Fuel and Energy Sector. Reserves, Output and Investment
The large-scale development of significant energy reserves has become a basis for the economic successes Kazakhstan has been demonstrating over the past decade. The efficient use of this sector’s potential will also play no less important role in the process of diversifying the economy. This is shown by the statistical survey of the mineral sector and the dynamics of investment in the Kazakh fuel and energy sector presented below.
Kazakhstan occupies a leading place in the world in terms of proven hydrocarbons reserves. The country is only behind Saudi Arabia, Iran, Iraq, Kuwait, the UAE, Venezuela and Russia. The country accounts for about 3.3% of the world’s total oil reserves and about 1% of the global gas reserves. Over half of Kazakh probable oil reserves, about 13-18 billion tonnes, are located in the Kazakh part of the Caspian Sea shelf.
As of 1 January 2007, the state registers recorded 195 oil, 101 gas and 49 gas condensate fields. Most of them are located in the west of the country.
In terms of distribution of reserves by oil companies, the doubtless leader is the Agip Kazakhstan North Caspian Operating Company NV (Agip KCO) and the Tengizchevroil joint venture, whose combined reserves account for 67% of the country’s total recoverable hydrocarbon reserves. These companies are among 13 major oil enterprises which are developing a total of 78 fields, or 92% of the country’ recoverable reserves. The remaining 8% of reserves are concentrated in 116 fields which are being developed by small and medium-sized companies. In general for the sector, the recoverable reserves are enough for 80 years, whereas this figure is half this for large companies.
Between 2000 and 2006, thanks to investment by oil and gas companies the growth of in-place reserves (A+B+C1 categories) totalled 1,380 million tonnes of oil, 26.4 billion cu m of gas and 7.7 million tonnes of gas condensate. Over this period, oil output almost doubled to 60 million tonnes in 2006. However, gas output was 27 billion cu m last year, almost three times more than the annual increase of gas reserves. The annual output of gas condensate stood at 5.5 million tonnes on average, which is also larger than the annual growth of its reserves.
Between 2000 and 2006, the annual investment in the hydrocarbons sector grew by almost 300% to $11,097m last year, including $1,540.8m, or 14% of the total investment, which was invested in geological prospecting. According to forecasts, investment worth $11,818.3m will be placed in the sector this year, including $1,640.9m in geological prospecting (Chart 1).
While considering distribution of investment by companies, it should be noted that 86% of the total investment was ensured by 15 major players in 2006: Agip KCO ($3,019.9m), Tengizchevroil ($1,408.8m), Mangistaumunaygas ($1,269.2m), KazMunayGas E&P’s Uzenmunaygas ($742.1m), Karachaganak Petroleum Operating B.V. ($729.3m), CNPC-Aktobemunaygas ($682m), KazMunayGas E&P’s Embamunaygas ($408.4m), Karazhanbasmunay ($338.2m), PetroKazakhstan Kumkol Resources ($2,226.8m), Turgai Petroleum ($204.7m), Buzachi Operating ($137.9m), Kazakhoil-Aktobe ($134.1m), Karakuduk-Munay ($101.8m), Zhaikmunay ($101.4m) and Caspineft TME ($100.7m).
As already mentioned, hydrocarbons output is growing every year. For example, 60 million tonnes of oil, 27 billion cu m of gas and 5.4 million tonnes of gas condensate were extracted in 2006, however, 12 major companies accounted for 88% of the total oil production and 92% of gas output. Tengizchevroil topped this list with 13.3 million tonnes of oil (25% of the total oil extracted by major companies) and 6.9 billion cu m of gas (28%). It was followed by KazMunayGas E&P’s Uzenmunaygas with 6.7 million tonnes of oil (13%) and 0.9 billion cu m of gas (4%); Mangistaumunaygas 5.5 million tonnes of oil (10%) and 0.4 billion cu m of gas (2%); CNPC-Aktobemunaygas 5 million tonnes of oil (9%) and 2.9 billion cu m of gas (12%); Karachaganak Petroleum Operating B.V. 4.9 million tonnes of oil (9%) and 11.9 billion cu m of gas (48%) and others (Table 1).
In terms of its reserves, Kazakhstan is also in the top 10 countries in the world, behind the USA, Russia, China, Australia, India, South Africa and Ukraine. The country shares about 3% of the world’s proven coal reserves. Over 60% of probable reserves are concentrated in Kostanay Oblast.
As of 1 January 2006, the state registers recorded reserves in 49 fields that group 197 independent mines, of which 142 are closed-pit mines and 55 are open-pit mines. Most mines are concentrated in central (the Karaganda and Ekibastuz coal basins, and the Shubarkol mine) and northern Kazakhstan (the Turgay coal basin). Active reserves are 45% of the total, inactive 55%.
In terms of reserves, the largest company is Bogatyr Access Komir with over 3 billion tonnes or a third of all coal reserves under development. It is followed by Shubarkol Komir, Mittal Steel Temirtau’s coal department (former Ispat Karmet), the Euro-Asian Energy Corporation and Maykuben West. The reserves of each of these companies exceed 1 billion tonnes. In general, eight major companies are operating 97% of the total Kazakh coal reserves in 19 fields. Small and medium-sized companies have only 3% of the reserves concentrated in 34 mines. The sector has over 100 years of reserves, whereas major companies only have 70 years (Table 2).
Between 2000 and 2006, thanks to investment by coal companies the growth of in-place coal reserves (A+B+C1 categories) totalled 74.3 million tonnes, whereas 521 million tonnes were recoverd over this period. The reserves grew in the Ekibastuz basin in 2001, in the Karaungur mine (in eastern Kazakhstan) and some mines in the Karaganda basin in 2004.
