“National Company “KazMunayGas”:
“Kazakhstan as the Main Driver of Oil Production
Growth in Eurasia: Key Projects, Prospects And
Challenges”
Astana, October 2, 2012
Energy Market Situation
The relationship between world
economic condition and oil prices*
Growth in oil demand
Approximation of energy intensity and a share of dominant
types of fuel up to 2030 (forecast)
Indicators of different years
Positive dynamics
Tons per thousand USD
dollars
After the economic shocks
Energy intensity
Shares of dominant types of fuel
Oil
China
USA
Coal
Growth in world GDP
in %
Gas
India
Water
sources
Nuclear
power
IEA forecast for 2012
Source: International Monetary Fund,
International Energy Agency, Citi Research
Source: BP Energy Outlook 2030
* If oil prices remain relatively stable and the world
economic growth makes up 2%, then the hydrocarbon
demand will have linear correlation with world GDP.
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The Republic of Kazakhstan: Key-takeaways, New Challenges and Development Goals
GDP growth rate
Development Strategy until 2020
 GDP growth – no less than 30%
 National Fund’s assets – no less than 30% of GDP
 Share of the small and medium enterprises in the GDP
- 40%
 Growth of investments in non-resource sector of the
economy - 30%
 Population - 18 mln. people
 Life expectancy – over 72 year
200
188,1
180
160
140
9.8%
9.3%
120
9.6%
9.7%
133.4
8.9%
81.0
80
7.5%
115.3
104.3
100
3.3%
7.0%
57.1
60
40
145.9
10.7%
43.2
30.8
24.6
20
1.2%
0
2002
2003
2004
2005
2006
2007
growth against the proceeding year;
2008
2009
2010
2011
GDP in billion US dollars
Foreign Direct Investments (mln.US dollars)
2
Oil and Gas Industry of the Republic of Kazakhstan
World proved crude oil reserves, bln.barrels
Proved oil reserves, MMbbl
•
Kazakhstan holds 9th place in the world with regard to the proved oil
reserves, with the 39,8 bln. barrels of oil
•
Kazakhstan is the 2nd largest oil producer among the CIS countries
•
Natural gas reserves make up 3 trln.cub.m , which is 1% of world’s
gas reserves.
•
Oil production in Kazakhstan is 1.76 mln.bbl/day or about 80 bln.tons
•
Gas production in Kazakhstan makes up 25 bln.cub.m.
Nigeria
39.8
Kazakhstan
Libya
Russia
UAE
Kuwait
Iraq
Iran
Venezuela
Saudi Arabia
0
50
100
150
200
250
300
• Oil production is expected to Increase by 60% by 2020
• Caspian Sea Shelf Projects should become the main driver of oil
Annual crude oil production in Kazakhstan, mln.
Oil production
in Kazakhstan, mtoe
tons (with forecast to 2020)
130
CAGR = 7%
47
51
59
62
65
production growth in Kazakhstan
• By 2035 the Caspian Sea region will provide about 9% of the world
crude oil demand
90
67
71
76
80
72
bln. US dollars
Investments in oil
and gas sector
21%
of oil sector in
Kazakhstan’s GDP
3
JSC NC "KazMunayGas" in Kazakhstan's Oil-and-Gas Sector
KazMunayGas is Kazakhstan's national operator for exploration, production, refining and transportation of
hydrocarbons, representing the state in Kazakhstan's oil-and-gas sector. 100 percent of the company's
shares are owned by the SWF “Samruk-Kazyna” JSC.
Key figures
2011





21,1 mln. tons
4,9 bln. m3
15,3 mln. tons
66,9 mln. tons
110,6 bln. m3
Production of crude oil and gas condensate
Gas production
Oil refining
Pipeline oil transportation
Pipeline natural gas transportation
Layout of oil pipelines
Share on the RoK's market, %
26,4 %
13,1 %
83,2 %
77,1 %
95,7 %
Layout of gas pipelines
Central Asia - Centre
Bukhara - Ural
Orenburg - Novopskov
BGR - Almaty
Kazakhstan-China
4
The Development Strategy of KazMunayGas
1
• Oil and gas exploration and production
• Growth of hydrocarbon reserves and crude oil and gas production
• Oil transportation
2
3
4
5
6
• Diversification of oil export routes, integration of oil transportation systems and
ensuring a stable transportation
• Gas transportation and marketing
• Development of Kazakhstan gas market, transit potential and satisfaction of the
domestic market requirements
• Oil refining & Oil and oil products marketing
• Oil refining technological development, ensuring domestic market and development
of petro chemistry
• Service and innovative technological sector
• Creation of competitive services, achieving the level of world oil and gas companies
• Managerial improvement
• Financial sustainability and debt management, development and improvement of
corporate governance, formation of target capital structure, implementation of
personnel policy and enhancing social activity
5
Strategic Targets of JSC NC “KazMunayGas” for 2022
Description
Unit
Plan for
2012
2015
2022
(Long-term
strategy)
Growth
2022/2012,
( %)
Oil and gas condensate
reserves
mln.
tons
779,0
817,0
1 413
1,8 times
Volume of oil and gas
condensate
mln.
tons
21,9
24,0
35,4
1,6 times
Volume of oil refining and
gas condensate
mln.
tons
16,4
19,0
19,0
115,9
%
9,3
> 10
>15
ROACE
EBITDA margin
%
13,3
> 16
> 18
by
5,7 percentage
point
by 4,7 percentage
point
6
Geological Exploration Performance
Short-term plan of geological exploration (20122015)
556 bln.
