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
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
may be available for COMPANY to pursue. In such cases, COMPANY will seek from the OEM to get local value
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
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
engage in discussions with the COMPANY on opportunities to increase Local Content by taking incremental
localizing the supply in relation to the framework agreements. All OEM’s will be required to develop a
plan, and the Company will work to implement the steps in these plans with the support of PSA LLP and
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
COMPETITIVE IN PRICE, QUALITY AND AVAILABILITY TO THOSE PROVIDED BY INTERNATIONAL SUPPLIERS. BUT HOW DOES
“LOCAL SUPPLIERS”? AND WHAT IS THE BEST WAY TO IDENTIFY AND RESPONSIBLY DEVELOP THEM? NCOC’S OBJECTIVES
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
raw materials. Each “step” is a step-up in value added within Kazakhstan. Each “step” also requires the
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’
strategy will detail how the proposed procurement approach outlined in this overall strategy will be
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
equipment, materials, spare parts and consumables (Items) by NCOC. The complete end-to-end materials
includes the following activities:
Memorandum of Understanding has been concluded with the following companies:
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
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
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.
German quality is the key to success
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
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
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
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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