ENVIRONMENTAL RESPONSIBILITY

ENVIRONMENTAL RESPONSIBILITY

OUR APPROACH TO MANAGEMENT

HSE MANAGEMENT SYSTEM

ENVIRONMENTAL IMPACT ASSESSMENT

OPERATIONS ENVIRONMENTAL CONTROL

INTERNAL AND EXTERNAL STAKEHOLDER ENGAGEMENT SYSTEM

ENVIRONMENTAL FINANCE

ENERGY USE AND SAVING

WATER MANAGEMENT

Atmosphere Protection

Climate change and greenhouse gas emission

Waste management

Biodiversity conservation

Oil spill prevention

 

OUR APPROACH TO MANAGEMENT

HSE management objectives are directly linked to the Group's Development Strategy. KazMunayGas Strategy-2028 includes strategic initiatives to increase environmental responsibility. Group priorities in terms of environmental protection include greenhouse gas emissions management and flaring reduction, water resources management, production waste management, land reclamation and energy efficiency.

 

Environmental Policy based on the Strategy priorities was adopted.  KazMunayGas management and its subsidiaries follow the principle of zero tolerance for environmental losses and damages. Thus, for example, for the first time such environmental aspects as climate, biodiversity, additional risk assessment of ecologically valuable territories, contaminated land reclamation, pipelines integrity are discussed in the Policy.

In 2015, KazMunayGas joined the World Bank's Zero Routine Flaring by 2030 initiative. In 2019, Emission Management Policy was adopted in KazMunayGas Group as part of the above initiative. The Emission Management Policy consists of eight key emission management principles.

Health and Safety Policy of KazMunayGas is based on top management leadership, occupational health and safety, and initiates employee involvement in safety culture evolution. Management of KazMunayGas and its subsidiaries follows the principle of zero tolerance for losses and damage caused by accidents and incidents and undertakes to comply with the international and national standards parallel to national legislation.

Alcohol, Drugs and Psychotropics Policy and Safe Driving Policy of KazMunayGas prescribe the priority of an employee life and health, at the same time they rule out alcohol, drugs and psychotropics use to prevent road accidents and mitigate their consequences and damage to the Company's property. The management of KazMunayGas and its subsidiaries follows the principle of zero tolerance for alcohol, drugs and psychotropics use, as well as for losses and damages caused by road accidents.

All Policies apply to all Group employees, as well as employees of contractors and service providers, and are the part of Company's business relations with its partners.

The purpose of the The Health, Safety and Environment Leadership and Commitment Code for JSC NC “KazMunayGas” Group Employees is to improve the safe work culture, increase the personal interest of each Employee in preventing Incidents and ensure active involvement in health, safety and environment activities (hereinafter — HSE) within the KMG Group.

A key milestone in 2018 in terms of water resources protection was that KazMunayGas adopted a Corporate Water Management Standard. The Standard states the main principles of KMG in terms of water resources use - 8 Water Principles; it gives a systematic approach to water resources management. And in 2019, Company CEO signed a Personal Statement of Commitment to Sustainable Water Management. From now on, we adhere to strict water resources use principles, work out long-term plans to reduce consumption throughout the group, and introduce new water-saving technologies. We have already started several large-scale projects to treat waste and salt water for industrial purposes, which will give more fresh water to the public.

Commonly known that the proper contractor qualification and cooperation skills provide an important competitiveness privilege for a company. The company is trying to upgrade the contractor qualification criteria to achieve high performance and transparency during the entire services period. KazMunayGas Group Corporate Standard on Contractors Cooperation on HSE Issues is a structural element of the Management System and prescribes the requirements to contracts with contractors, including HSE Agreement, where compliance with HSE requirements and penalties for violations are included; contractor's personnel, machinery and equipment pre-mobilization audit, assessment of contractor's HSE performance are provided.

KazMunayGas Group Corporate HSE Competence Standard prescribes HSE Competence levels required for each element of HSE Management System that KazMunayGas Group employees should match in accordance with their job group. 

The Plan of Communication and Awareness of Risks in the Field of Health, Safety and Environment in JSC NC “KazMunayGas” Group, which was developed considering the recommendations of the Reference Model of the Industrial Safety Management for Portfolio Companies of Samruk-Kazyna JSC in order to improve the KMG Health, Safety and Environment management system.