KZT
4 650
lin. km
11 970
km2
435
wells
Geological exploration costs
Total costs for geological exploration during 2012 – 2016 will
make up 556 bln. KZT
2D Seismic survey
2D seismic survey to the extent of 4 650 lin. km
is scheduled to be held for identifying new structures
3D Seismic survey
3D seismic survey to the extent of 11 970 sq.km is scheduled
to be held for specifying the composition of the identified
structures
Prospecting and exploratory drilling
435 exploration and appraisal wells are planned to be drilled
From 2015 the consolidated
increment in raw
hydrocarbons reserves of
KMG will be ensured through
geological exploration.
7
Exploration and Production Innovation Policy
• Improving the efficiency of geological
exploration
• (muiltifocusing,
digital
geological
modeling)
Increment in the consolidated residual recoverable oil reserves
by more than twice through geological exploration based on
innovative technologies by 2022
•
Laboratory test
Development and transfer
of innovative technologies
Improvement of development efficiency of the
fields with depleted deposit and challenged
reserves in order to increase the oil recovery
factor.
ADVANCED TECHNOLOGIES
15 low-margin deposits of
JSC KMG E&P,
remaining recoverable
reserves 6570 thousand tons
Ground tests in natural field
conditions
• Nonsteady (cyclic) waterflooding with reverse filtration
flow
• Polymer-gel system injection
• Alternating injection of oil and water
• Sidetracking
• Horizontal wells and horizontally branched wells
Large-scale introduction of
innovation on a turnkey basis in
existing fields
Innovative effect
• Production tests of research and technology and development activities by Kazakh scientists and teams in the field, testing of new
domestic equipment and technologies
• Introduction and experience of application of the new technologies by world service companies
• Introduction of new technologies in the existing fields
8
Geological Prospecting Projects of JSC NC “KazMunayGas”
Kazakhstan Sector of Caspian Sea
Onshore
North-Caspian
Project
(16,81%)
Zhambay
(50%)
Zhambyl
(73%)
Satpayev
(75%)
7
5
Kurmangazy
(50%)
Zhemchujiny
Жамбыл
(25%)
1
4
Khvalynskoye
(25%)
6
3
Project N
(51%)
(50%)
Tsentralnaya
(50%)
2
Центральная
1 - Liman
2 - Uzen-Karamandybys
3 - Karaton-Sarkamys
4 - R-9
5 - Taysogan
6 - Teresken
7 -Temir
9
Diversification of Oil Transportation Routes
Over 20 years of independence of the Republic of Kazakhstan:
 volume of oil export increased from 13 to 71 mln.tons annually
 approximately 4 000 km of oil pipelines constructed
 pipeline export capacities increased from 10 to 58 mln.tons annually
| “Caspian Oil Pipeline” Pipeline
Consortium
• In April 1996 Agreement between
Kazakhstan, Russia, Oman and
International Oil Consortium on
construction of CPC Pipeline was
concluded.
• Oil pipeline length:1510 km
• Commissioned: 2001
• July 1 2011 – commencement of
construction works on the CPC
Expansion Project (up to 67
mln.tons of which 52,5 mln.tons of
oil from the Republic of Kazakhstan)
Existing routes
Planned routes
Kazakhstan-China Oil
Pipeline
Implementation of the KazakhstanChina Oil Pipeline Expansion
Project (Stage II) will allow
increasing the output capacity up to
20 mln.tn of oil a year.
