Sauat Mynbayev,Chairman of the Board of the National Company KazMunayGas stated this spring that the oil production at the largest offshore Kashagan field is feasible only if the minimum corridor in the global prices varies from 80 to 100 dollars per barrel. Though the cracked pipeline prevent the operations, it means that given the current level of prices it would be unprofitable to produce oil.
The decline in oil prices has forced the oil companies around the world to reduce investment expenses. At the end of last year, the National Company KazMunayGas also had to revise its capital expenditure plan. As a result, the actual capital expenditure were reduced by 31% of the planned one. However, as stated by the Company, it had no effect on geological exploration projects.
Kazakhstan is reforming its subsurface resources legislation to make it consistent with international standards. This is especially important in today's world plagued by global instability, the global financial crisis and competition for investors. Last week, a task force creating a new fiscal system for subsurface resources management told what reforms it deems necessary at a conference for oil and gas lawyers held in Kazakhstan's oil capital Atyrau.
In best case, the fourth oil refinery in Kazakhstan will be established not earlier than in seven years. Though after upgrading works the existing refineries will be able to produce the items that meet Euro-4 and Euro-5 standard in the volume, exceeding the demand, Galymzhan Amanturlin believes that additional processing capacity of crude oil is needed by the country.
In January 2014, the President Nursultan Nazarbayev, in his annual Message to the Nation assign to ensure a second wave of privatization, which shall establish a new class of owners and increase the competitiveness of the national economy. In particular, the Government had been requested to undertake an analysis of all of the companies with State participation, to determine the list of enterprises to be transferred to the private sector, and to adopt a comprehensive program of privatization for the medium term.
Shocking drop in the global oil prices, which happened at the end of the last year and the beginning of this year, has seriously complicated the implementation of an ambitious project, created to support the investment image of Kazakhstan, damaged due to Kashagan issues, on the one hand, and to replenish its resources of oil and gas, on the other.
In the last year and a half, dramatically increased subsalt oil exploration has become a steady tendency in oil search in the Atyrau region. Such works are more expensive, the risks of loss are much higher, but the companies are not stopped with this. After all, the stakes are higher as well – it is these horizons, where future large discoveries are expected.
Karachaganak Petroleum Operating B.V. (KPO) announced on April 01, 2015 two seniormanagement appointments. Renato Maroli takes over from Damiano Ratti as the new KPO General Director, whilst Andrew Wiper steps in as the new Operations Director and Deputy General Director.
At the end of last year, the Kazakhstan’s Ministry of Energy signed an agreement with the NCOC and companies engaged in the North Caspian Sea PSA, which settles a number of industrial, financial and environmental issues that had accumulated over the past few years. Neither party does not disclose details of the agreement referring to its confidentiality, but it is clear that the parties are actively searching for compromise in order to begin commercial production at the offshore Kashagan field as soon as possible, where Kazakhstan pins its hopes on increase oil production in coming years.
In 2014, KPO reached a record level of 142.5 million barrels of oil equivalent in production of stabilised and unstabilised liquid hydrocarbons, gas and fuel gas. In addition, 8,817.8 million cubic meters of sour dry gas were injected into the reservoir, a volume equivalent to approximately 48.3% of the total gas produced.
Public Hearing on environmental impact assessment (EIA) of the third generation plant planned by Tengizchevroil within Future Growth Project (FGP) was carried out in Atyrau. With the launch of FGP TCO intends to increase the total volume of oil production up to 38 million tons per year.
In recent years, the geology of Kazakhstan has clearly demonstrated a systemic crisis: growth of hydrocarbons production and minerals exceeded the replacement of resources. “Once powerful state geological service turned into a bureaucratic machine, lacking the production or research organizations in its structure,”- shares Asset Issekeshev, Minister of Investment and Development of the RoK,- “Most of the private geological exploration companies (...) proved themselves as non-competitive in the real-life conditions.Some of these companies were historically supported by the Committee of Geology due to the government orders.
Maersk Oil has commissioned the first of 15 trunk lines of the new oil gathering system at the Dunga field in Mangystau Oblast, operated by Maersk Oil and in partnership with with Partex Corporation and Oman Oil Company Limited.
Specific Features of Implementing Unratified International Agreements in Oil and Gas Industry at the Example of Imashev Field#5 (89), November 2014
On September 7, 2010, the Agreement on collaboration on geological study and exploration of transboundary Imashev gas-condensate field (hereinafter - Agreement) was signed between the Government of the Republic of Kazakhstan and Russian Federation.
Maersk Oil has drilled 100 out of the 198 wells planned within the Dunga Phase II Development Project. Once completed and started up, each 1,700 m deep well is expected to produce between 25 to 50 tonnes of oil per day.
Production of oil at the Kashagan field stopped just after beginning, though Kazakhstan relied on this production for joining the top ten largest oil producing countries in the world, as early as by 2015. The Government and the shareholders of the North Caspian project are waiting for the verdict: what to do with the pipeline, extending from the wells at the artificial islands to the onshore processing complex. Even in case of the most negative scenario, the pipeline may have to be re-installed.