NCOC believes that activities performed under the NCSPSA offer a significant opportunity to develop the Kazakhstan economy in a sustainable manner.
First and foremost, we believe this can be achieved by managing our own business safely, responsibly, efficiently and transparently, in compliance with all applicable laws and regulations of the Republic of Kazakhstan.
The Kashagan project marked the start of the offshore oil development in Kazakhstan. When the decision was made to implement this highly challenging project; support bases, infrastructure, construction equipment, marine vessels and drilling rigs needed for the development of the project did not exist in the Caspian region.
Substantial investments into the development of local suppliers, workforce and infrastructure have resulted in the establishment and growth of various industries in Kazakhstan.
The greatest opportunity for NCOC in local content is in conducting the potential ‘Early Tenders’ scope. NCOC is seeking
for the opportunities to fully exploit such category of materials. There is limited opportunistic OEM only scope that
may be available for COMPANY to pursue. In such cases, COMPANY will seek from the OEM to get local value adding
facilities to be set up in Kazakhstan. In all other cases, COMPANY will work to develop the vendors to either set up
local distribution facilities or in some cases assembly testing and certification facilities to support local content
development. The COMPANY has also developed a Local Content Memorandum of Understanding to be
included in the Form of
Contract. This memorandum is a layout the COMPANY’s Local Content strategy, and acts as a commitment for SUPPLIERS to
engage in discussions with the COMPANY on opportunities to increase Local Content by taking incremental steps toward
localizing the supply in relation to the framework agreements. All OEM’s will be required to develop a local content
plan, and the Company will work to implement the steps in these plans with the support of PSA LLP and KazInvest.
A Original Equipment Manufacturer (OEM) is a company that manufactures original parts and equipment
A Non-Original Equipment Manufactured ("Non-OEM") parts and equipment, also known as aftermarket parts, are generic parts produced by independent manufacturers who manufacture replacement parts and sell them cheaper than the original equipment manufacture
NCOC IS COMMITED TO LOCAL SUPPLIERS, PROVIDED THEY MEET QUALITY, SAFETY STANDARDS AND OFFER MATERIALS AND SERVICES
COMPETITIVE IN PRICE, QUALITY AND AVAILABILITY TO THOSE PROVIDED BY INTERNATIONAL SUPPLIERS. BUT HOW DOES ONE DEFINE
“LOCAL SUPPLIERS”? AND WHAT IS THE BEST WAY TO IDENTIFY AND RESPONSIBLY DEVELOP THEM? NCOC’S OBJECTIVES ARE TO:
The idea is to find locally-based suppliers in key categories who will commit to invest and work closely with NCOC with clearly-defined scope and under long-term contract to gradually increase their Kazakhstan content in a “staircase” approach.
At each “step” of the staircase, the supplier’s business plan moves from simply warehousing imported goods, to assembly,
testing and certification in-country, then basic manufacturing, and finally advanced manufacturing and sourcing domestic
raw materials. Each “step” is a step-up in value added within Kazakhstan. Each “step” also requires the supplier’s
The full scope of equipment, materials, spare parts and consumables is split into four individual categories: Rotating, Mechanical, Electrical, & PACO (Instrumentation).
A contracting strategy has been developed for each of the four categories. Each individual ‘category’ contracting
strategy will detail how the proposed procurement approach outlined in this overall strategy will be implemented, the
actual contracts to be awarded, and how it captures local content opportunities.
