How to get prepared for oil services export

A number of domestic oil service companies intend to expand scale of their activities. As is well known, exporting to the international market place is very difficult.  There is more complexity, higher costs, and increased competition.   

However, in the near future, sharp growth dynamics are predicted for companies focused on exporting their goods and services. It will be facilitated by gradual growth of the world economy, stabilization of prices on commodity markets and state support for exporters. Can Kazakh oil service companies enter to the international market and what experience is needed for that?  

“Energy System Services” is one of companies, in addition to strengthening its position in Kazakhstani market, is ready to enter to the international level and provide services that meet requirements of industrial giants. The company has been operating since 2003 and is engaged in supply and maintenance of electrical equipment.

“Some 18 years ago, it all started with the maintenance of diesel equipment, in particular, diesel generators. Today, decade later, we are still maintaining this type of machines, but now we are also engaged in the construction of substations and other accompanying works on the construction of high-voltage lines. Thanks to positive reviews, as well as successful projects combined with excellent results in equipment maintenance, we were nominated for participation in major repairs of gas turbine equipment. At the moment we have sufficient experience working with foreign companies,” states Aibol Ramazanov, Deputy Director for Administrative Affairs of Energy System Services LLP.

Our patners are General Electric, Brush, TE Connectivity, HILTI and other global energy brands. Such cooperation requires constant growth, so employees are regularly trained, and the company itself is working on expanding the list of services provided and increasing the volume of orders. Mr. Ramazanov noted that cooperation with TCO has become a significant stage in the company’s work.

He noted that TCO applies international standards for the quality of construction and inspection.

“According to our experience, TCO is an excellent partner that can provide international standard work experience. Service provider must always comply with the highest ISO quality standards, as well as observe unprecedented discipline in safety issues,” Aibol Ramazanov emphasizes.

Currently, “Energy System Services” is aimed at strengthening its position in maintenance and construction at Tengiz and in Karaganda, where the company is located. But thanks to our experience, sooner, we hope to enter markets of other countries.

“Our first goal is to provide services at domestic level, and later on in the international stage. Our main advantage in achieving this goal is a team. We have a strong team that also wants to develop from project to project and grow professionally and personally. And these are real masters of their craft, who took part in dozens of major repairs, as well as built several substations and installed thousands of high-voltage poles,” says Aibol.

Aibol believes that participation in TCO projects is a good experience for those who intend to expand their borders. Alisher Valikhanov - CEO of “Tesla-Tan” agrees with his opinion. A separate division is already being created in the structure of this company, which will be responsible for promoting it to international markets. “Tesla-Tan” has also been a post-employee of TCO for several years and has all the necessary certificates and licenses.

TCO’s main operation is production and sale of crude oil, gas and sulfur. It is stated that by the end of 2020, TCO became the largest customer of oil services in Kazakhstan in “Review of oil services market of Kazakhstan” by Deloitt. TCO accounts for 72% of the market volume, including over 85% in financing of construction works, project and engineering, 56% maintenance and repairs, 45% exploration and geophysics and 20% drilling operations. Next are Karachaganak Petroleum Operating (KPO) - 8%, North Caspian Operating Company (NCOC) - 7%, “Mangistaumunaigas” is about 3.5%. The remaining customers generally account for about 10% of the market.

It is believed in TCO that Kazakhstani companies have opportunity to compete in international markets. So, suppliers must meet generally accepted safety and quality standards, establish uninterrupted production and supply of their products, improve cost management skills and make innovative business decisions. These are features that are appreciated and assessed in all other markets. In addition, TCO with European Bank for Reconstruction and Development, have launched a supplier development program. The domestic companies could get advice from foreign experts.

During pandemic period, in an interview with “Kapital.kz” Rashid Zhaksylykov - Chairman of Union of Oilfield Service Companies of Kazakhstan mentioned that during a difficult period, TCO provided real support to service workers, who paid salaries to all employees until September 1, 2020. At the same time, he noted possibilities of exporting services. According to Mr. Zhaksylykov, Kazakhstan citizens worked in Russia, Turkmenistan, Saudi Arabia and United Arab Emirates.

In addition to services, Kazakhstani companies can establish production of complete products and export them to other countries. For this purpose, a number of measures are provided for support from the state: these are crediting of export (pre-export) transactions, insurance of transactions, reimbursement of part of the costs.