The new Caspian strategy

Mar 03, 2009 01:00 AM

by Artur Shakhnazaryan

New tendencies are visible in the policy of choice by the officials in Astana and the National Oil and Gas Company of Kazakhstan, KazMunaiGaz, of foreign contractors in future projects on the Caspian shelf. On announcing the reconsideration of the state program of the resources of the Caspian Sea, but without ending the process of re-writing, KazMunaiGaz for the last half year activated the negotiation process on new projects in the Kazakhstani sector of the Caspian Sea.
To the previous approach, when for one foreign partner only one plot of land was offered with the supposed reserves of about 100 mm tons of oil, the "geographical approach" was added and interest for "exchanged operations with foreign partners." Such tendencies were revealed distinctly during the negotiations of the president's Administration and StatoilHydro, the Norwegian company, on reanimation of the negotiation process and preparation stage on realization of the project of the Caspian part of Abay.

Near Kalamkas
Geographically the Abay oilfield, as well as the Satpayev oilfield -- for which negotiations on the beginning of the development were carried out during the February visit of the president of Kazakhstan to India -- are located near the Kalamkas Sea oilfield. The license for development of the Kalamkas Sea belongs to the international consortium NCC (ex-Agip KCO).
The consortium in 2007 officially announced that the next project after Kashagan will be realized of the above-salted oilfield Kalamkas Sea with the extracted reserves of 130 mm of tons of oil.

There was an agreement initiated by the Shell company between Agip KCO and Caspian Meruerty on possible joint development of the Kalamkas Sea oilfield and two oilfields were opened for the last years on the project of the Zhemchuzhina oilfield (Auezov and Khazar), which is located on the south of the oilfield Kalamkas Sea.
During the year, according to the KMG plan, the eastern part of the Kalamkas Sea and the Issatay plot will be "involved". Such a complex concentration of efforts by Astana strictly in the district of the shelf is not something usual, which was confirmed by sources in the KMG.

Exchanged asset
Our sources in the national company KazMunaiGaz and KazMunaiTeniz underlined that agreements on the project of the Abay oilfield do not include in itself development of the Issatay oilfield. The negotiations with the Norwegian company -- interrupted in 2005 -- were carried out on the Abay oilfield, as well as on Issatay, which are located in the district of the Kalamkas Sea oilfield.
Resumption of the negotiations on the Abay project was initiated by the Kazakhstani side, although KMG said that the first step was made by the Norwegians. In exchange for 50 % of the share in the project of Abay, Astana wished to get some unknown foreign asset of StatoilHydro company with exit to the markets of Central and Eastern Europe.

It is a principally new step in the activity of the national company. Thus, additional conditions count -- for ConocoPhillips on plot N, for the Korean consortium on Zhambyl oilfield and for the Indians on the Satpayev oilfield -- for their participation in the development of oil and gas projects in the nearby Caspian oblasts of Kazakhstan.
For the first time the interest was shown to the foreign assets linked with the Caspian project. According to KMG, the agreement is being prepared with the Norwegian StatoilHydro company on the principles of the joint work on the Abay oilfield on the Caspian shelf.

"In the nearest time, KazMunaiGaz and StatoilHydro are intended to familiarize with geologic and technical information and to prepare an agreement on the principles of the joint work on the Abay oilfield," the message runs.
Both companies signed a memo of understanding in the person of the president of KazMunaiGaz, Kairgeldy Kabyldin, and the president and chief executive director of StatoilHydro, Helge Lund.

Abay -- a "four-millioner"
KazMunaiGaz declaredthat the total perspective resources of the Caspian marine oilfield Abay makes up 760 mm ton of oil, director of the department of the development of new marine projects of the national company KazMunaiGaz, Edige Zholdassov, said. The possible volumes of the annual extraction of oil on the Abay oilfield will make up 4 mm tons of oil and 500 mm of cm of gas.
Production projects will be managed by the marine national company KazMunaiTeniz. On the results of the evaluation, the expected geologic and perspective resources of oil makes up: at the Abay structure -- 607 mm ton, at the Aliya structure -- 125 mm tons, Abay Yuzhnyi -- 28 mm tons.

