KIOGE-2026
From Supplies to Capabilities: How Kazakhstani Content Is Changing at Tengiz
Over more than three decades of work at the field, Tengizchevroil LLP (TCO) has traveled the road from a company that had to build up a circle of local suppliers virtually from scratch to the largest customer for Kazakhstani business. Over that time, not only have the volumes and the range of procurement changed. The very character of the relationship between the country's leading oil and gas operator and domestic enterprises has been changing. The process has advanced step by step: from finding and engaging local suppliers to developing manufacturing capabilities, certifying products, and creating new production facilities.
Made in Kazakhstan
Today, this process is entering its next stage. For TCO, it is no longer enough simply to widen the circle of Kazakhstani suppliers; increasing importance is attached to the ability of local companies to manufacture complex equipment and materials that meet the requirements of international oil and gas projects.
In 2025, TCO purchased goods and services from Kazakhstani suppliers worth around USD 1.8 bln, and total procurement from domestic businesses from the company's formation through the second quarter of 2026 came to around USD 53 bln. The share of Kazakhstani content in the company's procurement has risen to 71%. The trend in goods is especially telling: whereas in 2024 the actual share of Kazakhstani content in the goods category was 7%, in 2025 it reached 15%!
A striking example of the growth in domestic business capabilities is the manufacture in 2025, by local companies, of the largest modular substations in Kazakhstan for the Tengiz project. These two-story structures, 38 meters long, were fully produced, assembled, and tested in Kazakhstan. The project was delivered in compliance with high safety and quality standards, and the substations are already in operation at Tengiz. Cases such as this show that Kazakhstani enterprises today are capable of successfully mastering complex technical solutions and performing work to world-class standards. This is precisely where TCO sees the main value of developing Kazakhstani content: not only in figures and statistics, but in the emergence of strong domestic players that are becoming competitive both inside the country and beyond its borders.
The Economic Impact Is Not Limited to the Contract Value
Direct procurement is the most obvious part of the economic impact of a major customer’s presence. The influence of a company such as TCO on the local economy, however, does not end there. A large contract enables a supplier to acquire the high-technology equipment it needs, expand production, and hire personnel. The next order can then be delivered using the capacity created, while the expertise accumulated allows the company to bid for contracts with other oil and gas operators and enterprises.
There are many stories of Kazakhstani enterprises that have grown along with TCO's orders. Today, they supply products to other large industrial companies in Kazakhstan and export them. The ability to move beyond the perimeter of a single customer is perhaps the most important result of developing supplier capabilities. Otherwise, local content development risks remaining merely a redistribution of the existing procurement volume. But when an enterprise gains its own production, new technologies, and access to other markets, the initial contract becomes the point at which a sustainable business takes shape.
In its work with business partners, TCO places the emphasis on precisely this transition. The company views the development of Kazakhstani content not only as an increase in the number of local suppliers, but also as an improvement in their technological capability. One of the key instruments of this work is the TCO Supplier Development Program. Its main aim is to help Kazakhstani manufacturers meet international requirements in quality, safety, and production efficiency.
Under the program, companies undergo qualification and gain the opportunity to be included in TCO's approved manufacturers list. This makes the procurement process more transparent and efficient and opens additional opportunities for Kazakhstani enterprises to participate in TCO projects on a long-term basis. At the same time, domestic companies must build up their technological capabilities, adopt modern production standards, and invest in developing their people so that, in the future, they can compete successfully not only on the domestic market but also on international markets.
Particular attention is paid to creating conditions to enhance the competitiveness of domestic producers and ensure their compliance with international requirements of the oil and gas industry. As part of this work, TCO engages engineering specialists, industry experts, and accredited testing laboratories to assess, qualify, and develop business capabilities in line with the requirements of the oil and gas industry.
Manufacturers are provided with technical requirements, specifications, and information on the historical consumption of the products that TCO purchases. On-site technical audits are conducted at manufacturing facilities across regions to assess their technological capabilities, production processes, and quality management systems. Based on the audit results, recommendations are developed to close the identified gaps, and further steps to develop the manufacturer are determined. Where the qualification stages are completed successfully, a decision may be made to place trial orders, enabling confirmation of product quality under real operating conditions and obtaining feedback from end users. As a result of this work, a manufacturer may be included in the Approved Manufacturers List.
It is important to note that the manufactured products must comply with applicable local and international standards, as well as the requirements of organizations such as ASME, API, ASTM, ATEX, and other relevant standards. Compliance with these requirements not only enables the supply of products for major oil and gas projects but also helps raise the export potential of Kazakhstani manufacturers.
