2019 was an impressive year for NCOC. The year was full of
tremendous new challenges but our company rose to meet
those opportunities. We started the year with an important
and challenging task: the first-ever major turnaround of
onshore and offshore facilities. After world-class
preparation, we delivered the turnaround safely,
effectively, and ahead of schedule.
Safety is and will always remain our fundamental value. In
that spirit, we continued our Goal Zero journey and
achieved zero Tier 1 or Tier 2 process safety incidents
for the entire year. This result positions the Kashagan
asset among the best process safety performance assets in
the world. We also want to be good stewards of our
environment. So we performed some upgrades to our plant
which allowed us to substantially reduce fresh water
intake. We also reduced flaring by about 9% compared to
the previous year, even with oil production increasing by
7%. These are results that we can be proud of.
In terms of production, successful completion of the
D-Island well conversion project and EPC-4 topside project
allowed a substantial increase to production levels.
Today, we are pleased to have exported volumes above and
beyond those that we committed to the Republic of
Kazakhstan and NCOC shareholders.
As a growing company with a long future, we take a
proactive approach and seek to ‘pay it forward’. Therefore
we have continued our local content development programme,
investing more than 50% of NCOC’s total expenditures last
year into improving the capabilities of national
enterprises. A number of social and infrastructure
projects completed in Atyrau and Mangystau Oblasts have
benefitted many people. One of the brightest examples is
the Remote Village Gasification project, which not only
helped the region but also contributed to a longstanding
strategic issue in the country.
As community leaders, we continued to provide support to
local schools, healthcare, sports and culture
organisations, and other community events. All these
investments will make a lasting impact in the national
economy and lives of people.
It was a great honour to see that NCOC efforts are
recognized at the government level. The Energy Saving and
Green Office award that we received reflects each
employee’s contribution towards making NCOC a successful
and sustainable company. In addition, NCOC ranked second
in the Eurasian Environmental Transparency Rating of Oil &
Gas Companies organized by the World Wildlife Fund. In
only one year, NCOC rose from 4th to 2nd position, an
important recognition of our commitment to lead our
business transparently and environmentally responsibly. We
look forward to achieving even stronger outcomes in the
future by building on the successes of 2019.
The importance of sustainable development is best
described in proverb "We do not inherit the land from our
ancestors... we borrow it from our children". In NCOC, we
believe that sustainable development is no longer a matter
of choice; it is the only viable option. Therefore we
strive for world-class performance in all areas of our
business, from production to projects to environmental to
social and economic areas. This is what we owe to
Kazakhstan, our world, and each other.
Managing Director, NCOC
The North Caspian Project is the first major offshore oil
and gas development in Kazakhstan. It covers three fields:
Kashagan, Kairan, Aktote.
The giant Kashagan field ranks as one of the largest oil
discoveries of the past five decades, with approximately
9-13 billion barrels (1-2 billion tonnes) of recoverable
oil. The Kashagan reservoir lays 80 km offshore the city
of Atyrau in 3-4 meters of water, and more than 4 km deep
The fluid being produced from Kashagan is a mix of
hydrocarbons: light, gaseous components such as
methane, ethane, carbon dioxide, and hydrogen sulfide, and
heavier petroleum components. Kashagan as a reservoir is
characterized by high pressure (more than 700 bar), and a
high concentration of hydrogen sulfide (H2S), making the
Sour gas is treated to remove the H2S, and this process
produces elemental sulfur. The amount of oil we can
produce is limited by the amount of sour gas we can
A positive feature at Kashagan is that sour gas at these
high pressures, when re-injected, can actually enhance oil
recovery. Thus sour gas re-injection is an optimal
solution from both an environmental and production
standpoint, allowing us to increase Kashagan’s oil
recovery ratio while minimizing sulfur production.
The light, gaseous components are separated from the
heavier oil offshore on D-Island and about half of it may
be re-injected under high pressure back into the
reservoir, into the same rock formation from which it is
produced. The remainder of the gas is sent to the Bolashak
Onshore Processing Facility where hydrogen sulfide is
removed from the sour gas. Some of the processed, or
“sweetened,” gas is used for onshore and offshore power
generation, and some is marketed as Sales Gas.
Kashagan Phase 1 is the first development in the North
Caspian Sea PSA license area, costing about US$55 billion.
Commercial production began in 2016.
NCOC has studied multiple development scenarios for Aktote
and Kairan, located in shallow waters approximately 125 km
southeast of Atyrau and 48 km east of NCOC’s D-Island hub.
The two fields are similar to nearby Kashagan in terms of
high sulfur content, high downhole pressures, and
reservoir depths between 3 and 4.5 km. Water depths are
shallower than Kashagan, varying between 0-2 meters.
As with other sour resources, standalone development will
be challenging in the current cost and oil price
environment. Synergistic development of Aktote and Kairan
could enhance the development of Kashagan future phases.
However, more time is required to better understand
Kashagan field performance and use that knowledge to
improve development plans. In 2018, the RoK Government
granted NCOC a five-year extension of time until end of
2022 for additional study of development options.
NCOC is actively studying opportunities for further growth
within the North Caspian Project. It may include expansion
of onshore processing capacity, new offshore islands and
From the start of production at Kashagan in 2016 to
year-end 2019, NCOC has produced 36.6 million tonnes of
stabilized oil. Overall production reliability remains
high and has continued to exceed expectations, allowing
NCOC to keep flaring to a minimum.
In 2019 NCOC safely completed its first major turnaround
of Kashagan offshore and onshore facilities 10 days ahead
During the 2019 Turnaround NCOC modified the offshore gas
injection system. Higher gas reinjection rates resulted in
oil production increase approximately by 30 thousand
barrels per day and actual average oil production rate of
370 thousand barrels per day.
Driven by successful completion of the turnaround and
modification of the gas injection set-up offshore, the
total volume of oil production was 14.13 million tonnes,
7% higher than in the previous year.
In 2019 the amount of exported sulfur reached 1.5 million
tonnes, 14% higher than in the previous year.
Further possible steps include upgrade of the existing raw
gas injection compressors at Kashagan, ramp up of offshore
and onshore capacities, additional drilling and
construction of additional pipelines between the
facilities. These improvements if agreed with the
Government of Kazakhstan and our investors, would enhance
production rate to 450 thousand barrels per day or higher.
Since mid-november 2017 all oil has been exported via the
caspian pipeline consortium’s newly-expanded
Before that time, some volumes have been also exported
northbound through atyrau-samara (connection to russian
There is also other eastbound route via atyrau-alashankou
pipeline, not currently used for transporting kashagan
Sales gas is shipped through a dedicated pipeline to Makat
and then onward via KazTransGas infrastructure. Sulfur is
being shipped by rail.
Most of the sulfur is delivered to the European Sulphur
Terminal at Ust Luga near St. Petersburg, with about one
in six of the trains going to Port Kavkaz on the Black
Sea. Most Kashagan sulfur is headed for the North African
fertilizer market, with significant quantities also being
sold to Turkey, Brazil and the USA, and some cargoes even
reported going to South Africa and China. With the growth
in volumes, Kashagan sulfur has now become an important
player in the global sulfur market.
Each shareholder is independently responsible for
transporting and marketing its own share of production.
The North Caspian Project is developed under the
Production Sharing Agreement in respect of the North
Caspian Sea, signed by the Republic of Kazakhstan and an
international consortium of major oil and gas companies in
Today the Consortium includes seven of the world’s largest
and most experienced energy companies: KazMunaiGas, Eni,
ExxonMobil, Shell, Total, CNPC and Inpex. Each shareholder
is independently responsible for transporting and
marketing its own share of production, and for reporting
and sharing that production with the Government according
to the NCSPSA.
The Project is managed by an Operator, acting on behalf of
the shareholders. Prior to 2015, the North Caspian Project
was operated under a model in which the Operator delegated
certain development and production activities to four
“agent” companies. In late 2014, the shareholders agreed
to further integrate and consolidate management with
nomination of a single Operator – North Caspian Operating
Company N.V. (NCOC)1. The top executive officer
of NCOC is Managing Director.
To ensure compliance of Company’s systems and processes
with the highest international standards, NCOC holds the
The external verification for these awards requires NCOC
to regularly demonstrate not only compliance, but also
continuous improvement in its management systems.
1 Here and elsewhere in this document the
abbreviation NCOC refers only to North Caspian Operating
Company N.V. The term Operator may refer to NCOC, or to
any of the previous Operators under the NCSPSA, as
appropriate in context.
2 API RP 754 is American Petroleum Institute
Recommended Practice 754, which classifies process safety
indicators for the petrochemical and refining industry into
four tiers. Tiers 1 and 2 are considered suitable for public
reporting. (See www.api.org.)
3 The Global Warming Potential multipliers used
to calculate CO₂ equivalence are 21 for CH₄ and 310 for N₂O,
using 100-year time horizons, based on RoK Ministry of
Environmental Protection Order № 280-e(p) of 5 Nov 2010 “Об
утверждении отдельных методик по расчету выбросов парниковых
газов.” Emissions are calculated at the facility level based
on approved methodologies and requirements established by
the RoK Environmental Code and applicable regulation, and
consistent with the 2006 IPCC Guidelines for National
Greenhouse Gas Inventories.
4 РCalculated from indirect electricity
consumption using a demand-side emission factor of 0.921
tCO₂/MWh for Kazakhstan grid (combined margin) in 2019, per
“Методика расчёта коэффициента выбросов для
электроэнергетических систем,” Kazakh Scientific Research
Institute of Ecology and Climate of RoK Ministry of
Environment (2012), based on the EBRD methodology in the
Appendix (Lahmeyer International, 2012), available from the
KazEnergy GHG standards website.
