UPSTREAM PERFORMANCE OVERVIEW *
Exploration and Production
In 2009 the company drilled 19 exploration and appraisal wells, including 12 wells that gave a commercial oil inflow. Within the framework of exploration work in license area 1928, Karabulak-1 well was flowing with 37 m3 of oil per day. As a result of hydraulic fracturing, Kemer-3 well produced 4 m3 of oil per day, thus being the first well in the eastern part of this license area where a crude oil production was performed. In license area 1057, Tuzkol-18 well had an oil inflow of 55 m3/day with a water cut of 45%. This is the first well that produced oil from Cretaceous deposits under License 1057. In license area 951, Doschan-18 well produced 30 m3 of oil a day with intermittent flow. At Aryskum field, Aryskum-407 well showed an oil inflow of 76 m3/day from Jurassic sediments of Karagansay reservoir rocks.
The total scope of 2D and 3D seismic surveys in 2009 was 80 km2 and 388 km2, respectively. The exploration efforts resulted in a discovery of new deposits in the south-east and east parts of Kyzylkiya field.
In 2009, the total production volume of PetroKazakhstan Inc. (including PKKR, and 50% shares in Kazgermunai JV and Turgai Petroleum JV) was 6.2 million tons of oil (48.6 million barrels).
Gas Utilization Projects (GUP) at Company Fields
In 2009, within the GUP scope, gas at Kumkol field was partially utilized to produce electric power at the gas turbine plant (GTP) with a capacity of 55 MW. The remaining volumes were injected in the reservoir by a compressor with a daily throughput of 140 thousand m3. The commissioning of the GUP Phase 2 facilities ensured a complete gas utilization at Kumkol field. In 2009, the total length of the gas pipelines laid totaled 15,197 meters.
Gas produced at Kyzylkiya field was pumped to Aryskum field for further utilization. The Aryskum field gas injection system was injecting gas produced at Aryskum and Kyzylkiya fields into the reservoir through a compressor with a capacity of 854 thousand m3/day. Gas was also utilized at the 6MW electric power plant. In 2009 the installation of 2 additional blocks with a 3 MW capacity each started at this gas power plant.
At the beginning of 2009, a gas piston power plant was fully completed and commissioned at Maibulak field that consumes up to 2.63 million m3 of gas per year to produce electric power. The power plant has two gas generators with 893 kW capacity each. Also, in 2009, a gas injection system was built at Maibulak with a capacity of 9.2 million m3 per year.
DOWNSTREAM PERFORMANCE OVERVIEW**
In 2009 the company supplied 2 million tons of crude oil to the Shymkent Refinery for processing. On the whole, last year the Shymkent Refinery processed 4.007 million tons of oil (31.04 million barrels). The share of high-octane gasolines in the total gasoline pool reached 56.62%, the jet fuel yield was 5.99%.
To release the tension in the fuel market of South Kazakhstan, and following PKOP’s initiative, the annual scheduled turnaround of the refinery was shifted from October 1 to October 20, 2009. In spite of this, the scheduled repair work was completed ahead of the schedule previously agreed with the Ministry of Energy and Mineral Resources.
All repair work and investment projects were aimed to improve the refinery performance, to increase the reliability of its equipment and to ensure further good and smooth operation of the refinery.
MARKETING AND TRANSPORTATION PERFORMANCE OVERVIEW
Crude oil and oil product domestic supplies, as well as their exports, were continued. Last year PetroKazakhstan Trade House sold more than 1.9 million tons of oil products, including 1.24 million tons sold domestically and 704 thousand tons of oil products supplied for export.
PetroKazakhstan annually participates in the program for cheap diesel supplies to farmers during spring and autumn agricultural activities. In 2009 diesel shipments to farmers reached about 118 thousand tons. Besides, the company traditionally shipped 5 thousand tons of mazut at a reduced price to social industrial facilities during the 2009 heating season.
SAFETY AND ENVIRONMENTAL PROTECTION IN 2009
PetroKazakhstan’s priorities in industrial safety, health and environmental protection are to ensure a safe working environment, to protect the health of the company personnel and the population living in the regions of the company operations, as well as to preserve a favorable natural environment. For these purposes the company business units have implemented international standards: the environmental management standard ISO 14001:2004 was successfully implemented at PKOP in 2008; and at PKOSI and Marketing and Transportation sites – in 2009. The health and industrial safety management standard OHSAS 18001:2007 was implemented at PKOSI, PKOP and PKTH subdivisions. Key HSE Achievements in 2009:
Upstream Business Unit
- A safety and health management system, which includes all necessary health and safety provisions, procedures and instructions, has been developed for PKKR.
