Sustainable
Development Report 2022
Мuratzhan
TANIZBAYEV
Best oil and gas production operator “Karazhanbasmunai” JSC
First place in the “Uzdik Maman – 2022” professional contest

Initiatives

The World Bank Initiative “Complete cessation of regular flaring of APG by 2030”

Initiative unites governments, oil companies and development organisations that are ready to cooperate to stop the practice of regular associated petroleum gas (APG) flaring by 2030. KMG supported this initiative in 2015 with a aim of increasing the beneficial use and disposal level of APG and reducing to zero regular flaring.

Global Methane Initiative

KMG supports the Global Methane Initiative (GMI) and regularly discloses its environmental activities to all stakeholders in the Sustainability Report. In 2017, as part of its methane emission reduction activities, KMG joined the GMI Project Network, which is a growing community of private sector entities, financial institutions, and other governmental and non-governmental organisations interested in methane emission reduction projects, and in methane recovery and use.

CDP Climate Program

In 2022, KMG published a 2021 Greenhouse Gas Emissions Report as part of the CDP (Carbon Disclosure Project) Climate Program. The Report contains data on direct and indirect greenhouse gas emissions for all KMG assets, including subsidiaries in Romania and Georgia. The CDP Water Security Questionnaire for 2021 was also published.

The Caspian Environmental Protection Initiative (CEPI)

of Understanding was singed in Baku between JSC NC “KazMunayGas”, the state oil company of the Azerbaijan Republic, BP Exploration (Caspian Sea) Limited, Equinor Apsheron AS and TOTAL E&P Absheron B.V. The Memorandum involves creation of Caspian Environmental Protection Initiative. The main goals of the Initiative will be creating the first platform for environmental protection and joint research of international oil companies operating in the region. Activities of the participating companies will be aimed at active joint efforts in order to resolve climate change problems threatening the Caspian Region’s ecological stability and prevent environmental emissions of greenhouse gases and harmful substances.

CASE STUDY

KMG IN TOP 50 OF THE PWC KAZAKHSTAN’S ESG DISCLOSURE RATING

For the third consecutive year, JSC NC “KazMunayGas” is among the top 50 companies in disclosure of nonfinancial information in corporate reports. The rating was prepared by PwC Kazakhstan and included 98 companies. The survey assessed the quality and availability of ESG information in annual reports and sustainability reports of Kazakh companies published in 2021. To see the rating, please visit https://www.pwc.com/kz/en/assets/top-50-report-eng-2.pdf

Environmental Responsibility Rating of Oil and Gas Companies in Kazakhstan

The Company continues to pursue the path of environmentally responsible business, developing its environmental management system and engaging in dialogue with all stakeholders on this issue, thereby fulfilling its obligations reflected in the Company’s Environmental Policy.

As a result of its efforts to improve environmental performance, and to achieve openness and transparency in this area, for the sixth consecutive year, KMG has been ranked first in the Environmental Data Transparency Rating among oil and gas companies in the Republic of Kazakhstan based on the assessment of independent experts of the World Wildlife Fund (WWF), Creon Group and Analytical Credit Rating Agency (ACRA) rating agency.

On 1 December 2022, in Moscow, at the UN information centre, the World Wildlife Fund (WWF), Creon Group and ACRA rating agency presented the results of the Eurasian Environmental Transparency Rating of Oil and Gas Companies 2022. In total, the 2022 rating included 14 oil and gas companies of Kazakhstan. The rating list is based on oil, gas condensate and oil products output data according to the Ministry of Energy of the Republic of Kazakhstan.

The rating also includes 21 oil and gas companies of the Russian Federation and 2 companies from Azerbaijan. Tatneft has been ranked first among Russian oil and gas companies.

Vision Zero Global Initiative

On March 1, 2022, KMG officially joined the global initiative to promote the concept of Vision Zero.

Vision Zero is a transformational approach to prevention that integrates the three dimensions of safety, health and well-being at all levels of work. The ISSA’s Vision Zero concept is flexible and can be adjusted to the specific safety, health or well-being priorities for prevention in any given context. This concept implies a sequence of actions by the employer in order to protect the employees as much as possible, to create optimum working conditions. On behalf of the employee – working safely, growing responsibility not only for themselves, but also for colleagues.

Initiative of Engagement with Republican Public Association “Oil & Gas Industry Veterans” (OGIV)

The mission of RPA “Oil & Gas Industry Veterans” is creating the conditions for interactive communication of industry veterans, meeting their professional and amateur interests aimed at development of the oil and gas industry, using their potential and experience in operations, active participation in the life of society, transferring their life and professional experience to the younger generation of oil workers.

In 2021, a Memorandum of Understanding and Cooperation was signed between JSC NC “KazMunayGas” and RPA “Oil & Gas Industry Veterans”. It was agreed in the Memorandum to utilise the practical experience, scientific, technical and intellectual potential of oil & gas industry veterans. The Expert Council of oil & gas industry veterans of JSC NC “KazMunayGas” has been established. The key objectives of the Council are developing the recommendations for implementation of KMG’s strategic programs in the field of technological and digital development of the oil and gas industry, discussing public initiatives related to oil and gas industry development, participating in developing expert recommendations for the regulatory framework of the oil and gas industry, preparing expert opinions on issues significantly affecting the operations of KMG, providing analytical, expert, informational and advisory support in the operations of KMG.

