14.10.2017
KARACHAGANAK: 20 YEARS OF SUCCESSFUL PARTNERSHIP

URALSK, West Kazakhstan Oblast, October 13, 2017 – Karachaganak Petroleum Operating Company (KPO) celebrates the 20th Anniversary of the signing of the Karachaganak Final Production Sharing Agreement (FPSA). Celebration festivities were staged today at the regional Kazakh drama theatre bringing together dignitaries, Karachaganak veterans, representatives of republican and local authorities, KPO Partner Companies, community leaders and media.

Two decades ago, the Final Production Sharing Agreement for the development of the Karachaganak Oil and Gas Condensate Field was signed — this is the fundamental document regulating the relationship of the international consortium Karachaganak Petroleum Operating B. V. with the Republic of Kazakhstan. Over the years, Karachaganak has developed into a world-class operation and the flagship of the country’s energy sector that generates significant revenues for the Republic of Kazakhstan.

During his opening address, Altai Kulginov, WKO Akim spoke about Karachaganak’s significance for the economy of Western Kazakhstan Oblast; he praised the Operator for their able stewardship of the Project, which has long become the driver of the region’s economic growth and development.

Nowadays, Karachaganak accounts for 49% of the total gas and 16% of the total liquids production in the country. Since signing the FPSA, over $22 billion has been invested in the field’s development while around $26 billion has been paid to the Republic in taxes and product share profit. Since 1997, KPO has built a 635 km pipeline, modernized the field infrastructure and commissioned new processing and re-injection facilities, drilled a substantial number of new wells.

Today, operating expenditures per barrel of the oil equivalent produced at Karachaganak are one of the best not only in the country, but also in the world. Over the two decades, new industrial facilities have been put into operation, using the cutting edge technologies for production and processing of hydrocarbons while ensuring safety, health and environment protection of its own personnel and the nearby communities.

Over the first half of 2017 KPO has achieved a world-class gas utilisation rate of 99.95 per cent.  Overall, since 1997, KPO has invested $342 million into environmental protection measures.

In his congratulatory address Kanat Bozumbayev, the RoK Minister of Energy, noted the commitment of the Karachaganak partners to the Republic of Kazakhstan, particularly the undertaken efforts aimed at transferring the best technologies and expertise and sharing the advanced knowledge with the Republic.  He wished KPO success in implementing future development projects of Karachaganak.

KPO is the largest employer in the West Kazakhstan oblast.  The KPO employees are highly professional and committed.  Since the signing of the FPSA, KPO Partner Companies have invested over $200 million in the training and development of the Venture’s national personnel.

Over the last twenty years, hundreds of kilometres of new roads have been built and dozens of schools, hospitals, and culture and sport facilities have been constructed. Numerous communities have been supplied with gas and fresh water, which created new businesses opportunities across the region. To date, KPO has invested around $318 million into development of social infrastructure in Western Kazakhstan oblast.

Commenting on the occasion, Renato Maroli, KPO General Director, pointed out: “The 20 Year Anniversary represents a major milestone for both KPO and Kazakhstan’s energy sector.  Working in close cooperation with the Akimat of West Kazakhstan Oblast and the Authority — PSA LLP, KPO applies state-of-the-art technologies to ensure production growth and, accordingly, revenues to the state budget.”

“KPO, as a responsible operator, actively works with local contractors by procuring their goods and services, and sets an example of conducting sustainable business. Local content is yet another area where KPO has worked hard to turn the tide and the results achieved to date are truly remarkable. During the first six months of 2017 the local content in Goods, Works and Services at the Karachaganak project was increased by over 51%. Since 1997, when the FPSA was signed, the share of local content in KPO procurement has reached $6.23 billion”.

When sharing KPO’s plans for the future, Renato Maroli said: “Plans to further increase production at Karachaganak lie ahead. They will bring along additional  investments and new employment opportunities. Moreover, as always, Kazakhstani specialists will play key roles in this huge endeavour.  A wider use of advanced technologies will enable for the increased volumes of produced and exported liquid hydrocarbons, which, in turn, will have a positive impact on the revenues received from the Project. This additional profit will add more value to the Republic of Kazakhstan and the Partner Companies.”

“These have been both incredibly challenging and exciting twenty years, we are proud of what has been achieved so far and look forward to being able to deliver on all our commitments with the Republic and together reach new highs for the benefit of the people of Kazakhstan and the Karachaganak Partners”, added Renato Maroli.

 

For more information please contact:

Sergei Pushkarev: PushkS@kpo.kz

Gulnara Sharibayeva: ShariG@kpo.kz

KPO Corporate Affairs Department