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On Ruling of Novorossiysk Primorsky District Court

By order of Viktoria Abramchenko, Deputy Prime Minister of the Russian Federation, No. VA-P11-5574, Rostechnadzor (A. Trembitsky), Rosprirodnadzor (S. Radionova) and Rosmorrechflot (A. Lavrishev) were instructed to assess technical condition of hazardous operation facilities of CPC-R JSC and compliance with environmental requirements during their operation. The deadline was by 25 April 2022.

On 28 April 2022, a decision was made by the Head of the Southern Superintendency for Sea and River Transport Supervision (UGMRN) of Rostransnadzor, to conduct a field audit of CPC-R JSC.

The unscheduled field audit of CPC-R JSC was completed on 6 May 2022.

The audit revealed a number of documentary violations under the Oil Spill Response (OSR) Plan.

On 6 June 2022, a citation was issued to the Consortium to eliminate the revealed violations before 30 November 2022.

At the same time, on 6 June 2022, the Head of Novorossiysk Line Department of the Southern UGMRN of Rostransnadzor drew up a protocol on an administrative offense (in respect of the OSR Plan).

As the violation of part 4 of article 14.1.2. of the Code of Administrative Offences (Doing business in the field of transportation in gross violation of the conditions provided by the license) imputed to CPC-R JSC provides for administrative suspension of activities for up to ninety days as an alternative punishment, this case was to be considered in court.

Despite the fact that the deadline for compliance with the citation expires on 30 November 2022, the Southern UGMRN of Rostransnadzor applied to the Primorsky District Court of Novorossiysk, Krasnodar Krai, with the intention to suspend activities for 90 days, stating this directly in the court session of 05 July 2022.

The court left without satisfaction the petition of CPC-R JSC to postpone consideration of the case in order to send objections to the suspension of activities.

The court Ruling (Judge A. Litvinov) of 05 July 2022 satisfied Rostransnadzor's requirements in respect of: CPC-R JSC was punished with an administrative suspension of activities for 30 days.

The Caspian Pipeline Consortium acts within the legal framework of the Russian Federation and is forced to execute the court Ruling. The Ruling will be appealed in accordance with the procedure established by law.

For information:

The CPC Pipeline System is one of CIS largest energy investment projects that involves foreign capital. The length of the Tengiz – Novorossiysk pipeline is 1,511 km. This route moves over two thirds of all Kazakhstan export oil along with crude from Russian fields including those in the Caspian region. CPC Marine Terminal is equipped with three Single Point Moorings (SPM), allowing tankers to be loaded safely at significant distance offshore, including in poor weather conditions

CPC Shareholders: Federal Agency for State Property Management represented by Transneft (trustee) – 24%, CPC Company – 7%, KazMunayGas – 19%; Kazakhstan Pipeline Ventures LLC – 1.75%, 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%, and Oryx Caspian Pipeline LLC – 1.75%.