Transparent selection of Tengizchevroil contractors and subcontractors, control over labour conditions of subcontractors will help to reduce social tension in Tengiz.
Strategic Partnerships Development Council (Petrocouncil), established under the auspices of Atameken NCE and KAZENERGY Association, says that Tengizchevroil (TCO) and Consolidated Contracting Engineering and Procurement S. A. L Offshore (CCEP) are actively working on the development of local content. Over two years of work on the CCEP project, more than 1,000 people were trained, Kazakhstani companies were actively involved in the work. CCEP is actively cooperating with the Council on the development of Kazakhstani content, publication of procurement of CCC, involvement of local subcontractors, productionlocalization, as well as training of engineers and involving them in management.
However, the positive work is offset by non-transparent selection process, as well as Tengizchevroil’s policy of non-interference in the relationship of contractors with subcontractors. While it is in this pair of relationships that tension and conflicts most often occur. In response to numerous appeals of entrepreneurs, on May 31, 2019, in Atyrau, Petrocouncil held a roundtable themed “Interaction of TCO contractors and subcontractors: synergy in production”, where key issues were raised. During this roundtable an issue concerning the late payment of works of one of TCO contractors to its subcontractors was discussed. On June 28, on the eve of the disturbances, Petrocouncil organized a roundtable with the participation of TCO contractors and subcontractors in a camp in Tengiz.
“We urge TCO to be more actively involved in the work of subcontractors who are the final executors of the work. Atameken NCE and KAZENERGY Association represented by Petrocouncil will provide the maximum assistance and will become an effective platform for civilized dialogue and resolution of many issues”, noted Assylbek Dzhakiyev, official representative of NCE Atameken for cooperation with oil and gas operators (TCO, NCOC, KPO) and development of oilfield services.
In addition, TCO needs to monitor not only contractors but also subcontractors in terms of compliance with working and paymet conditions. General TCO contractors, such as CCEP, need to follow the example of TCO to develop a strategy to replace foreign management with local specialists.
The task of Petrocouncil is to coordinate the activities of all unions, councils and other alliances acting with the participation of Atameken NCE, KAZENERGY, as well as to cooperate with the Ministry of Energy, the Ministry of Investment and Development, PSA and other interested structures in order to increase the share and quality of Kazakhstan’s content in the largest oil and gas projects of the country.
“The development of local content is not only the replacement of foreign labor with domestic, it also includes localization of production, development of Competence Centers, innovative development of production. According to the last meeting of the TCO FGP‑WPMP Expert Group, the overall local content in the project is 30%, it consists of goods, works and services purchased in Kazakhstan”, said Assylbek Dzhakiyev. He confirmed that, at the moment, Tengizchevroil provides assistance in the organization of localization of production. Thus, negotiations were initiated with leading foreign manufacturers of original equipment (Original Equipment Manufacturer – OEM) on the localization of production and service centers in Kazakhstan and their placement in Atyrau region. Thus, there will be new jobs, and there will be a transfer of technology.
Assylbek Dzhakiyev also calls for TCO to work more closely with Petrocouncil as an efficient conveyor platform for a timely response and resolution of issues of local content development. He also stressed out that TCO makes a significant contribution to the development of local staff.
The Oil and Gas Sector Strategic Partnership Development Council (Petrocouncil) is a consultative and advisory association of legal entities established under the auspices of Atameken NCE of the Republic of Kazakhstan and KAZENERGY Association, which coordinates the activities of all unions, councils and other alliances acting with the participation of Atameken NCE, KAZENERGY, the Ministry of Energy, the Ministry of Investment and Development, PSA and other interested structures. The Council aims to improve the efficiency of consolidated work and eliminate duplicate actions. In addition, the association represents and promotes the interests of oilfield service companies and oil and gas market operators to ensure fair and efficient oil and gas market development.