Kazakhstan state controlled oil and gas company KazMunayGaz has teamed up with US major Chevron and the European Bank for Reconstruction & Development (EBRD) in separate agreements to explore decarbonisation options for its upstream and downstream operations.
Under the first memorandum of understanding, KazMunayGaz and Chevron’s Kazakhstan subsidiary Chevron Munaygaz will study opportunities to jointly engage in carbon capture, utilisation and storage (CCUS) projects.
They will also research production and usage of what European standards refer to as low-carbon hydrogen, methane emissions management, the introduction of in-house carbon pricing mechanisms and energy efficiency improvements.
Earlier this year, Kazakhstan President Kasym-Zhomart Tokayev announced that the country will aim to become carbon neutral by 2060 — a similar deadline announced by its neighbour Russia last year.
KazMunayGaz directors have already approved plans for a 15% reduction in the company’s carbon footprint by 2031 against its 2019 level and, in the long term, will strive to align with the country’s carbon neutrality target.
Executive chairman Magzum Mirzagaliyev said that, because decarbonisation is “an unfamiliar activity” for KazMunayGaz, the company hopes that it will benefit from Chevron’s experience in energy transition initiatives.
It is understood that the decarbonsation cooperation between the two companies will be overseen by Chevron New Energies, a subsidiary of the US major that was created in 2021 to foster energy transition partnerships.
Under its MoU with the EBRD, meanwhile, KazMunayGaz and the bank will work to improve the quality of reporting in the company’s climate-related financial disclosures.
KazMunayGaz added that the EBRD will also consider financing for its decarbonisation projects.
The company had earlier estimated its Scope 1 & 2 emissions at 8.7 million tonnes of carbon dioxide in 2020.
KazMunayGaz produced an estimated 165 million barrels of oil and 8 billion cubic metres of gas in 2020, while also reducing the flaring of associated gas by almost a third from 2018 levels, burning just 2% of the total volume of produced associated gas, the company said.