simple 
sustainable 
successful
nostrum oil  gas  
annual report 2013
nostrum oil  gas  annual report 2013 nostrum oil  gas is an international independent 
exploration and production ep partnership  
listed on the london stock exchange
we are a simple sustainable and successful 
organisation with a portfolio of assets located  
in kazakhstan in one of the most prolific  
hydrocarbonproducing basins in the world  
we are involved in the exploration appraisal 
production and transportation of hydrocarbons 
our vision is to become the leading independent 
former soviet union fsu oil and gas exploration  
and production company in order to achieve our 
vision we recognise that our responsibilities need  
to go beyond our financial and operational targets
our track record clearly demonstrates that we have 
successfully achieved our strategic goals we are 
now excellently positioned both financially and 
operationally to deliver on our vision 
in order to establish nostrum as the leading 
independent ep company in the fsu we have 
developed a simple and sustainable strategy  
that will allow us to successfully deliver nearterm 
growth combined with longterm value creation
see the report online 
wwwannualreport2013nostrumoilandgascom outstanding technical and regional expertise
social and economic development
access to debt and equity capital markets
a strong and growing reserve base
aiming to double production by fy2016
investment  
in strategic  
acquisitions
production 
appraisal 
exploration
stateoftheart
infrastructure
creating economies of scale through the value chain
us 895m  
revenue in 2013
simple 
sustainable 
successful
highest standards of corporate governance
contents
strategic report
02 nostrum at a glance
04 our investment case
06 where we operate
08 key performance indicators
10 key milestones
12  key historical developments
14  chairman’s statement
18  chief executive’s review
20  our business model
22  our strategy
26  market overview
30  performance review
44  corporate social responsibility
56  financial review
62  principal risks and uncertainties
corporate governance
65  chairman’s overview
66  corporate governance
69  remuneration report
70  board of directors
72   nostrum oil  gas  
 management team
74   zhaikmunai llp  
 management team
76  audit committee report
regulatory information
78  investor information
appendix
80  additional information
85  responsibility statement
87  glossary
financial statements 
95  consolidated financial 
statements
how we are performing
our simple and sustainable strategy  
has allowed us to increase production  
sixfold since 2010 we look forward to  
successfully doubling it again in the  
next three years
simple
sustainable
successful
corporate struc t ure
nostrum oil  gas lp “nostrum” is a  
limited partnership with its corporate  
headquarters located in amsterdam  
the netherlands which indirectly  
holds and controls zhaikmunai llp   
a kazakhstanregistered limited liability  
partnership the latter was set up in  
march 1997 to explore produce and sell  
hydrocarbons from the chinarevskoye  
field in northwestern kazakhstan
united
kingdom
ireland
france
spain
italy
sweden
norway
finland
estonia
latvia
poland
slovakia
hungary
belarus
lithuania
ukraine
germany
czech
republic
romania
bulgaria
austria
serbia
bosnia
turkey
greece
macedonia
albania
switzerland
georgia
azerbaijan
armenia
croatia
slovenia
netherlands
belgium
denmark
russia
kazakhstan
turkmenistan
uzbekistan
moldova
kyrgyzstan
tajikistan
portugal
where we operate
06
2013
2012
2011
2010
582
506
522
539
2009 527
 582 boe
2p reserves
15 from 2012
performance 
highlights
08
our business 
model
20
our 
strategy
22
strategic 
objective
to become the  
leading independent  
oil and gas company  
in the fsu
02
nostrum  
at a glance
corporate 
governance
65
01
nostrum oil  gas annual report 2013 
strategic report corporate governance regulatory information appendix financial statements a robust and  
growing business
strategic report
nostrum at a glance
who we are
nostrum oil  gas is a multifield 
ep partnership operating in 
northwest kazakhstan our main 
producing asset is the chinarevskoye 
field located in the northern part  
of the oilrich precaspian basin 
other assets currently include the 
rostoshinskoye darzhinskoye and 
yuzhnogremyachenskoye fields 
which are all located in the vicinity  
of the chinarevskoye field and  
its gas treatment facility gtf 
nostrum has 582 million of 2p 
reserves and has produced over  
16 million barrels of oil equivalent 
during 2013 
what we d o
nostrum oil  gas focuses on creating longterm 
shareholder value through the development and discovery 
of oil and gas reserves as well as the production and sale  
of crude oil stabilised condensate lpg and dry gas we 
have invested over us15 billion in our licence area since 
2004 we have a highly skilled management team which 
has delivered on numerous infrastructure projects as well  
as significant expansion of the reserve base over the last  
nine years this expansion is the result of our own appraisal 
work as well as successful ma
our commercial products
nostrum’s range of products includes crude oil  
stabilised liquid condensate lpg and dry gas currently  
all production comes from the chinarevskoye licence  
we have invested in developing our own infrastructure to 
control the transportation of our products until they reach 
the final offtaker this transport serves a wide network of 
destinations and offtakers ensuring we always obtain the 
best possible prices 
the change of name to nostrum oil  gas during  
2013 reflects the development of the partnership into  
a multiasset operation in addition it is part of our  
strategy to continue to expand our portfolio of assets 
beyond our current four fields
our new brand produ ction
46 17 8m boepd
25  increase on 2 0 1 2
ebitda
us55 1 m
2 1  increase on 2 0 1 2
revenue
us895m
2 1  increase on 2 0 1 2
2p reserv es
582m boe
1 5  increase on 2 0 1 2
key st atis tics
02
nostrum oil  gas annual report 2013  average daily production rates
nostrum has increased production every year since 2004 
the current production from the chinarevskoye licence 
only represents half of what we are aiming to achieve  
from the field we are currently working to increase our 
processing capacity allowing us to double production  
by the end of 2016
fy 2013 product mix 
42
9
49
n  crude oil and stabilised 
condensate
n  lpg liquid petroleum gas
n  dry gas
doubling production by 2016
reserv es
an update of nostrum’s reserves report was completed  
by ryder scott in december 2013 this report includes  
the reserves at chinarevskoye and the three additional 
licence areas acquired in 2013 an overview of the  
reserves is provided below
1p the proven reserve base grew from 195 mboe as  
of 31 december 2012 to 199 mboe taking into account 
approximately 16 mboe of production during 2013 
nostrum enjoyed a reserve replacement ratio of 102
2p total 2p proven and probable reserves increased by 
75 mboe to 582 mboe from 31 december 2012 the new 
licence areas account for 98 mboe of the total 2p reserves 
the total chinarevskoye 2p reserves were 483 mboe
3p total 3p reserves were 691 mboe of which 76 mboe  
are located in the chinarevskoye field and 34 mboe in  
the new licence areas this represents a decrease from  
the previous 3p estimate carried out in 2009 due to a 
combination of reserves moving into higher categories 
cumulative production over the period and the additional 
information built over the last four years this allows for 
more accurate 2p reserves to be calculated and removes 
the possible reserves which are now considered unlikely  
to be suitable for commercial production
for a detailed breakdown of the reserve report please 
access ryder scott reserves report
please see our website for more detail on the ryder scott reports
market positioning
nostrum oil  gas is in a unique position on the market 
the company’s frontloaded investment programme has 
meant it is now a leader in terms of infrastructure in the 
region with the ability to process significant volumes of raw 
gas via its gas treatment plant in addition its advantageous 
location in northwest kazakhstan places it closer to its final 
offtake destinations 
20 16
1 00 000 boepd
20 13
46 178 
boepd
03
nostrum oil  gas annual report 2013 
strategic report a compelling  
investment case
strategic report
our investment case
over half a billion  
of 2p reserves
nostrum has developed a worldclass portfolio of assets 
in northwest kazakhstan our frontloaded investment 
programme has been at the root of our current highly 
favourable operational and financial position with  
582 million of 2p reserves and production of more than 
16 million barrels of oil equivalent per year nostrum 
provides a unique combination of significant production 
and reserve upside and strong operational cash flow 
record 
levels of 
production
2013 saw an average 
daily production record 
of 46178 boepd 
compared to 36940 in 
2012 this growth was 
driven by the further 
rampup of the gtf we 
now expect a period of 
sustained production at 
levels above 45000 
boepd for the next two 
years before more than 
doubling production  
by the end of 2016 
on 1 march 2013 nostrum acquired 100 of the subsoil use 
rights related to three oil and gas fields rostoshinskoye  
darzhinskoye and yuzhnogremyachenskoye through  
its operating subsidiary zhaikmunai llp  the fields  
are located in the precaspian basin to the northwest  
of uralsk approximately 60120 kilometres from the 
chinarevskoye field our current main producing  
asset the total consideration paid for these fields  
was us16 million
worldclass 
portfolio  
of assets
excellent financial 
performance
excellent production levels 
and a stable oil price in 
2013 resulted in our best 
financial performance to 
date nostrum produced 
record revenue us895 
million ebitda us550 
million and net income 
us220 million for a truly 
outstanding overall result 
04
nostrum oil  gas annual report 2013  compelling 
business case 
robust model and 
clear strategy
nostrum has a clear strategy which is  
based on a solid foundation and compelling 
business case 
our st rat egy has  
fiv e component s
1   delivering nearterm production growth 
t arget double production by the end  
of 2016 
2  continuing to appraise the existing 
chinarevskoye field and the three new 
fields our goal is to transfer as many 
probable and possible reserves in to the 
proven category allowing us to maintain 
peak production up to the end of the 
licence term 
t arget 700 million boe of proven reserves
3  continuing to expand our reserve base 
through additional acquisitions our goal  
is to consider ma where we can continue 
to leverage off our infrastructure whilst 
also considering expanding our reserve 
base beyond northwestern kazakhstan 
t arget a multiasset company
4  commitment to achieving the highest 
possible standard of corporate and  
social responsibility 
t arget a positive and lasting contribution 
to the areas in which we operate
5  focus on delivering shareholder value 
t arget sustainable longterm value
with a dedicated and experienced 
management team used to operating in 
kazakhstan we are confident in our ability  
to execute our strategy
strategic report
05
nostrum oil  gas annual report 2013  united
kingdom
ireland
france
spain
italy
sweden
norway
finland
estonia
latvia
poland
slovakia
hungary
belarus
lithuania
ukraine
germany
czech
republic
romania
bulgaria
austria
serbia
bosnia
turkey
greece
macedonia
albania
switzerland
georgia
azerbaijan
armenia
croatia
slovenia
netherlands
belgium
denmark
russia
kazakhstan
turkmenistan
uzbekistan
moldova
kyrgyzstan
tajikistan
portugal
advantageous  
location of assets
strategic report
where we operate
our main operational facilities are located  
at the 74squarekilometre chinarevskoye  
field in the province of batys in northwest 
kazakhstan our additional licences are  
located 60120 kilometres away
transpor t ation
crude oil
nostrum transports 100 of its crude 
oil through its own liquids pipeline 
from the field site we then export  
85 of our crude oil through our  
rail terminal to various destinations 
ranging from finland to the black sea 
ports and the ukraine we are always 
looking to expand the number of 
destinations we sell to in order to 
achieve the best possible netbacks 
condensate
nostrum transports 100 of its 
condensate through its own liquids 
pipeline from the field site we then 
export 100 or our condensate  
by rail to various destinations the 
majority of our condensate is sold  
at the black sea ports however we  
are continually seeking to expand  
the possible destinations in order  
to achieve the best possible  
netbacks for the company
key 
current destinations
 oilcondensate
possible destinations
 oilcondensate 
 lpg and oilcondensate
06
nostrum oil  gas annual report 2013  united
kingdom
ireland
france
spain
italy
sweden
norway
finland
estonia
latvia
poland
slovakia
hungary
belarus
lithuania
ukraine
germany
czech
republic
romania
bulgaria
austria
serbia
bosnia
turkey
greece
macedonia
albania
switzerland
georgia
azerbaijan
armenia
croatia
slovenia
netherlands
belgium
denmark
russia
kazakhstan
turkmenistan
uzbekistan
moldova
kyrgyzstan
tajikistan
portugal
 
chinarevskoye 
field
darzhinskoye
field
rostoshinskoye
field
russia
northwestern kazakhstan
uralsk
yuzhno
gremyachenskoye
field
key
 border
 gas pipeline 
 nostrum oil pipeline
 nostrum gas pipeline
 oil pipeline 
 nostrum oil loading rail terminal at rostoshi 
 gas treatment facility gtf 
 oil treatment facility otf
 expanding for the fu t ure
lpg
nostrum transports all of its lpg on 
trucks from the field site to the rail 
terminal the lpg is then loaded on  
to special lpg trains which transport  
it to the offtaker the majority of our 
lpg is sold at black sea ports and 
distributed by traders into eastern 
europe and turkey
d ry gas
nostrum transports dry gas for sale 
along its own 17kilometre pipeline 
which connects to the central asia 
gas pipeline our gas is sold at the 
connection point
further production from our  
three new fields will all flow  
through the production facilities  
at the chinarevskoye field and then 
follow the same transport routes  
all of which have the capacity to 
accommodate the increased volumes
07
nostrum oil  gas annual report 2013 
strategic report focused on  
performance
strategic report
key performance indicators
financial kpis
2013
2012
2011
2010
895
737
343
178
2009116
 us895m
21 from 2012
revenue
2013
2012
2011
2010
551
457
188
99
2009 60
 us551m
21 from 2012
ebitda
2013
2012
2011
2010
220
162
82
23
2009 19
 us220m
35 from 2012
net income eps 
37 from 2012
2013
2012
2011
2010
119
087
044
012
2009 na
 us119
 us359m
23 from 2012
2013
2012
2011
2010
359
292
132
99
2009 46
operating cash ﬂow
2013
2012
2011
2010
57
53
84
99
2009 76
 us57
6 from 2012
opex per barrel
08
nostrum oil  gas annual report 2013  nonfinancial kpis
2013
2012
2011
2010
46178
36940
13158
7671
2009 7442
 46178 boepd
25 from 2012
production
2013
2012
2011
2010
582
506
522
539
2009 527
 582 boe
2p reserves
15 from 2012
2013
2012
2011
2010
199
195
169
144
2009 139
 199 mboe
2 from 2012
proven reserves
4413704
2451162
total ghg emissions
mtco
2
e
2013
2012
2011
2010
2612493
2153123
09
nostrum oil  gas annual report 2013 
strategic report stra tegic miles t ones
201 3 key milestones
strategic report
key milestones
10
nostrum oil  gas annual report 2013 
record production 
levels
•	 average 2013 production  
was 46178 boepd above the 
45000 boepd full year target
•	 q4 production was more than 
48000 boepd with the plant 
running at close to full capacity 
throughout the quarter
•	 more than 50 of the 2013 
production came from liquids 
crude condensate lpg
continued reserve 
growth
•	 1p the proven reserve base  
grew from 195 mboe as of  
31 december 2012 to 199 mboe  
as of 31 august 2013 taking into 
account approximately 17 mboe  
of production during 2013 
nostrum enjoyed a reserve 
replacement ratio of 102
•	 2p total 2p reserves increased  
by 75 mboe from 31 december 
2012 to 582 mboe the new licence 
areas account for 98 mboe of the 
total 2p reserves 
•	 3p total 3p reserves reached  
691 mboe of which 76 mboe  
are located in the chinarevskoye 
field and 34 mboe in the new 
licence areas 
transition to a 
multifield model
•	 in 2013 nostrum acquired 100  
of the subsoil use rights related  
to three new oil and gas fields 
rostoshinskoye darzhinskoye  
and yuzhnogremyachenskoye  
for a total purchase price of  
us16 million the fields are 
located in the precaspian basin  
to the northwest of uralsk 
approximately 60120km from  
the chinarevskoye field this was 
the first step in our ma strategy 
marking the beginning of a wider 
strategic plan to consider further 
ma opportunities in kazakhstan
name change to 
nostrum oil  gas
•	 nostrum oil  gas has replaced 
zhaikmunai as the name of the 
listed holding partnership the 
name change reflects our strategy 
to further expand the company’s 
assets in the region separating  
the names of the operating 
company and holding company 
allows us to easily communicate 
the acquisition of any additional 
operating companies
pursuit of an 
alternative listing
•	 nostrum anticipates concluding  
the previously announced 
preparatory legal and regulatory 
work for a possible alternative 
listing during h1 2014 as part of 
this process in december 2013 
nostrum acquired probel capital 
management nv which was 
previously the partnership’s 
principal external provider of oil 
and gas and management services 
in conjunction with a possible 
alternative listing we requested  
a waiver of the state preemptive 
right and consent from the ministry 
of oil  gas in kazakhstan for 
certain corporate restructurings 
contemplated for such a listing  
on 30 december 2013 we received 
such waiver and consent from  
the ministry of oil  gas of the 
republic of kazakhstan we 
currently intend to implement  
this corporate reorganisation in  
the first half of 2014 with the 
approval of our limited partners financial milest ones operational miles t ones
11
nostrum oil  gas annual report 2013 
strategic report
record financial results
•	 record revenue of us895 million 
ebitda of us551 million and net 
profit of us220 million ensured 
that all financial targets were 
exceeded in 2013
•	 the company ended the year  
with us245 million of cash on its 
balance sheet further reducing 
the net debt to ebitda ratio 
below 1x whilst also distributing 
34 cents per gdr and spending 
more than us20 million on a 
share buyback programme
further increase in 
earnings per share
•	 an increase in net income  
from 2012 of us57510  
resulted in eps growth of 37 
ensuring significant value 
continued to be delivered to 
shareholders during 2013
increase in level  
of distributions 
•	 nostrum distributed 34 cents  
per common unit to its limited 
partners through its 2013 annual 
cash distribution this was a 5  
increase on the 2012 distribution 
the annual distribution was  
a policy implemented by the  
board in 2012 and the increase  
has reinforced the company’s 
commitment to ensure that  
excess cash is reinvested in future 
growth as well as considered  
for return to limited partners
introduction of a gdr 
buyback programme
•	 the company bought back 
approximately 18 million gdrs 
during 2013 the programme  
was implemented to both fund  
the employee share option plan 
and take advantage of the fact that 
the company believed its shares 
were significantly undervalued  
a total cash consideration of 
approximately us20 million was 
used for this purpose during 2013 
that existing production is 
maintained and that 100000 
boepd can be achieved by  
the end of 2016
gtu3 construction 
remains on track
•	 certain key milestones in the 
construction of the third train  
of the gtf were achieved during 
2013 we have appointed 
ferrostaal industrie anlagen 
gmbh germany and 
rheinmetall international 
engineering a 50 subsidiary  
of ferrostaal as the project 
manager in charge of managing 
the engineering procurement 
construction and commissioning 
of the entire third train project 
on behalf of our operating 
subsidiary zhaikmunai llp   
the frontend engineering  
and design feed study 
prepared by lexington group 
international usa has been  
the basis from which ferrostaal’s 
engineering team has been 
developing the project since 
late 2012 we intend to 
complete the procurement 
process of longlead items 
during 2013 as well as start on 
construction works on the gtu3
record production 
volumes
•	 nostrum exceeded its internal 
production target of 45000 
boepd during 2013 we 
successfully increased the output 
from our gas plant during early 
2013 resulting in record levels  
for the year and also exceeding 
nameplate capacity during q4 
2013 we expect production to 
now remain stable at 45000 
boepd for the next 24 months
continued success 
shown in drilling results
•	 nostrum resumed its focus  
on appraisal drilling in 2013 
successful results in the appraisal 
programme allowed for more than 
100 replacement of the proven 
reserves in addition production 
drilling continued to plan we 
currently have 29 producing wells 
and we intend to drill 1112 wells 
per year at the chinarevskoye field 
over the next three years to ensure 
operational miles t ones 2008
120kilometre crude oil and 
stabilised condensate pipeline 
between the chinarevskoye 
field and the rail terminal in 
rostoshi near uralsk
2008
us100 million ipo  
at 10 per gdr and 
us550 million  
borrowingbased  
facility in place
2011
gas 
treatment 
facility 
completed
2010
us450 
million 
bond 
raised  
at 105 
nost rum’s us15 billion phase 1 d ev elopment plan  
focused on t he chinarev skoye field an d cov ered  
the following key component s
the first phase of d ev elopment
20042013
2012
us560 million bond
issued at 7125 to refinance  
part of bond debt and for  
general corporate purposes

2008
production of
5095  
bopd
2013
q4 full quarter production of
48458  
boepd
2011
17km dry gas 
pipeline completed
strategic report
key historical developments
where we’ve 
come from…
2004
zhaikmunai llp 
is acquired
2004 2008 2010 2011 2012 2013
12
nostrum oil  gas annual report 2013  nost rum’s second phase of d ev elopment is  
est imat ed t o req uire an inv est ment in excess  
of us12 billion ov er fiv e years this will ena ble  
us t o achiev e our t arget prod uction of more  
t han 100000 boepd by t he end of 2016
2018
development 
programme 
submitted for  
new fields
2015
construction  
of new otu
2014
us400 million bond issued  
at 6375 for refinancing and  
general corporate purposes

2012 2013
2016
gtf completed  
more than doubling 
production to  
1 00000 boepd
2017
full year production  
of more than 
 1 00000  
boepd
t he second phase of d ev elopment
20142018
the first phase of d ev elopment
20042013
2004 2008 2010 2011 2012 2013 2014 2016 2017 2015 2018
13
nostrum oil  gas annual report 2013 
strategic report strategic report
chairman’s statement
“ we made phenomenal progress during 
2013 we delivered record production 
and financial results as well as taking 
our first steps in ma”
delivering  
continued growth
with strong cash flows low leverage 
and operational control we are in  
an excellent position to achieve  
our targets i am delighted with  
the performance of the management 
team in 2013 and look forward to 
achieving further success in 2014
strong financial performance
from a financial perspective our 
performance was beyond all our 
internal expectations the record 
levels of revenue and ebitda in  
2013 were the result of many years  
of frontloaded investment and 
geological work with ebitda of more 
than us550 million and margins still 
above 60 i am delighted with the 
strong financial position we are in we 
have continuously reduced leverage 
since our inaugural bond transaction  
in 2010 and are now able to enjoy 
access to the debt capital markets  
at far lower rates than before 
we continue to manage our cash 
position prudently whilst also  
looking to maintain a balance  
between shareholder distributions  
and investment in growth i believe  
in the current oil price environment  
we can sustain these financial results 
over the coming years and provide  
an excellent platform from which to 
deliver our vision 
our vision 
our vision is to become the leading 
independent oil and gas company  
in the former soviet union fsu  
we have all the necessary skills to 
create a highquality and complementary 
portfolio of assets in the fsu and our 
strategy is built on extracting as much 
value as possible from the frontloaded 
infrastructure investments i believe 
the management team has all the 
knowledge experience and skill 
needed to deliver this vision over  
the coming years
a clear strategy 
we are working to realise our vision 
through a clearly defined strategy 
balancing organic development with 
opportunistic expansion through 
acquisitions our main priority 
remains as always to continue to 
deliver growth and shareholder value  
in a responsible and efficient way 
a very successful year
we made phenomenal progress 
during 2013 we delivered record 
production and financial results as well 
as taking our first steps in ma we 
now have a portfolio of assets that  
will further prolong the lifespan of  
our infrastructure at full capacity  
frank monstrey
chairman
production grew by
25

during 2013
14
nostrum oil  gas annual report 2013  a solid operational basis
our financial performance was built  
on another record year of operational 
results production of 46178 boepd 
was above the targeted 45000 boepd 
we are now entering a period of 
sustained production at levels above 
45000 boepd this steady production 
and associated cash flow will allow us 
to invest in further infrastructure and 
drilling to reach production of 100000 
boepd by the end of 2016 during 
2013 we have refocused on the 
chinarevskoye field appraisal with a 
programme aiming to convert more 
probable and possible reserves into 
the proven reserves 1p category  
over the next three years in addition 
to this organic growth the cash flows 
we are generating allow us to grow 
reserves and extend production 
through our recently established  
ma strategy 
our ma strategy
we took our first steps in ma during 
2013 by acquiring three additional 
licences in close proximity to our gas 
treatment facility gtf this was the 
first step in broadening our strategy  
to combine organic growth from  
the continued development of the 
chinarevskoye field with growth 
achieved through ma our ma 
strategy has two clear elements  
firstly we remain focused on the  
area around our gtf where we can 
enjoy economies of scale by feeding 
our infrastructure with additional 
reserves to prolong the period of  
peak production secondly we are 
looking further afield to other areas  
of kazakhstan where we can build  
on our firstclass track record of 
appraising and developing kazakh  
oil and gas assets i am delighted  
that we were able to add 98 million 
boe 2p reserves through the new 
fields increasing our total 2p  
reserves to 582 million boe i look 
forward to developing this aspect  
of our strategy in 2014 and beyond 
t he highest corporate  
governance standards
at nostrum we are committed to 
implementing exemplary standards  
of corporate governance which we 
recognise as key to our business  
as such we have voluntarily adopted  
a groupwide corporate governance 
code based on the best practice of  
the uk corporate governance code 
in addition we have introduced 
internal control provisions in line  
with the code ensuring that we are 
fully compliant with our ongoing 
obligations under the uk listing  
rules and the uk disclosure and 
transparency rules as chairman  
i recognise that it is my role to  
provide the leadership to the board  
to ensure that it delivers on its 
responsibilities the board takes  
its role very seriously in ensuring 
group values are promoted we have  
a zero tolerance approach to corrupt 
practices and we have a commitment  
at board level to maintaining a culture 
focused on our core principles of 
respect honesty and transparency 
this is based on our belief that  
good governance is fundamental  
to protecting value on behalf of  
our shareholders the board sets  
the standard for the rest of the 
company and works with 
management to embed these  
values throughout the organisation 
15
nostrum oil  gas annual report 2013 
strategic report •	 we also report on our direct 
involvement in the community 
through social infrastructure 
programmes sponsorship and 
charitable work
•	 we manage our environmental 
footprint carefully and adhere  
fully to relevant legislation we  
are also proactive in defining our 
environmental objectives to the 
highest possible standards and 
ensuring stringent compliance  
and progress monitoring
 in 2013 our work in this area had a 
positive impact on our wide range  
of stakeholders including investors 
business partners regulators 
employees customers and local 
communities as well as on the 
environment and society in general 
a responsible and  
transparent business
at nostrum we strive to be a 
responsible and transparent business 
our corporate responsibility covers  
the relationships we have with all our 
stakeholders including shareholders 
employees contractors local 
communities and host governments 
as well as with the environment in 
which we operate our corporate 
responsibility strategy focuses  
on four key areas – qhse people 
community and environment – and 
includes the following initiatives
•	 we have made it a priority to 
communicate our approach to our 
stakeholders emphasising our 
stringent corporate governance 
policies and business ethics
•	 we monitor and report on the 
wellbeing of our employees  
health and safety measures  
working environment specifics  
and overall benefits 
strategic report
chairman’s statement 
continued
“ at nostrum we strive  
to be a responsible and  
transparent business”
2p reserves grew by
 15

during 2013
16
nostrum oil  gas annual report 2013  rewarding exceptional performance
we have continued to witness a 
tightening recruitment market as well  
as increased demand and competition 
for skilled and experienced employees 
our growth and success revolve around 
the quality and commitment of our 
people we maintain a competitive 
remuneration policy by industry 
standards to ensure that we can 
attract and retain the best people 
it rewards exceptional performance 
with a balance between short and 
longterm rewards and a 
comprehensive benefits scheme 
we continue to grow our local content 
more than 98 of our employees were 
kazakh nationals as of the end of 2013 
we will continue to develop our 
employment practices and policies  
to ensure we can attract and retain  
the best talent 
conclusion
2013 saw record operational and 
financial performance across our 
business we benefited from a  
strong oil price environment  
which helped the momentum of  
our financial growth and sustained  
our track record of shareholder 
distribution which increased by 5 
over 2012 strategically we made 
excellent progress in expanding our 
portfolio of assets within northwest 
kazakhstan in 2014 i expect our  
focus to shift towards ensuring the 
timely completion of our next gtf  
and building the feedstock in order  
to double production by the end of 
2016 we enter this next investment 
phase with a very strong cash position 
low leverage and healthy margins  
we have the platform to execute all 
our strategic initiatives and this gives  
me great hope for nostrum in 2014 
and beyond 
17
nostrum oil  gas annual report 2013 
strategic report strategic report
chief executive’s review
“ reaching full processing capacity  
at the gtf alongside increasing our 
2p reserves to 582 mboe has been  
a tremendous achievement”
201 3 was an  
outstanding year
2013 was an outstanding year 
reaching full processing capacity  
at the gtf alongside increasing our  
2p reserves to 582 mboe has been a 
tremendous achievement we are now 
working on our second development 
phase which will entail the construction 
and the commissioning of a new gas 
plant as well as a sizeable drilling 
programme spanning the next  
45 years the next gtf is a particularly 
critical part of our strategy enabling  
us to double production before the 
end of 2016
excellent reserve growth
we enjoyed excellent reserve  
growth from the acquisition  
of three neighbouring fields 
rostoshinskoye darzhinskoye and 
yuzhnogremyachenskoye allowing  
us to increase our 2p reserves to  
582 mboe we now look forward  
to the appraisal programme at these 
fields as well as further appraisal  
at chinarevskoye to ensure we  
can maintain peak production for  
as long as possible 
the chinarevskoye field continues  
to demonstrate its strong geological 
potential as we were able to once 
again replace more than 100 of  
our proven reserves in 2013 i am  
very excited about the future of our 
current asset base as well as the 
potential for further expansion  
over the coming years 
strong operational performance
the chinarevskoye field is performing 
excellently with the oil treatment 
facility otf and the gas treatment 
facility gtf operating at nameplate 
capacities we forecast a daily total 
production average of approximately 
45000 boepd for 2014 and 2015 
intensive drilling programme 
thirteen wells were drilled as part  
of our 2013 programme we now  
look forward to an intensive drilling 
programme of more than 50 wells  
over the next five years we anticipate 
drilling 45 production wells each  
year to ensure existing production is 
maintained with the remainder of the 
wells targeting future feedstock for our 
next gtf and appraisal wells focused 
on shifting probable and possible 
reserves into the proven category 
t hird gt f on track
during 2013 we took significant steps 
towards the construction of our next 
gas plant which will allow faster 
monetisation of reserves by increasing 
treatment capacity by an additional  
25 bcm of raw gas per year to a total 
of 42 bcm per annum investments 
have already been made in the initial 
design of this third train and in the 
earlystage procurement of longlead 
items construction and commissioning 
of this stateoftheart infrastructure is 
forecast to be completed by mid 2016 
with production reaching 100000 
boepd by the end of that year
kaiu we kessel
chief executive officer
18
nostrum oil  gas annual report 2013  implementing our ma strategy 
in addition to proving up reserves at 
chinarevskoye our development plan 
also focuses on sustaining longterm 
production beyond chinarevskoye 
alone this is the basis of our ma 
strategy as reflected in the recent 
acquisition of the subsoil use rights 
related to three adjacent oil and gas 
fields rostoshinskoye darzhinskoye 
and yuzhnogremyachenskoye in the 
close vicinity of the chinarevskoye 
field based on ryder scott’s analysis 
these fields have added 98 million of 
2p reserves and we look forward to 
the results of further appraisal in the 
next 18 months
by virtue of our size development 
stage and production track record  
we have acquired high visibility both 
locally and internationally and as a 
result are kept informed of further 
ma opportunities our approach is  
to remain both pragmatic and prudent 
as we consider these options our 
main focus remains on northwest 
kazakhstan where we know the 
landscape and are already operating 
successfully in addition we would also 
consider opportunities outside of this 
region where we see the potential to 
create further shareholder value 
in 2014 t here are four key obj ect iv es for t he company 
in order t o cont inue t o deliv er on our st rat egy
1
 ensure construction of the next gas plant remains  
on track for 2016
2
 continue to grow the proven reserve base through 
appraisal of chinarevskoye and our three new fields
3
 establish a dedicated business development team  
to ensure we can quickly and accurately evaluate  
the opportunities in the region
4
 ensure that the financial position of the company 
remains stable
enhancing shareholder value
i believe that these objectives  
if successfully achieved will provide 
the platform to significantly enhance 
shareholder value we have 
demonstrated in the past that we  
can deliver on our strategy and i am 
therefore confident as we enter 2014  
 
