Since its founding in 1993, TCO has contributed over $125 billion to the Republic of Kazakhstan, including in purchases of Kazakhstani goods and services, profit distributions to TCO partner KazMunaiGas, taxes and royalties paid to the national government, tariffs and fees paid to state-owned companies, and employee salaries.
Kazakhstani Goods & Services spending in US Dollars:
TCO’s investments in Kazakhstani content have primarily focused on purchasing services. This will continue to be an area of focus given its significant impact on local economic growth.
A key component of TCO’s Kazakhstani content development strategy is to work with current and prospective suppliers to help them understand the quality, safety and cost standards they must meet in order to do business with oil and gas companies. In 2016-2017, TCO identified new Kazakhstani manufacturers and visited several regions in Kazakhstan to gain a better understanding of the manufacturing capabilities of local companies.
Kazakhstani content is an integral part of TCO’s base business and FGP-WPMP activities. More than 500 contracts have been awarded to Kazakhstani-registered companies. FGP-WPMP’s Kazakhstani content target is 32 percent of total project spend.
In 2017, FGP-WPMP organized three major forums dedicated to Kazakhstani content:
Construction Companies Forum in January that involved 254 companies with the objective of updating current and prospective contractors on project progress, project pre-qualification process, as well as to provide opportunities for the companies to network with other construction and service companies.
Suppliers Forum in April for 128 Kazakhstani companies. The Forum provided information on the contracts execution process for projects with small and medium construction scopes. The objective of the Forum was to share information on FGP-WPMP and upcoming small and medium construction projects for FGP-WPMP, as well as to provide opportunities for local companies to participate in FGP-WPMP construction works.
TCO’s Craft Skills Assessment and Training Forum in June which nearly 60 Kazakhstani and international training companies attended. FGP-WPMP shared information on required craft training and assessment quality standards.
In August 2017, FGP-WPMP held a job fair in Kulsary to advertise job opportunities for residents of Zhylyoi district and Borankul village. Forty TCO contractor companies, the Zhylyoi Region Akimat, the Akimat of the Borankul Rural District, and the Zhylyoi Region Employment Center and Social Programs Department participated in the fair, which resulted in over 100 local residents receiving job offers.
Through these activities and others, FGP-WPMP is creating a legacy of new job opportunities and local workforce capabilities in the engineering, high-tech equipment servicing, project management, construction and fabrication fields. TCO is encouraging the establishment of joint ventures between Kazakhstani and international companies for engineering, module fabrication and drilling services.
In April, with the support of the Atyrau Oblast National Chamber of Entrepreneurs, TCO organized the Production Maintenance Suppliers Forum for local and international companies. At the forum, participants were provided with general information about TCO’s Production Maintenance Services, and the requirements for pre-qualification and terms of tenders to work with TCO.
In May, the European Bank for Reconstruction and Development (EBRD) held a joint press conference on the implementation of its program to support small and medium businesses in Kazakhstan. The Government of Kazakhstan is continuously working to increase local content in state procurement and in the oil and gas sector. In 2015, the EBRD and TCO established a joint program to support small and medium-sized enterprises (SMEs) in Kazakhstan. TCO has contributed a total amount of $500,000 to the program. By the end of 2017, 23 potential suppliers from various regions of Kazakhstan have entered into projects with local consultants and two suppliers have formed partnerships with international experts. These advisory projects help companies to access global best practices, such as technical knowledge on introducing a quality management system that meets ISO standards, or improving accounting and financial management. SMEs work with local consultants and international experts on a cost-sharing basis, covering up to 75 percent of the total project cost.
In June, the Aktau Declaration Working Group, which includes TCO, North Caspian Operating Company NV (NCOC) and Karachaganak Petroleum Operating BV (KPO), along with JSC NC KazMunayGas (KMG), facilitated a business seminar in Atyrau focused on valves manufacturing. The seminar helped participants understand how to comply with the manufacturing requirements and specifications of valves used in the oil & gas industry. More than 60 representatives of Kazakhstani and international companies attended the seminar and expressed interest in valves manufacturing in Kazakhstan.
In November, four major operators of oil and gas fields in Kazakhstan, TCO, NCOC, KPO and KMG, with the support of the Chamber of Entrepreneurs of Atyrau region, held a joint Forum on Waste Management in Atyrau. The objective of the forum was to exchange information between local businesses and oil and gas companies to identify opportunities in waste processing, taking into account the latest changes in the environmental standards of the Republic of Kazakhstan.
Since 1993, TCO has invested more than $1.4 billion in social investment projects and programs in Atyrau Oblast for the benefit of our employees and the community. TCO’s Egilik (“benefit” in Kazakh) Voluntary Social Infrastructure Program has implemented 84 social investment projects in Atyrau oblast.
In 2017, the Egilik program allocated $25 million for the construction of social projects, including schools, kindergartens, community houses, sports complexes and others. Nine social infrastructure projects in Atyrau Oblast, including the Specialized Technical Gymnasium and Retro Park, were completed.
Also in 2017, TCO’s Community Investment Program (CIP), in partnership with local and international organizations, spent over $1 million on projects aimed at improving education, healthcare and entrepreneurship opportunities in Atyrau Oblast. Project partners included Independent Generation of Kazakhstan Association, Kazakhstan Association of Family Physicians (KAFP), PYXERA Global – Yntymak Atyrau, Eurasia Foundation of Central Asia (EFCA), British Council, New Information Impulse and Mugedek Alemy.
TCO’s international NGO partners have helped develop local NGOs through the CIP program partnerships by transferring knowledge and skills on local social investment projects, which enables them to participate competitively in future grants with TCO.