C&P Materials Management team covers the planning, organising and control of activities related to procurement of
equipment, materials, spare parts and consumables (Items) by NCOC. The complete end-to-end materials management process
includes the following activities:
Unified Methodology for calculation by organisations of Kazakhstan's content in procurement of goods, work and services — the procedure to be approved by the Government of the Republic of Kazakhstan which is applied to calculate Kazakhstan's content in procurement of goods, work and services;
Kazakhstan manufacturer of goods citizens of the Republic of Kazakhstan and (or) legal persons of the Republic of Kazakhstan that produce goods of Kazakhstan origin;
Kazakhstan manufacturer of work, services citizens of the Republic of Kazakhstan and (or) legal persons organised in accordance with the legislation of the Republic of Kazakhstan, with the place of location in the territory of the Republic of Kazakhstan, that use not less than ninety-five per cent of citizens of the Republic of Kazakhstan in the total number of employees;
Goods of Kazakhstan origin goods to which a certificate of origin of goods for home circulation is issued that confirms they originated in the territory of the Republic of Kazakhstan;
Kazakhstan's content in goods a percentage of the value of used local materials and costs of the manufacturer of goods relating to processing of the goods, which are incurred in the territory of the Republic of Kazakhstan, in the final value of the goods;
Kazakhstan's content in work (service) a total summarised portion of the value of Kazakhstan's content in goods that are used in performance of work, in the price of a contract and (or) work remuneration to employees who are citizens of the Republic of Kazakhstan in the fund for work remuneration of the manufacturer of work (service) under a given contract for performance of work or rendering of the service, less the value of goods that are used in performance of work, and prices of subcontracts;
Kazakhstan's content in personnel a number of Kazakhstan personnel in per cent of the total number of personnel engaged in the implementation of a given contract, with breakdown by categories of workers and clerks;
The operator has developed a systematic approach to local industry development, which in turn, represents a cyclic process with four main phases: planning, development, realization and monitoring.
As part of planning phase the Venture developed and enendorsed the long-term Programme for the development of local content to identify Kazakhstan market opportunities and potentioal, raise local suppliers' capabilities within the framework of developing the Kashagan field and other projects where specific objectives have been set for increasing the proportion of local content.
For all contracts the local content strategies are implemented at the earliest possible stage allowing for capacity development of local companies.
During engineering and design stages of work the opportunities for local suppliers are maximized to ensure that out of country engineering contractors incorporate wherever possible local specified materials and equipment within design(GOST).
To leverage local content development opportunities the analysis of the future needs of the project is carried out and consolidated in the Company's long-team procurement outlook.
On September 25 2012, the Aktau Declaration on joint actions was signed between NCOC, KazMunaiGaz, TCO and KPO.
The Operator signed Aktau Declaration on joint actions (“AD”) on 25-Sep-2012 with: 1. Karachaganak Petroleum Operating ("KPO"); 2. JSCN C "KazMunayGas (""KMG") 3. Tengizchevroil ("TCO").
The AD is intended to develop a mechanism to improve the coordination and Consistency of individual Local Content industry development programs of Operators, investors and Agencies to allow for the exchange of non-sensitive and non-confidential data and development of new initiatives with achievable sustainable outcomes and timescales.
An Industry Task Force has been formed, comprising industry stakeholders, to deliver and implement the AD. The functions of the Industry Task-Force is to identify synergies, advance the outcomes of current local content development programs and define new tasks to contribute to the growth of sustainable local supply chain capacity.
Priority front end activity topics intended to be addressed by the Industry Task Force together with other relevant associations are:
• Preparation of a comprehensive project demand and supply to be agreed by Operators to ensure that all initiatives within the AD are based on a thorough understanding of local content sustainability.
• Clarify the constraints of local content industry development initiatives as a result of Operators working within different contractual frameworks (PSA, JV).
• Provide consensus on the extent to which harmonization of prequalification and tendering processes can be accommodated, acknowledging that Operators work with different corporate practices.
• A review of all established and emerging local content industry development programs to allow synergies and opportunities for cooperation and support.
The dynamically developing oil and gas sector offers a lot of opportunities to the young Kazakhs. By virtue of its innovation and technical complexity, it requires the utmost professionalism from those working on it.
In line with the provisions of the agreement on the North Caspian, the requirements the law and the plans and objectives set by the head of state, NCOC and the agent companies are seeking to increase local content to a maximum. The Venture has drawn up a long-term programme for raising the professionalism of Kazakh specialists with the aim of gradually replacing foreign staff with local personnel.