From 2017, the Group is following the Energy Saving and Energy Efficiency Roadmap 2017-2020.

KazMunayGas Group Health and Environment Improvement Roadmap - 2020 contains the main environmental protection and sustainable development strategic initiatives. The Roadmap indicators are monitored on an annual basis.

In order to increase the operating assets production that falls naturally, KMG will take a number of actions, as provided by Strategy 2018-2028, to enhance operational performance and technological practice, as well as to engage immobile oil in order to achieve maximum well productivity, and improve the technological and economic performance of geological and engineering activities through:

  • expansion of the innovation and technological base, including fields digitalization projects;
  • removal of surface infrastructure restrictions after gas flaring and water recycling issues are addressed;
  • growth of oil recovery factor at operational assets;
  • enhanced flood control;
  • polymer flood expansion;
  • launch of additional exploration facilities at operational production assets.

An important component of further development of the Company is improving the efficiency of production at mature fields. To accomplish this task, production processes at the KMG production facilities are being continuously monitored for the purposes of their optimization, observance of the energy conservation policy and the ways to increase the oil recovery factor are being sought, for example, putting new wells into operation, hydraulic fracturing, well workover, additional perforation and re-perforation of formations and polymer flooding (from KMG’s 2019 Annual Report).

HSE management   

Structure of HSE Management System & Implementation of best practices

HSE Management is based on the best international practices, including recommendations of International Association of Oil and Gas Producers IOGP, ISO 14001 and ISO 45001. This system is based on four fundamental principles: leadership, goal achievement, risk management and continuous improvement. The system consists of 10 elements (system sections).

Since 2006, the quality, environment, health and safety management systems are kept operating and comply with the requirements of ISO 9001, ISO 14001 and OHSAS 18001.

KMG GROUP MANAGEMENT SYSTEMS DATA

ENVIRONMENTAL IMPACT ASSESSMENT

In accordance with the precautionary principle (Principle 15 of Rio Declaration on Environment and Development, 1992), as well as the requirements of KazMunayGas environmental management system and provisions of the legislation of the Republic of Kazakhstan, an environmental impact assessment (EIA) is included in project planning stage as the environmental and other impacts of managerial and economic decisions and recommendations on environment healing, prevention of  ecosystems devastation, environmental degradation, damage and depletion should be first analyzed. Besides, at the design stage of each project, public hearings are held with participation of stakeholder representatives, including administrative, state and regulatory bodies, research organizations, public associations, local communities, and mass media. We provide access of all stakeholders to EIA projects, as well as ensure acceptance and registration of comments and proposals. All KazMunayGas Group EIA projects are subject to state environmental impact assessment and are available to the interested public on the official website of the Company and websites of local authorities throughout the project life.

In 2018–2019, 77 meetings with the local community and public organisations were held, including 27 meetings in 2019 and 50 in 2018. Following the public hearings, appropriate measures are taken with account of the recommendations and opinions of the stakeholders.

EIA links:

Atyrau region

EIA “Satpayev” field

Pre-EIA of prospecting work of “Zhambyl” field

Pre-EIA  for appraisals work project in “Zhambyl” field

EIA of  Nurzhanov, Aktobe, Western Prorva oilfields in “EmbaMunayGas” JSC

Pre-EIA of  Kenbay oilfield in “EmbaMunayGas” JSC

Pre-EIA  Agiken, Nurzhanov oilfields in “EmbaMunayGas” JSC

Pre-EIA of Isatay field

Embamunaygas JSC informs about public hearings regarding the PreEIA projects for the Project for Development of Uaz North Field and for the Project for Development of Moldabek East Site of the Kenbai Field -1

Embamunaygas JSC informs about public hearings regarding the PreEIA projects for the Project for Development of Uaz North Field and for the Project for Development of Moldabek East Site of the Kenbai Field -2

Embamunaygas JSC informs about public hearings regarding the PreEIA project for the Project for Development of the East Makat Field.

Embamunaygas JSC informs about public hearings regarding the PreEIA project for the Project for Pilot Operation of the S. Nurzhanov Field (North-Western Wing)

Public hearings are held regarding the environmental impact assessment for the Project of Soil Surveying at the Point of Drilling the Exploration Well in the Issatai Area.

