9 PRIME MINISTER OF VISITS KARACHAGANAK A two-day working trip began with the staff training system for conducted are being felt more. on September 8th on the part of preparing personnel for working This fact is an essential result of the RK Prime Minister, Daniyal in new sectors and establishing the implementation of the Akhmetov to the West priorities for industrial projects. Kazakhstan-2030 Strategic Plan. Kazakhstan Oblast. The head of The Prime Minister also Thanks to this established policy, the government was accom- visited the Surgery Complex that we are now able to construct panied by the Minister of was opened over one month ago ambitious plans, and the young Economics and Budget Planning, at the Oblast Clinical Hospital. will implement them. , the first Vice This department was one of the Following the meeting with Minister of Education and projects that were implemented teachers and students from Science, Gennadiy Gamarnik, as part of the KPO B.V. social WKATU, the prime minister flew the First Vice Minister of Energy programme. All divisions of the by helicopter to the and Mineral Resources, complex are equipped with Karachaganak oil and gas Bakhytkozha Esmuhambetov, modern medical technology and condensate deposit. This deposit the Vice Minister of Finance and equipment. In addition, a is generally considered to be a Chairman of the Committee for transformer substation and unique one, as it contains the Customs Control Berdybek reserve diesel electrical station largest hydrocarbon resources in Saparbaev, the Vice Minister of was constructed, modern the world, with 1.2 billion tonnes Finance Gani Uzbekov in addition telecommunications systems of oil and over 1.35 trillion cubic to the President of NC were connected, electrical and metres of gas. In addition, KazMunayGas JSC Uzakbay a bankruptcy and reconstruction being completed. This is a joint Daniyal Akhmetov also heating energy supply systems Karachaganak means huge Karabalin. did the enterprise begin to Kazakhstani-Japanese project visited construction sites in were installed and an overall investments, thousands of jobs, The prime minister stressed produce new, but peacetime being implemented by the Uralsk, and inspected apart- grounds improvement project the training of highly qualified that that region has significant oriented products. Japanese government, the WKO ments at the recently built houses was conducted. The total volume specialists and production potential for economic de- The Prime Minister also met Akimat and the Karachaganak of eighty families, and he was of KPO’s investments for this meeting international standards. velopment. It is worth noting that with the plant staff, where they Petroleum Operating B.V. satisfied with the quality of work. piece of social infrastructure Daniyal Akhmetov con- at the time, during a meeting with inspected some examples of Construction work is being All of these apartments were totaled US $5 MM. During a ducted a business meeting at students and teachers at the agricultural technology and conducted by a famous energy bought through mortgages, and meeting with personnel at the Karachaganak with the partners Djangirkhan Temirkhanov West equipment for the oil and gas Japanese company, Tohoku the cost of 1 square metre was facility, the prime minister asked in the Karachaganak project and Kazakhstani Agricultural Uni- sector. The staff demonstrated Electrical Power, which utilises US $300. Young families and them how effectively the facility the management of KPO B.V. versity, Daniyal Akhmetov improved models for reheating world class technologies, which state officials were more was being used, as well as on the The General Director of KPO, stressed, “I believe that there are ovens that are used in the oil and will allow it to increase the privileged when determining level of qualifications held by the Paolo Campelli updated the PM significant prospects for the West gas, petroleum processing and effectiveness of installation and eligibility for the mortgages. medical staff. Mr. Akhmetov on the implementation of the Kazakhstan Oblast. I am petrochemical sector. The ecological safety. The latest When talking with the stressed that it is also necessary Kara-chaganak project and the absolutely confident that in the company also produces generation of equipment is being management of construction to continue work on the company’s social programme, future, the West Kazakhstan convenient and usable wagons, produced by Hitachi. According companies, Mr. Akhmetov spoke improvement of the material as part of which, KPO invests US Oblast will receive new module rotational facilities, and to the assurances given on the of the necessity for cooperation, basis in regional hospitals. $10 MM annually into social technology for the petrochemical spare parts for drilling equipment. part of the Japanese partners, and for participation in the During a meeting with infrastructure development in sector, and the block in the West When talking with the younger who are working in close contact development of production of teachers and students at the the WKO. In general, the prime Kazakhstan Oblast especially workers, he queried on their with the Kazakhstani side, these existing construction materials West Kazakhstan Agricutural minister expressed his sa- interests the Kazakhstani labour