The following Parties:
Karachaganak Petroleum Operating B.V. (“KPO”)
JSC NC “KazMunayGas” (“KMG”)
North Caspian Operating Company BV (“NCOC”)
Tengizchevroil LLP (“TCO”)
following a meeting (the “ London Process”) of Operators and IOCs in London in June 2012 and subsequent consultation, by means of this non-binding Expression of Support, endorse the following principles:
1) The KLCD Blue Print is intended to develop a mechanism to improve the coordination and consistency of individual Local Content development programmes of Operators, investors and agencies; to allow for the exchange of non-sensitive and non confidential data and development of new initiatives with achievable sustainable outcomes and timescales. Individual local content development programmes will continue functioning with recognition of the right of individual Operators and investors to develop their own strategies and programmes towards Local Content development.
2) An Industry Task Force will be formed, comprising industry stakeholders, to deliver the Blue Print and implement the KLCD. The functions of the Task Force will be to identify synergies, advance the outcomes of current local content programmes and define new tasks to contribute to the growth of sustainable local supply chain capacity.
3) The Industry Task Force is envisaged to coordinate with the Republic of Kazakhstan (“RoK”) Ministries: Oil and Gas, Industry and New Technologies, Economic Development, Labour, and regulatory authorities, in addition to industry bodies (KazEnergy, KFICA) to ensure the alignment of the KLCD Blue Print with their objectives and to avoid duplication of efforts.
4) The Industry Task Force will prepare Terms of Reference for the implementation of the KLCD Blue Print. Examples of relevant industry best practices will be used to provide guidance.
5) Terms of Reference would include:
- 1) the ownership and mechanism for delivery of the KLCD Blue Print including roles and responsibilities;
- 2) participation of investors and other relevant bodies;
- 3) a detailed implementation plan and schedule;
- 4) review of local content themes within the KLCD Blue Print consultation document to establish priorities and scope specific initiatives for short term action;
- 5) a dedicated resourcing plan;
- 6) the provision for further in depth research and work programmes.
6) Priority front end activity topics intended to be addressed by the Industry Task Force together with other relevant associations will be:
- 1) Preparation of a comprehensive project demand and supply to be agreed by Operators to ensure that all initiatives within the Blue Print are based on a thorough understanding of local content sustainability.
- 2) Clarify the constraints of local content development initiatives as a result of Operators working within different contractual frameworks (PSA, JV).
- 3) Provide consensus on the extent to which harmonization of prequalification and tendering processes can be accommodated, acknowledging that Operators work with different corporate practices.
- 4) A review of all established and emerging local content development programmes to allow synergies and opportunities for cooperation and support.
7) A neutral entity will become the coordinating secretariat to the Task Force, to be defined and agreed by the Task Force.
8) The KLCD Blue Print and Terms of Reference, and all actions incorporated in these documents, shall not contravene the Operators’ respective subsoil use contracts, company management systems and procedures, and any anti trust/ anti-monopoly or similar legislation and/or any other legislation applicable to any one or more of the parties.
Signed
North Caspian Operating Company B.V
JSC NC "KazMunayGas"
Tengizchevroil LLP
Karachaganak Petroleum Operating B V.