Since Kazahkstan and Azerbaijan gained independence following the collapse of the Soviet Union in 1991 they have become major energy producers— providing steady work for the overhead crane and hoist sector.

Kazahkstan, a country the size of western Europe, and Azerbaijan have relied increasingly on the lucrative oil and gas reserves in the Caspian Sea, which lies between the two countries. Huge investment over the past 25 years or so has created hydrcocarbondependent economies. They boomed with the good times but of course were vulnerable to the oil price plummet in 2014. Their currencies nosedived overnight and their economies stuttered.

Although Kazakhstan and Azerbaijan’s economic stability has been weakened by the lower oil price, the Caspian remains an important area for lifting equipment companies. They are still busy and they see the potential to increase business in the region. Some of the biggest development projects globally are being undertaken in the region and Kazakhstan is home to one of the world’s largest-ever oil and gas development projects—the Kashagan field which covers a surface area of around 75x45km in the northern part of the Caspian Sea.

BP is the main oil company in the region, operating seven offshore assets. It has just completed construction of the topside and jacket for the Shah Deniz 2 gas platform which sailed away in May. The company hopes to extend the contract for development of Azerbaijan’s largest offshore oil fields—the Azeri- Chirag-Guneshli about 100km east of Baku—until 2050. This would involve construction of an additional platform— the Azeri Central East facility.

The oil giant is also in the early stages of surveying for a potential third phase of the Shah Deniz gas field. And last year Tengizchevroil LLP, an international consortium led by Chevron, announced plans to raise production at Kazakhstan’s large Tengiz oil field. EnerMech has been working in the region since 2010 when it secured a fiveyear crane operation and maintenance contract on the Caspian assets of a major international oil company. This was soon followed by a contract to supply crane technicians in Kazakhstan. “We have since successfully introduced all of our services into the region and expanded further geographically with our operations in Georgia,” says John Morrison, international mechanical handling services director. “We’ve made a large capital commitment on equipment and infrastructure so that the services we offer in Azerbaijan and Kazakhstan mirror the range of business lines we offer elsewhere.”

EnerMech has invested heavily in the region and it now accounts for around 10% of the company’s worldwide sales. “The region is hugely important to EnerMech,” says Morrison. “We started with the cranes contract but, in line with EnerMech’s established strategy when entering a new market, we set up a more extensive business infrastructure than was needed for just servicing this contract. This enabled us to introduce our other service lines very quickly and to grow a substantial business.”

Last year BP Exploration (Caspian Sea) renewed its contract with EnerMech, held since 2010, for up to five years. The work includes crane operations, maintenance and inspection services for 16 BP offshore pedestal cranes and two new platforms on the Shah Deniz 2 project.

EnerMech’s initial focus was on the upstream oil and gas and downstream petrochemical markets but it now services both the wider energy and infrastructure markets.

“The energy sector remains core to our business and that is reflected in our global footprint and having bases, infrastructure and equipment located in the main oil and gas production regions,” says Morrison. “However, we also see value in extending our operations into large-scale infrastructure projects and our recent acquisition of an electrical and instrumentation specialist was a strategic step in aligning a range of integrated services which will appeal to that sector.”

Having said that, oil and gas will remain the big drivers for work in Azerbaijan and Kazakhstan. “Azerbaijan and Kazakhstan are both still developing oil reserves and there is significant offshore and onshore investment ongoing and in the pipeline,” says Morrison.

Although the lower oil price over recent years has squeezed margins, EnerMech’s business in the Caspian has actually grown over this period. “There has been a massive shift towards a fully nationalised workforce and we’ve embraced this fully by making significant investment in training. We have our own training centre in Baku and have been very successful in training local personal and achieving nationalisation targets,” says Morrison. The company expects this year’s turnover in the region will be higher than last year’s.

While the region may present some geopolitical and economic challenges, Morrison says EnerMech’s long history of working in Azerbaijan and Kazakhstan means it is familiar with the regulatory and practical issues of doing business there. “The most significant issue has been foreign exchange and with local currencies tied to the US dollar we’ve had to deal with fluctuating exchange rates over the last couple of years,” he says. ATR, a Centurion company, already had a facility in Azerbaijan and now, looking to capitalise on recent business growth in the Caspian, has opened a base in Kazakhstan. The business will initially employ 12 new personnel, 10 of whom are local, and ATR plans to double the team over the next 12 months.

The 2,000 sq m purpose-built facilities at Aktau include offices, workshops and a yard area and are similar in size and capabilities to ATR’s Baku base.

The decision to increase its presence in the country comes after ATR secured business to supply lifting equipment and regulatory inspection and maintenance services to support projects for some of the world’s leading energy services companies. ATR, which merged with Centurion Group last year, is the largest rental fleet management company to the UK’s oil and gas industry. Now operating with the Group’s combined capabilities, it will be able to further support campaigns globally including those for operators, drilling companies, fabric maintenance contractors, engineering firms, and across shutdowns and marine projects. ATR divisional director Findlay Moir says the Kazakhstan base is strategically important as it allows ATR to support all of Centurion’s companies throughout the region. “We will be able to provide the full range of our services in the country. All equipment and staff are there and ready to go to work,” he says.

“The locally based workforce will operate closely with our Baku business supported from our Aberdeen headquarters. Initially we will employ 12 people in the country; however, we expect this to more than double over the coming year.”

Czech overhead crane and wire hoist manufacturer Giga delivered its first double girder bridge crane and hoists to Kazakhstan 12 years ago and since 2012 it has had regular orders.

The bulk of Giga’s business is with its more logistically straightforward European neighbours but it recognises the importance of the quickly developing Kazakhstan market.

“We have a representative office in Aktobe and partners in Russia, one of which ensures service for this region,” says Beloglazov, from the company’s commercial department. Mining is driving demand for Giga’s business in Kazakhstan but quarrying, engineering and crane manufacturing also provide orders.

Demand in the region slowed as a result of the oil price slump and the sanctions imposed against Russia, although the business was sustained by the buoyant Czech market.

“In the first year following the introduction of the sanctions we had almost no deliveries to this region,” says Beloglazov.

Business has now recovered in the Caspian and Giga’s latest order is for a 10t single-girder bridge crane and several hoists.

Other challenges, however, remain. Beloglazov says one of the biggest is designing hoists for Kazakhstan’s harsh environment where temperatures can be as low as -40 deg C and conditions can be dusty. Columbus McKinnon is relatively new to the Caspian market but it sees huge potential. Columbus McKinnon Russia entered the Kazahkstan market last year when it designed and produced the lifting system for a car ferry terminal in the newly-developed port of Kyrik in Aktau. The port, which is expected to handle 4m tonnes of cargo a year, has been a stepping stone into Kazakhstan for Columbus McKinnon and it is now keen to further develop business in the country. “We want to promote our Pfaffsilberblau,

Yale, Tigrip and Lodestar brands to the Kazakhstan market,” says Igor Alyamskiy, managing director of Columbus McKinnon Russia.

“It’s difficult to overestimate this region for us; it’s very important.”

The company plans to develop sales through building a network of dealers, as it has done in Russia, and identifies potential sales in the metal, entertainment, railway, chemical, and oil and gas industries.

“We’re going to participate in some target exhibitions to find new dealers. Also, we’re planning to organise product training for end customers, providing a free sample to test our products,” says Alyamskiy.

He doesn’t foresee any difficulties in doing business in Kazakhstan, especially as much of the population speaks Russian, although its proximity to China could present competition from lower priced Chinese products