that we are well positioned to continue 
to achieve our goals i look forward  
to successfully executing the next 
infrastructure project whilst also 
ensuring the reserve base is not  
only maintained but increased  
over the coming years
19
nostrum oil  gas annual report 2013 
strategic report strategic report
our business model
20
nostrum oil  gas annual report 2013 
how we create value
outstanding technical and regional expertise
social and economic development
access to debt and equity capital markets
a strong and growing reserve base
aiming to double production by fy2016
investment  
in strategic  
acquisitions
production 
appraisal 
exploration
stateoftheart 
infrastructure
creating economies of scale through the value chain
us895m  
revenue in 2013
simple 
sustainable 
successful
highest standards of corporate governance 21
nostrum oil  gas annual report 2013 
strategic report
outstanding technical and regional expertise
social and economic development
we create value by
1  production appraisal and 
exploration of our existing  
licence area
2 strategic acquisitions
3  further leveraging of our 
infrastructure and experience  
of operating in the fsu
our track record of successfully building and financing 
large infrastructure while developing reserves into 
commercial production puts us in a unique position
with our management team’s outstanding technical  
and regional expertise in both oil and gas we can use  
this platform to deliver future growth to our shareholders
how we run our business is equally important in  
enabling us to successfully deliver our business plans  
and plan our growth strategy protecting our business 
sustaining our good reputation maintaining our 
entrepreneurial culture and contributing to social  
and economic development are the cornerstones  
on which we are building our business
delivering 
shareholder 
value
ebitda 
us551m
eps 37 
growth
2p – 582 mboe
over  
us12bn 
investment 
programme strategic report
our strategy
a sustainable strategy  
for growth
our stra tegic priori ties
delivering 
nearterm 
production 
growth
appraising  
and developing 
nearterm 
projects
exploration 
upside 
through ma
1
3
2
22
nostrum oil  gas annual report 2013  our stra tegic priori ties
linking corporate 
responsibility  
directly to the 
growth of the 
company
our growth is based on five strategic priorities  
to help build a balanced pool of resources
focusing on 
delivering 
shareholder 
value
strategic 
objective
to become the  
leading independent  
oil and gas company  
in the fsu
our strategy is underpinned by firstclass infrastructure and  
a strong balance sheet that includes funding from operating 
cash flow and capital markets
this strategy is focused on building sustainable longterm  
value growth our objectives are delivering attractive returns  
to our shareholders as well as making a positive and lasting 
contribution where we operate
5
4
strategic report
23
nostrum oil  gas annual report 2013  strategic report
our strategy
continued
24
nostrum oil  gas annual report 2013 
a sustainable strategy focused on growth
stra tegic priori ties
delivering near 
term production 
growth
1
our aim is to double our production 
levels by the end of 2016 to do this 
we are building an additional third 
train to our gtf next to the existing 
two trains which can currently treat  
a total of 17 bcm of raw gas per year 
the capacity of this third train will  
be 25 bcm of raw gas bringing the 
total gtf capacity to 42 bcm of  
raw gas annually with all three  
trains in operation
the significant investment in 
infrastructure will be fully funded  
from operational cash flow all  
other existing nostrumowned  
and operated infrastructure such  
as pipelines and rail terminals have 
ample capacity to accommodate  
at least a doubling of the current 
production levels
appraising and 
developing 
nearterm 
projects
2
the chinarevskoye field currently  
has well over half a billion boe of 
reserves ryder scott in its august 
2013 report confirmed proven 
reserves of 199 million boe leading  
to a replacement ratio of more than 
100 our appraisal programme will 
focus on the chinarevskoye field’s 
probable reserves and possible 
reserves over the next few years our 
target is to build our proven reserve 
base towards 700 million boe this will 
ensure that we can produce 100000 
boepd until the end of our current 
licence in 2033 in addition we also 
intend to start appraising the three 
recently acquired adjacent fields 
rostoshinskoye darzhinskoye and 
yuzhnogremyachenskoye with a 
view to extending our reserve base 
over the last four years drilling has 
focused mainly on production wells in 
order to secure feedstock for the gtf 
with the feedstock in place the focus 
will shift to a renewed appraisal drilling 
programme in order to transfer more 
of our possible and probable reserves 
into the proven category in the 
existing oil price environment the 
current plan foresees approximately 
50 wells being drilled over the next  
45 years approximately 12 wells are 
planned for 2014 alone more than  
half of which will be appraisal wells
taken together these growth 
programmes will lay the foundations  
for more than doubling total 
production by the end of 2016  
and extending production at this  
level well beyond 2020
exploration 
upside 
through ma
3
we are also pursuing a strategy  
of growth through valueaccretive 
acquisitions in line with our goal  
to leverage existing infrastructure to 
further add reserves at low finding 
costs the recent us16 million 
acquisition of the rostoshinskoye 
darzhinskoye and yuzhno 
gremyachenskoye fields all of  
which are located between 60 and  
120 kilometres from the existing gtf 
marked a first step in this direction 
following completion of appraisal 
work on these three fields by the end 
of 2015 a development plan will be 
submitted to the kazakh state 
opportunities for acquisitive growth  
in kazakhstan are being evaluated on  
a continuous basis we are building  
on our enviable development and 
operational track record in kazakhstan 
by continuing to look for compelling 
acquisitions which will further improve 
shareholder value 25
nostrum oil  gas annual report 2013 
strategic report
linking corporate 
responsibility 
directly to the 
growth of the 
company
4
our long presence in kazakhstan  
has led to a natural gradual and 
ambitious involvement in sustainable 
development over the years we have 
built a comprehensive corporate social 
responsibility csr roadmap focused 
on employee security and welfare 
investment in community building 
and environmental protection and 
reporting each of these priorities  
is now part of the overall yearly 
management plan and is monitored 
against specific voluntary as well as 
compliance objectives 
as such we continue to strive  
to improve and implement new 
policies each year in order to further 
bring sustainability to the core of all  
of our operations 
we see csr as an important indicator 
of nonfinancial risk and are constantly 
developing internal best practices  
to improve our standards this is an 
important standalone part of our 
strategy as well as complementary  
to all our other strategic initiatives 
sustainable development will remain  
a priority in 2014 and beyond
focusing  
on delivering 
shareholder value
5
our strategy is centred on a  
balanced approach to investment  
in growth this entails both a  
prudent cash management policy  
and returns to shareholders 
we are in a strong financial position 
with both revenue and ebitda at 
record levels for the next five years  
our capital expenditure capex 
programme can be fully funded  
from our operational cash flow in 
addition we intend to hedge all our 
nonscalable capex components 
against oil price fluctuations finally 
we aim to keep our net debt to ebitda 
ratio of 15x in addition to a healthy 
cash position in order to offset the 
impact of any volatility in the oil price
our distribution policy was adopted  
in 2012 and distributions increased by 
5 during 2013 this will be pursued 
over the coming years assuming it 
does not impact our cash balance or 
growth strategy in a fluctuating oil 
price environment we also started 
implementing a gdr buyback 
programme in 2013 finally we 
continue to take significant steps 
towards achieving our goal of an 
alternative listing in 2014 
what we ha v e achiev ed in 2013
1  record production levels with nearterm production 
growth of 25 over 2012
2   2p reserve growth of 15 rising to 582 mboe
3  first steps in ma with acquisition of three licences  
in close proximity to our existing infrastructure 
allowing us to extend its production further
de v elopment plans o v er t he next  
t hree years
1  complete construction of our second gtf by  
mid2016 and end 2016 with production greater  
than 100000 boepd
2  move probable and possible reserves to the proven 
category
3  appraise three new fields and submit development 
programme to the state
4 construct new oil treatment facility otf 26
nostrum oil  gas annual report 2013 
the oil and gas  
market in kazakhstan
1
strategic report
market overview
kazakhstan is a vast country the size of western europe 
its substantial reserves of natural resources ensure its 
enormous economic potential 
kazakhstan is both geographically  
and ethnically diverse with a 
population of 157 million kazakh  
and russian are the main spoken 
languages and islam and christianity 
the dominant religions landscapes 
vary wildly from mountainous regions 
to lowlying fertile plains and arid 
steppes its new capital astana is  
an exercise in modernity
foreign investment in the caspian  
oil sector has brought an economic 
boom with gdp per capita having 
increased more than tenfold since  
the mid90s inequality is less 
pronounced compared to its central 
asian neighbours and unemployment 
low politically stable and with good 
infrastructure kazakhstan is a reliable 
operational environment
kazakhstan’s landlocked position 
means it is reliant on pipelines as  
well as on its extensive rail network  
for transporting oil kazakhstan’s 
dependence on russia for export 
capacity is set to be further reduced 
with the proposed kazakhstan  
caspian transportation system kcts
1  this information has unless otherwise stated been extracted from documents websites and other publications released by the president of 
kazakhstan the statistics agency of kazakhstan the ministry of finance of kazakhstan the competent authority and other public sources  
 
some of the market and competitive position data has been obtained from us government publications and other thirdparty sources including 
publicly available data from the world bank the economist intelligence unit and the annual bp statistical review of world energy 2013 as well  
as from kazakh press reports and publications and edicts and resolutions of the kazakh government in the case of statistical information similar 
statistics may be obtainable from other sources although the underlying assumptions and methodology and consequently the resulting data  
may vary from source to source  
 
certain sources are only updated periodically this means that certain data for current periods cannot be obtained and we cannot assure you  
that such data has not been revised or will not be subsequently amended kazakhstan  
has 42 billion 
proven 
hydrocarbon 
reserves
27
nostrum oil  gas annual report 2013 
strategic report
ov erv iew – the wid er caspian region
the caspian region includes those 
parts of countries including russia  
and iran adjacent to the caspian  
sea a part of uzbekistan is also 
considered to be part of the caspian 
region due to its proximity to the 
caspian sea to date the two 
significant crude oilproducing 
countries in the caspian region have 
been kazakhstan and azerbaijan 
it is expected that these countries  
will continue to lead the region in 
crude oil production in the near  
future driven by production  
growth from existing fields and the 
development of recently discovered 
fields turkmenistan and uzbekistan 
are the predominant gas producers  
in the caspian region but do not 
produce significant crude oil volumes 
relative to kazakhstan and azerbaijan 
in addition the areas of russia  
and iran near the caspian sea are  
not a source of substantial crude oil 
production for these countries russia 
however plays an important role in the 
region by providing a transportation 
corridor between the caspian sea and 
the black sea
economic growth  
in the region
since 2000 kazakhstan has 
experienced significant economic 
growth two of the main catalysts for 
this have been economic reform and 
foreign investment much of which  
has been concentrated in the energy 
sector exports of crude oil have grown 
significantly since 2000 and most of 
the oil from kazakhstan is currently 
delivered to international markets 
using pipelines which run through 
russia to shipping points on the  
black sea the opening of the  
caspian pipeline consortium cpc 
pipeline in 2001 substantially 
increased kazakhstan’s crude oil 
export capacity
inv est ment in k az akhst an’s oil and gas in d ust ry 
international investment into the 
kazakh oil and gas sector has largely 
taken the form of join ventures 
including cooperation with the  
stateowned oil and gas company  
jsc national company kazmunayigas 
“nc kmg” as well as production 
sharing agreements and direct 
grants of explorationproduction 
rights to subsoil users major projects 
in kazakhstan include the tengiz 
karachaganak and kashagan fields
in may 2003 president nazarbayev 
approved a caspian sea development 
programme currently not in effect 
through 2015 to create new offshore 
blocks potential oil fields that were 
auctioned by the competent authority 
between 2003 and 2010 nc kmg  
has a mandatory share of at least  
50 in all projects related to the  
new offshore blocks
oil supply and d emand
according to bp’s statistical review  
of world energy 2012 kazakhstan 
ranked 1 1th in the world by oil reserves 
and 21st by gas reserves kazakhstan  
is the second largest oil producer 
after russia among the former  
soviet republics and has the caspian 
region’s largest recoverable oil 
reserves kazakhstan’s proven oil  
and gas reserves were 42 billion 
tonnes and 24 trillion cubic metres  
as at 31 december 2013
the kazakh government has  
stated that it expects oil and gas 
production to increase respectively  
to 150 million tonnes per year and  
794 billion cubic metres per year  
in 2015 most of this growth is 
expected to come form the tengiz 
karachaganak and kashagan fields
there are three major refineries in 
kazakhstan supplying the northern 
region at pavlodar the western 
region at atyrau and the southern 
region at shymkent all three major 
refineries are either in the control or 
joint control of nc kmg crude oil  
is also processed at mini refineries 
private small refineries
the refinery at pavlodar is supplied 
mainly by crude oil from western 
siberia the atyrau refinery runs  
solely on domestic crude from the 
western region of kazakhstan and  
the shymkent refinery generally  
uses oil from the southern region  
of kazakhstan the atyrau refinery  
is undergoing modernisation to  
provide some additional capacity  
and to allow the refinery to meet 
current european fuel standards • 
saudi arabia
• 
venezuela
• 
canada
• 
iran
• 
iraq
• 
kuwait
• 
uae
• 
russia
source eia 2012
proven reserves
billion barrels
372
300
265
254 204
140
2670
2112
1736
1512
1431
1040
978
600
471
• 
libya
• 
nigeria
• 
kazakhstan
• 
us
• 
qatar
• 
china
• 
brazil
28
nostrum oil  gas annual report 2013 
strategic report
market overview
continued
crud e oil
historically the lack of pipeline 
capacity providing access to 
international markets has limited 
kazakhstan’s ability to exploit its  
oil reserves currently more than  
7920 kilometres of kazakhstan’s 
20238 kilometres of pipeline are used  
in oil transportation the three main 
pipelines are the uzenatyrausamara 
“uas” pipeline the cpc pipeline 
and the kazakhstanchina pipeline 
the uas pipeline transports oil from 
fields in the atyrau and mangistau 
regions to russia the pipeline system 
runs for approximately 1500 kilometres 
from uzen in southwest kazakhstan to 
atyrau before crossing into russia and 
linking with russia’s transneft system 
at samara the cpc pipeline is a  
major export route extending over 
1150 kilometres originating in the 
tengiz field running through russia 
and terminating a the cpc marine 
terminal on the black sea near the 
russian port of novorossiysk the 
kazakhstanchina pipeline comprises 
two existing sovietera pipeline 
sections and three major new pipeline 
sections with a total length of around 
2800 kilometres from atyrau in 
western kazakhstan to alashankou  
on the kazakhstanchina border  
in addition the 1768kilometre 
bakutbilisiceyhan pipeline delivers 
crude oil from baku in azerbaijan  
to a new marine terminal in the  
turkish port of ceyhan and is the first 
direct pipeline link between the caspian 
sea and the mediterranean sea 
other pipeline routes from kazakhstan 
are being considered such as routes 
through the caucasus region to turkey 
and routes through iran and afghanistan 
rail transportation was the primary 
export route for kazakhstan crude 
production before the development  
of the uas and cpc pipelines  
and it remains an alternative  
transportation option
nat ural gas
most of the gas pipelines in western 
kazakhstan with the exception  
of makatatyrauastrakhan are  
designed to provide gas to cac  
the pipeline has two branches that 
meet in the southwestern kazakh  
city of beyneu before crossing into 
russia and connecting with the 
russian pipeline system
in december 2010 kazakhstan  
started the construction of the 
beineubozoishymkent gas  
pipeline designed to transport  
gas from west kazakhstan for  
use in the southern regions of the 
country and for export to china
the bukhara urals gas pipeline 
originates in uzbekistan and was 
initially built to supply gas from 
uzbekistan to northeast kazakhstan 
and russia’s southeast urals region 
bukharatashkentbishkekalmaty is  
a transit pipeline that provides gas 
from uzbekistan to kazakhstan’s  
main southern population centre
transpor t ation
an important aspect of increasing 
hydrocarbon production in  
kazakhstan has been the  
development of transportation 
infrastructure as this in turn has  
raised kazakhstan’s export capacity
gas supply and d emand
increases in kazakhstan’s gas 
production are expected to come 
primarily from associated gas at the 
tengiz karachaganak and kashagan 
fields most of kazakhstan’s gas 
reserves are located in the west of  
the country near the caspian sea  
with more than half of those reserves 
located in the karachaganak field 
another important gas field amangeldy 
is situated in the south of the country 
and is being developed by kaztransgas 
a subsidiary of nc kmg
gas production has increased 
significantly since 2004 when the 
parliament passed a law prohibiting 
the industrial production of oil and  
gas deposits without the utilisation  
of natural and associated gas
according to the projections of the 
competent authority kazakhstan 
expects to increase its gas production 
to 794 billion cubic metres per year  
by 2015 t co j oint v ent ure
the tco joint venture was created  
in 1993 with the aim of developing  
the tengiz and korolev fields the 
participants in the joint venture  
are chevron overseas company 
exxonmobil corporation nc kmg 
and lukarco the tengiz field is 
located in the southeastern part  
of the precaspian basin on the 
northeastern edge of the caspian 
sea it was discovered in 1979
the tengiz and korolev fields have 
estimated recoverable reserves  
of between 750 million tonnes  
55 billion barrels and 1100 million 
tonnes 81 billion barrels of oil the 
future growth project is the next 
major oil production expansion in 
tengiz aiming to increase production 
to approximately 36 million tonnes 
720000 bopd from 137 million 
tonnes in 2004
maj or oil and gas proj ect s in kaz akhst an
karachaganak proj ect
the karachaganak field is a large  
gas condensate field located in 
northwestern kazakhstan with an 
area of about 280 square kilometres 
the field was discovered in 1979 and 
the consortium developing it is party 
to a 40year productionsharing 
agreement with the kazakh 
government the field is operated  
by kpo and the consortium includes 
affiliates of eni spa bg group 
chevron lukoil overseas and  
nc kmg bg group together with  
eni are joint operators and each holds 
a 2925 interest in the venture the 
karachaganak field is kazakhstan’s 
main gas field holding an estimated  
nine billion barrels of gas condensate  
and 48 trillion cubic feet of gas 
north caspian proj ect
the kashagan field is located off the 
northern shore of the caspian sea 
near the city of atyrau in 1997 a 
consortium of companies signed  
a 40year productionsharing 
agreement covering five structures 
namely kashagan kalamkas aktoty 
kairan and kashagan sw the 
structures consist of 11 offshore  
blocks over an area of 5600 square 
kilometres the project is owned  
by the north caspian operating 
company ‘ncoc’ a consortium  
that includes eni spa exxonmobil 
corporation shell total sa inpex 
corporation and nc kmg
st rengt hs and weaknesses of our b usiness  
against peers 
streng ths weaknesses
1  nostrum is subject to 
fluctuations in the market  
prices for its products
2  geological risks are unavoidable 
in the oil and gas business
3  t he harsh operating environment 
means temperatures fluctuate 
significantly between summer 
and winter
4  lack of significant population 
reduces size of skilled workforce
macroeconomic and 
microeconomic changes
export duties increased from  
us40 per tonne to us60 per  
tonne as of 1 april 2013
1  a d va n t ag eo u s l oc a tio n  
gives access to multiple 
transportation routes
2  investment in infrastructure 
gives the company  
complete control of its  
liquids transportation
3  investment in gas plant allows 
nostrum to produce raw gas  
in northwestern kazakhstan 
where there is a shortage of 
processing capacity
4  highquality light sweet crude 
and condensate
29
nostrum oil  gas annual report 2013 
strategic report building a  
worldclass 
portfolio of assets
strategic report
performance review
the 274squarekilometre chinarevskoye field  
is located in the batys province of northwestern 
kazakhstan approximately 100 kilometres 
northeast of uralsk and near the russian border
• 
 lpg
• 
 oil and condensate
• 
 dry gas
2p reserves breakdown 
for chinarevskoye field
annual boe production 
15
40
45
2013
2012
2011
2010
16854970
13483100
4802670
2799915
2009 2716300
30
nostrum oil  gas annual report 2013  strategic report
31
nostrum oil  gas annual report 2013  chinarevskoye field
strategic report
performance review
continued
geology reserv es  d rilling
geology
the chinarevskoye field is a multilayer 
structure with ten reservoirs and  
44 segments spread over three areas  
the western area contains 16 segments 
the northern area has 24 segments  
and the southern area four segments 
hydrocarbons have been found in the 
lower permian tournaisian givetian 
mulinski biskiafoninski ardatovski 
famennian and vorobyovski reservoirs
reserves
based on the 2013 ryder scott report as 
at 31 august 2013 the estimated gross 
proven plus probable hydrocarbon 
reserves at the chinarevskoye field  
were 4833 million boe of which  
1932 million bbl was crude oil and 
condensate 724 million bbl was lpg 
and 2168 million boe was sales gas 
according to the 2013 ryder scott 
report the chinarevskoye field also 
contains approximately 762 million boe 
of gross possible hydrocarbon reserves
d rilling
hydrocarbons were first discovered  
in the chinarevskoye reservoirs  
during the drilling of nine wells in  
the soviet era 20042013 saw more 
than 50 wells drilled under the psa
2013 saw us meet our drilling target  
of 1214 wells at chinarevskoye  
with a further 12 planned for 2014  
the 2014 drilling programme includes 
45 production wells to maintain 
existing production and 67 appraisal 
wells targeting moving probable 
reserves into the proven category  
and building feedstock for the next 
gtf one exploration well will be 
drilled in the exploration area
st able business env ironment
exploration and production licences
zhaikmunai llp was granted 
exploration and production licences 
for the chinarevskoye field in may 
1997 a production licence extension 
was received in december 2008 
which is valid until 2033 for all oil and 
gas bearing reservoirs and horizons 
covering 185 square kilometres  
of the licence area except the north
eastern tournaisian reservoir which 
is valid until 2031 the production 
licence covers all proven probable 
and possible reserves as reported 
by ryder scott as at 31 august 2013 
an exploration permit extension 
was granted in 2013 until 2015
productionsharing agreement 
psa
in october 1997  zhaikmunai llp 
entered into a psa with the government 
of kazakhstan the agreement sets  
the parameters for the exploration  
and development of the chinarevskoye 
field and the respective royalties  
profit share and tax liabilities payable  
to the government 
outlook
the licence and the psa are currently 
valid until 203133 depending on the 
geographical and geological area 
nostrum must comply with the terms of 
the exploration permit the production 
permit and the development plans 
during this period to date nostrum 
has met all of its capital investment 
obligations under the psa
geology
multilayered
structure
32
nostrum oil  gas annual report 2013  q uarterly production 2013
q1 46273m boepd 
q 2 46534m boepd 
q 3 43522m boepd 
q 4 48458m boepd
33
nostrum oil  gas annual report 2013 
strategic report onsit e facilit ies
location
all our facilities are close to the main 
international railway lines as well as 
several major oil and gas pipelines 
this advantageous location provides 
access to flexible transportation links 
for the offtakers of the products 
the facilities onsite have grown 
substantially with two major capital 
investment phases of approximately 
us12 billion each one completed  
in 2011 and one currently underway
crude oil facilities
our oil infrastructure consists of  
an oil treatment and gathering  
facility otf capable of processing 
400000 tonnes of crude oil per year 
as well as a 120kilometre oil pipeline 
multiple oil gathering and transportation 
lines within the licence area an 
oilloading facility at the rail terminal 
facilities with 30000 cubic metres of 
oil storage space and railway cars for 
the associated crude oil and stabilised 
liquid condensate
oil and stabilised condensate 
pipeline and railway loading terminal
our 120kilometre oil pipeline  
and railway loading terminal were 
successfully completed in 2008 since 
2009 the crude oil has been transported 
via the pipeline from the chinarevskoye 
field site to the railwayloading terminal  
at a rail connection at rostoshi  
near uralsk here it is stored and 
subsequently transported by railcar  
to final offtakers 
stabilised liquid condensate is also 
transported in the same pipeline 
using a “pig” system which separates 
the crude oil from the stabilised liquid 
condensate protecting the product’s 
quality which would otherwise be 
reduced in a multipurpose pipeline 
this ensures the products command 
higher export prices
the oil pipeline has a maximum 
throughput of three million tonnes  
per year the railloading terminal 
which receives the crude oil and 
stabilised liquid condensate has a 
capacity of 34 million tonnes per year 
infrastructure also includes crude oil 
storage tanks on site and at the rail 
terminal condensate tanks on site and 
at the terminal and a loading facility  
at the railway terminal the loading 
terminal allows for 32 railcars to be 
loaded simultaneously the facility is 
also equipped with a vapour recovery 
unit the first in kazakhstan’s history 
the entire infrastructure has the 
capacity to handle the planned 
increase in throughput in line with  
our strategy to more than double 
production by the end of 2016 
strategic report
performance review
continued
chinarevskoye field
34
nostrum oil  gas annual report 2013  over  
us12 billion 
investment 
phase over 
next 35 years
35
nostrum oil  gas annual report 2013 
strategic report assessing the potential  
of our new fields
part of our strategy includes valueaccretive mergers  
and acquisitions to complement the organic growth  
of the chinarevskoye field 2013 saw the acquisition  
of three fields – rostoshinskoye darzhinskoye and 
yuzhnogremyachenskoye – all of which are located  
in the vicinity of the chinarevskoye field
rost onshinskoye darz hinskoye  
 gremyachenskoye fields
strategic report
performance review
60 120km
distance from chinarevskoye  
to add to reserves
approximate square  
kilometres in size
 13 9
98
mboe
2p reserves of
85m
appraisal 
programme 
planned
3
additional 
licences
36
nostrum oil  gas annual report 2013  strategic report
37
nostrum oil  gas annual report 2013  rostoshinskoye  
darzhinskoye and 
y uzhnogremyachenskoye fields
strategic report
performance review
continued
38
nostrum oil  gas annual report 2013  rost oshinskoye darz hinskoye and yu z hnogremyachenskoye fields
subsoil rights  
acquisition completed
in 2013 nostrum signed an asset 
purchase agreement to acquire  
100 of the subsoil use rights  
related to three oil and gas fields  
in the precaspian basin to the 
northwest of uralsk the signing  
of the supplementary agreements  
by the ministry of oil  gas became 
effective from 1 march 2013 officially 
transferring subsoil use rights for the 
three fields to nostrum
geology
exploration activities during the  
last decades have successfully  
proven that the three fields contain 
hydrocarbons which are suitable for 
commercial production in several 
reservoirs of permocarboniferous 
age more specifically the bulk of  
the hydrocarbons are located in the  
visean and bashkirian stages of the 
carboniferous significant appraisal  
of the existing accumulations and 
exploration of deeper intervals is  
still required prior to development
for more detail on the geology of  
the fields please refer to our website
appraisal programme
the cost of appraisal activities in the 
three fields over the next 23 years  
is expected to be approximately  
us85 million these activities will 
include the acquisition of new 3d 
seismic data as well as appraisal 
drilling in order to validate and  
expand the existing reserves reports 
the results of which will determine  
the development programme and 
ensure the highest possible accuracy  
in hydrocarbon targeting
dedicated appraisal drilling during  
the period will provide greater  
detail on reservoir size and fluid 
composition which cannot be 
resolved with the existing data
the targets are the permocarboniferous 
carbonate reservoirs which are similar to 
those in the chinarevskoye field these 
were deposited under subtropical 
conditions in a bay formation
t otal combined reserves
nostrum has an outstanding track 
record of converting reserves an 
updated reserve report of 31 august 
2013 carried out by external auditor 
ryder scott has shown significant 
increases in estimations for proven  
and probable reserves compared  
with the december 2012 report and 
for the first time takes into account  
the three adjacent fields
1p reserves were more than 100 
replaced growing to 199 mboe  
2p reserves increased by 75 mboe  
to 582 mboe
this shows that in line with our strategy 
nostrum is continuing to grow its 
reserve base and is successfully 
moving towards its goal of 100000 
boepd production by the end of 2016
please see our website for more detail  
on the ryder scott reports
development 
programme  
submitted  
by 2018
39
nostrum oil  gas annual report 2013 
strategic report  
 
the ﬁeld site
traders
nostrum’s 
gas pipeline
17km 
intergas central 
asia pipeline
truck 
transport
nostrum’s oil 
pipeline 120km
same pipeline  
pig system
connection  
point
railway  
terminal
reﬁneries
power 
generation
dry gas
lpg
stabilised 
condensate
crude oil 
wells
oil treatment
facillity otf
gas treatment
facillity gtf
crude oil
gas condensate 
wells
 
strategic report
performance review
 associated gas
how we’ve made 
our operations 
sustainable
nostrum’s gtf also  
includes a power  
generation plant  
enabling us to supply  
the field site with the 
electricity it requires 
processes  
and products
40
nostrum oil  gas annual report 2013   
 
the ﬁeld site
traders
nostrum’s 
gas pipeline
17km 
intergas central 
asia pipeline
truck 
transport
nostrum’s oil 
pipeline 120km
same pipeline  
pig system
connection  
point
railway  
terminal
reﬁneries
power 
generation
dry gas
lpg
stabilised 
condensate
crude oil 
wells
oil treatment
facillity otf
gas treatment
facillity gtf
crude oil
gas condensate 
wells
 
leveraging  
our competitive 
advantage  
through our 
products  
and processes
strategic report
41
nostrum oil  gas annual report 2013  highq uality pro d uct s
crude oil
the crude oil extracted from the 
chinarevskoye field has an average  
api gravity of 4243 degrees and 
sulphur content of approximately 
04 this is superior in quality to  
other primary benchmark crude  
oils produced in kazakhstan
stabilised liquid condensate
the condensate extracted from the 
chinarevskoye field has an average  
api gravity of 56 degrees and sulphur 
content below 02 – also of superior 
quality for the region
lpg
the lpg produced by nostrum is  
of field grade quality does not  
contain any olefins and has a low 
sulphur content
sales and pricing policy
the production marketing and 
transportation of our liquid products  
are closely monitored and controlled  
by nostrum and make up the largest 
share of our revenues the commercial 
production of dry gas adds significant 
benefits through the easy offtake of 
dry gas volumes using straightforward 
pipeline logistics the generation of 
our own power supply and the partially 
sponsored supply of dry gas to 
neighbouring communities
liquids
crude oil – shipped through our  
own 120kilometre pipeline from the 
chinarevskoye field to our own rail 
terminal in uralsk from where it is 
shipped in railcars to offtakers at 
various destinations the benchmark 
price for our crude oil is brent in 
accordance with the psa we export 
85 of our crude oil production
stabilised liquid condensate 
– shipped through the same 120km 
pipeline to the rail terminal in uralsk 
from where it is shipped in railcars  
to offtakers at various destinations 
the benchmark price for our stabilised 
liquid condensate is also brent and 
100 of production is exported
lpg – shipped in special lpg trucks 
from the chinarevskoye field to rail 
terminals in uralsk from here it is 
shipped in railcars to end consumers 
and traders the benchmark price  
for our lpg is the international 
mediterranean lpg price sonatrach 
for black sea deliveries or the brest 
quotation for eastern european 
deliveries more than 90 of our  
lpg is exported
liquids are transported and sold to 
countries such as finland the ukraine 
and turkey or sold on an fob black 
sea basis
d ry gas – shipped through our  
own 17kilometre pipeline from the 
chinarevskoye field to the connection 
point with the intergas central asia 
gas pipeline orenburgnovopskov 
from where it is distributed by the  
offtaker prices for gas products  
are negotiated annually with the 
offtakers in a longterm framework 
agreement all the gas is sold 
domestically at this connection point
we are able to achieve a relatively high 
netback for our export production due 
to transportation of our products 
through our own infrastructure and  
the resulting quality guarantees
strategic report
performance review
continued
processes and products
sales
•  crude oil production 
85 exported
•  condensate 100 
exported
• lpg over 90 exported
• dry gas 100 domestic
42
nostrum oil  gas annual report 2013  de v elopment of infrast ruct ure
gas treatment facility gt f and 
related infrastructure
the gtf was designed to treat raw  
gas from gas condensate reservoirs  
as well as the associated gas coming 
from the otf into a mix of stabilised 
liquid condensate lpg and dry gas 
using a gas utilisation concept to add 
to the crude oil production the gtf 
associated infrastructure includes a 
power generation station an lpg 
storage tank farm an lpg loading 
facility at the rail terminal lpg railcars 
and a 17kilometre dry gas pipeline
gt f 1 t rains 12gtu 12
gtf 1 included the construction  
of two gas treatment units gtus 
each has the capacity to treat 
approximately 850 million cubic 
metres of raw gas both units are 
equipped with sweetening and 
dehydration units and a sulphur 
recovery unit 
gtf 1 is now producing at capacity 
with an average annual production  
of 46178 boepd in 2013 
gt f 2 t rain 3gtu 3
gtf 2 will add 25 billion cubic metres 
bringing the total gtu capacity to  
42 billion cubic metres more than 
doubling production by the end of 2016 
until this time average production is 
expected to remain constant
power generation plant
the gtf also includes a gasfired 
power generation plant with an output 
of 15 megawatts this provides the 
field site with its required electricity
gas pipeline
nostrum completed its own 
17kilometre gas pipeline in 2011 
linking to the orenburgnovopskov 
gas pipeline the maximum annual 
throughput of this gas pipeline is 
several billion cubic metres 
new field camp facilities
a new employee field camp was 
completed in 2012 with more than 
460 beds and modern facilities the 
dormitories canteen recreational 
areas and a health clinic provide 
comfortable indoor living conditions 
throughout the year 
marketing
our sales and marketing department 
employs experienced traders the 
team is constantly working towards 
negotiating new offtake contracts  
and identifying efficient transportation 
options for these new products
production

2013
2012
2013
2012
2013
2012
42
43
8
9
48
49
crude and
condensate 
lpg
dry gas
production
boepd
2013
2012
2013
2012
19384
15764
4259
2940
22535
18237
crude and
condensate 
lpg
dry gas
2013
2012
the increase in production from 2012 
to 2013 was a result of linking up the 
new well to gtf 1
43
nostrum oil  gas annual report 2013 
strategic report a responsible business
strategic report
corporate social responsibility
“ our focus extends beyond the obvious  
financial and operational parameters to  
include health safety and the quality of life  
of our workforce and their families as well  
as the responsible management of the 
environment in which we operate“  
 
kaiuwe kessel ceo 
44
nostrum oil  gas annual report 2013  our approach to corporate social responsibility csr
we encourage making a positive impact through our 
activities on our numerous stakeholders ie investors 
business partners regulators employees customers  
local communities and ultimately the environment and 
society at large this naturally means that public interest  
is at the core of our business decisionmaking as is 
honouring a triple bottom line 
our continued development as a successful and sustainable 
ep partnership in the region has created economic growth 
increasing our presence and influence on the local and 
regional community as well as increasing our environmental 
footprint this is clearly recognised by the members of the 
board of directors and the management team who have 
developed a thorough understanding of a strong 
commitment to and a deep connection with kazakhstan
first prize in kazakhstan’s environmental protection 
contest – highlighting nostrum’s strong environmental 
protection record ambitious social development 
programme and dedication to communitybuilding
arnat abzhanov member of the management board  
jsc halyk finance commented “companies who are listed 
on more than one stock exchange are faced with different 
and sometimes conflicting reporting requirements the 
kase award demonstrates that zhaikmunai llp manages 
these challenges efficiently every day and is fully committed 
to all of its security holders”
special award by the 
kazakhstan stock exchange 
kase for zhaikmunai llp’s 
highlighting transparency 
record and commitment to  
all its stakeholders 
total workforce growth
 93
key facts and figures
percentage local nationals in total workforce
985
staff turnover rate
72
total number of training days
829
greenhouse gas reporting
first disclosure
liquidation fund contributions
us492000
sustained community support and charitable work projects 
us466400
social infrastructure investment
us650000
45
nostrum oil  gas annual report 2013 
strategic report our approach
quality health safety and environment qhse at nostrum 
focuses on improving the management of health safety 
and the environment controlling risks and preventing  
any injury or ill health to employees and contractors by 
providing a set of rules and guidelines based on a series  
of welldefined strategic objectives 
centralised function
the qhse role was thoroughly revisited and restructured  
in 2012 this effort led to the creation of a centralised 
function with a flexible organisational structure a new 
position of head of qhse was created and filled in 2013
please see our website for further details
qhse priorities for 2014 
in line with qhse developments in 2013 the focus for 2014 
will be to expand the qhse policy to include initiatives  
that go beyond our daytoday activities in particular the 
following five elements have been identified as specific 
areas of focus where dedicated objectives and actions  
will be developed 
•	 hse leadership and supervision
•	 contractor hse management
•	 hazard awareness and risk control
•	 driving and transportation safety and
•	 environmental reporting
health and safety
in 2014 further rules and guidelines will be developed 
according to our qhse strategic objectives resulting in 
specific indicators which will be monitored over time  
these aim to improve the management of health safety 
and the environment as well as controlling risk and 
preventing injury or ill health to employees and contractors
key safety and labour safety indicators
new indicators will be added to the current number of 
manhours without loss of working time 2013 183 million 
such as the total recordable incident frequency trif lost 
time injury and lost time injury frequency ltifr
other kpis
other kpis will include employment and training indicators 
and community involvement indicators 
strategic report
corporate social responsibility
continued
qhse
46
nostrum oil  gas annual report 2013  qhse objectives processes and results
qhse objectives processes results
integrate qhse 
imperatives within the 
framework of all critical 
business activities
identification of qhse business processes 
within the company mapping of these 
processes identification of standards  
and procedures implementation of  
them across the whole company and 
contracting organisations
full qhse policy in its final developmental 
stage qhse general and supporting 
processes will be mapped accordingly 
next step will be the mapping of qhse 
processes as a supporting function within 
the company activities
set kpis to measure and 
report performance based 
on objectives and targets
development and rollout of a 2014 hse 
performance monitoring system based 
on kpis with monthly reporting
hse performance monitoring on a 
monthly basis internal communication  
of monthly hse statistics company and 
contractors analysis of hse statistics  
and hse performance and benchmarking 
for identification of weak areas areas for 
improvement or for further planning and 
setting of hse targets
review compliance 
identify improvement 
areas and develop specific 
action plans accordingly
development of an internal audits and 
inspections manual to outline the aims 
and objectives of this process internally 
implementation of internal audits and 
inspections engagement of management 
in the process
internal hse leadership inspections 
schedule under development these  
aim to involve company management  
in inspections of internal facilities 
together with hse personnel to ensure 
compliance with hse standards and to 
demonstrate management’s visibility  
and commitment to hse 
implement best practice  
with a view to promoting  
a forwardlooking qhse 
policy and hse culture
improvement of hse communication 
processes through the rollout of  
regular induction programmes internal 
hse meetings joint hse meetings  
with contracting organisations and 
development of visual support materials
regular presentations scheduled with 
contractor personnel working on the 
facilities induction programmes  
around facilities are under review the 
programmes will be delivered to all 
company and contractor personnel 
based in the field
ensure involvement  
from all stakeholders  
for a concerted effort
identification of issues and areas where 
the involvement of stakeholders and that 
of other interested parties is required
action scheduled in the general  
qhse plan
promote an enterprise 
culture based on the  
full endorsement and 
communication of these 
commitments by all
development of promotional 
programmes incentive schemes  
and reporting systems
action scheduled in the general  
qhse plan
develop and implement an 
hse management process 
for contractors and ensure 
the selection of quality 
and compliancedriven 
contractors
definition of hse requirements related  
to contractors’ scope of work completed 
with a preliminary split by high and low 
hse risk requirements
the hse requirements for the  
high and low hse risk schedules  
have been developed and will  
be reviewed and discussed prior  
to further pilot implementation 
assist in the development 
and diffusion of relevant 
appropriate local qhse 
programmes
development of promotional 
programmes incentive schemes  
and reporting systems
action scheduled in the general  
qhse plan
further promote the 
necessary actions from 
management in line with 
the qhse vision and  
policy work
development of promotional 
programmes incentive schemes  
and reporting systems
action scheduled in the general  
qhse plan
47
nostrum oil  gas annual report 2013 
strategic report a safe working environment
health and safety at kazakh oil and gas companies is 
subject to state legislation and regulation our psa also 
requires that our operations meet applicable health and 
safety requirements see our website for more details
nostrum‘s hse code of conduct
all of us must comply with all applicable laws and 
regulations as well as best practice with regard to health 
safety and environmental issues nostrum is responsible  
for preventing harm to the health and safety of its people 
including our employees and members of the community 
as well as our environment nostrum also seeks to minimise 
and mitigate the environmental impact of its operations
examples of steps to ensure the wellbeing of employees 
and their families
•	 frequent fire drills
•	 safety training
•	 implementing a proactive prevention culture
•	 written plans and policies with regard to the mandatory 
supply of personal protective equipment including 
protective clothes adapted footwear and special tools
number of manhours without loss of working hours
in millions
2013
2012
2011
2010
2009
2008
183
123
166
115
147
095
  number of manhours without loss of working hours total number of 
manhours worked by the company and contractors’ personnel without 
any injuries resulting in a lost working day while performing activities on 
company premises or on noncompany premises subject to company 
management controls applied through contractual terms if they are 
executed on behalf of the company
a diverse management team
between nostrum and zhaikmunai llp  our management 
team has 15 members and covers the following diversity 
see the corporate governance section for more details
age diversity

