Official Source of the
Prime Minister of the
Republic of Kazakhstan
Close button

Kazakhstan initiated creation of International Center for Development of Oil and Gas Engineering and Service

Friday, 19 June 2020, 13:07:10

At the government session chaired by the Prime Minister Askar Mamin, Minister of Energy Nurlan Nogayev reported on the development of engineering in the oil and gas industry.

As Nogayev noted, the purchases of goods, works and services in the oil and gas industry in 2019 amounted to about 7 trillion tenge, which is 15% more than last year. At the same time, the share of three large operators — TCO, NCOC, KPO — is about 5.7 trillion tenge, which exceeds 80% of the total purchase of goods, works and services.

The total local content in large projects was about 39%, while the share of locally produced goods was only 10%.

“These indicators indicate that the potential of domestic producers is not fully utilized, and therefore the work of the ministry and other departments is aimed at increasing the share of local content in large oil and gas projects of Tengiz, Kashagan and Karachaganak,” Nogayev said.

In April 2019, an interdepartmental working group for the development of oil and gas engineering was created, which included operators of large projects of the Ministry of Energy of the Republic of Kazakhstan, Ministry of Industry and Infrastructure Development, PSA LLP, Kazakhstan Engineering Union and others.

One of the activities of the working group is to conduct an analysis to identify target product groups and interested domestic enterprises.

As input data, procurement plans and a list of installed equipment were used, as well as an analysis of the level of readiness and interest of domestic producers in localizing the necessary equipment.

Based on the analysis of goods, six main categories have been created and 18 domestic producers have been identified who are interested in their production.

The technical specifications of the equipment planned for purchase were transferred to the Union of Mechanical Engineers of Kazakhstan and NCE Atameken for their further distribution to interested domestic producers, as well as a series of meetings of technical specialists of operators and representatives of the Union of Mechanical Engineers at which technical specifications of goods were discussed.

Based on the results of the analysis, the following work was carried out:

  • NCOC conducts work on 5 priority companies for concluding agreements in 2020.
  • TCO has placed test applications for Bemer Armaturen Kazakhstan LLP and Karlskrona LLP. In addition, 9 service providers passed qualifications and began to supply goods and services for TCO.
  • In KPO during 2020-2021, it is planned to localize goods in 13 categories and conclude 5 contracts with domestic producers.

In addition, an action plan for the development of oil and gas engineering in the Republic of Kazakhstan for 2019-2025 was developed and approved.

The phased localization of the production of original equipment in the Republic of Kazakhstan is defined as one of the priority areas of activity for the coming period. In further work, there is a high potential for localization of production.

In the medium term, it is planned to localize such goods and equipment, such as, for example, various consumables (seals, gaskets, filters), fasteners, valves, electrical products, instrumentation and automation).

This work successfully continues with a further increase in the complexity of the equipment being prepared. In addition, work is underway to localize the production of simple goods and to place test applications. Over the past 2.5 years, in the Karachaganak project, domestic producers were awarded contracts for the production and supply of goods of personal protective equipment, heat exchangers, drill bits, casing strings, modular substations, etc.

At Kashagan, contracts worth $53 million were signed during this period. In 2020, 2two contracts were additionally concluded.

TCO has localized goods totaling $30 million. All of these goods were previously imported from abroad.

At the initiative of the Ministry of Energy and the authorized body, work was carried out with NGOs and NCOC on issues of amending the tender procedures in terms of local content.

Unprecedented rules have been introduced for the implementation of the “Contract convertible into investments” mechanism, the extension of the existing contract on the terms of localization of foreign goods, the provision of a conditional discount, and the holding of a tender among Kazakhstani suppliers.

In addition, the procedure for posting procurement plans has been clarified on the operators' websites, which includes the name and a brief description of the goods, work and services to be purchased, the estimated date of the invitation to tender, the contract award period and the estimated procurement budget.

It is expected that the implementation of this initiative will become additional support for domestic producers and will facilitate their maximum involvement in purchases conducted by oil and gas project operators.

“In order to help increase the local content in goods and services, we initiated the creation of the International Center for the Development of Oil and Gas Engineering and Services, which will be a single window between the three operators of the Production Sharing Agreement and coordinate the ongoing work. When creating the center, the experience of similar research and development centers created by SHELL and ENI will be used. The main goal of the center is to localize the production of goods / services for the oil and gas industry of the Republic of Kazakhstan for the needs of three operators, in particular, through the creation of new industries and service centers, as well as expanding the capabilities of existing domestic producers and service companies,” the minister said.

Currently, the conditions for opening the Center are being agreed with the shareholders of three operators.

“We want shareholders of international oil companies to support this center by providing their specialists, technical and engineering competencies. The center will be created on the example of KazEnergy and will be supported by three operators,” Nogayev emphasized.

Nogayev also said that in the medium term, the work of the Ministry of Energy will continue in the following areas: implementation of the action plan in the established areas until 2025, development of service centers for equipment maintenance and production of spare parts, development of local personnel.

