The Kazakhstan authorities have resolved to move forward with a plan to auction 22 oil and gas blocks later this year, offering exploration and development opportunities in the hydrocarbon sector to local and international investors while also promoting renewable energy sources.
The oil and gas industry today is dominated by three foreign led developments — Tengiz, Kashagan and Karachaganak — and Kazakh state-run company KazMunaygaz that together are responsible for about 80% of the country’s total liquids output.
According to an Energy Ministry announcement, seven blocks on offer are located in the Atyrau region, which is Kazakhstan's largest oil province.
At the top of the ministry’s list for Atyrau are two blocks — Zaburunye and Sarayshyk — that together occupy almost 7000 square kilometres close to already producing assets of other operators, including KazMunaygaz subsidiaries.
Both blocks were earlier offered last year in the country's first sonline auction. However the winner — previously unknown investor Petro Qazaq — failed to pay its winning bid of $141 million to the government.
Two other, significatly smaller blocks in the Atyrau region — Karashagyr and Atanat — have joint borders with the area allocated in 1993 to Chevron-led joint venture Tengizchevroil, which is developing the giant Tengiz oilfield under a production sharing agreement with Kazakhstan.
Besides Zaburunye and Sarayshyk, another large block — Priirtyshky — is being offered in the Pavlodar region in the country's northeast.
This tract covers more than 3600 square kilometres near the Irtysh river, which crosses regions of East Siberia and West Siberia in Russia before flowing into the Ob river in the Khanty-Mansiysk district, Russia's premier oil province.
Finally, the 10 mid-sized tracts to be auctioned are distributed evenly between the Mangistau and Kyzylorda regions, where dozens of legacy onshore assets are already under development.
According to the ministry, potential bidders for blocks may register before 19 October, with the online auction scheduled to be held on 19 November.
The ministry still expects the country’s oil and condensate production to remain almost unchanged at 1.75 million barrels per day this year against 2020, despite the declines in output at the Tengiz, Kashagan and Karachaganak projects.