At Nostrum, fostering a strong safety culture is essential for the well-being of our employees, the efficiency of our operations, and the integrity of our brand. Prioritising safety underscores our dedication to ensuring a secure and healthy workplace for all stakeholders. This commitment not only minimises workplace accidents and injuries but also builds trust and confidence within our team. Moreover, adopting a safety culture contributes to increased productivity, reduced operational expenses, and a boost in overall morale. In essence, cultivating and upholding a comprehensive safety culture signifies our unwavering commitment to employee welfare and business sustainability.

At Nostrum, our safety and environmental practices are based on four key pillars: HSE leadership, incident investigation, process safety and asset integrity, and contractor HSE management. Each pillar is fundamental to maintaining a safe, secure, and environmentally aware workplace. HSE leadership blends safety into every level of our company, while rigorous incident investigation enables us to learn from past experiences and continuously improve our processes.

Process safety keeps our operations safe, while effective contractor HSE management aligns everyone with our safety values. These pillars form the foundation of our comprehensive approach to HSE, reflecting our dedication to upholding the highest standards of safety, health, and environmental stewardship.

Beyond these, we enforce “Golden Rules”, provide extensive straining on safety practices and apply a comprehensive Governance framework as outlined in the TCFD Governance recommendations on pages 75-76 of our 2023 Annual Report.

In 2023, our Total Recordable Incidents Frequency rate dropped to 0.75 per million man hours, a 52% decrease from 2022. The Lost Time Incidents Frequency rate was 0.37, and there were no Road Traffic Incidents in 2023 for both Nostrum and our contractors’ operations.

Regrettably, we experienced a contractor fatality in a height-related incident. Prior to this, we had maintained a record of five years without any fatalities. We undertook comprehensive investigation and implemented measures to avoid such incidents in the future.

Nostrum notes that its activities are potentially hazardous. The Group’s management, employees and contractors are trained to understand that no accidents are inevitable as we strive to inculcate an environment in which safety consciousness and mitigating actions are such that zero incidents are possible and achievable. For all incidents, we follow our incident investigation procedure based on the “five whys” and “why tree” methodology to determine the root causes and apply SMART principles to mitigate future risks.

We require our contractors and suppliers to work to the same high standards as our employees, therefore effective contractor selection, communication and training in our safety culture and practices as well as strong monitoring are essential to maintain the high level of safety embraced by Nostrum.

In 2023, we continued with our contractor HSE management implementation and performed twelve external contractor HSE management audits to test compliance with our HSE management system.

Nostrum seeks to promote safe behaviour among its contractors and has established a wide range of methods to ensure that operations at facilities are carried out in full compliance with local legislation as well as Nostrum rules and regulations. In addition to the measures already discussed, Nostrum continues to use the hazard observation cards initiative introduced in 2019 (described more fully on page 57 of our 2023 Annual Report).

Our annual contractor HSE forum dedicated to Road Safety Rules compliance was held in October 2023. General directors and HSE Representatives from main contractors gathered to discuss their HSE performance results with the Company’s management. This year, we focused on HSE Golden rules and Road Safety compliance. The forum allowed for open discussions aiming to boost our shared dedication to a safe work environment. We are committed to ongoing dialogue and support to improve our HSE practices and achieve the highest standards of safety for all individuals involved in our operations.

In order to effectively manage the “Golden Rules”, Nostrum applies rigorous consequence management which means that we take a risk-based approach to guide people and leaders through the processes required when they witness or have reported to them inappropriate behaviour in the workplace. For serious violations of safety rules, staff and contractors’ risk immediate dismissal. For that purpose, consequence management is split into two categories. The more serious category which results in immediate dismissal is applied in case of alcohol/drug abuse. Less severe cases, such as safety belt violation, result initially in a warning followed by dismissal if a repeat violation is observed.

