A most important condition for Kazakhstan to become competitive is to support national entrepreneurship and train staff based on economic achievements and new technology. The oil and gas portion of the national economy will become an intellectually and materially prosperous industry.
For example, Karachaganak Petroleum Operating BV each year increases its participation in Kazakhstan’s project for suppliers of goods and services and trains local professionals. Experts note that the system at the company to enhance local content and search for producers is meant to provide all needed goods and services in the region and Kazakhstan and has been a very useful experience.
As a reminder, Karachaganak’s product sharing agreement that regulates relations between investors and Kazakhstan was signed 15 years ago. During this period of time, KPO’s parent companies, which include the BG Group, Eni, Chevron and LUKoil, invested roughly $16 billion into the development of the fields and the reconstruction of production.
As of today, the level of production and refining of hydrocarbons with the most modern technology exceeds past records. As a result, many organisations now want to take part in this huge endeavor. However, KPO places a very high standard for each of its partners. So how is the consortium implementing the programme for staff nationalisation and local content development in the project? Kairat Kapashov, KPO director for the development of local content expressed his opinion on this question.
Kairat Kapashov said, “The constructed scheme for relations helps enhance the potential of local enterprises and firms by creating conditions allowing them to increase their contribution into the field development. Local companies are also supported to obtain certificates in quality management in occupational safety, environment, technical standards and project management. Due to a consistent increase in their qualifications, staff at national companies is able to increase their competitiveness”.
“There are regular meetings and business forums being held to assess the potential of Kazakhstani suppliers and to search for new opportunities for further development. These meetings are also aimed at discussing the activity of the companies and their future plans.”
“KPO’s requirements for enhancing local content are effective for foreign contractors, which during the execution of agreements bring in national enterprises and provide them with advanced technology and experience as well as help in training staff. They will reach the highest level of qualification corresponding to international standards, which also creates conditions to replace foreign suppliers of goods and services by local enterprises, but only on condition that they comply with KPO’s standards.”
“As a result, during the last 15 years, long-term agreements and contacts have been closed between KPO and local companies. The figures are very impressive; as during the history of the operation of Karachaganak, KPO’s database has added over 2,500 Kazakhstani suppliers. They have rendered services for a value of over $4 billion. Last year, local content in the project constituted 38%, or $268 mln. At the same time, KPO applies a unified method for the calculation of local content, confirmed by the government of Kazakhstan.”
“For the purpose of the local suppliers modernization programme, KPO posts annual, mid-term and long-term plans for agreements that are expected to be tendered. This provides an opportunity for any local company to prepare in advance with sufficient quality and take part in each tender. This transparent and consistent reporting allows local suppliers to develop their own strategy to comply with the requirements of the largest employer in the region.”
“The project, which has no comparisons, was launched by KPO’s initiative in the city of Aksai, which is the administrative centre of the field. The foundation for an industrial park has been laid. This is a site for the creation of beneficial conditions to attract modern technology at an international level to local enterprises”.
“It is planned to organise the production of high-tech goods to increase national at production companies. The industrial park envisages trilateral interaction with the creators of innovations, the industrial park and a local firm. After it masters modern technology through joint ventures, the latter becomes a main producer of goods or services at a high level of quality.”
“This is a pilot project and so far is the only project in the country,” Kairat Kapashov explains. “It can fully be considered to be a breakthrough. The transfer of new technology to local suppliers will help start and then enhance the launch of quality and high quality products. Before the creation of the list of innovations on offer, market demand for the latter was researched in Kazakhstan and abroad. The industrial park will be an essential technical centre with infrastructure that will include industrial workshops, testing labs, assembly workshops, welding and technology workshops, a training centre, warehouses and a number offices,” Kapashov said.
“Local authorities together with the consortium set up an expert group for local company development programmes. All goods and services related to the field have been carefully analysed. These can be divided into three components. The first includes goods and services that are not produced in Priurale, which means that they can only be imported. The second component of goods and services are those that could be produced”.
But to achieve this, some additional preparations must be made. And finally, the third component includes those goods and services that could be produced by local companies in west Kazakhstan. The Aksai Industrial Park’s main goal is to improve the entire assortment of needed highest quality products at local companies.”