6065
5059
4049
7
33
40
3039 20
nationality diversity
 
belgian
20
german
40
dutch
7
british
7
kazakh
26
 
gender diversity
women
7
men
93
a large team of dedicated employees
2007 2008 2009 2010 2011 2012 2013
chinarevskoye 
field 329 396 439 500 552 631 633
uralsk 130 142 117 144 170 207 274
other 14 17 22 33 36 46 56
total 473 555 578 677 758 884 963
our people
strategic report
corporate social responsibility
continued
48
nostrum oil  gas annual report 2013  a significant presence in kazakhstan
one of our greatest contributions to kazakhstan’s society  
is the wealth generated by hundreds of employees working 
in our fields and in uralsk the number of employees has 
more than doubled since 2005 making us one of the 
largest employers in the batys province 
number of employees fulltime equivalent in kazakhstan 
during the periods indicated below
location 2007 2008 2009 2010 2011 2012 2013
chinarevskoye 
field 329 396 439 500 552 631 633
uralsk 130 142 177 144 170 207 274
total 459 538 616 644 722 838 907
nostrum oil  gas
age diversity

25
2529
3049
50
6
18
53
23
nationality diversity
local nationals   
kazakhstan
985
international
15
in 2013 the total workforce grew by 93 and the staff 
turnover rate was 72
gender diversity
men
84
women
16
labour relations
we consider our relations with our employees to be good 
and has not experienced any work stoppages strikes or 
similar actions to date relations with our employees are  
a key priority for our business
salary package and growth rates
nostrum offers competitive remuneration packages to  
its employees and is in full compliance with all regulatory 
bodies guidelines and requirements
description 2009 2010 2011 2012 2013
average number of people 
fte employed by the  
group in kazakhstan 574 619 722 838 907
change in average monthly 
salary of employees 9 16 28 6
effective social guarantees 
•	 so ci al 	 s e cur i t y
 —  contribution of 22 of employees’ gross income  
21 social taxes and 1 social security to the 
government of the republic of kazakhstan 
 — sick pay and medical leave after five years of service
•	 p ension 	 f und
 –  up to 10 of employees’ salaries as contribution  
to their designated pension funds 
•	 m e dic al 	 as sis t ance 	 and 	 c are
 — medical care in line with the partnership’s health insurance
 —  expenses from medical centres and refunds for 
expenses not directly covered by our health insurance 
scheme are often covered by the enterprise 
 — own firstaid post 
•	 insur ance 	 plans
 — compliant with all mandatory insurance requirements 
under kazakh law as well as those existing under  
a number of voluntary contracts
 — directors’ and officers’ liability insurance through  
a thirdparty insurer 
please see the website for more detail on insurance
49
nostrum oil  gas annual report 2013 
strategic report our people
t raining
the psa and the ensuing supplementary agreement  
no 9 with the government of kazakhstan specify the 
following in terms of training
•	 a commitment to make an accrual of 1 per annum  
of the financial obligations with regard to the 
chinarevskoye field and 
•	 adherence to a spending schedule on education 
up to and including 2020 for purposes of educating 
kazakh citizens
human rights
the partnership group code of conduct sets out certain 
principles that guide business conduct and provides a 
nonexhaustive outline of what the group considers 
permissible conduct by its employees including secondees 
and independent contractors who devote a substantial 
amount of their working time to nostrum businesses as used 
in the code collectively “employees” violations of this 
code of conduct may result in disciplinary action including 
dismissal from employment or criminal prosecution
the code of conduct contains among others equal 
opportunity and personal conduct provisions as  
detailed below
equal opportunity
each nostrum employee is expected to comply with all 
applicable laws that prohibit discrimination in employment 
practices no nostrum employee should ever be subjected 
to illegal discrimination on the basis of race religion 
national origin age gender disability sexual orientation  
or political opinion
personal conduct
nostrum employees are expected to conduct business and 
interact in a respectful manner with their colleagues business 
contacts and others this includes being sensitive to and 
respecting foreign cultures and customs nostrum does  
not tolerate any form of actual or threatened harassment 
discrimination or other behaviour that colleagues or 
business contacts might reasonably regard as threatening  
or degrading
number of employees 
benefiting from education 
and training programmes  
at nostrum
281
total training days
829
number of additional 
kazakh citizens benefiting 
from education and training 
programmes at nostrum
50
categories of personnel trained
strategic report
corporate social responsibility
continued
83
186
12 • 
administrative
•
  o p er a t i o n s
• 
marketing sate
50
nostrum oil  gas annual report 2013  our community
an integrated space
the rapidly expanding activities surrounding nostrum  
have attracted a wide variety of competencies and skills 
this success is largely due to a flexible and wellintegrated 
team of professionals nostrum’s community policy places 
great emphasis on creating an integrated caring and 
secure community for its personnel and subcontractors
social infrastructure
under the terms of the psa linked to the chinarevskoye 
field as well as the new subsoil agreements linked to the 
additional fields we spend us300000 and us350000 
per annum respectively to finance social infrastructure 
significant investments in the repair and maintenance  
of roads inside and outside the licence areas were also 
implemented in the course of last year at an additional  
cost of us2196238
sponsoring activities charitable work and 
participation in social projects
us’000s
 