5 The normalization factor for intensity figures
in 2019 is 19.325 million tonnes oil equivalent (TOE). This
is calculated from the total wellhead production of crude
oil, dry gas and natural gas liquids (including flared gas
and gas used for fuel but excluding gas reinjected into the
reservoir) in TOE, according to “Recommended normalization
factors for environmental performance data” in 3rd edition
(2015) of IPIECA “Oil and Gas Industry Guidance on Voluntary
Sustainability Reporting,” p.37. Physical tonnes of crude
oil are converted to TOE by multiplying 1.018 TOE/tonne oil.
Physical volumes of associated gas are converted to TOE by
multiplying 0.932 TOE/000 Sm³. The conversion factors are
specified in Appendix 2 of the Order of the Chairman of the
Statistics Committee of the RoK Ministry of National Economy
№ 160 of 11 August 2016 “Methodology to form fuel-energy
balance and calculation of certain statistics indicators
typical for the energy industry.”
6 1 megawatt-hour (MWh) = 3.6 gigajoules (GJ)
7 Standard cubic meter at 20°С and pressure 1
atm. The format for reporting amounts flared is established
in RoK Government Decree № 1104 of 16 October 2014.
8 Updated from 2017 report of 608 tonnes to
include emissions from evaporation ponds.
9 Employees of NCOC N.V. only. “Management”
corresponds to NCSPSA categories 1 and 2, “technical and
engineering” to NCSPSA categories 3 and 4, and “worker and
support” to NCSPSA category 5.
10 Local goods, works and services are defined
per the Unified Methodology on local content calculations,
defined in the 2010 RoK Law “On Subsurface and Subsurface
Use.” (See Link to definition of local content in Subsoil
Law used by NCOC.)
Narrative reports on NCOC performance are divided into six
key aspects of sustainability, as shown graphically below.
This manifests our concept of sustainability as the
integration of economic, social and environmental
concerns. Each of the aspects has narrative descriptions,
putting results in context with explanation, and
occasionally providing a case study to illustrate progress
toward goals. The topics covered are determined by
“common” reporting requirements of the IPIECA guidelines
(3 rd ed., 2015) and our analysis of issue
materiality. (See the section “Reporting Process” for more
On September 25, 2015, the United Nations General Assembly
adopted the 2030 Agenda for Sustainable Development,
including 17 Sustainable Development Goals (SDGs) aimed at
addressing some of the world’s pressing economic, social
and environmental challenges.
UN member states are expected to use the SDGs to frame
their development plans, and there is recognition that
businesses like NCOC will also play a role in achieving
them. In this report, we highlight some of the ways we
hope to contribute to achieving SDGs in Kazakhstan by
denoting certain sections with an appropriate logo,
according to the legend below.
In 2019 we continued to focus on no harm to people and no
leaks in line with our Goal Zero vision. We are proud to
report that NCOC completed the year without a single Tier
1 or Tier 2 Process Safety Incident.
The continued success of our company is embedded in our
commitment to health and safety and our dedication to
providing a work environment in which everyone is treated
fairly and has an opportunity to maximize their potential.
Our employees and contractors are expected to comply with
our Golden Rules of Safety and to intervene and stop the
work when it is not safe.
Injury prevention is a priority and therefore, we
investigate all incidents and high potential near misses
to learn from them. We strive also to learn from incidents
not our own, sharing learnings to improve safety
performance across industry.
In 2019 NCOC had 24 recordable incidents, three of which
were Lost Time Injuries. The Lost Time Injury Frequency
(LTIF) slightly increased from 0.09 in 2018 to 0.11 in
2019. This compares well to the industry LTIF average of
0.26 as reported in 2018 by the International Oil and Gas
The Total Recordable Injury Rate (TRIR) increased from
0.44 in 2018 to 0.88 in 2019. Approximately one third of
the incidents occurred during the 2019 Turnaround.
Although the rate increased in 2019 following steady and
significant improvements from previous years, it still
compared favorably to the industry TRIR average of 0.99 as
reported in 2018 by IOGP.
In 2019 the number of man-hours worked increased from 22.5
million in 2018 to 27.2 million in 2019. Again, the
increase was due to the Turnaround.
In 2019 we focused on improving the visibility of High
Potential Incidents (HiPos) in our internal reporting and
reviews. The new pyramid emphasizes the internal diamond
to highlight HiPo incidents. This new Diamond Pyramid is
shared with stakeholders. By highlighting 'diamond'
incidents, our senior management is focusing attention on
higher risk areas to reduce the occurrence of incidents
that have the potential to cause a fatality or
Close attention placed to the areas where we have the
highest risk. For NCOC in 2019 these high focus areas
include Road Transport, Dropped Objects and Lifting &
Process Safety is about ensuring we consistently strive
for zero leaks. It is about keeping our hazardous
substances such as oil and gas contained and within the
pipes, tanks and vessels so that we do not harm the
environment or cause a safety incident. Process Safety
starts with proper design of our facilities. We then move
our attention to maintaining, inspecting and operating
those facilities with the upmost of discipline.
Process Safety discipline requires cross-functional
collaboration to define required controls and identify and
maintain barriers that are required to prevent incidents.
NCOC utilizes key performance indicators to drive
attention to needed areas. One of those indicators that
NCOC improved in 2019 is its attention to identification
of small leaks, weeps, and seeps. The goal is to identify
leaks early, when they are small and then ensure those
leaks are corrected before they can cause a safety or
In 2019 NCOC took steps to better communicate process
safety challenges and necessary behaviors to the
workforce. By introducing Process Safety Fundamentals we
were able to ensure our employees and contractors had a
better understanding of risks and barriers. We are working
across our facilities to apply a reflective approach to
learning and encourage employees and contractors to
discuss safety and risk in everyday conversations to
better understand how we can direct individual behaviors
to better prevent unplanned releases from our operations.
We continue to take steps to understand all operating
risks and how multiple risks in areas of the facility
cumulate to increase the overall risk to NCOC. This new
approach, called Cumulative Risk Management, will be the
basis for managing overall risk across our facilities with
the aim of having simpler and safer ways of working.
We measure and report process safety incidents according
to industry standards using a tiered system with Tier 1
incidents being the most significant. The attention and
focus placed on Process Safety has led to an outstanding
year for NCOC in which we completed the year without a
single Tier 1 or Tier 2 incident.
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.
OPF facilities are located in a region with very limited
surface fresh water reserves. Groundwater has high
salinity and cannot be used as a water source.
Due to the lack of own resources of fresh water, water is
supplied from the Volga River in the area of Astrakhan and
transported along the north-eastern coast of the Caspian
Sea through Astrakhan – Mangyshlak pipeline operated by
Main Waterline LLP. Water is supplied under the contract
from Astrakhan – Mangyshlak pipeline to NCOC facilities
for operational needs of OPF and domestic needs of the
camps throughout the year. Bottled water is used at
offshore and onshore facilities for drinking needs of
employees. Water for Atyrau Training Centre and offices
located in the city is supplied from the city water main.
The total volume of water withdrawn during NCOC operations
in 2019 was 1,064 thousand m³. This includes 39 thousand
m³ of desalinated fresh water in 2019.
The return water from the desalination unit in the volume
of 88 thousand m³ is discharged into the sea in accordance
with the special water use permit. The volume of fresh
water consumed by NCOC onshore facilities is 940 thousand
m³ . There is a slight increase in fresh water consumption
as compared to the previous year. This is due to a
scheduled maintenance. Accordingly, the volume of fresh
water consumed per unit of production in 2019 was 55
tonnes of water per thousand equivalent tonnes of oil.
Offshore facilities also need fresh water: about 39 m³
were produced by offshore desalination units in 2019. This
replaced fresh water that would otherwise be sourced from
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 achieve this goal.
In 2019 NCOC treated and recycled about 82 m³ of water for
greenbelt irrigation, dust suppression at onshore
facilities in Mangistau and Atyrau Oblasts and for
domestic use at the offshore facilities. The highest
effect can be achieved by water recycling, i.e. the volume
of water recycling in 2019 was 315,370 m³. As reported
last year, NCOC halved the total amount of water withdrawn
for Bolashak OPF needs from the Astakhan-Mangyshlak
pipeline by recycling water from the Tail Gas Treatment
Unit. In 2019 NCOC continued to pursue plans for
additional wastewater treatment. Completion of the new
facilities, expected in 2022, will further reduce water
intake up to 70% and enhance the quality of water
discharged into evaporation ponds.
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 the approved
National Plan for 2018-2020, and in the 2018-2019 period
NCOC used about 44% of allowed quota
Total direct Greenhouse Gas (GHG) emissions from NCOC
operations in 2019 totaled 3,068 metric tonnes
CO₂-equivalent, including 2,885 tonnes of carbon dioxide
(CO₂), 175 CO₂-equivalent tonnes of methane (CH₄), and 7.9
thousand CO₂-equivalent tonnes of nitrous oxide (N₂O).
This total volume includes emissions from mobile and
There are almost no changes in the absolute values of
emissions since 2017. Thus, the total specific emissions
had reduced by 1.5 times vs 2017.
In 2019, 25 shut-off and control valves were tested for a
leak-proof under the pilot project at onshore operational
sites with 10 valves repaired during the scheduled
As a result of such activity, the avoided volume of GHG
emissions from flaring was 1.6 thousand tonnes of
NCOC production facilities are self-sufficient in
electricity, heat and steam supplies, which significantly
increases the share of direct emissions (Volume 1) of the
Company. Emission sources under the category Energy
Activities have the greatest contribution and make up 70%
of the Company’s total emissions. Indirect emissions
(Volume 2) arise from purchased power for support
facilities such as Bautino base and Atyrau Training
Center. The total indirect GHG emissions from NCOC
operations in 2019 totaled 8,003 metric tonnes
CO₂-equivalent, all carbon dioxide.
