About the report
Karachaganak Petroleum Operating B.V. Kazakhstan branch (KPO) is an international oil and gas company engaged in oil and gas exploration and production in West Qazaqstan region of the Republic of Qazaqstan. On behalf of its Parent Companies Shell, Eni, Chevron, Lukoil and KazMunayGas, KPO is the operator of the Karachaganak Field, one of the world’s largest oil and gas condensate fields, under the Final Production Sharing Agreement (“FPSA”) signed between them and the Government of Qazaqstan.
KPO has been reporting on its efforts and achievements in sustainable development since 2008, for the past 15 years. In 2009, the company adopted a Sustainability Development Charter, under which it commits to “report to our external stakeholders a full and honest review of performance” in the area of sustainability. The provisions of KPO Sustainability Development Charter meet the widely acknowledged definition of Sustainable Development as “development that meets the needs of the present without compromising the ability of future generations to meet their needs”.
This Report is our fifteenth and the reporting year coincides with the 25th anniversary of the signing of the FPSA at the end of 1997. In this document, we disclose our performance over the reporting period through the prism of three pillars of sustainable development: social, environmental and economic. The report also presents production indicators and development plans, our management and energy transition approaches, as well as social projects, environmental initiatives and economic partnerships, implemented through engagement with stakeholder groups. The future is coming today, and today we feel the results of what we laid down 25 years ago. Compliance with the principles of sustainable development has been and remains our “license” for the further development of Karachaganak, because in addition to subsoil use, we place a fundamental emphasis on contributing to the society development.
Report scope and boundaries
The boundaries of the KPO Sustainability Report relate to all Company operations in the allotment area of the Karachaganak Oil & Gas Condensate Field and export pipeline systems: Karachaganak-Orenburg Transportation System (KOTS) and Karachaganak-Atyrau Transportation System (KATS).
This publication is for the KPO performance in 2022. This document presents both our performance for 2022 and our plans for 2023. In order to demonstrate our sustainability commitments, our performance on material topics is presented in comparison with previous years. Following the established practice and as per the GRI Standards principles, we try to tell both our achievements and issues. In the Contents we have outlines the most material topics from our point of view, which are then disclosed in detail in the chapters of the same name.
The 2021 Sustainability report was issued at the end of June 2022.
The archive of all our issued sustainability reports is available on our website at www.kpo.kz/en/sustainability. In addition, our reports are posted at the Corporate Register web database, one of the largest global online directories for corporate responsibility reports, available at www.corporateregister.com.
Applicable Global Reporting Initiative Standards
This Report and has been prepared in accordance with the requirements of the GRI Standards 2021 and applying the requirements of GRI standards Oil and Gas Sector 2021. In addition, we studied the ESG agenda, which is largely consistent with the requirements of GRI standards.
Our goal is to ensure the appropriate level of transparency and reliability in our sustainability report, as required by the GRI Standards, which we consider as most applicable for us in sustainability reporting.
KPO has been reporting on its sustainable development since 2008.
- From 2008 through 2012, our early publications were prepared in accordance with the GRI Guidelines 3.
- From 2013 through 2016 KPO reports were issued in accordance with the Fourth Guideline of the Global Reporting Initiative (GRI G4). In 2014, KPO was one the first company in Qazaqstan to have applied the requirements of the GRI G4.
- From 2017 to 2022 KPO sustainability reports were issued in accordance with the requirements of the GRI Standards.
Independent assurance
KPO started assuring its Sustainability Report in 2009. Since then, thirteen KPO reports have been assured by auditing companies to verify the reliability of the information disclosed. We believe that the practice of independent assurance enables us to maintain a good level of transparency and truthfulness in our non-financial reports.
When preparing this document in 2023, KPO did not apply to independent experts to verify the data disclosed in the report due to long process of obtaining a contract for independent assurance. We plan to resume the practice of independent assurance of the Report in 2024.
In terms of internal content concurrence, Sustainability Report is approved by the Company’s Directors Committee and at the preparation stage, coordinated with the members of the Sub-committee on Sustainable Development on the part of the operating companies.
In February 2023, Shell organized a joint training on “Business Sustainability and ESG Basics” for its Sustainable Development Sub-committee members as well as, employees involved in sustainability reporting from JVs like KPO.
In addition, KPO’s Sustainability Reporting section employees annually complete GRI certified training and this year also completed a two-month “ESG reporting: Full Course”, held for the first time in Qazaqstan. In November our team members took part in an offline seminar on human rights organized by UNDP in Atyrau. Active participation in such events and training allows us to keep on date and ensure the proper quality of the Sustainability Report.
The soundness of KPO’s sustainability reporting approach has been repeatedly acknowledged in annual competitions and national ratings by «Expert RA Kazakhstan». In 2018, KPO made it to the finals of the Asia Sustainability Reporting Awards 2018 in the categories “Best Environmental Reporting” and “Best Workplace Reporting”. Starting from 2019, KPO is among the top ten non-financial companies in terms of ESG information disclosure in PwC Qazaqstan rating. Also, thanks to the environmental disclosure in the report, KPO is in the top three in the World Wildlife Fund (WWF) Environmental Information Transparency Rating for Oil and Gas Companies in Qazaqstan since 2017.
Business partnerships and associations
We consider our partnership in Qazaqstani associations, such as Kazakhstan Association of Oil Gas and Energy Section ‘KAZENERGY’, Kazakhstan Business Council for Sustainable Development ‘KAPUR’ and International Centre for Development of Oil and Gas Machine Building (IMBC) as strategically important. This gives us an opportunity to network with the industry peers and provides access to the collective lobbying tools such as working groups and committees.
For example, in October 2022, together with the KAZENERGY Association, KPO took part in such events as the Student Digital Fest contest and the launch ceremony of the first educational program “Women’s Leadership in the Energy Industry” at the Atyrau University of Oil and Gas named after S. Utebaev. Also, starting from 2015, KPO annually allocates 500 thousand USD for educational grants under the memorandum of cooperation signed on September 29, 2015 between the Ministry of Energy of the Republic of Qazaqstan, PSA LLP, KPO B.V., NCOC N.V. and the KAZENERGY Association.
In 2020, the International Centre for Development of Oil and Gas Machine Building (IMBC) was established as a part of Action Plan for the RoQ Oil and Gas Machine Building development for 2019–2025, the main focus of which is the procurement of goods manufactured in Qazaqstan for the machine-building industry by major oil and gas projects in Qazaqstan. IMBC conducts its activities on behalf of the three operators – KPO, TCO and NCOC, and closely interacts with the Ministry of Industry and Infrastructure Development, the Ministry of Energy, the PSA LLP Authority and petroleum associations involved in the development of the national oil and gas machinery building. For more details on KPO’s interaction with IMBC, see the Local Content Development chapter.
