TenizService LLP Company Overview

(for Western Kazakhstan Investment Forum: expanding production and development)

Aktau, 2012

TenizService LLP is subsidiary company of KazMunaiGas NC JSC, established in 2003 with the aim to develop coastal infrastructure as its indicated in the State Program of oilDevelopment of Kazakhstan Sector of Caspian Sea (Decree of RoK President #109 16.05.1993)

Main activities of the company are related to construction and exploitation of offshore operations support infrastructure

Kashagan

Kalamkas

Bautino

Aktau

Kuryk TenizService established

number of infrastructure facilities in Bautino.

Results of TS activity were highly rated by the President of the State during his visit in 2008.

TENIZSERVICE LLP

TENIZSERVICE’s ACTIVITIES

Currently TenizService LLP (TS) is stable growing company with well established and proven reputation.

Construction of Offshore Operations Support Base,Rock Loading Jetty,Marine Fueling Station, Fabrication Site,Waste Management Facility for Industrial and Drilling Wastes, Power Line, Hotel in Bautino,Establishment of “Kaz M-I”, a first high-technology joint venture, with MI

SWACO, a leading drilling mud company, etc. HSE Report - 67 636 hours no accidents in 2011.

TenizService is an owner of 627 hectares of costal land line in Bautino for existing facility, and 725 hectares of coastal land line in Kuryk for future

development.

Since its establishment in 2003, TS, based by the recognized international quality and safety standards, has successfully implemented a number of onshore infrastructure development projects, including, such projects as:

NATIONAL WELFARE FUND SAMRUK-KAZYNA COMPANIES GROUP NATIONAL WELFARE FUND

SAMRUK-KAZYNA

National railway

company Kazakhstan temir zholy

National Atomic

Company Kazatomp

rom

KEGOCKazakhstan Electricity

Grid Operating Company

National company KazMun

aiGas

Kazakhtelecom

KazPost

Other companies

Gas transportation and marketing

Refining, petrochemistr

y and marketing

Oil and gas upstream

Oil transportatio

nServices projects

TenizService LLP

Above 500 affiliated

companies

Share of National Welfare Fund "Samruk Kazyna“ GDP is 56% out of total KZ GDP.The share of NC "KMG“ GDP is 11% out of total KZ GDP.

National company KMG

Oil and gas

upstream

Oil transport

ation

Gas transportation and marketing

Refining, petroche

mistry and

marketing

Services projects

TenizService LLP

(49 % KMG)

single source*

PSA (State body)

KPO TCO

* Single source is an option of “bid free” procurement inside of KMG group companies in accordance to procurement rules of KMG.

KMG group company

(over 50% of KMG shares)

KMG group company

(over 25% of KMG shares)

NO BID

Authorities of PSA: Approval of Shortlists; Approval of ITT; Approval of bid results.

All Contracts above $20 mln. should be approved by PSA, otherwise costs are not subject to reimbursement.

KEY FACTORS: TenizService is a key company in Service Division of KMG; TenizService’s activity is strongly supported by KMG, PSA and relevant State

Authorities; TenizService has already implemented a number of projects and nowadays

successfully operates a different coastal infrastructure.

TCONCPOC

ADVANTAGES OF TS AS PART OF KMG

THE ROLE OF LOCAL CONTENT IN THE DEVELOPMENT OF SERVICE BUSINESS IN THE OIL AND GAS INDUSTRY

The possibility of exposure by purchasing services and works from a single source

The possibility of obtaining long-term contract in the KMG group of companies for a period of 3-5 years.

Conditional price drop for Kazakhstan provider of 0.1% for every 1% of local content in group of KMG companies, max 20%Form of

appropriation

Conditional discount

There is no possibility of obtaining a contract from a single source

If company wins the tender, the implementation of the contract maximum 1 year

The absence of any benefits when participating in tenders

Contract

Conditional discount

Form of appropriation

Contract

Inclusion of projects in the State. FIID program, receiving government support and funding from fund DAMU on conditional discount

Lack of incentives and government support, when attracting financing

ГОСУДАРСТВЕННАЯ ПРОГРАММА ПО ФОРСИРОВАННОМУ ИНДУСТРИАЛЬНО -ИННОВАЦИОННОМУ РАЗВИТИЮ РЕСПУБЛИКИ КАЗАХСТАН НА 2010 -2014 ГОДЫ

