TenizService LLP Company Overview (for Western Kazakhstan Investment Forum: expanding production and development) Aktau, 2012 TENIZSERVICE LLP TenizService LLP is subsidiary company of Kashagan Kalamkas Bautino KazMunaiGas NC JSC, established in 2003 with the aim to develop coastal infrastructure as its indicated in the State Program of oilDevelopment of Kazakhstan Sector of Caspian Sea (Decree of RoK President #109 16.05.1993) Main activities of the company are related to construction and exploitation of offshore operations support infrastructure Aktau Kuryk TenizService established number of infrastructure facilities in Bautino. Results of TS activity were highly rated by the President of the State during his visit in 2008. TENIZSERVICE’s ACTIVITIES Currently TenizService LLP (TS) is stable growing company with well established and proven reputation. Since its establishment in 2003, TS, based by the recognized international quality and safety standards, has successfully implemented a number of onshore infrastructure development projects, including, such projects as: Construction of Offshore Operations Support Base, Rock Loading Jetty, Marine Fueling Station, Fabrication Site, Waste Management Facility for Industrial and Drilling Wastes, Power Line, Hotel in Bautino, Establishment of “Kaz M-I”, a first high-technology joint venture, with MI SWACO, a leading drilling mud company, etc. HSE Report - 67 636 hours no accidents in 2011. TenizService is an owner of 627 hectares of costal land line in Bautino for existing facility, and 725 hectares of coastal land line in Kuryk for future development. NATIONAL WELFARE FUND SAMRUK-KAZYNA COMPANIES GROUP NATIONAL WELFARE FUND SAMRUK-KAZYNA National railway company Kazakhstan temir zholy National Atomic Company Kazatomprom KEGOC Kazakhstan Electricity Grid Operating Company National company KazMunaiGas Kazakhtelecom Other companies KazPost Above 500 affiliated companies Oil and gas upstream Refining, petrochemistry and marketing Services projects Oil transportation Gas transportation and marketing TenizService LLP Share of National Welfare Fund "Samruk Kazyna“ GDP is 56% out of total KZ GDP. The share of NC "KMG“ GDP is 11% out of total KZ GDP. ADVANTAGES OF TS AS PART OF KMG PSA (State body) single source* NCPOC KPO TCO Authorities of PSA: Approval of Shortlists; Approval of ITT; Approval of bid results. All Contracts above $20 mln. should be approved by PSA, otherwise costs are not subject to reimbursement. * Single source is an option of “bid free” procurement inside of KMG group companies in accordance to procurement rules of KMG. KMG group company (over 25% of KMG shares) NO BID KMG group company (over 50% of KMG shares) KEY FACTORS: TenizService is a key company in Service Division of KMG; TenizService’s activity is strongly supported by KMG, PSA and relevant State Authorities; TenizService has already implemented a number of projects and nowadays successfully operates a different coastal infrastructure. THE ROLE OF LOCAL CONTENT IN THE DEVELOPMENT OF SERVICE BUSINESS IN THE OIL AND GAS INDUSTRY Obtaining contract under the auspices of the local content Contract Path1: On the auspices of the The possibility of local content exposure by purchasing REGULATORY LEGAL BASIS (Rules of procurement of SamrukKazyna, KMG, Development Programme Local Content) services and works from a single source The possibility of obtaining long-term contract in the KMG group of companies for a period of 3-5 years. Form of appropriation Conditional price drop for Kazakhstan provider of 0.1% for every 1% of local content in group of KMG companies, max 20% Inclusion of projects in the State. FIID program, receiving government support and funding from fund DAMU on conditional discount Conditional discount ГОСУДАРСТВЕННАЯ ПРОГРАММА ПО ФОРСИРОВАННОМУ ИНДУСТРИАЛЬНОИННОВАЦИОННОМУ РАЗВИТИЮ РЕСПУБЛИКИ КАЗАХСТАН НА 2010-2014 ГОДЫ УТВЕРЖДЕНА Указом Президента Республики Казахстан от 19 марта 2010 года № 958 ГОСУДАРСТВЕННАЯ ПРОГРАММА по форсированному индустриально-инновационному развитию Республики Казахстан на 2010-2014 годы Астана, 2010 год Содержание Паспорт программы. Введение. Анализ текущей ситуации. Цель, приоритеты, задачи и принципы программы. Основные направления реализации Программы. 1. Развитие приоритетных секторов экономики, обеспечивающих ее диверсификацию и рост конкурентоспособности. 1.1 Диверсификация производства в «традиционных индустриях». Нефтегазовый сектор. Нефтехимия. Горнометаллургическая отрасль. Химическая промышленность. Атомная промышленность. 1.2 Развитие отраслей на базе внутреннего спроса. Машиностроение. Фармацевтическая промышленность. Строительная индустрия и производство строительных материалов. 