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The Growth Strategy of KazMunayGas

On the eve of the new year the board of directors of KazMunayGas has approved a Strategy for Development of JSC National Company KazMunayGas. The company’s strategic goal is to enter the number of the world’s 30 largest oil and gas companies by 2022. The company’s mission is defined as providing maximum profits for the Republic of Kazakhstan from development of the national oil and gas industry.

KazMunayGas

  Under this strategy, КМG plans to enhance exploration operations on land and at sea with the aim to provide the growth of hydrocarbons reserves and increase oil and gas production, to establish a flexible system of oil and gas transportation, upgrade processing capacities and the quality of refined products, as well as to establish an efficient and transparent assets management system.

In the next 10 years the activity of extractive enterprises with participation of KazMunayGas will be directed at stabilizing the level of production and the growth in annual production of crude oil and gas condensate up to 35.4 million tons compared with 21.1 million tons in 2011 due to the projects for Теngiz, Kashagan and Каrachaganak. In particular, it is supposed that oil recovery will be increased at Tengizchevroil LLP up to 38.6 million tons, mainly, through the Future Expansion Project. Thus, on the share of KMG with its 20 % interest in this project will fall 7.7 million tons of oil.

It is supposed that within the pilot commercial development, the annual production from the Kashagan field will reach 13 million tons of oil in 2015, and given a 16.81 % interest, the volume of KMG will come to 2.3 million tons. Further, taking into account the next stages of Kashagan’s development, the annual production will be increased up to 51 million tons of oil at the production peak. Besides, it should be stressed that КМG has been defined as agent on developing the Kalamkas-sea field. On Karachaganak, under consideration are the variants of Phase 3 for development that assumes annual stable production of 10.1 million tons of liquid hydrocarbons. Given a 10 % interest of the national company in the project, about 1 million tons of oil annually will fall on KMG. In addition, it is supposed the expansion of production capacities and increase in gas production from the field.

КМG plans to receive additionally up to 10.9 million tons of oil by 2022 from launching new fields: Urikhtau in the Aktyubinsk region and offshore blocks N, Zhambyl and Zhemchuzhina, and up to 13.9 million tons – from its affiliated and joint companies KazMunayGas Exploration & Production (KMG EP), Mangistaumunaigas, Каrazhanbas and others.

The growth in annual gas production will come to 1.5 billion cubic meters a year by 2022. The main gain will be provided by the consortium Karachaganak Petroleum Operating B.V. from the Karachaganak field where under Phase 3 the annual gas production will reach 27.9 billion cubic meters, and the Kashagan field, which by this time will give 800 million cubic meters of gas. Also, it is planned to increase gas production from the Amangeldy field in the Zhambyl region.

It is assumed by the strategy to increase hydrocarbons reserves up to 1.4 billion tons by 2022, mainly, at the expense of offshore projects Zhemchuzhina, North Caspian, block N, Zhambyl, Satpayev, Zhenis, Аbai and Isatai in the Kazakhstan sector of the Caspian Sea. Also, there are planned exploration activities on land. The talk is about the new exploration blocks Ustyurt, Теmir, Baiganin, Аdai, Теmir North and Kansu. On the whole, the cost of exploration program will come to about $9.5billion. КМG has completed analysis and generalisation of geological and geophysical data on the sedimentary basins in the RK, first of all, on the Pre-Caspian and Mangyshlak-Ustyurt basins.

In addition, the high-precision aeromagnetic survey of the Pre-Caspian hollow has been completed which do not have analogues on the post-Soviet territory. The next step will be formation and development of the state-of-the-art center for collecting, processing and interpretation of geological and geophysical information. Also, an emphasis will be made on introduction of technologies of reservoirs’ modelling and management; application of advanced methods for increasing oil recovery of layers; development of fields with sour gas and a high gas factor, and also deep-water fields with high environmental sensitivity. Also, the new methods for increasing oil recovery will be worked out and introduced to develop low profitable fields.

In the oil refining sector, where KazMunayGas supervises currently all three oil refineries operating in the territory of Kazakhstan, it is envisaged the transfer from simple deliveries of raw materials to cooperation in the sphere of refinery of energy resources and exchange of the newest technologies. Already now the programs for modernisation of production processes are being actively run  at the Atyrau, Pavlodar and Shymkent oil refineries.