BAKU, Azerbaijan, Dec. 30
By Nargiz Sadikhova - Trend:
Kashagan
The Kashagan field is located in the northern part of the Kazakh sector of the Caspian Sea. Its recoverable reserves reach approximately 9-13 billion barrels (1-2 billion tons) of oil.
The first commercial oil production started at Kashagan in 2016. The project operator North Caspian Operating Company (NCOC) shipped the first million tons of oil for export in early 2017. By mid-2017, NCOC reached an actual production level of more than 200,000 barrels per day.
Presently, NCOC includes seven big experienced energy companies, namely, "KMG Kashagan B.V." (16.9 percent), "Shell Kazakhstan Development B.V." (16.8 percent), "Total E&P Kazakhstan" (16.8 percent), "Agip Caspian Sea B.V." (16.8 percent), "ExxonMobil Kazakhstan Inc." (16.8 percent), "CNPC Kazakhstan B.V." (8.3 percent) and "Inpex North Caspian Sea Ltd." (7.6 percent).
Status
In Jan. 2020 it was announced that China Oil HBP Science & Technology, which offers oilfield services will implement a gas processing plant project at Kazakhstan’s Kashgan oil field. The cost of the project’s implementation was expected to be $242 million, whereas plant’s annual capacity was to be 1 billion cubic meters.
However later it was announced that the information that China Oil HBP Science & Technology company will take part in construction of a gas processing plant at Kazakhstan’s Kashagan field is not true.
“Currently all issues relating to the project are at the stage of a review and thus no agreements were made as of yet. The preparations for construction of the gas processing plant are in the full swing,” Kazakh Energy Ministry said.
In Feb. 2020 North Caspian Operating Company (NCOC) said it is looking to take a number of measures to increase oil output volume.
The NCOC official said that NCOC has reached a significantly high operational reliability of the operator’s production facilities.
Also in Feb. 2020 it was announced that the plant for processing of the associated gas will be constructed before the end of 2021 at the Kazakhstan’s Kashagan oil and gas field.
The project is to be implemented before the end of 2021 in the region’s Makat district. The planned project capacity of the plant is one billion cubic meters a year. GPC Investment company is a project’s investor, and total investment value in to the project is $860 million.
In July 2020 Royal Dutch Shell has taken a decision to send non-essential business personnel from Kazakhstan to home-countries given the developments related to COVID-19.
Later that month Petrofac’s Engineering & Production Services (EPS) division, in joint venture with Isker (Kazakhstan) has secured an Engineering, Procurement, Construction, Pre-commissioning and Commissioning (EPCC) contract worth approximately $135 million for New Water Treating Facilities for Kazakhstan’s North Caspian Operating Company (NCOC).
Also in July 2020 NCOC said it has developed a 90-day action plan to contain COVID-19 spread at the production sites.
“The working conditions of the shift personnel were adjusted according to the epidemiological situation. Access to work sites was strictly limited and provided only to the main staff (about 2,500 people). Additional health measures were introduced for employees of production sites at sea and land complexes,” the NCOC official said.
He also noted that despite the fact that some of the company’s staff tested positive for COVID-19, the operations at the company-operated fields continue as usual.
In September 2020 First Vice-Minister of the Republic of Kazakhstan Murat Zhurebekov said that final investment decisions regarding Kashagan projects to modernize compressors for gas re-injection and gas supplies for gas processing plants are to be made this year.
In Nov. 2020 oil output at Kazakhstan’s Kashagan oil field has reached 50 million tons. The NCOC said this is yet another milestone for the project since it began operations in 2016.
As of Dec. 2020 the implementation of projects for the construction of new wastewater treatment facilities at the onshore complex and the modernization of gas re-injection compressors continues at the Kashagan field.
Tengiz
The Tengiz oil field was discovered in 1979 and is one of the biggest and deepest oil fields in the world. The total explored reserves of Tengiz reach 3.2 billion tons, while recoverable reserves range from 890 million tons to 1.37 billion tons.
