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Oil Сhronicles. January - April
January, 2014
For violation of the Energy Charter Treaty and “deprivation of the oil business» caused to the Moldovan businessman Anatol Stati, the owner of an offshore company Tristan Oil Ltd., International Court of Arbitration awarded Kazakhstan to pay $ 1.5 billion. This was announced in a press release published on the website of Tristan Oil Ltd. The arbitration case was considered in the Chamber of Commerce in Stockholm (Sweden) at the lawsuit filed by the founders of Kazpolumnay LLP and Tolkynneftegas LLP (former subsoil users), that was developing two fields in the Mangystau region: Tolkyn and Borankol, as well as constructing the Borankol GPP in the Beyneu district. According to Tristan Oil Ltd., investments in these projects amounted to $989.6 million. After the dissolution of the subsoil use contract with Tolkynneftegas LLP by the Ministry of Oil and Gas of the Republic of Kazakhstan, unfinished GPP projects were distrained by the Working Group, established in accordance with the order of the Ministry of Oil and Gas as of August 6, 2010. Incomplete construction projects of gas processing plants do not form part of facilities that ensure the continuity of the technological process and industrial safety at the Tolkyn and Borankol fields, and are not assigned for temporary possession and use to the beneficial owner - JSC NC KazMunayGas. Production of hydrocarbons at the mentioned fields is carried out by the branch of JSC - JSC OOC KazMunayTeniz.
JV Kazpolmunay LLP owned 15 oil producing and 9 gas wells at the Borankol. Daily oil production amounted to more than 550 tons, gas - more than 1 million cubic meters. JV Kazpolmunay had a license issued by the Government of the Republic of Kazakhstan as of May 23, 1997, which granted the right to conduct petroleum operations for the exploration and production of hydrocarbons at the Borankol field. The field depletion period was determined to be 25 years. Kazpolmunay LLP started works at Borankol in 1999. JV Tolkynneftegas had a license issued by the Government of the Republic of Kazakhstan from December 4, 1997, which gave the right to conduct petroleum operations for the exploration and production of hydrocarbons at the gas condensate Tolkyn field. Tolkynneftegas LLP started works at the Tolkyn field in 2000.
According to the notice of Tristan Oil company, the Court judgement states that Kazakhstan “violated international obligations to investors” in the Tristan Oil case. Tristan Oil reported that the Court's decision is final and not subject to appeal.
95% stake in the Kazakh oil company JSC Maten Petroleum will be sold to a Dutch subsidiary of the Chinese company Hainan Zhenghe Industrial Group Co Ltd. The national company JSC KazMunayGas had the purchase option, but the company did not exercise it. According to Chinese media, Dutch Energy Group B.V., a subsidiary of Hainan Zhenghe Industrial Group Co. Ltd. acquires a share in Maten petroleum. The deal will amount to $525.8 million. As of today, the shareholders of JSC Maten Petroleum are Dinmukhamet Idrisov (52% of shares), Bakharidin Ablazimov (30% of shares) and Erzhan Dostybaev (18% of shares). It is not yet decided who will own the remaining 5% of the shares after the transaction. JSC Maten Petroleum holds and controls the following oil assets: license for production (crude oil) at the Kara-Arna oil field, valid until February 19, 2023; the license for exploration and production (crude oil) at the East Kokarna oil field, valid until January 1, 2028, and the license for production (crude oil) at the Matin oil field, valid until October 13, 2020. All oil fields are located in Atyrau region.
Max Petroleum Plc - a British company , specializing in exploration and production of oil and gas in Kazakhstan, has completed the drilling of appraisal well at West Sagiz SAGZ-11 the total vertical depth of which is 1.429 m. According to the statement, the company did not detect sufficient volumes of extracted hydrocarbons in this hole and adopted a decision on its liquidation
Drill unit ZJ-30 will be moved for drilling SAGZ-10 well, one of the three remaining of the appraisal well drilling program at Sagiz West. As previously reported, Max Petroleum owns blocks "A" and "E" of the East Alibek contract area, as well as the Astrakhan block.
