What we do
Regions
Премия рунета 2017

Methodology of Environmental Transparency Rating of Oil and Gas Companies Operating in Russia, 2014

The oil and gas industries in Russia and Kazakhstan cause some of the highest levels of negative impact on the environment, but they are also the backbone of both countries' economies, which means we all need to find ways to make them more environmentally friendly. For instance, industry consumers and creditors should prioritize companies whose activities have a less negative environmental impact.

The Environmental Transparency Rating for Oil and Gas Companies is a project that provides stakeholders with objective and comparable information on the transparency levels of oil and gas companies and the extent of their impact on the environment.

We expect this kind of ratings to help improve the quality of environmental risk management during the production, transportation, and processing of hydrocarbon fuels. We also hope that ratings will inspire companies to increase their transparency levels, encourage businesses to cooperate with stakeholders, and ensure openness in future project discussions.

Objective

Contribute to efficient use of hydrocarbon resources, environmental protection, and conducting socially responsible business in Russia and Kazakhstan.

Tasks

  1. Record the key indicators of the environmental performance of Russian oil and gas companies.
  2. Compare the key players of the Russian oil and gas sector based on:
    • the level of environmental impact per unit of output;
    • the degree of openness and accessibility of environmentally relevant information;
    • the quality of environmental management, considering state requirements and best practices from around the world;
    • the frequency of violating environmental legislation during project implementation;
    • mineral resource efficiency.
  3. Monitor the companies’ interannual dynamics on the indicators listed above.

Principles

  • The rating is primarily based on the criteria formulated in the Joint Environmental NGO Requirements to the oil and gas sector.
  • The methodology is discussed with all stakeholders.
  • The assessment is performed for all segments, from production to processing, with separate numbers for production, transportation, and processing.
  • The rating is based on publicly available information on the companies' activities. Publicly available information includes publicly available annual financial and environmental reports and reports on environmental protection (including regional ones); documents published on the company's official websites (including those of the company's subsidiaries and contractors) with links to the relevant pages in the website menu; interviews of the company's spokespeople for federal and regional media. If there is no publicly available information for a specific criterion, the company receives the lowest score for that criterion which affects its overall rating.
  • The rating is calculated by a professional rating agency, selected during a competition.
  • The companies are included in the ranking according to their volume of oil and gas production. The lower limit for Russian companies: oil production volume—2 million tons per year; oil transportation volume—30 million tons per year; oil, gas condensate, and petroleum products processing volume—8 million tons per year. The lower limit for companies in Kazakhstan: oil and gas condensate production—0.5 million tons per year.
  • The rating is calculated annually, which helps monitor the dynamics of environmental indicators for different companies.

Background

  • The project for creating an environmental transparency rating for Russian oil and gas companies was initiated by WWF-Russia and ;CREON Group in 2014. The rating for Russian companies has since been published annually.
  • The results of the first Environmental Transparency Rating for Oil and Gas Companies in Kazakhstan were published in 2018. The rating was organized by WWF-Russia and CREON Group with the support of the Ministry of Energy of the Republic of Kazakhstan and in partnership with UNEP Central Asia, CREON Capital, and National Rating Agency.
  • In 2019, monitoring of emergencies and conflicts as part of the environmental transparency rating of oil and gas companies was included into the People for Nature project, carried out by WWF-Russia with the support of the European Union.

1 Surgutneftegas 61 million t 1,6164
2 Sakhalin Energy (Sakhalin–2) 5 million t 1,5253
3 Gazprom 16 million t 1,3545
4 Tatneft 26 million t 1,287
5 INK 2 million t 1,1106
6 Salym Petroleum Development 7 million t 1,0996
7 Rosneft 192 million t 1,086
8 Zarubezhneft 2 million t 1,0556
9 LUKOIL 86 million t 0,9934
10 Gazprom Neft 32 million t 0,8717
11 Bashneft 16 million t 0,7315
12 NOVATEK 4 million t 0,7205
13 Slavneft 16 million t 0,4312
14 Tomskneft VNK 10 million t 0,3757
15 RussNeft 8 million t 0,2804
16 Exxon Neftegas Ltd (Sakhalin–1) 7 million t 0,2698
17–18 Belkamneft 2 million t 0,1852
17–18 Total PPP 1 million t 0,1852
Rating calculation procedure

  1. for each of criteria, companies are assigned color flags – Red, Green, Yellow. When a criterion is not relevant for the given company (for example, the company does not produce fuel), no flag is assigned. For Section 2, Red flag is assigned when the information related to the criterion is not available publicly (though the company definitely holds such information); Green flag is assigned when the rated value of the company is equal or better than the mean value in the industry; Yellow flag is assigned when the rated value of the company is worse than the mean value in the industry. The mean value in the industry, when not available from official sources, is calculated as normal average of the companies participating in the Rating.

  2. Red flags count as 0 points, Yellow as 1 point, and Green as 2 points. For each section, companies are assigned a normal average of their points for criteria in the corresponding section. In this calculation, only those criteria that have been assigned color flags are taken into account, i.e. criteria that are not relevant for the given company, are not included in the calculation. As a result, every company is assigned final points for Eco-Management Section, Environmental Impact Section and Transparency Section. Final points vary from 0 to 2. At this stage, the leaders can be chosen in every of the following areas: Management, Operations, Information, respectively.

  3. the final Rating is calculated for every company by averaging three values assigned in accordance with Stage 2.