Industrial Safety and Labor Protection

The company consistently improves its processes for interacting with contractors and subcontractors in the areas of industrial safety, occupational health, and environmental protection (HSE), aimed at enhancing a culture of safe work, as well as identifying, assessing, and managing risks at all stages of work.

As part of the KMG Roadmap for Improving Industrial Safety, Health, and Environment for 2025–2027, a series of measures aimed at enhancing safety at contractors and subcontractors has been implemented. These measures were developed based on an analysis of incidents occurring in the Production and Oilfield Services business areas, which are characterized by elevated levels of industrial risks.

A detailed analysis of incidents involving employees of contracting organizations was carried out, with classification by type of work, including drilling and tripping operations, repair works, work at height, and other high‑risk activities. The analysis identified systemic root causes related to deficiencies in work management and organization, as well as insufficient oversight by line managers and contract administrators in ensuring compliance with HSE requirements.

Attention is paid to the allocation of responsibilities, the establishment of measurable key performance indicators for industrial safety, and the ranking of work types by risk level (low, medium, high). Performance indicators for industrial safety, health, and the environment have been introduced for contractors.

To strengthen oversight of interactions with contractors, mechanisms have been developed to enhance the role of contract administrators, line managers, and specialized HSE services, including conducting internal audits of contractors and subcontractors, analyzing the root causes of incidents and nonconformities, and developing and monitoring the implementation of corrective actions.

On November 28, 2025, an HSE forum was held with the participation of top executives of contractor organizations, general directors, and contract administrators of subsidiaries and affiliates in the Production and Service business areas. The forum identified key management and communication guidelines aimed at fostering a partnership approach and increasing contractor accountability for industrial safety results.

During the reporting year, KMG’s Industrial Safety Department conducted audits of contractor interactions at 15 subsidiaries and affiliates. Based on these audits, 613 recommendations were issued aimed at improving industrial safety, health, and environment management systems at both contractors and subsidiaries and affiliates. An additional 6,803 industrial safety inspections of contractors at production facilities were conducted.

During the reporting year, 941 contractors provided services and work for the Company’s subsidiaries and affiliates. Transportation services (22.02%), equipment maintenance and repair (15.73%), cleaning services (9.89%), and sanitary services (9.44%) accounted for the largest share of the total volume, while oilfield services accounted for 26.5%.

An assessment of the performance of contractors in the field of industrial safety, labor protection, and environmental protection for 2025 showed that the highest number of incidents were recorded in the areas of “Well drilling and repair” (35%), “Services” (26%), and “Transportation services” (26%).

To further reduce production risks, KMG will focus its work on auditing its subsidiaries and affiliates for compliance with corporate contractor management requirements, developing the role of contract administrators and supervisors, implementing mandatory pre-mobilization audits, developing digital reporting, and ranking contractors based on their performance in the areas of industrial safety, health, and safety, as well as raising the requirements for the competencies and training of contractor employees.

To assess the effectiveness of industrial safety, labor protection, and environmental management, coefficients are used in accordance with international practice. Current indicators confirm the need to transition to new standards aimed at improving the effectiveness of contractor management.

The lost time injury rate (LTIR) per 1 million man-hours involving contractors in 2025 was 0.45.

The fatality rate (FAR) per 100 million people/ hour involving contractors in 2025 was 10.38 due to the deaths of 8 production facility employees.

The motor vehicle crash rate (MVCR) involving contractors in 2025 was 0.07.