Exploration

Kalamkas‑Sea is located in the centre of the North‑East part of the Caspian Sea at a depth of 6–7 m. Productive are Middle Jurassic horizons. Khazar is located in Kazakhstan’s part of the Caspian Sea within the Mangistau Region. It was discovered in 2007 when a mini‑DST helped produce oil flow while drilling from the Khazar‑1 well. Later, the Company conducted a 3D seismic survey at Khazar to update geological data, determine the geometry of the pay zone, and perform sedimentary basin analysis to study sand bodies. The field’s Middle and Lower Jurassic formations present an oil and gas bearing potential.

Production is scheduled for 2029–2030 (first batch). The expected annual peak production will be 4 mln tonnes of oil (around 80 thous. bbl per day). The project will require more than USD 6 bln of investments, including infrastructure building, well drilling, installation of offshore platforms, and environmental measures.

Exploration highlights in 2024

In 2024, exploration, pre‑drilling, engineering, survey, and infrastructure preparations delivered good results. The reprocessing and reinterpretation of 3D seismic data for Kalamkas‑Sea are finished, and the Definition phase, contracting and tendering preparations along with various workshops are completed.

The FEED stage was key in 2024. On 10 October, Kalamkas‑Khazar Operating signed an agreement with LUKOIL‑Engineering’s affiliate FES and KMG Engineering to perform FEED.

Plans for 2025–2030

In 4Q 2025, the Company plans to finish drafting a document package to make a FEED investment decision and launch tenders for platform construction. The final investment decision (FID) is expected to be made in 2025, to be followed by the start of project implementation and construction of offshore platforms in 2026. Commercial production is to start in 2029, with 2030 set as the planned year. These stages will be key for the project to reach targets.

Economic and social significance

The project has a great economic and social value as it will expand the export potential and increase revenue streams to the federal budget, while also creating new jobs and developing local infrastructure. The project will leverage cutting‑edge engineering solutions, such as the construction of offshore platforms at Kazakhstan shipyards.

Preparations (2023–2024)

In 2023–2024, the Company conducted large‑scale preparations prior to drilling a PZ‑1 prospecting well. The steps included detailed exploration, drafting design documents, and procuring deep‑hole drilling equipment.

Current status (January 2025)

In late May 2024, the Company started to drill a PZ‑1 prospecting well with a design depth of 5,500 m. As of 1 January 2025, 4,985 m were drilled. Drilling continues as planned.

Plans for 2025

In 2025, the Company plans to finish drilling the PZ‑1 prospecting well and test it for productivity with a view to updating reserve estimates and make further development decisions.

Geological profile and potential

KMG estimates recoverable resources at 133 mln tonnes of oil (1,047 mln bbl). Prospective formations mainly lie at a depth of up to 5,500 m. The Company will drill a minimum of one prospecting well.

Karaton Subsalt is adjacent to Tengiz which makes it strategically important for exploration and further oil production. However due to its complex geology, the block requires cutting‑edge drilling and exploration solutions to be applied.

Current status (January 2025)

On 23 November 2024, the Company started to drill an SG‑8 prospecting well with a design depth of 5,500 m. The first stage of drilling 2,410 m is now completed. The Company is currently mobilising drilling equipment, preparing infrastructure, and procuring the required materials.

Plans for 2025

In March 2025, KMG will embark on the second stage of drilling the SG‑8 well, including continued drilling, geophysical surveys, and core sample testing. Exploration will be ongoing to update the profiles of productive horizons.

Prospects

In case of successful exploration the project is set to become an important pillar of Kazakhstan’s oil production infrastructure. Potential annual production may reach 5 mln tonnes of oil at peak development.

Zharkyn, Bolashak, and Northern Ozen are located in the Mangistau Region, with the western Bolashak jutting out into the Caspian Sea. Mugodzhary and Berezovsky are located in the Aktobe and West Kazakhstan regions, respectively.

Owner and financing

KMG Barlau, KMG’s 100% subsidiary, is the licence owner. KMG provides full financing for the project by increasing KMG Barlau’s authorised capital.

Progress

At Northern Ozen, KMG Barlau performed a 3D seismic survey of 401 km² followed by data processing and interpretation.

Zharkyn, Berezovsky, Mugodzhary, and Bolashak saw 2D seismic of 4,875 linear km in total.

Processing and interpretation of seismic data for Zharkyn, Berezovsky, and Northern Ozen are completed. For Bolashak, historical data for 1,600 linear km are reprocessed and reinterpreted.

Current status

At present, the Company is processing and interpreting 2D field seismic data for Mugodzhary and Bolashak, to be completed in 2Q 2025.

The Company obtained subsoil exploration licences (project 2.0) for three new blocks – Bereke, Shygys, and Southern Shu‑Sarysu. Financed through returns on investment in subsoil exploration 1.0, this project will serve to expand KMG’s exploration programme.

Current status

• The reprocessing and reinterpretation of 2D seismic data for 4,000 linear km (Stage 2) are completed.
• Public hearings for a 3D seismic project for 550 km ² are held.
• An exploration project and Addendum 1 are approved.
• The Company completed modelling for the Middle Caspian using data for the Tsentralnoye field and a new V‑1 well at Zhenis.
• An addendum to the 3D seismic project is being drafted to reduce the volume and change timelines.

• Operator: Becturly Energy Operating.
• Project participants: KMG (50%) and Kokel Munay (50%).
• Project financing: Kokel Munay covers 100% of project costs. Hydrocarbon evaluation is completed, addenda to the production testing project are being drafted.

Current status

• A production sharing agreement is at the stage of drafting.
• Due to Gazprom having gas export monopoly according to Russian laws, negotiations are underway with the company on gas selling terms and obtaining a 25% interest in the project.
• In 2021, an addendum to the development scheme was drafted and reserves were estimated.
• At present, Caspian Oil and Gas Company is preparing pre‑FEED inputs.

Current status

• In 2021, the project saw a feasibility study prepared which resulted in negative economic viability for all development options. That said, the participants decided to minimise Tsentralnaya Oil and Gas Company’s operations and are looking for options to streamline the project.
• In 2022, an exploration licence was extended, with an appraisal well to be drilled before 2031.
• Appraisal is to be completed in 2034.

• The project relies on the agreement between Kazakhstan and Russia on delimiting the bottom of the northern Caspian Sea to exercise sovereign subsoil use rights.
• A production sharing agreement for Kurmangazy was signed on 6 July 2005.
• Subsoil users are KMG (50 %) and RN‑Exploration (50 %).
• Financing is provided on a 50/50 basis.
• The project operator is Kurmangazy Petroleum.
• On 11 April 2024, KMG and Kazakhstan’s Ministry of Energy signed Addendum 3 to the production sharing agreement which transferred subsoil rights of MNC KazMunayTeniz to KMG.
• At present, the parties are negotiating with government authorities to agree upon economic terms of the production sharing agreement and draft Addendum 4 providing for extended exploration and subsoil area expansion.