Environment protection

The HSE policy of Zarubezhneft JSC defines ecological well-being as the basis for economic prosperity of the company.

In 2018, a supervisory audit of CC Zarubezhneft JSC, LLC "JC "RUSVIETPETRO"", Zarubezhneft-Dobycha Kharyaga LLC was successfully conducted on confirmation of the Certification for compliance with international standards ISO 14001: 2015. The subsidiaries RMNTK Nefteotdacha JSC and Zarubezhneftestroymontazh LLC were introduced into HSE Management System certification perimeter. A diagnostic audit of ZARUBEZHNEFT-Dobycha Samara LLC was conducted for the compliance with the requirements of international standards ISO 14001: 2015 for introduction into the certification perimeter in 2019.

In 2018, subsidiary companies of Zarubezhneft Group of Companies performing their operating activities in the Arctic zone of the Russian Federation Zarubezhneft-Dobycha Kharyaga LLC and LLC “JC “RUSVIETPETRO”) continued working on biodiversity preservation, as per the approved Programs. The observation program for the established lists of indicator types by Company activity regions is included in the Environmental Monitoring Program.

Caring for the Far North fragile ecosystem has traditionally been one of the Company’s priorities: in 2018, LLC "JC “RUSVIETPETRO” released 154 thousand whitefish juveniles into the Usu River (the Pechora River basin). Since 2014, by efforts of LLC "JC “RUSVIETPETRO” over 800 thousand juveniles of valuable fish species have been released into the Pechora River basin.

Starting from 2014, Zarubezhneft JSC has undergone an independent Ecological Openness assessment, according to the World Wildlife Fund (WWF) rating criteria. Among the 22 largest oil and gas companies in 2018, Zarubezhneft JSC landed second, rising from the 5th place awarded in 2017.

As per the Search and Valuation of New Projects Standard, the Company pays special attention to environmental aspects and environmental risk assessment. All projects undergo Environmental Audit, the main criterion of which is the absence of specially protected natural territories within the contract area. During the project implementation, an environmental impact assessment is carried out, measures are developed to reduce landscape fragmentation and disturbed areas.

Zarubezhneft JSC has uniform HSE requirements to contractors. The regulations establish similar requirements for compliance with environmental standards both for contractors operating in the Company, and Zarubezhneft JSC subsidiaries. Collecting mushrooms and berries, hunting and fishing in the area of the Company's projects is prohibited.

The subsidiaries of Zarubezhneft Group of Companies monitor the integrity of interfield oil pipelines on a monthly basis that is one of the priorities of the Company's Environmental Policy.

In 2018, the level of current financing of environmental protection activities in subsidiaries located in the Russian Federation amounted to about RUB 163.8 million, which is something like the level of 2017.

One of the most important environmental challenges facing the Company is minimizing the effects of drilling waste through their disposal and use followed by the elimination of sludge pits. In 2018, 4 drilling mud pits were reclaimed. There are no oil-contaminated soils on Zarubezhneft JSC balance sheet.

In general, regular measurements of the air environment, soil and snow, surface water and bottom sediments were carried out in the territory of all licensed sites of Zarubezhneft Group of Companies enterprises, as part of local environmental monitoring and industrial environmental management.

Observation data are compared with the background values of natural indicators.

During the reporting period, the maximum permissible concentrations (MPC) in the territory of the Russian Federation were not exceeded.

The priority area in 2018 was the implementation of the Gas Program for rational use of associated petroleum gas (APG) for the period 2018-2022 relative to Zarubezhneft Group of Companies. As part of the program implementation to reduce emissions of pollutants into the atmosphere, LLC “JC “RUSVIETPETRO” implemented the following activities:

  • construction of the oil-gas gathering pipeline from the North-Oshkotynskoye oil field to Sikhoreyskoye field was completed; the pipeline was commissioned on July 31, 2018.
  • This gave an opportunity to completely eliminate APG flaring at the flare unit of this field;
  • construction of a compressor station for gas supply from separation “low side” to main compressors of the North-Khosedayu Central Production Facility was completed; commissioning works have begun.

In 2018, at ZARUBEZHNEFT-Dobycha Samara LLC, the mobile Preliminary Water Discharge Unit was put into operation at Kirsanovskoye field with an incorporated line heater.

Owing to the action items completed as part of the Gas Program 2018, the use of APG for own needs for the generation of heat and electric energy increased. The volume of production and use of APG is accomplished based on indications of gas metering units. The level of APG use in the Russian segment in 2018 was 87.5% (the case of 2017 – 84.7%).

Gross atmospheric emissions for Zarubezhneft Group in the Upstream segment, thous. tons
atmospheric emissions 2017 2018 + / –
solids 0.549 0.437 –0.112
sulphur dioxide 7.507 6.909 –0.598
carbonic oxide 8.874 7.914 –0.960
nitrogen oxide 1.391 1.213 –0.178
hydrocarbons (without volatile organic components) 10.115 8.804 –1.311
volatile organic components 4.069 3.900 –0.169
other gaseous and liquid
gross atmospheric emissions 32.50 29.18 - 3.33
Associated gas production and utilization for Zarubezhneft Group of Companies in 2017, MM m3
Company APG production APG usage for own needs % of APG usage
LLC “JC “RUSVIETPETRO” 122.20 107.00 87.6
Orenburgnefteotdacha JSC 2.12 1.76 82.9
Ul’yanovskneftegaz LLC 0.54 0.51 93.9
Total 124.86 109.27 87.5
for reference: Zarubezhneft-Dobycha Kharyaga LLC 210.60 60.00 28.5

Associated petroleum gas produced at Kharyaga field is high-sulfur that encumbers its value-added use. According to Kharyaga field design infrastructure, for further development of the fourth stage, Zarubezhneft-Dobycha Kharyaga LLC plans to continue construction and commissioning of a comprehensive gas treatment unit. In 2018, the level of APG usage in the Company made 28.5% (the case of 2017 - 24.3%). It is planned to reach the level of 95% by 2022.

