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ИНВЕСТИЦИОННЫЙ ФОРУМСОЗДАНИЕ НОВЫХ ПРОИЗВОДСТВ В ЗАПАДНОМ

КАЗАХСТАНЕАктау 24-26 сентября 2012

Жакып МАРАБАЕВЗаместитель Управляющего директора

LOCAL CONTENT IN THE NORTH CASPIAN PROJECT

CREATION OF THE NEW PRODUCTION FACILITIES IN THE WESTERN KAZAKHSTAN

24-26 September 2012, Aktau

Zhakyp MARABAYEVDeputy Managing Director

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NCSPSA Contract Area

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New Operating Model

North Caspian Operating Company B.V. is an Operator under the North Caspian Sea Production Sharing Agreement since 22 January 2009.

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Nationalization

In Q2 2012 Consortium employed 22000

people in Kazakhstan inclusive of

subcontractors. 

Around 80% (79,4 %) of them are RoK citizens

which is an outstanding ratio for this type of

Project.

In Q2 2012 Consortium employed 22000

people in Kazakhstan inclusive of

subcontractors. 

Around 80% (79,4 %) of them are RoK citizens

which is an outstanding ratio for this type of

Project.

Local Content in Procurement of Goods, Works and Services

Breakdown of GWS procurement in 2011More than 8 billion USD has been

paid for local goods, works and

services for the period 2006 – 2

quarter 2012.

* Reduction in Local Content level since 2010

relates to the changes in the Kazakhstan

Content Methodology calculation in accordance

with the current legislation

More than 8 billion USD has been

paid for local goods, works and

services for the period 2006 – 2

quarter 2012.

* Reduction in Local Content level since 2010

relates to the changes in the Kazakhstan

Content Methodology calculation in accordance

with the current legislation

Share of Local Content from Total Expenditures

Payments for local GWS in 2011 were USD 1,085 bln (more than KZT 160 bln) or 27% from total payments. Share of procured Goods is showed including in Works.

Payments for local GWS in 2011 were USD 1,085 bln (more than KZT 160 bln) or 27% from total payments. Share of procured Goods is showed including in Works.

Last saved: 17 September 2012 19:04, Author Department: Contracting & Procurement (KZ)

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Goods

Services

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Long Term Local Content Development Program

NCOC B.V. developed and implements Long Term LC Development Program 2011-2015

Market Capability Overview

Operations and Maintenance Requirements

• Phase 2 •Compression Centre (СС01)

• Kalamkas Searequirements

Phase 1Historical data

analysis

•SDK •NCPOC •AKCO•EMKI

Last saved: 17 September 2012 19:04, Author Department: Contracting & Procurement (KZ)

Review of Kazakhstan

Market Capabilities at

Pre-Project Stage

Local Manufacturers of Spare Parts

and Consumables

Craft Skills Training

Development and further involvement of local vendors at NCSPSA

Craft skills trainings

Craft skills trainings

JV Facilitati

on

JV Facilitati

on

ASME, API, ISO

certification

ASME, API, ISO

certification

ResultResult

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and

Contract award

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Local Content Achievements in the North Caspian Project

During implementation of the long term local content development program the Venture initiated training and successfully certified 56 local companies under such international standards as ISO 9001, ISO 14001, ISO 22000 and OHSAS 18001.

Consortium is the only among Major Oil and Gas Operators in Kazakhstan that funded and coordinated implementation and certification of the well known Kazakhstan manufacturers to the recognized international standards of American Petroleum Institute (API):

Ust-Kamenogorsk Valve Plant and to American Society of Mechanical Engineers (ASME) standard: Zapadno-Kazakhstanskaya Mashinostroitelnaya Kompaniya JSC Petropavlovsk Plant of Heavy Machine Building Montazhengineering Company

In2011 109 local companies have successfully passed qualification audits according to the Consortium requirements under 7 commodity areas. Consequently these companies are included in the Vendor Development Program.

Operator trained more than 500 employees from 34 local companies to the most demanded craft skills like pipe layers, instrumentations electricians, operators of plant installations, divers and others. These companies are potential vendors to the NCSPSA.

