A meeting of CPC-R Board of Directors and an extraordinary general meeting of CPC-K Shareholders were held on 23-24 September.
The meetings reviewed financial/business issues of company activities. A detailed report was made on the current occupational health/safety situation, followed by the Company Management outlining an action plan for improvements in this area necessitated by intensification of work on expanding the throughput of the Consortium oil pipeline system and related engagement of a large number of operation personnel.
The Shareholders assigned the Consortium Management, namely the Head of Expansion, to bring promptly the number of occupational health/safety inspectors at Tengiz PS in line with the requirements.
The meetings examined some vital issues of corporate governance. CPC Management prepared and submitted for discussion to the Shareholders a new version of the Company Treasury Policy, which in early September had been reviewed preliminarily at a meeting of the internal finance commission and sent to the Shareholders for examination and modification. A resolution was taken, after detailed examination and modification of this document by the finance commission, to discuss it again at the meeting of the management bodies scheduled for November this year.
The Russian Government Shareholder, whose interests are represented by ОАО АК Transneft, submitted a proposal to set up a working group for development of an action plan to implement Federal Law No. 116-FZ of 05.05.2014 “On Amendment of Some Legislative Acts of the Russian Federation”, which prohibits loaned labor, starting from 1 January 2016.
Besides, Expansion commissioning schedule was explored in detail. The Shareholders assigned the Consortium Management to present at the November meeting all signed amendments, showing adjusted contractual facilities construction timeline.
CPC pipeline system is one of the largest investment projects in the energy industry with participation of foreign capital on the CIS territory. The length of the pipeline connecting the oil fields in Western Kazakhstan with the Marine Terminal near Novorossiysk is 1,511 km. CPC Marine Terminal is equipped with single point moorings which allow for safe tanker lifting at a considerable distance from the shore, also when the weather conditions are unfavorable.
The Expansion Project includes rehabilitation of 5 existing and construction of 10 additional pump stations (2 in the Republic of Kazakhstan and 8 in the Russian Federation), six new storage tanks (100,000 cu.m each) in addition to the existing four near Novorossiysk and a third SPM at the CPC Marine Terminal, and also the replacement of an 88 km pipeline section in Kazakhstan with a larger diameter pipe. The total amount of the Project investments will be US$ 5.4 billion.
CPC Shareholders: Russian Federation (represented by Transneft – 24% and CPC Company – 7 %) – 31%; Republic of Kazakhstan (represented by KazMunayGaz – 19% and Kazakhstan Pipeline Ventures LLC – 1.75%) – 20.75%; Chevron Caspian Pipeline Consortium Company - 15%, LUKARCO B.V. – 12.5%, Mobil Caspian Pipeline Company – 7.5%, Rosneft-Shell Caspian Ventures Limited – 7.5%, BG Overseas Holding Limited - 2%, Eni International N.A. N.V. - 2% и Oryx Caspian Pipeline LLC – 1.75%.