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Press releases

NCOC Performance Results For 2022

Atyrau, 27 February 2023: North Caspian Operating Company N.V. (NCOC), the operator of the North Caspian project (NCP), reported its 2022 performance results.

Production operations

In 2022, NCOC’s oil production reached 12.7 mln tons, natural gas – 7.9 bln m³, and sulphur production – 991 thousand tons.

In 2022 NCOC completed its second turnaround (TA), largest in its history with full shutdown of Kashagan production facilities. TA was performed ahead of schedule without major safety incidents with 1.3 mln man-hours.

More than 10,000 people, mostly the RoK citizens, were involved in the safe performance of these major activities.

As part of the preparation to TA, NCOC together with the Atyrau Oblast Hospital and the Atyrau Medical Emergency Station, conducted a large-scale medical exercise to assess the readiness of oblast healthcare services. The event involved over 70 doctors, nurses, as well as the staff of contracting organizations providing medical services. The timeliness and efficiency of medical care at all stages was assessed, including transportation from NCOC operational sites to Atyrau Oblast Hospital.

Several integrity and production enhancement projects were executed during the 2022 TA. These included upgrades to the offshore gas injection compressors. Another significant milestone was a successful completion of critical 30” amine line project onshore. The objective was to implement a permanent solution by modifying existing facility related to 30” feed line of amine regeneration columns.

There was production slowdown due to slug catcher incident in August 2022. After repair works production was resumed on 4 November 2022.

Protecting people and environment

Personal safety and asset integrity are key priorities for NCOC where a ‘goal zero’ approach is employed.

For NCOC, the development of the offshore field is not only a matter of hydrocarbon production but also an opportunity to contribute to the environmental studies of the North Caspian Sea under large-scale marine ecosystem protection activities, including monitoring of flora and fauna as well as study of offshore and onshore biodiversity for the purpose of its conservation using best practices, supporting environmental programs and raising public awareness about biodiversity in the region.

Various environmental activities were successfully completed in 2022:

1. Comprehensive studies of the Caspian seal population: a multispectral survey of seal rookeries in the breeding and moulting period has been carried out using a specially equipped aircraft. Based on the most recent data obtained about seals, total population by 2022 is 311 thousand specimens
2. Survey of the current status of the Caspian seal population by tagging using satellite telemetry and analysis of biological material. Forty (40) satellite radio beacons have been installed on seals in order to study their migration routes
3. Study of the impact of icebreaking vessels’ winter navigation on the Caspian seal breeding.
4. Special surveys to create the natural reserve for the Caspian seals in the Kazakhstan sector of the Caspian Sea
5. Ornithological studies of wintering areas, spring migration and summer survey of nesting birds
6. Surveys of flora and fauna, and the soil in the area of the onshore facilities in Atyrau and Mangistau oblasts
7. Offshore environmental survey and impact monitoring in the NCP Contract Area and other water basins in the North-East Caspian Sea
8. Additional marine monitoring of sea water quality and biota status along the dredging works area with subsequent provision of the results to the public. Monitoring results demonstrate stable recovery of biota (benthos and plankton)
9. Environmental monitoring of the current state of all environmental parameters offshore and along the sea coast as part of the study to develop a comprehensive sensitivity map of the North Caspian Sea
10. Monitoring of ground and surface waters to study the impact of the onshore industrial infrastructure operation on the groundwater condition.

NCOC annually implements a project aimed at preserving the sturgeon population of Zhaiyk-Caspian basin by releasing of juveniles. In 2022, NCOC, using the production facilities of the Ural-Atyrau sturgeon hatchery, released 400,000 artificially grown sturgeon juveniles into the Zhaiyk River.

As part of a public awareness campaign for biodiversity conservation, NCOC’s ecologists provide data on biodiversity, publish scientific information, make video films, support environmental events, and engage with schoolchildren and students on the subject of environmental protection.

Demonstrating openness to the public, NCOC held a number of round tables and public hearings on important environmental topics. Joint discussions with non-governmental organizations’ representatives helped highlight the positive results of company’s activities in the areas of its operations and identify issues that require more focus and improvement.

Decarbonization

NCOC’s aim is to contribute to global efforts in tackling climate change. Current NCOC’s GHG reduction strategy is focused on limiting GHG emissions intensity of own operations by 15% during Phase 1 of Kashagan oilfield development by 2030 vs 2019 level.  