conditions, the level of include know-how related to turbo and the creation of new Technical University, Mr. tisfaction with the progress of the government, and it is one of my salaries and discussed the construction. The construction of construction enterprises. Akhmetov said that he arrived in project’s implementation. The main goals for today to conduct extensive opportunities the young a gas turbine electrical station Later, the head of the the region by order of President discussion also touched upon negotiations on building in- people have to continue their was started during September of government also visited the Nursultan Nazarbaev. During a the implementation of the frastructure for the petroche- education. last year, and it is planned to house museum of the artist, visit in May to Priural’e, Mr. president’s order for the mical industry. This is the future It is essential that the complete the construction by the Saken Gumarov, and went to a Nazarbaev pointed out a number construction of the Ka- for your oblast and I would like to dynamic development of the end of 2005. KPO has allocated concert performed by the of goals for the improvement of rachaganak-Uralsk gas pipeline, sincerely say that it is a very economy be connected with a US $7.3 MM for the Garifulla Kurmangaliev Oblast the economic potential of the which will provide the left bank optimistic one”. growth of consumption of implementation of the project, in Philharmonic Orchestra. region, and the solution of certain of the Ural with cheap gas. Following his arrival in electrical energy. Connected with addition to US $10 MM annual The programme for the social problems. These issues During the briefing, the Uralsk, Daniyal Akhmetov went this, the Priural’e energy being allocated for the second day of the prime are now being solved at the prime minister stressed that to West Kazakhstan Machine independence program-me was development of social infra- minister’s business trip was also governmental level. solid prospects exist for the Building Company JSC, the created. Mr. Akhmetov became structure in the WKO. The project a full one, and included a trip to When discussing the development of the West former Mettalist Plant. During the acquainted with the progress of was created by an initiative on the infrastructure objects that are not economy, the prime minister said Kazakhstan Oblast. The initial years of independence, the its implementation during his visit part of the WKO Oblast Akimat only regionally important, but also that the country has gained a region has all necessary enterprise passed through to the Uralsk TPP, at which, the and the Japanese government vital for the national economy. position of sustainable growth, potential to implement the periods of deep crisis and revival construction of a new 26.9 MW and KPO B.V provided joint The second day in Priural’e was and the results of the market plans that were devised on a of its production. Only following gas-turbine electrical station is financing. dedicated to getting acquainted reforms that have been nationwide scale.

KPO TAKES PART IN KIOGE 2005 KPO PRODUCTION FACILITIES speech given by KPO General Director, Paolo Campelli, who UNDERGO PLANNED MAINTENANCE gave a detailed presentation on the development of Karachaganak. KIOGE 2005 was visited by thousands of residents and guests of Almaty, and the KPO exhibition display, a 96 sq m area, made a positive impression on all visitors, including government representatives and foreign embassies, businesspeople, technical experts, journalists and students. They all had an The 13th regular Kazakhstan Rosneft and many others. As in opportunity to find out about the international oil and gas previous years, KPO was new production facilities at exhibition and conference, represented at KIOGE 2005 with Karachaganak, and to receive KIOGE 2005 took place from a large delegation of 20 people, first-hand information on the October 4th until the 7th at the including representatives from personnel nationalization Atakent Centre for Business various departments led by program, the company’s Cooperation in Almaty, which is General Director, Paolo Campelli. participation in the development considered the largest in the On the second day of the of the WKO social infrastructure, Caspian region and Central Asia. exhibition, the traditional the work being done for This is an annual event that has International Kazakhstan Oil and environmental protection and the been conducted ever since 1991, Gas Conference opened, which provision of safe operations. “Karachaganak Petroleum Operating B.V.” (KPO) has conducted the annual shutdown activities and KIOGE has created a has become not only a forum for Each visitor was able to find at the Karachaganak facilities. Completed in early October, this five-month programme included reputation as the most popular the discussion of strategies and something useful and interesting, planned maintenance, modification work and necessary repairs of KPO’s production facilities including and prestigious event in the oil the prospects for development of the students and young the Karachaganak Processing Complex (KPC), Unit 2 and Unit 3. and gas industry of Kazakhstan. the national oil and gas industry, professionals were interested in Cameron Crawford, KPO Operations Director, said, «KPO is