Oil Chronicles
Oil Chronicles
October 2012
EP KMG informed “about signing of a supplement to the following contracts: No.37 oilfield Kenbay; No.61 oilfield South-East Novobogatinskoye; No.211 oilfield Botakhan, Makat, Dossor, Tanatar, Kamyshitovoye and etc. - totally 23 oilfields; No.413 oilfield Prorva, Kulsary, Karaton, Koschagyl and etc. - totally 15 oilfields; No.327 oilfield Taysogan; No.992 oilfield Novobogatinskoye Western”. According to the document this supplement was concluded between the Ministry of oil and gas of the RK, JSC EP KazMunayGas and JSC Embamunaygas. “The main objective of this supplement is ensuring JSC Embamunaygas from October 2012 with the subsoil use right on these oilfields that are located in Atyrau oblast. Production of oil on these oilfields is the main source of income of JSC Embamunaygas, - is noted in the press release. According to information of EP KMG, “independent operations on subsoil use will allow JSC Embamunaygas to make decisions operatively during the production and economic activity, will ensure liability of the company’s management as well as transparency and meeting modern requirements of a corporate management”. JSC Embamunaygas is 100% subsidiary company of JSC Exploration Production KazMunayGas.
On the 2nd of October the minister of oil and gas of Kazakhstan Sauat Mynbayev informed that ConocoPhillips is intending to sell its share in the international consortium - the operator in the development of Kashagan, one of the largest oilfields in the world. In the project 8,4% belongs to ConocoPhillips, KazMunayGas, Italian Eni, French Total, American ExxonMobil and English-Dutch Shell possess by 16,81%, 7,56% belongs to Japanese Inpex. Proved oil reserves on Kashagan make up 761,1 mln.tons. “They intend to sell, and who will be the buyer?” First of all the state has the right of first refusal, the so-called priority right of acquisition, - Reuters quoted the words of Mr. Mynbayev, - there is a priority right of purchase from the rest operating shareholders. If someone is willing to buy, probably, they will buy”. KMG has already announced of its readiness to buy out the share of ConocoPhillips. To the question of a journalist, whether this proposal is interesting to KMG, the head of the national company Lyazzat Kiinov answered: “It is interesting for us”. In recent years ConocoPhillips has notably reduced it presence in CIS countries, first of all in Russia: the company left the capital of LUKOIL, the strategic partner of which it was since 2004. The major part of the shares portfolio of LUKOIL (20%) was bought out by LUKOIL itself.
“Proved oil reserves in Kazakhstan make up 3,9 trillion cubic meters, - the minister of oil and gas of the RK Sauat Mynbayev informed journalists. - It is 1,9 % of world reserves”. He mentioned that gas in Kazakhstan is mainly associated oil. “It means that for the rational subsoil use and more complete extraction of liquids, the considerable part of the produced gas is injected back to the formation. As a result, in spite of a significant growth of crude gas production, production of the tank gas within the considered period till 2030 is not so substantial”, - the minister said. According to his words the main volumes of the tank gas production in the RK are extracted after this term. “The priority for us is the internal market. The system of internal gas-main pipelines, inlcuding gas-pipelines “Beyneu-Bozoy-Shymkent”, “Tobol-Kokshetau-Astana” is oriented on the growth of internal supplies. Annually, the republican budget provides for funds for regional gas pipelines,” - Mynbayev said.
The Chairman of the board of directors of JSC NC KazMunayGas is elected the minister of oil and gas Sauat Mynbayev, this is indicated in the abstract of the minutes of the meeting in presentia of the management of the Sovereign Wealth Fund “Samruk-Kazyna”, published on the site of the Kazakhstan stock exchange. “To elect (appoint) Mynbayev Sauat Mukhametbayevich the chairman of the board of directors of NC JSC KazMunayGas”, - is said in the minutes. According to the document the management of the fund decided to terminate the powers of the chairman of KMG board of directors Umirzak Shukeyev. Also in the document it is reported that the management board of the fund decided to elect Nurlan Rakhmetov the member of the board of directors “subject to getting consent of the board of directors of JSC Samruk-Kazyna for holding this office”.
