ИНВЕСТИЦИОННЫЙ ФОРУМ

1. LOCAL CONTENT IN THE NORTH CASPIAN PROJECT ИНВЕСТИЦИОННЫЙ ФОРУМ СОЗДАНИЕ НОВЫХ ПРОИЗВОДСТВ В ЗАПАДНОМ КАЗАХСТАНЕ Актау 24-26 сентября 2012 Жакып МАРАБАЕВ Заместитель Управляющего директора Zhakyp MARABAYEV Deputy Managing Director CREATION OF THE NEW PRODUCTION FACILITIES IN THE WESTERN KAZAKHSTAN 24-26 September 2012, Aktau

2. NCSPSA Contract Area OPF«BOLASHAK» WESTERN ESKENE ATYRAU KASHAGAN KAYRAN AKTOTY SOUTH-EASTERN KASHAGAN KALAMKAS - SEA

3. New Operating Model North Caspian Operating Company B.V. is an Operator under the North Caspian Sea Production Sharing Agreement since 22 January 2009.

4. Nationalization • In Q2 2012 Consortium employed 22000 people in Kazakhstan inclusive of subcontractors. • Around 80% (79,4 %) of them are RoK citizens which is an outstanding ratio for this type of Project.

5. Local Content in Procurement of Goods, Works and Services Share of Local Content from Total Expenditures Breakdown of GWS procurement in 2011 More than 8 billion USD has been paid for local goods, works and services for the period 2006 – 2 quarter 2012. *Reduction in Local Content level since 2010 relates to the changes in the Kazakhstan Content Methodology calculation in accordance with the current legislation Goods Services • Payments for local GWS in 2011 were USD1,085bln (more than KZT160 bln)or27% from total payments. • Share of procured Goods is showed including in Works. Last saved: 17 September 2012 19:04, Author Department: Contracting & Procurement (KZ)

6. Long Term Local Content Development Program • Phase 2 • Compression Centre (СС01) • Kalamkas Sea • requirements Market Capability Overview NCOC B.V. developed and implements Long Term LC Development Program 2011-2015 Operations and Maintenance Requirements Phase 1 Historical data analysis Local Manufacturers of Spare Parts and Consumables Review of Kazakhstan Market Capabilities at Pre-Project Stage Craft Skills Training • SDK • NCPOC • EMKI • AKCO Last saved: 17 September 2012 19:04, Author Department: Contracting & Procurement (KZ)

7. Gap analysis and qualification audits Market research Vendor Development Program Potential Project suppliers’ selection Prequalification and inclusion in Vendor database Tender North Caspian Sea Project demand • Development and further involvement of local vendors at NCSPSA Result Contract award and Craft skills trainings JV Facilitation ASME, API, ISO certification 7

8. Transport Civil Works Electrical Works OEM and Spare Parts Long Term Service Maintenance Waste Management Structures and Tanks Local Content Achievements in the North Caspian Project • During implementation of the long term local content development program the Venture initiated training and successfully certified 56local companies under such international standards as ISO 9001, ISO 14001, ISO 22000 andOHSAS 18001. • Consortium is the only among Major Oil and Gas Operators in Kazakhstan that funded and coordinated implementation and certification of the well known Kazakhstan manufacturers to the recognized international standards of American Petroleum Institute (API): • Ust-Kamenogorsk Valve Plant • and to American Society of Mechanical Engineers (ASME) standard: • Zapadno-Kazakhstanskaya Mashinostroitelnaya Kompaniya JSC • Petropavlovsk Plant of Heavy Machine Building • Montazhengineering Company • In2011 109 local companies have successfully passed qualification audits according to the Consortium requirements under 7 commodity areas. Consequently these companies are included in the Vendor Development Program. • Operator trained more than 500 employees from 34 local companies to the most demanded craft skills like pipe layers, instrumentations electricians, operators of plant installations, divers and others. These companies are potential vendors to the NCSPSA. • As a result of the purposeful activities towards Joint Ventures facilitation and their involvement to the Project, around 70JVs provide their services to the Venture as of 2005 • in the course of activities at the present 2600Kazakhstan companies have been registered • in the Vendor Database of the Venture.