УТВЕРЖДЕНА Указом Президента Республики Казахстан от 19 марта 2010 года № 958 ГОСУДАРСТВЕННАЯ ПРОГРАММА по форсированному индустриально -инновационному развитию Республики Казахстан на 2010-2014 годы Астана, 2010 год Содержание Паспорт программы. Введение. Анализ текущей ситуации. Цель, приоритеты, задачи и принципы программы. Основные направления реализации Программы. 1. Развитие приоритетных секторов экономики, обеспечивающих ее диверсификацию и рост конкурентоспособности. 1.1 Диверсификация производства в «традиционных индустриях». Нефтегазовый сектор. Нефтехимия. Горнометаллургическая отрасль . Химическая промышленность. Ат омная промышленность. 1.2 Развитие отраслей на базе внутреннего спроса. Машиностроение. Фармацевтическая промышленность. Ст роительная индустрия и производство строительных материалов. 1.3 Поддержка отраслей, имеющих экспортный потенциал . Агропромышленный комплекс. Легкая промышленность. Туристская отрасль. 1.4 Развитие секторов «экономики будущего». Информационные и коммуникационные технологии. Биотехнологии. Космическая деятельность. Альтернативная энергетика. Ат омная энергетика . 2. Ключевые меры поддержки развития приоритетных секторов. 2.1 Обеспечение энергетической инфраструктурой. 2.2 Обеспечение транспортной инфраструктурой. 2.3 Обеспечение инфокоммуникациями. 2.4 Развитие минерально-сырьевого комплекса. 2.5 Обеспечение квалифицированными кадровыми ресурсами. 2.6 Снижение административных барьеров. 2.7 Развитие конкуренции. 2.8 Техническое регулирование и создание инфраструктуры качества. 2.9 Энергосбережение. 2.10 Развитие инноваций и содействие технологической м одернизации. 2.11 Тарифная политика. 2.12 Привлечение инвестиций и развитие специальных экономических зон. 2.13 Торговая политика. 2.14 Инструменты финансовой поддержки Программы. 3. Формирование центров экономического роста на основе рациональной террито риальной организации экономического потенциала. 3.1 Территориальная организация производственного потенциала в разрезе приоритетных секторов экономики. 3.2 Формирование центров экономического роста. 4. Обеспечение эффективного взаимодействия государства и бизнеса в развитии приоритетных секторов экономики. 4.1 Схема и инструменты реализации Программы на республиканском уровне. 4.1.1 Роль системообразующих крупных частных компаний и субъектов квазигосударственного сектора в реализации Прогр аммы. 4.1.2 Механизмы реализации Программы на республиканском уровне.

Obtaining contract under the auspices of the local content

Obtaining contracts based on market conditions

Path1: On the auspices of the local content

Path2: Overall market conditions

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Offshore Coastal infrastructure

Onshore

Subsea

SUBSEA:Well headsPreventersDrillingPipelines

JACK-UP DRILLING RIG:AssemblyOperation

MARINE CONSTRUCTION:Dredging Artificial islands

COASTAL INFRUSTRUCTURE:Ship repair/buildingFabrication yardWaste managementOCTG and drilling pipelinesBase management

REFINERY PLANTS:DesignConstructionMaintenance

KAZ M-IMud plantDrilling, completion & drill-In fluidsSolids Control equipmentFull range of waste management technologiesWell productivity tools (downhole cleaning tools)Production chemicals

DRILLING:Stimulation of productionWell headingPreventersDrillingWell repairBits

OTHER:TrainingConsulting

TenizService

BUSINESS AREAS INTERESTING FOR TENIZSERVICE

TS`s areas of interests for JV creation Activities covered by Joint Venture

“KAZ M-I” JOINT VENTURE

On 19 November 2008 TenizService established a Joint Venture with M-I Drilling Fluids International B.V. (MI SWACO) – «Kaz M-I» LLP.JV Purpose - Provision of pioneering technologies in: Drilling, Completion & Drill-In fluids Solids Control equipment Full range of Waste Management

technologies Well Productivity tools (Downhole

Cleaning tools) Production chemicals

Liquid Mud Plant In October 2009 MI SWACO began construction of the Liquid Mud Plant on the territory of TenizService Support Base.

Productive capacity of drilling mud production - 84 000 tons/year .End of construction – 1 quarter of 2012.Project cost – $ 15 mln.

AUTOMATED TANK CLEANING

Advantages of automated Tank Cleaning system:

Safety (ATEX) Efficiency Cost effective Less time

TS provides the following services: Automated Tank cleaning using remote

control equipment and tank sweeps Use of specialized sludge guns with hot or

cold tap capacity Separation, transportation and utilization of

sludge Oil recovery of needed.

Current situation: TS is cleaning KazTransOil’s 20 000m3

reservoir in Aktau, the following step is signing long-term contract.

Negotiations are held with KPO, TCO, MMG, etc.

TS will create JV with partner. TS participating in KPO tender

OFFSHORE WASTE MANAGEMENT EQUIPMENT

TS is the one of few companies in Kazakhstan, which provides equipment for offshore waste management (offhore skips, drilling cutting boxes - DCB, offshore cargo baskets , minicontainers, iso tanks, etc).

