President of Kazakhstan Kassym‑JomartTokayev, during his visit to Atyrau region, met with local community and told about the problems of Kazakhstani content in the procurements of oil and gas operators.

“In 2018, the volume of the procurement of goods and services from Kazakhstani producers by the operators of three major oil and gas projects amounted only to 34%. This level hasn’t been growing for many years, it stays the same,” reportedKassym‑Jomart Tokayev during the meeting.

He says that, from its part, Kazakhstan fulfills all its obligations under agreements with investors, but doesn’t benefit in full.

“By uniting forces, we must understand what hampers the procurement of goods and services from local companies and resolve this issue,” adds the president.

According to the head of state, we need to build a system that will provide everyone with equal opportunities.

The words of the president are backed by the opinions of experts that spoke on this issue previously.

Thus, during the forum “Oil and gas sector of Kazakhstan in the context of the WTO”, which took place in Atyrau on February 22 of this year, organized by the Oil and Gas Strategic Partnership Development Council (Petrocouncil), Director of Centrefor Development of Local Content Ideology of the National Agency for Development of Local Content JSC, NADLoC, Ruslan Ibraimov, noted that the share of local content in such major projects as Tengiz and Karachaganak accounts for 30% and 54%, respectively.

According to another expert, Managing Partner of Dasco Consulting Group Darmen Sadvakassov, the share of local content in the procurement of goods at major oil and gas projects at average is less than 10%, the most part of which is simple bulk goods (gravel, sand, fuels and lubricants, etc.).

DarmenSadvakassov believes that there is a considerable potential for growth in the localization of the production of oil and gas equipment. According to him, for example, the volume of procurement of goods, works and services of subsoil users in 2017 amounted to KZT 4.5 trillion and in 2018 – KZT 6 trillion, which is a large outlet for Kazakhstani producers of equipment.

In this regard, he proposes to create an information system that would reflect advance and current procurement plans of Kazakhstani subsoil usersin a user‑friendly way, which would give businesses an opportunity to be better prepared for customers’ requirements.

“The introduction of a new system will ensure the balance of interests of all parties and will help develop production in Kazakhstan,” says DarmenSadvakassov.

In his opinion, the current system of subsoil users’ reports acceptance by the Ministry of Energy is not ergonomic, free access to up-to-date information for market participants, entrepreneurs and investors is very difficult.