Capitalising on
growth catalysts
Annual Report & Accounts 2024
growth catalysts
Annual Report & Accounts 2024
CONTENTS
2024 HIGHLIGHTS
1. Opex and G&A costs per boe of processed hydrocarbons.
2. Opex excluding DD&A, inventory adjustment and cost of raw gas purchased.
G&A costs excluding DD&A. See page 51 for details.
3. 2024: Surplus of GHG emissions as a result of third-party processing
(2023: GTU 3 re-start).
STRATEGIC REPORT
01 At a glance
02 Chairman’s statement
04 Market review
06 Business model
08 Chief Executive Officer’s statement
12 Strategy
14 Strategy in action
20 Stakeholder engagement
22 Key performance indicators
24 Operational review
34 Risk management
36 Principal risks and uncertainties
43 Viability statement
45 Financial review
51 Five-year summary
52 ESG review
78 Non-financial and Sustainability
information statement
79 Climate-related Financial Disclosures
CORPORATE GOVERNANCE
88 Introduction to corporate governance
90 Board of Directors
94 Senior management team
96 Governance framework
99 Audit Committee report
106 Nomination and Governance Committee
report
107 Statement from the Remuneration
Committee Chairman
108 2024 annual report on remuneration
125 Directors’ report
FINANCIAL REPORT
130 Independent auditor’s report
138 Consolidated financial statements
165 Parent Company financial statements
REGULATORY INFORMATION
177 Investor information
180 Glossary
ADDITIONAL DISCLOSURES
185 GRI content index
189 Structure chart
Revenue
US$m
137.1 (2023: 119.6)
Employees
605 (2023: 571)
EBITDA
US$m
48.9 (2023: 42.1)
LTIR
Incidents per million man-hours
Zero (2023: 0.37)
Unrestricted cash at year end
US$m
150.4 (2023: 161.7)
Total greenhouse gas emissions3
ktCO 2 e
97 (2023: 180) 124 (2023: 0)
Chinarevskoye Third-party processing
Financial
Non-financial
For more details please visit
nostrumoilandgas.com
Opex + G&A costs 1
US$ per boe
7.7 (2023: 13.5)
Opex + G&A costs 2
US$m
56.0 (2023: 50.2)
Total processed volumes
boepd
19,831 (2023: 10,216)
Titled production volumes
boepd
14,935 (2023: 10,091)
1. Opex and G&A costs per boe of processed hydrocarbons.
2. Opex excluding DD&A, inventory adjustment and cost of raw gas purchased.
G&A costs excluding DD&A. See page 51 for details.
3. 2024: Surplus of GHG emissions as a result of third-party processing
(2023: GTU 3 re-start).
STRATEGIC REPORT
01 At a glance
02 Chairman’s statement
04 Market review
06 Business model
08 Chief Executive Officer’s statement
12 Strategy
14 Strategy in action
20 Stakeholder engagement
22 Key performance indicators
24 Operational review
34 Risk management
36 Principal risks and uncertainties
43 Viability statement
45 Financial review
51 Five-year summary
52 ESG review
78 Non-financial and Sustainability
information statement
79 Climate-related Financial Disclosures
CORPORATE GOVERNANCE
88 Introduction to corporate governance
90 Board of Directors
94 Senior management team
96 Governance framework
99 Audit Committee report
106 Nomination and Governance Committee
report
107 Statement from the Remuneration
Committee Chairman
108 2024 annual report on remuneration
125 Directors’ report
FINANCIAL REPORT
130 Independent auditor’s report
138 Consolidated financial statements
165 Parent Company financial statements
REGULATORY INFORMATION
177 Investor information
180 Glossary
ADDITIONAL DISCLOSURES
185 GRI content index
189 Structure chart
Revenue
US$m
137.1 (2023: 119.6)
Employees
605 (2023: 571)
EBITDA
US$m
48.9 (2023: 42.1)
LTIR
Incidents per million man-hours
Zero (2023: 0.37)
Unrestricted cash at year end
US$m
150.4 (2023: 161.7)
Total greenhouse gas emissions3
ktCO 2 e
97 (2023: 180) 124 (2023: 0)
Chinarevskoye Third-party processing
Financial
Non-financial
For more details please visit
nostrumoilandgas.com
Opex + G&A costs 1
US$ per boe
7.7 (2023: 13.5)
Opex + G&A costs 2
US$m
56.0 (2023: 50.2)
Total processed volumes
boepd
19,831 (2023: 10,216)
Titled production volumes
boepd
14,935 (2023: 10,091)
AT A GLANCE
Implementing our mixed-asset
strategy and realising value
for our shareholders.
Stepnoy Leopard fields
Building our multi-asset
portfolio and increasing
2P reserves
See pages 14-15
Ural Oil & Gas processing
Operating as a reliable
third-party gas processor
with an extension of our
partnership to 2031
See pages 16-17
Safeguarding our assets and operations
Maintaining safe operations
and drilling programme on
time and within budget
See pages 18-19
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 1 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
Implementing our mixed-asset
strategy and realising value
for our shareholders.
Stepnoy Leopard fields
Building our multi-asset
portfolio and increasing
2P reserves
See pages 14-15
Ural Oil & Gas processing
Operating as a reliable
third-party gas processor
with an extension of our
partnership to 2031
See pages 16-17
Safeguarding our assets and operations
Maintaining safe operations
and drilling programme on
time and within budget
See pages 18-19
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 1 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
Executing our
catalyst projects
CHAIRMAN’S STATEMENT
The last year has been transformational
for Nostrum, accreting material value
with both our Stepnoy Leopard and
Ural O&G projects. The next couple of
years will be focussed on executing and
monetising these projects, as well as
developing further collaborations.”
Stephen Whyte
Chairman and Non-Executive Director
2024 was another pivotal and very positive
year for Nostrum as we advanced our
mixed-asset energy strategy and growth
catalysts. We demonstrated our
operational capabilities as a reliable and
safe processor of third-party hydrocarbons
which allowed us to secure an extension of
the agreement with Ural O&G until 2031.
We also made significant progress on
Stepnoy Leopard, a major new upstream
asset in our portfolio. I am particularly
pleased to report that we strengthened
our safety culture and operating standards,
achieving a zero-fatality record and
zero lost time injury incidents. We also
strengthened our financial position and
delivered a healthy year end cash balance,
whilst investing in our growth catalysts.
Core Operational and
Financial Excellence
At Chinarevskoye, we mitigated the extent
of natural production decline of the mature
field through a limited but effective drilling
campaign, which was completed on time
and within budget.
Our investment in the gas-lift expansion
in 2023 continued to reduce the impact
of production decline, and continuous
operation of GTU-3 not only demonstrated
its reliability but also improved our facilities
uptime to 98% and benefit from 26% higher
LPG recovery.
We continued to strengthen our financial
position during 2024 through tight cost
discipline and increase in revenues, which
helped to generate US$33.1m of net
operating cashflows, which contributed to
preservation of cash reserves at US$150.4m.
Total assets increase
16.7%
Fixed assets impairment reversal of
US$86.7m resulting from value added
by SL fields and Ural O&G extension
Stepnoy Leopard CPR NPV10
US$220m
after-tax net (80% working interest)
Ural O&G processing agreement
extension on new terms until
May 2031
Expecting 0.51bcm gas in 2025
Decrease in GHG emissions
intensity by
28%
2 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
catalyst projects
CHAIRMAN’S STATEMENT
The last year has been transformational
for Nostrum, accreting material value
with both our Stepnoy Leopard and
Ural O&G projects. The next couple of
years will be focussed on executing and
monetising these projects, as well as
developing further collaborations.”
Stephen Whyte
Chairman and Non-Executive Director
2024 was another pivotal and very positive
year for Nostrum as we advanced our
mixed-asset energy strategy and growth
catalysts. We demonstrated our
operational capabilities as a reliable and
safe processor of third-party hydrocarbons
which allowed us to secure an extension of
the agreement with Ural O&G until 2031.
We also made significant progress on
Stepnoy Leopard, a major new upstream
asset in our portfolio. I am particularly
pleased to report that we strengthened
our safety culture and operating standards,
achieving a zero-fatality record and
zero lost time injury incidents. We also
strengthened our financial position and
delivered a healthy year end cash balance,
whilst investing in our growth catalysts.
Core Operational and
Financial Excellence
At Chinarevskoye, we mitigated the extent
of natural production decline of the mature
field through a limited but effective drilling
campaign, which was completed on time
and within budget.
Our investment in the gas-lift expansion
in 2023 continued to reduce the impact
of production decline, and continuous
operation of GTU-3 not only demonstrated
its reliability but also improved our facilities
uptime to 98% and benefit from 26% higher
LPG recovery.
We continued to strengthen our financial
position during 2024 through tight cost
discipline and increase in revenues, which
helped to generate US$33.1m of net
operating cashflows, which contributed to
preservation of cash reserves at US$150.4m.
Total assets increase
16.7%
Fixed assets impairment reversal of
US$86.7m resulting from value added
by SL fields and Ural O&G extension
Stepnoy Leopard CPR NPV10
US$220m
after-tax net (80% working interest)
Ural O&G processing agreement
extension on new terms until
May 2031
Expecting 0.51bcm gas in 2025
Decrease in GHG emissions
intensity by
28%
2 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Furthermore, a US$86.7m fixed assets
impairment reversal, boosting our total
assets by 16.7%, demonstrating the
importance of our growth catalysts such as
third-party processing from Ural O&G and
confirmation of additional 110mmboe of
working interest 2P reserves at SL fields.
Executing Our Growth
Catalysts
We made substantial progress on our
growth catalysts, that will shape
Nostrum’s future.
Our belief in the future value of Stepnoy
Leopard was affirmed by the independent
Competent Person’s Report (the “SL CPR”)
prepared by Xodus Group Limited in July
2024, which confirmed 138 mmboe
(including approximately 25% liquids)
of proved plus probable gross reserves,
increasing Nostrum’s reserves base over
fivefold (from 23 mmboe to 128 mmboe
working interest reserves) and representing
material value creation of approximately
US$220m of after-tax net (80% working
interest) Nostrum NPV10 at 34% IRR, and
a substantial driver for increasing
shareholder and investor returns.
Furthermore, post year end, in April 2025
the Ministry of Energy of the Republic of
Kazakhstan approved a phased, full-field
development plan extending until 2044.
This allows the Group to proceed with
confidence towards field development and
production start targeted for late 2026 at
the earliest. Early cash generation will
strengthen the project’s self-financing
capacity.
Our midstream operations involving the
tie-back of Ural O&G’s Rozhkovskoye field
have enhanced our infrastructure utilization
and reinforced our reputation in Kazakhstan
as a leading gas processor. Due to Ural
O&G our total processed volumes
increased by 97% year-on-year, and this
continued success resulted in the signing
post year end in March 2025, of the Ural
O&G processing agreement extension on
new terms until May 2031. The agreement
extension is value-accretive and mutually
beneficial for both parties. It provides for a
fixed process fee structure across all the
products that gives rise to sustainable
cash-flows and plant operations. More
importantly, we are humbled by the trust
and confidence our partner Ural O&G and
its shareholders place in us and take great
responsibility in supporting the further
cost-effective development of their
Rozhkovskoye field. According to
KazMunayGas, 0.53 bcm of raw gas feed
is expected from Ural O&G in 2025.
Our progress this year reinforces our
commitment to becoming a key player in
Kazakhstan’s energy sector driving forward
the nation’s gasification efforts and
supporting the transition to a more
sustainable energy future.
Strengthening Governance
Governance remains a cornerstone of
Nostrum’s strategy. In August 2024, we
welcomed Viktor Gladun to the Board as
a non-executive director. His extensive
experience in energy operations, finance,
and corporate strategy will contribute to
our long-term growth.
Following Christopher Cox’s departure
from the Board in 2024, we appointed
Martin Gudgeon as Acting Chair of the
Nomination and Governance Committee,
ensuring continuity in oversight and
governance best practices.
The Company has commenced a search for
an additional independent non-executive
director to replace Christopher Cox. In such
search the Company is focusing on female
candidates in furtherance of the Company’s
diversity goals and is seeking to add a
second woman to the Board by the end
of 2025.
Commitment to ESG and
Responsible Operations
At Nostrum, we recognize that operational
success must go hand in hand with
responsibility and sustainability. In 2024,
we reinforced our commitment to safety,
environmental stewardship, and strong
governance.
Safety remains our top priority, and we have
continued to enhance workplace safety
measures and risk management protocols,
maintaining a zero-fatality record across our
workforce and contractor network. The
lessons learned from past challenges
drive our ongoing efforts to strengthen
operational safety and build a culture of
accountability.
Beyond safety, we made further progress
in ESG performance, with Nostrum ranking
in the 11th percentile among oil and gas
producers in Sustainalytics’ ESG Risk
Ratings. This underscores our commitment
to sustainability, responsible governance,
and risk management.
As we move forward, minimizing our
environmental footprint remains a priority.
We are implementing energy efficiency
measures, emissions monitoring, and
operational improvements to drive
sustainable long-term performance.
These measures together with increase in
our throughput volumes resulted in
decrease in GHG emissions intensity by
over 25%. Nostrum remains committed to
delivering value while upholding the
highest ESG standards.
Reflections and
Looking Ahead
Having set the foundation for the major
growth catalysts in 2023, in 2024 we
delivered the Stepnoy Leopard fields
development CPR, we demonstrated the
processing of increasing volumes of
Ural O&G raw gas, we entered into
negotiations for the extension of the Ural
O&G processing agreement, and we
continue to actively search for additional
opportunities to profitably fill the capacity
of our processing facilities.
We have had a particularly successful year
in developing and gaining government
FDP approval for our Stepnoy Leopard
fields development, as well as negotiating
a very material and accretive processing
agreement to 2031 with Ural O&G. The
coming few years will be focussed on
continued execution and monetisation
of those projects, which are truly
transformational for the company.
Last but not least, we continue to monitor
and manage the impact of the various risks
and uncertainties the Company continues
to face. Geopolitical uncertainties, product
price volatility, financial and tax risks, and
other principal risks and uncertainties as
described on pages 36-42, may have a
significant impact on the future
of the company.
Conclusion
I would like to thank our Board,
management team, employees, and
stakeholders for their commitment and
support throughout the year. Nostrum
remains focused on operational excellence,
financial strength, and responsible energy
development, and I am confident in our
ability to create lasting value in the years
ahead.
Stephen Whyte
Chairman and Non-Executive Director
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 3 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
impairment reversal, boosting our total
assets by 16.7%, demonstrating the
importance of our growth catalysts such as
third-party processing from Ural O&G and
confirmation of additional 110mmboe of
working interest 2P reserves at SL fields.
Executing Our Growth
Catalysts
We made substantial progress on our
growth catalysts, that will shape
Nostrum’s future.
Our belief in the future value of Stepnoy
Leopard was affirmed by the independent
Competent Person’s Report (the “SL CPR”)
prepared by Xodus Group Limited in July
2024, which confirmed 138 mmboe
(including approximately 25% liquids)
of proved plus probable gross reserves,
increasing Nostrum’s reserves base over
fivefold (from 23 mmboe to 128 mmboe
working interest reserves) and representing
material value creation of approximately
US$220m of after-tax net (80% working
interest) Nostrum NPV10 at 34% IRR, and
a substantial driver for increasing
shareholder and investor returns.
Furthermore, post year end, in April 2025
the Ministry of Energy of the Republic of
Kazakhstan approved a phased, full-field
development plan extending until 2044.
This allows the Group to proceed with
confidence towards field development and
production start targeted for late 2026 at
the earliest. Early cash generation will
strengthen the project’s self-financing
capacity.
Our midstream operations involving the
tie-back of Ural O&G’s Rozhkovskoye field
have enhanced our infrastructure utilization
and reinforced our reputation in Kazakhstan
as a leading gas processor. Due to Ural
O&G our total processed volumes
increased by 97% year-on-year, and this
continued success resulted in the signing
post year end in March 2025, of the Ural
O&G processing agreement extension on
new terms until May 2031. The agreement
extension is value-accretive and mutually
beneficial for both parties. It provides for a
fixed process fee structure across all the
products that gives rise to sustainable
cash-flows and plant operations. More
importantly, we are humbled by the trust
and confidence our partner Ural O&G and
its shareholders place in us and take great
responsibility in supporting the further
cost-effective development of their
Rozhkovskoye field. According to
KazMunayGas, 0.53 bcm of raw gas feed
is expected from Ural O&G in 2025.
Our progress this year reinforces our
commitment to becoming a key player in
Kazakhstan’s energy sector driving forward
the nation’s gasification efforts and
supporting the transition to a more
sustainable energy future.
Strengthening Governance
Governance remains a cornerstone of
Nostrum’s strategy. In August 2024, we
welcomed Viktor Gladun to the Board as
a non-executive director. His extensive
experience in energy operations, finance,
and corporate strategy will contribute to
our long-term growth.
Following Christopher Cox’s departure
from the Board in 2024, we appointed
Martin Gudgeon as Acting Chair of the
Nomination and Governance Committee,
ensuring continuity in oversight and
governance best practices.
The Company has commenced a search for
an additional independent non-executive
director to replace Christopher Cox. In such
search the Company is focusing on female
candidates in furtherance of the Company’s
diversity goals and is seeking to add a
second woman to the Board by the end
of 2025.
Commitment to ESG and
Responsible Operations
At Nostrum, we recognize that operational
success must go hand in hand with
responsibility and sustainability. In 2024,
we reinforced our commitment to safety,
environmental stewardship, and strong
governance.
Safety remains our top priority, and we have
continued to enhance workplace safety
measures and risk management protocols,
maintaining a zero-fatality record across our
workforce and contractor network. The
lessons learned from past challenges
drive our ongoing efforts to strengthen
operational safety and build a culture of
accountability.
Beyond safety, we made further progress
in ESG performance, with Nostrum ranking
in the 11th percentile among oil and gas
producers in Sustainalytics’ ESG Risk
Ratings. This underscores our commitment
to sustainability, responsible governance,
and risk management.
As we move forward, minimizing our
environmental footprint remains a priority.
We are implementing energy efficiency
measures, emissions monitoring, and
operational improvements to drive
sustainable long-term performance.
These measures together with increase in
our throughput volumes resulted in
decrease in GHG emissions intensity by
over 25%. Nostrum remains committed to
delivering value while upholding the
highest ESG standards.
Reflections and
Looking Ahead
Having set the foundation for the major
growth catalysts in 2023, in 2024 we
delivered the Stepnoy Leopard fields
development CPR, we demonstrated the
processing of increasing volumes of
Ural O&G raw gas, we entered into
negotiations for the extension of the Ural
O&G processing agreement, and we
continue to actively search for additional
opportunities to profitably fill the capacity
of our processing facilities.
We have had a particularly successful year
in developing and gaining government
FDP approval for our Stepnoy Leopard
fields development, as well as negotiating
a very material and accretive processing
agreement to 2031 with Ural O&G. The
coming few years will be focussed on
continued execution and monetisation
of those projects, which are truly
transformational for the company.
Last but not least, we continue to monitor
and manage the impact of the various risks
and uncertainties the Company continues
to face. Geopolitical uncertainties, product
price volatility, financial and tax risks, and
other principal risks and uncertainties as
described on pages 36-42, may have a
significant impact on the future
of the company.
Conclusion
I would like to thank our Board,
management team, employees, and
stakeholders for their commitment and
support throughout the year. Nostrum
remains focused on operational excellence,
financial strength, and responsible energy
development, and I am confident in our
ability to create lasting value in the years
ahead.
Stephen Whyte
Chairman and Non-Executive Director
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 3 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
MARKET REVIEW
Market trends and our response
Since its independence in 1991, Kazakhstan has established itself as one of the world’s
most prolific hydrocarbon centres.
Key macro economic trends
Oil prices
Brent crude oil prices averaged US$80.6
per barrel in 2024, reflecting a 2%
decrease from the previous year. Oil
prices are subject to periodic volatilities
such as macroeconomic and
geopolitical risks, global supply
and demand shifts.
In 2024, Brent crude oil prices
experienced volatility, peaking at
US$91/b in April due to heightened
geopolitical risks. However, prices
declined through the rest of the year,
and by September, prices hit a yearly
low of US$69/b, marking the narrowest
trading range in over 20 years.
What it means for us
Despite the slightly lower oil prices, the
Group’s annual revenues grew by 14.6%
compared to 2023 due to increased
third party processing, production and
sales volumes. The tolling arrangements
bring in the revenue component, which
is not directly dependent on the
commodity prices, and hence provides
an optimal balance of revenue mix.
At the end of 2024 we had unrestricted
cash of US$150.4m (31 December 2023:
US$161.7m) excluding US$16.8m DSRA
funds and US$9.1m of liquidation fund
deposits, for abandonment and site
restoration liabilities.
Kazakhstan’s economy
Kazakhstan’s economy experienced
steady growth, registering a 4.8% GDP
increase in 2024, according to the
Bureau of National Statistics of
Kazakhstan. Economic growth was
primarily driven by the non-resource
sector. Key contributors included
agriculture, manufacturing industry,
construction, trade, transportation and
storage. Although the overall trend for
the 2024 was downward, annual inflation
in Kazakhstan led to an increase in prices
by 8.6%. Regional military conflicts,
global energy market volatility and a
decline in oil production continue to
impact economic conditions. Inflation
risks stem from rising prices in key
trading partners and global food costs,
while domestic pressures include higher
utility tariffs, strong demand from fiscal
stimulus, and unanchored inflation
expectations.
The Kazakhstani Tenge (KZT)
experienced a devaluation relative to
the US dollar, declining by 15.2% in
2024, closing the year at 523.54 KZT per
US dollar.
What it means for us
Cost optimisation continues to be a
critical focus for our company, aimed at
preserving and enhancing our cash
reserves. Despite our G&A expenses
maintaining fairly consistent levels,
we are dedicated to minimising any
necessary cost increases associated with
the development of new projects, such
as Stepnoy Leopard and Ural O&G.
Payroll indexation/overall inflationary
pressure offset by KZT devaluation.
Competitive environment
Kazakhstan and Azerbaijan are the two
main oil-producing countries in the
Caspian region whilst Turkmenistan and
Uzbekistan are the predominant gas
producers. Russia plays an important
role in the region by providing a
transportation corridor between the
Caspian Sea and the Black Sea.
As the world’s largest landlocked
country, Kazakhstan depends on an
extended network of pipelines and
railways to deliver its products to export
markets. Pipeline exports are primarily
delivered via Russia (Atyrau-Samara
and the Caspian Pipeline Consortium
pipelines); via Azerbaijan and Turkey
(the Baku- Tbilisi-Ceyhan pipeline); and
one via China (Atasu-Alashankou). Rail
exports utilise Kazakhstan’s extensive
rail network, reaching markets
throughout the FSU and beyond (please
see page 5 where we discuss the impact
of Russian sanctions resulting from the
Russia-Ukraine conflict on our business).
What it means for us
Vast distances between Central Asian
markets, long-established trading
relationships and in-place infrastructure
promote co-dependency between FSU
exporters. Kazakhstan naturally benefits
from its geo-strategic position between
Russia and China. Nostrum is situated
at the heart of the export corridor that
exists between Russia and multiple
markets to the west of the Caspian.
Nostrum’s assets are located in the
Pre-Caspian Basin close to the Russian
border and in close proximity to some
of the most significant hydrocarbon
resources in the FSU. This advantageous
position means that the Company has
access to multiple export markets for its
products, as well as labour and specialist
equipment providers. In addition,
Nostrum has a substantial amount of
spare gas processing capacity in a
region where there is a significant
amount of stranded gas with a growing
need for gas processing.
Kazakhstan annual GDP growth
4.8%
(2023: 5.0%)
Kazakhstan annual inflation rate
8.6%
(2023: 9.8%)
4 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Market trends and our response
Since its independence in 1991, Kazakhstan has established itself as one of the world’s
most prolific hydrocarbon centres.
Key macro economic trends
Oil prices
Brent crude oil prices averaged US$80.6
per barrel in 2024, reflecting a 2%
decrease from the previous year. Oil
prices are subject to periodic volatilities
such as macroeconomic and
geopolitical risks, global supply
and demand shifts.
In 2024, Brent crude oil prices
experienced volatility, peaking at
US$91/b in April due to heightened
geopolitical risks. However, prices
declined through the rest of the year,
and by September, prices hit a yearly
low of US$69/b, marking the narrowest
trading range in over 20 years.
What it means for us
Despite the slightly lower oil prices, the
Group’s annual revenues grew by 14.6%
compared to 2023 due to increased
third party processing, production and
sales volumes. The tolling arrangements
bring in the revenue component, which
is not directly dependent on the
commodity prices, and hence provides
an optimal balance of revenue mix.
At the end of 2024 we had unrestricted
cash of US$150.4m (31 December 2023:
US$161.7m) excluding US$16.8m DSRA
funds and US$9.1m of liquidation fund
deposits, for abandonment and site
restoration liabilities.
Kazakhstan’s economy
Kazakhstan’s economy experienced
steady growth, registering a 4.8% GDP
increase in 2024, according to the
Bureau of National Statistics of
Kazakhstan. Economic growth was
primarily driven by the non-resource
sector. Key contributors included
agriculture, manufacturing industry,
construction, trade, transportation and
storage. Although the overall trend for
the 2024 was downward, annual inflation
in Kazakhstan led to an increase in prices
by 8.6%. Regional military conflicts,
global energy market volatility and a
decline in oil production continue to
impact economic conditions. Inflation
risks stem from rising prices in key
trading partners and global food costs,
while domestic pressures include higher
utility tariffs, strong demand from fiscal
stimulus, and unanchored inflation
expectations.
The Kazakhstani Tenge (KZT)
experienced a devaluation relative to
the US dollar, declining by 15.2% in
2024, closing the year at 523.54 KZT per
US dollar.
What it means for us
Cost optimisation continues to be a
critical focus for our company, aimed at
preserving and enhancing our cash
reserves. Despite our G&A expenses
maintaining fairly consistent levels,
we are dedicated to minimising any
necessary cost increases associated with
the development of new projects, such
as Stepnoy Leopard and Ural O&G.
Payroll indexation/overall inflationary
pressure offset by KZT devaluation.
Competitive environment
Kazakhstan and Azerbaijan are the two
main oil-producing countries in the
Caspian region whilst Turkmenistan and
Uzbekistan are the predominant gas
producers. Russia plays an important
role in the region by providing a
transportation corridor between the
Caspian Sea and the Black Sea.
As the world’s largest landlocked
country, Kazakhstan depends on an
extended network of pipelines and
railways to deliver its products to export
markets. Pipeline exports are primarily
delivered via Russia (Atyrau-Samara
and the Caspian Pipeline Consortium
pipelines); via Azerbaijan and Turkey
(the Baku- Tbilisi-Ceyhan pipeline); and
one via China (Atasu-Alashankou). Rail
exports utilise Kazakhstan’s extensive
rail network, reaching markets
throughout the FSU and beyond (please
see page 5 where we discuss the impact
of Russian sanctions resulting from the
Russia-Ukraine conflict on our business).
What it means for us
Vast distances between Central Asian
markets, long-established trading
relationships and in-place infrastructure
promote co-dependency between FSU
exporters. Kazakhstan naturally benefits
from its geo-strategic position between
Russia and China. Nostrum is situated
at the heart of the export corridor that
exists between Russia and multiple
markets to the west of the Caspian.
Nostrum’s assets are located in the
Pre-Caspian Basin close to the Russian
border and in close proximity to some
of the most significant hydrocarbon
resources in the FSU. This advantageous
position means that the Company has
access to multiple export markets for its
products, as well as labour and specialist
equipment providers. In addition,
Nostrum has a substantial amount of
spare gas processing capacity in a
region where there is a significant
amount of stranded gas with a growing
need for gas processing.
Kazakhstan annual GDP growth
4.8%
(2023: 5.0%)
Kazakhstan annual inflation rate
8.6%
(2023: 9.8%)
4 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
K A Z A K H S T A N
C H I N A
R U S S I A
Geopolitical uncertainty
In 2024, global oil markets remained highly volatile, shaped by
escalating geopolitical tensions in the Middle East and the
ongoing conflict between Russia and Ukraine. These
developments have continued to fuel market uncertainty,
contributing to fluctuations in crude oil prices. Concerns
over potential supply disruptions have persisted, with the
International Monetary Fund (IMF) cautioning that geopolitical-
driven commodity price spikes could pose risks to global
disinflation efforts.
In late 2022 the Group of Seven countries – the United States,
Canada, Britain, Italy, France, Germany and Japan – together
with the European Union and Australia imposed a cap of
$60-per-barrel on the sale of Russian oil on a free-on-board
basis, seeking to reduce Russia’s revenue from seaborne oil
exports as part of sanctions.
In 2024, Brent crude averaged US$80.6 per barrel, while Urals
crude traded at an average of US$69 per barrel, resulting in a
price differential of US$12 per barrel. This gap has narrowed
significantly compared to US$35-40 per barrel in 2022 and
US$20.8 per barrel in 2023. The spread would have had
substantial negative impact on the Company’s revenues, if
not addressed actively by management to mitigate these risks
related to the secondary effects of the Russian invasion of
Ukraine.
What it means for us
During 2023 Nostrum considered and constantly analysed
alternative export routes where export prices are not linked
to Urals quotation for oil and gas condensate supplies.
As a result of this exercise, in 2024 the Company managed
to achieve improved pricing with lower than average discounts
for crude oil and gas condensate.
Kazakhstan’s energy transition strategy
As stated in Presidential Decree No. 121 dated February 2,
2023, the Republic of Kazakhstan is committed to achieving
carbon neutrality by 2060. Attaining this ambitious target
requires a fundamental transformation of the national energy
system, centered on three key areas: decarbonising the primary
energy supply, transitioning to cleaner electricity and heat
production, and enhancing energy efficiency across multiple
sectors.
The transition to natural gas is a pivotal step in Kazakhstan’s
low-carbon development strategy. As a cleaner fossil fuel,
natural gas serves as a bridge toward a more sustainable energy
mix, offering lower emissions than coal and oil while aligning
with the global shift toward cleaner energy solutions.
Furthermore, natural gas utilisation can improve energy
efficiency and minimise methane emissions within the oil and
gas sector.
What it means for us
Utilising existing infrastructure, such as the Nostrum GTF, is key
to addressing Kazakhstan’s gas supply deficit. Nostrum alone
could reduce the shortfall by 4 bcm annually, significantly
supporting the country’s energy needs. To ensure a stable and
sustainable gas supply, strategic investments and initiatives are
essential. Additionally, Nostrum has a technically verified,
self-funded project to receive and process raw gas from the
nearby Karachaganak field, which is currently re-injected or
exported for processing.
In 2023, Nostrum successfully restarted GTU-3, located at the
Chinarevskoye field, north of Uralsk. Proximity to both
international and domestic pipelines ensures the safe and
efficient transportation of all processed products from the
company’s infrastructure hub.
Marketable gas shortage
in Kazakhstan forecasted
for 2030
9 bcm
Nostrum’s processing
capacity
4.2 bcma
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 5 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
C H I N A
R U S S I A
Geopolitical uncertainty
In 2024, global oil markets remained highly volatile, shaped by
escalating geopolitical tensions in the Middle East and the
ongoing conflict between Russia and Ukraine. These
developments have continued to fuel market uncertainty,
contributing to fluctuations in crude oil prices. Concerns
over potential supply disruptions have persisted, with the
International Monetary Fund (IMF) cautioning that geopolitical-
driven commodity price spikes could pose risks to global
disinflation efforts.
In late 2022 the Group of Seven countries – the United States,
Canada, Britain, Italy, France, Germany and Japan – together
with the European Union and Australia imposed a cap of
$60-per-barrel on the sale of Russian oil on a free-on-board
basis, seeking to reduce Russia’s revenue from seaborne oil
exports as part of sanctions.
In 2024, Brent crude averaged US$80.6 per barrel, while Urals
crude traded at an average of US$69 per barrel, resulting in a
price differential of US$12 per barrel. This gap has narrowed
significantly compared to US$35-40 per barrel in 2022 and
US$20.8 per barrel in 2023. The spread would have had
substantial negative impact on the Company’s revenues, if
not addressed actively by management to mitigate these risks
related to the secondary effects of the Russian invasion of
Ukraine.
What it means for us
During 2023 Nostrum considered and constantly analysed
alternative export routes where export prices are not linked
to Urals quotation for oil and gas condensate supplies.
As a result of this exercise, in 2024 the Company managed
to achieve improved pricing with lower than average discounts
for crude oil and gas condensate.
Kazakhstan’s energy transition strategy
As stated in Presidential Decree No. 121 dated February 2,
2023, the Republic of Kazakhstan is committed to achieving
carbon neutrality by 2060. Attaining this ambitious target
requires a fundamental transformation of the national energy
system, centered on three key areas: decarbonising the primary
energy supply, transitioning to cleaner electricity and heat
production, and enhancing energy efficiency across multiple
sectors.
The transition to natural gas is a pivotal step in Kazakhstan’s
low-carbon development strategy. As a cleaner fossil fuel,
natural gas serves as a bridge toward a more sustainable energy
mix, offering lower emissions than coal and oil while aligning
with the global shift toward cleaner energy solutions.
Furthermore, natural gas utilisation can improve energy
efficiency and minimise methane emissions within the oil and
gas sector.
What it means for us
Utilising existing infrastructure, such as the Nostrum GTF, is key
to addressing Kazakhstan’s gas supply deficit. Nostrum alone
could reduce the shortfall by 4 bcm annually, significantly
supporting the country’s energy needs. To ensure a stable and
sustainable gas supply, strategic investments and initiatives are
essential. Additionally, Nostrum has a technically verified,
self-funded project to receive and process raw gas from the
nearby Karachaganak field, which is currently re-injected or
exported for processing.
In 2023, Nostrum successfully restarted GTU-3, located at the
Chinarevskoye field, north of Uralsk. Proximity to both
international and domestic pipelines ensures the safe and
efficient transportation of all processed products from the
company’s infrastructure hub.
Marketable gas shortage
in Kazakhstan forecasted
for 2030
9 bcm
Nostrum’s processing
capacity
4.2 bcma
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 5 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
Creating value for our stakeholders
BUSINESS MODEL
Nostrum is ideally positioned to contribute to Kazakhstan’s transition to a cleaner
energy strategy and to strengthen its energy security.
Our resources and relationships Our value creation model
Upstream
Third-party assets
Total 2P reserves
mmboe
128
Facilities
GTF processing capacity
bcma
4.2
Power generation capacity
mWh
41
Owned & operated fields
2
Liquids storage capacity
thousand m 3
40
Asset & Operations
QazagGaz JSC NC
relationship
15 years
KazTransOil JSC
relationship
8 years
Ural O&G
gas relationship
7 years
Citibank and Halyk Bank
relationships
15 years
Local partners
Total assets
US$m
617
Cash at 31 December 2024
US$m
150
Financial
Employees
605
People
Upstream
Nostrum owned & operated and potential
third-party sources of upstream gas fields.
Major opportunities in the region to secure
long-term supply of raw gas.
Nostrum assets
Stepnoy Leopard fields
80% Nostrum working
interest: 2P reserves
mmboe
110
Chinarevskoye field
2P reserves
mmboe
18
Rozhkovskoye field
targeted reserves 1
mmboe
159 1
Karachaganak field
Possible processing tie-back
opportunities. Estimated
gross reserves of over
2.4 billion barrels of
condensate and 16 tcf of gas
1
2
4
6
3
1 GTU 3: 2.5 bcma
4 GTU 1&2: 1.7 bcma
2 LPG Storage and loading
5 Oil/Cond. storage
3 Power plant: 26mwh
6 Oil Treatment unit (OTU)
5
1. Source: MOL Group announcement 22 December 2023.
GRI 2-6
6 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
BUSINESS MODEL
Nostrum is ideally positioned to contribute to Kazakhstan’s transition to a cleaner
energy strategy and to strengthen its energy security.
Our resources and relationships Our value creation model
Upstream
Third-party assets
Total 2P reserves
mmboe
128
Facilities
GTF processing capacity
bcma
4.2
Power generation capacity
mWh
41
Owned & operated fields
2
Liquids storage capacity
thousand m 3
40
Asset & Operations
QazagGaz JSC NC
relationship
15 years
KazTransOil JSC
relationship
8 years
Ural O&G
gas relationship
7 years
Citibank and Halyk Bank
relationships
15 years
Local partners
Total assets
US$m
617
Cash at 31 December 2024
US$m
150
Financial
Employees
605
People
Upstream
Nostrum owned & operated and potential
third-party sources of upstream gas fields.
Major opportunities in the region to secure
long-term supply of raw gas.
Nostrum assets
Stepnoy Leopard fields
80% Nostrum working
interest: 2P reserves
mmboe
110
Chinarevskoye field
2P reserves
mmboe
18
Rozhkovskoye field
targeted reserves 1
mmboe
159 1
Karachaganak field
Possible processing tie-back
opportunities. Estimated
gross reserves of over
2.4 billion barrels of
condensate and 16 tcf of gas
1
2
4
6
3
1 GTU 3: 2.5 bcma
4 GTU 1&2: 1.7 bcma
2 LPG Storage and loading
5 Oil/Cond. storage
3 Power plant: 26mwh
6 Oil Treatment unit (OTU)
5
1. Source: MOL Group announcement 22 December 2023.
GRI 2-6
6 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Stakeholder value creation
Processing
Proven third-party gas processor with an export
hub and well-positioned to expand midstream
operations.
State-of-the-art 4.2bcma gas processing
facilities. Strategic location, attractive access
to multiple transportation routes.
2024 titled production and processed
volumes (boepd)
Oil
Condensate
Dry gas
LPG
Titled production: 14,935 boepd
Processed volumes: 19,831 boepd
• Nostrum is one of the leading employers in north-western
Kazakhstan. 91% of all employees are Kazakhstani.
• In 2024, our employees received a total of 59,480 hours of
training, averaging 110 hours per employee.
• In 2024 we invested US$606,739 in training programmes for
Kazakhstani specialists and local communities.
• In 2024, our strong dedication to workplace safety resulted in
zero LTIR and 0.6 TRIR incidents per million man-hours,
reflecting a 16% decrease compared to 2023.
• Key programmes such as Diversity & Inclusion in Recruitment,
Mental Health & Wellness, and the Global Employee
Handbook are designed to foster a more inclusive and
supportive workplace while ensuring consistency across our
business.
Our people
• Since 1997, Nostrum has invested over US$2.5bn into
Kazakhstan.
• We contributed US$27.93m of taxes in 2024, bringing our total
tax and other payments to government in Kazakhstan to over
US$1bn since 1997.
• Throughout 2024, we remained committed to supporting
local communities through ongoing social and charitable
initiatives.
• In 2024, we allocated US$0.1m (KZT 25 million) in social
projects, focusing on regional development, education and
sports promotion.
• Following the devastating floods in West Kazakhstan, which
severely impacted the region where we operate, we provided
critical relief efforts, including US$1.2m contribution to
construct 20 new homes for displaced residents.
• Nostrum remains a key partner for local suppliers. In 2024,
88% of our procurement spending went to Kazakhstani
companies (up from 75% in 2023).
Our host communities
• Five-fold increase in Nostrum 2P reserves to 128 mmboe in 2024.
• Ural O&G contract has been extended on new terms until
May 2031.
• EBITDA increased 16.2% Y-o-Y to US$48.9m.
• Cash coupon payments of US$16.5m in FY 2024.
Our shareholders and bondholders
2,536
7,965 2
2,537 2
4,896 1 1,897
1. Nostrum receives a tolling fee for third-party condensate processing.
2. Dry gas and LPG are owned and sold by Nostrum.
Chinarevskoye
Titled production from
third party feedstock
Third party processing
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 7 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
Processing
Proven third-party gas processor with an export
hub and well-positioned to expand midstream
operations.
State-of-the-art 4.2bcma gas processing
facilities. Strategic location, attractive access
to multiple transportation routes.
2024 titled production and processed
volumes (boepd)
Oil
Condensate
Dry gas
LPG
Titled production: 14,935 boepd
Processed volumes: 19,831 boepd
• Nostrum is one of the leading employers in north-western
Kazakhstan. 91% of all employees are Kazakhstani.
• In 2024, our employees received a total of 59,480 hours of
training, averaging 110 hours per employee.
• In 2024 we invested US$606,739 in training programmes for
Kazakhstani specialists and local communities.
• In 2024, our strong dedication to workplace safety resulted in
zero LTIR and 0.6 TRIR incidents per million man-hours,
reflecting a 16% decrease compared to 2023.
• Key programmes such as Diversity & Inclusion in Recruitment,
Mental Health & Wellness, and the Global Employee
Handbook are designed to foster a more inclusive and
supportive workplace while ensuring consistency across our
business.
Our people
• Since 1997, Nostrum has invested over US$2.5bn into
Kazakhstan.
• We contributed US$27.93m of taxes in 2024, bringing our total
tax and other payments to government in Kazakhstan to over
US$1bn since 1997.
• Throughout 2024, we remained committed to supporting
local communities through ongoing social and charitable
initiatives.
• In 2024, we allocated US$0.1m (KZT 25 million) in social
projects, focusing on regional development, education and
sports promotion.
• Following the devastating floods in West Kazakhstan, which
severely impacted the region where we operate, we provided
critical relief efforts, including US$1.2m contribution to
construct 20 new homes for displaced residents.
• Nostrum remains a key partner for local suppliers. In 2024,
88% of our procurement spending went to Kazakhstani
companies (up from 75% in 2023).
Our host communities
• Five-fold increase in Nostrum 2P reserves to 128 mmboe in 2024.
• Ural O&G contract has been extended on new terms until
May 2031.
• EBITDA increased 16.2% Y-o-Y to US$48.9m.
• Cash coupon payments of US$16.5m in FY 2024.
Our shareholders and bondholders
2,536
7,965 2
2,537 2
4,896 1 1,897
1. Nostrum receives a tolling fee for third-party condensate processing.
2. Dry gas and LPG are owned and sold by Nostrum.
Chinarevskoye
Titled production from
third party feedstock
Third party processing
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 7 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
Moving from
value creation
to realisation
CHIEF EXECUTIVE OFFICER’S STATEMENT
We achieved significant improvements in
processed volumes, revenues and
profitability, due to the continuing success
of the Ural O&G tie-back to our processing
facilities, additional production from our
limited-scale Chinarevskoye drilling
programme, as well as continuing
realisation of the production benefits from
our 2023 gas lift expansion project. This,
together with strong financial discipline,
resulted in a healthy cash position at the
end of the year.
Safety remains our top priority at Nostrum.
In 2024, we strengthened our safety culture
and operating standards, achieving a
zero-fatality record. We also advanced our
ESG commitments and remain committed
to improving energy efficiency, reducing
emissions, and optimizing operations to
build a more sustainable future.
In 2024 and early 2025, we continued
driving value realisation by executing
our mixed-asset energy strategy,
achieving key milestones in upstream
production growth, infrastructure
utilisation, and financial stability.”
Arfan Khan
Chief Executive Officer
Reliable and efficient operator
and partner
98%
processing facilities uptime for FY 2024
Stepnoy Leopard fields (Nostrum)
138 mmboe
gross 2P reserves according to Xodus CPR
Upstream Achievements:
In 2024, Nostrum saw significant growth in
titled production, which contributed to a
48% year-over-year increase in product
volumes, bringing our average daily
production to 14,935 boepd. This growth
was contributed both by additional gas and
LPG from Ural O&G processing, and by
additional production from the limited-
scale drilling programme together with
efficient well workover and intervention
programmes. We also achieved a
substantial increase in our 2P reserves
thanks to the successful two-well appraisal
progamme at the Stepnoy Leopard fields,
followed by a CPR confirming an estimated
138 mmboe 2P reserves gross.
8 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
value creation
to realisation
CHIEF EXECUTIVE OFFICER’S STATEMENT
We achieved significant improvements in
processed volumes, revenues and
profitability, due to the continuing success
of the Ural O&G tie-back to our processing
facilities, additional production from our
limited-scale Chinarevskoye drilling
programme, as well as continuing
realisation of the production benefits from
our 2023 gas lift expansion project. This,
together with strong financial discipline,
resulted in a healthy cash position at the
end of the year.
Safety remains our top priority at Nostrum.
In 2024, we strengthened our safety culture
and operating standards, achieving a
zero-fatality record. We also advanced our
ESG commitments and remain committed
to improving energy efficiency, reducing
emissions, and optimizing operations to
build a more sustainable future.
In 2024 and early 2025, we continued
driving value realisation by executing
our mixed-asset energy strategy,
achieving key milestones in upstream
production growth, infrastructure
utilisation, and financial stability.”
Arfan Khan
Chief Executive Officer
Reliable and efficient operator
and partner
98%
processing facilities uptime for FY 2024
Stepnoy Leopard fields (Nostrum)
138 mmboe
gross 2P reserves according to Xodus CPR
Upstream Achievements:
In 2024, Nostrum saw significant growth in
titled production, which contributed to a
48% year-over-year increase in product
volumes, bringing our average daily
production to 14,935 boepd. This growth
was contributed both by additional gas and
LPG from Ural O&G processing, and by
additional production from the limited-
scale drilling programme together with
efficient well workover and intervention
programmes. We also achieved a
substantial increase in our 2P reserves
thanks to the successful two-well appraisal
progamme at the Stepnoy Leopard fields,
followed by a CPR confirming an estimated
138 mmboe 2P reserves gross.
8 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Chinarevskoye field (Nostrum)
18 mmboe
2P reserves of oil and gas condensate
Rozhkovskoye field (Ural O&G)
158.8 mmboe
expected to be recoverable volumes of gas
and condensate according to the MOL group
Stepnoy Leopard fields
development
Following Nostrum’s strategic acquisition of
an 80% stake in Positiv Invest LLP in 2023,
which holds the subsoil use rights to the
Stepnoy Leopard Fields in the West
Kazakhstan, Nostrum achieved significant
project milestones during 2024 and
early 2025.
Located just 100 km from our world-class
processing infrastructure, Stepnoy Leopard
fields offer an attractive upstream tie-back
opportunity. Production from the SL fields
will further improve materially the utilization
of our world class 4.2 bcma gas processing
facilities and the resulting cashflows,
helping to offset natural production
decline at Chinarevskoye.
In April 2024, after successfully completing
well appraisal operations, we took a final
investment decision for the first phase of
the field’s development, with a gross capital
budget in the range of US$100 to US$130
million. In July 2024, this was followed by
an independent, third-party Competent
Person’s Report supporting the commercial
viability of the scalable full-field development
targeting the key reservoirs starting with
the Eastern fields with subsequent
expansion to the Western fields.
The Stepnoy Leopard Competent Person’s
Report supported an estimated 138
mmboe of gross 2P reserves and US$220
million in after-tax NPV10 at a 34% IRR. In
addition to 2P reserves, the field contains
67 mmboe of contingent resources,
offering further commercial upside.
In April 2025, we achieved another key
project milestone in the Company’s
mixed-asset strategy by securing approval
from the Ministry of Energy of the Republic
of Kazakhstan for a phased, full-field
development plan extending until 2044,
allowing the Company to deploy optimum
capital allocation, whilst meeting its target
production start-up date between late 2026
and early 2027.
Chinarevskoye limited-
scale drilling programme
Our Chinarevskoye field continues to
experience natural production decline,
typical of mature reservoirs. To mitigate
this, and to protect our licence
commitments, we have focused on
targeted drilling, well interventions,
and production optimization.
In 2024, we successfully drilled well No.301
on time and within budget, reaching a
total depth of 4,980 meters. The well
targeted multiple in-fill zones across the
Carboniferous and Devonian reservoirs
and encountered hydrocarbons (oil,
gas-condensate) in all three key intervals.
The well was perforated in the lowest of
these reservoirs and put into production in
May 2024, with initial flow rates in line with
the our expectations. We also drilled well
No.41 for an appraisal sidetrack to the
upper Devonian gas-condensate horizon.
The well was targeted downdip of the
currently producing No. 40 well with a goal
to test the areal extent of the reservoir as
indicated by the in-place volumes reliably
estimated from material balance of the
historical production. However, the spatial
orientation and geometry of the reservoir
remained the primary uncertainties. The
targeting was guided by the seismic
amplitude attributes that did not have
much calibration due to absence of key
data such as velocity & density and as such
the target location was considered highly
risky. The well missed the reservoir by a few
hundred meters based on the revised
calibrations to the seismic amplitude with
key data acquired from this well. With
significantly improved certainty of the
reservoir spatial architecture, a future well
can now be planned with high confidence.
The well did encounter secondary intervals
that were hydrocarbon-bearing, however,
they proved to be marginal. The well has
been suspended for the time being.
In 2025, we expect to continue with the
limited-scale drilling campaigns targeting
high-value subsurface opportunities where
possible whilst ensuring compliance with
our licence to operate commitments.
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 9 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
18 mmboe
2P reserves of oil and gas condensate
Rozhkovskoye field (Ural O&G)
158.8 mmboe
expected to be recoverable volumes of gas
and condensate according to the MOL group
Stepnoy Leopard fields
development
Following Nostrum’s strategic acquisition of
an 80% stake in Positiv Invest LLP in 2023,
which holds the subsoil use rights to the
Stepnoy Leopard Fields in the West
Kazakhstan, Nostrum achieved significant
project milestones during 2024 and
early 2025.
Located just 100 km from our world-class
processing infrastructure, Stepnoy Leopard
fields offer an attractive upstream tie-back
opportunity. Production from the SL fields
will further improve materially the utilization
of our world class 4.2 bcma gas processing
facilities and the resulting cashflows,
helping to offset natural production
decline at Chinarevskoye.
In April 2024, after successfully completing
well appraisal operations, we took a final
investment decision for the first phase of
the field’s development, with a gross capital
budget in the range of US$100 to US$130
million. In July 2024, this was followed by
an independent, third-party Competent
Person’s Report supporting the commercial
viability of the scalable full-field development
targeting the key reservoirs starting with
the Eastern fields with subsequent
expansion to the Western fields.
The Stepnoy Leopard Competent Person’s
Report supported an estimated 138
mmboe of gross 2P reserves and US$220
million in after-tax NPV10 at a 34% IRR. In
addition to 2P reserves, the field contains
67 mmboe of contingent resources,
offering further commercial upside.
In April 2025, we achieved another key
project milestone in the Company’s
mixed-asset strategy by securing approval
from the Ministry of Energy of the Republic
of Kazakhstan for a phased, full-field
development plan extending until 2044,
allowing the Company to deploy optimum
capital allocation, whilst meeting its target
production start-up date between late 2026
and early 2027.
Chinarevskoye limited-
scale drilling programme
Our Chinarevskoye field continues to
experience natural production decline,
typical of mature reservoirs. To mitigate
this, and to protect our licence
commitments, we have focused on
targeted drilling, well interventions,
and production optimization.
In 2024, we successfully drilled well No.301
on time and within budget, reaching a
total depth of 4,980 meters. The well
targeted multiple in-fill zones across the
Carboniferous and Devonian reservoirs
and encountered hydrocarbons (oil,
gas-condensate) in all three key intervals.
The well was perforated in the lowest of
these reservoirs and put into production in
May 2024, with initial flow rates in line with
the our expectations. We also drilled well
No.41 for an appraisal sidetrack to the
upper Devonian gas-condensate horizon.
The well was targeted downdip of the
currently producing No. 40 well with a goal
to test the areal extent of the reservoir as
indicated by the in-place volumes reliably
estimated from material balance of the
historical production. However, the spatial
orientation and geometry of the reservoir
remained the primary uncertainties. The
targeting was guided by the seismic
amplitude attributes that did not have
much calibration due to absence of key
data such as velocity & density and as such
the target location was considered highly
risky. The well missed the reservoir by a few
hundred meters based on the revised
calibrations to the seismic amplitude with
key data acquired from this well. With
significantly improved certainty of the
reservoir spatial architecture, a future well
can now be planned with high confidence.
The well did encounter secondary intervals
that were hydrocarbon-bearing, however,
they proved to be marginal. The well has
been suspended for the time being.
In 2025, we expect to continue with the
limited-scale drilling campaigns targeting
high-value subsurface opportunities where
possible whilst ensuring compliance with
our licence to operate commitments.
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 9 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
CHIEF EXECUTIVE OFFICER’S STATEMENT
Midstream Achievements:
We continue to firm up our position as a
reliable third-party gas processor operating
a world-class infrastructure, which is
demonstrated by nearly doubling of our
total processed volumes in 2024 compared
to 2023. Processing facilities availability
averaged at approximately 98% for the
year, with increased efficiency resulting
from GTU-3 following its re-start in 2023
that is delivering improved LPG yields of
approximately 26%.
Ural O&G tie-back
(Rozhkovskoye Field)
Our collaboration with Ural O&G has led
to a very successful tie-back project for
its shareholders and we expect this to
continue accreting significant value with
further development of the Rozhkovskoye
field. This project also serves as a proof-of-
concept for commercialisation of the
area-wide stranded gas fields that can take
advantage of our gas processing hub.
Further, increasing the utilisation of our
world-class 4.2 bcma gas treatment
facilities provides the lowest cost and
fastest path to meeting the rapidly rising
demand for commercial gas in RoK.
According to the MOL group (a 27.5%
shareholder in Ural O&G) 158.8 mmboe of
gas and condensate are expected to be
recoverable from the Rozhkovskoye field;
this includes 101.5 mmboe of gas and
57.3 mmboe of condensate, based on the
Kazakhstan State Balance Reserves Report.
In 2024, production at Rozhkovskoye
reached 0.3 bcm of gas.
In March 2025, we entered into a binding
agreement with Ural O&G to extend the
processing of the hydrocarbons, on new
terms, until May 2031. The agreement
extension is value-accretive and mutually
beneficial for both parties. It provides for a
fixed process fee structure across all the
products that gives rise to sustainable
cash-flows and plant operations and
demonstrates the continuing success of
Nostrum’s mixed-asset strategy and its
capabilities as a reliable and efficient
operator and partner. Securing additional
third-party hydrocarbon feedstock through
to 2031, together with Nostrum’s plans to
develop the upstream Stepnoy Leopard
fields as a tie-back, represent important
steps towards meaningfully increasing the
utilisation of Nostrum’s world class
processing facilities that will help shape a
robust growth-oriented business plan for
the next decade.
At the same time, we recognize that the
extended agreement is mutually beneficial
for Ural O&G enabling further field
development of the Rozhkovskoye field
to the fullest extent.
HSE
Safety continues to be our foremost
priority. In 2024, we reinforced our
commitment to a strong safety culture and
rigorous operating standards, achieving a
record of zero fatalities and no lost time
injury incidents. We continue to enhance
safety systems, leadership engagement,
and risk management, making our
operations safer and more reliable.
We also advanced our ESG commitments,
integrating sustainability into our business
and maintaining strong governance.
Nostrum ranked in the 11th percentile
among oil and gas producers in
Sustainalytics’ ESG Risk Ratings, reflecting
our focus on responsible operations.
Supporting local employment remains a
priority, with over 92% of our workforce
being Kazakh nationals.
We continue working to reduce our
environmental impact. In 2024, GHG
emissions in CO₂ equivalent 256,089
tonnes, and increase of 42% primarily due
to the processing of third-party feedstock
from Ural O&G, as increase in processed
volumes requires more energy,
contributing to such rise in emissions.
However, we made our operations more
efficient, lowering emission intensity by
28% to 35,282 tCO₂/mmboe of processed
volumes. We remain committed to
improving energy efficiency, reducing
emissions, and optimizing operations
to build a more sustainable future.
Beyond our operations, we stepped up
to support the West Kazakhstan region
after devastating floods. We contributed
US$1.2m in relief efforts, funding the
construction of 20 new homes for
displaced families.
Operating efficiency
US$5.8 per boe
Operating expenses per boe of processed
volumes in 2024
Unrestricted cash
US$150.4m
Cash reserves maintained through 2024
10 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Midstream Achievements:
We continue to firm up our position as a
reliable third-party gas processor operating
a world-class infrastructure, which is
demonstrated by nearly doubling of our
total processed volumes in 2024 compared
to 2023. Processing facilities availability
averaged at approximately 98% for the
year, with increased efficiency resulting
from GTU-3 following its re-start in 2023
that is delivering improved LPG yields of
approximately 26%.
Ural O&G tie-back
(Rozhkovskoye Field)
Our collaboration with Ural O&G has led
to a very successful tie-back project for
its shareholders and we expect this to
continue accreting significant value with
further development of the Rozhkovskoye
field. This project also serves as a proof-of-
concept for commercialisation of the
area-wide stranded gas fields that can take
advantage of our gas processing hub.
Further, increasing the utilisation of our
world-class 4.2 bcma gas treatment
facilities provides the lowest cost and
fastest path to meeting the rapidly rising
demand for commercial gas in RoK.
According to the MOL group (a 27.5%
shareholder in Ural O&G) 158.8 mmboe of
gas and condensate are expected to be
recoverable from the Rozhkovskoye field;
this includes 101.5 mmboe of gas and
57.3 mmboe of condensate, based on the
Kazakhstan State Balance Reserves Report.
In 2024, production at Rozhkovskoye
reached 0.3 bcm of gas.
In March 2025, we entered into a binding
agreement with Ural O&G to extend the
processing of the hydrocarbons, on new
terms, until May 2031. The agreement
extension is value-accretive and mutually
beneficial for both parties. It provides for a
fixed process fee structure across all the
products that gives rise to sustainable
cash-flows and plant operations and
demonstrates the continuing success of
Nostrum’s mixed-asset strategy and its
capabilities as a reliable and efficient
operator and partner. Securing additional
third-party hydrocarbon feedstock through
to 2031, together with Nostrum’s plans to
develop the upstream Stepnoy Leopard
fields as a tie-back, represent important
steps towards meaningfully increasing the
utilisation of Nostrum’s world class
processing facilities that will help shape a
robust growth-oriented business plan for
the next decade.
At the same time, we recognize that the
extended agreement is mutually beneficial
for Ural O&G enabling further field
development of the Rozhkovskoye field
to the fullest extent.
HSE
Safety continues to be our foremost
priority. In 2024, we reinforced our
commitment to a strong safety culture and
rigorous operating standards, achieving a
record of zero fatalities and no lost time
injury incidents. We continue to enhance
safety systems, leadership engagement,
and risk management, making our
operations safer and more reliable.
We also advanced our ESG commitments,
integrating sustainability into our business
and maintaining strong governance.
Nostrum ranked in the 11th percentile
among oil and gas producers in
Sustainalytics’ ESG Risk Ratings, reflecting
our focus on responsible operations.
Supporting local employment remains a
priority, with over 92% of our workforce
being Kazakh nationals.
We continue working to reduce our
environmental impact. In 2024, GHG
emissions in CO₂ equivalent 256,089
tonnes, and increase of 42% primarily due
to the processing of third-party feedstock
from Ural O&G, as increase in processed
volumes requires more energy,
contributing to such rise in emissions.
However, we made our operations more
efficient, lowering emission intensity by
28% to 35,282 tCO₂/mmboe of processed
volumes. We remain committed to
improving energy efficiency, reducing
emissions, and optimizing operations
to build a more sustainable future.
Beyond our operations, we stepped up
to support the West Kazakhstan region
after devastating floods. We contributed
US$1.2m in relief efforts, funding the
construction of 20 new homes for
displaced families.
Operating efficiency
US$5.8 per boe
Operating expenses per boe of processed
volumes in 2024
Unrestricted cash
US$150.4m
Cash reserves maintained through 2024
10 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Financial Performance
The Group delivered strong financial
performance in 2024, resulting from a
combination of increased third-party
processing volumes, efficiently managing
our upstream and processing operations
as well as tight cost control. However,
continuing production decline from the
mature Chinarevskoye field and a weaker
average Brent price (US$80.6/bbl in 2024
vs US$82.2/bbl in 2023) have partially offset
the improvement in financial results.
Processed volumes increased year-on-year
by 94% to 19,831 boepd and sales volumes
by 47% to 13,038 boped. These volume
increases delivered a year-on-year 14.6%
increase in revenues to US$137.1m and a
16.2% increase in EBITDA to US$48.9m.
The increased processed volumes also
demonstrated the benefits of increased
utilisation of the processing facilities with
a largely fixed operating cost base,
improving economies of scale, as reflected
in the reduction of operating expenses
down to US$5.8 per boe in 2024 from
US$9.8 per boe in 2023, and general and
administrative expenses US$1.9 per boe in
2024 compared to US$3.7 per boe in 2023.
A material fixed assets impairment reversal
not only improved our balance sheet but
also demonstrates the improved future
prospects and value from our GTUs, the
extended Ural O&G agreement and
the future potential of SL supported by
the CPR.
We maintained a strong liquidity position,
with unrestricted cash at year end of
US$150.4m, which would be US$178.1m
before one-off cashflow items (please see
page 49). Capital expenditures related to
Chinarevskoye and Stepnoy Leopard fields,
as well as bond coupon payments, led to a
reduction of US$11.3m in unrestricted cash,
but we continued to generate healthy
operating cash flow of US$33.1m.
Our restricted cash balance at year
end was US$25.9m.
Cost control remains a critical focus to
preserve our cash reserves for the growth-
oriented programmes. We are also
committed to minimising cost increases
necessary for the development of new
projects such as Stepnoy Leopard, by
reallocating and efficiently utilising our
existing resources.
Conclusion
I would like to express my sincere gratitude
to the Nostrum Board for strategy and
timely support and to our entire team for
their hard work and dedication during
the past year. In 2024 and early 2025 we
continued driving value realisation by
executing our mixed-asset energy strategy,
achieving key milestones in production
growth, infrastructure optimization, and
financial stability.
As we move forward, we remain well-
positioned to advance our strategic
catalysts and growth opportunities, drive
sustainable performance, and create
long-term value for all our stakeholders.
I appreciate the trust and support from
our investors, the Board, employees, and
partners. Together, we will continue
building on this momentum and solidify
our industry-leading position as a mid-size
independent operator in Kazakhstan’s
energy sector.
Arfan Khan
Chief Executive Officer
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 11 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
The Group delivered strong financial
performance in 2024, resulting from a
combination of increased third-party
processing volumes, efficiently managing
our upstream and processing operations
as well as tight cost control. However,
continuing production decline from the
mature Chinarevskoye field and a weaker
average Brent price (US$80.6/bbl in 2024
vs US$82.2/bbl in 2023) have partially offset
the improvement in financial results.
Processed volumes increased year-on-year
by 94% to 19,831 boepd and sales volumes
by 47% to 13,038 boped. These volume
increases delivered a year-on-year 14.6%
increase in revenues to US$137.1m and a
16.2% increase in EBITDA to US$48.9m.
The increased processed volumes also
demonstrated the benefits of increased
utilisation of the processing facilities with
a largely fixed operating cost base,
improving economies of scale, as reflected
in the reduction of operating expenses
down to US$5.8 per boe in 2024 from
US$9.8 per boe in 2023, and general and
administrative expenses US$1.9 per boe in
2024 compared to US$3.7 per boe in 2023.
A material fixed assets impairment reversal
not only improved our balance sheet but
also demonstrates the improved future
prospects and value from our GTUs, the
extended Ural O&G agreement and
the future potential of SL supported by
the CPR.
We maintained a strong liquidity position,
with unrestricted cash at year end of
US$150.4m, which would be US$178.1m
before one-off cashflow items (please see
page 49). Capital expenditures related to
Chinarevskoye and Stepnoy Leopard fields,
as well as bond coupon payments, led to a
reduction of US$11.3m in unrestricted cash,
but we continued to generate healthy
operating cash flow of US$33.1m.
Our restricted cash balance at year
end was US$25.9m.
Cost control remains a critical focus to
preserve our cash reserves for the growth-
oriented programmes. We are also
committed to minimising cost increases
necessary for the development of new
projects such as Stepnoy Leopard, by
reallocating and efficiently utilising our
existing resources.
Conclusion
I would like to express my sincere gratitude
to the Nostrum Board for strategy and
timely support and to our entire team for
their hard work and dedication during
the past year. In 2024 and early 2025 we
continued driving value realisation by
executing our mixed-asset energy strategy,
achieving key milestones in production
growth, infrastructure optimization, and
financial stability.
As we move forward, we remain well-
positioned to advance our strategic
catalysts and growth opportunities, drive
sustainable performance, and create
long-term value for all our stakeholders.
I appreciate the trust and support from
our investors, the Board, employees, and
partners. Together, we will continue
building on this momentum and solidify
our industry-leading position as a mid-size
independent operator in Kazakhstan’s
energy sector.
Arfan Khan
Chief Executive Officer
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 11 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
Strategy for the future
The Company is now capitalising on growth catalysts,
focusing on unlocking the full potential and value of its
existing world-class gas processing infrastructure.
STRATEGY
Strategic pillars
Developing upstream potential Pursuing new gas processing
opportunities
We remain confident in our long-term growth
strategy, while broadening our opportunities
with investments in future growth and
continuous improvement of our portfolio
in the industry.
We have developed multiple strategies to
commercialise the spare capacity in our world-
class gas processing facilities. Well-positioned
to become a major gas processor in the region.
2025 priorities
• Complete drilling programme at Chinarevskoye field.
• Continue maintenance and workovers programme at
Chinarevskoye field.
• Start of the Stepnoy Leopard fields development.
• Advance ongoing discussions with third parties interested in
supplying raw gas to take advantage of the Group’s gas
processing capacity.
• Continue processing of Ural O&G volumes. Ural O&G to
install a fiscal metering unit during 2025.
KPIs
• Complete drilling of wells Ch-116_1 and Ch-725_1 on time
and budget.
• Maximise uptime of existing wells and production facilities.
• Operational readiness for increased raw-gas supplies from
Ural O&G.
• Conclude commercial processing contracts.
Risks
• Significant subsurface uncertainties and risks could negatively
impact drilling and appraisal campaigns.
• Impact of equipment failure.
• At low production levels, unexpected sub-surface events
could severely impact the Group’s operating cash flow.
• Ural O&G project execution delays with installation of fiscal
metering.
• Ongoing negotiations with various counter-parties are
complex and commercially sensitive, and there can be no
certainty that agreement will be reached.
Forecasts, objectives and prospects for 2025-2026
• Successful and timely completion of drilling programme at
Chinarevskoye field.
• Start of the Stepnoy Leopard fields development.
• Reduce decline rates in existing production wells.
• Installation of fiscal metering by Ural O&G.
• Execute binding commercial contracts to fill the Group’s spare
gas processing capacity with third-party volumes.
12 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
The Company is now capitalising on growth catalysts,
focusing on unlocking the full potential and value of its
existing world-class gas processing infrastructure.
STRATEGY
Strategic pillars
Developing upstream potential Pursuing new gas processing
opportunities
We remain confident in our long-term growth
strategy, while broadening our opportunities
with investments in future growth and
continuous improvement of our portfolio
in the industry.
We have developed multiple strategies to
commercialise the spare capacity in our world-
class gas processing facilities. Well-positioned
to become a major gas processor in the region.
2025 priorities
• Complete drilling programme at Chinarevskoye field.
• Continue maintenance and workovers programme at
Chinarevskoye field.
• Start of the Stepnoy Leopard fields development.
• Advance ongoing discussions with third parties interested in
supplying raw gas to take advantage of the Group’s gas
processing capacity.
• Continue processing of Ural O&G volumes. Ural O&G to
install a fiscal metering unit during 2025.
KPIs
• Complete drilling of wells Ch-116_1 and Ch-725_1 on time
and budget.
• Maximise uptime of existing wells and production facilities.
• Operational readiness for increased raw-gas supplies from
Ural O&G.
• Conclude commercial processing contracts.
Risks
• Significant subsurface uncertainties and risks could negatively
impact drilling and appraisal campaigns.
• Impact of equipment failure.
• At low production levels, unexpected sub-surface events
could severely impact the Group’s operating cash flow.
• Ural O&G project execution delays with installation of fiscal
metering.
• Ongoing negotiations with various counter-parties are
complex and commercially sensitive, and there can be no
certainty that agreement will be reached.
Forecasts, objectives and prospects for 2025-2026
• Successful and timely completion of drilling programme at
Chinarevskoye field.
• Start of the Stepnoy Leopard fields development.
• Reduce decline rates in existing production wells.
• Installation of fiscal metering by Ural O&G.
• Execute binding commercial contracts to fill the Group’s spare
gas processing capacity with third-party volumes.
12 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Managing our capital allocation
Focusing on ESG performance
We are building a cost-conscious culture to
support our growth ambitions, striving to
improve our balance sheet, and focusing on
cash flow growth through disciplined capital
and cost management.
Strong ESG performance focus: contributing to
the transition to cleaner energy. Strengthening
of corporate governance with new, highly
experienced Board of Directors.
• Continue to challenge costs whilst pivoting towards growth
and transitioning into a multi-asset energy company.
• Evaluate all sales routes for sustainability and profitability.
• Assessment of the opportunities and their ranking for most
efficient allocation of capital to maximise stakeholder returns.
• Safe operations and care for the environment.
• Fulfilling social responsibility.
• Transparency with all stakeholders by enhancing
ESG Reporting.
• Board actively involved in the transformation/transition.
See KPIs section on pages 22-23
• Control Opex and G&A.
• Balance sales mix and maximise netbacks.
• Total recordable injury frequency.
• Lost time injury frequency.
• Road traffic incidents.
• Greenhouse gas emissions.
• Focus on improvements across ESG and ultimate
upgrade in rating.
• To further improve overall ESG risk rating.
See Risk Management section on pages 34-35
• Challenges in attracting additional capital for execution of
prospective opportunities.
• Sustained higher commodity prices can lead to cost inflation
in Kazakhstan.
• Further spend on Chinarevskoye reservoir development will
likely be needed to satisfy regulatory and licence-to-operate
requirements.
• Legal framework for environmental protection and
operational safety still being developed in Kazakhstan.
• Manage “operational” liquidity and cash reserves to ensure
continuity of operations whilst unlocking the future growth
opportunities.
• Execution of the ESG plan.
• Achieve objectives set in the HSE plan (HSE Leadership,
Incident management, Personal Safety, Contractor
management, Process safety/Asset integrity).
Our purpose
To unlock the value of our full
potential for all our shareholders
through securing our business by
working as a fully integrated team
across all disciplines.
Our values
We are trustworthy and reliable,
take our corporate, social
and ecological responsibilities
seriously, and are dedicated to
the health, safety and wellbeing
of our employees.
Our vision
To profitably and materially
contribute to the total marketable
commercial gas supply in
Kazakhstan whilst strengthening
a cleaner energy mix.
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 13 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
We are building a cost-conscious culture to
support our growth ambitions, striving to
improve our balance sheet, and focusing on
cash flow growth through disciplined capital
and cost management.
Strong ESG performance focus: contributing to
the transition to cleaner energy. Strengthening
of corporate governance with new, highly
experienced Board of Directors.
• Continue to challenge costs whilst pivoting towards growth
and transitioning into a multi-asset energy company.
• Evaluate all sales routes for sustainability and profitability.
• Assessment of the opportunities and their ranking for most
efficient allocation of capital to maximise stakeholder returns.
• Safe operations and care for the environment.
• Fulfilling social responsibility.
• Transparency with all stakeholders by enhancing
ESG Reporting.
• Board actively involved in the transformation/transition.
See KPIs section on pages 22-23
• Control Opex and G&A.
• Balance sales mix and maximise netbacks.
• Total recordable injury frequency.
• Lost time injury frequency.
• Road traffic incidents.
• Greenhouse gas emissions.
• Focus on improvements across ESG and ultimate
upgrade in rating.
• To further improve overall ESG risk rating.
See Risk Management section on pages 34-35
• Challenges in attracting additional capital for execution of
prospective opportunities.
• Sustained higher commodity prices can lead to cost inflation
in Kazakhstan.
• Further spend on Chinarevskoye reservoir development will
likely be needed to satisfy regulatory and licence-to-operate
requirements.
• Legal framework for environmental protection and
operational safety still being developed in Kazakhstan.
• Manage “operational” liquidity and cash reserves to ensure
continuity of operations whilst unlocking the future growth
opportunities.
• Execution of the ESG plan.
• Achieve objectives set in the HSE plan (HSE Leadership,
Incident management, Personal Safety, Contractor
management, Process safety/Asset integrity).
Our purpose
To unlock the value of our full
potential for all our shareholders
through securing our business by
working as a fully integrated team
across all disciplines.
Our values
We are trustworthy and reliable,
take our corporate, social
and ecological responsibilities
seriously, and are dedicated to
the health, safety and wellbeing
of our employees.
Our vision
To profitably and materially
contribute to the total marketable
commercial gas supply in
Kazakhstan whilst strengthening
a cleaner energy mix.
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 13 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
STRATEGY IN ACTION
Ural Oil and Gas
Nostrum Oil & Gas successfully completed its first
year of processing third-party volumes from Ural
O&G, nearly doubling total throughput year-on-year.
In March 2025, the Group signed a new agreement
to extend the partnership through May 2031.
August 2018
Commercial
agreements
signed
Nostrum enters into binding
agreements with Ural O&G for
condensate tolling and purchase
of raw gas.
See more details on pages 26-27
December 2023
0.3 mcm/day
of raw gas marked the initial
production rate when Ural O&G’s first
well tied-back in December 2023.
See more details on pages 26-27
2024
0.3 bcm
of raw gas from Ural O&G 1
See more details on pages 24-25
1. Source: https://www.kmg.kz/ru/press-center/press-releases/mols/
2. As per announcement by MOL Group in December 2023.
14 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Ural Oil and Gas
Nostrum Oil & Gas successfully completed its first
year of processing third-party volumes from Ural
O&G, nearly doubling total throughput year-on-year.
In March 2025, the Group signed a new agreement
to extend the partnership through May 2031.
August 2018
Commercial
agreements
signed
Nostrum enters into binding
agreements with Ural O&G for
condensate tolling and purchase
of raw gas.
See more details on pages 26-27
December 2023
0.3 mcm/day
of raw gas marked the initial
production rate when Ural O&G’s first
well tied-back in December 2023.
See more details on pages 26-27
2024
0.3 bcm
of raw gas from Ural O&G 1
See more details on pages 24-25
1. Source: https://www.kmg.kz/ru/press-center/press-releases/mols/
2. As per announcement by MOL Group in December 2023.
14 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
March 2025
Processing
Agreement
extension
to 2031
In March 2025 the agreement for the
processing hydrocarbons from Ural
O&G was extended on new terms
until May 2031.
See more details on pages 26-27
2025
0.53 bcm
of raw gas is expected from
Ural O&G 1
.
158.8
mmboe
expected recoverable volumes
from the Rozhkovskoye field,
including 101.5 mmboe of gas and
57.3 mmboe of condensate (based
on the Kazakhstan State Balance
Reserves Report) 2 .
3M 2023
10.5
6M 2023
10.0
9M 2023 FY 2024 9M 2024 6M 2024 3M 2024
10.3
FY 2023
10.2
13.8
11.9 12.2
14.9
Chinarevskoye Third-party feedstock
Average titled production volumes
kboepd
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 15 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
Processing
Agreement
extension
to 2031
In March 2025 the agreement for the
processing hydrocarbons from Ural
O&G was extended on new terms
until May 2031.
See more details on pages 26-27
2025
0.53 bcm
of raw gas is expected from
Ural O&G 1
.
158.8
mmboe
expected recoverable volumes
from the Rozhkovskoye field,
including 101.5 mmboe of gas and
57.3 mmboe of condensate (based
on the Kazakhstan State Balance
Reserves Report) 2 .
3M 2023
10.5
6M 2023
10.0
9M 2023 FY 2024 9M 2024 6M 2024 3M 2024
10.3
FY 2023
10.2
13.8
11.9 12.2
14.9
Chinarevskoye Third-party feedstock
Average titled production volumes
kboepd
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 15 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
STRATEGY IN ACTION
Stepnoy Leopard fields
In 2024, Nostrum Oil & Gas made significant progress
on the Stepnoy Leopard fields, with a successful
two-well appraisal programme confirming their
commercial potential, followed by a CPR that
increased the Group’s reserves fivefold. A tie-back
project of this scale will significantly boost utilisation
of Nostrum’s 4.2 bcma processing facilities.
July 2023
US$20m
80%
interest in Stepnoy Leopard
fields acquired
See more details on pages 30-31
Sep 2023 – Mar 2024
US$8m
2 well
appraisal
successfully completed at
Stepnoy Leopard fields
See more details on pages 26-27
March 2024
FID
Final investment decision approved
by Nostrum Board
See more details on pages 26-27
16 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Stepnoy Leopard fields
In 2024, Nostrum Oil & Gas made significant progress
on the Stepnoy Leopard fields, with a successful
two-well appraisal programme confirming their
commercial potential, followed by a CPR that
increased the Group’s reserves fivefold. A tie-back
project of this scale will significantly boost utilisation
of Nostrum’s 4.2 bcma processing facilities.
July 2023
US$20m
80%
interest in Stepnoy Leopard
fields acquired
See more details on pages 30-31
Sep 2023 – Mar 2024
US$8m
2 well
appraisal
successfully completed at
Stepnoy Leopard fields
See more details on pages 26-27
March 2024
FID
Final investment decision approved
by Nostrum Board
See more details on pages 26-27
16 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
July 2024
138 mmboe
CPR 2P
reserves
gross
110 mmboe – 80% Nostrum
working interest
See more details on pages 30-31
April 2025
FDP
Field Development Plan approved
by the Ministry of Energy of the RoK
See more details on pages 26-27
late 2026 / early 2027
First gas
expected from SL fields
Gross Working interest (80%)
Unit
Proved
(1P)
Proved &
Probable
(2P)
Proved,
Probable
& Possible
(3P)
Proved
(1P)
Proved &
Probable
(2P)
Proved,
Probable
& Possible
(3P)
Condensate
& Oil
mm
barrels 16.96 26.62 34.27 13.58 21.30 27.42
LPG ktonnes 414.47 629.93 790.66 331.58 503.94 632.53
Sales Gas bcf 408.54 620.93 779.36 326.83 496.74 623.49
Total Gross 1 mmboe 90 138 174 72 110 139
1. Total Gross includes Condensate & Oil (barrels),LPG (boe) and Sales Gas (boe).
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 17 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
138 mmboe
CPR 2P
reserves
gross
110 mmboe – 80% Nostrum
working interest
See more details on pages 30-31
April 2025
FDP
Field Development Plan approved
by the Ministry of Energy of the RoK
See more details on pages 26-27
late 2026 / early 2027
First gas
expected from SL fields
Gross Working interest (80%)
Unit
Proved
(1P)
Proved &
Probable
(2P)
Proved,
Probable
& Possible
(3P)
Proved
(1P)
Proved &
Probable
(2P)
Proved,
Probable
& Possible
(3P)
Condensate
& Oil
mm
barrels 16.96 26.62 34.27 13.58 21.30 27.42
LPG ktonnes 414.47 629.93 790.66 331.58 503.94 632.53
Sales Gas bcf 408.54 620.93 779.36 326.83 496.74 623.49
Total Gross 1 mmboe 90 138 174 72 110 139
1. Total Gross includes Condensate & Oil (barrels),LPG (boe) and Sales Gas (boe).
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 17 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
STRATEGY IN ACTION
Safeguarding our
assets and operations
In 2024, Nostrum maintained a strong focus on safe and efficient operations while
advancing key drilling and production activities. The Chinarevskoye drilling programme
progressed as planned, leveraging existing wellbores to optimise costs and minimise
risks. Through disciplined execution and operational excellence, we continued to
enhance production efficiency while maintaining the highest safety standards.
2
well drilling programme
US$22m
Completed on time and within
budget. Well No. 301 producing
since May 2024. Well No.41
provided insights to enhance
future well planning.
See more details on page 27
GTU-3
successful operation
throughout 2024 with
additional 26% LPG yield
98%
uptime of the gas processing
facilities during 2024
18 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Safeguarding our
assets and operations
In 2024, Nostrum maintained a strong focus on safe and efficient operations while
advancing key drilling and production activities. The Chinarevskoye drilling programme
progressed as planned, leveraging existing wellbores to optimise costs and minimise
risks. Through disciplined execution and operational excellence, we continued to
enhance production efficiency while maintaining the highest safety standards.
2
well drilling programme
US$22m
Completed on time and within
budget. Well No. 301 producing
since May 2024. Well No.41
provided insights to enhance
future well planning.
See more details on page 27
GTU-3
successful operation
throughout 2024 with
additional 26% LPG yield
98%
uptime of the gas processing
facilities during 2024
18 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Safety metrics
Zero
fatalities among employees and contractors
during operations in 2024.
(2023: One fatality)
0.63
TRIR (per million man-hours).
(2023: 0.75)
Zero
Lost Time Injury Rate in 2024
(incidents per million man-hours).
(2023: 0.37)
7,435
days of training were received
by employees
(2023: 5,702 days)
31.0
ESG risk rating by Sustainalytics based
on the 2024 annual review.
(2023: 30.1)
0.5
Road Traffic incidents in 2024
(incidents per million man-hours).
(2023: Zero)
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 19 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
Zero
fatalities among employees and contractors
during operations in 2024.
(2023: One fatality)
0.63
TRIR (per million man-hours).
(2023: 0.75)
Zero
Lost Time Injury Rate in 2024
(incidents per million man-hours).
(2023: 0.37)
7,435
days of training were received
by employees
(2023: 5,702 days)
31.0
ESG risk rating by Sustainalytics based
on the 2024 annual review.
(2023: 30.1)
0.5
Road Traffic incidents in 2024
(incidents per million man-hours).
(2023: Zero)
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 19 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
Understanding our stakeholders
STAKEHOLDER ENGAGEMENT
Regular interaction is
an essential part of our
strategy, ensuring
alignment toward common
objectives that contribute to
long-term business success.
We address stakeholder
interests, priorities
and concerns.
Section 172(1) statement
The Directors are fully aware of their
responsibilities to promote the success of
the Company in accordance with section
172 of the Companies Act and to have
regard for the interests of the Company’s
employees and other stakeholders,
including the impact of the Company’s
activities on the community and the
environment, when making decisions at
Board level. The Directors, acting in good
faith, consider what is most likely to
promote the success of the Company for
the benefit of its members as a whole,
and in doing so balance the sometimes
competing interests of various stakeholders
including investors, employees, customers,
suppliers and the communities in which the
Company operates.
Read more about our governance
on pages 88-129
Read more about delivering our
responsible business practices
on pages 52-86
GRI 2-29,
203-2
Key stakeholders
Our people
As of 31 December 2024, The Group employed a
total of 605 personnel, with the majority based
in Kazakhstan, where 91% of our workforce
comprises Kazakhstan nationals.
Investors
Shareholders and bondholders have provided
some of the financing required for drilling and the
construction of the Group’s infrastructure.
Local communities
Nostrum operates alongside local communities in
Kazakhstan and is committed to fostering strong
community engagement while supporting
sustainable long-term development in the regions
surrounding our operations.
Suppliers and contractors
We are dedicated to fostering long-term,
sustainable partnerships with our suppliers,
contractors, and customers.
Governments and regulators
Governments and regulators establish the
framework within which we conduct our business.
Policy, regulatory, legislative, and personnel
changes can significantly impact the Group’s
operations.
20 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
STAKEHOLDER ENGAGEMENT
Regular interaction is
an essential part of our
strategy, ensuring
alignment toward common
objectives that contribute to
long-term business success.
We address stakeholder
interests, priorities
and concerns.
Section 172(1) statement
The Directors are fully aware of their
responsibilities to promote the success of
the Company in accordance with section
172 of the Companies Act and to have
regard for the interests of the Company’s
employees and other stakeholders,
including the impact of the Company’s
activities on the community and the
environment, when making decisions at
Board level. The Directors, acting in good
faith, consider what is most likely to
promote the success of the Company for
the benefit of its members as a whole,
and in doing so balance the sometimes
competing interests of various stakeholders
including investors, employees, customers,
suppliers and the communities in which the
Company operates.
Read more about our governance
on pages 88-129
Read more about delivering our
responsible business practices
on pages 52-86
GRI 2-29,
203-2
Key stakeholders
Our people
As of 31 December 2024, The Group employed a
total of 605 personnel, with the majority based
in Kazakhstan, where 91% of our workforce
comprises Kazakhstan nationals.
Investors
Shareholders and bondholders have provided
some of the financing required for drilling and the
construction of the Group’s infrastructure.
Local communities
Nostrum operates alongside local communities in
Kazakhstan and is committed to fostering strong
community engagement while supporting
sustainable long-term development in the regions
surrounding our operations.
Suppliers and contractors
We are dedicated to fostering long-term,
sustainable partnerships with our suppliers,
contractors, and customers.
Governments and regulators
Governments and regulators establish the
framework within which we conduct our business.
Policy, regulatory, legislative, and personnel
changes can significantly impact the Group’s
operations.
20 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Why we engage
How we engage, key developments and decisions
• Ensuring the physical and mental
well being of our employees is vital
to maintaining the safe and
efficient operations of our Group.
• Strengthening engagement between
management and the workforce through
enhanced collaboration, including regular
town hall meetings and cooperative
discussions.
• Annual wage indexation to help alleviate
effects of inflation including indexation
with effect from 1 January 2024.
• Maximising stakeholder value,
while fulfilling our financial
commitments and adhering to
bond covenants remains a top
priority for Nostrum. Active
engagement with our stakeholders,
including minority shareholders, is
essential to ensuring transparency
and alignment with our strategy to
monetise our infrastructure. To
successfully execute these plans,
additional capital investment may
be required.
• In February 2023 Nostrum completed the
implementation of the restructuring after
obtaining all required licences and
approvals. As a result, US$1.125bn of
existing notes have been replaced with
US$250m Senior Secured and US$345m
Senior Unsecured notes due in 2026. The
remaining portion of existing notes were
converted into the Company’s equity and
the existing ordinary shareholders were
diluted to 11.11%, subject to further dilution
if the warrants held by existing note-
holders are exercised.
• Regular update and disclosure around
results including conference calls and press
releases as and when required.
• Nostrum directors and management meet
with shareholders and other investors
regularly during the year to exchange
views and share insights.
• Financial reports and extensive other
shareholder information are available
on our website.
• Our Annual General Meeting provides an
opportunity for all shareholders, including
minority shareholders, to ask questions of
the Board.
• To foster a strong and sustainable
relationship with the communities
in which Nostrum operates, we
strive to understand their priorities
and identify meaningful ways to
contribute to their well-being and
development.
• Throughout 2024, the Company
maintained active engagement with the
local community demonstrating its
commitment through sponsorships and
charitable contributions to various public
organisations and local initiatives. The
Company’s support in 2024 was reflected
in the following efforts:
• Nostrum responded to severe flooding in
West Kazakhstan by supporting displaced
residents and building 20 houses across
three villages.
• Providing funds for repair and
improvement of facilities of general
educational schools of the region and
pre-school institutions, purchase of school
articles for children from large and
low-income families.
• Providing financial assistance to young
athletes and winners of various intellectual
Olympiads to participate in international
competitions and contests.
• Financial support of medical treatment
outside the Republic of Kazakhstan.
• Financial support of labor veterans and
improvement of cultural institutions
facilities in villages.
• Providing support on an as-needed basis
to the region we operate in, such as
preventing natural disasters during severe
weather conditions (blizzards, snowfalls,
floods) by providing special machinery and
equipment.
• We expect our suppliers to uphold
stringent safety, legal and ethical
standards.
• As a key contributor to the local
and national economy, we remain
committed to engaging local
suppliers to support our
operational requirements.
• Where commercially beneficial, contracts
were extended to maintain strong
relationships while further enhancing HSE
and operational standards.
• In certain cases, contract scopes were split
to preserve relationships with the service
providers, particularly in relation to new
construction projects.
• Several of the Board’s decisions
necessitate thorough evaluation
of governmental and/or
considerations.
• We make significant contributions
through taxes and social payments.
• Formal and informal discussions are held
on a regular basis with local and national
government, regulatory and tax officials
and ministers across a variety of levels
within Nostrum. This proactive approach
allows us to stay informed about potential
legislative changes and evolving regulatory
interpretations, ensuring timely and
effective responses.
• With the successful restructuring behind
us, Nostrum is now strategically positioned
to accelerate the full utilisation of its
world-class gas processing infrastructure.
Our focus remains on delivering value for
investors and other stakeholders while
enhancing the region’s energy security.
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 21 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
• Ensuring the physical and mental
well being of our employees is vital
to maintaining the safe and
efficient operations of our Group.
• Strengthening engagement between
management and the workforce through
enhanced collaboration, including regular
town hall meetings and cooperative
discussions.
• Annual wage indexation to help alleviate
effects of inflation including indexation
with effect from 1 January 2024.
• Maximising stakeholder value,
while fulfilling our financial
commitments and adhering to
bond covenants remains a top
priority for Nostrum. Active
engagement with our stakeholders,
including minority shareholders, is
essential to ensuring transparency
and alignment with our strategy to
monetise our infrastructure. To
successfully execute these plans,
additional capital investment may
be required.
• In February 2023 Nostrum completed the
implementation of the restructuring after
obtaining all required licences and
approvals. As a result, US$1.125bn of
existing notes have been replaced with
US$250m Senior Secured and US$345m
Senior Unsecured notes due in 2026. The
remaining portion of existing notes were
converted into the Company’s equity and
the existing ordinary shareholders were
diluted to 11.11%, subject to further dilution
if the warrants held by existing note-
holders are exercised.
• Regular update and disclosure around
results including conference calls and press
releases as and when required.
• Nostrum directors and management meet
with shareholders and other investors
regularly during the year to exchange
views and share insights.
• Financial reports and extensive other
shareholder information are available
on our website.
• Our Annual General Meeting provides an
opportunity for all shareholders, including
minority shareholders, to ask questions of
the Board.
• To foster a strong and sustainable
relationship with the communities
in which Nostrum operates, we
strive to understand their priorities
and identify meaningful ways to
contribute to their well-being and
development.
• Throughout 2024, the Company
maintained active engagement with the
local community demonstrating its
commitment through sponsorships and
charitable contributions to various public
organisations and local initiatives. The
Company’s support in 2024 was reflected
in the following efforts:
• Nostrum responded to severe flooding in
West Kazakhstan by supporting displaced
residents and building 20 houses across
three villages.
• Providing funds for repair and
improvement of facilities of general
educational schools of the region and
pre-school institutions, purchase of school
articles for children from large and
low-income families.
• Providing financial assistance to young
athletes and winners of various intellectual
Olympiads to participate in international
competitions and contests.
• Financial support of medical treatment
outside the Republic of Kazakhstan.
• Financial support of labor veterans and
improvement of cultural institutions
facilities in villages.
• Providing support on an as-needed basis
to the region we operate in, such as
preventing natural disasters during severe
weather conditions (blizzards, snowfalls,
floods) by providing special machinery and
equipment.
• We expect our suppliers to uphold
stringent safety, legal and ethical
standards.
• As a key contributor to the local
and national economy, we remain
committed to engaging local
suppliers to support our
operational requirements.
• Where commercially beneficial, contracts
were extended to maintain strong
relationships while further enhancing HSE
and operational standards.
• In certain cases, contract scopes were split
to preserve relationships with the service
providers, particularly in relation to new
construction projects.
• Several of the Board’s decisions
necessitate thorough evaluation
of governmental and/or
considerations.
• We make significant contributions
through taxes and social payments.
• Formal and informal discussions are held
on a regular basis with local and national
government, regulatory and tax officials
and ministers across a variety of levels
within Nostrum. This proactive approach
allows us to stay informed about potential
legislative changes and evolving regulatory
interpretations, ensuring timely and
effective responses.
• With the successful restructuring behind
us, Nostrum is now strategically positioned
to accelerate the full utilisation of its
world-class gas processing infrastructure.
Our focus remains on delivering value for
investors and other stakeholders while
enhancing the region’s energy security.
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 21 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
KEY PERFORMANCE INDICATORS
Economies of scale, cash
discipline and safe operations
Our key performance
indicators provide a
balanced set of metrics that
measure both financial and
non-financial performance.
These assist the Board in
evaluating our Company’s
overall performance.
Financial KPIs
In 2024 the Group reinforced its cash
discipline to maintain liquidity. Also
substantial economies of scale were
achieved due to increased throughput
volumes while the management
continued to optimise the Opex
and G&A expenses.
Cash and cash equivalents decreased in
2024 mainly due to investment activities,
including the purchase of PPE, significant
drilling expenditures, and exploration
activities at the Stepnoy Leopard fields.
The Opex decline was mainly due to lower
depreciation from shifting certain gas
processing assets to the straight-line
method. This was partly offset by higher
material, supply, and maintenance costs
from increased operations. G&A
expenses fell due to partial resource
reallocation to the Stepnoy Leopard
project where the Group owns less
than 100%.
Selling and transportation costs
decreased on a per barrel basis due
to higher sales volumes.
Cash at the year end
(US$m)
150.4
G&A costs 1
(US$/boe)
1.9
Operating costs 1
(US$/boe)
5.8
Selling and transportation costs
(US$/boe)
3.1
2024 150.4
2023 161.7
2022 233.6
2021 165.2
2020 78.6
2024 1.9
2023 3.7
2022 2.5
2021 1.9
2020 1.7
2024 5.8
2023 9.8
2022 6.5
2021 5.1
2020 3.9
2024 3.1
2023 3.8
2022 4.4
2021 3.8
2020 3.6
1. Opex and G&A costs per boe of processed volumes.
Opex excluding DD&A, inventory adjustment and cost of raw gas purchased. G&A costs excluding DD&A.
22 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Economies of scale, cash
discipline and safe operations
Our key performance
indicators provide a
balanced set of metrics that
measure both financial and
non-financial performance.
These assist the Board in
evaluating our Company’s
overall performance.
Financial KPIs
In 2024 the Group reinforced its cash
discipline to maintain liquidity. Also
substantial economies of scale were
achieved due to increased throughput
volumes while the management
continued to optimise the Opex
and G&A expenses.
Cash and cash equivalents decreased in
2024 mainly due to investment activities,
including the purchase of PPE, significant
drilling expenditures, and exploration
activities at the Stepnoy Leopard fields.
The Opex decline was mainly due to lower
depreciation from shifting certain gas
processing assets to the straight-line
method. This was partly offset by higher
material, supply, and maintenance costs
from increased operations. G&A
expenses fell due to partial resource
reallocation to the Stepnoy Leopard
project where the Group owns less
than 100%.
Selling and transportation costs
decreased on a per barrel basis due
to higher sales volumes.
Cash at the year end
(US$m)
150.4
G&A costs 1
(US$/boe)
1.9
Operating costs 1
(US$/boe)
5.8
Selling and transportation costs
(US$/boe)
3.1
2024 150.4
2023 161.7
2022 233.6
2021 165.2
2020 78.6
2024 1.9
2023 3.7
2022 2.5
2021 1.9
2020 1.7
2024 5.8
2023 9.8
2022 6.5
2021 5.1
2020 3.9
2024 3.1
2023 3.8
2022 4.4
2021 3.8
2020 3.6
1. Opex and G&A costs per boe of processed volumes.
Opex excluding DD&A, inventory adjustment and cost of raw gas purchased. G&A costs excluding DD&A.
22 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Non-financial KPIs
Performing responsibly and safely is
integral to our strategy and to the
sustainability of our business. We believe
that long- term value comes from seeing
success as a part of a bigger picture,
encompassing people and the
environment. We have set ourselves
specific non- financial KPIs to track our
progress, as we believe this to be the best
way to monitor our achievements in
relation to environmental, social and
governance matters.
In 2024, Nostrum ESG KPI targets were:
• Not to exceed GHG emissions target set
by the National GHG allocation
plan (203,562 tons of CO2).
• HSE KPIs: Achievement of the approved
2024 HSE Plan (provided that there
have been no fatalities, in the case of a
fatality 10% additional will be deducted
from the overall weighting).
Sales volumes
(boepd)
13,038
Lost time injury incidents (LTIs)
(frequency 2
)
Zero
Road traffic incidents (RTI)
(frequency 1
)
0.5
Total greenhouse gas emissions 2
(tCO 2 e)
256
Total recordable incidents (TRIs)
(rate 2
)
0.63
2024
2023
2022
2021
2020
13,038
8,874
12,524
15,330
21,514
2024
2023
2022
2021
2020
0
0.37
0
0.81
0.84
2024
2023
2022
2021
2020
256
180
170
187
188
2024
2023
2022
2021
2020
0.50
0
0
1.46
0.72
2024
2023
2022
2021
2020
0.63
0.75
1.56
2.42
3.80
2. 2024: Surplus of GHG emissions as a result of Ural O&G processing (2023: GTU 3 re-start).
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 23 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
Performing responsibly and safely is
integral to our strategy and to the
sustainability of our business. We believe
that long- term value comes from seeing
success as a part of a bigger picture,
encompassing people and the
environment. We have set ourselves
specific non- financial KPIs to track our
progress, as we believe this to be the best
way to monitor our achievements in
relation to environmental, social and
governance matters.
In 2024, Nostrum ESG KPI targets were:
• Not to exceed GHG emissions target set
by the National GHG allocation
plan (203,562 tons of CO2).
• HSE KPIs: Achievement of the approved
2024 HSE Plan (provided that there
have been no fatalities, in the case of a
fatality 10% additional will be deducted
from the overall weighting).
Sales volumes
(boepd)
13,038
Lost time injury incidents (LTIs)
(frequency 2
)
Zero
Road traffic incidents (RTI)
(frequency 1
)
0.5
Total greenhouse gas emissions 2
(tCO 2 e)
256
Total recordable incidents (TRIs)
(rate 2
)
0.63
2024
2023
2022
2021
2020
13,038
8,874
12,524
15,330
21,514
2024
2023
2022
2021
2020
0
0.37
0
0.81
0.84
2024
2023
2022
2021
2020
256
180
170
187
188
2024
2023
2022
2021
2020
0.50
0
0
1.46
0.72
2024
2023
2022
2021
2020
0.63
0.75
1.56
2.42
3.80
2. 2024: Surplus of GHG emissions as a result of Ural O&G processing (2023: GTU 3 re-start).
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 23 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
Our products
OPERATIONAL REVIEW GRI 2-6
Crude oil Stabilised condensate
Quality
• Density – 0.834g/cm3
• API – 38.2 degrees
• Average sulphur – 0.55%
• Density – 0.785g/cm3
• API – 53.5 degrees
• Average sulphur – <0.12%
Sales
• The PSA requires 15% to be sold domestically with
remaining available for export
• In 2024, 25.2% was sold domestically and the
remaining volumes exported, which is in line with
the expectations based on practice over the past
few years
• 100% exported
• Destinations include the Kazakhstan port of Aktau
with further shipment to Baku and BTC pipeline to
Mediterranean
Pricing
• Brent and Urals based pricing for pipeline exports
• Domestic sales at over 50% discount
• Prices negotiated directly with the purchaser
• Brent based pricing, negotiated directly with
the purchaser
Transportation
• During 2024, all exported crude oil volumes were
sold through the KazTransOil (KTO) pipeline
• Crude exports are delivered to the KTO pipeline
through an extension to our own 120 km pipeline
from the field site. From here the crude is
delivered via trunk pipelines
• Sent through our own 120 km pipeline from the
field site to our own rail loading terminal in Uralsk
• From here it is loaded onto railcars and sent to
Aktau by rail for further transshipment
Crude Oil and stabilised condensate production (boepd) and product split (%)
2024
2023
2022
2021
2020
4,433
4,630
5,696
6,877
8,476
30%
46%
43%
40%
38%
24 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
OPERATIONAL REVIEW GRI 2-6
Crude oil Stabilised condensate
Quality
• Density – 0.834g/cm3
• API – 38.2 degrees
• Average sulphur – 0.55%
• Density – 0.785g/cm3
• API – 53.5 degrees
• Average sulphur – <0.12%
Sales
• The PSA requires 15% to be sold domestically with
remaining available for export
• In 2024, 25.2% was sold domestically and the
remaining volumes exported, which is in line with
the expectations based on practice over the past
few years
• 100% exported
• Destinations include the Kazakhstan port of Aktau
with further shipment to Baku and BTC pipeline to
Mediterranean
Pricing
• Brent and Urals based pricing for pipeline exports
• Domestic sales at over 50% discount
• Prices negotiated directly with the purchaser
• Brent based pricing, negotiated directly with
the purchaser
Transportation
• During 2024, all exported crude oil volumes were
sold through the KazTransOil (KTO) pipeline
• Crude exports are delivered to the KTO pipeline
through an extension to our own 120 km pipeline
from the field site. From here the crude is
delivered via trunk pipelines
• Sent through our own 120 km pipeline from the
field site to our own rail loading terminal in Uralsk
• From here it is loaded onto railcars and sent to
Aktau by rail for further transshipment
Crude Oil and stabilised condensate production (boepd) and product split (%)
2024
2023
2022
2021
2020
4,433
4,630
5,696
6,877
8,476
30%
46%
43%
40%
38%
24 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Nostrum’s production portfolio comprises crude oil, stabilised condensate,
LPG, and dry gas. In addition, starting from December 2023 the Group
launched processing of third-party hydrocarbons. Further details about
our products are provided in the table below. 1
LPG Dry gas
• Field-grade quality
• No olefins
• 100% exported
• Destinations include Poland, Latvia, Uzbekistan
and Tajikistan
• 100% sold to NC QazaqGaz
• Argus quotations for specified destinations
(Poland, Tajikistan, Uzbekistan and Latvia)
• Brent based price formula agreed until the end
of 2024
• Loaded onto LPG trucks at the field site and
trucked to the third-party rail loading terminal
located in Zhelaevo
• From here, the LPG is loaded onto railcars and
sold to third parties
• Sent through our own 17km pipeline from the field
site to the connection point with the Intergas
Central Asia gas pipeline
• Sold at the connection point
LPG production (boepd) and product split (%)
2024
2023
2022
2021
2020
2,537
1,287
1,650
2,065
2,795
17%
13%
13%
12%
13%
Chinarevskoye Third-party processing
Dry gas production (boepd) and product split (%)
2024
2023
2022
2021
2020
7,965
4,174
5,854
8,090
11,065
53%
41%
44%
48%
50%
Chinarevskoye Third-party processing
1. The details refer to Chinarevskoye products.
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 25 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
LPG, and dry gas. In addition, starting from December 2023 the Group
launched processing of third-party hydrocarbons. Further details about
our products are provided in the table below. 1
LPG Dry gas
• Field-grade quality
• No olefins
• 100% exported
• Destinations include Poland, Latvia, Uzbekistan
and Tajikistan
• 100% sold to NC QazaqGaz
• Argus quotations for specified destinations
(Poland, Tajikistan, Uzbekistan and Latvia)
• Brent based price formula agreed until the end
of 2024
• Loaded onto LPG trucks at the field site and
trucked to the third-party rail loading terminal
located in Zhelaevo
• From here, the LPG is loaded onto railcars and
sold to third parties
• Sent through our own 17km pipeline from the field
site to the connection point with the Intergas
Central Asia gas pipeline
• Sold at the connection point
LPG production (boepd) and product split (%)
2024
2023
2022
2021
2020
2,537
1,287
1,650
2,065
2,795
17%
13%
13%
12%
13%
Chinarevskoye Third-party processing
Dry gas production (boepd) and product split (%)
2024
2023
2022
2021
2020
7,965
4,174
5,854
8,090
11,065
53%
41%
44%
48%
50%
Chinarevskoye Third-party processing
1. The details refer to Chinarevskoye products.
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 25 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
OPERATIONAL REVIEW
2024 developments
In 2024 Nostrum almost doubled its total processed
volumes year-on-year, thanks to the operational
excellence in handling and processing of raw gas
from Ural O&G, new production from well No.301,
and further enhancements to our facilities.
Production in 2024
In 2024 Nostrum’s average daily titled
production volumes (i.e. final products
owned by Nostrum) increased by 48% to
14,935 boepd (10,091 boepd in 2023).
Total processed volumes increased by 94%
(including third party condensate tolling
volumes) In 2024, compared to 2023.
These increases in production and
processed volumes were mainly due to:
• Processing of raw gas received
from Ural O&G, commencing from
December 2023;
• Production from well No.301 which was
completed and put into production in
May 2024;
• Full year contribution from: Gas-lift
system expansion, which was successfully
launched in July 2023 doubling its
capacity and continued to perform
above management expectations;
• Additional 26% LPG yield from
GTU-3, which has been in operation
since September 2023.
Chinarevskoye Field production in 2024
was 8,544 boepd, which represents a 15.3%
decline compared to 2023. The production
was slightly higher than anticipated. This
was due to a well intervention programme
that proved successful, as well as the
implementation of additional gas lift and
the introduction of a new oil producer.
Chinarevskoye field average daily
production for 2025 is forecast to be
in the range of 5,500-6,500 boepd.
Processed volumes
(kboepd)
+94%
2P reserves as at 2024 end
(mmboe)
2024
2023
19.8
10.2
128
mmboe
18.0 110.0
Chinarevskoye
Stepnoy Leopard
26 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
2024 developments
In 2024 Nostrum almost doubled its total processed
volumes year-on-year, thanks to the operational
excellence in handling and processing of raw gas
from Ural O&G, new production from well No.301,
and further enhancements to our facilities.
Production in 2024
In 2024 Nostrum’s average daily titled
production volumes (i.e. final products
owned by Nostrum) increased by 48% to
14,935 boepd (10,091 boepd in 2023).
Total processed volumes increased by 94%
(including third party condensate tolling
volumes) In 2024, compared to 2023.
These increases in production and
processed volumes were mainly due to:
• Processing of raw gas received
from Ural O&G, commencing from
December 2023;
• Production from well No.301 which was
completed and put into production in
May 2024;
• Full year contribution from: Gas-lift
system expansion, which was successfully
launched in July 2023 doubling its
capacity and continued to perform
above management expectations;
• Additional 26% LPG yield from
GTU-3, which has been in operation
since September 2023.
Chinarevskoye Field production in 2024
was 8,544 boepd, which represents a 15.3%
decline compared to 2023. The production
was slightly higher than anticipated. This
was due to a well intervention programme
that proved successful, as well as the
implementation of additional gas lift and
the introduction of a new oil producer.
Chinarevskoye field average daily
production for 2025 is forecast to be
in the range of 5,500-6,500 boepd.
Processed volumes
(kboepd)
+94%
2P reserves as at 2024 end
(mmboe)
2024
2023
19.8
10.2
128
mmboe
18.0 110.0
Chinarevskoye
Stepnoy Leopard
26 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Drilling and workover
operations at the
Chinarevskoye Field
Most of the scope planned under the
drilling programme was executed on
time and within budget in 2024. Two wells
were drilled in 2024, one deepening
well (No.301) and one sidetrack well
(Ch-41_1_1). Well No.301 drilling was
completed in April 2024 and put in
production in May 2024, producing
from the lower target interval (Devonian).
The upper target interval will be perforated
in Q2 2025 (Carboniferous). Production
from the lower target interval has been
slightly above the P50 expectations.
Well 41_1_1 appraisal sidetrack work
carried a significant level of uncertainty and
risk due to the multiple exploration,
appraisal, and development objectives.
The well was completed in September
2024, but the initial test did not encounter
the primary Devonian target horizon. While
secondary intervals with hydrocarbons
were encountered, they were deemed
marginal. As a result, the well has been
temporarily suspended. However, the key
(sonic) data gathered during drilling has
greatly enhanced understanding of the
reservoir’s spatial architecture, enabling
more confident planning for a future well.
In 2025, The Company expects to continue
with the limited-scale drilling campaigns
targeting high-value subsurface
opportunities where possible whilst
ensuring compliance with its licence to
operate commitments.
The programme will leverage existing
wellbores to reduce costs and carries a
level of uncertainties and risks as the
planned subsurface targets contain
multiple exploration, appraisal, and
development objectives.
The total rig workover campaign in 2024
was concentrated on ESP failures. More
workover activities are planned for 2025
for increased production and potential
repair work.
The strategy applied in 2023 was continued
in 2024 with regards rigless re-completions,
additional perforations and acid stimulations.
These were carried out on a number of oil,
gas-condensate and water-injection wells.
Further gaslift was successfully introduced
in gas condensate wells allowing
continuation of production and additional
candidates will be targeted in 2025 (two
more candidate wells).
As noted in the Reserves section,
extraction of 2P volumes will require further
interventions (side-tracks, new drilling
and workovers) in the years to come. As in
previous years, the focus is on identifying
low-risk drilling projects in order to extract
the 2P reserves.
The seismic and further de-risking will
therefore be continued.
In addition to the geological risks, the
generally expected low production
rates from horizons of limited reservoir
quality make potential drilling projects
economically challenging and jeopardise
the development of the remaining proven
and probable reserves.
In 2024 the uptime of the processing
facilities was 98.25% for oil and 97.75% for
gas processing units. Planned downtime of
the plant was in line with expectations, with
maintenance of the oil treatment plant
causing a six-day shut down and 17 K boe
of deferred production, while the
maintenance of the gas processing
plant causing a seven-day shut down
and 32 K boe of deferred production.
Unplanned plant downtime was 0.15%
for oil treatment plant and 0.35% for gas
processing facility, which happened on five
occasions, primarily due to power outages
in the first half of the year, with deferment
totaling 14 K boe. Mitigation measures
to tackle power outages were implemented
and those resulted in no power interruptions
in the second half of the year. The spring
and autumn compressor maintenance
campaign incurred only a 12 K boe
production deferment with no plant
shut down.
As of 31 December 2024, the Company
had 44 production (28 oil and 16 gas
condensate) wells in operation in the
Chinarevskoye field.
Full year operating of GTU 3
In September 2023, Nostrum announced
the successful completion of the re-start
of its c.US$750m state-of-the-art GTU-3
gas plant, with 2.5 billion cubic metres
per annum gas processing capacity. The
Company completed the modifications and
other works on GTU-3 subsequent to its
commissioning and start-up in 2019. GTU-3
successfully processed both ZKM and
Ural O&G raw gas streams. The Turbo
Expander proved to be very efficient in
terms of LPG extraction, exceeding
expectations (actual efficiency of up
to 95%).
Stepnoy Leopard fields
development
Several key milestones were achieved in
relation to the Stepnoy Leopard Fields in
2024. The appraisal campaign started in
2023 with the re-entry of two wells was
successfully completed in spring 2024 and
significant fluid, pressure and test data
was collected.
A seismic and geological reprocessing of
all available data made it possible to create
static and dynamic reservoir models,
which formed the basis for an externally
conducted Competent Person Report that
was able to prove Proven, Probable and
Possible Reserves according to the
PRMS-SPE standard for the first time.
The field development project was
consistently pursued and necessary key
government project documents were
approved by the Kazakhstan authorities.
In July 2024 the Company completed the
full SL CPR on the Stepnoy Leopard Fields.
The SL CPR, an independent third-party
evaluation of the reserves and resources of
the Stepnoy Leopard Fields as at 1 January
2024, was prepared by Xodus Group
Limited. The full-field development SL CPR
follows Nostrum’s final investment decision
for the initial field development phase
of the SL fields, supporting the commercial
viability of the scalable full-field
development targeting the key reservoirs
starting with the Eastern fields with
subsequent expansion to the Western
fields. The full CPR report is available on
Company’s website www.nog.co.uk
Additional third-party
volumes
The core strategy for Nostrum to
create value for its stakeholders is to
commercialise the investment made in its
gas processing infrastructure, the focus
being on filling the spare capacity with
third-party hydrocarbons. A significant
milestone in this strategy was reached in
2023 with the initiation of the Ural O&G
tie-back project.
Throughout 2024, the Company
continued processing Ural O&G raw
gas. As announced by KazMunayGas
on 1 March 2025, Ural O&G production
in 2024 reached 222 thousand tonnes
of condensate and 301 mcm of gas. In 2025
Ural O&G plans to produce 527 mcm of gas
and 351 thousand tonnes of condensate.
It is expected that a permanent fiscal
metering unit will be installed by Ural O&G
by midyear 2025.
Nostrum is also focused on entering into
additional agreements which can fill all
the remaining capacity at its GTF.
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 27 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
operations at the
Chinarevskoye Field
Most of the scope planned under the
drilling programme was executed on
time and within budget in 2024. Two wells
were drilled in 2024, one deepening
well (No.301) and one sidetrack well
(Ch-41_1_1). Well No.301 drilling was
completed in April 2024 and put in
production in May 2024, producing
from the lower target interval (Devonian).
The upper target interval will be perforated
in Q2 2025 (Carboniferous). Production
from the lower target interval has been
slightly above the P50 expectations.
Well 41_1_1 appraisal sidetrack work
carried a significant level of uncertainty and
risk due to the multiple exploration,
appraisal, and development objectives.
The well was completed in September
2024, but the initial test did not encounter
the primary Devonian target horizon. While
secondary intervals with hydrocarbons
were encountered, they were deemed
marginal. As a result, the well has been
temporarily suspended. However, the key
(sonic) data gathered during drilling has
greatly enhanced understanding of the
reservoir’s spatial architecture, enabling
more confident planning for a future well.
In 2025, The Company expects to continue
with the limited-scale drilling campaigns
targeting high-value subsurface
opportunities where possible whilst
ensuring compliance with its licence to
operate commitments.
The programme will leverage existing
wellbores to reduce costs and carries a
level of uncertainties and risks as the
planned subsurface targets contain
multiple exploration, appraisal, and
development objectives.
The total rig workover campaign in 2024
was concentrated on ESP failures. More
workover activities are planned for 2025
for increased production and potential
repair work.
The strategy applied in 2023 was continued
in 2024 with regards rigless re-completions,
additional perforations and acid stimulations.
These were carried out on a number of oil,
gas-condensate and water-injection wells.
Further gaslift was successfully introduced
in gas condensate wells allowing
continuation of production and additional
candidates will be targeted in 2025 (two
more candidate wells).
As noted in the Reserves section,
extraction of 2P volumes will require further
interventions (side-tracks, new drilling
and workovers) in the years to come. As in
previous years, the focus is on identifying
low-risk drilling projects in order to extract
the 2P reserves.
The seismic and further de-risking will
therefore be continued.
In addition to the geological risks, the
generally expected low production
rates from horizons of limited reservoir
quality make potential drilling projects
economically challenging and jeopardise
the development of the remaining proven
and probable reserves.
In 2024 the uptime of the processing
facilities was 98.25% for oil and 97.75% for
gas processing units. Planned downtime of
the plant was in line with expectations, with
maintenance of the oil treatment plant
causing a six-day shut down and 17 K boe
of deferred production, while the
maintenance of the gas processing
plant causing a seven-day shut down
and 32 K boe of deferred production.
Unplanned plant downtime was 0.15%
for oil treatment plant and 0.35% for gas
processing facility, which happened on five
occasions, primarily due to power outages
in the first half of the year, with deferment
totaling 14 K boe. Mitigation measures
to tackle power outages were implemented
and those resulted in no power interruptions
in the second half of the year. The spring
and autumn compressor maintenance
campaign incurred only a 12 K boe
production deferment with no plant
shut down.
As of 31 December 2024, the Company
had 44 production (28 oil and 16 gas
condensate) wells in operation in the
Chinarevskoye field.
Full year operating of GTU 3
In September 2023, Nostrum announced
the successful completion of the re-start
of its c.US$750m state-of-the-art GTU-3
gas plant, with 2.5 billion cubic metres
per annum gas processing capacity. The
Company completed the modifications and
other works on GTU-3 subsequent to its
commissioning and start-up in 2019. GTU-3
successfully processed both ZKM and
Ural O&G raw gas streams. The Turbo
Expander proved to be very efficient in
terms of LPG extraction, exceeding
expectations (actual efficiency of up
to 95%).
Stepnoy Leopard fields
development
Several key milestones were achieved in
relation to the Stepnoy Leopard Fields in
2024. The appraisal campaign started in
2023 with the re-entry of two wells was
successfully completed in spring 2024 and
significant fluid, pressure and test data
was collected.
A seismic and geological reprocessing of
all available data made it possible to create
static and dynamic reservoir models,
which formed the basis for an externally
conducted Competent Person Report that
was able to prove Proven, Probable and
Possible Reserves according to the
PRMS-SPE standard for the first time.
The field development project was
consistently pursued and necessary key
government project documents were
approved by the Kazakhstan authorities.
In July 2024 the Company completed the
full SL CPR on the Stepnoy Leopard Fields.
The SL CPR, an independent third-party
evaluation of the reserves and resources of
the Stepnoy Leopard Fields as at 1 January
2024, was prepared by Xodus Group
Limited. The full-field development SL CPR
follows Nostrum’s final investment decision
for the initial field development phase
of the SL fields, supporting the commercial
viability of the scalable full-field
development targeting the key reservoirs
starting with the Eastern fields with
subsequent expansion to the Western
fields. The full CPR report is available on
Company’s website www.nog.co.uk
Additional third-party
volumes
The core strategy for Nostrum to
create value for its stakeholders is to
commercialise the investment made in its
gas processing infrastructure, the focus
being on filling the spare capacity with
third-party hydrocarbons. A significant
milestone in this strategy was reached in
2023 with the initiation of the Ural O&G
tie-back project.
Throughout 2024, the Company
continued processing Ural O&G raw
gas. As announced by KazMunayGas
on 1 March 2025, Ural O&G production
in 2024 reached 222 thousand tonnes
of condensate and 301 mcm of gas. In 2025
Ural O&G plans to produce 527 mcm of gas
and 351 thousand tonnes of condensate.
It is expected that a permanent fiscal
metering unit will be installed by Ural O&G
by midyear 2025.
Nostrum is also focused on entering into
additional agreements which can fill all
the remaining capacity at its GTF.
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 27 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
OPERATIONAL REVIEW
Chinarevskoye reserves
The Chinarevskoye field (Chinarevskoye) is
the Group’s only producing field, governed
by a PSA since 1997, with the licence valid
until 2031. Since 2004, 105 wells and
side-tracks have been drilled under the
PSA. The field features 17 reservoirs and
53 compartments spread over three areas,
with commercial hydrocarbons identified
in formations such as the Lower Permian,
Bashkirian, Bobrikovski, Tournaisian,
Frasnian, Mullinski, Ardatovski, and
Biyski-Afoninski reservoirs. The licence is
100% owned by Zhaikmunai, the Group’s
principal Kazakhstan operating company.
As of 31 December 2024, total 2P (Proven
plus Probable) reserves are 18 mmboe,
reflecting a net reduction of 2 mmboe due
to increased water ingress. The 1P (Proven)
reserves amount to 12.9 mmboe,
a 3.4 mmboe decline year-on-year,
primarily due to 2024 production and the
reclassification of smaller reserves beyond
the licence expiry.
The Proven and Probable reserves volume
requires 13 CAPEX interventions, with
an additional 10 OPEX well interventions
for production maintenance (2023: 23.2
mmboe requiring14 CAPEX interventions).
Management’s estimates of reserves of
31 December 2024 and a comparison with
the reserves of 31 December 2023 are
summarized in Table 1. Please refer to
page 147 for more details on estimation
uncertainties.
The current Probable Undeveloped case
assumes 10 rig-assisted interventions
including five workover recompletions,
side-tracking of three existing wells, and
our new vertical well in the Bashkirian
reservoir. After drilling 2 wells in 2023-2024
the company plans to continue its drilling
activities and drill two more sidetracks
in 2025.
In 2025, Nostrum plans to continue this
workover and well intervention programme
by targeting a limited number of reserves
development wells along with production
maintenance, and continue the drilling
programme. This programme, together
with the 45 existing producers, cover the
estimated 2P reserves as at 31 December
2024. It should also be noted that there
has been some decrease in volumes in
undeveloped reservoirs associated with
shifting of the drilling campaign.
Possible reserves of 5.1 mmboe as at
31 December 2024 (2023: 8.2 mmboe) are
attributed to lower declines than the Proven
and Probable cases in existing producers
and 9 well interventions (4 WO, 2
sidetracks, 3 new wells).
Table 2 shows the breakdown of each
reserves category by products.
Reserves by reservoir
The breakdown by reservoir is given in Table 3.
Biyski-Afoninski North-East
2P reserves are estimated at 4.91 mmboe,
down 2.24 mmboe compared to 2023-
year end (7.15 mmboe) which includes
1.14 mmboe of production in 2024 and a
1.1 mmboe negative revision due to further
progressing of water encroachment .
Gas lift was introduced into the 2 last wells,
predominantly through low cost rigless
interventions and using the expanded Gas
lift system commissioned in July 2023.
Probable and Possible Developed volumes
are attributed to existing producing wells,
with lower declines interpreted respectively.
Infill well Ch-20 is planned to be temporary
transferred to Fillippovski for the period
2028-2030. The idle Well Ch-222 is planned
to be put back in operations in 2025 after
recompletion to GL and water shut-off.
Tournaisian North-East, West
and South
The Tournaisian North-East has a total 2P
of 6.76 mmboe at 2024-year end,
representing a 1.75 mmboe decline year-on
year, including 1.1 mmboe production and
a 0.65 mmboe negative revision to reflect
recent well performance.
Proven Undeveloped volumes are
associated with the planned sidetrack of
well (Ch-725) which replaces the formerly
planned Ch-201_2 and perforation of
Tournaisian in well No.301, currently
producing Mullinski, to be done in Q2
2025. Whilst Probable Undeveloped
Reserves are associated with a sidetrack of
well Ch- 225_2, recompletion of Ch-220
(from waterised Biyski) and continuing
development of the Waterflood with one
WO conversion and a sidetrack injection
well (Ch-52_2). Production maintenance
workovers are planned in the reservoir in
the years up to and including 2027.
Tournaisian West 2P is 0.56 mmboe despite
0.15 mmboe production. The increase of
reserves associated with Ch-33 and Ch-204
was achieved by successful stimulation of
T2 layer in Ch-33. New P3 drilling target
(+0.29 mmboe) was identified NE of Ch-204
and this attic oil meant to be produced
from a sidetrack well Ch-204_1 starting 2027.
In the Tournaisian South, there are limited
PDP volumes associated with the three
remaining producers and Possible reserves
associated with one new well planned
for 2027.
Ardatovski North-East
and South
Proven Producing volumes are associated
with three current producers. One Probable
Undeveloped side-track well is planned for
the Ardatovski North-East reservoir in 2026.
No further reserves development is
planned for the Ardatovski South reservoir,
beyond the current producer.
Frasnian North
2P reserves are estimated at 0.36 mmboe
at year end 2024, despite 0.1 mmboe of
production in 2024.
The development plan now foresees only
one additional Possible Undeveloped
side- track planned for 2025-2026.
28 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Chinarevskoye reserves
The Chinarevskoye field (Chinarevskoye) is
the Group’s only producing field, governed
by a PSA since 1997, with the licence valid
until 2031. Since 2004, 105 wells and
side-tracks have been drilled under the
PSA. The field features 17 reservoirs and
53 compartments spread over three areas,
with commercial hydrocarbons identified
in formations such as the Lower Permian,
Bashkirian, Bobrikovski, Tournaisian,
Frasnian, Mullinski, Ardatovski, and
Biyski-Afoninski reservoirs. The licence is
100% owned by Zhaikmunai, the Group’s
principal Kazakhstan operating company.
As of 31 December 2024, total 2P (Proven
plus Probable) reserves are 18 mmboe,
reflecting a net reduction of 2 mmboe due
to increased water ingress. The 1P (Proven)
reserves amount to 12.9 mmboe,
a 3.4 mmboe decline year-on-year,
primarily due to 2024 production and the
reclassification of smaller reserves beyond
the licence expiry.
The Proven and Probable reserves volume
requires 13 CAPEX interventions, with
an additional 10 OPEX well interventions
for production maintenance (2023: 23.2
mmboe requiring14 CAPEX interventions).
Management’s estimates of reserves of
31 December 2024 and a comparison with
the reserves of 31 December 2023 are
summarized in Table 1. Please refer to
page 147 for more details on estimation
uncertainties.
The current Probable Undeveloped case
assumes 10 rig-assisted interventions
including five workover recompletions,
side-tracking of three existing wells, and
our new vertical well in the Bashkirian
reservoir. After drilling 2 wells in 2023-2024
the company plans to continue its drilling
activities and drill two more sidetracks
in 2025.
In 2025, Nostrum plans to continue this
workover and well intervention programme
by targeting a limited number of reserves
development wells along with production
maintenance, and continue the drilling
programme. This programme, together
with the 45 existing producers, cover the
estimated 2P reserves as at 31 December
2024. It should also be noted that there
has been some decrease in volumes in
undeveloped reservoirs associated with
shifting of the drilling campaign.
Possible reserves of 5.1 mmboe as at
31 December 2024 (2023: 8.2 mmboe) are
attributed to lower declines than the Proven
and Probable cases in existing producers
and 9 well interventions (4 WO, 2
sidetracks, 3 new wells).
Table 2 shows the breakdown of each
reserves category by products.
Reserves by reservoir
The breakdown by reservoir is given in Table 3.
Biyski-Afoninski North-East
2P reserves are estimated at 4.91 mmboe,
down 2.24 mmboe compared to 2023-
year end (7.15 mmboe) which includes
1.14 mmboe of production in 2024 and a
1.1 mmboe negative revision due to further
progressing of water encroachment .
Gas lift was introduced into the 2 last wells,
predominantly through low cost rigless
interventions and using the expanded Gas
lift system commissioned in July 2023.
Probable and Possible Developed volumes
are attributed to existing producing wells,
with lower declines interpreted respectively.
Infill well Ch-20 is planned to be temporary
transferred to Fillippovski for the period
2028-2030. The idle Well Ch-222 is planned
to be put back in operations in 2025 after
recompletion to GL and water shut-off.
Tournaisian North-East, West
and South
The Tournaisian North-East has a total 2P
of 6.76 mmboe at 2024-year end,
representing a 1.75 mmboe decline year-on
year, including 1.1 mmboe production and
a 0.65 mmboe negative revision to reflect
recent well performance.
Proven Undeveloped volumes are
associated with the planned sidetrack of
well (Ch-725) which replaces the formerly
planned Ch-201_2 and perforation of
Tournaisian in well No.301, currently
producing Mullinski, to be done in Q2
2025. Whilst Probable Undeveloped
Reserves are associated with a sidetrack of
well Ch- 225_2, recompletion of Ch-220
(from waterised Biyski) and continuing
development of the Waterflood with one
WO conversion and a sidetrack injection
well (Ch-52_2). Production maintenance
workovers are planned in the reservoir in
the years up to and including 2027.
Tournaisian West 2P is 0.56 mmboe despite
0.15 mmboe production. The increase of
reserves associated with Ch-33 and Ch-204
was achieved by successful stimulation of
T2 layer in Ch-33. New P3 drilling target
(+0.29 mmboe) was identified NE of Ch-204
and this attic oil meant to be produced
from a sidetrack well Ch-204_1 starting 2027.
In the Tournaisian South, there are limited
PDP volumes associated with the three
remaining producers and Possible reserves
associated with one new well planned
for 2027.
Ardatovski North-East
and South
Proven Producing volumes are associated
with three current producers. One Probable
Undeveloped side-track well is planned for
the Ardatovski North-East reservoir in 2026.
No further reserves development is
planned for the Ardatovski South reservoir,
beyond the current producer.
Frasnian North
2P reserves are estimated at 0.36 mmboe
at year end 2024, despite 0.1 mmboe of
production in 2024.
The development plan now foresees only
one additional Possible Undeveloped
side- track planned for 2025-2026.
28 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Table 1 – Nostrum Reserves, mmboe
2024 2023 Change
Total PDP 12.0 15.1 -3.1
Total PUD/PDNP 0.8 1.2 -0.4
Total 1P 12.9 16.3 -3.4
Total Probable 5.1 6.9 -1.8
Total 2P 18.0 23.2 -5.2
Possible 5.1 8.2 -3.1
Total 3P 23.1 31.4 -8.3
Note: Barrel of oil equivalent (boe) totals are management estimates using a conversion factor of 5.327 mcf/boe.
Table 2 – Nostrum Reserves, by product and by reserves category
Fluid Unit
Proven
Producing
(PDP)
Proven
Non-Producing &
Undeveloped
(PDNP & PUD)
Total Proven
(1P)
Probable
(P2)
Total Proven
plus Probable
(2P)
Possible
(P3)
Total Proven,
Probable and
Possible (3P)
Oil/condensate barrels 6,533,902 693,119 7,227,021 2,561,129 9,788,151 2,814,201 12,602,352
Plant products (LPG) barrels 1,204,340 44,010 1,248,350 457,096 1,705,446 468,095 2,173,541
Gas (after shrink) 1 mmcf 22,882 473 23,355 11,200 34,555 9,600 44,155
Gas (after shrink) boe 4,295,874 88,761 4,384,635 2,102,650 6,487,285 1,802,250 8,289,534
Total boe 12,034,117 825,890 12,860,006 5,120,875 17,980,882 5,084,546 23,065,428
Table 3 2 – Comparison of reserves by reservoir 2024 versus 2023
Reservoir
31 December 2024 31 December 2023 Change
Proven,
mmboe
Probable
mmboe
Possible,
mmboe
3P,
mmboe
Proven,
mmboe
Probable
mmboe
Possible,
mmboe
3P,
mmboe
Proven,
mmboe
Probable
mmboe
Possible,
mmboe
3P,
mmboe
Biyski/Afoninski NE 4.3 0.6 0.8 5.7 6.1 1.0 0.8 7.9 -1.8 -0.4 0.0 -2.2
Tournaisian NE 4.9 1.9 0.6 7.4 6.1 2.4 1.3 9.8 -1.2 -0.6 -0.7 -2.5
Frasnian N 0.3 0.1 0.8 1.2 0.4 1.1 2.5 4.0 -0.1 -1.0 -1.7 -2.8
Ardatovski NE 0.8 1.6 0.1 2.5 1.5 1.6 0.1 3.2 -0.7 0.0 0.0 -0.7
Filippovski 0.3 0.4 0.7 1.4 0.2 0.2 0.8 1.2 0.1 0.1 -0.1 0.2
Tournaisian South 0.3 0.1 0.7 1.1 0.3 0.1 0.7 1.2 0.0 0.0 0.0 -0.1
Mullinski NE 0.7 0.1 0.3 1.2 0.6 0.0 1.1 1.8 0.1 0.1 -0.8 -0.6
Bashkirian NE & W 0.5 0.2 0.0 0.8 0.5 0.2 0.0 0.7 0.0 0.0 0.0 0.0
Tournaisian West 0.5 0.1 0.3 0.9 0.3 0.1 0.0 0.4 0.2 0.0 0.2 0.5
Mullinski South 0.0 0.0 0.6 0.6 0.0 0.0 0.7 0.7 0.0 0.0 -0.1 -0.1
Bobrikovski South 0.1 0.1 0.0 0.2 0.1 0.1 0.0 0.2 0.0 0.0 0.0 0.0
Ardatovski S 0.1 0.0 0.0 0.2 0.1 0.0 0.0 0.2 0.0 0.0 0.0 0.0
Mullinski North 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Total 12.9 5.1 5.1 23.1 16.3 6.9 8.2 31.4 -3.4 -1.8 -3.1 -8.3
Mullinski North-East,
North and South
Proven Developed Producing reserves
now associated with four wells, three in
the North- East and one in the North
respectively. Additional 4th well is the
successfully drilled well No.301, which is
producing from Mullinski NE since May
2024. Proven Undeveloped volumes are
attributed to one new well in the North-East
block and planned for drilling in 2025.
One Possible Undeveloped category well
locations have been identified in the
North-East block and is a side-track of an
existing well, while one new Possible well is
planned for drilling in the Mullinski South.
These two wells are planned for 2026-2027.
Bashkirian North-East
& West
PDP reserves remain for two wells
produced via Electric Submersible Pumps
(ESPs). One Probable Undeveloped new
vertical well is proposed in the Bashkirian
North-East from 2026.
Filippovski
Six low-cost workover recompletions (two
Probable and four Possible) have been
identified for the Filippovski reservoir.
These are planned, subject to further
technical and economic evaluation, to
be carried out in 2025-2028.
