BP Walks Away from Kazakh Projects
BP has opted against proceeding with exploration at three upstream projects in the Kazakh section of the Caspian Sea in light of the shift in its strategy last year towards renewables and away from oil and gas.
The UK major sent a letter to Kazakhstan's national oil company KazMunayGas (KMG) in October 2020, in which it said it had spent the previous 18 months evaluating the Greater Zhambyl, Zhemchuzhina and Kalamkas-Sea blocks, according to a copy of the letter posted on KMG's website on March 9.
"However, over the last two months, BP has announced significant changes to our strategy focusing a greater proportion of our capital in the future on renewable energy and existing hydrocarbon basins that we operate in," BP said. "As a result of this corporate strategy change, these Kazakhstan opportunities would not compete for capital within BP and it does not seem fair to KMG to continue to evaluate them if they do not fit into BP's new strategy."
BP presented its strategy last August for becoming a net-zero emissions company by 2050. The plan includes a 40% targeted reduction in the company's oil and gas production over the next decade, and a 20-fold increase in its renewable energy capacity. BP also said it would not search for oil and gas in countries where it does not already operate.
BP withdrew from Kazakhstan in 2009 when it divested its share of the Chevron-operated Tengiz oilfield to Russia's Lukoil. But the company signed a memorandum of understanding with Kazakhstan's national oil company KazMunayGas (KMG) in 2019 on studying data at subsoil assets in the central Asian country, and the pair signed a letter of intent on joint exploration activities at the start of last year.
The Zhambyl block in the northern Caspian was previously explored by Korea National Oil Corp, but the company pulled out in 2016 after drilling two dry wells. Zhemchuzhina and Kalamkas-Sea are near the giant Kashagan oilfield and were due to be explored by Shell and some partners. But the Anglo-Dutch major withdrew in October 2019, citing high costs and low profitability.