Atyrau Oil & Gas
How TCO is Shaping a Local Industrial Ecosystem
TCO Deputy General Director Kuanyshkerey MukhtarovBy the end of 2025, the share of Kazakhstani content in the procurement of goods, works, and services by Tengizchevroil, LLP (TCO) reached 71%. Of this, the operator directed more than $1 bln to services alone, with the majority paid to Kazakhstani oilfield service companies. In other words, most TCO services are provided by Kazakhstani organizations. The goods segment also showed a clear shift: the share of locally produced goods rose to 15%, versus about 7% a year earlier.
For Kazakhstan’s largest oil and gas operator, working at one of the world’s most challenging fields, Tengiz, these figures reflect not only compliance with regulatory requirements but a long-term strategy to build a resilient local industrial base.
Evolution of localization: from dependence to partnership
When the Tengiz project began developing in the early 1990s, localization was constrained by objective factors. Developing an ultra-deep, high-sulphur field required world-class technologies and engineering expertise that were largely absent in Kazakhstan at that time.
Over more than three decades, the situation has changed fundamentally. Today, Kazakhstan has its own cadre of specialists and a developed network of oilfield service companies capable of executing complex engineering and industrial tasks.
This shift is also reflected in the operator's workforce profile. The nationalization rate of TCO personnel has reached 96%, up from about 50% in the early 1990s. Among mid-level and senior managers, 89% are citizens of Kazakhstan.
According to TCO Deputy General Director Kuanyshkerey Mukhtarov, the strengthening of human capital has been accompanied by a qualitative uplift of local companies. “Over the years, the capabilities of Kazakhstani contractors have grown significantly. Many of our partners are working successfully not only in the domestic market, but are also entering international projects,” he notes.
Growth in Local Manufacturing
The most visible shifts are occurring in industrial localization. Kazakhstani enterprises are steadily mastering the production of equipment and complex technological solutions that were previously fully imported. One illustrative example is the manufacture of the largest modular substations in Kazakhstan, produced by the Kazakhstani companies PSI Energy and Qarassay Mashina Ondiru Zauyty (QMOZ).
The two-story modules, approximately 38 meters long and weighing up to 92 tons, were fully manufactured, assembled, and tested in Kazakhstan. The project was delivered with a total work volume of more than 800,000 person-hours with zero lost-time incidents. The substations have now been assembled and installed at Tengiz.
Projects of this kind demonstrate a gradual shift from procuring basic service work toward more complex engineering and manufacturing cooperation.
Systematic Work With Suppliers
Achieving strong localization performance has been the result of the operator's targeted policy. TCO has a comprehensive system to support and develop local suppliers. A core tool is the Supplier Development Program, designed to enhance the capabilities of Kazakhstani manufacturers and add them to the company's approved vendor list. This makes procurement more transparent and predictable and expands local participation across the supply chain.
An additional strategic tool is the five-year “Kazakhstani Content Development Program for 2025–2029.” It provides for integrating localization-related key performance indicators into the corporate KPI system across multiple company functions.
Practical mechanisms to support local companies include tailored tendering approaches. In particular, when at least three Kazakhstani suppliers participate, greater flexibility is allowed in comparing price bids, enabling the prioritization of competitive local companies.
For high-value equipment and products, the operator actively uses long-term contracts, ensuring stable demand and encouraging the development of local industrial manufacturing.
Support for Small Business
TCO’s localization policy is not limited to cooperation with major contractors. The company also runs small-business support programs in its areas of operation. One effective tool is the “Tandau” interest-free microfinance program implemented in the Zhylyoi District of the Atyrau Region, where the Tengiz field is located. The program is aimed at supporting first-time entrepreneurs and members of socially vulnerable groups.
In 2024 alone, more than 300 applications were submitted under the initiative, and 44 projects were approved and received funding from TCO.
New Requirements for the Oilfield Services Sector
Despite the company's progress, further development of Kazakhstan's oilfield services market requires continuous improvement in standards. In TCO management's view, the key priorities for local companies remain quality, safety, and compliance with international standards. Working at complex facilities such as the Tengiz field requires mature HSE systems, strict operational discipline, and robust quality management systems.
Another development priority remains strengthening engineering capabilities and expanding the range of products subject to localization. “Companies that invest in upgrading production capacity, training personnel, and mastering new types of work gain the opportunity to participate in more complex and capital-intensive projects. Particular attention should be given to readiness for long-term partnership and open dialogue,” says Kuanyshkerey Mukhtarov, Deputy General Director of TCO. “Companies that proactively study the operator’s requirements, complete qualification procedures, and are prepared to incorporate feedback have more opportunities for sustainable engagement.”
In the near term, digitalization, the adoption of artificial intelligence technologies, and the development of human capital will also play an important role in the oilfield services sector.
Strategic Partnership
At TCO, Kazakhstani oilfield services companies are viewed not only as contractors, but also as long-term strategic partners. Building a resilient ecosystem of local suppliers makes it possible to improve project efficiency while generating a multiplier effect for the country’s economy.
The track record of developing Kazakhstani content at Tengiz shows that a consistent localization policy can transform the sector’s structure, shifting it from reliance on imported services and technologies to the development of a domestic industrial base.
Against the backdrop of major projects in recent years, including the expansion of production capacity at Tengiz, further development of the local oilfield services sector remains one of the key factors for the sustainable growth of Kazakhstan’s oil and gas industry as a whole. “At TCO, we are convinced that a strong oilfield services sector is an integral part of a competitive Kazakhstani economy. That is why it is particularly important to continue developing a culture of partnership, open dialogue, and mutual trust between operators and domestic companies, as well as to strengthen the focus on international standards and global best practices,” emphasizes Kuanyshkerey Mukhtarov, Deputy General Director of TCO.