The energy resources of the Caspian region will always be strategic for global economy. The long term interest in the Caspian is reasoned by a growing demand for hydrocarbons, demonstrated by leading world powers with multi-vector geopolitical interests. As the state with biggest recoverable reserves of oil at the Caspian shelf Kazakhstan has a good chance to become one of the leading suppliers of energy resources in the 21st century.
Today, the volume of prospected hydrocarbon reserves in Kazakhstan reaches 5.5 billion tonnes of oil, 1.4 trillion cubic meters of gas and 308 million tonnes of condensate. At the same time, the majority of possible oil reserves (this is about 17 billion tonnes) are located in the Kazakh part of the Caspian Sea shelf.
To this date, the state register includes 216 oil, 191 gas and 55 condensate fields. Most of them are located in the western regions of Kazakhstan.
In terms of distribution of reserves by oil companies, the clear leader is the Agip Kazakhstan North Caspian Operating Company (Agip KCO and effective of January 22, 2009 – North Caspian Operating Company) and Tengizchevroil joint venture, whose combined reserves account for 75% of the country’s total recoverable hydrocarbon reserves. These companies are also listed among 13 major oil enterprises, which are developing a total of 83 fields, or 92% of the country’s recoverable reserves. The remaining 8% of reserves are concentrated among small and medium-sized companies (chart 1). In general for the sector, the proven reserves are enough for 70 years.
Between 1996 and 2008, thanks to investment by subsoil users the growth of in-place reserves (A+B+C1 categories) totaled 1,719 million tonnes of oil, 100.5 billion cubic meters of gas and 168.7 million tonnes of condensate. Over this period Kazakhstan produced 551 million tonnes of oil, 203 billion cubic meters of gas and 84 million tonnes of condensate. At the same time, compared with 1996, today, oil production is almost three times higher (66.2 million tonnes), gas production is about ten times higher (34.3 billion cubic meters). Last year the output of domestic condensate reached 6 million tonnes.
At present 278 hydrocarbons subsoil use sites are being developed, including production at 82 sites (29.5% of the total amount), exploration at 82 sites (29.5%) and joint production and exploration at 114 sites (41%). Hydrocarbons are produced by 176 companies, including 22 joint ventures, 64 foreign enterprises and 90 national companies.
It has to be mentioned that, today, over 90% of oil and gas production is run by twelve large companies. JV Tengizchevroil usually tops this list with 19.7 million tonnes of oil (33% of the total oil extracted by major companies) and 10.3 billion cubic meters of gas (34% of all gas, produced by them). It is followed by Production Branch Uzenmunaygas of JSC KMG EP with 6.6 million tonnes of oil (11%) and 0.27 billion cubic meters of gas (1%), Karachaganak Petroleum Operating B.V. with 6 million tonnes of oil (10%) and 15 billion cubic meters of gas (50%), JSC CNPC-Aktobemunaygas with 5.8 million tonnes of oil (10%) and 2.5 billion cubic meters of gas (8%), JSC Mangistaumunaygas with 5.6 million tonnes of oil (10%) and 0.4 billion cubic meters of gas (1%) and others (Table 1).
Speaking of production forecast, by 2010 it should reach over 80 million tonnes of oil and 47 billion cubic meters of gas while in 2015 the same indicators must reach 130 million tonnes and about 50 billion cubic meters respectively.
Currently hydrocarbon sector investments make up 72% of the total investment in the mineral resources sector (MRS). At the same time, over 80% of the total hydrocarbons investment is placed by foreign companies and joint ventures. The total hydrocarbons investment between 1996 and 2008 reached $80.7 billion, including $12.3 billion in geological prospecting. By the end of last year the investment in this industry increased almost 15 times in comparison with 1996 and totaled $16,008.8 million, including $1,844.4 million in geological prospecting. According to forecasts, the investment worth of $16,977.3 million will be placed in this sector in 2008, including $1,956 million in geological prospecting (Chart 2).
