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11.1. Production Risks

In 2012, production risks were related to the core activity of JSC “Transneft” and its subsidiaries: organization and realization of oil and oil product transportation via the system of trunk pipelines in the Russian Federation.

Provision of Security and Antiterrorist Protection of the Oil Trunk Pipelines of JSC “Transneft”

In 2012, the following risk factors complicated the activity of JSC “Transneft” and its subsidiaries: the threat of terrorist attacks and sabotage acts at the objects of the oil trunk pipelines and oil product pipelines (hereinafter — “OTP” and “OPTP”), criminal mercenary offenses related to the theft of oil and oil products, parts of the route equipment, cable and wires, dismantled pipes. In these conditions a complex of organizational and practical measures to ensure the security of the objects and the linear part of OTP and OPTP was realized.

In pursuance of the resolutions adopted at the meeting of the Deputy Prime Minister of the Government of the Russian Federation held on July 23, 2010 (minutes No. IS-P9-27) and minutes of the meetings held by the Ministry of Energy of Russia, JSC “Transneft” together with entities of the Transneft system took further measures to ensure antiterrorist protection of the Company’s objects.

Specialists of the Company took part in the meetings of the Working Group for Combating Terrorism at the Facilities of the Fuel and Energy Complex (FEC) of the Ministry of Energy of Russia that considered issues related to performance of legal acts on the antiterrorist protection of the FEC facilities — Federal Laws No. 256-FZ “On Safety of the Fuel and Energy Complex Facilities”, No. 257-FZ “On Making Amendments to Individual Legal Acts of the Russian Federation regarding Provision of Safety of the Fuel and Energy Complex Facilities” dated July 21, 2011.

According to the provisions of Federal Law No. 256-FZ, in 2012 work was performed in OTS in line with the lists approved in the constituent entities of the Russian Federation for categorization of the FEC objects, during the course of which 261 out of 318 objects subject to categorization were assigned a hazard rating. The work for the FEC objects categorization and execution of safety data sheets for them will be continued in 2013.

Cooperation with local executive authorities, territorial subdivisions of the Ministry of the Interior and FSS of Russia in order to realize the joint plans of prevention and suppression of sabotage and terrorist acts at the objects of OTP and OPTP was enhanced.

Application of the pass and inside control system at the secured objects continues to be an important element of the terroristic act prevention. Employees of the security service (SS) focus on identification and suppression of third party efforts to enter to the objects and bring weapons, explosive substances and devices.

In 2012, the company continued implementing the “Program on Increase of the Level of Antiterrorist Protection of the JSC ‘Transneft’ objects for 2011-2012” approved by the Management Board of the Company. The real importance of the ATP Program and its impact on the JSC “Transneft” safety is hard to overvalue. The professional activity of the OTS SS was subject to the following serious qualitative changes: security was promoted through placing of additional posts; additional mobile, moving and search and technical teams were set up; the number of the existing moving groups was brought up to the relevant level; new areas of work for the security provision were developed.

Within the framework of cooperation with law enforcement bodies in 2012 working meetings were held with the heads of the cooperating structure subdivisions of the Ministry of Interior, FSS of Russia; and quarterly information materials “On operational results of JSC ‘Transneft’ and OTS of Prevention of Unauthorized Tie-ins in the OTP and OPTP” were sent to the Ministry of Interior of Russia.

The trend related to reduction of the number of unauthorized tie-ins in the OTP and OPTP in general around the country was maintained: in 2012, 180 unauthorized tie-ins in the OTP were identified, which is 15.9% less compared to the similar indicator of 2011, and in OPTP — 210 (15.3% less). Whereas the situation in the Republic of Dagestan, Irkutsk, Leningrad, Moscow Oblasts where during the recent years the number of the criminal ties-in has made about 70% of all the ties-in in the OTP and OPTP was kind of stabilized, in Samara Oblast there are still thefts both of oil, and oil products. During the current year the number of criminal trespasses has grown: in relation to the OTP objects — in the Republic of Adygeya and Komi, Krasnodar and Stavropol Oblasts, Volgograd, Omsk, Penza, Rostov, Ryazan, Tyumen, Ulyanovsk and Chelyabinsk Oblasts, Khanty—Mansi Autonomous Okrug; in relation to the OPTP objects — in Belgorod, Vladimir, Lipetsk, Nizhny Novgorod, Novosibirsk, Orenburg, Ryazan and Ulyanovsk Oblasts.

Despite the positive results, it is too early to speak about a decrease of the volume of the stolen hydrocarbon materials and derived products. If just several years ago thefts from OTP and OPTP were effected by rule of thumb, it is possible to say that now such offences are performed on a commercial scale. Organized criminal groups hire highly qualified specialists to produce unauthorized ties-in and offsets, use expensive materials (industrial section isolation valves, plastic and metallic pipes, high-pressure hoses, etc.) and equipment (horizontal drilling units, trenchers, special welding equipment, etc.), systems of countering security subdivisions and law enforcement bodies (video surveillance, pins for damage of wheels, etc.), lease bulk motor transport and oil bases.

Taking into account the existing situation, in 2012 the Company paid close attention to improving the security and search measures in the linear part of its trunk pipelines. Along with control of the pipelines, foot examinations were performed with the help of the search equipment to discover unauthorized ties-in and signs of preparation for their production. During the year there were 125 th. km of OTP and OPTP examined with the help of the search equipment.

For provision of security of the objects of the oil trunk pipelines and oil product pipelines the Company widely uses capabilities of the territorial subdivisions of extradepartmental security service of the Ministry of the Interior of Russia. On a daily basis police officers were included in moving SS teams securing the most criminogenic sections of the linear part.

