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 KAZAKHSTAN
Former Soviet Union
Although most of the onshore Kazakhstani fields developed
before the break-up of the Soviet Union are in decline there remain many
areas of Kazakhstan, both onshore and offshore, with the potential for
growing both oil and gas output.
 Increased
oil production since 1999 has almost solely come about from an influx of
foreign investment. The Kazakh waters of the northern Caspian Sea are
especially significant, being home to the giant Kashagan field,
discovered in 1999. It is a structure identified by the Soviets but it
lies in sensitive, very shallow, ice-prone waters (2 to 10 m), which are
breeding grounds for migratory birds and caviar-producing sturgeon. The
field remained undrilled until 1999 due to lack of technology and fears
of oil spills.
The North Caspian Sea PSA: Most of Kazakhstan’s
waters were licensed, under the North Caspian Sea production sharing
agreement, to the OKIOC alliance in 1997 operatored by ENI. OKIOC
changed its name to Agip KCO in 2001. The area covers 1.4 mm acres and
11 blocks and contains five giant structures.
 The first discovery, Kashagan East-1 was drilled on the
Kashagan structure in September 1999 near the city of Atyrau and the
discovery of oil was formally announced in July 2000. Appraisal drilling
confirmed recoverable oil reserves in the order of 7 to 9 Bn Bbls and in
June 2002 the consortium made a declaration of commerciality for the
block.
A second exploration well was then drilled, this time on
the Kalamkas structure, discovering oil in October 2002. Subsequently
additional discoveries were made at Kashagan SW-1 and Aktote-1, followed
in 2004 by a 5th exploration well on the Kairan prospect, 40 km east of
the Kashagan field. All wells are drilled from artificial islands.
Originally scheduled for startup in 2005 the development
of Kashagan is being implemented in multiple phases. Due to high
reservoir pressure and the presence of hydrogen sulphide, the reservoir
technologies adopted in Kashagan are very advanced. The oil lies at
depths of 4,000-5,000m. The main technological problem is the high
pressures and huge volumes of hydrogen sulphide.
ChevronTexaco has spent millions of dollars to offset the
problem of hydrogen sulphide at its onshore Tengiz field and the Agip
KCO alliance plan to do the same. It will build several artificial
islands, a large gas processing plant and storage units for sulphur and
it will re-inject gas into the field. Some gas may also be marketed from
the field.
Oil production will need to be matched by an export route
as onshore oil output has been restricted by a lack of pipeline
capacity. The new Caspian Pipeline Consortium (CPC line) connects the
Caspian area with Russia’s Black Sea port of Novorossiysk as an
extension of the existing oil transit infrastructure surrounding the
Caspian Sea.
Newly constructed components run from the Russian town of
Komsomolskaya, straight westward to Novorossiysk. The pipeline was
officially opened in November 2001 at a capacity of 560,000 Bbls per
day, with plans to increase to 1.34 million Bbls per day. From 2008 to
2013 Kashagan will rely mainly on the older 300,000 Bbls per day
Atyrau-Samara line, running north into Russia, and an expanded CPC. Due
to the needs of Azerbaijan, BTC will be unable to accept Kashagan oil
and so by 2013 another major export pipeline will be required.
Other North Caspian: Since 1997 small volumes of
oil have been produced just offshore of the Caspian coast in the Ust
Yurt basin but amounts will be insignificant over the longer term. In
2002, Russia and Kazakhstan signed an agreement on the joint development
of the Kurmangazy, Tsentralnoye and Khvalynskoye oil fields located
along the median line separating the Russian and Kazakh sectors.
TotalFinaElf is participating in developing the
Kurmangazy field, found in Kazakhstan waters, in alliance with Russia’s
Rosneft. Exploration of the Tyub-Karagan and Atashsky offshore blocks is
also underway. Atashsky surrounds Tyub-Karagan and extends from a narrow
inlet between the Buzachi and Tyub-Karagan peninsulas westward to the
marine border with Russia. The blocks lie southwest of Kashagan
northeast of Lukoil’s Khvalynskaya and Yuri Korchagin fields in the
Severniy Block in Russian waters.
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