About the Company’s Contribution to Achieving the SDGs

3.6. Reduce the number of deaths and injuries from road traffic accidents

Travel Management Project

In order to improve transport safety and create a culture of safe driving, a phased replication of the project for the introduction of an automated vehicle monitoring system “Travel Management“ in SDEs, which account for the largest number of vehicles of KMG Group, is planned for the period from 2023 to 2025.

Result

The following work has been carried out as part of the replication:

• 7 KMG subsidiaries and dependent entities carried out diagnostics of transport management processes (KBM, OMG, MMG, OSC, OTC, KTO, KMG-S).
• 5 KMG subsidiaries and dependent entities approved the Roadmap for replication of the “Travel Management“ project (KBM, OMG, MMG, OSC, OTC).

Road traffic accident frontal collision simulator (convincer)

In order to raise awareness among employees of KMG subsidiaries and dependent entities of the need to use seat belts, KMG Group purchased 3 convincers (KTO, OMG, OTC).

Result

As part of the “Stop Road Traffic Accident“ campaign in 2023, a practical demonstration of the convincer was conducted with the involvement of employees of other KMG subsidiaries and dependent entities, in which 7,783 employees of KMG subsidiaries and dependent entities participated.

1,451 employees of subsidiaries and dependent entities and 454 employees of contractors were trained in Defensive Driving in accordance with RoSPA International Standards.

3.8. Achieve universal health coverage, including financial risk protection, access to quality essential health-care services and access to safe, effective, quality and affordable essential medicines and vaccines for all

Staff wellness programme

A staff wellness programme is being developed for 2024–2028 and the main areas of focus are:

an information system that will ensure control and monitoring of employees with chronic diseases, production personnel; introduction of comprehensive prevention programmes for chronic diseases; innovative methods of pre-shift examinations; reduction of personnel morbidity, improvement of accessibility and quality of medical care.

Medical health insurance

Medical examinations and immunisations for employees are carried out on a regular basis.

Result

100 % of KMG’s employees are covered by the health insurance programme.

3.9. Significantly reduce the number of deaths and illnesses from hazardous chemicals and air, water and soil pollution and contamination

Leadership initiatives

The Code of Leadership and Commitment of Employees on Compliance with Health, Safety and Environment Requirements is introduced and implemented.

Qorgau Card

A Programme is implemented to identify and report an unsafe condition / unsafe behaviour / unsafe act / hazard.

5.1. End all forms of discrimination against all women and girls everywhere

KMG strictly complies with the requirements and does not violate the RoK labour law, which states that no one may be subjected to any discrimination in exercise of their labour rights on the grounds of origin, social, official status and material position, gender, race, nationality, language, religious beliefs, convictions, place of residence, age, physical disability or affiliation with public associations.

Competitive recruitment procedures have no restrictions on gender, age or other grounds. Uniform labour remuneration and the same conditions of social support are established for all.

5.5. Ensure women’s full and effective participation and equal opportunities for leadership at all levels of decision-making in political, economic and public life

Increasing the share of women in the Board of Directors and Supervisory Boards of KMG Group to 20 % by December 2023 and 30 % by 2030.

Promoting WEP’s, an initiative created by UN Women and the UN Global Compact. WEP’s (Women’s Empowerment Principles) are based on international labour and human rights standards and on the recognition that business has a stake in and responsibility for gender equality and women’s empowerment.

As part of this initiative, it is planned to:

• sign the Company’s CEO Statement of Support for the Women’s Empowerment Principles;
• conduct a self-assessment using the WEP’s Gender Gap Analysis Tool. It assesses the strategic approach to gender equality, identifies gaps and opportunities for continuous improvement, and helps set goals and targets;
• disclose gender-disaggregated data in sustainable development reports to communicate progress to stakeholders.

7.1. Ensure access to affordable, reliable and modern energy services

The main strategic areas of energy saving and energy efficiency development in the Group are upgrading of process equipment, introducing energy saving technologies, optimising heating energy generation and consumption as well as developing own generation sources, including those using RES.

Our initiatives:

The 2031 Low-Carbon Development Programme has been approved and priority areas for action have been identified.

