Projects
Kazakhstani Vector of LUKOIL
Andrey Prokofievich Kirillov, director of LUKOIL Overseas Service B.V. branch in Astana, answers the questions of Petroleum.
Andrey Prokofievich, LUKOIL is considered to be one of the first companies which have launched its activity in Kazakhstan: the company’s arrival took place in 1995. Can you tell us about the volume of investments in the oil and gas industry over these years?
- That’s true, LUKOIL began its activity in 1995. Within that period the investments to the economy of Kazakhstan amounted to $6.5 billion. Such finances were assigned in order to open up the hydrocarbon deposits, as well as to establish infrastructure facilities, implement the programs in terms of associated gas utilization, staff trainings and more. It is worth noting that the development of oil and gas field is very capital and labor-intensive process that requires a thorough approach and study of every detail. Nevertheless, we have successfully overcome all encountered difficulties and entered the projects in the country, and today Kazakhstan is a key region in the foreign oil-producing activities of LUKOIL. The significance of Kazakh projects increases every year.
— What is the latest news in terms of onshore Kazakhstani projects in which LUKOIL Overseas is involved?
- First of all I would like to emphasize the fact that LUKOIL has become the first Russian oil company to start its work on the fields in Kazakhstan back in 1995 and today the company is ranked among the leaders in terms of production in the territory of Kazakhstan (for 2010 year it has produced 4.5 million tons of oil and 2.2 billion m3 of gas).
The producing fields in mining projects with the participation of LUKOIL are at the various stages of development. On the mature production fields (Kumkol, Karakuduk and North Buzachi), which are characterized by a natural decline in oil production, the company is constantly introducing various advanced technologies in order to improve the efficiency of development of these fields and stabilize the level of oil recovery. Also LUKOIL held the scientific research as well as pilot commercial operation aimed to improve the systems of field developments and to achieve the design factors of oil recovery. Pilot commercial operation on Kumkol (Turgay Petroleum) and North Buzachi fields (BOL) on cyclic injection of active agent to reservoir pressure maintenance system (RPMS) are in the progress at the moment. On the Alibekmola field (Kazakhoil Aktobe) the dual injection operation of active agent to carbonate formations is being implemented. The first stage of gel and polymer flooding with the positive effect has been done on the North Buzachi field; in plans for 2011-2012 – the second stage of implementation. The directional wells on the Kozhasay field (Kazakhoil Aktobe) have been successfully tested. In order to recover the idling well stock and start up operations on the Karakuduk (Karakudukmunay) and Alibekmola fields it is planned drilling at the secondary production wells. To provide a 100% associated oil gas utilization, KazakhOil Aktobe LLP is building an integrated gas treatment unit to produce commodity dry gas, liquid gas and granulated sulphur.
The success of all above mentioned developments is confirmed by the positive results for the period of 2010.
- One of the newsmakers in recent years has become the Karachaganak project because of ongoing negotiations of the Government of Kazakhstan to join the project. What is the position of LUKOIL as a shareholder on the issue?
— In any huge project, in spite of its successful implementation, within ten years the issues can be accumulated on which the parties have different points of view. Ongoing negotiations of the consortium with the Republic are aimed at a comprehensive and complete settlement of such issues. However, while there is a negotiation process, we, in the interests of all participants in these negotiations, are not entitled to voice any results. I just want to point out that we are negotiating in positive and efficient way and we hope that the negotiations will be successfully completed very soon. We would really like to point out that we have a positive experience in efficient teamwork with Kazakh companies as well as with other government agencies within the frameworks of other projects implementation in the Republic of Kazakhstan.
— It became known in late December about exploration failures and the Oil and Gas Ministry’s refusal to renew the subsoil use contract for the Atash field, that is why LUKOIL decided to shut the project. Not very encouraging news is from Oub-Karagan. What does it mean? The overestimated expectations of “big Caspian oil” in Kazakhstan? Or the wrong interpretation of seismological data? Anything else?