KPO HOSTS LOCAL CONTENT DEVELOPMENT FORUM

URALSK, Western Kazakhstan Oblast, 3 April 2009 – Karachaganak Petroleum Operating B.V. (KPO) today hosted a Local Content Forum, “Partnering in Prosperity”, in Uralsk, the regional Centre of the Western Kazakhstan Oblast (WKO).

The Forum, which was officially opened by WKO Akim, Baktykozha Izmukhambetov and Bekzhan Kulbayev, Managing Director of KazMunaiGas, brought together over 200 suppliers and contractors from the Oblast. Over the course of the day, local business representatives received information about a range of initiatives which KPO is undertaking to support the further development of local businesses. Participants also received updates on KPO’s current operations and project development plans.

During the Forum, a Memorandum of Understanding was signed establishing a formal Working Group consisting of representatives from the WKO Akimat, KazMunaiGas, local businesses and KPO. This group will work together understand the capacity of local firms and look at ways to enhance and develop opportunities for local suppliers and contractors.

Commenting on the Forum, Roger Fox, KPO General Director said: “We recognise that we have an opportunity to build on the already strong relationship we have developed with local suppliers and contractors here in Kazakhstan. While KPO has an important role to play in local content development, suppliers need to work with us and our contractors to ensure they can deliver to specified standards, do it safely, on time, to the right quality and at the right price.”

Notes to editors:

Karachaganak Petroleum Operating B.V. (KPO) is a joint venture between BG Group (32.5%), Eni (32.5%), Chevron (20%), and LUKOIL (15%).

KPO oversees the expansion and development of the Karachaganak field - one of the world’s largest oil and gas condensate fields - which is located in North West Kazakhstan and holds over 1.2 billion tonnes of oil and condensate and more than 1.35 trillion cubic metres of gas.

Today, Karachaganak is producing at record levels and is the largest gas producing field in Kazakhstan, accounting for some 45 per cent of the country’s total gas production and around 16 per cent of total liquids production.  In 2008 the Venture produced 136.4 million barrels of oil equivalent.

Development of the field is bringing significant income to both the national and local economies and the project is providing long-term jobs to many Kazakh nationals.

Karachaganak was one of the first ventures to implement a vendor development initiative. Some 2,400 Kazakh vendors are currently registered on шеы supplier database. Since beginning of the FPSA in 1997, the local content level in all contracts assigned exceeded $2.5 billion.

During 2008, KPO achieved a level of Local Content of some $573 million or 56 per cent of the total contract value executed in 2008, which exceeded the agreed Local Content plan target of 43 per cent.

KPO actively promotes vendor development through a range of initiatives.  The Venture assists local businesses in developing key staff through international qualifications in environment, quality, health & safety, finance, project management and technical standards.  This programme enhances the capabilities of local companies which is a primary consideration when KPO formulates tender lists for the provision of goods and services. KPO always tries to match international contractors with Kazakh companies to encourage inward capital investment and skills and technology transfer.

For more information please contact:

Sergei Pushkarev: <link>PushkS@kpo.kz

Gulnara Sharibayeva: <link>ShariG@kpo.kz

KPO Corporate Affairs Department