2018 results

In 2018 we reaffirmed our commitment towards Goal Zero so that all those working for NCOC can go home safe, every day. It is with this Goal Zero mindset that we are proud to report that NCOC completed the year with its best annual result in safety performance to date.

than 25% reduction in our Recordable Injury Rate from 0.60 in 2017 to 0.44 in 2018.

In 2018 we continued to thoroughly investigate incidents, improving the visibility of High Potentials

in our internal reporting and reviews. By highlighting the learnings, we focus attention on reducing the occurrence of incidents that have the potential to cause a fatality, and we embed the improvements in the way we operate.

One of the accomplishments of the year was introducing strategic focus areas which we call “Goal Zero Must Wins”. These focus areas include Behavior Based Safety, Process Safety, Contractor HSSE Management and Embedding Learning from Incidents, all underpinned by Safety Leadership. These areas were presented in the beginning of 2018 and already have contributed to a significant improvement of our Personnel Safety and Process Safety performance alike.

4.2. PROCESS SAFETY AND ASSET INTEGRITY

Management of Process Safety involves keeping our oil, gas and process chemicals inside the production facility plant and equipment so they do not cause harm to people, asset damage or environment impact.

To achieve our Company vision of being “recognized in Kazakhstan and internationally for its safety performance”, all our production facilities are designed and constructed in accordance with bestpractice industry standards.

We implement Company processes and procedures to prevent the release of hazardous materials, and reduce the consequences of releases should they happen. Staff undergoes training and competency development so they are able to manage and operate our facilities safely.

We have personnel and equipment in place to deal with leaks, and any resulting consequences, including fires and explosions, toxic gas release and spills to the environment. All our emergency response plans are routinely tested with drills and exercises.

Process Safety audits, inspections and reviews are used to improve the implementation and effectiveness of our management systems. We investigate if a release of hazardous material occurs, and use the learnings to improve our processes and procedures.

A Process Safety incident is an unplanned or uncontrolled release of material from process containment. We measure and report Process Safety incidents according to industry standard API RP 754. This includes a measure of the consequence of the incidents, with Tier 1 being the most significant. In addition we monitor Process Safety Key Performance Indicators relating to Demands on Safety Systems (Tier 3), and Management System Performance (Tier 4) and implement corrective actions as needed.

During 2018, we recorded zero (0) Tier 1 events and two (2) Tier 2 events. This is a sharp decline from the three (3) Tier 1 and 11 Tier 2 incidents which occurred in 2017, our first full year of production operations.

Both incidents in 2018 were associated with releases of sour gas near valves in excess of API RP 754 thresholds. While there were no associated releases outside of the fencelines or harm to personnel, the releases represent an opportunity to improve existing barriers to prevent recurrence via our incident investigation and learning process. Such incidents allow us to drill our plant staff, as even a relatively minor and local Tier 2 release may result in a shutdown of the plant and muster of personnel as a conservative safety measure.

4.3. FRESH WATER

Water Risk

NCOC onshore operations are located in an area identified by the WRI Aqueduct Water Risk Atlas (2014) as medium to high risk exposure for oil and gas operations.

Performance

The total volume of fresh water consumed in NCOC operations in 2018 was 1000 millions m3. The total volume of fresh water withdrawn in 2018 was 964,000 m3, down from last year as a result of increasing water recycling. Since production grew at the same time by 60%, the amount of fresh water consumed per unit of production in 2018 was 52 tonnes of water per thousand oil-equivalent tonnes, nearly twice less than in 2017.

NCOC obtains most of its water on a contractual basis from the Astrakhan-Mangyshlak pipeline, which is sourced from the Volga river basin; other sources are municipal and bottled water. Water is used at the Bolashak Onshore Processing Plant for producing steam for processes and in the camps for household use.

Offshore facilities also need fresh water: in 2018 about 36,000 m³ was produced from desalination units offshore. This replaced fresh water that would otherwise be sourced from onshore.

Policies, plans and programmes

We consider it our responsibility to other water users in this area to use our portion of the fresh water supply efficiently and sustainably. The used water is treated and discharged to lined evaporation ponds within the Sanitary Protection Zone. It does not come in contact with groundwater or soil. It evaporates and is not returned to the local watershed. Since there is no return flow, the only way to share more water with other users in this watershed is to reduce the amount of fresh water we withdraw. Multiple re-use (recycling) of the water is the best way to accomplish this.

In 2018 NCOC treated and recycled about 66,000 m² of water from household use onshore for greenbelt irrigation and for dust suppression purposes. We also recycle water for domestic use offshore. By far the greatest impact may be had through recycling of the water used in technical processes. As reported last year, NCOC halved the total amount of water withdrawn by Bolashak OPF from the Astakhan-Mangyshlak pipeline by recycling water from the Tail Gas Treatment Unit. In 2018, NCOC continued to pursue plans for additional wastewater treatment. Upon completion, expected in 2021, the new facilities will further reduce water intake up to 70% and enhance the quality of water discharged into evaporation ponds.

4.4 GREENHOUSE GAS EMISSIONS

In 2018, the RoK Government re-started a GHG emissions trading system. NCOC received a quota of 13.6 million tonnes of CO2 to be emitted according to approved a National Plan for 2018-2020, in 2018 NCOC used about 23% of allowed quota.

Total direct Greenhouse Gas (GHG) emissions from NCOC operations in 2018 totaled 3,333 thousand metric tonnes CO₂-equivalent, including 3,158 thousand tonnes of carbon dioxide (CO₂), 167 thousand CO₂-equivalent tonnes of methane (CH₄), and 8 thousand CO₂-equivalent tonnes of nitrous oxide (N₂O). This total includes mobile and stationary sources.

There are almost no changes in the absolute values of emissions since 2017; however there is 2.5 times decrease in flaring emissions intensity in the context of 1.5-fold increase in production.

NCOC production facilities are self-sufficient in electricity, heat and steam. Indirect emissions arise from purchased power for support facilities such as Bautino Base and Atyrau Training Center. Total indirect GHG emissions from NCOC operations in 2018 totaled 10,000 metric tonnes CO2-equivalent, all carbon dioxide.

Normalized greenhouse gas intensity (the proportion of greenhouse gases emitted per unit of production) in 2018 was 180 CO2- equivalent tonnes per 1000 equivalent tonnes of oil produced. Comparison to other projects is difficult, due to methodological and baseline differences. But it is a general rule that an offshore “sour” oil project still in the commissioning phase, such as the North Caspian Project, may be expected to have higher specific GHG emission than less energy-intensive onshore or “sweet” oil projects in steady-state. This intensity number is best used by stakeholders to compare NCOC’s own performance from year to year.

