Alik Aidarbayev: “We Are Not Going to Cut Operations Personnel”

Alik Aidarbayev, Chairman of the Management Board of JSC NC “KazMunayGas” (KMG, the Company), made a working visit to Atyrau and Mangistau regions.

In the course of the visit, he met with the heads of the two regions. Mr. Aidarbayev discussed the COVID-19 situation at Tengiz field with Makhambet Dosmukhambetov, Akim of Atyrau region, and reviewed the organisation of rotations at the Company’s producing enterprises with Serikbai Trumov, Akim of Mangistau region.

During his working trip, KMG CEO also held a meeting attended by the heads of subsidiaries, service companies and chairpersons of trade union organisations. In his speeches, Mr. Aidarbayev noted that, as a result of the epidemiological response measures, the situation at the fields was stable. However, he emphasized that preventive measures at production sites must be strictly complied with.

“We should continue our efforts to prevent the spread of coronavirus, and strictly comply with the preventive measures. This is the responsibility of the executives at all levels,” Mr. Aidarbayev said.

The KMG CEO enlarged on the Company’s financial position. An anti-crisis program concept has been developed to reduce the negative impact of the market conditions on KazMunayGas.

“The situation is very serious. Therefore, we should take proper measures to stay afloat. We have developed an anti-crisis program concept aimed at stabilising the financial position, bringing costs in compliance with reduced profits, and getting prepared for post-crisis development,” the KMG CEO said.

In furtherance of the anti-crisis measures, costs have been cut by 146 billion tenge throughout the group of companies. The organisational structure of the headquarters has been revised, and the staff has been cut by 34%. The salaries of top managers have been reduced by 30%, those of mid-level managers — by 20%, and all bonuses have been cancelled until the year end. The salaries of ordinary staff members have remained intact. The headquarters has stopped using company cars for the management.

“As for the subsidiaries, all costs not affecting the operations and employment have been cut. We will continue cost-cutting depending on the situation. However, we are not going to cut operations personnel. Saving jobs is our key principle. I am confident we will overcome all difficulties by joint efforts,” Mr. Aidarbayev added.

In his address to the heads of subsidiaries, the Chairman of the Management Board of JSC NC “KazMunayGas” discussed how the falling demand for energy resources and the drop in oil prices would affect the Company. According to him, KMG is to face a significant decline in its financial performance for the year.  In addition, the Company is cutting production under the OPEC+ agreement, which will eventually lower respective contractor work scopes.

“Therefore, the heads of subsidiaries and service companies should efficiently distribute the remaining work scopes until the year end. Work schedules are very likely to be changed. We still have to address this issue in more detail at the local level. But I would like to underline once again that all the jobs of the operations personnel should be preserved,” the KMG CEO said.

During his visit to Atyrau region, Mr. Aidarbayev also checked out the progress of construction of the integrated gas chemical facility. The current progress of the project is 66%. General construction works are at the completion stage; assembly of tanks and vessels, heat-exchange equipment, metal structures and pipelines is underway. Assembly, mounting and pipes fitting works for complex process equipment are planned for the period ahead. The KMG CEO also visited the sea port of Atyrau where he had a look at the process of sea delivery of critical oversize process equipment manufactured in South Korea.