BAKU, Azerbaijan, December 27. Kazakhstan, aiming at increasing its oil and gas production, has been developing its energy sector throughout 2022, Trend reports.
The current condition of Kazakhstan's main oil and gas field and the projects related to their development are as follows:
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, making it one of the largest fields discovered in recent decades.
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. The Kashagan contract was signed in 1997 and is set to run until 2041.
NCOC is a joint venture among KazMunayGas (16.88 percent), Eni, ExxonMobil, Royal Dutch Shell, and TotalEnergies (16.81 percent each), as well as China National Petroleum Corporation (CNPC) (8.4 percent), and Inpex (7.56 percent).
Current status:
Over the period from January through September 2022, the Kashagan oil field produced 8.7 million tons of oil, or 83 percent of the planned volume.
Reconstruction and repair work at the Kashagan oilfield forced Kazakhstan to decrease oil production. Production operations were halted at the Kashagan field on August 3 after a gas leak at the Bolashak oil and gas processing facilities. The operator shut down two of its legacy loading buoys after discovering cracks in connections between the feeding hoses and buoyancy tanks, leaving a single, newer loading buoy in service.
Consequently, oil production was limited to a quarter of normal capacity or around 100,000 barrels per day.
Initial projections suggested that oil production would reach full capacity in October, however, the reconstruction works were completed in November.
In mid-December 2022 Bulat Aqchulaqov, Minister of Energy of Kazakhstan, said that there are no reconstruction works planned for the next year, therefore it should be possible to reach the production target set out for the Kashagan field.
Currently, the Kashagan oil field operates at full capacity.
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, which will run through 2033.
Presently, Tengizchevroil includes Chevron (50 percent), ExxonMobil Kazakhstan Ventures Inc. (25 percent), KazMunayGas (20 percent), and LukArco (5 percent). Key products include crude oil, gas, and sulfur.
Current status:
Tengiz field retains its significant role for Kazakhstan and for the investors as well. According to the 2023 Chevron Capital Expenditure Budgets announcement, the company intends to invest around half of the $2.9 billion affiliate CapEx to the Tengizchevroil’s FGP / WPMP Project in Kazakhstan
According to CEO Magzum Mirzagaliyev, KazMunayGas oil company (KMG) is going to increase oil production at the Tengiz oil field significantly in the coming years.
“Among these projects is the project of Future Growth Project-Wellhead Pressure Management Project (FGP-WPMP), which is capable of increasing oil output at Tengiz by 40 percent, and several smaller projects at Kashagan,” Mirzagaliyev noted.
FGP-WPMP is a massive project aimed at increasing the production capacity of the Tengiz oil field. The project will increase the Tengiz field’s oil production capacity by an additional 12 million tons per year and guarantee that Tengiz production facilities are working at full capacity. As of early August 2022, 92.2 percent of the project was finalized.
Karachaganak
Karachaganak is one of the largest oil and gas condensate fields in Kazakhstan. Karachaganak Petroleum Operating B.V. (KPO) 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.
In 2021, Karachaganak shipped over 78 million barrels of gas condensate — essentially very light crude oil — via Caspian Pipeline to customers in Europe and other regions of the world, according to Caspian Pipeline.
Current status:
Partners in the Karachaganak project have approved a $700 million production capacity expansion phase, identified as KEP-1B, set to begin in 2023.
The project will include the drilling of six new development wells and four sour gas injection wells, a re-injection compressor, in-field flowlines, and a new gas dehydration plant.
According to Aqchulaqov, two associated gas processing plants with a capacity of 1.1 billion cubic meters and 2 billion cubic meters will be implemented on the Kashagan field.
In addition, in 2023 a decision will be made to process Karachaganak gas at the ZhaikMunay gas processing plant, which will increase gas processing by 4 billion cubic meters.
This will enable the government to improve the gas supplies to domestic customers.
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).
On October 21, 2019, North Caspian Operating Company (NCOC) and Shell company have announced the abandonment of the Kalamkas-Sea and Khazar oil fields development plans respectively.
Current status:
KazMunayGas CEO Magzum Mirzagaliyev and Lukoil President Vadim Vorobyov signed an additional agreement on the Kalamkas Sea and Khazar Project during the St. Petersburg International Economic Forum in June 2022.
According to the document, the companies will make a decision on a concept of development of the fields, as well as on commercial terms and conditions for joint implementation of the Project.
Energy sector transformations and necessary investments
Other relevant news related to the energy sector involves the plans of the government to cut carbon emissions and transition to green energy.
Kazakhstan has already brought the share of renewable energy in total electricity production to 4 percent. Additionally, Kazakhstan has set out a goal to become a carbon-neutral country by 2060.
Asian Development Bank (ADB) projects that Kazakhstan will need to attract investments ranging from $20 billion to $56 billion, depending on various factors, before 2030, to realize some of its energy sector ambitions.
According to the Bank report, investments are expected to go into the development of nuclear power plants and renewables due to the country's commitments to reach up to a 30 percent share of low-carbon energy sources.
“Investment needs for nuclear power plants are projected to be $9.2 billion under the Government Commitments scenario, and $9.7 billion under the Green Growth scenario,” the ABD said.
Additional investments of $7.9 billion under the Government Commitments scenario, and $11.9 billion under the Green Growth scenario, will be needed primarily for the wind power projects.
To carry out the planned rehabilitation and reconstruction of the natural gas power plants, Kazakhstan will require $2.9-$7.8 billion worth of investments, depending on the scenario.