Kazakhstan Chamber of Commerce in the USA

KazCham



Kazakhstan to ship 2 million tons of grain to South Korea 0

Posted on April 28, 2010 by KazCham

Astana. April 23. Interfax-Kazakhstan – Kazakhstan will export 2 million tons of grain to South Korea.

“We will export 2 million tons of Kazakh grain to the Republic of Korea and expand our cooperation in agriculture,” the Kazakh President’s press service informed on Thursday.

As previously reported Kazakhstan had previously sealed a deal with South Korea for the shipment of 600 thousand tons of wheat through China.

Meanwhile, Kazakhstan is planning to export about 3 million tons of grain to the Southeast Asian countries via China in 2010.

In 2009 Kazakhstan harvested 22.7 million tons of grain in bunker weight, or 20 million tenge in net weight. According to the Agriculture Ministry, this marketing year the republic is ready to export about 9-10 million tons of grain.

SOURCE: http://www.interfax.kz/?lang=eng&int_id=10&news_id=3434

Kazakhstan overview 2010: Oil & Gas 0

Posted on March 17, 2010 by KazCham

Kazakhstan has the Caspian Sea’s largest recoverable crude oil reserves. The Government of Kazakhstan and foreign investors continue to focus heavily on the hydrocarbons sector, which so far has received approximately 60% of the estimated $76 billion in foreign direct investment in Kazakhstan since 1991, and constitutes approximately 53% of its export revenue. Existing oil extraction sites offshore in the North Caspian, combined with onshore fields currently under development, mark Kazakhstan as a potentially major near-term oil exporter. Over the past seven years, oil
production in Kazakhstan has more than doubled and reached 1.62 million barrels per day (bbl/d) in 2009. Major producers include Tengiz, Karachaganak, CNPC Aktobemunaigas, Uzenmunaigas, Mangistaumunaigas, and Kumkol, all of which account for 1 million bbl/d. Output solely from the country’s three major fields (offshore Kashagan, onshore Karachaganak, and onshore Tengiz) is set to grow to 1.7 millionbbl /d by 2011 and to 2 million bbl/d by 2015.

Kazakhstan now accommodates significant investment in its vast upstream oil and gas resources and government forecasts predict that oil exports could reach as much as 3.5 million barrels per day in 2015. Most of this year’s production increase will come from the onshore Tengiz and Karachaganak fields.

The huge offshore Kashagan field, with an estimated 7-9 billion barrels of recoverable oil, is expected to come on stream by the end of 2012, but first commercial oil production will not exceed 100,000 bbl/d. The magnitude of the resource could result in Kazakhstan becoming one of the world’s major energy exporters by the end of the next
decade. This jump in production has also stimulated planning for processing plants and pipelines to come on-line in time for the start of production.

Best Prospects/Services

Return to top Oil industry sources estimate that Kazakhstan could eventually attract up to $140 billion of foreign investment in its oil infrastructure. The current market for oil and gas field equipment and services slowed in 2009 due to, 1) low oil prices and the economic crisis and 2) cuts in capital expenditures by oil and gas exploration and production companies.

But overall demand remains strong with opportunities for U.S. companies in virtually every sub sector associated with oil extraction, processing, and transportation. Best prospects include: drilling, research and data management, laboratory studies, oil spill cleanup technologies, and pipeline equipment and services.

Kazakhstan as yet has no experience in offshore production and operations. This experience gap offers many opportunities for U.S. service companies in rig work, support infrastructure, and environmentally sensitive technologies. The Caspian Basin’s oil-bearing formations are generally quite deep (15,000 feet), under considerable
pressure, and often contain a high degree of sulfur and other contaminants, making special Western-made drilling and processing equipment necessary.

U.S. oil and gas field equipment suppliers have the potential for solid growth over the next decade as new fields are brought on-stream and secondary recovery methods are introduced to existing deposits. The most promising sub-sectors are the following: offshore/onshore oil and gas drilling and production equipment; turbines, compressors
and pumps for pipeline applications; measurement and process control equipment for pipeline applications; industrial automation, control and monitoring systems for refineries, gas processing and petrochemical plants, seismic processing and interpretation, petroleum software development, sulfur removal and disposal technologies, well stimulation and field abandonment services.