Since 2024, TCO has conducted qualification assessments for more than 30 Kazakhstani manufacturers across 45 product categories, including equipment, materials, and products in demand in the oil and gas industry. This work spans a range of areas, from machine building and electrical equipment to automation, filtration, and anti-corrosion protection.
Ultimately, the true success of the program is measured not by the number of contracts signed but by the emergence of strong, sustainable Kazakhstani enterprises capable of creating jobs, expanding production, and contributing to the growth of the country's economy and export potential.
Setting a Course for Original Equipment Localization
One of the most notable changes of recent years has been the development of OEM localization, in which a Kazakhstani enterprise works together with an international original equipment manufacturer. This format makes it possible to solve a problem faced by practically every new manufacturer: a lack of experience in making complex products, combined with the need to ensure quality in line with international standards. The international partner provides the technology and the manufacturing expertise, while the local company creates or expands production in Kazakhstan.
According to TCO, ten manufacturers and product types have now been localized and included in the approved manufacturers list. More than ten further projects with international manufacturers of equipment and materials are at various stages, from qualification and certification to the start of production and the placing of first orders. The areas of localization include valves, instrumentation, industrial safety equipment, and chemicals.
This has been painstaking and complex work between TCO and its business partners, as the initiative marked a new stage in developing Kazakhstan's potential. The entire negotiation process was built on trust and took into account the specifics of the Kazakhstani market, which operates under GOST standards.
It is worth noting thatalongside the localization of goods, a service company has localized its services, nationalizing and training its workforce to 86% local personnel, and has also opened a data center that was relocated from Europe. In addition, an international logistics company has opened a dispatch center in the region, from which cargo movements worldwide are now coordinated and tracked. Delivering the project has not only helped create jobs but also enabled local specialists to raise their qualifications, opening up opportunities for international placements and professional exchange.
For the Kazakhstani industry, localization matters precisely because it concerns manufacturing previously carried out outside the country, meaning that currency flowed abroad when the products were purchased. With successful localization, part of the value added stays in Kazakhstan, and alongside this, production, engineering, and service capabilities take shape, with the prospect of entering export markets.
From Procurement to Partnership
Over thirty-odd years, TCO's relationship with Kazakhstani business has changed fundamentally. In the early 1990s, the main question was whether there were enterprises capable of supplying the project with the goods and services it needed. Today, the task looks different: to create conditions in which Kazakhstani companies can independently manufacture more complex products and compete for orders not only from TCO but also from other major operators.
This dynamic is well reflected in the change in the share of Kazakhstani content in the Tengiz project: in 1993 it stood at 11%, and by the end of 2025 it had reached 71%. But growth is not the only thing that matters. Procurement volumes can be increased relatively quickly if the necessary supply already exists on the market. Creating a new manufacturer of complex equipment is considerably harder: it takes investment, technology, qualified personnel, certification, and time to complete testing.
For that reason, the next measure of the effectiveness of Kazakhstani content programs is not so much the number of contracts as the number of companies that have moved up to a new level of manufacturing. This is the direction in which TCO's work with domestic enterprises is developing today. Manufacturer qualification, trial orders, OEM localization, technical audits, specialist training, and direct dialogue with business are gradually forming a chain in which procurement becomes only one stage in a company’s development.
"Today, more and more opportunities are opening up for domestic business. But success requires initiative and a readiness to learn, adopt new technologies, and continually improve competitiveness. For its part, TCO will continue to support the development of Kazakhstani content, local manufacturers, entrepreneurs, and specialists. We will also strive to create the conditions for sharing experience, developing capabilities, and strengthening long-term partnerships. It matters to us that the results of our work are measured not only by production indicators but also by the contribution we make to developing Kazakhstani business, creating jobs, and improving people's quality of life," says Kuanyshkerey Mukhtarov, Deputy General Director of TCO.
TCO’s history shows that a major oil and gas project can affect industry and the economy as a whole far beyond its own production perimeter. A supplier that began with a single order gains the opportunity to acquire equipment and capabilities, then to reach other customers and, in time, to enter export markets. For the state, the result is not only the value of a particular contract remaining in the Kazakhstani economy, but also the emergence of production that continues to operate after the contract ends.
In this sense, the next stage in the development of Kazakhstani content will be determined not by the volume of procurement as such. A more significant measure will be the ability of local companies to independently master new product types, meet international requirements, and turn the experience gained at Tengiz into a sustainable competitive advantage.