Employment practices

HR Policy

Attracting and retaining qualified and talented professionals is one of the priorities required for successful business.

KPO strives to ensure competitive labour market conditions among oil companies in Qazaqstan, to attract high-potential candidates and reduces the risk of staff turnover. Another important factor for the KPO attractiveness as an employer is due performance of duties undertaken by the Company and respect for the employees’ labour rights.

At KPO, we offer equal opportunities to everyone and treat everyone equally and not discriminate in any way based on race, colour, religion, age, gender, sexual orientation, gender identity, marital status, disability, ethnic origin or nationality. This helps us ensure we always draw on the widest possible talent pool and attract the very best people. All employment decisions, including hiring, evaluation, promotion, training, development, discipline, compensation and termination, are based solely on objective factors, including merit, qualifications, performance and business considerations.

The strategic approach of KPO HR to the process of local content increase involves both replacing expatriate personnel with national staff and implementation of the local staff professional training and development. This ensures that all operations are carried out competently, with high quality and in compliance with international standards. This approach contributes to the replacement of foreign personnel with minimum risks for production activities, and the achievement of the set goals with the highest quality. To this end, KPO develops the Annual Training Plan, which is implemented taking into account the individual needs of each employee.

Provision of training programmes allows the Company:

• to fulfil the requirements of the FPSA Annex 7 related to the training, re-training and professional development for Qazaqstani employees consistent with International Good Oil Field Practices, as well as HSE and industrial hygiene requirements.
• to deliver programmes that enable for the local content increase in staff and supply the organization with skilled, qualified and competent workforce.
• to undertake training activities related to operational requirements and personnel professional development in order to achieve production and exploration targets.
• to deliver specific and mandatory HSE certified training programmes for the Company’s personnel, required by RoQ legislation, the Company’s internal procedures and best international practices.

During the year, the Company holds various events that allow employees to give feedback to management and the HR department. These include the annual Employee Opinion Survey, the HR Open Day, the annual KPO Townhall and occasional coffee break meetings with directors. Feedback is also collected in the process of personal conversations with line managers and through the Hotline available 24 hours. After the feedback analysis, the HR department publishes answers to the most pressing questions on the intranet, and also looks for solutions to optimize the identified problems.

Personnel statistics

As of end 2021, the total number of KPO personnel made up 4,053 people with 3,782 of them being RoQ citizens and 271 other countries citizens.

The graph 8 shows the ratio of personnel, taking into account the specifics of labour relations, to the total headcount of the Company at the end of the reporting period, broken down by years.

KPO employees (direct contract) – employees with effective Employment Contracts with KPO.

Parent Companies secondees – Parent Companies’ employees seconded to KPO on the basis of the Secondment Agreement. They mainly include senior managers and foreign specialists with specific skills in engineering and design, and international experience and knowledge necessary to ensure the introduction of international technologies in production. The expatriate personnel are attracted to share best international practice and knowledge in different spheres with national employees. However, KPO annually nationalizes the positions held by expatriate specialists in accordance with the Programme for Local Content Increase in Staff
(for more details, see the chapter “Development of national personnel”). The KPO Board of Directors consists of seconded employees of the Parent Companies, except for the Vice General Director and the Digitalization and Continuous Improvement manager.

Sending party – Legal entity registered in accordance with the procedure established by the legislation of the Republic of Qazaqstan, providing manpower services, including a branch of the foreign legal entity.

Sending parties’ employees – Staff providing services under KPO day-to-day supervision who have no direct contractual relationship with KPO but are employed and paid by an external company (manpower agency). The types of work performed by direct contract employees and sending parties’ employees are identical.

Temporary employee – a person who has an employment relationship with the Company for limited time to replace a temporarily absent directly hired employee, who is on long-time leave, such as maternity, unpaid and child care leave, educational leave etc., or hired while doing a specific job. As of end 2022, the number of temporary employees totalled 104.

Graph 9 shows the ratio of personnel by gender. In 2022, 2,936 men and 1,117 women worked at KPO.

