Kazakhstan President Kasym-Zhomat Tokayev has given the government's full backing to the Kashagan offshore oil and gas development despite a row with fishing interests and environmentalists over plans to dredge navigational channels to access the projects artificial islands.
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Speaking at the end of the last week at an online meeting to discuss future developments in the country's Atyrau region, Tokayev said “it is important to complete [Kashagan] capacity expansion projects and achieve the full development” of reserves at the large field in the Kazakh sector of the Caspian Sea.
Tokayev said the Kazakh government will continue talks with Kashagan's international shareholders to obtain approval for recently proposed multi-billion dollar production capacity expansion plans before end of this year.
Dredging concerns
The announcement came amid a dispute over plans by Kashagan operator North Caspian Operating Company (NCOC) to move ahead with a $250 million scheme to dredge channels in response to falling water levels.
The dredging programme has become a major point of concern for fishermen in the Atyrau region and local environmentalists who fear that massive excavations and dumping of extracted soil in other marine locations could affect fish habitats and migration routes, destroy breeding grounds and otherwise negatively impact the environment.
NCOC and governmental officials held a special meeting with residents of the region last week to address concerns and explain why the company opted for channels rather than using hovercrafts or building a long overpass from shore to access the artificial islands.
Hovercraft have reportedly been rejected because of their limited lifting capacity, while the 56-kilometre overpass would cost an estimated $1.5 billion and take five years to complete.
NCOC said Kazakh building contractor SK SpetsMontazhStroi is expected to start dredging work later this year for channels to open in 2022 that will allow the operator to complete scheduled major maintenance works.
SK SpetsMontazhStroi is a joint venture between Kazakh BI Group, Greece’s Archirodon and Van Oord of The Netherlands.
Investors sought
Authorities in Kazakhstan have repeatedly said they consider oil and gas projects as forming the long-term backbone of the country’s economy, fostering the growth of local manufacturing and supply services.
After years of inactivity, the government has moved to identify potential investors for onshore oil and gas blocks that contain either undeveloped or previously developed and now idle fields.
Authorities last week held a second online licensing auction for several hydrocarbon blocks and fields in different regions, following closely on a December 2020 round.
According to the country’s Energy Ministry, six locally owned winners committed to pay 9.3 billion tenge ($22 million) for seven assets in the auction, with the highest bid of almost 4 billion tenge presented by Almaty-incorporated IC Petroleum for the Karatyube field in the Aktyubinsk region.
The field, discovered in 1966, has been idle for more than 12 years, having been mostly depleted by previous operators.
However, the block award includes neighbouring zones in addition to the Karatyube field, for total acreage of about 3800 square kilometres.
