Kazakhstan Chamber of Commerce in the USA

KazCham



TCO exploring alternative ways of supplying their oil 0

Posted on September 05, 2013 by KazCham

JV “Tengizchevroil” (TCO), a developer of the Tengiz and Korolev oil fields (Atyrau) is looking for alternative ways to deliver oil. Currently Tengiz oil is sold around the world, and is transported via the Caspian Pipeline Consortium (CPC) pipeline, by rail to Aktau and further to Batumi and Kulevi, as well as to Odessa and Feodosiya. The CPC pipeline is the major route of transportation of Tengiz raw materials.

Earlier TCO already sent their oil in the direction of the Asian markets, and now as part of its diversification policy is once again ready to restart this type of delivery.

Business Intelligence from Colibri Law Firm: Issue #70

Kazakhstan Daily News Roundup – September 6, 2011 0

Posted on September 06, 2011 by Alex

Renewed Emphasis on Off-Shore Safety 0

Posted on January 30, 2011 by KazCham

Bringing Caspian off-shore oil safely to shore is proving difficult and expensive, writes Anthony Robinson

BP’S DISASTER IN the Gulf of Mexico has led to a renewed emphasis on safety in Kazakhstan as a decade of off-shore development in the shallow north Caspian Sea gets closer to the start of production.

Kazakhstan is determined not to see a repeat near its shores. “I have assigned the Ministry of Oil and Gas along with the minister for environmental protection to create a joint working group and look once again at how oil is being extracted from the Caspian Sea,” Prime Minister Karim Massimov announced in May 2010 as the scale of the Gulf oil spill became clear.

The Caspian, with its winter ice, fluctuating sea levels and high levels of deadly hydrogen sulfide mixed with hot, sour and extremely high pressure oil, represents an even higher series of potential risks. It is largely because of the need to ensure safe production that it has taken so long to get off-shore oil and production started. The euphoria which greeted confirmation of the giant Kashagan oil field beneath the shallow waters of the northern Caspian Sea a decade ago has been tempered by experience.

Originally scheduled to start pumping oil in 2005, the heavily reorganized consortium of international oil companies and KazMunaiGas (KMG), which is developing the bone-shaped Kashagan deposit up to 5km below the surface, admits that the complex project is still far from complete.

Each of the five major equal partners in the North Caspian Operating Company (NCOC) consortium developing Kashagan – ENI, Exxon-Mobil, Shell, Total and KMG – are committed to billions of dollars a year in additional spending to get first oil flowing safely to the gigantic on-shore processing complex at Eskene, north-east of Atyrau, by late 2012. Exxon-Mobil, meanwhile, is pushing ahead with the development of three smaller and shallower fields close to shore, which are included in the Kashagan concession area.

After a decade of heavy investment, Kashagan remains a bonanza for suppliers of all kinds of equipment and services – and a superb off-shore training ground for the state oil company and a new generation of Kazakh oilmen. But it still has not produced any commercial oil.

Yet all the companies involved in the project -which include Conoco-Phillips and Japan’s Inpex – are looking beyond to the next and subsequent stages of development to raise output to around 1.5 million barrels per day by the end of the decade. Oilmen expect output to plateau at this level for at least two decades, thanks to massive gas re-injection, before gradually declining for the rest of the 21st century, and possibly beyond. But the almost decade-long delay in starting production means that the oil companies will have to recoup their investment and pocket their profits in eight years less than they imagined when they signed their 45-year production-sharing agreements (PSAs). On expiry of the PSAs, all three of the giant fields will revert to the Kazakh state.

The logistics of transporting nearly 3 million barrels of oil and associated gas expected before the end of the decade are almost as daunting as the practicalities of producing and processing the raw oil itself. Another reason why Kashagan has proved so expensive and time-consuming is due to the green-field nature of the venture and the need to build an entire production, processing and transport infrastructure virtually from scratch.

Before Kashagan and the two giant onshore fields at Tengiz and Karachaganak got underway, the Kazakh oil industry basically consisted of technically primitive Soviet oilfields concentrated around the Uzen field in the Mangyshlak peninsula. The waxy oil was crudely refined at the Atyrau refinery, vintage 1945, and either shipped around the Caspian in small tankers from Atyrau, then a fly-blown little Soviet port called Guriyev, or shipped north by pipeline to join up with the Soviet Druzhba pipeline system at Samara, in Russia.

The first infrastructure breakthrough came when the Caspian Pipeline Consortium (CPC) built a $2 billion pipeline through southern Russia from Tengiz to the Black Sea port of Novorossiysk to cope with the start-up production from Tengiz and Karachaganak, to which it is linked by a 600km spur line. Capacity on the CPC pipeline is now being doubled after long delays imposed by Russia while it wrested control from Chevron and the other oil companies which financed the project. Adding new pipelines and pumping stations and building additional storage and loading capacity at Novorossiysk will raise CPC capacity to 67 million metric tonnes a year by 2014.

But coping with sharply rising volumes of oil and gas from Kashagan and other off-shore fields over the next decade and beyond requires a whole new set of export pipelines and related infrastructure. This means not only new pipes and pumping stations, but also cross-Caspian Sea oil tankers and, possibly, pipelines under the sea to link Kazakh and Turkmen oil and gas fields training ground for the state oil company and a new generation of Kazakh oilmen. But it still has not produced any commercial oil.

Yet all the companies involved in the project -which include Conoco-Phillips and Japan’s Inpex – are looking beyond to the next and subsequent stages of development to raise output to around 1.5 million barrels per day by the end of the decade. Oilmen expect output to plateau at this level for at least two decades, thanks to massive gas re-injection, before gradually declining for the rest of the 21st century, and possibly beyond. But the almost decade-long delay in starting production means that the oil companies will have to recoup their investment and pocket their profits in eight years less than they imagined when they signed their 45-year production-sharing agreements (PSAs). On expiry of the PSAs, all three of the giant fields will revert to the Kazakh state.

