Organizational structure of KazTransOil

General information

For the purposes of ensuring that the interests of the Republic of Kazakhstan on the issues of oil transportation, export and import of oil and oil products, by the decree of the Government of the Republic of Kazakhstan dated 1997 No.461, the Closed Joint Stock Company “National Oil Transportation Company “KazTransOil” (hereinafter CJSC “NOTC “KazTransOil”) was created, with 100 percent state participation in charter capital.

In 2001 the state block of shares was transferred to the charter capital of the Closed Joint Stock Company “National Company “Transport of Oil and Gas”, which was created in accordance with decree of the Government of the Republic of Kazakhstan dated 2 May 2001, No.591.

According to the order of the Ministry of Energy and Mineral Resources of the Republic of Kazakhstan dated 22 June 2001, No.159, the CJSC “NOTC “KazTransOil” was renamed to Closed Joint Stock Company “KazTransOil” (hereinafter the CJSC “KazTransOil”.

By the decree of the President of the Republic of Kazakhstan dated 20 February 2002, No.811 on the basis of closed joint stock companies, “National oil and Gas Company “Kazakhoil” and “National Company”.

Transport of Oil and Gas”, reorganized by means of merger, the Closed Joint Stock Company “National Company “KazMunaiGas” was created and became the sole shareholder of CJSC “KazTransOil”.

On 31 May 2004, CJSC “KazTransOil” was renamed to JSC “KazTransOil”.
The subject of “KazTransOil” JSC activity:

· Provision of services on oil transportation (pumping, transshipment, unloading, loading, storage, blending) via main pipelines,

· Organization of transportation of Kazakh oil via pipeline networks of other states (operator’s activity on unified routing),

· Operation and technical maintenance of main pipelines, that belong to other legal entities,

· Provision of services on water delivery via main pipeline,

· Provision of services on production, transfer and distribution of heating energy, transfer and distribution of power.

Nowadays, KazTransOil is a largest oil pipeline company of the Republic of Kazakhstan, which provides services on oil transportation on the domestic market and for export. Besides
“KazTransOil” JSC was included in the Republican section of State register of subjects of natural monopolies. Also, we can note that this company is one of the first companies who takes a part in National IPO of Kazakhstan.

Organizational structure of KazTransOil

The organizational chart of KazTransOil JCS consists from the Board of Directors, committee of Board of Directors and Branches that executed by Management Board.

The governing body of the Company is the Board of Directors, which performs overall management of Company’s operations. The Independent Directors are elected by the General of Shareholders. The Board of Directors consists of: 3 representatives of “KazMunayGas” JSC, 2 Independent Directors and General Director (Chair of the Management Board) of the Company.

Board of Directors is guided by the Law of the Republic of Kazakhstan “On Joint Stock Companies”, Charter, Company’s Corporate Governance Code, Regulation on the Board of Directors, resolutions of the General Meeting of Shareholders, legislation of the Republic of Kazakhstan and internal documents of the Company.

Committees ofthe board of Directors. Committee for Strategic Planning develops recommendations to the Board of Directors on the issues of Company’s development and management strategy, assessment of efficiency of implementation of the strategy, approved by the Board of Directors. Internal Audit Committee assists to the Board of Directors on the issues of internal and external audit, risk management and internal control. Also the functions of Internal Audit Committee, among the other, include consideration and analyses of financial statements of the Company, including attraction of Company’s auditors to such analyses, control over independence of external auditors of the Company, control over the process of preparation of financial statements, efficiency of internal control system and performance of internal systems of risk management of the Company and preliminary approval of financial statements. The powers of the Nomination and Remuneration Committee among the others include assistance to the Board of Directors during appointment (election), evaluation and remuneration of members of the Board of Directors, members of the Management Board, Corporate Secretary, ensuring performance of personnel policy, development of recommendations on remuneration to the members of the Management Board, preparation of qualification requirements of Independent Directors and members of the Management Board and other staff members of the Company, recommendations for the Board of Directors on the candidates to Independent Directors, members of the Management Board and evaluation of performance of the Board of Directors, committees of the Board of Directors, the Management Board.

The Management Board is collegial executive body, performing governance of Company’s da-to-day business, ensuring implementation of Development Strategy of KazTransOil JSC confirmed by the Board of Directors, ensuring execution of resolutions of the Board of Directors ad General Meeting of Shareholders. The composition of the Management Board is defined by the Board of Directors.

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