In 1993, Tengizchevroil LLP, which is the project operator, was established on the basis of an agreement between Kazakhstan and Chevron. Presently, Tengizchevroil includes Chevron (50 percent), ExxonMobil Kazakhstan Ventures Inc. (25 percent), KazMunayGas (20 percent) and LukArco (5 percent).
This year Tengiz oil field was recognized as the main driver of country’s energy sector development. Payments to the budget from the Tengiz project implementation exceeded $143 billion over the period from 1993 to 2019.
Status
In Feb. 2020 it was reported that Kazakhstan’s TCO oil and gas company has extracted 29.79 million tons of crude oil at its fields setting a new extraction volume record.
In Apr. 2020 Tengizchevroil (TCO) company temporarily suspended all construction activities. TCO said that it continued to take actions to prevent the spread of COVID-19 among its workforce in Tengiz.
Also in Apr. Tengizchevroil (TCO) operating on Kazakhstan’s Tengiz oil field has informed its shareholders on the decision to postpone its annual maintenance turnaround at Tengiz until 2021 given the current COVID-19 situation.
“TCO has implemented measures aimed at minimizing its workforce exposure to the virus, at both the Tengiz field and Atyrau office locations. TCO will continue to monitor changing conditions and adjust these measures if required,” said the rep.
Also that month TCO worked closely with relevant government authorities to safely demobilize personnel from the field.
As of May 2020 FGP-WPMP project was 77 percent complete and TCO was taking actions to safely execute key activities to continue advancing the project.
On May 20, 2020 Kazakhstan’s Chief Sanitary Doctor Aizhan Yesmagambetova said that operations at TCO-operated Tengiz oil and gas field may be suspended if number COVID-19 cases among field’s staff go on increasing.
The data as of May 21, said that 935 coronavirus cases of total cases countrywide account for Tengizchevroil staff.
As of May 25, 18,500 employees of the Tengizchevroil oil company (TCO) and contracting organizations were evacuated from the Tengiz field due to the threat of coronavirus spread.
On Jun. 15, 2020 TCO and its contractor organizations have resumed crew change operations. The company said that it expects that crew change will be executed in a controlled and phased manner and will last until mid-July.
Kazakhstan’s Tengizchevroil (TCO) continued to work through COVID-related challenging circumstances.
The company noted that of 1H 2020, the Future Growth Project – Wellhead Pressure Management Project (FGP-WPMP) project was completed by 78 percent complete and TCO is taking actions to safely execute key activities to continue advancing the project.
“As of end of 1H 2020, fabrication in South Korea is now complete, with all modules sailed away. All modules are either in Tengiz or in transit. Project Sealift 2020 Program is progressing with 44 modules delivered via Cargo Transportation Route (CaTRo) and 32 modules already on site in Tengiz,” the company said.
As of September 7, 2020, the total number of positive COVID cases among Tengiz workers is 4,147 while 3,295 individuals have fully recovered. Currently, most positive cases are identified in Point of Origin PCR-testing of workers before their rotation schedules at Tengiz. There are currently 402 confirmed cases among TCO personnel.
The Future Growth Project-Wellhead Pressure Management Project’s (FGP-WPMP) last Pre-Assembled Unit was safely delivered to the Tengiz field in Kazakhstan on October 28, 2020.
Due to new boost of COVID-19 cases at Kazakhstan’s Tengiz oil and gas field, medical specialists were sent to the field, Trend reports citing Healthcare Department of the regional akimat (administrative office).
Since Nov. 2020, a total of 140 new COVID-19 cases were reported at the field, 71 of which were reported over last four days.
As of Dec. 2020 despite the drastic increase in the COVID-19 cases at Kazakhstan’s Tengiz oil and gas field, TCO production continues uninterrupted and the company is taking actions to safely execute FGP-WPMP activities.
Karachaganak
Karachaganak is one of the largest oil and gas condensate fields in Kazakhstan. Karachaganak Petroleum Operating produces oil and gas from the Karachaganak field.
