Kazakhstan’s oil and gas companies are gradually increasing their use of locally sourced materials and suppliers, though progress remains uneven.
A former manager at Tengizchevroil (TCO) says internal concerns — including fear of lobbying accusations and inflated pricing by domestic producers — continue to slow broader adoption.
Former TCO manager outlines concerns
A LinkedIn post by former TCO employee Timur Tashmukhambetov, first highlighted by the PACE Telegram channel, detailed the challenges.
According to his profile, Tashmukhambetov spent 10 years as a project manager at TCO.
He said major oil and gas operators in Kazakhstan often rely on foreign suppliers to meet strict internal standards. While companies can adopt local GOST standards, they typically default to their own established specifications.
Progress made, but structural barriers persist
Local procurement has improved in recent years. The use of domestically produced vessels, structural materials and certain technical equipment has increased, along with basic materials such as sand and gravel.
However, several obstacles continue to limit further expansion of local content.
Tashmukhambetov cited low employee motivation as a key factor. Efforts to identify and onboard local suppliers often require additional work that is not tied to bonuses or other incentives.
Risk of scrutiny discourages local engagement
He also noted that employees who proactively seek to work with local suppliers — even for patriotic reasons — may face scrutiny or suspicion of lobbying for private interests.
Furthermore, according to Tashmukhambetov, the three pillars of Kazakhstan’s oil and gas industry — TCO, Karachaganak Petroleum Operating B.V. (KPO), and North Caspian Operating Company (NCOC) — should take a more active role in supporting domestic producers.
He said these companies should act as mentors to small and medium-sized enterprises, helping develop competitive, qualified manufacturers.
Key barriers to expanding local procurement
Tashmukhambetov identified several additional factors limiting local sourcing:
- Prices from domestic producers are often inflated and, in many cases, exceed those of foreign suppliers.
- Some companies rely on assembly rather than full-scale manufacturing, with imported materials relabeled as «Made in Kazakhstan.»
- The tax regime tends to favor foreign suppliers over domestic producers.
Government pushes for higher local content
The issue has also drawn attention from policymakers. Lawmakers recently discussed increasing the share of Kazakhstani content in regulated procurement by TCO, KPO and NCOC.
According to Yerlan Akbarov, vice minister of energy, the share of local content among the country’s major field operators has yet to reach the targeted 30% threshold.
