Kazakhstan Energy Data, Statistics and Analysis - Oil, Gas, Electricity, Coal file:///Z:/NewCABs/V6/Kazakhstan/Full.

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Kazakhstan
Last Updated: November 2009

Background
Kazakhstan has the Full development of its major oilfields could make Kazakhstan one of the world's top
second largest oil fiveoil producers in the next decade.With production of 1.43 million barrels per day
reserves among the (bbl/d) in 2008, Kazakhstan is already a major producer, and planned further
former Soviet development of its giant Tengiz and Karachagank fields is expected to add 1.5 million
republics after
bbl/d by 2014. Kazakhstan's sector of the Caspian Sea is believed to hold several other
Russia as well as the
second largest oil
major oil and natural gas deposits as yet unexploited, including the giant Kashagan oil
production. The field.
country also has
Steadily rising natural gas production is turning Kazakhstan from a net importer to a net
large reserves of
natural gas and exporter in the near term. Natural gas development has lagged behind oil due to the lack
steadily increasing of domestic pipeline infrastructure linking the western producing region with the eastern
production. industrial region.

The lack of access to a seaport makes the country dependent on pipelines to transport
its hydrocarbons to world markets. Neighbors China and Russia are key economic
partners, providing sources of export demand and government project financing.
Kazakhstan's continued growth in oil and natural gas production depends on further
development of its resources together with the construction of additional export routes.

Oil
Kazakhstan 's oil Kazakhstan's proven oil reserves are estimated at 30 billion barrels by the Oil and Gas Journal in
production is January 2009, although probable reserves could be much higher. The country's main oil reserves
expected to rise are located in the western part, where three major onshore oil fields, Tengiz, Uzen, and
substantially in the Karachaganak, are located. In addition, Kazakhstan's sector of the Caspian Sea is believed to
near to mid-term. contain even greater undiscovered oil reserves than the estimated 9-13 billion barrels at its
offshore Kashagan field.

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Sector Organization
The Ministry of Energy and Mineral Resources monitors the state's interests in production-sharing
agreements (PSAs). Kazmunaigaz (KMG) is the state-owned oil and gas company, responsible for
operating state oil and gas interests and its oil and gas pipelines. Increased oil production in
recent years has been the result of an influx of foreign investment into Kazakhstan's oil sector.
International projects have taken the form of joint ventures with KMG, as well as production-
sharing agreements and exploration/field concessions.

Kazakhstan's Law on Subsoil and Subsoil Use governs the transfer of subsoil use rights and was
amended in 2005 to give the state the basis to exercise pre-emption rights on any oil assets put
up for sale in the country. The law was amended again in 2007 to allow the state to force
retrospective changes to any existing oil contracts or even break the contracts if they are deemed
a threat to the country's security. Joint ventures are the most common type of investment; the
government announced in early 2008 that no more PSAs will be awarded.

Production
Kazakhstan's oil production reached 1.4 million barrels per day (bbl/d) in 2008, more than double
the level of a decade earlier, while domestic oil consumption remained low at 239,000 bbl/d. The
seven largest currently producing oil fields are all located onshore in the western part of the
country, except for the Kumkol fields, which are in the south central area. These seven fields
account for 1.1 million bbl/d (close to 80 percent) of liquids production in the country.

Currently Producing Oil Fields

Tengiz, which produced 377,000 bbl/d of crude oil and 38,000 bbl/d of condensate in 2008, is the
world's deepest operating giant field at 12,000 feet deep. The field has been developed since
1993 by the Tengizchevroil (TCO) joint venture, a 40-year, US$20 billion agreement between
Chevron (50%), ExxonMobil (25%), Kazmunaigas (20%), and LUKArco (5%), signed with the
Kazakh government in 1993. Capacity is increasing and production is expected to peak at
between 750,000 bbl/d and 1 million bbl/d by 2012. The Tengiz field is located along the northeast
shore of the Caspian Sea and is the largest source of oil production in the country. Recoverable
crude oil reserves have been estimated at 6-9 billion barrels by consortium member Chevron.