To improve energy efficiency:

• implementation of the best available techniques (BAT);
• upgrade of boiler and furnace equipment;
• upgrade of process units consuming heat energy;
• upgrade of the mechanical stock;
• implementation of management programmes aimed at optimisation of mechanical stock and pumping equipment with introduction of VFD;
• thermal insulation of main and auxiliary equipment;
• optimisation of transport equipment;
• introduction of automated systems for metering and management of fuel and energy resources;
• establishment of energy management services.

Targeted energy audit of process furnaces and boiler equipment

KMG Group’s production assets (OMG, EMG, MMG and KBM) carried out a process audit of furnaces and boiler equipment. Based on the results of the work, additional actions to reduce the consumption of boiler and furnace fuel will be included in the Action Plans of the audited SDEs for the implementation of KMG’s 2022–2031 Low-Carbon Development Programme.

Result

This year, 8 measures have been implemented to prepare design and estimate documentation, as well as 52 LCDP activities, the estimated annual savings of fuel and energy resources of which amounted to 22,289 tonnes (716.6 thousand tonnes). GJ) (0.6 % of total energy consumption by the end of 2023), which is equivalent to a reduction in emissions by 45,054 tonnes of CO₂.

On 20 December 2023, the Management Board of KMG approved the Regulations on Energy Saving and Energy Efficiency Management in KMG Group. This Regulation is a mechanism for the implementation of KMG’s 2022–2031 Low-Carbon Development Programme and provides a framework for setting and analysing energy targets and energy objectives.

Sustainable Aviation Fuel (SAF) Production

In September 2023, together with Air Astana and with the support of the European Bank for Reconstruction and Development, work began on a feasibility study of the market for sustainable aviation fuel (SAF) and the prospects for production in the Republic of Kazakhstan.

Following a working meeting of the study participants held on 23-24 November 2023, SAF production technologies most promising for Kazakhstan were jointly identified.

The next stages of the study will include a more detailed study of the selected SAF production technologies to determine the feasibility of SAF production for KMG, as well as a study of the regulatory and legal framework of the Republic of Kazakhstan for SAF production. The results of the feasibility study will be presented in the first half of 2024.

7.b. Expand infrastructure and upgrade technology for supplying modern and sustainable energy services

Development of RES projects:

1 GW wind power station with Total Eren;

120 MW hybrid power plant with Eni;

green electricity purchase of at least 15 % by 2031;

10,000 I-REC green certificates were purchased in December 2023 to confirm electricity consumption from RES generation sources.

Result

2031:

15 % – share of RES in KMG’s electricity mix;

implementation of RES projects of at least 300 MW;

hydrogen energy development in Kazakhstan;

100 % coverage of SDEs with energy management services.

For more information, see the Low-Carbon Development Programme section.

8.5. Achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value

KMG provides employment for over 49,000 people, including 81 % men and 19 % women.

8.6. Significantly reduce the proportion of youth not in employment, education or training

KMG Group implements programmes to develop and attract young specialists in production.

Result

Zhas Maman – a programme to attract and develop young specialists at Atyrau Refinery and Pavlodar Oil Chemistry Refinery. From 2022 to 2023, 31 people are studying and working at Atyrau Refinery, 7 of them are employed, and 1 person is employed at Pavlodar Oil Chemistry Refinery.

Dual Training – a programme including training, probation and further employment in KMG Group. Thus, in the period from 2022 to 2023, 4 out of 99 people trained under this programme were employed at Embamunaigas; 17 out of 62 people were employed at Atyrau Refinery; 36 out of 53 people were employed at Pavlodar Oil Chemistry Refinery.

Probationary Employee – a programme started in 3 professions: process plant operator, process pump and compressor operator, instrumentation and control technician. Probationary employees are trained and undergo on-the-job training at Atyrau Refinery. In the period from 2022 to 2023, 60 people are trained under this programme, 29 of them are employed.

8.8. Protect labour rights and promote safe and secure working conditions for all workers

Social support of KMG employees is provided in accordance with collective bargaining agreements and internal instruments of the employer. Collective bargaining agreements are in force in 24 entities of KMG Group. The social package of the entities includes more than 50 types of social benefits; today all terms and conditions of collective bargaining agreements and instruments are fully complied with in all KMG entities.

