PetroKazakhstan reports about gas utilization

Apr 21, 2005 02:00 AM

PetroKazakhstan has received a copy of a press release issued earlier by the Ministry of Energy, Mines and Mineral Resources (MEMR) which reads as follows:

RoK MEMR sets six months deadline for the subsurface user to eliminate shortcomings at Tengiz and Korolevskoye fields.
Conditions at oil fields Tengiz and Korolevskoye (TengizChevrOil) and Kumkol (PKKR and TP) have been considered at a scheduled CCD sitting at MEMR.
Based on the materials submitted by the subsurface user CCD underlined significant breaches of oil fields development rules at Tengiz and Korolevskoye. In this connection CCD's decision sets strict requirements on elimination of these shortcomings and sets a six months deadline for the second consideration of the conditions of the development of these fields.

CCD has also noted that its repeated instructions have not been fulfilled by PetroKazakhstan Kumkol Resources (PKKR) and Turgai Petroleum (TP).
In this connection CCD had to make a decision to set limits on oiland gas production at Kumkol in accordance with the level set by the Committee on Geology and Subsurface Use of MEMR which (level) excludes associated gas flaring.

The company, at this time has not received a copy of the decision of the Central Committee on Oil and Gas Field Development (CCD) and is unable to fully assess the impact of this decision on the production of PetroKazakhstan Kumkol Resources and Turgai Petroleum.
PetroKazakhstan can at this time make the following comments:
-- Under the provisions of new legislation adopted on 1st December 2004, subsoil users are required to provide for full gas utilization (no flaring) except under extremely limited circumstances.
-- PetroKazakhstan has a plan for full gas utilization on its operated fields by 1st July 2006. This plan is being implemented and has been submitted to the appropriate regulatory bodies.
-- Previous measures undertaken by PetroKazakhstan to reduce gas flaring include the construction of a 55 MW power plant at Kumkol as well as re-injection of associated gas from the Aryskum field. The company estimates that the production of associated gas from the Kumkol South and South Kumkol fields is currently utilized at approximately 84 %.
-- According to official Kazakh statistics, about 20 % of the associated gas production of Kazakhstan was flared during the first quarter of 2005.
-- In 2004-2005 PetroKazakhstan provided a subsidy of $ 12 mm to assist with the local distribution of gas to the residents of the City of Kyzylorda

The company is committed to providing timely information to its shareholders and will continue to do so as more information becomes available.
PetroKazakhstan is a vertically integrated, international energy company, celebrating its eighth year of operations in the Republic of Kazakhstan. It is engaged in the acquisition, exploration, development and production of oil and gas, refining of oil and the sale of oil and refined products.

Source: PRNewswire
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