Closure and Reclamation of Work Sites
In accordance with the legislation of the Republic of Kazakhstan and contract terms, NC KazMunayGas JSC is legally obligated to dismantle and decommission fixed assets and restore land plots at each of its oil and gas fields. These obligations include the phased closure of all non-productive wells, dismantling of pipelines and buildings, reclamation of contract areas, and remediation of environmental damage at production sites.
The company evaluates asset retirement obligations individually for each contract. As of December 31, 2024, the carrying amount of the Group’s provision for decommissioning oil and gas assets amounted to 142,009 KZT million (as of December 31, 2023: 123,785 KZT million).
Reclamation and decommissioning procedures for contract areas are regulated by the Subsoil and Subsoil Use Code of the Republic of Kazakhstan. According to the Code, remediation of subsoil use consequences is carried out in accordance with an approved project that has passed the required expert reviews. Conservation of subsoil areas is also conducted based on an approved conservation project. Technological facilities are subject to liquidation or conservation according to project documentation, with special rules in place for certain types of wells. Requirements for well abandonment are defined in regulations approved by Order No. 200 of the Minister of Energy of the Republic of Kazakhstan dated May 22, 2018.
With regard to trunk oil and gas pipelines, in accordance with the Law of the Republic of Kazakhstan “On the Main Pipeline,” which came into force on July 4, 2012, KazTransOil JSC (KTO) has a legal obligation to decommission trunk pipelines after the end of their operation and to implement environmental restoration measures, including land reclamation. The reserve for pipeline decommissioning and land reclamation obligations is estimated based on the Group’s cost calculation for performing the related work. As of December 31, 2024, the carrying amount of the Group’s provision for pipeline decommissioning and land reclamation obligations amounted to 37,405 KZT million (as of December 31, 2023: KZT 45,649 million).
KMG continues its efforts to ensure environmental safety and compliance with regulatory requirements during the closure and reclamation of work sites, striving to minimize the environmental impact of its activities.