9. Local Company’s Success Stories on Kashagan • Since 2005started working on Kashagan with the first accommodation barge. Total fleet under management has expanded to 39 vessels. • In 2008 Operator sponsored training and certification under standard ISO 9001:2000 • As of 2012 ratio of Kazakh citizens in the crew members reached 70%. • In 2006 the Company started its activities in the North Caspian Project, providing services in D Island for personnel. • By 2011 the number of Company’s personnel reached 230, which is ten-times higher the initial indicator. • In March 2011 Ships Catering Supply received an international quality certificate of Moody International ISO 22000 for safety of food products. • Currently, the Company services six facilities as part of the North Caspian Project and continues to develop. If you are interested in cooperation with the Consortium, please visit our Web-site: www.ncoc.kz

10. Local Content on the North Caspian Project • Development of Kazakhstan Industrial Sector • In February 2011 NCOC has entered into the Working Group together with Union of Machine Builders of Kazakhstan (UMBK) and KMG, in frames of which Operator: • developed a list of O&G equipment and spare parts for perspective demand at North Caspian project which consists of more than 30,000 and submitted for further analysis to UMBK for examination and identification of the list of equipment which has a potential to be produced in Kazakhstan • determined priority commodity groups of international and local manufacturers. • held marketing survey on machine building industry of Kazakhstan, where identified constraints and recommendations on development of Kazakhstan enterprises. 200 manufacturing companies have been reviewed. • on May, 2011 NCOC in cooperation with TCO, KPO and JSC NC KazMunayGasorganized Forum “Original Equipment Manufacturing and Spare Parts”. Forum has been held under the auspices of KazEnergy Association. The main objective of the forum was to support further development of local market on production of goods and services demanded by oil and gas industry and joint venture facilitation. 40 local and 54 foreign companies participated on this event.

11. Government and concerned Government bodies for development of LC Perspective Projects and potential for LC Operator Compression Centre (СС01) PHASE2 KALAMKASSEA • Local Content at the early stage • Detailed analysis and market potential study: • Fabrication yards • Shipyards • Steel structures construction • Modules transportation and installation • Rock supply • Hook-up and commissioning • Phase 1 historical data analysis LC identification at early stages of contract strategy development

12. Upgraded local content strategy for the development project END OF PROJECT CONCEPT DEFINITION SANCTION PROJECT EXECUTION CONCEPT SELECTION Develop a Local content plan • Shall be based on : • Concept selected • Market survey • Contracts awarded after competitive tenders • Promotion of new potential bidder, if needed through new JV with International companies RoK contractors with enhanced equipment, facilities, skilled personnel, experience Endorsed plan used as a basis for tendering Local content : one of the criterion used for the selection of concept LC Plan endorsed • Shall include:: • Scope tendered in RoK with list of certified bidders • Scope tendered on open market • Sustainable element to be included in the scope of the tender Experience build up through the execution of the contract New equipment and skills acquisition New tender with increased local content NCOC intention is to use KalamkasSea as a pilot project to further develop this strategy. This strategy is still being developed and has not yet been finalized. It is presented as an illustration of the room for improvement.

13. Preliminary evaluation of manpower needs • NCSPSA future projects (k Man-hr) Man hours on installation and Hook up Occupancy of existing yard capacity These figures are preliminary are based on the timely approval of the projects by the Consortium and RoK Authorities allowing FEED start as follows: CC01 2013; Kalamkas Sea 2014; Phase II 2016, 2017. These figures are preliminary estimates. The Venture has not yet taken a final investment decision on these projects and these projects are subject to the necessary approvals by the RoK authorities. The figures will furthermore be affected by the timing of such decision and approvals.

14. Thank You for Attention