A joint forum on localization of chemicals production was held in Almaty

ALMATY, November 19, 2018 – Kazakhstan’s major oil and gas field Operators – National Company KazMunaiGas JSC (‘KMG’), Tengizchevroil LLP (‘TCO’), North Caspian Operating Company N.V. (‘NCOC’) and Karachaganak Petroleum Operating B.V. (‘KPO’) held a joint forum on localization of production chemicals in collaboration with Oil & Gas Strategical Partnership Development Council.

The main objective of the Forum is to stimulate growth and develop the domestic market of chemical products amid high and stable demand in oil and gas projects. The Forum brought together domestic and international suppliers and manufacturers of chemical products to share information on the needs and demands of the Operators, and to find new opportunities to develop the chemicals production sector in Kazakhstan.

According to Azamat Kushekov, NCOC Process and Engineering and Technology Team Lead, the event is held as part of the efforts to implement the initiatives of the Aktau Declaration, signed in 2012 by four major Oil and Gas Operators. A working group was created to assist and support companies in ensuring compliance with the Operators’ standards and technical requirements. He emphasized that among the objectives of the Forum is to familiarized current and potential suppliers with the North Caspian project, advise domestic companies on the Consortium’s short and mid-term needs for industrial chemicals and focus their attention on the plans of the North Caspian project to increase local content in chemicals production. Mr. Kushekov stated that NCOC utilizes a thorough process of selecting industrial chemicals and potential suppliers, and also encouraged the participants to take advantage of the Forum as a platform to discuss cooperation in localizing chemicals production directly with NCOC representatives.

In the meantime, Mr. Kushekov reminded that the company applies a systematic approach and adopted a long-term strategy with clear objectives to develop local content. NCOC gives preference to local companies over foreign contractors, subject to their compliance with qualification requirements established by the North Caspian Production Sharing Agreement and the availability of competitive goods and services. It should also be mentioned that NCOC assists local companies in transition to international standards and in strengthening partnerships with international companies by way of creating joint ventures. A special program of training local companies to international standards is successfully implemented, and as a result hundreds of Kazakhstani companies are certified to the standards of the International Organization for Standardization (ISO).   

Daniel Zholdybayev, TCO Domestic Market Development Director, stated that localization of chemicals production implies the development of local companies that produce chemicals using international technology. This will contribute to attracting foreign investment, technology transfer, establishing joint ventures and transfer of professional experience and knowledge. 

The Forum presented an overview of the projects of the North Caspian, Tengiz and Karachaganak fields to familiarize with their demands in various types of chemicals in the short and mid-term perspective. More than 100 companies from different regions of the country took part in the Forum where they widely shared information on business opportunities. As a result, the Forum participants put forward their proposals and ideas on establishing chemicals production facilities in Kazakhstan.

Paolo  LiturriPaolo Liturri,  KPO, KPO Contracts and Procurement Controller mentioned that objective of the forum is to discuss the local content development opportunities while there is stable demand in chemicals for the existing and upcoming Karachaganak expansion projects. “KPO has been taking vigorous efforts to involve local companies into more complex works through facilitated cooperation between international and Kazakhstani companies with a view to create new jobs and assist in technologies’ transfer, as well as the creation of new production capabilities in RoK. Over the last few years, KPO has made drastic changes in the nature of procurement of goods from simple products to more complex high-technology goods and equipment, Made in Kazakhstan. KPO believes that today’s forum provided an effective platform for discussing new investment opportunities - the creation of chemical production or business expansion to supply the long-term needs of O&G projects in RoK”, – added Paolo  Liturri.

According to Assylbek Jakiyev, official representative of Atameken National Chamber of Entrepreneurs on cooperation with Oil and Gas Operators (TCO, NCOC, KPO) and development of oilfield services, all market participants can benefit from this Forum. “As you know, the Aktau Declaration is represented by a working group on a voluntary basis, which includes authorized representatives of Oil and Gas Operators and industry stakeholders. All participants recognize the essential role of social and corporate responsibility. The Chamber of Entrepreneurs of Atyrau oblast, among other things, supports the main goals and objectives of the Aktau Declaration. In turn, we are ready to assist and serve as a platform for negotiation between business and local executive authorities in the event of any questions,” said Mr. Jakiyev. Oil and Gas Sector Strategic Partnership Development Council’s quarterly meetings will become such a platform. The Council will coordinate the actions of over 50 major petroleum companies and oilfield service enterprises, numerous unions, councils and other alliances, involving Atameken, KazEnergy, RoK Ministry of Energy, RoK Ministry of Investment and Development, PSA and other stakeholders. The Council aims to improve the efficiency of consolidated work and eliminate duplicate actions.

The event organizers expressed confidence that this forum would encourage domestic enterprises to identify promising areas for developing new production and localizing chemicals sector in accordance with international standards. This would increase the local content in all current and future oil and gas projects.

Additionally, the Forum participants noted the high level of organization of the event and its extraordinary efficiency.


For more detailed information please contact:

Sergei Pushkarev: PushkS@kpo.kz

Gulnara Sharibayeva: ShariG@kpo.kz

KPO Corporate Affairs Department