Kazakhstan President Nursultan Nazarbayev was in the Kingdom last week. His country currently produces a little over 1 million barrels of oil per day. The purpose of the president’s visit was to improve cooperation with the world’s largest oil producer, Saudi Arabia.
During the visit Nazarbayev met SABIC Chairman Mohammed Al-Mady to discuss how Kazakhstan could emulate and learn from the SABIC experience.
According to the US government, Central Asia, including Kazakhstan, has proven reserves of roughly 16 billion barrels of oil — roughly equal to those in the North Sea. Estimates of the region’s potential reserves range from 70 to 200 billion barrels. Of the Central Asian states, Kazakhstan has the largest oil potential. It is already working extensively to tap its energy resources. Oil majors are already at work in some of its oilfields in order to increase output.
The current production at its Tengiz field is believed to be some 285,000 barrels a day (bpd). This is projected to increase to 450,000 bpd by the year 2006 and to 700,000 bpd by 2010.
From the Karachaganak oilfield, production is currently 100,000 bpd and this is projected to increase to 240,000 bpd by 2005. The agreement signed last Wednesday with the oil majors to develop the Kashagan oilfield, regarded as the largest in the country, is significant in many ways. The field in the northern Caspian Sea is probably one of the world’s largest untapped deposits but it is also one of the most difficult to exploit.
Now KazMunaiGaz, the state oil regulator, and global oil majors including Total, Shell, ExxonMobil Corp., Agip, ConocoPhilips and Inpex have agreed on a 30-year development plan for the giant field.
The agreement could see some $30 billion pumped into the field’s development. Discovered in 2000, the field is estimated to contain 38 billion barrels of oil, making it one of the largest discoveries in the last three decades.
The oil deposits, located in the ecologically sensitive shallows of the northern Caspian Sea, present extraordinary challenges, which is why it was passed over by Soviet oilmen in favor of easier deposits in Russia and Azerbaijan.
Under the terms of the agreement according to the oil companies, commercial oil will flow by early 2008. Production is then projected to grow from 400,000 barrels a day in 2010 to 1.2 million barrels a day by 2018 — about as much as the entire production of countries such as Indonesia, Libya or Algeria.
By then, together with other fields developed by the oil majors in the country, the sparsely populated former Soviet republic is expected to produce 3.2 million barrels a day, making it one of the world’s top five exporters.
