The Head of State took part in a working meeting of the Foreign Investors Council
March 3, 2021
Under the chairmanship of Kassym-Zhomart Tokayev, a working meeting was held with the heads of oil and gas companies-members of the Council of Foreign Investors under the President of the Republic of Kazakhstan in the format of a video conference. During the event, issues of increasing the investment attractiveness of the country’s oil and gas sector were considered.
The online meeting was attended by Chief Executive Officer of Royal Dutch Shell plc Ben van Burden, Executive Vice President of Production at Chevron James Johnson, Vice President of CNPC Huang Yong Zhang, Director of Upstream Business of Eni SpA Guido Brusco, President of ExxonMobil Global Projects Neil 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 said.
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 Karachagan 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 their own specifics related to geology, remoteness from markets, types of oil, we need to avoid a “uniform approach”. The government should classify projects by complexity and importance and, accordingly, determine the instruments of regulation and support, Kassym-Zhomart 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 under 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 its operation and reduce the carbon footprint.