TCO: “Perhaps, you are aware of recent publications in the media...”

Ak Zhaik editorial office got hold of the following copy of an interesting document. Who exactly did Tengizchevroil’s top management address the letter to? Can the letter be assumed an informal response to a set of our publications concerning Kazakh content in oil and gas industry, including TCO projects? We will know this from further reactions. 

Update on Future Growth Project-Wellhead Pressure Management Project (FGP-WPMP)

Dear colleagues,

In 4th quarter of 2012, Tengizchevroil’s FGP-WPMP, a project of production capacities expansion at Tengiz field, is confidently moving ahead. As this safe and environmentally effective project is being promoted, we continue our constructive cooperation with our Partners, Kazakhstan government at all levels and a great many of Kazakh businesses in order to ensure maximum profit from FGP-WPMP to the Republic of Kazakhstan and our stakeholders.

Perhaps, you are aware of recent publications in the media where TCO, FGP and KPJV liabilities on Kazakh content and other areas were commented. We would like to take advantage of the chance and present updated information about our liabilities on Kazakh content, which is the critical aspect of our project:

- Over 20 years TCO has been steadily increasing the share of Kazakh content by means of transparent and open tenders in accordance with the requirements of Kazakh legislation and following principles of honor and integrity, as stated in TCO Way;

- In all events of granting numerous research and exploration contracts within the project, TCO applied reliable contract making procedures. As of today, not a single construction contract has been awarded;

- KPJV (FGP-WPMP design engineering contractor) is a joint venture formed between Fluor (30%), Worley Parsons (30%) and two Kazakh companies – KING (20%) and KGNT (20%), that play a significant role in the project. Recent meetings of KPJV partners demonstrated that KING and KGNT were satisfied over the progress achieved as a result of partnership and they consider themselves in the capacity of active members of the joint venture.

- Although a set of modules will be manufactured beyond Kazakhstan, TCO intends to significantly increase production capacities and capabilities of Kazakh companies. If Partners agree, in order to achieve this target it is planned to sign contracts on making the modules at production docks of Mangystau Oblast in 2013;

- Not a single decision on the project is being made in Astana, except those concerning alignments with public regulators and obtaining required permits. TCO’s spending on procurement of Kazakh goods and services from early 2012 till now, exceeded $1.23bn and TCO’s overall investment to the sphere of Kazakh goods and services since 1993 makes $12.5bn. We will not stop at the results achieved in the sphere of Kazakh content. We always strive to bigger achievements and for this we bring in extensive resources to seek for local content increase opportunities;

- Kazakhstan citizens make up 86% of TCO personnel (50% in 1993). Kazakh managers and supervisors constitute 77% of TCO managerial staff. Within almost 20 years, since the formation of TCO, we and a few thousand TCO employees who came before us, created a heritage of world class Kazakh content, thanks to our continuing commitment to local content principles and close cooperation with the government and thousands of Kazakh businesses. Increase of production capacities in Tengiz and TCO’s achievements in Kazakh content considerably contribute to economic and social development of Kazakhstan, and our joint venture's partners (Fluor and Worley Parsons) made a notable contribution to the process as well. TCO’s commitment to the objectives of Kazakh content strategy facilitated creation of a number of opportunities for the RoK. We are proud of this result, which is our incentive to greater success.

Another strategic intent of TCO is the respect of Kazakhstan people, which we treat very seriously. Every of us may be proud of the role Tengizchevroil plays and its contribution to development of Kazakh economy, now and in future.

Tim G. Miller,

Anuarbek Jakiyev

 Scans of the original text (in Russian)