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FGP slows down

March 6 2015, 17:06

By Laura Suleimenova

Even less than a month ago TCO denied information about forthcoming down-sizing  in contracting construction companies engaged in Future Growth Project (FGP at Tengiz. However, at the end of February some of activities on contracts signed between TCO and its general contractor KPJV have been stopped.

KPJV Ltd is a joint venture of Kazakhstan’s: Institute of Oil and Gas (KING) – 20%, "Kazgiproneftetrans" (KGNT) – 20% and the alliance of foreign companies FWP Limited (Worley Parsons Limited and Fluor Limited) – 60%.

According to our information, personnel lay-off started in Neftestroiservice company (NSS) that had contracts with KPJV  for construction activities. According to NSS founder Ibrahim Akdrashev, at the end of February they received a letter from TCO with notification that they are suspending activities till January 1, 2016. In particular, the activities has been suspended for underground pipelines, railway dead siding, etc.

- This was unexpected notice, said Akdrashev. Relying on concluded contract, we purchased equipment and machinery on our own money and did major repairs on the existing equipment, we mobilized people and now we are in such a situation. We will be forced to lay off up to 300 workers: both engineering and unskilled employees.

TCO’s general manager of capital projects Karl Brannen (on a photo), during annual conference "Kazneftegazservice-2015" in Atyrau confirmed our information:

– Yes, the project slowed down, but it hasn’t stopped. Towards the end of 2014 we sped up preparatory work on a number of major projects that we scheduled for 2015. But because of oil price falling we won't be able to support all these major projects. We suspended some activities of the contractors, but some projects, such as construction of big camp, we have even expanded. I repeat, the project isn't stopped, it simply slowed down.

Considering that the alliance of Isker and Bonatti companies will be engaged in construction of the field camp, Brannen probably meant by "big camp" the construction of "Shanyrak 6" – the additional camp for TCO employees.

During the breaks in the lobby the representatives of Kazakhstan construction companies showed their discontent that TCO selected as their general contractor for construction of this big facility their old partner - service company "ESS Support Services" (Eurest Support Services) specializing in caterings, camp operations, transport, etc. And ESS, in their turn, signed construction contract with the Turkish company “Treysan”.

According to informal information, the cost of the contract exceeds $100 million.

It should be noted that for implementation of gigantic project such as FGP Tengizchevroil established two legal entities with similar names. It is above mentioned KPJV Ltd. for activities in Kazakhstan located in Fluor and Worley Parsons offices in Atyrau and in Rixos hotel in Almaty, and also Kazakh Projects Joint Venture Limited (PJV). In this company there only two foreign shareholders: Fluor and Worley Parsons with equal shares. According to our sources, PJV supervises project activities outside of Kazakhstan and it is located in offices of Fluor in Farnborough (Great Britain), New Delhi (India) and Houston (USA). There, according to the same sources, up to 70% of FGP budget goes and the total amount of budget $38,8 billion (according to the latest data). 

Photos taken by the author

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