ENI, Total invest in Kazakhstan offshore

ENI Total Kazakhstan offshore

ENI and Total will explore Caspian oil and gas blocks in offshore Kazakhstan, targeting Abay and Kashagan, plus onshore Karachaganak and Dunga. ENI is focused on exploration offshore in Kazakhstan while Total works onshore.

Kazakhstan’s state-owned KazMunayGas and Eni Isatay, a subsidiary of the Italian energy company Eni, plan to drill an exploration well to 2,500 meters at the offshore Abay oil field. They will also conduct a 2-D seismic survey. Cost of the project exceeds 14 billion tenge (approximately $36.5 million.)

The Abay oil field lies at a depth of eight to 10 meters (27-33 feet), 43 miles northwest of the Buzachi Peninsula. Oil reserves are estimated 337 million tons by some sources.

Eni has been active in Kazakhstan since 1992 and its investments there exceed $15 billion. Eni holds stakes in both the Karachaganak gas field and the Kashagan oil and gas fields. Kashagan is reputed to be the world’s largest discovery in the last 30 years. At the same time, Eni holds a 16.81 percent interest in the North Caspian Sea Production Sharing Agreement that defines terms and conditions for the exploration and development of Kashagan field. The PSA expires in 2041.

Meanwhile, the Kazakhstani government has agreed another deal with France’s Total, Oman Oil Company Exploration & Production, and Portugal’s Partex Oil and Gas. The government in Kazakhstan’s capital Nur-Sultan (formerly called Astana) approved a 15-year extension of the PSA for the Dunga field, originally signed in 1994 and due to expire in 2024. In addition, the parties agreed to launch Phase 3 of the development of the same field, which is operated by Total (60 percent), alongside the Oman Oil Company (20 percent) and Partex (20 percent).

Located in Kazakhstan’s western region of Mangystau, the Dunga field was discovered in 1966 and it was developed by Total E&P Dunga GmbH, a part of Total S.A. The total proven reserves of the Dunga oil field are estimated to be around 106 million barrels.

Officials from Total say that Phase 3 will add wells to the existing infrastructure and upgrade the processing plant to increase its capacity by 10 percent to 20,000 barrels of oil per day by 2022. The project requires a $300 million investment and will create 400 more direct jobs in the region at the peak of construction activity.

“This low-investment-cost-per-barrel development maximizes the field’s potential and extends plateau production,” said Arnaud Breuillac, Total Exploration and Production president, according to a statement published to the company’s website.

“This new development phase, combined with the Dunga field license extension, helps unlock 70 million barrels of additional reserves, which represents a significant development for Kazakhstan,” he added.

At the same time, the agreement provides for an increase in the share of Kazakhstan within the PSA from 40 percent to 60 percent by January 1, 2025. In addition, the companies are obliged to supply some part of the extracted oil to the Kazakhstani market and finance social infrastructure projects in the amount of at least $1 million annually.

Source: Caspiannews.com