continually focused on improving Its participants include the heads but is also a place for official and the prospects for employment in its performance by looking for ways to increase efficiency and reduce emissions at our production of the world’s largest oil and gas unofficial meetings with potential the company, and journalists sites. Annual maintenance is necessary to ensure equipment asset reliability, continued production production and service com- partners and colleagues. In the received the latest news on KPO integrity, and a reduction in the risk of unscheduled outages. We believe this will help us to keep our panies, international financial opinion of all participants, the operations, as well as the main commitment to excellence in the environmental, health and safety aspects of our operations». organizations, and repre- International Conference is the events related to the Nurzhan Kamalov, KPO Corporate Affairs & HSE Controller, commented: “RoK law places specific sentatives of official government place where one is able to not development of Karachaganak, obligations on operators of industrial facilities to carry out inspections of plant and equipment to circles from all over the world. only announce achievements, as described in the special issue ensure the integrity of plant. In order to undertake this work, facilities must be shutdown with the The Kazakhstani govern- but also to share problems, of the KPO newspaper the need to safely dispose of hydrocarbons prior to inspection and maintenance. In accordance with ment, represented by the Ministry conduct negotiations, make Karachaganak News. safety requirements, this activity may also necessitate some flaring, which can be seen from the of Energy and Mineral Resources deals, and learn about new The KPO’s exhibition booth flare stacks and may be associated with some noticeable noise. This can be more evident at night”. and KMG, traditionally take an advancements in the high has attracted great attention on “KPO has a comprehensive environmental monitoring programme that includes the continuous active part in the exhibition. technology, on changes in the part of numerous visitors. On monitoring of air quality in and around the field. KPO”s Ecology Control Group has four fixed This year, over 400 foreign legislation or issues surrounding the final day KPO was awarded Environmental Monitoring Stations and one mobile laboratory that provide continuous air quality and domestic companies the regulation of environmental a special prize for the best booth monitoring data. In addition, Gidromet LTD carries out the sampling of air quality around the SPZ participated, including the BG operations. design as well as a certificate of boundary and in the villages twice a day. The data is reported in local newspapers on a monthly Group, Chevron, Shell, LUKOIL, Great interest was generated gratitude for the active basis. The ECG also investigates complaints that may be brought to their attention from the local Total, Statoil, Agip KCO, KMG, among all participants by the participation at KIOGE-2005. community and informs relevant parties as required”, added Kamalov. 10 PRESERVING THE ENVIRONMENTAL BALANCE KPO COMPLETES

“Karachaganak Petroleum the environment, but the DRILLING OF NEW WELL Operating B.V. (KPO) has company is managing to lower it With the retrieval of the final whipstock on Sunday 7th produced a new video film called to a safe, minimum level. The August, the drilling of 5887 well have been completed in the “Preserving the Environmental main goal of the environmental Karachaganak field. This is the last well in the Phase 2M appraisal Balance” which is mainly programmes is to protect the air, programme. Although the process of completing the well is still designed for residents of soil and water, and the flora and going on , it is worth recognising the great achievement of this Burlinskiy district of WKO. fauna of Karachaganak. The programme and of the very wide range of people across KPO The main idea of the film is company develops an annual and the Service Companies with the support from Parent to inform clearly on KPO’s monitoring programme in Companies, which are partners in the international consortium, activities, the facilities ensuring accordance with the operating the Karachaganak oil and gas field. safe production, and health requirements of environmental The Phase 2M appraisal programme was approved by ConCom protection of people residing legislation, and this is agreed on 17th of March 2003. This was a programme of deepening well nearby the field. Computer upon with ecological, sanitary- 910 and 4 new single branch horizontal wells. drawing is widely used in the film epidemiological and subsoil The original schedule anticipated completion of this programme to simplify the understanding on preservation authorities. Under by November 2005, however, it was completed in August, three how the production facilities work this programme, a contractor is months ahead of schedule. The cost presented to the ConCom including the system of selected to carry out the work. was $145 million, but the work was done much below this cost. emergency alarm stations. The Since 1996, the Gidromet Ltd lab In place of delivering 4 single branch horizontal wells with only continuance of the video film is has been the main 2 wells