please see the website for more detail
nostrum oil  gas is pleased to take part in sponsoring 
activities charitable work and social projects in an effort to
•	 develop a common social responsibility framework for 
the company focusing on its interaction with society  
at large ex sponsoring of two new school buses
•	 strengthen the positive image of the company and 
further support its good reputation
•	 promote a healthy and active lifestyle through the 
development of sports activities in the region such  
as the installation of the local football field
•	 support active participation in the social and political  
life of the city and of the region
•	 nurture useful local and regional business  
cooperation opportunities
new camp
construction and commissioning of a new field camp for 
more than 700 people was completed in 2013 resulting  
in a significant improvement in living conditions at the field 
site for our employees
liquidation fund
under the terms of the psa nostrum is building up a 
liquidation fund of us12 million by making contributions 
to the fund of us100000 per year during the exploration 
phase and us452000 per year during the production 
phase the liquidation fund will provide funds for the 
removal of nostrum property and equipment at the end  
of the psa in 2013 the required us452000 contribution  
was set aside for this purpose
285
36
159
125
117
• 
regional volleyball team
• 
 munaisky social fund
•
  sporting activities
• 
sports federation dance
•
  other charitable causes  
and projects
51
nostrum oil  gas annual report 2013 
strategic report our environment
environmental protection approach
our environmental protection approach follows a structured 
commitment to a series of yearly environmental objectives 
selected as key priorities in line with strategic regulatory 
and communication imperatives and is prepared in 
accordance with kazakh regulations
•	 air pollution control
•	 water resources protection and rational use
•	 land protection
•	 control and sustainable subsurface use
•	 flora and fauna protection
•	 radiological biological and chemical safety
•	 ecological education and information
•	 research and development exploratory development 
and other works
in 2013 specific monitoring activities were carried out in 
these areas in order to establish benchmarks which will  
be integrated into our environmental targets
t echnologies used to monitor the environment
nostrum has developed a site environmental monitoring 
programme to organise and monitor our environmental 
activities identify any potential operational impact  
on the environment and enabling us to take prompt 
corrective measures should there be any violation of 
environmental legislation 
the site environmental monitoring programme aims at
•	 obtaining relevant information for environmental policy 
decisionmaking including environment quality target 
values and information on regulatory instruments 
applicable to production processes which may have  
an environmental impact 
•	 ensuring full compliance with the environmental 
legislation of the republic of kazakhstan
•	 reducing the impact of production processes  
on the environment and on human health
•	 increasing the efficiency of natural and energy  
resource use
•	 developing a preemptive operational emergency response
•	 increasing environmental awareness and responsibility  
among managers and employees
•	 reporting on environmental activities and community 
health risks
•	 increasing compliance with environmental requirements
•	 increasing the efficiency of the qhse management 
system and
•	 taking account of environmental risks in investment and 
finance decisions
qhse system maintenance
nostrum’s qhse department manages the site 
environmental monitoring programme which includes  
the following
•	 compulsory criteria to be followed in site monitoring
•	 time duration and frequency of site monitoring activities 
and measurements
•	 detailed site monitoring methodologies
•	 sampling points and places of measurement
•	 methods and frequency of data accounting analysis  
and reporting
•	 schedule of internal checks and procedures for 
remedying violations of national environmental laws 
including the internal response to any violations
•	 monitoring quality assurance procedures
•	 emergency action plans
•	 organisational and functional structure of internal 
employee responsibilities for carrying out site 
environmental monitoring and
•	 other data on organising and carrying out site 
environmental monitoring
compliance with legislation
the site environmental monitoring annual report 2013  
is a comprehensive document detailing the content 
methodology and results of the environmental efforts at 
nostrum in 2013 the conclusions section noted the following
“it can be concluded from the report presented that in 
2013 as in previous years the enterprise did not exceed  
the established standards for environmental pollution in 
the region in which its production facilities are located”
please see the website for more details
strategic report
corporate social responsibility
continued
52
nostrum oil  gas annual report 2013  nostrum’s environmental management system
our environmental management system is currently  
being developed in line with our environmental  
monitoring programme the monitoring activity is  
leading to the development of valuable data which  
can be used for benchmark development these will  
be linked with the priority policy areas in 2014
independent third parties carry out audits on a regular 
basis on behalf of the company in order to assist us in 
developing our environmental management system  
these include environmental health and safety 
compliance and assurance audits
industrial waste management and contaminated  
soil reclamation
nostrum substantially complies with all current kazakh 
legislation with regard to industrial waste management  
and contaminated soil reclamation
greenhouse gas ghg reporting
nostrum has been monitoring and reporting its greenhouse 
gas emissions over the last few years in accordance with 
kazakh regulatory requirements starting in 2013 the 
company with the assistance of amec earth  environment 
uk ltd has also developed its ghg reporting in line with 
new regulations which amend existing company law 
requirements in the uk the data is reported on all emission 
sources required under the companies act 2006 strategic 
report and directors’ reports regulations 2013 these 
sources fall within the company’s consolidated financial 
statements no responsibility is taken for any emission 
sources that are not included in the consolidated financial 
statements the results of the ghg emissions inventory are 
presented in the format recommended by the ghg protocol
d irect ghg emissions scope 1
the following direct ghg emissions scope 1 sources  
have been identified flares heaters incinerators boilers 
gas turbine plants electric power stations compressors 
and fugitive emissions table 1 presents scope 1 emissions 
for 2013 and the previous three years all six ghgs are 
presented separately and expressed in metric tonnes of 
co
2
 equivalent mtco
2
e 2010 was chosen as the base  
year as per the national plan for ghg quota distribution 
for 2013 pursuant to the republic of kazakhstan government 
resolution 1588 dated 13 december 2012
historically the major part of stationary combustion 
emissions was attributed to flaring of associated gas  
at the oil treatment unit otu and the gas treatment  
facility gtf the situation changed considerably after  
the gtf was completed
t able 1 scope 1 ghg emissions subdivided by gas types
ghg emissions 
mtco
2
e 2010 2011 2012 2013
carbon dioxide 
co
2
 2402594 4209928 2560504 1823250
methane ch
4
 814 154197 8052 287080
nitrous oxide n
2
o 13084 11884 2831 2093
hydrofluorocarbons 
hfcs 30 30 161 161
perfluorocarbons 
pfcs – – – –
sulphur 
hexafluoride sf
6
 – – – –
total 2416522 4376039 2571548 2112584
table 2 presents scope 1 emissions subdivided by  
source types
t able 2 scope 1 ghg emissions subdivided by  
source types
ghg emissions 
mtco
2
e 2010 2011 2012 2013
stationary 
combustion 2403833 4331325 2521389 2074008
mobile combustion 11943 20867 23121 28762
process sources – – – –
fugitive sources 746 23847 27038 9814
agricultural sources – – – –
t otal scope 1 2416522 4376039 2571548 2112584
how we’ve made 
our operations 
successful
in 2013 total ghg  
emissions in mt co
2
e  
have reduced by 213
53
nostrum oil  gas annual report 2013 
strategic report our environment
indirect ghg emissions scope 2
nostrum does not use purchased steam heating or 
cooling the only purchased power related to indirect  
ghg emissions is electrical power which is supplied to 
nostrum facilities via the zelenovskaya distribution  
network zapkazrek jsc through its subsidiary batys 
energoresursy llc the regional emission factor  
027086 tco
2
mwh was calculated using methodical 
guidelines for the calculation of ghg emissions from 
electrical power stations and boiler houses astana 2010 
and regional net thermal efficiency of urals natural gas 
fired power plants 733
total direct and indirect ghg emissions scope 1 and 
scope 2 and total ghg emissions are summarised in  
table 3
t able 3 scope 1 scope 2 and total ghg emissions
ghg emissions 
mtco
2
e 2010 2011 2012 2013
direct  
scope 1 2416522 4376039 2571548 2112584
indirect energy  
scope 2 34640 37665 40945 40539
total emissions 
mtco
2
e 2451162 4413704 2612493 2153123
ghg mtco
2
e
2010 2011 2012 2013
0
100000
200000
300000
400000
500000
600000
700000
total ghg emissions mtco
2
e
emissions intensity ratio
tonnes of co
2
e per tonne of output is a recommended 
intensity ratio for the oil and gas sector as per appendix f  
of the defra environmental reporting guidelines 2013 
taking into account the variety of nostrum oil  gas’s 
products – crude oil stabilised condensate lpg and dry  
gas – the chosen intensity ratio is expressed in metric 
tonnes of co
2
e mtco
2
e per tonne of oil equivalent toe  
or millions of barrels of oil equivalent mmboe table 4 
shows intensity ratios for total scope 1  scope 2 emissions 
in the period 2010 to 2013
t able 4 emissions intensity ratios for total ghg emissions
production 
– intensity ratio 2010 2011 2012 2013
production toe 392000 672000 1890000 2307748
mtco
2
toe 062 065 013 009
production 
mmboe 28 48 135 1648
mtco
2
mmboe 8754150 9195217 1935180 1306507
emission intensity ratios mtco
2
toe
mtco
2
etoe
2010 2011 2012 2013
00
01
02
03
04
05
06
07
ghg emissions were considerably reduced after the  
gtf came into operation in 2012 further reductions in 
2013 were related to decreased volumes of fuel gas 
consumed despite putting into operation additional 
energy facilities a justification of the ghg emission  
factor for gas combustion was introduced in 2013  
using jsc zhasyl damu spreadsheet software
strategic report
corporate social responsibility
continued
54
nostrum oil  gas annual report 2013  developing a ghg reduction capacity
according to its ghg emissions reduction strategy 
nostrum will determine its potential for ghg emissions 
reduction with the subsequent introduction of energy  
and resourcesaving measures to establish this reduction 
potential we will
•	 create a conceptual framework for our greenhouse gas 
emissions enterprise management system ghg ems
•	 create a consistent information system for ghg  
emissions monitoring
•	 perform an energy audit at the company’s  
production facilities
•	 develop an action plan to improve energy efficiency  
at industrial sites
•	 develop the concept of transition to lowcarbon 
development
•	 consider the participation of the company in  
carbon finance activities and
•	 demonstrate the efficiency of the company’s  
ghg emissions reduction measures
to meet these ambitious targets nostrum plans to 
strengthen its qhse department conduct training  
for managers and identify contractors able to provide 
effective assistance in improving energy efficiency and 
reducing ghg emissions 
external audits
amec earth  environment uk ltd carried out its first 
environmental study for nostrum in 2007 from 2012 this 
has become an annual exercise and the now yearly audit 
also includes an extensive health and safety assessment 
over and above the standard environmental assessment
amec report 2013
the amec report 2013 can be summarised as follows
•	 llc nostrum demonstrated a significant number of 
positive developments in environmental and industrial 
safety and integrity of approach to the development  
and improvement of its relevant management system
•	 the audit of the company’s production entities did not 
reveal significant noncompliance with state laws and 
regulations and international standards
•	 amec notes that production activities of the company 
comply with high standards of industrial and 
environmental safety and
•	 the company generally complies with the requirements 
established by state laws and regulations and international 
standards related to onshore oil and gas development
how  
we’ve been 
sustainable
in accordance with our psa 
we contributed us452000 
in 2013 to a liquidation fund 
which will ensure the safe 
removal of property and 
equipment at the end of  
the licence period
55
nostrum oil  gas annual report 2013 
strategic report strategic report
financial review
financial review  
by the chief 
financial officer  
janru muller
net cash from operating activities
us million
2013 3586
2012 2918
2011 1322
net cash from operating activities is the total of all cash 
receipts and payments associated with nostrum oil  gas’s 
sales this indicator reflects the group’s ability to generate 
cash for investment and distribution
net income
us million
2013 2195
2012 1620
2011 816
income for the period is the total of all nostrum oil  gas’s 
earnings and is of fundamental importance for a sustainable 
commercial enterprise
net cash used in investing activities
us million
2013 2390
2012 2697
2011 1037
net cash used in investing activities is capital investment 
capital expenditure exploration expense new equity  
and loans in equityaccounted investments and leases  
and other adjustments less divestment proceeds
production
mboe
2013 169
2012 135
2011 48
production is the sum of all average daily volumes of 
unrefined oil products crude oil and stabilised condensate 
and gas products lpg and dry gas produced for sale 
changes in production have a significant impact on the 
group’s cash flow
key performance indicat ors
56
nostrum oil  gas annual report 2013  proven oil and gas reserves
mboe
2013 1992
2012 1948
2011 1691
proven oil and gas reserves are the total estimated quantities 
of oil and gas as at august 31 that can with reasonable 
certainty be recovered in future years from known reservoirs 
under existing economic and operating conditions gas 
volumes are converted into barrels of oil equivalent boe 
reserves are crucial to an oil and gas company since they 
constitute the source of future production
cash distributions
us per common unit
2013 034
2012 032
2011 –
in september 2012 the board of directors approved the 
implementation of an ongoing distribution policy with the 
intention of making an annual distribution of not less than 
20 of the partnership’s consolidated net profit this policy 
reflects nostrum oil  gas’s desire to recognise the growth 
and cash generation inherent in the business in the future 
the policy will be progressively reviewed by the board of 
directors in line with the achievement of nostrum oil  gas’s 
strategic milestones
rev enue expenses and result s
results for the year
the group realised a net income of us2195 million in  
2013 an increase of us575 million on the net income  
of us1620 million in 2012 this higher profitability was  
driven by increased revenue from increased production  
of hydrocarbons
revenue increased by us1579 million or 214 to 
us8950 million in the year ended 31 december 2013  
up from us7371 million in the year ended 31 december 
2012 primarily due to the increase in output from the gtf
cost of sales increased by us480 million or 202 to 
us2862 million in the year ended 31 december 2013  
up from us2382 million in the year ended 31 december 
2012 primarily due to an increase in depreciation depletion 
and amortisation royalties government profit share 
materials and supply expenses and changes in stock 
partially offset by a decrease in payroll and related taxes 
well workover costs and repair and maintenance expenses 
the increase of 20 in the cost of sales is in line with the 
increase in revenue in 2013 of 21 compared to 2012 on  
a boe basis cost of sales decreased marginally by us05 
or 286 to us1698 in the year ended 31 december 2013 
down from us1748 and cost of sales net of depreciation 
per boe decreased by us012 or 120 to us992 in the 
year ended 31 december 2013 down from us1004 in the 
year ended 31 december 2012
depreciation depletion and amortisation increased by 
174 or us176 million in the year ended 31 december 
2013 to us1190 million up from us1014 million in the 
year ended 31 december 2012 the increase is due to an 
increase in production without a similar increase in proven 
developed reserves during the period
royalty costs are calculated on the basis of production 
and market prices for the different products royalties rose 
152 to us394 million in the year ended 31 december 
2013 up from us342 million whereas production was  
up 25 to an average production of 46178 boepd in 2013 
from 36940 boepd in 2012 the average brent price for the 
year was down 06 to us10841 per bbl from us10903 
per bbl in 2012
costs for government profit share increased by  
us228 million or 2886 to us307 million in the year 
ended 31 december 2013 up from us7 9 million in the year 
ended 31 december 2012 mainly due to the fact that the cost 
oil balance which had been carried forward from previous 
years was depleted in august 2013 causing the government 
share to substantially rise in the second half of 2013
materials and supply expenses together with repair 
maintenance and other services and well workover costs 
decreased 15 to us674 million in 2013 down from  
us684 million in 2012 the increase of 132 in materials 
and supplies from us53 million in 2012 to us123 million 
in 2013 is the result of repair and maintenance works in 
2013 being focused on the facilities specifically the gtf 
and to a lesser extent on wells
general and administrative expenses decreased by  
us44 million or 68 to us604 million in the year 
ended 31 december 2013 from us649 million in the year 
ended 31 december 2012 due primarily to a decrease in 
social programme expenditures of us215 million in the 
year ended 31 december 2013 from us218 million in the 
year 31 december 2012 this decrease was related to the 
completion in 2012 of the construction of a 37kilometre 
asphalt road accessing the field site with no similar  
expense incurred in 2013 the decrease in social costs  
was primarily offset by increased management fees and 
professional services
57
nostrum oil  gas annual report 2013 
strategic report strategic report
financial review
continued
selling and transportation expenses increased by 
us181 million or 175 to us1217 million in the year 
ended 31 december 2013 up from us1036 million in the 
year ended 31 december 2012 this was driven primarily by 
an increase of us154 million in loading and storage costs 
to us370 million in the year ended 31 december 2013 up 
from us216 million in the year ended 31 december 2012 
this increase was primarily driven by the rise in output of 
lpg and condensate volumes
finance costs decreased by us32 million to  
us436 million in the year ended 31 december 2013 
down from us468 million in the year ended 31 december 
2012 the decrease in costs was primarily driven by the 
raising of a new bond in november 2012 with a significantly 
lower interest rate with which an earlier bond was repaid
foreign exchange loss amounted to us636000 in the  
year ended 31 december 2013 compared to a gain of 
us776000 in the year ended 31 december 2012
other expenses increased to us256 million in the year 
ended 31 december 2013 up from us66 million in the 
year ended 31 december 2012 the increase in other 
expenses was due to the increase in export duties paid by 
the group the export duties represent custom duties for  
the export of crude oil and customs fees for services such  
as processing of declarations temporary warehousing etc 
the kazakh custom authorities based on their interpretation 
of cis freetrade legislation have imposed custom duties 
on oil exports from kazakhstan to ukraine starting from 
december 2012 
profit before income tax amounted to a profit of 
us3620 million in the year ended 31 december 2013 
compared to a profit of us2824 million in the year ended  
31 december 2012 the higher profitability was driven 
primarily by the increased revenue due to the increase  
in output of the gtf
income tax expense increased to us1425 million  
in the year ended 31 december 2013 compared to 
us1204 million in the year ended 31 december 2012  
an 184 increase the increase in income tax expense was 
primarily due to the increase in profit before income tax
the following table shows the group’s revenue sales volumes and the commodity price of brent crude oil for the years 
ended 31 december 2013 and 2012
year ended 31 d ecember 2013 2012
revenue
sales volume boe 16854970 13629245
average brent crude oil price on which nostrum oil  gas based its sales usbbl 1084 1074
t otal revenue u s million 8950 7371
the following table shows the group’s revenue breakdown by product for the years ended 31 december 2013 and 2012
year ended 31 d ecember u s ‘000s 2013 2012
revenue
oil and gas condensate 7091 5874
gas and liquefied petroleum gas 1859 1497
t otal revenue u s million 8950 7371
the following table shows the group’s revenue breakdown by exportdomestic markets for the years ended 31 december 
2013 and 2012
year ended 31 d ecember u s ‘000s 2013 2012
revenue
revenue from export sales 7650 6304
revenue from domestic sales 1300 1067
t otal revenue u s million 8950 7371
58
nostrum oil  gas annual report 2013  liq uid ity an d c apit al resources
general 
during the period under review nostrum oil  gas’s 
principal sources of funds were cash from operations and 
amounts raised under the 2010 notes and the 2012 notes 
its liquidity requirements primarily relate to meeting 
ongoing debt service obligations under the 2010 notes 
and the 2012 notes and to funding capital expenditures 
and working capital requirements
net cash flows from operating activities
net cash flows from operating activities were  
us3586 million for the year ended 31 december 2013  
as compared to us2918 million for the year ended  
31 december 2012 and were primarily attributable to
•	 profit before income tax for the year of us3620 million 
adjusted by a noncash charge for depreciation 
depletion and amortisation of us1204 million and 
finance costs of us436 million
•	 a us145 million increase in working capital primarily 
attributable to
 i  an increase in receivables of us126 million 
 ii  an increase in prepayments and other current assets 
of us68 million and 
 iii  an increase other current liabilities of us88 million 
and
•	 income tax paid of us1545 million
net cash used in investing activities
the substantial portion of cash used in investing activities  
is related to the drilling programme and the construction  
of gtus 1 2 and 3 during the period from 1 january 2010 
through 31 december 2013 cash used in the drilling 
programme represented between 43 and 70 of total 
cash flow from investment activities
net cash used inprovided by financing activities
net cash used in financing activities was us1324 million  
for the year ended 31 december 2013 primarily attributable 
to the payment of us632 million in distributions and the 
interest paid on the group’s 2010 notes and 2012 notes
cost minimisation policy
the group’s cost control system allows it to closely  
monitor both capital expenditure and operational 
expenditure the group’s policy is to minimise costs on  
a unit of production basis with the completion of major 
pieces of infrastructure and the ramping up of production 
capacity costs per boe produced have come down 
considerable over the past five years
59
nostrum oil  gas annual report 2013 
strategic report principal financial risks  
and uncertainties
strategic report
financial review
continued
description  
of risk
risk management result 2013 and exposure 2014
liquidity risk liquidity risk is the risk that the group will encounter 
difficulty in raising funds to meet commitments 
associated with its financial liabilities
liquidity requirements are monitored on a monthly 
basis and management ensures that sufficient funds 
are available to meet any commitments as they arise 
the treasury policy requires the group to maintain a 
minimum level of cash of us100 million
commodity 
price risk
commodity price risk is the risk that the group’s 
current or future earnings will be adversely 
impacted by changes in the market price of crude 
oil commodity price risk is extremely significant  
to results of the group’s operations given that all 
sales of crude oil are based on the commodity 
price crude oil prices are influenced by factors 
such as opec actions political events and supply 
and demand fundamentals
the group’s hedging policy is that upon entering  
into longer term nonscalable capital expenditure 
commitments it will hedge up to a maximum of 70  
of its liquids production the instrument the group  
has employed in the past is a zerocostcappedcollar 
such a contract fixes the floor price at a certain 
predetermined level while limiting the upside risk the 
group intends to maintain the same hedging policy 
going forward
foreign 
currency 
exchange  
rate risk
the group is exposed to foreign currency risk 
associated with transactions entered into and assets 
and liabilities denominated in currencies other than 
the functional currency of its operating entities 
being the us dollar since 1 january 2009 this 
exposure is primarily associated with transactions 
contracts and borrowings denominated in kzt 
kazakh tenge most of the group’s cash inflows as 
well as its accounts receivable are denominated in 
us dollars and most of the group’s expenses are 
primarily denominated in us dollars
the group does not hedge its exposure to foreign 
exchange rate risk foreign exchange rate risk is 
limited as the vast majority of its income is 
denominated in us dollars and expenditures are 
largely indirectly linked to us dollars as well even  
if procurement contracts are legally required to be 
stated in kzt most material contracts have clauses 
that stipulate a certain exchange rate of the kzt to 
the us dollars
interest  
rate risk
the group’s interest rate risk principally relates to 
interest receivable and payable on its cash deposits 
and borrowings
the group does not hedge interest rate risk nor 
does it swap a fixed interest rate for a variable interest 
rate or vice versa the notes bear interest at a fixed 
coupon the interest on the remaining portion of the 
20102015 bond is 105 the interest on the main 
20122019 bond is 7125
credit risk nostrum oil  gas sells all of its crude oil pursuant 
to contracts with one or more oil traders who 
purchases its production
nostrum oil  gas’s policy is to mitigate payment risk 
by requiring all purchases to be prepaid or secured 
by a letter of credit from an international bank
residual risk level
high  medium  low 
60
nostrum oil  gas annual report 2013  fiveyear summary
in millions of dollars 2009 2010 2011 2012 2013
revenue  1160  1782  3008  7371  8950 
cost of sales  440 539 708 2382 2862
gross profit  720  1243  2300  4988  6088 
general and administrative expenses  297 281 395 649 604
selling and transport expenses  57 170 354 1036 1217
finance costs  78 205 17 468 436
foreign exchange lossgain net  22 00  04 08  06
gainloss on derivative financial instrument  169 05   –  – 
other expense  16 11 79 66 256
other income  07  33  34  39  44 
profit before income tax  88  608  1490  2824  3620 
income tax expense  276 379 673 1204 1425
net income  188 229  816  1620  2195 
noncurrent assets  8198  9651  11269  12516  14260 
current assets  1830  1724  1793  3511  3348 
t otal assets  10028  11376  13062  16027  17608 
equity  4778  5007  5852  6951  8325 
noncurrent liabilities  4498  5466  5997  7819  7936 
current liabilities  753  903  1213  1257  1347 
t otal liabilities  5250  6369  7209  9076  9283 
liabilities and equity  10028  11376  13062  16027  17608 
net cash flows from operating activities  459  990  1322  2918  3586 
net cash used in investing activities¹ 2007 1322 1037 2697 2390
net cash used in financing activities  2794  397  474 504  1324
2009 2010 2011 2012 2013
profit margin  162 129 271 220 245
equityassets ratio  476 440 448 434 473
gdr price at end of period us  850  1230  970  1070  1300 
gdrs outstanding ’000s  185000  185000  186762  188183  188183 
options outstanding ’000s  2733  2983  2868  2132  2912 
dividend per gdr us  –  –  –  032  034 
¹ ifrs term based on indirect cash flow methodology
61
nostrum oil  gas annual report 2013 
strategic report strategic report
principal risks and uncertainties
impact
likelihood of 
occurrence
risk category d escription of risk risk management
single revenue 
source 
the group’s activities in the chinarevskoye oil and 
gas condensate field are currently the group’s sole 
source of revenue
in 2013 the group completed the acquisition of 
subsurface use rights in three oil and gas fields 
near the chinarevskoye field and will consider 
further acquisitions of oil and gas fields
development 
projects
the group’s planned development projects in 
particular gtf phase 2 are subject to customary 
risks related to delay noncompletion and cost 
overruns which could impact future production 
the group has engaged ferrostaal an 
experienced international project management 
firm to manage its development of gtf phase 2 
and is contracting with reputable international 
equipment suppliers employing proven 
technologies for the project
commodity 
prices
the group’s current or future earnings could  
be adversely impacted by changes in the market 
price of crude oil commodity price risk is 
extremely significant to the group’s results given 
that all sales of crude oil are based on the 
commodity price crude oil prices are influenced 
by factors such as opec actions political events 
and supply and demand fundamentals
the group’s current hedging policy is that upon 
entering into longer term nonscalable capital 
expenditure commitments it will hedge up to  
a maximum of 70 of its liquids production the 
instrument the group has employed in the past is  
a zerocostcappedcollar such a contract fixes the 
floor price at a certain predetermined level while 
limiting the upside risk 
interest rates this risk principally relates to interest receivable 
and payable on the group’s cash deposits  
and borrowings
the group does not hedge interest rate risk nor 
does it swap a fixed interest rate for a variable 
interest rate or vice versa the group’s notes bear 
interest at a fixed coupon 
subsoil use 
agreements
the group may have disagreements with the 
kazakh government regarding its subsoil 
operations or compliance with the terms of  
its subsoil use agreements
the group believes that it is in full compliance 
with the terms of its subsoil use agreements and 
maintains an open dialogue with kazakh 
governmental authorities in this regard 
environmental 
compliance
the legal framework for environmental protection 
and operational safety is not yet fully developed 
in kazakhstan and given the changing nature of 
environmental regulations there is a risk that the 
group will not be in full compliance with all such 
regulations at all times 
the group has strengthened its hse department 
over the past 18 months and regularly 
commissions independent environmental audits 
to monitor its compliance and best practice in  
this area
t ax law 
uncertainty
the uncertainty of application including retroactive 
application of tax laws and the evolution of tax laws 
in kazakhstan create a risk of additional payments 
of tax from assessments which the group believes 
it is not subject to 
the group regularly challenges either with the 
kazakh tax authorities or through the kazakh 
courts tax assessments that it believes are 
inapplicable to it either pursuant to the terms  
of its subsoil use agreements or applicable law
gas sale price the group could be compelled by governmental 
authorities purportedly acting based on kazakh 
legislation to sell its gas domestically at prices 
determined by the kazakh government which 
could be significantly lower than prices which the  
group could otherwise achieve
based on the terms of its psa and applicable  
law the group does not believe that such 
legislation is applicable in its subsoil use of the 
chinarevskoye field and has conveyed such  
a view to the kazakh government
the risks listed above do not comprise all those associated with the group’s business and are not set out in any order of 
priority additional risks and uncertainties not presently known to management or currently deemed to be less material 
may also have an adverse effect on the group’s business the risks listed above are constantly monitored by the 
management team and assessed when making business decisions
the group is exposed to a variety of risks and uncertainties in connection with its activities – the principal ones being listed  
in the table above the respective management team actively seeks to identify assess and mitigate such risks and uncertainties
further information on the financial risks faced by the group and how they are managed is provided in the notes to the 
financial statements attached to this annual report
principal risks  
and uncertainties
residual risk level
high  medium  low 
62
nostrum oil  gas annual report 2013  63
nostrum oil  gas annual report 2013 
strategic report corporate governance
committed 
to excellence 
in our 
governance
65 chairman’s overview
66 corporate governance
69 remuneration report
70 board of directors
72  nostrum oil  gas 
management team
74  zhaikmunai llp  
management team
76 audit committee report
64
nostrum oil  gas annual report 2013  nostrum oil  gas is committed to implementing good 
corporate governance practices in the interest of all of our 
stakeholders adopting and implementing good corporate 
governance is a core principle of the group in how we 
conduct our relations with investors employees customers 
suppliers and business partners
i am pleased that the group has made significant progress 
towards achieving best practice in many areas of corporate 
governance since the partnership’s gdrs were first listed 
on the london stock exchange the interim financial 
statements and operational updates that we now make 
available to the market are examples of our movement 
toward best practice in this area
our board committees have also become significantly 
more active over the past 12 months in carrying out their 
roles establishing processes procedures and controls and 
informing and advising the board as a whole of the issues 
relevant to their terms of reference in addition the board 
itself carries out regular selfevaluations of its activity and 
effectiveness and i believe that this process will make the 
board a more valuable asset and will guide the business 
going forward
the board continuously takes into account corporate 
governance considerations when making plans and  
setting out the group’s strategy and priorities 
the board is committed to imbuing the group’s declared  
principles and values throughout our business as we firmly  
believe that this will further contribute to the group’s  
long term success as we grow
as a limited partnership with gdrs admitted to the  
official list of the fca the partnership is not required  
to comply with the provisions of the uk corporate 
governance code there are no statutory corporate 
governance recommendations applicable to limited 
partnerships formed in the isle of man however the board 
has established a corporate governance code for the group 
and in developing such a code the general partner has given 
consideration to the best practice provisions on corporate 
governance set out in the uk corporate governance code  
a copy of the partnership’s corporate governance code is 
available on the partnership’s website
the general partner in consultation with the partnership’s 
independent accountants and legal advisers has also put in 
place procedures to comply with the internal control aspects 
of its corporate governance code the board believes that it 
has put in place sufficient controls to allow it to ensure that the 
group is able to comply with its ongoing obligations under 
the uk listing rules and the disclosure and transparency 
rules and under the rules applicable in kazakhstan and the 
other exchanges on which its securities are traded
the board considers that the partnership has complied 
throughout the 2013 annual accounting period with all 
relevant provisions set out in its corporate governance code
our directors possess diverse sector experience ages 
geographic and ethnic backgrounds we believe that the 
directors have the appropriate mix of skills experience 
independence and knowledge to enable them to discharge 
their respective duties and responsibilities effectively the 
group is also committed to achieving gender diversity at 
board level and whilst there are currently no women on  
our board we will actively seek to add women to the board  
we will continue to add directors based on objective 
criteria to avoid tokenism and ensure the most qualified 
individuals are appointed to this role 
we pride ourselves on taking a practical rather than 
formalistic approach to corporate governance as we 
endeavour to act in the interests of all our stakeholders  
i am pleased with the great strides the group has made  
in this area as our governance framework has grown 
alongside the business as a whole
frank monstrey
chairman
chairman’s overview
“ i am pleased that the group has made significant 
progress toward achieving best practice in many 
areas of corporate governance”
65
nostrum oil  gas annual report 2013 
corporate governance corporate structure
the group’s listed entity nostrum oil  gas lp  is a limited 
partnership which is organised under the laws of the isle of 
man but which has its head office in amsterdam and which 
is taxresident in the netherlands the management of the 
group is exercised by the board of directors of nostrum oil 
 gas group limited the general partner of the limited 
partnership the board sets the strategy policies and 
values applicable to all group companies 
the management of the group’s principal operating 
subsidiary zhaikmunai llp  a limited liability partnership 
organised under the laws of kazakhstan is exercised by its 
general director on the basis of its articles of association 
or charter and decisions taken by the general meeting  
of its participants which in each case are subject to the 
matters reserved for decision by the board of the general 
partner of the partnership
this section of the annual report describes how the  
board of directors of the general partner has applied  
the main principles set out in the group’s corporate 
governance code
t he board of directors of the general partner
the board of directors of the general partner of the 
partnership considers all important management and 
policy matters in relation to the partnership and the group 
this includes setting the partnership’s strategic aims 
ensuring that the necessary financial and human resources 
are in place for the partnership to meet its objectives and 
reviewing group management performance the board  
also sets the group’s values and standards and ensures  
that its obligations to all stakeholders are understood  
and met a number of key matters are reserved for the 
board’s decision and are not delegated to management 
a schedule of matters reserved for the board’s decision 
along with the terms of reference of the board’s 
committees can be found on the group’s website
the board currently has eight members two executive 
directors and six nonexecutive directors of whom  
three are considered by the board to be independent 
nonexecutive directors there is a wide mix of  
nationalities represented on the board namely  
belgian english german russian and indian
board roles and responsibilities
within the board the roles of the chairman and chief 
executive officer are separate with each having distinct  
and clearly defined responsibilities the chairman frank 
monstrey is responsible for leadership of the board and  
for ensuring its effectiveness in all aspects of its role  
the chairman sets the agenda for board meetings in 
consultation with the chief executive officer and the group 
general counsel the chairman is also responsible for 
ensuring that the directors receive accurate timely and 
clear information and that there is effective communication 
with the limited partners the chief executive officer 
kaiuwe kessel provides leadership to the group which 
enables the successful planning and execution of the 
objectives and strategies agreed by the board he is also 
responsible for care of the group’s assets and jointly with 
the chairman representation of the group to third parties
eike von der linden is the senior independent nonexecutive 
director on the board he provides a sounding board for  
the chairman and serves as an intermediary for the other 
directors when necessary he is available should the need 
arise to convey concerns to the board other than through 
the chairman or the chief executive officer
the other five nonexecutive members of the board  
are piet everaert atul gupta independent director  
mikhail ivanov pankaj jain and steve mcgowan 
independent directorthe board held five meetings  
in 2013 four of which were regular scheduled meetings 
messrs monstrey kessel mcgowan everaert von der 
linden gupta and ivanov attended five board meetings 
and mr jain attended four board meetings in 2013 four 
board meetings are currently scheduled for 2014
board members also held a special meeting in berlin on 
17 february 2014 with geologists reservoir engineers  
and drilling experts from the group to review the geology 
of the chinarevskoye field reserves and field development 
plans various presentations were made to the directors 
and discussion sessions were held on the group’s strategy 
and activities in these areas 
the board remains firmly focused on identifying and 
understanding the risks whether they be operational 
financial legal or reputational faced by the group  
and developing our internal controls and approach  
to managing such risks to put the group in the best 
position to achieve its strategic objectives
corporate governance
66
nostrum oil  gas annual report 2013  board selfevaluation
the board conducts an annual selfevaluation of its 
performance and effectiveness and in connection with that 
process considers the independence of its nonexecutive 
directors following the 2013 review the board considers 
that each of messrs von der linden gupta and mcgowan 
continue to demonstrate their independence as directors 
of the general partner of the partnership
in 2013 a detailed questionnaire was prepared by the 
group general counsel and distributed to each board 
member for their feedback regarding the board’s 
performance and effectiveness the directors were asked 
to provide their views on a range of subjects including 
multiple questions in four principal areas leadership 
effectiveness accountability and engagement
the responses to the questionnaires were then collected 
reviewed by the chairman and discussed with the other 
directors key findings and action items coming out of the 
selfevaluation include
•	 it was suggested that there should be additional 
information provided to the independent directors in 
relation to recruitment of personnel and human resources 
strategy the executive directors have adopted an action 
item to provide additional information in this area to the 
board in 2014
•	 it was suggested that more time should be devoted  
to strategic discussion as opposed to operational  
and financial reporting the executive directors have 
adopted an action item which seeks to shift the balance 
of information presented to the board to focus more  
on strategic matters and less on simple reporting of 
operational and financial developments
•	 it was noted that materials for consideration by the board  
in board meetings are not being distributed to board 
members sufficiently in advance of meetings and the 
general partner has adopted an action item to make 
significant improvement in this area in 2014
•	 it was suggested that there should be more information 
provided to the board regarding the decisionmaking  
of the remuneration committee this has been adopted 
as an action item for 2014
d irector induction
each individual joining the board receives a full formal 
induction package with materials on the group’s business 
and operational financial and legal matters they also 
participate in discussions with members of the board and 
representatives of major shareholders in order to obtain a 
good understanding of the challenges and opportunities 
faced by the group
board committees
the board can delegate any of its powers authorities  
and discretions with power to subdelegate for such time 
on such terms and subject to such conditions as it thinks  
fit to any committee consisting of one or more directors 
the board has established an audit committee and a 
remuneration committee and will utilise other committees  
as necessary to ensure effective governance
audit committee
the board has established an audit committee that 
operates pursuant to written terms of reference the  
audit committee is required to consist of at least two 
independent directors and at least one member who  
has recent and relevant financial experience the audit 
committee consists of mr mcgowan mr von der linden 
and mr gupta each of whom is considered to be an 
independent director and mr von der linden serves as 
chairman the board considers each member of the audit 
committee to have appropriate financial experience please 
see page 76 for more detail on the audit committee
remuneration committee
the remuneration committee assists the board in 
determining its responsibilities in relation to remuneration 
including making recommendations to the board on  
its policy on executive remuneration determining the 
individual remuneration and benefits package of each  
of the executive directors and recommending and 
monitoring the remuneration of senior management  
below the level of the board 
the remuneration of the nonexecutive directors is a matter 
for the board as a whole  the remuneration committee 
is currently comprised of mr monstrey as chairman 
mr mcgowan mr von der linden and mr ivanov and 
schedules meetings not less than twice per year at  
least one member of the remuneration committee  
must be an independent director
as noted above the remuneration committee has adopted  
an action plan to increase information provided to the 
board as a whole regarding its decisionmaking in 2014
communication with shareholders
nostrum is in regular contact with its shareholders  
we regularly issue press releases we attend investor 
conferences globally and our quarterly halfyearly and 
annual results are always followed by an investor call we 
are available for shareholder meetings with management 
and welcome enquiries we are continually reacting to 
feedback to ensure our communications are in line with 
requests extensive information is available on our website 
where shareholders or those with an interest in the  
group can log their details to receive email updates  
all shareholders are encouraged to attend the agm  
to discuss the progress of the group
67
nostrum oil  gas annual report 2013 
corporate governance management team
the board delegates to the management team the 
responsibility for overseeing the implementation by  
the partnership and its subsidiaries of the policies and 
strategy that it sets and for facilitating the prerequisites  
for successful ongoing operations the chief executive 
officer kaiuwe kessel who has extensive experience in  
the oil and gas industry leads the management team  
all of the other members of the management team have 
significant experience in the oil and gas sector in general  
and in kazakhstan in particular the members of the 
management team include the group chief financial officer 
the group deputy chief executive officer the group general 
counsel and the zhaikmunai llp general director chief 
financial officer chief operating officer director of geology 
commercial director and drilling director
annual general meeting ‘agm’
the annual general meeting of limited partners of the 
partnership was held on 28 june 2013 and members  
of the board and senior management were available to 
speak to limited partners and answer questions before  
and at the meeting during the meeting itself all 
resolutions presented were passed with votes ranging  
from 9818 to 9998 of the votes cast
the 2014 agm will be held in amsterdam on a date to  
be specified in the notice of meeting to be published later 
this year together with the resolutions to be proposed at 
the meeting details of the notice will be published on the 
group’s website shareholders unable to attend the agm 
are encouraged to vote in advance of the meeting by using 
the proxy form sent with the notice of meeting
group code of conduct
the board has adopted a code of conduct for the group 
that requires all group personnel to act ethically and with 
integrity to comply with all applicable laws and regulations 
and to act appropriately in the areas of personal conduct 
and equal opportunities the code of conduct addresses 
conduct in the areas of health safety and the environment 
antitrust and competition insider trading maintaining 
records controls and audits conflicts of interest prohibited 
payments gifts and favours interests in other businesses 
activities in other businesses use of group assets 
confidentiality communication with outside parties 
electronic security personal data personal conduct equal 
opportunity and controlled substances the code of 
conduct can be found on the partnership’s website
dealing code
in addition the board has adopted a dealing code for  
the members of the board any persons discharging 
managerial responsibilities within the group and any 
relevant group employees who may become aware of 
pricesensitive information which is based upon the  
model code set out in the uk listing rules the dealing 
code is designed to ensure that such persons do not deal 
in any of the group’s securities when they or the group  
is in possession of inside information or during close 
periods in accordance the uk disclosure and transparency 
rules the general partner is committed to taking all 
reasonable steps to ensure compliance with this code by 
members of the board all persons discharging managerial 
responsibilities and any relevant employees of the group
t akeover code
as a matter of law the uk takeover code does not apply to 
the partnership as a result a takeover offer for the limited 
partnership will not be regulated by the uk takeover 
authorities however the partnership’s limited partnership 
agreement does include a number of takeover protections 
similar to those found in the uk takeover code although 
these do not provide the full protections afforded by the 
takeover code
no failures of corporate governance were identified  
in 2013
corporate governance
continued
68
nostrum oil  gas annual report 2013  remuneration report
elected born
executive 
director
independent 
director
board of
 directors 
fee usd
audit
 committee 
fee usd
remuneration
committee fee
usd total usd
frank monstrey 2007 1965 yes no 0 – 0 0
kaiuwe kessel 2007 1961 yes no 0 – – 0
eike von der linden 2007 1942 no yes 100000 0 0 100000
steve mcgowan 2007 1966 no yes 100000 0 0 100000
piet everaert 2007 1962 no no 100000 – – 100000
atul gupta 2009 1959 no yes 100000 0 – 100000
mikhail ivanov 2009 1969 no no 100000 – 0 100000
pankaj jain 2012 1967 no no 100000 – – 100000
  mr monstrey and mr kessel are remunerated for their services as group executives through management fees payable under a technical assistance 
agreement with probel capital management nv
shareholding of directors and senior managers
on 27 march 2008 the board approved a grant of options 
pursuant to the group’s stock option plan in respect of gdrs 
representing 25 of the partnership interests outstanding 
immediately prior to the admission to listing of the gdrs 
being 100000000 partnership interests the board has 
subsequently issued certain additional options pursuant to 
the plan as at 31 december 2013 nostrum oil  gas lp had 
granted a total of 4297 958 options of which 2912348 were 
outstanding and 1808348 were exercisable 
as at 31 december 2013 the following directors and  
senior managers of group companies or their associates 
held the following options over gdrs representing 
partnership interests generally vesting over a fiveyear 
period exercisable either at us400 or us1000 per  
gdr and expiring ten years from the date of grant 
pursuant to the plan
kaiuwe kessel 1100974 gdrs
janru muller  190130 gdrs
thomas hartnett 250325 gdrs
alexei erber 70000 gdrs
jörg pahl 35000 gdrs 
heinz wendel 200000 gdrs
berik brekeshev 185000 gdrs
gudrun wykrota 170000 gdrs
gernot voigtländer 150000 gdrs
  mr wendel dob 22081953 total compensation for 2013 was €311000 
comprising his basic compensation and performance related bonus
in addition as at 31 december 2013 mr kessel owned 
10000 gdrs mr von der linden owned 10000 gdrs  
and mr everaert owned 12940 gdrs
other disclosures – please see appendix on page 80
69
nostrum oil  gas annual report 2013 
corporate governance •	 first appointed as director of nostrum oil  gas in 
november 2007
•	 reappointed as an executive director of the general 
partner on 28 june 2013
•	 since november 2004 has served as chief executive 
officer of the general partner of the partnership
•	 since 2005 managing director of probel capital 
management
•	 2002–2005 director of gaz de france’s north african  
ep division
•	 1992–2001 managing director of erdgas erdöl gmbh  
an oil and gas company owned by gaz de france and 
director and chairman of the board of kazgermunai
•	 graduate of the gubkin russian state university  
of oil and gas
•	 first appointed as director of nostrum oil  gas in 
november 2007
•	 reappointed as an executive director of the general 
partner on 28 june 2013
•	 since september 2004 has served as chairman of the 
board of the general partner of the partnership
•	 since 1991 chief executive officer of probel capital 
management a private equity and asset management 
firm based in belgium specialising in longterm capital 
management in emerging markets
•	 holds a degree in business economics from the 
university of leuven kul belgium
•	 first appointed as director of nostrum oil  gas in 
november 2007
•	 reappointed as an independent nonexecutive director  
of the general partner on 1 july 2011
•	 since 1988 managing director of linden advisory and 
consulting services
•	 since 1985 independent adviser to financial institutions 
for equity investments and mezzanine and debt funding 
project finance in the field of natural resources
•	 holds a phd in mining economics from the technical 
university of clausthal
board of directors
•	 first appointed as director of nostrum oil  gas in 
november 2009
•	 reappointed as a nonexecutive director of the general 
partner on 28 june 2013
•	 since 1993 partner in the vwew advocaten law firm
•	 since 1986 lawyer at the brussels bar active in the field  
of belgian business law
•	 graduate from the university of leuven kul 1984 and 
from the college of europe bruges 1985 belgium
corporate governance
continued
frank monstrey 
chairman
eike von der linden 
independent  
nonexecutive 
director
piet everaert 
nonexecutive 
director
kaiuwe kessel 
chief executive
70
nostrum oil  gas annual report 2013  •	 first appointed as director of nostrum oil  gas in 
november 2009
•	 reappointed as an independent nonexecutive director  
of the general partner on 9 july 2012
•	 from 1999–2008 chief executive officer 2006–2008  
and chief operating officer 19992006 of burren energy
•	 wide experience 25 years in the international upstream 
of oil and gas businesses charterhouse petroleum 
petrofina monument and burren energy
•	 graduate in chemical engineering cambridge 
university and studied petroleum engineering  
heriot watt university edinburgh
•	 first appointed as director of nostrum oil  gas in 
november 2007
•	 reappointed as an independent nonexecutive director  
of zgl on 1 july 2011
•	 since 2007 executive chairman of smp partners fiduciary 
and trust company in the isle of man
•	 2001–2007 served as a member of the board of edasco  
a fiduciary company owned by ubs and as managing 
director of intertrust isle of man
•	 1982 start of banking career at national westminster 
bank in london uk
•	 first appointed as director of nostrum oil  gas in 
november 2012 
•	 appointed as a nonexecutive director of zgl on  
28 june 2013
•	 since 2009 chief executive officer of kazstroyservice 
kss group
•	 sizeable experience more than 20 years in epc 
engineering procurement and construction projects  
in india kazakhstan the middle east and the far east
•	 graduate the regional engineering college trichy  
india beng hons in civil engineering major oil and  
gas infrastructure
•	 first appointed as director of nostrum oil  gas in 
november 2009 
•	 reappointed as a nonexecutive director of zgl on  
9 july 2012
•	 currently partner and director of oil and gas projects  
at baring vostok capital partners and chief executive 
officer at volga gas
•	 wide experience 15 years in the oil and gas industry  
ten years with the schlumberger group in various 
management and technical positions in russia the  
usa and the united kingdom including operations 
responsibility in iran georgia and azerbaijan
•	 graduate in geophysics msc from novosibirsk state 
university and management mba from the kellogg 
school of management of northwestern university
•	 elected member of the society of petroleum engineers
atul gupta 
independent  
nonexecutive 
director
steve mcgowan 
independent  
nonexecutive 
director
pankaj j ain 
nonexecutive 
director
mikhail ivanov 
nonexecutive 
director
71
nostrum oil  gas annual report 2013 
corporate governance corporate governance
continued
nostrum oil  gas 
management team
•	 appointed as group general counsel on  
5 september 2008
•	 has worked on behalf of or with the partnership  
since 2004
•	 previously a partner in white  case llp with more  
than 16 years’ experience in crossborder corporate  
and ma transactions based in the firm’s new york 
istanbul london brussels and bangkok offices
•	 1996–1998 senior corporate counsel for intercontinental 
hotels group
•	 holds a ba in comparative and developmental politics 
university of pennsylvania and a juris doctor degree  
new york university school of law
•	 member of the new york bar
kaiuwe kessel 
chief executive 
officer
t homas hartnett 
group general 
counsel
•	 appointed as the partnership’s chief financial officer on  
16 november 2007
•	 since 2000 served in various capacities at probel capital 
management nv eg oversaw zhaikmunai’s adoption of 
ifrs implementation of sap etc
•	 1990–2000 founder and managing director of axio systems 
information technology
•	 1988–1990 andersen consulting
•	 holds a beng utrecht municipal institute of technology 
and an mba university of leuven kul
j anru muller 
group chief 
financial officer
•	 appointed as an executive director of the general partner 
on 16 november 2007
•	 since november 2004 has served as chief executive  
officer of the group
•	 since 2005 managing director of probel capital 
management nv
•	 2002–2005 director of gaz de france’s north african  
ep division
•	 1992–2001 managing director of erdgas erdol gmbh  
an oil and gas company owned by gaz de france and 
member and chairman of the board of kazgermunai
•	 graduate of the gubkin russian state university of oil 
and gas
•	 first appointed as director of nostrum oil  gas in 
november 2007
•	 reappointed as an executive director of the general 
partner on 28 june 2013
•	 since september 2004 has served as chairman of the 
board of the general partner of the partnership
•	 since 1991 chief executive officer of probel capital 
management a private equity and asset management 
firm based in belgium specialising in longterm capital 
management in emerging markets
•	 holds a degree in business economics from the 
university of leuven kul belgium
frank monstrey 
chairman
72
nostrum oil  gas annual report 2013  •	 appointed deputy ceo on 1 january 2010
•	 wide experience in industrial group management picanol 
berry group ackermans  van haaren and koramic
•	 holds a master’s degree in electromechanical 
engineering university of leuven and an mba insead
j an laga 
deputy ceo
t om richardson 
group head of 
corporate finance
•	 appointed group head of corporate finance on  
31 august 2011
•	 over seven years experience in banking covering the 
emerging markets
•	 bsc in economics and politics from bristol university
73
nostrum oil  gas annual report 2013 
corporate governance corporate governance
continued
zhaikmunai llp
management team
•	 appointed commercial director of zhaikmunai llp  
in january 2010
•	 extensive experience more than 10 years in the oil  
and gas industry in kazakhstan
•	 previously held senior positions with starleigh ltd 
tallahassee holdings limited and jsc nngre and 
commercial roles at nelson resources kazakhoil  
aktobe buzachi operating atlas global investment  
and westernsiberian drilling company
•	 holds an mba international marketing from the 
maastricht school of management 
•	 appointed government authorities relations director
•	 qualified mining engineer from the polytechnical institute 
tomsk russia and the ussr ministry of geology
•	 completed drilling engineer training at the hughes 
christensen company houston texas
•	 previous experience includes various positions in the 
field development department of kazakhgaz state 
holding company state holding company “zharyk”  
and volkovgeologia kggp
heinz wendel 
general director
vyascheslav 
druzhinin 
government 
authorities relations 
director
berik brekeshev 
commercial 
director
•	 appointed as chief operating officer of zhaikmunai llp  
in january 2012 and general director of zhaikmunai llp 
in august 2013 succeeding mr druzhinin
•	 wide experience 30 years in exploration and 
production primarily as an oil and gas engineer
•	 served in various managerial and technical capacities  
in germany poland russia and kazakhstan with gdf 
suez ep  east german erdölerdgas gommern eeg 
and others
•	 graduate of the oil  gas institute of baku azerbaijan
•	 appointed as chief financial officer of zhaikmunai llp 
in april 2010
•	 prior experience in the energy field head of asset 
management upstream gazprom germania gmbh 
finance and administration manager gaz de france 
produktion exploration deutschland gmbh
•	 holds an msc mining engineering and economy  
from moscow geological exploration university  
and a certificate in international accounting from  
the german chamber of industry and commerce  
in berlin germany
gudrun wykrota 
chief financial 
officer llp
74
nostrum oil  gas annual report 2013  •	 joined zhaikmunai in llp in 1997
•	 previous experience includes derku oil  gas drilling as 
assistant driller and kazakhgas state holding company 
as a leading reservoir engineer at zhaikmunai llp  he  
has held positions of assistant general director chief 
administrative manager engineer manager and deputy 
general manager
•	 graduate of furmanov secondary school with further 
education completed at the ivanofrankivsk institute of oil 
and gas with a specialization in drilling of oil and gas wells
zhomart darkeev 
administrative 
director
•	 appointed as drilling director in 2005
•	 extensive drilling experience more than 10 years in 
various positions in the drillingworkover technology 
department at erdgas erdöl gmbh and the operation 
and production department at the ep division of  
gaz de france
•	 holds qualifications from the technical school for  
deep drilling techniques stralsund and from the 
technical university tu bergakademie freiberg 
germany drilling technology and fluid mining
•	 appointed as director of geology and reservoir 
management of zhaikmunai llp in 2013
•	 previously at gdf suez exploration  production 
deutschland gmbh with experience in petroleum 
geology from 1984
•	 extensive subsurface experience in the exploration 
appraisal development and production of hydrocarbons
•	 diploma of geology from the technical university  
of berlin and degree in exploration geology from 
moscow institute of exploration geology russia
alexei erber 
director of geology 
and reservoir 
management
gernot voigtländer 
director of geology 
and reservoir 
management
jörg pahl 
drilling director
•	 appointed as director of geology of zhaikmunai llp in 
october 2007
•	 extensive ep experience more than 20 years with the 
geological and exploration departments of erdölerdgas 
gommern gmbh and gaz de france
•	 graduate of the gubkin russian state university of oil 
and gas geology and geology engineering and the 
ernst moritz arndt university of greiswald mathematical 
methods in geology
amankeldy sanatov 
acting operations 
director
•	 appointed acting operations director in 2013
•	 diplomas in operation of oil and gas fields and oil and 
gas geology from saraov chernyshevsky state university
