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 KAZAKHSTAN International Business Magazine №1, 2005
 Subsoil Use in 2004: Investment Statistics
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Subsoil Use in 2004: Investment Statistics
 
Elvira Dzhantureyeva, Ph.D. in Technical Sciences, Head of Subsoil Use Analysis Department, Kazgeoinform, the Commitee for Geology and Subsoil Use under the Ministry of Energy and Mineral Resources of the Republic of Kazakhstan
 
Over $40bn have been invested in subsoil use operations in the mineral resources sector of Kazakhstan in 2000–2004. It is remarkable that investment in the development of oil and gas fields accounted for 79% of this sum. Foreign companies accounted for the lion’s share of the investment (87%).
 
According to the results of 2004, investment in development of hydrocarbon fields almost tripled vs. 2000 and came to $7.2bn. Most of these funds (80%) were directed toward the extraction of oil, gas, and condensate from large, well known, and already developed fields. As for geological exploration (GE) at hydrocarbon sites, $1.4bn was invested in 2004, marking a fivefold increase against year 2000 levels. Foreign companies placed 88% of this amount.
 
The investment breakdown by separate subsoil users is as follows: the ten largest companies accounted for 88% of the total investment in production and geological exploration at hydrocarbon sites in 2004. Tengizchevroil invested $1.7963bn or 24%; Agip Kazakhstan North Caspian Operating $1.2717bn or 18%; and Mangistaumunaigas $923.8m or 13%. These are followed by Karachaganak Petroleum Operating B.V., which invested $580.5m or 8% of the total. CNPC-Aktobemunaigas and Ozenmunaigas accounted for around 7% with $506.6m and $495.5m, respectively. Embamunaigas ($246.6m), Karazhanbasmunai ($231.7m) and PetroKazakhstan Inc. ($203.2m) each provided 3% of the total investment flow in energy resources. The list is complete with Kazakhoil-Aktobe and its investment of $141.5m, or 2%.
 
It is expected that this year, the total investment in development of hydrocarbon resources will come to some $7.7bn.
Diagr 1
 
 
Investment in Subsoil Use Operations in West Kazakhstan
The Aktobe oblast. In 2004, investment in the fixed assets of the oblast’s subsoil use sites reached $871.8m or 10% of the total investment flow in Kazakhstan’s mineral resources sector ($9.1502bn). Foreign investors placed $733.5m (84%).
 
Investment in geological exploration was $105.5m, including $88.7m in foreign investment (84%) and $16.8m (16%) in local investment. $766.3m, or 88% of the total investment in the oblast, was placed into production with $644.8m (84%) in foreign investment and $121.5m (16%) in local investment.
 
The bulk of investment went to the development of hydrocarbon fields, receiving $754.4m (86% of the total investment in the oblast) and chrome iron ore deposits received $88.5m (9%). The remaining 5% was accounted for by: $7.4m for generally found mineral resources, $6.7m for underground water, $5.6m for copper, $4.8m for gold, and $4.4m for other solid minerals.
 
Large companies accounted for 94% of the total investment flow. The investment leaders in terms of exploration were KaspiyNeft TME with $20.2m (19.1% of the total GE investment), Kazakhoil-Aktobe with $13m (12.3%), Maersk Oil Kazakhstan GmbH with $11.1m (10.5%), CNPC-Aktobemunaigas with $10.8m (10.2%), Oztyurk-Munai with $10.3m (10.2%), and Altius Petroleum International B.V. with $8.3m (7.9%).
 
The key investors in production at the oblast’s subsoil use sites in 2004 were CNPC-Aktobemunaigas with $495.8m (64.7%), Kazakhoil-Aktobe with $128.5m (16.8%), and Kazchrome with $90.3m (11.8%).
 
In 2004, subsoil users placed $8.4m into community and local infrastructure development. The training costs were $4.0m. A total of 17,509 local and foreign staff was employed in contract operations. $317.6m in taxes and other fees were paid to the budget, including $87.9m in royalties.
Diagr 2
 
The Atyrau oblast.In 2004, investment in the fixed assets of the oblast’s subsoil use sites reached $3.4605bn or38% of total investment in the mineral resources sector of the country. Foreign investors provided $3.1548bn, or 91% of this amount.
 
Investment in geological exploration totaled $1.0652bn, including foreign ($1.035bn or 97.2%) and local ($30.2m or 2.8%) investment.
 
$2.3953bn, or 69% of total investment in the oblast, was placed in production with $2.1198bn (88.5%) in foreign investment and $275.5m (11.5%) in local investment.
 
