Kazakhstan In Legal Fillip For Locals
New legislation to require foreign operators to promote overseas competition from local suppliers, .
Kazakhstan is preparing legislation that will require international oil majors working on three large oil and gas projects in the country to prepare local suppliers of goods and services to compete internationally.
Speaking on the sidelines of the World Petroleum Congress in Istanbul, Arman Satimov, adviser to the head of Kazakhstan’s quasi-government KazEnergy association, said that an appropriate law is being drafted for consideration by parliament.
It is expected the law will clear ratification hurdles ready for approval by President Nursultan Nazarbayev towards the end of the year.
Satimov said the Kazakh authorities are generally pleased with the input of foreign operators of the Tengiz and Karachaganak onshore developments, as well as the Kashagan project, that has fostered the growth of local contractors over the last 20 years of operation.
According to estimates, Kazakh companies have supplied 46% of goods and services to the three projects for a total amount of about $6.5 billion.
Satimov added that international contractors that supply these three projects are engaged in transferring their expertise to the country by entering into joint ventures with local companies.
However, the emergence of new Kazakh companies servicing the three projects, has been mainly confined to three cities in the west of Kazakhstan – Uralsk, Atyrau and Aktau – lying outside the Kazakh traditional industrial area in the north-east of the country.
The future of these companies may be jeopardised once demand for their goods and services declines as the Kashagan, Tengiz and Karachaganak developments mature, Satimov said.
Hence, the authorities want local contractors to start marketing their services internationally, with an initial focus on the neighbouring Russia, to avoid the scaling down of their business and subsequent lay-offs, which could fuel unemployment and social instability, according to the official.