rating

Currently, one may find merely few topics in European-Russian relations on which a constructive discussion is still possible. Environmental protection is one of these topics. While Russia just like Germany sticks to the Paris Agreement on Climate Change, the country’s oil and gas producers are striving to become cleaner and greener along their value chains: instead of flaring the associated gas in oil production they process it, areas contaminated with oil are being recultivated. Risk management and accident prevention systems are being implemented. German and European companies provide the necessary technologies and solutions.

In order to awaken the potential of the cooperation and to expand the cooperation, the 2nd summit “Ecological Responsibility in Russia’s Energy Sector” took place on December 5th in Berlin Marriott Hotel. The Moscow-based CREON Group and the group-owned fund management company Creon Capital (Luxembourg) hosted the event. CREON finances “green” projects in the oil and gas industry and accompanies them in execution. The German Eastern Business Association (OAOEV) and the German-Russian Chamber of Commerce supported the event, which attracted around 100 participants.

OAOEV Chairman Michael Harms confirmed that ecology is an issue where Germans and Russians are d’accord. The move to more environmental protection offers opportunities for German companies to sell their equipment. CREON Chairman Fares Kilzie emphasizes that “even in Russia the transformation towards a green economy” has started. “In the 21st century, sustainability in projects in the Russian oil and gas sector will be a crucial factor.” For Creon Capital and its fund, this opens a “new vector for innovative investment” wherefore CREON is looking for partners and know-how in Europe, says Kilzie. “We host this conference in Berlin by purpose, as concepts and solutions for a greener future have culminated here along with the ‘Energiewende’, Germany’s turnaround in energy policy a decade ago.”

To document progress in Russia and also further cooperation this potential, CREON invented the independent transparency rating of oil and gas companies on environmental responsibility five years ago. The results have been presented together with WWF Russia. Ulrich Benterbusch, who oversees the German ‘Energiewende’ at the Ministry of Economic Affairs and Energy (BMWi), described the survey as “very important” and welcomed the establishment of the instrument. At the same time, he sees potential for a greener transport infrastructure: “Natural gas mobility could be an integral part of the energy transition in the transport sector in Germany.” LNG, as an alternative fuel especially for ships and heavy commercial vehicles, is cost-effective and environmentally friendly in the long term, especially as though the admixture of biomethane the CO2-free mobility would become a possibility.

At a panel discussion, Russia’s ex-Minister of Environment Sergej Donskoy, DEA Manager Michael Zettlitzer, Tatyana Minayewa of Wetlands International and Elena Kompasenko (Zarubeshneft) deepened the topic of “ecological responsibility” – and agreed on a conclusion, drown by Donskoy: Of course, there is still room for even more environmental protection in Russia, but it’s going in the right direction. “We are not wizards, but we are learning,” Donskoy said. But every initiative is important.

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CREON is a Moscow-based group of independent consulting and management companies, which has developed a comprehensive expertise in the chemical, energy and commodity processing industries in about 20 years. Luxembourg-based Creon Capital manages a private equity fund that invests in projects in the energy and chemicals sectors, including green technologies and building LNG infrastructure in Europe.

Contact: Florian Willershausen, Director BD/M/C, fw@creoncapital.lu, Tel. +49-151-16244591

Pictures:

CREON Capital chairman Fares Kilzie welcomes more than 100 participants to 2nd conference “Ecological responsibility in Russia’s Energy Sector”

Moderator Florian Willershausen (left) in discussion with Ulrich Benterbusch (Federal Ministry of Economy and Energy)

Discussion potential for envionmental cooperation between Russia and Germany (from left to right): Michael Harms, Fares Kilzie, Florian Willershausen, Ulrich Benterbusch

Sergey Donskoy served five years as Russia’s federal minister for ecology until he started to work for Irkutsk Oil Company.

The Worldwide Fund for Nature (WWF) and CREON Group have announced results of the fifth Environmental Transparency Rating of Oil & Gas Companies operating in Russia. The announcement ceremony took place at the Analytical Center of the Government of the Russian Federation in Moscow on the 30^th of November.

The Rating project has been implemented with support from the United Nations Environment Program and with participation of the Ministry of Natural Resources and Environment of Russia and the Ministry of Energy of Russia. Just as in previous years, the rating process has been executed by National Rating Agency, while the Luxembourg-based fund management company Creon Capital participated as a partner in the project.

