Kazakhstan needs strategic reserve of hydrocarbon materials: analyst
By Aynur Jafarova
Kazakhstan needs a strategic reserve of hydrocarbon materials to reduce dependence on the fall in world oil prices, Kazakh political analyst Daniyar Ashimbayev has said.
"We know this from the examples of the U.S. and the European Union, which have had strategic reserves of hydrocarbon materials for a long time in order to protect the domestic market from unforeseen situations as well as for intervention in the world markets with the aim to stabilize the prices on raw materials. The idea of creating a strategic reserve of hydrocarbon materials in Kazakhstan has the same purpose," the expert told Trend news agency on Tuesday.
Earlier, Kazakh Oil and Gas Minister Sauat Mynbayev said it is planned to create a strategic reserve of hydrocarbon materials in the country.
Ashimbayev said that Kazakhstan has established a National Fund which accumulates funds from the sale of hydrocarbon materials in world markets. There is also the Committee on State Material Reserves of the Kazakh Ministry of Emergency Situations, which stocks fuel designated for emergencies.
The strategic reserve of hydrocarbon materials is being established for this purpose as well, Ashimbayev said.
Currently all the oil produced in the country is exported and processed at local oil refineries. There are almost no reserves available. The Kashagan field will be commissioned soon, which will increase the oil production volume. However, currently oil prices are not as high as desirable.
"The state can buy some volumes and hold them while waiting for higher prices on the world market," Ashimbayev said.
He believes it is sufficient to accumulate a two to three-week oil production volume in the strategic reserve of the country.
"However, the issue of constructing oil storage tanks, which we do not have, will arise as all the oil the produce is exported and processed. The issue of allocating funds will also emerge," the expert added.
According to reports, oil and oil-gas condensate production in Kazakhstan amounted to 79.2 million tons in 2012, while gas production stood at 40.1 billion cubic meters.
Oil and Gas Minister Sauat Mynbayev said earlier that according to the strategic plan, Kazakhstan's oil production volume for 2013 is expected to be 82 million tons, while the production forecast for raw gas is 40.5 billion cubic meters.
Kazakhstan's largest hydrocarbon fields are Kashagan, Tengiz and Karachaganak.
Recoverable oil reserves of Kashagan are estimated at 11 billion barrels, whereas total geological raw material reserves stand at 35 billion barrels. It is believed to be the largest oil field in the world after Prudo Bay in Alaska. Also, its natural gas reserves are estimated at over 1 trillion cubic meters.
The commencement of commercial production at Kashagan is expected by mid-2013. The first phase of the project envisions production of around 370,000 barrels of oil per day with a possible increase to 450,000 barrels. The second phase envisages increasing production to 375,000 barrels per day within at least three years.
The Tengiz oil field was discovered in 1979 and is one of the deepest and largest oil fields in the world. Reserves of the Tengiz field are estimated at 750 million to 1.1 billion tons (6-9 billion barrels) of recoverable oil.
Karachaganak is one of the world's largest fields. Its oil reserves amount to 1.2 billion tons, while those of natural gas - 1.35 trillion cubic meters. 49 percent of Kazakhstan's gas production and 18 percent of oil production comes from this field.