Authorities in Kazakhstan plan to sell exploration and production licences for a record number of blocks across a country that remains dependent on Russia to transit its energy exports.
The list of 60 blocks released by the country’s Energy Ministry over the weekend offers assets ranging from small legacy oilfields to under-explored tracts ranging from 2000 to 5000 square kilometres in area.
In contrast to three earlier licensing rounds that were targeted at regional investors and domestic producers, Kazakh authorities have indicated that they want to attract international interest to the new offering.
The areas on offer will include six large Ustyurt tracts in the Mangistau region of south-western Kazakhstan.
These blocks, covering a total 23,500 square kilometres, are located in a region of remote steppe on the Ustyurt Plateau, believed by petroleum geologists to contain significant volumes of untapped hydrocarbon resources.
The Ustyurt plateau spans into Uzbekistan, another central Asian nation that has been trying to explore the area for potential hydrocarbon riches in partnership with international companies.
In the Kazakh offering, large unexplored blocks are also on offer in the Aktyubinsk and West Kazakhstan regions, according to the ministry’s list.
Capital requirements for these large acreages are expected to be more suited to international investors due to long exploration periods and demand for building supporting infrastructure in remote areas.
There will also be areas of interest for regional and domestic players, however, especially in country’s largest oil province of Atyrau, where seven assets are on offer near big production projects operated by companies such as Tengizchevroil and Embaneftegaz, the latter a subsidiary of Kazakh state-owned oil and gas holding KazMunayGas.
Some 15 perspective blocks are marketed in areas with existing oil and gas production or close to them in the Aktyubinsk region, according to the energy ministry.
The ministry has not set up a date for the planned auction for these assets, instead inviting all potential bidders to register, then access available documentation on offered blocks and afterwards communicate their readiness to bid to authorities.
Access to bidders will be opened after they register on the E-Qazyna governmental portal.
Potential foreign contenders are invited to visit Kazakh embassies and offices in the US, Russia, Germany, Turkey, South Korea, the Czech Republic, the United Arab Emirates and Kyrgyzstan to register and set up login credentials to this portal.
Focus on oil exports
Kazakhstan expects to export oil and condensate at the average rate of 1.47 million barrels per day in 2022, out of total production of 1.87 million bpd.
Of oil exports of 1.44 million bpd last year, close to 79% was shipped via Caspian Pipeline Consortium, offering a dedicated pipeline and access to a loading terminal near the Russian Black Sea port of Novorossiysk, while almost 17% was dispatched via the Russian trunkline network, according to the ministry.
With Russian continuing its military assault on Ukraine, calls are mounting in Europe to impose a ban on Russian oil exports and otherwise disconnect the country from the rest of the continent.
Kazakhstan does not expect its exports to be caught by such a ban, despite the use of Russian infrastructure.
The US has already banned imports of Russian oil, and the UK will put a similar measure in place by the end of the year.
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