Gov’t, Consortium Set to Improve Management of Kashagan Oil Field

ASTANA – By this September, a new operator will be created for the development of Kazakhstan’s Kashagan oil field, said Kazakh Minister of Oil and Gas Uzakbai Karabalin at a May 27 press conference. Hydrocarbon production volumes are still predicted to grow, the minister added.

The shareholders of the international consortium currently developing the Kashagan deposit and the Kazakh government have paid serious attention to the way the current management company, the North Caspian Operating Company (NCOC), has organised the development of the site. It was decided to change the style and format of this structure.

“We were not satisfied with the system of organisation. It was expensive and, most importantly, the hierarchy in NCOC was very difficult, which in turn complicated decision making,” said Karabalin.

By September, a new management system involving the best specialists from among all contractors and members of the international consortium will be created. “Now, the control system will be simplified. And as the project is soon expected to move to the production phase, we need efficiency in decision-making,” the minister said.

A New Concept for Developing Fuel and Energy Complex

At their May 27 meeting, Kazakhstan’s cabinet considered the draft concept for the development of the fuel and energy complex (FEC) of the country to 2030. It is expected that by 2030, Kazakhstan’s production volume of oil and condensate will reach 112 million tonnes. Last year, this figure approached 82 million tonnes. Thus, despite the recent problems and dalays at Kashagan, the government expects to increase the production of hydrocarbons at the account of this field after eliminating all the problems.

According to the minister, the emphasis in the oil and gas sector will now be placed on increasing the oil recovery factor (ORF), as well as the innovative development of the industry and the creation of infrastructure and scientific-research support.

Deputy Prime Minister and Minister of Industry and New Technologies Asset Issekeshev discussed the new concept for FEC development in detail at the same press conference. “The new concept will revise approaches to FEC management,” he said.

The estimated volume of investment in the energy sector in the coming years is about $2 billion, largely from private investment. The investment will ensure the construction of new generating facilities that will produce an additional 500 megawatts per year and the modernisation of existing power plants with capacities of 600 megawatts. All forms of energy will be taken into account.

“The balance of power-generating capacities, approved in the concept, eliminates shortages and ensures energy security. Due to the engagement of nuclear power plants in the electricity balance, by 2030, a surplus of electricity will be exported,” he said.

No less important in the concept is the approach to the development of the coal industry in Kazakhstan. According to Issekeshev, despite the introduction of green technologies, coal generation will remain the main energy source up to 2030.

“At the same time, no substantial increase of coal generation is expected in the total production of electric power,” he went on. “The projected 2030 volume of coal production is 113 million tonnes a year.”

The reason for continuing coal mining is that Russia has reduced consumption of Kazakhstan’s coal in connection with its transition to its own coal, and domestic consumption will be moderate. Therefore, the emphasis will be placed on increasing the depth of coal processing and the use of environmentally safe technologies in coal generation. The country aims to develop coal chemistry.

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