Global Experience of Total – key to success in Kazakhstan
Interview of Yves Louis Darricarrere, President of Total Exploration & Production.
Could you tell us about main development stages of Total company in Kazakhstan? What assets does your company own in our country currently?
Total E&P Kazakhstan was established in 1993, when the Government of Kazakhstan decided to launch the large-scale development project in Kazakhstani sector of the Caspian Sea having created the first national state company for offshore operations ”KazakhstanCaspiShelf“. Over 15 years ago, as a partner of the first international consortium, Total took an active part in the world’s most ambitious seismic acquisition in the northern part of the Caspian Sea. As a result of full-scale geophysical survey in 2000 the gigantic field of Kashagan was discovered. The project currently operated by NCOC, where Total has its participation share (16.81%).
Besides Kashagan project, we have established partner relations with the National Company KazMunayGas on Khvalynskoe field and for joint explorations both in Kazakhstan and abroad. We also plan to develop our activity in Kazakhstan as an operator of oil and gas projects.
Currently Total plays the key coordinating role in NCOC which is an operator of the North Caspian project. How does Kashagan development progress?
Total does play the key coordinating role in NCOC, since we have an extensive exploration and production experience in technically challenging and extreme conditions (for instance, projects in the North Sea, deepwater projects like Pazflor, etc.). Kashagan is one of such projects with its sensitive ecosystem, shallow waters with no access to open sea, high formation pressure, high H2S content, significant temperature swings in winter and summer.
Currently the first development phase of the project – called Experimental program – is coming to an end. It comprises construction of technological facilities for oil production and oil and gas processing before export, as well as raw gas injection. The first drop of produced oil is anticipated by the end of 2012. In this context, safety and environmental protection is one of the main criteria paving the way to start up..
What is the role of exploration and appraisal of new fields in Company’s strategy in Kazakhstan? In your view, what other business dimensions can bear future potential?
For Total E&P the exploration and production are the main lines of activity. High level expertise is our main competitive advantage in the world where the new resources have to be prospected and resources delivered in challenging circumstances. At the same time the demand for oil and gas continue to grow due to the pressure from emerging economies. In this environment Total E&P strategy is to acquire the new assets with increased geological and technological challenges and observance of high safety and environmental management standards. We follow our bold exploration strategy which recently brought us to large discoveries in Bolivia, French Guiana and Azerbaijan in 2011. Kazakhstan is not an exception in this respect.
In October 2011 Total signed the Memorandum of Understanding (MoU) with ”KazMunayGas Exploration and Production“ with the purpose to perform joint exploration both in Kazakhstan (North Usturt), and abroad. To achieve join objectives the two companies continue the search of other international assets of mutual interest, together with application for new asset in North Usturt basin. Besides exploration, we plan to develop alternative resources in Kazakhstan, because Total is not just an oil producing company, but a global energy company. Therefore, Kazakhstan has high potential for development of solar, wind energy, as well as biomass, and for us these are potential for new dimensions of our cooperation in the long term.
At some point Total initiated creation of Kazakhstan welding institute similar to the French “Institut de Soudure”. What is the current outcome of this work?
This initiative was voiced in December 2009 during the plenary session the Foreign Investors’ Council. The project of Welding Institute was specifically noted by Mr. Nazarbayev, President of Kazakhstan, and gained significant support from the RoK Government. Total is the coordinator of the project that brought its positive results. In 2011 Kazakhstan became the 55th member country of the well-known International Institute of Welding. At that time Kazakhstan Welding Association (KazWeld) has been created to act as an independent accreditation body ensuring implementation of internationally recognized diploma.
Today KazWeld comprises over 20 largest Kazakhstani and international companies and institutes. For us, this is a major contribution into development of local professional personnel, support of local content policy, sustainable development of the industry and economy.
Total also participates in a number of social and educational projects. Could you highlight the most interesting of them?
Total works to strengthen the image of the socially responsible company. Educational projects are part of our strategy wherever we operate, that is over 130 countries of the world. And everywhere we try to make our contribution in social projects. Therefore, such leading Kazakhstani universities like Nazarbaev University, Kazakh-British Technical University, Karaganda State Technical University, Academy of public administration under RoK President are our strategic partners, since long-term projects need highly qualified personnel.
For example, we support the joint educational program of Academy of public administration and National School of Administration of France. This institution is one of the most highly reputable in Europe in the sphere of business administration. Its graduates are among leading state politicians, members of Parliament, top-rank administrative and financial controllers, CEOs and top managers of largest state-owned and international companies, mass media and communications.
You are a co-chairperson of Kazakhstan-French Business Council. In this light how would you evaluate the level of business cooperation of our countries? From your perspective, what can be done for its further development?
Kazakhstan-French Business Council was established in 2008 at the initiative of the Presidents of the two countries. We hold annual joint forums and actively promote trade and investment between Kazakhstan and France as well as cooperation between Kazakhstani and French companies. During the last session of the Council in February 2012 in Astana attended by more than 60 French groups the issues of further improvement of cooperation between Kazakhstani and French companies, development of human capital, impact of Customs Union, implementation of PPP (Public-Private Partnership) were among the topics discussed.
I would like to note that French companies are very interested in investing in Kazakhstani economy, future technology transfer and participation in innovative reforms in various spheres of Kazakhstani economy.
What do you think about the investment climate in Kazakhstan in comparison with other countries where Total operates?
From the moment of independence the Republic of Kazakhstan achieved significant success in implementation of market-oriented economic reforms and in macro-economic stabilization. Market reforms; integration into the international trade and investment systems; new draft laws including Tax Code based on international standards and securities market – all of that attracts foreign investors. Long-term investment requires sustainable political and economic environment. This is the main precondition for dynamic Kazakhstan-French relations. We have always been and still are confident that Kazakhstan possesses high development potential.