Sincerely yours,
Giancarlo Ruiu,
KPO General Director


Dear readers,

I am pleased to present to you the 2022 Sustainability Report of Karachaganak Petroleum Operating B.V. Kazakhstan branch. This is the fifteenth report since the first publication.

In 2022, despite the macroeconomic and geopolitical challenges in the world, we achieved relatively good results in our production and marketing targets as well as delivering large and complex projects, such as the 4th Gas Reinjection Compressor and the Turnaround. The Karachaganak Expansion Project (KEP-1) was significantly advanced. In addition, at the beginning of 2023, the evaluation of the Karachaganak Gas Plant project has been initiated. This project may significantly contribute to the KPO 365 Strategy performance.

To our utmost regret, the 2022 safety performance has not been achieved. Thus, KPO LTI rate increased from 0.03 in 2021 (one injury) to 0.22 (seven injuries) in 2022, and TRI rate from 0.09 in 2021 to 0.40 in 2022. We need to learn from this, so that the improvement process brings us the expected value. We therefore thoroughly investigate all incidents to avoid reoccurrence. We further share the lessons learnt with our contractors and other stakeholders, as well as adopt other companies’ experience to improve the safety.

In 2022, we carried out a major Turnaround being one of the largest in Karachaganak history without serious incidents and without causing any environmental damage. All the planned scope of work was performed. At the same time, we completed the production upgrade, as well as improved safety of facilities and reliability of process equipment.

In 2022, we continued developing the KPO 365 Business Strategy. This strategy covers not only the project economy diversification, revenue improvement and cost base management, but also the most topical aspects of the world ESG agenda, such as caring for people and engagement with our stakeholders, HSE issues, transition to “Green KPO”, and achievement of carbon neutrality. The main Strategy focuses can be found further in this report.

In 2022, KPO achieved a world-class gas utilization rate of 99.93 % representing only 0.07 % of flaring. We conduct a full-scale monitoring of environmental components, including air, surface water, subsurface water and soil, as well as monitoring of air emissions and wastewater discharge. A particular achievement in 2022 was the doubling of the use of treated wastewater for technical needs, which significantly reduced water intake from surface sources.

We actively work on introducing “green” technologies including GHG emissions reduction measures and efficient waste management techniques. In addition, we created a unique platform to discuss important environmental issues – Uralsk Green Forum, where over the five years, our specialists, state authorities, eco-volunteers and future generation represented by students, have been actively interacted improving the environmental awareness and culture in the region.

Our environmental and energy management systems have been continuously recognized as effective and compliant with international standards ISO 14001:2015 and ISO 50001:2018. By the end of 2022, KPO has invested nearly $450 million into environmental activities in total.

With regard to the personnel, the Company had also been consistent in implementing personnel training and development programmes. In 2022, local content in staff reached 98 % in professional and technical, and 86 % in managerial positions. At the same time, KPO local content in procurement, goods, works and services is 56.4 % (over US$ 511.7 mln).

In 2022, much work was done to monitor industrial relations and interaction with contractors. We recognize the importance of their operation to ensure the stability of production activities, and constantly cooperate not only with top management, but also with other employees regarding HSE aspects, implementation of the requirements of the new Environmental Code of the Republic of Qazaqstan and respect for the employees’ labour rights.

In terms of social performance, KPO has kept investing into social infrastructure projects, such as construction of schools and sport and health centres in the West Qazaqstan Oblast. A matter of our particular pride was a reward in category “The Best Social Project of the Year” at the National Contest of Social Responsibility of Business – Paryz-2022 that KPO received in November 2022 for the construction of the multifunctional Palace of Culture in Uralsk.

As the largest enterprise in the region, KPO recognizes that its operation affects a wide range of stakeholders and this in turn places a particular responsibility on how we operate our business. Trustful relationships and transparency with stakeholders become key to achieving sustainability goals. Leadership, innovation and cooperation remain our fundamental drives on this path.

Welcome to KPO sustainability highlights and please feel free to revert with your questions and comments. Your feedbacks will be most appreciated and used to make our future reports better.