World Monitor Magazine WM_Energy_ 2019_web | Page 10

DESTINATION KAZAKHSTAN
Kazakhstan raised questions of additional
stimulation for the geological exploration
processes, drilling of superdeep and deep
wells and the implementation of a group
of offshore projects, as well as simplifying
the procedure for obtaining benefits for
low-profitable, highly viscous, flooded
fields, etc.
Investing in Upstream
Against the backdrop of growing
demand for hydrocarbons, one of the
significant trends in the global oil and
gas industry in recent decades is the
growth of investments in the field
of exploration and production. So,
according to the International Energy
Agency, in 2000-2014 investment in the
global Upstream increased from $200
to $780 billion US share. The fall in oil
prices in 2015-2016 interrupted this
trend by reducing the level of annual
investment by almost half. At the same
time, in recent years, the global oil and
gas industry is close to resuming a
positive trend. If in 2018, the volume
of investments amounted to about
$480 billion US, and then in 2019 it is
expected to be more than $500 billion.
Kazakhstan’s oil and gas industry
is not far behind global trends. At
the end of 2018, about 3% of global
investment in global Upstream fell to
our state, remembering that the share
of our country in world oil production
is about 2%.
At the same time, the role of the
domestic mining industry in the total
volume of direct foreign investment
in the economy of Kazakhstan has
significantly increased. According to
the National Bank of Kazakhstan, in
2018 foreign investments in oil and gas
production in the country amounted to
over $12 billion, or about half of the
total indicator for the economy of the
state. This dynamic, in many respects,
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is due to the implementation of the
aforementioned megaprojects – TCO,
Karachaganak and Kashagan.
Enhancing the role of
developing countries
The last 30 years of world history are
characterized by the reformatting of
the hydrocarbon market towards non-
OECD countries.
Since 1995, there has been a consistent
increase in oil consumption by
developing countries. In 2014, these
states were ahead of the OECD in oil
demand; in 2017, they broke the OECD
record for the maximum indicator.
The determining factor in such
dynamics is the volume of demand
from China and India. According to
the International Energy Agency: if ten
years ago China consumed less than
nine million barrels of oil per day, then
in 2019 it is expected to be about 13.5
million. A similar situation is observed
in India, where over the same period
demand grew from three to five million
barrels. per day.
Given this trend, it is important that
Kazakhstan was able to quickly create
a transport infrastructure for the
supply and transit of hydrocarbons to
neighboring China and other countries.
Over the years of independence, we
have built a diversified system of trunk
pipelines. Such large-scale projects as
CPC, the construction of the Kazakhstan-
China oil and gas pipelines, which allow
delivering Kazakhstani hydrocarbons to
potential sales markets in Europe and
Asia, have been implemented. At the
same time, work continues to expand
existing facilities.
More recently, in 2017, the CPC
expansion project was completed. As
a result, throughput increased to 67
million tons, of which about 50 million
is Kazakhstani oil.
Work on the Kazakhstan-China oil
pipeline made it possible to connect
two separate – Western and Eastern –
oil pipeline systems of the Republic and
ensure the supply of hydrocarbon raw
materials to the dynamically growing
market of our southeastern neighbors.
Now, measures are being taken to double
throughput – up to 20 million tons.
A fundamentally new milestone in the
country's economy are the Kazakhstan-
China and Beineu-Bozoy-Shymkent
gas pipeline projects. In the first case,
our country took part in one of the
largest gas transmission projects in
the world: Turkmenistan – Uzbekistan –
Kazakhstan – China with a total capacity
of three lines of 65 billion m3 per year.
Over 1300 km of pipelines have been
laid through the territory of our republic.
Under the BBSh project, a design
capacity of up to 2.5 billion m3 per year
was achieved. Now measures are being
taken to gradually increase the capacity
of the pipeline to 10 billion m3 a year.
The implementation of this project
made it possible to supply gas to the
southern regions of the country, more
than 500 settlements, and also direct
excess gas for export to China.
The development
of national companies
Transnational corporations completely
dominated the oil world 40-50 years ago.
At the same time, in most developing
countries associated with the oil and
gas industry, national companies were
created that gradually changed the
structure of the global market.
Currently, the share of
national companies in
world oil and gas reserves
is about 80%,