Golden Rules

1. Seatbelts must always be worn by the driver and all passengers.
2. Do not exceed the speed limit and reduce speed for impaired road conditions.
3. Do not use phones or operate devices while operating a motor vehicle
4. Alcohol and drugs of any kind (excluding approved medicines) are forbidden.
5. Where required, work with a valid permit
6. Obtain authorisation before entering a confined space.
7. Confirm that hazardous energy sources have been isolated, enclosed and tagged.
8. Obtain authorisation before overriding or disabling safety controls.
9. Never walk under a suspended load
10. Protect yourself against a fall when working at heights. In our operations there are several stages to ensure contractor compliance with HSE spanning from pre-contract award to contract close-out with significant roles for the contract owner, contract holder, contracts and procurement and HSE staff.

In 2023, Nostrum continued to implement the following activities carried out over the years:

• Planned /unplanned inspections of the technical conditions of the vehicles at Nostrum facilities by our employees and Contractor representatives.
• Road safety inductions, training and safety stand-downs are being held on a permanent basis with Contractor personnel.
• Ad-hoc inspections on road safety compliance (speeding, safety belt use, etc.) are held regularly.
• Nostrum ensures compliance with Road safety procedure, Journey management plan and procedure for organising and carrying out transportation of oversized cargo in order to ensure road safety compliance to the Company rules.
• The Routes for the transportation of oversized cargo are coordinated (accompanied if necessary) to ensure road safety along the route of movement of oversized cargo on the territory of Nostrum facilities.
• The passage of a medical pre-trip inspection by drivers of the Company and contractors is systematically controlled.
• Checks are being made of the safe condition for traffic of the carriageways of public roads, bridges, railway crossings and road structures on the territory of the facilities and along the route to Nostrum production facilities and back.

In 2023, no Tier 1 or Tier 2 process safety incidents were recorded at Nostrum’s production sites. According to the American Petroleum Institute’s definition, a Tier 1 and Tier 2 safety incident is an unplanned or uncontrolled release of any substances, including non-toxic and non-flammable materials, from a process that results in one or more of the following consequences:

• An employee, contractor or subcontractor incurs days away from work, injury and/or fatality.
• A hospital admission and/or fatality of a third party.
• An officially declared community evacuation or community shelter put in place, including precautionary community evacuation or community shelter in place.
• Fire or explosion damage of at least US$100,000.

The selection of appropriate maintenance strategies and the classification of equipment as safety critical or non- critical, is based on the impact that such equipment failure has on safety. Nostrum employs a specific safety critical equipment maintenance program whereby resources are allocated in order of priority with critical systems taking precedence.

Additional 2023 initiatives include:

• A pop-up window appeared on the screens when logging in every day with a safety reminder from the QHSE department.
• HSE Posters printed and displayed in prominent locations.
• Monthly QHSE Reports are issued to communicate HSE performance.

All vessels and main flow lines were inspected according to international and RoK standards at the frequencies described (2, 5 or 10 years). No defects were identified during the internal and external inspections. From 2023 onwards, all vessels and flow lines will require yearly inspection but this can be done externally without necessary shutdowns as was the case for internal inspections. The inspection will be focussed on wall thickness and, as such, provides the same information as before.  

In 2023, no industrial accidents or oil spills were recorded at Nostrum’s operations. The Company has established and successfully exercises an emergency response system and undertakes measures to prevent oil and oil product spills.

The Company has emergency response plans to improve our capacity to swiftly address unexpected occurrences, thus preserving operational continuity and mitigating adverse effects on individuals, the environment, our physical infrastructure, and our reputation. These plans are effectively communicated to our workforce, and those involved in emergency response undergo training to ensure proficiency in fulfilling their emergency responsibilities. We remain committed to upholding asset integrity and managing operations to effectively mitigate all significant risks throughout every phase of our activities.

Specifically, in 2023 emergency training of personnel has been conducted on a quarterly basis in order to prevent accidents and emergencies as well as to train personnel in emergency response in case of their occurrence according to Emergency Response Plans emergency scenarios at all hazardous production facilities. In 2023, we maintained emergency response training and exercises involving credible emergency ERP scenarios at all hazardous production facilities.