There are various approaches to estimating Other Indirect (“Scope 3”) emissions. NCOC will report volumes of produced oil and gas to enable stakeholders to estimate these emissions from the NCOC value chain using their preferred methodology.

Policies

NCOC is committed to developing a world-class project that is designed and operated in a manner protective of the unique, sensitive environment of the North Caspian Sea. We conduct our operations responsibly and in full compliance with the laws of the Republic of Kazakhstan, and in line with accepted international regulations, standards, and best practices. Contractors and suppliers are obligated by their contracts with NCOC to adhere to our Health, Safety and Environmental policies in all aspects of their work with us.

Our approach is one of risk management. Conceptually, that means identifying and understanding the risks of any action and its potential impacts; taking steps to minimize that risk or mitigate its impacts down to acceptable levels; and continually re-checking the risks and improving the measures to address them.

Programmes

Important environmental compliance and protection programmes include Environmental Impact Assessments, baseline studies and monitoring, and environmental sensitivity mapping.

Availability

NCOC shares the conclusions of its environmental monitoring in many forms: peer-reviewed academic publications, reports, public hearings, EIAs, presentations at public and industry forums, the NCOC website, media articles and company brochures.

NCOC provides the environmental monitoring data it collects directly to the government agencies responsible for environmental protection, per terms of the North Caspian PSA. These agencies ensure that the public is appropriately informed. For example, the Department of Ecological Monitoring of RGP Kazhydromet (RoK Ministry of Energy) publishes monthly, quarterly and annual reports on the state of the environment that include an appendix of analyzed data from NCOC air quality monitoring stations (AQMS) in Atyrau region.

Environmental Protection Plans

NCOC’s environmental protection activities are guided by an Environmental Protection Plan that is approved annually by state environmental regulatory agencies. The type of projects included in the annual EPP: environmental surveys and monitoring of air, water, soil, and biodiversity;

solid and liquid waste management; oil spill response; green spaces; and environmental education. Reports on implementation of the EPP are submitted to the government quarterly.

Environmental Support Team

Environmental specialists are embedded with the Operations departments onshore, offshore, and at Bautino Marine Suppor t Base to verify and consult on compliance with environmental laws and regulations. The Teams conduct daily inspections (announced, as well as unannounced), do “toolbox talks,” and help with the environmental aspects of managing process changes, incident response, emission permits, monitoring, and reporting.

5.2. BIODIVERSITY OF THE CASPIAN ECOSYSTEM

The Caspian Sea as an ecosystem has a high percentage of rare and endemic species found nowhere else. Protection and preservation of this area’s unique biodiversity is a top sustainability objective.

Policy, plans and programmes

Four marine environmental surveys (one at each season of the year) and two onshore surveys are carried out each year. These covered wildlife and plant life, bottom organisms, soil and air quality, in order to better understand species distribution and population dynamics

of Caspian biota. Over 200 such environmental and wildlife surveys have been conducted since the star t of the Project.

In view of the environmental sensitivity of the North Caspian Sea and Ural River delta, the North Caspian Project was allowed to proceed in 1993 as a result of a government decision, based on special ecological requirements developed by a group of Kazakhstan scientists and experts. The decision established new protected areas along the coast, and recommended seasonal restrictions on operations that NCOC follows in order to allow for migration, feeding and breeding patterns of commercial fish species, birds, and seals. The protected areas have been expanded over the years: in 2012, as a result of a publicprivate initiative with NCOC shareholder Eni, the Ak Zhaiyk State Nature Reserve was designated a UNESCO Man & Biosphere Reserve.

Hunting and fishing is prohibited at all NCOC facilities, with exception of scientific fish catches during Company environmental survey activities.

NCOC has developed special Biodiversity Action Plans for all stages of engineering and construction in both onshore and offshore environments. Some programmes are described below for key indicator species. (More detailed information may be found this year in the new NCOC brochure “Environmental Surveys and Initiatives.”)

Caspian Seal

As we have done every year since 2005, NCOC conducted a seal sur vey in 2018, using Kazakhstani experts with oversight by scientific institutes. The 2018 seal sur vey began on January 26 and lasted till March 8. At various times eleven seal monitoring volunteers from NCOC were on board of ice-breaking vessels, helping the seal experts to cover the route between Bautino Base and the Kashagan field area on the icebreakers Mangystau-3 and Tulpar.

In addition to gathering scientific data, onboard observers help the ship captains avoid seals, in compliance with the mitigation recommendations

developed at the star t of the project by marine mammal exper ts. This is complemented with helicopter reconnaissance flights over seal accumulation areas. The reconnaissance results are reported directly to the icebreaker, where captains and seal observers select the safest navigation route to protect the animals. Thermal imaging cameras have been mounted in recent years on all icebreakers used by NCOC. These cameras enable observers to “see” seals day or night, in blizzar d or fog, at a distance hundreds of meters from the vessel, which allows detouring around the seal nursery areas in advance.

The observer teams were accompanied by inspectors from the Atyrau Oblast Department of Ecology and the Oblast Territorial Forestry and Wildlife Inspectorate.

Fish

Catch assessment surveys are regularly performed in offshore project areas in spring, summer and autumn. Tissue samples from sedentary indicator fish species (goby) are randomly tested for hydrocarbons and heavy metals.

Sturgeon is the most valuable fish in the Caspian Sea. It is now endangered, with Caspian states agreeing in 2014 to prohibit commercial fishing in order to restore the populations. The Operator supported the commissioning of a sturgeon hatchery on the Ural River delta in 1998, at the very beginning of our project, and has continued to fund studies and contribute to hatchery upgrade projects over the years. In 2018, NCOC financed capital improvements for water supply to the Ural-Atyrau Sturgeon Hatchery, and sponsored their specialists to attend IV Scientific Conference on sturgeon population protection and reproduction held in Kazan, Russia.

Also in 2018, NCOC completed a three-year offset programme of the fish damage compensation measures to release more than 700,000 “fry” ( juvenile fish), with the aim of contributing to the sturgeon population.

2018 Bird Surveys

Every year, over 280 species of birds migrate along flyways from Eurasia and Siberia to Africa and India, with long stopovers for shelter and rest in the reedy wetlands of the North Caspian.

The Operator has conducted annual and regular seasonal bird studies since 2000: two annual surveys during the regular seasonal migrations (in spring and autumn), a survey of nesting colonies in near-shore areas during mating season in summer, over-winter monitoring of aquatic and semi-aquatic birds, and observations around onshore and offshore facilities, and during summer nesting period.

