TENGIZCHEVROIL CORPORATE RESPONSIBILITY REPORT

Transcription

1 TENGIZCHEVROIL CORPORATE RESPONSIBILITY REPORT

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3 ABOUT OUR REPORTING This report covers 2013 and 2014 and is our third biannual report. Our first report was published in Between reports, we will update our Corporate Responsibility activities on our public website. Please visit the Corporate Responsibility (CR) section of for updates and more details. What is Corporate Responsibility? Corporate Responsibility is defined by governments, businesses, non-governmental organizations and communities in many different ways. The evolving concept has as many names as there are definitions; designations such as corporate citizenship, sustainable development, business responsibility, social responsibility, the triple bottom line, earning the license to operate and many more. The purpose of this report is to share with you, Tengizchevroil s (TCO) stakeholders, our company s definition of CR and to share our progress toward excellence. Tengizchevroil will continue to report on its efforts and activities in CR on our website. We welcome your comments on Corporate Responsibility. Please share your thoughts about the topic and stay up to date on our efforts at our website. TABLE OF CONTENTS A message from our Leadership 4 Tengizchevroil Overview 6 Tengizchevroil and the Environment Contribution to Kazakhstan s economy Strategic Workforce Development Community Investment

4 4 CORPORATE RESPONSIBILITY REPORT A MESSAGE FROM OUR LEADERSHIP Dear Readers, Tim Miller General Director Anuarbek Jakiyev Deputy General Director TCO defines Corporate Responsibility more broadly than most Kazakhstani companies. At TCO, CR is not just what we give back to our communities or how we treat our employees. CR includes our ethics and the integrity that guides our interactions with each other and with our stakeholders. CR is our environmental performance and our substantial contribution to the economy of Kazakhstan. It is how we collaborate as employees and with Government and local communities. Corporate Responsibility is a fundamental part of our company and our commitment to Kazakhstan. This report presents an overview of how that commitment guides everything we do. TCO has worked hard to continuously strengthen our CR efforts. We are proud to share these results with you. TCO s mission, vision and core values are the foundation for our accomplishments and leadership in Corporate Responsibility. Core values are defined in the TCO Way and through our Strategic Intents. At TCO, we measure success in CR in the following areas: Corporate Responsibility and Governance Excellence in Operational Performance as it relates to Health, Environment and Safety Strategic Workforce Development Community Investment and Engagement

5 A MESSAGE FROM OUR LEADERSHIP 5 In this report, you will read about our ongoing improvements in all of these areas. We continue to strengthen our industry-leading governance standards and we have made excellent progress in minimizing our environmental footprint through investments in operational excellence and in workforce training and development. We are a dedicated and leading investor in the Atyrau region where we are headquartered and where many of our employees and their families live and work. Additionally, we value our partnership with the Atyrau Oblast Akimat that is focused on improving the community in which we operate. Tengizchevroil is proud of the progress we have made over the past 22 years. Looking ahead, we will strive to remain one of the leading Kazakhstani companies in CR as we work and grow for the benefit of Kazakhstan and its people. This report continues a formal dialogue about Corporate Responsibility between Tengizchevroil and Kazakhstan. We pledge to progress that dialogue through future reports, our corporate website and most of all, our actions in the years to come. Best Regards, Tim Miller Anuarbek Jakiyev

6 6 CORPORATE RESPONSIBILITY REPORT TENGIZCHEVROIL OVERVIEW Tengizchevroil LLP is the largest Kazakhstani enterprise that explores and develops super giant Tengiz oilfield in Atyrau region. TCO PARTNERS Chevron 50% MILESTONES Tengiz field was discovered in Western Kazakhstan Production of first Tengiz oil started ExxonMobil 25% KazMunayGaz 20% LukArco 5%

7 OVERVIEW 7 Republic of Kazakhstan and Chevron Corporation established Tengizchevroil Joint Venture Second Generation Plant and Sour Gas Injection Unit were commissioned Routine flaring of associated gas was eliminated Highest crude production in TCO history THE FIELD The 2,500 sq.km (1,600 sq.mi) project license area includes the Tengiz field and a smaller, but sizable, Korolev field. Total recoverable oil at Tengiz and Korolev fields is from 750 million to 1.1 billion tonnes (6 to 9 billion barrels). Estimated oil in place in Tengiz field is 3 billion tonnes (26 billion barrels). At a world class size of 180 million tonnes (1.5 billion barrels), Korolev is one-sixth the size of Tengiz. Tengiz field is the world s deepest developed super giant oil field with the top of the reservoir at about 4,000 meters (13,000 feet). Tengiz reservoir is 19 kilometers (12 miles) wide by 21 kilometers (13 miles) long, the oil column measures an incredible one mile thick. The reservoir area is so large that one would have to run nearly two marathons to cover the entire distance around it.

8 8 CORPORATE RESPONSIBILITY REPORT

9 THE TCO WAY 9 THE TCO WAY The TCO Way sums up who we are, what we do, what we believe, and our vision for the future. It is a unifying framework for our goals, values, strategies, and initiatives. Our values define a culture that can sustain superior business performance. At the heart of The TCO Way is our mission and vision. Mission Our mission is to create superior value for the Republic of Kazakhstan and Atyrau Oblast, our employees and shareholders. Vision To be the safest, most efficient and profitable oil and gas enterprise in the world. Values Integrity, Trust, Diversity, Ingenuity, Partnership, High Performance and Protecting People and the Environment Strategic Intents Be the Leader in Safety and Environmental Performance Invest in Our Workforce to Achieve Our Mission and Vision Be the Most Respected Company in Kazakhstan Achieve Superior Operational Performance

10 10 CORPORATE RESPONSIBILITY REPORT STRIVING FOR EXCELLENCE Operational Excellence Excellence starts with Operational Excellence (OE). The business of extracting and delivering energy has a direct and positive influence on the lives of people as well as the development of communities and nations. Tengizchevroil takes seriously its responsibility to produce and deliver energy products in a safe and environmentally responsible way. TCO has continuously improved safety and environmental performance over our history. We have done so through significant monetary investment, technology development and implementation and through our dedication to operational excellence. Tengizchevroil strives for Operational Excellence in all areas of our business. The TCO Way helps us define the spirit in which we work and our Operational Excellence Management System (OEMS) guides us as to how exactly we will maintain world-class standards. OEMS is a standard company-wide approach designed to systematically manage everything from safety, health and the environment, to reliability and efficiency. OEMS enables TCO to steward safety, health and environmental efforts and to continuously improve the reliability and efficiency of our operations. Driven by leadership, it provides a system for adopting best practices and standards, to help ensure that our company attains world-class performance and delivers sustained value. Using OEMS, we effectively integrate OE objectives, plans, processes and behaviors into our daily operations to protect people and the environment today and in the future. OEMS is critical for helping TCO to continuously improve our safety record, environmental performance, operational reliability and ability to respond to incidents. Supporting our workforce to learn new safety-related processes and behaviors is also critical for TCO to continuously improve our safety culture. Processes and programs such as TCO s Behavior Based Safety program and Job Hazard Analysis process have been instrumental in establishing a work environment where employees are continuously planning and discussing safe work with their colleagues and safely returning home after each workday. TCO Elements of Operational Excellence Security of Personnel and Assets 1 Provide a physical and cyber security environment in which business operations may be successfully conducted Facilities Design and Construction Design and construct facilities to prevent injury, illness and incidents and to operate reliably and efficiently and in an environmentally sound manner. Safe Operations Operate and maintain facilities to prevent injuries, illness and incidents Management of Change Manage both permanent and temporary changes to prevent incidents Reliability and Efficiency Reliability Operate and maintain wells and facilities to ensure asset integrity and prevent incidents. Efficiency Maximize efficiency of operations and conserve natural resources

