Supply chain

KPO is committed to conducting its business ethically and in compliance with all applicable laws and regulations. Therefore, KPO enters into contractual relationships with suppliers and contractors, who maintain high standards and demonstrate commitment to personal and process safety when providing services to the Company, as well as maintaining the set standards of ethics, compliance and sustainable development. These fundamental principles are incorporated in and are evaluated at every stage of the contract and procurement process until the closure of the contract.

In 2020, KPO awarded contracts and contract amendments to over 500 contractors and suppliers, of which almost 80 % where local entities.

Graph 26. KPO contractors and suppliers,
2017 – 2020

Graph 27. Value of contracts and contract amendments (mln US$), 2017–2020

In 2020, KPO signed approximately 800 contracts and contract amendments for delivery of goods worth approximately US$ 180 mln, and approximately 700 contracts and contract amendments for services worth approximately US$ 880 mln.

We perform our contracts and procurement activities in compliance with the legislation and the Karachaganak Joint Operating Committee’s Tender Procedures, which regulate procurement of goods, works and services for the Karachaganak Project.

In April 2020, KPO adopted the new Tender Procedures. The procedures enabled the enhanced electronic documents exchange and processing including tender receipt and evaluation, which in turn addressed the issues related to social distancing and virtual work during the COVID-19 pandemic. The new version of the Tender Procedures also focuses on the development of local content including goods manufacturing in the Republic of Qazaqstan by means of early tenders, trial orders, contracts in exchange of investments, conditional bid reduction, and Kazakh-only tenders.

To help local potential contractors and suppliers better compete and to minimize disqualification risks for such companies, KPO has been focusing on structured pre-tender engagement sessions. In these sessions, clear explanations of KPO tender requirements are provided to the bidders, as well as lessons learned.

KPO is an active participant in the events conducted by Atameken, KazService and other oil-and-gas organisations or associations. Using multiple opportunities, KPO actively presents its requirements to the local market participants and encourages their development and growth including cooperation with internationally recognised and experienced suppliers of goods, works and services. Delivering Local Content targets is an important commitment of KPO to the Republic of Qazaqstan and is well recognized by KPO.

As a transparent operator, KPO annually publishes its procurement plans on its website at https://www.kpo.kz/en/suppliers/contract-plan.

Potential suppliers interested in participating in KPO tenders are encouraged to register and keep their “vendor’s profile” up-to-date in KPO Vendor database (please see details at www.kpo.kz) or directly in Kazakhstan Unified Vendor ALASH Database. It is very important for potential contractors and suppliers to provide accurate and relevant information on their competencies and experience to be considered by KPO in its sourcing strategies.