KAZENERGY ASSOCIATION - A GATEWAY TO A NEW LEVEL OF EFFICIENCY IN THE OIL-AND-GAS AND ELECTRIC POWER INDUSTRY OF KAZAKHSTAN
Ol-and-gas and electric power industry is the main strategic resource of the economic development of Kazakhstan. It plays a key role in the implementation of the Kazakhstan national development programs through 2030 as well as the nation's plans to join the world's 50 most competitive countries.
KazEnergy Association was established on 2 November 2005 as an independent voluntary non-commercial union of oil-and-gas and electric power organizations and companies successfully operating in Kazakhstan. The Association includes more than thirty five members and partners. The Association's activity is challenged to create favorable conditions for the dynamic and sustainable development of the energy sector of the Republic of Kazakhstan, and serves as an integrated "information harbor" for subsoil users, energy, transport specialists, consumers of products and services of oil-and-gas and electric power industry.
The projects and programs implemented by the Association contribute to the development of the dialogue between companies and organizations of oil-and-gas and electric power industry, state bodies and the community; create positive image of the Association and each of its members, promote economic, social, scientific and technical activity of the people of Kazakhstan.
Main Areas of the Association's Activity
Representation of interests of the members of Association in executive and legislative bodies of state power and administration; development and implementation of target programs aimed at supporting entrepreneurship in oil-and-gas and electric power industry; organization of informational and analytical, scientific and research, innovational and technical work;
work with mass media, educational and publishing activity; implementation of educational programs and participation in personnel training projects for oil-and-gas and electric power industry; development of international cooperation projects and assistance in attracting investments in oil-and-gas and electric power industry.
KazEnergy in numbers
• Enterprises of KazEnergy Association members account for over 37,5% of the combined industrial output of the Kazakhstan economy.
• Enterprises of the Association members account for 42.6% of export revenues of the country.
• Enterprises of the Association members account for 67% of the total export of crude oil and gas condensate from Kazakhstan.
• In 2007 enterprises of the Association members paid KZT 795 billion in the form of taxes and other mandatory payments, which constitutes 25% of the government budget expenses.
• Enterprises of the Association members employ about 80 thousand people, which is 11 %of all salaried employees of the industry of the Republic.
• Enterprises of the Association members account for 12% tax proceeds of local budgets.
• Trade partners and consumers of exported crude oil and gas condensate of the Association members' enterprises are countries of Europe, Asia, America and CIS.-Enterprises of the Association members export crude oil and gas condensate from Kazakhstan by pipeline, sea and railway transport.
Organizational Structure of the Association
The General Members' Meeting is the highest regulatory body of the Association. The Association Members' Meeting sets priority directions of the Association's activities, formulates principles of asset building and management, approves membership in the Association, ratifies annual work plans and financial statements of the Association, and elects the Chairman of the Association.
The Chairman of the Association represents the interests of the Association and its members in state bodies, unions of legal entities, foreign and international organizations. He forms the Association Board and the Executive Committee of the Association.
The Board of the Association is the advisory and consultative body of the Association headed by the Chairman of the Association. The Board provides recommendations regarding current and planned activities of the Association, offers proposals on issues brought up by the Chairman, and considers applications of candidates in view of their compliance with the Association's aims and objectives.
The Executive Committee reports to the General Members' Meeting and carries out current activities of the Association, performs decisions of the Board, initiates and implements the projects and programs within the scope of the Coordinating Committees.
The Executive Committee's activities are managed by the General Director, who bears responsibility to facilitate the implementation of decisions of the Members' Meeting and the Chairman, and to provide annual reports to the Association Members' Meeting on the performed activities.
Coordinating committee on local content in investment projects
Regular participants: the Ministry of Energy and Mineral Resources of the RK, the Ministry of Industry and Trade of the RK, the Kazakhstan Contract Agency, Majilis deputies of the RK Parliament, the Kazakhstan Union of Industrialists and Entrepreneurs, large companies - subsoil users, foreign service companies and Kazakhstan producers. Main areas of activity:
• Proposal for the RK Government on development of the State program to in-
crease local content in subsoil use projects.