11 OPERATIONAL EXCELLENCE Third-Party Services Systematically improve third-party service performance through conformance to Operational Excellence Environmental Stewardship Strive to continuously improve environmental performance and reduce impacts from our operations Product Stewardship Manage potential health, environmental, safety (HES) and integrity risks of our products throughout a product s life cycle Incident Investigation Investigate and identify root causes of incidents to reduce or eliminate systemic causes and to prevent future incidents Community and Stakeholder Engagement Reach out to the community and the workforce to engage in open dialogue to build trust and long-term positive relationships. Emergency Management Prevention is the first priority, but be prepared to respond immediately and effectively to all emergencies involving Tengizchevroil wholly owned or operated assets. For company products or interests such as common carriers, chartered vessels and facilities operated by others, be prepared to monitor the response and, if warranted, take appropriate actions. Compliance Assurance Verify conformance with OE requirements in applicable company policy and government laws and regulations. Train the workforce regarding their OE-related responsibilities. Legislative and Regulatory Advocacy Work ethically and constructively to influence proposed laws and regulations, and debate on emerging issues. WORKING SAFE MILLION hours THOUSAND workers Tengizchevroil continues to have industry-leading safety results. In , more than 20,000 people worked for a total of 115 million hours with only 14 injuries which required a day away from work. While this statistic is world-class performance, TCO strives for zero workplace injuries and is continuously working to improve in this area.

12 12 CORPORATE RESPONSIBILITY REPORT PERFORMANCE FIGURES CRUDE PRODUCTION MLN. TONNES DIRECT PAYMENTS TO REPUBLIC OF KAZAKHSTAN US DOLLARS BILLION since 1993 Kazakhstani employees salaries and local content Profit distributions to Kazakhstani shareholder Taxes and Royalties BILLION BILLION

13 PERFORMANCE FIGURES 13 SULFUR PRODUCTION AND SALES MLN. TONNES Production Sales SULFUR INVENTORY AT TENGIZ MLN. TONNES

14 14 CORPORATE RESPONSIBILITY REPORT FUTURE GROWTH PROJECT TCO is developing another major expansion for Tengiz that will produce significant numbers of jobs and large-scale use of Kazakhstani goods and services. The Future Growth Project (FGP) is based on the highly-successful Sour Gas Injection-Second Generation Project (SGI-SGP) expansion project. FGP would increase crude oil production capacity by approximately 12 million tonnes per year, raising TCO s total production to about 38 million tonnes per year. While FGP would expand production, the associated Wellhead Pressure Management Project (WPMP) is essential to keep the existing Tengiz plants at full current production, by using a central pressure boost facility to raise the incoming inlet pressure at the plants. TCO has completed Front-End Engineering and Design (FEED) on both WPMP and FGP. The execution basis for the FGP facility is a modularized concept with preassemblies and modules to be built in Kazakhstan and overseas yards and then transported to Tengiz for assembly. FGP Sour Gas Injection Facility + 12 mln. tonnes increase in crude production About 20,000 jobs at the peak of construction FGP Plant 800 new permanent jobs

15 FUTURE GROWTH PROJECT 15 Significant opportunities for Kazakhstani business TCO spent on Kazakhstani goods and services in BILIION US DOLLARS FGP-WPMP TCO continues its legacy of strong Kazakhstani Content (KC) and creation of quality jobs for Kazakhstanis. TCO has spent over $2.4 billion on Kazakhstani goods and services in 2014, including approximately $321 million for FGP-WPMP. A team of KC specialists are deployed across the project to identify and develop viable, sustainable opportunities for large-scale use of Kazakhstani employment, goods and services. TCO employs Kazakhstani businesses in design and early engineering of FGP-WPMP. Front-end-engineering-and-design (FEED) contractor Kazakhstan Project Joint Venture (KPJV) Ltd., which includes Kazakhstan Institute of oil and gas (KING) and KazGiproNefteTrans LLP (KGNT), was formed to increase legacy KC. TCO plans to help develop national fabrication capacity, and capability in modular fabrication by attracting a major international fabricator to Kazakhstan for transfer of skills to the national workforce, and by maximizing potential national fabrication tonnages. Other FGP-WPMP advances in KC include: Establishing work processes to enable Kazakhstani suppliers to participate in the project; Supplier Qualification processes developed to identify potential suppliers/contractors, identify gaps in supplier capability, and recommend improvements; Promote the training of Kazakhstan s skilled construction workforce; Develop lists of materials and equipment with potential for new KC opportunities; and Ongoing meetings with representatives of Kazakhstani companies to maintain up-to-the-minute intelligence and data on RoK supplier market.

16 16 FUTURE GROWTH PROJECT Tengizchevroil has studied the labor market in Kazakhstan to ensure that FGP-WPMP will utilize as many skilled Kazakhstani workers as are available. TCO s expansion will quickly create high-quality jobs for the design and engineering phase of the project. Overall FGP-WPMP would require thousands of workers during construction and about 20,000 jobs at the peak of construction. About 800 new permanent jobs will be created to operate the new facilities. A multiplier effect from services and materials sourced in Kazakhstan is expected to support up to tens of thousands of jobs across the economy of the Republic. Training programs will be established in many disciplines, specifically: the management of projects; engineering; fabrication; and construction. The project will also train people in the international standards for construction and craft skills. Due to the need for a large temporary workforce, contractors will be used. TCO AWARDS 2013 Company of the year in petroleum industry Korgan National industrial contest Laureate of Corporate Social Responsibility award at the 8th KAZENERGY Eurasian Forum TCO Newsletter was announced as the best regional corporate newsletter by the ENERGY TRIBUNE Company of the year in petroleum industry Korgan National industrial contest For significant contribution to Kazakhstan Economy s growth awarded by Expert Kazakhstan Rating Agency

17 TENGIZCHEVROIL AND THE ENVIRONMENT

18 18 CORPORATE RESPONSIBILITY REPORT CONTINUED ENVIRONMENTAL IMPROVEMENT Our results demonstrate our commitment to continuous improvement in environmental protection. Since 2000, TCO has invested $3 billion on projects to minimize environmental impact related to Tengiz operations. This investment resulted in significant improvement to TCO s environmental protection performance. TCO SPENT ON ENVIRONMENTAL PROTECTION ACTIVITIES IN % 87.6% Conservation and Rational Use of Water Resources 3.4% 1.7% Air Protection MILLION US DOLLARS 2% 2.6% Conservation of Land, Flora and Fauna 1% 2,7% Waste Management MILLION US DOLLARS 4.3% 5.4% Research and Awareness As part of our overall environmental management plan, TCO initiated a series of major capital projects that ultimately helped to eliminate continuous flaring and to reduce overall flared volumes by 91 percent. TCO continues to invest in numerous projects and programs to improve existing operations by reducing associated emissions or increasing energy efficiency. Through this investment we have been able to improve reliability as well as significantly reduce emissions, flaring and spills.

