BAKU, Azerbaijan, September 7. Kazakhstan's Ministry of Energy, Karachaganak Petroleum Operating (KPO), PSA, IMBC, industrial companies and the business community discussed prospects for expanding localization of the Karachaganak project.
This was announced by the ministry's press service following the meeting. The discussions focused on the development of local content under the Karachaganak project and opportunities to increase the participation of domestic manufacturers in the oil and gas industry's supply chains.
"Representatives of the Karachaganak project presented long-term plans for developing local content and discussed opportunities to expand supplies of Kazakh-made products with domestic manufacturers", the ministry said.
The participants also visited several industrial enterprises in Shymkent, including Karlskrona LC AB, Asia Trafo and Renaissance SHIK, where they reviewed the companies' production capabilities and manufactured products.
The meeting also featured an exhibition of products made by domestic manufacturers and a roundtable attended by First Deputy Akim of Shymkent Aidyn Karimov and Head of the Project Documentation Division of the Subsoil Use Department at the Ministry of Energy Baglan Sembekova.
"For the Ministry of Energy, the development of local content is one of the important areas of state policy. Our task is not simply to increase the share of procurement from domestic manufacturers, but to create conditions for the sustainable development of Kazakh businesses, improve their competitiveness and integrate them into the supply chains of major oil and gas projects," Sembekova said.
A number of measures are already being implemented to expand the participation of domestic manufacturers in procurement for major oil and gas projects. These include improvements to tender procedures, additional mechanisms to support domestic manufacturers and a five-year program for the development of local suppliers.
The Karachaganak oil and gas condensate field, located in the West Kazakhstan region, is one of the largest oil and gas condensate fields in the world, with initial geological reserves of more than 1.7 billion tons of liquid hydrocarbons and over 1.7 trillion cubic meters of gas. The field was discovered in 1979, and pilot-commercial development began in 1984.
The Karachaganak project is implemented under a PSA concluded between the Government of Kazakhstan and an alliance of companies, including British Gas (Shell) with a 29.25% share, ENI with 29.25%, Chevron with 18%, Lukoil with 13.5%, and KazMunayGas with a 10% stake. The agreement was signed on November 18, 1997, for a term of 40 years and came into force on January 27, 1998.
Particular attention is being paid to creating sustainable demand for domestic products, expanding the range of goods subject to localization, developing the production capabilities of Kazakh enterprises and improving their compliance with the requirements of major operators.
Participants noted that long-term contracts and offtake agreements play an important role in this process. Such mechanisms enable domestic enterprises to plan investments, modernize production and expand capacity with a clearer understanding of future demand.
Work to develop local content is being carried out through cooperation between the Ministry of Energy, PSA, major operators, IMBC and subsoil users. Within this cooperation, project requirements are analyzed, in-demand product groups are identified and promising areas for local production are determined.
The participants emphasized the need to further strengthen cooperation between the government, subsoil users, operators and domestic manufacturers. This approach is expected to expand the participation of Kazakh businesses in oil and gas project procurement and contribute to the development of long-term production supply chains within Kazakhstan.
