The share of Kazakhstan’s production in the procurement of goods carried out in 2018 by the three major oil and gas operators in the country –Tengizshevroil LLP (TCO), Karachaganak Petroleum Operating (KPO) and North Caspian Operating Company (NCOC) – was only 8%.
The Oil and Gas Industry Strategic Partnerships Development Council (Petrocouncil), consultative and advisory cooperation of legal entities established under the auspices of the NCE RK Atameken and the KAZENERGY Association. The organization represents and promotes the interests of oil service companies and operators for the fair and effective development of Kazakhstan’s oil and gas market.
The Council introduces the data on the procurement of goods for the oil and gas sector to interested parties.
Thus, according to the results of 2018, the oil and gas industry procured goods for USD 1.55 billion, in which the share of JSC NC KazMunayGas (KMG) was USD 350 million. The share of goods produced in Kazakhstan in the total volume of KMG’s procurements reached 56%.
Representatives of three major oil and gas projects of the republic – TCO, KPO and NCOC – procured goods in the past year for a total of USD 700 million. The share of local content was 8%.
Other participants of the domestic oil and gas market purchased products for USD 500 million. The share of goods produced in Kazakhstan was 33%.
Given that the share of TCO, KPO, NCOC in the total volume of procurements is 65%, KMG – 14%, and other market participants – 21%.
Meanwhile, oil and gas companies spent the greatest level of funding on the purchase of pipe products – more than USD 204 million. Goods of this category produced in Kazakhstan were purchased for USD 15.6 million, and imported from abroad – for USD 188.8 million. In other words the share of local content was 7.7%. It should be noted that in the total volume of procurements of enterprises in 2018, pipe products occupy more than 20%.
Oil and gas companies spent USD 39.6 million to purchase valves and flanges. The main part of this product was imported for USD 36.6 million. The share of local content was USD 3 million or 6.2%.
Almost the same amount – USD 41.6 million – was spent by subsoil users for the purchase of electric motors and generators. Therewith almost all products were imported, which cost USD 40.8 million. Kazakhstan’s production was purchased for USD 800 thousand, which amounted to 2% of the total purchase of electric motors and generators.
According to Petrocouncil, the republic continues to develop segments attractive to the oil and gas industry. For example, in 2018-2020 it is planned to establish or expand the production of premium pipes with large diameters, pump stations, measuring instruments and a number of other products.
It will be interesting for investors, including foreign ones, who are ready to create joint ventures with Kazakh companies, to learn about the segments attractive to the oil and gas market.
In particular, the number of promising industries includes the production of generators, turbines, electrical equipment, control and measuring instruments (sensors), drilling equipment, compressors, etc.
At the same time, it should be noted that Kazakhstan spent more than USD 220 million on seamless pipes and heat exchangers and more than USD 170 million on electrical and control equipment.