Special Energy Issue on Kazakhstan

Transcription

1 Special Energy Issue on Kazakhstan January 2018 CONTENTS GENERAL... 1 OIL & GAS PRODUCTION... 2 OIL & GAS EXPORT & TRANSPORTATION... 3 PROCESSING & REFINERY... 4 RENEWABLE ENERGY... 4 INDUSTRY EVENTS IN CONTACTS... 6 The Economic Section of the in Kazakhstan intends to distribute this newsletter as widely as possible among Dutch institutions, companies and persons from the Netherlands. The newsletter summarises economic news from various Kazakhstani and foreign publications and aims to provide accurate information. However, the Embassy cannot be held responsible for any mistakes or omissions in the bulletin.

2 GENERAL Kazakhstan plans to settle dispute on Karachaganak before the end of the first quarter of 2018 Kazakhstan plans to regulate the dispute on Karachaganak until the end of the first quarter 2018, said Kanat Bozumbayev, Minister of Energy of Kazakhstan. As I cannot disclose all the details, I can say we are on the active stage of negotiations. We will extend the memorandum which was concluded until the end of last year. Thus, extension of memorandum and resolution of this issue is expected until the end of first quarter 2018, said Bozumbayev. This week a new round of negotiations will start with the representatives of Karachaganak. We have reached common approaches. Both sides have shown intention to reach the agreement, he concluded. In 2015 it was reported that the Government of Kazakhstan might charge $2 billion from Karachaganak Petroleum Operating. Bloomberg reported the reason was in ignorance of agreement liabilities on the memorandum development. As a compensation the Government might increase its share in Karachaganak. Financial times wrote in 2016 that the consortium proposed to pay $300 million to settle the dispute. Bozumbayev said in July 2016 that the Government was conducting friendly negotiations with KPO shareholders. The information about application to arbitrary he declared to be false, according to KazWorld. Eni s subsidiary gets 50% of mineral rights in Isatay oilfield Kazakhstan s state company KazMunaiGas (KMG) has transferred 50% of Isatay block mineral rights to Eni Isatay B.V., Kazinform correspondent reports. According to KMG s statement on the Kazakhstan Stock Exchange website dated December 22, 2017, the company closed a deal to transfer 50% of the mineral rights under a contract for combined hydrocarbon exploration and production at Isatay block in favour of Eni Isatay B.V., Kazinform reported. OIL & GAS PRODUCTION Kazakhstan produced record amount of oil in 2017 In 2017, Kazakhstan produced 86.2 million tons of oil, which is a record indicator for the entire history of the country s independence. This was stated at a briefing in the Government by Minister of National Economy Timur Suleimenov, Kazpravda.kz reports. This volume of oil production helped us to achieve 4% growth of GDP, the Minister said. He also noted that next year the Energy Ministry plans not to reduce the rate of extraction of raw materials. Also at the briefing, Suleimenov noted that due to the oil industry, in 2017, the export in Kazakhstan has increased significantly. With a general increase in trade turnover, by about 25%, our exports grew by about 32-33%, and imports by 15%. This is a very good indicator, this greatly strengthened our trade balance, which increased compared to 2016 by 70%, which had a very good effect on the state of the national currency, the minister added. Kazakhstan oil output to rise 1% in 2018 to 87 million tons Kazakhstan will increase its oil and gas concentrate production in 2018 by 1% to 87 million tons, compared to 86.2 million tons the previous year, its energy ministry told Reuters. Oil production at its giant Kashagan oil field will rise by 33% to 11 million tons this year, the ministry said. 2

