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BackOil Сhronicles. May - September
April
From April 1 the Agency of the Republic of Kazakhstan on Regulation of Natural Monopolies approved the increase of the tariff rate and the tariff estimates on the oil pumping through the oil pipeline system regulated service, provided by JSC KazTransOil . The tariff on the oil pumping through oil pipeline system regulated service, provided by JSC KazTransOil, has been approved in the amount of: for export - T5817, 2/1000 TKM exclusive of VAT; for the domestic market-T2931, 8/1000 TKM exclusive of VAT. Earlier the tariff for oil pumping oil through the JSC KazTransOil pipeline amounted to: for export - T4850, 6/1000 TKM without VAT; for the domestic market - T2931, 8/1000 TKM exclusive of VAT.
Van Czunzhen, the formerDeputy General Director of the Economic Affairs of CNPC-Aktobemunaigas JSC, was appointedthe new General Director of the company. Xu Keqiang left this post in connection with his transfer to another job, informs the press service of the company. Van Czunzhen graduated from Southwest Petroleum Institute of the People’s Republic of China with a degree in Engineering Management, and from Xian Jiaotong Transport University with an MBA Degree. He has management experience in CNODC (CNPC Exploration and Development Cоmpany Ltd) in Beijing and in Sudan Branch. From May 2009 till the present time he held the post of Deputy General Director of JSC CNPC - Aktobemunaigas. From May 2009 onwards he worked as Deputy General Director of JSC CNPC-Aktobemunaigas.
Roman Panov, the General Director of JSC Rosgeologia, held negotiations with partnering companies during his working visit to Kazakhstan, as well as with the relevant ministries and agencies of the Republic of Kazakhstan. During the meeting with Bazarbay Nurabaev, the Chairman of the Committee of Geology and Subsoil Use MINT and Galym Nurzhanov, the Chairman of the Board of JSC Kazgeologiya, the possible cooperation of the two companies in border areas, on the shelf of the Caspian Sea, as well as the implementation of joint projects in the Central Asian countries was discussed. It was decided to create a working group between OJSC Rosgeologia and JSC Kazgeologiya to ensure regular interaction.
Kenneth Hopkins was appointed the Managing Director of the British company, Max Petroleum, operating in Kazakhstan. The company informed the Kazakhstan Stock Exchange that he will keep the post of the General Director of the company division in Kazakhstan, that he holds from May, 2013. According to the notification, Richard Huck, who held the post of General Director for Production till the present time, will remain the company’s consultant. Kenneth Hopkins has been living in Kazakhstan for 21 years, during this time, he held senior management positions in large companies, such as Oryx Energy, Orient Petroleum, Aral Petroleum Caspian and International Petroleum Ltd. Has 32 years experience in the oil and gas sector. Max Petroleum owns blocks "A" and "E" of the East Alibek contract area, as well as the Astrakhan block.
JSC Exploration Production KazMunaiGas JSC is leaving the White Bear project, informed Abat Nurseitov, the Head of JSC KMG EP: "We are leaving this project, since our hopes and estimations have not been fulfilled, the well appeared to be dry. The company, which offered this block, has already left". He added that the company is now preparing the withdrawal documents for the next Board meeting. KMG EP and BG Group signed the Agreement on joint exploration of the prospective White Bear block in the British North Sea sector in August 2010. KMG EP has received a 35% share in the BG license for this block. It was the first official project between KMG EP and BG Group in the framework of the Agreement on cooperation in the hydrocarbon exploration field, concluded in December 2008. Financial risks of KMG EP’s participation in this project, including the drilling costs and other obligations within the framework of the project, at the stage prior the hydrocarbons detection, are estimated at approximately USD25 - 30 million.
The project of Astana gasification through Kokshetau is postponed indefinitely due to the high cost, said Uzakbay Karabalin, the Minister of Oil and Gas of the RoK. "The Ministry of Economy and Budget Planning found the project (gas supply to Astana from the North of the Rok through to the KazTAG - pipeline). Given the economic situation, it was proposed to postpone this project for a while", - Karabalin said during the Government hour in Parliament. According to him, the project feasibility study was completed in 2013, and considered by the Government. The construction requires more than USD 1 billion. Alternative projects of Astana gasification are also being considered. According to his words, one of them is the liquefied gas supply fromthe future plant in Kyzylorda.
