Page 16 - FSUOGM Week 44

FSUOGM POLICY FSUOGM

Kazakhstan offers up drilling

rights in first online auction

KAZAKHSTAN KAZAKHSTAN’S government is offering up At the other blocks, operator will be asked
rights to 10 oil and gas blocks in the coastal only to shoot 2D seismic surveys and drill one or
The strongest interest Atyrau region, in what is the country’s first ever two wells into shallow formations. The auction
is expected in the online auction for acreage. excludes existing oilfields already in produc-
Zaburunye and Companies will have until November 29 tion that are located within the blocks and are
Sarayshyk blocks. to apply to participate in the contest, and elec- operated by state-owned Embamunaygaz and
tronic bidding will take place on December 23. privately held operators.
Kazakhstan took the offering online in an effort Deep, high-pressure formations below
to attract foreign investors despite restrictions subsalt layers are touted as having significant
imposed to slow the spread of the coronavirus potential in Atyrau. Chevron and its partners
(COVID-19). The Central Asian state has seen are working on a project to expand output
a spike in infections in recent weeks, prompting from such formations at Tengiz by 260,000
the government to re-impose some quarantine barrels per day from the current 620,000 bpd.
measures. But there have been cost overruns and delays,
Atyrau is Kazakhstan’s oldest oil-producing with the expansion scheme now expected
province and is home to the country’s biggest oil- to require over $45bn, or 25% more than the
field, the Chevron-led Tengiz project. The gov- original budget.
ernment is offering the 10 blocks at a combined Kazakhstan has resumed licensing in a bid
starting price of KZT400mn ($920,000). Over 30 to revive exploration and find more oil and gas
applications have already been collected in the to replenish its reserves. The country still boasts
contest, according to officials. significant volumes of oil – some 30bn proven
Authorities expect the strongest interest to be barrels – but this resource is heavily concen-
for the Zaburunye and Sarayshyk blocks, whose trated at Tengiz and its two other major projects,
market values have been assessed at $63mn and Karachaganak and Kashagan.
$57mn respectively. The pair of blocks contain The government adopted a new subsoil code
both shallow conventional and deep oil reser- in 2018, aimed at cutting red tape and providing
voirs. Winning bidders will be required to col- investors with more incentives to explore for oil
lect 1,500 square km of 3D seismic data and drill and gas. It has also sought investors for projects
several exploration wells into both shallow and in the Caspian Sea, bringing on board Italy’s Eni
deep formations. and Russia’s Lukoil as partners. ™

P16 www. NEWSBASE .com Week 44 04•November•2020