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SON2013EN Mundaricat Duzeliw

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SON2013EN Mundaricat Duzeliw Contents: 2 Message of the President of SOCAR 48 Environmental activities Rovnag Abdullayev 4 About the report 74 Innovation activities 5 About the State Oil Company 80 Support to the regional development 16 Corporate management 85 Complying to the GRI Guidelines 18 SOCAR Committees 22 Business Ethics and Anti-Corruption activities 24 Relations with stakeholders 27 Human Resources 94 Key Financial Indicators (Appendix 1) 42 Occupational Safety and Health 95 Independent Assurance Statement SOCAR • 1 Message of the President of SOCAR Rovnag Abdullayev We are proud to present our second non-financial report which was prepared according to the UN concept on sustaina- ble development and GRI sus- tainability reporting guidelines. Together with SOCAR’s* non- financial parameters, this re- port reflects on the steps taken to achieve social and economic targets, preserve the environ- ment and resolve environmen- tal issues. Unlike the last year’s report, the 2012 report demonstrates that the Company’s deci- sion-making process is guided by the principles of comprehen- sive approach towards social and economic development along with environmental pre- servation. This has been made possible by applying transpa- rent and advanced international standards and creating added value in operations. Compared to the last year, this report covered more parame- ters which reflect the results of the Company’s sustainable development. We cannot call 2012 an or- dinary year. During this year the Company not only man- aged to preserve its dynamic development in the Caspian region but also took significant steps to become a reputable organization on a global scale. This proves that the Company successfully follows defined strategic priorities and adopts balanced administrative deci- sions. We made the “Trans-Anatolian Gas Pipeline (Tanap)” contract which we consider to be one of the remarkable events of 2012 *State Oil Company of Azerbaijan Republic 2 • SOCAR Message of the President of SOCAR Rovnag Abdullayev This project in the value of of the European finance market monitoring system of gases 10 billion USD will support and through utilization of our generating greenhouse effect, economic development of our own internal resources. reduction of leakages in gas country and will play a signifi- In 2012 the general offer for lines, improvement of ener- cant role in terms of provision five-year Eurobonds in the gy efficiency in technological of energy security of the EU amount of 500 million USD processes, application of inno- states along with transforming amounted to 4.6 billion USD. vative technologies, cleaning the brotherly nation of Turkey We envisage placing Eu- of oil polluted areas and land- into the energy sale point of the robonds in the amount of 1 scaping and implementation of region. One of the large pro- billion USD to the CEEMEA different types of information jects implemented by SOCAR market for the period of ten and public awareness cam- is the organization of the forum years in 2013. paigns. Based on the Actions on the establishment of new The funds generated from Plan, a compressor station was and modern Oil and Gas Petro- placement of Eurobonds are commissioned in the “Gunashli” chemical Complex that will be expected to be used to pay field of the “28thMay” Oil and able to produce products in line back the loans and increase Gas Production Unit. with international standards the volume of oil extraction. As a result of project implemen- based on the instruction of the Today, the economic reforms tation, 310 mlnm³ of associated President of the Republic of undertaken by the Compa- gas is extracted and trans- Azerbaijan, IlhamAliyev. Parti- ny have embarked on a new ported to the system annually. cipation of more than 140 quality stage. Provision of Vacuum compressors were in- different companies from more transparency in financial and stalled to dispose of associated than 30 countries in the non-financial reports, recon- petroleum gas which is regular- “SOCAR OGCP” forum orga- struction of the accounting ly emitted in the volume of 200 nized by SOCAR in April 2012 system in line with international mlnm³ to the air from the fields is an exemplary evidence of standards, improvement of the in the “Oil Rocks” Oil and Gas the existing interest towards system of audits, availability of Production Unit. As a result of this project on the international sufficiently substantiated legal technical measures taken at scale. framework to fight against a oil refineries, the actual waste The estimated payback period social calamity, corruption, has generated from the refining of 1 for this project with the ove- increased the trust towards us ton of oil was reduced by 0.14 rall expected value of 15 bil- in the global financial market tons. lion USD is approximately 7-8 and stimulated renowned ener- It is undeniable that the oil and years. gy companies to