TenzService  DCB

Specification Other DCB

3.55 Volume (m3) 3.1

8400 Max. Payload (kg)

6000

1600 Tare (kg) 1500

10000 Gross Weight (kg)

7500

2280 Length (mm) 2400

1950 Width (mm) 1700

1250 Height (mm) 1370 Volume of TS DCB - 13% more than Other DCB,

Therefore 13% less lifting operations and logistics

Current situation: TS has contract with Zhambyl Petroleum TS has mobilized equipment from Baku and UK to Bautino. TS has intention to provide equipment for all offshore operators,.

PROVISION OF DRILL BITS, CENTRALIZERS

Joint Venture

Project Managing

Technology, Training, Know-how Investment

TERCEL

Personnel and local content

Workshop in Special Economic Zone Aktau Sea port for assembling of products: Tax references – 0 %, Custom references –

0%,

TENIZSERICE

Administration and cooperation with state bodies

TenizServiceTercel

Oil and gas companies

Current situation: TS provided 2 Roller Cone bits to AktauNefteService for testing in Zhetybau oilfield.

Technical Results of testing are very successful. TS and Tercel are making marketing research. TS and Tercel are preparing documents to approve creation of JV in KMG.

WASTE MANAGEMENT SERVICES

Reasons TS advantages

no any complete waste recycling, treatment units in Mangystau region

increasing of offshore oil operations current wrong WM in region waste management law

strengthening

TS existing Polygon - 40 hectares Additional 40 ha reserved for Polygon extension TS Base –Polygon road do not cross village, settlements Experience in waste management Direct knowledge of situation on waste management in Mangystau TS has Designed Project for WM units

One of the main perspective projects to be realized by TenizService is waste management services for all type of waste coming form oilfields.

segregation transportation managementincinerationrecycling treatment

FABRICATION YARD

Joint Venture

Project Managing

Technology, training, know-how

TECHNIP

Personnel and local content

Administration and cooperation with state bodies

TENIZSERICE

Developed Infrastructure in Bautino

- 51% (Fabrication site)PARTNER

At this moment TS is holding negotiations with potential partners - Technip, Hyundai Heavy Industries,Heerema, etc

Oil and gas companies

Fabrication Site

Fabrication Site is a reclaimed land plot on the Eastern coast of Tupkaragan Bay.

Total area: 20 hectares; Quay wall length: 667 m; Preliminary dates of yard construction are

2013-2014. Initially yard capacity will be 6000 tons/year,

with a subsequent increase up to 10 000 tons/year.

Main facilities: Berth and mooring pond; Buildings for OSR equipment storage; Buildings and structures for Air-Cushion

Ships Maintenance (ACSM); Building of the Fauna Rehabilitation

Center; Building of the Ecological and

Meteorological Monitoring Center; Auxiliary Buildings and Structures; Flight deck.

NORTH CASPIAN ENVIRONMENTAL OIL SPILL RESPONSE BASE

Project: North Caspian Environmental Oil Spill Response BasePurpose of the project: Provision of services for emergency oil spill response within the Northern part of the Kazakhstani Sector of the Caspian sea. Location: Atyrau Oblast, Primorsky Channel, south of Damba Village. Implementation period: 2009 – 2012.Project value: ~85 mln. USD (final value is to be defined on the basis of the design and estimation documentation).Finance source: KazMunaiGas and/or loans.

o г.Атырау

OIL SPILL RESPONSE SERVICES

TS is implementing project North Caspian Environmental Oil Spill Response Base in Atyrau region. All construction-and-assembling operations are being make with advanced pace and project will be done in time.

TS – one of few offshore base management companies

• Own several offshore infrastructure objects

• Experience in base management• Own high-trained local

personnel• High international standards

TS has experience in provision of OSR services in partnership with

MEKE Kazakhstan• OSR tier-1,2• OSR modeling• Oil spill sensitive mapping• IMO standard trained local

personnel• Previous contracts: N Operating

Company, TenizBurgylau. • 3 oil spills were responded

during N project drilling • OSR exercises were held with

NOC and state authorities TS – company with high abilities to provide full cycle of OSR

services.

Existing facilities:1. ERSAI Fabrication yard.Facilities depending on commencement of Kashagan Phase II.2. Pipe coating plant. 3. Oil loading terminal. 4. Ship building yard.5. Fabrication yard. Facilities depending on commencement of oil production in the South Caspian6. Dredging base.7. Living camp.8. Vaporizer pond9. Environmental monitoring center10. Water-desalinating plant. 11. Fleet supporting base. 12. Offshore operations support base. 13. Industrial logistics base. 14. Waste management facility15. Helipad. 16. Compressor station.17. Oil and gas preparation station18. Emergency response base. 19. Liquefied gas station.

KURYK: PERSPECTIVE FACILITIES OVERVIEW

In the future, when the main hubs of coastal infrastructure such as Atyrau, Bautino, and Aktau will reach their capacity, TenizService intends to develop subsequent projects aimed to increase coastal infrastructure in the Kuryk area.

Thank you for your attention!