Sino-Kazakh Great Wall Drilling Company Faces Bankruptcy

In Aktobe region the Kazakhstan-Chinese Drilling Company “Great Wall” is laying off its employees in a mass scale. In 2016 the oil company made 499 employees redundant and cut average wage and social allowance payments. In this regard the head of the region Berdybek Saparbayev has stated he may close the company’s business, according to

It has been found out that the memorandum between the region akimat and the Chinese company isn’t observed, and not only the salaries are cut but also personnel are laid off. In 2016 499 people were laid off without, 2 were on unpaid leave and 422 people were temporarily unemployed due to down town.

Akim of Aktobe region Berdybek Saparbayev made a condition to the Chinese company.

“In other company salaries grow, whilst you lay off people. All companies abide with social obligations and you don’t. Then we should close your business. We don’t want a problem company. We have many other issues to resolve. We will find jobs to the 900 workers and close the company on the legal basis”, said the akim.

General Director of the Great Wall Chzhan Xzyun in reply explained the situation.

“Salaries make 28 % of all expenses of the companies. Material expenditures for drilling and diesel fuel make 30%. 30 % more is spent for depreciation costs. We also have transport expenditures. In 2016 the work volume wasn’t big, therefore our expenditures amounted to KZT 1 billion 600 million”, said Chzhan Xzyun.

The akim reminded the company had received USD 100 million from the founders which is enough to cover all needs of the company. Chzhan Xzyun replied that USD 24 million of that money was used to repay the bank debt, and the other part of money was used to settle the debt for the materials purchased in China.

“You have laid off 60 % people. The first personnel who should be laid off are Chinese and foreign employees, to begin with. Secondly, do not hire Chinese specialists of the 3rd and 4th category. Only 1st and 2nd categories specialists are admitted”, Saparbayev said.

“The reason why we hire specialists of the 3rd and 4th category from China is because we use Chinese equipment, and whenever it fails the Chinese specialists have more chances to fix it”, the company director said.

In the end of the emotional dialogue Chzhan Xzyun was asked how many of the laid off staff would come back to work, he asked “to give time”.

In February we will launch two drilling units which means 114 people will come back to the work. We also calculated that in 2017 when the work scope is maximum we will have 800 people working. However so far there is not a lot of work, so we will keep 600 people. We cannot promise that we return all employees but we ask you to give us some time” – Chzhan Xzyun said.

Saparbayev noted that the region akimat can help the Great Wall if it cooperates with other regions, such as Atyrau, Mangystau and West Kazakhstan region and Russia. However he left the issue of terminating the company’s business open.

“You should send a letter to the founders. If they don’t improve the economic condition of the company we will take measures up to bankruptcy procedure. We don’t need a problem company. The economy of Aktobe region does not depend on this company. Out of 900 people 422 no longer work there. We can find jobs to the rest 500”, said the akim of the region.