Russia’s Lukoil on 3 May announced that its first exploration well in Kazakhstan’s offshore Tyub-Karagan block had been spudded. The well has a target depth of 2,500ms and will be drilled by the Astra jack-up rig in 7ms of water. Lukoil-Shelf of Astrakan will operate the well, which is to be drilled on a zero-discharge basis with all industrial waste recycled. Drilling and testing are expected to take 106 days. The Tyub-Karagan block is operated by the Tyub-Karagan Operating Company, a 50:50 joint venture between Lukoil and KazMunaiTeniz, and covers 1,300 sq km in the central portion of Kazakhstan’s sector of the Caspian Sea, some 40km to the northwest of the Kazakh port of Bautino. Peak production for the block is targeted at 140,000 b/d and cumulative production is estimated at more than 800mn barrels. The partners anticipate a total investment of $3bn. The production-sharing agreement (PSA) was signed in January 2004 and covers a 40-year period (MEES, 9 February 2004). The Tyub-Karagan block is part of the offshore Dostyk project, which also includes the Atashsky block. It covers an 8,400 sq km area and includes the Atashskaya, Kazakhstan and Maral structures. The Atashsky block lies adjacent to dry land along Kazakhstan’s central Caspian coastline.
Other recent developments in the Caspian Sea region include:
Kazakhstan’s state-owned oil and gas company KazMunaiGaz on 4 May announced that it had completed the purchase of 8.33% of the offshore Kashagan oilfield. The company paid around $900mn for the stake, which it bought from other Kashagan partners, which had obtained them from BG (MEES, 4 & 11 April). Kazakhstan said its share of investment in the project would amount to around $1bn during the next four years.
Canada’s Nelson Resources is negotiating with KazMunaiGaz for the acquisition of 25% in Zhambai, which is developing the offshore South Zhambai and South Zaburunye blocks. Under a previous arrangement Nelson holds a 25% option on Zhambai. Nelson holds 50% of KazakhOil Aktobe (KOA) which is developing the Alibekmola and Kozhasai oilfields, 76% of the Karakuduk oilfield, 50% of the North Buzachi oilfield, and 50% of the Arman oilfield. Nelson reported that its net production from its Kazakh holdings averaged 22,213 b/d during 2004. Its 2005 target is net 60,000 b/d.
Lukoil, partnered with Canada’s PetroKazakhstan in Turgai Petroleum, on 4 May said that it would comply with a Kazakh government request to restrain production at the Kumkol North oilfield due to the insufficient level of associated gas utilization. Production is to be reduced by 24,800 b/d from target output of 70,000 b/d for 2005. PetroKazakhstan said in April that it would cut production to reduce flaring (MEES, 2 May). Meanwhile, the partners remain locked in a legal dispute over the management of the oilfield.
