PetroKazakhstan Kumkol Resources AO (PKKR) is an oil producing company registered in the Republic of Kazakhstan and engaged in development of oil fields and exploration blocks in the South Turgai basin: Kumkol South, South Kumkol, Kyzylkiya, Aryskum, Maibulak, East Kumkol and North Nuraly.

 

Over the past three years PetroKazakhstan Kumkol Resources has increased its licensed exploration territories by eight times having purchased the rights to three new exploration licenses for a total area of 14 thousand km2 (license block 1057, Karaganda license and license 951-D). PKKR’s active exploration efforts resulted in a discovery of three prospective fields (East Kumkol, North Nuraly and Kolzhan) that significantly increased the company reserves.

 

The oil production level has also gone up. If at the end of 1996 the production level at Kumkol was 5.8 thousand tons of oil per day, then at the end of 2008 the average daily production at PKKR reached 9.1 thousand tons of oil. During its operation in Kyzylorda Oblast PetroKazakhstan Kumkol Resources produced more than 51 million tons of oil, including 3.194 million tons produced in 2008.

 

For the purpose of field and associated infrastructure development PKKR has carried out a number of major projects, including construction of collector systems at fields, infield motor roads, systems for water injection into reservoirs for the purpose of reservoir pressure maintenance, oil storage tanks, as well as drilling and completion of wells. In 2007 PKKR constructed a 10 inch gas pipeline Kyzylkiya-Aryskum, put into operation an oil gathering system at Aryskum and Kyzylkiya fields, modified the reservoir pressure maintenance system at Kumkol field and also expanded the field camp at Aryskum field to provide accommodations to 200 additional people.

 

In 2008 gas utilization facilities were launched at Kumkol, Aryskum, Kyzylkiya and Maibulak fields: the work related to the gas re-injection at Kumkol field, the gas transportation system from Kyzylkiya to Aryskum field and the gas injection system at Aryskum field was finalized. All construction and installation activities were also fully completed under the gas utilization project at Maibulak field. In early 2009 a state committee accepted the facility for operation.

 

On five sites of the gas gathering system at Kumkol field the construction, installation and pre-commissioning operations were completed at the beginning of the 2nd quarter. In May 2009 the state committee accepted all five sites for operation.

 

Being one of the first to start a gas utilization program PetroKazakhstan company as early as the first half of 2009 completed the gas utilization work, thus having fully discharged its commitments.

 

Investments made by PKKR in the associated gas utilization include:

- Construction of a gas turbine plant at Kumkol: $54 million

- Associated gas utilization facilities at KAM fields (Kyzylkiya, Aryskum, Maibulak): $65.3 million

- Associated gas gathering and utilization facilities at Kumkol: $31 million.

 

PKKR’s future plans within the gas utilization program include:

- construction of additional gas turbine plants for 50 MW at Kumkol together with TURGAI PETROLEUM AO (50/50%): $47.5 million.

 

Within the framework of the gas utilization project PKKR invested $96.3 million during the years 2004-2009. The company was one of the first in Kazakhstan to start to develop and carry out a gas utilization program. The projects that have been completed over that period include: construction of a 55MW gas utilization and power generation plant at Kumkol field, construction of a compressor unit for re-injection of gas into wells at Kumkol, Aryskum and Maibulak fields, as well as commissioning of a gas piston power plant to produce electric power for internal needs at Aryskum and Maibulak fields. As a result of it the gas utilization is available at the following PKKR fields: Kumkol, Aryskum, Kyzylkiya and Maibulak. Starting from 2009 it will also be up and running at North Nuraly field by supplying gas via a pipeline to the gas utilization unit of the Kumkol gas turbine plant.

 

Injection of gas into reservoirs allowed maintaining the reservoir pressure, increasing the reservoir recovery and also significantly reducing contaminant emissions into the atmosphere.

 

The largest infrastructure projects of PKKR for the past five years include: construction of a main oil pipeline KAM – Zhosaly with a length of 176 km and a throughput of around 6.5 million tons a year, construction of an oil loading terminal at the Zhosaly railway station and implementation of the associated gas utilization program at company fields.

 

The oil pipeline that connected Kumkol group of fields with KAM group of fields, which had just been put into operation by then, and with an up-to-date oil loading terminal constructed at the Zhosaly railway station was put into operation in 2003. At the time of its construction it was the only high-pressure pipeline in the Republic of Kazakhstan operating at the pressure of 100 atmospheres. The terminal is also one of the most high-technology facilities in the RK. One of its most important features is the use of a closed dome loading technology that excludes evaporations into the atmosphere, thus making the terminal environmentally safe. The construction and all the work under the projects in most cases were done by local companies employing Kazakhstan workers. More than 1,200 temporary jobs were created for the period of construction and additional 150 permanent jobs were created for operation of the facility. At this point some design work is being done to diversify directions of this pipeline.

 

PetroKazakhstan Kumkol Resources continues to be one of the major sponsors for social and charity projects in Kyzylorda Oblast. During its operation in the republic the company has allocated significant funds to bring into effect sponsorship and charity projects. In 2008 the total volume of assistance exceeded $5 million. The financial support provided by PKKR to schools, kindergartens, summer camp Arai Sunrise, as well as to hospitals, clinics and other institutions, is well known inside Kazakhstan. The Demeu Social Fund initiated by the Kyzylorda Oblast Akimat and PKKR allows the company to participate actively in strengthening and supporting the social and economic development of Kyzylorda Oblast. In 2008 within the framework of the Memorandum of Cooperation signed between PKKR and the Oblast Akimat the Company provides $3 million. These funds will be used in various social, cultural and sport projects in Kyzylorda Oblast, including the support provided for some children organizations, development of rural settlements and utilities in Kyzylorda city.