1. Not included in the total.
2. Some differences due to rounding.
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 29 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
2024 2023 Change
Total PDP 12.0 15.1 -3.1
Total PUD/PDNP 0.8 1.2 -0.4
Total 1P 12.9 16.3 -3.4
Total Probable 5.1 6.9 -1.8
Total 2P 18.0 23.2 -5.2
Possible 5.1 8.2 -3.1
Total 3P 23.1 31.4 -8.3
Note: Barrel of oil equivalent (boe) totals are management estimates using a conversion factor of 5.327 mcf/boe.
Table 2 – Nostrum Reserves, by product and by reserves category
Fluid Unit
Proven
Producing
(PDP)
Proven
Non-Producing &
Undeveloped
(PDNP & PUD)
Total Proven
(1P)
Probable
(P2)
Total Proven
plus Probable
(2P)
Possible
(P3)
Total Proven,
Probable and
Possible (3P)
Oil/condensate barrels 6,533,902 693,119 7,227,021 2,561,129 9,788,151 2,814,201 12,602,352
Plant products (LPG) barrels 1,204,340 44,010 1,248,350 457,096 1,705,446 468,095 2,173,541
Gas (after shrink) 1 mmcf 22,882 473 23,355 11,200 34,555 9,600 44,155
Gas (after shrink) boe 4,295,874 88,761 4,384,635 2,102,650 6,487,285 1,802,250 8,289,534
Total boe 12,034,117 825,890 12,860,006 5,120,875 17,980,882 5,084,546 23,065,428
Table 3 2 – Comparison of reserves by reservoir 2024 versus 2023
Reservoir
31 December 2024 31 December 2023 Change
Proven,
mmboe
Probable
mmboe
Possible,
mmboe
3P,
mmboe
Proven,
mmboe
Probable
mmboe
Possible,
mmboe
3P,
mmboe
Proven,
mmboe
Probable
mmboe
Possible,
mmboe
3P,
mmboe
Biyski/Afoninski NE 4.3 0.6 0.8 5.7 6.1 1.0 0.8 7.9 -1.8 -0.4 0.0 -2.2
Tournaisian NE 4.9 1.9 0.6 7.4 6.1 2.4 1.3 9.8 -1.2 -0.6 -0.7 -2.5
Frasnian N 0.3 0.1 0.8 1.2 0.4 1.1 2.5 4.0 -0.1 -1.0 -1.7 -2.8
Ardatovski NE 0.8 1.6 0.1 2.5 1.5 1.6 0.1 3.2 -0.7 0.0 0.0 -0.7
Filippovski 0.3 0.4 0.7 1.4 0.2 0.2 0.8 1.2 0.1 0.1 -0.1 0.2
Tournaisian South 0.3 0.1 0.7 1.1 0.3 0.1 0.7 1.2 0.0 0.0 0.0 -0.1
Mullinski NE 0.7 0.1 0.3 1.2 0.6 0.0 1.1 1.8 0.1 0.1 -0.8 -0.6
Bashkirian NE & W 0.5 0.2 0.0 0.8 0.5 0.2 0.0 0.7 0.0 0.0 0.0 0.0
Tournaisian West 0.5 0.1 0.3 0.9 0.3 0.1 0.0 0.4 0.2 0.0 0.2 0.5
Mullinski South 0.0 0.0 0.6 0.6 0.0 0.0 0.7 0.7 0.0 0.0 -0.1 -0.1
Bobrikovski South 0.1 0.1 0.0 0.2 0.1 0.1 0.0 0.2 0.0 0.0 0.0 0.0
Ardatovski S 0.1 0.0 0.0 0.2 0.1 0.0 0.0 0.2 0.0 0.0 0.0 0.0
Mullinski North 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Total 12.9 5.1 5.1 23.1 16.3 6.9 8.2 31.4 -3.4 -1.8 -3.1 -8.3
Mullinski North-East,
North and South
Proven Developed Producing reserves
now associated with four wells, three in
the North- East and one in the North
respectively. Additional 4th well is the
successfully drilled well No.301, which is
producing from Mullinski NE since May
2024. Proven Undeveloped volumes are
attributed to one new well in the North-East
block and planned for drilling in 2025.
One Possible Undeveloped category well
locations have been identified in the
North-East block and is a side-track of an
existing well, while one new Possible well is
planned for drilling in the Mullinski South.
These two wells are planned for 2026-2027.
Bashkirian North-East
& West
PDP reserves remain for two wells
produced via Electric Submersible Pumps
(ESPs). One Probable Undeveloped new
vertical well is proposed in the Bashkirian
North-East from 2026.
Filippovski
Six low-cost workover recompletions (two
Probable and four Possible) have been
identified for the Filippovski reservoir.
These are planned, subject to further
technical and economic evaluation, to
be carried out in 2025-2028.
1. Not included in the total.
2. Some differences due to rounding.
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 29 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
OPERATIONAL REVIEW
Stepnoy Leopard reserves
The Stepnoy Leopard fields, located in the
West Kazakhstan region, form part of
Nostrum Oil & Gas PLC’s portfolio, with an
80% working interest under the current
licence terms. The fields, covering multiple
hydrocarbon-bearing reservoirs, were
historically explored during the Soviet era,
with over 100 wells drilled. Nostrum
acquired the asset in 2023 and has since
conducted appraisal activities to refine the
development plan, leveraging its existing
infrastructure at Chinarevskoye. The
asset comprises multiple discovered
hydrocarbon accumulations across the
Permian Artinskian, Filippovski, and
Kalinovski reservoirs in the West Kazakhstan
Region. The governing licence remains
valid until December 2044.
Table 1 – Reserves summary (Gross)
Category
Sales Gas
(bcf)
Condensate
& Oil
(mm barrels)
LPG
(ktonnes)
Total Gross
(mmboe)
Proven 1P 408.54 16.96 414.47 90
Proven and Probable 2P 620.93 26.62 629.93 138
Proven, Probable and Possible 3P 779.36 34.27 790.66 174
Table 2 – Reserves summary (80% Working Interest)
Category
Sales Gas
(bcf)
Condensate
& Oil
(mm barrels)
LPG
(ktonnes)
Total Gross
(mmboe)
Proven 1P 326.83 13.58 331.58 72
Proven and Probable 2P 496.74 21.30 503.94 110
Proven, Probable and Possible 3P 623.49 27.42 632.53 139
Note: Gross and Working Interest to Nostrum as of 1 January 2024
The Stepnoy Leopard CPR, an independent
third-party evaluation of the reserves and
resources of the SL fields as at 1 January
2024, was prepared by Xodus Group
Limited.
A summary of the Reserves associated with
Stepnoy Leopard, on a gross and working
interest basis, is shown in Tables 1 and 2.
The reserves are an arithmetic summation
of the economically recoverable resources
for five different fields in Stepnoy Leopard,
including the four eastern Artinskian fields
and the Kamenskoye field in the west of
the area.
Reserves by Reservoir
Artinskian Reservoir: Contains the majority
of the Petroleum Initially-In-Place (PIIP).
Massive stromatolitic reefal carbonates
(dolomites and limestones) were deposited
in the final stage of Moscovian-Artinskian
carbonate cycle, which built a broad shelf
along the northern part of the Pre-Caspian
basin. These carbonates build a long chain
of barrier reefs, separated by perpendicular
passages to the shoreline acted as current
channels, forming a rim along the shelf
edge. Shelf rims rises from 150 m to almost
300 m above shelf table. Reservoir rocks
are fractured, which greatly contribute to
their permeability. In general, vugs and
fractures are unevenly distributed and are
controlled by the primary reefal macro-
structure.
Filippovski Reservoir: Holds a subordinate
volume of PIIP. Dolomite formations within
occasionally dolomitic limestones above
Artinskian and partially onlapping.
Gradually thickens away from the Artinskian
shelf rim to the North-West and reaches
250 m within the boundary of the licences
block. It was deposited within a broad shelf
lagoon in the North-West of the Artinskian
barrier rim.
Kalinovski Reservoir: This overpressured
reservoir, which occurs only in the
Kamenskoye field, has a proven
hydrocarbon accumulation in a thick,
salt-entrapped carbonate-clastic sequence
(Lower Permian Kungur), which is
influenced by salt tectonics. The
subordinated clastic horizon is thin and
located at the bottom of the sequence.
30 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Stepnoy Leopard reserves
The Stepnoy Leopard fields, located in the
West Kazakhstan region, form part of
Nostrum Oil & Gas PLC’s portfolio, with an
80% working interest under the current
licence terms. The fields, covering multiple
hydrocarbon-bearing reservoirs, were
historically explored during the Soviet era,
with over 100 wells drilled. Nostrum
acquired the asset in 2023 and has since
conducted appraisal activities to refine the
development plan, leveraging its existing
infrastructure at Chinarevskoye. The
asset comprises multiple discovered
hydrocarbon accumulations across the
Permian Artinskian, Filippovski, and
Kalinovski reservoirs in the West Kazakhstan
Region. The governing licence remains
valid until December 2044.
Table 1 – Reserves summary (Gross)
Category
Sales Gas
(bcf)
Condensate
& Oil
(mm barrels)
LPG
(ktonnes)
Total Gross
(mmboe)
Proven 1P 408.54 16.96 414.47 90
Proven and Probable 2P 620.93 26.62 629.93 138
Proven, Probable and Possible 3P 779.36 34.27 790.66 174
Table 2 – Reserves summary (80% Working Interest)
Category
Sales Gas
(bcf)
Condensate
& Oil
(mm barrels)
LPG
(ktonnes)
Total Gross
(mmboe)
Proven 1P 326.83 13.58 331.58 72
Proven and Probable 2P 496.74 21.30 503.94 110
Proven, Probable and Possible 3P 623.49 27.42 632.53 139
Note: Gross and Working Interest to Nostrum as of 1 January 2024
The Stepnoy Leopard CPR, an independent
third-party evaluation of the reserves and
resources of the SL fields as at 1 January
2024, was prepared by Xodus Group
Limited.
A summary of the Reserves associated with
Stepnoy Leopard, on a gross and working
interest basis, is shown in Tables 1 and 2.
The reserves are an arithmetic summation
of the economically recoverable resources
for five different fields in Stepnoy Leopard,
including the four eastern Artinskian fields
and the Kamenskoye field in the west of
the area.
Reserves by Reservoir
Artinskian Reservoir: Contains the majority
of the Petroleum Initially-In-Place (PIIP).
Massive stromatolitic reefal carbonates
(dolomites and limestones) were deposited
in the final stage of Moscovian-Artinskian
carbonate cycle, which built a broad shelf
along the northern part of the Pre-Caspian
basin. These carbonates build a long chain
of barrier reefs, separated by perpendicular
passages to the shoreline acted as current
channels, forming a rim along the shelf
edge. Shelf rims rises from 150 m to almost
300 m above shelf table. Reservoir rocks
are fractured, which greatly contribute to
their permeability. In general, vugs and
fractures are unevenly distributed and are
controlled by the primary reefal macro-
structure.
Filippovski Reservoir: Holds a subordinate
volume of PIIP. Dolomite formations within
occasionally dolomitic limestones above
Artinskian and partially onlapping.
Gradually thickens away from the Artinskian
shelf rim to the North-West and reaches
250 m within the boundary of the licences
block. It was deposited within a broad shelf
lagoon in the North-West of the Artinskian
barrier rim.
Kalinovski Reservoir: This overpressured
reservoir, which occurs only in the
Kamenskoye field, has a proven
hydrocarbon accumulation in a thick,
salt-entrapped carbonate-clastic sequence
(Lower Permian Kungur), which is
influenced by salt tectonics. The
subordinated clastic horizon is thin and
located at the bottom of the sequence.
30 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Economic Evaluation
The Net Present Value (NPV) at a 10%
discount rate for the Stepnoy Leopard
reserves is summarised below:
Category
NPV10
(US$m)
IRR
(Net)
Proven 1P 120.3 26.8%
Proven and
Probable 2P 220.4 33.8%
Proven, Probable
and Possible 3P 267.9 34.3%
The project economics are based on Brent
Oil Forward Curve pricing (as of May 2024)
for oil and condensate, with domestic
pricing for gas and LPG set by Kazakhstan’s
Ministry of Energy. The reserves estimates
reflect an economic cut-off, ensuring
commercial viability under the current
fiscal regime.
Field Geology &
Development Potential
The Stepnoy Leopard fields consists of
eight hydrocarbon-bearing structures in
which the Artinskian, Filippovski and
Kalinovski reservoirs may be formed.
Reserves have been identified for only 5
structures (4 eastern – Artinskian reservoir
and Kamenskoye – Kalinovski reservoir),
while the 3 western structures only hold
resources. The primary reservoirs are
carbonate formations, characterised by
a high degree of reservoir properties
heterogeneity and partially high fracture
permeability. Initial geological studies and
dynamic modeling indicate strong reservoir
continuity, supporting long-term
production potential.
A phased drilling campaign is planned,
focusing first on the eastern Artinskian
fields and the Kamenskoye field.
Infrastructure development includes well
tie-ins to existing processing facilities at
Chinarevskoye, which will enable efficient
hydrocarbon extraction and transportation.
Contingent Resources
& Long-Term Outlook
In addition to booked reserves, Contingent
Resources in the western Artinskian fields
and post-licence production opportunities
amount to 361.76 BCF of raw gas (2C) and
7.05 MMSTB of condensate & oil (2C).
These volumes represent future
development potential, subject to
additional appraisal activities and
regulatory approvals.
Future Work & Strategic
Focus
• Drilling & Appraisal: Drilling of new wells
with well data acquisition and continuous
geological work to optimise reserve
estimates.
• Infrastructure Optimisation: Expanding
processing capacity and integrating
Stepnoy Leopard production with
existing Nostrum assets.
• Regulatory Compliance & Sustainability:
Ensuring all operations align with
Kazakhstan’s environmental and fiscal
frameworks.
• Reserves Growth Strategy: Continuous
assessment of new drilling targets (deep
potential) and enhanced recovery
techniques to maximise field output.
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 31 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
The Net Present Value (NPV) at a 10%
discount rate for the Stepnoy Leopard
reserves is summarised below:
Category
NPV10
(US$m)
IRR
(Net)
Proven 1P 120.3 26.8%
Proven and
Probable 2P 220.4 33.8%
Proven, Probable
and Possible 3P 267.9 34.3%
The project economics are based on Brent
Oil Forward Curve pricing (as of May 2024)
for oil and condensate, with domestic
pricing for gas and LPG set by Kazakhstan’s
Ministry of Energy. The reserves estimates
reflect an economic cut-off, ensuring
commercial viability under the current
fiscal regime.
Field Geology &
Development Potential
The Stepnoy Leopard fields consists of
eight hydrocarbon-bearing structures in
which the Artinskian, Filippovski and
Kalinovski reservoirs may be formed.
Reserves have been identified for only 5
structures (4 eastern – Artinskian reservoir
and Kamenskoye – Kalinovski reservoir),
while the 3 western structures only hold
resources. The primary reservoirs are
carbonate formations, characterised by
a high degree of reservoir properties
heterogeneity and partially high fracture
permeability. Initial geological studies and
dynamic modeling indicate strong reservoir
continuity, supporting long-term
production potential.
A phased drilling campaign is planned,
focusing first on the eastern Artinskian
fields and the Kamenskoye field.
Infrastructure development includes well
tie-ins to existing processing facilities at
Chinarevskoye, which will enable efficient
hydrocarbon extraction and transportation.
Contingent Resources
& Long-Term Outlook
In addition to booked reserves, Contingent
Resources in the western Artinskian fields
and post-licence production opportunities
amount to 361.76 BCF of raw gas (2C) and
7.05 MMSTB of condensate & oil (2C).
These volumes represent future
development potential, subject to
additional appraisal activities and
regulatory approvals.
Future Work & Strategic
Focus
• Drilling & Appraisal: Drilling of new wells
with well data acquisition and continuous
geological work to optimise reserve
estimates.
• Infrastructure Optimisation: Expanding
processing capacity and integrating
Stepnoy Leopard production with
existing Nostrum assets.
• Regulatory Compliance & Sustainability:
Ensuring all operations align with
Kazakhstan’s environmental and fiscal
frameworks.
• Reserves Growth Strategy: Continuous
assessment of new drilling targets (deep
potential) and enhanced recovery
techniques to maximise field output.
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 31 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
OPERATIONAL REVIEW
Showcasing our infrastructure
1
1
4 2
5 3
6
2
4
6
3
With the re-start of GTU 3,
complementing the previous
gas processing trains, we have
built a world-class infrastructure
processing hub that is currently
under-utilised but with the
potential to support the
production and sale of billions
of cubic meters of gas in north-
western Kazakhstan for years
to come.
Oil Treatment Facility
The oil treatment facility (OTF) has a
maximum throughput capacity of 400,000
tons per annum. The OTF associated
infrastructure includes a gas-lift facility that
was commissioned in 2015 and a liquid
hydrocarbons pumping station transferring
crude oil and stabilised condensate via the
liquids pipeline to the rail loading terminal.
In 2024, 0.99mmboe of crude oil and
2.56mmboe of stabilised condensate
(including third-party volumes) were
transferred through the pipeline from
Field to Terminal.
Raw Gas Treatment Facility
The gas treatment facility (GTF) is designed
to treat raw gas from gas condensate
reservoirs (and the associated gas coming
from the OTF) into condensate, LPG and
dry gas with a by-product of granulated
Sulphur. The gas treatment facility includes
three gas treatment units GTU 1,2 & 3
which have the capacity to treat 4.2 billion
cubic meters of raw gas per annum.
Low-pressure system
A low-pressure system has been installed to
facilitate the reduction of the GTF inlet
pressure from 42 to 8 bar, to prolong the
run-life of wells, primarily gas-condensate.
Installed capacity of gas compression is
48,000 standard cubic meters per hour and
all gas-condensate 10 wells are flowing
through the low-pressure system as of the
end of 2024.
In 2024 a new project (LPS3) to increase
low pressure system was initiated with an
additional capacity of 10,400 standard
cubic meters per hour. Project completion
is expected in Q3 2025.
Gas lift system
The gas-lift system is designed to enhance
oil and gas-condensate production.
The system consists of three gas-lift
compressors with a total capacity of
54,000 standard cubic meters per hour.
Currently, the compressors are running at
ca. 44,000 standard cubic meters per hour.
Total capacity (54k SM3PH will be realised
by implementing the Low Pressure capacity
upgrade. There were 31 active wells
running with gas lift (22 oil wells, 9 gas-
condensate wells).
GTU 3: 2.5 BCMA
GTU 1&2: 1.7 BCMA LPG Storage and loading
Oil/Cond. storage Power plant: 26mwh
Oil Treatment unit (OTU)
5
GRI 2-6
32 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Showcasing our infrastructure
1
1
4 2
5 3
6
2
4
6
3
With the re-start of GTU 3,
complementing the previous
gas processing trains, we have
built a world-class infrastructure
processing hub that is currently
under-utilised but with the
potential to support the
production and sale of billions
of cubic meters of gas in north-
western Kazakhstan for years
to come.
Oil Treatment Facility
The oil treatment facility (OTF) has a
maximum throughput capacity of 400,000
tons per annum. The OTF associated
infrastructure includes a gas-lift facility that
was commissioned in 2015 and a liquid
hydrocarbons pumping station transferring
crude oil and stabilised condensate via the
liquids pipeline to the rail loading terminal.
In 2024, 0.99mmboe of crude oil and
2.56mmboe of stabilised condensate
(including third-party volumes) were
transferred through the pipeline from
Field to Terminal.
Raw Gas Treatment Facility
The gas treatment facility (GTF) is designed
to treat raw gas from gas condensate
reservoirs (and the associated gas coming
from the OTF) into condensate, LPG and
dry gas with a by-product of granulated
Sulphur. The gas treatment facility includes
three gas treatment units GTU 1,2 & 3
which have the capacity to treat 4.2 billion
cubic meters of raw gas per annum.
Low-pressure system
A low-pressure system has been installed to
facilitate the reduction of the GTF inlet
pressure from 42 to 8 bar, to prolong the
run-life of wells, primarily gas-condensate.
Installed capacity of gas compression is
48,000 standard cubic meters per hour and
all gas-condensate 10 wells are flowing
through the low-pressure system as of the
end of 2024.
In 2024 a new project (LPS3) to increase
low pressure system was initiated with an
additional capacity of 10,400 standard
cubic meters per hour. Project completion
is expected in Q3 2025.
Gas lift system
The gas-lift system is designed to enhance
oil and gas-condensate production.
The system consists of three gas-lift
compressors with a total capacity of
54,000 standard cubic meters per hour.
Currently, the compressors are running at
ca. 44,000 standard cubic meters per hour.
Total capacity (54k SM3PH will be realised
by implementing the Low Pressure capacity
upgrade. There were 31 active wells
running with gas lift (22 oil wells, 9 gas-
condensate wells).
GTU 3: 2.5 BCMA
GTU 1&2: 1.7 BCMA LPG Storage and loading
Oil/Cond. storage Power plant: 26mwh
Oil Treatment unit (OTU)
5
GRI 2-6
32 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Power generation plant
The gas-fired power generation plant is
linked to the GTF and has an electrical
power output capacity of 26 MW. The
generated capacity of the plant is sufficient
to meet the existing and the maximum
future need. Backup generation capacity of
up to 15 MW is available at the processing
facilities.
Storage facilities
Nostrum has over 35,000 cubic meters of
storage capacity for liquids at its field site
and rail loading terminal.
Gas pipeline
Nostrum has its own 17 km dry gas pipeline
which is linked to the Orenburg-Novopskov
gas pipeline. The pipeline has sufficient
capacity to export the entire GTF maximum
production capacity dry gas volumes.
Liquids pipeline
Nostrum has its own 120 km liquids
pipeline that runs from the field to the
Company’s rail loading terminal in Beles
(near Uralsk). The pipeline has a maximum
daily throughput capacity of 3,500 t/d.
Rail Loading Terminal
Nostrum has its own automated rail loading
terminal at Beles, located near the city of
Uralsk, that receives all produced crude oil
and condensate and has a daily capacity of
5,000 t/d.
KTO pipeline connection
Nostrum has constructed a secondary
crude oil pipeline to enable export sales
from its rail loading terminal via the
Atyrau-Samara export pipeline operated by
KazTransOil (KTO). The connection to the
KTO pipeline has enhanced the Company’s
ability to maximise crude oil netbacks
through the commodity cycle.
Gas condensate
wells
Third-party
hydrocarbons
Crude oil wells
Gas treatment
facilities (GTF)
GTU 1&2: 1.7bcm
H 2 S 2,500ppm: LPG 65%
GTU 3: 2.5bcm
H 2 S 450ppm: LPG 95%
Oil treatment
facility (OTF)
400kt
Storage
5km 3
Storage
25km 3
Storage
10km 3
3km 3
/d
Water injection
41Mwh
Power generation
48m 3
/h
Low-pressure system
1,200km 3
/d
Gas lift
Sulphur Recovery Unit
and Incinerator
In 2024, modifications on the Sulphur
Recovery Unit to handle higher H2S levels,
necessary for processing third-party gas
like Ural O&G have been completed. This
enables H2S processing using either the
direct oxidation or Claus process.
In parallel cracks at various heights of the
62-meter incinerator chimney identified in
2023 by drone inspection were repaired.
Gas
Oil
Oil
Dry gas
LPG
Stabilised condensate
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 33 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
The gas-fired power generation plant is
linked to the GTF and has an electrical
power output capacity of 26 MW. The
generated capacity of the plant is sufficient
to meet the existing and the maximum
future need. Backup generation capacity of
up to 15 MW is available at the processing
facilities.
Storage facilities
Nostrum has over 35,000 cubic meters of
storage capacity for liquids at its field site
and rail loading terminal.
Gas pipeline
Nostrum has its own 17 km dry gas pipeline
which is linked to the Orenburg-Novopskov
gas pipeline. The pipeline has sufficient
capacity to export the entire GTF maximum
production capacity dry gas volumes.
Liquids pipeline
Nostrum has its own 120 km liquids
pipeline that runs from the field to the
Company’s rail loading terminal in Beles
(near Uralsk). The pipeline has a maximum
daily throughput capacity of 3,500 t/d.
Rail Loading Terminal
Nostrum has its own automated rail loading
terminal at Beles, located near the city of
Uralsk, that receives all produced crude oil
and condensate and has a daily capacity of
5,000 t/d.
KTO pipeline connection
Nostrum has constructed a secondary
crude oil pipeline to enable export sales
from its rail loading terminal via the
Atyrau-Samara export pipeline operated by
KazTransOil (KTO). The connection to the
KTO pipeline has enhanced the Company’s
ability to maximise crude oil netbacks
through the commodity cycle.
Gas condensate
wells
Third-party
hydrocarbons
Crude oil wells
Gas treatment
facilities (GTF)
GTU 1&2: 1.7bcm
H 2 S 2,500ppm: LPG 65%
GTU 3: 2.5bcm
H 2 S 450ppm: LPG 95%
Oil treatment
facility (OTF)
400kt
Storage
5km 3
Storage
25km 3
Storage
10km 3
3km 3
/d
Water injection
41Mwh
Power generation
48m 3
/h
Low-pressure system
1,200km 3
/d
Gas lift
Sulphur Recovery Unit
and Incinerator
In 2024, modifications on the Sulphur
Recovery Unit to handle higher H2S levels,
necessary for processing third-party gas
like Ural O&G have been completed. This
enables H2S processing using either the
direct oxidation or Claus process.
In parallel cracks at various heights of the
62-meter incinerator chimney identified in
2023 by drone inspection were repaired.
Gas
Oil
Oil
Dry gas
LPG
Stabilised condensate
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 33 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
Risk management
RISK MANAGEMENT
The Group has a system of internal controls consisting
of its governance framework, segregation of authorities
and duties, various policies and procedures, training,
supervision and internal communications as well as
monitoring by senior management and the Board of
the planning and decision-making processes. The risk
management system is embedded in these components
of the system of internal controls in order to identify,
manage and report on the relevant risks that may impact
achievement of the Group’s strategic objectives,and
ensure compliance with applicable regulatory requirements.
Risk management
framework
The Board, supported by the Audit
Committee and senior management,
has ultimate responsibility for risk
management and internal control,
including responsibility for the
determination of the nature and extent of
the principal risks it is willing to accept to
achieve its strategic objectives, and for
ensuring that an appropriate risk-awareness
culture has been embedded throughout
the Group.
Operational day-to-day risks are inherent
in the various business functions and
processes of the Group. These are
categorised as business function risks and
are identified and managed by the relevant
staff and managers in the course of their
activities to ensure safety, compliance, and
efficiency. The members of the Senior
Management Team have overall
responsibility for managing such business
function risks aggregated at the level of
their functional responsibility, but can
delegate such responsibilities to their direct
reports. At the highest level the identified
risks are aggregated and categorised into
the following categories of principal risks
and uncertainties: strategic, operational,
financial, compliance and other, which are
respectively managed and monitored at
Board level.
Based on risk registers, related analysis
and discussions, senior management and
the Board periodically review previously
identified significant risks, update their
understanding of the likelihood of
occurrence and potential impact, and
identify potential new significant risks.
These significant risks are discussed in
more detail below in the Principal Risks
and Uncertainties section.
In 2024, the processes related to risk
management and internal control systems
were consistent with the UK Corporate
Governance Code and FRC Guidance on
Risk Management, Internal Control and
Related Financial and Business Reporting
issued in September 2014. The Board and
Audit Committee are aware of the
additional requirements related to the
risk management and internal control
framework as set out in the UK Corporate
Governance Code 2024.
During 2024 the Group did not have a
dedicated internal audit function, and
relied instead on third-party financial and
technical audits and ad-hoc audits/process
reviews performed by employees and
overseen by management with results
reported into the relevant Board
committee. The Board and Audit
Committee obtain assurance on
the effectiveness of the internal control
framework through: (a) upholding a regular,
detailed and timely system of internal
operational and financial reporting against
key performance targets, historical trends
and industry norms and the investigation
of any material deviations or failures, (b)
obtaining independent expert opinions
on matters of importance, including any
changes or disputes in the legal or
regulatory environment, (c) visits to
the company’s place of operations in
Kazakhstan and enquiries of local staff
and management, (d) reinforcement of
the internal system of Whistleblowing,
(e) evaluating all material investment
policies and proposals, and (f) seeking
external professional advice on the
company’s risk register and Board
assurance framework.
Following the end of 2024, the Board
continues to monitor closely internal
control over financial reporting and the
related party identification and disclosure
processes. More detailed information
can be found in the Risk management and
internal controls section of the Audit
Committee report on page 104.
Environmental, social and
governance (ESG) matters
ESG matters form an integral part of the
areas covered by the Group’s systems of
risk management and internal controls, and
the Board recognises their significance and
importance. Identified ESG risks and
related responses can be seen within
Operational, Climate Change and
Other risks in the “Principal risks and
uncertainties” disclosure on pages 36-42.
The Board receives appropriate information
for managing such risks. Management is
responsible for ensuring that systems of risk
management and internal control are in
place to effectively manage and monitor
energy risks and other ESG matters. More
detailed disclosure on the established
policies and procedures in these areas
can be found on pages 52-86.
Changes from prior-year
risk assessment
In 2024, the principal risks and uncertainties
managed and monitored by the Board and
senior management included most of the
risks for 2023 and for which the related risk
assessments did not change significantly.
The Board has carried out a review of
the effectiveness of the Company’s risk
management and internal controls systems,
covering all material controls including
financial, operational and compliance
controls. The Board has carried out a robust
assessment of the Company’s emerging
and principal risks.
34 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
RISK MANAGEMENT
The Group has a system of internal controls consisting
of its governance framework, segregation of authorities
and duties, various policies and procedures, training,
supervision and internal communications as well as
monitoring by senior management and the Board of
the planning and decision-making processes. The risk
management system is embedded in these components
of the system of internal controls in order to identify,
manage and report on the relevant risks that may impact
achievement of the Group’s strategic objectives,and
ensure compliance with applicable regulatory requirements.
Risk management
framework
The Board, supported by the Audit
Committee and senior management,
has ultimate responsibility for risk
management and internal control,
including responsibility for the
determination of the nature and extent of
the principal risks it is willing to accept to
achieve its strategic objectives, and for
ensuring that an appropriate risk-awareness
culture has been embedded throughout
the Group.
Operational day-to-day risks are inherent
in the various business functions and
processes of the Group. These are
categorised as business function risks and
are identified and managed by the relevant
staff and managers in the course of their
activities to ensure safety, compliance, and
efficiency. The members of the Senior
Management Team have overall
responsibility for managing such business
function risks aggregated at the level of
their functional responsibility, but can
delegate such responsibilities to their direct
reports. At the highest level the identified
risks are aggregated and categorised into
the following categories of principal risks
and uncertainties: strategic, operational,
financial, compliance and other, which are
respectively managed and monitored at
Board level.
Based on risk registers, related analysis
and discussions, senior management and
the Board periodically review previously
identified significant risks, update their
understanding of the likelihood of
occurrence and potential impact, and
identify potential new significant risks.
These significant risks are discussed in
more detail below in the Principal Risks
and Uncertainties section.
In 2024, the processes related to risk
management and internal control systems
were consistent with the UK Corporate
Governance Code and FRC Guidance on
Risk Management, Internal Control and
Related Financial and Business Reporting
issued in September 2014. The Board and
Audit Committee are aware of the
additional requirements related to the
risk management and internal control
framework as set out in the UK Corporate
Governance Code 2024.
During 2024 the Group did not have a
dedicated internal audit function, and
relied instead on third-party financial and
technical audits and ad-hoc audits/process
reviews performed by employees and
overseen by management with results
reported into the relevant Board
committee. The Board and Audit
Committee obtain assurance on
the effectiveness of the internal control
framework through: (a) upholding a regular,
detailed and timely system of internal
operational and financial reporting against
key performance targets, historical trends
and industry norms and the investigation
of any material deviations or failures, (b)
obtaining independent expert opinions
on matters of importance, including any
changes or disputes in the legal or
regulatory environment, (c) visits to
the company’s place of operations in
Kazakhstan and enquiries of local staff
and management, (d) reinforcement of
the internal system of Whistleblowing,
(e) evaluating all material investment
policies and proposals, and (f) seeking
external professional advice on the
company’s risk register and Board
assurance framework.
Following the end of 2024, the Board
continues to monitor closely internal
control over financial reporting and the
related party identification and disclosure
processes. More detailed information
can be found in the Risk management and
internal controls section of the Audit
Committee report on page 104.
Environmental, social and
governance (ESG) matters
ESG matters form an integral part of the
areas covered by the Group’s systems of
risk management and internal controls, and
the Board recognises their significance and
importance. Identified ESG risks and
related responses can be seen within
Operational, Climate Change and
Other risks in the “Principal risks and
uncertainties” disclosure on pages 36-42.
The Board receives appropriate information
for managing such risks. Management is
responsible for ensuring that systems of risk
management and internal control are in
place to effectively manage and monitor
energy risks and other ESG matters. More
detailed disclosure on the established
policies and procedures in these areas
can be found on pages 52-86.
Changes from prior-year
risk assessment
In 2024, the principal risks and uncertainties
managed and monitored by the Board and
senior management included most of the
risks for 2023 and for which the related risk
assessments did not change significantly.
The Board has carried out a review of
the effectiveness of the Company’s risk
management and internal controls systems,
covering all material controls including
financial, operational and compliance
controls. The Board has carried out a robust
assessment of the Company’s emerging
and principal risks.
34 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Risk management framework
Strategic goals/KPIs
Directors’ risks
register
Business function
risks
Reports
Board (supported by Audit Committee)
Roles and responsibilities (The Three Lines of Defence)
Senior management team
Internal
audit, process
audits and
investigations
7. Reviewing
risk
management
framework
6. Reporting
and monitoring
1. Risk identification
2. Risk assessment
3. Risk response (tolerate, treat,
transfer, terminate)
4. Resourcing controls
5. Reaction planning
Risk
management
Compliance,
QHSE, Security,
Controlling
Heads of
business
sub-functions
Risk management process
1st line of defence 2nd line of defence 3rd line of defence
The Board oversees the design and
implementation of systems of risk
management and internal control
and manages and reports on
principal risks.
The Senior Management Team
supports the Board in its oversight
and monitoring role and perform
management and reporting on the
level of Director’s risks.
Heads of business functions, being
the 1st line of defence, own and
manage operational risks related to
their respective area of activity.
2nd line of defence has a general
oversight function to ensure that the
risk management practices followed
are effective.
Internal audit, acting as the
3rd line of defence, provides
independent assurance over the
effectiveness of the systems of risk
management and internal control.
Principal risks and
uncertainties
Risk universe
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 35 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
Strategic goals/KPIs
Directors’ risks
register
Business function
risks
Reports
Board (supported by Audit Committee)
Roles and responsibilities (The Three Lines of Defence)
Senior management team
Internal
audit, process
audits and
investigations
7. Reviewing
risk
management
framework
6. Reporting
and monitoring
1. Risk identification
2. Risk assessment
3. Risk response (tolerate, treat,
transfer, terminate)
4. Resourcing controls
5. Reaction planning
Risk
management
Compliance,
QHSE, Security,
Controlling
Heads of
business
sub-functions
Risk management process
1st line of defence 2nd line of defence 3rd line of defence
The Board oversees the design and
implementation of systems of risk
management and internal control
and manages and reports on
principal risks.
The Senior Management Team
supports the Board in its oversight
and monitoring role and perform
management and reporting on the
level of Director’s risks.
Heads of business functions, being
the 1st line of defence, own and
manage operational risks related to
their respective area of activity.
2nd line of defence has a general
oversight function to ensure that the
risk management practices followed
are effective.
Internal audit, acting as the
3rd line of defence, provides
independent assurance over the
effectiveness of the systems of risk
management and internal control.
Principal risks and
uncertainties
Risk universe
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 35 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
RISK MANAGEMENT
Principal risks and uncertainties
GRI 201-2
Description of risk Risk management
Strategic risks
Geopolitical factors
The Group’s operations are exposed to risks associated with the
political and business environment in Kazakhstan, being the Group’s
sole country of commercial operations, as well as its neighbouring
countries.
Nostrum has historically benefited from its geo-strategic position in
the heart of an export corridor between Russia and markets to the
west of the Caspian, however, the Group remains exposed to the
risks of the ongoing economic and political impact on Russia of its
actions in Ukraine, being reliant on its transport routes and ports.
Ongoing severe sanctions and trade restrictions imposed by, among
others, the US, UK and EU on Russia, have increased the economic
and political uncertainty and may have a material adverse impact on
the Group’s business, results of operations, financial condition and
prospects.
Nostrum’s Senior Management Team is pro-actively engaged with key
stakeholders among state authorities to address and resolve any potential issues
at early stages. In addition, the Group endeavours to identify legislative changes
at early stages before their introduction and to the extent possible participate in
the relevant working groups engaged in development of such changes.
To mitigate geopolitical, regional and customer risks, the Group continues to
strengthen customer relationships through establishing long-term off-take
agreements whilst also looking at possibilities to geographically diversify its
customer portfolio.
The Group has implemented robust internal controls and procedures to ensure
compliance with international sanctions on Russian and Belarus individuals,
organisations and supplies of goods and services, including the evaluation of
counterparties and their banks, contract procedures, and liaising with external
legal advisers. The Group regularly updates lists of all persons/entities and
products sanctioned in order to ensure Nostrum does not enter into transactions
which violate applicable sanctions.
Product price volatilities
The Group’s operations and financial performance are exposed to
changes in the market prices for its products driven by external
business and political factors, which are outside the Group’s control.
Oil and gas prices are subject to volatility due to a variety of factors
beyond the Group’s control. Factors affecting crude oil prices
include supply and demand fundamentals, global geopolitical
events, production quotas set by OPEC and non-OPEC producers.
Since the domestic selling price of dry gas is directly dependent on
the price of crude oil and the price of oil is volatile, the Company
could also face volatility in the price of dry gas. Also, the Group
could be compelled by governmental authorities, to sell its oil,
condensate, LPG and gas domestically at prices determined by the
RoK Government, which could be significantly lower than prices
which the Group could otherwise achieve.
Lower oil and gas prices may reduce the economic viability of the
Group’s operations and proposed operations and materially
adversely affect its business, results of operations, financial
condition and prospects. In particular, the Group’s ability to produce
economically from the Chinarevskoye Field or any prospective fields
will be determined, in large part, by the difference between the
revenue received for its products and the operating costs, taxation
costs, royalties and costs incurred in transporting and selling those
products.
The Group quarterly revisits the product price assumptions used in its short-
term, medium-term and long-term financial models, and performs stress testing
of such forecasts to fluctuations in product prices and these are monitored by
senior management and the Board.
The Group continues to take prudent actions to protect liquidity, including
identifying reductions in operating costs, general and administrative, and selling
and transportation costs that could be implemented without having a negative
impact on production or operations in the going concern period.
Senior management constantly monitors the Group’s exposure to foreign
currency exchange rate changes and makes plans for necessary measures. In
addition, the Group maintains its relationships with multiple financial institutions
should it need to implement commodity price hedging contracts. No such
contracts were entered into in 2024.
36 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Principal risks and uncertainties
GRI 201-2
Description of risk Risk management
Strategic risks
Geopolitical factors
The Group’s operations are exposed to risks associated with the
political and business environment in Kazakhstan, being the Group’s
sole country of commercial operations, as well as its neighbouring
countries.
Nostrum has historically benefited from its geo-strategic position in
the heart of an export corridor between Russia and markets to the
west of the Caspian, however, the Group remains exposed to the
risks of the ongoing economic and political impact on Russia of its
actions in Ukraine, being reliant on its transport routes and ports.
Ongoing severe sanctions and trade restrictions imposed by, among
others, the US, UK and EU on Russia, have increased the economic
and political uncertainty and may have a material adverse impact on
the Group’s business, results of operations, financial condition and
prospects.
Nostrum’s Senior Management Team is pro-actively engaged with key
stakeholders among state authorities to address and resolve any potential issues
at early stages. In addition, the Group endeavours to identify legislative changes
at early stages before their introduction and to the extent possible participate in
the relevant working groups engaged in development of such changes.
To mitigate geopolitical, regional and customer risks, the Group continues to
strengthen customer relationships through establishing long-term off-take
agreements whilst also looking at possibilities to geographically diversify its
customer portfolio.
The Group has implemented robust internal controls and procedures to ensure
compliance with international sanctions on Russian and Belarus individuals,
organisations and supplies of goods and services, including the evaluation of
counterparties and their banks, contract procedures, and liaising with external
legal advisers. The Group regularly updates lists of all persons/entities and
products sanctioned in order to ensure Nostrum does not enter into transactions
which violate applicable sanctions.
Product price volatilities
The Group’s operations and financial performance are exposed to
changes in the market prices for its products driven by external
business and political factors, which are outside the Group’s control.
Oil and gas prices are subject to volatility due to a variety of factors
beyond the Group’s control. Factors affecting crude oil prices
include supply and demand fundamentals, global geopolitical
events, production quotas set by OPEC and non-OPEC producers.
Since the domestic selling price of dry gas is directly dependent on
the price of crude oil and the price of oil is volatile, the Company
could also face volatility in the price of dry gas. Also, the Group
could be compelled by governmental authorities, to sell its oil,
condensate, LPG and gas domestically at prices determined by the
RoK Government, which could be significantly lower than prices
which the Group could otherwise achieve.
Lower oil and gas prices may reduce the economic viability of the
Group’s operations and proposed operations and materially
adversely affect its business, results of operations, financial
condition and prospects. In particular, the Group’s ability to produce
economically from the Chinarevskoye Field or any prospective fields
will be determined, in large part, by the difference between the
revenue received for its products and the operating costs, taxation
costs, royalties and costs incurred in transporting and selling those
products.
The Group quarterly revisits the product price assumptions used in its short-
term, medium-term and long-term financial models, and performs stress testing
of such forecasts to fluctuations in product prices and these are monitored by
senior management and the Board.
The Group continues to take prudent actions to protect liquidity, including
identifying reductions in operating costs, general and administrative, and selling
and transportation costs that could be implemented without having a negative
impact on production or operations in the going concern period.
Senior management constantly monitors the Group’s exposure to foreign
currency exchange rate changes and makes plans for necessary measures. In
addition, the Group maintains its relationships with multiple financial institutions
should it need to implement commodity price hedging contracts. No such
contracts were entered into in 2024.
36 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Description of risk
Risk management
Strategic risks continued
Filling the spare gas processing capacity
The Chinarevskoye field is a mature declining asset with a proved
and probable reserves base at a level that will produce volumes of
hydrocarbons including raw gas sufficient to utilise less than 15
percent of capacity available at the Group’s gas treatment facilities,
which have a combined 4.2 billion cubic meters capacity per annum.
The Company is therefore reliant on acquiring and developing
nearby assets with significant resource potential and/or processing
third party gas through its processing facilities to continue to
produce free cash flows and build sufficient cash reserves to repay
future indebtedness. The ability to negotiate and secure these
strategic acquisitions is highly uncertain and the ability to fund the
development of such projects, the costs of which may be substantial
and require external funding, may not materialise.
Oil and gas exploration and production activities are capital
intensive and subject to financing limitations and inherent
uncertainty in their outcome. Further, significant expenditure is
required to establish the extent of oil and gas reserves through
seismic re-processing and mapping, other surveys as well as drilling.
Therefore, there can be no certainty that further commercial
quantities of oil and gas will be discovered at Chinarevskoye or
acquired by the Group to enable it to utilise the spare capacity
in its treatment facilities.
The Group’s mixed-asset strategy is aimed at diversification of its sources of feed
stock to the processing facilities, which is expected to provide the Group with an
opportunity to gain from expanding the use of available capacities, technological
resources and human capital, and ultimately benefit from its under utilised
infrastructure.
The GTU-3 plant was upgraded and prepared to receive future gas supplies.
Throughout 2024, GTU 1-2-3 gas processing facilities operated simultaneously,
processing inlet gas from the Chinarevskoe field and Ural O&G gas from the
Rozhkovskoe field. By implementing GTU-3’s deep gas treatment process
(utilising a Turbo Expander), LPG recovery was substantially increased. The
flexibility to switch operations between GTU 1-2-3 units improved the overall
uptime of the processing facility. Yearly maintenance was conducted without the
need for a full production shutdown.
The Sulphur Recovery Unit upgrade was completed in June 2024. With this
enhancement, the Sulphur recovery facility can operate allowing for the
treatment of inlet gases with varying H2S concentrations. The extension of the
granulated Sulphur storage area is in progress and will be completed in 2025.
The two-well appraisal operations were completed at Stepnoy Leopard Fields,
and significant data had been collected. Based on these results the Company
made a FID for the initial field development phase of the fields and issued the
CPR, according to which the Group estimated 138 mmboe proved plus probable
(2P) gross reserves as at 1 January 2024.
Also, the Group has several additional area-wide opportunities under review that
may serve to strengthen the Group’s upstream and midstream portfolio in the
coming years.
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 37 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
Strategic risks continued
Filling the spare gas processing capacity
The Chinarevskoye field is a mature declining asset with a proved
and probable reserves base at a level that will produce volumes of
hydrocarbons including raw gas sufficient to utilise less than 15
percent of capacity available at the Group’s gas treatment facilities,
which have a combined 4.2 billion cubic meters capacity per annum.
The Company is therefore reliant on acquiring and developing
nearby assets with significant resource potential and/or processing
third party gas through its processing facilities to continue to
produce free cash flows and build sufficient cash reserves to repay
future indebtedness. The ability to negotiate and secure these
strategic acquisitions is highly uncertain and the ability to fund the
development of such projects, the costs of which may be substantial
and require external funding, may not materialise.
Oil and gas exploration and production activities are capital
intensive and subject to financing limitations and inherent
uncertainty in their outcome. Further, significant expenditure is
required to establish the extent of oil and gas reserves through
seismic re-processing and mapping, other surveys as well as drilling.
Therefore, there can be no certainty that further commercial
quantities of oil and gas will be discovered at Chinarevskoye or
acquired by the Group to enable it to utilise the spare capacity
in its treatment facilities.
The Group’s mixed-asset strategy is aimed at diversification of its sources of feed
stock to the processing facilities, which is expected to provide the Group with an
opportunity to gain from expanding the use of available capacities, technological
resources and human capital, and ultimately benefit from its under utilised
infrastructure.
The GTU-3 plant was upgraded and prepared to receive future gas supplies.
Throughout 2024, GTU 1-2-3 gas processing facilities operated simultaneously,
processing inlet gas from the Chinarevskoe field and Ural O&G gas from the
Rozhkovskoe field. By implementing GTU-3’s deep gas treatment process
(utilising a Turbo Expander), LPG recovery was substantially increased. The
flexibility to switch operations between GTU 1-2-3 units improved the overall
uptime of the processing facility. Yearly maintenance was conducted without the
need for a full production shutdown.
The Sulphur Recovery Unit upgrade was completed in June 2024. With this
enhancement, the Sulphur recovery facility can operate allowing for the
treatment of inlet gases with varying H2S concentrations. The extension of the
granulated Sulphur storage area is in progress and will be completed in 2025.
The two-well appraisal operations were completed at Stepnoy Leopard Fields,
and significant data had been collected. Based on these results the Company
made a FID for the initial field development phase of the fields and issued the
CPR, according to which the Group estimated 138 mmboe proved plus probable
(2P) gross reserves as at 1 January 2024.
Also, the Group has several additional area-wide opportunities under review that
may serve to strengthen the Group’s upstream and midstream portfolio in the
coming years.
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 37 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
RISK MANAGEMENT
Description of risk Risk management
Operational risks
Oil and gas reserves and production
Estimating the value and quantity of economically recoverable oil
and natural gas reserves and resources, and consequently the rates
of production, necessarily depend upon a number of variables and
assumptions, such as ultimate reserves recovery, interpretation of
geological and geophysical data, marketability of oil and gas, future
product prices, operating costs, development and production costs
and workover and remedial costs, all of which may vary from actual
results, which would affect the Group’s financial performance and
achievement of strategic objectives. The re-classifications of
significant amounts of reserves from 2P to contingent resources in
2020-2021 were the result of crystallising of such risks.
Even if the Group is able to discover or acquire commercial
quantities of oil and gas in the future, there can be no assurance that
these will be commercially developed. Appraisal and development
activities involving the drilling of wells across a field may be
unpredictable and may not result in the outcome planned, targeted
or predicted, as only by extensive testing can the properties of an
entire field be more fully understood.
Finally, given that the Chinarevskoye reservoir is a mature and
declining asset, the Group has been actively performing well
workovers and interventions to reduce the rate of decline of the
reservoirs. Most of the scope planned under the drilling programme
was executed on time and within budget in 2024. Well No.301
drilling was completed in April 2024 and put in production in May
2024, producing from the lower target interval (Devonian). The
upper target interval (Carboniferous) is planned to be perforated in
2025. Such activities, as well as construction, operation and
maintenance of surface facilities, are subject to various risks,
including the availability of adequate services, technologies and
expertise, which may adversely affect the fulfilment of the Group’s
strategic objectives.
The Group has a department of geologists and reservoir engineers who perform
periodic assessments of its oil and gas reserves in accordance with international
standards on reserve estimations and prepare production forecasting using
advanced exploration risk and resource assessment systems. The results of the
assessments are audited periodically by the Group’s independent reserves
consultants.
For drilling and well workover activities, the Group engages skilled personnel
and leading service suppliers, as well as employing internationally accredited
operations and cost monitoring systems, based on which management oversees
the work progress. The Group continued its well workover and intervention
programme in 2024 to minimise the production decline and this will be
continued in 2025 as the field gets older and equipment requiring more
regular maintenance.
For 2025, the Company’s Board of Directors have approved further drilling in the
Chinarevskoye field, in line with the licence commitments and field development
plan of the Company’s subsidiary Zhaikmunai LLP.
The gas lift expansion project, completed during 2023, continues to show its
effectiveness as two more wells were connected to the gas lift system in 2024.
Maintenance of wells and surface facilities is scheduled in advance, in
accordance with technical requirements, and all necessary preparations are
performed in a timely manner ensuring a high quality of work. In addition, the
Group has emergency response and disaster recovery plans in place and
periodically conducts necessary training and testing procedures.
Cybersecurity risks
Nostrum may be vulnerable to the unauthorised or inappropriate
access to data, or the unlawful use, disclosure, disruption, deletion,
corruption, modification, inspection, recording, or devaluation of
information. Such cybersecurity failures may significantly adversely
affect the Group’s operations and financial results through
disruptions, shutdowns and delays in production and other
activities.
The Group uses several dashboards such as MS Secure and MS Compliance,
which monitor security and compliance, and also help to identify areas where
security might be enhanced. At the start of employment each new employee is
briefed on the Group’s Information Security Policy and signs a confidentiality
agreement. All mailboxes and data are placed on Microsoft servers with
appropriate levels of protection. Passwords have complexity requirement and
double authorisation has been introduced for most users. All data traffic, servers
and computers are subject to scanning and protection by anti-virus software.
Physical access to data storage is restricted to authorised personnel.
Principal risks and uncertainties continued
38 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Description of risk Risk management
Operational risks
Oil and gas reserves and production
Estimating the value and quantity of economically recoverable oil
and natural gas reserves and resources, and consequently the rates
of production, necessarily depend upon a number of variables and
assumptions, such as ultimate reserves recovery, interpretation of
geological and geophysical data, marketability of oil and gas, future
product prices, operating costs, development and production costs
and workover and remedial costs, all of which may vary from actual
results, which would affect the Group’s financial performance and
achievement of strategic objectives. The re-classifications of
significant amounts of reserves from 2P to contingent resources in
2020-2021 were the result of crystallising of such risks.
Even if the Group is able to discover or acquire commercial
quantities of oil and gas in the future, there can be no assurance that
these will be commercially developed. Appraisal and development
activities involving the drilling of wells across a field may be
unpredictable and may not result in the outcome planned, targeted
or predicted, as only by extensive testing can the properties of an
entire field be more fully understood.
Finally, given that the Chinarevskoye reservoir is a mature and
declining asset, the Group has been actively performing well
workovers and interventions to reduce the rate of decline of the
reservoirs. Most of the scope planned under the drilling programme
was executed on time and within budget in 2024. Well No.301
drilling was completed in April 2024 and put in production in May
2024, producing from the lower target interval (Devonian). The
upper target interval (Carboniferous) is planned to be perforated in
2025. Such activities, as well as construction, operation and
maintenance of surface facilities, are subject to various risks,
including the availability of adequate services, technologies and
expertise, which may adversely affect the fulfilment of the Group’s
strategic objectives.
The Group has a department of geologists and reservoir engineers who perform
periodic assessments of its oil and gas reserves in accordance with international
standards on reserve estimations and prepare production forecasting using
advanced exploration risk and resource assessment systems. The results of the
assessments are audited periodically by the Group’s independent reserves
consultants.
For drilling and well workover activities, the Group engages skilled personnel
and leading service suppliers, as well as employing internationally accredited
operations and cost monitoring systems, based on which management oversees
the work progress. The Group continued its well workover and intervention
programme in 2024 to minimise the production decline and this will be
continued in 2025 as the field gets older and equipment requiring more
regular maintenance.
For 2025, the Company’s Board of Directors have approved further drilling in the
Chinarevskoye field, in line with the licence commitments and field development
plan of the Company’s subsidiary Zhaikmunai LLP.
The gas lift expansion project, completed during 2023, continues to show its
effectiveness as two more wells were connected to the gas lift system in 2024.
Maintenance of wells and surface facilities is scheduled in advance, in
accordance with technical requirements, and all necessary preparations are
performed in a timely manner ensuring a high quality of work. In addition, the
Group has emergency response and disaster recovery plans in place and
periodically conducts necessary training and testing procedures.
Cybersecurity risks
Nostrum may be vulnerable to the unauthorised or inappropriate
access to data, or the unlawful use, disclosure, disruption, deletion,
corruption, modification, inspection, recording, or devaluation of
information. Such cybersecurity failures may significantly adversely
affect the Group’s operations and financial results through
disruptions, shutdowns and delays in production and other
activities.
The Group uses several dashboards such as MS Secure and MS Compliance,
which monitor security and compliance, and also help to identify areas where
security might be enhanced. At the start of employment each new employee is
briefed on the Group’s Information Security Policy and signs a confidentiality
agreement. All mailboxes and data are placed on Microsoft servers with
appropriate levels of protection. Passwords have complexity requirement and
double authorisation has been introduced for most users. All data traffic, servers
and computers are subject to scanning and protection by anti-virus software.
Physical access to data storage is restricted to authorised personnel.
Principal risks and uncertainties continued
38 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Description of risk
Risk management
Environmental, Social and Governance risks
Risks of incidents, including risk of explosion
The Group’s operations are subject to hazards and risks common in
its industry, including encountering unusual or unexpected rock
formations or geological pressures, fires, explosions or power
shortages, equipment failures or accidents, premature declines in
reservoirs, blowouts, uncontrollable flows of oil, gas or well fluids,
or water cut levels, pollution and other environmental risks.
Failure to prevent or adequately mitigate these hazards can have
a broad range of results, including, but not limited to, injury of
employees or local residents, a partial or total shutdown of
operations, significant damage to equipment, suspension or
withdrawal of licences and relevant sanctions. Any of the above
could materially and adversely affect the Group’s business, results
of operations, financial condition and prospects.
It should also be noted that the legal framework for operational
safety is not yet fully developed in Kazakhstan and given the
changing nature of environmental regulations, there is a risk that
the Group will not be in full compliance with all such regulations at
all times.
The Group’s QHSE policies are periodically revised to ensure compliance with
changes and new requirements in this area. Periodic training on the requirements
of policies and regulations is held for employees. Nostrum’s operations are
based on the five QHSE pillars: HSE leadership; rigorous incident investigation;
process safety-critical elements identified and maintained; contractor HSE
management; and environment and climate change.
Monthly QHSE reports are issued to communicate HSE performance.
Management KPIs include lost time injury frequency, road traffic injury frequency,
total recordable injury frequency and numbers of Hazard Observation Cards
submitted as well as managing reduction of GHG emissions from our operations.
Through the system of Hazard Observation Cards, employees and contractors
report any unsafe conditions observed in the workplace, which helps to ensure
their awareness of safe working conditions at all times. All incidents are
investigated, their causes identified and corrective action plans developed.
There is a classification of equipment as critical or non-critical. Safety critical
elements are devices, equipment or systems that are required to ensure process
conditions are maintained within safe operating limits, or the purpose of which is
to prevent malfunctioning. For example, devices are installed at well-sites to
automatically close the wells in the case of shutdown, preventing blow-down
by flaring.
Contractor HSE performance is managed by identifying and mitigating risks,
setting HSE performance criteria, monitoring, auditing and reporting HSE
performance, and subsequently using this information for continuous
development and feedback into the process of contractor selection.
Governance risks
Nostrum adheres to UK corporate governance and reporting
requirements. Governance risk factors are usually related to board
composition and structure, executive remuneration, internal controls
and risk management framework, corporate policies and
procedures, risks of corruption and bribery, and others.
Lack of adequate controls and policies, or a failure of those to
operate effectively, could lead to loss of company resources,
non-compliance with regulations, and respective significant fines,
penalties, as well as reputational damage.
As described on pages 96-98, the Group has established a robust governance
framework which covers all aspects of the Group’s activities through respective
Board committees and functional teams under senior management. Although
Nostrum generally complies with the “comply or explain” provisions of the UK
corporate governance code, during the reporting period the composition of the
Board and its committees did not comply with certain provisions of the code,
primarily due to the resignation of an independent non-executive director from
the Board in 2024. As a result, Nostrum is engaged in an active search to recruit
another independent director onto the Board, and another director has stepped
in as Acting Chair of the Nomination & Governance Committee to ensure
continuity of leadership of such committee and distribute the committee
workload during the transition period. Nostrum’s other independent non-
executive directors remain active in various Board committees.
The corporate governance framework is supported by an extensive range of
policies and procedures covering numerous areas including delegation of
authority, inside information disclosure, related party transactions, anti-
corruption and bribery, anti-facilitation of tax evasion and whistle-blowing, as
described on page 98 and various other policies and practices related to social
and environmental matters described across other sections of the report.
Such policies and procedures are designed and implemented to ensure that
all required compliance obligations are met.
Environmental risks
i) Emissions, effluents, and waste management risks
The Group’s operations are subject to environmental risks inherent
in oil and gas exploration and production industries. Examples of
environmental risks include risks stemming from more intense
extreme weather events, rising energy intensity in the oil and gas
industry, the changing regulatory landscape, the risk of fugitive
emissions and climate change policies driving down demand.
Compliance with environmental regulations may make it necessary
for the Group, at substantial cost, to undertake measures in
connection with the storage, handling, transportation, treatment or
disposal of hazardous materials and waste and the remediation of
contamination.
In addition, the legal framework for environmental protection and
operational safety is not yet fully developed in Kazakhstan. Stricter
environmental requirements may be adopted in the near future, and
the environmental authorities may move towards a stricter
interpretation of existing legislation. The costs associated with
compliance with such regulations could have a material adverse
effect on the Group’s business, results of operations, financial
condition and prospects.
Nostrum actively manages emissions, effluents, and waste-related risks through
related policies, targeted initiatives, and established governance framework.
Oversight is provided by the CEO through the HSE and ESG committees, with
regular reporting to the Board. GHG emissions management is one of the KPIs,
with efforts focused on improving energy efficiency, minimising flaring and leaks,
and monitoring emissions.
The company reports Scope 1, 2, and disaggregated Scope 3 emissions for
transparency. Key initiatives include energy efficiency improvements, waste
management, GHG emissions, renewable energy integration, methane
mitigation, and an oil spill response plan.
The Sulphur recovery unit reduces harmful emissions turning waste into a
saleable by-product.
Environmental management is further strengthened by emergency response
plans, an energy policy, and strict permit compliance. Nostrum annually reports
to the CDP Climate Questionnaire, and earned a score of “B” in February 2025,
demonstrating its commitment to environmental responsibility.
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 39 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
Environmental, Social and Governance risks
Risks of incidents, including risk of explosion
The Group’s operations are subject to hazards and risks common in
its industry, including encountering unusual or unexpected rock
formations or geological pressures, fires, explosions or power
shortages, equipment failures or accidents, premature declines in
reservoirs, blowouts, uncontrollable flows of oil, gas or well fluids,
or water cut levels, pollution and other environmental risks.
Failure to prevent or adequately mitigate these hazards can have
a broad range of results, including, but not limited to, injury of
employees or local residents, a partial or total shutdown of
operations, significant damage to equipment, suspension or
withdrawal of licences and relevant sanctions. Any of the above
could materially and adversely affect the Group’s business, results
of operations, financial condition and prospects.
It should also be noted that the legal framework for operational
safety is not yet fully developed in Kazakhstan and given the
changing nature of environmental regulations, there is a risk that
the Group will not be in full compliance with all such regulations at
all times.
The Group’s QHSE policies are periodically revised to ensure compliance with
changes and new requirements in this area. Periodic training on the requirements
of policies and regulations is held for employees. Nostrum’s operations are
based on the five QHSE pillars: HSE leadership; rigorous incident investigation;
process safety-critical elements identified and maintained; contractor HSE
management; and environment and climate change.
Monthly QHSE reports are issued to communicate HSE performance.
Management KPIs include lost time injury frequency, road traffic injury frequency,
total recordable injury frequency and numbers of Hazard Observation Cards
submitted as well as managing reduction of GHG emissions from our operations.
Through the system of Hazard Observation Cards, employees and contractors
report any unsafe conditions observed in the workplace, which helps to ensure
their awareness of safe working conditions at all times. All incidents are
investigated, their causes identified and corrective action plans developed.
There is a classification of equipment as critical or non-critical. Safety critical
elements are devices, equipment or systems that are required to ensure process
conditions are maintained within safe operating limits, or the purpose of which is
to prevent malfunctioning. For example, devices are installed at well-sites to
automatically close the wells in the case of shutdown, preventing blow-down
by flaring.
Contractor HSE performance is managed by identifying and mitigating risks,
setting HSE performance criteria, monitoring, auditing and reporting HSE
performance, and subsequently using this information for continuous
development and feedback into the process of contractor selection.
Governance risks
Nostrum adheres to UK corporate governance and reporting
requirements. Governance risk factors are usually related to board
composition and structure, executive remuneration, internal controls
and risk management framework, corporate policies and
procedures, risks of corruption and bribery, and others.
Lack of adequate controls and policies, or a failure of those to
operate effectively, could lead to loss of company resources,
non-compliance with regulations, and respective significant fines,
penalties, as well as reputational damage.
As described on pages 96-98, the Group has established a robust governance
framework which covers all aspects of the Group’s activities through respective
Board committees and functional teams under senior management. Although
Nostrum generally complies with the “comply or explain” provisions of the UK
corporate governance code, during the reporting period the composition of the
Board and its committees did not comply with certain provisions of the code,
primarily due to the resignation of an independent non-executive director from
the Board in 2024. As a result, Nostrum is engaged in an active search to recruit
another independent director onto the Board, and another director has stepped
in as Acting Chair of the Nomination & Governance Committee to ensure
continuity of leadership of such committee and distribute the committee
workload during the transition period. Nostrum’s other independent non-
executive directors remain active in various Board committees.
The corporate governance framework is supported by an extensive range of
policies and procedures covering numerous areas including delegation of
authority, inside information disclosure, related party transactions, anti-
corruption and bribery, anti-facilitation of tax evasion and whistle-blowing, as
described on page 98 and various other policies and practices related to social
and environmental matters described across other sections of the report.
Such policies and procedures are designed and implemented to ensure that
all required compliance obligations are met.
Environmental risks
i) Emissions, effluents, and waste management risks
The Group’s operations are subject to environmental risks inherent
in oil and gas exploration and production industries. Examples of
environmental risks include risks stemming from more intense
extreme weather events, rising energy intensity in the oil and gas
industry, the changing regulatory landscape, the risk of fugitive
emissions and climate change policies driving down demand.
Compliance with environmental regulations may make it necessary
for the Group, at substantial cost, to undertake measures in
connection with the storage, handling, transportation, treatment or
disposal of hazardous materials and waste and the remediation of
contamination.
In addition, the legal framework for environmental protection and
operational safety is not yet fully developed in Kazakhstan. Stricter
environmental requirements may be adopted in the near future, and
the environmental authorities may move towards a stricter
interpretation of existing legislation. The costs associated with
compliance with such regulations could have a material adverse
effect on the Group’s business, results of operations, financial
condition and prospects.
Nostrum actively manages emissions, effluents, and waste-related risks through
related policies, targeted initiatives, and established governance framework.
Oversight is provided by the CEO through the HSE and ESG committees, with
regular reporting to the Board. GHG emissions management is one of the KPIs,
with efforts focused on improving energy efficiency, minimising flaring and leaks,
and monitoring emissions.
The company reports Scope 1, 2, and disaggregated Scope 3 emissions for
transparency. Key initiatives include energy efficiency improvements, waste
management, GHG emissions, renewable energy integration, methane
mitigation, and an oil spill response plan.
The Sulphur recovery unit reduces harmful emissions turning waste into a
saleable by-product.
Environmental management is further strengthened by emergency response
plans, an energy policy, and strict permit compliance. Nostrum annually reports
to the CDP Climate Questionnaire, and earned a score of “B” in February 2025,
demonstrating its commitment to environmental responsibility.
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 39 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
RISK MANAGEMENT
Description of risk Risk management
Environmental, Social and Governance risks continued
Environmental risks continued
ii) Water source management risks
Nostrum as an Oil & Gas Exploration and Production company
requires significant water use, with activities like hydraulic fracturing
and enhanced hydrocarbon recovery permanently removing water
from the cycle. Growing water scarcity, climate change, and
competing demands increase risks, potentially leading to business
disruptions, regulatory restrictions, and higher costs. Companies
must adopt best practices such as water recycling, alternative
sourcing, and treatment technologies to enhance sustainability,
compliance, and resilience.
Nostrum takes a proactive approach to managing water-related risks, ensuring
sustainable water use and compliance with regulations through a structured
environmental and water stewardship framework. The company has a well-
established Health Safety and Environment Policy that emphasises stakeholder
engagement, raising environmental awareness, and continuous improvement
through an Environmental Management System.
Water management is a key focus, with a dedicated Water Management Policy
in place. Effluent management is regularly monitored, with initiatives aimed
at reducing, reusing, and recycling wastewater. Any incidents are thoroughly
investigated, and corrective measures are implemented as needed.
Responsibility for managing water-related risks is assigned at both the senior
management and executive levels, reinforcing the company’s commitment to
responsible water management and ensuring that risk assessment outcomes
are integrated into business strategy. The company recognises the physical,
regulatory, and reputational risks linked to water use and takes them into account
when making strategic decisions.
Nostrum also participates in the annual CDP Water questionnaire and received
a B score in February 2025, reflecting strong environmental management.
Key initiatives include assessing the quality of injection water, improving water
treatment processes, and maintaining Emergency Response Plans to mitigate
potential risks.
iii) Climate-related risks
Nostrum faces climate-related transition and physical risks, including
regulatory, technological, market, and reputational challenges.
Stricter emissions regulations, carbon pricing, and evolving policies
may increase costs and compliance burdens, impacting
competitiveness and financing. Technological shifts require high
investment, with risks of stranded assets, while reputational
pressures could affect stakeholder trust. Kazakhstan’s carbon market
seeks to systematically transition businesses to low-carbon
technologies by gradually reducing free GHG emission quotas and
advancing the emissions trading system. Kazakhstan aims to achieve
carbon neutrality by 2060 and acknowledges the importance of
transitioning from fossil fuels to alternative fuels and energy sources.
However, significant uncertainty remains regarding the rate of quota
reductions, carbon pricing, and other regulatory mechanisms,
making it challenging to establish reliable assumptions for project
planning and investment decisions.
Additionally, acute and chronic physical risks such as floods, extreme
temperatures, and severe weather may disrupt operations, damage
infrastructure, and raise costs. Failure to adapt could lead to financial
penalties, operational constraints, and reduced long-term viability.
Nostrum manages climate risks through strategic planning, compliance, and
operational resilience. To address physical risks, the company integrates climate
considerations into risk assessments and strengthens emergency response
measures. For policy and legal risks, it ensures compliance through regular
monitoring and legal oversight. To mitigate market risks, Nostrum diversifies into
gas processing and optimises operations for efficiency. For technology risks, it
invests in digitalisation, automation, and emission management. To manage
reputational risks, the company maintains transparent climate disclosures and
engages with stakeholders to align with regulatory and social expectations.
For a more detailed description of the climate-related risks and the company’s
strategy in this regard, please see the section of the Annual Report on Climate-
related Financial Disclosures.
iv) Land use and biodiversity impact risks
Nostrum’s operations, like much of the oil and gas industry, can
impact biodiversity through habitat disruption, land use, and
infrastructure development. While individual well sites may be small,
the combined effect of multiple sites, roads, and pipelines can put
pressure on local ecosystems and wildlife. In some areas, this could
contribute to species population declines, leading to tighter
regulations and higher compliance costs. Additionally, improper
handling of hazardous materials, even in small amounts, can harm
wildlife, attract media attention, and result in fines. As environmental
expectations grow, Nostrum must actively manage land use and
biodiversity risks to minimise its impact and ensure long-term
sustainability.
Nostrum actively manages land use and biodiversity risks through structured
policies, environmental programmes, and responsible operational practices.
Biodiversity considerations are integrated into the company’s Environmental
Management System, Health, Safety, and Environment Policy, and Waste
Management practices to minimise environmental impact. Sustainable site
closure and rehabilitation ensure that land affected by operations is responsibly
restored. The company has biodiversity policies and programmes in place, with
management plans designed for priority areas, following best practices to
mitigate environmental impact.
Nostrum engages with local communities, biodiversity experts, and stakeholders
to assess and manage risks effectively. There is a formal commitment to
minimising biodiversity impact, with initiatives aimed at achieving no net loss in
operational areas. Biodiversity management is overseen at the managerial level
to ensure accountability and alignment with sustainability goals. The company
regularly identifies biodiversity priority areas and reports on initiatives,
mitigation efforts, and environmental performance to maintain transparency
and drive continuous improvement.
Principal risks and uncertainties continued
40 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Description of risk Risk management
Environmental, Social and Governance risks continued
Environmental risks continued
ii) Water source management risks
Nostrum as an Oil & Gas Exploration and Production company
requires significant water use, with activities like hydraulic fracturing
and enhanced hydrocarbon recovery permanently removing water
from the cycle. Growing water scarcity, climate change, and
competing demands increase risks, potentially leading to business
disruptions, regulatory restrictions, and higher costs. Companies
must adopt best practices such as water recycling, alternative
sourcing, and treatment technologies to enhance sustainability,
compliance, and resilience.
Nostrum takes a proactive approach to managing water-related risks, ensuring
sustainable water use and compliance with regulations through a structured
environmental and water stewardship framework. The company has a well-
established Health Safety and Environment Policy that emphasises stakeholder
engagement, raising environmental awareness, and continuous improvement
through an Environmental Management System.
Water management is a key focus, with a dedicated Water Management Policy
in place. Effluent management is regularly monitored, with initiatives aimed
at reducing, reusing, and recycling wastewater. Any incidents are thoroughly
investigated, and corrective measures are implemented as needed.
Responsibility for managing water-related risks is assigned at both the senior
management and executive levels, reinforcing the company’s commitment to
responsible water management and ensuring that risk assessment outcomes
are integrated into business strategy. The company recognises the physical,
regulatory, and reputational risks linked to water use and takes them into account
when making strategic decisions.
Nostrum also participates in the annual CDP Water questionnaire and received
a B score in February 2025, reflecting strong environmental management.
Key initiatives include assessing the quality of injection water, improving water
treatment processes, and maintaining Emergency Response Plans to mitigate
potential risks.
iii) Climate-related risks
Nostrum faces climate-related transition and physical risks, including
regulatory, technological, market, and reputational challenges.
Stricter emissions regulations, carbon pricing, and evolving policies
may increase costs and compliance burdens, impacting
competitiveness and financing. Technological shifts require high
investment, with risks of stranded assets, while reputational
pressures could affect stakeholder trust. Kazakhstan’s carbon market
seeks to systematically transition businesses to low-carbon
technologies by gradually reducing free GHG emission quotas and
advancing the emissions trading system. Kazakhstan aims to achieve
carbon neutrality by 2060 and acknowledges the importance of
transitioning from fossil fuels to alternative fuels and energy sources.
However, significant uncertainty remains regarding the rate of quota
reductions, carbon pricing, and other regulatory mechanisms,
making it challenging to establish reliable assumptions for project
planning and investment decisions.
Additionally, acute and chronic physical risks such as floods, extreme
temperatures, and severe weather may disrupt operations, damage
infrastructure, and raise costs. Failure to adapt could lead to financial
penalties, operational constraints, and reduced long-term viability.
Nostrum manages climate risks through strategic planning, compliance, and
operational resilience. To address physical risks, the company integrates climate
considerations into risk assessments and strengthens emergency response
measures. For policy and legal risks, it ensures compliance through regular
monitoring and legal oversight. To mitigate market risks, Nostrum diversifies into
gas processing and optimises operations for efficiency. For technology risks, it
invests in digitalisation, automation, and emission management. To manage
reputational risks, the company maintains transparent climate disclosures and
engages with stakeholders to align with regulatory and social expectations.
For a more detailed description of the climate-related risks and the company’s
strategy in this regard, please see the section of the Annual Report on Climate-
related Financial Disclosures.
iv) Land use and biodiversity impact risks
Nostrum’s operations, like much of the oil and gas industry, can
impact biodiversity through habitat disruption, land use, and
infrastructure development. While individual well sites may be small,
the combined effect of multiple sites, roads, and pipelines can put
pressure on local ecosystems and wildlife. In some areas, this could
contribute to species population declines, leading to tighter
regulations and higher compliance costs. Additionally, improper
handling of hazardous materials, even in small amounts, can harm
wildlife, attract media attention, and result in fines. As environmental
expectations grow, Nostrum must actively manage land use and
biodiversity risks to minimise its impact and ensure long-term
sustainability.
Nostrum actively manages land use and biodiversity risks through structured
policies, environmental programmes, and responsible operational practices.
Biodiversity considerations are integrated into the company’s Environmental
Management System, Health, Safety, and Environment Policy, and Waste
Management practices to minimise environmental impact. Sustainable site
closure and rehabilitation ensure that land affected by operations is responsibly
restored. The company has biodiversity policies and programmes in place, with
management plans designed for priority areas, following best practices to
mitigate environmental impact.
Nostrum engages with local communities, biodiversity experts, and stakeholders
to assess and manage risks effectively. There is a formal commitment to
minimising biodiversity impact, with initiatives aimed at achieving no net loss in
operational areas. Biodiversity management is overseen at the managerial level
to ensure accountability and alignment with sustainability goals. The company
regularly identifies biodiversity priority areas and reports on initiatives,
mitigation efforts, and environmental performance to maintain transparency
and drive continuous improvement.
Principal risks and uncertainties continued
40 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Description of risk
Risk management
Compliance risks
Subsoil use agreements
As the Group performs exploration, development and production
activities in accordance with related licences for the oil and gas
fields, there are related risks that the Group might not be able to
obtain extensions or agree amendments to the field development
plan, when necessary, risks of non-compliance with the licence
requirements owing to ambiguities, risks of alteration of the licence
terms by the authorities and others. These risks may result in the
Group’s inability to fulfil scheduled activities; fines, penalties,
suspension or termination of licences by authorities; and,
respectively, significant and adverse impact on the Group’s
business, financial performance and prospects.
The Group has procedures and processes in place for the timely application for
extension of licence periods or for amendments to field development plans,
when it is considered appropriate. However, uncertainty remains in relation to
timing and results of decisions of authorities. The Group maintains an open
dialogue with RoK governmental authorities regarding its subsoil use agreement.
The Group is in material compliance with such agreements but in the event of
non-compliance with an obligation under such agreements, the Group
endeavours to have such terms modified or pays any penalties and fines that
may apply.
Compliance with laws and regulations
The Group carries out its activities in a number of jurisdictions and,
therefore, must comply with a range of laws and regulations, which
exposes the Group to the respective risks of non-compliance. In
addition, the Group must comply with the Listing Rules, the
Disclosure Guidance and Transparency Rules, FRC guidance and
requirements, as well as requirements in connection with its
restructured debt, in light of its publicly traded shares and notes.
Hence, there are non-compliance risks, including reputational,
litigation and government sanction risks, to which the Group
is exposed.
The impact of these risks may vary in magnitude and include
regulatory actions, fines and penalties by authorities, diversion of
management time, and may have an overall adverse effect on the
Group’s performance and activities towards achieving its
strategic objectives.
For the purpose of effective corporate governance and compliance with laws,
regulations and rules, the Group has adopted a number of policies and
procedures, as mentioned above. The Group also performs periodic updates
based on the changes in regulatory requirements and carries out related
communications and training for employees.
Necessary communication lines are established with authorities to ensure timely
and adequate inbound and outbound flow of information. Management and the
Board monitor significant matters related to legal and compliance matters in
order to act promptly in response to any actions. In addition, management
maintains an open dialogue with its sponsors in relation to any matter related
to non-compliance with Listing Rules and other regulatory requirements.
Financial risks
Liquidity risks
Forecasting to maintain an adequate liquidity position is subject to
the risk that inaccurate information or assumptions are used for
forecasts, and to risks of counter-party delay or a counter-party’s
failure to meet their contractual obligations owing to severe market
conditions.
Moreover, the Group’s current and planned expenditures are subject
to unexpected problems, costs and delays, and the economic results
and actual costs may differ significantly from the Group’s current
estimates. Prices for the materials and services the Group depends
on to conduct and expand its business may increase to levels that no
longer enable the Group to operate profitably.
All the above factors in combination with a significant negative
movement in world energy prices could result in the Group’s
liquidity position becoming more strained than the severe but
plausible downside scenario in the Going Concern assessment.
Management and the Board constantly monitor the Group’s actual and forecast
liquidity position to ensure that sufficient funds are available to meet any
commitments as they arise.
In addition, management and the Board assess key financial ratios, sensitivity
tests of its liquidity position for changes in crude oil price, production volumes
and timing of completion of various ongoing projects, to understand the
resilience of the business and to be prepared for taking necessary remedies.
Further efforts are made on cost optimisation to reduce capital expenditures,
operating costs and general and administration costs.
Refinancing risks
The Group’s Notes will mature in June 2026 and, there is a risk that
the Group will require partial or full refinancing of SSNs, and repay
SUNs in specie through the issuance of new shares (further diluting
the existing ordinary shareholders at the time) or have their maturity
extended through another refinancing or restructuring exercise.
The Board notes that uncertainty remains related to the Group’s ability to repay/
meet its liabilities, including the repayment of its Notes due in 2026 and the risk
that the Group may require refinancing by the bond maturity date.
Relevant considerations were made as part of the viability assessment as
described on pages 43-44.
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 41 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
Compliance risks
Subsoil use agreements
As the Group performs exploration, development and production
activities in accordance with related licences for the oil and gas
fields, there are related risks that the Group might not be able to
obtain extensions or agree amendments to the field development
plan, when necessary, risks of non-compliance with the licence
requirements owing to ambiguities, risks of alteration of the licence
terms by the authorities and others. These risks may result in the
Group’s inability to fulfil scheduled activities; fines, penalties,
suspension or termination of licences by authorities; and,
respectively, significant and adverse impact on the Group’s
business, financial performance and prospects.
The Group has procedures and processes in place for the timely application for
extension of licence periods or for amendments to field development plans,
when it is considered appropriate. However, uncertainty remains in relation to
timing and results of decisions of authorities. The Group maintains an open
dialogue with RoK governmental authorities regarding its subsoil use agreement.
The Group is in material compliance with such agreements but in the event of
non-compliance with an obligation under such agreements, the Group
endeavours to have such terms modified or pays any penalties and fines that
may apply.
Compliance with laws and regulations
The Group carries out its activities in a number of jurisdictions and,
therefore, must comply with a range of laws and regulations, which
exposes the Group to the respective risks of non-compliance. In
addition, the Group must comply with the Listing Rules, the
Disclosure Guidance and Transparency Rules, FRC guidance and
requirements, as well as requirements in connection with its
restructured debt, in light of its publicly traded shares and notes.
Hence, there are non-compliance risks, including reputational,
litigation and government sanction risks, to which the Group
is exposed.
The impact of these risks may vary in magnitude and include
regulatory actions, fines and penalties by authorities, diversion of
management time, and may have an overall adverse effect on the
Group’s performance and activities towards achieving its
strategic objectives.
For the purpose of effective corporate governance and compliance with laws,
regulations and rules, the Group has adopted a number of policies and
procedures, as mentioned above. The Group also performs periodic updates
based on the changes in regulatory requirements and carries out related
communications and training for employees.
Necessary communication lines are established with authorities to ensure timely
and adequate inbound and outbound flow of information. Management and the
Board monitor significant matters related to legal and compliance matters in
order to act promptly in response to any actions. In addition, management
maintains an open dialogue with its sponsors in relation to any matter related
to non-compliance with Listing Rules and other regulatory requirements.
Financial risks
Liquidity risks
Forecasting to maintain an adequate liquidity position is subject to
the risk that inaccurate information or assumptions are used for
forecasts, and to risks of counter-party delay or a counter-party’s
failure to meet their contractual obligations owing to severe market
conditions.
Moreover, the Group’s current and planned expenditures are subject
to unexpected problems, costs and delays, and the economic results
and actual costs may differ significantly from the Group’s current
estimates. Prices for the materials and services the Group depends
on to conduct and expand its business may increase to levels that no
longer enable the Group to operate profitably.
All the above factors in combination with a significant negative
movement in world energy prices could result in the Group’s
liquidity position becoming more strained than the severe but
plausible downside scenario in the Going Concern assessment.
Management and the Board constantly monitor the Group’s actual and forecast
liquidity position to ensure that sufficient funds are available to meet any
commitments as they arise.
In addition, management and the Board assess key financial ratios, sensitivity
tests of its liquidity position for changes in crude oil price, production volumes
and timing of completion of various ongoing projects, to understand the
resilience of the business and to be prepared for taking necessary remedies.
Further efforts are made on cost optimisation to reduce capital expenditures,
operating costs and general and administration costs.
Refinancing risks
The Group’s Notes will mature in June 2026 and, there is a risk that
the Group will require partial or full refinancing of SSNs, and repay
SUNs in specie through the issuance of new shares (further diluting
the existing ordinary shareholders at the time) or have their maturity
extended through another refinancing or restructuring exercise.
The Board notes that uncertainty remains related to the Group’s ability to repay/
meet its liabilities, including the repayment of its Notes due in 2026 and the risk
that the Group may require refinancing by the bond maturity date.
Relevant considerations were made as part of the viability assessment as
described on pages 43-44.
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 41 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
Description of risk
Risk management
Financial risks continued
Tax risks and uncertainties
The uncertainty of application, including retroactive application, of
tax laws and the evolution of tax laws in Kazakhstan create risks
related to additional tax liabilities from assessments and risks related
to the recoverability of tax assets.
Kazakhstan’s tax legislation and regulations are subject to ongoing
changes and varying interpretations. Instances of inconsistent
opinions between local, regional, and national tax authorities are not
unusual. The current regime of penalties and interest related to
reported and discovered violations of Kazakhstan’s tax laws are
severe and where the tax authorities disagree with the positions
taken by the Group the financial outcomes could be material. Fiscal
periods remain open to review by tax authorities for five calendar
years preceding the year of review. Under certain circumstances
reviews may cover longer periods.
Tax risks and uncertainties may adversely affect the Group’s
profitability, liquidity and planned growth.
The Group has policies and procedures related to various tax assessments and
positions, as well as other control activities to ensure the timely assessment and
filing of tax returns, payment of tax obligations and recovery of tax assets.
The Group regularly challenges, either with the RoK tax authorities or through
the RoK courts, tax assessments that it believes are inapplicable to it, pursuant
to the terms of either its subsoil use agreements or applicable law.
Other risks
Other significant risks, including emerging risks
Other risks are those that are not specifically identified within any of
the principal risks and uncertainties but may be related to several
such areas or be organisation wide. These include risks related to:
• Fraudulent activities;
• The Group’s supply chains;
• Accounting and reporting management systems; or
• The availability of human resources.
They may also significantly impact the Group’s financial
performance, reputation and achievement of its strategic objectives.
The Group has an Anti-Bribery and Corruption Policy, and provisions relating to
the same are also included in the Group’s Code of Conduct. Related training and
updates are periodically provided for employees in relation to their obligations in
this area.
The Group has a wide range of internal controls over its supply chains and
accounting and reporting processes, including policies, procedures, segregation
of duties for authorisation of matters, periodic training for employees and so on.
The Contracts Board was established to meet weekly to review and approve the
placement of contracts or expenditures.
Senior management and the Board stay alert to emerging challenges related to
various management systems and related governance matters and, when
necessary, initiate change initiatives to ensure enhancement and integration of
certain management systems.
The risks listed above do not comprise all those associated with the Group’s business and are not set out in any order of priority. Additional risks and
uncertainties not presently known to management, or currently deemed to be less material, may also have an adverse effect on the Group’s business.
The risks listed above are continuously monitored by the management team and assessed when making business decisions.
RISK MANAGEMENT
Principal risks and uncertainties continued
42 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Financial risks continued
Tax risks and uncertainties
The uncertainty of application, including retroactive application, of
tax laws and the evolution of tax laws in Kazakhstan create risks
related to additional tax liabilities from assessments and risks related
to the recoverability of tax assets.
Kazakhstan’s tax legislation and regulations are subject to ongoing
changes and varying interpretations. Instances of inconsistent
opinions between local, regional, and national tax authorities are not
unusual. The current regime of penalties and interest related to
reported and discovered violations of Kazakhstan’s tax laws are
severe and where the tax authorities disagree with the positions
taken by the Group the financial outcomes could be material. Fiscal
periods remain open to review by tax authorities for five calendar
years preceding the year of review. Under certain circumstances
reviews may cover longer periods.
Tax risks and uncertainties may adversely affect the Group’s
profitability, liquidity and planned growth.
The Group has policies and procedures related to various tax assessments and
positions, as well as other control activities to ensure the timely assessment and
filing of tax returns, payment of tax obligations and recovery of tax assets.
The Group regularly challenges, either with the RoK tax authorities or through
the RoK courts, tax assessments that it believes are inapplicable to it, pursuant
to the terms of either its subsoil use agreements or applicable law.
Other risks
Other significant risks, including emerging risks
Other risks are those that are not specifically identified within any of
the principal risks and uncertainties but may be related to several
such areas or be organisation wide. These include risks related to:
• Fraudulent activities;
• The Group’s supply chains;
• Accounting and reporting management systems; or
• The availability of human resources.
They may also significantly impact the Group’s financial
performance, reputation and achievement of its strategic objectives.
The Group has an Anti-Bribery and Corruption Policy, and provisions relating to
the same are also included in the Group’s Code of Conduct. Related training and
updates are periodically provided for employees in relation to their obligations in
this area.
The Group has a wide range of internal controls over its supply chains and
accounting and reporting processes, including policies, procedures, segregation
of duties for authorisation of matters, periodic training for employees and so on.
The Contracts Board was established to meet weekly to review and approve the
placement of contracts or expenditures.
Senior management and the Board stay alert to emerging challenges related to
various management systems and related governance matters and, when
necessary, initiate change initiatives to ensure enhancement and integration of
certain management systems.
The risks listed above do not comprise all those associated with the Group’s business and are not set out in any order of priority. Additional risks and
uncertainties not presently known to management, or currently deemed to be less material, may also have an adverse effect on the Group’s business.
The risks listed above are continuously monitored by the management team and assessed when making business decisions.
RISK MANAGEMENT
Principal risks and uncertainties continued
42 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
VIABILITY STATEMENT
Viability statement
The Group’s prospects over the future
medium-term were assessed by the
Directors in accordance with provision 31 of
the UK Corporate Governance Code 2018.
The viability assessment is performed by
stress-testing a medium-term financial
model to the principal risks and
uncertainties (described on pages 36–42)
and their combinations. The key features of
the financial model include the following
elements of corporate planning and
modelling process:
• Medium-term development planning
based on three-to-four-year financial
projections, using management’s internal
estimate of forecast production from the
Chinarevskoye field, processing
hydrocarbons from Ural O&G and
development of Stepnoy Leopard fields.
No other third-party volumes or strategic
initiative projects have been included in
the viability assessment as there is
currently no certainty that they will arrive
within the assessment period; and
• Annual budgeting and forecasting
process incorporating preparation of an
annual budget for the following year,
which is reviewed and approved by the
Board, and followed up with quarterly
forecasts, which are monitored by senior
management and the Board.
Viability time horizon
Considering the uncertainties inherent to
the Group’s operations as well as the
medium-term development planning
mentioned above, the Board concluded
that a viability assessment over a three-year
period to 30 June 2028 provides a robust
and realistic evaluation of the Group’s
future performance.
With this approach the Board continues to
believe that the assessment:
• maintains an optimal balance between a
reasonable degree of confidence and an
appropriate longer-term outlook;
• is aligned with medium-term
development planning mentioned above;
• is consistent with other current and/or
recent communications (e.g. production
forecasts etc.); and
• is appropriate for the current stage of
development of the Group and gives an
opportunity to reasonably assess
sensitivity of the Group’s performance to
principal risks during the period where
the Group looks to work on implementing
its major strategic objectives (described
on pages 12–13).
Viability assessment
The three-year financial model used as a
base-case scenario for viability assessment
assumed the following:
• Production forecasts reflecting
management’s internal view of
Chinarevskoye production, which is
similar to the proved-developed
producing (PDP) reserves and considered
more relevant given the medium-term
nature of the assessment;
• Inclusion of throughput processing
volumes of hydrocarbons from Ural O&G
based on management’s internal view,
and
• Capital expenditures over 2025-2026 on
development of Stepnoy Leopard fields,
with initial flow of hydrocarbons and
revenue streams in late 2026;
• No additional utilization of the spare
capacity of Gas Treatment Facilities
despite being a key strategic focus of
management for the medium-term
horizon; and
• Product price assumptions based on a
Brent oil price of $70/bbl throughout the
assessment horizon. This is within the
range of average broker consensus
forecasts as at 31 December 2024.
For the purpose of sensitivity testing,
several principal risks and uncertainties
were selected (from those described on
pages 36–42), which were deemed to have
the highest potential financial impact on
the Group’s future performance, taking
into account prior period assessments.
The effect of those principal risks and
uncertainties on the base-case scenario
were analysed with the assumptions as
described in the table below.
The Directors also considered severe but
plausible scenarios where a combination of
two or three of the risks shown in the table
below occur together.
The scenarios took into account the
mitigating actions that might be required
if the Group was exposed in the medium-
term to negative impacts. Such mitigating
actions are in place or could be
implemented to avoid or reduce the impact
or occurrence of the underlying risks. In
considering the likely effectiveness of such
actions, the conclusions of the Board’s
regular monitoring and review of risk and
internal control systems were taken into
account.
Principal risk and
uncertainty Description Viability assessment
Strategic risks Deterioration in the business and market environment
and geopolitical risks
10% reduction in oil, LPG and gas prices over the
period of assessment
Operational risks Production issues from the field and/or transportation
issues along the sales routes
10% reduction in forecast production and sales
volumes over the period of assessment
Liquidity risks Cost pressures in the ordinary course of business
supply chain and with Group personnel
10% increase in capital expenditures and operating
cost over the period of assessment
Compliance risks Unexpected and unbudgeted fines and penalties for
various non-compliance issues
US$5m per annum regulator fines; and US$10m per
annum legal claim over the period of assessment
Climate-related risks Implementation of carbon emission taxes in RoK $10/mt of CO2 tax rate in 2026 gradually increasing to
$30/mt of CO2 in 2030
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 43 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
Viability statement
The Group’s prospects over the future
medium-term were assessed by the
Directors in accordance with provision 31 of
the UK Corporate Governance Code 2018.
The viability assessment is performed by
stress-testing a medium-term financial
model to the principal risks and
uncertainties (described on pages 36–42)
and their combinations. The key features of
the financial model include the following
elements of corporate planning and
modelling process:
• Medium-term development planning
based on three-to-four-year financial
projections, using management’s internal
estimate of forecast production from the
Chinarevskoye field, processing
hydrocarbons from Ural O&G and
development of Stepnoy Leopard fields.
No other third-party volumes or strategic
initiative projects have been included in
the viability assessment as there is
currently no certainty that they will arrive
within the assessment period; and
• Annual budgeting and forecasting
process incorporating preparation of an
annual budget for the following year,
which is reviewed and approved by the
Board, and followed up with quarterly
forecasts, which are monitored by senior
management and the Board.
Viability time horizon
Considering the uncertainties inherent to
the Group’s operations as well as the
medium-term development planning
mentioned above, the Board concluded
that a viability assessment over a three-year
period to 30 June 2028 provides a robust
and realistic evaluation of the Group’s
future performance.
With this approach the Board continues to
believe that the assessment:
• maintains an optimal balance between a
reasonable degree of confidence and an
appropriate longer-term outlook;
• is aligned with medium-term
development planning mentioned above;
• is consistent with other current and/or
recent communications (e.g. production
forecasts etc.); and
• is appropriate for the current stage of
development of the Group and gives an
opportunity to reasonably assess
sensitivity of the Group’s performance to
principal risks during the period where
the Group looks to work on implementing
its major strategic objectives (described
on pages 12–13).
Viability assessment
The three-year financial model used as a
base-case scenario for viability assessment
assumed the following:
• Production forecasts reflecting
management’s internal view of
Chinarevskoye production, which is
similar to the proved-developed
producing (PDP) reserves and considered
more relevant given the medium-term
nature of the assessment;
• Inclusion of throughput processing
volumes of hydrocarbons from Ural O&G
based on management’s internal view,
and
• Capital expenditures over 2025-2026 on
development of Stepnoy Leopard fields,
with initial flow of hydrocarbons and
revenue streams in late 2026;
• No additional utilization of the spare
capacity of Gas Treatment Facilities
despite being a key strategic focus of
management for the medium-term
horizon; and
• Product price assumptions based on a
Brent oil price of $70/bbl throughout the
assessment horizon. This is within the
range of average broker consensus
forecasts as at 31 December 2024.
For the purpose of sensitivity testing,
several principal risks and uncertainties
were selected (from those described on
pages 36–42), which were deemed to have
the highest potential financial impact on
the Group’s future performance, taking
into account prior period assessments.
The effect of those principal risks and
uncertainties on the base-case scenario
were analysed with the assumptions as
described in the table below.
The Directors also considered severe but
plausible scenarios where a combination of
two or three of the risks shown in the table
below occur together.
The scenarios took into account the
mitigating actions that might be required
if the Group was exposed in the medium-
term to negative impacts. Such mitigating
actions are in place or could be
implemented to avoid or reduce the impact
or occurrence of the underlying risks. In
considering the likely effectiveness of such
actions, the conclusions of the Board’s
regular monitoring and review of risk and
internal control systems were taken into
account.
Principal risk and
uncertainty Description Viability assessment
Strategic risks Deterioration in the business and market environment
and geopolitical risks
10% reduction in oil, LPG and gas prices over the
period of assessment
Operational risks Production issues from the field and/or transportation
issues along the sales routes
10% reduction in forecast production and sales
volumes over the period of assessment
Liquidity risks Cost pressures in the ordinary course of business
supply chain and with Group personnel
10% increase in capital expenditures and operating
cost over the period of assessment
Compliance risks Unexpected and unbudgeted fines and penalties for
various non-compliance issues
US$5m per annum regulator fines; and US$10m per
annum legal claim over the period of assessment
Climate-related risks Implementation of carbon emission taxes in RoK $10/mt of CO2 tax rate in 2026 gradually increasing to
$30/mt of CO2 in 2030
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 43 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
Climate-related financial
disclosure
As part of the viability assessment the
Directors also performed resilience analysis
as per the requirements of the Taskforce on
Climate-related Financial Disclosure
(“TCFD”). TCFD requires the Directors to
describe the resilience of the organization’s
strategy, taking into consideration different
climate-related scenarios, including a 2°C
or lower scenario (TCFD Strategy (c)).
The Directors chose the Net Zero Emission
by 2050 Scenario (“NZE Scenario”)
developed by the International Energy
Agency as the reference point in
performing the resilience test and also took
into account Kazakhstan’s Strategy on
Achieving Carbon Neutrality by 2060. NZE
Scenario is aimed at an emissions trajectory
consistent with keeping the temperature
rise in 2100 below 1.5 °C (with at least a
50% probability).
Two key assumptions were taken from NZE
Scenario for the purpose of severe but
plausible development scenario for
stress-testing the company’s resilience:
1) oil prices projections decreasing to
US$42 per barrel by 2030; and 2) carbon
price forecasted at US$90 per tonne of CO2
by 2030. Please refer to pages 83-84 for
further details.
The Group maintains sufficient cash
reserves at the end of the viability period
when sensitizing the base case for the
above climate-related assumptions.
Following the assessment, the Directors
confirm the future strategy and future
viability remain resilient against the chosen
climate-related scenario.
Longer term viability
The Directors also considered the viability
of the business beyond the medium term.
The Notes issued by the Group will mature
in June 2026 and, under the base case
scenario in the current viability assessment
model, the Directors have a reasonable
expectation that the Group will be able to
partially repay and/or refinance these notes
SSNs, and SUNs are expected to be either
repaid in specie through the issuance of
new shares (further diluting the existing
ordinary shareholders at the time), be
restructured or have their maturity
extended.
The implementation of the major strategic
initiatives described on pages 6-7 and
14-19 will inevitably support future
long-term viability of the Group, and the
Directors note that this may improve the
terms of refinancing in 2026.
Viability statement
conclusion
Considering the above, the following
conclusions can be drawn from the viability
assessment:
• the Group’s viability conclusion is not
exposed to plausible downside risks
arising in isolation relating to the Group’s
strategy, operations, liquidity or
compliance;
• in the event that a combination of any
three of the five considered plausible
downside scenarios arise, the Group’s
may require additional funding to cover
the capital expenditures required for
development of Stepnoy Leopard fields;
• It is not plausible that four or five risks
would arise together, since, in the
event of the strategic, operational and
compliance risks manifesting, the Group
would take further mitigating actions to
reduce costs and manage liquidity and
so the likelihood of an increase in costs
occurring concurrently with the other
three scenarios is considered remote;
and
Based on these assessments and other
matters considered by the Board, the
Directors confirm that they have a
reasonable expectation that the Group will
continue in operation and meet its liabilities
as they fall due through the three-year
viability assessment period ending 30 June
2028, subject to refinancing or
restructuring of its debt.
RISK MANAGEMENT
Viability statement continued
44 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
disclosure
As part of the viability assessment the
Directors also performed resilience analysis
as per the requirements of the Taskforce on
Climate-related Financial Disclosure
(“TCFD”). TCFD requires the Directors to
describe the resilience of the organization’s
strategy, taking into consideration different
climate-related scenarios, including a 2°C
or lower scenario (TCFD Strategy (c)).
The Directors chose the Net Zero Emission
by 2050 Scenario (“NZE Scenario”)
developed by the International Energy
Agency as the reference point in
performing the resilience test and also took
into account Kazakhstan’s Strategy on
Achieving Carbon Neutrality by 2060. NZE
Scenario is aimed at an emissions trajectory
consistent with keeping the temperature
rise in 2100 below 1.5 °C (with at least a
50% probability).
Two key assumptions were taken from NZE
Scenario for the purpose of severe but
plausible development scenario for
stress-testing the company’s resilience:
1) oil prices projections decreasing to
US$42 per barrel by 2030; and 2) carbon
price forecasted at US$90 per tonne of CO2
by 2030. Please refer to pages 83-84 for
further details.
The Group maintains sufficient cash
reserves at the end of the viability period
when sensitizing the base case for the
above climate-related assumptions.
Following the assessment, the Directors
confirm the future strategy and future
viability remain resilient against the chosen
climate-related scenario.
Longer term viability
The Directors also considered the viability
of the business beyond the medium term.
The Notes issued by the Group will mature
in June 2026 and, under the base case
scenario in the current viability assessment
model, the Directors have a reasonable
expectation that the Group will be able to
partially repay and/or refinance these notes
SSNs, and SUNs are expected to be either
repaid in specie through the issuance of
new shares (further diluting the existing
ordinary shareholders at the time), be
restructured or have their maturity
extended.
The implementation of the major strategic
initiatives described on pages 6-7 and
14-19 will inevitably support future
long-term viability of the Group, and the
Directors note that this may improve the
terms of refinancing in 2026.
Viability statement
conclusion
Considering the above, the following
conclusions can be drawn from the viability
assessment:
• the Group’s viability conclusion is not
exposed to plausible downside risks
arising in isolation relating to the Group’s
strategy, operations, liquidity or
compliance;
• in the event that a combination of any
three of the five considered plausible
downside scenarios arise, the Group’s
may require additional funding to cover
the capital expenditures required for
development of Stepnoy Leopard fields;
• It is not plausible that four or five risks
would arise together, since, in the
event of the strategic, operational and
compliance risks manifesting, the Group
would take further mitigating actions to
reduce costs and manage liquidity and
so the likelihood of an increase in costs
occurring concurrently with the other
three scenarios is considered remote;
and
Based on these assessments and other
matters considered by the Board, the
Directors confirm that they have a
reasonable expectation that the Group will
continue in operation and meet its liabilities
as they fall due through the three-year
viability assessment period ending 30 June
2028, subject to refinancing or
restructuring of its debt.
RISK MANAGEMENT
Viability statement continued
44 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
FINANCIAL REVIEW
Financial review
Results of operations for the years ended 31 December 2024 and 2023
The table below sets forth the line items of the Group’s consolidated statement of income for the years ended 31 December 2024 and
2023 in US Dollars and as a percentage of revenue.
For the year ended 31 December
In thousands of US Dollars 2024 % of revenue 2023 % of revenue
Revenue 137,076 100.0% 119,629 100.0%
Cost of sales (72,002) 52.5% (77,628) 64.9%
Gross profit 65,074 47.5% 42,001 35.1%
General and administrative expenses (13,952) 10.2% (13,807) 11.5%
Selling and transportation expenses (14,556) 10.6% (12,403) 10.4%
Taxes other than income tax (13,181) 9.6% (14,187) 11.9%
Finance costs (117,229) 85.5% (102,826) 86.0%
Employee share options – fair value adjustment — 0.0% 25 0.0%
Impairment reversal 86,668 63.2% — 0.0%
Fair value adjustment on recognition of debt instruments — 0.0% 174,426 145.8%
Foreign exchange gain / (loss), net 843 0.6% (954) 0.8%
Gain on debt-to-equity exchange — 0.0% 769,611 643.3%
Interest income 7,139 5.2% 2,691 2.2%
Other income 13,425 9.8% 6,430 5.4%
Other expenses (12,404) 9.0% (14,675) 12.3%
Income before income tax 1,827 1.3% 836,332 699.1%
Income tax expense (28,404) 20.7% (4,674) 3.9%
(Loss) / income for the period (26,577) 19.4% 831,658 695.2%
Currency translation difference (231) 0.2% 62 0.1%
Total comprehensive (loss) / income for the period (26,808) 19.6% 831,720 695.2%
General note
For the year ended 31 December 2024, the Group recorded a total comprehensive loss of US$26.8 million, as opposed to US$831.7
million total comprehensive income in 2023. This substantial change is mainly due to:
One-off items:
• 2024: a US$86.7 million impairment reversal, which is primarily driven by the value attributed to both processing of Ural O&G volumes
and development of Stepnoy Leopard fields.
• 2023: a US$769.6 million gain on debt-to-equity exchange upon completion of the restructuring and US$174.4 million fair value
adjustment on the recognition of SSNs and SUNs.
Year-on-year changes:
• A 14.6% increase in revenues, which is a combination of 47.3% increase in product sales volumes, new revenues from third-party
hydrocarbon processing and a 2% decrease in the average Brent crude oil price.
• A US$5.6 million reduction in cost of sales, mainly due to a lower depreciation expense following the switch to a straight-line
depreciation method for surface facilities primarily engaged in gas processing.
• A US$4.4 million increase in interest income from placement of available cash reserves in money market funds.
• A US$7.0 million increase in other income, mainly attributable to the reversal of provisions accrued in prior periods.
Further detailed analysis of the current financial performance is provided below.
GRI 201-1
207-4
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 45 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
Financial review
Results of operations for the years ended 31 December 2024 and 2023
The table below sets forth the line items of the Group’s consolidated statement of income for the years ended 31 December 2024 and
2023 in US Dollars and as a percentage of revenue.
For the year ended 31 December
In thousands of US Dollars 2024 % of revenue 2023 % of revenue
Revenue 137,076 100.0% 119,629 100.0%
Cost of sales (72,002) 52.5% (77,628) 64.9%
Gross profit 65,074 47.5% 42,001 35.1%
General and administrative expenses (13,952) 10.2% (13,807) 11.5%
Selling and transportation expenses (14,556) 10.6% (12,403) 10.4%
Taxes other than income tax (13,181) 9.6% (14,187) 11.9%
Finance costs (117,229) 85.5% (102,826) 86.0%
Employee share options – fair value adjustment — 0.0% 25 0.0%
Impairment reversal 86,668 63.2% — 0.0%
Fair value adjustment on recognition of debt instruments — 0.0% 174,426 145.8%
Foreign exchange gain / (loss), net 843 0.6% (954) 0.8%
Gain on debt-to-equity exchange — 0.0% 769,611 643.3%
Interest income 7,139 5.2% 2,691 2.2%
Other income 13,425 9.8% 6,430 5.4%
Other expenses (12,404) 9.0% (14,675) 12.3%
Income before income tax 1,827 1.3% 836,332 699.1%
Income tax expense (28,404) 20.7% (4,674) 3.9%
(Loss) / income for the period (26,577) 19.4% 831,658 695.2%
Currency translation difference (231) 0.2% 62 0.1%
Total comprehensive (loss) / income for the period (26,808) 19.6% 831,720 695.2%
General note
For the year ended 31 December 2024, the Group recorded a total comprehensive loss of US$26.8 million, as opposed to US$831.7
million total comprehensive income in 2023. This substantial change is mainly due to:
One-off items:
• 2024: a US$86.7 million impairment reversal, which is primarily driven by the value attributed to both processing of Ural O&G volumes
and development of Stepnoy Leopard fields.
• 2023: a US$769.6 million gain on debt-to-equity exchange upon completion of the restructuring and US$174.4 million fair value
adjustment on the recognition of SSNs and SUNs.
Year-on-year changes:
• A 14.6% increase in revenues, which is a combination of 47.3% increase in product sales volumes, new revenues from third-party
hydrocarbon processing and a 2% decrease in the average Brent crude oil price.
• A US$5.6 million reduction in cost of sales, mainly due to a lower depreciation expense following the switch to a straight-line
depreciation method for surface facilities primarily engaged in gas processing.
• A US$4.4 million increase in interest income from placement of available cash reserves in money market funds.
• A US$7.0 million increase in other income, mainly attributable to the reversal of provisions accrued in prior periods.
Further detailed analysis of the current financial performance is provided below.
GRI 201-1
207-4
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 45 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
Revenue
The following table shows details of the Group’s revenues by products with relevant variances:
For the year ended 31 December
In thousands of US Dollars 2024 2023 Variance Variance, %
Revenue from oil and gas
condensate sales 89,335 101,463 (12,128) (12.0%)
Revenue from gas and LPG sales 33,405 18,009 15,396 85.5%
Revenue from third-party
hydrocarbon processing 14,336 156 14,180 100.0%
Revenue from sulphur sales — 1 (1) (100.0%)
Total revenue 137,076 119,629 17,447 14.6%
The following table shows the Group’s revenue breakdown by export and domestic sales:
For the year ended 31 December
In thousands of US Dollars 2024 2023 Variance Variance, %
Revenue from export sales 94,582 105,170 (10,588) (10.1%)
Revenue from domestic sales 42,494 14,459 28,035 193.9%
Total revenue 137,076 119,629 17,447 14.6%
The Group’s sales volumes by product categories as well as total production volumes are
presented as follows:
For the year ended 31 December
In boe 2024 2023 Variance Variance, %
Oil and gas condensate sales
volumes 1,555,288 1,704,773 (149,485) (8.8%)
Gas and LPG sales volumes 3,216,629 1,534,256 1,682,373 109.7%
Total sales volumes 4,771,917 3,239,029 1,532,887 47.3%
Production volumes 5,466,229 3,683,152 1,783,077 48.4%
The Group’s revenue increased by US$17.5
million to US$137.1 million compared to
US$119.6 million in 2023.
The increase in domestic revenues was
largely due to:
• Additional sales volumes of dry gas and
LPG from processing of Ural O&G raw
gas , commencing from December 2023.
• a US$14.3 million new revenues from
processing Ural O&G’s condensate.
Export revenues decreased due to the
continuing natural decline in production
from the Chinarevskoye field. The rate
of decline was reduced by additional
volumes from:
• Well No.301 which was completed and
put into production in May 2024.
• Doubling of the gas-lift expansion
capacity in July 2023.
• GTU-3, which has been operational since
September 2023, providing an additional
26% LPG yield.
Pricing of the Group’s products is, directly or
indirectly, related to the price of Brent crude
oil. The average Brent crude oil price for
2024 was US$80.6/bbl (2023: US$82.5/bbl).
Cost of sales for the reporting period
decreased by 7.2% to US$72.0 million
(2023: US$77.6 million).
Similarly, on a per barrel of oil equivalent
(boe) basis, cost of sales decreased to
US$15.1 from US$24.0 in 2023, and
excluding depreciation, the cost per
barrel decreased to US$9.7 from US$11.5.
The following main components cost of
sales changed materially:
Depreciation, depletion, and amortisation
(DD&A) costs decreased by 36.8% to
US$25.5 million (2023: US$40.3 million).
The reduction in DD&A was primarily due
to the change in the depreciation method
for the surface facilities engaged in gas
processing. Effective 1 January 2024,
the method was changed from unit of
production to straight-line depreciation.
The straight-line method, based on the
technical remaining useful lives of the
assets, better reflects their current usage
pattern, which is expected to continue for
the foreseeable future.
Cost of sales
For the year ended 31 December
In thousands of US Dollars 2024 2023 Variance Variance, %
Depreciation, depletion and
amortisation 25,489 40,321 (14,832) (36.8%)
Payroll and related taxes 18,647 16,741 1,906 11.4%
Repair, maintenance and
other services 8,476 6,558 1,918 29.2%
Materials and supplies 9,918 4,922 4,996 101.5%
Transportation services 3,568 2,505 1,063 42.4%
Well repair and maintenance costs 4,667 5,027 (360) (7.2%)
Environmental levies 163 138 25 18.1%
Change in stock 292 691 (399) (57.7%)
Other 782 725 57 7.9%
Total 72,002 77,628 (5,626) (7.2%)
Financial review continued
FINANCIAL REVIEW
46 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
The following table shows details of the Group’s revenues by products with relevant variances:
For the year ended 31 December
In thousands of US Dollars 2024 2023 Variance Variance, %
Revenue from oil and gas
condensate sales 89,335 101,463 (12,128) (12.0%)
Revenue from gas and LPG sales 33,405 18,009 15,396 85.5%
Revenue from third-party
hydrocarbon processing 14,336 156 14,180 100.0%
Revenue from sulphur sales — 1 (1) (100.0%)
Total revenue 137,076 119,629 17,447 14.6%
The following table shows the Group’s revenue breakdown by export and domestic sales:
For the year ended 31 December
In thousands of US Dollars 2024 2023 Variance Variance, %
Revenue from export sales 94,582 105,170 (10,588) (10.1%)
Revenue from domestic sales 42,494 14,459 28,035 193.9%
Total revenue 137,076 119,629 17,447 14.6%
The Group’s sales volumes by product categories as well as total production volumes are
presented as follows:
For the year ended 31 December
In boe 2024 2023 Variance Variance, %
Oil and gas condensate sales
volumes 1,555,288 1,704,773 (149,485) (8.8%)
Gas and LPG sales volumes 3,216,629 1,534,256 1,682,373 109.7%
Total sales volumes 4,771,917 3,239,029 1,532,887 47.3%
Production volumes 5,466,229 3,683,152 1,783,077 48.4%
The Group’s revenue increased by US$17.5
million to US$137.1 million compared to
US$119.6 million in 2023.
The increase in domestic revenues was
largely due to:
• Additional sales volumes of dry gas and
LPG from processing of Ural O&G raw
gas , commencing from December 2023.
• a US$14.3 million new revenues from
processing Ural O&G’s condensate.
Export revenues decreased due to the
continuing natural decline in production
from the Chinarevskoye field. The rate
of decline was reduced by additional
volumes from:
• Well No.301 which was completed and
put into production in May 2024.
• Doubling of the gas-lift expansion
capacity in July 2023.
• GTU-3, which has been operational since
September 2023, providing an additional
26% LPG yield.
Pricing of the Group’s products is, directly or
indirectly, related to the price of Brent crude
oil. The average Brent crude oil price for
2024 was US$80.6/bbl (2023: US$82.5/bbl).
Cost of sales for the reporting period
decreased by 7.2% to US$72.0 million
(2023: US$77.6 million).
Similarly, on a per barrel of oil equivalent
(boe) basis, cost of sales decreased to
US$15.1 from US$24.0 in 2023, and
excluding depreciation, the cost per
barrel decreased to US$9.7 from US$11.5.
The following main components cost of
sales changed materially:
Depreciation, depletion, and amortisation
(DD&A) costs decreased by 36.8% to
US$25.5 million (2023: US$40.3 million).
The reduction in DD&A was primarily due
to the change in the depreciation method
for the surface facilities engaged in gas
processing. Effective 1 January 2024,
the method was changed from unit of
production to straight-line depreciation.
The straight-line method, based on the
technical remaining useful lives of the
assets, better reflects their current usage
pattern, which is expected to continue for
the foreseeable future.
Cost of sales
For the year ended 31 December
In thousands of US Dollars 2024 2023 Variance Variance, %
Depreciation, depletion and
amortisation 25,489 40,321 (14,832) (36.8%)
Payroll and related taxes 18,647 16,741 1,906 11.4%
Repair, maintenance and
other services 8,476 6,558 1,918 29.2%
Materials and supplies 9,918 4,922 4,996 101.5%
Transportation services 3,568 2,505 1,063 42.4%
Well repair and maintenance costs 4,667 5,027 (360) (7.2%)
Environmental levies 163 138 25 18.1%
Change in stock 292 691 (399) (57.7%)
Other 782 725 57 7.9%
Total 72,002 77,628 (5,626) (7.2%)
Financial review continued
FINANCIAL REVIEW
46 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Well repair and maintenance costs
decreased by 7.2% to US$4.7 million (2023:
US$5.0 million), reflecting the Group’s
optimised maintenance efforts to sustain
productivity of wells.
Materials and supplies expenses increased
by 101.5% to US$9.9 million (2023: US$4.9
million). This increase is primarily due to the
purchase of raw gas from Ural O&G as well
as the periodic nature of certain planned
maintenance of the facilities.
Repair, maintenance, and other services
increased by 29.2% to US$8.5 million (2023:
US$6.6 million), which primarily includes
costs associated with the running and
upkeep of the facilities.
Payroll and related taxes increased by
11.4% to US$18.6 million (2023: US$16.7
million), influenced primarily by salary
indexation as well as foreign exchange
rate changes.
Transportation services increased by
42.4% to US$3.6 million (2023: US$2.5
million), corresponding to additional scope
of work resulting from processing third-
party hydrocarbons as well as impact of
inflation and foreign exchange rate
changes.
Change in stock had a positive adjustment
of US$0.3 million, reflecting the inventory
changes for the year, in contrast to a larger
positive adjustment in the prior period.
General and administrative expenses
For the year ended 31 December
In thousands of US Dollars 2024 2023 Variance Variance, %
Payroll and related taxes 8,550 7,622 928 12.2%
Professional services 3,556 4,182 (626) (15.0%)
Insurance fees 457 427 30 7.0%
Business travel 497 568 (71) (12.5%)
Short-term leases 129 109 20 18.3%
Communication 160 159 1 0.6%
Depreciation and amortisation 66 188 (122) (64.9%)
Materials and supplies 147 166 (19) (11.4%)
Bank charges 28 29 (1) (3.4%)
Other 362 357 5 1.4%
Total 13,952 13,807 145 1.1%
General and administrative expenses
slightly increased to US$14.0 million in
2024 (2023: US$13.8 million). Within this
category, professional services costs
decreased by 15.0% from US$4.2 million to
US$3.6 million. This reduction was largely
offset by a 12.2% increase in payroll and
related taxes from US$7.6 million to US$8.6
million, driven mainly by salary indexation
and fluctuations in foreign exchange rates.
Selling and transportation expenses for
the year ended 31 December 2024
increased by 17.4% to US$14.6 million
(2023: US$12.4 million). This increase was
primarily driven by transportation costs,
which rose by 27.6% from US$4.9 million to
US$6.3 million, and loading and storage
costs, which increased by 10.5% from
US$4.1 million to US$4.5 million. These
changes were largely attributable to
higher sales volumes and inflation impact.
Additionally, payroll and related taxes grew
by 22.9% from US$1.5 million to US$1.8
million, stemming mainly from salary
indexation and fluctuations in foreign
exchange rates.
Selling and transportation expenses
For the year ended 31 December
In thousands of US Dollars 2024 2023 Variance Variance, %
Transportation costs 6,268 4,914 1,354 27.6%
Loading and storage costs 4,520 4,091 429 10.5%
Payroll and related taxes 1,844 1,501 343 22.9%
Other 1,924 1,897 27 1.4%
Total 14,556 12,403 2,153 17.4%
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 47 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
decreased by 7.2% to US$4.7 million (2023:
US$5.0 million), reflecting the Group’s
optimised maintenance efforts to sustain
productivity of wells.
Materials and supplies expenses increased
by 101.5% to US$9.9 million (2023: US$4.9
million). This increase is primarily due to the
purchase of raw gas from Ural O&G as well
as the periodic nature of certain planned
maintenance of the facilities.
Repair, maintenance, and other services
increased by 29.2% to US$8.5 million (2023:
US$6.6 million), which primarily includes
costs associated with the running and
upkeep of the facilities.
Payroll and related taxes increased by
11.4% to US$18.6 million (2023: US$16.7
million), influenced primarily by salary
indexation as well as foreign exchange
rate changes.
Transportation services increased by
42.4% to US$3.6 million (2023: US$2.5
million), corresponding to additional scope
of work resulting from processing third-
party hydrocarbons as well as impact of
inflation and foreign exchange rate
changes.
Change in stock had a positive adjustment
of US$0.3 million, reflecting the inventory
changes for the year, in contrast to a larger
positive adjustment in the prior period.
General and administrative expenses
For the year ended 31 December
In thousands of US Dollars 2024 2023 Variance Variance, %
Payroll and related taxes 8,550 7,622 928 12.2%
Professional services 3,556 4,182 (626) (15.0%)
Insurance fees 457 427 30 7.0%
Business travel 497 568 (71) (12.5%)
Short-term leases 129 109 20 18.3%
Communication 160 159 1 0.6%
Depreciation and amortisation 66 188 (122) (64.9%)
Materials and supplies 147 166 (19) (11.4%)
Bank charges 28 29 (1) (3.4%)
Other 362 357 5 1.4%
Total 13,952 13,807 145 1.1%
General and administrative expenses
slightly increased to US$14.0 million in
2024 (2023: US$13.8 million). Within this
category, professional services costs
decreased by 15.0% from US$4.2 million to
US$3.6 million. This reduction was largely
offset by a 12.2% increase in payroll and
related taxes from US$7.6 million to US$8.6
million, driven mainly by salary indexation
and fluctuations in foreign exchange rates.
Selling and transportation expenses for
the year ended 31 December 2024
increased by 17.4% to US$14.6 million
(2023: US$12.4 million). This increase was
primarily driven by transportation costs,
which rose by 27.6% from US$4.9 million to
US$6.3 million, and loading and storage
costs, which increased by 10.5% from
US$4.1 million to US$4.5 million. These
changes were largely attributable to
higher sales volumes and inflation impact.
Additionally, payroll and related taxes grew
by 22.9% from US$1.5 million to US$1.8
million, stemming mainly from salary
indexation and fluctuations in foreign
exchange rates.
Selling and transportation expenses
For the year ended 31 December
In thousands of US Dollars 2024 2023 Variance Variance, %
Transportation costs 6,268 4,914 1,354 27.6%
Loading and storage costs 4,520 4,091 429 10.5%
Payroll and related taxes 1,844 1,501 343 22.9%
Other 1,924 1,897 27 1.4%
Total 14,556 12,403 2,153 17.4%
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 47 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
Financial review
continued
FINANCIAL REVIEW
Taxes other than income tax
For the year ended 31 December
In thousands of US Dollars 2024 2023 Variance Variance, %
Export customs duty 7,069 8,154 (1,085) (13.3%)
Royalties 4,464 4,841 (377) (7.8%)
Government profit share 1,106 1,169 (63) (5.4%)
Other taxes 542 23 519 2,256.5%
Total 13,181 14,187 (1,006) (7.1%)
Export customs duty decreased by 13.3%
to US$7.1 million (2023: US$8.2 million).
This reduction was driven by the combined
effects of lower market prices and
decreased production volumes from
the Chinarevskoye field.
Royalties and Government profit share
followed this downward trend, with
royalties decreasing by 7.8% to
US$4.5 million (2023: US$4.8 million) and
government profit share falling by 5.4%
to US$1.1 million (2023: US$1.2 million).
The overall effect of these factors resulted
in a total tax expense, excluding income
tax, of US$13.2 million, representing a 7.1%
decrease from US$14.2 million in 2023.
Finance costs
For the year ended 31 December
In thousands of US Dollars 2024 2023 Variance Variance, %
Interest expense on borrowings 114,391 95,226 19,165 20.1%
Other finance costs 1,226 5,973 (4,747) (79.5%)
Unwinding of discount on
amounts due to Government
of Kazakhstan 606 654 (48) (7.3%)
Unwinding of discount on
abandonment and site
restoration provision 1,006 973 33 3.4%
Total 117,229 102,826 14,403 14.0%
Finance costs for the year ended
31 December 2024 increased by 14.0% to
US$117.2 million (2023: US$102.8). The
increase was primarily driven by a 20.1%
higher interest expense on borrowings
amounting to US$114.4 million in 2024
(2023: US$95.2 million). The lower amount
of interest in 2023 was due to substantially
lower effective interest rates (approximately
7-8%) on the Old Notes (2022 Notes and
2025 Notes), which were restructured on 9
February 2023, while the effective interest
rates on SSNs and SUNs are 13.25% and
31.04%, respectively (refer to Note 14 of the
accompanying financial statements).
This rise in interest expense was partially
offset by reduction in other finance costs to
US$1.2 million in 2024 from US$6.0 million
in 2023, which primarily included one-off
restructuring advisory fees.
Other expenses
Other expenses for the year ended 31
December 2024 decreased by 15.6 % to
US$12.4 million, compared to US$14.7
million in 2023. This reduction was primarily
driven by one-off tax penalties and fines,
which fell significantly from US$9.9 million
in 2023 to US$1.6 million in 2024. The
decrease was partially offset by a US$3.8
million rise in business development costs,
increasing from US$1.6 million in 2023 to
US$5.4 million in 2024, and the recognition
of US$1.2 million in social contribution
expenses, which were not incurred in the
previous year. These social contributions
included aid provided to victims of flooding
in Western Kazakhstan.
Income tax
Income tax expense for the year ended
31 December 2024 increased to US$28.4
million, compared to US$4.7 million in
2023. An increase of US$23.7 million was
driven by deferred tax liability recognized
from widening of the difference between
the tax base of property, plant, and
equipment and its IFRS base. Such an
increase in the difference was influenced
primarily by impairment reversal and
different depreciation rates /
methodologies, as well as the devaluation
of the tenge against the US dollar.
Liquidity and capital
resources
During the period under review, Nostrum
primarily relied on cash generated from
operations, and a limited use of existing
cash reserves. As the Group continues
implementing its new mixed-asset energy
strategy which is based on diversification
of both upstream and midstream business,
Nostrum evaluates the right risk/reward for
each of the opportunities, before making
decisions on capital allocation and
requirements for external debt financing.
Further details on the short-term and
medium-term liquidity analysis are
described in the Going concern statement
(page 50) and Viability statement (pages
43-44).
48 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
FINANCIAL REVIEW
Taxes other than income tax
For the year ended 31 December
In thousands of US Dollars 2024 2023 Variance Variance, %
Export customs duty 7,069 8,154 (1,085) (13.3%)
Royalties 4,464 4,841 (377) (7.8%)
Government profit share 1,106 1,169 (63) (5.4%)
Other taxes 542 23 519 2,256.5%
Total 13,181 14,187 (1,006) (7.1%)
Export customs duty decreased by 13.3%
to US$7.1 million (2023: US$8.2 million).
This reduction was driven by the combined
effects of lower market prices and
decreased production volumes from
the Chinarevskoye field.
Royalties and Government profit share
followed this downward trend, with
royalties decreasing by 7.8% to
US$4.5 million (2023: US$4.8 million) and
government profit share falling by 5.4%
to US$1.1 million (2023: US$1.2 million).
The overall effect of these factors resulted
in a total tax expense, excluding income
tax, of US$13.2 million, representing a 7.1%
decrease from US$14.2 million in 2023.
Finance costs
For the year ended 31 December
In thousands of US Dollars 2024 2023 Variance Variance, %
Interest expense on borrowings 114,391 95,226 19,165 20.1%
Other finance costs 1,226 5,973 (4,747) (79.5%)
Unwinding of discount on
amounts due to Government
of Kazakhstan 606 654 (48) (7.3%)
Unwinding of discount on
abandonment and site
restoration provision 1,006 973 33 3.4%
Total 117,229 102,826 14,403 14.0%
Finance costs for the year ended
31 December 2024 increased by 14.0% to
US$117.2 million (2023: US$102.8). The
increase was primarily driven by a 20.1%
higher interest expense on borrowings
amounting to US$114.4 million in 2024
(2023: US$95.2 million). The lower amount
of interest in 2023 was due to substantially
lower effective interest rates (approximately
7-8%) on the Old Notes (2022 Notes and
2025 Notes), which were restructured on 9
February 2023, while the effective interest
rates on SSNs and SUNs are 13.25% and
31.04%, respectively (refer to Note 14 of the
accompanying financial statements).
This rise in interest expense was partially
offset by reduction in other finance costs to
US$1.2 million in 2024 from US$6.0 million
in 2023, which primarily included one-off
restructuring advisory fees.
Other expenses
Other expenses for the year ended 31
December 2024 decreased by 15.6 % to
US$12.4 million, compared to US$14.7
million in 2023. This reduction was primarily
driven by one-off tax penalties and fines,
which fell significantly from US$9.9 million
in 2023 to US$1.6 million in 2024. The
decrease was partially offset by a US$3.8
million rise in business development costs,
increasing from US$1.6 million in 2023 to
US$5.4 million in 2024, and the recognition
of US$1.2 million in social contribution
expenses, which were not incurred in the
previous year. These social contributions
included aid provided to victims of flooding
in Western Kazakhstan.
Income tax
Income tax expense for the year ended
31 December 2024 increased to US$28.4
million, compared to US$4.7 million in
2023. An increase of US$23.7 million was
driven by deferred tax liability recognized
from widening of the difference between
the tax base of property, plant, and
equipment and its IFRS base. Such an
increase in the difference was influenced
primarily by impairment reversal and
different depreciation rates /
methodologies, as well as the devaluation
of the tenge against the US dollar.
Liquidity and capital
resources
During the period under review, Nostrum
primarily relied on cash generated from
operations, and a limited use of existing
cash reserves. As the Group continues
implementing its new mixed-asset energy
strategy which is based on diversification
of both upstream and midstream business,
Nostrum evaluates the right risk/reward for
each of the opportunities, before making
decisions on capital allocation and
requirements for external debt financing.
Further details on the short-term and
medium-term liquidity analysis are
described in the Going concern statement
(page 50) and Viability statement (pages
43-44).
48 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Cash Flows
The following table sets forth the Group’s consolidated cash flow statement data for 2024 and the prior year:
FY 2024 FY 2023
In thousands of US Dollars
Before one-off
items
One-off
items Total
Before one-off
items
One-off
items Total
Net cash from operating activities 33,076 — 33,076 22,669 (24,890) (2,221)
Net cash from / used in investing activities 1,241 (27,710) (26,469) (7,193) (20,889) (28,082)
Net cash used in financing activities (17,713) — (17,713) (16,104) (25,518) (41,622)
Effects of exchange rate changes on cash (186) — (186) 52 — 52
Net cashflows for the year 16,418 (27,710) (11,292) (576) (71,297) (71,873)
Cash and cash equivalents at the beginning of the year 1 161,711 233,584
Cash and cash equivalents at the end of the year 1 150,419 161,711
1. Unrestricted cash balance (excludes DSRA and liquidation account funds).
Net cash flows from operating
activities before one-off items
Net cash from operating activities before
one-off items amounted to US$33.1 million
for the reporting period (2023: US$22.7
million). This increase was driven by higher
revenues and related cash proceeds, as
well as effective cost control despite
inflation and indexation adjustments.
Net cash used in investing activities
before one-off items
Net cash from investing activities before
one-off items for the reporting period
amounted to US$1.2 million (2023: US$7.2
million net cash outflow) and was mainly
due to:
• US$5.6 million (2023: US$9.9 million)
expenditure on various capital repairs,
upgrades of facilities and capital
expenditure related to well workover &
intervention programme.
• US$6.8 million interest received from
term deposits and money market funds
(2023: US$2.7 million interest received on
current accounts).
Net cash used in financing activities
before one-off items
Net cash used in financing activities before
one-off items for the reporting period
amounted to US$17.7 million (2023: US$16.1
million) and was mainly represented by
US$16.5 million coupon payment on SSNs
and SUNs (2023: US$16.1 million).
Net cash used for one-off items in 2024
• US$27.7 million net cash used in investing
activities for the reporting period was
mainly due to drilling programmes,
with US$21.2 million spent on the
Chinarevskoye field and US$5.8 million
spent on the Stepnoy Leopard fields.
Net cash used for one-off items in 2023
• US$24.9 million net cash used in
operating activities reflects taxes, fines
and penalties paid following the
comprehensive tax audit covering years
2016-2021.
• US$20.9 million net cash used in investing
activities reflects the payment of US$19.3
million for the acquisition of an 80%
interest in Positiv Invest LLP, which holds
rights to Stepnoy Leopard fields, further
US$3.6 million spent on the Stepnoy
Leopard fields two-well appraisal
programme, and US$3.8 million capital
expenditures on Chinarevskoye gas-lift
expansion. These cash outflows were
partially offset by net proceeds of US$5.8
million from restricted cash released
upon completion the bond restructuring
(comprising a US$22.8 million refund
from the escrow account, less a US$16.5
million deposit on the DSRA account).
• US$25.5 million net cash used in
financing activities reflects the payments
made upon completion of the bond
restructuring and included, a US$15.7
million for coupon on SSNs and SUNs
related to 2022, and a US$9.8 million for
lock-up fees and advisor fees.
Commitments
Liquidity risk is the risk that the Group will encounter difficulty raising funds to meet commitments associated with its financial liabilities.