•	 has previously worked in other positions within the 
company including site manager manager of oil and gas 
production department and zkm llp field superintendent
75
nostrum oil  gas annual report 2013 
corporate governance audit committee report
corporate governance
continued
introduction
the audit committee oversees the relationship with the 
external auditors ernst  young has provided audit 
services to the company prior and subsequent to its listing 
in 2008 on the secondary gdr market in may 2013  
prior to the company’s agm of shareholders the audit 
committee considered and recommended to the board  
the reappointment of ernst  young this review took into 
account the results of the auditor assessment process 
including the quality of the work and communication 
undertaken by the external auditor and the level of audit 
fees the audit committee discusses the requirements  
for partner rotation with the external auditor to ensure 
appropriate independence and objectivity are maintained
as part of its review of the financial statements prepared by 
the company the audit committee reviewed the findings of 
the external auditor in respect of the financial statements
the members of the audit committee at 31 december 2013 
were mr eike von der linden chairman of the committee 
mr steve mcgowan and mr atul gupta all members of the 
committee are considered to have recent and relevant 
financial experience
compliance with corporate governance standards
nostrum’s approach to corporate governance is primarily 
based on the uk corporate governance code published 
by the financial reporting council frc and the listing 
rules of the uk listing authority 
as of 31 december 2013 nostrum complied with all the 
principles and provisions of the uk corporate governance 
code 2010 version in relation to the audit committee
role of the audit committee
the audit committee has responsibility for monitoring  
the integrity of nostrum plc’s group financial statements  
it oversees the group’s relationship with the external 
auditors and reviews the effectiveness of the external  
audit process the audit committee also monitors the 
activity of the internal audit department and reviews the 
effectiveness of the group’s internal controls and business 
risk management systems the terms of reference of the 
audit committee are available on the company’s website 
wwwnostrumoilandgascom and its duties are categorised 
under the following headings 
•	 the accounting and financial reporting processes  
of nostrum oil  gas lp
•	 the integrity and audits of the financial statements  
of nostrum oil  gas lp
•	 the issuer’s compliance with legal and regulatory 
requirements and
•	 the qualifications performance and independence of  
the independent auditor of nostrum oil  gas lp 
the audit committee met five times in 2013 and once 
between the beginning of 2014 and the publication date  
of this annual report committee members were present  
in person at two of the meetings while three meetings  
were conducted by conference call the external auditor 
was present at the two meetings where the group’s annual 
financial statements were discussed such presence 
provided the auditors with the opportunity to gain direct 
information relevant to the external audit process as well  
as assist the audit committee with guidance on technical 
issues and factors relevant to the auditors when exercising 
their professional judgement
the following sections summarise how the audit committee 
has fulfilled its duties in 2013 including the committee’s 
review of the 2013 annual report and financial statements
eike von der linden
independent nonexecutive director
76
nostrum oil  gas annual report 2013  financial reporting
at its meeting in march 2013 the audit committee  
reviewed the 2012 management letter from the auditors 
along with the group’s 2012 audited financial statements
at its may 2013 meetings the audit committee reviewed  
the 2013 first quarter interim unaudited condensed 
consolidated financial statements following the review  
the audit committee recommended the interim unaudited 
condensed consolidated financial statements for approval 
by the directors
at its august 2013 meeting the audit committee reviewed 
the 2013 second quarter interim unaudited condensed 
consolidated financial statements following the review  
the audit committee recommended the interim unaudited 
subject of meeting 2012fy
appointment  
of the auditor 2013q1 2013q2 2013q3
date of meeting 1203‘13 1305‘13 1405‘13 1608‘13 1411‘13
mr e von der linden v v v v v
mr a gupta v v v v v
mr s mcgowan v – – – –
whistleblowing arrangements
nostrum has established a whistleblowing policy and has 
also appointed two multilingual points of contact one 
contact in uralsk easily accessible for employees working 
in kazakhstan and one contact in brussels easily accessible 
for employees working in western europe
internal audit
the audit committee receives quarterly reports and monthly 
updates from the group’s cfo throughout the year the 
monthly report summarises current business performance 
and issues the quarterly reports encompass the results of 
audits and any consequential agreed management action 
with regard to significant audit findings
the group is in the process of establishing an internal  
audit function the annual audit programme across all 
operations will be structured to complete annual audits  
of the key financial and operational cycles the key  
business cycles include processes and activities in 
production operational and capital expenditure inventory 
management marketing and sales finance and reporting 
treasury fixed assets human resources hse and it
internal controls and risk management
as part of the group’s intended change to a primary  
listing a comprehensive financial procedures report is 
being prepared detailing the group’s internal controls and 
risk management systems and activity the audit 
committee requested that following this report a group 
internal control manual be created the group has in place 
internal controls and risk management systems in relation 
to the processes for both financial reporting and the 
preparation of consolidated statements these systems 
include policies and procedures to ensure that adequate 
accounting records are maintained and transactions are 
recorded accurately and fairly to permit the preparation  
of financial statements in accordance with ifrs
the board has overall responsibility for the group’s systems 
of internal control which includes risk management and for 
reviewing the effectiveness of these systems the system  
of internal control is designed to identify evaluate and 
manage significant risks associated with the achievement of 
the group’s objectives because of the limitations inherent 
in any system of internal control the company’s system is 
designed to meet its particular needs and address the risks 
to which it is exposed it is designed to manage risk rather 
than to eliminate risk altogether consequently it can only 
provide reasonable and not absolute assurance against 
material misstatement or loss
evaluation
in march 2014 the audit committee conducted its annual 
selfassessment of performance this assessment included 
a review of the committee’s membership procedures  
and resources its roles and responsibilities and its 
relationship with the board concern was raised as to the 
appropriateness of the induction material the company 
secretary has therefore been requested to provide suitable 
and detailed material for future new members of the  
audit committee aside from this observation the audit 
committee concluded that its mandate and oversight 
performance were appropriate
condensed consolidated financial statements for approval 
by the directors
at its november meeting the audit committee reviewed  
the 2013 third quarter interim unaudited condensed 
consolidated financial statements following the review  
the audit committee recommended the interim unaudited 
condensed consolidated financial statements for approval 
by the directors
the following table sets out the attendance of each  
director at scheduled nostrum board and board 
committee meetings board meetings and committees 
attendance during 2013
77
nostrum oil  gas annual report 2013 
corporate governance investor information
investor relations
irnogcouk 
 31 20 737 2288
corporate headquarters
nostrum oil  gas lp 
gustav mahlerplein 23b 
1082 ms amsterdam 
the netherlands
tel 31 20 737 2288 
fax 31 20 737 2292
registered office
nostrum oil  gas lp 
7th floor harbor court 
lord street  
douglas 
isle of man im1 4ln
corporate office
zhaikmunai llp 
592 eurasia prospect 
uralsk 090002 
republic of kazakhstan
representative office
zhaikmunai llp 
office 319 22 
kurman batyr prospect 
astana 010000 
republic of kazakhstan
auditors
ernst  young llp 
almaty 
republic of kazakhstan
legal counsel
white  case llp 
london uk
approach to investor relations
nostrum’s board attaches great importance to maintaining 
good relationships with the partnership’s limited partners 
and maintains a regular dialogue with them to ensure the 
understanding of objectives 
the investor relations programme aims at developing  
an open and transparent communication between  
nostrum and its stakeholders providing information  
about the financial and operational performance of the 
company the ambition of the department is to ensure  
all questions that any of our stakeholders have are dealt 
with in a timely manner and the company is viewed as  
being approachable and responsive to any potential  
future or existing stakeholders
electronic communication details
nostrum’s website provides valuable information on  
the activities of the company both regulatory and other  
as well as the opportunity to sign up to our mailing list  
to ensure stakeholders are kept up to date with the  
most recent information please see wwwnogcouk  
for more information
share price information
gdr information – listing details
exchange london stock exchange – main market
ticker nogli
reuters instrument code nognql
isin code us66978b2034
nostrum oil  gas historic share price performance
jan 13
feb 13
mar 13
apr 13
may 13
jun 13
jul 13
aug 13
sep 13
oct 13
nov 13
dec 13
nostrum oil  gas ftse 350 ep
6
7
8
9
10
11
12
13
14
15
16
ftse 250 brent crude
financial calendar – 2014
30 april 2014 full year 2014 financial results  
and management report
30 may 2014 q1 2014 financial results
31 july 2014 h1 2014 operational update
29 august 2014 h1 2014 financial results  
and management report
31 october 2014 q3 2014 operational update
29 november 2014 q3 2014 financial results
equity financing
equity raising timing amount lead manager
initial public  
offering ipo
march 2008 us100m ing bank nv
secondary  
equity issue
sept 2009 us300m ing bank nv
mirabaud
 securities
renaissance
 securities
78
nostrum oil  gas annual report 2013  debt financing
d ebt financing
coupon
annum timing
amount
us m lead manager
senior bond issue maturity 2015 105 october 2010 us450m citigroup
ing
jp morgan
senior bond issue maturity 2019 7125 november 2012 us560m boaml
citigroup
gmp securities
halyk finance
vtb capital
november 2012 – successful tender offer in on october 2010 notes resulted in us358 million refinancing and provision 
of new cash for general corporate purposes
bond yield information
103
104
105
106
107
108
109
110
111
60
65
70
75
80
1024m 105 ‘15 bond priceytm performance 
from jan’13dec’13
jan 13
feb 13
mar 13
apr 13
may 13
jun 13
jul 13
aug 13
sep 13
oct 13
nov 13
dec 13
price lhs ytm rhs
560m 7125 ‘19 bond priceytm performance from 
jan’13dec’13 
jan 13
feb 13
mar 13
apr 13
may 13
jun 13
jul 13
aug 13
sep 13
oct 13
nov 13
dec 13
price lhs ytm rhs
50
55
60
65
70
75
98
100
102
104
106
108
110
112
79
nostrum oil  gas annual report 2013 
regulatory information other disclosures
management report
nostrum oil  gas the “partnership” is the holding 
company of the nostrum oil  gas group of companies 
the ‘group’ group structure as of december 2013
zhaikmunai 
netherlands bv nl
nostrum oil  gas lp
isle of mannl
claydon industrial 
limited bvinl
jubilata investments
limited bvinl
zhaikmunai llp
kazakhstan
condensateholding llp
kazakhstan
zhaikmunai 
international bv nl
100
zhaikmunai 
finance bv nl
100 100 100
100
55
45
100
 zhaikmunai llp’s equity is not listed and the present share value proﬁt for one share and balance value of one share in zhaikmunai llp are not   
 required to be published no material transactions were carried out in relations to zhaikmunai llp’s equity in 2013 
the partnership’s global depositary receipts are listed on 
the london stock exchange and at 31 december 2013 the 
partnership had a market capitalisation of us2398m
the uk financial conduct authority’s disclosure and 
transparency rules dtrs require the group to set out in this 
report a fair review of the partnership’s business during the 
financial year ended 31 december 2013 and a description of 
the principal risks and uncertainties facing the partnership 
such review must also include an analysis of the position of 
the partnership’s business at the end of that year
the information that fulfils these management report 
requirements is incorporated by reference and can be 
found in the following sections
•	 chairman’s letter on page 14
•	 strategic review on page 22
•	 our business model on page 20
•	 recent events on page 10
•	 principal risks and uncertainties on page 62
•	 financial review on page 56
•	 governance on page 64
•	 health safety and environmental matters on page 44
other information to be disclosed in the management 
report is set forth in this section
appendix
profit and distribution
the partnership’s profit for the financial year after taxation 
amounted to us219519000 2012 us162009000  
the board of the general partner declared a distribution  
as follows
common units us
paid distribution of 034 per common unit  
last year 032 per common unit 63179000
partnership capital
the partnership’s issued partnership capital as at  
31 december 2013 comprised 188182958 common units 
representing limited partnership interests and 1 general 
partnership interest
powers for the partnership issuing or buying back its own  
common units
the partnership was authorised by its limited partners at 
the 2013 agm to purchase in the market up to 18818295 
of the partnership’s gdrs and limited partnership interests 
approximately 10 of the issued gdrs and limited 
partnership interests on behalf of the partnership in 
onmarket and offmarket transactions this authority will 
expire at the conclusion of the 2014 agm or on december 
31 2014 if earlier and is renewable annually the board  
may seek to renew this authority at the 2014 agm
80
nostrum oil  gas annual report 2013  repurchases are effected by market purchases through 
the london stock exchange in privately negotiated 
transactions or by a combination of the two any gdrs  
and limited partnership interests purchased pursuant to  
the gdr repurchase programme are either held as treasury 
gdrs or limited partnership interests used to meet the 
partnership’s obligations under the employee stock option 
programme or cancelled
during the year ended 31 december 2013 1814348 
common units were repurchased by the partnership 
interests in voting rights
information on notifiable interests in the partnership’s 
common units is not required to be provided to the 
partnership by the holders thereof under the dtrs  
as of 31 december 2013 based on the partnership’s 
register of members and interests the holders of the 
partnership’s common units are as follows
holder common units  of capital
bny mellon dr lp  
nominees limited 188182948 9999
claremont holdings limited 10 001
appointment and retirement of directors
the structure practices and committees of the board 
including matters relating to the size independence and 
composition of the board the election and removal of 
directors requirements relating to board action the powers 
delegated to board committees and the appointment of 
executive officers are governed by the general partner’s 
articles of association the limited partnership agreement  
of the partnership and the terms of the partnership’s 
relationship agreement and subscription agreement with 
the claremont group the following summarises certain 
provisions of those documents
size independence and composition of the board 
the board may consist of such number of directors as  
may be determined from time to time by a resolution of the 
general partner’s shareholders under the general partner’s 
articles of association at least one of the directors holding 
office must be independent of the partnership the general 
partner its shareholder and its affiliates as determined by 
the full board upon the death resignation or removal of an 
independent director the vacancy must be filled promptly 
the current sole shareholder of the general partner is 
thyler holdings bv a member of the claremont group 
which is controlled by frank monstrey and his spouse 
in connection with claremont’s 2009 subscription  
for limited partnership interests the partnership and  
the general partner agreed to appoint one director 
nominated by claremont such person in turn being 
nominated by baring vostok capital partners pursuant  
to the investment agreement between claremont and 
bvcp together with an additional independent director  
to be nominated by bvcp and claremont subject to 
approval by the independent limited partners mr ivanov 
was nominated by bvcp to the board and mr gupta is  
the relevant independent director
in addition claremont has agreed in connection with its  
2010 sale of 50 million gdrs to kazstroyservice global bv 
that it would take reasonable steps including voting as a 
limited partner in any general meeting of the limited partners 
to procure that an individual nominated by kss global is 
appointed to the board of the general partner mr jain  
was subsequently nominated as a director by kss global 
election and removal of directors
at every annual general meeting onethird of the directors 
who are subject to retirement by rotation or if their number 
is not three or a multiple of three the number nearest to 
but not exceeding onethird retire from office by rotation 
provided that if there is only one director who is subject to 
retirement by rotation he shall retire vacancies on the 
board may be filled and additional directors may be added 
by a resolution of shareholders of the general partner or  
a vote of the directors then in office provided that any new 
directors satisfy certain eligibility requirements those 
eligibility requirements generally provide among other 
things that
•	 a person may not be appointed to the office of independent 
director unless he or she has been approved by a majority 
of the limited partners independent of thyler and its 
affiliates and a person may not be appointed to the  
office of director unless he or she has been approved  
by a majority of the limited partners 
a director other than an independent director may be 
removed from office for specified reasons including for  
any reason by a written resolution requesting resignation 
signed by all other directors then holding office or by  
a resolution duly passed by the general partner’s 
shareholder following the proposal by the general  
partner and subsequent approval of a majority of limited 
partners an independent director may only be removed  
by a resolution duly passed by the general partner’s 
shareholders following the proposal by the general partner 
and subsequent approval of a majority of limited partners 
independent of thyler and its affiliates 
claremont has undertaken pursuant to the relationship 
agreement among other things not to vote on any 
resolution to appoint or remove an independent director 
unless the term of appointment of such independent 
director has expired and such independent director is 
seeking reelection at a general meeting of limited partners 
or the board has determined acting reasonably that the 
independent director is no longer independent
alternate directors
a director may by written notice to the general partner 
appoint any person including another director who has 
been approved by the board and who meets any minimum 
standards that are required by applicable law to serve as  
an alternate director who may attend and vote in such 
director’s place at any meeting of the board at which the 
director is not personally present and to otherwise perform 
any duties and functions and exercise any rights that the 
director could perform or exercise personally michael 
calvey has been approved and has served as an alternate 
director in the absence of mikhail ivanov
81
nostrum oil  gas annual report 2013 
appendix appendix
continued
action by the board
the board may take action in a duly convened meeting  
in which a quorum is present or by a written resolution 
signed by all directors then holding office when action  
is to be taken at a meeting of the board subject to any 
requirements relating to the approval by independent 
directors the affirmative vote of a majority of the directors 
then holding office is required for any action to be  
taken other than with respect to the enforcement of  
any contractual or other rights under the partnership 
agreement and the relationship agreement matters 
relating to the enforcement of any such rights if  
considered at a meeting of the board may be decided  
by the vote of a majority of directors then holding office  
that are independent of thyler and its affiliates
actions requiring approval by independent directors
in addition to requiring approval by the board the 
following matters require the additional approval of a 
majority of the independent directors in order for any 
action to be taken with respect thereto 
•	 dissolution 
•	 any amendment of the partnership agreement that is  
not ministerial in nature or that has not been consented  
to by the limited partners 
•	 the enforcement of any contractual or other rights that  
the general partner or the partnership may have against 
thyler or any of its affiliates pursuant to any contract 
arrangement or transaction entered into with thyler or 
any of its affiliates including the partnership agreement  
or the relationship agreement 
•	 any amendment of the relationship agreement with  
thyler and claremont and 
•	 any transaction with any related party not controlled  
by the general partner or the partnership
transactions in which a director has an interest
a director who directly or indirectly has an interest in a 
contract transaction or arrangement with the general 
partner the partnership or any member of the group is 
required to disclose the nature of his or her interest to  
the full board with certain limited exceptions specified  
in the general partner’s articles a director may not vote  
on or be counted in the quorum in relation to any resolution  
of the board or of a committee of the board concerning  
any contract arrangement transaction or any proposal 
whatsoever to which the general partner or any of its 
subsidiaries is or is to be a party and in which he has 
directly or indirectly an interest which is material other 
than by virtue of his interests in shares or debentures or 
other securities of or otherwise in or through the general 
partner or the partnership 
a director may not vote or be counted in the quorum on 
any resolution of the board or committee of the board 
concerning his or her own appointment as the holder of  
any office or place of profit with the general partner the 
partnership or any company in which the partnership is 
interested where proposals are under consideration 
concerning the appointment including fixing or varying  
the terms of appointment or termination of two or more 
directors to offices with the general partner the partnership  
or any company in which the partnership is interested  
such proposals may be divided and a separate resolution 
considered in relation to each director in such case each  
of the directors concerned shall be entitled to vote and  
be counted in the quorum in respect of each resolution 
except that concerning his own appointment
appointment of a new general partner
the partnership agreement generally provides that the 
general partner may not transfer its general partner  
interest in the partnership to any person other than thyler 
or an affiliate of thyler unless i the holders of a majority 
representing not less than 75 of the holders of the 
common units attending and voting at the relevant meeting 
consent to the transfer or ii there is a transfer of common 
units or gdrs representing not less than 50 of the total 
number of common units in issue from a limited partner 
and its affiliates to a third party in accordance with clause 
18 of the partnership agreement upon such a transfer the 
general partner may assign all or any of its general partner 
interests to such third party or upon transfer of the entire 
share capital of the general partner to such third party 
withdraw as the general partner of the partnership without  
the approval of the holders of common units from the 
partnership with effect from the date on which the 
replacement general partner assumes the rights and 
undertakes the obligations of the general partner under  
the partnership agreement
in addition following a proposal by the general partner  
the prior approval of holders of 75 of the common units 
voting at a meeting of limited partners is required to permit 
the general partner to withdraw from the partnership upon 
appointment of a replacement general partner  for as long 
as the relationship agreement with the claremont group  
is effective control over the general partner may only be 
transferred to a third party other than thyler or its affiliates 
with the consent of limited partners representing not less 
than 75 of the common units attending and voting at the 
relevant meeting which has the same substantive effect as 
if the general partner withdrew or transferred its interest in 
the partnership directly unless the transfer is done in 
accordance with the paragraph above
82
nostrum oil  gas annual report 2013  conflicts of interest and fiduciary duties
the partnership’s organisational ownership and investment 
structure involves a number of relationships that could give 
rise to conflicts of interest between the partnership on the 
one hand and affiliates of its general partner or limited 
partners and holders of gdrs on the other hand in 
particular conflicts of interest could arise among other 
reasons because 
•	  the group’s arrangements with thyler and its affiliates were 
negotiated in the context of an affiliated relationship which 
may have resulted in those arrangements containing terms 
that are less favourable than those which otherwise might 
have been obtained from unrelated parties and 
•	 conflicts of interest may arise between the partnership 
and the kazstroyservice group which constructed the 
gas treatment facility for the partnership’s kazakh 
operating subsidiary zhaikmunai llp  because pankaj 
jain chief executive officer of the kazstroyservice group 
is a director of the general partner
pursuant to the relationship agreement thyler has 
undertaken to ensure that the partnership is capable at all 
times of carrying on its business independently of thyler 
and its affiliates other than the partnership and any of its 
subsidiaries and that all of the partnership’s transactions 
and relationships with thyler and its affiliates other than  
the partnership and any of its subsidiaries are at arm’s 
length and on normal commercial terms  
indemnification and limitations on liability
the partnership agreement
under the partnership agreement nostrum oil  gas lp  
is required to indemnify to the fullest extent permitted  
by law the general partner and any of its affiliates and  
their respective officers directors agents shareholders 
partners members and employees in each case against 
all losses claims or other amounts arising from any and all 
claims incurred by an indemnified person in connection 
with the group’s business or by reason of their holding  
such positions except to the extent that the same are 
determined to have resulted from the indemnified  
person’s bad faith fraud or wilful misconduct or in the  
case of a criminal matter action that the indemnified 
person knew to have been unlawful
in addition under the partnership agreement i the  
liability of such persons has been limited to the fullest 
extent permitted by law except to the extent that their 
conduct involves bad faith fraud or wilful misconduct or  
in the case of a criminal matter action that the indemnified 
person knew to have been unlawful and ii any matter that  
is approved by a majority of the independent directors  
will not constitute a breach of any duties stated or implied  
by law or equity including fiduciary duties 
the general partner’s articles of association
under the general partner’s articles of association the 
general partner is required to indemnify to the fullest 
extent permitted by law its affiliates directors officers 
shareholders and employees against any and all losses 
claims or other amounts arising from any and all claims 
incurred by an indemnified person in connection with  
the group’s business or in respect of or arising from their 
holding such positions except to the extent that the same 
are determined to have resulted from the indemnified 
person’s bad faith fraud or wilful misconduct or in the case  
of a criminal matter action that the indemnified person 
knew to have been unlawful in addition under the general 
partner’s articles of association i the liability of such 
persons has been limited to the fullest extent permitted  
by law except to the extent that their conduct involves bad 
faith fraud or wilful misconduct or in the case of a criminal 
matter action that the indemnified person knew to have 
been unlawful and ii any matter that is approved by a 
majority of the independent directors will not constitute  
a breach of any duties stated or implied by law or equity 
including fiduciary duties or adversely affect the right of 
any indemnified person to an indemnity thereunder 
insurance
the partnership and the general partner have obtained 
insurance under which the directors and officers of the 
general partner will be insured subject to the limits of the 
policy against certain losses arising from claims made 
against such directors and officers by reason of any acts  
or omissions covered under the policy in their respective 
capacities as directors or officers of the general partner 
including certain liabilities under securities laws
related parties and related party transactions
significant limited partners
as at the date of this report the partnership has received 
notice that companies controlled by frank monstrey  
the chairman of the general partner beneficially own 
approximately 2720 of the common units of the 
partnership including those held through gdrs in 
addition companies indirectly controlled by mr monstrey 
own 100 of the issued shares of the general partner
the partnership understands that kazstroyservice  
global bv an entity which the partnership understands  
is indirectly controlled by timur kulibayev arvind tiku 
lakshmi mittal and goldman sachs beneficially owns 
266 of the partnership’s common units including those 
held through gdrs
the partnership understands that dehus dolmen 
nominees limited an entity which the partnership 
understands is affiliated with and controlled by baring 
vostok capital partners holds a 154 interest in the voting 
rights of the partnership’s common units including those  
held through gdrs
83
nostrum oil  gas annual report 2013 
appendix appendix
continued
relationship agreement 
the partnership is party to a relationship agreement with 
thyler holdings bv “thyler” the general partner and 
claremont holdings limited “claremont” dated 28 march 
2008 that regulates in part the degree of control that  
thyler and claremont and their affiliates other than the 
general partner the partnership and any subsidiary of the 
partnership may exercise over the management of the 
partnership the principal purposes of the relationship 
agreement are to ensure that the partnership is capable at all 
times of carrying on its business independently of thyler and 
claremont and their affiliates and that all of the partnership’s 
transactions and relationships with thyler and its affiliates  
are at arm’s length and on normal commercial terms
pursuant to the relationship agreement each of thyler  
and claremont undertake to allow the partnership to  
be operated in the best interests of the limited partners and 
holders of the gdrs as a whole to allow the partnership and 
its affiliates at all times to carry on business independently of 
claremont and thyler and its affiliates and to allow for the 
partnership’s transactions and relationships with thyler 
claremont and their affiliates to be at arm’s length and on 
normal commercial terms
in addition a thyler undertakes to comply with the terms 
of the partnership agreement as though it were a party 
thereto not to amend the articles of association of the 
general partner in respect of certain specified actions  
and not to pass a shareholder resolution in respect of 
claremont that would violate the terms of the relationship 
agreement b the partnership undertakes to treat all 
holders of gdrs that are in the same position equally  
in respect of the rights attaching to such gdrs  
c claremont undertakes that any voting rights it holds in 
respect of common units shall not be exercised in respect 
of any resolution relating to a transaction arrangement 
agreement or dispute between the partnership on the one 
hand and claremont and its affiliates on the other hand or 
to make any variations to the partnership agreement that 
would be contrary to the maintenance of the partnership’s 
ability to carry on its business independently of claremont 
and its affiliates and d each of thyler and claremont 
undertake not to vote on any resolution of the limited 
partners or the board of directors to appoint or remove  
any independent director unless the term of appointment  
of such independent director has expired and such 
independent director is seeking reelection or the board  
of directors has determined that the independent director  
is no longer independent
each of thyler and claremont has also undertaken that if 
claremont andor its affiliates agrees to sell transfer or 
dispose of common units or gdrs representing not less 
than 50 of the total number of common units in issue to  
a third party in circumstances where the takeover provisions  
in the partnership agreement apply they shall use their 
reasonable endeavours to procure that the acquiror or  
its affiliates shall also agree to purchase the entire issued 
share capital of the general partner and thyler has 
undertaken that if required it shall sell such shares in  
the general partner in such circumstances or otherwise 
permit the withdrawal of the general partner as the  
general partner of the partnership
the relationship agreement will continue in full force  
and effect until the occurrence of the earliest of i the 
partnership’s securities ceasing to be admitted to the official 
list of the fsa and to trading on the london stock exchange 
or ii thyler and its affiliates ceasing to own 25 or more  
of the outstanding common units of the partnership 
the directors believe that the terms of the relationship 
agreement enable the partnership to ensure that thyler 
and its affiliates are not able to abuse their position as a 
holder of common units of the partnership and a 
shareholder in the general partner
gas treatment facility agreement
the partnership’s operating subsidiary zhaikmunai llp 
entered into an agreement with jsc ogcc kazstroyservice 
an affiliate of kazstroyservice global bv on 10 august 2007 
to engineer design and construct zhaikmunai llp’s first gas 
treatment facility the total cost of the construction of such 
first gas treatment facility which was completed in 201 1 was 
approximately us260 million
services agreements
certain senior managers provide their services to the 
partnership’s principal operating subsidiary zhaikmunai 
llp during the past year pursuant to a service agreement 
dated 27 march 2007 between probel capital management 
nv and zhaikmunai the “probel services agreement” 
probel was controlled by mr monstrey the chairman of the 
general partner under the probel services agreement 
zhaikmunai paid a fee to probel calculated by multiplying 
the relevant executive’s or manager’s number of working 
days per month by the executive’s or manager’s daily rate 
as stipulated in the probel services agreement the 
aggregate compensation paid by zhaikmunai to probel 
under the probel services agreement was us175 million 
for the year ended 31 december 2013 us1365 million for 
the year ended december 2012
certain personnel provide their services to zhaikmunai 
pursuant to a service agreement dated 1 january 2009 
between amersham oil limited “amersham” and 
zhaikmunai the “personnel agreement” amersham is 
indirectly controlled by mr monstrey under the personnel 
agreement zhaikmunai pays a monthly fee to amersham  
in return for amersham’s provision of personnel and 
consultancy services for management and related activities 
84
nostrum oil  gas annual report 2013  the fee is determined each month the personnel agreement 
remains in force the aggregate compensation paid by 
zhaikmunai to amersham under the personnel agreement 
was us15 million for the year ended 31 december 2013 
us142 million for the year ended 31 december 2012
frank monstrey kaiuwe kessel janru muller and thomas 
hartnett provide their services to the partnership pursuant to 
a consultancy agreement between the general partner and 
zhaikmunai netherlands bv dated 1 september 2008 and  
as amended and restated on 17 september 2009 with  
effect from 20 december 2007 the “executive services 
agreement” zhaikmunai netherlands bv formerly an 
affiliate of probel was subsequently transferred to the 
partnership on 1 january 2009 under the terms of the 
executive services agreement zhaikmunai netherlands 
bv agrees to provide the consultancy services of these 
individuals to the general partner and its subsidiaries as 
consultants rather than as employees of the general 
partner or any of its subsidiaries zhaikmunai netherlands 
bv entered into a backtoback services agreement with 
probel dated 1 september 2008 and as amended and 
restated on 17 september 2009 the “probel executive 
services agreement” subcontracting zhaikmunai 
netherlands bv’s responsibilities and obligations under 
the executive services agreement to probel with effect 
from 20 december 2007 on materially the same terms as 
set out in the executive services agreement
on 28 february 2009 zhaikmunai entered into a service 
agreement with prolag an affiliate of probel pursuant to 
which prolag has agreed to provide certain commercial 
marketing and other services to zhaikmunai including but 
not limited to consultations on zhaikmunai’s sales strategy 
and effective marketing policy structuring its pricing policy 
and providing regular consultations and assistance on 
financial matters such as budgeting credit policy and finance 
control fees are agreed per project on an ad hoc basis or 
otherwise an agreed fee is paid calculated for the specified 
period of the services with reference to an agreed schedule 
set out in the agreement the aggregate compensation  
paid by zhaikmunai to prolag under the agreement was 
us13 million for the year ended 31 december 2013 
us22 million for the year ended 31 december 2012
other
piet everaert a nonexecutive director is a partner in  
the law firm vwew advocaten in brussels which has 
rendered legal services to probel since 2006 this  
business relationship is ongoing to date
the group has undertaken certain other transactions with 
related parties as disclosed in the notes to the audited 
consolidated financial statements for the year ended  
31 december 2013
any transaction with any related party not controlled by the 
general partner or the partnership must be approved by a 
majority of the independent directors of the general partner
responsibility statement
the directors of the general partner are responsible for 
preparing this annual report and the financial statements  
in accordance with applicable law and regulations each  
of the directors whose names and functions are listed  
on pages 70 to 75 of this annual report confirm that  
to the best of their knowledge
•	  the accompanying financial statements prepared in 
accordance with the applicable reporting principles  
give a true and fair view of the assets liabilities financial 
position and profit or loss of nostrum oil  gas lp and 
the undertakings included in the consolidation taken as  
a whole and
•	 the management report includes a fair review of the 
development and performance of the business and the 
position of nostrum oil  gas lp and the undertakings 
included in the consolidation taken as a whole together 
with a description of the principal risks and uncertainties 
that they face
by order of the board
signed on behalf of nostrum oil  gas lp acting by its 
general partner nostrum oil  gas group limited by
kaiu we kessel  janru muller
group ceo  group cfo
85
nostrum oil  gas annual report 2013 
appendix shareholder information
corporate website
you can find additional information regarding the nostrum 
oil  gas group at our website wwwnostrumoilandgascom 
the “investors” section in particular contains a great deal 
of information of interest to our investors
agm 2014
the 2014 annual general meeting of limited partners of 
nostrum oil  gas lp will be held in amsterdam on a  
date to specified in the notice of meeting to be issued  
to the limited partners during 2014
gdrs
the partnership’s global depositary receipts are listed  
on the international order board of the london stock 
exchange under the symbol nogli
corporate offices
in 2013 the group moved its corporate headquarters  
and seat of effective management to amsterdam the 
netherlands the group continues to maintain the registered 
office of the partnership and the general partner in douglas 
isle of man an office for investor relations and corporate 
finance matters in london and zhaikmunai llp’s head office 
in uralsk kazakhstan and a representative office in astana 
kazakhstan details of these offices are set out below
zhaikmunai lp 
gustav mahlerplein 23 b 
1082 ms amsterdam 
the netherlands
tel  31 20 737 2288  
fax  31 20 737 2292
operational structure
the main divisions involved in the operational activity  
at zhaikmunai llp can be summarised as follows
all divisions report to the general director of zhaikmunai 
llp  there were no changes to the above in 2013
management system
the group deploys an operations management system 
oms and a financial management system fms in which 
it has documented the processes and procedures which 
ensure that the group can fulfil the tasks required to 
achieve its objectives
appendix
continued
general director at zkm llp
drilling marketing finance
geology procurement
86
nostrum oil  gas annual report 2013  glossary
3d seismic survey seismic survey that is acquired processed and interpreted to yield a threedimensional 
picture of the subsurface 
2009 ryder scott report the report prepared by ryder scott relating to the group’s reserves and resources  
dated 1 july 2009
2010  2011  2012 ryder scott report the report prepared by ryder scott relating to the group’s reserves dated 31 december
2013 ryder scott report the report prepared by ryder scott relating to the group’s reserves and resources dated 
31 august 2013
a
amec amec overseas cyprus limited
amec report amec environmental health and safety due diligence report “health safety and 
environmental compliance and assurance of audit of nostrum’s facilities” dated  
31 july 2013 
antimonopoly agency the kazakh antimonopoly authority 
api american petroleum institute
api gravity the industry standard method of expressing specific density of crude oil or other liquid 
hydrocarbons as recommended by the american petroleum institute higher api gravities 
mean lower specific gravity and lighter oils when the api gravity is greater than 10 the 
product is lighter and floats on water if it is less than 10 it is heavier than water and sinks 
generally speaking oil with an api gravity between 40 and 45 commands the highest prices
appraisal well a well or wells drilled to follow up a discovery and evaluate its commercial potential
aquifer water bearing structure
associated gas gas which occurs in crude oil reservoirs in a gaseous state
authorised oil and gas agency the state’s authorised agency in the area of oil and gas acting on the instructions  
of the president and the government currently the mog 
b
barrel  bbl the standard unit of volume 1 barrel  159 litres or 42 us gallons
basin a large area holding a thick accumulation of sedentary rock
bcf billion cubic feet a billion defined as 1000000000  
on average 1 bcf of sales gas  1055 petajoules
boe barrels of crude oil equivalent ie the factor used by nostrum to convert volumes  
of different hydrocarbon production to barrels of oil equivalent
bopd barrels of crude oil per day
boepd barrels of crude oil equivalent per day 
bscfd billion standard cubic feet per day
btu british thermal unit measurement unit for energy
c
c1 methane
c2 ethane
c3 propane
c4 butane
c5 pentane
c6 hexane
c7 heptane
casing relatively thinwalled large diameter steel rods that are screwed together to form  
a casing string which is run into a core hole or well and cemented in place
chinarevskoye field the chinarevskoye oil and gas condensate field 
christmas tree the fittings valves and gauges that are bolted to the wellhead to control flow  
from a producing well
cng compressed natural gas
co
2
carbon dioxide
coal a sedimentary rock composed primarily of carbonaceous material formed by plant 
remains transformed by heat and time
87
nostrum oil  gas annual report 2013 
appendix c
common units limited partner interests each representing a fractional part of the rights and obligations 
of all limited partners of nostrum oil  gas lp
competent authority the state’s central executive agency designated by the government to act on behalf  
of the state to exercise rights relating to the execution and performance of subsoil use 
contracts except for contracts for exploration and production of commonly occurring 
minerals this was until recently the ministry of energy and mineral resources of 
kazakhstan which on 12 march 2010 was reorganised into the ministry of oil and gas 
mog with respect to the oil and gas industry 
competition law the kazakhstan law “on competition” no 112iv dated 25 december 2008 which  
came into effect on 1 january 2009 
condensate hydrocarbons which are gaseous in a reservoir but which condense to form a liquid  
as they rise to the surface where the pressure is much less
contingent resources deposits that are estimated on a given date to be potentially recoverable from known 
accumulations but that are not currently considered commercially recoverable 
cost oil cost oil denotes an amount of crude oil produced in respect of which the market value  
is equal to nostrum’s monthly expenses that may be deducted pursuant to the psa 
include all operating costs exploration costs and development costs up to an annual 
maximum of 90 of the annual gross realised value of hydrocarbon production 
crude oil a mixture of liquid hydrocarbons of different molecular weights
cuft cubic feet
d
daf sales made on delivery at frontier terms 
development during development engineering teams design the most efficient development options to 
build wells and associated infrastructure to produce hydrocarbons from a gas field within a 
proven productive reservoir as defined by exploration and appraisal activities the three 
phases of development are exploration and appraisal development and production
development plans the development plans approved by the scfd in march 2009 
d irectors or board the directors of the general partner 
downstream downstream refers to all petroleum operations occurring after delivery of crude oil or gas 
to refinery or fractionation plant
downtime downtime is all time during which an operation is postponed usually due to bad weather 
or mechanical failure
drilling fluidmud a mixture of water and drilling additives used to cool the drill bit lift cuttings and control 
swelling clays drilling fluid is stored in a sump during drilling
dry gas
dry gas is natural gas methane and ethane with no significant content of heavier 
hydrocarbons it is gaseous at subsurface and surface conditions
e
ep exploration and production
ebrd european bank for reconstruction and development
ebit earnings before interest and tax 
ebitda earnings before interest taxes depreciation and amortisation 
ecological risks environmental stressors such as chemicals land change disease invasive species  
and climate change
eea european economic area 
environmental code the kazakhstan environment code no 212 dated 9 january 2007 as amended 
ethane saturated hydrocarbon alkane with two carbon atoms in its molecule c2h6  
the second member of the paraffin series a gas under normal conditions a basic 
feedstock for petrochemical industries
exploration permit the geological allotment annex to the licence issued by the competent authority  
to zhaikmunai llp 
exploration phase the phase of operations which covers the search for oil or gas by carrying out detailed 
geological and geophysical surveys followed up where appropriate by exploratory drilling
exploration well well drilled purely for exploratory information gathering purposes in a particular area
glossary
continued
88
nostrum oil  gas annual report 2013  f
farmin transfer of a percentage of an oil or gas permit held by the farmor in return for partial  
or complete delivery of the work program by the farmees note that this work would 
normally have had to have been delivered and paid for by the farmor
farmee earns a percentage interest in an oil an gas permit by helping the company that holds  
the permit to deliver the work program required by permit
farmor a farmor holds an oil and gas permit and agrees to work with another company who  
can deliver the work program required by the permit in return the farmee is given a 
percentage interest in the permit
farmout a contractual agreement with the holder of an oil and gas permit to assign all or  
a percentage of that interest to another party in exchange for delivering the work 
program required by the permit or fulfilling other contractually specified conditions
fca sales made under free carrier terms
fca uralsk sales made under free carrier terms according to which nostrum delivers to the terminal 
in uralsk and transportation risk and risk of loss are transferred to the buyer after delivery 
to the carrier
field an area consisting of a single reservoir or multiple reservoirs all grouped on or related  
to the same individual geological structure feature andor stratigraphic condition 
fob sales made under free on board terms 
fsa financial services authority of the united kingdom
fsma the financial services and markets act 2000 as amended 
g
gas petroleum that consists principally of light hydrocarbons it can be divided into lean gas 
primarily methane but often containing some ethane and smaller quantities of heavier 
hydrocarbons also called sales gas and wet gas primarily ethane propane and butane as 
well as smaller amounts of heavier hydrocarbons partially liquid under atmospheric pressure 
gas condensate the mixture of liquid hydrocarbons that results from condensation of petroleum 
hydrocarbons existing initially in a gaseous phase in an underground reservoir 
gas t reatment facility gt f facility for the treatment of all gas associated gas and gas condensate produced  
by nostrum resulting in different products stabilised condensate lpg and dry gas  
for commercial sales phase i gtf consists of two trains with a combined treatment 
capacity of 17 billion cm of raw gas per year
gd rs the global depository receipts of nostrum oil  gas lp
general partner noggl in its capacity as general partner of nostrum oil  gas lp 
geology the study of rocks
geophysics the study the earth using physics and mathematics geophysics uses methods such  
as seismic surveying magnetic and gravity imaging to explore the subsurface
gj gigajoule
gj d gigajoules per day
government the government of kazakhstan
greenhouse gas a gas that contributes to the greenhouse effect by absorbing infrared radiation  
eg carbon dioxide
gross oil and gas wells  acres gross oil and gas wells or gross acres are the total number of wells or acres in  
which the group has an interest without regard to the size of that interest 
group nostrum oil  gas lp and as the context requires its direct and indirect  
consolidated subsidiaries 
89
nostrum oil  gas annual report 2013 
appendix h
hse health safety and environment
hydrocarbons compounds formed from the elements hydrogen h and carbon c which may  
be in solid liquid or gaseous form 
hydrocarbon reserves hydrocarbon reserves have been proved and are referred to as 3p 2p and 1p  
depending on the likelihood of commercial production from that field
i
ias international accounting standards
ifrs international financial reporting standards
independent director the independent directors of the general partner as defined in the articles of association 
of the general partner 
j
joint venture a joint venture is a set of trading entities who have agreed to act in concert to share  
the cost and rewards of exploring for and producing oil or gas from a permit
joule unit of energy used for measuring gas volumes
• 	 m e gajo ul e s 	  	 1 06
• 	 gigajo ul e s 	  	 1 09
• 	 ter r ajo ul e s 	  	 1 0 1 2
• 	 p e t ajo ul e s 	  	 1 0 1 5
k
kazakhstan the republic of kazakhstan 
kase kazakhstan stock exchange
kazmunaigas stateowned oil and gas company of kazakhstan
kazmunaigas exploration production  
kmg ep
onshore oil and gas exploration production subsidiary of kazmunaygas
kboe thousand barrels of oil equivalent
km kilometres
kyoto protocol the kyoto protocol to the united nations framework convention on climate change 
l
licence licence series mg no 253d oil issued to zhaikmunai llp by the government on  
26 may 1997 
licencing law the kazakhstan law “on licensing” no 214 dated 11 january 2007 as amended  
which came into effect on 9 august 2007 
liquids a sales product in liquid form produced as a result of further processing by the onshore 
plant for example condensate and lpg
lng liquefied natural gas comprises mainly methane
lpg liquefied petroleum gas comprises mainly propane and butane
listing rules the listing rules made by the financial services authority fsa under section 73a  
of the fsma 
london stock exchange or lse london stock exchange 
lpg liquefied petroleum gas the name given to the mix of propane and butane in their liquid state
glossary
continued
90
nostrum oil  gas annual report 2013  m
m metres
m3 cubic metre
m3d cubic metres per day
man –hours an hour regarded in terms of the amount of work that can be done by one person  
within this period
mbbls thousands of barrels of crude oil
mmbbls millions of barrels of oil
mj megajoules
mboe thousands of barrels of oil equivalent
mmboe millions of barrels of oil equivalent
mmcm millions of cubic metres
mep the kazakhstan ministry of environmental protection 
mint the kazakhstan ministry of industry and new technologies 
mog the ministry of oil and gas of kazakhstan the state’s central executive agency  
acting based upon its regulations approved by the resolution of the government  
no 254 dated 20 may 2010 which is currently the competent authority in oil and  
gas and the authorised oil and gas agency 
mmscfd million standard cubic feet of dry gas per day
mscf one thousand cubic feet
mtpa million tonnes per annum
multilateral well a well with several small branches laterals drilled out from the main well
n
nbk national bank of kazakhstan 
nostrum nostrum oil  gas lp the operating company of the group
nostrum oil  gas lp registered office  corporate headquarters
7th fl harbour court amsterdam symphony
lord street gustav mahlerplein 23b
douglas im1 4ln 1082 ms amsterdam
isle of man the netherlands
nostsrum oil  gas group  
limited noggl 
noggl
registered office  corporate headquarters
7th fl harbour court  amsterdam symphony
lord street  gustav mahlerplein 23b
douglas im1 4ln  1082 ms amsterdam
isle of man  the netherlands
o
operator the individual or company responsible for conducting oil and gas exploration 
development and production activities on an oil and gas lease or concession on its  
own behalf and if applicable for other working interest owners generally pursuant  
to the terms of a joint operating agreement or comparable agreement 
91
nostrum oil  gas annual report 2013 
appendix p
pa plugged and abandoned to place a cement plug into a dry hole or noneconomic well 
and abandon the well
partnership nostrum oil  gas lp
partnership act the partnership act 1909 of the isle of man 
petroleum hydrocarbons whether solid liquid or gaseous the proportion of different compounds 
in a petroleum find varies from discovery to discovery if a reservoir primarily contains  
light hydrocarbons it is described as a gas field if heavier hydrocarbons predominate  
it is called an oil field an oil field may feature free gas above the oil and contain a  
quantity of light hydrocarbons also called associated gas 
pj petajoule
pj a petajoules per annum
possible hydrocarbon reserves reserves less well defined by geological and geophysical control than probable 
hydrocarbon reserves and consisting of extensions to the proved hydrocarbon reserves 
and probable hydrocarbon reserves areas where so indicated by geophysical and 
geological studies note the probability generally assigned to these reserves would  
be 25 but may be higher or lower
prms 2007 petroleum resources management system which are a set of definitions and 
guidelines designed to provide a common reference for the international petroleum 
industry sponsored by the society for petroleum engineers the american association  
of petroleum geologists world petroleum council and the society for petroleum 
evaluation engineers 
processing processing of saleable product from hydrocarbons sourced from oil wells and gas wells
production permit the mining allotment annex to the licence issued by the competent authority to 
zhaikmunai llp
production phase the phase of operations where hydrocarbons are extracted using wells and a gathering 
system to carry gas to a central compressor station
production well a well that has been drilled for producing oil or gas or one that is capable of production 
once the producing structure and characteristics are determined
profit oil profit oil is the difference between cost oil and the total amount of crude oil produced 
each month which is shared between the state and zhaikmunai llp
prospective resources quantities of petroleum which are estimated on a given date to be potentially 
recoverable from undiscovered accumulations 
proven reserves 1p proven or proved reserves 1p are those reserves that to a high degree of certainty  
90 confidence are recoverable there is relatively little risk associated with these 
reserves proven developed reserves are reserves that can be recovered from existing 
wells with existing infrastructure and operating methods proven undeveloped reserves 
require development
proven plus probable reserves 2p proven plus probable reserves 2p are those reserves that analysis of geological and 
engineering data suggests are more likely than not to be recoverable there is at least  
a 50 probability that reserves recovered will exceed proven plus probable reserves
proven probable plus possible  
reserves 3p 
proven probable plus possible reserves 3p are those reserves that to a low degree of 
certainty 10 confidence are recoverable there is relatively high risk associated with 
these reserves
psa or production sharing agreement the contract for additional exploration production and production sharing of crude oil 
hydrocarbons in the chinarevskoye oil and gas condensate field in the westkazakhstan 
oblast no 81 dated october 31 1997 as amended between zhaikmunai llp and the 
competent authority currently mog representing the state
psa law kazakhstan law no 68iii “on production sharing agreements for constructing offshore 
petroleum operations” dated 8 july 2005 
q
q ib a qualified institutional buyer as defined in rule 144a under the securities act 
glossary
continued
92
nostrum oil  gas annual report 2013  r
recovery the second stage of hydrocarbon production during which an external fluid such  
as water or gas is injected into the reservoir to maintain reservoir pressure and  
displace hydrocarbons towards the wellbore
reservoir a porous and permeable underground formation containing a natural accumulation  
of producible oil andor gas that is confined by impermeable rock or water barriers  
and is individual and separate from other reservoirs
royalty an interest in an oil and gas property entitling the owner to a share of oil or gas 
production free of costs of production
ryder scott independent petroleum consultants ryder scott company lp headquartered at  
621 seventeenth street suite 1550 denver colorado 80293 usa 
s
sales gas natural gas that has been processed by gas plant facilities and meets the required 
specifications under gas sales agreements
scf standard cubic feet
sec the united states securities and exchange commission 
secondee a person who is transferred temporarily to alternative employment or seconded
securities act the united states securities act of 1933 as amended 
seismic the use of shock waves generated by controlled explosions of dynamite or other means 
to ascertain the nature and contour of underground geological structures 
shut in cease production from a well
sidetrack well a well or borehole that runs partly to one side of the original line of drilling
social infrastructure assets that accommodate social services ie hospitals schools community housing etc
spe society of petroleum engineers 
spud the commencement of drilling operations
stakeholder a person or entity who may affect be affected by or perceive themselves to be affected 
by an entity’s decisions or activities
state republic of kazakhstan 
state acceptance commission a state acceptance commission of the republic of kazakhstan is the competent body 
authorised to among other things confirm that permanent operations can commence  
for certain facilities including the gas treatment facility 
state share the share of hydrocarbon production due in cash or kind to the republic of kazakhstan 
under the psa
subsoil law
– old subsoil law the kazakhstan law “on subsoil and subsoil use” no 2828 dated 27 january 1996  
as amended recently replaced with the new subsoil law 
– new subsoil law the most recent kazakhstan law “on subsoil and subsoil use” no 291iv dated  
24 june 2010 as amended 
substitution the ability for zhaikmunai llp to elect to undertake upon satisfaction of certain 
conditions to be substituted for the issuer as issuer of the notes whereupon it will 
assume all of the obligations of the issuer under the notes 
suspended well a suspended well is not currently used for assessment or production and has been shut 
in it will either be returned to assessment or production or plugged and abandoned 
t
t akeover code the uk city code on takeovers and mergers 
tcf one trillion cubic feet
t enge or kzt the lawful currency of the republic of kazakhstan 
titleholder the titleholder is the party to whom a permit is granted by the government
tj terajoule
tonne metric tonne 
trillion 10 to the power of 12
93
nostrum oil  gas annual report 2013 
appendix u
uk corporate governance code set of principles of good corporate governance for listed companies promulgated  
by the uk financial reporting council 
ungg uralsk oil and gas explorations expedition the government of the kazakh soviet 
socialist republic decided in march 1960 to create a consortium uralskneftegazrazvedka 
for conducting oil and gas exploration in the uralsk region in the ‘60s the consortium  
was involved in more than 59 exploration projects in 1970 the consortium was renamed 
uralsk enlarged oilgas exploration expedition
us dollars or us the lawful currency of the united states of america 
w
well a hole drilled to test an unknown reservoir or to produce from a known reservoir
wellhead the wellhead includes the forged or cast steel fitting on top of a well welded or bolted  
to the top of the surface casing as well as casing heads tubing heads christmas tree 
stuffing box and pressure gauges
workover routine maintenance or remedial operations on a producing well in order to maintain 
restore or increase production
work program a schedule of works agreed between parties permit holders farminees and government 
contracted to be delivered in a defined time frame
water code the water code of kazakhstan no 481 dated 9 july 2003 as amended
wup or water use permit the permit granted by the relevant government authority with respect to water use 
pursuant to the water code 
z
z haikmunai llp corporate office  representative office
592 eurasia prospect  office 319
uralsk 090002  22 kurman batyr prospect
republic of kazakhstan  astana 010000
   republic of kazakhstan
glossary
continued
94
nostrum oil  gas annual report 2013  consolidated financial 
statements
year ended december 31 2013  
with independent auditors’ report
95
nostrum oil  gas annual report 2013 
financial statements 96
nostrum oil  gas annual report 2013  nostrum oil  gas lp  consolidated financial statements 
 
