The joint development of Kazakhstan’s Kalamkas Sea and Khazar offshore oil fields has been the key greenfield project to watch in Kazakhstan’s oil sector, principal analyst at Wood Mackenzie Ashley Sherman said, Trend reports with reference to Kazakh media.
He made the statement in regards to Shell’s withdrawal from the Khazar project, and the Kashagan consortium’s decision to pull out of the Kalamkas Sea fields.
“Its timeline may have been long – with production not targeted until the late 2020s – but the project would have offered something vital: large-scale future oil production away from the country’s three megaprojects: Kashagan, Tengiz, and Karachaganak,” he said.
He further added that while the timing of the decision may surprise, given the ‘define’ stage could have enabled more studies and potentially more cost savings from a $5 billion estimate, the decision itself highlights the project’s marginal economics in the highly competitive global portfolios of the majors.
“Kalamkas Sea and Khazar are the fields that will undoubtedly attract future interest from international investors, just like nearby exploration blocks were since Kazakhstan’s tax reforms in 2018. But this is another reality check for the Caspian region’s oil and gas industry,” he said.
He noted that whether it’s because of tough logistics or complex geology, the shallow waters of Kazakhstan’s offshore face obstacles to full competitiveness against lower-cost deepwater opportunities elsewhere in the world.
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