Azernews.Az

By Aynur Jafarova

Kazakhstan's discovered and existing resources are big enough to supply the country with oil and gas in the coming 40-50 years, Trend Agency quoted Kazakh Oil and Gas Minister Uzakbai Karabalin as saying on January 16.

"It was proposed last fall under the auspices of Kazenergy to hold large geological exploration in the Caspian basin called 'Eurasia'," Karabalin said at the 15th meeting of the Kazenergy Association Council.

"The proposal aroused great interest among oil companies and countries that want to invest in this project," he said.

He also said last year Kazakhstan announced competitions for three exploration blocks.

"This year we are going to announce tenders for eight or nine blocks. Thus, geological exploration in promising regions are of great help for further increasing the hydrocarbon reserves in Kazakhstan," the minister said.

Regarding the shale gas, the minister said no specialized geological studies have been conducted in Kazakhstan for detection of shale gas.

"There is some theoretical knowledge saying there is a potential, but to what extent, and how remain to be seen. The geology committee's plans include studying future prospects for shale gas," he said.

"The technology for operating such fields requires large water consumption," he added.

Touching on the production figures, Karabalin noted the oil production in Kazakhstan amounted to 81.7 million tons in 2013 which is 3.2 percent more than 2012.

"It is planned to increase the oil production in the country up to 83 million tons in 2014," he said.

The minister also noted the forecasts show after 2020 around two million barrels of oil will be produced in Kazakhstan per day.

Development of new fields needed

Speaking at the event, CEO of the Kazenergy Association Aset Magauov said maintaining the level of oil production in Kazakhstan after 2025 will only be possible through the development of new fields.

The oil production in Kazakhstan in recent years is being kept at the level of about 80 million tons per year.

"The main production growth is expected to come with the development of major oil and gas projects (Kashagan, Tengiz, Karachaganak), which will offset the projected decline in production at other fields," the CEO said.

"Meanwhile, after 2025 it will be possible to maintain the level of production only through the development of new deposits," Magauov added.

He said it is also necessary to take into account that delivery of Kazakh oil to domestic markets will grow following modernization of the country's refineries and a possible reduction in supplies of Russian oil.

"The oil refineries' utilization without involving oil supplies from the major projects and provision of equal prices for oil is not possible," he said.

Kazakhstan, one of the five Central Asian countries, is rich with hydrocarbon reserves. The county's largest hydrocarbon fields are Kashagan, Tengiz, and Karachaganak.

The recoverable oil reserves of Kashagan field are estimated at 11 billion barrels, whereas total geological raw material reserves stand at 35 billion barrels. Besides, natural gas reserves are estimated at over 1 trillion cubic meters.

The Tengiz oil field is one of the deepest and largest oil fields in the world. Reserves of the deposit 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 are 1.35 trillion cubic meters.

Deficit of marketable gas expected

Magauov went on to note that according to the current forecasts on the production and consumption of the gas, the deficit of marketable gas is expected to start in Kazakhstan in 2023.

He also said after 2030, when the production of liquid hydrocarbons on these deposits will decline, significant volumes of gas can release, and in this case, processing facilities will be needed.

Kazenergy Association's CEO believes during this period it will be necessary to develop and implement mechanisms for encouragement of marketable gas production in Kazakhstan, to continue reducing the amount of gas flaring and optimize its spending by subsoil users, to limit the pace of development of gas generation till obtaining a stable resource base of commercial gas, to define the volumes and stages of gasification within the general scheme, and concentrating on implementation of the most socially important and economically attractive projects.

Oil transportation via BTC

Karabalin also announced the volume of Kazakh oil which will be transported via the Baku-Tbilisi-Ceyhan (BTC) pipeline.

He said at a press-conference following the meeting that the expected volumes of Kazakh oil transportation via BTC will amount to three million tons in 2014.

"Tengizchevroil shareholders conclude the agreements on the Tengiz oil supplies with the owners of the Baku- Tbilisi- Ceyhan pipeline," the minister said.

"The matter rests in three million tons of oil this year. These are the expected volumes," he added.

"The route across the Caspian Sea via Aktau port to Baku and further via BTC is "a proven way", he said.

"Tengizchevroil previously made a bid for the transit of its oil in this direction," he noted.

"This direction is important and interesting for Kazakhstan. The transit through the BTC will be supported by us as far as Tengiz and other oil field development in Kazakhstan," the minister explained.

Earlier, Tengizchevroil Consortium, which is engaged in developing Kazakhstan's Tengiz and Korolev oil fields, signed an agreement to resume oil transportation through the BTC pipeline.

Oil transportation through the pipeline had come to a stop in 2008.

The BТС pipeline, with a total length of 1,768 kilometers, carries crude oil from the Azeri-Chirag-Gunashli oil fields in the Caspian Sea to the Turkish Mediterranean coast.