News feed
14 May 2021, 17:27
Askar Mamin meets with World Bank Vice President Anna Bjerde
14 May 2021, 16:46
Development of mass sports, domestic tourism and plan of events for celebration of 30th anniversary of Independence of Kazakhstan — Aktoty Raimkulova on work of the Ministry of Culture and Sports
14 May 2021, 16:02
Askar Mamin meets with Minister for Development Cooperation and Foreign Trade Ville Skinnari
14 May 2021, 15:12
New package of measures to ensure food security to be implemented in Kazakhstan
14 May 2021, 12:44
Government holds meeting on stabilizing food prices
13 May 2021, 17:51
Askar Mamin meets with head of Orano French nuclear company Claude Imauven
13 May 2021, 17:22
Mobile applications, quality of communication and internet, online provision of public services — on digitalization in Kazakhstan
12 May 2021, 18:44
Marat Sultangaziev appointed Vice Minister of Finance
12 May 2021, 18:20
Kanat Baedilov relieved as Vice Minister of Finance
12 May 2021, 18:12
Ali Altynbayev appointed chair of State Revenue Committee of the Ministry of Finance
12 May 2021, 13:42
Machine-building industry of Kazakhstan shows stable growth of 120.6% — Beibut Atamkulov
12 May 2021, 13:04
By 2024, Kazakhstan’s market to be provided with domestic goods by 100% — Bakhyt Sultanov
12 May 2021, 12:38
In Kazakhstan, business activity index remains in growth zone for second month in a row — National Bank
12 May 2021, 12:33
Over 18 billion cubic meters of gas produced in Kazakhstan in the first quarter of 2021 — Nurlan Nogayev
12 May 2021, 10:38
Qualitative changes observed in structure of economic growth of Kazakhstan — Ministry of National Economy
12 May 2021, 10:28
In first quarter of 2021, gross agricultural output increased by 3% — Saparkhan Omarov
12 May 2021, 09:55
Following results of 4 months of 2021, economy of Kazakhstan entered a growth path
12 May 2021, 00:33
Government session to be held May 12 in Ukimet Uyi
11 May 2021, 10:13
Government considers development of cryptoindustry and blockchain technologies
09 May 2021, 08:10
Prime Minister Askar Mamin congratulates Kazakhstanis on Victory Day
07 May 2021, 08:05
Prime Minister Askar Mamin congratulates Kazakhstanis on Defender of the Fatherland Day
06 May 2021, 22:28
Measures to restore economic growth, construction of schools and modernization of social infrastructure — on projects implemented in East Kazakhstan region in 2020
04 May 2021, 13:34
Over 24 thousand business entities to be provided with microcredits in 2021 — Aset Irgaliyev
04 May 2021, 11:47
About 1.5 million people or 15% of eligible population vaccinated in Kazakhstan — Ministry of Healthcare
04 May 2021, 11:32
Yerzhan Meiramov appointed chair of Telecommunications Committee of Ministry of Digital Development, Innovation and Aerospace Industry
04 May 2021, 10:02
Government considers measures to support SMEs
04 May 2021, 09:45
Pace of vaccination should be increased — Askar Mamin
03 May 2021, 19:06
Government session to be held May 4 in Ukimet Uyi
01 May 2021, 08:08
Prime Minister of Kazakhstan Askar Mamin congratulates people of Kazakhstan on the Day of Unity
28 April 2021, 18:19
Askar Mamin meets with Head of Arcelor Mittal Lakshmi Mittal
27 April 2021, 12:32
Timur Karagoishin appointed chair of Committee for Construction, Housing and Utilities of Ministry of Industry and Infrastructure Development
27 April 2021, 12:05
Over 378 thousand Kazakhstanis use Ashyq application — Alexey Tsoy
27 April 2021, 11:26
437 thousand people provided tax reporting as part of the first stage of declaration — Yerulan Zhamaubayev
27 April 2021, 10:12
Government considers implementation of universal declaration of individuals
27 April 2021, 10:06
In 2021, measures to promote employment will cover 1.2 million Kazakhstanis
27 April 2021, 09:45
At the end of April, 20% of eligible population should receive vaccines against COVID-19 — Askar Mamin
26 April 2021, 20:56
Government session to be held April 27 in Ukimet Uyi
26 April 2021, 12:42
Askar Mamin meets with Director General of Russian Railways Oleg Belozerov
24 April 2021, 15:01
EEC Council approves proposal of Kazakhstan on development of technical regulations "On Safety of Building Materials and Products"
24 April 2021, 13:31
Askar Mamin visits construction site of tourist complex in the capital
22 April 2021, 13:42
First batch of Kazakh vaccine QazVac (QazCovid-in) against COVID-19 delivered
21 April 2021, 15:56
Council for Improving Investment Climate considers implementation of tax reform in Kazakhstan
20 April 2021, 10:28
Government considers issues of improving the standard of living in countryside
20 April 2021, 10:09
Forecast for economic growth in Kazakhstan in 2021 improved to 3.1%
20 April 2021, 09:52
Askar Mamin instructs to expand coverage of population with vaccination against COVID-19
19 April 2021, 19:34
Prime Minister of Kazakhstan Askar Mamin chairs meeting of Commission on Digitalization
19 April 2021, 17:28
Government session to be held April 20 in Ukimet Uyi
15 April 2021, 11:46
Alikhan Smailov holds meeting on problems of SMEs in anticipation of tourist season
14 April 2021, 14:24
Modernization of housing policy, construction of affordable housing and mortgages on favorable terms — development of housing construction in Kazakhstan
13 April 2021, 21:35
Grant financing of research as measure of supporting domestic scientists
© 2019 - 2021 Press service of the Prime Minister of the Republic of Kazakhstan.
Developed by SoftDeCo.