contents 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
independent auditors’ report 
 
consolidated financial statements 
 
consolidated statement of financial position  1 
consolidated statement of comprehensive loss  2 
consolidated statement of cash flows  3 
consolidated statement of changes in equity  4 
notes to consolidated financial statements   
1 general  5 
2 basis of preparation and consolidation  6 
3 changes in accounting policies and disclosure  7 
4 summary of significant accounting policies  10 
5 business combinations  18 
6 exploration and evaluation assets  19 
7 property plant and equipment  19 
8 advances for noncurrent assets  20 
9 inventories  21 
10 trade receivables  21 
11 prepayments and other current assets  21 
12 current and noncurrent investments  21 
13 cash and cash equivalents and restricted cash  21 
14 partnership capital  22 
15 borrowings  23 
16 abandonment and site restoration provision  24 
17 due to government of kazakhstan  24 
18 trade payables 25 
19 other current liabilities  25 
20 revenue  25 
21 cost of sales  25 
22 general and administrative expenses  26 
23 selling and transportation expenses  26 
24 finance costs  26 
25 other expenses  26 
26 income tax  27 
27 employee share option plan  27 
28 related party transactions  29 
29 contingent liabilities and commitments  29 
30 financial risk management objectives and policies 31 
31 events after the reporting period  34 
 
 
financial statements  financial statements nostrum oil  gas lp  consolidated financial statements 
consolidated statement of financial position 
as at december 31 2013 
janru muller 
the accounting policies and explanatory notes on pages 5 through 35  
are an integral part of these consolidated financial statements 
1 
in thousands of us dollars notes december 31 2013 december 31 2012 
assets 
noncurrent assets 
exploration and evaluation assets 6 20434 – 
goodwill 5 30386 – 
property plant and equipment 7 1330903 1222665 
restricted cash 13 4217 3652 
advances for noncurrent assets 8 10037 25278 
noncurrent investments 12 30000 – 
1425977 1251595 
current assets 
inventories 9 22085 24964 
trade receivables 10 66565 54004 
prepayments and other current assets 11 31192 24369 
income tax prepayment 5042 – 
current investments 12 25000 50000 
cash and cash equivalents 13 184914 197730 
334798 351067 
total assets 1760775 1602662 
equity and liabilities 
partnership capital and reserves 
partnership capital 14 350123 371147 
additional paidin capital 8126 6095 
retained earnings and reserves 474202 317862 
832451 695104 
noncurrent liabilities 
long term borrowings 15 621160 615742 
abandonment and site restoration provision 16 13874 11064 
due to government of kazakhstan 17 6021 6122 
deferred tax liability 26 152545 148932 
793600 781860 
current liabilities 
current portion of long term borrowings 15 7263 7152 
employee share option plan liability 27 12016 9788 
trade payables 18 58518 58390 
income tax payable 1232 11762 
current portion of due to government of kazakhstan 17 1031 1031 
other current liabilities 19 54664 37575 
134724 125698 
total equity and liabilities 1760775 1602662  nostrum oil  gas lp  consolidated financial statements 
consolidated statement of comprehensive income 
for the year ended december 31 2013 
the accounting policies and explanatory notes on pages 5 through 36 
are an integral part of these consolidated financial statements 
2 
in thousands of us dollars notes 2013 2012 
revenue 
revenue from export sales 765029 630412 
revenue from domestic sales 129985 106653 
20 895014 737065 
cost of sales 21 286222 238224 
gross profit 608792 498841 
general and administrative expenses 22 60449 64882 
selling and transport expenses 23 121674 103604 
finance costs 24 43615 46785 
foreign exchange lossgain net 636 776 
interest income 764 698 
other expense 25 25593 6612 
other income 4426 3940 
profit before income tax 362015 282372 
income tax expense 26 142496 120363 
profit for the year 219519 162009 
total comprehensive income for the year 219519 162009 
financial statements nostrum oil  gas lp  consolidated financial statements 
consolidated statement of cash flows 
for the year ended december 31 2013 
janru muller 
the accounting policies and explanatory notes on pages 5 through 36 
are an integral part of these consolidated financial statements 
3 
in thousands of us dollars notes 2013 2012 
cash flow from operating activities 
profit before income tax 362015 282372 
adjustments for 
depreciation depletion and amortization 21 22 120370 102632 
accrual of share option expenses 22 4430 2470 
finance costs 24 43615 46785 
interest income 764 698 
foreign exchange lossgain on investing and financing activities 48 745 
loss on disposal of property plant and equipment – 79 
operating profit before working capital changes 529714 432895 
changes in working capital 
change in inventories 2879 10446 
change in trade receivables 12561 41364 
change in prepayments and other current assets 6823 9190 
change in trade payables 5747 2673 
change in advances received 23 3094 
change in due to government of kazakhstan 1031 1030 
change in other current liabilities 8803 25316 
cash generated from operations 515211 390414 
income tax paid 154455 94173 
payments under employee share option plan 2202 4416 
net cash flows from operating activities 358554 291825 
cash flow from investing activities 
interest received 764 698 
purchase of property plant and equipment 201306 210283 
purchase of exploration and evaluation assets 5045 10089 
placement of noncurrent bank deposits 30000 – 
acquisition of probel  5 28433 – 
redemptionplacement of current bank deposits 25000 50000 
net cash used in investing activities 239020 269674 
cash flow from financing activities 
finance costs paid 49613 53735 
issue of notes 15 – 560000 
fees paid on arrangement notes and borrowings – 7259 
repayment of notes 15 – 357495 
premium paid for early repayment of notes – 38409 
transfer to restricted cash 565 576 
treasury shares purchasedsold 18993 7362 
distributions paid 63179 59498 
net cash used in  provided from financing activities 132350 50390 
effects of exchange rate changes on cash and cash equivalents – 204 
net decreaseincrease in cash and cash equivalents 12816 72337 
cash and equivalents at the beginning of the year 197730 125393 
cash and equivalents at the end of the year 184914 197730  nostrum oil  gas lp  consolidated financial statements 
consolidated statement of changes in equity 
for the year ended december 31 2013 
the accounting policies and explanatory notes on pages 5 through 36 
are an integral part of these consolidated financial statements 
4 
in thousands of us dollars notes 
partnership 
capital 
treasury 
capital 
additional 
paidin 
capital 
retained 
earnings 
and reserves total 
as at january 1 2012 373990 5787 1677 215351 585231 
profit for the year – – – 162009 162009 
total comprehensive income for 
the year – – – 162009 162009 
share issue 14 6884 6884 – – – 
sale of treasury capital – 2944 4418 – 7362 
distributions 
14 
– – – 59498 59498 
as at december 31 2012 380874 9727 6095 317862 695104 
profit for the year – – – 219519 219519 
total comprehensive income for 
the year – – – 219519 219519 
buyback of gdrs 
14 – 22165 – – 22165 
sale of treasury capital – 1141 2031 – 3172 
distributions 14 – – – 63179 63179 
as at december 31 2013 380874 30751 8126 474202 832451 
financial statements nostrum oil  gas lp consolidated financial statements 
 
notes to the consolidated financial statements 
 
for the year ended december 31 2013 
 
5 
1 general 
nostrum oil  gas lp is a limited partnership formed on august 29 2007 pursuant to the partnership act 1909 of the 
isle of man nostrum oil  gas lp is registered in the isle of man with registered number 295p 
the registered address of nostrum oil  gas lp is 7th floor harbour court lord street douglas isle of man im1 4ln 
these consolidated financial statements were authorized for issue by kaiuwe kessel chief executive officer of the 
general partner of nostrum oil  gas lp and by janru muller chief financial officer of the general partner of 
nostrum oil  gas lp on march 20 2014 
these consolidated financial statements include the results of the operations of nostrum oil  gas lp “partnership” 
and its wholly owned subsidiaries zhaikmunai netherlands bv formerly frans van der schoot bv zhaikmunai 
finance bv zhaikmunai international bv claydon industrial limited “claydon” jubilata investments limited 
“jubilata” zhaikmunai llp condensateholding llp “condensate” nostrum oil  gas coöperatief ua probel 
capital management nv and probel capital management uk ltd nostrum oil  gas lp and its subsidiaries are 
hereinafter referred to as “the group” the group’s operations comprise of a single operating segment and three 
exploration concessions and are primarily conducted through its oil and gas producing entity zhaikmunai llp located 
in kazakhstan the general partner of nostrum oil  gas lp is nostrum oil  gas group limited which is 
responsible for the management of the group note 14 the partnership does not have an ultimate controlling party 
zhaikmunai llp carries out its activities in accordance with the contract for additional exploration production and 
productionsharing of crude hydrocarbons in the chinarevskoye oil and gas condensate field the “contract” dated 
october 31 1997 between the state committee of investments of the republic of kazakhstan and zhaikmunai llp in 
accordance with the license mg no 253d for the exploration and production of hydrocarbons in chinarevskoye oil and 
gas condensate field 
on august 17 2012 zhaikmunai llp signed asset purchase agreements to acquire 100 of the subsoil use rights 
related to three oil and gas fields – rostoshinskoye darjinskoye and yuzhnogremyachinskoye – all located in the 
western kazakhstan region on march 1 2013 zhaikmunai llp has acquired the subsoil use rights related to these 
three oil and gas fields in kazakhstan following the signing of the respective supplementary agreements related thereto 
by the ministry of oil and gas of the republic of kazakhstan “mog” 
on december 30 2013 nostrum oil  gas coöperatief ua signed a purchase agreement to acquire 100 of probel 
capital management nv located in brussels belgium  
subsoil use rights terms 
the term of the chinarevskoye subsoil use rights originally included a 5year exploration period and a 25year 
production period the exploration period was initially extended for additional 4 years and then for further 2 years 
according to the supplements to the contract dated january 12 2004 and june 23 2005 respectively in accordance 
with the supplement dated june 5 2008 tournaisian north reservoir entered into production period as at january 1 
2007 following additional commercial discoveries during 2008 the exploration period under the chinarevskoye 
subsoil use rights other than for the tournaisian horizons was extended for an additional 3year period which expired 
on may 26 2011 a further extension to may 26 2014 was made under the supplement dated october 28 2013 the 
extensions to the exploration periods have not changed the chinarevskoye subsoil use rights term which expires in 
2031 
the contract for exploration and production of hydrocarbons from rostoshinskoye field dated february 8 2008 
originally included a 3year exploration period and a 12year production period on april 27 2009 the exploration 
period was extended so as to have a total duration of 6 years in january 2012 the mog made the decision to extend the 
exploration period until february 8 2015 and the corresponding supplementary agreement between mog and 
zhaikmunai llp was signed on august 9 2013 
the contract for exploration and production of hydrocarbons from darjinskoye field dated july 28 2006 originally 
included a 6year exploration period and a 19year production period on october 21 2008 the exploration period was 
extended for 6 months so as to expire on january 28 2013 on april 27 2009 the exploration period was extended until 
january 28 2015 upon receipt of the ownership rights zhaikmunai llp started the process of application for further 
extension of the exploration period 
  nostrum oil  gas lp consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
6 
the contract for exploration and production of hydrocarbons from yuzhnogremyachinskoye field dated july 28 2006 
originally included a 5year exploration period and a 20year production period on april 27 2009 the exploration 
period was extended until july 28 2012 on july 8 2011 the exploration period was further extended until july 28 
2014 upon receipt of the ownership rights the partnership started the process of application for further extension of the 
exploration period 
royalty payments 
zhaikmunai llp is required to make monthly royalty payments throughout the entire production period at the rates 
specified in the contract  
royalty rates depend on hydrocarbon recovery levels and the phase of production and can vary from 3 to 7 of 
produced crude oil and from 4 to 9 of produced natural gas royalty is accounted on gross basis 
government “profit share” 
zhaikmunai llp makes payments to the government of its “profit share” as determined in the contract the “profit 
share” depends on hydrocarbon production levels and varies from 10 to 40 of production after deducting royalties 
and reimbursable expenditures reimbursable expenditures include operating expenses costs of additional exploration 
and development costs government “profit share” is expensed as incurred and paid in cash government profit share is 
accounted on gross basis 
2 basis of preparation and consolidation 
basis of preparation 
these consolidated financial statements have been prepared in accordance with international financial reporting 
standards “ifrs” as issued by international accounting standards board “iasb” the consolidated financial 
statements have been prepared based on a historical cost basis except for certain financial instruments which are carried 
at fair value as stated in the accounting policies note 0 the consolidated financial statements are presented in 
us dollars and all values are rounded to the nearest thousands except when otherwise indicated 
the preparation of consolidated financial statements in conformity with ifrs requires the use of certain critical 
accounting estimates it also requires from management to exercise its judgment in the process of applying the 
partnerships accounting policies the areas involving a higher degree of judgment or complexity or areas where 
assumptions and estimates are significant to the consolidated financial statements are disclosed in note 0 
basis of consolidation 
the consolidated financial statements comprise the financial statements of the partnership and its subsidiaries as at 
december 31 2013 a subsidiary and a structured entity are consolidated from the date of acquisition being the date on 
which the group obtains control and continue to be consolidated until the date when such control ceases the financial 
statements of the subsidiaries are prepared for the same reporting period as the parent company using consistent 
accounting policies for all group entities all intragroup balances transactions unrealised gains and losses resulting 
from intragroup transactions and profit distributions are eliminated in full 
subsidiaries 
subsidiaries are all entities over which the group has the power to govern the financial and operating policies generally 
accompanying a shareholding of more than one half of the voting rights the existence and the effect of potential voting 
rights that are currently exercisable or convertible are considered when assessing whether the group controls another 
entity subsidiaries are fully consolidated from the date on which control is transferred to the group and continue to be 
consolidated until the date that such control ceases  
business combinations 
acquisitions of subsidiaries are included on the basis of the acquisition method the cost of acquisition is measured 
based on the consideration transferred at fair value the fair value of identifiable assets distributed and the fair value of 
liabilities incurred or assumed at the acquisition date ie the date at which control is obtained the excess of the costs 
of an acquired subsidiary over the net of the amounts assigned to identifiable assets acquired and liabilities incurred or 
assumed is capitalized as goodwill acquisition related costs are expensed when incurred in the period they arise or the 
service is received 
  
financial statements nostrum oil  gas lp consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
7 
3 changes in accounting policies and disclosures 
reclassification of comparative information 
the group reconsidered the classification of employee share option plan liabilities in the consolidated financial 
statements as at december 31 2012 employee share option plan liabilities were classified as noncurrent the group 
reclassified employee share option liabilities to current liabilities as at december 31 2012 in accordance with the 
expected timing of settlement of these liabilities 
 as at december 31 2012 
in thousands of us dollars 
initial 
presentation 
reclassificati
on amount 
adjusted 
presentation 
    
consolidated statement of financial position    
employee share option plan liability current – 9788 9788 
total current liabilities 115910 9788 125698 
    
employee share option plan liability noncurrent 9788 9788 – 
total noncurrent liabilities 791648 9788 781860 
corresponding reclassification of employee share option liabilities to current liabilities as at january 1 2012 would 
result in following 
 as at january 1 2012 
in thousands of us dollars 
initial 
presentation 
reclassificati
on amount 
adjusted 
presentation 
    
consolidated statement of financial position    
employee share option plan liability current – 11734 11734 
total current liabilities 109535 11734 121269 
    
employee share option plan liability noncurrent 11734 11734 – 
total noncurrent liabilities 611414 11734 599680 
in addition the group reclassified the amount of withholding tax for the year ended december 31 2012 from finance 
costs to general and administrative expenses in order to comply with the presentation in the consolidated financial 
statements as at december 31 2013 and for the year then ended reclassifications do not affect the financial indicators 
of the group 
 year ended december 31 2012 
in thousands of us dollars 
initial 
presentation 
reclassificati
on amount 
adjusted 
presentation 
    
consolidated statement of comprehensive income    
general and administrative expenses 61549 3333 64882 
finance costs 50118 3333 46785 
 111667 – 111667 
new standards interpretations and amendments thereof adopted by the group 
the accounting policies adopted are consistent with those of the previous financial year except for the following 
amendments to ifrs effective as of january 1 2013 
 ifrs 7 financial instruments disclosures – offsetting financial assets and financial liabilities – 
amendments to ifrs 7 
 ifrs 10 consolidated financial statements and ias 27 separate financial statements 
 ifrs 11 joint arrangements and ias 28 investments in associates and joint ventures 
 ifrs 12 disclosure of interests in other entities 
 ifrs 13 fair value measurement  
 ias 19 employee benefits revised 2011  nostrum oil  gas lp consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
8 
improvements to ifrss – 20092011 cycle 
 ifrs 1 – repeat application of ifrs 1 
 ifrs 1 – borrowing costs 
 ias 1 – clarification of the requirement for comparative information 
 ias 16 – classification of servicing equipment 
 ias 32 – tax effects of distributions to holders of equity instruments 
 ias 34 – interim financial reporting and segment information for total assets and liabilities 
the nature and the impact of each new standard andor amendment are described below 
ifrs 7 financial instruments disclosures offsetting financial assets and financial liabilities – amendments to 
ifrs 7 
the amendment requires an entity to disclose information about rights to setoff financial instruments and related 
arrangements eg collateral agreements the disclosures would provide users with information that is useful in 
evaluating the effect of netting arrangements on an entity’s financial position the new disclosures are required for all 
recognised financial instruments that are set off in accordance with ias 32 the disclosures also apply to recognised 
financial instruments that are subject to an enforceable master netting arrangement or similar agreement irrespective of 
whether the financial instruments are set off in accordance with ias 32 as the group is not setting off financial 
instruments in accordance with ias 32 and does not have relevant offsetting arrangements the amendment does not 
have an impact on the group 
ifrs 10 consolidated financial statements and ias 27 separate financial statements 
ifrs 10 establishes a single control model that applies to all entities including structured entities ifrs 10 replaces the 
parts of previously existing ias 27 consolidated and separate financial statements that dealt with consolidated 
financial statements and sic12 consolidation – structured entities ifrs 10 changes the definition of control such that 
an investor controls an investee when it is exposed or has rights to variable returns from its involvement with the 
investee and has the ability to affect those returns through its power over the investee to meet the definition of control 
in ifrs 10 all three criteria must be met including a an investor has power over an investee b the investor has 
exposure or rights to variable returns from its involvement with the investee and c the investor has the ability to use 
its power over the investee to affect the amount of the investor’s returns ifrs 10 had no impact on the consolidation of 
investments held by the group 
ifrs 11 joint arrangements and ias 28 investments in associates and joint ventures 
ifrs 11 replaces ias 31 interests in joint ventures and sic13 jointlycontrolled entities – nonmonetary 
contributions by venturers ifrs 11 removes the option to account for jointly controlled entities “jces” using 
proportionate consolidation instead jces that meet the definition of a joint venture under ifrs 11 must be accounted 
for using the equity method as the group does not have jces ifrs 11 had no impact on the group 
ifrs 12 disclosure of interests in other entities 
ifrs 12 sets out the requirements for disclosures relating to an entity’s interests in subsidiaries joint arrangements 
associates and structured entities none of these disclosure requirements are applicable for consolidated financial 
statements of the group 
ifrs 13 fair value measurement 
ifrs 13 establishes a single source of guidance under ifrs for all fair value measurements ifrs 13 does not change 
when an entity is required to use fair value but rather provides guidance on how to measure fair value under ifrs 
ifrs 13 defines fair value as an exit price as a result of the guidance in ifrs 13 the group reassessed its policies for 
measuring fair values in particular its valuation inputs such as nonperformance risk for fair value measurement of 
liabilities ifrs 13 also requires additional disclosures 
 
financial statements nostrum oil  gas lp consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
9 
application of ifrs 13 has not materially impacted the fair value measurements of the group additional disclosures 
where required are provided in the individual notes relating to the assets and liabilities whose fair values were 
determined 
in addition to the abovementioned amendments and new standards ifrs 1 firsttime adoption of international 
financial reporting standards was amended with effect for reporting periods starting on or after january 1 2013 the 
group is not a firsttime adopter of ifrs therefore this amendment is not relevant to the group 
ias 19 employee benefits revised 2011 
ias 19 revised 2011 includes a number of amendments to the accounting for defined benefit plans including 
actuarial gains and losses that are now recognised in other comprehensive income and permanently excluded from 
profit and loss expected returns on plan assets that are no longer recognised in profit or loss instead there is a 
requirement to recognise interest on the net defined benefit liability asset in profit or loss calculated using the 
discount rate used to measure the defined benefit obligation and unvested past service costs are now recognised in 
profit or loss at the earlier of when the amendment occurs or when the related restructuring or termination costs are 
recognised other amendments include new disclosures such as quantitative sensitivity disclosures the amendment 
had no impact on the group’s financial position or performance 
ias 1 presentation of items of other comprehensive income – amendments to ias 1 
the amendments to ias 1 introduce a grouping of items presented in other comprehensive income items that could be 
reclassified or recycled to profit or loss at a future point in time eg net gain on hedge of net investment exchange 
differences on translation of foreign operations net movement on cash flow hedges and net loss or gain on available
forsale financial assets now have to be presented separately from items that will never be reclassified eg actuarial 
gains and losses on defined benefit plans and revaluation of land and buildings the amendment had no impact on the 
group’s financial position or performance 
ias 1 clarification of the requirement for comparative information amendment 
the amendment to ias 1 clarifies the difference between voluntary additional comparative information and the 
minimum required comparative information an entity must include comparative information in the related notes to the 
financial statements when it voluntarily provides comparative information beyond the minimum required comparative 
period the additional voluntarily comparative information does not need to be presented in a complete set of financial 
statements 
the opening statement of financial position known as the ‘third balance sheet’ must be presented when an entity 
applies an accounting policy retrospectively makes retrospective restatements or reclassifies items in its financial 
statements provided any of those changes has a material effect on the statement of financial position at the beginning of 
the preceding period the amendment clarifies that a third balance sheet does not have to be accompanied by 
comparative information in the related notes the amendment did not have an impact on the consolidated financial 
statements of the group 
ias 32 tax effects of distributions to holders of equity instruments amendment 
the amendment to ias 32 financial instruments presentation removes existing income tax requirements from ias 32 
and requires entities to apply the requirements in ias 12 to any income tax arising from distributions to equity holders 
the amendment did not have an impact on the consolidated financial statements of the group 
ias 34 interim financial reporting and segment information for total assets and liabilities amendment 
the amendment clarifies the requirements in ias 34 relating to segment information for total assets and liabilities for 
each reportable segment to enhance consistency with the requirements in ifrs 8 operating segments total assets and 
liabilities for a reportable segment need to be disclosed only when the amounts are regularly provided to the chief 
operating decision maker and there has been a material change in the total amount disclosed in the entity’s previous 
annual consolidated financial statements for that reportable segment the group provides this disclosure as total 
segment assets were reported to the chief operating decision maker codm the amendment did not have an impact 
on the disclosures in the consolidated financial statements for the group 
  nostrum oil  gas lp consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
10 
standards issued but not yet effective 
the standards and interpretations that are issued but not yet effective up to the date of issuance of the group’s 
consolidated financial statements are disclosed below the group intends to adopt these standards if applicable when 
they become effective 
ifrs 9 financial instruments 
ifrs 9 as issued reflects the first phase of the iasb’s work on the replacement of ias 39 and applies to classification 
and measurement of financial assets and financial liabilities as defined in ias 39 the standard was initially effective 
for annual periods beginning on or after january 1 2013 but amendments to ifrs 9 mandatory effective date of ifrs 
9 and transition disclosures issued in december 2011 moved the mandatory effective date to january 1 2015 in 
subsequent phases the iasb is addressing hedge accounting and impairment of financial assets the adoption of the 
first phase of ifrs 9 will not have an effect on the classification and measurement of the group’s financial assets and 
financial liabilities the group will quantify the effect in conjunction with the other phases when the final standard 
including all phases is issued 
amendments to ifrs 10 ifrs12 and ias 27 investment entities 
these amendments are effective for annual periods beginning on or after january 1 2014 and provide an exception to 
the consolidation requirement for entities that meet the definition of an investment entity under ifrs 10 the exception 
to consolidation requires investment entities to account for subsidiaries at fair value through profit or loss it is not 
expected that this amendment would be relevant to the group since none of the entities in the group would qualify to 
be an investment entity under ifrs 10 
ias 32 offsetting financial assets and financial liabilities – amendments to ias 32 
these amendments clarify the meaning of “currently has a legally enforceable right to setoff” and the criteria for non
simultaneous settlement mechanisms of clearing houses to qualify for offsetting these are effective for annual periods 
beginning on or after january 1 2014 these amendments are not expected to be relevant to the group 
ifric interpretation 21 levies ifric 21 
ifric 21 clarifies that an entity recognises a liability for a levy when the activity that triggers payment as identified by 
the relevant legislation occurs for a levy that is triggered upon reaching a minimum threshold the interpretation 
clarifies that no liability should be anticipated before the specified minimum threshold is reached ifric 21 is effective 
for annual periods beginning on or after january 1 2014 the group does not expect that ifric 21 will have material 
financial impact on its future consolidated financial statements 
amendment to ias 39 novation of derivatives and continuation of hedge accounting 
these amendments provide relief from discontinuing hedge accounting when novation of a derivative designated as a 
hedging instrument meets certain criteria these amendments are effective for annual periods beginning on or after 
january 1 2014 the group has not novated its derivatives during the current period however these amendments 
would be considered for future novations if any 
4 summary of significant accounting policies 
significant accounting judgments estimates and assumptions 
the key assumptions concerning the future and other key sources of estimation uncertainty at the statement of financial 
position date that have a significant risk of causing a material change to the carrying amounts of assets and liabilities 
are discussed below 
oil and gas reserves 
oil and gas reserves are a material factor in the group’s computation of depreciation depletion and amortization 
the ”dda” the group estimates its reserves of oil and gas in accordance with the methodology of the society of 
petroleum engineers the “spe” in estimating its reserves under spe methodology the group uses longterm 
planning prices which are also used by management to make investment decisions about development of a field using 
planning prices for estimating proved reserves removes the impact of the volatility inherent in using yearend spot 
prices management believes that longterm planning price assumptions are more consistent with the longterm nature 
of the upstream business and provide the most appropriate basis for estimating oil and gas reserves all reserve 
estimates involve some degree of uncertainty the uncertainty depends mainly on the amount of reliable geological and 
engineering data available at the time of the estimate and the interpretation of this data  
financial statements nostrum oil  gas lp consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
11 
the relative degree of uncertainty can be conveyed by placing reserves into one of two principal classifications either 
proved or unproved proved reserves are more certain to be recovered than unproved reserves and may be further sub
classified as developed and undeveloped to denote progressively increasing uncertainty in their recoverability 
estimates are reviewed and revised annually  
revisions occur due to the evaluation or reevaluation of already available geological reservoir or production data 
availability of new data or changes to underlying price assumptions reserve estimates may also be revised due to 
improved recovery projects changes in production capacity or changes in development strategy proved developed 
reserves are used to calculate the unit of production rates for dda  
fair value of financial instruments 
where the fair value of financial assets and financial liabilities recorded in the statement of financial position cannot be 
derived from active markets they are determined using valuation techniques including the discounted cash flows model 
the inputs to these models are taken from observable markets where possible but where this is not feasible a degree of 
judgment is required in establishing fair values the judgments include considerations of inputs such as liquidity risk 
credit risk and volatility changes in assumptions about these factors could affect the reported fair value of financial 
instruments 
abandonment and site restoration provision 
the group estimates future dismantlement and site restoration costs for oil and gas properties with reference to the 
estimates provided from either internal or external engineers after taking into consideration the anticipated method of 
dismantlement and the extent of site restoration required in accordance with current legislation and industry practice 
the amount of the provision is the present value of the estimated expenditures expected to be required to settle the 
obligation adjusted for expected inflation and discounted at applicable rate the group reviews site restoration 
provisions at each date of financial position and adjusts it to reflect the current best estimate in accordance with ifric 1 
changes in existing decommissioning restoration and similar liabilities estimating the future closure costs involves 
significant estimates and judgments by management significant judgments in making such estimates include estimate 
of discount rate and timing of cash flow the management made its estimate based on the assumption that cash flow 
will take place at the expected end of the subsoil use rights  
management of the group believes that the interest rates on its debt financing shall provide best estimates of applicable 
discount rate the discount rate shall be applied to the nominal amounts the managements expect to spend on site 
restoration in the future the group estimates future well abandonment cost using current year prices and the average 
longterm inflation rate 
the long term inflation and discount rates used to determine the balance sheet obligation at december 31 2013 and 
2012 were 7 and 10 respectively movements in the provision for decommissioning liability are disclosed in 
note 16 
taxation 
uncertainties exist with respect to the interpretation of complex tax regulations changes in tax laws and the amount 
and timing of future taxable income given the wide range of international business relationships and the longterm 
nature and complexity of existing contractual agreements differences arising between the actual results and the 
assumptions made or future changes to such assumptions could necessitate future adjustments to tax bases of income 
and expense already recorded the group establishes provisions based on reasonable estimates for possible 
consequences of audits by the tax authorities of the respective counties in which it operates the amount of such 
provisions is based on various factors such as experience of previous tax audits and differing interpretations of tax 
regulations by the group and the responsible tax authority such differences in interpretation may arise for a wide 
variety of issues depending on the conditions prevailing in the respective domicile of the group companies 
foreign currency translation 
each entity in the group determines its own functional currency and items included in the consolidated financial 
statements of each entity are measured using that functional currency the functional currency of the partnership and 
each of its subsidiaries is the united states dollar the “us dollar” or “us” except for condensate functional 
currency of which is kazakhstani tenge the “tenge” 
  nostrum oil  gas lp consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
12 
transactions and balances denominated in foreign currencies 
transactions in foreign currencies are initially recorded by the group at their respective functional currency rates 
prevailing at the date of the transaction monetary assets and liabilities denominated in foreign currencies are 
retranslated at the functional currency spot rate of exchange ruling at the reporting date all differences are taken to the 
profit or loss nonmonetary items that are measured in terms of historical cost in a foreign currency are translated 
using the exchange rates as at the dates of the initial transactions nonmonetary items measured at fair value in a 
foreign currency are translated using the exchange rates at the date when the fair value is determined 
business combinations and goodwill 
business combinations are accounted for using the acquisition method the cost of an acquisition is measured as the 
aggregate of the consideration transferred measured at acquisition date fair value and the amount of any non
controlling interest “nci” in the acquiree for each business combination the group elects whether to measure nci 
in the acquiree at fair value or at the proportionate share of the acquiree’s identifiable net assets acquisition related 
costs are expensed as incurred and included in administrative expenses 
when the group acquires a business it assesses the assets and liabilities assumed for appropriate classification and 
designation in accordance with the contractual terms economic circumstances and pertinent conditions as at the 
acquisition date this includes the separation of embedded derivatives in host contracts by the acquiree those acquired 
petroleum reserves and resources that can be reliably measured are recognised separately in the assessment of fair 
values on acquisition other potential reserves resources and rights for which fair values cannot be reliably measured 
are not recognised separately but instead are subsumed in goodwill  
if the business combination is achieved in stages any previously held equity interest is remeasured at its acquisition 
date fair value and any resulting gain or loss is recognised in the statement of profit or loss and other comprehensive 
income it is then considered in the determination of goodwill any contingent consideration to be transferred by the 
acquirer will be recognised at fair value at the acquisition date contingent consideration classified as an asset or 
liability that is a financial instrument and within the scope of ias 39 financial instruments recognition and 
measurement is measured at fair value with changes in fair value recognised either in the statement of profit or loss or 
as a change to other comprehensive income if the contingent consideration is not within the scope of ias 39 it is 
measured in accordance with the appropriate ifrs contingent consideration that is classified as equity is not re
measured and subsequent settlement is accounted for within equity 
goodwill is initially measured at cost being the excess of the aggregate of the consideration transferred and the amount 
recognised for nci over the fair value of the identifiable net assets acquired and liabilities assumed if the fair value of 
the identifiable net assets acquired is in excess of the aggregate consideration transferred bargain purchase before 
recognising a gain the group reassesses whether it has correctly identified all of the assets acquired and all of the 
liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date if 
the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration 
transferred then the gain is recognised in the statement of profit or loss and other comprehensive income 
after initial recognition goodwill is measured at cost less any accumulated impairment losses for the purpose of 
impairment testing goodwill acquired in a business combination is from the acquisition date allocated to each of the 
group’s cgus that are expected to benefit from the combination irrespective of whether other assets or liabilities of 
the acquiree are assigned to those units  
where goodwill forms part of a cash generating unit “cgu” and part of the operation in that unit is disposed of the 
goodwill associated with the disposed operation is included in the carrying amount of the operation when determining 
the gain or loss on disposal goodwill disposed of in these circumstances is measured based on the relative values of the 
disposed operation and the portion of the cgu retained 
exploration expenditure 
geological and geophysical exploration costs are charged to profit or loss as incurred costs directly associated with 
exploration wells are capitalized within exploration and evaluation assets until the drilling of the well is complete and 
the results have been evaluated these costs include employee remuneration and materials and fuel used rig costs and 
payments made to contractors and asset retirement obligation fees if hydrocarbons are found and subject to further 
appraisal activity eg the drilling of additional wells it is probable that they can be commercially developed the costs 
continue to be carried as an asset while sufficientcontinued progress is made in assessing the commerciality of the 
hydrocarbons 
all such carried costs are subject to technical commercial and management review at least once a year to confirm the 
continued intent to develop or otherwise extract value from the discovery when this is no longer the case the costs are 
written off the exploration expenditure expensed to profit or loss during 2013 amounted to us 3810 thousand 2012 
nil 
financial statements nostrum oil  gas lp consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
13 
subsoil use rights and acquisition costs are initially capitalised in exploration and evaluation assets subsoil use rights 
acquisition costs are reviewed at each reporting date to confirm that there is no indication that the carrying amount 
exceeds the recoverable amount this review includes confirming that exploration drilling is still under way or firmly 
planned or that it has been determined or work is under way to determine that the discovery is economically viable 
based on a range of technical and commercial considerations and sufficient progress is being made on establishing 
development plans and timing if no future activity is planned or the subsoil use rights have been relinquished or has 
expired the carrying value of the subsoil use rights acquisition costs is written off through profit or loss upon 
recognition of proved reserves and internal approval for development the relevant expenditure is transferred to oil and 
gas properties 
oil and gas properties 
expenditure on the construction installation or completion of infrastructure facilities such as treatment facilities 
pipelines and the drilling of development wells is capitalized within property plant and equipment as oil and gas 
properties the initial cost of an asset comprises its purchase price or construction cost any costs directly attributable to 
bringing the asset into operation and the initial estimate of decommissioning obligation if any the purchase price or 
construction cost is the aggregate amount paid and the fair value of any other consideration given to acquire the asset 
when a development project moves into the production stage the capitalisation of certain constructiondevelopment 
costs ceases and costs are either regarded as part of the cost of inventory or expensed except for costs which qualify for 
capitalisation relating to oil and gas property asset additions improvements or new developments 
all capitalized costs of oil and gas properties are amortized using the unitofproduction method based on estimated 
proved developed reserves of the field except the group depreciates its oil pipeline and oil loading terminal on a 
straight line basis over the life of the subsoil use rights in the case of assets that have a useful life shorter than the 
lifetime of the field the straight line method is applied 
oil and gas reserves 
proved oil and gas reserves are estimated quantities of commercially viable hydrocarbons which existing geological 
geophysical and engineering data show to be recoverable in future years from known reservoirs 
the group uses the reserve estimates provided by an independent appraiser on an annual basis to assess the oil and gas 
reserves of its oil and gas fields these reserve quantities are used for calculating the unit of production depreciation 
rate as it reflects the expected pattern of consumption of future economic benefits by the group 
other properties 
all other property plant and equipment are stated at historical cost less accumulated depreciation and impairment 
historical cost includes expenditures that are directly attributable to the acquisition of the items subsequent costs are 
included in the assets carrying amount or recognized as a separate asset as appropriate only when it is probable that 
future economic benefits associated with the item will flow to the group and the cost of the item can be measured 
reliably all other repairs and maintenance are charged to the profit or loss during the year in which they are incurred 
depreciation is calculated on a straight–line basis over the estimated useful lives of the assets as follows 
 years 
   
