Kazakh Oil Service Companies to Sustain Their Businesses
Oil producing companies in Kazakhstan will make a transition to austerity. Investors will take a waiting position. Such uncertainty was prompted by the dramatic drop of oil prices. The oil service organizations are also concerned about their businesses due to the unstable situation. There are five service companies per oil company in Kazakhstan. In total, there are 2,000 oil service companies in Kazakhstan. Experts say that the current global oil market situation will hit the service companies first. These companies fear that this year they will have to significantly reduce the number of services that they provide. Experts advise the oil producers to reconsider their contracts with international oil companies in favor of the local service companies. Head of the Association of Kazakh Oil Service Companies, Rashid Zhaksylykov, suggests giving the local companies the new orders worth up to US$100 million. He proposes collaborating with the foreign companies on the orders of services worth more than US$100 million.
The Kazakh national currency tenge is depreciating amid the low oil prices. Economist Kassymkhan Kapparov says that it will be difficult for the National Bank to keep the tenge afloat, if the oil prices do not rise to US$40 per barrel within a month.