Hazardous production facilities at Nostrum include:

• Oil Terminal and Transfer Point in Beles
• CF-Rostoshi Oil Trunk Pipeline
• CF-ICA Gas Trunk Pipeline (GTP Orenburg-Novopskov)
• OTU and gaslift system
• CGTU-1,2 and LPG -1,2
• Well Operations and gathering system
• GTU-26
• MTS and RPMS
• Waste disposal area
• GTU-3 and LPG-3

During training drills at every facility, the emergency operations center organised and coordinated possible emergency prevention and responses to accidents, as well as to ensure fire safety. During quarterly drills held at the facilities – EOS, the whole range of issues related to accidents and emergency prevention and elimination procedures was considered.

Overall control of all emergency drills was overseen by the Field Director, who is responsible for the implementation of industrial and fire safety measures.

We believe that these actions help maintain the proper level of skills and competencies among employees and executives and ensure compliance with legal process safety requirements and corporate standards.

The Group strives to have zero operational spills. Nostrum continues to undertake initiatives to prevent and reduce spills that include drills and training teams, timely maintenance, repair and replacement of equipment, monitoring of problem oilpipeline areas, etc.

Following directives from Oblast Akim in 2023, we conducted an extensive Oil Spill Emergency Response drill in May at the Terminal and oil pipeline with the participation of the Company Emergency Response Team, and emergency response teams from Baiterek district, West Kazakstan Oblast. Ansar-S-group LLP, our contractor supplied the main equipment to the training site, conducted three drills for collecting the spilled oil from the ground and water surface and one drill focused on extinguishing oil fires. The Asnar S Group staff received training on using the oil collecting equipment effectively. The standout results were recognised and the Company Managers received Certificates of Appreciation from the Head of WKO Department of Emergency Situations.

In addition, an annual monitoring of hazardous sections of pipelines, preparation for autumn-winter season and spring floods is made, especially in areas located in a possible flooding area. Monitoring of their condition is organised by contractors – Nysan Korgau andAnsar-S Group.

The OSRP has been annually reviewed and updated to consider the regulatory requirements, availability of resources to be involved. The OSRP gives substantiation of a possible emergency level, analyses scenarios of their occurrence and development, and also makes a forecast of possible consequences for production facilities associated with accidental oil spills.

Introduction of emergency response plans and OSRP for Nostrum’s production and engineering personnel is documented in the briefing log at the workplace. In accordance with Industrial Control Charter the Facilities Manager and Field Director are responsible for the due and correct preparation of ERPs, and ensure compliance with safety requirements is controlled on a regular basis. If non-compliance is identified, corrective and preventive action plans are developed and implemented.

To respond to emergencies, Nostrum established civil defence teams, whereby 120 employees on a voluntary basis (60 people in each shift), are engaged to ensure the safety of the production facilities. In 2023, regular drills with civil defence staff were conducted as per drill plans. The staff included to Civil Defence Teams was trained in 2023 at the facility of Ak-beren blow out elimination service in Burlin District WKO.

To maintain and conduct emergency rescue operations, the Company has long-term contracts with professional ERT – Ak-Beren LLP (gas rescue service) and Ansar-S-Group LLP (firefighters-rescuers). Ak-Beren, a professional blowout elimination service, is responsible for accident prevention at oil and gas wells, which is fully compliant with the requirements for oil, petroleum product, and other hydrocarbon spill response.

In 2023 there were no oil spills. A table below shows data for 2019-2023:

Materials and equipment available to the emergency response and rescue teams are certified and compliant with all requirements.

A high degree of readiness for the ERT is supported by regular drills and training, as well as theoretical knowledge. Drills and training are held on a quarterly basis at all facilities. Special attention during the ongoing emergency drills was given to those facilities where gas and oil contain hydrogen sulfide. All Emergency Response Plans were reviewed, updated and approved with Ak-Beren emergency response service and Ansar-S Group. Commanders of voluntary rescue and fire teams were additionally trained under the training program for unit commanders to maintain levels of skills and competence, particularly in relation to safety-critical roles.