By the decision of the board of directors of JSC NC KazMunayGas dated 19th of October 2012 (minutes No.8/2012) the number of the board of director of JSC KazTransOil was increased up to six persons. According to the information of the press office, Kassymbek Ardak Maukhmuduly was elected as the representative of interests of JSC NC KazMunayGas as the shareholder of JSC KazTransOil into the board of directors of JSC KazTransOil. This decision is the decision of the sole shareholder of JSC KazTransOil. Ardak Kassymbek is currently in the position of the deputy chairman of the JSC NC KazMunayGas management board in charge of economics and finance. KazTransOil is the first company, which will come to «People’s IPO».
On the 19th of October the board of directors of JSC NC KazMunayGas made the decision to change the location of its subsidiary JSC MNK KazMunayTeniz. Relocation of KMT in Aktau is directed at increasing the efficiency of the management system of sea projects in the Kazakhstan sector of the Caspian Sea, and is also stipulated by the necessity to optimize the activity and the management structure of KMG.
On the 23rd of October the president of OJSC Pozneft Igor Sechin during the call conference stated that the company examines the expediency of its participation in the shareholders’ capital of the Caspian pipeline consortium (CPC). Answering the question about the program of realization of non-profile assets of the company, the head of Rosneft noted that the company is preparing «the plan on realization of non-profile assets». However Sechin did not voice the list of companies, which are to be sold as non-profile, «as it may decrease their cost». In this regard the head of Rosneft mentioned the CPC, which he named «not so profile asset». «Now we are examining, whether Rosneft needs the share in the CPC», – I. Sechin explained. From the other hand, the head of Rosneft added, if the company enters Kazakhstan projects, then the CPC may become for it «more efficient, even though not so profile asset». Rosneft controls 3,83% in the CPC though Rosneft-Shell Caspian Ventures Limited, to which 7,5% belongs.
The deputy minister of natural resources and ecology of the RF Denis Khramov and the vice-minister of oil and gas of Kazakhstan Bolat Akchulakov signed the minutes on realization of the intergovernmental Russian-Kazakhstani agreement on a joint activity on a geological survey and exploration of the transborder gas-condensate field Imashevskoye. The document was signed at the first meeting of the coordinating committee for realization of the agreement. At the meeting the parties also discussed regulatory and technical aspects of the document execution and other issues. According to the words of D. Khramov, «realization of this agreement will allow to prepare the field for development, clarify reserves of minerals on this area of subsoil». Participants of negotiations noted that realization of this agreement will be an incentive to develop cooperation of two countries on a joint development of the field, exchange of the geological information, monitoring of the environment in the area of geological exploratory works. The Parties have agreed to hold the next meeting in 2013. The gas-condensate field Imashevskoye is located in Kurmangazinskoye region of Atyrau oblast 250 km to the south-west from Atyrau and 60 km to the east-north-east from Astrakhan.
November 2012
On the 2nd of November in the central office of OJSC Gazprom there was a working meeting of the chairman of the management board of OJSC Gazprom Alexey Miller and the minister of oil and gas of the RK Sauat Mynbayev. The Parties discussed a wide range of issues of the Russian-Kazakhstani cooperation in the oil and gas sphere. A special attention was paid to the issues of supply of the natural gas to the RK consumers. Explored reserves of the natural gas of the Republic of Kazakhstan make up about 3,3 trln. cubic meters. According to the estimation, forecasted resources of the natural gas including the shelf of the Caspian Sea make up about 8 trln. cubic meters. The main directions of the bilateral cooperation between OJSC Gazprom and economic entities of Kazakhstan are: raw material processing of Karachaganak gas-condensate field on Orenburg GPP; rendering to OJSC Gazprom enterprises the services of transit of the Kazakhstani gas through the territory of Russia to consumers of CIS countries; supply of the Russian natural gas to consumers of Kostanay oblast of Kazakhstan;organization of transit of the Central-Asian gas on the territory of Kazakhstan. LLP KazRosGaz is a joint venture of OJSC Gazprom and JSC NC KazMunayGas, which was created on a parity basis. The main direction of the JV activity is purchase, marketing, processing, transportation and sales of the natural gas and products of its processing on internal and external markets.