The surveys cover a vast area from the Volga River delta in the west to the Emba River delta in the east, from Atyrau in the north to Aktau in the south.

The surveyor groups include NCOC ecologists and lead ornithology experts of Kazakhstan, and inspectors from the Atyrau Oblast Department of Ecology and the Oblast Territorial Forestry and Wildlife Inspectorate

In 2018, the population density of birds during autumn migrations remained high. In fact, 544,000 birds were counted during the survey in October, more than ever before. At 91,000, the population of one key indicator species, the mute swan, was the highest recorded since 2000. The spatial distribution of birds is changing, with Komsomolets Bay in the east practically dry due to declining sea levels, and attracting fewer flamingo and mute swans. The same may be said of the Emba delta and the area between the Volga and Ural River deltas. This led to higher concentrations of birds observed in the warm, shallow waters around the Seal Islands, where protective cover abounds.

5.3. DISCHARGES TO WATER

NCOC uses lined evaporation ponds as the safest available method for managing treated industrial water. (See the Case Study on Evaporation Ponds.) Treated wastewater from industrial processes and domestic sewage is discharged through filtration screens into these ponds, and the water is removed by evaporation.

The total quantity of hydrocarbons discharged with treated domestic wastewater and industrial water into evaporation ponds in 2018 was equal to 15.95 tonnes.

NCOC obtained all permits in 2018 for discharge of treated water to evaporation

ponds in accordance with RoK environmental requirements, with one exception discussed in the Case Study.

As noted in the section on Fresh Water, NCOC intends to build an additional wastewater processing facility at Bolashak in 2019 that will maximize our capacity for recycling water from technical and industrial processes.

5.4. NON-GHG AIR EMISSIONS

The primary air emission sources at NCOC’s facilities are the flare unit, gas turbines, boilers and diesel generators.

The flare unit is a part of any oil and gas production facility and functions as a so-called “relief valve” of the plant. A small ignition flame burns at all times, to ensure ready combustion. The flare unit height is designed t o maximize dispersion of combustion products in the air. Power is supplied to onshore and offshore facilities by gas turbines running on associat ed gas produced from the field. The turbines are equipped with special burners designed to reduce nitrogen oxide emissions. Boilers produce steam, heat water and provide space heating for buildings. Boilers run on fuel gas but diesel fuel can also be used.

Diesel generators are used only for stand-by pow er generation.

In 2018, NCOC non-GHG air emissions from all operations were 21% of permitted volumes, and totaled:

• 943 tonnes of volatile organic compounds (VOCs),
• 27,949 tonnes of dioxides of sulfur (SO₂)
• 2550 tonnes of oxides of nitrogen

(NOx excluding N2O, which is reported under GHG Air Emissions).

Compared to 2017, VOCs and NOx emissions were about the same, in the context of a 60% increase in oil production. SO2 emissions were down sharply due to a forty percent decrease in flaring volumes over the reporting period.

Air monitoring is an important part of NCOC’s overall industrial environmental monitoring programme. There are several components, including:

Under-Plume Monitoring

Periodically, under-plume monitoring is conducted, using a specialized vehicle with air sampling and meteorological instruments to drive under the flare flame and collect samples identifying the emissions.

Monitoring at Emission Sources

Maximum permissible emission (MPE) rates that NCOC is required to comply with are calculated for each emission source. Measurements of actual emissions from a source are made instrumentally. For example, the exhaust stacks at lar ge emission sources are equipped with special sampling ports that allow inser ting a gas sampling probe and pitot tube on a periodic basis to take measurements of nitrogen oxides, sulfur dioxide, carbon monoxide, gas flow velocity, pressure and temperature.

Air Quality Monitoring Stations

20 air quality monitoring stations in Atyrau oblast operate 24/7 to measure the ambient atmospheric levels of various compounds and collect weather data.

4 stations are located on the perimeter of the 7-km setback area (“sanitary protection zone”) for the Bolashak plant; 7 more are located in surrounding areas, including Dossor and Makat; and 9 are in Atyrau city proper. The government meteorological agency Kazhydromet monitors this air quality data and publishes monthly and annual summary bulletins on its website. On-line access to the data is also provided to the Atyrau Oblast Department of Natural Resources and Nature Use Regulation.

Hydrogen Sulfide

Hydrogen sulfide (H₂S) is another non-GHG air emission. It is flammable and highly toxic, and has a strong, unpleasant odor. It may be generated anywhere that sulfur-containing organic materials decompose in the absence of oxygen, so is emitted naturally in marsh gases and volcanoes (sometimes in large quantities). It is produced during sour crude oil processing and transportation.

NCOC specialists who work in immediate proximity to wellheads, flash gas compressors and other equipment receive special training and personal detectors. They wear masks and breathing apparatus as a precaution in areas where high H₂S concentrations are possible as an

occupational hazard. The risk drops off quickly the further from these locations; so do the potential concentrations.

NCOC can state with confidence that the Bolashak plant is safe for the public. The primary guarantor of safety is the 7 km buffer (Sanitary Protection Zone or SPZ) around Bolashak, sufficient to protect nearby residents from any long-term health effects from air emissions and providing a conservatively high margin of safety even for unplanned events. Confidence in this conclusion rests upon careful design, multiyear studies and computer models, government review and approvals, and finally, recent operating experience that confirms the models (see figure). As in years past, on-going monitoring in 2018 shows consistently that short-term H₂S peaks (from 1 to 20 minutes in duration) remain far more likely in Atyrau than near Bolashak. The competent government agency for air monitoring RSE Kazhydromet confirmed there were no cases of high– (VZ) or extremely-high pollution (EVZ) registered around Bolashak in 2018. See the report “Informational Bulletin on the Condition of the Environment of the Republic of Kazakhstan, 2018” (www.kazhydromet. kz), in which the data from all twenty NCOC air monitoring stations is published in summary form.

5.5. OIL SPILLS TO THE ENVIRONMENT

Performance

In 2018, there were 0 hydrocarbon spills greater than 1 barrel reaching the environment from NCOC operations (total volume: 0 barrels of oil-equivalent hydrocarbons).

Approach

NCOC places first priority on prevention of oil spills. Secondly, no matter how confident we are of their prevention, NCOC remains always prepared to respond quickly and fully to incidents were they to occur.

