For the first time in 10 years, oil and gas operators, banks and financial experts of oilfield services companies sat down at the negotiating table to solve domestic companies’ funding problems.
Today, on April 9, 2019, a round table on “Financing of SMEs and big business projects in the oil and gas industry” was held in Atyrau in the framework of “Atyrau Oil and Gas” exhibition. The event was organized by the Strategic Partnerships Development Council (Petrocouncil.kz), created under the auspices of NCE Atameken and KazEnergy Association. The representatives of such oil and gas operators as Tengizchevroil LLP (TCO), North Caspian Operating Company (NCOC), Karachaganak Petroleum Operating (KPO), as well as the heads of Sberbank JSC, ATF Bank JSC, Halyk Bank of Kazakhstan JSC, Forte Bank JSC, European Bank for Reconstruction and Development (EBRD), Kazakhstan Stock Exchange, oilfield services companies and other interested companies gathered in one hall to identify and try to resolve issues impeding the development of domestic oilfield services companies.
The participants of the conference discussed the issues of funding of and bank guarantees provision to Kazakhstan’s small and medium-sized businesses providing services to oil and gas operators. Banks representatives told about what financial instruments are available to business today, what the parameters are and who can use them.
The EBRD leading banker for SME, NazarTalibdzhanov, noted that the bank can participate in the funding not only of infrastructure projects, but also projects of small and medium-sized businesses. The representative of the Kazakhstan Stock Exchange noted that Kazakhstan’s small and medium-sized businesses need to look for financial sources not only in banks, but also in the stock exchange. There are two options to attract investment: to issue shares or bonds.
Veronika Ni, NCOC’s Financial Manager, advised companies not to be afraid and to voice complaints related to the terms of the contracts so that operators could adjust them in a timely manner. The representative of the NCE Atameken,AssylbekDzhakiyev, said that domestic companies need to develop financial literacy and promised to organise a series of seminars for oil services companies with the support of operators.
In general, the conference participants agreed that the meeting of oil and gas operators, businesses and banks should be held more often, and more detailed proposals to improve the conditions of cooperation between oil and gas operators and oil services companies should be developed within the framework of such meetings.
In addition, the dialogue raised issues such as the loosening of credit criteria for participation in TCO, KPO and NCOC projects, as these debtors are the most reliable. However, it was decided to leave a more detailed proposal to address this issue for the next meeting of the working group on financing of oilfield services companies.