Karachaganak, which produced 233,000 bbl/d of condensate in 2008, is one of the world's largest
oil and gas condensate reserves. It is located close to the Russian border. The field is operated
by Karachaganak Petroleum (KPO) consortium under a production sharing agreement (PSA)
which includes Agip and BG, (each 32.5%), Chevron (20%), and Lukoil (15%). The PSA was
signed in 1997 to develop the field for 40 years. Phases 1 and 2 focused on condensate
production, while Phase 3 is focused on increasing natural gas production. In 2008, work on
Phase 4 began and is aimed at processing sour condensate into sweet oil by 2011. According to
KPO, the field holds reserves of around 8-9 billion barrels of oil and gas condensate and 47 trillion
cubic feet of natural gas. The consortium aims to triple output by investing up to $10 billion over
the next 6-8 years.

Uzen produced 134,000 bbl/d in 2008. It is 100 percent owned by Kazmunaigaz and has been in
operation since 1961. Rehabilitation of the Uzen field and development of the adjacent
Karamandybas field is aimed at increasing production.

Aktobe produced 117,000 bbl/d in 2008. China National Petroleum Corporation (CNPC) acquired
a 60.3% stake in 1997 and another 25.12% share in 2003. Since 1997 oil production has more
than doubled. In 2007, exploratory drilling discovered a number of associated high yield wells

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which are being developed.

Mangistau produced 113,000 bbl/d in 2008 and is operated jointly by Kazmunaigaz and CNPC.

North and South Kumkol each produce about 65,000 bbl/d. The south Kumkol fields are shared by
CNPC (66.7%) and Kazmunaigaz (33.3%). The north Kumkol field is shared by Lukoil and CNPC.
These fields are located in south central Kazakhstan.

Fields Under Development

The Kashagan field, the largest known oil field outside the Middle East and the fifth largest in the
world in terms of reserves, is located off the northern shore of the Caspian Sea, near the city of
Atyrau. The consortium operating the field, the Agip Kazakhstan North Caspian Operating
Company (Agip KCO) was replaced in January 2009 by a new company led by Total, Eni,
ExxonMobil, Shell, and KMG, each with a 16.8-percent share, ConocoPhillips with a 8.4-percent
share, and Inpex at 7.6 percent. Agip KCO originally estimated the field's recoverable reserves at
13 billion barrels of oil equivalent, with total reserves-in-place of around 38 billion barrels. In late
2007, an Eni spokesman estimated that the field would start production in late 2011, but due to a
series of disputes between the government and Agip KCO, the timetable has been pushed back to
October 2014 under the new ownership structure. Initial production is projected at 450,000 bbl/d
with peak production of 1.5 million bbl/d projected for the end of the next decade.

The Kashagan field has presented particular challenges for its developers: it contains a high
proportion of natural gas under very high pressure, the oil contains large quantities of sulfur, and
the offshore platforms require construction that can withstand the extreme weather fluctuations in
the northern Caspian Sea area. The Kashagan area also holds other hydrocarbon discoveries,
including Kashagan SW, Aktote, Kairan and Kalamkas. These other offshore fields are large by
international standards, but are still considerably smaller than the giant Kashagan field. Appraisal
programs for these fields are currently underway.

Located in the Caspian Sea between Russia and Kazakhstan, the Kurmangazy field is the least
developed of Kazakhstan's upcoming oil field projects. Russian and Kazakh state oil firms Rosneft
and KMG, respectively, signed a joint development deal in 2005. The first well was drilled in early
2006 but came up dry, although further drilling is planned. The field is believed to hold up to 5
billion barrels of oil.

In October 2007, Shell discovered hydrocarbons in its Pearls Block (called Zhemchuzhina in
Kazakh), which lies just south of the Kalamkas field. The Pearls PSA was signed in 2005 by Shell
(55%) and KMG (25%), and by Oman Pearls, a subsidiary of Oman Oil (20%). Test drilling is
currently continuing in the Pearls block, according to Shell Oil.