The map shows the percentage distribution of the Company’s personnel in the regions of Qazaqstan. In 2022, compared to the previous 2021, there is a slight increase in the share of personnel in Uralsk, from 6.4 % to 8.4 %, as well as a decrease in the share of personnel working in Aksai, from 91.4 % to 89.6 %. This change is associated to a greater extent with the transfer of jobs from Aksai to Uralsk for some of the administrative personnel who are not involved in production.

Graph 10. Employees turnover by age, 2022 (KPO and sending parties)

Graph 11. Employees turnover by gender, 2022 (KPO and sending parties)

Graph 12. Dynamics of employees’ turnover, 2018–2022

Employee relations

Engagement with trade unions

Collective bargaining is essential in the Company. Trade unions play a key role in supporting and protecting employees’ rights. Trade unions develop draft Collective Agreements addressing various aspects of social and labour relations and bargain with the Company to improve working conditions of the employees. Four Trade Unions represent the interests of KPO employees:

• Public Association “Local Trade Union of Karachaganak Petroleum Operating B.V. employees”,
• Public Association “Karachaganak Local Professional Union of KPO employees and contractors”,
• Public Association “TRUST” Local Trade Union of Karachaganak Petroleum Operating B.V. employees and contractor companies”,
• Public Association “Burlin Local Trade Union of Oil and Gas Workers”.

Provisions of the Collective Agreement are applied to all KPO employees regardless of their membership in the Trade Unions.

Trade unions play a key role in supporting and protecting employees’ rights.

Under the terms of the New Collective Agreement for 2022–2024, a number of new social payments and benefits were increased and introduced, such as the provision of advance payments, social assistance to families of employees raising disabled children, assistance to families of employees raising three or more children of school age, including children of 18 years old, the percentage of payment for combining duties has been increased in the amount of at least 10 % of the monthly base salary. In addition, a number of benefits were agreed for veterans who retired from the Karachaganakgazprom JSC or the Company, including an increase in the amount of bonuses for the Oil and Gas Complex Workers Day.

The Collective Agreement provides for the Trade Unions to carry out socially-oriented, cultural, mass and physical education work. In 2022, various sports events were held, including billiards, table tennis competitions, a running tournament, a basketball and football cup, in addition, trade union leaders took an active part in organizing city clean-up days.

Grievance mechanisms

The Company has a few grievance mechanisms: applications to HR and Services Directorate either directly or through Trade Union, and via the anonymous Hotline.

In 2022, HR received 97 applications, including grievances. The received grievances addressed such issues as labour misconduct, employment, conflict resolution, abuse of power, misconduct with contractor employees. All received grievances were reviewed and resolved, including in the pre-trial procedure and at the stage before the cases’ consideration in the Conciliation Commission.

Voluntary Dissolution of Employment Relationship

The Company supports the application of the Voluntary Dissolution of Employment Relationship Programme as part of the Collective Agreement and pursuant to the RoQ Labour Code dated 2017 (Art. 52). The programme applies to men aged 58-63 and women aged 55.5 – 60.5. In 2022, 42 KPO employees applied for the voluntary dissolution of employment relations (43 employees in 2021, 43 employees in 2020, 42 employees in 2019, 24 employees in 2018 and 45 employees in 2017).

In 2022, the Programme for Voluntary Dissolution of Employment Relations on a nonrecurring basis wasn’t applied.

Compensation and benefits

The success of any business largely depends on the team qualifications, skills and motivation of employees, therefore KPO’s HR policy is aimed at strengthening the leading position in the market and achieving strategic goals through the creation and development of a professional team, as well as encouragement of efficient performance of work.

In order to ensure the employee right to pay as per qualifications, complexity of work, quantity and quality of work performed, as well as working conditions, KPO applies the following tools:

• The remuneration system based on a consistent approach in setting wages;
• The job evaluation process system for effective organizational structure management, as well as to ensure the validity of remuneration;
• Annual Performance and Development Review Procedure;
• Wide range of additional benefits ensuring fair work conditions.