Normalized GHG emissions intensity (the proportion of
greenhouse gases emitted per unit of production) in 2019
was 159 CO₂-equivalent tonnes per 1,000 equivalent tonnes
of oil produced. Comparison with other projects is
difficult, due to methodological and baseline differences.
As a rule, an offshore sour oil production project, such
as North Caspian Project, which also has a high content of
carbon dioxide in associated gas, will presumably have
higher specific greenhouse gas emissions than onshore oil
production projects with lower power consumption or sweet
oil production projects operating in a stable mode. The
best way is to use by stakeholders the intensity rates to
compare NCOC performance in different years.
There are various approaches to estimating Other Indirect
(“Volume 3”) emissions. NCOC will report volumes of
produced oil and gas to enable stakeholders to estimate
these emissions generated from NCOC operational cycle
using their preferred methodology.
A turnaround is a complete shutdown of operations for a
short period every two to three years.
In 2019 NCOC successfully completed its first major
turnaround of Kashagan facilities. The success of
turnaround was based on safety, high quality, shortest
possible time, and minimum cost.
During 35 days of full shutdown NCOC implemented
maintenance and safety inspections, and a number of
projects to improve operational safety and competitiveness
in future. These projects include the reboiler project at
the Onshore Processing Facility, well conversion project
offshore, and a large number of small and very crucial
projects. Also, the offshore gas injection system was
modified during the turnaround. This allowed NCOC to
increase gas injection and oil production up to 370
thousand barrels per day.
Given the size of the Company’s offshore and onshore
facilities, it was a challenge to ensure safety of the
operations and the people involved in such operations.
Around 6,000 people, mostly Kazakhstan citizens, were
involved in the shutdown activities at peak.
Turnaround project involved 42 contractors, out of which
32 were local contractors. The share of local Goods, Works
and Services (GWS) reached 57.7%. Main contributors in
Local Content performance during Turnaround were PSN
Kazstroy JSC, ERSAI Caspian Contractor LLP, KTR
EthosEnergy LLP, NefteStroiService LTD, and many others.
For the first time ever in Kazakhstan NCOC used a new
Unmanned Ariel Vehicle (UAV or Drone) during the
Turnaround. UAV called Elios was used to inspect the
refractory lining in the two thermal oxidizer stacks in
Oil and Gas facilities in OPF. Rather than the traditional
scaffolding or rope access, we used UAV and took HD video
and photos all the way to the top of the stack. The use of
drone reduced HSSE exposure and saved costs.
A high profile event designed to assure Medical Emergency
Response preparedness for Turnaround 2019 was conducted on
April 10. NCOC Health department coordinated a large-scale
mass casualty exercise jointly with Atyrau Oblast
Hospital, turnaround medical subcontractors and Atyrau
City Ambulance Station. The aim of the exercise was to
test the communication and coordination between NCOC
Health department, Turnaround medical contractors, Atyrau
Oblast Hospital and Atyrau Ambulance services. In
addition, the exercise enabled a close assessment of
Atyrau Oblast Hospital’s ability to triage and deal with
multiple casualties arriving simultaneously.
More than 50 participants were involved in the event
including doctors, nurses, paramedics, and management, as
well as the media.
Besides the obvious technical improvements that come from
such a drill, it was also an opportunity for Atyrau Oblast
Hospital, Ambulance station and Turnaround medical
contractors to experience firsthand the NCOC values of
leading in Safety & Health. Coaching each other on how to
work safely and working in partnership with the community
was useful for all parties.
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. According to NCOC Contract Management
Policy all contractors are obligated to adhere to our
Health, Safety and Environmental policies in all aspects
of their work with us based on impact of their contracts
with NCOC on health, safety and environment.
One of the crucial business approaches of the Company is
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
General Business Policy on Health, Safety, Security & Environment
Important environmental compliance and protection
programmes include Environmental Impact Assessments,
baseline studies and monitoring, and environmental
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 directly
to the government agencies responsible for environmental
protection, per terms of the North Caspian Sea PSA. These
agencies ensure that the public is appropriately informed.
For example, the Department of Environmental 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
NCOC's environmental protection activities are guided by
an Environmental Protection Plan that is approved annually
by state environmental regulatory agencies. The annual EPP
envisages the following types of projects: environmental
surveys and monitoring of air, water, soil, and
biodiversity; solid and liquid waste management; oil spill
response; planting; and environmental awareness campaigns.
Reports on implementation of the EPP are submitted to the
governmental bodies on a quarterly basis.
NCOC received a “Green Office” award at the
Republican competition among Kazakhstani industrial
The main criteria for competition included:
This award represents tangible achievements and
leadership in the field of energy efficiency, water
savings, renewable energy development, proper waste
management. It demonstrates NCOC commitment to
Environmental specialists of the environmental support
team are present at each Company’s facility (Onshore,
Offshore, Bautino Offshore Supply Base). The key objective
of this environmental team is to cooperate with operations
departments to ensure environmental compliance. This team
closely interacts with NCOC employees and contractors
directly on sites during briefings and daily inspections
(scheduled, instruction-based, or unscheduled) conducted
to verify compliance of the technical condition of
equipment and operations with the requirements to
environment protection and sustainable use of nature
The team is also responsible for a prompt response to
environmental emergencies, technical support in obtaining
emission permits, monitoring of industrial waste
and waste water management, support during monitoring
activities, provision of data and primary environmental
NCOC actively participates in various regional and
international conferences, thus contributing to industry
On 24-25 September, NCOC sponsored the Society of
Petroleum Engineers (SPE) Symposium on Caspian Health,
Safety, Security, Environment and Social Responsibility.
Along with the local and global experts from the
upstream, midstream and downstream sectors, NCOC shared
its best practices, progressive approaches and
innovative applications to enhance HSE performance.
“Green Shelter Belt” is a project approved by Atyrau
Oblast Department for Natural Resources and Nature Use
Regulation involving planting of trees and shrubs around
Bolashak OPF as a buffer zone to absorb emissions.
9,000 trees were planted additionally in the period from
2017 to 2019. Seedlings with closed root system were
delivered from local forest nurseries: common ash,
Siberian pea shrub, broadleaf elm and Caspian willow.
The survival rate has now reached 70%.
Besides, 4,300 meters of plastic pipes were replaced in
2019, and the 9,366 linear meters long fence was built
around the entire project area.
The Caspian Sea as an ecosystem has a high percentage of
rare and endemic species found nowhere else. The North
Caspian Sea is one of the most important stopovers along
the migration routes in Eurasia, important nesting and
mewing grounds for birds large populations and protected
birds species. Geographical position, climatic and
hydrological conditions make the North Caspian Sea a
significant biodiversity centre.
Protection and preservation of this area’s unique
biodiversity is a top sustainability objective.
In view of the specific environmental sensitivity of the
North Caspian and Ural River delta, and Ural-Caspian
unique biodiversity, the North Caspian Project was allowed
to proceed in 1993 under the condition to comply with
Special Environmental Requirements to Performance of
Business and Other Activities in the State Nature Reserve
Zone in the Northern Part of the Caspain Sea. This
environmental regulation was developed by a group of
leading Kazakhstan scientists and international experts
and approved by the Government of the Republic of
Kazakhstan. The document established seasonal restrictions
on operations, requirements to take special actions on
bioresources protection, performance of environmental
monitoring, actions and quarantees in case of hydrocarbons
spills, environmental expert review, etc. A number of
other environmental legislations were developed and
approved which NCOC adheres strictly in its offshore
petroleum operation in order to preserve the biodiversity
of the Ural-Caspian region and the environment of the
North Caspian Sea.
In 2019 NCOC started the work on another update of the
Biodiversity Action Plan (BAP) aimed at minimizing the
potential impact of Company’s operations on the
biodiversity. (More detailed information is given in NCOC
environmental brochure “Environmental Surveys and
Initiatives” on website www.ncoc.kz.)
Similar to the previous years, since 2005, NCOC conducted
winter seal monitoring in 2019
with involvement of Kazakhstani experts and under control
of scientific-research institutes. The monitoring was
conducted from Mangystau-3, Mangystau-4 and Tulpar
icebreakers carrying cargo between Bautino Offshore Supply
Base and Kashagan field with the direct involvement of
experts– seal observers. In 2019, the monitoring took
place in the period from February 1 to February, 28. At
various times five volunteers from different NCOC
departments were also present on board the icebreakers
acting as seal observers and helping the experts in the
In addition to scientific data collection, on-board
observers help the ship captains to avoid seals, in
compliance with the mitigation recommendations developed
by marine mammal experts at the start of the project. This
is complemented with helicopter reconnaissance flights
over the seal concentration areas. The reconnaissance
results are reported directly to the icebreakers, where
captains and seal observers define the safest navigation
route. Recently, the thermal infrared cameras have been
installed on all NCOC ice-breakers. These cameras enable
observers to watch the seals day and night, in blizzard or
fog, at the distance of hundreds meters from the vessel,
which allows bypassing the seal grounds in advance.
Fish studies are regularly performed in offshore project
areas in spring, summer and autumn. Tissue samples of
non-migratory fish indicator species (gobies) are tested
at random for hydrocarbons and heavy metals content.
Sturgeons are the most valuable species in the Caspian
Sea. These species are currently endangered. In 2014 the
Caspian Littoral States agreed to ban the commercial
fishing of sturgeons to restore their population.