Over the past five years, investment in coal mining almost doubled to $428.7m in 2006. However, only $0.3m (less than 1% of the total investment) was placed in geological prospecting. Investment in coal mining is expected to stand at $456.5m in 2007, including $0.3m in geological prospecting (Chart 2).
Almost the entire volume of investment in 2006 was ensured by 15 major companies, including Mittal Steel Temirtau which invested $169.3m (40% of the total investment), Bogatyr Access Komir $106.4 (25%) and the Euro-Asian Energy Corporation $57m (13%) (Table 3).
As compared with 2000, coal output grew by 60% to 95.4 million tonnes in Kazakhstan in 2006. Of this 13 major companies produced 99%: Bogatyr Access Komir 41.6 million tonnes (44%), the Euro-Asian Energy Corporation 17.8 million tonnes (19%), Mittal Steel Temirtau 11.5 million tonnes (12%) and others (Table 4).
Kazakhstan shares about 27% of the world’s total uranium reserves – 1.6 million tonnes, of which over 50% are reserves recorded in the state registers and 30% are proven reserves (A+B+C1 categories).
The main uranium reserves are exogenous deposits, including stratum-infiltration and hydrogenous ones. The Shu-Sarysu and Syrdarya uraniferous provinces in south Kazakhstan have over 20 uranium deposits, including the major Inkay, Budenovskoye, Mynkuduk, Uvanas, Tortkuduk, Moinkum, Kanzhugan and other deposits. The former three deposits are located in the Shu-Sarysu province and are unique deposits. A unique deposit in the Syrdarya province is Kharasan and major deposits are North and South Karamurun, Irkol and Zarechnoye. The Suluchekinskoye mine is a major mine in the Ile depression. Major stratum-infiltration deposits are the Semizbayskoye (in northern Kazakhstan) and two carbon-uranium fields – Nizhneiliyskoye and Kolzhatskoye (in the Balkhash an Ile depressions respectively).
Major organogenous-phosphate uranium deposits are Melovoye, Tomak, Taybagor and Tasmurun on the Mangistau Peninsula (the Mangistau-Caspian uraniferous province).
Endogenous deposits are mainly in the North Kazakhstan uraniferous province, including unique deposit Kosachinoye and major Grachevskoye, Zaozernoye, Manybay and others. Deposits in the Shu-Ile-Betpak Dala province are Bota-Burum, Kyzylsay, Zhideli and others (almost all of them have been exhausted).
As of 1 January 2006, the state registers recorded uranium reserves in 58 deposits, of which 16 with 59% of the country’s total reserves are being developed. The remaining 42 deposits are in the reserve.
Three uranium-producing enterprises – the Inkay joint venture, the Mining Company (owned by Kazatomprom) and the Katco joint venture – have the largest reserves (71% of the total in-place reserves). Major companies have about 44 years of reserves; the figure for the sector is 54 years.
Between 2000 and 2006, thanks to investment by uranium companies the growth of uranium reserves (A+B+C1+C2 categories) totalled 23,000 tonnes, whereas the annual uranium output grew by 200% over this period. In general, between 2004 and 2006 the growth of reserves was faster than that of output, which had a positive impact on the raw material supply base. For example, the last year’s output was almost half of the growth of proven reserves.
Over the past five years, investment in uranium mining grew by almost 700% to $410.1m in 2006, including $11.1m in geological prospecting (less than 3%). This figure is expected to reach $436.7m in 2007, including $11.8m in geological prospecting (Chart 3).
Investment was distributed by companies in 2006 in the following way: the Mining Company $97.8m, Katco $90m, Inkay $69.3m, Zarechnoye $39.1m, Betpak Dala $34.6m, Kyzylkum $28.8m, Karatau $21.3m, Kendala KZ $13.1m, the Stepnogorsk Mining Chemical Plant $12.4m, Kyzyltu $2.2m, Appak $1.4m and Baiken-U $0.1m.
Output has been growing every year. Five major companies extracted 100% of the country’s uranium in 2006, including the Mining Company that produced 3,123.8 tonnes, Betpak Dala 1,017.1 tonnes, the Stepnogorsk Mining Chemical Plant 409.7 tonnes, Katco 405.3 tonnes and Inkay 328.6 tonnes.
As a result, the Mining Company accounted for 59% of the country’s total output. This subunit of Kazatomprom extracts uranium in the Shu-Sarysu and Syrdarya uraniferous provinces in South Kazakhstan Oblast and Kyzylorda Oblast. Uranium is being extracted using in situ leach methods. In 2006, the company developed six mines, including North and South Karamuryn, Kanzhugan, Moinkum (the southern part of sector No. 1), Uvanas and Mynkuduk (Eastern sector).
In recent years, in uranium development the share of endogenous deposits fell, whereas the number of stratum-infiltration deposits suitable for extraction using the most progressive and profitable in situ leach methods grew (to 75% of proven reserves and reserves of P category). Stratum-infiltration and hydrogenous deposits are the main sources of uranium extraction in Kazakhstan at the moment. Apart from uranium, rhenium, vanadium, selenium, rare earths and other elements can be extracted from these deposits.
Advantageous components of organogenous-phosphate uranium deposits, in addition to uranium, are scandium, rare earths, phosphorus and of carbon-uranium deposits are molybdenum, rhenium, cobalt, silver, germanium and selenium.
This survey was prepared with the assistance of Elvira Jantureyeva, the head of the Service for Analysing the Results of Mining of the Kazgeoinform national centre of geological information of the Kazakh Energy and Mineral Resources Ministry’s Geology and Mining Committee.
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