3 Oil production at Kashagan to grow 33% to 11 million tons in 2018 Kazakhstan will increase its oil and gas concentrate production in 2018 by 1% to 87 million tons. In 2017, oil production in Kazakhstan was 86.2 million ton, the energy ministry told Reuters. Oil production at its giant Kashagan oil field will rise by 33% to 11 million tons this year, the ministry said, AKIpress reported. Sumatec sees Rakushechnoye oil output to reach 1,500 barrels a day by end of March Sumatec Resources Bhd said it was informed by its partner CaspiOilGas LLP (COG) that oil production at the Rakushechnoye oilfield in Kazakhstan will reach 1,500 barrels of oil a day by end of March. Another 1,000 barrels per day can be added to the oil production after the completion of 12 well workovers by end of August, the company said in a filing with Bursa Malaysia today. The total oil production can further increase to about 7,500 barrels per day with the drilling of two new deep Triassic wells by end of 2018, it said. Under the joint investment agreement between Sumatec and COG and the field development plan, Sumatec also has claim on associated gas by way sharing of condensates. The field report was given to Sumatec by COG general director Saubay Izbassarov, who was appointed to the post recently. The report also said that based on a $50 per barrel price of oil, Sumatec can expect a net of between $30 to $35 for every barrel of oil produced. Under the joint investment agreement signed in March 2012, Sumatec is entitled to 100% of the profit for the first two million barrels. From the third year onwards, the profit will be split 50:50 between Sumatec and COG, The Star reported. OIL & GAS EXPORT & TRANSPORTATION Crude oil piped from Kazakhstan to China reaches record high Crude oil imports from Kazakhstan to China through a transnational pipeline hit a new record high last year, PetroChina West Pipeline Company said. The China-Kazakhstan pipeline carried 12.3 million tons of crude oil into the world s second-largest economy in 2017, up 23.2% year on year, the pipeline operator said. The crude oil production cuts by OPEC members in early 2017 drove up crude prices, and oil producers in Kazakhstan then increased exports, it said. The pipeline runs more than 2,800 kilometers from the city of Atyrau to Atasu in Kazakhstan via the Alataw pass in Xinjiang Uygur Autonomous Region to the PetroChina Dushanzi Petrochemical Company, one of China s major petrochemical producers. It became operational in 2006, according to Xinhua. Bonatti secures Area 51 Pipelines contract in Kazakhstan Bonatti has secured the Area 51 Pipelines contract from Tengizchevroil (TCO) for the FGP-WPMP project in Kazakhstan. This contract will help create a new collecting system for the transport of fluids from Tengiz and Korolev reservoirs to the new FGP processing facilities. Under the contract, Bonatti s scope of work includes construction and pre-commissioning of about 377 km of various diameters pipelines for production gathering system and high-pressure sour gas injection and utilities. Montazhspetsstroy Joint Stock Company is the major partner of Bonatti in this contract. Bonatti chairman of the board Paolo Ghirelli said: Kazakhstani content development is one of the highest priorities for our client Tengizchevroil. Bonatti supports Tengizchevroil I am pleased that our partner in this contract is a Kazakhstani company MontazhSpetsStroy, which has been on Kazakhstan s market since The work to be executed as part of this contract is a key element on the path to achieve our commitment to the Republic of Kazakhstan. 3

4 Situated in an operational field, the activities will be undertaken in challenging conditions such as brownfield and characterised by a high number of crossings. Last November, Bonatti secured an electrical and instrumentation contract for the development of Zohr, a gas field offshore Egypt. This contract required Bonatti to provide core services, materials and equipment for the installation of the project s onshore electrical, cable, instrumentation, telecommunication and fire and gas equipment, according to Hydrocarbons Technology. PROCESSING & REFINERY Kazakh refineries to be privatised Kazakhstan s oil refineries will be privatised in the run-up to KazMunaiGas JSC going public (IPO), Kazinform reports. To execute a successful IPO and increase the value of shares of national companies, we have approved the sale of 14 assets in the perimeter of their parent companies IPOs. Regarding KazMunaiGas National Company, there are seven assets: Urikhtau Operating LLP, Pavlodar Petrochemical Plant LLP, TH KazMunaiGas N.V., PetroKazakhstan Oil Products LLP, Atyrau Oil Refinery LLP, KMG Automation LLP, Teniz Service LLP, Minister of National Economy Timur Suleimenov told a Government session. The minister stressed that for now, the Cabinet had drafted a respective resolution, which is under approval by the government bodies. Earlier, Timur Suleimenov said that in 2018, the Government will carry out the preparation of Astana International Financial Centre s platform for participation in the IPO, reported by Kazinform. Kazakhstan to build another oil refinery within next 4 years Kazakhstan needs the fourth oil refinery, says Kanat Bozumbayev, the country s energy minister. According to him, the ministry has already established an appropriate working group for consideration of that issue. And next year it is planned to prepare a feasibility study for the new refinery. The minister noted that it is necessary to attract an investor for the project and commence the construction in Kazakhstan needs the fourth oil refinery. It s my opinion. We are now raising this issue because the construction of a refinery lasts over one year. The demand for fuels and lubricants is on the rise. According to our forecasts, by 2022, it may become necessary to increase imports of petroleum products. By that time, the fourth refinery shall have been built. The capacities of the existing three will not be enough to meet the growing demand, Kanat Bozumbayev told khabar.kz. RENEWABLE ENERGY Goldwind to install 5 MW of wind turbines in Kazakhstan Chinese wind turbine maker Xinjiang Goldwind Science & Tech Co Ltd has won an order to install two wind turbines in Kazakhstan with a combined capacity of 5 MW, news agency Kazinform reports. The deal was awarded by a Kazakh company, the name of which has not been disclosed. According to the report, Goldwind has already signed an agreement for the project with China-based CITIC Construction, a unit of financial services company CITIC Group. The wind farm will be constructed in the city of Almaty in southeastern Kazakhstan. The scheme will be Goldwind s first wind power project in Kazakhstan. The Asian Republic aims to lift the share of renewables to 3% of total generation by 2020 and to 10% by To achieve that 4

