Local Content

To ensure delivery of the fair quality goods, services and works for the Karachaganak operations we cooperate with a large number of contractors, vendors and counterparties both in Kazakhstan and worldwide. We acknowledge the impact of our presence in the West Kazakhstan region and contribute to local sustainability goals by developing local content and creating procurement opportunities.

KPO is one of the first companies in Kazakhstan that successfully introduced the Local Content Development Programme. KPO has an extensive supply chain with contractors that perform a significant proportion of activities in the Karachaganak Field. During 2022, over 600 contractors have had valid contracts for goods and services with the Company.

In 2022, KPO awarded contracts and contract amendments to 388 contractors and suppliers, nearly 84% of which were local entities.

In 2022, KPO local content development initiatives have led to achieve the following results:

• In 2022, the Local Content share in purchases of goods, works and services in Karachaganak project reached 56.4% (US$ 511.7 mln);
• 18.0 % of total goods procured by KPO are locally produced (US$ 42.5 mln) with 7.3% Local Content share as specified in the SR-KZ Certificate¹.

Local Content Share in total KPO procurement of goods, works & services, 2014 — 2022

 

1 A certificate confirming that the product was produced or processed on the territory of Qazaqstan.This certificate is intended for circulation on the territory of Qazaqstan, for example, when participating in the procurement of subsurface users or in public procurement.

 

KPO gives the highest priority to Local Content share increase in the procurement of goods made in Qazaqstan.

Over the past few years, KPO introduced fundamental changes in its approach in Local Content development — from simple to complex, and achieved major results in the procurement of a number of high-technology goods and equipment made in Qazaqstan. As a result of local content development measures implemented by KPO, Qazaq producers have managed to improve their production capacities. In 2022, 27 contracts were awarded for a total value of US$ 115 mln to produce goods in Qazaqstan for the Karachaganak project, such as valves, transformers, instruments, fastening and piping materials, etc.