19 CONTINUED ENVIRONMENTAL IMPROVEMENT 19 Continued Emissions Improvement Tengizchevroil has a systematic, comprehensive approach to protecting air quality that includes record-keeping, system controls and the reduction of hazardous substance emissions. TCO rigorously complies with legislative requirements of the Republic of Kazakhstan. Through the use of state-of-the art technologies, TCO is able to continuously reduce air emissions while increasing oil production. Emissions per tonne of oil produced have declined from 8.3 kilogram per tonne in 2000 to 2.25 kilograms per tonne in During the same period, production increased from 10.5 million tonnes to 26.7 million tonnes. Thus, over the same period overall emissions were reduced by 73%, while increasing crude production by 154%. Regular reduction of emissions is a result of continuous adherence to TCO s Environmental Protection Strategy, which includes implementation of the following projects: Gas Pipeline Capacity Increase (2002); New Commercial Gas Pipeline (2005); Replacement of Flare Tips (2007); Integrated oil projects (2008); Gas Utilization Project (2009); Acid Gas Flaring Project (2012); Reid Vapor /True Pressure Upgrade Project (2013); Project on increase of SGI Facilities productivity and reliability (2013); and the Project on reduction of CO emissions at KTL (2013). Flaring Reduction Flaring reduction has become an important global topic over the last few decades as the world moves to lower air emissions. Kazakhstan and TCO partner companies, Chevron and ExxonMobil, are members of the Global Gas Flaring Reduction Initiative (GGFR). The GGFR was launched by the World Bank at the Johannesburg Summit for Sustainable Development in When TCO assumed control of the Tengiz Field in 1993, the field s ongoing operations entailed the routine flaring of natural gas, as did operations in many other oil and gas fields around the world. Routine flaring allows oil production to occur in situations where there is no available alternative to utilize the natural gas produced in association with oil. To reduce flaring, TCO had to make changes to existing operations and major facilities, while minimizing production disruption. By the end of 2009, TCO had eliminated the practice of routine flaring.

20 20 CORPORATE RESPONSIBILITY REPORT WASTE MANAGEMENT Adherence to Republic of Kazakhstan legislative requirements and international standards of waste management form the basis of the TCO s Waste Minimization System. Waste reduction is the priority with reuse and recycling initiatives used to further reduce TCO s impact on the environment. Waste Reduction TCO s waste prevention efforts are designed to reduce the amount of waste material generated. Through improved inventory planning, waste formation forecasting and a host of other methods, TCO seeks to prevent waste from occurring. A detailed knowledge of how waste has been generated allows us to improve our performance in this area. Waste Reuse Through development and implementation of the Waste Management Program TCO supported local recycling companies, which helped to achieve positive results through bioremediation and thermal treatment of oil sludge and soil; biotreatment of drill cuttings; recycling of tires, cardboard, electronic waste and plastic waste. Types of waste sent to third parties for recycling in 2014 Metal Tires Electronics Plastic Wood Batteries Oil 10,215 tonnes 155 tonnes 63 tonnes 92 tonnes 673 tonnes 125 tonnes 1,404 tonnes Soil Other* 867 tonnes 18,694 tonnes * tank bottom oil sludge; concrete waste; reusable containers, solid mineral residual salt and biological sludge.

21 WASTE MANAGEMENT 21 Waste Recycling and Hazardous Waste Processing The handling and processing of hazardous waste receives high priority at Tengizchevroil. It is critical that this waste is safely moved to processing facilities that are specifically designed for safe disposal. TCO uses contractors for these purposes. Contractor selection is made in compliance with TCO s contracting standards as well as our own waste management standards and Republic of Kazakhstan waste handling regulations. TCO has implemented a paper waste collection and processing project. The segregation and packing of cardboard waste is completed by TCO and it is then delivered for processing to a third party. As part of the project, TCO not only segregates and collects cardboard and paper waste, we have also implemented responsible use policies and approaches that reduce the use of paper in the company Waste disposal Disposal areas are specially equipped to ensure the efficient and effective handling and storage of waste. To prevent seepage of filtered material to ground waters the landfills are equipped with a watertight screen, drain system and filtrate collection pool. Hazardous waste is tested for radiation and, if it contains radioactive material, is specially segregated in compliance with the Republic of Kazakhstan Environmental Code. Reduction of wastes for disposal in landfills Over the last three years volume of processed and recycled wastes considerably increased in respect to disposed ones. More specifically, in 2011 landfilled wastes totaled 72 %, in review of %. A sustainable tendency to increase processed waste is now being demonstrated. Due to the increase in the number of companies that provide waste handling services in Kazakhstan, as well as an improvement in their capabilities, TCO has been able to increase the amount and types of waste sent for processing. In 2012, TCO sent 9 types of waste to contractors. In 2014, we now send 21 types for processing. To further improve our waste processing and recycling, TCO is developing a sorting system for mixed wastes as well as the creation of a wooden waste crushing unit as part of the Complex Waste Management facility.

22 22 CORPORATE RESPONSIBILITY REPORT ENVIRONMENTAL MONITORING SYSTEM To ensure that our operations continue to have minimum impact on the environment, TCO operates a system of continuous environmental monitoring. This system gathers, systematizes and analyses information related to the sources and factors of impact, tolerance of alterations and environmental condition as a whole. Thus, all components of the natural environment air, water and soil are monitored in order to prevent harm to the environment and our workforce and to protect the health of the population in the communities nearest our facility (the closest community is 95 kilometers away). Our integrated environmental monitoring program is carried out by relevant TCO departments and licensed contractors. TCO s environmental monitoring program was reviewed and approved by a number of State bodies including the Ministry of Environmental Protection and the Atyrau Oblast Sanitary Epidemiological Station. TCO Environmental Monitoring Facilities Environmental monitoring stations (EMS) Fixed air monitoring stations On-the-route air monitoring stations Under-the-plume monitoring air sampling locations at 1, 2, 4, 6, 8, 10, 16 km from the plant Sanitary Protection Zone boundary Groundwater monitoring wells Regular soil sample points Waste landfills Industrial facilities Treated industrial wastewater injection sites Floodwall Field boundaries

23 ENVIRONMENTAL MONITORING SYSTEM 23 Air monitoring There are 12 automated stationary environmental air monitoring stations within (9) and outside (3) the Sanitary Protection Zone (SPZ) around Tengiz as well as fixed monitoring stations in one of the closest residential area, Zhana Karaton (a 95 kilometer distance from Tengiz), and the closest industrial rotational village (20 kilometers away from our operations). These air monitoring stations have not detected any violations of the air quality standards established by the government. A mobile laboratory monitors, on a daily basis, the area near the flare plant s stacks. Readings are taken upwind from the plants at a distance of 16 kilometers to identify background values for the substances being monitored. Samples are also taken downwind from the Tengiz plants at distances of 1, 2, 4, 8, 10, 16 kilometers and at the SPZ border. All readings are relayed to the Tengiz central control room, where operators can act immediately if they are ever required to do so. Soil TCO draws samples from 95 points across wind paths within (85) and outside (10) the Tengiz Sanitary Protection Zone in order to ensure that local soils remain uncontaminated. Samples are taken from two depths. The averaged analytical results obtained for soils collected from of IPEM showed that the content of heavy metals and oil products in the soil of Tengiz, Korolev and at the SPZ boundary is generally within the background values. In some cases the average background values are exceeded, however detected concentrations remain far below the sanitaryhygienic limits established by Regulatory Bodies. Wildlife and Biodiversity The Tengiz operating area is rich with a wide variation of flora and fauna. There are 266 bird species known to reside in the TCO operations area and adjacent territories, including several rare and endangered species listed in the Kazakhstani Red Book. There is also a wide variety of mammals, reptiles and amphibians living in and around the Tengiz area. Within the territory of TCO Partnership the species composition is stable and for some animal groups habitability conditions appear to be more favorable than in other adjacent territories.

