Transcript Document

Kazakh Content
in the Purchases of the
JSC NC "KazMunayGas"
Group of Companies
Through long-term cooperation to
sustainable development
Measures taken to increase the Kazakh content in the purchases of the JSC NC
"KazMunayGas" group of companies
•
Development of cooperation  Visiting meetings in Petropavlovsk, Uralsk,
with domestic manufacturers: Taraz, Pavlodar, Aktau, Shymkent, Aktobe,
Atyrau;
 Memoranda made
•
Information support to domestic 
manufacturers:

•
Development of petroleum
mechanic engineering in the RoK:
The catalogue of goods planned to be purchased in
2011-2015 and the list of import goods are placed on the
web-site of JSC NC "KazMunayGas (www.kmg.kz);
The Oil and Gas Mechanic Engineering Development
Assistance Programme for 2010-2012 adopted;
Technology agreement with JSC "Center for Engineering and
Transfer of Technology" on setting-up production of
progressive cavity pumps, electric centrifugal pump units and
gas-distribution stations
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Projects for development of services for the petroleum industry
Program of Assistance by the JSC NC "KazMunayGas" Group of Companies to Development of Oil & Gas
Machinery Engineering in the Republic of Kazakhstan for 2010-2012
Number of equipment items commercial
production of which has been set up in
Kazakhstan as part of the Program
250
implementation
301
314
321
325
286
230
155
170
140
120
100
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1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
KMG's Partners under the Program:
Examples of cooperation with enterprises in Kazakhstan's regions
Pavlodar
(KSP Steel LLP)
Oilfield tubular goods
East-Kazakhstan
("UKAZ" JSC)
West-Kazakhstan
("ZKMK" JSC)
X-mas trees and check
valves
Oil preheaters, heat
exchangers
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Dynamics of purchases of goods by the KMG group as part of
the implementation of the "RoK Oil and Gas Mechanic
Engineering Development Assistance Programme"
31 000
32 000
29 500
28 540
mn tenges
21 356
18 816
15 729
14 750
14 655
8 964
7 862
2 745
3 836
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Analysis of the Kazakh content conditions in major oil and gas projects
by type of works - construction-and-assembly works and services
Conditions of high Kazakh content:
• does not require material investment
• Moderate period for setting up commercial production
• relatively low complexity of fabrication
• stable long-term demand
• historically established experience
• introduction of international standards (ISO)
• renovation of production capacity and technology
• establishment of alliances (JVs, consortia etc.) with international partners
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Analysis of conditions with low Kazakh content - materials and
equipment
Causes of low Kazakh content:
• requires material investment
• long period for setting up commercial production
• severe technical requirements and specifications
• single-piece or one-time make
• absence of historical experience in production of high-technology
equipment
• stringent requirements of meeting international standards (API,
ASME etc.)
• absence of innovative technology
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Outlook of the development of Kazakh content in major oil and gas
projects
1. Development of the onshore infrastructure for support of offshore
operations
The offshore budget of capital expenditures as part of further development of
Kashagan is around 70% of the total capital expenditures (around 5-7 bn US
dollars annually), which will require availability of a developed onshore
infrastructure (construction ship yards, offshore operations support bases
etc.).
2. Operation and maintenance of deposit production facilities
The operating expenditures budget in the total Investment volume is 35-45%
(for example, on Kashagan - around 50 bn US dollars by 2041). It is
necessary to adhere to the strategy of phased development of the market in
services, repair and supply of spare parts. Establishment of JVs, service
bases in maintenance of high-technology equipment.
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Support to oil and gas mechanic engineering
Development of Kazakhstan's service and repair infrastructure
 LLP "Service Center "KazTurboRemont"
JSC "Intergas Central Asia" (ICA), a subsidiary of JSC NC
"KazMunayGas", acted as Guarantor (for 10 mn US dollars) in
arranging a credit facility to KazTurboRemont for construction of the
Specialized Service Center.
JSC "West-Kazakhstan Machine-Building Company" (ZKMK)
ICA has acted as Guarantor (for 3 mn US dollars) in arranging a
credit facility to ZKMK for creation of a workshop for repair and
manufacture of gas-compressor units (GCU).
A Memorandum of Cooperation on development of GCU prototype
testing has been made between ICA and ZKMK.
By means of mastering by these enterprises of the GCU overhaul
technology - without their transportation beyond Kazakhstan it is
planned to:
 reduce down time


increase the Kazakh content from 35% to 60%
eliminate dependence on foreign repair enterprises
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Cooperation between JSC NC "KazMunayGas" and Eni S.p.A.
In the course of the visit of RoK President N. Nazarbayev to Italy,
the Cooperation Agreement in respect of the following
projects
of
petroleum
exploration
and
industrial
infrastructure facilities in the RoK was signed between JSC
NC "KazMunayGas" and Eni S.p.A.:
1
2
1.
