October 9, Yerbolat Dossayev, Minister of National Economy, said at a briefing that the Government of Kazakhstan designed a scenario of economic in case of a slump in oil prices below $80 per barrel. “I have presented a socio-economic development forecast, the negative scenario is based on the 80 dollars per barrel. We have calculated some options in the event of further price declines,” Dossayev said. He reminded that Kazakhstan’s economy depended largely on the price of oil on world markets. “Obviously, we see the existing tendency. Today the price approached 91 dollar 20 cents per barrel. These are Brent oil biddings that have taken place in the morning. It is clear that they have a definite impact on the overall economy of Kazakhstan and due to them the plans are being reviewed by the Government,” Dossayev said.
October 9, during the Forum “Engineering of Kazakhstan in the industrialization programme 2015-2019,” Deputy Chairman of the Board of the National Chamber of entrepreneurs Ekaterina Nikitinskaya said that 64 oil and gas projects were filed in the second phase of the programme of forced industrial-innovative development: “The state-approved programme for 2015-2019 provides for one national cluster for oil and gas production and processing, petrochemical analysis, related engineering and maintenance services for the oil and gas industry on the territory of Atyrau, Mangistau and West Kazakhstan regions. At the initiative of our enterprises the secretariat has filed 64 project totalling KZT 189 billion. These projects are included in the State program of accelerated industrial innovative development of the second stage under the relevant sections.
The Government of Kazakhstan has approved the project of production expansion of Tengizchevroil LLP (TCO), the largest oil producing enterprise, in spite of the possibly higher than expected costs, said Energy Minister Vladimir Shkolnik. “Overall, the project of production expansion was approved. It was originally planned that the estimated costs would run at 23 billion USD, but our partners provided much more amount, about 40 billion USD, due to some circumstances... We will stand up for and check every figure. The final amount is still under discussion and may be lower,” said Skolnik, as reported by Reuters agency. As the Minister stated, the increase in expenditure is associated with the appreciation of some services, pipes and different equipment.
October 10, the Financial Times reported in its publication that the cost of development of Kashagan field offshore in the Kazakhstan sector of the Caspian Sea would increase by nearly 4 billion dollars due to the need to replace 200 km of pipeline. In September 2013, the international consortium developing the oilfield and comprising Royal Dutch Shell, ExxonMobil, Total, Eni, KMG and CNPC received its first oil thereof. However, a few weeks later, production was discontinued due to the gas leakage from the pipeline. “At this week's governmental meeting in Astana the pipeline replacement options have been considered,” the newspaper wrote, citing the persons in the know. “The work budgets ranged from $1.6 billion to 3.6 billion, depending on the technologies and materials. The choice fell on more expensive but also more corrosion resistant pipeline valued at $3.6 billion. “We can responsibly say that the budget will exceed this amount,” the edition cites its source.
The current cost of crude production in Kazakhstan is about $50 per barrel, said Uzakbai Karabalin, Vice Minister of Energy of the RoK. “As for the net cost of petroleum, of course, a lot depends on the field characteristics. Now we have about 200 fields and they are at different stages of development, require different cost approach, but in average, the net production cost at the traditional fields amounts to $50, but in some cases, it can exceed in one or another direction. Therefore, it shows that there is still a reserve between the net cost and the selling price,” said Mr.Karabalin. At the same time, the Vice Minister reminded that the costs for Kazakhstani oil transportation should be considered. According to him, if because of the global price decline, oil production will become unprofitable, then surely, the subsoil users can limit the new well drilling and to consider the issue of maintaining profitability.
October 25, public hearings were held in Atyrau regarding the preliminary assessment of the Environmental Impact Future Growth Project (FGP) of Tengizchevroil Company. By launch of the Future Growth Project, Tengizchevroil intends to increase the total amount of produced oil from 25 to 36 million tonnes per year. “Conceptual design of the third generation of the plant completed,” said General Manager for government and public relations at Tengizchevroil Rzabek Artygaliyev. Now the work on the detailed design are being carried out. They are carried out in Atyrau, Almaty, Aktau, Great Britain, United States and India. The works on building the infrastructure for a future project, which will allow the increase of oil production by 12 million tons per year, have already started on Tengiz oilfield.