2018 Actions

• Prevention. By far the best defense against oil spills is to prevent them from occurring in the first place, identifying spill risks and ensuring that the highest safety standards are continuously applied to mitigate those risks.
• Technology. We employ a wide range of innovative technologies to assist in responding to oil spills, and are actively engaged in research on new and more effective methods.
• Response Training. NCOC has a dedicated Oil Spill Response group, with about a hundred fully-trained staff, and equipment suitable for the harsh environment of the

North Caspian Sea stored at marine support bases in Bautino and Damba. NCOC has a comprehensive Oil Spill Response Plan that is regularly drilled. In 2018, in addition to on-going minor exercises at all locations, NCOC also conducted two “Tier 3” exercises, simulating a major oil spill.

TENIZ-2018, an international integrated exercise of Caspian states conducted under the Astrakhan Emergency Cooperation Agreement, took place on 2-3 August 2018. Task forces, made up of representatives from responsible government agencies and oil companies from the various countries, worked together to fight the (simulated) oil spill. The exercise was followed by a demonstration of NCOC’s oil spill response equipment at Bautino Base.

This was followed on 14 and 18-20 September by a Regional Tier 3 spill exercise code-named “Altyn Qyran.” The exercise involved over a hundred NCOC personnel and contractors, and six representatives from related national and local government agencies. In the event of a major spill, NCOC would call in additional support from OSRL (an oil spill

response cooperative located in Southampton, UK) and its shareholder parent companies. Two persons from OSRL and (for the first time) over 40 staff from Shell and ExxonMobil took part in the simulation this year. During this exercise NCOC Incident Management Team and Crisis Management Team members drilled the Incident Command System and crisis management techniques at a simulated Incident Command Post at the NCOC Atyrau Training Centre, including online software tools to order and track resources and a “Common Operating Picture” to provide everyone in the exercise a simulated real time image of the current situation. The exercise provided great experience and highly valuable feedback that will be used

continuously improve the Crisis and Emergency Preparedness and Response Process.

5.6. WASTE

Total quantity of waste generated by the Company in 2018 was 10,976 tonnes, including 5731 tonnes of waste with hazardous properties classified as hazardous and 5245 tonnes classified as nonhazardous according to the RoK Environmental Code.

The volume of waste generated in 2018 vs 2017 has dropped by 58% due to completion of construction works at the Company’s onshore and offshore facilities.

Policies and Programmes

The key objective of NCOC’s Waste Management System is to reduce or fully eliminate waste generation at the source or the process through proper planning of Company operations.

Waste management is performed throughout the life cycle of the waste starting from its generation to final disposal. Waste segregation is an important step in the process, so that hazardous and non-hazardous wastes are not mixed.

Since the RoK Environmental Code now permits it, food and medical wastes (considered hazardous) are incinerated offshore. The ash after incineration is transferred to onshore facilities.

To improve compliance with the newly-introduced Extended Producer Responsibility provisions in the RoK Environmental Code, the onshore industrial waste storage site is being upgraded with additional waste segregation, and waste tracking processes have been established. The waste subject to EPR provisions will be transferred to specialized organizations for further processing and recycling.

See Section 9.2 “Employee Engagement in the Community” for more information about recycling at NCOC offices and Samal camp as part of “Green Office” initiatives.

5.7. ONSHORE AND OFFSHORE SURVEYS

NCOC implements comprehensive environmental monitoring programmes to collect offshore data, analyze the chemical composition of seawater and bottom sediments, and to study fish, benthos and

plankton populations. Since 1994 the project has conducted more than forty offshore monitoring surveys in roughly 900 different locations. Data collected during the regular seasonal surveys covers weather conditions, water quality, bottom sediments quality and biological data (micro-organisms, phytoplankton, zooplankton, fish). Starting in 2013, we added air quality, birds, and additional Caspian seal studies.

NCOC published a 40-page brochure in 2018 entitled “Environmental Surveys and Initiatives,” providing more detail on the company’s environmental impact monitoring, biodiversity surveys, air quality, wastewater treatment, waste management, and public environmental initiatives. See www.ncoc.kz.

5.8. DECOMMISSIONING AND REMEDIATION

Decommissioning is governed by the North Caspian Sea

PSA, including detailed planning and funding at the appropriate time. Decommissioning and remediation is planned and executed in the same manner as any other engineering project, with each programme needing an environmental impact assessment to determine the preferred option to apply to a particular facility.

NCOC production facilities are self-sufficient in electricity, heat and steam. Indirect emissions arise from purchased power for support facilities such as Bautino Base and Atyrau Training Center. Energy use in NCOC operations in 2018 totaled 42.25 million gigajoules (GJ). Of this amount, 0.11 million GJ was impor ted (purchased).

Normalized energy intensity (energy use per unit of production) in 2018 was 2.05 GJ per oil-equivalent tonne of production, which was improved for about 13% in comp arison with 2017.

In 2018 NCOC continued the energy efficiency audit of facilities begun last year, with plans to complete this work for its main onshore and offshore facilities in 2019 and identif y the most promising energy savings and efficiency measures to include in the Company Energy Efficiency Plan for implementation.

One of the proposed energy saving measures from 2017 is related to the use of renewable energy, the installation of solar thermal collectors to heat water for the Bautino Marine Suppor t Base canteen, is underway now with completion expected in 1Q, 2019.

NCOC is establishing a network with experts from its parent shareholding companies for purposes of exchanging information and best practices on energy efficiency, renewable energy, and minimizing our carbon footprint.

We also plan to introduce an energy management system with the objective of a more systematic approach to energy efficiency and the promotion of energy efficiency awareness within the company.

6.2. FLARING

The Kashagan Phase 1 Project was designed from the beginning to avoid routine flaring, i.e., the burning of excess natural gas “routinely” because an oil and gas project has no other economic way to dispose of it in the course of producing oil. On the contrar y, all of the gas

produced in Kashagan Phase 1 is r e-injected, used as fuel or sold. Flaring is how ever needed in the course of operations as the safest and most effective way to deal with gas that for t emporary technical reasons could not be processed, such as commissioning operations, small amounts of valve leakage into flare collectors, or one-time discharges to flare due to operational upsets. The volumes of gas flared in such cases is calculated and reported.

The quantity of hydrocarbon gas flared from NCOC operations in 2018 was 20.8% of permitted volumes, and totaled 63 million Sm3 (standard cubic meters). Flaring was down about 40% in 2018 compared to the previous year, even as oil production grew by 60%. Operational reliability has been better than expected, and this improved process stability during commissioning has allowed us to keep flaring below 1% of total produced gas volumes.

As Kazakhstan’s largest direct foreign investment project, the North Caspian Project has a powerful multiplier effect on the economy, creating employment opportunities for Kazakh people and opportunities for local companies.

US$424 million was spent for local content in goods

works, and services in 2018, equivalent to 43.4% of total expenditures.