Exports
In 2008, Kazakhstan had net oil exports of about 1.2 million bbl/d, with current infrastructure
delivering it to world markets by pipelines to the Black Sea via Russia, by barge and pipeline to
the Mediterranean via Azerbaijan and Turkey, by barge and rail to Batumi, Georgia on the Black
Sea, and by pipeline to China. However, the rapid growth of oil production requires increased
facilities for exporting it.

Kazakhstan Oil Pipelines

Source: Kazakhstan Energy Ministry

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Current Export Oil Pipelines

Caspian Pipeline Consortium (CPC)

The Caspian Pipeline Consortium (CPC) oil pipeline was commissioned in 2001 and runs 980
miles from the Tengiz oil field to the Russian Black Sea port of Novorossiysk. The pipeline
consists of refurbished Soviet-era pipeline links along the Caspian and newly constructed
components of the line. It has a capacity of 700,000 bbl/d and reportedly transported an average
of 675,000 bbl/d of crude in 2008, which included 557,000 of Kazakh oil, mainly from the Tengiz
and Karachaganak fields, and 118,000 of Russian oil. In late 2008, joint partners Russia and
Kazakhstan agreed to expand the CPC pipeline capacity to 1.5 million bbl/d by 2013, but a delay
in the final investment decision to mid-2010 due to technical complications moved the completion
date to mid-2014.

Kazakhstan-China Pipeline
A joint venture between China National Petroleum Corporation (CNPC) and KMG, the
Kazakhstan-China pipeline will span 1,384 miles when complete, running from Atyrau port in
northwestern Kazakhstan to Alashankou in China's northwest Xinjiang region. The Kenkiyak-
Kumkol (Phase 3) segment of the Kazakhstan-China crude oil pipeline started commercial
operations on October 6, 2009. Construction of the 492 mile-section started in April 2008 and a
trial run was carried out in August 2009. The Kenkiyak-Kumkol segment connects oil fields in the
Aktobe region to the Atasu-Alashankou pipeline (Phase 2), which has a capacity of 200,000 bbl/d
and has been online since 2006. The cross-border pipeline connects to CNPC/PetroChina’s crude
oil pipeline system in northwest China. On October 14, 2009, CNPC and KMG signed a
framework agreement to expand the pipeline capacity to 400,000 bbl/d under a second phase of
development. The pipeline is currently supplied from the Aktobe and Kumkol fields. Upon future
expansion, it will also carry oil from the Tenghiz and Kashagan fields. Kazakhstan shipped 85,000
bbl/d to China on the Atasu-Alashankou pipeline route during 2007. Phase 1, the Kenkiyak-Atyrau
pipeline, was the first oil pipeline built in Kazakhstan since independence; it was completed in
2003 and currently links the oil fields in western Kazakhstan with the CPC pipeline. This line is to
be tied into the Kazakhstan-China pipeline now that the Kenkiyak-Kumkol section is complete, and
its direction of flow will be reversed, running from the Caspian fields off Atyrau to Kenkiyak.

Atyrau-Samara Pipeline
Kazakhstan's other major oil export pipeline, from Atyrau to Samara, is a northbound link to the
Russian distribution system. The line was recently upgraded by the addition of pumping and
heating stations and currently has a capacity of approximately 600,000 bbl/d. Before the
completion of the CPC pipeline, Kazakhstan exported almost all of its oil through this system.

Baku-Tbilisi-Ceyhan
The Baku-Tbilisi-Ceyhan (BTC) pipeline is a 1 million bbl/d capacity line in neighboring
Azerbaijan, which began exports in 2006. Kazakhstan contracted with Azerbaijan and the BTC
Pipeline Company to supply up to 500,000 bbl/d of oil via the pipeline and Kazakh oil supplies
were loaded into the BTC for re-export for the first time in October 2008. Oil supplies are currently
delivered by tanker across the Caspian to Baku, but an overland pipeline link from Atyrau to Baku
is a future possibility to directly export Tengiz oil.