The Abay plot is located in the northern part of the equatorial of the Kazakhstani sector of the Caspian Sea at 60-70 km to the north-west direction from the seaside of the peninsular Buizachi. The depth of the water is 5-10 m.
The nearest spring points are periodical villages on the oilfields Karazhanbas and Kalamkas, which are located at equal distance of 80 km from the centre of the square. At 160 km to the south-west from the Abay oilfield there is Bautino port, where the base of the support of marine operations of the Northern-Caspian projects is located.

The Abay exploration well will be laid on the basis of the interpreted data, conducted by the company Kazakhstancaspiyshelf. The project depth of the well -- 2,000 meters. The general expenses of the first stage on the Abay structure will make up approximately $ 20,8 mm, including 19 mm for drilling of the exploration well. The medium depth of the oil bedding will make up 1,300 meters on the Cretaceous and 1,800 meters on Juristic deposits. The depth of the sea -- 9,5 meters.
In 2004 on the basis of the re-interpretation of the seismic data there were rebuilt and specified the structured buildings at the Abay oilfield, such as: Abay, Abay Yuzhnyi, Aliya.

Indian oilfield
The memo of understanding between the Kazakhstani and Indian companies was signed in February 2005. India had plans for four oilfields at the Caspian shelf -- Satpayev, Makhambet, Shagala and Shattyk. But it doesn't correspond with plans of the official Astana: perspective oilfields of the Caspian shelf are unique goods, which have not only economic, but also a political significance.
As a result of the long negotiations only one oilfield was provided for the Indian company, besides the share of the company was limited for 25 % on the exploration stage under conditions of the entire financing of the project on behalf of the Indian side. In case of discovery of commercial reserves of oil the Indian company may count for acquisition of 10 % more.

The provided oilfield Satpayev for ONGC Mittal Energy is located in the central part of the Northern Caspian Sea at 60 km from the shore of the Kurmangazinskiy district, at 160 km from Atyrau. The depth of the water in this place is about 7-10 meters. There are three perspective structures which are divided: Satpayev, Satpayev Vostochnyi and Karina.
The forecasted extracted resources of the oilfield -- 253 mm ton. Just to remind that ONGC Mittal Energy is the joint possession of ONGC and steel producing king Lakshmi Mittal, the investment company which is an owner of 12,5 % share of the neighbouring project of the oilfield Satpayev-Yuzhnyi Zhambai.

Issatay oilfield
The total perspective geological resources on the Issatay oilfield are estimated in oil of about 468 mm ton, what allows to consider starting of exploration works, said director of the department of the development of new marine projects of the national company KazMunaiGaz, Edige Zholdassov. According to him the structures Issatay, Burynshik, Sunkar and Tolkyn are considered prepared for conduction of the exploration drilling.
On the estimation results, the expected geologic and perspective oil resources make up: on the structure of Issatay -- 248 mm ton, Tolkyn -- 161 mm ton, Sunkat structure -- 60 mm ton, Burynshik structure -- 64 mm ton. The working program of the exploration and estimation works are planned to be realized in two stages. KMG in 2003 applied for undertaking of direct talks and receiving the right for subsoil usage to the competent body with the supplement "Preliminary program of exploration and estimation of the oilfields Abay and Issatay."

At the moment there is preparation going on of the tender documentation on the choice of a contractor for carrying out of the ecologic researches. Later the report will be prepared on the preliminary estimation of the influence of oil operations on the environment on the basis of the received results, the estimation of the influence on the environment will be developed for every stage of the exploration works (seismic exploration and drilling of the exploration well).
Issatay is located in the equatorial area of the Caspian Sea at 40 km to the north from the seaside of the peninsular Bozachi. The depth of the water is 3-6 meters. The nearest inhabited points are periodic villages at the oilfield Karazhanbas and Kalamkas. At 200 km to the south-west part of Issatay there is Bautino port with the base of the support of the sea operations of the North-Caspian project.

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