In 2024, the oil and gas industry continued to face the impact of global economic and geopolitical factors, leading to price volatility, limited investment, and shifts in demand for hydrocarbon resources. In this environment, NC KazMunayGas JSC focused its strategic efforts on ensuring energy security, strengthening exploration activities, diversifying export routes, developing the petrochemical sector, and introducing renewable energy sources. The Company continues to balance its investments between traditional oil and gas operations and sustainable development, as reflected in KMG’s long-term strategy for 2022–2031.

Strategic Goals and 2024 Results

Strategic Goal No. 1:

Sufficient resource base to ensure Company's growth

KMG is focused on increasing its hydrocarbon reserves to support both current operations and future projects. The key tools for achieving this goal are organic growth, strategic partnerships, and the acquisition of new assets.

2024 results:

• Deep drilling of exploration wells initiated for four projects (Turgay Paleozoic, Karaton Subsalt, Karazhar, Taisoigan);
• Five promising blocks identified under the project of geological exploration of the subsurface 1.0 (Mugodzhary, Berezovsky, Zharkyn, Bolashak, Northern Uzen); fieldwork was completed and partners were selected;
• Three new blocks identified under the project of geological exploration of the subsurface 2.0 (Bereke, Shygys, Southern Shu-Sarysu) with plans for 2025–2026.

Strategic Goal No. 2:

Improving the Company's value chain efficiency

KMG aims for maximum efficiency at all stages of oil production, refining, transportation, and sales, with a strong emphasis on operational resilience.

2024 results:

• An additional 418 thousand tonnes of oil were produced through the implementation of new technologies;
• The implementation of the Uzen and Karamandybas fields rehabilitation project allowed for an additional 157.7 thousand tonnes of oil production;
• Gas production began at the Rozhkovskoye, East Urikhtau, and Aksai South fields;
• Preliminary preparatory work has started for the Kalamkas-Sea Khazar offshore project;
• The 5^th gas injection compressor unit was launched at Karachaganak;
• Wellhead Pressure Management Project facilities at Tengizchevroil (TCO) were commissioned;
• Export routes were expanded: supply growth through Baku-Tbilisi-Ceyhan (+34 %) and the Druzhba pipeline (+50 %);
• Production of light oil products increased by 370 thousand tonnes at 3 refineries, and an automatic emission monitoring system was implemented;
• Expansion projects for Caspi Bitum and Shymkent Refinery continue.

Strategic Goal No. 3:

Business diversification and product portfolio expansion

KMG is developing its petrochemical segment in response to global demand for petrochemical products.

2024 results:

• The integrated gas chemical complex KPI produced 249 thousand tonnes of polypropylene (10 grades developed, fully covering domestic demand);
• Construction of a polyethylene gas chemical complex (1.2 million tonnes/year) launched in cooperation with SIBUR and Sinopec. The final investment decisions made and construction started;
• Pre-feasibility study results for the “Polyethylene Terephthalate” project approved; strategic partner search underway;
• Agreement signed with CNPC to establish a joint venture for the “Carbamide” project.

Strategic Goal No. 4:

Sustainable development and progressive reduction of carbon intensity of production

KMG is integrating sustainable development principles and working to reduce its negative impact on the environment.

2024 results:

• Updated ESG risk rating for 2023 reached 32.8 points; improvement plan is being implemented;
• Under the international Carbon Disclosure Project, KMG received a “B” rating for the 2024 reports on “climate change” and “water security” (previous years: “C”);
• Low-Carbon Development Program through 2060 was approved (target: 15 % GHG reduction by 2031 and 64 % by 2060);
• Methane emissions report was submitted to UNEP under OGMP 2.0;
• Construction of hybrid power plants (gas and renewables) initiated with Eni;
• The law on ratification of the agreement with Total Eren on the Mirny project (1 GW) was signed, and $1.4 billion in financing was received;
• Main construction was completed on the Kenderli desalination plant, including 201 km of trunk pipeline to supply desalinated water to Zhanaozen;
• 1,099 thousand tonnes of historical waste were disposed;
• HR policy was updated;
• KZT 5.1 billion was invested in employee training;
• 64 additional units of the Electronic Medical Screening System were installed across various subsidiaries;
• Unified standard program for industrial sanitary control was approved in line with Ministry of Health regulations;
• Action plan was approved for the Group’s employee wellness program for 2025–2027.

Performance Evaluation

KMG Executive Management Effectiveness Assessment

As part of the corporate management system of NC KazMunayGas JSC, Key Performance Indicators (KPIs) for executives serve as a tool to evaluate their contribution to achieving the Company’s strategic goals. These indicators cover economic, environmental, and social development aspects, as well as elements of corporate governance.

The performance evaluation process for executives is aimed at monitoring the implementation of KMG’s Development Strategy and includes:

• Assessment of employees’ contributions to the achievement of strategic goals;
• Use of motivational KPIs in calculating compensation;
• Application of the KPI system and goal-setting for KMG employees, ensuring transparency and accountability.

Corporate KPIs

To ensure the implementation of sustainable development goals, the following corporate KPIs were approved:

• Implementation of investment projects, including sustainability-related projects (e.g., construction of the desalination plant in Kenderli and construction of the new gas processing plant in Zhanaozen);
• Integrated industrial safety indicator, aimed at reducing the incident rate and identifying hazardous conditions.

Among the motivational KPIs at the level of Board members (Deputy Chairmen of the Board) and heads of KMG structural divisions, the following KPIs in the area of sustainable development have been defined:

• Implementation of corrective measures based on the results of IR-screenings conducted at KMG subsidiaries’ contractors in 2024;
• Execution of Roadmaps for improving the social and living infrastructure of KMG subsidiaries in 2024;
• Fulfillment of the Action Plan under KMG’s Low-Carbon Development Program for 2022–2031 in the respective business areas;
• Implementation of renewable energy projects;
• Remediation of historical oil waste;
• Deployment of a transport management information system as part of the “Trip Management” project;
• Comprehensive HSE audits at subsidiaries and dependent entities;
• Development of a Corporate Wellness Program for KMG Group employees for 2025–2028;
• Update of KMG’s HR policy;
• Social stability index across KMG Group.

At the level of individual subsidiaries and dependent entities, the following KPIs were introduced:

• Integrated industrial safety indicator;
• Reduction of carbon footprint;
• Development of corporate culture through internal communications.

Development of the sustainability management system

In 2024, KMG continued to actively develop ESG practices aimed at reducing environmental risks, enhancing social responsibility, and improving corporate governance. During the reporting period, a set of measures was implemented in the areas of decarbonization, water resource management, occupational health and safety, human rights, and human capital management. Below is information on the Company’s key initiatives in advancing sustainable development practices.