Oil Chronicles
Oil Chronicles. July 2024
July

July 1, QazaqGaz and Chevron Corporation, through its subsidiary Chevron Munaigas Inc., signed a cooperation agreement on geological exploration in the Zhalibek area of the Aktobe region, near the Zhanazhol and Urikhtau fields.
Negotiations and technical preparations for this project have been ongoing for the past year. In the initial phase, Chevron will reprocess existing seismic data and develop technical interpretations. Both parties view the signed agreement as a potential start of broader cooperation.
Starting July 1, oil product storage in tank farms must be equipped with mandatory control accounting devices (CADs) per the law on state regulation of production and turnover of certain types of oil products. Oil suppliers and producers have complied with this requirement since 2017, but the deadline for tank farms has been repeatedly postponed. The cost of compliance is estimated at approximately 60 bln tenge, with around 2,000 tank farms operating in the country and the price of one CAD reaching up to 30 mln tenge.
July 2, in Astana, during the visit of Chinese President Xi Jinping to Kazakhstan, KazMunayGas signed several cooperation documents with Chinese partners. Notably, a framework agreement was signed with CNPC to deepen strategic cooperation. The document outlines plans to explore opportunities for hydrocarbon processing from the Central Urikhtau field at the Zhanazhol gas processing plant owned by CNPC-Aktobemunaigas. The parties also plan to explore prospects for cooperation in oil and gas chemistry, exploration, and production in the pre-Caspian sedimentary basin.
A memorandum of understanding was signed with China Venture Capital on the processing and disposal of oil sludge produced during the operation of KMG’s oil fields using pyrolysis methods.
A protocol of participants was signed with Sinopec and SIBUR Holding regarding the Silleno project, confirming their intention to finalize the investment budget for the construction of the first integrated gas-chemical complex for polyethylene production with a capacity of 1.25 mln tons in Atyrau region.
Chinese companies operating in Kazakhstan are negotiating with the Ministry of Energy to increase the volume of oil exports to China. According to Deputy Minister of Energy Erlan Akkenzhenov, "Our Chinese colleagues are requesting increased transportation volumes. This will depend on the level of oil production. The more oil we produce, the more we will be able to export to external markets while, of course, meeting domestic demand."
CNPC currently supplies about 40% of the oil to Kazakhstan’s refineries (6.5 mln tons) at prices significantly lower than export rates, while the volume of exports to China is around 1 mln tons. The deputy minister stated that "a gradual increase in this volume is planned, with Kazakhstan also expressing interest."
Kazakhstan's Ministry of Energy has promised to submit an updated compensation plan under the OPEC+ agreement to the OPEC secretariat. The ministry assured that Kazakhstan will make every effort to meet its commitments and compensate for the overproduction in the first half of 2024.
"Kazakhstan has prepared a detailed compensation plan, according to which the overproduced volumes in the first half of the year will be compensated by September 2025. As soon as full production data from all secondary sources for June 2024 is received, an updated compensation plan will be submitted to the OPEC secretariat," the statement read.
July 11, Pavlodar Petrochemical Plant began receiving oil following scheduled preventive maintenance. The full completion of the primary oil processing unit’s maintenance is scheduled for July 16. Preventive maintenance of the equipment began on June 17. Over the month, the plant conducted a range of activities for technical inspection, revision, and industrial safety assessments of technological equipment and pipelines.
Zhomart Zhasanov stepped down as General Director of GPC Investment LLP, which is executing the project for a gas processing plant (GPP) with a capacity of 1 bln cubic meters per year to process Kashagan gas. He has held the position since March 1, 2024. One of his deputies has been appointed acting director.
QazaqGaz reported to the Kazakhstan Stock Exchange (KASE) that it has acquired a 25% stake in the private company Kashagan Gas Treatment Plant 2.5 BCMA Ltd, which will build a 2.5 bln cubic meter gas processing plant in Karabatan. It was also revealed that, in addition to participating in this project, Qatar's UCC Holding may acquire 75% of the second gas processing plant project, with a capacity of 1 bln cubic meters, which GPC Investment LLP has been implementing for several years.
The wife of one of Kazakhstan's wealthiest businessmen, co-owner of several gas station networks Daniyar Abulgazin, has renounced her Russian citizenship.
By a decree of the President of the Russian Federation dated July 11, 2024, No. 592, "On the acquisition and renunciation of Russian citizenship," the application for renunciation of Russian citizenship by Aidana Tuleutaevna Suleimenova was granted. Aidana Suleimenova is the daughter of Kazakhstan's first foreign minister, Tuleutai Suleimenov, and the wife of one of Kazakhstan's most affluent and influential businessmen, Daniyar Abulgazin. In Forbes Kazakhstan's 2024 millionaire rankings, Abulgazin ranked 21st with assets in gas station networks Qazaq Oil, SinoOil, and Gas Energy, as well as stakes in PTC Operator LLP, Petroleum LLP, RTI-ANPZ LLP, and other companies.
His wife, Aidana Suleimenova, founded the country's largest charity fund, Ayala.
The Kazakhstani government has finally settled a 13-year-long dispute with Moldovan businessmen Anatol and Gabriel Stati regarding the expropriation of their oil and gas assets in the Mangystau region.
According to the KazTAG agency, citing an informed source, "the country's leadership set a task to resolve the international dispute with Mr. Stati. This took time and numerous negotiations, but finally, both sides reached a consensus. The Republic of Kazakhstan will not spend a single tenge from the budget, which is a favorable outcome."
Anatol and Gabriel Stati filed lawsuits against Kazakhstan in 2010, accusing the country of raiding their assets, which Kazakhstan denies. In the fall of 2017, Bank of New York Mellon, the custodian bank servicing the assets of Kazakhstan's National Fund, froze $22 bln of the fund’s assets. In April 2020, Kazakhstan's Ministry of Justice reported that frozen assets had been reduced to $530 mln.

The Chinese side has not approved the project for the second line of the Beineu-Bozoi-Shymkent (BBS-2) gas pipeline, which QazaqGaz plans to build with Qatari investors.
The currently operating BBS-1 line was built as a joint venture between QazaqGaz and a CNPC subsidiary. Due to increased gas consumption in southern Kazakhstan, the pipeline is now operating beyond its nominal capacity, leading to accelerated wear and tear. This raised the issue of expanding the pipeline by constructing a second line. Over the past few years, this project has been discussed with Chinese partners, who began joint project development last year.
Without finalizing all negotiations and project work with the Chinese side, QazaqGaz initiated the signing of several documents with Qatar's UCC Holding to implement this project, which has displeased the Chinese side.
Almas Kuandykov resigned as General Director of QazaqGaz Exploration & Production.