cooperate with gas sector will be the driving Of course, extensive funding us. force of the country’s economy is required for large and small SOCAR is successfully im- for the years to come. Along size projects implemented by plementing its “Strategy to with increasing extraction of oil SOCAR which will bring eco- reduce the Impact on Climate and gas we intend to look for nomic revenues into our co- Change”. In order to implement new markets for our energy re- untry. Since our company is this strategy the actions plan serves, improve the infrastruc- state owned, some parts of the was developed which is aimed ture, use new technologies, projects are funded from the at revealing and realizing the take measures for environmen- state budget, while the re- capacity to help reduce the tal preservation, protect health maining bigger part of funding impact on climate change at and safety of our employees comes from foreign investors, the SOCAR structural units. and develop alternative energy loans acquired from financial This Plan envisages estab- resources. institutions, issuance of Eu- lishment of the regular meas- robond loans as a new segment uring, reporting and improved SOCAR • 3 About the report In order to establish anopen dia- activities in the fi eld of sustainable simulations; logue with its stakeholders and to development. This Report covers • Increasing effi ciency of the ensure transparency of the ope- the operations of SOCAR for the budget expenses and improve- rations it carries out, the State Oil period from January 1, 2012 to ment of the accounting; Company of the Republic of Azer- December 31, 2012. Compared • Protection of the environment baijan (SOCAR) issued its fi rst to the report submitted last year, and safeguarding nature; Sustainability Report describing this report refl ects the operations • Effective use of the natural re- economic, social and environmen- of the Representative Offi ces in sources; tal consequences of its operations Georgia, Ukraine and Turkey and • Recovery of the natural resour- in September, 2012. The issues its subsidiary companies together ces and recoverable energy covered in the Report have pre- with the Head Offi ceof SOCAR • Provision of the environmental viously been analyzed in other and its structural divisions. safety; annual reports of the Company, Due to fact that major manufac- • Providing people with opportuni- on the corporate website and in turing process are focused in Pet- ty to obtain modern level educa- mass media. kimA.S holding of SOCAR Turkey tion, normal use of medical servi- The Report was prepared in all relevant rates mentioned in this ces and etc. accordance with the G3.1version report refer to this Holding, and Independent audit of this Report of “Global Reporting Initiative”[1] are based on the major activities was done by “Ernst & Young” Guidelines on sustainability re- and results observed within Pet- Company and the results of the porting (hereinafter referred to as kim A.S. audit were confi rmed to be cor- “GRI Guidelines”). The content In general, Sustainability Reports respondent to GRI “B+” applica- of the Report is based on impor- are prepared according to the tion level. tance, stakeholder coverage, sus- concept of the Company in this The Statement of Assurance tainability and integrity principles fi eld and embrace the following issued by the Ernst & Young” can established by the GRI Guide- principles: be viewed at pages 94-95 of this lines. At the same time, in order • Supporting the initiative that en- report. to ensure the quality of the report sures the Company’s economic according to the GRI Guidelines development; Please forward all your concerns the Company was guided by the • Strengthening relations with the and questions regarding this balancing, comparability, exact- stakeholders; report to Lala Qasimova, Senior ness, timeliness, clarity and relia- • Realization of the investments, economist of SOCAR’s risk man- bility principles. social expenditures, import, agement department at email The Company plans s to issue export, added value and its com- address: annual reports on results of its ponents and carrying out other [email protected] 4 • SOCAR About the State Oil Company Due to application of modern ma- nagement mechanism, increasing the effi ciency of production proces- ses, introduction of scientifi c-tech- nical innovations the Company has entered the rank of the companies possessing international energy and great business opportunities and taken a goodplace in the global energy sector. At present the Company which was established by Decree No.200 of the President of the Azerbaijan Republic dated September 13, 1992 has great fi nancial and human resources (more than 65000 staff members) and successfully fulfi lls the tasks delegated by the state. The Company which the continu- ously expanding scope of activity is the main executor of the policy setby the state in terms of oil and gas sector development.100% of the Company belongs to the state.
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