The Board of Directors of KMG EP has elected Dastan Abdulgafarov, the Managing Director of Business Development, to the Board of Directors of the company. This change was initiated due to the fact that, in accordance with the company strategy, strategic planning, corporate development, investment analysis, and mergers and acquisitions projects are among the top priorities for KMG EP. The list of the Board members, as of April 8, 2014, includes: A. Nurseitov - General Director General; K. Eleusinov - Deputy General Director of Production; B. Fraser - Financial Director and Controller; M. Saulebaj - Chief of Staff; B. Ashirbekova - Managing Director of Staff Administration and Development; D. Abdulgafarov - Managing Director of Business Development.
Lukoil sells 50% stake in Caspian Investment Resources to the Chinese Sinopec Engineering, the company statement says. As stated, the transaction is valued at USD 1.2 billion, but the price may be adjusted by the moment of its completion. The purpose of the deal, according to Lukoil information, is the optimisation of hydrocarbon assets foreign portfolio. "We continue to operate in Kazakhstan and are interested in increasing our investments in the country. The company intends to redirect the funds to the exploration field projects, including the projects in the Kazakhstan sector of the Caspian Sea. In addition, it is planned that the company will announce the project development tender for the lubricating materials plant construction in the Almaty area", the statement cites the words of B. Alekperov, its Head. It is indicateted that the transaction completion will require a number of preconditions to be fulfilled. In particular, it is necessary to obtain approval from the Kazakhstan State bodies. The full transaction closure is expected by the end of 2014.
"Until the end of 2006, Lukoil was the sole owner of the Caspian Investment Resources Ltd., then 50% share of the company was sold to Mittal Investments Fund for USD 980 million”, is reported in the publication. Caspian Investment Resources Ltd., through a number of joint ventures, owns various stakes in oil projects at Alibekmola, Kozhasai, Northern Buzachi, Karakuduk and Armand (Aktobe and Mangistau regions of Kazakhstan) fields.
On April 14 NC KazMunaiGas, Korean COP Kazakh Consortium B.V. and the Ministry of Oil and Gas of the Republic of Kazakhstan signed the Supplement №5 to the Contract № 2609 on exploration of hydrocarbons at Zhambyl, located in the Kazakhan sector of the Caspian Sea, dated April 21, 2008. The subsoil user filed the request for the extension of the exploration contract at Zhambyl to the competent authority in August 2013. The contract validity was extended for two years for the project participants - till April 21, 2016. KMG owns 73% share in the Zhambyl project, while the Korean Consortium KC Kazakh B.V. - 27%.
O n April 17 the situation at the Kashagan field was discussed behind closed doors with the participation of Consortium participants and the Government of Kazakhstan. According to a source of the KazTAG Agency, there were no concrete decisions taken at the meeting in the Government. The issues discussed concerned the field operations. Investors talked about risks and that this year, probably, there is no reason to expect the resumption of oil production. Although there is some certainty in the terms of the ground pipeline, there is still need to conduct research of its maritime part after ice cover clearance. This requires time and funding, hence, the project participants have undertaken to submit detailed plans by the end of May, the source says.
After appearing of the information in the Media on involvement of ERSAI Caspian Contractor LLP in the gas leak problems at the Kashagan field, the company has made an official statement that: ECC has not entered into any contracts on the pipes supply for the Kashagan field pipeline; ECC has not conducted any pipeline welding and laying works at the Kashagan field; ECC is not a founder of the Italian company Saipem.
The Consortium North Caspian Operating Company, which is developing the Kashagan oil field, came to the general conclusion that the pipelines, delivering oil and gas from the offshore wells, need replacing. NCOC is expecting the final report on the causes of leakage in the pipelines, that is due in June. The Consortium will then decide on how to replace the pipes, informs the specialized English-language edition of OilPrice.
On April 25 Kazakhstan proposed the joint development of the offshore oil block Abai to India at the bilateral meeting in the Ministry of Oil and Gas of the RoK. This was announced during the meeting of the Kazakh-Indian Intergovernmental Commission.
