On September 13, 2018, a major investment project was launched at the Karachaganak field (a project to lift production restrictions for the Karachaganak processing complex gas - SPOG), an agreement on the implementation of which was signed between the Kazakhstani Authorized Body - “PSA” LLP and the Ministry of Energy of the Republic of Kazakhstan; shareholders of the project in the person of the companies Eni, Shell, Chevron, Lukoil and KazMunayGas (hereinafter - the Consortium).
Thanks to the project, the maximum level of production at the Karachaganak field will be maintained. This project, being one of the largest investment projects with a budget of 1.1 billion US dollars, will ensure the receipt of additional revenues to the budget of the Republic of Kazakhstan in the amount of more than 3.2 billion US dollars in the period until 2037.
As part of this project, the minimum share of Kazakhstan's content in the procurement of goods, works and services will be 40% and 75% when hiring staff.
This project will allow the processing of additional volumes of crude gas to 4 billion m3 per year. These volumes of gas will be used for re-injection into the reservoir to maximize the production of liquid hydrocarbons, an additional increase of about 10 million tons. It will also serve as a resource for the implementation of subsequent investment projects in the field.
As the General Director of “PSA” LLP, M. Zhurebekov noted: "Negotiations with the Consortium were rather complicated. Thanks to the active leadership of the Ministry of Energy, we managed to reach mutually acceptable terms with the Consortium and successfully conclude the negotiation process. This project is characterized by the use of the so-called cost control mechanism, the essence of which is that the responsibility for implementing the project within the agreed budget and schedule falls on the Consortium. And in the event that the agreed parameters of the project cost are exceeded, such extra costs will be incurred at the expense of the project shareholders.
The use of advanced technologies in production will allow to keep the volume of liquid hydrocarbons production and exports at a consistently high level, which in turn have a positive impact on revenues in the budget from the Karachaganak project.
The project will attract additional investments and create a large reserve for local construction and oilfield service companies. At the same time, Kazakh specialists, as before, will play a leading role in the forthcoming work.
Progress Information
The Karachaganak project is implemented within the framework of the Final Production Sharing Agreement concluded between the Government of the Republic of Kazakhstan, the Alliance of Foreign Companies represented by British Gas / Shell (29.25%), ENI (29.25%), Chevron (18%), Lukoil (13 , 5%) and the national company KazMunayGas (10%).
The project is currently in the stage of Field Service Phase 2 (hereinafter referred to as Stage 2M), which is supported by the annual production volumes achieved in Phase 2 of 11 million tons of liquid hydrocarbons and 16.5-17.5 billion cubic meters of gas.
Since the beginning of the FSOE, the field produced about 193.8 million tons of oil and 255.8 billion cubic meters of gas. Reverse injection of gas into the reservoir over the same period amounted to about 101.8 billion m3.