Yanovskaya O.A., PhD, KBTU

Nikiforova N.V., PhD, IAB. Almaty, Kazakhstan

The Kazakhstani model of company crisis management in the oil - gas sector

Methodological basis of company crisis management is the system approach. With its help between elements relations conformity for purposeful functioning and interaction with the environment in the investigated system and model is provided (Figure 1). Anti-crisis management is a flexible enterprise management, which is adaptable to changing environmental factors in the lack of information conditions about it. It can help prevent the crisis and solvency loss due to an early response to company changes. Company anti-crisis management proceeds from the state that controlled systems are complex and have unpredictable dynamics. [1]

Building company anti-crisis management system ensures the survival, stability and efficiency of its functioning in the modern market economy, thereby improving the macroeconomic situation and ensuring macroeconomic stability. Theoretical and applied research have a vital importance in such situation, the above mentioned research are aimed at developing and improving approaches and mechanisms of company anti-crisis system functioning that are adequate according to the country’s socio-economic, scientific, technological and legal environment. With well-designed and streamlined system of crisis management is supposed prediction of possible changes in the state of the environment for pre-emptive actions by the company. This is possible because this type of control is based on the prediction in the management process, based on information about current and past states of the system and their impact on the environment. It creates the conditions for the early preparation for "undesirable" situations, taking into account the positive and negative impacts, and for interfering in the event development process and the control of the latter as well. Predominance of some qualities that refer to company’s survival in the long run is typical for each model.

Models differently define factors, properties of companies as difficult organizational systems influencing the quality of their functioning and stability maintenance, controllability of organizational systems. In some approaches these qualities are developed, first of all, by within organizational structures, efforts, by leading them to an optimum condition, in other approaches the success of the company in a greater degree depends on market influences, for the others the main thing is bringing organizational and external environment to harmonious conformity.

Operating system Control system

Figure 1 – Anti-crisis management system of the company

Essential characteristics and peculiarities of Kazakhstani companies are as follows:
- Variability of individual parameters and stochastic behavior;
- The presence of limiting opportunities identified by available resources;
- The ability to change its structure and shape behavior variants;
- The ability to resist entropy trends;
- The ability to adapt to changing conditions.

The company's activities are connected with the formation of the market demand for products that can meet customers’ demands. Therefore, it should be adapted to long-term customer demand satisfaction.

Let's formulate the theoretical-practical bases of crisis simulation, which suggests the modeling methodological foundations development and also include concepts, principles and requirements for adaptive modeling implementation in practice. Key concepts of crisis simulation:

- The company - a balanced integrative set of interrelated business processes to achieve the objectives;

- Business transaction - management functions implementation of the specific subject area that are carried out at a certain control level by using a set of resources resulting in a significant outcome;

- Business process is business transactions aggregate, which implements a complete management cycle of the subject area of the enterprise. [2]

The model assumes a particular configuration of benefits and costs, incentives and disincentives that guide the behavior of market participants. “The anti-crisis model" means internally consistent system of institutional characteristics, coping mechanisms and steadily replicating forms of economic interaction, which allows the company to operate as a unit, sets the trajectory of its development, and distinguishes it from other companies. The quality of anti-crisis model is a set of properties that determine its suitability for its intended use.

Anti-crisis model should be based on a combination of appropriate systems, process-integrated, planning approaches, and ensure the company to achieve its goals in a dynamically changing environment through its crisis and organic development. It should be based on the quality management system, which guarantees service quality and efficiency of enterprise management system. In constructing the model the provisions of the quality management system should be taken into account corresponding to the requirements of ISO 9001:2000 based on the process approach to company activities and resources management.

To develop a business model based on the key business processes description for each selected business process quantitative model is informed up, and then by consolidating the information about business processes the company’s detailed quantitative description is received. The concept of modeling the enterprise based on business-process-description, the scheme of which is shown in Figure 2. The figure clearly shows a consistent logic of detail used in modeling business processes.

In the first stage the simplest model of the company is made- a functional one, gives an idea of its functions, responsibility delegation and internal relationships. The business modeling process should include business process modeling to increase the resource potential growth of the company in hydrocarbon processing and export of existing and planned pipelines connected with the restructuring to create manufacturing that enter the world markets with competitive commercial products.

The oil and gas industry of the country has achieved impressive results for the past 10 years. This was quite convincingly shown by the increase rates for all types of activity: oil production by 2.6 times, natural gas production by 2 times, the oil processing volume by 1.2 times and transportation through export pipelines to 3.3 times.

Such rapid growth of industry performance was determined by the development of significant investments that have been implemented by virtually all the world's oil companies that joined in the oil and gas business in Kazakhstan.

In the exploration and exploitation of oil deposits more than $ 40 billion have been invested, and the share of foreign companies accounted for about 80% of the total. 

The economic growth of Kazakhstan made possible corrections in the certain legislative documents in terms of content that gave considerable privilege concerning foreign investors participating in the processes of oil and gas deposits in the country, as a result the interests of the state to some extent, were infringed.
Among the most important adjustments the following can be named:

- Amendments to tax legislation, implying a tax on exports of oil, depending on the level of stock prices (2003);

- The law on pre-emptive right to purchase the state's oil assets in the secondary market (2005);

- Amendments to legislation on subsoil use that gives retroactive to the already existing oil contracts, in case the investor's action will threaten the national security of Kazakhstan (2007).

Figure 2 - Functional model of crisis management company

Figure 2 - Functional  anti - crisis model of a company

According to the changes that have occurred, currently the state is implementing a new strategy that contains the fact that, firstly, gradually to recover their assets, and secondly, to participate in every oil project with 50-percent stake, thirdly, to acquire oil and gas facilities outside the country. This trend of development is associated not only with the need to increase the potential of a national company, but with taking of preventive measures in case of crisis situations.

To date, the annual oil production in Kazakhstan has topped72 million tons. Everybody talks about it as a breakthrough in the industry. Moreover, it’s forecasted the projected increase in production to 120-150 million tons in 2011-2015 due to entering the commercial development of the Kashagan structure engagement - one of several  fields in the Kazakhstan part of Caspian Sea.

Indeed, the intensive training of new deposits of oil and gas potential carried out today by the National Oil Company "KazMunayGas" together with the world's largest companies, shows a growing ranking of the country among the world’s oil.

Thus, it should be noted the problem of oil and gas industry:
- Strategy development of oil and gas industry;
- Intensification of oil and gas search  in the Caspian region;
- Oil and gas processing plants modernization;
- Creation and development of petrochemical clusters;
- Extension of trunk gas pipelines;
- Creation of conditions of raw materials integrated development.