Public hearings are held regarding the environmental impact assessment for the individual technical project “Construction of the vertical exploration well Abai-1 in the Abai area”.

Intergas Central Asia JSC holds public hearings in the form of an open meeting regarding the Environmental Protection Section of the detailed project “Overhaul of the Makat-North Caucasus MGP in the section 2-361 km with development of DED”

KazTransGas JSC announces public hearings regarding the Environmental Protection Section of the detailed project: facility “Complex Gas Treatment Plant (CGTP) with a capacity of 1,000,000,000 nm3/year at the Kashagan field of the Atyrau Region”.

Mangystau region

Pre-EIA   «Oil Construction Company»  LLP district of the Quarry №9 oilfield

EIA «Oil Construction Company» LLP  to the project "Exploration for sand and gravel mixture" in the  district of the Quarry №9 oilfield

EIA business unit of  “KazMunayTeniz” JSC OOC in Aktau c. Borankol oilfield

Pre-EIA for the Evaluation Project on the structure of Nursultan

EIA ОВОС Construction of a plant for desalination of reservoir water at the Karazhanbas oilfield

EIA  "OzenMunayGas" JSC "Design of an additional unit of the 4th measuring line"

Karazhanbasmunai JSC holds public hearings regarding the EIA section for the detailed project “Modernization of CPC facilities of the Karazhanbas field”

Ozenmunaigas JSC holds public hearings regarding the PreEIA section for the project “Development of gas deposits of the Uzen field as of 01.01.2019”

Mangistaumunaigaz JSC informs about public hearings regarding the detailed project “RVS-10,000 m3 in the amount of 2 units at the CPC of ZMG PA at Zhetybai field”

Mangistaumunaigaz JSC holds public hearings regarding the detailed project “Completion of infill wells at the Zhetybai field. Stage XVIII”

KazTransOil JSC holds public hearings in the form of an open meeting regarding the Environmental Protection Section of the detailed project “MOP Uzen-Atyrau-Samara F1020mm. Replacement of the pipeline at sections 230–244 km, 267–282 km, 284–291 km, with a total length of 36 km”

Zhenis Operating LLP holds public hearings regarding the projects “Technical design for construction of a prospecting well V-1 at the Zhenis structure” and “Project of well abandonment at the Zhenis structure”, including the projects “Environmental impact assessments”

Mangistaumunaigaz JSC holds public hearings regarding the detailed project “Expansion of the WPS pumping station at the Assar field”

Mangistaumunaigaz JSC holds public hearings regarding the detailed project “Completion of infill wells at the Kalamkas field. Stage XVI”

Mangistaumunaigaz JSC holds public hearings regarding the section “Preliminary environmental impact assessment” for the project “Development of the Airantakyr field”

Mangistaumunaigaz JSC holds public hearings regarding the section “Preliminary environmental impact assessment” for the project “Development of the North Akkar field”

Zhenis Operating LLP holds public hearings regarding the EIA section for the detailed project “Project of soil surveying at the location of the exploration well V 1”

Ozenmunaigas JSC holds public hearings in the form of a poll regarding the Pre EIA section for the FS “Construction of a seawater desalination plant”

Zhenis Operating LLP holds public hearings regarding the PreEIA section for the project “Exploration work at the Zhenis area”

Aktobe region

Pre-EIA “Urikhtau operating” LLP  "Project of evaluation works at the Southern Urikhtau oilfield"

EIA business unit of “Intergas Central Asia” JSC for the project of Development of DED for the reconstruction of SP-2, SP-3, SP-4, SP-5, SP-7 and new construction of SP-1, SP-6 “Bozoy” of the “Zhakstkuyankulak” field

EIA “KazTransOil” JSC for the working project "Reconstruction of antenna-mast constructions"

EIA “KazTransGas Aimak” JSC for the working project: "Construction of a reserve line of the high-pressure gas pipeline through the Ilek r. in the district of CHPP between LK-6 and LK-7 in Aktobe"

EIA for the working project : "Loopback of the gas pipeline from SHP-36 12 microdistrict Aktobe"

UMG “Aktobe”, a branch of Intergas Central Asia JSC, informs about public hearings in case of quarantine extension in the form of videoconferencing (using ZoomVideoCommunications, login: 2538101026, password 0ShUiN) for the project “Expansion of the Kozhassai compressor station”.