buildings and constructions 715 
vehicles 8 
machinery and equipment 313 
other 310 
impairment of nonfinancial assets 
the group assesses assets or groups of assets for impairment whenever events or changes in circumstances indicate that 
the carrying value of an asset may not be recoverable individual assets are grouped for impairment assessment 
purposes at the lowest level at which there are identifiable cash inflows that are largely independent of the cash flows of 
other groups of assets if any such indication of impairment exists or when annual impairment testing for an asset group 
is required the group makes an estimate of its recoverable amount an asset group’s recoverable amount is the higher 
of its fair value less costs of disposal and its value in use where the carrying amount of an asset group exceeds its 
recoverable amount the asset group is considered impaired and is written down to its recoverable amount in assessing 
value in use the estimated future cash flows are adjusted for the risks specific to the asset group and are discounted to 
their present value using a pretax discount rate that reflects current market assessments of the time value of money   nostrum oil  gas lp consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
14 
an assessment is made at each reporting date as to whether there is any indication that previously recognized 
impairment losses may no longer exist or may have decreased if such indication exists the recoverable amount is 
estimated a previously recognized impairment loss is reversed only if there has been a change in the estimates used to 
determine the asset’s recoverable amount since the last impairment loss was recognized if that is the case the carrying 
amount of the asset is increased to its recoverable amount that increased amount cannot exceed the carrying amount 
that would have been determined net of depreciation had no impairment loss been recognized for the asset in prior 
years such reversal is recognized in the profit or loss  
impairment losses of continuing operations including impairment of inventories are recognised in profit or loss in 
those expense categories consistent with the function of the impaired asset 
after such a reversal the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying 
amount less any residual value on a systematic basis over its remaining useful life 
goodwill 
goodwill is tested for impairment annually as at december 31 and when circumstances indicate that the carrying value 
may be impaired impairment is determined for goodwill by assessing the recoverable amount of each cgu or group 
of cgus to which the goodwill relates when the recoverable amount of the cgu is less than its carrying amount an 
impairment loss is recognised impairment losses relating to goodwill cannot be reversed in future periods 
borrowing costs 
the group capitalizes borrowing costs on qualifying assets assets qualifying for borrowing costs capitalization include 
all assets under construction that are not being depreciated depleted or amortized provided that work is in progress at 
that time qualifying assets mostly include wells and other operations field infrastructure under construction 
capitalized borrowing costs are calculated by applying the capitalization rate to the expenditures on qualifying assets 
the capitalization rate is the weighted average of the borrowing costs applicable to the group’s borrowings that are 
outstanding during the period  
inventories 
inventories are stated at the lower of cost or net realizable value “nrv” cost of oil gas condensate and liquefied 
petroleum gas “lpg” is determined on the weightedaverage method based on the production cost including the 
relevant expenses on depreciation depletion and impairment and overhead costs based on production volume net 
realizable value is the estimated selling price in the ordinary course of business less selling expenses 
provisions 
provisions are recognized when the group has a present obligation legal or constructive as a result of a past event it is 
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a 
reliable estimate of the amount of the obligation can be made 
abandonment and site restoration decommissioning 
provision for decommissioning is recognized in full on a discounted cash flow basis when the group has an obligation 
to dismantle and remove a facility or an item of plant and to restore the site on which it is located and when a 
reasonable estimate of that provision can be made the amount of the obligation is the present value of the estimated 
expenditures expected to be required to settle the obligation adjusted for expected inflation and discounted using 
average longterm interest rates for emerging market debt adjusted for risks specific to the kazakhstan market the 
unwinding of the discount related to the obligation is recorded in finance costs a corresponding amount equivalent to 
the provision is also recognized as part of the cost of the related oil and gas properties this asset is subsequently 
depreciated as part of the capital costs of the oil and gas properties on a unitofproduction basis  
 
  
financial statements nostrum oil  gas lp consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
15 
changes in the measurement of an existing decommissioning liability that result from changes in the estimated timing 
or amount of the outflow of resources embodying economic benefits required to settle the obligation or changes to the 
discount rate 
a are added to or deducted from the cost of the related asset in the current period if deducted from the cost of the 
asset the amount deducted shall not exceed its carrying amount if a decrease in the provision exceeds the 
carrying amount of the asset the excess is recognized immediately in the profit or loss and 
b if the adjustment results in an addition to the cost of an asset the group considers whether this is an indication 
that the new carrying amount of the asset may not be fully recoverable if it is such an indication the group tests 
the asset for impairment by estimating its recoverable amount and accounts for any impairment loss in 
accordance with ias 36 
financial assets 
initial recognition and measurement 
financial assets within the scope of ias 39 are classified as financial assets at fair value through profit or loss loans 
and receivables heldtomaturity investments availableforsale financial assets or as derivatives designated as 
hedging instruments in an effective hedge as appropriate the group determines the classification of its financial assets 
at initial recognition 
all financial assets are recognised initially at fair value plus in the case of investments not at fair value through profit 
or loss directly attributable transaction costs 
purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or 
convention in the marketplace regular way trades are recognised on the trade date ie the date that the group 
commits to purchase or sell the asset  
the group’s financial assets include cash and shortterm deposits trade and other receivables 
loans and receivables 
loans and receivables are nonderivative financial assets with fixed or determinable payments that are not quoted in an 
active market after initial measurement such financial assets are subsequently measured at amortised cost using the 
effective interest rate method eir less impairment amortised cost is calculated by taking into account any discount 
or premium on acquisition and fee or costs that are an integral part of the eir 
the eir amortisation is included in finance income in the statement of comprehensive income the losses arising from 
impairment are recognised in the statement of comprehensive income in finance costs  
accounts receivable 
accounts receivables are recognized and carried at original invoice amount less an allowance for any uncollectible 
amounts an estimate for uncollectible amounts is made when collection of the full amount is no longer probable these 
estimates are reviewed periodically and as adjustments become necessary they are reported as expense credit in the 
period in which they become known 
derecognition 
a financial asset or where applicable a part of a financial asset or part of a group of similar financial assets is 
derecognized when 
 the rights to receive cash flows from the asset have expired 
 the group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the 
received cash flows in full without material delay to a third party under a ‘passthrough’ arrangement; and either 
a the group has transferred substantially all the risks and rewards of the asset or b the group has neither 
transferred nor retained substantially all the risks and rewards of the asset but has transferred control of the 
asset 
when the group has transferred its rights to receive cash flows from an asset or has entered into a passthrough 
arrangement and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred 
control of the asset the asset is recognized to the extent of the group’s continuing involvement in the asset 
in that case the group also recognizes an associated liability the transferred asset and the associated liability are 
measured on a basis that reflects the rights and obligations that the group has retained  nostrum oil  gas lp consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
16 
continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the 
original carrying amount of the asset and the maximum amount of consideration that the group could be required to 
repay 
impairment of financial assets 
the group assesses at each reporting date whether there is any objective evidence that a financial asset or a group of 
financial assets is impaired a financial asset or a group of financial assets is deemed to be impaired if and only if 
there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition 
of the asset an incurred ‘loss event’ and that loss event has an impact on the estimated future cash flows of the 
financial asset or the group of financial assets that can be reliably estimated  
evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant 
financial difficulty default or delinquency in interest or principal payments the probability that they will enter 
bankruptcy or other financial reorganization and where observable data indicate that there is a measurable decrease in 
the estimated future cash flows such as changes in arrears or economic conditions that correlate with defaults 
financial assets carried at amortized cost 
for financial assets carried at amortized cost the group first assesses individually whether objective evidence of 
impairment exists individually for financial assets that are individually significant or collectively for financial assets 
that are not individually significant if the group determines that no objective evidence of impairment exists for an 
individually assessed financial asset whether significant or not it includes the asset in a group of financial assets with 
similar credit risk characteristics and collectively assesses them for impairment assets that are individually assessed for 
impairment and for which an impairment loss is or continues to be recognized are not included in a collective 
assessment of impairment 
if there is objective evidence that an impairment loss has incurred the amount of the loss is measured as the difference 
between the asset’s carrying amount and the present value of estimated future cash flows excluding future expected 
credit losses that have not yet been incurred the present value of the estimated future cash flows is discounted at the 
financial assets original effective interest rate if a loan has a variable interest rate the discount rate for measuring any 
impairment loss is the current effective interest rate 
the carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is 
recognized in the profit or loss interest income continues to be accrued on the reduced carrying amount and is accrued 
using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss the 
interest income is recorded as part of finance income in the profit or loss loans together with the associated allowance 
are written off when there is no realistic prospect of future recovery and all collateral has been realized or has been 
transferred to the group if in a subsequent year the amount of the estimated impairment loss increases or decreases 
because of an event occurring after the impairment was recognized the previously recognized impairment loss is 
increased or reduced by adjusting the allowance account if a future writeoff is later recovered the recovery is credited 
to finance costs in the profit or loss 
financial liabilities 
initial recognition and measurement 
financial liabilities within the scope of ias 39 are classified as financial liabilities at fair value through profit or loss 
loans and borrowings or as derivatives designated as hedging instruments in an effective hedge as appropriate the 
group determines the classification of its financial liabilities at initial recognition all financial liabilities are recognized 
initially at fair value and in the case of loans and borrowings net of directly attributable transaction costs 
the group’s financial liabilities include trade and other payables and borrowings 
subsequent measurement 
after initial recognition interest bearing borrowings are subsequently measured at amortized cost using the effective 
interest rate method “eir” gains and losses are recognized in the profit or loss when the liabilities are derecognized 
as well as through the eir amortization process 
amortized cost is calculated by taking into account any discount or premium on acquisition and fee or costs that are an 
integral part of the eir the eir amortization is included in finance cost in the profit or loss 
 
financial statements nostrum oil  gas lp consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
17 
derecognition 
a financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires when 
an existing financial liability is replaced by another from the same lender on substantially different terms or the terms 
of an existing liability are substantially modified such an exchange or modification is treated as a derecognition of the 
original liability and the recognition of a new liability and the difference in the respective carrying amounts is 
recognized in the profit or loss 
offsetting of financial instruments 
financial assets and financial liabilities are offset and the net amount reported in the statement of financial position if 
and only if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle 
on a net basis or to realize the assets and settle the liabilities simultaneously 
fair value of financial instruments 
the fair value of financial instruments that are traded in active markets at each reporting date is determined by reference 
to quoted market prices or dealer price quotations bid price for long positions and ask price for short positions 
without any deduction for transaction costs 
for financial instruments not traded in an active market the fair value is determined using appropriate valuation 
techniques such techniques may include using recent arm’s length market transactions; reference to the current fair 
value of another instrument that is substantially the same discounted cash flow analysis or other valuation models 
an analysis of fair values of financial instruments and further details as to how they are measured are provided in 
note 30 
derivative financial instruments and hedging 
the group uses a hedging contract for oil export sales to cover part of its risks associated with oil price fluctuations 
such derivative financial instruments are initially recognized at fair value on the date on which a derivative contract is 
entered into and are subsequently remeasured at fair value derivatives are carried as assets when the fair value is 
positive and as liabilities when the fair value is negative 
any gains or losses arising from changes in fair value of derivatives during the year that do not qualify for hedge 
accounting are taken directly to profit or loss 
the fair value of financial instruments contracts is determined by reference to market values for similar instruments as 
at december 31 2013 and 2012 the group had no open hedging contracts 
cash and shortterm deposits 
cash and cash equivalents in the statement of financial position comprise cash at banks and at hand and short term 
deposits with an original maturity of three months or less but exclude any restricted cash which is not available for use 
by the group and therefore is not considered highly liquid – for example cash set aside to cover decommissioning 
obligations 
for the purpose of the consolidated statement of cash flows cash and cash equivalents consist of cash and cash 
equivalents as defined above net of outstanding bank overdrafts 
taxation 
deferred tax assets and liabilities are calculated in respect of temporary differences using the liability method deferred 
income taxes are provided for all temporary differences arising between the tax bases of assets and liabilities and their 
carrying values for financial reporting purposes except where the deferred income tax arises from the initial recognition 
of goodwill or of an asset or liability in a transaction that is not a business combination and at the time of the 
transaction affects neither the accounting profit nor taxable profit or loss  
a deferred tax asset is recorded only to the extent that it is probable that taxable profit will be available against which 
the deductible temporary differences can be utilized deferred tax assets and liabilities are measured at tax rates that are 
expected to apply to the period when the asset is realized or the liability is settled based on tax rates that have been 
enacted or substantively enacted at the reporting date  
deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates except 
where the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary 
difference will not reverse in the foreseeable future  nostrum oil  gas lp consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
18 
revenue recognition  
the group sells crude oil gas condensate and lpg under agreements priced by reference to platt’s andor argus’ index 
quotations and adjusted for freight insurance and quality differentials where applicable the group sells gas under 
agreements at fixed prices 
revenue from the sale of crude oil gas condensate gas and lpg is recognized when delivery has taken place and risks 
and rewards of ownership have passed to the customer 
revenue is recognized when it is probable that the economic benefits associated with the transaction will flow to the 
group and the amount of revenue can be reliably measured 
treasury shares 
own equity instruments that are reacquired treasury shares are recognised at cost and deducted from equity no gain 
or loss is recognised in profit or loss on the purchase sale issue or cancellation of the group’s own equity instruments 
any difference between the carrying amount and the consideration if reissued is recognised in additional paidin 
capital voting rights related to treasury shares are nullified for the group and no distributions are accepted in relation 
to them share options exercised during the reporting period are satisfied with treasury shares 
sharebased payments 
the group measures the cost of cashsettled transactions with employees by reference to the fair value of the equity 
instruments at the date at which they are granted estimating fair value for sharebased payment transactions requires 
determination of the most appropriate valuation model which is dependent on the terms and conditions of the grant 
this estimate also requires determination of the most appropriate inputs to the valuation model including the expected 
life of the share option volatility and distribution yield and making assumptions about them the assumptions and 
models used for estimating fair value for sharebased payment transactions are disclosed in note 27 
5 business combinations 
on december 30 2013 the group has acquired 100 of the share capital of probel capital management nv 
“probel” a company providing management and consulting services to the group from group’s related parties in 
exchange for a cash consideration consisting of initial purchase price of us 28836 thousand subject to a price 
adjustment based on accounts of probel at december 30 2013 the amount of the price adjustment has not yet been 
agreed or paid as at the date of the authorization of the financial statements for issue but it is estimated that the amount 
will not exceed us 4598 thousand respective liability for this amount has been recognized within other current 
liabilities note 19 as at december 31 2013 part of which was offset against receivables of probel from previous 
owners  
historically certain senior managers of the group have provided their services to the group pursuant to a service 
agreement between probel and the group the probel acquisition was completed in connection with a proposed 
alternative listing of the group’s listed entity so as to comply with certain exchange requirements that listed companies 
be managed by persons employed by entities within the listed company’s group the goodwill arising on acquisition 
represents the savings of the group on management fees 
the provisional fair values of the identifiable assets and liabilities of probel as at the date of acquisition were 
in thousands of us dollars  
fair value 
recognized on 
acquisition  
 
assets  
property plant and equipment 32 
prepayments and other current assets 2554 
cash and cash equivalents 1953 
 4539 
 
liabilities  
trade payables 1021 
other current liabilities 470 
 1491 
total identifiable net assets at fair value 3048 
 
goodwill arising on acquisition 30386 
purchase consideration 33434 
financial statements nostrum oil  gas lp consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
19 
6 exploration and evaluation assets 
during the year ended december 31 2013 the group had additions of exploration and evaluation assets of 
us 20434 thousand year ended december 31 2012 us nil the additions are mainly represented by the 
consideration related to acquisition of subsoil use rights of three oil and gas fields – rostoshinskoye darjinskoye and 
yuzhnogremyachinskoye in the amount of us 15835 thousand including capitalized contingent consideration under 
acquisition agreement of those oil and gas fields in the amount of us 5300 thousand respective liabilities for which 
were recognized as other current liabilities note 19 also additions to exploration and evaluation assets include 
expenditures on geological and geophysical studies in the amount of us 4599 thousand  
7 property plant and equipment 
as at december 31 2013 and 2012 property plant and equipment comprised the following 
in thousands of us dollars  december 31 2013 december 31 2012 
 
oil and gas properties 1292073 1192048 
non oil and gas properties 38830 30617 
total property plant and equipment 1330903 1222665 
oil and gas properties 
the category “oil and gas properties” represents mainly wells oil and gas treatment facilities oil transportation and 
other related assets the movement of oil and gas properties for the years ended december 31 2013 and 2012 was as 
follows 
in thousands of us dollars 
working 
assets 
construction 
in progress total 
     
balance at january 1 2012 net of accumulated depreciation 
and depletion 903178 204236 1107414 
additions 5816 178082 183898 
transfers 192872 192872 – 
disposals 61 – 61 
disposals depreciation 6 – 6 
depreciation and depletion charge 99209 – 99209 
balance at december 31 2012 net of accumulated 
depreciation and depletion 1002602 189446 1192048 
additions 5108 210076 215184 
transfers 197271 197271 – 
depreciation and depletion charge 115159 – 115159 
balance at december 31 2013 net of accumulated 
depreciation and depletion 1089822 202251 1292073 
     
as at december 31 2012    
cost 1209373 189446 1398819 
accumulated depreciation and depletion 206771 – 206771 
balance net of accumulated depreciation and depletion 1002602 189446 1192048 
     
as at december 31 2013    
cost 1411752 202251 1614003 
accumulated depreciation and depletion 321930 – 321930 
balance net of accumulated depreciation and depletion 1089822 202251 1292073 
the category “oil and gas properties” represents mainly wells oil and gas treatment facilities oil transportation and 
other related assets the subcategory “construction in progress” is represented by the employee remuneration materials 
and fuel used rig costs payments made to contractors and asset retirement obligation fees directly associated with 
development of wells until the drilling of the well is complete and results have been evaluated 
the depletion rate for oil and gas working assets was 1214 and 1196 in 2013 and 2012 respectively   nostrum oil  gas lp consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
20 
the group engaged independent petroleum engineers to perform a reserves evaluation as at august 31 2013 starting 
from october 1 2013 the depletion has been calculated using the unit of production method based on these reserves 
estimates 
the group incurred borrowing costs including amortization of arrangement fees capitalization rate and capitalized 
borrowing costs were as follows for the years ended december 31 2013 and 2012 
in thousands of us dollars december 31 2013 december 31 2012 
 
borrowing costs including amortization of arrangement fee 56260 71076 
capitalization rate 895 1584 
capitalized borrowing costs 14609 26080 
nonoil and gas properties 
in thousands of us dollars buildings 
machinery 
 
equipment vehicles others 
construction 
in progress total 
        
balance at january 1 2012 net of 
accumulated depreciation 5488 2919 1106 2520 1006 13039 
additions 609 4062 378 2026 13950 21025 
transfers 358 1245 – 11 1614 – 
disposals – 143 – 201 – 344 
disposals depreciation – 140 – 180 – 320 
depreciation 848 1727 314 534 – 3423 
balance at december 31 2012 net of 
accumulated depreciation 5607 6496 1170 4002 13342 30617 
additions 562 2410 560 1217 8654 13403 
transfers 21799 – – 150 21949 – 
disposals 35 102 50 44 – 231 
disposals depreciation 16 52 49 30 – 147 
depreciation 1653 2378 334 741 – 5106 
balance at december 31 2013 net of 
accumulated depreciation 26296 6478 1395 4614 47 38830 
        
as at december 31 2012       
cost 8561 10977 3003 5843 13342 41726 
accumulated depreciation 2954 4481 1833 1841 – 11109 
balance net of accumulated 
depreciation 5607 6496 1170 4002 13342 30617 
        
as at december 31 2013       
cost 30887 13285 3513 7166 47 54898 
accumulated depreciation 4591 6807 2118 2552 – 16068 
balance net of accumulated 
depreciation 26296 6478 1395 4614 47 38830 
8 advances for noncurrent assets 
as at december 31 2013 and 2012 advances for noncurrent assets comprised the following 
in thousands of us dollars december 31 2013 december 31 2012 
 
advances for pipes and construction materials 6241 9126 
advances for construction services 3796 6063 
advances for purchase of subsoil use rights – 10089 
 10037 25278 
 
  
financial statements nostrum oil  gas lp consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
21 
9 inventories 
as at december 31 2013 and 2012 inventories comprised the following 
in thousands of us dollars december 31 2013 december 31 2012 
 
materials and supplies 16738 17127 
gas condensate 2986 4633 
crude oil 1754 2750 
lpg 607 454 
 22085 24964 
as at december 31 2013 and 2012 inventories are carried at cost 
10 trade receivables 
december 31 2013 and 2012 trade receivables were not interest bearing and were mainly denominated in us dollars 
their collection period was less than 30 days and they were not impaired 
as at december 31 2013 and 2012 the ageing analysis of trade receivables is as follows 
  
neither past 
due nor 
impaired 
past due but not impaired 
in thousands of us dollars total 30 days 6090 days 90120 days 120 days 
        
december 31 2013 66565 66561 – – – 4 
december 31 2012 54004 54000 – – – 4 
see note 30 on credit risk of the trade receivables which explains how the group manages and measures credit quality 
of trade receivables that are neither past due nor impaired  
11 prepayments and other current assets 
as at december 31 prepayments and other current assets comprised the following 
in thousands of us dollars december 31 2013 december 31 2012 
 
vat receivable 17192 10782 
advances paid 7817 12613 
other 6183 974 
 31192 24369 
advances paid consist primarily of prepayments made to service providers 
12 current and noncurrent investments 
current investments as at december 31 2013 were represented by an interest bearing shortterm deposit placed on 
september 30 2013 for a sixmonth period current investments as at december 31 2012 were represented by an 
interest bearing shortterm deposit placed on november 16 2012 for a sixmonth period 
noncurrent investments were represented by an interest bearing deposit placed on september 30 2013 for a period 
more than one year and an interest bearing deposit placed on march 4 2013 for a twoyear period 
13 cash and cash equivalents and restricted cash 
in thousands of us dollars december 31 2013 december 31 2012 
 
current accounts in us dollars 150931 84615 
bank deposits with maturity less than three months 25000 100000 
current accounts in tenge 5485 10595 
current accounts in other currencies 3492 2520 
petty cash 6 – 
 184914 197730  nostrum oil  gas lp consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
22 
the group has restricted cash accounts as liquidation fund deposit in the amount of us 4217 thousand with 
kazkommertsbank jsc in kazakhstan december 31 2012 us 3652 thousand which is kept as required by the 
subsoil use rights for abandonment and site restoration provision of the group 
bank deposits with maturity of less than three months as at december 31 2013 represent an interest bearing shortterm 
deposit placed on december 30 2013 
14 partnership capital 
the ownership interests in the partnership consist of a common units which represent a fractional entitlement in 
respect of all of the limited partner interests in the partnership and b the interest of the general partner at any general 
meeting every holder of common units shall have one vote for each common unit of which he or she is the holder 
under the partnership agreement distributions to limited partners will be made either as determined by the general 
partner in its sole discretion or following the approval of a majority of limited partners provided such amount does not 
exceed the amount recommended by the general partner any distributions to the partnership’s limited partners will be 
made on a pro rata basis according to their respective partnership interests in the partnership and will be paid only to the 
recorded holders of common units  
the following table summarizes the number of common units authorized and fully paid and do not have a par value all 
but 10 of which are represented by global depositary receipts “gdrs” 
number of common units in circulation treasury capital total 
     
at january 1 2012 185315341 1446541 186761882 
 
issued for esop – 1421076 1421076 
share options exercised 735894 735894 – 
at december 31 2012 186051235 2131723 188182958 
buyback of gdrs 1814348 1814348 – 
share options exercised 285375 285375 – 
as at december 31 2013 184522262 3660696 188182958 
on june 28 2013 the limited partners of the partnership duly passed all proposed resolutions at the annual general 
meeting “agm” of limited partners such resolutions included approval by the limited partners at the agm of the 
distribution to the partnership’s limited partners of us 034 per common unit payable by the partnership on july 26 
2013 to common unit holders on the register of partners and interests at the close of the business on july 19 2013 
in september 2012 the board of directors of the general partner approved the payment of the partnership’s inaugural 
distribution of us 032 per common unit to the holders of the partnership’s common units representing a cash 
distribution of us 60219 thousand equal to approximately 20 of retained earnings at june 30 2012 the 
distribution in the amount of us 59498 thousand since the esop trustee referenced in the following paragraph 
declined the distribution was paid on october 2 2012 to common unit holders on the register of partners and interests 
at the close of business on october 1 2012 
1421076 new common units represented by gdrs were issued in 2012 to support its obligations to employees 
under the employee share option plan esop the issued gdrs are held by ogier employee benefit trustee limited 
“the trustee” which upon request from employees to exercise options sells gdrs on the market and settles 
respective obligations under the esop this trust constitutes a special purpose entity under ifrs and therefore these 
newly issued gdrs are recorded as treasury capital of the partnership during the year ended december 31 2013 no 
new common units were issued and 285375 share options were exercised by employees year ended december 31 
2012 735894 share options the aggregate number of gdrs in respect of which share options may be outstanding 
under the esop must not exceed 5000000 there are no common units held by partnership’s subsidiaries except for 
the treasury shares held to support the esop 
additional paidin capital includes excess of the sale price of treasury shares at the transaction date over their original 
cost deducted by transaction costs incurred for issuance of treasury shares 
retained earnings and reserves include foreign currency translation reserve accumulated before 2009 when the 
functional currency of the group was tenge 
earnings per share “eps” 
basic eps amounts are calculated by dividing the profit for the period by the weighted average number of common 
units outstanding during the period 
the basic and diluted eps are the same as there are no instruments that have a dilutive effect on earnings  
 
financial statements nostrum oil  gas lp consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
23 
there have been no transactions involving ordinary shares or potential ordinary shares between the reporting date and 
the date of authorization of these financial statements 
 december 31 2013 december 31 2012 
 
net profit attributable to common unit holders in thousands of us 
dollars 219519 162009 
weighted average number of common units 185289550 186051235 
basic and diluted earnings per common unit in us dollars 118 087 
15  borrowings 
borrowings comprise the following as at december 31 2013 and 2012 
in thousands of us dollars december 31 2013 december 31 2012 
 
