The year 2019 you can freely call a year of breakthrough in Kazakhstan local content development in oil and gas projects of the country. Mineral resources users published plans of purchases and gave domestic business an opportunity of planning development of own companies and specialists. Great expectations are placed on local content development in the year 2020.
1. A law on economic and industrial zones has been adopted
This year a new law of the Republic of Kazakhstan “On special economic and industrial zones” has been adopted, which is to motivate Kazakhstan and foreign companies to invest into foundation of production facilities in Kazakhstan.
2. Mass fight on Tengiz and reduction of quota for bringing of expatriates
On the 29th of July a conflict took place between Kazakhstan and foreign workers of CCEP company in Tengiz rotational village. More than 40 persons were injured. “Currently we form a quota for the following year, we intend to propose to the government to reduce this quota almost twice, we want to make more stricter requirements for involvement of foreign specialists of the fourth category, these are industrial trades”, – said the Minister of labor and social security – Birzhan Nurymbetov after the conflict.
3. Total and NCOC for the first time have published the plan of purchase of “Dunga” deposit field
Total E&P Dunga GmbH operator has for the first time published the list of goods, works an services, which it plans to purchase in 2019 for Dunga deposit field. We remind, that Dunga deposit field was put into test operation in 2000. In the period from 2004 to 2006 the deposit field was developed within frames of “Pilot industrial development project” with drilling of horizontal and vertical wells.
4. NCOC N.V. refused from development of Kalamkas-more deposit field
North Caspian Operating Company N.V. (NCOC N.V.) refused from development of Kalamkas-more deposit field on Caspian sea shelf. The consortium took the decision not to continue development of Kalamkas-more deposit field. The decision is based on complicated economical conditions of the project. New investors will work not under the product sharing agreement of the Northern Caspian sea, but in accordance with the Republic of Kazakhstan Tax code.
5. Development of operating deposit fields and geological exploration
Kazakhstan and Total agreed on realization of phase 3 of Dunga deposit field development, under which the companies will invest around 300 millions of US dollars. Also Kazmunaigas and Eni agreed on development of Isatai and Abai blocks in Caspian sea. LUKOIL public joint stock company and KMG will carry out joint exploration of hydrocarbons on Zhenis block.
6. New gas treatment factory is planned to be constructed in Kashagan
Kazakhstan refused from construction of gas treatment factory on Karachaganak deposit field due to the need for re-injection of gas for further increase of condensate production rate. North Caspian Operating Company (NCOC) oil consortium considers the possibility of constructing a gas treatment factory on Kashagan, the cost of which is 1 billion of US dollars.
7. Plans to increase investments into Tengiz
Chevron advised of the possibility of increasing the budget of Future growth project – Wellhead pressure management project (FGP-WPMP) on Tengiz field from 37 to 45.2 billions of US dollars (with additional 1.3 billions of US dollars for the case of unforeseen expenses).
8. Intensification of PetroCouncil work
Council for development of strategic partnerships and oil and gas branch founded under the auspices of “Atameken” Republic of Kazakhstan national chamber of entrepreneurs and KAZENERGY Association started its active operation as to improvement of business relatiosn between all concerned parties. Also the council carries out work in educational, communication, public fields. It fosters development of Kazakhstan local content in large scale projects and acts as a dialog platform.
9. Nurlan Nogayev has been appointed Republic of Kazakhstan Minister of power industry
Ex-mayor of Atyrau region – Nurlan Nogayev became the head of Kazakhstan Ministry of power industry, and ex-minister Kanat Bozumbayev was appointed an assistant of Kazakhstan president. Nurlan Askarovich worked in the position of executive director of KazMunaiGas national company as well as he was the head of oil industry department of the Ministry of power industry and mineral resources.
10. “Saryarka” trunk gas pipeline has been put into operation
The first stage of Saryarka trunk gas pipeline has been put into operation, the purpose of the gas pipeline is to provide gas supply to the capital city, central and northern regions of Kazakhstan. The first people to receive gas this winter will be residents of Nur-Sultan, Karagandy, Temirtau, Zhezgazgan and around 2.7 millions of persons of 171 nearby residential places located alongside the gas pipeline.
11. Growth of petroleum and petroleum products export
Kazakhstan launched export of gasoline to Tadzhikistan, Afganistan and Uzbekistan. Also the Republic of Kazakhstan plans to sign agreements on supply of petroleum and petroleum products also with Armenia, Republic of Belarus and Kyrgyzstan. Moreover Kazakhstan oil refineries started supplies of motor road vehicls gasoline to Europe. Thus, Atyrau Oil Refinery LLP launched shipment of the first lot of AI-92 lead free gasoline of K5 ecological class to european markets.
12. Development of renewable energy sources in the Republic of Kazakhstan
Eni plans to allocate 1.4 billions of Euro for projects of renewable energy sources, whereas 15% (210 millions) of this amount will be made by investments to Kazakhstan projects. “Kazakhstan has a potential of developing solar energy especially on the south of the country. We are going to explore new commercial models and business areas. These are wind generators, solar cell panels as well as new sources of energy, for example, geothermal sources”, advised representative of Eni.
13. Project of new environmental code has been provided for consideration
Project of new environmental code will be submitted for consideration to parliament, which aims at protection of the environment and monitor of mining industry operation. In the opinion of oil and gas industry representatives adoption of the new code as a minimum will lead to additional expenses of mineral resources users and development of domestic system of wastes processing and disposal.