9.1. Develop quality, reliable, sustainable and resilient infrastructure, including regional and transborder infrastructure, to support economic development and human well-being, with a focus on affordable and equitable access for all

KMG’s Digital Transformation Programme enhances scientific research and improves the technological capabilities of industrial sectors. KMG invests heavily in scientific research and build-up of local potential in this area. The development of domestic technological capacities for industrial diversification will also have a positive impact on the country’s climate.

ABAI Information System Development Project involves centralising all KMG Group production information in a single database on a Big Data platform, as well as processing and analysing it using artificial intelligence and machine learning.

ABAI Information System is 17 autonomous modules, each aimed at solving specific industrial problems.

Result

6 ABAI modules (“Database“, “Map Builder“, “Downhole Pumping Equipment Selection“, “Selection and Analysis of Efficiency of Geological and Technical Activities“, “Process Mode“, “Production Planning and Monitoring“) were implemented.

Achieved effects:

• automated data collection and production report upload function were implemented;
• additional production was obtained due to more efficient process mode at OMG and KGM;
• the number of underground well workovers was reduced due to the reduction of failures of downhole pumping equipment at OMG and MMG;
• efficiency of geological and technical activities at OMG and MMG was increased;
• additional production was obtained due to a more efficient system of formation pressure maintenance at KGM.

9.4. Upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes

The 2031 Low-Carbon Development Programme has been approved, and priority areas for energy efficiency improvement have been identified: optimisation of energy management and establishment of energy management services, introduction of automated systems for metering and management of fuel and energy resources, determination of the applicability of breakthrough projects at the assets of specific subsidiaries and dependent entities, introduction of best available techniques (BAT), update of the mechanical stock, optimisation and update of transport equipment.

Result

2031:

100 % coverage of SDEs with energy management services;

Reduction of energy intensity by 10 % versus 2019.

11.2. By 2030, provide access to safe, affordable, accessible and sustainable transport systems for all, improving road safety, notably by expanding public transport, with special attention to the needs of those in vulnerable situations, women, children, persons with disabilities and older persons

KMG is working on the implementation of additional decarbonisation activities, including the introduction of carbon capture, storage and use technologies (CCUS), the launch of pilot projects on power stations, the implementation of forest climate projects, etc.

In February 2023, the 2060 Low-Carbon Development Strategy of the Republic of Kazakhstan was adopted. One of the promising directions of decarbonisation of the transport sector is the development of electric vehicles. In addition, as part of the Low-Carbon Development Concept of Samruk-Kazyna JSC, all portfolio companies have a goal to gradually switch from petrol to electric vehicles. The Government welcomes all forms of cooperation, including corporate sector initiatives that contribute to the achievement of climate goals, KMG is considering the possibility of implementing a project to develop charging infrastructure for electric vehicles in Kazakhstan.

11.6. By 2030, reduce the adverse per capita environmental impact of cities, including by paying special attention to air quality and municipal and other waste management

Implementation of the best available techniques aimed at step-by-step reduction of negative environmental impact

A number of KMG companies, which are among the 50 major polluters in terms of pollutant emissions in Kazakhstan, intend to develop an environmental efficiency improvement programme in 2024 based on the national sectoral BAT reference books, followed by obtaining a comprehensive environmental permit from the Ministry of Ecology and Natural Resources of the Republic of Kazakhstan.

Development of a programme to reduce pollutant emissions

In order to reduce pollutant emissions, KMG Group plans to develop a programme to reduce pollutant emissions and set targets.

Implementation of the World Bank Initiative “Zero Routine Flaring by 2030”

KMG is a participant of the World Bank’s initiative to completely stop routine flaring of associated petroleum gas by 2030. As part of the above initiative, the Company is guided by the KMG Emissions Management Policy aimed at zero routine flaring by 2030.

Creation of a “green belt“ – greening projects

Atyrau Refinery will plant 10,000 trees over three years as part of the Memorandum of Cooperation on Greening Atyrau City signed between Atyrau Region Akimat and KMG during an environmental conference on 5 June 2023.