While considering the distribution of investment by companies, it should be noted that 87% of the total investment – $13,966 million of $16,008.8 million – was made by the largest players in 2008. The leaders include Agip KCO ($4,672.3 million), Karachaganak Petroleum Operating B.V. ($1,553.5 million), TCO ($1,456.4 million), JSC CNPC-Aktobemunaygas ($1,227.7 million), JSC Mangistaumunaygas ($574.2 million), Production Branch Uzenmunaygas of JSC KMG EP ($802.7 million), JSC Karazhanbasmunay ($574.2 million), Production Branch Embamunaygas of JSC KMG EP ($387.3 million), JSC Turgay-Petroleum ($358.3 million), Zhayikmunay JV ($262.7 million), JSC PetroKazakhstan Kumkol Resources ($261.4 million), Buzachi Operating Ltd ($239.5 million), Kazgermunay LLC ($153.5 million), Mayersk Oil Kazakhstan GmbH ($138.4 million), Kom-Munay LLC ($135.4 million) and Caspiy Meruerty Operating Company B.V. ($114.3 million).
As of January 1, 2009 the recoverable reserves of coal (categories А+В+С1) in Kazakhstan reached 34.8 billion tonnes that makes the republic one of the world leaders by this indicator.
The state register includes recorded reserves in 47 deposits and fields, which group 197 independent sites, of which 143 are underground mines and 54 are open pits. Most deposits are concentrated in central (68%) and northern (21%) Kazakhstan. Active reserves make up 45% of the total, inactive 55%. The considered reserves also include 15% of baking coal and 85% of thermal coal. At the same time, the share of black coal and brown coal are 66.5% and 33.5% respectively. Today, about 1/3 of all registered reserves are involved in industrial development.
Karaganda and Ekibastuz coal basins are the major coal areas in the republic. The pits of the first basin produce the entire volume of coking coal of especially precious types. The coal mines of Bogatyr, Severnyi and Vostochnyi, constituting the Ekibastuz coal basin, provide about 65-70% of thermal coal, produced in the country.
Big mining and processing units are built on the basis of this powerful mineral resource base in Kazakhstan.
In terms of reserves, the largest company is Bogatyr Komir LLC with over 3 billion tonnes or a third of all coal reserves under development. It is followed by such companies as JSC Shubarkol Komir, JSC ArcelorMittal Temirtau’s coal department (former Ispat Karmet), OJSC Eurasian Energy Corporation and CJSC 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 sites. It has to be mentioned that the total proved reserves in the sector are enough for over 100 years, whereas the reserves developed by major companies are enough for 70 years.
Between 1996 and 2008 thanks to investment by coal companies the growth of in-place coal reserves (A+B+C1 categories) totaled 645.7 million tonnes, whereas 909.2 million tonnes were recovered over this period. The reserves grew in the Karazhira (the Eastern Kazakhstan Oblast) in 1996, in the Ekibastuz basin (Pavlodar Oblast) in 2001, in the Karaungur mine (East Kazakhstan Oblast) and some mines in the Karaganda basin in 2004.
At present 34 companies in the country mine coal (30 national, 3 foreign and one joint venture) in 38 sites, including production at 29 sites and production and exploration at 9 sites.
Between 1996 and 2008 the investment in coal mining totaled $4,776.9 million. By the end of 2008 the investment volume grew 16 times and reached $935.1 million. Last year $0.5 million (less than 1% of the total investment) was placed in geological prospecting. Investment in coal mining is expected to stand at $991.7 million in 2009, including $0.5m in geological prospecting (Chart 3).
Almost the entire volume of investment in 2008 was ensured by 10 major companies, including CD JSC ArcelorMittal Temirtau ($446.5 million), Bogatyr Komir LLC ($171.4 million), JSC Eurasian Energy Corporation ($98.3 million), JSC Shubarkol komir ($61.6 million), Kazakhmys Corporation LLC ($51.3 million), Karazhyra Ltd LLC ($23.3 million), Angrensor LLC ($18 million) and others (Table 2). Other companies invested only $27.3 million or 3% of the total investment volume.
Compared with 1996, last year Kazakhstan’s coal output doubled to 105.8 million tonnes. Specifically, Bogatyr Komir produced 46.1 million tonnes (44% of the total volume), JSC Eurasian energy corporation – 19.8 million tonnes (19%), CD JSC ArcelorMittal Temirtau – 11 million tonnes (11%), Kazakhmys Corporation LLC – 7.5 million tonnes (7%), JSC Shubarkol komir – 7.3 million tonnes (7%), Karazhyra Ltd LLC – 5.3 million tonnes (5%), Maykuben West LLC – 3.6 million tonnes (3%) (Table 2).
