KazMunayGaz Sets a Sight on Three New Offshore Fields
Kazakhstan’s national company KazMunayGas (KMG) is going to obtain a license for the exploration work at Kalamkas Sea, Khazar, and Auezov oil fields in the Kazakhstani part of the Caspian sea, according to the country’s energy vice-minister Zhumabay Karagayev.
Karagayev noted that the combined reserves of these fields might be assessed at 87 million tons of oil and 86 cubical meters of gas. These preliminary figures caused the interest of big oil industry players and now KMG wants to use its priority right.
According to Kazakhstan’s national resources code, KMG always has a priority right and gets a 50% share of any new offshore fields.
In 2019 North Caspian Operating Company (NCOC) refused to work at Kalamkas Sea field and Caspi Meruerty Operating Company B.V. did the same with Khazar. Both companies had agreements with the Kazakhstani government and were exploring the fields since 2008 and 2005 respectively.
Two companies were working together because Kalamkas Sea and Khazar are located very close to each other. Therefore they planned to build a proper infrastructure, including pipelines, storage, and processing facilities they could share. According to the Ministry of Energy Shell, which participated in both projects, has invested in Khazar about $900 million. The money was spent on geological exploration, seismic operations, and appraisal drilling.
As the agency noted NCOC and CMOC left the projects because of weak profitability and high investment costs.
«Time for exploration at Kalamkas Sea expired and investors should have decided whether they are going to go further with the project or give the field back to Kazakhstan,» said Nurlan Zhumagulov, the director-general of the Union of Oilfield Service Companies of Kazakhstan (Kazservice).
Currently, there are four fields in the Kazakhstani part of the sea where geological exploration work is still ongoing: Abay and Isatay, which are explored by KMG in conjunction with Italian Eni; and Zhenis and al-Farabi, which are also explored by KMG and Russian Lukoil.
All these projects are risky because investors have to cover all costs on their own. They can get money back if only commercial oil production would start. Otherwise, they just lose their money. So far no company has reported an oil influx.
