The Working meeting of the Oil and Gas company-members of the Foreign Investors’ Council chaired by the President of the Republic of Kazakhstan was held via videoconferencing under the chairmanship of Kassym-Jomart Tokayev to discuss the issues of increasing the investment attractiveness of the country's oil and gas sectors.
The online session was attended by CEO, Royal Dutch
Shell plc Ben Van Beurden, Executive Vice President of Chevron James Johnson,
Vice President of CNPC Huang Yongzhang, Eni S.p.A Upstream Director Guido
Brusco, President of ExxonMobil Global Projects Neil W.Duffin, Vice President
Caspian and Southern Europe, Total E&P Christine Healy.
Welcoming the
meeting participants, the President noted that the oil and gas industry plays a
vital role in the development of Kazakhstan. According to Kassym-Jomart
Tokayev, thanks to the gradual recovery of world trade and economy, we look
with hope at the prospects of the oil and gas sector, both internationally and
domestically.
“Therefore, we need to take advantage of this positive dynamics and determine further steps to increase the investment attractiveness of the industry in the long term,” - the Head of State noted.
Having listened
to the joint report on the elaboration of the issues raised at the previous
meeting of the Council in November 2020, the President of Kazakhstan noted
significant progress. In this context, the Head of State made a number of
important statements. In particular, he focused on the timely implementation of
agreements on major oil and gas projects. The President noted that the
Government and investors came to a common understanding, and also pointed out
the importance of ensuring their full implementation and making operational
decisions on them.
“Despite
the pandemic, the project for the future expansion of Tengiz is being
implemented on schedule. The final investment decision on the Karachaganak
field expansion project is another example of well-coordinated work. At the
moment, we expect the adoption of a full-scale development plan for Kashagan,” - said Kasym-Jomart Tokayev.
Along with this, the Head of State drew attention to
the government report, which presents new mechanisms for attracting
investments, in particular, improving model contracts.
In general, supporting these proposals, the President
pointed out the need to carefully study all the details of the proposed
approaches, which should ensure legal protection and stability of investments,
as well as, if necessary, investment preferences.
“Since
all projects have its own specifics related to geology, remoteness from markets
and types of oil, we need to avoid an “uniform approach”. The government should
classify projects by complexity and importance and, accordingly, determine the
instruments of regulation and support,” -
Kassym-Jomart Tokayev believes.
In this regard, he instructed the Government to submit
an improved model contract for the next meeting of the working group. In
addition, the President stated the need to develop a modern and flexible
mechanism for regulating investments in deep processing of hydrocarbons. The
head of state dwelled on the issue of increasing local content, recalling his
instruction to the Government to develop specific measures to ensure technology
transfer and localization of production.
“I have always emphasized the importance
of energy projects in creating in-country value, stimulating domestic
technological and industrial development. Unfortunately, there has been little
progress. We need new and bold steps,” - the President noted.
Kassym-Jomart Tokayev instructed the
Government, together with companies, to develop a Roadmap for technology
transfer and localization and report on this at the next meeting.
The head of state also spoke about the
newly created Front Office to solve the problems of investors. In his opinion,
the activities of this office should be professional, active, with minimal
bureaucratic procedures. The office should be empowered to solve problems faced
by investors and, if necessary, bring these issues to the level of the Oil and
Gas Council chaired by the Prime Minister.
The President focused on environmental
issues, noting that Kazakhstan supported the request of oil and gas companies to
eliminate discrimination in the application of payment for environmental
pollution when burning gas in flares.
At the same time, he indicated that he expects from investors decisive and practical actions to improve the environment in the regions of their operation and reduce the carbon footprint.