“Tengizchevroil” LLP (TCO) continues actively support and develop the local contractors by creating more accessible terms to participate in major contracts. Now Kazakhstani suppliers can utilize the guarantees issued by second-tier banks. Accordingly, TCO takes an important step towards Kazakhstani business fostering its growth and sustainability.     

TCO continues to demonstrate its dedication to supporting local companies by simplifying the terms and conditions and opening new opportunities for their development. Effective May 14th, 2024, TCO made significant changes to bank guarantee requirements. Kazakhstan service providers can now leverage guarantees issued by second-tier banks with credit ratings of at least BBB (S&P and Fitch) or Baa2 (Moody’s) for contracts totaling ten million USD. According to TCO Finance General Manager, Dwight Crabtree, this new practice considerably facilitates the access of local companies to major contracts by reducing the financial burden and encouraging the participation in strategically critical projects.        

- We understand that financial requirements can be a barrier for many local contractors and therefore TCO has made important changes to bank guarantee requirements. For contracts that do not fall under the new criteria, TCO will continue to apply the existing requirements for bank guarantees from second-tier banks with at least an “A” rating. This confirms the company’s commitment to the high standards for financial sustainability in executing major projects, - Crabtree added.      

Also, in compliance with the amendments, second-tier banks may issue guarantees on behalf of Kazakh companies with confirmation from an “A” rated bank that ensures the additional financial sustainability. Meanwhile, the company noted that TCO reserves the right to change the requirements for bank guarantees depending on the size of the contract, financial state of the supplier and complexity of the work.  

This flexibility affords the requirements to adapt to the real conditions and needs of Kazakhstani companies. These changes show that TCO continues to support the development of Kazakhstani contractors by creating more beneficial terms for their participation in major contracts. Amendments in bank guarantee requirements reflect the company’s commitment to strengthen ties with local business and boosting economic growth in the country.    

It is worth to note that Tengizchevroil has always been one of the key participants in the economic development of Kazakhstan and one of leading players in developing the local business. Since 1993 Tengizchevroil has purchased goods and services of Kazakhstani suppliers of more than $48,4 billion. In the first quarter of 2024, expenditure on Kazakhstani content development amounted to approximately $790 million including over $440 million within the framework of Future Growth Project and Wellhead Pressure Management Project (FGP-WPMP). In general, it should be noted that the overall level of Kazakhstani content in goods and services purchased by TCO achieved more than 70% by the end of 2023 compared to 11% in 1993. This data shows that the promotion and development of local resources and enterprises in the oil and gas industry is an integral part of Tengizchevroil’s sustainable development.