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special issue october 6 2011 iteca exhibition news 3 98 #2 onference review 1-8 vip vip-opinions 10 social events 14 geology innovation and local content kioge 19 ­ 2 it seems appropriate to start an article about the first day of the kioge conference with the words of the academic geroy zholtayev we are gathering at the kioge conference for the nineteenth time it should be said that it has played and continues to play a huge role in the accelerated development of our industry and in attracting investment in it and for that i as an ordinary citizen would like to say thank you to the organisers hardly a single person among those present could be found not to share the view of this well-known kazakh scientist continued on page 2

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2 www.kioge.com sauat mynbayev minister ministry of oil and gas republic of kazakhstan uzakbay karabalin general director kazakh institute of oil and gas lyazzat kiinov deputy ministry of oil and gas republik of kazakhstan alik aidarbaev managing director kazmunaygas jsc national company ite group plc sir andrew wood senior advisor ite group plc ­ kioge 2011 kazenergy 4,8 3,2 ­ « » kioge ­ after the official opening of the conference by sir andrew wood sauat mynbayev minister of oil and gas of kazakhstan said that he had already heard very positive feedback about the kioge 2011 exhibition and against the background of the kioge exhibition and the kazenergy eurasian forum in astana the conference will be of an applied nature lyazzat kiinov deputy minister of oil and gas of kazakhstan started his speech with some basic information reporting the country s hydrocarbon reserve statistics today kazakhstan boasts proven recoverable oil reserves of 4.8 billion tonnes which is equivalent to 3.2 of the total global reserves the past year has seen no significant growth in reserves even though new fields were discovered they are still being explored so it is too early to mention numbers yet but at the same time mr david moran united kingdom ambassador to kazakhstan and kyrgyzstan daniel stein senior advisor to the special envoy for eurasian energy u.s department of state

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daily report of the kazakhstan international oil&gas exhibition and conference www.kioge.kz 3 « » ­ «-» 2015 95 2020 ­ 130 4 kiinov is confident that eventually kazakhstan s total oil reserves will significantly increase mr kiinov s speech reflected a traditional feature of the kioge conference problems as well as achievements are discussed the deputy minister touched upon geological exploration ­ the issue perhaps of greatest importance for kazakhstan s oil and gas sector today in the ussr kazakhstan was one of the leading republics for the scope and quality of its geological surveys unfortunately it has to be said that we have lost all those achievements that we used to have said mr kiinov today the industry still has to use the geological information acquired during the soviet times but a there is already a positive trend an understanding of the importance of this industry is developing and the government is taking measures to revitalise it for instance the establishment of geological research and development institutes and a special association within samyruk-kazyna to conduct mineral exploration is being considered i believe that kazakhstan will be able to raise this work to the required level to provide us with the necessary raw materials for the future said mr kiinov this year the country will probably produce as much oil as in the previous year in the future further growth in oil production is predicted in 2015 it will amount continued on page 4

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4 www.kioge.com « «» bazar eskozha senior geologist kazmynaygas exploration production jsc salans glenn kolleeny senior partner salans «» agzam kudranov managing director on exploration jsc kazmunayteniz «» anuarbek jakiev deputy general director tengizchevroil « «»» kioge to approximately 95 million tonnes and by 2020 it will reach about 130 million tonnes alik aidarbayev managing director of kazmunaygas nc jsc also began his speech by praising the effectiveness of the kioge conference in particular he said it was important that at the conference issues of cooperation were discussed both in the traditional areas and in such promising areas as high-tech and innovative oil and gas technologies energy security stability of energy supplies to markets local content development and environmental issues are very important today angus miller caspian energy adviser foreign commonwealth office government of the united kingdom «» nikolai platonov general director cpc caspian pipeline consortium professor academic doctor of geological and mineralogical science director of the oil and gas geology department igs named after satpaev k i geroi zholtaev roman novikov head department of pipeline ballasting st engineering