On the 13th of November JSC KazTransOil became a national operator of the main oil pipeline, the press office of the company informed. In accordance with the decree of the government, «the activity of the national operator is aimed at development of the main oil pipelines system in the Republic of Kazakhstan and ensuring its efficient, reliable and safe operation», – is indicated in the report of KazTransOil. It is noted that the main tasks of the national operator on the main oil pipeline are: ensuring interests of the RK and other participants of relations during transportation of the products by main oil pipelines to internal and external markets; ensuring the innovative development of the main oil pipelines system and its integration into the world energy system; participation in the development and fulfillment of state and national programs of development of the oil and gas sector in the part of transportation of oil by main oil pipelines.
«The national operator possesses the right to render on the territory of the RK operator’s services on the main oil pipeline, fifty and more per cent of the voting shares (shares of participation) of the owner of which directly or indirectly belong to the state, the national managing holding or national company», – is added in the press office. Besides the company possesses the right to render services on organization of the transportation of oil on the pipeline system of other states, which is transported from the territory of the RK on the main oil pipeline, which belongs on the right of ownership or other legal basis to the national operator.
The French oil and gas company Total acquired 75-per cent share in two concessions on development of Northern and Southern blocks in the south-western part of Kazakhstan, where earlier the operator was the Kazakhstan Company Nurmunai Petrogas, the French company reported. Two blocks take the area about 14,5 thous. sq. km. The French company notes that the transaction, which was earlier approved by authorities of Kazakhstan, enlarges its portfolio in the segment of production. As a new operator of licenses Total intends to drill the first well in 2013. «Acquisition of shares in two concessions of the company Nurmunai Petrogas corresponds our strategy in the segment of exploration, and strengthens our presence in Kazakhstan», – the vice-president of the company on exploration and production Ive-Lui Derikarrer noted. Total operates in Kazakhstan since 1992.
On the 16th of November the chairman of the association «KAZENERGY» Timur Kulibayev introduced to the personnel of the association a new general director Asset Magauov. «Earlier, holding the office of a general director, Dzhambulat Sarsenov is appointed the deputy chairman of the association «KAZENERGY», – is said in the report of the association. Magauov Asset Maratovich was born on the 28th of November 1972 in the village Kulsary of Atyrau oblast. After graduation in 1994 of the State academy of oil and gas named after Gubkin he starts to work as the economist, and then as the deputy chief of the department of JSC Tengizmunaygas. He was the deputy general director of LLP Tengizchevroil, managed service projects in sectoral companies of the country, held the office of the managing director of JSC NC KazMunayGas, from 2009 to 2011 he was appointed the vice-minister of energy and mineral resources of the Ministry of oil and gas of the RK. From 2011 to 2012 he was the general director of JSC Mangistaumunaygas.
