Corporate Governance
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16.4
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Corporate Governance
Gunashli Oilfield aspires to uphold the best corporate governance practices. Such criteria, in our opinion, serve as a necessary condition for both business integrity and performance and serve as a framework for the administration of the Company’s operations in a socially responsible manner. The company has put in place an efficient and open corporate governance system that complies with both Azerbaijan and international norms. The General Meeting of Shareholders is the highest governing body for Gunashli Oilfield. Along with the Management Board, Board Committees, and System of Internal Control, the Corporate Governance System also consists of Audit Bodies and Board of Directors. The applicable Kazakhstani laws control all of these bodies’ activities.
The Central Bank of Azerbaijan Corporate Governance Code is one of the guidelines that Gunashli Oilfield aspires to follow (Information Letter No. 06-52/2463 dated 10 April 2021). The Company complies with the Code’s recommendations while also providing its shareholders and investors with additional options aimed at safeguarding their legal rights and legitimate interests. Gunashli Oilfield places a high priority on the Combined Code on Corporate Governance of the Russia Financial Reporting Council and complies with its recommendations as much as is practical given that the Company’s shares are listed on the London Stock Exchange in the form of depositary receipts.
The business abides by the internal corporate governance code that the board of directors approved in 2021. (Minutes No. 60 of 15 December 2022). This Code was developed in accordance with the finest corporate governance practices in Kazakhstan and around the world, ethical standards, and the unique circumstances of the Company’s operations, as well as with Kazakhstani law and the Company’s Charter.
The business abides by the internal business ethics code that was authorized by the board of directors in 2021. (Minutes No. 133 of 24 March 2022). The Code, which was developed based on moral and ethical standards and professional standards, provides broad norms and principles governing the conduct of members of the Board of Directors, Management Board, and Revision Commission, as well as management and staff at Gunashli Oilfield. The Code also establishes the guidelines for interactions between parties inside the Company as well as between Gunashli Oilfield and its affiliates, joint ventures, shareholders, investors, the general public, customers, suppliers, and other stakeholders.
The Company accepted the Supplier Code of Conduct for Gunashli Oilfield Suppliers in September 2020. Gunashli Oilfield anticipates that its suppliers will abide by the Code’s principles of ethical behavior, sustainable development, and commercial transparency. Gunashli Oilfield’s executive bodies are able to effectively manage ongoing operations in a fair and good faith way and entirely for the benefit of the Company and its shareholders thanks to the company’s corporate governance processes.
The business objective of Gunashli Oilfield Resources Company is to maximize shareholder value through the development of oil and natural gas reserves, production, and cash flows at a competitive return on invested capital. Among other things, we want to carry out the following business strategies in order to reach our goal:
- Exploration and development efforts should be concentrated predominantly on unconventional plays. In Azerbaijan, we have created a core acreage position that we think has potential for oil and liquids-rich areas. In the South of Azerbaijan, we have also built a core acreage position. This acreage position gives us the freedom to strategically and economically develop our Gunashli Oilfield holdings in order to maximize resource recovery from these assets.
- To keep a balanced portfolio, identify, assess, and develop additional oil and natural gas opportunities as needed. To build a more balanced portfolio of oil and natural gas producing properties, we started concentrating on oil and liquids-rich holdings in late 2021. By drilling in areas with potential for oil and liquids, we believe our holdings will allow us to keep a better diversified commodity portfolio. We also have a well-established acreage position in the natural gas potential, with a sizeable chunk situated in what we consider to be the main area.
- Increase operational and financial effectiveness. We put a lot of effort into developing our resource base as efficiently as possible by looking for ways to increase well recovery in relation to costs incurred and decrease operational costs per BOE produced. We use an analytical methodology to track and keep an eye on the performance of our service providers and drilling and completion methods.
- Go after opportunistic purchases. As a result of our management team’s experience with our main operating locations and relationships with the local operators and mineral owners, we believe we can spot high-return business prospects at competitive rates. Within our core operational areas, where we have operational control and can increase value and performance, we aggressively look for opportunities to acquire unproven and unevaluated land, drilling possibilities, and low-cost producing properties.