Kazakhstan's geologic exploration: KMG EP's forward thinking approach
That's why it can be expected that the amount of finance channeled for exploration work in 2011 will exceed the budget plans. Director of the department for geologic survey projects management of "Exploration Production KazMunayGas" (KMG EP) Aibek Borangali told Kazinform agency of the results of Kazakhstan's geologic exploration in 2010 and plans for 2011.
In 2010 KMG EP focused not only on development of producing fields but also on their follow-up exploration and search for new prospects. Could you tell us of the results?
I would say we have reached good results. In 2010 we intended to gain reserves growth within 2.5-3 mln tons. We have in fact about 4.6 mln tons of new resources. This year we expect additions to prospected resources up to 18-20 mln tons.
What are the most promising areas your explorers disclosed?
The most perspective area is the Liman block in Atyrau oblast. The accumulation is located on the south slope of the Novobogatinsk Salt Dome several kilometers west of Atyrau city. An oil flow was evident at the first exploration well. Daily production rate is more than 20 tons per day. The company's 2011 work programme aims at detailed study n order to put the discovery into operation in the near future.
Could you tell us about the company's plans?
In the past nine months of 2010, the Company completed construction of one exploration well with a depth of 1,600m and started construction of one post-salt well with projected depth of 1,850m at R-9 block. At another field one evaluation well was completed and construction of another one with projected depth of 3500m was started. The Company also started drilling one evaluation well at Prorva Zapadnaya. In the nine months exploration expenditures made KZT 1.8bn.
The task to increase thr company's reserves will embrace some regions simultaneously. Replenishing its geological assets the company acquired in 2010 Zharkamys Vostochny 1 block in Aktobe oblast. Now we are working at getting of records on 4 blocks the National Company KazMunayGas hands over to KMG EP. Among them are Temir, Teresken, a site around Uzen field and a number of other promising structures. It is noteworthy, for the first time in the history of independent Kazakhstan our company will be engaged in searching for hydrocarbon deposits over the sea. Last year the company gained the right to jointly explore the White Bear prospect in the UK North Sea.
JSC "KazMunaiGas Exploration Production" (KMG EP) and BG Group plc (BG Group) signed the agreement to farm-in into a BG Group operated licence in the United Kingdom Central North Sea - the production licence (P1722) which contains the White Bear prospect. KMG EP acquired a 35% interest in the licence.
As the timeframe covered by the development strategy adopted in 2006 has elapsed and in light of new factors that influence the Company's priorities, the Board approved KMG EP's Development Strategy for 2010-2020. It lets enter 2011 with new development priorities to pursue long-term outlook policy. The updated strategy focuses on improving the efficiency of production activity, exploration, participation in offshore Caspian projects, as well as the expansion of the Company's production base in Kazakhstan and beyond.
Thank you for the interview.
Note: KMG EP's press releases were used in preparing this commentary.