Liquidity requirements are monitored on a regular basis and management seeks to ensure that sufficient funds are available to meet any
commitments as they arise. The table below summarizes the maturity profile of the Group’s financial liabilities as at 31 December 2024
based on contractual undiscounted payments (as audited):
In thousands of US Dollars On demand
Less than 3
months 3-12 months 1-5 years
More than 5
years Total
As at 31 December 2024
Borrowings — — 17,023 787,890 — 804,913
Trade payables 8,016 — 222 — — 8,238
Other current liabilities 11,821 — — — — 11,821
Due to Government of Kazakhstan — 258 773 4,124 1,288 6,443
19,837 258 18,018 792,014 1,288 831,415
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 49 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
The following table sets forth the Group’s consolidated cash flow statement data for 2024 and the prior year:
FY 2024 FY 2023
In thousands of US Dollars
Before one-off
items
One-off
items Total
Before one-off
items
One-off
items Total
Net cash from operating activities 33,076 — 33,076 22,669 (24,890) (2,221)
Net cash from / used in investing activities 1,241 (27,710) (26,469) (7,193) (20,889) (28,082)
Net cash used in financing activities (17,713) — (17,713) (16,104) (25,518) (41,622)
Effects of exchange rate changes on cash (186) — (186) 52 — 52
Net cashflows for the year 16,418 (27,710) (11,292) (576) (71,297) (71,873)
Cash and cash equivalents at the beginning of the year 1 161,711 233,584
Cash and cash equivalents at the end of the year 1 150,419 161,711
1. Unrestricted cash balance (excludes DSRA and liquidation account funds).
Net cash flows from operating
activities before one-off items
Net cash from operating activities before
one-off items amounted to US$33.1 million
for the reporting period (2023: US$22.7
million). This increase was driven by higher
revenues and related cash proceeds, as
well as effective cost control despite
inflation and indexation adjustments.
Net cash used in investing activities
before one-off items
Net cash from investing activities before
one-off items for the reporting period
amounted to US$1.2 million (2023: US$7.2
million net cash outflow) and was mainly
due to:
• US$5.6 million (2023: US$9.9 million)
expenditure on various capital repairs,
upgrades of facilities and capital
expenditure related to well workover &
intervention programme.
• US$6.8 million interest received from
term deposits and money market funds
(2023: US$2.7 million interest received on
current accounts).
Net cash used in financing activities
before one-off items
Net cash used in financing activities before
one-off items for the reporting period
amounted to US$17.7 million (2023: US$16.1
million) and was mainly represented by
US$16.5 million coupon payment on SSNs
and SUNs (2023: US$16.1 million).
Net cash used for one-off items in 2024
• US$27.7 million net cash used in investing
activities for the reporting period was
mainly due to drilling programmes,
with US$21.2 million spent on the
Chinarevskoye field and US$5.8 million
spent on the Stepnoy Leopard fields.
Net cash used for one-off items in 2023
• US$24.9 million net cash used in
operating activities reflects taxes, fines
and penalties paid following the
comprehensive tax audit covering years
2016-2021.
• US$20.9 million net cash used in investing
activities reflects the payment of US$19.3
million for the acquisition of an 80%
interest in Positiv Invest LLP, which holds
rights to Stepnoy Leopard fields, further
US$3.6 million spent on the Stepnoy
Leopard fields two-well appraisal
programme, and US$3.8 million capital
expenditures on Chinarevskoye gas-lift
expansion. These cash outflows were
partially offset by net proceeds of US$5.8
million from restricted cash released
upon completion the bond restructuring
(comprising a US$22.8 million refund
from the escrow account, less a US$16.5
million deposit on the DSRA account).
• US$25.5 million net cash used in
financing activities reflects the payments
made upon completion of the bond
restructuring and included, a US$15.7
million for coupon on SSNs and SUNs
related to 2022, and a US$9.8 million for
lock-up fees and advisor fees.
Commitments
Liquidity risk is the risk that the Group will encounter difficulty raising funds to meet commitments associated with its financial liabilities.
Liquidity requirements are monitored on a regular basis and management seeks to ensure that sufficient funds are available to meet any
commitments as they arise. The table below summarizes the maturity profile of the Group’s financial liabilities as at 31 December 2024
based on contractual undiscounted payments (as audited):
In thousands of US Dollars On demand
Less than 3
months 3-12 months 1-5 years
More than 5
years Total
As at 31 December 2024
Borrowings — — 17,023 787,890 — 804,913
Trade payables 8,016 — 222 — — 8,238
Other current liabilities 11,821 — — — — 11,821
Due to Government of Kazakhstan — 258 773 4,124 1,288 6,443
19,837 258 18,018 792,014 1,288 831,415
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 49 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
Financial review
continued
FINANCIAL REVIEW
Capital commitments
During the reporting period, Nostrum’s
cash used in capital expenditures for a
two-well drilling programme, infrastructure
development projects and well
workover and intervention works at the
Chinarevskoye field, amounted to US$26.4
million. These works enhanced production
capacities over 2024 and beyond.
Dividend policy
The Group currently pays no dividend and
has not done so since 2015, as the Board
determined it was not in the Company’s
best interests to do so. This will be reviewed
annually by the Board.
Going concern
The Group monitors on an ongoing basis
its liquidity position, near-term forecasts,
and key financial ratios to ensure that
sufficient funds are available to meet its
commitments as they arise and liabilities as
they fall due. The Group reforecasts its
rolling 3-year cashflows on a quarterly basis
and stress tests its future liquidity position
for changes in product prices, production
volumes, costs and other significant events.
The Directors are focused on a range of
potential opportunities and actions aimed
at improving the liquidity outlook in
the near-term and creating value from
long-term growth catalysts. These actions
include, amongst other things, the ongoing
base case scenario efforts to further
optimize capital expenditures, operating
costs and general and administration cost,
improving netbacks realized from product
sales, and increasing utilisation of the
Group’s processing infrastructure.
The Directors’ going concern assessment is
supported by the future cash flow forecasts
for the going concern period to 30 April
2026. The Group had unrestricted cash
balances of US$150.4 million as at 31
December 2024, (including liquid current
investments of US$82 million), and US$16.8
million in the DSRA. The base case going
concern assessment reflects production
forecasts consistent with the Board
approved plans and assumes a flat Brent oil
price of US$70/bbl. Under the base case
going concern assessment for the period to
30 April 2026, the Group forecasts to have a
closing cash balance of over US$117 million,
including over US$18.3 million in the DSRA.
The base case scenario assumes
commencement of the capital expenditures
required for development of the Stepnoy
Leopard fields. The base case scenario has
also been tested for sensitivity against the
key assumptions over the period of
assessment, including US$10/boe
reduction in Brent prices, 10% reduction
in forecast production and third-party
processing volumes, 10% increase in
operating and G&A costs, addition of
contingent capital expenditures and
possible fines and penalties in the event of
any non-compliance issues. As a result of
such sensitivity analysis, the Directors
concluded that the Group would be
financially capable of withstanding
downside volatility of these key
assumptions individually or in aggregate.
After careful consideration, the Directors have
a reasonable expectation that the Group and
the Company have sufficient financial
resources to continue in operation for the
going concern period to 30 April 2026.
Notwithstanding that the going concern
period has been defined as the period to
30 April 2026, the Directors have also
considered events and conditions beyond
the going concern period of assessment
which may cast doubt on the Group’s ability
to continue as a going concern. The
Directors draw attention to the Viability
Statement on pages 43-44 of the 2024
Annual Report which highlights the
potential necessity in the future for a partial
or full restructuring of the Group’s SSNs
and SUNs (together “the Notes”).
In forming an assessment of the Group’s
ability to continue as a going concern post
30 April 2026, the Board has considered
the fact that the Notes are due to mature on
30 June 2026 and has made a material
assumption about the Group’s ability to
successfully restructure the Notes.
As at the date of publication of these
consolidated financial statements, although
the Directors believe, to the best of their
knowledge, that the Notes could be
successfully restructured, the ability to
restructure and the precise timing and
terms of such restructuring of the Notes
represent a material uncertainty about the
Company’s ability to continue as a going
concern and to realise its assets and
discharge its liabilities in the normal course
of business beyond the assessment period
ending 30 April 2026.
In accordance with provision 30 of the UK
Corporate Governance Code 2018, the
Directors consider it appropriate to adopt
the going concern basis of accounting in
preparing the consolidated financial
statements. If the Group is unable to
successfully restructure or extend the
maturity of the Notes and continue to
realise assets and discharge liabilities in
the normal course of business, it would be
necessary to adjust the amounts in the
statement of financial position in the future
to reflect these circumstances, which may
materially change the measurement and
classification of certain figures contained in
these consolidated financial statements.
Alternative performance
measures
In the discussion of the Group’s
reported operating results, alternative
performance measures (APMs) are
presented to provide readers with
additional financial information that is
regularly reviewed by management to
assess the financial performance or
financial health of the Group or is useful
to investors and stakeholders to assess
the Group’s performance and position.
However, this additional information
presented is not uniformly defined by
all companies, including those in the
Group’s industry. Accordingly, it may
not be comparable with similarly titled
measures and disclosures by other
companies.
Certain information presented is
derived from amounts calculated in
accordance with IFRS but is not itself
an expressly permitted IFRS measure.
Such measures should not be viewed
in isolation or as an alternative to the
equivalent IFRS measure.
EBITDA
EBITDA is defined as the results of
operating activities before depreciation
and amortization, share-based
compensation, fair value gains and
losses on derivative instruments, foreign
exchange losses, finance costs, finance
income, non-core income or expenses
and taxes, and includes any cash
proceeds received or paid out from
hedging activity. This metric is relevant
as it allows management to assess the
operating performance of the Group in
the absence of one-off and non-cash
items.
Operating costs
Operating costs are the cost of sales
excluding depreciation and change in
stock. This metric is relevant as it allows
management to see the cost base of the
Company on a cash basis.
50 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
FINANCIAL REVIEW
Capital commitments
During the reporting period, Nostrum’s
cash used in capital expenditures for a
two-well drilling programme, infrastructure
development projects and well
workover and intervention works at the
Chinarevskoye field, amounted to US$26.4
million. These works enhanced production
capacities over 2024 and beyond.
Dividend policy
The Group currently pays no dividend and
has not done so since 2015, as the Board
determined it was not in the Company’s
best interests to do so. This will be reviewed
annually by the Board.
Going concern
The Group monitors on an ongoing basis
its liquidity position, near-term forecasts,
and key financial ratios to ensure that
sufficient funds are available to meet its
commitments as they arise and liabilities as
they fall due. The Group reforecasts its
rolling 3-year cashflows on a quarterly basis
and stress tests its future liquidity position
for changes in product prices, production
volumes, costs and other significant events.
The Directors are focused on a range of
potential opportunities and actions aimed
at improving the liquidity outlook in
the near-term and creating value from
long-term growth catalysts. These actions
include, amongst other things, the ongoing
base case scenario efforts to further
optimize capital expenditures, operating
costs and general and administration cost,
improving netbacks realized from product
sales, and increasing utilisation of the
Group’s processing infrastructure.
The Directors’ going concern assessment is
supported by the future cash flow forecasts
for the going concern period to 30 April
2026. The Group had unrestricted cash
balances of US$150.4 million as at 31
December 2024, (including liquid current
investments of US$82 million), and US$16.8
million in the DSRA. The base case going
concern assessment reflects production
forecasts consistent with the Board
approved plans and assumes a flat Brent oil
price of US$70/bbl. Under the base case
going concern assessment for the period to
30 April 2026, the Group forecasts to have a
closing cash balance of over US$117 million,
including over US$18.3 million in the DSRA.
The base case scenario assumes
commencement of the capital expenditures
required for development of the Stepnoy
Leopard fields. The base case scenario has
also been tested for sensitivity against the
key assumptions over the period of
assessment, including US$10/boe
reduction in Brent prices, 10% reduction
in forecast production and third-party
processing volumes, 10% increase in
operating and G&A costs, addition of
contingent capital expenditures and
possible fines and penalties in the event of
any non-compliance issues. As a result of
such sensitivity analysis, the Directors
concluded that the Group would be
financially capable of withstanding
downside volatility of these key
assumptions individually or in aggregate.
After careful consideration, the Directors have
a reasonable expectation that the Group and
the Company have sufficient financial
resources to continue in operation for the
going concern period to 30 April 2026.
Notwithstanding that the going concern
period has been defined as the period to
30 April 2026, the Directors have also
considered events and conditions beyond
the going concern period of assessment
which may cast doubt on the Group’s ability
to continue as a going concern. The
Directors draw attention to the Viability
Statement on pages 43-44 of the 2024
Annual Report which highlights the
potential necessity in the future for a partial
or full restructuring of the Group’s SSNs
and SUNs (together “the Notes”).
In forming an assessment of the Group’s
ability to continue as a going concern post
30 April 2026, the Board has considered
the fact that the Notes are due to mature on
30 June 2026 and has made a material
assumption about the Group’s ability to
successfully restructure the Notes.
As at the date of publication of these
consolidated financial statements, although
the Directors believe, to the best of their
knowledge, that the Notes could be
successfully restructured, the ability to
restructure and the precise timing and
terms of such restructuring of the Notes
represent a material uncertainty about the
Company’s ability to continue as a going
concern and to realise its assets and
discharge its liabilities in the normal course
of business beyond the assessment period
ending 30 April 2026.
In accordance with provision 30 of the UK
Corporate Governance Code 2018, the
Directors consider it appropriate to adopt
the going concern basis of accounting in
preparing the consolidated financial
statements. If the Group is unable to
successfully restructure or extend the
maturity of the Notes and continue to
realise assets and discharge liabilities in
the normal course of business, it would be
necessary to adjust the amounts in the
statement of financial position in the future
to reflect these circumstances, which may
materially change the measurement and
classification of certain figures contained in
these consolidated financial statements.
Alternative performance
measures
In the discussion of the Group’s
reported operating results, alternative
performance measures (APMs) are
presented to provide readers with
additional financial information that is
regularly reviewed by management to
assess the financial performance or
financial health of the Group or is useful
to investors and stakeholders to assess
the Group’s performance and position.
However, this additional information
presented is not uniformly defined by
all companies, including those in the
Group’s industry. Accordingly, it may
not be comparable with similarly titled
measures and disclosures by other
companies.
Certain information presented is
derived from amounts calculated in
accordance with IFRS but is not itself
an expressly permitted IFRS measure.
Such measures should not be viewed
in isolation or as an alternative to the
equivalent IFRS measure.
EBITDA
EBITDA is defined as the results of
operating activities before depreciation
and amortization, share-based
compensation, fair value gains and
losses on derivative instruments, foreign
exchange losses, finance costs, finance
income, non-core income or expenses
and taxes, and includes any cash
proceeds received or paid out from
hedging activity. This metric is relevant
as it allows management to assess the
operating performance of the Group in
the absence of one-off and non-cash
items.
Operating costs
Operating costs are the cost of sales
excluding depreciation and change in
stock. This metric is relevant as it allows
management to see the cost base of the
Company on a cash basis.
50 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Five-year summary
In millions of US$ (unless mentioned otherwise) 2024 2023 2022 2021 2020
EBITDA reconciliation
Profit/(loss) before income tax 1.8 836.3 (81.8) 5.6 (401.8)
Add back / (deduct):
Finance costs 117.2 102.8 123.1 116.7 102.1
Impairment (reversal) / charge (86.7) — — (74.2) 286.6
Gain on debt-to-equity exchange — (769.6) — — —
Fair value adjustment on recognition of debt instruments — (174.4) — — —
Employee share options-fair value adjustment — — — (0.2) (0.5)
Foreign exchange (gain) / loss, net (0.9) 1.0 (0.3) 0.3 1.8
Interest income (7.1) (2.7) (0.3) (0.3) (0.3)
Other expenses 12.4 14.7 29.8 13.2 7.6
Other income (13.4) (6.4) (6.8) (5.9) (4.8)
Depreciation, depletion and amortisation 25.6 40.5 51.8 57.3 89.8
EBITDA 48.9 42.1 115.7 112.5 80.5
Operating costs reconciliation
Cost of sales 72.0 77.6 84.1 87.8 125.4
Less:
Depreciation, depletion and amortisation (25.5) (40.3) (40.3) (55.6) (86.3)
Cost of raw materials purchased (4.1) — — — —
Change in stock (0.3) (0.7) (1.2) (0.4) (7.3)
Operating costs 42.1 36.6 42.6 31.8 31.8
G&A reconciliation
General and administrative expenses 14.0 13.8 12.1 12.1 14.7
Adjusted for:
Depreciation and amortisation (0.1) (0.2) (0.2) (0.2) (0.6)
G&A 13.9 13.6 11.9 11.9 14.1
Net debt reconciliation
Long-term borrowings 571.4 471.7 — — —
Current portion of long-term borrowings 0.2 0.2 1,396.5 1,289.6 1,186.3
Less:
Cash and cash equivalents 150.4 161.7 233.6 165.2 78.6
Net debt 421.2 310.2 1,162.9 1,124.4 1,107.7
Net cash flows from operating activities 33.1 (2.2) 102.2 117.4 82.7
Net cash used in investing activities (26.5) (28.1) (15.8) (19.8) (40.1)
Net cash used in financing activities (17.7) (41.6) (17.5) (10.9) (58.4)
EBITDA margin 1 35.7% 35.2% 57.9% 57.6% 45.7%
Share price at end of year (US$) 0.09 0.09 0.03 0.07 0.10
Shares outstanding (`000s) 169,382 169,382 188,183 188,183 188,183
Share options outstanding (`000s) 2,948.9 2,948.9 3,432 3,432 3,432
1. EBITDA margin is calculated as EBITDA divided by total revenue.
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 51 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
In millions of US$ (unless mentioned otherwise) 2024 2023 2022 2021 2020
EBITDA reconciliation
Profit/(loss) before income tax 1.8 836.3 (81.8) 5.6 (401.8)
Add back / (deduct):
Finance costs 117.2 102.8 123.1 116.7 102.1
Impairment (reversal) / charge (86.7) — — (74.2) 286.6
Gain on debt-to-equity exchange — (769.6) — — —
Fair value adjustment on recognition of debt instruments — (174.4) — — —
Employee share options-fair value adjustment — — — (0.2) (0.5)
Foreign exchange (gain) / loss, net (0.9) 1.0 (0.3) 0.3 1.8
Interest income (7.1) (2.7) (0.3) (0.3) (0.3)
Other expenses 12.4 14.7 29.8 13.2 7.6
Other income (13.4) (6.4) (6.8) (5.9) (4.8)
Depreciation, depletion and amortisation 25.6 40.5 51.8 57.3 89.8
EBITDA 48.9 42.1 115.7 112.5 80.5
Operating costs reconciliation
Cost of sales 72.0 77.6 84.1 87.8 125.4
Less:
Depreciation, depletion and amortisation (25.5) (40.3) (40.3) (55.6) (86.3)
Cost of raw materials purchased (4.1) — — — —
Change in stock (0.3) (0.7) (1.2) (0.4) (7.3)
Operating costs 42.1 36.6 42.6 31.8 31.8
G&A reconciliation
General and administrative expenses 14.0 13.8 12.1 12.1 14.7
Adjusted for:
Depreciation and amortisation (0.1) (0.2) (0.2) (0.2) (0.6)
G&A 13.9 13.6 11.9 11.9 14.1
Net debt reconciliation
Long-term borrowings 571.4 471.7 — — —
Current portion of long-term borrowings 0.2 0.2 1,396.5 1,289.6 1,186.3
Less:
Cash and cash equivalents 150.4 161.7 233.6 165.2 78.6
Net debt 421.2 310.2 1,162.9 1,124.4 1,107.7
Net cash flows from operating activities 33.1 (2.2) 102.2 117.4 82.7
Net cash used in investing activities (26.5) (28.1) (15.8) (19.8) (40.1)
Net cash used in financing activities (17.7) (41.6) (17.5) (10.9) (58.4)
EBITDA margin 1 35.7% 35.2% 57.9% 57.6% 45.7%
Share price at end of year (US$) 0.09 0.09 0.03 0.07 0.10
Shares outstanding (`000s) 169,382 169,382 188,183 188,183 188,183
Share options outstanding (`000s) 2,948.9 2,948.9 3,432 3,432 3,432
1. EBITDA margin is calculated as EBITDA divided by total revenue.
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 51 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
Our ESG strategy and targets
ESG REVIEW
Transitioning to cleaner energy, empowering people,
and upholding transparency and ethics.
Our commitments Material ESG topics Alignment with the UN SDGs
Environment
Our focus: Environmental protection and climate action
Contribute to the shift toward
cleaner energy while minimising
the environmental impact of
our operations
Climate action/GHG emissions/ Energy
efficiency/ Emissions, effluents, waste
and resource use/ Land Use and
Biodiversity
Social
Our focus: Safe Operations
Ensure the safety of our employees,
contractors, and communities,
adhere to the highest industry
standards and continuously
improve our safety culture
Occupational Health and Safety
Our focus: Empowering people and communities
Foster an inclusive, and diverse
workplace while supporting local
economic growth and advancing
social development
Community Relations/ Human Capital
Governance
Our focus: Business Ethics
Maintain strong corporate
governance, uphold strict
compliance standards, and
foster a culture rooted in ethics
and integrity
Bribery and Corruption
Nostrum ranks in the 11th percentile among Oil & Gas Producers in Sustainalytics’ 2024 ESG Risk Ratings, with a high-risk score of 31.0 (on
a scale from 100 to 0). The company’s overall exposure to ESG risks is high, aligning with the subindustry average. Key material ESG issues
identified include: Emissions, Effluents, and Waste, Carbon – Own Operations, Occupational Health and Safety. Despite these challenges,
Nostrum’s ESG Risk Management is rated as strong, reflecting our commitment to sustainability and responsible business practices.
In 2024, we continued our participation in CDP, the global independent environmental disclosure system. Our responses on Climate
and Water were assessed, resulting in a “B” score for each (on a scale from F to A).
52 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
ESG REVIEW
Transitioning to cleaner energy, empowering people,
and upholding transparency and ethics.
Our commitments Material ESG topics Alignment with the UN SDGs
Environment
Our focus: Environmental protection and climate action
Contribute to the shift toward
cleaner energy while minimising
the environmental impact of
our operations
Climate action/GHG emissions/ Energy
efficiency/ Emissions, effluents, waste
and resource use/ Land Use and
Biodiversity
Social
Our focus: Safe Operations
Ensure the safety of our employees,
contractors, and communities,
adhere to the highest industry
standards and continuously
improve our safety culture
Occupational Health and Safety
Our focus: Empowering people and communities
Foster an inclusive, and diverse
workplace while supporting local
economic growth and advancing
social development
Community Relations/ Human Capital
Governance
Our focus: Business Ethics
Maintain strong corporate
governance, uphold strict
compliance standards, and
foster a culture rooted in ethics
and integrity
Bribery and Corruption
Nostrum ranks in the 11th percentile among Oil & Gas Producers in Sustainalytics’ 2024 ESG Risk Ratings, with a high-risk score of 31.0 (on
a scale from 100 to 0). The company’s overall exposure to ESG risks is high, aligning with the subindustry average. Key material ESG issues
identified include: Emissions, Effluents, and Waste, Carbon – Own Operations, Occupational Health and Safety. Despite these challenges,
Nostrum’s ESG Risk Management is rated as strong, reflecting our commitment to sustainability and responsible business practices.
In 2024, we continued our participation in CDP, the global independent environmental disclosure system. Our responses on Climate
and Water were assessed, resulting in a “B” score for each (on a scale from F to A).
52 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
This year’s report was prepared using the Global Reporting initiative (GRI) Standards in accordance, following the 2021 Sector Guide
11 for Oil and Gas. and the Task Force for Climate-related Financial Disclosures (TCFD) recommendations.
Climate Change Water Security
Our reporting framework Current ESG rating
31.0 B
(on a scale from A to D-) (on a scale from 100 to 0)
B
Our medium-term goals What we did in 2024 What we plan to do in 2025
Environmental stewardship
• Maintain strong Environmental
leadership to ensure safe operations
and minimise environmental impacts.
• Ensure full compliance with emissions,
effluents and wastes regulations and
limits, adhering to the highest
environmental standards.
• 256,089 tons of CO2 with our actual GHG
emissions in CO2 equivalent
• 6.3% actual air emissions decrease
• 99.96% total water recycled
• B score for the climate change module and
for water security module as well
• Not to exceed forecast target of 290,209
tons of CO2 (or equivalent level).
Safe Operations
• Enhance Health and Safety practices to
safeguard employees, contractors, and
neighboring communities
• 0.6 TRIR (per million man-hours)
• Zero LTIR (incidents per million man-hours)
• 0.5 RTI (incidents per million man-hours)
• Zero fatalities among employees and
contractors
• Less than 1.9 TRIR
• Less than 1.05 LTIR
• Less than 0.75 RTI
Shared Prosperity
• Support local development through
funding, employment, and sustainable
partnerships
• Advance diversity and talent
development with inclusive initiatives
and skill-building programmes
• 88.2% of our supplier budget was spent on
local suppliers – an increase of 13.3%
compared to 2023.
• US$1.2m provided support for flood
victims
• 20 houses built to people affected by the
flooding in West Kazakhstan Region
Equality and transparency
• Align Senior Management Team
incentives with ESG performance targets.
• Strengthen ESG and climate reporting
to enhance transparency.
• Maintain a zero-tolerance approach
to ethical breaches and human rights
violations.
• 31.0 ESG Risk rating from the international
agency Sustainalytics (in 2023: 30.1)
• US$1.2bn taxes paid since inception
• US$27.93m paid to governments and its
subsidiaries.
• 31% women in senior management.
Disclaimer Text
Copyright © 2025 Sustainalytics, a Morningstar company. All rights reserved. This report includes information and data provided by Sustainalytics and/or its content
providers. Information provided by Sustainalytics is not directed to or intended for use or distribution to India-based clients or users and its distribution to Indian
resident individuals or entities is not permitted. Morningstar/Sustainalytics accepts no responsibility or liability whatsoever for the actions of third parties in this respect.
Use of such data is subject to conditions available at https://www.sustainalytics.com/legal-disclaimers.
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 53 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
11 for Oil and Gas. and the Task Force for Climate-related Financial Disclosures (TCFD) recommendations.
Climate Change Water Security
Our reporting framework Current ESG rating
31.0 B
(on a scale from A to D-) (on a scale from 100 to 0)
B
Our medium-term goals What we did in 2024 What we plan to do in 2025
Environmental stewardship
• Maintain strong Environmental
leadership to ensure safe operations
and minimise environmental impacts.
• Ensure full compliance with emissions,
effluents and wastes regulations and
limits, adhering to the highest
environmental standards.
• 256,089 tons of CO2 with our actual GHG
emissions in CO2 equivalent
• 6.3% actual air emissions decrease
• 99.96% total water recycled
• B score for the climate change module and
for water security module as well
• Not to exceed forecast target of 290,209
tons of CO2 (or equivalent level).
Safe Operations
• Enhance Health and Safety practices to
safeguard employees, contractors, and
neighboring communities
• 0.6 TRIR (per million man-hours)
• Zero LTIR (incidents per million man-hours)
• 0.5 RTI (incidents per million man-hours)
• Zero fatalities among employees and
contractors
• Less than 1.9 TRIR
• Less than 1.05 LTIR
• Less than 0.75 RTI
Shared Prosperity
• Support local development through
funding, employment, and sustainable
partnerships
• Advance diversity and talent
development with inclusive initiatives
and skill-building programmes
• 88.2% of our supplier budget was spent on
local suppliers – an increase of 13.3%
compared to 2023.
• US$1.2m provided support for flood
victims
• 20 houses built to people affected by the
flooding in West Kazakhstan Region
Equality and transparency
• Align Senior Management Team
incentives with ESG performance targets.
• Strengthen ESG and climate reporting
to enhance transparency.
• Maintain a zero-tolerance approach
to ethical breaches and human rights
violations.
• 31.0 ESG Risk rating from the international
agency Sustainalytics (in 2023: 30.1)
• US$1.2bn taxes paid since inception
• US$27.93m paid to governments and its
subsidiaries.
• 31% women in senior management.
Disclaimer Text
Copyright © 2025 Sustainalytics, a Morningstar company. All rights reserved. This report includes information and data provided by Sustainalytics and/or its content
providers. Information provided by Sustainalytics is not directed to or intended for use or distribution to India-based clients or users and its distribution to Indian
resident individuals or entities is not permitted. Morningstar/Sustainalytics accepts no responsibility or liability whatsoever for the actions of third parties in this respect.
Use of such data is subject to conditions available at https://www.sustainalytics.com/legal-disclaimers.
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 53 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
ESG REVIEW
Material ESG topics
GRI 3-1
Management of
Material Topics
To ensure our ESG reporting addresses the
issues most critical to our stakeholders, we
conduct regular materiality assessments.
These assessments provide valuable
insights that form the foundation of our
ESG reporting and strategy.
Through this process, we have identified
seven key ESG material topics that are
fundamental to achieving our strategic
objectives. These topics have been
prioritised based on their relevance to our
business operations and their significance
to stakeholders, aligning with the principle
of double materiality.
Double materiality reflects both the impact
of sustainable development on our
organisation and the impact of our
operations on sustainable development.
These material topics represent areas with
the potential to significantly influence our
financial and operational performance, as
well as the societies and ecosystems in the
regions where we operate. Each material
ESG topic also represents a potential ESG
risk for our business, reinforcing their
importance in shaping our management
approach and long-term resilience.
In 2024, we conducted a reassessment of
our material ESG issues to ensure their
continued relevance and alignment with
our stakeholders’ priorities. This review
included a context analysis of global
agendas, reporting frameworks, rankings,
and good practices from sector peers,
confirming that our previously identified
material topics remain unchanged.
Assessing material ESG topics
STEP 1:
Analyse the internal and external environment
Regulatory and Industry Analysis
• Oil and gas industry associations (IPIECA, API, IOGP)
• Environmental, labour laws, safety standards, national reporting requirements
Internal Data Collection
• Environmental reports, records
• Safety records
• Governance practices
Analysis of international standards and ESG rating agencies
• Rating agencies (Sustainalytics, MSCI, Refinitiv, EcoVadis, ISS)
• Global reporting initiatives (GRI, SDGs, CDP, SASB, IFRS)
Engagement with stakeholders
• Regular direct engagement with stakeholders
• Membership in industry associations (KazEnergy, ESG-Club)
Benchmarking
• Global leading Oil and Gas companies
Analysis of media, research, consulting, audit companies
• Articles
• Researchers, consultants, auditors (McKinsey, KPMG, EY, PWC, BCG, S&P, etc.)
STEP 2:
Identify actual and potential impact
Forming a pool of topics that reflect the industry’s characteristics
STEP 3:
Assess the significance of the impact
STEP 4:
Select material issues for reporting
STEP 5:
Performance, reporting, periodic updates of the
materiality analysis
54 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Material ESG topics
GRI 3-1
Management of
Material Topics
To ensure our ESG reporting addresses the
issues most critical to our stakeholders, we
conduct regular materiality assessments.
These assessments provide valuable
insights that form the foundation of our
ESG reporting and strategy.
Through this process, we have identified
seven key ESG material topics that are
fundamental to achieving our strategic
objectives. These topics have been
prioritised based on their relevance to our
business operations and their significance
to stakeholders, aligning with the principle
of double materiality.
Double materiality reflects both the impact
of sustainable development on our
organisation and the impact of our
operations on sustainable development.
These material topics represent areas with
the potential to significantly influence our
financial and operational performance, as
well as the societies and ecosystems in the
regions where we operate. Each material
ESG topic also represents a potential ESG
risk for our business, reinforcing their
importance in shaping our management
approach and long-term resilience.
In 2024, we conducted a reassessment of
our material ESG issues to ensure their
continued relevance and alignment with
our stakeholders’ priorities. This review
included a context analysis of global
agendas, reporting frameworks, rankings,
and good practices from sector peers,
confirming that our previously identified
material topics remain unchanged.
Assessing material ESG topics
STEP 1:
Analyse the internal and external environment
Regulatory and Industry Analysis
• Oil and gas industry associations (IPIECA, API, IOGP)
• Environmental, labour laws, safety standards, national reporting requirements
Internal Data Collection
• Environmental reports, records
• Safety records
• Governance practices
Analysis of international standards and ESG rating agencies
• Rating agencies (Sustainalytics, MSCI, Refinitiv, EcoVadis, ISS)
• Global reporting initiatives (GRI, SDGs, CDP, SASB, IFRS)
Engagement with stakeholders
• Regular direct engagement with stakeholders
• Membership in industry associations (KazEnergy, ESG-Club)
Benchmarking
• Global leading Oil and Gas companies
Analysis of media, research, consulting, audit companies
• Articles
• Researchers, consultants, auditors (McKinsey, KPMG, EY, PWC, BCG, S&P, etc.)
STEP 2:
Identify actual and potential impact
Forming a pool of topics that reflect the industry’s characteristics
STEP 3:
Assess the significance of the impact
STEP 4:
Select material issues for reporting
STEP 5:
Performance, reporting, periodic updates of the
materiality analysis
54 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
ESG Management
At Nostrum, we have implemented robust
corporate governance practices to
effectively oversee and execute our ESG
strategy. Our governance structure ensures
that the impacts, risks, and opportunities
associated with ESG are seamlessly
integrated into decision-making processes
across all levels of the Company. This is
achieved through clearly defined roles,
responsibilities, processes, and controls
tailored to ESG objectives.
Our ESG governance structure adheres to
international best practices, emphasising
independence, transparency, inclusivity,
and accountability. It is fully aligned with
the Company’s purpose, strategies, and
values, ensuring the effective and efficient
management of ESG objectives, plans,
initiatives, and actions.
In order to enact the principle of senior
management engagement in sustainable
development management issues, key
performance indicators (KPIs) were
sanctioned specifically pertaining to
ESG and Health & Safety performance.
See page 23.
Community relations
Impact on Nostrum’s business
Importance to Nostrum’s stakeholders
Moderate
Moderate
Very high
Very high
Occupational
health and safety
Human capital Land use and
biodiversity
Emissions, effluents,
waste and resource use
Bribery and
corruption
Climate action/GHG
emissions/energy efficiency
Material ESG issues
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 55 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
At Nostrum, we have implemented robust
corporate governance practices to
effectively oversee and execute our ESG
strategy. Our governance structure ensures
that the impacts, risks, and opportunities
associated with ESG are seamlessly
integrated into decision-making processes
across all levels of the Company. This is
achieved through clearly defined roles,
responsibilities, processes, and controls
tailored to ESG objectives.
Our ESG governance structure adheres to
international best practices, emphasising
independence, transparency, inclusivity,
and accountability. It is fully aligned with
the Company’s purpose, strategies, and
values, ensuring the effective and efficient
management of ESG objectives, plans,
initiatives, and actions.
In order to enact the principle of senior
management engagement in sustainable
development management issues, key
performance indicators (KPIs) were
sanctioned specifically pertaining to
ESG and Health & Safety performance.
See page 23.
Community relations
Impact on Nostrum’s business
Importance to Nostrum’s stakeholders
Moderate
Moderate
Very high
Very high
Occupational
health and safety
Human capital Land use and
biodiversity
Emissions, effluents,
waste and resource use
Bribery and
corruption
Climate action/GHG
emissions/energy efficiency
Material ESG issues
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 55 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
ESG REVIEW
Safe operations
The safety of our employees and contractors is a top
priority for Nostrum, and we are dedicated to upholding
the highest international health and safety regulations.
We delivered a year of positive safety performance
in 2024.
Our company goal is Zero incidents which
can cause any harm to company and
contractors’ personnel, the environment
and as a result to operational process and
reputation of our company.
Safety Culture
GRI 403-9
Nostrum prioritises safety and compliance
with established standards. Its approach is
guided by the shared beliefs, perceptions
and values of employees regarding risks
within the organisation, workplace or
community.
At Nostrum, fostering a strong safety
culture is essential for the well-being
of our employees, the efficiency of our
operations, and the integrity of our
brand. Prioritising safety underscores our
dedication to ensuring a secure and
healthy workplace for all stakeholders. This
commitment not only minimises workplace
accidents and injuries but also builds trust
and confidence within our team. Moreover,
adopting a safety culture contributes
to increased productivity, reduced
operational expenses, and a boost in
overall morale. In essence, cultivating
and upholding a comprehensive safety
culture signifies our unwavering
commitment to employee welfare
and business sustainability.
At Nostrum, our safety and environmental
practices are based on four key pillars: HSE
leadership, incident management, process
safety and asset integrity, and contractor
HSE management.
Each pillar is fundamental to maintaining a
safe, secure, and environmentally aware
workplace. HSE leadership blends safety
into every level of our company, while
rigorous incident investigation enables
us to learn from past experiences and
continuously improve our processes.
Process safety keeps our operations
safe, while effective contractor HSE
management aligns everyone with
our safety values.
Beyond these, we enforce “Golden Rules”,
provide extensive straining on safety
practices and apply a comprehensive
Governance framework as outlined in the
TCFD Governance recommendations on
pages 79-80.
HSE Management System standards and
procedures are regularly updated and
implemented.
2024 highlights
Fatalities
Zero
Lost Time Incidents Frequency
Zero
Number of employees that took
advanced HSE training
1,102
Road Traffic Incidents
0.5
Total Recordable Incidents
Frequency
0.6
What we did
in 2024
• Developed and implemented an ESG
assessment framework for suppliers of
goods and services and conducted the
inaugural assessment of suppliers
against ESG criteria
• Held workshops with suppliers and
trained the Contract&Procurement
department on sustainable
procurement practices
• Continued raising awareness among
employees on ESG, providing training,
and conducted the Corporate
Sustainability Innovation Game
• Developed a Green Procurement Policy
to support sustainability initiatives
What we plan to do
in 2025
• Expand the ESG Supplier Assessment
project by involving more suppliers and
integrating comprehensive HSE and
ESG screening procedures prior to
contract signing
56 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Safe operations
The safety of our employees and contractors is a top
priority for Nostrum, and we are dedicated to upholding
the highest international health and safety regulations.
We delivered a year of positive safety performance
in 2024.
Our company goal is Zero incidents which
can cause any harm to company and
contractors’ personnel, the environment
and as a result to operational process and
reputation of our company.
Safety Culture
GRI 403-9
Nostrum prioritises safety and compliance
with established standards. Its approach is
guided by the shared beliefs, perceptions
and values of employees regarding risks
within the organisation, workplace or
community.
At Nostrum, fostering a strong safety
culture is essential for the well-being
of our employees, the efficiency of our
operations, and the integrity of our
brand. Prioritising safety underscores our
dedication to ensuring a secure and
healthy workplace for all stakeholders. This
commitment not only minimises workplace
accidents and injuries but also builds trust
and confidence within our team. Moreover,
adopting a safety culture contributes
to increased productivity, reduced
operational expenses, and a boost in
overall morale. In essence, cultivating
and upholding a comprehensive safety
culture signifies our unwavering
commitment to employee welfare
and business sustainability.
At Nostrum, our safety and environmental
practices are based on four key pillars: HSE
leadership, incident management, process
safety and asset integrity, and contractor
HSE management.
Each pillar is fundamental to maintaining a
safe, secure, and environmentally aware
workplace. HSE leadership blends safety
into every level of our company, while
rigorous incident investigation enables
us to learn from past experiences and
continuously improve our processes.
Process safety keeps our operations
safe, while effective contractor HSE
management aligns everyone with
our safety values.
Beyond these, we enforce “Golden Rules”,
provide extensive straining on safety
practices and apply a comprehensive
Governance framework as outlined in the
TCFD Governance recommendations on
pages 79-80.
HSE Management System standards and
procedures are regularly updated and
implemented.
2024 highlights
Fatalities
Zero
Lost Time Incidents Frequency
Zero
Number of employees that took
advanced HSE training
1,102
Road Traffic Incidents
0.5
Total Recordable Incidents
Frequency
0.6
What we did
in 2024
• Developed and implemented an ESG
assessment framework for suppliers of
goods and services and conducted the
inaugural assessment of suppliers
against ESG criteria
• Held workshops with suppliers and
trained the Contract&Procurement
department on sustainable
procurement practices
• Continued raising awareness among
employees on ESG, providing training,
and conducted the Corporate
Sustainability Innovation Game
• Developed a Green Procurement Policy
to support sustainability initiatives
What we plan to do
in 2025
• Expand the ESG Supplier Assessment
project by involving more suppliers and
integrating comprehensive HSE and
ESG screening procedures prior to
contract signing
56 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
In 2024 the following procedures have
been developed, updated and issued:
• Water Policy
• Rational Use of Water
• Elimination of pollutants spills
• GHG monitoring procedure
• HSE Audit procedure
• PTW procedure
• Industrial Control Charter
• Extreme weather procedure
• Scaffolding procedure
• Journey Management
Risk Management
GRI 403-2
In 2024 Workplace Hazard Observation
programme continued to be used to
maintain the campaign launched in 2019.
The main purpose of the campaign was to
train all employees how to intervene and
report when they observe unsafe situation
or hazardous behaviour. The Workplace
Hazard Procedure was rolled out and
workshops were conducted for all staff.
When any hazard is identified every worker
can fill the Hazard Observation Card which
allows to report unsafe conditions they
observe at the workplace, any safe or
unsafe behaviour of personnel while they
perform activities and to make suggestions
on HSE improvement.
HSE Incentive Scheme is in place and HSE
awards are conducted to grant different
promo items to those employees who
raised the best Hazard Observation.
A comprehensive Stop Work Policy is
established to give a right to every
employee to stop any task or job
assignment if they believe it poses an
immediate danger to their personal safety
or that of others. This obligation extends to
all levels of our organisation, from top
management to individual contributors. In
case of disagreement between the
intervention party and his direct manager,
the matter shall be escalated immediate to
the next level of the organisation. The Stop
Work Policy helps to identify any unsafe
conditions as they are encouraged to be
vigilant and proactive in identifying any
unsafe conditions or hazards in the
workplace. Whether it is an equipment
malfunction, inadequate training, or an
environmental concern the employees are
able to recognise potential risks.
To control certain types of work that are
identified as potentially or highly hazardous
a PTW system is in place. For every
hazardous task a Job Safety Analysis is
completed by Performing Authority to
identify hazards, assess associated risks
and identify control measures, as well as the
personnel actions in case of emergency.
Incidence rates and
investigation
In 2024, our Total Recordable Incidents
Frequency rate dropped to 0.63 per
million-man hours, a 16% decrease from 2023.
There was no one Lost Time Incident in 2024.
We experienced two Road Traffic Incidents
in 2024 for contractor’s operations and
nobody got injured in these incidents with
minor damage to vehicles. We undertook
comprehensive investigation and
implemented measures to avoid such
incidents in the future.
Nostrum notes that its activities are
potentially hazardous. The Group’s
management, employees and contractors
are trained to understand that no accidents
are inevitable as we strive to inculcate an
environment in which safety consciousness
and mitigating actions are such that zero
incidents are possible and achievable.
For all incidents, we follow our incident
investigation procedure based on the “five
whys” and “why tree” methodology to
determine the root causes and apply
SMART principles to mitigate future risks.
Contractors
GRI 2-8
We require our contractors and suppliers to
work to the same high standards as our
employees, therefore effective contractor
selection, communication and training in
our safety culture and practices as well as
strong monitoring are essential to maintain
the high level of safety embraced by
Nostrum.
Manhours worked in 2024
Percentage
of total
Nostrum employees: 1,095,119 34%
Contractors: 2,089,930 66%
In 2024, four main Contractors were
audited against Contract HSE requirements
to test compliance with our HSE
management system.
Nostrum seeks to promote safe behaviour
among its contractors and has established
a wide range of methods to ensure that
operations at facilities are carried out in full
compliance with local legislation as well as
Nostrum rules and regulations.
In October 2024 regular annual Contractor
HSE Forum was conducted with CEOs and
HSE representatives from every Contractor
to share HSE performance results and
communicate any lessons learned.
Department Managers as Contract Owners
conduct Contractor Kick off, Progress and
Performance Review Meetings with
Contractors to ensure Contractors HSE
Performance.
We are committed to ongoing dialogue
and support to improve our HSE practices
and achieve the highest standards of safety
for all individuals involved in our
operations.
In order to effectively manage the “Golden
Rules”, Nostrum applies rigorous
consequence management which means
that we take a risk-based approach to guide
people and leaders through the processes
required when they witness or have
reported to them inappropriate behaviour
in the workplace. For serious violations of
safety rules, staff and contractors risk
immediate dismissal. For that purpose,
consequence management is split into two
categories. The more serious category
which results in immediate dismissal is
applied in case of alcohol/drug abuse.
Less severe cases, such as safety belt
violation, result initially in a warning
followed by dismissal if a repeat violation
is observed.
Total recordable incidents (TRIs)
(incidents per million man-hours)
2024
2023
TRIR
2022
2021
2020
0.63
0.75
1.56
2.42
3.80
1.9
1.9
2.0
3.0
3.5
Target TRIR
Lost time injury incidents (LTIs)
(incidents per million man-hours)
2024
2023
LTIR
2022
2021
2020
0
0.37
0
0.81
0.84
1.05
0.9
1.0
1.3
1.5
Target LTIR
Total road traffic incidents (RTIs)
(incidents per million km driven)
2024
2023
RTI
2022
2021
2020
0.5
0
0
1.46
0.72
0.75
0.75
0.8
0.8
1.2
Target RTI
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 57 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
been developed, updated and issued:
• Water Policy
• Rational Use of Water
• Elimination of pollutants spills
• GHG monitoring procedure
• HSE Audit procedure
• PTW procedure
• Industrial Control Charter
• Extreme weather procedure
• Scaffolding procedure
• Journey Management
Risk Management
GRI 403-2
In 2024 Workplace Hazard Observation
programme continued to be used to
maintain the campaign launched in 2019.
The main purpose of the campaign was to
train all employees how to intervene and
report when they observe unsafe situation
or hazardous behaviour. The Workplace
Hazard Procedure was rolled out and
workshops were conducted for all staff.
When any hazard is identified every worker
can fill the Hazard Observation Card which
allows to report unsafe conditions they
observe at the workplace, any safe or
unsafe behaviour of personnel while they
perform activities and to make suggestions
on HSE improvement.
HSE Incentive Scheme is in place and HSE
awards are conducted to grant different
promo items to those employees who
raised the best Hazard Observation.
A comprehensive Stop Work Policy is
established to give a right to every
employee to stop any task or job
assignment if they believe it poses an
immediate danger to their personal safety
or that of others. This obligation extends to
all levels of our organisation, from top
management to individual contributors. In
case of disagreement between the
intervention party and his direct manager,
the matter shall be escalated immediate to
the next level of the organisation. The Stop
Work Policy helps to identify any unsafe
conditions as they are encouraged to be
vigilant and proactive in identifying any
unsafe conditions or hazards in the
workplace. Whether it is an equipment
malfunction, inadequate training, or an
environmental concern the employees are
able to recognise potential risks.
To control certain types of work that are
identified as potentially or highly hazardous
a PTW system is in place. For every
hazardous task a Job Safety Analysis is
completed by Performing Authority to
identify hazards, assess associated risks
and identify control measures, as well as the
personnel actions in case of emergency.
Incidence rates and
investigation
In 2024, our Total Recordable Incidents
Frequency rate dropped to 0.63 per
million-man hours, a 16% decrease from 2023.
There was no one Lost Time Incident in 2024.
We experienced two Road Traffic Incidents
in 2024 for contractor’s operations and
nobody got injured in these incidents with
minor damage to vehicles. We undertook
comprehensive investigation and
implemented measures to avoid such
incidents in the future.
Nostrum notes that its activities are
potentially hazardous. The Group’s
management, employees and contractors
are trained to understand that no accidents
are inevitable as we strive to inculcate an
environment in which safety consciousness
and mitigating actions are such that zero
incidents are possible and achievable.
For all incidents, we follow our incident
investigation procedure based on the “five
whys” and “why tree” methodology to
determine the root causes and apply
SMART principles to mitigate future risks.
Contractors
GRI 2-8
We require our contractors and suppliers to
work to the same high standards as our
employees, therefore effective contractor
selection, communication and training in
our safety culture and practices as well as
strong monitoring are essential to maintain
the high level of safety embraced by
Nostrum.
Manhours worked in 2024
Percentage
of total
Nostrum employees: 1,095,119 34%
Contractors: 2,089,930 66%
In 2024, four main Contractors were
audited against Contract HSE requirements
to test compliance with our HSE
management system.
Nostrum seeks to promote safe behaviour
among its contractors and has established
a wide range of methods to ensure that
operations at facilities are carried out in full
compliance with local legislation as well as
Nostrum rules and regulations.
In October 2024 regular annual Contractor
HSE Forum was conducted with CEOs and
HSE representatives from every Contractor
to share HSE performance results and
communicate any lessons learned.
Department Managers as Contract Owners
conduct Contractor Kick off, Progress and
Performance Review Meetings with
Contractors to ensure Contractors HSE
Performance.
We are committed to ongoing dialogue
and support to improve our HSE practices
and achieve the highest standards of safety
for all individuals involved in our
operations.
In order to effectively manage the “Golden
Rules”, Nostrum applies rigorous
consequence management which means
that we take a risk-based approach to guide
people and leaders through the processes
required when they witness or have
reported to them inappropriate behaviour
in the workplace. For serious violations of
safety rules, staff and contractors risk
immediate dismissal. For that purpose,
consequence management is split into two
categories. The more serious category
which results in immediate dismissal is
applied in case of alcohol/drug abuse.
Less severe cases, such as safety belt
violation, result initially in a warning
followed by dismissal if a repeat violation
is observed.
Total recordable incidents (TRIs)
(incidents per million man-hours)
2024
2023
TRIR
2022
2021
2020
0.63
0.75
1.56
2.42
3.80
1.9
1.9
2.0
3.0
3.5
Target TRIR
Lost time injury incidents (LTIs)
(incidents per million man-hours)
2024
2023
LTIR
2022
2021
2020
0
0.37
0
0.81
0.84
1.05
0.9
1.0
1.3
1.5
Target LTIR
Total road traffic incidents (RTIs)
(incidents per million km driven)
2024
2023
RTI
2022
2021
2020
0.5
0
0
1.46
0.72
0.75
0.75
0.8
0.8
1.2
Target RTI
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 57 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
Golden Rules
GRI 403-3
1. Seatbelts must always be worn by the
driver and all passengers.
2. Do not exceed the speed limit and
reduce speed for impaired road
conditions.
3. Do not use phones or operate devices
while operating a motor vehicle
4. Alcohol and drugs of any kind (excluding
approved medicines) are forbidden.
5. Where required, work with a valid permit
6. Obtain authorisation before entering a
confined space.
7. Confirm that hazardous energy sources
have been isolated, enclosed and
tagged.
8. Obtain authorisation before overriding
or disabling safety controls.
9. Never walk under a suspended load
10.Protect yourself against a fall when
working at heights.
For every service contract in the Company
at the time a purchase requisition is raised,
a Contract HSE Risk Assessment relevant to
the work is performed and documented by
the Contract Holder. This process is more
fully described below:
Stage 1 – Vendor Qualification
To be a qualified bidder, vendors must
meet our qualification standards. This
process is meant to help us select those
vendors that both adhere to and support
our basic HSE culture. The Vendor
Assessment stage helps to assess the
corporate capability of the vendor to
deliver the required HSE Performance
Stage 2 – Contract HSE
requirements
HSE requirements are specified in
Appendix to Contract which is part of all
contracts. Two types of Appendices with
HSE requirements are developed: for high
risk level and for works/services with low
risk level.
Stage 3 – Contractor
Engagement
After Tender stage is over and when
contract is awarded, prior to the
commencement of work, a Contractor
Kick-off Meeting is held, The objectives of
the meeting is to provide foundations for
good performance including HSE from the
start of the contract.
For all high risk contracts the Pre-mobilisation
HSE Audit is conducted.
Stage 4 – Contract execution
Contractor HSE Performance is monitored
during contract execution. Worksite HSE
Inspections and HSE Management System
Audits are conducted to ensure compliance
with Contract HSE Requirements.
The regular meeting to communicate with
Contractors are conducted to discuss their
HSE performance and to provide any
support to achieve the HSE goals.
One of the tools to evaluate and monitor
Contractor HSE Performance is Monthly
scorecard. The Monthly Scorecard
comprises of minimum leading and lagging
HSE indicators. The data are used to
identify areas for continuous improvements
in Contractor HSE Management System
and to review the effectiveness of
Contractor HSE Management processes
against the other Contractors.
Stage 5 – Contract Close-out
Upon delivery of the contract a HSE
performance review is conducted to
identify both positive and negative lessons
learned that may be used for a variety of
purposes including pre-qualification and
identifying areas for improvements
Within one month following contract expiry
the Contract close-out meetings are
conducted to discuss and reflect on
Contractor’s HSE performance during
the execution of the work.
Contract HSE Performance feedback is
documented and saved on vendor’s
database. The results of the feedback
evaluation are considered while contract
prolongation or for any new tenders.
Promoting a safer
workplace
GRI 403-2
In 2024 Workplace Hazard Observation
programme continued to be used to
maintain the campaign launched in
2019. The main purpose of the
campaign was to train all employees
how to intervene and report when they
observe unsafe situation or hazardous
behavior. The Workplace Hazard
Procedure was rolled out and workshops
were conducted for all staff.
When any hazard is identified every
worker can fill the Hazard Observation
Card which allows to report unsafe
conditions they observe at the
workplace, any safe or unsafe behaviour
of personnel while they perform
activities and to make suggestions
on HSE improvement.
HSE Incentive Scheme is in place and
HSE awards are conducted to grant
different promo items to those
employees who raised the best
Hazard Observation.
ESG REVIEW
58 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
GRI 403-3
1. Seatbelts must always be worn by the
driver and all passengers.
2. Do not exceed the speed limit and
reduce speed for impaired road
conditions.
3. Do not use phones or operate devices
while operating a motor vehicle
4. Alcohol and drugs of any kind (excluding
approved medicines) are forbidden.
5. Where required, work with a valid permit
6. Obtain authorisation before entering a
confined space.
7. Confirm that hazardous energy sources
have been isolated, enclosed and
tagged.
8. Obtain authorisation before overriding
or disabling safety controls.
9. Never walk under a suspended load
10.Protect yourself against a fall when
working at heights.
For every service contract in the Company
at the time a purchase requisition is raised,
a Contract HSE Risk Assessment relevant to
the work is performed and documented by
the Contract Holder. This process is more
fully described below:
Stage 1 – Vendor Qualification
To be a qualified bidder, vendors must
meet our qualification standards. This
process is meant to help us select those
vendors that both adhere to and support
our basic HSE culture. The Vendor
Assessment stage helps to assess the
corporate capability of the vendor to
deliver the required HSE Performance
Stage 2 – Contract HSE
requirements
HSE requirements are specified in
Appendix to Contract which is part of all
contracts. Two types of Appendices with
HSE requirements are developed: for high
risk level and for works/services with low
risk level.
Stage 3 – Contractor
Engagement
After Tender stage is over and when
contract is awarded, prior to the
commencement of work, a Contractor
Kick-off Meeting is held, The objectives of
the meeting is to provide foundations for
good performance including HSE from the
start of the contract.
For all high risk contracts the Pre-mobilisation
HSE Audit is conducted.
Stage 4 – Contract execution
Contractor HSE Performance is monitored
during contract execution. Worksite HSE
Inspections and HSE Management System
Audits are conducted to ensure compliance
with Contract HSE Requirements.
The regular meeting to communicate with
Contractors are conducted to discuss their
HSE performance and to provide any
support to achieve the HSE goals.
One of the tools to evaluate and monitor
Contractor HSE Performance is Monthly
scorecard. The Monthly Scorecard
comprises of minimum leading and lagging
HSE indicators. The data are used to
identify areas for continuous improvements
in Contractor HSE Management System
and to review the effectiveness of
Contractor HSE Management processes
against the other Contractors.
Stage 5 – Contract Close-out
Upon delivery of the contract a HSE
performance review is conducted to
identify both positive and negative lessons
learned that may be used for a variety of
purposes including pre-qualification and
identifying areas for improvements
Within one month following contract expiry
the Contract close-out meetings are
conducted to discuss and reflect on
Contractor’s HSE performance during
the execution of the work.
Contract HSE Performance feedback is
documented and saved on vendor’s
database. The results of the feedback
evaluation are considered while contract
prolongation or for any new tenders.
Promoting a safer
workplace
GRI 403-2
In 2024 Workplace Hazard Observation
programme continued to be used to
maintain the campaign launched in
2019. The main purpose of the
campaign was to train all employees
how to intervene and report when they
observe unsafe situation or hazardous
behavior. The Workplace Hazard
Procedure was rolled out and workshops
were conducted for all staff.
When any hazard is identified every
worker can fill the Hazard Observation
Card which allows to report unsafe
conditions they observe at the
workplace, any safe or unsafe behaviour
of personnel while they perform
activities and to make suggestions
on HSE improvement.
HSE Incentive Scheme is in place and
HSE awards are conducted to grant
different promo items to those
employees who raised the best
Hazard Observation.
ESG REVIEW
58 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Road Safety
In 2024, Nostrum continued to implement
the following activities carried out over
the years:
• Planned /unplanned inspections of the
technical conditions of the vehicles at
Nostrum facilities by our employees and
Contractor representatives
• Road safety inductions, training and
safety stand-downs are being held on
a permanent basis with Contractor
personnel
• Ad-hoc inspections on road safety
compliance (speeding, safety belt use,
etc.) are held regularly
• Nostrum ensures compliance with Road
safety procedure, Journey management
plan and procedure for organising and
carrying out transportation of oversized
cargo in order to ensure road safety
compliance to the Company rules
• The Routes for the transportation of
oversized cargo are coordinated
(accompanied if necessary) to ensure
road safety along the route of movement
of oversized cargo on the territory of
Nostrum facilities
• The passage of a medical pre-trip
inspection by drivers of the Company and
contractors is systematically controlled
• Checks are being made of the safe
condition for traffic of the carriageways of
public roads, bridges, railway crossings
and road structures on the territory of the
facilities and along the route to Nostrum
production facilities and back
In-house HSE training and
examination process
GRI 403-5
Nostrum provides in-house HSE training
and examination designed to improve the
HSE competencies of both Nostrum and
contract personnel performing safety-
critical activities.
During 2024, 1,102 employees took
advanced HSE training.
HSE communication
and awareness
GRI 403-3
In 2024, HSE Workshops were carried out
for field personnel to promote awareness
on the following topics:
• Waste Management
• First Aid
• Working on heights
• Permit to Work System
• Water Use
• Fire Safety
• Working in extreme weather
• Food Safety
• PPE Standard
• Golden Rules
• Extreme weather
• Abnormal Load Transportation
To ensure HSE Awareness the following
communication tools were used in 2024:
• Monthly QHSE Reports
• A pop-up window messages appeared
on the screens when logging in every day
with a safety reminder from the QHSE
department
• HSE Posters printed and displayed in
prominent locations
• HSE Alerts
• HSE Advisories
Process safety
GRI 403-3, 403-7
In 2024, no Tier 1 or Tier 2 process safety
incidents were recorded at Nostrum’s
production sites. According to the
American Petroleum Institute’s definition,
a Tier 1 and Tier 2 safety incident is an
unplanned or uncontrolled release of any
substances, including non-toxic and
non-flammable materials, from a process
that results in one or more of the following
consequences:
• An employee, contractor or
subcontractor incurs days away from
work, injury and/or fatality
• A hospital admission and/or fatality of a
third party
• An officially declared community
evacuation or community shelter put in
place, including precautionary
community evacuation or community
shelter in place
• Fire or explosion damage of at least
US$100,000
The selection of appropriate maintenance
strategies and the classification of
equipment as safety critical or non- critical,
is based on the impact that such equipment
failure has on safety. Nostrum employs
scenarios at all hazardous production
facilities.
Nostrum employs a specific safety critical
equipment maintenance programme
whereby resources are allocated in order of
priority with critical systems taking
precedence.
Vessel and Flow-line
inspection programme
In 2024, inspection of vessels and flow
lines continued as per Field Operation
maintenance programme, in accordance
with RoK regulations. In this subject, NDT
testing methods are widely used to satisfy
RoK regulation requirements with the aim
of minimising the time when vessel is out of
operation. For this reason, a special
method called ‘Corrosion Mapping’ is
being implemented. Per this method, the
entire metal surface area is ‘scanned’ and
a more accurate image is generated
regarding metal wall thickness and
corrosion status of vessel itself. Application
of this method revealed poor conditions
of the 1st stage oil separator at the Oil
Treatment Unit (OTU), identifying the
necessity to replace the vessel in 2025. In
2025, the “Corrosion Mapping” method will
be implemented for inspection of some
important processing vessels that are most
exposed to corrosion at the Gas Treatment
Units (GTUs). By it, the time needed for shut
down of the facility for yearly turnaround
will be minimised.
In 2024, at the OTU about half of the intake
manifold pipes and valves with reduced
wall thickness & identified pipe thinning
were replaced. The rest of the manifold
pipes and valves are planned to be
replaced in 2025.
Emergency response,
Civil Protection Planning
and Prevention
GRI 2-25
In 2024, no industrial accidents were
recorded at Nostrum’s operations.
The Company has established and
successfully exercises an emergency
response system and undertakes measures
to prevent oil and oil product spills.
Emergency response and
accidents preparatory
activities
The Company has emergency response
plans to improve our capacity to swiftly
address unexpected occurrences, thus
preserving operational continuity and
mitigating adverse effects on individuals,
the environment, our physical infrastructure,
and our reputation. These plans are
effectively communicated to our workforce,
and those involved in emergency response
undergo training to ensure proficiency in
fulfilling their emergency responsibilities.
In-house HSE training
2024
2023
2022
2021
2020
357
265
254
329
311
1,102
802
715
816
973
423
284
238
263
318
332
253
223
224
344
H2S rules
Labour safety rules
Industrial safety rules
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 59 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
In 2024, Nostrum continued to implement
the following activities carried out over
the years:
• Planned /unplanned inspections of the
technical conditions of the vehicles at
Nostrum facilities by our employees and
Contractor representatives
• Road safety inductions, training and
safety stand-downs are being held on
a permanent basis with Contractor
personnel
• Ad-hoc inspections on road safety
compliance (speeding, safety belt use,
etc.) are held regularly
• Nostrum ensures compliance with Road
safety procedure, Journey management
plan and procedure for organising and
carrying out transportation of oversized
cargo in order to ensure road safety
compliance to the Company rules
• The Routes for the transportation of
oversized cargo are coordinated
(accompanied if necessary) to ensure
road safety along the route of movement
of oversized cargo on the territory of
Nostrum facilities
• The passage of a medical pre-trip
inspection by drivers of the Company and
contractors is systematically controlled
• Checks are being made of the safe
condition for traffic of the carriageways of
public roads, bridges, railway crossings
and road structures on the territory of the
facilities and along the route to Nostrum
production facilities and back
In-house HSE training and
examination process
GRI 403-5
Nostrum provides in-house HSE training
and examination designed to improve the
HSE competencies of both Nostrum and
contract personnel performing safety-
critical activities.
During 2024, 1,102 employees took
advanced HSE training.
HSE communication
and awareness
GRI 403-3
In 2024, HSE Workshops were carried out
for field personnel to promote awareness
on the following topics:
• Waste Management
• First Aid
• Working on heights
• Permit to Work System
• Water Use
• Fire Safety
• Working in extreme weather
• Food Safety
• PPE Standard
• Golden Rules
• Extreme weather
• Abnormal Load Transportation
To ensure HSE Awareness the following
communication tools were used in 2024:
• Monthly QHSE Reports
• A pop-up window messages appeared
on the screens when logging in every day
with a safety reminder from the QHSE
department
• HSE Posters printed and displayed in
prominent locations
• HSE Alerts
• HSE Advisories
Process safety
GRI 403-3, 403-7
In 2024, no Tier 1 or Tier 2 process safety
incidents were recorded at Nostrum’s
production sites. According to the
American Petroleum Institute’s definition,
a Tier 1 and Tier 2 safety incident is an
unplanned or uncontrolled release of any
substances, including non-toxic and
non-flammable materials, from a process
that results in one or more of the following
consequences:
• An employee, contractor or
subcontractor incurs days away from
work, injury and/or fatality
• A hospital admission and/or fatality of a
third party
• An officially declared community
evacuation or community shelter put in
place, including precautionary
community evacuation or community
shelter in place
• Fire or explosion damage of at least
US$100,000
The selection of appropriate maintenance
strategies and the classification of
equipment as safety critical or non- critical,
is based on the impact that such equipment
failure has on safety. Nostrum employs
scenarios at all hazardous production
facilities.
Nostrum employs a specific safety critical
equipment maintenance programme
whereby resources are allocated in order of
priority with critical systems taking
precedence.
Vessel and Flow-line
inspection programme
In 2024, inspection of vessels and flow
lines continued as per Field Operation
maintenance programme, in accordance
with RoK regulations. In this subject, NDT
testing methods are widely used to satisfy
RoK regulation requirements with the aim
of minimising the time when vessel is out of
operation. For this reason, a special
method called ‘Corrosion Mapping’ is
being implemented. Per this method, the
entire metal surface area is ‘scanned’ and
a more accurate image is generated
regarding metal wall thickness and
corrosion status of vessel itself. Application
of this method revealed poor conditions
of the 1st stage oil separator at the Oil
Treatment Unit (OTU), identifying the
necessity to replace the vessel in 2025. In
2025, the “Corrosion Mapping” method will
be implemented for inspection of some
important processing vessels that are most
exposed to corrosion at the Gas Treatment
Units (GTUs). By it, the time needed for shut
down of the facility for yearly turnaround
will be minimised.
In 2024, at the OTU about half of the intake
manifold pipes and valves with reduced
wall thickness & identified pipe thinning
were replaced. The rest of the manifold
pipes and valves are planned to be
replaced in 2025.
Emergency response,
Civil Protection Planning
and Prevention
GRI 2-25
In 2024, no industrial accidents were
recorded at Nostrum’s operations.
The Company has established and
successfully exercises an emergency
response system and undertakes measures
to prevent oil and oil product spills.
Emergency response and
accidents preparatory
activities
The Company has emergency response
plans to improve our capacity to swiftly
address unexpected occurrences, thus
preserving operational continuity and
mitigating adverse effects on individuals,
the environment, our physical infrastructure,
and our reputation. These plans are
effectively communicated to our workforce,
and those involved in emergency response
undergo training to ensure proficiency in
fulfilling their emergency responsibilities.
In-house HSE training
2024
2023
2022
2021
2020
357
265
254
329
311
1,102
802
715
816
973
423
284
238
263
318
332
253
223
224
344
H2S rules
Labour safety rules
Industrial safety rules
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 59 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
ESG REVIEW
We remain committed to upholding asset
integrity and managing operations to
effectively mitigate all significant risks
throughout every phase of our activities.
As scheduled in 2024 emergency training
of personnel has been conducted on a
quarterly basis in order to prevent
accidents and emergencies as well as to
Emergency Response Plans emergency
scenarios at all hazardous production
facilities. In 2024, we maintained
emergency response training and exercises
involving credible emergency ERP
scenarios at all hazardous production
facilities.
Hazardous production facilities at Nostrum
include:
• Oil Terminal and Transfer Point in Beles
• CF-Rostoshi Oil Trunk Pipeline
• CF-ICA Gas Trunk Pipeline (GTP
Orenburg-Novopskov)
• OTU and gaslift system
• CGTU-1,2 and LPG -1,2
• Well Operations and gathering system
• GTU-26
• MTS and RPMS
• Waste disposal area
• GTU-3 and LPG-3
During training drills at every facility, the
emergency operations center organised
and coordinated possible emergency
prevention and responses to accidents, as
well as to ensure fire safety. During
quarterly drills held at the facilities – EOS,
the whole range of issues related to
accidents and emergency prevention and
elimination procedures was considered.
Overall control of all emergency drills was
overseen by the Field Director, who is
responsible for the implementation of
industrial and fire safety measures.
We believe that these actions help maintain
the proper level of skills and competencies
among employees and executives and
ensure compliance with legal process
safety requirements and corporate
standards.
Oil spill prevention
GRI 2-25, 206-3
The Group strives to have zero operational
spills. Nostrum continues to undertake
initiatives to prevent and reduce spills that
include drills and training teams, timely
maintenance, repair and replacement of
equipment, monitoring of problem
oilpipeline areas, etc.
Oil Spill Response Plan
We continue to enhance our spill response
capabilities in accordance with the Oil Spill
Response Plan (“OSRP”) within the
Company’s production facilities.
This plan sets our response strategies and
techniques, available equipment, and
trained personnel and contracts and
includes the following measures:
• signal receiving action and notification
scheme for rescue services
• notification procedure for the Company’s
contractors, state bodies and local
authorities
• responsibility allocation for rescue units
organisation and management, and;
• measures to be taken to ensure people’s
safety and other actions.
The OSRP has been annually reviewed and
updated to consider the regulatory
requirements, availability of resources to
be involved. The OSRP gives substantiation
of a possible emergency level, analyses
scenarios of their occurrence and
development, and also makes a forecast
of possible consequences for production
facilities associated with accidental
oil spills.
Introduction of emergency response plans
and OSRP for Nostrum’s production and
engineering personnel is documented in
the briefing log at the workplace. In
accordance with Industrial Control Charter
the Facilities Manager and Field Director
are responsible for the due and correct
preparation of ERPs, and ensure
compliance with safety requirements is
controlled on a regular basis. If non-
compliance is identified, corrective and
preventive action plans are developed and
implemented.
Boosting readiness of
emergency rescue teams
To respond to emergencies, Nostrum
established civil defence teams, whereby 6
members of the Emergency Rescue Team
was trained in the National Center for
Scientific Research, Training, and Education
in Emergency Response Department
(Almaty). In 2024, 100 employees on a
voluntary basis (50 per shift) were engaged
to ensure the safety of the production
facility. They are fully equipped and have
completed practical training during the
quarterly emergency response drills. 16
members of the volunteer civil protection
teams at the Field were trained in 2024 at
the facility of Akberen blow out elimination
service in Uralsk.
To maintain and conduct emergency
rescue operations, the Company has
long-term contracts with professional ERT
– Ak-Beren LLP (gas rescue service) and
Ansar-S-Group LLP (firefighters-rescuers).
Ak-Beren, a professional blowout
elimination service, is responsible for
accident prevention at oil and gas wells,
which is fully compliant with the
requirements for oil, petroleum product,
and other hydrocarbon spill response.
Materials and equipment available to the
emergency response and rescue teams are
certified and compliant with all
requirements.
A high degree of readiness for the ERT is
supported by regular drills and training, as
well as theoretical knowledge. Drills and
training are held on a quarterly basis at all
facilities. Special attention during the
ongoing emergency drills was given to
those facilities where gas and oil contain
hydrogen sulfide. All Emergency Response
Plans were reviewed, updated and
Contained and non-contained oil spills
In 2024 there was one oil spill. A table below shows data for 2020-2024:
Period
Contained oil
spills
Non-
contained
oil spills
Volume of the
oil spills in
cubic meters Note
2020 1 0 0.05 There was an oil spill inside the
pump station of the Terminal
without any leak to the open
ground surface.
2021 0 0
2022 0 0
2023 0 0
2024 1 0 0.03 The boiler of the Uniserv Trans
Contractor company was loaded
with hydrocarbons for
transportation to the OTU. After
leaving GTP 1/2, a leak of
hydrocarbon raw materials was
detected through the fill neck.
Total
60 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
We remain committed to upholding asset
integrity and managing operations to
effectively mitigate all significant risks
throughout every phase of our activities.
As scheduled in 2024 emergency training
of personnel has been conducted on a
quarterly basis in order to prevent
accidents and emergencies as well as to
Emergency Response Plans emergency
scenarios at all hazardous production
facilities. In 2024, we maintained
emergency response training and exercises
involving credible emergency ERP
scenarios at all hazardous production
facilities.
Hazardous production facilities at Nostrum
include:
• Oil Terminal and Transfer Point in Beles
• CF-Rostoshi Oil Trunk Pipeline
• CF-ICA Gas Trunk Pipeline (GTP
Orenburg-Novopskov)
• OTU and gaslift system
• CGTU-1,2 and LPG -1,2
• Well Operations and gathering system
• GTU-26
• MTS and RPMS
• Waste disposal area
• GTU-3 and LPG-3
During training drills at every facility, the
emergency operations center organised
and coordinated possible emergency
prevention and responses to accidents, as
well as to ensure fire safety. During
quarterly drills held at the facilities – EOS,
the whole range of issues related to
accidents and emergency prevention and
elimination procedures was considered.
Overall control of all emergency drills was
overseen by the Field Director, who is
responsible for the implementation of
industrial and fire safety measures.
We believe that these actions help maintain
the proper level of skills and competencies
among employees and executives and
ensure compliance with legal process
safety requirements and corporate
standards.
Oil spill prevention
GRI 2-25, 206-3
The Group strives to have zero operational
spills. Nostrum continues to undertake
initiatives to prevent and reduce spills that
include drills and training teams, timely
maintenance, repair and replacement of
equipment, monitoring of problem
oilpipeline areas, etc.
Oil Spill Response Plan
We continue to enhance our spill response
capabilities in accordance with the Oil Spill
Response Plan (“OSRP”) within the
Company’s production facilities.
This plan sets our response strategies and
techniques, available equipment, and
trained personnel and contracts and
includes the following measures:
• signal receiving action and notification
scheme for rescue services
• notification procedure for the Company’s
contractors, state bodies and local
authorities
• responsibility allocation for rescue units
organisation and management, and;
• measures to be taken to ensure people’s
safety and other actions.
The OSRP has been annually reviewed and
updated to consider the regulatory
requirements, availability of resources to
be involved. The OSRP gives substantiation
of a possible emergency level, analyses
scenarios of their occurrence and
development, and also makes a forecast
of possible consequences for production
facilities associated with accidental
oil spills.
Introduction of emergency response plans
and OSRP for Nostrum’s production and
engineering personnel is documented in
the briefing log at the workplace. In
accordance with Industrial Control Charter
the Facilities Manager and Field Director
are responsible for the due and correct
preparation of ERPs, and ensure
compliance with safety requirements is
controlled on a regular basis. If non-
compliance is identified, corrective and
preventive action plans are developed and
implemented.
Boosting readiness of
emergency rescue teams
To respond to emergencies, Nostrum
established civil defence teams, whereby 6
members of the Emergency Rescue Team
was trained in the National Center for
Scientific Research, Training, and Education
in Emergency Response Department
(Almaty). In 2024, 100 employees on a
voluntary basis (50 per shift) were engaged
to ensure the safety of the production
facility. They are fully equipped and have
completed practical training during the
quarterly emergency response drills. 16
members of the volunteer civil protection
teams at the Field were trained in 2024 at
the facility of Akberen blow out elimination
service in Uralsk.
To maintain and conduct emergency
rescue operations, the Company has
long-term contracts with professional ERT
– Ak-Beren LLP (gas rescue service) and
Ansar-S-Group LLP (firefighters-rescuers).
Ak-Beren, a professional blowout
elimination service, is responsible for
accident prevention at oil and gas wells,
which is fully compliant with the
requirements for oil, petroleum product,
and other hydrocarbon spill response.
Materials and equipment available to the
emergency response and rescue teams are
certified and compliant with all
requirements.
A high degree of readiness for the ERT is
supported by regular drills and training, as
well as theoretical knowledge. Drills and
training are held on a quarterly basis at all
facilities. Special attention during the
ongoing emergency drills was given to
those facilities where gas and oil contain
hydrogen sulfide. All Emergency Response
Plans were reviewed, updated and
Contained and non-contained oil spills
In 2024 there was one oil spill. A table below shows data for 2020-2024:
Period
Contained oil
spills
Non-
contained
oil spills
Volume of the
oil spills in
cubic meters Note
2020 1 0 0.05 There was an oil spill inside the
pump station of the Terminal
without any leak to the open
ground surface.
2021 0 0
2022 0 0
2023 0 0
2024 1 0 0.03 The boiler of the Uniserv Trans
Contractor company was loaded
with hydrocarbons for
transportation to the OTU. After
leaving GTP 1/2, a leak of
hydrocarbon raw materials was
detected through the fill neck.
Total
60 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
approved with Ak-Beren emergency
response service and Ansar-S Group.
Commanders of voluntary rescue and fire
teams were additionally trained under the
training programme for unit commanders
to maintain levels of skills and competence,
particularly in relation to safety-critical
roles.
The non-government fire service of
Ansar-S-Group LLP, which has had a service
agreement with Nostrum since 2022, was
also involved several times (under our
contract) in providing emergency
responses in Baiterek during the
elimination of the consequences of spring
floods and summer steppe fires at the
request of local executive bodies. Thus,
Nostrum provides assistance to the
administration and residents of Baiterek on
an ongoing basis.
Organisation of
communication with
contractors on emergency
response and prevention of
possible emergencies
A significant part of preventive and
emergency organisation is performed by
contractors for Nostrum. In order to ensure
a high level of preparedness for emergency
response, all drills and training were made
with the participation of the following
organisations:
• Ansar-S-Group LLP – fire prevention.
• Ak-Beren LLP – blowout prevention, gas
rescue.
• Nysan-Korgau – the organisation of
access control and protection of an
accident zone from unauthorised
individuals.
HSE personnel assigned to each hazardous
facility perform permanent control over
work plans implementation by contractors
as well as requirements of industrial safety
standards. To achieve this, the Company
uses checklists containing the entire range
of issues under consideration – starting
from document maintenance to work
quality and safety. The HSE Department
organises regular control field inspections
at production facilities.
The control teams include representatives
responsible for occupational health, safety
and emergency response.
• The most pressing issues are discussed
with all contractors and facilities. Joint
work on quality improvement of safety
methods is organised on a permanent
basis.
• Representatives of contracting
organisations participating in all
emergency drills regularly held by
Nostrum, have an opportunity to master
up-to-date methods of emergency
rescue operations and develop common
rules for solving emerging problems
taking into account available information
on best practices in the oil and gas
industry.
Alert system for employees
and communities located
near the Chinarevskoye
Field
The Company is constantly improving
internal procedures aimed at alerting and
preventing emergency response cases, and
in 2024 the Company maintained alert
systems at Nostrum production facilities.
The duty dispatch service promptly
transmits information about the occurrence
of accidents and emergencies to EOS-1 and
EOS-2 to notify the management of the
Company and government agencies.
In the event of an emergency, at the first
level of emergency response, regular
employees and contractor personnel
located at Nostrum production facilities, as
well as emergency response teams involved
in the accident response are notified. High
priority rescue and evacuation activities are
performed to protect them. Territorial
executive authorities (akimats) are notified
of an accident in accordance with the
notification scheme in case of a threat of
the spread of adverse factors.
In the event of major accidents, operational
teams of the second level are organised at
the Company’s office in Uralsk. If necessary,
the evacuation of personnel and
communities is organised.
Firefighting activities
arrangement
The Company systematically arranges
operational control over compliance with
industrial safety requirements, internal
audits of the management system,
conducts analyses of and processes the
results of incidents and inspections,
develops and monitors the implementation
of corrective and preventive actions.
All Nostrum facilities at Chinarevskoye Field
and Terminal are fire and explosion
hazardous. Therefore, fire safety rules were
developed for all facilities and controls over
compliance with the rules are in place.
These activities include:
• obligatory preventive inductions, fire
safety training, control by line supervisors
and responsible persons over the
performance of work,
• inspection of Ansar-S-group by a
governmental authorised body and fire
inspectors,
• project expertise as to compliance with
fire safety requirements during the
reconstruction and technical upgrade of
production facilities,
• timely maintenance and function control
of systems and fire protection means of
facilities (by contractor – Batys Energon
LLP), and;
• continuous control of serviceability of
fire- and explosion-hazardous process
equipment and compliance with process
flow charts.
Civil defense and
emergency prevention
measures
In 2024, in accordance with the
requirements of RoK legislation the Civil
Defense Plan annexes were revised. The
scheduled annual training for personnel
was conducted. At the operational facilities
quarterly emergency response drills were
held. First Aid Training and Fire Safety
Training was conducted for office
personnel PPE is provided for all staff
(civilian GP-7 gas masks with “Breeze”
filters, which protect against all hazardous
substances).
In Spring of 2024, the West Kazakhstan
Region was in a critical situation due to
flooding, including many houses that were
inundated with flood waters.
Nostrum Oil & Gas did not stand aback
from this natural disaster, but made every
possible effort to prevent flooding,
provide support to nearby villages and
communities, and the city of Uralsk.
Our assistance included:
• Supply of five light all-terrain vehicles with
crews, working round-the-clock in the
areas of flooding of facilities, including
the vicinities of nearby villages
• Supply of three items of heavy machinery
to Yanvartsevo Akimat for the construction
of fill dams in the area of flooding
• Provision of cash, materials and
equipment to the Yanvartsevo Akimat
(prior to the flood) which allowed them
to build a culvert in advance and save the
Chinarevo village from flood waters
• Supply of six units of heavy machinery
by Nostrum contractors
• With the help of machinery provided by
Nostrum and Contractors, dams were
erected in Yanvartsevo village (5.7 km
long) and Spartak village (700 m long).
The dams were erected along the
floodplain of the Ural River, in the areas of
possible flooding of Yanvartsevo and
Spartak villages
• At own cost of about US$1.2m, the Group
constructed 20 houses for flood victims.
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 61 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
response service and Ansar-S Group.
Commanders of voluntary rescue and fire
teams were additionally trained under the
training programme for unit commanders
to maintain levels of skills and competence,
particularly in relation to safety-critical
roles.
The non-government fire service of
Ansar-S-Group LLP, which has had a service
agreement with Nostrum since 2022, was
also involved several times (under our
contract) in providing emergency
responses in Baiterek during the
elimination of the consequences of spring
floods and summer steppe fires at the
request of local executive bodies. Thus,
Nostrum provides assistance to the
administration and residents of Baiterek on
an ongoing basis.
Organisation of
communication with
contractors on emergency
response and prevention of
possible emergencies
A significant part of preventive and
emergency organisation is performed by
contractors for Nostrum. In order to ensure
a high level of preparedness for emergency
response, all drills and training were made
with the participation of the following
organisations:
• Ansar-S-Group LLP – fire prevention.
• Ak-Beren LLP – blowout prevention, gas
rescue.
• Nysan-Korgau – the organisation of
access control and protection of an
accident zone from unauthorised
individuals.
HSE personnel assigned to each hazardous
facility perform permanent control over
work plans implementation by contractors
as well as requirements of industrial safety
standards. To achieve this, the Company
uses checklists containing the entire range
of issues under consideration – starting
from document maintenance to work
quality and safety. The HSE Department
organises regular control field inspections
at production facilities.
The control teams include representatives
responsible for occupational health, safety
and emergency response.
• The most pressing issues are discussed
with all contractors and facilities. Joint
work on quality improvement of safety
methods is organised on a permanent
basis.
• Representatives of contracting
organisations participating in all
emergency drills regularly held by
Nostrum, have an opportunity to master
up-to-date methods of emergency
rescue operations and develop common
rules for solving emerging problems
taking into account available information
on best practices in the oil and gas
industry.
Alert system for employees
and communities located
near the Chinarevskoye
Field
The Company is constantly improving
internal procedures aimed at alerting and
preventing emergency response cases, and
in 2024 the Company maintained alert
systems at Nostrum production facilities.
The duty dispatch service promptly
transmits information about the occurrence
of accidents and emergencies to EOS-1 and
EOS-2 to notify the management of the
Company and government agencies.
In the event of an emergency, at the first
level of emergency response, regular
employees and contractor personnel
located at Nostrum production facilities, as
well as emergency response teams involved
in the accident response are notified. High
priority rescue and evacuation activities are
performed to protect them. Territorial
executive authorities (akimats) are notified
of an accident in accordance with the
notification scheme in case of a threat of
the spread of adverse factors.
In the event of major accidents, operational
teams of the second level are organised at
the Company’s office in Uralsk. If necessary,
the evacuation of personnel and
communities is organised.
Firefighting activities
arrangement
The Company systematically arranges
operational control over compliance with
industrial safety requirements, internal
audits of the management system,
conducts analyses of and processes the
results of incidents and inspections,
develops and monitors the implementation
of corrective and preventive actions.
All Nostrum facilities at Chinarevskoye Field
and Terminal are fire and explosion
hazardous. Therefore, fire safety rules were
developed for all facilities and controls over
compliance with the rules are in place.
These activities include:
• obligatory preventive inductions, fire
safety training, control by line supervisors
and responsible persons over the
performance of work,
• inspection of Ansar-S-group by a
governmental authorised body and fire
inspectors,
• project expertise as to compliance with
fire safety requirements during the
reconstruction and technical upgrade of
production facilities,
• timely maintenance and function control
of systems and fire protection means of
facilities (by contractor – Batys Energon
LLP), and;
• continuous control of serviceability of
fire- and explosion-hazardous process
equipment and compliance with process
flow charts.
Civil defense and
emergency prevention
measures
In 2024, in accordance with the
requirements of RoK legislation the Civil
Defense Plan annexes were revised. The
scheduled annual training for personnel
was conducted. At the operational facilities
quarterly emergency response drills were
held. First Aid Training and Fire Safety
Training was conducted for office
personnel PPE is provided for all staff
(civilian GP-7 gas masks with “Breeze”
filters, which protect against all hazardous
substances).
In Spring of 2024, the West Kazakhstan
Region was in a critical situation due to
flooding, including many houses that were
inundated with flood waters.
Nostrum Oil & Gas did not stand aback
from this natural disaster, but made every
possible effort to prevent flooding,
provide support to nearby villages and
communities, and the city of Uralsk.
Our assistance included:
• Supply of five light all-terrain vehicles with
crews, working round-the-clock in the
areas of flooding of facilities, including
the vicinities of nearby villages
• Supply of three items of heavy machinery
to Yanvartsevo Akimat for the construction
of fill dams in the area of flooding
• Provision of cash, materials and
equipment to the Yanvartsevo Akimat
(prior to the flood) which allowed them
to build a culvert in advance and save the
Chinarevo village from flood waters
• Supply of six units of heavy machinery
by Nostrum contractors
• With the help of machinery provided by
Nostrum and Contractors, dams were
erected in Yanvartsevo village (5.7 km
long) and Spartak village (700 m long).
The dams were erected along the
floodplain of the Ural River, in the areas of
possible flooding of Yanvartsevo and
Spartak villages
• At own cost of about US$1.2m, the Group
constructed 20 houses for flood victims.
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 61 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
ESG REVIEW
Empowering our people
Promoting diversity and inclusion is both a responsibility
and an opportunity in today’s world. Businesses have a
unique role to play as active contributors to a more
inclusive society. By building a diverse workplace, our
company can drive meaningful change, set an example,
and create an environment where individuals thrive.
For our Group, diversity and inclusion are
essential to our strength and success. We
believe that different perspectives drive
innovation, enhance collaboration, and
encourage more resilient organisations. By
cultivating an inclusive culture where every
employee feels valued and empowered, we
are creating the conditions for sustainable
growth and long-term excellence.
Fundamentally, this effort revolves around
recognising, respecting, and appreciating
our unique differences. It transcends mere
tolerance, delving into a profound
understanding of each individual and an
exploration of the factors that set us apart.
Inclusive societies cultivate a profound
sense of meaningful belonging, fostering
support and value for individuals — integral
elements crucial for the success of our
organisational structure at Nostrum. We
take pride in cultivating a diverse and
inclusive workforce, providing a home for
individuals from various backgrounds.
Undoubtedly, our people constitute the
cornerstone of our success. Actively
engaging with individuals possessing
diverse assessments and perceptions leads
to superior decision-making, increased
innovation, and a more profound
commitment in the workplace. This is
why we dedicate special attention to the
ongoing enhancement of diversity
and inclusion within our Company.
Strength through diversity
GRI 401-3, 405-1
As of 31 December 2024, the total
workforce size has increased to 605
employees by the end of 2024, (2023: 571
employees), reflecting a growth of 34
employees over the year, with 79% being
male and 21% female (2023: 78% male and
22% female employees). As part of our
ongoing commitment to fostering an
inclusive workplace, our Diversity &
Inclusion strategy for 2024 has been to
establish a structured and systematic
approach to supporting HR development.
In 2024, progress in advancing female
representation has been reinforced
through data-driven tracking and visibility
efforts. A new HR dashboard now provides
monthly updates to the SMT, detailing the
portion of women in the workforce and per
department, significantly improving
transparency and monitoring.
2024 highlights
Employees
605
Average number of training hours
per employee
110
Training costs
US$0.6m
Group employees hired locally
98%
Female employees at Group level
21%
Represented among Nostrum’s
employees
15 countries
What we did
in 2024
• Promoted well-being and mental health
of employees by supporting office yoga
sessions and encouraging participation
in football and running competitions
• Implemented several targeted initiatives
to strengthen our corporate culture,
fostering a more inclusive, collaborative,
and values-driven workplace
• Launched a Diversity & Inclusion
training programme covering topics
such as cognitive biases, discrimination,
and microaggressions
• Enhanced employee engagement
through the Buddy Program, ensuring a
smoother onboarding experience for
new hires
What we plan to do
in 2025
• Develop and roll out a programme
focused on mental health and well-
being of our employees, including more
accessible mental health resources,
stress management workshops, and
employee well-being assessments
• Continue strengthening our corporate
culture by introducing feedback
mechanisms to measure employee
satisfaction and inclusion, and ensure
that these values are consistently
applied across all teams
62 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Empowering our people
Promoting diversity and inclusion is both a responsibility
and an opportunity in today’s world. Businesses have a
unique role to play as active contributors to a more
inclusive society. By building a diverse workplace, our
company can drive meaningful change, set an example,
and create an environment where individuals thrive.
For our Group, diversity and inclusion are
essential to our strength and success. We
believe that different perspectives drive
innovation, enhance collaboration, and
encourage more resilient organisations. By
cultivating an inclusive culture where every
employee feels valued and empowered, we
are creating the conditions for sustainable
growth and long-term excellence.
Fundamentally, this effort revolves around
recognising, respecting, and appreciating
our unique differences. It transcends mere
tolerance, delving into a profound
understanding of each individual and an
exploration of the factors that set us apart.
Inclusive societies cultivate a profound
sense of meaningful belonging, fostering
support and value for individuals — integral
elements crucial for the success of our
organisational structure at Nostrum. We
take pride in cultivating a diverse and
inclusive workforce, providing a home for
individuals from various backgrounds.
Undoubtedly, our people constitute the
cornerstone of our success. Actively
engaging with individuals possessing
diverse assessments and perceptions leads
to superior decision-making, increased
innovation, and a more profound
commitment in the workplace. This is
why we dedicate special attention to the
ongoing enhancement of diversity
and inclusion within our Company.
Strength through diversity
GRI 401-3, 405-1
As of 31 December 2024, the total
workforce size has increased to 605
employees by the end of 2024, (2023: 571
employees), reflecting a growth of 34
employees over the year, with 79% being
male and 21% female (2023: 78% male and
22% female employees). As part of our
ongoing commitment to fostering an
inclusive workplace, our Diversity &
Inclusion strategy for 2024 has been to
establish a structured and systematic
approach to supporting HR development.
In 2024, progress in advancing female
representation has been reinforced
through data-driven tracking and visibility
efforts. A new HR dashboard now provides
monthly updates to the SMT, detailing the
portion of women in the workforce and per
department, significantly improving
transparency and monitoring.
2024 highlights
Employees
605
Average number of training hours
per employee
110
Training costs
US$0.6m
Group employees hired locally
98%
Female employees at Group level
21%
Represented among Nostrum’s
employees
15 countries
What we did
in 2024
• Promoted well-being and mental health
of employees by supporting office yoga
sessions and encouraging participation
in football and running competitions
• Implemented several targeted initiatives
to strengthen our corporate culture,
fostering a more inclusive, collaborative,
and values-driven workplace
• Launched a Diversity & Inclusion
training programme covering topics
such as cognitive biases, discrimination,
and microaggressions
• Enhanced employee engagement
through the Buddy Program, ensuring a
smoother onboarding experience for
new hires
What we plan to do
in 2025
• Develop and roll out a programme
focused on mental health and well-
being of our employees, including more
accessible mental health resources,
stress management workshops, and
employee well-being assessments
• Continue strengthening our corporate
culture by introducing feedback
mechanisms to measure employee
satisfaction and inclusion, and ensure
that these values are consistently
applied across all teams
62 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Gender Diversity
As at 31 December 2024
Male Female
Alongside this, we have actively promoted
gender diversity initiatives, including
LinkedIn communication for Women in
Engineering Day, highlighting female talent
in technical roles. These efforts, combined
with continuous monitoring, help drive
meaningful progress beyond the 21%
female representation in 2024.
Nostrum has consistently upheld a corporate
Equality and Diversity Policy for several
years, underscoring our unwavering
dedication to these principles. At the end
of 2024, 20% of Group employees based in
Kazakhstan were female (2023: 21%).
Furthermore, in the UK, 40% of employees
were female (2023: 67%).
As of the end of 2024, our Senior Management
consists of 31% females (2023: 27%).
We actively advocate for female
promotions in cases of parity in
competencies and capacities. However,
swift progress is impeded by the shortage
of qualified female candidates willing to
work in field-based roles, where a majority
of our positions are situated, involving
rotational shifts. And whilst we are
encouraged by our diversity at Board level,
we do recognise that diversity remains an
ongoing issue in the oil and gas industry,
particularly with regard to gender diversity.
The Company has commenced a search for
an additional independent non-executive
director to replace Christopher Cox (who
left the Board in 2024). In such search the
Company is focusing on female candidates
in furtherance of the Company’s diversity
goals and is seeking to add a second
woman to the Board by the end of 2025.
We are targeting to further increase female
representation at the senior management
and at the department head level as
possible.
We take pride in our unwavering
commitment to cultivating a workplace
that celebrates diversity and fosters
inclusiveness. Our core belief is anchored
in recognising and appreciating the unique
contributions of every team member,
irrespective of their background or identity.
Acknowledging the continuous need for
progress, the Board continues to prioritise
diversity in upcoming appointments,
with a specific focus on ensuring robust
representation of Kazakh nationals in
senior roles.
Our Human Resources department actively
promoted internal growth and worked to
develop a diverse workforce at all levels of
our organisation. In 2024, 20% of Group
recruitment was female (2023: 25%).
In 2024, three employees took parental
leave and three employees returned from
parental leave, all females.
The Company prioritises diversity in terms
of nationalities, maintaining a diverse
management team with representation
from six different nationalities. Among
the eleven members of the Senior
Management Team, five are Kazakh
nationals as at 31 December 2024.
Furthermore, there were no reported
incidents of discrimination raised by any
Group employees in 2024.
Our HR strategy is driven by a strong
commitment to ESG principles, diversity
and inclusion, employee well-being, and
operational efficiency. As we continue to
strengthen collaboration with ESG, our
focus is on aligning HR initiatives with
sustainability and corporate responsibility
goals. Key programmes such as Diversity &
Inclusion in Recruitment, Mental Health
& Wellness, and the Global Employee
Handbook are designed to foster a more
inclusive and supportive workplace while
ensuring consistency across our global
operations.
HR Diversity Strategy and
key initiatives
This year once again, we have endeavoured
to enhance and progress in our promotion
of diversity and inclusion within our
organisation. Several initiatives have
been improved, and others have been
implemented.
To address underrepresentation, we have
advanced the Targeted Recruitment
Initiative, focusing on hiring individuals
from diverse backgrounds, including
women, minorities, and individuals with
disabilities. We have implemented concrete
measures such as creating inclusive job
advertisements, participating in diversity
hiring webinars, and start researches in
collaborating with the several recruitment
agencies dedicating specific attention to
consider underrepresented segments of
population. These initiatives reflect our
dedication to expanding our talent pool
and fostering equal opportunities. While
some limitations exist due to objective
criteria in the field, we are actively working
to refine inclusive hiring practices and
expand opportunities.
Our D&I Training Strategy has evolved to
incorporate interactive methodologies,
including video content, workshops,
remote learning with interactive scenarios,
and on-site training with external providers.
By leveraging digital tools for analytics and
reporting, we are ensuring measurable
progress in awareness and engagement.
Board
17%
(2023: 17%)
Senior Management
31%
(2023: 27%)
Employees
20%
(2023: 21%)
Number of employees
As at 31 December 2024
2024
2023
2022
2021
2020
605
571
566
559
564
Gender Diversity
As at 31 December 2024
2024
2023
2022
2021
2020
79%
78%
78%
77%
77%
605
571
566
559
564
21%
22%
22%
23%
23%
Male Female
5 1
9 4
471 121
GRI 2-7
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 63 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
As at 31 December 2024
Male Female
Alongside this, we have actively promoted
gender diversity initiatives, including
LinkedIn communication for Women in
Engineering Day, highlighting female talent
in technical roles. These efforts, combined
with continuous monitoring, help drive
meaningful progress beyond the 21%
female representation in 2024.
Nostrum has consistently upheld a corporate
Equality and Diversity Policy for several
years, underscoring our unwavering
dedication to these principles. At the end
of 2024, 20% of Group employees based in
Kazakhstan were female (2023: 21%).
Furthermore, in the UK, 40% of employees
were female (2023: 67%).
As of the end of 2024, our Senior Management
consists of 31% females (2023: 27%).
We actively advocate for female
promotions in cases of parity in
competencies and capacities. However,
swift progress is impeded by the shortage
of qualified female candidates willing to
work in field-based roles, where a majority
of our positions are situated, involving
rotational shifts. And whilst we are
encouraged by our diversity at Board level,
we do recognise that diversity remains an
ongoing issue in the oil and gas industry,
particularly with regard to gender diversity.
The Company has commenced a search for
an additional independent non-executive
director to replace Christopher Cox (who
left the Board in 2024). In such search the
Company is focusing on female candidates
in furtherance of the Company’s diversity
goals and is seeking to add a second
woman to the Board by the end of 2025.
We are targeting to further increase female
representation at the senior management
and at the department head level as
possible.
We take pride in our unwavering
commitment to cultivating a workplace
that celebrates diversity and fosters
inclusiveness. Our core belief is anchored
in recognising and appreciating the unique
contributions of every team member,
irrespective of their background or identity.
Acknowledging the continuous need for
progress, the Board continues to prioritise
diversity in upcoming appointments,
with a specific focus on ensuring robust
representation of Kazakh nationals in
senior roles.
Our Human Resources department actively
promoted internal growth and worked to
develop a diverse workforce at all levels of
our organisation. In 2024, 20% of Group
recruitment was female (2023: 25%).
In 2024, three employees took parental
leave and three employees returned from
parental leave, all females.
The Company prioritises diversity in terms
of nationalities, maintaining a diverse
management team with representation
from six different nationalities. Among
the eleven members of the Senior
Management Team, five are Kazakh
nationals as at 31 December 2024.
Furthermore, there were no reported
incidents of discrimination raised by any
Group employees in 2024.
Our HR strategy is driven by a strong
commitment to ESG principles, diversity
and inclusion, employee well-being, and
operational efficiency. As we continue to
strengthen collaboration with ESG, our
focus is on aligning HR initiatives with
sustainability and corporate responsibility
goals. Key programmes such as Diversity &
Inclusion in Recruitment, Mental Health
& Wellness, and the Global Employee
Handbook are designed to foster a more
inclusive and supportive workplace while
ensuring consistency across our global
operations.
HR Diversity Strategy and
key initiatives
This year once again, we have endeavoured
to enhance and progress in our promotion
of diversity and inclusion within our
organisation. Several initiatives have
been improved, and others have been
implemented.
To address underrepresentation, we have
advanced the Targeted Recruitment
Initiative, focusing on hiring individuals
from diverse backgrounds, including
women, minorities, and individuals with
disabilities. We have implemented concrete
measures such as creating inclusive job
advertisements, participating in diversity
hiring webinars, and start researches in
collaborating with the several recruitment
agencies dedicating specific attention to
consider underrepresented segments of
population. These initiatives reflect our
dedication to expanding our talent pool
and fostering equal opportunities. While
some limitations exist due to objective
criteria in the field, we are actively working
to refine inclusive hiring practices and
expand opportunities.
Our D&I Training Strategy has evolved to
incorporate interactive methodologies,
including video content, workshops,
remote learning with interactive scenarios,
and on-site training with external providers.
By leveraging digital tools for analytics and
reporting, we are ensuring measurable
progress in awareness and engagement.
Board
17%
(2023: 17%)
Senior Management
31%
(2023: 27%)
Employees
20%
(2023: 21%)
Number of employees
As at 31 December 2024
2024
2023
2022
2021
2020
605
571
566
559
564
Gender Diversity
As at 31 December 2024
2024
2023
2022
2021
2020
79%
78%
78%
77%
77%
605
571
566
559
564
21%
22%
22%
23%
23%
Male Female
5 1
9 4
471 121
GRI 2-7
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 63 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
The D&I training sessions in 2024 covered
key topics such as:
• Diversity & Inclusion;
• Equity & Equality;
• Cognitive Biases & Stereotypes;
• Discrimination & Prejudices;
• Disabilities at Work;
• Sexism at Work;
• Understanding Culture,
• Microaggressions.
Through our endeavours, we have
observed a significant rise in the interest
regarding diversity within our workforce,
evidenced by an increased number of
employees actively participating in our
surveys and e-learnings and engaging in
discussions with the Human Resources
Department.
Participant feedback has been
overwhelmingly positive, with high
engagement and valuable takeaways.
Employees reported increased awareness
of biases, a better understanding of the
impact of inclusive behaviors, and greater
ability to apply D&I principles in their daily
work.
The Buddy Programme in 2024 has
significantly improved new hire integration,
engagement, and productivity. 100% of
new hires provided positive feedback and
participated in surveys, with all reporting
faster understanding of company
processes. The programme also
strengthened workplace relationships, with
100% of Buddies finding the experience
rewarding and reporting stronger team
connections.
One of the key improvements in 2024 was
the integration of real workplace scenarios,
which made the sessions more interactive
and relevant. The structured feedback
process also provided valuable insights,
helping to refine and enhance future
sessions, ensuring D&I remains an ongoing
journey of learning.
To further encourage engagement, we held
a reward ceremony recognising those with
the highest participation rates, reinforcing
the importance of continuous involvement
in our D&I initiatives. The ceremony
included written surveys, all of which were
extremely positive, with many participants
expressing that they felt heard and
appreciated for their contributions.
We have proposed the institution of a
zero-tolerance approach to discrimination,
women, minorities, and individuals with
disabilities. We have implemented concrete
measures such as creating inclusive job
advertisements, participating in diversity
hiring webinars, and start researches in
collaborating with the several recruitment
agencies dedicating specific attention to
consider underrepresented population.
These initiatives reflect our dedication to
expanding our talent pool and fostering
equal opportunities. While some limitations
exist due to objective criteria in the field,
we are actively working to refine inclusive
hiring practices and expand opportunities.
We plan to enhance Employee well-being
and engagement in the year ahead.
As part of our commitment to fostering a
supportive and engaging workplace, we
are implementing a comprehensive plan to
enhance employee well-being and
workplace culture in the coming year. A key
initiative is the Employee Engagement
Program, which will introduce a structured
approach to gathering employee feedback
through regular surveys, pulse checks, and
focus groups. By leveraging digital tools
and leadership involvement, we aim to
create a transparent, data-driven system
that ensures continuous improvement
based on employee insights.
Additionally, we are strengthening our
support systems through the launch of a
comprehensive Employee Assistance
Programme (EAP). This initiative will
provide free, confidential counseling
services to employees facing stress,
anxiety, or other mental health challenges.
We will ensure easily accessible well-being
resources for our workforce.
To further support mental health
awareness, we will introduce monthly
Mental Health & Well-being Training
Programmes, covering key topics such as
stress management, mindfulness, and
emotional intelligence. Through virtual,
interactive sessions featuring gamified
learning experiences, employees will have
access to engaging and self-paced
educational resources via EdApp. These
initiatives collectively reinforce our
commitment to a healthier, more engaged,
and resilient workforce, laying the
foundation for long-term organisational
success.
Regarding anti-discrimination measures,
the Nostrum Code of Conduct safeguards
all employees and contractors from
unlawful discrimination based on aspects:
disability, socio-economic background,
age, gender, educational and professional
backgrounds.
Employee relations and social
guarantees
GRI 401-2
Nostrum prides itself on being an integral
community partner and one of the largest
employers in western Kazakhstan. In 2024
with 98% of Group employees hired locally
and 550 employees from Kazakhstan make
up approximately 91% of our workforce.
We hire both directly and occasionally
through local recruitment agencies. To
ensure alignment with our ESG standards,
we’ve engaged with these agencies,
reviewed their hiring policies, and
confirmed they comply with our
commitment to good practices. As at 31
December 2024, Nostrum had a total of
605 employees from 15 countries.
We offer all staff members competitive
benefits and remuneration packages in
compliance with all regulatory, guidelines
and requirements, which (to the extent
applicable) are also applied to those hired
as temporary or part-time employees.
In an effort to promote gender equality, we
continued to monitor gender pay
discrepancies. Emphasis has been placed
on supporting female advancement,
resulting in promoting seven females for
their competences. In 2024, we continued
to conduct our own gender pay
discrepancy review with a grouping of
employees based on their job function,
seniority, location and other factors.
As a result of this analysis, the following
observations were drawn:
1. Roles with higher pay are male-
dominated (C-suite)
2. We have seen that the gender pay gap
has further narrowed in 2024 as
compared to 2023, the average
employee salary in Kazakhstan was
1.32% higher for males (2023: 2.6%
higher for males) and the median
employee salary in Kazakhstan was
2.29% higher for females (2023: 5.3%
higher for females). At certain levels
female pay exceeds their male
counterparts (Office), while in the Field
the remuneration is higher for males
than females.
ESG REVIEW
Breakdown of employees and top
management by age
(%)
5
35
34
20
6
<30 30<39 40<49
50<59 60+
64 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
key topics such as:
• Diversity & Inclusion;
• Equity & Equality;
• Cognitive Biases & Stereotypes;
• Discrimination & Prejudices;
• Disabilities at Work;
• Sexism at Work;
• Understanding Culture,
• Microaggressions.
Through our endeavours, we have
observed a significant rise in the interest
regarding diversity within our workforce,
evidenced by an increased number of
employees actively participating in our
surveys and e-learnings and engaging in
discussions with the Human Resources
Department.
Participant feedback has been
overwhelmingly positive, with high
engagement and valuable takeaways.
Employees reported increased awareness
of biases, a better understanding of the
impact of inclusive behaviors, and greater
ability to apply D&I principles in their daily
work.
The Buddy Programme in 2024 has
significantly improved new hire integration,
engagement, and productivity. 100% of
new hires provided positive feedback and
participated in surveys, with all reporting
faster understanding of company
processes. The programme also
strengthened workplace relationships, with
100% of Buddies finding the experience
rewarding and reporting stronger team
connections.
One of the key improvements in 2024 was
the integration of real workplace scenarios,
which made the sessions more interactive
and relevant. The structured feedback
process also provided valuable insights,
helping to refine and enhance future
sessions, ensuring D&I remains an ongoing
journey of learning.
To further encourage engagement, we held
a reward ceremony recognising those with
the highest participation rates, reinforcing
the importance of continuous involvement
in our D&I initiatives. The ceremony
included written surveys, all of which were
extremely positive, with many participants
expressing that they felt heard and
appreciated for their contributions.
We have proposed the institution of a
zero-tolerance approach to discrimination,
women, minorities, and individuals with
disabilities. We have implemented concrete
measures such as creating inclusive job
advertisements, participating in diversity
hiring webinars, and start researches in
collaborating with the several recruitment
agencies dedicating specific attention to
consider underrepresented population.
These initiatives reflect our dedication to
expanding our talent pool and fostering
equal opportunities. While some limitations
exist due to objective criteria in the field,
we are actively working to refine inclusive
hiring practices and expand opportunities.
We plan to enhance Employee well-being
and engagement in the year ahead.
As part of our commitment to fostering a
supportive and engaging workplace, we
are implementing a comprehensive plan to
enhance employee well-being and
workplace culture in the coming year. A key
initiative is the Employee Engagement
Program, which will introduce a structured
approach to gathering employee feedback
through regular surveys, pulse checks, and
focus groups. By leveraging digital tools
and leadership involvement, we aim to
create a transparent, data-driven system
that ensures continuous improvement
based on employee insights.
Additionally, we are strengthening our
support systems through the launch of a
comprehensive Employee Assistance
Programme (EAP). This initiative will
provide free, confidential counseling
services to employees facing stress,
anxiety, or other mental health challenges.
We will ensure easily accessible well-being
resources for our workforce.
To further support mental health
awareness, we will introduce monthly
Mental Health & Well-being Training
Programmes, covering key topics such as
stress management, mindfulness, and
emotional intelligence. Through virtual,
interactive sessions featuring gamified
learning experiences, employees will have
access to engaging and self-paced
educational resources via EdApp. These
initiatives collectively reinforce our
commitment to a healthier, more engaged,
and resilient workforce, laying the
foundation for long-term organisational
success.
Regarding anti-discrimination measures,
the Nostrum Code of Conduct safeguards
all employees and contractors from
unlawful discrimination based on aspects:
disability, socio-economic background,
age, gender, educational and professional
backgrounds.
Employee relations and social
guarantees
GRI 401-2
Nostrum prides itself on being an integral
community partner and one of the largest
employers in western Kazakhstan. In 2024
with 98% of Group employees hired locally
and 550 employees from Kazakhstan make
up approximately 91% of our workforce.
We hire both directly and occasionally
through local recruitment agencies. To
ensure alignment with our ESG standards,
we’ve engaged with these agencies,
reviewed their hiring policies, and
confirmed they comply with our
commitment to good practices. As at 31
December 2024, Nostrum had a total of
605 employees from 15 countries.
We offer all staff members competitive
benefits and remuneration packages in
compliance with all regulatory, guidelines
and requirements, which (to the extent
applicable) are also applied to those hired
as temporary or part-time employees.
In an effort to promote gender equality, we
continued to monitor gender pay
discrepancies. Emphasis has been placed
on supporting female advancement,
resulting in promoting seven females for
their competences. In 2024, we continued
to conduct our own gender pay
discrepancy review with a grouping of
employees based on their job function,
seniority, location and other factors.
As a result of this analysis, the following
observations were drawn:
1. Roles with higher pay are male-
dominated (C-suite)
2. We have seen that the gender pay gap
has further narrowed in 2024 as
compared to 2023, the average
employee salary in Kazakhstan was
1.32% higher for males (2023: 2.6%
higher for males) and the median
employee salary in Kazakhstan was
2.29% higher for females (2023: 5.3%
higher for females). At certain levels
female pay exceeds their male
counterparts (Office), while in the Field
the remuneration is higher for males
than females.
ESG REVIEW
Breakdown of employees and top
management by age
(%)
5
35
34
20
6
<30 30<39 40<49
50<59 60+
64 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Promoted well-being
and mental health
of employees by
supporting office yoga
Inside our Mental Health & Wellness
Program, workplace yoga has become a
valued initiative for mental and physical
well-being. Held several times per week,
these sessions provide employees with a
structured way to manage stress,
improve focus, and maintain physical
balance.
With classes led by local instructors and
a guest teacher from India, employees
can participate during lunch breaks or
after work. In warmer months, sessions
take place on the Uralsk office rooftop,
offering a space for relaxation and
movement in fresh air.
Despite short-term variations, our
commitment remains steadfast towards fair
and balanced recruitment and promotion
practices along with consistent skills
evaluation. We aim to increase the
presence of women in senior roles and
areas of our businesses where they are
currently under-represented, with the
long-term goal of eliminating the gender
pay gap. The Board will continue to monitor
any gender pay discrepancy by defining
targets and activities to address any
inequalities discovered.
Succession Planning Policy
The Company has implemented Succession
Planning Policy that aims to identify future
staffing needs and employees with the
skills and potential to be developed for
carrying out future management roles.
Employee well-being,
education and training
GRI 404-2
In 2024, we introduced several measures to
enhance employee well-being, focusing on
both physical and mental health. Our
internal newsletters highlighted positive
company news, celebrated employees’
achievements, such as those excelling in
sports, and recognised long-serving staff
like our chefs in the field and our director
who recently retired. We also shared
inspiring messages from our CEO to foster
a positive atmosphere.
Looking ahead to 2025, we are working on a
comprehensive mental health and wellness
programme, which will include employee
engagement surveys, updated remote work
policies, and other initiatives aimed at further
supporting our employees’ well-being.
Investing in the development of our people
is crucial for fostering economic self-
sufficiency within the local communities
where we operate. Under the terms of the
PSA, we are required to spend 1% of our
annual Chinarevskoye field development
costs towards education and training.
In 2024, the training budget was fully
allocated across various departments to
address the evolving needs of our
workforce, with a focus on skills
development and transition assistance.
Additionally, we used the EdApp digital
platform to deliver training on all our D&I
initiatives. This platform allowed us to
provide flexible and tailored training,
ensuring our employees received the
necessary resources to engage with and
apply our diversity and inclusion efforts
effectively.
We believe investing in our people is key
to economic self-empowerment in the
communities in which we operate. Under
the terms of the PSA, we are required to
accrue 1% of our annual Chinarevskoye
field development costs and spend this
amount on education and training.
In 2024, 538 employees benefited from
education and training programmes
(2023: 500 employees). Our total Group
training costs in 2024 were US$0.6m
(2023: US$0.6m) and the total number of
training days in 2024 was 7,435 days
(2023: 5,702 days).
In 2024, Nostrum supported numerous
educational programmes, including
Executive Certificate in Strategising
Sustainable Business Transformation at
HEC School, MBA, MBA in Finance,
Managing Performance with OKR
(Objectives and Key Results), ROI (Return of
Investments) seminar for Learning and
Development professionals, NEBOSH, ESG
reporting training, Diversity and Inclusion
trainings, Setting goals and objectives for
managers, Petrel Fundamentals, Petrel
Geological Interpretation, Implementing
and Operating Cisco Enterprise Network
Core Technologies, CCNA Implementing
and Administering Cisco Solutions v2.0,
Installation and programming of Danfoss
frequency converters, RUS2001 Factory
Talk View ME Design, Operation and
maintenance of VEGA equipment, Main
changes in the tax legislation of the
Republic of Kazakhstan, Practical issues
on the procedure for accounting for CIT
course training was undertaken by
operational and head office teams,
department heads, specialist engineers
and other technicians at different levels
across the organisation.
HSE training (including fire safety) is carried
out at least annually in accordance with our
operating practices and as required by
the PSA.
Looking ahead to 2025, a key initiative will
be the implementation of a remote working
policy, aimed at providing greater flexibility
while maintaining productivity and
collaboration. This policy is part of our
broader commitment to improving
work-life balance and supporting employee
well-being.
In colder seasons, they continue in a
dedicated indoor area, ensuring year-round
access.
Participation has steadily grown, reflecting
the importance of well-being in the
workplace and proving the actual benefits
of this initiative.
While logistical constraints have made
expansion to field sites challenging, the
company remains committed to
exploring ways to support employee
health across all locations.
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 65 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
and mental health
of employees by
supporting office yoga
Inside our Mental Health & Wellness
Program, workplace yoga has become a
valued initiative for mental and physical
well-being. Held several times per week,
these sessions provide employees with a
structured way to manage stress,
improve focus, and maintain physical
balance.
With classes led by local instructors and
a guest teacher from India, employees
can participate during lunch breaks or
after work. In warmer months, sessions
take place on the Uralsk office rooftop,
offering a space for relaxation and
movement in fresh air.
Despite short-term variations, our
commitment remains steadfast towards fair
and balanced recruitment and promotion
practices along with consistent skills
evaluation. We aim to increase the
presence of women in senior roles and
areas of our businesses where they are
currently under-represented, with the
long-term goal of eliminating the gender
pay gap. The Board will continue to monitor
any gender pay discrepancy by defining
targets and activities to address any
inequalities discovered.
Succession Planning Policy
The Company has implemented Succession
Planning Policy that aims to identify future
staffing needs and employees with the
skills and potential to be developed for
carrying out future management roles.
Employee well-being,
education and training
GRI 404-2
In 2024, we introduced several measures to
enhance employee well-being, focusing on
both physical and mental health. Our
internal newsletters highlighted positive
company news, celebrated employees’
achievements, such as those excelling in
sports, and recognised long-serving staff
like our chefs in the field and our director
who recently retired. We also shared
inspiring messages from our CEO to foster
a positive atmosphere.
Looking ahead to 2025, we are working on a
comprehensive mental health and wellness
programme, which will include employee
engagement surveys, updated remote work
policies, and other initiatives aimed at further
supporting our employees’ well-being.
Investing in the development of our people
is crucial for fostering economic self-
sufficiency within the local communities
where we operate. Under the terms of the
PSA, we are required to spend 1% of our
annual Chinarevskoye field development
costs towards education and training.
In 2024, the training budget was fully
allocated across various departments to
address the evolving needs of our
workforce, with a focus on skills
development and transition assistance.
Additionally, we used the EdApp digital
platform to deliver training on all our D&I
initiatives. This platform allowed us to
provide flexible and tailored training,
ensuring our employees received the
necessary resources to engage with and
apply our diversity and inclusion efforts
effectively.
We believe investing in our people is key
to economic self-empowerment in the
communities in which we operate. Under
the terms of the PSA, we are required to
accrue 1% of our annual Chinarevskoye
field development costs and spend this
amount on education and training.
In 2024, 538 employees benefited from
education and training programmes
(2023: 500 employees). Our total Group
training costs in 2024 were US$0.6m
(2023: US$0.6m) and the total number of
training days in 2024 was 7,435 days
(2023: 5,702 days).
In 2024, Nostrum supported numerous
educational programmes, including
Executive Certificate in Strategising
Sustainable Business Transformation at
HEC School, MBA, MBA in Finance,
Managing Performance with OKR
(Objectives and Key Results), ROI (Return of
Investments) seminar for Learning and
Development professionals, NEBOSH, ESG
reporting training, Diversity and Inclusion
trainings, Setting goals and objectives for
managers, Petrel Fundamentals, Petrel
Geological Interpretation, Implementing
and Operating Cisco Enterprise Network
Core Technologies, CCNA Implementing
and Administering Cisco Solutions v2.0,
Installation and programming of Danfoss
frequency converters, RUS2001 Factory
Talk View ME Design, Operation and
maintenance of VEGA equipment, Main
changes in the tax legislation of the
Republic of Kazakhstan, Practical issues
on the procedure for accounting for CIT
course training was undertaken by
operational and head office teams,
department heads, specialist engineers
and other technicians at different levels
across the organisation.
HSE training (including fire safety) is carried
out at least annually in accordance with our
operating practices and as required by
the PSA.
Looking ahead to 2025, a key initiative will
be the implementation of a remote working
policy, aimed at providing greater flexibility
while maintaining productivity and
collaboration. This policy is part of our
broader commitment to improving
work-life balance and supporting employee
well-being.
In colder seasons, they continue in a
dedicated indoor area, ensuring year-round
access.
Participation has steadily grown, reflecting
the importance of well-being in the
workplace and proving the actual benefits
of this initiative.
While logistical constraints have made
expansion to field sites challenging, the
company remains committed to
exploring ways to support employee
health across all locations.
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 65 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
Hiring and staff turnover
GRI 401-1
As part of the Company’s costs
optimisation plan, in 2024, 31 employees
(of which 24 males and 7 females) were
released or agreed to voluntarily resign,
and their positions were not filled (2023: 48
employees). This was the main cause of
staff turnover. The number and percentage
of new employees hired in 2024 was 49 (of
which 8 were females and 41 were males).
As of 2024, employee retention rates have
remained stable, with a continued focus on
fostering a supportive work environment
and career development opportunities.
While turnover trends are consistent with
previous years, we are actively addressing
potential areas for improvement by
conducting regular employee feedback
surveys and implementing targeted
initiatives to enhance employee
engagement.
Workforce representation
GRI 2-26
The Company remains committed to
ensuring that the views of its workforce are
effectively represented at the Board level.
In 2018, the Company established
collective agreements to facilitate
workforce representation. In 2023,
Chris Hopkinson was appointed as the
Company’s Non-Executive Director
responsible for gathering employee
perspectives and integrating them into the
Board’s decision-making processes. He
continued to serve in this role in 2024 and
the Board continues to welcome employee
input and take employees’ perspectives
into consideration in its decision-making.
The Board of Directors strives to adopt
best practices in corporate governance,
including engagement with the Group’s
workforce. In particular, the Board wishes
to understand the views of the Group’s
workforce and to take such views into
consideration in Board discussions and
decision-making.
Communication between the workforce
and the Board is often referred to as the
“employee voice”, and it is hoped that a
wide selection of views from the workforce
can be gathered through a range of formal
and informal channels.
Such channels are intended to help the
workforce share ideas and concerns with
senior management and the Board. This
communication provides useful feedback
about business practices from those
delivering them and can help empower
colleagues. The Board encourages
individuals to raise any concerns they may
have. Doing so acts as an early warning
system for actual or potential problems and
helps to manage risk. The Board actively
listens to workforce concerns and
subsequently provides feedback on how
the matter raised has been considered,
including any action taken. The Board
emphasised that the workforce should feel
safe to raise concerns.
Nostrum Code of Conduct
Nostrum is committed to maintaining a
Group-wide culture that recognises
international standards of human rights and
this is incorporated in the Group’s Code of
Conduct.
Human Rights Policy
GRI 2-23
The Group has a Human Rights Policy which
reflects the desire to comply with industry
best practice and the HR department has
raised awareness of the numerous benefits
and interests that our Human Rights Policy
provide to our organisation.
First and foremost, the Human Rights
Policy demonstrates our commitment to
upholding fundamental principles of
human dignity, respect, and equality. By
establishing a framework that promotes fair
treatment of employees, stakeholders, and
communities, we can enhance our position
as a responsible and ethical business that
contributes positively to the social and
economic development of the regions
where we operate.
In addition to these ethical considerations,
there are practical benefits. By promoting
diversity, inclusion, and non-discrimination,
we can attract and retain a more diverse
and talented workforce. Furthermore, a
Human Rights Policy can help to mitigate
legal, financial, and reputational risks
associated with human rights violations.
Moreover, the Human Rights Policy also
enhances our relationships with key
stakeholders, including customers,
investors, regulators, and civil society
organisations. By engaging in transparent
and constructive dialogue about human
rights issues, we can build trust, and
credibility.
ESG REVIEW
The Human Rights Policy is in addition to
the Nostrum Code of Conduct (Code),
which defines the principles that guide
business conduct and provides a non-
exhaustive outline of what Nostrum
considers permissible conduct by its
employees. These principles include
provisions relating to human rights and
diversity in the workplace, insider dealing
and insider information.
A copy of the Code is available on the
Group’s website in both Russian and
English and can be downloaded from our
website: www.nostrumoilandgas.com.
Modern Slavery Act Statement
GRI 2-23, 408-1, 409-1
There are no areas of activity of the Group
(or its vendors) believed to have significant
risk of child/forced labour/hazardous work
performance by young employees.
Under the Group’s standard supply
contracts, the Group is entitled to require
suppliers to demonstrate compliance with
the Code and to hold its suppliers
responsible for compliance by their supply
chain with equivalent terms.
A copy of our Modern Slavery and
Transparency Statement is available on our
website: www.nostrumoilandgas.com.
Whistleblowing Policy
GRI 2-23
We have a Whistleblowing Policy which
takes into account the Whistleblowing
Arrangements Code of Practice issued by
the British Standards Institute and Public
Concern at Work, and which applies to all
individuals working for the Group at all
levels and grades.
The Whistleblowing Policy sets out details
of two compliance liaison officers who
speak a variety of languages for the
purposes of reporting any concerns. The
Whistleblowing Policy is also mentioned in
the Code, and a person who reports any
matter in good faith will be protected
against any sanctions. More information
on this matter is provided on page 98.
The updated version of the Whistleblowing
Policy, revised in August 2023, is available
on the Company’s website. At the time of
writing, we have received no reports under
our Whistleblowing Policy of forced/
involuntary labour or human trafficking in
relation to our business or supply chains.
For further details, please see our website:
www.nostrumoilandgas.com.
66 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
GRI 401-1
As part of the Company’s costs
optimisation plan, in 2024, 31 employees
(of which 24 males and 7 females) were
released or agreed to voluntarily resign,
and their positions were not filled (2023: 48
employees). This was the main cause of
staff turnover. The number and percentage
of new employees hired in 2024 was 49 (of
which 8 were females and 41 were males).
As of 2024, employee retention rates have
remained stable, with a continued focus on
fostering a supportive work environment
and career development opportunities.
While turnover trends are consistent with
previous years, we are actively addressing
potential areas for improvement by
conducting regular employee feedback
surveys and implementing targeted
initiatives to enhance employee
engagement.
Workforce representation
GRI 2-26
The Company remains committed to
ensuring that the views of its workforce are
effectively represented at the Board level.
In 2018, the Company established
collective agreements to facilitate
workforce representation. In 2023,
Chris Hopkinson was appointed as the
Company’s Non-Executive Director
responsible for gathering employee
perspectives and integrating them into the
Board’s decision-making processes. He
continued to serve in this role in 2024 and
the Board continues to welcome employee
input and take employees’ perspectives
into consideration in its decision-making.
The Board of Directors strives to adopt
best practices in corporate governance,
including engagement with the Group’s
workforce. In particular, the Board wishes
to understand the views of the Group’s
workforce and to take such views into
consideration in Board discussions and
decision-making.
Communication between the workforce
and the Board is often referred to as the
“employee voice”, and it is hoped that a
wide selection of views from the workforce
can be gathered through a range of formal
and informal channels.
Such channels are intended to help the
workforce share ideas and concerns with
senior management and the Board. This
communication provides useful feedback
about business practices from those
delivering them and can help empower
colleagues. The Board encourages
individuals to raise any concerns they may
have. Doing so acts as an early warning
system for actual or potential problems and
helps to manage risk. The Board actively
listens to workforce concerns and
subsequently provides feedback on how
the matter raised has been considered,
including any action taken. The Board
emphasised that the workforce should feel
safe to raise concerns.
Nostrum Code of Conduct
Nostrum is committed to maintaining a
Group-wide culture that recognises
international standards of human rights and
this is incorporated in the Group’s Code of
Conduct.
Human Rights Policy
GRI 2-23
The Group has a Human Rights Policy which
reflects the desire to comply with industry
best practice and the HR department has
raised awareness of the numerous benefits
and interests that our Human Rights Policy
provide to our organisation.
First and foremost, the Human Rights
Policy demonstrates our commitment to
upholding fundamental principles of
human dignity, respect, and equality. By
establishing a framework that promotes fair
treatment of employees, stakeholders, and
communities, we can enhance our position
as a responsible and ethical business that
contributes positively to the social and
economic development of the regions
where we operate.
In addition to these ethical considerations,
there are practical benefits. By promoting
diversity, inclusion, and non-discrimination,
we can attract and retain a more diverse
and talented workforce. Furthermore, a
Human Rights Policy can help to mitigate
legal, financial, and reputational risks
associated with human rights violations.
Moreover, the Human Rights Policy also
enhances our relationships with key
stakeholders, including customers,
investors, regulators, and civil society
organisations. By engaging in transparent
and constructive dialogue about human
rights issues, we can build trust, and
credibility.
ESG REVIEW
The Human Rights Policy is in addition to
the Nostrum Code of Conduct (Code),
which defines the principles that guide
business conduct and provides a non-
exhaustive outline of what Nostrum
considers permissible conduct by its
employees. These principles include
provisions relating to human rights and
diversity in the workplace, insider dealing
and insider information.
A copy of the Code is available on the
Group’s website in both Russian and
English and can be downloaded from our
website: www.nostrumoilandgas.com.
Modern Slavery Act Statement
GRI 2-23, 408-1, 409-1
There are no areas of activity of the Group
(or its vendors) believed to have significant
risk of child/forced labour/hazardous work
performance by young employees.
Under the Group’s standard supply
contracts, the Group is entitled to require
suppliers to demonstrate compliance with
the Code and to hold its suppliers
responsible for compliance by their supply
chain with equivalent terms.
A copy of our Modern Slavery and
Transparency Statement is available on our
website: www.nostrumoilandgas.com.
Whistleblowing Policy
GRI 2-23
We have a Whistleblowing Policy which
takes into account the Whistleblowing
Arrangements Code of Practice issued by
the British Standards Institute and Public
Concern at Work, and which applies to all
individuals working for the Group at all
levels and grades.
The Whistleblowing Policy sets out details
of two compliance liaison officers who
speak a variety of languages for the
purposes of reporting any concerns. The
Whistleblowing Policy is also mentioned in
the Code, and a person who reports any
matter in good faith will be protected
against any sanctions. More information
on this matter is provided on page 98.
The updated version of the Whistleblowing
Policy, revised in August 2023, is available
on the Company’s website. At the time of
writing, we have received no reports under
our Whistleblowing Policy of forced/
involuntary labour or human trafficking in
relation to our business or supply chains.
For further details, please see our website:
www.nostrumoilandgas.com.
66 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Social responsibility
Nostrum takes pride in being a proactive and responsible
partner within the community, fostering a culture of
transparency, engagement, and social accountability.
Our commitment encompasses both social and financial
support initiatives aimed at improving the well-being of
local residents. This dedication is reflected in our efforts
to promote environmental sustainability, uphold ethical
standards, support philanthropic endeavors, and
demonstrate economic responsibility.
Philanthropy: 2024
key initiatives
GRI 203-1, 413-1
We acknowledge the importance of
managing and mitigating potential risks
and impacts arising from our activities to
support the communities affected by our
operations.
During 2024, Nostrum has been actively
involved in continuous charitable activities
aimed at supporting local communities,
particularly in the areas of its operation.
In 2024, West Kazakhstan and a number of
other regions suffered flooding, most
significant for the recent decades. Many
communities were completely destroyed,
including Baiterek district where the
company operates. Nostrum has actively
engaged in helping local residents who
were left homeless, and built 20 houses by
investing own funds in the amount of
US$1.2m (KZT550m) for 6 houses in
“Makhambet” village, 13 – in “Ankaty”
village and 1 – in “Terekty” village.
Other social and charitable assistance to
local communities included support to
culture, sports and educational
programmes, as well as social development
of new communities in the region. In 2024,
social projects and charitable activities to
support local communities cost the
company US$0.1m (KZT25m). To support
local communities in 2024, the company
invested the most significant amounts
in the following:
Contribution to regional
development
• support for nearby communities to
prevent natural disasters during difficult
weather conditions (blizzards, snowfalls,
floods) by providing special machinery
and equipment;
• financial support of labor veterans;
improvement of cultural institutions
facilities in villages.
Supporting schools
• repair and improvement of facilities of
general education schools of the region
and pre-school institutions, purchase of
school articles for children from large and
low-income families.
2024 highlights
Taxes paid since inception to the local
and federal government authorities of
the Republic of Kazakhstan
US$1.2bn +
Investments in the country
since 1997
US$2.5bn +
Spent to build 20 houses built
in 3 villages for flood victims
US$1.2m
Paid to governments
US$27.93m
What we did
in 2024
• Provided support to the community by
constructing homes for those affected
by the floods in the region
• Continued sponsorship of young talents
and regional athletes to support
participation in local and international
competitions
• A reliable network with local suppliers
supported business continuity and
sustainable growth, while our
investment in local business
development fostered their long-term
success and resilience
• Awarded with the Certificate of
Appreciation for the aid and charity
works provided by the Akim of
West Kazakhstan Region
What we plan to do
in 2025
• Contribute to creating positive impacts
in the communities by fostering
collaboration and open communication
with those affected by our activities.
GRI 203-2
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 67 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
Nostrum takes pride in being a proactive and responsible
partner within the community, fostering a culture of
transparency, engagement, and social accountability.
Our commitment encompasses both social and financial
support initiatives aimed at improving the well-being of
local residents. This dedication is reflected in our efforts
to promote environmental sustainability, uphold ethical
standards, support philanthropic endeavors, and
demonstrate economic responsibility.
Philanthropy: 2024
key initiatives
GRI 203-1, 413-1
We acknowledge the importance of
managing and mitigating potential risks
and impacts arising from our activities to
support the communities affected by our
operations.
During 2024, Nostrum has been actively
involved in continuous charitable activities
aimed at supporting local communities,
particularly in the areas of its operation.