24 24 CORPORATE RESPONSIBILITY REPORT WATER CONSERVATION AT TENGIZ TCO recognizes the value of fresh water as a fundamental social, environmental and economic resource. Our commitment to minimizing our use of fresh water through resource conservation is especially important in the arid region where Tengiz is located. Tengizchevroil currently receives fresh water delivered through a 500 kilometer pipeline from the Kygach River which also provides fresh water for agriculture and households in the Zhylyoi region. At the Tengiz facilities, this water is used for a variety of residential and industrial purposes such as drinking, showers and laundry. Building on several water-minimization projects, TCO is developing an integrated water management system in Tengiz. The integrated water management system is intended to minimize TCO s water use, provide better quality technical water and conserve fresh water. The new system includes wastewater treatment and water recycling facilities. These new facilities will modernize TCO s water management systems, originally built in the late 1980s. Treatment Yield 5,000 m 3 3,600 m 3 per day per day

25 WATER CONSERVATION 25 The wastewater treatment facility will treat an average of 5,000 cubic meters (1.4 million gallons) per day of wastewater generated by TCO s employee and contractor living facilities. The water recycling facility will yield 3,600 cubic meters (0.95 millions of gallons) per day of recycled water for use at the Tengiz plant. Tengizchevroil s environmental practices are focused on preservation of the natural resources within the footprint area of our operations. We are committed to the protection of the environment through the use of innovative technologies. TCO s proactive approach is based on the premise that it is much easier to prevent man-made negative impacts than deal with the adverse consequences of an impact once it has occurred. The health of surface and ground water is often a critical factor in determining the overall ecological situation of an area. The Tengiz area is located in the Pre-Caspian depression which lacks perennial streams (rivers, creeks). Characteristic of the region is extremely low precipitation and ambient air humidity, and a high rate of evaporation. Due to the arid conditions in the region, fresh water is a scarce resource in the Tengiz area and it is necessary to make every effort to preserve it. TCO s business activities that require water depend on imported water, so sound water management practices are essential to achieving our business and environmental performance targets. TCO s water management system ensures efficient utilization of fresh water. The effluent water disposal systems in our facilities are designed in accordance with good practices governing wastewater gathering and disposal and use the region s dry climatic conditions to help manage wastewater. EVAPORATION PONDS AT TENGIZ WASTE WATER TREATMENT FACILITY

26 26 CORPORATE RESPONSIBILITY REPORT LAND REMEDIATION TCO s ongoing program for the remediation of disturbed or contaminated sites that were inherited at the start of the joint venture facilitates the return of natural vegetation to these areas. TCO s continuous reclamation of disturbed lands is a part of environmental protection strategy. By setting the goal to reclaim historically disturbed lands TCO demonstrates commitment to principles of corporate social responsibility and is striving to be a leader in environmental performance. Soil disturbance, formation of man-made relief and other land quality changes occur during production of natural resources, geological prospecting and exploration, construction and other works. These activities have been taking place at the Tengiz and Korolev fields since the late 70 s, well before TCO was founded in From 2004 TCO annually and locally monitors technologically disturbed lands to reclaim them a later stage. Conditions of contaminated lands are assessed, reclamation projects are developed, and findings on revealed and reclaimed areas are reflected in ArcGIS data base and cartographic materials. Information about land conditions are annually reported to state land use authorities. From 2005 onwards TCO holds activities on reclamation of technologically disturbed lands in accordance with the programs approved by government authorities. Since 2010 TCO has been guided by the Program on reclamation of technologically disturbed and contaminated lands within Tengizchevroil s territory ,131 hectares of technologically disturbed lands have been reclaimed since Reclamation of such disturbed lands includes the collection and removal of garbage, restoration of the natural landscape and the creation of conditions to encourage the growth of natural vegetation. 1,131 hectares were reclaimed since 2005 Great attention is paid to reclaiming areas of historical contamination that occurred before the creation of the Tengizchevroil joint venture. This work includes development and registration of inventory passports in government agencies, pursuance of special investigations, evaluation of pollution volumes, and development of solutions for the waste management. Elimination of this historical contamination is technically complicated. Previously, local contractors did not have the capability to handle this work at world standards. In 2009, TCO created a new project to assess and reclaim contaminated land. These best practices have been shared with local companies operating in the sector. TCO successfully completed reclamation of several disturbed areas. After reclamation work is complete, disturbed lands will be covered with native vegetation. Local companies manage these reclamation projects, which also increases Kazakhstani content in services for TCO. To improve environmental conditions TCO also developed and has been implementing projects on demolition and reclamation of location areas of old facilities built up during early development of oil and gas fields in Tengiz area.

27 27 EMERGENCY RESPONSE PREPAREDNESS Part of corporate responsibility is maintaining the capability to respond quickly and effectively to operational emergencies should they occur. We regularly train our emergency response teams so they are ready to act quickly to mitigate the impacts of incidents. These teams are comprised of more than 500 employees who are trained in various aspects of emergency response and are available at any time to respond to any incident. Team members represent a range of skill sets associated with spill and other incident response. They are trained on the incident command system and participate in regular exercises to maintain their skills. Response plans are updated to capture lessons from these exercises. In 2013 and 2014, several drills were held across the company, covering both operational and natural incidents. While the Tengiz oilfield is onshore; TCO does have a program to support the trans-shipment of Tengiz crude from Aktau to Baku. The first priority is always prevention. Tankers used to transport TCO s crude follow International Maritime Organization (IMO) regulatory standards. response - National Response Company (NRC) in Aktau and Briggs Marine in Baku. NRC has the capability to respond to a range of land based, coastal and near-shore oil spill scenarios to include coverage of the Kazakhstan portion of the Caspian territorial and international waters. Land response provided by NRC includes transport (road, rail and pipeline) routes in western Kazakhstan. More than 90 percent of NRC personnel are Kazakhstani citizens. Response capability in Azerbaijan has the ability to respond to a range of oil spill scenarios to include coverage of the Azerbaijan portion of the Caspian territorial and international waters. Additionally, our partner companies maintain active memberships in international oil spill cooperatives and have access to expert external consultants and contractors, including the oil spill cooperative Oil Spill Response, Ltd (OSRL). This organization specializes in incident management, wildlife management, oil spill and air dispersion modeling, toxicology, chemistry, firefighting, communications, shipping and salvage. Additionally, Tengizchevroil has representatives on-site in contractor facilities during loading and unloading in order to ensure safety. TCO contracts with two spill response contractors dedicated to Tier 2 spill

28 28 CORPORATE RESPONSIBILITY REPORT INTEGRATED IMPACT ASSESSMENT FOR NEW PROJECT TCO s Environmental Social Health Impact Assessment (ESHIA) process is designed to identify and address potentially significant environmental, social and health impacts of new projects in a logical and consistent manner. Tengizchevroil has adopted uniform standards that, in some cases, may exceed regulatory requirements. Although compliance with government regulations achieves our goals of protecting human health and safety and the environment, standardizing our approach beyond legal requirements in some instances will enhance TCO s ability to achieve OE objectives and adhere to The TCO Way.

