FSU/ Eastern Europe: Kazakhstan

FSU/EASTERN EUROPE

Interfax Petroleum Agency, Moscow

Kazakhstan

The republic last year marked its 100th anniversary of oil operations. In that time, more than 200 oil and gas fields were discovered, mainly in the west. Rising prices and increased export rights through Russia enabled Kazakhstan to boost oil and condensate output 6% in 1999. Since independence, foreign investment has risen to $10 billion, of which 40% comes from oil.

Former Sovier Union Click for enlarged view

Drilling/development. The Committee of Geology and Underground Protection said that drilling totaled 58 wells and 324,068 ft in 1999, down 38% and 22%, respectively. This year, gains to 86 wells and 433,000 ft are forecast.

Development of Kazakhstan’s Caspian shelf is the most promising direction for E&P expansion. Last August, the group exploring the shelf, Offshore Kazakhstan International Oil Co. (OKIOC), began drilling its first wildcat on the Kashagan East structure. At the end of March, the well had been drilled to the planned depth of 14,764 ft. However, OKIOC said it would sink the well 1,640 ft deeper "to obtain more complete, reliable data on the oil content in the horizons lying at that depth." In July 2000, OKIOC announced that the Kashagan East 1 wildcat is a world-class oil find, as well as Kazakhstan’s first offshore discovery. It tested 3,700 bopd and 7 MMcfgd. OKIOC includes Agip, British Gas, Mobil, Shell, Total, BP Amoco / Statoil, Inpex Nord Ltd and Phillips Petroleum.

Offshore Kazakhstan, the OKIOC consortium drilled its first wildcat and struck what it now believes to be a major oil discovery at Kashagan East 1. (Photo courtesy of Phillips Petroleum)

Development of North Buzachi oil field in Mangistau last year cost $66.6 million. Spending will be $85 million in 2000. Operator Texaco (65%) and Nimir Petroleum (35%) have contracted Geotex to carry out 2-D and 3-D seismic surveys. The firms also contracted Canada’s Precision Drilling Int’l. to drill vertical and horizontal wells.

The Kazakh-Turkish joint venture, Kazakhturmunai, began test output at Laktybai oil field in Aktyubinsk. The venture produced 2,390 bopd last year, enroute to 3,984 bopd this year. Since 1993, the firm has explored a 10,040-sq-mi area in Aktyubinsk, Atyrau, West-Kazakhstan and Mangistau regions. Over those seven years, Turkey’s TPAO, which owns a 49% stake in Kazakhturmunai, has invested over $280 million in the project, including about $80 million to develop Laktybai, Akzhar and Zhanatan fields. A pipeline linking Laktybai field to Kenkiyak was completed in January 2000. Oil reserves at Laktybai total 12.4 million bbl.

State oil company Kazakhoil last year merged two production subsidiaries, Tengizmunaigaz and Embamunaigaz (in Atyrau region), into the Kazakhoil-Emba company. Kazakhoil-Emba has 35 fields under initial or advanced development. The firm also is studying the Taisoigan field group in eastern Atyrau. It has completed a preliminary estimate of 360 million bbl of recoverable oil reserves in the 3,860-sq-mi area, which was formerly a military range used to test surface-to-surface missiles.

Last October, Kazakhoil-Emba completed drilling the first exploration wells in two structures at Taisoigan: Kondybai and Uaz. The company plans to begin oil production at the new fields in 2001, bringing production up to 11,950 bpd by 2004. This year, Kazakhoil-Emba began exploration drilling at older fields: East Moldabek, East Makat, Zaburunye, Central-East Prorva and Kisinbai. However, drilling will be concentrated at the Taisoigan group.

A workover rig for Tengizchevroil, Chevron’s joint venture in Kazakhstan. (Photo by Kev Robertson, courtesy of Chevron Corp.)

Production. Kazakhstan produced 604,172 bpd of oil and condensate in 1999, 5.8% more than in 1998. Within the total, condensate output was 74,400 bpd. Kazakhoil subsidiaries produced 119,500 bopd (3.8% more than in 1998). One subsidiary, Uzenmunaigaz, produced 55,770 bopd last year. The company is striving for 75,690 bopd this year, rising to 139,425 bopd in 2001 and subsequently increasing to 200,000 bopd. Nine companies in which Kazakhoil owns a stake produced about 210,000 bopd (14.1% more).

Other operators produced nearly 285,000 bpd, up 22.7%. The biggest producer, Tengizchevroil, received permission late last year to begin oil production at Korolevskoye field, adjacent to Tengiz. Recoverable oil reserves at Korolevskoye are estimated at 1.53 billion bbl. A preliminary field evaluation was carried out in the Soviet era, when 12 deep wells were drilled. However, experts say Tengiz and Korolevskoye are only one-fourth explored.

Tengiz oil production last year was 189,220 bpd, compared to 165,315 bpd in 1998. The venture plans to produce 211,130 bopd in 2000; 233,000 bopd in 2001; and up to 239,000 bopd in 2002. Annual investment in the venture exceeds $500 million. Tengizchevroil’s immediate plans are to add a sixth line of wells at a cost of $1.2 billion.

In November 1999, the consortium (Agip, British Gas, Texaco and LUKoil) developing Karachaganak field boosted production to a record level of 78,760 bcpd. There were 42 wells producing at the field at the end of 1999. Rising world prices last year prompted a steep rise in production at Karachaganak. The consortium produced 65,729 bcpd in 1999 (7.8% above target and 60.3% more than in 1998). It also produced 348.3 MMcfgd (0.4% below target and 55.4% above 1998’s level).

Gas output totaled 953.5 MMcfd, of which 187.8 MMcfd came from Kazakhoil companies, 214.5 MMcfd were produced by companies with Kazakhoil participation (1.7% more), and 550.2 MMcfd came from other operators.

Kazakhstan expects to produce oil this year at a rate 10% higher than that of 1999. Kazakh specialists say production will continue to increase at that rate, or even faster, in subsequent years.