The results of the rating in 2018 both affirmed yesteryear leaders’ standings and revealed new prominent up-and-coming participants. As in the previous year Sakhalin Energy (Sakhalin-2), a joint venture of Gazprom, Shell, Mitsui and Mitsubishi, ranked first, followed by Zarubezhneft. The latter company appears in the top 3 for the first time. Exxon NL achieved the third rank.

For the first time, special diplomas were awarded to winners in each of three Rating categories: Surgutneftegaz and Zarubezhneft shared the first rank in terms of ‘Environmental Management’; Caspian Pipeline Consortium (CPC) scored the best result in ‘Environmental Impact’; and LUKoil convinced the rating agency regarding their ‘Information Disclosure’.

The high importance of the study was underlined by Denis Khramov, the Minister of Natural Resources and Environment of the Russian Federation: “The public initiatives of the Worldwide Fund for Nature such as the Transparency Rating of Environmental Responsibility of Oil & Gas Companies operating in Russia represent an important input in improving ecological policies in the industry, and are also increasing the public availability of environmentally significant information”.

“Recently we have witnessed increasing support and attention to our rating from relevant government bodies such as the Ministry of Natural Resources and Environment of Russia and the Ministry of Energy of Russia, which confirms the importance of ratings in the system of public administration of environmental risks and impacts”, said Alexey Knizhnikov, Oil & Gas Program Leader, WWF Russia. “At the same time, it should be noted that two of four Russian state oil and gas companies, namely NK Rosneft and Zarubezhneft, have been increasingly involved in the rating’s development compared to previous years. Their representatives have always been participating in methodology development and progress review meetings”.

Pavel Sorokin, Deputy Minister of Energy of the Russian Federation, also addressed his support to the rating’s initiators: “Improving social and environmental responsibility of companies in the oil and gas sector in Russia is becoming an increasingly pivotal task in the field of public administration and in achieving better competitiveness of Russian business. The non-government initiative to conduct the rating has proven its effectiveness within the five years since the project started. The dialogue between oil and gas companies and the society on environmental safety issues should be actively pursued with this project”.

Head of CREON Group und Chairman of Creon Capital, Fares Kilzie, underlined in his speech: “CREON Group in general, and Creon Capital in particular, fully support and promote the idea of “responsible investments”, which promotes the rapidly improving investment climate in Russia. As an investment fund we identify outstanding business opportunities, when Russian oil and gas companies improve their ecological footprint. We are ready to contribute in financing sound projects such as advanced APG processing and LNG as an alternative energy source to replace traditional sources fuels such as Diesel and heavy oil. In this context, I would like to mention NOVATEK as a successful endeavor, that grow to the largest Russian LNG producer. This company pioneers with the implementation of large-scale LNG, which may change the whole industry’s structure.

DOWNLOAD the rating brochure (in English).

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ABOUT THE RATING

The “Environmental Transparency Rating of Oil and Gas Companies” operating in Russia is an independent project, invented by the Fund’s initiator Creon Energy in 2014. More than 30 Russian and international enterprises are being rated annually regarding their environmental policy. The rating is conducted independently by the Russian Rating Agency, according to a sophisticated methodology developed by the Worldwide Fund for Nature (WWF) Russia. In 2018, Creon and WWF also started to rate oil and gas companies in Kazakhstan, a global rating will be conducted soon.

Learn more about the ratings history (external link)

OBJECTIVES

For a long time the mostly state-owned oil and gas companies in Russia were closed shops. Reports on environmental sustainability – missing. Manuals how to deal with hazardous situations – out of date. Recultivation projects for oil spills – what for?

In the past couple of years the situation has changed tremendously: Even large state enterprises such as Rosneft started to report on environmental responsibility in detail. Lukoil installed solar-based power generation on their oil production plants. And the gas associated with the process of oil refining has increasingly been processed or transferred to pipeline systems instead of being burnt.

The rating aims to accompany this process towards more environmental responsibility. The disclosure of information has significantly increased within the five years the rating has been conducted. Companies’ ecologists discuss the ratings results and best-practice examples. The product’s presentation annually turns out to be a gathering of specialists working for competing companies in Russia. But all of them try hard to get the oil and gas production “greener”. In 2018 the rating’s results have been presented in the Analytical Center of the Russian government, representatives of several ministries attended the event.