Major companies accounted for 98% of the total investment flow. The bulk of investment went into the development of hydrocarbon sites, which received $3.459bn, or 99% of total investment in the oblast. $1.5m went to generally found minerals and $30,000 to underground water, both making up less than 2%.
 
The frontrunners in terms of investment in exploration were Agip Kazakhstan North Caspian Operating Company with $902.2m (85% of the total investment in GE) and Tengizchevroil with $97.4m (3%).
 
Tengizchevroil ($1.6989bn or 71%), Agip Kazakhstan North Caspian Operating Company ($369.6m or 15%), and Embamunaigas ($239.5m or 7%) were the three key investors in production at the oblast’s hydrocarbon sites.
 
In 2004, subsoil users placed $54.7m into community and local infrastructure development. The cost of training specialists came to $21.3m. A total of 10,804 local and foreign staff was employed in contract operations. $1.4577bn in taxes and other fees was paid to the budget, including $398m in royalties.
Diagr 3
 
The Mangistau oblast.In 2004, investment in the fixed assets of the oblast’s subsoil use sites reached $1.9666bn forming 21% of the total investment in the mineral resources sector. Foreign investors placed 72% of this amount or $1.4157bn.
 
Geological exploration investment came to $169.5m, including $102.7m (61%) in foreign and $66.8m (39%) in domestic investment. $1.7971bn or 91% of the total investment in the oblast was placed in production with $1.313bn (73%) in foreign and $484.1m (27%) in local investment.
 
In general, hydrocarbon sites accounted for investments, receiving $1.9531bn (99% of total investment in the oblast). $7.7m went to generally found minerals and $5.8m to underground water, both making up less than 2%.
 
Large companies accounted for 86% of the total investment flow. The principal investors in exploration were: KazMunaiGas’s Ozenmunaigas with $43.7m (25.8% of total GE investment), Tolkynneftegas with $33.4m (19.7%), Kazpolmunai with $23.9m (14.1%), the Tasbulat Oil Corporation with $23m (14%), Emir Oil with $11.4m (6.7%), and Mangistaumunaigas with $9.9m (5.8%).
 
The leaders in production investment in 2004 were Mangistaumunaigas with $913.9m (50.8%), Ozenmunaigas with $451.7m (25.1%), and Karazhanbasmunai with $231.7m (12.9%).
 
In 2004, subsoil users placed $16.2m into community development and local infrastructure. Specialists training expenses came to $3.7m. A total of 18,297 local and foreign staff was employed in contract operations. $859.7m in taxes and other fees were paid to the budget, including $104.8m in royalties.
Diagr 4
 
The Western Kazakhstan oblast. In 2004, investment in the fixed assets of the oblast’s subsoil use sites reached $612.6m or a mere 7% of the total investment flow in Kazakhstan’s mineral resources sector. Foreign investors provided just under 99% of this sum or $611.6m.
 
Investment in geological exploration came to $26.5m, including $26.45m (> 99%) in foreign and $50,000 (< 1%) in local investments.
 
$586.1m, or 96% of the total oblast investment, was placed in production; $585.1m (or 99%) was foreign and $1m (or 1%) was domestic.
 
In general, investment went to the development of hydrocarbon sites, receiving $611.6m (more than 99% of the total investment in the oblast). Less than 3% was placed in development of underground waters ($700,000), generally found minerals ($300,000), and borates ($30,000).
 
Large companies accounted for 99% of the total investment flow. Key investors in exploration were Zhaikmunai with $16.8m (63% of total GE investment), Ural Oil and Gas with $8.2m (31%) and Montazhmalikmunai with $1.5m (6%).
 
Karachaganak Petroleum Operating B.V. was the absolute leader in production investment in 2004 with $580.5m (99%). The other two subsoil users in the oblast—Stepnoi Leopard Ltd. ($1.9m) and Zhaikmunai ($1m)—accounted for less than 2%.
 
In 2004 subsoil users placed $20.2m into community development and local infrastructure. The cost of training specialists came to $11.8m. A total of 3,157 local and foreign staff was employed in contract operations. $30.8m in taxes and other fees were paid to the budget, including $600,000 in royalties.
Diagr 5


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Oil in the CIS: Economic and Sovereign Rating Implications  Special Report of Fitch Ratings Agency 
The Science of Selling  Harry Frisch, Michael Bang 
All People Are Different  Fatima Chapkhaeva 
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