Seven Years of Honest Co-Operation
Jiang Chi, Director General of CNPC-Aktobemunaigaz
The activities of CNPC-Aktobemunaigaz?a major Chinese-Kazakh venture?can be cited as a shining example of successful economic co-operation between the two countries. The international team at this oil company comprises over 7,000 specialists. Being an integrated company, CNPC-Aktobemunaigaz not only produces oil and gas, but also processes and sells them. By 2005 the company plans to have increased output and sales to 7m tonnes of oil and 5bn cu m of gas.
The Chinese National Petroleum Corporation is the main shareholder in CNPC-Aktobemunaigaz. Having first invested in the enterprise in 1997, so far it has placed over $1.3bn in the project. As a result, a formerly unprofitable company has been transformed into a thriving one with great prospects for further growth. In 1997-2003 CNPC-Aktobemunaigaz increased oil production from 2.5m tonnes to 4.65m tonnes, and the total tax paid to the state budget surpassed 73bn tenge.
CNPC-Aktobemunaigaz has also been successful in the capital construction field. In the three years since its investment activities began it has constructed the Zhanazhol?Aktobe gas pipeline and reconstructed the Bestamak oil loading rack. These projects have helped Kazakhstan to increase its gas output, thereby decreasing dependence on supplies of expensive Uzbek blue fuel.
In 2002, on the Kazakhstani Independence Day, CNPC-Aktobemunaigaz commissioned an oil treatment facility at the Zhanazhol gas treatment plant. The company has also built two 50,000 cu m oil tanks. This quite outstanding tank farm is still unmatched in the CIS.
In 2002 CNPC-Aktobemunaigaz completed the reconstruction of the existing gas treatment plant and began building a new one with a design capacity of 1.4bn cu m of gas and 2m tonnes of oil per year. The new plant (its cost is estimated at $170bn) boasts high-end technology and an automated management system. This will help to improve the quality and prime cost of oil and gas products and also expand the production range. Thanks to the efforts of the project’s general contractor-the China Petroleum Engineering and Construction Corporation-the plant was completed ahead of schedule in 2003, half a year before the time set. In addition, an oil sweetening unit and a new gas-lift compressor station were put into operation.
In 2004-2005 the company plans to build a third gas treatment plant to meet the requirements of the ever growing production of associated gas. Additionally, CNPC-Aktobemunaigaz plans to invest actively in other projects aimed at deep processing of gas into high-purity products.
To ensure proper use of gas resources, a 160-km pipeline will be built in 2004 from the gas treatment plant at Zhanazhol oil and gas condensate field to the CS13 compressor station on the Bukhara-Ural main gas pipeline. There are also plans to build a 72-km railway from Zhem station to Zhanazhol station.
The commissioning of new production and infrastructure facilities will help the company not only to increase oil and gas output, but also to create additional jobs for Kazakh professionals.
It is interesting that CNPC-Aktobemunaigaz has developed its own import substitution programme targeting some $173m in the project over the past six years. To support President Nazarbayev’s policy of stronger energy independence for Kazakhstan, the company has built a 24 MW power plant. Production of chemical reagents has established at the Keli combine in Zhaksymai. Previously these items had been imported from Germany.
The social dimension plays a crucial role in the company’s activities. This includes increasing the living standards of personnel, protecting health, improving occupational standards and ensuring workplace safety. By 2004 the income of the employees of CNPC-Aktobemunaigaz had increased by almost 92% compared with 1997.
Close attention is paid to increasing the skills of employees. Every year, over 400 persons are educated in Kazakhstan and abroad, more than 1,000 studying on re-training courses. Under a memorandum of economic co-operation between the administration of the Aktobe region and CNPC, a Special Educational Fund was set up in 2000 to support talented youth. These funds ($1m at present) are used for educating 50 Kazakh nationals at the Beijing Oil University, and another 11 are studying at Kazakh or Russian colleges, also using proceeds from these funds.
CNPC-Aktobemunaigaz has provided over $15m in sponsor aid for the development of health care, education, culture and sports. In addition, 24 ambulances have been donated to medical organizations in the region.
Over the last five years, 85m tenge has been spent by the company on repairs and improvement to the Neftyanik children’s recreation camp. In 2002 the camp was awarded the honorary diploma of the Federation of Labour Unions of Kazakhstan for the best organization of summer recreation for children and adolescents. The company also cares for the elderly. On Victory Day in 2003 it presented free of charge a 80-apartment building to veterans of the Great Patriotic War (WWII).
While visiting the new gas treatment facility of CNPC-Aktobemunaigaz, Premier Danial Akhmetov stressed that the company’s active contributions to the community should set an example for the other investors in the region.
While constantly increasing the economic appeal of our business, we will continue to contribute enthusiastically to the economic development of the Aktobe region, and to a strengthening of co-operation and friendship between Kazakhstan and China.
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