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.
Nationalization Of The Workforce
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.