KMG Sustainability Report 2018

Ensuring industrial safety and environmental responsibility is the important task for us. The Company’s goodwill, reputation and financial well-being depend on successful solution of this task. Today we focus on transparency of environmental reporting, and thanks to this, for the second year in a row, KMG holds the highest place in the Rating of openness of oil and gas companies of Kazakhstan in the field of environmental responsibility*.

* Environmental responsibility rating for oil and gas companies

Gas utilization growth
  • In 2018, the highest level of APG utilization in the history of the KMG Group of Companies was reached – 93 %. The gas flaring rate is 6 tons per 1,000 tons of produced hydrocarbons, which is almost 50% lower than the IOGP global average. We continue to implement the World Bank Initiative “Complete Cessation of Regular APG Flaring by 2030” and intend to stop the practice of regular APG flaring no later than 2030. OUR
Environmental indicators disclosure

Environment: Businesses should maintain a cautious approach in dealing with environmental problems.
Environment: Businesses should take initiatives to promote greater environmental responsibility.
Environment: Businesses should encourage the development and diffusion of environmentally sound technologies.

HSE Management System

In September 2018, the Guidelines for Health, Safety and Environment Management Systems were approved. This document has changed the approach to managing HSE issues in the Company. The guide was developed based on the best international practices – recommendations of the Association of Oil and Gas Producers (IOGP) and applies to the KMG Group of companies. This system is based on four fundamental principles: Leadership, goal achievement, risk management and continuous improvement.

Also, in KMG, since 2006, the management system in the area of quality, environmental protection, health protection and occupational safety is maintained in accordance with the requirements of ISO 9001, ISO 14001 and OHSAS 18001. Subsidiaries and dependent organizations with a significant level of energy consumption are certified to ISO 50001.


Over the past 4 years, great work has been done in KMG in occupational safety, industrial safety and environment (hereinafter referred to as HSE), while 2018 was the best in terms of safety and health indicators. We have achieved our goal – to enter the top 20 global industry companies in terms of safety by 2020 in terms of the fatal accident rate, and by 2020 the Company expects to enter the top-most injury rate.

The number of injured in accidents, including fatal accidents, decreased to a historic low – 35 % (50 injured in 2018) compared with 2017 (77 injured, respectively). As part of the membership in the International Association of Oil and Gas Producers (IOGP), we submit annual OSH reports and conduct benchmarking with global oil and gas companies.

lost Time Incident Rate (LTIR per 1 million people-hours)
Fatality Accident Rate (FAR per 100 million people-hours)
* IOGP – International Association of Oil & Gas Producers (

УManagement of issues in the area of health protection and work hygiene in KMG and SDEs is carried out in accordance with the requirements of Kazakhstani legislation: the Labor Code, the Health Code, the Sanitary Regulations and Instructions of the Republic of Kazakhstan, International Health protection and Work Hygiene Requirements. In addition, the Company enters into collective agreements with employees, in which special attention is paid to the protection of health and safety at the workplace. All employees of the Company are covered by an annual medical examination, in addition, employees of subsidiaries and affiliates undergo a daily pre-shift and post-shift medical examination.

Number of days of incapacity for work due to diseases of employees of SDEs was 216,203 days in 2018, which is on 8,362 days less than in 2017, or 3.7 %. Number of mortality cases, not related to injuries among SDE employees decreased by 5 cases compared to 2017, or by 19.2 %.

KMG Group of companies takes a set of measures to prevent and monitor cases of detection of occupational diseases at production facilities on a regular basis. The final decision on identification of occupational disease is made according to the results of a number of examinations carried out by the relevant organization: Institute of Public Health and Professional Health of “MUK” NC JSC.

According to the results of medical examinations there were no cases of occupational diseases (acute or chronic) in the KMG Group of companies during the reporting period.

Within the framework of the implementation of the Roadmap on improvement of labor and the environment protection in the KazMunayGas Group – 2020, approved by the decision of the Board on 27.09.2016, corporate health programs are introduced by the KMG, first of all, related to reduction of workers diseases and mortality, not related to injuries.

In 2018, a corporate campaign to improve healthcare of KMG “Prevention of heart attacks and strokes” was developed and implemented, aimed at preventing and reducing mortality among workers associated with cardiovascular diseases. The implementation of the “10 steps to recovery” initiative and the internal regulatory document “Regulations on the organization of emergency medical care in the KMG Group”. The main tasks of these regulations are to establish requirements to provide workers with emergency medical care, to equip first-aid posts and to maintain an emergency medical response plan.

Number of days of incapacity
for work due to diseases
Number of mortality cases
not related to injuries

In order to prevent accidents and incidents at all hazardous production facilities and to reduce the accident rate in 2018, the Company carried out the following activities:

• Systematic control of timely conduction of the survey, repair and replacement of technical devices;

• Strict adherence to technological discipline;

In 2018, two accident occurred at the Company’s production facilities – a gas, oil and water inflow in the oil and gas field, and depressurization of the process pipeline followed by ignition at the oil refinery. The main causes of accidents were a violation of industrial safety rules and unsatisfactory technical condition of the equipment due to its physical deterioration. The amount of losses amounted to 4.860 million tenge, no injuries.