In 2012, employees of the OTS security subdivisions both independently, and in cooperation with law enforcement bodies in total suppressed 30 cases of oil theft (78 persons and 24 cars with stolen oil were arrested), 21 cases of oil product theft (52 persons and 13 cars with oil products were arrested).

Provision of the Environmental Safety of JSC “Transneft”

In accordance with the approved “Environmental Policy of JSC “Transneft” the main principles of the Company’s activity are: performance of requirements of Russian laws, international treaties of the Russian Federation, standards and rules in the sphere of management of natural resources, environmental protection and ecological safety; constant enhancement of environmental protection activity and management of environmental protection; decrease of the negative impact on the environment due to the increase of the ecological safety of the objects of pipeline transport, reduction of emissions of polluting substances into the environment and of production waste.

In accordance with the plan of audits for 2012 at JSC “Transneft” and at all OTS, audits of DQS were conducted, which confirmed the correspondence of the System of Ecological Management of the Company to the international environmental standard ISO14001-2004.

According to the “Program of the Strategic Development of JSC ‘Transneft’ up to 2020”, the Company continued planned work for reduction of the harmful substance emission, namely reconstruction of tank farms and their equipment with floating roofs and pontoons. In 2012, specific emissions decreased by 7.7% as compared with the previous year. In total during the reporting year 4,228 tons of harmful substance emissions were neutralized, which is 347 tons more than in 2011.

In 2012, there were 16 units for treatment of production and rain and household waste water commissioned with the total capacity of 2,807 cu.m./day, 6 treatment units with the total capacity of 717 cubic meters/day reconstructed.

The measures taken resulted in increase in 2012 of the volume of the duly treated wastewater drained into surface water bodies by 631 th. cu. m. as compared with 2011 and equalled 7,128 th. cu. m.

During 2012, there were large-scale works performed for elimination of production waste, in total 126.1 th. tons of waste eliminated.

The volumes of financing the program of environmental security, construction and reconstruction of the objects meant for the protection of the environment, acquisition of the equipment for the protection of the environment secure compliance of JSC “Transneft” with the strictest Russian and international environmental requirements.

To complete and maintain in the constant anti-damage condition of subdivisions for liquidation of accidental oil spillages, in 2012 the Company purchased 27,855 meters of harbour booms, 314 tanks for collection and temporary storage of oil, 72 oil collection units and 25 units for burning industrial waste, and 42.5 tons of oil absorbing sorbents.

One of the major lines of the Company’s activity is development of the regulatory environmental protection documents. During the past year 89 volumes of the Draft Regulations on the Admissible Emissions (DAE), 80 Draft Regulations on the Waste Creation and Limits of their Placement (DWCLP), 25 volumes of Regulations on Admissible Emissions (RAE), 18 ecological passports were developed and agreed with supervisory institutions. All the permit documents for the JSC “Transneft” are available in full.

A stringent system of the production environmental control is ensured in compliance with special regulations by 53 ecological and analytical control laboratories accredited by the State Committee for Standardization, Metrology and Certification of the Russian Federation. The laboratories are staffed with highly qualified specialists and modern analytical equipment. Environmental and analytical control is executed according to the schedules agreed with Rospotrebnadzor (Federal Service on Surveillance for Consumer rights protection and human well-being), Rosselkhoznadzor (Federal Agency for Veterinary and Phytosanitary Supervision) and Rostekhnadzor. In total, in 2012 the environmental and analytical control laboratories of JSC “Transneft” carried out 256,628 analyses of the condition of the environment. Reports on all the researches are timely delivered to the supervisory bodies according to the control schedules approved. According to the results of the analyses, established limits are complied with.

According to Article 15 of Federal Law No. 116-FZ “On Industrial Safety of Dangerous Production Objects” dated July 21, 1997 and on the basis of Articles 928 and 931 of the Civil Code of the Russian Federation and standard insurance rules approved by Letter of the Federal Mining and Industrial Inspectorate of Russia No. 01-17/116 dated April 23, 1998, JSC “Transneft” provides general liability insurance for the entities operating dangerous industrial objects against harm to life, health or property of third parties and the environment as a result of emergencies at the dangerous production facilities.

According to the resolution of the Governmental Commission for Advanced Technologies and Innovations of July 5, 2011 the List of Technological Platforms was complemented with the Technological Platform “Ecological Development Technologies” that is coordinated by the Russian Geographical Society All-Russian Public Organization. JSC “Transneft” takes part in the abovementioned Technological Platform within the framework of the “Program of the Innovative Development of JSC ‘Transneft’ up to 2017” approved by the Board of Directors of JSC “Transneft” on April 1, 2011, the Strategy and Innovation Committee of the Board of Directors of JSC “Transneft” (Minutes No. 7 of November 8, 2012) approved Measures for Participation of JSC “Transneft” in the Technological Platform “Ecological Development Technologies” in 2012 — 2014, as well as areas of research studies with application of innovative technologies.

Insurance of Production Risks

All the property operated by the entities of the JSC “Transneft” system, including linear part objects, OPS, oil bases, buildings and structures, vehicles and special equipment, as well as machinery are insured.

The objects of the oil pipeline transport are insured against the following risks:

  • loss (destruction), damage of the property as a result of fires, floods, explosions, acts of God, and third party acts;
  • environmental risks (civil liability of the organizations that use dangerous production objects, for the infliction of harm to life, health or property of third parties and the environment as a result of emergency at a dangerous production object);
  • loss of technological oil in the oil pipelines and tank farms belonging to the operating entity.