bioenergy conversion Liquid additive that reduces Carbon capture for small- to systems for waste energy consumption and mid-sized industrial emitters CO emissions MOMENTUM TECHNOLOGIES 2 ICARUS RT Dallas, TX ALUMINA ENERGY San Diego, CA Lithium battery recycling Los Angeles, CA Power boosting and energy technology and rare earth recovery Thermal energy storage storage for solar PV systems OCOCHEM PARASANTI STRAYOS Richland, WA Austin, TX Buffalo, NY Carbon dioxide-to-formate Edge computing hardware Uses AI to sustainably conversion technology and software solutions extract raw minerals 2021 Participating Company Achievements Momentum Technologies raised $20 million in a round led by Freestone. Enexor raised $10 million in a round led by BorgWarner. Enexor gained acceptance to the Google Climate Change Program and the 100+ Accelerator program. Alumina Energy joined the Shell/National Renewable Energy Laboratory (NREL) Game Changer program. NanoTech won the 2021 Energy Transition Award presented by InnovationMap. Rice University named Halliburton Labs Advisory Board Member Reginald DesRoches as its next president. The advisory board of Halliburton Labs has added two new* members: • Reginald DesRoches, Rice University’s Provost and • Jennifer Holmgren, CEO of LanzaTech* Professor of Civil and Environmental Engineering, • Maynard Holt, CEO of Veriten* and Mechanical Engineering • Jeffrey A. Miller, Chairman of the Board, President • John Grotzinger, the Fletcher Jones Professor of and Chief Executive Officer of Halliburton Geology at the California Institute of Technology, and Chair of the university’s Division of Geological • Dale Winger, Managing Director of Halliburton Labs and Planetary Sciences • Walter Isaacson, the Leonard Lauder Professor of American History and Values at Tulane University in New Orleans, Louisiana
Halliburton 2021 Annual & Sustainability Report Environmental 49 What Our Participants Say [Halliburton is] not just providing None of anyone’s climate change curriculum and courses, they are ambitions get done unless you build providing physical infrastructure for something big that works and is cost start-ups to go from their garages to efficient, and Halliburton has experience production. Halliburton Labs is the next in doing that. Halliburton Labs can tailwind for start-ups. benefit you if (1) you are serious about Access to Halliburton Labs’ resources manufacturing products and bringing and world-class facilities will help them to market, (2) you want partners accelerate our growth and deliver who can assist, critique, and support our transformative line of products. what you are doing, and (3) you want Through this collaboration, we intend to to expand your horizons. Halliburton fundamentally shift the fireproofing and is looking forward and helping build thermal insulation markets toward more the future. effective and environmentally The valuable industrial expertise and friendly solutions.” network of Halliburton Labs will support Mike Francis our build, deployment, and demonstration CEO, NanoTech, Inc. of a full-size commercial-grade system — the next step on our commercialization journey toward an industrial-scale plant.” Todd Brix CEO, OCOchem Our goal is to make SurgePower Materials the key enabler of the forthcoming graphene age with plant-based graphene as an essential component of many new We are receiving tremendous interest technologies. Our strategic collaboration from industrial emitters around the world with Halliburton Labs allows us to for modular carbon capture systems. leverage their world-class engineering Halliburton Labs’ engineering, supply expertise to rapidly scale our production chain expertise, and global network and accelerate the adoption of new provide the ideal launching platform for graphene-based solutions.” us to scale our business to meet demand. Dr. Michael Opoku Halliburton Labs has opened a lot of CEO, SurgePower Materials doors for us, virtually every touch point.” Edoardo Panziera CEO, Ionada Halliburton Labs is the ideal environment to scale our cutting-edge lithium battery recycling technology. We are excited to We are honored to join Halliburton tap into Halliburton Labs’ engineering Labs. Their broad global network and and supply chain expertise and global deep manufacturing expertise will business network to accelerate assist Enexor in meeting its significant Momentum to the forefront. Participation worldwide demand while making a in Halliburton Labs has signaled to significantly positive environmental the market that we are an impact. This is a major step forward in established company.” our worldwide launch.” Preston Bryant Lee Jestings CEO, Momentum Technologies Founder and CEO, Enexor BioEnergy
Halliburton 2021 Annual & Sustainability Report Social 50 Social S1 Health and Safety People are at the center of what we do. Our dedicated and talented employees, leaders, contractors, and S2 suppliers make the successful completion of our operations possible. In recognition of their invaluable Our People contributions to our Company’s success, we strive to S3 enhance the economic, social, and personal well-being of our team. For our global workforce, it is our goal to Training and Development provide an inclusive, safe, and satisfying workplace with best-in-class training, competitive benefits, and S4 career development opportunities that enable them to thrive and achieve their goals. Diversity, Equity, and We also rely on the support and goo