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daily report of the kazakhstan international oil&gas exhibition and conference www.kioge.kz 5 fluor dinara utesheva local content manager fluor « 6 i am confident that the exchange of views will be of benefit to all the conference participants said mr aidarbayev uzakbai karabalin ceo of the kazakh institute of oil and gas focused on the status of the country s oil and gas science according to him it is of the same complexity as space science today kazakh scientists working in this area face a number of important challenges including the automation of oil production processes many of the fields in kazakhstan are at late phases of development and the residual reserves of most fields are becoming difficult to recover kazakhstan s caspian shelf development projects are also complicated and therefore require the most advanced computer technologies mr karabalin explained paul domjan adviser to the uk parliament formerly energy security adviser at the us department of defense and adviser to the national bank of kazakhstan continued on page 6 « » « » gauhar takuova director development of local content department contract agency branch central dispatching board of oil an gas industry jsc ministry of oil and gas or the republic of kazakhstan

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6 www.kioge.com ­ « » « » ­ ­ 8 the key to success ­ dialogue cooperation and time the first of the foreign participants at the conference to speak was david moran uk ambassador to kazakhstan and kyrgyzstan the title of his paper was the benefits of dialogue and partnership using and building up local experience is advantageous i know that international energy companies will agree with this the question is how to help the three energy projects in kazakhstan kashagan karachaganak and tengiz ­ to thrive all these projects have now arrived at a critical stage and it is a very important time for kazakhstan and its international partners and some important decisions must be taken said ambassador moran the uk has good experience he continued london succeeded in building up local content in the british oil and gas projects in continued on page 8 rinad temirbekov executive director efca kazakhstan eurasia foundation of central asia kazakhstan « «nadloc» svetlana akhmetbekova director of the local content in the economy development department the national agency on development of local content nadloc tubular products energy arcelormittal james annal ceo tubular products energy arcelormittal phd doctor of geological sciences phd professor director of oil and gas institute kazakh national technical university named after satpayev k talgat ensepbayev energy and extractives practice bsr business for social responsibility terry nelidov manager energy and extractives practice bsr business for social responsibility hong kong

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daily report of the kazakhstan international oil&gas exhibition and conference www.kioge.kz 7

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8 www.kioge.com «hsbc » aigul djailaubekova deputy chairman of the management board head of banking managing director sb hsbc bank kazakhstan jsc salans kanat skakov partner salans douglas townsend senior adviser international tax&investment centre washington « » michael e wilson managing director michael wilson partners ltd « » ­ « » « » the north sea and the key to success was dialogue cooperation and time daniel stein senior advisor in the office of the special envoy for eurasian energy at the u.s department of state spoke about kazakhstan and the caspian region in the context of the energy policy of president obama s administration the caspian region has played and will continue to play an important role in the global energy market he said noting that the importance of the region was further enhanced by the events of recent months including the fukushima nuclear power plant accident and civil war in libya the u.s will continue to encourage the development of a balanced and differential energy market for europe with a variety of resources and routes of delivery while the caspian region countries should seek and find new routes to foreign markets these countries should be able to make their own independent choice said the us diplomat rejecting the view that the region is becoming an arena for a new great game between the major powers.

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10 www.kioge.com all stable in kazakhstan s oil and gas sector 2030 « » 81 7 ­ 12,5 73 2012 in the share of the hydrocarbon sector and oil and gas should be expected in order to minimise the impact of the crisis our country s financial system is structured in such a way that a significant proportion of revenues including those from oil production and exports is channelled to the national fund which is a kind of safety cushion during a crisis the reconstruction of plants and development of the petrochemical industry are aimed at refining as much oil as possible inside the republic of kazakhstan oil production in kazakhstan this year amounts to about 81 million tonnes imports account for about 7 million tonnes and the domestic market 12.5 million tonnes 73 million tonnes are exported in 2012 no significant structural changes should be expected in the balance of oil production and distribution minister of oil and gas of the republic of kazakhstan sauat mynbayev 90 on the very first day of the conference a raft of issues was considered the oil and gas sector remains a key industry not only in the heat and power sector but also in the processing industry in kazakhstan it is very difficult to predict oil prices ­ if this wasn t the case we would be the most successful country in the world today however according to various agencies estimates we can conclude that the price of $90 per barrel will not drop in the short term if we talk about the structure of the economy in terms of energy supply then by 2030 no significant reduction kioge kioge s business focus ­ kazenergy kioge kioge 2011 kioge kioge autumn in kazakhstan sees two events of major importance the kazenergy eurasian forum and kioge international exhibition and conference for several days the country becomes a meeting place for leading oil and gas and energy professionals from around the world kioge 2011 provides an opportunity to discuss a wide range of issues both in the political and commercial spheres the issues being considered include the customs union and its effect on the oil and gas industry s position in kazakhstan new transport options for china and oil pricing policy all the participants in the event stress the need for informal contacts which are fully provided within the exhibition i was pleasantly surprised that the number of international events held in kazakhstan increases markedly each year and the kioge exhibition and conference reaches an ever higher professional level i am confident that this year kioge will continue to be a successful and effective event ite group plc member of the board of directors senior advisor to ite group plc sir andrew wood