Plenty of other opportunities exist for U.S. companies producing oil and gas field equipment and machinery such as drilling and wellhead equipment, Christmas trees, valves, pumps, motors, compressors, electrical submersible and jet pumps, underwater repair equipment, and oil spill containment equipment. Good prospects also exist for U.S. small- and medium-size firms offering downstream engineering and services such as fabrication, welding, engineering services and testing in accordance with API and ASME standards.

Opportunities

The Government of Kazakhstan is pursuing a development program for oil fields in the Caspian Sea that calls for increasing offshore oil production to about 2 million bpd by 2015, and for development of terrestrial infrastructure. The offshore development program also calls for more than 100 offshore blocks to be privatized through open
tenders. These future projects, combined with current production and exploration, should provide opportunities for interested U.S. exporters over the next few decades.

Resources

North Caspian Operating Company: http://www.ncoc.kz/
Atyrau Oil & Gas 2010 – http://www.oil-gas.kz/ru/
Caspian Pipeline Consortium: www.cpc.ru/
Kazakhstan International Oil & Gas Exhibition and Conference (KIOGE) 2010 – http://www.kioge.com/2010/
Kazakh Institute of Oil and Gas (KING): http://www.king.kz/
Kazakhstan Petroleum Association: www.kpa.kz/
KazEnergy Association: http://www.kazenergy.com/
KazMunayTeniz: www.kazmunayteniz.kz/
KazStroyService: www.kazstroyservice.kz/
KazTransGas: www.kaztransgas.kz/
KazTransOil: www.kaztransoil.kz

SOURCE OF PUBLICATION: Kazakhstan O&G overview 2010 by Country Commercial Guide for U.S. Companies. http://www.buyusainfo.net/docs/x_7387330.pdf

Maintaining the flow 0

Posted on March 05, 2010 by KazCham

FOR LANDLOCKED KAZAKHSTAN, oil and gas pipelines  are its main export arteries. They will become even  more important once the giant Kashagan field comes -on stream, doubling oil production and opening up  a new era of offshore Caspian Sea oil and gas exports  within the next five years.

Ensuring that another 1.5 million barrels a day of  export pipeline capacity, together with new tanker  routes across the Caspian Sea, are ready by 2015 at  the latest are among the government’s most crucial  strategic goals at a time of intensive infrastructure  development in this vast, thinly populated country.

In Soviet times, and until very recently, virtually  all Kazakhstan’s oil and gas exports were transported -north through Russia. So were the more than 50  billion cubic metres of natural gas, which transited

the country from Turkmen and Uzbek gas fields en  route to eventual markets in Ukraine and Russia  itself, where state-controlled Transneft and Gazprom  stubbornly defend their near-monopoly status against  all comers.

Chevron-Texaco and its partners in the  Tengizchevroil consortium – Exxon-Mobil with  25 per cent, KMG with 20 per cent and the LukArco  joint venture between Lukoil and BP with 5 per  cent – were the first foreign companies to breach the  Russian gas transit company’s monopoly on exports  from Central Asia, when President Yeltsin reluctantly  agreed to the construction of the Caspian Pipeline  Consortium (CPC) pipeline in the late 1990s. In  return for putting up the money, the oil companies  demanded, and were granted, management control of the line to ensure it was run in the interests of  the investing partners, who were also the main  users of the pipeline. At the time it looked like a  revolutionary step – but it did not last long.

The CPC line runs from the giant onshore Tengiz  oil field in northern Kazakhstan, developed by  Chevron and partners, across southern Russia to the Black Sea port of Novorossiisk. A 600km-long spur  line from the giant Karachaganak gas condensate  field to the north east taps into the line to allow  access for BG, ENI and other investors, including  Russia’s Lukoil.

Unlike most Russian pipelines, CPC is run on a  quality bank system. This ensures that high-quality  Central Asian light crude oil and condensate can  be sold at a premium and not suffer the Ural crude  discount. This affects oil delivered through Russia’s  ageing main pipeline system, which mixes the good  with the bad to deliver a lower grade final product.  This is a major disincentive for using the ageing

Soviet-era trunk pipeline system, which Russia did  not upgrade sufficiently during the years of high  oil prices.

