Magzum Mirzagaliyev, the Chairman of the Management Board of KazMunayGas (KMG), indicated that Kazakhstan’s oil potential could be broadened through the discovery of large new oil fields. He highlighted that the country’s subsoil has only been explored to a degree of 24%. Over the past years, no new oil fields have been reported, with the national oil company’s reserves growing due to additional exploration of existing fields.
At present, KMG is conducting exploration activities in five fields: Mugodzhary in the Aktobe region, Berezovskoye in the West Kazakhstan region, and several fields in the Mangistau region. The company aims to complete its seismic research of these fields within the year and interpret the geological data obtained. This data has already piqued the interest of some foreign investors.
KMG has plans to drill three exploration wells this year. One well will be drilled at Turgai Paleozoic in the Kyzylorda region, with equipment mobilization already underway. The company aims to commence this work mid-year. Additionally, KMG has plans for deep subsalt drilling in the Karaton Subsalt structure in the Atyrau and Mangystau regions. The company has also scheduled the drilling of a well at the Abay field in the Caspian Sea, in partnership with Italian company Eni.
KMG will finance the exploration of the Turgai Paleozoic using its funds. Meanwhile, Russian company Tatneft, which has acquired 50% shares of Karaton Operating Ltd. from KMG, is expected to finance the exploration of the Karaton Subsalt site independently. The company plans to drill a 5,500-meter-deep well at Karaton Subsalt and more than 5,500 meters at Turgai Paleozoic, with the belief that significant findings could be made at these depths.
Despite optimistic forecasts, two major operating oil fields controlled by KMG – Uzen and Karamandybas – have reported a decline in oil production. The output is expected to increase to 5.2 to 5.5 mn tons per year once the rehabilitation project is completed. In 2022 and 2023, KMG, in collaboration with scientists and engineering companies, developed a project aimed at boosting oil production. The company approached the government with an initiative to lower the mineral extraction tax to allocate more funds for the rehabilitation project. The government has supported this initiative.
Oil production in the Uzen field is complicated by frequent power failures, causing oil congestion and halting all work. To address this issue, KMG and Eni plan to build a 247-megawatt hybrid power station that will generate energy using wind, sun, and natural gas.
KMG has encountered some challenges with its projects in the Caspian Sea, having not discovered new oil fields in the sea for years. For instance, its well on the Zhenis site was found to be dry. However, there have been some discoveries at Kashagan, Kalamkas-Sea, and Khazar. KMG and Russian Lukoil have already initiated active exploration work at the latest site, with KMG aiming to produce its first oil here in 2028 or 2029.
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