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daily report of the kazakhstan international oil&gas exhibition and conference www.kioge.kz 11 «» kazmunaygas launches an oil reserves audit «» « » prms spe 31 2011 « » « «» ­ 3 « » www.kmg.kz kazmunaygas nc has commenced an independent audit of oil reserves the audit method was presented at a press conference held the day before the audit will be conducted by gaffney cline and associates in accordance with international standards and the prms method formerly spe technique from 31 december 2011 the data received will allow us to more accurately plan our activities in the field of oil exploration and production the audit of oil and gas field reserves will enhance the liquidity of the company s securities in the market said alik aidarbayev managing director for exploration and production and member of the board kazmunaygas nc jsc the preamble to the press conference was a pleasant departure from its formal format the awards ceremony of the 3rd pen power journalistic excellence contest was held the names of the winners and information about the contest can be found at www.kmg.kz.

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12 www.kioge.com kioge 2011 kioge « «» the kioge 2011 exhibition was officially opened by sir andrew wood senior advisor ite group plc chairman of kioge exhibition and conference sauat mynbayev minister of oil and gas republic of kazakhstan alik aidarbaev managing director kazmunaygas jsc nk 6 vip « «» kioge kioge 2011 « ».

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daily report of the kazakhstan international oil&gas exhibition and conference www.kioge.kz 13 on 6 october following the presentation of papers at the conference a vip delegation including sauat mynbayev minister of oil and gas of the republic of kazakhstan lyazzat kiinov deputy minister of oil and gas of the republic of kazakhstan alik aidarbayev managing director for exploration and production kazmunaygas nc jsc and sir andrew wood chairman of the kioge exhibition and conference ­ visited the kioge 2011 exhibition to meet the exhibitors.

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14 www.kioge.com hsbc premium ballroom rixos almaty «hsbc » «hsbc » kioge 2011 kioge «skils» the busy first few days of the exhibition and conference days ended with a cocktail reception in the premium ballroom of the fashionable rixos almaty hotel the informal event was sponsored by hsbc bank kazakhstan although such events are held every year the comprehensive programme of yesterday s meeting made a positive impression on the invited guests welcome speeches by exhibitors and the organisers of the reception were followed by wonderful dances performed by kazakh dancers aigul dzhailaubekova deputy chair of the board of hsbc bank kazakhstan congratulated the attendees on the successful start of kioge 2011 and wished everyone success during the exhibition and conference the organisers expressed their gratitude to the regular and firsttime exhibitors and partners supporting kioge gifts and awards were presented for the most creative and original exhibition stands the reception continued with more dance performances accompanied by the group skils and dj tucker a cocktail reception hosted by hsbc bank emerson aveva caspian offshore contracting cnpc salans ernst&young fmc mubadala hsbc the best corporate stand design kazmunaigas emerson russneft special award for participation corporate stand of nizhegorodskaya oblast neftegazoviye systemi national oil company petronas newcomer aveva caspian offshore contracting the best designed stand tengizchevroil by a national oil company cnpc by a national group the german group longstanding support salans ernst&young fmc mubadala hsbc awards iteca exhibition news 2 97 3 98 «iteca» ducat ducat 11-330 11 11 11-330 intercontinental almaty hotel 3 intercontinental almaty hotel 3 «iteca» 050057 42 15 +7 727 2583437 34 +7 727 2583444 media@iteca.kz www.iteca.kz «lux media» 050050 4 7 727 2333173 178 +7 727 2333180/81 e-mail info@luxmedia.kz 5624 18 2005 iteca exhibition news .

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