Page 12 - FSUOGM Week 45 2019

FSUOGM PROJECTS & COMPANIES FSUOGM
Kashagan satellite fields return to state hands
KAZAKHSTAN
International investors gave up on the projects because of their high costs.
THE Kalamkas-Sea and Khazar oilfields off the coast of Kazakhstan have returned to state ownership, following a decision by Royal Dutch Shell and other investors to abandon plans to develop them, the Kazakh energy ministry said on November 11.
“The ministry is developing a road map for the further implementation of the projects,” it said in a statement.
Kalamkas-Sea and Khazar are two satellite fields of the giant Kashagan oil project. Kala- mkas-Sea was operated by the same operating consortium developing Kashagan, consisting of Shell, Eni, ExxonMobil, CNPC, Total, Inpex and KazMunayGas (KMG). Khazar, on the other hand, was controlled by Shell, Oman Oil and KMG.
As NewsBase reported in October, both groups gave up on the projects, which were to be developed jointly, citing their high costs. This came as a blow to Kazakhstan’s hopes of expand- ing offshore oil production beyond Kashagan,
which came online in late 2016.
The combined recoverable reserves of Kal-
amkas-Sea and Khazar have been estimated by Kazakh authorities at 67mn tonnes (491mn barrels) of oil and 9bn cubic metres of gas. The government had hoped that their launch would pave the way for development of Kashagan’s other, smaller satellites, such as Aktoty, Kairan and South-West Kashagan.
Kazakhstan needs to galvanise offshore devel- opment to reduce dependency on its three largest oil projects, Kashagan, Tengiz and Karacha- ganak, which together account for around 60% of national supply.
The energy ministry on November 11 raised its forecast for Kazakh production to 90.5mn tonnes (1.82mn barrels per day) from 89mn tonnes previously. Output reached an all-time high of 2.05mn bpd on October 24, far in excess of what the Central Asian state pledged to pro- duce under the OPEC+ deal on global supply cuts. ™
PetroSA, Rosgeologia continue talks on offshore blocks
SOUTH AFRICA
The pair first announced they would work together at the blocks in 2017.
SOUTH Africa’s national oil company (NOC) PetroSA is reportedly still in talks with Rosge- ologia, Russia’s state geological concern, on par- ticipation in the development of two offshore blocks.
Sources told Reuters last week that the par- ties were discussing a farm-in deal that would let Rosgeologia acquire a stake in Block 9 and 11A. They did not say when PetroSA expected to finalise negotiations, but one source inside PetroSA indicated that the Russian enterprise was particularly interest in carrying out more exploration work.
“There are certain parts of the block that are unexplored, so Rosgeo made an offer,” said the source, who spoke on condition of anonymity. He did not elaborate.
PetroSA and the Russian company first announced plans to work together in 2017 but have been slow to sign a final agreement. According to Reuters, PetroSA said in a pres- entation to the South African parliament’s portfolio committee on mineral resources and energy last month that it now hoped to wrap up talks before the end of this year.
This would represent a departure from earlier plans. A source inside Rosgeologia told Reuters last week that the parties had not been able to realise their hopes of reaching agreement in October, during the first Russia-Africa Summit. He did not say whether they had set a deadline for negotiations, but he did say that Russian side was drawing up a series of proposals on the implementation of the project and would submit its ideas to the South African NOC.
The parties are reportedly discussing a plan that provides for Rosgeologia to pay $359mn for a stake in Block 9 and 11B. They have not decided yet how much equity the Russian firm will be able to acquire, but they have said the deal lays the groundwork for an extensive exploration campaign involving geochemical studies, geophysical surveys and the spudding of six appraisal and exploration wells. Addi- tionally, they have indicated that Rosgeologia intends to finance its share of expenses through loans.
If the parties reach agreement, PetroSA will need to secure approval from its board of direc- tors and from the South African government.™
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w w w . N E W S B A S E . c o m Week 45 13•November•2019