AKSAI, West Kazakhstan Oblast, 12 August, 2016 - Karachaganak Petroleum Operating B.V. (KPO) has announced half year performance results.
KPO General Director, Renato Maroli, said: “As of today, KPO Partners have invested approximately $21.4 billion into developing one of the world's most geologically complicated fields, whilst direct payments to the RoK budget have totalled $13.8 billion”.
Over the first half of 2016, KPO has produced 66.9 million barrels of oil equivalent in the form of stable and unstable liquids, gas and fuel gas. In addition, 3.52 billion cubic metres of sour dry gas were re-injected to maintain the reservoir pressure, a volume equivalent to approximately 42.4% of the total gas produced.
"Success of Karachaganak project was made possible through established partnership and fruitful cooperation between the Government of the Republic of Kazakhstan, WKO Authorities of the WKO, PSA Authority, local community and KPO partner companies", said Renato Maroli.
"As a socially responsible company, KPO makes every possible effort to ensure sustainable development and effective use of Karachaganak’s resources in order to maximize social and economic benefits of the Project for the Republic of Kazakhstan and the local community", added Renato Maroli.
KPO is focusing efforts to ensure environmental protection, reduction of greenhouse gas emissions, preservation of natural resources and application of the best available technologies. Over the first half of 2016 KPO has achieved a world-class gas utilisation rate of 99.81%.
Since assuming the operatorship of the Karachaganak field, KPO has invested nearly $315 million into a vast number of environmental protection activities.
Recently an energy audit by an independent third party was conducted at all KPO facilities. KPO has become one of the first companies in the oil and gas sector in the Republic of Kazakhstan to receive an energy audit.
The results of the energy audit identified specific consumption of fuel and energy resources by KPO as equal to 2.4% of production, in comparison to world industry figure which ranges from 2 to 6%, which positions KPO as an energy-efficient complex in the oil and gas industry.
Currently, KPO continues to work on Karachaganak Expansion Project – Phase 1 (KEP1). The KEP1 Local Content strategy is focused on the localization of goods, works and services. This project will drive the creation of new jobs and skills development. In addition, it will contribute to long-term development of the local supply chain coupled with the transfer of technologies through establishment of joint ventures between interested local and international companies.
Over the first half of 2016 KPO has also continued implementation of a number of initiatives aimed at increasing the local content. This work was done in cooperation with other major international oil and gas companies, as well as local and foreign service and engineering companies.
According to Renato Maroli, "successful implementation of these initiatives will create the environment for the development of production of more complex high-tech products in the Republic of Kazakhstan, capable of ensuring long-term orders for Kazakhstan companies and joint ventures.”
“KPO and the Karachaganak Partners take very seriously and support the RoK Government’s plans such as Kazakhstan-2050 Development Programme and the Industrial Innovative Development programme, and actively participates in Local Content development via realisation of: Aktau Declaration, MoU on national industrial development signed among KPO, PSA Authority and KAZENERGY Association, Cooperation with regional Akimats, KPO internal Local Content Development Plan and activities”, added Renato Maroli.
During the past six months KPO held a series of meetings with industrial companies in various regions of the Republic, where the company provided information on its needs for products and services, requirements for pre-qualification of suppliers and prospects for interregional cooperation.
According to the half year results, the proportion of local content in KPO contracts for the supply of goods, works and services reached 49.66% which correspond to nearly $279 million in monetary terms. On the whole, since signing the FPSA in 1997, the share of local content in KPO procurement exceeded $5.7 billion.
As the largest employer in the WKO region, KPO provides a major contribution in terms of provision of long-term local jobs with competitive salaries. KPO currently employs 3,708 local specialists. By mid-2016 the local KPO manpower reached 96% of engineering and professional positions and 78% of all managerial positions.
KPO has recently announced the opening of a new office in the city of Uralsk. As noted by Renato Maroli, "this new office will improve interaction with Local Authorities and will enable KPO to promptly address issues relating to social and economic development of the Region".
KPO annually implements a high number of large-scale projects aimed at development of social infrastructure in the West Kazakhstan Region. Every year KPO allocates $20 million for the implementation of social and infrastructure projects. Additonally, during 2014-2016, an amount of $10 million per year was allocated for the implementation of similar projects in Burlin district of WKO. To date, the overall volume of KPO investments directed for this purpose has exceeded $300 million.
During the first six months of 2016 KPO has continued implementation of the 2nd Phase of the Resettlement Project for Berezovka and Bestau villages. Currently, two apartment buildings are being built in micro district Karachaganak-1 as well as 100 houses with plots of land and outbuildings in micro district Araltal in Aksai. The new housing will have all the necessary utilities including gas, electricity and water. In addition, a new road and kindergarten will be built in micro district Karachaganak-1 and a school in micro district Araltal. Overall, 372 families will be relocated as part of the second phase of the Project.
Also, in the first half of the year, the Company published its Sustainability Report for 2015. This is the third non-financial report of KPO that has been issued in accordance with requirements of G4 Guidelines of the Global Initiative for Sustainability Reporting. The Report demonstrates KPO’s commitment towards sustainable development. Published since 2009, it has become an important communication tool for providing detailed information on KPO’s operations to key stakeholder groups.
For more information please contact:
Sergei Pushkarev: <link>PushkS@kpo.kz
Gulnara Sharibayeva: <link>ShariG@kpo.kz
KPO Corporate Affairs Department