Overall payments for local content in goods, works and services have totaled more than US$14.1 billion since 2004.

Mangystau and Atyrau Oblasts also benefit directly from social and infrastructure related projects funded by NCOC. These have totaled well over a half-billion US dollars since the start of the Kashagan Phase 1 Project.

These and other economic and social benefits will be described in more detail in the following section.

8.1. SOCIAL INFRASTRUCTURE PROJECTS

Under the North Caspian Sea PSA, NCOC allocates a budget each year for the development of Social Infrastructure Projects. In 2018, this budget amounted to US$50 million. The funds, for construction of schools, kindergartens, hospitals, sport facilities, as well as utilities such as roads, electric power water supply lines, and other infrastructure designed to benefit the community, are split equally between Atyrau and Mangystau oblasts, where North Caspian Project activities are centered.

Between 1998 and 2018, 200 Social Infrastructure Projects have been completed. Cumulative spend on Social Infrastructure Projects has thus reached US$620.8 million.

Social Infrastructure Projects are generally proposed by the Oblast Akimats (governments). Proposals are analyzed by NCOC and the PSA Authority to ensure they

NCOC RECEIVES 2018 GOLD PRIZE AT PARYZ COMPETITION FOR SOCIAL RESPONSIBILITY

NCOC was awarded the Gold Prize in the annual nationwide “Paryz” contest for the most sociallyresponsible company of the year. The announcement ceremony on December 11, 2018 was attended by President Nursultan Nazarbayev. Prime Minister presented the award to NCOC Deputy Managing Director Zhakyp Marabayev.

The award recognized the Social and Infrastructure Projects (SIP) and Sponsorship & Donations (S&D) programmes implemented last year.

comply with PSA requirements and the Operator’s sustainable development strategy, and are developed into projects in close collaboration with the Oblast Akimats. Once approved, NCOC is responsible for all stages of design and engineering, contract tender, and execution up to handover.

8.2. SPONSORSHIP AND DONATIONS PROGRAMME

Through its Sponsorship and Donations grant programme , NCOC responds directly to the needs and requests of local communities. US$1.5 million is split equally each y ear between Atyrau and Mangystau oblasts for community sponsorships and donations. The Sponsorships and Donation grant programme focuses on five main areas of support for local communities: healthcare, education, sports, culture and charity.

To be aligned with NCOC’s sustainable development strategic goals, projects must contain elements of self-involvement and demonstrate sustainability for local communities. They should not support political or religious organizations, create conditions for unfair

A new dormitory for one hundred families was opened in Mangystau village, Munaily District, Mangystau Oblast in August 2018. The dormitory will host families of public workers, mostly medical and education specialists

A new Recreation Center with 200 seats was opened in Zhanatalap settlement, Atyrau Oblast in November 2018.

market competition, or undermine the ecological sustainability of local communities and/or natural ecosystems. The initiative for projects generally comes from the local communities, but may also be initiated by NCOC.

In 2018, 64 projects were undertaken (34 in Atyrau Oblast and 30 in Mangystau Oblast). A total US$19 million has been spent since 1998. In addition, up to US$300,000 has been budgeted each year since 2006 for summer camp for 200 underprivileged and orphan children of Atyrau and Mangystau Oblasts. In 2018, NCOC covered travel, camp and culturaleducational development expenses to send these children to the “Baldauren” centre in Burabai.

In 2018 NCOC conducted monitoring of the Sponsorship & Donations projects completed between 2013-2015. The priority objectives of the monitoring include impact assessment of the projects on local communities and evaluation of their efficiency levels. The monitoring covered 66 projects in Atyrau Oblast and 73 projects in Mangystau Oblast.

According to the monitoring results 97% of the beneficiaries from both regions indicated that the Company’s support contributed to significant improvement of their activities.

Moreover, the average value of positive impact reached 3.7 points on a scale o f one to four. In addition, the conducted monitoring enabled to detect certain shortfalls in the projects, identify a list of social issues that concern the beneficiaries, and develop recommendations for quality and efficiency improvement of Sponsorship projects in future.

The Company is currently considering possibility to improve the quality of selection and implementation of the Sponsorship projects based on the comments received.

8.3. LOCAL CONTENT PERFORMANCE

In 2018 the Nor th Caspian Project spent US$424 million for local goods, works and services, equivalent to 43,4% of total expenditures. This adds up to a year-end total of more than US$14.1 billion spent on local goods, w orks and services since 2004¹⁵. These and other facts speak to the depth of NCOC’s commitment to the use of local content.

8.4. LOCAL CONTENT: NCOC POLICY AND PROGRAMMES

NCOC Local Content Policy is based on the fundamentals of the North Caspian Sea Production Sharing Agreement (NCSPSA), applicable laws, and NCOC’s Mission, Vision, and Values, as well as its business goals and objectives.

According to the NCSPSA, NCOC gives preference to local suppliers of goods and services subject to their competitiveness with respect to quality, safety and price requirements for similar materials and services provided by international suppliers. Thus development of Local Content is one of the most important and critical aspects of the Company’s activity.

During 2018, the Local Content department focused on implementation of its Five Year Local Content Development Programme for 2017-2021, which prescribes identified target areas for the participation of Kazakhstan businesses with defined strategies and planned activities to develop and maximize Local Content.

An analysis of the future needs of the Project is also carried out with an eye to leveraging local content development opportunities, and consolidated in the Project’s long-term procurement outlook.

2018 PROGRESS UPDATE: AKTAU DECLARATION

As part of the Five-Year Local Content Development Programme, and working toward goals outlined in the 2012 Aktau Declaration, NCOC conducted market research in 2018 that identified local companies in certain categories that appear capable of providing goods, works and services to the North Caspian Project:

A major activity in 2018 was advanced planning to maximize Local Content during the upcoming Turnaround in mid-2019.

8.5. GROWING LOCAL INDUSTRY CAPABILITY

Development of local vendors is a priority. The objective is to help local companies improve their technical and managerial capabilities so that they qualify as potential suppliers to the Project, and longer-term could bid on other opportunities in national and international markets.

In the past six years alone, thirty eight contracts worth US$ 4.176 billion, originally executed by international contractors, have been transitioned to competitive local companies – for instance, in helicopter services, marine operations, and freight forwarding.

Since 2006, about 1300 local companies have participated in workshops and forums organized by NCOC. These range from general awareness seminars to introduce the Project and its contracting requirements, to more specialized seminars on tender writing and pre-qualification processes.