Result

• In order to create a favourable living environment for the population and improve the environmental situation, including improvement of atmospheric air quality, the refineries take actions that comply with the indicators of the Green Kazakhstan National Project. Under the Project, emissions are expected to be reduced by 20 % over five years.
• Work is underway to install automated pollutant emission monitoring systems. At present, construction and installation works are underway to install this system in accordance with the Roadmaps.
• In order to create a “green belt“ between Atyrau Region Akimat and Embamunaigas JSC, a Memorandum was signed to carry out landscaping works on a 243 hectare plot in Talkayran Village allocated by Atyrau Region Akimat.
• In 2023, Atyrau Refinery transferred 200 ash trees with closed root system to Atyrau Region Akimat. The trees were planted on the territory of the Retropark. In 2022–2023, EMG planted about 22 thousand seedlings under the Memorandum.

12.5. By 2030, substantially reduce waste generation through prevention, reduction, recycling and reuse

Result

Disposal of historical oil waste: 3.2 million tonnes of oil waste recovered in 2018–2023.

12.6. РEncourage companies, especially large and transnational companies, to adopt sustainable practices and to integrate sustainability information into their reporting cycle

Carbon Disclosure Project

The Company calculates the water footprint and posts a Water Safety Questionnaire on the Carbon Disclosure Project platform.

Green Office

The corporate green direction is being actively developed and green office principles, such as the introduction of separate waste collection, water and energy saving in office premises, are being gradually introduced.

Result

As part of our green office implementation and to reduce plastic and metal waste generation, a recycling kiosk was installed on the ground floor of our office. During the entire period, 18,741 plastic bottles and 3,619 aluminium bottles were handed in using the recycling kiosk in the Izumrudny Kvartal BC.

CDP 2022 Water Safety Questionnaire was published.

13.2. Integrate climate change activities into national policies, strategies and planning

Reducing methane emissions

A Memorandum was concluded with Carbon Limits (a world leader in methane leak management). As part of the Roadmap to the Memorandum, KMG specialists were trained in methane leak management, and a demonstration of the LDAR methane leak detection and repair programme is planned for 2024.

In addition, in order to reduce and mitigate methane emissions, the Company signed a Memorandum of Cooperation with Tetra Tech ES, Inc. implementing the USAID-funded Central Asia Energy Project (PCA).

KMG signed an agreement with Baker Hughes Services Kazakhstan LLP in December 2023 to cooperate on the implementation of low-carbon projects, including the implementation of projects to monitor and repair methane leaks and reduce routine flaring.

Joining OGMP 2.0

The Company joined the UNEP OGMP 2.0 methane initiative, which involves setting its own methane emission reduction target and reporting methane emissions to UNEP.

Joining the Oil and Gas Decarbonisation Charter

The Company joined this Initiative at the Climate Change Conference of Parties (COP-28).

Forest Climate Projects

A 2,000 ha area has been identified in Pavlodar Region and the potential for greenhouse gas uptake is being assessed

RESULT

• The Action Plan to Implement the 2022–2031 Low-Carbon Development Programme has been developed and approved.
• KMG’s pilot project on CO₂ capture, storage and utilisation (CCUS) and determination of injection potential for enhanced oil recovery of depleted oil reservoirs is being developed.
• A benchmark for light oil products is developed.

13.3. Improve education, awareness-raising and human and institutional capacity on climate change mitigation, adaptation, impact reduction and early warning

Concept of Internal Carbon Pricing

In order to implement planning and ensure activities to reduce the carbon footprint of subsidiaries and dependent entities, as well as to fully take into account the impact of carbon regulation on financial and economic indicators, internal carbon pricing mechanisms have been developed. Currently, work is underway to integrate them into the business processes of KMG Group.

CDP

The company Calculates its carbon footprint and posts a Climate Questionnaire on the CDP platform.

According to the Oil and Gas Benchmark ranking from the World Benchmarking Alliance, based on the assessment of low-carbon transition and performance on social indicators, KMG is ranked 37th among 100 key oil and gas companies in the world in 2023, up from 77th place in 2022.

Task Force on Climate-related Financial Disclosures (TCFD)

Climate-related risk disclosure in accordance with recommendations of Task Force on Climate-Related Financial Disclosures (TCFD).