Learn more about the rating’s objectives (external link)

METHDOLOGY

The methodology behind the rating of oil and gas companies in terms of environmental transparency and responsibility has been developed in 2014 and reviewed since then on an annual basis. Every year all Russian oil and gas companies are invited to participate in a round table discussion with WWF specialists to discuss the details and propose changes. Large companies such as Rosneft and Lukoil contribute to this discussion constructively just as much as smaller producers such as Salym Petroleum.

According to the metholodology the rating agency assesses the oil and gas companies along the value chain from hydrocarbon production, processing to transportation. The amount and quality of disclosed information is crucial for their placement in the rating, but also the way how comapnies deal with accidents, whether they inform about it or deploy a harzard prevention and risk management system. Also the producers measures to process associated petroleum gas (APG) during the refinery process matter, some still burn APG instead of using it.

Learn more about the methodology (external link)

The World Wide Fund for Nature (WWF) Russia and the Luxembourg-based fund management company CREON Capital have agreed to create a «Global Transparency Rating of Oil and Gas Companies». The survey will involve 30 global commodity producers from around the world, it will be focused on their efforts to strengthen their environmental responsibility. Therefore, environmental strategies will be evaluated as well as concrete measures towards more environmental protection in a sector, which is critical for nature and human being. This will be the first worldwide study, which provides transparent and comparable data and information on environmental responsibility in the global oil and gas industry. WWF Russia and CREON Capital signed a declaration on May 25 during the International Economic Forum in Saint Petersburg.

The rating will be presented on several events later this year. Alexey Knizhnikov, WWF Russia’s head of the Environmental Policy program in the Fuel and Energy Complex, said: «The rating will allow us to assess on an annual basis the efficiency and transparency of oil and gas companies in terms of environmental responsibility: the development of renewable energy as an alternative to fossil fuels plays a role as well as activities to conserve biodiversity, the companies’ programs for environmental protection and renaturation.» In the past four years, when WWF and CREON conducted the rating for Russian companies, this format had become a platform of constructive dialogue between energy companies and civil society, Knizhnikov remembered: «Now we want to expand this platform to a global level, and we invite the industry to join the dialogue on ecological responsibility.»

Dr. Fares Kilzie, Chairman of CREON Capital, commented: «Our role as an investment fund is that of the co-investor in environmentally responsible projects, such as the processing of associated gas and the establishment of supply chains for LNG as an environment-friendly alternative to heavy fuel oil and diesel in the transport sector.» For him as a Fund manager it were not only possible and necessary to realize «green» projects, said Kilzie, but also economically reasonable. «We therefore support our partner WWF in every respect in order to promote the topic of ecological responsibility in the global oil and gas industry.»

About us:

The Rating of Environmental Responsibility in the Russian Energy Sector has been launched in 2014 as an initiative of the CREON Group and WWF Russia. The project’s objectives were to conduct tangible and comparable information on environmental activities of oil and gas companies. Thanks to the publicity effect of the rating, some influence could be exerted on the companies in Russia, which partly increased transparency, decreased pollutions or developed an environmental risk-management-system. In 2017, the rating was first presented in Europe, also a separate rating of the Kazakh oil and gas companies was conducted.

The World Wide Fund for Nature (WWF) Russia works with state institutions, companies, experts and local communities to change people’s attitude to nature. The priorities of WWF’s various activities in Russia include the protection and preservation of biodiversity, sustainable forestry and fisheries, the «green economy», environmental governance, climate and energy.

CREON Capital is a fund management company based in Luxembourg. It manages the CREON Energy Fund, which actively invests in energy projects. Green technologies and renewable energy are among the focus areas of investments. The private equity fund also invests in the processing of gas and the construction of a liquefied natural gas infrastructure.

Press Inquiries:

CREON Capital
Florian Willershausen
Director BD & Marcom

Tel. +352 621 235 126
E-Mail: fw@creoncapital.lu
www.zs-rating.ru/

Pictures:

Florian Willershausen (CREON Capital, left) and Alexey Knizhnikov (WWF Russia) signed a Memorandum of Understanding, stating that both organizations will conduct a Global Transparency Rating of Oil and Gas Companies:

CREON establishes conference as platform for East-West exchange on environmental cooperation

Sakhalin Energy ranks first in 2018 Rating of oil and gas companies environmental transparency

DOWNLOAD the rating brochure (in English).

WWF Russia and CREON Capital to conduct Global Rating of Oil & Gas Companies