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Cablegate: Apache Nominee for Corporate Excellence

VZCZCXYZ0000
RR RUEHWEB

DE RUEHEG #1191/01 1621244
ZNR UUUUU ZZH
R 101244Z JUN 08
FM AMEMBASSY CAIRO
TO SECSTATE WASHDC 9513

UNCLAS CAIRO 001191

SIPDIS

E.O. 12958: N/A
TAGS: BEXP AMGT ECON EINV ELAB ETRD SENV EAID KPAO EG
SUBJECT: APACHE NOMINEE FOR CORPORATE EXCELLENCE

REF: A. STATE 54208
B. STATE 34994

1. We would like to nominate Apache Corporation, the largest U.S.
investor in Egypt and Egypt's third largest oil and gas producer,
for the State Department's Corporate Excellence award. In addition
to achieving business excellence, Apache deserves recognition for
its girls school program, support for communities in which it works,
and exemplary employment and environmental policies.

Apache in Egypt
---------------
2. Apache, a U.S. firm headquartered in Houston, has been active in
Egypt since 1994, when they acquired 25 percent interest in the
Qarun Concession. In 1996, Apache opened its Cairo office, and then
further expanded in 2001, when it acquired Repsol YPF's operating
interest in the Khalda Concession. As of year-end 2007, Apache has
invited $ 4.2 billion in Egypt, with another $1 billion in
investment planned in 2008. Apache has an interest in 14
concessions and 59 development leases.

3. Apache's oil and gas exploration and production activities are
conducted in partnership with the Egypt General Petroleum
Corporation (EGPC). In all its dealings with EGPC, suppliers and
other Egyptian business associates, Apache adheres to the highest
standards of integrity, transparency and ethical business practices,
believing that a system based on these standards is most likely to
provide an open marketplace and encourage additional investment by
Apache and other foreign companies.

Corporate Social Responsibility
-------------------------------
4. The company's reputation as one of Egypt's leading corporate
citizens is based on its strong support for the GirlsQ Education
Initiative, a program of the National Council for Childhood and
Motherhood (NCCM) to provide educational opportunities for girls 6
to 14 years old in rural villages in one room school schoolhouses.
The one room schools accommodate up to 36 girls and have the aim of
teaching them to read, reducing the incidence of early marriage,
educating young girls on health, hygiene and environmental issues
all via an active learning process coordinated by two teacher
facilitators from the area. The ultimate goal is to help the girls
return to the formal education system; once a student misses a year
of education, the public school system will no longer accept her.

5. In 2004, Apache completed the first prototype one-room school in
Abu Sir in the Giza governorate. The school was built to last for 50
years or more and provides a user-friendly environment for modern
educational techniques. It uses prevailing winds for cooling;
windows and high ceilings for optimal natural lighting; and sun
breaks to prevent overheating.

6. Apache then founded Springboard Q One-Room Schools for EgyptQs
Girls, a U.S.-registered NGO, to accept donor funds for the project.
Since then, in cooperation with the Apache-formed U.S. NGO
Springboard -- Educating the Future -- another 202 schools along
the Abu Sir prototype have been built in the Fayoum, Minia, Giza and
Marsa Matruh Governorates. Apache continues to maintain and support
these schools under the Egyptian National Council of Childhood and
Motherhood's program. Subsequently, Apache and its donors have
provided additional support by building fences, planting gardens,
organizing student field trips, and providing basic school supplies,
clothing, hearing aids/glasses, blankets, and computers. In 2008,
Apache acquired 200 laptop computers under the One Laptop per Child
program as a pilot to eventually provide laptops to all 203 schools
and their 5000 students.

7. Apache also supports the Association for the Protection of the
Environment (APE), an organization that provides literacy and skills
training for young women in the Mokattam area of Cairo. Apache
formed Nile Weavers, an NGO that assists with purchasing and
distributing hand crafted products from the poor areas of Egypt to
Apache employees and other organizations in the USA. Funds
generated are returned back to these organizations by additional
purchases or provisions of other needs.

8. In addition to their work with elementary to high school
students, Apache sponsors various universities in Egypt (Azhar
University Geosciences Department, Alexandria University
Geological/Geophysical Department, Fayoum University Early Learning
Program), as well as local schools for expatriates (Cairo American
College, Maadi British School). Apache, working with its Khalda
Petroleum Company affiliate, funded a special one-year on-the-job
training program for 25 new petroleum engineering graduates of Cairo
University. The program was administered by the Colorado School of
Mines Petroleum Engineering Department (Golden, Colorado). Finally,
Apache supports its staff, who also contribute their time as
lecturers at Al Azhar University and Alexandria University.