In 2019 NCOC continued its environmental management
programme to support local fish populations by releasing
50,000 juveniles (fish youngsters) of sturgeon species to
maintain populations of this valuable relict fish. The
Company plans to continue releasing sturgeon juveniles in
the Ural-Caspian Basin in the following years.
In 2019 at NCOC initiative, the Programme for
Comprehensive Caspian Seal Research within the
jurisdiction of the Republic of Kazakhstan and Russian
Federation was developed. The Programme aims at
protection of environment and key habitats of Caspian
seal as part of activities on conservation of the
Caspian Sea biodiversity.
The Programme has been developed on the basis of the
Convention on the Legal Status of the Caspian Sea and
its implementation will take 5 years (2019-2023)
This Programme covers the main areas and priorities that
have come into focus of zoologists of various countries
studying the Caspian seal:
I. Distribution and structure of the Caspian seal
habitat, population size
II. Welfare of the Caspian seal population;
III. Status of the Caspian seal habitats (habitat
The Programme will allow comparison of the findings of
the Caspian seal studies completed by scientists of
different countries and identify key scientific actions
for conservation of this species. All Caspian seal
research activities under the Programme will be carried
out using only non-invasive methods that do not harm the
animals or the population as a whole.
Interstate studies are performed with involvement of
leading scientific and research organizations of
Kazakhstan and Russia such as Kazakhstani Agency of
Applied Ecology LLP (KAPE), Kazakhstani Fishery Research
and Production Centre, Research and Production Centre of
Microbiology and Virology, Severtsov Institute of
Ecology and Evolution under the Russian Academy of
Science, All-Russian Research Institute of Fishery and
The Programme envisages aerial counts of seal
populations, study of population wealth (assessment of
biochemical, physiological, genetic and serological
parameters) and seals migration (satellite tagging of
Thus, in April of 2019, the performance of multispectral
aerial survey of seal molting grounds on sandbanks in
the Kazakhstan sector of the North Caspian Sea was
tested. The aerial survey was based on the method of
multispectral imaging of marine mammal rookeries:
synchronized infrared and visible spectrum aerial survey
of Caspian seal rookeries.
In November, 9 Caspian seals were caught and tagged in
the area of the North Caspian Sea Channel (Prorva) with
completion of morphometric research was completed.
Demographic structure of the Caspian seal population
(ratio of males to females of different ages) was
studied and genetic material and other samples were
collected in the seal rookeries. Biological samples were
collected to assess the current state of the Caspian
Every year, over 280 species of birds migrate along
flyways from Eurasia and Siberia to Africa and India, with
long stopovers to shelter and rest in the reed beds of the
North Caspian wetlands.
The Operator has conducted annual and regular seasonal
bird studies since 2000: two annual surveys during the
seasonal migrations (in spring and autumn), a survey of
nesting colonies distribution in near-shore areas during
mating season, monitoring of wintering grounds for aquatic
and semi-aquatic birds, and observations in the area of
onshore and offshore operational facilities, and during
summer nesting period.
The birds 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, leading
scientists and ornithology experts of Kazakhstan, and
inspectors from Atyrau Oblast Department of Ecology and
the Oblast Territorial Forestry and Wildlife Inspectorate.
Distribution and number of birds in 2019 largely match
seasonal and behavioral patterns of species: thus, 141,000
birds were counted in spring (with 10-year average values
of 153,000), 378,000 in autumn (with 11-year average
values of 357,000). However, further loss of habitats
suitable for birds is noted along the northern coastline.
This is caused by continuous falling of the sea level and
regular fires, resulting in decrease of the bird numbers
in the Volga and Ural River deltas and their noticeable
increase in the area of the Seal Islands.
North-East Caspian Sea has variable hydrological
conditions. The average water depth in this part of the
sea is slightly above 3 meters, thus, even minor level
changes may lead to major consequences.
NCOC uses a marine fleet at its offshore facilities to
provide supplies to the islands and evacuate personnel
in case of emergency. With critical drop of the water
level, the marine navigation becomes difficult and
performance of further operations is unsafe. This
increases a need to study the causes of the Caspian Sea
NCOC experts from Ice and Metocean Department perform
continuous monitoring of the Caspian Sea level through
instrumental measurements at own hydrometeorological
stations. In addition, a number of scientific studies
and surveys are conducted to simulate and predict the
Caspian Sea level fluctuations.
The North-East Caspian Sea. The data analysis
indicates that the Caspian Sea level is changing quite
quickly. During the last 14 years, the sea level has
significantly decreased. Thus, in 2005 the average level
of the Caspian Sea was −26.95 mBD (BD) and reached
−28.20 mBD in 2019, which is 14 cm below the 2018 level,
primarily due to the low water inflow from Volga River
during the spring flood (70 km3 versus standard 120
km3), and also the increased rate of evaporation from
the surface of the Caspian Sea and low precipitation
directly onto the sea surface during the year.
Kashagan East. It is worth noting that the sea
level in Kashagan field area is slightly different from
the average level of the entire North-East Caspian Sea.
This is due to shallow water level in the region and
predominance of easterly winds causing down surges.
NCOC follows the zero discharge policy: no disposal or
discharges of waste and treated waste water into the
natural surface waters including the Caspian Sea.
NCOC uses lined evaporation ponds as the safest available
method for managing treated industrial water. Treated
wastewater from industrial processes and treated domestic
effluents are discharged via the strainer filters into
evaporation ponds/ gathering ponds for further
The total volume of hydrocarbons discharged with treated
domestic effluents and industrial water into evaporation
ponds was 1.6 tonnes in 2019 . A significant decrease in
hydrocarbon discharge into evaporation ponds versus the
previous year is due to the termination of industrial
waste water discharge into a separate section PLWDA-9.
In 2019 NCOC obtained all permits for discharge of treated
water to evaporation ponds in accordance with
environmental requirements of the Republic of Kazakhstan.
As noted in the section about Fresh Water, NCOC is
planning to start construction of an additional waste
water treatment plant at Bolashak OPF in 2020. This will
maximize our capacity for recycling the water generated by
technical and operational processes.
The primary air emission sources at NCOC facilities
include flaring units, gas turbine units, heating and
hotwater boilers and diesel generators.
The flaring 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 readiness to flaring. The height of the flaring
unit ensures maximum dispersion of combustion products in
the air. Power is supplied to onshore and offshore
facilities by gas turbines units running on associated gas
produced from Kashagan field. The turbines are equipped
with special burners designed to reduce nitrogen oxide
emissions. Boilers produce steam, heat water and provide
heating for buildings. Boilers run on fuel gas, however,
use of diesel fuel is also possible. Diesel generators are
used only for stand-by power generation.
In 2019 the volume of non-GHG air emissions from all NCOC
As compared to 2018, VOC and NOₓ emissions increased due
to higher hydrocarbon production. SOₓ emissions decreased
due to reduced gas flaring during the turnaround.
Air monitoring is an important part of NCOC general
programme for industrial environmental monitoring. It
includes the following several components:
Periodically, under-plume monitoring is conducted, using a
specialized vehicle with air sampling and meteorological
instruments. Mobile (under plume monitoring) station is
designed to take samples under the (gas) plume in order to
identify the footprint of a given industrial emission
source. The sampling point is selected based on the
largest expected concentrations of impurities. Location of
sampling points varies depending on the wind direction at
8 rhumbs. Under plume stations are the points located at
fixed distances from the sources, so under plume
monitoring stations are located within the SPZ at
distances of 4 and 6 km from high-and low-pressure flares
at Bolashak OPF and vary depending on wind direction.
Observations are performed for specific pollutants
characteristic of the emission source. Pollutant
concentrations are measured weekly downwind at the above
distances. The following meteorological parameters are
determined simultaneously with air sampling: wind
direction and speed, air temperature and atmospheric
pressure, weather conditions and the underlying surface.
The Maximum Permissible Emissions Project (MPE) describes
the facility and fixed processing equipment as an air
pollutant source and provides brief description of the
natural and climatic conditions in the area of operations.
Maximum permissible emission rates are calculated for each
emission source and they are binding on NCOC. Measurements
of actual emissions from sources are made instrumentally.
Flue sampling ports with specially equipped platforms are
installed on the stack at every air pollution source (APS)
for a regular monitoring at emission sources. A gas probe
and a Pitot tube immersed into the flue, record
measurement parameters in the instrument’s memory, namely,
nitrogen oxide, sulphur dioxide, carbon monoxide,
aerodynamic properties, such as speed and temperature of
the gas mixture, vacuum in the flue duct and separately
Supported financially and technically by NCOC, 20 stations
for continuous monitoring of the air quality are installed
in Atyrau city and Atyrau oblast. They operate on a 24/7
basis to collect meteodata and measure the content of
pollutants in the air.
4 stations are located along the perimeter of the 7-km
sanitary protection zone of Bolashak OPF; 7 more stations
are installed in close to and remote from Bolashak
settlements including Dossor and Makat; and 9 stations are
located in Atyrau city.
The remote data transfer project has been implemented for
the purpose of centralized data collection from the
stations. It allows transfer of measurements data on 24/7
basis from every AQMS to the central computer in NCOC
office, where such data is analyzed and stored.
Simultaneously, the specialists of Atyrau Branch
“KazHydroMet” and Atyrau Oblast Department for Natural
Resources and Nature Use Regulation are provided with
remote access to the data received from the Company’s
stations and an opportunity for online monitoring of the
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
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
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, multi-year studies and computer models, government
review and approvals, and finally, recent operating
experience that confirms the models. As in the previous
years, on-going monitoring in 2019 shows consistently that
short-term H₂S peaks (from 1 to 20 minutes in duration)
remain far more likely in Atyrau than near Bolashak OPF.