29 ВКЛАД CONTRIBUTION В ЭКОНОМИКУ TO КАЗАХСТАНА KAZAKHSTAN S ECONOMY

30 30 CORPORATE RESPONSIBILITY REPORT KAZAKHSTANI GOODS AND SERVICES KAZAKHSTANI GOODS AND SERVICES SPENT US DOLLARS Since million 2.4 billion 17.9 billion TCO continues to increase its investment in Kazakhstani Content (KC). Since 2002, when TCO spent $415 million on Kazakhstani goods and services, the company has significantly increased its KC investments. In 2014 TCO spent a record $2.4 billion on goods and services from domestic suppliers. Currently, 50 percent of our services and 5 percent of our goods are provided by Kazakhstani suppliers. The purchase of goods represents only 16 percent of our overall spending for goods and services. The purchase of services will continue to present the greatest opportunities. This is the area of the most impactful sustainable local content growth now and in the future. Since 1993, TCO has invested more than $17.9 billion on the purchase of Kazakhstani goods and services. In fact, in the last three years TCO has seen a five-fold increase in its expenditures on goods. The company will continue to identify methods to increase its purchases of quality goods that meet the extremely challenging operating conditions in Tengiz.

31 CONTRIBUTION TO KAZAKHSTAN S ECONOMY 31 TCO s PROGRAMS AND INITIATIVES ON DEVELOPMENT OF KAZAKHSTANI MANUFACTURERS AND SERVICES PROVIDERS TCO s Kazakh Content Growth Strategy entails four focus areas: Create opportunities to attract Kazakhstani enterprises; Develop manufacturing capacity to produce goods and services; Provide expertise and skills for conducting business in accordance with international standards; and Make maximum use of local employees capacity. These focus items are supported through appropriate TCO initiatives, programs and processes. In late 2013, a Memorandum of Understanding (MoU) was signed between the Republic of Kazakhstan (RoK) Government and TCO within the Future Growth Project (FGP). According to the MoU provisions, TCO FGP initiated a business forum in April 2014, where the KC plan and work scope in the following categories were widely presented: Manufacture modules; Motivate investments of international producers into Kazakhstan; Cargo transfer services; and Logistics including marine transportation. Kazakhstani content development activities include tangible opportunities to attract state-of-the-art technologies and innovative solutions into Republic of Kazakhstan, development of Kazakh business potential, formation of joint ventures, increase of Kazakhstani Content and qualification improvement for specialists in different areas of the economy of RoK. TCO conducts dynamic actions to implement those initiatives and interacts with all stakeholders national entities, subsoil users, Kazakhstani and international companies. One platform for KC development is the Kazakh-British Forum. The forum, traditionally held with the support of Shell and United Kingdom Trade and Investment (UKTI) in partnership with the National Agency on Developing Local Content of Ministry of Innovational Technologies of RoK (NADLoC), is a joint program established in 2011 to facilitate the formation of joint ventures between British and Kazakh Companies in the supply chain management of the oil and gas industry. TCO takes part in the forum and informs about its demand for goods and services (G&S) and prospective areas where joint venture formations could support import replacement. In 2011 TCO, KazMunaiGas (KMG) and the Union of Machine Builders of Kazakhstan (UMBK) began to develop the machine building industry of Kazakhstan through the study of opportunities to improve and further develop existing capacities and capabilities. The following categories were identified during the joint work: Electrical equipment; Rotating equipment; Pipes/valves/fittings/flanges; Vessels and tanks; and Drilling equipment. As a result of the work, Kazakhstani companies were identified that were able to produce required goods and provide required services in compliance with TCO specifications. During 2014, TCO identified new Kazakhstani manufacturers and TCO management visited West Kazakhtstan, North Kazakhstan, East Kazakhstan, Pavlodar and Mangistau oblasts and gained a better understanding of manufacturing capabilities of 30 local companies which resulted in determination of a number of new Kazakhstani suppliers. Further visits are planned in 2015.

32 32 CORPORATE RESPONSIBILITY REPORT Model of long-term contracting TCO adopted a strategic view on creating service contracts with longer terms (more than 5 years), which is necessary for ongoing or recurring work. Joint Ventures TCO supports efforts on establishing partner relations and concluding agreements between foreign and Kazakh suppliers of Goods & Services in the oil and gas area. TCO will continue encouraging development of joint ventures via forums, workshops and introducing companies with TCO requirements. The aim of the JVs is to attract investments, transfer knowledge and best practices, and train local personnel and business innovation, resulting in an increase in competitiveness of Kazakh companies and specialists. A large potential for Kazakhstani content is embedded into the new model for long-term contracts. TCO understands the suppliers need for stability to expand the possibilities of creating competitive goods and services locally. Thus, the long-term commitment of business provides opportunities for sustainable development of Kazakhstani suppliers by making appropriate investments in building infrastructure, training national employees, creating new jobs and engaging Kazakh suppliers of goods and services as subcontractors. In long-term contracts, TCO and contractors jointly establish Kazakhstani content metrics, which the contractors are committed to execute until the contract expiration date. TCO monitors these metrics by hosting engagement meetings with the suppliers and taking corrective actions, where necessary.

33 CONTRIBUTION TO KAZAKHSTAN S ECONOMY 33 Small and medium business development program TCO s motivation in supporting small and medium business entities, oriented in Oil & Gas industry demands, is based on a unique corporate responsibility approach - support production capabilities, become a main consumer of released products and provide opportunities for further sustainable development of entities. The Small and Medium Business Development (SMBD) Program offers interest-free loans to Kazakhstani enterprises for manufacturing goods and services that potentially might be in demand by TCO and throughout the oil and gas market. SMBD Program demonstrates TCO s commitment to develop small and medium-sized enterprises by providing long-term opportunities for the future. By involving entrepreneurs in the program, TCO enhances small and medium businesses capacity to create new jobs and produce goods and services in Kazakhstan that are compliant with international standards. Since 1997, almost $9 million have been invested in the development of small and medium businesses, which enabled the creation of more than 1,400 new jobs. TCO is interested in creating opportunities for the production of goods and services locally, such as these, which will meet international standards and might potentially replace imported goods and services currently in demand by the oil and gas market.

34 34 CORPORATE RESPONSIBILITY REPORT One element of TCO s corporate responsibility is its commitment to the well-being of its workforce. TCO employs people of different ages and interests, with qualifications and experience dictated by business needs. The company provides a comprehensive benefits package and a variety of initiatives to reinforce company values and strategies. The social contract between TCO and its workforce is contained in a collective agreement that has been in effect since The Collective Agreement is updated every three years. The last update came into effect on January 1, The Collective Agreement parties are the Trade Union of Tengiz Oilfield Employees, TCO Employees Union and the company management. The following constitute the key elements of the Collective Agreement: STRATEGIC WORKFORCE DEVELOPMENT Personnel training and development; Postsecondary or postgraduate education for TCO employees; Medical insurance for employees and their families; Annual recreational benefits and regular vacations; Healthy Lifestyle and Sports Program; Accommodation, placement and recreation arrangements for rotational workers; Transportation to work; Compensation of children s recreation expenses; Miras-Atyrau Kindergarten for TCO employees children; Financial aid to attain higher education for children of TCO employees; Support to TCO retirees; Employees Savings Program in deposit accounts with company participation; Long Service Award Program; and an Interest-free mortgage loan program (via Kazakhstani banks) to TCO employees.