• Problem list program on increasing local content in oil-gas projects and recommendations regarding amendments to the RK law within the framework of Interagency commission on oil-gas and energy industry development.
• Proposals for the RK Government on development and approval of the optimum procedure of issuing certificates of origin of goods produced in the Republic of Kazakhstan for subsoil use operation on the territory of the country.
• Analysis of oil-gas sector demands for goods, works and services for the mid-term period (3-5 years).
Coordinating committee on energy industry development
Regular participants: the Ministry of Environmental Protection of the RK; the Ministry of Energy and Mineral Resources of the RK, UNDP Biodiversity conservation Fund of Kazakhstan, the Kazakhstan Association of nature users for sustainable development (KAPUR), UNDP in Kazakhstan, the Union of power engineers, ULE "Union of engineering companies of the Republic of Kazakhstan", JSC "KMG - Energo", major subsoil users - members of the AssociationMain areas of activity:
• Proposal for the RK Government on creation of an ad-hoc enterprise to
perform exploration works with participation of the Association members and the Committee for Geology.
• Monitoring and participating in the activities of an Interagency Commission on Energy Industry Development (initiated by the Association).
• Organizing broad discussions of vital aspects of activity of enterprises -members of the
- issues of environmental safety and influence of enterprises on environment.
- improvement of mechanisms and methods of environmental control and management.-legal aspects of activity of the sector's enterprises.
- power supply issue, condition of electric power facilities.
- perspectives of petrochemistry, oil refining and utilization of oil gas, etc.
Coordinating committee on taxation and legislative processes
Regular participants: the Ministry of Economy and Budget Planning of the RK; the Tax and Customs Committees of the Ministry of Finance of the RK, the Taxpayers Association of the RK, the Association "Kazakh Union of Custom Declarants" members of the Association, representatives of the Foreign Investors Council, international auditing companies and others.
Main areas of activity:
• Participating in the Expert council on entrepreneurship under the Ministry
of Finance (more than 20 draft laws and 50 resolutions of the Government
were considered in 2007).
• Working out proposals and comments to the Majilis working group of the RK Parliament on a number of draft laws, including Transfer Pricing Law; Environmental, Labour and Tax codes, etc.
• Participation in analytical and working groups for working out draft laws; including Transport Code, laws "On the State control of application of transfer pricing", "On the State purchases", on making changes and amendments to some legislative acts of the RK on simplification of custom and tax procedures, to the RK laws "On concessions", "On education", "On administrative procedures" and "On competition and limitation of monopolistic activity", etc.
Coordinating committee on professional education and training
Regular participants: the Ministry of Education and Science of the RK; Center for Educational Programs of the RK MES, PE 'The United Human Resources Development Centre", specialized institutions of higher education and technical schools of the RK, members and partners of the Association, international educational organizations, etc. Main areas of activity:
• Implementation of KazEnergy Educational Program, including awarding of
premiums, scholarships and grants to students of special schools and institu
tions of higher education; teachers'professional development; modernization
of material and technical basis of educational institutions, creation of human
resources database, etc.
• Comprehensive analysis of personnel training system for energy industry and working out recommendations for improvement of legal framework of secondary, higher and postgraduate education in compliance with the international standards.
• Participation in working group for development of the project of the State program for development of technical and vocational education, and in the committees on personnel certification in regional personnel training centers.
• Planning and developmentof proceduresforstate-privateand othertypes ofsocial partnership in training and retraining of personnel fa oil-gas and energy sector.
Coordinating committee on extractive industries transparency initiative
Regular participants: the Ministry of Energy and Mineral Resources, Majilis deputies of the Parliament, the World bank branch in Kazakhstan, Kazyna Sustainable Development Fund, production companies, representatives of non-governmental organizations, auditing companies, "Energy Focus" Expert Bureau, etc. Main areas of activity:
• Signing of the Memorandum of understanding on implementation of EITI in Kazakhstan.
• A comprehensive study of experience in implementation of EITI in Kazakhstan and other countries.-Selective polling of companies - members of the Association and analysis of data obtained on commercial confidentiality terms.