No cases of high- (VZ) or extremely-high H₂S pollution
(EVZ) were registered around Bolashak in 2019. This is
confirmed by continuous monitoring performed by RGP
Kazhydromet. (See the Report “Informational Bulletin on
the Condition of the Environment of the Republic of
Kazakhstan, 2019” www.kazhydromet.kz, where the summarized
data from all twenty NCOC air monitoring stations is
NCOC uses innovative approaches and technologies to
support the oil spill response capacities.
Computer-generated models and GIS (Geographic
Information System) based tools such as sensitivity maps
help to develop response plans and are a fundamental
part of the Consortium's response planning systems. By
predicting the oil spill trajectory in the environment
the computer – generated models help the OSR Management
Team to ensure preparedness and response activities.
Sensitivity maps define the environmentally sensitive
areas on the basis of historical environmental
monitoring data; this allows for priority setting to
preserve important habitat and minimize impact on
A wide range of innovative technologies such as remote
aerial observation with the use of GPS-GIS handheld
units, remote sensing methods, and Leak Detection System
(LDS) are applied to monitoring, mapping and detecting
oil spill as well as to define oil film thickness in
both open water and ice conditions.
Kashagan offshore pipelines from D-Island to Bolashak
Onshore Processing Facility are under continuous
monitoring with LDS. The LDS is a software-based system
with continuous input and update of process parameters
(i.e. flowrate, temperature, pressure). The LDS software
is operated in conjunction with a fluid flow model for a
given pipeline. Potential leaks are detected and flagged
when discrepancies between calculated and measured
values fall outside the defined range. Alarm signals
will be displayed on the operator’s panels in the
Central Control Room where the operational processes are
monitored. The pipelines are fitted with pressure gauges
that can detect fluctuations in pressure.
The LDS system is designed in such a way that all
critical components are redundant. Failure of a single
component will not result in the total loss of
monitoring, data transfer, or operator interfaces.
In 2019 there were 0 hydrocarbon spills in excess of 1
barrel reaching the environment from NCOC operations
(total volume: 0 barrels of oil-equivalent).
NCOC places first priority on prevention of oil spills. No
matter how confident we are in efficiency of their
prevention, NCOC remains always prepared to respond
quickly and fully to incidents were they to occur.
In 2019 Bautino Base and Atyrau hosted training courses
for NCOC employees in accordance with IMO level 2 and IMO
level 3 International Standards. The training was
delivered by the company “Oil Spill Response Limited”
(OSRL) company that provides additional support in case of
Tier 3 oil spill.
As part of the Net Environmental Benefit Analysis (NEBA)
project implementation in Kazakhstan, NCOC organized a
workshop jointly with OSPRI and Shell under the aegis of
the Ministry of Environment, Geology and Natural
Resources, the Ministry of Energy of the Republic of
Kazakhstan, titled "Practical application and
decision-making on selection of oil spill response methods
based on the NEBA”. The workshop objectives included the
The main conclusion made on the basis of NEBA application
is that it is crucial to ensure the oil collection while
it is still in the sea and has not reached shallow water
areas, reed beds and sensitive shorelines, where any
actions to protect environment and eliminate consequences
of the spill would be low efficient. This conclusion is
consistent with oil spill response practice around the
world. In order to clean the oil while it is on the water
surface and at a minimum distance from the spill source,
it is expedient to combine efforts of response teams,
governmental agencies and communities in order to lose no
time on decision-making in the event of a spill.
In 2019 the Company updated and supplemented the Response
Plan to Oil Contaminated Wildlife as part of continuous
improvement of the process management quality. The updated
Plan has been incorporated into the current oil spill
response process used by the Company including
international practice and legislation requirements
applicable to oil contaminated wildlife operations.
The Plan describes actions to be taken if oil contaminated
animals are found, namely, search and catch of animals,
their stabilization prior to rehabilitation process;
rehabilitation of animals at a special rehabilitation
centre at Damba (the rehabilitation centre is fitted with
additional equipment for rehabilitation of 500 birds and
100 seals), and release of animals into the environment
free from oil pollution.
Currently the procurement process is ongoing to purchase
the equipment for the camps to stabilize animals and for
rehabilitation centre at NCOSRB (Damba). The Plan
envisages possibilities to stabilize the animals offshore
(sea barges with a shallow draft) and establishment of
animals’ rehabilitation centre at Bautino Base.
Due to a large scope of works on animals saving it is
expected to involve and train volunteers from the local
communities. They will be provided with a special training
on safety and animals saving.
The total volume of waste generated by the Company in 2019
was 13,726 tonnes, including 9,092 tonnes of amber-level
and green-level waste and 4,634 tonnes of non-hazardous
The volume of waste generated in 2019 vs 2018 had
increased due to the scheduled turnaround at NCOC offshore
and onshore facilities.
NCOC’s Waste Management System is aimed to reduce or fully
eliminate waste generation at the source or during the
process through a proper planning of Company’s operations.
Waste management is performed throughout the life cycle of
the waste starting from its generation to final disposal.
Waste segregation (sorting) is an important process step.
As hazardous and non-hazardous wastes shall not be handled
together, they shall be collected in separate containers
and leak-proof drums.
Food and medical wastes are classified as hazardous.
TeamTec dual-chamber incinerators are installed at
offshore facilities (floatels) to meet sanitary
requirements and reduce their hazardous properties. A
compactor is used for paper and cardboard waste pressing
to reduce wastes.
According to the National Standards of the Republic of
Kazakhstan, a system of separate collection of waste oil
by types, batteries, mercury-containing waste and vehicle
tires is introduced at all facilities of the Company.
All wastes generated at the Company’s facilities are
transferred to a dedicated company for further processing
To improve the staff awareness about the changes in waste
management legislation, awareness-raising sessions were
held during the Marine Contractor Forum, which greatly
improved waste segregation at the place of their
generation at offshore facilities. Video slides were
presented on TV screens in all offices, as well as through
the Company’s information system.
The Company has fulfilled environmental law requirements
for establishing Landfill Decommissioning Funds. The funds
are created to accumulate funds intended for reclamation
and environmental impact monitoring after the closure of
Existing Hazardous Waste Certificates have been updated
due to the generation of new types of waste during the
turnaround. Updated Hazardous Waste Certificates have been
uploaded into the Single Environmental Information System
of the Ministry of Ecology, Geology and Natural Resources
of the Republic of Kazakhstan.
Specific and effective activity of natural radionuclides
in liquid and solid wastes (sludge and industrial waste
water) generated during the turnaround was measured. The
results demonstrate that the content of radionuclides in
the Company’s industrial waste does not exceed the
permissible levels set by RoK Hygienic Standards and
In its waste management strategy, the Company is committed
to comply with both international and national standards.
NCOC implements a comprehensive environmental monitoring
programme to collect offshore data and analyze the
chemical composition of seawater and bottom sediments, and
to study fish, benthos and plankton populations.
Offshore impact monitoring covers the entire license area
of Kashagan, Aktote, Kairan fields, the northern offshore
section of the main pipeline and Tupkaragan Bay. The total
number of monitoring stations in 2019 was 239, including 9
long-term observation stations used as baseline stations.
All these stations monitor chemical and physical
properties of seawater, bottom sediments, (zoo- and phyto
plankton) and zoobenthos organisms, aquatic plants,
ichthyofauna and air quality.
Currently, the industrial environmental control includes
annual offshore studies in all climatic seasons (except
for the ice-covered area in winter) and onshore studies
around the Company’s facilities in Atyrau and Mangystau
Oblasts. The scope of these studies covers flora and faun,
soil, bottom sediment and air quality, in order to better
understand the quality of flora and fauna in the Caspian
region. More detailed information on environmental studies
is available in NCOC brochure “Environmental Surveys and
In 2019-2020, the Company plans to optimize the monitoring
system in the area of the Company’s onshore facilities in
Atyrau and Mangystau Oblasts and to complete a large scale
upgrade of the monitoring well network including
maintenance and abandonment of existing monitoring wells
and drilling of new wells.
The purpose of work is to ensure effective monitoring of
groundwater, immediate response in case of any
contamination reveal at the Company’s facilities and
compliance with the requirements of environmental
Development of a mathematical (computer) hydrodynamic
model of groundwater distribution in the area of NCOC
facilities in Atyrau Oblast.
Field work was completed in 2019, office processing is
scheduled for 2020 to study the hydrodynamic state of
groundwater in the area of NCOC facilities in Atyrau
Oblast based on mathematical (computer) modelling of
distribution of upper aquifer of groundwater.
The main purpose for development of the mathematical model
is to provide reliable, and relevant information on
hydrodynamic conditions and hydrochemical processes
occurring in upper aquifers.
The resulting mathematical model of hydrodynamic
conditions of groundwater can be used in the long term for
further monitoring and study of groundwater in the area of
the Company’s facilities, as well as for the
optimization/expansion of the network of observation water
NCOC ranked 2nd in the 2019 Environmental Transparency
Rating among 14 biggest Oil & Gas companies operating in
Kazakhstan. This is the second year for NCOC being
involved in the rating which is launched by World
Wildlife Fund (WWF), CREON Group (a leading Russian
advisory and investment group), United Nations
Environment Programme (UNEP) with the assistance of the
Republic of Kazakhstan government.
The objective of the programme is to facilitate rational
use of hydrocarbon resources, protect environment, and
promote socially responsible business in Kazakhstan.
Ranking demonstrates our corporate transparency in terms
of environmental disclosure and promoting collaboration
with stakeholders including the public, local
communities and our regulators. This also is a testament
to our environmental management system which has a key
objective of minimizing our activities’ footprint on the
environment through effective management of
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. Each programme will require 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 2019 totaled 37.63 million gigajoules (GJ).