35 STRATEGIC WORKFORCE DEVELOPMENT 35 Workforce Training and Development In 2014 Kazakhstani employees comprised 86.5 percent of the TCO workforce, in comparison to 50% in Kazakhstani s hold 75 percent of senior supervisory and managerial positions. The advancement of employees to positions of increasing responsibility is being actively supported through a variety of training programs. During the last 5 years, 113 Kazakhstani specialists replaced expatriates in key managerial, supervisory and technical positions. Talent management processes have been created to support employee development. The main aim of the process is to develop high potential employees and future leaders who can fulfill business needs. Key elements include a: structured TCO Leadership Program; workforce reserves planning; and a Temporary International Assignment Program. Programs have also been developed to assist technical specialists to improve their qualifications through work assignments, mentoring and technical skills expansion. TCO spent $41 MM over the last five years for workforce training programs. In 2014 over 90 TCO employees were provided an opportunity to work in various international Chevron business units. As well, select employees have had opportunities within Kazakhstan, to acquire and apply new knowledge and upgraded skills upon their return from international assignments. Since 2010, 129 employees obtained bachelor and postgraduate degrees (BA, MS and MBA). Since 2014, TCO has been implementing informal networks to enable employees to demonstrate leadership skills and establish relationships with colleagues from within the company. For example, the XYZ Network unites a group of professionals who are at the early or middle stage of their careers. The Network vision is to establish and enforce mutual beneficial communications among professional groups to implement existing potential. The Women s Network is based on the idea of developing leadership and creating a business communications platform inside special groups by interests. The Network vision is proactive engagement and development of the members to achieve company business goals.

36 36 CORPORATE RESPONSIBILITY REPORT Medical insurance and support of a healthy lifestyle Republic of Kazakhstan insurance companies provide medical insurance coverage to all national TCO employees and their family members. The total number of insured persons was 8,180 in TCO covers payments of services in the standard categories for employees. TCO has several programs that support the health of employees and their families. Rotational employees at Tengiz are provided for at TCO s on-site clinics. These facilities provide annual check-ups for employees and other routine and emergency care as needed. As part of TCO s general strategy of promoting a healthy lifestyle among its workforce, TCO launched a psychological support program to company employees and their families in July It is free of charge and completely confidential. During the year a great number of sports events are arranged for Tengiz and Atyrau employees. 23 sports tournaments were organized in 2014 among TCO departments and other oil and gas companies. The total number of participants in the events in Tengiz and Atyrau was 3,454 people. All TCO employees have an opportunity to use fitness center services, the cost of which is compensated by the company at an amount of 137 Monthly Calculation Index. Tengiz-based employees have access to fitness facilities, swimming pools and recreation areas.

37 STRATEGIC WORKFORCE DEVELOPMENT 37 Miras-Atyrau Kindergarten for TCO employees children On June 1, 2014 there was an opening ceremony of Miras-Atyrau Kindergarten, built by Tengizchevroil funding and designed for 350 persons for the company employees children living in Atyrau. The general sum to cover expenses on personnel for education in 2014 was $1 million. The kindergarten curriculum is developed on the newest programs and methods of the Nursultan Nazarbayev Education Fund. The language of education is Kazakh, but students may prepare for school both in Kazakh and Russian, and study English additionally by IBPYP (International Baccalaureate Primary Years Program). TCO Scholarship Program TCO s scholarship program provides from 100 to 162 higher education grants per year for students. The Program is developed to provide financial aid to the children of employees and applicants from among talented school graduates and students. They must be Kazakhstani citizens planning on studying in Kazakhstani and international universities and colleges. TCO has committed $4.7 million to scholarships since Applicants are selected based on academic success. Grants can be prolonged for student recipients on the condition that academic performance remains excellent. In 2014 scholarship grants were prolonged for 89 students whose academic performance remained excellent. The total sum of reimbursement and scholarship payments for students in the academic years was $798,000.

38 38 STRATEGIC WORKFORCE DEVELOPMENT TCO Long Service Award program Reaching a jubilee milestone in company service provides an opportunity for the company to recognize an employee s long service and say thanks for their continuous contribution to the company s success. Every TCO employee, who reaches a milestone in a work for the company (7 years and more) receives a service-award pin and gift and is invited to dinner hosted by TCO management. In TCO employees participated in the Program. TCO Pensioners As of the end of 2014, TCO s retirees numbered 73. Permanent employees reaching retirement age are annually provided with assistance of 120 Monthly Calculation Index. Housing Loan Program TCO s hallmark program has been the interest free mortgage loan program offered to employees for many years. With more than 700 loans equaling more than $59 million given over the life of the program since April 2010, TCO s housing loan program has enabled employees to improve their quality of life. Employees who might have struggled to get a loan before are given the chance to improve the living conditions of their families and avoid high interest rates sometimes associated with traditional loans. The program is one of the most popular employee benefits. Contractors Tengizchevroil maintains close relations with its contractors to ensure compliance with Republic of Kazakhstan Labor Code requirements and awareness of the importance of collective agreements. TCO expects its contractors to fully comply with Labor Code requirements and TCO regularly audits contractors to ensure compliance with the Labor Code. TCO also expects contractors to develop workforce development plans and training philosophies, maximize the use of Kazakhstani goods and services. One of the most important requirements is full compliance with all environmental and safety performance requirements. TCO management conducted 48 meetings with contracting organizations in 2014, with a focus on safety and controlling Industrial Relations issues on TCO premises.

39 COMMUNITY INVESTMENT

40 40 CORPORATE RESPONSIBILITY REPORT VOLUNTARY EGILIK PROGRAM At the start of the Tengizchevroil joint venture in 1993, the company created a five-year, $50 million dollar program called the Atyrau Bonus Fund. TCO saw the program as a way to create value both for the company and the community. Furthermore, TCO decided to work collaboratively with the Atyrau Oblast Akimat leadership in choosing the social infrastructure projects in Atyrau Oblast to be funded with Tengizchevroil funds. In 1998, the Atyrau Bonus Fund program was concluded. The objectives of the program were met and the outcomes clearly pointed to the value of, and need for, such a program. As a result, in 1998 TCO established the Egilik ( benefit in Kazakh) program. Egilik began with a $4 million budget, growing steadily until 2003 when the budget increased to $8 million for three years and then to $12 million for another three year period. For 2009 through 2012 the budget was $20 million per year and $25 million in ANNUAL BUDGET 25,000,000 US DOLLARS In 2014, TCO has fully completed Kulsary water supply system replacement project and continued construction of two schools in Atyrau and three kindergartens in Atyrau oblast. Also, TCO successfully continued greening activities in Zhylyoi region by opening two parks in Kulsary and planting over 2,000 trees in Zhana Karaton and Koschagyl villages. Over the life of the program, TCO has funded various social infrastructure projects for Atyrau Oblast including schools, hospitals and clinics and electricity and water systems. As of the end of 2014, TCO has invested over $200 million through the Egilik and Atyrau Bonus programs since Also, in 2014, TCO allocated $4 million to purchase modern medical equipment for the Atyrau Oblast Cardiology Center, the Atyrau Oblast Children s Hospital and seven medical clinics throughout the Atyrau oblast. The funding will provide equipment and training to address cardiopulmonary diseases among the general populace and early childhood hearing issues.

