#Al_Thaer
On 10 June 2021, for the first time in the Caspian Pipeline Consortium’s (CPC) history, a first tranche of dividends was paid to the Company Shareholders. The total dividends paid for Q4 2020 and Q1 2021 amounted to $665 mln. As part of the first tranche, $ 548 mln were distributed to CPC Shareholders. The balance of $117 mln will be distributed as the second tranche in the first ten days of July 2021.
CPC Pipeline System is one of the major investment energy projects with foreign capital in the Commonwealth of Independent States (former USSR) created to transport crude oil from Kazakhstan for export. Initially, the investment participation of the Persian Gulf states in the project was considered. In the end, in 1992, Kazakhstan, Oman and Russia agreed to create CPC. In 1996, eight private Shareholders - the world’s largest oil companies - entered the Project.
Among them is Chevron Corp. - one of the USA major energy companies. Since 1993, Chevron has been developing the Kazakhstani field - Tengiz. It possesses 50% of shares of Tengizchevroil Company developing Tengiz and Korolyov fields and 18% in Karachaganak field.
Another CPC Shareholder - American corporation ExxonMobil has been working on Russia’s and Kazakhstan’s markets for over 25 years. ExxonMobil’s business profile covers the entire oil production cycle - from production to refining.
By the final formation of CPC, Oman’s stock of shares was acquired by Russia’s Government. CPC shares are currently distributed as follows: Russia, its shares are managed by Transneft - 24%, CPC Company - 7%, Kazakhstan represented by KazMunayGas, managing the shares, - 19%, Kazakhstan Pipeline Ventures LLC - 1.75%, Chevron Caspian Pipeline Consortium Company – 15%, Lukarco B.V. – 12.5%, Mobil Caspian Pipeline Company – 7.5%, Rosneft-Shell Caspian Ventures Limited – 7.5%, BG Overseas Holding Limited – 2%, Eni International N.A. N.V. S.ar.l. – 2% and Oryx Caspian Pipeline LLC – 1.75%.
The length of the Tengiz – Novorossiysk pipeline is 1,511 km. Over two thirds of Kazakhstan export crude, as well as crude from Russian oil fields are transported by the pipeline. CPC Marine Terminal is equipped with three Single Point Moorings (SPM) that allow to load tankers safely 5 km away offshore, also in a storm. The SPMs were manufactured in the United Arab Emirates to a design developed by Blue Water Energy Services B.V.
CPC crude pipeline runs from north-west Kazakhstan through four Russian regions - from Astrakhan to Novorossiysk on the Black Sea shore. The trunk pipeline was opened on 27 November 2001 when the first tanker was loaded. In 2004, crude oil produced in Russia started entering CPC System, and the Consortium reached the throughput capacity of 28.2 mln t of oil per year. In 2018, after completion of CPC Expansion Project, the System’s throughput capacity reached 67 mln t. The Debottlenecking Program is currently being implemented providing for the crude pipeline capacity increase by 2023 to more than 80 mln t of oil per year.
By late May 2021, CPC exported 729,826,903 t of CPC Blend to the world market and loaded 6,887 tankers. CPC Blend is CPC own grade, oil with the density of 46,7ºAPI and sulfur content of 0.54.
It is noted that the priorities of CPC operation business are industrial safety, occupational health and environmental protection. The Company has developed a Safety Work Culture, CPC is a partner of the Vision Zero international program.
CPC environmental policy provides for minimization of the operation impact on nature. Specifically, the use of electric drives for oil pumping units contributes to reduction of emission of oil compounds to the atmosphere by 50%, tanks’ floating roofs - by 90%. Some other most state-of-the-art engineering solutions are used.
Against the background of the mainstreaming of the “green” agenda, it should be said that the Consortium is consistently involved in reducing atmospheric emissions. It is important to take into account that the CPC System is designed to be as closed as possible and structurally to prevent any impact on the environment.
In all the Regions of its presence, CPC, as a good corporate citizen, is actively engaged in charity and environmental education activities. Considerable funds are allocated towards an increase of saiga and deer population, sturgeon species, preservation of rare species of flora, eco-lessons are organized for schoolchildren. CPC provides charitable support to the Regions: over $ 170 mln were allocated in the Russian Federation and Kazakhstan in the past years towards the needs of the health care, education, culture, children sports.
Dividend payment on CPC shares, which started in June 2021, is a milestone event in the Company’s history. It has become possible due the full repayment of the debt to CPC Shareholders. In 2020, thanks to the strong financial performance, CPC paid the last installment of debt of $ 990 mln to the Shareholders ahead of time.
In accordance with CPC Financial Policy, the amount of dividends is to be declared on a quarterly basis, based on the amount of the Company’s profit minus costs. In the future, provided there are no new major projects, the Consortium intends to maintain regular dividend payments.
Sergey Sinaiskiy
CPC-R Press Service Team Manager