Trans Caspian Transportation, Current and Future

Trans-Caspian shipments to Baku are to eventually reach 500,000 bbl/d, according to an October
2009 agreement between Kazakhstan and Azerbaijan. Kazakhstan ships oil to Baku and from
there the oil moves to the BTC pipeline or by rail to Batumi, Georgia. Reportedly, 100,000 bbl/d of
oil is currently being shipped across the Caspian.

In order to facilitate exports of oil from the Kashagan oil field during the next decade, Kazakhstan
is currently developing the Kazakhstan Caspian Transportation System (KCTS), which includes
the construction of a 454-mile, 500,000 bbl/d capacity onshore pipeline from Eskene in western
Kazakhstan to Kuryk on the Caspian near Aqtau, where a new 760,000-bbl/d oil terminal is to be
built. The system also includes the creation of a new fleet of tankers and new port facilities in
Baku, Azerbaijan.

Downstream/Refining
Kazakhstan has a crude oil distillation capacity of 345,100 bbl/d as of January 2009, according to
the Oil and Gas Journal. There are three major oil refineries: Pavlodar, Atyrau, and Shymkent.
Around 193,000 bbl/d of refined products were produced during 2007, up from around 191,000
bbl/d in 2006. Kazakhstan reportedly processed a total of 293,400 bbl/d in September 2009
according to Nefte Compass, and processed an average of 232,900 between January and
September, 2009.

The refinery at Pavlodar is supplied mainly by a crude oil pipeline from western Siberia since
Russian supplies are well placed geographically to serve that refinery; the Atyrau refinery runs
solely on domestic crude from northwest Kazakhstan; and the Shymkent refinery currently uses oil
from Kazakh fields at Kumkol, Aktyubinsk, and Makatinsk, although it is linked by pipeline to

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Russia. In October 2009, KMG and Sinopec signed a contract for construction of a new
processing facility at Atyrau. The facility will allow the plant to extract benzene and other
chemicals from oil while improving the quality of gasoline output. It is slated to be completed by
2013.

The refining sector in Kazakhstan has not received high levels of foreign direct investment like
other parts of the oil and gas production sector. Since domestic prices for refined products have
remained low, oil producers have more incentive to export crude oil to international markets
instead of refining it locally.

Natural Gas
With large amounts In January 2009, the Oil and Gas Journal estimated Kazakhstan's proven natural gas reserves at
of associated natural 85 trillion cubic feet (Tcf). Natural gas production in Kazakhstan is almost entirely associated gas,
gas at its oil fields, a by-product of oil extraction. Most of Kazakhstan's natural gas reserves are located in the west of
Kazakhstan has the the country, with more than half of proven reserves situated in the Karachaganak oil and gas
potential to become a condensate field, which reportedly has proven natural gas reserves of 48 Tcf. According to
net exporter in projections by the Kazakh Ministry of Energy and Mineral Resources, total natural gas production
upcoming years. could reach 1.5 trillion cubic feet (Tcf) in 2010 and 2.0 Tcf in 2015.

Natural Gas Production

Natural gas production has been steadily increasing from a low of 162 billion cubic feet (Bcf) in
1999 to 1.18 Tcf in 2008. Although Kazakhstan consumed slightly more natural gas than it
produced in 2008, or 1.19 Tcf, domestic consumption has been increasing at 9.5 percent per year
in the past decade compared with production growth of 22 percent per year. It is apparent the
country is shifting from being a net natural gas importer to becoming a net exporter within the next
few years. The Karachaganak natural gas and condensate field reportedly produced around 558
Bcf during 2008, 47 percent of total production, and the consortium developing Karachaganak
expects production to reach 900 Bcf by 2012. The Tengiz field reportedly produced 494 Bcf during
2008, while the remainder of gas produced came from other smaller fields. However, about 40
percent of natural gas produced is being reinjected back into the fields.

