Tengizchevroil creates conditions for import substitution

18 May 2022

Within the framework of the "Oil and Gas Machinery Building Development forum" held in Nursultan, Kazakhstani Content Development specialists of the country's largest taxpayer, Tengizchevroil, spoke about their efforts on import substitution and development of local suppliers.

Tengizchevroil LLP (TCO) occupies a leading position among oil and gas operators in terms of the volume of purchased Kazakhstani goods, works and services. The indicator of Kazakhstani Content (KC) in the Tengiz project is steadily growing. In 2021, TCO’s KC spend amounted to $3.6 billion, which is a 15% increase over 2020.

In order to create conditions for import substitution, TCO has identified 5 priority items for localization development: shut-off valves, flanges/fittings, pressure vessels, instrumentation and electrical equipment. Also, over 50 types of goods and services have been identified as having a high potential for localization. In 2021, manufacturers producing high-voltage cable, fiber-optic cable, repair of low-voltage engines, service and inspection of gas turbines were qualified. In 2022, technical qualification is being carried out on Kazakhstani manufacturers of such products as cable trays, ball valves, junction boxes, pipeline obturators, high-voltage substations, repair/manufacture of drill bits, fire engines and fire extinguishers.

“We constantly cooperate with NCE Atameken, Kazenergy Association, RoK Union of Machine Builders, Petrocouncil and KazService to work on the initiatives for development of local content,” said Daniel Zholdybaev, TCO Director for Kazakhstani Content Development.

Daniel Zholdybaev also noted the criteria that Kazakhstan companies should improve: “In short, the first is meeting deadlines - the supplier needs to respond to requests on time. The second is certification - you need to comply with standards and have the latest certificates, such as ISO, API, ASME and ASTM. The third is technical and commercial issues - often the requested data is not available, the proposal should be in full package. The fourth is a non-competitive pricing policy - there must be an understanding of the market and competitors so that the tender offer is competitive. And the fifth point is the quality management system - namely highly qualified and certified personnel.”

To improve this situation, TCO conducted a series of training events in 2021, including a training course for suppliers to be prepared to oil operators’ tenders, which was attended by more than 300 participants; the course "Internal Auditor of Integrated Management Systems"; ISO 9001:2015, 14001:2015 and 45001:2015 standards, API Certified Training; and Kaizen/Lean Sigma Training. All participants received course completion certificates. Also, a unique course on product labeling requirements, namely EU (European Union) and EEU (Eurasian Economic Union) certificates of conformity is being developed.

TCO constantly conducts joint events with our business partners and cooperates with Akimat, Ministries and Associations to find qualified companies for early identification of opportunities in increasing the share of local content.