To achieve the set target, NCOC’s efforts in 2022 were focused on:

• maintaining operational reliability
• kicking off methane leak detection and repair program (LDAR) at onshore production facilities
• progressing feasibility studies to integrate use of renewable energy sources (RES), waste heat recovery (WHR) and other alternates to reduce NCOC’s carbon emissions
• continuous improvement of GHG emissions monitoring and energy management.

People at NCOC

Behind the company’s achievements there is a hard work of all NCOC and contractor staff. Their professionalism and efforts contributed to development of new engineering solutions to ramp-up and maintain production level at the Kashagan field under the challenging circumstances.

In 2022, 95% of around 3,000 NCOC employees and 96% of around 9,000 people involved in the NCP are citizens of the RoK. NCOC has significantly exceeded its nationalization targets with 90% of the managerial positions filled by national personnel. Moreover, 31 positions held by expatriate roles were nationalized during 2022.

Local content

In 2022 NCOC continued growing local content in its procurement of local goods, works and services, which amounted to USD 748 mln or 59% of the total costs.

As the largest project in Kazakhstan, involving direct foreign investments, the NCP has a powerful multiplier effect on the Republic’s economy by providing opportunities to local businesses. In 2022, NCOC signed a contract for supply of reboiler pipe bundles with AtyrauNefteMash LLP and an agreement for Nutrient treatment services for OPF evaporation ponds with Centre for Bioenergy Research LLP.

NCOC and PetrolValves Kazakhstan LLP are finalizing a framework cooperation agreement for the potential purchase of the products manufactured in Kazakhstan to be used in the production activities of the NCP.

As part of the Local Content Development Program, NCOC conducted three (3) energy and three (3) environmental audits for local companies. Moreover, seven (7) local companies received ISO certification, and two (2) companies are in the process of API certification.

As part of the engagement with local enterprises, NCOC conducted two “Pre-qualification process” and one “HSSE general awareness” seminar for over sixty (60) local companies.

Social projects and community engagement

Social wellbeing of the communities where NCOC’s operates is one of top priorities for NCOC and its shareholders. NCOC continuously works on extending sustainable support to the communities nearby its operations via its social programmes.

In December 2022 NCOC received the Grand Prix of the annual nationwide Paryz contest from the RoK President Kassym-Jomart Tokayev as the most socially responsible company among large-scale enterprises. The golden statue of the contest is awarded to the nominees with the highest achievements in undertaking activities and implementing the principles of corporate, social and environmental responsibility. This award recognizes NCOC’s contribution to improving the welfare of the local communities through successful implementation of social and infrastructure projects (SIP) and Sponsorship and Donation (S&D) programs.

As part of the NCSPSA, NCOC delivers SIPs and community-based projects. In 2022, the number of SIPs reached 226 for the total amount of USD 863 mln. Currently implementation of 5 SIPs in Mangistau and Atyrau oblasts is in process. During 2022 NCOC delivered 23 community-based projects aimed at supporting environmental, educational and healthcare projects initiated by locally based organisations. Since 1998, the Company has implemented 1,473 S&D projects in Atyrau and Mangystau oblasts for a total of USD 26 mln.

Recognizing that public respect and confidence are earned through good performance, open communication and community involvement, NCOC regularly engages with local communities to address their concerns with NCOC operations. Over the course of 2022 NCOC conducted ten (10) community engagement events, thirteen (13) public hearings and six (6) round tables on a range of environmental and social issues.

As NCOC Managing Director Olivier Lazare noted: "2022 was an exceptional yet a challenging and turbulent year. For our company, as for the rest of the world, it has been extraordinary and unique in more ways than one, but we have confidently passed this tough stress test. During this year we delivered a major turnaround, learned how to work under new and ever-changing conditions demonstrating high level of resilience and our team commitment to achieving our company targets. We explored new operational areas, developed new engineering solutions in order to maintain production levels at the unique Kashagan field under very challenging circumstances.

I thank all my colleagues, our partners and stakeholders, project shareholders and the Government of the Republic of Kazakhstan for their commitment to our common cause, their trust and support. Together we persevered and made sure that our strategy aimed at maintaining and expanding safe production, protecting our people and environment while focusing on growing our people’s capabilities in accordance with the highest global standards remains our steady prospect for the coming decades.”