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Marat Karimov, KPO: We are Сommitted to Running Our Business Sustainably
Marat Shaidollayevich, KPO company is one of the major investors in the Kazakhstani economy. Economic and social wellbeing of the Western Kazakhstan region directly depends on successful development of the project. How does the company feel under the circumstances of world oil prices decline?
– The changed situation in world markets forced us to change our plans. We understand that we need to muster our internal resources, review and optimize costs. However, we have no doubt that all the investors’ obligations to the Republic of Kazakhstan will be duly fulfilled. Just recently the company held a workshop for the representatives of international and local manufacturers to discuss the needs for Karachaganak Expansion Project, Phase 1. This workshop was attended by the representatives of state authorities and specialized associations such as PSA LLP, NADLoC agency, KAZENERGY association, Alliance of Kazakhstan service companies. Thus, the work on expansion Project continues as planned, as well as on other investment projects.
– Could you give us any more detail about how the company establishes its relations with local vendors and how Kazakhstan based manufacturers can become KPO contractors or vendors?
– Since signing the Final Production Sharing Agreement in 1997, the total amount of the contracts concluded between the consortium and Kazakhstan based companies exceeded $5.3 billion. In 2014, local content in Karachaganak project comprised 47% of the total purchase expenditures or 472 million USD in cash terms.
Such a high performance is the result of the KPO local content development program. We assist local companies to obtain ISO certificates on quality management, HSE, technical API standards, ASME and project management, therefore increasing their competitiveness.
Furthermore, local content requirements are also applied to foreign contractors. Their contracts envisage the obligations for observing local content requirements, experience, technology transfer and assistance in professional development of local personnel. I can share a number of examples among KPO initiatives, having been implemented recently: as a result of negotiations. A contract extension in favour of Tenaris Company was approved in return for investment liability on construction of premium-class pipe threading factory at the territory of the Republic of Kazakhstan with the investment scope amounting to 40 million USD. Early signed memorandums of understanding with General Electric and Aksai industrial park have also been successfully implemented.
General Electric, jointly with Samruk-Kazyna WKEC (West Kazakhstan Engineering Company) is at the approval stage of establishing a joint venture in Uralsk city subject to GE standards and principles under GE brand. As part of Aksai Industrial Park services are rendered on repair of heat exchangers, assembly of ball valves as well as fabrication of heat insulation materials and materials for passive fire protection. At the present time, KPO is conducting pilot early tenders for personal protective equipment delivery, fencing as per international standards and placing pilot orders for delivery of chemicals, packing cement, drilling bits and barite. Manufacturing of these goods within the territory of Kazakhstan is a compulsory condition for conducting early tenders and placing pilot orders.