UMG “Aktobe”, a branch of Intergas Central Asia JSC, informs about public hearings in case of quarantine extension in the form of videoconferencing (using ZoomVideoCommunications, login: 2538101026, password 0ShUiN) for the project “Landscaping and reconstruction of buildings and structures of industrial sites and access roads of KS-12 of the Shalkar LOA”.

Urikhtau Operating LLP informs about public hearings in case of quarantine extension in the form of videoconferencing (using Zoom Video Communications, login: 2538101026, password 0ShUiN) for the project “Preliminary environmental impact assessment” for the Project for Development of Urikhtau Field, Horizon KT I.

KAZAKHOIL AKTOBE LLP informs about public hearings in the form of videoconferencing (using Zoom Video Communications, login: 2538101026, password: OShUiN) for the project “Reconstruction of the oil demercaptanisation unit at the Alibekmola field” and “Gas quality measurement unit at the Alibekmola field”.

Urikhtau Operating LLP informs about public hearings in the form of an open meeting regarding the project “Environmental impact assessment” for the project “Group technical design for construction of U-6 and U-7 appraisal wells at the Urikhtau field”.

OPERATIONS ENVIRONMENTAL CONTROL

KazMunayGas subsidiaries take industrial environmental control activities based on the Industrial Environmental Control Program and report to the competent State Environment Authority on a quarterly basis.

Emissions into environment and their impact monitoring is the part of operations environmental control and include the following:

- monitoring of pollutant emissions into the air (nitrogen oxides, carbon monoxide, sulfur dioxide);

- monitoring of pollutant discharges (sulfates, chlorides, suspended solids, nitrates, nitrites, petroleum products and other pollutants);

- radiation monitoring (dosimetry and radiometric control)

- monitoring of atmosphere within the sanitary protection zones (hydrogen sulphide, hydrocarbons, nitrogen oxides, carbon oxide, sulfur dioxide);

- monitoring of water resources (sulfates, chlorides, suspended solids, nitrates, nitrites, petroleum products and other pollutants);

- top soil monitoring (metals, sulphates, chlorides and other pollutants);

The results are checked with emission and hygienic standards, and urgent actions are taken where the limits are exceeded.

All industrial environmental control reports are published on the Unified Environmental Internet Resource of the Ministry of Ecology, Geology and Natural Resources of the Republic of Kazakhstan (http://prtr.ecogosfond.kz/otchety-rvpz/ ) and are available to all interested parties.

 

Results of KMG Subsidiaries:

KazTransOil JSC

Kulsary branch

http://prtr.ecogosfond.kz/2019/12/04/rvpz-2018-10knu-ao-kaztransojl/

Atyrau branch

http://prtr.ecogosfond.kz/2019/12/04/anu-ao-kaztransojl/

Uralsk branch

http://prtr.ecogosfond.kz/2019/12/06/kaztransojl/

Pavlodar branch

http://prtr.ecogosfond.kz/2019/12/05/too-burenie-i-k-mr-aryskum/

Intergas Central Asia JSC

Aktau branch

http://prtr.ecogosfond.kz/2019/12/10/umg-aktau-ao-intergaz-centralnaja-azija/

Aktobe branch

http://prtr.ecogosfond.kz/2019/12/07/umg-ica/

Kyzylorda branch

http://prtr.ecogosfond.kz/2019/12/06/too-intergaz-centralnaja-azija/

Uralsk branch

http://prtr.ecogosfond.kz/2019/12/06/ica-umg-uralsk/

Uralsk branch

http://prtr.ecogosfond.kz/2019/12/06/filial-umg-uralsk-ao-integraz-centralnaja-azija/

 

 

OzenMunaiGas JSC

http://prtr.ecogosfond.kz/2019/12/10/ao-uzenmunajgaz/

MangistauMunaiGas JSC

http://prtr.ecogosfond.kz/2019/12/10/ao-mangistaumunajgaz/

Karazhanbasmunai JSC

http://prtr.ecogosfond.kz/2019/12/10/ao-karazhanbasmunaj/

EmbaMunaiGas JSC

http://prtr.ecogosfond.kz/2019/12/04/ao-jembamunajgaz-2/

KazakhTurkMunai LLP

South Karatobe site

http://prtr.ecogosfond.kz/2019/12/07/too-kazahturkmunaj-mestorozhdenie-juzhnoe-karatobe/