Of this amount, 0.11million GJ was imported (purchased).
Normalized energy intensity (energy use per unit of
production) in 2019 was 1.94 GJ per oil-equivalent tonne
of production, which was improved for about 5% in
comparison with 2018.
NCOC was recognized for the great contribution to the
development of energy saving, improvement of energy
efficiency and promotion of energy saving behavior among
The RoK Vice Minister of Industry and Infrastructure
Development Amaniyaz Yerzhanov awarded NCOC Deputy
Managing Director Yermek Marabayev with a ministerial
award at the Second International Energy Saving Forum
held in Nur-Sultan on November 29.
One of the actions identified during the energy audit,
namely, use of renewable energy, was implemented in
2019. It included installation of a solar vacuum tube
collector unit to heat water in the canteen at Bautino
Offshore Supply Base. NCOC decided to continue further
study and analysis of potential use and integration of
renewable energy sources at the Company’s facilities.
In 2019 NCOC completed the mandatory energy audit at all
its facilities. The energy audit resulted in follow-up
actions that are included in the Energy Saving and Energy
Efficiency Improvement Plan for further implementation.
At the end of 2019, NCOC started preparations for
introduction of Energy Management System to ensure a more
systematic and comprehensive approach to energy efficiency
and creation of an energy-saving culture at all levels of
the Company. The actions taken for energy-saving resulted
in decrease of power consumption at Bautino Base by 17% in
2019 versus 2018.
Kashagan Phase 1 Project was originally designed to avoid
routine flaring, i.e. the “routine” burning of excessive
gas volumes because an oil and gas project has no other
economic way to dispose it in the course of oil
production. As a matter of fact, at Phase 1 of Kashagan
development, all produced gas is re-injected, used as fuel
Flaring is, however, needed in the course of operations as
the safest and most effective way to deal with gas that
for temporary technical reasons could not be processed
(for example, commissioning activities, operations, small
leakages through the valve 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. NCOC is working continuously to reduce the
volumes of technologically unavoidable gas flaring by
improving methods of control at onshore and offshore
facilities. Every year since the project inception, the
volumes of gas for flaring have been reduced and
The quantity of hydrocarbon gas flared from NCOC
operations in 2019 was 37% of permitted volumes, and
totaled 57.7 million Sm3 (standard cubic meters). Flaring
was down by about 9% in 2019 compared to the previous
year, even with oil production increase by 7%. Operational
reliability has been better than expected, and this
improved process stability during commissioning allowed us
to keep flaring below 1% of total produced gas volumes.
The Unmanned Aerial Vehicle (UAV) or drones provide many
benefits in complex operations including a safer work
environment, more accurate data and cost savings. Their
ability to get close to infrastructure allows efficient
data collection. In turn, the digital data enables to
make better, data-driven decisions.
The trial of Unnamed Aerial Vehicle (UAV) in 2017 has
demonstrated its efficiency to replace different means
of surveillance: helicopter, land transport and man on
foot. Currently NCOC’s Operations Logistics team uses
drones in various activities:
Kashagan Phase 1 will have a production life of decades
and its shareholders are expected to contribute billions
of dollars in direct revenue to the Republic of Kazakhstan
in terms of taxes and share of production.
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$730 million was spent on local content in goods, works,
and services in 2019, equivalent to 52.4% of total
Mangystau and Atyrau oblasts also benefit directly from
social and infrastructure related projects funded by NCOC.
The total value of these projects exceeded US$700 million
since the beginning of Kashagan Phase 1 Project.
These and other economic and social benefits are described
in more detail in the following section.
On June 3, 2019, Kassym-Jomart Tokayev, the President of
the Republic of Kazakhstan, visited NCOC Bolashak OPF as
part of his working visit to Atyrau.
NCOC Managing Director updated the President on the
plans and the latest progress under the Project. NCOC
employees told the President about OPF processes with
emphasis on safety and environment protection actions at
The President highly appreciated achievements of the
Company and its employees and wished them success and
On July 17, Askar Mamin, Prime Minister of the Republic
of Kazakhstan, visited Bolashak Onshore Processing
Facility and had an opportunity to watch the ongoing
operations directly from Bolashak CCB. The Prime
Minister highly appreciated the progress and efforts
aimed at local content development under the North
On September 27, Mohammed Sanusi Barkindo, Secretary
General of the Organization of Petroleum Exporting
Countries (OPEC) visited NCOC facilities. At present,
NCOC is the only oil and gas company visited by Mohammed
Sanusi Barkindo in Kazakhstan. The interest of OPEC
Secretary General was driven by uniqueness of Kashagan
Project, its engineering, environmental and logistic
challenges and the ways these challenges were overcome.
In 2019 the North Caspian Project spent USD730 million on
local goods, works and services, equivalent to 52.4% of
total expenditures, a new record for NCOC in percentage
terms. This adds up to a year-end total of more than
US$14.8 billion spent on local goods, works and services
since 2004¹¹. These and other facts speak to the depth of
NCOC’s commitment to the use of local content.
NCOC Local Content Policy is based on the fundamentals of
the Production Sharing Agreement in respect of the North
Caspian Sea (NCSPSA), applicable legislation, and NCOC
Mission, Vision, and Values, as well as its business goals
Development of local vendors is a priority for NCOC. 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
Since 2006, about 1,400 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
From 2006 to 2019, 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 2019, 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 tendered under the North Caspian Project.
From 2006 to 2019 the Operator provided more than 3,800
employees of local companies with specialized professional
training in the most in-demand craft skills, including
Working in Confined Spaces, Industrial Welding Safety,
Electronic Systems and Assembly, Working at Height, Mobile
Crane Operations, etc.
NCOC successfully continued a Roadshow campaign
initiated in 2018 to improve collaboration between NCOC
and regional Akimats in local content development. In
2019 NCOC signed four Memorandums of Cooperation on
local content development aiming at further development
of local staff skills and increase of local companies’
capacities. On January 18, NCOC signed Memorandum of
Cooperation on Local Content Development Issues with
Atyrau Oblast Akimat. Also, NCOC issued a purchase order
for supply of 120-150 Frack Tanks for Turnaround
activities in 2019 to ZhigerMunaiService LLP and issued
a purchase order for supply of high pressure nitrogen
vessel to AtyrauNefteMash LLP
As a result of the market analysis under various
commodities of goods and services and technical gap
analysis, site visits have been conducted at 56
prioritized companies across Kazakhstan (Shymkent,
Ust-Kamenogorsk, Semey, Shetpe, Aktau, Karaganda,
Atyrau, Aktobe, Pavlodar and Almaty).
Under the North Caspian Sea PSA, NCOC allocates a budget
each year for development of social infrastructure
projects. In 2019 this budget amounted to USD 76.8
million. The funds for construction of schools,
kindergartens, hospitals, sport facilities, as well as
utilities such as roads, electric power and water supply
lines, and other infrastructure for the local communities
are split equally between Atyrau and Mangystau oblasts,
the areas of the main operations under the North Caspian
In the period from 1998 to 2019, 214 social infrastructure
projects have been completed.
Thus, cumulative spend on social infrastructure projects
has reached US$697,6 million.
Social infrastructure projects are generally proposed by
the Oblast Akimats (governments). Proposals are reviewed
by NCOC and the PSA Authority to ensure they 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
NCOC completed a large-scale construction of the
Culture Centre named after Abish Kekilbayev and the
monument to the writer as the part of its Social and
Infrastructure Projects. The complex consists of
three separate buildings – a general library, a
local museum and administrative building. According
to the authors of the project, this Cultural Centre
can be attended by to two thousand guests. The
Centre was opened by the RoK President Kassym-Jomart
Tokayev on October 10
In August 2019, NCOC completed a unique social
project in Aktau – the “Rocky Trail”. The project
consists of 3 elements. The first is the pedestrian
walkway stretching from the 4th micro-district to
1st micro-district. The second is landscaping of the
Victory Park, and the third is landscaping of the
embankment along the 14th and 15th microdistricts.
The picturesque rocky trail is 1.5 km long, with 24
sky decks and rest areas along the route, including
a large cave and three modular piers. The pedestrian
zone along the massive rocks is made of a
wood-polymer composite material specially designed
for the region’s aggressive environment. The Rocky
Trail naturally blends in the landscape of the rocky
Caspian Sea coastline.
The idea to construct a Rocky Trail was proposed by
Mangystau Akimat. With budget of about 4 bln tenge
and 136 workers involved, the project was
implemented by the local company Nursat LLP. This
unique project stands out among other NCOC social
projects. The Rocky Trail has become an
architectural landmark of Aktau, and will attract
tourists and visitors to Aktau for years to come.
NCOC completed two large projects for gasification
of 10 settlements in Azgir Zone of Kurmangazy
District. These projects include over 365 km of main
and inter-settlement high-pressure gas pipelines and
57 km medium and low-pressure domestic gas
pipelines. The automatic gas distribution station
"Blue Flame-3000" was also built as part of the
project. Moreover, NCOC built 28 Gas Pressure
Reduction Units that enable gas supply to the
Currently, the natural gas is supplied to 1,239
houses in the remote settlements that were deprived
of this resource before. The newly commissioned
network is fed from the existing Makat-North
Caucasus main gas pipeline.
Since 1998, the Consortium implemented 31
gasification projects with overall 1,130 km gas
pipelines built in Atyrau and Mangystau Oblasts.
NCOC received Zhomart Zhurek award as the Best
Company in 2019 at the “Largesse Heart” Maecenas
Forum in Aktau.
The awarding ceremony was held on November 14, 2019
at the Assembly of the People of Kazakhstan with
participation of Akim of Mangystau Oblast.
