SUPPLY CHAIN MANAGEMENT

At Ovintiv, we take an integrated multi-basin approach to supply chain management. Our supply management team is woven into all levels of our organization, from corporate operations to our field teams.

We work hard to build transparent, long-term relationships with our suppliers to create a competitive environment that drives innovation. We want to know who we are working with and how they run their organization. This often means being on the ground in the field, touring their shops and looking for opportunities to spur innovation. We also recognize the importance of supporting the communities and businesses in our operating areas to ensure there is a local presence and, in some cases, to foster new investment.

From an operational perspective, we are committed to ensuring our suppliers share our high safety standards. We maintain a Supplier Code of Conduct as well as a Service Provider Expectations Manual that aligns with our Business Code of Conduct and sets forth our expectations both from a business perspective as well as on important social issues, such as human rights. Suppliers must maintain integrity, transparency and compliance in all that they do.

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Ovintiv’s Supply Management team is committed to furthering environmental, social and governance progress. For example, Ovintiv utilizes production casing sourced from Vallourec’s manufacturing facilities in Ohio that are powered by 100% low carbon electricity. By selectively sourcing tubular products from this supplier, Ovintiv was able to avoid more than 63,000 metric tons of CO2e emissions since 2021. Additionally, Vallourec maintains a 98% waste recycling rate, which indicates their commitment to sustainability and providing their suppliers the lowest impact products available.

INNOVATION IN ACTION

LOCALLY SOURCED WET SAND REDUCES EMISSIONS AND LOWERS COSTS

Historically, the sand used in hydraulic fracturing was dried and transported to the wellsite, a process that is emissions, fuel and cost intensive. We have developed an innovative way to use locally sourced wet sand instead, lowering our environmental footprint. It also reduces hazardous airborne dust and can be stored in large, low-cost decanting piles. Locally sourcing the sand reduces transportation from traditional mines that are typically located long distances from the wellhead. In our Permian operations, the combination of sourcing sand locally and removing the drying process has reduced emissions more than 80% compared with imported sand.

 

Understanding our Supply Chain

In the face of supply chain disruptions and increasing geopolitical uncertainties across the world, our Supply Management team has embraced our value of agility by proactively identifying and mitigating risks to, and in, our supply chain. This includes engaging with key suppliers annually to capture their insights about current and potential disruptions to Ovintiv’s supply chain as well as gathering and integrating known trade barriers into our analysis and decision-making.

As part of our commitment to furthering social and governance progress, we developed an internal methodology to integrate social considerations into our sourcing selection process. We conducted a supply chain risk assessment that allowed us to map our Global Supply Chain and develop a Risk Protocol Matrix. The matrix provides a high-level snapshot of the location of our main suppliers and products. This enables us to continually identify and mitigate potential risks as well as supply disruptions, decreasing exposure for both Ovintiv and our suppliers to the ever-changing global supply chain.

To further assist with our due diligence and risk assessment, all counterparties are required to complete a questionnaire which includes human rights questions as part of our initial onboarding process and as part of an annual review process thereafter. We use third-party software to monitor and manage vendor risk. Service providers and suppliers identified as having a higher operational risk are subject to additional screening or audits as part of our operations management system.

In 2024, we made payments to over 3,300 suppliers, of which approximately 99 percent are based in the U.S. or Canada.