The non-government fire service of Ansar-S-Group LLP, which has had a service agreement with Nostrum since 2022, was also involved several times (under our contract) in providing emergency responses in Baiterek during the elimination of the consequences of spring floods and summer steppe fires at the request of local executive bodies. Thus, Nostrum provides assistance to the administration and residents of Baiterek on an ongoing basis.

A significant part of preventive and emergency organisation is performed by contractors for Nostrum. In order to ensure a high level of preparedness for emergency response, all drills and training were made with the participation of the following organisations:

• Ansar-S-Group LLP – fire prevention.
• Ak-Beren LLP – blowout prevention, gas rescue.
• Nysan-Korgau – the organisation of access control and protection of an accident zone from unauthorised individuals.

HSE personnel assigned to each hazardous facility perform permanent control over work plans implementation by contractors as well as requirements of industrial safety standards. To achieve this, the Company uses checklists containing the entire range of issues under consideration – starting from document maintenance to work quality and safety. The HSE Department organises regular control field inspections at production facilities.

The control teams include representatives responsible for occupational health, safety and emergency response.

• The most pressing issues are discussed with all contractors and facilities. Joint work on quality improvement of safety methods is organised on a permanent basis.
• Representatives of contracting organisations participating in all emergency drills regularly held by Nostrum, have an opportunity to master up-to-date methods of emergency rescue operations and develop common rules for solving emerging problems taking into account available information on best practices in the oil and gas industry

In 2023, in line with RoK legislative requirements, Civil Defence Plan annexes were revised. Training in civil defence for personnel training was organised at the Company’s offices. A special tactical exercise was conducted with the office staff on emergency evacuation in case of fire and the provision of medical assistance.

In 2023, 100% of office staff were provided with civil gas masks GP-7 with “Breeze” filter boxes. In 2023, the West Kazakhstan Emergency Situations Department held annual inspection of the Chinarevskoye field and the office on fire safety. As a follow-up to the state field inspection on fire safety compliance the Company has developed an action plan and regularly provide information to authorities on its execution.

The Company is constantly improving internal procedures aimed at alerting and preventing emergency response cases, and in 2023 the Company maintained alert systems at Nostrum production facilities. The duty dispatch service promptly transmits information about the occurrence of accidents and emergencies to EOS-1 and EOS-2 to notify the management of the Company and government agencies.

In the event of an emergency, at the first level of emergency response, regular employees and contractor personnel located at Nostrum production facilities, as well as emergency response teams involved in the accident response are notified. High priority rescue and evacuation activities are performed to protect them. Territorial executive authorities (akimats) are notified of an accident in accordance with the notification scheme in case of a threat of the spread of adverse factors.

In the event of major accidents, operational teams of the second level are organised at the Company’s office in Uralsk. If necessary, the evacuation of personnel and communities is organised.

The Company systematically arranges operational control over compliance with industrial safety requirements, internal audits of the management system, conducts analyses of and processes the results of incidents and inspections, develops and monitors the implementation of corrective and preventive actions.

All Nostrum facilities at Chinarevskoye Field and Terminal are fire and explosion hazardous. Therefore, fire safety rules were developed for all facilities and controls over compliance with the rules are in place.

These activities include:

• obligatory preventive inductions, fire safety training, control by line supervisors and responsible persons over the performance of work,
• inspection of Ansar-S-group by a governmental authorised body and fire inspectors,
• project expertise as to compliance with fire safety requirements during the reconstruction and technical upgrade of production facilities,
• timely maintenance and function control of systems and fire protection means of facilities (by contractor – Batys Energon LLP), and;
• continuous control of serviceability of fire- and explosion-hazardous process equipment and compliance with process flow charts.