The operator uses a variety of approaches and procedures in its efforts to, over time, substitute foreign specialists with skilled local workers, who are suitably trained and experienced. A nationalization program guides this process.
The PSA specifies (art. XXVII) the overall targets in terms of manning levels of Kazakhstan citizens employed in carrying out Petroleum Operations. The Kashagan Venture significantly exceeds these targets as it is shown in the figure below.
At peak time in 2010 the Project employed more than 42,000 people (including contractors), hence it was one of the biggest employers in Kazakhstan.
As of beginning of 2015 88% of staff working for the Kashagan project are Kazakhstani citizens.
100 Year Experience in Machine-building
Steer / Heading for Green Economy
On successful API certification.
How Kashagan Project inspired the development of Kazakhstan oil service company in marine industry.
About the Scientific and Research Centre with 20 - year experience of cooperation in geological and geophysical activities with the North Caspian Project.
About Montazhspetzstroy, one of the flagship engineering companies in Kazakhstan, which could become a leader in the national market of engineering, structural, installation and commissioning activities over the years of independence.
About a leading national company providing the offshore petroleum operations support services in Kazakhstan Sector of the Caspian Sea, which is actively involved in Kashagan development and implementing a variety of onshore infrastructure projects. Currently it complies with the highest international offshore petroleum operations support standards.
History of development of one of the largest offshore contractors in the North Caspian Sea, which succeeded to become one of the leaders of Mangistau industry within 10 years’ time.
About challenges one faces when competing with international companies and about how Kashagan gave a start in life to Kazakhstan’s first private shipowner company.
About creation of a new services domain in Kazakhstan for offshore petroleum operations and about setup of a first domestic offshore catering company.
About captains of the North Caspian sea, those professions, which Kazakhstani citizens started to explore after gaining independence.
About construction of the Bolashak plant and how the company, which has the richest background of cooperation with the North Caspian Project, operates these days.
A history about how a product of one of the most promising companies in Atyrau achieved a world quality level in the oil services market.
About how the experience of UK specialists helped a company become one of the largest JVs in the area of engineering services.
About young Kazakhstanis and new generation of national specialists who came to replace foreign managers in the Kashagan project.
NCOC's procurement activities are ethical, fair, transparent and non-discriminatory, in accordance with the NCOC Code of ethics and in compliance with all applicable legislation and the PSA: a selective competitive tendering method is adopted in reaching a contract award decision, treating tenderers with absolute fairness and maintaining confidentiality.
The Prequalification process executed by individual agents aims at populating the NCOC Vendors List (containing details of each supplier who has been evaluated against the requirements associated to an NCOC commodity class) who can then be considered for participation in tenders.
Market Intelligence - NCOC is committed to identifying vendors that can be potentially involved in its business. Vendors can be contacted by the Agents directly or through a vendor's self-request. If you want to provide NCOC with general information about your business, please fill the form at the and the top of this page.
Once the form is received, NCOC will register it in a dedicated Market Information Database where it gathers and stores information on possible suppliers for use by the Company. This registration does not automatically result in qualification.
In case potential user decides to move a vendor from the Market Information Database to its Vendor List, a qualification process will be started and the vendor will be assigned to specific Supplier Quality Engineer (SQE).
The SQE will contact, guide and assist the vendor through the qualification process from start to end.
During this phase, the vendor is required to provide the CH with all requested, relevant and necessary information. Failure to provide this information may result in the process being cancelled.
Vendor evaluation - this phase aims at assessing vendor capabilities and compliance with NCOC prequalification criteria and against a specified commodity class.
This task is performed through:
Once the evaluation is complete, certification of the result is issued to the vendor by the qualifying Agent.
Tendering and Contract Awarding - aims at awarding the contract to the Tenderer who submits the most economically advantageous and technically acceptable offer, as a result of a competitive tender process.
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