Karachaganak Petroleum Operating B. V. (KPO) has Announced its Performance Results for 2018
In 2018, KPO managed to reach record production levels of 148 million boe (barrels of oil equivalent) of stabilized and unstabilized liquid hydrocarbons, raw and fuel gas. 8.6 billion cubic metres of gas, which is approximately 45.4 per cent of the total gas produced, were re-injected to maintain reservoir pressure
According to Edwin Blom, KPO General Director, the past year was notable for a number of major achievements.
On December 20, 2018, KPO achieved an important milestone by successfully defending its Design Project Update before the Central Exploration and Development Committee of the Ministry of Energy of the Republic of Kazakhstan.
«The new document allows KPO and the RoK to move forward with the development of the unique gas-oil-condensate field, Karachaganak, is using a wide range of advanced and innovative technologies in order to maximize liquid hydrocarbon production», added Edwin Blom.
At the end of 2018, the Karachaganak Partners signed an agreement that sanctioned the launch of the KPC Gas Debottlenecking Project (KGDBN).
According to KPO General Director, this was a significant milestone in the continued development of the Karachaganak field. The purpose of KGDBN is to maximize incremental production of liquids that will result in significant economic returns for the Republic of Kazakhstan and the Karachaganak Partners».
As of today, the Karachaganak Partners have invested $24 billion in the development of the field, whilst direct payments to the RoK have reached $17 billion.
In KPO the principles of sustainable development and highest environmental standards are imbedded in all business processes. The Venture has been particularly successful in such areas as reduction of air emissions, waste management and the implementation of «green» technologies. Since 1998, KPO has invested $380 million into environmental protection. Last year’s gas utilisation rate at Karachaganak was 99.94 per cent, which is a world-class achievement.
In May 2018 KPO hosted the Second International Environmental «Uralsk Green Forum» during which a cooperation and partnership agreement was signed between the International Centre for Green Technologies and Investment Projects, WKO Akimat and KPO. The document aims to coordinate efforts for the implementation of joint projects as part of Kazakhstan’s transition to «green economy».
KPO was also among the winners of the 2018 Environmental Responsibility contest among the country’s oil and gas companies co-hosted by the World Wildlife Fund (WWF) of Russia and CREON Group with the support of the RoK Ministry of Energy in partnership with the United Nations Environment Programme in Central Asia (UNEP-CA), CREON Capital and the National Rating Agency.
Earlier KPO was recognized by the American Chamber of Commerce in Kazakhstan for its outstanding achievements in the area of environment protection. It was presented with the top prize at the annual social responsibility contest.
KPO has been very supportive of local manufacturers and strives to increase the share of local content in the Karachaganak Project.
«Last year KPO started localisation of 8 types of goods worth $70 million and 8 complex services worth $390 million. KPO is the first company in Kazakhstan, which has placed an order for refurbishing high pressure gas turbines at a service center in Uralsk and the first international consortium that used locally produced drilling bits in its daily business, which in itself is an important step forward.
In 2018, the share of local content in goods, works and services procured by KPO reached 60 per cent, which in monetary terms is $474 million. Since signing the FPSA in 1997, the Local Content in procurement by KPO has exceeded $7 billion», said Edwin Blom.
Increasing the proportion of local employees is also one of KPO’s top priorities. In 2018, Kazakhstan employees accounted for 95% of technical staff and supervisors, and 77% of managers. Overall, since signing the FPSA, more than $218 million has been invested in the education and training of national personnel.
KPO annually implements a large number of social infrastructure development projects for the West Kazakhstan Oblast. The list and priorities are set by the WKO authorities. The program provides for the construction and repairs of roads, streets, bridges as well as healthcare, education, culture and sports facilities. Only Kazakhstani contractors are involved. To date, KPO’s investments in the WKO social infrastructure has reached the total of $368 million. In 2018, it was agreed to increase the annual social spend from today’s 20 to 30 million for the period from 2019 to 2023.
In 2018, KPO supervised the implementation of 36 social infrastructure projects, the highest number in the history of the company. 31 projects were successfully completed during the year and the rest are still ongoing.
As part of the «Digital Kazakhstan» initiative KPO along with other energy companies operating in Kazakhstan were given the task of developing Karachaganak Technological Modernisation and Digitalization Plan. An International Digitalization Forum was hosted in Uralsk on November 29, 2018 in conjunction with WKO Akimat. The event was attended by Deputy Prime Minister and senior officials from the Ministry of Education and Science of the Republic of Kazakhstan and KAZENERGY. Leading RoK and WKO universities, international experts and large international IT companies were also represented.
At the Forum, KPO presented its own Digitalization Road Map setting out the milestones along the Venture’s transition to digital technologies with a view to optimising, improving and streamlining business processes in various activities such as production, well operations, expansion projects, local business capabilities development and integration with other parts of its operational infrastructure. One of the Forum’s highlights was the signing of a Memorandum on Cooperation between KPO, Ministry of Education and Science, WKO Akimat and KAZENERGY. The document is intended to facilitate coordinated efforts towards enhancing local content through the training of new professionals and the support of start-up companies.
Summarising the results of 2018, Edwin Blom said: «KPO has tremendous creative potential thanks to well-coordinated teamwork, competence and unrelenting aspiration to attain new highs. I hope that our efforts to introduce cutting edge technologies and to continuously enhance efficiency will allow us to maintain a leading position within the Kazakhstan’s energy sector. One of our priorities for 2019 is to deliver the Shutdown safely and efficiently and to carry on with the plateau extension projects including KGDBN, the 4th Injection Compressor Project and 5th Trunkline Project. Throughout our paramount focus of attention will be on industrial safety, occupational health and protection of the environment. In the long-term KPO will strive to manage Karachaganak’s resources in a wise and efficient manner in order to maximise the value for the Republic of Kazakhstan and the Partners».