kazenergy forum20 years –Developmentof the Energy Sectorof KazakhstanAchievements. Problems. ProspectsASauatMynbayev,Minister of Oiland Gas of theRepublic ofKazakhstanccording to the proven oilreserves, Kazakhstan isranked the ninth in theworld. (Slide 1). This data isfrom independent resources.I believe we have groundto expect an increase in reservesin the future takinginto account the estimatesof our geological reservesand the large-scale geologicresearch.We had somewhat reductionof the reserves before 2001,but later on you can see anessential increase. I must say, this increasewas mainly due to opening of Kashaganfiled, and increase in reserves at Tengiz field.In general, this demonstrates the successachieved in the geological sector of Kazakhstan.The crude production increased over threefoldin 20 years, the gas production – fivetimes. (Slide 2). The volume of hydrocarbonsis expected to increase essentially in the future.In these terms Kazakhstan is one offew states with the production peak ahead,At the present slide, do not be confused bythe last line. Production growth of commoditygas is non-essential, in fact. The issueis that our gas is mainly associated gas. Itmeans that for the purpose of full extractionof liquid fractions, a part of the gas producedis injected back to the stratum.However, firstly, this gas may be extractedin future. Secondly, in case of the changes inthe commercial marketing terms or the implementationof technological innovations,the production volumes of gas may be easilyincreased.At Tengiz, we are currently working on theFuture Growth Project, which is planned toincrease the extraction volume from current26 million tons to 36 million tons per year.I assume, it will be submitted for review tothe authorities.Great work on development of Kashaganproject has been conducted. The commercialproduction is expected to start in December2012 – June 2013. As you know, the productionvolume at the first stage of the project isexpected to reach 370 thousand barrels perday with potential increase to 450 thousandbarrels. Yes, the uncertainty still remains20 № 5 (<strong>49</strong>), <strong>2011</strong>
with regard to the consequent second stage.But, I believe that close cooperation betweenthe contracting companies and authorities,the compliance of suggested decisions to thebest world practice, consideration of mutualinterests may provide the project with thegreater success.Regarding N Block: our national companyKazMunayGas with 51% share worksin partnership with ConocoPhilips andMubadala companies. The first well ( R-1)has been already drilled in RakushechnoyeSea and the first confirmation of hydrocarbonspresence received. The explorationoperations are conducted in full compliancewith the work program and we expect theirsuccess continuation.Regarding Zhemchuzhina structure: KazMunayGasis operating in partnership withShell (55%) and Oman (20%). Besides, theexploration works proved presence of oil andgas on Auezov and Khazar structures. Theproject parties are preparing the field developmentstrategy,Satpayev and Zhambyl blocks are the initialstage of exploration, however, we expect confirmationof essential reserves of raw hydrocarbondeposits. Satpayev structure is beingdeveloped under the cooperation with theIndian ONGC Videsh Limited (OVL) withthe share of 25% to 35%. Zhambyl Block isbeing developed in cooperation with the KoreanNational Oil Corporation (27%).In the near future, we are going to commenceexploration in Abay Block with theNorwegian StatOil; later, at Khvalynskoyeand Tsentralnaya structures in the partnershipwith the Russian GasProm and LukOil.The issues with the Russian state authoritiesare remaining open. Our plans are tocreate a partnership with the Italian ENI atShagala and Isatay Blocks.Finally, I should note the NC KazMunayGasin 2010 and <strong>2011</strong> opened fields at Liman andUrikhtau structures. They are under detailexploration and evaluation process.The register of the Ministry of Oil and Gasincludes 61 exploration contracts. The geologicalrisk always exists. Dry wells at Tyub-Karagan and Kurmangazy structures verifythis fact. Nonetheless, we definitely havea solid ground to account for a significantgrowth in reserves and production of liquidhydrocarbons.The environmental aspects of the activityrelating to the hydrocarbons production becomecrucial due to the increase in production.I would like to show the dynamics of oneindicator only, the volume of the flared gas.Note that these volumes are in inverse rationto the production and in 2010 the volume ofthe flared gas achieved 1.4 billion cubic meters,which was 3.6% of the produced gasincluding the volumes of technologically inevitableflaring. This indicator is lower thanlet’s say in Norway, but it is higher than inmany countries, including those with a longoil extraction history. I must note that thelegislative requirements to this aspect willbe strengthened.Kazakhstan does not have access to the opensea. Therefore the export access, mainly providedthrough pipelines, is essential. This isa map of the existing pipeline system.The first direction is Atyrau – Samara withthe following entry to the Eastern Europevia Russia. The second is CPC with the accessvia the Black Sea. The third is an operatingoil pipeline to China, Atyrau – Kenkiyak,Kumkol – Atasu – Alashankou.The fourth goes via Aktau port to Makhachkala,Baku and Neka. Then via the Black Seathe pipeline Baku – Tbilisi – Ceyhan goes tothe Mediterranean, through SWOP operationwith Iran it goes to the Persian Gulf.With the commencement of the second stageof Kashagan, we expect to launch a logisticroute of Kazakhstani – Caspian TransportationSystem (KCTS).The third slide demonstrates the actual andforecasted transportation volumes of the exportedoil. We have done great work in thisfield during 20 years of our independence.It includes CPC construction, Aktau portexpansion, opening of a conceptually newAt Tengiz, we arecurrently workingon the FutureGrowth Project,which is plannedto increase theextraction volumefrom current 26million tons to 36million tons peryear.KAZENERGY21