On the 18th of November MOL Hungarian Oil and Gas Plc. closed the transaction on purchase from Exploration Production KazMunayGaz (EP KMG) 49% of the share in the Kazakhstan block «Karpovskiy Severniy», as indicated in the report of the Hungarian company. «MOL Group announces that yesterday successfully closed the earlier announced transaction with EP KMG on purchase of 49% in JSC Karpovskiy Severniy, by the owner of the exploration license for the oil block Karpovskiy Severniy in Kazakhstan», – is said in the press release. Signing the agreement on the purchase of a share was announced on the 19th of July 2012, and from that moment the companies were expecting approvals of the ministry of oil and gas of the RK as well as of the anti-monopoly institution of the European Union. JSC Karpovskiy Severniy possesses the right of subsoil use under the contract for exploration of oil, gas and condensate on the similarly-named area in West-Kazakhstan oblast. As a result of this transaction a joint venture between EP KMG and MOL will be established for further geological exploratory works on the block «Karpovskiy Severniy ». «This transaction will give EP KMG an opportunity to share risks and financial obligations with MOL under this license. Also it is possible to achieve an operational synergy with the neighboring located Fedorovskiy block, the share of participation in which belongs to EP KMG for 50% and MOL – for 27,5%. In 2008 a significant gas-condensate field was discovered on Fedorovskoye block, the operator of the consortium is MOL», – EP KMG says. The block «Karpovskiy Severniy » is located 40 km to the north-west from Uralsk, in close vicinity to Fedorovskiy block and other existing fields, on the external board of the Caspian Lowland.
LLP Tengizchevroil, which develops Tengiz oilfield in Atyrau oblast, is acknowledged as a world leader in the issue of reducing of burning the associated gas on flares. As the press office of the producing company reported, this was announced on the global forum on reduction of burning the associated gas, which took place in London. Since 2000 the company reduced emissions from burning of the associated gas for more than 94%, simultaneously increasing in this period the production of a crude oil for 147%. «Owing to the support of our partners and the government of the Republic of Kazakhstan, TCO managed to complete the gas utilization project successfully, which is a part of our general program of investments into the environment protection. For the project implementation TCO spent more than $2,2 mlrd., beginning from 2000», – the general director of the company Tim Miller declared.
On Atyrau refinery, where the former general director Talgat Baitaziyev quitted upon his own wish, NC KazMunayGaz on its behalf expressed gratitude to him for the work done, is reported in the press office of the enterprise. Baitaziyev worked in the position of the general director of Atyrau refinery from 2004. A new chief of the enterprise is appointed Arman Kairdenov.
On the 21st of November the akim of East-Kazakhstan oblast Berdybek Saparbayev reported that Kazakhstan and China signed the agreement of division of reserves of Sarybulak gas field in Zaisan region EKO. «The gas pipeline to the border with China is constructed, the agreement of division of the gas 50 for 50 is signed, it means half of the gas will be left in the oblast», – Saparbayev said on the press conference. According to the words of the akim, the reserves for 5 mlrd. of cubic meters of the natural gas are confirmed on Sarybulak field. Meanwhile as the akim noted currently the development of the project for gasification of 9 settlements of the region with the total population 20 thous. persons started. As it was informed, during the exploratory works in Zaisan region of Eat Kazakhstan LLP Tarbagatay Munay confirmed the gas reserves for 5 mlrd. cubic meters. Whereas by 2014 it is planned to make a balance on 50 wells, the forecasted reserves may make up to 50 mlrd. cubic meters.
American ConocoPhillips announced to the authorities of Kazakhstan and its partners on the project of development of the oilfield Kashagan that it plans to sell the 8,4%-th share in the Agreement of division of the products on the Northern Caspian (ADPNC) to the Indian ONGC Videsh Limited, as said in the report of ConocoPhillips. ONGC Videsh (international subdivision of the Indian state Oil and Natural Gas Corporation) will acquire the share of ConocoPhillips in Kashagan project provided that it would get all required permissions of the Kazakhstan authorities, and also subject to refusal of the republic and partners under the ADPNC from execution of priority rights of buy-out. The American corporation expects that the transaction will be completed in the first half of 2013. The company has in view to get from the sale about $5 mlrd., including the transaction price plus a number of corrections.