To arrange and apply all the listed tools KPO Reward and Organization department develops the KPO Remuneration, Allowances and Benefits Policy for Qazaqstan Employees. Independent consulting group can be involved for its development if required. In 2022, it was not necessary to involve them.

This Policy is annually approved by Joint Operating Committee (JOC)⁹. There is no Voting during the Policy approval. If even one of the parties does not agree with any provision of the Policy the document is vetoed and being returned for further revision.

According to Art. 5 of Appendix 7 of the FPSA, the Policy is focused on commensurability and competitiveness of remuneration, allowances and benefits for national staff in comparison with appropriate remuneration, allowances and benefits of Qazaqstan oil and gas sector and used as a tool for attraction, retention and encouragement of national staff.

The assurance of the remuneration process is ascertained by KPO internal audit and Parent Companies' audit achieving a positive opinion in 2022¹⁰.

According to the Remuneration Policy for Qazaqstan Employees, a base salary for national staff is established based on the assigned personal grade, which in turn has special range. Grade is one of the classes identifying relative importance of the certain job position and its levels at company positions hierarchy. Grades are assigned to all employees including Top Management.

KPO Top Management except Deputy General Director and Digitalization and Continuous Improvement Manager are Parent Companies secondees. Their remuneration is set and paid by the Parent Companies. The terms of remuneration and benefits for directors working under KPO direct contract and other corporate employees are the same.

Tab. 18. The annual total compensation ratio for the organization’s highest-paid individual to the median annual total compensation for all direct employees, 2020–2022

KPO also takes into account the remuneration rate at the RoQ oil and gas market and performs annual review, as a result the necessity to correct the remuneration rate for the certain positions can be identified. According to the annual review in 2022, the average salary in KPO was higher than an average salary in the West Qazaqstan Oblast (WQO). As a result of this analysis, no additional salary adjustment was proposed in 2022. The minimum salary of specialists recruited by KPO is provided in the Collective Agreement and set regardless of an employee gender. Salary for KPO employees as well as for sending parties’ employees (from recruitment agencies) is set based on the single labour remuneration structure used in KPO indicating that there is no difference in the level of minimum salary for both categories of employees.

In 2022, the Company participated in the salary review conducted by Willis Towers Watson and additionally in the review conducted by Ernst & Young. As the result of these reviews, the decisions will be made regarding employees Attracting and Retaining Policy for 2023.

Pursuant to the existing procedures, every year KPO offers an upgrade on the employees’ remuneration, including indexation of the monthly basic salary increase not lower than official inflation rate in the RoQ at the beginning of the year, annual performance review bonus for those, who received positive ratings based on annual performance, and also individual pay rises and additional lump sum payments.

In January 2022, an 8.4 % general salary increase was made reflecting the inflation level for the previous year, and additionally 5 % to the general increase under the terms of new Collective Agreement concluded for 2022–2024. In August 2022, a 7.5 % general salary increase was made as exceptional measure aimed at support of Company’s employees due to detrimental effect of the accelerated inflation.

All KPO direct employees are provided with a package of benefits, which includes monetary and non-monetary benefits. The most of the benefits are provided for by the Collective Agreement. Under the terms of the Collective Agreement for 2022–2024, KPO pays bonuses on Oil & Gas Worker’s Day, FPSA anniversary as well as financial allowance for health resumption. Benefit amount also depends on individual employee grade. For the sending parties’ employees (from recruitment agencies), the relevant employers’ collective agreements are applied.

KPO respects the right of its employees to retain their positions. Following the RoQ Labour Code, an employee has the right for an unpaid leave to attend to a child up to the age of three years. In the 2022 reporting year, 45 % of employees, who took parental leave, returned to work in the reporting period, with a 94 % retention rate. The remaining 55 % of employees took a child-care leave for more than one year.

Graph 13 shows the number of employees, who took a parental leave and a leave to attend to a child up to the three years age, and of those, who returned to work after parental leave ended, by gender, in 2022.

Graph 13. Parental and child care leaves at KPO for 2022

In accordance with the Collective agreement KPO grants to employees the right for paid educational leave (14 days per year) to pass examinations at the external study mode. 28 employees exercised this right in 2022.

