15 May, 2024, Astana — Karachaganak Petroleum Operating B.V. (KPO) participated in a contract signing ceremony alongside other major oil and gas projects operators.

The event was attended by representatives from the Authority — members of the Parliament, the Ministry of Energy of the Republic of Kazakhstan, ‘PSA’ LLC, and the Association of Legal Entities ‘International Centre for Development of Oil and Gas Machine Building’ all of whom expressed their support for the Operators’ commitment to boost localisation of the largest oil and gas projects in Kazakhstan, which is of significant importance for the country’s development.

KPO signed several commercial agreements with local enterprises with the view of enhancing its in-country value through increased local content in the Karachaganak Project. The agreements will further enable the procurement of locally manufactured goods and engineering services for KPO’s operation needs.

In particular, KPO signed a long-term agreement with ‘John Crane Kazakhstan’ LLP with the obligation to set up local production of mechanical seals and spare parts for ‘John Crane’ equipment used in the Karachaganak field. Another signed document is a mid-term contract with ‘WIKA’ LLP for the procurement of measuring instruments used in oil and gas production operations. These two contracts mark a significant milestone for KPO in localizing the manufacture of original equipment procured from renown international brands.

Furthermore, one of KPO’s main focuses is to involve local chemical producers in oil and gas operations. In this regard, KPO has today signed a Trial Order with ‘Nomad Supply’ LLP for supplying anti-turbulence additive ‘DRA-11’. This allows KPO to test chemicals from Kazakhstani manufacturers against KPO’s technical standards and operational requirements.

In addition to the contacts for goods localization, KPO has also signed a long-term engineering service contract with ‘TKJV’ (joint venture, Kazakhstan and Italy), which comes with increased requirements on local content. This initiative aligns with the RoK President’s recent statement to improve localisation of engineering services. Furthermore, KPO entered into a contract with ‘HSE Service’ LLP for certification and repair of warehouse systems, roof fences and metal ladders, as well as maintenance and repair of lifting equipment and lifting devices with 100% local service.

The recent initiatives demonstrate KPO’s commitment to localization of goods, works and services (GWS) which fully aligns with the RoK Government’s local content enhancement strategy.

As a major oil and gas operator, KPO contributes to the development of in-country value and overall Kazakhstan’s economy by involving local suppliers of GWS in the development of the Karachaganak Project. Since the signing of the FPSA in 1997, by the end of 2023, the total share of local content in the procurement of goods, works and services in Karachaganak Project has exceeded US $10 billion.

According to KPO General Director Mr. Marco Marsili, «KPO is committed to maximising local content in procurement and involvement of local suppliers in the Karachaganak Project. We believe, that the agreements signed today will benefit not only our Kazakh business partners by enlarging their offering to KPO and boosting their turnover, but also KPO, as this will help us manage our cost base in the long run and by emphasising the Venture’s role in the economic development of the country.»

Notes to Media:

Karachaganak Petroleum Operating B.V. (KPO) is a joint venture between Eni SpA (29.25%), Shell plc, (29.25%), Chevron (18%), Lukoil (13.5%) and KazMunayGas (10%).

KPO oversees the expansion and development of the Karachaganak field — one of the world’s largest gas and condensate fields.

KPO Public and Media Relations Department