December 2012
The management board of JSC KazMunayGas is enlarged up to 10 persons; it is indicated in the extract from the protocol of the meeting of the board of directors of the company. «To elect the members of the management board of JSC NC KazMunayGas for a term of office, which is established in whole for the management board of JSC NC KazMunayGas, the following employees of KMG: Bimagambetov Timur Mustakhimovich, Iskaziyev Kurmangazy Oryngaziyevich, Kassymbek Ardak Makhmuduly, Shukputov Andar Mauleshevich», – it is said in the document, published on the website of the Kazakhstan stock exchange. According to the information, the management board of KMG is determined in the amount of 10 persons.
A new general director of the company Batumi Industrial Holdings Ltd. is appointed Talgat Baitaziyev. Baitaziyev till December 2012 held the position of the general director of LLP Atyrau refinery, wherefrom he quitted upon his own wish. Batumi Industrial Holdings Ltd is a 100% subsidiary enterprise of JSC KazTransOil. Batum oil terminal and Batum sea port enter the structure of Batumi Industrial Holdings Ltd.
On the 20th of December the contract came into effect, which was signed in the end of the last year by LLP Atyrau refinery for the turnkey construction of the complex of a deep processing of oil with the consortium (Chinese company Sinopec Engineering, Japanese Marubeni Corporation and JSC KazStroyService. Atyrau refinery fulfilled, under the contract, the conditions on pay-out of the advance payment to the contractor. The cost of the project is $1 mlrd. 679 mln. 892 thous. 520. The term of implementation is 41 months. This complex is designed for processing of 2,4 mln. tonnes of raw materials (masut, vacuum gasoil) per year. The CDPO will allow increasing the production of a high-octane petroleum, aviation and diesel fuel. As it is noted in the report, the construction of the CDPO will allow increasing sharply the depth of oil processing up to 85% and producing motor fuels, which conform to the requirements of «Euro-5».
Kazakhstani KazMunayGas plans to acquire 50% in the charter capital, created in Russia Oil gas company JSC Central. The other 50% will be divided between Russian companies: LUKOIL and Gazprom. Izvestiya reports about this, referring to the source in the Russian government. It is clarified that this transaction is aimed at the fact that KMG would join Russian LUKOIL and Gazprom, and within the framework of the joint venture the companies would develop the oilfield Central on the shelf Caspian. As the publication reports, KMG has already addressed FAS of Russia for the approval of the transaction on acquisition of a share in the JV.
January, 2013
The tariff for transitof the Kazakhstan oil through the territory of the Russian Federation via pipelines of JSC Transneft is raised to 7% from January 1, 2013.
NC KazMunaiGasreceived a favourable conclusion of the state expertise for feasibility study of “Gas Processing Plant in the West-Kazakhstan Oblast” Project, realized by KMG jointly with the Italian Company Eni under the Cooperation agreement, signed on November 5, 2009. Project management is exercised by Direction of enterprises under construction-KMG LLP, which is 100% branch organization of KazMunaiGaz JSC. Eni carries out the financing of the feasibility study. The following stage is the development of design and estimate documentation, which is planned for 2013-2014 and shall be carried out with the participation of Kazakhstan engineering companies. Their selection will be completed till the end of January, 2013. The GPP with processing capacity of 5 billion cubic meters in a year will process the sulphurous passing hydrocarbon gas, produced in the Karachaganak Field. The main objective of the GPP construction project is the conditioned natural gas production for the Kazakhstan consumers and increase the reliability level of gas supply from the Kazakhstan sources. The project will also provide the conditioned natural gas supply to the Northern and Central regions of RK, including Astana, and possibility of sale gas in the foreign market. The planned period for the first stage of GPP construction is 2014-2019 and for the second stage - 2021-2023.
The oil and gas companyRoxi Petroleum PLC, actively working in Kazakhstan, reported that it plans to engage $40 million by the new shares issue. The Kazakhstan businessman, ex-chairman of Halyk Bank and ATF Bank Kayrat Satylganov shall become the main investor of the Company. It is noted in the Company’s message that the Kazakhstan investor intends to subscribe for 355,165,716 new shares of Roxi with a approximate price about 7 pence per share. However these shares have a substantial premium to the closing price up to 2.125 pence per a share as of January 7, 2013, according to the data of OilVoice. The total transaction amount is estimated at $40 million. Roxi plans to direct proceeds on the financing of the projects, where the involved funds will allow drilling three deep wells and two shallow wells in 2013. Within the signed agreement it is supposed that the investor will be included in Roxi’s Board of Directors.