cored, we have delivered 2 single branch horizontal, one 18 minutes. Karachaganak contractor for two branch multilateral and one three branch multilateral. This Thus, the audience will environmental monitoring. They provides us with production from additional 3 reservoir sections receive short information on new are currently the only laboratory compared with the original commitment. In addition, cores were production facilities and in Kazakhstan that is accredited taken in 3 of these wells as part of a very comprehensive evaluation refurbished ones, wells, and a by the state standards system for plan. constructed a 160 MW capacity all environment components. In the FPSA of 1998 and the Design Project of 2000 power station in KPC. However, The environmental monitoring development of Object 3 was recognised as potentially uneconomic. any production operations results show that during the last At the end of 2002 we were still in the same situation as the inevitably affect the environment. 5 years the maximum performance of single branch horizontal wells was still unproven This is why large investments on permissible concentration for and the development of Object 3 was still not economically secure. the part of KPO are channeled pollutants has not been Having completed the Phase 2M appraisal plan, the well results to projects which guarantee the exceeded. The company meets are very encouraging. The horizontal wells 5488 and 5790 have protection of the environment the air quality norms across all moderate and very high productivity respectfully. The multilateral and the health and safety of the controlled parameters. well 6394 has very high productivity and well 5887 has very high community. KPO not only monitors the reservoir contact. The multilateral design of 5887 has a much greater While developing the field quality of the air in the field, but probability of encountering good reservoir quality than vertical or KPO is using the best also at the settlements in the horizontal well type. This well design concept is a more secure way international technologies. KPO nearby vicinity. 11 villages are of obtaining high productivity from the poorer reservoir quality areas is continuing to conduct a large being monitored, including The Karachaganak lands- dollars to implement dozens of of Object 3, and improve oil recovery. The well has yet to be tested number of joint research projects Berezovka, Zharsuat, Dimitrovo, cape has begun to change for the environment protection me- to confirm the productivity performance. The very poor productivity with Kazakhstan institutes and Karachaganak, Zhanatalap, better: during the last few years, asures. These investments have performance encountered in the 910 deepening is a reminder of universities, and is carrying out Karakemir, Uspenovka, Aman- over 400,000 trees have been helped preserve the nature of the the major challenges we faced at the start of this programme. operations in accordance with geldy, Bestau, and Tungush, planted. They protect the soil region; people sow grains on this We should not underestimate what it has taken to for us all to the legislation of the Republic of LLP. Ecological posts have also from wind and erosion, clean the land, breed cattle and poultry, challenge the way we do things and push our design envelopes Kazakhstan, and in close been installed in the villages in air and create a favorable animals have gained new and operational experience to deliver 5887. The programme success cooperation with local regulatory the vicinity of the field. Local microclimate, with birds and habitats and rare species of represents a great commitment and the success of a systematic agencies, Akimat, Maslikhat and residents can be assured that animals obtaining new habitats. plants and animals listed in the development of our capabilities. the community. the specialists at these stations Since assuming the opera- Book of Endangered Species Object 3 contains some 470 million tonnes of oil in place, nearly 4 billion barrels. With this proven tool kit of well types and the further Naturally, it is not possible to are monitoring the quality of the torship of Karachaganak KPO have appeared anew on the reservoir understanding developed, we have taken a major step completely eliminate impact on air around the clock. has invested over 100 million Karachaganak land. forward in developing this world resource. NICE TRIP! KPO STAFF RECEIVE CERTIFICATES We are conducting a regular albums with enthusiasm. The OF HONOR FROM MINISTRY OF ENERGY AND visit to villages near the visit on the part of the KPO Karachaganak field accom- employees has become a MINERAL RESOURCES panying representatives from positive tradition, and close the KPO sponsorship relations have been established Some pleasant news was received recently at KPO from the RK committee, which have the with the teachers. An art school Ministry of Energy and Mineral Resources. In the letter, which was mission of handing out presents. known as Levsha exists at the signed by the RK Minister of Energy and Mineral Resources, Vladimir Before the beginning of the new Priural’e School, with N. Shkolnik, it was reported that a number of KPO employees have school year, all parents do their Nyudyulchiyev as its headmaster. been awarded certificates of honor by the Ministry of Energy and best to prepare