Karachaganak: Yesterday, Today, Tomorrow
It is impossible to imagine an extensive history of the development of oil and gas complex of the Republic of Kazakhstan without the Karachaganak development project - the world’s largest oil, gas and condensate field, which is rightly regarded as the locomotive of the economy not only of West-Kazakhstan Region, but also as one of the flagships of the industry as a whole.
Сurrently, Karachaganak is one of the largest oil, gas and condensate projects in the world, where billions of cubic meters of natural gas and millions of tons of liquid hydrocarbons are produced. But for the country it is also a true social cluster, ensuring top-paying job to thousands of people, not only those working directly in the field, but also engaged in related fields and service companies. This is a stable orders and contracts for local businessmen, it is the annual investment in the development of social infrastructure and, finally, it is a safety and environmental protection at the level of world standards.
Of course, it was not always like that. The history of the field has experienced its ups and downs, very difficult economic times and periods of uncertainty when even the prospect of further development was at risk.
However, thanks to the strength of will and flexible policies of both the highest public authorities and the leadership of the enterprise itself and authorized company representing the interests of Kazakhstan in the Consortium, eventually it became possible to resolve not only the sheer number of production problems, but also to identify new strategic borders.
The Karachaganak field, located in the West-Kazakhstan Region in 30 kilometers from the city of Aksay, was discovered in 1979. The area of the field is more than 280 square kilometers. The proven reserves contain more than 1.2 billion tons of oil and condensate, and more than 1.35 trillion cubic meters of gas.
The commercial field development was launched in November of 1984. In 1992 the Government of the Republic of Kazakhstan has announced a contest for the right to develop Karachaganak. The alliance of Agip (Italy) and British Gas (Great Britain) was voted the winner of the contest. In March of 1995, the Production Sharing Principles Agreement (PSPA) was signed between Agip, British Gas, Gazprom RJSC, acting as the contractors, and the Republic of Kazakhstan, which was the interim agreement before the signing of the FPSA.
In early 1997, Texaco (USA) joined the contractors. Also, in 1997, by mutual agreement of the parties another Russian company LUKOIL JSC replaced Gazprom RJSC.
On November 18, 1997, during the official visit of the President of Kazakhstan Nursultan Nazarbayev to the United States between the Government of the Republic of Kazakhstan and the alliance of foreign companies the Final Production Sharing Agreement (FPSA) was signed, valid for 40 years. The agreement entered into force on January 27, 1998.
Starting from February 2002, the National Company KazMunayGas was defined by the Government of the RoK as a competent authority in the Karachaganak Project, which is responsible for overall control of oil and gas operations, social and infrastructure projects. In turn, to implement more effective management, in 2010 the National Company KazMunayGas established PSA LLP, with 100% equity participation. Currently, PSA LLP is authorized to fully carry out delegation on the issues of implementation of the FPSA provisions.
In 2012, the National Company KazMunayGas joined the partners of the International Consortium on the Project of Karachaganak field development. As a result, the image of the locomotive of the economy of Western Kazakhstan and leader of the National oil and gas industry finally consolidated after the Karachaganak Project.