Chevron and partners put up more than $2 billion  to build CPC and associated facilities and the Yeltsin  administration allowed Chevron to manage it,  overruling Transneft’s opposition. The Russian and  Kazakh governments received 24 and 19 per cent  stakes in the pipeline and shareholders included  Lukoil through its Arco joint venture with BP.  Stakeholder companies gained access to the pipeline  for their oil exports in proportion to their investment.

But this arrangement did not survive President  Putin’s ambitions to make Russia an ‘energy super- derzhava’ (energy super-power) and the foreign  oil company stakeholders lost both their original  combined majority of shares and their managerial  rights as Moscow bought up the 7 per cent of  shares formerly owned by the Gulf State of Oman  and insisted that management pass into Russian  hands. Moscow argued that the former management  had run a low-tariff regime, which favoured the  international oil companies at the expense of  the Russian treasury. Once in control, Transneft  proceeded to raise tariffs.

Moscow has also made CPC capacity expansion  conditional on support for Transneft’s desire for a  controlling 51 per cent stake in the proposed Burgas- Alexandropolous pipeline. This 220km-long route  is designed to bypass the crowded and ecologically  sensitive Turkish Bosphorous and carry Caspian and  Russian oil from the Black Sea to the Greek port of  Alexandopolous in the northern Aegean, through  Bulgarian and Greek territory.

BP, which has concentrated its Caspian investments  in the Azeri section of the sea much further south,  recently sold to KMG for $250 million the 1.75 per  cent stake in CPC it inherited from its LukArco joint  venture. When added to the 19 per cent already held  by KMG on behalf of the Kazakh state, the state energy h corporation now holds a 20.75 per cent ownership  stake and has the right to export 14.3 million tonnes a -» year through the line, once capacity expansion to  67 million tonnes a year is completer

The BP sale to KMG completes a radical shift in  the power balance within the CPC consortium, with  the Russian and Kazakh state now holding a clear  majority of 54.75 per cent in the pipeline – paving the way for Moscow to give the green light for the long  promised expansion.

Oil started to flow down the CPC line four years ago and some 32 to 34 million tonnes a year can now be  transported down the pipes, thanks to the addition of chemicals to speed the flow. From the start the CPC  project was conceived as a two-stage affair. Technical  plans to double capacity to 67 million tonnes a year,  through additional investment in new pumping  stations and other facilities as production built up  from new onshore and offshore fields, have been  approved, but not the final go-ahead.

Ironically, Russian resistance to expansion proved  a blessing in disguise for the Kashagan consortium.  If Kashagan had come on stream as planned in 2008,  there would not have been the pipeline capacity  to take the oil to export markets. This is a problem  already facing Chevron and partners who have had  to invest heavily in railcars and barges to get rising  volumes of oil from Tengiz to export markets; and  the ENI/BG-led Karachaganak consortium, which  is similarly struggling to find export outlets for  rising production of high-value gas condensate.

Doubling capacity of the CPC oil pipeline and  raising capacity on the traditional Russian export  pipelines north via Samara to connect with the  Druzhba, and other ageing Soviet-era pipelines,  remains an essential part of the planned doubling  in overall export capacity from the North Caspian  basin. Russia will continue to play an important  transit function – and earn increasing transit  revenues – from central Asian oil and gas exports.

But the development of alternative, non-Russian export routes has been accelerated by Moscow’s  delaying tactics over CPC expansion. Moscow will

shortly lose an export pipeline monopoly, which is  a legacy of Soviet times and increasingly resented  throughout central Asia and the Ukraine.

Until now, Moscow has gained most of what it  sought, but at a potentially high longer-term price.  Some analysts say that had Russia kept to the spirit of the original CPC deal and allowed the pipeline to be  expanded as planned, central Asian governments and h oil companies might have been far less determined to h seek alternative export routes. They might also have  been less responsive to the growing interest shown  by China to acquire oil and gas assets in Central Asia,  and build and finance new oil and gas pipelines from  Central Asia east to the Chinese border.

Invest in Kazakhstan An official publication of the Government of the Republic of Kazakhstan, 2009. Pages: 44-50.



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