JSC KazMunayGas Exploration Production (KMG EP, belongs to the Group of companies KazMunayGas) has completed the drilling of three subsalt wells (U-11, U-26 and U-24) at the Rozhkovskoe on the Fedorovsky block. During the U-11 well testing, a gas influx at the level of 156 thous. cubic meters per day was received, as well as condensate - at the level of 152 cubic meters per day. During the U-26 well testing, a gas influx at the level of 239 thous. cubic meters per day was received, as well as condensate - at the level of 247 cubic meters per day. The third well testing is planned in the first half of the year 2014. JSC NIPINeftegaz has prepared a report on the reserves of the Rozhkovskoe field based on the results of exploration activities from 2010. At present, the report is being considered by the State Committee for Mineral Reserves of the RoK. It is expected that the company will have approved annual report in the first quarter of 2014. It is recalled in the notice that starting from 2003, exploration works on the Fedorovsky block were performed on 10 exploratory wells, of which 8 were successful, 1 borehole expects testing and 1 was dry.
On January 20, in the Central Office of KazRosGas LLP the new Director General (Chairman of the Board of Directors) Baizakov Aibek Sabitovich was presented to the team. The decision was taken by the participants of KazRosGas LLP (JSC NC KazMunayGas and OJSC Gazprom). The newly elected Director General was introduced to the team by Serik Sultangali, Director General of JSC KazTransGas, Deputy Chairman of the Management Board of gas transportation and gas marketing of JSC NC KazMunayGas. Aybek Sabitovich Bayzakov served as Deputy General Director (Board Member) for gas marketing from November 2012. He released from the office of Director General Kayrat Sovetayevich Boranbaev, who held this post since 2006.
On January 21, Kuanysh Zhylkyshiev was appointed an acting Deputy Director General of JSC KazTransGas, - said the press service of the JSC. According to the statement, at his new post Zhylkyshiev will be in charge of gas marketing issues. The report notes that Kuanysh Bolatuly Zhylkyshiev, born in 1980, has higher education: in 2001 he graduated from the South Kazakhstan Technical University specializing in the “International Economic Relations”, in 2005 - from the South Kazakhstan State University named after M. Auezov, specializing in “Design, construction and operation of oil and gas pipelines and storages”. Total length of service of Zhylkyshiev in the Group of companies JSC NC KazMunayGas is more than 10 years. Previously, he held executive positions in JSC KazTransGas: he was Deputy Director of the Gas Marketing Department, Director of the Department of Management of the gas distribution networks. Before the last appointment, Zhylkyshiev held the position of Director of the Office of gas transportation and gas marketing in JSC NC KazMunayGas. At his new post he superseded Aybek Bayzakov, who accepted new job at KazRosGas LLP.
On January 22, the resolution of the Government of Romania finally approved the provisions of the memorandum of understanding signed last February between the company Rompetrol and the Agency for the management of state-owned stakes and privatization of the Ministry of Energy of Romania. The main provisions of the Memorandum include the repurchase of 26.7% stake in Rompetrol Rafinare (subsidiary of the Rompetrol Group - operator of Petromidia Refinery) from the Government of Romania for $200 million, as well as the establishment of a joint investment fund for implementation of projects in the energy sector of Romania that meet the strategic interests of JSC NC KazMunayGas. The share of the Government of Romania in the investment fund will amount to 20%.
On January 27, the extended meeting of the Collegium of the Ministry of Oil and Gas was held under the chairmanship of the Prime Minister Serik Akhmetov. The head of the Ministry of Oil and Gas U. Karabalin reported on the results of the development of oil and gas industry and its prospects. According to the Minister, in 2013, the production of oil and condensate was 81.8 million tons, which is by 3.2% higher than in 2012. Gas production in the reporting period reached 42.3 billion cubic meters, which exceeds the plan by 4.4%, and production level of the last year - by 5.4%. Summing up results of the collegium, the Prime-Minister noted the steady growth of the oil and gas sector in all major indicators, such as production, processing and export of hydrocarbons. Among the significant achievements of the past year, S. Akhmetov mentioned the signing of the memorandum of understanding and cooperation between the Government of the Republic of Kazakhstan and Tengizchevroil within the framework of TCO Future Growth Project; the intergovernmental Agreement on cooperation in the field of transportation of the Russian oil to China through Kazakhstan’s pipeline system, as well as putting into operation of the Bozoy-Shymkent gas pipeline and asphalt plant in Mangistau region.