Page 12 - FSUOGM Week 27 2019

FSUOGM INVESTMENT FSUOGM
Total clears Dunga expansion
KAZAKHSTAN
Previous expansions envisaged at the site were much grander.
FRENCH oil major Total has signed o on the next-stage development of an oil eld in western Kazakhstan, a er securing a production-shar- ing agreement (PSA) extension from Kazakh authorities.
e Dunga deposit lies in Kazakhstan’s pro- lific Mangyshlak Basin and has been in pro- duction since 2000. While only a minor project by Kazakh standards – it currently ows only around 18,200 barrels per day of oil – Total has described the asset as low cost. e French rm acquired a 60% stake in Dunga last year a er buying Denmark’s Maersk Oil, while its part- ners Oman Oil and Portuguese investment fund Partex each have 20%.
In a statement on July 4, Total said that together with its partners it had approved phase three of Dunga’s development. By sinking new wells and upgrading processing capacity, the company aims to ramp up production to 20,000bpd by 2022 and recover an extra 70mn barrels of reserves.
“ is low-investment-cost-per-barrel devel- opment maximises the field’s potential and extends plateau production,” Total’s upstream president, Arnaud Breuillac, commented.
Total said the new investment had become possible a er the Nursultan government agreed to grant a 15-year extension to the eld’s PSA, which been due to expire in 2024. As part of
this deal, Kazakhstan’s share of profits from the project will rise from 40% to 60% by 2025, according to the government. e eld will also provide some oil to the domestic market.
The original development contract for Dunga was signed in 1994 by Oman Oil, which went on to farm out interests to Partex and later Maersk. e partners achieved rst oil from a $1bn second development phase in late 2012, with Maersk pledging to drill almost 200 wells within three years to bring production up to a plateau of 25,000-30,000bpd .Some of this drill- ing work was deferred in light of the oil price crash, however. Maersk also abandoned plans for a third phase, which targeted an output of up to 40,000bpd.
Total’s more modest expansion will cost $300mn and create an additional 400 jobs at the peak of construction work.
e French company is also involved in the o shore Kashagan project in Kazakhstan, one of the world’s largest oilfields that currently produces at a rate of 400,000bpd. Sources told Reuters in May that the IOC was looking to reduce its 16.8% stake in the venture by around a third, however, and had started negotiations on the sale with a Chinese national oil company. Total’s Breuillac held talks last week on future prospects at Kashagan with Kazakh President Kassym-Jomart Tokayev.™
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w w w . N E W S B A S E . c o m Week 27 09•July•2019