The award recognized NCOC Sponsorship & Donation
Programmes implemented in 2019 in Mangystau Oblast.
Through its Sponsorship and Donations programme, NCOC
responds directly to the needs and requests of local
communities. US$1.5 million is split equally each year
between Atyrau and Mangystau oblasts for community
sponsorships and donations. The Sponsorships and Donation
programme focuses on five main areas of support for local
communities: healthcare, education, sports, culture and
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
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
53 projects were completed in 2019 (31 in Atyrau Oblast
and 22 in Mangystau Oblast). In total, US$20.5 million has
been spent since 1998.
In addition, up to US$300,000 has been allocated every
year since 2006 for summer camp for 200 underprivileged
children and orphans from Atyrau and Mangystau Oblasts. In
2019 NCOC covered the costs of travel, camp and
cultural-educational activities for these children at
“Baldauren” centre in Burabai.
NCOC continues to support summer school project launched
in 2018 jointly with Kazakhstan-British Technical
University (KBTU) in Almaty. In 2019, during 21 days 100
teens from underprivileged families of Makat and
Tupkaragan Districts studied the English language and the
basics of programming. The classes were held in the
laboratories of KBTU faculties of oil and gas and IT,
business school and the Marine Academy
In 2019 as part of a traditional “Road to School” campaign
NCOC supported 200 children from underprivileged families
from Atyrau city and Makat District of Atyrau Oblast, and
200 children from Aktau city and Tupkaragan District of
Mangystau Oblast. Future first-graders received backpacks
with all necessary school supplies and stationery. Since
the beginning of this campaign NCOC has supported almost
3,000 school children.
NCOC sponsored the installation of bactericidal air
recirculators and drinking water fountains in 27
schools in Atyrau. This initiative was held under
the World Health Organizations Programme “Healthy
School”. The benefits of the installed equipment are
NCOC is proud to call Atyrau its home. Nearly 3,000 NCOC
employees, and thousands more contractors and suppliers
who work for Kashagan Phase 1 Project, are residents of
communities in Atyrau and Mangystau Oblasts.
NCOC is headquartered in Atyrau, Kazakhstan, close to the
North Caspian Project’s resources with its facilities
located in Atyrau and Mangystau Oblasts. We strive to be
an employer of choice and a respected member of the local
community. 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 role in achievement of this goal.
Through its Sponsorship and Donations programme, NCOC
positions itself as a socially responsible company that
supports local communities.
In August, NCOC sponsored a one week Environmental Summer
School close to Aktau, where highschool students were
engaged in theoretical classes and practical environmental
studies to promote the ideas of sustainable development of
the Caspian Oblast. The Summer School is traditionally
held in the period of annual celebration of the “Caspian
Day” in August.
During the year, we shared the information with the local
communities on a regular basis and discussed theirs
concerns regarding the North Caspian Project.
On March 15 and April 26, NCOC met with representatives of
Non-Governmental Organizations (NGO) and state bodies of
Atyrau and Mangystau Oblasts to present social projects
implemented in Atyrau and Mangystau Oblasts and share the
experience in engagement with local community as part of
Corporate Social Responsibility.
On May 24, NCOC organized an environmental “round table”
with NGOs, representatives of governmental agencies and
the local community to present the projects on
"Comprehensive study of the Caspian seal population in
cooperation with scientists from Kazakhstan and Russia"
and "Comprehensive study of atmospheric air quality in
Atyrau and nearby settlements". NCOC ecologists reported
on the progress under these projects and plans for further
On October 9, NCOC organized an awareness tour for 20
journalists from national and local media, including
Khabar, 24 KZ, Caspian News and Atyrau TV channels and
Esquire, Kursiv, Oil and Gas Kazakhstan, Prikaspiyskaya
The objective of this tour was to improve journalists’
awareness about the North Caspian Project, Kashagan field,
local content development, NCOC role and other issues,
thus establishing a pool of qualified journalists who
could be involved in NCOC communication campaigns.
This Sustainability Report has become a new and effective
forum for engagement with the local community. At the
beginning of 2019 when we were preparing the 2018 Report
we met with the External Advisory Board, representing the
combined opinions of environmental and social NGOs from
Atyrau and Mangystau Oblasts, to receive their comments
and recommendations. In April 2019, we presented the 2018
Report to the public and answered questions at three
special meetings in Atyrau and Aktau, moderated by Shynar
Izteleuova, Director of the Zhayik-Caspian Aarhus Center.
NCOC has in place a comprehensive programme for
communication with the stakeholders and engagement with
local media on pressing issues. In order to support the
local companies in finding new economic opportunities
related to the North Caspian Project, we provide the
information by using various ways from general awareness
seminars about the Project and participation in industry
conferences, to specialized vendor audits and dedicated
training courses (For more information please see the
Local Content section). Any citizen can raise concerns or
report potential non-compliance with our values and
principles (including anonymously) to NCOC Ethics and
Compliance officer, or use the Compliance Hotline opened
in 2017 (For more information please see the Business
NCOC Women’s Network (NWN) was established in 2015,
with a vision to develop professional skills of NCOC
women and men through formal and informal networking
and professional exchange opportunities, maintaining
a healthy work and family integration.
NWN memberships is open to all NCOC and contractor
staff. The NCOC Women’s Network provides a platform
Since 2015 NWN supported a number of programmes and
events, such as mentoring programme, personal
development sessions, family events, guest talks,
charity initiatives and joint events with local
Network has gained a solid reputation and support
among NCOC Senior Leadership Team through working
towards improving our activities and defining
long-term objectives to help business.
In 2019 NCOC employees actively participated in nationwide
environmental campaigns “TazaQazaqstan” (“Clean
Kazakhstan”) and “Birge Jasyl Qazaqstan” (“Going Green
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 18,000 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 Operator has spent in total about
US$289 million on job skills and professional training to
build local capacity for the North Caspian project.
In 2019 116 students completed internships at NCOC. The
programme provides an opportunity for local students to
work in the international oil and gas company, and to get
hands-on experience with the most modern equipment in the
In 2019 13 NCOC employees were assigned for International
Development Assignment Programme. The programme was
launched in 2018 to provide an opportunity for NCOC
employees to work overseas in our shareholders’ companies
for up to two year assignments in order to enhance their
skills, expand the existing knowledge and prepare for
future roles in the Company.
NCOC established a Scholarship programme for students in
accordance with the NCSPSA. The Operator has sponsored
3,420 students from Kazakhstan to study in educational
institutions inside and outside the Republic of Kazakhstan
with a monetary value over US$8.3 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 the disciplines related to the petroleum
industry, including training courses at universities,
colleges or other educational institutions. In 2019-2020
academic year, NCOC has sponsored 420 students in 42
Article XXVII of the NCSPSA specifies the overall targets
in terms of manning levels of Kazakhstan citizens employed
in carrying out Petroleum Operations. In 2019 Kashagan
Phase 1 Project has significantly exceeded these targets,
Overall at the end of 2019, 91% out of over three thousand
employees of NCOC are Kazakhstan citizens, and 95% out of
ten thousand people engaged in the North Caspian project
are Kazakhstan citizens.
NCOC goes well beyond legal requirements of the Labor 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, Oilman’s Day bonus and
Vacation Wellness Support 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
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 7.8 on Job Skills
Training and Knowledge Transfer).
In 2019 NCOC hired 25 Kazakhstan university graduates of
technical specialties background.
NCOC’s aspiration is to attract future leaders and retain
high performers, particularly in business-critical areas
within NCOC, and to lead to increased performance,
stronger engagement within the workforce, driven by strong
relationships between the employee and supervisor.
In 2019 NCOC launched an engagement survey in order to
understand the current overall employee engagement and
check the health of the organizational capability in NCOC.
It serves as a baseline for developing the NCOC Engagement
Action Plan to identify what the organization will do with
any key findings to drive engagement over the next 24
The survey will be conducted every two years and focused
on the following 8 key organizational drivers:
NCOC does not tolerate 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
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.
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
NCOC has been working for many years to promote respect
for human rights within our organization. Our approach
consists of several core elements, including:
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 and Code of Conduct in all
aspects of their work with us.
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 security risks management includes the support from
Government Security Forces and private security providers.
Local RoK State Security Forces support NCOC Security
department to deal with all instances of site invasion
including crowd control, large demonstrations or riot.
NCOC Security department ensures compliance with Voluntary
Principles on Security and Human Rights (VPSHR) and
requires its security contractors to abide by these
Principles. VPSHR are included into the contract with
In 2019 NCOC continued to further embed the VPSHR and
implemented trainings to increase awareness at operation
and corporate level.
NCOC Security department organized a number of trainings
and workshops for security contractor. Moreover, we
conduct regular internal self-assurance reviews to ensure
Security contractor’s compliance with “Ethical conduct and
NCOC’s General Business Principles apply to all our
business affairs and describe the behavior expected of
every staff member of NCOC, including direct-hire
Kazakhstan citizens, secondees, and contract staff. In
addition, all NCOC staff are required to adhere to a Code
of Conduct, which instructs them how to apply the General
Business Principles in line with our core values. It
provides practical guidance on how to comply with laws and
regulations and how to relate to customers, communities
and colleagues. Staff communications and monitoring
programs are designed and implemented to assure
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 “due
diligence” background checks before contracts are signed.
NCOC’s contracts also include the requirement for
contractors and suppliers to conduct their business
activities with integrity and high ethical business
standards. After risk screening, some companies may also
be asked to institute mandatory training or special
contractual conditions to ensure that their business
practices align fully with our expectations.