Performance and Development Review

Performance and Development Review (PDR) is one of the tools of feedback aimed at monitoring and enhancing work efficiency. The PDR process covers Qazaqstani employees who have an employment agreement with KPO for no less than half a year.

At the beginning of the year line managers brings to subordinates expectations regarding work performance, behaviour and HSE compliance as well as annual targets. The targets should be focused on fulfilment of company tasks as well as gradual development and performance improvement of employees.

For employees holding managerial positions, whose goals are identified as Key Performance Indicators, assessment is taken in two stages: assessment of achievements in accordance with KPI for this position and assessment of individual performance of work.

During PDR process the unified rating scale is used this scale distribution includes “Strong”, “Fully Effective” and “Needs Improvement”.

PDR bonus is identified and approved on an annual basis.

Development of national personnel

Development of national personnel is a continuous process in KPO. Professional competency is maintained and developed through the training and skill improvement system.

In 2020, in conjunction with the Authority KPO approved the 2020–2025 Programme for Increase of Local Content in Staff. The outcomes of the previous programme were also taken into account while developing the new one.

In 2022, 11 positions previously held by expatriate personnel were nationalised, 17 positions were abolished. Local employees made up 95 % of the total Company’s staff as of December 2022. In total, 257 expatriate specialists were replaced with national employees, and 301 positions held by expatriate employees were abolished in the period of 1999 – 2021. The breakdown by categories is presented in table 19.

Additionally, in accordance with the goals set in this Programme, KPO keeps tracking the local content in contractor personnel registered in the West Qazaqstan Oblast. In 2022, 40 companies provided their quarterly, biannual and annual Local Content in Staff reports. The local content in staff within these organizations made up to 91 % in the category ‘Department / Unit Management’ and 98 % in the category ‘Professional staff / Qualified workers’.

Tab. 19. Increase of Local Content in KPO staff by categories of employees

Graph 14 presents the total number of expatriate and local senior and mid-level management of the Company split by age and gender. This includes KPO core structure and temporary projects.

KPO Female Network

Advancement of women leadership is nowadays of great relevance worldwide. Having women at managerial roles is a key factor of commercial efficiency and economic viability of business. Gender-balanced companies are more attractive to the employees and achieve better results.

KPO Female Network was launched in May, 2019 as a platform where women could share knowledge, provide mutual support and strengthen their connections. Since its’ foundation, KPO Female Network has successfully run a number of sessions to engage KPO women, drive active participation, encourage young people to contribute and experienced personnel to share their success stories.

Network mission is to advance the vision “Women Support Women”.

Network goal is to create a positive culture of mutual support among female employees of KPO. We want our Company to be a safe and friendly working en​vironment, where all women can achieve their full potential and reach any heights that match their talents and ambitions.

KPO Female Network supports and applies the best practices of oil and gas and energy companies for supporting working women, utilizes international practices for expanding women rights and opportunities in the industry, develops various programs and activities aimed at assisting women in moving up the career ladder and increasing the number of women at superior roles. Presently, the number of women at managerial roles remains low.

With the view to promote Women Leadership, the following activities are planned:

• Program of mentorship, education, open dialogue on the importance of escaping from stereotypes,
• Women professional growth,
• Arrangement and attending of training workshops,
• Exchange of experiences with national and international companies,
• Holding of round tables with top management,
• Self-development and motivation training courses.

Being a member of KAZENERGY Association, KPO actively supports implemented programs and initiatives, participates in collaboration with the European Bank of Reconstruction & Development  in the development of informational- analytical review “Role of women in RoQ energy sector” to determine the input and role of women in the development oil and gas and energy sectors of the country.

Enhanced development programme

In order to ensure the continuity of workforce planning and increase local content in staff, KPO implements the Enhanced Development Programme.

The Programme aimed at creating and maintaining the necessary talent pool to meet the Company’s business needs. The stages of the Programme implementation include the selection of talented employees, identifying their strengths and weaknesses, developing and implementing individual development programs, and as a result appointing them to planned positions.

