JKX Oil & Gas plc Annual Report 201161At a glance01-17Board statements18-23Operational review24-36Financial review37-47CSR review48-61Directors' reports62-83Financial statements84-136Why was it successfulThere were a number of reasons why our LPG project was successfully merged into our existing operations on time and with minimum interruption. These included:Planning. Significant LPG market analysis took place for many months before a business plan was developed . A detailed annual Business Plan was developed in advance to organize and focus its commercial activities . The preparation of a high quality engineering design at the conceptual design stage Health and safety. The project was executed with an HSEC Plan which was agreed with senior management and implemented rigorously at site - a very strong site safety culture was embedded within the team. We used proven technology - the process plant was purchased as a packaged unit from an existing vendor who has already supplied many similar units to many customers throughout the world . Proven suppliers - the chosen supplier had intimate knowledge of our existing plant from previous work completed enabling the very best performance from interface with the existing process. Deviations from the suppliers standard design were kept to an absolute minimum . The LPG Project Management Team resided in the field at the job site . No Lost Time IncidentsEnvironment. The planning process included a detailed Environmental Impact Assessment . The project team approved an Environmental Management Plan which was adhered to throughout constructionCommunity. We worked hard on community relations which ensured local communities were well informed. We focused on purchasing from local and national Ukrainian companies where possible. Proven local sub-contractors were used, who brought with them lessons learned from previous projectsRigorous control of cost and schedule was exercised throughout the duration of the LPG project with project schedule and cost reports updated weekly. Communication throughout the project was frequent, rapid and clear.ConclusionThe LPG Project is another benchmark of what is possible within PPC when talented and motivated people work together towards common goals of safety, quality, cost, national content and schedule. Experienced local employeesWherever possible the project was staffed by existing PPC Ukrainian employees. For ongoing production and commercial operations, additional local staff were recruited early in the project and were ableto gain experience on the existing operations before LPG start-up. Experienced Project Managers were used who had completed many previous projects on thislocation. In addition a number of group departments collaborated throughout to ensure the successful project delivery including: Health Environmentaland Safety, Operations,Maintenance, Engineering,Construction, Purchasing, Finance,Human Resources, Commercial, Government Relations, Community Relations, Logistics and IT.
62The DirectorsSir Ian ProsserChairman (68)Sir Ian was Chairman and Chief Executive of Bass plc and latterly Chairman of InterContinental Hotels until 2003. He was formerly Non-Executive Deputy Chairman of BP plc, having joined as a Non-Executive Director in 1997, and was also Senior Independent Director of GlaxoSmithKline, a Non-Executive of The Boots Company and of Lloyds TSB. He is Chairman of The Navy Army & Air Force Institutes, Chairman of BP Pension Trustees Ltd and a Non-Executive Director of Sara Lee Corporation.Martin Miller Technical Director (64)Martin Miller joined JKX in 1994 as ChiefGeologist and has held a number of seniorpositions in the Company, includingdirecting JKX's Georgian operations. Mostrecently, he has assumed responsibility for JKX's ventures in Russia and Ukraine. Martin is a Chartered Engineer and has over 35 years of experience in the oil andgas industry, including senior positionswith Mobil and BP.Dr Paul DaviesChief Executive Officer (62)Dr Paul Davies joined the Board on30 January 1998. He has been active inthe oil and gas industry since 1976 andwas the co-founder of the JP KennyGroup of Companies which tradedinternationally in oil and gas engineering,oil and gas exploration and production, subsea survey and inspection, and shipping. He has extensive experience of business in the former Soviet Union andwas a founder of JP Kenny Exploration & Production Ltd, the forerunner of JKX Oil & Gas plc. He holds an Honours degree in Civil Engineering and PhD instructural mechanics from University College London.Peter DixonCommercial Director (57)Peter Dixon joined the Board on 1 July 2007 with 27 years of broad experience in the upstream oil and gas industry in the UK, Middle East, Africa and the former Soviet Union. Peter graduated in Physics and Geology from Sunderland University and spent 15 years working in geophysical and management roles within the SSL and Schlumberger group companies. Since joining JKX in 1995, Peter has occupied a number of senior positions within the group including Asset Manager Ukraine, Group Commercial Executive and General Director of Poltava Petroleum Company.Cynthia DubinFinance Director (50)Cynthia Dubin has more than 27 years experience in the oil and gas and energy sectors. She was previously a co-founder and Chief Financial Offi cer of Canamens Energy Ltd, an oil and gas exploration and production company which focused on North Africa, the Middle East and the North and Caspian Sea regions. Prior to that, Cynthia worked for Edison Mission Energy in London for 12 years where she joined as Finance Manager before becoming Vice President and Finance Director for Europe, the Middle East and Africa in 1998.