notes issued in 2012 and maturing in 2019 536301 530425 
notes issued in 2010 and maturing in 2015 92122 92469 
 628423 622894 
less amounts due within 12 months 7263 7152 
amounts due after 12 months 621160 615742 
2010 notes 
on october 19 2010 zhaikmunai finance bv the “2010 initial issuer” issued us 450000 thousand notes 
the ”2010 notes” 
on february 28 2011 zhaikmunai llp the “2010 issuer” replaced the 2010 initial issuer of the 2010 notes 
whereupon it assumed all of the obligations of the 2010 initial issuer under the 2010 notes 
the 2010 notes bear interest at the rate of 1050 per year interest on the 2010 notes is payable on april 19 and 
october 19 of each year beginning on april 19 2011 prior to october 19 2013 the 2010 issuer could at its option on 
any one or more occasions redeem up to 35 of the aggregate principal amount of the 2010 notes with the net cash 
proceeds of one or more equity offerings at a redemption price of 11050 of the principal amount thereof plus accrued 
and unpaid interest if any to the redemption date subject to the right of holders of record on the relevant record date to 
receive interest due on the relevant interest payment date provided that 1 at least 65 of the original principal 
amount of the 2010 notes including additional notes as defined in the indenture relating to the 2010 notes remains 
outstanding after each such redemption and 2 the redemption occurs within 90 days after the closing of the related 
equity offering 
in addition the 2010 notes could have been redeemed in whole or in part at any time prior to october 19 2013 at the 
option of the 2010 issuer upon not less than 30 nor more than 60 days prior notice mailed by firstclass mail to each 
holder of 2010 notes at its registered address at a redemption price equal to 100 of the principal amount of the 2010 
notes redeemed plus the applicable premium as defined below as of and accrued and unpaid interest to the 
applicable redemption date subject to the right of holders of record on the relevant record date to receive interest due 
on the relevant interest payment date applicable premium means with respect to any 2010 note on any applicable 
redemption date the greater of 1 10 of the principal amount of such 2010 note and 2 the excess if any of 
a the present value at such redemption date of i the redemption price of such 2010 note at october 19 2013 plus ii 
all required interest payments excluding accrued and unpaid interest to such redemption date due on such 2010 note 
through october 19 2013 computed using a discount rate equal to the united states treasury rate as of such redemption 
date plus 50 basis points over b the principal amount of such 2010 note 
the 2010 notes are jointly and severally guaranteed the “2010 guarantees” on a senior basis by nostrum oil  gas 
lp and all of its subsidiaries other than the 2010 issuer the “2010 guarantors” the 2010 notes are the 2010 issuers 
and the 2010 guarantors senior obligations and rank equally with all of the 2010 issuers and the 2010 guarantors 
other senior indebtedness the 2010 notes and the 2010 guarantees have the benefit of first priority pledges over the 
shares of zhaikmunai finance bv and zhaikmunai netherlands bv 
on october 19 2012 zhaikmunai international bv commenced a cash tender offer the “tender offer” to purchase 
any and all of the 2010 notes us 347604 thousand aggregate principal amount of the 2010 notes had been tendered 
into the tender offer representing approximately 77 of the outstanding 2010 notes by the time the tender offer for 
2010 notes expired on november 19 2012 the holders of us 200732 thousand 2010 notes that accepted the tender 
offer have subscribed to the 2012 notes of the same amount  
  nostrum oil  gas lp consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
24 
2012 notes 
on november 13 2012 zhaikmunai international bv the “2012 initial issuer” issued us 560000 thousand notes 
the “2012 notes” 
on april 24 2013 zhaikmunai llp the “2012 issuer” replaced the 2012 initial issuer of the 2012 notes whereupon it 
assumed all of the obligations of the 2012 initial issuer under the 2012 notes 
the 2012 notes bear interest at the rate of 7125 per year interest on the 2012 notes is payable on may 14 and 
november 13 of each year beginning on may 14 2013 prior to november 13 2016 the 2012 issuer may at its option 
on any one or more occasions redeem up to 35 of the aggregate principal amount of the 2012 notes with the net cash 
proceeds of one or more equity offerings at a redemption price of 107125 of the principal amount thereof plus 
accrued and unpaid interest if any to the redemption date subject to the right of holders of record on the relevant 
record date to receive interest due on the relevant interest payment date provided that 1 at least 65 of the original 
principal amount of the 2012 notes including additional notes as defined in the indenture relating to the 2012 notes 
remains outstanding after each such redemption and 2 the redemption occurs within 90 days after the closing of the 
related equity offering 
in addition the 2012 notes may be redeemed in whole or in part at any time prior to november 13 2016 at the option 
of the 2012 issuer upon not less than 30 nor more than 60 days prior notice mailed by firstclass mail to each holder of 
2012 notes at its registered address at a redemption price equal to 100 of the principal amount of the 2012 notes 
redeemed plus the applicable premium as defined below as of and accrued and unpaid interest to the applicable 
redemption date subject to the right of holders of record on the relevant record date to receive interest due on the 
relevant interest payment date applicable premium means with respect to any 2012  
note on any applicable redemption date the greater of 1 10 of the principal amount of such 2012 note and 2 the 
excess if any of a the present value at such redemption date of i the redemption price of such 2012 note at 
november 13 2016 plus ii all required interest payments excluding accrued and unpaid interest to such redemption 
date due on such 2012 note through november 13 2016 computed using a discount rate equal to the united states 
treasury rate as of such redemption date plus 50 basis points over b the principal amount of such 2012 note 
the 2012 notes are jointly and severally guaranteed the “2012 guarantees” on a senior basis by nostrum oil  gas 
lp and all of its subsidiaries other than the 2012 issuer the “2012 guarantors” the 2012 notes are the 2012 issuers 
and the 2012 guarantors senior obligations and rank equally with all of the 2012 issuers and the 2012 guarantors 
other senior indebtedness the 2012 notes and the 2012 guarantees do not have the benefit of first priority pledges over 
the shares of zhaikmunai finance bv and zhaikmunai netherlands bv 
16 abandonment and site restoration provision 
the summary of changes in abandonment and site restoration provision during the years ended december 31 2013 and 
2012 is as follows 
in thousands of us dollars 2013 2012 
 
abandonment and site restoration provision as at january 1 11064 8713 
unwinding of discount 1034 847 
additional provision 2500 1743 
change in estimates 724 239 
abandonment and site restoration provision as at december 31 13874 11064 
the longterm inflation and discount rates used to determine the abandonment and site restoration provision at 
december 31 2013 were 7  and 10  respectively december 31 2012 7  and 10 
17 due to government of kazakhstan 
the amount due to government of the republic of kazakhstan has been recorded to reflect the present value of a 
liability in relation to the expenditures made by the government in the time period prior to signing the contract that 
were related to exploration of the contract territory and the construction of surface facilities in fields discovered therein 
and that are reimbursable by the group to the government during the production period the total amount of liability 
due to government as stipulated by the contract is us 25000 thousand 
repayment of this liability commenced in 2008 with the first payment of us 1030 thousand in march 2008 and with 
further payments by equal quarterly instalments of us 258 thousand until may 26 2031 the liability was discounted 
at 13  
financial statements nostrum oil  gas lp consolidated financial statements 
notes to the consolidated financial statements continued 
25 
the summary of changes in the amounts due to government of kazakhstan during the years ended december 31 2013 
and 2012 is as follows 
in thousands of us dollars 2013 2012 
due to government of kazakhstan as at january 1 7153 7242 
unwinding of discount 930 942 
paid during the year 1031 1031 
7052 7153 
less current portion of due to government of kazakhstan 1031 1031 
due to government of kazakhstan as at december 31 6021 6122 
18 trade payables
trade payables comprise the following as at december 31 2013 and 2012 
in thousands of us dollars december 31 2013 december 31 2012 
tenge denominated trade payables 42950 48622 
us dollar denominated trade payables 12719 6659 
trade payables denominated in other currencies 2849 3109 
58518 58390 
19 other current liabilities
other current liabilities comprise the following as at december 31 2013 and 2012 
in thousands of us dollars december 31 2013 december 31 2012 
taxes payable other than corporate income tax 32110 24650 
training obligations accrual 8986 9256 
contingent consideration
1
  5300 – 
due to employees 3227 1180 
accrual for additional payment for acquisition of probel 1953 – 
pension obligations 204 162 
other current liabilities 2884 2327 
54664 37575 
¹ see note 6 on exploration and evaluation assets 
20 revenue
during the year ended december 31 2013 the revenue from sales to two major customers amounted to 
us 202945 thousand and us 173440 thousand year ended december 31 2012 three major customers 
us 200581 thousand us 118780 thousand and 53994 thousand respectively 
in thousands of us dollars 2013 2012 
oil and gas condensate 709107 587371 
gas and lpg 185907 149694 
895014 737065 
21 cost of sales
in thousands of us dollars 2013 2012 
depreciation depletion and amortization 118957 101374 
repair maintenance and other services 52361 55470 
royalties 39356 34195 
government profit share 30747 7899 
payroll and related taxes 17240 18409 
materials and supplies 12262 5332 
other transportation services 4306 5350 
management fees 3558 1880 
well workover costs 2794 7639 
change in stock 2490 3298 
environmental levies 1029 1614 
other 1122 2360 
286222 238224  nostrum oil  gas lp consolidated financial statements 
notes to the consolidated financial statements continued 
26 
22 general and administrative expenses
in thousands of us dollars 2013 2012 
management fees 16006 13497 
professional services 9072 4012 
payroll and related taxes 7576 4966 
other taxes 4839 4320 
employee share option plan 4430 2470 
business travel 4089 2739 
sponsorship 2919 721 
training 2736 4118 
insurance fees 2050 1403 
depreciation and amortization 1413 1258 
bank charges 1100 1069 
communication 1010 824 
materials and supplies 664 602 
lease payments 585 406 
social program 300 21818 
other 1660 659 
60449 64882 
23 selling and transportation expenses
in thousands of us dollars 2013 2012 
transportation costs 72229 73973 
loading and storage costs 36991 21622 
payroll and related taxes 2486 2330 
management fees 701 1882 
other 9267 3797 
121674 103604 
24 finance costs
in thousands of us dollars 2013 2012 
interest expense on borrowings 41651 44996 
unwinding of discount on abandonment and site restoration provision
1
 1034 848 
unwinding of discount on due to government
2
 930 941 
43615 46785 
¹ see note 16 on  
² see note  
25 other expenses
in thousands of us dollars 2013 2012 
export customs duty 12268 – 
compensation 6387 4797 
other 6938 1815 
25593 6612 
the export customs duty is represented by the customs duties for export of crude oil and customs fees for its services 
such as processing of declarations temporary warehousing etc based on their interpretation of cis freetrade 
legislation the kazakhstan customs authorities have imposed customs duties on oil exports from kazakhstan to ukraine 
starting from december 2012 
financial statements nostrum oil  gas lp consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
27 
26 income tax 
the income tax expense consisted of the following 
in thousands of us dollars 2013 2012 
    
current income tax expense 138883 118105 
deferred income tax expense 3613 2258 
total income tax expense 142496 120363 
the group has profits assessable for income taxes only in the republic of kazakhstan a reconciliation between tax 
expense and the product of accounting profit multiplied by the tax rate applicable to the chinarevskoye subsoil use 
rights is as follows 
in thousands of us dollars 2013 2012 
 
profit before income tax 362015 282372 
tax rate applicable to the subsoil use rights 30 30 
expected tax provision 108605 84712 
 
nondeductible interest expense on borrowings 19084 26579 
change of the tax base 2836 2312 
nondeductible other tax expenses 2037 5243 
nondeductible technological losses 1850 763 
nondeductible compensation for gas 1711 1226 
foreign exchange gainloss 1624 491 
nondeductible social expenditures 890 1589 
effect of income taxed at different rate 31 26 
nondeductible training expenditures – 552 
nonassessable income – 4223 
other nondeductible expenses 3828 1093 
income tax expenses reported in the consolidated financial statements 142496 120363 
deferred tax balances are calculated by applying the tax rate applicable to the chinarevskoye subsoil use rights to the 
temporary differences between the tax amounts and the amounts reported in the consolidated financial statements are 
comprised of the following 
in thousands of us dollars december 31 2013 december 31 2012 
 
deferred tax asset   
accounts payable and provisions 2811 2690 
    
deferred tax liability   
property plant and equipment 155356 151622 
net deferred tax liability 152545 148932 
the movements in the deferred tax liabilities were as follows 
in thousands of us dollars 2013 2012 
 
balance at january 1 148932 146674 
current period charge to statement of income 3613 2258 
balance at december 31 152545 148932 
27 employee share option plan 
employees including senior executives and executive directors of members of the group receive remuneration in the 
form of equitybased payment transactions whereby employees render services as consideration for share appreciation 
rights which can only be settled in cash “cashsettled transactions” 
the cost of cashsettled equitybased employee compensation is measured initially at fair value at the grant date using a 
trinomial lattice valuation model this fair value is expensed over the period until vesting with the recognition of a 
corresponding liability the liability is remeasured at each reporting date up to and including the settlement date with 
changes in fair value recognised in the statement of comprehensive income 
   nostrum oil  gas lp consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
28 
the equitybased payment plan is described below 
during 20082013 3182958 equity appreciation rights sars were granted to senior employees and executive 
directors of members of the group which can only be settled in cash these generally vest over a five year period from 
the date of grant so that one fifth of granted sars vests on each of the five anniversaries from the date of grant the 
contractual life of the sars is ten years the fair value of the sars is measured at the grant date using a trinomial 
lattice valuation option pricing model taking into account the terms and conditions upon which the instruments were 
granted sars are exercisable at any time after vesting till the end of the contractual life and give its holder a right to a 
difference between the market value of the group’s gdrs at the date of exercise and a stated base value the services 
received and a liability to pay for those services are recognised over the expected vesting period 
until the liability is settled it is remeasured at each reporting date with changes in fair value recognised in profit or loss 
as part of the employee benefit expenses arising from cashsettled sharebased payment transactions  
the carrying value of the liability relating to 2912348 of sars at december 31 2013 is us 12016 thousand 
december 31 2012 2131723 sars with carrying value of us 9788 thousand during the year ended 
december 31 2013 728487 sars were fully vested year ended december 31 2012 426345 
the following table illustrates the number “no” and exercise prices “ep” of and movements in sars during the 
year  
 2013 2012 
 no epus no epus 
 
total outstanding at the beginning of the year 
with ep of us 4 1931723 4 2667617 4 
total outstanding at the beginning of the year 
with ep of us 10 200000 10 200000 10 
total outstanding at the beginning of the year 2131723 – 2867617 – 
 
share options granted 1115000 10 – – 
share options exercised 285375 4 735894 4 
share options lapsed 49000 10 – – 
total outstanding at the end of the year 2912348 4 2131723 – 
total exercisable at the end of the year 1808348 – 1311170 – 
the weighted average fair value of sars granted during the year ended december 31 2013 amounted to us 622 per 
sar and the weighted average price at the date of exercise for sars exercised during the year amounted to 
us 822 per sar 2012 us 596 per sar the hullwhite trinomial lattice valuation model was used to value the 
share options the following table lists the inputs to the model used for the plan for the years ended december 31 2013 
and 2012 
 2013 2012 
 
gdr price at the reporting date us 130 107 
distribution yield  30 15 
expected volatility  850 860 
riskfree interest rate  20 20 
expected life years 100 35 
option turnover  100 100 
price trigger 20 20 
the expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may 
occur the expected volatility reflects the assumption that the historical volatility is indicative of future trends which 
may also not necessarily be the actual outcome option turnover rate represents the rate of employees expected to leave 
the group during the vesting period which is based on historical data and may not necessarily be the actual outcome 
the model considers that when share price reaches the level of exercise price multiplied by the price trigger the 
employees are expected to exercise their options 
financial statements nostrum oil  gas lp consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
29 
28 related party transactions 
for the purpose of these consolidated financial statements transactions with related parties mainly comprise arm’s 
length transactions between the members of the group and the participants andor their subsidiaries or associated 
companies 
accounts payable to related parties at december 31 2013 and 2012 represented by entities indirectly controlled by 
shareholder with significant influence over the group consisted of the following  
in thousands of us dollars december 31 2013 december 31 2012 
    
trade payables   
prolag bvba 240 298 
amersham oil llp 52 48 
probel capital management nv – 288 
during the years ended december 31 2013 and 2012 the group had the following transactions with related parties 
represented by entities indirectly controlled by shareholder with significant influence over the group 
in thousands of us dollars 2013 2012 
    
management fees and consulting services   
probel capital management nv 17507 13648 
amersham oil llp 1506 1415 
prolag bvba 1253 2195 
management fees are payable in accordance with the technical assistance agreements signed between the members of 
the group and amersham oil llp prolag bvba and probel capital management nv related to the rendering of 
geological geophysical drilling technical and other consultancy services 
annual remuneration represented by shortterm employee benefits of key management personnel amounted to 
us 634 thousand for year ended december 31 2013 year ended december 31 2012 us 624 thousand other key 
management personnel were employed and paid by amersham oil llp and probel capital management nv and 
whose remuneration forms part of the management fees and consulting services above 
payments to key management personnel under esop amounted to us 2202 thousand for the year ended 
december 31 2013 year ended december 31 2012 us 4416 thousand note 27 
29 contingent liabilities and commitments 
taxation 
kazakhstan’s tax legislation and regulations are subject to ongoing changes and varying interpretations instances of 
inconsistent opinions between local regional and national tax authorities are not unusual the current regime of 
penalties and interest related to reported and discovered violations of kazakhstan’s tax laws are severe penalties are 
generally 50 of the taxes additionally assessed and interest is assessed at the refinancing rate established by the 
national bank of kazakhstan multiplied by 25 as a result penalties and interest can amount to multiples of any 
assessed taxes fiscal periods remain open to review by tax authorities for five calendar years preceding the year of 
review under certain circumstances reviews may cover longer periods because of the uncertainties associated with 
kazakhstan’s tax system the ultimate amount of taxes penalties and interest if any may be in excess of the amount 
expensed to date and accrued at december 31 2013 as at december 31 2013 management believes that its 
interpretation of the relevant legislation is appropriate and that it is probable that the group’s tax position will be 
sustained 
abandonment and site restoration decommissioning 
as kazakh laws and regulations concerning site restoration and cleanup evolve the group may incur future costs the 
amount of which is currently indeterminable such costs when known will be provided for as new information 
legislation and estimates evolve  
   nostrum oil  gas lp consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
30 
environmental obligations 
the group may also be subject to loss contingencies relating to regional environmental claims that may arise from the 
past operations of the related fields in which it operates as kazakh laws and regulations evolve concerning 
environmental assessments and site restoration the group may incur future costs the amount of which is currently 
indeterminable due to such factors as the ultimate determination of responsible parties associated with these costs and 
the government’s assessment of respective parties’ ability to pay for the costs related to environmental reclamation 
however depending on any unfavorable claims or penalties assessed by the kazakh regulatory agencies it is possible 
that the group’s future results of operations or cash flow could be materially affected in a particular period 
capital commitments 
as at december 31 2013 the group had contractual capital commitments in the amount of us 26842 thousand 
december 31 2012 us 23088 thousand mainly in respect to the group’s oil field development activities 
operating lease  
in 2010 zhaikmunai llp entered into several agreements on lease of 650 railway tank wagons for transportation of 
hydrocarbon products for a period of up to 7 years for kzt 6989 equivalent of us 47 per day per one wagon the 
lease agreements may be early terminated either upon mutual agreement of the parties or unilaterally by one of the 
parties if the other party does not fulfil its obligations under the contract 
the total of future minimum lease payments under noncancellable operating leases were represented as follows 
in thousands of us dollars 2013 2012 
    
no later than 1 year 12501 12586 
later than 1 year and no later than five years 23846 17112 
later than five years – – 
lease expenses of railway tank wagons for the year ended december 31 2013 amounted to us 12628 thousand the 
year ended december 31 2012 us 10705 thousand 
social and education commitments 
as required by the contract as amended by inter alia supplement 9 zhaikmunai llp is obliged to 
 spend us 300 thousand per annum to finance social infrastructure 
 perform repair and reconstruction of state automobile roads for the amount of us 12000 thousand in 2012 
 make an accrual of one percent per annum of the financial obligations for the chinarevskoye field for the 
purposes of educating kazakh citizens and 
 adhere to a spending schedule on education which lasts until and including 2020 
the contracts for exploration and production of hydrocarbons from rostoshinskoye darjinskoye and yuzhno
gremyachinskoye fields require fulfillment of several social and other obligations however these obligations were 
amended in the year ended december 31 2013 in the case of rostoshinskoye or were as at december 31 2013 in 
the process of being amended in the case of darjinskoye and yuzhnogremyachinskoye  
the current contract for exploration and production of hydrocarbons from rostoshinskoye field as amended on 
august 9 2013 requires the subsurface user to 
 spend at least us 206 thousand of investments for education of personnel engaged to work under the contract 
during the exploration stage 
 spend us 600 thousand to finance social infrastructure of the region during the exploration stage 
 invest at least us 20750 thousand for exploration of the field during the exploration period  
 create a liquidation fund special deposit account with local bank equal to us 206 thousand 
  
financial statements nostrum oil  gas lp consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
31 
the contract for exploration and production of hydrocarbons from darjinskoye field as at december 31 2013 required 
the subsurface user to 
 spend at least us 200 thousand for education of personnel engaged to work under the contract during the 
exploration stage  
 spend us 18850 thousand to finance social infrastructure of the region including us 1000 thousand for 
funding of development of astana city in case of commercial discovery 
 invest at least us 20000 thousand for exploration of the field during the exploration period 
 reimburse historical costs of us 6499 thousand to the government including us 195 thousand for the right 
to use geological information and  
 create a liquidation fund special deposit account with local bank equal to 1 of the capital expenditures during 
the exploration stage and 01 of the operational costs during the production stage 
the current contract for exploration and production of hydrocarbons from yuzhnogremyachinskoye field as 
at december 31 2013 required the subsurface user to 
 spend at least 1 of investments for education of personnel engaged to work under the contract during the 
exploration stage 
 spend us 18950 thousand to finance social infrastructure of the region including us 1000 thousand for 
funding of development of astana city in case of commercial discovery 
 invest at least us 23050 thousand for exploration of the field during the exploration period 
 reimburse historical costs of us 3194 thousand to the government including us 96 thousand for the right to 
use geological information and 
 create a liquidation fund special deposit account with local bank equal to 1 of the capital expenditures during 
the exploration stage and 01 of the operational costs during the production stage 
domestic oil sales 
in accordance with supplement  7 to the contract zhaikmunai llp is required to deliver at least 15 of produced oil 
to the domestic market on a monthly basis for which prices are materially lower than export prices 
30 financial risk management objectives and policies 
the group’s principal financial liabilities comprise borrowings payables to government of kazakhstan trade payables 
and other current liabilities the main purpose of these financial liabilities is to finance the development of the 
chinarevskoye oil and gas condensate field and its operations as well as exploration of the three new oil and gas fields – 
rostoshinskoye darjinskoye and yuzhnogremyachinskoye the groups financial assets consist of trade and other 
receivables noncurrent investments current investments and cash and cash equivalents 
the main risks arising from the group’s financial instruments are interest rate risk foreign exchange risk liquidity risk 
and credit risk the group’s management reviews and agrees policies for managing each of these risks which are 
summarized below  
commodity price risk 
the group is exposed to the effect of fluctuations in price of crude oil which is quoted in us dollar on the 
international markets the group prepares annual budgets and periodic forecasts including sensitivity analyses in 
respect of various levels of crude oil prices in the future 
interest rate risk 
the group is not exposed to interest rate risk in 2013 and 2012 as the group had no floatingrate borrowings as at 
december 31 2013 and 2012 
   nostrum oil  gas lp consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
32 
foreign currency risk 
as a significant portion of the group’s operation is the tenge denominated the group’s statement of financial position 
can be affected significantly by movements in the us dollar  tenge exchange rates the group mitigates the effect of 
its structural currency exposure by borrowing in us dollars and denominating sales in us dollars  
the following table demonstrates the sensitivity to a reasonably possible change in the us dollars exchange rate with 
all other variables held constant of the group’s profit before tax due to changes in the fair value of monetary assets 
and liabilities 
 
change in tenge 
to us dollar 
exchange rate 
effect on profit 
before tax 
    
2013   
us dollar thousand 3000 3294 
us dollar thousand 1000 1098 
 
2012   
us dollar thousand 157 235 
us dollar thousand 157 235 
the group’s foreign currency denominated monetary assets and liabilities were as follows 
as at december 31 2013 tenge 
russian  
roubles euro other 
      
cash and cash equivalents 5491 – 3492 – 
trade receivables 27619 – 1 – 
trade payables 42950 372 2472 5 
other current liabilities 257 – 7173 – 
 10097 372 6152 5 
      
as at december 31 2012 tenge 
russian  
roubles euro other 
      
cash and cash equivalents 10595 – 2520 2 
trade receivables 10573 – – – 
trade payables 48622 10 2251 848 
other current liabilities 10436 – – – 
 37890 10 269 846 
liquidity risk 
liquidity risk is the risk that the group will encounter difficulty in raising funds to meet commitments associated with 
its financial liabilities liquidity risk may result from an inability to sell a financial asset quickly at close to its fair 
value 
the group monitors its risk to a shortage of funds using a liquidity planning tool the tool allows selecting severe stress 
test scenarios to ensure an adequate level of liquidity a minimum cash balance has been defined as a cushion of liquid 
assets the group’s objective is to maintain a balance between continuity of funding and flexibility through the use of 
notes loans hedges export financing and financial leases  
the group’s policy is that while it has an investment program ongoing a not more than 25 of borrowings should 
mature in the next twelvemonth period and b a minimum balance of us 50 million is retained on the balance sheet 
post repayment or refinancing of any debt due in the next twelvemonth period 
the groups total outstanding debt consists of two notes us 925 million issued in 2010 and maturing in 2015 and 
us 560 million issued in 2012 and maturing in 2019 the group assessed the concentration of risk with respect to 
refinancing its debt and concluded it to be low  
access to sources of funding is sufficiently available and if there would be debt maturing within twelve months it could 
be rolled over with existing lenders 
financial statements nostrum oil  gas lp consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
33 
the table below summarizes the maturity profile of the groups financial liabilities as at december 31 2013 and 2012 
based on contractual undiscounted payments 
december 31 2013 
on  
demand 
less than  
3 months 
312  
months 15 years 
more than  
5 years total 
        
borrowings – – 43613 259902 594691 898206 
trade payables 58518 – – – – 58518 
other current liabilities 20571 – – – – 20571 
due to the government of 
kazakhstan – 258 773 4124 12371 17526 
 79089 258 44386 264026 607062 994821 
        
december 31 2012 
on  
demand 
less than  
3 months 
312  
months 15 years 
more than  
5 years total 
        
borrowings – – 49613 264451 639800 953864 
trade payables 58390 – – – – 58390 
other current liabilities 10437 – – – – 10437 
due to the government of 
kazakhstan – 258 773 4124 13402 18557 
 68827 258 50386 268575 653202 1041248 
credit risk 
financial instruments which potentially subject the group to credit risk consist primarily of accounts receivable and 
cash in banks the maximum exposure to credit risk is represented by the carrying amount of each financial asset the 
group considers that its maximum exposure is reflected by the amount of trade accounts receivable and cash and cash 
equivalents 
the group places its tenge denominated cash with sb sberbank jsc which has a credit rating of ba2 stable from 
moodys rating agency and its us dollar denominated cash with bnp paribas with a credit rating of a2 stable and 
ing with a credit rating of a2 negative from moodys rating agency at december 31 2013 the group does not 
guarantee obligations of other parties 
the group sells its products and makes advance payments only to recognized creditworthy third parties in addition 
receivable balances are monitored on an ongoing basis with the result that the groups exposure to bad debts and 
recoverability of prepayments made is not significant and thus risk of credit default is low 
customer credit risk is managed by each business unit subject to the group’s established policy procedures and control 
relating to customer credit risk management credit quality of a customer is assessed based on an extensive credit rating 
scorecard outstanding customer receivables are regularly monitored  
an impairment analysis is performed at each reporting date on an individual basis for major clients the maximum 
exposure to credit risk at the reporting date is the carrying value of each class of financial assets the group does not 
hold collateral as security the group evaluates the concentration of risk with respect to trade receivables as low as its 
customers are located in several jurisdictions and industries and operate in largely independent markets 
fair values of financial instruments 
set out below is a comparison by class of the carrying amounts and fair value of the group’s financial instruments 
other than those with carrying amounts reasonably approximating their fair values 
 carrying amount fair value 
in thousands of us dollars 2013 2012 2013 2012 
      
financial liabilities     
interest bearing borrowings 628423 622894 686795 692828 
total 628423 622894 686795 692828 
the fair value of the financial assets and liabilities represents the amount at which the instrument could be exchanged in 
a current transaction between willing parties other than in a forced or liquidation sale fair value of the quoted notes is 
based on price quotations at the reporting date and respectively categorised as level 1 within the fair value hierarchy  nostrum oil  gas lp consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
34 
the management assessed that cash and cash equivalents shortterm deposits trade receivables trade payables and 
other current liabilities approximate their carrying amounts largely due to the shortterm maturities of these instruments 
capital management 
for the purpose of the group’s capital management capital includes issued capital additional paidin capital and all 
other equity reserves attributable to the equity holders of the parent the primary objective of the group’s capital 
management is to maximise the shareholder value 
in order to achieve this overall objective the group’s capital management amongst other things aims to ensure that it 
meets financial covenants attached to the notes that define capital structure requirements breaches in meeting the 
financial covenants would permit the borrowers to immediately call borrowings there have been no breaches in the 
financial covenants of the notes in the current period nor the prior period 
the group manages its capital structure and makes adjustments in light of changes in economic conditions and the 
requirements of the financial covenants to maintain or adjust the capital structure the group may adjust the 
distribution payment to participants return capital to participants or increase partnership capital the group monitors 
capital using a gearing ratio which is net debt divided by total capital plus net debt the group’s policy is to keep the 
gearing ratio between 20 and 40 the group includes within net debt interest bearing loans and borrowings less 
cash shortterm deposits and longterm deposits excluding discontinued operations 
in thousands of us dollars 2013 2012 
    
interest bearing borrowings 628423 622894 
less cash and cash equivalents restricted cash and current and noncurrent 
investments 244131 251382 
net debt 384292 371512 
    
equity 832451 695104 
total capital 832451 695104 
    
capital and net debt 1216743 1066616 
    
gearing ratio 32 35 
no changes were made in the objectives policies or processes for managing capital during the years ended 
december 31 2013 and 2012 
31 events after the reporting period 
on january 23 2014 the contract for exploration and production of hydrocarbons from darjinskoye field was amended 
so as to require zhaikmunai llp to 
 spend at least us 200 thousand for education of personnel engaged to work under the contract during the 
exploration stage  
 spend us 225 thousand to finance social infrastructure of the region 
 invest at least us 20355 thousand for exploration of the field during the exploration period 
 create a liquidation fund special deposit account with local bank equal to us 208 thousand 
on january 23 2014 the contract for exploration and production of hydrocarbons from yuzhnogremyachenskoye 
field was amended so as to require zhaikmunai llp to 
 spend at least us 200 thousand for education of personnel engaged to work under the contract during the 
exploration stage 
 spend us 1050 thousand to finance social infrastructure of the region 
 invest at least us 19850 thousand for exploration of the field during the exploration period 
 reimburse historical costs of us 96 thousand and 
 create a liquidation fund special deposit account with local bank equal to us 244 thousand 
financial statements nostrum oil  gas lp consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
35 
the remaining contingent consideration 312168910 tenge for darjinskoye and 487375905 tenge for yuzhno
gremyachenskoye was paid to the sellers in january 2014 
on february 11 2014 the tenge was devalued against the us dollar and other major currencies the exchange rates 
before and after devaluation were 155 tengeus dollar and 185 tengeus dollar respectively 
on february 14 2014 nostrum oil  gas finance bv a subsidiary of zhaikmunai netherlands bv established on 
january 15 2014 issued usd 400 million notes at a coupon of 6325 maturing 2019 the notes are jointly and 
severally guaranteed on a senior basis by nostrum oil  gas lp and all of its subsidiaries other than nostrum oil  
gas finance bv on february 28 2014 zhaikmunai llp entered into a deed of sale and transfer with zhaikmunai 
netherlands bv for the acquisition of the share capital of nostrum oil  gas finance bv 
on march 3 2014 in accordance with its hedging policy zhaikmunai llp entered at nil upfront cost into a new 
hedging contract covering oil sales of 7500 bblsday or a total of 5482500 bbls running through february 29 2016 
the counterparty to the hedging agreement was citibank based on the hedging contract zhaikmunai llp bought a put 
at 85bbl which protected it against any fall in the price of oil below 85bbl as part of this contract zhaikmunai llp 
also sold a call at 1115bbl and bought a call at 1175bbl which further allowed zhaikmunai llp to benefit from oil 
prices up to 1115bbl and above 1175bbl 
 
  notes
financial statements  t his report is printed on paper which is fsc 
certified the standards for wellmanaged 
forests considering environment social  
and economic issues
d esign and produced by instinctif partners 
wwwinstinctifcom nostrum oil  gas lp  
gustav mahlerplein 23 b
1082 ms amsterdam
the netherlands
tel  31 20 737 2288
fax  31 20 737 2292
wwwnostrumoilandgascom
nostrum oil  gas  annual report 2013


Summary:
 strategic report
chief executive’s review
“ reaching full processing capacity  
at the gtf alongside increasing our 
2p reserves to 582 mboe has been  
a tremendous achievement”
201 3 was an  
outstanding year
2013 was an outstanding year 
reaching full processing capacity  
at the gtf alongside increasing our  
2p reserves to 582 mboe has been a 
tremendous achievement we are now 
working on our second development 
phase which will entail the construction 
and the commissioning of a new gas 
plant as well as a sizeable drilling 
programme spanning the next  
45 years the next gtf is a particularly 
critical part of our strategy enabling  
us to double production before the 
end of 2016
excellent reserve growth
we enjoyed excellent reserve  
growth from the acquisition  
of three neighbouring fields 
rostoshinskoye darzhinskoye and 
yuzhnogremyachenskoye allowing  
us to increase our 2p reserves to  
582 mboe we now look forward  
to the appraisal programme at these 
fields as well as further appraisal  
at chinarevskoye to ensure we  
can maintain peak production for  
as long as possible 
the chinarevskoye field continues  
to demonstrate its strong geological 
potential as we were able to once 
again replace more than 100 of  
our proven reserves in 2013 i am  
very excited about the future of our 
current asset base as well as the 
potential for further expansion  
over the coming years 
strong operational performance
the chinarevskoye field is performing 
excellently with the oil treatment 
facility otf and the gas treatment 
facility gtf operating at nameplate 
capacities we forecast a daily total 
production average of approximately 
45000 boepd for 2014 and 2015 
intensive drilling programme 
thirteen wells were drilled as part  
of our 2013 programme we now  
look forward to an intensive drilling 
programme of more than 50 wells  
over the next five years we anticipate 
drilling 45 production wells each  
year to ensure existing production is 
maintained with the remainder of the 
wells targeting future feedstock for our 
next gtf and appraisal wells focused 
on shifting probable and possible 
reserves into the proven category 
t hird gt f on track
during 2013 we took significant steps 
towards the construction of our next 
gas plant which will allow faster 
monetisation of reserves by increasing 
treatment capacity by an additional  
25 bcm of raw gas per year to a total 
of 42 bcm per annum investments 
have already been made in the initial 
design of this third train and in the 
earlystage procurement of longlead 
items construction and commissioning 
of this stateoftheart infrastructure is 
forecast to be completed by mid 2016 
with production reaching 100000 
boepd by the end of that year
kaiu we kessel
chief executive officer
18
nostrum oil  gas annual report 2013  implementing our ma strategy 
in addition to proving up reserves at 
chinarevskoye our development plan 
also focuses on sustaining longterm 
production beyond chinarevskoye 
alone this is the basis of our ma 
strategy as reflected in the recent 
acquisition of the subsoil use rights 
related to three adjacent oil and gas 
fields rostoshinskoye darzhinskoye 
and yuzhnogremyachenskoye in the 
close vicinity of the chinarevskoye 
field based on ryder scott’s analysis 
these fields have added 98 million of 
2p reserves and we look forward to 
the results of further appraisal in the 
next 18 months
by virtue of our size development 
stage and production track record  
we have acquired high visibility both 
locally and internationally and as a 
result are kept informed of further 
ma opportunities our approach is  
to remain both pragmatic and prudent 
as we consider these options our 
main focus remains on northwest 
kazakhstan where we know the 
landscape and are already operating 
successfully in addition we would also 
consider opportunities outside of this 
region where we see the potential to 
create further shareholder value 
in 2014 t here are four key obj ect iv es for t he company 
in order t o cont inue t o deliv er on our st rat egy
1
 ensure construction of the next gas plant remains  
on track for 2016
2
 continue to grow the proven reserve base through 
appraisal of chinarevskoye and our three new fields
3
 establish a dedicated business development team  
to ensure we can quickly and accurately evaluate  
the opportunities in the region
4
 ensure that the financial position of the company 
remains stable
enhancing shareholder value
i believe that these objectives  
if successfully achieved will provide 
the platform to significantly enhance 
shareholder value we have 
demonstrated in the past that we  
can deliver on our strategy and i am 
therefore confident as we enter 2014  
 
that we are well positioned to continue 
to achieve our goals i look forward  
to successfully executing the next 
infrastructure project whilst also 
ensuring the reserve base is not  
only maintained but increased  
over the coming years
19
nostrum oil  gas annual report 2013 
strategic report