Chief Potential of Karachaganak
Karachaganak is now known far beyond Kazakhstan. The development of this field has a great impact on the economy of the region and of the whole country; thousands of Kazakhs pin their hopes on and link their lives with it. Karachaganak is unusual because it is one of the world’s largest fields. Its reserves stand at 1.2 billion tonnes of oil and gas condensate and 1,350 billion m3 of gas.
Karachaganak is now a large-scale investment; thousands of jobs are directly or indirectly linked to the field, employees include highly-qualified specialists, while oil operations meet world-class standards. This is possible thanks mainly to partner relations established between Kazakh government agencies, the local population, and companies involved in the Karachaganak project, including Britain’s BG Group, Italy’s ENI, the USA’s ChevronTexaco and Russia’s LUKOil.
Since the signing of the Production Sharing Agreement, which is a document that regulates relations between the consortium of foreign investors and the Kazakh government, many impressive results have been achieved. Partnership between the KazMunaiGas national company and the Karachaganak Petroleum Operating consortium has resulted in the adoption of some of the most advanced technologies used in the global oil and gas industry. This has made it possible to achieve an annual output of 14.2 billion m3of gas and over 10.5 million tonnes of fluid hydrocarbons in the field.
Moreover, KPO is a major employer in the region. The key requirement the company sets for specialists is that they have world-class professional skills. All these components have become the foundation for the implementation of the Karachaganak project, which, beyond all doubt, has become a flagship of the Kazakh economy and an example of successful cooperation between Kazakhstan and foreign companies.
Roger Fox, General Director of KPO, says: Karachaganak is one of Kazakhstan’s major international projects with total investment in excess of $5.5bn. The field now is not just huge hydrocarbon reserves. Our multi-billion investment in its development, successful production operations, transferral of new technologies and contribution to the region’s social sphere to a significant extent help the dynamic economic and social development of West Kazakhstan Oblast. In its work, the company takes into account many aspects, such as economic, environmental and social factors. Key aspects include the employment of local personnel and contractors and professional development and improvements to the qualifications of Kazakh specialists.
The recent history of Karachaganak started in 1998, and the programme of employing national specialists was launched immediately. Its main aim was to gradually replace foreign specialists with Kazakh professionals. That is why KPO is now facing the task to build an efficient team of Kazakh specialists who are capable of running one of the world’s largest oil fields. The requirement for training national specialists was stipulated in theFinal Production Sharing Agreement.
In order to cope with a task of this magnitude, KPO has drafted the Strategy to Develop Local Personnel. Its successful implementation will have a significant impact on the consortium’s production activities in both the short-term and the long-term. The strategy takes into account the individual demands of Kazakh employees that are necessary for their further professional growth.
Oksana Rastorguyeva, head of the training and personnel development department, says: The company’s main focus is on human resources. These are specialists who are capable of achieving the targets set for them. The level of the personnel’s professionalism will define how qualitatively and timely production tasks will be implemented. A worker’s career growth in the company is built on their potential, their positive achievements in fulfilling functions and their successful implementation of an individual development plan. KPO’s Strategy to Develop Local Personnel is based on individual development programmes and staff training. Correspondingly, its budget is defined by individual training requirements. As a result, the average spending on training and developing personnel stands at $14m a year.
The adoption of high levels of technology, the improvement of efficiency of using resources and the professionalism and high levels of competence of Kazakh specialists are the main criteria the company applies. In the town of Aksay, which is the administrative centre of the project, there is a centre for training personnel that aims to improve the professional qualification of local personnel of KPO and contractors. Paid for by KPO, thousands of Kazakhs undergo training at this centre every year.
The Strategy to Develop Local Personnel envisages teaching international management to personnel. The main idea of this programme is to build a solid foundation to further develop personnel. On-the-job classes are held by the best British trainers and the specifics of KPO activities are taken into account. The possibility of receiving an international qualification is a great incentive – many Kazakh employees who have successfully graduated from this programme have received important posts that match their professional levels.
Michael Derry, supervisor of the international management programme, says: KPO employees are undergoing courses that are taught by experienced teachers and are designed for 220 academic hours. Classes are held in the form of a seminar on each individual topic. In addition, one of the main tasks set for trainees is to perform course work that has direct relation to their jobs. In this course work, they have to draft recommendations to improve them. As a result, in their course works employees can justify their proposals to save funds and optimise work processes.
It is now very important to train a new generation of specialists – those who will have to run Karachaganak in the future. The company is on the threshold of launching the third, most important, stage of the development of the Karachaganak field – the commissioning of the fourth technological line. These projects will involve many university and college graduates who had good results. KPO is now running several educational programmes to enable them to understand modern methods in the oil and gas industry based on new technologies of extraction and high environmental standards. In particular, these are programmes for drilling specialists and well supervisors, young engineers, young technical specialists and others. After graduation from these courses the best students will get permanent jobs at KPO.
The oil and gas sector has been given the main role in achieving the ambitious task of Kazakhstan’s joining the world’s top 50 most competitive countries. That is why this field is being developed taking into account the country’s development prospects. Thanks to Karachaganak, the prestige of technical education is growing steadily in West Kazakhstan Oblast. Figures are the most convincing arguments: 700 Kazakh enterprises are involved in developing Karachaganak and they have received contracts worth over $1.7bn, while the share of Kazakh enterprises in the project now exceeds 62%. Moreover, by training their personnel at the expense of KPO, the consortium’s partners achieve new and higher levels of professionalism.
The team of Kazakh managers who can take right and well-thought out decisions, develop personnel and lead the company to fulfilling new production tasks is growing at KPO every day. Liabilities, set by the Final Production Sharing Agreement relating to training local specialists between 1998 and 2008, have been successfully fulfilled. Today’s task faced by KPO is the development of a new programme which will continue to help replace foreign workers with experienced local specialists.
KPO is currently conducting economic and technical research in order to significantly increase production. Investment will help create new jobs and become an additional incentive to develop the Kazakh economy. The Production Sharing Agreement was signed for 40 years. This means that future generations of Kazakhs will receive international qualifications, prestigious jobs and high salaries. The successful development of the field and the implementation of the Strategy to Develop Local Personnel will serve as a guarantee of using Karachaganak’s potential to the benefit of all Kazakhstan.
Table of contents
Oil Chronicles. Consumption Increases Editorial
Kazmunaigas – We Are Open to New Opportunities Kairgeldi Kabyldin
Export of Hydrocarbons. It’s in the Pipeline… Sergey Smirnov
Mining Survey. Immense Plans Editorial
Review of the New Law on Subsoil and Subsoil Use Saule Akhmetova
Kazakhstan’s Banks. Debt Hangover Editorial
Electronic Government. Where Dreams Lead Aleksandr Vasiliyev
