What is Aktau Declaration?
The Concept development project of the Kazakh content or “Aktau cooperation declaration” (Aktau Declaration) was signed in September 2012, following the meeting with the participation of the national company and three operators (NC KazMunayGas JSC, Tengizchevroil LLP, Karachaganak Petroleum Operating B .V., North Caspian Operating Company B.V.) in London in June 2012. Aktau Declaration is the expression of the consent of companies not legally binding, to develop areas of cooperation and principles of joint action in support of Kazakh (local) content. During these years, operators continue to follow the document.
The task of the Concept Project is to create synergies by developing uniform mechanisms for the development of programs for the development of the local content of all operators, investors and government institutions. Firstly, the document served in order for the national company and three operators to have grounds for publicly exchanging insensitive and non-confidential information in order to develop new, joint initiatives hereafter. Herewith, the document does not exclude the right of everyone to develop independently strategies for the development of local content.
Since the document was signed, annually operators develop the Plan of Actions for Aktau Declaration, based on which they hold working meetings, forums and monitor synergistic progress. The sectoral working group consisting of representatives of the national company and operators coordinates its efforts with the Ministry of Energy (formerly the Ministry of Oil and Gas), the Ministry of Industry and Infrastructure Development (formerly the Ministry of Investment and Development), the Ministry of National Economy, as well as with regulatory bodies and non-governmental organizations such as Association KAZENERGY, Association AKSII (Council of Foreign Investors under the President of the Republic of Kazakhstan).
The Concept project on development of the Kazakh content should not conflict with the relevant production sharing agreements (PSAs), management systems and procedures established by these companies and any antitrust / antimonopoly or other legislation, or any other laws applicable to one or more parties.
Coordination groups in 6 directions
Mechanical Engineering – development of existing and creation of new production facilities in Kazakhstan
Service companies -development of existing and creation of new production facilities in Kazakhstan
Human resource development
Unification of bidding procedures
Creating the common database of Kazakhstan sector of industry
What has done?
For six years of work Aktau agreement has proved that consolidated work produces a synergistic effect. One of the earliest and most important achievements was that the operators identified and agreed TOP 10 product codes for development and localization of production. In addition, although, separately for each product item, the Kazakh content is still not calculated, for Kazakhstan business this list is a sort of mini-roadmap for future projects.
TOP 10 products and services for development of domestic content:
- tubular goods;
- flanges and fittings;
- piping valves;
- electrical equipment;
- high-pressure vessels;
- Heat exchangers
- Maintenance service;
- Support services for downhole equipment;
- Waste management;
- Support services for design, procurement and construction
In 2017, KPO, TCO, NCOC and Kazmunaygas held a business seminar on the procurement of valves and fittings. At the seminar, operators told businessmen about long-term and short-term needs of this product, technical requirements, company qualification, how to participate in the procurement of operators. It was assumed that, having learned in detail about the supply capacity, technical requirements and procurement, domestic businessmen would begin to produce more actively fittings and valves in Kazakhstan. For the first time, Kazakhstani businessmen were able to plan production not for individual projects, but for the industry as a whole.
One of the initial tasks of the Concept project for development of Kazakh content was unification of prequalification of potential suppliers. Using a single supplier base for all operators – ALASH, the oil and gas operators planned to take upon field of audit the suppliers’ compliance with minimum criteria of the operators. In 2015, the project was set up, and today more than 4,000 companies have registered and have been prequalified in the system.
Another contribution that Aktau Declaration will make to the economy of Kazakhstan is assistance in creating the necessary conditions and attracting foreign investments in priority sectors of economy with the transfer of knowledge and technologies.
What comes next?
In 2019, The Concept development project of the Kazakh content (Aktau Declaration) received a sharp intake of breath – the Council for the Development of Strategic Partnerships in the Oil and Gas Industry, established under Association KAZENERGY and SPE RK Atameken. This body will develop actively the local content. Besides the usual meetings, the Council proposes to expand the program and work plan to make the site more efficient. For example, the Council proposes to unify the list of standards and technical requirements for goods and equipment so that machine builders and other manufacturers can plan the localization of large-scale production facilities. In addition, the Council identifies several priority areas designed to intensify efforts on Aktau Declaration.
Improving business relationships between all interested parties of the market through continuous open dialogue within business and informal meetings with leaders of TNC, national companies, ministries, and others.
DEVELOPMENT AND SUPPORT
Creating long-term partnerships, consortia, producing companies – reliable contractors and subcontractors. Organizing and conducting small and large meetings, working groups to solve highly specialized issues of the oil and gas industry.
COMMUNICATION AND INFORMATION
Developing effective communications on integrated issues concerned all interested parties. Analytical, informational consulting and expert support of the Council members, including access to information resources of SPE RK Atameken and Association KAZENERGY. Popularization of the achievements of companies, as well as the Council’s activities in regional and republican media.
Consolidation of efforts in the field of staff development, including the organization of training seminars with the participation of world speakers. Clarification of changes in the legislation of the Republic of Kazakhstan and other regulatory documents. Answers to questions about the relationship of subsoil users, oilfield service companies, as well as government agencies.
The Council, as an independent consulting and advisory body, will undertake the task of identifying and recognizing outstanding leaders of the industry as state and departmental awards. It will also facilitate the participation of the Council members in international industry competitions.