Kazakh Karachaganak output down 4 pct in 2010

Feb 10. Reuters

By Maria Gordeyeva

* Oil equivalent output falls to 133.7 mln barrels
* Gas utilistation rates “unprecedented” – operator
* Kazakh state company eyes stake

Kazakh Karachaganak output down 4 pct in 2010Hydrocarbon production fell 4 percent last year at Kazakhstan’s major Karachaganak field, in which the state is seeking a stake, the international consortium that operates the project said on Thursday.

Output fell to 133.7 million barrels of oil equivalent in 2010 from 139.4 million barrels in 2009, Karachaganak Petroleum Operating Group said, without giving a reason.

The consortium, led by Italy’s ENI <ENI.MI> and Britain’s BG Group <BG.L>, said in a statement that output included stable and unstable liquids, sour gas, and sweet gas for use as fuel.

Kazakh state oil and gas company KazMunaiGas [KMG.UL] has stated its intention to acquire a stake in the consortium, in which ENI and BG each own 32.5 percent, U.S. major Chevron <CVX.N> 20 percent and Russia’s LUKOIL <LKOH.MM> 15 percent.

ENI Chief Executive Paolo Scaroni said in August that the company was holding talks with Kazakhstan on cutting its stake in the project amid a dispute over costs.

KPO said that five new wells had been drilled last year. Overall gas utilisation was 99.87 percent, meaning only 0.13 percent of total gas production of just over 15 billion cubic metres was flared.

“This level of gas utilisation is unprecedented in oil and gas operations anywhere in the world,” the consortium said.

Kazakhstan’s Ecology Ministry said last month it had fined KPO approximately $27 million for environmental violations last year. It cited “a number of violations of ecology laws and damage for arbitrary and excessive storage of waste”.

The fine, though relatively small, was the latest in a series of challenges faced by the operators of the Karachaganak project, which produces nearly half of Kazakhstan’s gas, about one-fifth of its oil and has substantial expansion plans.

Kazakhstan has previously accused KPO of violating immigration laws and overstating costs by $1.3 billion. The consortium has consistently denied any wrongdoing.

http://ph.news.yahoo.com/rtrs/20110210/tbs-oil-karachaganak-7318940.html

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