In 2024, Russia and Kazakhstan expanded cooperation in the field of oil and gas production. In the spring, LUKOIL acquired a stake in the fields of Kalamkas-More, Khazar and Auezov on the shelf of the Caspian Sea. The company will develop these projects in half with KazMunaiGas. According to the Ministry of Energy of Kazakhstan, it is planned to invest $6 billion in them. What benefits such cooperation promises for the republic, in an interview with Eurasia.Expert” explained Oleg Chervinsky, oil and gas analyst, publisher of Petroleum magazine (Kazakhstan)
– What are the key advantages for LUKOIL and KazMunaiGas associated with the purchase by a Russian company of a 50% stake in joint projects for the development of the Kalamkas-More, Khazar and Auezov fields?
– Answering this question, it should be remembered that initially the Kalamkas-More field was part of the contract territory of the North Caspian Consortium, along with Kashagan, and Shell planned to develop the Khazar block. They conducted geological exploration in these areas, made an assessment of reserves and in the fall of 2019. They announced the closure of projects and the return of the contract territory to Kazakhstan. The official reason was the low profitability of these projects against the background of high capital costs.
After that, Kazakhstan began searching for new investors to develop these fields. Negotiations were held with BP, but they were not successful. Negotiations with LUKOIL were successful, and the parties agreed to jointly develop these fields. Both sides have won in this project: Kazakhstan, represented by KazMunaiGas, and LUKOIL.
This is beneficial for Kazakhstan, because a serious investor with good competencies in offshore projects in the Caspian Sea is coming. LUKOIL has launched the Filanovskoye and Korchagina fields on the Russian territory of the Caspian shelf, the total production of which has already exceeded 50 million tons of oil. That is, LUKOIL is able to work in the conditions of the Northern Caspian Sea, which are difficult, and is ready to finance these works.
For Kazakhstan, this is a chance that the Kalamkas-More, Khazar and Auezov projects will finally get off the ground and commercial production will begin. LUKOIL is likely to integrate these fields into its existing ones, which will create a synergistic effect and make it possible to reduce the cost of production on these offshore projects.
– What are the expected socio-economic effects of creating new jobs at the stage of construction and operation of offshore platforms on the Caspian shelf?
– In addition to the fact that the fields will be launched and oil will flow from them, taxes will be paid to the state budget. An important socio-economic effect lies in two aspects. Firstly, offshore platforms for these projects will be assembled at Kazakhstani sites, for example, by ERSAI. This means that investments will remain with Kazakhstani manufacturers and service companies, and will not be withdrawn abroad.
Secondly, at the initial stage, 2 thousand jobs will be created, most of which will be occupied by Kazakhstanis. This is important, especially in light of the completion of the project for the future expansion of the Tengiz field, when thousands of workers will be demobilized. These new jobs will be very useful, and local residents will be trained in specialties for marine projects, undergo internships at LUKOIL projects, and adopt competencies and technologies. This will have a huge multiplier effect for the western region of Kazakhstan and the country as a whole.
– What factors contribute to the fact that 93% of Kazakhstan’s oil exports transit through the territory of Russia?
– Historically, about 90% of Kazakhstan’s oil exports transit through Russia. This is a consequence of geography, as Kazakhstan has no direct access to the sea. Since Soviet times, it has been using the Atyrau-Samara oil pipeline, which is still in operation. The main export route is the Caspian Pipeline Consortium (CPC), which transports about 80% of Kazakhstan’s oil exports.
This situation will continue in the coming years, as CPC is the shortest, cheapest and fastest route for Kazakh oil to enter world markets. Also, the shareholders of three large megaprojects in Kazakhstan (Tengiz, Kashagan and Karachaganak) are shareholders of CPC, which makes them interested in exporting oil through this pipeline. Therefore, despite the existence of other routes, they will be additional, not alternative to the CPC.
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