I Eurasian Energy Forum

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Unity Forum: remembering the past 

First Eurasian energy forum KAZENERGY marked a new milestone in the development of fuel-energy complex of the country. For the first time in an atmosphere of constructive debate an attempt was made to define "trouble spots" of growth, to outline the prospects for further development.

Government officials, scientists, heads of major oil and gas and energy industries, foreign experts were able to discuss and answer the question regarding the direction of development of new projects, what are the solutions to chronic problems? It is KAZENERGY that became the interactive platform on which it was possible to maintain an equal conversation, not avoiding the most painful problems.

"First the economy and then politics!" – These words of our President Nursultan Nazarbayev could be the motto of the Eurasian Energy Forum. September 2006 became the starting point of the ideological structuring of enterprises of Kazakhstan's energy sector, which served to further the development of new philosophical approaches to the development of mutually satisfying society, government and business.

 
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Being the initiator of the Forum, the association KAZENERGY undertook a difficult mission to consolidate all the creative forces of the Kazakh "oil industry" and energy, becoming a force determining the vector of the further progress.

It is not necessary to recall that it is the oil and gas sector that plays the role of the "locomotive" of Kazakhstan's economy. From this we can say that the forum served as the ambitious target set by the Head of the State: the removal of Kazakhstan at the level of the most competitive countries in the world. But such an ambitious task should be preceded by an analysis of the initial conditions. The Forum has served this purpose.

It is not by chance that in his opening speech to the participants of the Eurasian Energy Forum the Chairman of the Association KAZENERGY Timur Kulibayev mentioned that "every realized oil and gas and power project allows our economy to make an extra push to create new jobs and appropriate niche for the development of local industries and service companies.”

“Even today, the contribution of the oil and gas and energy sectors in GDP is more than 50%, not to mention the predominant share of the tax”, continued Timur Kulibayev. “All this gives us every right to say with confidence: Kazakhstan can be proud of how the country's interests in are oil and energy sector are being implemented”.

Analyzing the situation in the oil and gas industry, Timur Kulibayev mentioned that the local content in major projects has already exceeded thirty percents and in the monetary terms is over one billion U.S. dollars.

“There is a huge potential to increase this rate to a level of 50% in the coming years”, said Timur Kulibayev. But this goal can be achieved only if there is mutual understanding between the parties. - For this we need to act on the principles of transparency, non-discriminatory approach to Kazakh suppliers of goods and services and cooperation with them on the long-term planning stage and implementation of international quality standards, the Chairman of the Association explained his position.

It was also noted that the Association KAZENERGY has a huge responsibility - to promote an enabling environment for dynamic and sustainable development of the oil and gas and energy system of Kazakhstan, to establish a dialogue between companies of the energy sector and the state and actively participate in drafting legislation and establishing fair rules for all participants in the energy market in Central Asian countries.
Timur Kulibayev stated the fact that the Association KAZENERGY «has established itself as an operating, highly efficient organization," a member of the Working Group of the Foreign Investors Council on petrochemicals, exploration and production, taking an active part in the development of important legislative proposals for the industry.

- Association KazEnergy is ready to act as a moderator between public authorities and enterprises of the energy sector, summed up the President of the Association.

Karim Masimov, the future Prime Minister of Kazakhstan has set the main objectives of the development. He proposed the participants in the discussion to focus on priorities of the energy sector.

According to Karim Massimov the main task should be the environmentally friendly industries.

“The basis for the development of extractive industries should be the policy of respect for the surrounding environment”, set the task the head the government. – “For that purpose I urge you to join efforts to promote clean technologies on the basis of international experience, the widespread application of the policy of "zero discharge" to ensure the ecological balance in the areas of the industrial activity”.

“Ignoring the requirements of environmental legislation is unacceptable!” said Karim Massimov.

In the future this line of work was developed in the Association KazEnergy activities on development of the Environmental Code of the country where strict rules on the "zero discharge" and several other important points have been allocated.

The future prime minister expressed the need to enhance the processing of oil and gas.

“As part of a petrochemical cluster in West Kazakhstan the Republic's Government is in the position to support those businesses that are ready for more advanced processing of raw materials, the development of petrochemical industries in the country”, the prime minister designated a task. “Your efforts to create joint ventures would make an invaluable contribution to the development of Kazakhstan”.

And this task is reflected in the KAZENERGY activities. It is known that the Association has become one of the initiators of the First Forum on the Caspian Development of refining and petrochemicals and a special conference in Astana. In the framework of the Association there was established a dedicated working group. There were outlined the ways of developing relations of industrialists, scientists generating know-how and what is important too, of the banking business.

Another serious problem posed by the prime minister: the development of the local content in the oil service sector.
“The catalyst for economic growth and development of small and medium-sized businesses and domestic machinery should be large enterprises of the oil and energy sector”, said Karim Massimov.

“I propose you to work out recommendations for increasing transparency in the conduction of tenders, real partnership with domestic business for good and rapid increase of the local content in the ongoing projects of members of the association”.

Karim Massimov noted that for its part the Government will review the laws for compliance with foreign investors of their commitment to the local content and involvement of personnel from among the citizens of our Republic.

The Prime Minister kept his promise. But the Association also has made the local content a constant topic of discussion at the Coordinating Council, with participation of foreign investors and international experts. The training of Kazakhstan personnel have been selected one of the priorities in the activities of the association and its members.

The result was an annual scientific conference on human resources conducted by a private institution - Unified Staff Development Centre of JSC "NC “KazMunayGas” with support of KAZENERGY 

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The activities of the Association were a logical continuation of the Government objectives. Tribute should be paid to representatives of the executive branch: the opinions and recommendations of members of the Association are considered.

Perhaps it was particularly that the thesis of the public-private partnership had a deeper sound, for the first time on the forum there was presented the "Development Strategy of Kazakhstan's energy sector" outlined in the report of the Vice-Minister of Energy Bolat Akchulakov. The Forum participants received a full layout of the government's intentions, the concept and ideology of the complex in the long term. The Regulation on the Extractive Industries Transparency Initiative realized in Kazakhstan has become a kind of food for thought, insight and a unique guide to action.

This line of work has become one of the most important priorities of KazEnergy. The Initiative advocacy constantly promoted by the Association has resulted in the accession of the country's largest oil and gas companies to the Memorandum of Transparency.

In their work the Association is not confined solely to the "inner circle" of its participants, practical issues and problems facing the industry. (These include the painful issue of transfer pricing that has repeatedly been discussed at the joint conference of the Tax Committee of the RK Ministry of Finance and the Working Group of the Association).

Presentations by members of the Association at various international forums provide a positive background to the government claims of a favorable investment climate in the country. It is interesting that the Eurasian Energy Forum has become an international event. It is being expected not only by the leaders of Kazakhstan enterprises but also by major expert groups and of course, by potential investors.

"All the flags are welcome at the Forum!" – The Eurasian Energy Forum opens its doors again to all who is ready for a constructive cooperation.

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