In the occurred accidents, state technical investigation was carried out establishing causes and circumstances, and root causes were identified, corrective measures were developed at the Company’s corporate level with subsequent dissemination of “Lessons learned from Incidents” to all subsidiaries and affiliates.

Emergency preparedness (crisis) situations

Fire Safety

In 2018, the companies of the Group introduced fire safety rating sheets, which are aimed at checking the readiness of non-state fire services to prevent and extinguish fires.

Inspection and evaluation of preparedness for prevention and extinction of fires is carried out in order to determine the readiness of non-state fire services (NSFS), as well as the effectiveness of the fulfillment of contractual obligations in the field of prevention and extinction of fires at the Company’s facilities.

Scheduled inspections for evaluating the readiness of NSFS are carried out by employees of the HSE service, specialists in the field of fire safety of subsidiaries and associates of the company in accordance with plans approved by the heads.

According to the comprehensive analysis of the evaluation data, a number of subsidiaries and affiliates where it is necessary to take urgent corrective actions, such as: ensuring staffing of NSFS staff, building a fire station, the presence and staffing of fire engines in accordance with the regulations, etc., were identified.

Inspections are carried out on in the following areas:

1) availability of NSFS’s permits for implementation of activities in the field of fire safety regarding prevention and extinction of fires;

2) NSFS unit’s staffing with man-power, fire-technical equipment, RPD;

3) presence of a fire station building or specially designed boxes;

4) organization of man-power training;

5) organization of guard service;

6) organization of gas-smoke protection services;

7) organization of operation and maintenance of fire trucks;

8) organization of operation and testing of firetechnical equipment;

9) organization of fire prevention activities;

10) readiness for actions to localize and suppress the fire (based on the results of the test fire-tactical training).

Land Oil Spill Prevention


Energy Consumption

Reducing Energy Consumption*

Energy Intensity

Water Management

Water Footprint

Natural areas of our operations under protection and affected species of flora and fauna

Location and scale of production activities in relation to key biodiversity areas

Site Location Key biodiversity areas (KBA) Location in relation to KBA Contract Area (sq. km) Impact reduction plan
Kansu Karakia district of Mangistau region Kenderli-Kayasansky Reserve Zone and Ustyurt State Reserve Located in a conservation area and located near the reserve 4,374.6 Decided to withdraw from the Project
Samtyr Southeast Mangistau region Kenderli-Kayasansky Reserve Zone and Ustyurt State Reserve Located near the reserve 10,396.9 Exploratory design stage
Urichtau Mugalzhar district of Aktobe region State natural complex reserve of local significance “Kokzhide – Kumzhargan” Includes part of the territory 239.9 Hydrogeological monitoring
Alibekmola and Kozhasay Mugalzhar district of Aktobe region Sands Kokzhide Kokzhide groundwater Located near 156.5 Hydrogeological monitoring
Zhambyl Kazakhstani sector of the Caspian Sea Atyrau district Special environmentally sensitive zone of Kazakhstani sector of the Caspian Sea, Novinsky reserve Located in a conservation area and includes part of the territory 1,935.2 Regular environmental monitoring, restrictions on offshore oil operations
Isatay Central part of Kazakhstani sector of the Caspian Sea, Northern Mangistau region Special environmentally sensitive zone of Kazakhstani sector of the Caspian Sea Located in a conservation area 1,060 Seasonal background environmental studies, Regular environmental monitoring

Offshore oil spill prevention

Climate Change and Air Quality

The Emission Management Policy in the KMG group of companies:

Greenhouse Gas Emissions

For the first time, KMG has developed a Carbon Disclosure Information Project under the Carbon Disclosure Project (CDP), which disclose data on direct and indirect greenhouse gas (GHG) emissions for 2018 for all KMG assets, including international (Romania, Georgia). emissions

Data on GHG emissions for 2018 will be verified and will be available at the CDP site on following link:*

* The Questionnaire will be posted on the CDP platform in mid-2019. To view the Questionnaire, follow the link in the “Search” section and enter the company name in English: “KazMunayGas National Company JCS”. Methodology for calculating greenhouse gas emissions, as well as the disclosures 305-2, 305-3, 305-4, 305-5, were described and posted on the CDP site.

Methane Leak Direct Detection Project

Emissions intensity СО2 in Upstream, ton/1,000 tons


Emissions intensity in Downstream, ton/1,000 tons


Emissions intensity СH4 in Upstream, ton/1,000 tons


Direct greenhouse gas emissions by business area

Air quality

Gross emissions of pollutants into the atmosphere in the KMG Group of companies, thousand tons
2016 2017 2018
Emissions of pollutants into the atmosphere, in total, including: 241.1 256.3 269.3
NOx emissions 12.9 13.8 16.7
SOx emissions 16.9 14.8 13.6
emissions of other pollutants 211.3 227.7 239.1
Specific emissions of pollutants in the KMG Group of companies
2016 2017 2018
Mining of hydrocarbons, t/1,000 TOE of extracted hydrocarbon raw materials 2.14 2.35 1.93
Oil refining, t/1,000 tons of refined oil 3.3 3.3 3.3
Oil transportation, t/1,000 tons of oil transported 0.5 0.5 0.5
Gas transportation, t/1,000 TOE transported gas 1.4 1.2 1.4
SOx emissions per thousand toe of raw hydrocarbon production in 2018
NOx emissions per thousand toe of raw hydrocarbon production in 2018

Beneficial use of crude gas

This section contains information on companies in the “Upstream” business area of the KMG Group.