Laktybai site

http://prtr.ecogosfond.kz/2019/12/07/too-kazahturkmunaj-mestorozhdenie-laktybaj/

KazakhOil Aktobe LLP

http://prtr.ecogosfond.kz/2019/12/07/too-kazahojl-aktobe-2/

Kazgermunai LLP

http://prtr.ecogosfond.kz/2019/12/06/too-sp-kazgermunaj-2/

 

 

Pavlodar Petrochemical Refinery LLP

http://prtr.ecogosfond.kz/2018/12/21/too-pavlodarskij-neftehimicheskij-zavod/

PetroKazakhstan Oil Products LLP

http://prtr.ecogosfond.kz/2018/12/30/too-petrokazahstan-ojl-prodakts/

Atyrau Refinery LLP

http://prtr.ecogosfond.kz/2019/12/04/too-atyrauskij-npz-2/

INTERNAL AND EXTERNAL STAKEHOLDER ENGAGEMENT SYSTEM

Today, KazMunayGas Group is an absolutely transparent company with a developed system of internal and external stakeholder engagement.

Health, Safety and Environment activities of KazMunayGas Group are coordinated by Corporate Centre HSE Managing Director. The Corporate Centre analyzes achievements and what should be enhanced, as well as states goals and objectives for future HSE and energy efficiency activities, and makes benchmarking based on past periods and similar indicators of industry leading international companies (IOGP, IPIECA).

Since 2017, a three-level system of HSE Committees was adopted: functional HSE Committee at the Board of Directors level, KazMunayGas Management level HSE Committees, subsidiaries level HSE Committees. And since 2019, Samruk-Kazyna Health, Safety and Environment Committee started its activity.

Today KMG is a member of various international organizations and associations. We regularly report to stakeholders on our progress in HSE.

  • KazMunayGas is a member of the UN Global Compact and confirms its commitment to the 10 Compact principles in environment, human rights, anti-corruption and labor relations;
  • In 2015, KMG joined the World Bank's global Zero Routine Flaring by 2030 initiative. Our goal is to increase APG utilization and utilization rates and minimize flaring;
  • Since 2015, KazMunayGas annually publishes sustainability report as required by GRI Standard and GRI Guide for oil and gas sector. EY Assurance is on pages 122- 123 of KMG Sustainability Report 2018;
  • In 2017, KMG joined the Global Methane Initiative Project Network as part of KMG's methane emission reduction activities; in 2018, KMG participated in a meeting of GMI Oil and Gas Subcommittee within the Global Methane Forum. In December 2019, the KMG and SACs employees took part in a seminar “Monitoring and reducing of greenhouse gas (methane) emissions in the oil and gas industry”, organised by the Asian Development Bank together with a KMG’s partner the Norwegian company Carbon Limits.
  • Since 2018, KMG has become a full member of the International Association of Oil and Gas Producers (IOGP) and submit annual reports;
  • For the first time this year, KMG published verifiable greenhouse gas emissions report (Level 1, 2 and 3) under the Carbon Disclosure Project. KMG has been assigned the “C” climatic rating, which is the industry average in the oil and gas sector.
  • In 2020, following the results of 2019, the Climate Questionnaire and, for the first time, the Water Safety Questionnaire were posted on the CDP platform;
  • In 2019, KMG for the first time held a Greenhouse Gas Emissions Management Forum.

The result of management system improvement: KMG once again has confirmed the title of the most environmentally transparent and responsible company in Kazakhstan, topping for the third consecutive year the oil and gas companies openness rating at the end of 2019, which was recognized by the World Wildlife Fund (WWF) of Russia and the Capital Group and the National Rating Agency with the support of the Ministry of Ecology, Geology and Natural Resources of the Republic of Kazakhstan and in partnership with the United Nations Environment Programme in Central Asia (UNEP-CA).

Results of the Environmental Responsibility Rating of oil and gas companies in Kazakhstan:

OGC Environmental Responsibility Rating 2017

OGC Environmental Responsibility Rating 2018

OGC Environmental Responsibility Rating 2019

In the regions, where the Company operates its activities, there is no local population with traditional lifestyle.