5 goal, it plans to commission about 106 renewable energy facilities totaling 3, MW by 2020, including 1,787 МW of wind and 713,5 МW of solar parks, Renewables Now reported. EBRD supports France s Urbasolar in Kazakhstan The EBRD is supporting French company Urbasolar SAS in its plans to build a solar power plant in Kazakhstan, a country which leads this field in Central Asia, Kazinform said. The new Zadarya solar power plant will add 14MW of solar capacity to Kazakhstan s energy mix, bringing the total amount of existing and planned renewable energy to 365 MW. All large-scale renewable energy projects in Kazakhstan under project finance structure have been supported by the EBRD. The Bank also works closely with the government on green energy laws, regulations and other carbon-reduction programmes. The EBRD will provide a loan in local currency, Kazakh tenge, up to an equivalent of $8.8 million, and the Clean Technology Fund will lend up to $3.9 million for the solar plant in the South Kazakhstan region, near the city of Shymkent. The solar park project will be implemented by a special purpose company, Kaz Green Tek Solar LLP, incorporated in Kazakhstan and majority owned by Urbasolar. Loan agreements and a project support agreement were signed at the 8th Session of the Assembly of IRENA, the international renewables body, in Abu Dhabi on 13 January Nandita Parshad, EBRD Managing Director for Energy and Natural Resources, said: The EBRD is very proud to be leading the way in our region of operations in creating markets for renewable energy. The project support agreement we have signed today with the Minister of Energy, Kanat Bozumbayev, comes only half a year after a project signed at the opening of EXPO 2017 in Astana, which demonstrates the country s commitment to making progress in the renewables sector. I also want to thank our partner, the Clean Technology Fund, for supporting yet another project in Kazakhstan. Arnaud Mine, President of Urbasolar, said: We believe that photovoltaic technology will play a significant role in electricity production in Kazakhstan and Central Asia. This project will demonstrate the technical performance and economic viability of such a plant. We have been working for four years to prepare this project, and collaboration with the EBRD and the local partners is key to its success, as well as to that of future developments. Urbasolar has been developing, building and operating large capacity photovoltaic power plants since The company is a leader in France and is developing its presence internationally in some selected countries. Urbasolar has been active in Kazakhstan since 2012, when the company installed a number of rooftop solar panels in Astana, becoming one of the renewable energy pioneers in the country. The EBRD is a leading international financial institution in terms of renewable energy and energy efficiency financing. It is the largest and sometimes still the only financier of renewable energy projects in its markets. About 40% of the Bank s 2017 investment was made in Green Economy Transition (GET) projects, two years ahead of the self-imposed target under the flagship initiative. In addition to cleaner energy, the EBRD invests in greener transport, agriculture, industry and other sectors, and in some countries provides credit lines to consumers for energy efficient home improvements. To date, the EBRD has invested over $8.7 billion in the economy of Kazakhstan, Kazinform reported. 5

6 INDUSTRY EVENTS IN 2018 KAZNEFTEGAZSERVICE-2018 Annual Conference on Oilfield Construction and Engineering 16 March 2018, Atyrau Organizer: KazService Global Oil & Gas Atyrau Atyrau Regional Oil and Gas Technological Conference April 2018, Atyrau Organizer: Iteca Atyrau Oil & Gas North Caspian Regional Exhibition on Oil and Gas April 2018, Atyrau Organizer: Iteca KIOGE International Oil & Gas Exhibition and Conference 3 5 October 2018, Almaty Organizer: Iteca CONTACTS Embassy of the Kingdom of the Netherlands 62, Kosmonavtov str. Chubary mcrd, 3 rd floor Astana T: ast@minbuza.nl Embassy Office in Almaty 103, Nauryzbai Batyr Str Almaty T: alm@minbuza.nl 6