Kazakhstan’s oil and gas company KazMunayGas (KMG), a subsidiary of Samruk-Kazyna, and China National Petroleum Corporation (CNPC), Asia’s largest oil and gas producer, will collaborate on oil prospecting in Kazakhstan’s Kyzylorda region, according to KMG.
«In 2013, oil production in the Kyzylorda region peaked at 11 million tons, but output has since dropped significantly, reaching under 4 million tons by 2023. This year’s forecast anticipates an additional 3% decline, bringing production to around 3.6 million tons, down 100,000 tons from last year. Therefore, KMG plans to ramp up exploration, survey new areas and introduce innovative technologies by strengthening collaboration with CNPC, its key partner in the region,» KMG’s release said.
Declines in oil production in the Kyzylorda region are largely due to reserve depletion at major fields. However, the South Torgai oil and gas basin, which stretches across the Kyzylorda and Karaganda regions, holds considerable potential for development and requires in-depth geological studies, according to Askhat Khassenov, chairman of KMG.
The South Torgai basin’s projected resources exceed 3.2 billion tons, positioning it as a major focus for KMG in its aim to replenish oil reserves. KMG considers full-scale geological exploration, particularly in partnership with foreign entities, crucial to achieving this goal. Currently, KMG’s agreements with China National Oil and Gas Exploration and Development Corporation (CNODC), a subsidiary of CNPC, involve a preliminary assessment of the area’s exploration potential. A more targeted exploration plan will be developed based on these findings.
Additionally, the local administration of the Kyzylorda region, Kazakhstan’s Ministry of Energy and Kazgermunai, a joint venture between KMG (75%) and CNPC (25%), have signed a memorandum to implement an investment project for the region’s socio-economic development. This includes expanding gas processing facilities to handle raw gas from various fields, thereby increasing liquefied petroleum gas (LPG) supplies domestically.
Regional authorities anticipate that this collaboration will attract investment to the gas sector, stabilize LPG supplies for the Kyzylorda region, preserve jobs and boost tax revenue for the local budget.
