Kazakhstan’s leading building contractor Kazstroyservice has finalised a joint venture with German drilling company KCA Deutag, paving the road for both companies to increase their exposure and services in the Central Asian nation.
The German outfit announced the creation of the venture, KCA Deutag Kazakhstan, in a statement released on Tuesday.
KCA Deutag will hold a 51% interest in the joint venture, offering drilling services in Kazakhstan. The main target customers are among three foreign-operated oilfield developments, Tengiz, Karachaganak and Kashagan.
The venture will be responsible for engineering, procurement and leasing of drilling rigs, as well as their operations and maintenance, upgrades and modifications.
Kazakh authorities have demanded that operators of Tengiz, Kashagan and Karachaganak contract an increasing number of the country’s oilfield service providers and suppliers for ongoing upgrade and expansion projects, with the newly created venture fitting the requirement.
Despite having a strong presence in neighbouring Russia, KCA Deutag has had only limited exposure in Kazakhstan and does not operate any drilling rigs in the country at present, according to a disclosure on the global location of its land and offshore units.
For Kazstroyservice, the joint venture is another milestone in teaming up with recognised international companies.
The Kazakh contractor has long operated a joint venture with Aberdeen-headquartered Wood Group — Wood KSS — which has been working mainly at the Chevron-led Tengiz oil and gas project.
Kazstroyservice was once a subsidiary of state-run oil and gas holding company KazMunaiGaz, but is now owned by obscure foreign-registered companies following its privatisation in 2005.
According to the Kazakh edition of Forbes, significant interests in Kazstroyservice are held by Kazakh businessman Timur Kulibayev and his spouse Dinara, a daughter of former long-serving president of Kazahstan, Nursultan Nazarbayev.
Besides Kazakhstan, Kazstroyservice has ongoing construction projects in India, Thailand and Russia.
According to a Kazakh association of oilfield service contractors KazService, the domestic market of oil and gas related construction and drilling services is set for a sharp rebound this year after a two-digit percentage point decline to $1.5 billion in 2020 amid the Covid-19 pandemic.