The further development of the coal mining industry will be closely tied with the beneficiation and higher quality of thermal coal, development of a chemical industry, directed deep processing of coal with the production of liquid fuel and synthetic goods. The use of oil shale is growing in importance. The methane from coal mines in the Karaganda Oblast can be used as an alternative fuel. Its high concentration in the coal layers, the availability of a developed infrastructure and large gas consumers creates the possibility for full-scale production and utilization of methane from coal beds. This will allow to increasing the energy potential of Central Kazakhstan and ensuring gas supplies to industrial and energy companies of Karaganda, Ekibastuz and Pavlodar regions as well as the capital city of Astana.
By uranium reserves Kazakhstan is listed as the second country in the world behind Australia. At the same time, as of January 1 of this year the proven reserves of domestic uranium (А+В+С1 и С2 categories) reached 809.2 thousand tonnes.
The state register includes recorded reserves in 57 deposits; 17 of them are being developed, concentrating 74% of the total country’s uranium. Another 40 deposits are in the reserve. Most of the uranium reserves are concentrated in Southern Kazakhstan, Kyzylorda and Zhambyl oblasts.
It has to be noted that 98% in the structure of the raw material base of licensed uranium fields is represented by reserves, approved for development through the underground desalinization method. This method allows successfully developing fields with a significantly lower concentration of uranium in the ore than under the traditional underground production method.
The largest reserves (57% of developed and 42% of the in-place reserves of the country) are owned by three uranium producing companies: Inkay JV LLC, Mining Company LLC (owned by JSC Kazatomprom NAC) and Katco JV. The reserves of the sector are enough for over 50 years.
Between 1996 and 2008, the growth of uranium reserves totaled 73.5 thousand tonnes. At the same time the total investment volume in its subsoil use has reached $2,565.9 million in the last 13 years. Compared with 1996, in 2008 the volume of capital investment in the industry has grown 42 times and reached $913.4 million; of them, $56.4 million or 6% was directed for geological prospecting. This year, the uranium sector must attract $968.7 million, including $59.8 in geological prospecting (chart 4).
Investment was distributed among the major companies in the following way: Mining Company LLC – $188.4 million (21% of the total investment volume in the uranium subsoil use in the country), JSC Katco – $168.8 million (19%), JV Inkay $84.6 million (9%), JV Betpak dala - $79.8 million (9%), Kyzylkum LLC – $58.1 million (7%), Karatau LLC – $47.9 million (5%), Semizbay – U LLC – $44.6 million (5%), JSC Kendala KZ – $42.3 million (5%) and others (table 3).
Today, the subsoil extraction of uranium in Kazakhstan is conducted by 13 companies (7 domestic, 5 joint ventures and 1 foreign company) at 21 fields; of them, the production is run at 12 fields while in 8 fields there is exploration, joint with production. Thanks to significant capital investments by the subsoil users the uranium production volume in Kazakhstan has grown over 10 times during 1996-2008. Their last year production reached 8.6 thousand tonnes. The production leaders are Mining company LLC (37% of total national production), JV Betpak dala (17%), JV Katco (16%), Karatau LLC (8%), JSC Kendala KZ (7%), SGHK LLC (6%) and JV Inkay (3%).
The future development of the uranium industry is tied with bed-infiltration hydrogen fields. Besides uranium the method of underground desalinization can help produce rhenium, vanadium, selenium, rare earths and other elements. Also besides uranium, the useful components of organogenic- phosphorus-uranium ore are represented by scandium, rare earths and phosphorus. The useful components of the uranium-coal ore is represented by molybdenum, rhenium, cobalt, silver, germanium, selenium. For the expansion of the mineral resource potential of the industry the experts recommend new areas, parts and objects, including additional exploration of wings at the Irkol and Kharasan fields, and geological study of the Irkol-Kharasan area in the Kyzylorda Oblast.
This survey was prepared by Elvira Jantureyeva, the Head of the Service for Analysing the Results of Mining of the Kazgeoinform National Centre for Geological Information of the Geology and Mining Committee at the Kazakh Energy and Mineral Resources Ministry.