41 VOLUNTARY EGILIK PROGRAM 41 TREE PLANTING AT DOSTYK PARK. KULSARY, ATYRAU OBLAST

42 42 CORPORATE RESPONSIBILITY REPORT COMMUNITY INVESTMENT PROGRAM TCO s Community Investment Program is another TCO initiative aimed to develop region s social sphere with annual budget of over $1 million. TCO established an internal Community Investment Council (CIC) comprised of individuals from various departments to direct TCO s discretionary Community Investment Program budget. The TCO CIC created a strategic framework that moves TCO s community investment from charitable giving to proactive programs that support the socio-economic goals and needs of both TCO and Atyrau Oblast. TCO seeks to create a direct relationship between community investments and TCO s operations, moving from local tactical investments to community investment as a core business strategy. This requires subjecting community investments to the same scrutiny as other business investments. TCO s CIP Strategy A social baseline study was conducted to assess the needs within the communities. Considering the results of the social baseline, the CIC created a strategic framework that linked TCO business and socio-economic objectives with community needs and priorities. TCO developed the following focus areas and vision. The vision for community investment is to: Add value to the business and community in an ethically and socially responsible way Build human, societal and organizational capacity to sustain a thriving local economy and society without dependence on TCO Tengizchevroil Community Investment Focus Areas: Building capacity in people or organizations to benefit TCO and community Education, training and socio-economic development Basic human needs, specifically solutions to water challenges Cultural preservation and awareness, specifically further the Kazakh language Health education and improvement Environmental education and improvement

43 COMMUNITY INVESTMENT PROGRAM 43 Partnership Approach ТCO follows a partnership model for community investments. Publicprivate partnerships (PPP) bring together business, local institutions, government, non-governmental organizations (NGOs) and development agencies via shared missions, desired outcomes and accountability. In these collaborative relationships, partners plan jointly, share resources and share risks and rewards. The partnerships provide opportunities to build social capital and capacity. Most importantly, PPP investment is more likely to result in sustainable solutions that improve the local socioeconomic environment. Measurement TCO s community investment monitoring, evaluation and reporting system ensures that the company maximizes development benefits for our host communities while investing in ways relevant to our business needs. Monitoring involves the systematic and consistent collection of relevant data and information at regular intervals to measure project or program progress and partner performance. Evaluation involves the systematic, objective and transparent appraisal of a partner or specific project or program design, results and effectiveness at a given point in time. Reporting provides regular feedback on the progress, problems, successes and lessons learned from the project or program implementation. We continue to be dedicated to adding value to the communities in which we operate. We streamlined our focus areas for investment, emphasizing a partnership approach. We apply the same vigor to planning, executing and measuring community investment that we use in other areas of our business

44 44 CORPORATE RESPONSIBILITY REPORT COMMUNITY INVESTMENT PROJECTS Tengizchevroil has been holding a widespread request for proposals every year starting from As a result, TCO established collaborative relationships with a few new NGOs. Selected CIP programs were exciting and diverse, covering all of our goals, from health and education to the environment. The common feature that united them is that their ultimate beneficiaries were communities in Atyrau oblast. Increasing active public participation in social projects According to research conducted in 2009 and 2011, critical problems for the residents in Zhylyoi district of Atyrau oblast are the poor quality of public entertainment places and the lack of management system of multifamily apartment houses (MFAH). In 2014, the two-year Orleu EFCA project started. The aim of the project is to promote active participation of the local population in addressing issues of MFAH and places of public entertainment, search and assistance in developing MFAH management system. The project became a continuation of the pilot Places of Public Entertainment project (2013) which contributed to an increase in the involvement of local residents in the development of Kulsary and Atyrau. Initially, the needs of the population were assessed through interviews with 300 residents of the micro districts. As a result, problems of MFAH, the willingness of the population to take part in their solution, were identified. During the study, community leaders were identified. A series of trainings (7 trainings / 175 members) was organized for their mobilization. Public performances, house management and legal literacy assisted with organizing work with the community and addressing issues with their houses. An information campaign covered 1,500 residents of micro districts. Social events as sport competitions, clean-up events and concerts were held in which residents, media, akimat representatives and service companies took part. Twenty legal sessions on housing and registering condominiums helped to register two condominiums. NUMBER OF BENEFICIARIES 856 INDIVIDUALS In order to facilitate the creation of a house management system in Kulsary, experts in the field of housing and public utilities - National Chamber of Housing and Utilities of the Republic of Kazakhstan and the Center for Development of Local Government were invited. After reviewing the situation, the experts proposed a concept for addressing housing problems in the district. The concept was discussed with the local authorities and employees of utility companies and the public. A contest of grant projects for the public to improve MFAH was held. Five applications worth 3.9 million tenge were funded. The grant funds were spent to purchase repair and construction materials. Residents did all of the work themselves or hired workers at their own expense. For example, a monetary contribution by residents for roof repairs and replacement of windows and doors was 620,000 tenge. 120 residents of three micro districts in Kulsary took part in mini-projects. People not only repaired porches, roofs, stairs and windows, but also felt the unity and ability to formulate and solve problems of their houses. The total number of direct beneficiaries of the project is 856 people.

45 COMMUNITY INVESTMENT PROGRAM 45 Joint program on identification, prevention and treatment of cardiovascular diseases TCO jointly with Kazakhstan s Association of Family Physicians implements the project aimed to improve the professional knowledge and skills of doctors and nurses for early detection and efficient management of arterial hypertension and other cardiovascular diseases that are the main cause of deaths in Kazakhstan. KAFP took a number of highly effective measures; among them is the organization of advanced interactive clinical training that is based on the principles of evidence-based medicine for 225 practicing doctors and paramedics of the city and rural area on 36 clinical modules on arterial hypertension. 108 medical personnel of Atyrau took remote training courses. KAFP family doctors, lecturers from the USA and KazNMU take mentorship visits to pilot polyclinics and rural area outpatient clinic on a regular basis to provide practical assistance to doctors and united reception of patients. KAFP facilitates a more responsible attitude of the community to their health through mass media (about 400 TV broadcasts of the created video clips about health improvement in Russian and Kazakh), organization and support of Hypertension Schools. 187 patients with AH have been trained to date and 153 of them normalized their arterial pressure (AP), 87 changed their life style. Eight (8) heavy smokers of over 25 years of smoking gave it up. KAFP identified the group of active participants among patients, helped them to organize Kutty Bilim public society of patients. The society of patients actively got into training of people, assists medical personnel in conducting school classes and participates in KAFP public campaigns. They regularly conduct AP measuring campaigns at trade centers, shops, polyclinics, major offices and enterprises to attract community s attention, to aggressively identify people with hypertension, high blood sugar, cholesterine and triglycerides among residents. Kazakh Language Development Program TCO is known for active participation in the Kazakh language development program. The company works closely with the Fund named after academician Zeynolla Kabdolov on the Kazaksha sayra (Speak fluently in Kazakh) program which included the following areas in 2014: Production and distribution of 3 e-books bilingually: Angels do not sleep Makhambet s arrow poems Let you be into luck Production of series of video game podcasts and their distribution in social networks; Conducting mini competitions and promotional campaign of the project; Translation of Kazakh proverbs and sayings and their distribution in social networks; and Distribution of Kazakh folk tales and games in social networks in 3 languages.