Pavlodar Refinery modernization
estimated cost - 1 bn US dollars)
project
(2012-2014,
2. Construction of a gas-processing plant (2012-2014, the cost will
be determined following the results of the FS)
3. Studies on optimization of gas disposition (2010-2011, cost - 5
mn US dollars)
4. Gas turbine power plant construction project
3
4
(2012-2014, the cost will be determined following the results of
the FS)
5. Shipyard construction project (2012-2014, the cost will be
determined following the results of the FS)
6. Upstream projects (Issatai and Shagala).
Current status:
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Base cases of configuration and location have been defined on all projects. The
preliminary composition of the primary equipment and materials determined.
Assessment of the estimated cost of the projects for construction of the gas turbine
power plant, gas-processing plant and ship-building-and-repairing yard is underway.
Currently efforts are made for rapprochement of Eni and KMG in the evaluation of
capital expenditures. Adaptation of the Eni/Technomare project documents as per the
requirements of the RoK standards is underway. The Italian party is explained the
methodology for application of the RoK regulations and rules in the sphere of
engineering and construction.
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Establishing " National Institute of Welding in Kazakhstan”
The proposal for the establishment of the Institute of Welding in
Kazakhstan was announced by Yves-Louis Darricarrère, Executive
Vice President of Total, at the meeting of the Foreign Investors’
Council under the President of the Republic of Kazakhstan on
December 4, 2009. The proposal involves assistance in
establishing on the basis of the Welding Institute (Paris, France),
central (may be non-profit) technical institution for training and
international certification of welding specialists. The Institute will
be engaged in certification of educational centers for training of
inspectors for welding.
Current status:
Objectives: establishing the “National Institute of Welding in
Kazakhstan” (NIWK), which will:
1. represent Kazakhstan in the club of the “International Institute of
Welding";
2. unite all organizations and representatives of the profession and
harmonize the training courses, act as a "National Authority";
3. issue diplomas and internationally recognized certificates.
NIWK will provide services to industry, universities in:
1. approving and monitoring training centers and / or universities that
are qualified as a"Authorized Learning Agency";
2. issuing international certificates;
3. verifying and qualifying welders;
4. enlisting for membership of representatives of the profession.
By now, the specialists of Total and the Welding Institute
(France) carried out work on studying the situation in
Aktau, Atyrau and Karaganda. In the negotiation process
on Kazakhstan side there were involved the
representatives of the Ministry of Education and Science,
the Ministry of Industry and New Technologies, the
Ministry of Labor and Social Protection, and the Ministry
of Oil and Gas of the Republic of Kazakhstan, as well as
the association KAZENERGY and KMG.
In September of this year at the regular meeting in the
Ministry of Education and Science (MES) it was decided
to set up a working group on the project under the
guidance of MES, which supported by the French party
(Total and French Welding Institute) until the end of 2010
will develop the concept of establishing the Institute in
terms of determining the mission, workload and business
plan.
Establishing "Kazakhstan Nautical Academy”
JSC NC “KazMunayGas" together with Chevron worked on the issue of supporting Kazakhstan Nautical Academy and
maritime training center in the city of Aktau. The Partnership Council of TCO in September, 2010 approved the allocation of
$ 25 million for the business-period between 2011 and 2013 for the establishment of Kazakhstan Nautical Academy.
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Development of the onshore infrastructure
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The following onshore infrastructure facilities were
constructed and commissioned during the 2005-2010
development period
Atyrau (being implemented)
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1
2
3
4
5
6
6
4 5
8
3
2
1 6 9
NCOSREB
Bautino (implemented)
- Rock loading jetty
- Disposal site
- Offshore Oil Operations Support Base
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- Sea Vessels Fuelling Station
- Production base of Agip KCO
- KazMi drilling muds plant
- "Atash" Offshore Oil Operations Support Base
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Bautino (being implemented)
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- TenizService production site for a fabrication yard
Aktau
Keppel Kazakhstan Shipyard
KCOI Shipyard (being implemented)
Kuryk (planned facilities)
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11
12
13
14
15
16
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"Yersai" Shipyard (existing facility)
Oil Terminal,
Shipyard/Dry Dock
Fleet base
Offshore Oil Operations Support Base
Disposal site
Industrial supply base
Fabrication yard
Concrete weight coating plant
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Kazakh content in a "turnkey agreement" –
"Aromatics Production Complex in AR"
(as at 1 November 2010)
Share of the Kazakh content in purchases of goods, works and services
EQUIPMENT
Amount planned for
Share of the Kazakh
purchase, '000 US dollars,
Kazakh content, '000 US
content according
according to Appendix No.
