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  KAZAKHSTAN International Business Magazine №3, 2005
 Karachaganak: Future of the Project Is in the Hands of Kazakhstanis
Karachaganak: Future of the Project Is in the Hands of Kazakhstanis
Karachaganak is located in the northwest region of Kazakhstan and it is one of the world’s largest oil and gas condensate fields. Covering an area of over 280 square kilometres, it holds more than 1,200 million tonnes of oil and condensate and over 1.35 trillion cubic metres of gas.The expansion of the field has involved an investment of over US$4.3 billion and it is currently the biggest internationally funded project in Kazakhstan.The field development is being overseen by four international partners – British company BG Group and Eni of Italy, each with a 32.5 percent interest, Chevron of the USA with 20 percent, and LUKOIL of Russia with 15 per cent. They came together to form Karachaganak Petroleum Operating BV. (KPO).The operations of KPO are regulated by the Final Production Sharing Agreement that was signed in 1997 by the government of Kazakhstan and the KPO partners. Under the agreement, KPO will operate the Karachaganak facilities through to 2038. That is why the company has already started large scale training programme for new generation of Kazakhstani specialists, who will be developing the world class project.
New Challenges, New Personnel
Just a few years ago the challenge for KPO was to provide the infrastructure necessary for such a massive undertaking and to construct the major new facilities that would give Karachaganak the capability of producing a significant proportion of Kazakhstan’s oil and gas production. This involved a chiefly expatriate engineering and construction management and supervisory teams. They have been well supported by a contracted workforce that, to a large extent, was made up of Kazakh nationals.
During the peak of the construction programme the project created some 20,000 jobs, 80% of which were filled by Kazakh nationals. Over 500 Kazakh companies won contracts to supply goods and services.
The major task for today and the years ahead will be to operate the new facilities efficiently and to market successfully the increased output that will result.
For this the company needs to build a top team that is capable of running one of the biggest operations of its kind in the world.
This team will be of mainly Kazakh origin – a commitment that was stipulated in the Final Production Sharing Agreement. And to ensure that this occurs, KPO has developed a detailed Nationalisation Programme till 2008 that has been approved by the Ministry of Energy and Mineral Recourses, the Ministry of Labour and Social Protection of Kazakhstan. The purpose of the programme is the overall development of Kazakh specialists working for the Karachaganak projectfor scheduled and continuous replacement of existing expatriates. The programme addresses developing the professional skills of the KPO national employees and also developing their leadership and managerial skills to replace managerial expatriate staff.
A particular focus is being placed on training programmes that result in internationally recognised certification of professional skills, such as those of the Chartered Institute of Purchasing and Supply, the Chartered Institute of Personnel and Development, the Chartered Institute of Managerial Accounting and Chartered Institute of Management. KPO will aggressively seek to promote such training within Kazakhstan, as part of its support for higher education within the country.
The Nationalisation programme is on the peak of its development: the company needs managers, engineers and scientists to work on the leading positions. There are already the first results. 
In April 2005, in Ashridge (London suburb) several Kazakhstanis – employees of KPO have received diplomas of graduation from IMP (International Management Programme). BG Executive Director Frank Chapman personally congratulated the graduates. Nurzhan Kamalov, KPO Corporate Affairs and HSE Controller, was the first and the only representative of our country who received IMP Diploma of the highest 5th level.
Continuity of Generations
In general, the family name of Kamalov is well known in Kazakhstan. Outstanding Kazakhstani geologist Sukhan Kamalov discovered Uzen and Zhetybay fields at Mangyshlak. Another large field, the Zhanazhol was also discovered with his immediate participation as the main geologist in the Aktyubinsk expedition. But in any case, the first thing we associate his name with is Karachaganak. He described the prospects for finding oil in the northern part of Caspian cavity in his candidate dissertation which he brilliantly upheld in 1973 in Leningrad. Three years later, in 1976 he initiated the exploration work at the Karachaganak area. Parametric well N10, which in 1979 gave the world the first oil in Karachaganak was projected personally by him.
The son of the pioneer-discoverer Nurzhan Kamalov continued the course of his father. After graduation in 1989 from the Moscow Institute of Oil and Gas named after Gubkin, he started his career in Karachaganak as an operator. From 1999 till 2003 Nurzhan Kamalov was a manager of the KPO Office in Uralsk and was responsible for social projects in West-Kazakhstan Oblast. In July 2003, he was assigned to the position of KPO Corporate Affairs & HSE (health, safety, and environment) Controller.
Such a brilliant continuity of generations! Sukhan Kamalov discovered Karachaganak, his son Nurzhan Kamalov works there and became the first national top manager of an international company. Kamalov senior received recognition in 1989 when he defended his doctoral dissertation, on the basis of which the Kazakhstani underground map was created with the oil and gas fields. Kamalov junior in his conversation with journalists after graduation ceremony did not deny that a Kazakh could become a president of a large foreign company, (but commented:” not in the nearest 10 years”).
Another Award
One month later, Nurzhan Kamalov again became a hero of the day – KPO has been awarded with a prestigious award by the Chairman of the BG Group 2005, having occupied an honourable place in Pioneering Work in the Observation of Safety Measures. This award was given as a sign of the acknowledgement of KPO’s successes in the area of safety, and in particular, for its innovative achievements on the successful introduction of a new labour protection and safety programme at the Karachaganak deposit, which is known as the Behavioural Based Safety programme (BBS). A festive awards ceremony took place in England at the Highclere Castle, which is located in a picturesque area outside Newbury. The Chair of the BG Group Board of Directors, Sir Robert Wilson personally awarded the prize to Nurzhan Kamalov. Besides Nurzhan Kamalov, Safety Measures Supervisors Managers, Ilgiz Gabitov and Erkebulan Beisimbaev took part in the awards ceremony along with representatives from other companies.
This is the seventh contest, which was established in 1999. The awards of the BG Group Board Chair are given to projects and enterprises, in which the company is a shareholder or has an equity stake. This year, 85 applications from companies that hold shares together with the BG group, and operate oil and gas deposits around the world, have been submitted for the contest. The selection of participants for the contest was held in seven nominations including Safety Performance; Safety Innovation; Contract Partner Performance; Contribution to Health; Contribution to Social Development; People Performance and Environmental Initiatives. One should note that the main criteria for the selection of the winning participants were their operational successes within the above-listed nominations.          
Nurzhan Kamalov, commenting on KPO’s participation in this prestigious annual contest, said that the receipt of this award is not due to the merit of one person, but is an official acknowledgment of the success of the entire company and its employees, and strongly proves their adherence to the KPO policy of a meticulous observation of safety rules and environmental protection.

Table of contents
The Rise of Kazakhstan on the Global Stage  Valentina C. Kretzschmar 
SAP’s Solutions for Kazakh Business  Jacob Korobko, Alnur Zhetbayev 
The Origin of Brands  Al Ries, Laura Ries 
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