The operator of the North Caspian project – NCOC – has published the needs for goods, works and services, so that kazakhstani companies could plan the development of their own production.
The Company (NCOC), the operator of the North Caspian Project being implemented under the North Caspian Production Sharing Agreement (NSPSA) signed in 1997, decided to publish a long-term “Procurement Plan” on the company’s official website. Now every entrepreneur can see the needs of the operator in goods, works and services and prepare to participate in tenders in advance. Previously, only announcements of procurements of certain goods, works and services were available.
This initiative has been implemented as a result of successful negotiations of the NCOC and the Strategic Partnership Development Council (Petrocouncil), established under the auspices of ATAMEKEN NCE, KazEnergy Association, as well as PSA. An important role in this was also played by the intention of NCOC itself to support domestic business and contribute to the development of a fair competitive environment in the oilfield services business, as this information is the basis for planning investments in new production and expansion of existing production. To date, more than 4,000 domestic companies are ready to provide services and supply goods to oil and gas operators. Separate personal contribution to the successful conclusion of negotiations on the disclosure of information on procurements was made by the Contracting & Procurement Manager – Marcel van Berkel, who received in 2018 the medal of the KazEnergy Association for contribution to the development of local content.
The oil and gas sector plays an important role in the economy of Kazakhstan. According to the estimates of the Dasco analytical agency, the share of the oil and gas sector in the country’s GDP was about 17-19% in 2015-2017. The share of the oil and gas sector in the state budget revenues was about 31-41% in 2015-2017. At the same time, in 2018, the total volume of procurement of goods, works and services in the oil and gas industry of the country reached KZT 6 trillion (USD 16 billion), which is 30% more than in 2017.
Kazakhstan’s content in large oil and gas projects for many years does not exceed 50% in total. Thus, in 2018, NCOC spent USD 424 million on the procurement of goods, works and services of Kazakhstan’s production, which is 43.4% of the total procurement of the North Caspian Project. Of these, about USD 12.2 million (27.3%) were spent on the procurement of Kazakhstani goods, USD 275.8 million – on works (56.3%) and USD 136 million – on services (31%).
It should be noted that for 15 years, from 2004 to the present day, NCOC has directed more than USD 14.3 billion for the procurement of Kazakhstani goods, works and services. At this time, NCOC is preparing for the development of the Kalamkas-Sea field, for which it also plans to attract domestic companies.
For reference
The North Caspian Project is the first major offshore oil and gas development in Kazakhstan. It covers five fields: Kashagan, Kalamkas-Sea, Kairan, Aktoty and Kashagan South West.
The giant Kashagan field ranks as one of the largest oil discoveries of the past four decades, with approximately 9-13 billion barrels (1-2 billion tonnes) of recoverable oil. The Kashagan reservoir lies 80 km offshore from the city of Atyrau in 3-4 meters of water and is more than 4 km deep (4,200 meters).
Today, the North Caspian Operating Company (NCOC) consortium includes seven of the world’s largest and most experienced energy companies: KazMunayGas, Eni, Shell, ExxonMobil, Total, CNPC and Inpex. Each shareholder is independently responsible for transporting and marketing its own share of production and for reporting and sharing that production with the government according to the NCSPSA.
The Oil and Gas Industry Strategic Partnerships Development Council Council is a consultative and advisory cooperation of legal entities that coordinates all unions, councils and other alliances affiliated with the National Chamber of Entrepreneurs Atameken, KazEnergy, the Ministry of Energy, of Investment and Development, PSA and other organizations. The Council aims to increase the efficiency of consolidated work and eliminate duplicative efforts and tasks. In addition, the Council protects the rights and interests of oil and gas companies to establish effective interstate and intersectoral cooperation.
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