As a result of the purposeful activities towards Joint Ventures facilitation and their involvement to the Project, around 70 JVs provide their services to the Venture as of 2005

in the course of activities at the present 2600 Kazakhstan companies have been registered in the Vendor Database of the Venture.

OEM and Spare Parts Civil WorksTransport Electrical

Works

Long Term Service

Maintenance

Structures and Tanks

Waste Managem

ent

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Local Company’s Success Stories on Kashagan

Since 2005 started working on Kashagan with the first accommodation barge. Total fleet under management has expanded to 39 vessels.

In 2008 Operator sponsored training and certification under standard ISO 9001:2000

As of 2012 ratio of Kazakh citizens in the crew members reached 70%.

In 2006 the Company started its activities in the North Caspian Project, providing services in D Island for personnel.

By 2011 the number of Company’s personnel reached 230, which is ten-times higher the initial indicator.

In March 2011 Ships Catering Supply received an international quality certificate of Moody International ISO 22000 for safety of food products.

Currently, the Company services six facilities as part of the North Caspian Project and continues to develop.

If you are interested in cooperation with the Consortium, please visit our Web-site: www.ncoc.kzIf you are interested in cooperation with the Consortium, please visit our Web-site: www.ncoc.kz

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Local Content on the North Caspian Project

Development of Kazakhstan Industrial Sector

In February 2011 NCOC has entered into the Working Group together with Union of Machine Builders of Kazakhstan (UMBK) and KMG, in frames of which Operator:

developed a list of O&G equipment and spare parts for perspective demand at North Caspian project which consists of more than 30,000 and submitted for further analysis to UMBK for examination and identification of the list of equipment which has a potential to be produced in Kazakhstan

determined priority commodity groups of international and local manufacturers.

held marketing survey on machine building industry of Kazakhstan, where identified constraints and recommendations on development of Kazakhstan enterprises. 200 manufacturing companies have been reviewed.

on May, 2011 NCOC in cooperation with TCO, KPO and JSC NC KazMunayGas organized Forum “Original Equipment Manufacturing and Spare Parts”. Forum has been held under the auspices of KazEnergy Association. The main objective of the forum was to support further development of local market on production of goods and services demanded by oil and gas industry and joint venture facilitation. 40 local and 54 foreign companies participated on this event.

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Local Content at the early stage

Compression Centre (СС01)

PHASE 2

KALAMKAS SEA

Perspective Projects and

potential for LC

Government and concerned

Government bodies for

development of LC

Operator

Detailed analysis and market potential study:

Fabrication yardsShipyards Steel structures constructionModules transportation and installationRock supplyHook-up and commissioning

Phase 1 historical data analysis

LC identification at early stages of contract

strategy development

Upgraded local content strategy for the development project

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CONCEPT SELECTION CONCEPT DEFINITION PROJECT EXECUTION END OF PROJECT

Local content : one of the criterion used for

the selection of concept

Develop a Local content plan

Shall be based on :•Concept selected•Market survey•Contracts awarded after competitive tenders•Promotion of new potential bidder, if needed through new JV with International companies

Shall include::•Scope tendered in RoK with list of certified bidders•Scope tendered on open market•Sustainable element to be included in the scope of the tender

LC Plan endorsed

Endorsed plan used as a basis

for tendering

Experience build up

through the execution of the contract

New equipment and skills

acquisition

RoK contractors with enhanced

equipment, facilities,

skilled personnel, experience

New tenderwith

increased local content

NCOC intention is to use Kalamkas Sea as a pilot project to further develop this strategy. This strategy is still being developed and has not yet been finalized. It is

presented as an illustration of the room for improvement.

SANCTION

NCSPSA future projects

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Preliminary evaluation of manpower needs

Occupancy of existing yard capacity Man hours on installation and Hook up

(k Man-hr)

These figures are preliminary are based on the timely approval of the projects by the Consortium and RoK Authorities allowing FEED start as follows: CC01 2013; Kalamkas Sea 2014; Phase II 2016, 2017.

These figures are preliminary estimates. The Venture has not yet taken a final investment decision on these projects and these projects are subject to the necessary approvals by the RoK authorities. The figures will furthermore be affected by the timing of such decision and approvals.

Thank You for Attention

April 21, 2023 14