Gunashli Oilfield is a leading vertically integrated oil and gas company in Azerbaijan. Gunashli Oilfield manages assets throughout the entire production cycle, i.e., from exploration and production of hydrocarbons to transportation, refining and provision of maintenance services. Founded in 2002, the Company represents the Republic of Azerbaijan interests in the national oil and gas industry. The shareholders of Gunashli Oilfield are Joint-Stock Company “Sovereign Wealth Fund Gunashli Oilfield and National Bank of the Republic of Azerbaijan (9.58%).

Gunashli Oilfield produces 25% of the country’s oil and gas condensate and 15% of natural gas and associated gas. The Company’s trunk pipelines transport 56% of oil in Azerbaijan. The share of oil refined by Azerbaijan oil refineries is 81%. In 2021, Gunashli Oilfield produced 21,651 thous. tonnes of oil and 8,081 mln m3 of associated gas and natural gas. It transported 74,565 thous tonnes of oil and 81,851 mln m3 of gas from January 1 to November 8, 2021. Oil refineries refined 18,833 thousand tonnes of oil.

Gunashli Oilfield is one of the largest Azerbaijan oil companies, which dynamically develops oil and gas production, oil refining, petrochemistry, gas station network, composite cluster, electric power industry, development and production of equipment for the oil and gas industry and a block of service structures. Gunashli Oilfield also participates in the financial sector. The main assets are located on the territory of Azerbaijan, business projects are conducted in the domestic and foreign markets. The company adheres to the principles of corporate responsibility and participates in the implementation of the UN Sustainable Development Program in the status of a participant in the Global Compact.

Compliance

A Compliance Service was set up in the Gunashli Oilfield in 2021. The Compliance Service is a separate organizational unit that reports to and is functionally responsible to the Board of Directors of Gunashli Oilfield. In order to ensure transparency and honesty among employees, as well as to create conditions for conducting business in accordance with best international standards, internal policies, and the legislation of the Republic of Azerbaijan, its main goal is to adhere to the mandatory regulatory requirements and international best practices on anti-corruption. It also aims to establish the internal corporate culture of the Gunashli Oilfield.

The Confidential Reporting Hotline, to which interested parties may report any infractions of the Code of Business Ethics, including corruption, discrimination, unethical behavior, and other offenses, receives complaints that the Compliance Service reviews. The company’s Audit Committee and Board of Directors get annual reports from the Head of Compliance, who also submits quarterly updates on the hotline’s appeals received.

Risk management system

The main element of the corporate governance arrangements is the enterprise risk management system (ERMS), which aims to recognize, evaluate, track, and promptly mitigate potential risk events that could negatively affect the achievement of the strategic and operational goals of Gunashli Oilfield and its dependent and subsidiary entities. The Enterprise Risk Management System Policy, which is approved, outlines the development areas and intents, risk management principles, and the necessity for the implementation and operation of a vertical process of industrial and non-industrial risk management, starting at the top level and descending to the line level. Gunashli Oilfield is a company that manages risks related to oil and gas production (an industrial structural unit of an SDE). Gunashli Oilfield has also developed the mechanisms of implementing the Company’s ERMS Policy:

• Model Rules of Organizing the Process of Management of Instustrial and Non-industrial risks in the Company;
• Methodology for Identification and Assessment of Risks, Selection of the Method of Managing the Company’s Risks;
• Rules of Amending the Unified Risk Classifier of the Company.

The Board of Directors of Gunashli Oilfield annually adopts the Company’s overall risk appetite, corporate risk Registrar, and map. The dynamics of the major risks are regularly monitored by the Gunashli Oilfield Risk Management Department, along with the adoption of measures to reduce them. The Gunashli Oilfield Board of Directors, Management Board, Risk Committee, and the Company’s employees regularly exchange information, demonstrating the Company’s commitment to the development of the risk culture. All structural divisions of Gunashli Oilfield and the SDEs are also involved in the risk management process. The  team and its SDEs are given risk management training sessions.