The first and second intakes of the Program were held in the period from 2009 to 2014.

The third intake of the Programme continued in the period 2017–2020. The total number of participants in the third training intake was 161 people. By the end of the programme of third intake, 56 % of the participants attained the roles as planned; and their individual development plans were completed by 77 %.

In the second half of 2021, KPO launched the fourth intake of the Talent Pool Enhanced Development Programme for the period of 2021–2024. Based on the plan to increase local content in staff, the departments’ heads nominated high-potential employees for further participation in the selection stages of the Programme. The selection consisted of three stages, after which two categories of program participants were identified: employees with high potential in managerial skills, and employees obtained high score in the ‘Analysis’ and ‘Planning’ skills.

Of the 79 candidates, 52 employees successfully passed the fourth intake of the Enhanced Development Programme for the Talent Pool.

2022–2024 will be dedicated to the implementation of the learning and development processes of program participants in accordance with their Individual Professional Development Plans.

Competence management system

Competence management system is applied at KPO as one of the most efficient methods for assessing the competency level of personnel.

The system is aimed at achieving the required level of competency among technical staff, who work at hazardous industrial facilities, and at reducing and preventing potential incidents and accidents caused by lack of competency. Given the results of conducted competency assessments, the system enables developing tools for further training of personnel and ensuring funds are spent as intended, as well as raising HSE cultural awareness among employees.

According to the Competency Management System (CMS) policy, any contractor with a high or middle risk level of the contract that work on Company sites or equipment shall develop and operate its own Competency Management System. The contractors’ personnel, responsible for the control and execution of high-risk works, shall have the ability to demonstrate knowledge and practical skills to work safely, technically sound and within the defined boundaries of responsibility. KPO has started working on this with contractors since 2019. The key requirements and rollout stages are identified during the HSE contractorsэ audits.

KPO CMS was certified by Offshore Petroleum Industry Training Organization (OPITO) in 2013. Once every three years, Company undergoes accreditation of the system requiring that compliance audits be conducted annually engaging OPITO experts. In November 2022, KPO confirmed the competency management system accreditation till November 2023.

The scope of OPITO’s accreditation includes:

• Six profession-oriented specialties: production operators, electrical technicians, instrument technicians, mechanical technicians, lead technicians and supervisors in production sector.
• Six production units and departments, including KPC, Unit 3, Unit 2, Eco Centre, Maintenance and Gathering departments.

In 2022, 739 employees with technical qualification completed initial assessment and received CMS certificates. KPO has reached 73 % of the competency compliance required for technical personnel.

In line with the Competency Management System Expansion Plan 202-2024, the Competency Accreditation Programme for Industrial Supervisors working at KPC Chemical Laboratory was completed in 4th Quarter 2022 and was launched in the Field Facilities Modifications Department. Competency Assessment under 24 approved standards is carried out for over 150 supervisors. In order to obtain unbiased assessment results, superintendents take on the role of technical experts. Detailed information on the Competency Assessment for Industrial Supervisors is provided on a monthly basis to the management of the field and the production directorate.

One of the areas to improve the effectiveness of the current KPO Competence Management System was the implementation of a Front-line barrier management "FLBM" project to protect personnel and equipment at Unit 3.

Since 2020, the 360° Assessment project functions as a part of the Competency Management System. Such assessment is a tool to devise an employee’s personal development plan and to assure more effective communication between an employee and a line manager using feedback. KPO SAP system module enabling all participants to be assessed online has been developed. The process is supervised by internal Competency Management and Personnel Assessment experts.

Personnel training and development

Personnel training

Every year, KPO conducts training programs aimed to achieve the following objectives:

• To enhance the individual job-related competencies of employees, and address operational and career development needs.
• To teach mandatory skills required to perform the job at hazardous production facilities. The training obligations are subject to the RoQ legislation and the Company procedures.

In 2022, 90 % of the Company’s local employees were trained or engaged in various professional development programmes, professional training and retraining, and took part in online seminars and conferences.

Besides, in 2022, KPO continued conducting training for employees on the specialized international programmes (see table 20), language skills, and professional and mandatory HSE courses.

