Despite the fall in world oil prices and the new global crisis, the largest oil companies are expressing the interest Kazakhstan’s Eurasia Project, Baltabek Kuandykov, general coordinator of the project, told New Europe in an interview.
Kazakhstan’s Eurasia Project, which was launched two years ago to develop oil and gas assets in the north Caspian Sea, will be interesting to global petroleum producers. Experts have associated this project with the discovery of new oil fields, which scale-wise could be equal to Tengiz or even Kashagan. This refers to the studies of the potential of the Caspian depression, 75% of which is located on the territory of Kazakhstan, and the rest 25% on the Russian territory. And if today geologists can reach a depth of nearly 7,000 metres, in the case of the Eurasia Project there is a goal to reach the depth of 15,000 metres and deeper.
Implementation of the Eurasia Project will consist of three stages. The first stage involves the collection and processing of materials from previous years. The second stage is a large-scale study. The last stage includes the drilling of Caspian 1 well to a depth of about 14-15 kilometres. The estimated cost of the three phases of the Eurasia Project is about $500 million.
According to experts, the resource potential of the Caspian depression is approximately 40 billion tonnes of oil equivalent. The forecast is about two dozen large hydrocarbon deposits with reserves of more than 300 million tonnes.
Kuandykov said he believes that even in this difficult time for the oil and gas industry, Kazakhstan will be able to start this unique project.
He clarified that the Eurasia Project is a strategically important project for Kazakhstan, and Russia. Russian oil companies will conduct research on their part of the Caspian depression (25% depression is located on the territory of Russia), and then they will be able to share their results with the Kazakh colleagues.
“Today it is important that Kazakh and the Russian geologists will work proactively to address any gaps in their oil and gas resource base. But it should be recalled that the Eurasia Project is, first of all, a knowledge work in the truest sense of the word: it is planned to develop innovative technologies of a super-deep drilling to the depth of 14 or 15 kilometres,” Kuandykov said.
Earlier, it was planned that by the end of 2014 we would be able to form an international consortium, including major companies of the world oil business, which have the latest technology in the field of deep drilling.
“The consortium has not formed yet because first we need to solve the internal issues in Kazakhstan. The question is what tax benefits Kazakhstan can give for future members of the consortium. And now we are actively working with the Kazakh government on this issue,” Kuandykov said.
He expressed the hope that before the end of the first half of the year the situation will become clearer. After the Eurasia Project developers and government of Kazakhstan have to agree on preferences, only then they will sign a memorandum with the potential participants of the consortium and will start negotiations with them.
Talking about preferences, Kuandykov said that first of all, for this project it is necessary to remove 12% VAT. This would be a great help for the industry, as it allows saving large sums that could be directed to the complex geological works.
Secondly, it is important to remove customs duties from imported equipment for the Eurasia Project, as it is unique project which allows exploring the layers at a depth of 14 to 15 kilometres.
Third, it is important that future consortium members will have right to continue develop fields on a commercial basis, after finishing studying of Caspian depression.
All these relevant and important issues, concerning not only the Eurasia Project, will soon have an extensive discussion. Society of oil-geologists called for the First International oil and gas exploration Forum in March of this year in Astana. For the first time since the independence of Kazakhstan oil and gas geology issues will be discussed at such a high level with the participation of well-known geologists, geophysicists, specialists, academics, as well as representatives of leading foreign oil and gas companies and government agencies.
On the question of who supposedly can join the consortium and will be the number of participants limited, Kuandykov replied: “Prior to the completion of negotiations it is difficult to say. But we hope that the future consortium will consist of five or six companies, so there will be mobility and efficiency in decision-making. Definitely, consortium will include the national company KazMunai Gas, one of the Russian companies, as well as those companies that can come to us with new technologies. It could be Chinese companies”.
http://www.neurope.eu/article/global-oil-producers-eye-kazakhstan%E2%80%99s-eurasia-project