KPO held local content forum “Karachaganak Expansion Project Stage 1”

ASTANA, Republic of Kazakhstan, 16 October, 2014 — Karachaganak Petroleum Operating B.V. (KPO) held a local content forum entitled "Karachaganak Expansion Project Stage 1" (KEP 1).

The forum was attended by senior representatives from the Ministry of Energy, the Ministry of Investment and Development, Akimat of the West Kazakhstan Oblast (WKO), KAZENERGY Association, "NADLoC" Agency, the RoK Union of Machinery Manufactures and Service Companies as well as leadership of the PSA Authority, KPO Partners and more than one hundred representatives of the country's business community.

The RoK First Vice-Minister of Energy, Uzakbai Karabalin, said: "Karachaganak is one of the largest oil and gas projects in the history of modern Kazakhstan. As you know, preparation works are beginning for one of the key projects — the Karachaganak Expansion Project. We consider this project as a unique opportunity for Kazakh businesses to accumulate the invaluable experience of working with one of the most challenging fields, to provide transfer of best available technologies and expertise, and to create a network of related enterprises in Kazakhstan in order to meet the needs of KPO and other oil and gas companies in the region", Uzakbai Karabalin added.

As Deputy of WKO Akim, Marat Karimov, noted in his welcoming speech, "the growth of economy is directly linked to advancement of its priority branches whilst industrial innovative development is one of the key points. This forum allows discussing opportunities for local content increase at KPO as well as debating the issues of all parties involved."

Greeting the participants of the forum, KPO General Director, Damiano Ratti, said: "KPO and Karachaganak Partners fully support the RoK Government's initiatives aimed at development of production and service clusters. We are set to implement a number of key projects in this field as part of future expansion of the Karachaganak project.

"KPO is planning a new project named 'Karachaganak Expansion Project Stage 1', which will create additional value for the Republic of Kazakhstan and the KPO Partners by optimizing stabilized liquid sales in the period beyond 2020. This may result in new large-scale investments, new innovative technologies, new local jobs and significant opportunities for Kazakh companies", he said.

"KPO would like to expand the participation of Kazakh producers of goods and services in our business activities. Therefore, we welcome any opportunity to extend the list of our business partners and look forward to start new mutually beneficial relations", he addressed the participants of the forum.

"I hope the forum will serve as a good platform to learn about the KEP1 project and to encourage international suppliers to consider production localization by establishing manufacturing plants in Kazakhstan and, where possible, to form joint venture partnerships with RoK entities for long term co-operation", added Damiano Ratti.

As part of the forum, the KPO representatives held question and answers sessions and round tables with the participants to clarify the needs of the KEP1 project for goods, works and services. In addition, issues related to local content, contract and procurement and vendor registration processes were discussed as well as vendor pre-qualification and tender requirements.

KPO is one of the companies in Kazakhstan actively developing its local content programme. The programme, has allowed the involvement of more than three thousand Kazakhstani companies into the development of Karachaganak. As of today, these companies for the period of 1998 — 2013 have received orders from KPO for over $4 billion. Last year, the proportion of local content in KPO contracts for the supply of goods and services reached more than 50% or $461.1 million in monetary terms.

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