The former general manager of Tengizchevroil, Rzabek Artygaliev, spoke about how the company worked with the government, parliament and the public, about negotiations with workers, about local personnel and an alternative route for oil exports in an interview with Petrocouncil.kz.
You have worked for almost 12 years in senior positions in the largest company in Kazakhstan. In your opinion, what has been achieved during this period and what could you be proud of?
I started my work in TCO as a land manager in 2001. The first achievement that I can be proud of is that we legalized all the company’s lands, registered all real estate. Prior to this, there were no land acts or other necessary documents. We have done a great job and received recognition where I was awarded the title of honorary land surveyor of the Republic of Kazakhstan. In addition, we have introduced such new methods as a land acquisition which has never been practiced in the country before. The second achievement can be considered that I became the first Kazakhstani who was appointed as Deputy General Manager who oversaw environmental and labor protection issues. I am proud that we managed to establish work with government agencies on environmental issues. It was 2005-2006 when we clearly worked out on environmental permits, environmental protection plans were adopted and it brought great benefits to the company, the environment and the public.
Then I was assigned to set up the work of our office in Astana. In those days we had problems in working with government agencies, especially in the capital and I was sent there already as a deputy general manager. We then began close communication with government agencies, practically, at all levels. We worked with government agencies to protect the interests of the company and the balanced adop of mutually beneficial decisions on various issues was important. I had to talk a lot, talk, argue. At the same time, the role of such industry associations as Kazenergy, Petrocouncil, Kazservice should also be noted; the Union of Machine Builders of Kazakhstan all provide a dialogue platform for various parties. We don’t have a law on lobbying. At the same time, the interests of society and industries are sometimes lobbied through associations. Therefore, interaction through associations is very important for any company and all issues are discussed there. In addition, now all regulations must be coordinated with such industrial organizations. Therefore, we discuss many issues with them.
Apparently, then rumors began to circulate that the entire TCO leadership lives in the capital?
Maybe someone thought so, but the management was always in Atyrau and Tengiz. In the capital, we began to establish relationship with parliament. It was necessary to show the public the company’s operations, to explain what it does. I would especially like to note that when I was in the position of general manager, I was given an assignment by KMG and Chevron to organize work on government and public relations, which included work with the media, public organizations, government agencies,and the implementation of social projects. I think everything was done effectively, we managed to arrange this work. So, in 2006-2008, we were under severe criticism: we were criticized for doing nothing for society, only extracting oil and selling it, that no work is carried out outside the Atyrau region, etc. Therefore, we had to work through all with government agencies and show what we have achieved, what we can do. Then at the republican level, practically, 80% of journalists were negative towards us. Practically, all mass media criticized us in their publications. To relieve tension we agreed with journalists twice a year they will meet with the TCO GD to directly ask all their questions. I personally organized this. After that, criticism from the media decreased significantly, coverage of the company’s activities became more neutral and even more positive.
We held meetings with MPs. At first, we met with the members of the Atyrau region only and then we began to organize meetings with MPs from all the oil regions. The regional MPs have always expressed gratitude that we show them our work, answer all their questions where necessary and explain. In addition, in my opinion, in Kazakhstan we are the first and last company that the Senate met with us. This has never happened in history and we clearly explained what the PSA is and how the company works. The report of theTCO GD Todd Levy lasted about 20-25 minutes and more than an hour was spent on the Q&A session. They understood how company operates and what contribution it makes to the development of the country. Then I noted for myself that we need to continue working with MPs so that people in parliament know what TCO does and they take this into account when they pass laws. In general, we set an example for others, a standard by which we must work.
I believe that I put a lot of effort and achieved significant success in promoting TCO social projects. The voluntary social program “Igilik” was initiated when I worked as the akim of the Zhylyoi region and at the same time it was decided that part of the funds should remain in the Zhylyoi region. For the public and the state it was more profitable and efficient for the company to annually allocate funds for the construction of the necessary social facilities like schools, kindergartens, hospitals. Now all these social projects are working very well and the company went further and in 2010 we initiated a voluntary social investment program (CIP). The company began to move away from just sponsorship of individual social groups, instead, the company helps the population to equip public space, build parks, squares, etc. Even American colleagues said that there are no such good cases of social projects in the world. For example, in developed countries this is done on a commercial basis and not on a charitable basis.
