Optimistic forecasts for Kazakhstani oil sector: 10th KazEnergy Forum01 october 2015, 20:11
10th Eurasian Kazenergy Forum has kicked off in Astana on September 29 gathering 2000 participants for three days, Tengrinews reports.
Kazakh Minister of Energy Vladimir Shkolnik has read out congratulations on the 10th anniversary of KazEnergy from President of Kazakhstan Nursultan Nazarbayev, 24.kz reported.
"Energy, oil and gas sectors are driving segments of the country’s economy. In 10 years since its inception, Kazenergy has strengthened its role as the leading association in the field. The Association, a liaison between the state and businesses renders support in attracting investments for implementation of new technologies. The Eurasian KazEnergy Forum has developed along with the Association," Nazarbayev wrote.
The Forum themed "New Horizons in Energy: Perspectives for Cooperation and Investments" gathered the Prime Minister of Kazakhstan Karim Massimov, former PM of France François Fillon, former PM of Russia and Chariman of the Board at Gazprom Viktor Zubkov and Nuer Baikeli, Director of the National Energy Administration & Vice Chairman of the National Development and Reform Commission of China as key speakers.
It is expected that a number of memorandums will be signed at the Forum including memorandums on cooperation between the Ministry of Energy, Kazenergy Associations, PSA, NCOC and Karachaganak Petroleum Operating B.V.
Speakers of the Forum were pretty positive despite low oil prices.
Vice-Minister of Energy of Kazakhstan Uzakbay Karabalin was asked about the strategies Kazakhstan had for the case of further deterioration of oil prices. In particular, the journalists were interested in Kazakhstan's cooperation with China in case of decreasing oil prices.
"There is a famous classic novel that says, 'All happy families are alike; each unhappy family is unhappy in its own way'. (…) As for the measures taken in case there is the decrease of oil prices continues, we have been discussing this with the Chinese side only in the context of our joint enterprises. As for all the other area, each side has its own way of thinking, each relies on their own knowledge and potentials. Today there are probably no companies left that have not come up with a plan B for different oil price scenarios," Vice-Minister Karabalin said.
Aside from his literary allusion to Leo Tolstoy's Anna Karenina, Karabalin said that in that situation, the main goal would be to prevent layoff in oil companies.
"In the companies where we work together with the Chinese, we have worked everything out. Expenses are being minimized, including capital expenditures - a traditional scenario for any oil company in conditions like these. The only thing that we are doing non-traditionally is we are asking all the oil companies working in Kazakhstan, regardless of their country of origin, not to lay off workers and not to decrease salaries. It is not an easy thing to do. The payroll budget constitutes a massive part of the prime costs. But to credit of our Chinese partners, they have been following our requests and instructions. As of today there have been no layoffs (in the companies with Chinese participation). KazMunaiGas, our national company, has not layed anyone off either. So far we have had around 490 layoffs, with a part of them originating from the reorganization of NCOC. 0.4% in these conditions is a good result," Karabalin said.
Chairman of Kazenergy Association Timur Kulibayev is quoted by primeminister.kz as saying that Kazakhstan would be able to retain the current level of oil production despite the prices on the international market.
"Although oil prices are very low now, and Kazakhstan's energy sector is experiencing problems same as all the other large oil producing areas, we see that our large projects are still capable of maintaining the current level of production in Kazakhstan and even increase it later on," Kulibayev said.
According to Kulibayev, Kazmunaigas and its partners will make a decision on expansion of the Tengizchevroil project next year. "In the beginning of 2020, Kazakhstan will exceed the oil production level of 2 million barrels a day and join the ten biggest oil and gas producers in the world," Kulibayev declared.
Despite the optimistic forecasts, the Ministry of Energy of Kazakhstan reported that the countries reviewed its production plans and decreased the planned volume of oil production for 2015 from 83 million tons to 79 million tons.
By Gyuzel Kamalova, editing by Tatyana Kuzmina (Assemgul Khassenova contributed to the story)