Natural Gas Exports

Kazakhstan currently serves as a transit state for natural gas exports from Uzbekistan and
Turkmenistan to Russia and onward. The two branches of the Central Asia Center (CAC) gas
pipeline, controlled by Gazprom, meet in the southwestern Kazakh city of Beyneu before crossing
into Russia at Alexandrov Gay and feeding into the Russian pipeline system. Almost all Uzbek and
Turkmen natural gas is exported through this pipeline plus some Kazakh gas produced from
Karachaganak and Tengiz. Several new natural gas export pipelines from the Caspian Sea region
are also in development or under consideration, potentially opening up new markets for Kazakh
natural gas.

Central Asia Center Pipeline (CAC) Expansion

In December 2007, Russia, Kazakhstan and Turkmenistan announced signing an agreement to
renovate and expand the western branch of the CAC pipeline and to construct a new pipeline
paralleling the western branch with a capacity of 706 Bcf per year. After this new pipeline’s
completion, slated for 2012, the route will have a total capacity of 2.8 Tcf, up from around 2.1 Tcf
currently. The agreement stipulates that each country will be responsible for building the section
of new pipeline in their respective territories. Russia’s agreement with the two countries was

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reportedly contingent on a Russian pledge to increase its buying price of Central Asian gas, but
the exact price is still undetermined.

Turkmenistan-Uzbekistan-Kazakhstan-China Pipeline
In December 2007, CNPC pledged to invest $2.2 billion in a 1.06 Tcf natural gas pipeline that
would run from Turkmenistan through Uzbekistan and Kazakhstan to China. According to the
construction plan, the pipeline is expected to start at Gedaim on the border of Turkmenistan and
Uzbekistan and extend 1,100 miles. About 325 miles would run through Uzbekistan and the rest in
Kazakhstan to reach Khorgos in China's northwestern Xinjiang region. CNPC partners in this
project are KMG and Uzbekneftegas. In 2006, Turkmenistan and China signed a 30-year supply
agreement starting at the end of 2009, when the pipeline was slated to be online. However, in
January 2009, the project was postponed as a result of the economic slowdown. The
Turkmenistan section was reported complete in October 2009, while the Uzbek section is to be
complete in November 2009. The Kazakh section is now set to be completed by June 2010.
December 2010 is the fill-up date and initial volume is projected at 159 Bcf per year. Full capacity
is to reach 1.4 Tcf by late 2013.

Kazakhstan-ChinaNatural Gas Pipeline Route

Source: Kazakhstan Energy Ministry

Natural Gas Distribution

KazTransGas, a subsidiary of KMG, controls and manages the gas pipeline transportation system
of Kazakhstan. However, Kazakhstan has two separate domestic natural gas distribution
networks, one in the west, which services the country's producing natural gas fields, and one in
the south, which mainly delivers imported natural gas to the southern consuming regions. The lack
of internal pipelines connecting Kazakhstan's natural gas-producing areas to the country's
industrial belt (between Almaty and Shymkent) has hampered the development of domestic natural
gas resources. Southern Kazakhstan receives much of its natural gas supplies from Uzbekistan
via the Tashkent-Bishkek-Almaty pipeline. In 2008, the Kazakh government announced plans to
build a new gas pipeline between Beyneu in the western region and Shymkent in the southern
region. The pipeline is expected to be operating by 2011. It will run 932 miles and tie into the
Turkmenistan-Kazakhstan-China gas pipeline near Shymkent, enabling exports as well as
domestic industrial use.

Downstream
Because of Kazakhstan's divided distribution network, Karachaganak's natural gas is mainly
exported northward to Russia's Orenburg processing plant, as opposed to being delivered to
Kazakh consumers in the south. A joint venture agreement between Gazprom and KMG was
agreed upon in 2008. Gazprom and KMG will each have a 50-percent stake in KazRosGas, the
joint venture that will purchase the gas and expand the Orenburg plant by 2012. Current deliveries
of Karachaganak gas to the Orenburg plant, located 84 miles from the field, are estimated at 250
Bcf per year. According to a recent report from Gazprom, the Orenburg facility is expected to
process 290 Bcf of Kazakh gas in 2009, up from 280 in 2008. The volume of Kazakh gas
processed at Orenburg is projected to exceed 620 Bcf by 2012.