Contacts for citizens applying on environmental issues:

Telephone: +7 (7172) 78 61 92

е-mail: hse@kmg.kz

Consideration of individuals and legal entities appeals and control over their execution:

  1. Consideration of individuals and legal entities appeals, including appeals of KMG Group employees are regulated by KMG Group Corporate Workflow Procedure and in cases stipulated by the Individuals and Legal Entities Appeals Consideration Act of Republic of Kazakhstan, the relevant provisions of this Act.
  2. All appeals of individuals and legal entities received by KMG Group are subject to consideration.
  3. Individual's appeal shall include name, surname, as well as patronymic (optionally) and postal address. An appeal should be signed by the applicant. When submitting the appeal, subject-matter or position, surnames and initials of the employees, whose actions are appealed against, appeal motives and requirements shall be indicated.
  4. Management of KMG Group shall, within its competence:

1) ensure unprejudiced, comprehensive and timely consideration of appeals with their participation, where appropriate, make lawful and justified decisions and monitor the implementation of decisions;

2) inform applicants in writing about results of their appeals consideration, actions taken or of their appeals forwarding to other entities or persons in accordance with their competence;

3) not send a complaint to persons whose actions (omissions) are being appealed against;

4) not allow individuals or legal entities to appeal to the detriment of the person, who appealed or to whose benefit they appealed.

 

ENVIRONMENTAL FINANCE

To effectively manage environmental risks, the Company is permanently improving its approaches to environmental management and allocates necessary resources for environmental protection.

Environmental costs include taxes on permitted emissions, cost of environmental activities, insurance, compensatory environmental measures, investments to prevent environmental impact, etc. We increased the budget for historical waste treatment and contaminated land remediation. Investments in waste treatment increased 3 times since 2015 and make up over a third of all environmental costs. At the same time, a reduction in air pollutant emission fees is observed. Environmental costs amounted to KZT 18.8 billion in 2019, which is KZT 2.4 billion more than in 2018.

Top-priority Environmental Projects

Liquidation of historical contamination as well as liquidation of negative environmental impact sources (idle wells, waste water collectors, landfills and other production facilities).

Reduction in environmental emissions by improving process solutions, for example, replacing heating oil with heating/natural gas used as fuel in process furnaces, using new generation additives, planting and developing the territories of production facilities, replacing equipment, extending gas refining capacities, constructing gas refining plants, etc.

Reduction in pollutant emissions: Tazalyq project: upgrade of waste water treatment facilities of Atyrau Refinery and remediation of Tukhlaya Balka evaporation ponds.

Overhaul of the cooling tower to increase the volume of fresh technical water by 3,000 m3; improvement of the performance of treatment facilities.

For upstream subsidiaries of KMG Group, a comprehensive Insurance of Third Party Liability, including insurance of environmental risks, has been implemented as part of the Energy Risk Insurance. The specified insurance coverage is voluntary and is based on the Samruk-Kazyna Corporate Insurance Standard and legal entities, whose more than fifty percent of the voting shares (participation interest) are beneficially or nonbeneficially owned by Samruk-Kazyna.

Dynamics of environmental fees and costs, KZT bln

 

 

Share of payments for emissions that exceeded the limits in 2019, bn KZT

 

COMPLIANCE WITH THE REQUIREMENTS

We are committed to compliance of our business with the laws of the Republic of Kazakhstan and take appropriate actions to prevent environmental damage. The Company works to identify non-compliances at its production assets with the environmental legislation of the Republic of Kazakhstan, to understand what the problems are and identify risk management shortfalls to take actions that would prevent any non-compliance with the requirements of the legislation.

These bar plots show the amounts of penalties charged and paid, except for sour gas flaring without permission (presented separately).

By court order, the penalties charged were recalculated for the entire period of sour gas flaring without permission from 34.4 to 8.7 bln tenge. The penalty amount was disputed and reduced by 25.7 bln tenge.

Information about accidents and incidents and cleanup operations

Kalamkas accident

http://www.kmg.kz/rus/press-centr/press-relizy/?cid=0&rid=672

Kalamkas well №8237 mud volcano (water and gas breakthrough)

http://www.kmg.kz/rus/press-centr/press-relizy/?cid=0&rid=670

Kalamkas fire isolated

http://www.kmg.kz/rus/press-centr/press-relizy/?cid=0&rid=651

Kalamkas accident information report

http://www.kmg.kz/rus/press-centr/press-relizy/?cid=0&rid=649