Dear Stakeholders,

 

It gives me great pleasure to share with you KMG International’s Sustainability Report for 2017, a milestone year for the Group’s progress in terms of operational performance and a stepping stone in our future development in the benefit of our stakeholders and the communities we are present in.

As major regional payer in the oil and gas industry we strive for excellence every day and we are aware of the inherent role sustainability has to play in our operations across the Group. This is why working sustainably is our primary focus in carrying out our activities in a responsible manner, creating value for all our stakeholders and providing benefits for current and future generations.

In 2017, KMG International reached the highest level of operational and financial indicators since the establishment of Rompetrol and Petromidia Năvodari refinery, and 10 years after its takeover by Kazakhstan’s national oil and gas company KazMunayGas.

It was a year of constant improvement and great results, Petromidia refinery obtaining the lowest production cost for the past 10 years, along with significant operational and mechanical availability while reducing its energy consumption and processing costs, with a decrease by approximately 14% in its energy intensity index (EII) and a drop by 44% in its processing cost. Vega Refinery also recorded an all-time-high in bitumen production, namely 96KTons/year, as well as its lowest technological loss ever in its 113-year history - 1.04% wt.

While the Group’s Petrochemicals Division, the only unit of its kind in Romania, started the development of a new grade of polymers, the companies in Retail and Trading business units followed the same positive trend in terms of environmental efficiency, with a drop by 34.2% in power consumption for Rompetrol Gas, the Group’s LPG trading division and a decrease by 4% in overall consumption for Rompetrol Downstream, KMG International’s retail division which includes the Groups network of gas stations.
 

No accidental spills or grievances were recorded in 2017 and the CO2 emissions for the Refining Business Unit (Petromidia and Vega platforms, along with the Petrochemical Division) decreased by 5% compared to the previous year.

These excellent results increased our sense of pride and also pushed us to look beyond our operational footprint into the value chain, to integrate efficiency-generating mechanism and sustainable procedures for an all-round durable transformation. These were applied to all areas of operation- production, distribution, financial or support services, and contributed positively to the improvement of the organizational culture. Each employee was actively involved and had an input through various initiatives and proposals, aimed at improving activities and performance, these benefits being closely linked to the results which were achieved at Company and Group level.

More importantly, as a result of the implementation of increased safety measures following the unfortunate incident on Petromidia platform the previous year, there were no fatal incidents recorded in 2017. Moreover, LTI dropped from 12 to 1 and Loss Time Injury Frequency was reduced by over 90%. More than 30,000 hours were put into health & safety trainings across the Group in 2017 alone, and our employees were also provided with the opportunity to attend specific development programs adapted to their position level and talent pool segmentation category.

Furthermore, our aim is to contribute to the balanced development of all facets of human life, including health and well-being, culture and education, skill development and leadership, or social and environmental stewardship. Our community engagement projects stand proof of that. And with the help of our dedicated employees, who continued to contribute their time and skills to the Group’s initiatives in 2017, we were able to go beyond awarding one-time support or relief and instead provide a sustainable framework for future advancement.

We have a unique opportunity to demonstrate our leadership as we constantly try to find new ways to improve our performance while delivering game-changing solutions to our stakeholders for a more sustainable future. This is why we have made it our long-term commitment to continuously improve our performance in the areas of environmental, social and economic commitments through the delivery of superior products and services, safe operations and active engagement with our stakeholders.

Our company’s strong culture and performance are a reflection of our people. Their talent and dedication are further enhanced by the Group’s core values and principles which foster teamwork and continuous improvement to overcome challenges, eliminate wasteful operational processes and create value.

I am proud of the efforts of all of our employees, our people of great achievements, who make us better and stronger every day through their creativity, passion and dedication.

Our sustainability program is a source of pride for all of us here, at KMG International, as it underscores not just our values, but also our ambitions to positively impact the markets we serve, the communities where we operate and the lives of all of our employees. This report is dedicated to acknowledging the Group’s growth and performance just as much as that of our people, our main focus and the key drivers of our success.

I invite you to review the report to learn the many examples of our sustainability progress over the past year and discover the faces beyond our achievements.

 

Zhanat Tussupbekov

Chief Executive Officer, KMG International