Nostrum is focused on being a responsible operator in order to minimise as far as possible the Company’s impact on the natural environment. We abide by strict international environmental protection legislation and are actively working on GHG emission reduction initiatives.
Update on CDP
In 2019 our main environmental objectives included participation in the CDP (formerly Carbon Disclosure Project), which is a key way for companies to disclose their environmental impact and risk management, as well as continue to focus on greenhouse gas (GHG) emission reduction strategies.
Our CDP response was independently assessed and we are pleased to note that Nostrum received a ‘C’ grade. We are pleased with this scoring in our first year as it demonstrates the policies and procedures we have developed over recent years are positioning the Company to deal with the issue of climate change now and into the future. We will continue to engage with the CDP initiative in order to maintain an open dialogue both internally and externally, on this important issue.
Compliance with legislation
Nostrum engages an independent auditor to measure and evaluate our environmental impact. In 2019 AMEC was again engaged to undertake a “Health, Safety and Environmental Compliance Audit” and report upon the content, methodology and results of the environmental efforts at Nostrum during the year. Our 2019 AMEC report showed no non-compliance with Kazakh legislation or any significant environmental findings. The main conclusions drawn from AMEC’s 2019 audit were as follows:
- HSE management is in place and functional;
- Good behavioural safety is reinforced by strong leadership and personnel with good safety processes; and
- The Company has to focus on training for management of change process, permit to work system, risk assessment in order to improve general HSE performance.
Waste, water and soil management
The impact of Nostrum’s operational activities on the environment are monitored through detailed waste, water and soil management systems. The Company undertakes air, soil and sub-surface water testing to ensure sanitary and epidemiological compliance with Kazakh legislation.
In 2019, 100% of drilling waste was recycled by a contracted company. Soil and water survey results demonstrated compliance with all applicable environmental legislation.
GHG emission reduction and reporting
Nostrum seeks to minimise all GHG emissions and continues to invest in new technologies to improve GHG emission performance. Nostrum strictly adheres to both UK and Kazakh regulatory requirements with regard to GHG emissions and has been monitoring and reporting GHG emissions since 2011. In 2019, we participated in the CDP disclosure process to demonstrate our commitment to improvement and transparency in this area.
As a dually-listed entity, Nostrum also follows UK company law requirements regarding GHG reporting as required under the Companies Act 2006 (Strategic Report and Directors’ Report) – Regulations 2013, which discloses all emission sources. The Company’s GHG reporting period is aligned with the period in respect of which the Directors’ Report is prepared. No responsibility is taken for any emission sources which are not included in the consolidated financial statements. The results of the GHG emissions inventory are presented in the format recommended by the GHG Protocol.
The baseline in the GHG emissions allocation plan was set as the mean value of the total emissions for the years 2013-2014 (in carbon dioxide emissions equivalent). According to the established limit, GHG emissions for 2019 should not exceed the baseline. The following direct GHG emissions (Scope 1) sources have been identified: flares, heaters, incinerators, boilers, gas turbine plants, electric power stations, compressors and fugitive emissions.
Total direct GHG emissions (Scope 1) subdivided by gas types and by source types are summarised in Tables 1 and 2.
Table 1: Scope 1 GHG emissions subdivided by gas types (tCO2e)
GHG emission structure is shown in Table 1. The composition of the GHG emissions predominantly consisted of carbon dioxide and methane.
Table 2: Scope 1 GHG emissions subdivided by source types (tCO2e)
Stationary combustion sources formed the major portion of emitted GHGs. The reduction in emissions from mobile combustion is related to the fact that the majority of vehicles were transferred to a transport services company.
Indirect GHG emissions (Scope 2)
Nostrum does not use purchased steam, heating or cooling. Electrical power is the only such purchased power related to indirect GHG emissions, and it is supplied to Nostrum facilities via the Zelenovskaya distribution network (ZapKazREK JSC), through its subsidiary Batys Energoresursy LLC. The regional emission factor (0.27086 tCO2/MWh) was calculated using Methodological Guidelines for the Calculation of GHG Emissions from Electrical Power Stations and Boiler Houses (Astana, 2010) and the regional net thermal efficiency of Urals Natural Gas Fired Power Plants (73.3%).
Total direct and indirect GHG emissions (Scope 1 and Scope 2) and total GHG emissions are summarised in Table 3.
Table 3: Scope 1, Scope 2 and total GHG emissions (tCO2e)
|Direct energy (Scope 1)||222,546.2||207,349.6||254,332.0||254,003.2||223,008|
|Indirect energy (Scope 2)||5,482.3||2,262.9||640.3||559.2||297|
Emissions intensity ratio
Tonnes of CO2 per tonne of output is a recommended intensity ratio for the oil and gas sector, as per Appendix F of the Defra Environmental Reporting Guidelines (2013). Taking into account the variety of products of Nostrum Oil & Gas – crude oil, stabilised condensate, LPG and dry gas – the chosen intensity ratio is expressed in metric tonnes of CO2e (mtCO2e) per tonne of oil equivalent (mmboe).
Table 4 shows intensity ratios for total (Scope 1 and Scope 2) emissions in the period 2014-2018.
Table 4: Emissions intensity ratios for total GHG emissions
Nostrum recognises that hydrocarbon exploration and production is a major contributor to GHG emissions and consequently we have a responsibility to work to address climate change. One of our key CSR goals in 2019 was to minimise the impact of our operations on climate change. This remains a key goal for Nostrum. During the year we partnered with an external agency to assist us in understanding and reporting on potential impacts to our business. We hope this will be a key step in our ongoing efforts to address the issue of climate change long term within our business.
Climate change can affect our business through physical disruption to operations due to changing weather conditions, legislative and policy changes, technology to help reduce emissions, and future changing energy market demands. We plan to more rigorously assess the impact of climate change on our business in the near future, including through portfolio resilience testing. Climate change remains on our risk register for 2020.
Future GHG reduction initiatives
We are committed to reducing our GHG emissions, and future plans include:
- Optimisation of facilities operation, operations and maintenance schedule adjustment in function of reduced inlet feed, reduction of fuel gas consumption and flare volumes depending on GTU operating scenarios in 2020
- Emission tracking improvement – creation of monthly tracking system, about 5-10% reduction.
- Use of power from GTPP at 26 megawatts while wells drilling