Expanding the coverage of greenhouse gas emissions reporting

In order to improve reporting on greenhouse gases and improve the greenhouse gas emissions management system for KMG Group, work was carried out to inventory indirect greenhouse gas emissions of Scope 3 by 12 categories, and a methodology for collecting information was developed for its subsequent implementation into the Methodology for Monitoring and Reporting of KMG’s Greenhouse Gas Emissions.

Result

A corporate methodology for quantitative assessment of greenhouse gas emissions was introduced.

A methodology for calculating greenhouse gas emissions by Scope is being developed.

15.3.Combat desertification, restore degraded land and soil, including land affected by desertification, drought and floods, and strive to achieve a land degradation-neutral world

KMG implements projects and actions aimed at reducing pollutant discharges and reducing water withdrawal from natural sources.

Carbon Disclosure Project

The Company calculates the water footprint and posts a Water Safety Questionnaire on the CDP platform. A Water Resources Management Programme is being developed for KMG Group.

TAZALYQ

Atyrau Refinery is actively implementing TAZALYQ, a large-scale environmental project, to improve the environment of Atyrau.

Desalination Plants Construction

The desalination plant is a unique project in addressing the issue of water supply in Mangystau Region. The plant will release at least 6.2 mln m³ of Volga water per year for development of the region.

The desalination plant near the Kenderli recreation area in Mangystau Region.The estimated capacity will be 50 thous. m³ of water per day.

Land Restoration

The Company is working on recovery of historical oil waste and clean-up of oil-contaminated lands.

RESULT

TAZALYQ: the Reconstruction of Mechanical Treatment Facilities (closed type MTF) project is nearing completion at Atyrau Refinery. Currently, implementation of the 1st stage of the project has been completed and construction of the 2nd stage of the project is being completed.

The Reconstruction of Regulatory Treated Effluent Canal and Reclamation of Atyrau Refinery Evaporation Fields project is being implemented. The evaporation fields are divided into 4 sectors, which are being rehabilitated in stages. Sectors 1 and 2 are fully drained and rehabilitated. A pipeline was installed in place of the existing open canal, which was used to discharge Atyrau Refinery wastewater to the Atyrau Refinery evaporation fields.

15.5. Take urgent and significant action to reduce the degradation of natural habitats, halt the loss of biodiversity, and protect and prevent the extinction of threatened species

Forest Climate Projects

As part of KMG’s 2031 Low-Carbon Development Programme, it is planned to implement forest climate projects that will have a beneficial effect on the conservation of terrestrial ecosystems.

Hierarchy of Biodiversity Mitigation Activities

The Company applies a hierarchy of biodiversity impact mitigation activities when planning and implementing its operations based on four key actions: prevention, minimisation, restoration and compensation of potential significant direct impacts.

Biodiversity Conservation Programme

Development of a Biodiversity Conservation Programme including targets and timelines related to biodiversity conservation, cooperation with local or international conservation organisations on biodiversity conservation issues.

Result

A 2,000 ha area has been identified in Pavlodar Region and the potential for greenhouse gas uptake is being assessed

17.1. Strengthen domestic resource mobilization, including through international support to developing countries, to improve domestic capacity for tax and other revenue collection

KMG discloses tax information in accordance with the GRI standard and the Country by Country OECD Action 13 initiative.

Payments to States

The Company provides information in the Report on Payments to States on an annual basis for the following types of payments:

• Taxes

All taxes other than mineral extraction tax.

• MET

Mineral extraction tax is a mandatory payment by a subsoil user separately for each type of extracted minerals, oil, underground water and therapeutic mud.

The object of the mineral extraction tax is the physical volume of crude oil, gas condensate and natural gas extracted by a subsoil user during the tax period.

• Subscription Bonus

Subscription bonus is a one-time fixed payment of a subsoil user for acquisition of the subsoil use right in the contractual territory (subsoil plot), as well as in case of expansion of the contractual territory (subsoil plot) in accordance with the procedure determined by the legislation of the Republic of Kazakhstan.

• Other Payments

Other payments comprise all other payments to States, including export customs duty.

RESULT

KMG follows the best international practices in increasing transparency in payments to the state, strengthening the responsibility of extractive companies in matters of revenues from the sector, and raising public awareness of the company’s activities in the regions.

17.17. Encourage and promote effective public, public-private and civil society partnerships, building on the experience and resourcing strategies of partnerships