- An industrial safety declaration has been developed for PKKR sites.
- Production facilities commissioned in 2008-2009 have gone through the working conditions certification.
- Reconstruction of the cold waste storage site has been completed. The Kyzylorda Sanitary and Epidemiological Supervision Department has issued a site certificate of hygiene.
- Liquid cold wastes, including residual wastes of the previous years, have been fully recycled.
- At Maibulak field a gas turbine plant has been commissioned, thus completing the gas utilization program for the field.
- At Aryskum field the construction of bio-ponds for domestic waste water treatment has been completed. A solid domestic waste disposal site has been constructed.
Downstream Business Unit
- Zero fatality and severe accident, serious incident, fire and serious environmental incident rate.
- No motor vehicle accidents and no inflammations or fires during the year at PKOP TOO and its contractors.
- A lot of efforts were made to implement the health and safety management system OHSAS 18001:2007. A positive opinion has been obtained from an external international auditor.
- Following the RK Government’s Resolution regarding the construction of the Koksaray impoundment, requiring relocation of the Akdala evaporation pond, a new storage pond was constructed. The facility was commissioned based on the working committee’s report.
- Environmental protection action plan was implemented to the amount of 370.9 million tenge vs. the planned 295.1 million tenge.
Marketing and Transportation Business Unit
- No accidents and incidents with PetroKazakhstan and contractor employees.
- Efforts have been made to implement international safety and health management systems 18001:2007 and the environmental management system ISO14001:2004. International certificates of conformance have been obtained.
2009 CERTIFICATES AND AWARDS
In 2009, 1 employee of PetroKazakhstan was awarded with the Kurmet order, 1 employee with a letter of gratitude from the Prime Minister of the Republic of Kazakhstan, 5 employees – with certificates of honor from the MEMR, and 1 employee – with a certificate of honor from the RK Trade Union Federation. 16 employees of PetroKazakhstan were awarded with certificates of honor, 15 – with letters of gratitude, and 5 - with medals of KazEnergy Association devoted to the 110th anniversary of Kazakhstani oil.
PKKR business unit received the silver reward Paryz 2008 from the President of the Republic of Kazakhstan, N.A. Nazarbayev, in the Best Socially Responsible Enterprise nomination. The business unit was among the winners of the 2008 republican health and safety competition in the Best Organization/Enterprise nomination, and in 2009 it got the Golden Prometheus premium of the oil and gas industry in the Best Environmental Program nomination.
PKOP received a certificate of compliance with the health and industrial safety management system OHSAS 18001:2007 in the field of “Refining, transportation and storage of oil and oil products”.
PKOSI and PKTH received a certificate of compliance with the health and industrial safety management system OHSAS 18001:2007 and a certificate of compliance with the environmental management system ISO 14001:2004 in the field of “Corporate governance. Supply of resources. Oil marketing and transportation”.
2009 MEMORANDA FOR SOCIAL SUPPORT
Traditionally, in 2009 a Memorandum of Cooperation was signed between the Kyzylorda Oblast Akimat and PKKR to the amount of 450 mln tenge. In addition, PKKR allocated over 297 mln tenge to social projects in Kyzylorda oblast.
An annual memorandum was also signed between the SKO Akimat and PKOP for the social support of the region to the amount of 150 million tenge. Besides, PKOP allocated about 50 million tenge to SKO for other social activities.
PetroKazakhstan’ Scholarship Program for support of the talented young people was continued. Following a competition procedure, 13 persons in 2009 were sent to study at the Institute of Petroleum and Gas in China and the best universities of Kazakhstan.
PetroKazakhstan is a vertically integrated oil and gas Group owned by China National Petroleum Corporation and KazMunayGas National Company and engaged in the acquisition, exploration, development and production of oil and gas, oil refining, and sales of oil and oil products.
* The contractual areas of PKKR AO, PKVI, Kolzhan, SSM Oil and Orient Petroleum are included.
** Controlled through the Agreement for Technical and Financial Services and Logistical Support.
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