From 2006 to 2018, the Operator assisted over 200 local companies to obtain international standards certifications for their management, goods and services, thus significantly increasing their competitiveness for contracts with NCOC. The Operator has also provided assistance and financial support to local companies to obtain international certifications for their goods and services from the American Society of Mechanical Engineers (ASME) and American Petroleum Institute (API).

From 2006 to 2018, NCOC conducted more than 350 technical qualification audits and site visits of local companies, assessing their ability to meet demanding specifications and international codes and standards for goods and services put out for bid by the North Caspian Project.

From 2006 to 2018 the Operator provided more than 3500 employees of local companies with specialized professional training in the most

in-demand craft skills, on topics such as Working in Confined Spaces, Industrial Welding Safety, Electronic Systems and Assembly, Working at Height, Mobile Crane Operations, etc.

This year alone NCOC conducted 104 courses and trained a total of more than a thousand Kazakhstani technical professionals. The training allows local companies identified by NCOC’s Local Content Department to improve their skill base and meet requirements imposed by international standards, codes and heavy industry norms in common use today.

8.6. JOB SKILLS TRAINING AND KNOWLEDGE TRANSFER

As a means to achieve its own medium– and long-term nationalization goals, the Operator has developed a special, targeted programme for identifying and recruiting Kazakhstan citizens, and providing them with training for advancement in a long-term career with NCOC. Since 1998 a total of more than 16,000 Kazakhstan citizens have received some form of training, either from NCOC or as employees of local companies being helped by NCOC.

Over two decades, the Operat or has spent in total about US$263 million on job skills and professional training to build local capacity for the North Caspian Project.

In 2018, 115 students completed summer internships at NCOC. The programme provides opportunity for local students to work in a real international oil and gas company, and to get hands-on experience with some of the most modern equipment in this industry.

In 2018, NCOC launched an International Development Assignment Programme, jointly with its shareholder companies. The programme provides opportunity for NCOC employees (and those “seconded” from the national oil company KMG) to work overseas for the shareholder companies for up to two year assignments in order to enhance their skills, upgrade existing knowledge and prepare for future roles in the Company.

NCOC Scholarship Programme

NCOC established a Scholarship programme in 1998, pursuant to the NCSPSA. The Operator has sponsored more than 3000 students from Kazakhstan to study in over 80 educational institutions inside and outside of the RoK, with a monetary value over US$7.5 million.

NCOC provides the funding and the Kazenergy Association manages the Scholarship fund on a competitive basis for the academic training of Kazakhstan citizens (not NCOC employees) in subjects related to the petroleum industry, including training courses at universities, colleges or other training institutions. NCOC sponsored 388 students at 42 educational institutions during the 2018-2019 academic year. Almost a hundred of them from Atyrau Oblast.

Kazakhstan Maritime Academy

2018 was the first year of a three-year programme of assistance to the Kazakhstan Maritime Academy, per a

memorandum signed last year with KMA’s parent institution, the Kazakhstan-British Technical University in Almaty. The financial assistance totals US$900,000 over three years, for upkeep of marine simulators at KBTU, and helping to sponsor 26 national cadets in sea survival training and International Maritime Organization certification programmes in Oman that are basic prerequisites to put Kazakhstan on the “whitelist” of the IMO.

8.7. NATIONALIZATION

Article XXVII of the NCSPSA specifies the overall targets in terms of manning levels of Kazakhstan citizens employed in carrying out Petroleum

Operations. In 2018, the Kashagan Phase 1 Project has already exceeded these targets, with:

• 80% of managerial staff;
• 95% of technical and engineering employees, administrative staff, and qualified specialists;
• 100% of workers and supporting personnel.

Strong growth was once again noted in Kazakhstani managerial staff in 2018, increasing to 80% compared to 75% last year. This is in connection with a 2017 restructuring of office and supporting functions.

Technical and engineering employees, administrative staff and qualified specialists were down slightly in percentage terms in 2018, owing to additional project work related to future growth opportunities that required bringing in additional technical expertise over the short-term.

Overall at the end of 2018, 90% of the nearly three thousand employees of operating company NCOC are Kazakhstan citizens, and 92% of the more than 10 thousand people working on the North Caspian Project are Kazakhstan citizens.

8.8. BUSINESS ETHICS

Awareness

NCOC’s General Business Principles apply to all our business affairs and describe the behavior expected of every staff member of NCOC, including directhire Kazakhstan citizens, secondees, and contract staff. Further, all NCOC staff are required to adhere to a Code of Conduct, which instructs them on how to apply the General Business Principles in line with our core values. It provides practical instructions on how to comply with laws and regulations and how to relate to customers, communities and colleagues. Staff communications and monitoring programmes are designed and implemented to assure compliance.

Suppliers

Contractors and suppliers are contractually obligated to comply with our General Business Principles and Code of Conduct in all aspects of their work with us. All those seeking to do business with NCOC undergo third-party “due diligence” background checks before contracts are signed. After further risk screening, some companies may be asked to institute mandatory training or special contractual conditions to ensure that their business practices align fully with our expectations.

Suspected Violations

No one at NCOC may instruct staff to take actions that violate the law or contradict our Principles. If an employee observes such an action or instruction, he or she may refer the situation in confidence to a supervisor, to the NCOC Ethics & Compliance Officer, or to the Compliance Hotline for further investigation and possible action. The Compliance Hotline is a 3rd party operated website (www.ncoc.deloitte-hotline.com), e-mail address (ncoc.hotline@deloitte.kz) and phone number (8 800 080 15 65) that allows anyone to report suspected violations of law and Code of Conduct including on an anonymous basis.

NCOC staff, vendors, suppliers, contractors or anyone else can raise concerns or report possible noncompliance with our values and principles to the NCOC Ethics & Compliance Officer or to the Hotline, even anonymously. Details are kept confidential. The Ethics & Compliance Officer looks into allegations, and if confirmed the company’s management takes actions appropriate to the circumstances. NCOC does not tolerate retaliation of any

kind against those who report an issue concerning our General Business Principles, the Code of Conduct or Anti-Bribery & Corruption Manual, or compliance with applicable law.

8.9. PREVENTING CORRUPTION

Policies

NCOC’s internal Anti-Bribery & Corruption Manual contains policies and procedures to ensure that any interaction with government officials is directly related to a stated business purpose or regulatory requirement, and that it is in strict compliance with the laws of Kazakhstan and consistent with any international statutes that may apply¹⁶.

NCOC requires that its staff avoid conflicts of interest between their private activities or family relationships and their role in the conduct of NCOC business.

NCOC reflects all business transactions in its accounts in an accurate and timely manner, in accordance with established procedures and agreements.

Contractors and suppliers are obligated by their contracts with NCOC to adhere to our General Business Principles in all aspects of their work with us.

