Kazakhstan authorities have had success in finding new owners for 16 of the 17 blocks auctioned at the end of July.
The auction attracted a great deal of interest from bidders, despite questions over the stability of the country’s main oil export artery — the Caspian Pipeline Consortium — and the potential need to invest billions of dollars into building alternative shipping routes to China and Azerbaijan.
With a population of about 19 million people, Kazakhstan processes just a small share of its produced oil, with the rest flowing to export destinations in Europe and elsewhere — with Russia acting as a transit country — while some output is shipped to China.
According to the Kazakh Energy Ministry, the auctions ended up with bidders from Kazakhstan significantly overpaying the assets’ starting price to win exploration and development licences, with total revenues reported at 21.1 billion tenge (US$45 million).
Almost 19% of that amount, or about 4 billion tenge, was offered for the Kamenistoye oilfield in the Kazakh oil province of Mangistau.
According to Kazakh industry network social networking channel, Energy Monitor, the asset ended up in the hands of Vostok Energy-A, a privately held company that is controlled by three Kazakh nationals.
The field that was discovered in the early 1980s, lies next to a large oil asset Zhetybay, in the Mangistau region, which is being developed by state-owned oil and gas producer KazMunayGaz.
Another major asset in the region, the Shalva field, was awarded to Target Union.
Energy Monitor said that Vostok Energy-A and Target Union are controlled by businessmen that are involved in security services business in the country's former capital Almaty.
Meanwhile, three blocks in the offering landed with Tumar Petrol, a subsidiary of Kazakhstan’s quickly growing newcomer Kusto Oil, which is incorporated in Singapore.
Kusto Oil is a part of Kusto Group that was founded by Kazakh businessman Yerkin Tatishev and claims to operate in various other markets besides the country’s oil and gas sector.
Energy Monitor also noted that one of the assets in auction — the Pribrezhnoye oilfield in another leading oil province, Atyrau — went to a previously unknown player, Kazakh-registered Nitsk Dzhuman that has been reported as being owned by a Chinese national.
Earlier in July, the Energy Ministry removed 23 blocks from the offering that was initially revealed in April, apparently seeing lower than expected interest from investors.
Oil export jitters
Following the Western sanctions imposed on Russia for its invasion of Ukraine in February, Kazakhstan has developed issues with the stability of oil export shipments via two of its transit routes via Russia — the Caspian Pipeline Consortium and a legacy link to the Russian Atyrau–Samara trunkline network.
Caspian Pipeline Consortium, which handles almost 80% of Kazakh oil exports, barely escaped another halt in oil tanker loadings at its terminal near the Russian Black Sea port of Novorossiysk at the end of July.
On 27 July, power supplies were cut to two Caspian Pipeline Consortium pumping stations in Kazakhstan — Kurmangazy and Isatay — with authorities citing strong winds and thunderstorms as the cause.
The power to the stations was only restored two days later, according to the operator.
Earlier in July, Caspian Pipeline Consortium barely escaped the halt of tanker loadings after Russian transportation safety watchdog Rostransnadzor suddenly demanded the operator suspend its operations, following a routine check.