PSA LLP, the competent body representing he Kazakh state in the North Caspian and Karachaganak PSAs, has issued a commentary to Shell's decision to withdraw from the joint development of the Kalamkas-More field which comprises part of the North Caspian PSA.  According to PSA LLP, on 30 September 2019, the Kazakhstan Ministry of Energy was officially notified that the investors in the North Caspian project, including Shell, had decided not to start the development of the Kalamkas-More field within the framework of the North Caspian PSA. The above decision was made by all investors in the North Caspian project (ENI, Total, ExxonMobil, Inpex, CNPC, KMG and Shell), based on economic indicators related to the previous costs incurred by the project operator.   In December 2018, an agreement was signed between Kazakhstan and investors in the North Caspian project in relation to Kalamkas-More, in which the parties agreed that in case of failure to submit a development plan for approval within the established time frame, the Kalamkas-More field will be relinquished. In this regard, the Ministry and the project investors jointly considered various options for the development of Kalamkas-More, including the possibility of joint development with other fields in the Caspian Sea, in order to determine the most optimal and cost-effective development option. As for the Kalamkas-More field, upon its relinquishment, the Ministry will work to find a new investor in accordance with the procedure established by law and under the current tax regime.  It was reported earlier in October that Shell had decided to withdraw from the project to jointly develop the offshore Kalamkas-More field (within the North Caspian PSA framework) and the Hazar field (managed by the Caspi Meruerty Operating Company (CMOC) consortium).   Background Information  In December 2018, the Ministry of Energy of the Republic of Kazakhstan, PSA LLP as the Authorized Body and the companies participating in the North Caspian PSA as shareholders, signed an agreement on the provision of a plan for the development of the Kalamkas-More field. The agreement provided for the companies to submit a development plan for approval by the Management Committee of the North Caspian PSA before Q4 2019.  In April 2019, North Caspian Operating Companyâs (NCOC) announced that NCOC and CMOC were planning to start joint development of Kalamkas-More and Hazar. Active development operations were planned for 2021-2027. Shell, which takes part in both operating companies, said in the past that separate development of the two fields did not make sense economically.   Kalamkas-More was discovered by NCOC in 2002. It is located around 75 km south-west of Kashagan. According to the Ministry of Energy, the fieldâs reserves in-place are 1,177 MMb (149.5 MMt) of oil, 527.5 Bcf (15.4 Bcm) of solution gas and 526 Bcf (15.36 Bcm) of non-associated gas.  Hazar was discovered by the CMOC in 2007. It is located around 40 south-west of Kalamkas-More. The fieldâs 2P reserves are estimated at 404 MMb of oil 5.7 Bcf of associated gas and 215 Bcf of solution gas.  Both fields are in the North Ustyurt Basin, i.e. in a different geological setting compared to Kashagan which is in the Precaspian Basin. Kalamkas-More and Hazarâs reservoirs are Mesozoic clastics at relatively shallow depths (1,500-2,000 m), there is no salt in the section and the oil is sweet.  The shareholders of NCOC are KMG Kashagan B.V. (16.87%), Shell Kazakhstan Development B.V. (16.81%), Total EP Kazakhstan (16.81%), AgipCaspian Sea B.V. (16.81%), ExxonMobil Kazakhstan Inc. (16.81%), CNPC Kazakhstan B.V. (8.33%), Inpex North Caspian Sea Ltd. (7.56%). CMOC comprises Shell RD Offshore Ventures as well as Oman Pearls and KazMunayTeniz (a KMG company).
Kazakhstan (Northern-Western Precaspian Sub-basin (Precaspian)) Karachaganak