OREANDA-NEWS. February 07, 2011. JSC NC “KazMunayGas” (KMG) jointly with Association of Legal Entities “Union of Machine-Builders of Kazakhstan” held a meeting with participation of the representative of the RoK Ministry of Oil and Gas, RoK Ministry of Industry and New Technologies, subsidiaries of JSC “NWF “Samruk-Kazyna”, machine machine-manufacturing companies and the operators of the major oil and gas projects (LLP JV “Tengizchevroil”, NCOC and KPO B.V.) on the matter of the development of the Kazakhstani content in the major oil and gas projects on 2 February this year in Astana.

Following the preliminary results of 2010, the total amount of purchases in the KMG group of companies amounted to 1,595.2 bn tenges, the Kazakhstani content in the purchase being 51% or 811 bn tenges. Among other things, of the total amount of purchased goods for the amount of 776 bn tenges, the share of the Kazakhstani suppliers was 31% or 244.7 bn tenges.

The total volume of work agreements made amounted to 393.1 bn tenges, the Kazakhstani content being 63% or 248 bn tenges.

A total of 425.7 bn tenges was spent on services, which includes 317 bn tenges for services from the domestic suppliers, or 75% Kazakhstani content.

In order to implement a set of measures to develop the Kazakhstani component in the purchase of goods, works and services, the Programme for Assistance by the KMG Group of Companies to the Oil and Gas Mechanic Engineering Development for 2010-2012 has been developed and is being implemented.

- National Company “KazMunayGas” in collaboration with Kazakhstan’s machine-manufacturing enterprises make major efforts to develop oil and gas machine-manufacturing. For example, production of over 320 items of oil and gas machine-building has already been set up in Kazakhstan, - Meiram Pshembayev, Chairman of the Management Board of ALE "Union of Machine-Builders of Kazakhstan”, said.

To organize production of special oil and gas equipment (cavity pump, electric centrifugal pump units, gas-distributing plants) in Kazakhstan, KMG NC made a Technology Agreement with the RoK Ministry of Industry and New Technologies (RoK MINT) in November, 2010. Under this agreement it is understood that JSC “Center for Engineering and Technology Transfer” under the RoK MINT, through the Oil and Gas Engineering Design Bureau established under its auspices, will provide Kazakhstan’s machine-manufacturing enterprises with technical and technological documentation for setting up output of the products in demand by KMG.

In the course of the meeting, the representatives of Kazakhstan’s machine-manufacturing enterprises noted that, in connection with the prospect of creating a Common Free Market Area and accession to the World Trade Organisation, the Republic of Kazakhstan will be obliged to eliminate the regulations providing preferences to the domestic goods producers in its domestic legislation. Accordingly, the mechanism of direct participation of the national companies of the Republic of Kazakhstan in the company-specific machine-manufacturing assets (oil and gas machine-manufacturing, railroad machine-manufacturing enterprises etc.) will continue to be one of the few possible mechanisms for support to the domestic machine manufacturing.

Giving a speech at the meeting, the Chairman of the Management Board of JSC NC “KazMunayGas” Kairgeldy Kabyldin noted that the matters of the Kazakhstani content have always been, and will be of the utmost importance to the state, and encouraged the operators of major oil and gas projects to make their best efforts to arrange conditions for involvement of the Kazakhstani suppliers of goods, works and services in the implementation of these projects.

- And the first efficient step in this direction could be creation of working groups with the participation of the representatives of the Union of Machine-Builders of Kazakhstan, National Company “KazMunayGas” and other petroleum operators, - Kairgeldy Kabyldin, Chairman of the Management Board of JSC NC “KazMunayGas”, emphasized.

Following the outcome of the meeting, the participants supported KMG NC’s initiative on creation of working groups with the participation of representatives of KMG NC, ALE “Union of Machine-Builders of Kazakhstan”, petroleum operators (LLP JV “Tengizchevroil”, NCOC and KPO B.V.) with a view to expanding cooperation in the development of the Kazakhstani content individually on each major oil and gas project, and agreed to formulate specific proposals on establishment and development of new businesses and joint machine-manufacturing ventures.