Kazakhstan has announced a plan to find new operators for five oil and gas fields and six exploration blocks in the Aktyubinsk, Mangistau, West Kazakhstan and Atyrau regions, in an online auction on 20 October.
Most of these assets were previously offered to domestic and international investors in similar auctions, that have been held periodically since 2021, but with a lacklustre response.
At the top of the list is the Saigak oilfield in the Aktyubinsk region in Kazakhstan that was earlier developed by an international consortium, led by now defunct Denmark’s Maersk Oil that was purchased by France’s TotalEnergies in 2017.
The Saigak field was initially developed under a production sharing agreement that was signed back in 1992 and subsequently expired last year.
A field redevelopment programme proposed last year to Kazakh authorities by Saigak Kazakhstan called for the drilling of six development wells with the goal of producing about 5 million barrels of oil and some 65 million cubic metres of gas until 2049.
The operator had planned to reach plateau production in 2025 and then maintain it through the drilling of additional five development wells.
The Astana government has a stated starting price of over 75 million tenge ($170,000) for this asset.
The winner will also have an obligation to negotiate compensation with the operator for its prior investments made, which are estimated at about $180 million, according to Kazakh oil and gas industry social network channel, Energy Monitor.
The asset with the highest starting bid in the upcoming auction, almost 119 million tenge, is the Daryinskoye field in western Kazakhstan.
Until 2020, this field was in hands of Zhaikmunay, a wholly owned Kazakh affiliate of UK-listed minnow Nostrum Oil & Gas.
The Kazakh governmental website said that Daryinskoye has remained dormant since 2006 when Zhaikmunay acquired the rights for it. The operator later returned the asset to the Kazakh state saying the Covid-19 pandemic had made exploration and development economically unfeasible.
According to Energy Monitor, among the most promising blocks on offer is the Bozoba West acreage, also located in the Aktyubinsk region.
Probable reserves at this block are estimated at 160 million barrels of oil. The acreage saw some exploration between 2005 and 2013 by a consortium of South Korean and Kazakh investors before the project was halted because of reported disagreements between the partners.
Energy Monitor noted that a recent change in Kazakh regulations, governing such online auctions, had brought more predictability for authorities, previously seeing some Kazakh-based bidders walking away from obligations to pay their winning bids.
All winners in the previous similar auction that encompassed nine fields and blocks have honoured their commitments, with the government receiving total payments of almost 3.4 billion tenge for the awarded licences.
The recent changes have introduced a requirement for bidders to make deposits, ranging from 100% to 200% of the announced starting bids, to a government bank account to obtain access to the auction. These deposits are not refundable in the event a winner does not pay the full amount due after the auction.
SOURCE:https://www.upstreamonline.com/