KazMunayGas wants international companies to take part in new projects in Kazakhstan

KazMunayGas (KMG) representatives traveled to the U.S. to meet potential investors to promote new geological-prospecting projects in Kazakhstan, according to Dastan Abdulgafarov, the deputy CEO of KMG.

«KMG has completed a set of big geological-prospecting examinations of absolutely new fields and reassessed subsoil reserves of the Caspian Sea region over the past few years. I can say that we have discovered very promising fields and already conducted our road show for potential investors in the U.S. recently,» he said at the Astana Energy Forum, organized by S&P Global.

The national oil company has already been negotiating with big companies over the details of possible cooperation on new projects.  

«There is great interest and it is still growing. Today we are discussing with big international companies a range of issues related to the creation of teams and cooperation over those geological-prospecting projects,» he noted.

According to Abdulgafarov, KMG is entering a new investment cycle.

«Our investment portfolio for the next 10 to 15 years primarily consists of geological-prospecting projects. It also includes projects in the sphere of oil production optimization, petrochemical production and decarbonization. To boost all these activities, KMG is ready to allocate about $25 billion in investments over the next 10 to 15 years,» he said.

The government of Kazakhstan is also trying to stimulate investment activities in the country. For example, it has adopted a so-called modeling contract, designed as an incentive for businesses. KMG already used the tool and signed two major contracts with the Ministry of Energy of Kazakhstan last year.

«One of them is the well-known Karaton Khazar field in the Caspian Sea. We have a contract for production and we’re already doing some engineering work to prepare for production, which is expected to start in 2029. In addition, we have signed a geological-prospecting contract at Karaton Karkamys with our strategic partner Tatneft. This is a very interesting geological structure located in the vicinity of the giant Tengiz field. We signed this contract last year,» Abdulgafarov reported.

As he noted, the company is going to start drilling a deep well shortly.

«Concerning our short-term plans, we are going to drill two deep wells (5.5 kilometer-deep each) this year. Tomorrow we will start drilling a well down to the Paleozoic layer. Regarding a sea shelf, we have another structure we have been developing in conjunction with ENI. We are planning to drill a well there this year,» the official explained.

The deputy head of KMG also told Kursiv that the national oil company hopes to reach a middle ground in negotiations with big international companies.

«It is too early to talk about shares in geological-prospective projects and financial terms. We are discussing geotechnical materials; we are at the evaluation stage,» Abdulgafarov told Kursiv, noting that all those projects are on land.

Earlier this year, KMG announced it would start drilling a prospecting well at Karaton Podsolevoy. The oil production at this oil field is expected to start in 2028. Given that the field is located near Tengiz and Korolevskoye, its output may be about 4.5 million tons of oil and 930 million cubic meters of gas.

This year, KMG is going to invest $191 million in geological-prospecting activities (drilling 17 prospecting and test wells) compared to $135 million in 2023. Also, KMG plans to obtain contracts for exploring the Karazhar and Bolashak fields, containing around 32 million tons and 344 million tons, respectively, in conjunction with a strategic partner.

As of April 1, 2024, KMG was controlled by Samruk Kazyna (67.42%), the Ministry of Finance (20%) and the National Bank (9.58%). The remaining 3% (18.3 million) of shares belong to minority shareholders who bought them for $19.02 per item during KMG’s initial offering in December 2022 on the Kazakhstan Stock Exchange (KASE) and AIX of the Astana International Financial Center. As of today, the company’s stocks are traded at $29.57 (+0.15%).