According to an interview given by the Kazakh Energy Minister, Kanat Bozumbayev, to the Interfax-Kazakhstan agency, the project aimed at increasing the production at the Kashagan field can be less costly.
330 thousand barrels have been stably produced each day at the Kashagan field, with planned 370 thousand barrels for the latter part of 2019.
The 2016 field development concept stipulates a planned implementation of the gas re-injection project "Compression center - 01" (CC-01) within five years, from 2019 to 2024, allowing ramp-up of production from 370 thousand to 450 thousand barrels per day. The CC-01 concept was approved, envisaging the construction of a new artificial island for two natural gas re-injection compressors which could allow ramp-up of production to 450 thousand barrels per day by 2023-24. However, taking into account the current oil prices and geological data such as the permeability, the operator (North Caspian Operating Company) works on the concept, increasing the gas re-injection volumes. Thus, it seeks to make the CC-01 easier and cheaper without a new artificial island. Now the engineering study is currently underway, as well as the choice of concept, however, the project's implementation terms will remain, which is to reach the production level of 450 thousand barrels per day in 2023-24," said Bozumbayev.
The Minister has noted the possibility to increase oil flowing to the domestic market starting this year, increasing the flow to the Atyrau refinery, companies in Mangystau and Atyrau. The same is also true for Petrokazakhstan (Shymkent refinery) - oil from the Kyzylorda and Aktobe regions, in Pavlodar (Pavlodar refinery) - the western and any other companies will pursue import substitution.
We will aim at export netback, however, it seems unlikely to get very close. We have reached 30-35 dollars per barrel thanks to the cost of raw material, and it is good once we have reached 40 dollars per barrel. I think, taking into consideration the new entry points and the increased processing depth, the profitability of oil refineries should rise. We will additionally have export opportunities (for oil products, petroleum) without any price restrictions, thus rising profitability for oilmen. We do not anticipate a rapid rise in oil products within the country. As you know, we overproduce petroleum, there is a balance in terms of diesel (indicative balance in terms of petrol, oil, and lubricant with Russia). As to diesel, as I've already mentioned, we will strengthen the border [to eliminate the diversion of diesel fuel to the neighboring countries]," said the speaker.
This information may not be reproduced without reference to Kazakhstan Today. Copyright of materials of News Agency Kazakhstan Today.
When citing our content a hyperlink to this Kazakhstan Today website is obligatory.