In 2024, West Kazakhstan and a number of
other regions suffered flooding, most
significant for the recent decades. Many
communities were completely destroyed,
including Baiterek district where the
company operates. Nostrum has actively
engaged in helping local residents who
were left homeless, and built 20 houses by
investing own funds in the amount of
US$1.2m (KZT550m) for 6 houses in
“Makhambet” village, 13 – in “Ankaty”
village and 1 – in “Terekty” village.
Other social and charitable assistance to
local communities included support to
culture, sports and educational
programmes, as well as social development
of new communities in the region. In 2024,
social projects and charitable activities to
support local communities cost the
company US$0.1m (KZT25m). To support
local communities in 2024, the company
invested the most significant amounts
in the following:
Contribution to regional
development
• support for nearby communities to
prevent natural disasters during difficult
weather conditions (blizzards, snowfalls,
floods) by providing special machinery
and equipment;
• financial support of labor veterans;
improvement of cultural institutions
facilities in villages.
Supporting schools
• repair and improvement of facilities of
general education schools of the region
and pre-school institutions, purchase of
school articles for children from large and
low-income families.
2024 highlights
Taxes paid since inception to the local
and federal government authorities of
the Republic of Kazakhstan
US$1.2bn +
Investments in the country
since 1997
US$2.5bn +
Spent to build 20 houses built
in 3 villages for flood victims
US$1.2m
Paid to governments
US$27.93m
What we did
in 2024
• Provided support to the community by
constructing homes for those affected
by the floods in the region
• Continued sponsorship of young talents
and regional athletes to support
participation in local and international
competitions
• A reliable network with local suppliers
supported business continuity and
sustainable growth, while our
investment in local business
development fostered their long-term
success and resilience
• Awarded with the Certificate of
Appreciation for the aid and charity
works provided by the Akim of
West Kazakhstan Region
What we plan to do
in 2025
• Contribute to creating positive impacts
in the communities by fostering
collaboration and open communication
with those affected by our activities.
GRI 203-2
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 67 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
Promotion of sports
• financial support for young athletes and
winners of various intellectual Olympiads
to participate in international
competitions and contests, including
financing of teams of the Republic of
Kazakhstan participating in the World
Karate Championship in Tashkent, which
took first place, as well as Robotics
Olympiad in the USA “WPI FIRST
Championship-2024”.
Supporting healthcare
• financing medical treatment outside the
Republic of Kazakhstan.
Civil duty: Payment
to governments
GRI 207-4
Nostrum is dedicated to maintaining
transparency in its business operations and
financial transactions with governments.
We have established a formal public
relations and government relations
framework that governs our interactions
with local community and with government,
outlining the principles and objectives of
our engagement with various stakeholder
groups.
Recognising the significance of a strong
social partnership between business and
society, the Company actively contributes
to the sustainable development of the
regions in which it operates. Through its
initiatives, Nostrum strives to foster
favorable conditions and enhance the
quality of life in the communities
surrounding its core business activities.
In 2024, a total of US$27.93m (in 2023:
US$59.94m) was paid to governments by
Nostrum and its subsidiaries. We will report
on 2025 payments to governments in the
first half of 2026. For more details, please
see the Governance page of our website.
Nostrum upholds its civic responsibility
with utmost commitment, recognising that
fulfilling its tax obligations appropriately is
essential for local economic development
and enhances the capacity of local
governments to serve their communities
effectively.
The Group did not engage in any lobbying
or political finance activities in 2024 and
had no lobbying or political expenses.
The Group is a member of certain business
and sectoral groups for which it pays a
standard membership fee, as specified
below:
• Atameken (The National Chamber of
Commerce of Kazakhstan, which
represents the interests of businesses,
covering all business areas, and the main
task of which is the protection of the
rights and interests of the business
community in Kazakhstan). Membership
Fee paid for 2024: US$24,042.
• KazEnergy (An association including
numerous companies operating in the oil
and gas industry, as well as in the electric
power and the nuclear industries, with
the goal of promoting the sustainable
and balanced development of the energy
industry of the Republic of Kazakhstan).
Membership Fee paid for 2024:
US$20,875.
Economic responsibility:
Spend with local suppliers
GRI 204-1
We are committed to partnering with local
companies and in 2024 we spent 88.2%
(in 2023: 74.89%) of our supplier budget
on RoK national suppliers. The increase
in percentage is primarily due to the
completion of the restructuring process in
2023, during which advisory fees were paid
to service providers outside Kazakhstan.
As there were no such restructuring-related
expenses in 2024, a larger portion of the
budget was allocated to local suppliers.
Environmentally friendly:
Liquidation fund
contribution
Under the terms of the Chinarevskoye PSA,
Nostrum is obliged to accumulate a cash
reserve liquidation fund which by the
end of the PSA should total US$12.0m
earmarked for the elimination of
environmental consequences of our
operating activities. At the end of 2024,
US$9.1m had been accumulated
(2023: US$8.6m).
High ethical standards:
Anti-Corruption and
Bribery Policy
For more information on the Group’s
Anti-Corruption and Bribery Policy, please
see page 98.
ESG REVIEW
68 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
• financial support for young athletes and
winners of various intellectual Olympiads
to participate in international
competitions and contests, including
financing of teams of the Republic of
Kazakhstan participating in the World
Karate Championship in Tashkent, which
took first place, as well as Robotics
Olympiad in the USA “WPI FIRST
Championship-2024”.
Supporting healthcare
• financing medical treatment outside the
Republic of Kazakhstan.
Civil duty: Payment
to governments
GRI 207-4
Nostrum is dedicated to maintaining
transparency in its business operations and
financial transactions with governments.
We have established a formal public
relations and government relations
framework that governs our interactions
with local community and with government,
outlining the principles and objectives of
our engagement with various stakeholder
groups.
Recognising the significance of a strong
social partnership between business and
society, the Company actively contributes
to the sustainable development of the
regions in which it operates. Through its
initiatives, Nostrum strives to foster
favorable conditions and enhance the
quality of life in the communities
surrounding its core business activities.
In 2024, a total of US$27.93m (in 2023:
US$59.94m) was paid to governments by
Nostrum and its subsidiaries. We will report
on 2025 payments to governments in the
first half of 2026. For more details, please
see the Governance page of our website.
Nostrum upholds its civic responsibility
with utmost commitment, recognising that
fulfilling its tax obligations appropriately is
essential for local economic development
and enhances the capacity of local
governments to serve their communities
effectively.
The Group did not engage in any lobbying
or political finance activities in 2024 and
had no lobbying or political expenses.
The Group is a member of certain business
and sectoral groups for which it pays a
standard membership fee, as specified
below:
• Atameken (The National Chamber of
Commerce of Kazakhstan, which
represents the interests of businesses,
covering all business areas, and the main
task of which is the protection of the
rights and interests of the business
community in Kazakhstan). Membership
Fee paid for 2024: US$24,042.
• KazEnergy (An association including
numerous companies operating in the oil
and gas industry, as well as in the electric
power and the nuclear industries, with
the goal of promoting the sustainable
and balanced development of the energy
industry of the Republic of Kazakhstan).
Membership Fee paid for 2024:
US$20,875.
Economic responsibility:
Spend with local suppliers
GRI 204-1
We are committed to partnering with local
companies and in 2024 we spent 88.2%
(in 2023: 74.89%) of our supplier budget
on RoK national suppliers. The increase
in percentage is primarily due to the
completion of the restructuring process in
2023, during which advisory fees were paid
to service providers outside Kazakhstan.
As there were no such restructuring-related
expenses in 2024, a larger portion of the
budget was allocated to local suppliers.
Environmentally friendly:
Liquidation fund
contribution
Under the terms of the Chinarevskoye PSA,
Nostrum is obliged to accumulate a cash
reserve liquidation fund which by the
end of the PSA should total US$12.0m
earmarked for the elimination of
environmental consequences of our
operating activities. At the end of 2024,
US$9.1m had been accumulated
(2023: US$8.6m).
High ethical standards:
Anti-Corruption and
Bribery Policy
For more information on the Group’s
Anti-Corruption and Bribery Policy, please
see page 98.
ESG REVIEW
68 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Environmental stewardship
Nostrum acknowledges its environmental responsibility
and is dedicated to advancing a transition toward a more
sustainable energy portfolio. Our approach prioritises
responsible operations, with a structured focus on
minimising environmental impact across our areas of
activity. We comply with the environmental regulations
of RoK, which are aligned with international standards,
and actively implement initiatives to minimise emissions
and waste.
In 2024, there were fines and sanctions
against the Group for non-compliance with
environmental regulations, in the amount
of US$200 thousand. Furthermore, we
recognise the importance of climate
change and are committed to mitigating
our greenhouse gas emissions.
Climate change
GRI 305-7
Nostrum recognises the breadth and
significance of its operational impacts and
is committed to aligning its activities with
sustainable resource management
principles, environmental stewardship,
and climate risk mitigation.
As a producer, our operational activities
contribute to greenhouse gas (GHG)
emissions, and we recognise the
responsibility mitigate our environmental
impact in a sustainable and responsible
manner. Minimising emissions remains a
key strategic priority for the Nostrum.
We understand that hydrocarbon
exploration and production significantly
contribute to GHG emissions, and
therefore, we are committed to addressing
climate change. In 2024, minimising the
environmental impact of our operations
was a core corporate social responsibility
objective, and this remains a strategic
priority for Nostrum moving forward.
Nostrum organises its operations to comply
with the emissions limits outlined in the
Environmental Emissions Permit issued by
Kazakhstan and establishes internal targets
that exceed regulatory requirements to
further enhance environmental
performance.
When applying for an Environmental
Emissions Permit, preliminary standards
for maximum permitted emissions are
determined, based on the analysis of
historical data from preceding 2-3 years.
The Board is responsible for ensuring that
Nostrum complies fully with Listing Rule
14.3.27R and Listing Rule 9.8.6R(8) in this
annual report. Moreover, the Board is also
responsible for the governance, strategies,
risk assessment, management systems and
KPIs relating to climate change and GHG
emissions.
2024 highlights
What we did
in 2024
• Implemented an automated emissions
monitoring system for real-time
environmental surveillance and
regulatory compliance.
• Continued investments in renewable
energy, purchasing 1,865 thousand
kWh from sustainable sources.
• Expanded the digital infrastructure for
emissions tracking, including AI-driven
sustainability analysis and blockchain-
based verification.
• Upgraded water treatment and
injection systems, improving efficiency
and reducing environmental impact.
What we plan to do
in 2025
• Strengthen sustainability by advancing
AI and blockchain for emissions
monitoring, expanding renewables,
digitalising reporting, enhancing waste
heat recovery, optimising water
treatment, and cutting GHG emissions
per Kazakhstan’s carbon neutrality
goals.
• In 2025, the Сompany will continue
strengthening its safety culture by
running an internal training center for
hazardous work training, developing an
intervention approach for unsafe
conditions and actions, and establishing
a passenger intervention policy.
Total GHG emissions 1
256,089
tons
2023: 180,136 tons
Processed waste by 3rd party
companies
64.6%
Emissions intensity ratios for
total GHG emissions
35,282
tCO2/mmboe
2023: 48,913 tCO2/mmboe
CDP score
B
2023: B-
1. Increase in GHG emissions in 2024 due to Ural O&G processing.
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 69 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
Nostrum acknowledges its environmental responsibility
and is dedicated to advancing a transition toward a more
sustainable energy portfolio. Our approach prioritises
responsible operations, with a structured focus on
minimising environmental impact across our areas of
activity. We comply with the environmental regulations
of RoK, which are aligned with international standards,
and actively implement initiatives to minimise emissions
and waste.
In 2024, there were fines and sanctions
against the Group for non-compliance with
environmental regulations, in the amount
of US$200 thousand. Furthermore, we
recognise the importance of climate
change and are committed to mitigating
our greenhouse gas emissions.
Climate change
GRI 305-7
Nostrum recognises the breadth and
significance of its operational impacts and
is committed to aligning its activities with
sustainable resource management
principles, environmental stewardship,
and climate risk mitigation.
As a producer, our operational activities
contribute to greenhouse gas (GHG)
emissions, and we recognise the
responsibility mitigate our environmental
impact in a sustainable and responsible
manner. Minimising emissions remains a
key strategic priority for the Nostrum.
We understand that hydrocarbon
exploration and production significantly
contribute to GHG emissions, and
therefore, we are committed to addressing
climate change. In 2024, minimising the
environmental impact of our operations
was a core corporate social responsibility
objective, and this remains a strategic
priority for Nostrum moving forward.
Nostrum organises its operations to comply
with the emissions limits outlined in the
Environmental Emissions Permit issued by
Kazakhstan and establishes internal targets
that exceed regulatory requirements to
further enhance environmental
performance.
When applying for an Environmental
Emissions Permit, preliminary standards
for maximum permitted emissions are
determined, based on the analysis of
historical data from preceding 2-3 years.
The Board is responsible for ensuring that
Nostrum complies fully with Listing Rule
14.3.27R and Listing Rule 9.8.6R(8) in this
annual report. Moreover, the Board is also
responsible for the governance, strategies,
risk assessment, management systems and
KPIs relating to climate change and GHG
emissions.
2024 highlights
What we did
in 2024
• Implemented an automated emissions
monitoring system for real-time
environmental surveillance and
regulatory compliance.
• Continued investments in renewable
energy, purchasing 1,865 thousand
kWh from sustainable sources.
• Expanded the digital infrastructure for
emissions tracking, including AI-driven
sustainability analysis and blockchain-
based verification.
• Upgraded water treatment and
injection systems, improving efficiency
and reducing environmental impact.
What we plan to do
in 2025
• Strengthen sustainability by advancing
AI and blockchain for emissions
monitoring, expanding renewables,
digitalising reporting, enhancing waste
heat recovery, optimising water
treatment, and cutting GHG emissions
per Kazakhstan’s carbon neutrality
goals.
• In 2025, the Сompany will continue
strengthening its safety culture by
running an internal training center for
hazardous work training, developing an
intervention approach for unsafe
conditions and actions, and establishing
a passenger intervention policy.
Total GHG emissions 1
256,089
tons
2023: 180,136 tons
Processed waste by 3rd party
companies
64.6%
Emissions intensity ratios for
total GHG emissions
35,282
tCO2/mmboe
2023: 48,913 tCO2/mmboe
CDP score
B
2023: B-
1. Increase in GHG emissions in 2024 due to Ural O&G processing.
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 69 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
ESG REVIEW
GHG emissions
reporting approach
GRI 305-1, 305-2
Nostrum is dedicated to minimising all
GHG emissions and continues to invest in
innovative technologies to enhance its
GHG emissions performance. Nostrum fully
complies with GHG emission regulations in
the UK and Kazakhstan and has been
monitoring and reporting GHG emissions
since 2011.
The objective is to improve surveillance,
increase transparency, foster a data- driven
culture that empowers employees to
identify and act on insights. This approach
aims to achieve optimal energy efficiency
with a minimal carbon footprint through
effective monitoring, process digitalisation,
and continuous optimisation.
The Company’s GHG reporting period is
aligned with the period in respect of which
the Directors’ Report is prepared.
The majority of our emissions originate
from the combustion of fuel gas in gas
turbine units, boilers, process heaters, and
compressors. Additional emissions arise
from flaring in cases where no viable
alternatives are available. In 2024,
greenhouse gas emissions saw an upward
trend primarily due to the processing of
third-party hydrocarbons at our facilities
and drilling operations as well.
According to the new 2022-2025
Kazakhstan National GHG allocation Plan,
206,182 1 tones of CO2e were allocated to
Nostrum. Our actual CO2 emissions in 2024
were 222,038 tones and our actual GHG
emissions in CO2 equivalent were 256,089
tones, which include three other gas types
as provided in Table 5 on page 76.
In 2024, the Company pursued an active
energy policy with the implementation of
multiple initiatives. However, emissions
have been rising since 2023 due to several
significant factors. The increase became
particularly evident following the expansion
of operations and higher fuel consumption
requirements.
Throughout 2024 GTU 1/2 and GTU-3 were
in operation, and the Company continued
processing feedstock from Ural O&G. The
integration of this third-party feedstock
further contributed to the overall increase
in emissions, as additional processing
volumes required greater energy input.
More detailed information on GHG
emissions in 2024 are presented on pages
75-76.
During 2024, the Company completed
launching an automated emissions
monitoring system (EMS) for environmental
surveillance. The comprehensive EMS
equipment is installed at a Gas Turbine
Station 26MW and transmits data online to
the National Database on Environmental
and Natural Resource Conditions. The EMS
operates in real-time, allowing for the
monitoring of nitrogen oxide and nitrogen
dioxide, carbon monoxide, sulfur dioxide,
and methane in exhaust gases, as well as
measuring flow rate, temperature, pressure,
and relative humidity.
Nostrum is committed to meeting the RoK
requirements under the Digital Kazakhstan
Programme , advancing digital technology
adoption and mitigating regulatory risks.
Our digital transformation efforts focus on
integrating its facilities into key digital
systems, including:
• ISUNG (Information System for
Accounting of Oil and Gas Condensate
and Gas);
• CEMS (Continuous Emissions Monitoring
System);
• Automated Reporting System (ARS) for
internal Production, Wells & Facilities
Operations, and GHG Reporting;
• Government Reporting System
maintenance to ensure accuracy and
compliance.
In 2024, ARS expansion improved real-time
data integration, emissions monitoring,
compliance, and efficiency. A major
milestone was integrating Ural O&G
feedstock into processing facilities. Despite
challenges in phasing in GTU-3 plant data,
significant progress was made:
• Real-Time Data Monitoring & Integration:
— integrated CEMS (78 tags), ISUNG (29
tags), GTU-3 (76 tags), and Ural O&G
(276 tags) into ARS, improving
real-time emissions tracking and
automation;
— established direct data pipelines
between SCADA and ARS for
seamless feedstock capture;
— launched a ZKM Data Pipeline test
environment for validation before
full-scale deployment.
• Regulatory Compliance & Emission
Tracking:
— achieved compliance with Ministerial
Ecology Order, integrating metering
devices into the National Emission
Monitoring Database;
— integrated gas turbine exhaust data
into CEMS for enhanced emissions
monitoring;
— upgraded metering systems across
gas treatment, flare, fuel gas, and
reinjection units to meet regulatory
requirements.
• Digital Optimisation:
— ARS infrastructure was optimised,
improving data accuracy and system
efficiency while streamlining
reporting for wells production and
field operations. Optimised existing
ISUN tag architecture for improved
data accuracy, integrity, and
efficiency.
• Infrastructure Optimisation & AI-Driven
Enhancements:
— optimised ISUN tag architecture to
improve data accuracy and system
efficiency;
— implemented phased digitalisation to
manage high data volumes and
evolving regulations;
— automated reconciliation and
reporting for Wells Production, Field
Operations, and GHG tracking.
• Sustainability & ESG Initiatives:
— deployed AI-powered predictive
analytics for well management and
process optimisation;
— initiated satellite-based methane
emissions and biodiversity
monitoring;
— expanded ESG compliance tracking
through AI-driven sustainability
analysis and blockchain-based
verification.
Nostrum will continue to enhance digital
capabilities with AI optimisation,
automated compliance, and blockchain-
based ESG verification for regulatory and
operational excellence.
Air emissions actual/permitted
(tonnes)
2023
2024
2022
Petroleum hydrocarbons (C2-C19)
Methane (CH4)
Sulphur dioxide (SO2)
Dust, suspended solids, particlates matter (PM)
Hydrogen sulphide (H2S)
Permitted
Carbon monoxide (CO)
Nitrogen oxide (Nox)
Acids and other organic chemicals (Organics)
Volatile organic compounds (VOCs)
Metal and inorganic compounds (Metals)
4,136
4,413
4,186
5,995
6,322
6,426
1. In 2022 the National GHG Allocation Plan was approved with a quota set for 2024 at 203,562. In May 2024
amendments were made to the Plan and the quota for 2024 was revised to 206,182.
70 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
GHG emissions
reporting approach
GRI 305-1, 305-2
Nostrum is dedicated to minimising all
GHG emissions and continues to invest in
innovative technologies to enhance its
GHG emissions performance. Nostrum fully
complies with GHG emission regulations in
the UK and Kazakhstan and has been
monitoring and reporting GHG emissions
since 2011.
The objective is to improve surveillance,
increase transparency, foster a data- driven
culture that empowers employees to
identify and act on insights. This approach
aims to achieve optimal energy efficiency
with a minimal carbon footprint through
effective monitoring, process digitalisation,
and continuous optimisation.
The Company’s GHG reporting period is
aligned with the period in respect of which
the Directors’ Report is prepared.
The majority of our emissions originate
from the combustion of fuel gas in gas
turbine units, boilers, process heaters, and
compressors. Additional emissions arise
from flaring in cases where no viable
alternatives are available. In 2024,
greenhouse gas emissions saw an upward
trend primarily due to the processing of
third-party hydrocarbons at our facilities
and drilling operations as well.
According to the new 2022-2025
Kazakhstan National GHG allocation Plan,
206,182 1 tones of CO2e were allocated to
Nostrum. Our actual CO2 emissions in 2024
were 222,038 tones and our actual GHG
emissions in CO2 equivalent were 256,089
tones, which include three other gas types
as provided in Table 5 on page 76.
In 2024, the Company pursued an active
energy policy with the implementation of
multiple initiatives. However, emissions
have been rising since 2023 due to several
significant factors. The increase became
particularly evident following the expansion
of operations and higher fuel consumption
requirements.
Throughout 2024 GTU 1/2 and GTU-3 were
in operation, and the Company continued
processing feedstock from Ural O&G. The
integration of this third-party feedstock
further contributed to the overall increase
in emissions, as additional processing
volumes required greater energy input.
More detailed information on GHG
emissions in 2024 are presented on pages
75-76.
During 2024, the Company completed
launching an automated emissions
monitoring system (EMS) for environmental
surveillance. The comprehensive EMS
equipment is installed at a Gas Turbine
Station 26MW and transmits data online to
the National Database on Environmental
and Natural Resource Conditions. The EMS
operates in real-time, allowing for the
monitoring of nitrogen oxide and nitrogen
dioxide, carbon monoxide, sulfur dioxide,
and methane in exhaust gases, as well as
measuring flow rate, temperature, pressure,
and relative humidity.
Nostrum is committed to meeting the RoK
requirements under the Digital Kazakhstan
Programme , advancing digital technology
adoption and mitigating regulatory risks.
Our digital transformation efforts focus on
integrating its facilities into key digital
systems, including:
• ISUNG (Information System for
Accounting of Oil and Gas Condensate
and Gas);
• CEMS (Continuous Emissions Monitoring
System);
• Automated Reporting System (ARS) for
internal Production, Wells & Facilities
Operations, and GHG Reporting;
• Government Reporting System
maintenance to ensure accuracy and
compliance.
In 2024, ARS expansion improved real-time
data integration, emissions monitoring,
compliance, and efficiency. A major
milestone was integrating Ural O&G
feedstock into processing facilities. Despite
challenges in phasing in GTU-3 plant data,
significant progress was made:
• Real-Time Data Monitoring & Integration:
— integrated CEMS (78 tags), ISUNG (29
tags), GTU-3 (76 tags), and Ural O&G
(276 tags) into ARS, improving
real-time emissions tracking and
automation;
— established direct data pipelines
between SCADA and ARS for
seamless feedstock capture;
— launched a ZKM Data Pipeline test
environment for validation before
full-scale deployment.
• Regulatory Compliance & Emission
Tracking:
— achieved compliance with Ministerial
Ecology Order, integrating metering
devices into the National Emission
Monitoring Database;
— integrated gas turbine exhaust data
into CEMS for enhanced emissions
monitoring;
— upgraded metering systems across
gas treatment, flare, fuel gas, and
reinjection units to meet regulatory
requirements.
• Digital Optimisation:
— ARS infrastructure was optimised,
improving data accuracy and system
efficiency while streamlining
reporting for wells production and
field operations. Optimised existing
ISUN tag architecture for improved
data accuracy, integrity, and
efficiency.
• Infrastructure Optimisation & AI-Driven
Enhancements:
— optimised ISUN tag architecture to
improve data accuracy and system
efficiency;
— implemented phased digitalisation to
manage high data volumes and
evolving regulations;
— automated reconciliation and
reporting for Wells Production, Field
Operations, and GHG tracking.
• Sustainability & ESG Initiatives:
— deployed AI-powered predictive
analytics for well management and
process optimisation;
— initiated satellite-based methane
emissions and biodiversity
monitoring;
— expanded ESG compliance tracking
through AI-driven sustainability
analysis and blockchain-based
verification.
Nostrum will continue to enhance digital
capabilities with AI optimisation,
automated compliance, and blockchain-
based ESG verification for regulatory and
operational excellence.
Air emissions actual/permitted
(tonnes)
2023
2024
2022
Petroleum hydrocarbons (C2-C19)
Methane (CH4)
Sulphur dioxide (SO2)
Dust, suspended solids, particlates matter (PM)
Hydrogen sulphide (H2S)
Permitted
Carbon monoxide (CO)
Nitrogen oxide (Nox)
Acids and other organic chemicals (Organics)
Volatile organic compounds (VOCs)
Metal and inorganic compounds (Metals)
4,136
4,413
4,186
5,995
6,322
6,426
1. In 2022 the National GHG Allocation Plan was approved with a quota set for 2024 at 203,562. In May 2024
amendments were made to the Plan and the quota for 2024 was revised to 206,182.
70 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
•
The Continuous Emission Monitoring
System (CEMS) was successfully
integrated into the ARS through the
corporate network, and the related Site
Integration Test (SIT) was conducted for
the government Automated Emission
• Monitoring System (AEMS) in
November 2024.
In recent years, the Company has
implemented a number of projects which
have had a continuous GHG reduction
effect, such as:
• Well automation flaring prevention on
three wells during processing – 1,983.61
tCO2e /year;
• Electric driven LPS compressor instead of
fuel gas driven – 1,697.76 tCO2 /year;
• Waste Heat Recovery project at GTU-3
with an annual GHG reduction of 2,072
tonnes of CO2;
• Flaring reduction to the minimum due
to proper production optimisation
management, real time production
monitoring and by shutting down the
wells during any intervention with annual
GHG reduction 4,000+ tonnes of CO2.
It should be noted that GTU-3 hot
commissioning/re-start and acceptance
of Ural O&G third party feedstock have
been done seamlessly with almost
absence of hydrocarbons flaring and
additional carbon footprint thanks to
good preparation and execution of
subject processes.
The Company is also appraising and
investing in the following technologies
to assist in the proper identification,
accounting, and mitigation/reduction
of GHG emissions:
• Full asset digitalisation – Integrated
production accounting and GHG
emission quantification tools that give
a holistic view of the entire hydrocarbon
value chain as well as forecasting
capabilities. Support digital
transformation initiative of our assets;
• Perform digitalisation of all our assets and
business processes, data collection and
reporting systems by 2026;
• Perform Digital transformation of our
company, by 2035;
• Several projects that aim reduction
of the fuel gas consumption are being
evaluated targeting substantial reduction
of GHG Emissions and None GHG Air
Emissions: Installation of a Waste Heat
Recovery Boiler for amine regeneration
heat and technology line requirements;
• To reduce our dependence on fossil fuels
by investing in renewable energy, the
company is currently investigating the
different options like application of
thin-film PV (Powerfoil) as solar solution
for storage tanks and roofs.
GHG emissions for Scope 1 and Scope 2
(tCO 2 e)
2024
2023
2022
2021
2020
256,089
180,157
160,630
187,479
187,667
Gas utilisation and flaring
(MCM)
2024 2023 2022 2021 2020
11.7
77.6
15.3
74.0
6.5
63.9
8.3
59.9
8.7
49.1
Gas flaring Gas utilisation Linear (Gas utilisation)
Actual GHG emissions 2024
(tCO 2 e)
May Apr Mar Feb Jan Oct Sep Dec Nov Aug Jul Jun
21,908 22,908 25,046
18,908 19,908 20,908
15,908 16,908 17,908
12,910 13,910 14,908
Total Linear (Total)
Current and future GHG
reduction initiatives
GRI 305-5
Nostrum continues to invest in current and
future technological advancements in
order to effectively detect, monitor and
prevent GHG emissions. The Company has
the following technology in place to
proactively monitor, limit and reduce its
GHG emissions:
• 397 methane detectors to monitor
equipment maintenance and pressure
valve replacement exercises;
• Mobile methane detectors in gas
flowlines;
• Use of cross exchangers in all Gas
Treatment Units to pre-heat cold streams
entering a heated process system by use
of heat from hot streams exiting the
system and requiring cooling;
• Waste heat recovery system at CGTU-3
– exhaust gases from the compressor
units are used for heating the buildings
and preheating the utility fluids in the
plant, resulting in reduced fuel gas
consumption;
• Vapour Recovery Systems (VRS) installed
in oil and condensate tanks to inhibit
hydrocarbon evaporation during storage
and transfer;
• Hydrocarbon Recovery System (HCRS)
installed in LPG loading terminal to
prevent hydrocarbon ‘bleeding’ into the
atmosphere;
• 26 MW power station generates
electricity for use in the field and
therefore limits the use of diesel-powered
heaters;
• Fuel switch at Camp 1 for Boilers.
• Well stock has local skids that will
automatically shut-in the well bore to
prevent full blowdown of the surface lines
and resultant GHG emissions;
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 71 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
System (CEMS) was successfully
integrated into the ARS through the
corporate network, and the related Site
Integration Test (SIT) was conducted for
the government Automated Emission
• Monitoring System (AEMS) in
November 2024.
In recent years, the Company has
implemented a number of projects which
have had a continuous GHG reduction
effect, such as:
• Well automation flaring prevention on
three wells during processing – 1,983.61
tCO2e /year;
• Electric driven LPS compressor instead of
fuel gas driven – 1,697.76 tCO2 /year;
• Waste Heat Recovery project at GTU-3
with an annual GHG reduction of 2,072
tonnes of CO2;
• Flaring reduction to the minimum due
to proper production optimisation
management, real time production
monitoring and by shutting down the
wells during any intervention with annual
GHG reduction 4,000+ tonnes of CO2.
It should be noted that GTU-3 hot
commissioning/re-start and acceptance
of Ural O&G third party feedstock have
been done seamlessly with almost
absence of hydrocarbons flaring and
additional carbon footprint thanks to
good preparation and execution of
subject processes.
The Company is also appraising and
investing in the following technologies
to assist in the proper identification,
accounting, and mitigation/reduction
of GHG emissions:
• Full asset digitalisation – Integrated
production accounting and GHG
emission quantification tools that give
a holistic view of the entire hydrocarbon
value chain as well as forecasting
capabilities. Support digital
transformation initiative of our assets;
• Perform digitalisation of all our assets and
business processes, data collection and
reporting systems by 2026;
• Perform Digital transformation of our
company, by 2035;
• Several projects that aim reduction
of the fuel gas consumption are being
evaluated targeting substantial reduction
of GHG Emissions and None GHG Air
Emissions: Installation of a Waste Heat
Recovery Boiler for amine regeneration
heat and technology line requirements;
• To reduce our dependence on fossil fuels
by investing in renewable energy, the
company is currently investigating the
different options like application of
thin-film PV (Powerfoil) as solar solution
for storage tanks and roofs.
GHG emissions for Scope 1 and Scope 2
(tCO 2 e)
2024
2023
2022
2021
2020
256,089
180,157
160,630
187,479
187,667
Gas utilisation and flaring
(MCM)
2024 2023 2022 2021 2020
11.7
77.6
15.3
74.0
6.5
63.9
8.3
59.9
8.7
49.1
Gas flaring Gas utilisation Linear (Gas utilisation)
Actual GHG emissions 2024
(tCO 2 e)
May Apr Mar Feb Jan Oct Sep Dec Nov Aug Jul Jun
21,908 22,908 25,046
18,908 19,908 20,908
15,908 16,908 17,908
12,910 13,910 14,908
Total Linear (Total)
Current and future GHG
reduction initiatives
GRI 305-5
Nostrum continues to invest in current and
future technological advancements in
order to effectively detect, monitor and
prevent GHG emissions. The Company has
the following technology in place to
proactively monitor, limit and reduce its
GHG emissions:
• 397 methane detectors to monitor
equipment maintenance and pressure
valve replacement exercises;
• Mobile methane detectors in gas
flowlines;
• Use of cross exchangers in all Gas
Treatment Units to pre-heat cold streams
entering a heated process system by use
of heat from hot streams exiting the
system and requiring cooling;
• Waste heat recovery system at CGTU-3
– exhaust gases from the compressor
units are used for heating the buildings
and preheating the utility fluids in the
plant, resulting in reduced fuel gas
consumption;
• Vapour Recovery Systems (VRS) installed
in oil and condensate tanks to inhibit
hydrocarbon evaporation during storage
and transfer;
• Hydrocarbon Recovery System (HCRS)
installed in LPG loading terminal to
prevent hydrocarbon ‘bleeding’ into the
atmosphere;
• 26 MW power station generates
electricity for use in the field and
therefore limits the use of diesel-powered
heaters;
• Fuel switch at Camp 1 for Boilers.
• Well stock has local skids that will
automatically shut-in the well bore to
prevent full blowdown of the surface lines
and resultant GHG emissions;
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 71 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
ESG REVIEW
The technology for GHG detection and
quantification is constantly evolving,
however, the Company continues to
explore key technologies that will assist
with the objective of GHG emissions
reduction.
Nostrum is also considering various
additional GHG reduction initiatives for
2025 and future years.
Environmental disclosures
In 2024, we continued our practice of
disclosing climate- and water-related
information through CDP, the global
independent environmental disclosure
system. Our submission covered a wide
range of topics, including strategy, risks
and opportunities, targets, governance,
initiatives, environmental policies, and
emissions. CDP awarded us a score of B for
both Climate and Water, reflecting an
improvement from B- in 2023 and placing
us at the Management level, which
indicates that we are taking coordinated
action on environmental issues.
Additionally, we voluntarily expanded our
disclosure to include biodiversity and
plastics, demonstrating our broader
commitment to environmental
transparency and stewardship.
Decommissioning
According to the regulations on subsoil
use, it is required that all production
facilities owned by subsoil users and the
associated land be brought to a condition
that ensures the safety of life, public health,
and environmental protection.
Furthermore, the consequences of subsoil
users’ activities must be resolved as
outlined in the legislation of the Republic
of Kazakhstan. The closure of subsoil use
objects follows the guidelines laid out in a
Liquidation Project, which is prepared by a
design organisation holding a valid licence
for environmental protection services. All
necessary decommissioning actions are
detailed in the Liquidation Project created
by NIPI Neftegas.
Waste, water and soil
management
Nostrum’s operations undergo
comprehensive environmental monitoring,
incorporating robust management systems
for waste, water, and soil. The company
regularly analyses air, soil, and groundwater
to ensure compliance with sanitary and
epidemiological standards set by Kazakh
legislation.
To uphold its regulatory obligations,
Nostrum has established monitoring and
reporting systems that facilitate ongoing
environmental assessments of waste, water,
and soil at the Chinarevskoye field.
Waste management
GRI 306-1, 306-2
Waste management encompasses the daily
monitoring of temporary storage sites for
industrial and municipal waste, as well as
the recording, transportation, and transfer
of waste to authorised third-party
contractors.
All generated waste is transferred under
a contract to the following third-party
specialised organisations:
• West Dala LLP
• Green Eco Technology LLP
• TuranPromResurs LLP
• Oral Tazalyk KZ LLP
GRI 306-3
Year 2021 2022 2023 2024
Waste generated, tonnes 2,876 2,865 2,747 7,457
Transferred for processing, tonnes 2,699 2,462 1,262 4,816
Transferred for processing, % 93.80% 85.93% 45.95% 64.6%
In 2024, the volume of waste generated at
the Company’s facilities totaled 7,457
tonnes, consisting of 40 different types of
industrial (used filters, cartridges, medical
wastes, batteries, etc.) and domestic waste
(plastic bottles, used paper), 64.6% of
which was transferred for processing by the
above mentioned companies.
To reduce waste generation, the company
transfers plastic bottles and paper waste
to specialised enterprises for recycling.
As a result of recycling, these wastes are
converted into secondary materials for
use in the national economy. Additionally,
production waste, such as drilling mud
and oil sludge, is processed at a facility,
resulting in technogenic soil, which is used
in road construction and for filling pits
and trenches.
Drilling waste was processed in the Field by
GreenEco Technology LLP. Soil and water
survey results demonstrated compliance
with all applicable environmental
legislation.
Formation water production/water profile (average daily)
(MCM)
0
200
400
600
800
1,000
1,200
1,400
1,600
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012 2023 2024
AvgWatProd m /d AvgWatInj m /d
72 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
The technology for GHG detection and
quantification is constantly evolving,
however, the Company continues to
explore key technologies that will assist
with the objective of GHG emissions
reduction.
Nostrum is also considering various
additional GHG reduction initiatives for
2025 and future years.
Environmental disclosures
In 2024, we continued our practice of
disclosing climate- and water-related
information through CDP, the global
independent environmental disclosure
system. Our submission covered a wide
range of topics, including strategy, risks
and opportunities, targets, governance,
initiatives, environmental policies, and
emissions. CDP awarded us a score of B for
both Climate and Water, reflecting an
improvement from B- in 2023 and placing
us at the Management level, which
indicates that we are taking coordinated
action on environmental issues.
Additionally, we voluntarily expanded our
disclosure to include biodiversity and
plastics, demonstrating our broader
commitment to environmental
transparency and stewardship.
Decommissioning
According to the regulations on subsoil
use, it is required that all production
facilities owned by subsoil users and the
associated land be brought to a condition
that ensures the safety of life, public health,
and environmental protection.
Furthermore, the consequences of subsoil
users’ activities must be resolved as
outlined in the legislation of the Republic
of Kazakhstan. The closure of subsoil use
objects follows the guidelines laid out in a
Liquidation Project, which is prepared by a
design organisation holding a valid licence
for environmental protection services. All
necessary decommissioning actions are
detailed in the Liquidation Project created
by NIPI Neftegas.
Waste, water and soil
management
Nostrum’s operations undergo
comprehensive environmental monitoring,
incorporating robust management systems
for waste, water, and soil. The company
regularly analyses air, soil, and groundwater
to ensure compliance with sanitary and
epidemiological standards set by Kazakh
legislation.
To uphold its regulatory obligations,
Nostrum has established monitoring and
reporting systems that facilitate ongoing
environmental assessments of waste, water,
and soil at the Chinarevskoye field.
Waste management
GRI 306-1, 306-2
Waste management encompasses the daily
monitoring of temporary storage sites for
industrial and municipal waste, as well as
the recording, transportation, and transfer
of waste to authorised third-party
contractors.
All generated waste is transferred under
a contract to the following third-party
specialised organisations:
• West Dala LLP
• Green Eco Technology LLP
• TuranPromResurs LLP
• Oral Tazalyk KZ LLP
GRI 306-3
Year 2021 2022 2023 2024
Waste generated, tonnes 2,876 2,865 2,747 7,457
Transferred for processing, tonnes 2,699 2,462 1,262 4,816
Transferred for processing, % 93.80% 85.93% 45.95% 64.6%
In 2024, the volume of waste generated at
the Company’s facilities totaled 7,457
tonnes, consisting of 40 different types of
industrial (used filters, cartridges, medical
wastes, batteries, etc.) and domestic waste
(plastic bottles, used paper), 64.6% of
which was transferred for processing by the
above mentioned companies.
To reduce waste generation, the company
transfers plastic bottles and paper waste
to specialised enterprises for recycling.
As a result of recycling, these wastes are
converted into secondary materials for
use in the national economy. Additionally,
production waste, such as drilling mud
and oil sludge, is processed at a facility,
resulting in technogenic soil, which is used
in road construction and for filling pits
and trenches.
Drilling waste was processed in the Field by
GreenEco Technology LLP. Soil and water
survey results demonstrated compliance
with all applicable environmental
legislation.
Formation water production/water profile (average daily)
(MCM)
0
200
400
600
800
1,000
1,200
1,400
1,600
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012 2023 2024
AvgWatProd m /d AvgWatInj m /d
72 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Waste not sent for disposal
(recycling, reuse)
GRI 306-4
80% of the generated waste consists
of spent drilling mud (SDM), which is
produced during well drilling and workover
operations. According to the designated
technology, SDM is placed in SDM and
BSV( drilling waste water) pits at the Drilling
Waste Disposal Preparation Facility
(DWDPF) .
In the SDM and BSV (drilling waste water)
pits, gravitational settling occurs: the solid
fraction settles at the bottom, while the
water overflows into the BSV pit. In the BSV
pit, further gravitational settling takes
place, after which the water is sent for
treatment. The treated water is then
injected into a disposal site for formation
water and industrial effluents. The
remaining waste is transferred for disposal.
Water management
GRI 303-1, 303-2
As part of our environmental commitments,
we recognise the critical importance of
water resources, particularly in regions with
limited availability. Ensuring sustainable
access to freshwater is a key priority.
We are committed to efficient water
management, striving to implement the
most effective techniques to optimise
freshwater use and minimise our
operational water footprint. Our approach
focuses on responsible water consumption,
comprehensive impact assessments,
targeted reduction measures, continuous
monitoring, and corrective actions to
protect shared water resources across all
our assets.
Nostrum’s water injection requirements are
up to 1,200 m3 per day (average injection
approximately 700-800 m3 per day), of
which 400-550 m3 per day are injected from
formation water production. The deficit is
compensated through production from
water wells. None of these water wells
competes with fresh water supply to nearby
communities. Five out of seven injectors are
currently in operation with one disposal
well used as a backup. The current system
has sufficient capacity and flexibility to
handle forecast water injection volumes.
The Company has initiated a series of
measures to improve formation water
treatment and injection processes. These
measures include focusing its resources on
process improvement in the treatment of
water used in upstream operations which
will lead to combating corrosion, reducing
oil contamination, reducing growth of
sulfate, reducing bacteria and the
formation of inorganic scale.
A full review was initiated in 2021-2022 on
process effectiveness and chemical
efficiencies and mitigating actions taken
ensure compliance with Kazakhstan’s
environmental regulations and has the
additional benefit of reducing water
treatment costs.
Water Treatment & Injection System
Upgrade Phase II project pilot stage has
been completed in 2024 including
modification and adjustment of the existing
treatment system (Modification inside
existing Oil Treatment Unit – utilisation of
condensate storage tank V-32220 as water
settlement tank) resulting in confirmed
improved injected water quality, less waste
(oil sludge) generation and utilisation and
less volatile HC evaporation. Currently, we
are searching for an alternative (similar
solution without using condensate storage
V-32220) utilising two existing water tanks
and targeting the same results – a pilot
project is ongoing.
Wastewater discharges
Reasonable and careful conservation of the
ecosystem with clean water and access to
water resources is one of the main factors of
sustainable development. The Company’s
main approach to solving the problem of
rational water use is to use water recycling
and reuse systems, increasing the degree
of wastewater treatment and reducing
water abstraction from natural sources.
To prevent the negative impact of
wastewater on the environment, we process
wastewater using special artificial reservoirs
such as evaporation ponds, filtration fields
and a landfill for formation water and
industrial wastewater.
We have the following artificial ponds:
• Evaporation ponds GTP-1,2,3
“conditionally clean” storm wastewater;
• Polygon for formation water and
industrial wastewater disposal;
• Filtration fields, domestic wastewater
after treatment at the liquid mud plant.
Recycled at own production
Year 2022 2023 2024
Facility, tonnes 1,609.2 750 4,941
Waste designated for landfill
GRI 306-5
Year 2022 2023 2024
Disposed of at third-party landfills,tonnes 296.415 313.567 291.28
Water withdrawals – volumes by source
(%)
GRI 303-3
99.96
0.03 0.01
Recycled processed water
Dedicated ground water wells
Rainwater harvesting streams
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 73 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
(recycling, reuse)
GRI 306-4
80% of the generated waste consists
of spent drilling mud (SDM), which is
produced during well drilling and workover
operations. According to the designated
technology, SDM is placed in SDM and
BSV( drilling waste water) pits at the Drilling
Waste Disposal Preparation Facility
(DWDPF) .
In the SDM and BSV (drilling waste water)
pits, gravitational settling occurs: the solid
fraction settles at the bottom, while the
water overflows into the BSV pit. In the BSV
pit, further gravitational settling takes
place, after which the water is sent for
treatment. The treated water is then
injected into a disposal site for formation
water and industrial effluents. The
remaining waste is transferred for disposal.
Water management
GRI 303-1, 303-2
As part of our environmental commitments,
we recognise the critical importance of
water resources, particularly in regions with
limited availability. Ensuring sustainable
access to freshwater is a key priority.
We are committed to efficient water
management, striving to implement the
most effective techniques to optimise
freshwater use and minimise our
operational water footprint. Our approach
focuses on responsible water consumption,
comprehensive impact assessments,
targeted reduction measures, continuous
monitoring, and corrective actions to
protect shared water resources across all
our assets.
Nostrum’s water injection requirements are
up to 1,200 m3 per day (average injection
approximately 700-800 m3 per day), of
which 400-550 m3 per day are injected from
formation water production. The deficit is
compensated through production from
water wells. None of these water wells
competes with fresh water supply to nearby
communities. Five out of seven injectors are
currently in operation with one disposal
well used as a backup. The current system
has sufficient capacity and flexibility to
handle forecast water injection volumes.
The Company has initiated a series of
measures to improve formation water
treatment and injection processes. These
measures include focusing its resources on
process improvement in the treatment of
water used in upstream operations which
will lead to combating corrosion, reducing
oil contamination, reducing growth of
sulfate, reducing bacteria and the
formation of inorganic scale.
A full review was initiated in 2021-2022 on
process effectiveness and chemical
efficiencies and mitigating actions taken
ensure compliance with Kazakhstan’s
environmental regulations and has the
additional benefit of reducing water
treatment costs.
Water Treatment & Injection System
Upgrade Phase II project pilot stage has
been completed in 2024 including
modification and adjustment of the existing
treatment system (Modification inside
existing Oil Treatment Unit – utilisation of
condensate storage tank V-32220 as water
settlement tank) resulting in confirmed
improved injected water quality, less waste
(oil sludge) generation and utilisation and
less volatile HC evaporation. Currently, we
are searching for an alternative (similar
solution without using condensate storage
V-32220) utilising two existing water tanks
and targeting the same results – a pilot
project is ongoing.
Wastewater discharges
Reasonable and careful conservation of the
ecosystem with clean water and access to
water resources is one of the main factors of
sustainable development. The Company’s
main approach to solving the problem of
rational water use is to use water recycling
and reuse systems, increasing the degree
of wastewater treatment and reducing
water abstraction from natural sources.
To prevent the negative impact of
wastewater on the environment, we process
wastewater using special artificial reservoirs
such as evaporation ponds, filtration fields
and a landfill for formation water and
industrial wastewater.
We have the following artificial ponds:
• Evaporation ponds GTP-1,2,3
“conditionally clean” storm wastewater;
• Polygon for formation water and
industrial wastewater disposal;
• Filtration fields, domestic wastewater
after treatment at the liquid mud plant.
Recycled at own production
Year 2022 2023 2024
Facility, tonnes 1,609.2 750 4,941
Waste designated for landfill
GRI 306-5
Year 2022 2023 2024
Disposed of at third-party landfills,tonnes 296.415 313.567 291.28
Water withdrawals – volumes by source
(%)
GRI 303-3
99.96
0.03 0.01
Recycled processed water
Dedicated ground water wells
Rainwater harvesting streams
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 73 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
ESG REVIEW
Disposal of Domestic and Sanitary Wastewater in 2020-2024
GRI 303-4
Disposal indices
2020 2021 2022 2023 2024
Permitted Actual Permitted Actual Permitted Actual Permitted Actual Permitted Actual
Disposed Sanitary
Wastewater, m 3 85,775 25,090 85,775 26,188 85,775 26,191 58,100 26,820 58,100 29,805
Discharges to ponds
evaporators, m 3 GTU-1,2,3 84,810 21,398 84,810 22,338 84,810 44,748 84,810 43,059 84,810 43,389
Drilling wastewater and
associated water, m 3 45,900 1,740 45,900 4,573 35,000 2,757 4,572 2,787 10,487 4,220
For more detailed information, please visit our website at www.nostrumoilandgas.com.
2022 2023 2024
Water Intake 137.3494 129.842 121.344
Water Discharges 361.277 334.603 327.674
Total water consumption 266.86855 246.344 320.314
Energy and resource efficiency policy and methane emissions management policy
The Company strives to use energy in the most efficient, cost effective, and environmentally responsible manner possible. Nostrum
committed to consider energy efficiency as a factor in production operations development, in process and facility design and in the
procurement of goods and services, whether it is further development of existing assets, appraisal of new upstream assets or midstream
tiebacks.
As mentioned in the Climate Change paragraph, the greatest efforts in 2024 were made in the smooth and energy-efficient addition of
Ural O&G third-party sour feedstock to our process facilities. By proper operational preparatory works and the establishment of a set of
basic rules and measures, Nostrum has succeeded in minimising its carbon footprint during the extensive and complex Ural O&G
feedstock pilot delivery process. Regarding the Chinarevskoye asset, considering ongoing challenges related to assets aging and
potential facility integrity deterioration, the Company has paid attention to strengthening its flow assurance process by the development
and implementation of Flow Assurance Process Guideline aiming to ensure the uninterrupted flow of hydrocarbon streams from the
reservoir to the point of sale according to the production plan, including integrity preservation, product specs assurance, HSE regulations,
and all other FA-related processes.
Based on 2024 approved project list and production forecast: 2021 2022 2023 2024 2025 2026
Projected specific GHG emissions (Sc1+Sc2) tCO 2
e per kboe of
production feed-stock 29.5 34.6 47.2 35.2 30.0 30.0
Projected specific Air emissions t per kboe of production feed-stock 0.7 0.9 1.2 0.8 0.7 0.7
Projected specific waste generation t per kboe of production
feed-stock 0.5 0.6 0.7 1.0 0.5 0.5
Renewable energy use
GRI 302-1
In 2024, in accordance with the Rules of Determination of Rate for Support of Renewable Energy Resources (RES), Nostrum purchased
1,865 thousand kWh of electricity from environmentally safe RES for own needs, representing 1.93% of Nostrum’s total electricity
consumption. The RES are provided by “Settlement and Financial Center to Support Renewable Energy Sources” LLP.
Table 1: Volume and % of renewable energy use
Year
Total
energy use,
kWh
Renewable
energy use,
kWh
% of
renewable
energy use
2018 155,938,801 536,242 0.34%
2019 110,007,715 2,122,070 1.93%
2020 97,611,929 2,064,228 2.11%
2021 93,236,708 2,156,969 2.31%
2022 92,702,024 1,580,212 1.70%
2023 88,440,944 1,014,826 1.15%
2024 96,611,638 1,865,888 1.93%
In 2025, we will continue to take action for developing renewable energy sources of energy saving and energy efficiency.
74 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Disposal of Domestic and Sanitary Wastewater in 2020-2024
GRI 303-4
Disposal indices
2020 2021 2022 2023 2024
Permitted Actual Permitted Actual Permitted Actual Permitted Actual Permitted Actual
Disposed Sanitary
Wastewater, m 3 85,775 25,090 85,775 26,188 85,775 26,191 58,100 26,820 58,100 29,805
Discharges to ponds
evaporators, m 3 GTU-1,2,3 84,810 21,398 84,810 22,338 84,810 44,748 84,810 43,059 84,810 43,389
Drilling wastewater and
associated water, m 3 45,900 1,740 45,900 4,573 35,000 2,757 4,572 2,787 10,487 4,220
For more detailed information, please visit our website at www.nostrumoilandgas.com.
2022 2023 2024
Water Intake 137.3494 129.842 121.344
Water Discharges 361.277 334.603 327.674
Total water consumption 266.86855 246.344 320.314
Energy and resource efficiency policy and methane emissions management policy
The Company strives to use energy in the most efficient, cost effective, and environmentally responsible manner possible. Nostrum
committed to consider energy efficiency as a factor in production operations development, in process and facility design and in the
procurement of goods and services, whether it is further development of existing assets, appraisal of new upstream assets or midstream
tiebacks.
As mentioned in the Climate Change paragraph, the greatest efforts in 2024 were made in the smooth and energy-efficient addition of
Ural O&G third-party sour feedstock to our process facilities. By proper operational preparatory works and the establishment of a set of
basic rules and measures, Nostrum has succeeded in minimising its carbon footprint during the extensive and complex Ural O&G
feedstock pilot delivery process. Regarding the Chinarevskoye asset, considering ongoing challenges related to assets aging and
potential facility integrity deterioration, the Company has paid attention to strengthening its flow assurance process by the development
and implementation of Flow Assurance Process Guideline aiming to ensure the uninterrupted flow of hydrocarbon streams from the
reservoir to the point of sale according to the production plan, including integrity preservation, product specs assurance, HSE regulations,
and all other FA-related processes.
Based on 2024 approved project list and production forecast: 2021 2022 2023 2024 2025 2026
Projected specific GHG emissions (Sc1+Sc2) tCO 2
e per kboe of
production feed-stock 29.5 34.6 47.2 35.2 30.0 30.0
Projected specific Air emissions t per kboe of production feed-stock 0.7 0.9 1.2 0.8 0.7 0.7
Projected specific waste generation t per kboe of production
feed-stock 0.5 0.6 0.7 1.0 0.5 0.5
Renewable energy use
GRI 302-1
In 2024, in accordance with the Rules of Determination of Rate for Support of Renewable Energy Resources (RES), Nostrum purchased
1,865 thousand kWh of electricity from environmentally safe RES for own needs, representing 1.93% of Nostrum’s total electricity
consumption. The RES are provided by “Settlement and Financial Center to Support Renewable Energy Sources” LLP.
Table 1: Volume and % of renewable energy use
Year
Total
energy use,
kWh
Renewable
energy use,
kWh
% of
renewable
energy use
2018 155,938,801 536,242 0.34%
2019 110,007,715 2,122,070 1.93%
2020 97,611,929 2,064,228 2.11%
2021 93,236,708 2,156,969 2.31%
2022 92,702,024 1,580,212 1.70%
2023 88,440,944 1,014,826 1.15%
2024 96,611,638 1,865,888 1.93%
In 2025, we will continue to take action for developing renewable energy sources of energy saving and energy efficiency.
74 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
GHG emission results
GRI 305-1, 305-3
Kazakhstan signed the Paris Agreement on August 2, 2016 and ratified it on November 4 of the same year. All Parties to the Paris Agreement
have their own commitments to reduce greenhouse gas emissions. Kazakhstan has set itself an ambitious unconditional goal – by 2030 to
reduce greenhouse gas emissions by 15% from the 1990 level. In February 2023, Kazakhstan adopted a strategy to achieve carbon neutrality
by 2060, which outlines a series of essential measures aimed at reducing emissions and achieving de-carbonisation in the economy.
Starting from 2021, quotas are based entirely on the application of the benchmarking method. Greenhouse gas emission quotas in the
National GHG allocation plan for 2021 were calculated by multiplying the benchmarks by the average value of production for 2017-2019.
In the National GHG allocation plan for 2022-2025 quotas to companies were also calculated entirely by applying the benchmarking
method. Carbon credits in the National GHG allocation for 2022-2025 were calculated by multiplying the benchmarks by the average
value of production for 2017-2019.
The following GHG quotas have been set for Nostrum in a National GHG allocation plan for 2022-2025.
2022 2023 2024 2025
209,803 206,650 206,182 1 201,283 2
Direct GHG emissions (Scope 1) sources are flares, heaters, incinerators, boilers, gas turbine plants, electric power stations and compressors.
Total direct GHG emissions (Scope 1) subdivided by gas types and by sources are summarised below in Tables 2 and 4. No further ecological
data is available for publication. Consequently, additional disclosures in relation to materials used, products and services, waste
management, water consumption, energy consumption and energy efficiency, emergency and intermittent pollution episodes, wastewater
discharges, atmospheric emissions of greenhouse gases and other pollutants, environmental protection and biodiversity are not possible.
The Company carried out works on preparing an analysis and calculations for Scope 3 GHG emissions for three categories “Waste
generated in operations” – 1,313 tons of CO 2 , “Capital goods” – 184 tons of CO 2 and “Goods and Services” – 1,304 tons of CO 2 . (1,430
tons of CO 2 for one category in 2023). In total Scope 3 emissions were in amount of 2,617 tons of CO 2 . This is the Company’s third step
in disclosing Scope 3 emissions. Detailed results of Scope 3 calculations will be covered in CDP submission for 2024.
Table 2: Scope 1 GHG emissions subdivided by gas type (tCO 2 e)
2016 2017 2018 2019 2020 2021 2022 2023 2024
Carbon dioxide 195,453 242,276 244,379 213,520 180,527 180,922 165,995 176,277 222,080
Methane 10,817 10,723 8,436 8,429 6,133 5,614 3,600 3,824 33,964
Nitrous oxide 1,046 1,305 1,304 1,034 917 903 7 11 15
Hydrofluorocarbons 34 28 37 25 28 28 23 23 23
Total 207,350 254,332 254,156 223,008 187,599 187,467 169,625 180,136 256,082
A breakdown of GHG emissions by gas type is shown in Table 2. The GHG emissions predominantly consisted of carbon dioxide and
methane. Scope 1 emissions are generated directly by equipment owned and operated by the Group. The equipment includes boilers,
heaters, diesel stations, gas turbine units and compressors. Scope 1 emissions also include flaring and hydrofluorocarbons emitted by
refrigeration units and climate control systems, such as air conditioners.
Table 3: Scope 3 GHG emissions subdivided by categories (tCO 2 e)
2022 2023 2024
Waste generated in operations 352 289 1,313
Capital goods n/a 150 184
Goods and services n/a 1,430 1,304
Total 352 1,869 2,801
Table 4: Scope 1 GHG emissions subdivided by source types (tCO 2 e)
2016 2017 2018 2019 2020 2021 2022 2023 2024
Stationary combustion 195,576 243,001 245,362 214,536 181,403 181,765 166,284 176,954 237,899
Mobile combustion 758 435 105 89 66 86 112 48 41
Fugitive sources 11,016 10,896 8,536 8,359 6,130 5,616 3,229 3,134 18,141
Total 207,350 254,332 254,003 223,008 187,599 187,467 169,625 180,136 256,082
Stationary combustion sources formed the majority of emitted GHGs.
1. In 2022 the National GHG Allocation Plan was approved with a quota set for 2024 at 203,562. In May 2024 amendments were made to the Plan and the quota for
2024 was revised to 206,182.
2. The GHG quota for 2025 was set in 2022 only based on production from Chinarevskoye field (without Ural O&G processing volumes). In H1 2025, the Company
plans to apply for an additional 2025 quota from the free state reserve, which will cover the forecasted GHG emissions for 2025 (while the Group’s KPI is not to
exceed 290,209 tons of CO2).
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 75 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
GRI 305-1, 305-3
Kazakhstan signed the Paris Agreement on August 2, 2016 and ratified it on November 4 of the same year. All Parties to the Paris Agreement
have their own commitments to reduce greenhouse gas emissions. Kazakhstan has set itself an ambitious unconditional goal – by 2030 to
reduce greenhouse gas emissions by 15% from the 1990 level. In February 2023, Kazakhstan adopted a strategy to achieve carbon neutrality
by 2060, which outlines a series of essential measures aimed at reducing emissions and achieving de-carbonisation in the economy.
Starting from 2021, quotas are based entirely on the application of the benchmarking method. Greenhouse gas emission quotas in the
National GHG allocation plan for 2021 were calculated by multiplying the benchmarks by the average value of production for 2017-2019.
In the National GHG allocation plan for 2022-2025 quotas to companies were also calculated entirely by applying the benchmarking
method. Carbon credits in the National GHG allocation for 2022-2025 were calculated by multiplying the benchmarks by the average
value of production for 2017-2019.
The following GHG quotas have been set for Nostrum in a National GHG allocation plan for 2022-2025.
2022 2023 2024 2025
209,803 206,650 206,182 1 201,283 2
Direct GHG emissions (Scope 1) sources are flares, heaters, incinerators, boilers, gas turbine plants, electric power stations and compressors.
Total direct GHG emissions (Scope 1) subdivided by gas types and by sources are summarised below in Tables 2 and 4. No further ecological
data is available for publication. Consequently, additional disclosures in relation to materials used, products and services, waste
management, water consumption, energy consumption and energy efficiency, emergency and intermittent pollution episodes, wastewater
discharges, atmospheric emissions of greenhouse gases and other pollutants, environmental protection and biodiversity are not possible.
The Company carried out works on preparing an analysis and calculations for Scope 3 GHG emissions for three categories “Waste
generated in operations” – 1,313 tons of CO 2 , “Capital goods” – 184 tons of CO 2 and “Goods and Services” – 1,304 tons of CO 2 . (1,430
tons of CO 2 for one category in 2023). In total Scope 3 emissions were in amount of 2,617 tons of CO 2 . This is the Company’s third step
in disclosing Scope 3 emissions. Detailed results of Scope 3 calculations will be covered in CDP submission for 2024.
Table 2: Scope 1 GHG emissions subdivided by gas type (tCO 2 e)
2016 2017 2018 2019 2020 2021 2022 2023 2024
Carbon dioxide 195,453 242,276 244,379 213,520 180,527 180,922 165,995 176,277 222,080
Methane 10,817 10,723 8,436 8,429 6,133 5,614 3,600 3,824 33,964
Nitrous oxide 1,046 1,305 1,304 1,034 917 903 7 11 15
Hydrofluorocarbons 34 28 37 25 28 28 23 23 23
Total 207,350 254,332 254,156 223,008 187,599 187,467 169,625 180,136 256,082
A breakdown of GHG emissions by gas type is shown in Table 2. The GHG emissions predominantly consisted of carbon dioxide and
methane. Scope 1 emissions are generated directly by equipment owned and operated by the Group. The equipment includes boilers,
heaters, diesel stations, gas turbine units and compressors. Scope 1 emissions also include flaring and hydrofluorocarbons emitted by
refrigeration units and climate control systems, such as air conditioners.
Table 3: Scope 3 GHG emissions subdivided by categories (tCO 2 e)
2022 2023 2024
Waste generated in operations 352 289 1,313
Capital goods n/a 150 184
Goods and services n/a 1,430 1,304
Total 352 1,869 2,801
Table 4: Scope 1 GHG emissions subdivided by source types (tCO 2 e)
2016 2017 2018 2019 2020 2021 2022 2023 2024
Stationary combustion 195,576 243,001 245,362 214,536 181,403 181,765 166,284 176,954 237,899
Mobile combustion 758 435 105 89 66 86 112 48 41
Fugitive sources 11,016 10,896 8,536 8,359 6,130 5,616 3,229 3,134 18,141
Total 207,350 254,332 254,003 223,008 187,599 187,467 169,625 180,136 256,082
Stationary combustion sources formed the majority of emitted GHGs.
1. In 2022 the National GHG Allocation Plan was approved with a quota set for 2024 at 203,562. In May 2024 amendments were made to the Plan and the quota for
2024 was revised to 206,182.
2. The GHG quota for 2025 was set in 2022 only based on production from Chinarevskoye field (without Ural O&G processing volumes). In H1 2025, the Company
plans to apply for an additional 2025 quota from the free state reserve, which will cover the forecasted GHG emissions for 2025 (while the Group’s KPI is not to
exceed 290,209 tons of CO2).
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 75 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
ESG REVIEW
Indirect GHG emissions (Scope 2)
GRI 305-2
Nostrum does not rely on purchased steam, heating or cooling. The only source of purchased energy contributing to indirect GHG
emissions is electricity, which is supplied to Nostrum facilities through the Zelenovskaya distribution network (ZapKazREK JSC) via its
subsidiary, Batys Energoresursy LLC. The regional emission factor (0.27086 tCO₂/MWh) was determined based on the Methodological
Guidelines for Calculating GHG Emissions from Electrical Power Stations and Boilers. Total direct and indirect GHG emissions (Scope 1
and Scope 2) and total GHG emissions are summarised in Table 5.
Table 5: Scope 1, Scope 2 and total GHG emissions (tCO 2 e)
2016 2017 2018 2019 2020 2021 2022 2023 2024
Direct energy (Scope 1) 207,350 254,332 254,156 223,008 187,599 187,467 169,625 180,136 256,082
Indirect energy (Scope 2) 2,263 640 559 297 68 12 5 21 7
Total 209,613 254,972 254,715 223,305 187,667 187,479 169,630 180,157 256,089
Emissions intensity ratio
GRI 305-4
Tonnes of CO 2 per tonne of output is a recommended intensity ratio for the oil and gas sector, as per Appendix F of the UK Government’s
Defra Environmental Reporting Guidelines (2013). Taking into account the variety of products of Nostrum – crude oil, stabilised condensate,
LPG and dry gas – the chosen intensity ratio is expressed in metric tonnes of CO 2 e (mtCO 2 e) per tonne of oil equivalent (mmboe).
Table 6 shows intensity ratios for total (Scope 1 and Scope 2) emissions in the period 2016-2024.
Table 6: Emissions intensity ratios for total GHG emissions
2016 2017 2018 2019 2020 2021 2022 2023 2024
Production, tonnes of oil
equivalent (toe) 2,156,171 2,088,917 1,878,026 1,520,928 1,186,383 907,648 703,430 537,740 1,059,7
tCO 2 /toe 0.097 0.122 0.136 0.1 0.2 0.2 0.2 0.3 0.2
Production, mmboe 14.8 14.3 12.9 10.0 8.1 6.2 4.8 3.6 7.2
tCO 2 /mmboe 14,193 17,820 19,801 21,434 23,094.8 30,157 35,207 48,913 35,282
2019 2020 2021 2022 2023 2024
Gross emissions of air pollutants into atmosphere 0.0037 0.0035 0.0048 0.0060 0.0082 0.0039
Table 7: Global GHG emissions and energy use data
Current reporting year 2024 Comparison reporting year 2023
UK and
offshore 1
Global (excluding UK and
offshore)
UK and
offshore 1 Global (excluding UK and offshore)
Emissions from activities which the
Company owns or controls, including
combustion of fuel & operation of facilities
(Scope 1) tCO 2 e 2
No data
collection
256,082.85 No data
collection
180,136.0
Emissions from purchase of electricity, heat,
steam and cooling purchased for own use
(Scope 2, location-based) tCO 2 e
No data
collection
6.6 No data
collection
20.7
Total gross Scope 1 + Scope 2 emissions
tCO 2 e
No data
collection
256,089.5 No data
collection
180,157.0
Energy consumption used to calculate Scope
1 emissions: kWh
No data
collection
No data collection No data
collection
No data collection
Energy consumption used to calculate Scope
2 emissions: kWh
No data
collection
No data collection No data
collection
No data collection
Total energy consumption used to calculate
Scope 1 and Scope 2 emissions: kWh
No data
collection
377,043,905.4 No data
collection
377,095,765.4
Intensity ratio: tCO 2 e (gross Scope 1 + 2)/
mmboe
No data
collection
35,282.7 No data
collection
47,616.0
Methodology No data
collection
Kazakhstan methodical
guidelines. KwH calculated
based on 1.36E+15 J own
generated energy plus
purchased electricity.
No data
collection
Kazakhstan methodical guidelines.
KwH calculated based on 1.36E+15 J own
generated energy plus purchased electricity.
Principal measures taken for the purpose of
increasing the Company’s energy efficiency.
None None None Nostrum replaced oil heaters with heaters
powered by gas; installed devices at well-sites to
automatically close the wells in the case of
shutdown, preventing blowdown by flaring; and
installed measuring devices in flowlines and
other devices allowing for future optimisation.
Following an energy efficiency audit, Nostrum
replaced 115 fluorescent lamps with LED lamps.
1. In Belgium, the Netherlands and the UK, the Group rents serviced office space but the owner does not collect the data required to be reported.
2. The period for which this information is prepared is identical to the period in respect of which the Directors’ report is prepared.
76 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Indirect GHG emissions (Scope 2)
GRI 305-2
Nostrum does not rely on purchased steam, heating or cooling. The only source of purchased energy contributing to indirect GHG
emissions is electricity, which is supplied to Nostrum facilities through the Zelenovskaya distribution network (ZapKazREK JSC) via its
subsidiary, Batys Energoresursy LLC. The regional emission factor (0.27086 tCO₂/MWh) was determined based on the Methodological
Guidelines for Calculating GHG Emissions from Electrical Power Stations and Boilers. Total direct and indirect GHG emissions (Scope 1
and Scope 2) and total GHG emissions are summarised in Table 5.
Table 5: Scope 1, Scope 2 and total GHG emissions (tCO 2 e)
2016 2017 2018 2019 2020 2021 2022 2023 2024
Direct energy (Scope 1) 207,350 254,332 254,156 223,008 187,599 187,467 169,625 180,136 256,082
Indirect energy (Scope 2) 2,263 640 559 297 68 12 5 21 7
Total 209,613 254,972 254,715 223,305 187,667 187,479 169,630 180,157 256,089
Emissions intensity ratio
GRI 305-4
Tonnes of CO 2 per tonne of output is a recommended intensity ratio for the oil and gas sector, as per Appendix F of the UK Government’s
Defra Environmental Reporting Guidelines (2013). Taking into account the variety of products of Nostrum – crude oil, stabilised condensate,
LPG and dry gas – the chosen intensity ratio is expressed in metric tonnes of CO 2 e (mtCO 2 e) per tonne of oil equivalent (mmboe).
Table 6 shows intensity ratios for total (Scope 1 and Scope 2) emissions in the period 2016-2024.
Table 6: Emissions intensity ratios for total GHG emissions
2016 2017 2018 2019 2020 2021 2022 2023 2024
Production, tonnes of oil
equivalent (toe) 2,156,171 2,088,917 1,878,026 1,520,928 1,186,383 907,648 703,430 537,740 1,059,7
tCO 2 /toe 0.097 0.122 0.136 0.1 0.2 0.2 0.2 0.3 0.2
Production, mmboe 14.8 14.3 12.9 10.0 8.1 6.2 4.8 3.6 7.2
tCO 2 /mmboe 14,193 17,820 19,801 21,434 23,094.8 30,157 35,207 48,913 35,282
2019 2020 2021 2022 2023 2024
Gross emissions of air pollutants into atmosphere 0.0037 0.0035 0.0048 0.0060 0.0082 0.0039
Table 7: Global GHG emissions and energy use data
Current reporting year 2024 Comparison reporting year 2023
UK and
offshore 1
Global (excluding UK and
offshore)
UK and
offshore 1 Global (excluding UK and offshore)
Emissions from activities which the
Company owns or controls, including
combustion of fuel & operation of facilities
(Scope 1) tCO 2 e 2
No data
collection
256,082.85 No data
collection
180,136.0
Emissions from purchase of electricity, heat,
steam and cooling purchased for own use
(Scope 2, location-based) tCO 2 e
No data
collection
6.6 No data
collection
20.7
Total gross Scope 1 + Scope 2 emissions
tCO 2 e
No data
collection
256,089.5 No data
collection
180,157.0
Energy consumption used to calculate Scope
1 emissions: kWh
No data
collection
No data collection No data
collection
No data collection
Energy consumption used to calculate Scope
2 emissions: kWh
No data
collection
No data collection No data
collection
No data collection
Total energy consumption used to calculate
Scope 1 and Scope 2 emissions: kWh
No data
collection
377,043,905.4 No data
collection
377,095,765.4
Intensity ratio: tCO 2 e (gross Scope 1 + 2)/
mmboe
No data
collection
35,282.7 No data
collection
47,616.0
Methodology No data
collection
Kazakhstan methodical
guidelines. KwH calculated
based on 1.36E+15 J own
generated energy plus
purchased electricity.
No data
collection
Kazakhstan methodical guidelines.
KwH calculated based on 1.36E+15 J own
generated energy plus purchased electricity.
Principal measures taken for the purpose of
increasing the Company’s energy efficiency.
None None None Nostrum replaced oil heaters with heaters
powered by gas; installed devices at well-sites to
automatically close the wells in the case of
shutdown, preventing blowdown by flaring; and
installed measuring devices in flowlines and
other devices allowing for future optimisation.
Following an energy efficiency audit, Nostrum
replaced 115 fluorescent lamps with LED lamps.
1. In Belgium, the Netherlands and the UK, the Group rents serviced office space but the owner does not collect the data required to be reported.
2. The period for which this information is prepared is identical to the period in respect of which the Directors’ report is prepared.
76 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
In-process control,
monitoring and health
protection
The primary focus of the Company is to
adhere to all legal regulations in the
Republic of Kazakhstan concerning
environmental protection, labour
conditions at production facilities, and
health protection. In this respect, Nostrum
conducts ongoing monitoring and control
across various areas.
Industrial environmental
monitoring (IEM)
and control
IEM has been performed under the
Industrial Environmental Monitoring
Programme developed based on
requirements of RoK Environmental Code
and other environmental regulatory &
procedural documents and instructions.
The programme provides for
environmental emissions monitoring and
environmental medium impact monitoring
of Nostrum operations.
Ambient air sampling
Industrial emissions
measurements
Ambient air quality study was made in
Beles, Sulukol, Chinarevo villages at
Chinarevskoye Field sanitary protection
zone (hereinafter “CF”), Camp-3, transfer
point at Terminal and sanitary protection
zone of Oil Loading Terminal.
Water samples were taken from
Yembulatovka River, evaporation ponds at
GTU-1/2 and GTU-3 and from sewage
treatment plant of Camp-3. Soil samples
were taken once a year at sanitary
protection zone: CF, Oil Terminal,
transfer point, Camp-3.
In-process control in
canteens
Quarterly inspections are carried out in
Nostrum canteens, during which samples
of prepared meals, salads, wash water, and
water are collected for bacteriological
and chemical analysis. Additionally,
assessments of lighting, workplace
microclimate, noise levels, and ventilation
system operations are conducted. Any
instances of non-compliance are addressed
through corrective actions, such as
replacing lighting equipment, repairing
air conditioners, and installing a
new bactericidal lamp in the water
treatment system.
In-process control of
labour conditions at
production facilities
To detect any workplace discrepancies,
evaluations were carried out to assess air
quality, lighting, microclimate conditions,
noise levels, vibrations, electromagnetic
fields, and power stations. These essential
measurements and inspections at Nostrum
facilities were performed by specialised
contractor companies holding the
necessary permits and accreditation
certificates. The findings from the in-
process monitoring are submitted to
the relevant regulatory bodies, and an
industrial environmental control report
is uploaded to the electronic
environmental portal.
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 77 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
monitoring and health
protection
The primary focus of the Company is to
adhere to all legal regulations in the
Republic of Kazakhstan concerning
environmental protection, labour
conditions at production facilities, and
health protection. In this respect, Nostrum
conducts ongoing monitoring and control
across various areas.
Industrial environmental
monitoring (IEM)
and control
IEM has been performed under the
Industrial Environmental Monitoring
Programme developed based on
requirements of RoK Environmental Code
and other environmental regulatory &
procedural documents and instructions.
The programme provides for
environmental emissions monitoring and
environmental medium impact monitoring
of Nostrum operations.
Ambient air sampling
Industrial emissions
measurements
Ambient air quality study was made in
Beles, Sulukol, Chinarevo villages at
Chinarevskoye Field sanitary protection
zone (hereinafter “CF”), Camp-3, transfer
point at Terminal and sanitary protection
zone of Oil Loading Terminal.
Water samples were taken from
Yembulatovka River, evaporation ponds at
GTU-1/2 and GTU-3 and from sewage
treatment plant of Camp-3. Soil samples
were taken once a year at sanitary
protection zone: CF, Oil Terminal,
transfer point, Camp-3.
In-process control in
canteens
Quarterly inspections are carried out in
Nostrum canteens, during which samples
of prepared meals, salads, wash water, and
water are collected for bacteriological
and chemical analysis. Additionally,
assessments of lighting, workplace
microclimate, noise levels, and ventilation
system operations are conducted. Any
instances of non-compliance are addressed
through corrective actions, such as
replacing lighting equipment, repairing
air conditioners, and installing a
new bactericidal lamp in the water
treatment system.
In-process control of
labour conditions at
production facilities
To detect any workplace discrepancies,
evaluations were carried out to assess air
quality, lighting, microclimate conditions,
noise levels, vibrations, electromagnetic
fields, and power stations. These essential
measurements and inspections at Nostrum
facilities were performed by specialised
contractor companies holding the
necessary permits and accreditation
certificates. The findings from the in-
process monitoring are submitted to
the relevant regulatory bodies, and an
industrial environmental control report
is uploaded to the electronic
environmental portal.
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 77 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
ESG REVIEW
Non-financial and Sustainability
information statement
This section of the strategic report constitutes the Company’s Non-financial and Sustainability Information Statement, produced to
comply with sections 414CA and 414CB of the Companies Act. The information is incorporated by cross reference.
Reporting requirements Policies and standards which govern our approach
Information necessary to understand our business and
its impact, policy due diligence and outcomes
Environmental matters Annual environmental objectives Environmental stewardship, pages 69-77
Liquidation fund contribution in accordance with
the PSA
Communities and social review, pages 67-68
Employees Group Code of Conduct and Human Rights Empowering our people, pages 62-66
Whistleblowing policy Safe operations, pages 56-61
Health and Safety policy Total Recordable Injury Frequency, page 57
Respect for human rights Modern Slavery Statement Empowering our people, pages 62-66
Equality and Diversity Policy
Social matters Sponsorship of community events Communities and social review, pages 67-68
Anti-corruption and anti-bribery Anti-corruption and bribery policy Communities and social review, pages 67-68
Anti-facilitation of tax evasion policy Our Governance Framework, pages 96-98
Payments to governments
Description of principal risks Principal risks and uncertainties, pages 36-42
Description of the business model Business model, pages 6-7
Non-financial key performance
indicators
Key performance indicators, pages 22-23
Our strategic priorities, pages 12-13
TCFD Recommendation TCFD Recommended Disclosure Where reported
Governance
Disclose the organisation’s governance
around climate related risks and
opportunities.
a) Describe the board’s oversight of climate-related risks and opportunities. Pages 79-80
b) Describe management’s role in assessing and managing climate-related
risks and opportunities.
Pages 79-80
Strategy
Disclose the actual and potential
impacts of climate-related risks and
opportunities on the organisation’s
business, strategy, and financial
planning where such information
is material.
a) Describe the climate-related risks and opportunities the organisation has
identified over the short, medium, and long term.
Pages 81-82
b) Describe the impact of climate-related risks and opportunities on the
organisation’s business, strategy, and financial planning.
Page 82
c) Describe the resilience of the organisation’s strategy, taking into
consideration different climate-related scenarios, including a 2°C or lower
scenario.
Pages 83-84
Risk management
Disclose how the organisation
identifies, assesses, and manages
climate-related risks.
a) Describe the organisation’s processes for identifying and assessing
climate-related risks.
Pages 84-85
b) Describe the organisation’s processes for managing climate-related risks. Pages 84-85
c) Describe how processes for identifying, assessing, and managing climate-
related risks are integrated into the organisation’s overall risk management.
Pages 84-85
Metrics and targets
Disclose the metrics and targets used to
assess and manage relevant climate-
related risks and opportunities where
such information is material.
a) Disclose the metrics used by the organisation to assess climate-related risks
and opportunities in line with risk management process.
Page 85
b) Disclose Scope 1, Scope 2 and if appropriate, Scope 3 GHG emissions, and
the related risks.
Page 85
c) Describe the targets used by the organisation to manage climate-related
risks and opportunities and performance against targets.
Page 86
d) Describe the KPIs used to assess progress against targets used to manage
climate-related risks and realise climate-related opportunities and the
calculations on which those KPIs are based.
Page 86
78 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Non-financial and Sustainability
information statement
This section of the strategic report constitutes the Company’s Non-financial and Sustainability Information Statement, produced to
comply with sections 414CA and 414CB of the Companies Act. The information is incorporated by cross reference.
Reporting requirements Policies and standards which govern our approach
Information necessary to understand our business and
its impact, policy due diligence and outcomes
Environmental matters Annual environmental objectives Environmental stewardship, pages 69-77
Liquidation fund contribution in accordance with
the PSA
Communities and social review, pages 67-68
Employees Group Code of Conduct and Human Rights Empowering our people, pages 62-66
Whistleblowing policy Safe operations, pages 56-61
Health and Safety policy Total Recordable Injury Frequency, page 57
Respect for human rights Modern Slavery Statement Empowering our people, pages 62-66
Equality and Diversity Policy
Social matters Sponsorship of community events Communities and social review, pages 67-68
Anti-corruption and anti-bribery Anti-corruption and bribery policy Communities and social review, pages 67-68
Anti-facilitation of tax evasion policy Our Governance Framework, pages 96-98
Payments to governments
Description of principal risks Principal risks and uncertainties, pages 36-42
Description of the business model Business model, pages 6-7
Non-financial key performance
indicators
Key performance indicators, pages 22-23
Our strategic priorities, pages 12-13
TCFD Recommendation TCFD Recommended Disclosure Where reported
Governance
Disclose the organisation’s governance
around climate related risks and
opportunities.
a) Describe the board’s oversight of climate-related risks and opportunities. Pages 79-80
b) Describe management’s role in assessing and managing climate-related
risks and opportunities.
Pages 79-80
Strategy
Disclose the actual and potential
impacts of climate-related risks and
opportunities on the organisation’s
business, strategy, and financial
planning where such information
is material.
a) Describe the climate-related risks and opportunities the organisation has
identified over the short, medium, and long term.
Pages 81-82
b) Describe the impact of climate-related risks and opportunities on the
organisation’s business, strategy, and financial planning.
Page 82
c) Describe the resilience of the organisation’s strategy, taking into
consideration different climate-related scenarios, including a 2°C or lower
scenario.
Pages 83-84
Risk management
Disclose how the organisation
identifies, assesses, and manages
climate-related risks.
a) Describe the organisation’s processes for identifying and assessing
climate-related risks.
Pages 84-85
b) Describe the organisation’s processes for managing climate-related risks. Pages 84-85
c) Describe how processes for identifying, assessing, and managing climate-
related risks are integrated into the organisation’s overall risk management.
Pages 84-85
Metrics and targets
Disclose the metrics and targets used to
assess and manage relevant climate-
related risks and opportunities where
such information is material.
a) Disclose the metrics used by the organisation to assess climate-related risks
and opportunities in line with risk management process.
Page 85
b) Disclose Scope 1, Scope 2 and if appropriate, Scope 3 GHG emissions, and
the related risks.
Page 85
c) Describe the targets used by the organisation to manage climate-related
risks and opportunities and performance against targets.
Page 86
d) Describe the KPIs used to assess progress against targets used to manage
climate-related risks and realise climate-related opportunities and the
calculations on which those KPIs are based.
Page 86
78 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
CLIMATE-RELATED FINANCIAL DISCLOSURES
Climate-related Financial Disclosures
GRI 2-13,
2-14,
201-2
a) Describe the board’s oversight of
climate-related risks and opportunities.
b) Describe management’s role in
assessing and managing climate-
related risks and opportunities.
Board of Directors
The Board of Directors retains ultimate
responsibility for overseeing climate-
related risks and opportunities within its
governance framework, ensuring their
integration into strategic and operational
decision-making to align with the
Company’s long-term objectives. Through
internal control and risk management,
including regular reports, periodic reviews,
and an annual assessment, the Board
systematically identifies, manages, and
discloses climate-related risks, embedding
climate considerations into strategy, risk
management, and stakeholder engagement
to reinforce its commitment to long-term
resilience and sustainable value creation.
Key elements of the Board’s oversight include:
Strategic alignment
The Board approves the Group’s strategic
aims, objectives, and commercial strategy,
budgets, and business plans which
incorporate climate-related considerations
such as transitioning to cleaner energy
business practices.
Policy approval
The Board retains responsibility for
approving policies that underpin the
Company’s commitment to sustainability,
environmental stewardship, and broader
ESG (Environmental, Social, and
Governance) principles.
Risk management
The Board oversees the internal control and
risk management framework, which
includes identifying, assessing, and
mitigating climate-related risks. Further
details on the identified risks and related
responses are disclosed within “Principal
risks and uncertainties” section on pages
36-42.
Reporting and accountability
The Board approves the annual report and
accounts, which include disclosures on
climate-related risks, opportunities, and
performance metrics aligned with TCFD
recommendations.
Progress against climate goals (e.g.,
emissions reductions, sustainability targets)
is monitored through Board reviews of
operational performance. See pages 22-23
for Company KPIs and pages 111 and 117,
where CEO KPIs include GHG emissions-
related targets.
Stakeholder engagement
The Board ensures a satisfactory dialogue
with all the stakeholders, including
transparency in communications about the
Company’s sustainability commitments.
Audit Committee
The Audit Committee ensures
comprehensive oversight of Environmental,
Social, and Governance (ESG) risks, with a
particular focus on climate-related financial
disclosures, regulatory compliance, and risk
management. Its key responsibilities in this
area include:
Financial reporting
The Committee reviews the Company’s
climate-related disclosures in the annual
report, ensuring alignment with the Task
Force on Climate-related Financial
Disclosures (TCFD) recommendations and
monitoring emerging climate-related risks.
Additionally, the Committee tracks
performance against defined ESG KPIs,
ensuring transparency and accuracy in
climate-related financial reporting, and
seek independent assurance on behalf of
the Board where appropriate.
Internal controls and risk
management systems
The Committee oversees management’s
process for identifying and managing ESG
and climate-related risks, ensuring that
internal controls effectively support the
accuracy, completeness, and integrity of
ESG-related information.
Compliance
The Committee monitors compliance with
ESG and climate-related legal and
regulatory requirements, ensuring
alignment with FCA Listing Rules, UK
Corporate Governance Code.
Read more on pages 99-105
Governance
TCFD recommendation:
Disclose the
organisation’s
governance around
climate related risks
and opportunities.
Read more about our strategy
on pages 12-13
We have continued
improving our disclosures
and reporting to maintain
adherence to TCFD
recommendations,
reflecting Nostrum’s
operations and strategies.
TCFD Statement
Climate change presents significant challenges and opportunities that impact our business
operations, financial performance, and long-term strategy. We make climate-related financial
disclosures in line with the FCA Listing Rule 14.3.27R and LR 9.8.6(8) ensuring consistency
with the TCFD Recommendations and Recommended Disclosures as well as and UK
Climate-Related Financial Disclosures (CFD) for the financial year ending 31 December 2024.
This report is structured around the four core elements of the TCFD framework: Governance,
Strategy, Risk Management, and Metrics and Targets. These core elements are
complemented by the 11 supporting recommended disclosures, which provide detailed
guidance on how to comprehensively disclose climate-related risks and opportunities.
We acknowledge that the landscape of climate-related risks and opportunities is continually
evolving. As such, we are dedicated to regularly updating our assessments and strategies to
ensure resilience and adaptability in a changing environment. This initiative aims to enhance
our transparency and provide stakeholders with clear insights into how we manage climate-
related risks and opportunities, while continuing to respond to their guidance.
When making assessments and preparing disclosures we have considered whether
particular issues and related information may influence the economic decisions of the
stakeholders. Such approach is in line with guidance and recommendations provided by
TCFD in relation to materiality of information. Furthermore, the risk assessment process
and its potential financial impact involved use judgements and estimates, which are
consistent with the TCFD Recommendations and Recommended Disclosures. This report
reflects our current understanding and ongoing efforts to integrate climate considerations
into our corporate decision-making processes.
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 79 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
Climate-related Financial Disclosures
GRI 2-13,
2-14,
201-2
a) Describe the board’s oversight of
climate-related risks and opportunities.
b) Describe management’s role in
assessing and managing climate-
related risks and opportunities.
Board of Directors
The Board of Directors retains ultimate
responsibility for overseeing climate-
related risks and opportunities within its
governance framework, ensuring their
integration into strategic and operational
decision-making to align with the
Company’s long-term objectives. Through
internal control and risk management,
including regular reports, periodic reviews,
and an annual assessment, the Board
systematically identifies, manages, and
discloses climate-related risks, embedding
climate considerations into strategy, risk
management, and stakeholder engagement
to reinforce its commitment to long-term
resilience and sustainable value creation.
Key elements of the Board’s oversight include:
Strategic alignment
The Board approves the Group’s strategic
aims, objectives, and commercial strategy,
budgets, and business plans which
incorporate climate-related considerations
such as transitioning to cleaner energy
business practices.
Policy approval
The Board retains responsibility for
approving policies that underpin the
Company’s commitment to sustainability,
environmental stewardship, and broader
ESG (Environmental, Social, and
Governance) principles.
Risk management
The Board oversees the internal control and
risk management framework, which
includes identifying, assessing, and
mitigating climate-related risks. Further
details on the identified risks and related
responses are disclosed within “Principal
risks and uncertainties” section on pages
36-42.
Reporting and accountability
The Board approves the annual report and
accounts, which include disclosures on
climate-related risks, opportunities, and
performance metrics aligned with TCFD
recommendations.
Progress against climate goals (e.g.,
emissions reductions, sustainability targets)
is monitored through Board reviews of
operational performance. See pages 22-23
for Company KPIs and pages 111 and 117,
where CEO KPIs include GHG emissions-
related targets.
Stakeholder engagement
The Board ensures a satisfactory dialogue
with all the stakeholders, including
transparency in communications about the
Company’s sustainability commitments.
Audit Committee
The Audit Committee ensures
comprehensive oversight of Environmental,
Social, and Governance (ESG) risks, with a
particular focus on climate-related financial
disclosures, regulatory compliance, and risk
management. Its key responsibilities in this
area include:
Financial reporting
The Committee reviews the Company’s
climate-related disclosures in the annual
report, ensuring alignment with the Task
Force on Climate-related Financial
Disclosures (TCFD) recommendations and
monitoring emerging climate-related risks.
Additionally, the Committee tracks
performance against defined ESG KPIs,
ensuring transparency and accuracy in
climate-related financial reporting, and
seek independent assurance on behalf of
the Board where appropriate.
Internal controls and risk
management systems
The Committee oversees management’s
process for identifying and managing ESG
and climate-related risks, ensuring that
internal controls effectively support the
accuracy, completeness, and integrity of
ESG-related information.
Compliance
The Committee monitors compliance with
ESG and climate-related legal and
regulatory requirements, ensuring
alignment with FCA Listing Rules, UK
Corporate Governance Code.
Read more on pages 99-105
Governance
TCFD recommendation:
Disclose the
organisation’s
governance around
climate related risks
and opportunities.
Read more about our strategy
on pages 12-13
We have continued
improving our disclosures
and reporting to maintain
adherence to TCFD
recommendations,
reflecting Nostrum’s
operations and strategies.
TCFD Statement
Climate change presents significant challenges and opportunities that impact our business
operations, financial performance, and long-term strategy. We make climate-related financial
disclosures in line with the FCA Listing Rule 14.3.27R and LR 9.8.6(8) ensuring consistency
with the TCFD Recommendations and Recommended Disclosures as well as and UK
Climate-Related Financial Disclosures (CFD) for the financial year ending 31 December 2024.
This report is structured around the four core elements of the TCFD framework: Governance,
Strategy, Risk Management, and Metrics and Targets. These core elements are
complemented by the 11 supporting recommended disclosures, which provide detailed
guidance on how to comprehensively disclose climate-related risks and opportunities.
We acknowledge that the landscape of climate-related risks and opportunities is continually
evolving. As such, we are dedicated to regularly updating our assessments and strategies to
ensure resilience and adaptability in a changing environment. This initiative aims to enhance
our transparency and provide stakeholders with clear insights into how we manage climate-
related risks and opportunities, while continuing to respond to their guidance.
When making assessments and preparing disclosures we have considered whether
particular issues and related information may influence the economic decisions of the
stakeholders. Such approach is in line with guidance and recommendations provided by
TCFD in relation to materiality of information. Furthermore, the risk assessment process
and its potential financial impact involved use judgements and estimates, which are
consistent with the TCFD Recommendations and Recommended Disclosures. This report
reflects our current understanding and ongoing efforts to integrate climate considerations
into our corporate decision-making processes.
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 79 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
Strategy Committee
The Strategy Committee is responsible for
advising the Board on short-term, medium-
term and long-term strategic decisions of
the Company (horizons defined on page
82), including following activities relevant
for addressing climate-related risk and
other ESG matters:
• Supporting the Board and Senior
Management in formulating the overall
strategy for the Company, with particular
emphasis on horizon scanning, priorities,
activities and outcomes.
• Considering reports on overall
performance in respect of the
achievement of the objectives and
outcomes contained within the
Corporate Strategy.
• Reviewing determined KPIs to assess
performance with respect to the Group’s
strategy.
Read more on page 93
Remuneration Committee
Annual KPIs relating to climate change
and emissions targets are approved by
reviewed by the Remuneration Committee
and upon its recommendation approved
by the Board. The progress against those
KPIs monitored and reported to the
Remuneration Committee and the Board.
See pages 109-111 for more details.
Read more on pages 107-124
ESG and HSE Committees
The ESG Committee and HSE Committee,
comprised of Senior Management Team
members across all company functions,
play a central role in overseeing
sustainability impacts, risks, and
opportunities, with a particular focus
on climate-related risks and strategic
initiatives. These committees provide
specialised guidance on Environmental,
Social, and Governance (ESG) and Health,
Safety, and Environmental (HSE) matters,
ensuring effective supervision and
execution of sustainability and climate-
related initiatives across the organisation.
These committees are responsible for
developing, implementing, and
continuously improving the Company’s
ESG, HSE, and climate-related strategies,
ensuring that strategic objectives and
operational plans align with corporate
sustainability goals.
The ESG Committee, led by the Head of
ESG, and the HSE Committee, led by the
Group Head of HSE, operate under the
direct oversight of the CEO.
They convene before each Board meeting
to provide updates on ESG, HSE, and
climate-related matters.
As the key liaison between the executive
team and the Board, the CEO is
accountable for the effective execution of
ESG, HSE, and climate-related strategies.
This includes ensuring that the Board and
its committees receive timely updates on
progress, achievements, and key initiatives.
The CEO also facilitates feedback loops
between the Board and these committees,
ensuring that annual operational objectives
and strategies align with ESG, climate, and
HSE priorities.
The Head of ESG and Group Head of HSE,
alongside business function leaders, assess
and update climate-related and broader
sustainability risks and opportunities,
integrating them into the Company’s
strategic planning and decision-making
processes. They oversee the development
and implementation of ESG, HSE, and
climate strategies, propose new initiatives,
and collaborate with business units to
drive execution.
Additionally, these leaders monitor ESG,
HSE, and climate-related performance,
ensuring compliance with regulatory
requirements, global reporting
frameworks, and stakeholder expectations.
They also lead engagement efforts with
internal and external stakeholders,
reinforcing transparency and accountability.
Strategy Committee Remuneration Committee Audit
Committee
Nomination &
Governance Committee
ESG Committee
Health, Safety,
Environment Committee
Chief Executive Officer
Senior Management
Functional leaders
& staff
Management of climate-related matters – organisational structure
Board of Directors of Nostrum Oil & Gas
CLIMATE-RELATED FINANCIAL DISCLOSURES
Governance continued
80 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
The Strategy Committee is responsible for
advising the Board on short-term, medium-
term and long-term strategic decisions of
the Company (horizons defined on page
82), including following activities relevant
for addressing climate-related risk and
other ESG matters:
• Supporting the Board and Senior
Management in formulating the overall
strategy for the Company, with particular
emphasis on horizon scanning, priorities,
activities and outcomes.
• Considering reports on overall
performance in respect of the
achievement of the objectives and
outcomes contained within the
Corporate Strategy.
• Reviewing determined KPIs to assess
performance with respect to the Group’s
strategy.
Read more on page 93
Remuneration Committee
Annual KPIs relating to climate change
and emissions targets are approved by
reviewed by the Remuneration Committee
and upon its recommendation approved
by the Board. The progress against those
KPIs monitored and reported to the
Remuneration Committee and the Board.
See pages 109-111 for more details.
Read more on pages 107-124
ESG and HSE Committees
The ESG Committee and HSE Committee,
comprised of Senior Management Team
members across all company functions,
play a central role in overseeing
sustainability impacts, risks, and
opportunities, with a particular focus
on climate-related risks and strategic
initiatives. These committees provide
specialised guidance on Environmental,
Social, and Governance (ESG) and Health,
Safety, and Environmental (HSE) matters,
ensuring effective supervision and
execution of sustainability and climate-
related initiatives across the organisation.
These committees are responsible for
developing, implementing, and
continuously improving the Company’s
ESG, HSE, and climate-related strategies,
ensuring that strategic objectives and
operational plans align with corporate
sustainability goals.
The ESG Committee, led by the Head of
ESG, and the HSE Committee, led by the
Group Head of HSE, operate under the
direct oversight of the CEO.
They convene before each Board meeting
to provide updates on ESG, HSE, and
climate-related matters.
As the key liaison between the executive
team and the Board, the CEO is
accountable for the effective execution of
ESG, HSE, and climate-related strategies.
This includes ensuring that the Board and
its committees receive timely updates on
progress, achievements, and key initiatives.
The CEO also facilitates feedback loops
between the Board and these committees,
ensuring that annual operational objectives
and strategies align with ESG, climate, and
HSE priorities.
The Head of ESG and Group Head of HSE,
alongside business function leaders, assess
and update climate-related and broader
sustainability risks and opportunities,
integrating them into the Company’s
strategic planning and decision-making
processes. They oversee the development
and implementation of ESG, HSE, and
climate strategies, propose new initiatives,
and collaborate with business units to
drive execution.
Additionally, these leaders monitor ESG,
HSE, and climate-related performance,
ensuring compliance with regulatory
requirements, global reporting
frameworks, and stakeholder expectations.
They also lead engagement efforts with
internal and external stakeholders,
reinforcing transparency and accountability.
Strategy Committee Remuneration Committee Audit
Committee
Nomination &
Governance Committee
ESG Committee
Health, Safety,
Environment Committee
Chief Executive Officer
Senior Management
Functional leaders
& staff
Management of climate-related matters – organisational structure
Board of Directors of Nostrum Oil & Gas
CLIMATE-RELATED FINANCIAL DISCLOSURES
Governance continued
80 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
a) Describe the climate-related risks and
opportunities the organisation has
identified over the short, medium, and
long term.
The Company’s principal risks and
uncertainties are outlined in the risk
management process on pages 34-42.
Within this framework, key climate-related
risks, along with relevant opportunities,
have been identified for Nostrum. As there
have been no significant changes in the
Company’s principal risks and
uncertainties, the climate-related risks have
also remained largely consistent with the
previous reporting period.
Transition risks
Policy and Legal
(short, medium and long term)
Kazakhstan’s commitment to carbon
neutrality by 2060 has driven the
strengthening of emissions regulations,
which may impact the Company’s
operations and financial performance.
Strategic measures such as enhancing the
Emissions Trading System (ETS),
introducing carbon taxation, and
reinforcing climate governance are
expected to increase compliance
obligations. The evolving environmental
legislation, including stricter permitting
requirements and heightened regulatory
oversight, could escalate operational costs
and introduce risks such as delays or
denials in obtaining environmental permits
from Kazakh authorities, critical to
maintaining or expanding operations.
The oil and gas industry, a significant
contributor to global GHG emissions,
remains exposed to carbon pricing risks,
regulatory scrutiny, and rising compliance
costs. Global efforts under the COP21
agreement to accelerate decarbonisation,
coupled with national policies to reduce
fossil fuel dependency, may intensify
pressure on the sector.
Beyond regulatory and permitting risks,
Nostrum’s operations carry inherent
environmental liabilities, including potential
gas leaks, oil spills, and emissions from
flaring, venting, and processing. Such
incidents could result in fines, cleanup
costs, litigation, community opposition,
operational disruptions, and reputational
harm. Failure to secure necessary
environmental permits, address
compliance gaps, or proactively adapt to
regulatory and market shifts could lead to
financial penalties, operational constraints,
and diminished competitiveness in an
energy sector transitioning toward
sustainability.
Technology
(medium and long term)
Nostrum faces technology transition risks
as it moves towards lower-emission
operations. High capital expenditures for
R&D, the adoption of alternative
technologies, and the deployment of new
processes could strain financial resources,
especially if advancements do not deliver
expected efficiencies.
Additionally, the risk of stranded assets
looms large, as existing fossil fuel
infrastructure may become obsolete due to
evolving regulations and cleaner energy
alternatives.
Failure to integrate energy-efficient
improvements or cybersecurity protections
in digital transformation efforts could also
expose the company to regulatory
penalties and operational disruptions.
Market
(short and medium term)
Includes risk of shifting consumer
preferences as growing climate concerns
drive demand away from fossil fuels toward
alternative energy sources, potentially
impacting sales and margins.
Additionally, the company may encounter
difficulties in securing financing, as ESG
factors and evolving market perceptions
could lower its rating and restrict access
to capital.
The energy transition has also intensified
competition, with new entrants and
established players pivoting towards
low-carbon solutions, increasing pressure
on Nostrum to adapt its market positioning.
Reputation
(medium and long term)
Nostrum recognises the increasing
reputational challenges associated with the
energy transition and the evolving
expectations of stakeholders. The oil and
gas sector faces growing stigmatisation, as
public and investor sentiment shifts toward
sustainable energy solutions.
Negative perceptions of fossil fuel activities
may impact the company’s ability to attract
investment, secure financing, and maintain
strong stakeholder relationships.
Additionally, there is a risk of failure to fulfill
commitments related to sustainability
targets, emissions reductions, or reporting
transparency. Any perceived shortcomings
in meeting climate-related goals or
misalignment with industry best practices
could result in reputational damage,
regulatory scrutiny, and loss of investor
confidence. Companies that do not present
a credible transition strategy may face
divestment pressure, litigation risks, and
competitive disadvantages, ultimately
affecting long-term shareholder value and
market positioning. Physical risks
Physical risks
Acute physical
(short and medium term)
The physical risks that may affect Nostrum
include flood events caused by overflowing
riverbanks, which could disrupt LPG
transportation and reduce revenues.
Additionally, sudden extreme temperature
changes due to climate change could
impact equipment productivity, increase
fire hazards, and cause thermal expansion
or contraction in pipelines and critical
systems, leading to operational
inefficiencies.
Chronic physical
(medium and long term)
Long-term climate risks that may impact the
company include severe rainfall and snow
conditions, which could become more
frequent and pose logistical and
infrastructure challenges. While
Kazakhstan’s continental climate has
historically exhibited gradual temperature
shifts, future climate change could result in
more extreme fluctuations, placing
additional stress on equipment and
facilities. Furthermore, higher summer
temperatures could reduce operational
efficiency, increase cooling costs, and
create additional risks for personnel and
assets.
Opportunities
The energy transition presents several
opportunities for Nostrum to enhance
efficiency, reduce emissions, and maintain
competitiveness in a changing regulatory
and market environment. Investing in
energy efficiency measures will help ensure
compliance with evolving legislation,
reduce operational costs, and prevent
potential overage charges. Optimising
resource usage will also enhance long-term
sustainability and financial resilience.
Strategy
TCFD recommendation:
Disclose the actual and
potential impacts of
climate- related risks
and opportunities
on the organisation’s
businesses, strategy,
and financial planning
where such information
is material.
Read more about our strategy
on pages 12-13
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 81 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
opportunities the organisation has
identified over the short, medium, and
long term.
The Company’s principal risks and
uncertainties are outlined in the risk
management process on pages 34-42.
Within this framework, key climate-related
risks, along with relevant opportunities,
have been identified for Nostrum. As there
have been no significant changes in the
Company’s principal risks and
uncertainties, the climate-related risks have
also remained largely consistent with the
previous reporting period.
Transition risks
Policy and Legal
(short, medium and long term)
Kazakhstan’s commitment to carbon
neutrality by 2060 has driven the
strengthening of emissions regulations,
which may impact the Company’s
operations and financial performance.
Strategic measures such as enhancing the
Emissions Trading System (ETS),
introducing carbon taxation, and
reinforcing climate governance are
expected to increase compliance
obligations. The evolving environmental
legislation, including stricter permitting
requirements and heightened regulatory
oversight, could escalate operational costs
and introduce risks such as delays or
denials in obtaining environmental permits
from Kazakh authorities, critical to
maintaining or expanding operations.
The oil and gas industry, a significant
contributor to global GHG emissions,
remains exposed to carbon pricing risks,
regulatory scrutiny, and rising compliance
costs. Global efforts under the COP21
agreement to accelerate decarbonisation,
coupled with national policies to reduce
fossil fuel dependency, may intensify
pressure on the sector.
Beyond regulatory and permitting risks,
Nostrum’s operations carry inherent
environmental liabilities, including potential
gas leaks, oil spills, and emissions from
flaring, venting, and processing. Such
incidents could result in fines, cleanup
costs, litigation, community opposition,
operational disruptions, and reputational
harm. Failure to secure necessary
environmental permits, address
compliance gaps, or proactively adapt to
regulatory and market shifts could lead to
financial penalties, operational constraints,
and diminished competitiveness in an
energy sector transitioning toward
sustainability.
Technology
(medium and long term)
Nostrum faces technology transition risks
as it moves towards lower-emission
operations. High capital expenditures for
R&D, the adoption of alternative
technologies, and the deployment of new
processes could strain financial resources,
especially if advancements do not deliver
expected efficiencies.
Additionally, the risk of stranded assets
looms large, as existing fossil fuel
infrastructure may become obsolete due to
evolving regulations and cleaner energy
alternatives.
Failure to integrate energy-efficient
improvements or cybersecurity protections
in digital transformation efforts could also
expose the company to regulatory
penalties and operational disruptions.
Market
(short and medium term)
Includes risk of shifting consumer
preferences as growing climate concerns
drive demand away from fossil fuels toward
alternative energy sources, potentially
impacting sales and margins.
Additionally, the company may encounter
difficulties in securing financing, as ESG
factors and evolving market perceptions
could lower its rating and restrict access
to capital.
The energy transition has also intensified
competition, with new entrants and
established players pivoting towards
low-carbon solutions, increasing pressure
on Nostrum to adapt its market positioning.
Reputation
(medium and long term)
Nostrum recognises the increasing
reputational challenges associated with the
energy transition and the evolving
expectations of stakeholders. The oil and
gas sector faces growing stigmatisation, as
public and investor sentiment shifts toward
sustainable energy solutions.
Negative perceptions of fossil fuel activities
may impact the company’s ability to attract
investment, secure financing, and maintain
strong stakeholder relationships.
Additionally, there is a risk of failure to fulfill
commitments related to sustainability
targets, emissions reductions, or reporting
transparency. Any perceived shortcomings
in meeting climate-related goals or
misalignment with industry best practices
could result in reputational damage,
regulatory scrutiny, and loss of investor
confidence. Companies that do not present
a credible transition strategy may face
divestment pressure, litigation risks, and
competitive disadvantages, ultimately
affecting long-term shareholder value and
market positioning. Physical risks
Physical risks
Acute physical
(short and medium term)
The physical risks that may affect Nostrum
include flood events caused by overflowing
riverbanks, which could disrupt LPG
transportation and reduce revenues.
Additionally, sudden extreme temperature
changes due to climate change could
impact equipment productivity, increase
fire hazards, and cause thermal expansion
or contraction in pipelines and critical
systems, leading to operational
inefficiencies.
Chronic physical
(medium and long term)
Long-term climate risks that may impact the
company include severe rainfall and snow
conditions, which could become more
frequent and pose logistical and
infrastructure challenges. While
Kazakhstan’s continental climate has
historically exhibited gradual temperature
shifts, future climate change could result in
more extreme fluctuations, placing
additional stress on equipment and
facilities. Furthermore, higher summer
temperatures could reduce operational
efficiency, increase cooling costs, and
create additional risks for personnel and
assets.
Opportunities
The energy transition presents several
opportunities for Nostrum to enhance
efficiency, reduce emissions, and maintain
competitiveness in a changing regulatory
and market environment. Investing in
energy efficiency measures will help ensure
compliance with evolving legislation,
reduce operational costs, and prevent
potential overage charges. Optimising
resource usage will also enhance long-term
sustainability and financial resilience.
Strategy
TCFD recommendation:
Disclose the actual and
potential impacts of
climate- related risks
and opportunities
on the organisation’s
businesses, strategy,
and financial planning
where such information
is material.
Read more about our strategy
on pages 12-13
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 81 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
CLIMATE-RELATED FINANCIAL DISCLOSURES
Implementing advanced emissions
monitoring systems will improve tracking,
strengthen regulatory reporting, and help
prevent unintended environmental
releases, supporting both compliance and
reputation management. Shifting toward
greater gas usage and reducing reliance
on oil aligns with global decarbonisation
efforts and positions the company for
long-term sustainability. Investing in
new technologies can drive operational
efficiency, reduce environmental impact,
and enhance Nostrum’s ability to adapt to
a low-carbon economy. By capitalising on
these opportunities, Nostrum Oil & Gas
can strengthen its market position, improve
regulatory compliance, and contribute
to the broader energy transition.
b) Describe the impact of climate-
related risks and opportunities on the
organisation’s businesses, strategy, and
financial planning.
We recognise that the transition to a
lower-carbon economy presents both risks
and opportunities for Nostrum. In the short
term, our strategy and financial planning
remain flexible, allowing us to adapt as
risks evolve. For medium- and long-term
planning, we remain aware of climate-
related risks and their potential impact on
project execution. To ensure resilience in
our strategic planning, we incorporate
stressed hydrocarbon price scenarios
and energy demand projections into our
decision-making processes. With respect
to physical risks, we have factored these
into our strategic planning to account for
potential operational disruptions and
revenue losses. To enhance resilience,
we have integrated infrastructure
reinforcement and adaptive planning into
our operations, ensuring assets are better
equipped to withstand extreme weather
conditions.
Additionally, we have developed
emergency response protocols and
contingency measures to minimise the
impact of climate-related events on
production, safeguarding both operational
stability and financial performance.
Our risk management processes include
infrastructure improvements and
operational adjustments, allowing us to
adapt proactively to evolving climate risks.
We have also embedded climate resilience
into operational procedures, ensuring that
key facilities are reinforced and critical
functions can continue with minimal
disruption. These measures collectively
ensure that the Company remains agile and
well-prepared to navigate the challenges
posed by climate-related physical risks.
We consider all transition risks – policy
and legal, technological, market, and
reputational to be material to our strategic
and financial planning. These risks impact
multiple aspects of our business, including
revenue, expenditures, and assets, as
outlined below.
Revenue – changing market demand for our
products due to climate-related risks and
opportunities, including shifts in customer
preferences, may lead to reduced demand
and lower pricing, ultimately impacting
future revenues.
Operating expenditures – increased costs
associated with climate-related risk
mitigation and adaptation, including
regulatory compliance, rising supply/
material costs as suppliers shift away from
servicing the oil and gas industry, and
operational downtime due to extreme
weather events. Additional expenditures
are also expected for improving energy
and water conservation efficiency.
Research & development – higher
investment in climate-related research &
development to develop and integrate new
technologies aimed at reducing emissions
and improving operational efficiency.
Capital expenditures – increased
investment in equipment and new
technologies to manage transition risks,
improve adaptation capabilities, and
enhance conservation and efficiency
efforts. Additional capital spending may
be required for physical risk mitigation,
including facility reinforcement and
increasing asset resilience to climate
impacts.
We apply equal weighting to all transition
risks in our business strategy and financial
planning. While physical risks remain
important from a governance perspective,
we assign them slightly lower financial
weighting, as we currently operate
successfully in extreme weather conditions
and expect to continue doing so.
We take a conservative approach in our
forward planning and do not factor in
potential opportunities that may arise in
the short, medium, or long term due to
climate change.
We have strengthened our climate
governance framework by allocating
additional resources to risk assessment
and reporting. This framework evaluates
climate-related risks and opportunities
across different time horizons and
determines their direct financial impact,
ensuring that they are embedded into our
strategic and financial planning. In addition,
we continue reporting under CDP,
providing an accurate and transparent
assessment of our environmental impact
and progress. This demonstrates our
commitment to climate action and
communicates our achievements to
customers, investors, and other
stakeholders. By doing so, we not only
enhance our reputation but also identify
areas for improvement in our environmental
strategy, allowing us to reduce climate risks
and further align with sustainability goals.
The Board and Senior Management
continuously monitor planning and
decision-making processes over
short-term, medium-term and long-term
horizons, which also cover relevant
climate-related risks and opportunities
as described below.
Short term: three-year period to the end
of 2026 over which the management
and the Board monitor the Company’s
liquidity and viability. The Company has
a detailed financial plan which is actively
managed and adapted according to
changes in external circumstances.
The climate-related risks are deemed to
affect the Company in the short-term
but are not as prevalent as they would
be in the medium and long term.
Medium term: eight-year period to the
end of 2031, which covers the full term
of the PSA and used in relevant valuation
models. Climate-related risks are
factored into these models, and
scenario analysis are performed using
various hydrocarbon prices and off-take
demand scenarios to support the Board
in decision-making for field investment
proposals in line with the Group’s
strategy.
Long term: period covering beyond
2031. This is defined by opportunities
identified in line with the Group’s
strategic initiatives, which are mostly
affected by climate-related risks. These
include risks associated with access to
financial and capital markets as well as
the ability obtain insurance, which may
leave the Company exposed to extreme
negative events. These other risks are
further described below.
Strategy continued
82 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Implementing advanced emissions
monitoring systems will improve tracking,
strengthen regulatory reporting, and help
prevent unintended environmental
releases, supporting both compliance and
reputation management. Shifting toward
greater gas usage and reducing reliance
on oil aligns with global decarbonisation
efforts and positions the company for
long-term sustainability. Investing in
new technologies can drive operational
efficiency, reduce environmental impact,
and enhance Nostrum’s ability to adapt to
a low-carbon economy. By capitalising on
these opportunities, Nostrum Oil & Gas
can strengthen its market position, improve
regulatory compliance, and contribute
to the broader energy transition.
b) Describe the impact of climate-
related risks and opportunities on the
organisation’s businesses, strategy, and
financial planning.
We recognise that the transition to a
lower-carbon economy presents both risks
and opportunities for Nostrum. In the short
term, our strategy and financial planning
remain flexible, allowing us to adapt as
risks evolve. For medium- and long-term
planning, we remain aware of climate-
related risks and their potential impact on
project execution. To ensure resilience in
our strategic planning, we incorporate
stressed hydrocarbon price scenarios
and energy demand projections into our
decision-making processes. With respect
to physical risks, we have factored these
into our strategic planning to account for
potential operational disruptions and
revenue losses. To enhance resilience,
we have integrated infrastructure
reinforcement and adaptive planning into
our operations, ensuring assets are better
equipped to withstand extreme weather
conditions.
Additionally, we have developed
emergency response protocols and
contingency measures to minimise the
impact of climate-related events on
production, safeguarding both operational
stability and financial performance.
Our risk management processes include
infrastructure improvements and
operational adjustments, allowing us to
adapt proactively to evolving climate risks.
We have also embedded climate resilience
into operational procedures, ensuring that
key facilities are reinforced and critical
functions can continue with minimal
disruption. These measures collectively
ensure that the Company remains agile and
well-prepared to navigate the challenges
posed by climate-related physical risks.
We consider all transition risks – policy
and legal, technological, market, and
reputational to be material to our strategic
and financial planning. These risks impact
multiple aspects of our business, including
revenue, expenditures, and assets, as
outlined below.
Revenue – changing market demand for our
products due to climate-related risks and
opportunities, including shifts in customer
preferences, may lead to reduced demand
and lower pricing, ultimately impacting
future revenues.
Operating expenditures – increased costs
associated with climate-related risk
mitigation and adaptation, including
regulatory compliance, rising supply/
material costs as suppliers shift away from
servicing the oil and gas industry, and
operational downtime due to extreme
weather events. Additional expenditures
are also expected for improving energy
and water conservation efficiency.
Research & development – higher
investment in climate-related research &
development to develop and integrate new
technologies aimed at reducing emissions
and improving operational efficiency.
Capital expenditures – increased
investment in equipment and new
technologies to manage transition risks,
improve adaptation capabilities, and
enhance conservation and efficiency
efforts. Additional capital spending may
be required for physical risk mitigation,
including facility reinforcement and
increasing asset resilience to climate
impacts.
We apply equal weighting to all transition
risks in our business strategy and financial
planning. While physical risks remain
important from a governance perspective,
we assign them slightly lower financial
weighting, as we currently operate
successfully in extreme weather conditions
and expect to continue doing so.
We take a conservative approach in our
forward planning and do not factor in
potential opportunities that may arise in
the short, medium, or long term due to
climate change.
We have strengthened our climate
governance framework by allocating
additional resources to risk assessment
and reporting. This framework evaluates
climate-related risks and opportunities
across different time horizons and
determines their direct financial impact,
ensuring that they are embedded into our
strategic and financial planning. In addition,
we continue reporting under CDP,
providing an accurate and transparent
assessment of our environmental impact
and progress. This demonstrates our
commitment to climate action and
communicates our achievements to
customers, investors, and other
stakeholders. By doing so, we not only
enhance our reputation but also identify
areas for improvement in our environmental
strategy, allowing us to reduce climate risks
and further align with sustainability goals.
The Board and Senior Management
continuously monitor planning and
decision-making processes over
short-term, medium-term and long-term
horizons, which also cover relevant
climate-related risks and opportunities
as described below.
Short term: three-year period to the end
of 2026 over which the management
and the Board monitor the Company’s
liquidity and viability. The Company has
a detailed financial plan which is actively
managed and adapted according to
changes in external circumstances.
The climate-related risks are deemed to
affect the Company in the short-term
but are not as prevalent as they would
be in the medium and long term.
Medium term: eight-year period to the
end of 2031, which covers the full term
of the PSA and used in relevant valuation
models. Climate-related risks are
factored into these models, and
scenario analysis are performed using
various hydrocarbon prices and off-take
demand scenarios to support the Board
in decision-making for field investment
proposals in line with the Group’s
strategy.
Long term: period covering beyond
2031. This is defined by opportunities
identified in line with the Group’s
strategic initiatives, which are mostly
affected by climate-related risks. These
include risks associated with access to
financial and capital markets as well as
the ability obtain insurance, which may
leave the Company exposed to extreme
negative events. These other risks are
further described below.
Strategy continued
82 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
c) Describe the resilience of the
organisation’s strategy, taking into
consideration different climate-related
scenarios, including a 2°C or lower
scenario
Nostrum’s strategy is designed with
flexibility to adapt to evolving conditions,
ensuring resilience in a dynamic energy
landscape. The current context has led to
increased focus on energy security,
industrial competitiveness, and a fair
transition. In response, Nostrum establishes
its strategic foundations and assumptions—
including price projections, demand
forecasts, and regulatory frameworks—
based on references such as analyst and
institutional consensus, country-specific
regulations, and our own vision of the
energy transition. These assumptions
remain consistent with those used in other
Group-wide projections, reinforcing
alignment across our business planning.
For this year’s climate risk analysis and
reporting, we examined various scenarios
proposed by international organisations
and agencies. We based our assessment
primarily on the Net Zero Emissions by
2050 Scenario (NZE Scenario) developed
by the International Energy Agency (IEA),
the scenario was originally published in
2021, with an update issued in October
2022, and incorporated Kazakhstan’s
Strategy on Achieving Carbon Neutrality
by 2060, which aligns with the country’s
commitments under the Paris Agreement.
Our approach remains consistent with
previous years, as we continue to utilise the
same climate scenarios and analytical
methods annually, making adjustments
only for significant changes in external
factors or internal operations.
Nostrum also considered the UK
government’s commitment to a net-zero
economy, given that Nostrum is
headquartered there. However, we
determined that this commitment is not
directly relevant, as the vast majority of
Nostrum’s emissions do not contribute to
the UK’s national emissions.
The Net Zero Emissions by 2050 (NZE)
Scenario is a normative framework
designed to achieve specific targets,
including net-zero emissions from the
energy sector by 2050 without relying
on offsets from other sectors. It sets an
emissions trajectory aimed at limiting
global temperature rise to below 1.5°C
by 2100. This scenario outlines a pathway
to achieving this goal.
To reach net zero by 2050, the NZE
Scenario envisions a transformation of the
global energy system, driven by three key
shifts: widespread electrification across
industries, major advancements in energy
efficiency and intensity, and stronger global
policy coordination and collaboration.
Under this scenario, the global economy
transitions away from a fossil fuel-
dominated model toward one primarily
powered by renewable energy. As a result,
the decline in demand for oil and gas exerts
downward pressure on prices.
Kazakhstan’s Strategy on Achieving Carbon
Neutrality by 2060 aims to increase the
share of renewable energy in the country’s
total energy balance to 15% by 2030 and
reduce GHG emissions by 15% by
December 2030 compared to 1990 levels. It
also includes strengthening the Kazakhstan
Emissions Trading System (ETS) to align
with international carbon pricing standards,
the introduction of stricter carbon tax
policies to incentivise emission reductions,
and strengthening environmental policies
to align with international climate
commitments. Additionally, the strategy
emphasises the integration of sustainability
principles into Kazakhstan’s economic and
industrial policies to support long-term
decarbonisation efforts.
Considering the short-, medium-, and
long-term horizons, the company
recognises the need for flexibility in its
strategic plans and the ability to adjust
operations as conditions evolve. To assess
its resilience under different climate-related
scenarios, the company applied both a
base-case scenario and a severe but
plausible scenario:
Base-case scenario (high-carbon climate
scenario – more than 4°C) – assumes a
gradual transition toward carbon neutrality,
reflecting a moderate pace of economic
decarbonisation. This scenario aligns with
the base-case scenario used in the viability
assessment (see pages 43-44).
Severe but plausible scenario – envisions
extreme shifts in the global economy and
the implementation of drastic measures to
accelerate Kazakhstan’s progress toward
net-zero emissions (very low-carbon climate
scenario – less than 1.5°C).
The base-case scenario includes the
implementation of energy efficiency
measures aimed at reducing greenhouse
gas emissions by 5% annually compared
to the previous year. This scenario
encompasses various initiatives, such as
asset digitalisation, the deployment of an
Automated Reporting System, the
installation of an automated emission
monitoring system, and water and energy
efficiency projects to enhance overall
sustainability and operational performance.
For the severe but plausible development
scenario, designed to stress-test the
company’s resilience, we applied two key
assumptions:
1. Oil price decline – according to the NZE
Scenario, oil prices are projected to fall to
$42 per barrel by 2030 and continue
declining, reaching $25 per barrel by
2050.
2. Rising carbon prices – based on the NZE
Scenario for emerging markets and
developing economies (without net-zero
emissions pledges), carbon prices are
expected to reach $25 per tonne of CO₂
by 2030, $85 per tonne by 2040, and
$180 per tonne by 2050.
We have analysed various carbon price
forecasts to stress-test our strategy. While
our primary focus has been on the NZE
Scenario, we also considered Kazakhstan’s
carbon neutrality goals. Under the NZE
Scenario for emerging markets and
developing economies with net-zero
emissions pledges, carbon prices are
expected to rise significantly, reaching an
average of $90 per tonne of CO₂ by 2030.
However, according to the World Bank,
Kazakhstan’s current carbon price remains
low, with projections suggesting that a
carbon price of $20 per tonne by 2030
would only be sufficient to achieve just over
half of the abatement target.
Given the wide range of carbon price
projections, from very high to relatively low,
we have chosen to apply a mid-point
approach in our modeling. As a result, we
have adopted the carbon price forecasts
from the NZE Scenario for emerging
markets and developing economies
without net-zero emissions pledges.
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 83 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
organisation’s strategy, taking into
consideration different climate-related
scenarios, including a 2°C or lower
scenario
Nostrum’s strategy is designed with
flexibility to adapt to evolving conditions,
ensuring resilience in a dynamic energy
landscape. The current context has led to
increased focus on energy security,
industrial competitiveness, and a fair
transition. In response, Nostrum establishes
its strategic foundations and assumptions—
including price projections, demand
forecasts, and regulatory frameworks—
based on references such as analyst and
institutional consensus, country-specific
regulations, and our own vision of the
energy transition. These assumptions
remain consistent with those used in other
Group-wide projections, reinforcing
alignment across our business planning.
For this year’s climate risk analysis and
reporting, we examined various scenarios
proposed by international organisations
and agencies. We based our assessment
primarily on the Net Zero Emissions by
2050 Scenario (NZE Scenario) developed
by the International Energy Agency (IEA),
the scenario was originally published in
2021, with an update issued in October
2022, and incorporated Kazakhstan’s
Strategy on Achieving Carbon Neutrality
by 2060, which aligns with the country’s
commitments under the Paris Agreement.
Our approach remains consistent with
previous years, as we continue to utilise the
same climate scenarios and analytical
methods annually, making adjustments
only for significant changes in external
factors or internal operations.
Nostrum also considered the UK
government’s commitment to a net-zero
economy, given that Nostrum is
headquartered there. However, we
determined that this commitment is not
directly relevant, as the vast majority of
Nostrum’s emissions do not contribute to
the UK’s national emissions.
The Net Zero Emissions by 2050 (NZE)
Scenario is a normative framework
designed to achieve specific targets,
including net-zero emissions from the
energy sector by 2050 without relying
on offsets from other sectors. It sets an
emissions trajectory aimed at limiting
global temperature rise to below 1.5°C
by 2100. This scenario outlines a pathway
to achieving this goal.
To reach net zero by 2050, the NZE
Scenario envisions a transformation of the
global energy system, driven by three key
shifts: widespread electrification across
industries, major advancements in energy
efficiency and intensity, and stronger global
policy coordination and collaboration.
Under this scenario, the global economy
transitions away from a fossil fuel-
dominated model toward one primarily
powered by renewable energy. As a result,
the decline in demand for oil and gas exerts
downward pressure on prices.
Kazakhstan’s Strategy on Achieving Carbon
Neutrality by 2060 aims to increase the
share of renewable energy in the country’s
total energy balance to 15% by 2030 and
reduce GHG emissions by 15% by
December 2030 compared to 1990 levels. It
also includes strengthening the Kazakhstan
Emissions Trading System (ETS) to align
with international carbon pricing standards,
the introduction of stricter carbon tax
policies to incentivise emission reductions,
and strengthening environmental policies
to align with international climate
commitments. Additionally, the strategy
emphasises the integration of sustainability
principles into Kazakhstan’s economic and
industrial policies to support long-term
decarbonisation efforts.
Considering the short-, medium-, and
long-term horizons, the company
recognises the need for flexibility in its
strategic plans and the ability to adjust
operations as conditions evolve. To assess
its resilience under different climate-related
scenarios, the company applied both a
base-case scenario and a severe but
plausible scenario:
Base-case scenario (high-carbon climate
scenario – more than 4°C) – assumes a
gradual transition toward carbon neutrality,
reflecting a moderate pace of economic
decarbonisation. This scenario aligns with
the base-case scenario used in the viability
assessment (see pages 43-44).
Severe but plausible scenario – envisions
extreme shifts in the global economy and
the implementation of drastic measures to
accelerate Kazakhstan’s progress toward
net-zero emissions (very low-carbon climate
scenario – less than 1.5°C).
The base-case scenario includes the
implementation of energy efficiency
measures aimed at reducing greenhouse
gas emissions by 5% annually compared
to the previous year. This scenario
encompasses various initiatives, such as
asset digitalisation, the deployment of an
Automated Reporting System, the
installation of an automated emission
monitoring system, and water and energy
efficiency projects to enhance overall
sustainability and operational performance.
For the severe but plausible development
scenario, designed to stress-test the
company’s resilience, we applied two key
assumptions:
1. Oil price decline – according to the NZE
Scenario, oil prices are projected to fall to
$42 per barrel by 2030 and continue
declining, reaching $25 per barrel by
2050.
2. Rising carbon prices – based on the NZE
Scenario for emerging markets and
developing economies (without net-zero
emissions pledges), carbon prices are
expected to reach $25 per tonne of CO₂
by 2030, $85 per tonne by 2040, and
$180 per tonne by 2050.
We have analysed various carbon price
forecasts to stress-test our strategy. While
our primary focus has been on the NZE
Scenario, we also considered Kazakhstan’s
carbon neutrality goals. Under the NZE
Scenario for emerging markets and
developing economies with net-zero
emissions pledges, carbon prices are
expected to rise significantly, reaching an
average of $90 per tonne of CO₂ by 2030.
However, according to the World Bank,
Kazakhstan’s current carbon price remains
low, with projections suggesting that a
carbon price of $20 per tonne by 2030
would only be sufficient to achieve just over
half of the abatement target.
Given the wide range of carbon price
projections, from very high to relatively low,
we have chosen to apply a mid-point
approach in our modeling. As a result, we
have adopted the carbon price forecasts
from the NZE Scenario for emerging
markets and developing economies
without net-zero emissions pledges.
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 83 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
These assumptions have been incorporated
into the three-year financial model to assess
Nostrum’s strategic resilience amid the
challenges and opportunities posed by
climate change in the short term, in line
with the NZE Scenario and Kazakhstan’s
Strategy on Achieving Carbon Neutrality
by 2060.
As part of this assessment, we have
identified Zhaikmunai and Chinarevskoye
fields as the assets most exposed to
transition risks. These fields, given their
reliance on oil and gas production, face
potential financial and operational impacts
due to carbon pricing policies, shifts in
global demand, and regulatory pressures.
The evolving economic and environmental
landscape may require adjustments in
operational strategies to mitigate financial
risks associated with stricter emissions
regulations and declining hydrocarbon
demand.
Building on this evaluation, we also refer
to the Viability Statement (pages 43-44),
which considers the company’s resilience
against key risks and uncertainties.
Stress-testing our financial projections
under these conservative policy
assumptions confirms that the company
remains resilient under a 1.5°C climate
scenario. Furthermore, we believe that
Nostrum has a solid financial foundation
and sufficient flexibility in its business plan
to effectively adapt to extreme climate-
related impacts.
Our strategy undergoes annual validation
by the Board of Directors to ensure its
continued relevance and resilience. Please
refer to the Governance section for further
details. Adjustments will be made as
necessary if there are significant shifts in
the global environment.
CLIMATE-RELATED FINANCIAL DISCLOSURES
a) Describe the organisation’s processes
for identifying and assessing climate-
related risks;
b) Describe the organisation’s processes
for managing climate-related risks;
c) Describe how processes for
identifying, assessing, and managing
climate-related risks are integrated into
the organisation’s overall risk
management.
Nostrum employs a structured approach to
identifying and assessing climate-related
risks, integrating them into the company’s
overall risk management framework. These
risks are embedded into our overall Group
Risk Management framework and form an
integral part of Nostrum’s risk management
and internal controls system. We include
“climate change risks” as a principal risk and
uncertainty on our Company risk register
(see page 40).
Climate-related risk management is
overseen by Nostrum’s Board of Directors,
supported by the Audit Committee, ESG
Committee, and HSE Committee. These
governance structures ensure climate risks
are effectively identified, assessed, and
managed. The ESG Committee, led by the
Head of ESG, evaluates climate-related risks
and integrates them into corporate
strategy. The HSE Committee, overseen
by the Group Head of HSE, monitors
operational risks related to environmental
and safety issues. These committees
meet regularly to assess emerging risks,
regulatory developments, and stakeholder
expectations, ensuring climate-related
considerations are embedded in strategic
decision-making.
TCFD recommendation:
Disclose how the
organisation identifies,
assesses, and manages
climate-related risks.
Read more about our risk
management on pages 34-35
Nostrum categorises climate-related risks
into transition and physical risks. Transition
risks include policy and legal changes such
as carbon taxation and stricter regulations,
technological risks from high investment
needs and asset obsolescence, market risks
due to shifting consumer demand and
ESG-driven financing restrictions, and
reputational risks from stakeholder scrutiny
and sustainability commitments. Physical
risks include acute risks like extreme
weather events affecting transportation
and operations, and chronic risks such as
long-term temperature shifts impacting
infrastructure and efficiency. Nostrum
integrates climate risk assessments into
strategic planning, regulatory monitoring,
and scenario analysis to ensure long-term
resilience.
