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KPO Committed to Social Welfare
The Karachaganak field, located in west Kazakhstan, is one of the world's largest reserves of oil and gas condensate. Occupying an area of 280 km2, it contains over 1.2 billion tonnes of oil and condensate, and over 1.35 trillion m3 of gas. The field is being developed by the Karachaganak Petroleum Operating B.V. (KPO), a consortium of four multinational companies, including BG Group (32.5%), Eni (32.5%), Chevron (20%) and LUKoil (15%), with total investments exceeding $4.3bn.
KPO is operated in compliance with the Final Product Sharing Agreement (FPSA) which was signed by the consortium's partners and the Kazakhstani government in November 1997. Under the agreement, KPO will develop Karachaganak until 2038.
Karachaganak is a crucial participant in the social, economic and cultural life of the West Kazakhstan oblast. The field development provides both jobs and substantial revenues for the local and national economies. It is noteworthy that KPO's priorities are social welfare, sponsorship, support for small and medium-sized business, and child and youth projects.
The consortium invests $10m annually in social welfare for the region within the terms of the FPSA. The welfare projects comply strictly with the regional needs thanks to the local authorities' supervision. As a result of this interaction, the local people can now enjoy new schools and hospitals, improved water supply, sponsored culture and sports, assistance for those in need, and the promotion of youth projects.
Contribution towards the Health of Kazakh People
Healthcare development support is the major priority of the KPO social programme. The consortium has already made a considerable contribution by constructing the Kaztalovsk and Aksaisk hospitals, reconstructing a hospital for infectious diseases and renovating the cardiac centre of a sanatorium which had been standing idle. KPO has fitted out these facilities with all necessary up-to-date medical equipment in addition to investing in construction works.
The Red Apple anonymous telephone service offers assistance concerning family planning, sex education for young people, AIDS, and advice on a healthy life style in Uralsk. Created by the Union of Priuralye Women two years ago and supported by KPO, this service is in high demand among locals today. Red Apple has also set up a branch office in Aksai with a day-and-night telephone service. It also works in rural areas and gives information by radio and television.
KPO supports another project created by the Union of Priuralye Women, which is aimed at finding benefactors for orphaned children. In addition, the consortium has undertaken a project for summer holiday and spa treatment for pensioners and the children of low income families. In 2006 alone, KPO sponsored 150 children and 200 country people in Burlinsk region, the West Kazakhstan oblast, in order to rise their health standards.
Support for Education and Culture
Considerable attention is being paid to the education and cultural spheres. Marat Bisengaliyev, an eminent violinist, the West Kazakhstan Oblast Administration, and KPO are working together to organise the International Violinist Contest in Uralsk city, which is the foremost project in the oblast's educational and cultural life.
The company has provided generous sponsorship for this prestigious musical forum for the period of three years.
A mobile school of arts which is aimed at aesthetic development and professional education of children and youth in distant rural areas is another of KPO's projects. Professional artists, sculptors and teachers of arts, handcrafts, chase, embroidery, etc. have been invited. As a result approximately 500 young people in the rural areas have acquired some basic knowledge and skills in the arts.
It is noteworthy that KPO regularly provides financial support to the schools located near the Karachaganak field. The consortium fitted out several schools with class-room furniture, sports gear, musical instruments and audio equipment. In addition, 156 schoolchildren from families on low income in eight populated areas neighbouring the field have received copybooks and school supplies.
Recently KPO completed the construction of a secondary school with capacity for 1,296 children in the Severo-Vostok microdistrict in Uralsk. Previously the consortium has provided financing for the construction of a secondary school in the 6th microdistrict, the city of Ural, and in the Zachagansk Azhbai, Ulenta and Dzhambul rural areas. KPO's investments in the construction of secondary educational institutions have exceeded $13m.
Employment Support
KPO takes an active part in projects aimed at sustainable economic development by assisting the local authorities in providing micro-credits, supporting Kazakhstani contractors, and organising professional education and occupational re-training of the unemployed.
For example, the consortium participates in a joint project with the Union of Priuralye Women which has helped 20 unemployed women of the West Kazakhstan oblast to complete an entrepreneurship training programme comprising small business management basics, accounting, taxation, business planning, and computer literacy. The project was launched in 2001 to support small businesses, create new jobs and strengthen the local economy. Most of the women who completed the programme have since become successful entrepreneurs.
The company believes the youth development depends on socio-economic and political conditions. In this connection, KPO provided financial support to Tarlan, a newly created youth organization, which plans several programmes for urban and rural youth aimed at providing consultation and assistance to young entrepreneurs and farmers in the Burlinsk district, the West Kazakhstan oblast. Another important project of KPO was establishing the youth employment service in Aksai.
The company also co-operates with Damu, an oblast association of entrepreneurs, within the Business Incubator project. Apart from the assistance to small businesses and farms through micro-credits on favourable terms the centre provides marketing and legal services, and provides advice for entrepreneurial novices on business planning.
KPO has invested in hothouse construction near Aksai to supply vegetables to local schools, outpatient hospitals and nursery schools at low prices, and also to create new jobs. The hothouse is fitted out with modern drop irrigation technology which helps to attain high crop yield. It is planned to extend the hothouse area to 6,000 m2 in the next few years.
KPO's charity activities show its commitment to social welfare in west Kazakhstan. The company invests heavily in the Disabled People Society in the Burlinsk region and the regional committee of the Kazakhstan Red Crescent Society, both of which provide welfare to people in need of social support.
KPO has set up a charity commission which revises charity requests and provides necessary social support and sponsorship.
KPO and Environment
KPO has made clear that it considers environment protection as its utmost priority, intended to set an excellent example to the entire oil and gas industry of Kazakhstan. The company developed a new method of measuring percentage by weight of sulphur in the soil which can be successfully applied by other Kazakhstani enterprises.
Pursuing the goal of meeting the world's best environmental indices in Karachaganak, the consortium has applied several up-to-date technologies which have significantly reduced emissions in the field. Installation of flash gas compressor units at UKPG-3 gas processing plant has enabled emissions to be reduced by a factor of 20. The consortium's environmental investments have exceeded $100m over the entire period of operation.

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