Joint KMG and KPO Press-Release
ASTANA, - 17 March 2008 -- Karachaganak, one of Kazakhstan’s largest producing fields, delivered an outstanding performance in 2007, setting record levels of production and meeting a number of key milestones.
Last year marked the 10th Anniversary of the signing of the Karachaganak Final Production Sharing Agreement (FPSA) – an important milestone for both Karachaganak Petroleum Operating Company (KPO) and the development of Kazakhstan’s hydrocarbon sector.
In a little over ten years, there has been considerable development of the field and in 2007, Karachaganak produced over 133 million barrels of oil equivalent, a level not seen before from these facilities.
Today, Karachaganak is Kazakhstan’s largest gas producing field, accounting for some 49% of the country’s total gas production and around 18% of total liquids production.
Achieving this level of production is no small feat. The facilities utilise leading production and hydrocarbon processing technology and are operated in accordance with the highest safety and environmental protection standards.
During the year there was a considerable improvement in safety and environmental performance at Karachaganak. Reductions in both lost time injury rates and emission levels from the field were significant. In 2007, KPO achieved over 17 million injury free man hours without any days lost due to safety incidents and achieved gas utilisation of 99.65%, an improvement over the already outstanding 99.40% of 2006.
KPO also met its FPSA nationalisation targets ahead of schedule. Today, some 40 percent of all management positions within the venture are held by local Kazakh professionals. Going forward, KPO intends to intensify its efforts in local training and development to deliver improved performance in this area.
During 2007, KPO also completed a number of key social projects, including the refurbishment of the Uralsk Hospital’s surgical wing and the local sports stadium. To date, the venture has invested over $133 million in local social infrastructure projects and this will more than double in the coming years with the construction of the Karachaganak to Uralsk Gas Pipeline project. This project will bring much needed energy to local communities within the West Kazakhstan Oblast.
Commenting on 2007 performance, KPO General Director Roger Fox said: “With the support of the Republic and KazMunaiGaz, KPO has been able to achieve a great deal in the last ten years and particularly during 2007. I would like to extend my sincere thanks to the Ministry of Energy & Mineral Resources and KazMunaiGaz (KMG) for their ongoing support. Our long-term partnership with both KMG and the Republic of Kazakhstan will be central to our continued success as we move toward the next phase of development.
Karachaganak not only represents vast resources and significant value for the Republic, its development has also brought enormous benefits to the communities within the West Kazakhstan Oblast. While we are focused on the continued development of the field, we also contribute to the Republic’s sustainable development agenda through social project support, infrastructure development and enhancing the knowledge and skills of local Kazakh people and our contracting companies.”
Notes to editors:
JSC “National Company “KazMunayGas” (KMG) is a national oil and gas exploration, production, processing and transportation operator representing the government’s interests in Kazakhstan’s oil and gas industry. KazMunayGas is 100 percent owned by JSC “Kazakhstan Holding for Management of State Assets “Samruk.”
Karachaganak Petroleum Operating B.V. (KPO) is a joint venture between BG Group (32.5%), Eni (32.5%), Chevron (20%), and LUKOIL (15%).
KPO oversees the expansion and development of the Karachaganak field - one of the world’s largest oil and gas condensate fields - which is located in North West Kazakhstan and holds over 1.2 billion tonnes of oil and condensate and more than 1.35 trillion cubic metres of gas.
KPO’s operations are regulated through a 40-year Final Production Sharing Agreement (FPSA) signed by the Kazakhstan government and the partners in November 1997.
Development of the field is bringing significant income to both the national and local economies and the project is providing long-term jobs to many Kazakh nationals.
KPO operates the following facilities: the Karachaganak Processing Complex (KPC); the gas and liquids separation and re-injection plant (Unit 2); the gas and liquids separation plant (Unit 3); the 635-km export pipeline Karachaganak-Bolshoi Chagan-Atyrau, giving Karachaganak access to world markets via the Caspian Pipeline Consortium (CPC) system.
Today, Karachaganak produces over 10.5 million tonnes of stable condensate annually, much of which is delivered to high value western markets, and approximately half of the 14.4 billion cubic metres of gas production is shipped to Russia
KPO has been demonstrating world-class environmental practices, and is meeting its long-term commitment to social improvement which will see the company invest over $10 million annually in local schemes throughout the 40-year life of the project.
