Razorback and others, Howdy.
Kazakhstan is one of the world's most attractive countries for outside oil investment right now because of its amazing oil wealth and the desire of the government for modernization and cash flow. There are a few things to consider here.
The Tenghiz play of Chevron's has been idling along for a few years now not doing much of anything - they have just recently been bringing more people back in. The reason for this is a lack of export lines for the product - there simply has been no way to ship the oil out. Last fall, the Caspian pipeline consortium, made up of the Kazakhs and a few western companies, signed a deal with the Kazakh government to construct a pipeline which will terminate in the Black Sea area. For now, it's my understanding that Chevron has signed a deal with Parker to provide interim transport via rail, truck, pipeline, coaster, camel, and anything else they can find, to get some cash flow going.
The big mistake to make is to assume that there is a functional infrastructure here. While it is true that the Russians partially developed the oil resources of the region, it is also true that they havn't been here since '91, when the republic came into being. There has been no money for upgrades or upkeeps since then, and things are quite literally falling apart. The field I work in has about 300 wells, and about 15 of them are capable of production. There are about 20 full-sized Roumanian drilling rigs which are simply standing idle (cold stacked) over the last well they drilled, like flying Dutchmen. They have been this way for about 6 years, on average. Every one is junk iron.
There may well be pipelines in this region - but my guess is that they lead to processing plants in Russia. Recall that the Soviets considered oil as a military asset, the pipelines they constructed were very thoroughly networked to overcome potential localized damage due to military strikes. The processing plants in Russia are trying desperately to maximize cash revenue right now - which means that they are strongly inclined to process and sell their own products, not imports. Be prepared to take the hind tit. The project I am currently on suffers from the same malaise, we have two pipelines which go to Russia and our production is frequently limited by the other end.
My point here is that you should be very careful. Is this comapny a member of the consortium? Ask for details about the "infrastructure" and its condition. The Soviets used to construct complete towns to house the various services and oil workers for a field development - is there one here? Has the play been developed at all (aside from the exploration well)?
Finally, you should find out if there is any hydrogen sulphide or carbon dioxide associated with the play. There certainly is over at Tenghiz, and we have it too. These two make for extremely corrosive environments, which have certain cost implications, one of which is that the well completion cost a lot more and the substances must be mostly removed before shipping them into the pipeline.
1. Find out about the production stream (H2S, CO2)
2. Find out where the pipelines go, and who they currently service.
3. Find out what they mean by "infrastructure."
Good Luck, Aggie. |