The logistics of transporting nearly 3 million barrels of oil and associated gas expected before the end of the decade are almost as daunting as the practicalities of producing and processing the raw oil itself. Another reason why Kashagan has proved so expensive and time-consuming is due to the green-field nature of the venture and the need to build an entire production, processing and transport infrastructure virtually from scratch.

Before Kashagan and the two giant onshore fields at Tengiz and Karachaganak got underway, the Kazakh oil industry basically consisted of technically primitive Soviet oilfields concentrated around the Uzen field in the Mangyshlak peninsula. The waxy oil was crudely refined at the Atyrau refinery, vintage 1945, and either shipped around the Caspian in small tankers from Atyrau, then a fly-blown little Soviet port called Guriyev, or shipped north by pipeline to join up with the Soviet Druzhba pipeline system at Samara, in Russia.

The first infrastructure breakthrough came when the Caspian Pipeline Consortium (CPC) built a $2 billion pipeline through southern Russia from Tengiz to the Black Sea port of Novorossiysk to cope with the start-up production from Tengiz and Karachaganak, to which it is linked by a 600km spur line. Capacity on the CPC pipeline is now being doubled after long delays imposed by Russia while it wrested control from Chevron and the other oil companies which financed the project. Adding new pipelines and pumping stations and building additional storage and loading capacity at Novorossiysk will raise CPC capacity to 67 million metric tonnes a year by 2014.

But coping with sharply rising volumes of oil and gas from Kashagan and other off-shore fields over the next decade and beyond requires a whole new set of export pipelines and related infrastructure. This means not only new pipes and pumping stations, but also cross-Caspian Sea oil tankers and, possibly, pipelines under the sea to link Kazakh and Turkmen oil and gas fields

with the Azeri ports on the Caspian west coast – once the legal status of the Caspian Sea is agreed by all five littoral states, including Russia and Iran.

While NCOC is striving to get Kashagan on stream by late 2012, another race is taking place to ensure the export capacity to take 450,000 barrels per day (bpd) from Kashagan by 2015 as production builds up from the 125,000 bpd initial throughput. With Kashagan alone producing up to 1.5 million bpd, output should also be building up from the N bloc, Pearls and other off-shore fields currently at the exploration stage.

Most of the oil and deliverable gas from these offshore fields will be shipped south to new oil export facilities at Kuryk, 100km south of Aktau, while Italian companies are building another terminal at Bautino, the main, ice-free service facility for the off-shore industry. Some $3 billion is being invested in the so-called Kazakhstan Caspian Transportation System (KCTS) on the Kazakh side, and similar investment is planned at the new Azeri ports of Qaradagh and Sangachal south of Baku where the oil and gas will land. Further investment could also raise capacity on the oil and gas pipelines running west from Baku through Georgia to Turkey, including the 1,750km Baku-Tbilili-Ceyhan (BTC) pipeline, which currently takes up to 1 million bpd of Azeri oil from the Caspian

to the eastern Mediterranean. Other projects include raising capacity on the smaller pipeline between Baku and Black sea ports such as Supsa and Batumi, and then shipping oil through Ukraine to Central Europe.

Kashagan, although the offshore flagship, is far from the only promising project currently under development. Newer projects, in which KMG is a privileged player with a 50 percent guaranteed stake, are attracting attention from a wide spectrum of Asian state oil companies and Middle Eastern investors, as well as companies such as Norway’s Statoil with off­shore expertise. The biggest of the new projects is the N block, which lies further south in deeper but ice-free waters, not far from Aktau and Kuryk. KMG has taken on Conoco-Phillips and the United Arab Emirates’ Mubadala Development Company as technical and financial partners for this highly prospective block. Some industry observers believe the N field could be almost as big as Kashagan – but more likely to be predominantly gas rather than oil. With drilling currently on course, the nature of the field and its potential should become clear soon. ?

Anthony Robinson is a former Financial Times Moscow correspondent, and East Europe editor and originator of the Russian business newspaper Vedomosti.

Source: Invest in Kazakhstan 2010

Kazakhstan Daily News Roundup – November 2, 2010 0

Posted on November 02, 2010 by KazCham

HEADLINES:

S&P upgrades BTA Bank counterparty credit ratings
(SRI) – Standard & Poors Rating Services (S&P) last week said it has increased its long-term counterparty credit ratings on BTA Bank to B- from D and its short-term counterparty credit ratings to C from D with a stable outlook.

CPC exports up 9.7% in October
(SRI) – The Caspian Pipeline Consortium (CPC), which transports Kazakh and Russian crude to the Black Sea via the CPC pipeline, shipped 3.097 million tons of crude oil in October, up 9.7% from September (2.824 million tons), CPC said on its website.

ENERGY:

Moody’s downgrades KazMunaiGas corporate rating to Baa3; changes outlook to stable (Moody’s)

BUSINESS AND ECONOMY:

Astana to host Kazakh-Austrian Business Forum in November (Interfax)

Kazakhstan’s budget posts 17% deficit in expenditures for Jan-Sep (Interfax)

Kazakhstan and Russia against harmonization of export duties within Common Economic Space (Interfax)

National Bank of Kazakhstan: Exchange rates Novembver 2, 2010 (Kazakhstan Today)

Indicators – November 1, 2010 (Reuters)

REGIONAL:

Kyrgyzstan votes in new multi-party parliament (Reuters)

ExxonMobil back in Turkmenistan, eyes gas riches (Reuters)

SOURCE: http://silkroadintelligencer.com/2010/11/02/kazakhstan-daily-news-roundup-november-2-2010/



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