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Fate of Kazakhstan's Khazar field hangs in the balance

Oil&Gas Materials 4 November 2019 15:12

BAKU, Azerbaijan, Nov.4

By Nargiz Sadikhova - Trend:

The official announcement regarding abandonment of Kazakhstan’s Khazar oil field has not been made as of yet, Kazakhstan’s Ministry of Energy told Trend.

On October 21, 2019 North Caspian Operating Company (NCOC) and Shell company have announced abandonment of Kalamkas-Sea and Khazar oil fields development plans respectively.

As noted by the ministry, in December 2018, Kazakhstan and participants of the North Caspian Project signed an agreement on Kalamkas Sea, which stated that if the development plan is not approved by October 2019, the field is to be returned to the possession of the country.

“On September 30, 2019, the contractor of the project has notified on its decision to stop investing into development of the Kalamkas Sea project due to its low profitability, taking into consideration project costs incurred,” the ministry said.

Furthermore, the procedure on return of the subsoil use rights for the Kalamkas-Sea field to the country’s ownership should start soon.

“Ministry of Energy will look into all available information and will make a decision on further fate of the field, including possibility of attracting new investors,” the ministry noted.

Kalamkas Sea is part of the same contract area as the Kashagan field, which is being developed under a production sharing agreement (PSA) by the NCOC consortium.

The Khazar structure is part of the contract area of ​​the Pearl project, which is implemented by Caspi Meruerty Operating Company (CMOC) under the PSA. In addition to Shell (55 percent), its shareholders are KazMunayGas (25 percent), Oman Oil (20 percent).

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