As started above, concerns or suspected noncompliance may be reported in confidence to the NCOC Ethics & Compliance officer or to the Hotline.

Any confirmed non-compliance can have serious consequences as may be appropriate including dismissal of the staff concerned and termination of the relevant contracts.

8.10. ENGAGEMENT IN PUBLIC POLICY

In our General Business Principles, NCOC has pledged to contribute in an ethical and constructive way to enhancing the laws and regulations of Kazakhstan on

Health, Safety, Security and Environmental protection. NCOC is an active member of Kazenergy, a not-for-profit association of companies in energy and oil and gas industries in Kazakhstan. NCOC is a member of the Oil and Gas Committee of the “Atameken” National Chamber of Entrepreneurs. We often engage in discussions of priority public policy issues affecting our industry in the framework of these organizations. NCOC is also a member of the American Chamber of Commerce in Kazakhstan, and has participated in its advocacy activities to improve the foreign investment climate.

NCOC does not make political contributions of any kind.

9.1. ENGAGEMENT WITH THE LOCAL COMMUNITY

NCOC is headquartered in Atyrau, Kazakhstan, close to the North Caspian Project’s resources and its facilities in Atyrau and Mangystau Oblasts. We aim to be an employer of choice and a respected member of these communities. We care about the communities where we operate because we are a part of them. We want to proactively address any concerns raised about our operations, recognizing that public respect and confidence are earned through performance, open communications and community involvement. Voluntary sustainability reporting plays an important part in this.

Through its Sponsorship and Donations programme, NCOC positions itself as a socially responsible company that supports local communities. Here are just a few of the programmes we carried out in 2018:

• NCOC sponsored a week-long Environmental Summer School near Aktau, where highschool students engage in research and laboratories in environmental science to promote the sustainable development of the Caspian Region. The Summer School is traditionally held about the time of the annual “Caspian Day” commemoration in August.
• NCOC, jointly with the Kazakhstan-British Technical University in Almaty, launched a new two-week summer school for 60 teens from underprivileged families of Makat and Tupkaragan Districts to help them expand their horizons, developing career and communication skills in a creative environment.

We engage on a regular basis throughout the year with the public to share information or discuss their concerns and questions about the North Caspian Project.

A Public Hearing on Preliminary Environmental Impact Assessment related to the design solutions of Amendment No. 2 to Kashagan Experimental Programme Development Scheme took place on September 25. The Amendment addresses project changes as a result of a more gradualthan- expected pressure decline in the Kashagan reservoir (see NCOC 2017 Sustainability Report, “Reservoir Modeling”).

In 2018, as part of a community grievance process, we continued to engage on a regular basis with the local authorities of the communities and local Akims around the Bolashak plant (Karabatan station, Eskene station and Taskesken) to understand concerns and social needs.

This Sustainability Report has become a new and effective venue for engaging the public. While developing the 2017 Report, in early 2018 we met with the External Advisory Board, representing the combined input of environmental and social NGOs from Atyrau and

Mangystau Oblasts, to receive their comments and recommendations. In April, we presented the 2017 Report to the public and answered questions at three special meetings in Atyrau and Aktau, moderated by Shynar Izteleuova, the Director of the Zhayik Aarhus Center

NCOC has a broad-ranging communications programme to reach out to stakeholders and work with local media outlets on topics of interest. Our external website, www.ncoc.kz, was updated and refreshed with a new look and additional content and videos in 2018. To help local businesses learn about economic opportunities associated with the North Caspian Project we reach out in a variety of ways, from general awareness seminars about the project and participation in industry conferences, to highly targeted vendor audits and specialized training sessions (see the section on Local Content for more information). Anyone in the community can raise concerns or report possible non-compliance with our values and principles – even anonymously – to the NCOC Ethics and Compliance officer, or to the Compliance Hotline that was instituted in 2017 (see the section on Business Ethics for more information).

9.2. EMPLOYEE ENGAGEMENT IN THE COMMUNITY

NCOC encourages employees to take active part in the betterment of their communities.

• NCOC organized a clean-up campaign of the Ural River bank, “Clean city Atyrau,” jointly with local environmental NGOs, municipal public offices and state agencies.
• NCOC employees at the Bautino Marine Support Base organised a clean-up at Dubski Garden on the western coast of the Tupkaragan peninsula, collecting 120 kg of garbage.
• NCOC and its employees participated in important local holidays for the community, such as Nauryz (Kazakh New Year) and Victory Day.

• In 2018, NCOC employee volunteers delivered engaging fire safety presentations to more than 5,000 kids in local Atyrau local schools, teaching escape and evacuation precautions and raising awareness on actions to take in case of fire.
• The NCOC Oil Spill Preparedness team visited Fort-Shevchenko school lyceum where they shared with students new technologies in oil spill and preventive HSE measures.
• In 2018, the Facilities Management department in NCOC launched several “Green Office” initiatives. It has been calculated that in 2018 NCOC shuttle-bus pools, which FM organizes and the majority of office workers in Atyrau use on a regular basis, saved 63,000 trips in personal cars, equivalent to a reduction of nearly 500 tonnes of CO₂.

9.3. NCOC WORKFORCE; LABOR RIGHTS

NCOC goes well beyond legal requirements of the Labour Code to provide compensation and benefits that attract, motivate and retain employees, and to incentivize their contribution to achieving our business objectives. NCOC carefully calibrates the competitiveness of its salary and benefits package with market surveys.

The remuneration philosophy is based on a “pay for performance” approach that is aligned with our Mission, Vision, values and culture at NCOC. In addition to the annual general salary increase and Oilman’s Day bonus payment, an employee may receive an Individual Merit Salary increase and a variable annual Company Performance bonus, plus discretionary allowances and special monetary awards for outstanding performance or adherence to company values. Kazakhstan citizens who are directly hired by NCOC receive numerous other compensations and benefits, including generous paid and unpaid time off, paid pension, continuing education assistance, medical and life insurance, free commute on company shuttle bus, financial assistance programmes for health club membership, home mortgage, wellness and medical issues, bereavement, children’s education and books.

NCOC is an exciting, international collective where English is used in a business setting, and opportunities exist for International Development Assignments in NCOC shareholder companies (see Section 8.6 on Job Skills Training and Knowledge Transfer).

In 2018, 36 Kazakhstan university graduates were hired by NCOC, five of these from universities in Atyrau.

Diversity and Inclusion

NCOC does not tolerate unlawful discrimination in employment. Our Code of Conduct for employees specifies that employment decisions are based only on relevant qualifications, merit, performance and other job-related factors.