Today, looking back I understand that a lot has been done and I am ready to use all this experience for the benefit of the future. A separate issue is the development of the Zhyloy region where the Tengiz and Korolev deposits are located, which are being developed by Tengizchevroil.
What are the company’s plans to participate in the development of the region, and the Atyrau region as a whole?
Basically, all social projects and programs of TCO are focused on the Atyrau region and Zhylyoi region directly. According to the company’s policy, the priority is the development of the Zhylyoi region because company operates here and receives income. One of the social infrastructure projects of TCO within the framework of Igilik was the reconstruction of the main pipeline, including the construction of a water pumping station in Kulsary. Thanks to this large-scale project Kulsary continuously receives clean drinking water. TCO also provides residents of the Zhylyoi region with the cheapest gas in the Republic of Kazakhstan – 22% below the wholesale price limit. In addition, since 2000, TCO has been supplying technical water to the villages of Zhana Karaton and Koschagil. According to the requests from the village akimats TCO will continue to provide technical water from April 15 to October 15 in Zhana Karaton 30,000 m3 per month and Koschagil 20,000 m3 per month. The total volume of water for the entire period amounted to about 3 million m3. Also, the district is implementing support for healthcare and education. Thus, since 2015, medical equipment has been purchased and installed for a total amount of more than 5 million US dollars for the needs of medical institutions in the Atyrau region.
A plan for the development of the Zhylyo region has been developed and soon it is planned to open a TCO office in Kulsary and resume the public advisory council. These initiatives worked before but COVID has made adjustments and now it’s time to revive them. The company transfers trillions of tenge in taxes to the budget. The company carries out all social projects within the framework of its voluntary program and all mandatory projects are carried out. The company understands that it needs to work with the population where it operates, pay attention to requests and help as much as possible but I am surprised by the position of people to ask for more and more.During the work of TCO at Tengiz, there have been many events, including workers strikes, conflicts between them. How did the company manage to solve them?
Yes, there were incidents among workers. The most notable ones happened in 2006, 2019 and January of this year. If the incident in 2006, involving Turkish workers happened spontaneously, the events of 2019 and 2022, in my opinion were organized by someone. I was always involved in resolving such incidents as a person who has experience in communicating with the workforce. I’m not talking now about the small strikes that took place there because of dissatisfaction with wages and so on. We reacted quickly to all these strikes and conflicts. We immediately flew to Tengiz and talked to people and explained what they were right or wrong about.
I would not say that our people who work there are all so aggressive and not amenable to persuasion. When you meet them, talk and explain, they understand everything. For example, in the last January incident there were provocateurs who provoked the people to riots and when we said that we would raise wages by 50%, they (the provocateurs) responded: “Hey, why not by 100%?!” And they claimed not to believe us. But among the strikers there were those (and most of them) who said that the company should be trusted, that if TCO said it would keep the promise and urged others to calm down. I believe that what trust we got is well-deserved assessment of the company’s activities.
What were the difficulties during the Covid-19 pandemic and how did you cope with it?
The period of the pandemic was a unique experience. Now there is a lot of criticism against companies, doctors, the government… But we must honestly admit that no one, not only in Kazakhstan, but also in the world really knew nothing about Covid-19,l and how to deal with it. Everyone learned from their experience and when you don’t know, you’re afraid. In such situations you try to take adequate measures. Everything was done by trial and error but we mamaged it. For example, it was not easy to demobilize 28,000 people from Tengiz at the same time and in the shortest possible time when the whole country was closed. We worked closely with the regional akimat, the Ministry of Health, the Ministry of Labor, the Ministry of Energy and other government agencies and institutions. They were all very helpful to us. We practically helped each other. TCO is the largest company in the republic, its influence on the country’s economy is huge, so it could not be allowed to stop. Together, we managed to get through all the difficulties of the pandemic, helping and supporting each other.