1.3 Поддержка отраслей, имеющих экспортный потенциал. Агропромышленный комплекс. Легкая промышленность. Туристская отрасль. 1.4 Развитие секторов «экономики будущего». Информационные и коммуникационные технологии. Биотехнологии. Космическая деятельность. Альтернативная энергетика. Атомная энергетика. 2. Ключевые меры поддержки развития приоритетных секторов. 2.1 Обеспечение энергетической инфраструктурой. 2.2 Обеспечение транспортной инфраструктурой. 2.3 Обеспечение инфокоммуникациями. 2.4 Развитие минерально-сырьевого комплекса. 2.5 Обеспечение квалифицированными кадровыми ресурсами. 2.6 Снижение административных барьеров. 2.7 Развитие конкуренции. 2.8 Техническое регулирование и создание инфраструктуры качества. 2.9 Энергосбережение. 2.10 Развитие инноваций и содействие технологической модернизации. 2.11 Тарифная политика. 2.12 Привлечение инвестиций и развитие специальных экономических зон. 2.13 Торговая политика. 2.14 Инструменты финансовой поддержки Программы. 3. Формирование центров экономического роста на основе рациональной территориальной организации экономического потенциала. 3.1 Территориальная организация производственного потенциала в разрезе приоритетных секторов экономики. 3.2 Формирование центров экономического роста. 4. Обеспечение эффективного взаимодействия государства и бизнеса в развитии приоритетных секторов экономики. 4.1 Схема и инструменты реализации Программы на республиканском уровне. 4.1.1 Роль системообразующих крупных частных компаний и субъектов квазигосударственного сектора в реализации Программы. 4.1.2 Механизмы реализации Программы на республиканском уровне. Obtaining contracts based on market conditions Contract There is no possibility of obtaining a contract from a single source Path2: Overall market conditions Form of appropriation If company wins the tender, the implementation of the contract maximum 1 year The absence of any benefits when participating in tenders Conditional discount Lack of incentives and government support, when attracting financing BUSINESS AREAS INTERESTING FOR TENIZSERVICE Offshore Coastal infrastructure Onshore TenizSer vice Subsea SUBSEA: Well heads Preventers Drilling Pipelines JACK-UP DRILLING RIG: Assembly Operation MARINE CONSTRUCTION: Dredging Artificial islands COASTAL INFRUSTRUCTURE: Ship repair/building Fabrication yard Waste management OCTG and drilling pipelines Base management TS`s areas of interests for JV creation Activities covered by Joint Venture REFINERY PLANTS: Design Construction Maintenance KAZ M-I Mud plant Drilling, completion & drillIn fluids Solids Control equipment Full range of waste management technologies Well productivity tools (downhole cleaning tools) Production chemicals OTHER: Training Consulting DRILLING: Stimulation of production Well heading Preventers Drilling Well repair Bits “KAZ M-I” JOINT VENTURE On 19 November 2008 TenizService established a Joint Venture with M-I Drilling Fluids International B.V. (MI SWACO) – «Kaz M-I» LLP. JV Purpose - Provision of pioneering technologies in: Drilling, Completion & Drill-In fluids Solids Control equipment Full range of Waste Management technologies Well Productivity tools (Downhole Cleaning tools) Production chemicals Liquid Mud Plant In October 2009 MI SWACO began construction of the Liquid Mud Plant on the territory of TenizService Support Base. Productive capacity of drilling mud production - 84 000 tons/year . End of construction – 1 quarter of 2012. Project cost – $ 15 mln. AUTOMATED TANK CLEANING TS provides the following services: Automated Tank cleaning using remote control equipment and tank sweeps Use of specialized sludge guns with hot or cold tap capacity Separation, transportation and utilization of sludge Oil recovery of needed. Advantages of automated Tank Cleaning system: Safety (ATEX) Efficiency Cost effective Less time Current situation: TS is cleaning KazTransOil’s 20 000m3 reservoir in Aktau, the following step is signing long-term contract. Negotiations are held with KPO, TCO, MMG, etc. TS will create JV with partner. TS participating in KPO tender OFFSHORE WASTE MANAGEMENT EQUIPMENT TS is the one of few companies in Kazakhstan, which provides equipment for offshore waste management (offhore skips, drilling cutting boxes - DCB, offshore cargo baskets , minicontainers, iso tanks, etc). TenzService DCB Specification Other DCB 3.55 Volume (m3) 3.1 8400 Max. Payload (kg) 6000 1600 Tare (kg) 1500 10000 Gross Weight (kg) 7500 2280 Length (mm) 2400 1950 Width (mm) 1700 1250 Height (mm) 1370 Volume of TS DCB - 13% more than Other DCB, Therefore 13% less lifting operations and logistics Current situation: TS has contract with Zhambyl Petroleum TS has mobilized equipment from Baku and UK to Bautino. TS