JKX Oil & Gas plc Annual Report 201153At a glance01-17Board statements18-23Operational review24-36Financial review37-47CSR review48-61Directors' reports62-83Financial statements84-136. a preliminary hazard analysis to support the development application by demonstrating that risk levels do not preclude approval. a fire, safety and explosion studies, emergency response plans and updated hazard analysis undertaken during the design phase of projects. a construction safety study to ensure facility safety during construction and commissioning, particularly when there is interaction with existing operations. implementation of a safety management system to give on-going safety assurance during operations. regular independent hazard audits to verify the integrity of the safety systems and that the facility is being operated in accordance with its hazards-related conditions of consent. independent risk control using a structured process of identifying, measuring, monitoring and reporting risks. Cable pulling at our Koshekhablskoye facility - over 250km of cable was installed during 2011

54CSR review EnvironmentWe work hard to protect our people, their communities and also the environment, both close to our projects and in the wider world.We were very proud to achieve ISO 14001 Environmental Management accreditation in 2011. ISO 14001 is the principal management system standard which specifi es the requirements for the formulation and maintenance of an Environmental Management System. The environmental performance of our operations has implications for our relationships with our people, their communities, partner organisations, the media, governments, investors and other stakeholders.In 2011, we were pleased to continue the ongoing work with The Carbon Disclosure Project on our Carbon Management Plan. Our performance was good for 2011 even with a significant increase in construction in Russia.We have started a more detailed baseline study to engage in Supply Chain Management in the Carbon Disclosure Project during 2012.We have committed to reducing emissions by 12.5%, from 2008 to the end of 2012, in line with EU targets. Having initiated a reduction programme in 2009, we are well on our way to achieving this target by the end of 2012. With significant construction in 2011, our risk assessment processes identified the possibility that emissions would increase during the year. Despite the increase in production and construction activity, emissions remained within expected levels in 2011. We are confident that 2012 will see a controlled reduction in emissions.Climate change We recognise that CO2 and CH4 emissions from the use of hydrocarbons in our exploration and production activities contribute to climate change. These are generated primarily through operating combustion engines, cold venting of gas, electricity generation and well test operations.We monitor CO2 and CH4 emissions attributable to drilling, well testing and production across the Group allowing the targeting and implementing of appropriate reduction strategies. In Poltava and Koshekhablskoye our terminals are now self-sufficient and can maintain operations without the need for grid electricity, improving security of supply.In Ukraine, at our central production facilities, we upgraded generators resulting in improved emissions performance. It also means greater resilience for site production given the reduced requirement for diesel. The concept of climate change and the manner in which we work to reduce our potential contribution is an ongoing activity. In 2012 we are planning to assess how we can assist the Clean Development ObjectivesAchievementsReducing EmissionsZero discharge of chemicals to landor surface watersRestored habitat and hydrologicalregime to pre-construction state as soon as reasonably practicalNo loss of containment of productConsulting with Stakeholders ie localcommunities, workforce, NGOs and government agenciesContinuously monitoredWe continuously seek new initiatives to reduce emissions and monitor the impact we have on the environment. Baseline studies have been completed in Russia and environmental monitoring systemshave been identified , installed and in operationAchieved in 2011; continuously monitoredAchieved in 2011; continuously monitoredAchieved in 2011; continuously monitoredBy following the same rules and working together towards consistent goals, we can have a moremeaningful and quicker impact ongreenhouse gas reductions and improve our communities.