What activities does the Petrocouncil perform to localize the production of goods in Kazakhstan

On September 4, a broadened meeting of the Regional Council of the Chamber of Entrepreneurs of Atyrau Region was held in Atyrau, chaired by the head of the general committee of the National Chamber of Entrepreneurs  RK “Atameken” Timur Kulibayev, with the participation of the akim of the Atyrau region Nurlan Nogayev, Heads of Oil and Gas Companies, representatives of business and state bodies of the region.

During the meeting, the official representative of National Chamber of Entrepreneurs  Atameken, responsible for cooperation with Oil&Gas Operators (TCO, NCOC, KPO) and the development of oilfield services Asylbek Dzhakiyev spoke about the activities of the Council for the Development of Strategic Partnerships in the Oil and Gas Industry (Petrocouncil), created under the National Chamber of Entrepreneurs  Atameken and the “Kazenergy” Association.

Since its creation, which is, since last November, the Petrocouncil has held dozens of different events designed to ensure the development of local content. In particular, meetings of representatives of RoK small and medium-sized businesses with the Management of such large Oil and Gas Operators as Tengizchevroil LLP (TCO), North Caspian Operating Company (NCOC) and Karachaganak Petroleum Operating (KPO) were organized. During these meetings, the parties were able to exchange views on how to improve mutually beneficial cooperation. Operators told business representatives how they see their potential contractors, what criteria must be met in order to become a provider of goods, jobs and services. In turn, entrepreneurs spoke about problems that can be solved, in particular with the support of customers themselves – Oil and Gas companies.

“Many contractors had questions regarding financial resources, we specially held two events on this issue. Some RoK banks agreed to conduct a special program specifically for financing oilfield service projects” said Asylbek Dzhakiyev.

In addition, Petrocouncil held negotiations with large foreign companies – manufacturers of original equipment in order to arrange the production of their goods in Kazakhstan. In this March, a meeting with Italian businessmen was held in Ravenna (Italy) with the support of Eni. Representatives of the Council also visited OTC 2019 – the International Conference and Exhibition of Offshore Technologies in Houston (USA), where they met with Chevron representatives. Negotiations were held with potential technology providers.

“Based on the results of the analysis, we identified the most promising areas where more efforts should be made to localize the production of goods, services and training of human resources” the speaker noted.

Contacts with foreign companies ready to localize production were established. There is good understanding of this matter with Oil and Gas Operators who support Petrocouncil initiatives.

“First of all, we communicate with large foreign companies regarding the localization of chemical products. We already have private industrial zones where we want to locate these production facilities” said Asylbek Dzhakiyev.

According to him, two private industrial zones were created in the Atyrau, on which territory the joint ventures with foreign manufacturers can establish production, service centers and assembly shops of large world companies.

“We are, together with National Chamber of Entrepreneurs now working on the issue of creating tax reliefs for participants of such localization projects. This is an important issue, since original equipment manufacturers will come if they have tax concessions” explains Mr. Dzhakiyev.

He noted that it is difficult for RoK manufacturers to compete with foreign direct suppliers of Operators, since they have customs tax exemptions, while local ones do not have. It is possible to resolve this issue if enterprises will have tax preferences. And, nevertheless, today the process of localization of about 20 types of goods is ongoing.

Procurement plans

“Another of our main achievements is that we have achieved the publication of the procurement plans by Oil and Gas Operators. With the assistance of PSA, the procurement plan of Dunga field operator – Total E&P Dunga GmbH was published, as well as through negotiations of the Petrocouncil with the Operator of the North Caspian Project, North Caspian Operating Company” Asylbek Dzhakiyev noted.

Similar negotiations were held with representatives of Tengizchevroil LLP, and it seems that Operator fully understands the issue.

“This is a very important achievement, because if there is a published procurement plan for operators, local suppliers will be able to forecast their production, be able to participate in supply tenders” the representative of the Council believes.

Staff training

Another important task that Petrocouncil sets for itself is the education and training of local qualified personnel. That’s why the Atyrau Hub was created in the Atyrau city.

“On the basis of APEC PetroTechnic we will train information technology specialists. Negotiations with IT managers of three large Oil and Gas Operators have already been held” said Mr. Dzhakiyev.

Here, not only training and education of personnel will be carried out, but also a favorable environment will be created for the development of innovations that will lead to the growth of the country’s economy.

In general, the official representative of National Chamber of Entrepreneurs Atameken for cooperation with Oil and Gas Operators and the development of oilfield services noted that the Council for the Development of Strategic Partnerships in the Oil and Gas Industry carried out a large amount of work to establish contacts between Oil and Gas Operators, foreign companies and RoK enterprises, which positively affects the development of local content.

In turn, the head of the general committee of the National Chamber of Entrepreneurs RK “Atameken” Timur Kulibayev noted that each organization that promotes the development of RoK content is very useful.

“You are a bridge between domestic manufacturers and Operators, you can increase the RoK content in the procurement of domestic subsoil users – this is your task” Mr. Kulibayev said.