Other community activities
--------------------------
9. Apache provides support to other community activities as well.
For example, Apache routinely provides logistical and financial
support to the Egyptian Environmental Affairs Agency (EEAA) in their
campaign to raise public awareness of Egypt's natural environment in
areas where they operate. In particular, Apache supported EEAA's
efforts to have the Whale Valley area in the Wadi Rayan concession
designated a World Heritage Site. A number of prehistoric whale
fossils have been discovered in this area. In cooperation with
University of Michigan archeologists, Apache provided financial
support to ship a fossil to the University of Michigan for
preservation and mounting. Once this is done, the fossil will be
returned to Egypt for display. Apache Egypt also recently committed
funds to provide support to the UCLA Fayoum archaeological project
under the direction of Prof. Willeke Wendrich.

10. Apache's other community projects include co-sponsorship of four
Egyptian athletes to train for seven months at the Dekalb
International Training Center in Georgia before the 2004 Athens
Olympics. The firm provided equipment for the Matruh General
Hospital. Apache purchased vehicles and built buildings for Dar El
Hanan, a home for disabled and orphaned children in Fayoum.
Finally, in an effort to address Egypt's road safety problems,
Apache worked with other oil companies to support a road safety
awareness educational campaign.

Exemplary Employment policies
-----------------------------
11. Apache's oil and gas operations require a trained, educated
workforce, and Apache supports training abroad and in-country for
the Egypt corporate office nationals and the joint venture staff.
Through its joint venture companies, Apache provides ongoing
training of Egyptian employees so they can maintain production using
the latest in industry technologies. As the third-largest oil and
gas producer in Egypt, Apache directly employs approximately 245
Egyptian nationals in its corporate activities and indirectly
employs 3000 EGPC Egyptian nationals through its joint ventures with
EGPC. Apache's vendors, suppliers and others doing business with
Apache are expected to conform to US business standards and
practices. Contracts executed require compliance with workers'
rights regarding rights to organize, child labor restrictions,
acceptable working conditions and compliance with international
labor laws regarding timely payment of wages. Additionally,
compliance with US Foreign Corrupt Practices Act is mandatory. In
all of its activities in Egypt and elsewhere in the world, Apache
puts a strong emphasis on safe operations. Apache adheres to health,
safety and environmental standards and policies and encourages local
employees to follow the same guidelines and practices.

Apache and the environment
--------------------------
12. Apache conducts all of its operations in an environmentally
responsible manner. In each of its concessions, employees monitor
operations to ensure that discharges are avoided and to assure a
rapid response to minimize the impact of unintended discharges.
Many of Apache's exploration and production operations occur in
areas of the Western Desert of Egypt that are still littered with
unexploded ordinance (UXO) left over from the WWII battles of the
North African campaign. During the course of their work they have
cleared approximately 500,000 acres of dangerous munitions that are
still lethal despite being buried for over 60 years.

Supporting Egypt's economic development goals
---------------------------------------------
13. Apache is a leader in the application of geosciences technology
in the search for oil and gas in Egypt. Apache was the first
company to routinely use 3D seismic data early in the exploration
cycle. Apache's effective use of this technology is one of the
foundations underlying their notable drilling success. Apache was
also the first company in Egypt to employ SeaBed Logging (SBL) in
the search for hydrocarbons in the deep waters off the Nile Delta.
This cutting edge technology utilizes electromagnetic waves to
identify potential hydrocarbon zones that may be undetectable with
conventional seismic data.

14. From data collection and processing through seismic inversion,
visualization and geologic modeling of complex reservoir systems,
Apache is constantly evaluating new technologies in an effort to
reduce drilling risk, enhance safety and provide a better value for
their shareholders and host government. Apache is a technical
leader in the Egyptian petroleum industry, and a leader in the
introduction of modern oil field production technologies to the
Western Desert including the first wide-scale application of
wellbore fracture stimulation methods, beam pumping units, and
waterflood optimization. Apache has installed 60 natural gas
turbine generators to electrify much of its field operations thereby
displacing the use of hundreds of small diesel-powered generators to
provide a clean, low-cost power source.
SCOBEY

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