We conduct horizon scanning to stay ahead
of emerging risks through regular reviews
of global climate policies, engagement with
stakeholders, and participation in industry
forums. Risk assessment tools include
climate scenario analysis aligned with IPCC
pathways and materiality assessments to
prioritise key risks.
Climate-related risks assessment is based
on likelihood, financial impact, and time
horizon. Materiality assessments rank
climate risks alongside operational,
financial, and geopolitical risks.
Quantitative analysis includes financial
modeling to evaluate project viability.
Qualitative analysis involves workshops
with operational teams to assess supply
chain and operational vulnerabilities.
For policy and market trend evaluation we
adopt industry best practices, using TCFD
for risk classification, IPCC scenarios for
long-term impact assessment, and the IEA
Net Zero Roadmap.
Physical risks management: Recognising
the physical risks associated with climate
change, the company has incorporated
climate risk considerations into its routine
risk assessments and overall business
strategy. Nostrum has established robust
measures to manage risks associated with
extreme weather events, helping to
mitigate potential climate-related impacts
and enhance infrastructure resilience. Key
initiatives include adaptation measures and
the implementation of comprehensive
emergency response and disaster recovery
programmes, featuring regular training,
testing procedures, and dedicated
emergency rescue teams at its production
facilities.
Risk Management Strategy continued
84 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
into the three-year financial model to assess
Nostrum’s strategic resilience amid the
challenges and opportunities posed by
climate change in the short term, in line
with the NZE Scenario and Kazakhstan’s
Strategy on Achieving Carbon Neutrality
by 2060.
As part of this assessment, we have
identified Zhaikmunai and Chinarevskoye
fields as the assets most exposed to
transition risks. These fields, given their
reliance on oil and gas production, face
potential financial and operational impacts
due to carbon pricing policies, shifts in
global demand, and regulatory pressures.
The evolving economic and environmental
landscape may require adjustments in
operational strategies to mitigate financial
risks associated with stricter emissions
regulations and declining hydrocarbon
demand.
Building on this evaluation, we also refer
to the Viability Statement (pages 43-44),
which considers the company’s resilience
against key risks and uncertainties.
Stress-testing our financial projections
under these conservative policy
assumptions confirms that the company
remains resilient under a 1.5°C climate
scenario. Furthermore, we believe that
Nostrum has a solid financial foundation
and sufficient flexibility in its business plan
to effectively adapt to extreme climate-
related impacts.
Our strategy undergoes annual validation
by the Board of Directors to ensure its
continued relevance and resilience. Please
refer to the Governance section for further
details. Adjustments will be made as
necessary if there are significant shifts in
the global environment.
CLIMATE-RELATED FINANCIAL DISCLOSURES
a) Describe the organisation’s processes
for identifying and assessing climate-
related risks;
b) Describe the organisation’s processes
for managing climate-related risks;
c) Describe how processes for
identifying, assessing, and managing
climate-related risks are integrated into
the organisation’s overall risk
management.
Nostrum employs a structured approach to
identifying and assessing climate-related
risks, integrating them into the company’s
overall risk management framework. These
risks are embedded into our overall Group
Risk Management framework and form an
integral part of Nostrum’s risk management
and internal controls system. We include
“climate change risks” as a principal risk and
uncertainty on our Company risk register
(see page 40).
Climate-related risk management is
overseen by Nostrum’s Board of Directors,
supported by the Audit Committee, ESG
Committee, and HSE Committee. These
governance structures ensure climate risks
are effectively identified, assessed, and
managed. The ESG Committee, led by the
Head of ESG, evaluates climate-related risks
and integrates them into corporate
strategy. The HSE Committee, overseen
by the Group Head of HSE, monitors
operational risks related to environmental
and safety issues. These committees
meet regularly to assess emerging risks,
regulatory developments, and stakeholder
expectations, ensuring climate-related
considerations are embedded in strategic
decision-making.
TCFD recommendation:
Disclose how the
organisation identifies,
assesses, and manages
climate-related risks.
Read more about our risk
management on pages 34-35
Nostrum categorises climate-related risks
into transition and physical risks. Transition
risks include policy and legal changes such
as carbon taxation and stricter regulations,
technological risks from high investment
needs and asset obsolescence, market risks
due to shifting consumer demand and
ESG-driven financing restrictions, and
reputational risks from stakeholder scrutiny
and sustainability commitments. Physical
risks include acute risks like extreme
weather events affecting transportation
and operations, and chronic risks such as
long-term temperature shifts impacting
infrastructure and efficiency. Nostrum
integrates climate risk assessments into
strategic planning, regulatory monitoring,
and scenario analysis to ensure long-term
resilience.
We conduct horizon scanning to stay ahead
of emerging risks through regular reviews
of global climate policies, engagement with
stakeholders, and participation in industry
forums. Risk assessment tools include
climate scenario analysis aligned with IPCC
pathways and materiality assessments to
prioritise key risks.
Climate-related risks assessment is based
on likelihood, financial impact, and time
horizon. Materiality assessments rank
climate risks alongside operational,
financial, and geopolitical risks.
Quantitative analysis includes financial
modeling to evaluate project viability.
Qualitative analysis involves workshops
with operational teams to assess supply
chain and operational vulnerabilities.
For policy and market trend evaluation we
adopt industry best practices, using TCFD
for risk classification, IPCC scenarios for
long-term impact assessment, and the IEA
Net Zero Roadmap.
Physical risks management: Recognising
the physical risks associated with climate
change, the company has incorporated
climate risk considerations into its routine
risk assessments and overall business
strategy. Nostrum has established robust
measures to manage risks associated with
extreme weather events, helping to
mitigate potential climate-related impacts
and enhance infrastructure resilience. Key
initiatives include adaptation measures and
the implementation of comprehensive
emergency response and disaster recovery
programmes, featuring regular training,
testing procedures, and dedicated
emergency rescue teams at its production
facilities.
Risk Management Strategy continued
84 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
TCFD recommendation:
Disclose the metrics and
targets used to assess
and manage relevant
climate-related risks and
opportunities where such
information is material.
Read more about our risk
management on pages 34-35
a) Disclose the metrics used by the
organisation to assess climate- related
risks and opportunities in line with its
strategy and risk management process.
Nostrum employs a range of defined
metrics and targets to ensure that business
objectives related to climate change and
the energy transition are achieved. Our key
risk indicators focus on carbon emissions,
air quality, flaring frequency, water use,
and waste management, all of which are
measured, managed, and reported to both
the Board and regulatory authorities. A
specific KPI is tied to GHG reduction (see
(c) below). The above metrics are
monitored by regulatory authorities and
undergo regular review to ensure
compliance with environmental regulations.
In addition to these KPIs, we have
implemented various initiatives and
projects aimed at reducing emissions
(please see pages 70-72 of the
Environment section).
Management of climate-related risks
and opportunities is embedded into the
company’s overall approach, including its
executive remuneration framework.
Please refer to the Remuneration
Committee Report for further details
on climate-related KPIs.
Each year, an independent provider
prepares for us the Greenhouse Gas
Emissions Inventory Report (covering
carbon dioxide, methane, nitrous oxide,
and perfluorocarbons), with independent
verification of the report.
The methodology for calculating
greenhouse gas emissions and absorption
is based on the Order of the Minister of
Ecology and Natural Resources of the
Republic of Kazakhstan, in accordance with
the Environmental Code of the Republic of
Kazakhstan, the Law of the Republic of
Kazakhstan On State Statistics”, the Rules
for State Regulation in the Sphere of
Greenhouse Gas Emissions and
Absorption, as well as the IPCC Guidelines
for National Greenhouse Gas Inventories.
Looking ahead, Nostrum plans to
integrate carbon pricing into the
economic evaluation of future investment
opportunities, both within Chinarevskoye
and other assets. Through benchmarking
against industry peers, leading companies
in the sector, and regional carbon pricing
developments, we will apply an internal
carbon price in investment decisions,
effectively raising the hurdle rate for project
approvals. For more details, please see
pages 71-76.
b) Disclose Scope 1, Scope 2, and, if
appropriate, Scope 3 greenhouse gas
(GHG) emissions, and the related risks.
In the Environment (GHG Emissions Results)
section of this report, we provide a
comprehensive disclosure of our Scope 1,
Scope 2, and Scope 3 GHG emissions.
These emissions have been reported on
an annual basis in our Annual Report and
on the Company website, in line with our
commitment to transparency and
compliance with the GHG Protocol, as
mandated by the Republic of Kazakhstan’s
legislative requirements.
Summary of GHG Emissions
(in tCO2e):
2023 2024
Scope 1 180,136 256,082
Scope 2 21 7
Scope 3 1,869 2,801
Waste generated in
operations 289 1,313
Capital goods 150 184
Goods and services 1,430 1,304
Detailed results of Scope 3 calculations will
be covered in CDP submission for 2024. For
a detailed information on GHG emissions,
please see page 75 of the Strategic Report.
The Company remains committed to
reducing emissions from business and
commuting travel, strengthening
collaboration with suppliers to implement
sustainable practices, and further
expanding the Scope 3 emissions
analysis in future reporting.
Policy and legal risks management:
Nostrum recognises the policy and legal
risks associated with climate change and
actively integrates climate-related
considerations into its strategic planning,
risk management, and investment
decision-making processes, allowing
for proactive adaptation to regulatory
developments. The company ensures
compliance with evolving regulations
through regular assessments. The
company’s legal team plays a critical role
in providing analysis and advice to
mitigate potential regulatory risks.
Market risks management: Nostrum
mitigates climate-related market risks by
diversifying into gas processing, optimising
infrastructure use, and reducing reliance on
oil. The company integrates climate
considerations into strategic planning and
risk management to align with the energy
transition. Cost efficiency improvements
and operational flexibility help navigate
price volatility and regulatory changes.
Maintaining a strong balance sheet and
prudent liquidity supports long-term
resilience and growth in a lower-carbon
economy.
Technology risks management:
Nostrum’s operations team actively
mitigates risks and identifies opportunities
associated with emerging technologies in
the evolving global energy landscape. The
team conducts technology assessments
and disruptive technology evaluations,
providing recommendations that inform
strategic decisions. We are investing in
digitalisation, automation, and methane
emission management solutions to
enhance operational efficiency, manage
risks, and support our transition to a
lower-carbon future.
Reputation risks management: Nostrum
actively mitigates reputation-related
climate risks by ensuring accurate data
reporting and strong environmental risk
management practices. We align corporate
policies and public positions on climate
change to regulatory expectations and
stakeholder concerns, minimising potential
reputational risks. Our transparent climate
disclosures through TCFD, CDP, and ESG
reporting reinforce accountability and
demonstrate progress in climate action.
We engage regularly with investors, local
communities, and stakeholders to assess
and address climate-related social, political,
and regulatory risks.
Metrics and Targets
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 85 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
Disclose the metrics and
targets used to assess
and manage relevant
climate-related risks and
opportunities where such
information is material.
Read more about our risk
management on pages 34-35
a) Disclose the metrics used by the
organisation to assess climate- related
risks and opportunities in line with its
strategy and risk management process.
Nostrum employs a range of defined
metrics and targets to ensure that business
objectives related to climate change and
the energy transition are achieved. Our key
risk indicators focus on carbon emissions,
air quality, flaring frequency, water use,
and waste management, all of which are
measured, managed, and reported to both
the Board and regulatory authorities. A
specific KPI is tied to GHG reduction (see
(c) below). The above metrics are
monitored by regulatory authorities and
undergo regular review to ensure
compliance with environmental regulations.
In addition to these KPIs, we have
implemented various initiatives and
projects aimed at reducing emissions
(please see pages 70-72 of the
Environment section).
Management of climate-related risks
and opportunities is embedded into the
company’s overall approach, including its
executive remuneration framework.
Please refer to the Remuneration
Committee Report for further details
on climate-related KPIs.
Each year, an independent provider
prepares for us the Greenhouse Gas
Emissions Inventory Report (covering
carbon dioxide, methane, nitrous oxide,
and perfluorocarbons), with independent
verification of the report.
The methodology for calculating
greenhouse gas emissions and absorption
is based on the Order of the Minister of
Ecology and Natural Resources of the
Republic of Kazakhstan, in accordance with
the Environmental Code of the Republic of
Kazakhstan, the Law of the Republic of
Kazakhstan On State Statistics”, the Rules
for State Regulation in the Sphere of
Greenhouse Gas Emissions and
Absorption, as well as the IPCC Guidelines
for National Greenhouse Gas Inventories.
Looking ahead, Nostrum plans to
integrate carbon pricing into the
economic evaluation of future investment
opportunities, both within Chinarevskoye
and other assets. Through benchmarking
against industry peers, leading companies
in the sector, and regional carbon pricing
developments, we will apply an internal
carbon price in investment decisions,
effectively raising the hurdle rate for project
approvals. For more details, please see
pages 71-76.
b) Disclose Scope 1, Scope 2, and, if
appropriate, Scope 3 greenhouse gas
(GHG) emissions, and the related risks.
In the Environment (GHG Emissions Results)
section of this report, we provide a
comprehensive disclosure of our Scope 1,
Scope 2, and Scope 3 GHG emissions.
These emissions have been reported on
an annual basis in our Annual Report and
on the Company website, in line with our
commitment to transparency and
compliance with the GHG Protocol, as
mandated by the Republic of Kazakhstan’s
legislative requirements.
Summary of GHG Emissions
(in tCO2e):
2023 2024
Scope 1 180,136 256,082
Scope 2 21 7
Scope 3 1,869 2,801
Waste generated in
operations 289 1,313
Capital goods 150 184
Goods and services 1,430 1,304
Detailed results of Scope 3 calculations will
be covered in CDP submission for 2024. For
a detailed information on GHG emissions,
please see page 75 of the Strategic Report.
The Company remains committed to
reducing emissions from business and
commuting travel, strengthening
collaboration with suppliers to implement
sustainable practices, and further
expanding the Scope 3 emissions
analysis in future reporting.
Policy and legal risks management:
Nostrum recognises the policy and legal
risks associated with climate change and
actively integrates climate-related
considerations into its strategic planning,
risk management, and investment
decision-making processes, allowing
for proactive adaptation to regulatory
developments. The company ensures
compliance with evolving regulations
through regular assessments. The
company’s legal team plays a critical role
in providing analysis and advice to
mitigate potential regulatory risks.
Market risks management: Nostrum
mitigates climate-related market risks by
diversifying into gas processing, optimising
infrastructure use, and reducing reliance on
oil. The company integrates climate
considerations into strategic planning and
risk management to align with the energy
transition. Cost efficiency improvements
and operational flexibility help navigate
price volatility and regulatory changes.
Maintaining a strong balance sheet and
prudent liquidity supports long-term
resilience and growth in a lower-carbon
economy.
Technology risks management:
Nostrum’s operations team actively
mitigates risks and identifies opportunities
associated with emerging technologies in
the evolving global energy landscape. The
team conducts technology assessments
and disruptive technology evaluations,
providing recommendations that inform
strategic decisions. We are investing in
digitalisation, automation, and methane
emission management solutions to
enhance operational efficiency, manage
risks, and support our transition to a
lower-carbon future.
Reputation risks management: Nostrum
actively mitigates reputation-related
climate risks by ensuring accurate data
reporting and strong environmental risk
management practices. We align corporate
policies and public positions on climate
change to regulatory expectations and
stakeholder concerns, minimising potential
reputational risks. Our transparent climate
disclosures through TCFD, CDP, and ESG
reporting reinforce accountability and
demonstrate progress in climate action.
We engage regularly with investors, local
communities, and stakeholders to assess
and address climate-related social, political,
and regulatory risks.
Metrics and Targets
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 85 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
CLIMATE-RELATED FINANCIAL DISCLOSURES
c) Describe the targets used by the
organisation to manage climate- related
risks and opportunities and
performance against targets.
Nostrum uses key performance indicators
(KPIs) to manage climate-related risks and
to realize climate-related opportunities in
line with its ESG strategy and regulatory
requirements. These KPIs provide
measurable benchmarks to monitor
performance, guide strategic decisions,
and promote continuous improvement.
Furthermore, as required by the section
414CB(2A)(h) of the UK Companies Act
2006, Nostrum describes the KPIs used to
manage climate-related risks and realise
climate-related opportunities and the
calculations on which those KPIs are based.
Climate-Related KPIs
and Calculations
1. Greenhouse Gas (GHG) Emissions
• Purpose: Reduce the company’s
carbon footprint and ensure
compliance with the national GHG
allocation plan (203,562 tons of CO₂
for 2024) 1
.
• Calculation: Measured in tons of CO₂
equivalent, with reduction efforts
focused on energy efficiency,
minimizing flaring, and leak
prevention.
2. Health, Safety, and Environmental
(HSE) KPIs
• Total Recordable Injury Frequency
(TRIF) – Measures workplace injuries
per million hours worked.
• Lost Time Injury Frequency (LTIF)
– Tracks incidents resulting in lost
workdays.
• Road Traffic Incidents (RTIs) –
Monitors transportation safety.
3. ESG Performance and Ratings
• Purpose: Maintain current ESG rating
levels while aiming for gradual
improvement, especially in light of
tightening regulation and rating
agencies requirements, and ensure
alignment with the Annual ESG Plan.
• Calculation: Tracked through external
ESG ratings and internal assigned ESG
initiatives, with the following reporting
structure.
4. Management and Reporting
• Emissions, waste, and HSE
performance are managed through
structured policies and initiatives.
• Monthly QHSE reports track KPIs,
ensuring accountability.
• The Board oversees climate
governance, risk assessment, and
emissions management.
These KPIs help Nostrum enhance
efficiency, mitigate climate risks, and
strengthen sustainability commitments,
capture opportunities in low-emission
technologies and ESG investment trends
For more details, please refer to the
Environment section on pages 69-77.
We recognize that achieving net-zero
emissions is a long-term journey for the
Group, and we remain committed to
tracking progress through interim targets
in the coming years.
Nostrum aims to play an active role in
supporting Kazakhstan’s transition to
cleaner energy and its goal of carbon
neutrality by 2060, aligning our strategy
with national and global decarbonization
efforts. This strategic report is approved
by the Board.
Arfan Khan
Chief Executive Officer
22 April 2025
Metrics and Targets continued
1. In 2022 the National GHG Allocation Plan was approved with a quota set for 2024 at 203,562. In May 2024
amendments were made to the Plan and the quota for 2024 was revised to 206,182. The Company’s KPIs
were approved before these amendments.
86 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
c) Describe the targets used by the
organisation to manage climate- related
risks and opportunities and
performance against targets.
Nostrum uses key performance indicators
(KPIs) to manage climate-related risks and
to realize climate-related opportunities in
line with its ESG strategy and regulatory
requirements. These KPIs provide
measurable benchmarks to monitor
performance, guide strategic decisions,
and promote continuous improvement.
Furthermore, as required by the section
414CB(2A)(h) of the UK Companies Act
2006, Nostrum describes the KPIs used to
manage climate-related risks and realise
climate-related opportunities and the
calculations on which those KPIs are based.
Climate-Related KPIs
and Calculations
1. Greenhouse Gas (GHG) Emissions
• Purpose: Reduce the company’s
carbon footprint and ensure
compliance with the national GHG
allocation plan (203,562 tons of CO₂
for 2024) 1
.
• Calculation: Measured in tons of CO₂
equivalent, with reduction efforts
focused on energy efficiency,
minimizing flaring, and leak
prevention.
2. Health, Safety, and Environmental
(HSE) KPIs
• Total Recordable Injury Frequency
(TRIF) – Measures workplace injuries
per million hours worked.
• Lost Time Injury Frequency (LTIF)
– Tracks incidents resulting in lost
workdays.
• Road Traffic Incidents (RTIs) –
Monitors transportation safety.
3. ESG Performance and Ratings
• Purpose: Maintain current ESG rating
levels while aiming for gradual
improvement, especially in light of
tightening regulation and rating
agencies requirements, and ensure
alignment with the Annual ESG Plan.
• Calculation: Tracked through external
ESG ratings and internal assigned ESG
initiatives, with the following reporting
structure.
4. Management and Reporting
• Emissions, waste, and HSE
performance are managed through
structured policies and initiatives.
• Monthly QHSE reports track KPIs,
ensuring accountability.
• The Board oversees climate
governance, risk assessment, and
emissions management.
These KPIs help Nostrum enhance
efficiency, mitigate climate risks, and
strengthen sustainability commitments,
capture opportunities in low-emission
technologies and ESG investment trends
For more details, please refer to the
Environment section on pages 69-77.
We recognize that achieving net-zero
emissions is a long-term journey for the
Group, and we remain committed to
tracking progress through interim targets
in the coming years.
Nostrum aims to play an active role in
supporting Kazakhstan’s transition to
cleaner energy and its goal of carbon
neutrality by 2060, aligning our strategy
with national and global decarbonization
efforts. This strategic report is approved
by the Board.
Arfan Khan
Chief Executive Officer
22 April 2025
Metrics and Targets continued
1. In 2022 the National GHG Allocation Plan was approved with a quota set for 2024 at 203,562. In May 2024
amendments were made to the Plan and the quota for 2024 was revised to 206,182. The Company’s KPIs
were approved before these amendments.
86 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
CORPORATE GOVERNANCE
88 Introduction to corporate
governance
90 Board of Directors
94 Senior management team
96 Governance framework
99 Audit Committee report
106 Nomination and Governance
Committee report
107 Statement from the Remuneration
Committee Chairman
108 2024 annual report on remuneration
125 Directors’ report
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 87 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
88 Introduction to corporate
governance
90 Board of Directors
94 Senior management team
96 Governance framework
99 Audit Committee report
106 Nomination and Governance
Committee report
107 Statement from the Remuneration
Committee Chairman
108 2024 annual report on remuneration
125 Directors’ report
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 87 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
Introduction to
corporate governance
INTRODUCTION TO CORPORATE GOVERNANCE
Section 1: Board leadership and
company purpose
A successful company is led by an effective and entrepreneurial
Board, whose role is to promote the long-term sustainable success
of the company, generating value for shareholders and contributing
to wider society.
See pages 90-91.
The Board establishes the company’s purpose, values and strategy,
and satisfies itself that these and its culture are aligned. All
directors must act with integrity, lead by example and promote
the desired culture.
See pages 62-66, 12-13.
The Board ensures that the necessary resources are in place for the
company to meet its objectives and measures performance against
them. The Board also establishes a framework of prudent and
effective controls, which enable risk to be assessed and managed.
See pages 34-35.
In order for the company to meet its responsibilities to
shareholders and stakeholders, the Board ensures effective
engagement with, and encourages participation from,
these parties.
See pages 20-21 and 92.
The Board ensures that workforce policies and practices are
consistent with the company’s values and support its long-term
sustainable success. The workforce is able to raise any matters of
concern with the Board.
See pages 62-66.
Section 2: Division of responsibilities
The chair leads the Board and is responsible for its overall
effectiveness in directing the company. The chair demonstrates
objective judgement and promotes a culture of openness and
debate. In addition, the chair facilitates constructive Board relations
and the effective contribution of all non- executive directors, and
ensures that directors receive accurate, timely and clear information.
See pages 96-98.
The Board includes an appropriate combination of executive and
non- executive (and, in particular, independent non-executive)
directors, such that no one individual or small group of individuals
dominates the Board’s decision-making. There is a clear division
of responsibilities between the leadership of the Board and the
executive leadership of the company’s business.
See page 96-98.
Non-executive directors should have sufficient time to meet their
Board responsibilities. They provide constructive challenge,
strategic guidance, offer specialist advice and hold management
to account.
See page 96-98.
The Board, supported by the company secretary, ensures that the
company has the policies, processes, information, time and
resources it needs in order to function effectively and efficiently.
See page 96-98.
Section 3: Composition, succession
and evaluation
Appointments to the Board are subject to a formal, rigorous and
transparent procedure, and an effective succession plan should be
maintained for Board and senior management. Both appointments
and succession plans should be based on merit and objective
criteria and, within this context, should promote diversity of gender,
social and ethnic backgrounds, cognitive and personal strengths.
See pages 96-98.
The Board and its committees have a combination of skills,
experience and knowledge. Consideration should be given to
the length of service of the Board as a whole and membership
regularly refreshed.
See pages 90-91 and committee reports.
Annual evaluation of the Board should consider its composition,
diversity and how effectively members work together to achieve
objectives. Individual evaluation should demonstrate whether each
director continues to contribute effectively.
See page 92.
Section 4: Audit, risk and internal control
The Board should establish formal and transparent policies and
procedures to ensure the independence and effectiveness of
internal and external audit functions and satisfy itself on the
integrity of financial and narrative statements.
See pages 99-105.
The Board presents a fair, balanced and understandable
assessment of the company’s position and prospects.
See page 129.
The Board establishes procedures to manage risk, oversee the
internal control framework, and determine the nature and extent of
the principal risks the company is willing to take in order to achieve
its long-term objectives.
See pages 34-35.
Section 5: Remuneration
Remuneration policies and practices are designed to support
strategy and promote long-term sustainable success. Executive
remuneration is aligned to company purpose and values, and
clearly linked to the successful delivery of the company’s
long-term strategy.
See pages 107-124.
A formal and transparent procedure for developing policy on
executive remuneration and determining director and senior
management remuneration should be established. No director
is involved in deciding their own remuneration outcome.
See pages 107-124.
Directors exercise independent judgement and discretion when
authorising remuneration outcomes, taking account of company
and individual performance, and wider circumstances.
See pages 107-124.
88 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
corporate governance
INTRODUCTION TO CORPORATE GOVERNANCE
Section 1: Board leadership and
company purpose
A successful company is led by an effective and entrepreneurial
Board, whose role is to promote the long-term sustainable success
of the company, generating value for shareholders and contributing
to wider society.
See pages 90-91.
The Board establishes the company’s purpose, values and strategy,
and satisfies itself that these and its culture are aligned. All
directors must act with integrity, lead by example and promote
the desired culture.
See pages 62-66, 12-13.
The Board ensures that the necessary resources are in place for the
company to meet its objectives and measures performance against
them. The Board also establishes a framework of prudent and
effective controls, which enable risk to be assessed and managed.
See pages 34-35.
In order for the company to meet its responsibilities to
shareholders and stakeholders, the Board ensures effective
engagement with, and encourages participation from,
these parties.
See pages 20-21 and 92.
The Board ensures that workforce policies and practices are
consistent with the company’s values and support its long-term
sustainable success. The workforce is able to raise any matters of
concern with the Board.
See pages 62-66.
Section 2: Division of responsibilities
The chair leads the Board and is responsible for its overall
effectiveness in directing the company. The chair demonstrates
objective judgement and promotes a culture of openness and
debate. In addition, the chair facilitates constructive Board relations
and the effective contribution of all non- executive directors, and
ensures that directors receive accurate, timely and clear information.
See pages 96-98.
The Board includes an appropriate combination of executive and
non- executive (and, in particular, independent non-executive)
directors, such that no one individual or small group of individuals
dominates the Board’s decision-making. There is a clear division
of responsibilities between the leadership of the Board and the
executive leadership of the company’s business.
See page 96-98.
Non-executive directors should have sufficient time to meet their
Board responsibilities. They provide constructive challenge,
strategic guidance, offer specialist advice and hold management
to account.
See page 96-98.
The Board, supported by the company secretary, ensures that the
company has the policies, processes, information, time and
resources it needs in order to function effectively and efficiently.
See page 96-98.
Section 3: Composition, succession
and evaluation
Appointments to the Board are subject to a formal, rigorous and
transparent procedure, and an effective succession plan should be
maintained for Board and senior management. Both appointments
and succession plans should be based on merit and objective
criteria and, within this context, should promote diversity of gender,
social and ethnic backgrounds, cognitive and personal strengths.
See pages 96-98.
The Board and its committees have a combination of skills,
experience and knowledge. Consideration should be given to
the length of service of the Board as a whole and membership
regularly refreshed.
See pages 90-91 and committee reports.
Annual evaluation of the Board should consider its composition,
diversity and how effectively members work together to achieve
objectives. Individual evaluation should demonstrate whether each
director continues to contribute effectively.
See page 92.
Section 4: Audit, risk and internal control
The Board should establish formal and transparent policies and
procedures to ensure the independence and effectiveness of
internal and external audit functions and satisfy itself on the
integrity of financial and narrative statements.
See pages 99-105.
The Board presents a fair, balanced and understandable
assessment of the company’s position and prospects.
See page 129.
The Board establishes procedures to manage risk, oversee the
internal control framework, and determine the nature and extent of
the principal risks the company is willing to take in order to achieve
its long-term objectives.
See pages 34-35.
Section 5: Remuneration
Remuneration policies and practices are designed to support
strategy and promote long-term sustainable success. Executive
remuneration is aligned to company purpose and values, and
clearly linked to the successful delivery of the company’s
long-term strategy.
See pages 107-124.
A formal and transparent procedure for developing policy on
executive remuneration and determining director and senior
management remuneration should be established. No director
is involved in deciding their own remuneration outcome.
See pages 107-124.
Directors exercise independent judgement and discretion when
authorising remuneration outcomes, taking account of company
and individual performance, and wider circumstances.
See pages 107-124.
88 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Statement of compliance
Nostrum fully complied throughout 2024 with the provisions of the
2018 version of the UK Corporate Governance Code except in the
following respects:
Provision 10
Provision 10 of the Code states that “Circumstances which are
likely to impair, or could appear to impair, a non-executive
director’s independence include, but are not limited to, whether
a director… has received or receives additional remuneration
from the company apart from a director’s fee, participates in the
company’s share option or a performance-related pay scheme,
or is a member of the company’s pension scheme.” Provision 10
further states that where any of these or other relevant
circumstances apply, and the board nonetheless considers
that the non-executive director is independent, a clear explanation
should be provided.
The Board notes that each of the Chair and the Non-Executive
Directors were appointed in February 2023 as part of the plan to
support the executive team following the Restructuring and enable
the Company to create significant stakeholder value by pursuing new
strategic goals. Such appointments were not made in the expectation
or anticipation of any performance-related remuneration for such
directors. Mr Cox resigned as an Independent Non-Executive Director
on 31 May 2024. Each of Stephen Whyte (as Chair), Christopher
Hopkinson and Fiona Paulus (as Independent Non-Executive
Directors) are considered by the Board to be independent (for the
purposes of the Code) notwithstanding their participation in the
Management Incentive Plan implemented in 2024.
In particular, the Board considers that such Directors are
independent in judgment and character and that such
independence is not compromised by any participation
in the MIP. In coming to such determination on independence,
the Board has also consulted with shareholders.
Provision 11
Following the departure of Mr. Cox from the Board and the
appointment of Mr. Gladun as a director in 2024, less than half the
Board excluding the chair, are non-executive directors whom the
Board considers to be Independent (i.e. 2 of 5). The Board intends
to recruit an independent director to replace Mr. Cox.
Provision 12
The Board has not to date appointed one of the independent
non-executive directors to act as the senior independent director,
to provide a sounding board for the chair and serve as an
intermediary for the other directors and shareholders. The Board
believes that there are currently effective arrangements in place
for communication between the chair and other directors and
shareholders without such appointment.
Provision 17
Following the departure of Mr. Cox from the Board, less than a
majority (i.e. 2 of 4) of the members of the Nomination and
Governance Committee are Independent Non-Executive Directors.
The Board intends to recruit an independent director to replace Mr Cox.
Provision 21
No external evaluation of the Board or any of its committees took
place in 2024. However, an informal/internal evaluation of the
Board and its committees took place in 2024.
Provision 32
The Remuneration Committee includes one member, Martin
Gudgeon, who is not an independent director. Mr. Gudgeon’s
membership in the committee was an agreed term of the
Company’s 2023 debt restructuring.
Provision 34
Provision 34 of the Code states that “Remuneration for all non-
executive directors should not include share options or other
performance-related elements”.
The Board considers that the Company will be best placed to
deliver value creating catalysts where all directors are incentivised
to deliver such milestones. The Company’s shareholders in 2024
approved amendments to the Directors’ Remuneration Policy to
allow for adoption of the MIP. The Board also notes that the
participation of non-executive directors in the MIP is limited to a
cash payment calculated by reference to the respective director’s
fees. In this manner, the non-executive directors are aligned with
senior management in looking to unlock the value of the group’s
world-class gas processing infrastructure in Kazakhstan for the
benefit of all stakeholders whilst guiding the executive team in
safeguarding the base business.
Provision 36
The Company’s LTIP has a total holding and vesting period of no
more than three years and therefore does not comply with the
requirements of Code Provision 36, which requires share awards
to be released for sale on a phased basis and be subject to a total
vesting and holding period of five years or more. As explained in
the press release released by the Company on 28 August 2019,
a copy of which has also been published on the Public Register
maintained by the Investment Association, the Board and the
Remuneration Committee believe that the current provisions of the
LTIP relating to the performance period and vesting period are
appropriate and aligned with the interests of shareholders, so that
modifying such provisions of the LTIP at this time would not be the
right course of action. The full text of the announcement is
available to read on the Company’s website.
Compliance with the Code
The UK Corporate Governance Code issued by the Financial Reporting
Council in July 2018 (the “Code”) sets out the governance principles and
provisions that applied to the Company until 31 May 2022, when the
Company’s listing category was transferred from “Premium Listing
(commercial company)” to “Standard Listing (shares)”. Following the FCA’s
reforms implemented on 29 July 2024, the Company’s listing category is
now Equity Shares (transition). A copy of the Code is available from the
Financial Reporting Council’s website at www.frc.org.uk. The aim of the
corporate governance report is to demonstrate how the principles of the
Code have been considered and applied by the Company. The UK Financial
Reporting Council promotes high-quality corporate governance and
reporting through the Code with which all companies with “Equity Shares
(Commercial Companies)” listing on the London Stock Exchange are
required to either comply in full, or explain why, and to what extent, they do
not comply. The Company intends to continue to comply with the Code or
explain any non-compliance as it would if it were in the “Equity Shares
(Commercial Companies)” listing category. This statement should be read in
conjunction with the Corporate Governance section of this report as a
whole. The headings on this page and the following page correspond to the
headings in the Code. In our commitment to maintaining high standards of
corporate governance, we acknowledge the recent revisions to the UK
Corporate Governance Code published by the Financial Reporting Council
(FRC) in January 2024. These changes, effective for accounting periods
beginning on or after 1 January 2025, introduce several key updates to
enhance transparency, accountability, and effective governance.
The main revisions include:
• A new focus on outcomes-based governance reporting, emphasising
board decisions and their impacts in the context of company strategy
and objectives.
• Enhanced requirements for internal control reporting, including a board
declaration on the effectiveness of material internal controls (effective
from 1 January 2026).
• Strengthened provisions for assessing and monitoring how the
company’s desired culture has been embedded.
• Revised approach to diversity and inclusion reporting, removing
references to specific characteristics and focusing on broader initiatives.
• Enhanced disclosure requirements for malus and clawback provisions in
remuneration reports.
• Incorporation of the Minimum Standard for audit committees into
the Code.
• Emphasis on clear explanations for any departures from the Code’s
provisions.
We intend to implement these revisions as they become effective,
ensuring our governance framework remains robust, transparent, and
supportive of our long-term success and stakeholder confidence. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 89
Nostrum fully complied throughout 2024 with the provisions of the
2018 version of the UK Corporate Governance Code except in the
following respects:
Provision 10
Provision 10 of the Code states that “Circumstances which are
likely to impair, or could appear to impair, a non-executive
director’s independence include, but are not limited to, whether
a director… has received or receives additional remuneration
from the company apart from a director’s fee, participates in the
company’s share option or a performance-related pay scheme,
or is a member of the company’s pension scheme.” Provision 10
further states that where any of these or other relevant
circumstances apply, and the board nonetheless considers
that the non-executive director is independent, a clear explanation
should be provided.
The Board notes that each of the Chair and the Non-Executive
Directors were appointed in February 2023 as part of the plan to
support the executive team following the Restructuring and enable
the Company to create significant stakeholder value by pursuing new
strategic goals. Such appointments were not made in the expectation
or anticipation of any performance-related remuneration for such
directors. Mr Cox resigned as an Independent Non-Executive Director
on 31 May 2024. Each of Stephen Whyte (as Chair), Christopher
Hopkinson and Fiona Paulus (as Independent Non-Executive
Directors) are considered by the Board to be independent (for the
purposes of the Code) notwithstanding their participation in the
Management Incentive Plan implemented in 2024.
In particular, the Board considers that such Directors are
independent in judgment and character and that such
independence is not compromised by any participation
in the MIP. In coming to such determination on independence,
the Board has also consulted with shareholders.
Provision 11
Following the departure of Mr. Cox from the Board and the
appointment of Mr. Gladun as a director in 2024, less than half the
Board excluding the chair, are non-executive directors whom the
Board considers to be Independent (i.e. 2 of 5). The Board intends
to recruit an independent director to replace Mr. Cox.
Provision 12
The Board has not to date appointed one of the independent
non-executive directors to act as the senior independent director,
to provide a sounding board for the chair and serve as an
intermediary for the other directors and shareholders. The Board
believes that there are currently effective arrangements in place
for communication between the chair and other directors and
shareholders without such appointment.
Provision 17
Following the departure of Mr. Cox from the Board, less than a
majority (i.e. 2 of 4) of the members of the Nomination and
Governance Committee are Independent Non-Executive Directors.
The Board intends to recruit an independent director to replace Mr Cox.
Provision 21
No external evaluation of the Board or any of its committees took
place in 2024. However, an informal/internal evaluation of the
Board and its committees took place in 2024.
Provision 32
The Remuneration Committee includes one member, Martin
Gudgeon, who is not an independent director. Mr. Gudgeon’s
membership in the committee was an agreed term of the
Company’s 2023 debt restructuring.
Provision 34
Provision 34 of the Code states that “Remuneration for all non-
executive directors should not include share options or other
performance-related elements”.
The Board considers that the Company will be best placed to
deliver value creating catalysts where all directors are incentivised
to deliver such milestones. The Company’s shareholders in 2024
approved amendments to the Directors’ Remuneration Policy to
allow for adoption of the MIP. The Board also notes that the
participation of non-executive directors in the MIP is limited to a
cash payment calculated by reference to the respective director’s
fees. In this manner, the non-executive directors are aligned with
senior management in looking to unlock the value of the group’s
world-class gas processing infrastructure in Kazakhstan for the
benefit of all stakeholders whilst guiding the executive team in
safeguarding the base business.
Provision 36
The Company’s LTIP has a total holding and vesting period of no
more than three years and therefore does not comply with the
requirements of Code Provision 36, which requires share awards
to be released for sale on a phased basis and be subject to a total
vesting and holding period of five years or more. As explained in
the press release released by the Company on 28 August 2019,
a copy of which has also been published on the Public Register
maintained by the Investment Association, the Board and the
Remuneration Committee believe that the current provisions of the
LTIP relating to the performance period and vesting period are
appropriate and aligned with the interests of shareholders, so that
modifying such provisions of the LTIP at this time would not be the
right course of action. The full text of the announcement is
available to read on the Company’s website.
Compliance with the Code
The UK Corporate Governance Code issued by the Financial Reporting
Council in July 2018 (the “Code”) sets out the governance principles and
provisions that applied to the Company until 31 May 2022, when the
Company’s listing category was transferred from “Premium Listing
(commercial company)” to “Standard Listing (shares)”. Following the FCA’s
reforms implemented on 29 July 2024, the Company’s listing category is
now Equity Shares (transition). A copy of the Code is available from the
Financial Reporting Council’s website at www.frc.org.uk. The aim of the
corporate governance report is to demonstrate how the principles of the
Code have been considered and applied by the Company. The UK Financial
Reporting Council promotes high-quality corporate governance and
reporting through the Code with which all companies with “Equity Shares
(Commercial Companies)” listing on the London Stock Exchange are
required to either comply in full, or explain why, and to what extent, they do
not comply. The Company intends to continue to comply with the Code or
explain any non-compliance as it would if it were in the “Equity Shares
(Commercial Companies)” listing category. This statement should be read in
conjunction with the Corporate Governance section of this report as a
whole. The headings on this page and the following page correspond to the
headings in the Code. In our commitment to maintaining high standards of
corporate governance, we acknowledge the recent revisions to the UK
Corporate Governance Code published by the Financial Reporting Council
(FRC) in January 2024. These changes, effective for accounting periods
beginning on or after 1 January 2025, introduce several key updates to
enhance transparency, accountability, and effective governance.
The main revisions include:
• A new focus on outcomes-based governance reporting, emphasising
board decisions and their impacts in the context of company strategy
and objectives.
• Enhanced requirements for internal control reporting, including a board
declaration on the effectiveness of material internal controls (effective
from 1 January 2026).
• Strengthened provisions for assessing and monitoring how the
company’s desired culture has been embedded.
• Revised approach to diversity and inclusion reporting, removing
references to specific characteristics and focusing on broader initiatives.
• Enhanced disclosure requirements for malus and clawback provisions in
remuneration reports.
• Incorporation of the Minimum Standard for audit committees into
the Code.
• Emphasis on clear explanations for any departures from the Code’s
provisions.
We intend to implement these revisions as they become effective,
ensuring our governance framework remains robust, transparent, and
supportive of our long-term success and stakeholder confidence. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 89
Board of Directors
BOARD OF DIRECTORS
N S
Viktor Gladun
Non-Executive Director
Date of appointment: 15 August 2024
Other current appointments:
• Non-Executive Director of Bank
Avangard JSC in Ukraine.
Skills and experience:
• Executive professional with extensive
experience in the energy sector.
• CEO and executive director on the board
of directors of JKX Oil and Gas plc, a
UK-headquartered hydrocarbon
exploration company, from 2019 through
2022, acting CEO of JKX during 2017-
2018, CEO of JKX’s Ukrainian subsidiary
Poltava Petroleum Company JV from
2016-2022.
• Executive financial roles at DTEK & NIKO,
a senior auditor position at TNK-BP and a
tax consultant position at Arthur
Andersen.
Fiona Paulus
Independent Non-Executive Director
Date of appointment: 14 February 2023
Other current appointments:
• Senior Adviser in the Metals & Mining
business at Gleacher Shacklock LLP.
• Non-Executive Director at Interpipe
Group and JSW Steel Limited.
Skills and experience:
• 37 years of investment banking
experience.
• She has held senior roles at leading
international investment banks. These
include Head of International Investment
Banking at CIBC, EMEA Head of Private
Equity & Infrastructure Funds at Royal
Bank of Scotland, Global Head of Energy
and Resources at ABN AMRO Bank, and
various senior roles at Societe Generale,
JPMorgan & Citigroup in the UK, Europe,
Australia, and Latin America.
Stephen Whyte
Chairman and Non-Executive Director
Date of appointment: 14 February 2023
Other current appointments:
• None.
Skills and experience:
• 35 years of total industry experience at
Shell, BG and Galp.
• Seasoned FTSE and AIM Chairman and
Non-Executive Director in the global
energy sector with direct experience in
Kazakhstan.
• Chairman at Genel Energy (2017-2019).
• Chairman at Sound Energy.
• Non-Executive Director at Echo Energy.
• Non-Executive Director at JSC National
Company KazMunaiGas.
A R N
Board committees
A Audit Committee
N Nomination and Governance
Committee
S Strategy Committee
R Remuneration Committee
Chairman/Chairwoman
Former members of the
Board of Directors
Chris Cox
Independent Non-Executive Director
Term of service: from 14 February 2023
to 31 May 2024
Other current appointments: Director
and the interim CEO of Capricorn
Energy PLC
Skills and experience:
• 40 years of experience in the global oil
and gas upstream sector.
• Having held various senior roles with BG
Group, Amerada Hess, and Chevron
throughout his career, Chris served
most recently as CEO of Spirit Energy
and Managing Director of Centrica Plc.
GRI 2-9
90 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
BOARD OF DIRECTORS
N S
Viktor Gladun
Non-Executive Director
Date of appointment: 15 August 2024
Other current appointments:
• Non-Executive Director of Bank
Avangard JSC in Ukraine.
Skills and experience:
• Executive professional with extensive
experience in the energy sector.
• CEO and executive director on the board
of directors of JKX Oil and Gas plc, a
UK-headquartered hydrocarbon
exploration company, from 2019 through
2022, acting CEO of JKX during 2017-
2018, CEO of JKX’s Ukrainian subsidiary
Poltava Petroleum Company JV from
2016-2022.
• Executive financial roles at DTEK & NIKO,
a senior auditor position at TNK-BP and a
tax consultant position at Arthur
Andersen.
Fiona Paulus
Independent Non-Executive Director
Date of appointment: 14 February 2023
Other current appointments:
• Senior Adviser in the Metals & Mining
business at Gleacher Shacklock LLP.
• Non-Executive Director at Interpipe
Group and JSW Steel Limited.
Skills and experience:
• 37 years of investment banking
experience.
• She has held senior roles at leading
international investment banks. These
include Head of International Investment
Banking at CIBC, EMEA Head of Private
Equity & Infrastructure Funds at Royal
Bank of Scotland, Global Head of Energy
and Resources at ABN AMRO Bank, and
various senior roles at Societe Generale,
JPMorgan & Citigroup in the UK, Europe,
Australia, and Latin America.
Stephen Whyte
Chairman and Non-Executive Director
Date of appointment: 14 February 2023
Other current appointments:
• None.
Skills and experience:
• 35 years of total industry experience at
Shell, BG and Galp.
• Seasoned FTSE and AIM Chairman and
Non-Executive Director in the global
energy sector with direct experience in
Kazakhstan.
• Chairman at Genel Energy (2017-2019).
• Chairman at Sound Energy.
• Non-Executive Director at Echo Energy.
• Non-Executive Director at JSC National
Company KazMunaiGas.
A R N
Board committees
A Audit Committee
N Nomination and Governance
Committee
S Strategy Committee
R Remuneration Committee
Chairman/Chairwoman
Former members of the
Board of Directors
Chris Cox
Independent Non-Executive Director
Term of service: from 14 February 2023
to 31 May 2024
Other current appointments: Director
and the interim CEO of Capricorn
Energy PLC
Skills and experience:
• 40 years of experience in the global oil
and gas upstream sector.
• Having held various senior roles with BG
Group, Amerada Hess, and Chevron
throughout his career, Chris served
most recently as CEO of Spirit Energy
and Managing Director of Centrica Plc.
GRI 2-9
90 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
A
S
S
N
R
Martin Gudgeon
Non-Executive Warrant Director
Date of appointment: 14 February 2023
Other current appointments:
• Partner and Chairman of the EMEA & Asia
Restructuring and Special Situations
Group (“RSSG”) at PJT Partners.
• Member of the firm’s RSSG Operating
Committee.
Skills and experience:
• 35 years of industry experience.
• Senior Managing Director at Blackstone
for eight years.
• Chief Executive and Head of
Restructuring at Close Brothers
Corporate Finance.
• Non-Executive Director at Genel Energy.
Chris Hopkinson
Independent Non-Executive Director
Date of appointment: 14 February 2023
Other current appointments:
• Non-executive Chairman of Enwell Energy.
• Interim Executive Chairman of IGas Energy.
• Founder of Astra Resources Management
and Antelopus Energy.
Skills and experience:
• 35 years of experience in the global oil
and gas and energy sectors.
• Technical and management roles with
Yukos and Lukoil Overseas.
• Chief Executive Officer of Imperial
Energy Group.
• Vice-President Western Siberia for
TNK-BP.
• Senior Vice-President North Africa for BG
Group.
• Chief Executive Officer of International
Petroleum Limited.
• Chief Operating Officer for JSC National
Company KazMunaiGas.
Arfan Khan
Chief Executive Officer
Date of appointment: 26 January 2021
Other current appointments: None
Skills and experience:
• 35 years of total industry experience.
• From January 2020 until joining the
Company, President of Stratum Energy
Group (Romania).
• From April 2014 to December 2019, COO
of Amni International Petroleum (Nigeria).
• From April 2012 to March 2014,
Petroleum Engineering Director at
Maersk Oil (Angola).
• From August 2002 to March 2012, Chief
Production Engineer at Shell (Nigeria &
Kazakhstan).
• Pre-2002: 12 years with ExxonMobil
Gulf-of-Mexico Reservoir Development
(US).
• Member of the Society of Petroleum
Engineers.
• Holds a Bachelor of Science degree from
Texas A&M University and an MBA from
Tulane University.
R N STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 91
Martin Gudgeon
Non-Executive Warrant Director
Date of appointment: 14 February 2023
Other current appointments:
• Partner and Chairman of the EMEA & Asia
Restructuring and Special Situations
Group (“RSSG”) at PJT Partners.
• Member of the firm’s RSSG Operating
Committee.
Skills and experience:
• 35 years of industry experience.
• Senior Managing Director at Blackstone
for eight years.
• Chief Executive and Head of
Restructuring at Close Brothers
Corporate Finance.
• Non-Executive Director at Genel Energy.
Chris Hopkinson
Independent Non-Executive Director
Date of appointment: 14 February 2023
Other current appointments:
• Non-executive Chairman of Enwell Energy.
• Interim Executive Chairman of IGas Energy.
• Founder of Astra Resources Management
and Antelopus Energy.
Skills and experience:
• 35 years of experience in the global oil
and gas and energy sectors.
• Technical and management roles with
Yukos and Lukoil Overseas.
• Chief Executive Officer of Imperial
Energy Group.
• Vice-President Western Siberia for
TNK-BP.
• Senior Vice-President North Africa for BG
Group.
• Chief Executive Officer of International
Petroleum Limited.
• Chief Operating Officer for JSC National
Company KazMunaiGas.
Arfan Khan
Chief Executive Officer
Date of appointment: 26 January 2021
Other current appointments: None
Skills and experience:
• 35 years of total industry experience.
• From January 2020 until joining the
Company, President of Stratum Energy
Group (Romania).
• From April 2014 to December 2019, COO
of Amni International Petroleum (Nigeria).
• From April 2012 to March 2014,
Petroleum Engineering Director at
Maersk Oil (Angola).
• From August 2002 to March 2012, Chief
Production Engineer at Shell (Nigeria &
Kazakhstan).
• Pre-2002: 12 years with ExxonMobil
Gulf-of-Mexico Reservoir Development
(US).
• Member of the Society of Petroleum
Engineers.
• Holds a Bachelor of Science degree from
Texas A&M University and an MBA from
Tulane University.
R N STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 91
BOARD OF DIRECTORS
Board of Directors continued
Board activities and achievements during 2024
During the financial year, the Board held 9 meetings. The Board and Committee agendas were shaped to ensure that discussion was
focused on the Group’s key strategies and monitoring activities, as well as reviews of significant issues arising during the year. The Group’s
ongoing financial and strategic performance is reviewed at every meeting, and the Chief Executive Officer and the Chief Financial Officer
comment on production, share price performance, the market and shareholder feedback.
The table below gives the highlights of how the Board and its committees spent their time during the 2024 financial year but should not
be regarded as an exhaustive list. More information regarding the Group’s strategic objectives and focus during 2024 can be found in the
Strategic Report on pages 1-86 and the more detailed activities of each Board committee are located in their relevant report.
Strategy and
business focus
• Discussions around the strategic options available to the Group to monetise the infrastructure through processing
third-party volumes and acquisition of nearby, stranded assets such as Stepnoy Leopard.
• Approved a targeted well workover and intervention programme.
Risk • Review of all interim financial results announcements and the 2023 Annual Report and Accounts.
• Consideration of the Group’s going concern assessment, viability statement and risk appetite for the coming year.
• Reviewed the Group’s liquidity forecast at each board meeting.
Governance • Received reports from Board committees.
• Consideration of the UK Corporate Governance Code and other regulatory requirements for the Annual Report.
• Review of the Notice of AGM and matters proposed for shareholder approval.
• Reviewed and approved new and updated Group policies.
People and
culture
• Performance assessment
• Individual KPIs
Board evaluation
An internal/informal board self-evaluation was carried out in 2024.
Director induction and training
Each individual joining the Board receives a full, formal induction package with materials on the Group’s business and operational,
financial and legal matters. They also meet with members of the Board in order to obtain a good understanding of the challenges and
opportunities faced by the Group. The Directors are given the opportunity to discuss their training and professional development needs
at every Board meeting and on an ad-hoc basis as required, and to make recommendations to the Chairman regarding topics on which
they would like to receive training. In addition to training organised by the Company, the Directors regularly attend training events
organised by third parties and the Company actively encourages Directors to attend such events.
92 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Board of Directors continued
Board activities and achievements during 2024
During the financial year, the Board held 9 meetings. The Board and Committee agendas were shaped to ensure that discussion was
focused on the Group’s key strategies and monitoring activities, as well as reviews of significant issues arising during the year. The Group’s
ongoing financial and strategic performance is reviewed at every meeting, and the Chief Executive Officer and the Chief Financial Officer
comment on production, share price performance, the market and shareholder feedback.
The table below gives the highlights of how the Board and its committees spent their time during the 2024 financial year but should not
be regarded as an exhaustive list. More information regarding the Group’s strategic objectives and focus during 2024 can be found in the
Strategic Report on pages 1-86 and the more detailed activities of each Board committee are located in their relevant report.
Strategy and
business focus
• Discussions around the strategic options available to the Group to monetise the infrastructure through processing
third-party volumes and acquisition of nearby, stranded assets such as Stepnoy Leopard.
• Approved a targeted well workover and intervention programme.
Risk • Review of all interim financial results announcements and the 2023 Annual Report and Accounts.
• Consideration of the Group’s going concern assessment, viability statement and risk appetite for the coming year.
• Reviewed the Group’s liquidity forecast at each board meeting.
Governance • Received reports from Board committees.
• Consideration of the UK Corporate Governance Code and other regulatory requirements for the Annual Report.
• Review of the Notice of AGM and matters proposed for shareholder approval.
• Reviewed and approved new and updated Group policies.
People and
culture
• Performance assessment
• Individual KPIs
Board evaluation
An internal/informal board self-evaluation was carried out in 2024.
Director induction and training
Each individual joining the Board receives a full, formal induction package with materials on the Group’s business and operational,
financial and legal matters. They also meet with members of the Board in order to obtain a good understanding of the challenges and
opportunities faced by the Group. The Directors are given the opportunity to discuss their training and professional development needs
at every Board meeting and on an ad-hoc basis as required, and to make recommendations to the Chairman regarding topics on which
they would like to receive training. In addition to training organised by the Company, the Directors regularly attend training events
organised by third parties and the Company actively encourages Directors to attend such events.
92 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Attendance at meetings of the Board and its Committees in 2024
The following table illustrates the attendance of Directors at Board and committee meetings (as relevant) throughout the year.
Board Audit Committee Remuneration Committee
Nomination and
Governance Committee Strategy Committee 1
A B A B A B A B A B
Executive Directors
Arfan Khan 9 9 4 4
Non-Executive Directors
Stephen Whyte 9 9 4 4
Chris Cox 6 6 4 4 2 2 3 3
Chris Hopkinson 9 8 7 5 2 2 3 3
Martin Gudgeon 9 9 2 1 3 3 4 4
Fiona Paulus 9 7 7 7 2 1 3 3
Viktor Gladun 2 2
A = Total number of meetings the Director was eligible to attend.
B = Total number of meetings the Director did attend.
1. The Strategy Committee also met on each date when there was a scheduled Board meeting with strategy as an agenda point.
The key responsibilities of the Strategy
Committee during 2024 were to:
• Assess the corporate and strategic performance of the
Company and its subsidiaries (the “Group”) in its broadest
sense, and forming a wide view on the adequacy of progress
made in achieving strategic objectives and outcomes, and of
the systems to measure, monitor and deliver on them;
• Support the Board and Senior Management in formulating the
overall strategy for the Company, with particular emphasis on
horizon scanning, priorities, activities and outcomes;
• Consider the strategic development opportunities for the
Group, including by way of acquisitions, disposals, joint
ventures, commercial co-operations or otherwise;
• Consider options for shareholder investment or exit.
More details on key responsibilities can be found in the
Committee’s terms of reference, which are available on the
Group’s website at www.nog.co.uk. The terms of reference of
the Committee were approved at a meeting of the Board on
26 April 2023.
Membership from 24 February 2023
Name
Membership
start date
Membership
end date
Stephen Whyte
(Committee Chair from
24 February 2023)
24 February
2023
Martin Gudgeon 24 February
2023
Arfan Khan 24 February
2023
Committee meetings
The Strategy Committee met four times during 2024. The
attendance of each Committee member at Committee meetings
held during 2024 is shown on page 93. As a separate agenda
item, the Committee reports to the Board at each Board meeting
on any activities of the Committee since the last Board meeting.
The principal agenda items were as follows:
• Investor relations.
• Financing.
• Business development.
Only members of the Committee have the right to attend
Committee meetings.
However, other individuals may be invited to attend all or part
of any meeting, as and when appropriate. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 93
The following table illustrates the attendance of Directors at Board and committee meetings (as relevant) throughout the year.
Board Audit Committee Remuneration Committee
Nomination and
Governance Committee Strategy Committee 1
A B A B A B A B A B
Executive Directors
Arfan Khan 9 9 4 4
Non-Executive Directors
Stephen Whyte 9 9 4 4
Chris Cox 6 6 4 4 2 2 3 3
Chris Hopkinson 9 8 7 5 2 2 3 3
Martin Gudgeon 9 9 2 1 3 3 4 4
Fiona Paulus 9 7 7 7 2 1 3 3
Viktor Gladun 2 2
A = Total number of meetings the Director was eligible to attend.
B = Total number of meetings the Director did attend.
1. The Strategy Committee also met on each date when there was a scheduled Board meeting with strategy as an agenda point.
The key responsibilities of the Strategy
Committee during 2024 were to:
• Assess the corporate and strategic performance of the
Company and its subsidiaries (the “Group”) in its broadest
sense, and forming a wide view on the adequacy of progress
made in achieving strategic objectives and outcomes, and of
the systems to measure, monitor and deliver on them;
• Support the Board and Senior Management in formulating the
overall strategy for the Company, with particular emphasis on
horizon scanning, priorities, activities and outcomes;
• Consider the strategic development opportunities for the
Group, including by way of acquisitions, disposals, joint
ventures, commercial co-operations or otherwise;
• Consider options for shareholder investment or exit.
More details on key responsibilities can be found in the
Committee’s terms of reference, which are available on the
Group’s website at www.nog.co.uk. The terms of reference of
the Committee were approved at a meeting of the Board on
26 April 2023.
Membership from 24 February 2023
Name
Membership
start date
Membership
end date
Stephen Whyte
(Committee Chair from
24 February 2023)
24 February
2023
Martin Gudgeon 24 February
2023
Arfan Khan 24 February
2023
Committee meetings
The Strategy Committee met four times during 2024. The
attendance of each Committee member at Committee meetings
held during 2024 is shown on page 93. As a separate agenda
item, the Committee reports to the Board at each Board meeting
on any activities of the Committee since the last Board meeting.
The principal agenda items were as follows:
• Investor relations.
• Financing.
• Business development.
Only members of the Committee have the right to attend
Committee meetings.
However, other individuals may be invited to attend all or part
of any meeting, as and when appropriate. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 93
Senior management team
SENIOR MANAGEMENT TEAM
Arfan Khan
Chief Executive Officer
• (See biography of Arfan Khan on
page 91).
Thomas Hartnett
Chief Legal Officer & Company Secretary
and Acting Head of Human Resources
Skills and experience:
• Appointed as General Counsel of the Nostrum
Group on 5 September 2008, as Company
Secretary of Nostrum Oil & Gas PLC on 3
October 2013 and as Acting Head of Human
Resources on 13 January 2020.
• More than 30 years of post-qualification
experience, including 16 years with the law firm
White & Case LLP, where he was a Partner and
specialised in cross- border corporate and M&A
transactions based in the firm’s New York,
Istanbul, London, Brussels and Bangkok offices.
• Served as Senior Corporate Counsel in the
EMEA headquarters of Intercontinental Hotels
Group from 1996-1998.
• Holds a Bachelor of Arts degree in
Comparative and Developmental Politics from
the University of Pennsylvania and a Juris
Doctor degree from New York University
School of Law.
• Member of the New York Bar and the
Association of International Energy
Negotiators.
Abi Zivs 1
Director of Marketing
Skills and experience:
• Appointed as Head of Marketing on
4 February 2022.
• 2017-2022 held position of LPG and sulphur
sales manager with Zhaikmunai LLP.
• More than 29 years’ experience in shipping
and selling hydrocarbons in Latvia, Kazakhstan
and Turkey.
• Graduate of Latvian State University, Faculty of
Physics and Mathematics.
Petro Mychalkiw
Chief Financial Officer
Skills and experience:
• Appointed as Chief Financial Officer of the
Nostrum Group on 21 August 2023.
• 30 years of post-qualification experience, with
almost 20 years of senior finance experience
within the natural resources industry, including
both oil and gas businesses and mining/metals
companies.
• Extensive public company experience and
first-hand experience of E&P operations in the
Republic of Kazakhstan.
• Previous roles in O&G and emerging markets
include serving as Group CFO at I-Pulse Inc,
High Power Petroleum LLC, Equus Petroleum
Plc and Orsu Metals Corporation and serving
as Regional Finance Director and Group Head
of Corporate Finance at Oriel Resources Plc.
• Holds a Bachelor of Arts degree in Economics
from the University of Manchester.
• Member of the Institute of Chartered
Accountants in England & Wales.
Robert Tinkhof
Chief Operating Officer
Skills and experience:
• Appointed as Chief Operating Officer of the
Group on 12 February 2019.
• •36 years of experience in the oil and gas
industry, mainly Royal Dutch Shell with
assignments in the Netherlands, UK, Syria, Iran,
Egypt, Dubai, Iraq and Russia.
• Before taking the position as Chief Operating
Officer, held several senior management
positions since 2000 as General Manager Wells
in Shell and Managing Director at the Scientific
Research Institute of KMG for Production and
Technology in Kazakhstan.
Askhat Seitkazin
General Director of Zhaikmunai LLP
Skills and experience:
• Appointed as General Director of Zhaikmunai
LLP on 14 November 2024.
• Appointed as Deputy General Director of
Zhaikmunai LLP in March 2022.
• 2013-2015 held position of PR manager at
Zhaikmunai LLP.
• 2015-2022 Head of PR department
Zhaikmunai LLP.
• Graduate of the Institute of International
Law&Economics (Moscow) with a specialisation
in Financial and Enterprise Management
1. Abi Zivs’s tenure with the company concluded effective March 2, 2025.
94 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
SENIOR MANAGEMENT TEAM
Arfan Khan
Chief Executive Officer
• (See biography of Arfan Khan on
page 91).
Thomas Hartnett
Chief Legal Officer & Company Secretary
and Acting Head of Human Resources
Skills and experience:
• Appointed as General Counsel of the Nostrum
Group on 5 September 2008, as Company
Secretary of Nostrum Oil & Gas PLC on 3
October 2013 and as Acting Head of Human
Resources on 13 January 2020.
• More than 30 years of post-qualification
experience, including 16 years with the law firm
White & Case LLP, where he was a Partner and
specialised in cross- border corporate and M&A
transactions based in the firm’s New York,
Istanbul, London, Brussels and Bangkok offices.
• Served as Senior Corporate Counsel in the
EMEA headquarters of Intercontinental Hotels
Group from 1996-1998.
• Holds a Bachelor of Arts degree in
Comparative and Developmental Politics from
the University of Pennsylvania and a Juris
Doctor degree from New York University
School of Law.
• Member of the New York Bar and the
Association of International Energy
Negotiators.
Abi Zivs 1
Director of Marketing
Skills and experience:
• Appointed as Head of Marketing on
4 February 2022.
• 2017-2022 held position of LPG and sulphur
sales manager with Zhaikmunai LLP.
• More than 29 years’ experience in shipping
and selling hydrocarbons in Latvia, Kazakhstan
and Turkey.
• Graduate of Latvian State University, Faculty of
Physics and Mathematics.
Petro Mychalkiw
Chief Financial Officer
Skills and experience:
• Appointed as Chief Financial Officer of the
Nostrum Group on 21 August 2023.
• 30 years of post-qualification experience, with
almost 20 years of senior finance experience
within the natural resources industry, including
both oil and gas businesses and mining/metals
companies.
• Extensive public company experience and
first-hand experience of E&P operations in the
Republic of Kazakhstan.
• Previous roles in O&G and emerging markets
include serving as Group CFO at I-Pulse Inc,
High Power Petroleum LLC, Equus Petroleum
Plc and Orsu Metals Corporation and serving
as Regional Finance Director and Group Head
of Corporate Finance at Oriel Resources Plc.
• Holds a Bachelor of Arts degree in Economics
from the University of Manchester.
• Member of the Institute of Chartered
Accountants in England & Wales.
Robert Tinkhof
Chief Operating Officer
Skills and experience:
• Appointed as Chief Operating Officer of the
Group on 12 February 2019.
• •36 years of experience in the oil and gas
industry, mainly Royal Dutch Shell with
assignments in the Netherlands, UK, Syria, Iran,
Egypt, Dubai, Iraq and Russia.
• Before taking the position as Chief Operating
Officer, held several senior management
positions since 2000 as General Manager Wells
in Shell and Managing Director at the Scientific
Research Institute of KMG for Production and
Technology in Kazakhstan.
Askhat Seitkazin
General Director of Zhaikmunai LLP
Skills and experience:
• Appointed as General Director of Zhaikmunai
LLP on 14 November 2024.
• Appointed as Deputy General Director of
Zhaikmunai LLP in March 2022.
• 2013-2015 held position of PR manager at
Zhaikmunai LLP.
• 2015-2022 Head of PR department
Zhaikmunai LLP.
• Graduate of the Institute of International
Law&Economics (Moscow) with a specialisation
in Financial and Enterprise Management
1. Abi Zivs’s tenure with the company concluded effective March 2, 2025.
94 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Daulet Tulegenov
Group Head of QHSE
Skills and experience:
• Appointed as Group head of QHSE in October
2018.
• 2017-2018 HSE Transformation team leader at
KazMunaiGas JSC.
• 2010-2016 HSE manager at Lukoil.
• 2009-2010 Senior HSE expert at KazMunaiTeniz
JSC.
• 2006-2009 Senior HSE specialist at LUKOIL.
• 2003-2006 Safety specialist at Tengizchevroil.
• Over 20 years’ experience in E&P oil and gas
assets (onshore and offshore).
• Took part in major international projects at
Chevron, Shell, Lukoil, Tengizchevroil and
CNPC companies in Kazakhstan.
• Graduate of the Tyumen State Oil & Gas
University, Russian Federation.
Zhomart Darkeyev
Adviser to the CEO
Skills and experience:
• Appointed as General Director of Zhaikmunai
LLP on 14 November 2016.
• At Zhaikmunai LLP, Mr Darkeyev has also held
the positions of Administrative Director,
Assistant General Director, Chief
Administrative Manager, Engineer Manager
and Deputy General Manager.
• Before Zhaikmunai LLP, Mr Darkeyev worked
for Derkl Oil & Gas drilling as assistant driller
and for Kazakhgas State Holding Company as a
leading reservoir engineer.
• Graduate of Furmanov Secondary School with
further education completed at the Ivano-
Frankivsk Institute of Oil & Gas with a
specialisation in drilling of oil and gas wells.
Gulnara Shadeyeva
Head of HR in the RoK
Skills and experience:
• Appointed as Head of HR of Zhaikmunai LLP in
October 2013.
• 23 years of experience in the oil and gas
industry in several senior positions in Human
Resources in KIOS, Baker Hughes Services Inc.,
AMEC, Exterran, Bolashak- Atyrau.
• Holds Bachelor’s degrees in Automatics
Engineering from the Gubkin Russian State
University of Oil & Gas (Moscow), in Accounting
from the West Kazakhstan State University and
Master’s degrees in Human Resources
Management from the RANEPA (Moscow) and
in International Human Resource Management
from Kingston University in the UK.
Melody Pinet
Head of HR outside the RoK
Skills and experience:
• Appointed as Nostrum’s Head of HR outside
the RoK in May 2018.
• 2016-2018 HR Manager at Bee Engineering in
Belgium.
• 2015-2016 HR consultant at Tempo-Team’
Randstad company in Belgium.
• 2013-2014 Fieldworker at Terres Rouges in
Senegal.
• Holds two Bachelor’s degrees from the
Université catholique de Louvain (one in
Political Science and Government and one in
Psychology).
• Holds Master’s degree from the Université
catholique de Louvain in International relations
and the management of diplomatic conflicts.
Natalya Dibe
Head of ESG
Skills and experience:
• Head of Budgeting and Control at Zhaikmunai
LLP.
• More than 19 years of post-qualification
experience, including 9 years with one of the
largest banks in CIS – Kazkom (currently Halyk).
• Holds an Executive Master’s degree, and an
MBA degree from the Russian Presidential
Academy; a Bachelor’s degree in Accounting
and Audit, and a Bachelor’s degree in Oriental
Studies from the Eurasian Academy.
• Certified in Project Management; and in ESG
from Global Reporting Academy (GRI),
University of Pennsylvania, and the London
Reporting Academy.
• Participant and semifinalist of the management
competition Leaders of Russia in international
track in 2020-2023. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 95
Group Head of QHSE
Skills and experience:
• Appointed as Group head of QHSE in October
2018.
• 2017-2018 HSE Transformation team leader at
KazMunaiGas JSC.
• 2010-2016 HSE manager at Lukoil.
• 2009-2010 Senior HSE expert at KazMunaiTeniz
JSC.
• 2006-2009 Senior HSE specialist at LUKOIL.
• 2003-2006 Safety specialist at Tengizchevroil.
• Over 20 years’ experience in E&P oil and gas
assets (onshore and offshore).
• Took part in major international projects at
Chevron, Shell, Lukoil, Tengizchevroil and
CNPC companies in Kazakhstan.
• Graduate of the Tyumen State Oil & Gas
University, Russian Federation.
Zhomart Darkeyev
Adviser to the CEO
Skills and experience:
• Appointed as General Director of Zhaikmunai
LLP on 14 November 2016.
• At Zhaikmunai LLP, Mr Darkeyev has also held
the positions of Administrative Director,
Assistant General Director, Chief
Administrative Manager, Engineer Manager
and Deputy General Manager.
• Before Zhaikmunai LLP, Mr Darkeyev worked
for Derkl Oil & Gas drilling as assistant driller
and for Kazakhgas State Holding Company as a
leading reservoir engineer.
• Graduate of Furmanov Secondary School with
further education completed at the Ivano-
Frankivsk Institute of Oil & Gas with a
specialisation in drilling of oil and gas wells.
Gulnara Shadeyeva
Head of HR in the RoK
Skills and experience:
• Appointed as Head of HR of Zhaikmunai LLP in
October 2013.
• 23 years of experience in the oil and gas
industry in several senior positions in Human
Resources in KIOS, Baker Hughes Services Inc.,
AMEC, Exterran, Bolashak- Atyrau.
• Holds Bachelor’s degrees in Automatics
Engineering from the Gubkin Russian State
University of Oil & Gas (Moscow), in Accounting
from the West Kazakhstan State University and
Master’s degrees in Human Resources
Management from the RANEPA (Moscow) and
in International Human Resource Management
from Kingston University in the UK.
Melody Pinet
Head of HR outside the RoK
Skills and experience:
• Appointed as Nostrum’s Head of HR outside
the RoK in May 2018.
• 2016-2018 HR Manager at Bee Engineering in
Belgium.
• 2015-2016 HR consultant at Tempo-Team’
Randstad company in Belgium.
• 2013-2014 Fieldworker at Terres Rouges in
Senegal.
• Holds two Bachelor’s degrees from the
Université catholique de Louvain (one in
Political Science and Government and one in
Psychology).
• Holds Master’s degree from the Université
catholique de Louvain in International relations
and the management of diplomatic conflicts.
Natalya Dibe
Head of ESG
Skills and experience:
• Head of Budgeting and Control at Zhaikmunai
LLP.
• More than 19 years of post-qualification
experience, including 9 years with one of the
largest banks in CIS – Kazkom (currently Halyk).
• Holds an Executive Master’s degree, and an
MBA degree from the Russian Presidential
Academy; a Bachelor’s degree in Accounting
and Audit, and a Bachelor’s degree in Oriental
Studies from the Eurasian Academy.
• Certified in Project Management; and in ESG
from Global Reporting Academy (GRI),
University of Pennsylvania, and the London
Reporting Academy.
• Participant and semifinalist of the management
competition Leaders of Russia in international
track in 2020-2023. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 95
Our governance framework
as at 31 December 2024
GOVERNANCE FRAMEWORK GRI 2-9,
2-11
Finance
Responsible for supporting the Group and the Board in matters relating
to: (i) corporate finance (ii) investor relations (iii) economic analysis (iv)
public relations (v) external communications (vi) accounting and reporting
(vii) tax (viii) budgeting and control (ix) insurance (x) treasury and cash
management (xi) liaison with internal audit (xii) risk management (xiii) ICT
(xiv) company administration (accounting and tax matters) and (xv) capital
markets analysis.
Operations
Responsible for supporting the Group and the Board in matters relating
to: (i) production engineering and reservoir management (ii) drilling and
workover management production (iii) production (iv) engineering and
construction field operations (v) relations with governmental authorities
(vi) procurement (vii) security and (viii) administration.
Head: Petro Mychalkiw Head: Robert Tinkhof
Legal
Responsible for supporting the
Group and the Board in matters
relating to: (i) all legal matters
(ii) compliance (iii) corporate
governance (iv) company
administration (legal and
governance matters).
Sales and marketing
Responsible for supporting the
Group and the Board in matters
relating to: (i) sales of oil and gas
products (ii) marketing and
(iii) logistics and transportation.
QHSE
Responsible for supporting the
Group and the Board in matters
relating to: (i) product quality
(ii) personnel and community
health and safety and (iii)
environmental protection.
Human resources
Responsible for supporting the
Group and the Board in matters
relating to: (i) personnel and
workforce matters generally
(ii) training and (iii) remuneration.
Head: Thomas Hartnett Head: Abi Zivs Head: Daulet Tulegenov Acting Head: Thomas Hartnett
Audit Committee
Responsible for oversight
of the Group’s financial
reporting processes.
Scrutinises the work of the
external auditor and
regularly reviews the risk
management framework
and the work of internal
audit.
Nomination and
Governance Committee
Governance Committee
Reviews the structure, size
and composition of the
Board and its committees
and makes recommendations
to the Board accordingly,
and leads the process for
new Board appointments.
Remuneration Committee
Reviews and recommends
to the Board the executive
Remuneration Policy
and determines the
remuneration packages
of the Directors.
Strategy Committee
Assists the Board to
fulfil its responsibilities
in relation to strategy.
Company Secretary
Responsible for advising the
Board, through the Chairman,
on all governance matters
and for ensuring that Board
procedures are complied
with and there is a good flow
of information between the
Board and its committees.
The appointment of the
Company Secretary is a
matter reserved to the
Board as a whole.
Chairwoman:
Fiona Paulus
See page 99 for
Committee Report.
Acting Chairman:
Martin Gudgeon
See page 106 for
Committee Report.
Chairman:
Chris Hopkinson
See page 107 for
Committee Report.
Chairman:
Stephen Whyte
Company Secretary:
Thomas Hartnett
The Board
The Board is chaired by Stephen Whyte as from 14 February 2023. The Board is collectively responsible to stakeholders for the long-term success of the
Group. This is achieved by reviewing trading performance, budgets and funding, setting and monitoring the Group’s strategic objectives, reviewing
acquisition opportunities and engaging with stakeholders. The Board is supported by a number of committees whose terms of reference (TORs) are
available on our website.
Chairman
Responsible for leadership
of the Board and for ensuring
its effectiveness in all aspects
of its role.
Chief Executive Officer
Responsible for the successful
planning and execution of the
objectives and strategies agreed
by the Board.
Independent
Non-Executive Directors 1
Responsible for bringing an external
perspective, sound judgement and
objectivity to the Board’s decision-
making. Scrutinise management
performance and constructively
challenge strategy.
Non-Executive Warrant Director
Responsible for giving or
withholding approval to certain
matters set out in the warrant
instrument.
Senior Management Team
The Senior management team supports the Chief Executive Officer in making important decisions regarding the overall management of the Group in
respect of all Group matters that are not reserved for the Board and in ensuring that operational activities and performance are aligned with the
overarching strategy of the Group. Each member of the team reports directly to the Chief Executive Officer, who then directly reports to the Board.
The functional responsibilities of the senior management team members in their respective areas include but are not limited to implementing Chief
Executive Officer and Board decisions, allocating resources, managing risk, maximising efficiencies, guiding and developing employees, reviewing
performance and supporting cross-functional integration.
1. Since 24 February 2023, no Director has been appointed as Senior Independent Director.
96 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
as at 31 December 2024
GOVERNANCE FRAMEWORK GRI 2-9,
2-11
Finance
Responsible for supporting the Group and the Board in matters relating
to: (i) corporate finance (ii) investor relations (iii) economic analysis (iv)
public relations (v) external communications (vi) accounting and reporting
(vii) tax (viii) budgeting and control (ix) insurance (x) treasury and cash
management (xi) liaison with internal audit (xii) risk management (xiii) ICT
(xiv) company administration (accounting and tax matters) and (xv) capital
markets analysis.
Operations
Responsible for supporting the Group and the Board in matters relating
to: (i) production engineering and reservoir management (ii) drilling and
workover management production (iii) production (iv) engineering and
construction field operations (v) relations with governmental authorities
(vi) procurement (vii) security and (viii) administration.
Head: Petro Mychalkiw Head: Robert Tinkhof
Legal
Responsible for supporting the
Group and the Board in matters
relating to: (i) all legal matters
(ii) compliance (iii) corporate
governance (iv) company
administration (legal and
governance matters).
Sales and marketing
Responsible for supporting the
Group and the Board in matters
relating to: (i) sales of oil and gas
products (ii) marketing and
(iii) logistics and transportation.
QHSE
Responsible for supporting the
Group and the Board in matters
relating to: (i) product quality
(ii) personnel and community
health and safety and (iii)
environmental protection.
Human resources
Responsible for supporting the
Group and the Board in matters
relating to: (i) personnel and
workforce matters generally
(ii) training and (iii) remuneration.
Head: Thomas Hartnett Head: Abi Zivs Head: Daulet Tulegenov Acting Head: Thomas Hartnett
Audit Committee
Responsible for oversight
of the Group’s financial
reporting processes.
Scrutinises the work of the
external auditor and
regularly reviews the risk
management framework
and the work of internal
audit.
Nomination and
Governance Committee
Governance Committee
Reviews the structure, size
and composition of the
Board and its committees
and makes recommendations
to the Board accordingly,
and leads the process for
new Board appointments.
Remuneration Committee
Reviews and recommends
to the Board the executive
Remuneration Policy
and determines the
remuneration packages
of the Directors.
Strategy Committee
Assists the Board to
fulfil its responsibilities
in relation to strategy.
Company Secretary
Responsible for advising the
Board, through the Chairman,
on all governance matters
and for ensuring that Board
procedures are complied
with and there is a good flow
of information between the
Board and its committees.
The appointment of the
Company Secretary is a
matter reserved to the
Board as a whole.
Chairwoman:
Fiona Paulus
See page 99 for
Committee Report.
Acting Chairman:
Martin Gudgeon
See page 106 for
Committee Report.
Chairman:
Chris Hopkinson
See page 107 for
Committee Report.
Chairman:
Stephen Whyte
Company Secretary:
Thomas Hartnett
The Board
The Board is chaired by Stephen Whyte as from 14 February 2023. The Board is collectively responsible to stakeholders for the long-term success of the
Group. This is achieved by reviewing trading performance, budgets and funding, setting and monitoring the Group’s strategic objectives, reviewing
acquisition opportunities and engaging with stakeholders. The Board is supported by a number of committees whose terms of reference (TORs) are
available on our website.
Chairman
Responsible for leadership
of the Board and for ensuring
its effectiveness in all aspects
of its role.
Chief Executive Officer
Responsible for the successful
planning and execution of the
objectives and strategies agreed
by the Board.
Independent
Non-Executive Directors 1
Responsible for bringing an external
perspective, sound judgement and
objectivity to the Board’s decision-
making. Scrutinise management
performance and constructively
challenge strategy.
Non-Executive Warrant Director
Responsible for giving or
withholding approval to certain
matters set out in the warrant
instrument.
Senior Management Team
The Senior management team supports the Chief Executive Officer in making important decisions regarding the overall management of the Group in
respect of all Group matters that are not reserved for the Board and in ensuring that operational activities and performance are aligned with the
overarching strategy of the Group. Each member of the team reports directly to the Chief Executive Officer, who then directly reports to the Board.
The functional responsibilities of the senior management team members in their respective areas include but are not limited to implementing Chief
Executive Officer and Board decisions, allocating resources, managing risk, maximising efficiencies, guiding and developing employees, reviewing
performance and supporting cross-functional integration.
1. Since 24 February 2023, no Director has been appointed as Senior Independent Director.
96 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Board policies and governance
arrangements
GRI 2-23
Nostrum recognises the important role that good corporate
governance plays in the success of the Company. As a result,
the Board promotes high standards of corporate governance
as a key component of its activities. Clearly defined roles and
responsibilities, non-executive independence, boardroom and
workplace diversity, an open and transparent culture and the work
of our committees in implementing the Company’s values and
policies throughout the Group are all vital ingredients to get this
right for our stakeholders.
In order to ensure that it is involved in making important decisions
for the Group and to ensure a clear division of responsibilities
between the Board and executive management, the Board has
identified certain “reserved matters” that are subject to its
approval. Other matters, responsibilities and authorities have been
delegated to its committees and the senior management team,
as set out in the governance framework on pages 96-98.
The schedule of matters reserved for the Board is reviewed
annually and is available on our website.
Division of responsibilities
The Company’s Chairman as from 14 February 2023, Stephen
Whyte, is a non-executive director who also chairs the Company’s
Strategy Committee.
The Chief Executive Officer is also a member of the Strategy
Committee and his strategic capabilities are strengthened by the
Senior management team.
Independence
Robust oversight is crucial for strong corporate governance and
the Board is committed to securing this through an appropriate
balance of independent Non-Executive Directors.
At the date of this Annual Report, the Board considers all of its
Non-Executive Directors other than the Chairman, Martin
Gudgeon and Viktor Gladun to be independent within the
meaning of this term as defined in the Code.
Equality and diversity
GRI 405-1
The Board has due regard for the importance of, and benefits from,
diversity in its membership, including gender diversity, and strives
to maintain an appropriate balance on the Board. The Board is
composed of individuals with diverse sectoral experience, ages,
geographic and ethnic origin, and gender.
As at 31 December 2024 the Company has 17% female
representation on its Board. As at 2024 year-end, the Audit
Committee comprises 50% females, the Nomination and
Governance Committee has 25% female representation and 33%
are females in the Remuneration Committee. The Nomination and
Governance Committee remains satisfied that the Board has the
right mix of skills and experience to operate effectively. However,
the skills and experience mix are under continuous review, and in
furtherance of the Company’s diversity goals the Company is
seeking to add a second woman to the Board by the end of 2025.
The Nomination and Governance Committee remains committed
to monitoring diversity closely as part of future succession
planning.
On 7 December 2017, the Board approved its Equality and
Diversity Policy. Clarificatory amendments were made to the
Company’s Equality and Diversity Policy on 14 September 2022,
to which the Company continued to adhere throughout 2024.
In accordance with the policy, the Group is committed to
eliminating discrimination and encouraging equality and diversity
in all of our business activities, including the provision of
employment. The policy applies to all who work for the Group,
including Directors, together with the managerial, supervisory
and administrative bodies of all entities within the Group.
The policy also applies equally to the treatment of our supply chain,
applicants and visitors by our staff and the treatment of our staff by
these third parties. The objective of the policy is to promote
equality of opportunity and to ensure that no individual suffers
unlawful discrimination, directly or indirectly, on the grounds of
race, colour, ethnicity, religion, sex, gender identity or expression,
gender reassignment, national origin, age, marital status, disability
or sexual orientation.
The Group aims to ensure the objective of the policy is met by:
• Ensuring all recruitment advertising and publicity aims to
encourage applications from any individual who has appropriate
qualifications and/or experience;
• Not offering discriminatory conditions of employment;
• Ensuring all promotions are made strictly on the basis of the
ability to do the job and no such decision is made on a
discriminatory basis;
• Considering requests for part-time work or job-sharing
opportunities wherever appropriate and practicable, and aiming
to ensure that part-time employees receive fair treatment;
• Ensuring that the demands of religion (e.g. prayer time and
religious holidays), culture (e.g. traditional dress) and special
dietary needs are accommodated where possible; and
• Taking reasonable steps to assist employees with domestic
responsibilities (e.g. young children and dependent elderly
relatives).
Throughout the year, our commitment to advancing diversity and
inclusion within our organisation has remained a priority. We have
enhanced and implemented several initiatives, notably the
‘Targeted Recruitment Program’, focusing on underrepresented
groups such as women, minorities, and individuals with disabilities.
Concrete measures as collaborating with external organisations,
taking training for inclusive recruitment, and creating inclusive job
advert have been taken. For more information on the Diversity
Action Plan of the Group please see pages 63-64.
As at 31 December 2024, we did not comply with the following
targets in the Listing Rules on board diversity:
• 40% of individuals on the board to be women.
• At least one senior position (chair, chief executive, senior independent
director or chief financial officer) to be held by a woman.
As at 31 December 2024, we complied with the target in the Listing
Rules on board diversity that at least one individual on the board
be from a minority ethnic background.
Diversity data is collated by our HR function who request
colleagues to self-report against drafts of this Annual Report.
These targets were not met due to the appointment processes
which concluded on 14 February 2023 having failed to identify
sufficient female candidates. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 97
arrangements
GRI 2-23
Nostrum recognises the important role that good corporate
governance plays in the success of the Company. As a result,
the Board promotes high standards of corporate governance
as a key component of its activities. Clearly defined roles and
responsibilities, non-executive independence, boardroom and
workplace diversity, an open and transparent culture and the work
of our committees in implementing the Company’s values and
policies throughout the Group are all vital ingredients to get this
right for our stakeholders.
In order to ensure that it is involved in making important decisions
for the Group and to ensure a clear division of responsibilities
between the Board and executive management, the Board has
identified certain “reserved matters” that are subject to its
approval. Other matters, responsibilities and authorities have been
delegated to its committees and the senior management team,
as set out in the governance framework on pages 96-98.
The schedule of matters reserved for the Board is reviewed
annually and is available on our website.
Division of responsibilities
The Company’s Chairman as from 14 February 2023, Stephen
Whyte, is a non-executive director who also chairs the Company’s
Strategy Committee.
The Chief Executive Officer is also a member of the Strategy
Committee and his strategic capabilities are strengthened by the
Senior management team.
Independence
Robust oversight is crucial for strong corporate governance and
the Board is committed to securing this through an appropriate
balance of independent Non-Executive Directors.
At the date of this Annual Report, the Board considers all of its
Non-Executive Directors other than the Chairman, Martin
Gudgeon and Viktor Gladun to be independent within the
meaning of this term as defined in the Code.
Equality and diversity
GRI 405-1
The Board has due regard for the importance of, and benefits from,
diversity in its membership, including gender diversity, and strives
to maintain an appropriate balance on the Board. The Board is
composed of individuals with diverse sectoral experience, ages,
geographic and ethnic origin, and gender.
As at 31 December 2024 the Company has 17% female
representation on its Board. As at 2024 year-end, the Audit
Committee comprises 50% females, the Nomination and
Governance Committee has 25% female representation and 33%
are females in the Remuneration Committee. The Nomination and
Governance Committee remains satisfied that the Board has the
right mix of skills and experience to operate effectively. However,
the skills and experience mix are under continuous review, and in
furtherance of the Company’s diversity goals the Company is
seeking to add a second woman to the Board by the end of 2025.
The Nomination and Governance Committee remains committed
to monitoring diversity closely as part of future succession
planning.
On 7 December 2017, the Board approved its Equality and
Diversity Policy. Clarificatory amendments were made to the
Company’s Equality and Diversity Policy on 14 September 2022,
to which the Company continued to adhere throughout 2024.
In accordance with the policy, the Group is committed to
eliminating discrimination and encouraging equality and diversity
in all of our business activities, including the provision of
employment. The policy applies to all who work for the Group,
including Directors, together with the managerial, supervisory
and administrative bodies of all entities within the Group.
The policy also applies equally to the treatment of our supply chain,
applicants and visitors by our staff and the treatment of our staff by
these third parties. The objective of the policy is to promote
equality of opportunity and to ensure that no individual suffers
unlawful discrimination, directly or indirectly, on the grounds of
race, colour, ethnicity, religion, sex, gender identity or expression,
gender reassignment, national origin, age, marital status, disability
or sexual orientation.
The Group aims to ensure the objective of the policy is met by:
• Ensuring all recruitment advertising and publicity aims to
encourage applications from any individual who has appropriate
qualifications and/or experience;
• Not offering discriminatory conditions of employment;
• Ensuring all promotions are made strictly on the basis of the
ability to do the job and no such decision is made on a
discriminatory basis;
• Considering requests for part-time work or job-sharing
opportunities wherever appropriate and practicable, and aiming
to ensure that part-time employees receive fair treatment;
• Ensuring that the demands of religion (e.g. prayer time and
religious holidays), culture (e.g. traditional dress) and special
dietary needs are accommodated where possible; and
• Taking reasonable steps to assist employees with domestic
responsibilities (e.g. young children and dependent elderly
relatives).
Throughout the year, our commitment to advancing diversity and
inclusion within our organisation has remained a priority. We have
enhanced and implemented several initiatives, notably the
‘Targeted Recruitment Program’, focusing on underrepresented
groups such as women, minorities, and individuals with disabilities.
Concrete measures as collaborating with external organisations,
taking training for inclusive recruitment, and creating inclusive job
advert have been taken. For more information on the Diversity
Action Plan of the Group please see pages 63-64.
As at 31 December 2024, we did not comply with the following
targets in the Listing Rules on board diversity:
• 40% of individuals on the board to be women.
• At least one senior position (chair, chief executive, senior independent
director or chief financial officer) to be held by a woman.
As at 31 December 2024, we complied with the target in the Listing
Rules on board diversity that at least one individual on the board
be from a minority ethnic background.
Diversity data is collated by our HR function who request
colleagues to self-report against drafts of this Annual Report.
These targets were not met due to the appointment processes
which concluded on 14 February 2023 having failed to identify
sufficient female candidates. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 97
GOVERNANCE FRAMEWORK
Our governance framework continued
Table for reporting on gender identity or sex as at 31 December 2024
Number of
board
members
Percentage of
the board
Number of
senior
positions on
the board
(CEO, CFO,
SID and Chair)
Number in
executive
management
Percentage of
executive
management
Men 5 83% 2 7 70%
Women 1 17% 0 3 30%
Other categories
Not specified, prefer not to say
Table for reporting on ethnic background as at 31 December 2024
Number of
board
members
Percentage of
the board
Number of
senior
positions on
the board
(CEO, CFO,
SID and Chair)
Number in
executive
management
Percentage of
executive
management
White British or other White (including minority-white groups) 4 67% 1 5 50%
Mixed/Multiple Ethnic Groups
Asian/Asian British 1 17% 1 4 40%
Black/African/Caribbean/Black British
Other ethnic group, including Arab 1 17% 1 10%
Not specified, prefer not to say
Conflicts of interest
GRI 2-15
Directors have a duty to avoid a situation in which they have, or may
have, a direct or indirect interest that conflicts or may conflict with
the interests of the Company.
Formal procedures are in place to ensure that the Board’s powers
of authorisation of conflicts or potential conflicts of interest of
Directors are operated effectively.
The Board is satisfied that during 2024 these procedures were
enforced and adhered to appropriately.
Appointment and tenure
All Executive Directors have service agreements with the Company.
All Non-Executive Directors have letters of appointment with the
Company. For all Executive Directors engaged through service
agreements, there is no term limit on their services, as the
Company proposes all Executive Directors for annual re- election
at each subsequent Annual General Meeting of the Company.
Each Non-Executive Director appointment is for an initial term of
three years, subject to being re-elected at each subsequent Annual
General Meeting.
Bribery, corruption and whistleblowing
GRI 2-23, 205-1, 205-2, 205-3
Bribery and corruption are significant risks in the oil and gas
industry and, as such, the Company operates a Group-wide Anti-
Corruption and Bribery Policy, which applies to all Group
employees and contractor staff. The policy requires: annual bribery
and corruption risk assessments; risk-based due diligence on all
parties with whom the Company does business; appropriate
anti-bribery and corruption clauses in contracts; and the training of
personnel in anti-bribery and corruption measures. In addition, the
Company’s Code of Conduct requires that employees or others
working on behalf of the Company do not engage in bribery or
corruption in any form. Corruption-related risks are evaluated on
a Group-wide basis (not in respect of divisions). No confirmed
corruption cases were identified in 2024.
No live anti-bribery training was conducted in 2024, however a
video was created of the anti-bribery training session led by the
CLO in November 2023 and that video was made available in 2024
for training Nostrum personnel on anti-bribery matters.
The Company has also adopted a Whistleblowing Policy that takes
account of the Whistleblowing Arrangements Code of Practice
issued by the British Standards Institute and Public Concern at Work.
Further information can be found on page 66.
No whistleblowing disclosures were reported in 2024.
Anti-facilitation of tax evasion
Further to the new rules under the Criminal Finances Act 2017
(CFA) in the UK, in 2018 the Board approved an Anti-Facilitation of
Tax Evasion Policy applicable to the Group and its associated
persons. In connection with the preparation of this policy, the
Company commissioned an independent bespoke risk assessment
and incorporated findings from the assessment into the policy.
98 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Our governance framework continued
Table for reporting on gender identity or sex as at 31 December 2024
Number of
board
members
Percentage of
the board
Number of
senior
positions on
the board
(CEO, CFO,
SID and Chair)
Number in
executive
management
Percentage of
executive
management
Men 5 83% 2 7 70%
Women 1 17% 0 3 30%
Other categories
Not specified, prefer not to say
Table for reporting on ethnic background as at 31 December 2024
Number of
board
members
Percentage of
the board
Number of
senior
positions on
the board
(CEO, CFO,
SID and Chair)
Number in
executive
management
Percentage of
executive
management
White British or other White (including minority-white groups) 4 67% 1 5 50%
Mixed/Multiple Ethnic Groups
Asian/Asian British 1 17% 1 4 40%
Black/African/Caribbean/Black British
Other ethnic group, including Arab 1 17% 1 10%
Not specified, prefer not to say
Conflicts of interest
GRI 2-15
Directors have a duty to avoid a situation in which they have, or may
have, a direct or indirect interest that conflicts or may conflict with
the interests of the Company.
Formal procedures are in place to ensure that the Board’s powers
of authorisation of conflicts or potential conflicts of interest of
Directors are operated effectively.
The Board is satisfied that during 2024 these procedures were
enforced and adhered to appropriately.
Appointment and tenure
All Executive Directors have service agreements with the Company.
All Non-Executive Directors have letters of appointment with the
Company. For all Executive Directors engaged through service
agreements, there is no term limit on their services, as the
Company proposes all Executive Directors for annual re- election
at each subsequent Annual General Meeting of the Company.
Each Non-Executive Director appointment is for an initial term of
three years, subject to being re-elected at each subsequent Annual
General Meeting.
Bribery, corruption and whistleblowing
GRI 2-23, 205-1, 205-2, 205-3
Bribery and corruption are significant risks in the oil and gas
industry and, as such, the Company operates a Group-wide Anti-
Corruption and Bribery Policy, which applies to all Group
employees and contractor staff. The policy requires: annual bribery
and corruption risk assessments; risk-based due diligence on all
parties with whom the Company does business; appropriate
anti-bribery and corruption clauses in contracts; and the training of
personnel in anti-bribery and corruption measures. In addition, the
Company’s Code of Conduct requires that employees or others
working on behalf of the Company do not engage in bribery or
corruption in any form. Corruption-related risks are evaluated on
a Group-wide basis (not in respect of divisions). No confirmed
corruption cases were identified in 2024.
No live anti-bribery training was conducted in 2024, however a
video was created of the anti-bribery training session led by the
CLO in November 2023 and that video was made available in 2024
for training Nostrum personnel on anti-bribery matters.
The Company has also adopted a Whistleblowing Policy that takes
account of the Whistleblowing Arrangements Code of Practice
issued by the British Standards Institute and Public Concern at Work.
Further information can be found on page 66.
No whistleblowing disclosures were reported in 2024.
Anti-facilitation of tax evasion
Further to the new rules under the Criminal Finances Act 2017
(CFA) in the UK, in 2018 the Board approved an Anti-Facilitation of
Tax Evasion Policy applicable to the Group and its associated
persons. In connection with the preparation of this policy, the
Company commissioned an independent bespoke risk assessment
and incorporated findings from the assessment into the policy.
98 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Audit Committee report
AUDIT COMMITTEE REPORT
Meetings in 2024
Committee meets normally a few days in advance of each board
meeting. The Group’s Chief Financial Officer, the Chief Legal
Officer and the Company Secretary are invited to all meetings with
the external auditor being invited when appropriate.
The Committee held seven formal meetings during 2024 and the
attendance of each Committee member at meetings of the
Committee is shown on page 93.
The principal agenda items at the formal meetings were as follows:
Meetings Agenda item
8 February Audit planning
19 March Audit status
17 April Audit status
28 May Recommend Q1 financial results to Board
13 August Recommend H1 financial results to Board
12 November Recommend Q3 financial results to Board
5 December Audit planning
Financial Reporting Council (FRC)
disclosure expectations
In October 2023, the Corporate Reporting Review (‘CRR’) team of
the FRC highlighted a number of key matters for the 2022-2023
financial reporting season. Top ten most common topics on which
CRR team raised substantive questions with companies in their
2022/23 monitoring cycle were aligned to the following key
areas of disclosure expectations for 2023/2024 reporting cycle:
• ensuring disclosures about uncertainty are sufficient to meet the
relevant requirements and for users to understand the positions
taken in the financial statements.
• giving a clear description in the strategic report of risks facing
the business, their impact on strategy, business model, going
concern and viability, cross- referenced to relevant detail in the
reports and accounts.
• providing transparent disclosure of the nature and extent of
material risks arising from financial instruments.
• providing a clear statement of consistency with TCFD which
explains, unambiguously, whether management considers they
have given sufficient information to comply with the framework in
the current year.
• performing sufficient critical review of the annual report and
accounts, including: taking a step back to consider whether the
report as a whole is clear, concise and understandable, omits
immaterial information and whether additional information,
beyond the requirements of specific standards, is required to
understand particular transactions, events or circumstances; and
a robust pre-issuance review to consider issues we commonly
challenge including: internal consistency; whether accounting
policies address all significant transactions; and presentational
matters, such as cash flow and current/non-current classification.
Role and responsibilities of the
Audit Committee
The key areas of responsibility of the Committee during 2024
were as follows:
• Review the Group’s audited annual report and interim
unaudited consolidated financial statements;
• Review the formal announcement of the financial results,
investor presentations and any other related announcements;
• Review the effectiveness of any investigations or internal audits
performed;
• Monitor compliance with applicable regulatory and legal
requirements and the Group’s Code of Conduct;
• Monitor and review the effectiveness of the Group’s internal
audit function;
• Maintain the relationship with the Company’s external auditor
and oversee its appointment, remuneration and terms of
engagement whilst continually assessing its independence
and objectivity; and
• Review audit findings and assess the standard and
effectiveness of the external audit.
More detail on these and other key areas of responsibility can be
found in the Committee’s terms of reference, which are available
on the Group’s website www.nog.co.uk. The terms of reference
of the Committee were approved at a meeting of the Board on
26 April 2023.
Membership
The members of the Committee during 2024 were:
Name
Membership
start date
Membership
end date
Fiona Paulus
(Chairwoman)
24 February
2023
Chris Cox 24 February
2023
31 May 2024
Chris Hopkinson 24 February
2023
All members of the Audit Committee during 2024 were
considered to be independent Non-Executive Directors.
The qualifications presented in the biographies of the members
of the Committee on pages 90-91, and their respective
contributions to the activities of the Committee, demonstrate
that the Committee has the necessary levels of competence in oil
& gas upstream and downstream operations and in accounting
and auditing, as well as recent and relevant financial experience. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 99
AUDIT COMMITTEE REPORT
Meetings in 2024
Committee meets normally a few days in advance of each board
meeting. The Group’s Chief Financial Officer, the Chief Legal
Officer and the Company Secretary are invited to all meetings with
the external auditor being invited when appropriate.
The Committee held seven formal meetings during 2024 and the
attendance of each Committee member at meetings of the
Committee is shown on page 93.
The principal agenda items at the formal meetings were as follows:
Meetings Agenda item
8 February Audit planning
19 March Audit status
17 April Audit status
28 May Recommend Q1 financial results to Board
13 August Recommend H1 financial results to Board
12 November Recommend Q3 financial results to Board
5 December Audit planning
Financial Reporting Council (FRC)
disclosure expectations
In October 2023, the Corporate Reporting Review (‘CRR’) team of
the FRC highlighted a number of key matters for the 2022-2023
financial reporting season. Top ten most common topics on which
CRR team raised substantive questions with companies in their
2022/23 monitoring cycle were aligned to the following key
areas of disclosure expectations for 2023/2024 reporting cycle:
• ensuring disclosures about uncertainty are sufficient to meet the
relevant requirements and for users to understand the positions
taken in the financial statements.
• giving a clear description in the strategic report of risks facing
the business, their impact on strategy, business model, going
concern and viability, cross- referenced to relevant detail in the
reports and accounts.
• providing transparent disclosure of the nature and extent of
material risks arising from financial instruments.
• providing a clear statement of consistency with TCFD which
explains, unambiguously, whether management considers they
have given sufficient information to comply with the framework in
the current year.
• performing sufficient critical review of the annual report and
accounts, including: taking a step back to consider whether the
report as a whole is clear, concise and understandable, omits
immaterial information and whether additional information,
beyond the requirements of specific standards, is required to
understand particular transactions, events or circumstances; and
a robust pre-issuance review to consider issues we commonly
challenge including: internal consistency; whether accounting
policies address all significant transactions; and presentational
matters, such as cash flow and current/non-current classification.
Role and responsibilities of the
Audit Committee
The key areas of responsibility of the Committee during 2024
were as follows:
• Review the Group’s audited annual report and interim
unaudited consolidated financial statements;
• Review the formal announcement of the financial results,
investor presentations and any other related announcements;
• Review the effectiveness of any investigations or internal audits
performed;
• Monitor compliance with applicable regulatory and legal
requirements and the Group’s Code of Conduct;
• Monitor and review the effectiveness of the Group’s internal
audit function;
• Maintain the relationship with the Company’s external auditor
and oversee its appointment, remuneration and terms of
engagement whilst continually assessing its independence
and objectivity; and
• Review audit findings and assess the standard and
effectiveness of the external audit.
More detail on these and other key areas of responsibility can be
found in the Committee’s terms of reference, which are available
on the Group’s website www.nog.co.uk. The terms of reference
of the Committee were approved at a meeting of the Board on
26 April 2023.
Membership
The members of the Committee during 2024 were:
Name
Membership
start date
Membership
end date
Fiona Paulus
(Chairwoman)
24 February
2023
Chris Cox 24 February
2023
31 May 2024
Chris Hopkinson 24 February
2023
All members of the Audit Committee during 2024 were
considered to be independent Non-Executive Directors.
The qualifications presented in the biographies of the members
of the Committee on pages 90-91, and their respective
contributions to the activities of the Committee, demonstrate
that the Committee has the necessary levels of competence in oil
& gas upstream and downstream operations and in accounting
and auditing, as well as recent and relevant financial experience. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 99
The Committee considered the above- mentioned expectations
when reviewing the annual report and accounts, and addressed
these while reviewing the annual report and accounts, as further
described below in the next sections.
Self-assessment
No formal review of the Committee’s performance and
effectiveness was made in 2024. An internal/informal performance
review took place.
Activities during the year
In accordance with its responsibilities outlined above, the
Committee’s activities fall into the following four main areas, each
of which is explained in more detail in the following sections 1 to 4:
1. Financial reporting
2. Risk management and internal controls
3. Compliance with laws and regulations
4. External audit
1. Financial reporting
The key areas of the Committee’s activities related to financial
reporting can be summarised as follows:
• Review of and discussions on the quarterly unaudited and annual
audited financial statements and recommendation to the Board
for approval;
• Review of and discussions on the matters of liquidity and going
concern analysis, as well as impairment considerations;
• Review of annual budgets and quarterly performance and
forecasts, and the status of key initiatives; and
• Discussion of various ad-hoc matters related to financial
accounting, reporting, treasury and tax, and other finance
matters.
The Committee’s review of the quarterly results and half-yearly
financial statements was done with an emphasis on ensuring the
following:
• Appropriateness of critical judgements and estimates applied by
management (described in more detail below) and completeness
of related disclosures;
• Consistency of the adopted accounting policies with those used
in prior periods;
• Completeness of disclosures for compliance with financial
reporting standards and relevant corporate governance
requirements;
• Assessment whether the Annual Report, taken as a whole, is fair,
balanced and understandable, and provides the information
necessary for the stakeholders to assess the Group’s
performance, business model and strategy; and
• Discussions on any significant matters with management and the
external auditor and providing feedback to management on
ways to improve the effectiveness and clarity of the Group’s
corporate reporting.
The Committee reviewed this Annual Report with the same
emphasis as noted above together with the specific areas noted by
the FRC and outlined above.
Significant judgements, estimates and
assumptions
Significant judgements, estimates and assumptions applied by
management when preparing the financial statements are closely
related to the principal risks and uncertainties faced by the Group,
which are subject to constant monitoring by the Board and the
Committee.
Audit Committee report continued
AUDIT COMMITTEE REPORT
100 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
when reviewing the annual report and accounts, and addressed
these while reviewing the annual report and accounts, as further
described below in the next sections.
Self-assessment
No formal review of the Committee’s performance and
effectiveness was made in 2024. An internal/informal performance
review took place.
Activities during the year
In accordance with its responsibilities outlined above, the
Committee’s activities fall into the following four main areas, each
of which is explained in more detail in the following sections 1 to 4:
1. Financial reporting
2. Risk management and internal controls
3. Compliance with laws and regulations
4. External audit
1. Financial reporting
The key areas of the Committee’s activities related to financial
reporting can be summarised as follows:
• Review of and discussions on the quarterly unaudited and annual
audited financial statements and recommendation to the Board
for approval;
• Review of and discussions on the matters of liquidity and going
concern analysis, as well as impairment considerations;
• Review of annual budgets and quarterly performance and
forecasts, and the status of key initiatives; and
• Discussion of various ad-hoc matters related to financial
accounting, reporting, treasury and tax, and other finance
matters.
The Committee’s review of the quarterly results and half-yearly
financial statements was done with an emphasis on ensuring the
following:
• Appropriateness of critical judgements and estimates applied by
management (described in more detail below) and completeness
of related disclosures;
• Consistency of the adopted accounting policies with those used
in prior periods;
• Completeness of disclosures for compliance with financial
reporting standards and relevant corporate governance
requirements;
• Assessment whether the Annual Report, taken as a whole, is fair,
balanced and understandable, and provides the information
necessary for the stakeholders to assess the Group’s
performance, business model and strategy; and
• Discussions on any significant matters with management and the
external auditor and providing feedback to management on
ways to improve the effectiveness and clarity of the Group’s
corporate reporting.
The Committee reviewed this Annual Report with the same
emphasis as noted above together with the specific areas noted by
the FRC and outlined above.
Significant judgements, estimates and
assumptions
Significant judgements, estimates and assumptions applied by
management when preparing the financial statements are closely
related to the principal risks and uncertainties faced by the Group,
which are subject to constant monitoring by the Board and the
Committee.
Audit Committee report continued
AUDIT COMMITTEE REPORT
100 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
The other significant judgements, estimates and assumptions applied by management when preparing the financial statements, and the
Committee’s responses, are noted in the following table:
Significant judgements Significant estimates Significant assumptions
Impact on financial statement
accounts
Viability and going concern assessments
One of the key judgements made by the
management when preparing 2024
Annual Report and Accounts was related
to the Group’s continued viability and
going concern. Various risks and
uncertainties may threaten the
Company’s future performance and
results.
Management uses internal
estimates to forecast future
volumes of oil and gas
production, as well as opex,
G&A, and capital
expenditure for future
periods, which are subject
to various uncertainties.
Management uses product
price assumptions for crude
oil, LPG, dry gas and
stabilised condensate in
order to estimate cash
inflows from future
product sales.
Conclusions based on the
going concern and viability
assessment affect the basis of
preparation of the financial
statements, and may lead
to differing valuation and
presentation of the items on
the statement of financials.
Committee actions
During 2024, the Committee continued
to critically evaluate management’s
assessment of the Company’s and
Group’s ability to operate as a going
concern for at least 12 months from the
release date of the financial statements.
Additionally, the Committee examined
the Company’s and Group’s long-term
viability beyond this 12-month period.
The Committee reviewed the
Management’s analysis of the
Group’s cash flows for the
12-36 months, and
monitoring of the Group’s
liquidity position, sensitivity
tests of its liquidity position
for changes in crude oil price,
production volumes and
timing of completion of
various ongoing projects.
The Committee reviewed the
Management’s analysis of the
Group’s cash flows for the
12-36 months, and
monitoring of the Group’s
liquidity position, sensitivity
tests of its liquidity position
for changes in crude oil price,
production volumes and
timing of completion of
various ongoing projects.
After careful consideration,
the Committee is satisfied that
the Group has sufficient
resources to continue in
operation for the going
concern period to 30 June
2025, and agrees with
management’s conclusions in
relation to the going concern
(see page 50) and viability of
the Group over a period of
longer than 12 months (see
pages 43-44).
Geopolitical factors
The Group’s operations are exposed to
risks associated with the political and
business environment in Kazakhstan,
being the Group’s primary location
of oil & gas operations, as well as its
neighbouring countries. Severe
sanctions and trade restrictions imposed
by, among others, the US, UK and EU on
Russia at various stages have increased
the economic and political uncertainty
and may have a material adverse impact
on the Group’s business, results of
operations, financial condition and
prospects.
Estimations of the future
prices for oil, oil products
and dry gas along with
projected production from
the Chinarevskoye field
impact the calculation of
future cash flows. These
factors, in turn, impact the
assessment of the Company’s
and Group’s continued
viability as well as the
determination of appropriate
impairment provision levels.
In estimating recoverable
amounts of the Group’s
non-current assets the
Management uses
assumptions such future
commodity prices, oil and
gas reserves, future
production profiles,
operating expenses and
capital expenditure
estimates, fiscal regimes,
and discount rates.
Changes in the significant
estimates and key
assumptions may impact the
Group’s ability to continue as
a going concern, or the level
of impairment required
against the CGU.
Committee actions
During 2024, the Committee continued
to critically evaluate management’s
assessment of the geopolitical factors
and their impact on the Group’s
operations.
As part of the regular Board
meetings, the Committee
reviewed the monthly
liquidity position prepared
by management and agreed
the estimations of product
prices, costs and production
profiles were appropriate.
As part of the regular Board
meetings, members of the
Committee considered and
challenged the assumption
that sanctions were not
affecting the Group’s
operations and marketing
the products.
The Committee
simultaneously evaluated the
impact of sanctions on the
financial statements while
scrutinising the application of
the going concern basis for
preparing the quarterly,
half-yearly, and annual
financial statements. This
comprehensive approach
ensured a thorough
assessment of the company’s
financial position and
reporting practices in light of
external pressures and
regulatory requirements. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 101
Committee’s responses, are noted in the following table:
Significant judgements Significant estimates Significant assumptions
Impact on financial statement
accounts
Viability and going concern assessments
One of the key judgements made by the
management when preparing 2024
Annual Report and Accounts was related
to the Group’s continued viability and
going concern. Various risks and
uncertainties may threaten the
Company’s future performance and
results.
Management uses internal
estimates to forecast future
volumes of oil and gas
production, as well as opex,
G&A, and capital
expenditure for future
periods, which are subject
to various uncertainties.
Management uses product
price assumptions for crude
oil, LPG, dry gas and
stabilised condensate in
order to estimate cash
inflows from future
product sales.
Conclusions based on the
going concern and viability
assessment affect the basis of
preparation of the financial
statements, and may lead
to differing valuation and
presentation of the items on
the statement of financials.
Committee actions
During 2024, the Committee continued
to critically evaluate management’s
assessment of the Company’s and
Group’s ability to operate as a going
concern for at least 12 months from the
release date of the financial statements.
Additionally, the Committee examined
the Company’s and Group’s long-term
viability beyond this 12-month period.
The Committee reviewed the
Management’s analysis of the
Group’s cash flows for the
12-36 months, and
monitoring of the Group’s
liquidity position, sensitivity
tests of its liquidity position
for changes in crude oil price,
production volumes and
timing of completion of
various ongoing projects.
The Committee reviewed the
Management’s analysis of the
Group’s cash flows for the
12-36 months, and
monitoring of the Group’s
liquidity position, sensitivity
tests of its liquidity position
for changes in crude oil price,
production volumes and
timing of completion of
various ongoing projects.
After careful consideration,
the Committee is satisfied that
the Group has sufficient
resources to continue in
operation for the going
concern period to 30 June
2025, and agrees with
management’s conclusions in
relation to the going concern
(see page 50) and viability of
the Group over a period of
longer than 12 months (see
pages 43-44).
Geopolitical factors
The Group’s operations are exposed to
risks associated with the political and
business environment in Kazakhstan,
being the Group’s primary location
of oil & gas operations, as well as its
neighbouring countries. Severe
sanctions and trade restrictions imposed
by, among others, the US, UK and EU on
Russia at various stages have increased
the economic and political uncertainty
and may have a material adverse impact
on the Group’s business, results of
operations, financial condition and
prospects.
Estimations of the future
prices for oil, oil products
and dry gas along with
projected production from
the Chinarevskoye field
impact the calculation of
future cash flows. These
factors, in turn, impact the
assessment of the Company’s
and Group’s continued
viability as well as the
determination of appropriate
impairment provision levels.
In estimating recoverable
amounts of the Group’s
non-current assets the
Management uses
assumptions such future
commodity prices, oil and
gas reserves, future
production profiles,
operating expenses and
capital expenditure
estimates, fiscal regimes,
and discount rates.
Changes in the significant
estimates and key
assumptions may impact the
Group’s ability to continue as
a going concern, or the level
of impairment required
against the CGU.
Committee actions
During 2024, the Committee continued
to critically evaluate management’s
assessment of the geopolitical factors
and their impact on the Group’s
operations.
As part of the regular Board
meetings, the Committee
reviewed the monthly
liquidity position prepared
by management and agreed
the estimations of product
prices, costs and production
profiles were appropriate.
As part of the regular Board
meetings, members of the
Committee considered and
challenged the assumption
that sanctions were not
affecting the Group’s
operations and marketing
the products.
The Committee
simultaneously evaluated the
impact of sanctions on the
financial statements while
scrutinising the application of
the going concern basis for
preparing the quarterly,
half-yearly, and annual
financial statements. This
comprehensive approach
ensured a thorough
assessment of the company’s
financial position and
reporting practices in light of
external pressures and
regulatory requirements. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 101
Audit Committee report
continued
AUDIT COMMITTEE REPORT
Significant judgements Significant estimates Significant assumptions
Impact on financial statement
accounts
Non-current assets’ carrying values
In conducting the impairment analysis,
management exercised professional
judgment and determined a single cash
generating unit (CGU) within the
Group’s non-current assets. This CGU
encompasses all assets related to the
Chinarevskoye field, Stepnoy Leopard
Fields, gas treatment facilities, and
hydrocarbon processing from Ural O&G.
Furthermore, management applied
judgment in determining the fair value
less costs of disposal (FVLCD) of the
CGU. This process involved making
assumptions about how market
participants would view the value-
creating components of the CGU.
Management prepared
estimations of the CGU’s
recoverable amount using a
discounted cash flow model.
This model incorporated
significant assumptions and
took into account the overall
enterprise value. The
process involved careful
consideration of various
factors to determine the most
accurate valuation of the
CGU’s potential future
economic benefits.
Assumptions used in
estimating recoverable
amounts included future
commodity prices, oil and
gas reserves, future
production profiles,
operating expenses and
capital expenditure
estimates, fiscal regimes,
and discount rates.
Enterprise valuation
considered the market value
of the Group’s bonds and
the Company’s shares.
Changes in the key
assumptions and market
valuations may significantly
affect the estimation of the
recoverable amount of
non-current assets, and
consequently may result in
impairment of non-current
assets.
Committee actions
The Committee agreed with
management’s decision to designate
a single CGU for most the Group’s
non-current assets. Additionally,
the Committee concurred with
management’s determinations regarding
the value-creating components of
this CGU.
The Committee thoroughly
examined management’s
detailed reports on
impairment testing.
After careful review, the
Committee endorsed
the approach of using a
combination of a discounted
cash flow model and
enterprise value for
conducting the
impairment tests.
The Committee reviewed the
assumed product prices,
discount rates, production
profiles, and forecast capital
and operating expenditures,
and their consistency with
other areas of future cashflow
forecasts.
After reviewing
management’s analysis, with
particular attention to the
sensitivity analysis, the
Committee agreed with
management’s findings and
conclusions on impairment
testing. The Committee also
carefully examined the
relevant disclosures included
in this report to ensure
they accurately reflected
calculation process
and results.
Oil and gas reserves
Management exercised significant
judgment in determining the volume of
future production used in the unit-of-
production method for the depletion
of the certain oil and gas asset. This
assessment was based on the estimated
oil and gas reserves, requiring careful
evaluation to ensure accurate and
reliable calculations.
Management uses internal
estimates to perform an
annual assessment of the
oil and gas reserves. The
reserves estimation is made
in accordance with the
methodology of the Society
of Petroleum Engineers (SPE).
Considering the most recent
available information, the
Committee reviewed various
key assumptions used by
management in estimating
the oil and gas reserves
and was satisfied with the
reasonableness of such
assumptions.
The Committee remained
comfortable with the updated
reserves
estimations prepared by the
management, recognising
them as a critical factor in the
calculation of depreciation,
depletion, and impairment.
Committee actions
The Committee concurred with the
continued application of the unit-of-
production method for the depletion of
the oil & gas assets, as this method
reflects the expected pattern of
consumption of future economic
benefits by the Group.
The Committee found
assurance in the outcomes of
the oil and gas reserve
estimations, noting that the
key assumptions used were
consistent with those applied
in the previous year’s
estimations.
The Committee reviewed the
assumed product prices,
discount rates, production
profiles, and forecast capital
and operating expenditures,
and their consistency with
other areas of future cashflow
forecasts.
After reviewing
management’s analysis, with
particular attention to the
sensitivity analysis, the
Committee agreed with
management’s findings and
conclusions on impairment
testing. The Committee also
carefully examined the
relevant disclosures included
in this report to ensure they
accurately reflected the
impairment testing process
and results.
102 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
AUDIT COMMITTEE REPORT
Significant judgements Significant estimates Significant assumptions
Impact on financial statement
accounts
Non-current assets’ carrying values
In conducting the impairment analysis,
management exercised professional
judgment and determined a single cash
generating unit (CGU) within the
Group’s non-current assets. This CGU
encompasses all assets related to the
Chinarevskoye field, Stepnoy Leopard
Fields, gas treatment facilities, and
hydrocarbon processing from Ural O&G.
Furthermore, management applied
judgment in determining the fair value
less costs of disposal (FVLCD) of the
CGU. This process involved making
assumptions about how market
participants would view the value-
creating components of the CGU.
Management prepared
estimations of the CGU’s
recoverable amount using a
discounted cash flow model.
This model incorporated
significant assumptions and
took into account the overall
enterprise value. The
process involved careful
consideration of various
factors to determine the most
accurate valuation of the
CGU’s potential future
economic benefits.
Assumptions used in
estimating recoverable
amounts included future
commodity prices, oil and
gas reserves, future
production profiles,
operating expenses and
capital expenditure
estimates, fiscal regimes,
and discount rates.
Enterprise valuation
considered the market value
of the Group’s bonds and
the Company’s shares.
Changes in the key
assumptions and market
valuations may significantly
affect the estimation of the
recoverable amount of
non-current assets, and
consequently may result in
impairment of non-current
assets.
Committee actions
The Committee agreed with
management’s decision to designate
a single CGU for most the Group’s
non-current assets. Additionally,
the Committee concurred with
management’s determinations regarding
the value-creating components of
this CGU.
The Committee thoroughly
examined management’s
detailed reports on
impairment testing.
After careful review, the
Committee endorsed
the approach of using a
combination of a discounted
cash flow model and
enterprise value for
conducting the
impairment tests.
The Committee reviewed the
assumed product prices,
discount rates, production
profiles, and forecast capital
and operating expenditures,
and their consistency with
other areas of future cashflow
forecasts.
After reviewing
management’s analysis, with
particular attention to the
sensitivity analysis, the
Committee agreed with
management’s findings and
conclusions on impairment
testing. The Committee also
carefully examined the
relevant disclosures included
in this report to ensure
they accurately reflected
calculation process
and results.
Oil and gas reserves
Management exercised significant
judgment in determining the volume of
future production used in the unit-of-
production method for the depletion
of the certain oil and gas asset. This
assessment was based on the estimated
oil and gas reserves, requiring careful
evaluation to ensure accurate and
reliable calculations.
Management uses internal
estimates to perform an
annual assessment of the
oil and gas reserves. The
reserves estimation is made
in accordance with the
methodology of the Society
of Petroleum Engineers (SPE).
Considering the most recent
available information, the
Committee reviewed various
key assumptions used by
management in estimating
the oil and gas reserves
and was satisfied with the
reasonableness of such
assumptions.
The Committee remained
comfortable with the updated
reserves
estimations prepared by the
management, recognising
them as a critical factor in the
calculation of depreciation,
depletion, and impairment.
Committee actions
The Committee concurred with the
continued application of the unit-of-
production method for the depletion of
the oil & gas assets, as this method
reflects the expected pattern of
consumption of future economic
benefits by the Group.
The Committee found
assurance in the outcomes of
the oil and gas reserve
estimations, noting that the
key assumptions used were
consistent with those applied
in the previous year’s
estimations.
The Committee reviewed the
assumed product prices,
discount rates, production
profiles, and forecast capital
and operating expenditures,
and their consistency with
other areas of future cashflow
forecasts.
After reviewing
management’s analysis, with
particular attention to the
sensitivity analysis, the
Committee agreed with
management’s findings and
conclusions on impairment
testing. The Committee also
carefully examined the
relevant disclosures included
in this report to ensure they
accurately reflected the
impairment testing process
and results.
102 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Significant judgements
Significant estimates
Significant assumptions
Impact on financial statement
accounts
Taxation
Given the ongoing changes and varying
interpretations of Kazakhstan’s tax
legislation and regulations, management
must exercise significant judgment in
assessing potential exposures. This
includes estimating the ultimate amount
of any future taxes, penalties, and interest
that could arise from disagreements by
tax authorities with the positions
adopted by the Group.
The Group undergoes
routine tax audits, which
involve discussions of tax
computations with tax
authorities. While the final
outcome of these audits and
discussions cannot be
determined with absolute
certainty, management
estimates the amounts of tax
accruals and provides
appropriate disclosures.
The assumptions used in
estimating potential tax
liabilities are based on
professional advice and a
careful consideration of the
nature of ongoing
discussions with tax
authorities.
Due to the inherent
uncertainties in Kazakhstan’s
tax systems, there is a
possibility that the ultimate
amount of taxes, penalties,
and interest, if any, may
exceed the amount expensed
to date and accrued as of
31 December 2024.
Committee actions
The Committee received regular updates
from management regarding any
uncertainties surrounding the Group’s
tax position. These updates were
subsequently discussed in depth during
both Committee and Board meetings,
ensuring that all relevant parties were
informed and involved in addressing
potential tax-related challenges.
The Committee carefully
reviews the details of any
significant matters under
discussion with tax
authorities and assesses the
likelihood of taxes
becoming payable.
Areas of focus were the
nature of current discussions
with the tax authorities, the
outcomes of previous similar
discussions and the views of
tax specialists.
The Committee paid
particular attention to the
disclosure of any significant
uncertainties in estimating tax
liabilities.
Other significant judgements and estimates
The decommissioning of oil and gas assets at the end of their
economic lives, the provisioning for contingent and other liabilities,
current and deferred income tax, depreciation of the certain gas
processing assets, and fair value of financial instruments are all
areas that require management to use judgement and estimates.
The Committee examined each of these issues and sought
clarifications, as and when necessary, including discussions with
the Company’s auditors.
Significant matters communicated by the
external auditors
In addition to the significant judgments, estimates, and
assumptions outlined above, the external auditors identified
revenue risk as an area of focus, noting the inherent risk of fraud
through management override of controls. The Committee,
however, is confident that the Group’s policies and robust internal
controls are effective in mitigating these risks. These measures are
designed to minimise the potential for management to manipulate
accounting records or misappropriate assets, ensuring the integrity
of the Group’s financial reporting. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 103
Impact on financial statement
accounts
Taxation
Given the ongoing changes and varying
interpretations of Kazakhstan’s tax
legislation and regulations, management
must exercise significant judgment in
assessing potential exposures. This
includes estimating the ultimate amount
of any future taxes, penalties, and interest
that could arise from disagreements by
tax authorities with the positions
adopted by the Group.
The Group undergoes
routine tax audits, which
involve discussions of tax
computations with tax
authorities. While the final
outcome of these audits and
discussions cannot be
determined with absolute
certainty, management
estimates the amounts of tax
accruals and provides
appropriate disclosures.
The assumptions used in
estimating potential tax
liabilities are based on
professional advice and a
careful consideration of the
nature of ongoing
discussions with tax
authorities.
Due to the inherent
uncertainties in Kazakhstan’s
tax systems, there is a
possibility that the ultimate
amount of taxes, penalties,
and interest, if any, may
exceed the amount expensed
to date and accrued as of
31 December 2024.
Committee actions
The Committee received regular updates
from management regarding any
uncertainties surrounding the Group’s
tax position. These updates were
subsequently discussed in depth during
both Committee and Board meetings,
ensuring that all relevant parties were
informed and involved in addressing
potential tax-related challenges.
The Committee carefully
reviews the details of any
significant matters under
discussion with tax
authorities and assesses the
likelihood of taxes
becoming payable.
Areas of focus were the
nature of current discussions
with the tax authorities, the
outcomes of previous similar
discussions and the views of
tax specialists.
The Committee paid
particular attention to the
disclosure of any significant
uncertainties in estimating tax
liabilities.
Other significant judgements and estimates
The decommissioning of oil and gas assets at the end of their
economic lives, the provisioning for contingent and other liabilities,
current and deferred income tax, depreciation of the certain gas
processing assets, and fair value of financial instruments are all
areas that require management to use judgement and estimates.
The Committee examined each of these issues and sought
clarifications, as and when necessary, including discussions with
the Company’s auditors.
Significant matters communicated by the
external auditors
In addition to the significant judgments, estimates, and
assumptions outlined above, the external auditors identified
revenue risk as an area of focus, noting the inherent risk of fraud
through management override of controls. The Committee,
however, is confident that the Group’s policies and robust internal
controls are effective in mitigating these risks. These measures are
designed to minimise the potential for management to manipulate
accounting records or misappropriate assets, ensuring the integrity
of the Group’s financial reporting. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 103
Audit Committee report
continued
AUDIT COMMITTEE REPORT
2. Risk management and internal controls
The Committee continuously monitored the Group’s risk
management systems, further information on which can be found
in the Risk Management section on pages 34-35.
In accordance with requirements of the 2018 Code relating to the
viability statement, the Committee reviewed the impact and
sensitivity analysis of such risks on the Group’s long-term viability.
The principal areas of risk management assessed by the
Committee are described in the table below.
Key areas of the Committee’s focus in relation to principal risks:
Geopolitical
Risk
The Committee continued to oversee the
management’s assessments and responses to the
impact of worldwide sanctions on the operations
the Group. Such responses included continued
collating and regular updates of the lists of all
persons/entities sanctioned in order to ensure
Nostrum does not enter into transactions with any
of the persons/entities on these lists.
Liquidity
and financial
reporting
Throughout the year, and as explained in more
detail elsewhere in this report, the Committee has
been focused on reviews of the viability of the
Group and the application of the going concern
basis for preparing the financial statements.
Oil and gas
production
rates
The Committee recognises the oil and gas
production volumes are subject to significant risks
and uncertainties, and hence continued constant
monitoring of the forecast production rates
against actual rates. Periodic updates were
reported by the management at the Committee
meetings and Board meetings, and any material
variances were discussed in details with the
management.
Cyber
security
The Committee continued to review the
Company’s and Group’s exposure to cyber-attacks
and discussed with management the effectiveness
of proposed actions to address such exposure
Financial
reporting
The Committee seeks to ensure the accurate
maintenance of accounting records and related
transactions, and relevant disclosures, with
particular attention to areas of significant
judgements, estimations and assumptions which
are inherently subject to significant risks and
uncertainties. Such areas of focus included viability
and going concern assessments, impairment, oil
and gas reserves and production forecasts,
taxation as described in the previous section.
Internal control system
The Group’s internal control system is aimed at mitigating risks and
improving efficiency. These include:
• Segregation of authorities and duties at various levels;
• Policies and procedures covering Directors’ remuneration,
compliance, accounting and reporting and health, safety and
environment as described in the relevant sections of the
Annual Report;
• Training and internal communications; and
• Continuous monitoring of short-term, medium-term and
long-term planning, forecasting and decision-making processes.
In the Committee’s view, the Group continued to maintain a robust
and defensible systems of risk management and internal
control, and the Committee made recommendations to senior
management on further improvements as and when considered
necessary.
Details of the procedures related to compliance control are set
out below (including compliance liaison equivalent to a hotline).
No instructions for any conflict of interest settlement or compliance
control forms were in use in 2024. No sanctions or disciplinary
actions were applied in respect of internal control in 2024.
Internal Audit
The primary role of the internal audit function is to assist the Board
and senior management to protect the assets, reputation and
sustainability of the organisation. This is achieved through:
• Building strong and effective risk awareness within the Group;
• Continuously improving risk management and control processes
to ensure they operate effectively and efficiently, while reflecting
leading industry practices; and
• Sharing best practice in risk management and assurance across
the Group.
The Group does not at this time have a dedicated internal audit
function. Instead, the Group outsources this work to specialists in
relevant areas or engages internal resources on a case-by-case basis.
Also, one of the compensating measures is the Contracts Board
comprised of the Chief Executive Officer, the Chief Financial
Officer and the Chief Operating Officer.
The Contracts Board meets weekly and reviews and approves all
significant expenditure commitments.
Also, in the Committee’s view, the Group has sufficient internal
processes providing assurance to the management, Audit
Committee and the Board about the effectiveness of systems of
internal control and risk management: for instance quarterly
reports to the Board on operations, financial performance,
liquidity, and legal issues and assurance provided by Quality,
Health, Safety and the Environment (“QHSE”) Department.
104 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
AUDIT COMMITTEE REPORT
2. Risk management and internal controls
The Committee continuously monitored the Group’s risk
management systems, further information on which can be found
in the Risk Management section on pages 34-35.
In accordance with requirements of the 2018 Code relating to the
viability statement, the Committee reviewed the impact and
sensitivity analysis of such risks on the Group’s long-term viability.
The principal areas of risk management assessed by the
Committee are described in the table below.
Key areas of the Committee’s focus in relation to principal risks:
Geopolitical
Risk
The Committee continued to oversee the
management’s assessments and responses to the
impact of worldwide sanctions on the operations
the Group. Such responses included continued
collating and regular updates of the lists of all
persons/entities sanctioned in order to ensure
Nostrum does not enter into transactions with any
of the persons/entities on these lists.
Liquidity
and financial
reporting
Throughout the year, and as explained in more
detail elsewhere in this report, the Committee has
been focused on reviews of the viability of the
Group and the application of the going concern
basis for preparing the financial statements.
