- Dear Mrs. Bonner, first of all, on behalf of many Kazakhstani companies, we would like to express our gratitude to TCO for paying compensation to business partners during downtime of construction activities at FGP. Thanks to TCO support, many companies avoided bankruptcy. TCO also made a huge contribution to fight against Covid-19 in Atyrau Oblast. What are the main challenges faced by TCO? And what are the current problems for the company?
In 2020 our industry faced many challenges all at once – the pandemic, low oil prices and production restrictions. TCO like all companies had to navigate this uncertain landscape and make the necessary investments and decisions to first protect our people and protect our business – both operations and our expansion project. Despite these difficult and unfavorable conditions, the One TCO team continued safe and uninterrupted production activities and continued critical work to advance the Future Growth Project - Wellhead Pressure Management Project (FGP-WPMP) as much as possible. A shining example of our successful work was the timely completion of the three-year module transportation sealift program and delivery of all modules to Tengiz by end of October.
These challenges have continued into 2021 and TCO remains focused on working through the pandemic to enable remobilization when safe to do so. We have many activities planned for 2021 including maintenance turnaround and a full program of construction activities for FGP-WPMP so our ability to meet our plans will be determined by how the entire TCO team manage through the pandemic and follow the safeguards we have in place to protect people, teams and our organization.
TCO’s staff and Business Partner workforce continue to be financially supported as we work through these challenges. TCO continues to cooperate and collaborate with health experts and relevant state bodies of the Republic of Kazakhstan and Atyrau Oblast to obtain the needed health and business support to support its business plans for 2021.
- Low oil prices and closed borders due to the global pandemic have not only led to cost optimization for oil companies, but also allowed them to pay more attention to support local resources. We have noticed reduced numbers of foreign specialists FGP and organizational changes in TCO overall. Can you share the main structural changes in the company?
As a result of the pandemic and challenging market environment, we undertook a significant reset and review of our end-to-end business to ensure our forward business plan was resilient in lower oil prices and offered competitive returns for our shareholders and the Republic of Kazakhstan. We updated our priorities, high graded our development and project portfolios, redesigned our operating model, adopted new agile workflows and ways of working to drive improved efficiency, faster decision making and advanced our digitalization journey and implemented a fully integrated “One TCO team” in preparation for transition of FGP- WPMP to Base Business over the coming years.
The results of these efforts include optimization of TCO’s organizational structure, a 1000+ reduction in the number of foreign workers, nationalization of over 350 positions of which more than100 are supervisory or leadership positions.
Many companies are interested in resuming FGP construction activities. How is mobilization of employees including BP employees ongoing?
By the end of 2020, we had safely and successfully remobilized 95 percent of the personnel scheduled for remobilization. Production activities continue and we are taking measures to ensure safe progress on works related to FGP-WPMP project execution. We did see several virus outbreaks in camps in December and January and therefore paused remobilization to manage these outbreaks with our Business partners. Several groups were quarantined for 2 weeks or sheltered in their accommodation for 7-10 days to contain the virus spread and ensure those infected got the necessary medical care and attention. TCO continues to work closely with the authorities of the Republic of Kazakhstan to manage through the current winter wave of cases in compliance with all sanitary protocols. Remobilization will resume when we know the virus has been contained and it is safe to do so.
Many companies during this crisis period provided significant support to local residents, and what has TCO done to combat COVID in Atyrau Oblast?
Throughout the pandemic period, TCO has remained an essential partner to communities in Atyrau Oblast. In our efforts to support local communities, TCO has purchased equipment and donated funds totaling approximately 4.5 billion tenge to support the needs of medical workers and local residents. Funds were used to purchase over 648,000 units of personal protective equipment; 56 oxygen concentrators; 252 units of medical equipment; 20 ventilators; two PCR testing devices for diagnosing coronavirus infection; medical vehicles, pyrometers, thermal imagers, disinfectants and ambulances. TCO also assisted in organizing flights to repatriate students and deliver medicine to Atyrau Oblast and arranging cargo aircraft delivery of more than 20 tons of critical medicine to Atyrau.
TCO helped increase PCR testing capacity in Atyrau and donated special equipment to health care institutions of Atyrau Oblast, increasing testing capacity to 800 tests per day. Together with our FGP-WPMP Business Partners and contractors, TCO is co-financing the construction of a multi-specialty medical complex in Kulsary with 200 beds.
What recommendations would you give to Kazakhstani companies seeking to become a partner of TCO?
We believe that sustainable local companies benefit the economy, society and the country as a whole, so we strive to develop and maintain strong business relationships with customer-oriented suppliers who have a strong safety culture, who offer quality goods and services, at competitive prices and innovative business solutions. An integral part of supporting local suppliers is to provide them with information about TCO’s plans, technical needs and requirements on our official website.
TCO has been a strong advocate for developing partnerships and supporting knowledge transfer between Kazakhstani and international companies. We have initiated a Local Supplier Development Program with the European Bank for Reconstruction and Development (EBRD). Thanks to EBRD’s consulting and educational support, in 2019 alone, 73 percent of companies participating in the program increased their revenues by 66 percent, and also increased their number of employees by 32 percent. In 2020, the TCO expenses for Kazakhstani works, goods, and services made up more than 3.5 billion US dollars. Since 1993, TCO’s KC spent is $36.4 billion. TCO currently purchases various types of materials from all over Kazakhstan.
Mrs. Bonner, you worked at TCO for more than five years now and in February you will move to a new position at Chevron. What are your impressions from living and working in Kazakhstan and what is in store for TCO in the future?
My family and I have experienced amazing Kazakh warmth and hospitality, and Kazakhstan will be in our hearts forever.
It has been an honor and privilege to work at TCO; to serve as the leader of such an amazing organization has been humbling. The people of TCO are truly extraordinary and have demonstrated they are capable of delivering outstanding performance and overcoming any challenge when faced with adversity. This has especially been the case in the crisis period over the past year.
During my time at TCO, the company has continued to deliver on its commitments to its shareholders and Kazakhstan. We have maintained relentless focus on safe operations, advanced the FGP-WPMP project and contributed to the economic prosperity of the country through record contributions in Kazakhstani content. It’s has been both exciting and challenging to have been part of the TCO team during such an exciting period of growth.
Kevin Lyon is TCO’s new General Director and brings tremendous leadership, industry experience, a track record of performance and ability to work with stakeholders to the role, having served in various leadership roles at Chevron’s business units around the world. Most recently, he served as President & Managing Director of Chevron’s IndoAsia Business Unit in Jakarta, Indonesia. I am confident that under Kevin’s leadership, TCO will take its performance and contributions to Kazakhstan to the next level.