The impact of Tengizchevroil on the regional economy

A success story

 

An example of strategic partnership is the collaboration between Tengizchevroil and IMBC.

 

IMBC (International Center for Development of Oil and Gas Machine Building) facilitates the localization of oil and gas equipment manufacturing in the Republic of Kazakhstan, connecting local manufacturers with the needs of the industry.

 

IMBC was created at the initiative of the government of Kazakhstan by the major operators of the Tengiz, Kashagan, and Karachaganak fields — TCO, NCOC, and KPO. The participants of IMBC last year were joined by the operators of the Kalamkas-Khazar Operating, Silleno, and KMG PetroChem projects. The main goal of IMBC is to assist the development of local oil and gas equipment manufacturing for the needs of the operators. Before starting interaction with manufacturers, IMBC conducts preparatory activities for further cooperation.

 

First of all, IMBC thoroughly analyzes the demand of operators: collects and technically processes data on purchased products. Based on this research, commodity positions with high demand are identified.

 

The next stage is the analysis of the Kazakhstan market of manufacturers of oil and gas equipment to identify enterprises that possess the potential to produce products in accordance with the requirements of operators. Based on information from open sources, work with government agencies and industry associations, a search is conducted and a list of Kazakhstan goods producers is formed. That is exactly when the cooperation of IMBC with domestic manufacturers begins. IMBC sends them official inquiries, conducts negotiations, and organizes visits to production sites. During the visits, IMBC experts get acquainted with the enterprise and initially assess its technical readiness according to the requirements of operators.

 

 

 

 

 

 

Based on the results of joint work with factories and visits to production sites, relevant recommendations are formed and sent:

 

• If the level of readiness is sufficient, IMBC recommends the operators to consider the company as a potential manufacturer.
• If gaps are identified, IMBC develops recommendations to eliminate the identified deficiencies with the adoption of necessary measures.

 

About what results have already been achieved, we talked with the General Director of the International Center for Development of Oil and Gas Machine Building (IMBC) Dastan Abishev.

 

 

— What market problem does IMBC solve and what benefits can ordinary citizens see?

 

— IMBC assists in building bridges between the needs of major operators and the current capabilities of local production. For the first time in the country, a mechanism has been created to consolidate information on demand from several major operators at once. This creates an economy of scale: the manufacturer gets access to generalized information, can plan serial production, reduce self-cost, and increase profitability.

 

It should be noted that the availability of international certificates — ASME, API, ISO, IEC/IECEx and others — is of particular importance. Their requirements are dictated by the special conditions of equipment operation at high-tech and complex fields. Requirements for international standards and certification are based on experience and the best world practices of working on such complex projects.

 

The cost of obtaining such certificates can range from 30 to 250 thousand US dollars, which is a serious barrier for domestic manufacturers. In this regard, an important achievement was the proposal of IMBC, supported by RoK Ministry of Industry and Construction, to increase the threshold of state reimbursement of costs for certification from 3,000 to 15,000 MCI. This decision significantly expands the opportunities of domestic enterprises to participate in the procurement of operators.

 

For ordinary citizens of Kazakhstan, the following results of IMBC activities stand out:

 

• development of machine building creates additional jobs, stable earnings, the opportunity to upgrade qualifications and enter the international labor market;
• growth of tax revenues directed to social infrastructure – schools, roads, medical institutions.

 

 

 

 

— What is the essence and uniqueness of IMBC's cooperation with "Tengizchevroil"? What strategic goal do you set for this partnership?

 

— The cooperation between IMBC and "Tengizchevroil" is of a strategic and systemic nature. It is not just about analysis, but about work to transform the entire market of manufacturers — raising the level of domestic enterprises to international quality standards.

 

Cooperation with TCO implies high requirements for quality, industrial safety, and technological discipline. The introduction of international standards — ASME, API, ISO, and others — is stimulated. As a result, domestic companies implement modern quality management systems, invest in equipment, train personnel, and undergo international certification.

 

 

Development of Kazakhstan companies with the support of IMBC and TCO

 

Since the creation of IMBC, experts have visited and analyzed more than 300 Kazakhstan enterprises. Based on the results of each trip, specialists prepare detailed reports on the production capabilities of the visited manufacturers.

 

About 90 enterprises entered the short-list of manufacturers, that is, the list of companies that produce or are capable of producing products that have a stably high demand among operators.

 

Dozens of domestic enterprises are already included in the list of qualified manufacturers of TCO. This gives them the right to participate in competitions on an equal footing with international suppliers. Another nine companies are currently at the stage of implementing IMBC recommendations and in the process of passing the internal qualification of TCO within the framework of developing the potential of domestic manufacturers.

 

 

The cooperation between IMBC and TCO contributes to attracting investment into the industry, since TCO is one of the largest oil and gas operators in Kazakhstan, regularly purchasing huge volumes of goods, works, and services. This forms a constant demand for localized products and stimulates investment activity from international suppliers and manufacturers.

 

In the process of joint work with three major operators of the Tengiz, Kashagan, and Karachaganak fields, ten localization projects have been implemented, which provided investments of about 20 billion tenge and created more than 360 jobs.

 

Among the localized foreign companies are Honeywell, WIKA, Slb, Petrovalves, and other manufacturers of equipment and components for the oil and gas industry. Partnership with foreign OEM manufacturers ensures technology transfer and the introduction of international quality standards, industrial safety, and production management.

 

 

 

 

 

Localization allows to step-by-step increase the share of Kazakhstan content, form production chains, and reduce dependence on imports of high-tech products. Kazakhstan enterprises raise the level of engineering and production competencies. This creates a technological foundation for further industrialization and ensures the growth of competitiveness of domestic products both on the domestic and foreign markets.

 

In general, the cooperation between IMBC and TCO is a systemic tool for the development of local content, attracting direct investments, and integrating Kazakhstan into international industrial cooperation. It is not only about the localization of production, but also about the formation of a long-term growth model based on the creation of high-tech added value inside the country.