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

Project Complaint Mechanism (PCM)

The Project Complaint Mechanism (PCM) is the EBRD's accountability mechanism. It provides an opportunity for an independent review of complaints from individuals and organisations concerning EBRD-financed projects which are alleged to have caused, or are likely to cause, environmental and/or social harm.

Please visit the Project Complaint Mechanism page to find information about how to submit a complaint. The PCM Officer (pcm@ebrd.com) is available to answer any questions you may have regarding the submission of a complaint and criteria for registration and eligibility, in accordance with the PCM Rules of Procedure.

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