Oil Spill Preparedness Regional Initiative (OSPRI)

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The Initiative is aimed at assistance and support of oil industry and the regional government in joint work contributing to making the accepted, reliable, integrated and sustainable national, regional and international decisions regarding oil spill response. The initiative is implemented through IPIECA, the global oil and gas industry association for ecological and social issues (www.ipieca.org). For IPIECA, OSPRI is the regional means of implementing the international efforts on assistance to Oil Spill Preparedness, in close cooperation with International Marine Organisation (IMO – www.imo.org) and other international organisations.

CASE STUDY

KASE AWARDED ORGANIZATIONS BASED ON THE RESULTS OF THE ANNUAL REPORTS COMPETITION FOR 2021

On February 17, 2023, the Kazakhstan Stock Exchange (KASE) held an award ceremony for organizations based on the results of the annual reports competition for 2021. In the nomination “The Best Sustainable Development Report for 2021”, the winner was “KazMunayGas” National Company https://kase.kz/ru/news/show/1497148/

Membership

National Chamber of Entrepreneurs of the RoK “Atameken”

KMG and the National Chamber of Entrepreneurs of the RoK “Atameken” entered into an agreement on cooperation in legal matters. The agreement provides for interaction of the parties in such important legal areas as improvement of legislation, development of joint programs and projects aimed at raising legal culture, expanding the role of arbitration in resolution of commercial disputes, etc.

Kazakhstan Association of Oil, Gas and Energy Sector Organisations “KAZENERGY”

The KMG management is involved in the activities of several committees and working groups of the Association.

The chairmanship in the Coordination Council of KAZENERGY for ecology, social responsibility and transparency is an opportunity for KMG to promote sustainable development in the oil and gas sector of Kazakhstan.

KMG and Kazakhstan Association of Oil, Gas and Energy Sector Organisations “KAZENERGY” have entered into a Memorandum of Cooperation.

The Memorandum provides for joint activities in such key legal areas as improvement of the RoK legislation; development of joint programs and projects aimed at raising legal culture; cooperation in holding round tables, seminars, conferences on topical issues in the legal field, etc.

The UN Global Compact

Our membership in the UN Global Compact and the annual posting of the Sustainability Report on the UNGC website to show KMG’s progress in promoting the principles of the Global Compact and 17 Global Sustainable Development Goals clearly demonstrate our commitment to the principles of sustainable development.

International Association of Oil and Gas Producers (IOGP)

Since 2018, KMG has been a full member of the International Association of Oil and Gas Producers (IOGP).

During the years of IOGP membership, KMG studied and used international best practices and recommendations of IOGP, which helped to improve the performance and overall management system of KMG in the field of HSE, as well as increased the capabilities and rating of KMG at the international level.

Since 2022, KMG has moved to the common for all members of the IOGP Life-Saving Rules, which replaces the KMG’s former “Golden Rules”.

IOGP has analyzed two thousand fatal accidents in about one hundred IOGP member enterprises from 1991 to the present. As a result of the analysis, the association identified the most frequent safety violations.

To prevent these violations, 9 Life-Saving Rules were developed. These rules inform employees about actions they can take to protect themselves and their colleagues from fatalities.

National ESG Club

n 2022, KMG joined the National ESG Club, the priority objectives of which are to develop recommendations and expert assessments in the following areas: reduction of environmental impact in the Republic of Kazakhstan, development of sustainable financing at a new level, attraction of investments in decarbonization of economy and social projects, creation of favorable conditions for Kazakhstan business in ESG transformation

“Qazaq Green” RES Association

As part of the Low Carbon Development Program, KMG intends to implement its own renewable energy projects. For this purpose, KMG develops its competence in the field of renewable energy and actively participates in the improvement of legislation.

In the beginning of 2022, KMG joined “Qazaq Green” RES Association, created to promote the principles of “green economy” and the achievement of carbon neutrality of the Republic of Kazakhstan.

The key tasks of the Association include representing and protecting the interests of the members of the Association in state bodies, participating in the legislative process, making specific proposals to state bodies to create favourable conditions for the implementation of renewable energy projects in Kazakhstan.

Kazakhstan Association of Regional Environmental Initiatives “Ecojer”

KMG joined the Kazakhstan Association of Regional Environmental Initiatives “Ecojer” in 2021. The goal of the Association is to consolidate the business community and civil society to represent and defend common interests and promote environmental protection activities based on a balanced approach between public policy areas, the concerned public and the need to develop economic potential.

International Association for Emergency Oil Spill Response (OSRL)

Oil Spill Response Limited (OSRL) is a British company established in 1985 and specializing in oil spill response and offering its services worldwide. More than a hundred world companies are members of the OSRL. The Company pays primary attention to prevention and removal of oil contaminations not only offshore but also in coastal areas.