The secret to long-term organizational success is a well-designed management system. Adzhip Karachaganak B.V. implemented an integrated and well-balanced system of internal control, business planning, risk management, and governance. In order to guarantee that strategies, directives, and instructions from senior management are implemented methodically and successfully, the integrated management system approach facilitates appropriate decision-making and offers sufficient control mechanisms.

In order to manage the Karachaganak Oil and Gas Condensate Field—also known as Karachaganak Field or the AKOGCF—in compliance with the Final Production Sharing Agreement, Adzhip Karachaganak B.V. Kazakhstan Branch was founded as a joint venture in 1995 (FPSA). Adzhip Karachaganak B.V. leverages the experience of five global oil and gas firms (henceforth referred to as the Contracting or Parent firms), each of which is represented by one of the following affiliates: Shell Kazakhstan, Agip Karachaganak B.V., Lukoil Overseas Karachaganak B.V., Chevron International Petroleum Company, and KMG Karachaganak LLP.

Organisational structure

The organizational structure of Adzhip Karachaganak B.V. was created to help KPO continuously assess its external environment in order to meet its business objectives and the requirements of the Republic of Kazakhstan (the Authority represented by the PSA LLP) and the Contracting Companies. The Karachaganak field features a co-operatorship model, represented by Agip Karachaganak B.V. and BG Karachaganak Limited (respective affiliates of Eni Spa and Shell; Shell has formally purchased 100% of BG Group), in order to carry out the petroleum operations outlined in the FPSA.

Adzhip Karachaganak B.V. is governed by the Joint Marketing Committee (JMC) and Joint Operating Committee (JOC), which are made up of representatives from the Authority under the FPSA as well as from each of the five Contracting Companies. The JOC Secretary is a senior executive from the Operating Contracting Companies, and the Chair of the JOC is invariably a representation from the Authority, under the criteria of the FPSA.

In addition to the aforementioned, and in order to fulfill the obligations of the Operator Participants Agreement (between the Operators Eni and Shell) and the Joint Operating Agreement (between the Parent Companies). At the contractor and operator levels, specific subcommittees have been formed to address particular issues. The entire governing framework is shown graphically.

The internal policies of the Parent Companies themselves and the authorized body on the part of the are followed in the nomination, selection, and performance assessment of parent company representatives as members of any section of the governance structure. As a reporting entity, Adzhip Karachaganak B.V. is not in possession of this data. Parent Companies’ sustainability reports provide specific information on each of these topics.

Joint Operating Committee

In order to make sure that operations are carried out in compliance with the FPSA and Settlement Agreement, the JOC is in charge of overseeing all petroleum operations as well as social and infrastructure initiatives. JOC-related issues include reviewing and approving the yearly budget and work schedule, as well as any modifications to the field development plan and social and infrastructural projects. Typically, JOC meetings occur three times a year. The JOC met three times in 2022: in March, July, and November. One Authority delegate serves as the chair of the JOC. The West Kazakhstan Oblast’s Akim represents the community at JOC meetings, but he is not allowed to vote. Although not a member of this organization, Adzhip Karachaganak B.V. is invited as a visitor.

Joint Marketing Committee

Under the FPSA, the JMC is in charge of all operations pertaining to the marketing of both hydrocarbon and non-hydrocarbon products. This Committee grants approval to proposals pertaining to petroleum product sales, transportation, processing, and exchanges. The goal of decision-making is to maximize net revenues. A representative from one of the Contracting Companies chairs the JMC. The marketing director of Adzhip Karachaganak B.V. is entitled to attend JMC meetings but is not permitted to vote.

Contractor Committee (ConCom) and Operating Committee (OpCom)

The Adzhip Karachaganak B.V. Joint Venture is governed by the Joint Operating Agreement (JOA), which states that two bodies are used for management and decision-making. The Contractor’s Committee (ConCom) is one entity that has the authority to decide the Contracting Companies’ stance on any issue that is subject to JOC rulings. The other entity is the Operating Committee (OpCom), which is in charge of managing the Venture and making sure that the FPSA guidelines are followed. Adzhip Karachaganak B.V. representatives initiate and submit these strategic objective-delivery initiatives for consideration at Operating Committee meetings, where they are deliberated at that level. As part of the yearly internal audit conducted by all Parent Companies, the Contractor Committee keeps an eye on the organization’s process design and implementation effectiveness.