Tab. 20. KPO personnel trained on the International Qualification certified programmes in 2019 – 2022

Training statistics

As responsible organization, KPO ensures annual mandatory HSE training both for its own staff and personnel of its contractor organizations.

In 2022, 576,599 hours of training (405,221 hours in 2021) were held, of which 294,951 were provided to KPO employees (250,581 in 2021). The remaining 281,648 hours (154,640 hours in 2021) were spent on the HSE mandatory courses for the contractor organizations’ employees.

Totally, in 2022 26,282 people were trained, 3,286 of them – KPO employees and 22,996 – contractor personnel. Average training hours are given in graph 15.

Graph 15. Average number of training hours per one training course passed by nominated KPO employees in 2022, by type, by gender

Training arranged for KPO employees in 2022 by categories is shown in Table 21.

Tab. 21. Training of employees by categories, 2019–2021

KPO scholarship programme and partnership with universities

People is the most important value for our Company. KPO continues enhancing its employees’ qualification and attracting young professionals through cooperation with universities.

Scholarship programmes 

KPO Scholarship Programme is one of the constituent incentives for professional development and further education of employees and their children.

In 2022, within this programme KPO allocated 19.8 KZT mln (equivalent to US$ 42,270) to sponsor scholarships for nine KPO employees and 27 children of employees.

Graph 16. Dynamics of engagement in the KPO Scholarship Programme, 2012–2022

KPO partnership with Qazaqstani universities

KPO cooperates with 33 educational institutions in Qazaqstan, contributing to the training of professional personnel for the oil and gas industry of the Republic of Qazaqstan. Internship in the international company prepares students for real work, introduces them to the main business approaches at the world standards level. Also, through a special connection of educational institution’s theoretical training and theoretical material practical consolidation at the enterprise, it allows achieving the necessary competence for students, reducing the gap between theory and practice, preparing students receiving specialties to perform their professional activities. It also allows students to make more informed decisions about their future careers. Work with universities is carried out through the Student Placement Programme on the basis of respective bilateral agreements.

In 2022, 212 students from 16 educational institutions had practical and pre-graduate internship for 15 specialities in various departments of the Company. From 2013 to 2022, the Company employed 194 people out of those, who had passed the student placement.

Graph 17. Number of students completed internship at KPO, 2016–2022

Graduates Development Programme 

The key task of the University Graduates Development Programme is to create a pool of high potential personnel among local the graduates of the Qazaqstani universities to ensure safe operations of the Karachaganak Field facilities.

Since 2008, as part of dual education, KPO has been implementing the Professional Development Programme for Production Operators, Mechanical Technicians, Electrical Technicians and Instrument Technicians based on the international standard of the Offshore Petroleum Industry Training Organization (ОPIТО).

Once selected, candidates are trained according to international standards gaining both theoretical and practical knowledge. Upon a successful completion of the programme, interns are hired by the Company and start their careers at the production units.

The value of this training programme lies in the methodology provided in a block-module format. This approach allows developing a set of competencies, which focus on the ability to address production issues in workplace.

The University Graduates Development Programme has been successfully implemented at KPO for 15 years at the time of issuing this Report. Over 516 production Operators and Mechanical Technicians have been trained under this program and are now productively working at the company’s production facilities.

In May 2022, 45 trainees of the 2021 enrolment completed the theoretical module on specialities of Production Operator, Instrument Technician and were assigned to pass internship in KPO Production and Maintenance department. In September and October 2022, 24 trainees were hired by the production and maintenance department.

In May 23rd 2022, the Company completed the process of the next trainees’ enrolment to participate in this programme in the specialties «Electrical Technician» and «Instrument Technician». As a result of the selection, a group of 24 people was formed, recent graduates of higher and secondary specialized educational institutions of the Republic of Qazaqstan.

In October 2022, a new group was launched in the specialty “Production Operator” in the amount of 21 people. Theoretical training on the program will last for 10 months, after which the trainees will be sent for practical training in the Company’s production and maintenance department.