One of goals in reducing greenhouse gas emissions is to increase the beneficial use and utilization of associated petroleum gas, minimizing flaring. Associated petroleum gas utilization in 2018 is the highest in the entire history – 93 %, gas flaring is at 6 tons per 1,000 tons of produced hydrocarbons (11 in 2017), which is almost 50 % lower than the average IOGP.

This was achieved due to the commissioning of a comprehensive gas processing unit (GPU) at the Prorvinskaya group of fields and a reduction in gas production and combustion in the oil-producing assets of the Aktobe region.

The volume of natural and associated gas production by the main producing companies of the KMG Group in 2018 amounted to 2,873 million m3 (including associated petroleum gas (APG) – 2,049.5 million m3), the volume of crude gas burned was 148.9 million m3. At the end of 2018, a modern gas processing complex was put into operation in the Baiganinsky district of the Aktobe region at the Kozhasai field. The Head of the State opened its work online during a national teleconference dedicated to the Day of Industrialization.

Commissioning of the integrated gas processing unit at the Kozhasai field into full-scale operation will significantly reduce gas flaring from 173 million m3 to 50 million m3, which will have a positive effect on the reduction of pollutant emissions (by 70 %).

In 2015, KMG supported the World Bank’s initiative “Complete utilization of associated petroleum gas by 2030”. On November 20, 2018, working meetings were held with representatives of the World Bank Group to discuss the status of the implementation of the initiative in KMG and possible cooperation to reduce regular burning of crude gas. Reporting on the volume of combustion of crude gas under this Initiative is submitted on an annual basis.

The company does not recycle APG.

Benchmarking of APG flaring rate by industry
The volume of crude gas flaring
2016 2017 2018
Total volume of crude gas flaring, million m3 322.8 315.8 148.9
The beneficial use of APG, % 86 85 93
The intensity of burning of crude gas, t/1,000 produced by raw hydrocarbons 12 11 6

Construction of infrastructure and modern facilities for the utilization of crude gas make it possible to fully develop mining assets and significantly reduce greenhouse gas emissions and pollutants into the atmosphere.

In 2018, the average ratio of gas burned to total hydrocarbon production in oil equivalent for the KMG Group of companies was 6 tons per thousand tons of hydrocarbon production, the average IOGP was 12.1.

Waste Management

Drill mud generation

Onshore projects Offshore projects
Waste drilling mud, thousand tons Drill cuttings, thousand tons Waste drilling mud, thousand tons Drill cuttings, thousand tons
2014 116.50 236.95 0.91 0.88
2015 83.08 200.62 1.14 1.10
2016 44.24 107.13 0 0
2017 49.50 134.28 0.99 1.06
2018 37.05 137.19 1.36 0.81

Transportation of hazardous wastes

KMG does not import/export hazardous wastes outside/within Kazakhstan.

We try to conduct our production activity within the framework of the legislation of the Republic of Kazakhstan and to take appropriate measures to prevent environmental damage.

The Company will continue its work on detection of inconsistencies with the environmental legislation of the Republic of Kazakhstan at production facilities, on identification of problem issues and risks management to take measures on prevention of any inconsistencies with the requirements of the legislation.

For 2018, the environmental protection Group of KMG companies was charged with administrative fines, damages and tax payments for excess emissions in the amount of KZT 85.6 billion, of which the Company recognized and actually paid KZT 9.7 billion, contested in court 55.9 billion tenge. The remaining claims are disputed by the Company in court as unlawful.

One of the extractive companies was imposed an administrative penalty for disposing of production waste at landfills without permits for emissions into the environment for periods amounting to KZT 55.9 billion. KMG was able to prove the illegality of the claim and in January 2019, by decision of the judicial division in civil cases, it was decided to cancel the administrative fines and tax payments and terminate the proceedings.

Environmental Fines 2014–2018, bln tenge

Another company for burning sour gas without a permit in the flare of the Complex Gas Treatment Facility imposed penalties of KZT 29.7 billion, including administrative fines, damages for environmental pollution and tax payments for excessive gas flaring. The reason for the excess of the acid gas combustion rate was the delayed launch of the LO-CAT desulfurization system at the CGTP. The desulfurization system began to work at the end of 2018, and the flaring of sour gas at the flare was immediately stopped. Of the amount claimed, in 2018 KZT 9.2 billion was actually paid. For the remaining amount, litigation is ongoing.

In 2018, non-financial sanctions were also applied to one of the Company’s oil refineries, namely, such requirements were set as: to adjust the design of permissible discharges, comply with established standards for the concentration of pollutants in wastewater, take the necessary measures to improve the efficiency of treatment facilities, develop plan for the modernization of treatment facilities. The Company carried out work on all of the above items.