NOSTRUM OIL & GAS PLC

Environmental & Social Information • Apr 29, 2024

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title: PAYMENTS TO GOVERNMENTS 2016
author: George Gerards
date: 2023-06-26 12:57:00+00:00

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TABLE OF CONTENTS

Introduction

Basis for preparation

Other

Summary Report

Kazakhstan

PAYMENTS TO GOVERNMENTS 2023

Nostrum Oil & Gas PLC • Registered in England and Wales • Company Number: 8717287

Registered Office: 20 Eastbourne Terrace, London W2 6LG, United Kingdom

Tel: +44 203 7407430 • www.nog.co.uk

VAT number: GB 302 9250 35

This Report provides an overview of the payments to governments made by Nostrum Oil & Gas PLC and its subsidiary undertakings (hereinafter referred to as “Nostrum”) for the year 2023 as required under the UK’s Reports on Payments to Governments Regulations 2014 which apply to LSE listed companies like Nostrum that are involved in the exploration, prospection, discovery, development and extraction of oil and natural gas deposits. This Report is also intended to satisfy the requirements of DTR 4.3A of the Financial Conduct Authority’s Disclosure and Transparency Rules.

This Report is available for download from

https://nostrumoilandgas.com/about/governance/

Reporting entities

This Report includes payments to governments made by Nostrum Oil & Gas PLC and its subsidiary undertakings (Nostrum).

Activities

Payments made by Nostrum to governments arising from activities involving the exploration, prospection, discovery, development and extraction of minerals, oil and natural gas deposits or other materials (extractive activities) are disclosed in this Report. For a fully integrated project, which does not have an interim contractual cut off point where a value can be attached or ascribed separately to the extractive activities and to other processing activities, payments to governments will not be artificially split but disclosed in full.

Government

Government includes any national, regional or local authority of a country, and includes a department, agency or entity that is a subsidiary of a government, which includes a national oil company.

Project

Payments are reported at project level except that payments that are not attributable to a specific project are reported at entity level. Project is defined as operational activities which are governed by a single contract, license, lease, concession or similar legal agreement, and form the basis for payment liabilities with a government. If such agreements are substantially interconnected, those agreements are to be treated as a single project. “Substantially interconnected” means forming a set of operationally and geographically integrated contracts, licenses, leases or concessions or related agreements with substantially similar terms that are signed with a government giving rise to payment liabilities. Such agreements can be governed by a single contract, joint venture, production sharing agreement, or other overarching legal agreement. Indicators of integration include, but are not limited to, geographic proximity, the use of shared infrastructure and common operational management.

Payment The information is reported under the following payment types.

Production entitlements

This is the Republic of Kazakhstan share of production in the reporting period derived from projects operated by Nostrum. This includes the government’s share as a sovereign entity or through its participation as an equity or interest holder in projects within its sovereign jurisdiction (home country). In certain contractual arrangement, typically a production sharing contract, a government through its participation interest may contribute funding of capital and operating expenditure to projects, from which it derives production entitlement to cover such funding (cost recovery). Such cost recovery production entitlement is included.

Taxes

These are taxes paid by Nostrum on its income, profits or production (which include resource severance tax, and petroleum resource rent tax), including those settled by a government on behalf of Nostrum under a tax-paid concession. Payments are reported net of refunds. Consumption taxes, personal income taxes, sales taxes, property and environmental taxes are excluded.

Royalties

These are payments for the rights to extract oil and gas resources, typically at set percentage of revenue less any deductions that may be taken.

Dividends

These are dividend payments other than dividends paid to a government as an ordinary shareholder of an entity unless paid in lieu of production entitlements or royalties. For the year ended 31 December 2023, there were no reportable dividend payments to a government.

Bonuses

These are payments for Bonuses. These are usually paid upon signing an agreement or a contract, or when a commercial discovery is declared, or production has commenced or reached a milestone.

License fees, rental fees, entry fees and other considerations for licenses and/or concessions

These are fees and other sums paid as consideration for acquiring a license for gaining access to an area where extractive activities are performed. Administrative government fees that are not specifically related to the extractive sector, or to access to extractive resources, are excluded. Also excluded are payments made in return for services provided by a government.

Infrastructure improvements

These are payments which relate to the construction of infrastructure (road, bridge or rail) not substantially dedicated for the use of extractive activities. Payments which are of a social investment in nature, for example building of houses, are included as well.

Cash and in-kind payments Payments are reported on cash basis. In 2023 no in-kind payments were made.

Materiality Level

For each payment type, total payments below the threshold (£86,000) to a government are excluded in this Report.

Exchange Rate

Payments made in currencies other than US Dollars are translated for this Report based on the foreign exchange rate at the date of the respective payment.

(in USD)	Production Entitlement	Taxes	Royalties	Fees	Bonuses	Infrastructure Improvements	Total
Countries
Kazakhstan	1,198,006	22,991,254	5,351,193	1,030,928	-	311,259	30,882,640
Total	1,198,006	22,991,254	5,351,193	1,030,928	0	311,259	30,882,640

(in USD)	Production Entitlement	Taxes	Royalties	Fees	Bonuses	Infrastructure Improvements	Total
Governments
Uralsk Government revenue Board	1,198,006	22,991,254	5,351,193	1,030,928	-	-	30,571,381
West Kazakhstan region Department of Public revenues	-	-	-	-	-	311,259	311,259
Total	1,198,006	22,991,254	5,351,193	1,030,928	0	311,259	30,882,640

(in USD)	Production Entitlement	Taxes	Royalties	Fees	Bonuses	Infrastructure Improvements	Total
Projects
Chinarevskoye	1,198,006	22,991,254	5,351,193	1,030,928	0	311,259	30,882,640
Total	1,198,006	22,991,254	5,351,193	1,030,928	0	311,259	30,882,640