Oil and gas
production
rates
The Committee recognises the oil and gas
production volumes are subject to significant risks
and uncertainties, and hence continued constant
monitoring of the forecast production rates
against actual rates. Periodic updates were
reported by the management at the Committee
meetings and Board meetings, and any material
variances were discussed in details with the
management.
Cyber
security
The Committee continued to review the
Company’s and Group’s exposure to cyber-attacks
and discussed with management the effectiveness
of proposed actions to address such exposure
Financial
reporting
The Committee seeks to ensure the accurate
maintenance of accounting records and related
transactions, and relevant disclosures, with
particular attention to areas of significant
judgements, estimations and assumptions which
are inherently subject to significant risks and
uncertainties. Such areas of focus included viability
and going concern assessments, impairment, oil
and gas reserves and production forecasts,
taxation as described in the previous section.
Internal control system
The Group’s internal control system is aimed at mitigating risks and
improving efficiency. These include:
• Segregation of authorities and duties at various levels;
• Policies and procedures covering Directors’ remuneration,
compliance, accounting and reporting and health, safety and
environment as described in the relevant sections of the
Annual Report;
• Training and internal communications; and
• Continuous monitoring of short-term, medium-term and
long-term planning, forecasting and decision-making processes.
In the Committee’s view, the Group continued to maintain a robust
and defensible systems of risk management and internal
control, and the Committee made recommendations to senior
management on further improvements as and when considered
necessary.
Details of the procedures related to compliance control are set
out below (including compliance liaison equivalent to a hotline).
No instructions for any conflict of interest settlement or compliance
control forms were in use in 2024. No sanctions or disciplinary
actions were applied in respect of internal control in 2024.
Internal Audit
The primary role of the internal audit function is to assist the Board
and senior management to protect the assets, reputation and
sustainability of the organisation. This is achieved through:
• Building strong and effective risk awareness within the Group;
• Continuously improving risk management and control processes
to ensure they operate effectively and efficiently, while reflecting
leading industry practices; and
• Sharing best practice in risk management and assurance across
the Group.
The Group does not at this time have a dedicated internal audit
function. Instead, the Group outsources this work to specialists in
relevant areas or engages internal resources on a case-by-case basis.
Also, one of the compensating measures is the Contracts Board
comprised of the Chief Executive Officer, the Chief Financial
Officer and the Chief Operating Officer.
The Contracts Board meets weekly and reviews and approves all
significant expenditure commitments.
Also, in the Committee’s view, the Group has sufficient internal
processes providing assurance to the management, Audit
Committee and the Board about the effectiveness of systems of
internal control and risk management: for instance quarterly
reports to the Board on operations, financial performance,
liquidity, and legal issues and assurance provided by Quality,
Health, Safety and the Environment (“QHSE”) Department.
104 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
3. Compliance with laws and regulations
The Chief Legal Officer and Company Secretary attends the
Committee’s meetings, which allows the Committee to raise any
concerns related to legal, compliance or whistleblowing matters
and the status of any ongoing litigation.
UK Corporate Governance Code
The Committee was in compliance with the Code throughout 2024,
except that (in breach of provision 21 of the Code) no formal review
of the Committee’s performance and effectiveness was made in
2024. An internal/informal performance review took place.
Whistleblowing arrangements
Nostrum has a Group Whistleblowing Policy and, to ensure that all
Group employees have access to someone who can provide them
with support and guidance, the Group has two compliance liaison
officers: one English, Kazakh and Russian-speaking officer based in
Uralsk and another Dutch and English-speaking officer based in
Brussels. The Audit Committee maintained close contact with the
compliance liaison officers. No whistleblowing disclosures were
reported in 2024.
4. External audit
Appointment of external auditor
Since 2023, MHA and Ernst & Young Kazakhstan have been
auditors of the Group and Zhaikmunai LLP, respectively. On the
recommendation of the Committee and subsequent approval by
the Company’s shareholders, MHA was first appointed as auditors
of the Group on 30 June 2023. The re-appointment of MHA was
approved by the shareholders at the Annual General Meeting on
5 June 2024.
Non-audit services
The main principle of the Group’s policy on the provision of
non-audit services by the external auditor is that non-audit services
may only be provided by the external auditor where the external
auditor maintains the necessary degree of independence and
objectivity, and that standard supplier selection procedures are
carried out.
Committee pre-approval is required before the external auditor is
engaged to provide any permitted non-audit services (as defined
in the policy) in addition to any other approvals required by the
Board and management pursuant to powers delegated by the
Board or Nostrum’s internal approvals policies.
The Committee monitors the external auditor to ensure that it does
not provide non-audit services that are prohibited by the FRC and
limits such services to due diligence services and other assurance
services. The revised policy is available on the Group’s website at
www.nog.co.uk and will be reviewed and amended as and when
required.
Audit fees for 2024 totaled US$1,237 thousand (2023: US$1,116
thousand).
A detailed breakdown of audit and non-audit fees for 2024 can be
found in Note 30 to the consolidated financial statements of the
Group on page 161.
By operating in accordance with the above policy and other
practices established within the Group, the Committee was
satisfied that adequate safeguards were in place to ensure the
objectivity and independence of the external auditor. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 105
The Chief Legal Officer and Company Secretary attends the
Committee’s meetings, which allows the Committee to raise any
concerns related to legal, compliance or whistleblowing matters
and the status of any ongoing litigation.
UK Corporate Governance Code
The Committee was in compliance with the Code throughout 2024,
except that (in breach of provision 21 of the Code) no formal review
of the Committee’s performance and effectiveness was made in
2024. An internal/informal performance review took place.
Whistleblowing arrangements
Nostrum has a Group Whistleblowing Policy and, to ensure that all
Group employees have access to someone who can provide them
with support and guidance, the Group has two compliance liaison
officers: one English, Kazakh and Russian-speaking officer based in
Uralsk and another Dutch and English-speaking officer based in
Brussels. The Audit Committee maintained close contact with the
compliance liaison officers. No whistleblowing disclosures were
reported in 2024.
4. External audit
Appointment of external auditor
Since 2023, MHA and Ernst & Young Kazakhstan have been
auditors of the Group and Zhaikmunai LLP, respectively. On the
recommendation of the Committee and subsequent approval by
the Company’s shareholders, MHA was first appointed as auditors
of the Group on 30 June 2023. The re-appointment of MHA was
approved by the shareholders at the Annual General Meeting on
5 June 2024.
Non-audit services
The main principle of the Group’s policy on the provision of
non-audit services by the external auditor is that non-audit services
may only be provided by the external auditor where the external
auditor maintains the necessary degree of independence and
objectivity, and that standard supplier selection procedures are
carried out.
Committee pre-approval is required before the external auditor is
engaged to provide any permitted non-audit services (as defined
in the policy) in addition to any other approvals required by the
Board and management pursuant to powers delegated by the
Board or Nostrum’s internal approvals policies.
The Committee monitors the external auditor to ensure that it does
not provide non-audit services that are prohibited by the FRC and
limits such services to due diligence services and other assurance
services. The revised policy is available on the Group’s website at
www.nog.co.uk and will be reviewed and amended as and when
required.
Audit fees for 2024 totaled US$1,237 thousand (2023: US$1,116
thousand).
A detailed breakdown of audit and non-audit fees for 2024 can be
found in Note 30 to the consolidated financial statements of the
Group on page 161.
By operating in accordance with the above policy and other
practices established within the Group, the Committee was
satisfied that adequate safeguards were in place to ensure the
objectivity and independence of the external auditor. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 105
GRI 2-10
Nomination and Governance
Committee report
NOMINATION AND GOVERNANCE
COMMITTEE REPORT
Committee meetings
There were three formal meetings of the Nomination and
Governance Committee during 2024. The attendance of each
Committee member at Committee meetings held during 2024
is shown on page 93.
The principal agenda items at the formal meetings were as follows:
Meetings Agenda item
March Consideration of potential new NED
April Consideration of potential new NED
May Consideration of potential new NED
Only members of the Committee have the right to attend
Committee meetings.
However, other individuals may be invited to attend all or part
of any meeting, as and when appropriate.
The process used in relation to appointments, its approach to
succession planning and how both support developing a diverse
pipeline.
Please refer to the Committee’s terms of reference. All Directors
will stand for re-election at the 2025 Annual General Meeting with
the full support of the Board.
How the board evaluation has been conducted, the nature and
extent of an external evaluator’s contact with the board and
individual directors, the outcomes and actions taken, and how
it has or will influence board composition.
An informal (internal) Board evaluation took place during 2024.
The policy on diversity and inclusion, its objectives and linkage to
Company strategy, how it has been implemented and progress on
achieving the objectives.
Please see pages 62-66.
The gender balance of those in the senior management and their
direct reports.
Please see pages 62-63.
Key responsibilities of the Nomination
and Governance Committee
The key responsibilities of the Committee in 2024 were to:
• Lead the process for Board appointments and make
recommendations to the Board regarding candidates for
appointment or reappointment as Directors;
• Monitor and make recommendations to the Board on Board
governance and corporate governance issues, to enable the
Board to operate effectively and efficiently;
• Regularly review the structure, size and composition (including
skills, knowledge and experience) of the Board;
• Ensure that an annual review of the effectiveness of the Board,
and each committee of the Board, and the contribution of each
director is conducted every year, with an independent external
review at least every three years;
• Keep under review the leadership needs of the Company, both
executive and non-executive, with a view to ensuring the
continued ability of the Company to compete effectively in
the marketplace;
• Review annually the time required from Non-Executive
Directors.
• Review and approve changes to the Board’s governance
guidelines, monitor the compliance with such guidelines and
with applicable legal, regulatory and listing requirements and
recommend to the Board such changes or additional action as
it deems necessary;
• Require Directors to obtain approval from the Board before
undertaking additional external appointments.
More details on key responsibilities can be found in the
Committee’s terms of reference, which are available on the
Group’s website at www.nog.co.uk. The terms of reference of
the Committee were approved at a meeting of the Board on
26 April 2023.
Membership
The members of the Committee during 2024 were:
Name
Membership
start date
Membership
end date
Chris Cox (Chairman until
31 May 2024)
24 February
2023
31 May 2024
Chris Hopkinson 24 February
2023
Fiona Paulus 24 February
2023
Martin Gudgeon (acting
Chairman from 1 June 2024)
24 February
2023
Stephen Whyte 24 February
2023
106 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Nomination and Governance
Committee report
NOMINATION AND GOVERNANCE
COMMITTEE REPORT
Committee meetings
There were three formal meetings of the Nomination and
Governance Committee during 2024. The attendance of each
Committee member at Committee meetings held during 2024
is shown on page 93.
The principal agenda items at the formal meetings were as follows:
Meetings Agenda item
March Consideration of potential new NED
April Consideration of potential new NED
May Consideration of potential new NED
Only members of the Committee have the right to attend
Committee meetings.
However, other individuals may be invited to attend all or part
of any meeting, as and when appropriate.
The process used in relation to appointments, its approach to
succession planning and how both support developing a diverse
pipeline.
Please refer to the Committee’s terms of reference. All Directors
will stand for re-election at the 2025 Annual General Meeting with
the full support of the Board.
How the board evaluation has been conducted, the nature and
extent of an external evaluator’s contact with the board and
individual directors, the outcomes and actions taken, and how
it has or will influence board composition.
An informal (internal) Board evaluation took place during 2024.
The policy on diversity and inclusion, its objectives and linkage to
Company strategy, how it has been implemented and progress on
achieving the objectives.
Please see pages 62-66.
The gender balance of those in the senior management and their
direct reports.
Please see pages 62-63.
Key responsibilities of the Nomination
and Governance Committee
The key responsibilities of the Committee in 2024 were to:
• Lead the process for Board appointments and make
recommendations to the Board regarding candidates for
appointment or reappointment as Directors;
• Monitor and make recommendations to the Board on Board
governance and corporate governance issues, to enable the
Board to operate effectively and efficiently;
• Regularly review the structure, size and composition (including
skills, knowledge and experience) of the Board;
• Ensure that an annual review of the effectiveness of the Board,
and each committee of the Board, and the contribution of each
director is conducted every year, with an independent external
review at least every three years;
• Keep under review the leadership needs of the Company, both
executive and non-executive, with a view to ensuring the
continued ability of the Company to compete effectively in
the marketplace;
• Review annually the time required from Non-Executive
Directors.
• Review and approve changes to the Board’s governance
guidelines, monitor the compliance with such guidelines and
with applicable legal, regulatory and listing requirements and
recommend to the Board such changes or additional action as
it deems necessary;
• Require Directors to obtain approval from the Board before
undertaking additional external appointments.
More details on key responsibilities can be found in the
Committee’s terms of reference, which are available on the
Group’s website at www.nog.co.uk. The terms of reference of
the Committee were approved at a meeting of the Board on
26 April 2023.
Membership
The members of the Committee during 2024 were:
Name
Membership
start date
Membership
end date
Chris Cox (Chairman until
31 May 2024)
24 February
2023
31 May 2024
Chris Hopkinson 24 February
2023
Fiona Paulus 24 February
2023
Martin Gudgeon (acting
Chairman from 1 June 2024)
24 February
2023
Stephen Whyte 24 February
2023
106 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
GRI 2-19
Statement from the Remuneration
Committee Chairman
REMUNERATION COMMITTEE REPORT
Dear shareholder,
I am pleased to introduce the Directors’ Remuneration Report,
which has been approved by both the Remuneration Committee
and the Board for the year ended 31 December 2024.
Remuneration Policy
The aim of our Directors’ Remuneration Policy, amongst other
things, is to align the remuneration of non-executive and executive
directors with the interests of the Company’s shareholders and to
ensure that rewards are justified by performance.
As noted elsewhere in this Annual Report, in accordance with
the Companies Act 2006 a resolution to approve an amended
Directors’ Remuneration Policy was submitted to shareholders
for a binding vote at the General Meeting held on 11 July 2024
and was approved by 99.77% of votes cast. The principal changes
approved were:
• the adoption of a new Management Incentive Plan (the “MIP”);
and
• to permit all Directors (including the Chairman and
Non-executive Directors) to participate in the MIP.
Remuneration for 2024
The 2024 Directors’ Remuneration Report will also be subject to an
advisory vote at our 2025 Annual General Meeting. Further details
of Executive Director performance against the 2024 KPIs can be
found on pages 109-124. In setting these targets, the Committee
focused on areas critical for the Company, which were:
• Minimising annual decline of average sales volumes;
• Reducing operational and G&A cash costs;
• Pursuing strategic objectives to monetise the spare capacity
within our world-class processing facilities;
• Ensuring all of our operations are carried out as safely as
possible; and
• Actively managing our greenhouse gas emissions.
Our strategic targets all remain commercially sensitive and,
therefore, have not been disclosed.
Mr Khan is the only person who served as an Executive Director
during 2024 who has been assessed for a bonus against
achievement of these KPIs. The assessment was prepared by the
Remuneration Committee and was considered and agreed by the
Committee on 25 March 2025. It was determined that 100% of the
2024 KPIs had been achieved over the year 2024 (GBP 450,000).
The 2025 key performance indicators for the CEO and senior
managers were initially proposed by the CEO and then developed
in consultation with the Remuneration Committee and were
agreed by the Committee on 25 March 2025. Such KPIs are set
out on page 117.
Senior management, including the CEO and the CFO, are assessed
for bonuses based on these KPIs. Certain KPIs relating to strategic
objectives are considered to be commercially sensitive and so have
not been disclosed. It is our intention to publish these, together
with the bonus outcome, as required in the first Directors’
Remuneration Report following their achievement and when the
relevant information is no longer commercially sensitive.
The first awards under MIP were released in July 2024 following
achievement of the performance conditions for these awards.
As regards the Group’s personnel as a whole, the collective
agreement with employees of the Company’s subsidiary
Zhaikmunai LLP working in the RoK provides for annual indexation
of salaries. Effective 1 January 2024 an increase of 10% was
granted to employees who are paid in Kazakh Tenge to cover
the increase in the cost of living there during 2023.
Mr Khan did not receive any salary increase in 2024. Any increase
set out in the single total remuneration table in relation to Arfan
Khan relates to deterioration of USD (in which reporting is made)
relative to GBP (in which Mr Khan is paid), his annual bonus or
payments under the MIP.
Since 14 February 2023, fees payable to the independent non-
executive Directors have been set at US$100,000 per annum,
plus US$10,000 per annum for committee chairmanship.
UK Corporate Governance Code
Information on compliance with the Code can be found on
pages 88-89.
The Committee has addressed the factors in Provision 40 of the
Code as to clarity, simplicity, risk and predictability by refining the
CEO’s KPIs applying in 2025 relative to those which applied in 2024
to (a) reduce ambiguity; and (b) increase the level of granularity.
Compliance statement
This report has been prepared in accordance with the UK’s
regulations on remuneration reporting. The Companies Act 2006
requires the Company’s auditor to report to shareholders on
certain parts of the Directors’ Remuneration Report and to state
whether, in the auditor’s opinion, those parts of the report have
been properly prepared in accordance with the above regulations.
This Annual Statement and the Policy Report are not subject to
audit. The sections of the Directors’ Remuneration Report that are
subject to audit are indicated accordingly.
On behalf of the Committee, I would like to thank shareholders for
their continuing support.
Chris Hopkinson
Chairman, Remuneration Committee
Independent Non-Executive Director
22 April 2025 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 107
Statement from the Remuneration
Committee Chairman
REMUNERATION COMMITTEE REPORT
Dear shareholder,
I am pleased to introduce the Directors’ Remuneration Report,
which has been approved by both the Remuneration Committee
and the Board for the year ended 31 December 2024.
Remuneration Policy
The aim of our Directors’ Remuneration Policy, amongst other
things, is to align the remuneration of non-executive and executive
directors with the interests of the Company’s shareholders and to
ensure that rewards are justified by performance.
As noted elsewhere in this Annual Report, in accordance with
the Companies Act 2006 a resolution to approve an amended
Directors’ Remuneration Policy was submitted to shareholders
for a binding vote at the General Meeting held on 11 July 2024
and was approved by 99.77% of votes cast. The principal changes
approved were:
• the adoption of a new Management Incentive Plan (the “MIP”);
and
• to permit all Directors (including the Chairman and
Non-executive Directors) to participate in the MIP.
Remuneration for 2024
The 2024 Directors’ Remuneration Report will also be subject to an
advisory vote at our 2025 Annual General Meeting. Further details
of Executive Director performance against the 2024 KPIs can be
found on pages 109-124. In setting these targets, the Committee
focused on areas critical for the Company, which were:
• Minimising annual decline of average sales volumes;
• Reducing operational and G&A cash costs;
• Pursuing strategic objectives to monetise the spare capacity
within our world-class processing facilities;
• Ensuring all of our operations are carried out as safely as
possible; and
• Actively managing our greenhouse gas emissions.
Our strategic targets all remain commercially sensitive and,
therefore, have not been disclosed.
Mr Khan is the only person who served as an Executive Director
during 2024 who has been assessed for a bonus against
achievement of these KPIs. The assessment was prepared by the
Remuneration Committee and was considered and agreed by the
Committee on 25 March 2025. It was determined that 100% of the
2024 KPIs had been achieved over the year 2024 (GBP 450,000).
The 2025 key performance indicators for the CEO and senior
managers were initially proposed by the CEO and then developed
in consultation with the Remuneration Committee and were
agreed by the Committee on 25 March 2025. Such KPIs are set
out on page 117.
Senior management, including the CEO and the CFO, are assessed
for bonuses based on these KPIs. Certain KPIs relating to strategic
objectives are considered to be commercially sensitive and so have
not been disclosed. It is our intention to publish these, together
with the bonus outcome, as required in the first Directors’
Remuneration Report following their achievement and when the
relevant information is no longer commercially sensitive.
The first awards under MIP were released in July 2024 following
achievement of the performance conditions for these awards.
As regards the Group’s personnel as a whole, the collective
agreement with employees of the Company’s subsidiary
Zhaikmunai LLP working in the RoK provides for annual indexation
of salaries. Effective 1 January 2024 an increase of 10% was
granted to employees who are paid in Kazakh Tenge to cover
the increase in the cost of living there during 2023.
Mr Khan did not receive any salary increase in 2024. Any increase
set out in the single total remuneration table in relation to Arfan
Khan relates to deterioration of USD (in which reporting is made)
relative to GBP (in which Mr Khan is paid), his annual bonus or
payments under the MIP.
Since 14 February 2023, fees payable to the independent non-
executive Directors have been set at US$100,000 per annum,
plus US$10,000 per annum for committee chairmanship.
UK Corporate Governance Code
Information on compliance with the Code can be found on
pages 88-89.
The Committee has addressed the factors in Provision 40 of the
Code as to clarity, simplicity, risk and predictability by refining the
CEO’s KPIs applying in 2025 relative to those which applied in 2024
to (a) reduce ambiguity; and (b) increase the level of granularity.
Compliance statement
This report has been prepared in accordance with the UK’s
regulations on remuneration reporting. The Companies Act 2006
requires the Company’s auditor to report to shareholders on
certain parts of the Directors’ Remuneration Report and to state
whether, in the auditor’s opinion, those parts of the report have
been properly prepared in accordance with the above regulations.
This Annual Statement and the Policy Report are not subject to
audit. The sections of the Directors’ Remuneration Report that are
subject to audit are indicated accordingly.
On behalf of the Committee, I would like to thank shareholders for
their continuing support.
Chris Hopkinson
Chairman, Remuneration Committee
Independent Non-Executive Director
22 April 2025 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 107
REMUNERATION COMMITTEE REPORT
2024 annual report
on remuneration
Remuneration Committee
The remuneration of the Chairman, the CEO, the CFO, the
Company Secretary and all other senior members of executive
management is determined by the Committee under delegated
powers from the Board and in accordance with the Committee’s
terms of reference. The Chairman and the executive members of
the Board determine the remuneration of all Non-Executive
Directors, including members of the Committees.
In accordance with the terms of reference, members of
the Committee shall be appointed by the Board on the
recommendation of the Nomination and Governance Committee
in consultation with the Chair of the Committee. The Committee
shall comprise at least three members, the majority of whom shall
be INEDs and one of whom shall be the Warrant Director.
From 1 January 2024 to 31 May 2024 the Committee was
comprised of three INEDs and the Warrant Director. From 1 June
2024 to 31 December 2024 the Committee was comprised of two
INEDs and the Warrant Director.
The primary responsibilities of the Committee are set out in its
terms of reference which are reviewed and updated annually, and
which are available to download from the Company’s website.
Alternatively, copies can be obtained on request from the
Company Secretary.
When making recommendations to the Board regarding Executive
Directors’ remuneration the Committee is able to consider
corporate performance on environmental, social and governance
issues and ensures that any incentive structures do not raise any
environmental, social or governance risks by inadvertently
motivating irresponsible behaviour.
The Committee held two meetings in 2024 and the attendance of
each committee member at such meeting is shown on page 93.
The principal agenda items at the meetings were as follows:
Meetings Agenda item
February Performance against 2023 KPIs
March Approval of 2024 KPIs
No other Directors participated in meetings of the Committee
during 2024.
Key responsibilities of the
Remuneration Committee
The Committee’s key responsibilities include ensuring that:
• Remuneration policy and practices of the Company are
designed to support strategy and promote long-term
sustainable success, reward fairly and responsibly, with a clear
link to corporate and individual performance, having regard to
statutory and regulatory requirements; and
• Executive remuneration is aligned to company purpose and
values and linked to delivery of the Company’s long-term
strategy.
Membership
The members of the Committee during 2024 were:
Name
Membership
start date
Membership
end date
Chris Hopkinson (Chairman) 24 February
2023
Fiona Paulus 24 February
2023
Chris Cox 24 February
2023
31 May 2024
Martin Gudgeon 24 February
2023
Their biographies are given on pages 90-91. The Company
Secretary acts as secretary to the Committee.
108 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
2024 annual report
on remuneration
Remuneration Committee
The remuneration of the Chairman, the CEO, the CFO, the
Company Secretary and all other senior members of executive
management is determined by the Committee under delegated
powers from the Board and in accordance with the Committee’s
terms of reference. The Chairman and the executive members of
the Board determine the remuneration of all Non-Executive
Directors, including members of the Committees.
In accordance with the terms of reference, members of
the Committee shall be appointed by the Board on the
recommendation of the Nomination and Governance Committee
in consultation with the Chair of the Committee. The Committee
shall comprise at least three members, the majority of whom shall
be INEDs and one of whom shall be the Warrant Director.
From 1 January 2024 to 31 May 2024 the Committee was
comprised of three INEDs and the Warrant Director. From 1 June
2024 to 31 December 2024 the Committee was comprised of two
INEDs and the Warrant Director.
The primary responsibilities of the Committee are set out in its
terms of reference which are reviewed and updated annually, and
which are available to download from the Company’s website.
Alternatively, copies can be obtained on request from the
Company Secretary.
When making recommendations to the Board regarding Executive
Directors’ remuneration the Committee is able to consider
corporate performance on environmental, social and governance
issues and ensures that any incentive structures do not raise any
environmental, social or governance risks by inadvertently
motivating irresponsible behaviour.
The Committee held two meetings in 2024 and the attendance of
each committee member at such meeting is shown on page 93.
The principal agenda items at the meetings were as follows:
Meetings Agenda item
February Performance against 2023 KPIs
March Approval of 2024 KPIs
No other Directors participated in meetings of the Committee
during 2024.
Key responsibilities of the
Remuneration Committee
The Committee’s key responsibilities include ensuring that:
• Remuneration policy and practices of the Company are
designed to support strategy and promote long-term
sustainable success, reward fairly and responsibly, with a clear
link to corporate and individual performance, having regard to
statutory and regulatory requirements; and
• Executive remuneration is aligned to company purpose and
values and linked to delivery of the Company’s long-term
strategy.
Membership
The members of the Committee during 2024 were:
Name
Membership
start date
Membership
end date
Chris Hopkinson (Chairman) 24 February
2023
Fiona Paulus 24 February
2023
Chris Cox 24 February
2023
31 May 2024
Martin Gudgeon 24 February
2023
Their biographies are given on pages 90-91. The Company
Secretary acts as secretary to the Committee.
108 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
GRI 2-19,
2-20
During the year, the Committee received advice internally from Arfan Khan, Petro Mychalkiw and Thomas Hartnett (Company Secretary).
Mr Khan and Mr Mychalkiw were consulted on the remuneration of the other senior members of executive management and on matters
relating to the performance of the Company. The Company Secretary was consulted on regulatory requirements.
None of Mr Khan, Mr Mychalkiw and Mr Hartnett participated in decisions on his own remuneration.
Members of the Group’s human resources team may attend relevant portions of Committee meetings to ensure appropriate input on
matters related to the remuneration of senior members of the executive management team below Board level.
Voting on remuneration matters
The resolution put to shareholders at the 2024 Annual General Meeting relating to Directors’ remuneration was a resolution to approve
the Directors’ annual report on remuneration which, in accordance with the Companies Act 2006, was subject to an advisory vote. The
votes received are set out in the table below.
Resolution Votes FOR % of votes cast
Votes
AGAINST % of votes cast
Votes
WITHHELD
To approve the Directors’ Remuneration Report, other than the
part containing the Directors’ Remuneration Policy, in the form
set out in the Company’s Annual Report and Accounts for the
year ended 31 December 2023.
87,364,363 99.90 89,081 0.10 87,453,444
The resolution put to shareholders at the General Meeting held on 11 July 2024 was a resolution to approve a new remuneration policy
which, in accordance with the Companies Act 2006, was submitted to shareholders for a binding vote. The votes received are set out in
the table below.
Resolution Votes FOR % of votes cast
Votes
AGAINST % of votes cast
Votes
WITHHELD
To approve the amendments to the current Company’s Directors’
Remuneration Policy as set out in the Notice of GM, and to
authorise the Company to make any remuneration payment
pursuant to any such amended provisions and to do all acts and
things it may consider necessary or desirable in connection with
the same.
89,560,151 99.77 209,315 0.23 89,769,466
At the 2025 Annual General Meeting, the Directors’ remuneration report will be put to shareholders for approval by way of an advisory vote. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 109
2-20
During the year, the Committee received advice internally from Arfan Khan, Petro Mychalkiw and Thomas Hartnett (Company Secretary).
Mr Khan and Mr Mychalkiw were consulted on the remuneration of the other senior members of executive management and on matters
relating to the performance of the Company. The Company Secretary was consulted on regulatory requirements.
None of Mr Khan, Mr Mychalkiw and Mr Hartnett participated in decisions on his own remuneration.
Members of the Group’s human resources team may attend relevant portions of Committee meetings to ensure appropriate input on
matters related to the remuneration of senior members of the executive management team below Board level.
Voting on remuneration matters
The resolution put to shareholders at the 2024 Annual General Meeting relating to Directors’ remuneration was a resolution to approve
the Directors’ annual report on remuneration which, in accordance with the Companies Act 2006, was subject to an advisory vote. The
votes received are set out in the table below.
Resolution Votes FOR % of votes cast
Votes
AGAINST % of votes cast
Votes
WITHHELD
To approve the Directors’ Remuneration Report, other than the
part containing the Directors’ Remuneration Policy, in the form
set out in the Company’s Annual Report and Accounts for the
year ended 31 December 2023.
87,364,363 99.90 89,081 0.10 87,453,444
The resolution put to shareholders at the General Meeting held on 11 July 2024 was a resolution to approve a new remuneration policy
which, in accordance with the Companies Act 2006, was submitted to shareholders for a binding vote. The votes received are set out in
the table below.
Resolution Votes FOR % of votes cast
Votes
AGAINST % of votes cast
Votes
WITHHELD
To approve the amendments to the current Company’s Directors’
Remuneration Policy as set out in the Notice of GM, and to
authorise the Company to make any remuneration payment
pursuant to any such amended provisions and to do all acts and
things it may consider necessary or desirable in connection with
the same.
89,560,151 99.77 209,315 0.23 89,769,466
At the 2025 Annual General Meeting, the Directors’ remuneration report will be put to shareholders for approval by way of an advisory vote. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 109
2024 annual report on remuneration
continued
2024 ANNUAL REPORT ON REMUNERATION
Single total figure of remuneration
The table below shows the single total figure of remuneration for the year ended 31 December 2024 for each Director that served at any
time during the year. The information contained in the table is as prescribed by the Large and Medium-sized Companies and Groups
(Accounts and Reports) (Amendment) Regulations 2013 and contains a single total figure of remuneration for each Director.
Directors are remunerated in either GBP, US$ or KZT. All figures in relation to Director remuneration are reported in USD throughout this report.
All amounts in US Dollars
Director 1 Period
Salary
and fees
Taxable
benefits*
Annual
bonus 2 MIP3 LTIP4 Pension 5
Total
(audited)
Total
fixed
remun-
eration
Total
variable
remun-
eration
Stephen Whyte 6 2024 303,515 − − 137,148 − − 440,662 303,515 137,148
(Chairman,
Non-Executive Director) 2023 259,038 − − − − − 259,038 259,038 −
Atul Gupta 7 2024 37,500 130 − − − − 37,630 37,630 −
(Executive Chairman) 2023 538,748 3,967 − − − − 542,715 542,715 −
Arfan Khan 8 2024 573,043 29,306 583,556 233,169 − 56,159 1,475,233 658,508 816,725
(Chief Executive Officer) 2023 608,516 28,183 858,434 − − 40,378 1,535,511 755,116 858,434
Fiona Paulus 6 2024 110,000 − − 48,823 − − 158,823 110,000 48,823
(Non-Executive Director) 2023 95,897 − − − − − 95,897 95,897 −
Chris Cox 6 2024 75,833 − − − − − 75,833 75,833 −
(Non-Executive Director) 2023 95,897 − − − − − 95,897 95,897 −
Chris Hopkinson 6 2024 110,000 − − 48,823 − − 158,823 110,000 48,823
(Non-Executive Director) 2023 95,897 − − − − − 95,897 95,897 −
Martin Gudgeon 6 2024 104,167 − − 48,823 − − 152,989 104,167 48,823
(Non-Executive Director) 2023 91,667 − − − − − 91,667 91,667 −
Viktor Gladun 9 2024 37,366 − − − − − 37,366 37,366 −
(Non-Executive Director) 2023 − − − − − − − − −
Martin Cocker 10 2024 − − − − − − − − −
(Non-Executive Director) 2023 24,615 − − − − − 24,615 24,615 −
Sir Christopher Codrington, Bt. 10 2024 − − − − − − − − −
(Non-Executive Director) 2023 24,615 − − − − − 24,615 24,615 −
Kaat Van Hecke 10 2024 − − − − − − − − −
(Non-Executive Director) 2023 24,615 − − − − − 24,615 24,615 −
1. Stephen Whyte was remunerated in GBP and US$, Fiona Paulus, Chris Cox, Chris Hopkinson, Martin Gudgeon, Viktor Gladun, Atul Gupta and Martin Cocker were
remunerated in US$, Arfan Khan was remunerated in GBP and KZT and Kaat van Hecke was remunerated in EUR. For the purposes of this table, the following
exchange rates have been used:
2024: GBP: EUR 1.179; EUR: US$1.085; US$: KZT 503.82
2023: GBP: EUR 1.149; EUR: US$1.082; US$: KZT 456.13
2. Arfan Khan received a bonus for his contribution to the operating, commercial, strategic and environmental objectives of the Group in 2024 and 2023. None of the
bonus awarded to Arfan Khan was in relation to the appreciation or depreciation of the Company’s share price. No other Executive Directors received bonuses in
respect of 2024 or 2023.
3. Awards were released under the Management Incentive Plan (MIP) in 2024 following the satisfaction of the performance conditions for such awards.
4. Awards made under the LTIP in 2017 have vested but no awards have been exercised by the Executive Directors in respect of such awards. No awards made under
the LTIP in 2018 are capable of vesting as the performance conditions were not met in 2018. No awards were made under the LTIP in 2023 or 2022.
5. The Company did not operate a pension scheme for Executive Directors in 2024 or 2023 but may make a pension contribution or a payment in lieu of pension
contributions to Executive Directors under their employment contracts as executives of the Group as opposed to under their service agreements as Directors of
the Company. The total amount paid to Executive Directors in 2024 in lieu of pension contributions was US$ 56,159 (2023: US$ 40,378). Executive Directors are not
entitled to any additional benefit if they retire early.
6. 2023 amounts shown for Stephen Whyte, Fiona Paulus, Chris Cox, Chris Hopkinson and Martin Gudgeon represent their remuneration received from the date of
their appointment as Directors of the Company on 14 February 2023.
7. Atul Gupta received remuneration for his term of service until 14 February 2023 and monthly payments in lieu of 12 months’ notice subsequent to 14 February 2023
and a payment of $3,462 in lieu of all accrued but unused holidays entitlement.
8. The presentation of the remuneration of Arfan Khan for 2023 was amended from previous years disclosure, to correctly classify the payroll taxes attributable to
annual bonus (US$78,039), which were previously included in salary and fees category.
9. Viktor Gladun received remuneration from the date of his appointment as a Director of the Company on 15 August 2024.
10. Martin Cocker, Sir Christopher Codrington and Kaat van Hecke were paid fees of $120,000 per annum. No additional amounts were payable for being Chair of any
of the Board’s committees nor the Senior Independent Non-Executive Director.
* Taxable benefits include travel, medical, disability insurances and other benefits.
110 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
2024 ANNUAL REPORT ON REMUNERATION
Single total figure of remuneration
The table below shows the single total figure of remuneration for the year ended 31 December 2024 for each Director that served at any
time during the year. The information contained in the table is as prescribed by the Large and Medium-sized Companies and Groups
(Accounts and Reports) (Amendment) Regulations 2013 and contains a single total figure of remuneration for each Director.
Directors are remunerated in either GBP, US$ or KZT. All figures in relation to Director remuneration are reported in USD throughout this report.
All amounts in US Dollars
Director 1 Period
Salary
and fees
Taxable
benefits*
Annual
bonus 2 MIP3 LTIP4 Pension 5
Total
(audited)
Total
fixed
remun-
eration
Total
variable
remun-
eration
Stephen Whyte 6 2024 303,515 − − 137,148 − − 440,662 303,515 137,148
(Chairman,
Non-Executive Director) 2023 259,038 − − − − − 259,038 259,038 −
Atul Gupta 7 2024 37,500 130 − − − − 37,630 37,630 −
(Executive Chairman) 2023 538,748 3,967 − − − − 542,715 542,715 −
Arfan Khan 8 2024 573,043 29,306 583,556 233,169 − 56,159 1,475,233 658,508 816,725
(Chief Executive Officer) 2023 608,516 28,183 858,434 − − 40,378 1,535,511 755,116 858,434
Fiona Paulus 6 2024 110,000 − − 48,823 − − 158,823 110,000 48,823
(Non-Executive Director) 2023 95,897 − − − − − 95,897 95,897 −
Chris Cox 6 2024 75,833 − − − − − 75,833 75,833 −
(Non-Executive Director) 2023 95,897 − − − − − 95,897 95,897 −
Chris Hopkinson 6 2024 110,000 − − 48,823 − − 158,823 110,000 48,823
(Non-Executive Director) 2023 95,897 − − − − − 95,897 95,897 −
Martin Gudgeon 6 2024 104,167 − − 48,823 − − 152,989 104,167 48,823
(Non-Executive Director) 2023 91,667 − − − − − 91,667 91,667 −
Viktor Gladun 9 2024 37,366 − − − − − 37,366 37,366 −
(Non-Executive Director) 2023 − − − − − − − − −
Martin Cocker 10 2024 − − − − − − − − −
(Non-Executive Director) 2023 24,615 − − − − − 24,615 24,615 −
Sir Christopher Codrington, Bt. 10 2024 − − − − − − − − −
(Non-Executive Director) 2023 24,615 − − − − − 24,615 24,615 −
Kaat Van Hecke 10 2024 − − − − − − − − −
(Non-Executive Director) 2023 24,615 − − − − − 24,615 24,615 −
1. Stephen Whyte was remunerated in GBP and US$, Fiona Paulus, Chris Cox, Chris Hopkinson, Martin Gudgeon, Viktor Gladun, Atul Gupta and Martin Cocker were
remunerated in US$, Arfan Khan was remunerated in GBP and KZT and Kaat van Hecke was remunerated in EUR. For the purposes of this table, the following
exchange rates have been used:
2024: GBP: EUR 1.179; EUR: US$1.085; US$: KZT 503.82
2023: GBP: EUR 1.149; EUR: US$1.082; US$: KZT 456.13
2. Arfan Khan received a bonus for his contribution to the operating, commercial, strategic and environmental objectives of the Group in 2024 and 2023. None of the
bonus awarded to Arfan Khan was in relation to the appreciation or depreciation of the Company’s share price. No other Executive Directors received bonuses in
respect of 2024 or 2023.
3. Awards were released under the Management Incentive Plan (MIP) in 2024 following the satisfaction of the performance conditions for such awards.
4. Awards made under the LTIP in 2017 have vested but no awards have been exercised by the Executive Directors in respect of such awards. No awards made under
the LTIP in 2018 are capable of vesting as the performance conditions were not met in 2018. No awards were made under the LTIP in 2023 or 2022.
5. The Company did not operate a pension scheme for Executive Directors in 2024 or 2023 but may make a pension contribution or a payment in lieu of pension
contributions to Executive Directors under their employment contracts as executives of the Group as opposed to under their service agreements as Directors of
the Company. The total amount paid to Executive Directors in 2024 in lieu of pension contributions was US$ 56,159 (2023: US$ 40,378). Executive Directors are not
entitled to any additional benefit if they retire early.
6. 2023 amounts shown for Stephen Whyte, Fiona Paulus, Chris Cox, Chris Hopkinson and Martin Gudgeon represent their remuneration received from the date of
their appointment as Directors of the Company on 14 February 2023.
7. Atul Gupta received remuneration for his term of service until 14 February 2023 and monthly payments in lieu of 12 months’ notice subsequent to 14 February 2023
and a payment of $3,462 in lieu of all accrued but unused holidays entitlement.
8. The presentation of the remuneration of Arfan Khan for 2023 was amended from previous years disclosure, to correctly classify the payroll taxes attributable to
annual bonus (US$78,039), which were previously included in salary and fees category.
9. Viktor Gladun received remuneration from the date of his appointment as a Director of the Company on 15 August 2024.
10. Martin Cocker, Sir Christopher Codrington and Kaat van Hecke were paid fees of $120,000 per annum. No additional amounts were payable for being Chair of any
of the Board’s committees nor the Senior Independent Non-Executive Director.
* Taxable benefits include travel, medical, disability insurances and other benefits.
110 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Notes on the single total figure of remuneration table
Base salaries
Executive Directors’ salaries were considered by the Committee at the time of appointment to post in 2020 and 2021. When reviewing
salaries, the Committee considered the provisions of the Remuneration Policy and the situation of the Company.
Annual bonus
In 2024, Mr Khan was the only Executive Director eligible for a bonus. He and the Non-executive Directors were also eligible for awards under
the MIP.
In accordance with the Remuneration Policy approved on 11 July 2024, the maximum annual bonus opportunity for Mr Khan in respect of
2024 was 240% of base compensation. The maximum annual bonus opportunity of the CEO for achievement against key performance
indicators in 2024 under his service agreement was 100% of the base compensation.
All bonuses are discretionary and can be reduced from the maximum annual bonus opportunity level for reasons such as poor
performance by the employee or due to disappointing financial performance of the Group as a whole.
The key performance indicators for annual cash bonuses for the CEO were as follows:
2024 bonus performance measures Weight
NFA 1 Operations and Costs 50%
Achieve annual Chinarevskoye field No-Further-Activity PDP volume available for sales from P90 of 6,195 boepd (0%) to P50 of
6,698 boepd (100%). Sliding scale. 20%
Sulphur Recovery Unit: Mechanical completion of the Sulphur Recovery unit upgrade without any major HSE incident (LTI). 100%
by May 1st and 100% to 0% by July 1st, sliding scale. 5%
NFA Cost Focus. Opex ($38.0mln) & G&A ($11.3mln). 0% if any increases, 30% if flat, and 100% if lower by 1 $mln. Sliding Scale 10%
Drill, Complete and Deliver wells Ch-301 and Ch-41_1_1 to planned mechanical objectives and within the approved budget
(100%) sliding scale to 0% in case of 10% over budget. To be split 7.5% on budget achievement and 7.5% on well success. 15%
Strategic Objectives 40%
A commercially sensitive strategic target, therefore not disclosed2 10%
A commercially sensitive strategic target, therefore not disclosed2 10%
A commercially sensitive strategic target, therefore not disclosed2 20%
HSE 10%
Achievement of the approved 2024 HSE Plan (provided that there have been no fatalities. In the case of a fatality 10% additional
will be deducted from the overall weighting.).
KPIs:
• GHG emissions not to exceed target set by the National GHG Allocation of 203,562 CO2. or equivalent level;
• Safety KPIs: LTI < 1.05 ; RTI < 0.75 ; TRIF < 1.9 10%
Total 100%
1. NFA refers to core operating activities, excluding any growth opportunities and/or one-off items.
2. In certain cases information on performance measures or targets has been omitted because it is commercially sensitive and disclosure of such information may
not be in the Company’s interest. Such information may be reported in the subsequent annual report if the performance measure or target has been met and the
Company considers that disclosure of such information at such time would not be contrary to the Company’s interest.
The Committee considered the performance of the CEO in the period 1 January to 31 December 2024. Production and cost KPIs were
fully satisfied (40% out of a possible 40%), the strategic KPIs were entirely met (50% out of a possible 50%) and HSE KPIs were met (10%
out of a possible 10%), resulting in conclusion that 100% of the 2024 KPIs had been achieved over the year 2024 (GBP 450,000).
The Company may provide for clawback or withholding provisions regarding annual bonuses. Clawback and withholding provisions do
apply to the MIP and LTIP awards for which performance conditions have been satisfied. Except as stated in relation to the Phantom Share
Option Scheme and the LTIP, there are no deferral periods, vesting periods or holding periods. Other than under the MIP, there are no
performance targets or measures relating to more than one financial year. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 111
Base salaries
Executive Directors’ salaries were considered by the Committee at the time of appointment to post in 2020 and 2021. When reviewing
salaries, the Committee considered the provisions of the Remuneration Policy and the situation of the Company.
Annual bonus
In 2024, Mr Khan was the only Executive Director eligible for a bonus. He and the Non-executive Directors were also eligible for awards under
the MIP.
In accordance with the Remuneration Policy approved on 11 July 2024, the maximum annual bonus opportunity for Mr Khan in respect of
2024 was 240% of base compensation. The maximum annual bonus opportunity of the CEO for achievement against key performance
indicators in 2024 under his service agreement was 100% of the base compensation.
All bonuses are discretionary and can be reduced from the maximum annual bonus opportunity level for reasons such as poor
performance by the employee or due to disappointing financial performance of the Group as a whole.
The key performance indicators for annual cash bonuses for the CEO were as follows:
2024 bonus performance measures Weight
NFA 1 Operations and Costs 50%
Achieve annual Chinarevskoye field No-Further-Activity PDP volume available for sales from P90 of 6,195 boepd (0%) to P50 of
6,698 boepd (100%). Sliding scale. 20%
Sulphur Recovery Unit: Mechanical completion of the Sulphur Recovery unit upgrade without any major HSE incident (LTI). 100%
by May 1st and 100% to 0% by July 1st, sliding scale. 5%
NFA Cost Focus. Opex ($38.0mln) & G&A ($11.3mln). 0% if any increases, 30% if flat, and 100% if lower by 1 $mln. Sliding Scale 10%
Drill, Complete and Deliver wells Ch-301 and Ch-41_1_1 to planned mechanical objectives and within the approved budget
(100%) sliding scale to 0% in case of 10% over budget. To be split 7.5% on budget achievement and 7.5% on well success. 15%
Strategic Objectives 40%
A commercially sensitive strategic target, therefore not disclosed2 10%
A commercially sensitive strategic target, therefore not disclosed2 10%
A commercially sensitive strategic target, therefore not disclosed2 20%
HSE 10%
Achievement of the approved 2024 HSE Plan (provided that there have been no fatalities. In the case of a fatality 10% additional
will be deducted from the overall weighting.).
KPIs:
• GHG emissions not to exceed target set by the National GHG Allocation of 203,562 CO2. or equivalent level;
• Safety KPIs: LTI < 1.05 ; RTI < 0.75 ; TRIF < 1.9 10%
Total 100%
1. NFA refers to core operating activities, excluding any growth opportunities and/or one-off items.
2. In certain cases information on performance measures or targets has been omitted because it is commercially sensitive and disclosure of such information may
not be in the Company’s interest. Such information may be reported in the subsequent annual report if the performance measure or target has been met and the
Company considers that disclosure of such information at such time would not be contrary to the Company’s interest.
The Committee considered the performance of the CEO in the period 1 January to 31 December 2024. Production and cost KPIs were
fully satisfied (40% out of a possible 40%), the strategic KPIs were entirely met (50% out of a possible 50%) and HSE KPIs were met (10%
out of a possible 10%), resulting in conclusion that 100% of the 2024 KPIs had been achieved over the year 2024 (GBP 450,000).
The Company may provide for clawback or withholding provisions regarding annual bonuses. Clawback and withholding provisions do
apply to the MIP and LTIP awards for which performance conditions have been satisfied. Except as stated in relation to the Phantom Share
Option Scheme and the LTIP, there are no deferral periods, vesting periods or holding periods. Other than under the MIP, there are no
performance targets or measures relating to more than one financial year. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 111
2024 ANNUAL REPORT ON REMUNERATION
Management Incentive Plan (MIP)
Over the entire duration of the MIP aggregate MIP payments to the
CEO may not exceed 16 times his current maximum base salary.
Over the entire duration of the MIP aggregate MIP payments: (a) to
the Chairman may not exceed 19 times his current annual director’s
fees, and (b) to each of the other non-executive directors may not
exceed 19 times the current level of annual director’s fees payable
to non-executive directors other than the Chairman.
Pension entitlements
The Company did not operate a pension scheme for Executive
Directors in 2024 but may make a contribution to a private pension
fund or a payment in lieu of pension contributions to Executive
Directors, under their employment contracts as executives of the
Group as opposed to under their service agreements as Directors
of the Company.
Payments to past Directors
Following the end of his term of service on 14 February 2023, Atul
Gupta was paid 12 monthly equal instalments in lieu of 12 months’
notice and a payment of $3,462.00 in lieu of all accrued but unused
holiday entitlement. Following the resignation of Chris Cox as a
Non-executive Director of the Company effective 31 May 2024, he
received a payment of USD 27,500, being an amount equal to his
annual remuneration fee on a pro-rata basis for the three month
period following the date of his resignation.
No other payments were made to past directors of the Company
during the year ended 31 December 2024.
Payments for loss of office
No payments were made to Directors in 2024 for loss of office.
Non-executive Director fees
Since 14 February 2023, Non- executive Director fees have been
as follows:
Chris Cox 100K USD per annum, plus 10K USD per annum for
chairmanship of Nomination and Governance
Committee, all until 31 May 2024
Martin Gudgeon 100K USD per annum, plus 10K USD per annum for
chairmanship of Nomination and Governance
Committee as from 22 July 2024
Chris Hopkinson 100K USD per annum, plus 10K USD per annum for
chairmanship of Remuneration Committee
Fiona Paulus 100K USD per annum, plus 10K USD per annum for
chairmanship of Audit Committee
Stephen Whyte 230K GBP per annum, plus 10K USD per annum for
chairmanship of Strategy Committee
Viktor Gladun 100K USD per annum
Directors’ shareholdings
The beneficial interests of the Directors in the share capital of the
Company as at 31 December 2024 were as follows:
Director
Total
(audited)
Martin Gudgeon
Chris Hopkinson
Arfan Khan
Fiona Paulus
Stephen Whyte
Viktor Gladun
The Company has not been notified of any change in Directors’
shareholdings since 31 December 2024.
Please refer to the text in the Remuneration Policy table on page
120 in relation to shareholding guidelines applicable to Directors.
No shares have been granted to Directors so there was no
requirement on any Director to hold them in accordance with the
guidelines. The Company’s sole Executive Director Arfan Khan did
not hold any shares in 2024 as encouraged by the guidelines.
Phantom share option plan
The Company operates one non- performance-related phantom
share option plan (the Plan). There are no outstanding options to
Directors. No awards were made under the Plan in 2024 (2023: nil).
It is not currently envisaged to make any further awards under
the Plan.
Long-term incentive plan
On 24 August 2017, the Board approved the making of certain
initial grants under the Company’s long-term incentive plan (LTIP).
Awards under the LTIP were made in 2017 and 2018 but no further
awards were made thereafter or are currently envisaged under
the LTIP.
In accordance with the LTIP rules, all outstanding options that
had been issued to two Executive Directors, Mr Kessel and
Mr Richardson, who left the Company on 16 December 2019 and
31 March 2020, respectively, lapsed as of 16 December 2019 and
30 March 2021, respectively.
All Non-Executive Directors who had been granted awards under
the LTIP (including Atul Gupta) have formally renounced such
awards and the Company has amended the terms of its LTIP to
make Non-Executive Directors ineligible to participate in the LTIP.
Management Incentive Plan (MIP)
Following the completion of the restructuring of the group’s
US$725 million Senior Notes due July 2022 and the US$400 million
Senior Notes due February 2025 (the “Restructuring”), the board of
directors of the Company was re-constituted on 14 February 2023.
The previous executive chair and non-executive directors stepped
down from the Board (with the CEO Arfan Khan remaining in
place), while:
• Stephen Whyte was appointed as Independent Chair and a
Non-Executive Director;
2024 annual report on remuneration continued
112 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Management Incentive Plan (MIP)
Over the entire duration of the MIP aggregate MIP payments to the
CEO may not exceed 16 times his current maximum base salary.
Over the entire duration of the MIP aggregate MIP payments: (a) to
the Chairman may not exceed 19 times his current annual director’s
fees, and (b) to each of the other non-executive directors may not
exceed 19 times the current level of annual director’s fees payable
to non-executive directors other than the Chairman.
Pension entitlements
The Company did not operate a pension scheme for Executive
Directors in 2024 but may make a contribution to a private pension
fund or a payment in lieu of pension contributions to Executive
Directors, under their employment contracts as executives of the
Group as opposed to under their service agreements as Directors
of the Company.
Payments to past Directors
Following the end of his term of service on 14 February 2023, Atul
Gupta was paid 12 monthly equal instalments in lieu of 12 months’
notice and a payment of $3,462.00 in lieu of all accrued but unused
holiday entitlement. Following the resignation of Chris Cox as a
Non-executive Director of the Company effective 31 May 2024, he
received a payment of USD 27,500, being an amount equal to his
annual remuneration fee on a pro-rata basis for the three month
period following the date of his resignation.
No other payments were made to past directors of the Company
during the year ended 31 December 2024.
Payments for loss of office
No payments were made to Directors in 2024 for loss of office.
Non-executive Director fees
Since 14 February 2023, Non- executive Director fees have been
as follows:
Chris Cox 100K USD per annum, plus 10K USD per annum for
chairmanship of Nomination and Governance
Committee, all until 31 May 2024
Martin Gudgeon 100K USD per annum, plus 10K USD per annum for
chairmanship of Nomination and Governance
Committee as from 22 July 2024
Chris Hopkinson 100K USD per annum, plus 10K USD per annum for
chairmanship of Remuneration Committee
Fiona Paulus 100K USD per annum, plus 10K USD per annum for
chairmanship of Audit Committee
Stephen Whyte 230K GBP per annum, plus 10K USD per annum for
chairmanship of Strategy Committee
Viktor Gladun 100K USD per annum
Directors’ shareholdings
The beneficial interests of the Directors in the share capital of the
Company as at 31 December 2024 were as follows:
Director
Total
(audited)
Martin Gudgeon
Chris Hopkinson
Arfan Khan
Fiona Paulus
Stephen Whyte
Viktor Gladun
The Company has not been notified of any change in Directors’
shareholdings since 31 December 2024.
Please refer to the text in the Remuneration Policy table on page
120 in relation to shareholding guidelines applicable to Directors.
No shares have been granted to Directors so there was no
requirement on any Director to hold them in accordance with the
guidelines. The Company’s sole Executive Director Arfan Khan did
not hold any shares in 2024 as encouraged by the guidelines.
Phantom share option plan
The Company operates one non- performance-related phantom
share option plan (the Plan). There are no outstanding options to
Directors. No awards were made under the Plan in 2024 (2023: nil).
It is not currently envisaged to make any further awards under
the Plan.
Long-term incentive plan
On 24 August 2017, the Board approved the making of certain
initial grants under the Company’s long-term incentive plan (LTIP).
Awards under the LTIP were made in 2017 and 2018 but no further
awards were made thereafter or are currently envisaged under
the LTIP.
In accordance with the LTIP rules, all outstanding options that
had been issued to two Executive Directors, Mr Kessel and
Mr Richardson, who left the Company on 16 December 2019 and
31 March 2020, respectively, lapsed as of 16 December 2019 and
30 March 2021, respectively.
All Non-Executive Directors who had been granted awards under
the LTIP (including Atul Gupta) have formally renounced such
awards and the Company has amended the terms of its LTIP to
make Non-Executive Directors ineligible to participate in the LTIP.
Management Incentive Plan (MIP)
Following the completion of the restructuring of the group’s
US$725 million Senior Notes due July 2022 and the US$400 million
Senior Notes due February 2025 (the “Restructuring”), the board of
directors of the Company was re-constituted on 14 February 2023.
The previous executive chair and non-executive directors stepped
down from the Board (with the CEO Arfan Khan remaining in
place), while:
• Stephen Whyte was appointed as Independent Chair and a
Non-Executive Director;
2024 annual report on remuneration continued
112 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
•
Martin Gudgeon was nominated by the trustee of the warrants
issued in connection with the Restructuring as the Warrant
Director and appointed as a Non-Executive Director; and
• Chris Cox, Christopher Hopkinson and Fiona Paulus were
appointed as Independent Non-Executive Directors.
At the 2023 AGM, the Board was required to seek approval for a
new directors’ remuneration policy, as the previous policy had
been approved by shareholders at the Company’s AGM in 2020.
Given the short period that the current Board had been in place
prior to the 2023 AGM, the Board determined to continue with the
previous remuneration policy until such time as the new Board was
able to consult with shareholders on any appropriate revisions to
reflect the revised financial position of the Company following the
completion of the Restructuring. Accordingly, at the 2023 AGM,
shareholders approved a new directors’ remuneration policy (the
“Policy”) identical to the previous remuneration policy except to the
extent required to enable the payment of a maximum annual bonus
of 100% of base compensation to the Company’s chief financial
officer (if appointed to the Board). That policy was set out on pages
109 to 115 of the 2023 Annual Report.
Following the 2023 AGM, the Board consulted with shareholders
and consider the terms of a new management incentive plan. In
connection with such deliberations, the Board noted that no
awards had been made under either the LTIP or the previous
Phantom Share Option Plan since 2018, and that there is no
intention to grant new awards in the future under either the LTIP or
the Phantom Share Option Plan. The Board noted that this would
have the practical effect of preventing senior management,
including the CEO, from participating in any management
incentive plan of the Company.
The Board also reflected on the impact of the Restructuring and
the Company’s strategy for the future, which is focused on
unlocking the full potential and value of its existing world-class gas
processing infrastructure. In this respect, the Board considered
that aligning a new management incentive plan which aims to
incentivise executive and non-executive directors, senior
management and key staff of the Company to achieve the
Company’s strategic goals, defined as certain key commercial
milestones (being value creation catalysts), would be in the best
interests of all stakeholders.
The Remuneration Committee therefore considered it appropriate
to undertake a review of the executive remuneration structure and,
subsequent to the review, a number of changes to the
remuneration structure are proposed. The principal changes
proposed (the “Proposals”) were:
• the adoption of a new Management Incentive Plan (the “MIP”);
and
• to permit all Directors (including the Chairman and Non-
Executive Directors) to participate in the MIP.
The Remuneration Committee strongly considered that the
Proposals ensure that the directors and members of senior
management are incentivised to deliver value creating catalysts for
the Company to help achieve the Company’s strategic goals and
therefore enhanced value for shareholders.
Details of the proposed amendments to the Policy to reflect the
Proposals (together with certain other non-material amendments)
were set out on pages 8 to 18 of the notice of general meeting
dated 24 June 2024. The Proposals were approved by General
Meeting on 11 July 2024.
Remuneration statistics and comparisons
The following performance graph shows the growth in value of a notional £100 invested in the Company since the premium listing of the
Company compared with the growth in the FTSE 350 Oil & Gas Index over the same period. The Committee selected the FTSE 350 Oil &
Gas Index as the most appropriate comparator as it feels that it is a broad-based index which includes many of the Company’s
competitors.
Total share return
0
20
40
60
80
100
120
Dec 14
Dec 15
Jun 14
Jun 15
Dec 16
Jun 16
Dec 17
Jun 17
Dec 18
Jun 18
Dec 19
Jun 19
Dec 20
Jun 20
Dec 21
Jun 21
Dec 22
Jun 22
Dec 23
Dec 24
Jun 24
Jun 23
Nostrum O&G (dividends received)
Source: Refinitiv
Nostrum O&G (dividends re-invested) FTSE 350 Oil & Gas STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 113
issued in connection with the Restructuring as the Warrant
Director and appointed as a Non-Executive Director; and
• Chris Cox, Christopher Hopkinson and Fiona Paulus were
appointed as Independent Non-Executive Directors.
At the 2023 AGM, the Board was required to seek approval for a
new directors’ remuneration policy, as the previous policy had
been approved by shareholders at the Company’s AGM in 2020.
Given the short period that the current Board had been in place
prior to the 2023 AGM, the Board determined to continue with the
previous remuneration policy until such time as the new Board was
able to consult with shareholders on any appropriate revisions to
reflect the revised financial position of the Company following the
completion of the Restructuring. Accordingly, at the 2023 AGM,
shareholders approved a new directors’ remuneration policy (the
“Policy”) identical to the previous remuneration policy except to the
extent required to enable the payment of a maximum annual bonus
of 100% of base compensation to the Company’s chief financial
officer (if appointed to the Board). That policy was set out on pages
109 to 115 of the 2023 Annual Report.
Following the 2023 AGM, the Board consulted with shareholders
and consider the terms of a new management incentive plan. In
connection with such deliberations, the Board noted that no
awards had been made under either the LTIP or the previous
Phantom Share Option Plan since 2018, and that there is no
intention to grant new awards in the future under either the LTIP or
the Phantom Share Option Plan. The Board noted that this would
have the practical effect of preventing senior management,
including the CEO, from participating in any management
incentive plan of the Company.
The Board also reflected on the impact of the Restructuring and
the Company’s strategy for the future, which is focused on
unlocking the full potential and value of its existing world-class gas
processing infrastructure. In this respect, the Board considered
that aligning a new management incentive plan which aims to
incentivise executive and non-executive directors, senior
management and key staff of the Company to achieve the
Company’s strategic goals, defined as certain key commercial
milestones (being value creation catalysts), would be in the best
interests of all stakeholders.
The Remuneration Committee therefore considered it appropriate
to undertake a review of the executive remuneration structure and,
subsequent to the review, a number of changes to the
remuneration structure are proposed. The principal changes
proposed (the “Proposals”) were:
• the adoption of a new Management Incentive Plan (the “MIP”);
and
• to permit all Directors (including the Chairman and Non-
Executive Directors) to participate in the MIP.
The Remuneration Committee strongly considered that the
Proposals ensure that the directors and members of senior
management are incentivised to deliver value creating catalysts for
the Company to help achieve the Company’s strategic goals and
therefore enhanced value for shareholders.
Details of the proposed amendments to the Policy to reflect the
Proposals (together with certain other non-material amendments)
were set out on pages 8 to 18 of the notice of general meeting
dated 24 June 2024. The Proposals were approved by General
Meeting on 11 July 2024.
Remuneration statistics and comparisons
The following performance graph shows the growth in value of a notional £100 invested in the Company since the premium listing of the
Company compared with the growth in the FTSE 350 Oil & Gas Index over the same period. The Committee selected the FTSE 350 Oil &
Gas Index as the most appropriate comparator as it feels that it is a broad-based index which includes many of the Company’s
competitors.
Total share return
0
20
40
60
80
100
120
Dec 14
Dec 15
Jun 14
Jun 15
Dec 16
Jun 16
Dec 17
Jun 17
Dec 18
Jun 18
Dec 19
Jun 19
Dec 20
Jun 20
Dec 21
Jun 21
Dec 22
Jun 22
Dec 23
Dec 24
Jun 24
Jun 23
Nostrum O&G (dividends received)
Source: Refinitiv
Nostrum O&G (dividends re-invested) FTSE 350 Oil & Gas STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 113
2024 ANNUAL REPORT ON REMUNERATION
History of Chief Executive Officer remuneration
The total remuneration figures compared with a respective maximum opportunity for the CEO during each of the last ten financial years
are shown in the table below. Kai-Uwe Kessel was in the position for the period 1 January 2014 to 16 December 2019, Kaat Van Hecke was
the CEO from 16 December 2019 to 31 August 2020 and Atul Gupta from 1 September to 25 January 2021.
The total CEO remuneration figure for 2020 therefore includes all amounts paid to Kaat van Hecke for the period
1 January 2020 to 31 August 2020 and Atul Gupta for the period 1 September 2020 to 31 December 2020 for CEO services provided to
the Group. Mr Gupta remained as Executive Chairman throughout the period 1 September 2020 to 25 January 2021. Therefore, the
amount attributed to his role as CEO is the incremental value in his remuneration only, which was the pension contribution.
Please refer to the single total figure of remuneration table on page 110 for more information.
Year (USD)
Annual bonus
as % of
maximum
opportunity
2015 1,078,059 80.00% 1
2016 1,013,718 75.00%
2017 1,004,305 31.25%
2018 732,271 0.00%
2019 2 1,577,014 0.00%
2020 3 1,284,577 60.33%
2021 4 948,525 12.61%
2022 1,453,649 53.13%
2023 1,535,511 58.14%
2024 1,475,233 58.73%
1. These figures include a bonus amount of EUR 236,262 paid in 2015 in respect of 2014 performance. No bonuses were paid for 2015 performance.
2. The amounts published in 2021 in respect of payments to Kaat Van Hecke in 2019 have been corrected to include the amount of EUR 32,006 paid to her spouse in 2019.
3. The amounts published in 2021 in respect of payments to Kaat Van Hecke in 2020 have been corrected to include amount of EUR 423,031 paid to her spouse in 2020.
4. Kaat Van Hecke was CEO from 16 December 2019 to 31 August 2020. Atul Gupta discharged the role of CEO from 1 September 2020 to 25 January 2021 but
received no increment in salary, benefits or annual bonus as a result of assuming this role as well as that of Executive Chairman. Therefore, the figures for the
remuneration of the CEO in 2019, 2020 and 2021 reflect only the amounts paid to Kaat Van Hecke (and her spouse) and Arfan Khan.
Annual percentage change in Director and average employee remuneration
The table below shows the percentage changes in the salary, benefits and annual bonus of the Directors compared to the percentage
increases of the workforce as a whole for each financial year beginning on or after 10 June 2019.
2024
USD
2024 to 2023
% change
2023
USD
2023 to 2022
% change
2022
USD
2022 to 2021
% change
2021
USD
Executive Directors (USD)
Executive Chairman 1
Salaries 37,500 -93,0% 538,748 3.9% 518,575 1.2% 512,203
Taxable benefits 130 -96.7% 3,967 2.0% 3,888 (7.6%) 4,209
Annual bonus − − − − − − −
Chief Executive Officer2
Salaries 573,043 -16.5% 686,555 0.4% 683,814 0.1% 683,330
Taxable benefits 29,306 4.0% 28,183 104.8% 13,763 (70.2%) 46,124
Annual bonus 583,556 -70.9% 780,395 8.9% 716,919 309.7% 175,000
Chief Financial Officer 3,4
Salaries − − − − − − 446,338
Taxable benefits − − − − − − −
Annual bonus − − − − − − −
2024 annual report on remuneration continued
114 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
History of Chief Executive Officer remuneration
The total remuneration figures compared with a respective maximum opportunity for the CEO during each of the last ten financial years
are shown in the table below. Kai-Uwe Kessel was in the position for the period 1 January 2014 to 16 December 2019, Kaat Van Hecke was
the CEO from 16 December 2019 to 31 August 2020 and Atul Gupta from 1 September to 25 January 2021.
The total CEO remuneration figure for 2020 therefore includes all amounts paid to Kaat van Hecke for the period
1 January 2020 to 31 August 2020 and Atul Gupta for the period 1 September 2020 to 31 December 2020 for CEO services provided to
the Group. Mr Gupta remained as Executive Chairman throughout the period 1 September 2020 to 25 January 2021. Therefore, the
amount attributed to his role as CEO is the incremental value in his remuneration only, which was the pension contribution.
Please refer to the single total figure of remuneration table on page 110 for more information.
Year (USD)
Annual bonus
as % of
maximum
opportunity
2015 1,078,059 80.00% 1
2016 1,013,718 75.00%
2017 1,004,305 31.25%
2018 732,271 0.00%
2019 2 1,577,014 0.00%
2020 3 1,284,577 60.33%
2021 4 948,525 12.61%
2022 1,453,649 53.13%
2023 1,535,511 58.14%
2024 1,475,233 58.73%
1. These figures include a bonus amount of EUR 236,262 paid in 2015 in respect of 2014 performance. No bonuses were paid for 2015 performance.
2. The amounts published in 2021 in respect of payments to Kaat Van Hecke in 2019 have been corrected to include the amount of EUR 32,006 paid to her spouse in 2019.
3. The amounts published in 2021 in respect of payments to Kaat Van Hecke in 2020 have been corrected to include amount of EUR 423,031 paid to her spouse in 2020.
4. Kaat Van Hecke was CEO from 16 December 2019 to 31 August 2020. Atul Gupta discharged the role of CEO from 1 September 2020 to 25 January 2021 but
received no increment in salary, benefits or annual bonus as a result of assuming this role as well as that of Executive Chairman. Therefore, the figures for the
remuneration of the CEO in 2019, 2020 and 2021 reflect only the amounts paid to Kaat Van Hecke (and her spouse) and Arfan Khan.
Annual percentage change in Director and average employee remuneration
The table below shows the percentage changes in the salary, benefits and annual bonus of the Directors compared to the percentage
increases of the workforce as a whole for each financial year beginning on or after 10 June 2019.
2024
USD
2024 to 2023
% change
2023
USD
2023 to 2022
% change
2022
USD
2022 to 2021
% change
2021
USD
Executive Directors (USD)
Executive Chairman 1
Salaries 37,500 -93,0% 538,748 3.9% 518,575 1.2% 512,203
Taxable benefits 130 -96.7% 3,967 2.0% 3,888 (7.6%) 4,209
Annual bonus − − − − − − −
Chief Executive Officer2
Salaries 573,043 -16.5% 686,555 0.4% 683,814 0.1% 683,330
Taxable benefits 29,306 4.0% 28,183 104.8% 13,763 (70.2%) 46,124
Annual bonus 583,556 -70.9% 780,395 8.9% 716,919 309.7% 175,000
Chief Financial Officer 3,4
Salaries − − − − − − 446,338
Taxable benefits − − − − − − −
Annual bonus − − − − − − −
2024 annual report on remuneration continued
114 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
2024
USD
2024 to 2023
% change
2023
USD
2023 to 2022
% change
2022
USD
2022 to 2021
% change
2021
USD
Non-Executive Directors (USD)
Stephen Whyte
Salaries 303,515 17.2% 259,038 100% − − −
Taxable benefits − − − − − − −
Annual bonus − − − − − − −
Chris Cox
Salaries 75,833 -20.9% 95,897 − − − −
Taxable benefits − − − − − − −
Annual bonus − − − − − − −
Chris Hopkinson
Salaries 110,000 14.7% 95,897 − − − −
Taxable benefits − − − − − − −
Annual bonus − − − − − − −
Martin Gudgeon
Salaries 104,167 13.6% 91,667 − − − −
Taxable benefits − − − − − − −
Annual bonus − − − − − − −
Fiona Paulus
Salaries 110,000 14.7% 95,897 − − − −
Taxable benefits − − − − − − −
Annual bonus − − − − − − −
Viktor Gladun
Salaries 37,366 − − − − − −
Taxable benefits − − − − − − −
Annual bonus − − − − − − −
Sir Christopher Codrington Bt
Salaries − − − − 120,000 − 120,000
Taxable benefits − − − − − − −
Annual bonus − − − − − − −
Kaat Van Hecke
Salaries − − − − 120,000 − 120,000
Taxable benefits − − − − − − −
Annual bonus − − − − − − −
Martin Cocker
Salaries − − − − 120,000 200% 40,000
Taxable benefits − − − − − − −
Annual bonus − − − − − − −
Employees of the Group
on an FTE basis
Salaries 32,144 23.2% 26,082 16.4% 22,412 0.8% 22,242
Taxable benefits − − − − − − −
Annual bonus − − − − − − −
1. Amounts paid to the Executive Chairman in 2023 represent remuneration paid to Atul Gupta until 14 February 2023 and payments in lieu of 12 months’ notice as
monthly equal instalments over 12-month period following the end of his term of service on 14 February 2023.
2. Kaat Van Hecke was CEO from 16 December 2019 to 31 August 2020. Atul Gupta discharged the role of CEO from 1 September 2020 to 25 January 2021 but
received no increment in salary, benefits or annual bonus as a result of assuming this role as well as that of Executive Chairman. Therefore, the figures for the
remuneration of the CEO in 2019, 2020 and 2021 reflect only the amounts paid to Kaat Van Hecke (and her spouse) and Arfan Khan.
3. The CFO was not a Director in 2022, 2023 and 2024.
4. The amounts published in 2021 in respect of payments to Mr Richardson in 2020 have been corrected to include amounts paid to his spouse in 2020. The amounts
for 2021 only include Chief Financial Officer’s compensation up until 30 August 2021, at which time the position was removed as an Executive Director. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 115
USD
2024 to 2023
% change
2023
USD
2023 to 2022
% change
2022
USD
2022 to 2021
% change
2021
USD
Non-Executive Directors (USD)
Stephen Whyte
Salaries 303,515 17.2% 259,038 100% − − −
Taxable benefits − − − − − − −
Annual bonus − − − − − − −
Chris Cox
Salaries 75,833 -20.9% 95,897 − − − −
Taxable benefits − − − − − − −
Annual bonus − − − − − − −
Chris Hopkinson
Salaries 110,000 14.7% 95,897 − − − −
Taxable benefits − − − − − − −
Annual bonus − − − − − − −
Martin Gudgeon
Salaries 104,167 13.6% 91,667 − − − −
Taxable benefits − − − − − − −
Annual bonus − − − − − − −
Fiona Paulus
Salaries 110,000 14.7% 95,897 − − − −
Taxable benefits − − − − − − −
Annual bonus − − − − − − −
Viktor Gladun
Salaries 37,366 − − − − − −
Taxable benefits − − − − − − −
Annual bonus − − − − − − −
Sir Christopher Codrington Bt
Salaries − − − − 120,000 − 120,000
Taxable benefits − − − − − − −
Annual bonus − − − − − − −
Kaat Van Hecke
Salaries − − − − 120,000 − 120,000
Taxable benefits − − − − − − −
Annual bonus − − − − − − −
Martin Cocker
Salaries − − − − 120,000 200% 40,000
Taxable benefits − − − − − − −
Annual bonus − − − − − − −
Employees of the Group
on an FTE basis
Salaries 32,144 23.2% 26,082 16.4% 22,412 0.8% 22,242
Taxable benefits − − − − − − −
Annual bonus − − − − − − −
1. Amounts paid to the Executive Chairman in 2023 represent remuneration paid to Atul Gupta until 14 February 2023 and payments in lieu of 12 months’ notice as
monthly equal instalments over 12-month period following the end of his term of service on 14 February 2023.
2. Kaat Van Hecke was CEO from 16 December 2019 to 31 August 2020. Atul Gupta discharged the role of CEO from 1 September 2020 to 25 January 2021 but
received no increment in salary, benefits or annual bonus as a result of assuming this role as well as that of Executive Chairman. Therefore, the figures for the
remuneration of the CEO in 2019, 2020 and 2021 reflect only the amounts paid to Kaat Van Hecke (and her spouse) and Arfan Khan.
3. The CFO was not a Director in 2022, 2023 and 2024.
4. The amounts published in 2021 in respect of payments to Mr Richardson in 2020 have been corrected to include amounts paid to his spouse in 2020. The amounts
for 2021 only include Chief Financial Officer’s compensation up until 30 August 2021, at which time the position was removed as an Executive Director. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 115
2024 ANNUAL REPORT ON REMUNERATION
Relative importance of spend on pay
The table below shows the Group’s actual spend on pay (for all employees) relative to dividends.
Key expenditure areas in thousands of US$ 2024 2023 % change
Remuneration paid to all employees 1 32,144 26,082 23.2%
Dividends to shareholders (total) 0 0 0%
Dividends 0 0 0%
Share buy-back 0 0 0%
1. Total remuneration reflects overall payroll and related taxes. Refer to the consolidated financial statements for further information.
For further information on dividends and expenditure on remuneration for all employees, please see the notes to the consolidated
financial statements.
Service contracts
Details of the Executive Directors’ service agreements’ and the Non-Executive Directors’ letters of appointment can be found in the
Company’s Remuneration Policy on pages 119-124 of this Annual Report. All Directors are subject to annual reappointment and
accordingly all executive and Non-Executive Directors will stand for election or re-election (as appropriate) at the Annual General
Meeting.
Statement of Remuneration Policy implementation
The Company’s Remuneration Policy was put to a shareholder vote at the General Meeting on 11 July 2024 and was approved by 99.77%
of votes cast.
Salaries and bonuses of the Executive Directors are reviewed and determined annually to ensure they remain appropriate. The Company’s
bonus year runs from 1 January to 31 December each year, with bonus amounts being determined between December and March and
becoming payable between March and April of each year.
Remuneration in respect of 2025 will be consistent with the current policy described on pages 119-124.
Salaries and service fees
The Group appointed a new CEO on 26 January 2021. As part of that process, the level of remuneration to be paid was agreed by the
Committee and approved by the Board.
Annual bonus
In accordance with the remuneration policy approved at the General Meeting on 11 July 2024, the maximum Executive Director annual
bonus opportunity in respect of 2024 was up to 40% of base compensation, subject to a maximum opportunity for the Company’s CEO,
of an annual bonus of up to 240% of base compensation and a maximum opportunity of 100% of base compensation for the Company’s
Chief Financial Officer (if a Director).
Annual performance will be assessed against a performance scorecard of which a portion is based on operational and financial measures,
a portion on strategic objectives and a portion on HSE, social and governance objectives.
The Committee has compiled a list of suitable key performance indicators against which the performance of the Executive Directors will
be measured at the end of 2025 to determine the annual bonus amounts payable to Executive Directors in 2026. Details of any non-
commercially sensitive KPIs are set out below. 2025 performance will be measured against these key performance indicators and the
Committee will consider such performance together with the Company’s financial position, in deciding whether and at what level
to award.
2025 bonus performance measures Weight
NFA Operations and Costs 50%
Achieve annual CHN No-Further-Activity PDP volume available for sales from low-side of 5,652 boepd (0%) to high-side of
6,229 boepd (100 %), sliding scale. 20%
Low Pressure System 3 project: Mechanical completion and operationalize the two spare Gas Compressors in GTU/3 through
interconnecting pipelines with an incident free start-up, no HSE incidents (LTI) & within budget. 5%
NFA Cost Focus. Opex $37.9mln & G&A $10.8m total US$48.7m. 0% if any increases, 30% if flat, and 100% if lower by $0.25mln,
sliding scale. 10%
Drill, Complete and Deliver wells CH-116_1 and CH-725_1 to planned mechanical objectives and within the approved budget.
Weighting split 7.5% for budget target and 7.5% for at least one well success. Sliding scale from 100% (under/on budget) to 0%
(10% or more over budget). 15%
2024 annual report on remuneration continued
116 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Relative importance of spend on pay
The table below shows the Group’s actual spend on pay (for all employees) relative to dividends.
Key expenditure areas in thousands of US$ 2024 2023 % change
Remuneration paid to all employees 1 32,144 26,082 23.2%
Dividends to shareholders (total) 0 0 0%
Dividends 0 0 0%
Share buy-back 0 0 0%
1. Total remuneration reflects overall payroll and related taxes. Refer to the consolidated financial statements for further information.
For further information on dividends and expenditure on remuneration for all employees, please see the notes to the consolidated
financial statements.
Service contracts
Details of the Executive Directors’ service agreements’ and the Non-Executive Directors’ letters of appointment can be found in the
Company’s Remuneration Policy on pages 119-124 of this Annual Report. All Directors are subject to annual reappointment and
accordingly all executive and Non-Executive Directors will stand for election or re-election (as appropriate) at the Annual General
Meeting.
Statement of Remuneration Policy implementation
The Company’s Remuneration Policy was put to a shareholder vote at the General Meeting on 11 July 2024 and was approved by 99.77%
of votes cast.
Salaries and bonuses of the Executive Directors are reviewed and determined annually to ensure they remain appropriate. The Company’s
bonus year runs from 1 January to 31 December each year, with bonus amounts being determined between December and March and
becoming payable between March and April of each year.
Remuneration in respect of 2025 will be consistent with the current policy described on pages 119-124.
Salaries and service fees
The Group appointed a new CEO on 26 January 2021. As part of that process, the level of remuneration to be paid was agreed by the
Committee and approved by the Board.
Annual bonus
In accordance with the remuneration policy approved at the General Meeting on 11 July 2024, the maximum Executive Director annual
bonus opportunity in respect of 2024 was up to 40% of base compensation, subject to a maximum opportunity for the Company’s CEO,
of an annual bonus of up to 240% of base compensation and a maximum opportunity of 100% of base compensation for the Company’s
Chief Financial Officer (if a Director).
Annual performance will be assessed against a performance scorecard of which a portion is based on operational and financial measures,
a portion on strategic objectives and a portion on HSE, social and governance objectives.
The Committee has compiled a list of suitable key performance indicators against which the performance of the Executive Directors will
be measured at the end of 2025 to determine the annual bonus amounts payable to Executive Directors in 2026. Details of any non-
commercially sensitive KPIs are set out below. 2025 performance will be measured against these key performance indicators and the
Committee will consider such performance together with the Company’s financial position, in deciding whether and at what level
to award.
2025 bonus performance measures Weight
NFA Operations and Costs 50%
Achieve annual CHN No-Further-Activity PDP volume available for sales from low-side of 5,652 boepd (0%) to high-side of
6,229 boepd (100 %), sliding scale. 20%
Low Pressure System 3 project: Mechanical completion and operationalize the two spare Gas Compressors in GTU/3 through
interconnecting pipelines with an incident free start-up, no HSE incidents (LTI) & within budget. 5%
NFA Cost Focus. Opex $37.9mln & G&A $10.8m total US$48.7m. 0% if any increases, 30% if flat, and 100% if lower by $0.25mln,
sliding scale. 10%
Drill, Complete and Deliver wells CH-116_1 and CH-725_1 to planned mechanical objectives and within the approved budget.
Weighting split 7.5% for budget target and 7.5% for at least one well success. Sliding scale from 100% (under/on budget) to 0%
(10% or more over budget). 15%
2024 annual report on remuneration continued
116 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
2025 bonus performance measures
Weight
Strategic Objectives 40%
A commercially sensitive strategic target, therefore not disclosed 1 10%
A commercially sensitive strategic target, therefore not disclosed 1 10%
A commercially sensitive strategic target, therefore not disclosed 1 20%
HSE 10%
Target: Achievement of the GHG emissions & safety KPIs provided that there have been no fatalities. In the case of a fatality,
10% additional will be deducted from the overall weighting.
KPIs:
• GHG emissions: not to exceed forecast target of 290,209 tons of CO2 (or equivalent level)
• Safety KPIs: LTI < 1.15; RTI < 1.0; TRIF < 2.0 10%
Total 100%
1. In certain cases information on performance measures or targets has been omitted because it is commercially sensitive and disclosure of such information may not
be in the Company’s interest. Such information may be reported in the subsequent annual report if the performance measure or target has been met and the
Company considers that disclosure of such information at such time would not be contrary to the Company’s interest.
The percentage result (from the above table of key performance indicator out of 100%) will be applied to 100% of the CEO’s base
compensation and may also be applied to a percentage up to the Chief Financial Officer’s maximum opportunity of 100% (if he is
appointed as a Director). Currently, no other director is eligible for any bonus payment relating to 2024 performance based on these
performance measures.
The CEO’s maximum possible total bonus opportunity for 2024 is 240% of base compensation and his bonus opportunity based on the
performance measures in the table above is 100% of base compensation. If appointed to the Board, the CFO’s maximum possible total
bonus opportunity for 2024 will be 100% of base compensation.
MIP
Over the entire duration of the MIP aggregate MIP payments to the CEO may not exceed 16 times his current base salary. Over the entire
duration of the MIP aggregate MIP payments: (a) to the Chairman may not exceed 19 times his current annual director’s fees, and (b) to
each of the other non-executive directors may not exceed 19 times the current level of annual director’s fees payable to non-executive
directors other than the Chairman.
Phantom share option plan
The Committee does not envisage the award of any additional phantom share options to Executive Directors in 2025.
Long-term incentive plan
The Committee does not envisage any awards under the Company’s existing long-term incentive plan in 2025. Therefore, no performance
conditions have been set for 2025.
Non-Executive Directors
From 14 February 2023, Non-executive Director fees have been as follows:
Chris Cox 100K USD per annum, plus 10K USD per annum for chairmanship of Nomination and Governance Committee, all until
31 May 2024
Martin Gudgeon 100K USD per annum, plus 10K USD per annum for chairmanship of Nomination and Governance Committee as from
22 July 2024
Chris Hopkinson 100K USD per annum, plus 10K USD per annum for chairmanship of Remuneration Committee
Fiona Paulus 100K USD per annum, plus 10K USD per annum for chairmanship of Audit Committee
Stephen Whyte 230K GBP per annum, plus 10K USD per annum for chairmanship of Strategy Committee
Viktor Gladun 100K USD per annum STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 117
Strategic Objectives 40%
A commercially sensitive strategic target, therefore not disclosed 1 10%
A commercially sensitive strategic target, therefore not disclosed 1 10%
A commercially sensitive strategic target, therefore not disclosed 1 20%
HSE 10%
Target: Achievement of the GHG emissions & safety KPIs provided that there have been no fatalities. In the case of a fatality,
10% additional will be deducted from the overall weighting.
KPIs:
• GHG emissions: not to exceed forecast target of 290,209 tons of CO2 (or equivalent level)
• Safety KPIs: LTI < 1.15; RTI < 1.0; TRIF < 2.0 10%
Total 100%
1. In certain cases information on performance measures or targets has been omitted because it is commercially sensitive and disclosure of such information may not
be in the Company’s interest. Such information may be reported in the subsequent annual report if the performance measure or target has been met and the
Company considers that disclosure of such information at such time would not be contrary to the Company’s interest.
The percentage result (from the above table of key performance indicator out of 100%) will be applied to 100% of the CEO’s base
compensation and may also be applied to a percentage up to the Chief Financial Officer’s maximum opportunity of 100% (if he is
appointed as a Director). Currently, no other director is eligible for any bonus payment relating to 2024 performance based on these
performance measures.
The CEO’s maximum possible total bonus opportunity for 2024 is 240% of base compensation and his bonus opportunity based on the
performance measures in the table above is 100% of base compensation. If appointed to the Board, the CFO’s maximum possible total
bonus opportunity for 2024 will be 100% of base compensation.
MIP
Over the entire duration of the MIP aggregate MIP payments to the CEO may not exceed 16 times his current base salary. Over the entire
duration of the MIP aggregate MIP payments: (a) to the Chairman may not exceed 19 times his current annual director’s fees, and (b) to
each of the other non-executive directors may not exceed 19 times the current level of annual director’s fees payable to non-executive
directors other than the Chairman.
Phantom share option plan
The Committee does not envisage the award of any additional phantom share options to Executive Directors in 2025.
Long-term incentive plan
The Committee does not envisage any awards under the Company’s existing long-term incentive plan in 2025. Therefore, no performance
conditions have been set for 2025.
Non-Executive Directors
From 14 February 2023, Non-executive Director fees have been as follows:
Chris Cox 100K USD per annum, plus 10K USD per annum for chairmanship of Nomination and Governance Committee, all until
31 May 2024
Martin Gudgeon 100K USD per annum, plus 10K USD per annum for chairmanship of Nomination and Governance Committee as from
22 July 2024
Chris Hopkinson 100K USD per annum, plus 10K USD per annum for chairmanship of Remuneration Committee
Fiona Paulus 100K USD per annum, plus 10K USD per annum for chairmanship of Audit Committee
Stephen Whyte 230K GBP per annum, plus 10K USD per annum for chairmanship of Strategy Committee
Viktor Gladun 100K USD per annum STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 117
2024 ANNUAL REPORT ON REMUNERATION
Remuneration Policy
This part of the Directors’ remuneration report sets out the
Remuneration Policy for the Company and has been prepared in
accordance with the Companies Act 2006, the Large and Medium-
sized Companies and Groups (Accounts and Reports)
(Amendment) Regulations 2013, the UK Corporate Governance
Code and the Listing Rules of the UK Listing Authority.
The Company’s current remuneration policy was approved by
shareholders at the Company’s EGM on 11 July 2024.
Policy coverage
This Policy applies to all payments to Directors of the
Company from 11 July 2024 until the approval of a revised
Remuneration Policy.
Policy objectives
This policy is designed to:
• Provide a structure and level of pay that attracts and retains
high-calibre directors capable of delivering the Company’s
strategic objectives.
• Provide clear and transparent performance incentives in a
manner that is consistent with best practice and aligned with the
interests of the Company’s shareholders.
• Align the remuneration of executives with the interests of the
Company’s shareholders, and ensure that rewards are justified by
performance.
• Ensure that the pay of the Executive Directors takes into account:
(i) pay and conditions throughout the Company; and (ii)
corporate governance best practice, including health and safety,
environmental, social and governance risks.
• Allow for future bonuses to be paid in whole or part in
deferred shares.
• Allow for pension contributions to Executive Directors for their
services under service contracts up to a 10% maximum
opportunity, or higher if required by applicable law.
• Allow all Directors (including the Chairman & Non-Executive
Directors) to participate in the management incentive plan (“MIP”).
Peer group
For the purposes of benchmarking appropriate compensation, the
Committee currently regards the following companies as the most
relevant peer group for Nostrum:
• FTSE 350 companies of a similar size to Nostrum;
• Oil and gas E&P companies globally which compete for scarce
skills within the industry; and
• Companies operating predominantly in the FSU which compete
for expatriate and local staff.
Risk management
The Committee will review incentive arrangements regularly
to ensure that they comply with the Group’s risk management
systems, and that controls are operating effectively. The
Committee also ensures that inappropriate operational or financial
risk-taking is neither encouraged nor rewarded through the
Company’s remuneration policies. Instead, a sensible balance will
be struck between fixed and variable pay, short- and long-term
incentives and cash and equity.
The Committee has access to the Audit Committee and senior
executive management as and when required to discuss any
matters of risk assessment.
Nostrum operates in an industry that is inherently subject to
operational risks. Particular emphasis is therefore placed on
ensuring that health and safety best practice is reinforced by
this Policy.
The Committee consults regularly to ensure that this is the case.
Ongoing review of Policy
The Committee will periodically review whether this Policy is
operating appropriately. Any actions arising from this review will be
assigned to an appropriate person with a deadline to report back
to the Committee. The level and structure of the compensation
system will also be reviewed annually by the Committee.
2024 annual report on remuneration continued
118 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Remuneration Policy
This part of the Directors’ remuneration report sets out the
Remuneration Policy for the Company and has been prepared in
accordance with the Companies Act 2006, the Large and Medium-
sized Companies and Groups (Accounts and Reports)
(Amendment) Regulations 2013, the UK Corporate Governance
Code and the Listing Rules of the UK Listing Authority.
The Company’s current remuneration policy was approved by
shareholders at the Company’s EGM on 11 July 2024.
Policy coverage
This Policy applies to all payments to Directors of the
Company from 11 July 2024 until the approval of a revised
Remuneration Policy.
Policy objectives
This policy is designed to:
• Provide a structure and level of pay that attracts and retains
high-calibre directors capable of delivering the Company’s
strategic objectives.
• Provide clear and transparent performance incentives in a
manner that is consistent with best practice and aligned with the
interests of the Company’s shareholders.
• Align the remuneration of executives with the interests of the
Company’s shareholders, and ensure that rewards are justified by
performance.
• Ensure that the pay of the Executive Directors takes into account:
(i) pay and conditions throughout the Company; and (ii)
corporate governance best practice, including health and safety,
environmental, social and governance risks.
• Allow for future bonuses to be paid in whole or part in
deferred shares.
• Allow for pension contributions to Executive Directors for their
services under service contracts up to a 10% maximum
opportunity, or higher if required by applicable law.
• Allow all Directors (including the Chairman & Non-Executive
Directors) to participate in the management incentive plan (“MIP”).
Peer group
For the purposes of benchmarking appropriate compensation, the
Committee currently regards the following companies as the most
relevant peer group for Nostrum:
• FTSE 350 companies of a similar size to Nostrum;
• Oil and gas E&P companies globally which compete for scarce
skills within the industry; and
• Companies operating predominantly in the FSU which compete
for expatriate and local staff.
Risk management
The Committee will review incentive arrangements regularly
to ensure that they comply with the Group’s risk management
systems, and that controls are operating effectively. The
Committee also ensures that inappropriate operational or financial
risk-taking is neither encouraged nor rewarded through the
Company’s remuneration policies. Instead, a sensible balance will
be struck between fixed and variable pay, short- and long-term
incentives and cash and equity.
The Committee has access to the Audit Committee and senior
executive management as and when required to discuss any
matters of risk assessment.
Nostrum operates in an industry that is inherently subject to
operational risks. Particular emphasis is therefore placed on
ensuring that health and safety best practice is reinforced by
this Policy.
The Committee consults regularly to ensure that this is the case.
Ongoing review of Policy
The Committee will periodically review whether this Policy is
operating appropriately. Any actions arising from this review will be
assigned to an appropriate person with a deadline to report back
to the Committee. The level and structure of the compensation
system will also be reviewed annually by the Committee.
2024 annual report on remuneration continued
118 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Remuneration Policy tables
Executive Directors’ Remuneration Policy table setting out the key components of the reward package for Executive Directors.
Purpose and link to strategy Maximum opportunity Operation Performance criteria
Base pay
To provide market-competitive
base salaries.
There is no prescribed
maximum annual increase.
The Committee takes into
account remuneration levels
at peer group companies
together with the
performance of the
Company and each
individual’s personal
contribution.
Base salary is reviewed annually and fixed for
12 months.
None
Benefits
To reflect market practice and
provided in line with peer
companies.
The aggregate value of such
benefits should not
constitute a significant
proportion of any
employee’s compensation.
Benefits include:
• Medical insurance;
• Life insurance;
• Permanent health insurance (long-term
disability or income protection insurance);
and
• A Company car may be provided for the
Chief Executive Officer.
• The Company may make payments to
Directors in lieu of benefits and may also
make separate benefit arrangements for
Executive Directors in connection with their
service as Executives of Group.
None
Annual bonus
Executive Directors may be
eligible for an annual bonus in
cash and/or deferred shares for
good performance (as
determined at the Board’s
discretion).
Maximum opportunity of
240% of base compensation
for the Chief Executive
Officer.
Maximum opportunity of
100% of base compensation
for the Company’s Chief
Financial Officer (if a
Director). In all other cases,
maximum opportunity of
40% of base salary.
The annual bonus is generally determined by
reference to performance in the prior
calendar year.
Annual bonuses are generally paid sometime
between April and August of each year.
Malus and clawback provisions apply to the
award of annual bonuses such that Executive
Directors may be liable to repay some or all of
their annual bonus if there is a material
misstatement of results, or error in calculation
of any KPI, or serious misconduct.
The discovery period is one year commencing
on the date on which the bonus is determined.
Key performance indicators against
which the performance of the
Executive Directors will be measured in
the following year are determined at
the end of each year and all non-
commercially-sensitive key
performance indicators are disclosed
in the Directors’ Remuneration Report.
Any commercially sensitive
performance measures will be
disclosed retrospectively following
completion of the relevant financial
year.
Performance against key performance
indicators for the previous year is also
disclosed in the Directors’
Remuneration Report to show how the
Board has determined Executive
Director performance against the
relevant key performance indicators for
that year, and consequently the levels
of annual bonus payable to the
Executive Directors.
Management incentive plan (MIP)
To incentivise executive and
non-executive directors, senior
management and key staff of the
Company and its subsidiaries to
achieve the Company’s strategic
goals, defined as certain key
commercial milestones
(Qualifying Events).
To help retain executives and
other key employees, and align
their interests with shareholders
through achievement by the
Company of value creation
catalysts.
Payments depend on actual
Awards made and Qualifying
Events achieved, but over
the entire duration of the MIP
aggregate MIP payments to
the Chief Executive Officer
may not exceed 16 times his
current
base salary.
Awards are made at the sole discretion of the
Committee (in consultation with the Chief
Executive Officer). Awards are made in cash.
Payments to participants under the MIP may
be made if the Company achieves interim
milestones and upon occurrence of a value
accretive event meeting defined criteria.
Any amounts payable due to achievement of
an interim milestone would not be subject to
clawback based on the terms of a subsequent
value accretive event.
Qualifying Events to be determined at
the discretion of the Committee (in
consultation with the Chairman and
Chief Executive Officer) based on
certain key commercial milestones
(being value creation catalysts).
Share price performance is not used as
a Qualifying Event.
Any commercially sensitive
performance measures will be
disclosed retrospectively following
completion of the relevant financial
year in which the milestone is achieved. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 119
Executive Directors’ Remuneration Policy table setting out the key components of the reward package for Executive Directors.
Purpose and link to strategy Maximum opportunity Operation Performance criteria
Base pay
To provide market-competitive
base salaries.
There is no prescribed
maximum annual increase.
The Committee takes into
account remuneration levels
at peer group companies
together with the
performance of the
Company and each
individual’s personal
contribution.
Base salary is reviewed annually and fixed for
12 months.
None
Benefits
To reflect market practice and
provided in line with peer
companies.
The aggregate value of such
benefits should not
constitute a significant
proportion of any
employee’s compensation.
Benefits include:
• Medical insurance;
• Life insurance;
• Permanent health insurance (long-term
disability or income protection insurance);
and
• A Company car may be provided for the
Chief Executive Officer.
• The Company may make payments to
Directors in lieu of benefits and may also
make separate benefit arrangements for
Executive Directors in connection with their
service as Executives of Group.
None
Annual bonus
Executive Directors may be
eligible for an annual bonus in
cash and/or deferred shares for
good performance (as
determined at the Board’s
discretion).
Maximum opportunity of
240% of base compensation
for the Chief Executive
Officer.
Maximum opportunity of
100% of base compensation
for the Company’s Chief
Financial Officer (if a
Director). In all other cases,
maximum opportunity of
40% of base salary.
The annual bonus is generally determined by
reference to performance in the prior
calendar year.
Annual bonuses are generally paid sometime
between April and August of each year.
Malus and clawback provisions apply to the
award of annual bonuses such that Executive
Directors may be liable to repay some or all of
their annual bonus if there is a material
misstatement of results, or error in calculation
of any KPI, or serious misconduct.
The discovery period is one year commencing
on the date on which the bonus is determined.
Key performance indicators against
which the performance of the
Executive Directors will be measured in
the following year are determined at
the end of each year and all non-
commercially-sensitive key
performance indicators are disclosed
in the Directors’ Remuneration Report.
Any commercially sensitive
performance measures will be
disclosed retrospectively following
completion of the relevant financial
year.
Performance against key performance
indicators for the previous year is also
disclosed in the Directors’
Remuneration Report to show how the
Board has determined Executive
Director performance against the
relevant key performance indicators for
that year, and consequently the levels
of annual bonus payable to the
Executive Directors.
Management incentive plan (MIP)
To incentivise executive and
non-executive directors, senior
management and key staff of the
Company and its subsidiaries to
achieve the Company’s strategic
goals, defined as certain key
commercial milestones
(Qualifying Events).
To help retain executives and
other key employees, and align
their interests with shareholders
through achievement by the
Company of value creation
catalysts.
Payments depend on actual
Awards made and Qualifying
Events achieved, but over
the entire duration of the MIP
aggregate MIP payments to
the Chief Executive Officer
may not exceed 16 times his
current
base salary.
Awards are made at the sole discretion of the
Committee (in consultation with the Chief
Executive Officer). Awards are made in cash.
Payments to participants under the MIP may
be made if the Company achieves interim
milestones and upon occurrence of a value
accretive event meeting defined criteria.
Any amounts payable due to achievement of
an interim milestone would not be subject to
clawback based on the terms of a subsequent
value accretive event.
Qualifying Events to be determined at
the discretion of the Committee (in
consultation with the Chairman and
Chief Executive Officer) based on
certain key commercial milestones
(being value creation catalysts).
Share price performance is not used as
a Qualifying Event.
Any commercially sensitive
performance measures will be
disclosed retrospectively following
completion of the relevant financial
year in which the milestone is achieved. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 119
2024 ANNUAL REPORT ON REMUNERATION
Purpose and link to strategy Maximum opportunity Operation Performance criteria
Nostrum Oil & Gas plc 2017 Long-Term Incentive Plan (LTIP)
To incentivise Executive
Directors and employees over a
longer timeframe, and to
increase their interest in the
Company’s long-term business
goals and performance through
share ownership.
To help retain executives and
other key employees, and align
their interests with shareholders
through building a shareholding
in the Company.
The LTIP has effectively been
replaced by the MIP and no
awards were made under the
LTIP in 2019, 2020, 2021, 2022
2023 and 2024.
200% of base salary in any
financial year.
Awards of nominal-cost options are made at
the sole discretion of the Committee.
It was anticipated that awards would be
granted annually in the period 2017 to 2019
subject to annual performance conditions.
Generally, awards have a one-year
performance period attached to them and will
not vest for an additional two years following
the date on which the Committee determines
whether or not a performance condition has
been wholly or partly satisfied, such that no
award may vest before the third anniversary
of the date of grant.
The Committee has the discretion to decide,
on or before the grant of an award, that a
participant shall be entitled to receive
dividend equivalents arising over the period
between the grant date and the vesting date,
with such amounts being payable in cash or
shares in respect of shares which vest.
Malus and clawback provisions apply to the
LTIP such that participants are liable to repay/
forfeit some or all of their shares if there is a
material misstatement of results, or error in
calculation, or if there is serious misconduct.
The discovery period is three years
commencing on the date on which the award
vests, which can be extended by the
Committee for an additional two years if an
event occurs which the Committee determines
could result in the operation of recovery or
withholding provisions.
Performance measures are generally
measured over one year though the
Committee has the discretion to
apply a longer performance period
to awards.
The Committee has the discretion
to set any performance condition
attaching to awards granted under
the LTIP.
Vesting of awards would ordinarily
be based:
• In part on average accrued sales
volumes measured in barrels of oil
equivalent per day; and
• In part on reserves measurement on
the basis of 2P barrels of oil per
share.
Phantom share option plan (the Plan)
The Board places great
importance on minimising
dilution of existing shareholders’
equity. Share awards will
therefore only be made to senior
management who are able to
make a material contribution to
shareholder value that
substantially exceeds the value
of any share awards made.
The Plan has effectively been
replaced by the MIP and no
awards were made under the
Plan in 2019, 2020, 2021, 2022
2023 and 2024.
Share awards will only be
made on the basis of
achieving concrete
long-term objectives defined
in advance by the
Committee. Share awards
will vest over several years.
In accordance with the Plan
rules, the total number of
shares that may be granted
pursuant to the Plan is
five million.
Intertrust Employee Benefit Trustee Limited
administers the Plan and is responsible for
granting rights under the Plan.
Each right entitles holders to receive, on
exercise, a cash amount equal to the excess of
the market value on the exercise date of the
Ordinary Shares of the Company to which it
relates over a base value set at the date
of grant.
All Executive Directors of the Company are
eligible to participate in the Plan at the
discretion of the Board.
Awards vest on the basis described below.
Long-term objectives are to be reviewed at
every Committee meeting to ensure that they
are appropriate, relevant and rigorous.
Share awards made in future may be reduced
at any time prior to vesting, at the discretion of
the Committee, following events such as (but
not restricted to) a material misstatement of
results, failure of risk management, breach of
health and safety regulations or serious
reputational damage to the Company.
None
2024 annual report on remuneration continued
120 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Purpose and link to strategy Maximum opportunity Operation Performance criteria
Nostrum Oil & Gas plc 2017 Long-Term Incentive Plan (LTIP)
To incentivise Executive
Directors and employees over a
longer timeframe, and to
increase their interest in the
Company’s long-term business
goals and performance through
share ownership.
To help retain executives and
other key employees, and align
their interests with shareholders
through building a shareholding
in the Company.
The LTIP has effectively been
replaced by the MIP and no
awards were made under the
LTIP in 2019, 2020, 2021, 2022
2023 and 2024.
200% of base salary in any
financial year.
Awards of nominal-cost options are made at
the sole discretion of the Committee.
It was anticipated that awards would be
granted annually in the period 2017 to 2019
subject to annual performance conditions.
Generally, awards have a one-year
performance period attached to them and will
not vest for an additional two years following
the date on which the Committee determines
whether or not a performance condition has
been wholly or partly satisfied, such that no
award may vest before the third anniversary
of the date of grant.
The Committee has the discretion to decide,
on or before the grant of an award, that a
participant shall be entitled to receive
dividend equivalents arising over the period
between the grant date and the vesting date,
with such amounts being payable in cash or
shares in respect of shares which vest.
Malus and clawback provisions apply to the
LTIP such that participants are liable to repay/
forfeit some or all of their shares if there is a
material misstatement of results, or error in
calculation, or if there is serious misconduct.
The discovery period is three years
commencing on the date on which the award
vests, which can be extended by the
Committee for an additional two years if an
event occurs which the Committee determines
could result in the operation of recovery or
withholding provisions.
Performance measures are generally
measured over one year though the
Committee has the discretion to
apply a longer performance period
to awards.
The Committee has the discretion
to set any performance condition
attaching to awards granted under
the LTIP.
Vesting of awards would ordinarily
be based:
• In part on average accrued sales
volumes measured in barrels of oil
equivalent per day; and
• In part on reserves measurement on
the basis of 2P barrels of oil per
share.
Phantom share option plan (the Plan)
The Board places great
importance on minimising
dilution of existing shareholders’
equity. Share awards will
therefore only be made to senior
management who are able to
make a material contribution to
shareholder value that
substantially exceeds the value
of any share awards made.
The Plan has effectively been
replaced by the MIP and no
awards were made under the
Plan in 2019, 2020, 2021, 2022
2023 and 2024.
Share awards will only be
made on the basis of
achieving concrete
long-term objectives defined
in advance by the
Committee. Share awards
will vest over several years.
In accordance with the Plan
rules, the total number of
shares that may be granted
pursuant to the Plan is
five million.
Intertrust Employee Benefit Trustee Limited
administers the Plan and is responsible for
granting rights under the Plan.
Each right entitles holders to receive, on
exercise, a cash amount equal to the excess of
the market value on the exercise date of the
Ordinary Shares of the Company to which it
relates over a base value set at the date
of grant.
All Executive Directors of the Company are
eligible to participate in the Plan at the
discretion of the Board.
Awards vest on the basis described below.
Long-term objectives are to be reviewed at
every Committee meeting to ensure that they
are appropriate, relevant and rigorous.
Share awards made in future may be reduced
at any time prior to vesting, at the discretion of
the Committee, following events such as (but
not restricted to) a material misstatement of
results, failure of risk management, breach of
health and safety regulations or serious
reputational damage to the Company.
None
2024 annual report on remuneration continued
120 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Purpose and link to strategy
Maximum opportunity
Operation
Performance criteria
Pensions
To remain competitive in the
marketplace and provide
income in retirement.
10% or, if higher, any
minimum pension
contribution which may
be required under
applicable law.
There are ordinarily no pension contributions
or provisions for Directors, although there may
be pension arrangements made for Executive
Directors in connection with their service as
executives of Group companies.
None
Shareholding guideline
Aligns interests of executive
directors with those of
shareholders.
Executive Directors are
encouraged to maintain a
holding in the Company to
align their interests with
shareholders.
If the Company grants shares to Directors
outside the LTIP by way of bonus or otherwise,
they will be required to hold 50% of such
shares for a three-year period.
The Committee monitors the holdings of
all Directors.
None
Non-Executive Directors’ Remuneration Policy table setting out the key components of the reward package for Non-Executive Directors.
Purpose and link to strategy Maximum opportunity Operation Performance criteria
Fees for Non-Executive Directors and Chairman
Attract and retain high-
performing individuals.
No prescribed maximum
annual increase in fees.
Any fee increases are usually considered at the
end of each year and the Board and, where
applicable, the Committee considers pay data
at comparable companies of a similar scale.
The chairs of the Committees receive
additional fees.
Limited benefits may be delivered (e.g.
provision of iPad and travel-related expenses).
Non-Executive Directors and the Chairman are
not eligible to participate in the Plan or the
LTIP, but are eligible to participate in the MIP.
No other eligibility for participation in
bonuses.
None
Management Incentive Plan (MIP)
To incentivise non-executive
directors of the Company to
achieve the Company’s strategic
goals, defined as certain key
commercial milestones
(Qualifying Events).
Payments depend on actual
Awards made and Qualifying
Events achieved, but over
the entire duration of the MIP
aggregate MIP payments: (a)
to the Chairman may not
exceed 19 times his current
annual director’s fees, and
(b) to each of the other
non-executive directors may
not exceed 19 times the
current level of annual
director’s fees payable to
non-executive directors
other than the Chairman.
Awards are made with the approval of (a) the
members of the Committee and the Chief
Executive Officer in relation to the Chairman,
and (b) the Chairman and the Chief Executive
Officer in relation to the other non-executive
directors. Awards are made in cash.
Payments to participants under the MIP may
be made if the Company achieves interim
milestones and upon occurrence of a value
accretive event meeting defined criteria.
Any amounts payable due to achievement of
an interim milestone would not be subject to
clawback based on the terms of a subsequent
value accretive event.
Qualifying Events to be determined at
the discretion of the Committee (in
consultation with the Chairman and
Chief Executive Officer) based on
certain key commercial milestones
(being value creation catalysts).
Share price performance is not used
as a Qualifying Event.
Any commercially sensitive
performance measures will be
disclosed retrospectively following
completion of the relevant financial
year in which the milestone is achieved. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 121
Pensions
To remain competitive in the
marketplace and provide
income in retirement.
10% or, if higher, any
minimum pension
contribution which may
be required under
applicable law.
There are ordinarily no pension contributions
or provisions for Directors, although there may
be pension arrangements made for Executive
Directors in connection with their service as
executives of Group companies.
None
Shareholding guideline
Aligns interests of executive
directors with those of
shareholders.
Executive Directors are
encouraged to maintain a
holding in the Company to
align their interests with
shareholders.
If the Company grants shares to Directors
outside the LTIP by way of bonus or otherwise,
they will be required to hold 50% of such
shares for a three-year period.
The Committee monitors the holdings of
all Directors.
None
Non-Executive Directors’ Remuneration Policy table setting out the key components of the reward package for Non-Executive Directors.
Purpose and link to strategy Maximum opportunity Operation Performance criteria
Fees for Non-Executive Directors and Chairman
Attract and retain high-
performing individuals.
No prescribed maximum
annual increase in fees.
Any fee increases are usually considered at the
end of each year and the Board and, where
applicable, the Committee considers pay data
at comparable companies of a similar scale.
The chairs of the Committees receive
additional fees.
Limited benefits may be delivered (e.g.
provision of iPad and travel-related expenses).
Non-Executive Directors and the Chairman are
not eligible to participate in the Plan or the
LTIP, but are eligible to participate in the MIP.
No other eligibility for participation in
bonuses.
None
Management Incentive Plan (MIP)
To incentivise non-executive
directors of the Company to
achieve the Company’s strategic
goals, defined as certain key
commercial milestones
(Qualifying Events).
Payments depend on actual
Awards made and Qualifying
Events achieved, but over
the entire duration of the MIP
aggregate MIP payments: (a)
to the Chairman may not
exceed 19 times his current
annual director’s fees, and
(b) to each of the other
non-executive directors may
not exceed 19 times the
current level of annual
director’s fees payable to
non-executive directors
other than the Chairman.
Awards are made with the approval of (a) the
members of the Committee and the Chief
Executive Officer in relation to the Chairman,
and (b) the Chairman and the Chief Executive
Officer in relation to the other non-executive
directors. Awards are made in cash.
Payments to participants under the MIP may
be made if the Company achieves interim
milestones and upon occurrence of a value
accretive event meeting defined criteria.
Any amounts payable due to achievement of
an interim milestone would not be subject to
clawback based on the terms of a subsequent
value accretive event.
Qualifying Events to be determined at
the discretion of the Committee (in
consultation with the Chairman and
Chief Executive Officer) based on
certain key commercial milestones
(being value creation catalysts).
Share price performance is not used
as a Qualifying Event.
Any commercially sensitive
performance measures will be
disclosed retrospectively following
completion of the relevant financial
year in which the milestone is achieved. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 121
2024 ANNUAL REPORT ON REMUNERATION
Phantom share option plan
The Company operates the Plan in accordance with the Plan rules,
the Listing Rules, the Disclosure and Transparency rules and other
applicable rules. In order to retain talent, options are generally
granted in tranches exercisable at the following times:
• As to 20% of the Ordinary Shares in respect of which an option is
granted, from the first anniversary of the date of grant;
• As to a further 20% of the Ordinary Shares in respect of which an
option is granted, from the second anniversary of the date of grant;
• As to a further 20% of the Ordinary Shares in respect of which an
option is granted, from the third anniversary of the date of grant;
• As to a further 20% of the Ordinary Shares in respect of which an
option is granted, from the fourth anniversary of the date of
grant; and
• As to the remaining 20% of the Ordinary Shares in respect of
which an option is granted, from the fifth anniversary of the date
of grant.
The Board retains discretion over a number of areas relating to the
operation and administration of the Plan, which include, but are not
limited to: (i) who participates; (ii) the timing of the grant of an
award; and (iii) the size of the award.
Dividend waiver
The trustee has agreed to waive any dividends on shares held
under the Plan and the LTIP.
Treatment of existing arrangements
For the avoidance of doubt, authority is given to the Company to
honour any commitments entered into with current or former
Directors notwithstanding the approval of the Policy. This will last
until the existing incentives vest (or lapse) or the benefits of any
contractual arrangements no longer apply.
Remuneration scenarios for
Executive Directors
The bar charts below provide estimates of the potential
remuneration of the executive directors for 2025.
Three scenarios are presented for each executive director which
are based on the following assumptions:
The “minimum” columns are intended to show the fixed level of
remuneration to which executive directors are entitled in 2025
irrespective of performance levels, namely base salary, benefits
(which includes any payments made in lieu of benefits made under
the executive directors employment contracts for their roles as
executives of the Group and not under their service contracts as
executive directors) and any payments made in lieu of the provision
of a pension scheme (which are paid under the executive directors
employment contracts for their roles as executives of the Group
and not under their service contracts as executive directors). No
bonus payments are assumed for minimum performance.
The “on target” scenario seeks to illustrate the remuneration the
executive directors would receive if performance was in line with
expectation.
The “maximum” columns illustrate total remuneration levels in
circumstances where the variable elements pay out in full.
As stated above, no Executive Director participated in the LTIP or
the Phantom Share Option Scheme in 2024 and the Board will not
award any shares under the Phantom Share Option Scheme in
2025. The Committee does not envisage any awards under the
Company’s existing long-term incentive plan in 2025. Therefore, no
performance conditions have been set for 2025.
Arfan Khan – Chief Executive Officer
(amounts in USD thousand)
Minimum
On target
Maximum
Fixed salary
100%
53%
32%
659
1,234
2,040
Bonus
47%
68%
Recruitment
The Committee expects any new Executive Directors to be
engaged on terms that are consistent with this Policy, but the
Committee acknowledges that it cannot always predict the
circumstances under which any new Executive Director may be
recruited and so, accordingly, in each case, the Committee will
consider:
• The objective of attracting, motivating and retaining the highest
calibre directors in a manner that is consistent with best practice
and aligned with the interests of the Company’s shareholders;
• Salary, benefits, annual bonus and long-term incentives will be
determined within the framework of the Executive Directors’
Remuneration Policy table setting out the key components of the
reward package for Executive Directors;
• Where an individual would be forfeiting valuable remuneration in
order to join the Company, the need to retain flexibility should be
considered in order for the Committee to be able to set base
salaries at a level necessary to facilitate the hiring of the highest
calibre candidates, including awards or payments to compensate
for remuneration arrangements forfeited on leaving a previous
employer. The Committee would require reasonable evidence of
the nature and value of any forfeited compensation and would, to
the extent practicable, ensure any compensation awarded was
no more valuable than the forfeited award;
• Judgement will be exercised to determine the appropriate
measure of compensation for any forfeited award by taking
account of relevant factors such as the value of any lost award,
performance conditions and the time over which they would
have vested or been paid;
• Where an existing employee of the Company is promoted to the
Board, the Company will honour any commitment to
remuneration made in respect of a prior role, including any
outstanding awards of options under the Plan;
• The need, in order to recruit the best candidates, for the
Company to offer sign-on remuneration, the necessity and level
of which will depend on circumstances; and
• Where an individual is relocating in order to take up a role, the
Company may provide certain one-off benefits including, but not
limited to, reasonable relocation expenses, accommodation,
housing allowance and assistance with visa applications.
2024 annual report on remuneration continued
122 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Phantom share option plan
The Company operates the Plan in accordance with the Plan rules,
the Listing Rules, the Disclosure and Transparency rules and other
applicable rules. In order to retain talent, options are generally
granted in tranches exercisable at the following times:
• As to 20% of the Ordinary Shares in respect of which an option is
granted, from the first anniversary of the date of grant;
• As to a further 20% of the Ordinary Shares in respect of which an
option is granted, from the second anniversary of the date of grant;
• As to a further 20% of the Ordinary Shares in respect of which an
option is granted, from the third anniversary of the date of grant;
• As to a further 20% of the Ordinary Shares in respect of which an
option is granted, from the fourth anniversary of the date of
grant; and
• As to the remaining 20% of the Ordinary Shares in respect of
which an option is granted, from the fifth anniversary of the date
of grant.
The Board retains discretion over a number of areas relating to the
operation and administration of the Plan, which include, but are not
limited to: (i) who participates; (ii) the timing of the grant of an
award; and (iii) the size of the award.
Dividend waiver
The trustee has agreed to waive any dividends on shares held
under the Plan and the LTIP.
Treatment of existing arrangements
For the avoidance of doubt, authority is given to the Company to
honour any commitments entered into with current or former
Directors notwithstanding the approval of the Policy. This will last
until the existing incentives vest (or lapse) or the benefits of any
contractual arrangements no longer apply.
Remuneration scenarios for
Executive Directors
The bar charts below provide estimates of the potential
remuneration of the executive directors for 2025.
Three scenarios are presented for each executive director which
are based on the following assumptions:
The “minimum” columns are intended to show the fixed level of
remuneration to which executive directors are entitled in 2025
irrespective of performance levels, namely base salary, benefits
(which includes any payments made in lieu of benefits made under
the executive directors employment contracts for their roles as
executives of the Group and not under their service contracts as
executive directors) and any payments made in lieu of the provision
of a pension scheme (which are paid under the executive directors
employment contracts for their roles as executives of the Group
and not under their service contracts as executive directors). No
bonus payments are assumed for minimum performance.
The “on target” scenario seeks to illustrate the remuneration the
executive directors would receive if performance was in line with
expectation.
The “maximum” columns illustrate total remuneration levels in
circumstances where the variable elements pay out in full.
As stated above, no Executive Director participated in the LTIP or
the Phantom Share Option Scheme in 2024 and the Board will not
award any shares under the Phantom Share Option Scheme in
2025. The Committee does not envisage any awards under the
Company’s existing long-term incentive plan in 2025. Therefore, no
performance conditions have been set for 2025.
Arfan Khan – Chief Executive Officer
(amounts in USD thousand)
Minimum
On target
Maximum
Fixed salary
100%
53%
32%
659
1,234
2,040
Bonus
47%
68%
Recruitment
The Committee expects any new Executive Directors to be
engaged on terms that are consistent with this Policy, but the
Committee acknowledges that it cannot always predict the
circumstances under which any new Executive Director may be
recruited and so, accordingly, in each case, the Committee will
consider:
• The objective of attracting, motivating and retaining the highest
calibre directors in a manner that is consistent with best practice
and aligned with the interests of the Company’s shareholders;
• Salary, benefits, annual bonus and long-term incentives will be
determined within the framework of the Executive Directors’
Remuneration Policy table setting out the key components of the
reward package for Executive Directors;
• Where an individual would be forfeiting valuable remuneration in
order to join the Company, the need to retain flexibility should be
considered in order for the Committee to be able to set base
salaries at a level necessary to facilitate the hiring of the highest
calibre candidates, including awards or payments to compensate
for remuneration arrangements forfeited on leaving a previous
employer. The Committee would require reasonable evidence of
the nature and value of any forfeited compensation and would, to
the extent practicable, ensure any compensation awarded was
no more valuable than the forfeited award;
• Judgement will be exercised to determine the appropriate
measure of compensation for any forfeited award by taking
account of relevant factors such as the value of any lost award,
performance conditions and the time over which they would
have vested or been paid;
• Where an existing employee of the Company is promoted to the
Board, the Company will honour any commitment to
remuneration made in respect of a prior role, including any
outstanding awards of options under the Plan;
• The need, in order to recruit the best candidates, for the
Company to offer sign-on remuneration, the necessity and level
of which will depend on circumstances; and
• Where an individual is relocating in order to take up a role, the
Company may provide certain one-off benefits including, but not
limited to, reasonable relocation expenses, accommodation,
housing allowance and assistance with visa applications.
2024 annual report on remuneration continued
122 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
In making any decisions on remuneration for new joiners (including NEDs), the Committee will endeavour to balance the expectations of
shareholders with current market and corporate governance best practice and the requirements of any new joiner, and would strive to pay
no more than is necessary to attract the right talent to the role.
Service agreements
As at 31 December 2024, summary details of each Director’s service agreement were as follows:
Director’s service agreement date
As most recently
amended (USD)
Arfan Khan 26 January 2021 530,505
1. The remuneration of Arfan Khan is denominated in GBP. 2024: GBP/USD: 1,279.
2. Annual salary and fees represents the total salary and fees (excluding benefits/pension, and discretionary remuneration) from the Group for both the Director’s
executive and director service roles.
The appointment of each of the Executive Directors continues until the Company’s Annual General Meeting and their ongoing
appointment is subject to being re-elected as a director at each subsequent Annual General Meeting. Each Executive Director may be
required to resign at any time in accordance with the Company’s Articles or for any regulatory reason such as the revocation of any
approvals required from the Financial Conduct Authority (FCA).
The Company may lawfully terminate any Executive Director’s employment in the following ways:
• At any time upon 6 months’ written notice (Mr Khan); and
• Without notice in circumstances where the Company is entitled to terminate for cause.
The lawful termination mechanisms described above are without prejudice to the employer’s ability in appropriate circumstances to
terminate in breach of the notice period referred to above, and thereby to be liable for damages to the Executive Director.
The Executive Directors are not permitted to take up any office or employment with, or have any direct or indirect interest in, any firm or
company which is in direct or indirect competition with the Company or any other member of the Group, or any company in which any
member of the Group has an interest, without the consent of the Board.
In addition, the Chief Executive Officer is subject to non-solicitation covenants in relation to Group companies for 12 months from the
date of termination of his service contract.
Copies of the Executive Directors’ service agreements and the Non-Executive Directors’ letters of appointment are available for
inspection at the Company’s registered office during normal business hours and at the Annual General Meeting.
Payments for departing Executive Directors
Provision Policy
Notice period and
compensation for loss of office
in service contracts
6 months’ notice from the Company to Mr Khan.
Base salary is paid in line with the notice period. Notice period payments will either be made as normal (if
the Executive Director continues to work during the notice period or is on gardening leave) or they will
be made as monthly payments in lieu of notice (subject to mitigation if alternative employment is found).
Treatment of annual bonus
on termination
No entitlement.
Treatment of unvested share
option awards under the Plan
An Executive Director’s awards will generally lapse to the extent they have not vested on the date of
voluntary cessation of employment and any portion that remains outstanding but unexercised after
12 months following such cessation will lapse. Mr Khan did not participate in the Plan in 2024.
Treatment of unvested awards
under the LTIP
For a Director considered to be a “good leaver” before the original vesting date (including leaving the
Company on retirement, redundancy, ill health, as a result of death in service or in other circumstances
determined by the Committee), outstanding awards will be pro-rated for time and vest subject to
performance on the original vesting date. For a director who is considered a “good leaver” after the
original vesting date, any awards will remain exercisable for a period of 12 months commencing on the
date of cessation. For a Director whose employment is terminated for any other reason, the award will
lapse in full. Mr Khan did not participate in the LTIP in 2024.
In particular circumstances, an arrangement may be agreed to facilitate the exit of a particular individual. Any such arrangement would be
made bearing in mind the desire to minimise costs for the Group and only in circumstances where it is considered in the best interests of
shareholders. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 123
shareholders with current market and corporate governance best practice and the requirements of any new joiner, and would strive to pay
no more than is necessary to attract the right talent to the role.
Service agreements
As at 31 December 2024, summary details of each Director’s service agreement were as follows:
Director’s service agreement date
As most recently
amended (USD)
Arfan Khan 26 January 2021 530,505
1. The remuneration of Arfan Khan is denominated in GBP. 2024: GBP/USD: 1,279.
2. Annual salary and fees represents the total salary and fees (excluding benefits/pension, and discretionary remuneration) from the Group for both the Director’s
executive and director service roles.
The appointment of each of the Executive Directors continues until the Company’s Annual General Meeting and their ongoing
appointment is subject to being re-elected as a director at each subsequent Annual General Meeting. Each Executive Director may be
required to resign at any time in accordance with the Company’s Articles or for any regulatory reason such as the revocation of any
approvals required from the Financial Conduct Authority (FCA).
The Company may lawfully terminate any Executive Director’s employment in the following ways:
• At any time upon 6 months’ written notice (Mr Khan); and
• Without notice in circumstances where the Company is entitled to terminate for cause.
The lawful termination mechanisms described above are without prejudice to the employer’s ability in appropriate circumstances to
terminate in breach of the notice period referred to above, and thereby to be liable for damages to the Executive Director.
The Executive Directors are not permitted to take up any office or employment with, or have any direct or indirect interest in, any firm or
company which is in direct or indirect competition with the Company or any other member of the Group, or any company in which any
member of the Group has an interest, without the consent of the Board.
In addition, the Chief Executive Officer is subject to non-solicitation covenants in relation to Group companies for 12 months from the
date of termination of his service contract.
Copies of the Executive Directors’ service agreements and the Non-Executive Directors’ letters of appointment are available for
inspection at the Company’s registered office during normal business hours and at the Annual General Meeting.
Payments for departing Executive Directors
Provision Policy
Notice period and
compensation for loss of office
in service contracts
6 months’ notice from the Company to Mr Khan.
Base salary is paid in line with the notice period. Notice period payments will either be made as normal (if
the Executive Director continues to work during the notice period or is on gardening leave) or they will
be made as monthly payments in lieu of notice (subject to mitigation if alternative employment is found).
Treatment of annual bonus
on termination
No entitlement.
Treatment of unvested share
option awards under the Plan
An Executive Director’s awards will generally lapse to the extent they have not vested on the date of
voluntary cessation of employment and any portion that remains outstanding but unexercised after
12 months following such cessation will lapse. Mr Khan did not participate in the Plan in 2024.
Treatment of unvested awards
under the LTIP
For a Director considered to be a “good leaver” before the original vesting date (including leaving the
Company on retirement, redundancy, ill health, as a result of death in service or in other circumstances
determined by the Committee), outstanding awards will be pro-rated for time and vest subject to
performance on the original vesting date. For a director who is considered a “good leaver” after the
original vesting date, any awards will remain exercisable for a period of 12 months commencing on the
date of cessation. For a Director whose employment is terminated for any other reason, the award will
lapse in full. Mr Khan did not participate in the LTIP in 2024.
In particular circumstances, an arrangement may be agreed to facilitate the exit of a particular individual. Any such arrangement would be
made bearing in mind the desire to minimise costs for the Group and only in circumstances where it is considered in the best interests of
shareholders. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 123
2024 ANNUAL REPORT ON REMUNERATION
Change of control
In accordance with the LTIP rules and the terms of the awards granted in 2017 and 2018 under the LTIP, if there is a sale of all or
substantially all of the Company or the Company’s business in circumstances where such sale has been approved by a majority of
shareholders and is at a price of $10 per share or more, then all awards granted will vest in full regardless of the achievement or otherwise
of applicable performance conditions on the date of such event if they have not already vested, and all awards will remain exercisable for
one month from such date. To the extent that any option is not exercised in such period, it shall lapse at the end of that period.
Non-Executive Directors
The Chairman and Executive Directors set the remuneration package for Non-Executive Directors in line with the Non-Executive
Directors’ Remuneration Policy table and subject to the Company’s Articles of Association (the Articles).
Non-Executive Director appointment letters
The following table provides details of Non-Executive Director appointment letters as at 31 December 2024 (Mr Cox resigned on
31 May 2024):
Name Position Date of letter of appointment Expiry of current term Notice period
Chris Cox Independent Non-Executive Director 14 February 2023 14 February 2026 3 months
Viktor Gladun Non-Executive Director 15 August 2024 15 August 2027 3 months
Chris Hopkinson Independent Non-Executive Director 14 February 2023 14 February 2026 3 months
Martin Gudgeon Non-Executive Director 14 February 2023 14 February 2026 3 months
Fiona Paulus Independent Non-Executive Director 14 February 2023 14 February 2026 3 months
Stephen Whyte Chairman 14 February 2023 14 February 2026 9 months
2024 annual report on remuneration continued
Each appointment is for an initial term of three years, subject to
being re-elected at each Annual General Meeting, save that a
Non-Executive Director or the Company may terminate the
appointment at any time upon one month’s written notice, or that a
Non-Executive Director may be required to resign at any time in
accordance with the Articles of the Company, the UK Corporate
Governance Code or for any regulatory reason such as the
revocation of approvals required from the FCA.
Each of the Non-Executive Directors is entitled to an annual fee
paid in twelve equal instalments and to reimbursement of
reasonable expenses. There is no entitlement for Non-Executive
Directors to participate in the Plan or the LTIP. Non-Executive
Directors are entitled to participate in the MIP.
The Non-Executive Directors are not permitted to take up any
office or employment with, or have any direct or indirect interest in,
any firm or company that was in direct or indirect competition with
the Company without the consent of the Board.
Upon termination of the appointment and where such termination
is for any reason other than due to the Non-Executive Director’s
gross misconduct, material breach of the terms of the
appointment, act of fraud or dishonesty or wilful neglect of the
Non-Executive Director’s duties, the Non- Executive Director is
entitled to be paid a pro-rated amount of their fees in respect of
the period between the beginning of the quarter in which
termination took place and the termination date.
Otherwise, none of the Non-Executive Directors is entitled to any
damages for loss of office and no fee is payable in respect of any
unexpired portion of the term of the appointment.
The Company intends to comply with Provision 18 of the UK
Corporate Governance Code and accordingly all Directors will
stand for re-election by shareholders at future Annual General
Meetings until the Board determines otherwise.
Statement of consideration of employment
conditions elsewhere in the Company
We have not consulted with employees on the executive
Remuneration Policy. However, when determining the Policy for
Executive Directors we have been mindful of the pay and
employment conditions of employees across the Group as a whole.
Statement of consideration of shareholder
views
Senior executive management of the Company regularly meet with
shareholders and solicit their views on the Company’s policies in
relation to Director and Executive remuneration, and take such
views into account when formulating remuneration policies and
remuneration levels in specific cases.
Approval of the Directors’ remuneration
report
The Directors’ remuneration report was approved by the Board on
22 April 2025.
On behalf of the Board
Arfan Khan
Chief Executive Officer
22 April 2025
124 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Change of control
In accordance with the LTIP rules and the terms of the awards granted in 2017 and 2018 under the LTIP, if there is a sale of all or
substantially all of the Company or the Company’s business in circumstances where such sale has been approved by a majority of
shareholders and is at a price of $10 per share or more, then all awards granted will vest in full regardless of the achievement or otherwise
of applicable performance conditions on the date of such event if they have not already vested, and all awards will remain exercisable for
one month from such date. To the extent that any option is not exercised in such period, it shall lapse at the end of that period.
Non-Executive Directors
The Chairman and Executive Directors set the remuneration package for Non-Executive Directors in line with the Non-Executive
Directors’ Remuneration Policy table and subject to the Company’s Articles of Association (the Articles).
Non-Executive Director appointment letters
The following table provides details of Non-Executive Director appointment letters as at 31 December 2024 (Mr Cox resigned on
31 May 2024):
Name Position Date of letter of appointment Expiry of current term Notice period
Chris Cox Independent Non-Executive Director 14 February 2023 14 February 2026 3 months
Viktor Gladun Non-Executive Director 15 August 2024 15 August 2027 3 months
Chris Hopkinson Independent Non-Executive Director 14 February 2023 14 February 2026 3 months
Martin Gudgeon Non-Executive Director 14 February 2023 14 February 2026 3 months
Fiona Paulus Independent Non-Executive Director 14 February 2023 14 February 2026 3 months
Stephen Whyte Chairman 14 February 2023 14 February 2026 9 months
2024 annual report on remuneration continued
Each appointment is for an initial term of three years, subject to
being re-elected at each Annual General Meeting, save that a
Non-Executive Director or the Company may terminate the
appointment at any time upon one month’s written notice, or that a
Non-Executive Director may be required to resign at any time in
accordance with the Articles of the Company, the UK Corporate
Governance Code or for any regulatory reason such as the
revocation of approvals required from the FCA.