In 2018, Brod Refinery A.D. continued implementing the plans for processing acidic sludge into safe inert materials, followed by the use of processing product in storage ponds reclamation. The environmental impact assessment (EIA) of the acidic sludge solidification technology was completed; the technology received a favorable conclusion.

SPECIFIC INDICATORS IN ENVIRONMENTAL CONSERVATION AREA IN TERMS OF GROUP OF COMPANIES IN THE RUSSIAN FEDERATION

Implementation of the gas program in 2018 allowed for decreasing the specific indicators of pollutant emissions that decreased in comparison to 2017 from 6.94 to 6.09 tons per thousand tons of the oil produced, as well as specific emissions of greenhouse gases from 0.2 thousand tons of CO2 equivalent per thousand tons of the oil produced, up to 0.17 thousand tons of CO2 equivalent per ton of the oil produced.

Air emissions, tons / thousand tons

In 2018, in comparison to 2017, drilling volumes increased, which led to an increase in the drilling waste at the fields of LLC “JC “RUSVIETPETRO” and Zarubezhneft-Dobycha Kharyaga LLC. The specific indicators of waste production increased from 5.12 tons per 1 thousand tons of oil produced in 2017 to 7.9 tons in 2018. In the composition of the waste produced, more than 90% by weight are waste of hazard class IV - drill slurry. As per the current Company’s internal regulations, all drill slurry was processed to inert material. Slight increase in drilling volumes had also an impact on the increase in water usage from 1.6 thousand tons per ton of the oil produced in 2017 to 1.67 thousand tons in 2018.

GREENHOUSE GASES EMISSION DECREASE

Zarubezhneft considers the Kyoto Protocol mechanism an important step towards increasing the efficient use of associated gas. The Mechanism of Activities Implemented Jointly (AIJ), provided by the Kyoto Protocol to the UNFCCC, remains one of the most serious incentives for the realization of associated petroleum gas disposal projects, and other projects aimed at the reduction of atmospheric GHG emissions.

GHG emissions in the Russian Federation, thousand tons / thousand tons

As per the “Methodical Recommendations and Guidelines for the Quantitative Calculation of the Volume of GHG Emissions by Enterprises Conducting their Business or Other Activities in the Russian Federation” (approved by the order of the Ministry of the Natural Resources and Ecology of the Russian Federation No. 300, dated June 30, 2015, registered with the Ministry of Justice of the Russian Federation on December 15, 2015, registration No. 40098), Zarubezhneft JSC determined the atmospheric GHG emission volume for 2018 as a result of the production activities of the enterprises.

The retention of investments into the main environment protection capital in 2018 is associated with the scheduled implementation of the gas program measures. The costs for other environment protection measures (necessary technical maintenance of the water treatment systems, environmental monitoring in part of the Biodiversity Conservation Programs implementation) remained unchanged.

Greenhouse gas emission dynamics, CO2 equivalent
Greenhouse gas emission dynamics, CO 2 equivalent
Investments 2015 2016 2017 2018 + / -
Investments in equity to environment protection 41.36 97.80 270.22 228.21 –42.01
Negative impact fee 19.89 27.28 28.51 20.38 –8.13
Pollution fines 0.94 0.09 0.32 0.51 0.19
Current environmental costs, incl.: 196.95 142.63 154.79 163.80 9.01
Water bodies protection 3.00 4.58 7.68 23.00 15.32
Air protection 1.58 1.65 3.50 3.70
Land resources protection from industrial wastes 155.00 111.66 131.52 118.90 –12.62
For land reclamation 31.19 12.99 12.09 17.40
Other environmental protection areas 6.18 11.75
Total 259.14 267.80 453.84 412.90 –40.94

INTERACTION WITH THE STAKEHOLDERS

To maintain and establish constructive relations in project implementation, Zarubezhneft JSC strives for interaction with all stakeholders.

Since 2009, a cooperation agreement between LLC “JC “RUSVIETPETRO” and the Administration of the Nenets Autonomous District has been in force on the issue of interaction with indigenous small-numbered peoples of the North. Since 2017, Guidelines on behavior in the territories of traditional environmental management of indigenous small-numbered peoples of the North have been in force at Zarubezhneft-Dobycha Kharyaga LLC.

To increase the Company’s publicity towards the stakeholders, on December 6, command-staff exercises (CSE) were carried out at Kharyaga field on eliminating the emergency oil spill in winter conditions. One of CSE goals was also checking the readiness and testing the actions of the extraordinary accident rescue unit of Zarubezhneft-Dobycha Kharyaga LLC under unfavorable weather conditions in winter.

The Company has clearly demonstrated its striving to minimize the risk of oil spills and environmental protection. Representatives of the NAA Union of reindeer herders and the regional social movement “Association of the Nentsy Peoples (Yasavey)” were among the invited.