October 28, Kairat Sharipbaev was appointed Director-General of KazTransGas JSC. He replaced in this post KTG Director General Serik Sultangali. Previously, he was Director General of JSC KazTransGasAymak. KazTransGas JSC was established in 2000 to organize the work of the oil and gas industry. The company carries out corporate asset management in exploration, production, transport and distribution of gas. KazTransGas group includes the enterprises and service providers dealing with production, transportation and sale of gas and its derived products.
October29, National Company KazMunayGas JSC spread information about the intention to privatize seven subsidiaries until the end of 2014. “Within the framework of execution of the Head of State’s instructions, the Government, together with Samruk-Kazyna JSC has developed a comprehensive privatization plan for 2014-2016. Over the period 2014 to 2020, KMG targeted to privatize 27 companies, 7 of which are planned to bring in the private sector to the end of this year,” goes the notice of the national company. In the course of this work, industrial Commission on disposition of assets was created in “KazMunayGas”. In 2014, it is planned to implement the following KMG subsidiaries and dependent organizations: National Maritime Shipping Company Kazmortransflot (KMTF) LLP, Euro-Asia Air JSC, Kazakh Institute of Oil and Gas JSC, Kazakh-British Technical University, and also companies in Romania: Palplast S.A., Rominserv Valvesiafo SRL, Global Security System S.A.
Sberbank CIB together with a subsidiary Bank of Sberbank in Kazakhstan arranged the funding for “KazMunayGas - processing and marketing” in the amount of $400 million for the period of 10 years for Shymkent refinery modernization project. The Bank stated that the funding would be allocated to implementation of the 1st and 2nd phases of the project “Reconstruction and modernization of Shymkent oil refinery”.
A new vessel, owned by Caspian Offshore Construction, a Kazakhstani shipping company, was floated out in the port of Aktau on November 7 with purpose of research works to be done in Kashagan field area. A ship was built with $10 million budget in Romania, it was named after Kanysh Satpayev, the founder of Academy of Sciences of Kazakhstan. According to the estimations, the ship is a unique vessel for the Caspian Sea, as it can operate in shallow waters, particularly, in the Northern Caspian Sea. That is where the ship will operate for the next three years, the ship is being chartered by a foreign company for the operations at Kashagan field. The crew will conduct research in the area of the field, take samples of air and soil. If needed, the ship can evacuate about 20 people from the accident scene.
In Aktobe, a memorandum was signed between the regional aktimat and CNPC-AktobeMunaiGas JSC on delivery and transport of natural gas through a fixed low price for new investment projects in the region. In accordance with it, CNPC-AktobeMunaiGas will allocate 200 billion cubic meters of gas at a cheap price for new investment projects for over 5 years. This measure aims to support entrepreneurs and attract investments to the region.
November 7, at a briefing in the Service central communications of Kyzylorda region akim Krymbek Kusherbayev said that the main oil field Kumkol field would be exhausted in the next 10-15 years. According to his data, the recoverable reserves at Kumkol oilfield amount to just 126 million tons, annual production is 10 million tons. “In the next 10-15 years we will exhaust it. Kumkol is the main oil field. And what shall we do next? If we don't change the structure of its economy now and take urgent measures to diversify it - we will doom the region to greater problems. Therefore, industrial-innovative programme announced by the President is the only way to change the structure and development of the region,” said Krymbek Kusherbayev. Akim underlined that hi-tech projects were implemented in the field in this connection: the glass plant construction, launch of the tire reprocessing plant Smart Rubber LLP, plant for the production of crushed stone in Shieli area and production of food and technical salt at Araltuz JSC.