Each of the Non-Executive Directors is entitled to an annual fee
paid in twelve equal instalments and to reimbursement of
reasonable expenses. There is no entitlement for Non-Executive
Directors to participate in the Plan or the LTIP. Non-Executive
Directors are entitled to participate in the MIP.
The Non-Executive Directors are not permitted to take up any
office or employment with, or have any direct or indirect interest in,
any firm or company that was in direct or indirect competition with
the Company without the consent of the Board.
Upon termination of the appointment and where such termination
is for any reason other than due to the Non-Executive Director’s
gross misconduct, material breach of the terms of the
appointment, act of fraud or dishonesty or wilful neglect of the
Non-Executive Director’s duties, the Non- Executive Director is
entitled to be paid a pro-rated amount of their fees in respect of
the period between the beginning of the quarter in which
termination took place and the termination date.
Otherwise, none of the Non-Executive Directors is entitled to any
damages for loss of office and no fee is payable in respect of any
unexpired portion of the term of the appointment.
The Company intends to comply with Provision 18 of the UK
Corporate Governance Code and accordingly all Directors will
stand for re-election by shareholders at future Annual General
Meetings until the Board determines otherwise.
Statement of consideration of employment
conditions elsewhere in the Company
We have not consulted with employees on the executive
Remuneration Policy. However, when determining the Policy for
Executive Directors we have been mindful of the pay and
employment conditions of employees across the Group as a whole.
Statement of consideration of shareholder
views
Senior executive management of the Company regularly meet with
shareholders and solicit their views on the Company’s policies in
relation to Director and Executive remuneration, and take such
views into account when formulating remuneration policies and
remuneration levels in specific cases.
Approval of the Directors’ remuneration
report
The Directors’ remuneration report was approved by the Board on
22 April 2025.
On behalf of the Board
Arfan Khan
Chief Executive Officer
22 April 2025
124 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Directors’ report
DIRECTORS’ REPORT
The Directors submit their report and the consolidated audited
financial statements of the Group and the audited parent financial
statements of the Company for the year ended 31 December 2024.
This report has been prepared in accordance with the Large and
Medium- sized Companies and Groups (Accounts and Reports)
Regulations 2008.
The following are incorporated by reference and shall be deemed
to form part of this Directors’ Report:
• The Strategic Report on pages 1-86;
• The Board and Governance report (which includes the Board, the
Corporate Governance Report and the Directors’ Remuneration
Report) on pages 88-124; and
• The energy and global greenhouse gas emissions disclosure on
pages 75-76.
In addition, the following information is also incorporated into this
Directors’ Report by reference:
Subject matter Page
Likely future developments within the Group 43-44
Related party transactions 105
Going concern statement 50
Financial position and performance of the Group 45-51
Greenhouse gas emissions 75-76
Directors’ share interests 112
Corporate governance statement 88-89
Diversity 62-66
Directors
Full biographical details of all current Directors of the Company
and the Board Committees of which they are members are set out
on pages 90-91of this Annual Report.
Dividends
No dividends were paid during the year ended 31 December 2024.
No dividend is proposed to be paid in 2025 in respect of the year
ended 31 December 2024.
Auditor
In accordance with section 418(2) of the Companies Act 2006,
each Director in office at the date of this Directors’ Report confirms
that (a) so far as the Director is aware, there is no relevant audit
information of which the Company’s auditor is unaware and (b) t
he Director has taken all the steps that he/she ought to have taken
as a Director to make him/herself aware of any relevant audit
information and to establish that the Company’s auditor is aware
of that information.
On 6 March 2023, the Company announced that it had appointed
MHA as auditors to the Group and Ernst & Young Kazakhstan as
auditors of Zhaikmunai LLP.
The appointment of MHA as auditors to the Group was approved
by shareholders at the Company’s 2023 AGM and at the
Company’s 2024 AGM.
The appointment of MHA as auditors to the Group will be put to
shareholders for approval at the 2025 AGM.
Directors’ liabilities and indemnities
The Company maintains liability insurance for its Directors. All
Directors are also in receipt of an indemnity from the Company
under the Company’s Articles of Association (the Articles) in
respect of (a) liability incurred by any Director due to negligence,
default, breach of duty or breach of trust in relation to the affairs of
the Company, or any subsidiary undertaking or (b) any liability
incurred by any Director in connection with the activities of the
Company, or any subsidiary undertaking, in its capacity as a trustee
of an occupational pension scheme; in both instances to the
extent permitted under the Companies Act 2006. Copies of the
Company’s Articles are available on the Company’s website or at
the Company’s registered office during normal business hours and
will be available for inspection at the Annual General Meeting.
In May 2015, the Board approved a policy for the indemnification of
Directors, officers and other designated beneficiaries and the entry
by the Company into an accompanying deed of indemnity.
The policy clarifies that the Company will seek to provide the
maximum indemnification and protection to Group Directors and
officers permissible under applicable law, except in cases of fraud
or wilful default, including but not limited to:
i. providing compensation for losses suffered in the course of
acting as a Director or officer in the interests of the Group,
ii. providing Directors and officers with quality external legal
representation and external professional advisers,
iii. assisting Directors or officers with repatriation following a
third-party claim,
iv. continuing to make payment of a Director’s or officer’s
remuneration and benefits while such Director or officer is
under suspension, investigation or detention by order of a third
party,
v. taking reasonable steps to place any such Director or officer in a
similar position working in another location or elsewhere in the
Group which would allow his/her employment to continue and
to compensate for any adverse financial consequences they
incur as a result of their loss of office, or (vi) maintaining
customary Directors’ and officers’ liability insurance policies.
The deed of indemnity is intended to cover any insufficiency in the
protection granted to Directors and officers under the Articles
which could expose such persons to substantial liability to third
parties, including governmental authorities, in particular in
jurisdictions where significant uncertainty exists in relation to the
interpretation and application of the law. The deed of indemnity
allows Directors, officers and other designated beneficiaries to
enforce the protection provided for under the Articles without any
further action by the Company being required.
The above provisions were in force during the financial year 2024.
Political donations
GRI 415-1
The Group made no political donations during the year 2024. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 125
DIRECTORS’ REPORT
The Directors submit their report and the consolidated audited
financial statements of the Group and the audited parent financial
statements of the Company for the year ended 31 December 2024.
This report has been prepared in accordance with the Large and
Medium- sized Companies and Groups (Accounts and Reports)
Regulations 2008.
The following are incorporated by reference and shall be deemed
to form part of this Directors’ Report:
• The Strategic Report on pages 1-86;
• The Board and Governance report (which includes the Board, the
Corporate Governance Report and the Directors’ Remuneration
Report) on pages 88-124; and
• The energy and global greenhouse gas emissions disclosure on
pages 75-76.
In addition, the following information is also incorporated into this
Directors’ Report by reference:
Subject matter Page
Likely future developments within the Group 43-44
Related party transactions 105
Going concern statement 50
Financial position and performance of the Group 45-51
Greenhouse gas emissions 75-76
Directors’ share interests 112
Corporate governance statement 88-89
Diversity 62-66
Directors
Full biographical details of all current Directors of the Company
and the Board Committees of which they are members are set out
on pages 90-91of this Annual Report.
Dividends
No dividends were paid during the year ended 31 December 2024.
No dividend is proposed to be paid in 2025 in respect of the year
ended 31 December 2024.
Auditor
In accordance with section 418(2) of the Companies Act 2006,
each Director in office at the date of this Directors’ Report confirms
that (a) so far as the Director is aware, there is no relevant audit
information of which the Company’s auditor is unaware and (b) t
he Director has taken all the steps that he/she ought to have taken
as a Director to make him/herself aware of any relevant audit
information and to establish that the Company’s auditor is aware
of that information.
On 6 March 2023, the Company announced that it had appointed
MHA as auditors to the Group and Ernst & Young Kazakhstan as
auditors of Zhaikmunai LLP.
The appointment of MHA as auditors to the Group was approved
by shareholders at the Company’s 2023 AGM and at the
Company’s 2024 AGM.
The appointment of MHA as auditors to the Group will be put to
shareholders for approval at the 2025 AGM.
Directors’ liabilities and indemnities
The Company maintains liability insurance for its Directors. All
Directors are also in receipt of an indemnity from the Company
under the Company’s Articles of Association (the Articles) in
respect of (a) liability incurred by any Director due to negligence,
default, breach of duty or breach of trust in relation to the affairs of
the Company, or any subsidiary undertaking or (b) any liability
incurred by any Director in connection with the activities of the
Company, or any subsidiary undertaking, in its capacity as a trustee
of an occupational pension scheme; in both instances to the
extent permitted under the Companies Act 2006. Copies of the
Company’s Articles are available on the Company’s website or at
the Company’s registered office during normal business hours and
will be available for inspection at the Annual General Meeting.
In May 2015, the Board approved a policy for the indemnification of
Directors, officers and other designated beneficiaries and the entry
by the Company into an accompanying deed of indemnity.
The policy clarifies that the Company will seek to provide the
maximum indemnification and protection to Group Directors and
officers permissible under applicable law, except in cases of fraud
or wilful default, including but not limited to:
i. providing compensation for losses suffered in the course of
acting as a Director or officer in the interests of the Group,
ii. providing Directors and officers with quality external legal
representation and external professional advisers,
iii. assisting Directors or officers with repatriation following a
third-party claim,
iv. continuing to make payment of a Director’s or officer’s
remuneration and benefits while such Director or officer is
under suspension, investigation or detention by order of a third
party,
v. taking reasonable steps to place any such Director or officer in a
similar position working in another location or elsewhere in the
Group which would allow his/her employment to continue and
to compensate for any adverse financial consequences they
incur as a result of their loss of office, or (vi) maintaining
customary Directors’ and officers’ liability insurance policies.
The deed of indemnity is intended to cover any insufficiency in the
protection granted to Directors and officers under the Articles
which could expose such persons to substantial liability to third
parties, including governmental authorities, in particular in
jurisdictions where significant uncertainty exists in relation to the
interpretation and application of the law. The deed of indemnity
allows Directors, officers and other designated beneficiaries to
enforce the protection provided for under the Articles without any
further action by the Company being required.
The above provisions were in force during the financial year 2024.
Political donations
GRI 415-1
The Group made no political donations during the year 2024. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 125
Contributions to non-UK political parties
No contributions to non-UK political parties were made during the
year 2024.
Research and development
The Group is not involved in any activities in the field of research
and development.
Branches
The Company is registered in England and Wales and during 2018
moved its place of effective management and tax residence from
the Netherlands to the United Kingdom. As the Group is a global
business, our interests and activities are held or operated through
subsidiaries and branches and subject to the laws and regulations
of many different jurisdictions.
Share capital
On 2 December 2024, 15,244,344,036 deferred shares with a
nominal value of £0.001 each) were acquired by the Company for
nil consideration and subsequently cancelled.
As at 31 December 2024, the Company’s issued share capital was
£1,693,815.61 divided into 169,381,561 Ordinary Shares 1 each
having a nominal value of £0.01. All of the Company’s issued
Ordinary Shares were fully paid up and rank equally in all respects.
The rights attached to the Ordinary Shares, in addition to those
conferred on their holders by law, are set out in the Articles. The
ordinary shareholders prior to the restructuring in 2023 were
diluted to 11.1% subject to further dilution to 10% if the warrants
held by noteholders are exercised.
Intertrust Employee Benefit Trustee Limited (the Trust) holds
shares in the Company in trust for the purposes of the Company’s
phantom share option plan, and the rights attaching to these
shares are exercised by independent trustees. As at 31 December
2024, the Trust held 294,887 Ordinary Shares in the Company.
Share rights
Without prejudice to any rights attached to any existing shares, the
Company may issue shares with rights or restrictions as determined
by either the shareholders by ordinary resolution or, subject to and
in default of such determination, the Board.
Voting rights
There are no restrictions on voting rights of shares in the Articles
and at a general meeting every shareholder present in person
or by proxy has one vote for every share held by him or her. No
shareholder shall be entitled to vote either personally or by proxy
or to exercise any other right in relation to general meetings if any
sum due from him or her to the Company in respect of that share
remains unpaid.
Transfer of shares and warrants
The Articles provide that transfers of certificated shares must be
effected in writing duly signed by or on behalf of the transferor
and, except in the case of fully paid shares, by or on behalf of the
transferee. The transferor shall remain the holder of the shares
concerned until the name of the transferee is entered on the
Register of Members in respect of those shares. Transfers of
uncertificated shares may be effected by means of the relevant
electronic system unless the Uncertificated Securities Regulations
2001 provide otherwise.
The Directors may refuse to register a transfer of shares in favour of
more than four persons jointly.
The warrants issued on 9 February 2023 are not transferable. There
are no other agreements between holders of securities that are
known to the Company and may restrict transfer of securities or
voting rights.
Directors, Articles and purchase of shares
The Articles were adopted on 29 April 2022 and may only be
amended by special resolution at a general meeting of the
shareholders (and where required, with the consent of the Warrant
Trustee).
The Directors’ powers are conferred on them by UK legislation and
by the Articles. In accordance with the Articles, the Board has the
power at any time to elect any person to be a Director. Any person
so appointed by the Directors will retire at the next Annual General
Meeting in accordance with the Articles; retiring Directors may be
eligible for annual re-election.
On 2 December 2024, 15,244,344,036 deferred shares with a
nominal value of £0.001 each were acquired by the Company
for nil consideration and subsequently cancelled. The Company
did not acquire any of its own Ordinary Shares during 2024 either
itself or through a person acting in his own name but on the
Company’s behalf.
None of the circumstances referred to in paragraphs 8 and 9 of
Schedule 7 of the Large and Medium-sized Companies and
Groups (Accounts and Reports) Regulations 2008 applies.
Paragraph 10 Schedule 7 of the Large and
Medium-sized Companies and Groups (Accounts
and Reports) Regulations 2008 The Company’s
policy is to:
• Give full and fair consideration to applications for employment
made by disabled persons.
• Continue the employment of, and arrange training for,
employees who have become disabled when they were
employed by the Company.
• Eliminate bias in relation to the training, career development and
promotion of disabled persons employed by the Company.
1. 4,136,578 Ordinary Shares were cancelled on 4 April 2025 leaving a balance
of 165,244,983 Ordinary Shares.
Directors’ report continued
DIRECTORS’ REPORT
126 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
No contributions to non-UK political parties were made during the
year 2024.
Research and development
The Group is not involved in any activities in the field of research
and development.
Branches
The Company is registered in England and Wales and during 2018
moved its place of effective management and tax residence from
the Netherlands to the United Kingdom. As the Group is a global
business, our interests and activities are held or operated through
subsidiaries and branches and subject to the laws and regulations
of many different jurisdictions.
Share capital
On 2 December 2024, 15,244,344,036 deferred shares with a
nominal value of £0.001 each) were acquired by the Company for
nil consideration and subsequently cancelled.
As at 31 December 2024, the Company’s issued share capital was
£1,693,815.61 divided into 169,381,561 Ordinary Shares 1 each
having a nominal value of £0.01. All of the Company’s issued
Ordinary Shares were fully paid up and rank equally in all respects.
The rights attached to the Ordinary Shares, in addition to those
conferred on their holders by law, are set out in the Articles. The
ordinary shareholders prior to the restructuring in 2023 were
diluted to 11.1% subject to further dilution to 10% if the warrants
held by noteholders are exercised.
Intertrust Employee Benefit Trustee Limited (the Trust) holds
shares in the Company in trust for the purposes of the Company’s
phantom share option plan, and the rights attaching to these
shares are exercised by independent trustees. As at 31 December
2024, the Trust held 294,887 Ordinary Shares in the Company.
Share rights
Without prejudice to any rights attached to any existing shares, the
Company may issue shares with rights or restrictions as determined
by either the shareholders by ordinary resolution or, subject to and
in default of such determination, the Board.
Voting rights
There are no restrictions on voting rights of shares in the Articles
and at a general meeting every shareholder present in person
or by proxy has one vote for every share held by him or her. No
shareholder shall be entitled to vote either personally or by proxy
or to exercise any other right in relation to general meetings if any
sum due from him or her to the Company in respect of that share
remains unpaid.
Transfer of shares and warrants
The Articles provide that transfers of certificated shares must be
effected in writing duly signed by or on behalf of the transferor
and, except in the case of fully paid shares, by or on behalf of the
transferee. The transferor shall remain the holder of the shares
concerned until the name of the transferee is entered on the
Register of Members in respect of those shares. Transfers of
uncertificated shares may be effected by means of the relevant
electronic system unless the Uncertificated Securities Regulations
2001 provide otherwise.
The Directors may refuse to register a transfer of shares in favour of
more than four persons jointly.
The warrants issued on 9 February 2023 are not transferable. There
are no other agreements between holders of securities that are
known to the Company and may restrict transfer of securities or
voting rights.
Directors, Articles and purchase of shares
The Articles were adopted on 29 April 2022 and may only be
amended by special resolution at a general meeting of the
shareholders (and where required, with the consent of the Warrant
Trustee).
The Directors’ powers are conferred on them by UK legislation and
by the Articles. In accordance with the Articles, the Board has the
power at any time to elect any person to be a Director. Any person
so appointed by the Directors will retire at the next Annual General
Meeting in accordance with the Articles; retiring Directors may be
eligible for annual re-election.
On 2 December 2024, 15,244,344,036 deferred shares with a
nominal value of £0.001 each were acquired by the Company
for nil consideration and subsequently cancelled. The Company
did not acquire any of its own Ordinary Shares during 2024 either
itself or through a person acting in his own name but on the
Company’s behalf.
None of the circumstances referred to in paragraphs 8 and 9 of
Schedule 7 of the Large and Medium-sized Companies and
Groups (Accounts and Reports) Regulations 2008 applies.
Paragraph 10 Schedule 7 of the Large and
Medium-sized Companies and Groups (Accounts
and Reports) Regulations 2008 The Company’s
policy is to:
• Give full and fair consideration to applications for employment
made by disabled persons.
• Continue the employment of, and arrange training for,
employees who have become disabled when they were
employed by the Company.
• Eliminate bias in relation to the training, career development and
promotion of disabled persons employed by the Company.
1. 4,136,578 Ordinary Shares were cancelled on 4 April 2025 leaving a balance
of 165,244,983 Ordinary Shares.
Directors’ report continued
DIRECTORS’ REPORT
126 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Paragraph 11 and 11A Schedule 7 of the Large and Medium-sized Companies and Groups (Accounts
and Reports) Regulations 2008 Action taken to introduce, maintain or develop arrangements aimed at
the following is described on pages 64-66:
• Providing employees with information on matters of concern to them as employees.
• Consulting employees or their representatives on a regular basis so that the employees’ views can be taken into account in making
decisions which are likely to affect their interests.
• Encouraging employee involvement in the Company’s performance by an employees’ share scheme or other means.
• Achieving common employee awareness of the financial and economic factors affecting the Company’s performance.
Paragraph 11B and 11C Schedule 7
A summary of the following is described on pages 20-21.
• How Directors have had regard to the need to foster the Company’s business relationships with suppliers, customers
and others.
• The effect of that regard on the principal decisions taken by the Company during the financial year.
Shareholders holding 3% or more of the Company’s issued share capital
As of 31 December 2024, the following significant shareholdings of voting rights in the share capital of the Company had been disclosed
to the Company under Disclosure Guidance and Transparency Rule (DTR) 5.
Name
Number of
Ordinary
Shares
% of issued
Ordinary
Shares
Nature of
Holding
ICU Trading Ltd. and Westal Holdings Ltd. 42,144,784 24.88 Direct
RD Energy Caspian Holdings Limited 31,975,192 18.88 Direct
Amundi (UK) Limited and Amundi Asset Management 16,489,360 9.74 Direct
Armstrong Investments Limited 10,210,000 6.03 Indirect
Details of all information provided to the Company pursuant to Financial Conduct Authority’s (FCA) DTRs is publicly available to view via
the regulatory information service on the Company’s website.
Since 31 December 2024, disclosures have been made to the Company under DTRs such that as at 10 April 2025, the following significant
shareholdings of voting rights in the share capital of the Company had been disclosed to the Company under Disclosure Guidance and
Transparency Rule (DTR) 5.
Name
Number of
Ordinary
Shares
% of issued
Ordinary
Shares
Nature of
Holding
ICU Trading Ltd. and Westal Holdings Ltd. 42,144,784 24.88 Direct
RD Energy Caspian Holdings Limited 31,975,192 18.88 Direct
Amundi (UK) Limited and Amundi Asset Management 16,489,360 9.74 Direct
Armstrong Investments Limited 11,389,000 6.89 Indirect
Financial risk management
The Company’s financial risk management objectives and policies, including its use of financial instruments, can be found in Note 32 on
pages 162-164 to the financial statements. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 127
and Reports) Regulations 2008 Action taken to introduce, maintain or develop arrangements aimed at
the following is described on pages 64-66:
• Providing employees with information on matters of concern to them as employees.
• Consulting employees or their representatives on a regular basis so that the employees’ views can be taken into account in making
decisions which are likely to affect their interests.
• Encouraging employee involvement in the Company’s performance by an employees’ share scheme or other means.
• Achieving common employee awareness of the financial and economic factors affecting the Company’s performance.
Paragraph 11B and 11C Schedule 7
A summary of the following is described on pages 20-21.
• How Directors have had regard to the need to foster the Company’s business relationships with suppliers, customers
and others.
• The effect of that regard on the principal decisions taken by the Company during the financial year.
Shareholders holding 3% or more of the Company’s issued share capital
As of 31 December 2024, the following significant shareholdings of voting rights in the share capital of the Company had been disclosed
to the Company under Disclosure Guidance and Transparency Rule (DTR) 5.
Name
Number of
Ordinary
Shares
% of issued
Ordinary
Shares
Nature of
Holding
ICU Trading Ltd. and Westal Holdings Ltd. 42,144,784 24.88 Direct
RD Energy Caspian Holdings Limited 31,975,192 18.88 Direct
Amundi (UK) Limited and Amundi Asset Management 16,489,360 9.74 Direct
Armstrong Investments Limited 10,210,000 6.03 Indirect
Details of all information provided to the Company pursuant to Financial Conduct Authority’s (FCA) DTRs is publicly available to view via
the regulatory information service on the Company’s website.
Since 31 December 2024, disclosures have been made to the Company under DTRs such that as at 10 April 2025, the following significant
shareholdings of voting rights in the share capital of the Company had been disclosed to the Company under Disclosure Guidance and
Transparency Rule (DTR) 5.
Name
Number of
Ordinary
Shares
% of issued
Ordinary
Shares
Nature of
Holding
ICU Trading Ltd. and Westal Holdings Ltd. 42,144,784 24.88 Direct
RD Energy Caspian Holdings Limited 31,975,192 18.88 Direct
Amundi (UK) Limited and Amundi Asset Management 16,489,360 9.74 Direct
Armstrong Investments Limited 11,389,000 6.89 Indirect
Financial risk management
The Company’s financial risk management objectives and policies, including its use of financial instruments, can be found in Note 32 on
pages 162-164 to the financial statements. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 127
DIRECTORS’ REPORT
Directors’ report continued
Change of control
The following are significant agreements the Company has entered
into which would be affected on a change of control of the
Company following a takeover:
• In the event of a takeover of the Company, all options under the
Company’s phantom share option plan shall be deemed to have
vested and the Board shall direct Intertrust Employee Benefit
Trustee Limited to allow each option-holder to exercise his or her
options at any time from the date of the change of control up to
the 10th anniversary of the date of grant (the Period). Any options
that have not been exercised will lapse at the end of the Period;
and
• In the event of a takeover of the Company, all options under the
Company’s employee long-term incentive plan shall be deemed
to have vested and the Board shall direct Intertrust Employee
Benefit Trustee Limited to allow each option-holder to exercise
his or her options during the one-month period following the
change of control event. Any options that have not been
exercised will lapse at the end of this period.
As at 31 December 2024, the 2012 Bonds, 2014 Bonds, SUNs and
SSNs contained change of control provisions. If a change of control
occurs, the Company was required to offer to repurchase the 2012
Bonds, 2014 Bonds, SSNs and SUNs at 101% of their principal
amount, plus accrued and unpaid interest to the date of the
purchase.
There are no agreements between the Company and its Directors
or employees providing for compensation for loss of office or
employment or otherwise that occurs specifically because of a
takeover.
Corporate governance statement
Pursuant to Disclosure Guidance and Transparency Rule 7, certain
parts of the Corporate Governance statement are required to be
outlined in the Directors’ Report. This information is laid out in the
corporate governance section of this Annual Report. Information
regarding the main features of the Company’s internal control and
risk management arrangements in relation to the financial
reporting process can be found in the Strategic Report and the
report of the Audit Committee.
Important events since the end of the
financial year
Major events after 31 December 2024 are disclosed in Note 32 to
the consolidated audited financial statements. This report was
approved by the Board on 22 April 2025.
On behalf of the Board
Arfan Khan
Chief Executive Officer
22 April 2025
Nostrum Oil & Gas PLC, registered number 8717287
128 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Directors’ report continued
Change of control
The following are significant agreements the Company has entered
into which would be affected on a change of control of the
Company following a takeover:
• In the event of a takeover of the Company, all options under the
Company’s phantom share option plan shall be deemed to have
vested and the Board shall direct Intertrust Employee Benefit
Trustee Limited to allow each option-holder to exercise his or her
options at any time from the date of the change of control up to
the 10th anniversary of the date of grant (the Period). Any options
that have not been exercised will lapse at the end of the Period;
and
• In the event of a takeover of the Company, all options under the
Company’s employee long-term incentive plan shall be deemed
to have vested and the Board shall direct Intertrust Employee
Benefit Trustee Limited to allow each option-holder to exercise
his or her options during the one-month period following the
change of control event. Any options that have not been
exercised will lapse at the end of this period.
As at 31 December 2024, the 2012 Bonds, 2014 Bonds, SUNs and
SSNs contained change of control provisions. If a change of control
occurs, the Company was required to offer to repurchase the 2012
Bonds, 2014 Bonds, SSNs and SUNs at 101% of their principal
amount, plus accrued and unpaid interest to the date of the
purchase.
There are no agreements between the Company and its Directors
or employees providing for compensation for loss of office or
employment or otherwise that occurs specifically because of a
takeover.
Corporate governance statement
Pursuant to Disclosure Guidance and Transparency Rule 7, certain
parts of the Corporate Governance statement are required to be
outlined in the Directors’ Report. This information is laid out in the
corporate governance section of this Annual Report. Information
regarding the main features of the Company’s internal control and
risk management arrangements in relation to the financial
reporting process can be found in the Strategic Report and the
report of the Audit Committee.
Important events since the end of the
financial year
Major events after 31 December 2024 are disclosed in Note 32 to
the consolidated audited financial statements. This report was
approved by the Board on 22 April 2025.
On behalf of the Board
Arfan Khan
Chief Executive Officer
22 April 2025
Nostrum Oil & Gas PLC, registered number 8717287
128 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Responsibility statement
The Directors are responsible for preparing the Annual Report and
the financial statements in accordance with applicable law and
regulations.
Company law requires the Directors to prepare such financial
statements for each financial year that give a true and fair view of
the state of affairs of the Group and the Company as at the end of
the financial year, and of the profit or loss of the Group for the
financial year. Under that law the Directors have elected to prepare
the Group and Company financial statements in accordance with
UK adopted International Accounting Standards. Under company
law, the Directors must not approve the financial statements unless
they are satisfied that they give a true and fair view of the state of
affairs of the Group and the Parent Company and of their profit or
loss for that period.
In preparing these financial statements, the Directors are
required to:
• Select suitable accounting policies in accordance with IAS 8
Accounting Policies, Changes and Accounting Estimates and
Errors and then apply them consistently;
• Make judgements and accounting estimates that are reasonable
and prudent;
• Present information, including accounting policies, in a manner
that provides relevant, reliable, comparable and understandable
information;
• State that the Group and the Company have complied with the
UK adopted International Accounting Standards, subject to any
material departures disclosed and explained in the financial
statements;
• Provide additional disclosures when compliance with specific
requirements of IFRS is insufficient to enable users to understand
the impact of particular transactions, other events and conditions
on the Group’s and Company’s financial position and
performance; and
• Prepare the Group’s and Company’s financial statements on a
going concern basis, unless it is inappropriate to do so.
Having taken all the matters considered by the Board and brought
to the attention of the Board during the year into account, and
having reviewed the Annual Report (including the Strategic
Report), the Directors consider the Annual Report and Accounts,
taken as a whole, to be fair, balanced and understandable,
providing the information necessary for shareholders to assess the
Company’s position and performance, business model and
strategy.
The Directors have responsibility for:
• Ensuring that the Company and the Group keep accounting
records which disclose with reasonable accuracy the financial
position of the Company and the Group and which enable them
to ensure that its financial statements and Directors’
Remuneration Report comply with the Companies Act 2006;
• Taking such steps as are reasonably open to them to safeguard
the assets of the Group and to prevent and detect fraud and
other irregularities; and
• The maintenance and integrity of the corporate and financial
information on the Company’s website.
Each of the Directors whose names and functions are listed on
pages 90-91 confirms, that to the best of their knowledge:
• The Company and Group financial statements, which have been
prepared in accordance with the UK adopted International
Accounting Standards, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Company and
the undertakings included in the consolidation taken as a whole;
• The Strategic Report contained in the Annual Report includes a
fair review of the development and performance of the business
and the position of the Company and the undertakings included
in the consolidation taken as a whole, together with a description
of the principal risks and uncertainties that they face; and
• The Annual Report and financial statements, taken as a whole,
are fair, balanced and understandable and provide the
information necessary for shareholders to assess the Company’s
position and performance, business model and strategy.
By order of the Board
Arfan Khan
Chief Executive Officer
22 April 2025 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 129
The Directors are responsible for preparing the Annual Report and
the financial statements in accordance with applicable law and
regulations.
Company law requires the Directors to prepare such financial
statements for each financial year that give a true and fair view of
the state of affairs of the Group and the Company as at the end of
the financial year, and of the profit or loss of the Group for the
financial year. Under that law the Directors have elected to prepare
the Group and Company financial statements in accordance with
UK adopted International Accounting Standards. Under company
law, the Directors must not approve the financial statements unless
they are satisfied that they give a true and fair view of the state of
affairs of the Group and the Parent Company and of their profit or
loss for that period.
In preparing these financial statements, the Directors are
required to:
• Select suitable accounting policies in accordance with IAS 8
Accounting Policies, Changes and Accounting Estimates and
Errors and then apply them consistently;
• Make judgements and accounting estimates that are reasonable
and prudent;
• Present information, including accounting policies, in a manner
that provides relevant, reliable, comparable and understandable
information;
• State that the Group and the Company have complied with the
UK adopted International Accounting Standards, subject to any
material departures disclosed and explained in the financial
statements;
• Provide additional disclosures when compliance with specific
requirements of IFRS is insufficient to enable users to understand
the impact of particular transactions, other events and conditions
on the Group’s and Company’s financial position and
performance; and
• Prepare the Group’s and Company’s financial statements on a
going concern basis, unless it is inappropriate to do so.
Having taken all the matters considered by the Board and brought
to the attention of the Board during the year into account, and
having reviewed the Annual Report (including the Strategic
Report), the Directors consider the Annual Report and Accounts,
taken as a whole, to be fair, balanced and understandable,
providing the information necessary for shareholders to assess the
Company’s position and performance, business model and
strategy.
The Directors have responsibility for:
• Ensuring that the Company and the Group keep accounting
records which disclose with reasonable accuracy the financial
position of the Company and the Group and which enable them
to ensure that its financial statements and Directors’
Remuneration Report comply with the Companies Act 2006;
• Taking such steps as are reasonably open to them to safeguard
the assets of the Group and to prevent and detect fraud and
other irregularities; and
• The maintenance and integrity of the corporate and financial
information on the Company’s website.
Each of the Directors whose names and functions are listed on
pages 90-91 confirms, that to the best of their knowledge:
• The Company and Group financial statements, which have been
prepared in accordance with the UK adopted International
Accounting Standards, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Company and
the undertakings included in the consolidation taken as a whole;
• The Strategic Report contained in the Annual Report includes a
fair review of the development and performance of the business
and the position of the Company and the undertakings included
in the consolidation taken as a whole, together with a description
of the principal risks and uncertainties that they face; and
• The Annual Report and financial statements, taken as a whole,
are fair, balanced and understandable and provide the
information necessary for shareholders to assess the Company’s
position and performance, business model and strategy.
By order of the Board
Arfan Khan
Chief Executive Officer
22 April 2025 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 129
For the purpose of this report, the terms “we” and “our” denote
MHA in relation to UK legal, professional and regulatory
responsibilities and reporting obligations to the members of
Nostrum Oil & Gas plc. For the purposes of the table on pages 4 to
7 that sets out the key audit matters and how our audit addressed
the key audit matters, the terms “we” and “our” refer to MHA. The
Group financial statements, as defined below, consolidate the
accounts of Nostrum Oil & Gas plc and its subsidiaries (the
“Group”). The “Parent Company” is defined as Nostrum Oil & Gas
plc, as an individual entity. The relevant legislation governing the
Parent Company is the United Kingdom Companies Act 2006
(“Companies Act 2006”).
Opinion
We have audited the financial statements of Nostrum Oil & Gas plc
for the year ended 31 December 2024.
The financial statements that we have audited comprise:
• the Consolidated Statement of Financial Position
• the Consolidated Statement of Comprehensive Income
• the Consolidated Statement of Cash Flows
• the Consolidated Statement of Changes in Equity
• Notes 1 to 33 of the consolidated financial statements, including
significant accounting policies.
• the Parent Company Statement of Financial Position
• the Parent Company Statement of Cash Flows
• the Parent Company Statement of Changes in Equity and
• Notes 1 to 16 of the company financial statements, including
significant accounting policies.
The financial reporting framework that has been applied in the
preparation of the financial statements is applicable law and United
Kingdom International Accounting Standards (“UK adopted IFRS”).
In our opinion the financial statements:
• give a true and fair view of the state of the Group’s and of the
Parent Company’s affairs as at 31 December 2024 and of the
Group’s loss for the year then ended;
• have been properly prepared in accordance with UK adopted
IFRS; and
• have been prepared in accordance with the requirements of the
Companies Act 2006.
Our opinion is consistent with our reporting to the Group’s Audit
Committee.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor’s Responsibilities for the Audit of the Financial Statements
section of our report. We are independent of the Group in
accordance with the ethical requirements that are relevant to our
audit of the financial statements in the UK, including the FRC’s
Ethical Standard as applied to listed public interest entities, and we
have fulfilled our ethical responsibilities in accordance with those
requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for
our opinion.
Material uncertainty relating to
going concern
We draw your attention to the Group’s Viability Statement on page
43, Note 2 to the Group financial statements on page 144 and Note
2 to the Parent Company financial statements on page 170 which
describe the Directors’ assessment of the Group’s ability to
continue as a going concern. The Group’s Senior Secured Notes
(SSNs) and Senior Unsecured Notes (SUNs) (together, “the Notes”)
are due to mature on 30 June 2026. In forming their going concern
assessment, the Directors have identified a material uncertainty
about the ability of the Group to successfully restructure the Notes.
These circumstances indicate the existence of a material
uncertainty that may cast significant doubt upon the Group and
Company’s ability to continue as a going concern. Our opinion is
not modified in respect of this matter.
In auditing the financial statements, we have concluded that the
directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
Our evaluation of the directors’ assessment of the Group’s and the
Parent Company’s ability to continue to adopt the going concern
basis of accounting included:
• Consideration of inherent risks to the Group’s and the Parent
Company’s operations and specifically their business model;
• Confirming our understanding of the directors’ going concern
assessment process, including obtaining an understanding of
relevant controls over management’s model;
• Obtaining the directors’ going concern assessment, including
the cash flow forecast for the going concern period. The
directors have modelled a number of adverse scenarios in order
to incorporate unexpected changes to the forecast liquidity of
the Group. We evaluated the sufficiency of the sensitivities
performed, in particular whether the adverse scenarios met the
severe but plausible test;
Independent
auditor’s report
FINANCIAL REPORT
130 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
MHA in relation to UK legal, professional and regulatory
responsibilities and reporting obligations to the members of
Nostrum Oil & Gas plc. For the purposes of the table on pages 4 to
7 that sets out the key audit matters and how our audit addressed
the key audit matters, the terms “we” and “our” refer to MHA. The
Group financial statements, as defined below, consolidate the
accounts of Nostrum Oil & Gas plc and its subsidiaries (the
“Group”). The “Parent Company” is defined as Nostrum Oil & Gas
plc, as an individual entity. The relevant legislation governing the
Parent Company is the United Kingdom Companies Act 2006
(“Companies Act 2006”).
Opinion
We have audited the financial statements of Nostrum Oil & Gas plc
for the year ended 31 December 2024.
The financial statements that we have audited comprise:
• the Consolidated Statement of Financial Position
• the Consolidated Statement of Comprehensive Income
• the Consolidated Statement of Cash Flows
• the Consolidated Statement of Changes in Equity
• Notes 1 to 33 of the consolidated financial statements, including
significant accounting policies.
• the Parent Company Statement of Financial Position
• the Parent Company Statement of Cash Flows
• the Parent Company Statement of Changes in Equity and
• Notes 1 to 16 of the company financial statements, including
significant accounting policies.
The financial reporting framework that has been applied in the
preparation of the financial statements is applicable law and United
Kingdom International Accounting Standards (“UK adopted IFRS”).
In our opinion the financial statements:
• give a true and fair view of the state of the Group’s and of the
Parent Company’s affairs as at 31 December 2024 and of the
Group’s loss for the year then ended;
• have been properly prepared in accordance with UK adopted
IFRS; and
• have been prepared in accordance with the requirements of the
Companies Act 2006.
Our opinion is consistent with our reporting to the Group’s Audit
Committee.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor’s Responsibilities for the Audit of the Financial Statements
section of our report. We are independent of the Group in
accordance with the ethical requirements that are relevant to our
audit of the financial statements in the UK, including the FRC’s
Ethical Standard as applied to listed public interest entities, and we
have fulfilled our ethical responsibilities in accordance with those
requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for
our opinion.
Material uncertainty relating to
going concern
We draw your attention to the Group’s Viability Statement on page
43, Note 2 to the Group financial statements on page 144 and Note
2 to the Parent Company financial statements on page 170 which
describe the Directors’ assessment of the Group’s ability to
continue as a going concern. The Group’s Senior Secured Notes
(SSNs) and Senior Unsecured Notes (SUNs) (together, “the Notes”)
are due to mature on 30 June 2026. In forming their going concern
assessment, the Directors have identified a material uncertainty
about the ability of the Group to successfully restructure the Notes.
These circumstances indicate the existence of a material
uncertainty that may cast significant doubt upon the Group and
Company’s ability to continue as a going concern. Our opinion is
not modified in respect of this matter.
In auditing the financial statements, we have concluded that the
directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
Our evaluation of the directors’ assessment of the Group’s and the
Parent Company’s ability to continue to adopt the going concern
basis of accounting included:
• Consideration of inherent risks to the Group’s and the Parent
Company’s operations and specifically their business model;
• Confirming our understanding of the directors’ going concern
assessment process, including obtaining an understanding of
relevant controls over management’s model;
• Obtaining the directors’ going concern assessment, including
the cash flow forecast for the going concern period. The
directors have modelled a number of adverse scenarios in order
to incorporate unexpected changes to the forecast liquidity of
the Group. We evaluated the sufficiency of the sensitivities
performed, in particular whether the adverse scenarios met the
severe but plausible test;
Independent
auditor’s report
FINANCIAL REPORT
130 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
•
Auditing the key inputs and assumptions adopted in the
assessment of going concern and the cash flow model, including
considering whether management had exercised any bias in
selecting their assumptions, by comparing against past
performance and available market data;
• Consideration of management’s ability to forecast by reviewing
historical accuracy of forecasts prepared by management;
• Testing the mathematical accuracy and appropriateness of the
method used to prepare the cash flow forecast. We tested the
methodology and calculations;
• Checking the consistency of the factors and assumptions
adopted in the going concern assessment with other areas of our
audit, including the oil and gas asset impairment test;
• Considering the results of the reverse stress test in order to
identify what factors would lead to the Group utilising all liquidity
during the going concern period. We assessed the likelihood of
these factors in the context of the outlook for commodity prices
and against historic market lows as well as our own industry
experience;
• Held discussions with management in relation to the anticipated
debt restructuring expected in June 2026 and evaluating the
impact on the going concern assessment, and;
• Considering whether management’s disclosures in the Annual
Report and Accounts were appropriate, including those in
relation to the material uncertainty in respect of the going
concern conclusion, through consideration of the relevant
disclosure standards and our understanding of the bond
restructuring process as anticipated by management.
In relation to the Group’s reporting on how it has applied the UK
Corporate Governance Code, we have nothing material to add or
draw attention to in relation to the directors’ statement in the
financial statements about whether the directors considered it
appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with
respect to going concern are described in the relevant sections of
this report.
Overview of our audit approach
Scope Our audit was scoped by obtaining an understanding of the Group, including the Parent Company, and its
environment, including the Group’s system of internal control, and assessing the risks of material misstatement in
the financial statements. We also addressed the risk of management override of internal controls, including
assessing whether there was evidence of bias by the directors that may have represented a risk of material
misstatement.
We, and our component auditors acting on specific group instructions, undertook full scope audits on the
complete financial information of 2 components; Zhaikmunai LLP and Nostrum Oil & Gas plc (Parent Company),
specified audit procedures on particular aspects and balances on another 5 components in Kazakhstan, the
Netherlands and Belgium.
Materiality
See full materiality
section below.
2024 2023
Group US$925k US$949k 1.45% of EBITDA (2023: 2.25% of EBITDA)
Parent Company US$1,942k US$1,920k 0.8% of net assets (2023: 1% of net assets). Component materiality for group
purposes
set at US $307k (2023: US$500k)
Key audit matters
Recurring • Estimation of oil and gas reserves and its impact on impairment testing, depreciation, depletion and
amortisation (DD&A) and the abandonment and site restoration provision;
• Impairment of oil & gas development and production fixed assets; STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 131
assessment of going concern and the cash flow model, including
considering whether management had exercised any bias in
selecting their assumptions, by comparing against past
performance and available market data;
• Consideration of management’s ability to forecast by reviewing
historical accuracy of forecasts prepared by management;
• Testing the mathematical accuracy and appropriateness of the
method used to prepare the cash flow forecast. We tested the
methodology and calculations;
• Checking the consistency of the factors and assumptions
adopted in the going concern assessment with other areas of our
audit, including the oil and gas asset impairment test;
• Considering the results of the reverse stress test in order to
identify what factors would lead to the Group utilising all liquidity
during the going concern period. We assessed the likelihood of
these factors in the context of the outlook for commodity prices
and against historic market lows as well as our own industry
experience;
• Held discussions with management in relation to the anticipated
debt restructuring expected in June 2026 and evaluating the
impact on the going concern assessment, and;
• Considering whether management’s disclosures in the Annual
Report and Accounts were appropriate, including those in
relation to the material uncertainty in respect of the going
concern conclusion, through consideration of the relevant
disclosure standards and our understanding of the bond
restructuring process as anticipated by management.
In relation to the Group’s reporting on how it has applied the UK
Corporate Governance Code, we have nothing material to add or
draw attention to in relation to the directors’ statement in the
financial statements about whether the directors considered it
appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with
respect to going concern are described in the relevant sections of
this report.
Overview of our audit approach
Scope Our audit was scoped by obtaining an understanding of the Group, including the Parent Company, and its
environment, including the Group’s system of internal control, and assessing the risks of material misstatement in
the financial statements. We also addressed the risk of management override of internal controls, including
assessing whether there was evidence of bias by the directors that may have represented a risk of material
misstatement.
We, and our component auditors acting on specific group instructions, undertook full scope audits on the
complete financial information of 2 components; Zhaikmunai LLP and Nostrum Oil & Gas plc (Parent Company),
specified audit procedures on particular aspects and balances on another 5 components in Kazakhstan, the
Netherlands and Belgium.
Materiality
See full materiality
section below.
2024 2023
Group US$925k US$949k 1.45% of EBITDA (2023: 2.25% of EBITDA)
Parent Company US$1,942k US$1,920k 0.8% of net assets (2023: 1% of net assets). Component materiality for group
purposes
set at US $307k (2023: US$500k)
Key audit matters
Recurring • Estimation of oil and gas reserves and its impact on impairment testing, depreciation, depletion and
amortisation (DD&A) and the abandonment and site restoration provision;
• Impairment of oil & gas development and production fixed assets; STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 131
Independent auditor’s report
continued
FINANCIAL REPORT
Key Audit Matters
Key Audit Matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements
of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we
identified. These matters included those matters which had the greatest effect on: the overall audit strategy; the allocation of resources in
the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Estimation of oil and gas reserves and its impact on impairment testing, depreciation, depletion and
amortisation (DD&A) and the abandonment and site restoration provision
Key audit matter
description
The estimation of oil and gas reserves is critical to several areas of the financial statements, particularly the
computation of depreciation, depletion and amortisation (“DD&A”), the impairment assessment of oil and gas
properties, and the calculation of the abandonment and site restoration provision. As of 31 December 2024, the
Group recognised oil and gas properties with a carrying amount of US$363.0 million (2023: US$245.3 million) as
disclosed in Note 5, a depreciation and depletion charge of US$25.0 million as disclosed in Note 5, and an
abandonment provision of US$27.3 million (2023: US$22.1 million), as disclosed in Note 15.
The estimation process involves significant judgement and is based on technical assessments using both internal and
external data. The assumptions used, such as production profiles, hydrocarbon prices, and development plans, are
inherently uncertain and susceptible to management bias, particularly given the forward-looking nature of such
inputs.
Changes in these assumptions can significantly impact reported asset values, DD&A charges, and provision estimates.
As such, we considered this to be an area of significant auditor attention.
How the scope
of our audit
responded to the
key audit matter
We have performed, in conjunction with the component auditor, the following procedures in respect of the oil and gas
reserve estimation:
• Performed walkthrough procedures (including the control design and implementation testing) and updated our
understanding of the Group’s internal processes and key controls relevant to the estimation of oil and gas reserves.
• Assessed the competence, capabilities, and objectivity of management’s internal specialists responsible for reserve
estimation, to determine whether they were appropriately qualified.
• Tested the completeness and accuracy of source data used in the reserves estimation process.
• Corroborated management’s commercial assumptions by comparing them to publicly available industry
benchmarks and third party data, where available.
• Compared management’s internal assumptions with the latest approved operational plans and budgets to assess
consistency.
• Challenged the feasibility of these assumptions by reference to historical operational performance and realised
results.
• With the assistance of valuation experts, assessed whether the updated reserve estimates were appropriately
reflected in the Group’s impairment testing, DD&A calculations, and the abandonment and site restoration
provision.
• Reviewed the adequacy and clarity of the reserves and resource disclosures in the Annual Report for consistency
with audit evidence obtained.
• Obtained and independently recalculated the abandonment and site restoration provision, assessing the
reasonableness of key assumptions and inputs used by management.
• Critically assessed key inputs, and challenged management’s assumptions and judgements for reasonableness and
potential indicators of management bias.
Key observations
communicated
to the Group’s
Audit Committee
No material issues have been identified from the audit procedures performed.
132 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
FINANCIAL REPORT
Key Audit Matters
Key Audit Matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements
of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we
identified. These matters included those matters which had the greatest effect on: the overall audit strategy; the allocation of resources in
the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Estimation of oil and gas reserves and its impact on impairment testing, depreciation, depletion and
amortisation (DD&A) and the abandonment and site restoration provision
Key audit matter
description
The estimation of oil and gas reserves is critical to several areas of the financial statements, particularly the
computation of depreciation, depletion and amortisation (“DD&A”), the impairment assessment of oil and gas
properties, and the calculation of the abandonment and site restoration provision. As of 31 December 2024, the
Group recognised oil and gas properties with a carrying amount of US$363.0 million (2023: US$245.3 million) as
disclosed in Note 5, a depreciation and depletion charge of US$25.0 million as disclosed in Note 5, and an
abandonment provision of US$27.3 million (2023: US$22.1 million), as disclosed in Note 15.
The estimation process involves significant judgement and is based on technical assessments using both internal and
external data. The assumptions used, such as production profiles, hydrocarbon prices, and development plans, are
inherently uncertain and susceptible to management bias, particularly given the forward-looking nature of such
inputs.
Changes in these assumptions can significantly impact reported asset values, DD&A charges, and provision estimates.
As such, we considered this to be an area of significant auditor attention.
How the scope
of our audit
responded to the
key audit matter
We have performed, in conjunction with the component auditor, the following procedures in respect of the oil and gas
reserve estimation:
• Performed walkthrough procedures (including the control design and implementation testing) and updated our
understanding of the Group’s internal processes and key controls relevant to the estimation of oil and gas reserves.
• Assessed the competence, capabilities, and objectivity of management’s internal specialists responsible for reserve
estimation, to determine whether they were appropriately qualified.
• Tested the completeness and accuracy of source data used in the reserves estimation process.
• Corroborated management’s commercial assumptions by comparing them to publicly available industry
benchmarks and third party data, where available.
• Compared management’s internal assumptions with the latest approved operational plans and budgets to assess
consistency.
• Challenged the feasibility of these assumptions by reference to historical operational performance and realised
results.
• With the assistance of valuation experts, assessed whether the updated reserve estimates were appropriately
reflected in the Group’s impairment testing, DD&A calculations, and the abandonment and site restoration
provision.
• Reviewed the adequacy and clarity of the reserves and resource disclosures in the Annual Report for consistency
with audit evidence obtained.
• Obtained and independently recalculated the abandonment and site restoration provision, assessing the
reasonableness of key assumptions and inputs used by management.
• Critically assessed key inputs, and challenged management’s assumptions and judgements for reasonableness and
potential indicators of management bias.
Key observations
communicated
to the Group’s
Audit Committee
No material issues have been identified from the audit procedures performed.
132 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Impairment of oil & gas development and production fixed assets
Key audit matter
description
The Group’s oil and gas properties with a carrying amount of US$363.0 million (2023: US$245.3 million) as disclosed in
Note 5 to the financial statements, are reviewed annually for indicators of impairment. If such indicators are identified,
management estimate the asset’s recoverable amount.
There is significant judgement in management’s assessment of the recoverable amount of these assets, which are
sensitive to changes in key assumptions such as estimation of future prices of oil, natural gas and related products, the
discount rate applied to future cash flow forecasts and the assumptions relevant to production volumes.
Additionally, the Group’s use of a single cash-generating unit (CGU) for impairment testing purposes, encompassing
all assets of the Chinarevskoye field and related facilities, requires careful consideration given the potential for
independent cash flows from certain assets.
There is a risk that inappropriate judgements or assumptions may be applied, which could materially misstate the
recoverable amount and result in an overstatement of asset values or understatement of an impairment charge.
How the scope
of our audit
responded to the
key audit matter
We have performed, in conjunction with the component auditor, the following procedures in respect of the
impairment and production fixed assets:
• Evaluated management’s assessment of cash-generating units (CGUs) to determine whether the use of a single CGU
and corresponding impairment model was appropriate based on the integration of cash flows across the Group’s
assets.
• Evaluated management’s assessment for indicators of impairment or impairment reversal, considering both internal
and external sources of information.
• Performed walkthrough procedures to understand and evaluate the design and implementation of controls relevant
to the Group’s impairment assessment of oil and gas properties.
• Assessed whether the value in use (VIU) or the fair value less costs of disposal (FVLCD) represented the higher
recoverable amount in line with IFRS requirements.
• With the assistance of valuation experts, reviewed the integrity and mathematical accuracy of the discounted cash
flow models supporting the recoverable amount calculations, including the appropriateness of the weighted
average cost of capital (WACC) applied.
• Evaluated oil and gas price assumptions by comparing forecast prices to current market data, including forward
price curves, broker estimates, and other long-term forecasts.
• Benchmarked discount rate assumptions to reflect the Group’s specific risk profile.
• Considered potential contradictory evidence in relation to the recoverable amount determined, including analysis
of the discounted cash flow model and comparison to the Group’s enterprise value.
• Assessed the appropriateness of management’s oil and gas reserves and resource estimates.
• Evaluated the risking factors applied in the valuation of contingent resources.
• Challenged the valuation methodology used to estimate the recoverable amount, focusing on the value attributed
to the expected utilisation of spare GTU processing capacity, including the associated risking judgements.
• Tested forecast cash flows by comparing the assumptions used within the impairment models to the approved
budgets, business plans and other evidence of future intentions.
• Assessed the historical accuracy of management’s budgets and forecasts by comparing them to actual
performance.
• Compared inflation rate and the foreign exchange rate assumptions to externally available market data to assess
reasonableness.
• Evaluated management’s sensitivity analyses, considering the potential impact of reasonably possible changes to
key assumptions including discount rate, commodity prices, production volumes, operating expenditure, and
capital expenditure.
• Reviewed disclosures in respect of impairment considerations, including those surrounding the completeness and
accuracy over key sensitivities affecting management’s assessment.
Key observations
communicated
to the Group’s
Audit Committee
No material issues have been identified from the audit procedures performed. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 133
Key audit matter
description
The Group’s oil and gas properties with a carrying amount of US$363.0 million (2023: US$245.3 million) as disclosed in
Note 5 to the financial statements, are reviewed annually for indicators of impairment. If such indicators are identified,
management estimate the asset’s recoverable amount.
There is significant judgement in management’s assessment of the recoverable amount of these assets, which are
sensitive to changes in key assumptions such as estimation of future prices of oil, natural gas and related products, the
discount rate applied to future cash flow forecasts and the assumptions relevant to production volumes.
Additionally, the Group’s use of a single cash-generating unit (CGU) for impairment testing purposes, encompassing
all assets of the Chinarevskoye field and related facilities, requires careful consideration given the potential for
independent cash flows from certain assets.
There is a risk that inappropriate judgements or assumptions may be applied, which could materially misstate the
recoverable amount and result in an overstatement of asset values or understatement of an impairment charge.
How the scope
of our audit
responded to the
key audit matter
We have performed, in conjunction with the component auditor, the following procedures in respect of the
impairment and production fixed assets:
• Evaluated management’s assessment of cash-generating units (CGUs) to determine whether the use of a single CGU
and corresponding impairment model was appropriate based on the integration of cash flows across the Group’s
assets.
• Evaluated management’s assessment for indicators of impairment or impairment reversal, considering both internal
and external sources of information.
• Performed walkthrough procedures to understand and evaluate the design and implementation of controls relevant
to the Group’s impairment assessment of oil and gas properties.
• Assessed whether the value in use (VIU) or the fair value less costs of disposal (FVLCD) represented the higher
recoverable amount in line with IFRS requirements.
• With the assistance of valuation experts, reviewed the integrity and mathematical accuracy of the discounted cash
flow models supporting the recoverable amount calculations, including the appropriateness of the weighted
average cost of capital (WACC) applied.
• Evaluated oil and gas price assumptions by comparing forecast prices to current market data, including forward
price curves, broker estimates, and other long-term forecasts.
• Benchmarked discount rate assumptions to reflect the Group’s specific risk profile.
• Considered potential contradictory evidence in relation to the recoverable amount determined, including analysis
of the discounted cash flow model and comparison to the Group’s enterprise value.
• Assessed the appropriateness of management’s oil and gas reserves and resource estimates.
• Evaluated the risking factors applied in the valuation of contingent resources.
• Challenged the valuation methodology used to estimate the recoverable amount, focusing on the value attributed
to the expected utilisation of spare GTU processing capacity, including the associated risking judgements.
• Tested forecast cash flows by comparing the assumptions used within the impairment models to the approved
budgets, business plans and other evidence of future intentions.
• Assessed the historical accuracy of management’s budgets and forecasts by comparing them to actual
performance.
• Compared inflation rate and the foreign exchange rate assumptions to externally available market data to assess
reasonableness.
• Evaluated management’s sensitivity analyses, considering the potential impact of reasonably possible changes to
key assumptions including discount rate, commodity prices, production volumes, operating expenditure, and
capital expenditure.
• Reviewed disclosures in respect of impairment considerations, including those surrounding the completeness and
accuracy over key sensitivities affecting management’s assessment.
Key observations
communicated
to the Group’s
Audit Committee
No material issues have been identified from the audit procedures performed. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 133
Independent auditor’s report
continued
FINANCIAL REPORT
Our application of materiality
Our definition of materiality considers the value of error or omission on the financial statements that, individually or in aggregate, would
change or influence the economic decision of a reasonably knowledgeable user of those financial statements. Misstatements below these
levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular
circumstances of their occurrence, when evaluating their effect on the financial statements as a whole. Materiality is used in planning the
scope of our work, executing that work and evaluating the results.
Performance materiality is the application of materiality at the individual account or balance level, set at an amount to reduce, to an
appropriately low level, the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality for the
financial statements as a whole.
The determination of performance materiality reflects our assessment of the risk of undetected errors existing, the nature of the systems
and controls and the level of misstatements arising in previous audits.
Based on our professional judgement, we determined materiality for the financial statements as follows:
Group financial statements Parent Company financial statements
Overall
materiality
Materiality in respect of the Group was set at US$925,000
(2023: US$949,000).
Materiality in respect of the Parent Company was set at
US$1,942,000 (2023: US$1,920,000).
Component materiality for group purposes was set at
US$307,000 (2023: US$500,000)
The materiality set for the Parent Company is higher than
that of the Group, reflecting the presence of a significant
guaranteed liability in the Parent’s financial statements
which is eliminated on consolidation. While this balance is
material at the Parent level, it does not impact the
consolidated financial statements and is therefore not
relevant to the Group accounts.
However, for the purposes of obtaining audit evidence to
support the Group audit opinion, we applied a lower
component materiality to the Parent Company. This lower
threshold ensures sufficient coverage over balances and
transactions which are included in the consolidation.
Performance
materiality
Performance materiality for the Group was set at
US$555,000 (2023: US$570,000) which represents 60%
(2023: 60%) of the above materiality levels.
Performance materiality for the Parent Company was set at
US$1,165,000 (2022: US$1,152,000) for the which represents
60% (2023: 60%) of the above materiality levels.
How we
determined it
We initially determined Group materiality based upon a
benchmark of 2% of the Group’s EBITDA (2023: 2.25%) with
performance materiality determined as detailed above.
Following a number of adjustments during the course of the
audit, which resulted changes to the Group’s EBITDA, the
initial determination of US$925,000 was maintained being
1.45% (2023: 2.25%) of the Group’s EBITDA (as defined on
page 50) as this was the materiality level used as a basis for
reporting our findings the Audit Committee.
We initially determined Parent Company’s materiality based
upon a benchmark of 1% of the Parent Company’s net assets
(2023: 1%) with performance materiality determined as
detailed above.
Following a number of adjustments during the course of the
audit, which resulted changes to the Parent Company’s net
assets, the initial determination of US$1,942,000 was
maintained being 0.8% (2023: 1%) of the Parent Company’s
net assets as this was the materiality level used as a basis for
reporting our findings the Audit Committee.
Rationale
for the
benchmark
applied
EBITDA was deemed to be the appropriate benchmark for
the calculation of Group materiality as this is a KPI for the
Group in the assessment of the performance of
management, and market and analyst commentary also
uses EBITDA to comment on the performance of the Group.
In our opinion this is therefore the benchmark with which
the users of the financial statements are principally
concerned.
There are no specific KPIs relating to the Parent Entity. The
entity does not trade, it acts as a holding company for the
Group and the only ‘material’ balance on the statement of
Financial Position is the financial guarantee. This benchmark
aligns with the focus of key stakeholders. In our opinion this
is therefore the benchmark with which the users of the
financial statements are principally concerned.
We agreed to report any corrected or uncorrected adjustments exceeding US$46,000 (2023: US$47,450) to the Group Audit Committee
as well as differences below this threshold that in our view warranted reporting on qualitative grounds.
134 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
FINANCIAL REPORT
Our application of materiality
Our definition of materiality considers the value of error or omission on the financial statements that, individually or in aggregate, would
change or influence the economic decision of a reasonably knowledgeable user of those financial statements. Misstatements below these
levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular
circumstances of their occurrence, when evaluating their effect on the financial statements as a whole. Materiality is used in planning the
scope of our work, executing that work and evaluating the results.
Performance materiality is the application of materiality at the individual account or balance level, set at an amount to reduce, to an
appropriately low level, the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality for the
financial statements as a whole.
The determination of performance materiality reflects our assessment of the risk of undetected errors existing, the nature of the systems
and controls and the level of misstatements arising in previous audits.
Based on our professional judgement, we determined materiality for the financial statements as follows:
Group financial statements Parent Company financial statements
Overall
materiality
Materiality in respect of the Group was set at US$925,000
(2023: US$949,000).
Materiality in respect of the Parent Company was set at
US$1,942,000 (2023: US$1,920,000).
Component materiality for group purposes was set at
US$307,000 (2023: US$500,000)
The materiality set for the Parent Company is higher than
that of the Group, reflecting the presence of a significant
guaranteed liability in the Parent’s financial statements
which is eliminated on consolidation. While this balance is
material at the Parent level, it does not impact the
consolidated financial statements and is therefore not
relevant to the Group accounts.
However, for the purposes of obtaining audit evidence to
support the Group audit opinion, we applied a lower
component materiality to the Parent Company. This lower
threshold ensures sufficient coverage over balances and
transactions which are included in the consolidation.
Performance
materiality
Performance materiality for the Group was set at
US$555,000 (2023: US$570,000) which represents 60%
(2023: 60%) of the above materiality levels.
Performance materiality for the Parent Company was set at
US$1,165,000 (2022: US$1,152,000) for the which represents
60% (2023: 60%) of the above materiality levels.
How we
determined it
We initially determined Group materiality based upon a
benchmark of 2% of the Group’s EBITDA (2023: 2.25%) with
performance materiality determined as detailed above.
Following a number of adjustments during the course of the
audit, which resulted changes to the Group’s EBITDA, the
initial determination of US$925,000 was maintained being
1.45% (2023: 2.25%) of the Group’s EBITDA (as defined on
page 50) as this was the materiality level used as a basis for
reporting our findings the Audit Committee.
We initially determined Parent Company’s materiality based
upon a benchmark of 1% of the Parent Company’s net assets
(2023: 1%) with performance materiality determined as
detailed above.
Following a number of adjustments during the course of the
audit, which resulted changes to the Parent Company’s net
assets, the initial determination of US$1,942,000 was
maintained being 0.8% (2023: 1%) of the Parent Company’s
net assets as this was the materiality level used as a basis for
reporting our findings the Audit Committee.
Rationale
for the
benchmark
applied
EBITDA was deemed to be the appropriate benchmark for
the calculation of Group materiality as this is a KPI for the
Group in the assessment of the performance of
management, and market and analyst commentary also
uses EBITDA to comment on the performance of the Group.
In our opinion this is therefore the benchmark with which
the users of the financial statements are principally
concerned.
There are no specific KPIs relating to the Parent Entity. The
entity does not trade, it acts as a holding company for the
Group and the only ‘material’ balance on the statement of
Financial Position is the financial guarantee. This benchmark
aligns with the focus of key stakeholders. In our opinion this
is therefore the benchmark with which the users of the
financial statements are principally concerned.
We agreed to report any corrected or uncorrected adjustments exceeding US$46,000 (2023: US$47,450) to the Group Audit Committee
as well as differences below this threshold that in our view warranted reporting on qualitative grounds.
134 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Overview of the scope of the Group and
Parent Company audits
Our assessment of audit risk, evaluation of materiality and our
determination of performance materiality sets our audit scope for
each company within the Group. Taken together, this enables us
to form an opinion on the consolidated financial statements.
This assessment considers the size, risk profile, organisation /
distribution and effectiveness of group-wide controls, changes in
the business environment and other factors such as recent internal
audit results when assessing the level of work to be performed at
each component.
In assessing the risk of material misstatement to the consolidated
financial statements, and to ensure we had adequate quantitative
and qualitative coverage of significant accounts in the consolidated
financial statements, of the 13 reporting components of the group
including the Parent Company, we identified 2 components in
Kazakhstan and the UK which represent the principal business units
within the Group.
Full scope audits – Of the 13 components selected, full scope
audits of the complete financial information of 2 components;
Zhaikmunai LLP Chinarevkoye field and Nostrum Oil & Gas plc
were undertaken, these entities were selected based upon their
size or risk characteristics.
Specified procedures – Specific procedures were undertaken on
5 components; Nostrum Oil & Gas Coöperatief UA, Nostrum Oil &
Gas Finance B.V., Nostrum Services N.V., Nostrum Services N.V. -
KZ Branch and Postiv Invest. Our audit work was executed at group
component materialities.
Our audit scoping coverage for the key balances is summarised in
the charts below.
The coverage achieved by our audit procedures was:
Name Full scope
Specified
audit
procedures Total
Revenue 100% 0% 100%
Profit before tax 41% 59% 100%
Gross assets 52% 48% 100%
The group audit team led and directed the audit work performed
by the component auditors in Kazakhstan and Belgium through a
combination of group planning meetings and calls, provision of
group instructions (including detailed supplemental procedures),
review and challenge of related component interoffice reporting
and of findings from their working papers and interaction on audit
and accounting matters which arose, this included assessing the
appropriateness of conclusions and consistency between reported
findings and work performed.
The control environment
We evaluated the design and implementation of those internal
controls of the Group, including the Parent Company, which are
relevant to our audit, such as those relating to the financial
reporting cycle.
We deployed our internal IT audit specialists to get an
understanding of the general IT environment and test general IT
controls and these were found to be operating effectively.
Climate-related risks
In planning our audit and gaining an understanding of the Group
and Parent Company, we considered the potential impact of
climate-related risks on the business and its financial statements.
We obtained management’s climate-related risk assessment, along
with relevant documentation relating to management’s assessment
and held discussions with management to understand their
process for identifying and assessing those risks.
We engaged internal specialists to assess, amongst other factors,
the benchmarks used by management, the nature of the group’s
business activities, its processes and the geographic distribution of
its activities.
We designed audit procedures to specifically consider those assets
and liabilities where we anticipated, based on the work performed,
that the highest impact arising from climate change might fall. We
have reviewed the information received by management and have
not identified any additional climate related risks to be disclosed
within the financial statements.
Reporting on other information
The other information comprises the information included in the
annual report other than the financial statements and our auditor’s
report thereon. The directors are responsible for the other
information contained within the annual report. Our opinion on the
financial statements does not cover the other information and,
except to the extent otherwise explicitly stated in our report, we do
not express any form of assurance conclusion thereon. Our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements, or our knowledge obtained during
the audit, or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material
misstatements, we are required to determine whether this gives
rise to a material misstatement in the financial statements
themselves. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we
are required to report that fact.
We have nothing to report in this regard.
Strategic report and directors report
In our opinion, based on the work undertaken during the audit:
• the information given in the strategic report and the directors’
report for the financial year for which the financial statements are
prepared is consistent with the financial statements; and
• the strategic report and the directors’ report have been prepared
in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and
the Parent Company and their environment obtained in the course
of the audit, we have not identified material misstatements in the
strategic report or the directors’ report.
Directors’ remuneration report
Those aspects of the director’s remuneration report which are
required to be audited have been prepared in accordance with
applicable legal requirements. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 135
Parent Company audits
Our assessment of audit risk, evaluation of materiality and our
determination of performance materiality sets our audit scope for
each company within the Group. Taken together, this enables us
to form an opinion on the consolidated financial statements.
This assessment considers the size, risk profile, organisation /
distribution and effectiveness of group-wide controls, changes in
the business environment and other factors such as recent internal
audit results when assessing the level of work to be performed at
each component.
In assessing the risk of material misstatement to the consolidated
financial statements, and to ensure we had adequate quantitative
and qualitative coverage of significant accounts in the consolidated
financial statements, of the 13 reporting components of the group
including the Parent Company, we identified 2 components in
Kazakhstan and the UK which represent the principal business units
within the Group.
Full scope audits – Of the 13 components selected, full scope
audits of the complete financial information of 2 components;
Zhaikmunai LLP Chinarevkoye field and Nostrum Oil & Gas plc
were undertaken, these entities were selected based upon their
size or risk characteristics.
Specified procedures – Specific procedures were undertaken on
5 components; Nostrum Oil & Gas Coöperatief UA, Nostrum Oil &
Gas Finance B.V., Nostrum Services N.V., Nostrum Services N.V. -
KZ Branch and Postiv Invest. Our audit work was executed at group
component materialities.
Our audit scoping coverage for the key balances is summarised in
the charts below.
The coverage achieved by our audit procedures was:
Name Full scope
Specified
audit
procedures Total
Revenue 100% 0% 100%
Profit before tax 41% 59% 100%
Gross assets 52% 48% 100%
The group audit team led and directed the audit work performed
by the component auditors in Kazakhstan and Belgium through a
combination of group planning meetings and calls, provision of
group instructions (including detailed supplemental procedures),
review and challenge of related component interoffice reporting
and of findings from their working papers and interaction on audit
and accounting matters which arose, this included assessing the
appropriateness of conclusions and consistency between reported
findings and work performed.
The control environment
We evaluated the design and implementation of those internal
controls of the Group, including the Parent Company, which are
relevant to our audit, such as those relating to the financial
reporting cycle.
We deployed our internal IT audit specialists to get an
understanding of the general IT environment and test general IT
controls and these were found to be operating effectively.
Climate-related risks
In planning our audit and gaining an understanding of the Group
and Parent Company, we considered the potential impact of
climate-related risks on the business and its financial statements.
We obtained management’s climate-related risk assessment, along
with relevant documentation relating to management’s assessment
and held discussions with management to understand their
process for identifying and assessing those risks.
We engaged internal specialists to assess, amongst other factors,
the benchmarks used by management, the nature of the group’s
business activities, its processes and the geographic distribution of
its activities.
We designed audit procedures to specifically consider those assets
and liabilities where we anticipated, based on the work performed,
that the highest impact arising from climate change might fall. We
have reviewed the information received by management and have
not identified any additional climate related risks to be disclosed
within the financial statements.
Reporting on other information
The other information comprises the information included in the
annual report other than the financial statements and our auditor’s
report thereon. The directors are responsible for the other
information contained within the annual report. Our opinion on the
financial statements does not cover the other information and,
except to the extent otherwise explicitly stated in our report, we do
not express any form of assurance conclusion thereon. Our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements, or our knowledge obtained during
the audit, or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material
misstatements, we are required to determine whether this gives
rise to a material misstatement in the financial statements
themselves. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we
are required to report that fact.
We have nothing to report in this regard.
Strategic report and directors report
In our opinion, based on the work undertaken during the audit:
• the information given in the strategic report and the directors’
report for the financial year for which the financial statements are
prepared is consistent with the financial statements; and
• the strategic report and the directors’ report have been prepared
in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and
the Parent Company and their environment obtained in the course
of the audit, we have not identified material misstatements in the
strategic report or the directors’ report.
Directors’ remuneration report
Those aspects of the director’s remuneration report which are
required to be audited have been prepared in accordance with
applicable legal requirements. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 135
Independent auditor’s report
continued
FINANCIAL REPORT
Corporate governance statement
We have reviewed the directors’ statement in relation to going
concern, longer-term viability and that part of the Corporate
Governance Statement relating to the entity’s compliance with the
provisions of the UK Corporate Governance Code.
Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial
statements and our knowledge obtained during the audit:
• Directors’ statement with regards the appropriateness of
adopting the going concern basis of accounting and any material
uncertainties identified.
• Directors’ explanation as to its assessment of the group’s
prospects, the period this assessment covers and why the period
is appropriate.
• Director’s statement on whether it has a reasonable expectation
that the group will be able to continue in operation and meets its
liabilities.
• Directors’ statement on fair, balanced and understandable.
• Board’s confirmation that it has carried out a robust assessment
of the emerging and principal risks set out.
• Section of the annual report that describes the review of
effectiveness of risk management and internal control systems ;
and
• Section describing the work of the Group Audit Committee
Opinions on other matters prescribed
by the Companies Act 2006
In our opinion, based on the work undertaken in the course of
the audit:
• the information about internal control and risk management
systems in relation to financial reporting processes and about
share capital structures, given in compliance with rules 7.2.5 and
7.2.6 in the Disclosure Rules and Transparency Rules sourcebook
made by the Financial Conduct Authority (the FCA Rules), is
consistent with the financial statements and has been prepared
in accordance with applicable legal requirements; and
• information about the Group and Parent Company’s corporate
governance code and practices and about its administrative,
management and supervisory bodies and their committees
complies with rules 7.2.2, 7.2.3 and 7.2.7 of the FCA Rules.
In the light of the knowledge and understanding of the Group and
the Parent Company and their environment obtained in the course
of the audit, we have not identified material misstatements in:
• the information about internal control and risk management
systems in relation to financial reporting processes and about
share capital structures, given in compliance with rules 7.2.5 and
7.2.6 of the FCA Rules.
Matters on which we are required to
report by exception
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
• adequate accounting records have not been kept by the Parent
Company, or returns adequate for our audit have not been
received by branches not visited by us; or
• the Parent Company financial statements are not in agreement
with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law
are not made; or
• the part of the directors’ remuneration report to be audited is not
in agreement with the accounting records and returns; or
• we have not received all the information and explanations we
require for our audit
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement,
the directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair
view, and for such internal control as the directors determine is
necessary to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible
for assessing the Group’s and the Parent Company’s ability to
continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the
Group or Parent Company or to cease operations, or have no
realistic alternative but to do so.
Auditor responsibilities for the audit of
the financial statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance is
a high level of assurance but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists.
Misstatements can arise from fraud or error and are considered
material if, individually or in aggregate, they could reasonably be
expected to influence the economic decisions of users taken on
the basis of these financial statements.
A further description of our responsibilities for the financial
statements is located on the FRC’s website at: www.frc.org.uk/
auditorsresponsibilities . This description forms part of our
auditor’s report.
Extent to which the audit was considered
capable of detecting irregularities,
including fraud
Irregularities, including fraud, are instances of non-compliance with
laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud.
These audit procedures were designed to provide reasonable
assurance that the financial statements were free from fraud or error.
The risk of not detecting a material misstatement due to fraud is
higher than the risk of not detecting one resulting from error and
detecting irregularities that result from fraud is inherently more
difficult than detecting those that result from error, as fraud may
involve collusion, deliberate concealment, forgery or intentional
misrepresentations. Also, the further removed non-compliance with
laws and regulations is from events and transactions reflected in the
financial statements, the less likely we would become aware of it.
136 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
FINANCIAL REPORT
Corporate governance statement
We have reviewed the directors’ statement in relation to going
concern, longer-term viability and that part of the Corporate
Governance Statement relating to the entity’s compliance with the
provisions of the UK Corporate Governance Code.
Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial
statements and our knowledge obtained during the audit:
• Directors’ statement with regards the appropriateness of
adopting the going concern basis of accounting and any material
uncertainties identified.
• Directors’ explanation as to its assessment of the group’s
prospects, the period this assessment covers and why the period
is appropriate.
• Director’s statement on whether it has a reasonable expectation
that the group will be able to continue in operation and meets its
liabilities.
• Directors’ statement on fair, balanced and understandable.
• Board’s confirmation that it has carried out a robust assessment
of the emerging and principal risks set out.
• Section of the annual report that describes the review of
effectiveness of risk management and internal control systems ;
and
• Section describing the work of the Group Audit Committee
Opinions on other matters prescribed
by the Companies Act 2006
In our opinion, based on the work undertaken in the course of
the audit:
• the information about internal control and risk management
systems in relation to financial reporting processes and about
share capital structures, given in compliance with rules 7.2.5 and
7.2.6 in the Disclosure Rules and Transparency Rules sourcebook
made by the Financial Conduct Authority (the FCA Rules), is
consistent with the financial statements and has been prepared
in accordance with applicable legal requirements; and
• information about the Group and Parent Company’s corporate
governance code and practices and about its administrative,
management and supervisory bodies and their committees
complies with rules 7.2.2, 7.2.3 and 7.2.7 of the FCA Rules.
In the light of the knowledge and understanding of the Group and
the Parent Company and their environment obtained in the course
of the audit, we have not identified material misstatements in:
• the information about internal control and risk management
systems in relation to financial reporting processes and about
share capital structures, given in compliance with rules 7.2.5 and
7.2.6 of the FCA Rules.
Matters on which we are required to
report by exception
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
• adequate accounting records have not been kept by the Parent
Company, or returns adequate for our audit have not been
received by branches not visited by us; or
• the Parent Company financial statements are not in agreement
with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law
are not made; or
• the part of the directors’ remuneration report to be audited is not
in agreement with the accounting records and returns; or
• we have not received all the information and explanations we
require for our audit
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement,
the directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair
view, and for such internal control as the directors determine is
necessary to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible
for assessing the Group’s and the Parent Company’s ability to
continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the
Group or Parent Company or to cease operations, or have no
realistic alternative but to do so.
Auditor responsibilities for the audit of
the financial statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance is
a high level of assurance but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists.
Misstatements can arise from fraud or error and are considered
material if, individually or in aggregate, they could reasonably be
expected to influence the economic decisions of users taken on
the basis of these financial statements.
A further description of our responsibilities for the financial
statements is located on the FRC’s website at: www.frc.org.uk/
auditorsresponsibilities . This description forms part of our
auditor’s report.
Extent to which the audit was considered
capable of detecting irregularities,
including fraud
Irregularities, including fraud, are instances of non-compliance with
laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud.
These audit procedures were designed to provide reasonable
assurance that the financial statements were free from fraud or error.
The risk of not detecting a material misstatement due to fraud is
higher than the risk of not detecting one resulting from error and
detecting irregularities that result from fraud is inherently more
difficult than detecting those that result from error, as fraud may
involve collusion, deliberate concealment, forgery or intentional
misrepresentations. Also, the further removed non-compliance with
laws and regulations is from events and transactions reflected in the
financial statements, the less likely we would become aware of it.
136 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Identifying and assessing potential risks
arising from irregularities, including fraud
The extent of the procedures undertaken to identify and assess the
risks of material misstatement in respect of irregularities, including
fraud, included the following:
• We considered the nature of the industry and sector the control
environment, business performance including remuneration
policies and the Group’s, including the Parent Company’s, own
risk assessment that irregularities might occur as a result of fraud
or error. From our sector experience and through discussion with
the directors, we obtained an understanding of the legal and
regulatory frameworks applicable to the Group focusing on laws
and regulations that could reasonably be expected to have a
direct material effect on the financial statements.
• We enquired of the directors and management and the Audit
Committee concerning the Group’s and the Parent Company’s
policies and procedures relating to:
— identifying, evaluating and complying with the laws and
regulations and whether they were aware of any instances of
non-compliance;
— detecting and responding to the risks of fraud and whether
they had any knowledge of actual or suspected fraud; and
— the internal controls established to mitigate risks related to
fraud or non-compliance with laws and regulations.
• We assessed the susceptibility of the financial statements to
material misstatement, including how fraud might occur by
evaluating management’s incentives and opportunities for
manipulation of the financial statements. This included utilising
the spectrum of inherent risk and an evaluation of the risk of
management override of controls.
• Component auditors were briefed on fraud risks and regulatory
environment relevant to their jurisdictions and received
confirmation that there were no additional local fraud risks
identified by them which would impact the overall group risk
assessment.
As a result of these procedures we determined that the principal
risks were management bias in accounting estimates, particularly in
determining impairment of oil and gas reserves, and the potential
for fraud in revenue recognition.
Audit response to risks identified
In respect of the above procedures:
• we corroborated the results of our enquiries through our review
of the minutes of the Group’s and the Parent Company’s board
meetings;
• the component auditors visited the operations in Kazakhstan
observing operations and carrying out a physical verification of
inventory;
• audit procedures performed by the engagement team in
connection with the risks identified included:
— reviewing financial statement disclosures and testing to
supporting documentation to assess compliance with
applicable laws and regulations expected to have a direct
impact on the financial statements;
— testing journal entries, including those processed late for
financial statements preparation, those posted by infrequent
or unexpected users, those posted to unusual account
combinations;
— evaluating the business rationale of significant transactions
outside the normal course of business, and reviewing
accounting estimates for bias;
— enquiry of management around actual and potential litigation
and claims;
— challenging the assumptions and judgements made by
management in its significant accounting estimates and
challenging management on any changes in estimation
techniques made during the year and assessing their impact;
and
— obtaining confirmations from third parties to confirm
existence of certain balances.
• we communicated relevant laws and regulations and potential
fraud risks to all engagement team members, including experts,
and the component auditors and remained alert to any
indications of fraud or non-compliance with laws and regulations
throughout the audit.
Other requirements
We were re-appointed at the Annual General Meeting on 5 June
2024. The period of total uninterrupted engagement including
previous renewals and reappointments of the firm is 3 years.
We did not provide any non-audit services which are prohibited by
the FRC’s Ethical Standard to the Group or the Parent Company,
and we remain independent of the Group and the Parent Company
in conducting our audit.
Use of our report
This report is made solely to the Parent Company’s members, as a
body, in accordance with Chapter 3 of Part 16 of the Companies
Act 2006. Our audit work has been undertaken so that we might
state to the Parent Company’s members those matters we are
required to state to them in an auditor’s report and for no other
purpose. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the Parent Company
and the Parent Company’s members as a body, for our audit work,
for this report, or for the opinions we have formed.
As required by the Financial Conduct Authority (FCA) Disclosure
Guidance and Transparency Rule (DTR) 4.1.14R, these financial
statements form part of the European Single Electronic Format
(ESEF) prepared Annual Financial Report filed on the National
Storage Mechanism of the UK FCA in accordance with the ESEF
Regulatory Technical Standard ((‘ESEF RTS’). This auditor’s report
provides no assurance over whether the annual financial report has
been prepared using the single electronic format specified in the
ESEF RTS.
Andrew Moyser FCA FCCA
(Senior Statutory Auditor) for and on behalf of MHA,
Statutory Auditor London, United Kingdom
22 April 2025
MHA is the trading name of MHA Audit Services LLP, a limited
liability partnership in England and Wales (registered number
OC455542) STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 137
arising from irregularities, including fraud
The extent of the procedures undertaken to identify and assess the
risks of material misstatement in respect of irregularities, including
fraud, included the following:
• We considered the nature of the industry and sector the control
environment, business performance including remuneration
policies and the Group’s, including the Parent Company’s, own
risk assessment that irregularities might occur as a result of fraud
or error. From our sector experience and through discussion with
the directors, we obtained an understanding of the legal and
regulatory frameworks applicable to the Group focusing on laws
and regulations that could reasonably be expected to have a
direct material effect on the financial statements.
• We enquired of the directors and management and the Audit
Committee concerning the Group’s and the Parent Company’s
policies and procedures relating to:
— identifying, evaluating and complying with the laws and
regulations and whether they were aware of any instances of
non-compliance;
— detecting and responding to the risks of fraud and whether
they had any knowledge of actual or suspected fraud; and
— the internal controls established to mitigate risks related to
fraud or non-compliance with laws and regulations.
• We assessed the susceptibility of the financial statements to
material misstatement, including how fraud might occur by
evaluating management’s incentives and opportunities for
manipulation of the financial statements. This included utilising
the spectrum of inherent risk and an evaluation of the risk of
management override of controls.
• Component auditors were briefed on fraud risks and regulatory
environment relevant to their jurisdictions and received
confirmation that there were no additional local fraud risks
identified by them which would impact the overall group risk
assessment.
As a result of these procedures we determined that the principal
risks were management bias in accounting estimates, particularly in
determining impairment of oil and gas reserves, and the potential
for fraud in revenue recognition.
Audit response to risks identified
In respect of the above procedures:
• we corroborated the results of our enquiries through our review
of the minutes of the Group’s and the Parent Company’s board
meetings;
• the component auditors visited the operations in Kazakhstan
observing operations and carrying out a physical verification of
inventory;
• audit procedures performed by the engagement team in
connection with the risks identified included:
— reviewing financial statement disclosures and testing to
supporting documentation to assess compliance with
applicable laws and regulations expected to have a direct
impact on the financial statements;
— testing journal entries, including those processed late for
financial statements preparation, those posted by infrequent
or unexpected users, those posted to unusual account
combinations;
— evaluating the business rationale of significant transactions
outside the normal course of business, and reviewing
accounting estimates for bias;
— enquiry of management around actual and potential litigation
and claims;
— challenging the assumptions and judgements made by
management in its significant accounting estimates and
challenging management on any changes in estimation
techniques made during the year and assessing their impact;
and
— obtaining confirmations from third parties to confirm
existence of certain balances.
• we communicated relevant laws and regulations and potential
fraud risks to all engagement team members, including experts,
and the component auditors and remained alert to any
indications of fraud or non-compliance with laws and regulations
throughout the audit.
Other requirements
We were re-appointed at the Annual General Meeting on 5 June
2024. The period of total uninterrupted engagement including
previous renewals and reappointments of the firm is 3 years.
We did not provide any non-audit services which are prohibited by
the FRC’s Ethical Standard to the Group or the Parent Company,
and we remain independent of the Group and the Parent Company
in conducting our audit.
Use of our report
This report is made solely to the Parent Company’s members, as a
body, in accordance with Chapter 3 of Part 16 of the Companies
Act 2006. Our audit work has been undertaken so that we might
state to the Parent Company’s members those matters we are
required to state to them in an auditor’s report and for no other
purpose. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the Parent Company
and the Parent Company’s members as a body, for our audit work,
for this report, or for the opinions we have formed.
As required by the Financial Conduct Authority (FCA) Disclosure
Guidance and Transparency Rule (DTR) 4.1.14R, these financial
statements form part of the European Single Electronic Format
(ESEF) prepared Annual Financial Report filed on the National
Storage Mechanism of the UK FCA in accordance with the ESEF
Regulatory Technical Standard ((‘ESEF RTS’). This auditor’s report
provides no assurance over whether the annual financial report has
been prepared using the single electronic format specified in the
ESEF RTS.
Andrew Moyser FCA FCCA
(Senior Statutory Auditor) for and on behalf of MHA,
Statutory Auditor London, United Kingdom
22 April 2025
MHA is the trading name of MHA Audit Services LLP, a limited
liability partnership in England and Wales (registered number
OC455542) STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 137
CONSOLIDATED FINANCIAL
STATEMENTS
139 Consolidated statement of financial
position
140 Consolidated statement of
comprehensive income
141 Consolidated statement of cash
flows
142 Consolidated statement of changes
in equity
143 Notes to the consolidated financial
statements
143 1 General
144 2 Basis of preparation
and consolidation
145 3 Changes in accounting policies
and disclosures
146 4 Summary of material
accounting policies
154 5 Property, plant and equipment
155 6 Exploration and evaluation
assets
155 7 Non-current advances and other
assets
155 8 Inventories
155 9 Other current assets
155 10 Trade receivables
155 11 Cash and cash equivalents
156 12 Share capital and reserves
156 13 Earnings per share
157 14 Notes payable and accumulated
interest
158 15 Abandonment and site
restoration provision
158 16 Due to Government of
Kazakhstan
158 17 Trade payables
158 18 Advances received
158 19 Other current liabilities
159 20 Revenue
159 21 Cost of sales
159 22 General and administrative
expenses
159 23 Selling and transportation
expenses
159 24 Taxes other than income tax
159 25 Finance costs
159 26 Employees’ remuneration
160 27 Other income and other
expenses
161 28 Income tax
161 29 Related party transactions
161 30 Audit and non-audit fees
162 31 Contingent liabilities and
commitments
162 32 Financial risk management
objectives and policies
164 34 Events after the reporting date
138 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
STATEMENTS
139 Consolidated statement of financial
position
140 Consolidated statement of
comprehensive income
141 Consolidated statement of cash
flows
142 Consolidated statement of changes
in equity
143 Notes to the consolidated financial
statements
143 1 General
144 2 Basis of preparation
and consolidation
145 3 Changes in accounting policies
and disclosures
146 4 Summary of material
accounting policies
154 5 Property, plant and equipment
155 6 Exploration and evaluation
assets
155 7 Non-current advances and other
assets
155 8 Inventories
155 9 Other current assets
155 10 Trade receivables
155 11 Cash and cash equivalents
156 12 Share capital and reserves
156 13 Earnings per share
157 14 Notes payable and accumulated
interest
158 15 Abandonment and site
restoration provision
158 16 Due to Government of
Kazakhstan
158 17 Trade payables
158 18 Advances received
158 19 Other current liabilities
159 20 Revenue
159 21 Cost of sales
159 22 General and administrative
expenses
159 23 Selling and transportation
expenses
159 24 Taxes other than income tax
159 25 Finance costs
159 26 Employees’ remuneration
160 27 Other income and other
expenses
161 28 Income tax
161 29 Related party transactions
161 30 Audit and non-audit fees
162 31 Contingent liabilities and
commitments
162 32 Financial risk management
objectives and policies
164 34 Events after the reporting date
138 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statement of financial position
The consolidated financial statements of Nostrum Oil & Gas PLC, registered number 8717287, were authorised for issue by the Board of Directors on 22 April 2025.
Signed on behalf of the Board: Arfan Khan Chief Executive Officer
22 April 2025 The accounting policies and explanatory notes on pages142 through 161 are an integral part of these consolidated financial statements. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 139
Consolidated statement of financial position
| In thousands of US Dollars | Notes | 31 December2024 | 31 December2023 |
| Assets | |||
| Non-current assets | |||
| Property, plant and equipment | 5 |
|
|
| Exploration and evaluation assets | 6 |
|
|
| Advances and other non-current assets | 7 |
|
|
| Restricted cash | 11 |
|
|
|
|
|
||
| Current assets | |||
| InventoriesOther current assets | 89 |
|
|
| Income tax prepayment | 28 |
|
|
| Trade receivables | 10 |
|
|
| Cash and cash equivalents | 11 |
|
|
|
|
|
||
| TOTAL ASSETS |
|
|
|
| Equity and liabilities | |||
| Share capital and reserves | 12 | ||
| Share capital |
|
|
|
| Treasury capital |
( |
( |
|
| Deferred shares |
|
|
|
| Share premium |
|
|
|
| Retained deficit and reserves |
( |
( |
|
| Attributable to owners of Nostrum Oil & Gas PLC |
( |
( |
|
| Non-controlling interest |
|
|
|
|
( |
( |
||
| Non-current liabilities | |||
| Notes payable and accumulated interest | 14 |
|
|
| Principal |
|
|
|
| Arrangement fees and fair value adjustments |
( |
( |
|
| Abandonment and site restoration provision | 15 |
|
|
| Amounts due to Government of Kazakhstan | 16 |
|
|
| Deferred tax liability | 28 |
|
|
|
|
|
||
| Current liabilities | |||
| Notes payable and accumulated interest | 14 |
|
|
| Trade payables | 17 |
|
|
| Advances received | 18 |
|
|
| Current tax payable |
|
|
|
| Current portion of amounts due to Government of Kazakhstan | 16 |
|
|
| Other current liabilities | 19 |
|
|
|
|
|
||
| TOTAL EQUITY AND LIABILITIES |
|
|
Signed on behalf of the Board: Arfan Khan Chief Executive Officer
22 April 2025 The accounting policies and explanatory notes on pages142 through 161 are an integral part of these consolidated financial statements. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 139
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statement of comprehensive income The accounting policies and explanatory notes on pages142 through 161 are an integral part of these consolidated financial statements.
All items in the above statement are derived from continuing operations.
140 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Consolidated statement of comprehensive income The accounting policies and explanatory notes on pages142 through 161 are an integral part of these consolidated financial statements.
| For the year ended 31 December | |||
| In thousands of US Dollars | Notes | 2024 | 2023 |
| Revenue | |||
| Revenue from export sales |
|
|
|
| Revenue from domes_c sales and tolling fees |
|
|
|
| 20 |
|
|
|
| Cost of sales | 21 |
( |
( |
| Gross profit |
|
|
|
| General and administra_ve expenses | 22 |
( |
( |
| Selling and transporta_on expenses | 23 |
( |
( |
| Taxes other than income tax | 24 |
( |
( |
| Employee share op_ons reversals | 26 |
|
|
| Finance costs | 25 |
( |
( |
| Impairment reversal | 4 |
|
|
| Gain on debt-to-equity exchange | 12 |
|
|
| Fair value adjustment on recogni_on of debt instruments | 14 |
|
|
| Foreign exchange gain / (loss), net |
|
( |
|
| Interest income |
|
|
|
| Other income |
|
|
|
| Other expenses | 27 |
( |
( |
| Income before income tax |
|
|
|
| Current income tax expense |
( |
( |
|
| Deferred income tax (expense) / benefit |
( |
|
|
| Income tax expense | 28 |
( |
( |
| (Loss) / income for the year |
( |
|
|
| Currency transla_on difference |
( |
|
|
| Other comprehensive (loss) / income for the year |
( |
|
|
| Total comprehensive (loss) / income for the year |
( |
|
|
| Loss for the year acributable to non-controlling interests |
( |
|
|
| (Loss) / earnings for the year acributable to the shareholders |
( |
|
|
| Weighted average number of shares (Notes 13) |
|
|
|
| Basic and diluted (loss) / earnings per share (in US dollars) | 13 |
( |
|
All items in the above statement are derived from continuing operations.
140 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Consolidated statement of cash flows
“Other finance costs” for the year ended 31 December 2023 represent advisor fees paid by the Group in relation to the forbearance agreements, lock-up
agreements and ongoing process of restructuring of the Group’s outstanding bonds. For more details see Note 1. The accounting policies and explanatory notes on pages142 through 161 are an integral part of these consolidated financial statements. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 141
| For the year ended 31 December | |||
| In thousands of US Dollars | Notes | 2024 | 2023 |
| Cash flow from opera^ng ac^vi^es: | |||
| Income before income tax |
|
|
|
| Adjustments for: | |||
| Deprecia_on, deple_on and amor_sa_on | 21, 22 |
|
|
| Impairment reversal | 4 |
( |
|
| Finance costs | 25 |
|
|
| Interest income |
( |
( |
|
| Foreign exchange loss on inves_ng and financing ac_vi_es |
|
|
|
| Loss on disposal of property, plant and equipment |
|
|
|
| Fair value adjustment on recogni_on of debt instruments |
|
( |
|
| Gain on debt-to-equity exchange |
|
( |
|
| Employee share op_ons reversals |
|
( |
|
| Opera^ng profit before working capital changes |
|
|
|
| Changes in working capital: | |||
| Change in inventories |
( |
|
|
| Change in trade receivables |
|
( |
|
| Change in prepayments and other current assets |
|
( |
|
| Change in trade payables |
( |
( |
|
| Change in advances received |
|
|
|
| Change in due to Government of Kazakhstan |
( |
( |
|
| Change in other current liabili_es |
( |
( |
|
| Cash from opera^ons |
|
|
|
| Income tax paid |
( |
( |
|
| Net cash from / (used in) opera^ng ac^vi^es |
|
( |
|
| Cash flow from inves^ng ac^vi^es: | |||
| Interest received |
|
|
|
| Purchase of property, plant and equipment |
( |
( |
|
| Considera_on paid for 80% interest in Posi_v Invest LLP | 6 |
|
( |
| Expenditures on explora_on and evalua_on assets |
( |
( |
|
| Transfer (to)/from restricted cash |
( |
|
|
| Net cash used in inves^ng ac^vi^es |
( |
( |
|
| Cash flow from financing ac^vi^es: | |||
| Finance costs paid |
( |
( |
|
| Other finance costs |
( |
( |
|
| Net cash used in financing ac^vi^es |
( |
( |
|
| Effects of exchange rate changes on cash |
( |
|
|
| Net decrease in cash and cash equivalents |
( |
( |
|
| Cash and cash equivalents at the beginning of the year | 11 |
|
|
| Cash and cash equivalents at the end of the year | 11 |
|
|
“Other finance costs” for the year ended 31 December 2023 represent advisor fees paid by the Group in relation to the forbearance agreements, lock-up
agreements and ongoing process of restructuring of the Group’s outstanding bonds. For more details see Note 1. The accounting policies and explanatory notes on pages142 through 161 are an integral part of these consolidated financial statements. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 141
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statement of changes in equity
* The gain on debt-to-equity exchange is reclassified as share premium in accordance with the requirements of the Companies Act 2006
** Long-Term Incentive Plan (“LTIP”) The accounting policies and explanatory notes on pages142 through 161 are an integral part of these consolidated financial statements. 142 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Consolidated statement of changes in equity
| In thousands of US Dollars | Notes | Sharecapital | Treasurycapital | Deferredshares | Sharepremium | Otherreserves(Note 12) | Retaineddeficit | Non-controllinginterest | Total |
| As at 1 January 2023 |
|
( |
|
|
|
( |
|
( |
|
| Income for the year |
|
|
|
|
|
|
|
|
|
| Other comprehensive income |
|
|
|
|
|
|
|
|
|
| Total comprehensive income for the year |
|
|
|
|
|
|
|
|
|
| Debt-to-equity exchange* | 12 |
( |
|
|
|
|
|
|
|
| Transfer of share premium on debt-to-equity exchange | 12 |
|
|
|
|
|
( |
|
|
| Recogni_on of non-controlling interest onpurchase of Posi_v Invest LLP |
|
|
|
|
|
|
|
|
|
| Share based payments under LTIP** |
|
|
|
|
( |
|
( |
||
| As at 31 December 2023 |
|
( |
|
|
|
( |
|
( |
|
| Loss for the year |
|
|
|
|
|
( |
( |
( |
|
| Other comprehensive loss |
|
|
|
|
( |
|
|
( |
|
| Total comprehensive loss for the year |
|
|
|
|
( |
( |
( |
( |
|
| Redemp_on of deferred shares | 12 |
|
|
( |
|
|
|
|
|
| As at 31 December 2024 |
|
( |
|
|
|
( |
|
( |
* The gain on debt-to-equity exchange is reclassified as share premium in accordance with the requirements of the Companies Act 2006
** Long-Term Incentive Plan (“LTIP”) The accounting policies and explanatory notes on pages142 through 161 are an integral part of these consolidated financial statements. 142 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Notes to the consolidated financial statements
1
14
42
2
N
NO
OS
ST
TR
RU
UM
M O
OI
IL
L &
& G
GA
AS
S P
PL
LC
C ANNUAL REPORT & ACCOUNTS 2024
1.
General
Overview
Nostrum Oil & Gas PLC (“the Company” or
“the Parent”) is a public limited company
incorporated on 3 October 2013 under the
Companies Act 2006 and registered in England and
Wales with registered number 8717287. The
registered address of Nostrum Oil & Gas PLC is:
20 Eastbourne Terrace, London, W2 6LG, UK .
These consolidated financial statements include
the financial position and the results of the
operations of Nostrum Oil & Gas PLC and its
following subsidiaries:
Nostrum Oil & Gas PLC and its subsidiaries are
hereinafter referred to as “the Group”.
The Group’s operations comprise of a single
operating segment including all Group’s assets
related to its Chinarevskoye field, as well as surface
facilities, and are primarily conducted through its
oil and gas producing entity Zhaikmunai LLP
located in Kazakhstan .
Zhaikmunai LLP carries out its activities in
accordance with the Contract for Additional
Exploration, Production and Production-Sharing of
Crude Hydrocarbons in the Chinarevskoye oil and
gas condensate field (the “Contract”) dated
31 October 1997 between the State Committee of
Investments of the Republic of Kazakhstan and
Zhaikmunai LLP in accordance with the license MG
No. 253D for the exploration and production of
hydrocarbons in Chinarevskoye oil and gas
condensate field.
The term of the Chinarevskoye subsoil use rights
included a 5-year exploration period followed by a
25-year production period with the Contract being
valid until 26 May 2031.
On 17 July 2023, Nostrum Oil & Gas Coöperatief
U.A. acquired an 80% interest in Positiv Invest LLP
for US$20 million. Positiv Invest LLP holds the
rights to the Stepnoy Leopard Fields located in the
West Kazakhstan region. The Stepnoy Leopard
Fields are in proximity to Nostrum's existing
gas
treatment facilities and have a subsurface contract
valid until December 2044
On August 20, 2024, Nostrum Oil & Gas
Coöperatief U.A. transferred its 80% participating
interest in Positiv Invest LLP and its 100%
participating interest in Zhaikmunai LLP to
Nostrum Oil & Gas Finance B.V. This reorganisation
consolidates ownership of the Group’s primary
assets, including the Chinarevskoye field operated
by Zhaikmunai LLP and the Stepnoy Leopard Fields
managed by Positiv Invest LLP, under a single
entity, enhancing operational alignment and
strategic focus.
As at 31 December 2024 the Group employed 605
employees (31 December 2023: 571).
Royalty payments
Zhaikmunai LLP is required to make monthly
royalty payments during the Contract production
period, at the rates specified in the Contract.
Royalty rates depend on hydrocarbons recovery
levels and the phase of production and can vary
from 3% to 7% of produced crude oil and from 4%
to 9% of produced natural gas. Royalty is
accounted on a gross basis.
Government profit share
Zhaikmunai LLP makes payments to the
Government for the Government’s profit share as
determined in the Contract. The profit share
depends on hydrocarbon production levels and
varies from 10% to 40% of production after
deducting royalties and reimbursable
expenditures. Reimbursable expenditures include
operating expenses, costs of additional exploration
and development costs. Government profit share
is expensed as incurred and paid in cash.
Government profit share is accounted on a gross
basis.
Group debt restructuring
On 23 December 2021, the Group entered into a
lock-up agreement (the “LUA”) and agreed with
noteholders the terms of a restructuring of the
Group’s US$725 million 8.0% Senior Notes due July
2022 (“2022 Notes”) and its US$400 million 7.0%
Senior Notes due February 2025 (“2025 Notes”)
(together, the “Existing Notes”). The below
outlines the key terms of the restructuring as
agreed between the Group, acceded noteholders
and ICU in the LUAs and also voted in favour of by
Nostrum shareholders, and subsequently
implemented:
Partial reinstatement of debt:
•
In the form of US$250 million Senior Secured
Notes (SSNs) maturing on 30 June 2026 and
bearing interest at a rate of 5.00% per year
payable in cash. The SSNs are not convertible;
•
In the form of US$300 million Senior Unsecured
Notes (SUNs) maturing on 30 June 2026 and
bearing interest at a rate of 1.00% per year
payable in cash and 13.00% per year payable in
kind. If not repaid in cash at maturity, the SUNs
are repayable in specie through the issuance of
equity in the Company based on the value of
the SUNs outstanding on the issuance date as a
percentage of the fair market value of the
Company (up to a maximum of 99.99% of the
Company’s fully diluted equity).
Conversion to equity:
•
Conversion of the remainder of the Existing
Notes and accrued interest into equity by way
of a UK scheme of arrangement:
•
Existing noteholders own 88.89% of the
expanded ordinary share capital of the
Company on closing of the restructuring.
Existing noteholders also own warrants (to be
held by trustee) allowing them to subscribe for
an additional 1.11% of the ordinary share
capital of the Company upon exercise;
•
The existing ordinary shareholders hold 11.11%
upon closing of the restructuring.
New corporate governance arrangements
:
•
In respect of the Group and certain
arrangements, which includes a cash sweep
mechanism requiring that cash above US$30
million is swept into a debt service retention
account (to fund the next two cash interest
payments due) and a restricted cash account
which the Company can access with approval of
the majority of Independent Non-Executive
Directors of the Company; and
•
Transfer the Company's listing to the Standard
Listing segment of the London Stock Exchange.
Restructuring completion
On 9 February 2023, the Restructuring was
implemented on the key terms as agreed under
the LUA, and pursuant to the terms of the Scheme
sanctioned by the Court on 26 August 2022. This
led to the sub-division and consolidation of the
Company's share capital, which resulted in a
reduction of shares from approximately 1,693.8
million to 169.4 million following a 10:1
consolidation. By 10 February 2023, 150,563,304
new shares were listed on the London Stock
Exchange (ticker symbol NOG.L), and by 13
February, also on the Astana International
Exchange. The new notes and warrants were listed
on The International Stock Exchange from 9
February 2023, while no new securities were listed
on Euronext Dublin. On 14 March 2023, the
Company’s ordinary shares were delisted from the
official list of the Kazakhstan Stock Exchange
(KASE) . (
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL REPORT
REGULATORY INFORMATION
ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2024
143
| Company | Registered office | Form of capital | Owner- ship, % |
| Nostrum Associated Investments LLP | 43B Karev street,090000 Uralsk,Republic of Kazakhstan | Participator y interests | 100 |
| Nostrum Oil & Gas | Bloemendaalseweg 139, 2061 CH | Members' interests | 100 |
| Coöperatief U.A. | Bloemendaal,The Netherlands | ||
| Nostrum Oil & Gas B.V. | Bloemendaalseweg 139, 2061 CH | Ordinary shares | 100 |
| Bloemendaal,The Netherlands | |||
| Nostrum Oil & Gas Finance B.V. | Bloemendaalseweg 139, 2061 CH Bloemendaal,The Netherlands | Ordinary shares | 100 |
| Nostrum Oil & Gas Holding Ltd. | 20 Eastbourne Terrace,London, W2 6LA,United Kingdom | Ordinary shares | 100 |
| Nostrum Services Central Asia LLP | Aksai 3a, 75/38, 050031 Almaty, Republic of Kazakhstan | Participator y interests | 100 |
| Nostrum Services N.V. Positiv Invest LLP | Chaussee de Wavre 20,1360 Perwez, Belgium Dostyk 310/15, Almaty,Republic of Kazakhstan | Ordinary shares Participator y interests | 100 80 |
| Zhaikmunai LLP 43/1 Karev street,090000 Uralsk,Republic of Kazakhstan | Participator y interests | 100 |
Notes to the consolidated financial statements
continued
CONSOLIDATED FINANCIAL STATEMENTS
2.
Basis of preparation and consolidation
Basis of preparation
These consolidated financial statements for the
year ended 31 December 2024 have been
prepared in accordance with the UK adopted
International Accounting Standards and those
parts of the Companies Act 2006 that are relevant
to companies which report in accordance with UK
adopted IFRS. The consolidated financial
statements have been prepared based on a
historical cost basis (Note 4).
The consolidated financial statements are
presented in US dollars and all values are rounded
to the nearest thousand, except when otherwise
indicated. The preparation of consolidated
financial statements in conformity with IFRS
requires the use of certain critical accounting
estimates. It also requires from management to
exercise its judgment in the process of applying
the Group's accounting policies. The areas
involving a higher degree of judgment or
complexity, or areas where assumptions and
estimates are significant to the consolidated
financial statements are disclosed in Note 4. The
Group recognises that there may be potential
financial implications in the future from changes in
legislation and regulation implemented to address
climate change risk. Over time these changes may
have an impact across a number of areas of
accounting including asset impairment, increased
costs, provisions, onerous contracts and
contingent liabilities. However, as at the reporting
date, the Group believes there is no material
impact on the balance sheet carrying values of
assets or liabilities. This is not considered a
significant estimate.
Basis of consolidation
The consolidated financial statements comprise
the financial statements of the Parent and its
subsidiaries as at 31 December 2024. Control is
achieved when the Group is exposed, or has rights,
to variable returns from its involvement with the
investee and has the ability to affect those returns
through its power over the investee. Specifically,
the Group controls an investee if, and only if, the
Group has:
• power over the investee (i.e., existing rights that
give it the current ability to direct the relevant
activities of the investee);
• exposure, or rights, to variable returns from its
involvement with the investee;
• the ability to use its power over the investee to
affect its returns.
Generally, there is a presumption that a majority
of voting rights results in control. To support this
presumption and when the Group has less than a
majority of the voting or similar rights of an
investee, the Group considers all relevant facts
and circumstances in assessing whether it has
power over an investee, including:
• the contractual arrangement with the other
vote holders of the investee;
• rights arising from other contractual
arrangements;
• the Group’s voting rights and potential voting
rights.
• The Group re-assesses whether or not it
controls an investee if facts and circumstances
indicate that there are changes to one or more
of the three elements of control. Consolidation
of a subsidiary begins when the Group obtains
control over the subsidiary and ceases when
the Group loses control of the subsidiary.
Assets, liabilities, income and expenses of a
subsidiary acquired or disposed of during the
year are included in the consolidated financial
statements from the date the Group gains
control until the date the Group ceases to
control the subsidiary.
Going concern
The Group monitors on an ongoing basis its
liquidity position, near-term forecasts, and key
financial ratios to ensure that sufficient funds are
available to meet its commitments as they arise
and liabilities as they fall due. The Group
reforecasts its rolling 3-year cashflows on a
quarterly basis and stress tests its future liquidity
position for changes in product prices, production
volumes, costs and other significant events.
The Directors are focused on a range of potential
opportunities and actions aimed at improving the
liquidity outlook in the near-term and creating
value from long-term growth catalysts. These
actions include, amongst other things, the ongoing
base case scenario efforts to further optimize
capital expenditures, operating costs and general
and administration cost, improving netbacks
realized from product sales, and increasing
utilisation of the Group’s processing infrastructure.
The Directors’ going concern assessment is
supported by the future cash flow forecasts for the
going concern period to 30 April 2026. The Group
had unrestricted cash balances of US$150.4
million as at 31 December 2024, (including liquid
current investments of US$82 million), and
US$16.8 million in the DSRA. The base case going
concern assessment reflects production forecasts
consistent with the Board approved plans and
assumes a flat Brent oil price of US$70/bbl. Under
the base case going concern assessment for the
period to 30 April 2026, the Group forecasts to
have a closing cash balance of over US$117
million, including over US$18.3 million in the
DSRA.
The base case scenario assumes commencement
of the capital expenditures required for
development of the Stepnoy Leopard fields. The
base case scenario has also been tested for
sensitivity against the key assumptions over the
period of assessment, including US$10/boe
reduction in Brent prices, 10% reduction in
forecast production and third-party processing
volumes, 10% increase in operating and G&A
costs, addition of contingent capital expenditures
and possible fines and penalties in the event of
any non-compliance issues. As a result of such
sensitivity analysis, the Directors concluded that
the Group would be financially capable of
withstanding downside volatility of these key
assumptions individually or in aggregate.
After careful consideration, the Directors have a
reasonable expectation that the Group and the
Company have sufficient financial resources to
continue in operation for the going concern period
to 30 April 2026.
Notwithstanding that the going concern period
has been defined as the period to 30 April 2026,
the Directors have also considered events and
conditions beyond the going concern period of
assessment which may cast doubt on the Group’s
ability to continue as a going concern. The
Directors draw attention to the Viability Statement
on pages 43-44 of the 2024 Annual Report which
highlights the potential necessity in the future for
a partial or full restructuring of the Group’s SSNs
and SUNs (together “the Notes”).
In forming an assessment of the Group’s ability to
continue as a going concern post 30 April 2026,
the Board has considered the fact that the Notes
are due to mature on 30 June 2026 and has made
a material assumption about the Group’s ability to
successfully restructure the Notes.
As at the date of publication of these consolidated
financial statements, although the Directors
believe, to the best of their knowledge, that the
Notes could be successfully restructured, the
ability to restructure and the precise timing and
terms of such restructuring of the Notes represent
a material uncertainty about the Company’s ability
to continue as a going concern and to realise its
assets and discharge its liabilities in the normal
course of business beyond the assessment period
ending 30 April 2026.
In accordance with provision 30 of the UK
Corporate Governance Code 2018, the Directors
consider it appropriate to adopt the going concern
basis of accounting in preparing the consolidated
financial statements. If the Group is unable to
successfully restructure or extend the maturity of
the Notes and continue to realise assets and
discharge liabilities in the normal course of
business, it would be necessary to adjust the
amounts in the statement of financial position in
the future to reflect these circumstances, which
may materially change the measurement and
classification of certain figures contained in these
consolidated financial statements.
144 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
CONSOLIDATED FINANCIAL STATEMENTS
144 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Notes to the consolidated financial statements
continued
CONSOLIDATED FINANCIAL STATEMENTS
4.
Summary of material accounting policies
Exploration expenditure
Costs directly associated with the aquisition of
Positiv Invest LLP and the subsequent well
appraisal costs are capitalised within exploration
and evaluation assets until the reserves appraisal
phase is completed and the commercial viability of
field development has been proven.
These costs include employee remuneration,
materials, fuel used, rig costs, payments made to
contractors, and asset retirement obligation fees.
If hydrocarbons are discovered and, subject to
further appraisal activity (e.g., the drilling of
additional wells), it is probable that they can be
commercially developed, the costs continue to be
carried as an asset while sufficient/continued
progress is made in assessing the commerciality of
the hydrocarbons.
All such carried costs are subject to technical,
commercial and management review at least once
a year to confirm the continued intent to develop
or otherwise extract value from the discovery,
which is subject to estimation uncertainties. When
this is no longer the case, the costs are written off.
Subsoil use rights acquisition costs are initially
capitalised in exploration and evaluation assets.
Subsoil use rights acquisition costs are reviewed at
each reporting date to confirm that there is no
indication that the carrying amount exceeds the
recoverable amount. This review includes
confirming that exploration drilling is still under
way or firmly planned, or that it has been
determined, or work is under way to determine
that the discovery is economically viable based on
a range of technical and commercial
considerations and sufficient progress is being
made on establishing development plans and
timing. If no future activity is planned or the
subsoil use rights have been relinquished or have
expired, the carrying value of the subsoil use rights
acquisition costs is written off through profit or
loss.
Significant accounting judgment: asset purchase
and fair value of non-controlling interest
The Management used judgment when
considering the purchase of Positiv Invest LLP on
17 July 2023, as an asset acquisition rather than a
business acquisition and applied related
accounting treatment when preparing the
consolidated financial statements for the year
ended 31 December 2023. Management applied
the concentration test, introduced within IFRS 3,
which offers a simplifying procedure to ascertain if
an acquisition is of a business or merely assets. If a
substantial majority of the fair value of the gross
assets acquired is concentrated in a single
identifiable asset or group of similar assets, then
the set isn't deemed a business. Taking into
account that the most significant assets of the
Positiv Invest LLP are the licenses to the Stepnoy
Leopard’s fields, which are geographically co-
located, and most of the balance sheet items are
attributable to these fields, the management
concluded that transactions represents an asset
purchase rather than a business combination. The
difference between the purchase price of $19.3
million and the net book value of the assets and
liabilities acquired was considered as the price paid
for the subsoil use license for development and
production at the Stepnoy Leopard Fields. This
distinction ensures proper allocation of the
purchase price and reflects the underlying value
attributed to exploration and valuation assets
within the transaction. In addition, the fair value of
the minority interest representing 20% ownership
retained by the previous partners of Positiv Invest
LLP was recognized at the proportion of the net
assets of Positiv Invest at the transaction date.
Management believes that this recognition aligns
with the principle of reflecting the true economic
value of the minority interest within the financial
statements.
For more detailed information regarding
exploration and evaluation assets, please see
Note 6 in the financial statements.
Property, plant and equipment
Oil and gas properties
Expenditure on the construction, installation or
completion of infrastructure facilities such as
treatment facilities, pipelines and the drilling of
development wells, is capitalised within property,
plant and equipment as oil and gas properties. The
initial cost of an asset comprises of its purchase price
or construction cost, any costs directly attributable to
bringing the asset into operation and the initial
estimate of decommissioning obligations, if any.
The purchase price or construction cost is the
aggregate amount paid and the fair value of any
other consideration given to acquire the asset. When
a development project moves into the production
stage, the capitalisation of certain
construction/development costs ceases, and costs
are either regarded as part of the cost of inventory or
expensed, except for costs which qualify for
capitalisation relating to oil and gas property asset
additions, improvements or new developments.
All capitalised costs of oil and gas properties are
depleted using the unit-of-production method based
on estimated proved developed reserves of the field,
except the Group depreciates its oil pipeline and oil
loading terminal on a straight-line basis over the life
of the relevant subsoil use rights. In the case of
assets that have a useful life shorter than the lifetime
of the field the straight-line method is applied.
Assets in development
Expenditure is transferred from “exploration and
evaluation assets” to “assets in development” which
is a subcategory of “oil and gas properties” once the
work completed to date supports the future
development of the asset and such development
receives appropriate approvals.
After transfer of the exploration and evaluation
assets, all subsequent expenditure on the
construction, installation or completion of
infrastructure facilities such as pipelines and the
drilling of development wells, including unsuccessful
development or delineation wells, is capitalised
within “assets in development”.
When a development project moves into the
production stage, all assets included in “assets in
development” are then transferred to “producing
assets” which is also a sub-category of “oil and gas
properties”. The capitalisation of certain construction
/ development costs ceases, and costs are either
regarded as part of the cost of inventory or
expensed, except for costs which qualify for
capitalisation relating to “oil and gas properties”
asset additions, improvements or new
developments.
Significant accounting judgment: transfer of
expenditures from exploration and evaluation
assets to assets in development
Management used judgment when considering the
transfer of exploration and evaluation assets
associated with Stepnoy Leopard Ffields to assets in
the development category within oil & gas assets.
When making concludingsion on such a transfer of
assets, the management considered the following
factors in line with accounting policies and IFRS
requirements:
• • Technical Feasibility and Future Economic Benefits
- this is based on the Competent Person's Report
of the Stepnoy Leopard Fields (the "SL CPR"), an
independent third-party evaluation of the reserves
and resources as at 1 January 2024. The report
was released in July 2024 and confirmed 138
mmboe of proved plus probable (2P) gross
reserves and US$220 million of after-tax net
NPV10 at 34% IRR. The SL CPR provides evidence
that the exploration and appraisal activities have
identified reserves that are technically feasible and
commercially viable for extraction, and it is
probable that future economic benefits associated
with the asset will flow to the entity.
• • Intention to Develop and Availability of Funding -
prior to the SL CPR, in March 2024, the Group
made a final investment decision (the "FID") for
the initial field development phase of the Stepnoy
Leopard Fields. The FID provides evidence for the
approvals and intention to proceed with the
development of the identified reserves and there
is a reasonable expectation that the necessary
funding to develop the reserves will be available.
146 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
CONSOLIDATED FINANCIAL STATEMENTS
146 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
| follows: | Years |
| Buildings and constructions | 7-50 |
| Vehicles | 8 |
| Machinery and equipment | 3-13 |
| Other | 3-10 |
Notes to the consolidated financial statements
continued
CONSOLIDATED FINANCIAL STATEMENTS
Significant accounting judgment: identification of cash-generating unit
Judgement is required to identify cash-generating units for the purpose of
testing the assets for impairment. Management has determined that a single
cash-generating unit within the Group’s non-current assets consists of all
Group’s assets related to its Chinarevskoye field and facilities. This is mainly
based on the fact that hydrocarbons extracted from the Chinarevskoye field are
processed and passed through a combination of various facilities.
Significant estimates and assumptions: impairment of property, plant and
equipment, exploration and evaluation assets
Determination as to whether, and by how much, the CGU is impaired involves
management’s best estimates on highly uncertain matters such as future
commodity prices, operating expenses and capital expenditures estimates,
discount rate, fiscal regimes, proved and probable reserves, contingent
resources and respective future production profiles.
Based on the management assessment the recoverable amount was
determined by the fair value less costs of disposal (FVLCD) of the CGU, which
was higher than its value-in-use. FVLCD was based on the discounted cash flow
model as no recent third-party transactions existed on which a reliable market-
based fair value could be established.
The discounted cash flow model takes into consideration cash flows, which are
expected to arise until 2031, i.e. during the licence term of the Chinarevskoye
field, and is considered a level 3 valuation under the fair value hierarchy,
because the valuation methods is represented by discounted cash flow model
using mix of observable and unobservable inputs. The period exceeding five
years is believed to be appropriate based on the proved and probable reserves
audited by independent engineers. The model also takes into account risked -
value cash flows from contingent resources on the basis a market participant
would place value on these resources.
The key assumptions used in the Group’s discounted cash flow model reflecting
past experiencehistoric data and taking into account external factors are subject
to periodic review. These assumptions are:
• Oil prices (in real terms): US$70/bbl throughout 2025-2031 (2023: US$75/bbl
for 2024 and US$70/bbl throughout 2025-2031);
• Proved and probable hydrocarbon reserves as well as production profiles
based on Group’s internal estimates prepared by management;
• All cash flows are projected in real terms on the basis of stable prices;
• Cost profiles for the development of the fields and subsequent operating
costs consistent with reserves estimates and production profiles; and
• Ural O&G processing – new terms under extended the processing agreement
until 2031
• Stepnoy Leopard fields – risk-weighted value consistent with the CPR
valuation;
• Gas treatment unit (GTU) spare capacity utilisation – risk-weighted option
value from processing fee structure consistent with Ural O&G processing
agreement;
• Post-tax discount rate of 10.53%, estimated to be equivalent to pre-tax
discount rate of 15.1% (2023: 10.3% and 14.0%, respectively).
The impairment testing carried out by the Group has resulted in the recoverable
amount exceeding the carrying amount of the Group’s property, plant and
equipment as at 31 December 2024. This was primarily due to an combination
of additional value from the extension of Ural O&G processing agreement and
Stepnoy Leopard opportunity. Consequently, the Group recognised a reversal of
the previously recorded impairment in the amount of US$86,668 thousand for
the year ended 31 December 2024.
The impairment testing carried out by the Group asat 31 December 2023 has
resulted in the recoverable amount approximating the carrying amount of the
Group’s property, plant and equipment as at 31 December 2023. Hence no
impairment charge or reversal was recognised.
As at 31 December 2020, the Group recorded an impairment charge on oil and
gas assets in the amount of US$286,569 thousand (restated), in addition to the
US$1,301,640 thousand and US$150,000 thousand impairment charges
recognised in 2019 and 2018, respectively. A reversal of US$74,186 thousand
was recognised in 2021.
The impairment reversal as at 31 December 2024 has been allocated as follows:
More detailed information on carrying values of oil and gas properties and
related depreciation, depletion, amortisation and impairment are shown in
Note 5.
The following table summarizes sensitivity of the recoverable amount and
respective potential impairment charges that would result from changes in the
key assumptions:
On the other hand, certain positive development like successful mitigation of
reservoir risks in the future and respective changes in the drilling plans and
results, with the relevant increase in 2P reserves, or increase in utilisation of the
Group’s processing facilities, could have the effect of reversing the impairment.
Any reversal would be limited so that the carrying amount of the CGU does not
exceed the lower of its recoverable amount, or the carrying amount that would
have been determined, net of depreciation, had no impairment charge been
recognised for the CGU in prior years.
Leases
The Group applies a single recognition and
measurement approach for all leases, except for
short-term leases and leases of low-value assets.
The Group recognises lease liabilities to make lease
payments and right-of-use assets representing the
right to use the underlying assets.
Right-of-use assets
The Group recognises right-of-use assets at the
commencement date of the lease (i.e., the date the
underlying asset is available for use). Right-of-use
assets are measured at cost, less any accumulated
depreciation and impairment losses, and adjusted
for any remeasurement of lease liabilities. The cost
of right-of-use assets includes the amount of lease
liabilities recognised, initial direct costs incurred,
and lease payments made at or before the
commencement date less any lease incentives
received. Unless the Group is reasonably certain to
obtain ownership of the leased asset at the end of
the lease term, the recognised right-of-use assets
are depreciated on a straight-line basis over the
shorter of its estimated useful life and the lease
term. Right-of-use assets are subject to impairment.
Lease liabilities
At the commencement date of the lease, the Group
recognises lease liabilities measured at the present
value of lease payments to be made over the lease
term. The lease payments include fixed payments
(including in substance fixed payments) less any
lease incentives receivable, variable lease payments
that depend on an index or a rate, and amounts
expected to be paid under residual value
guarantees. The lease payments also include the
exercise price of a purchase option reasonably
certain to be exercised by the Group and payments
of penalties for terminating a lease, if the lease term
reflects the Group exercising the option to
terminate.
Variable lease payments that do not depend on an
index or a rate are recognised as expense in the
period on which the event or condition that triggers
the payment occurs.
148 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
CONSOLIDATED FINANCIAL STATEMENTS
| In thousands of US Dollars | 31 December 2024 |
| Working oil and gas assets | 62,628 |
| Construction in progress | 21,740 |
| Other property, plant and equipment | 2,300 |
| Total impairment reversal | 86,668 |
| Key assumption | Change | Sensitivity (US$) |
| Oil price decrease by | $10/bbl | 40,475 |
| Reserves downgrade by | 10.0% | 39,335 |
| Post-tax discount rate increase by | 4.0% | 45,877 |
| Operating costs increase by | 10.0% | 5,850 |
148 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Notes to the consolidated financial statements
continued
CONSOLIDATED FINANCIAL STATEMENTSDeferred income tax is provided on temporary
differences arising on investments in subsidiaries,
except where the timing of the reversal of the
temporary difference can be controlled and it is
probable that the temporary difference will not
reverse in the foreseeable future.
Deferred tax assets and deferred tax liabilities are
offset if a legally enforceable right exists to set off
current tax assets against current tax liabilities and
the deferred taxes relate to the same taxable entity
and the same taxation authority.
For more detailed information in current and
deferred income tax disclosure as at 31 December
2024 and 2023, please see Notes 27 and 30.
Significant accounting judgment: taxation
Kazakhstan’s tax legislation and regulations are
subject to ongoing changes and varying
interpretations. Instances of inconsistent opinions
between local, regional and national tax authorities
are not unusual. Because of the uncertainties
associated with Kazakhstan’s tax system, the
ultimate amount of taxes, penalties and interest, if
any, may be in excess of the amount expensed to
date and accrued at 31 December 2024.
The Group is regularly subject to tax audits and
engages in ongoing discussions with tax authorities
to agree on tax computations. Whilst the ultimate
outcome of such tax audits and discussions cannot
be determined with certainty, and hence requires
management judgement, the level of provisions are
estimated by management as required for taxes for
which it is considered probable will be payable,
based on professional advice and consideration of
the nature of current discussions with the tax
authority.
As at 31 December 2024 management believes that
its interpretation of the relevant legislation is
appropriate and that it is probable that the Group’s
tax position will be sustained. To the extent that
actual outcomes differ from management’s
estimates, income tax charges or credits, and
changes in current and deferred tax assets or
liabilities, may arise in future periods. For more
information, see Notes 27 and 30.
Foreign currency translation
The functional currency is the currency of the
primary economic environment in which an entity
operates and is normally the currency in which the
entity primarily generates and expends cash.
The functional currency of the Company is the
United States dollar (the “US dollar” or “US$”). The
functional currencies of the Group’s subsidiaries are
as follows:
Transactions in foreign currencies are initially
recorded by the Group’s subsidiaries at their
respective functional currency spot rates at the date
the transaction first qualifies for recognition.
Monetary assets and liabilities denominated in
foreign currencies are translated at the functional
currency spot rates of exchange at the reporting
date. All differences are taken to the profit or loss.
Non-monetary items that are measured in terms of
historical cost in a foreign currency are translated
using the exchange rates as at the dates of the initial
transactions. Non-monetary items measured at fair
value in a foreign currency are translated using the
exchange rates at the date when the fair value is
determined.
In the consolidated financial statements, the assets
and liabilities of non-US dollar functional currency
subsidiaries are translated into US dollars at the spot
exchange rate on the balance sheet date. The
results and cash flows of non-US dollar functional
currency subsidiaries are translated into US dollars
using average rates of exchange, and resulting
exchange differences are accumulated foreign
currency translation reserve within equity, and are
reclassified to the profit or loss on the disposal of
the subsidiary. In the consolidated financial
statements, exchange adjustments arising when the
opening net assets and the profits for the year
retained by non-US dollar functional currency
subsidiaries are translated into US dollars are
reported in the other comprehensive income.
Borrowing costs
The Group capitalises borrowing costs on qualifying
assets. Assets qualifying for borrowing costs
capitalisation include all assets under construction
that are not being depreciated, depleted, or
amortised, provided that work is in progress at that
time. Qualifying assets mostly include wells and
other operations field infrastructure under
construction. Capitalised borrowing costs are
calculated by applying the capitalisation rate to the
expenditures on qualifying assets. The capitalisation
rate is the weighted average of the borrowing costs
applicable to the Group’s borrowings that are
outstanding during the period. All other borrowing
costs are recognised in the profit or loss in the
period in which they are incurred.
For more detailed information in relation to
capitalisation of borrowing costs, please refer to
Note 5.
Advances for non-current assets
Advances paid for capital investments/acquisition of
non-current assets are qualified as advances for
non-current assets regardless of the period of
supplies of relevant assets or the supply of work or
services to close advances. Advances paid for the
purchase of non-current assets are recognised by
the Group as non-current assets and are not
discounted.
For more detailed information in relation to
advances for non-current assets, please refer to
Note 7.
Inventories
Inventories are stated at the lower of cost or net
realisable value (“NRV”). Cost of oil, gas condensate
and liquefied petroleum gas (“LPG”) is determined
on the weighted-average method based on the
production cost including the relevant expenses on
depreciation, depletion and impairment and
overhead costs based on production volume. Net
realisable value is the estimated selling price in the
ordinary course of business, less selling expenses.
For more information in relation to the breakdown
of inventories as at 31 December 2024 and 2023,
please see Note 8.
Other current liabilities
The Group makes accruals for liabilities related to
the underperformance and/or adjustments of work
programs under subsoil use agreements (SUA) on a
regular basis. When evaluating the adequacy of an
accrual, management bases its estimates on the
latest work program included in the SUA, and
relevant signed supplements and potential future
changes in payment terms (including the currency in
which these liabilities are to be settled).
Future changes in the work programs may require
adjustments to the accrual recorded in the
consolidated financial statements .
150 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
CONSOLIDATED FINANCIAL STATEMENTS
| Company | Functional currency |
| Nostrum Associated Investments LLP | Tenge |
| Nostrum Oil & Gas Coöperatief U.A. | US dollar |
| Nostrum Oil & Gas BV | US dollar |
| Nostrum Oil & Gas Finance BV | US dollar |
| Nostrum Oil & Gas Holding Ltd | US dollar |
| Nostrum Oil & Gas UK Ltd. | British Pound |
| Nostrum Services Central Asia LLP | Tenge |
| Nostrum Services N.V. | Euro |
| Zhaikmunai LLP | US dollar |
150 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Notes to the consolidated financial statements
continued
CONSOLIDATED FINANCIAL STATEMENTSFinancial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition,
as subsequently measured at amortised cost and
fair value through profit or loss. The Group
determines the classification of its financial assets at
initial recognition.
The classification of financial assets at initial
recognition depends on the financial asset’s
contractual cash flow characteristics and the
Group’s business model for managing them. With
the exception of trade receivables that do not
contain a significant financing component or for
which the Group has applied the practical
expedient, the Group initially measures a financial
asset at its fair value plus, in the case of a financial
asset not at fair value through profit or loss,
transaction costs. Trade receivables that do not
contain a significant financing component or for
which the Group has applied the practical expedient
are measured at the transaction price determined
under IFRS 15.
In order for a financial asset to be classified and
measured at amortised cost or fair value through
OCI, it needs to give rise to cash flows that are
‘solely payments of principal and interest (SPPI)’ on
the principal amount outstanding. This assessment
is referred to as the SPPI test and is performed at an
instrument level.
The Group’s business model for managing financial
assets refers to how it manages its financial assets in
order to generate cash flows. The business model
determines whether cash flows will result from
collecting contractual cash flows, selling the financial
assets, or both.
Purchases or sales of financial assets that require
delivery of assets within a time frame established by
regulation or convention in the market place
(regular way trades) are recognised on the trade
date, i.e., the date that the Group commits to
purchase or sell the asset.