everything In June alone, 450 kids from Mineral Resources for their conscientious work and contribution to necessary for the children nearby villages became the successful implementation of the Karachaganak project, and in connection with the celebration of the Day of Oil and Gas facility starting the school year. KPO members of crafts groups. workers. has decided to allocate funds for Teachers can now pick the The list of those awarded included the following KPO Employees: school supplies for those who most talented children, who will among all of the district schools. this village. For many Dauletov Ermuhambet, the superintendent of the drilling operations have difficulty providing become real artists. This is now Many graduates from last year schoolchildren, the presents division, Isataev Muhtar, supervisor of the drilling division, Koyanbaev everything for their children. The possible thanks to KPO, which had received educational grants. were just on time, and made the Murat, the duty superintendent of Unit-3, Lukpanov Maksut, KPC children received backpacks provided funds for the purchase We attended the teachers’ lives of the parents easier. supervisor, Djakupov Aybek, HSE techician. discussion regarding the Overall, the KPO sponsor- containing school supplies, of equipment and materials for In addition, the letter included a request for KPO management preparation of the school- ship committee gave 205 school including notebooks, albums, the school, and provided to conduct a presentation on the certification of the abovementioned children for their lessons. packages to schoolchildren from and coloured paper. transport services. Teacher, T.A. employees. With wishes for further 8 villages near the The Priural’e School was the Kornienkova thanked KPO for the The certificates to KPO employees were awarded by KPO success during the new school Karachaganak field – first to meet with us. There was constant support and assistance General Director Paolo Campelli and Production Director, Cameron little space in the bus because on behalf of the teachers and year, we continued on our way Berezovka, Uspenovsk, Crowford, who thanked them for their personal contribution to the of the multi-colored school bags, children. to the Karachaganak School, Zhanatalap, Dimitrovo, development of the Karachaganak deposit. They also noted that which contained supplies that Our path continued on further where principal N.K. Osmanov Zharsuat, Priural’e, Bestau and the company is proud of its employees, who have improved the image smelled of fresh typographic to the Zharsuat School, which is met us with the schoolchildren. Karachaganak. We hope that of the company. dyes. The children were happy one of the most beautiful schools Only 30 children will begin the children will appreciate the to unload their presents, and following the repairs that were lessons on September 1st. Due presents from KPO, and their they compared the pictures on sponsored by KPO. This year, the to the difficult living conditions, new notebooks will contain only the school notebooks and Zharsuat School took first place many residents are now leaving good grades. SUMMER HOLIDAYS IN ITALY LETTER FROM VILLAGE AKIM TO KPO During the summer holidays, 40 schoolchildren from Western- Kazakhstan region had wonderful time at the summer camp The KPO’s recently introduced project for rural for them. Cesenatico at the Adriatic Sea. Besides, the children had not just a children called “Mobile Art School” covering six Children are interested in acquiring new rest but replenished their knowledge about the history and culture of nearby villages is already producing real results. knowledge, which is a pleasure to their parents. the Ancient Roman Empire. Days spent in Italy have become Not long ago KPO received a letter from Akim This is not just a mere hobby, for many of them it unforgettable to all the schoolchildren. of Priuralniy village addressed to General Director could be a profession in the near future. Real The trip to Italy was organised and sponsored by Corporation Paolo Campelli. The letter reads as follows: professional, interested people tech wood which is the world leader in offshore and sub-sea, gas pipe laying Akimat, teachers and the community of carving, engraving, sewing, embroidery work, and and installation services. Priuralniy village would like to express appreciation painting. This school is headed by a famous When the children arrived home, the Department of Education of “Mobile Art School” establishment. Since April craftsman in the region Nikolai Nudilchiev, and of West Kazakhstan has sent a letter to Pietro Cavanna, the Vice- 2005 “Levsha” school conducts training for the the teachers M.Nukayev, A.Bergarriyeva and S. President of Eni Corporation in Kazakhstan, and expressed sincere children as part of the programme on supporting Mitrofanenko. gratitude to him for arranging the trip for the pupils. the rural areas. We are aware that their activity is Children are happy to visit the school and learn It is necessary to note that a group of pupils to travel to Italy sponsored by KPO. During this period the children something new. We hope that this activity will be consisted of the best pupils of the region and also pupils from needy defined the disciplines which are mostly interesting expanding in the future”. families.