Oil & Gas is benefit for us

Apr 23. Kazpravda


Oil & Gas is benefit for usThe decline in production of oil and gas condensate is conditioned by both natural processes and subjective factors.

Results of the Oil & Gas Ministry’s activity in 2012 and the tasks for the coming period were considered yesterday in the Majilis at the “government hour” under the chairmanship of Vice-Speaker of the House Kabibulla Dzhakupov.

Presenting his progress report, the Minister of oil and gas Sauat Mynbayev noted that the decline in production of oil and gas condensate in the past year is conditioned by natural processes, technical and geological reasons and unscheduled maintenance work on a number of industrial enterprises. In particular, the postponed start of commercial production at the Kashagan field scheduled for the 1st half of 2013 significantly adjusted the performance of the industry.

The figures of oil’s exports in 2012 are comparable with the results of 2011, the minister said. The slight decline in the production is explained by the reduction in imports of Russian oil, resulting in the substitution of demand in the domestic market.

As for petroleum products, the domestic refineries, it should be noted fulfilled the plan. The ban on export of light petroleum products: gasoline, jet fuel and diesel fuel was in action within a year. Only oil fuel and other dark petrochemicals were exported. But, except for heavy oil (masut), Kazakhstan remains dependent on import, especially on high-octane gasoline and jet fuel.

Speaking of that the Minister particularly focused attention on the method of counter oil supplies to Russia for the imported petroleum products from Russia until 01.01.2014. According to its terms, our country must deliver to Russia 1.2-1.5 million tons of crude oil imported in 2012 at the price, which is lower than the export tariffs for foreign countries. This technique has been ratified, but it is not very profitable for Kazakhstan. In order to reduce dependence on Russian supplies of aviation kerosene, particularly before the modernization of domestic refineries, RK Government plans to introduce international standards of certification on fuel JET A-1, which in turn requires funds from the national budget.

In the context of comparing the retail prices of petroleum products in the Republic of Kazakhstan and the Russian Federation, it was noted that in 2012, they were formed by the Rules approved by the ARNM on the agreement with Oil &Gas Ministry. This helped to smooth the dependence on the conjuncture leaps in the global market, especially in the peaks of seasonal consumption.

– Unfortunately, in some periods the price gap was so large that there was re-exportation of diesel fuel to Russia that led to its short-term deficit in Kazakhstan – the minister explained.

At the same time, he said, the supply of diesel fuel for the sowing – harvesting works was fulfilled at 100% at discounted prices.

– The discount in price was substantial. This year the work has already begun: 360 tons of diesel fuel was allotted at the reduced prices for the spring field works, – he added.

As for gas, its production and, accordingly, production in the form of dry commercial product increased by 2.3%. The forecast for 2013 is positive and the growth of production is planned up to 22.1 billion cubic meters.

– In accordance with the Agreement on the counter gas supplies between “Gazprom”, “Uzbekneftegaz” and the EP KMG, all import of gas is “swapped” with the Karachaganak exports at the same price and in equal volumes, – the minister continued, adding that the volume of gas exports from the country, taking into account such swap transactions in the current year amounted to 11.2 billion cubic meters (101.8% to 2011).

The problems of the industry, which “are not solved overnight and take a long time,” were noted in the report of co-chairman of the Majilis Committee on Ecology and Nature Management Alexander Milyutin. Among the challenges he stressed, first of all there is the quality of oil products in the domestic market.

– These issues were discussed at the last year’s “government hour” and today we have to repeat them with the recommendations to the new composition of the Government, – said the head of the committee.

According to him, first and foremost it is necessary to consider amendments to the Code of Administrative Offences on increased responsibility of entities for selling of non-liquid goods. Secondly, they need to monitor compliance of petroleum products with the requirements of quality standards, and not only in production, but also in the retail and wholesale.

– If the Government introduces the amendments in relevant bills, the Parliament will support them, – promised the deputy.

Speaking of the load of domestic refineries, he raised less ambitious, but no less important issue: the deputies of the committee in conjunction with MOG last year developed the legislative amendments on state regulation of production and turnover of certain types of oil and sent them to the government’s consideration and conclusion. The purpose of the document is to ensure a full load of the country’s refineries with crude oil and gas condensate, including with the so-called “swap” oil.

– Unfortunately, so far the government’s conclusion on the draft law was not received, despite the fact that all relevant government bodies approved it- said Milyutin.

Appropriate recommendations with the parliamentary comments and suggestions were adopted in conclusion of the meeting.