In your opinion, does the company invest enough in local content, in the development of local personnel?
Speaking about the Kazakhstani content, it should be remembered the economy of the republic and we are still a young country. All those ties that were under the Soviet Union were destroyed in the early 1990s. Tengizchevroil, as you know, was founded in 1993 but I would like to note that the equipment that was installed and operated at Tengiz, even before TCO, was foreign. That is, the same Complex Technological Line No. 1 (the first generation plant) was built under the USSR by a consortium of foreign companies where specialists and workers were from Hungary. When Chevron came, a joint venture was formed and TCO also was forced to build other technological lines on foreign equipment. The equipment is unique. You won’t get them here in Kazakhstan and no one will come to localize them. On the other hand, thanks to TCO, since 1993, many domestic service companies have been created in Kazakhstan.
These companies are now operating at the world standard level. The question is who created conditions? Of course, TCO. In the second half of the 2000s, when the second generation plant was built we traveled about a dozen regions, visited all the plants that existed at that time and worked with them. TCO wants to develop local businesses and does it. The company clearly works with local content. Since 1993, hundreds of Kazakh service companies have worked with us and are still cooperating. Some of them started with the provision of services in the form of cleaning the premises, cleaning the streets and now they are engaged in the construction and supply of equipment. Today they participate in other large projects in Kazakhstan because they have experience.The FGP is coming to an end today, what will happen to those 39 thousand people who will leave the project? Regarding the local staff involved in the FGP I can say that back in 2017, when the Future Growth Project (FGP) had just begun I said that we expect 20-30 thousand demobilized at Tengiz by 2022 and we should discuss with the government new projects in order to employ these people. Now that time is coming. But I don’t think people will be out of work because there are projects in the country where workers from Tengiz can find jobs. Because workers and specialists who have completed FGP have learned and acquired new skills they are competitive. We opened training centers, trained more than 25,000 people.
Recently, we published a list of key TCO managers in Telegram channel and it turned out that 50% of them are foreigners. Our followers ask why TCO hasn’t trained top managers from local staff in 30 years.
I do not agree with this opinion. According to TCO basic documents, only four top positions are assigned to KMG and one to the ministry of energy. During TCO’s activities several Kazakhstani personnel came to top managers from Chevron. The first “Chevron” Kazakh, Murat Mynbaev, took the position of GM for strategic planning and this is a key position. Then his place was taken by Kalibek Mukanov, also a native of the Zhylyoi region. Another top position GM manager for finance is also occupied by Zamzagul Bekova. Out of 11 TCO top managers, including the GD and deputy more than half are Kazakhstanis. This is of great importance when decision-making is considered since they will always take into account the interests of the republic.
And what is the prospect of a Kazakh becoming the GD of TCO?
In the future, of course, a Kazakh may be the general director. If it is prepared according to Chevron standars, then why not. But I would never say that all top managers should be local. There must always be expatriates. If the first person is a citizen of Kazakhstan, then the second person in charge of production must be an expatriate. We need foreign technologies, and, accordingly, foreign specialists.
Now, due to problems at the CPC, the question of alternative oil export routes is becoming urgent. Is it necessary for TCO or will we hope for an improvement in the operation of the pipeline?
An alternative is always needed. But at the same time, we must not forget that the CPC system was built specifically for the transportation of Tengiz oil and it was chosen as the most economically feasible route for export. Therefore, today all TCO oil is transported through this pipeline.
When there was no CPC we used alternative delivery routes. In the late 1990s, we shipped somewhere from 5 million to 8 million tons of oil by rail, transported through the Caspian Sea and shipped it to the Baku-Tbilisi-Ceyhan pipeline. But now an alternative route is needed not only for TCO but for all Kazakhstani oil. I believe the government is taking this into account and is considering acceptable alternatives. But we must keep in mind that in order to enter the BTC it is necessary to negotiate with Azerbaijan and other shippers. Nothing is impossible. You just need to meet, discuss, prove and achieve what you want.