• Participation in the working groups: 1) on implementation and coordination of EITI commitments of the RK Government, and 2) on analysis and study of the necessity of making changes and amendments to the current legislation of the Republic on implementation of the Transparency Initiative.
• Participation in the EITI promotion activities in Kazakhstan.
Coordinating committee on information and reputation management
Regular participants: members and partners of the Association, local and foreign mass media, ministries and government agencies, representative offices and missions of international governmental and non-governmental organizations, wide public. Main areas of activity:
• KazEnergy Magazine.
• Website www.kazenergy.com
• Participation in authoritative regional and international organizations.
• Organizing social polls among members and partners of the Association and analysis of data on social and environmental performance.
• Organizing seminars and roundtables to elicit and popularize the best practices of implementation of social-infrastructure, educational, environmental, resource-saving and other projects, technologies and methods.
• Regular meetings with mass media aimed at covering specific aspects of energy industry development, information network expansion, clarification of aims and objectives of the Association and proliferation of successful practices of the Association members.
• A separate media-section within the framework of KazEnergy Eurasian Energy Forum.
Terms and Conditions for Membership in KazEnergy Association
Membership and partnership is open for any legal entity, regional and branch union, association, public organization, fund, enterprise, other non-commercial and commercial organization, whose activities do not contradict to the aims and objects of the Association.
The admission to membership in the Association is approved by the resolution of the Association Members' Meeting upon acceptance of an official application addressed to the Chairman of the Association, and further approval by the Association Board and other administrative procedures.
Benefits of Membership in KazEnergy
The main goal of KazEnergy Association is to create favorable conditions for efficient work activity of all Association members, to facilitate a dialogue among all stakeholders culminating in the development of positive cooperation between the state and the business community, as well as the improvement of reputation of member-companies and industry sector in general. Actions of KazEnergy Association create positive synergy, when coherent collective effort produces quantitatively and qualitatively higher effects than those produced by the efforts of the same entities alone.
• Joining KazEnergy, the organizations will get great opportunities for ac
tive participation in decision-making related to protection of their interests
and creation of favorable conditions of their activity, including:
• Joint discussions, including discussions at the level of the Government and Parliament of the Republic of Kazakhstan, and implementation of initiatives and recommendations of the Association with respect to improvement of legislation regulating the activity of oil-and-gas and electric power enterprises;
• Development and implementation of measures to strengthen the scientific, technical and production potential of oil-and-gas and electric power enterprises of Kazakhstan;
• Involvement in the state initiatives and measures aimed at the improvement of investment climate in Kazakhstan, increasing the efficiency of the sector;
• Practical contribution to resolving social and environmental problems and participation in other important initiatives countrywide;
• Securing assistance on legal, economic, organizational, managerial, and other issues in the form of consultations, scientific expertise, analytical and informational support;
• Promotion in mass media of economically and socially useful activities of the Association members, including coverage in a monthly information and analytical KazEnergy magazine and on the Association website www.kazenergy.com;
• Exchanging information and participating in conferences, seminars, forums, and other events organized under the aegis of KazEnergy Association.
Members and Partners of the Association:
Access Energo LLP
Agip Karachaganak B.V.
Atyrau Oil Refinery LLP
BG International Limited (Kazakhstan)
Branch of Statoil North Caspian AS in RK
Chevron Munaigas Inc.
CNOOC Caspian (Kazakhstan) Limited
ConocoPhillips (Phillips Petroleum Kazakhstan)
Exploration Production «KazMunayGas» JSC
Group of the companies AES Silk Road Inc.
Intergas Central Asia JSC
Karachaganak Petroleum Operating B.V.
Kazakh Institute of Oil & Gas JSC
«KazMunayTeniz» Marine Oil Company JSC
KOREM JSC (partner)
Lukoil Overseas Service Ltd.
NC KazMunayGas JSC
PetroKazakhstan Kumkol Resources JSC
Public Fund «Munayshy»
Repsol Exploracion Kazakhstan S.A.
Shell Kazakhstan Development B.V.
TOTAL E&P Kazakhstan
Trade House «KazMunayGas» JSC
ULE «The Union of Engineering companies of the Republic of Kazakhstan»
ULE Zhanar-Zhagarmai Association (partner)