On April 29NC KazMunaiGas announced the adoption of a large transaction decision by the Board of Directors. According to the decree of JSC NC KazMunaiGas Board of Directors, the decision was adopted on entering into the contract on KMG'S withdrawal from the shareholding structure of KMG Kashagan B.V. PLLC in the amount of 25 or more per cent of all NC KazMunaiGas JSC assets - it is a major transaction, in which the Company is interested -the Agreement on contribution and transfer of shares of capital owned by KMG Kashagan B.V. PLLC between KMG, Cooperatieve KazMunaiGas U.A. and KMG Kashagan B.V. PLLC. It should be noted that Cooperative KazMunaiGas U.A. is a wholly owned subsidiary of KMG, at that, after the transfer of shares of KMG Kashagan B.V. PLLC to Cooperative KazMunaiGas U.A., KMG retains the control over KMG Kashagan B.V. PLLC activities.
Transfer of shares of KMG Kashagan B.V. PLLC to Cooperatieve KazMunaiGas U.A. is effected within the framework of the approved NC KazMunaiGas core assets restructuring program, aimed, inter alia, at the company asset structure optimization.
May
On May 5, the President of Kazakhstan N. Nazarbayev, speaking at the opening of the 47th annual meeting of the Asian Development Bank, said that a new law will be adopted this year in Kazakhstan within the framework of investment legislation improvement. According to the Head of State, it is planned to grant the investors a corporate income tax remission for 10 years, introduce the investment subsidies, ensure the stability and predictability of tariffs, facilitate the expat workforce importation. “Working with investors will be carried out according to the “single-window” system. In addition, the Investment Ombudsman Institution will be created. We will also aim at the economic growth and increase Human Capital investments”, - he added.
Dastan B. Kozhabekov was appointed as the General Director of the "Kazakh Institute of Oil and Gas” JSC by decision of “National Company “KazMunaiGas” JSC. Dastan Kozhabekov started his career in 1991 in the Kazakhstani branch of all-Union Institute "Central research institute of Project Steel Structures" named after N. P. Melnikov as an engineer-designer. 1995 - Co-founder, Member of the Board of Directors of the Group of Companies "Tamos Education" LLP. 1997 - Deputy Director of the Eastern branch of “KazTransOil” CJSC. 1998 - Chief of Administration of “Kazakhoil” NOC. 1999 - Chief of Personnel Policy Department of “KazTransOil” CJSC. 2001 - Director of Scientific Technical Center “KazTransOil” JSC. 2003 - Vice President of "Kazakh Institute of Oil and Gas” JSC. 2006 - Director General of oil and gas machinery manufacturing and service company “KazPetroMac”. Since 2008 - Deputy General Director of "Kazakh Institute of Oil and Gas" JSC.
The company Maersk Oil drilled 100 of 198 holes, planned within the framework of the 2nd phase of Dunga oil field development project phase located 50 km northwest of Aktau. The company experts believe that after operation starts, the production rate of each of the new wells, the total depth of which is 1700 m, will amount to 25 to 50 tons of oil per day.
Exploration Production KazMunaiGas JSC (EP KMG) has announced the discovery of new fields at the Rozhkovskoe, as informed the press-center of the company. Thus, according to the company, getting the natural flowing from the new accumulation in the Bashkir sediment gives the chance to increase the reserves of Rozhkovskoe field. Quantitative assessment of stocks growth will be determined based on the results of further exploration. According to the ongoing technological stockpiles audits under international standards, the stocks of liquid hydrocarbons of category 2P of EP KMG at the Rozhkovskoe has grown from 5.4 million tonnes in 2012 to 7.9 million tonnes in 2013. It is planned to put Rozhkovskoye field into operation in 2017. Exploration work at the field are carried out by the company Ural Group Limited (UGL), which owns 100% of shares of Ural Oil and Gas LLP (UOG), which has the right of subsoil use for exploration of hydrocarbons in Fedorovskoye block. The block is located in the Zelenovskiy district in West Kazakhstan province, 70 kilometres east of Uralsk. In 2011, KMG EP entered into an agreement on the acquisition of 50% stake in the UGL with the Exploration Venture Limited (EVL).
The IndoxSamruk Kazakhstan industrial complex construction contract was signed in Aktau. The company will be located in the territory of the free economic zone “Aktau Seaport"and will be focused on the creation of petroleum products, liquefied and compressed gases equipment. "IndoxSamruk Kazakhstan" is a joint project of Samruk-Kazyna invest and Indox Cry Energy Overseas Ltd (Spain).