Country’s third-largest producer faces unstable operating and regulatory environment, but shareholders continue investments
Оригинальный текст опубликован на сайте «Upstream», 15 August 2023 6:08 GMT . Автор: Материал доступен по .
Kazakhstan’s third-largest oil producer Karachaganak, operated by a consortium of international majors, has reported stable production in the first half of this year, however, it had to increase the reinjection rate of produced associated gas.
Karachaganak shareholders are British supermajor Shell, Italy’s Eni, Chevron of the US, Russia’s Lukoil and Kazakh state oil and gas producer KazMunayGaz.
The company said its oil and condensate output fell marginally to 71.2 million barrels of oil equivalent in the period between January and June against 71.4 million barrels in the first half of 2022.
However, the volume of associated raw gas that was reinjected into the reservoir rose to 6.3 billion cubic metres in the reporting period, exceeding a 57% share of total gas produced at the field.
In the same period last year, Karachaganak Petroleum Operating Company said it pumped back about 5.7 Bcm of raw gas, or about 54% of the total gas output at the field.
With Kazakh authorities pressing foreign operators for higher local content, the project’s percentages for the employment of local personnel have remained almost unchanged against the last year.
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The operator said that Kazakh nationals account for 98% of all engineering and technical personnel and 86% of managerial staff.
However, local content in the Karachaganak contracts for procurement of goods, works and services rose to almost 61% or $344 million in monetary terms in the first half of the year, compared with 55%, or $206 million, in the same period of 2022.
The field’s added that shareholders invested about $1 billion into ongoing projects to keep the liquids output from falling in the past 12 months, with total investments into the Karachaganak development rising to $30 billion since the signing of a production sharing agreement with the Kazakh government in 1997.
In November, shareholders sanctioned what is known as the KEP-1B project to continue with the Karachaganak expansion, started under KEP-1A plan which is under construction.
KEP-1B includes construction of a sixth raw gas injection compressor, a gas dehydration unit, gathering network expansion and other associated facilities.
However, earlier this year, Kazakh authorities filed an international arbitration claim against Karachaganak, seeking to delay repaying shareholders investments of $3.6 billion and instead prioritising tax and other payments to the country’s budget.
Oil production unstable
Astana faces problems over maintaining oil and condensate production at onshore legacy fields across Kazakhstan that are exacerbated by outdated unstable power generation in its most oil prolific western regions, with lower production reducing state revenues.
New power supply cuts last week have already taken toll on the country’s oil and condensate output that fell to 1.63 million barrels per day this past weekend from 1.9 million bpd at the beginning of August, according to the country’s Energy Ministry.
Additionally, authorities and KazMunayGaz are understood to be urging Karachaganak partners to start considering options to build their own gas processing facilities after 25 years of operations to reduce the volume of raw gas.
Karachaganak currently pumps raw gas for processing into marketable dry gas across the Russian border to a legacy plant, operated by country’s gas giant Gazprom.
Kazakhstan state gas transmission operator and gas producer Qazaqgaz expects the shortage of natural gas on the domestic market to become evident .