46 46 CORPORATE RESPONSIBILITY REPORT Program on English Language In 2012, the British Council, with financial support from TCO, implemented a pilot capacity building project with the goal of enhancing the English skills of school graduates by improving the standards of English language teaching in secondary schools in Kulsary. The pilot project demonstrated an urgent need for methodological support and for the professional training of teachers in the district. The British Council has therefore undertaken a two-year program that aims to enhance the level and quality of English language teaching amongst English language teachers in Zhylyoi district in Atyrau oblast. This program includes providing professional training, setting up a resource center equipped with modern methodology reference books and materials as well as creating a pool of local professional English language trainers who will be able to cascade new training methodologies to their peers in the district. The participants of the program have been offered online courses and professional networking tools that will enable them to continue to develop their professional skills even after the completion of the British Council program. The British Council has been working closely with the regional and district departments of education to integrate the new training methodologies in the target secondary schools in order to maximize sustainability. The key outcome of this program will be improved English language teaching and subsequently, improved level of English language proficiency amongst pupils in Zhylyoi district. Society of information technologies age Since 2010, the Office of the International Research and Exchanges Board (IREX) in Kazakhstan manages projects aimed at improving the quality of education in the field of information and communication technologies (ICT) among the population of the city of Atyrau and Zhylyoi district. Society of Information Technologies Age (SITA) 2014 Project pursued three objectives: Promote the use of ICT in schools, NGOs and other organizations with a social mission. Provide professional development opportunities for teachers, NGO staff, medical workers and other public organizations and increase their skills. Train disadvantaged people who do not have sufficient funds for the acquisition of technical skills individually and increase their chances of employment in the future. Within SITA project more than 800 representatives from 75 institutions of Atyrau and Zhylyoi district were taught, 500 websites were created, and more than 600 trainings were conducted. All the participants of the project had opportunity to get free education in information technology. Trainings were conducted by experienced trainers who make up the schedule according to the needs of each group at a convenient time for them. The training includes: - Microsoft Office (Excel, PowerPoint, Word) - Audacity, Gimp, Presi com, Premier Pro Programmes - Google tools - Study of educational sites ( - Creating online tests and quizzes - Creating blogs and forums - Creating personal websites. The duration of the training and classes is determined by the students level of knowledge. An equally important goal of the project was improvement of school computer classes. The technical coordinator of the project helped to repair computers, install modems, set up a local network, connect Internet and make program reinstallations. SITA also has its own computer lab with the latest equipment and high-speed internet access which is available to all participants of the project at any time. 600 TRAININGS WERE CONDUCTED

47 COMMUNITY INVESTMENT PROGRAM 47 Green Atyrau Support of socially vulnerable youth In 2014, the Independent Generation of Kazakhstan (IGK) YCO in cooperation with Tengizchevroil LLP completed the implementation of the New Life project which included two areas: Promoting the Adopting parents project; and Post residential support of orphans and children left without parental care. The aim of the project was the development of a family set-up and socialization of orphans and children left without parental care. Directors, educators, teachers, pupils from orphan asylum named after S. Kazybaev, House of Youth and Children s Family Type Village were involved in the project. Specialists performed 618 hours of intense work to achieve the objectives of the project. Two manuals for each area of the project were issued. TCO together with literary and historical cultural ALSHY fund implemented a project to promote the initiatives of landscaping and maintaining a constant purity of the city among the inhabitants of Atyrau. During the implementation of the project, about 50 volunteers were involved. Trainings were held in city nurseries and areas to care were secured. During landscaping, 25 bedding zones (kindergartens, orphanages, schools, universities, hospitals) were covered and 2,410 seedlings (1,860 of which are spring beddings and 550 are autumn beddings) were planted. Planted trees were certified and stands with logos of the sponsor and investor of the project (Alshy and TCO) were installed in bedding areas. Mini contests as Best Gardener, Best Volunteer, Best Team of Volunteers, and The best publication on the project were held among the volunteers and community folks. Three video clips were shot, produced and broadcasted on regional television. Works on the project were covered in the media and posted on the Internet. The main result has been improving communication skills, socialization, desire and ability to work in a team. Participants of the project, pupils of House of Youth and regional orphan asylum could improve yards themselves, learn how to plan and carry out calculations. The direction of financial literacy and work planning helped children to get career guidance and life skills in civil, concrete, installation, welding, painting, gardening works. They also mastered the technique of stitching, sewing on the sewing machine, working with beads, palettes and mosaics. Trainings in computer literacy generated the greatest interest in children. Children were taught AutoCAD, Photoshop, Coral draw, how to apply filters and convert photos into 3D objects, and to create certificates and diplomas. The New Life project was presented at the fair of NGO social projects and won 1st place.

48 48 CORPORATE RESPONSIBILITY REPORT Yntymak community development program Tengizchevroil LLP and NGO PYXERA GLOBAL became partners in the implementation of the community development program called Yntymak in March This program is aimed at addressing the needs of the local community in Atyrau and Kulsary through volunteers by increasing the social capital of the local community for sustainable economic prosperity. Thanks to the Yntymak program TCO representatives established closer links with the local community as well as had the opportunity to expand their professional and leadership skills. There is a lack of communication between the public and private sectors in Atyrau oblast. Nonprofit organizations, universities, business associations and public schools lack professional and organizational resources. The implementation of the program takes place in three areas: support to NGOs, educational projects and volunteer marathons. Within the Support to NGOs area, various trainings for representatives of non-governmental organizations of Atyrau and Kulsary such as Project Development or Bases of Accounting were held. Educational projects include discussion clubs in English for students and teachers as well as guest lectures and individual classes with pupils in orphanages. Volunteer marathons consist of one-day and/or charity events. There are events such as saving fish, organizing charity concerts and flash mobs for supporting hearing-impaired children, charitable fundraising for lowincome families and children, families with disabled children from Kulsary, meetings with pupils of Youth House, knitting warm socks for preterm children and many other events. In 2014, the program volunteers raised 3,287,700 tenge for charity purposes. According to the assessments conducted by PYXERA GLOBAL on the results of the measures taken it was found that TCO employees who participated in the projects implemented by the Yntymak program acquired extensive knowledge and experience of professional development. TCO volunteers reported about the successful development of the skills of organizing teamwork, establishing communications, addressing issues, public performances and respecting the culture and traditions of other nations.

49 COMMUNITY INVESTMENT PROGRAM 49 Kazakh language study application for IPad per Tildaryn methods Business training in Atyrau and trainings to support women entrepreneurship in RoK The Association of Business Ladies of Kazakhstan implemented this project which involved opening a training center and conducting trainings in support of women entrepreneurs in Atyrau. The project s aim was to ensure education opportunities exist for the development of women entrepreneurs in Kazakhstan. 142 unemployed women participated in the project and completed trainings on step-by-step strategic planning processes, entrepreneurship elements and accounting. This project utilizes an innovative method of language study based on leading international practices, with a regard for the Kazakh mindset and culture. The application helps one acquire a basic speaking level of the Kazakh language in 3 weeks. The method focuses on using more frequent words and grammar patterns. The application can be installed free of charge through virtual markets of Apple and Google istore and Google Play. Free access to the training materials is a significant part of the project. The precise systematization of the materials allows listeners to develop the speaking skills. The basic course consists of grammar patterns and lexical materials selected on the basis of frequency. It includes 15 grammar patterns (which systemize all Kazakh grammar system), 300 frequent words and 150 speech patterns (on 8 topics about human communication with external environment) made in appropriate tabular format. The participants learned how to develop a marketing plan and gained understanding about special tax rates for small business entities. The trainings were carried out by qualified coaches from Damu Regional Fund, Branch office of Asia Credit JSC and Delta Bank JSC. The project participants were provided with training materials and participated in excursions to local companies. As a result of this project, 20 women started their own business and 50 women were employed.