Kazakhstan is partnering with multinational oil and gas companies to create what officials consider strategic reserves of hydrocarbons, as a deal was signed last week for geological exploration of the Kalamkas-Sea deposit in the Caspian basin.
As part of the agreement, the North Caspian Operating Company (NCOC), including energy giants such as Eni, Shell, ExxonMobil, Total, CNPC, Inpex and Kazakhstan’s state-owned KazMunayGas, will design a field development plan by late 2019. The consortium plans to launch oil production in 2022.
“The signing of the agreement opens up new opportunities to increase investment in the development of offshore fields in the Kazakh segment of the Caspian Sea,” read a statement by Kazakhstan’s Energy Ministry.
Starting in 1997 when the North Caspian Sea Production Sharing Agreement was signed, Kazakhstan and world’s largest oil and gas operators have been exploring the Caspian country’s deposits jointly through the North Caspian Operating Company. Each shareholder is independently responsible for transporting and marketing its share of production and for reporting and sharing that production with the government.
The project is the first major offshore oil and gas development for Kazakhstan covering five fields, namely Kashagan, Kalamkas-Sea, Kairan, Aktoty and Kashagan South West. These areas consist of 11 sea blocks covering approximately 5,600 square kilometers.
Apart from Kashagan, which is considered Kazakhstan’s largest oilfield, the consortium holds rights to develop three smaller nearby fields in the Caspian Sea. One of those is Kalamkas-Sea, an offshore field located 150 km north-west of the Buzachi Peninsula.
The NCOC announced a commercial discovery at Kalamkas-Sea in 2013. According to the ministry’s reports, geological reserves were estimated at 150 million tons of oil, 15.4 billion cubic meters of dissolved gas, and 15.36 billion cubic meters of dry gas. Officials say investment for the development of the Kalamkas-Sea field may reach $70 billion.
“The only thing that we look forward to from NCOC is the development of the Kalamkas field, which will be identical to the Kashagan field, and the investment package there will be very large,” Rashid Zhaksylykov, who leads the Union of Oilfield Services Companies of Kazakhstan, said earlier this year according to reports by Interfax. “We expect it to be around $70 billion if Kalamkas is launched,” Zhaksylykov said.
Meanwhile, preliminary work is continuing at the neighboring Khazar field, discovered in 2007. Located in the contract area of the Pearl Sea offshore section, it is operated by the Caspi Meruerty Operating Company BV in accordance with the Production Sharing Agreement (PSA) signed in 2005. The parties to the PSA are Shell, KazMunayTeniz, which is a subsidiary company of KazMunayGas, and Oman Pearls Company Limited.