Kazakhstan localized five production facilities between 2022 and 2023, creating 177 jobs and attracting $13.8mn in investment, and plans to add three more facilities this year, generating 34 jobs and $3mn in new investments, the Prime Minister’s press service reported.
In a recent government meeting chaired by Prime Minister Olzhas Bektenov, Vice Minister of Energy Yerlan Akkenzhenov outlined the Ministry's new initiatives aimed at boosting local production and generating employment opportunities. The report highlighted progress in increasing domestic value in the hydrocarbon and uranium mining sectors.
For the first half of 2024, Kazakhstan has seen a positive trend, with domestic content accounting for 61.6% of the total purchases in these industries, amounting to KZT 1.7 trillion ($3.5bn). The achievement is attributed to new regulatory measures and practical actions by the Ministry, including mandatory adjustments to national content indicators in subsoil use contracts. The ministry has revised nine subsoil use contracts this year, raising the minimum domestic content by an average of 12% for goods, 20% for works, and 22% for services.
Future localization projects include partnerships with global manufacturers, aiming to create 127 new jobs and attract $17.5mn in investment by 2027.
Additionally, new procurement rules have been established, including a mandatory Register of domestic commodity producers, single-source purchasing from domestic manufacturers if only one is listed, competitive purchasing among multiple domestic manufacturers, and a five-year maximum contract term for imported goods with a localization program required.
Changes to reporting forms now allow better tracking of domestic content in purchases of goods and services by subsoil users. A key focus of these initiatives is the oil and gas sector, where efforts are concentrated on large projects such as Kashagan, Karachaganak, and Tengiz. The ministry forecasts an increase in Kazakh content in large oil and gas projects by 7% in 2024, 11% by 2027, and 15% by 2029. Twelve commodity groups have been identified as having high localization potential.
Recent progress includes the signing of contracts worth $240mn with domestic producers by Tengizchevroil, NCOC, and Karachaganak Petroleum Operating B.V. These contracts are expected to create approximately 30 new jobs and increase plant workloads by 20%. Open Days held in Atyrau showcased the needs of major oil and gas projects to over 300 local businesses, resulting in 55 cooperation memorandums. The ministry is working to convert these into procurement contracts by the end of the year.
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