New Opportunities for Producers and Service Companies in Major Oil-Gas Projects in Kazakhstan

1. OIL – GAS SERVICES ASSOCIATION New Opportunities for Producers and Service Companies in Major Oil-Gas Projects in Kazakhstan October 5, 2012

2. Outline • Major projects of Kazakhstan • Offshore projects • KMG Group • Junior oil companies • New pipelines • Mining and industrial projects • About the Union VISION MISSION VALUES

3. Service industry Kazakh services market can be divided • By technological complexity: • High technological works – top international companies; • Middle-technological works – JVs, foreign and top local companies; • Low-technological works – mostly local companies. • By Clients • Majors; • Junior oil companies; • State and affiliated industries: • Downstream and Industrial projects

4. Majors More than 50% of all procurement: Current and ongoing projects: TCO, KPO, НСОС. Shut-down projects: TCO, KPO, НСОС. Expansion projects: TCO – FGP НСОС – Kashagan, FFDP КPО – Third phase

5. Offshore projects Large development stage in next decade: • Kazakh side of Caspian Sea is under large exploration • works. • In next 5-8 years it is expected following projects • development stage: • 7 projects: • Kurmangazu • Tyub-Karagan • Zhemchuzhina (Pearl) • Zhambai • Block N • Zhambyl • Satpaev • «We calculated that in order to get 250 millions tones of oil at Satpaev, 9 billiion should be spent (drilling and capital expences included), - Kairgeldi Kabyldin, ex-CEO of KMG. (www.kmg.kz)

6. State companies KMG Group • Kazmunaigaz Group of Companies is one of the largest consumers of services works and • machinery products. Some companies to mention: • KMG EP • Mangystaumunaigaz • Kazakhoil-Aktobe • PetroKazakhstan • Kazgermunau • etc • More detailed information: www.kmg.kz

7. Projects of KMG Special Company (Directorate of new enterprise) New projects which will start in next 2-5 years Gas-Turbine Electricity Station in West-Kazakhstan region New Gas Plant It is expected that this new plant will work for KPO gas, with capacity of 5 billion cubic meters of gas per year. The plant will be built near to Karachaganak gas field in West Kazakhstan region. Ship building and ship repairing plant in Kuryk Village in Mangystau region Pavlodar Refinery project Works for gas utilization projects in Kazakhstan Geo-exploration of several blocks

8. Refineries modernization (Source: KMG) 8

9. Junior oil companies Independent oil-gas companies – still large market • CNPC-Aktobemunaigas, • Zhaikmunai • Buzachi • Karakuduk • Sagiz Petroleum Company • Kommunai • SautsOil • Arman JV • Tasbulat • Max Petroleum • SamekInternation • OMV Group • Maersk • Etc • More detailed information about the procurement in these companies:www.camng.kz

10. Gas pipelines construction Export and domestic pipelines: Asian gas pipeline, the 3 line, engineering works completed, maybe the construction will start in 2012 Beineu-Bozoi Construction of 1 phase (Bozoi-Shymkent line) with capacity of 6 billion cubic meters of gas per year Construction of 2 phase (Beineu-Bozoiline) with capacity increase up to 10 billion cubic meters of gas per year Expected budget: around 2,5 billions USD North and Central Kazakhstan gasification projects CPC capacity increase project Project of Pri-Caspian gas pipeline (?)

11. Other projects Industrial and mining projects – good perspective Kazakhstan petrochemical project in Atyrau region with budget of more than 6,3 billions USD Energy Sector Power plant station reconstruction Construction of new power plants in Balhash, Astana, Karagandy, etc Mining sector Kazakhmys: Bozshakol, Aktogai ENRC projects Junior mining companies projects

12. Opportunities Some areas in service market • Construction (ЕРС) • Offshore fire systems • Oil spill systems • Offshore drilling • Offshore piping • Offshore welding • Fabrication • Dredging works • Ship repaor • Engineering (second-tier) • Marine transportation • SCADA systems • Waste management • Niche Works – E&I, Heavy lifting, different types of inspection and repair of equipment, equipment rental.

13. About Union Union of Service Companies of Kazakhstan Our vision • Consolidation of all service companies in oil-gas industry in one Association VISION Goals • Assistance to the Association members in tendersprocess; • Participation in decision-making process; • Organization the different type of activities; • Assistance in local content increase via JV, consortium creation; • Competence Centre for oil-gas service industry – one stop shop. VISION MISSION VALUES MISSION VALUES

14. Conferences Kazneftegazservice–2013 Conference • For discussion of service industry issues and large projects on 14-15 February 2013 the Union is organizing the second Conference Kazneftegazservice- 2013 in Astana. • It is expected participation of many service companies and producers in this event. • At the same time, in same building, the Ministry of Oil and Gas is holding the Forum of oil-gas companies: Local Content – 2013, where it is expected the participation of all oil-gas companies of Kazakhstan with their procurement plan for short and medium term. • More information:www.kazneftegazservice.com

15. Our contacts Thanks for your attention! Union of Service Companies of Kazakhstan Address: Astana Syganak street, 29 Office 1113 Tel: +7 7172 51 69 68 Fax: +7 7172 51 69 68 Web:www.kazservice.kz Email: info@kazservice.kz