NCOC does not tolerate any form of harassment, nor any action, conduct or behavior which is humiliating, intimidating or hostile. Managers have a responsibility to protect their staff from harassment, and to create a climate where individuals who have concerns about harassment in their work area may discuss the issues in confidence.

NCOC is committed to providing an open working environment in which respect for each other is fundamental, continuous improvement is a shared goal, and the concerns of individuals are taken seriously and dealt with positively, without prejudice to them or their career.

In 2018, 32% of NCOC’s workforce are women.

Workforce Grievances

NCOC has clear policies and procedures for dealing with workforce grievances, which apply equally to its contractors and sub-contractors. Grievance procedures serve to bring employee problems to management’s attention and ensure open, proper and timely review and resolution before frustrations can evolve into conflict. Employees may express their grievances freely and openly without fear of dismissal and intimidation. NCOC must accept, register, and review any written grievance submitted by an employee. Employees have the right to appeal a decision, which he/she thinks may be violating his/her labor rights If not resolved within NCOC, the

grievance may be referred to appropriate RoK officials. By law, neither NCOC nor its contractors may compel employees to join or not join a legal labor action, and must reserve for the employee any prior job position and benefits.

NCOC has policies and procedures in place for monitoring timeliness of salary payment, living conditions and canteen facilities provided by our contractors and sub-contractors.

9.4. HUMAN RIGHTS DUE DILIGENCE

NCOC has been working for many years to promote respect for human rights within our organization. Our approach consists of several core elements, including:

• Compliance with applicable laws and regulations;
• Regular dialogue and engagement with our stakeholders;
• Contributing, directly or indirectly, to the general well-being of the communities within which we work;
• Adherence to our General Business Principles, the Code of Conduct, and the Anti-Bribery & Corruption Manual, which address related issues.

As it relates to our staff, this approach manifests as compliance with law, protection of employees’ personal data, respect for diversity, and continuous improvement of our Human Resources programmes and policies (see section on NCOC Workforce).

Suppliers are also contractually obligated to comply with our General Business Principles an d Code of Conduct in all aspects of their work with us.

Security

NCOC has programmes and measures in place to provide security and safeguards as appropriate to protect its people, operations, facilities, business information, and other assets. NCOC sites have implemented security programmes based on a proven, structured risk assessment methodology. NCOC complies with relevant laws and regulations affecting security in areas where we operate, and we support a coordinated and cooperative approach to infrastructure security with the competent local and national security agencies.

NCOC requires its security contractors to abide by the Voluntary Principles on Security and Human Rights.

10.1. PRINCIPLES

NCOC reports sustainability performance in a full and transparent manner to its stakeholders in compliance with its General Business Principles, and subject to relevant terms of the North Caspian Sea PSA.

This report is guided by global best practice; foundational is the 3rd edition (2015) of “Oil and Gas Industry Guidance on Voluntary Sustainability Reporting” (“the 2015 Guidance”). Our intent is that, through strict adherence to its indicators and processes, this report will be relevant, transparent, consistent/systematic, complete, and accurate in the sense defined by the 2015 Guidance.

The data is fully consistent with reports on environmental and socio-economic performance of the North Caspian Project made to NCOC shareholders, and to the Republic of Kazakhstan in its oversight and regulatory capacities.

10.2. MATERIALITY

The base set of reporting indicators are those in the pilot 2015 NCOC Sustainability Report, based on “common” reporting requirements of the IPIECA 2015 Guidance. Stakeholder engagements, issues monitoring and media inquiries were also used to identify potential material issues specific to this project.

The frequency with which stakeholders raise certain issues and the volume of response material in our databases, media coverage, and considerations of timeliness are criteria which have all influenced the prioritization of issues and inclusion herein. The structure of the report has been evolved from the 2015 Guidance’s illustration of the interconnecting social, economic and environmental dimensions of sustainable development, reproduced as a figure in the Report Structure section.

10.3. DATA PROTOCOLS

For more than a decade, the Operator has had robust management and other systems in place for collecting and analyzing environmental, safety, production and financial activity, and reporting it to the shareholders of the North Caspian Project, as well as to the PSA Authority and RoK government agencies at various levels for oversight and regulatory compliance submissions. This report uses the same data sources and reports provided to them. If there is a difference (e.g., in units or definitions) between reporting requirements of the 2015 Guidance and those of Republic of Kazakhstan, we are governed by the latter and attach a footnote to the Performance Table.

10.4. EXTERNAL ADVISORY BOARD

The NCOC Sustainable Development Report has been produced, just like last year, in close cooperation and engagement with the External Advisory Board. Making NGOs part of the report discussion represents another practical step of the company to facilitate development of the civil society and achievement of sustainable development goals in our country. An open dialogue with the “third sector” showcases the will of the NCP Operator to be transparent in its operations and ensure robust implementation of the trilateral partnership program between the State, business and NGOs.

This cooperation can be definitely referred to as a two-way road. Discussions of the report have been beneficial for NGOs since they expanded significantly their opportunities to have information about the company’s operations, enhanced their competencies, e.g. in the use of an analytical approach to sustainable development issues, and improved their understanding of such issues as the LC development under the North Caspian Project in the national context, given the scales of Kazakhstan. We have gained an invaluable experience of the joint integrated analytical exercise with actual data on multiple domains: economic, social, environmental.

NCOC took onboard, just like last year, many recommendations of the Council members that had been generated through participatory discussions. A wide range of comments on environmental and social

activities highlighted not only positive outcomes but also issues that require more focus and should be addressed in the future for improvement purposes. NCOC has re-affirmed its commitment to the open dialogue and improvements. We are confident that such mutually beneficial cooperation is key to the success of the North-Caspian Project in all lines of business.

10.5. ASSURANCE

For more than a decade, NCOC’s data gathering and reporting systems have been subjected to a variety of audits and “cold eyes” reviews by shareholders, and inspections or reviews by the relevant governmental regulatory agencies.

NCOC holds the following certifications:

• OHSAS 18001 (Occupational Health and Safety Assessment Series)
• ISO 14001 (Environmental Management Systems)
• ISO 9001 (Quality Management Systems)

The external verification for these awards requires NCOC to regularly demonstrate not only compliance, but also continuous improvement in its management systems.

10.6. TABLE OF CORRESPONDENCE TO IPIECA 2015 AND GRI-G4 INDICATORS

This table shows indicators in this Sustainability Report from IPIECA’s 2015 Guidance, and an approximate mapping to the GRI G4 Guidelines based on the equivalence table in the 2015 Guidance appendix (only for items with High alignment).