The shares in the consortium are distributed as follows: Eni - 29.25 percent, Royal Dutch Shell - 29.25 percent, Chevron - 18 percent, Lukoil - 13.5 percent and KazMunayGas - 10 percent.
Status
As of Apr. 2020 Kazakhstan’s Karachaganak Gas Debottlenecking (KGDBN) Project is ahead of schedule, but COVID-19 pandemic has affected the project.
During 1Q2020, production activity was not impacted given the large presence of local workforce and the mitigation measure (smart working) implemented by Karachaganak Petroleum Operating (KPO), Eni said.
"KGDBN Project is ahead of schedule, but due to COVİD-19 pandemic the project has been impacted. Estimated delay is about 1-2 months, bringing the startup of the project to 1Q2021," the official said.
In May 2020 Kazakhstan has introduced quarantine regime at its major Karachaganak oil and gas field. The quarantine was introduced due to the confirmation of COVID-19 cases among fields staff and is to last till Jun. 5, 2020.
In June Kazakhstan’s KTZ Express launched the oversized goods transportation from Georgia’s Poti station (Georgia) to Kazakh Aksai city through Kazakh Kuryk port.
The transformer recipient is the Kazakhstan branch of Karachaganak Petroleum Operating B.V. PJSC which develops country’s Karachaganak oil and gas field.
KPO has introduced amendments to the procurement process in July 2020.
Thus, the KPO has introduced amendments to the following processes:
- Registration in the database of KPO suppliers;
- Market research process;
- Procurement process, as well as mid-term and annual plans;
- Registration of tender documents;
- Updated tender procedures
- Priority list of goods for localization. Trial orders / early tenders;
- Conditional discounts from the price offer for local manufacturers of goods;
- Work carried out in the framework of local content development;
- The current situation with large projects;
- Single window system for suppliers;
- Electronic procurement system.
Karachaganak Petroleum Operating B.V. has extracted 75 million barrels of oil equivalent in 1H2020. The company has also re-injected 5 billion cubic meters of gas, which is 49.3 percent of the total volume of gas extracted.
“Despite the downturn in the global oil and gas industry, further exacerbated by the COVID-19 pandemic, the company's production facilities operate in strict accordance with all safety requirements and production plans for 2020,” the report said.
KPC Gas Production Restriction Removal Project and Project of the 4th Re-Injection Compressor are under implementation.
As of Sept. 2020 active work is underway at the Karachaganak field on implementation of the projects for the extension of the production (LNG and 4th compressor), as well as the Karachaganak-1 Expansion Project.
In Dec. Kazakhstan’s government and shareholders of the Karachaganak Petroleum Operating (Shell, Eni, Chevron, Lukoil) have approved the start of the Karachaganak-1 Expansion Investment Project (A) with the aim of further maintaining the production shelf at the Karachaganak oil and gas field.
As of Dec. the launch of projects to remove production restrictions and the 4th gas re-injection compressor is planned at the Karachaganak field in 2021. The final investment decision was made on the construction of the 5th gas re-injection compressor this year.
Kalamkas-Sea field, Khazar structure
The Kalamkas-Sea field, located in the Kazakhstan sector of the Caspian Sea, was discovered in 2002. It is 120 kilometers southwest of Kashagan and very close to the Khazar field. The total recoverable reserves of the Kalamkas-Sea and Khazara fields are 70 million tons of oil.
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).
Status
On Oct.21, 2019, North Caspian Operating Company (NCOC) and Shell company announced the abandonment of Kalamkas-Sea and Khazar oil fields development plans respectively. According to the ministry, the decision was based on low profitability of the projects due to the high capital costs.
Following the end of the procedure on return, Kazakhstan may consider the possibility of attracting other investors into the project. New agreements will be based on existing tax laws instead of the terms of production sharing agreement.
Project implementation costs incurred (Shell company has invested nearly $900 million into Khazar project) by existing shareholders will remain non-refundable.
In Feb. 2020 Kazakhstan’s KazMunayGas National Company said it will officially start negotiations on participation in development of Kalamkas-Sea and Khazar oil fields.
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