Long-term initiatives

Under the Agreement signed in November 2020 between the Ministry of Industry and Infrastructure Development of the RoQ, Ministry of Energy of the RoQ, PSA LLC, Association of Qazaqstan Machinery Industry and three major Operators: KPO, Tengizchevroil LLP and North Caspian Operating Company, in 2021 International Centre for Development of Oil and Gas Machine Building (IMBC) was established and began its work. The IMBC conducts its activities on behalf of the three operators, closely interacting with relevant ministries, the Authority and petroleum associations involved in the development of the national oil and gas machinery building.

The main objective of the IMBC is to increase local content in procurement by analysing the demand from the three Operators (TCO, NCOC and KPO) and studying the local market of existing manufacturers that could supply these goods that meet the requirements of the Operators. Also, the function of the Centre is to assist in expanding the production capacity of local manufacturers and developing their potential, where necessary. In addition, close cooperation with foreign companies is expected in the localization of their production in the Republic of Qazaqstan, as well as in attracting investments by facilitating the creation of joint ventures and the transfer of technologies and know-how.

In 2022, KPO participated in the following general meetings of the Association members:

• January — discussion of the results of IMBC activity in 2021, Work Programme and Budget, including KPI indicators in 2021;
• July — discussion of the results of IMBC activity for the first half-year period.

KPO provided IMBC with technical requirements/ specifications for product group «B» — pumps and gaskets, line pipes, industrial filters, HVAC for the analysis.

The meeting of the Association Board was held in February 2022, as a part of events carried out by the Centre. Following the meeting the RoQ Minister of Energy prepared and sent to Operators the Roadmap for Local Content development, aimed at increasing the level of procurement by Operators of three categories of goods (valves, instrument and electrical equipment). As part of Roadmap implementation, KPO jointly with the RoQ Ministry of Energy held weekly meetings from May to September 2022 to discuss the procurement issues:

• Six contracts were concluded for the total amount of US$ 93 mln;
• Four contracts are awaiting to be signed;
• One contract is under development.

In order to attract investment for development of local production in the territory of RoQ, in 2022 KPO continued working with Original Equipment manufacturers (OEM) to implement the signed roadmaps, as well as attracting new manufacturers. Since the implementation of OEM products localization initiative, KPO has signed 16 roadmaps for goods localization, awarded four contracts for US$ 10.4 mln with Original Equipment manufacturers. KPO will continue works on implementing 13 roadmaps with potential investments of more than US$ 11 mln and creation of more than 350 new jobs.