Profile
Energy Overview
Proven Oil Reserves (January 1, 2009E) 30 billion barrels
Oil Production (2008E) 1.43 million barrels per day, of which 94% was crude oil.

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Oil Consumption (2008E) 239 thousand barrels per day

Crude Oil Distillation Capacity (2009E) 345.1 thousand barrels per day
Proven Natural Gas Reserves (January 1, 85 trillion cubic feet
2009E)
Natural Gas Production (2008E) 1.18 trillion cubic feet
Natural Gas Consumption (2008E) 1.19 trillion cubic feet
Recoverable Coal Reserves (2008E) 34.5 billion short tons
Coal Production (2008E) 111.5 million short tons
Coal Consumption (2008E) 80.6 million short tons
Electricity Installed Capacity (2007E) 18.7 gigawatts
Electricity Production (2007E) 72.4 billion kilowatt hours
Electricity Consumption (2007E) 64.7 billion kilowatt hours
Total Energy Consumption (2007E) 3.0 quadrillion Btus*, of which Coal (41%), Natural Gas (40%), Oil
(16%), Hydroelectricity (3%)
Total Per Capita Energy Consumption (2007E) 197.7 million Btus
Energy Intensity (2007E) 19,019 Btu per $2005-PPP**

Environmental Overview
Energy-Related Carbon Dioxide Emissions 216 million metric tons, of which Coal (54%), Oil (16%), Natural Gas
(2007E) (30%)
Per-Capita, Energy-Related Carbon Dioxide 14.2metric tons
Emissions (2007E)
Carbon Dioxide Intensity (2007E) 3.1 Metric tons per thousand $2005-PPP**

Oil and Gas Industry

Major Oil/Gas Ports Aktau (200,000 bbl/d), Atyrau, Kuryk (100,000 bbl/d)
Foreign Company Involvement Chevron, Total, CNPC, BG Group, Lukoil, ExxonMobil, Shell, ENI.
Major Oil Fields Tengiz, Karachaganak, Aktobe, Kumk
Major Pipelines (capacity, Mmcf/d) Caspian Pipeline Consortium (CPC), Atyrau-Samara
Major Refineries (capacity, bbl/d) Pavlodar (162,656 bbl/d), Shymkent (78,000 bbl/d), Atyrau (104,427
bbl/d)

* The total energy consumption statistic includes petroleum, dry natural gas, coal, net hydro, nuclear, geothermal, solar, wind,
wood and waste electric power.
**GDP figures from Global Insight estimates based on purchasing power parity (PPP) exchange rates.

Links
EIA Links
EIA - Kazakhstan Country Energy Profile

U.S. Government
CIA World Factbook
U.S. Department of Energy, Office of Fossil Energy: International Affairs
US Embassy, Astana
U.S. International Trade Administration, Energy Division

General Information
About Kazakhstan
Caspian Pipeline Consortium
EurasiaNet.org--News and Analysis from Central Asia and the Caucasus

Associations and Institutions

Chevron
CNPC
Government of Kazakhstan
Kazmunaigaz
Kaztransgaz
Shell Oil
U.S.-Kazakhstan Business Association

Sources

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Agence France Presse

BBC Monitoring Central Asia Unit
Central Asia Newswire
Caspian News Agency
Caspian Business Report
CIA World Factbook
Economist
Environment News Service
Eurasia Net
Financial Times
FSU Oil and Gas Monitor
Global Insight
Hart's European Fuels News
IMF
Interfax News Agency
Kazakhstan General Newswire
The Moscow Times
Nefte Compass
PR Newswire
Radio Free Europe/Radio Liberty
Reuters
RosBusinessConsulting Database
Tender Info
The Times of Central Asia
Trend Daily Economic News
Turkish Business News
Stratfor
U.S. Department of Energy
U.S. Energy Information Administration
U.S. Department of State
Wikipedia
World Markets Research Centre- Global Insight

Contact Info
cabs@eia.doe.gov
(202)586-8800
cabs@eia.doe.gov

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