UK supermajor to partner KazMunayGaz in exploration of large block in promising oil and gas province
BP’s return to Kazakhstan has been welcomed by state oil and gas company KazMunayGaz after the duo agreed on Thursday to team up for the exploration of a large block in a legacy onshore play.
KazMunayGaz also secured a joint exploration deal with a new player from Croatia that has had no previous presence in Kazakhstan.
BP’s return, though its subsidiary, BP Exploration Operating Company, follows the supermajor’s renewed focus on oil and gas after exiting the country during its drive for renewable energy initiatives.
“This renewed partnership opens new opportunities for jointly implementing promising exploration initiatives aimed at strengthening Kazakhstan’s resource base,” KazMunayGaz said in a statement.
KazMunayGaz said the two companies will look at a large block in the Ustyurt Plateau in Kazakhstan’s Mangistau region, with the duo initially appraising and exploring the acreage, before proceeding into development in the event of commercial discovery.
The Ustyurt Plateau is a desert area spanning southwest Kazakhstan and northwest Uzbekistan that is widely believed to contain commercial oil and gas resources.
Earlier exploration in Uzbekistan’s sector of the plateau led to several oil and gas discoveries.
For the last five years, Kazakhstan’s efforts to auction several large blocks in the plateau did not attract any interest from local companies because of the high exploration risks associated with working in this area and the anticipated lengthy timeframe for a return on any investments.
“This agreement will enable BP to begin working closely with KazMunayGaz to assess opportunities for joint exploration of the Ustyurt prospective block,” the supermajor said in a statement to Upstream.
KazMunayGaz, meanwhile, also said it signed a partnership deal with Croatia’s Geoenergija Razvoj, which was established last year by the state-run Croatian Hydrocarbon Agency.
This partnership will explore the Shygys block in central Kazakhstan’s Aktyubinsk region, where a key oil producer is Aktobemunaygaz, owned and operated by China National Petroleum Corporation.
The initial plan calls for the collection of 2D seismic data, followed by the drilling of a well to a depth of 3500 metres, KazMunayGaz said.
Geoenergija Razvoj will fully finance all exploration costs until commercial development phase starts, KazMunayGaz added.
Speaking at an industry event in Astana on Thursday, KazMunayGaz first deputy executive chairman Kurmangazy Iskaziyev said the state company will continue to invest heavily in the collection of 2D seismic data to identify new targets for exploration and development with potential partners.
Iskaziyev said the focus will be deep subsurface layers in the Caspian and near-Caspian regions, with planned seismic expected to cover about 60,000 kilometres.
The Caspian region hosts Kazakhstan’s three large Western-led oil developments, Tengiz, Kashagan and Karachaganak.
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