Overview

Kazakhstan
We have been present in Kazakhstan since 1992 with activities related to the Exploration & Production sector. We are co-operators in the Karachaganak producing field and are part of the North Caspian Sea PSA (NCSPSA) consortium responsible for operations in the Kashagan field. Our activities also include an environmental monitoring programme, an integrated programme for the management of biodiversity in the Ural Delta to protect the environment and ecosystems in the Caspian Sea.

Exploration & Production

In June 2014 a strategic agreement was signed with the state company KazMunayGaz (KMG) to exploit exploration and production rights in the high-potential offshore area of offshore Isatay potential (Eni 50%) in the North Caspian Sea with equal shareholdings in the initiative. The agreement also foresees the construction of a shipyard in Kuryk.

Kashagan

Eni has a 16.81% stake in the North Caspian Sea Production Sharing Agreement that governs, until 2041, the exploration, development and exploitation rights of an area of approximately 4,600 square kilometres located in the northern portion of the Caspian Sea. The contract area is the location of the giant Kashagan field, discovered in 2000. Exploration, development and exploitation operations at the Kashagan field, and the other discoveries in the contract area, are conducted according to an operating model that divides between the main international partners responsibility for the execution of each step and gives the Kazakh partners a significant role in the operational management. During 2014 a risk assessment was carried out aimed at identifying the cause of a technical failure that forced the Consortium to shut down production, after the substantial completion of Phase 1 of the development (the so-called Experimental Programme) and subsequent start-up of the Kashagan field (Eni 16.81%). The risk assessment determined the need to replace two damaged pipelines. Contracts for the purchase and installation of the new pipelines have been finalised. The installation will be completed in the second half of 2016, and production will consequently be restarted by the end of 2016. It is expected that the achievement of the originally planned level of production will occur in 2017.

Phase 1 of the development foresees an initial production capacity of 180 thousand barrels/day, with the objective of reaching 370,000 barrels/day of installed capacity, thanks to the start-up of the second offshore treatment train and compression facilities for the re-injection of gas into the reservoir. A further increase up to 450 thousand barrels/day can be achieved with the increase of compression capacity for gas re-injection, the definition of which is currently underway. The development plan for the latter phase has been submitted to Kazakh authorities. In December 2014, an agreement was signed between the consortium and the Kazakh government that solved a number of tax-related, environmental and operational issues. The process for changes in the operating model has been initiated and the new model, which aims to improve the efficiency of operational and decision-making processes and thus reduce overall costs, foresees that a company, owned by the seven partners of the consortium, will be the only operator of all exploration, development and production phases for Kashagan. As part of this change process, completed by the middle of 2015, the stake held by Agip Kazakhstan North Caspian Operating Company NV (Eni 100%), responsible for the execution of Phase 1 development, has been transferred to NCOC BV.

The environmental monitoring programme

In 2014, an innovative environmental monitoring system designed by Eni was tested. The programme involves the use of an Autonomous Underwater Vehicle (AUV) able to perform environmental and asset integrity monitoring at underwater production sites. During the year, the integrated programme was concluded for the management of biodiversity in the Ural Delta (Ural River Park Project-URPP) launched by Eni under the patronage of the Ministry of the Environment and Water Resources of the Republic of Kazakhstan, to protect the environment and ecosystems of the Caspian Sea. In June 2014, the project received official recognition from UNESCO and has been included in the “Man and Biosphere” programme. As part of the agreements reached with local authorities, a programme for the vocational training of Kazakh resources in the Oil & Gas sector is continuing.

Karachaganak

Located onshore in the western part of the country, Karachaganak (Eni 29.25%) is a giant field that produces oil, gas and condensates. The operations conducted by the Karachaganak Petroleum Operating (KPO) consortium are governed by a 40-year production sharing agreement, that lasts until 2037. Eni and British Gas are co-operators. Production from the Karachaganak field averaged 242 thousand barrels/day of liquids (52 thousand barrels/day net to Eni) and 26 million cubic metres/day of natural gas (about 6 million cubic metres/day net to Eni ). Operating activities are conducted by producing liquids (condensates and oil) from the deepest parts of the reservoir and using about 50% of the gas produced for sale to the Orenburg power plant, and the remaining volumes for re-injection into the upper reservoir and for fuel gas production. Over 90% of the liquid production is stabilised at the Karachaganak Processing Complex (KPC), which has a capacity of about 250,000 barrels/day for subsequent sale in Western markets through the Caspian Pipeline Consortium (Eni 2%) and via the Atyrau-Samara pipeline that connects with the Russian export system. The remaining liquids (approximately 16 thousand barrels/day) are sent, unstabilised, to the Orenburg plant. An Expansion Project is being examined for the implementation, in successive stages, of installations for gas treatment and for re-injection in order to maintain the production of liquids and increase gas sales. Technical and commercial assessments are underway for the definition of the first phase of development aimed at increasing re-injection and gas treatment capacity. Various development projects are also at an advanced stage aimed at maintaining production levels of liquids. Eni’s commitment support of local communities at the Karachaganak field continues, particularly in the western area. Such activities relate to the construction of educational and recreational facilities, as well as the construction of facilities for water supplies and roads.

Offices & contacts

Exploration & Production
Agip Caspian Sea B.V.
Astan Tower 12
Samal Micro District 19th Floor
Astana
473000
Tel. Amsterdam office (0031) 20 5707100

Agip Karachaganak B.V.
Kazakhstan Branch 62
Kosmonavtov Street, 7th Floor Micro District
Astana
Tel. Amsterdam office (0031) 20 5707101
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