The active phase of the project for the future expansion of TCO is a challenge for the growth of Kazakhstan's oilfield services companies

This opinion was shared by the participants of the VII annual conference "KAZNEFTEGAZSERVIS-2018: Oil and Gas Construction and Engineering", held today in Atyrau.

Makhambet Dosmukhambetov, First Vice-Minister of Energy of the RK, Michael John Gifford, Ambassador of Great Britain in Kazakhstan, Yeldos Ramazanov, Deputy Chairman of the Board of the NCE of the RK, MPs and the first heads of major oil and gas projects and more than 200 oilfield services companies took part in the plenary part of the conference.

As First Deputy Minister of Energy of the RK Makhambet Dosmukhambetov emphasized in his speech, last year subsoil users purchased goods, works and services for a total amount of more than 4.5 trillion tenge.

"As is known, the main share of purchases of goods, works and services, more than 70%, relates to three main projects: TCO, KPO and NCOC. Today, the main part and the main prospects for the development of Kazakhstan's business are concentrated around these projects," - noted the First Vice-Minister of Energy.

According to the Chairman of the Presidium of the Union of Kazakhstan oil service companies Rashid Zhaksylykov, this is a huge amount where Kazakh companies must win their places and make profits.

"In the subsequent, Kazakhstan business should direct the funds, received from large subsoil users' participation in projects, on diversification of economy, on improvement of quality of the services. All three companies plan further expansion. Therefore, the main goal of the current conference is to create opportunities for domestic companies to find anchor investors who will be able to help them improve the quality of work by introducing new technologies and increasing the professionalism of their staff," - Zhaksylykov says.

Deputy Chairman of the Board of the National Chamber of Entrepreneurs Yeldos Ramazanov also stressed that over the years the conference "KAZNEFTEGAZSERVICE" has become an effective platform for the consolidation of subsoil users and oilfield service companies to discuss and develop solutions on increasing local content, promoting domestic companies which provide services.

"Given the current and future large-scale projects for oil and gas fields expansion, the oilfield service industry and Kazakhstan content have acquired special significance. If in 2015 the turnover of the oilfield service industry was 1.3 trillion tenge, in 2016 this amount exceeded 2 trillion tenge, and by the end of 2017 the turnover of the oilfield service industry amounted to more than 2.3 trillion tenge, while the share of local content on average is 52 % ", - Yeldos Ramazanov noticed.

According to his words, a high percentage of Kazakhstan's content is provided through the provision of construction, installation and drilling services, where the share of local content is 80% and 62% respectively, while in such segments as design and engineering, geodesy, the share of Kazakhstan's oilfield services varies from 12 to 16%. It is required to increase the presence of Kazakhstan companies in these segments of oilfield services.

"The developed design solutions will largely define what equipment and what materials will be used in the project. Thus, there is a great potential for the domestic economy in this direction. It is necessary to improve the quality of services of Kazakhstan's oilfield services in this segment, by increasing the competitiveness of domestic companies," - said Yeldos Ramazanov.

Also, within the framework of further promotion of the domestic oilfield service business, the Atameken National Chamber of Entrepreneurs of the Republic of Kazakhstan has started work on the implementation of the road map for the development of the Kazakh oilfield service. Within the framework of the conference program, the participants discussed the issues of further development of the three largest oil and gas companies, their plans for the procurement of goods, works and services.

Purchases of three operators of TCO, KPO, NCOC account for over 70% of all purchases of goods, works and services of oil and gas operators in Kazakhstan. In 2017, they amounted 3 trillion 398 billion tenge. The share of local content is 30.83%, which is 1 trillion 47.8 billion tenge. The leader in procurement of goods, works and services is TCO: in 2017, the company purchased 2 trillion 815 billion tenge. And the leader in the volume of Kazakhstan content is KPO: the percentage of local content in the company's purchases is more than 54% or 130 billion tenge.

"From the first days of its existence, TCO has paid much attention to the development of local content, last year it delivered record production and local content, it is more than 2.5 million dollars. Since its establishment in 1993, the enterprise has already spent over $ 24 billion on Kazakhstani goods, works and services. Last year, as part of the beginning of the Future Expansion Project, we spent 1.6 billion dollars and this figure will grow," - Deputy Director General of TCO LLP Murat Mukashev said.

The conference was also attended by Vice President of Eni company for Central Asia Luka Vinyati, Chairman of Shell company in Kazakhstan Olivier Lazar, Managing Director of NCOC Bruno Jardin.

The panel part of the conference ended with a ceremony of awarding a number of workers in the oilfield service industry with medals of the Union of Oilfield Services Companies of Kazakhstan. More detailed information on the projects of the three operators was provided for the participants in various sections, the event was concluded by bilateral meetings in the B2B format.