Subsequent measurement
For purposes of subsequent measurement, financial
assets are classified in four categories:
• Financial assets at amortised cost (debt
instruments);
• Financial assets at fair value through OCI with
recycling of cumulative gains and losses (debt
instruments);
• Financial assets designated at fair value through
OCI with no recycling of cumulative gains and
losses upon derecognition;
• Financial assets at fair value through profit or
loss.
Financial assets at amortised cost (debt
instruments)
This category is the most relevant to the Group. The
Group measures financial assets at amortised cost if
both of the following conditions are met:
• The financial asset is held within a business
model with the objective to hold financial assets
in order to collect contractual cash flows, and
• The contractual terms of the financial asset give
rise on specified dates to cash flows that are
solely payments of principal and interest on the
principal amount outstanding.
Financial assets at amortised cost are subsequently
measured using the effective interest (EIR) method
and are subject to impairment. Gains and losses are
recognised in profit or loss when the asset is
derecognised, modified or impaired.
The Group’s financial assets at amortised cost
include cash, long-term and short-term deposits,
trade and other receivables .
Derecognition
A financial asset (or, where applicable, a part of a
financial asset or part of a group of similar financial
assets) is primarily derecognised (i.e., removed from
the Group’s consolidated statement of financial
position) when:
• The rights to receive cash flows from the asset
have expired; or
• The Group has transferred its rights to receive
cash flows from the asset or has assumed an
obligation to pay the received cash flows in full
without material delay to a third party under a
‘pass-through’ arrangement; and either (a) the
Group has transferred substantially all the risks
and rewards of the asset, or (b) the Group has
neither transferred nor retained substantially all
the risks and rewards of the asset, but has
transferred control of the asset.
When the Group has transferred its rights to receive
cash flows from an asset or has entered into a pass-
through arrangement, it evaluates if, and to what
extent, it has retained the risks and rewards of
ownership. When it has neither transferred nor
retained substantially all of the risks and rewards of
the asset, nor transferred control of the asset, the
Group continues to recognise the transferred asset
to the extent of its continuing involvement. In that
case, the Group also recognises an associated
liability. The transferred asset and the associated
liability are measured on a basis that reflects the
rights and obligations that the Group has retained.
Impairment of financial assets
The Group recognises an allowance for expected
credit losses (ECLs) for all debt instruments not held
at fair value through profit or loss. ECLs are based on
the difference between the contractual cash flows
due in accordance with the contract and all thecash
flows that the Group expects to receive, discounted
at an approximation of the original effective interest
rate. The expected cash flows will include cash flows
from the sale of collateral held or other credit
enhancements that are integral to the contractual
terms.
For trade receivables and contract assets, the Group
applies a simplified approach in calculating ECLs.
Therefore, the Group does not track changes in
credit risk, but instead recognises a loss allowance
based on lifetime ECLs at each reporting date.
152 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
CONSOLIDATED FINANCIAL STATEMENTS
152 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Notes to the consolidated financial statements
continued
CONSOLIDATED FINANCIAL STATEMENTS
5. Property, plant and equipment
As at 31 December 2024 and 31 December 2023 property, plant and equipment
comprised the following:
Oil and gas properties
The category “Oil and gas properties” represents mainly wells, oil and gas
treatment facilities, oil transportation and other related assets. The movement of
oil and gas properties for the years ended 31 December 2024 and 2023 was as
follows:
* Balances, net of accumulated depreciation, depletion and impairment
** Accumulated depreciation, depletion and impairment
The category “Construction in progress” is represented by employee
remuneration, materials and fuel used, rig costs, payments made to contractors,
and asset retirement obligation fees directly associated with development of wells
until the drilling of the well is complete and results have been evaluated.
The category “Assets in development” represents exploration and evaluation
assets associated with Stepnoy Leopard fields (see Note 3).
The depletion rate for oil and gas working assets was 22.79% and 21.52% in 2024
and 2023, respectively. In 2024, the Group applied consistent approach in the
estimation of oil & gas reserves adopting the same methodology with previous
periods, however, the Group decided not to engage independent reserve
auditors taking into account immaterial changes in the reserves estimates, which
were in line with expectations (see pages 30-31 of the Annual Report).
The change in the discount rate used to determine the abandonment and site
restoration provision (Note 15) in the year ended 31 December 2024 resulted in
the increase of the oil and gas properties by US$ 4,191 thousand (31 December
2023: an increase of US$630 thousand).
The Group incurred borrowing costs including amortisation of arrangement fees.
Capitalisation rate and capitalised borrowing costs were as follows as at 31
December 2024 and 31 December 2023:
Other property, plant and equipment
* Balances, net of accumulated depreciation, amortisation and impairment
** Accumulated depreciation, amortisation and impairment
CONSOLIDATED FINANCIAL STATEMENTS
| 31 December | 31 December | |
| In thousands of US Dollars Oil and gas proper_es | 2024 363,002 | 2023 245,346 |
| Other property, plant and equipment | 9,881 | 7,275 |
| 372,883 | 252,621 |
| In thousands of US Dollars | Working assets | Construc6 on in progress | Assets in develop- ment | Total |
| Balance at 1 January 2023, net* | 215,544 | 53,446 | – | 268,990 |
| Addi$ons | 727 | 17,217 | – | 17,944 |
| Transfers | 18,466 | (18,433) | – | 33 |
| Disposals | (5,555) | (917) | – | (6,472) |
| Disposals deprecia$on | 4,464 | – | – | 4,464 |
| Deprecia$on and deple$on charge | (39,606) | – | – | (39,606) |
| Impairment transfer | (2,801) | 2,794 | – | (7) |
| Balance at 31 December 2023,net* | 191,239 | 54,107 | – | 245,346 |
| Addi$ons | 4,296 | 27,644 | 2,485 | 34,425 |
| Transfers from explora$on and evalua$on assets | – | – | 26,155 | 26,155 |
| Transfers | 18,893 | (18,367) | – | 526 |
| Disposals | (3,039) | (918) | – | (3,957) |
| Disposals deprecia$on | 2,647 | – | – | 2,647 |
| Deprecia$on and deple$on charge | (25,045) | – | – | (25,045) |
| Impairment reversal | 62,628 | 21,740 | – | 84,368 |
| Impairment transfer | (2,303) | 2,303 | – | – |
| Transla$on difference | – | – | (1,463) | (1,463) |
| Balance at 31 December 2024,net* | 249,316 | 86,509 | 27,177 | 363,002 |
| As at 31 December 2022 | ||||
| Cost | 2,970,783 | 100,019 | – | 3,070,802 |
| Accumulated deprecia$on** | (2,755,239) | (46,573) | – | (2,801,812) |
| Balance* | 215,544 | 53,446 | – | 268,990 |
| As at 31 December 2023 | ||||
| Cost | 2,984,421 | 97,886 | – | 3,082,307 |
| Accumulated deprecia$on | (2,793,182) | (43,779) | – | (2,836,961) |
| Balance | 191,239 | 54,107 | – | 245,346 |
| As at 31 December 2024 | ||||
| Cost | 3,004,571 | 106,245 | 27,177 | 3,137,993 |
| Accumulated deprecia$on** | (2,755,255) | (19,736) | – | (2,774,991) |
| Balance* | 249,316 | 86,509 | 27,177 | 363,002 |
| In thousands of US Dollars | 31 December 2024 | 31 December 2023 |
| Borrowing costs including amor_sa_on of arrangement fee | 116,111 | 96,730 |
| Capitalisa_on rate | 5.78% | 8.44% |
| Capitalised borrowing costs | 1,720 | 1,504 |
| In thousands of US Dollars | Buildings | Machinery & equipment | Vehicles | Others | Total |
| Balance at 1 January 2023 | 1,929 | 2,606 | 33 | 2,465 | 7,033 |
| AddiTons | 47 | 1,154 | 1,201 | ||
| Transfers | (5) | 83 | (111) | (33) | |
| Disposals | (551) | (189) | (740) | ||
| Disposals depreciaTon | 548 | 169 | 717 | ||
| DepreciaTon | (213) | (263) | (3) | (424) | (903) |
| Impairment transfer | – | ||||
| Balance at 31 December 2023 | 1,711 | 2,470 | 30 | 3,064 | 7,275 |
| AddiTons | – | 562 | 22 | 510 | 1,094 |
| Transfers | 48 | 157 | – | (731) | (526) |
| Disposals | (1) | (98) | – | (139) | (238) |
| Disposals depreciaTon | – | 94 | – | 97 | 192 |
| DepreciaTon | (215) | (149) | (12) | (262) | (638) |
| Impairment reversal | 541 | 781 | 9 | 969 | 2,299 |
| Transfers from | |||||
| exploraTon and | – | – | – | 423 | 423 |
| evaluaTon assets Impairment transfer Balance at 31 December 2024 | (23) 2,061 | – 3,817 | – 49 | 23 3,954 | – 9,881 |
| As at 31 December 2022 | |||||
| Cost | 49,498 | 22,317 | 1,505 | 18,010 | 91,330 |
| Accumulated depreciaTon** | (47,569) | (19,711) | (1,472) | (15,545) | (84,297) |
| Balance* | 1,929 | 2,606 | 33 | 2,465 | 7,033 |
| As at 31 December 2023 | |||||
| Cost | 49,493 | 21,896 | 1,505 | 18,864 | 91,758 |
| Accumulated depreciaTon** | (47,782) | (19,426) | (1,475) | (15,800) | (84,483) |
| Balance* | 1,711 | 2,470 | 30 | 3,064 | 7,275 |
| As at 31 December 2024 | |||||
| Cost | 49,540 | 22,517 | 1,527 | 18,927 | 92,511 |
| Accumulated depreciaTon** | (47,479) | (18,700) | (1,478) | (14,973) | (82,630) |
| Balance* | 2,061 | 3,817 | 49 | 3,954 | 9,881 |
| In thousands of US Dollars | |
| Balance at 1 January 2023 | – |
| Net purchase considera_on on acquisi_on of Posi_v Invest LLP | 17,330 |
| Expenditures on Explora_on and evalua_on assets subsequent to acquisi_on | 5,045 |
| Explora_on and evalua_on assets on the date of acquisi_on | 1,560 |
| Balance at 31 December 2023 Addi_ons | 23,935 2,643 |
| Transfers to Assets in Development and working assets | (26,578) |
| Balance at 31 December 2024 | – |
| comprised the following: In thousands of US Dollars | 31 December 2024 | 31 December 2023 |
| Advances for construc_on materials | 2,991 | 6 |
| VAT receivable | 1,115 | – |
| Advances for construc_on services | 193 | 790 |
| Advances for other non-current assets | 89 | 322 |
| 4,388 | 1,118 |
| In thousands of US Dollars | 31 December 2024 | 31 December 2023 |
| Spare parts and other inventories | 28,182 | 27,067 |
| Gas condensate | 1,381 | 1,072 |
| Crude oil | 960 | 1,217 |
| LPG | 86 | 462 |
| Dry gas | 16 | 30 |
| Sulphur | 12 | 4 |
| 30,637 | 29,852 |
| As at 31 December 2024 and 2023 other current assets comprised the following: In thousands of US Dollars | 31 December 2024 | 31 December 2023 |
| VAT receivable | 5,680 | 5,872 |
| Advances paid | 2,131 | 2,123 |
| Other taxes receivable | 974 | 1,142 |
| Interest receivable | 350 | – |
| Other | 380 | 280 |
| 9,515 | 9,417 |
| In thousands of US Dollars | 31 December 2024 | 31 December 2023 |
| Investments in Money Market Funds in US Dollars | 82,000 | – |
| Current accounts in US Dollars | 67,006 | 160,646 |
| Current accounts in Tenge | 1,215 | 395 |
| Current accounts in Euro | 125 | 66 |
| Current accounts in other currencies | 66 | 601 |
| Pecy cash | 7 | 3 |
| 150,419 | 161,711 |
Notes to the consolidated financial statements
continued
CONSOLIDATED FINANCIAL STATEMENTS12. Share capital and reserves
As at 31 December 2024 the ordinary share capital of the Parent consists of
169,381,561 issued and fully paid ordinary shares, which are listed on the London
Stock Exchange. The ordinary shares have a nominal value of GB£ 0.01. The table
below represents movements in the number of ordinary shares during the year
ended 31 December 2024. The movements in the number of shares during the
As part of the Restructuring, on 9 February 2023 the Company issued
1,505,633,046 new shares in connection with the repayment of the remaining face
value of the Existing Notes following the issue of the New Notes (see Note 14
below), together with accrued but unpaid interest (the “Debt for Equity Swap”).
Given the number of new shares issued, at the close of business on 9 February
2023 the Company also performed a share consolidation, so as to achieve an
appropriate share price following closing of the Restructuring (Note 1). As a result,
the number of ordinary shares in issue was reduced from 1,693,816,004 (following
the issue of the new shares) to 169,381,561 ordinary shares, on the basis of a 10:1
consolidation (the “Share Consolidation”). In order to give effect to the Share
Consolidation, the Company initially reduced the nominal value of the ordinary
shares (the “Sub-Division”) after the issue of the new shares, through sub-division
of each ordinary share at a ratio of 1:10 into one ordinary share of nominal value
of £0.001 each together with nine deferred shares of nominal value £0.001 each
(the “Deferred Shares”). The resulting 15,244,344,036 Deferred Shares carried no
economic or voting rights in the capital of the Company and were subsequently
aquired by the Company for nil consideration and cancelled on 2 December 2024,
and the related amount of US$18,551 was transferred to Capital redemption
reserve within Other reserves.
The nominal value of the ordinary shares following the Share Consolidation was
£0.01 each. Fractions of new ordinary shares were not issued in connection with
the Share Consolidation and any fractional entitlements were rounded down to
the nearest whole ordinary share.
In 2023, Debt for Equity swap was recorded by the Company in accordance with
the requirements of IFRS 9 Financial Instruments and IFRIC 19 Extinguishing
Financial Liabilities with Equity Instruments, i.e.:
• • Derecognition of the outstanding amount of Existing Notes (after issue of the
New Notes) as shown in the table below:
• • Recognition of the shares issued at their fair value at the time of issue of
US$42,356 thousand, which was estimated at the trading share price of
£0.2375 and converted into US dollars using the prevailing exchange rate of
1.2169 GBP/USD. Relevant adjustments were made in the nominal amount of
the share capital in accordance with the share issue, subdivision and
consolidation described above, which resulted in the following allocations
between various components of equity:
• • The difference between Existing Notes balance of US$814,181 thousand and the total equity additions of US$42,356 thousand as described above after deduction of the relevant proportion of lock-up fees of US$2,213 thousand,
amounted to US$769,611 thousand and was recognised as a separate item in
the income statement.
Treasury shares were issued to support the Group’s obligations to employees
under the Employee Share Option Plan (“ESOP”) and the Long-Term Incentive
Plan (“LTIP”) and are held by Intertrust Employee Benefit Trustee Limited as
trustee for the Nostrum Oil & Gas Benefit Trust.
The movements in the Group’s other reserves is presented as follows:
Reorganisation and resructuring reserve in the amount of US$255,688 thousand
as at 1 January 2023 represents the difference between the partnership capital,
treasury capital and additional paid-in capital of Nostrum Oil & Gas LP, the share
capital of Nostrum Oil & Gas PLC, that arose during the reorganisation of the
Group in 2014.
Capital redemption reserve represents the nominal value of the deferred shares
repurchased aquired by the Company for nil consideration and cancelled on
2 December 2024.
The share-option reserves represent the cumulative credit entry resulting from
recognition of the share based payment for unexercised options.
There were no distributions made during the year ended 31 December 2024 and
year ended 31 December 2023.
13. Earnings per share
As at 31 December 2024 the ordinary share capital of the Parent consists of
169,381,561 issued and fully paid ordinary shares, which are listed on the London
Stock Exchange. The ordinary shares have a nominal value of GB£0.01. For the
purpose of calculations of earnings per share the number of shares for the year
ended 31 December 2024:
The weighted average number of ordinary shares is 169,086,713, based on all
issued shares excluding treasury shares.
156 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
CONSOLIDATED FINANCIAL STATEMENTS
| year ended 31 December 2023 was as follows: Number of shares | In circula=on | Treasury capital | Deferred shares | Total |
| As at 1 January 2023 | 185,234,079 | 2,948,879 | – | 188,182,958 |
| Shares issued | 1,505,633,046 | – | – | 1,505,633,046 |
| Share sub-division | – | – | 15,244,344,036 | 15,244,344,036 |
| Share consolida$on | (1,521,780,412) | (2,654,031) | – | (1,524,434,443) |
| As at 31 December 2023 | 169,086,713 | 294,848 | 15,244,344,036 | 15,413,725,597 |
| Acquisi$on and cancella$on of deferred shares | – | – | (15,244,344,036) | (15,244,344,036) |
| As at 31 December 2024 | 169,086,713 | 294,848 | – | 169,381,561 |
| In thousands of US Dollars | Amount |
| 2022 Notes principal amount | 336,976 |
| 2025 Notes principal amount | 192,946 |
| 2025 Notes accrued but unpaid interest of | 195,216 |
| 2025 Notes accrued but unpaid interest of | 91,056 |
| Unamortised transaction costs | (2,013) 814,181 |
| In thousands of US Dollars | Amount |
| Net reduction in share capital | (1,051) |
| Reduction in treasury capital | 1,494 |
| Deferred shares | 18,551 |
| Share premium | 23,133 |
| Other reserves (warrants) | 229 42,356 |
| In thousands of US | Group reorgani- sa6on reserve | Capital redemp6o n reserve | Foreign currency transla6on reserves | Share- op6on reserves | Total |
| Dollars | |||||
| As at 1 January 2023 | 255,459 | – | 2,612 | 3,786 | 261,857 |
| Currency translaTon difference | – | – | 62 | – | 62 |
| Debt-to-equity exchange | 229 | – | 229 | ||
| Share based payments under LTIP | – | – | – | (25) | (25) |
| As at 31 December 2023 | 255,688 | – | 2,674 | 3,761 | 262,123 |
| Currency translaTon difference | – | – | (231) | – | (231) |
| Repurchase and cancellaTon of deferred shares | – | 18,551 | – | – | 18,551 |
| As at 31 December 2024 | 255,688 | 18,551 | 2,443 | 3,761 | 280,443 |
| For the year ended 31 December | ||
| (Loss) / earnings for the year a;ributable to the shareholders | (26,130) | 831,658 |
| Weighted average number of shares | 169,086,713 | 169,086,713 |
| Basic and diluted earnings per share (in US dollars) | (0.15) | 4.92 |
156 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
| 31 December | 31 December | |
| In thousands of US Dollars | 2024 | 2023 |
| Senior Unsecured Notes | 348,599 | 264,443 |
| Senior Secured Notes | 222,772 | 207,304 |
| 571,371 | 471,747 | |
| Less amounts due within 12 months | (177) | (175) |
| 571,194 | 471,572 |
| In thousands of US Dollars | 1 January | Cash oudlows | Borrowing costs including amorTsaTon of arrangement fees | Gain on debt-to- equity exchange | Fair value adjustment on recogniTon of debt instruments | 31 December |
| 2024 | ||||||
| Notes payable and accumulated interest | 471,747 | (16,487) | 116,111 | – | – | 571,371 |
| 2023 | ||||||
| Notes payable and accumulated interest | 1,396,517 | (35,649) | 97,288 | (811,983) | (174,426) | 471,747 |
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 157
Notes to the consolidated financial statements
continued
CONSOLIDATED FINANCIAL STATEMENTS
15. Abandonment and site restoration provision
The summary of changes in abandonment and site restoration provision during
years ended 31 December 2024 and 2023 is as follows:
Management's estimation is predicated on the expectation that cash flow will
occur at the termination of the subsoil use rights, projected for 2032 for the
Chinarevskoye field and 2044 for the Stepnoy Leopard fields. There are
uncertainties in estimation of future costs as Kazakh laws and regulations
concerning site restoration evolve.
The real discount rate used to determine the abandonment and site restoration
provision at 31 December 2024 was 4.32% (31 December 2023: 4.52%). The
change in the discount rate and cost of the liquidation during the year ended 31
December 2024 resulted in the increase of the abandonment and site
restoration provision by US$4,191 thousand (31 December 2023: an increase
US$629 thousand).
Additional provision in 2023 is resulted from recognition liability for Stepnoy
Leopard fields of 3 wells.
16. Due to Government of Kazakhstan
The amount due to the Government of the Republic of Kazakhstan reflects the
present value of a liability in relation to the expenditures made by the
Government in the time period prior to signing the Contract that were related to
exploration of the Contract territory and the construction of surface facilities in
fields discovered therein and that are reimbursable by the Group to the
Government during the production period. The total liability
amount due to the
Government as stipulated by the Contract is US$
25,000 thousand.
Repayment of this liability commenced in 2008 with the first payment of
US$1,030 thousand in March 2008 and with further payments by equal
quarterly instalments of US$258 thousand until 26 May 2031. The liability was
discounted at 13%.
The summary of the changes in the amounts due to the Government of
Kazakhstan during the years ended 31 December 2024 and 2023 is as follows:
17. Trade payables
Trade payables comprise the following as at 31 December 2024 and 2023:
18. Advances received
The advances received as at
31 December 2024 include prepayments of
US$1,135 thousand for crude oil (2023: US$181 thousand), US$407 thousand for
LPG (2023: US$45 thousand), and US$27 thousand for other advances (2023:
US$28 thousand).
19. Other current liabilities
Other current liabilities comprise the following as at 31 December 2024 and
2023:
Other accruals include various amounts accrued according to management best
estimates and assessment of probabilities of cash outflows, such as penalties
related to tax audit payments and other similar items .
158 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
CONSOLIDATED FINANCIAL STATEMENTS
| In thousands of US Dollars | 2024 | 2023 |
| Provision as at 1 January | 22,147 | 20,073 |
| Unwinding of discount | 1,006 | 973 |
| Addi_onal provision | – | 472 |
| Change in es_mates | 4,191 | 629 |
| Provision as at 31 December | 27,344 | 22,147 |
| In thousands of US Dollars | 2024 | 2023 |
| Balance as at 1 January | 4,656 | 5,033 |
| Unwinding of discount | 606 | 654 |
| Paid during the year | (1,031) | (1,031) |
| Balanсe as at 31 December | 4,231 | 4,656 |
| Less: current por_on | (1,031) | (1,031) |
| Non-current por^on | 3,200 | 3,625 |
| In thousands of US Dollars | 31 December 2024 | 31 December 2023 |
| Tenge denominated trade payables | 6,771 | 8,246 |
| US Dollar denominated trade payables | 1,165 | 1,684 |
| Euro denominated trade payables | 211 | 466 |
| Russian Rouble denominated trade payables | – | 44 |
| Trade payables denominated in other currencies | 91 | 192 |
| 8,238 | 10,632 |
| In thousands of US Dollars | 31 December 2024 | 31 December 2023 |
| Training obliga_ons accrual | 5,598 | 6,317 |
| Other accruals | 3,751 | 16,867 |
| Due to employees | 3,820 | 4,019 |
| Taxes payable, including corporate income tax | 2,403 | 2,600 |
| Other current liabili_es | 1,041 | 707 |
| 16,613 | 30,510 |
158 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
| For the year ended 31 December | ||
| In thousands of US Dollars | 2024 | 2023 |
| Revenue from oil and gas condensate sales | 89,335 | 101,463 |
| Revenue from gas and LPG sales | 33,405 | 18,009 |
| Revenue from third-party hydrocarbon processing | 14,336 | 156 |
| Revenue from sulphur sales | – | 1 |
| 137,076 | 119,629 | |
| For the year ended 31 December | ||
| In thousands of US Dollars | 2024 | 2023 |
| DepreciaTon, depleTon and amorTsaTon | 25,489 | 40,321 |
| Payroll and related taxes | 18,647 | 16,741 |
| Materials and supplies | 9,918 | 4,922 |
| Repair, maintenance and other services | 8,476 | 6,558 |
| Well repair and maintenance costs | 4,667 | 5,027 |
| TransportaTon services | 3,568 | 2,505 |
| Change in stock | 292 | 691 |
| Environmental levies | 163 | 138 |
| Other | 782 | 725 |
| 72,002 | 77,628 | |
| For the year ended 31 December | ||
| In thousands of US Dollars | 2024 | 2023 |
| Payroll and related taxes | 8,550 | 7,622 |
| Professional services | 3,556 | 4,182 |
| Business travel | 497 | 568 |
| Insurance fees | 457 | 427 |
| CommunicaTon | 160 | 159 |
| Materials and supplies | 147 | 166 |
| Short-term leases | 129 | 109 |
| DepreciaTon and amorTsaTon | 66 | 188 |
| Bank charges | 28 | 29 |
| Other | 362 | 357 |
| 13,952 | 13,807 | |
| For the year ended 31 December | ||
| In thousands of US Dollars | 2024 | 2023 |
| TransportaTon costs | 6,268 | 4,914 |
| Loading and storage costs | 4,520 | 4,091 |
| Payroll and related taxes | 1,844 | 1,501 |
| Other | 1,924 | 1,897 |
| 14,556 | 12,403 | |
| For the year ended 31 December | ||
| In thousands of US Dollars | 2024 | 2023 |
| Export customs duty | 7,069 | 8,154 |
| RoyalTes | 4,464 | 4,841 |
| Government profit share | 1,106 | 1,169 |
| Other taxes | 542 | 23 |
| 13,181 | 14,187 | |
| For the year ended 31 December | ||
| In thousands of US Dollars | 2024 | 2023 |
| Interest expense on borrowings | 114,391 | 95,226 |
| Other finance costs | 1,226 | 5,973 |
| Unwinding of discount on amounts due to | 606 | 654 |
| Government of Kazakhstan | ||
| Unwinding of discount on abandonment and site restoraTon provision | 1,006 | 973 |
| 117,229 | 102,826 | |
| For the year ended 31 December | ||
| In thousands of US Dollars | 2024 | 2023 |
| Management and administrative | 166 | 145 |
| Technical and operational | 439 | 412 |
| 605 | 557 | |
| For the year ended 31 December | ||
| In thousands of US Dollars | 2024 | 2023 |
| Wages and salaries | 27,331 | 22,155 |
| Social security costs | 4,813 | 3,952 |
| Share-based payments | – | (25) |
| 32,144 | 26,082 | |
Notes to the consolidated financial statements
continued
CONSOLIDATED FINANCIAL STATEMENTSKey management personnel remuneration
Directors’ remuneration
As at 31 December 2024 the amount payable to key management personnel
was US$978 thousand (31 December 2023: US$1,369 thousand). Employee share option plan (ESOP) The Group’s Phantom Option Plan was adopted by the board of directors of the
Company on 20 June 2014 to allow for the continuation of the option plan
previously maintained by Nostrum Oil & Gas LP. The rights and obligations in
relation to this option plan were transferred to Nostrum Oil & Gas PLC from
Nostrum Oil & Gas LP following the reorganisation.
Employees (including senior executives and executive directors) of members of
the Group received remuneration in the form of equity-based payment
transactions, whereby employees render services as consideration for share
appreciation rights, which can only be settled in cash (“cash-settled
transactions”). 2017 Long-term incentive plan In 2017 the Group started operating a Long -term incentive plan (“the LTIP”), that
was approved by the shareholders of the Company on 26 June 2017 and
adopted by the board of directors of the Company on 24 August 2017. The LTIP
is a discretionary benefit offered by the Company for the benefit of selected
employees. Its main purpose is to increase the interest of the employees in the
Company's long-term business goals and performance through share ownership.
The LTIP is an incentive for the employees' future performance and commitment
to the goals of the Company. The remuneration committee of the board of the
Company has the right to decide, in its sole discretion, whether or not further
awards will be granted in the future and to which employees those awards will
be granted.
Employees (including senior executives and executive directors) of members of
the Group may receive an award, which is a "nominal cost option" over a
specified number of ordinary shares in the capital of the Company. The option
has an exercise price of 1p per share (but the Company has the discretion to
waive this prior to exercise). In addition, under the Rules of the LTIP the
Company has discretion to settle awards other than by transfer of shares such as
by way of cash settlement. Generally, the awards are classified as equity-settled
transactions. The share options are treated as equity-settled since there are no
legal limitations expected on issue of shares for these upon vesting, the Group
has a choice of settlement and the intention is to settle them in equity. However,
in certain jurisdictions due to regulatory requirements the Company may not be
able to settle the awards other than by transfer of cash, in which case the
awards are classified as cash-settled transactions, and accounted for similar to
SARs.
27. Other income and other expenses
For the years ended 31 December 2024 and 2023 other income comprise the
For the years ended 31 December 2024 and 2023 other expenses comprise the
following:
Other taxes and penalties mainly include additional taxes and penalties assessed
in relation to prior periods considering new information, which was not available
at the time of preparation of respective financial information, and relevant
interpretations by the management.
160 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
CONSOLIDATED FINANCIAL STATEMENTS
| For the year ended 31 December | ||
| In thousands of US Dollars | 2024 | 2023 |
| Short-term employee benefits | 4,926 | 4,203 |
| Share-based payments | – | – |
| 4,926 | 4,203 | |
| For the year ended 31 December | ||
| In thousands of US Dollars | 2024 | 2023 |
| Short-term employee benefits | 1,724 | 1,960 |
| Share-based payments | – | – |
| 1,724 | 1,960 | |
| following: | For the year ended 31 December | |
| In thousands of US Dollars | 2024 | 2023 |
| Reversals of other accruals | 12,481 | 1,561 |
| Reversals of training accruals | 652 | 10 |
| Currency conversion | 120 | 199 |
| Catering and accommodaTon | 92 | 75 |
| Insurance compensaTon | – | 3,588 |
| Recovery of bad debt | – | 688 |
| Other | 80 | 309 |
| 13,425 | 6,430 | |
| For the year ended 31 December | ||
| In thousands of US Dollars | 2024 | 2023 |
| Business development costs | 5,358 | 1,554 |
| Social contribuTon | 1,298 | – |
| Other taxes and penalTes | 1,614 | 9,856 |
| Training accruals | 597 | 586 |
| Loss on disposal of property, plant and equipment | 402 | 917 |
| Currency conversion | 311 | 322 |
| Social program | 307 | 310 |
| Sponsorship | – | 59 |
| Other | 2,517 | 1,071 |
| 12,404 | 14,675 | |
160 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
| For the year ended 31 December | ||
| In thousands of US Dollars | 2024 | 2023 |
| Corporate income tax expense | 5,779 | 5,743 |
| Deferred income tax expense | 24,541 | (5,376) |
| Withholding tax | 778 | 614 |
| Adjustment in respect of the deferred income tax for the prior periods | 445 | – |
| Adjustment in respect of the current income tax for the prior periods | (3,139) | 3,693 |
| 28,404 | 4,674 | |
| For the year ended 31 December | ||
| In thousands of US Dollars | 2024 | 2023 |
| Loss before income tax | 1,827 | 836,332 |
| Tax rate applicable to the subsoil use rights | 30% | 30% |
| Expected tax provision | 548 | 250,900 |
| Non-deducTble interest expense on borrowings and other financial expenses | 28,929 | 25,490 |
| Non-deducTble taxes and penalTes | (3,327) | 2,957 |
| Effect of exchange rate on the tax base | 6,722 | (587) |
| Adjustments in respect of current income tax of previous years | (3,139) | 3,693 |
| Effect of income taxed at different rate¹ | (7,118) | – |
| Business development costs | 1,607 | 466 |
| Net foreign exchange gain | (253) | 286 |
| Reversal of training provisions | (17) | 173 |
| Fair value adjustment on recogniTon of debt instruments | – | (52,328) |
| Gain on debt-to-equity exchange | – | (230,883) |
| Non-deducTble unwinding of discount | 484 | 488 |
| Other non-deducTble expenses | 3,968 | 4,019 |
| Income tax expense | 28,404 | 4,674 |
| In thousands of US Dollars31 December 2024 | 31 December 2023 | |
| Deferred tax asset | ||
| Accounts payable and provisions | 2,714 | 3,232 |
| Deferred tax liability | ||
| Property, plant and equipment | (68,369) | (44,943) |
| Inventories | (3,409) | (2,812) |
| Net deferred tax liability | (69,064) | (44,523) |
| The movements in the deferred tax liability were as follows: | ||
| In thousands of US Dollars | 2024 | 2023 |
| Balance as at 1 January | 44,523 | 49,899 |
| Current period charge to statement of comprehensive income | 24,541 | (5,376) |
| Balance as at 31 December | 69,064 | 44,523 |
| comprise the following: | For the year ended 31 December | |
| In thousands of US Dollars | 2024 | 2023 |
| Audit services: | ||
| Ernst & Young | 433 | 420 |
| MHA & Baker Tilly | 804 | 696 |
| 1,237 | 1,116 | |
Notes to the consolidated financial statements
continued
CONSOLIDATED FINANCIAL STATEMENTS31. Contingent liabilities and commitments Taxation Kazakhstan’s tax legislation and regulations are subject to ongoing changes and
varying interpretations. Instances of inconsistent opinions between local,
regional and national tax authorities are not unusual. The current regime of
penalties and interest r elated to reported and discovered violations of
Kazakhstan’s tax laws are severe and where the tax authorities disagree with the
positions taken by the Group the financial outcomes could be material.
Administrative fines are generally 80% of the taxes additionally assessed and
interest penalty is assessed at the refinancing rate established by the National
Bank of Kazakhstan multiplied by 1.25. As a result, penalties and interest can
amount to multiples of any assessed taxes. Fiscal periods remain open to review
by tax authorities for five calendar years preceding the year of review. Under
certain circumstances reviews may cover longer periods. Because of the
uncertainties associated with Kazakhstan’s tax system, the ultimate amount of
taxes, penalties and interest, if any, may be in excess of the amount expensed to
date and accrued at 31 December 2024. As at 31 December 2024 management
believes that its interpretation of the relevant legislation is appropriate and that
it is probable that the Group’s tax position will be sustained. Pending t ax disputes In late 2023 the Kazakhstan tax authorities conducted a withholding tax audit of
Zhaikmunai LLP for the financial year 2018, and in January 2024 issued a
withholding tax assessment equivalent to US$6.8 million and related fines and
penalties equivalent to US$5.1 million. According to the Company’s best
estimates, the application of similar arguments to the periods 2019-23 could
result in additional amounts of taxes and penalties in the amount of circa US$3.0
million. This excludes other items included within the assessment which the
Company believes to be a remote risk.
Whilst Zhaikmunai LLP successfully challenged the legality and enforceability of
the 2018 withholding tax assessment in January 2024, the Kazakhstan tax
authorities subsequently filed an appeal in April 2024, resulting in a court ruling
in favour of Zhaikmunai. In June 2024 the tax authorities submitted a final
appeal to the Supreme Court of Kazakhstan, which is pending a court hearing.
Kazakhstan’s tax legislation and regulations are subject to varying interpretations
and instances of inconsistent opinions between local, regional, and national tax
authorities and courts are not unusual. Taking this into account, while
management believes that it is likely that the ruling in Zhaikmunai’s favour will
be upheld on appeal, management assesses the risk of an unfavourable
outcome for Zhaikmunai in pending and future legal proceedings and resulting
payment of the above-mentioned claimed amounts of taxes and penalties as
possible. Abandonment and site restoration (decommissioning) As Kazakh laws and regulations concerning site restoration and clean -up evolve,
the Group may incur future costs, the amount of which is currently
indeterminable. Such costs, when known, will be provided for as new
information, legislation and estimates evolve. Environmental obligations The Group may also be subject to loss contingencies relating to regional
environmental claims that may arise from the past operations of the related
fields in which it operates. Kazakhstan’s environmental legislation and
regulations are subject to ongoing changes and varying interpretations. As
Kazakh laws and regulations evolve concerning environmental assessments and
site restoration, the Group may incur future costs, the amount of which is
currently indeterminable due to such factors as the ultimate determination of
responsible parties associated with these costs and the Government’s
assessment of respective parties’ ability to pay for the costs related to
environmental reclamation.
claims or penalties assessed by the Kazakh regulatory agencies, it is possible that
the Group’s future results of operations or cash flow could be materially affected
in a particular period. Capital commitments As at 31 December 2024, the Group had contractual capital commitments in the
amount of US$ 11,288 thousand (31 December 2023: US$16,039 thousand),
mainly in respect to the Group’s oil field development activities. Social and education commitments As required by the Contract (after its amendment on 2 September 2019), the
Group is obliged to: • spend US$ 300 thousand per annum to finance social infrastructure; • make an accrual of one percent per annum of the actual investments for the
Chinarevskoye field for the purposes of educating Kazakh citizens. Domestic oil sales In accordance with Supplement # 7 to the Contract, Zhaikmunai LLP is required
to deliver at least 15% of produced oil to the domestic market on a monthly
basis for which prices are materially lower than export prices.
32. Financial risk management objectives and policies
The Group’s principal financial liabilities comprise borrowings, payables to the
Government of Kazakhstan, trade payables and other current liabilities. The
main purpose of these financial liabilities is to finance the Group’s operations.
The Group's financial assets consist of trade and other receivables and cash and
cash equivalents that derive directly from its operations.
The Group is exposed to commodity price risk, foreign currency risk, liquidity risk
and credit risk. The Group’s senior management oversees the management of
these risks. The Group’s senior management ensures that the Group’s financial
risk activities are governed by appropriate policies and procedures and that
financial risks are identified, measured and managed in accordance with the
Group’s policies and risk objectives. The Board of Directors reviews and agrees
policies for managing each of these risks, which are summarised below.
Climate change
Management has considered how the Group’s identified climate risks and
climate related goals (as discussed in Climate Change and GHG Emissions in the
Group’s 2024 Annual Report) may impact the estimation of the recoverable
value of cash-generating unit tested for impairment. The anticipated extent and
nature of the future impact of climate on the Group’s operations and future
investment depends on the development of new technologies and production
processes employed and the level of emissions, energy efficiency and use of
renewable energy. The sensitivity of the Group’s impairment assessment to
these factors is also impacted by the extent that estimated recoverable value
exceeds the carrying value of an individual cash-generating unit – where this is
lower there is an increased risk of a future impact. The Group is in the process of
identifying a range of actions and initiatives to progress towards the Group’s
goals, including reduction of greenhouse gas emissions, wastewater discharges
and increase of waste utilisation. In certain cases, the costs of such actions have
been quantified and are included in the Group’s forecasts which are used to
estimate recoverable value for the Group’s cash-generating unit. Other actions
and initiatives continue to be explored by the Group but are not sufficiently
certain to be reflected in the Group’s forecasts of estimated recoverable value.
Commodity price risk
The Group is exposed to the effect of fluctuations in price of crude oil, which is
quoted in US dollar on the international markets. The Group prepares annual
budgets and periodic forecasts including sensitivity analyses in respect of various
levels of crude oil prices in the future.
162 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
CONSOLIDATED FINANCIAL STATEMENTS
162 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
| Change in Tenge to US dollar exchange rate | Effect on profit before tax (In thousands of US Dollars) | |
| 2024 | 21% | 1,182 |
| -21% | (1,810) | |
| 2023 | 21% | 6,344 |
| -21% | 9,716 |
| Russian | |||||
| In thousands of US Dollars | Tenge | Roubles | Euro | Other | Total |
| As at 31 December 2024 | |||||
| Cash and cash equivalents | 1,215 | – | 125 | 73 | 1,413 |
| Trade receivables | 7,847 | – | – | – | 7,847 |
| Trade payables | (6,771) | – | (211) | (91) | (7,073) |
| Other current liabili$es | (9,100) | – | (1,461) | (147) | (10,708) |
| (6,809) | – | (1,547) | (165) | (8,521) | |
| As at 31 December 2023 | |||||
| Cash and cash equivalents | 395 | – | 66 | 604 | 1,065 |
| Trade receivables | 1,530 | – | – | – | 1,530 |
| Trade payables | (8,246) | (44) | (466) | (192) | (8,948) |
| Other current liabili$es | (28,920) | – | (2,107) | (27) | (31,054) |
| (35,241) | (44) | (2,507) | 385 | (37,407) |
| In thousands of US Dollars | On demand | Less than 3 months | 3-12 months | 1-5 years | More than 5 years | Total |
| As at 31 December 2024 | ||||||
| Borrowings | – | – | 17,023 | 787,890 | – | 804,913 |
| Trade payables | 8,016 | – | 222 | – | – | 8,238 |
| Other current liabilibes | 11,821 | – | – | – | – | 11,821 |
| Due to | – | 258 | 773 | 4,124 | 1,288 | 6,443 |
| Government of | ||||||
| Kazakhstan | ||||||
| 19,837 | 258 | 18,018 | 792,014 | 1,288 | 831,415 | |
| As at 31 December 2023 | ||||||
| Borrowings | – | – | 16,489 | 805,097 | – | 821,586 |
| Trade payables | 10,305 | – | 327 | – | – | 10,632 |
| Other current liabilibes | 12,936 | – | – | – | – | 12,936 |
| Due to | – | 258 | 773 | 4,124 | 2,319 | 7,474 |
| Government of | ||||||
| Kazakhstan | ||||||
| 23,241 | 258 | 17,589 | 809,221 | 2,319 | 852,628 | |
Notes to the consolidated financial statements
continued
CONSOLIDATED FINANCIAL STATEMENTSFair values of financial instruments Management assessed that the fair value of cash and cash equivalents, trade
receivables, trade payables and other current liabilities approximate their
carrying amounts at 31 December 2024 and 2023.
Set out below, is a comparison by class of the carrying amounts and fair value of
the Group’s financial instruments, other than those with carrying amounts
reasonably approximating their fair values:
The fair value of the financial assets and liabilities represents the amount at
which the instruments could be exchanged in a current transaction between
willing parties, other than in a forced or liquidation sale. Fair value of the quoted
notes is based o n price quotations at the reporting date and respectively
categorised as Level 1 within the fair value hierarchy.
During the years ended 31 December 2024 and 2023 there were no transfers
between the levels of fair value hierarchy of the Group’s financial instruments. Capital management For the purpose of the Group’s capital management, capital includes issued
capital, additional paid -in capital and all other equity reserves attributable to the
equity holders of the parent. The primary objective of the Group’s capital
management is to maximise the shareholder value.
Since the engagement with the AHG in discussions on potential restructuring of
the Notes and signing of the FBAs in 2020 (see Note 1), the Group’s focus was on
maintaining short-term liquidity and preserving cash. Successful cost
optimisation programme, favourable hydrocarbon pricing and successful
restructuring enabled the Group to grow its unrestricted cash balances to the
level of US$161,711 thousand as at 31 December 2024. After successful
implementation of the restructuring, the Group is in the process of revising its
capital management policy in line with new requirementsof SSN and SUN trust
deeds and shareholder expectations. 33. Events after the reporting date
Stepnoy Leopard FDP Approval
On 3 April 2025, the Ministry of Energy of the Republic of Kazakhstan approved
the full-field development plan for the Stepnoy Leopard fields, in which the
Company holds an 80% working interest. The plan confirms 138 mmboe of gross
2P reserves and supports phased development with first production targeted
between late 2026 and early 2027. This milestone is aligned with the Company’s
strategy to maximise utilisation of its 4.2 bcma gas processing facilities.
Cancellation of SSNs, SUNs and Ordinary Shares
Pursuant to the terms of the restructuring, which was approved by the court on
26 August 2022, the following post-reporting date events occurred:
•
On 4 April 2025, the Company cancelled 4,136,578 ordinary shares of £0.01
each. As a result, the issued share capital now comprises 165,244,983
ordinary shares, each carrying one vote. The Company holds no treasury
shares.
•
On 7 April 2025, the Company cancelled 5,628,000 outstanding Senior
Secured Notes (SSNs) and 9 629 836 Senior Unsecured Notes (SUNs) .
164
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2024
CONSOLIDATED FINANCIAL STATEMENTS
| Carrying amount | Fair value | |||
| I n thousands of US Dollars | 31 December 2024 | 31 December 2023 | 31 December 2024 | 31 December 2023 |
| Interest bearing borrowings | 571,371 | 471,747 | 186,660 | 270,834 |
| Total | 571,371 | 471,747 | 186,660 | 270,834 |
| In thousands of US Dollars | Notes | 31 December 2024 | 31 December 2023 |
| Assets | |||
| Non-current assets | |||
| Property, plant and equipment | 5 | 7 | |
| 5 | 7 | ||
| Current assets | |||
| Prepayments and other current assets | 117 | 252 | |
| Receivables from related parWes | 6 | 2,000 | 1,907 |
| Cash and cash equivalents | 7 | 66 | 160 |
| 2,183 | 2,319 | ||
| TOTAL ASSETS | 2,188 | 2,326 | |
| Equity and liabiliFes | |||
| Share capital and reserves | |||
| Share capital | 8 | 2,152 | 2,152 |
| Deferred shares | – | 18,551 | |
| Share premium | 792,744 | 792,744 | |
| Retained deficit and reserves | (1,035,154) | (1,006,281) | |
| (240,258) | (192,834) | ||
| Non-current liabiliFes | |||
| Financial guarantees, long-term | 9 | 241,239 | 193,817 |
| 241,239 | 193,817 | ||
| Current liabiliFes | |||
| Payables to related parWes | 10 | 235 | 258 |
| Trade payables | 826 | 1,011 | |
| Income tax payable | 37 | 48 | |
| Other current liabiliWes | 109 | 26 | |
| 1,207 | 1,343 | ||
| TOTAL EQUITY AND LIABILITIES | 2,188 | 2,326 |
166 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
| For the year ended 31 | |||
| December | |||
| In thousands of US Dollars | Notes | 2024 | 2023 |
| Cash flow from operaFng acFviFes: | |||
| Loss before income tax | (47,419) | (103,344) | |
| Adjustments for: | |||
| DepreciaWon | 4 | 3 | |
| Impairment charge | – | 1,004,290 | |
| Financial guarantee loss (income) | 9 | 47,422 | (900,684) |
| OperaFng profit before working capital changes | 7 | 265 | |
| Changes in working capital: | |||
| Change in other current assets | 135 | (84) | |
| Change in receivables from related parWes | (93) | (952) | |
| Change in trade payables | (185) | 164 | |
| Change in payables to related parWes | (23) | (65) | |
| Change in other current liabiliWes | 83 | (62) | |
| Cash used in operaFons | (76) | (734) | |
| Income tax paid | (16) | – | |
| Net cash used in operaFng acFviFes | (92) | (734) | |
| Cash flow from invesFng acFviFes: | |||
| Purchase of property, plant and equipment | (2) | (7) | |
| Net cash used in invesFng acFviFes | (2) | (7) | |
| Net change in cash and cash equivalents | (94) | (741) | |
| Cash and cash equivalents at the beginning of the year | 7 | 160 | 901 |
| Cash and cash equivalents at the end of the year | 7 | 66 | 160 |
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 167
| In thousands of US Dollars | Notes | Share capital | Deferred shares | Share premium | Other reserves | Retained deficit | Total |
| As at 1 January 2023 | 3,203 | – | – | 567 | (903,661) | (899,891) | |
| Loss for the year | – | – | – | – | (103,392) | (103,392) | |
| Total comprehensive loss for the year | – | – | – | – | (103,392) | (103,392) | |
| Debt-to-equity exchange | (1,051) | 18,551 | 792,744 | 229 | – | 810,473 | |
| Share based payments under LTIP | 13 | – | – | – | (24) | – | (24) |
| As at 31 December 2023 | 2,152 | 18,551 | 792,744 | 772 | (1,007,053) | (192,834) | |
| Loss for the year | – | – | – | – | (47,424) | (47,424) | |
| Total comprehensive loss for the year | – | – | – | – | (47,424) | (47,424) | |
| RedempWon of deferred shares | 8 | – | (18,551) | – | 18,551 | – | – |
| As at 31 December 2024 | 2,152 | – | 792,744 | 19,323 | (1,054,477) | (240,258) |
PARENT COMPANY FINANCIAL STATEMENTS
168 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
| Company | Registered office | Form of capital | Owner- ship, % |
| Nostrum Associated Investments LLP | 43B Karev street,090000 Uralsk,Republic of Kazakhstan | Participatory interests | 100 |
| Nostrum Oil & Gas Coöperatief U.A. | Bloemendaalseweg 139, 2061 CH Bloemendaal,The Netherlands | Members' interests | 100 |
| Nostrum Oil & Gas B.V. | Bloemendaalseweg 139, 2061 CH Bloemendaal,The Netherlands | Ordinary shares | 100 |
| Nostrum Oil & Gas Finance B.V. | Bloemendaalseweg 139, 2061 CH Bloemendaal,The Netherlands | Ordinary shares | 100 |
| Nostrum Oil & Gas Holding Ltd. | 20 Eastbourne Terrace,London, W2 6LA,United Kingdom | Ordinary shares | 100 |
| Nostrum Services Central Asia LLP | Aksai 3a, 75/38, 050031 Almaty, Republic of Kazakhstan | Participatory interests | 100 |
| Nostrum Services N.V. | Chaussee de Wavre 20,1360 Perwez, Belgium | Ordinary shares | 100 |
| Positiv Invest LLP | Dostyk 310/15, Almaty,Republic of Kazakhstan | Participatory interests | 80 |
| Zhaikmunai LLP 43/1 Karev street,090000 Uralsk,Republic of Kazakhstan | Participatory interests | 100 |
Notes to the parent company financial statements
continued
PARENT COMPANY FINANCIAL STATEMENTSGoing concern
These financial statements have been prepared on
a going concern basis.
The Company is dependent
on liquidity generated by its subsidiaries to
continue in operation and its ability to meet its
liabilities as they become due for the foreseeable
future, a period of not less than 12 months from
the date of these financial statements.
Respectively, the Group level going concern
matters and analysis are considered directly
relevant for the Company, as described on
page 50
of the Annual Report, which also
highlights a
material uncertainty in relation to partial or full
restructuring of the Group’s debt.
The directors are satisfied that the Group
will have
sufficient resources to continue in operation for
the foreseeable future, a period of not less than 12
months from the date of these financial
statements. In addition, the Group has controls in
place over allocation of resources among parent
and subsidiaries.
Taking into account the abovementioned
considerations the directors are satisfied that the
Company has sufficient resources to continue in
operation for the foreseeable future, a period of
not less than 12 months from the date of this
report. Accordingly, they continue to adopt the
going concern basis in preparing these parent
company financial statements.
3.
Changes in accounting policies and disclosures
New standards, interpretations and
amendments adopted by the
Company
Several amendments apply for the first time in
2024, but do not have an impact on the
consolidated financial statements of the
Company.
The Company has not early adopted any other
standard, interpretation or amendment that has
been issued but is not yet effective.
Amendments to IFRS 16
- Lease Liability in a
Sale and Leaseback
The amendments in IFRS 16 specify the
requirements that a seller
-lessee uses in
measuring the lease liability arising in a sale and
leaseback transaction, to ensure the seller-
lessee does not recognise any amount of the
gain or loss that relates to the right of use it
retains.
The amendments had no impact on the
Company’s financial statements.
Amendments to IAS 1
- Classification of
Liabilities as Current or Non-current
The amendments to IAS 1 specify the
requirements for classifying liabilities as current or
non
-current. The amendments clarify:
•
What is meant by a right to defer settlement
•
That a right to defer must exist at the end of the
reporting period
•
That classification is unaffected by the likelihood
that an entity will exercise its deferral right
•
That only if an embedded derivative in a
convertible liability is itself an equity instrument
would the terms of a liability not impact its
classification
In addition, an entity is required to disclose when a
liability arising from a loan agreement is classified
as non-current and the entity’s right to defer
settlement is contingent on compliance with
future covenants within twelve months.
The amendments had no impact on the
Company’s financial statements.
Supplier Finance Arrangements
- Amendments
to IAS 7 and IFRS 7
The amendments to IAS 7 Statement of Cash
Flows and IFRS 7 Financial Instruments:
Disclosures clarify the characteristics of supplier
finance arrangements and require additional
disclosure of such arrangements. The disclosure
requirements in the amendments
are intended
to assist users of financial statements in
understanding the effects of supplier finance
arrangements on an entity’s liabilities, cash
flows and exposure to liquidity risk. The
Company has assessed the impact of these
amendments and confirms that it does not have
any supplier finance arrangements in place. As
a result, these amendments have no impact on
the Company’s financial statements.
Standards issued but not yet effective
The new and amended standards and
interpretations that are issued, but not yet
effective, up to the date of issuance of the
Company’s financial statements are disclosed
below. The Company intends to adopt these
new and amended standards and
interpretations, if applicable, when they
become effective.
Lack of exchangeability – Amendments to IAS
21
In August 2023, the IASB issued amendments to
IAS 21 The Effects of Changes in Foreign Exchange
Rates to specify how an entity should assess
whether a currency is exchangeable and how it
should determine a spot exchange rate when
exchangeability is lacking. The amendments also
require disclosure of information that enables
users of its financial statements to understand how
the currency not being exchangeable into the
other currency affects, or is expected to affect, the
entity’s financial performance, financial position
and cash flows.
The amendments will be effective for annual
reporting periods beginning on or after 1 January
2025. Early adoption is permitted, but will need to
be disclosed. When applying the amendments, an
entity cannot restate comparative information.
The amendments are not expected to have a
material impact on the Company’s financial
statements.
IFRS 18 Presentation and Disclosure in Financial
Statements
In April 2024, the IASB issued IFRS 18, which
replaces IAS 1 Presentation of Financial
Statements. IFRS 18 introduces new requirements
for presentation within the statement of profit or
loss, including specified totals and subtotals.
Furthermore, entities are required to classify all
income and expenses within the statement of
profit or loss into one of five categories:
operating,
investing, financing, income taxes and
discontinued operations, whereof the first three
are new.
It also requires disclosure of newly defined
management-defined performance measures,
subtotals of income and expenses, and includes
new requirements for aggregation and
disaggregation of financial information based on
the identified ‘roles’ of the primary
financial
statements (PFS) and the notes.
In addition, narrow-scope amendments have been
made to IAS 7 Statement of Cash Flows, which
include changing the starting point for determining
cash flows from operations under the indirect
method, from ‘profit or loss’ to ‘operating profit or
loss’ and removing the optionality around
classification of cash flows from dividends and
interest. In addition, there are consequential
amendments to several other standards.
IFRS 18, and the amendments to the other
standards, is effective for reporting periods
beginning on or after 1 January 2027, but earlier
application is permitted and must be disclosed.
IFRS 18 will apply retrospectively.
The Company is currently working to identify all
impacts the amendments will have on the
primary financial statements and notes to the
financial statements.
IFRS 19 Subsidiaries without Public
Accountability: Disclosures
In May 2024, the IASB issued IFRS 19, which allows
eligible entities to elect to apply its reduced
disclosure requirements while still applying the
recognition, measurement and presentation
requirements in other IFRS accounting standards.
To be eligible, at the end of the reporting period,
an entity must be a subsidiary as defined in IFRS
10, cannot have public accountability and must
have a parent (ultimate or intermediate) that
prepares consolidated financial statements,
available for public use, which comply with IFRS
accounting standards.
IFRS 19 will become effective for reporting periods
beginning on or after 1 January 2027, with early
application permitted.
The amendments are not expected to have
to be
applicable to the Company’s financial statements.
170
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2024
PARENT COMPANY FINANCIAL STATEMENTS
Notes to the parent company financial statements continued
PARENT COMPANY FINANCIAL STATEMENTS
172 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
| In thousands of US Dollars | 31 December 2024 | 31 December 2023 |
| Nostrum Oil & Gas Holding Limited | 1,111,031 | 1,111,031 |
| Impairment of investments | (1,111,031) | (1,111,031) |
| – | – |
| In thousands of US Dollars | 31 December 2024 | 31 December 2023 |
| Receivables from Nostrum Oil & Gas Benefit Trust | 23,812 | 23,812 |
| Receivables from Nostrum Oil & Gas CoöperaAef U.A. | 1,969 | 1,853 |
| 25,781 | 25,665 | |
| Less: bad debt allowance | (23,781) | (23,758) |
| 2,000 | 1,907 |
| Number of shares | In circula3on | Treasury capital | TOTAL |
| As at 31 December 2023 | 169,086,713 | 294,848 | 169,381,561 |
| Shares issued | – | – | – |
| Share consolidaAon | – | – | – |
| As at 31 December 2024 | 169,086,713 | 294,848 | 169,381,561 |
Notes to the parent company financial statements
continued
PARENT COMPANY FINANCIAL STATEMENTS
9.
Financial guarantees
Financial guarantees are comprised of the following as at 31 December 2024 and
31 December 2023:
As at 31 December 2024 the Company performed an assessment of the value of
the guarantees issued under SSNs and SUNs, taking into account the Group’s
financial position as at 31 December
2024 and the fact that the Company is the
parent entity in the Group and so would ultimately assume the guarantee
obligations of its subsidiaries in the event of their inability to meet such
obligations. As a result, the Company has recognised the guarantee liabilities for
the total amount of US$241,239 thousand (2023: US$193,817 thousand),
representing the amount of expected credit losses as of the reporting date.
Further details on the Notes are provided below.
Senior Secured Notes and Senior Unsecured Notes
On 8 February 2023, the Group completed restructuring of the Group’s US$725
million 8.0% Senior Notes due July 2022 and its US$400 million 7.0% Senior
Notes due February 2025. Through the partial reinstatement of debt of US$250
million Senior Secured Notes (SSNs)
and US$300 million Senior Unsecured Notes
(SUNs).
The SSNs and SUNs are jointly and severally guaranteed (the “2023 Guarantees”)
on a senior basis by Nostrum Oil & Gas PLC, Nostrum Oil & Gas Coöperatief U.A.,
Zhaikmunai LLP and Nostrum Oil & Gas B.V. (the “202
3 Guarantors”). SUNs and
SSNs Issuer’s and the 2023 Guarantors’ senior obligations and rank equally with
all of the 2023 Issuer’s and the 2023 Guarantors’ other senior indebtedness.
10. Payables to related parties
Payables to related parties are comprised of the following as at 31 December
As at 31 December 2024 amounts payable to Nostrum Oil & Gas Coöperatief
U.A. represent the arrangements in respect of the Nostrum employee benefit
trust. For more details, please refer to Note 6. Based on the service agreement,
the amounts payable to Nostrum Oil & Gas Coöperatief U.A. in respect to the
employee benefit trust, are only repayable to the extent of amounts received (or
recovered) from the Trust. Considering the fact that the loan is repayable to the
extent of the assets of the Trust, which are reflected in treasury shares held by
the Trust, the Company has remeasured and reduced the loan payable as at31
December 2024 by US$23 thousand (2023: US$65 thousand), representing the
difference between the book value of the loan and the recoverable value of the
treasury shares as of 31 December 2024.
As at 31 December 2024 and 2023 amounts payable to Nostrum Oil & Gas
Finance B.V. represent interest accrued in the amount US$204 thousandon the
loan from Nostrum Oil & Gas Finance B.V.
The loan on which the above interest
amounts were calculated was settled against the receivables due from Nostrum
Oil & Gas Coöperatief U.A. in the amount of $3,000 thousandin 2019.
11. Auditors’ remuneration
For the year ended 31 December 2024 the fees for the audit of the Company
amount to US$10 thousand (2023: US$10 thousand).
12. Employee’s remuneration
The average monthly number of employees employed was as follows:
Their aggregate remuneration comprised:
The directors of the Company are also directors of the Group. The aggregate
amount of remuneration paid to or receivable by executive directors in respect
of qualifying services for the financial year ended 31 December 2024 was nil
(2023: US$1,138 thousand). In addition, US$1,024 thousand (2023: US$939
thousand) was paid by the Company to the non-executive directors. The
directors do not believe that it is practicable to apportion these amounts
between their services as directors of the Company and their services as
directors of the Group.
For the year ended 31 December 2024 the Company employed an average of
5 non-executive directors (2023: 5 non-executive directors).
Full details of individual directors’ remuneration are given in the directors’
remuneration report on pages 110-115 of the annual report.
13. Long-term incentive plan
2017 Long-term incentive plan
In 2017 the Company started operating a Long-term incentive plan (“the LTIP”),
that was approved by the shareholders of the Company on 26 June 2017 and
adopted by the board of directors of the Company on 24 August 2017. The LTIP is
a discretionary benefit offered by the Company for the benefit of selected
employees. Its main purpose is to increase the interest of the employees in the
Company's long-term business goals and performance through share ownership.
The LTIP is an incentive for the employees' future performance and commitment
to the goals of the Company. The remuneration committee of the board of the
Company has the right to decide, in its sole discretion, whether or not further
awards will be granted in the future and to which employees those awards will
be granted.
Employees (including senior executives and executive directors) of members of
the Group or their associates may receive an award, which is a "nominal cost
option" over a specified number of ordinary shares in the capital of the
Company. The option has an exercise price of 1p per share (but the Company has
the discretion to waive this prior to exercise). In addition, under the Rules of the
LTIP the Company has discretion to settle awards other than by transfer of shares
such as by way of cash settlement. Generally, the awards are classified as equity-
settled transactions. The share options are treated as equity-settled since there
are no legal limitations expected on issue of shares for these upon vesting, the
Company has a choice of settlement and the intention is to settle them in equity.
However, in certain jurisdictions due to regulatory requirements the Company
may not be able to settle the awards other than by transfer of cash, in which case
the awards are classified as cash-settled transactions, and accounted for similar
to SARs.
The award ordinarily vests and becomes exercisable as from later of the third
anniversary of grant or two years after the date on which the Company
determines whether the performance condition has been satisfied, subject to
employee’s continued service and to the extent to which the performance
condition is satisfied, until the end of the contractual life. The contractual life of
the share options is ten years.
The cost of cash-settled equity-based employee compensation is measured
initially at fair value at the grant date using a trinomial lattice valuation model.
174
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2024
PARENT COMPANY FINANCIAL STATEMENTS
| In thousands of US Dollars | 2024 | 2023 |
| Financial guarantee as at 1 January | 193,817 | 900,684 |
| Financial guarantee loss/(income) | 47,422 | (706,867) |
| Financial guarantee as at 31 December | 241,239 | 193,817 |
| 2024 and 31 December 2023: In thousands of US Dollars | 31 December 2023 | 31 December 2023 |
| Payables to Nostrum Oil & Gas CoöperaAef U.A. | 31 | 54 |
| Interest payable Nostrum Oil & Gas Finance B.V. | 204 | 204 |
| 235 | 258 |
| For the year ended 31 December | ||
| In thousands of US Dollars | 2024 | 2023 |
| Executive Directors | 0 | 1 |
| Administrative personnel | 4.5 | 3 |
| 4.5 | 4 | |
| For the year ended 31 | ||
| December | ||
| In thousands of US Dollars | 2024 | 2023 |
| Wages and salaries | 506 | 642 |
| Social security costs | 178 | 172 |
| Other benefits | 38 | 19 |
| 722 | 833 | |
| 31 December 2023: | Equity-settled awards | Cash-settled awards | TOTAL awards |
| As at 1 January 2023 | 147,343 | – | 147,343 |
| Share options forfeited | (7,503) | – | (7,503) |
| As at 31 December 2023 | 139,840 | – | 139,840 |
| Share options forfeited | – | – | – |
| As at 31 December 2024 | 139,840 | – | 139,840 |
| In thousands of US Dollars | 31 December 2024 | 31 December 2023 |
| Receivables from Nostrum Oil & Gas | 23,812 | 23,812 |
| Benefit Trust | ||
| Receivables from Nostrum Oil & Gas | 1,969 | 1,853 |
| CoöperaAef U.A. | ||
| 25,781 | 25,665 | |
| Less: bad debt allowance | (23,781) | (23,758) |
| 2,000 | 1,907 |
| In thousands of US Dollars | 31 December 2024 | 31 December 2023 |
| Payables to Nostrum Oil & Gas CoöperaAef U.A. | 31 | 54 |
| Interest payable Nostrum Oil & Gas Finance B.V. | 204 | 204 |
| 235 | 258 |
| In thousands of US Dollars | 2024 | 2023 |
| Financial guarantee as at 1 January | 193,871 | 900,684 |
| Financial guarantee loss/(income) | 47,422 | (706,867) |
| Financial guarantee as at 31 December | 241,239 | 193,871 |
| For the year ended 31 December | ||
| In thousands of US Dollars | 2024 | 2023 |
| Income from provision of services | ||
| Nostrum Oil & Gas CoöperaWef U.A. | 5,264 | 5,300 |
| Gain/(loss) from financial guarantee | ||
| Nostrum Oil & Gas Finance B.V. (Note 9) | (47,422) | 706,867 |
Notes to the parent company financial statements
continued
PARENT COMPANY FINANCIAL STATEMENTSfinancing and leases, and adequately allocating funding among various entities in
the Group.
Following successful restructuring of the 2025 Notes and 2022 Notes, the
Directors confirm that they have a reasonable expectation that the Company and
the Group will continue in operation as they fall due through the three-year
viability assessment period ending 30 June 2028. For more information on
analysis of the Group’s ability to meet its liabilities on repayment of the Notes
please see “Viability statement” section on the Annual report onpages 43-44.
As of 31 December 2024, the current amount of the financial liabilities of the
Company amounted to US$1,197 thousand (31 December 2023: US$1,343
thousand).
The table below summarizes the maturity profile of theCompany’s financial
liabilities at 31 December 2024 and 2023 based on contractual undiscounted
payments:
Credit risk
Financial instruments, which potentially subject the Company to credit risk,
consist primarily of receivables and cash in banks. The maximum exposure to
credit risk is represented by the carrying amount of each financial asset. The
Company considers that its maximum exposure is reflected by the amount of
receivables from shareholders and cash and cash equivalents.
The Company places its US Dollar, British Pound and Euro denominated cash
with Citibank which has a credit rating of Aa3 (stable) from Moody’s rating
agency at 31 December 2024.
Receivables are amounts receivable from Group companies, thus risk of credit
default is low, except for the loan receivable from the Trust for whichloss
allowance has been recognised.
End of DocumentIn addition to the direct credit exposures outlined above, the Company has also
acted as a guarantor under the Group’s SSNs and SUNs. Since the guarantees are
issued in favor of the Company’s indirect subsidiaries, related costs at initial
recognition are capitalised into the investments in subsidiaries. The guarantees
could potentially expose the Company to significant financial strain in the event
of the default of the SSNs and SUNs.
Fair values of financial instruments
The fair value of the financial assets represents the amount at which the
instrument could be exchanged in a current transaction between willing parties,
other than in a forced or liquidation sale.
The management assessed that its assets and liabilities approximate their
carrying amounts largely due to their nature or the short-term maturities of
these instruments.
Capital management
For the purpose of the Company’s capital management, capital includes issued
capital and all other equity reserves attributable to the equity holders of the
Company. The primary objective of the Company’s capital management is to
maximise the shareholder value.
16. Events after the reporting
Stepnoy Leopard FDP Approval
On 3 April 2025, the Ministry of Energy of the Republic of Kazakhstan approved
the full-field development plan for the Stepnoy Leopard fields, in which the
Group holds an 80% working interest. The plan confirms 138 mmboe of gross 2P
reserves and supports phased development with first production targeted
between late 2026 and early 2027. This milestone is aligned with the Company’s
strategy to maximise utilisation of its 4.2 bcma gas processing facilities.
Cancellation of SSNs, SUNs and Ordinary Shares
Pursuant to the terms of the restructuring, which was approved by the court on
26 August 2022, the following post-reporting date events occurred:
•
•
On 4 April 2025, the Company cancelled 4,136,578 ordinary shares of £0.01
each. As a result, the issued share capital now comprises 165,244,983
ordinary shares, each carrying one vote. The Company holds no treasury
shares in its own name.
•
•
On 7 April 2025, the Company
cancelled 5 628 000 outstanding Senior
Secured Notes (SSNs) and 9 629 836 Senior Unsecured Notes (SUNs) .
176
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2024
PARENT COMPANY FINANCIAL STATEMENTS
| In thousands of US Dollars | On demand | Less than 3 months | 3-12 months | 1-5 years | More than 5 years | Total |
| As at 31 | ||||||
| December 2024 | ||||||
| Finance guarantee | – | – | – | 688,061 | – | 688,061 |
| Trade payables | 826 | – | – | – | – | 826 |
| Other current liabili`es | – | 146 | – | – | – | 146 |
| 826 | 146 | – | 688,061 | – | 689,033 | |
| As at 31 | ||||||
| December 2023 | ||||||
| Finance guarantee | – | – | – | 636,353 | – | 636,353 |
| Trade payables | 1,011 | – | – | – | – | 1,011 |
| Other current liabili`es | – | 74 | – | – | – | 74 |
| 1,011 | 74 | – | 636,353 | – | 637,438 |
End of Document
INVESTOR INFORMATION
Contact information
Investor contacts
Investor Relations
ir@nog.co.uk
Tel: +44 20 3740 7430
Registered office
Nostrum Oil & Gas PLC
20 Eastbourne Terrace
London W2 6LG
United Kingdom
Tel: +44 20 3740 7430
Registered number: 8717287
Place of registration: England and Wales
VAT GB302 9250 35
Zhaikmunai LLP registered office
Zhaikmunai LLP
43/1 Alexander Karev Street
Uralsk, 090000
Republic of Kazakhstan
Tel: +7 7112 933900
Fax: +7 7112 933901
Auditor
MHA
2 London Wall Place
Barbican, London
EC2Y 5AU
United Kingdom
Registrar
MUFG Corporate Markets
Central Square
29 Wellington Street
Leeds LS1 4DL
United Kingdom
Tel: +44 371 664 0391
Nostrum Oil & Gas BV
Activity: Holding Company
Registered office and principal place of business:
Anna van Buerenplein 41
Unit nr. 4.09A
2595 DA ‘s-Gravenhage
The Netherlands
Directors:
Thomas Hartnett
Ulugbek Makhmadiyarov
Nostrum Oil & Gas Coöperatief UA
Activity: Holding Company
Registered office and principal place of business:
Anna van Buerenplein 41
Unit nr. 4.09A
2595 DA ‘s-Gravenhage
The Netherlands
Directors:
Ulugbek Makhmadiyarov
Thomas Hartnett
Nostrum Oil & Gas Finance BV
Activity: Finance Company
Registered office and principal place of business:
Anna van Buerenplein 41
Unit nr. 4.09A
2595 DA ‘s-Gravenhage
The Netherlands
Directors:
Ulugbek Makhmadiyarov
Thomas Hartnett
Nostrum Services NV
Activity: Service company
Registered office and principal place of business:
Chaussée de Wavre 20
1360 Perwez
Belgium
Directors:
Thomas Hartnett BV
Ulugbek Makhmadiyarov
Nostrum Associated Investments LLP
Activity: Dormant
Registered office and principal place of business:
43B Karev Street
090000 Uralsk
Republic of Kazakhstan
General Director:
Malika Saudasheva
Nostrum Services Central Asia LLP
Activity: Service company
Registered office and principal place of business:
Building 75/38
Microrayon Aksay 3a
050031 Almaty
Republic of Kazakhstan
General Director:
Michael Wagner
Nostrum Oil & Gas Holding Limited
Activity: Holding company
Registered office and principal place of business:
20 Eastbourne Terrace
London W2 6LG
United Kingdom
Directors:
Ulugbek Makhmadiyarov
Thomas Hartnett
Positiv Invest LLP
Activity: Operating company
Registered office and principal place of business:
Dostyk str., 310/15
Almaty, Republic of Kazakhstan
General Director:
Damir Bastaubayev STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 177
Contact information
Investor contacts
Investor Relations
ir@nog.co.uk
Tel: +44 20 3740 7430
Registered office
Nostrum Oil & Gas PLC
20 Eastbourne Terrace
London W2 6LG
United Kingdom
Tel: +44 20 3740 7430
Registered number: 8717287
Place of registration: England and Wales
VAT GB302 9250 35
Zhaikmunai LLP registered office
Zhaikmunai LLP
43/1 Alexander Karev Street
Uralsk, 090000
Republic of Kazakhstan
Tel: +7 7112 933900
Fax: +7 7112 933901
Auditor
MHA
2 London Wall Place
Barbican, London
EC2Y 5AU
United Kingdom
Registrar
MUFG Corporate Markets
Central Square
29 Wellington Street
Leeds LS1 4DL
United Kingdom
Tel: +44 371 664 0391
Nostrum Oil & Gas BV
Activity: Holding Company
Registered office and principal place of business:
Anna van Buerenplein 41
Unit nr. 4.09A
2595 DA ‘s-Gravenhage
The Netherlands
Directors:
Thomas Hartnett
Ulugbek Makhmadiyarov
Nostrum Oil & Gas Coöperatief UA
Activity: Holding Company
Registered office and principal place of business:
Anna van Buerenplein 41
Unit nr. 4.09A
2595 DA ‘s-Gravenhage
The Netherlands
Directors:
Ulugbek Makhmadiyarov
Thomas Hartnett
Nostrum Oil & Gas Finance BV
Activity: Finance Company
Registered office and principal place of business:
Anna van Buerenplein 41
Unit nr. 4.09A
2595 DA ‘s-Gravenhage
The Netherlands
Directors:
Ulugbek Makhmadiyarov
Thomas Hartnett
Nostrum Services NV
Activity: Service company
Registered office and principal place of business:
Chaussée de Wavre 20
1360 Perwez
Belgium
Directors:
Thomas Hartnett BV
Ulugbek Makhmadiyarov
Nostrum Associated Investments LLP
Activity: Dormant
Registered office and principal place of business:
43B Karev Street
090000 Uralsk
Republic of Kazakhstan
General Director:
Malika Saudasheva
Nostrum Services Central Asia LLP
Activity: Service company
Registered office and principal place of business:
Building 75/38
Microrayon Aksay 3a
050031 Almaty
Republic of Kazakhstan
General Director:
Michael Wagner
Nostrum Oil & Gas Holding Limited
Activity: Holding company
Registered office and principal place of business:
20 Eastbourne Terrace
London W2 6LG
United Kingdom
Directors:
Ulugbek Makhmadiyarov
Thomas Hartnett
Positiv Invest LLP
Activity: Operating company
Registered office and principal place of business:
Dostyk str., 310/15
Almaty, Republic of Kazakhstan
General Director:
Damir Bastaubayev STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 177
Website and electronic communications details
Nostrum’s website provides information on the activities of the Company, both regulatory and other, as well as the opportunity to sign up
to our mailing list to ensure stakeholders are kept up to date with the most recent information. Please see www.nog.co.uk for more
information.
In addition, to reduce our impact on the environment, we encourage all shareholders to opt for electronic shareholder communications,
including annual reports and notices of meetings.
Share price information
Exchange London Stock Exchange
Ticker NOG.LN
Reuters code NOGN.L
ISIN code GB00BQVVS097
Capitalisation-weighted index of FTSE 350 E&P.
Earnings per share (as at 31 December 2024): US$(0.15)/share
Book value per share (as at 31 December 2024): US$(0.55) negative per share
Financial calendar 2025
Q1 2025 Operational and Financial results 20 May 2025
H1 2025 Operational and Financial results 19 August 2025
Q3 2025 Operational and Financial results 18 November 2025
Share price performance
Equity financing
Equity raising Timing Amount Lead manager
IPO March 2008 US$100m ING Bank NB
Secondary equity issue September 2009 US$300m ING Bank NV Mirabaud Securities
Renaissance Securities
0.00
0.01
0.02
0.03
0.04
0.05
0.06
0.07
0.08
0.09
0.10
0.11
0.12
Price (GBP)
Jan 24
Feb 24
Mar 24
Apr 24
May 24
Jun 24
Jul 24
Nov 24
Dec 24
Aug 24
Sep 24
Oct 24
Nostrum Oil & Gas PLC
INVESTOR INFORMATION
178 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Nostrum’s website provides information on the activities of the Company, both regulatory and other, as well as the opportunity to sign up
to our mailing list to ensure stakeholders are kept up to date with the most recent information. Please see www.nog.co.uk for more
information.
In addition, to reduce our impact on the environment, we encourage all shareholders to opt for electronic shareholder communications,
including annual reports and notices of meetings.
Share price information
Exchange London Stock Exchange
Ticker NOG.LN
Reuters code NOGN.L
ISIN code GB00BQVVS097
Capitalisation-weighted index of FTSE 350 E&P.
Earnings per share (as at 31 December 2024): US$(0.15)/share
Book value per share (as at 31 December 2024): US$(0.55) negative per share
Financial calendar 2025
Q1 2025 Operational and Financial results 20 May 2025
H1 2025 Operational and Financial results 19 August 2025
Q3 2025 Operational and Financial results 18 November 2025
Share price performance
Equity financing
Equity raising Timing Amount Lead manager
IPO March 2008 US$100m ING Bank NB
Secondary equity issue September 2009 US$300m ING Bank NV Mirabaud Securities
Renaissance Securities
0.00
0.01
0.02
0.03
0.04
0.05
0.06
0.07
0.08
0.09
0.10
0.11
0.12
Price (GBP)
Jan 24
Feb 24
Mar 24
Apr 24
May 24
Jun 24
Jul 24
Nov 24
Dec 24
Aug 24
Sep 24
Oct 24
Nostrum Oil & Gas PLC
INVESTOR INFORMATION
178 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Debt financing
Outstanding bond issues as at 31 December 2024 for Nostrum Oil & Gas PLC are detailed in the following table 1
:
Title Settlement Maturity Currency Amount (m) Coupon PIK Listing RegS Rule 144A
SSN Feb 2023 Jun 2026 US$ 250 5.000% — TISE CUSIP N64884AF1 66978CAF9
ISIN USN64884AF16 US66978CAF95
SUN Feb 2023 Jun 2026 US$ 300 1.000% 13.000% TISE CUSIP N64884AE4 66978CAD4
ISIN USN64884AE41 US66978CAD48
1. The following cancellations took place on 7 April 2025:
USN64884AF16 5,471,000.00
USN64884AE41 9,354,487.00
US66978CAF95 157,000.00
US66978CAD48 275,349.00
Internally held bond financing of the Nostrum Group
Bond issues wholly owned by Nostrum Oil & Gas Finance BV as at 31 December 2024 are provided in the following table :
Settlement Maturity Currency Amount (m) Coupon Listing RegS Rule 144A
Feb 2014 Jan 2033 US$ 400 9.5% Dublin/
Almaty
CUSIP N64884AA2 66978CAA0
ISIN USN64884AA29 US66978CAA09
Common
Code
103302323 103302307
Nov 2012 Jun 2033 US$ 560 9.5% Dublin/
Almaty
CUSIP N97716AA7 98953VAA0
ISIN USN97716AA72 US98953VAA08
Common
Code
085313177 085259776
Credit ratings
Nostrum Oil & Gas PLC is currently being rated by two credit rating agencies: Standard and Poor’s and Moody’s Investor Services:
Agency Rating Outlook
Standard and Poor’s SD NM
Moody’s Ca Negative
Zhaikmunai LLP is a wholly-owned indirect subsidiary of Nostrum and its equity is not listed, while Nostrum’s equity is listed on the
standard segment of the London Stock Exchange.
The Group’s investor relations programme aims to develop open and transparent communication between the Group (including
Zhaikmunai LLP) and its shareholders, providing information about the financial and operational performance of the Company. The
Investor Relations department of the Group seeks to ensure all questions received from any of the Group’s stakeholders are dealt with
in a timely manner based on the underlying principle that the Group is approachable and responsive to any potential queries.
1. The bonds issued in February 2014 were prepaid and delisted in February 2025.
Nostrum Finance BV 5.0% – 30 June 2026
Price
20/06/2024
20/07/2024
20/08/2024
20/09/2024
20/10/2024
20/11/2024
20/12/2024
41.0
41.5
42.0
42.5
43.0
43.5
44.0
44.5
45.0
45.5
46.0
Nostrum Finance BV 14.0% – 30 June 2026
Price
01/10/2024
01/11/2024
01/12/2024
01/07/2024
01/08/2024
01/09/2024
01/04/2024
01/05/2024
01/06/2024
01/01/2024
01/02/2024
01/03/2024
0
5
10
15
20
25
30 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 179
Outstanding bond issues as at 31 December 2024 for Nostrum Oil & Gas PLC are detailed in the following table 1
:
Title Settlement Maturity Currency Amount (m) Coupon PIK Listing RegS Rule 144A
SSN Feb 2023 Jun 2026 US$ 250 5.000% — TISE CUSIP N64884AF1 66978CAF9
ISIN USN64884AF16 US66978CAF95
SUN Feb 2023 Jun 2026 US$ 300 1.000% 13.000% TISE CUSIP N64884AE4 66978CAD4
ISIN USN64884AE41 US66978CAD48
1. The following cancellations took place on 7 April 2025:
USN64884AF16 5,471,000.00
USN64884AE41 9,354,487.00
US66978CAF95 157,000.00
US66978CAD48 275,349.00
Internally held bond financing of the Nostrum Group
Bond issues wholly owned by Nostrum Oil & Gas Finance BV as at 31 December 2024 are provided in the following table :
Settlement Maturity Currency Amount (m) Coupon Listing RegS Rule 144A
Feb 2014 Jan 2033 US$ 400 9.5% Dublin/
Almaty
CUSIP N64884AA2 66978CAA0
ISIN USN64884AA29 US66978CAA09
Common
Code
103302323 103302307
Nov 2012 Jun 2033 US$ 560 9.5% Dublin/
Almaty
CUSIP N97716AA7 98953VAA0
ISIN USN97716AA72 US98953VAA08
Common
Code
085313177 085259776
Credit ratings
Nostrum Oil & Gas PLC is currently being rated by two credit rating agencies: Standard and Poor’s and Moody’s Investor Services:
Agency Rating Outlook
Standard and Poor’s SD NM
Moody’s Ca Negative
Zhaikmunai LLP is a wholly-owned indirect subsidiary of Nostrum and its equity is not listed, while Nostrum’s equity is listed on the
standard segment of the London Stock Exchange.
The Group’s investor relations programme aims to develop open and transparent communication between the Group (including
Zhaikmunai LLP) and its shareholders, providing information about the financial and operational performance of the Company. The
Investor Relations department of the Group seeks to ensure all questions received from any of the Group’s stakeholders are dealt with
in a timely manner based on the underlying principle that the Group is approachable and responsive to any potential queries.
1. The bonds issued in February 2014 were prepaid and delisted in February 2025.
Nostrum Finance BV 5.0% – 30 June 2026
Price
20/06/2024
20/07/2024
20/08/2024
20/09/2024
20/10/2024
20/11/2024
20/12/2024
41.0
41.5
42.0
42.5
43.0
43.5
44.0
44.5
45.0
45.5
46.0
Nostrum Finance BV 14.0% – 30 June 2026
Price
01/10/2024
01/11/2024
01/12/2024
01/07/2024
01/08/2024
01/09/2024
01/04/2024
01/05/2024
01/06/2024
01/01/2024
01/02/2024
01/03/2024
0
5
10
15
20
25
30 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 179
GRI 2-1
GLOSSARY
2010 Notes 10.500% notes issued in 2010.
2012 Notes 7.125% notes issued in 2012.
2014 Notes 6.375% notes issued in 2014.
2017 Notes 8.000% notes issued in 2017.
2018 Notes 7.000% notes issued in 2018.
A
API American Petroleum Institute.
API gravity The industry standard method of expressing specific density of crude oil or other liquid hydrocarbons as recommended
by the American Petroleum Institute. Higher API gravities mean lower specific gravity and lighter oils. When the API
gravity is greater than 10, the product is lighter and floats on water; when it is less than 10, it is heavier than water and
sinks. Generally speaking, oil with an API gravity between 40 and 45 commands the highest prices.
appraisal well A well or wells drilled to follow up a discovery and evaluate its commercial potential.
associated gas Gas which occurs in crude oil reservoirs in a gaseous state.
B
barrel/bbl The standard unit of volume: 1 barrel = 159 litres or 42 US gallons.
basin A large area holding a thick accumulation of sedimentary rock.
bcm Billion cubic metres.
Boe Barrels of (crude) oil equivalent, i.e. the factor used by Nostrum to convert volumes of different hydrocarbon
production to barrels of oil equivalent.
Boepd Barrels of (crude) oil equivalent per day.
Bopd Barrels of crude oil per day.
C
C1 Methane.
C2 Ethane.
C3 Propane.
C4 Butane.
C5 Pentane.
C6 Hexane.
C7 Heptane.
CAC A pipeline with two branches originating in Turkmenistan and meeting in Kazakhstan before crossing into Russia and
connecting to the Russian pipeline system, with an annual throughput capacity of 60.2 billion cubic metres.
Cash Cash and cash equivalents, including current and non-current investments.
Casing Relatively thin-walled, large diameter steel rods that are screwed together to form a casing string, which is run
into a core hole or well and cemented in place.
Caspian region Parts of countries adjacent to the Caspian Sea.
CDP CDP is an organisation based in the United Kingdom which supports companies in disclosing their
environmental impact (formerly known as the Carbon Disclosure Project).
Chinarevskoye field The Chinarevskoye oil and gas condensate field.
CO2 Carbon dioxide.
commissioning Process to assure a facility or plant, such as Nostrum’s GTU 3, is tested to verify it functions according to technical
objectives and specifications before use.
Competent Authority The State’s central executive agency, designated by the Government to act on behalf of the State to exercise
rights relating to the execution and performance of subsoil use contracts, except for contracts for exploration
and production of commonly occurring minerals. This is the Ministry of Energy of the Republic of Kazakhstan
(“MOE”) with respect to the oil and gas industry.
condensate Hydrocarbons which are gaseous in a reservoir, but which condense to form a liquid as they rise to the surface
where the pressure is much less.
contingent resources Deposits that are estimated, on a given date, to be potentially recoverable from known accumulations but that
are not currently considered commercially recoverable.
cost oil Cost oil denotes an amount of crude oil produced in respect of which the market value is equal to Nostrum’s
monthly expenses that may be deducted pursuant to the PSA (q.v.) (including all operating costs, exploration
costs and development costs up to an annual maximum of 90% of the annual gross realised value of
hydrocarbon production).
crude oil A mixture of liquid hydrocarbons of different molecular weights.
Glossary
180 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
2010 Notes 10.500% notes issued in 2010.
2012 Notes 7.125% notes issued in 2012.
2014 Notes 6.375% notes issued in 2014.
2017 Notes 8.000% notes issued in 2017.
2018 Notes 7.000% notes issued in 2018.
A
API American Petroleum Institute.
API gravity The industry standard method of expressing specific density of crude oil or other liquid hydrocarbons as recommended
by the American Petroleum Institute. Higher API gravities mean lower specific gravity and lighter oils. When the API
gravity is greater than 10, the product is lighter and floats on water; when it is less than 10, it is heavier than water and
sinks. Generally speaking, oil with an API gravity between 40 and 45 commands the highest prices.
appraisal well A well or wells drilled to follow up a discovery and evaluate its commercial potential.
associated gas Gas which occurs in crude oil reservoirs in a gaseous state.
B
barrel/bbl The standard unit of volume: 1 barrel = 159 litres or 42 US gallons.
basin A large area holding a thick accumulation of sedimentary rock.
bcm Billion cubic metres.
Boe Barrels of (crude) oil equivalent, i.e. the factor used by Nostrum to convert volumes of different hydrocarbon
production to barrels of oil equivalent.
Boepd Barrels of (crude) oil equivalent per day.
Bopd Barrels of crude oil per day.
C
C1 Methane.
C2 Ethane.
C3 Propane.
C4 Butane.
C5 Pentane.
C6 Hexane.
C7 Heptane.
CAC A pipeline with two branches originating in Turkmenistan and meeting in Kazakhstan before crossing into Russia and
connecting to the Russian pipeline system, with an annual throughput capacity of 60.2 billion cubic metres.
Cash Cash and cash equivalents, including current and non-current investments.
Casing Relatively thin-walled, large diameter steel rods that are screwed together to form a casing string, which is run
into a core hole or well and cemented in place.
Caspian region Parts of countries adjacent to the Caspian Sea.
CDP CDP is an organisation based in the United Kingdom which supports companies in disclosing their
environmental impact (formerly known as the Carbon Disclosure Project).
Chinarevskoye field The Chinarevskoye oil and gas condensate field.
CO2 Carbon dioxide.
commissioning Process to assure a facility or plant, such as Nostrum’s GTU 3, is tested to verify it functions according to technical
objectives and specifications before use.
Competent Authority The State’s central executive agency, designated by the Government to act on behalf of the State to exercise
rights relating to the execution and performance of subsoil use contracts, except for contracts for exploration
and production of commonly occurring minerals. This is the Ministry of Energy of the Republic of Kazakhstan
(“MOE”) with respect to the oil and gas industry.
condensate Hydrocarbons which are gaseous in a reservoir, but which condense to form a liquid as they rise to the surface
where the pressure is much less.
contingent resources Deposits that are estimated, on a given date, to be potentially recoverable from known accumulations but that
are not currently considered commercially recoverable.
cost oil Cost oil denotes an amount of crude oil produced in respect of which the market value is equal to Nostrum’s
monthly expenses that may be deducted pursuant to the PSA (q.v.) (including all operating costs, exploration
costs and development costs up to an annual maximum of 90% of the annual gross realised value of
hydrocarbon production).
crude oil A mixture of liquid hydrocarbons of different molecular weights.
Glossary
180 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
D
development During development, engineering teams design the most efficient development options to build wells and
associated infrastructure to produce hydrocarbons from a gas field within a proven productive reservoir (as
defined by exploration and appraisal activities). The three phases of development are exploration and appraisal,
development and production.
downstream Downstream refers to all petroleum operations occurring after delivery of crude oil or gas to a refinery or
fractionation plant.
Development Plans The development plans approved by the SCFD in March 2009.
Directors or Board The Directors of the Company.
dry gas Dry gas is natural gas (methane and ethane) with no significant content of heavier hydrocarbons. It is gaseous at
both sub-surface and surface conditions.
E
E&P Exploration and production.
EBITDA Profit before tax + non-recurring expenses + finance costs + foreign exchange loss /(gain) + employee share
option adjustments + depreciation – interest income + other expenses / (income).
Environmental Code The Kazakhstan Environment Code (No. 212, dated 9 January 2007, as amended).
Exploration Permit The geological allotment (Annex to the Licence) issued by the Competent Authority to Zhaikmunai LLP.
exploration phase The phase of operations which covers the search for oil or gas by carrying out detailed geological and
geophysical surveys, followed up where appropriate by exploratory drilling.
exploration well Well drilled purely for exploratory (information-gathering) purposes in a particular area.
F
farm-in Transfer of a percentage of an oil or gas permit held by the farmor in return for (partial or complete) delivery of
the work programme by the farmee(s). Note that this work would normally have had to have been delivered and
paid for by the farmor.
farm-out A contractual agreement with the holder of an oil and gas permit to assign all (or a percentage of) that interest to
another party in exchange for delivering the work programme required by the permit, or fulfilling other
contractually specified conditions.
FCA Financial Conduct Authority of the United Kingdom.
FCA Uralsk Sales made under free carrier terms according to which Nostrum delivers to the terminal in Uralsk and
transportation risk and risk of loss are transferred to the buyer after delivery to the carrier.
field An area consisting of a single reservoir or multiple reservoirs all grouped in or related to the same individual
geological structure feature and/or stratigraphic condition.
FOB Sales made under “free on board” terms.
FSU Former Soviet Union.
FY 2023 Twelve months ended 31 December 2023.
FY 2024 Twelve months ended 31 December 2024.
G
G&A General and administrative expenses.
gas Petroleum that consists principally of light hydrocarbons. It can be divided into lean gas, primarily methane, but
often containing some ethane and smaller quantities of heavier hydrocarbons (also called sales gas), and wet
gas, primarily ethane, propane and butane, as well as smaller amounts of heavier hydrocarbons; partially liquid
under atmospheric pressure.
gas condensate The mixture of liquid hydrocarbons that results from condensation of petroleum hydrocarbons existing initially in
a gaseous phase in an underground reservoir.
Gas Treatment Facility
(GTF)
Facility for the treatment of associated gas and gas condensate resulting in different products (stabilised
condensate, LPG and dry gas) for commercial sales.
GTU 1 means the first unit of Nostrum’s Gas Treatment Facility.
GTU 2 means the second unit of Nostrum’s Gas Treatment Facility.
GTU 3 means the third unit of Nostrum’s Gas Treatment Facility.
GDRs The global depository receipts of Nostrum Oil & Gas LP.
greenhouse gas A gas that contributes to the greenhouse effect by absorbing infrared radiation, e.g. carbon dioxide.
Group or Company
or Nostrum
Nostrum Oil & Gas PLC and, as the context requires, its direct and indirect consolidated subsidiaries. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 181
development During development, engineering teams design the most efficient development options to build wells and
associated infrastructure to produce hydrocarbons from a gas field within a proven productive reservoir (as
defined by exploration and appraisal activities). The three phases of development are exploration and appraisal,
development and production.
downstream Downstream refers to all petroleum operations occurring after delivery of crude oil or gas to a refinery or
fractionation plant.
Development Plans The development plans approved by the SCFD in March 2009.
Directors or Board The Directors of the Company.
dry gas Dry gas is natural gas (methane and ethane) with no significant content of heavier hydrocarbons. It is gaseous at
both sub-surface and surface conditions.
E
E&P Exploration and production.
EBITDA Profit before tax + non-recurring expenses + finance costs + foreign exchange loss /(gain) + employee share
option adjustments + depreciation – interest income + other expenses / (income).
Environmental Code The Kazakhstan Environment Code (No. 212, dated 9 January 2007, as amended).
Exploration Permit The geological allotment (Annex to the Licence) issued by the Competent Authority to Zhaikmunai LLP.
exploration phase The phase of operations which covers the search for oil or gas by carrying out detailed geological and
geophysical surveys, followed up where appropriate by exploratory drilling.
exploration well Well drilled purely for exploratory (information-gathering) purposes in a particular area.
F
farm-in Transfer of a percentage of an oil or gas permit held by the farmor in return for (partial or complete) delivery of
the work programme by the farmee(s). Note that this work would normally have had to have been delivered and
paid for by the farmor.
farm-out A contractual agreement with the holder of an oil and gas permit to assign all (or a percentage of) that interest to
another party in exchange for delivering the work programme required by the permit, or fulfilling other
contractually specified conditions.
FCA Financial Conduct Authority of the United Kingdom.
FCA Uralsk Sales made under free carrier terms according to which Nostrum delivers to the terminal in Uralsk and
transportation risk and risk of loss are transferred to the buyer after delivery to the carrier.
field An area consisting of a single reservoir or multiple reservoirs all grouped in or related to the same individual
geological structure feature and/or stratigraphic condition.
FOB Sales made under “free on board” terms.
FSU Former Soviet Union.
FY 2023 Twelve months ended 31 December 2023.
FY 2024 Twelve months ended 31 December 2024.
G
G&A General and administrative expenses.
gas Petroleum that consists principally of light hydrocarbons. It can be divided into lean gas, primarily methane, but
often containing some ethane and smaller quantities of heavier hydrocarbons (also called sales gas), and wet
gas, primarily ethane, propane and butane, as well as smaller amounts of heavier hydrocarbons; partially liquid
under atmospheric pressure.
gas condensate The mixture of liquid hydrocarbons that results from condensation of petroleum hydrocarbons existing initially in
a gaseous phase in an underground reservoir.
Gas Treatment Facility
(GTF)
Facility for the treatment of associated gas and gas condensate resulting in different products (stabilised
condensate, LPG and dry gas) for commercial sales.
GTU 1 means the first unit of Nostrum’s Gas Treatment Facility.
GTU 2 means the second unit of Nostrum’s Gas Treatment Facility.
GTU 3 means the third unit of Nostrum’s Gas Treatment Facility.
GDRs The global depository receipts of Nostrum Oil & Gas LP.
greenhouse gas A gas that contributes to the greenhouse effect by absorbing infrared radiation, e.g. carbon dioxide.
Group or Company
or Nostrum
Nostrum Oil & Gas PLC and, as the context requires, its direct and indirect consolidated subsidiaries. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 181
H
HSE Health, safety and environment.
hydrocarbons Compounds formed from the elements hydrogen (H) and carbon (C), which may be in solid, liquid or gaseous
form.
hydrocarbon reserves Hydrocarbon reserves that have been proved, and are referred to as 3P, 2P and 1P depending on the likelihood
of commercial production from a given field.
I
IAS International Accounting Standards.
IFRS International Financial Reporting Standards.
INED Independent Non-Executive Director.
IPIECA International Petroleum Industry Environmental Conservation Association.
J
joint venture A joint venture is a set of trading entities who have agreed to act in concert to share the cost and rewards of
exploring for and producing oil or gas from a permit.
joule Unit of energy used for measuring gas volumes.
megajoules = 106
gigajoules = 109
terrajoules = 1012
petajoules = 1015
K
KASE Kazakhstan Stock Exchange.
Kazakhstan The Republic of Kazakhstan.
KazMunaiGas State-owned oil and gas company of Kazakhstan.
KazMunaiGas
Exploration Production
(“KMG EP”)
Onshore oil and gas exploration production subsidiary of KazMunaiGas.
KazTransOil (KTO)
pipeline
A tie-in to the KTO pipeline enables crude oil export sales via the Atyrau-Samara international export pipeline.
L
Licence Licence series MG No. 253-D (Oil) issued to Zhaikmunai LLP by the Government on 26 May 1997, including
amendments.
Licensing Law The Kazakhstan Law “On Licensing” (No. 214, dated 11 January 2007, as amended, which came into effect on 9
August 2007).
liquids A sales product in liquid form produced as a result of further processing by the onshore plant; for example,
condensate and LPG.
LNG Liquefied natural gas. Comprises mainly methane.
Listing Rules The listing rules made by the Financial Services Authority (FSA) under section 73A of the FSMA.
LSE London Stock Exchange.
LPG Liquefied petroleum gas, the name given to the mix of propane and butane in its liquid state.
LTIP Long-term incentive plan.
M
m Metre(s).
m 3 Cubic metres.
m 3
/d Cubic metres per day.
Man–hour An hour regarded in terms of the amount of work that can be done by one person within this period.
Mboe Thousands of barrels of oil equivalent.
Mechanical completion Final construction or installation phase, after which a facility can undergo commissioning activities.
Mmbbls Millions of barrels of oil.
Mmboe Millions of barrels of oil equivalent.
Mmcf Million cubic feet
GLOSSARY
182 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
HSE Health, safety and environment.
hydrocarbons Compounds formed from the elements hydrogen (H) and carbon (C), which may be in solid, liquid or gaseous
form.
hydrocarbon reserves Hydrocarbon reserves that have been proved, and are referred to as 3P, 2P and 1P depending on the likelihood
of commercial production from a given field.
I
IAS International Accounting Standards.
IFRS International Financial Reporting Standards.
INED Independent Non-Executive Director.
IPIECA International Petroleum Industry Environmental Conservation Association.
J
joint venture A joint venture is a set of trading entities who have agreed to act in concert to share the cost and rewards of
exploring for and producing oil or gas from a permit.
joule Unit of energy used for measuring gas volumes.
megajoules = 106
gigajoules = 109
terrajoules = 1012
petajoules = 1015
K
KASE Kazakhstan Stock Exchange.
Kazakhstan The Republic of Kazakhstan.
KazMunaiGas State-owned oil and gas company of Kazakhstan.
KazMunaiGas
Exploration Production
(“KMG EP”)
Onshore oil and gas exploration production subsidiary of KazMunaiGas.
KazTransOil (KTO)
pipeline
A tie-in to the KTO pipeline enables crude oil export sales via the Atyrau-Samara international export pipeline.
L
Licence Licence series MG No. 253-D (Oil) issued to Zhaikmunai LLP by the Government on 26 May 1997, including
amendments.
Licensing Law The Kazakhstan Law “On Licensing” (No. 214, dated 11 January 2007, as amended, which came into effect on 9
August 2007).
liquids A sales product in liquid form produced as a result of further processing by the onshore plant; for example,
condensate and LPG.
LNG Liquefied natural gas. Comprises mainly methane.
Listing Rules The listing rules made by the Financial Services Authority (FSA) under section 73A of the FSMA.
LSE London Stock Exchange.
LPG Liquefied petroleum gas, the name given to the mix of propane and butane in its liquid state.
LTIP Long-term incentive plan.
M
m Metre(s).
m 3 Cubic metres.
m 3
/d Cubic metres per day.
Man–hour An hour regarded in terms of the amount of work that can be done by one person within this period.
Mboe Thousands of barrels of oil equivalent.
Mechanical completion Final construction or installation phase, after which a facility can undergo commissioning activities.
Mmbbls Millions of barrels of oil.
Mmboe Millions of barrels of oil equivalent.
Mmcf Million cubic feet
GLOSSARY
182 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
N
NBK National Bank of Kazakhstan.
NED Non-Executive Director.
Nostrum Nostrum Oil & Gas PLC, the listed company of the Group.
Nostrum Oil & Gas PLC Registered Office:
9th Floor
20 Eastbourne Terrace
London
W2 6LG
United Kingdom
O
OPEC The Organisation of the Petroleum Exporting Countries.
operator The individual or company responsible for conducting oil and gas exploration, development and production
activities on an oil and gas lease or concession on its own behalf and/or if applicable,
for other working interest owners, generally pursuant to the terms of a joint operating agreement
or comparable agreement.
P
Partnership Nostrum Oil & Gas LP, which was the holding company of the Group before the reorganisation.
PCR testing Polymerase chain reaction testing, a test for COVID-19.
petroleum Hydrocarbons, whether solid, liquid or gaseous. The proportion of different compounds in a petroleum find varies
from discovery to discovery. If a reservoir primarily contains light hydrocarbons, it is described as a gas field. If
heavier hydrocarbons predominate, it is called an oil field. An oil field may feature free gas above the oil and
contain a quantity of light hydrocarbons, also called associated gas.
Possible Reserves (3P) Possible Reserves are those reserves that, to a low degree of certainty (10% confidence), are recoverable. There
is relatively high risk associated with these reserves. Proven, Probable and Possible Reserves are referred to as
3P.
Probable Reserves (2P) Probable Reserves are those reserves that analysis of geological and engineering data suggests are more likely
than not to be recoverable. There is at least a 50% probability that reserves recovered will exceed Probable
Reserves. Proven plus Probable Reserves are referred to as 2P.
processing Processing of saleable product from hydrocarbons sourced from oil wells and gas wells.
Production Permit The mining allotment (Annex to the Licence), issued by the Competent Authority to Zhaikmunai LLP.
production well A well that has been drilled for producing oil or gas, or one that is capable of production once the producing
structure and characteristics are determined.
Profit oil Profit oil is the difference between cost oil and the total amount of crude oil produced each month, which is
shared between the State and Zhaikmunai LLP.
Prospective resources Quantities of petroleum which are estimated, on a given date, to be potentially recoverable from undiscovered
accumulations.
Proven Reserves (1P) Proven or Proved Reserves (1P) are those reserves that, to a high degree of certainty (90% confidence), are
recoverable. There is relatively little risk associated with these reserves. Proven Developed Reserves are reserves
that can be recovered from existing wells with existing infrastructure and operating methods. Proven
Undeveloped Reserves require development.
PRMS 2007 Petroleum Resources Management System, which is a set of definitions and guidelines designed to provide
a common reference for the international petroleum industry, sponsored by the Society for Petroleum Engineers,
the American Association of Petroleum Geologists, the World Petroleum Council and the Society for Petroleum
Evaluation Engineers.
Production Sharing
Agreement (PSA)
The contract for additional exploration, production and production sharing of crude oil hydrocarbons in the
Chinarevskoye oil and gas condensate field in the West-Kazakhstan oblast No. 81, dated October 31 1997, as
amended, between Zhaikmunai LLP and the Competent Authority (currently MOE), representing the State.
PSA Law Kazakhstan Law No. 68-III “On Production Sharing Agreements for Constructing Offshore Petroleum
Operations”, dated 8 July 2005.
Q
QHSE Quality, Health, Safety and the Environment.
R
recovery The second stage of hydrocarbon production during which an external fluid such as water or gas is injected into the
reservoir to maintain reservoir pressure and displace hydrocarbons towards the wellbore.
Reservoir A porous and permeable underground formation containing a natural accumulation of producible oil and/or gas
that is confined by impermeable rock or water barriers, and is individual and separate from other reservoirs.
RoK Republic of Kazakhstan.
Royalty An interest in an oil and gas property entitling the owner to a share of oil or gas production free of costs of
production. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 183
NBK National Bank of Kazakhstan.
NED Non-Executive Director.
Nostrum Nostrum Oil & Gas PLC, the listed company of the Group.
Nostrum Oil & Gas PLC Registered Office:
9th Floor
20 Eastbourne Terrace
London
W2 6LG
United Kingdom
O
OPEC The Organisation of the Petroleum Exporting Countries.
operator The individual or company responsible for conducting oil and gas exploration, development and production
activities on an oil and gas lease or concession on its own behalf and/or if applicable,
for other working interest owners, generally pursuant to the terms of a joint operating agreement
or comparable agreement.
P
Partnership Nostrum Oil & Gas LP, which was the holding company of the Group before the reorganisation.
PCR testing Polymerase chain reaction testing, a test for COVID-19.
petroleum Hydrocarbons, whether solid, liquid or gaseous. The proportion of different compounds in a petroleum find varies
from discovery to discovery. If a reservoir primarily contains light hydrocarbons, it is described as a gas field. If
heavier hydrocarbons predominate, it is called an oil field. An oil field may feature free gas above the oil and
contain a quantity of light hydrocarbons, also called associated gas.
Possible Reserves (3P) Possible Reserves are those reserves that, to a low degree of certainty (10% confidence), are recoverable. There
is relatively high risk associated with these reserves. Proven, Probable and Possible Reserves are referred to as
3P.
Probable Reserves (2P) Probable Reserves are those reserves that analysis of geological and engineering data suggests are more likely
than not to be recoverable. There is at least a 50% probability that reserves recovered will exceed Probable
Reserves. Proven plus Probable Reserves are referred to as 2P.
processing Processing of saleable product from hydrocarbons sourced from oil wells and gas wells.
Production Permit The mining allotment (Annex to the Licence), issued by the Competent Authority to Zhaikmunai LLP.
production well A well that has been drilled for producing oil or gas, or one that is capable of production once the producing
structure and characteristics are determined.
Profit oil Profit oil is the difference between cost oil and the total amount of crude oil produced each month, which is
shared between the State and Zhaikmunai LLP.
Prospective resources Quantities of petroleum which are estimated, on a given date, to be potentially recoverable from undiscovered
accumulations.
Proven Reserves (1P) Proven or Proved Reserves (1P) are those reserves that, to a high degree of certainty (90% confidence), are
recoverable. There is relatively little risk associated with these reserves. Proven Developed Reserves are reserves
that can be recovered from existing wells with existing infrastructure and operating methods. Proven
Undeveloped Reserves require development.
PRMS 2007 Petroleum Resources Management System, which is a set of definitions and guidelines designed to provide
a common reference for the international petroleum industry, sponsored by the Society for Petroleum Engineers,
the American Association of Petroleum Geologists, the World Petroleum Council and the Society for Petroleum
Evaluation Engineers.
Production Sharing
Agreement (PSA)
The contract for additional exploration, production and production sharing of crude oil hydrocarbons in the
Chinarevskoye oil and gas condensate field in the West-Kazakhstan oblast No. 81, dated October 31 1997, as
amended, between Zhaikmunai LLP and the Competent Authority (currently MOE), representing the State.
PSA Law Kazakhstan Law No. 68-III “On Production Sharing Agreements for Constructing Offshore Petroleum
Operations”, dated 8 July 2005.
Q
QHSE Quality, Health, Safety and the Environment.
R
recovery The second stage of hydrocarbon production during which an external fluid such as water or gas is injected into the
reservoir to maintain reservoir pressure and displace hydrocarbons towards the wellbore.
Reservoir A porous and permeable underground formation containing a natural accumulation of producible oil and/or gas
that is confined by impermeable rock or water barriers, and is individual and separate from other reservoirs.
RoK Republic of Kazakhstan.
Royalty An interest in an oil and gas property entitling the owner to a share of oil or gas production free of costs of
production. STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 183
S
sales gas Natural gas that has been processed by gas plant facilities and meets the required specifications under gas sales
agreements.
seismic The use of shock waves generated by controlled explosions of dynamite or other means to ascertain the nature
and contours of underground geological structures.
shut in Cease production from a well.
side-track well A well or borehole that runs partly to one side of the original line of drilling.
SL fields Stepnoy Leopard fields
social infrastructure Assets that accommodate social services, e.g. hospitals, schools, community housing etc.
spud The commencement of drilling operations.
stakeholder A person or entity who may affect, be affected by or perceive themselves to be affected by an entity’s decisions
or activities.
State Republic of Kazakhstan.
State share The share of hydrocarbon production due (in cash or kind) to the Republic of Kazakhstan under the PSA (q.v.).
Suspended well A suspended well is not currently used for assessment or production and has been shut in. It will either be
returned to assessment or production, or will be plugged and abandoned.
T
TCFD Task Force on Climate-related Financial Disclosures.
TISE The International Stock Exchange
tenge or KZT The lawful currency of the Republic of Kazakhstan.
tonne Metric tonne.
trillion 10 to the power of 12.
U
UNGG Refers to the Uralsk Oil and Gas Explorations Expedition. The Government of the Kazakh Soviet Socialist
Republic decided in March 1960 to create a consortium “Uralskneftegazrazvedka” for conducting oil and gas
exploration in the Uralsk region. In the 1960s, the consortium was involved in more than 59 exploration projects.
In 1970, the consortium was renamed “Uralsk Enlarged Oil-Gas Exploration Expedition”.
UK Corporate
Governance Code
Set of principles of good corporate governance for listed companies promulgated by the UK Financial Reporting
Council.
Ural O&G Ural Oil&Gas LLP
W
well A hole drilled to test an unknown reservoir or to produce from a known reservoir.
wellhead The wellhead includes the forged or cast steel fitting on top of a well (welded or bolted to the top of the surface
casing), as well as casingheads, tubingheads, Christmas tree, stuffing box and pressure gauges.
work programme A schedule of works agreed between parties (permit holders, farmees and government) contracted to be
delivered in a defined timeframe.
workover Routine maintenance or remedial operations on a producing well in order to maintain, restore or increase
production.
WUP or Water Use
Permit
The permit granted by the relevant government authority with respect to water use pursuant to the Water Code.
Z
Zhaikmunai LLP Principal operating entity of the Group
Corporate office:
43/1 Karev str.
Uralsk, 090000
Republic of Kazakhstan
GLOSSARY
184 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
sales gas Natural gas that has been processed by gas plant facilities and meets the required specifications under gas sales
agreements.
seismic The use of shock waves generated by controlled explosions of dynamite or other means to ascertain the nature
and contours of underground geological structures.
shut in Cease production from a well.
side-track well A well or borehole that runs partly to one side of the original line of drilling.
SL fields Stepnoy Leopard fields
social infrastructure Assets that accommodate social services, e.g. hospitals, schools, community housing etc.
spud The commencement of drilling operations.
stakeholder A person or entity who may affect, be affected by or perceive themselves to be affected by an entity’s decisions
or activities.
State Republic of Kazakhstan.
State share The share of hydrocarbon production due (in cash or kind) to the Republic of Kazakhstan under the PSA (q.v.).
Suspended well A suspended well is not currently used for assessment or production and has been shut in. It will either be
returned to assessment or production, or will be plugged and abandoned.
T
TCFD Task Force on Climate-related Financial Disclosures.
TISE The International Stock Exchange
tenge or KZT The lawful currency of the Republic of Kazakhstan.
tonne Metric tonne.
trillion 10 to the power of 12.
U
UNGG Refers to the Uralsk Oil and Gas Explorations Expedition. The Government of the Kazakh Soviet Socialist
Republic decided in March 1960 to create a consortium “Uralskneftegazrazvedka” for conducting oil and gas
exploration in the Uralsk region. In the 1960s, the consortium was involved in more than 59 exploration projects.
In 1970, the consortium was renamed “Uralsk Enlarged Oil-Gas Exploration Expedition”.
UK Corporate
Governance Code
Set of principles of good corporate governance for listed companies promulgated by the UK Financial Reporting
Council.
Ural O&G Ural Oil&Gas LLP
W
well A hole drilled to test an unknown reservoir or to produce from a known reservoir.
wellhead The wellhead includes the forged or cast steel fitting on top of a well (welded or bolted to the top of the surface
casing), as well as casingheads, tubingheads, Christmas tree, stuffing box and pressure gauges.
work programme A schedule of works agreed between parties (permit holders, farmees and government) contracted to be
delivered in a defined timeframe.
workover Routine maintenance or remedial operations on a producing well in order to maintain, restore or increase
production.
WUP or Water Use
Permit
The permit granted by the relevant government authority with respect to water use pursuant to the Water Code.
Z
Zhaikmunai LLP Principal operating entity of the Group
Corporate office:
43/1 Karev str.
Uralsk, 090000
Republic of Kazakhstan
GLOSSARY
184 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
GRI content index
GRI CONTENT INDEX
GRI standard Disclosure
GRI sector
standard
ref. No. Location Page
GRI 2: General
Disclosures
2-1 Organizational details
2-2 Entities included in the organization’s
sustainability reporting
2-3 Reporting period, frequency and contact point
2-6 Activities, value chain and other business
relationships
Strategic report – Creating value for our
stakeholders
Strategic report – Our products
Strategic report – Showcasing our infrastructure
6-7
24-25
32-33
2-7 Employees ESG review – Empowering our people 63
2-8 Workers who are not employees ESG review – Contractors 57
2-9 Governance structure and composition Corporate governance – Board of Directors
Corporate Governance – Our Governance
framework
90-91
96
2-10 Nomination and selection of the highest
governance body
Corporate governance – Nomination and
Governance Committee report
106
2-11 Chair of the highest governance body Corporate Governance – Our Governance
framework
96
2-12 Role of the highest governance body in
overseeing the management of impacts
2-13 Delegation of responsibility for managing
impacts
Strategic report – Climate-related Financial
Disclosures
79
2-14 Role of the highest governance body in
sustainability reporting
Strategic report – Climate-related Financial
Disclosures
79
2-15 Conflicts of interest Our governance framework – Conflicts of interest 98
2-16 Communication of critical concerns
2-17 Collective knowledge of the highest
governance body
2-18 Evaluation of the performance of the highest
governance body
2-19 Remuneration policies Remuneration Committee report – Statement
from the Remuneration Committee Chairman
107-108
2-20 Process to determine remuneration
2-21 Annual total compensation ratio
2-22 Statement on sustainable development
strategy
2-23 Policy commitments Corporate Governance – Board policies and
governance arrangements;
Corporate Governance – Bribery, corruption and
whistleblowing;
Our people – Human Rights Policy:
Our people – Modern Slavery Act Statement
91
98
66
66
2-24 Embedding policy commitments
2-25 Processes to remediate negative impacts Health and safety – Emergency response and
accidents preparatory activities;
Health and safety – Oil spill prevention
59
60
2-26 Mechanisms for seeking advice and raising
concerns
Our people – Workforce representation 66
2-27 Compliance with laws and regulations
2-28 Membership associations
2-29 Approach to stakeholder engagement Stakeholder engagement – Understanding our
stakeholders
20-21
2-30 Collective bargaining agreements STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 185
GRI CONTENT INDEX
GRI standard Disclosure
GRI sector
standard
ref. No. Location Page
GRI 2: General
Disclosures
2-1 Organizational details
2-2 Entities included in the organization’s
sustainability reporting
2-3 Reporting period, frequency and contact point
2-6 Activities, value chain and other business
relationships
Strategic report – Creating value for our
stakeholders
Strategic report – Our products
Strategic report – Showcasing our infrastructure
6-7
24-25
32-33
2-7 Employees ESG review – Empowering our people 63
2-8 Workers who are not employees ESG review – Contractors 57
2-9 Governance structure and composition Corporate governance – Board of Directors
Corporate Governance – Our Governance
framework
90-91
96
2-10 Nomination and selection of the highest
governance body
Corporate governance – Nomination and
Governance Committee report
106
2-11 Chair of the highest governance body Corporate Governance – Our Governance
framework
96
2-12 Role of the highest governance body in
overseeing the management of impacts
2-13 Delegation of responsibility for managing
impacts
Strategic report – Climate-related Financial
Disclosures
79
2-14 Role of the highest governance body in
sustainability reporting
Strategic report – Climate-related Financial
Disclosures
79
2-15 Conflicts of interest Our governance framework – Conflicts of interest 98
2-16 Communication of critical concerns
2-17 Collective knowledge of the highest
governance body
2-18 Evaluation of the performance of the highest
governance body
2-19 Remuneration policies Remuneration Committee report – Statement
from the Remuneration Committee Chairman
107-108
2-20 Process to determine remuneration
2-21 Annual total compensation ratio
2-22 Statement on sustainable development
strategy
2-23 Policy commitments Corporate Governance – Board policies and
governance arrangements;
Corporate Governance – Bribery, corruption and
whistleblowing;
Our people – Human Rights Policy:
Our people – Modern Slavery Act Statement
91
98
66
66
2-24 Embedding policy commitments
2-25 Processes to remediate negative impacts Health and safety – Emergency response and
accidents preparatory activities;
Health and safety – Oil spill prevention
59
60
2-26 Mechanisms for seeking advice and raising
concerns
Our people – Workforce representation 66
2-27 Compliance with laws and regulations
2-28 Membership associations
2-29 Approach to stakeholder engagement Stakeholder engagement – Understanding our
stakeholders
20-21
2-30 Collective bargaining agreements STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 185
GRI standard
Disclosure
GRI sector
standard
ref. No. Location Page
GRI 3: Material
Topics
3-1 Process to determine material topics ESG review – Material ESG topics 54-55
3-2 List of material topics
3-3 Management of material topics
GRI 201: Economic
Performance
201-1 Direct economic value generated and
distributed
11.14.2,
11.21.2
Strategic report – Financial review 45-51
201-2 Financial implications and other risks and
opportunities due to climate change
11.2.2 Strategic report – Climate-related Financial
Disclosures
79
201-3 Defined benefit plan obligations and other
retirement plans
201-4 Financial assistance received from
government
11.21.3
GRI 202: Market
Presence
202-1 Ratios of standard entry level wage by
gender compared to local minimum wage
202-2 Proportion of senior management hired from
the local community
11.14.3
GRI 203-1: Indirect
Economic Impacts
203-1 Infrastructure investments and services
supported
11.14.4 ESG review – Social responsibility 67-68
203-2 Significant indirect economic impacts 11.14.5 Stakeholder engagement – Understanding our
stakeholders
20-21
GRI 204:
Procurement
Practices
204-1 Proportion of spending on local suppliers 11.14.6 Social Responsibility – Economic responsibility:
Spend with local suppliers
68
GRI 205:
Anti-corruption
205-1 Operations assessed for risks related to
corruption
11.20.2 Corporate Governance – Bribery, corruption and
whistleblowing
Risk management – Principal risks and
uncertainties – Other Risks
98
42
205-2 Communication and training about
anti-corruption policies and procedures
11.20.3 Corporate Governance – Bribery, corruption and
whistleblowing
98
205-3 Confirmed incidents of corruption and
actions taken
11.20.4 Corporate Governance – Bribery, corruption and
whistleblowing 98
GRI 207: Tax 207-4 Country-by-country reporting 11.21.7 Strategic report – Financial review
Social Responsibility – Civil duty: Payment to
governments
45-51
68
GRI 302: Energy 302-1 Energy consumption within the organization 11.1.2 Environmental stewardship – Renewable energy
use
74
GRI 303: Water
and Effluents
303-1 Interactions with water as a shared resource 11.6.2 Environmental stewardship – Waste, water and soil
management
73
303-2 Management of water discharge related
impacts
11.6.3 Environmental stewardship – Waste, water and soil
management
73
303-3 Water withdrawal 11.6.4 Environmental stewardship – Waste, water and soil
management
73
303-4 Water discharge 11.6.5 Environmental stewardship – Waste, water and soil
management
74
GRI 305:
Emissions
305-1 Direct (Scope 1) GHG emissions 11.1.5 Environmental stewardship – GHG emissions
reporting approach
Environmental stewardship – GHG emission result
70
75-76
305-2 Energy indirect (Scope 2) GHG emissions 11.1.6 Environmental stewardship – GHG emissions
reporting approach
Environmental stewardship – GHG emission
results
70
75-76
305-3 Other indirect (Scope 3) GHG emissions 11.1.7 Environmental stewardship – GHG emission
results
75-76
305-4 GHG emissions intensity 11.1.8 Environmental stewardship – GHG emission
results
75
305-5 Reduction of GHG emissions 11.2.3 Environmental stewardship – Current and future
GHG reduction initiatives
71-72
305-7 Nitrogen oxides (NOx), sulfur oxides (SOx),
and other significant air emissions
11.3.2 Environmental stewardship – Climate change 69
GRI CONTENT INDEX
186 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
GRI sector
standard
ref. No. Location Page
GRI 3: Material
Topics
3-1 Process to determine material topics ESG review – Material ESG topics 54-55
3-2 List of material topics
3-3 Management of material topics
GRI 201: Economic
Performance
201-1 Direct economic value generated and
distributed
11.14.2,
11.21.2
Strategic report – Financial review 45-51
201-2 Financial implications and other risks and
opportunities due to climate change
11.2.2 Strategic report – Climate-related Financial
Disclosures
79
201-3 Defined benefit plan obligations and other
retirement plans
201-4 Financial assistance received from
government
11.21.3
GRI 202: Market
Presence
202-1 Ratios of standard entry level wage by
gender compared to local minimum wage
202-2 Proportion of senior management hired from
the local community
11.14.3
GRI 203-1: Indirect
Economic Impacts
203-1 Infrastructure investments and services
supported
11.14.4 ESG review – Social responsibility 67-68
203-2 Significant indirect economic impacts 11.14.5 Stakeholder engagement – Understanding our
stakeholders
20-21
GRI 204:
Procurement
Practices
204-1 Proportion of spending on local suppliers 11.14.6 Social Responsibility – Economic responsibility:
Spend with local suppliers
68
GRI 205:
Anti-corruption
205-1 Operations assessed for risks related to
corruption
11.20.2 Corporate Governance – Bribery, corruption and
whistleblowing
Risk management – Principal risks and
uncertainties – Other Risks
98
42
205-2 Communication and training about
anti-corruption policies and procedures
11.20.3 Corporate Governance – Bribery, corruption and
whistleblowing
98
205-3 Confirmed incidents of corruption and
actions taken
11.20.4 Corporate Governance – Bribery, corruption and
whistleblowing 98
GRI 207: Tax 207-4 Country-by-country reporting 11.21.7 Strategic report – Financial review
Social Responsibility – Civil duty: Payment to
governments
45-51
68
GRI 302: Energy 302-1 Energy consumption within the organization 11.1.2 Environmental stewardship – Renewable energy
use
74
GRI 303: Water
and Effluents
303-1 Interactions with water as a shared resource 11.6.2 Environmental stewardship – Waste, water and soil
management
73
303-2 Management of water discharge related
impacts
11.6.3 Environmental stewardship – Waste, water and soil
management
73
303-3 Water withdrawal 11.6.4 Environmental stewardship – Waste, water and soil
management
73
303-4 Water discharge 11.6.5 Environmental stewardship – Waste, water and soil
management
74
GRI 305:
Emissions
305-1 Direct (Scope 1) GHG emissions 11.1.5 Environmental stewardship – GHG emissions
reporting approach
Environmental stewardship – GHG emission result
70
75-76
305-2 Energy indirect (Scope 2) GHG emissions 11.1.6 Environmental stewardship – GHG emissions
reporting approach
Environmental stewardship – GHG emission
results
70
75-76
305-3 Other indirect (Scope 3) GHG emissions 11.1.7 Environmental stewardship – GHG emission
results
75-76
305-4 GHG emissions intensity 11.1.8 Environmental stewardship – GHG emission
results
75
305-5 Reduction of GHG emissions 11.2.3 Environmental stewardship – Current and future
GHG reduction initiatives
71-72
305-7 Nitrogen oxides (NOx), sulfur oxides (SOx),
and other significant air emissions
11.3.2 Environmental stewardship – Climate change 69
GRI CONTENT INDEX
186 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
GRI standard
Disclosure
GRI sector
standard
ref. No. Location Page
GRI 306: Waste 306-1 Waste generation and significant waste-
related impacts
11.5.2 Environmental stewardship – Waste, water and soil
management
72
306-2 Management of significant waste related
impacts
11.5.3 Environmental stewardship – Waste, water and
soil management
72
306-3 Waste generated 11.5.4 Environmental stewardship – Waste, water and
soil management
72
306-4. Waste diverted from disposal 11.5.5 Environmental stewardship – Waste, water and
soil management
73
306-5 Waste directed to disposal 11.5.6 Environmental stewardship – Waste, water and soil
management
73
GRI 401:
Employment
401-1 New employee hires and employee turnover 11.10.2 Empowering our people – Hiring and staff
turnover
66
401-2 Benefits provided to full-time employees
that are not provided to temporary or part time
employees
11.10.3 Empowering our people –Employee relations and
social guarantees
64
401-3 Parental leave 11.10.4,
11.11.3
Empowering our people –Strength through
diversity
62
GRI 403:
Occupational
Health and Safety
403-2 Hazard identification, risk assessment, and
incident investigation
11.9.3 Safe operations – Risk Management
Safe operations – Incidence rates and investigation
57
58
403-3 Occupational health services 11.9.4 Safe operations – Golden Rules
Safe operations – Process safety
58
59
403-5 Worker training on occupational health and
safety
11.9.6 Safe operations – In-house HSE training and
examination process
59
403-7 Prevention and mitigation of occupational
health and safety impacts directly linked by
business relationships
11.9.8 Safe operations – Process safety 59
403-9 Work-related injuries 11.9.10 Safe operations – Safety Culture 56
GRI 404: Training
and Education
404-2 Programmes for upgrading employee skills
and transition assistance programmes
11.7.3,
11.10.7
Empowering our people – Employee well-being,
education and training
65
GRI 405: Diversity
and Equal
Opportunity
405-1 Diversity of governance bodies and
employees
11.11.5 Empowering our people – Strength through
diversity
Our governance framework – Equality and
diversity
62-63
97
GRI 408: Child
Labor
408-1 Operations and suppliers at significant risk
for incidents of child labor
Empowering our people – Modern Slavery Act
Statement
66
GRI 409: Forced or
Compulsory Labor
409-1 Operations and suppliers at significant risk
for incidents of forced or compulsory labor
11.12.2 Empowering our people – Modern Slavery Act
Statement
66
GRI 413: Local
Communities
413-1 Operations with local community
engagement, impact assessments, and
development programmes
11.15.2 ESG review – Social responsibility 67-68
GRI 415: Public
Policy
415-1 Political contributions 11.22.2 Directors’ report – Political donations 125-126
Additional
disclosures
GRI: Effluents and
Waste
206-3 Significant spills 11.8.2 Health and safety – Oil spill prevention 60 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 187
GRI sector
standard
ref. No. Location Page
GRI 306: Waste 306-1 Waste generation and significant waste-
related impacts
11.5.2 Environmental stewardship – Waste, water and soil
management
72
306-2 Management of significant waste related
impacts
11.5.3 Environmental stewardship – Waste, water and
soil management
72
306-3 Waste generated 11.5.4 Environmental stewardship – Waste, water and
soil management
72
306-4. Waste diverted from disposal 11.5.5 Environmental stewardship – Waste, water and
soil management
73
306-5 Waste directed to disposal 11.5.6 Environmental stewardship – Waste, water and soil
management
73
GRI 401:
Employment
401-1 New employee hires and employee turnover 11.10.2 Empowering our people – Hiring and staff
turnover
66
401-2 Benefits provided to full-time employees
that are not provided to temporary or part time
employees
11.10.3 Empowering our people –Employee relations and
social guarantees
64
401-3 Parental leave 11.10.4,
11.11.3
Empowering our people –Strength through
diversity
62
GRI 403:
Occupational
Health and Safety
403-2 Hazard identification, risk assessment, and
incident investigation
11.9.3 Safe operations – Risk Management
Safe operations – Incidence rates and investigation
57
58
403-3 Occupational health services 11.9.4 Safe operations – Golden Rules
Safe operations – Process safety
58
59
403-5 Worker training on occupational health and
safety
11.9.6 Safe operations – In-house HSE training and
examination process
59
403-7 Prevention and mitigation of occupational
health and safety impacts directly linked by
business relationships
11.9.8 Safe operations – Process safety 59
403-9 Work-related injuries 11.9.10 Safe operations – Safety Culture 56
GRI 404: Training
and Education
404-2 Programmes for upgrading employee skills
and transition assistance programmes
11.7.3,
11.10.7
Empowering our people – Employee well-being,
education and training
65
GRI 405: Diversity
and Equal
Opportunity
405-1 Diversity of governance bodies and
employees
11.11.5 Empowering our people – Strength through
diversity
Our governance framework – Equality and
diversity
62-63
97
GRI 408: Child
Labor
408-1 Operations and suppliers at significant risk
for incidents of child labor
Empowering our people – Modern Slavery Act
Statement
66
GRI 409: Forced or
Compulsory Labor
409-1 Operations and suppliers at significant risk
for incidents of forced or compulsory labor
11.12.2 Empowering our people – Modern Slavery Act
Statement
66
GRI 413: Local
Communities
413-1 Operations with local community
engagement, impact assessments, and
development programmes
11.15.2 ESG review – Social responsibility 67-68
GRI 415: Public
Policy
415-1 Political contributions 11.22.2 Directors’ report – Political donations 125-126
Additional
disclosures
GRI: Effluents and
Waste
206-3 Significant spills 11.8.2 Health and safety – Oil spill prevention 60 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL REPORT REGULATORY INFORMATION ADDITIONAL DISCLOSURES
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024 187
ADDITIONAL DISCLOSURES
Nostrum Group structure chart
as at 31 December 2024
Zhaikmunai LLP
Incorporated and principal place
of business in Kazakhstan
Nostrum Associated
Investments LLP
Incorporated and
principal place of
business in Kazakhstan
Nostrum
Services N.V.
Incorporated and
principal place of
business in Belgium
Minority
participants
Nostrum Services
Central Asia LLP
Incorporated and
principal place of
business in Kazakhstan
Nostrum Oil & Gas Coöperatief UA
Incorporated and principal place of business in the Netherlands
Nostrum Oil & Gas PLC
Incorporated under the laws of England and Wales
Positiv Invest LLP
Incorporated and principal place
of business in Kazakhstan
100%
100%
100%
80% 20%
>99.9%
99%
100% 100% 100%
1%
<0.1%
(save for one share
held by Nostrum
Oil & Gas BV)
Nostrum Oil & Gas Holding Limited
Incorporated under the laws of England and Wales
Nostrum Oil & Gas BV
Incorporated and principal place of business in the Netherlands
Nostrum Oil & Gas Finance B.V.
Incorporated and principal place of business in Netherlands
188 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
Nostrum Group structure chart
as at 31 December 2024
Zhaikmunai LLP
Incorporated and principal place
of business in Kazakhstan
Nostrum Associated
Investments LLP
Incorporated and
principal place of
business in Kazakhstan
Nostrum
Services N.V.
Incorporated and
principal place of
business in Belgium
Minority
participants
Nostrum Services
Central Asia LLP
Incorporated and
principal place of
business in Kazakhstan
Nostrum Oil & Gas Coöperatief UA
Incorporated and principal place of business in the Netherlands
Nostrum Oil & Gas PLC
Incorporated under the laws of England and Wales
Positiv Invest LLP
Incorporated and principal place
of business in Kazakhstan
100%
100%
100%
80% 20%
>99.9%
99%
100% 100% 100%
1%
<0.1%
(save for one share
held by Nostrum
Oil & Gas BV)
Nostrum Oil & Gas Holding Limited
Incorporated under the laws of England and Wales
Nostrum Oil & Gas BV
Incorporated and principal place of business in the Netherlands
Nostrum Oil & Gas Finance B.V.
Incorporated and principal place of business in Netherlands
188 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2024
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