Zhanros Group Expansion Project

Location:

Kazakhstan

Project number:

44562

Business sector:

Natural resources

Notice type:

Private

Environmental category:

B

Approval date:

31 Oct 2012

Status:

Complete

PSD disclosed:

28 Sep 2012

Translated version of this PSD: Russian

Project Description

The EBRD is considering a loan of USD 22.5 million to Zhanros Group, an oil field services group in Kazakhstan, for acquisition of a hydraulic fracturing unit, and two drilling rigs for drilling works to be used in the western regions of Kazakhstan. The equipment will be used in conventional oil and gas fields only, where fracking has been used for about 10 years by international majors. The Project will support the technological upgrade of local oil field services (OFS) operators and expansion into new types of high value-added services.

Transition Impact

The Transition Impact potential of the project is derived from
(i) demonstration effects of new products and processes
(ii) support of private sector development and increased competition in the project sector and
(iii) setting higher standards of business

  • By using fracking equipment, Zhanros will offer conventional fracking services scarcely provided in the south and the eastern regions of Kazhakhstan, which is likely to lead to positive demonstration effects and replication by other local oil field services operators.
  • Through this investment, the Bank will support the growth of a private, independent and local supplier of OFS which offers an alternative to large international OFS providers. By supporting Zhanros, the Bank will contribute to developing a local market for OFS, which will compete positively with international OFS majors by importing Western technologies and promoting sound business practices in the industry.
  • The Bank will request Zhanros to undertake corporate changes, which will allow Zhanros to acquire a modern corporate organisation capable of accessing financial markets.

The Client

The Zhanros Group is an oil field services group established in Kazakhstan providing integrated drilling services and other maintenance services to oil & gas companies in the southern and western regions of Kazakhstan.

EBRD Finance

Debt financing of up to USD 22.5 million, including new and existing facilities.

Project Cost

USD 22.5 million for new investment program and refinancing.

Environmental Impact

EBRD carried out environmental and social due diligence for its first investment with Zhanros Drilling in December 2010. This included an independent audit of the company's environmental, health and safety management systems and of selected operational sites. The company was found to be operating in line with relevant Kazakh environmental and safety legislation, and an Environmental and Social Action Plan was developed to bring the company fully in to line with EBRD Performance Requirements. Zhanros has been diligently implementing this plan and has provided regular progress reports to EBRD. For this new investment EBRD will assess any additional environmental or social impacts associated with the equipment to be purchased and will update the Action Plan if necessary. The Bank also intends to work with the company to review and enhance best practice standards for oil fracking in Kazakhstan.

Technical Cooperation

None

Company Contact

Elena I. Makhnitskaya
Chief Financial Officer
Zhanros Drilling LLP
5-A Aiteke Bi street,
Kyzyl Orda
Kazakhstan

 

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

Public Information Policy (PIP)

The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out how to submit a Request for review through our confidential online form, by email, mail or telephone. IPAM is available to discuss your concerns and answer any questions you may have about the submission or handling of Requests, which follow the Project Accountability Policy and Guidance. Requestors’ identities may be kept confidential, upon request.

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