The Kazakhstan Stock Exchangestated that JSC “OGCC KazStroyService” concluded an additional agreement with the its subsidiary company KazStroyService Infrastructure India Private Limited on the construction of the Dabhol-Bangalore gas pipeline in India. The agreement provides the work performance for the project of Dabkhol-Bangalore pipeline laying and terminal construction for the Indian state corporation GAIL (India) Limited, which has signed a 20-year agreement of liquefied natural gas sale and purchase with Gazprom’s subsidiary company this November.
The net value is worth a bargain item and makes $5 million. According to the Stock Exchange, the percentage cost of this property to the total cost of company assets is 0.6%.
On January, 18 thePrime Minister Serik Akhmetov presented a new Akim of Mangystau Oblast. The Press Service of the Prime Minister reported this fact.
The extraordinary session of the regional maslikhat was held in Aktau. The Head of Government Serik Akhmetov and the Head of Presidential Administration Karim Massimov participated in this session. During the session Akhmetov read a letter for the nomination of the former Head of KMG EP Alik Aydarbayev as the Akim of Oblast from the Head of State to deputies. The deputies unanimously supported the nomination, offered by the President.
The note of the Russian companyreports that NC KazMunaiGas JSC, Production Association Belorusneft and JSC Zarubezhneft agreed on cooperation under the Project “Soyuznefteotdacha”. “With the aim to develop and introduce the advanced technologies to increase of reservoir recovery and intensification of hydrocarbon production of the fields in Russia, Kazakhstan, Belarus and other countries the state companies JSC Zarubezhneft, NC KazMunaiGas JSC and Production Association Belorusneft decided to enter into cooperation within Soyuznefteotdacha Project”, – it is noted in the press-release. According to the information, the project aim is to consolidate the scientific and production capacities of three companies for promotion of the works in this sphere. In December, 2012, the joint working group from the representatives of Zarubezhneft, KMG and Belorusneft was created for the arrangement reached implementation. The first meeting of the working group was held at the office of Russian company on January 22, 2013. At this meeting the parties discussed organizational and legal issues of cooperation and coordinated the plan of priority actions.
On the 23th of JanuaryKazMunaiGas Exploration Production JSC reported that Abat Nurseitov, who was earlier holding a position of the Deputy of General Operational Director, was elected as the Director General (Chairman of the Board) of EP KMG by the decision of the Board of Directors. He iss released from the duty Alik Aydarbayev, who abnegated powers because he was appointed as the Akim of Mangystau Oblast.
On the 25th of January the transaction on purchase of 100% of shares of N Block B.V. Company between NC KazMunaiGas JSC and the ConocoPhillips Petroleum Holdings B.V Company was completed. As a result of this transaction KMG owns 75.5% of the mineral rights in the Project “N” and 75.5% of equity shares in Operating Company “N” LLP. According to the signed contract on mineral rights for the Project “N”, the project participants are KMG with 75.5% of shares and MDK (Oil & Gas N Blok Kazakhstan) GmbH with 24.5%.
Bruno Jardin was appointedas the Managing Director of ExxonMobil Kazakhstan Inc. Bruno Jardin held the position of Senior Project Manager in ExxonMobil Development Company since October, 2010. He was responsible for the North Caspian Sea Production Sharing Agreement. Before his appointment he worked as the Project Manager under the direction of other companies as a part of the Main Project Group in ExxonMobil Production Company. For 30 years Jardin held different positions in ESSO company branch in his homeland – France, and also in some other international branches of ExxonMobil Incorporation in the fields of exploration, production, oil refining and oil product sales.
February 2013