BAKU, Azerbaijan, September 7. Kazakhstan's
Ministry of Energy, Karachaganak Petroleum Operating (KPO), PSA,
IMBC, industrial companies and the business community discussed
prospects for expanding localization of the Karachaganak
project.
This was announced by the ministry's press service following the
meeting. The discussions focused on the development of local
content under the Karachaganak project and opportunities to
increase the participation of domestic manufacturers in the oil and
gas industry's supply chains.
"Representatives of the Karachaganak project presented long-term
plans for developing local content and discussed opportunities to
expand supplies of Kazakh-made products with domestic
manufacturers", the ministry said.
The participants also visited several industrial enterprises in
Shymkent, including Karlskrona LC AB, Asia Trafo and Renaissance
SHIK, where they reviewed the companies' production capabilities
and manufactured products.
The meeting also featured an exhibition of products made by
domestic manufacturers and a roundtable attended by First Deputy
Akim of Shymkent Aidyn Karimov and Head of the Project
Documentation Division of the Subsoil Use Department at the
Ministry of Energy Baglan Sembekova.
"For the Ministry of Energy, the development of local content is
one of the important areas of state policy. Our task is not simply
to increase the share of procurement from domestic manufacturers,
but to create conditions for the sustainable development of Kazakh
businesses, improve their competitiveness and integrate them into
the supply chains of major oil and gas projects," Sembekova
said.
A number of measures are already being implemented to expand the
participation of domestic manufacturers in procurement for major
oil and gas projects. These include improvements to tender
procedures, additional mechanisms to support domestic manufacturers
and a five-year program for the development of local suppliers.
The Karachaganak oil and gas condensate field, located in the
West Kazakhstan region, is one of the largest oil and gas
condensate fields in the world, with initial geological reserves of
more than 1.7 billion tons of liquid hydrocarbons and over 1.7
trillion cubic meters of gas. The field was discovered in 1979, and
pilot-commercial development began in 1984.
The Karachaganak project is implemented under a PSA concluded
between the Government of Kazakhstan and an alliance of companies,
including British Gas (Shell) with a 29.25% share, ENI with 29.25%,
Chevron with 18%, Lukoil with 13.5%, and KazMunayGas with a 10%
stake. The agreement was signed on November 18, 1997, for a term of
40 years and came into force on January 27, 1998.
Particular attention is being paid to creating sustainable
demand for domestic products, expanding the range of goods subject
to localization, developing the production capabilities of Kazakh
enterprises and improving their compliance with the requirements of
major operators.
Participants noted that long-term contracts and offtake
agreements play an important role in this process. Such mechanisms
enable domestic enterprises to plan investments, modernize
production and expand capacity with a clearer understanding of
future demand.
Work to develop local content is being carried out through
cooperation between the Ministry of Energy, PSA, major operators,
IMBC and subsoil users. Within this cooperation, project
requirements are analyzed, in-demand product groups are identified
and promising areas for local production are determined.
The participants emphasized the need to further strengthen
cooperation between the government, subsoil users, operators and
domestic manufacturers. This approach is expected to expand the
participation of Kazakh businesses in oil and gas project
procurement and contribute to the development of long-term
production supply chains within Kazakhstan.