has intention to provide equipment for all offshore operators,. PROVISION OF DRILL BITS, CENTRALIZERS Tercel TERCEL TenizService Joint Venture Project Managing Technology, Training, Know-how Investment TENIZSERICE Personnel and local content Oil and gas companies Administration and cooperation with state bodies Workshop in Special Economic Zone Aktau Sea port for assembling of products: Tax references – 0 %, Custom references – 0%, Current situation: TS provided 2 Roller Cone bits to AktauNefteService for testing in Zhetybau oilfield. Technical Results of testing are very successful. TS and Tercel are making marketing research. TS and Tercel are preparing documents to approve creation of JV in KMG. WASTE MANAGEMENT SERVICES One of the main perspective projects to be realized by TenizService is waste management services for all type of waste coming form oilfields. Reasons TS advantages no any complete waste recycling, treatment units in Mangystau region increasing of offshore oil operations current wrong WM in region waste management law strengthening TS existing Polygon - 40 hectares Additional 40 ha reserved for Polygon extension TS Base –Polygon road do not cross village, settlements Experience in waste management Direct knowledge of situation on waste management in Mangystau TS has Designed Project for WM units segregation transportation management incineration recycling treatment FABRICATION YARD PARTNER At this moment TS is holding negotiations with potential partners - Technip, Hyundai Heavy Industries, Heerema, etc TECHNIP - 51% (Fabrication site) Joint Venture Project Managing Technology, training, know-how TENIZSERICE Personnel and local content Oil and gas companies Developed Infrastructure in Bautino Administration and cooperation with state bodies Fabrication Site is a reclaimed land plot on the Eastern coast of Tupkaragan Bay. Total area: 20 hectares; Quay wall length: 667 m; Fabrication Site Preliminary dates of yard construction are 20132014. Initially yard capacity will be 6000 tons/year, with a subsequent increase up to 10 000 tons/year. NORTH CASPIAN ENVIRONMENTAL OIL SPILL RESPONSE BASE Project: North Caspian Environmental Oil Spill Response Base Purpose of the project: Provision of services for emergency oil spill response within the Northern part of the Kazakhstani Sector of the Caspian sea. Location: Atyrau Oblast, Primorsky Channel, south of Damba Village. Implementation period: 2009 – 2012. Project value: ~85 mln. USD (final value is to be defined on the basis of the design and estimation documentation). Finance source: KazMunaiGas and/or loans. o г.Атырау Main facilities: Berth and mooring pond; Buildings for OSR equipment storage; Buildings and structures for Air-Cushion Ships Maintenance (ACSM); Building of the Fauna Rehabilitation Center; Building of the Ecological and Meteorological Monitoring Center; Auxiliary Buildings and Structures; Flight deck. OIL SPILL RESPONSE SERVICES TS is implementing project North Caspian Environmental Oil Spill Response Base in Atyrau region. All construction-and-assembling operations are being make with advanced pace and project will be done in time. TS – one of few offshore base management companies TS has experience in provision of OSR services in partnership with MEKE Kazakhstan • Own several offshore infrastructure objects • Experience in base management • Own high-trained local personnel • High international standards • OSR tier-1,2 • OSR modeling • Oil spill sensitive mapping • IMO standard trained local personnel • Previous contracts: N Operating Company, TenizBurgylau. • 3 oil spills were responded during N project drilling • OSR exercises were held with NOC and state authorities TS – company with high abilities to provide full cycle of OSR services. KURYK: PERSPECTIVE FACILITIES OVERVIEW In the future, when the main hubs of coastal infrastructure such as Atyrau, Bautino, and Aktau will reach their capacity, TenizService intends to develop subsequent projects aimed to increase coastal infrastructure in the Kuryk area. Existing facilities: 1. ERSAI Fabrication yard. Facilities depending on commencement of Kashagan Phase II. 2. Pipe coating plant. 3. Oil loading terminal. 4. Ship building yard. 5. Fabrication yard. Facilities depending on commencement of oil production in the South Caspian 6. Dredging base. 7. Living camp. 8. Vaporizer pond 9. Environmental monitoring center 10. Water-desalinating plant. 11. Fleet supporting base. 12. Offshore operations support base. 13. Industrial logistics base. 14. Waste management facility 15. Helipad. 16. Compressor station. 17. Oil and gas preparation station 18. Emergency response base. 19. Liquefied gas station. Thank you for your attention!