Page 20 - FSUOGM Week 20

FSUOGM PROJECTS & COMPANIES FSUOGM
Tengiz, Kashagan begin output cuts
KAZAKHSTAN
Kazakhstna is imposed OPEC+ production cuts.
OIL production at Kazakhstan’s Tengiz field, operated by Tengizchevroil (TCO), reportedly stood at 483,000 barrels per day (bpd) on May 14, 28% below the daily average seen during the first quarter of 2020, according Reuters’ calculations.
Similarly, daily output at the North Caspian Oil Company-operated (NCOC-operated) Kashagan oilfield stood at 318,000 bpd, down by 17% from the first quarter’s daily average.
The Kazakh government signed a decree on May 11 to cut oil output starting from May in line with a deal agreed in April by OPEC and non-OPEC oil producing nations. Kazakhstan’s energy ministry said on May 1 that the Central Asian nation was reducing production at certain giant, large and medium sized oil fields to meet the country’s commitments under the OPEC+ deal on global output cuts. None of the fields concerned were specified, but the Tengiz and Kashagan fields are the country’s biggest pro- ducers. Reuters reported previously, citing anon- ymous sources, that Kazakhstan was in talks with operating companies to reduce production at the two fields by 22%.
The oil production cuts under the govern- ment’s new decree were calculated individually
for each producer. The calculation relies on a for- mula based on daily oil output and export levels during the first quarter of 2020, the sources said, citing the document.
The production cuts will heavily impact Kazakhstan’s flagship export oil grade CPC Blend, three of the sources said. The CPC Blend loading plan for May, has been revised down to 4.58mn tonnes from 5.73mn tonnes. NCOC and TCO shareholders had to revise their export plans for CPC Blend crude at the last minute.
So far, TCO has had to cancel four cargoes and Eni, which has shares in the Kashagan con- sortium, has had to cancel one cargo loading scheduled for the end of May.
The Chevron-led TCO and the NCOC have not in the past been asked to take part in out- put-curbing deals. This time, however, the cuts required cannot be achieved without foreign investors’ participation. The fields supply all of their oil to the CPC pipeline and export it as CPC Blend crude.
The combined output of the Tengiz and Kashagan fields stood at around 900,000 bpd in 2019, accounting for more than half of Kazakh- stan’s oil production. ™
Rosgeo to explore Equatorial Guinea
EQUATORIAL GUINEA
Russian geologists were working in the African country in the 1970s.
TWO state-controlled Russian companies have agreed to conduct an onshore exploration pro- ject in Equatorial Guinea.
Under a contract with Equatorial Guin- ea’s Ministry of Mining and Hydrocarbons (MMH), the companies – Yuzhmorgeologiya and Zarubezhgeologiya, both of which are sub- sidiaries of Rosgeologiya – will be responsible for the first stage of seismic research and state mapping operations in the Rio Muni Basin. “Zarubezhgeologiya will conduct the reconnais- sance work necessary for further state mapping activities, and Yuzhmorgeologiya will carry out reconnaissance for complex seismic studies in the Rio Muni transit zone,” MMH explained in a statement on May 12.
The contracts lay out the parameters of each company’s assignment, the ministry said. They define the extent of drilling operations, spell out the possibilities for sampling, outline the condi- tions for the main part of exploration work and analyse technical capabilities for assessing the geology of the Rio Muni Basin, as well as lay- ing a foundation for work on the next stage of exploration.
Sergei Gorkov, the general director and board chairman of Rosgeologiya, said his company was eager to implement the contract. “Russian geologists laid the foundation for research work
in Equatorial Guinea back in the ‘70s of the last century,” he said. “‘We are pleased to resume suc- cessful co-operation between our countries and conduct exploration work in Equatorial Guinea at the highest professional level.”
Gabriel Mbaga Obiang Lima, the head of MMH, also expressed satisfaction with the deal. “These explorations will help expand Rio Muni’s potential in new oil, natural gas and mineral deposits,” he commented. “Co-operation with Rosgeologiya corresponds to the general atmos- phere of development of relations between the Russian Federation and the Republic of Equato- rial Guinea and will help build a serious research base in our country.”
The parties have been discussing the project for some time. According to MMH, the contract with Yuzhmorgeologiya and Zarubezhgeologiya was negotiated in line with an Agreement of Intent (AoI) signed during the Russia-Africa Forum, which took place in Sochi last October.
The ministry described the Rio Muni Basin as “one of the most promising areas for explora- tion in Equatorial Guinea,” saying that the region might hold sizeable reserves of minerals and other raw materials, as well as crude oil and nat- ural gas. Gaining access to these resources could help the country move forward with economic diversification efforts, it said. ™
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Week 20 20•May•2020