About this Report

Our mission

Mission of the Karachaganak Petroleum Operating B.V. (further as KPO) is to develop the Karachaganak Field in an environmentally and economically sound manner while simultaneously creating the socio-economic development opportunities for local communities.

To support the achievement of our mission, we continue embedding sustainable development thinking into the way we do business. This means that in all our activities we shall:

• look to minimise impacts and maximise opportunities linked with its presence;
• consider the consequences of our decisions in the long-term;
• engage our stakeholders in a constructive dialogue;
• incorporate strong governance and transparency.

Report scope and boundaries

The boundaries of the KPO Sustainability Report relate to all Company operations in the area of the Karachaganak Oil & Gas Condensate Field and export pipeline systems: Karachaganak-Orenburg Transportation System (KOTS) and Karachaganak-Atyrau Transportation System (KATS).

The Sustainability Report is for the 2020 calendar year. This document presents an overview of our performance in 2020 and plans for the following 2021 year. In order to demonstrate our sustainability commitments, the data disclosed in the Report is presented in comparison with previous years. Our material topics are reflected in the Contents of the Report and listed in the relevant chapter. Following the established practice, we disclose both our achievements and issues. This Report has been endorsed by the KPO Directors` Committee and reviewed by the Operators’ Sustainability Sub-Committee.

Our previous Sustainability Report for 2019 was issued in September 2020. The archive of all our issued sustainability reports is available on our website at www.kpo.kz/en/sustainability. Besides, our reports are posted on the GRI website www.globalreporting.org and at the Corporate Register web database, one of the largest global online directories for corporate responsibility reports, available at www.corporateregister.com.

On behalf of its shareholders, KPO is an Operator of the Karachaganak Oil & Gas Condensate Field and was incorporated in the Netherlands in 1998 as a branch in Qazaqstan. Currently, the KPO is owned by Shell (29.25 %), Eni (29.25 %), Chevron (18 %), Lukoil (13.5 %) and NC KazMunayGas (10 %). KPO acts in accordance with the Final Production Sharing Agreement (FPSA) signed between the shareholders and the Government of the Republic of Qazaqstan. 

Funding for the Branch is provided by the shareholders, and all capital assets constructed or purchased by KPO are not depreciated, depleted or amortized given the retained right to use the assets by the shareholders as per the FPSA. The FPSA does not foresee capitalisation in terms of debt and equity. Accordingly, no sales and results are recorded in the financial statements of KPO. Revenues from the KPO activities are shared between the Government of the Republic of Qazaqstan and the shareholders, who solely report about their financial accounts, including revenues, net sales, capitalisation, etc. in their own financial reports.   

Applicable Global Reporting Initiative Standards

Our goal is to ensure the appropriate level of transparency and reliability in our sustainability report, as required by the GRI Standards.

This Report has been prepared in accordance with the requirements of the GRI Standards in the ‘Core’ option, and provides disclosure of a number of indicators related to our most significant material topics. We also apply some of the GRI G4 Oil & Gas Sector Disclosures in the Report.

KPO has been reporting on its sustainable development since 2009. Earlier publications were prepared in accordance with the GRI Guidelines 3. In the period from 2013 through 2016, KPO reports were issued in accordance with the Fourth Guideline of the Global Reporting Initiative (GRI G4), meanwhile KPO was one the first companies in Qazaqstan to have applied the requirements of the GRI G4. The publications for 2017, 2018 and 2019 were issued in accordance with the requirements of the GRI Standards.

Independent assurance

KPO applied to Ernst & Young (EY) for independent assurance of the 10 selected disclosures in this Report according to international GRI Standards in the ‘Core’ option. EY assurance letter of selected disclosures is presented in the body of the Report at this link.