Oil transportation, mln.tn
 CPC Oil Pipeline
 “Atyrau-Samara” Oil Pipeline
 Kazakhstan-China Oil Pipeline
2011
28,2
15,4
10,9
Kazakhstan Caspian Transportation
System Project
The need in the KCTS export capacities will
arise by the moment Phase II of the
Kashagan field development is implemented
10
Gas-main Pipelines of Kazakhstan
Russian Federation
Kyrgyzstan
China
11
Reconstruction and Modernization of Refineries in Kazakhstan
Implementation of the State Program on Industrial and
Innovative Development Enforcement and the Program on
Development of the Petroleum Industry in the Republic of
Kazakhstan for 2010-2014 will allow:
 increasing an average integrity index of the Kazakhstan
refineries up to 10,2 global rate
 increasing the depth of oil refining up to 89%
 enhancing the quality of motor fuels to Euro-4,5 standards
Investment projects:
 “Construction of Aromatic Hydrocarbon Production Complex at Atyrau Refinery”
 “Construction of Deep Oil Processing Complex at Atyrau Refinery”
 “Reconstruction and Modernization of Pavlodar Refinery”
 “Reconstruction and Modernization of PKOP Refinery (Shymkent Refinery)
 «Road Bitumen Production at Aktau Plastic Mass Plant”
Expected Results:
Description
Oil refining
Gasoline
Jet fuel
Diesel fuel
Mazut
Refining depth
Quality of oil products
thou,.tons
Fact
2011
13 724
2 764
388
4 093
3 403
67%
Euro - 2
After reconstruction
2016
19 000
6 774
957
5 875
1 484
89%
Euro – 4,5
Deviation (+/-)
%
+ 5 276
+ 4 010
+ 569
+1 782
- 1 919
+ 38
2,5 times
2,5 times
+ 44
- 57
+ 22
12
Kazakh Content (КС)
KC in procurement activities of KMG Group
for the year 2011
bln.tenge
KC in major petroleum projects for the year 2011
Total volume of procurement
Kazakh content
7000
1,800.0
1,600.0
80%
Общий
объем закупок
Total procurement
level
1 498,9
6000
Kazakhstani content
Казахстанское
содержание
1,400.0
5000
1,200.0
4000
1,000.0
800.0
(USD mln.)
3000
37%
733 (49%) 739,9
2000
600.0
338,6
420,8
1000
400.0
261 (35,3%)
194 (57,3%)
200.0
278 (66%)
0.0
Всего,
ТРУ Товары
Total, GWS
Goods
Работы
Works
62%
Услуги
Services
20%
63%
0
Импорт
Import
Казахстанское
Kazakh
содержание
Content
38%
903
446.8
5244
1569
268
1311
13
Service Sector- Investment Projects
р.Урал
СКЭ
БР
Месторо
ждение
Кашаган
Construction of the North-Caspian Environmental Response Base (NCERB)
Purpose: to ensure oil spill response in case of Level 1 and 2, delivery of assistance in case of
emergency situation, evacuation and rescue of people, deployment of equipment in case of Level 3
oil spill
Deadline: 2012
Cost: 12,6 bln.tenge
Location: Damba settlement, Atyrau oblast
Status: NCERB is under construction.
Shipyard/dry dock construction
Purpose: development of the shipbuilding industry in the Republic of Kazakhstan
Deadline: 2013 – 2016
Cost: 48 580 mln.tenge
Location: Kuryk settlement, Mangistau oblast
Status: feasibility study package produced, state expert review is carried out
Gas turbine station construction
Purpose: liquidation of energy emergency in the West –Kazakhstan oblast, security of RK energy
supply
Deadline : 2013-2015 (Phase 1); 2020-2021 (Phase 2)
Cost: 34 113 mln.tenge
Location: West-Kazakhstan oblast
Status: feasibility study package produced, state expert review is carried out
14
Service Sector – Innovative Cluster
Research study and
development

 JSC “KBTU":
 Institute
of
Chemical
Полигон
Sciences named after Bekturov
A.B.

 Institute of Organic Catalysis
and Electrochemistry named
after Sokolsky D.V.
 JSC “Kazakh Institute of
Oil and Gas”:
 Research-and-Development
Center in the “Information
Technology Park” SEZ
Experimental-industrial
Studies
Industrial Engineering
Polygon based on low-profit oil  Incorporation in fullscale production at
fields of JSC “Exploration and
domestic enterprises
Production “KazMunayGas”
Special Laboratory JSC
“Kazakh Institute of Oil and
Gas” in the “Information
Technology Park” SEZ
Promotion of
finished commodity
to the market
 Major petroleum
projects:
 TCO, KPO, NCP etc.
 Export
СЗМС
Innovative projects on the territory of the
“Information Technology Park” SEZ
 Creation of a showpiece complex using the latest results in the
sphere of innovative technologies.
Завод по ремонту
малых судов
 Development of domestic research-and-development as well as
design and experimental in the petroleum industry
Завод буровых растворов
Implemented by: 2011-2014
Students: 2000
 Researches and developments in the sphere of high-performance
computing, automation, production processes, IT software application
for petroleum and other fields
ITP SEZ
KIOG Research and Development Center
KBTU Institute of Information Technologies
KBTU Petroleum Engineering Institute
15
JSC “National Company “KazMunayGas”
The Republic of Kazakhstan, 010000, Astana, Kabanbai-batyr str., 22
tel.: +7 (7172) 97-61-01
fax: +7 (7172) 97-60-00, 97-60-01
e-mail: Astana@kmg.kz
http://www.kmg.kz
16