Black gold of Kazakhstan

According to forecasts, the minimization of oil import, as well as securingfully thedomestic consumption, will be achieved by the State in 2020. What are theother oil forecasts and realities of the present day?

According to the Minister of the Oil and Gas, Uzakpay Karabalin,based on the current realities of the industry, the maximum volume of the oil production in the country will be reached in 2024-2030.”In 2050, we expect the reduction of the volume down to 30-50 million tons, if we do not start the exploitation of a new oilfield”- said, the Minister. In addition he explained that such scenario is possible undera pessimistic forecast.

And if one looksfrom the perspective of solving the emerging problems, the major role in production volumes will be playedby the second phase of the Kashagan development and someotherplannedbut not yet approved projects.

The first oil on the Kashagan oil field was produced on September 11, 2013. The start of the drilling operations at Kashaganwas repeatedly postponed, due to technical difficulties, although it was scheduled already for 2005. "This oilfield is huge, unique in the world, but at the same time, it is a very complex one. Production has begunand all systems are adjusting. The work is going well", - the Minister said.

The oil was found here in 2000 and this oilfield was immediately recognized as the most significant discovery of recent decades. Kashagan will achieve a commercial level of the oil production already this October, as intended, and about 8 million tons of oil are expected to be produced in 2014.

For reference

Kashagan is a large oil and gas field, located in the north of the Caspian Sea. Geological reserves of oil are estimated at 4.8 billion tons. Common oil reserves are 38 billion barrels;about 10 billion of whichare extractable. Kashaganhasalso large reserves of natural gas - more than 1 trillion cubic meters.

Participants of the Kashagan project are the companies Eni, Royal Dutch Shell, ExxonMobil, Total and "KazMunaiGas", which own equal shares (16.81%), and the American ConocoPhillips (8.4 %) and Japan's Inpex – (7.55 %). The project is managed by a joint operating company North Caspian Operating Company BV.

The first oil gusher was extracted in Kazakhstan in 1899 in the oilfield Karashungul.

UzakbaiKarabalin said, in the central communications service, that Karachaganak, another active large oilfield, is expected to expand. "Vision and concept of the further expansion will be formed by the end of this year", - the Minister said and added that the development of this field will proceed in the established order, if this concept is acceptable for both the investor and the country.

Karachaganak project is run based on the Final Production Sharing Agreement (FPSA), concluded between the Government of the Republic of Kazakhstan and the alliance of foreign companies. The agreement came into force in 1998 and its duration is 40years.

As for the other forecasts, the head of the department said: "minimizing of oil import, as well as securing fully the domestic consumption will be achieved by the State in 2020. The maximum level of export of the Kazakhstan oil ismore than 90 million tons and it is expected in 2025. The main routes of oil transportation to the foreign markets will go through the CPC pipeline, "Atyrau - Samara", "Kazakhstan - China." Oil transportation on railroad tracks was determined through the Aktau port.

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