No one at NCOC may instruct staff to take actions that
violate the law or contradict our General Business
Principles or Code of Conduct. If an employee observes
such an action or instruction, he or she is required to
refer the situation in confidence to a supervisor, to the
NCOC Ethics & Compliance Officer, or to the Compliance
Hotline for further investigation and possible
disciplinary action. The Compliance Hotline is a 3rd party
operated website (
http://www.ncoc.deloitte-hotline.com), with e-mail
address (firstname.lastname@example.org) and phone number (8 800 080 15 65
) that allows anyone to report suspected violations of
law, General Business Principles and Code of Conduct
including on an anonymous basis.
NCOC staff, vendors, suppliers, contractors or anyone else
can raise concerns or report possible non-compliance 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, NCOC’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
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
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 non-compliance 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.
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
NCOC does not make political contributions of any kind.
11 Local goods, works and services are defined
per Unified Methodology (2010) on local content
calculations outlined in the RoK Law “On Subsoil and
Subsoil Use.” (See Link to Subsoil Act definitions of
local content used by NCOC.) Prior to 2010 NCOC used local
content calculation methods in the NCSPSA.
12 The US Foreign Corrupt Practices Act (FCPA)
and the UK Anti-Bribery Act are two foreign laws that
could apply to companies or citizens of those countries,
even if their activities take place in Kazakhstan.
EPC-4 topside module is another ambitious NCOC project
delivered by a local company in 2019. A 1,500 tonnes
module is the largest structure manufactured by KCOI-MSS
Consortium. It is also the first project of this level
fabricated at “Temir At” yard located in Aktau. Safety,
engineering, environmental and logistical challenges
make it one of the complex and unique projects.
The base scope of work covered the engineering design
and procurement of materials, fabrication and
construction, mechanical completion, pre-commissioning,
extended pre-commissioning, offloading and sea fastening
onto barge for transportation.
New technologies were integrated into the design and
construction of the module. Production Manifold Topside
Module installed at EPC-4 Island connects six production
wells. The oil production commenced on November 4 and
currently reached 204,008 tonnes of oil.
In 2019 two local companies successfully completed a
two-year American Petroleum Institute (API) Standard
Introduction project under NCOC Local Content
Development Programme targeted at supporting
Yermek Marabayev, NCOC Deputy Managing Director,
presented these prestigious API certificates to the
local companies – КаzАrmatura Plant LLP and
Karlskrona LC AB Plant.
In 2019 NCOC conducted 126 courses to train over one
thousand Kazakhstani technical specialists. Such training
allows local companies identified by NCOC Local Content
Department to improve their skills and meet requirements
of international standards, codes and strict industry
norms applied widely today.
NCOC opened a STEM laboratory in the secondary school
No.23 named after A.Baitursynov in Atyrau.
STEM (Science, Technology, Engineering, and Math) means
key academic disciplines that help students to transform
theoretical knowledge into practical skills. The project’s
goal is to raise children’s interest in science and
technology, help them apply scientific and technical
knowledge in real life, and develop critical thinking
skills. The educational programme is divided into four
areas – engineering, programming, robotics and 3D
modelling. The laboratory includes special machine
stations, robots, computers, design kits and many other
equipment. The Company is confident that such skills will
help children develop new ideas and encourage to achieve
higherlevel competences given the demands of the modern
For learning the “Engineering” discipline, children are
provided with safe tools that are commonly used by
engineers in construction of real-life facilities. Kids
wear gloves and safety goggles and perform work under the
teacher’s mandatory supervision. Under the “Programming”
discipline, students learn the basics of three languages:
Scratch, C++ and Python. Robotics is taught in two modules
– Lego Robotics and Arduino. Once mastered this stage,
students proceed to 3D modelling. Here they are introduced
to the whole new world of Autodesk and SolidWorks. First,
children learn the software, then practice their skills on
a 3D simulator and only then print what they have
modelled. Besides the laboratory provision, two school
teachers have been trained for STEM laboratory during two
NCOC donated two inclusive education classrooms to Atyrau
Secondary School No. 24 and Atyrau Gymnasium School No. 3.
The classrooms are designed for special children with
learning difficulties (psychoverbal development delay or
mental retardation), who can receive additional assistance
according to their needs by studying in a secondary school
for neurotypical children. Such classrooms help children
to adapt to the social environment, provide equal access
to education for all students based on their specific
educational needs and individual capabilities.
An individual curriculum is developed for children by
experts based on recommendations of the
In addition, the needs and deficiencies of each child
identified during individual testing are taken into
account. Each class has 8 to 12 children. One inclusion
support class teacher is assigned to every student.
The Company provided all necessary modern equipment for
two classrooms covering four zones: a general training
zone, an individual training zone, a sensory relief zone
and a teacher’s zone.
Hippotherapy (therapeutic horse riding) is recognized by
experts as a unique method of rehabilitation and
development of children with a wide range of disorders.
The positive effect of interaction with horses was
observed among children with musculoskeletal, mental,
psychoemotional disorders. Given the beneficial effect of
hippotherapy on children and adults, NCOC supported the
initiative of the Public Fund "Atyrau is a Small Country"
and sponsored training of 8 specialists of the Fund by
international experts from Georgia. The training was
delivered by Khatuna Saganelidze, M.D., President of the
International School for Hippotherapy, VicePresident of
the Georgian Federation of Hippotherapy, a rehabilitation
expert at the Georgian Ministry of Healthcare and Lana
Bokuchava, M.D., Head of the School for Medicine at the
New Vision University in Tbilisi.
The trainees included representatives of the Public Fund
"Atyrau is a Small Country" from 5 districts of Atyrau
Oblast – Makat, Zhylyoi, Kurmangazy, Makhambet Districts
and the city of Atyrau. During three weeks they studied
the unique methods of hippotherapy rehabilitation. The
main objective of the project was to introduce and develop
academic hippotherapy (therapeutic horse riding) in Atyrau
Oblast. Expected deliverables include creation of a
scientific centre for hippotherapy in Atyrau, a
hippotherapist training centre or a rehabilitation centre
for people in need of high-quality treatment.
In 2019 NCOC supported 2 projects of professional advanced
NCOC supported professional advanced training of 6
specialists from Atyrau. Advanced training of speech
pathologists was arranged by Corporate Fund “University
Medical Centre” in Nur-Sultan city. The professional
advanced training in Speech Pathology and Defectology was
conducted by National Child Rehabilitation Centre with
involvement of the Federal State Independent Institution
for Higher Professional Education "Kazan (Volga) State
University". Upon completion, they received a state
diploma of further higher education.
This training is aimed at improving the proficiency of
teachers and their practical skills, acquiring new
theoretical knowledge and ways of working with Montessori
materials at early stages of child development. The
training involved teachers, speech pathologists from each
district of Atyrau Oblast to ensure effective and
high-quality work with special children across the whole
region. One-month training was held by leading Montessori
experts of the National Children’s Rehabilitation Centre,
namely Head of the Social and Educational Rehabilitation
Department Gulshat Sultanova, Lead Expert of the
Methodological and Medical Statistics Department Toyzhan
Dzhanieva, Montessori teacher Sandigul Sharipova. Upon
completion, all attendees received a certificate of
advanced training in Montessori education for children
from 8 months to 6 years old.
It is crucial to develop specialists working with children
with disabilities because such children’s development
highly depends on the professionalism of teachers.
In total, the Company trained 28 specialists from 8
districts of Atyrau Oblast.
Launched at the end of 2018, a three-year Distance English
Learning Project in partnership with the British Council
successfully completed its first year. 750 schoolchildren
and students, 30 local teachers and internationally
qualified teachers are involved in the project. Special
equipment for online and videoconference learning was
installed in seven schools in Atyrau, one school in Makat
and in Atyrau State University named after Kh.
Based on results of the first year, three school teachers
won a two-week training in Scotland, United Kingdom, where
they could practice with native speakers.
For over 10 years, NCOC has been closely cooperating
with Zhaiyk-Caspian Aarhus Atyrau Centre (ZCAC) serving
as a bridge between the local community, business and
The Centre was created in 2009 after signing the
Memorandum of Cooperation between the RoK Government,
Environmental Forum of national NGOs, OSCE Centre and
Atyrau Oblast Akimat.
One of the ZCAC’s key objectives was to set up a
dialogue platform to discuss pressing environmental
NCOC has been interested in the idea of a dialogue
platform practically since the moment of ZCAC
establishment. The Company considered appropriate and
timely engagement with the local community. This
dialogue platform was a new undertaking, therefore,
nobody knew how the platform should work.
NCOC made a significant contribution to test different
tools of communication with the local community. This
allowed adding to experience and professionalism of
Zhaiyk-Caspian Aarhus Centre’s specialists.
One of innovations successfully tested by NCOC is
consulting meetings with NGO representatives prior to
public hearings and meetings with the community. During
such consulting meetings the Company reports on
follow-up actions taken in response to recommendations
and proposals made at public hearings.
Furthermore, NCOC has influenced positively the
evolvement of ZCAC as a social enterprise. The Centre's
success and recognition was the 1st National Award
Ozgeris Ustasy for its contribution to the development
of social entrepreneurship in the nomination "Best
social enterprise in the sphere of ecology".
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
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.
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.
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.
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
The Report has been prepared in accordance with the IPIECA
standards. This table shows indicators in this
Sustainability Report from IPIECA’s 2015 Guidance.
1. ABOUT THE NORTH CASPIAN PROJECT
3. REPORT STRUCTURE
CASE STUDY – TURNAROUND
5. ENVIRONMENTAL STEWARDSHIP
CASE STUDY - AMBITIOUS PROJECT DELIVERED BY LOCAL COMPANY
CASE STUDY - INVESTMENT IN EDUCATION
CASE STUDY - COOPERATION FOR THE COMMON GOALS
9. REPORTING PROCESS