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    Lukoil May Pause Kazakh Field


It does not yet know how what route it will use to bring the gas to market.

by: Dalga Khatinoglu

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Natural Gas & LNG News, Asia/Oceania, Premium, Corporate, Exploration & Production, Political, Intergovernmental agreements, Territorial dispute, Caspian Focus, News By Country, Kazakhstan, Russia

Lukoil May Pause Kazakh Field

Russian independent Lukoil may pause the development of Kazakh’s Khvalynskoye field in the Caspian sea after 2021 owing to uncertainty about the transport of gas, CEO Vagit Alekperov said July 23.

The development project, operated by Lukoil with 50%, is on the border between Kazakhstan and Russia and the produced gas is projected to flow to Russia.

Lukoil is also developing another offshore Kazakh field Tsentralnoye, close to Khvalynskoye. The Caspian is to be treated as a sea, with states granted jurisdiction over 15 nautical miles of water from their coasts and fishing rights over an additional ten miles.

However, Kazakhstan announced last December that its parliament has ratified the protocol to the agreement with Russia on delimitation of the bottom of the northern part of the Caspian Sea for just six years, extendable for a further four years, to pave the way for exploration and development of Kurmangazy, Khvalynskoye and Tsentralnoye with combined resources of 322bn m³.

The construction of any pipeline, according to the convention signed by the five littoral states in August 2018, requires the approval of the countries whose seabed they cross, subject to environmental provisions.

In April, Lukoil also signed a contract with Kazakh energy ministry to study and develop the offshore Zhenis block, close to Khvalynskoye. It has formed a 50-50 joint venture Zhenis Operating Co with state oil and gas monopoly KazMunaiGaz (KMG) to operate the project.

Alekperov said that Lukoil plans to invest $270mn in Zhenis block, including $60mn on drilling a well and seismic work. Lukoil is  the only Russian company to produce oil and gas in the Russian part of the Caspian Sea and has a 10% stake in Azerbaijan’s offshore Shah Deniz field.

Lukoil produced 33.54bn m3 gas in 2018, of which 17.7bn m3 came from domestic fields, 13.42bn m3 from Uzbekistan and only 1.76bn m3 from other sources, including Kazakhstan.

Alekperov also said that the company plans to resume exploratory drilling at the Russian offshore Khazri structure, in Dagestan, a Russian republic bordering the Caspian, at the beginning of 2020.