dollars
to Appendix No. 16
13
324 523
16%
51 924
MATERIALS
259 635
18%
46 734
WORKS (SERVICES)
344 413
29%
99 880
TOTAL:
928 571
198 538
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Kazakh Content in the Purchases
of the JSC NC "KazMunayGas" Group of Companies
(as at 1 November 2010)
Goods
Customer
KMG group of
companies
Works
Services
Value of
contracts, bn
KZT
KC,
%
Сумма
договоров
млрд.тенге
KC,
%
Value of
contracts,
bn KZT
KC,
%
740
34
350
59
517
75
Total value
of
contracts,
bn KZT
1 607
Share of
purchases from
Kazakhstan's
suppliers, %
77
Total KC
by the
methodol
ogy, %
52
Dynamics of the Kazakh content (KC) share in purchases of the KMG group
79%
75%
52%
2008
2009
2010
Reduction in the KC performance in 2010 is connected with the intruction of a new methodology for the KC calculation and a
considerable amount of the Russian crude purchases for refinning in the JSC "PPCP"
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Information on the long-term agreements of the JSC NC "KazMunayGas"
group of companies during 2008-2010
(KZT)
Customer
Goods
Works
Services
Total long-term
agreements
made
KMG group of
companies
6 199 677 732
10 439 398 920
9 135 960 432
25 775 037 074
Currently, the matters of signing long-term agreement between the following entities are being
negotiated:
KazMunaiGas EP JSC and JSC Munaymash for delivery of sucker rod pumps during 2012-2015 for the total
amount of not more than 8,000,000,000 KZT.
JSC "Intergas Central Asia" and the KazPetroMash LLP for delivery of ball valves and pipe fittings during 20112015 for the total amount of 401,695,452 KZT.
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Range and volume of the main types of domestic products planned for the purchase in 2011-2015
(thousand tenges)
2011
2012
2013
2014
2015
Всего
1 008 480
1 004 375
1 003 754
1 001 255
1 000 878
5 018 742
Pumping units
248 500
250 000
254 037
255 012
261 050
1 268 599
Drilling pumps
136 400
154 055
156 358
158 787
159 021
764 621
2 149 956
1 925 022
1 925 022
2 000 537
2 000 584
10 001 121
Check valves
(slide valves, shut down
valves, cranes)
599 762
595 214
532 012
545 051
568 951
2 840 990
Heat-exchange equipment,
tube bundles
259 323
260 358
285 351
285 624
286 537
1 377 193
Transformers
161 883
168 535
170 654
171 250
175 351
847 673
Oil and gas pipes
336 817
340 652
345 521
350 125
351 254
1 724 369
2 984 400
2 950 250
2 563 251
2 259 845
2 260 254
13 018 000
Cabling and wiring products
366 532
367 895
368 957
369 875
370 654
1 843 913
Work clothing, safety shoes
980 537
981 520
980 215
982 514
982 415
4 907 201
Oil preheaters
284 700
290 574
290 512
289 652
290 125
1 445 563
Product range
Specialized machinery
Rod well pumps
Oil well tubing
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Examples of price development of commodities and materials procured from
domestic producers for the period of 2005-2010 (thousand tenges)
Item
Manufacturer / Supplier
2005
2010
Growth,
%
Motor pump “ZNS 180/1422”
LLP “PMK”
10 000
25 000
250
LLP “Join venture “AZTMIzhneftmash”, JSC “KaskorMashzavod”
3 000
6 000
200
JSC NC “Kazakhstan
Engineering”, JSC
“Munaimash”, JSC “Aktobe Oil
Equipment Plant ”
135 000
323 000
239
JSC “Aktobe Oil Equipment
Plant ”
5
11
220
LLP “Rauan”
267
487
182
LLP “Almatyneftehim”
487
1087
223
Pumping unit, 6 tons
capacity
Rod well pumps
Pump rods “ShN D 22”
Surfactant Rauan 100
Demulsifier Dissolvan 4411
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The list of products imported by KMG group due to the lack of their production in the Republic of
Kazakhstan
Marketable products
Motor vehicles, special machinery and spare parts
Annual demand in
millions of dollars
28,5
Computer equipment and production supplies (network equipment, software,
processors, etc.)
8,1
Chemicals (corrosion inhibitors, acids, alkalis, salts, etc.)
7,4
Electric pumping units
4,1
Laboratory equipment and tools (instruments, analyzers, hydrometers, etc.)
3,4
EC&I
2,7
Electrical equipment "European standard" (magnetic starters, automatic devices, etc.)
0,6
Cavity pumps
0,5
Gas-distribution plants - GDP
0,4
Electrical lighting equipment (incandescent lamps, fluorescent lamps, spotlights, etc.)
0,3
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Thank you for your attention!