What we do
Regions
Премия рунета 2017

Methodology of Environmental Transparency Rating of Oil and Gas Companies Operating in Russia, 2015

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 1,5825
2 Gazprom 16 million t 1,5387 1
3 Sakhalin Energy (Sakhalin–2) 5 million t 1,5222 -1
4 Zarubezhneft 3 million t 1,4222 4
5 LUKOIL 86 million t 1,3737 4
6 Rosneft 190 million t 1,3569 1
7 Salym Petroleum Development 6 million t 1,3444 -1
8 Tatneft 26 million t 1,2492 -4
9 Exxon Neftegas Ltd (Sakhalin–1) 7 million t 1,063 7
10 Gazprom Neft 36 million t 1,0202
11 Total PPP 1 million t 0,9926 6
12 NOVATEK 4 million t 0,9667
13 Bashneft 17 million t 0,9158 -2
14 INK 4 million t 0,8889 -9
15 Transneft 479 million t 0,4815
16 Tomskneft VNK 9 million t 0,431 -2
17 Slavneft 16 million t 0,3939 -4
18 Alliance-NNK 2 million t 0,2828
19 RussNeft 8 million t 0,2593 -4
20–21 Belkamneft 2 million t 0,1852 -3
20–21 Neftisa 6,9 million t 0,1852
22 Arcticgas 1 million t 0,1481

В таблице указаны объемы производства компаний, кроме значений, отмеченных символами:

Объем транспортировки
 The Rating consists of three sections:

  • Environmental Management
  • Environmental Impact
  • Disclosure / Transparency
  1. Environmental Management

    assesses the quality of eco-management in the company. Criteria included in this section are in most cases substantially more rigid compared to Russian legislation on environmental protection. However, these criteria correspond to the best global standards and practices in oil and gas business.

  2. Environmental Impact

    evaluates the scale of impact of oil and gas companies on the environment. In particular, the damage level is revealed for air, water and land during the implementation of projects as well as the ecological performance of the industrial operations. In most cases the criteria are based on components of state statistical reporting in the field of environmental protection. This Section includes quantitative values that are being transformed to qualitative scale by comparing to industry average indicators for every criterion. The industry average indicators, when not available from official sources, are calculated as an arithmetic mean value for companies participating in the Rating. For comparative analysis across the companies, the data are used per production unit by dividing gross indicators by relevant volumes of hydrocarbon production, transportation and processing.

  3. Disclosure / Transparency

    evaluates the extent of companies’ readiness to disclose information with respect to environmental impact of their industrial activities. Historically, Russian oil and gas business was considered as a rather non-transparent community not least because of the unwillingness to publish environmental data. The recent trend is a growing transparency of the companies.

Rating calculation

  1. Each company is assigned color flags for each of criteria — Red, Yellow or Green.

    When a criterion is not relevant for the given company (for example, the company does not produce fuel or does not operate in the territories of Small Indigenous Peoples of the North), no flag is assigned. In such cases, companies are required to present proof of being irrelevant to criteria. When the information related to the criterion is not available in public domain, red flag is assigned.

  2. At the next stage, points are assigned for every criterion.

    Red flag counts as 0 points, Yellow as 1 point, and Green as 2 points. For each section, companies are assigned an arithmetic mean 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 Environmental Management Section, Environmental Impact Section and Transparency Section. Final points vary from 0 to 2. At this stage, the leaders are chosen in each of the following areas: Management, Operations, and Information.

  3. The final Rating is then calculated for each company by averaging three values assigned in the previous stages.