KPO Announces 2017 Performance Results

Karachaganak Petroleum Operating B.V. (KPO) has announced its performance results for the year of 2017.

KPO General Director, Renato Maroli, said: “2017 was a tremendously successful and exciting year in many ways.  For KPO it was marked by many important milestones and achievements which are truly remarkable”.

“Last year KPO celebrated the 20th Anniversary of the signing of the Karachaganak Final Production Sharing Agreement (FPSA), the fundamental document regulating the relationship of the international consortium Karachaganak Petroleum Operating B. V. with the Republic of Kazakhstan”.

“To date, KPO Partners have invested more than $23 billion into the development of Karachaganak whilst direct payments into the RoK budget exceeded $15 billion.  Working in close cooperation with the Akimat of West Kazakhstan Oblast and the Authority — PSA LLP, Karachaganak has developed into a world-class operation and the flagship of the country’s energy sector that generates significant revenues for the Republic of Kazakhstan”, added Renato Maroli.

KPO demonstrated exemplary HSE performance last year.  In particular, in 2017, the final Total Recordable Injury Frequency (TRIF) was 0.15, the best ever result in KPO history.   Lost Time Injury Frequency (LTIF) was the best in the last ten years at 0.11 whilst the Road Traffic Incident Frequency (RTIF) was 0.05.  Overall, in 2017 KPO achieved a 36 per cent reduction of total number of road traffic incidents in comparison with the previous year.

Also, KPO has achieved a world-class gas utilisation rate of 99.92 per cent.

In 2017, the volume of gas flaring was only 0.08 per cent against total volume of gas produced by KPO or only 0.49 tonnes per thousand tonnes of produced crude.   Specific greenhouse gas (GHG) emissions per unit of hydrocarbons production totalled 69 tonnes per thousand tonnes of liquids produced which is below by 4 per cent as compared to a similar indicator in 2016.  Actual reduction of GHG emissions that was achieved thanks to reduction of oil and gas flaring during well operations amounted to 447 thousand tonnes of carbon dioxide (CO2).  These figures are below the average international oil industry indicators (as per IOGP) by 54 per cent.

“KPO follows the principles of sustainable development while adhering to the highest standards of environmental protection in all aspects of its operations.  Activities on emissions’ reduction, waste management and deployment of new technologies are always among the company’s focus areas.  Overall, since 1998, KPO’s investments into environmental activities have exceeded $358 million”, commented Renato Maroli.

In 2017, production at KPO reached a record level of 146 million barrels of oil equivalent in the form of stable and unstable liquids, raw gas, and fuel gas.  In addition, 9.3 billion cubic metres of gas were re-injected to maintain reservoir pressure, a volume equivalent to approximately 49.1 per cent of the total gas produced.

“The outstanding production level achieved by KPO last year represents a significant milestone in the continued development of the Karachaganak field, with 2017 seeing the highest annual production ever recorded.  This has secured enhanced value for the Republic of Kazakhstan and the Karachaganak partners”, said Renato Maroli.

The Karachaganak field is one of the world’s largest gas and condensate fields.  It holds estimated hydrocarbons initially in place (HIIP) of 13.3 billion barrels of liquids (1.7 billion tons of oil and condensate) and 60.2 trillion cubic feet (tcf) (1.7 trillion cubic metres) of gas, of which approximately 11 per cent of liquids and 12 per cent of gas has been recovered to-date.  Currently, 115 producing and 17 sour gas re-injection wells are operated in the Karachaganak field, with a total well stock amounting to 441 wells.

In 2017, KPO completed the implementation of a number of social infrastructure projects in West Kazakhstan Oblast.  KPO annually invests $20 million for this purpose. In total, $342.5 million has been invested into the social infrastructure development in the region since signing the FPSA.

In December 2017, KPO successfully completed relocation of Berezovka and Bestau villages.  This project was implemented in accordance with the RoK Government decree as a result of the newly set borders of the sanitary protection zone around the Karachaganak field.

In December 2017, the KPO Sustainability Report for 2016 received the 1st award in the category ‘Best Sustainability Report’ at the VII Contest of Annual Reports hosted by RAEX Expert Rating Agency.  This was the ninth non-financial report of KPO that wasissued in accordance with requirements of the Guidelines of the Global Reporting Initiative.

In 2017, the share of local content in KPO procurement of goods, works and services reached 54.1 per cent, which in monetary terms amounted to around $400 million. In general, since the signing of the FPSA in 1997, the share of local content in KPO procurement has exceeded $6.54 billion.

Local content increase in staff continued to be one of the KPO key areas.  In 2017, local employees of the company accounted for 95 per cent of skilled, clerical and professional positions.  At the managerial level, 76 per cent of positions were filled by Kazakhstani staff.  Overall, since the signing of the FPSA, KPO has invested more than $200 million in the training of the national workforce.

Summarising the results of 2017, KPO General Director, Renato Maroli, said: “KPO’s operational base is as strong as ever thanks to teamwork, professionalism, and an ever-present aspiration of the whole KPO team to achieve new milestones.  Looking forward for the next year, the ongoing challenge of meeting the highest safety levels remains the priority whilst always seeking further improvements to operational performance.

“We shall continue  to foster our long-standing relationships with the RoK authorities based on our common desire to generate maximum value and the pursuit of sustainable development goals to the benefit of the West Kazakhstan residents and the Republic of Kazakhstan as a whole”, added Renato Maroli.

Aksai, West Kazakhstan Oblast