Azernews.Az

By Kamila Aliyeva

Three large oil and gas operators are implementing projects in Kazakhstan worth about $45 billion, said Rashid Zhaksylykov, chairman of the presidium of the Union of Oilfield Service Companies of Kazakhstan, at a press conference in Astana on February 13.

The arrival of foreign investment in the country enables local companies to develop their competence within the framework of joint ventures and consortia, he noted.

“According to the conditions announced by the state, the subsoil user reproduces the transfer of knowledge, technology and foreign experience in order to provide the domestic market with a world heritage. An important component of bilateral cooperation is the increase in the share of local content, through the participation of Kazakhstan companies in major oil and gas contracts,” the head of the union said.

Today the share of Tengizchevroil, Karachaganak Operating Company and North Caspian Operating Company accounts for 75 percent of all purchases of the Kazakh oilfield services.

“According to analysts, in the future this figure will increase. On the threshold of such opportunities, the main task of all participating players is the proper disposal of all resources,” Zhaksylykov added.

He also described the problems faced by domestic enterprises, that is low marginalization of the volume of work of local companies, the conduct of closed tendering procedures, the availability of certain preferences among foreign companies.

“Kazakhstan companies hope that the competent persons will take effective measures to resolve all existing disputes,” the chairman said.

He further noted that it is important for Kazakh oilfield services and contracting companies to jump into the outgoing train of the expansion projects of the Tengiz and Karachaganak fields.

To this end, he said, it is necessary to prepare Kazakhstan business in advance by developing measures of state support.

“Our oilfield services market is very profitable for foreign companies - of the 100 largest contracting companies in the world, more than 20 of them work in Kazakhstan. Nevertheless, in recent years Kazakh companies have been able to improve their competence due to competition in the local market. Today in Kazakhstan's oilfield service industry there are at least 1000 companies with a total number of more than 170,000 people. Turnover of oilfield services in the subsoil use sector averages $8 billion. In the list of the top 500 largest companies in Kazakhstan, 66 oilfield service companies are represented, with total tax payments of 280 billion tenges,” he said.

Zhaksylykov noted that the largest market for the Kazakh oilfield services is Russia. Domestic companies are present on the projects of Yamal, Moscow, Sakhalin and other oil and gas regions of the Russian Federation, providing construction, engineering and drilling services. The companies are also widely represented in such countries as Georgia, Iraq, Iran, and Jordan.

The western region of Kazakhstan is the leader in the volume of purchases of goods, works and services in the oilfield service industry.

This year, the active phase of the project of the future expansion at Tengiz field is being launched. Tengizchevroil has obligations to the state regarding local content in large packages, the share of which should be at least 50 percent. For clarity, only in the first quarter of 2017, this company purchased goods and services of Kazakh suppliers for more than $494 million, the head of the union said.

Nurlan Zhumagulov who is also a chairman of the presidium of the Kazakh Union of Oilfield Services Companies, in turn, said that about ten foreign contracting companies have expressed a desire to participate in major expansion projects in Kazakhstan's Tengiz and Karachaganak fields.

“If there is a crisis in the world now, such projects as Karachagak and Tengiz attract new players. To date, of the 100 largest contracting companies, 20 are already working in Kazakhstan, another 10 new contract organizations are looking for opportunities to create business in the country,” he said.

Conditions to work together with Kazakh companies are set for them.

He added that these companies will also be involved in marine projects in the future. The possibility of joint development of Khazar (CMOC Company) and Kalamkas-Sea (NCOC) fields is being studied.

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Kamila Aliyeva is AzerNews’ staff journalist, follow her on Twitter: @Kami_Aliyeva

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