Kazakhstan has put 10 oil and gas blocks up for grabs in the country's first ever online acreage auction that it hopes will attract interest from foreign players despite Covid-19-related restrictions.
All the blocks on offer are located in the Atyrau region in the north-west, with three extending over the border into neighbouring regions.
The Atyrau region is the country’s oldest oil province where oil was first produced at the end of the 19th century. The country’s largest producer, the US Chevron-led Tengizchevoil joint venture, is active in the region.
Authorities expect the strongest interest to be shown in two large blocks — Zaburunye and Sarayshyk — where the market value has been put at $63 million and $57 million, respectively.
The blocks are expected to contain both shallow conventional and possibly deep oil reservoirs.
Deep, high-pressure formations below subsalt layers are believed to have significant potential in the Atyrau region. Tengizchevroil is currently implementing a multi-billion-dollar upgrade project to grow output from such formations at the Tengiz oilfield by 260,000 barrels per day from the current 620,000 bpd.
Authorities said that existing producing oilfields located within these blocks and operated by state-owned Embamunaygaz and privately held operators are excluded from the auction.
Winners of licences for these two blocks will be asked to collect 1500 square kilometres of 3D seismic data and drill several exploration wells both into shallow and deep formations.
For the remaining eight blocks, the government wants the winners to collect just 2D seismic and drill between one or two wells into shallow formations.
These blocks are significantly larger in area than Zaburunye and Sarayshyk, but they have seen almost no exploration activity to date.
Applications to participate in the auction may be filed via a governmental portal before end of 29 November, with online bidding to take place on 23 December.